Q1 2024 Akebia Therapeutics Inc Earnings Call
Operator: Hello, and welcome to Akebia's first quarter 2024 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising that your hand has been raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Senior Director of Investor Relations, Mercedes Carrasco.
Hello.
Welcome.
First quarter 2024 financial results conference call.
At this time all participants are in a listen only mode.
After the speaker presentation.
A question and answer session.
A question during this session you will need to press star one.
The telephone.
Then here an automated message advising that your hain has been raised.
Draw. Your question. Please press star one again please.
Please be advised that today's conference is being recorded.
It is now my pleasure to introduce senior director Investor Relations Mercedes Tabasco.
Mercedes Carrasco: Thank you and welcome to Akebia's first quarter 2024 Financial Results and Business Updates conference call. Please note that a press release was issued earlier today, Thursday, May 9, detailing our first quarter financial results, and that release is available on the Investor section of our website. For our convenience, a replay of today's call will be available on our website after we conclude. Joining me on the call today are John Butler, Chief Executive Officer and Principal Financial Officer, and Nick Grund, Chief Commercial Officer.
Mercedes Carrasco: Thank you and welcome Kirk P. B S first quarter of 'twenty 'twenty four financial results and business update conference call. Please note that our press release was issued earlier today Thursday may 9th detailing our first quarter financial results and that relief is available on the investors section of our.
Mercedes Carrasco: [noise] website for our convenience a replay of today's call will be available on our website. After we conclude joy.
Kirk P.: Joining me for the call today, we have John Butler, Chief Executive Officer, and principal financial Officer, and Nick Grund, Our Chief commercial 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 could differ.
Mercedes Carrasco: 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. Additional information describing these risks is included in the financial results press release that we issued on May 9, 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. The forward-looking statements on this call speak only as to the original date of this call, except as required by law. We do not undertake any obligation to update or revise any of these statements.
Kirk P.: Materially from those described in these statements additional information describing these risks is included in the financial results press release that we issued on May nine 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.
Kirk P.: The forward 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.
Kirk P.: With that I'd like to introduce our CEO John Butler.
John P. Butler: Thanks Mercedes, and thanks everyone for joining us today. This is our first quarterly call since the approval of AFSEO in late March. Though only about six weeks ago, I'm extremely encouraged by our early progress. I'm excited by the reaction of the dialysis market, prescribers, dialysis providers, and patient groups, as well as the excitement from the folks at Akebia to get this product into the hands of patients. We celebrated the milestone and win for the kidney community for a moment, then immediately kicked into high gear to initiate our launch.
John P. Butler: Thanks, Mercedes and thanks, everyone for joining us today.
John P. Butler: This is our first quarterly call since the approval of <unk> in late March.
John P. Butler: Only about six weeks ago I'm extremely encouraged by our early progress.
John P. Butler: I'm excited by the reaction of the dialysis market prescribers dialysis providers and patient groups as well as the excitement from the folks that are keep you got to get this product into the hands of patients.
John P. Butler: We celebrated the milestone in wind for the kidney community for a moment then immediately kicked into high gear to initiate our launch.
John P. Butler: On our VASEO approval call, I outlined three things we have to execute effectively to drive a successful launch and ensure long-term growth of VASEO in dialysis. First, drive demand from prescribers. Second, contract effectively with dialysis providers, and third, demonstrate potential additional benefits of VASEO for dialysis patients and the folks who serve them. Nick will go into more detail, but I'll share that our commercial and medical affairs teams have already engaged with thousands of physicians.
On our Vaxjo approval call I outlined three things, we have to execute effectively to drive a successful launch and ensure long term growth of FCO and dialysis.
First drive demand from prescribers.
John P. Butler: Second contract effectively with dialysis providers and third demonstrate potential additional benefits of <unk> for dialysis patients and the folks who serve them.
John P. Butler: Nick will go into more detail, but I'll share that our commercial and medical affairs teams had already engaged with thousands of physicians.
John P. Butler: I'm extremely encouraged by physicians' interest and enthusiasm, particularly when I speak to investigators who have experience using the product. We believe the VASEO label supports widespread adoption, and that's how we're presenting the product to the market.
John P. Butler: I am extremely encouraged by the physician interest and enthusiasm, particularly when I speak to investigators who have experience using the product.
John P. Butler: We believe the vast field label supports widespread adoption and that's how we're presenting the product to the market.
John P. Butler: We've developed our launch strategy and tactics that best position VASEO to potentially become a new oral standard of care for dialysis patients with anemia due to chronic kidney disease. As I speak to potential VASEO prescribers, besides describing their clear interest in using the product for their dialysis patients, they ask me to please not give up on working towards an approval for non-dialysis patients. We will not give up on this patient population
We've developed our launch strategy and tactics that best position vaxjo to potentially become a new oral standard of care for dialysis patients with anemia due to chronic kidney disease.
John P. Butler: As I speak to potential vascular prescribers, besides describing their clear interest in using the product for their dialysis patients. They asked me to please not give up on working towards an approval for non dialysis patients.
John P. Butler: We will not give up on this patient population.
John P. Butler: The FDA in the Vatiduce.crl suggested we return and discuss appropriate subpopulations where the benefit risk is positive. Now, this may include conducting a new clinical trial to supplement the data we already have in the patient population we plan to discuss. One potential subgroup we're exploring are CKD patients with anemia not on dialysis with a GFR below 15. We believe these patients would benefit from treatment with Vasio. Over 70 percent of these patients are not treated today, and they routinely have a higher mortality rate than patients who had their anemia controlled before dialysis, and they continue to have a higher mortality rate 12 months after starting dialysis. A once-a-day oral option may be ideal for this patient population.
John P. Butler: The FDA in Nevada do start CRM suggested we return and discuss appropriate subpopulations, where the benefit risk is positive.
John P. Butler: Now this may include conducting a new clinical trial to supplement the data we already have in the patient population we plan to discuss.
John P. Butler: One potential subgroup were exploring our <unk> patients with anemia, not on dialysis with the GFR below 15.
John P. Butler: We believe these patients would benefit from treatment with ico over 70% of these patients are not treated today and they routinely have a higher mortality rate than patients who had their anemia controlled before dialysis.
John P. Butler: And they continue to have a higher mortality rate 12 months after starting dialysis.
John P. Butler: A once a day oral option may be ideal for this patient population.
John P. Butler: We plan to engage the FDA this year to discuss a path forward for these patients, and it's critical that we take this population into account as we determine our WAC pricing for VASEO. We are carefully considering pricing and will announce the WAC by next month. Now, let me ask Nick to give us more detail on launch execution. Thanks, John.
John P. Butler: We plan to engage the FDA this year to discuss the path forward for these patients.
John P. Butler: And it's critical that we take this population into account as we determine our WAC pricing for <unk>.
John P. Butler: We are carefully considering pricing and we will announce the whack by next month.
John P. Butler: So now let me ask Nick to give us more detail on launch execution.
Nicholas Grund: And good morning to those of you joining us on the call. I'm pleased to report that the experienced Akebia commercial and medical affairs organizations have been extremely active in the field, engaging with prescribers to build demand for Vapsio and with dialysis providers to effectively contract as we prepare for product availability and DAPA reimbursement in January. It is apparent that excitement and advocacy around the HIST class are strong because of clear unmet medical need. Nephrologists report that one-third of the dialysis patients with anemia due to CKD have hemoglobin levels that are below the target. This is despite the availability of ESS.
Nicholas Grund: Thanks, John and good morning to those of you joining us on the call.
Nicholas Grund: Further, Akebia-sponsored market research found 85% of physicians are familiar with the HIF class, and of those who are extremely familiar, 85% have a very positive view. This is despite the low early adoption of the other approved medicines. I believe this is a very solid foundation to build upon with strong differentiating messages specific to VAP. Additional research suggests that nephrologists envision broad utilization of a HIF product with over 75% of nephrologists stating that they are comfortable prescribing a HIF in any dialysis. In fact, research suggests a HIF will be the preferred treatment versus ESAs for almost one third of patients.
Nicholas Grund: Pleased to report that the experience to keep your commercial and medical affairs organizations have been extremely active in the field engaging with prescribers to build demand for vas here and with dialysis providers to effectively contract as we prepare for product availability and TDAP a reimbursement in January.
Nicholas Grund: It is apparent that excitement and advocacy around the his class as strong a clear unmet medical need exists with Nephrologist reporting about one third of the dialysis patients with anemia due to <unk> have hemoglobin levels that are below the target range. This is despite the availability of Esa.
Nicholas Grund: Further <unk> sponsored market research found 85% of physicians are familiar with the hip class.
Nicholas Grund: And of those who are extremely familiar 85% have a very positive impression.
Nicholas Grund: This is despite the low early adoption of the other approved here.
Nicholas Grund: I believe this is a very solid foundation to build upon with strong differentiating messages specific diverse yet.
Nicholas Grund: Additional research suggests that Nephrologist envision broad utilization of our hip product with over 75% of Nephrologist, stating that they are comfortable prescribing a hip in any dialysis setting.
Nicholas Grund: In fact research suggests a half will be the preferred treatment versus Esa for almost one third of Nephrologist. These.
Nicholas Grund: These metrics are very encouraging. Even prior to approval, we had started to ramp up for launch. The first step was the expansion of our field-based medical and commercial teams, which grew 55% from 2020. We are excited to have expanded the teams now so that we have an eight-month runway to continue to build advocacy and demand for VASA. In the first six weeks since approval, Akebia's key account managers have been actively engaging with approximately 4,500 calls to our key target prescribers, with many of those calls including VASIO messages. John will talk more about this later, but I will quickly note that the VASEO approval has facilitated improved access to Erixia prescribers. The efforts of the field team have been further supported by digital technology.
Nicholas Grund: These metrics are very encouraging.
Nicholas Grund: Even prior to approval, we are starting to ramp up for launch. The first step was the expansion of our field based medical and commercial teams, which grew we grew 55% from 2023.
We are excited to have expanded the teams now so that we have an eight month runway to continue to build advocacy and demand for <unk>.
Nicholas Grund: In the first six weeks since approval of TB as key account managers have been actively engaging with approximately 4500 calls to our key target prescribers with many of those calls including Bassi on messaging.
Nicholas Grund: John will talk more about this later, but I will quickly note that the vascular approval has facilitated improved access to Auryxia prescribers.
Nicholas Grund: The efforts in the field team has been further supported by digital tactics vascular messages appeared in almost 26000 times and paid et cetera search and we have had over 240000 targeted brand impressions.
Nicholas Grund: VASEO messages appeared almost 26,000 times in paid search, and we had over 240,000 targeted brand impressions. We are also proud to have had sponsorship presence at three key meetings, the American Nephrology Nurses Association, the Renal Physicians Association, and the Renal Healthcare Association, which allow for scientific exchange and in-depth discussions with key customers. In parallel, Akebia's Medical Affairs team continues to work with our Publications Steering Committee to ensure timely and continued publication of relevant Betadustat data for clinical and scientific purposes. To date, the primary results for both Innovate and Protect Global Phase III clinical programs have been published in the New England Journal of Medicine, to separate Data on several additional important analyses and subgroups have been published, including peritoneal dialysis subgroup, erythropoietic effects of Atadustat, and the overall adverse event profile of Atadustat from the pooled Phase III clinical program.
Nicholas Grund: We are also proud to have had sponsorship presence at three key meetings since approval.
Nicholas Grund: The American Nephrology Nurses Association, the renal physicians Association and the renal healthcare Association meetings, which allowed for scientific exchange sensors and in depth discussions with key customers.
Nicholas Grund: In parallel <unk> Medical Affairs team continues to work with our publication steering committee to ensure timely and continued publication of relevant <unk> data for clinical and scientific community.
Nicholas Grund: To date the primary results for both innovate and protect global Phase III clinical programs have been published in the New England Journal of Medicine in two separate manuscripts.
Nicholas Grund: Data on several additional important analysis and subgroups have been published including peritoneal dialysis subgroup, a regional poetic effects of <unk> overall adverse event profile of that lease that from a pooled phase III clinical program et cetera. These.
Nicholas Grund: These publications were helpful in driving the high degree of HIF awareness that we are reporting from the, As of the first quarter, the medical affairs team continues to publish key data and analysis at scientific meetings, such as the 2024 annual dial, cardiovascular safety of vatadustat in patients new to dialysis with CKD-related anemia, and the Safety and Efficacy of Vatozoostat in the Treatment of Anemia in the U.S. region More information is available on our website. Beyond Driving Prescriber Awareness, Advocacy, and Demand
Nicholas Grund: These publications were helpful in driving the high degree of awareness that we are reporting from the field.
Nicholas Grund: As of the first quarter, our medical Affairs team continues to publish key data and analysis at scientific meetings, such as the 2024 annual dialysis conference, where the cardiovascular safety of <unk> in patients new to dialysis with CTD related anemia.
Nicholas Grund: And the safety and efficacy of <unk> in the treatment of anemia patients with C kit in the U S region were presented.
Nicholas Grund: Beyond driving prescriber awareness advocacy and demand.
Nicholas Grund: Contracting with dialysis organizations. Through that process, we will finalize our WAC. As a reminder, we anticipate pricing VASEO at a premium. As you likely know, medications for dialysis patients are contracted through dialysis organizations, and those contracts include both an off-invoice discount, meaning that when volume goes up, the net price will come down.
Nicholas Grund: Contracting with dialysis organizations is critical.
Nicholas Grund: Through that process, we will finalize our WAC price has.
Nicholas Grund: As a reminder, we anticipate pricing <unk> at a premium as you likely know medications for dialysis patients are contracted through dialysis organizations and those contracts include both an off invoice discount and a volume based discount opportunity.
Nicholas Grund: Meaning that when volume goes up net price will come down.
Nicholas Grund: Engagement with dialysis organizations has been productive. Commercial discussions have been initiated with large dialysis organizations, and ongoing contract development meetings are Arixi and the high likelihood phosphate binders will be in the bundle have allowed us to begin dialogue with dialysis organizations, where we have aligned around contract structure. Critical Components of Implementation, clickable across the board
Nicholas Grund: Engagement with dialysis organizations has been productive commercial discussions have been initiated with large dialysis organizations and ongoing contract development meetings our plant.
Nicholas Grund: <unk> in the high likelihood phosphate binders will be in the bundle has allowed for us to begin dialogue with dialysis organizations, where we aligned around contract structure and critical components of implementation applet.
Nicholas Grund: <unk> across the portfolio.
Nicholas Grund: With both products available, we have a unique offering to help patients in dialysis organizations achieve their goals. I look forward to updating you as we finalize these agreements over the next several. Turning now to DAP. We will submit our application by June. And as a reminder, that the application is only accepted once a quarter.
Nicholas Grund: With both products available, we have a unique offering to help patients and dialysis organizations achieve their goals.
Nicholas Grund: Look forward to updating you as we finalize these agreements over the next several months.
Turning now to dapple, we will submit our application by June and as a reminder, at the application is only accepted once a quarter.
Nicholas Grund: After a six-month TADAPA application process anticipated to be completed in January 2025, we expect the product would be reimbursed and widely available and accessible to patients with rapid. As you can see, our entire organization is working on every aspect of reaching our prospective prescribers, securing access for patients through key channels, and laying groundwork for future growth. Our partners are hard at work. Medici plans to launch Basio in Germany and Austria as early as June 1st. They also have launches planned in the Netherlands, Switzerland, Sweden, Norway, and Finland by the end of the year.
After a six month to Napa application process anticipated to be completed in January 2025.
Nicholas Grund: We expect the product would be reimbursed and widely available and accessible to patients with rapid adoption.
Nicholas Grund: As you can see our entire organization is working on every aspect, reaching our prospective prescribers securing access for patients through key channels and laying groundwork for future growth.
Nicholas Grund: Our partners are hard at work here.
Nicholas Grund: <unk> plans to launch <unk> in Germany, and Austria as early as June <unk>. They also have launches planned in Netherlands, Switzerland, Sweden, Norway, and Finland by end of the year.
Nicholas Grund: While we reiterate that a U.S. launch of VASIO represents the primary commercial opportunity and the potential to target an approximately $1 billion US market, we're also pleased that patients through Uroborosin. Now, let me pass it to Sean to cover additional opportunities and next steps. Thanks, Nick.
Nicholas Grund: While we reiterate that a U S launch of <unk> represents the primary commercial opportunity for <unk> and the potential to target and approximately $1 billion U S market.
Nicholas Grund: We're also pleased that patients through Europe will soon have access to the product now.
Nicholas Grund: Now, let me pass it to John to cover additional opportunities and next steps.
John P. Butler: Nick covered prescriber demand and the contracting progress. The third strategic imperative is to continue to collaborate on clinical studies to fill gaps in our data, potentially to expand our label, and separately to allow large dialysis providers to gain experience utilizing Vafseo in their own patients. We're in discussions with key investigators and dialysis providers on a collaborative study that we believe will generate significant data. We hope that these data will lead to valuable publications to support further physician education, as well as provide doctors with increased comfort in utilizing VASEO, potentially enabling continued growth and utilization even after TDAPA concludes.
John P. Butler: Thanks, Nick Nick covered prescriber demand and the contracting progress the third strategic imperative is to continue to collaborate on clinical studies to fill gaps in our data potentially to expand our label and separately to allow large dialysis providers to gain experience utilizing vaxjo in their own patients.
John P. Butler: We're in discussions with key investigators and dialysis providers on a collaborative study that we believe will generate significant data.
John P. Butler: We hope that these data will lead to valuable publications to support further physician education as well as provide doctors with increased comfort and utilizing the FCO potentially enabling continued growth in utilization even after TDAP a concludes.
John P. Butler: Again, we believe the VASEO label supports widespread adoption in dialysis patients. Our team has been working diligently to prepare the groundwork for potential VASIO label expansion to permit for more flexible utilization of the product in both new-to-dialysis patients and in alternative dosing regimens. As I mentioned earlier, we also believe VAPSEO could benefit CKD patients who are not on dialysis, and we plan to explore label expansion to those patients as well.
John P. Butler: Again, we believe the vascular label supports widespread adoption in dialysis patients. Our team has been working diligently to prepare the groundwork for potential vascular label expansion.
John P. Butler: To permit for more flexible utilization of the product in both new to dialysis patients and an alternative dosing regimens.
John P. Butler: As I mentioned earlier, we also believe FCO could benefit <unk> patients who are not on dialysis and we plan to explore label expansion to those patients as well.
John P. Butler: This is the most significant potential value driver for Akebia after the launch in dialysis. Now I'll switch gears to our financial results. But before I review the financials, I'll mention that we have an active search for CFO that's going well. I'd like to thank our finance team and our chief accounting officer, Richard Malabry, for the effort and attention they've put in since our year-end close to ensure the quarter close process was seamless while I serve as principal financial officer.
John P. Butler: This is the most significant potential value driver for <unk> after the launch in dialysis.
John P. Butler: Now I'll switch gears to our financial results, but before I review the financials I will mention that we have an active search for a CFO that's going well.
John P. Butler: To thank our finance team and our Chief Accounting Officer, Richard Malabry for the effort and attention they've put in since our year end close to ensure the quarter close process was seamless while I serve as principal financial officer.
John P. Butler: As we've previously reported, I can reiterate that we are well financed to execute on our Vafseal launch. We have also previously strengthened our balance sheet with proceeds from our at-the-market or ATM sales agreement. Our cash and cash equivalents as of March 31st, 2024 were approximately $42 million. In addition, in Q2, we drew down the additional $8 million available to us upon approval by AFSEO under the BlackRock Debt Facility. We expect that our cash on hand, as well as revenue generated by Erixia and now Vafcio, starting in January, will fund planned operations for at least two years.
John P. Butler: As we've previously reported I can reiterate that we are well financed to execute on our <unk> launch.
John P. Butler: We also previously strengthened our balance sheet with proceeds from our aftermarket or ATM sales agreement.
John P. Butler: Our cash and cash equivalents as of March 31, 2024 were approximately $42 million in.
John P. Butler: In addition in Q2, we drew down the additional $8 million available to us upon approval of FCO under the Blackrock debt facility.
John P. Butler: We expect that our cash on hand, as well as revenue generated by Auryxia and now Vaxjo starting in January will fund planned operations for at least two years.
John P. Butler: We've kept tight control of our spending in the first quarter and are managing the business for stable year-over-year spending in 2024. The team is demonstrating good financial discipline while investing appropriately for a successful launch. You'll notice that we also announced that we amended our working capital agreement with VIFOR to simplify the payback as a royalty. This does not fundamentally change the timing of the payback of that cash, but it greatly simplifies the operational aspects of managing our supply chain.
John P. Butler: We've kept tight control of our spending in the first quarter and are managing the business for stable year over year spending in 2024.
John P. Butler: The team is demonstrating good financial discipline, while investing appropriately for a successful launch.
John P. Butler: You'll notice we also announced that we amended our working capital agreement with <unk> to simplify the payback as a royalty.
John P. Butler: This does not fundamentally change the timing of the payback of that cash, but it greatly simplifies the operational aspects of managing our supply chain.
John P. Butler: Total revenues were $32.6 million for the first quarter of 2024 compared to $40 million for the first quarter of 2023. Net product revenue was $31 million for the first quarter of 24 compared to $34.7 million for the first quarter of 23. The decrease versus last year is largely a volume decrease as a result of our contracting strategy as we exited the final large Part D payer contract.
John P. Butler: Total revenues were $32 6 million for the first quarter of 2024 compared to $40 million for the first quarter of 'twenty three.
John P. Butler: Net product revenues were $31 million for the first quarter of 24 compared to $34 7 million for the first quarter of 'twenty three.
John P. Butler: The decrease versus last year is largely a volume decrease as a result of our contracting strategy as we exited the final large part D payer contract.
John P. Butler: We remain confident that we can achieve net product revenue growth of 24 versus 23. We believe our Erixia outreach is actually enhanced by the Vafseo launch as prescribers are eager to discuss a new product. And recall that there is a 96% overlap between Erixia and Vafseo target prescribers. Also, CMS has released guidance on incorporating phosphate binders into the dialysis bundle. Dialysis organizations are now contracting with an eye towards the binders going into the bundle in 25, as Nick mentioned. One other note on Erixia.
John P. Butler: We remain confident that we can achieve net product revenue growth in 24 versus <unk> 23.
John P. Butler: We believe our Auryxia outreach is actually enhanced by the <unk> launch as prescribers are eager to discuss a new product and recall that there is a 96% overlap between auryxia and vaxjo target prescribers.
John P. Butler: Also CMS has released guidance on incorporating phosphate binders into the dialysis bundle.
John P. Butler: Dialysis organizations are now contracting with an eye towards the binders go into into the bundle and 25% as Nick mentioned.
John P. Butler: In April, Akebia's licensee, Averoa, submitted a marketing authorization application to the European Medicines Agency for Ferric Citrate Coordination Comp. If approved, Averoe will make the product available to patients throughout the EU. I want to congratulate Avaro on the submission and will be available to support launch efforts in the coming year. Cost of goods sold was $11.6 million for the first quarter of 24 compared to $20.2 million for the first quarter of 23.
John P. Butler: One other note on Auryxia in April <unk> licensee Ambarella submitted a marketing authorization application to the European Medicines agency for ferric citrate coordination complex and if approved <unk> will make the product available to patients throughout the EU.
John P. Butler: I want to congratulate <unk> on the submission and will be available to support launch efforts in the coming years.
John P. Butler: Cost of goods sold were $11 6 million for the first quarter of 'twenty four compared to $22 million for the first quarter of 'twenty three.
John P. Butler: Akebia continues to carry a non-cash intangible amortization charge of $9 million per quarter through the fourth quarter of this year. Research and development expenses were $9.7 million for the first quarter of 24 compared to $19.7 million for the first quarter of 23. Now, we will continue to progress a number of new programs in 24, including the collaborative study I mentioned earlier, as well as preclinical development of HIF-based molecules in our pipeline.
John P. Butler: <unk> continues to carry a noncash intangible amortization charge of $9 million per quarter through the fourth quarter of this year.
John P. Butler: Research and development expenses were $9 7 million for the first quarter of 24 compared to $19 7 million for the first quarter of 'twenty three.
John P. Butler: And we will continue to progress a number of new programs in 24, including the collaborative study I mentioned earlier as well as preclinical development of <unk> based molecules in our pipeline, but we do not expect a step up over 23 expenses.
John P. Butler: SG&A expenses were $25 4 million for the first quarter of 24 compared to $25 1 million for the first quarter of 'twenty three.
John P. Butler: Again, we're tightly controlling spend and do not expect a significant uptick as we launch <unk>.
John P. Butler: Net loss was $18 million for the first quarter of 24 compared to a net loss of $26 9 million for the first quarter of 2023.
John P. Butler: But we do not expect a step up over 23 expenses. SG&A expenses were $25.4 million for the first quarter of 24 compared to $25.1 million for the first quarter of 23. Again, we're tightly controlling spend and do not expect a significant uptick as we launch VASIO. The net loss was $18 million for the first quarter of 24 compared to a net loss of $26.9 million for the first quarter of 2023. Before opening the line for questions, I know that Allie Bratzel from Piper could not make the call this morning, but she sent Mercedes a couple of questions, and maybe we can start with those. Mercedes?
Speaker Change: Before opening the line for questions I know that Ali <unk> from Piper could not make the call. This morning, but she said Mercedes.
Speaker Change: Couple of questions and maybe we can start with those savings.
Mercedes Carrasco: Sure. Thanks, John. The first question: please walk us through the V4 license agreement and amendment and how we should think about modeling the impact.
Mercedes: Thanks, John.
Ali: First question. Please walk us through the need for a license agreement and amendment and how we should think about modeling the impact.
John P. Butler: Sure, so just to remind everyone, back in 2022, as part of an amendment to the V4 agreement, V4 provided $40 million of working capital, or a working capital fund, to finance the product purchases for Vafseo in advance of launch. And in the agreement, we had basically a payback that would go on over time where ultimately the $40 million would be returned to them. It was a very complicated process, you know, as POs are approved, more money is added or money is refunded, and PLs have to be agreed upon, and it really complicated the management of our supply chain, but it was wonderful to have that $40 million in cash to help finance the purchase of our product. So we really wanted to look to simplify that arrangement.
Mercedes: Sure. So just to remind everyone back in 2022 as part of an amendment to the before agreement.
John P. Butler: So previously, you know, the way we would model it out is that $40 million would be a hit to our cost of goods over time. And as I said, that would decrease over the life of the product, ultimately being paid back fully. So we really tried to model that as closely as we could in a royalty relationship.
Mercedes: Before provided $40 million of working capital or working capital fund.
Mercedes: To finance the.
Mercedes: Product.
Mercedes: Purchases for <unk> in advance of launch and in the agreement we had a.
Mercedes: Basically a payback that we've gone over time, where ultimately the $40 million would be returned to them.
Mercedes: It is a very complicated.
Mercedes: As as pose are approved.
Mercedes: Yes.
Mercedes: More money is added or monies refunded and <unk>.
Mercedes: <unk> have to be.
Mercedes: Agreed upon and it really complicated.
Mercedes: The management of our supply chain, but it was wonderful to have that $40 million in cash.
Mercedes: To help finance the.
Mercedes: The the purchases of our product.
Mercedes: So we really wanted to look to simplify that that arrangement. So.
Mercedes: Previously the way we would model it out is that $40 million would be a hit to our cost of goods over time.
Mercedes: You said that would decrease over the life of the product ultimately being paid back fully.
Mercedes: So we really tried to model that as closely as we could in a royalty relationship. So.
John P. Butler: So basically, there will be no payments, no royalty payments till July 1st of next year. And then it's an 8% royalty for the first or for under $100 million in revenue. And the dollars over 100 million is a 14% revenue over time. And then there are three makeup periods at the end of 26, 27, and 28. That's $10 million if they haven't received that in royalties, $20 million, and then $40 million at the end of 28.
Mercedes: So basically there will be no payments no royalty payments until July 1st of next year and then it's an 8% royalty for the first store for under $100 million in revenue and a $1 over $100 million is a 14% revenue overtime and then Theres three makeup.
Mercedes: At the end of 'twenty, six 'twenty seven and 28.
Mercedes: Thats $10 million, if they haven't received that and royalty $20 million and then $40 million at the end of 2008. So.
John P. Butler: So that will come in, you know, now would be in your models as a royalty obligation. And again, as I said, it really is quite close to the way we expected that money to be paid back.
Mercedes: So that will come in.
Mercedes: Now would be in your models as a.
Mercedes: As a royalty obligation.
Mercedes: And.
Mercedes: Again as I said, it really is somewhat quite close to the way we expected that money to be paid back over time previously.
John P. Butler: Next, you've indicated cash and cash resources to fund operations for at least two years. What are the underlying assumptions to that projection?
Speaker Change: Thank you.
Speaker Change: Next you've indicated cash and cash resources to fund operations for at least two years, what are the underlying assumptions to that projection.
John P. Butler: Yeah, so it's very simple, actually. We have, you know, we finished our ATM back in the first quarter, then we drew the $8 million on the BlackRock note, and that's kind of our current cash. And we think about current cash plus sales of Erixia and Vafseo, and that, again, will last us at least 24 months. As we think about Erixia, we recognize that there will be LOE in March of next year.
Speaker Change: Yeah. So it's very simple actually we have.
Speaker Change: We finished our ATM back in the first quarter.
Speaker Change: And then we drew the $8 million on the.
Speaker Change: On the Blackrock node and that's kind of current cash.
Speaker Change: And we think about current cash.
Speaker Change: Plus sales of Auryxia and vast Seo.
Speaker Change: That again will last us at least 24 months as we think about Auryxia, we recognize that there is low.
John P. Butler: But with the phosphate binders going into the bundle, we do think there's an opportunity for the product to not have the kind of patent cliff you usually would ascribe to a small molecule. But I think we've been appropriately cautious in our cash planning around the way that revenues will progress for Erixia. We think that there's a real opportunity for the product, but we wanted to be cautious as we planned. And then, on the VASIO launch, obviously, we're looking at sales starting in the first quarter of next year.
Speaker Change: In March of next year, but with the phosphate binders going into the bundle. We do think there is an opportunity.
Speaker Change: For the product too.
Speaker Change: Not have the kind of patent cliff you use.
Speaker Change: Usually we describe to a small molecule, but I think we've been.
Speaker Change: Appropriately cautious in our cash planning around.
Speaker Change: And the way that the revenues will progress for <unk>.
Speaker Change: For <unk>.
Speaker Change: That there's real opportunity.
Speaker Change: For the product, but we wanted to be cautious as we plan.
Speaker Change: And then.
Speaker Change: On the vascular launch obviously were looking at sales starting in the first quarter of next year and during that TDAP a period, we've talked about the opportunity for for rapid adoption.
John P. Butler: And during that PDAPA period, we've talked about the opportunity for rapid adoption. Again, I think even if we are more conservative in our launch projections, we're very comfortable with the cash projection of at least 24 months of cash flow. And of course, if that launch goes even better, that's an even longer runway. Okay, so now, Andrew, maybe we can open the line for questions. Absolutely. As a reminder, to ask a question,
Speaker Change: I think even if we are more conservative in our launch projections, we're very comfortable with the cash projection of at least 24 months of cash runway.
Speaker Change: Of course, if that launch goes.
Speaker Change: Even better that's even that's.
Speaker Change: That's an even longer runway.
Speaker Change: Okay.
Speaker Change: Now Andrew maybe we can open the line for questions absolutely as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced towards your question. Please press star one again.
Operator: Absolutely. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. And our first question comes from the line of Ed Arce with H.C.
Antonio Eduardo Arce: Yes, we can. Hey Ed,
Speaker Change: And our first question comes from the line of Ed Arce with H C. Wainwright.
Antonio Eduardo Arce: Hello can you hear me.
John P. Butler: Great. Hi John, Nick, congrats on the approval once again, and looks like you're really gearing up for preparations starting for sales in January. A few questions for me. First, on pricing, you mentioned that the WAC would be disclosed next month and that, of course, given the value offered here, this would be priced at a premium. I'm wondering if you could go into a little bit more detail around some of the criteria that you evaluated or are evaluating as you come to a final determination on price, in particular the consideration of when the product comes off the Tadapa designation. That's one.
Antonio Eduardo Arce: Yes, we can add great alright, John Nick Congrats on.
Antonio Eduardo Arce: The approval once again it looks like your.
Antonio Eduardo Arce: Really gearing up for preparation.
For sales in January.
Speaker Change: Few questions for me first.
Speaker Change: On the on the pricing you mentioned that the WAC would be disclosed next month and that of course are given.
Speaker Change: The value offered here.
Speaker Change: This would be priced at a premium I'm wondering if you could go into a little bit more detail.
Speaker Change: Around some other criteria that you evaluated or are evaluating as you come through a final determination.
Speaker Change: On the pricing.
Speaker Change: In particular.
Speaker Change: The consideration of when the product comes off the tobacco designation.
John P. Butler: Two is the collaborative study I was wondering if you could give a little more detail as to, you know, what the objectives are there and timelines to the extent that you could share that. And then, finally, the third question is around Avero in the EU. I'm hoping you could provide us with the economics of that partnership there and also when the loss of exclusivity would be under that agreement. Thanks so much.
Speaker Change: That's one.
Speaker Change: Two is the collaborative study I was.
Speaker Change: Wondering if you could give a little more detail as to what the objectives are there and time lines.
To the extent that you could share that and then finally.
Speaker Change: Third question is around of Arrow in.
Speaker Change: In the EU.
Speaker Change: Hoping you could provide us the economics of that.
Speaker Change: Partnership there and also when the loss of exclusivity would be under that agreement. Thanks. So much.
John P. Butler: Great. So we'll start with pricing, and I'll ask Nick to give some color on the work that we're doing. You know, we've talked about announcing WAC pricing next month. And, you know, it's really important to kind of the difference between WAC pricing and what our net pricing in the market will be. And again, I'll ask Nick to spend a little bit of time on that.
Speaker Change: Great. So we'll start with.
Speaker Change: With pricing.
Nicholas Grund: I'll ask Nick to.
Nicholas Grund: To give some color on on the work that we're doing.
Nicholas Grund: We've talked about.
Nicholas Grund: Announcing WAC pricing next next month.
Nicholas Grund: <unk>.
Nicholas Grund: Really important.
Nicholas Grund: It's kind of the difference between WAC pricing and what our net pricing in the market will be and again I'll ask Nick to spin a little bit of time on it but WAC pricing.
John P. Butler: But, you know, WAC pricing kind of really gives you the starting point for pricing and that TDAP or reimbursement. But all of these sales will be contracted sales. And as we said on the earnings call, or sorry, on the approval call, you know, the while not guiding on price, because this really will be contract-dependent, when I look at your model and the other analysts covering the company, the range of net pricing is, you know, is certainly within reasonable expectations of where that will land. And all of you kind of bring net pricing down post Tdapa, and that's exactly what will happen.
Nicholas Grund: Kind of really gives you the starting point for.
Nicholas Grund: For pricing and that TDAP, a reimbursement, but all of these sales will be contracted sales and as we said on the <unk>.
Nicholas Grund: On the earnings call or sorry on the approval call.
Nicholas Grund: While not guiding on price because this really will be contract dependent when I look at your model and the other analysts covering the company the range of net pricing is.
Nicholas Grund: Certainly within.
Nicholas Grund: The reasonable expectations of where that will land and all of you kind of bring net pricing down post TDAP and thats exactly what will happen, we expect that it will become.
Nicholas Grund: Get closer to two Esa pricing.
John P. Butler: We expect that it will become, you know, get closer to ESA pricing. But as we think about WACC, we also really have to think about the NDD population. And, you know, with the IRA, you're only allowed to price once.
Nicholas Grund: But as we think about whack. We also really have to think about the <unk> population and.
Nicholas Grund: With the IRR you are only allowed to price once and you have to think about the entire lifecycle of the product. So.
John P. Butler: And, you know, you have to think about the entire lifecycle of the product. So, and as I mentioned, there are patient populations that we're considering, but we're still... drilling down, if you will, on kind of what patient population to go and talk to the FDA about, and that affects the size of the population, and therefore, and the value we'll bring, and will be part of the pricing. But then, you know, understanding that the economics and dialysis are part of it as well. So, Nick, maybe talk a little bit about that. Yeah, no, it's a great question.
Nicholas Grund: And as I mentioned, there are patient populations that were considering but we're still.
Nicholas Grund: Drilling down if you will on kind of what patient population to go and talk to the FDA about and that affects the size of the population and therefore.
Nicholas Grund: And the value will bring and will be part of pricing, but then understanding the economics in dialysis is part of it as well so maybe talk a little bit about that yeah. No. It's a great question and I could go on for weeks on pricing, but if I just think about the major components is first what's the value of the product really simply we believe this is <unk>.
John P. Butler: And I could go on for weeks on pricing. But if I just think about the major components first, what's the value of the product? Right?
Nicholas Grund: Really simply, we believe this is an innovative, innovative product. We have physician support for that in our market research, where just about 90% of 90% of folks believe the hip class is an advance or major advance versus existing therapy. And so their perceived value as well as what I'll call the real valuable tangible value. We see on the label and with the product, as you noted in my script, 30% of patients are missing the target range on their hemoglobin, and that's despite decades of use with ESA. The second piece around value that I think about is the frequency of overshoots and undershoots.
Speaker Change: The innovative product, we have physician support of that through our market research, where just about 90 or 90% of folks believe the hip classes in advance or major advance versus existing Esa therapy.
Speaker Change: And so they're perceived value.
Speaker Change: Well as what I'll call the real valuable to the tangible value we see in the label and with the product as you noted in my script.
Speaker Change: 30% of patients are missing target ranch on their hemoglobin and.
Speaker Change: And that's despite decades of uses with ESI is the.
Speaker Change: The second piece around value I think about is the frequency of Overshoots and Undershoots, how hard it is for dialysis organizations and physicians to manage even hemoglobin within a relatively tight range.
Nicholas Grund: How hard it is for dialysis organizations and physicians to manage hemoglobin within a relatively tight range. All that value goes into the product and the value of the price. Second, I think about differentiation versus the existing HIFs in the marketplace today. We spent a lot of time talking about their labels and the risk they pose for people with a history of heart failure. Forty percent of that population has a history of heart failure, and therefore, differentiation versus the other HIFs is high.
Speaker Change: All of that value goes into the product and the <unk>.
Speaker Change: You have the pricing.
Speaker Change: Second.
Speaker Change: Think about differentiation versus the existing in the marketplace. Today, we spent a lot of time talking about.
Speaker Change: Their label and the risk it poses for.
Speaker Change: People with a history of heart failure, 40% of that population has a history of heart failure, and therefore differentiation versus the other half is high.
Nicholas Grund: John mentioned the future value of NDV; that's in our thinking as well, or non-dialysis. But then again, when we think about TADAPA and why it was set up, it was set up to support innovative products and support the utilization of those innovative products outside of the bundled rate. And therefore, making sure that the economic support that usage within the dialysis organizations is critically important. In our conversations with dialysis organizations, they understand the innovative value. They also understand the economic incentives associated with it as well. And we've been in good conversations driving towards conclusion here in the late summer and early fall. Thanks, Nick.
Speaker Change: John mentioned, the future value of MTV that thinking as well our non dialysis.
Speaker Change: But then again when we think up to that why it was set up it was set up to support innovative products and support the utilization of those innovative products outside of outside of the bundled rate and therefore, making sure that the economics support that usage within the dice.
Speaker Change: Most organizations is critically important our conversations with dialysis organizations. They understand the innovative value. They also understand the economic incentives associated with it as well and we've been.
Speaker Change: In good conversations driving towards conclusion here in the late summer early fall.
John P. Butler: So your second question was about the collaborative study. Now, this is definitely still in process. But this is, you know, kind of outlined in the script. I mean, we're, There are always data gaps, right? The way I like to think of it is that it took 20 years for dialysis providers and physicians to understand how to use ESAs effectively in dialysis. So there's always a need to generate new data. I look at the Tdapa products that have been introduced, and one of the places I think that they've missed the mark is that they haven't continued to support the product to generate new data. And, you know, we think beyond Tdapa and think about long-term adoption. The price may have to come down post-Tdapa.
Speaker Change: Thanks, Nik. So your second question was on the collaborative study now this is <unk>.
Speaker Change: Still in process, but this is.
Speaker Change: I kind of outlined in the in the script I mean, we are.
Speaker Change: There are always data.
Speaker Change: I'd like to think of it as <unk>.
Speaker Change: It took 20 years for dialysis providers physicians to understand how do.
How do you use Esa is effectively in dialysis, so theres always a need to to generate new data I look at that.
Speaker Change: TDAP or products that have been.
Speaker Change: Been introduced and one of the places I think that they've missed the mark is that they havent continued to support the product to generate new data and we think beyond <unk> and think about long term adoption price may have to come down post <unk> and that's the reality of the market, but the market will continue to grow and we will.
John P. Butler: Now, that's the reality of the market, but the market will continue to grow and will continue to want to penetrate further. And as we said, we have a desire to be an oral standard of care. To do that, you have to continue to generate data.
Speaker Change: To want to penetrate further and as we said we have a desire to be an oral standard of care to do that you have to continue to generate data. So.
John P. Butler: So, you know, I'll refrain from giving specifics around endpoints, et cetera, in the study, but, you know, basically, what you want to do is demonstrate that these are things, outcomes that are significant advantages for patients but also provide either cost savings or benefits to the dialysis providers as well. And beyond that, I mean, it's also an opportunity for, you know, a lot of physicians to have an opportunity to use the drug in their dialysis clinics and, you know, that kind of for dialysis providers to see the drug in their patient's pocket. You know, I referenced that earlier.
Speaker Change: I'll refrain from giving specifics around endpoints et cetera in the study but.
Speaker Change: Basically what you want to do is demonstrate that these are things outcomes that are significant advantages for patients.
Speaker Change: But also.
Provide either cost savings or benefit to the dialysis providers as well.
Speaker Change: Beyond that I mean, it's also an opportunity for.
Speaker Change: For a lot of physicians to have an opportunity to to.
Speaker Change: To use the drug.
Speaker Change: In their dialysis clinics and that kind of for dialysis providers to see the drug in their patient populations.
Speaker Change: I referenced that.
John P. Butler: Now, I've had the opportunity to speak to a number of investigators in other studies. And, you know, when they used the drug, they saw the benefit, they saw how easy it was for them to use, fewer dose titrations, etc. And any bigger study gives more physicians the opportunity to see the benefits of using the product while generating really important data that we can publish and, you know, and can help grow the product through its lifecycle. So stay tuned.
Speaker Change: I've had the opportunity to speak to a number of investigators.
Speaker Change: In other studies and when they've used the drug we've seen the benefit <unk> seen how easy it is for them to use fewer dose titrations et cetera, and any bigger study gives more physicians the opportunity to see the benefits of.
Speaker Change: Using the product, while generating really important data that we can publish and.
Speaker Change: And Ken can help grow the product.
John P. Butler: You know, I think we're quite close to being able to talk more about that study, but it's one we're quite excited about. And then the third question was about Avaroa and Erixia in Europe. This was very much an opportunistic deal. We really had concerns about pricing in Europe and, you know, the ability to make a business. Avaro has approached it and, really, in a creative strategic manner, has worked very, very hard on introducing or getting the product to MAA.
Speaker Change: Through its lifecycle, so stay tuned I.
Speaker Change: I think we're quite close to.
Speaker Change: Being able to talk more about that study but.
Speaker Change: It's one we're quite excited about.
Speaker Change: And then the third question was on <unk>.
Speaker Change: In Auryxia in Europe. This was very much an opportunistic.
Speaker Change: <unk>.
Speaker Change: We really had concerns about pricing in Europe, and the ability to make our business <unk> has approached it and really.
Speaker Change: Creative strategic manner have worked very very hard on introducing or getting the product to MAA.
John P. Butler: The The agreement calls for mid-single-digit to low-double-digit royalties, and, you know, the expectation for Avaroa, which we don't know how likely this will be, but they do hope to get regulatory exclusivity because of the way they're approaching the indication, and that would give them, I think it's, in Europe, 12 years of exclusivity on market exclusivity, but that's not a sure thing But, you know, the way this contract was structured was very advantageous for us, and we're really quite happy with the progress our partners have made.
Speaker Change: <unk>.
Speaker Change: The agreement calls for mid single digit to low double digit royalties.
Speaker Change: And the expectation for ever ROA, which we don't know how likely this will be but they do hope to get regulatory exclusivity because of the way theyre approaching the indication and that would yield them I think it's Europe 12 years of exclusivity on <unk>.
Speaker Change: And our market exclusivity.
Speaker Change: But that's not a.
Speaker Change: Sure thing yet, but the way this contract restructured was very opportunistic for us and we're really quite happy with with the progress our partners made.
John P. Butler: Fantastic. That's helpful. Thank you. Thanks, Ed.
Speaker Change: Fantastic.
Speaker Change: That's helpful. Thank you.
Operator: Thank you. One moment, please, for our next question. And our next question comes from the line of Julian Harrison with BTIG.
Speaker Change: Thanks, Ed.
Speaker Change: Please for our next question.
Speaker Change: And our next question comes from the line of Julian Harrison with <unk>.
Julian Reed Harrison: Hi, good morning. Congratulations on the progress and thank you for taking my questions. First, can you remind us of the segments of the dialysis-dependent CKD market where you expect FAPSCO to have the strongest use case? And with Erixia now entering the bundle in 2025, I'm wondering if you could talk more about how, maybe
Julian Reed Harrison: Hi, good morning, Congrats on the progress and thank you for taking my questions.
Julian Reed Harrison: Can you remind us of the segments of the dialysis dependent ticketing market, where you expect <unk> to have the strongest use case.
Julian Reed Harrison: And with Auryxia now entering the bundle in 2025 I'm wondering if you could talk more about how maybe your long term outlook for Auryxia revenue has changed.
John P. Butler: Julian, thanks so much for the question. I'm going to ask Nick to talk about segmentation. Of course, as I said, you know, our positioning is that this product is appropriate and labeled for any patient who's been on dialysis for at least three months. But clearly, whenever you introduce a new product, there are areas where physicians will want to use the product first, and maybe Nick can outline that. Yeah, and then just to reiterate, when talking to dialysis organizations, as well as physicians, they don't pigeonhole it to any particular modality of dialysis, whether that be in a center or home, though many of their first inclination is home patients make sense; you don't have to bring them into the facility for additional injections. They think they'll be well managed in the home.
Speaker Change: Julien. Thanks, so much for the question, so I'm going to ask Nik to talk about.
Nik: Segmentation of course as I said, our positioning is that this product is.
Speaker Change: Propane is labeled for any patient who has been on dialysis at least three months.
Nik: But clearly whenever we introduce a new product there are areas, where physicians will want to use the.
Nik: The product first and.
Nik: It can outline that.
Nik: And then just to reiterate when talking to dialysis organizations as well as physicians. They don't pigeon hole it to any particular modality of dialysis, whether that'd be in center or home.
Nik: Though many their first inclination is home patients makes.
Speaker Change: Makes sense, you don't have to bring them into the facility for additional.
Nik: Injections.
Nik: They think they'll be well managed in the home many patients who are at home, who unfortunately may have to stick themselves with a needle would enjoy the create the ease of use as well as the less pain associated with an oral dosing.
Nicholas Grund: Many patients who are at home who, unfortunately, may have to stick themselves with a needle would enjoy the ease of use as well as the less pain associated with oral dosing. And so that's a real advantage in a real population that we think will be one of the faster growing in the initial line. The second, the size of that, that's about 80,000 patients and so sizable. The second patient population is the high dose ESA patients. Those are folks that are not well controlled on ESA.
Nik: So that's a real advantage and a real population that we think will be one of the faster growing in the initial launch the second the size of that that's about 80000 patients so sizable.
Nik: The second patient population is.
Nik: The high dose Esa patients those are folks that are not well controlled on an esa, they're requiring higher and higher doses. We heard from several die organization dialysis organization that it represents roughly 15% to 30% of their total population.
Nicholas Grund: They're requiring higher and higher doses. We heard from several dialysis organizations that this represents roughly 15 to 30% of their total population. And one dialysis organization went as far as to say, 20% of our patients on high doses represent 50% of our ESA. So not only do you see a benefit in driving down high doses of ESAs that have been linked to mortality rates, but you also see the opportunity for economic advantages within the dialysis organizations around spending, as we don't see the same dose response needs with VASEO.
Nik: And one dialysis organization went as far as said, 20% of patients on high dose represent 50% of our Esa cost.
Nik: So not only do you see.
Nik: A benefit and driving down high doses of Esa that have been linked to.
Nik: Mortality rates.
Nik: The opportunity for economic advantages within the dialysis organizations around spending as we don't see the same dose.
Nik: Sponsor needs with the FCO and so those two very quickly go to mind.
Nicholas Grund: And so those two very quickly go to mind, but others have also suggested that they would love to take all of the ESA management out of the dialysis organization. And so I do believe it'll be a stepwise fashion about anchoring back to what John said is the broad use of dialysis patients and becoming the next standard of care, which requires us to be able to address all patients. And that's one of the reasons for the desire to continue to generate more clinical data.
Nik: But others have also suggested that they would love to take.
Nik: All of the ESA management out of the dialysis organizations and so I do believe it'll be a stepwise fashion about <unk>.
Nik: And going back to what John said is the broad use in dialysis patients and becoming the next standard of care, which requires us to be able to address all patient needs.
Nik: And Thats one of the reasons for the desire to continue to generate more clinical data and as we said we plan on talking to the FDA ultimately about adding the three times weekly dosing to the label. So we've heard with the focused data that was presented last year that many dialysis.
Nicholas Grund: And as we said, we plan on talking to the FDA ultimately about adding the three times weekly dosing to the label. So, you know, we've heard with the focus data that was presented last year that many dialysis providers will make that choice on their own. And I am encouraged to hear about the folks who really just want to take anemia management out of the analysis center completely, and the once a day oral nature of the product makes a lot of sense.
Nik: Providers will make that choice.
Nik: On their own.
Nik: I am encouraged to hear about the folks who really just want to take anemia management out of the dialysis center completely in the once a day oral nature of the product makes a lot of sense.
Nicholas Grund: And again, I'll ask for Nick's comments on Erixia revenue and maybe on more specifics around the binders in the bundle. I'll have to say, Julian, that was, has been our expectation. This is where we're going to land.
Nik: Again, I'll ask for Nick's comments on on Auryxia revenue and maybe on more of the specifics around the binders and the bundle. They will have to say Julian I mean that was.
Nicholas Grund: Has been our expectation this is where we're going to land I know.
John P. Butler: I know, you know, and there's still the potential for legislation to delay that. But given that CMS has now put out guidance, I think it's less and less likely that there's going to be any delay. And, you know, we've been readying ourselves for this for some time.
Nicholas Grund: There's still the potential for legislation to AUM.
Nicholas Grund: To delay that but.
Nicholas Grund: But given that CMS has now put out guidance I think it's.
Speaker Change: It's less and less likely that there's going to be any delay in we've been readying ourselves for this for some time.
Nicholas Grund: Yeah, when I think about Pioneers in the Bundle, you know, it is one where the Tadapa profile around creating incentives around innovative products also applies to branded products that are existing in the marketplace as they go into the bundled environment. When I think about that, I imagine dialysis organizations, in our conversations, they're going to want to put further controls around their formularies around that. And therefore, making sure we're out there engaging with them around the value of Erixia is extremely important.
Speaker Change: Yeah, when I think about partners in the bundle it is one where the tap a profile around.
Nicholas Grund: Creating incentives around innovative products also applies to branded products that are existing in the marketplace as they go into the bundled environment.
Nicholas Grund: When I think about that.
Nicholas Grund: <unk> dialysis organizations in our conversations they're going to want to put further controls around their formularies around that and therefore, making sure we're out there engaging with them around the value of Auryxia.
Nicholas Grund: Erixia is a very, very good binder in the eyes of the physicians, and they really want to use it moving forward. I believe it'll allow us to contract for predictability around volume in the face of potential generic competition. We haven't necessarily built that into our cash flow models as we talked about it, but if you can imagine folks having Erixia on formulary with open access, certainly Medicare fee-for-service patients will be that first population that we'll see usage in.
Nicholas Grund: It's extremely important to Auryxia is a very very good binder in the eyes of the physician.
Nicholas Grund: And they really want to use it moving forward I believe it will allow us to contract for predictability around volume in the face of potential generic competition, we haven't necessarily built that into our cash flow models as we've talked about it but if you can imagine.
Nicholas Grund: Folks.
Nicholas Grund: Having a <unk> on formulary with open access certainly in the Medicare fee for service patients will be that first population.
Nicholas Grund: But an open formulary position with Erixia, compared to where we are today, will be an enhancement of physicians' access to the product. And all that underpins how we think about the opportunity binders going into the bundle may present for
Nicholas Grund: And that we will see usage in an open formulary position with our rigs compared to where we are today.
Nicholas Grund: Be an enhancement to physicians access to the product and all of that underpins how do we think about the opportunity.
Nicholas Grund: Binders going into the bundle may present for Auryxia.
Julian Reed Harrison: Very helpful. Thank you very much.
Speaker Change: Very helpful. Thank you very much.
Speaker Change: Thank you.
Operator: Now I'm showing no further questions. So with that, I'll hand the call back over to CEO John Butler for any closing remarks.
Julian Reed Harrison: Showing no further questions so with that I'll hand, the call back over to CEO, John Butler for any closing remarks.
John P. Butler: Thanks, Andrew, and I just want to make one correction. You know, I referenced 12 years of exclusivity, and my crack team already got back to me and said it's 10 years of exclusivity in Europe.
John P. Butler: Thanks, Andrew and I, just want to make one correction.
John P. Butler: I referenced 12 years of exclusivity in my.
John P. Butler: My crack team already got back to me and said, it's 10 years exclusivity in Europe. So thank.
Speaker Change: Thank you thanks for that.
Speaker Change: A very nice opportunity for for our partner and for <unk>.
John P. Butler: So thank you, thanks for that, but a very nice opportunity for our partners and for Akebia. So I do want to thank everyone for joining us this morning. Our organization is excited, focused, and executing on the opportunities ahead of us. Since our last earnings report, we've received approval for Vafseo. We're engaging thousands of potential prescribers. We've had contracting discussions for both of our products with almost all significant dialysis providers. We'll submit our application for TDAPA reimbursement in June.
John P. Butler: So I do want to thank everyone for joining us this morning.
John P. Butler: Our organization is excited focused and executing on the opportunities ahead of us.
John P. Butler: Since our last earnings report, we have received approval for Vaxjo, we're engaging thousands of potential prescribers, we've had contracting discussions for both of our products with almost all significant dialysis providers.
John P. Butler: We will submit our application for TDAP a reimbursement in June we're finalizing plans for a significant collaborative research study with <unk> with.
John P. Butler: We're finalizing plans for a significant collaborative research study with VASEO. And we've simplified our work in capital fund repayment with V4CSL. We're preparing to engage FDA on a path for the new dialysis and the pre-dialysis patient population. We're supporting one partner for a launch of AFSEO in Europe this quarter, and a second for a potential launch of Arixia in Europe next year. And we're doing all of this from a position of financial stability. I look forward to continuing to update you on our progress.
John P. Butler: We've simplified our working capital fund repayment with fee for CSL, we're preparing to engage FDA on a path for the new dialysis.
John P. Butler: In the pre dialysis patient populations.
John P. Butler: Supporting one partner for a launch of <unk> in Europe, this quarter and a second on a potential launch of Auryxia in Europe next year, and we're doing all of this from a position of financial strength.
John P. Butler: I look forward to continuing to update you on our progress have a great day.
Operator: Ladies and gentlemen, this does conclude today's program, and you may now disconnect.
Speaker Change: Ladies and gentlemen, thank you for participating this does conclude today's program and you may now disconnect.
Operator: Okay.
Operator: Okay.
Operator: Okay.
Operator: Yes.
Operator: Okay.
Operator: Yes.
Operator: Sure.