Akebia Therapeutics, Inc. (AKBA) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to Akebia Therapeutics Corporate Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the conference over to your first speaker today to Mercedes Carrasco, Director of Corporate Communications. Please go ahead.

Thank you, and thank you for attending the Akebia conference call to discuss a recent regulatory update related to vadadustat. Please note that a press release was issued on Wednesday, March 30, detailing the regulatory update, and that release is available on the Investors section of our website. For your convenience, a replay of today's call will be available on our website shortly after we conclude. Joining me today for today's call is John Butler, Chief Executive Officer; Dave Spellman, Chief Financial Officer; Dell Faulkingham, Chief Commercial Officer; and Dr. Steven Burke, our Head of R&D and Chief Medical Officer, are available for questions at the end. Before we begin, 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 press release that we issued on March 30 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 of the original date of this call, and except as required by law, we do not undertake any obligation to update or revise any of these statements. With that, I'd like to introduce our CEO, John Butler.

Thanks, Mercedes, and thank you all for joining. As many of you likely know by now, Akebia received a complete response letter from the FDA to inform the company that it has completed its review of vadadustat, an oral hypoxia-inducible factor prolyl hydroxylase inhibitor, for the treatment of anemia associated with CKD for adult patients on dialysis and adult patients not on dialysis. Vadadustat has not been approved by the FDA for this indication. Before we go on, I want to express my extreme disappointment and frustration at this outcome. I'm disappointed for our team at Akebia, our collaboration partners and most importantly, for patients suffering from chronic kidney disease. Our team is deeply aware of the unmet needs of CKD patients with anemia, and we're disheartened that we cannot yet deliver a therapeutic that we believe could address those needs to patients in the U.S. Sadly, kidney disease patients continue to suffer from a lack of innovation in their care. The complete response letter outlined concerns that were discussed in our press release, which was issued earlier today. In the CRL, the FDA concluded that the data in the NDA do not support a favorable benefit-risk assessment of vadadustat for dialysis and nondialysis patients. The FDA expressed safety concerns noting failure to meet non-inferiority in MACE in the nondialysis patient population, the increased risk of thromboembolic events driven by vascular access thrombosis in dialysis patients and the risk of drug-induced liver injury. The CRL stated that Akebia could explore ways to potentially demonstrate a favorable benefit-risk assessment through new clinical trials. We'll discuss the details of the CRL with our collaboration partners and request a meeting with the FDA. At this time, it's too soon for us to outline next steps beyond noting that we believe it's critical that we engage in a discussion with the FDA. The notification of the CRL came as a surprise, especially with respect to the dialysis patient population. The dialysis data from our global Phase III clinical development program were clear and consistent. Those trials met both primary and secondary efficacy end points and the primary safety end point. Further, data was published in the New England Journal of Medicine and was presented at ASN in 2020 and 2021. In 2021, we presented a detailed poster on thromboembolic events across our Phase III program at ASN. That data showed that the rate of dialysis access thrombosis in the study across vadadustat and the comparator drug were the same. We've also extensively discussed, both publicly and with the FDA, the patients who had very elevated liver enzymes in our Phase IIb study back in 2014. We also reported to you when we announced our Phase III data that we had an expert panel perform a blinded analysis of LFT elevations in both PRO2TECT and INNO2VATE. In this analysis, there were no difference between vadadustat and the active comparator, darbepoetin alfa. With these data, we believe that any remaining concerns with respect to hepatotoxicity could have been managed through labeling. We believe there were compelling data supporting a positive benefit-risk profile for the use of vadadustat broadly in patients with CKD, including nondialysis patients, but we always remained cautious about receiving a broad label for vadadustat that would extend to nondialysis patients with anemia due to CKD. As for our company's path forward, we acknowledge that we are no longer in a position to have multiple commercial products in the near term. However, we're very proud that we're coming off of Auryxia's strongest net revenue quarter in Q4 and look forward to continued Auryxia growth. We will be making adjustments to our cost structure to reduce spend while still enabling us to invest in the future. We look forward to updating you on those changes. Finally, I'd be remiss if I didn't take the opportunity to thank the committed Akebia team, our collaboration partners, physicians, investigators, site coordinators and most importantly, the patients who participated in our clinical studies. As a company, our purpose is to better the lives of people impacted by kidney disease. All that we do is for them. And with that, we'll open it up to questions.

[Operator Instructions] I show our first question comes from the line of Chris Raymond from Piper Sandler.

And John, let me express my condolences here on the outcome here. I know you guys have put a lot of effort into this. I guess just a couple of things. John, you raised the -- 2 of the things that were most puzzling to us, the thrombosis risk and the liver tox language that the FDA had. And to your point, at ASN, you gave pretty compelling data indicating very similar risks in a real arguably big contrast to the other HIF that the FDA looked at. So I guess, did FDA not agree with that analysis? Or did they conduct their own analysis? Or was there some sort of sensitivity analysis that they looked at that might have differed from what you guys presented? And then also on that liver tox signal, I guess that's another sort of similar question. You guys painstakingly looked at that event, which I think you first disclosed in 2016, if memory serves. I guess, what was it about that analysis that the FDA took issue with? And -- or was there some other signal of liver tox besides that 1 patient?

Yes. No. Thanks, Chris. I appreciate it. So from the thrombosis question, as you know, there is 2 types of thromboembolic events to think about, right? There's very serious thromboembolic events like PEs and DVTs. And very clearly, there's no difference. And this was in the post year that we presented at ASN, I think you're referencing. The difference was that we had more patients in the vadadustat group, who had a vascular access thrombosis event. But when you look at the number of events, there was no difference. It was -- the rate of events was the same between the groups. And even if you look at the briefing book from roxadustat, FDA talked about simple percentage differences, which we saw, from an access perspective, is deceiving. You really need to look at the rate of the events, and that's why we were so confident that the rate of the events in thromboembolic events were the same, 6.6 per 100 patient years between vadadustat and darbepoetin. We believe that, that was the difference. Because remember, you saw a hazard ratio of 1.2 in the paper, but this is a time to first event analysis. So anyone in the DARBY group who had a first event, they were then censored for any other events. But of course, as you know, with dialysis access, they have frequent event rates. It's like 0.2 to 2 per year per patient. So it -- does that access stay open, can they continue to use it? So it's really the fact that patients are having multiple events that's more of a concern. And our perspective was, in this case, FDA looked at the number of patients. And I believe it was 21 more patients out of 3,800 in the study that had an event in the vadadustat group, but the number of events was virtually identical. So that's the -- from our perspective, it isn't a new analysis that FDA did. They simply prioritized a different way of looking at the data.

That's fair. Yes. And we also did a multiple event analysis, and they were identical, time to multiple events. So really no difference. And that's what really matters is events because if you have an event, it puts you at risk for fistula abandonment and then dialysis via catheters. That's what really matters about this.

Yes. So we are equally -- I don't want to say confused, but it is frustrating, obviously, that, that was one of the areas that was focused on. Because if you remember from roxadustat, there was a difference not only in the vascular access events, but also in severe events, which when you look at the hazard ratio and dialysis population for the severe events, it was something like 0.71 or something. So that was definitely something that confused us also and we look forward to talking to them about. And then the liver tox question as well is an important one. And we've talked for many years about the patients in 2014. And as we said, this was a serious patient who had significant elevations in LFTs and jaundice. And -- but she was never symptomatic, never hospitalized, and recovered. So we thought that was certainly mitigating. But we had significant screening in our Phase III study because we didn't recognize that this was something that the FDA would be interested in. And again, this was a huge program, almost 8,000 patients across the program, and having an outside expert hepatology panel review these on a blinded basis because these are patients who are on multiple drugs. So many, many patients have elevations in liver enzymes. But is it possibly or probably related? So when you look at attribution in a blinded fashion, you saw no difference at all. I think there, the FDA basically said, well, we know darbepoetin doesn't -- isn't associated with elevations in liver enzymes. So we won't look at this comparative data. We'll just look at the patients in VADA group who had elevations. And while no one had any elevation anywhere near as serious as that patient from 2014, as I said, there were patients who had elevations in LFTs, and they just looked at those vadadustat patients. Now we said there's just as many patients in the DARBY group, and your guidance says you look at comparative data. It seems they didn't choose to do that there. So those were -- that's why you probably sense the frustration in my voice as well. And we really did think that any of these issues -- either of these issues could certainly be handled with putting labeling in, letting physicians understand the data and make a choice with the patient, but that's not the way it was approached by FDA.

And just maybe 1 follow-up. I know you said it's too early to talk about next steps. But given the way you set this up, I guess, I have to ask, FDA does have an appeals process in place. Is that on the table? Or one would argue, are all options on the table here for you guys?

Oh, all options are definitely on the table. I mean, obviously, we've only had this for hours now, very, very late last night. So we need to first discuss this with our collaboration partners who've been great and then have a conversation with the FDA and kind of work through the process here. But there's certainly nothing that's off the table at this point, Chris.

I show our next question comes from the line of Mara Goldstein from Mizuho.

So I just wanted to ask just around -- maybe just for more for just a general knowledge perspective. As the FDA was going through the review, I mean, you said you were surprised at the outcome in the diabetes dependent population. Can you maybe just talk about the process that you went through with the FDA and when you had an idea that they were going to be quite resistant to an approval here? And the other thing is that the press release says path forward with trials. Is that indicated to mean multiple trials for the diabetic dialysis-dependent population? Or when you refer to trials, you mean for both nondialysis-dependent and dialysis-dependent?

I think you want to reference to -- you keep saying diabetic, but I think you mean...

Sorry. Sorry. It's a long day. I apologize to you guys as well.

I completely agree. So as we said before, kind of the play-by-play of the review kind of is we've never gone into that and we won't now. I mean as we've always said, I mean any time you have an application front of the agency, a CRL is always a possibility. But as we said that the -- when we look at the concerns that they expressed, particularly around the issues we've put in the press release, we believe that we addressed those, as I described in Chris' question, in the press release, but they could handle anything through labeling. So that's why it was a surprise when they made the decision to issue a CRL instead. And so the second part of the question around studies, we haven't had that conversation yet. And we want to sit down with our collaboration partner and talk about our strategy to go forward, really dig through all of the information that we have and how we want to approach this and then have that meeting with the FDA and then update you post that. These are significant issues that we thought we addressed. And the fact that FDA stayed kind of in this -- with this decision mode, we want to be clear that it's challenging path forward with them, though we believe we're -- the way we've presented the data is the way that they should review it. So we're determined, but we're also pragmatic. And the idea of clinical trials, we want to understand what that is, what we would have to do and whether that's something we want to engage in or not. And that's all to come.

Okay. And if I could just ask a clarification also in the press release, and you mentioned it as well, the agency expressed safety concerns noting failure to meet non-inferiority, right, in MACE in the nondialysis patient population, was that element also extrapolated to the dialysis-dependent population?

No, I would not say that was extrapolated. That's one that was not -- shouldn't be a surprise. We really need to state the point there. We always said that was a high risk, they called it out specifically in the CRL, which is not surprising. And so we felt, for completeness, we should include that.

I show our next question comes from the line of Eric Joseph from JPMorgan.

I also want to just impart my condolences on the CRL here. I guess I'm curious to know sort of what your sense is of the MAA review process in Europe? I know that's being led by Otsuka, but any reason to think that the decision here might impact prospects for approval in Europe?

Eric, thanks for the question. It's an important one. I think as you know, different regulatory authorities look at products very differently, have a different approach. And I think we have a pretty good analog in the roxadustat and received the CRL for data that's well known to everyone. And yet, they were approved in Europe, can't remember exactly when that was, but for both dialysis and nondialysis patients. So that's an active review. As you said, Otsuka is leading that for us, and we're working very closely on that review. But we expect a very different outcome there, given the very different approach EMA seems to take vis-a-vis FDA.

I show our next question comes from the line of Serge Belanger from Needham & Company.

Just a couple. First one, did the agency consider separate approvals for both the dialysis and nondialysis setting? Or was it just 1 broad approval that was considered? And secondly, at least based on the press release, it doesn't appear to be -- the agency doesn't appear to have any concerns with the product's efficacy. Most of the issues were focused on safety. In hindsight, would you have benefited from an FDA Adcom to further clarify these issues? And were you surprised it wasn't convened?

Thanks, Serge. So the first question on the dialysis versus nondialysis. As you saw in the press release in my remarks, I mean there were safety concerns expressed by the agency in both dialysis, nondialysis, the thromboembolic event dialysis access was in the dialysis population. The DILI questions were obviously across the population. So it was 1 indication, 1 NDA for treating anemia in 2 patient populations. I don't know what the agency considered, obviously, we just have the letter. But we don't think the difference -- there would have been any difference if we asked for just dialysis versus nondialysis because they were assessing the entire package of data. So I still think the way we approached it was the right way. Your question about an Adcom is an interesting one. Obviously, I do think it's always good when you have the opportunity to present your data, your argument to an expert panel. But the FDA had always indicated that it wouldn't be necessary to have an Adcom. So that's -- at this point, I suppose that's just conjecture whether that would have benefited us. But certainly, as I presented the thromboembolic event data and the liver data, a panel of expert nephrologists, cardiologists, I think it might have been helpful to have them weigh in on that. But again, Monday morning quarterbacking.

I show our next question comes from the line of Ed Arce from H.C. Wainwright.

Let me add my condolences to the whole team. I know there's a lot of work on this, and I'm sure more to come as you work through the process here. I wanted to focus on the vascular access events. And you noted on this call as well as on the 10-K that the hazard ratio of 1.20 refers to the time to first event analysis. Correct me if I'm wrong, but there isn't really, perhaps in the guidance or any other way that -- any assurance that the FDA, the agency would particularly look at 1 analysis versus another versus, I think you referred to just simply the number of events overall. And a related question, just remind us what was the hazard ratio when you looked at it in that way?

So your -- Ed, you have a very perceptive question. And the fact -- from our perspective, reading the briefing book for roxadustat and seeing that the FDA talked about how looking at a simple difference in percentage difference in patient numbers could be deceiving and that you have to look at a rate for something like the rate of dialysis access thrombosis, that was very reassuring to us that we were looking at it the right way, and that seeing no difference that we would have a clear path forward there. But with a different review area of a different -- potentially a different look, I suppose it's difficult when there isn't that consistency of approach. But -- so you sense my frustration based on that. And your second question was about asking a hazard ratio on -- I can't -- which analysis that was.

I think you referred to it earlier as sort of simply a number of...

If you look at multiple events.

Hazard ratio is essentially 1. This is Steven Burke.

Did you get that, Ed?

Yes. Yes, I got that. So -- and then just a follow-up. I don't have it in front of me, but I'm sure the whole team has gone over this many, many times. The guidance that the FDA has, in particular reference to the kinds of data that they were looking at in your application, really, there isn't anything in particular that is explicitly stated in there other than perhaps what you pointed out before, which is that they, in general, do look at data in a comparative sense, in other words, versus the comparator. Is that fair?

Yes. We think that's -- I mean, I think their own guidance documents suggest that that's how data should be reviewed.

Absolutely. Yes. They stress that having a comparative is critical in looking at liver events. And as John mentioned earlier, they're actually -- they didn't say this, but there's actually more liver events than the ESA control group than there is in the vadadustat group. And when you look at the ones that are possibly probably related, again, there's more events in the control group than in the vadadustat group.

This is why you run a controlled trial and an active controlled trial, right? I mean it's to suggest that -- well, we know this drug doesn't have event, so we're not going to compare it. We're being held to the 1 patient from 2014. And if that was always going to be a roadblock, well, and I guess it would have been nice to know that in 2014.

Yes. I guess as a follow-up, John, I'm curious, as you think about the aspect of the liver tox in general, which was part of the CRL, what leads you to believe that the overall liver tox issue is simply and solely related to that patient in 2014?

Well, again, it is -- that patient was central to the reason we did more monitoring in the study, the reason we did the review, the blinded review. So as I mentioned, you had other patients who had elevated LFTs, no one who had the level of jaundice like that, that patient had. But given these patients are on 8, 9 drugs on average, they're going to have elevation in liver enzymes. And -- but that's why you do a comparison to your active control, which has the benefit of being a drug that doesn't -- isn't associated with elevated liver enzymes. And so showing the difference in a blinded fashion should give comfort that even though you're seeing elevations in liver enzymes, it's something you see in a CKD dialysis or non-dialysis population. So the reason for their concern isn't solely that patient. They looked at other patients and saw elevations in liver enzymes, but they discounted what they were seeing in the active control group and only focused on those patients in the vadadustat group and said, there are more patients who have had elevated liver enzymes. And we basically pointed out that you have the same number or more, as Steve pointed out, in the control group, but that wasn't the way they chose to look at the data. So it all stems from that patient in 2014, there's no question about it. And as I said, if that was going to have that kind of impact, after that 2014 patient, they allowed us to start a 7,500-patient trial. When you add in the patients in Japan who have been exposed to the drug in a commercial setting and haven't seen elevations in liver enzymes, we have a pretty good history now that we think would allow the product. And certainly, when you look at other products that have been approved have hepatic profiles that look significantly worse, if you will, than what we've seen here. And that's why we felt that we can label around this, we can inform physicians about this patient, create a warning, et cetera, and let physicians to make a choice, but that's not how it was approached. I think -- I mean, I think it goes to benefit-risk, and it also could speak to that -- the FDA not seeing the degree of benefit for these patients that we see and that physicians will see. And that's disappointing as well.

Right, right. Yes, there are other options they could have pursued other than straight CRL.

Correct. Yes. Correct. And after, we're going to have a discussion on all of those.

[Operator Instructions] I show our next question comes from the line of Bert Hazlett from BTIG.

Just I guess, 1 or 2 for me. Thanks for the additional clarity on the LFT elevations. But just with regard to the comment that there are -- you could explore ways to potentially demonstrate a favorable risk-benefit with new clinical trials. Was that, John -- or anyone, was that in relation to any specific patient group, the dialysis patients, the nondialysis patients? Was that a general comment? Was that for the DILI, the liver injury issue? Or what was that in the context toward?

Yes. Well, I think that was -- and Steve, you can jump in here, too. But I mean it was offering up the opportunity that we could explore the benefit in particular patient populations to show a positive benefit-risk profile, right? I mean it's -- so it could be the idea of exploring the subpopulation. I mean we have to have a conversation with FDA to understand this, but this is -- so we're over-interpreting what we read in the letter, I think. But there are opportunities that exist there. Again, I want to point out, I mean, there may be opportunities, and we may feel that there's a path forward, but we have to decide whether another clinical trial is something we want to embark on. But I don't know, Steve, if you have anything to add to that.

No, I agree. We could explore any number of different trials or with the existing trials that we are running today and see if that provides sufficient information to shore up FDA's impression of our benefit-risk equation. But until we speak with them, it's hard to speculate what they're actually thinking and we could propose.

Exactly.

I mean as you consider total patient exposures for liver injury, I mean you've got a ton with the numbers of patients that you've -- that are experienced data. So I mean, it's just -- it's interesting commentary that they didn't really assess the competitor in the context of vadadustat, it's kind of astonishing actually.

Yes. It's -- we agree.

I agree with everything you said there, Bert, I don't have anything to add. You're spot on.

Yes. I get -- well, so again, the specific question, I guess, were they offering clinical trials with regard to the liver issue, were they argue -- were they offering with regard to the dialysis patients, were they offering it with regard to the potential thrombosis risk? Can you tell that and talk about at this point?

Yes. It wasn't really -- my interpretation is it wasn't specific to a particular -- it wasn't that specific, right? So I think that's why to really understand -- have that conversation with them and understand what would be necessary in each of these areas to demonstrate what they would need to approve the drug. And it's obviously very frustrating when we think about the thromboembolic events and liver when we feel like we've demonstrated that we have a data that we think demonstrates the safety of the product. So we have to sit in front of them and understand if there's something specific that they're thinking and -- but I don't think they were -- they were definitely not that specific in the letter.

I show no further questions in the queue at this time. I'd like to turn the call over to Mr. John Butler, CEO, for closing remarks.

Thanks so much, operator. Thank you all for joining us late this evening. Obviously, this is a disappointing day for us and I think particularly for patients. But we look forward to coming back to you to further discuss if there's a path forward here and update you on our regulatory conversations, but importantly update you on how we're thinking about the company moving forward as well. And we're pleased that we have a product that is growing, generating revenue. And now it's our job to look at our spending and think about the future of the company and have those come together to build the future for Akebia. So we look forward to updating you on that as well. Thanks, everyone.

This concludes today's conference call. Thank you for participating. You may now disconnect.