SanaCurrents on the FDA’s lifejacket to Akebia’s (AKBA) anemia drug for dialysis patients

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Akebia Therapeutics, Inc. (NASDAQ:AKBA) Probability Sentiment

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SUMMARY

The FDA informed Akebia Therapeutics, Inc. (NASDAQ:AKBA) on February 21, 2023, the deciding authority for the company’s appeal to a complete response letter (CRL) regarding vadadustat would be Peter Stein, director of the Office of New Drugs (OND) at the Center for Drug Evaluation and Research (CDER). The March 2022 CRL was issued regarding Akebia’s request for vadadustat to be indicated as a treatment of anemia due to chronic kidney disease (CKD).

The unusual FDA move to name an individual (Stein) as the deciding authority appears to be the result of understaffing at the agency. Significantly, on December 16, 2022, Stein held a conversation with Ardelyx, Inc. (NASDAQ:ARDX) regarding a CRL to the company’s drug XPHOZAH (tenapanor). Both vadadustat and tenapanor are designed to be administered to dialysis patients. After Ardelyx reported its conversation with Stein, the FDA granted Ardelyx’s appeal to the CRL on December 29. The stock of Ardelyx has climbed 33% since the December 16 announcement. SanaCurrents assigns a speculative probability the FDA will sign off on Akebia’s appeal to the vadadustat CRL.

In January 2022, SanaCurrents assigned a speculative probability to the FDA decision regarding Akebia’s application for vadadustat as an anemia treatment for CKD. Even though the FDA subsequently issued the CRL now in dispute resolution, Akebia’s stock climbed 31.4% in nine weeks following the SanaCurrents report. SanaCurrents closed the catalyst prior to the FDA decision.

Vadadustat and GlaxoSmithKline’s plc’s (NYSE/LSE:GSK) daprodustat belong to a class of oral drugs known as HIF-PH inhibitors, which work to promote red blood cell production in anemia patients. In CKD patients with anemia, HIF-PH inhibitors offer an oral alternative to injections of erythropoiesis-stimulating agents (ESAs) such as Aranesp and Epogen. The FDA approved daprodustat on February 1, 2023, as the first oral treatment for anemia caused by CKD for adults who have been receiving dialysis for at least four months. The agency did not approve daprodustat to treat non-dialysis patients.

Akebia has contended, and the company’s phase III data appear to demonstrate, vadadustat is as effective as daprodustat to treat anemia in dialysis patients. Curiously, the announcement Stein would become the deciding authority for the vadadustat appeal came just three weeks after the approval of daprodustat. Akebia said the company’s appeal to the CRL originally was assigned to a senior advisor within OND. 

Akebia’s revised application, following the CRL, appears to focus on the strength of vadadustat in treating anemia due to chronic kidney disease (CKD) in patients on dialysis therapy. In the March 2022 CRL, Akebia said the FDA  concluded the data in the new drug application (NDA) do not support a favorable benefit-risk assessment of vadadustat for dialysis and non-dialysis patients. Akebia originally filed, and likely still would prefer, approval for vadadustat in dialysis and non-dialysis patients. However, given the CRL and vadadustat’s weaker efficacy in the non-dialysis population, Akebia may be content with approval only in dialysis patients.

In November 2022 Akebia submitted the formal Dispute Resolution Request to the CRL with a focus on the favorable balance of the benefits and risks of vadadustat to treat anemia due to CKD in adult patients on dialysis.

THE EDGE

The global ESA market in 2020 was $9.24 billion. Treating anemia with ESAs is expensive, due to the cost of administering the drugs in the clinic. Research conducted by Akebia and Otsuka Pharmaceutical estimates $2.5 billion in annual excess costs associated with ESA administration in 2019. Overall, 94.4%, or $2.4 billion, of these costs were incurred from in-clinic ESA administration to dialysis patients. As both vadadustat and daprodustat are delivered orally, neither require injections in a dialysis clinic.

The FDA’s decision to approve daprodustat only in the dialysis population signals the agency’s not-so-veiled inclination to reduce the excess cost of anemia treatment in CKD. Regarding vadadustat, the FDA likely is also aware Akebia partners with Vifor’s Fresenius Medical Care North America. The Fresenius North American unit serves approximately 345,000 patients on dialysis, many of whom are on Medicare. The annual cost to treat Medicare patients with CKD is approximately $24,000 compared to about $11,000 for those without CKD.

Fresenius Medical Care North America would be able to deliver vadadustat to CKD patients with anemia within weeks if the Akebia drug is approved, significantly reducing Medicare’s costs to administer ESAs. Given that inherent cost-benefit reward, the decision for Stein to enter the process for the vadadustat appeal becomes more explicable.

Akebia also received more good news on February 23, 2023, when the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion recommending the European Commission (EC) to approve Vafseo (vadadustat) to treat symptomatic anemia associated with CKD in adults on chronic maintenance dialysis. The EC will review the CHMP recommendation and deliver a final decision in approximately two months.

Vadadustat may have its flaws as a drug but it likely works as well as daprodustat. Regulators, and government payers, in Europe and the US, are recognizing vadadustat has a cost-effective niche in treating dialysis patients. The reach by GlaxoSmithKline and Akebia to treat non-dialysis patients appears to have displeased clinicians, believing the respective label requests were too risky or unnecessary.

The risk still applies to Akebia’s appeal and possible approval for vadadustat. In the original CRL, the FDA cited the increased risk of thromboembolic events, driven by vascular access thrombosis in dialysis patients, and the risk of drug-induced liver injury, if vadadustat was approved. Accordingly, a speculative rating is assigned to the FDA signing off on the pending Dispute Regulation Request.

General Guidelines for SanaCurrents Strategy

Based on SanaCurrents’ analytical model, Superior and Pivotal sentiments reflect a probability score of at least 60% that the company will announce a positive result to the specified catalyst. In our experience, a positive result typically increases the company’s share price. An Advantageous sentiment reflects a score of less than 60%.

In most situations, SanaCurrents partners take a position in a stock (or buy shares) shortly after a report on a catalyst is published. This is particularly true if the catalyst is within 90 days of the published report. For catalysts with horizons of 6-9 months, or longer, SanaCurrents anticipates the biopharma and device stocks from which it selects catalysts can rise or fall 20-30% in the months following the date of the published report. While buying at a dip, naturally, is preferred, SanaCurrents does not forecast or model in swings in share price prior to the catalyst. SanaCurrents’ analytics score models the probability a compelling catalyst will be positive. SanaCurrents expects a positive announcement regarding a catalyst will drive a company’s stock to higher level than the price on the date of the report, based on the company’s value and capital structure when the report was published.  That said, subscribers should exercise their preferred, individual discipline when timing trades, buy or sell, regarding the catalyst forecast.

PROBABILITY SENTIMENT

SPECULATIVE

KEY CATALYSTS

• FDA decision on Akebia’s Dispute Resolution Request regarding vadadustat complete response letter (CRL)

KEY CATALYST DATES

• H1 2023

PROFILE

INSIDER & INSTITUTIONAL HOLDINGS

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