Q3 2023 Akebia Therapeutics Inc Earnings Call
Okay.
Good day and thank you for standing by. Welcome to the Akebia Therapeutics third quarter, 2000 and 23 financial results conference.
Good day and thank you for standing by welcome to the <unk> Therapeutics third quarter 2023 financial results Conference call. At this time, all participants are in a listen only mode.
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We advise that today's conference is being recorded and I would now like to hand the conference over to your speaker today, Ms. Mercedes Carrasco. Please go ahead.
Now I'd like to handle conference over to your speaker today Ms. Mercedes Carrasco. Please go ahead.
Thank you. Thank you and welcome to Kibia's third quarter 2023 Financial Results and Business Updates Conference call. Please note that a press release was issued earlier today when, say, November 8th, detailing our third quarter financial results, and that release is available on the Investors section of our website.
Thank you thank.
Thank you and welcome to the T. B S third quarter 2023 financial results and business update conference call. Please note that our press release was issued earlier today Wednesday November eight detailing our third quarter financial results and that release is available on the investors section of our website for you.
For your convenience, the replay of today's call will also be available on our website after we conclude.
Your convenience a replay of today's call will also be available on our website. After we conclude.
Joining me for today's call, we have John Butler, Chief Executive Officer, and Ellen Snow, Chief Financial Officer.
Joining me for today's call, we have John Butler, Chief Executive Officer, and Ellen Snow, Chief Financial Officer, I'd like to remind everyone that this call includes forward looking statements. Each forward looking statement on this call is subject to risks and uncertainties that could cause actual results to differ materially.
I'd like to remind everyone that this call includes forward-looking statements. Each forward-looking statement on this call is subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements.
From those described in these statements additional information describing these risks is included in the financial results press release that we issued on November eight as well as in the risk factors and management discussion and analysis section of our most recent annual and quarterly reports filed with the SEC.
Additional information describing these risks is included in the financial results across release that we issued on November 8th, as well as in the risk factors and management discussion and analysis section of our most recent annual and quarterly reports filed with the SE.
looking statements on this call speak only as 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 like to introduce our CEO John Butler. John ?
Looking statements on this call speak only as 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 like to introduce our CEO John Butler John.
Thanks Mercedes.
For those who've been following our story over the past couple of years and have witnessed all of our team's efforts, you know it gives me great pleasure to talk to you about Akibia's future today with an extremely important and hard-fought catalyst in our sights.
For those who've been following our story over the past couple of years and have witnessed all of our teams efforts.
You know it gives me great pleasure to talk to you about the <unk> future today with an extremely important and hard fought catalyst in our sites.
As we've reported, the FDA said a user fee gold date or pedophadate of March 27th, 2024, for that a due stat, are oral, hip, ph, inhibitor to treat anemia due to chronic kidney disease or CKD in patients on dialysis. That's less...
As we've reported the FDA set a user fee goal date or <unk> date.
March 27, 2024 for <unk>, our oral <unk> inhibitor to treat anemia, due to chronic kidney disease or <unk> in patients on dialysis.
That's less than five months away.
Our team has been working diligently towards the US approval for VAT ASUS staff.
Our team has been working diligently towards the U S approval for <unk>.
We completed a formal dispute process and engaged with the FDA during an end of dispute type A meeting. We then resubmitted to our NDA for Vada Doustatt in September .
We completed a formal dispute process and engaged with the FDA during an end of dispute type a meeting. We then resubmitted to our NDA for about a do start in September.
I resubmission included postmarketing safety data from tens of thousands of patients in Japan, where a badadoo stat is approved and has been on the market for more than three years.
Our Resubmission included post marketing safety data from tens of thousands of patients in Japan, we're about to do that is approved and its been on the market for more than three years.
based on the new data and the resubmission, the FDA assigned a six month review cycle in line with our prior expectations. Today, they are actively in
Based on the new data in the Resubmission the FDA assigned a six month review cycle in line with our prior expectations.
Today, they are actively engaged in the review.
I just returned from the American Society of Nephrology Kidney Week last week.
I just returned from the American Society of Nephrology kidney week last week.
I was excited to see how much innovation is happening for patients with kidney disease, including multiple products introduced since the meeting last year.
I was excited to see how much innovation is happening for patients with kidney disease, including multiple products introduced since the meeting last year.
I have the pleasure of having many conversations with key medical experts and I can say unequivocally that these physicians are very excited about the role about a duest at and hips can play in the treatment of patients with CKD.
I had the pleasure of having many conversations with key medical experts and I can say unequivocally that these physicians are very excited about the role that reduced that in hips can play in the treatment of patients with CK D.
They were very happy to share thoughts on where the greatest patient need exists as well as areas for future research.
They were very happy to share thoughts on where the greatest patient need exists as well as areas for future research.
for our part, we're confident in our path forward, and continue to believe in the benefit that Adustat can deliver to patients.
For our part we're confident in our path forward and continue to believe in the benefit that <unk> can deliver to patients.
If approved, we're easier to bring Vatadoo staff to market in the US as an alternative oral treatment to deliver on our commitment to patients, our partners, and the broader kidney community.
If approved we're eager to bring value start to market in the U S. As an alternative oral treatment to deliver on our commitment to patients our partners and the broader kidney community.
Before I speak to the potential commercial opportunity for Vatadustat in the U.S., I want to again applaud our regulatory team for their productive interactions with the FDA over the past year and timely completion of the resubmission.
Before I speak to the potential commercial opportunity for about a new staff in the U S. I want to again applaud our regulatory team for their productive interactions with the FDA over the past year and timely completion of the Resubmission.
I also want to thank our partner, Mitsubishi Tanabe Pharma Corporation, or MTPC, who markets VATADUSAT in Japan and was instrumental in collecting the safety data included in the resubmission as part of their typical post-marketing vigilance in Japan.
I also want to thank our partner Mitsubishi Tanabe Pharma Corporation or MTBC co markets values that in Japan and was instrumental in collecting the safety data included in the Resubmission as part of their typical post marketing vigilance in Japan.
Now with the regulatory Resubmission in our rearview in our rearview mirror, we're now shifting our focus to the values that launch phase that we expect next year, if not at least that's approved.
In the international markets, VAT adduced that's approved in 36 countries. Since our last call, VAT adduce that's been approved in Australia and Taiwan.
In the international markets about abuse, that's approved in 36 countries since our last call that at least Thats been approved in Australia and Taiwan.
Work is underway by our partner BADISI to bring Vastio Vatadustat to market in Europe in 2024, which would generate future royalties and potential milestones for Akibi.
Work is underway by our partner, but D C to bring <unk> to market in Europe in 2024, which will generate future royalties and potential milestones for <unk>.
That said, a U.S. launch of out of due stat would represent our most significant commercial opportunity.
That said our U S launch of <unk> that would represent our most significant commercial opportunity.
With approval, we have the potential to target an approximately $1 billion market based on estimates that approximately 88% of the nearly 550,000 patients on dialysis would be treated with an erythropoiesis-stimulating agent, or ESA, for anemia. These are the injectables that are the standard of care.
With approval, we have the potential to target approximately $1 billion market based on estimates that approximately 88% of the nearly 550000 patients on dialysis would be treated within erythropoiesis stimulating agent or Esa for anemia easier. The injectables that are the standard of care.
It's important to highlight that we are already well prepared for a potential launch. And if identified important tailwinds, we believe will contribute to our success.
It's important to highlight that.
We are already well prepared for a potential launch and have identified important tailwind, we believe will contribute to our success.
First, we have our commercial product supply ready to go, awaiting final label post potential approval.
First we have our commercial product supply ready to go awaiting final label post potential approval.
Second, we also have an experienced commercial sales organization actively calling on dialysis center.
Second we also have an experienced commercial sales organization actively calling on dialysis centers.
We believe there's approximately a 96% overlap between Eriksia prescribers and potential VAT-A-DUSTAP prescribers.
We believe there is approximately a 96% overlap between auryxia prescribers and potential <unk> prescribers.
Importantly, we'll also benefit from our partnership with CSL V4, which enables potential access to 60% of the treatment centers through its collaboration with for serious medical care and other small and medium-sized providers.
<unk> will also benefit from our partnership with <unk>, which enables potential access to 60% of the treatment centers through its collaboration with Fresenius medical care and other small and medium sized providers.
while we do expect to invest appropriately in the VATADUS.Longe to reflect the significant opportunity. Based on our initial preparedness from 2022 and our existing infrastructure, we expect that investment in 24 to be incremental compared to our current op-ex.
While we do expect to invest appropriately in Nevada, just at launch to reflect the significant opportunity based on our initial preparedness for 2022 and our existing infrastructure, we expect that investment in 2004 to be incremental compared to our current opex.
Now it's critical to also understand the unique payment landscape in dialysis.
It's critical to also understand the unique payment landscape in dialysis.
Medications used to treat most dialysis patients in the U.S. are reimbursed as part of a bundle payment made to providers.
Medications used to treat most dialysis patients in the U S are reimbursed as part of a bundled payment made to providers.
Included in the bundle payment are funds for an ESA treatment used to manage anemia.
Included in the bundled payment or funds for an Esa treatment used to manage anemia.
promote innovative drug use for patients in that prospective payment system, CMS implemented a transitional add-on payment adjustment or TDAP.
To promote innovative drug used for patients in that prospective payment system.
<unk> implemented a transitional add on payment adjustment or <unk>.
For two years post-TDAPA designation, the TDAPA payment would cover the cost of that Adustat if a physician prescribed their product.
For two years post teed up a designation the teed up a payment would cover the cost of that abuse that if a physician prescribed their product.
Their overall bundle payment does not change.
The overall bundle payment does not change.
Now while we continue to work on post-TEDAPA payment policy, it's important to recognize that today, almost 90% of dialysis patients are treated for anemia and there are significant dollars in the current bundle payment for the treatment of anemia.
Now, while we continue to work on post seed App or payment policy. It is important to recognize that today almost 90% of dialysis patients are treated for anemia, and there are significant dollars in the current bundled payment for the treatment of anemia.
We expect to have added to stack commercially available quickly following a potential approval, but expect minimal initial revenue to be generated in those first months.
We expect to have that reduced our commercially available quickly following our pension potential approval.
I would expect minimal initial revenue to be generated in those first months.
After the six-month T-dap, application process anticipated to be complete by October of 24, we anticipate the product would be reimbursed and widely available and accessible to patients.
After the six month TDAP, a application process anticipated to be complete by October 24, we anticipate the product would be reimbursed and widely available and accessible to patients.
As I mentioned earlier, we will have a strong tailwind from our CSLV4 relationship, which will provide a key view of potential access to up to 60% of the dialysis market through CSLV4's collaboration with Fresenius Kidney Care and several small to mid-sized providers with whom they contract.
As I mentioned earlier, we will have a strong tailwind from our CSL CSL <unk> relationship, which will provide a keyboard with potential access to up to 60% of the dialysis market through CSL before his collaboration with Fresenius kidney care and several small to mid sized providers with whom they contract.
A key bill will receive two-thirds of the profit associated with bad-adduced debt sales in those cents.
A key bill received will receive two thirds of the profit associated with the <unk> sales in those centers.
net of certain pre-specified costs and V-Full will keep one third of the process.
Net of certain pre specified costs.
<unk> will keep one third of the profits.
A key bill will retain 100% of the economics in markets not covered by our contract, predominantly any sales to DeVita.
Ah Kee will retain 100% of the economics and market is not covered by our contract predominantly any sales to davita.
Now, we're also fortunate to be supported through this launch by the robust cash flows from Erixia. Today, we reported Erixia net product revenue of $40.1 million in the third quarter. We've guided to $170 to $175 million net product revenue for the year, and I expect we'll come in around $170 million.
Now we're also fortunate to be supported through this launch by the robust cash flows from Auryxia today, we reported Auryxia net product revenue of $40 1 million in the third quarter.
You guided to $170 million to $175 million net product revenue for the year and I expect will come in around $170 million.
We expect Rixie Revenue to grow in 2024 as we exit unfavorable payer contracts, incrementally expand our commercial and medical footprints and gain broader access to providers from their interest in learning about bad-adduced debt.
We expect <unk> revenue to grow in 2024, as we exit unfavorable payor contracts incrementally expand our commercial and medical footprint and gain broader access to providers from their interest in learning about how to do that if it's approved.
Lastly, we were able to delay the cash payments associated with our farm-accom debt service until October of 2024, which provides us with additional flexibility to invest in the launch of Vatadoo staff as well as other growth opportunities for the come.
Lastly, we were able to delay the cash payments associated with our pharma com debt service until October of 2024, which provides us with additional flexibility to invest in the launch of <unk> as well as other growth opportunities for the company.
And to provide more information on our revenue and other financials, I'd now like to turn the call over to Ellen Snow, our Chief Financial Officer.
And to provide more information on our revenue and other financials I'd now like to turn the call over to Ellen Snow, Our Chief Financial Officer Alan.
Good morning, everyone. Our priority continues to be focused on strengthening our balance sheet as we enter a potential launch here. Marked this quarter by a favorable loan amendment, which strengthened our cast position for 2024.
Good morning, everyone. Our priority continues to be focused on strengthening our balance sheet as we enter a potential launch here March this quarter by a favorable loan amendment, which was which strengthened our cash position for 2024. The Pharmacon loan amendment extends the maturity date of our loan to March of 2025.
The Pharmacon loan amendment extends the maturity date of our loan to March of 2025 from November 2024, and defers Akebia's quarterly principal payments until October 31st, 2024, at which time the company will begin making monthly principal payments through the date of maturity.
<unk> 2024, and deferred the KBS quarterly principal payments until October 31, 2024 at which time the company will begin making monthly principal payments through the date of maturity.
The favorable modification to payment terms enables us to strategically invest in Nevada DSET launch activities, while also continuing to maximize the RICSIA revenue for the remainder of the year and into 2024.
Favorable modifications to payment terms enabled us to strategically invest in Nevada is that launch activity. While also continuing to maximize auryxia revenue for the remainder of the year and into 2024, our cash and cash equivalents and restricted cash at September 32023 totaled four.
Our cash and cash equivalent in restricted cash as of September 30th, 2023, totaled 48.2 million, which with cash from operations, we expect to fund planned operations for at least the next 12 months.
$8 2 million.
Glitch with cash from operations, we expect to fund planned operations for at least the next 12 months.
contributing to our cash position. Total revenues were 42 million for the third quarter of 2023. Net product revenues from sale of Eruxia were 40.1 million for the third quarter of 2023 compared to 42 million for the third quarter of 2022.
Contributing to our cash position and total revenues were 42 million for the third quarter of 2023 net product revenues from sale of a brick CF were $40 1 million for the third quarter of 2023 compared to $42 million at the third quarter 2022.
The decrease is primarily due to a reduction in volume and the impact of shifting pair mix, partially caused by contracting dynamics and a decline in the phosphate binder market.
The decrease is primarily due to a reduction in volume and the impact of shifting payer mix partially caused by com.
<unk> dynamics and a decline in the phosphate binder market and <unk>.
The decline was partially offset by price increases in January of 2023 in July of 2023. While our quarterly revenue was down from last quarter and compared to the third quarter of 2022, this is a similar trend to what we saw last year and will still expect strong fourth quarter. And as John mentioned, we believe a RxDNS product revenue will be around 170 million for the full 2023.
Klein was partially offset by price increases in January of 2023 in July of 2023.
Our quarterly revenue was down from last quarter and compared to the third quarter of 2022. This is a similar trend to what we saw last year and still expect a strong fourth quarter and.
As John mentioned, we believe Auryxia net product revenue will be around $170 million for the full.
2023.
We are committed to both maximizing our current business opportunities and pursuing growth initiative to create value for our shareholders.
We are committed to both maximizing our current business opportunities and pursuing growth initiatives to create value for our shareholders.
Well, over to the now mature brand nearing loss of exclusivity in March of 2025, we expect relatively stable volume next year, while benefiting from higher pricing due to exiting pay or contracts over the next year. In addition, we continue to work to understand the potential impact and opportunity we could realize when both state funder's enter the bundle in 2025.
<unk> is now a mature brand nearing loss of exclusivity in March of 2025, we expect relatively stable volume next year, well benefiting from higher pricing due to exiting certain payer contracts over the next year. In addition, we continue to work to understand the potential impact and opportunity we could realize when phosphate binder.
Binders entered the bundle in 2025.
As we look to our cost structure, we continue to focus on cost containment. Cost is good sold or caused with $18 million for the third quarter of 2023, compared to $38.3 million for the third quarter of 22.
As we look to our cost structure, we continue to focus on cost containment.
I think that all of their cars with $18 million for the third quarter of 2023 compared to $38 3 million for the third quarter of 2018.
Cogs reflects the cost of a Rixia, including non-cash and tangible amortization charge of 9 million per quarter.
Cogs reflects the cost of auryxia, including noncash intangible amortization charge of $9 million per quarter.
through the fourth quarter of 2024 and third party royalties. The decrease was primarily due to a non-cast charge related to the excess purchase commitments recorded in 2022 and a reduction in inventory write downs and lower volume of sales resulting in reduced product cost for 2023.
The fourth quarter of 2024, and third party royalties. The decrease was primarily due to a noncash charge related to the excess purchase commitments recorded in 2022, and a reduction in inventory write downs and lower volume of sales, resulting in reduced product costs for 2023.
R&D expenses were 13.3 million for the third quarter of 2023, compared to 28 million for the third quarter of 2022. The decrease is primarily due to a reduction in spending on badadue debt development, including clinical trials, cost, and procurement of outsourced contract services.
<unk> expenses were $13 3 million for the third quarter of 2023 compared to 28 million for the third quarter of 2022. The decrease was primarily due to a reduction in spending on that development, including clinical trial.
And curtailment of outsource contract services.
SGNA expenses were 22.7 million for the third quarter of 2023 compared to 31.9 million for the third quarter of 2022. Primarily the results of their reduction in headcount related costs, the benefits realized from the assignment of the Boston lease in May of 2023. And a targeted cutback in a work to see a marketing and promotional expenses that were offset by some one time non-recognizing expenses.
<unk> expenses were $22 7 million for the third quarter of 2023 compared to $31 9 million for the third quarter of 2022, primarily as a result of a reduction in head count related costs. The benefits realized from the assignment of the Boston leaf in May of 2023, and a targeted cut back in marketing and <unk>.
There are some expenses that were offset by some onetime nonrecurring expenses.
Net loss was 14.5 million for the third quarter of 2023, compared to in that loss, the 54.1 million for the third quarter of 2022. We continue to find ways of operating more efficiently, placing an increased scrutiny on all areas of our needs expenses. We are deliberate about managing expenses in our efforts to further extend our cash one way until the potential launch of that is used that here in the U.S.
Net loss was $14 5 million for the third quarter of 2023 compared to a net loss of $54 1 million for the third quarter of 2022, we continue to find ways of operating more efficiently, placing an increased scrutiny on all areas of operating expenses, we are deliberate about managing expenses and our efforts to further.
And our cash runway until the potential launch of that as you start here in the U S revenue from Eric There continues to provide cash for operations and we are excited that.
Revenue from a RICSA continues to provide cash for operations and we are excited.
that we have a pedophadate of March 27th, 2024.
That we have a <unk> date of March 27 2024.
The entire leadership team remains energized and focused on delivering an alternative oral treatment to patients that were approved by the FDA.
The entire leadership team remains energized and focused on delivering an alternative oral treatment to patients if approved by the FDA.
With that, we will now open the call for question operator.
With that we will now open the call for questions operator.
As a reminder, to ask a question, please press star 1 1 on your phone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Stand by as we compile the Q&A roster.
Thank you.
As a reminder to ask a question. Please press star one one on your phone and wait for your name to be announced to withdraw. Your question. Please press star one again standby as we compile the Q&A roster.
Okay.
One of them.
First question.
Our first question will come from Allison Bratzel of Piper Sandler. Your line is open.
Our first question will come from Allison Brentsville of Piper Sandler Your line is open.
Pardon me Allison Brussel your line is open.
You May ask your question.
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Yes.
Chris why don't we move to the next question will come back to Ali Okay.
Thank you one moment please.
One moment please for our next question.
Okay.
Yeah.
The next question will come from Julian Harrison of BTIG. Your line is open.
The next question will come from Julian Harrison of <unk>. Your line is open.
Hi, congrats on the recent progress and thank you for taking my questions. First, both the fatadoos debt and the fatadoos debt have been on the market in Japan for several years now. So I guess I'm curious if there's anything from the experience there that informs you about how the two drugs should coax this in the US going forward. And then it sounds like the cross-hailing opportunity between a Rixia and potential fatadoos debt prescribers is likely significant. So I was just wondering if you could talk more about how you plan to leverage that.
Hi, Congrats on the recent progress and thank you for taking my questions.
First both of that.
<unk> reduced that had been on the market in Japan for several years now so I guess I'm curious if there's anything from the experience there that informs you about how the two drugs should co exist in the U S going forward and then it sounds like the cross selling opportunity between Auryxia and potential that reduced that prescribers is likely significant so I was just.
If you could talk more about how you plan to leverage that.
Brilliant, thanks for your question. So, you know, we often get asked about the experience in Japan and what there is to learn. And it's...
Julian Thanks for your question so.
We often get asked about the experience in Japan, and what there is to learn.
Yeah.
It's tough to really point to much because it's such a different market. For one thing, of course, the product is available for dialysis patients and non-dialysis patients.
It's tough to.
To really point to much because it's such a different market for one thing of course, the product is available for dialysis patients and non dialysis patients.
for another, you know, there are...
For another.
There are I think it's five.
I think it's five HIF-PHIs that are available on the market in Japan. So you have a very different commercial dynamic there as well. But what we have seen is kind of steady adoption of the HIF-PHIs into the market. So as we would expect to see with a new class, it's taken some time for it to,
<unk> that are available on the market in Japan. So you have a very different than commercial dynamic.
There as well, but what we have seen is kind of steady.
Adoption of the <unk> ph is.
Into the market so.
As we would expect to see with a new class it's taken some time for.
For it too.
It's kind of moved into the normal use, but I think we're seeing that become more and more common now across Japan. Of course, when there's five companies promoting the product, you do have a lot more share of voice across that class. But it's just, again, as we said, we've always,
It's going to move into a normal use but I think we're seeing that become more and more common now across Japan of course, when there's five companies.
<unk> a product you do have.
A lot more.
Kind of share of voice across that class.
But it is just again as we said we've always.
wanted the non-diallysis market opportunity as well, right? And that is where you're seeing more of the use and more of the focus from all of the companies, but you're seeing dialysis adoption as well.
Wanted the non dialysis market opportunity as well right and that is where.
Youre seeing more of the use of more of the focus from all of the companies.
But youre seeing dialysis adoption as well.
And then your second question was about the overlap. And I mean, this is, you know, you can go back to 2018 when we...
And then your second question was about.
The overlap is.
You can go back to 2018.
When we.
close to transaction with Kerix and created a commercial company in Akibia. It was...
Close the transaction.
With Keryx and created a commercial company in <unk>. It was with the express desire to pick up that leverage the idea that we have this commercial organization in place that's already calling on Nephrologists.
with the express desire to pick up that leverage, right? The idea that we have this commercial organization in place, that's already calling on the...
in dialysis centers has deep relationships with them. Of course, we didn't hope for this two-year delay on when we'd be able to take advantage of that leverage, but we think that's extraordinarily important. We have a very experienced sales organization. As I said, I think we'll need to incrementally increase that group.
In dialysis center is has deep relationships with them of course, we didn't hope for this two year delay on when we'd be able to take advantage of that leverage but we think that's extraordinarily important we have a very experienced sales organization as I said I think we will need to incrementally increase that group.
But we'll do that quickly and a ricksy old benefit from that as much as that at DoStat will. But when you look at any of your presence at ASN or any other kind of marketing opportunity, you basically get the leverage of having two products in the market. And I think it's important also and I kind of reference this in the end.
But.
We will do that quickly and Auryxia, we'll benefit from that.
As much as how to do that well.
But when you look at any of your <unk>.
<unk> said, hey, ESN or any other.
Kind of marketing opportunity you basically get the leverage of having two products in the market and I think it's important also.
Kind of referenced this in my prepared remarks that when <unk> is approved assuming that at least that's approved physicians will be very interested in talking to reps about about that new product you remember auryxia is eight or nine year old product.
that when VATADUSA is approved, assuming VATADUSA is approved, physicians will be very interested in talking to reps about that new product. You remember, Rixie is an eight or nine-year-old product, it's not quite as easy to get access to physicians. With that,
Not quite as easy to get access to physicians.
With that access they obviously have the opportunity to talk about auryxia as well.
they obviously have the opportunity to talk about Eriksia as well. And my past I've seen significant organic growth from the more mature product.
Past I've seen significantly significant organic growth from the more mature product.
when you have the opportunity to improve your access to the people who write the prescriptions, and I think that will be an important point of leverage.
When you have the opportunity to improve your access to the people who write the prescriptions and I think that will be an important point of leverage.
Excellent thanks very much.
Thank you Julien.
Thank you. Again, to ask the question, please press star 11 on your phone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment please.
Thank you.
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One moment please for our next question.
Our next question will come from Ed RC of HC Wingright and Company. Your line is open.
Our next question will come from Ed Arce of H C. Wainwright and company. Your line is open.
Hi, John and Elton. Thanks for taking my questions and starting this past weekend in Philadelphia. Three questions from me. Firstly, on the launch. Just wanted to ask.
Hi, John.
Thanks for taking my questions.
Sorry, I missed juice.
Past weekend in Philadelphia.
Three questions from me firstly on the launch just wanted to ask.
Prior to the Tadapa, which you expect in October next year, what kind of activities will you be focused on those first six months as you prepare for meaningful sales ramp? And then once you do get the Tadapa, could you...
Prior to the to Dapper, which you expect in October of next year.
What kind of activities will you be focused on those first six months as you prepare for meaningful sales ramp.
And then once you do get the data.
Could you just.
review again the sort of perspective from the dialysis centers on the financial incentives that
Review again, the sort of perspective from the dialysis centers on the financial incentives.
That would.
That will be in place once the DAPA is designated.
That would be in place once the data is.
Designated.
Secondly, I wanted to ask about pricing, especially relative to GSK, and what your thoughts there...
Secondly, I wanted to ask about pricing, especially relative to GSK.
And what your thoughts there if you could share anything and then lastly, just.
And then lastly, I just wanted to ask again about the addressable market. I think you said in your prepared remarks.
Wanted to ask again about the addressable market I think you said in your prepared remarks it was.
550 or 575 and there's a small percentage that do not take
<unk> hundred 50, or $5 75, and there is a small percentage.
Not take.
Any medications for anemia, so just wanted to tie that down a little better. Thanks again.
Sure, Ed, thank you for the question. Sorry, I missed you last weekend. I hope you enjoyed the meeting as much as I did. So just the last one first. So there's about 550,000 dialysis patients and about 90%, 88% are on an ESA.
Sure Ed. Thank you for the question sorry, I missed your last weekend I Hope you enjoyed the meeting as much as I did.
So just the last one first so there's about 550000 dialysis patients and about 90% 88% are are on <unk>.
today. So there's always that small percentage of patients who aren't, don't need to be treated very late stage or early. And their hemoglobin are still, some start dialysis with a little bit of residual kidney function, so they don't necessarily need to start near SA right away. But that's still about a half million patients that are eligible.
SA.
Today, so there's always that small percentage of patients who arent.
I don't need to be treated very late stage or.
Our early in their hemoglobin is are still some start dialysis with a little bit of residual kidney function. So they don't necessarily need to start an Esa right away. So.
But that's still.
<unk> 5 million patients that are <unk>.
You know, you used to be able to say that the market was growing by two to five percent a year religiously for the last three, 30 years that I've been in it. But, of course, COVID has changed that, really thrown on its head. We've even seen that with the phosphate binder market, that it hasn't quite started to recover. It's starting to, but not quite there.
Our eligible.
You used to be able to say that the market was growing by two 5% a year religiously for the last 330 years that I've been in it.
But of course Covid has changed that really thrown at them and it's had we've you can see that with the phosphate binder market that it hasnt quite.
Started to recover its starting to but not quite there.
So your question's about launch. So prior to TDAPA, it's actually, I mean, it's frustrating, obviously, to have to wait six months for CMS to provide that TDAPA designation. And you'll see that come in, I think it's around July , if everything goes on the timeline, we would get the HicksPix code. And so you know, you'd be marching down that.
So.
So your question is about.
Launch so so prior to <unk>.
It's actually I mean, it's frustrating obviously to have to wait six months for CMS to provide that that PDF of designation and Youll see that come in I think it is.
Around July if everything goes on the timeline.
The hix fixed code and so you'd be marching down that.
The dialysis providers really need that time also to prepare for introducing a new product into their protocols, etc.
The dialysis providers really need that time also to prepare for introducing a new product into their protocols et cetera. So.
you know, there is there'll be things going on a number of in a number of different ways. Um, you know, obviously they'll be contracting. Uh, that's happening with the Dallas providers.
There'll be things going on a number of in a number of different ways.
Obviously there'll be contracting that's.
Thats happening with the dialysis providers.
they'll be, you know, our commercial organization will, you know, be able to talk about the product. There will be an approved product with an approved label. Physicians will wanna learn about the product. So, you know, having those conversations before it's available and explaining to them the timing will be critical as well.
That will be our commercial organization will be able to talk about the product that will be an approved product with an approved label.
Physicians will want to learn about the products so having those conversations before it's available and explaining to them the timing.
And maybe the most important work will be done by our medical organization and V4CSL's medical organization, where you'll be working with the dialysis providers on...
Will be critical as well.
Maybe the most important work will be done by our medical organization and before our CSL medical organization.
Where youll be working with the dialysis providers on.
on those protocols for how the product will be used in the dialysis center. So, you know, we won't see, and again, some dialysis providers may choose to do like small experience trials to develop those protocols. And so you may see some revenue, but I really wanna, you know, kind of minimize the idea that there'll be significant revenue. This is it.
On those protocols for how the product will be used.
In the dialysis centers, so we won't see again, some dialysis providers may choose to do.
Look small experienced trials two to.
To develop those protocols and so you may see some.
Revenue.
But I really want to.
Kind of minimize the idea that there'll be significant revenue. This is it's.
It's really an important six months to be ready to hit the ground and take advantage of that two-year T-DAPA period.
It's really an important six months to be ready to hit the ground and take advantage of that of that two year.
<unk> period.
And that's, you know, that'll be so that will be critical. We're looking forward to that. And then on the dialysis center side again, you know, for the the patients who are PPS patients, you know, which are 90 percent of patients on dialysis or Medicare patients, that those almost used to be almost all prospective payment system or PPS payments patients.
And Thats.
That will be.
So that will be critical we're looking forward to that and then on the dialysis center side again for that the patients who are PPS patients.
Which are.
90% of patients on dialysis are Medicare patients.
Those almost used to be almost all prospective payment system or PPS payments patients.
when Medicare Advantage was introduced into dialysis.
When Medicare advantage was introduced into dialysis.
That has moved quickly and it's close to 40 to 50% of dialysis patients now. So the MA area is a little more challenging since their individual contracts. Each provider has a different contract and they're a little hit and miss and risk-trial trying to understand and help and ensure that there's this separate payment available for those MA patients. So that's more work we'll be doing even from today.
That has moved quickly and it's close to 40% 50% of dialysis patients now so.
The MAA areas, a little more challenging since their individual contracts each provider has a different contract and they're a little.
Hit and Miss in <unk> trying to understand and help ensure that there is this.
Repayment available for those MA patient. So that's more work will be doing even from today.
But on those 50% of patients who are PPS patients, it's very clear that this TDAP ad designation pays for vatadooostat on an ASP basis. So whenever the product is used, the dialysis center will bill for the cost of...
But on those 50% of patients who are PPS patients, it's very clear that this <unk> designation.
Pays for that to do that on an ASP basis. So whenever the product is used the dialysis center will bill for the cost of.
of that adieu stat and CMS will determine the ASP and reimburse it that rate.
Of that is used and.
CMS will determine the asps and reimburse at that rate.
You know, basically what that means is, you know, they have a fixed payment, I believe the bundle payment is $280 of dialysis session, something like that, for next year, and the final rule, and that includes the dollars that they would spend on an ESA.
Basically what that means is.
They have a fixed payment I believe the bundled payment is $280 of dialysis such as something like that for next year and the final rule and that includes the dollars that they would spend on an Esa.
So, you know, dialysis providers, they have the confidence that they're gonna get paid for bad deduced out on a cost basis.
Dialysis providers, they have the confidence that they're going to get paid for <unk> on a cost basis.
and they don't have to purchase the ESA. They look at that as an opportunity to use an innovative product and potentially a cost saving for them as well. And that's something that obviously is important as dialysis providers. Medicare patients are not where dialysis providers make their money. So any opportunity they can have to squeeze those costs down, they look for that opportunity.
And they don't have to purchase.
The Esa.
They look at that as an opportunity to use an innovative product and.
Potentially a cost saving for them as well and.
That's something that.
Obviously as important as dialysis providers Medicare patients are not where dialysis providers make their money. So any opportunity that can have to squeeze those costs down.
They look for that opportunity.
And I think your last question was on pricing. And of course, we're not prepared to talk about pricing for about a doo stat yet. And we've always talked about understanding the market. And the price in the market for ESA has gone down pretty substantively over the last few years.
And I think your last question was on pricing and then of course, we're not prepared to talk about pricing for <unk>, yes.
Yet.
We've always talked about kind of understanding the market and the market the price in the market for Esa has gone down.
Pretty substantively.
Over the last few years the.
Interestingly, if you look at the wholesale cost pricing of just due rock or a deaf do stat from GSK, if you look at the average dose from their phase three study, that would indicate about an $8,000 a year price.
Interestingly, if you look at the wholesale cost pricing of <unk>.
Do rock.
Or adapt reduce that.
From GSK.
If you look at the average dose from their phase III study that would indicate about an $8000 a year pricing.
Now, we've indicated that the opportunity for premium pricing exists, and I think that they've seen that as well, certainly during the TDAP period. So, we don't know what their contract pricing is. We don't have any indication that it's gonna be significantly lower than that number. So, that certainly helps inform us as we think about our pricing for the value of use that launch.
Now we've indicated that the opportunity for premium pricing exists and I think that they've seen.
That is well certainly during the <unk> period so.
We don't know what their contract pricing is we don't have any indication that it's going to be significantly lower than that.
Then that number so that certainly helps inform us as we think about our pricing.
For the <unk> launch.
Great. Thanks, John Thats very helpful.
Thank you Ed.
Thank you. Are we able to get Ali back Chris? Uh, yes. One moment, please. And again, to ask a question, please, press style 1-1-
Thank you and we were able to get to Olly back Chris.
Yes, one moment please.
And again to ask a question. Please press star one on your phone.
One moment please for our next question.
And again, we have elephant pretzel of pipe assembler. Your line is open.
And again, we have Allison Butzel of Piper Sandler Your line is open.
Again his brightcove.
One moment.
This is Pat.
We have luckily multiple ways of communicating these days. So, Ali emailed Mercedes her questions.
Yes.
Looks like we have luckily multiple ways of communicating these days.
Ali Ali emailed Mercedes her questions.
I'm going to see people play Ali today. I'll jump in. Thank you very much, Chris. And all right, let's start with current cash burn and runway guidance. Ellen, can you talk through the cash runway guidance, especially with the loan agreement and how that might change?
Yes.
Okay.
Clay Alley today.
Ben Thank you very much Chris.
Alright, let's start with current cash burn and runway guidance Alan can you talk through.
On the runway the cash runway guidance, especially with the loan agreement and how that might change things, yes. Thank you.
Yes, thank you. We don't provide OPEX guidance, but that said, Eruxia continues to contribute meaningful cash to fund operations. And we have a disciplined approach to spending and continue to streamline and become more efficient in our operations. We're extremely happy with where we landed on our crime-acon amendment and giving us the opportunity to invest incrementally cost to support the vatidies that launch. And we believe we have sufficient cash to fund operations while through to 2024.
Don't provide opex guidance, but that said <unk> continue to contribute meaningful cash to fund operations and we have a disciplined approach to spending and continue to streamline and become more efficient in our operation. We're extremely happy with where we landed on our Pharmacon amendment and giving us the opportunity to invest incrementally costs.
To support the attitude that launch and we believe we have sufficient cash to fund operations while through 2024.
Okay, great. Thank you Ellen.
Thank you, Ellen. And then just to build on the question on potential pricing for Vatagee's stats, how might you be thinking about pricing once the Tadapa period ends? That's an important question. So as we've talked about in a Tadapa, you've got that two-year window where you're outside of the dial, it's just bundled.
Just to build on the question.
Potential pricing for <unk>.
How might you be thinking about pricing, one Betsy dapper period, and that's an important.
Question.
So as we've talked about <unk> got.
And kind of that two year window.
Where youre outside of the dialysis bundle.
when Tidapa ends in the final rule that came out just a couple of weeks ago, basically the way CMF has looked at it is, they look at the overall utilization of a product that was part of Tidapa.
When when teed up and in the final rule that came out just a couple of weeks ago basically the way CMS has looked at it as they look at the overall utilization of the product that was part of <unk>.
And then they basically take those dollars and spread it over, you know, all of the dialysis sessions that are provided.
And then they basically take those dollars and spread it over all.
All of the dialysis.
Sessions that are provided.
So for a product that has very limited use in a very small number of patients, that's...
So for.
For a product that has very limited use in a very small number of patients that's really challenging right. It doesn't really provide the dialysis providers that the cash if they have one or two patients that are getting.
really challenging, right? It doesn't really provide the dials to providers that...
the cash if they have one or two patients that are getting a drug. The great thing for Validusdad is, as we talked about, dialysis, anemius treated in 90% of dialysis.
Getting a drug.
Great thing for provide a dose that is as we've talked about dialysis anemia treated in 90% of dialysis patients and there are significant dollars already in the <unk>.
and there are significant dollars already in the bundles. Thinking about that pricing and that post-TDAP policy is a little bit more straightforward. Now,
<unk> so.
Thinking about that pricing in that post feed app that policy is a little bit more straightforward now.
I don't think that that post-TDAP policy really encourages innovation long-term. And one of the things being part of the Kidney Care Partners-The-Lawby and Coalition, this is a key area of focus for us. And kind of creating a better...
Sure.
I don't think that that.
<unk>.
Post <unk> policy really encourages innovation long term.
And one of the things.
Being part of the kidney care partners are lobbying coalition. This is a key area of focus.
For us.
<unk>.
Kind of creating a better.
way to incorporate innovation into treatment of these patients. So we're going to continue to lobby on the hill and with CMS to have those dollars follow the patient. And that's a real opportunity.
Way to incorporate innovation into into treatment of these patients. So we're going to continue to lobby on the hill and with CMS.
To have those dollars follow the patient and that's a real opportunity for us so.
So if we think about the environment today, though, whatever pricing you have during your TDAF period, you are going to have to adapt that pricing to what's in the bundle moving forward. So there will be and will kind of see where our pricing strategy lands, but I do expect that the contracting price will have to become more aggressive.
So if we think about the environment today, though whatever pricing you have during your TDAP. A period you are going to have to adapt that pricing to kind of what's in the bundle.
Moving forward, so there will be and we'll kind of see where our pricing strategy lands, but I do expect that the contracting price will have to become more aggressive post <unk> without a change in a post ddos policy so stay tuned as.
post-TDAPA without a change in that post-TDAPA policy. So, you know, stay tuned as, you know, as that progresses, but that's the way we're thinking about that.
As that progresses, but that that's the way we're thinking about that.
Great.
And on Vatadustat, can you help us frame the base case expectation on the label, particularly any differences compared to Dapradustat, and whether that will matter for uptake?
And that is that can you help us frame the base case expectation on the label, particularly any differences compared to <unk> and whether that will matter for uptake.
So, you know, obviously we haven't started labeling discussions with FDA yet. I mean, they're early in their review. Um.
So obviously, we havent started labeling discussions with FDA yet.
They're early in their review.
But we do think that there are significant differences between the compounds. We know that FDA does frequently have a desire to have class labeling, but there are certain areas that we really believe that the data doesn't support that.
<unk>.
But we do think that there are significant differences between the compounds. We know that FDA does frequently have a desire to have class labeling.
But there are certain areas that we we really believe that the data doesn't support that so.
We've really tried to address those particular areas as aggressively as we can, or as clearly as we can, maybe it's a better word in our draft labeling to the FDA.
We've really tried to address that.
And those particular areas.
As aggressively as we can there is clearly as we can maybe it's a better word in our in our draft labeling to the FDA.
But of course, we'll obviously work with the agency to have the product approved. And there's a point where...
But of course, yes.
We'll obviously work with the agency to have the product approved and there is a point where.
you know, negotiation ends and you take what you get. But,
Negotiation ends and you take what you get but.
from a compound perspective. We really do think that these are very different products.
From a from a compound perspective, we really do think that these are very different products and some of the areas.
And, you know, some of the areas, you know, like the four months.
Like the four months.
not using the product until the patient's been on for four months. If you look at the MACE data from innovate from incident patients and from the thousand patients to protect who became dialysis patients during treatment, there's no increase in maestri risk
Not using the product till patients, but on for four months. If you look at the mace data from innovate.
From incident patients and from the 1000 patients protect who became dialysis patients during treatment. There is no increase in mace risk.
seen in that data. So, you know, we've incorporated that into our resubmission, feel very strongly about that. And that's the kind of conversation we're looking forward to having with the eight.
<unk> seen in that data. So we've incorporated that into our resubmission feel very strongly about that and thats. The kind of conversation, we're looking forward to having with that with the agency.
Thanks, and then finally just done the Erexia side once more. Ellen had provided good commentary on volume expectations for next year. Just curious if that factors in any impact from the availability of Panaphanor or more broadly, how should we be thinking about the competitive set for Erexia moving forward?
Okay. Thanks.
Thanks, and then finally, just on the Rcs side once more.
Ellen has provided good commentary on volume expectations for next year, just curious if that factors in any impact from the availability of <unk> or more broadly how should we be thinking about the competitive set for <unk> moving forward.
Yeah, so the way we think about synaphanor, we're honestly as a person who's working in the space for 30 years as a patient advocate, it's exciting to see a product.
Yeah. So the way we think about <unk>.
Yes.
Honestly as a person who has worked in this space for for 30 years as a patient advocate, it's exciting to see a product.
a new technology come in. What we know, Rixi is a great product, Civellum is a great product. They don't manage patients' phosphorus levels to normal. We know there's a direct relationship between phosphorus and mortality in dialysis patients. Managing patients more aggressively, if you will, to a lower phosphorus level is a benefit to patients. With Tenaponor, I think they can do that. That's clearly where the label is written. It is an add-on therapy.
Our new technology come in what we know and Auryxia as a great products of element is great product.
They don't manage patients phosphorus levels to normal and we know that there's a direct relationship between phosphorus and mortality in dialysis patients and so managing patients.
More aggressively if you will to a lower phosphorus level is a benefit to patients and what can happen. There I think they can do that and that's clearly where the label is written it is an add on therapy. So.
So, you know, I didn't mention that as one of the things that can help drive a rickshaw sales, there will be more interest in phosphorus management with physicians because they have, and the Ardellic folks will be out there talking about, to NAPA, or as well. And, you know, the idea that patients who have an average phosphorus of six...
I didn't mention that as one of the things that can help drive auryxia sales.
There will be more interest in phosphorus management with physicians because they have.
Alex folks will be out there talking about <unk> as well.
The idea that patients who have an average <unk> of six can get the 5% or four and a half would be a fantastic thing for patient outcomes and at the end of the day more focus on phosphate binders.
can get the five or four and a half would be a fantastic thing for patient outcomes. And at the end of the day, more focus on phosphorypinders or phosphated control only helps.
Phosphate control.
Only helps auryxia.
Great.
Thank you.
I'm seeing over the questions in the queue. I would now like to turn the conference back to John Butler for closing remarks. Thanks, Chris.
I'm seeing no further questions in the queue I would now like to turn the conference back to John Butler for closing remarks.
Thanks, Chris and thanks, everyone for your questions.
Now, nearly through 2023, I just want to reiterate how well positioned we believe Akibe is to close the year. Our team is committed to our strategic objectives. We're eager to bring Vataducet to patients in the U.S. if approved, and we'll work to ensure Vataducet is available globally through our commercial partnerships. We'll advance our pipeline and grow our revenue in the years ahead.
We're now nearly through 2023, I just want to reiterate how well positioned we believe <unk> is to close the year. Our team is committed to our strategic objectives, we're eager to bring <unk> to patients in the U S. If approved and will work to ensure that it is.
<unk> said is available globally through our commercial partnerships, we'll advance our pipeline and grow our revenue in the years ahead.
We believe our efforts will help create sustained value for our shareholders while continue towards our purpose to better the lives of people impacted by kidney disease.
We believe our efforts will help create sustained value for our shareholders. While continue towards our purpose to better the lives of people impacted by kidney disease. Thanks.
Thanks everyone for joining us today. I look forward to updating you in the future.
Thanks, everyone for joining us today I look forward to updating you in the future.
This concludes today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.
This concludes today's conference call. Thank you all for participating you may now disconnect and have a pleasant day.
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