Disclaimer: NOT investment advice, always do your own due diligence and seek your financial advisers and be responsible for your own trade/investment. These are our notes, idea, and opinion only.

  • Note: Elite stocks are for investment holding with time frame 6-12months hold or until reach our target 20-30% gain. There will be update if thesis changes or new found information from the company.

Profile: Akebia Therapeutics, Inc., a biopharmaceutical company, focuses on the development and commercialization of proprietary therapeutics based on hypoxia inducible factor (HIF) biology for patients with kidney disease. http://akebia.com/

Pipeline: The leading product is Vadadustat is an investigational drug being studied for the treatment of anemia associated with chronic kidney disease (CKD), currently enrollment in Phase 3 program in NDD-CKD in Dec 2015 and phase 3 DD-CKD  in August 2016.  Clinical trial for DD-CKD https://clinicaltrials.gov/ct2/show/NCT03054350?term=akebia&rank=1  and Clinical trial for NDD-CKD https://clinicaltrials.gov/ct2/show/NCT03054337?term=akebia&rank=2

From the company site “In the phase 2a trial vadadustat significantly increased hemoglobin levels compared to baseline in a dose-dependent manner across all treatment arms (P < .0001). There are NO drug-related serious adverse event were reported. Dosing were tolerated.

Positive highlights:

  • Feb 13, 2017 Licenses Portfolio of Novel HIF Compounds from Johnson & Johnson Innovation http://ir.akebia.com/releasedetail.cfm?ReleaseID=1011522
  • Dec 20, 2016 and Otsuka Pharmaceutical Announce Collaboration to Develop and Commercialize Vadadustat in the U.S. http://ir.akebia.com/releasedetail.cfm?ReleaseID=1004962
  • From Collaboration with Otsuka Pharm:  Committed Capital and Potential Milestone Payments Could Exceed $1 Billion, Akebia will receive $265 million in committed funds plus development and commercial milestones. Stock current market cap at $348 as of March 7, 2017.

Financial update:

  • The company ended 2016 with cash, cash equivalents and available for sale securities of $260.3 million. The company expects cash resources, together with the timing of amounts expected to be received from collaborators, including a $33.8 million payment from Otsuka received in March of 2017, to fund the current operating plan into mid-2018.
  • R&D expenses were $33.4 million in Q4 ’16 and $115.8m full year 2016 compared to $43million in 2015. largely due to expenses for phase three studies.

Investment thesis:

  1. Chronic Kidney Disease (CKD) drug market will increase to $11.7 billion in 2022
  2. AKBA Vadadustat may be the new leader of CKD in future.
  3. Market cap size valuation is cheap vs the collaboration investment from Otsuka Pharmaceutical
  4. Less follow, less pump, less crowded, and therefore, made a good investment to hold.

Price target: $12-14

 (AKBA sold off today as reaction on Q4 earnings;  http://ir.akebia.com/releasedetail.cfm?ReleaseID=1016104;  Price action may react further to near 8.4/ 8;  Prcie is what you pay, value is what you get. ).

 

~~~~~~~~~~Update info 4/25/17~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~