Akebia Therapeutics Inc (NASDAQ:AKBA) has surrendered 50% of U.S. commercialization rights to its oral anemia drug candidate vadadustat to Otsuka Pharmaceutical, a Japanese company. As such, Akebia is expecting $265 million in funding from Otsuka in exchange for the rights. Of the pledged funding amount, $125 million is being paid upfront and $35 million will be released in 1Q17. The remaining $105 million will be released later.
The deal with Otsuka also makes Akebia eligible for milestone payments of up to $765 million. Though Akebia said the milestone payments are related to development and commercialization of vadadustat, it didn’t elaborate what will trigger them.
“This collaboration achieves our goal of funding our global PRO2TECT and INNO2VATE Phase 3 studies for vadadustat while retaining significant long-term value for Akebia,” said Akebia CEO John P. Butler.
Funding Phase 3 trials
The investment from Otsuka will go into funding two Phase 3 studies of vadadustat. The first Phase 3 study of vadadustat began enrolling non-dialysis kidney disease patients in January and the program is expected to have reached full enrollment by the end of 2017. The second Phase 3 study is taking in dialysis patients and began enrollment in August and the target is to complete the enrollment by 1H18.
Akebia’s vadadustat is aimed at chronic kidney disease (CKD) patients. It works by stimulating the production of red blood cells and hemoglobin. With vadadustat, Akebia is hoping to replace Amgen, Inc. (NASDAQ:AMGN) Epogen in anemia treatment market. Epogen is an injectable drug, while vadadustat is an oral pill.
Akebia was looking for a European partner for vadadustat development when Otsuka showed up with its offer. The company continues to look for European deal for the drug. Akebia earlier sold Asian rights to vadadustat to Mitsubishi Tanabe Pharma, another Japanese company.
About $3.5 billion is spent annually on injectable anemia treatment in the U.S.
Competition for market share
But Akebia faces competition from FibroGen Inc (NASDAQ:FGEN) for anemia pills market. FibroGen is developing a rival drug called roxadustat with the same mechanism as vadadustat. Unlike Akebia, FibroGen has fully enrolled patients for its Phase 3 studies of roxadustat with results now expected in 2018. AstraZeneca plc (ADR) (NYSE:AZN) and Astellas Pharma NPV (OTCMKTS:ALPMF) are backing FibroGen’s roxadustat.
Akebia stock rose 19.4% to $9.97 in the last session, but the stock is down more than 22% since the beginning of the year.