Good morning, and welcome to the H.C. Wainwright 26th Annual Global Investment Conference. My name is Ed Arce. I'm one of the senior analysts here at H.C. Wainwright, and I'm very pleased to have with us our presenting company, Akebia Therapeutics. Representing Akebia is the CEO, John Butler. John, welcome. Ed, thanks so much for the invitation. Absolutely. Great to be here. All right, so why don't we start off, John, if you could, for those who may not be familiar with Akebia, to go over the company and your two commercial programs, and where you are now with your- Mm U pcoming catalysts. Yeah, Akebia, I think, is really quite a unique company, in that we are a commercial company with a second commercial product becoming available early next year. So, we have a clear strategic focus on kidney disease, and you know, a desire to continue to grow a pipeline beyond what we have. So our current commercial product, Auryxia, actually just last week celebrated its tenth birthday, so it is a mature product, clearly. Did just over $170 million in revenue last year. We've talked about revenues this year being in line. We know it's interesting, Auryxia is a phosphate binder for patients on dialysis. Phosphate binders are going into the dialysis bundle starting in January 1st. So we knew that the second half of this year was going to have a you know, you're going to be changing the distribution channel, so we're going to really see we're not 100% sure what we're going to see, but we're going to see that shift. And you know, while for some time now we've had a very stable demand rate for the product, some of the market, the channel dynamics are going to come into play for the rest of this year. But we think that there's a really interesting opportunity for the product as part of the dialysis bundle, even though it is a mature product. We're really most excited about Vafseo, our hypoxia-inducible factor prolyl hydroxylase inhibitor for the anemia of chronic kidney disease patients on dialysis. Right. I'm sure we'll talk a lot about that. But this is a product that's going to compete in a billion-dollar market today for dialysis patients. You know, our goal is to ultimately make this a standard of care for these patients. Great. All right, so, with that, let's get a little bit more into the opportunity here with Vafseo. Both with your currently approved label and potential expansions, how do you see that commercial opportunity? As I said, the dialysis market opportunity is a $1 billion market today. You know, ESAs have been used in this space. 90% of the 550,000 dialysis patients are treated with an ESA. You know, it's a significant part of treatment. We're bringing in a product with a novel mechanism of action. You know, some of the things that continue to concern physicians about using ESAs, excursions of hemoglobin above 12, you know, the number of dose titrations that they have to perform to try to keep people within the target range. You know, they're complicated to use, and they carry risk. The idea that you have this mechanism of action where you're really replicating the way the body normally responds to changes in oxygen levels, changes in altitude. You get this very gradual increase in hemoglobin, and you're able to maintain it within the range. We think. When we speak to physicians, this is what they're excited about. You know, they look at, you know, to get to standard of care, you've got to get there over time. You know, where do they think about using the product first? This is an oral product that's used once a day, as in the label today. Home patients. Keep them from having to come into the dialysis center, you know, once a month or twice a month to get a shot of the ESA. High-dose ESA patients, the ones who aren't getting good control, 25% of patients aren't in the target range, even though they've been using this drug, these drugs for 30 years. Right. And oh, by the way, patients who are on the highest doses of ESAs are also the most expensive for dialysis providers, so you know, you look at that, and we can see clear areas where physicians are looking to, you know, they want to try the product, but when we think about the launch, we really think about three legs on the stool, and that's just one. You've got to drive demand from the physician, the people who will write the prescription, but this is dialysis, so it's unique, and you also have to contract effectively with the dialysis providers. This drug will be made available. It will be part of the bundle ultimately, but for two years, it will have separate reimbursement called TDAPA, Transitional Drug Add-on Payment Adjustment, Reimbursement, which is a great opportunity. The CMS created this reimbursement path so that physicians can have a way of trying innovative products. Right. What does it mean? It means the dialysis providers can bill for Vafseo outside of the dialysis bundle on an ASP basis and not have to and not pay for the ESA, if you will, in the bundle payment. So we have to contract effectively so that they don't only say to the physicians, "Yes, you can use the product," but they almost encourage them to try the product. And then to get to standard of care, you've got to continue to generate new data, and that's the third leg of the stool. And, you know, I'm sure we'll talk a little bit about the study we announced last week, the VOICE study, that's really looking to demonstrate superiority for hospitalization, you know, versus the current standard of care. Right. Yeah, so, turning to that study with U.S. Renal Care, can you talk about the importance of that study in the context of your upcoming launch? It's a critical study. Again, it's a critical leg of the stool. You're just, you know, you want physicians to get experience using the drug, but you ultimately want them to see what we see in the drug. And I'll talk a little bit about it. This is an outcome study we're doing with U.S. Renal Care. It's about 2,200 patients. Dr. Geoff Block out of Denver is the lead investigator, and he's the. You know, it's a collaborative study. He's running the study. But when we looked at the INNOVATE study, our once-a-day study, that was the basis for our approval, there was no difference in ESA rescue between us and darbepoetin, even though we under-dosed to start the study and a lot of patients had to be rescued. So then we did a 3x weekly dosing study. Remember, patients go into dialysis three times a week, so they can deliver the dose when they're in dialysis. So we did this study and showed that there was a dramatically lower rate of ESA rescue in the Vafseo group versus Mircera. Well, when you look at the data, MACE was most closely associated with ESA rescue and overshoots, which we had fewer of. So the idea behind VOICE is that if you can now manage the way patients are dosed, lower the ESA rescue, have fewer overshoots, you can actually demonstrate a benefit. And we powered the study to demonstrate a 10% benefit in hospitalization rate, versus ESA. That would be, we'd be able to demonstrate superiority. You know, we had about a 6% reduction in hospitalization in INNOVATE, even though we had all of that other baggage in the study. So we feel confident that we'll be able to demonstrate that. And of course, lower hospitalization rate for patients is great, and for dialysis providers, there are. You keep patients in the chair, they're dialyzing, that's a revenue stream. And, you know, there are a portion of patients who are also fully capitated, where the dialysis providers is on the hook for hospitalization costs as well. So, you know, there's two potential benefits for the dialysis provider. So we think VOICE, ultimately, to get the standard of care is incredibly important. Great. All right, so with the way that the label is set up now, I think you mentioned the early opportunities, both at home and also hyporesponders. With the current label, are there any other subgroups, and when you get the final data from this VOICE study, would that enable then you to be able to move into the broader dialysis center, or is that something that you could do now with the current label? So to be clear, the current label is a broad label. I mean, any dialysis patient is, well, I shouldn't say that. There is a. They have to be on dialysis for three months before starting Vafseo in the current label. Although we have data from, you know, 1,500 or more patients who started dialysis on Vafseo, so we do expect to have that language removed from the label. But patients can get it now. It's just that thought process of physicians always think about where do they wanna to use a product first. And, you know, given that opportunity to do a, you know, once-daily therapy, oral therapy, home patients just make sense. There's 80,000 home patients. And, you know, you mentioned hyporesponders. I think some physicians kind of define hyporesponders as, you know, kind of very, very high-dose ESA. But this idea that patients aren't getting into the range at, you know, high dose. Well, we look at kind of high-dose ESA use as, like, 150,000 patients fall into that category. So, you know, you've got more than half of the, the dialysis population are the low-hanging fruit, if you will. Right We think that the opportunity is there to move the launch very, very quickly. Okay. All right, so then let's move to the payer contracting environment in the dialysis centers. Describe how that would work and how you arrive at a win-win scenario for both you and Vafseo. Yeah. So as I said, dialysis is unique, right? We're not contracting with Part D providers, you know, commercial plans. We're contracting with the dialysis providers. And you know, so we set a WAC price of just over $15,000, about $15,500 a year for the starting dose of Vafseo. We will contract with them in a way that there'll be an off-invoice deduction right from the jump, and then they'll earn rebates with volume, so the larger the volume, the more patients we get on the drug, our average price will decrease, but of course, our volumes will be increasing significantly. So the way the dialysis providers think about that is if there's a heavy lift from their perspective to add a new product to their formulary, to encourage people to try it, the juice has to be worth the squeeze, right? So they have to have a margin in order to do that. And, you know, that's. We expect that will be provided in the contract. On top of that, when you think about the financial benefit for the dialysis provider, is the cost avoidance piece. They are buying ESAs now. On average, it's about $16, that's part of this $271 bundle payment that is attributed to their ESA costs. Some pay more, some pay less, but it's on average about $16. You're no longer having to spend that money, and $16, and you're getting Vafseo paid for and getting a spread on that. That is a pretty significant financial incentive for them. Now, if the physicians don't want it, they'll never push anyone to do that, but you've got to create this win-win where the physicians want it. We believe the physicians want to use the drug, and the dialysis providers are very happy for them to do that because there's a spread that's there for them, and they're avoiding the cost of ESAs. Now, what's critical is TDAPA only lasts two years. So at the end of two years, they need the predictability that they'll only be paying the ESA price for Vafseo once you get outside of TDAPA. Mm-hmm. And that is part of our strategy that you'll that we're giving them that predictability. Now, that's about $2,500 per patient per year. And, you know, that is what drives the billion-dollar market opportunity. So it's still a very substantive market for us, but it's what allows us to, you know, to penetrate the market today, allow them to, you know, kind of benefit on the economic side today, but the patients benefit. And then, once we get out of TDAPA, this is where generating data like the data from VOICE- Mm-hmm. Now we can access the entire dialysis market and continue to grow the product in dialysis. Right. We haven't even talked about non-dialysis yet. Right. Right. So you have both Vafseo and Auryxia going into TDAPA, beginning in January of next year. How does having both of those drugs allow you to improve the contracting dynamics? You know, it's really interesting. We really believed that there would be a benefit in having both products available. But I have to say, it sort of exceeded my expectations because they don't have to contract for Vafseo. They have to contract for Auryxia, right? All of the phosphate binders are going into the bundle. So it's not, you know, we're picking up the phone and calling and saying, you know, "Do you want to talk about a contract for Vafseo?" You know, for all intents and purposes, they're calling us 'cause they need to put Auryxia under contract. And I think, you know, there are some dialysis centers who are a little more ahead of the curve in expecting this to happen. Right. Others were kind of hoping for, you know, the Hail Mary of them being out of the bundle. Right. I think most are recognizing this is happening, and we need to be ready to do that. So, you know, we know about fifteen dialysis providers are 95% of the market. Of course, two of them are 75%-80% of the market, right? So, you know, focusing on contracting with all of them, they need to do that for Auryxia, and we're having that Vafseo contract with them at the same time. So I think it's really enabled the contracting discussions, you know, really, really very, very well for us, so even more than I expected. Right. All right. So, as I mentioned, you will have Vafseo as part of TDAPA. That's also in January. You'll also launch the drug at that time. Right. Vafseo was approved in March, so what is it that you've been doing in your commercial teams, both the sales reps and the others, since then, to prepare for the launch? Yeah, I mean, it's very unique to have a product approval at the end of March and not introduce it until January. And we were very clear with everyone that the TDAPA process is a six-month process, right? So we were approved March twenty-seventh. We filed very early. Only can do that once a quarter. And so we knew that this was the timing, unless we raced to get it in- Mm B efore the end of March. And having this nine months, I think, is, was absolutely necessary, particularly, you know, given they are also working on the phosphate binders, right? So, you know, you're kind of riding the coattails of things they're gonna do with the phosphate binders, like talk to Medicare Advantage plans to try to open up innovation, payments. So, it's been great. And, you know, nephrology launches are sort of notoriously slow, so the idea that, you know, we're spending that slow time, you know, over the course of the nine months, getting physicians excited about using the product, I keep using the analogy of we're trying to compress a spring that, you know, come January, when the product's available, we can release it and see, you know, see sales grow quickly. But you've got to put the contracts in place. Not only do you have to have the contracts, you have to have protocols in place with all of the dialysis providers so that the physicians know how they're allowed to use the drug, right? So, you know, having that time to do that has been really a godsend. And, of course, we had the commercial organization in the field already. You know, there's more than a 90% overlap between Auryxia prescribers and Vafseo prescribers. So the sales force is there. We didn't have to take on a big expense. I think we've added or are in the process of adding, like, four heads to the sales team. You know, we'll end up with about 40 people in the field. You know, it is. They're already out there. We added to our medical group, and they're working on protocols with the big providers and the smaller providers. So the idea will be, you know, come January. We've talked about—we've launched the drug. We're talking about the drug. We're contracting for the drug. It will just be available come January. Okay. Now, you mentioned earlier the opportunity in non-dialysis with Vafseo. How big is that opportunity, and how are you planning to move forward? It's a huge opportunity. I mean, it's about patient number-wise, it's about the same size, about 500,000 stage four, stage five patients who have CKD non-dialysis. Only about 25% of those patients, even at the latest stage, are treated for anemia, and if they're not treated, they do horribly on dialysis. Their mortality rate is higher, not only when they start, but even a year later. So, you know, when I talk to physicians, they talk about where they want to use in dialysis, but no conversation ends without them saying, "But I really want to use it in CKD patients. Right. And then when you look at our pricing, you know, the $15,500 WAC, you think about non-dialysis, you're thinking about a much more traditional gross to net kind of discount, not those contracts with the dialysis providers. So the per patient cost will be significantly higher. So we're going back to engage with the FDA on that. We're gonna have to do a clinical study there. We're quite confident in that. And we expect to have feedback from the FDA before the end of this year on that path forward. And I think most people, you know, when we missed the primary endpoint in PROTECT, kind of took that out of their thinking about the opportunity for the product. And, you know, I think that'll dramatically change the dynamic. FDA recognizes that there's an unmet need here, so, you know, we expect that, you know, they'll work with us on a path forward. Right. All right, so we're running a little short, but I did want to ask one couple final quick questions. Early stage pipeline, and then where you are with your cash and runway. Yeah. So we're super excited about our early stage pipeline. I mean, obviously, there, there's an intense focus on the launch now, but, you know, our, our HIF pipeline, we have products, two products that are in preclinical development now. One, that's first indication could be AKI, acute kidney injury or, ARDS. Okay. Second one, which is a little bit behind, I'm super excited about, targeted for retinopathy of prematurity. So outside of the kidney focus, but, you know, clearly down that, that, HIF pathway. And, we look forward to talking more about those as, as they develop. Cash, we had $40 million in the bank at the end of last quarter. Remember, we have a $170 million revenue, from, Auryxia, so we've said that, that, that cash in the bank and our revenue stream, both from Auryxia and the launch of Vafseo, will last us at least, two years. So we feel we're, we're in a comfortable position from a cash perspective. Excellent. Great. Thank you so much, John. Appreciate it. Thanks, Ed. All right. Thanks for having us. All right.