Q4 2020 Akebia Therapeutics Inc Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to <unk> Therapeutics fourth quarter of 2020 financial results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During this session on need to press star one on your telephone please be advised that it.
Operator: Ladies and gentlemen, thank you for standing by, and welcome to Akebia Therapeutics' fourth quarter 2020 financial results. At this time, all participants are in a listen-only mode. To ask a question...
Operator: Please be advised that today's conference is being recorded. If you require any further assistance, please press star 1. I would now
This conference is being recorded.
Any further assistance. Please press star Zero I would now like to hand, the conference over to your Speaker today, Kristen Sheppard Senior Vice President of Investor Relations.
Justin Shepard: Justin Shepard, Senior Vice President. Thank you, and welcome to Akebia's 4th Quarter and Fiscal Year 2020 Financial Results and Business Update Conference Call. Please note that the press release detailing our results for the 4th Quarter and Fiscal Year 2020 was issued earlier this morning and is available on our Investor Relations website. For your convenience, a replay of today's call will also be available on our website shortly after we conclude today's event.
Thank you. Please go ahead.
Okay.
Justin Shepard: Joining me for today's event is John Butler, our Chief Executive Officer, and David Spellman, our Chief Financial Officer. Before we begin, I'd like to remind everyone that this call includes forward-looking statements. Each forward-looking statement contained in this call is subject to risks and uncertainties that can cause actual results to differ materially from those described in these statements. Additional information regarding these factors is described in the Forward-Looking Statements section of the press release we issued earlier today, as well as in the Risk Factors and Management's Discussion and Analysis sections of our most recent quarterly and annual reports filed with the FCC.
Justin Shepard: The foregoing statements on this call speak only of the original date of this call, and, except as required by law, we do not undertake any obligation to update or revise any of these statements. With that, I'd now like to introduce our CEO, Jon Butler.
Date of this call and accept as required by law, we didn't have it on to take any obligation to update or revise any of these statements.
With that and now like to introduce our C E O John Butler John.
[laughter]. Thank you Christian and thank you all for joining us today.
John P. Butler: Thank you, Kristen, and thank you all for joining us today. 2020 was a year of focused execution for Akebia. We set out to accomplish a lot in 2020, and we did what we said we would. Advancing Vatidustat, our lead product candidate, and laying the groundwork for a number of catalysts in 2021.
2020 was a you're focused execution for akiba.
We set out to accomplish a lot in 2020.
And we did what we said we would do advair.
Advancing gotta do stat or lead product candidate and laying the groundwork for a number of catalysts in 2021.
More specifically, we achieved key clinical and regulatory milestones, including completing our global phase III clinical development program provided do stat, and completing our pre NDA meeting with the FDA.
John P. Butler: More specifically, we achieved key clinical and regulatory milestones, including completing our global phase three clinical development program for Vatadustat and completing our pre-NDA meeting with the FDA. We also executed well against our commercial priorities. After securing the first regulatory approval of Vatadustat with our partner MTPC earlier in the year, we began supporting the commercialization of Vatadustat in Japan under the trade name Vafseo in Q3. As a company whose purpose is to better the lives of people impacted by kidney disease, I've been saddened to watch the disproportionate impact COVID-19 has had on patients on dialysis.
We also executed well against our commercial priorities.
After securing the first regulatory approval about adduced at with our partner MTBC earlier in the year, we began supporting the commercialization of that'd do said in Japan under the trade name Vaxjo in Q3.
As a company, whose purpose is to better the lives of people impacted by kidney disease I've been saddened to watch the disproportionate impact COVID-19 has had on patients on dialysis R.
Our team did a tremendous job of helping ensure that these patients who continued to be at the highest risk have access to or therapies. Despite the pandemic.
John P. Butler: Our team did a tremendous job of helping ensure that these patients, who continue to be at the highest risk, have access to our therapies despite the pandemic. As a result of these and other efforts, we grew Erexia revenue over 2019. I'm incredibly proud of our entire team for all their work across 2020 and their continued commitment to both our purpose and our patients. Importantly, we achieved all this and more while keeping true to our goal of maintaining a strong balance sheet.
As a result of these on other efforts we grew auryxia revenue over 2019.
I'm incredibly proud of our entire team for all their work across 2020.
And their continued commitment to both our purpose and our patients.
Importantly, we achieved all this and more while keeping true to our goal of maintaining a strong balance sheet.
With forward momentum from 2020, we have line of sight a significant milestones. This year that we believe will further position akiba to deliver on our strategy and build long term value for our shareholders.
John P. Butler: With forward momentum from 2020, we have line of sight to significant milestones this year that we believe will further position Akebia to deliver on our strategy and build long-term value for our shareholders. Our highest priority is submitting our NDA for Vatadustat for the treatment of anemia due to CKD to the FDA. Since completing our pre-NDA meeting in late October, our team has been hard at work putting together a very detailed and comprehensive data package in support of AduDuSTAT's NDA submission. We remain firmly on track to achieve this milestone by the middle of the second quarter of this year.
Our highest priority of submitting our NDA from that'd do stat for the treatment of anemia due to C. K D with the FDA.
Since completing our pre NDA meeting in late October our team has been hard at work, putting together, a very detailed and comprehensive data package and supportive added new stats NDA submission.
We remain firmly on track to achieve this milestone by the middle of the second quarter of this year.
We also expect to follow this with about a new sets MAA submission to the EMA in collaboration with Otsuka This year.
John P. Butler: We also expect to follow this with Vatadustat's MAA submission to the EMA in collaboration with Otsuka this year. As we advance Vatidustat towards commercialization, subject to approval, we continue to execute on key commercial, development, and financial priorities across our business. As dialysis is a primary focus, I'll start there. Data from Innovate, our global phase three program that evaluated the efficacy and safety of Atadustat in patients on dialysis, were clear, consistent, and compelling.
As we advanced <unk> towards commercialization subject to approval, we continue to execute on key commercial development and financial priorities across our business.
As dialysis as a primary focus I'll start there.
Data from innovate our global Phase III program that evaluated the efficacy and safety about adduced debt in patients on dialysis, we're clear consistent and compelling the.
The data showed that better do set achieve non inferiority to darva potent alpha on both the primary and key secondary hematologic efficacy endpoints as well as the primary and secondary safety endpoints that included mace expanded mace cardiovascular mace cardiovascular mortality and all cause mortality.
John P. Butler: The data showed that Vatidustat achieved non-inferiority to Darbacoat and Alpha on both the primary and key secondary hematologic efficacy endpoints, as well as the primary and key secondary safety endpoints that included mace, expanded mace, cardiovascular mace, cardiovascular mortality, and all-cause mortality, going a little deeper, our clinical data also demonstrated that Vatadustat maintained EPO within a physiologic range, increased hemoglobin in a predictable and controlled manner, and minimized hemoglobin excursions above that target range.
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Going a little deeper are clinical data also demonstrated that that'd do stat maintained IPOH within a physiologic range increased hemoglobin in a predictable and controlled manner and minimized hemoglobin excursions above that target range.
We believe dialysis represents a potential 2 billion dollar market opportunity in the U S alone.
John P. Butler: We believe dialysis represents a potential $2 billion market opportunity in the U.S. alone. We're confident that upon approval, we have the potential to address the unmet needs of the over 500,000 adult patients on dialysis in the U.S. and rapidly establish Vatadustat as the new oral standard of care for the treatment of anemia due to CKD. We anticipate that the strength of our data, which is clear and consistent across both prevalent and incident dialysis patients, will play a meaningful role in helping develop treatment protocols within dialysis providers, which are critical to driving adoption in the dialysis market, subject, of course, to regulatory approval.
We're confident that upon approval, we have the potential to address the unmet needs of the over 500000 adult patients on dialysis in the U S and a rapidly established that adduced at as the new oral standard of care for the treatment of anemia due to see Katie.
We anticipate that the strength of our data, which is clear and consistent across both prevalent and incident dialysis patients will play a meaningful role in helping develop treatment protocols within dialysis providers, which are critical to driving adoption in the dialysis market subject of course to regulatory approval.
John P. Butler: To further strengthen Vatidustat's potential profile for in-center dialysis patients, we're working to demonstrate that Vatidustat can also be dosed three times a week and plan to have that data available at launch, which will allow us to submit an SNDA for this regimen post-approval. Although the significant majority of dialysis patients are cared for in a center, recently several factors, including the COVID-19 pandemic, changing patient preferences, government initiatives, and reimbursement changes are supporting a shift toward home dialysis.
To further strengthen better do steps potential profile for incenter dialysis patients, we're working to demonstrate that better <unk> can also be dose three times, a week and planned to have that data available at launch which will allow us to submit an ex NDA for this regiment post approval.
Although the significant majority of dialysis patients are cared for in center recently, several factors, including the COVID-19 pandemic <unk>.
Changing patient preferences government initiatives and reimbursement changes are supporting a shift towards home dialysis.
We believe that as a convenient once daily oral therapeutic aditus that has the potential to offer an important value proposition both to the growing number of home dialysis patients and to dialysis providers looking to better support these patients and grow their home programs.
John P. Butler: We believe that as a convenient, once-daily oral therapeutic, Vatadustat has the potential to offer an important value proposition, both to the growing number of home dialysis patients and to dialysis providers looking to better support these patients and grow their home program. We believe we are well positioned to support a strong Vatidustat launch in dialysis in the U.S. upon approval. Our go-to-market strategy includes leveraging our existing nephrology-focused commercial organization, with our partner Otsuka sharing in the launch costs and responsibility.
We believe we are well positioned to support a strong that adduced at launch in dialysis in the U S. Upon approval.
Or go to market strategy includes leveraging our existing nephrology focused commercial organization.
With our partner Otsuka sharing in the launch costs and responsibilities.
As well, we have an exclusive distribution relationship with <unk> farmer that positions, rather do stack for potential rapid adoption and up to 60% of the U S dialysis market.
John P. Butler: As well, we have an exclusive distribution relationship with V4 Pharma that positions Vatadustat for potential rapid adoption in up to 60% of the U.S. dialysis market. Added to this is a unique reimbursement model in the U.S. dialysis market with TDAPA, an add-on payment to the bundle that's intended to encourage adoption of innovative therapies by clinicians and dialysis providers. To maximize our market potential and ensure commercial readiness upon U.S. approval, we're executing across many different work streams within medical affairs, scientific communications, disease state education, patient services, and manufacturing.
Adding to this is a unique reimbursement model in the U S dialysis market with TDAP and add on payment to the bundle. That's intended to encourage adoption of innovative therapies by clinicians and dialysis providers.
To maximize our market potential and ensure commercial readiness upon U S approval.
<unk> across many different work streams within medical Affairs scientific communications disease State education patient services and manufacturing.
We also recently added Liane zone wall to our board of directors.
John P. Butler: We also recently added Leanne Zumwalt to our Board of Directors. Many of you may know Leanne as she spent over 20 years serving in key leadership roles with DaVita, most recently as Group Vice President of Government Affairs before her retirement earlier this year.
Many of you May know Liane as you spend over 20 years, serving in key leadership roles with Davita. Most recently as group Vice President of Government Affairs before her retirement earlier this year.
Liane perspective, and extensive operating experience with one of the largest dialysis providers in the U S will help ensure that our market and commercial strategies are well aligned with the needs of dialysis providers and their patients.
John P. Butler: LeAnne's perspective and extensive operating experience with one of the largest dialysis providers in the U.S. will help ensure that our market and commercial strategies are well-aligned with the needs of dialysis providers and their patients. We, along with the Executive Steering Committee, who has overseen our Phase 3 development program, believe it is critical to publish our data. And collectively, we continue to execute on our robust publication plan. To date, this has included the presentation of our Phase 3 data at ASN and publication of both our Innovate and Protect Methods papers in peer-reviewed journals during the fourth quarter.
We along with the executive Steering Committee, who is overseeing our phase III development program believe it is critical to publish our data and collectively we continued to execute on a robust publication plan.
To date. This is included the presentation of our phase III data at ASN and publication of both are innovate and protect methods papers in peer review journals during the fourth quarter looking.
Looking ahead, we plan to present additional data at the upcoming Mkf's spring clinical meetings in April and we have line of sight. The publication of our innovate program and a prestigious peer reviewed publication expected in the near term.
John P. Butler: Looking ahead, we plan to present additional data at the upcoming NKF Spring Clinical Meetings in April, and we have line-of-sight to publication of our Innovate program in a prestigious peer-reviewed publication expected in the near term. Protect has been submitted earlier this year for publication as well.
Protect has been submitted earlier this year for publication as well.
Again, there is a significant unmet need among patients with anemia due to C. K D.
John P. Butler: Again, there is a significant unmet need among patients with anemia due to CKD, and we see a promising opportunity in Vatidustat to advance the care of patients on dialysis. Turning to non-dialogues.
And we see a promising opportunity and <unk> to advance the care of patients on dialysis.
Turning to non dialysis.
As we discussed last quarter, we plan to submit data from protect together with additional analyses and pursue abroad label for adult patients non on dialysis as part of our <unk> NDA submission.
John P. Butler: As discussed last quarter, we plan to submit data from PROTECT together with additional analyses and pursue a broad label for adult patients not on dialysis as part of our Vatidustat NDA submission. However, as PROTECT missed the primary MACE endpoint, we are remaining cautious on potential approval in non-dialysis patients. Now, in compiling the NDA, we've been able to take a deeper dive into the data to better understand Protex MACE results. The cardiovascular outcomes reported in PROTECT contrast with those reported in the INNOVATE program, as well as with the safety data from other clinical and preclinical studies of adidustat in both dialysis and non-dialysis adult patients.
However, as protect missed the primary may send point, we are remaining cautious on potential approval and non dialysis.
Now when compiling the NDA, we've been able to take a deeper dive into the data to better understand protects mace result, the.
The cardiovascular outcomes reported and protect contrast, with those reported in the innovate program.
As well as with the safety data from other clinical in preclinical studies about adduced at invoke dialysis and non dialysis adult patients.
Additional in depth analyses conducted by our team continued to demonstrate that the greater number of mace events observed among that adduced that patients non on dialysis as compared with those on <unk> and alpha in the protect program was primarily related to an excess of non cardiovascular deaths and deaths of unknown.
John P. Butler: Additional in-depth analyses conducted by our team continue to demonstrate that the greater number of MACE events observed among Vatodustat patients not on dialysis, as compared with those on Darbopoetin Alpha in the PROTECT program, was primarily related to an excess of non-cardiovascular deaths and deaths of unknown cause in regions outside of the United States where significant differences in treatment patterns for patients not on dialysis were. As we've We continue to believe that pursuing approval in non-dialysis is the right thing to do for patients, and we look forward to working with the FDA in their review.
Cause in regions outside of the United States, where significant differences in treatment patterns for patients non on dialysis were observed.
As we've previously discussed we believe these and other analyses inform the cardiovascular safety profile of added these staff and use patients non on dialysis. We continue to believe that pursuing approval and non dialysis is the right thing to do for patients and we look forward to working with the FDA in their review.
In addition, I want to share that is part of our NDA work, we undertook a review of hepatic safety across Nevada do Stat clinical program, which includes data from over 8000 patients across 36 completed phase one two and three clinical studies conducted by <unk> and our partner.
John P. Butler: In addition, I want to share that as part of our NDA work, we undertook a review of hepatic safety across the Vatadustat clinical program, which includes data from over 8,000 patients across 36 completed Phase I, II, and III clinical studies conducted by Akebia and our partner, MTPC. The review of hepatic safety included a blinded assessment of all hepatic events in the studies by a panel of hepatic experts and analysis by an independent hepatic expert and our team.
MTBC.
The review of hepatic safety included a blinded assessment of all hepatic events in the studies by a panel of panic experts and analysis by an independent hepatic expert and our team.
I'm very pleased to report that based on this review we concluded that the data across the clinical program show that the hepatic safety profiles, a valid used at and Darva potent alpha an injectable Esa and the current standard of care appear to be similar.
John P. Butler: I'm very pleased to report that, based on this review, we concluded that the data across the clinical program showed that the hepatic safety profiles of Vatadustat and Darbopoetin Alpha in injectable ESA and the current standard of care appear to be similar, and that there were no HIGHS law events identified across the entire Vatadu Stack Clinical Development Program. More specifically, we concluded that a 2014 case previously reported by us as meeting the biochemical criteria for High's Law, while complicated, was, in fact, not a case of High's Law.
And that there were no highs law events identified across the entire that'd be stacked clinical development program.
More specifically we concluded that a 2014 case previously reported by US as meeting the biochemical criteria for highs law, while complicated wasn't fact, not a case of highs law.
Our conclusion on this case will be reflected in our NDA for vetted do staff.
John P. Butler: Our conclusion on this case will be reflected in our NDA for VATA. We wanted to share this report finding as we believe it reinforces what we expect will be a high-quality NDA submission for Vatadu Stats. As well, this finding reinforces our confidence around the long-term strategic vision for Vatidustad, an important aspect of this strategy being focused on innovation.
We wanted to share. This report finding as we believe it reinforces what we expect will be a high quality NDA submission from <unk>.
As well this finding reinforces our confidence around the long term strategic vision for that or do staff.
An important aspect of this strategy is focused on innovation so.
So let me shifted a little bit and talk about our future development plans.
John P. Butler: So let me shift a little bit and talk about our future development. Innovation is a core capability at Akebia that we have built over the past decade with robust research and clinical development research. This engine has yielded significant scientific advancements, including Vatadustat, which is based on Nobel Prize-winning science.
Innovation is a core capability to keep you on that we have built over the past decade with robust research and clinical development resources. This engine has yielded significant scientific advancements, including that adduced at which is based on Nobel Prize winning science.
While the near term and largest commercial opportunity for about adduced that is within anemia due to C. K D. We believe there is the potential for additional opportunities for <unk>.
John P. Butler: While the near-term and largest commercial opportunity for vatadustat is within anemia due to CKD, we believe there is the potential for additional opportunities for vatadustat. We're encouraged that the current study evaluating the use of Atadustat as a potential therapy to prevent and lessen the severity of acute respiratory distress syndrome, or ARDS, in adult patients who've been hospitalized due to COVID-19 is progressing well As a reminder, this is a Clinical Investigator Sponsored Study led by UTHealth that we provided supportive funds for last year.
We're encouraged that the current study evaluating the use of added to use that as a potential therapy to prevent and lessen the severity of acute respiratory distress syndrome, or a rds an adult patients who've been hospitalized due to the COVID-19 is progressing well.
As a reminder, this as a clinical investigators sponsors study led by U T health that we provided supportive funds for last year.
<unk> health assured that over 120 patients are enrolled and recently announced that they have been awarded five $1 million in funding from the U S Department of defense to expand this clinical trial at their facilities.
John P. Butler: UCHealth has shared that over 120 patients are enrolled and recently announced that they have been awarded 5.1 million dollars in funding from the U.S. Department of Defense to expand this clinical trial at their facility. If the results of this study are positive, we believe this COVID-related clinical experience could offer possibilities not only to move forward and help COVID patients but also to explore Vatadustat for a large and enduring opportunity as a treatment for ARDS beyond COVID.
If the results of the study or positive. We believe this COVID-19 related clinical experience could offer possibilities not only to move forward and help COVID-19 patients, but also to explore vatted used that for a large and enduring opportunity as a treatment for <unk> beyond COVID-19.
After being relatively quiet in 2020, we look to share more information on potential development opportunities for about a deuce that later this year and where possible updates from Ut health.
John P. Butler: After being relatively quiet in 2020, we look to share more information on potential development opportunities for Vatidustat later this year and, where possible, updates from UTHealth. To sum up, as we transition to 2021, we plan to continue executing to prepare for the expected commercialization of Atadustat while investing in potential opportunities to help position Akebia for the long term. We're pleased to be doing all this from a place of financial strength with a cash runway that extends beyond the expected U.S. launch of Vatadustat, assuming timely regulatory approval and the receipt of associated regulatory milestones. And, as Dave will discuss, we remain committed to both maintaining a strong balance sheet and improving our cost structure moving forward.
To sum up as we transition to 2021, we plan to continue executing to prepare for the expected commercialization about adduced at while investing in potential opportunities to help position akiba for the long term.
We're pleased to be doing all this from a place of financial strength with a cash runway that extends beyond the expected U S launch a vet adduced at assuming timely regulatory approval and the receipt of associated regulatory milestones.
And as day, we'll discuss we remain committed to both maintaining a strong balance sheet and improving on a cost structure moving forward.
In furtherance of these objectives, we recently announced the $60 million transaction with healthcare royalty partners to monetize are vaxjo royalties on sales milestones under our collaboration agreement with MTBC.
While Dave will provide more detail. Shortly we believe this transaction is strong validation of the value that vaxjo can bring to patients in Japan.
As well, we believe it underscores our commitment to preserving both our strategic and financial flexibility, while investing for the successful launch about abuse that upon approval.
John P. Butler: In furtherance of these objectives, we recently announced a $60 million transaction with health care royalty partners to monetize our Vafseo royalties and sales milestones under our collaboration agreement with MTPC. While Dave will provide more details shortly, we believe this transaction is strong validation of the value that VASIO can bring to patients in Japan. As well, we believe it underscores our commitment to preserving both our strategic and financial flexibility while investing for the successful launch of Adustat upon approval.
As we head into the next chapter of Akiba, There's a lot of important work ahead of us in 2021.
We remain confident that are hard work in 2020 has laid the foundation for the year ahead and.
And the journey that were on for the longer term.
We're excited about the future and together with our collaborator Otsuka, we look forward to bringing that'd do stat for the treatment of anemia due to see.
The patients globally upon approval.
I will now turn the call over to Dave who will review our financial results.
John P. Butler: As we head into the next chapter of Akebia, there's a lot of important work ahead of us in 2021. But we remain confident that our hard work in 2020 has laid the foundation for the year ahead and the journey that we're on for the longer term. We're excited about the future, and together with our collaborator, Otsuka, we look forward to bringing Vatadustat for the treatment of anemia due to CKD to patients globally upon approval. I'll now turn the call over to Dave, who will review our financial results. Dave?
Dave.
Thank you John and good morning, everyone.
As John discussed, we met key Goldman Twenty-twenty, including the headline completing our phase III development program provided is that.
We also demonstrated the resiliency of our organization and business in response to challenges across the year. Despite.
Despite these challenges I'm pleased that we were able to continue supporting our patients and customers.
And accomplish all that we did while keeping with our objective to maintain a strong balance sheet.
This progress underscores our focus on on execution and our commitment to our patients.
Before reviewing or 2020 financial results.
To provide some detail around our recent 60 million non dilutive transaction with healthcare royalty partners to monetize R. A F sale royalties and associated sales milestones under our collaboration agreement with that DPC, which for clarity is not included in our 2020 results.
David A. Spellman: Thank you, John, and good morning, everyone. As John discussed, we met key goals in 2020, including the headline, completing our phase three development program for Vatidustad. We also demonstrated the resiliency of our organization and business in response to challenges across the year. Despite these challenges, I'm pleased that we were able to continue supporting our patients and customers and accomplish all that we did while keeping with our objective to maintain a strong balance sheet.
Under the terms of the agreement with each CRP keep your season upfront cash payment of $45 million and is eligible to receive an additional 15 million if certain sales milestones are achieved.
In exchange each TRP has the right to receive Seo royalties in sales milestones due to us under our collaboration agreement subs.
Subject to an annual cap of $13 million and an aggregate cap of 150 million.
David A. Spellman: Before reviewing our 2020 financial results, I'd like to provide some detail around our recent $60 million non-dilutive transaction with healthcare royalty partners to monetize our Vafseo royalty and Associated Sales Milestones under our collaboration agreement with MPPC, which, for clarity, is not included in our 2020 results. Under the terms of the agreement with HCRP, Akebia will receive an upfront cash payment of $45 million and is eligible to receive an additional $15 million if certain sales milestones are achieved.
After the annual cap is met in any given calendar year.
Keep you will recognize 85% of the sale royalties and sales mouth milestones from it TPC for that year.
After the aggregate cap is met keep you will recognize 100% of the vescio royalties and sales milestones until the revenue stream and under the terms of the companies collaboration agreement with MTBC.
The transaction does not include potential future regulatory milestone to be paid by MTBC.
We're very pleased with this transaction as a reminder, the third quarter Mark the first commercial availability of sales in Japan.
Since launching in late August we recorded approximately $400000 and royalty revenue related to the sale of our sales in Japan by Mitsubishi Tanabe.
David A. Spellman: In exchange, HCRP has the right to receive VASAO royalties and sales milestones due to us under our collaboration agreement, subject to an annual cap of $13 million and an aggregate cap of $150 million. After the annual cap is met in any given calendar year, Akebia will recognize 85% of VASAO royalties and sales milestones from NTPC for that year. After the aggregate cap is met, Akebia will recognize 100% of the VASAO royalties and sales milestones until the revenue stream ends under the terms of the company's collaboration agreement with MTPC. The transaction does not include potential future regulatory milestones to be paid by MTPC.
Now turn into our financial results.
Starting with revenue.
Total revenue was 56 $7 million for the fourth quarter of 2020 compared to 69 6 million for the fourth quarter of 2019.
And 295 $3 million for the full year of 2020.
Compared to 335 million for the full year of 2019.
The decline in both periods was driven by lower collaboration revenue consistent with the company successfully completed our global Phase III clinical development program provided this debt which included the innovate.
And protect studies as you know 80% of of our phase III <unk> debt development costs are pretty funded by our collaborator otsuka.
David A. Spellman: We're very pleased with this transaction. As a reminder, the third quarter marked the first commercial availability of FSAO in Japan. Since launching in late August, we have recorded approximately $400,000 in royalty revenue related to the sale of FSAO in Japan by Mitsubishi Tsunami. Now, we turn to our financial results, starting with Revenu. Total revenue was $56.7 million for the fourth quarter of 2020, compared to $69.6 million for the fourth quarter of 2019, and $295.3 million for the full year 2020, compared to $335 million for the full year of 2019.
And these corresponding payments are recorded as collaboration revenue.
So as these costs decline so will the corresponding payments.
Separately I'll note that subject to the terms of our collaboration agreement with Otsuka Akiba has the potential to receive both regulatory and commercial milestone payments from otsuka.
On the approval and commercialization of that it is that in both the us and Europe.
Collaboration revenue was 22.1 million for the fourth quarter of 2020.
Compared to $46 million for the fourth quarter of 2019.
And $166.4 million for the full year 2020, compared with $223.9 million for the full year 2019.
As I just mentioned the change in both periods is due to the time in which about adduced that development expenses are incurred and the associated revenue is recognized on a percentage of completion basis.
David A. Spellman: The decline in both periods was driven by lower collaboration revenue consistent with the company successfully completing our Global Phase III Clinical Development Program for Vatadustat, which included the Innovate and Protect Studies. As you know, 80% of our Phase III Vatidus debt development costs are pre-funded by our collaborator, Otsuka, and these corresponding payments are recorded as collaboration revenue.
Also this includes approximately 400000 in royalties from MTBC received in 2020.
In terms of Akiba as commercial performance net product revenue for Auryxia with 34 $6 million for the fourth quarter of 2020, compared with 28 9 million for the fourth quarter of 2019 and increase of 20%.
David A. Spellman: So as these costs decline, so will the corresponding payments. Additionally, subject to the terms of our collaboration agreement with Otsuka, Akebia has the potential to receive both regulatory and commercial milestone payments from Otsuka upon the approval and commercialization of Vatidustat in both the U.S. and Europe. Collaboration revenue was $22.1 million for the fourth quarter of 2020, compared to $40.6 million for the fourth quarter of 2019. 166.4 million for the full year 2020 compared with 223.9 million for the full year 2019. As I just mentioned, the change in both periods is due to the timing in which VAT-induced debt development expenses are incurred and the associated revenue is recognized on a percentage of complete basis.
And $128 9 million for the full year 2020, compared to $111 $1 million for the full year of 2019 and increase of 16%.
We are very proud that our team continued to execute across 2020 getting or therapies to those in need while we did not experience significant impact from COVID-19 on our revenues during the first nine months of 2020, we.
We believe there was an impact on our revenue growth in queue for primarily as the kidney patient populations that we serve continue to experience both higher hospitalization and mortality rates due to COVID-19.
As COVID-19 continues to adversely and disproportionately impacts our patient population. We expect the COVID-19, we will have a negative impact on future revenue growth.
Cost of goods sold was 63.2 million for the fourth quarter of 2020 compared to 38.1 million for the fourth quarter of 2019.
David A. Spellman: Also, this includes approximately 400,000 in royalties from MTPC received in 2020. In terms of Akebia's commercial performance, net product revenue for Erixia was $34.6 million for the fourth quarter of 2020, compared with $28.9 million for the fourth quarter of 2019, an increase of 20%. $128.9 million for the full year 2020 compared to $111.1 million for the full year of 2019, an increase of 16%. We are very proud that our team continued to execute across 2020, getting our therapies to those in need.
Excluding non-cash purchase accounting adjustments as a result of the merger with kerekes.
The increase in the fourth quarter of 2020 was primarily driven by a 14.8 million non-cash charge related to excess purchase commitments.
Cost of goods sold was $295.9 million for the full year of 2020, compared with $145.3 million for the full year 2019.
Cost of goods sold for 2020 includes a 115.5 million non-cash charge related to the impairment of the Auryxia intangible assets in the second quarter of 2020.
David A. Spellman: While we did not experience a significant impact from COVID-19 on our revenues during the first nine months of 2020, we believe there was an impact on our revenue growth in Q4, primarily as the kidney patient populations that we serve continue to experience both higher hospitalization and mortality rates due to COVID-19. Additionally, as COVID-19 continues to adversely and disproportionately impact our patient population. We expect that COVID-19 will have a negative impact on future revenue growth.
A 25.1 million non-cash charge related to excess purchase commitments.
And a 21 million non-cash charge for inventory write downs.
Largely related to a previously disclosed manufacturing quality issue related to Auryxia.
We expect Cogs to normalize on the second half of 2021 is we continue to focus on quality and work through remaining non-cash purchase accounting adjustments associated with inventory.
Research and development expenses were 37 6 million for the fourth quarter of 2020 compared to $80.4 million for the fourth quarter of 2019 and.
David A. Spellman: Cost of goods sold was $63.2 million for the fourth quarter of 2020 compared to $38.1 million for the fourth quarter of 2019, excluding non-cash purchase accounting adjustments as a result of the merger with Carrick. The increase in the fourth quarter of 2020 was primarily driven by a $14.8 million non-cash charge related to an excess purchase commitment. Cost of goods sold was $295.9 million for the full year 2020, compared with $145.3 million for the full year 2019.
And $218.5 million for the full year 2020, compared to 323 million for the full year 2019.
Again the decline in both periods was driven primarily by a decrease in the cough consistent with the company completing the innovate and protect studies.
We continue to expect that R&D expenses will remain significant as we continue to support.
On going planned clinical work as well as the cost of our supply chain in inventory build ahead of the expected approval about it is that.
Selling general and administrative expenses were 43 million for the fourth quarter of 2020 compared to $44.9 million for the fourth quarter of 2019.
David A. Spellman: Cost of goods sold for 2020 includes a $115.5 million non-cash charge related to the impairment of the Erixia intangible asset in the second quarter of 2020. $25.1 million non-cash charge related to an excess purchase commitment, and a $20.1 million non-cash charge for Inventory Write-Down, largely related to a previously disclosed manufacturing quality issue related to orexia. We expect COGS to normalize in the second half of 2021 as we continue to focus on quality and work through remaining non-cash purchase accounting adjustments associated with inventory.
And 153.9 million for the full year of 2020 compared to 149.5 million for the full year of 2019.
For 2021, we expect that SG&A expenses will increase modestly from 2020 as we invest in pre commercial activities for vatted used that and continue to support Auryxia.
For a bottom line the company reported on net loss of 87 million for the fourth quarter of 2020 compared to $94.5 million for the fourth quarter of 2019.
And 383.5 million for the full year of 2020 compared to $279.7 million for the full full year 2019.
David A. Spellman: Research and development expenses were $37.6 million for the fourth quarter of 2020 compared to $80.4 million for the fourth quarter of 2019, and $218.5 million for the full year 2020 compared to $323 million for the full year 2019. Again, the decline in both periods was driven primarily by a decrease in the cost consistent with the company completing the Innovate and Protect study. However, we continue to expect that R&D expenses will remain significant as we continue to support ongoing planned clinical work, as well as the cost of our supply chain and inventory build ahead of the expected approval of data-to-do status. Selling, general, and administrative expenses were $40.3 million for the fourth quarter of 2020 compared to $44.9 million for the fourth quarter of 2019.
The increase in net loss for the full year of 2020 was primarily due to lower collaboration revenue and higher Cogs, partially offset by lower operating expenses.
Turn into our capital position cash cash equivalents and available for sale Securities, where 268 7 million at December 31 2020.
This balance includes the remaining $20 million available under our alone agreement with Pharmacon that we drew down in the fourth quarter as well as 10.6 million and proceeds from the sales under our ATM in the fourth quarter.
Additionally, we added approximately $15.9 million and proceeds from ATM sales subsequent two year and.
As COVID-19 continues to adversely and disproportionately impact our patient population with higher hospitalization and mortality rates.
We expect this will have a negative impact on auryxia revenue growth.
While we are unable to fully quantify the impact of the COVID-19 pandemic on future revenues and revenue growth. We continue to work to position the company to navigate these challenges.
David A. Spellman: 153.9 million for the full year of 2020 compared to 149.5 million for the full year of 2019. In 2021, we expect that SG&A expenses will increase modestly from 2020 as we invest in pre-commercial activities for Vatadustat and continue to support Oryx. On the bottom line, the company reported a net loss of $87 million for the fourth quarter of 2020 compared to $94.5 million for the fourth quarter of 2019.
As such our financial part priorities remain focused on improving our cost structure and maintaining a strong balance sheet as evidenced by our recent royalty transaction with each day ERP that I mentioned earlier.
From a tactical perspective in addition to being disciplined on the investments we make we remain focused on quality driving efficiencies and improvements in manufacturing and supply chain, managing cough and driving operating leverage from our existing commercial resources as we move toward unexpected Valdez debt launch in the U S subject to approval.
David A. Spellman: $383.5 million for the full year of 2020, compared to $279.7 million for the full year of 2019. The increase in net loss for the full year of 2020 was primarily due to lower collaboration, revenue, and higher COGS, partially offset by lower operating. Turning to our capital position, cash, cash equivalents, and available for sale securities were $268.7 million at December 31, 2020. This balance includes the remaining $20 million available under our loan agreement with Pharmacon that we drew down in the fourth quarter, as well as $10.6 million in proceeds from the sales of our ATM in the fourth quarter. Additionally, we added approximately $15.9 million in proceeds from ATM sales subsequent to year-end.
To wrap up we expect our cash resources to fund our current operating plan beyond the expected U S launch of that abuse debt, assuming timely regulatory approval and the receipt of associated regulatory milestones.
With that will open up the line for questions operator.
Thank you.
To ask a question you'll need to price star one on your telephone to like drawing a question. Please press the pound key please stay on by a while we compiled the Q&A roster.
Our first question comes from Chris Raymond with Piper Sandler Your line is open.
I think it's just a couple of questions here, maybe first on your color on the the impact true.
Richie or the renal business, maybe writ large.
From Covid so.
First John renal.
You know of course is notoriously promotion sensitive as a specialty group is there also maybe any impact you're seeing from the fact that your reps can't access clinics, you know like they used to.
David A. Spellman: As COVID-19 continues to adversely and disproportionately impact our patient population with higher hospitalization and mortality rates, we expect this will have a negative impact on EREXIA revenue growth. While we are unable to fully quantify the impact of the COVID-19 pandemic on future revenues and revenue growth, we continue to work to position the company to navigate these challenges. As such, our financial priorities remain focused on improving our cost structure and maintaining a strong balance sheet, as evidenced by our recent royalty transaction with HCRP that I mentioned earlier. From a tactical perspective, in addition to being disciplined on the investments we make, we remain focused on quality, driving efficiencies, and improvements in manufacturing and supply chains.
And then maybe I know you guys talk sort of in generalities about how this COVID-19 impact might it might spill.
Spillover into 2021, but.
Maybe can you give some color on how to think about this.
Yeah, I guess on one hand, you know case rates across the U S had been sort of coming down.
But the first part of Q1 was was still pretty high. So maybe is there any sort of.
Any more color you can give out on how that's.
You think that would play out this year. Thanks.
Sure Chris.
So.
Certainly it's an interesting question I mean, it's hard to kind of parse it out.
I've been pretty impressed by the kinds of access I have been able to get.
It's really different parts of the country to parts of the country summer back in in the field. Some are still working on zoom, but.
David A. Spellman: Managing Costs and Driving Operating Leverage from our Existing Commercial Resources as we move toward an expected Vatidista launch in the U.S., subject to approval. To wrap up, we expect our cash resources to fund our current operating plan beyond the expected U.S. launch of VAT-induced debt, assuming timely regulatory approval and the receipt of associated regulatory milestones. With that, we'll open up the line for questions. Operator?
Quite effective when they when they get there and if you look at the fourth quarter.
<unk> for instance, I mean.
The product grew.
But just not as much as we had expected right and when you look at the overall prescriptions in the phosphate binder category. The overall prescriptions were dropping.
Now the size of the prescription a little higher but.
But it says that there is an impact from Covid and it's not just an access.
Operator: As a reminder to ask, Q&A Roster Hey, thanks. Just a couple of questions here. Maybe first on your color on the, In fact, Rixey or the renal business may be writ large. COVID.
Particularly when you listen to for Scenius Davita on their calls earlier this quarter, they're talking about a clear impact of their patients and.
There is there is data come over the source that the mortality rate among dialysis patients is 20% in way higher than the.
John P. Butler: So it, first of all, John, you know, renal, you know, of course, is notoriously promotion sensitive as a specialty group. Is there also maybe any impact you're seeing from the fact that your reps, you know, can't access clinics, you know, like they used to? And then maybe, I know you guys talk sort of in generalities about how this COVID impact might, you know, spill over into 2021, but, Um, maybe, can you give some color on how to think about this?
The rest of the population so <unk>.
Exactly how that plays out.
Is.
It is very hard obviously too.
To to say first quarter always has a soft quarter for us because we have the prior offs that we have to.
Kind of go through the team knows how to do that but.
How the excess mortality and hospitalization also plays into that is much harder to to say I mean, we've been pushing on my KCP role.
John P. Butler: I guess, on the one hand, you know, case rates across the U.S. have been sort of coming down, but the first part of Q1 was still pretty high, so maybe there's any sort of, you know, any more color you can give on how that's... uh... yes, you think that would play out Sure, Chris. So, you know, certainly it's an interesting question. I mean, it's hard to kind of parse it out. You know, I've been pretty impressed by the kinds of access our reps have been able to get. It's really different in parts of the country from parts of the country.
We talked about prioritizing dialysis patients for vaccine.
I think that's happening different states, so exactly how long this place out but if if we've lost patients we've lost patients and.
I do think that's that's going to have an impact exactly how much to be determined.
Okay, maybe thanks, and maybe also a follow up on that at least it so I think.
You're you're getting now I think a little bit more color on timing from mid mid this year.
Maybe just on use of that Pov is there a point when you'll be able to give some indication as to whether you can actually use that.
John P. Butler: Some are back in the field, some are still working on Zoom, but quite effective when they get there. And if you look at the fourth quarter, for instance, I mean, the product grew, but just not as much as we had expected, right? And you know, when you look at the overall prescriptions in the phosphate binder category, the overall prescriptions were dropping. Now the size of the prescriptions is a little higher, but it says that there is an impact from COVID, and it's not just access.
So just to clarify mid second quarter is the guidance, which is a little earlier than midyear, yes.
No from and.
We still have the potential to access to <unk>.
And that's a decision we would make with before and with Otsuka. So that we still have that but beyond that.
Not ready to comment.
Net.
Oh yeah.
John P. Butler: Particularly when you listen to Fresenius DeVita on their calls earlier this quarter, you know they're talking about a clear impact on their patients. And you know there's data, I can't remember the source, that the mortality rate among dialysis patients is 20% and way higher than the rest of the population. So you know exactly how that plays out, it's very hard, obviously, to say. First quarter is always a soft quarter for us because we have the prior operations that we have to, you know, kind of go through.
Yeah.
Christine Yeah, we will we will issue a press release and then you'll know.
Okay. Thanks, you guys.
Thank you and our next question comes from.
Your line is open.
Would you check your day.
Could you check.
I'll go to the next line.
If a young your line is open.
Yeah can you hear me.
Yes, the face.
Yeah.
My question.
John P. Butler: The team knows how to do that, but you know how the excess mortality and hospitalization also plays into that is much harder to say. I mean, we've been pushing, you know, my KCP role; we talked about prioritizing dialysis patients for the vaccine. I think that's happening in different states, so exactly how long this plays out is yet to be determined, but if we've lost patience, we've lost patience, and I do think that's going to have an impact, exactly how much yet to be determined.
To the height okay.
You were talking about eventually were able to determine what not a heightened located.
To give us a little bit more kind of on what lack of that.
Decision and then secondarily with regard to the one daily dosing the three times we.
John P. Butler: Okay, maybe, thanks, and maybe also a follow-up just on that at least, so I think... You're guiding now, I think, a little bit more color and timing, so mid this year. Maybe just on the use of that PRV, is there a point when you'll be able to give some indication as to whether you can actually use that? So, just to clarify, it's mid-second quarter is the guidance, which is a little earlier than mid-year. Yes, sorry.
Weekly dosing and how do you think it will be utilized in the field.
Sure so.
First on the highest law case.
We have.
This was a complicated case I mean, I can't stress enough I mean, there's a patient with very elevated liver enzymes levels levels, but never was hospitalized never symptomatic.
But we we said at the time when we we reported it that we were always looking at our data.
John P. Butler: Yep, no problem. And, you know, we still have the potential to access PRV, and that's a decision we would make with V4 and with Otsuka, so we still have that, but beyond that, I'm not ready to comment. Oh yeah, yeah. Thanks, Kristen.
Now hosts protect on innovate we're looking at 8000 patients and we were able to have an outside expert panel do a blind that assessment and look at all of the data with that lens and the lens of an 8000 more and beyond the highest <unk>. So the fact that.
That adduced at versus Darva poet in a product that's never been shown to have any kind of.
Liver impact.
We determined that there is.
There's really no difference between those so that's a very important finding and similarly.
Operator: Yeah, we will. We will issue a press release, and then you'll know. Okay, thanks, you guys. Thank you. And our next question: Are you there? Could you check your mute button?
With the single highest law case complicated case.
Continue to look at it looking at that as part of this blinded review we've made this determination and at the time I mentioned.
When we first reported it that this is how we had reported it to the FDA now I also mentioned in our NDA were saying that this wasn't the highest law case and we wanted to make sure that we reported that to you as well.
Operator: I'll go through it. Unknown Speaker.................. Yes, I'm here. Can you hear me?
Unknown Attendee: Yes. Hi, good morning. And thanks. Thanks for taking my question. Just a couple quick ones. With regard to the Heist Law case you were talking about, eventually, you were able to determine that it was not a Heist Law case.
And then the second question was on three times weekly versus versus daily and the.
The three times weekly dosing is important for the <unk> Center dialysis, we have those studies ongoing.
We expect to have data at launch and that will allow us to submit a supplemental NDA quickly, but one of the interesting.
Unknown Attendee: Would you give us a little bit more color on what led to that decision? And then, secondarily, with regard to the once-daily dosing versus the three-time dosing, Weekly Dose, and how do you think?
Kind of things that's happening in the dialysis treatment is that there is a really significant push towards home dialysis.
And that's the Covid impact, which is clear there are some reimbursement.
Schemes that are that are pushing people to expand that program and the dialysis providers want to expand those programs.
And.
John P. Butler: It will be utilized in the field. Sure. So first, on the Haislau case, you know, this was a complicated case. I mean, that I can't stress enough. I mean, there's a patient with very elevated liver enzyme levels, but he never was hospitalized, never symptomatic.
That's less than 20% of the market today, but the fastest growing part of the market and we think that having the once a day option for those patients is ideal and we think that will be.
Something that people will want to adopt quickly.
Thank you for taking my plan.
Thanks defect.
Thank you. Our next question comes from add.
John P. Butler: But we said at the time when we reported it that we were always looking at our data. Now, post-Protect and Innovate, we're looking at 8,000 patients, and we were able to have an outside expert panel do a blinded assessment and look at all of the data with that lens and the lens of, you know, 8,000 more patients, and beyond just the Haislau case, the fact that Vatadustat versus Darbutpoetin, a product that's never been shown to And so that's a very important finding.
H C. Wainwright on your line is open.
Great. Thanks, everyone. Thanks for taking my question.
Just a couple.
Just wanted to.
John if you could.
Discuss and a bit more detail your mentioned.
The analysis Uhm.
Protect and how.
It was found that the excellence.
Thus were primarily non cardiovascular.
And in patients ex U S.
If you could just give us a bit more detail around what you found.
And also.
Is there any possibility.
Given.
John P. Butler: And similarly, with the single Haislau case, a complicated case, continue to look at it, looking at that as part of this blinded review, we've made this determination. And at the time, I mentioned when we first reported it that this is how we had reported it to the FDA. Now, I also mentioned in our NDA that we're saying that this wasn't a Haislau case, and we wanted to make sure that we reported that to you as well. And then the second question was about three times weekly versus daily.
Does that does that.
Give you increased confidence simple potential for the approval and non balance.
And thanks for the question, it's an important one and I think I want to make sure I say upfront again.
That we did miss the overall primary safety important right on that is.
With that I think we should all be be cautious, but at the end of the day. The the question is what's the cardiovascular safety profile of the product and.
As I mentioned when you look at that.
Ex U S population you.
You did see the excess mortality was driven by non cardiovascular and deaths of unknown cause.
John P. Butler: And, you know, the three times weekly dosing is important for in-center dialysis. We have those studies ongoing. We expect to have data at launch, and that will allow us to submit a supplemental NDA quickly. But, you know, one of the interesting things that's happening in dialysis treatment is that there's a really significant push towards home dialysis. And, you know, whether that's the COVID impact, which is clear, there are some reimbursement schemes that are pushing people to expand that program, and dialysis providers want to expand those programs.
And very importantly, when you think about how non dialysis patients are treated globally and you look at some of the market's here just very different treatment paradigms for for non dialysis patients around when they start therapy, whether they are offer dialysis or non et cetera, and and there's no smoking gun here.
When you look at the overall picture.
And then you look at that use data that which we know how patients are treated very consistently there.
We think that that demonstrates that they've gotta do stat does have an acceptable risk and I think also when you think about dialysis treatment dialysis treatment as much more homogeneous across the world. Once you start dialysis and look at the innovate data it was very consistent globally. So.
John P. Butler: And that's less than 20% of the market today, but the fastest growing part of the market. And we think that having the once a day option for those patients is ideal, and we think that will be something that people will want to adopt quickly. Thank you for taking the time to join us. Thanks, D-Fect. This question comes from Ed Arce with H.C. Wainwright.
We still missed the primary safety endpoint. This will be a review issue, but we think it's the right thing for patients.
To file to submit an application for both the dialysis on non dialysis indications.
Okay, Great that's helpful.
And then just.
Antonio Eduardo Arce: Great Thanks, everyone. Thanks for taking my, Just a couple of questions. I just wanted to ask John if you could discuss in a bit more detail your mention of Protect and how it was found that the excess of deaths were primarily non-cardiovascular, and inpatientsxus.org. If you could just give us a bit more detail around what you found and what you learned, and also... Is there any possibility, you know, given, does that, I guess, give you increased confidence of a potential for approval in non-medical?
One other question.
Touched upon earlier with regards to the negative impacts of COVID-19 on on future Auryxia growth.
I was just curious as to why I think you said that the impacts really want felt until the fourth quarter.
And are expected to continue through.
At least the foreseeable future into this year.
Just curious as to what specifically.
John P. Butler: Thanks for the question. It's an important one, that we did miss the overall primary safety endpoint, right? And that is, you know, with that, I think we should all be cautious. But, you know, at the end of the day, the question is, you know, what's the cardiovascular safety profile of the product? And, you know, as I mentioned, when you look at that ex-US population, you did see the excess mortality was driven by non-cardiovascular and deaths of unknown cause.
Was missing in the second and third quarter that led to manageable.
They're okay.
I mean, it's a great question, Ed and I think when you when you look at how the the the.
The pandemic impacted across the country you saw more regional.
Differences, whereas kind of post the summer you saw on much more across the U S impact.
And it all just kind of layers.
On top of each other and.
As I mentioned I mean, the Auryxia prescriptions grew across the year, because I think that the messaging that we're delivering is having an impact.
John P. Butler: And, you know, very importantly, when you think about how non-dialysis patients are treated globally, and you look at some of the markets here, they're just very different treatment paradigms for non-dialysis patients, around when they start therapy, whether they're offered dialysis or not, et cetera. And you know, there's no smoking gun here, but when you look at the overall picture, and then you look at that U.S. data, which shows how patients are treated very consistently there, you know, we think that that demonstrates that Vatadustat does have an acceptable risk. And I think also, when you think about dialysis treatment, dialysis treatment is much more homogeneous across the world. You know, once you start dialysis, and look at the Innovate data, it was very consistent globally.
But the overall market is shrinking so so it may have been it kind of muted a little bit.
And what we were seeing but clearly as we go into the fourth quarter as I said, we still grew on the fourth quarter just not to the extent that we had expected and then when you look at the caution that we're hearing from the people who are treating these patients I think it just behooves us too.
To reflect that caution.
You as well.
Okay understood. Thanks, John.
Thank you and our next question comes from David Leibowitz, That's Morgan Stanley. Your on line is open.
Thank you for taking.
When you think about auryxia going into the first quarter do you expect to see similar disruption.
John P. Butler: So, you know, we still miss the primary safety endpoint, this will be a review issue, but we think it's the right thing for patients to file, to submit an application for both the dialysis and non-dialysis indications. That's all. And just one other question, touched upon earlier with regard to the negative impacts of COVID-19. Thank you. Thank you. Thank you. I. I was just curious. Why do you think you said that the impacts really weren't felt until the fourth quarter and are expected to continue through? I'm just curious as to what specifically, uh, was missing in the second and third quarter that led to a negligible impact.
With.
With respect to the.
D a.
I guess.
Re.
Approval, so to speak to reauthorization.
<unk>.
Yeah, Yeah, certainly I mean, that's a that's an annual event for us at this 0.2.
To ensure that all of the patients who are on.
Have a reauthorization team did a great job with that last year.
Think similarly, they're doing that this year, but it's still an impact is there is there is no question I mean, I think when you look at 20 versus 19, you saw much less stark difference.
John P. Butler: It's a great question, Ed. And I think, you know, when you looked at how the pandemic affected across the country, you saw more regional differences, whereas kind of post-the summer, you saw much more across the US impact. And it all just kind of layers on top of each other.
But.
What's really the challenge here is to layer on what's what's Covid, how is COVID-19 going to impact this as well as we seeing softness because of.
True authorizations, we'll get those done and climb or is it we're actually losing patients from the market.
John P. Butler: And, you know, as I mentioned, Erixia prescriptions grew across the year because I think that the messaging that we're delivering is having an impact, but the overall market is shrinking. So it may have been kind of muted a little bit in what we were seeing, but clearly, as we go into the fourth quarter, as I said, we still grew in the fourth quarter, just not to the extent that we had expected.
And that's that's what we have to work on it really is just to say that queue on is always soft but be.
Be cautious about kind of how COVID-19 is going to going to impact us.
Thank you for that and on R&D clearly the numbers on stepping down as a fancy program is done.
John P. Butler: And then when you look at the caution that we're hearing from the people who are treating these patients, I think it just behooves us to reflect that caution to you as well. Okay, understood. Thanks. Thanks, Ed.
Should we look at work.
Add the run rate or will it continue to step down as we move into next year.
David A. Spellman: Thank you. And our next question comes from David Leibowitz with Morgan Stanley. Your line is open. When you think about orexia, yeah, certainly.
Yeah. So we're not providing specific guidance on the ramp, but I think what I would just give context is while the phase Three's do continue to wind down from an expense perspective, we are investing in the supply chain billed for Vatted These debt globally.
John P. Butler: I mean, that's an annual event for us at this point to ensure that all of the patients who are on, you know, have a reauthorization team did a great job with that last year. I think similarly, they're doing that this year, but there's still an impact. There's, there's, there's no question. I mean, I think when we look at 20 versus 19, you see much less stark difference.
Before its approval. So we can capitalize any of the inventory yet it will run through the R&D expense line.
Okay.
And we do have the other studies like.
Defy and focus on the three times weekly studies, so there's still a.
A significant raiders of R&D.
Certainly not like we have with innovative project.
Sure.
Huh.
And then.
John P. Butler: But, you know, what's really the challenge here is to layer on what's COVID, and how is COVID going to impact this as well? You know, are we seeing softness because of, you know, three authorizations; we'll get those done and, and, and climb? Or are we, you know, actually losing patients from the market? And, you know, that's, that's what we have to work on.
Yes.
I guess my last question on on milestone.
I know I originally.
We had anticipated milestones in 2021.
Where how should we think about milestones payments relative to.
The submission.
And approval.
For about a day.
David A. Spellman: And really, it's just to say that Q1 is always soft, but be cautious about, you know, kind of how COVID is going to impact, and on R&D, clearly, the numbers are stepping down. Yeah, so we're not providing specific guidance on the ramp, but I think what I would just give context is, while the phase threes do continue to wind down from an expense perspective, we are investing in the supply chain build for Vatadustat globally before its approval. So we can't capitalize on any of the inventory yet.
Now.
In the context of how things have shifted.
Yeah. So.
I would say I don't think anything has shifted we're still on track.
We just provides the guidance on spending the NDA by mid second quarter.
Milestones themselves are.
Due to loss upon approval in the us and Europe and tied to the D D.
Indications.
So that would likely be.
2022 is it is it.
David A. Spellman: It will run through the R&D expense line. And we do have the other studies like Modify and Focus, the three-times-weekly studies. So there's still a significant rate of R&D. Certainly not like we had with Innovate and Protect. I guess my last question on Miles...
On.
The $250 million does it have for each indications so 125 per indication or is it just.
250 collectively for an approval.
David A. Spellman: I know a Yes, so I would say I don't think anything has shifted. We're still on track. We just provided the guidance on submitting the NDA by mid-second quarter. The milestones themselves are due to us upon approval in the U.S. and Europe and tied to the DD and NDD indications.
So we can.
We haven't really disclosed.
What each of these individual milestones are.
What they are breakouts are.
But you can assume that there are various milestones that are attached to.
U S D D U S adidi ex U S et cetera.
David A. Spellman: So, we can... We haven't really disclosed what each of the individual milestones is and what their breakouts are, but you can assume that there are various milestones that are attached to USDD, USNDD, XUS, etc.
For Otsuka, yes, sorry.
Okay. Thank you for that.
Thanks, David.
Gentleman that star wanted to ask you a question. Our next question comes from Eric Josef J P. Morgan Your line is open.
David A. Spellman: For Otsuka, yes. Thanks, David. As a reminder, ladies and gentlemen, that Star 1... Good morning, thanks for taking the questions. First, I would be curious to get your thoughts on how conducive the current COVID environment is for new product launches and hip uptake and whether COVID is a net positive or negative in your view for Rucksatostat, assuming it's first to market with its approval, potential approval later this quarter, and then.
Good morning, Thanks for taking the question.
First would be curious to get your thoughts on how can due to the current total environment is for.
New product losses, and if update whether the COVID-19 isn't net positive or negative in your view for Brookside is that.
I'm, assuming it's first on market with his approval simple grew later this quarter.
And then.
Just following up on your comments on on dialysis, how high D. C. You ultimately see.
David A. Spellman: Just following up on your comments on home dialysis, how high do you see, do you ultimately see that trending as a reporting of overall dialysis patients and, you know, how should we be thinking about the split up with the commercial and detailing effort between you and SUCCA and V4 in that patient population? Thanks.
On that trending of reports from the overall.
Dialysis patients and.
How should be thinking about b.
Splitting up with a commercial and detailing after between you have so you're going to be four in that in that fish population. Thanks.
Sure so.
So I won't comment on another product launch.
Unknown Attendee: So, I won't comment on another product's launch. You know, obviously, COVID has impacted everything about how we do. And Chris mentioned the, you know, more challenging access for our reps. As we think about it, you know, that's something we're working to get around. I'm sure other companies in the space are all working to try to get physicians. You know, it is clear when we think about our access to physicians and dialysis, with the kind of impact you're having on COVID and dialysis patients, physicians are really focused on keeping their patients alive and getting them vaccinated.
Obviously.
Covid has impacted.
Everything about how do we do and Chris mentioned, the more challenging access for our reps as as we think about it that's something we are working to get around I'm sure.
Other companies in the space are all working to try.
Try to get the physicians.
It is clear when we think about our access to physicians in dialysis with the kind of impact or having for COVID-19 on dialysis patients physicians are really focused on keeping their patients alive man on getting them vaccinated and.
As I think about Auryxia on I've been really pleased with the growth that we've seen given.
Unknown Attendee: And, you know, as I think about Arixia, I've been really pleased with the growth that we've seen given that the focus hasn't been on changing care or doing new things. It's been on, you know, just kind of keeping folks in the chair and healthy and alive. So, you know, I think that's just a backdrop that, until our population is fully vaccinated, is going to be a challenge for them. As for the home dialysis side, there were some very aggressive goals that were set out during the Trump administration when they had this American focus on kidney health that were looking for at least a quarter of new patients to be on home dialysis. I can't remember exactly when, within a few years, but that was pretty aggressive.
That focus hasn't been on changing care or doing new things. It's been on just kind of keeping folks in the chairs and healthy and alive. So I think that's just a backdrop that until our population is fully vaccinated.
Is going to be.
Challenge for them.
As I mentioned on home dialysis side.
There were some very aggressive.
Goals that were set out in during the Trump.
Administration when when.
When they had this focus on American focus on kidney health.
And.
That were kind of looking for at least a quarter of new patients to be on home dialysis I can't remember exactly when within a few years.
And that was pretty aggressive it does take more to get a patient on home dialysis than it does on in center dialysis, but patients wanted the government wants it.
John P. Butler: It does take more to get a patient on home dialysis than it does in in-center dialysis, but patients want it, the government wants it, and dialysis providers want to provide it, and to remain competitive, they'll have to move in that direction. They're all looking at how they can grow their home programs. Exactly where that lands, obviously, I'm not sure, but it is, as I said, sub-20% of the market today. That will grow significantly because it's growing quickly, and we'll see together, but that's going to be very important.
And.
Deluxe dialysis providers want to provide it and to be to remain competitive they'll they'll have to move in that direction. So.
We're all looking at how they can grow their home programs exactly where that Lance.
Obviously.
I'm not sure but.
As I said, it's sub 20% of the market today.
That will grow significantly because it's growing quickly and.
We'll see together, but that's going to be very important and when we have conversations with physicians. This is the that's the kind of market that they get just get extremely excited about having a once a day oral product.
John P. Butler: When we have conversations with physicians, that's the kind of market that they just get extremely excited about having a once daily oral product to deliver to patients. Not in a small way, Arixia is also an important product in the home market as well, so we've got a lot of traction there as well.
To deliver to patients and.
Not in a small way. That's also Auryxia is also an important product in the in the home market as well. So we've got a lot of traction there as well.
Okay, Great and maybe just a follow up.
Unknown Attendee: Okay, great. And maybe just to follow up. You said with respect to three times weekly and having data on that administration profile at launch, can you just kind of clarify what studies you are referring to there and whether we should anticipate results from the four or two trials which have completed, and there's a, you know, fairly decently sized trial ahead of Approval and Launch Decision. I'll get it to you. Yeah, 4.2 was a small trial that was, you know, kind of really asking a lot of different questions.
You said on.
With respect to three times weekly.
And having data on that.
Hershey profile at launch can you just clarify what.
Studies, you are referring to there and whether you should anticipate results from look forward to.
Which completed and there's a fairly decent my lifestyle.
Added.
Ahead of.
Enlarge approval.
Is that please.
Yeah, four two is a small.
Trial that was.
Really asking a lot of different questions. We have that data will be presenting that at a at a scientific meeting the studies that really are going to underpin the three times weekly.
John P. Butler: We have that data; we'll be presenting that at a scientific meeting. The studies that really are going to underpin the three times weekly supplemental NDA are the Modify study, which, excuse me, which our partner Otsuka is running in the US and in Europe, and Focus, which we're running here in the US. And both of those studies are ongoing.
Supplemental NDA or the modify study, which [noise] excuse me, which are partner Otsuka is.
Is running in the U S and in Europe, and focus which were running here in the U S and.
Both of those studies are ongoing and as I said, we will we do expect to have data from them. Both by the time, we we.
John P. Butler: And as I said, we do expect to have data from them both by the time we launch Vatadustat in the US. And, you know, obviously, we'll report that data and then use it to quickly file a supplemental NDA for that dosing regimen. Okay.
We launched Vatted used that in the U S and obviously.
Report that data and then use it as quickly file.
File a supplemental NDA for that dosing regimen.
Okay got it thanks for the color I appreciate you taking the button.
Unknown Attendee: Thanks for the call. I appreciate you taking the question. Thanks, Eric. Thank you. Thank you. Thank you. Thank you, Norma, and thanks, everyone, for joining us this morning. We look forward to updating you on what will be an exciting 2021 for Akebia. Thank you all for joining us. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now go.
Thanks, Eric Thank you and currently I'm showing no further questions at this time I'd like to turn the call back over to Mister John Butler that closing comment.
Thank you Norma and thanks, everyone for joining us. This morning, we look forward to updating you on.
What will be an exciting 2021 for Ikea.
Thank you all for joining.
Ladies and gentlemen, this concludes today's cause.
Conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.
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