Hi, good afternoon, everyone. My name is Edward Nash, Senior Biotechnology Analyst here at Canaccord Genuity in Equity Research. I have the pleasure of being with me today, Akebia Therapeutics. From Akebia, we have John Butler, who is the President and Chief Executive Officer. John, thank you so much for joining us. Thanks for the invitation. We do have Erik Ostrowski, who's the Chief Financial Officer out in the audience. Say hi to Erik. We'll call on him if needed. That's right. That's right. I appreciate you guys being here. You currently have two approved products that are on the market, but all eyes are on Vafseo, which is an oral HIF-PHI for the treatment of anemia due to CKD in patients on dialysis. Could you talk a little bit about how the launch has gone, how what you envisioned for the commercial launch, how that was going to look? Has it really kind of panned out to what you think it was going to look like, and any changes you think you might need to be making? Sure. No, thanks for the question. Yes, Vafseo is front and center. You're right. All eyes are on that. We're actually quite happy with how the launch is going. You know, we're only two quarters in. You never declare victory two quarters in, but, you know, we're really pleased. You know, we had $12 million of revenue in the first quarter, $13.3 million in the second. Now, the first quarter had about $8 million of demand, $12 million of demand in the second quarter. We saw 55% growth, all in, from quarter- to- quarter. Importantly, when you think about this, this product is for anemia of chronic kidney disease for dialysis patients. The interesting thing about launching in the dialysis market is you don't just have to convince the physicians to write the product. You also have to get access from the dialysis providers. Now, there's 550,000 dialysis patients in the U.S. Half a million of them are on an ESA, so have a treatment for anemia. In the first two quarters, with those revenue numbers that we talked about, we really only had prescribing access to about 40,000 of those dialysis patients. The third largest dialysis provider is U.S. Renal. They're about 36,000 patients, and then a number of the smaller ones. That was the group of patients where physicians could write the product and get it. From that perspective, we were incredibly pleased. Now, we need to expand that pool, and we're very actively doing that. We can talk more about that, I think, as we go here. We expect that the next two mid-sized dialysis providers, IRC and DCI, will have prescribing access by the end of the quarter. That adds another 30,000 patients. There are two large providers, Fresenius and DaVita. Each are about 200,000 patients. One, DaVita, is starting a pilot just in the next week to begin to allow access. 100 sites will be able to use the product, and then by November, when the pilot's done, we'll be up to 275,000 patients who have access. We have the real opportunity for a significant step up in the growth from where we are now. Really happy with where we are. Expect to be much, much happier by the end of the year. Got it. If I'm not mistaken, anemia management in dialysis patients is really the biggest piece of the anemia market, which you've alluded to. Could you maybe talk just a bit about the broader market opportunity for patients on dialysis? Yeah, so you're absolutely right. You know, the anemia of CKD market is dominant in the dialysis population. As I said, 500,000 out of the 550,000 are on an USA. I do want to make sure we talk also about the non-dialysis market opportunity. It is a much smaller dollar opportunity today with the ESAs, not because the patients aren't there. They're not getting treated. You know, the opportunity there, we think, from a market opportunity and a patient impact opportunity is even broader than what you have in dialysis. The dialysis market is clearly one that, you know, we think, again, our goal is to make Vafseo standard of care. You know, we'll talk about, you know, here's how physicians are thinking about it, and here's how we expect the progression of adoption to go. Our goal and, you know, our long-term strategy is all around being standard of care. You know, we've got this interesting Tdap period, this unique reimbursement period that we can talk about that creates an environment for the dialysis providers to try the product. We've got to pull that through with the clinical benefits of the product. We're seeing that clearly. When you talk to physicians, Vafseo is a once-a-day oral product versus an injectable. Where physicians, the easiest, lowest hanging fruit for them is the home dialysis population. That's about 15% of the dialysis population. You know, they have to come into the center more than once a month frequently to get a shot of ESA. They don't want to come in more than once a month. They'd much rather take a pill at home. Physicians clearly identified that population. That's mostly around convenience. The other area where physicians are really focused on using the product is in patients who are on higher doses of ESA. As you increase your dose of ESA, you increase MACE risk. We don't see that with Vafseo in the INNOVATE study that's been published. Regardless of the dose of Vafseo, the MACE rate was the same. As physicians think about where do I want to use this product first, that's a clear area, right? I mean, even if they're well controlled, they're using a lot of the product. It's more expensive. You know, I'd love to get that off my books. Also, this is a place where patients are at risk. With Vafseo, we didn't see that. Therefore, it could be a really interesting area to start. Those are the areas where we think physicians will start to use the product. Our goal, of course, is to go much broader than that. Yep, that makes sense. As we've talked about, you just launched in January, and so it's still very early days, but you're having reported two key results. Are there any specific trends that you're currently observing with regards to launch, such as metrics in dosing or titrations, anything of that nature? Yeah, I mean, certainly mostly things that we had expected, right? With U.S. Renal, where we're getting most of our revenue to date, what I just said about where physicians are thinking about using it hasn't really applied. They've been much more broad in where physicians have written for the product. The clinical leadership there is incredibly supportive of the difference that Vafseo can make for their patients. They really believe in the pathway, right? All of our positioning of the product is around this differentiated mechanism of action. They believe in it. We're seeing much broader use than just in the home or just in the high dose ESA patients. As we talk to physicians, that's still where they identify. As we grow, we think that's what's going to happen. Now, the other trend we've clearly seen is that the starting dose is 300 milligrams. In our clinical trials, it's a titratable drug, and you're titrating to a hemoglobin response. The average dose in our trials, and I think what we're seeing in the field, is about 430 milligrams. It's a 300 milligram tablet. You get titrated up to 450 or 600. On average, we're looking at somewhere around 430 milligrams, which, as you can see, from 300- 450, that contributed a significant amount to the growth in volume that we saw from Q1- Q2. We definitely continue to expect that to grow. As you add new patients, that average dose may drop because we're adding new patients as we get to that bigger pool of patients that we can treat. As you have more and more patients on, that average dose should be near what we saw in the clinical trials or maybe a little bit higher. Usually, in real life, you see doses that are a little bit higher than a clinical trial. Can you talk a little bit about the safety profile that you've seen to date for the drug, and just kind of how that compares to ESA usage? Yeah. The INOVAIT trial, the phase three trial that we did that supported the approval of the product, was a non-inferiority trial. You know, basically, the bar that we had was that we had to prove, and it was a MACE endpoint, major adverse cardiovascular event. We clearly demonstrated that there was no increased MACE risk with Vafseo. Hazard ratio was 0.91, upper bound at 1.11, and we were trying to rule out 1.25. It was clearly a strong result. You really start coming down to the differentiation around safety, which comes down to the things you saw in the trial. Physicians worry about having excursions of hemoglobin. Their target level is 10- 11, is the target hemoglobin level. Frequently, with ESAs, you see those levels shoot beyond 11 or beyond 12, and that's where physicians start to get concerned. One of the clear data points was that we had many fewer excursions, is what they call that, above the target hemoglobin range. That matters. What that translated to also isn't really a safety point. This is more of a convenience point for physicians, but it's a message that really is resonating. With ESAs, to avoid those excursions, they're constantly tweaking the dose of ESAs to keep people within the range. What we saw in our phase three trial was that you had half the number of dose titrations with Vafseo that you had with an ESA. In other words, because we have this more physiologic, more gradual increase in hemoglobin, you still have to titrate patients to get them in the range, but then they stay there. It's amazing the impact of a message that speaks to a busy nephrologist that they don't have to spend a lot of time titrating patients. Remember, it's a convenience thing. Why are they doing that titration? Because they're concerned about safety. If you are seeing fewer excursions with Vafseo, does that actually translate into the patient perhaps not needing to come in as often? Are they still coming in because that's typical for these patients for their normal lab work? Yeah, so remember, you have two different sets of patients. You have patients who are in center, which are 80+%, and then the home patient. Home patients, the main reason they have to come in, they all have to come in once a month for their regular kind of checkup, if you will. I was speaking to a nephrologist who has a very large home patient population on Long Island. His group has, on average, the patients come in 2.3x a month, which, and he goes, none of them want to come in more than once. That's the only reason they're coming in, because their hemoglobin hasn't performed, you know, hasn't gone up the way they expect, and they need to get another shot. They don't come in. They call them and say, come in, you need another, you know, dose of Mircera, whatever the drug is, and they just don't come in. Their compliance is poor. They look at giving them an oral drug to take at home once a day, even if they don't take every dose. We know patients don't take every dose. They're getting better compliance than going a whole two, three, four weeks without that next shot of ESA. That is an incredibly important thing for physicians in that home population. The patients who come into the dialysis center, it's easier to monitor them. Now, our label has this once-a-day dosing. We've also done studies to show that you can actually deliver the drug three times a week in the dialysis center. Did a study called FoCUS that showed it was very effective dosing it that way. It's not in our label yet. We plan on talking to the FDA about that after we've gone through the conversations around the non-dialysis population. We have studies to support it. We have a very large post-marketing study called VOICE that's going on now in collaboration with U.S. Renal that's doing three times weekly dosing. We have another one called VOCAL that we just announced that's a 350-patient trial that DaVita is running. We're the sponsor, but DaVita is running the trial that's also looking at three times weekly dosing. I think ultimately, we're going to get to a place where the patients who are in center, they're going to give them the drug at each dialysis session and have them take it there. Takes compliance out of the equation completely, that observed dosing, and maybe the better way to deliver the drug to the patient. Were the excursions that were seen, was there anything specifically different about those patients where you saw it, or was it just across the board? This is across the board. You really don't, you know, this is the idea that you give someone, you know, there's Aranesp or Mircera. These are monthly drugs, right? You give them the shot, and you'll see their hemoglobin increase significantly. It's a, you know, since it's once a month, then you'll wait and see that come down again. You create this hemoglobin instability, which is not what physicians really want, but they want to try to get that monthly lab so that it stays within that range. It's very hard to do, which is why they're always tweaking. Yep. Right, it's really just seen broadly with patients. On the non-dialysis side of things, that patient opportunity, can you talk about, first of all, you'd mentioned that these patients tend to just not be treated. First of all, why is that the case? What kind of studies that you've already alluded to, to a degree, is that you are planned in that patient population? Yeah, this is a really, really important opportunity for us and for patients. I mean, you talk to physicians who are excited about the product and want to use it in dialysis. Every single one of those physicians talks about how they want to use the drug in their CKD population. It's a once-a-day oral drug, you know, versus bringing someone into a hematology infusion center to give them an ESA or asking them to infuse it at home, which they simply won't do, and they don't want to do buy and bill in their offices anymore. This is an important opportunity. That hemoglobin instability is one of the reasons they don't treat, right? You give the way the ESA label is constructed, it's basically a rescue therapy. You have to wait till the hemoglobin drops below 10, which will be the case with us. Then you give them the ESA, the hemoglobin goes up. They come back in a month. If their hemoglobin is above 10, they can't get paid for another shot. They don't. They create this hemoglobin instability. If they first do no harm, I'm going to wait until the hemoglobin is so low that I have to treat them. We look at there's an outside research that was done. There was a chart review study that looked at stage five. Stage five CKD patients have GFRs below 15. I mean, these people are really moving towards dialysis. When our non-dialysis study, which didn't meet its primary endpoint, read out in 2020, half of those patients were being treated. In the study from this past few months, it was just over 20% of those patients were being treated. As a matter of fact, more patients are getting transfusions than are getting ESAs, different studies. It's a really fascinating crossing of the lines there, which, in a CKD patient, as soon as you get one blood transfusion, you have a lower probability of getting a transplant because of the antibodies you could create, right? This is something that patients want to stay away from. This is something, a population that's really important to get to, a product like Vafseo to be available. Now, as I mentioned, we did a study in the non-dialysis population called PROTECT, and we missed the primary endpoint. We had a, it was a global study where we stratified by the U.S. vs ex-U.S. The U.S. was a very clean study. Everyone was treated the same way, and there was no increased MACE risk. The MACE risk really came in the ex-U.S. population for a number of reasons. FDA agreed that's an important finding, but we missed the overall number, right? The overall endpoint. We have to do another study, and we recognize that. It is an incredibly important business opportunity because in dialysis, while we have this great opportunity during Tdap, post-Tdap, when you enter the bundle, there's still a billion-dollar market in the U.S., but we have to drop our price significantly. When we did our pricing at the beginning of the year, we really priced for the non-dialysis market as well. If you think about it from a patient perspective, it's about the same size, about a half a million, 550,000 patients. Where the average price per patient post-Tdap is going to be $2,500 in the U.S., even taking a normal gross to net, even taking a WACC for compliance, you're in the $10,000- $12,000 per patient per year, four to five times the size of the dialysis market. We think it's an incredibly important opportunity. It's needed by the patients, and it's a great opportunity for us. We're engaged with the FDA on the design of the study. We've requested a Type C meeting. We've had a number of interactions with them this year. We've gotten to the point where we've decided on an active control, which will make pooling with our U.S. PROTECT data very easy. It's really just about getting enrollment done quickly. We think it'll be about a 1,500-patient study, so substantive in size. We're planning and working towards getting it started before the end of the year, so we can try to get it enrolled as quickly as we can. Got it. You've mentioned now a few times, Tdap. Can you just maybe explain the importance of that, especially as it relates to Vafseo in these first, you know, couple of years? Yeah, yeah, no, it's incredibly important, right? Tdap is this transitional add-on payment adjustment. You have to remember, with dialysis, about 80% of dialysis patients are Medicare patients, because even if you're not over 65, if you have dialysis, you qualify for Medicare. Tdap was created by CMS because they recognize in a bundled environment, it's very hard to add a new therapy. You know, how do you add a new therapy? They pay dialysis providers $274 a dialysis session to provide four hours of intense care, plus ESA and IV iron and everything else. CMS recognized that's difficult, and they wanted the opportunity for innovative products to be used. Tdap pays for an innovative product outside of the bundle on an ASP basis for two years. Vafseo, and that's why we didn't launch until January, even though we had approval last March. We had to go through the Tdap process and got that designation as of January. That basically pays for Vafseo on an ASP basis outside of the bundle through 2025 and 2026. If you think it from a dialysis provider's perspective, there's work to put a new product in. They know how to use ESAs. It is a new medicine. It's going to be more complex. They're getting paid to do that. They're getting paid for that because they're getting reimbursed today at WACC, which is about $98 per dialysis session. They're not having to pay for ESAs, which is about on average $16 per dialysis session. They're still getting that full bundle payment. They're avoiding that cost. In our contracts with them, no one pays $98. We have an off-invoice discount and a rebate based on their volume they use. There's a significant economic benefit for them using Vafseo. The physicians still have to believe there's a clinical reason to use the product. What you want is a situation where clinicians want to use the product and the business side of dialysis says, we're very happy for you to use that product. That's where Tdap leaves us. Those dialysis providers who are using the product today are getting a significant financial benefit. They're doing more work to earn that. Their patients are able to access the product as well. The only reason they're willing to do that is if they know that post-Tdap, their price is going to be what they're paying for ESAs today because they won't take on that added cost, right? When we did contracts with everyone, and we have contracts with all the providers, part of that was guaranteeing them that they would pay their ESA price in a post-Tdap world. We're very fortunate vs other potential or past Tdap drugs that so many patients are treated for anemia, and there are significant dollars in that bundle already. It creates that, as I said, $16 a dialysis session is a billion-dollar market. That negotiation happens between you and the center with regards to, look, you know, we understand this is the price during the Tdap period. Once that's up, we will stick, that's between you and the center. That's correct. Okay. It doesn't really technically become part of a bundle, if you will. Part of the bundle, does it after the. After Tdap, it becomes part of the bundle. It does become. Yeah. There's no incremental payment. I mean, there's an incremental payment, too much detail to get into, but it doesn't help us. It is part of the bundle at that point after the two years. They know they need to treat patients for anemia. I mean, there's a quality measure that they have to perform, and they don't want to pay a dollar more if they have an ESA. Now, we're doing all these other studies to demonstrate the clinical differentiation for the product, and even though we know we're going to have to take that lower price, we want to make that up in volume. Volume, I see. see. Yeah. In driving more patients appropriately onto the product and taking, you know, a very significant share of that $1 billion. I mean, our goal is and has been and will be to make Vafseo standard of care for all CKD patients, both dialysis and non-dialysis. Understood. You also have Auryxia, which is your phosphate binder. That's going to go off of exclusivity very soon, right? It actually went off exclusivity on March 20, 2024. Okay, how should we be thinking about that overall as it fits in with the. Auryxia is the gift that keeps on giving. We're really pleased with it. It, as you said, lost exclusivity on March 20. Interestingly, the phosphate binders were added to the dialysis bundle also in January of this year, which means they have their own Tdap, which actually has helped Auryxia. We had an expectation that there would be generic approvals at the end of March. There is an authorized generic that, you know, is a contract that we have. We know exactly how much that provider gets, and it's not enough to provide the market. We're in August, whatever today is, 12th or 13th, and no generic has been approved. You know, we had $47 million in revenue last quarter for Auryxia. We know that ultimately there will be generic approval, and then we expect, you know, you have that 180 days of one, and you know, you start to ramp. We are very conservative when we think about our, you know, cash position, et cetera, in the future about what Auryxia will bring. You know, every day that no generic is approved is a positive day, certainly from a cash flow perspective. We're not putting any sales and marketing dollars against Auryxia. It is very much, you know, contributing positively to the bottom line. How many filers have there been to date? Six. Six. Okay. Six filers, but no approvals since the end of March. We don't know why. Yeah. There's a little. A gift horse in the mouth. That's exactly the way we feel about it. Look, it's not the reason to own Akebia stuff. I mean, that is going to, you know, you got to believe in Vafseo, which we do. I know Erik is very happy to put that cash on the balance sheet every day. Can you maybe just talk about some of the highlights we should be looking for over the next, say, 6- 12 months? Yeah. I think that people are really hyper-focused, as appropriately, as are we, on the launch, right? They'll be looking at our quarterly revenue. Unfortunately, people can't follow the prescriptions on an ongoing basis because this is bought by the dialysis provider. We try to provide as much, you know, metrics as necessary for folks to really understand that. I think as you get to kind of early November and for our next quarterly earnings, people are going to look for that continued growth. Before that, as we have other meetings and the like, hearing from us that we're making those strides that we said we would around IRC, DCI, the DaVita pilot, anything we may be able to get with Fresenius, all of those things continue to add the patients who can potentially access the product through physician prescribing. The other piece is the NDD opportunity and getting that trial started. More importantly, we've requested a Type C meeting. We don't have a date for that yet. We expect that before the end of the year, we'll be able to report back on that meeting with the FDA. We're working at risk to have the study start by the end of the year. If they make changes, that might leak into next. I always say that the last patient in is more important than the first patient in. Having alignment with the FDA makes that last patient in easier. I think people will be very focused on that. I think when you look at the stock today, people don't really give us a lot of credit for that NDD market yet. I think with an alignment there and a clear path, people are going to really start to think about that opportunity. Yeah, I think it's really also just being in this Tdap period now too as well. You know, the reimbursement sometimes in dialysis can seem really complicated. It really isn't at the end of the day, right? You really kind of. Oh, it really is. It really is. It really is. When you understand it. You think of it as you've got a good incentive for two years, right? It just becomes part of the bundle. That's exactly right. That's what CMS wanted with this, right? Where should the product be used? It gives us the opportunity to get really significant penetration over the next two years. Again, we're not in it as a Tdap play, right? We're in it for the long term. Exactly. That's why we're doing VOICE, we're doing VOCAL, we're doing those things to continue to give us the opportunity to grow the product and become standard of care, and then bring it into the non-dialysis market where the opportunity is even greater. Yeah. Fantastic. Thank you so much for joining. I really appreciate it. Thank you so much for the invitation.