On Tuesday, Akebia Therapeutics (NASDAQ:AKBA) maintained a positive outlook from H.C. Wainwright with a reiteration of a Buy rating and a $7.50 price target. This affirmation comes on the heels of Akebia's announcement on Monday of a significant commercial supply agreement with U.S. Renal Care (USRC). The agreement positions USRC, a leading dialysis provider in the United States, to prescribe Akebia's FDA-approved drug Vafseo to dialysis patients upon its expected availability in January 2025.
Vafseo, which received FDA approval in March 2024, is designed to treat anemia caused by chronic kidney disease (CKD) in adults on dialysis for a minimum of three months. Akebia anticipates Vafseo will be assigned a Current Procedural Terminology (CPT) code in October 2024, a crucial step in the billing and reimbursement process for medical services. Additionally, the company expects the drug to receive a full Transitional Drug Add-on Payment Adjustment (TDAPA) designation in January 2025, further facilitating its integration into treatment regimens.
The agreement announced by Akebia is comprehensive, encompassing all dialysis centers operated by USRC. With over 500 dialysis centers and more than 200 in-home dialysis programs, USRC is the fastest-growing dialysis provider in the nation, serving over 36,000 kidney disease patients across 32 states. The scale of this partnership is significant for Akebia, potentially bolstering the company's market presence upon Vafseo's release.
H.C. Wainwright's endorsement reflects confidence in Akebia's commercial strategy and the potential market penetration of Vafseo. The agreement with USRC is a strategic move for Akebia, enabling the company to align with a major healthcare provider in anticipation of the drug's launch and subsequent reimbursement milestones. The analyst's maintained price target of $7.50 indicates a steady perspective on the stock's value in light of recent developments.
In other recent news, Akebia Therapeutics has been making significant strides in its operations. The biopharmaceutical company recently signed a multi-year supply contract with U.S. Renal Care for Vafseo®, a treatment for anemia in chronic kidney disease patients undergoing dialysis. The agreement is set to take effect in January 2025, making Vafseo available across all U.S. Renal Care centers.
In addition to this, Akebia has initiated a clinical trial in collaboration with U.S. Renal Care to evaluate Vafseo's effects on dialysis patients. The study, known as the VOICE trial, aims to compare Vafseo's impact to standard erythropoiesis-stimulating agents.
The company has also ended its collaboration with CSL (OTC:CSLLY) Vifor and amended loan terms with Kreos Capital VII, managed by BlackRock Inc (NYSE:BLK). This strategic move has allowed Akebia to regain full sales rights to Vafseo in the United States. The company has disclosed the wholesale acquisition cost of Vafseo at $1,278 for a 30-day supply.
Akebia has also made significant changes to its executive team, appointing Erik Ostrowski as Senior Vice President, Chief Financial Officer, Chief Business Officer, Treasurer, and Principal Financial (NASDAQ:PFG) Officer. On the financial front, Akebia reported an improvement in Q1 2024 revenues, totaling $32.6 million, despite a net loss of $18 million. The company remains well-capitalized with $42 million in cash and equivalents.
InvestingPro Insights
Akebia Therapeutics' recent commercial agreement with U.S. Renal Care aligns with the company's growth strategy, as reflected in the InvestingPro data. The company's revenue for the last twelve months as of Q2 2023 stood at $174.5 million, with a high gross profit margin of 82.29%. This financial foundation could support the commercialization efforts for Vafseo.
InvestingPro Tips highlight that two analysts have revised their earnings upwards for the upcoming period, which may be influenced by the positive outlook surrounding the Vafseo launch. Additionally, the company has shown a strong return of 39.24% over the last three months, potentially reflecting market optimism about Akebia's prospects.
It's worth noting that InvestingPro offers 6 additional tips for Akebia Therapeutics, providing investors with a more comprehensive analysis of the company's financial health and market position. These insights could be particularly valuable as Akebia prepares for the commercial launch of Vafseo in 2025.
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