Akebia Therapeutics, Inc. Stock

Ladies and gentlemen, thank you for standing by. This is Roy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Akebia's Second Quarter 202 Financial Results. [Operator Instructions]

I would now like to turn the conference over to Mercedes Carrasco. Please go ahead.

Thank you, and welcome to Akebia's Second Quarter 2026 Financial Results and Business Update Conference Call. Please note that a press release was issued earlier today, Wednesday, August 5, detailing our second quarter 2026 financial results, and that release is available on the Investors section of our website. For your convenience, a replay of today's call will also be available on our website after we conclude.

Joining me today, we have John Butler, Chief Executive Officer; Dr. Steven Burke, our Chief Medical Officer; Nick Grund, our Chief Commercial Officer; and Erik Ostrowski, Chief Financial and Chief Business Officer.

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 financial results press release that we issued on August 5 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.

With that, I'd like to introduce our CEO, John Butler.

Thanks, Mercedes, and thanks to everyone for joining us this afternoon. As you know, we've been focused on 2 critical areas of our business that we believe will deliver both important therapeutic advances for patients and value to shareholders. Those are advancing our kidney disease pipeline and making Vafseo standard of care for the treatment of anemia due to CKD in dialysis patients. We've had incredibly important advances in both areas since we last spoke to you.

Today, I'll start with research and development. I believe our pipeline is underappreciated and clinical advancement of our rare disease pipeline specifically provides the greatest opportunity to build value. Earlier this week, we announced that we initiated the Phase II basket trial to evaluate ebribafusp, previously known as AKB-097 and ADX-097 in IgA nephropathy, lupus nephritis and C3 glomerulopathy.

We believe ebribafusp, a next-generation complement inhibitor could be truly differentiated in the rare kidney disease space in these indications and others. Beyond this initial basket study, we're doing the work to prepare for a Phase II study in ANCA-associated vasculitis and expect to start that study next year.

Our other rare kidney asset, praliciguat, continues to enroll in its Phase II study in FSGS. As with Ebri, we believe there are multiple indications where Prali can play an important therapeutic role. And again, we believe the mechanism of Prali will allow it to occupy a unique competitive position in these rare diseases that each have significant unmet need.

Our third kidney disease clinical candidate is AKB-9090, which is in a Phase I study in healthy volunteers. 9090 continues to move successfully through the SAD/MAD study, and we expect to report data early next year.

Following that data readout, our plan is that next year, our development team's efforts and our dollars will be focused on Ebri and Prali, where we believe the largest opportunity to drive near-term value exists.

Dr. Steven Burke, our Chief Medical Officer, is currently attending GlomCon Hawaii, where medical professionals around the world have met to discuss treatments for glomerular disease. That's the reason we're having our call this afternoon rather than a normal morning timing.

I'll now ask Steve to share a few remarks on Ebri and Prali. Steve?

Thank you, John. We've built upon our team's commitment to patients and expertise in kidney disease to advance several programs into the clinic in 2026. We believe our mid-stage pipeline products, ebribafusp and praliciguat have the potential to deliver differentiated and targeted approaches to severe diseases with high unmet need.

As John mentioned, we just initiated a Phase II basket trial for Ebri. The goal of this trial is to evaluate the safety and efficacy of Ebri in patients suffering from diseases marked by complement activation in the kidney glomeruli, namely IgA nephropathy, lupus nephritis and C3 glomerulopathy. These rare kidney diseases affect thousands of patients. And while there are therapies available, each requires lifelong treatment.

The currently available treatments include complement inhibitors, which suppress the complement system in the blood and many require frequent administration. Importantly, they generally have a box warning for significant infection risk. And this profile creates concern for long-term use.

In nonclinical studies completed by Q32 Bio, Ebri was shown to be targeted specifically to the sites of complement activation. In patients with complement-mediated glomerular diseases, we believe Ebri should localize to the affected glomeruli, which have significant deposits of C3D while avoiding complement inhibition in the blood.

We highlighted this during our R&D Day in April and expect the findings from nonclinical and Phase I studies to be published in medical journals. During our R&D presentation, Dr. Jonathan Barratt, Mayer Professor of Renal Medicine from the University of Leicester, shared that he believed the complement inhibitor with this profile could be used long term and in combination with B-cell-directed therapies such as APRIL and APRIL/BAFF inhibitors without the associated potential of systemic complement inhibition.

The recently initiated Phase II basket trial is expected to enroll up to 30 patients and will evaluate a once-weekly subcutaneous dose of Ebri for 26 weeks in the main study, followed by a long-term extension study for responders. In the Phase I study of Ebri in healthy volunteers, again, conducted by 232 Bio, this same dose achieved exposures necessary to provide tissue-specific complement inhibition without inhibiting the complement system in the blood.

The primary endpoint of the Phase II study is the incidence of adverse events and secondary endpoints, including the change in proteinuria and kidney function. In addition, the trial will measure every pharmacokinetics and complement biomarkers in the blood and urine to detect if Ebri reduces complement activity in the kidney tissue while avoiding inhibition of the complement system in the blood. The Phase II basket trial is open label, and we expect to report initial data in 2027.

With regards to our Phase II study of Prali in patients with FSGS, enrollment activities are ongoing. FSGS is characterized by focal and segmental scarring in the glomeruli. Prali is a small molecule that is designed to stimulate the soluble guanylate cyclase enzyme and has been shown in animal models of kidney disease to inhibit glomerular scarring and preserve kidney function.

There are about 40,000 patients currently diagnosed with FSGS in the U.S. This trial will enroll up to 60 patients with primary or genetic FSGS in a randomized, double-blind, placebo-controlled trial. The primary endpoint is change in urine protein creatinine ratio or UPCR from baseline to week 24 and the secondary endpoint is partial remission of proteinuria defined as a 40% UPCR reduction and the UPCR less than 1.5 grams per gram.

In a Phase II study of diabetic kidney disease conducted by Cyclerion, Prali demonstrated rapid and sustained reduction in proteinuria as measured by urine albumin creatinine ratio or UACR. We look forward to providing further updates on these studies.

And now I will turn it back over to John.

Thanks, Steve. Now let's turn our attention to Vafseo and our efforts to make this important product standard of care. We had a very positive surprise this quarter when Dr. Geoff Block of U.S. Renal Care completed the planned interim analysis of the primary endpoint in the VOICE trial and found the statistical results significantly exceeded the prespecified stopping criteria.

Vafseo demonstrated a statistically significant and clinically meaningful reduction in the primary composite endpoint of all-cause mortality and hospitalization with the result driven by a 10% reduction in hospitalization. USRC Kidney Research stopped the trial after a recommendation from the independent data monitoring committee and trial steering committee.

And for reference, the VOICE trial enrolled 2,116 patients. Results of the planned interim analysis as of June 1 demonstrated that the trial met the predefined stopping criteria with a win odds of 1.16 and a p-value of 0.0016, establishing non-inferiority and superiority of the primary composite endpoint. We've always had confidence in the clinical differentiation of Vafseo and the potential for a positive outcome of the study, but we were extremely pleased that we had this result earlier than expected.

The result is consistent with the post-hoc analysis of the Phase III INNO2VATE program published earlier this year in the Journal of the American Society of Nephrology. When you look at both VOICE and the INNO2VATE analysis, you see that Vafseo demonstrated a consistent result whether dosing the product daily or 3 times weekly and whether comparing Vafseo to a long-acting or a short-acting ESA.

It's also important to note that no head-to-head study of ESAs has ever demonstrated a significant benefit in hospitalization. We believe the data will make a huge difference for patients for years to come.

As I've said many times, our goal is to make Vafseo standard of care for dialysis patients. Frankly, the voice data gives me greater confidence that we will achieve that goal. I'm especially encouraged by the increased interest we're seeing from the dialysis providers since we made the announcement.

Now at the same time, we currently have only shared data through a press release. Dr. Block is working with our support to present these data at a medical conference and have it published in a peer-reviewed journal as quickly as possible. While the tangible impact of this provider interest could take some time, we believe these data help competitively position and differentiate Vafseo moving forward.

In the meantime, I'm pleased to report that we had our first quarter with over 10,000 patients and $20 million in revenue.

Here's Nick to provide more insight into the quarter. Nick?

Thanks, John, and good afternoon, folks. We're pleased to report significant sequential quarterly revenue growth as well as several adoption metrics and an important milestone with more than 10,500 patients active on Vafseo.

Vafseo net product revenue increased to $21.3 million in quarter 2 of 2026, a 34% increase over the previous quarter, representing a continuation of robust growth. The total patients on therapy in quarter 2 represents an approximate 41% increase compared with quarter 1. Also, once again, this quarter, we had the highest number of new patient starts in the quarter since the first quarter of launch, demonstrating strong momentum.

The diversification of our prescriber base continues to grow. Today, approximately 1/3 of our prescribers are in DOs outside of USRC. Additionally, a vast majority of patients are being treated under DO implemented observed dosing protocols, which is very much in line with our expectations.

The midsized dialysis organizations, USRC, IRC and DCI drove the most significant portion of patient growth, and we believe that all 3 still have significant room to grow moving forward. Another common feature of these 3 customers is the significant level of support in Vafseo that their leadership is demonstrating.

Driving prescribing within DaVita is our highest priority as it represents our most significant growth opportunity from a single dialysis organization. In quarter 2, we continue to see additional new prescribers and patients on Vafseo at DaVita.

As is the case with our midsized dialysis organization customers, while it is important to educate prescribers and caregivers on Vafseo, an inflection point comes with top-down support. To that end, I'm encouraged by the continued high level of interaction between the teams from Akebia and DaVita, bolstered in the past month by DaVita's interest in learning more about the recent VOICE trial results.

While I don't expect to see a meaningful increase in the DaVita adoption curve in quarter 3, there is a heightened level of senior clinical team engagement regarding detailed operational implementation that we have not seen historically. We believe this bodes well for more impactful growth at the end of the year and sets us up well for 2027.

At this stage of the launch and to best support dialysis organizations engagement overall, in quarter 2, we implemented a more targeted, streamlined and agile commercial strategy that prioritizes a greater focus on large group practices and strategic partners.

The goal is to increase the efficiency and effectiveness of our commercial field team, while at the same time, taking advantage of the broad awareness and breadth of patient access created previously.

Our team continues efforts to drive Vafseo prescribing and growth. We understand how important it is for our commercial and medical affairs teams to work closely to engage with dialysis organizations and care decision-makers and support prescribers as they continue to get more experience with Vafseo to increase depth of prescribing as well.

And now I'll turn it to Erik to go through the financials.

Thanks, Nick. Total revenues were $49.1 million in Q2 '26 compared to $62.5 million in Q2 '25. This decrease was due to lower Auryxia revenues, which were partially offset by higher Vafseo.

Turning to the components of total revenues. Vafseo net product revenues were $21.3 million in Q2 '26 compared to $13.3 million in Q2 '25, representing a 60% year-over-year increase. As we've previously discussed, we note that upon the expected end of Vafseo's TDAPA period on December 31, 2026, we plan to price Vafseo within the price range of ESAs, which is significantly lower than Vafseo's current price.

As a result, while we expect Vafseo unit sales volumes to increase in 2027 as compared to 2026, we expect 2027 revenues to decrease compared to 2026 due to this lower planned price.

Auryxia net product revenues were $25.5 million in Q2 '26 compared to $47.2 million in Q2 '25. We continue to expect Auryxia revenues to decrease in '26 due to generic competition and pricing pressure.

License, collaboration and other revenues increased to $2.4 million in Q2 '26 compared to $2 million in Q2 '25. Cost of goods sold was $10.4 million in Q2 '26 compared to $9.9 million in Q2 '25. Of note, Vafseo-related COGS in both periods was derived from prelaunch inventory, which does not include the full cost of manufacturing as a portion of those inventory-related expenses were recorded as R&D expenses in the period incurred prior to Vafseo's U.S. approval.

R&D expenses were $14.1 million in Q2 '26 compared to $11 million in Q2 '25. This increase was driven by activities related to our Phase II clinical trials for praliciguat and ebribafusp as well as higher headcount-related costs.

SG&A expenses were $28.2 million in Q2 '26 compared to $26.6 million in Q2 '25, driven by higher commercialization-related activities. Net loss was $8.9 million in Q2 '26 compared to net income of $0.2 million in Q2 '25. The change to a net loss this quarter was the result of lower revenues and higher expenses, including a $1.9 million expense related to the commercial reorganization mentioned by Nick, which is aimed at increasing the efficiency and effectiveness of our commercial efforts.

Cash and cash equivalents as of June 30, 2026, were approximately $155.5 million compared to $162.6 million as of March 31, 2026. We believe our existing cash resources and the cash we expect to generate from product, royalty, supply and license revenues, along with our plan to refinance our senior secured term loan facility will enable us to fund our current operating plan for at least 2 years.

With that, we will now open the line for questions. Operator?

[Operator Instructions] Your first question comes from Matthew Caufield with H.C. Wainwright.

And really great to see the progress across the platform. So regarding the Vafseo penetration into the dialysis organization, obviously, you've discussed the in-center dosing protocol being an important part of that in terms of adherence and growth. Do you think the near-term growth in the coming quarters is more a factor of new patients getting on to therapy or simply broadening the in-center protocol across those current Vafseo patients? I guess I'm just getting at kind of the best ways to think about the near-term growth drivers overall.

Nick, do you want to take that?

Yes, Matt, great question. Thanks. So really, with the new patients, what we're seeing is a couple of different things. One, the number of clinics that are starting patients is continuing to expand, right? So it's not just within a certain clinic. The number of prescribers continues to grow. It grew 17% this quarter versus quarter 1. So people are starting to try product, try Vafseo outside of, we'll call it, existing physician base. So certainly, that generates a bunch of new patients. In addition, frankly, restarts are going really well.

As you recall, we had QD patients that fell off therapy in 2025 as they've rolled through these observed dosing protocols. We've seen just about 25% of those discontinued patients actually come back on therapy, which is also helping the growth rate as well. And so a couple of different factors in there, but most of the growth is coming through the new patients, new clinics and new providers.

Just about every metric or every metric of growth is increasing quarter-on-quarter. So we're really seeing that breadth of prescribing and patients increase. It's great to see the restarts as well. We're really, really very encouraged by that. And obviously, we hope the VOICE data only continues to accelerate that.

Your next question comes from Roanna Ruiz with Leerink.

This is Anna on for Roanna. Two questions from us. Just wondering if you could better characterize the persistence rates such as 90- and 80-day persistence rates rather than just first refill adherence and give any color on maybe the principal reasons for discontinuation now that you have the 3 times a week dosing.

And second, just wondering what the time line is for getting like VOICE data in front of the medical organizations and how much you might expect that to move these net new prescriber additions beyond the good growth you've seen so far?

Nick, do you want to take the adherence question?

Yes. So when it comes to adherence, we talked about this first refill item, we've seen real good consistency there. About 89% of those patients who receive a prescription for Vafseo get the refill for the next period. which is really strong. After that, it really tapers down towards what I'll call normal churn in the dialysis patient population.

The second part of your question was why do people discontinue? Not any -- no therapy I know of actually works in every patient. And so you may have some folks that get hospitalized during that period, go back on to an ESA, come back into the clinic and then they'll work to put them back on Vafseo. You've got folks that just don't tolerate it. Maybe there's some GI issues associated with it. But at this point, I think we've done a nice job in moving to an adherence rate on first refill that is where we want to be.

Yes. I mean that's where -- when we launched the product, you had this QD dosing and particularly the anemia managers saw people's hemoglobins drop as we told them it would they just weren't used to not controlling that. And we really believe that, that was the main reason for that first refill kind of drop in adherence. And I think the data supports that, that really was the case. And so beyond that, it really is the kind of what you normally see in a dialysis population.

So -- and then I think your second question was around the time line to get that data to the dialysis provider. So this is clearly an ongoing effort. And as I said, I think it's important to note that it's not been presented and it's not published. But this is relatively small community, right? And we know that Geoff Block is incredibly excited about this data as we are. And I know he is talking to dialysis providers, his peers at other dialysis providers independent of our conversations.

But I know Steve and his team have also been having those conversations. And there are places where -- I mean, like U.S. Renal ran the study. So they've been our strongest supporter, and I think that will only continue to increase. IRC and DCI also certainly IRC incredibly excited about the clinical benefit. This only really increases that excitement.

The way we look at it, between those 3 providers, you've got about 66,000 patients in total, most of whom or at least 80% of whom are on an ESA today, and we've got just over 10,000 patients treated. So a huge amount of room to grow there. And again, I mean, the conversations that have been had at the clinical level at DaVita certainly, and as Nick mentioned, I mean, now the conversations are much more operational in nature. And that really, to me, bodes well. Again, it is sort of -- it's a very large organization that we've learned, takes a lot of work to move. But there seems to be some real momentum there.

So we're encouraged by that. And we don't mention Fresenius a lot, but we believe that this is the kind of data that will be meaningful for them as well. And those conversations are starting, and I think they'll be much more interested in seeing it published.

Your next question comes from Roger Song with Jefferies.

This is Nabil on for Roger. Congrats on the progress. Maybe can you comment a little bit more on the pipeline on Prali thoughts on how enrollment is progressing? Any color there as well? And how do we see with recent developments in that space? I guess, following on Ebri with recent developments on that space, how do you see kind of potential combination use?

So I'll take the first part, and then I'll turn it over to Steve. So we really do -- enrollment is progressing. It is a competitive space, which we knew. We're -- the team is continuing to drive more patients on. We feel good about adding more sites. et cetera. We really look forward to saying this is when we expect to see that 6-month data. We don't want to make that -- kind of put that stake in the ground until we're really confident that we're going to have those 60 patients fully enrolled in the study. But we are making progress on it. I think what you're referring to is you look at that the first quarter, Travere just announced their very early data in SGS for that first approved product last night. And it is 40,000 patients, a very heterogeneous disease where multiple products will make a real difference for patients in this market. So this is -- it's a massive commercial opportunity and a massive opportunity for patients as well. So it's worth kind of driving this forward as quickly as we can.

I'll let Steve comment on the opportunity for combination therapy or polypharmacy.

Yes. I mean -- it's Steve. So for FSGS, we will be able to treat patients who have persistent proteinuria site being on ACE and ARBs or endothelin antagonist. So I'm actually delighted to see the uptake of sparsentan, and there's plenty of patients who will benefit. Our drug may work well with sparsentan as well. That's something we'll need to determine in future clinical trials.

In terms of Ebri, there is a real desire to have treatments that are safe and effective and work quickly. So complement-mediated diseases, the complement being activated is damaging the kidney cells. And if you use a complement inhibitor, generally, you get a very rapid response. to stop the kidney damage and clearly could be used with other therapies. There's been a lot of exciting data about APRIL and APRIL/BAFF inhibitors. And I think those are going to be very good products in the long term. They're directed at suppressing the B cells that are making autoantibodies.

And there's no reason these drugs couldn't be used together. I think this is one of the things that Dr. Barratt had highlighted that those drugs are quite profoundly immunosuppressive in terms of B cells and affect your ability to respond to new infectious agents.

So I think there is a lot of interest in having a complement inhibitor that is highly effective, but inherently safer because it doesn't suppress the complement system in the blood. So I think time will tell, but I think there's clear opportunity for combination use. I hope that answered your question.

Steve, go back to FSGS and Prali for a moment. I think one of the things I've heard you talk about with other folks is the difference in mechanism, the unique mechanism of Prali and how it is quite different from the way sparsentan works and why that might actually be a benefit.

Sure. Yes. Sparsentan works by blocking the angiotensin receptor and the endothelin receptor. Blocking endothelin is good because endothelin is a vasoconstrictor. It's injurious to podocytes, which are those critical cells in the glomeruli that are the barrier to proteins filling into the urine. And it's also anti-inflammatory and antifibrotic. Praliciguat is hitting a completely different pathway, the soluble guanylate cyclase pathway, which leads to increases in cyclic GMP.

Prali is a dilator -- it's also protecting the podocyte and has anti-inflammatory antifibrotic properties. So they're doing very similar things just from modulation of a different pathway. There's no reason they shouldn't work well together.

[Operator Instructions] Your next question comes from Julian Harrison with BTIG.

This is Andrew Kassinon for Julian Harrison. Congratulations on the results and progress this quarter. Just a few from us here. So first, you touched on some of the key factors driving Vafseo revenue growth. How much of the growth was driven by ex USRC uptake?

And then next, have any dialysis providers changed or accelerated their protocol decision since the voice results were shared a little more than a month ago? Or has the feedback been more on an individual physician level thus far?

And finally, on DaVita, I know this has been alluded to a bit, but is there any more color on the progress at DaVita that could be provided? And is there a future step-up in uptake we should be thinking about regarding DaVita in terms of timing specifically? And if so, could you maybe give us a little bit more of a sense of when? Congrats again.

Thanks, Andrew. So I'll just comment quickly on DaVita. I mean, again, DaVita put the TIW protocol in place, and that was an important step. We're seeing growth, but Nick mentioned this in his remarks. I mean, it's really that top-down advocacy that has made the difference at U.S. Renal IRC DCI. And those levels of discussions we're seeing now really suggest that we're making progress there.

Honestly, those conversations were happening before voice because of the INNO2VATE data, I believe, this idea that this product can make a difference versus ESAs on hospitalization. I would say it's become more -- urgent is the wrong word, but kind of -- it's been a more robust conversation with the voice data. Nick, I think you have more to add on the DaVita side. You can take the other question as well.

Yes. And so DaVita, we recently got some market research that was fielded at the beginning of June from a company called Keryx. And what that shows is from DaVita physicians, in particular, all-time highs in terms of their awareness of Vafseo, all-time high with a likelihood to recommend and also an all-time high in their preference to use Vafseo instead of an ESA to improve efficacy. And so there is this pent-up desire to use Vafseo within DaVita. We've just got to help the process and help the leadership help the process from the top down to be able to allow them more rapid adoption of Vafseo.

The other questions -- first question, I think, was utilization outside of USRC. Roughly 1/3 of physicians now prescribing Vafseo are non-USRC physicians. And so that kind of speaks to the diversification. USRC has been kind of going gangbusters since the beginning. IRC and DCI really started at the beginning of 2026. And so they are a little bit smaller, but together, they make up just about the size of USRC, and they're demonstrating very, very strong growth as well.

And so just -- and I think John pointed out earlier, there's so much more room to grow in those organizations. When you think about 10,000 patients, and John had 66,000 patients or 60,000 patients between the 3 of them, there's a ton of growth still yet to be had, which is also encouraging.

Yes. I mean we're all focused on DaVita with 200,000 patients that can make a huge difference and turn those percentages on their gear. We really are encouraged by what we're seeing there. The hard thing is to really pinpoint exact timing of when that happens. But when you get that kind of support, it takes a long time to get it. But once you get it, it sticks around also. And I think that's really important as we think about the long term here.

And again, I mean, we don't talk -- as I said, we don't talk a lot about Fresenius, but I believe this clinical data from voice, when this is published and presented, this will make a difference. Those physicians who treat patients at Fresenius want to give their patients the best care as well. So there's tremendous room for us to grow. Even in a world where we have to take this price decrease, which we will for the end of TDAPA, we recognize that. But this is still an extremely significant market that we think will have the standard of care product.

And Julian, you also asked about protocol changes since VOICE. There's been a lot of dialogue between all LDOs. Dr. Block has been pretty active in talking about his VOICE results, which is encouraging. The only protocol change I'll note is DaVita in the very beginning of June did roll out village-wide, their 3 times weekly or observed dosing protocol. And I think that's really going to be helpful in physicians overcoming some of the compliance concerns they may have had prescribing the product at home.

And to get some of the conversations that Steve's team is having with them now is looking at that versus what was in voice. And when you start hearing them get very, very specific about how do we -- what do we do when this happens or that happens, that gives you a lot of encouragement. And they're not asking those questions to past the time, right? They're really looking to do something. We just have to see when. So stay tuned.

That concludes with our question-and-answer session. I would now like to turn the call over to John Butler for closing remarks.

Thanks, operator, and thanks to all of you for joining us this afternoon. And we are really encouraged by the Vafseo growth trajectory through the first half of the year. And as we've been saying, the reaction we're seeing from dialysis providers to the announcement of the VOICE data.

We believe in the long-term prospects for Vafseo and believe it can contribute significantly to Akebia's success. At the same time, I do ask that you consider the opportunity that advancement of our pipeline, specifically Ebri and Prali represents for us. Notably, the opportunity to potentially bring important products to compete in rare disease markets worth many billions of dollars in expected total value. We are eager to update you on the progress of our trials, and we plan to share data as quickly as we can. Have a great day, everybody.

Goodbye.

Ladies and gentlemen, this concludes today's call. You may now disconnect.

Good day, and thank you for standing by. Welcome to Akebia's First Quarter 2026 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mercedes Carrasco. Please go ahead.

Thank you, and welcome to Akebia's First Quarter 2026 Financial Results and Business Update Conference Call. Please note that a press release was issued earlier today, Thursday, May 7, detailing our first quarter 2026 financial results, 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 after we conclude.

Joining me for today's call, we have John Butler, Chief Executive Officer; Nick Grund, Chief Commercial Officer; and Erik Ostrowski, Chief Financial and Chief Business Officer. Dr. Steven Burke, our Chief Medical Officer, will also be available during Q&A.

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 financial results press release that we issued on May 7 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. With that, I'd like to introduce our CEO, John Butler.

Thanks, Mercedes, and thanks to all of you for joining us this morning. We are very pleased and excited by the start to 2026. I want to focus on 3 key areas that we feel we need to execute on to create near- and long-term value for patients and shareholders. First, we have to drive the near-term launch performance of Vafseo. Second, continue to build the clinical evidence to make Vafseo standard of care for patients on dialysis; and third, execute on our impressive kidney disease-focused clinical development pipeline.

We've made important progress across each of these areas. Starting with the Vafseo launch, revenues were nearly $16 million in Q1, representing our highest quarter of Vafseo net product revenue to date and demonstrating the growth we expected over Q4 2025. We're pleased with the progress we're seeing within and across dialysis organizations as we expand the breadth and depth of prescribing and continue to educate the nephrology community on the benefits of Vafseo. We believe this growth is being driven by dialysis organizations that have chosen to implement an observed dosing protocol. Nick is going to expand on that important point and provide more detail on the quarter and trends we're seeing in 2026.

Now we continue to work to take advantage of the TDAPA opportunity for the balance of '26. Of course, we're already planning for the beginning of 2027 when Vafseo will enter the dialysis bundle. The ESA market today for patients on dialysis is estimated to be approximately $1 billion. This is the market we're competing in, where we continue to work to become standard of care. This leads to the second area of focus - building clinical evidence. And that body of evidence supporting the potential benefits of Vafseo continues to grow. The post-hoc hierarchical composite endpoint analysis from our Phase III INNOVATE program in dialysis was recently published in the Journal of the American Society of Nephrology.

The analysis demonstrated that patients treated with Vafseo in the INNOVATE trial experienced a lower risk of dying or being hospitalized than patients treated with the ESA comparator. Earlier in Q1, at the Annual Dialysis Conference, we presented an economic analysis on the cost of hospitalizations for patients treated with Vadadustat versus darbepoetin. That analysis showed that patients in the INNOVATE trial treated with Vadadustat had 7.7% fewer hospitalization events annually, a 16% reduction in hospitalization days and based on Medicare cost data, a 14.8% lower annual hospitalization cost.

We believe these data further supports the potential benefits of managing anemia with Vafseo and provide critical data to providers and prescribers making care decisions. We continue to share these important data with the medical and scientific community as we gear up for results from the VOCAL study expected by year-end. VOCAL is being conducted at DaVita clinics to evaluate Vafseo dosed 3 times weekly, and it contains a substudy of red blood cell characteristics, which we believe will further differentiate Vafseo's clinical profile versus ESAs. VOCAL top line data will be followed by results from the VOICE trial being run by U.S. Renal Care, evaluating Vafseo versus standard of care on a hierarchical composite endpoint of all-cause mortality and hospitalization rates. Top line data from VOICE are expected in early 2027; if positive, it further support the findings of the recently published Win statistics analysis.

Both VOICE and VOCAL utilize a 3x weekly dosing regimen. Alliance organizations are systematically electing to move to an observed dosing protocol. We believe that shift is improving adherence and could lead to greater utilization over time. Now shifting from Vafseo to our third area of focus. Our R&D organization has been highly productive in advancing our kidney disease pipeline, which we believe will be an additional and important value driver for the company going forward.

Strategically, this initiative is a natural extension for us as it leverages our expertise in kidney disease drug development, broadens our presence within the kidney community and aligns to our purpose to better the lives of people impacted by kidney disease.

In April, we hosted an R&D Day to review our pipeline with the investor community, and we were joined by leading medical experts, Dr. Jim Tumlin, Michael Holers and Jonathan Barratt. During that event, we reviewed the preclinical data in focal segmental glomerulosclerosis or FSGS models and prior clinical data in diabetic kidney disease for praliciguat, our soluble guanylate cyclase stimulator.

This is an indication that has received increased attention as there's now an approved treatment specifically for FSGS. We view this as a positive development for patients and the field. And we believe praliciguat could deliver a differentiated approach via a unique mechanism of action in this heterogeneous disease. Enrollment in our Phase II study is ongoing. We're targeting up to approximately 60 patients who are already on maximally tolerated background dose of ACEs or ARBs. The study will evaluate change from baseline in UPCR at 24 weeks as the primary endpoint.

AKB-097, whose generic name is Abribafisp or [ abri ], is our tissue-targeted anti-C3D complement inhibitor. We believe this product candidate could have comparable efficacy to the most efficacious currently approved complement inhibitors in a well-characterized pathway.

Initial data suggests that [ abri ] quickly leaves the bloodstream, directly targeting the tissue of complement activation, in this case, the kidney. We believe this could avoid the increased infection risk you see with current products.

We also believe this will allow [ abri ] to be delivered at a lower dose in a more convenient dosing regimen. As Dr. Barratt articulated during our R&D Day presentation, [ abri ] is a second-generation complement inhibitor. We believe these characteristics support the potential for [ abri ] to be a uniquely differentiated product in the market.

We expect to initiate a Phase II open-label basket trial in the second half of this year, evaluating [ abri ] in IgA nephropathy, lupus nephritis and C3 glomerulopathy. These indications represent a substantial market opportunity. And of course, we're evaluating additional indications to investigate as well. As part of the basket study, we'll be evaluating safety, tolerability, pharmacokinetics, pharmacodynamics and effects on disease-relevant biomarkers such as proteinuria and kidney function.

Importantly, we expect the study to be designed to be able to demonstrate the efficacy and tissue targeting profile of [ abri ]. As a reminder, as the basket study is open label, we expect to begin reporting initial data in 2027.

Lastly, this quarter, we were pleased to announce the initiation of a Phase I study of AKB-9090, our internally developed HIF-PH inhibitor product candidate with an expected initial indication for the prevention of acute kidney injury associated with cardiac surgery. This randomized double-blind, placebo-controlled SAD/MAD study is designed to evaluate safety, tolerability and pharmacodynamics in up to 70 healthy adult participants. And top line data from this program are expected in early 2027.

Overall, we've had a strong start to the year, and we're making meaningful progress on both the commercial execution of Vafseo and the advancement of a pipeline that we believe can support long-term growth. Now let me turn it over to Nick for more granularity on the Vafseo launch.

Thanks, John. Good morning, folks. Like John, I am encouraged by the growth potential for Vafseo in 2026, which we believe is supported by our first quarter trends. While we ended 2025 with approximately 290,000 patients with prescribing access, the start of 2026 was when prescribing access translated to more widespread prescribing and more patients on therapy. I'll recap the quarterly results first and then explain what I believe is driving growth. With the move to observed dosing protocols across multiple additional dialysis providers, we are no longer receiving as much detailed data as we have in the past, but I believe we can still provide a very good sense of Vafseo utilization and growth.

Q1 brought a significant increase in the number of prescribers writing and patients on Vafseo. Approximately 1,025 prescribers wrote a prescription for Vafseo, which was approximately 28% higher than the number of prescribers in Q4 2025. Importantly, approximately 30% of those prescribers were from dialysis organizations other than USRC. Dialysis organizations inventory remained relatively flat from Q4 2025 to Q1 2026. As you know, we reported Vafseo inventory destocking in the fourth quarter of 2025 as a result of dialysis organizations transitioning to observed dosing protocols and the related shift in distribution from shipping bottles to patients' homes to stocking bottles at dialysis centers.

From a patient perspective, we note a 60% increase in the number of patients on Vafseo at the end of Q1 '26 over the number of patients at the end of Q4 2025 to nearly 7,500 patients. The number of new patient starts in quarter 1 was the highest in any quarter since the initial quarter of launch. The majority of new patients began in March, so Q1 revenue reflects at most only 1 month of treatment for these patients. We believe increases in number of prescribers writing and number of patients on Vafseo are important indicators that adoption is broadening as more organizations implement Vafseo treatment protocols that allow for greater access.

Finally, I want to spend some time on adherence and particularly the transition that dialysis organizations are making toward observed dosing protocol. By the end of the quarter, USRC had observed dosing protocols available in nearly all of their clinics as did IRC and DCI. In quarter 1, approximately 2/3 of all Vafseo patients were being treated 3 times weekly, which we expect to continue to grow in coming quarters due to these protocol decisions.

First refill adherence rates through the end of March were approximately 86% for patients treated under an observed dosing protocol. We believe this will reinforce the dialysis organization's decisions to provide access to Vafseo using observed dosing. Because of this expanded access, we anticipate the greatest opportunity for Vafseo revenue growth will be among dialysis organizations that have implemented observed dosing and expect nearly all in-center patients across [indiscernible] to be on an observed dosing protocol by the end of the year.

We are clearly seeing more patients start at DaVita, though more slowly than at other dialysis organizations that have ramped up, and that remains our largest potential growth opportunity from a single dialysis organization. We believe DaVita will implement an observed dosing protocol in the second half of the year.

To summarize, we are seeing encouraging signs in the underlying commercial indicators that matter most, including broader prescriber engagement, improved adherence in observing dosing patients and increased prescribing at dialysis organizations beyond USRC, which all lead to a significant increase in patients on Vafseo therapy. As prescribers continue to gain real-world experience with Vafseo and we generate and disseminate more data, we expect to further grow the breadth and depth of prescribing. Let me now turn it over to Erik.

Thanks, Nick. We're pleased to deliver Vafseo revenue growth this quarter as we continue our pursuit to make Vafseo standard of care for the treatment of anemia in dialysis patients with CKD. I'll now provide an overview of our Q1 '26 financial results as compared to the prior year. Total revenues, which are comprised of net product revenues and license and collaboration revenues were $53.5 million in Q1 '26 compared to $57.3 million in Q1 '25.

This decrease was driven by lower Auryxia revenues, which was partially offset by higher Vafseo revenues. Of these amounts, Vafseo net product revenues were $15.8 million in Q1 '26 compared to $12 million in Q1 '25, representing a 32% increase with an even larger increase in underlying demand as evidenced by the strong Q1 patient growth Nick described as well as by the fact that Q1 '25 revenues reflected initial customer inventory build. Auryxia net product revenues were $36.2 million in Q1 '26 compared to $43.8 million in Q1 '25, which was driven by lower Auryxia pricing.

Looking forward, we note that in addition to the authorized generic for Auryxia that has been on the market for the past year, an additional generic form of Auryxia has entered the market. This increased generic competition is consistent with our expectations and prior guidance. Accordingly, as we've previously communicated, we expect Auryxia revenues to decrease in 2026 as compared to 2025. Lastly, license collaboration and other revenues were $1.6 million in Q1 '26 compared to $1.5 million in Q1 '25.

Turning to expenses. Cost of goods sold was $12.3 million in Q1 '26 compared to $7.6 million in Q1 '25. This increase was primarily due to an increase in inventory write-downs, including as a result of excess and obsolescence and scrap, primarily related to Auryxia during Q1 '26. Of note, Vafseo-related COGS in both periods was derived from prelaunch inventory, which does not include the full cost of manufacturing as a portion of those inventory-related expenses were recorded as R&D expenses in the period incurred prior to Vafseo's U.S. approval. R&D expenses were $14.8 million in Q1 '26 compared to $9.8 million in Q1 '25. The increase in expenses was driven by increased clinical trial activities related to praliciguat, which we are evaluating in FSGS and AKB-9090, which we are evaluating for the prevention of cardiac surgery-related acute kidney injury as well as higher headcount-related costs.

SG&A expense was $30.4 million in Q1 '26 compared to $25.7 million in Q1 '25. This increase was driven by higher headcount-related costs. Net loss was $9.1 million in Q1 '26 compared to net income of $6.1 million in Q1 '25. The change to a net loss in Q1 '26 resulted from lower Auryxia revenues along with higher expenses this quarter as compared to Q1 '25.

Cash and cash equivalents as of March 31, 2026, were $162.6 million compared to $184.8 million as of December 31, 2025. The decrease in cash was driven by the net loss for the quarter, along with an increase in working capital. We expect our existing cash resources and cash from operations will be sufficient to fund our current operating plan for at least 2 years. With that, we welcome questions.

[Operator Instructions] Our first question is from the line of Julian Harrison with BTIG.

Congrats on the progress. First, I'm wondering if you could talk more about the prominent increase of patients on Vafseo in March. Did you see follow-through of that trend into April? And was there may be a specific dialysis provider or providers accounting for most of that uptake? And then second, is Filspari's recent approval relevant at all to your enrollment efforts in FSGS? Can you maybe walk us through how you're thinking about enrollment dynamics going forward for your Phase II trial?

Sure. Nick, do you want to take the first question?

Yes. Thanks, Julian, for the question. The increase in patients nearly 60% quarter-over-quarter really was across all of our DOs, the major ones. USRC continued to have increases as they've really moved to the observed dosing protocol in all of their clinics, which is really, as we've indicated in previous calls, allowed them to start adding new patients on without the complications of a lower adherence rate that we saw in the QD dosing scheme for in-center patients.

In addition, we've seen some restarts at USRC, which I think is an important characteristic. Patients that previously were on QD dosing fell off perhaps for compliance reasons. And now in a TIW, or observed dosing regimen that they're restarting them on therapy with Vafseo, which is really important.

IRC and DCI, really, once they got their dosing protocols in place, if you remember that was in Q4, what we saw was a very, very aggressive and accelerated adoption of the product within their physician base. That advocacy that we're seeing at IRC and DCI is strong. DaVita also had significant growth in the period. They're lagging a bit behind the others. They're still under a QD dosing protocol. But we believe in the second quarter -- in the second half of the year, we'll see them moving to an observed dosing protocol as well. And so really great growth across a number of our DOs. We point to diversification. So the diversification away from USRC is an important measure to see how adoption is progressing at other dialysis organizations.

It's good to see we have significant room still to grow at USRC, DCI and IRC, where we have great momentum. We all know that DaVita needs to increase. And as Nick said, it's growing for sure. But I think it's that observed dosing protocol that's going to make all the difference in the world. So stay tuned. But again, I mean, we we're really pleased with the growth that we're seeing in the USRC, DCI and IRC clinics and expect to see significant growth from them as the year progresses.

And on the FSGS trial, yes, I mean, we think it's really a positive thing for patients. And from a regulatory perspective, you can see that FDA on this is on praliciguat, your second question, really is supportive of bringing new products for this patient population. We know while everyone is excited that sparsentan has been approved, we know this is not a product that's going to be all the difference in FSGS. So I'll let Steve comment, but I'll say Steve and I were down at an investigator meeting a few weeks ago, and I was incredibly pleased by how excited the physicians were about the opportunity for praliciguat and the unique mechanism of action there. And we're pleased with the progress we're making. There are multiple products in development there. So it is a competitive space. But we're very pleased that they're as excited as they are about praliciguat, and we think that enrollment will progress. I don't know, Steve, is there anything you want to add?

No, I'd just echo what you said, which is the bigger issue in conducting clinical trials is competing with other sponsors for patients. So I don't think the Filspari approval is going to have a significant -- we haven't heard that it's having a significant impact on enrollment. I don't anticipate it will just because it's slightly better than angiotensin receptor blockers or ACE inhibitors. And so the majority of patients are still not going to respond to that drug, and it's going to become basically just a background therapy like ACE and ARBs are.

Thanks, Julian. And Steve is not here in the room with us because he's down at the NKF Spring Clinical Meeting. So I'm sure he's getting more feedback on our impressive pipeline as well. Sorry Lauren.

Our next question comes from the line of Roger Song with Jefferies.

This is Nabil on for Roger. So great to hear about the step-up in patients and prescribers. And then regarding the first refill adherence at 86%, how should we think about that level as we -- dosing scales more broadly across DOs? And then I have a follow-up.

Nick, do you want to take that one?

Yes. In previous quarters, when we talked about first refill, the sample size was still relatively small. Now we're getting to the point where there are -- we've gotten to a sample size or penetration of observed dosing where we see a significant number of patients being utilizing protocols that have observed dosing regimen.

And so I feel pretty confident about 86% is going to stick around there. It may move a couple of points one direction or another direction. But there's no reason for us to believe at this point that it shouldn't apply as other DOs bring on. Now every DO has a little bit different protocol, whether it be starting at 900 milligrams daily, how often they titrate up, whether they're coming from Mircera or whether they're coming from Epogen. But we've seen this consistent number here, bouncing around between kind of 85 and 90 for the last couple of quarters. And so right now, we're really confident that that's how you should think about it moving forward.

Great. And then as we think about Vafseo throughout the remainder of 2026, should we expect the growth to be more linear from here or more back half weighted as the protocol adoption matures?

Yes. I mean I don't know that we can guide that granularly to how it's going to go. I mean we've -- as you see with 7,100 or 7,500 patients on the drug, there's lots of room to grow. We see great momentum, USRC. I mean I think particularly excited to see so many of the patients who were -- who went off of the drug last year with the adherence issues that they have being put back on.

And with the adherence rate staying on the drug, how quickly that will accelerate. These are all things that will influence it. But there's tremendous room to grow. I remember there's about 66,000 patients just between USRC, DCI and IRC. Not all of them have a TDAPA reimbursement, but the access is quite good. So lots of room just to grow there. And then the question is, how quickly does DaVita move?

And DaVita has really taken the strategy of allowing physicians to make the choice, whereas the others, it's more of a top-down push. Here are the patients that are available and you put them on, and they do that over time, as I said, systematically, but it is different. It's kind of a more traditional adoption curve, which it's harder to really kind of handicap exactly how quickly that's going to happen, but we know that pool is so much bigger that we need to tap into it.

So I don't think we could say, oh, it's going to be linear or there's going to be some hockey stick at the end of the year. But certainly, once DaVita goes to a TIW protocol, and we -- I mentioned like the JASN paper, the [indiscernible] paper. As I said, that was just published. Before it was published, our medical folks couldn't talk to physicians about it. Right now that it's published, they're out there talking about it. Those are the kinds of data that do change shapes of curve. So -- but exactly how quickly that happens, that's to be determined. But we really are pleased with the momentum that we have in the market today.

Our next question comes from the line of Matthew Caulfield with H.C. Wainwright & Co.

For praliciguat development in FSGS, what do you view as the most clinically relevant change for the 24-week UPCR primary endpoint? Is there a certain delta that will be the most clinically relevant there in addition to preserving the podocyte health and just the overall reduced proteinuria?

Sure. Steve, do you want to take that question?

Sure. I think we would like to see something that's on par with what we've seen with sparsentan. So something around a 20% improvement in the change in UPCR, so 20% over what's achievable with ACE and ARBs. I think the critical thing will be the proportion of patients who end up with a UPCR less than 0.7 grams per gram because that's the approvable endpoint now for FSGS. So that will be the -- really the key metric that will drive our decision to go into Phase III or not.

Yes, I think that -- obviously, we're -- we think that's the bar, right, the sparsentan bar for approval. But as Steve said, I mean the PARASOL findings really is encouraging that we have this clarity from the FDA around what we need to do to get the product approved. And again, given the heterogeneity of the disease, the uniqueness of our mechanism, we really think that there's a place -- it's about 60,000 FSGS patients in the U.S. The approval of sparsentan is great for patients, but there's significant room for new entrants. And again, hitting that clinical threshold will be critical for us. Thanks for the question, Matthew.

I'm showing no further questions at this time. I would now like to turn it back to John Butler for closing remarks.

Thank you, Lauren, and thanks again to all of you for joining us this morning. We look forward to continuing to update you on the progress we're making in the launch of Vafseo, building the evidence to support Vafseo's long-term growth and the continued advancement of our robust kidney-focused pipeline. Have a great day, everybody.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Good morning, and welcome to the Akebia Therapeutics R&D Day. [Operator Instructions] As a reminder, this call is being recorded, and a replay will be made available on the Akebia website following the conclusion of the event.

I'd now like to turn the call over to Mercedes Carrasco, Senior Director of Investor Relations and Communications at Akebia Therapeutics. Please go ahead, Mercedes.

Good morning, and welcome to Akebia's Research and Development Day. During the presentation, we will be making forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements. For more information, please refer to the SEC statements available on our website. For your convenience, a replay of today's call will also be available on our website after we conclude.

To begin, John Butler, Akebia President and CEO, will present opening remarks and a brief company and pipeline overview. Akebia Chief Medical Officer, Dr. Steven Burke, will be joined by Dr. James Tumlin to review praliciguat, which is being studied for FSGS. Dr. Burke will then be joined by Dr. Michael Holers and Jonathan Barratt to discuss our complement inhibitor, AKB-097, and he will close with an overview of AKB-9090. Following the formal presentation, we will open for Q&A.

With that, I will turn now to John Butler to begin.

Thanks, Mercedes, and thanks, everyone, for joining us today. I think we have a very exciting program set for you today because we have, we think, a very exciting company at Akebia. We have a company that has a very clear strategy and a very clear purpose. Our purpose is to better the lives of people impacted by kidney disease.

There's three imperatives that we look at as a company that drives our strategy. The first is to drive Vafseo to become the standard of care for patients on dialysis treating their anemia. Second, we want to build on our commitment to patients impacted by kidney disease. And third, we want to create a future for Akebia beyond kidney disease. And this third imperative really is this early-stage work that we're building on the expertise that we've built in hypoxia-inducible factor-prolyl hydroxylase science, some really interesting things to come.

Today, at our R&D Day, we really want to focus on the middle imperative, building on our commitment to those patients impacted by kidney disease. But to get there, we have to drive Vafseo. Vafseo is the revenue engine that drives our ability to invest in our pipeline, and we're in a very strong place.

So just to remind everyone, Akebia is a commercial company already. In 2025, we did about $227 million of revenue. Now a lot of that was driven by Auryxia, our oral phosphate binder. As we've said in the past, Auryxia now has a generic competition. So while that revenue stream will start to wane, we are set up for significant growth with Vafseo. And remember, Vafseo is going to be growing into a $1 billion market in 2026, and we're set up to grow beyond 2026 as well.

And it's really important to remind folks, we're talking about TDAPA as an important component of driving growth, but the $1 billion market is based on the value of anemia management treatment today in dialysis. And we think we're building a body of evidence that's going to allow us to capture a significant portion of that.

Today, we want to have operational access to patients. A year ago, we had about 40,000 patients who could actually access Vafseo. Today, we have about 290,000 patients who now have prescribing access to Vafseo. Very importantly, we're growing breadth. We've always talked about building on breadth. That means getting patients outside of U.S. renal care clinics to start on Vafseo. We're really starting to see a higher percentage of new patient starts from clinics outside of U.S. renal care.

One of the real issues we had with building growth last year was adherence rates. We've seen adherence -- first fill adherence rates increase in centers that have moved to observed dosing, 3 times weekly dosing from where they were before with QD dosing at 70% to 75% to about 87% today. So we're really encouraged by the first refill adherence that we're seeing.

So today, we're in a strong position to see growth for Vafseo. But longer term, we're also building this body of clinical evidence that's going to support the product. First, we've talked to you about this win statistics analysis from our INNO2VATE data. This analysis demonstrated that when you were treated with Vafseo versus darbepoetin, which is standard of care, you had a lower risk of dying or being hospitalized when treated with Vafseo. This is now a pending publication in the Journal of the American Society of Nephrology, or JASN, which is one of the highest impact factor journals in nephrology.

We're going to support that data with data from the VOCAL trial that we're running with DaVita that's expected by the end of 2026 and data from the VOICE trial, which will have that same win odds endpoint that will come in early 2027. So we'll continue to build on that body of evidence.

But today isn't about talking about Vafseo, though it's critically important for everyone to appreciate that we're positioned well for growth. But we're really excited about the pipeline that we're building around kidney disease. As I said, we have opportunities outside of kidney disease that we're not going to talk about today that we're quite excited about. But the products that we're focused on around kidney disease, I think you'll see each of them can occupy a unique position in the market, bringing unique benefit potentially to patients.

So the first product we'll talk about today is praliciguat, our soluble guanylate cyclase stimulator, which, as Mercedes said, we are studying in FSGS. We started a Phase II in December of last year.

The second product is the one we in-licensed late last year from Q32 Bio, and that's AKB-097. Now as you see on the slide, we recently got a generic name for 097, ebribafusp. And since I still haven't figured out how to say that 3 times fast, I think during the presentation today, you're going to see people continue to refer to it as 097 or ebri. And this is a product that we are expecting to initiate a basket trial in three indications: IgA nephropathy, lupus nephritis and C3G in the second half of this year.

And then the third product we'll talk about today is exciting because it's the first product from our own discovery efforts at Akebia. And this is AKB-9090, which is a HIF-PH inhibitor, and the initial indication is for cardiac surgery-associated acute kidney injury. We are on the verge of initiating the Phase I in healthy volunteers shortly and expect to have data from that Phase I study before the end of this year.

We are clearly targeting severe kidney disease that have a high unmet need. And I think you may look at this slide and say, what a high unmet need. I mean, IgAN, there are a number of products available for IgAN. And I have to say that was the first reaction that I had when the team brought 097 to my attention. But as we learned more about this product, and I think you're going to hear about this in the presentation and the Q&A this morning, the IgAN treatments today don't have the benefit that you have with 097. This tissue-targeted complement impact really can have a profound impact, we think, on IgAN, and I look forward to you hearing about that as well. In lupus nephritis, we know that there's significant opportunity to improve therapy there. C3G, again, the tissue-targeted effect, we think can have a significant impact for patients.

FSGS is another area where there's a lot of different products in development. Nothing has been approved today. And we think that praliciguat as a soluble guanylate cyclase stimulator has a unique mechanism of action, which can play a unique role in therapy.

And then AKB-9090 in AKI, well, AKI is a huge health issue for thousands of patients that hospitals spend a tremendous amount of money on. And the idea behind a HIF-PHI for AKI, we think, creates a unique opportunity to treat a very significant unmet need.

So first and foremost, we think these products can have a significant impact on patients. But these are also very important business opportunities as well. If you look at praliciguat, while there's no product approved in FSGS, the first product that is under regulatory review for IgAN is about $120,000 per year treatment with about 40,000 patients. Even if praliciguat is going to be focused on some percentage of those patients, you're talking about a multibillion-dollar market opportunity across all of these indications. And whether you look at IgAN, which has treatments from $120,000 to $390,000 per patient or C3G, which is over $0.5 million per patient, these are market opportunities where if we can have the kind of impact on the disease that we think we can with praliciguat, with 097, with 9090, these are incredibly important business opportunities as well.

And again, I think what's important to point out is when you look at these product offerings, whether it's praliciguat, a soluble guanylate cyclase stimulator. This impacts the [ nitric ] oxide pathway that's dysregulated in patients with kidney disease. It's a unique mechanism of action to impact patients with FSGS.

097 has this unique approach to tissue targeting targeted complement inhibition. We think that will make it a very unique offering in the market. And then when you look at 9090, this HIF activates pathways that are necessary for cell survival following hypoxic AKI, but also it impacts pathways that regulate metabolism, reduce oxidative stress and inflammation. We're approaching the disease from multiple points of contact. And we think that gives us a significant opportunity to succeed in a very serious disease.

So as we look across our pipeline, we're really excited about the business opportunity, the opportunity to impact patients and the fact that we're bringing unique products to bear across all of these indications. And with that now, let me introduce the people who are really going to give you the information you want around all of these disease areas and these products.

So let me introduce our panel. Starting with Dr. Steve Burke, who's a KME in his own right. Dr. Burke is our Chief Medical Officer and Head of R&D. He has about 30 years of experience in renal drug development.

Dr. Jim Tumlin is a Board-certified nephrologist, a clinical researcher and Professor of Medicine at Emory University School of Medicine. He's led and participated in numerous NIH-funded and industry-sponsored clinical trials spanning acute kidney injury, glomerular disease and dialysis technologies. He is widely published investigator and an editorial Board member for leading nephrology journals. He's recognized nationally for advancing therapeutic innovation and improving outcomes for patients with kidney disease.

Dr. Michael Holers is the first Smyth Professor of Rheumatology at the University of Colorado. His laboratory research efforts have been on the structure-function relationship and biologic roles of the complement immune system. From molecular genetic studies performed by his research group, first-in-class tissue-directed complement therapeutics were developed. And he served as the President of the International Complement Society and has been elected a member of several honorary societies.

Finally, Dr. Jonathan Barratt is the IgA Nephropathy Rare Disease Group Lead for the U.K. National Registry of Rare Kidney Diseases and Convener of the International IgA Nephropathy Network. He's the Chief Investigator for a number of international randomized controlled Phase II and Phase III clinical trials in IgA nephropathy and was a member of the FDA and ASN Kidney Health Initiative, identifying surrogate endpoints for clinical trials in IgA nephropathy work group. And he's the co-Chair of the U.K. Glomerulonephritis Clinical Study Group and the IgA nephropathy lead for the KDIGO Clinical Practice Guidelines for Glomerular Disease.

First up will be Dr. Tumlin to give you an overview of FSGS and praliciguat. Jim?

Well, good morning, everyone. Thank you for your time today. As John said, I'm Jim Tumlin. I'm from Emory University and NephroNet. And we're going to talk about a drug under development called praliciguat, and I think you're going to find this to be an interesting story.

So we're going to talk about FSGS, which is just an acronym for focal segmental glomerulosclerosis. This is a not uncommon glomerular disease, particularly among patients of African descent. And I think one really important point for the audience to understand is that FSGS is purely a descriptive term. And the number of diseases and etiologies that can give you this morphology in the kidney exceeds 20, 30 different causes of disease.

And the right-hand slide, the histogram -- the micrograph shows you four glomeruli and the very dark intense places you see, these are areas where the glomerular capillary loops have collapsed, and they've been replaced by sclerotic fibrotic tissue and are no longer functional. So you can envision as that sclerosing process goes throughout all the glomeruli and more of each individual glomeruli, you lose kidney function over time.

The prevalence of FSGS is actually still growing, and I'm going to show you that slide on that in just a second. And as I mentioned a moment ago, it's more problematic and more difficult in people of African descent. There's been a recent identification of a very important gene called the APOL1 gene that explains a lot of the FSGS, again, in people of African descent, but that's probably maybe half of the entire population that has primary FSGS. And then moving forward, there are a number of other diseases, as I mentioned, that are open to treatment for FSGS.

So this is a micrograph, electron microscopy. And if you see the red, this is the highlighted cell called the podocyte. Podocyte is extremely important. And you can see these finger-like processes between adjacent podocytes. This is where the slit pore occurs in the kidney. This is the final barrier to proteinuria coming from the blood space and into the urinary space.

And the slide is to depict what I said a moment ago that so many things can impair on podocyte function as well as survivability in apoptosis. And that includes TGF-beta, TGF-alpha and TNF alpha and the type I interferons, they affect podocyte function, altered genetics like defects in nephrin, podocin and TRPC6. Endothelin, this has become a very important target pharmacologically in treating and stabilizing podocytes. Permeability factors like the cardiotrophin-like cytokine-1, SuPAR, reactive oxygen species is a big player in diabetic nephropathy. And what we're going to focus today is on impaired nitric oxide and VEGF production and pathways linked to solubilize guanylate cyclase.

This gives you another kind of electron micrograph diagram. So the upper left-hand corner F, this is a normal glomerulus. And what you're looking at is a hone-down on the glomerular tuft, and you can again see these podocytes with these massive finger processes wrapping around the glomerular capillary cells and within the glomerular tuft.

Now if you look to the bottom to E, you see that there's a higher magnification. Again, there are these finger processes where the final pores of slit pore function occurs in that area. Panel D is where a podocyte has either died, gone through apoptosis or literally detached. And that area where the arrow is pointing is exposed basically membrane from the capillary cell. Now why is that important? I'll show you a slide in a minute, but that's where that endothelial cell will adhere to Bowman's capsule and begin this sclerotic process. F is a larger magnification, the same thing. And you can see where these foot processes are pulled back and expose the underlying endothelial base of membrane. This is a cartoon to give you an idea of that.

So whenever you have damage, to a podocyte cell. So in this example, Steve is going to show you some data on an adriamycin model. Adriamycin damages the podocyte, induces apoptosis and eventually, that podocyte falls off the base of membrane, which I was saying a moment ago. In the middle panel here, you can see the diagram where the podocyte has falling off and the green is that basement membrane I -- just a moment ago. And you can see at the top of that slide, that green is beginning to adhere to Bowman's capsule on the outside of the glomerular tuft.

Then in the right-hand panel, you can see a fully formed sclerotic lesion. That sclerotic lesion propagates under a lot of different forces, some of which are responsive to augmentation of the soluble guanylate cyclase pathway and leading to the sclerosis that eventually becomes a phenotype of FSGS.

Now let's go to some more images of this. So I've been mentioning this tuft adhesion. So again, on the right here, this is a conventional H&E stain. And where you see the three arrows, this is a real-time image of where that sclerotic process is developing. You can see the one in the upper left-hand corner, that sclerotic process is advanced and moving in, and you can envision how that would consume the glomerular tuft over time.

Now FSGS prevalence is growing. So every year, new set of data on this. Right now, the prevalence is there's about 88 cases per 1 million population. If you go back to 2008, the number of FSGS patients was around 22,000. It's now just above 31,000 and continuing to climb. Why that is, is not known, particularly since we are hopefully getting better about treating it, but this is a persistent trend that's been documented for at least the last 25 years.

Well, it may be increasing prevalence and maybe we're getting better, maybe we're not, but because I think this slide is very helpful to the audience in that basically, the big 3 of treatment for FSGS has not changed much at all over the past 20 years. Predominantly, glucocorticoids have been used to treat this. Being a practicing clinician that treats FSGS patients every day, glucocorticoids are fraught with side effects, including weight gain, steroid-induced diabetes, bone disorders, et cetera. The CNIs, drugs like tacrolimus and cyclosporine used in about 14% of cases. They're effective, but of course, they're weighted by their scarring. And I'm a little surprised to see mycophenolate on this list because the data for this has been generally quite poor.

Now this diagram is a little bit deeper dive into the biology of a podocyte and it's simply to tell you that these microtubules and actin and myosin filaments within the podocyte allows for the formation of the finger processes that I showed you on the electron micrographs. Suffice it to say that praliciguat is involved with pathways involving cycling GMP kinase that regulates the functionality of these actin and -- filaments and the formation of the foot plate processing. So the agent goes directly to the defect that you see that contributes to the proteinuria that is the [indiscernible] known of FSGS.

Okay. Let's talk a little bit more clinical. So this is a basic statement. Whatever the clinician does to reduce urinary protein in an FSGS patient, you achieve them some degree of benefit. And what's old is new again, this is older data, and this is from Dan Cattran's group at the Toronto Registry. And Dan showed that if you do not get somebody to a complete remission, what you can see is the real survival rate is effectively 80% by 12 to 15 years. If you're even able to reduce the proteinuria by 50%, down to a level below 3,500, you can see a significant improvement in the survival.

And I would point out to the audience to look to the left-hand side of the graph, this effect on renal survival and the reduction of proteinuria starts early, in about 2 years of that therapy, you start to gain a benefit. And then in the complete response, which is less than 300, you see that for the first basically 10 years, there is little to no progression toward dialysis. So again, the take-up point of the slide is achieving even a partial remission is a win for the patient compared to those who had no response at all.

Another way of saying the same thing. This is data that's combined from the REIN trial and from other studies, and they look at the outcome of chances for ESRD based on the level of proteinuria. So the proteinuria is broken down into tertiles, 500 to basically 2 grams, 2 grams to 3.5 grams. And if you're above 3.8 grams, you can see a virtual dose-dependent reduction in the renal survival such that if you were maintained over time between 500 and 1.2, your risk for ESRD is around 4.3%. If you're between 2 and 3.5, you're at 15.3%. And if you're above 3.5 or nephrotic range proteinuria, you have basically 1/3 of a chance of reaching dialysis.

The right-hand data says more of the same thing. It indicates the short-term changes, even in the short term, have benefits that are substantial for reducing progression of dialysis. Again, illustrating this point that clinicians that get that protein down have definitely benefit their patients.

And then the last data, this trial is changing the landscape of a lot of forms of glomerular disease. I think the audience should really understand the impact of the PARASOL trial. And this study looked at, I believe it was 1,800 patients, and they all had FSGS, and they analyzed people based on their protein that they achieved, and this is a really important point, irrespective of the therapy they gave. And it simply says here that if you got that patient by prednisone, by RAS blockade, by [indiscernible], by praliciguat or whatever, if you got that proteinuria down below 700 milligrams, you can see that the difference in the survival is substantial.

And once again, there's that 2-year mark. So roughly after about 2 years, the two curves begin to separate. And if you did not achieve that 700, you had a 40% progression by year 8.

Now they took this data and they compared it with another very famous and well-known registry called the RaDaR dataset. This is out of the U.K. and Dr. Barratt, we spoke earlier, is a seminal keeper of that database. And they find almost a superimposable outcome between the two sets of data. If you get below 700, your chances of progression are dramatically reduced compared if you do not do that for a nonresponder, once again, plus or minus 2%, a 42% progression by year 8. So the internal consistency of going Dan Cattran data and now the PARASOL and RaDaR data really illustrates the importance of protein reduction.

Now praliciguat. So what is praliciguat? Praliciguat is an agent that works with solubilized guanylate cyclase that are nitric oxide synthase and iNO dependent. When activated, it stimulates the development of cyclic GMP, which goes downstream to affect a number of pathways, including PKG as well as affecting pathways, including the TRPC6 pathway.

So what we're going to show you is just a little bit of preclinical data looking at the TNF alpha-induced inflammation and TGF-beta in human proximal tubular cells. We're also going to look at an adriamycin mouse model. Steve is going to present that data and then also 5/6 nephrectomy rat model of CKD.

All right. Let's look at this. So this is a function of what praliciguat does on reducing the toxic effects of a very important cytokine called TGF-beta. If you don't know, TGF-beta is probably the predominant cytokine that regulates forces that lead to glomerulosclerosis and interstitial fibrosis. So if you have a model here where TGF-beta is administered to animals and you look at a glomerular structure, you can see that in the -- it's a little difficult to point out, but the glomerulus is full of hemorrhage. There is collapse of vessels. There is peri -- glomerular inflammatory cells, there is fibrosis. And in that same animal model when treated with praliciguat at 10 mg per kg per day, you're basically looking at a normalized glomerulus. So the effect in this model of TGF-dependent glomerulosclerosis is highly effective.

The right-hand set of data shows you the more clinical aspects of this. You can see that in the animals that have high salt diets, part of the TGF-beta pathway, the level of urinary protein is much higher and has blocked down significantly [ for ] praliciguat. Glomerulosclerosis, you see, again, almost a dose-dependent reduction in scarring of the glomerulus with praliciguat. It reduces TGF-beta production by the kidney and reduces the interstitial fibrosis.

And one more data point I'll show you, I'll turn this over to Steve, is this is a model preclinical looking at cultured human proximal tubular cells. In the top panel, you see these have been treated with TGF-beta. And if you can see the clustering of the cells, that is a hallmark of proximal tubular cells that are undergoing what's called mesenchymal transformation. What is happening in those cells, they are literally turning into fibroblasts. And to remind you, the importance is that the fibroblasts are, in fact, the cells that do the driver of the scarring formation within the interstitial of the kidney. But if you take those same cells treat it with TGF-beta and add praliciguat at 1 micromolar, you normalize the culture of proximal tubular cells.

Now taking a look at the right-hand data, there's a subtle thing that I want to point out. If you look at this data, there's one point where the proximal tubular cells are treated with an antibody to TGF-beta. And what's interesting is that in this particular study, the praliciguat was superior to the TGF-beta antibody in blocking this mesenchymal transformation. And why is that important? Because in previous studies in FSGS, blockers of TGF-beta have been tried before and were unsuccessful. Well, then why would praliciguat be more effective than an antibody TGF-beta? Well, obviously, we don't know, but we think it has to do with the augmentation of downstream effects of the pathways that stabilize the fibrotic processes and by extension the glomerulosclerosis.

So I think that's my last slide, and I'll turn this over to Dr. Burke.

Thank you, Dr. Tumlin, for that excellent presentation. Akebia was very excited by the preclinical package we inherited from Cyclerion. After a deep review, Akebia decided that FSGS was one of the most promising applications for prali. But before making a final decision, Akebia conducted two additional nonclinical studies, one in the murine adriamycin model of FSGS and a second in the 5/6 nephrectomy model in rats. The results of those studies affirmed our decision to develop prali for FSGS. Now I'll give a high-level review of the two study results.

In this model shown here, animals received a single dose of adriamycin on day 0 and then parli treatment with or without the ACE inhibitor, enalapril, on day 6 to 14. Urine was then collected overnight and the animals were sacrificed on day 15 for kidney histology. As mentioned previously, adriamycin accumulates in podocytes and damages them, leading to marked increases in proteinuria as shown in the black columns on the left side of the graph as compared to the control animals in the white column, that's approximately a fivefold increase in urine protein to creatinine ratio.

Praliciguat at doses of 3, 10 and 15 mg per kg did not decrease proteinuria when administered alone, as shown in the blue bars, but when combined with enalapril in the green bars, resulted in a marked reduction that was greater than that seen with enalapril alone in the red bar.

In addition, the combination of prali and enalapril in the green plots showed a reduction in glomerulosclerosis, the scarring that develops in response to podocyte damage. The black lines represent the means with individual animals within a group represented by circles and triangles. There was also a reduction in tubulointerstitial fibrosis and degeneration, which drives the transition from reversible injury to progressive, irreversible chronic kidney disease.

Now I'll switch to the 5/6 nephrectomy data. The model involves infarcting 5/6 of the kidney by arterial ligation to cause hyperfiltration of the remaining glomeruli in the remnant kidney. This hyperfiltration causes proteinuria and glomerulosclerosis. Study drug treatment begins 2 weeks after the surgery and continues for 7 weeks with periodic blood and urine collection and necropsy at 9 weeks.

This figure shows the mean proteinuria over time. Going from left to right, the black columns are the normal animals and the red columns are nephrectomized animals. The green column is enalapril alone. The purple and blue bars are prali 1.5, 3 and 10 mg per kg alone, and the final three bars are prali at the same doses in combination with enalapril. Similar to the adriamycin experiment, the combination of prali with enalapril showed the greatest reduction in proteinuria, and that data is highlighted by the black circles.

Praliciguat in combination with enalapril, the three columns on the right, also decreased serum creatinine concentrations compared with the vehicle-treated group, the pink bar on the left, indicating preservation of kidney function.

Consistent with the creatinine data, the combination of prali and enalapril showed a marked decrease in glomerulosclerosis as shown in the black box. These results are very impressive and bodes well for the potential of praliciguat to delay the progression to end-stage kidney disease. Importantly, all patients with FSGS will be treated with an ACE inhibitor like enalapril or an angiotensin receptor blocker and prali will be added on top of those therapies.

In addition to generating additional nonclinical data, we reanalyzed Cyclerion's Phase II study in diabetic nephropathy. 156 subjects with CKD and macroalbuminuria were randomized to placebo or praliciguat 20 or 40 mg for 12 weeks. The primary efficacy endpoint was change in urine albumin to creatinine ratio or UACR. UACR decreased by approximately 20% to 25% with praliciguat with both doses in the ITT population and in the modified ITT population of 133 subjects, as shown in this slide. At one site, the subjects on praliciguat had negligible blood levels, and so that site was excluded from the modified intent-to-treat population.

We also analyzed the proportions of patients in the placebo and the prali groups receiving -- achieving UACRs less than 0.3, 0.5 and 0.7 using the modified intent-to-treat population. In FSGS, approximately 2/3 of urine protein is albumin. So a UACR of 0.5 approximates a UPCR of 0.7, the PARASOL endpoint. And as shown in the table, the proportion of subjects achieving UACR less than 0.5 increased from 34.8% in the placebo group to 51.2% in the prali group, an absolute increase of 16.4% with a relative risk of 1.47. So a 47% increased chance of meeting this level of response in the prali group. Now FSGS patients may respond differently than patients with diabetic nephropathy, but nonetheless, this analysis was encouraging.

This next slide summarizes the design of the recently initiated Phase II study in FSGS. It's a randomized, double-blind, placebo-controlled dose titration study to evaluate the efficacy and safety of prali in adults with biopsy-confirmed FSGS. The study randomizes up to 60 subjects to prali or matching placebo for 24 weeks, after which the placebo patients will cross over to prali.

The efficacy endpoints are change in UPCR from baseline and the percentage of patients with a partial remission. We will also analyze the percentage of patients with UPCR below various cut points, including 0.7 grams per gram, and this will inform us if we should proceed to Phase III.

At this point, I'm going to turn over the presentation to Dr. Michael Holers to discuss our new tissue-targeted complement inhibitor, ebri. Dr. Holers is a rheumatologist and leader in basic and translational research focused on the role of complement in immune regulation with particular emphasis on B lymphocytes and autoimmune diseases. His lab at the University of Colorado has developed innovative human and mouse models to advance the development of complement inhibitors. Dr. Holers?

So I'm very happy to go through the background of AKB-097. First, with regards to the complement system, this is a very complex multiprotein system that's been known for many years. The main effects of the complement system are shown on the left, including lysis of bacteria and damaged cells, enhancement of pathogen clearance and recruitment of inflammatory cells. However, we know, as in the lower left, the complement system is dysregulated in many autoimmune and inflammatory disorders, especially those involving the kidney.

Now with regards to the system on the right, one can see again that it's a complicated system. However, to simplify it, what I want to point out is that there are convertases there in the pink and AKB-097 targets those convertases. These are the multiprotein engines, if you will, of the complement system that drive the generation of the effector mechanisms.

The other important point on the right side is the molecule C3, which is a major serum protein, which when activated, will covalently attach to targets. That covalent attachment is a very important function of this molecule. It is then degraded through a series of proteases to form the fragments shown in the red, most importantly, C3d.

Now the other complement inhibitors are focused, as shown here on the slide, in various proteins and are not specific for the convertases themselves. These are systemically active proteins and molecules that are used clinically and their targets are shown here.

So AKB-097 aims to address limitations of current complement inhibitors. One problem is the other inhibitors are systemically active. And in order to get local control, you have to utilize the systemic inhibition to work very locally. AKB-097 enhances this activity through direct tissue targeting, which allows the inhibition to occur only where complement is being active. The high doses and frequent administration that's required of the systemic inhibitors is necessary to control the pathway. However, a reduced treatment burden is shown with preclinical data demonstrating that once weekly dosing and perhaps every 2-week dosing will be effective. The systemic risk associated with infection is clearly there with the systemically-active inhibitors whereas there is the potential for an improved risk-benefit profile with tissue targeting, as shown in the lower right.

AKB-097, as shown here schematically, is a novel tissue-targeted complement inhibitor. Shown in the middle is the targeting agent that recognizes this C3d fragment with very high affinity and very high avidity, as I indicated before. Linked to the antibody is a negative regulatory protein of factor H. This is an endogenous inhibitor that is capable of stopping the convertase and also very importantly, completely inactivating the convertase by taking the C3b molecule and cleaving it in association with a cofactor. This is, as I said, a unique mechanism that allows this tissue-directed inhibitor to block complement and irreversibly inhibit it at tissue sites.

C3d is a very important target, as shown on this slide. This fragment identified with the same monoclonal antibody as used in AKB-097 is present across a wide range of renal diseases as is shown across the slide at the top and the bottom. Therefore, this C3d fragment is present at sites where complement is being activated and of course, where you would like to block this ongoing activation.

First evidence of this prolonged and durable blockade was shown in a model of C3G and in which in the top slide section, one can see that treatment with 5 milligrams per kilogram of this inhibitor resulted in a very prolonged decrease in C3 activation in 3, 7 and barely coming back at 2 weeks or 14 days. At the bottom, one can see that the AKB-097 itself was present in that tissue site for 7 and upwards of 14 days. Therefore, one can clearly see a durable binding of the inhibitor to sites where C3d is being actively generated. And when that durable binding occurs, further C3 activation is blocked.

Practically, this is also shown in a model of membranous nephropathy in rats in which treatment with AKB-097 in the ongoing disease results in the left side with a decrease in proteinuria, which is one of the major outcomes in this particular model. But on the right side in the center, one can see this complete dissociation, if you will, between systemic complement inhibition and local complement inhibition.

So if one looks at the middle, one can see doses of AKB-097 that block the deposition and activation of C3 in the site, and that is what drives the decrease in protein. However, on the right side, those same doses that provide local inhibition have absolutely no systemic inhibition, therefore, demonstrating practically the complete dissociation or separation, if you will, of a local versus a systemic effect.

Also, structurally, it's very important not only to see the function, but here, we demonstrate in the same study, a structural protection where in the middle, treatment with this antibody results in glomerular basement membrane damage and effacement of podocytes in association with the immune complexes that are shown with the yellow areas. However, treatment with AKB-097 on the right side results in a maintenance of this glomerular barrier and protection of the podocytes with maintenance of the foot processes in these particular sites.

Therefore, in sum, what AKB-097 does in this model is goes to the tissue site, blocks complement activation without systemic inhibition, protects the loss of glomerular filtration such that proteinuria is diminished and as well protects the tissue site from damage.

So with that, I'll turn it over to Steve and allow him to go through some of the human Phase I data.

Thank you, Dr. Holers, for that excellent presentation. Now I wanted to review the key results of the ebri Phase I study that explored intravenous and subcutaneous dosing in normal volunteers.

The top panel shows the results of the IV dosing component. On the left are the mean plasma levels of ebri over time and the days following single IV doses of 0.1 to 33 mg per kg. On the right is the percent of baseline alternative pathway complement activity by dose over time. IV ebri, particularly at the high doses such as 3, 10 and 33 mg per kg, inhibited the alternative pathway systemically, which is good and that it shows it functions as a complement inhibitor.

In the figure, anything above 50% is mild inhibition and associated with a low risk of infection. 20% to 50% is moderate inhibition and less than 20% is deep inhibition and associated with significant infection risk.

The bottom panel shows the results of the subcutaneous dosing component. On the left are the mean plasma levels of ebri over time in days following single subcutaneous doses of 3.75 and 10 mg per kg and also a 450-milligram dose administered once weekly for 5 doses. You can see that the peak plasma level of 10 mg per kg subcu is much less than the equivalent IV dose above.

On the bottom right is the percent of baseline alternative pathway complement activity by dose over time with the subcutaneous administration. The complement inhibition with the 10 mg per kg dose is mild as compared to the near complete inhibition with the equivalent IV dose above.

The 450 subcu dose, which equates to an average dose of around 6 mg per kg will be used in the Phase II basket trial. That dose did not decrease alternative pathway complement activity significantly with the initial or subsequent 4 weekly doses.

To synthesize what I just presented, I am showing you the PK profile of the various doses studied in Phase I, highlighting the 450-milligram subcutaneous dose with the thick green line. The 450-milligram subcutaneous dose exposure exceeded the level which should provide complete inhibition of the complement activity in the tissues based on the preclinical studies that Dr. Holers reviewed. In addition, the 450-milligram subcutaneous exposure was at a level well below that which would cause 50% or greater inhibition of the alternative pathway systemically. And as noted at the bottom of the slide, in the Phase I study, there were no serious or severe AEs, no discontinuations due to AEs, no AEs related to immunogenicity and minimal anti-drug antibodies.

Now I'm going to turn this over to Dr. Jonathan Barratt, a nephrologist with deep knowledge of glomerular diseases, who can discuss the potential role of ebri in treating complement-mediated kidney disease. Thank you, Dr. Barratt.

Thanks very much, Steve. So where we see this drug being of particular use are in a number of different complement-mediated kidney diseases where we have very clear evidence that intrarenal complement activation drives glomerular injury, glomerular fibrosis and loss of kidney function. And these conditions are IgA nephropathy, lupus nephritis and C3G.

Now we do have a number of emerging treatments for each of these conditions, but what has been very clear is that these treatments are likely going to be required to be given lifelong. And these are diseases that affect young people. And therefore, we are talking about many, many years of drug exposure because in the clinical trials, what we've seen is when these new treatments are stopped, the disease comes back with the same degree of severity as there was present before we gave the initial treatment, particularly when we think about IgA nephropathy and those treatments targeting B cells and those complement therapies as well.

And so when we think about lifelong therapy, we need to think very carefully about long-term safety. And what is very exciting about this approach, which I think of really as a second generation of complement inhibitors is the ability to target tissue-level complement activation without impacting on systemic complement activity. And as you heard from Dr. Holers, complement activity is essential to manage pathogenic diseases from microbes. And therefore, if we're able to limit the degree of complement inhibition to the tissue level where complement is actually being activated and causing tissue injury and leaving systemic complement activity alone, we will have a much lower risk of impairing the complement system's ability to deal with microbial pathogens.

And so there is a real opportunity here, I believe, to use these drugs in these complement-mediated kidney diseases for them to be used over a chronic period of time without the associated potential risk of systemic complement impairment and that associated risk of increase of infection complications.

So I think when we think about the current therapies, there are still significant clinical unmet needs. There are a proportion of all patients in these conditions that don't respond completely to the available therapies. The available therapies are going to have to be given lifelong. And we -- in that situation, we need to really concentrate on minimizing the potential long-term risks associated with those therapies. And therefore, a targeted approach inhibiting complement at the site of complement activation without widespread systemic complement inhibition is very attractive for a safety perspective in a treatment that is likely going to be need to be given for many, many years.

And so that has led to the design of the Phase II open-label rare kidney disease basket trial, where we are going to look at these three complement-mediated kidney diseases, IgA nephropathy, lupus nephritis and C3G in an initial study to assess safety of 097 alongside getting early information on clinical efficacy by looking at secondary outcomes in terms of change in proteinuria, change in GFR and of course, looking at plasma PK profile and evidence of inhibition of complement activation by looking at urine soluble C5b-9 as a biomarker of terminal complement pathway activation in the kidney. The study will be for an initial 26 weeks, and we are targeting 30 patients with the hope this study will start in the second half of this year.

So thank you for listening, and I'll hand back.

Thank you, Dr. Barratt, for that overview of complement-mediated kidney diseases in the ebri basket trial. Now I'll give a brief overview of Akebia's third program we are discussing today, AKB-9090 for cardiac surgery associated acute kidney injury or CS-AKI.

AKI is a sudden decrease in kidney function that usually occurs in association with another serious illness or condition. Next slide. One such condition is cardiac surgery, particularly if it involves the use of cardiopulmonary bypass. Next slide. AKB-9090 is a novel HIF prolyl hydroxylase inhibitor developed at Akebia to prevent or treat CS-AKI. AKB-9090 works by stabilizing HIF in the kidney to activate cell survival pathways, alter metabolism, decrease reactive oxygen species and inflammation to reduce kidney injury to tubular epithelial cells and the microvasculature. Next slide.

Investigational agents targeting a single pathway have not worked in the past. In contrast, 9090 activates a transcription factor present in all cells of the body, which then activates multiple pathways responsible for cellular adaptation to hypoxia. The figure on the right highlights the major pathways affected by HIF and Akebia has data, both in vitro and in vivo documenting positive effects on each of these pathways.

Next, I will review some representative 9090 data from an ischemia-reperfusion model we run on rats. The model involves removing one kidney and then occluding the blood flow to the remaining kidney for 30 minutes. This is the ischemia part of the model. Restoring blood flow causes additional reperfusion injury. 9090 was given at the start of the surgery. This particular experiment tested various intravenous dosing regimens on kidney function and histology.

You can see in the figure on the left that the middle two groups, 4 mg per kg over 8 hours and 30 mg per kg over 4 hours were particularly effective at decreasing the rise in serum creatinine, the main clinical marker of kidney function. And in the figure on the right, also improved the kidney histology, showing both the reduction in tubular epithelial and vascular damage.

A Phase I study has recently initiated in New Zealand. The planned Phase II study will treat patients undergoing elective cardiac surgery requiring cardiopulmonary bypass. 9090 will be dosed immediately prior to surgery, immediately after surgery in the first few days while the patient is in the ICU. This trial will enroll subjects at higher risk for AKI based on the presence of pre-existing chronic kidney disease and other comorbidities, and we will look at the incidence, duration and severity of AKI.

This is my last slide, and we will now turn to Q&A.

Thank you. We will now begin with a few questions on AKB-097. These questions come from the team at Jefferies. First, what is the most compelling evidence that tissue-localized C3d targeting can deliver efficacy comparable to systemic complement inhibition without meaningful systemic immunosuppression.

So Dr. Holers, I think that would be for you.

Great. Thank you. Certainly, is a very appropriate question. And maybe I'll just briefly review the history of tissue targeting, which is something that's been very active in the academic community for many years, in fact, over a decade.

So we were able with colleagues to work through a number of different strategies to direct inhibitors to tissue sites and came up with this C3d targeting approach. And it was shown in multiple studies to be the most effective way to do it. Our colleagues at Q32 Bio went ahead and optimized the structure-function relationships of this. And then in a number of different species, and I went through one of those in the prepared remarks, we were able to see a clear separation between these -- between the two.

So the other, I think, important point is that the Phase I PK data was entirely as expected. So we -- I think based on a series of preclinical models and a lot of prior work on the academic side, we're very convinced that we should be -- that we would be able to separate these effects out in a clinically relevant manner.

Thank you, Dr. And of course, if any of our other panelists have anything to add at any point, please feel free to jump in while we go through these.

Great. What biomarkers will definitively show local complement inhibition versus a partial systemic spillover?

That's Dr. Holers as well.

Sure. I think we've learned a lot from recent studies of complement inhibitors. And certainly, biopsy will be very important where it's available. However, what's been striking and perhaps Dr. Barratt will comment on this later and already brought it up, is that the soluble C5b through 9 levels in urine turn out to be a very nice way of understanding local complement inhibition.

So pairing that along with the regular serum levels of complement inhibitors and serum levels of the drug and inhibition functionally, I think we will be able to very nicely see that the local control is occurring and the systemic inhibition is not occurring at any substantial level.

Yes. And I just want to -- as a nephrologist, I think I have to say this, and Jim will back me up, kidney biopsy tissue will be wonderful to see this in terms of showing that the drug is localized to the kidney tissue and that it is having an immediate effect on complement activation of those downstream inflammatory pathways. And I think that's eminently achievable. We're doing a lot of repeat kidney biopsy studies at the moment in nephrology. That will be something that I'm sure we will be thinking about going forward. But I think that is a real opportunity to link kidney tissue localization with what we're seeing in the urine. So that's another great opportunity to think about really showing the unique MOA of this approach.

Just to echo what Jonathan is saying, I totally agree that the utilization of repeat biopsies is something I'm kind of famous for. I've been an advocate of that for 20 years, is knowing and looking at the actual deposition, the working end of the activated complement at the tissue level cannot be underestimated. The C5b membrane attack complex in the urine, I agree with Dr. Fuller -- Holers, I'm sorry, is in advance, but it's difficult. Those assays are probably not quite ready for prime time yet. Having this, which is I know being done by other companies as well, it is going to be a major step forward.

Thank you all.

Great. Let's switch to a few questions on praliciguat. First, how does praliciguat differ from endothelin antagonists and APOL1 inhibitors? And how does this provide an advantage?

Okay...

Really good question. There's a lot of activity in FSGS, as you know. So the APOL1 story is unique. So this is a gene product that's expressed in duality, autosomal dominant, particularly almost to exclusion of people of African descent. Now that's a large percentage of patients with FSGS, but its pathway is fundamentally different than what praliciguat addresses or the endothelin antagonist. This is a porating hormone -- protein, it's a part of the passive immune system that is designed to kill certain parasites that are endemic to Africa. When you have this gene and another second hit, it affects the podocyte and leads to the phenotype of FSGS. But that's not going to be confused with the market for praliciguat simply because you're going to know this person is APOL1 positive.

The ERA story is a little different. ERA is activated by mesangial injury of any type, and it's not limited to FSGS. It's certainly seen in IgA, it's seen in lupus, even in diabetes to a lesser extent. So blocking that pathway, which leads to downstream fibrosis and the arteriolopathy in these patients is one pathway that would be treated, and it would not at all be opposed to co-treatment with praliciguat in my opinion.

Great. Thank you. Next question comes from Julian Harrison at BTIG. Just to expand on that, can you talk about how the likely unmet need post-ERAs in FSGS?

Yes, sure. So as I said a moment ago, ERAs are going to be used. Again, in my opinion, they're going to be a foundational drug of CKD. They'll be used in IgA, and they are used in IgA, they'll be used in FSGS and a number of other chronic kidney diseases. So that's one modality of therapy. And going back to my comments from the lecture that reducing proteinuria by an ER pathway is helpful, but you will not reduce the proteinuria sufficiently in every person. And there's going to be some individuals for whom it would benefit additionally, to praliciguat.

Now the Akebia trial is in primary only. But in my opinion, I'd love to get Jonathan's thoughts on this, it's going to expand into secondary FSGS as well. And so where there's an issue where there is podocyte dysfunction, soluble guanylate cyclase signaling pathways, praliciguat is going to have an advantage to stabilize and reduce that proteinuria.

Yes, Jim, I completely agree. I think podocyte injury is common across glomerular diseases. And this mechanism of action, while primary FSGS is the obvious choice, I think there's opportunity here to expand beyond that initial indication. So I completely agree with you.

Thank you. The next question comes from the team at Leerink Partners. And also Matt Caufield from HCW had a similar question. Praliciguat is entering a shifting regulatory landscape in FSGS. What level of UPCR reduction do you believe is clinically meaningful for praliciguat to be competitive versus the current standard of care?

Great question. So we talked a little bit about that again in the lecture is the PARASOL data. And I really want to emphasize to the audience that the PARASOL data is very important, but data from Jonathan's registry, the RaDaR data and data going back to the Toronto registry with Dan Cattran several years, many years ago, all show to the same thing that if you reduce that proteinuria even by 50%, you benefit the long-term outcome of the patient. But to answer your question, the PARASOL data say you -- between 300 and 500. There's a bit of an argument among academic -- there was a mistake, you okay?

Yes. We're good.

Okay. Sorry, something came on. So getting that number between 300 and 500 may not be entirely possible for a lot of people that have had long-standing FSGS. There's a phenomenon called scar proteinuria and really quite simply, damaged kidneys can't reabsorb protein as well. And therefore, there can be a floor which you really can't get below it any further. But suffice it to say for the purposes of this discussion, between 300 and 500 would be optimal.

Great. Thank you. A few more questions back to AKB-097. Do you expect AKB-097 to be complementary to APRIL inhibitors in IgAN and other indications?

Dr. Barratt?

Yes. Thank you. I think it's ideally suited to be honest. I think the big challenge we're facing in IgA nephropathy is we have drugs that target antibody production. We have drugs that target complement activation systemically. And of course, knocking out a critical arm of the innate immune system while also suppressing a key component of the adaptive immune system does come with particular risk, particularly our ability to fight microbial pathogens.

And that may be appropriate for a short period of time. But as I said in my talk, when we're thinking about IgA nephropathy, we're thinking about a disease that affects 30-year-olds, 40-year-olds. If our goal is for them to avoid kidney failure in their lifetime, we're talking about treatment exposure over 40 or 50 years. And I would be concerned about impairing the adaptive immune system and antibody production while also taking out a key component of your innate immune system for 50 years.

So I think the opportunity here is if we specifically target sites of active complement activation at the tissue level while leaving systemic complement activity unchecked, then we have a much better safety profile to combine this approach with other immunomodulatory therapies. So I think this is an ideal approach to think about combining with other treatments and likely has the potential to have a safer profile over the longer term.

Let me jump in on that, Jon. I just could not possibly agree with Jonathan more. I think that the complement inhibitor with an APRIL-BAFF or APRIL antagonist alone is ideally additive. And now that with Dr. Holers' observations on localized activation of C3d, now we have a method. So on a repeat biopsy, we're going to be able to say that patient X, Y or Z has moved back into a complement-dependent form of the disease and therefore, would go with addition APRIL-BAFF antagonist for some period of time. I agree with Jonathan. I don't think it will be forever, but there will be periods of induction where you put the disease back under control and calm the inflammation.

That's very helpful.

Great. So for AKB-097, do you plan on pursuing parallel cohort expansion in the basket studies if you see early signals or remain disciplined to the current indications?

Steve first. I'd love to hear other opinions.

Yes, sure. We inherited a protocol from Q32 and decided the quickest way to get into the clinic was to go after the three indications that had been previously discussed with FDA. We certainly have the opportunity to add additional diseases to the basket trial. It's also important to note that if we see activity in one of the current diseases, we can then transition into a Phase II/III study for that indication, and we could add additional indications. The basket trial will continue to enroll and collect data while we transition to Phase II/III for one of the indications. So yes.

Great. All right. A few questions on AKB-9090. First, how does AKB-9090 differ from vadadustat? And why is tissue-targeted approach in 9090 expected to succeed while HIF inhibitors have historically struggled in AKI?

Yes, I can take that one. AKB-9090 obviously, is a different structure than vadadustat. Vadadustat is acted upon by organic anion transporters, so it is taken up by the liver and primarily acts in the liver. So for instance, the increase in erythropoietin that we see in patients with CKD, it's coming from the liver, not from the kidneys for the most part, whereas AKB-9090 is not acted upon by the OATs and so has much higher tissue penetration into the kidney itself. And we see very good target engagement in the kidney, even more so than in the liver.

So it's clearly different. It activates all of the right pathways, as I alluded to in my talk, activating cell survival pathways, decreasing inflammation affecting metabolism. So based on our data, I think it has a very good chance of working in a way that vadadustat would not. There's no clinical data showing that HIF-PHIs decrease acute kidney injury. That's why we're going to be the first one, hopefully, to show that this pathway is a tractable target in CS-AKI.

Great. What early human signals, biomarkers, AKI staging shifts would meaningfully derisk this program before a large outcome study?

Sure. The Phase I study is in volunteers. So we'll just be looking at target engagement, so measuring increases in erythropoietin production. The Phase IIa will look at things like cardiac surgery-associated AKI incidence, severity and duration as well as additional biomarkers. And based on that, we would then plan a Phase III study.

But we are also going to be looking at other organ complications of cardiac surgery. So it's not just a problem with the kidneys, patients end up -- well, they certainly end up in the ICU and then they have to get off vasopressors, off ventilators. They have a lot of cardiac complications. So we'll be looking at all of the complications associated with the surgery and coming up with a composite endpoint that captures the totality of the benefit of AKB-9090.

Thanks, Steve. A question came in from Allison Bratzel at Piper Sandler. This is back to praliciguat. Given the heterogeneity of FSGS, do you expect prali's mechanism to be effective across patient subtypes, primary and genetic FSGS? And how are you evaluating this in the P-II trial?

Go ahead, Jim.

Good question. Yes. So I think for the genetic, it depends on which one you're looking at. I don't foresee praliciguat being something that would be an add-on to the APOL1 pathways. There's two different ones being approached, which I said previously was an antisense knockout and then a small molecule inhibitor with the Vertex Corporation. I kind of don't see that happening there. But to the broader question, and Jonathan alluded to this, whenever you have podocyte damage, this pathway of reduction, guanylate cyclase activity becomes relevant. And so this is a downstream pathway that is a consequence of a variety of different injuries.

So the answer to your question is, yes, I see this being a broad application even if we don't have the ability to get to the point to be able to say that patient X has this etiology for their FSGS or patient Y, the other -- another etiology because there's a certain commonality through the guanylate cyclase pathway in the podocyte, I think praliciguat is going to have a broader application. It's smart.

And just to clarify, we -- for our trial that you're running, Jim, we're including primary and genetic, but we're excluding secondary FSGS, just to be clear.

I still think it may apply.

Thank you. Great. We received a question from Ed Arce at WestPark Capital. What specific results from the Phase II trial in DKD patients by Cyclerion are most encouraging in supporting -- the support of pursuing FSGS?

I'm sorry, I didn't quite catch all that. Could you repeat it for me, please?

Of course. What specific results from the Phase II trial in DKD patients by Cyclerion are most encouraging in support of pursuing FSGS?

Right. So the -- I would say the 30% reduction in proteinuria is, again, I'll just keep reemphasizing that even a 30% reduction is likely to benefit people long. Remember, that trial did not have terribly -- I don't remember the exact length of time, of follow-up and that reduction even at 30%, and I'm guessing that we're going to see better than that with FSGS is going to have the potential benefit for the patient. So that would be a way forward, I believe.

Yes. And I would say that, yes, the results look very similar to what sparsentan gives you, above and beyond irbesartan. And that's both in terms of proteinuria reduction, but also the proportion of patients who meet certain thresholds of proteinuria. That slide I showed you, I focused on the 0.5, but you see the 0.3, 0.7 grams per gram for the UACR, and that's very sparsentan-like. So that's certainly encouraging. Not the same disease as FSGS. They have much more proteinuria in FSGS. So it would be very interesting to see what we observe in that patient population.

Great. So as I'm looking at the question, Mercedes, they all seem fairly derivative of ones that we've already asked.

I think that's right. But anything else you want to share on that side?

Any final thoughts from any of our distinguished guests you want to share before we close out?

I mean I'd just like to say I really like the idea of tissue targeting complement for complement activation. And I think there is a potential that you will gain greater efficacy by delivering complement inhibition within 3-dimensional tissues. We know you can block systemic complement activity with systemic drugs. What we don't know is what is actually going on in a complex organ like the kidney, how are we able to block complement activation both within the glomeruli, but also within the tubulointerstitium.

And that's another thing I think we haven't touched on really is there's a lot of interest in the complement system driving interstitial scarring, which is common to every form of CKD. And so one of the beauties of this approach is this is an IgG4 antibody, which is eminently easy to stain for. And could we be seeing activity not only within the glomeruli in terms of calming down glomerular inflammation, but also within the tubulointerstitium and preventing local complement activation and progression of interstitial fibrosis, which is, to be honest, the major reason people end up on dialysis. And if that is the case, then you have a big job on your hands because this approach is then relevant to all forms of progressive kidney disease.

So that's why I think this is so exciting because it could be a viable chronic therapy, leaving systemic complement activity unchanged and reducing significantly that risk of infection. So yes, I think this is a really exciting approach. I can't wait to get my hands on it and to see how we biopsy these patients and see where this drug goes and see what it does, which I think will be fantastic and fascinating.

To add a little bit to what Jonathan was saying, even part of it is -- good comments on the IgG4 staining, just reducing low-level complement activation, we need to remember that C5a, a product of activation of the complement pathways is a very potent chemokine for chronic inflammatory cells such as macrophages and monocytes, which are then drawn into the kidney and contribute to the fibrosis that Jonathan had mentioned.

And one quick comment about praliciguat. I would like to go back to emphasize something I tried to point out in my talk that in fresolimumab, which was an antibody against all three forms of TGF-beta did not work in FSGS. And the fact that we're seeing this admittedly in a preclinical model that the downstream signaling pathways had better effect, I think, speaks to the potency and the potential, I should say, of praliciguat.

I would only add with regards to Dr. Barratt's comments that this is all being done in the context of active scientific exploration of local complement production, local complement control and all of the data that we're generating and others are generating really points to the observation that local complement activation is occurring. That is the primary cause of injury and you need to control it locally. And that is something that we're all learning more and more about, and we all look forward to seeing what happens in the Phase II studies.

I hope all the folks who are listening in on the call today are hearing the excitement from the panelists, and it's that excitement that we at Akebia felt as well as we looked at 097. We really do believe this can be a very important drug, and we're working very diligently to put it in your hands, Dr. Barratt, as quickly as we can.

So I want to thank our panelists today for their time and their very insightful comments. Hopefully, folks really benefited from that. I'm quite sure that they have. I think if we could put up the one final slide just to close out. Well, we have...

We're putting it up, John.

What's that?

We're putting it up.

Great. Thank you. Really just to close out to remind folks of all of the many catalysts that we have over the next 12-plus months here at Akebia. I mean everything under the backdrop of driving vadadustat, Vafseo to be standard of care in dialysis. Tremendous amount of work left to do there, but we're really pleased with the progress we're making. We're really pleased with the data that we're generating that suggests there's a real difference in managing anemia with Vafseo, vadadustat that will really benefit patients in the long run. And just to remind everyone on the call, that is a $1 billion market in the U.S. So we're excited about the progress we're making there.

But now we have so much more to think about and talk to you all about with the number of catalysts we have. We initiated the praliciguat trial in December. Thank you, Jim. We are going to be initiating the ebri 097 trial in the second half of this year. Obviously, the team is diligently working to do that as quickly as we possibly can. We have the Phase I trial for 9090 that's really just a few weeks away from dosing first in human, which is always an exciting moment for a company.

And then this building of the evidence that we talked about, the VOCAL top line data before the end of this year, the VOICE data in the beginning of '27. And given that we have an open-label basket study, we can start seeing data from 097 in 2027.

So we're really excited to continue to talk to you about this as we continue to execute as a company, and we look forward to it. And again, thank you again to our panelists for taking the time, and thanks for everyone for joining us today. We look forward to talking to you again soon.

Welcome, everybody, to the Leerink Partners Global Healthcare Conference. My name is Roanna Ruiz. I'm one of the senior biotech analysts here at Leerink. And it's my pleasure to host Akebia Therapeutics.

With me, I have CEO, John Butler; and CFO, Erik Ostrowski. So thanks so much for joining me today. I hope you're doing well.

Thanks for the invitation.

Yes. Great. So for people in the audience who might be new or visiting the story, I wanted to just ask you to walk us through the main focus areas for your overall capital allocation strategy, some of your top clinical and commercial goals for the next couple of years. Can you just frame like how is this year setting up?

Sure. So as a commercial company with a pipeline, we really thoughtful how we go about spending our money. But strategically, we have 3 key strategic areas. First is our commercial product, Vafseo, it's to drive that standard of care. So in addition to the commercial investments that we make there, we also have a number of Phase IV/IIIb type trials ongoing now also, which we think will generate the kind of data you need to become standard of care, and I'm sure we'll talk more about that.

Second is build on our commitment to kidney disease. We are very much a kidney disease company, and I see that continuing for the future. And that's building out our pipeline, first of all, AKB-097, 9090 in acute kidney injury. And then the third, which is by far the smallest bucket of spend is to build the future beyond kidney disease. And right now, that's things like the investigation of vadadustat in ARDS that we're doing with UT Health to really prove the mechanism, 10108 in retinopathy of prematurity, where we have tox work going on now, small investments, but potentially really meaningful business areas.

Yes. I hear you. That's interesting. And then maybe to dig into the lead commercial product, Vafseo, because that's where I got a lot of questions recently. So just thinking about targeting the dialysis segment and pursuing and also the fact that you pursued nondialysis for a little bit, too. Could you just talk about what's the value creation strategy for Vafseo going forward? Where do you see it going this year?

Yes. So Vafseo, which is our HIF-PH inhibitor for anemia in chronic kidney disease patients on dialysis. This is a product that, as I referenced before, we believe is going to become standard of care in the space. Now patients have been treated since 1990 with ESAs. And this is a whole new mechanism, a whole new way of driving red blood cell increases and managing anemia. We will -- you increase hemoglobins much more gradually. You have fewer excursions above target areas that physicians are looking at. You have fewer dose titrations. Generally, it's easier for physicians to use. But much more importantly is the data that's starting to become more clear now and is really building.

In November, we presented data at the ASN meeting, the large nephrology meeting that showed we did this Win-Odds analysis of our Phase III study, looking at mortality and hospitalization, 2 prospectively collected hardest endpoints that you have and looked at that, again, this Win-Odds analysis allows you to generate a lot more statistical power. Now it was a 3,500-patient trial. So it was a large trial. But with this analysis, you get over 3 million data points. And when you look at that data, you showed a statistically significant reduction in the risk of dying or being hospitalized with Vafseo. And those are the 2 outcomes that patients care about, physicians care about, dialysis providers care about. So that was just presented. It has been accepted by a top-tier nephrology journal. So we think that will be published very shortly. Then it gets in the hands of our medical folks who can go around and educate physicians on it.

Now just -- now this weekend, the weekend before the annual Dialysis Conference, we presented data. We took that data, did an economic analysis on the hospitalization, particularly. And so there was about an 8% decrease in hospitalization when you use Vafseo. The hospitalization decreases based on cardiovascular and infection-related hospitalizations, both clearly explained by the mechanism difference. Well, that 8% difference in hospitalization also had a 16% difference in length of hospitalization. So people got out sooner. And between them, that translated into about a 15% cost reduction when you use standard Medicare costs. So in other words, about $3,700 per patient per year.

And if you put all eligible patients who are treated with an ESA on to Vafseo, that would be about [ 1.9 billion ]. So this is the kind of data. We just presented this data, so we're working on the publication now. This is the kind of data that's building that says this is a drug that's going to become standard of care. And we're seeing more and more access to the product. It's dialysis. It always moves more slowly than I would like to see. We keep thinking it's going to move faster, but dialysis providers are like ocean liners. They move slowly. But we're really pleased with the momentum that we're seeing and most pleased with the data because the data at the end of the day is going to drive the adoption.

Yes. I agree. And then you highlighted, I think, in the past TIW dosing is a key lever to improve adherence. And how are you thinking about that broadly going into the dialysis organizations? And where do you see possible variability across different customers?

Yes. Yes. So the TIW dosing or observed dosing that we're calling it is -- now it's not in our label yet. I mean this is a conversation we're planning to have with the FDA. But QD dosing worked beautifully, like daily dosing worked beautifully. I think the thing that surprised me was you've been doing -- you've been giving someone a shot in the chair for the last 30 years. As soon as you saw had to send the drug home, there was a real concern about patient compliance and the like.

And so the idea that we had done studies knowing that being quite confident that the drug would work well in TIW dosing, and it does, that this would be an option for physicians to confirm that the patient is taking the drug. And I think this has really proven to be most important for the anemia managers, the nurses who have the day-to-day responsibility for managing the patients. So we've done study FOCUS, smaller one modify where we demonstrated that you could dose TIW. There's 2 studies ongoing now, VOICE and VOCAL, both using TIW dosing.

And Jeff Block, who's the physician running the VOICE trial. This is a collaborative trial. He's really the running the trial. He's the one who decided to move at U.S. Renal, move patients to TIW dosing and recommend that to the physicians at U.S. Renal. So by the end of the quarter, we expect they'll all be doing TIW dosing. And anecdotally, we hear from physicians, they still have to go through the titration phase. But once they get through that, the patient just maintains their hemoglobin really, really well. And with ESAs, you're constantly dabbling with the dose to keep them within a range.

And I would say never underestimate the power of making a busy nephrologists life easier and how much that means to them. But at the end of the day, the data we hope to generate from VOCAL and from VOICE, obviously, will be about more than just it's easier to use, right? You're really going to keep building on that evidence that this is -- this should be standard of care.

Yes. I hear you. And speaking of VOCAL and VOICE and just thinking about Vafseo going ahead. So there are a few different things happening. So thinking about the data from both those trials and also your TDAPA period also is going to expire. How do you think about the transition for that product going through that and then the data coming through as if all goes well, very positive results and then thinking about the trajectory going forward for Vafseo?

Yes. So we've always had the perspective of looking at the long haul here, right? We're in it for changing standard of care. The thing that we're so fortunate about with Vafseo versus other TDAPA products is that there's a meaningful amount of money within the dialysis bundle to treat anemia because almost every patient needs to be treated, 90-plus percent of patients need to be treated for anemia. So there's real money within that bundle. So we could take the long view.

I mean we always thought of TDAPA as a wonderful opportunity for the dialysis provider to -- in a no financial risk way. As a matter of fact, they make some money to use the product, and we could charge a higher price. So we could benefit for some number of years. But we always recognize that long term, we would need to be pricing around ESA pricing. Again, we try to keep it very simple. There's 2 years of TDAPA. After that, there's this payment that goes on for 3 more years. But that gets peanut buttered over every dialysis provider. The idea that you're going to get one to pay more for your drug, while the other one takes that money and puts it in their pocket, we just don't think that way. So we think about this is how we have to price in and around ESAs.

Now when you have data that supports that you're saving significant money, about half of dialysis patients are fully capitated for the dialysis provider. So saving that kind of money that you're going to get for basically free does give us some leverage in the negotiation. But 80% of dialysis patients are managed by 2 dialysis providers. So most of the leverage lands on their side. But we know what the pricing for ESAs is, and that's a price in this kind of $2,000 to $2,500 a year, that's something that Vafseo can be a very profitable product for Akebia.

And if we develop all of this data -- and the other thing to remember is TDAPA -- not every patient has TDAPA, right? So the day TDAPA ends, while the price comes down and comes down substantively from where we are, as we expected, your patient population grows to everyone is available. So as you build this data that supports that this is a different way to treat patients and the pricing is relatively consistent with the ESAs with all of this data that says you're saving money, the opportunity is there to become standard of care.

And just to reiterate that post TDAPA market opportunity is $1 billion at...

Yes. Thanks, Erik. That's exactly right.

Yes. Makes sense. And just to help frame it, I mean, how much do you think investors are used to thinking about this dynamic with TDAPA expiring, et cetera, versus your expectations? Like where do you see the Street being? And where do you think there might be a disconnect if there is one?

Yes. No, I think there is. I mean I don't know if it's a disconnect. It's just that there's so few TDAPA drugs, right? I mean you've got the DefenCath from CorMedix whose TDAPA is expiring in the middle of the year and us. You had KORSUVA, which, again, difficult because there was no money in the bundle. So how do you use that product. We're just really a unique product from that perspective. But the idea that it's a math equation as you think about 2027, right? How fast can you grow volume? Can you grow it enough to offset the revenue decline? And we've been really clear.

We don't think we can we think we can continue to grow volume. If you look at the volume slope, we expect that to sort of be a straight line. But revenue, you're going to have this divot of revenue. But again, between growing based on the data that's available and growing based on more patients being available for treatment, you ultimately gain our share. And we say standard of care in a $1 billion market is a $500-plus million product. I mean that's our belief about what the product can be.

Yes. Got it. Got it. Great. And since we're talking about VOCAL a little bit, I wanted to sort of double-click into that and think about -- so what would be a clinically and commercially meaningful result from VOCAL and especially because you're -- I think you're comparing to ESAs as well. So how are you thinking about like what's the bar or what would be a really great result?

So look, VOCAL is 350 patients. We're running that at DaVita centers, gives DaVita the opportunity -- we're the sponsor of that trial. So that's data that we can use for regulatory filing around TIW as well. If FDA wants it, it gives DaVita clinical experience with it. We've already proven that we're non-inferior. That's what you're looking for there, right, non-inferiority from a hemoglobin management standpoint.

The thing that's really interesting in VOCAL from my perspective is the substudy that we're doing with a small number of patients, about 30 patients that is looking at red blood cell characteristics. So this has been seen before, but this idea that you're talking to physicians, you're showing them this data, our Phase III, you were non-inferior, right? But now we're showing them this data with the Win-Odds analysis, and it's kind of a why. And the why is this differential mechanism. And one of the places where you can really demonstrate that there's a different -- this mechanism leads to a different way, this more physiologic way of managing anemia gives you a more physiologic red blood cell. And that's what we hope to show. And we've seen this in other studies, but not with dialysis patients.

But the idea that you have a red blood cell that's larger, that carries more oxygen that moves through the capillaries more clearly, all of these omics, metabolomics, et cetera, that we're going to be studying, I think this is going to be really interesting data for physicians. You have to give them a why. And you get in front of VOICE, which is the beginning of '27, where we'll see that -- in about a year from now, less than a year from now, I hope, we'll see that data. But you're showing them this is why you're seeing this clinical difference.

You're not just getting the same number of red blood cells, you're getting a better red blood cell. And we're going to follow up with a study that looks at red blood cell lifespan, right? Dialysis patients have a red cell lifespan that's about half what yours and mine is. And the idea that you're also extending that. And again, this has been seen some data out of China showed you -- almost double the lifespan of the red blood cells. So to show that again in U.S. dialysis patients, this is how you build that evidence that physicians say, yes, this is the drug that I need to use to manage anemia.

Yes. And tagging on to that, you're alluding to VOICE. So how are you thinking about the possible hospitalization and mortality endpoints coming out of that? And how could that influence real-world clinical practice?

Yes. Well, I mean, I think we're getting that now from the data that we presented at ASN. This was a post-hoc analysis, but it was very prospectively collected data, right? So it's not like just data mining. But this is basically the same endpoint. So fewer patients. So what I expect to see from VOICE is the same magnitude of difference, the same magnitude of difference in mortality, same magnitude of difference in hospitalization.

Now the things that led to hospitalization and MACE rate in the INNO2VATE trial were excursions above a hemoglobin of 12, which we -- always were better than an ESA. But the second was ESA rescue. So how often did the patient have to get an ESA rescue? Well, in the INNO2VATE trial, it was about the same between us and ESAs because you had that dip based on the way you were dosing in INNO2VATE. Now that doesn't exist anymore in the VOICE trial.

So in FOCUS, which was a TIW study, we had half the ESA rescue. So if you layer half the ESA rescue on top of the benefits around keeping people in the target range, et cetera, we don't know exactly. Obviously, you do the study to find out what the data says. But even if we see just the same magnitude, that's a huge win and a confirmation of what we saw in INNO2VATE when you put it along with all the other data that we've generated. So we'll all see in about a year.

Yes. Looking forward to the data.

Me too.

And I want to also have some time for your pipeline stuff as well. So I know you recently started talking more about AKB-097 and praliciguat. So maybe could you walk us through why you're excited about these programs? And what are the next drivers of growth?

Yes. So obviously, as a kidney company, you have to build a pipeline, rare kidney is an obvious place for us to go. It's an area of significant interest, but it's an area of significant unmet need still. And we did the deal to bring praliciguat in 2021 for a variety of reasons, including us having to work through the CRL and some issues that our partner had in getting us drug. We weren't able to start the Phase II until the end of last year. And so praliciguat, we're looking first in focal segmental glomerulosclerosis or FSGS. It is an area of high unmet need.

Praliciguat has been studied in diabetic kidney disease by Cyclerion. It clearly showed a reduction in proteinuria, but not enough for them to go into that larger market opportunity. We believe that the product could be very effective in FSGS. We did a number of animal studies. We're very, very pleased with the results we showed there. Then with the PARASOL, this kind of FDA academic partnership, looking at what should be the right outcome for -- or the right approvable endpoint for FSGS. Before that, we were looking for a disease that moved quickly, so you could show a difference quickly, but PARASOL kind of gives a much clearer pathway for us. And we took that DKD data just as a pressure check, right? And it was UACR, not UPCR, you have to do some data manipulation, but we felt quite confident in our ability to demonstrate a benefit here. And FSGS is such a heterogeneous disease.

There are going to be other products that are going to be approved there, which is great for patients. But we're going to see how treatment moves in the future as these products are available. I mean today, there's nothing available, right? But we think that, praliciguat will fit very, very well within treatment. And it's a unique mechanism of action. There's no one else developing a guat for FSGS. So we're excited about that. That's just started its Phase II, happy with how it's enrolling. We haven't really guided on timing for that yet until we see a little more -- get more confidence in the line of enrollment. 097, we brought in, in December from Q32 Bio.

We're incredibly excited about that. Erik and his team led that effort. I think that most of us looked at that and at first and said, oh my god, another complement inhibitor, oh my God, IgAN, how many drugs do we need in IgAN. And as we dug in, particularly talking to the KMEs, the medical opinion leaders, we got incredibly excited about it. And it's this tissue-targeted effect that makes it so interesting, right? I mean you've got an efficacy profile that's potentially as good as the best complement inhibitor out there, kind of the same pathway, which would be like an EMPAVELI. The difference being, because it's this fusion molecule, it gets directly to the tissue of where complement is being produced, gets out of the bloodstream quickly.

The 2 benefits of that are, a, since it gets out of the bloodstream, you should be able to avoid the box warning for infections that you see with most complement inhibitors like EMPAVELI. And two, since you're going to the tissue of damage, you can use a much lower dose. So EMPAVELI, I think, has to do about 1 gram infusion twice a week. We're starting our basket study, which we're going to be starting shortly or second half of the year. We're using 450 milligrams. I think it is once a week as an infusion.

We think maybe it can be even a lower dose than that or a less frequent dose than that, ultimately getting it to an auto-injector, which would be phenomenal. So efficacy consistent with the best-in-class with an improved safety profile and a more convenient dosing regimen. I mean that's a best-in-class potential drug. So basket study in IgAN, lupus nephritis and C3G will start as early as we can in the second half of the year. Because it's an open-label basket study, we expect to start generating data in '27.

Okay. Great. And on the topic of the basket study, I do get some questions about -- so you're testing different indications and moving them all forward in parallel. How would you prioritize these indications? And what are you looking for to help you figure out which is the one to go forward with down the road?

That's a great question. So first and foremost, we are just looking to get as many of each as we can. And there are other indications. We may add indications to the basket as we go. But IgAN is the largest opportunity. So it may be the one where we see data first. And I think for everyone, we want to see that efficacy data first, right? So it's less about what are we prioritizing to go forward with and more initially and more about show me the data, right? So let's see confirmation about kind of how excited we are, what was seen in Phase I where it gets right to the tissue.

So IgAN may well be the first. C3G is such a rare disease, only a few thousand patients. I'm very excited about the opportunity in lupus. There's -- it's a less crowded space. And I was just talking to a couple of physicians here this past week down here in Miami, and they were talking about having 30-year-old women who was starting dialysis from lupus and looking for any opportunity to impact that disease. So this would really be a great one. But we'll do the work now to understand, even IgAN where you say, well, goodness gracious, there's so many IgAN drugs, which is my initial reaction.

When you think about the APRILs and BAFFs and what you're doing to people's immune systems for decades, the idea of having a targeted complement inhibitor that you can manage disease early and kind of reduce the amount of time on an APRIL or APRIL, BAFF. And I think that some of these treatment paradigms, we're going to learn about as this data comes forward. So where I thought, well, that's not really such an interesting area. The uniqueness of this compound of 097, I think could lend it to be a very, very important product in treating IgAN even with it being as crowded as it is. We just have to see the data.

Yes. I agree. I'm going to give John a break and maybe ask Erik a question.

I never need a break anyhow.

So just keep going. But Erik, I wanted to also throw a question to you. How are you thinking about just for Vafseo and the commercial products in the portfolio, like any sort of metrics like financially that you're thinking about watching that could indicate good execution going forward to investors? And there's a lot going on in R&D and commercially. How are you thinking about prioritizing these things?

Yes. Yes. No, great question. So yes, on the metrics for Vafseo, John kind of alluded to some of them earlier, we're looking to increase that breadth and the depth, right, of the prescribing. So more prescribers prescribing more. I think the adherence rates are also really important to keep an eye on, and we talked about we're seeing those improve under the TIW dosing [indiscernible]. I think that's important as well.

Yes, from a capital perspective, I think we're taking a really balanced view, right? We want to continue to support the Vafseo launch. It's incredibly important to us, continue to generate -- to support that data that John has talked about. Though, we really believe this can become standard of care again in $1 billion market. And then at the same time, continue to bring this really exciting pipeline, which we think has the potential for a lot of value creation for shareholders for longer term.

Yes. Great. And I think in the last minute that we have, I'll zoom out again and a bigger picture question for you guys in terms of what do you think the market still underappreciates about the Akebia story? What are things that we should be thinking about going forward?

Yes. I think that clearly, dialysis reimbursement is complicated, and there are investors that don't -- it just becomes like peanuts, can we really understand what this is? And we do try to simplify with Vafseo that -- I mean, yes, we have this TDAPA, and we're enjoying a higher price now for a couple of years. But our market is unlike any other TDAPA drug in that there's dollars there for use. And we've known that from the beginning.

I mean, look, I wish it was $5,000 a year, which it was when I started -- when we started the Phase III study. But at $2,000, $2,500, particularly when you're demonstrating the savings that we're showing, the opportunity to be standard of care in $1 billion market, standard of care is 50% plus 1. We think we can be much better than that, right? And that's -- this is a small molecule. I mean this is -- we have an opportunity for this to be a very, very successful product. And I think people need to see the consistency of that launch growth, got out of the shoots very quickly.

And because of these things like adherence and the complexity of these big dialysis organizations, it flattened out from a demand perspective, which surprised us. But we're seeing growth again. We're clearly seeing growth again. And we're seeing it beyond just U.S. Renal. We're seeing DCI, IRC, some of the kind of the fourth and fifth largest are now using the product. And DaVita is starting to move. And eventually, we're going to get Fresenius too. So that opportunity is there.

Once you see that revenue growth, you have to start to appreciate the pipeline that we have. I understand that people can't spend a lot of time on that until they feel confident that the thing that's going to fund it is there. But I think we're doing an R&D Day, shameless plug, on April 2. And we have some outside KMEs, who are going to speak at that. It'll be virtual. And I think people will have the opportunity to really get excited about this pipeline.

Okay. Great. Looking forward to it. And so with that, I think we're out of time. But thanks again, John and Erik for joining us and covered a lot of great ground and looking forward to more updates.

Thanks, Roanna. Thanks for the invitation. Appreciate it.

Good day, and thank you for standing by. Welcome to Akebia's Fourth Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Mercedes Carrasco, Senior Director of IR. Please go ahead.

Thank you, and welcome to Akebia's Fourth Quarter and Full Year 2025 Financial Results and Business Update Conference Call.

Please note that a press release was issued earlier today, Thursday, February 26, detailing our fourth quarter and full year 2025 financial results, 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 after we conclude.

Joining me for today's call, we have John Butler, Chief Executive Officer; Nick Grund, Chief Commercial Officer; and Erik Ostrowski, Chief Financial and Chief Business Officer. Dr. Steven Burke, our Chief Medical Officer and Head of Research and Development, is available for Q&A dialing in from the Annual Dialysis Conference in Kansas City today, where Akebia will present data on Vafseo this weekend.

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 financial results press release that we issued on February 26 as well in the Risk Factors and Management Discussion and Analysis section of our most recent annual report filed with the SEC.

With that, I'd like to introduce our CEO, John Butler.

Thanks, Mercedes, and thanks to all of you for joining us this morning. 2025 was an important year for Akebia, marked by the commercial launch of Vafseo, vadadustat, our oral HIF-PH inhibitor for the treatment of anemia due to chronic kidney disease for patients on dialysis. Vafseo, along with our phosphate binder Auryxia, generated $227 million in net product revenue in 2025, during which time we also progressed multiple post-marketing clinical trials and advanced and enhanced our growing pipeline.

Let's start with Vafseo. 2025 got off to a very fast start before a number of challenges flattened demand in the second half of the year. We addressed those challenges head on, and we believe today, we're starting to see the demand growth that we've expected. Most importantly, the body of evidence is growing that supports the potential for Vafseo to become standard of care in what is a $1 billion U.S. market opportunity after the TDAPA period ends when we expect Vafseo will be priced roughly in parity with ESA pricing.

While we didn't see the growth we expected in the second half of 2025, we built real excitement for Vafseo. Today, just over a year into the launch, more than 1,000 prescribers at 24 different dialysis organizations have written a prescription for Vafseo and 290,000 patients have access to Vafseo in dialysis clinics with a protocol in place.

I'm particularly encouraged by the shifting dynamics we began to see in Q4 that are continuing in Q1 that suggest greater breadth of prescribers as well as improving adherence rates. Nick will provide more detail on these very encouraging trends in his remarks.

Now a key element of our strategy to have Vafseo become standard of care includes continuing to generate data supporting the benefits of managing anemia with a more physiologic approach compared to ESAs. At the ASN meeting in November, we presented a post-hoc hierarchical composite endpoint analysis of prospectively collected outcomes of death and hospitalization from our Phase III INNO2VATE program in dialysis. This analysis demonstrated that patients treated with Vafseo experienced a lower risk of dying or being hospitalized than patients treated with the ESA comparator.

This coming weekend at the ADC in Kansas City, we're presenting a cost comparison of Vafseo versus darbepoetin based on INNO2VATE data. In this analysis, Vafseo showed a 7.7% lower annual hospitalization rate, 16% reduction in hospitalization days and based on Medicare cost data, approximately 15% lower Medicare hospitalization costs for patients treated with Vafseo versus darbepoetin.

Reduced hospitalization translated into a cost savings of about $3,700 per patient per year, meaning a savings of almost $2 billion per year if all eligible patients were treated with Vafseo. These results are meaningful for dialysis providers, Medicare and other payers and, most importantly, for patients. Late this year, we'll have the results from the VOCAL study that we're conducting at DaVita clinics that's evaluating Vafseo's dose 3 times weekly. The trial also contains a substudy of red blood cell characteristics, which we believe could make a compelling argument for Vafseo.

Fundamentally, when you manage hemoglobin levels with a more physiologic approach, you get a more physiologic and potentially better functioning red blood cell. The VOCAL data will be followed by results from the VOICE trial being run by USRC, evaluating Vafseo versus standard of care on a hierarchical composite of all-cause mortality and hospitalization rates, data expected in early 2027.

In my experience, in order to make a drug standard of care, particularly with nephrologists, you have to continue to deliver data that demonstrates the benefit of the product for their patients versus current treatment.

Now in addition to the launch of Vafseo in 2025, we introduced our rare kidney disease pipeline, which we believe will be an additional and important value driver for the company going forward. Strategically, this initiative is a natural extension for us as it leverages our expertise in kidney disease drug development, broadens our presence within the kidney disease community and fits squarely within our corporate mission.

We will host an R&D Day for investors on April 2 to discuss our mid-stage assets in detail, namely praliciguat and AKB-097 as well as introduce our early HIF-PHI AKB-9090. Praliciguat is an oral once-daily soluble guanylate cyclase stimulator being evaluated in a Phase II clinical trial of focal segmental glomerulosclerosis or FSGS. We expect to enroll up to approximately 60 patients in this trial, which will evaluate change from baseline in urine protein to creatinine ratio, or UPCR, at 24 weeks as the primary endpoint. Both the extensive preclinical work in FSGS disease models as well as previous clinical results praliciguat in diabetic kidney disease give us confidence in the potential for the therapy to impact FSGS.

AKB-097 is our tissue-targeted complement inhibitor that we acquired late last year. We believe this product candidate could have comparable efficacy to the most efficacious currently approved products in a well-characterized pathway. While the tissue targeting allows for the potential to: first, avoid the box warning for infection risk; and second, to deliver the drug in a more convenient dosing regimen. We believe this has best-in-class potential.

We plan to initiate a Phase II open-label basket trial in the second half of this year. We will be looking at initial indications of IgA nephropathy, lupus nephritis and C3 glomerulopathy. These diseases represent a multibillion-dollar market opportunity in areas of high unmet need.

As part of the basket study, we'll be evaluating safety, tolerability, pharmacokinetics, pharmacodynamics and effects on disease-relevant biomarkers such as proteinuria and kidney function. As this is an open-label basket study, we expect to begin to report initial data in 2027.

And lastly, we plan to initiate a Phase I study in healthy volunteers of AKB-9090 in the first half of 2026 with top-line results later this year. Our initial target disease area for 9090 is acute kidney injury associated with cardiac surgery. Our research and development team is working hard to deliver these important catalysts as quickly as possible. But of course, all of this work will be built on the success of Vafseo.

Now let me turn it over to Nick to give more granularity on the launch.

Thanks, John. Good morning, folks. Like John, I'm encouraged by the growth potential for Vafseo in 2026, which is supported by early Q1 data. But first, let me recap the quarter 4 2025.

During the quarter, approximately 800 prescribers wrote a prescription for Vafseo, and each prescriber on average wrote approximately 10.3 prescriptions. Of note, 128 of those were new prescribers. During quarter 4, we were pleased to see our customer base expand and the number of new starts at dialysis organizations outside of USRC, specifically at DaVita and IRC, increased over Q3.

Approximately 25% of new patients came from dialysis organizations other than USRC during the fourth quarter. That said, Vafseo demand in quarter 4 was slightly down versus quarter 3 as we reported $6.2 million in Vafseo net product revenue on about $11 million in demand. We believe the slight decrease in demand, specifically in quarter 4, was primarily a result of a lower number of patient starts at dialysis organizations deciding to transition to an observed in-center dosing protocol and thereby waiting until the observed dosing protocol was available.

USRC, for example, began to transition in November in approximately 25% of clinics. By the end of Q1, we expect the vast majority of USRC in-center patients to be receiving Vafseo 3 times a week while receiving dialysis utilizing USRC's observed dosing protocol. Of note, USRC's decision to transition to an in-center observed dosing protocol did result in a reduction in their inventory as they shifted from shipping a bottle to a patient's home to stocking bottles at their centers. The distribution change resulted in a onetime inventory drawdown impact of about $4.8 million in the fourth quarter of 2025.

Now let's turn to 2026. We begin the year on an optimistic note as we are already building momentum. At present, 290,000 patients have prescribing access as DCI has implemented a Vafseo protocol. With the almost fivefold increase in prescriber access since the end of Q3 2025 and our field teams actively calling on physicians with expanded access, we are seeing an expansion of brand awareness and a comfort prescribing Vafseo within the nephrology community. Additional commercial trends give us confidence in quarter 1 and the year ahead.

First, we saw improved adherence from the beginning of 2025 through the end of the year and continuing into 2026. More importantly, the percentage of patients who got an initial refill rose from approximately 75% for all daily dosing patients in the first 9 months of 2025 to approximately 91% among the small subset of patients who were on observed dosing regimen. Looking at early patient data from January, we've continued to see an improvement in first refill adherence with approximately 87% among the now larger subset of patients on an observed dosing regimen. We're encouraged by this improvement, and we'll continue to monitor adherence rates in 2026 as centers implement their observed dosing protocols.

Second, we are also seeing a nice pickup in utilization and broader adoption from IRC, the fourth largest dialysis center, after IRC Vafseo available in late August and implemented an observed dosing protocol late in quarter 4. In addition, ECI has started to put patients on therapy. We also see the number of prescribers within DaVita starting to increase with some physicians trialing Vafseo in their patients. This has led to a higher percentage of new patients being from non-USRC clinics than in 2025. The investment dialysis organizations continue to making Vafseo, taking the time and effort to integrate the therapy into protocols and care plans make me believe that providers and prescribers understand the clinical benefit Vafseo can deliver and are committed to using it long term.

As prescribers continue to gain real-world experience as they transition patients on to Vafseo, I expect the momentum to continue to build. Our dedicated sales team is focused on increasing the breadth and depth of prescribing, a critical step to becoming standard of care for patients on dialysis.

Let me now turn it over to Erik.

Thanks, Nick. As John mentioned, we saw strong top line performance in calendar year '25 as net product revenues increased nearly 50% over calendar year '24, driven by the U.S. introduction of Vafseo and increased sales of Auryxia. Our continued careful expense management in 2025 allowed us to both invest in R&D initiatives we believe can generate significant shareholder value and maintain our solid financial position. We are excited for a strong 2026 and executing on our plans to grow Vafseo revenues and advance our pipeline, including our mid-stage rare kidney disease programs.

I'll now provide an overview of our Q4 '25 and calendar year '25 financial results as compared to the prior year. Total revenues were $57.6 million in Q4 '25 compared to $46.5 million in Q4 '24 and $236.2 million in calendar year '25 compared to $160.2 million in calendar year '24. These increases were driven by sales of Vafseo and an increase in Auryxia sales.

Vafseo net product revenues were $6.2 million in Q4 '25 and $45.8 million in calendar year '25. As Nick mentioned, Q4 Vafseo sales were negatively impacted by the inventory drawdown at USRC.

Auryxia net product revenues were $48.1 million in Q4 '25 compared to $44.4 million in Q4 '24 and $181.5 million in calendar year '25 compared to $152.2 million in calendar year '24. We note that we anticipate generic competition for Auryxia to expand this year beyond the current authorized generic competition and therefore, expect Auryxia revenues to decrease in 2026 as compared to 2025 Auryxia revenues.

Turning to expenses. Cost of goods sold was $12.5 million in Q4 '25 compared to $20.4 million in Q4 '24 and $39.5 million in calendar year '25 compared to $63.2 million in calendar year '24. COGS in both periods was driven by higher Auryxia sales volumes in 2025 and was impacted by the elimination in 2025 of a quarterly $9 million noncash intangible amortization charge we incurred through Q4 of 2024. In addition, COGS for calendar year '24 included a $12.3 million benefit due to our ability to sell inventory previously written down as excess inventory. Of note, Vafseo-related COGS in both periods of 2025 was derived from prelaunch inventory, which does not include the full cost of manufacturing as a portion of those inventory-related expenses were recorded as R&D expenses in the period incurred prior to Vafseo's approval in the U.S.

R&D expenses were $26.6 million in Q4 '25 compared to $11.8 million in Q4 '24 and $62.4 million in calendar year '25 compared to $37.7 million in calendar year '24. The increase in expenses in both periods was driven by increased clinical trial-related activities for Vafseo and our other product candidates, higher headcount-related costs as well as by a $12.8 million charge incurred during Q4 '25 related to acquired in-process R&D costs associated with the acquisition of AKB-097.

SG&A expenses were $26.1 million in Q4 '25 compared to $27.7 million in Q4 '24 and $107.5 million in calendar year '25 compared to $106.5 million in calendar year '24. Net loss in Q4 '25 decreased to $12.2 million as compared to a net loss of $22.8 million in Q4 '24. Net loss for the year also decreased to $5.3 million in calendar year '25 as compared to a net loss of $69.4 million in calendar year '24. The decrease in net loss in both periods was driven by the increase in net product revenues, which was partially offset by higher expenses.

Turning to the balance sheet. Cash and cash equivalents as of December 31, 2025, were $184.8 million as compared to $51.9 million as of December 31, 2024. We believe our existing cash resources and cash from operations will be sufficient to fund our current operating plans for at least the next 2 years.

With that, we welcome questions.

[Operator Instructions] Our first question comes from the line of Julian Harrison of BTIG.

I have a few, and I'll just go one by one here. First, can you talk more about your expectations for sequential Vafseo growth in 2026? Wondering also how we should be thinking about that in relation to your inventory adjusted demand in the fourth quarter of 2025.

Second, to what extent do you expect data from the VOICE study to potentially accelerate uptake next year across dialysis providers? And then finally, I'm curious how operationalized the Vafseo access at DaVita currently is? Are the VOCAL data a big gating step there? Or do you expect broad commercial uptake at DaVita before the VOCAL data are reported?

Great. That's a great list, Julian. Thanks. So expectations for growth first in Vafseo. So we're not guiding for revenue. So I'll start with that. I mean I think it's -- again, when you're in a launch, particularly in this dialysis market, as you saw last year, we certainly -- I certainly expected, a, that dialysis providers would latch on to the opportunities around TDAPA more quickly, and we certainly didn't anticipate the issues we had with adherence, but we're certainly dealing with those, as I said, very much head on.

But I think the way to think about it is kind of forget the inventory fluctuations. We give you the demand number and really think about that, right? I mean demand basically has been flat. We had $12 million in the third quarter, $11 million in the fourth quarter, and it was actually $12 million in the second quarter as well, right? So we absolutely expect and are seeing growth from that level. We don't know exactly how quickly that will increase.

I think people are kind of looking for this sort of magical hockey stick. And when I think about launches that I've been a part of in this market that didn't have the complexity of the dialysis provider in between, I mean I go way back in time to sevelamer or Renagel launch, we did $20 million in the first year, $55 million in the second year, $130 million or something in the third year. Ultimately, it was a $1.3 billion product, right? But nephrologists don't adopt products like oncologists, right? And you definitely have a more measured growth.

And I think that's what we're seeing here as well, particularly, I think as you look at DaVita, where DaVita has made the product available but aren't sending out lists to physicians of patients that have reimbursement. They're leaving it to the physician to make the decision. That's fine. That's on our field teams to sell and educate physicians about the benefits. And it's things like the data from VOICE. So you look at the data from the ASN meeting last year, it's super important data, right? We'll make a huge impact, but it's not published yet, right? So it's been submitted for publication. It's just been presented at ASN.

Our medical affairs folks can't educate physicians with that data until there's a reprint in publication, peer-reviewed, which we expect is going to happen this year. But then the same thing will be the case with the cost analysis that's being presented this weekend. We have to get those things published. And I think you'll see the same with VOICE and VOCAL as well. As these things are published available and our sales and medical affairs folks can use them, these are the things that influence utilization and physicians. And I've never been more confident that the data that we're generating supports that managing anemia with a HIF-PHI and the only one that's available is Vafseo is going to be standard of care for this patient population. It really is just a question of how quickly that happens.

And we're seeing growth now. We're confident in that growth, but we're not in a place where we want to guide around that. We want to see it continue to move in the direction that it's moving now. And maybe, Nick, you can talk more about operationalizing at DaVita?

Yes. And so certainly, DaVita made the product widely available throughout their "village" in late Q4. And as they've started to focus on educating their physicians, they're really starting with the home dialysis population. That population within DaVita is greater than 30,000 patients. So just about the size of USRC. And so that's a great step. It really fits with USRC in total. It really fits well within the profile of Vafseo. So super excited about that.

Second, they're also really contemplating an observed dosing protocol, which will certainly hopefully handle some of the adherence challenges that we've seen in the past. And so -- but DaVita is not going to, as John suggested, send out lists and compel physicians to try it. It's our field teams, whether that be medical, educating them about Vafseo or sales selling Vaio that are really going to help physicians try and then increase usage and then ultimately adopt Vafseo as a standard of care.

And so when we think about that process, DaVita is a fairly big organization, getting them to try, and we're very encouraged. In the quarter 4, we saw a number of DaVita physicians starting to utilize Vafseo, and that's continued into quarter 1. And so as John suggested, we're not going to see this hockey stick inflection. It is going to be steady growth month-over-month, quarter-over-quarter as we start to penetrate deeper in terms of breadth and depth.

I mean it definitely depends on how you define a hockey stick, right? 3 quarters of flat sales, it will be -- you will have growth. So that's -- you can call that a hockey stick. We do expect that to continue to grow. It really is about what's the slope of that curve, right? And again, I think as I said, one of the things that surprised me most was that it didn't happen faster because of the economic benefits of using the drug during TDAPA. But at the end of the day, it was always about the clinical benefit. And that's what we're showing now.

And Nick talked about the observed dosing protocols that are being put in place. We really do think by the end of the year, most patients who are being treated in center are going to be treated with that observed dosing and that observed dosing means they get it 3 times a week when they're sitting in the chair. That helps greatly with compliance. And the anecdotes that we're hearing from physicians that have begun utilizing 3 times weekly dosing are -- and more importantly, maybe the anemia managers that are managing those patients on a daily basis, they're really very, very positive. So we're really excited that DaVita is moving forward with that as well.

And if they focus in the first part of the year on their home population, that will be fantastic for us from a growth perspective. Hopefully, that helps, Julian.

Our next question comes from the line of Roger Song of Jefferies.

Congrats on the progress. This is [ Nabil ] on for Roger. It's encouraging to hear about the improvement in the first refill adherence. I was curious if you could comment on how second and third refill rates are trending. And then any other comments just on the anemia manager education? And then I have a second one.

Nick, do you want to take that one?

Yes. And so super -- let's kind of repeat the first refill because I think it is significant. So historically, we've seen roughly a 75% adherence on the first refill. So a patient receives an initial prescription, that first refill is the next prescription. And so that moving from 75% to 91% in the fourth quarter in that small subset of patients was really an important, I'll call it, bellwether for what we're going to see moving on.

We were waiting for the bigger subset in quarter 1 and specifically in January to say, okay, now is it really coming to fruition in a larger patient population? And it is. We're seeing this 87% first refill rate. As they moved into the second prescription, I think your question is a really good one. We've seen a significant continuation of that adherence rate. And so you have to remember, these patients have significant comorbidities, co-mortality, they receive transplant. There's always an underlying, let's call it, 2% to 4% discontinuation rate in that population every single month. And so we've seen this continuation of this high 80%, 90% adherence rate even through the second prescription is starting to lead towards some positive trends for annual adherence rates.

And the other thing you're going to see, as the clinical data continues to build, even if a patient -- one of the main reasons that a patient would go off is if they feel like they have some GI tolerability issues. But we know those are transient, right? And what we've seen from physicians who really believe in the clinical benefit, they talk to the patient and say, I understand what you're dealing with, but we put you on this medicine for a reason. We really believe this is going to benefit you. I want you to try to work through it and it will go away, and it does.

And then there's other physicians or nurse managers who aren't as sole on the drug, maybe it's a way to say it or don't have the same level of education on the product benefits. And they'll acquiescent and take the patient off, right? So Nick, do you want to add something?

Yes. The only thing I'd probably add is by people moving from daily dosing to observed therapy in the clinic, what we've seen is a number of restarts of patients, patients coming back in. That means that physicians are saying, "Hey, that patient who may not have been compliant the first time around by being able to give it to them in the chair, we now can go back to that patient because we believe in the value that Vafseo might bring and by being able to dose it in the clinic 3 times a week has allowed them to offset that compliance challenge and really provide Vafseo for that patient.

Nabil, you had a question. I'm sorry, I didn't write it down. I can't remember what it is.

Yes. Just on the 9090 asset, again, congrats on the progress here. Just curious how that's -- if you can comment a little bit more on how that's mechanistically differentiated from prior SPHs? And then any other thoughts there?

On 9090, Steve, you want -- can you take that one?

The molecule has a different pharmacokinetics and a slightly different profile. Vadadustat tends to preferentially target the liver. That's where the erythropoietin is made, whereas 9090, because of its structural differences, has more widespread tissue penetration, so it gets into the lung and the kidney. And in our nonclinical models of ischemia reperfusion injury, 9090 was clearly the best compound that we had for that indication, whereas vadadustat probably would not work in that indication. So it's all about the structure and the PK.

Nabil, I think your other question was around anemia manager education. And I think it's maybe important to point out, we definitely recognize how significant that is. And a lot of that education has to be done through the medical affairs folks, our MSLs. We made the decision earlier this year to expand our medical affairs group, so that we have more folks feet on the ground, if you will, doing that education. So much of this data that's coming out really needs to be delivered, whether it's to a physician, KME or an anemia manager through the medical function rather than the sales function. So we're still finalizing the last couple of positions there, but those folks have kind of hit the ground running and really ramping up our education. Nick, do you want to add something?

It's great to see that the dialysis organizations are actually participating in that education, right? So USRC, we've had great advocacy from Dr. Dittrich and Dr. Block all along, and they've been educating proactively. Within DaVita, they have a centralized anemia management model. So those folks aren't necessarily in the clinic, and they've been educating their centralized anemia managers themselves, which also is a great step for getting folks comfortable with Vafseo.

And our next question comes from the line of Roanna Ruiz of Leerink Partners.

This is Michael on for Roanna Ruiz at Leerink Partners. For Vocal study, can you give us a sense of what success looks like? Is this primarily about demonstrating TIW non-inferiority versus ESAs? Or are you powering for superiority on any endpoint? Also, how important is the RBC sub-study in differentiating Vafseo's mechanism?

Steve, do you want to take that one?

Sure. Yes. No, you're right about the study. It's 350 patients. DaVita felt it was important for them to do the study in their own units, partly to operationalize it, but also establish that the drug is as safe and effective as the ESAs, Mircera that they're using today. I suspect we'll see superiority on some of the hemoglobin-related safety endpoints, which we saw in the FOCUS study. So less rapid rises, less high hemoglobins and less need for dose adjustments. But it's not -- that's all prespecified, but it's not like it's a primary endpoint.

The primary endpoint is non-inferiority for hemoglobin control, which makes sense because you're targeting people to a range of hemoglobin [indiscernible]. I do think the red blood cell study will be interesting and important because I think there may be some people who aren't really as close to this don't understand how different Vafseo is from ESAs, where ESAs, you're basically giving a recombinant human EPO, it binds to receptor on cells in the bone marrow and helps them differentiate into red blood cells. But Vafseo does so many more things. And we already know that the red blood cells that are made under the influence of Vafseo are different. They're bigger. They have more hemoglobin. They have a more uniform distribution of width. So this additional information, I think, will build on what we know to be true today that the red blood cells really are different. So I think it gives physicians a reason to believe that Vafseo is different.

And then when we have data around things like death and hospitalization, it makes more sense to them. There's a mechanism by which they can understand these clinical benefits.

Got it. Another question, if I may. Have you reactivated the IND for AKB-097 yet? And are there any changes you made to the protocol from Q32 that was previously aligned with FDA?

That's a great question. We have been reworking the protocol just to make it simpler. But fundamentally, it's the same protocol that FDA agreed to with Q32. We're just trying to make it less operationally complex so that it's easier to recruit and easier to run. And we won't activate that IND until we resubmit the protocol that we're very close to finalizing. So I hope that answered your question.

Our next question comes from the line of Allison Bratzel of Piper Sandler.

This is Ashley on for Allison Bratzel of Piper Sandler. Just one question from us because you guys did a great job of answering our other questions. But just on the R&D Day on April 2, when you're discussing your pipeline, can you help frame some expectations for investors? What should investors look forward to? What level of detail are you planning to provide? Any color there would be super helpful.

Sure, Ashley. So obviously, we're still bringing together the agenda for that. As I said, I mean, we really will focus -- there's so much that we could talk about. And that's kind of the exciting thing for the company right now. There are so many areas we can go. But I think we really want to focus on praliciguat and 097. And we think it's important that you hear from other people other than Akebia employees. I mean you'll hear from Akebia employees, but we really want to bring in KMEs to talk about -- when we think about the process we went through to make the decision to in-license 097, Steve always kind of says when Erik brought this forward, it was like, oh, another complement inhibitor, do we really need this? And it was really talking to KMEs, one of whom we expect you'll be able to hear at the R&D Day that this concept of a next-generation complement inhibitor really -- I think those are the words that were used.

And so hearing the excitement around that product from people other than Akebia employees, I think, is important. And it will give us the opportunity. We haven't had the opportunity to kind of go into depth on the data that underlies the decisions we made, the data -- the preclinical data on praliciguat, for instance, that gave us confidence in moving forward in FSGS. And then it was exciting to get a question on 9090 on this call. But we -- this is the first product we're putting in the clinic from our own discovery efforts, small but mighty discovery efforts at Akebia and kind of introducing that product and answering questions like Nabil asked about what differentiates it from vadadustat.

So we think it will be a very robust day. I mean it's kind of thing you can spend 6 hours on, but we'll do it in a much more streamlined fashion. But I think it will -- right now, we just introduced this rare kidney pipeline in December. And I don't think people really have had the opportunity to focus on it because quite rightly, they're focusing on the Vafseo launch. We're really happy with how the Vafseo launch is going. We think that will continue to deliver for the company and be the financial driver for continuing to build the pipeline. But now people will be able to really understand what we've got and why we're so excited about not just the rare kidney pipeline, but our capabilities in expanding that HIF pipeline as well.

I'm showing no further questions at this time. I'll now turn it back to John Butler for closing remarks.

Great. Thank you, Marvin. I do want to take a moment again to outline the catalyst-rich next 12 months that we have at Akebia. In addition to watching our progress towards standard of care for Vafseo in the $1 billion dialysis market, we'll see Vafseo top-line data from VOCAL in Q4 and VOICE in Q1 of '27. We'll initiate the 097 basket study in the second half and expect to see the first data in 2027, and we'll begin and complete the Phase I study of AKB-9090 during the course of this year as well as continuing to enroll praliciguat Phase II in FSGS.

We are very excited about the present and future for Akebia. We're eager to share more about our pipeline programs at our R&D Day on April 2, and I look forward to speaking to you then. Have a great day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Thanks so much, everyone, again, for joining us for the second day of our Guggenheim Emerging Outlook: Biotech Summit. I'm Vamil Divan, one of the Biopharma Analysts here at Guggenheim.

Next up in this room, we have the Akebia Therapeutics team. Next to me, we have John Butler, the CEO; Steve Burke, the CMO; and then Erik Ostrowski, the CFO and CBO at the end of the stage. So thanks so much for making the trip and joining us at our conference.

Maybe just to kick things off, John, for those less familiar with the Akebia story, as stories have evolved a little bit over the last couple of years. Maybe just an overview on how -- where things stand with the company, then we'll dive into the programs.

It sounds good. First, Vamil, thanks so much for the invitation to be here. It really is a pleasure. So Akebia is a purpose-driven company, and our purpose is to better the lives of people impacted by kidney disease. We have 2 commercial products: Auryxia, which is the phosphate binder, which we have been enjoying the revenue stream from Auryxia as it nears the end of its life. We're obviously most excited, and I think we'll spend a lot of time talking about Vafseo, which is our HIF-PHI to treat anemia in chronic kidney disease patients on dialysis. And we are about a year into launch going through the challenges of the dialysis market. But clearly, we feel on track to make this product standard of care to treat anemia in these patients.

And we're really excited now that more attention is being paid to our pipeline as well. And just in December, we announced kind of the initiation, if you will, of our rare kidney disease pipeline, which has 2 products, initially 4 indications, possibly many more to come, but praliciguat, which we just started a Phase II study in FSGS. And in December, we in-licensed AKB-097 from Q32 Bio. And in the second half of this year, we'll be starting a Basket study in 3 different rare kidney disease indications. And then we have early-stage pipeline as well.

So very clear strategic focus and a lot of exciting things in the near term.

Okay. No, that's great. Obviously, a lot going on now. So let's talk about Vafseo and the initial sort of uptake you've been seeing. Maybe you can just talk about kind of the dynamics you've seen over the last few quarters and kind of how we should expect the 2026?

Sure. So the -- we launched last January and had very, very strong initial uptake of the product. We were really quite excited about what we were seeing. We knew that dialysis -- dialysis has such a unique -- it's a unique market, right? Because it's not just getting the physician to prescribe the product and they go to the retail pharmacy and they get it, right? You've got -- it's very protocolized. It's very controlled by the dialysis providers themselves. So the physicians can really only use what's available through the dialysis provider.

And so some like U.S. Renal, where we had the initial uptake, clear clinical advocacy and understood the business side of the reimbursement, this TDAPA, this transitional drug reimbursement that we have for Vafseo last year in this. And others like DaVita moves more slowly as they tend to do.

The challenge that we had last year beyond the moving slowly was that -- remember, Vafseo is a once-a-day oral product. For 30-plus years, they've been managing anemia by giving people a shot in the chair. And what we saw was what is normal when you give Vafseo because it's one starting dose is that many patients will see a dip in their hemoglobin initially, you titrate them up and the drug works beautifully. Get patients in the range, you keep them in the range. People who are committed to that, really love the outcomes that they're seeing. But it was so new for -- particularly for the nurses, the anemia managers, sending patients home with a bottle of drug to take, they would see that initial dip and they would immediately take people off the drug. So we saw a much higher discontinuation rate than we expected to see.

So you're putting all these new patients on, but they're coming out at the bottom of the funnel. So we put a number of things in place to work on that and really did start to have an impact. Steve and the clinical team had done work looking at 3 times weekly dosing for the drug also, though it's not in our label, we do expect to have a conversation with the FDA about it. But at U.S. Renal first and a number of the others, they've made the decision to go to this TIW dosing. So they can -- basically, what that means is they give the drug to the patient while they're in the chair. So it's observed dosing, they know they're getting compliance. They see the dip. They know it's not because the patient is not taking the drug. And early days, they just started this process late last year.

But in the first centers that made that change where before you had upwards of 30% of the patients never got a second prescription in patients who were given this observed dosing regimen, that in the first month was less than 10% who didn't get that second. So we're really encouraged by what we're seeing there. And at the end of the day, we left 2025 with access to about 275,000 patients. So we -- over the course of '25, we broadened the access. Now they're figuring out how to use it. Still a lot of wood to chop, but we're really happy with what we're seeing. And then we have more data coming to support the long-term growth of the product to make this standard of care for these patients.

And then one quick follow-up on that, just in terms of the dosing. Is that something you would look to get in the actual label? Or is it more just communication?

Most definitely. I mean that's a conversation we have to have with the FDA. We have 2 studies ongoing now, one that we're the sponsor of and one that we're -- that's a collaborative study with U.S. Renal, VOCAL and VOICE. Both of those studies use TIW dosing. So VOCAL, particularly where we're the sponsor, we think that's an important data set. We already have 2 studies, MODIFY and FO2CUS that use TIW dosing to support a label. But the assumption is now that VOCAL will be done by the end of this year. Why -- you go to talk to the FDA about it, they'll say, well, we want to see the results of that study. So why not wait until you see the results of that study.

So -- and then VOICE, which is over 2,000 patients, we certainly will be able to share those results. We're not the sponsor of the study. So it would be a little bit different, but FDA would want to see that as well. And that study will read out early next year. So I think it will be -- it will really be at that point that we have that conversation again in the label. And again, I mean, these physicians and dialysis providers are making the decision to do that TIW dosing because they can control the patients and guarantee that compliance. So they're doing it without it being in the label.

And maybe just following up on VOICE and VOCAL. So obviously, data coming in the next year or so here. Just your level of confidence? And what -- maybe talk about the design and kind of what you expect to see out of those?

Sure. Maybe, Steve, you can talk about -- the VOICE.

The VOCAL study, which we're doing with DaVita, where we're the sponsor, we should get that data by the end of the year. And I expect to see excellent hemoglobin control. We're comparing ourselves to Mircera, which is a long-acting ESA. So we expect to see, just like we saw in the FOCUS trial, excellent hemoglobin, great stability, less need for rescue therapies, less hemoglobin variability.

And there's an important sub-study associated with VOCAL where we're taking patients who are looking at their red blood cell phenotypes. We've seen previously that red blood cells made under the influence of Vafseo are larger. They have more hemoglobin and have a less distribution of [ widths ], which is a good thing. So we're doing a study looking at proteomics, metabolomics, lipidomics, membrane fluidity, resistance to oxidative stress, kind of things that matter in terms of red blood cell phenotypes.

And this is really demonstrating that this more physiologic approach to managing anemia it matters, right? You're not just getting hemoglobin, right? You're getting a better red blood cell, and that matters. And Steve and I just came back from a sales meeting in Arizona or talking to the folks there. Steve and I worked together at Genzyme on Renagel and Renvela. And the playbook is kind of the same. I mean this was -- you bring this new product in, you had to continue to generate data to demonstrate to physicians why this is different. And we have that now. And we presented data just at the ASN meeting an analysis from our big Phase III study looking at using a new statistical technique, this Win-Odds technique.

And we showed that there was a statistically significantly lower risk of dying or being hospitalized using Vafseo versus darbepoetin, long-acting ESA. So is -- that's the kind of data that gets physicians excited about using it. We have to get that published, then you get it in the hands of your medical folks and communicated. So long term -- and we are taking the long-term view here. This is a $1 billion market for ESAs today in dialysis. We expect to be standard of care over time. And that's standard of care is 50% plus 1. And so that's a $500-plus million opportunity for us. And we're very confident given the data we've seen and the data that's coming that we'll get there.

The VOICE trial, the 2,100-plus patients we're studying at U.S. Renal, it's a randomized comparison against Epogen, which is a short-acting ESA. And the primary endpoint for that study is this composite endpoint of death and hospitalization rate using the Win ratio. And that study completed enrollment last June, and we will lock a database by the end of this year and present results early in 2027. So we're very optimistic. The primary endpoint is non-inferiority for that endpoint, but then it flips to superiority. And based on what we've seen from FOCUS and other TIW data that we have, this should be a very good chance we could show some real benefits along the lines of all-cause mortality and hospitalization.

Okay.

And those hospitalization rates that we'll be looking at in the VOICE study are very important to the DOs from an economic perspective. I mean, first and foremost, we're looking to show clinical benefits to patients, but the DOs do share in a portion of the hospitalization cost for patients. So if we can show obviously a reduction in those costs versus the standard of care, we think that increases the economic...

Okay. Makes sense. So one quick more on the Vafseo side. So you had some updates late last year around the nondialysis population with the conversation with the FDA. You sort of suggested there might be some specific subgroups that you maybe we all have some potential in. Maybe you can talk about the latest conversations you've had with the FDA or your thoughts around that?

Sure. Yes. I mean we continue to follow up with the FDA on the nondialysis population, a once-a-day oral product that makes perfect sense there, large population, real high need. Physicians want to use it there. They still want to use it there regardless of our conversations with the FDA. And at the end of the day, in October, we had a Type C meeting, and they -- while we had thought we had been having very productive conversations, at the end of the day, they really wanted us to redo the PROTECT trial, which was 3,000-plus patients in 5 years. And from an economic timing perspective, it just didn't make sense for us to do that.

Now while we were in that meeting, we did talk about other subpopulations that they -- that truly have a need where the benefit would outweigh their perceived risk. And we're continuing to engage with them on that. We think any opportunity to get this drug to patients is worth pursuing. Given their approach, we're being very conservative about how we think about that. I mean I'm -- we were very disappointed in their approach to this. But -- so that's why we're kind of focusing on, look, we have the drug approved in dialysis. It's a huge market opportunity. Physicians want to use it in nondialysis. Will they will they decide to do that as they get experience in dialysis? I'm 100% sure they will. They talk about it to me every time I talk to them. It's just a matter of them having to go through the process of getting a medical exception and getting it reimbursed. But we do expect some non-promoted use in the nondialysis population. And anything we can do to demonstrate and add those populations to the label help provide evidence for physicians on that.

Okay. All right. So let me shift to the pipeline. So you obviously brought in a couple of assets that you touched in the beginning. Maybe just before we get into the details, just the decision to do this and kind of why these assets look interesting?

Yes. Look, I mean, we -- as I said at the beginning, we're a purpose-driven company that's focused on kidney disease. So when you think about building out a company, rare kidney is perfect opportunity for a company of Akebia's side, right? -- size.

So we in-licensed praliciguat from a company Cyclerion back in 2021. They had generated data in diabetic kidney disease. We wanted to be sure it worked. We thought targeting FSGS, and Steve can talk about this, made a ton of sense for us. But we wanted to do some preclinical work to make sure that was the case. We had a bump in the road when we got the CRL, we kind of -- we had to focus on the dispute resolution and getting Vafseo approved. And then there were some issues from Cyclerion and getting us API for the product, which kind of worked out fine for us. But we're very excited about that product in FSGS, and we initiated that Phase II in just in December. We dosed the first patients.

And then in December also, we in-licensed AKB-097 from Q32. And this is a tissue-targeted complement inhibitor, and Steve can talk about that as well. And we'll be starting a Basket study in the second half of the year, looking at IgAN, C3G and lupus nephritis. And we think this can be really an incredibly important product for treating these diseases, very much able to be differentiated from the complement inhibitors that are out there today.

Okay. Okay. Great. So maybe let's talk about [ placebo ] FSGS. Maybe just mechanistic rationale to pursue this and maybe just more broadly, FSGS, a lot of activity there around the space. How are you seeing the competitive dynamics and the market evolving there?

Yes, sure. Praliciguat is a small molecule. It binds to something called soluble guanylate cyclase and it stimulates that to make cyclic GMP. That's the second messenger for nitric oxide. And what it's doing is stimulating good things. So it's very beneficial to the podocyte, which is a specialized cell in the glomerulus that's the main barrier to protein getting into your urine. It's also anti-inflammatory, antifibrotic.

So when we acquired the product, they had already had a very extensive package of nonclinical studies in kidney disease models and in vitro, in vivo, et cetera. So we were looking for a disease that progressed rapidly to end-stage kidney disease. And we thought about IgAN, and we thought about FSGS. We thought FSGS made the most sense because there's less crowded space. And so we did ourselves models of FSGS in rodents, in rats. And we saw excellent activity in the models that would predict benefits in patients.

I'd say the biggest benefit was in reducing scarring in the glomerulus, which is fundamentally what FSGS is. So yes, then we went back and we looked at the diabetic kidney disease data to see were patients getting to what you would consider to be like a complete remission for this condition. And using urine albumin creatinine ratio from the diabetes study, we were able to sort of project what we would see for urine protein creatinine ratios, which is now becoming the standard endpoint for FSGS trials.

So it looked very encouraging. So I'm very bullish about that trial. And yes, we're going to do a randomized, double-blind, placebo-controlled trial in about 60 patients. Half will get placebo for 6 months, half will get praliciguat. And at that 6-month period, the placebo patients will be able to cross over to praliciguat. And the primary endpoint is reduction in UPCR.

Yes. And when should we expect to see that?

We haven't guided on timing. We really wanted to kind of see how the enrollment goes before we get over our skis too far. We got the first patient started to enroll last year. So we're happy with how we're going. But as you said, it is a more competitive space. So we want to see what the dynamics there just from a patient enrollment perspective will be.

It is -- FSGS is a very heterogeneous disease, right? I mean it's biopsy diagnosed. So the idea of kind of multiple products being able to be successful in that space where different patients will benefit from different products. polypharmacy will probably make sense for patients with FSGS, not every FSGS patient will be -- not everyone, but they'll be unique. So we think even though there are more products in development in that space, praliciguat has a unique profile that really can be quite successful.

I mean you see when the FDA, which they did with IgAN, right, they define a clear regulatory path, which they've done now, we think, with FSGS as well, it really does encourage more innovation in the space, and we think we're kind of at the forefront of that.

They're really highlighting this. Obviously, IgAN has been a great success, but leveraging this another rare renal.

That's right. That's right.

And then in terms of just maybe for this trial, you mentioned very heterogeneous population. Are there certain patient subgroups that you're focused on here? How are you trying to get at?

We're focusing on primary FSGS and/or FSGS attributable to a genetic mutation. We're excluding secondary FSGS, like morbid obesity or people on certain types of medications, kind of the playbook that other companies have followed in the past.

Okay. Okay. No, that's great. So I look forward to seeing progress there and the data. So maybe on 097, you're taking a Basket trial approach we've seen other companies look at. Talk about that mechanism and kind of what indications are you most excited about there?

Yes. I think it's a really unique molecule. It's a fusion protein. So it's a monoclonal antibody that recognizes C3D, which is a breakdown product of C3. And on the back end, there are 2 tails of Factor H molecules. Factor H is a negative regulatory complement inhibitor. So it binds to the C3 and the C5 convertases of the alternative pathway and dissociates them and degrades them. So it will be administered either subcutaneously, which is the primary route of administration or you could give it intravenously. It will go to the sites where complement is being activated, where C3 is being degraded to C3D.

So it's taking the complement inhibitor right to the site where the disease is. And so you don't get the systemic complement inhibition you get with other agents that are on the market today. They all have boxed warnings because of this side effect. You're much more likely to get a serious -- potentially fatal bacterial infection, and we don't expect to have that with this product. Also use a lower dose. And so we think it ultimately will be amenable to have an auto-injector once a week or once every 2 weeks. So we think we'll get the best of both worlds. We'll get the great efficacy of a drug like pegcetacoplan, but with a better administration schedule.

And without the box warning.

And without the box warning.

Okay. And in terms of indication, patient population, where are you sort of most focused?

We're focused on the rare kidney diseases, but there are other conditions where complement activation is localized. You probably wouldn't develop a drug like this for PNH or something that's affecting the entire body because you have to give a much larger dose and sort of undermine the benefits of this product.

So Q32 had a protocol basically agreed with the FDA on looking at IgAN, C3G and lupus nephritis. We thought the fastest path to get into the clinic was to follow that protocol as closely as possible. So that's what Steve's team is working on now. And the nice thing about a Basket trial is you can look at data kind of as you go. So we expect to start the study in the second half of the year. And with this one, we are kind of saying we'll have data in 2027 to start to share.

Okay. Okay. Great. So maybe then just rounding up the discussion here, the cash position for the company right now and kind of how you see your runway?

Yes, we have a strong balance sheet, $166 million in cash as of the end of Q3, and we've guided we have at least 2 years of cash runway.

Okay. And then as we sort of bring it all together, how would you lay out sort of the key catalysts, key event investors focus on for the next 12 months?

Well, I think people are clearly going to keep looking for at the Vafseo launch. I mean that is thing one, right? I mean that is the engine that fuels the development pipeline as well, right? So people will look at our progress there and get -- kind of see that inflection.

And then it will be -- we initiated the PRALI study, getting 097 into the clinic. 9090, which we didn't talk about at all, which is a HIF compound from our own research, we will start a Phase I in healthy volunteers. We're targeting AKI associated with cardiac surgery as a first indication, but we'll start that study and have it completed before the end of this year. And as I said, 097 data, you'll start to get next year. And then as we've talked about earlier in the half hour here, the VOCAL study will read out before the end of this year and VOICE early next.

So if you look at the next 12 months, from a clinical catalyst perspective, you've got very important readouts that will going to confirm the ability of [indiscernible] to become standard of care in this market, and you'll really start to see the fruits of our pipeline as well. So it's going to be a very, very exciting 12 months for the company.

Okay. All right. Why don't leave it there. We only got a minute left anyway. So thanks again so much for coming. A lot of interesting events coming up. We look forward to following the progress.

Vamil, thanks for the invitation.

Great. Appreciate it. Thank you.

Good day, and thank you for standing by. Welcome to Akebia's Third Quarter 2025 financial results conference call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mercedes Carasco, Senior Director of Investor Relations. Please go ahead.

Thank you, and welcome to Akebia's Third Quarter 2025 Financial Results and Business Update Conference Call. Please note that a press release was issued earlier today, Monday, November 10, detailing our third quarter 2025 financial results and that release is available on the Investors section of our website. For your convenience, a replay of today's call will also be available on our website after we conclude.

Joining me for today's call, we have John Butler, Chief Executive Officer; Nick Grund, Chief Commercial Officer; and Erik Ostrowski, Chief Financial and Chief Business Officer. 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 financial results press release that we issued on November 10 as well as in our Risk Factors and Management Discussion and Analysis section of our most recent annual and quarterly reports filed with the SEC.

With that, I'd like to introduce our CEO, John Butler.

Thanks, Mercedes, and thanks to all of you for joining us this morning. The team is just back from a very successful American Society of Nephrology Meeting, where we met with prescribers and customers and also presented data that continue to demonstrate the positive impact VAFSEO can potentially have on important clinical outcomes in dialysis patients, the quality of data that we believe will lead to Basio becoming standard of care to treat anemia in dialysis patients.

Of course, today, there is a significant focus on our current launch progress. I'm proud to share that through 41 weeks of launch, VAFSEO has generated more total prescriptions than any recent launch in dialysis. This is a reflection of the recognition from prescribers of the potential clinical benefit VAFSEO can bring. That being said, from a business perspective, I'm not satisfied with generating $14.3 million in revenue this quarter. No one on the Akebia team is. But to be clear, we are pleased with the direction of all the important launch indicators that we believe will lead to long-term success for the product.

We increased accessible patients from 40,000 patients in the first half of the year to almost 70,000 by the end of Q3 with the initiation of the DaVita pilot and the addition of IRC and several smaller providers late in the quarter. However, as we advance through the launch, we continue to appreciate how long it takes to align all of the logistics and processes for a new therapy to be made available for patients, particularly one that will be delivered to a patient's home, a departure from how anemia has been treated for the past 35 years.

The bottom line is that getting patients on therapy and, in some cases, keeping them on in the highly protocolized dialysis environment has taken longer than we expected. That said, these are operational issues that we and our dialysis provider customers are working through as quickly as possible. We believe that our positioning is compelling. Market research and every conversation I had at the ASN meeting supports physician desire to prescribe.

Nick will share more information on our launch as well as sentiments from prescribers that we heard at ASN. Further, I expect that strong interest from physicians is only going to grow with the win odds analysis based on data from the INNOVATE trial that was presented at ASN last week by Dr. Glenn Chertow.

The purpose of the win on analysis is to bring a greater level of statistical power to analyzing critical clinical outcomes. It's a statistical method designed to prioritize clinically meaningful endpoints in outcomes trials. This post hoc data analysis showed that patients randomized to vadadustat experienced a lower risk of death or hospitalization compared with patients randomized to the ESA control, darbepoetin alpha, the benefit became more significant when you looked at an on-treatment analysis.

You've heard me say repeatedly that continuing to provide data that supports the clinical differentiation of Vafseo will be critical for the product to become standard of care. This data is an incredibly strong start and an important step in delivering on that promise. We will, of course, work diligently to have these new data published so our medical team can communicate them in the field as appropriate. Moreover, Dr. Block has adopted this win odds endpoint as the primary endpoint in the voice study, which we expect to read out in early 2027.

As a reminder, late next year, we'll also have the results from the VOCAL study that we're conducting at DaVita clinics. These readouts will be 2 important data catalysts for the company and we believe the newly generated information should support continued long-term growth of Vafseo prescribing.

Now both the voice and vocal studies utilize 3x weekly or TIW dosing regimens. We've said before that observed dosing will be important for the in-center patient population as the dosing schedule can coincide with their dialysis treatments.

Now we plan to engage further with the FDA on adding TIW dosing to the label, but we have heard from physicians and providers that they are moving to this dosing regimen based on the evidence that already exists. To this end, U.S. Renal Care is currently implementing a TIW dosing protocol in their clinics with a goal to have it available in all clinics in Q1 of next year.

I expect some physicians may wait until Q1 to start new patients on Vafseo when they can leverage TIW dosing, now additionally, USRC will be shifting from using 150-milligram tablets at home to 300-milligram tablets for in-center use, which could impact inventory levels in Q4. We in the long run, I believe this change, enabling observed dosing will improve physicians' ability to drive patient adherence and compliance, which have been factors impacting growth.

Before handing the call over to Nick, I want to go back to our launch for a moment. Having more prescriptions written in the first 41 weeks of a launch, then any recent launch in dialysis suggests a very strong reception from the dialysis community. Hearing feedback from physicians about their positive experience with Vafseo and seen data like Dr. Chertow presented regarding the potential favorable mortality and decreased hospitalization benefits compared to ESAs gives me more reason to believe we will achieve our goal of making Vafseo standard of care for dialysis patients. I'm extremely confident in achieving that long-term goal.

In the near term, our team is tackling operational issues head on to overcome them. Now let me turn it over to Nick to give more granularity on these efforts. Nick?

Thanks, John. Good morning, folks. Like many others at Akebia, I spent the last several days in Houston at ASN, talking to nephrologists and leaders from various dialysis organizations. The positive sentiment on Vafseo as a compelling treatment for anemia remains high. In fact, from market research, we now have early insights into the perceptions of nephrologists who have patients on therapy. We're pleased to see that more than half of the nephrologist surveyed Vafseo is providing more consistent control of anemia than their ESA with fewer dose adjustments.

More importantly, at ASN, we met with all of the large and midsized dialysis organizations with prescribing access and they reinforce that they are vested in the success of Vafseo. All these factors give me confidence that we will achieve our goal of making Vafseo standard of care for dialysis patients.

I believe that by continuing to address operational challenges and further improving access, we continue to unlock the true value of FCR. To that end, I'll share quarterly launch metrics. But note that as we bring on more dialysis providers in the coming quarters, we will not be able to continue to provide dosing level data moving forward.

During the quarter, approximately 725 prescribers are on a prescription for Vafseo and each prescriber on average, wrote approximately 12.7 prescriptions. More than 85% of prescriptions were refilled in quarter 3, and the average dose of those refills has increased 5% versus the prior quarter and 32% above the starting dose. We believe this reflects that physicians are getting comfortable treating patients to the optimal therapeutic dose, and that this trend of increasing average dose will have a positive impact on revenue.

In summary, overall, Vafseo demand in quarter 3 was flat versus quarter 2 with new patient starts offset by lower-than-expected initial adherence. With expanded access, we have more to do to gain new prescribers and get more patients on therapy. We have extremely strong advocacy at USRC, as we said before, and saw a strong initial uptake.

Now over 85% of USRC physicians have written a prescription. However, we have seen continued lower adherence at USRC than we expected, lower than the industry standard we shared with you in quarter 2, and the adherence rate at USRC is lower than we anticipate and other dialysis organizations. To improve adherence, we revamped and highlighted our messaging, we trained our sales team to better educate physicians and particularly anemia managers on potential GI issues and dosing and titration strategies.

Our medical team is also supporting USRC in adjusting its protocols. Much of this work is still continuing. And in recent months, we've seen an increase in patients getting a first refill which we believe means caregivers are beginning to better understand how to successfully treat with Vafseo. While a positive sign that our efforts are making an impact, there's still more do.

I'm proud of our medical team for identifying solutions to discontinuations at any time and educating prescribers on Vafseo data to support dosing decisions as they address challenging protocol restrictions. Also important, the data we are seeing suggests discontinuations are lower in PD patients and at organizations with protocols permitting 3 times weekly or TIW dosing.

As additional dialysis organizations adopt TIW dosing, including USRC, as John mentioned, we believe we'll continue to see an increase in patient adherence. To continue the success of the Vafseo launch, we need to continue to increase prescribing access across dialysis organizations. We referred to having prescribing access when a dialysis organization has created and operationalized Vafseo treatment protocol. In quarter 3, we increased prescribing access by greater than 25,000 patients. Additional patients came from 3 sources: innovative Renal Care or IRC, the DaVita pilot and a number of other regionally important small and independent dialysis providers.

While we anticipated broad access to DCI, the fourth largest dialysis organization, they have yet not enabled broad prescribing access through our protocol. IRC, the fifth largest dialysis center made Vafseo available to patients in mid-August and required all clinic staff to be trained by the end of September.

With strong physician advocacy and in all staff trained, we expect physicians to trial Vafseo in certain patient subgroups leading to broader adoption in Q1 2026. The DaVita pilot in over 100 clinics that treat nearly 10,000 patients also began in mid-August. Within large complex organizations, it makes sense to do a test run to ensure a smooth rollout. And during the pilot, we saw patients being identified, labs being drawn, insurance being verified and patients preparing to go on therapy in quarter 4. The pilot was successful in that those processes were streamlined and revised when needed and patients have since been dosed.

We are pleased to say that DaVita has decided to roll Vafseo the remainder of its clinics and that Asia is available broadly as of today. With over 200,000 patients within DaVita, now having prescribing access, our teams are working with prescribers to identify those appropriate to start on Vafseo.

In summary, while gaining significant traction is taking time, I believe the core tenets of a successful launch are in place and strengthening. We have strong market awareness, increased prescribing access and we've already overcome several operational issues. With prescribing access Vafseo over 260,000 patients today, we expect several dialysis organizations to increase ordering in the fourth quarter of this year, and importantly, to build momentum into 2026. Let me now turn it over to Eric.

Thanks, Nick. We're happy to report another solid quarter of top line performance with Vafseo and Auryxia. I'll now provide an overview of our results as compared to the third quarter of last year. Total revenues, which are comprised primarily of net product revenues and also include license collaboration and other revenues. We were $58.8 million in this quarter as compared to $37.4 million in Q3 of last year, representing an increase of over $21 million. Of these amounts, net product revenues increased to $56.8 million this quarter from $35.6 million in Q3 of last year. This was driven by sales of Vafseo, which were $14.3 million in the quarter, as well as by an increase in Auryxia sales, which were $42.5 million this quarter as compared to $35.6 million in Q3 of last year.

As a reminder, Auryxia lost IP exclusivity in March and there's an authorized generic for Auryxia on the market, though no generics have been approved by the FDA at this time. We are pleased to post another strong quarterly Auryxia results, though caution future Auryxia sales levels are challenging to predict due to the uncertainty around the timing of potential additional generic cost of goods sold decreased to $9.4 million this quarter as compared to $14.2 million in Q3 of last year.

The key driver of this COGS reduction is that we are no longer reporting a $9 million quarterly noncash amortization charge related to the acquired developed product rights for Auryxia, which is now fully met. Also of note, the Vafseo sales in the quarter were derived from prelaunch inventory, which does not include the full cost of manufacturing and as a portion of deals inventory-related costs were previously expensed R&D prior to the Vafseo FDA approval.

R&D expenses increased to $14.9 million this quarter from $8.5 million in Q3 of last year, driven by increased clinical trial program activity including our voice and vocal studies, which aim to continue to generate data highlighting the benefits of treating patients with Vafseo scale as well as higher headcount-related costs. SG&A expenses increased to $29.1 million this quarter as compared to $26.5 million in Q3 of last year. The increase was primarily driven by higher marketing costs in collection of the Vafseo U.S. launch as well as increased headcount-related expense.

Turning to the bottom line, we generated net income of approximately $540,000 this quarter as compared to a net loss of $20 million in Q3 of last year. This quarter's net income was primarily driven by the increase in net product revenues, which was partially offset by higher operating expenses. Our cash position is strong. We ended Q3 with $166.4 million in cash and cash equivalents. We believe our existing cash resources and the cash we expect to generate from product royalty, supply and license revenues are sufficient to fund our current operating plan to profitability, including the advancement of our existing pipeline.

In closing, our Q3 financials reflect our continued execution of the Vafseo launch and the continued steadiness of the Auryxia revenue stream. We look forward to discussing our Vafseo launch progress as well as the advancement of our pipeline on our next earnings call. We'll now open the call up to questions. Operator?

And our first question comes from Roanna Ruiz of Leerink Partners.

Great. one.So a couple from me. I was curious what strategies could you use to overcome the operational challenges that you mentioned for Vafseo, including the average adherence I think you mentioned the U.S. Renal -- and are there any learnings you can take from the pilot program with the DaVita that could help you figure this out and enhance it going forward?

Great questions. And I think they're both for Nick. So I'm going to turn it over to him.

Yes. The first part of the question is really strategies around adherence. As we've looked at it, Typically, what we're seeing is adherence being challenging really in that what we call the first refill. And that first refill is immediately following the initial prescription. So they get prescribed at the starting dose of 300 milligrams. A lot of those patients who are being started are higher dose ESA patients. So they're coming from a high dose to 300-milligram and their experience, in some cases, a hemoglobin dip. What we found out is that the anemia manager is used to their ESA. They've been using it for 30 years, and they're responding by switching the patient back to an ESA as opposed to titrating the drug. It's a titratable drug, the average dose in our studies was roughly 435 milligrams.

So the expectation is to titrate. And what we've seen is there's a lack of titration there. And so what we focused on is really the messaging with our sales team with the anemia managers around titration strategies and, et cetera. In addition, our medical team has been working with the DOs around protocols associated with how we think about long-term use of the product. And both those things together, we've seen some recent trends that suggests we're moving in the right direction, but still a ton of work to do there.

The second piece is DaVita. DaVita learnings as the second largest dialysis organization, they do these pilots for a reason, and that's really to work out the kinks. Those kings can be in places where an initial prescription gets loaded into the system. That person needs to have a clinical review. They also need to have a reimbursement review. That order then gets sent to the specialty pharmacy who then fills the prescription at the patient's home. And the idea behind the pilot was to actually test all those aspects. And where needed, the Vita adjusted those.

And so as we think about the learnings from that is with USRC, we saw a very motivated do dialysis organization. They were prepared ahead of time with many of those things. So they move very, very quickly. Vita took a little bit longer. So this is really a prescriber driven launch within DaVita. It's not a top-down push of any kind. It's prescriber-by-prescriber. And it just took us a little time to figure out the distance between the prescription being -- the patient being identified and the prescription being filled. -- those learnings and frankly, all the learnings truth learns we've been able to apply to every deal that's come on board.

And that's one of the reasons why we expect adherence in new dialysis organizations who are starting to be actually lower than or higher than the adherence we saw at USRC early on. So we're taking those learnings and we're sharing them broadly and we believe they're having an impact.

Let me just I add a couple of things. The pilot was successful. So the learnings were, it takes time to work through it. DaVita seem very happy with it. And as a matter of fact, rolled out village wide, as they call it, to their entire community 200,000 patients as of today, which is sooner, frankly, than we actually expected it. But where I think Nick was saying the learnings came from what we saw at U.S. Renal first and how then protocols and the like were implemented at DaVita and some of the others. We're in some ways, dialysis is an interesting community in that everybody kind of knows what everybody else is doing, right? And there's a lot of communication.

And even at the ASN meeting, there's a meeting of Chief Medical Officers across all of the different dialysis providers to share data kind of activities, things they're doing medically and clinically. And we know Dr. Block shared significant information about their experience with Vafseo. And we think clearly those learnings impacted how DaVita built their protocol. -- which, again, we expect will be very, very helpful.

I think even in the early pilot days, we're not seeing and don't expect to see the same issues around adherence because of some of the the tweaks they made to those protocols. So that is the learning, too. Nick referenced the anemia manager. manager is so important to this process. They're used to giving EPO or Mircera, whatever, in the clinic every day. So they see this dip in hemoglobin, and they don't have control because the drug is at the patient's home so they immediately go back to what's comfortable.

And they really have to have a lot of training about how to work beyond that. It took like 20-plus years to really understand how to dose ESAs and we've been on the market for 41 weeks. And I'm amazed at how much progress they've made in really understanding how to use the product. And again, going forward, we're really confident in the trends that we're seeing.

And our next question comes from Julian Harrison of BTIG.

This is Andrew on for Julian Harrison. Just a quick question on 1 of the presentations from ASN -- could you discuss what physician feedback has been like regarding the post-hoc analysis of batedustats impact on hospitalization outcomes?

Yes. Andrew, thanks so much for asking that question. it is obviously early days. We only had the presentation last Thursday, I think it was. But certainly a focus of the conversations I've had, again, I believe that, that was part of the presentation, Dr. Block made to the other Chief Medical Officers, we obviously weren't in that presentation.

But this is important data. this is really meaningful data. When you look at the INNOVATE data overall, we saw about 1% lower mortality rate and about an 8% lower hospitalization rate, but neither of those were statistically significant. Using this win on analysis where you -- with a hierarchy, right? It's better to be alive than dead, and it's better to be out of the hospital than in the hospital. And you can really low on what matters to patients. And the clinicians that I spoke to, we're incredibly excited about this. I mean these, of course, are people who believe in the product already, and this is the kind of evidence that they need.

So we can't obviously use this in the field or the medical folks can't communicate this until it's published. So it's important for us to move that quickly. But this is the promise that we believe the drug would have, and it's being demonstrated. And of course, we'll confirm it prospectively with the voice trial as well. So we're -- again, I think, hopefully, you hear the bullish pone of my voice. I mean, coming off this ASN meeting, not only were people were talking about the good experience that they're having and where there's frustration, it's frustration with operational issues. It's the -- hey, this is something that's going to change care for patients, and they want to be a part of it. So things in dialysis don't happen overnight, but we're on the right track. I'm actually confident on that.

And if I could just ask 1 more quickly. Just on kidney injury. Have you gotten any sense of what the registrational path could potentially look like for this indication? Has there been any communication with the agency on potential expectations.

No, not yet. This is acute kidney injury is our compound AKB-9090, which we expect to start Phase I early next year. So it's a little early for having that conversation. The great thing is there's this group, the kidney health initiative that ASN sponsors that has multiple manufacturers, the FDA as part of that as well. Elisa Thompson goes to those meetings regularly. And Steve Burke, our Chief Medical Officer and Head of R&D, he's a part of that. He actually chairs the drug committee and he's chairing a special section on AKI.

So similar to the way FDA agreed on a path forward for IgAN and seemingly for FSGS as well activities. I would hope that there'll be real clarity on where AKI or what you have to do in a really streamlined way to get an AKI product approved. We have a few years before that matters to us yet. But it's great that Steve is directly working on that with the FDA and the ASN and the rest of KHI.

Our next question comes from Matthew Caufield of H.C. Wainwright & Company.

Great -- just kind of a 2-part question. First for Vafseo, at this stage, what do you view as the greatest hurdles to the LDO and medium dialysis organization expansion for just building on near-term growth -- and then separately for Ruxia it was mentioned that the generic had not entered the market yet. I was just curious kind of what your thoughts were there. It seems that may come a slight surprise. Just trying to get sort of your thinking on that. Appreciate it.

Thanks for the questions, Matt. I'll take the second 1 first. Auryxia, this is the gift that keeps on giving. -- we had an expectation that there would be generic approvals in March. There haven't been -- we don't know why, and we're certainly not going to ask anyone. We're simply going to continue to provide product to the market.

So we know exactly what the authorized generic can sell. We -- that -- obviously, they buy from us. So again, we will continue to provide the market over time. You can see from the revenue numbers, I mean, it's continued to do incredibly well, particularly in this TDAPA period for the phosphate binders. So as long as that continues, we'll take advantage of it.

And as Eric referenced, I mean it's just hard to think long term about it because ultimately, I expect the generic will be approved. But we know this is -- we've had challenges manufacturing the product. It's not -- we have supply now, but it isn't as easy as some of the other things we work on. So is that having an influence? I don't know. But we're happy enough to fill the market need there. And the greatest hurdle.

I'm going to ask Nick to comment on this in a second, but to me, it's working through all of these processes at the dialysis providers. It's not as simple as you launch other drugs. It's like the doctor wants to write a prescription, they write a prescription, they bring it to the pharmacy, it gets filled your work is to get payers to have it on formulary, et cetera. Here, there's just so many more hurdles that we had to jump. And we knew we had those. But I think just the timing of getting through them is has been frustrating for us. But as you get through them, then you have access. And then it's about driving that demand at the physician level. So that's what gives me confidence. This isn't a a question of to physicians believe in the product, they want to write it. We've got to get through these operational challenges. I don't know if you want to add something there, Nick.

Yes, really 3 things, and John and John did a nice job on 1 of them. The first one is access. When I think about access, getting it to prescribing access where there's a protocol people can use broadly. Now with David today, the pilot is over and it's available to 200,000 patients. And so that one, I would say, while we still have work to do with Fresenius, we have a number of patients of 260,000 patients that we can go after here in quarter 4 and in 2026. And so I don't want to say behind us, but certainly a big step forward in this quarter.

The second is really the operational issues, which John talked about, I'd say, if you met 1 DO, you've met 1 DO. In some cases, we need to be the expert on their process so that we can explain that to physicians prescribing physicians in order for them to be able to easily get patients on product. And I think we're understanding that and we're moving that forward.

The last one is the adherence thing, which we talked about a bunch. When I think about adherence, there's so much learnings that we had from USRC. In fact, they've been helping to communicate the learnings at the CMO meeting that John referenced and people are changing the behaviors. They're changing protocols for new folks to represent the learnings from the USRC experience there, changing their protocols to potentially allow for better adherence with patients, and our team is out there supporting that either from the commercial side or from the medical side.

Yes, on Access, we started the year at 40,000 -- roughly 40,000 patients. We're going to enter 26 with something like 7x that number of patients who have access. We just have to work through all of those issues. So you go from 10,000 DaVita patients who can get access to the product to 200,000. We're so pleased that they're starting earlier because again, they're going to work through some of those issues over the course of the next couple of months, but that, I think, will put us in a great place to start 2026. 7x the number of patients who can potentially access the product and that's without even getting Fresenius, which, of course, we continue to work, had some great meetings with them at ASN.

And at some point, they won't be on an island. They'll make access for the product as well. So -- but a lot of work to do. Thanks for the questions, Matt. appreciate it.

Our next question comes from Roger Song of Jefferies.

Great. Thank appreciating the current prescription is mostly coming from SRC strong? And then just curious about when you start with those new patients, including the DaVita and then DCI IRC upcoming. So how should we think about the new patient start compared to USC with a pretty strong start -- and then also just a quick question related to the inventory.

So you mentioned 4Q will be a little bit different. Just give us some color around the 3Q inventory? And then how should we expect for the 4Q?

Yes, Roger, thanks so much for those questions. So I think it's really important questions. The SRC experience I don't believe you should think about kind of projecting that onto the other dialysis providers, right? I mean what we had at SRC with the advocacy we had from Jeff Black and Mary Dietrich, the CMO and assistant CMO, they -- it was a push, right? Think of it that way. They basically said, here are the reimbursed patients and go put them on. And you saw that in the first quarter. And that was great.

At the same time, it led to some of the adherence issues that we've been talking about and the fact that the anemia nurses we're kind of quick to switch people over. So it was great on the one hand because you've got this bolus of patients on. They got a ton of experience and everyone else has learned from that. But as you think about DaVita on IRC and ultimately DCI and Fresenius is much more of a prescriber driven growth in patients, right? So it will be on -- which is great.

I mean we can handle that very well, right? This is why we have a commercial organization in place and a medical organization to support protocols and the like. So -- so it's hard to take that and move it over. You really have to think about each of those in a unique way. Now again, you have that broad support at the corporate level, but you're just not -- they're not forcing people to write the drug. And remember, during the TDAPA period, you still have to go through this this process, we have to confirm insurance and the like.

So U.S. Renal did that first. Hey, here's all the patients that are insured. Now the docs need to say, "I want to write it for this patient, then you have to see that they're insured, and this all takes time to get the patient on. So I think we learned a lot through the VITA pilot process that it took longer than we had expected, and they had some glitches with their systems that they've worked through. Again, you don't go from 100 sites to however many thousand DaVita has without -- it doesn't all turn on a dime. But we're incredibly well positioned for '26.

And when I think about some of the meetings we had with the corporate folks at ASN last week. And the language they were using to us around where this product should fit in these are the things that give me confidence. I'll let Nick answer the question on current inventory. But just the reference point that I made in my remarks, U.S. Renal, again, where more of our -- most of our sales come from, they've been using 150-milligram tablets, -- that's what they ship to patients -- so they have inventory of that -- they know they're going to be moving. They're not going to force anyone, but I expect that most patients and physicians will move to TIW dosing, TIW dosing, the drug is at the dialysis center, obviously, because they give it during dialysis and they use 300-milligram tablets for that.

So they'll have to work down their 150 inventory it's a shorter supply chain because all of you that -- we ship directly to the dialysis providers. So they don't need as much inventory on a go-forward basis of the 300. So we don't know exactly what that will be. in Q4, but I think it will clearly be a little bit less inventory than they had end in Q3. And that number

Yes. So they added about $1 million in quarter 3 in total inventory into their thing. The other thing to keep in mind is they make this switch to TIW, if you're a physician who wants to put a patient on product, you're likely to say, "Hey, I want to not put them through go to QD and then switching to TIW. There may be some resistance in the system for new patients to start in quarter 4 while they wait for the TIW protocol to be available to them.

They made that. Clear to all the US RC physicians that they'll be moving to that. They're doing it gradually through centers and expect to have them all available at earlier -- hopefully, early in Q1 -- and I do think that may -- if I'm a doc, and I have someone I want to start, and I know I want to use TIW. I'm going to wait until I can access that probably before I put them on. So that could impact patient starts in the fourth quarter.

But again, that is with the -- what we would expect to be improved adherence and compliance, that's a long-term win for us for sure.

Thank you. I'm showing no further questions at this time. I'd like to turn it back to John Butler for closing remarks.

Thank you so much, Ted. And thanks to all of you for joining us this morning. As I said upfront, we're not satisfied with the revenue number we presented this morning, mostly because with data analysis like we presented last week, we're gaining awareness of the type of impact that Vafseo can have for patients. We are gaining access to patients. As I mentioned, when we start '26, we expect to have access to almost 7x as many patients as we did at the start of this year.

We're dealing with the operational issues we're encountering and we're driving demand from prescribers. Coming off this ASN meeting, my confidence has never been higher, and I look forward to updating you all on our progress. Thanks, everybody. Have a great day.

This concludes today's conference call. Thank you for participating, and you may now disconnect Goodbye.

Good morning and thank you for joining us here today at the Wells Fargo Healthcare Conference. I'm joined with the team from Akebia today. Today, we have Erik Ostrowski, who is the Chief Financial Officer at Akebia; as well as Nick Grund, who is the Chief Commercialization Officer. And so today, we're going to present sort of a dual hybrid presentation and fireside chat. And so to start off, we'll go with some slides from Erik.

Great. Thank you, Patrick, and thank you to Wells for inviting us here today. Before we jump in, just a reminder, we'll be making forward-looking statements and refer you to our SEC filings for more details on the company.

So really excited to be here today to tell you about Akebia Therapeutics. We are a leading commercial stage company focused on kidney disease. We have 2 commercial products. One is Auryxia, which is a phosphate binder. It's been on the market for several years and lost IP exclusivity in March of this year, yet generated $47 million in revenues in Q2. So it's been really a great product for us.

Today, though, we're going to focus more on Vafseo, which is our new product we launched in January. It's a treatment for anemia due to chronic kidney disease for adult patients on a dialysis. This is a $1 billion market opportunity in the U.S.

We're also pursuing label expansion for Vafseo into the late-stage non-dialysis CKD population. We believe this is a multibillion-dollar market opportunity, and we'll talk a bit about our Phase III plans there.

Vafseo is built off of our Nobel Prize-winning hypoxia-inducible factor technology. We utilize this technology across a number of our programs in our pipeline as well. Importantly, we are in a solid financial position. We ended the second quarter with $137 million in cash and believe we are financed to profitability.

We firmly believe that Vafseo can become the new standard of care for the treatment of anemia due to CKD.

This slide outlines key elements of our clinical value proposition, which really starts with our unique mechanism of action that stimulates the body's natural response to hypoxia. This is in contrast to today's standard of care ESAs, which gives the patient a large amount of protein. What we are stimulating is a more physiological response that enhances the body's natural production of EPO, activates iron mobilization, controls hemoglobin levels within a desired range over time, provides for simple titration, fewer dose modifications and importantly, comes in a convenient oral dose form.

So as mentioned, this is a $1 billion market opportunity in the U.S. There are about 500,000 patients in the U.S. with anemia caused by CKD. We are looking to address that full patient population. But what we highlight on this slide is that there are particular segments of this population that are very much underserved by ESAs, the current standard of care.

One group is the home use or home dialysis group. There's about 80,000 patients in this segment. And as you might imagine, having an oral dose form to offer these patients as compared to injectable ESAs is viewed as quite advantageous.

The other patient segment we highlight is the higher ESA dose patient segment. As the name implies, these are patients who are on higher than typical levels of ESA. And we know as ESA levels increase, so do safety risks. And so again, have a compelling value proposition for that segment as well.

So here is an abbreviated chronology of key steps leading up to the launch of Vafseo in January of this year. We obtained FDA approval in March of 2024. Notably, in October of 2024, we obtained a transitional drug add-on payment adjustment reimbursement, also referred to as TDAPA. TDAPA is a mechanism put in place by CMS that provides dialysis organizations incremental payment for 2 years for adopting new innovative technologies such as Vafseo.

We announced in January of 2025 that we had secured contracts covering nearly 100% of U.S. dialysis patients. So we are contracting directly with the dialysis organizations. And this was really a key step for us ahead of the launch to really set ourselves up for a strong start out of the gate. This culminated in revenues for Q2 for Vafseo of $13.3 million. And again, we're really happy with how this launch has started.

So now I'll drill in a little bit on some of the key commercial metrics that we look at as well as talk about some catalysts to continue to drive growth of Vafseo revenues.

So when we talk about utilization of Vafseo, we often talk about continuing to expand the breadth and the depth of the product. What we mean by breadth is number of prescribers. And by depth, we mean number of prescriptions that those prescribers are writing.

We saw both of those metrics increase from Q1 to Q2. In terms of prescribers, we had 640 prescribers in Q1, increased to 725 in the second quarter. And in Q1, on average, prescribers writing 12 prescriptions each. That number increased to over 13 in the second quarter.

In terms of getting to that next leg of revenue growth for the product, we think it's really important that we continue to expand prescribing access to Vafseo. And what do we mean by prescribing access? Well, I mentioned earlier that we have contracts in place with the dialysis organizations, and that clearly is the key initial step.

After that, the DOs need to put protocols in place within their organizations. And then those protocols need to be operationalized. It's at that point that we deem patients as having prescribing access. And so we had about 40,000 patients with prescribing access as of the end of Q2. We expect that number to increase multifold to 275,000 patients by the end of the year.

Related to that effort, really excited to announce today that as of mid-August, DaVita has initiated their operational pilot of Vafseo across more than 100 of their dialysis clinics. And we look forward to DaVita opening up access to their 200,000 patients post pilot.

In order to become the standard of care, we think it's really important that you continue to generate data that highlights the benefits of your therapy. And so I wanted to take a couple of minutes to talk about our VOICE study. This is a collaborative clinical trial we are conducting with U.S. Renal Care. U.S. Renal has really been just a great partner of ours.

This trial fully enrolled in June of this year, about 2,100 patients. We expect top line data in early 2027, 18 months past randomization of the last patient.

From a study design standpoint, we have 2 treatment groups. We have the Vafseo group and then we have a group treated with the standard of care ESA. And we're looking at all-cause mortality and all-cause hospitalization. And of note, this study is powered to evaluate superiority for all-cause hospitalization if it can demonstrate about a 10% decrease in hospitalizations with Vafseo.

Why is that important? Well, when patients on dialysis need to be hospitalized, the DOs share in a portion of those costs for the hospitalization. And so if we can show that the Vafseo group, those hospitalization rates are going down, that's great, first and foremost, for the patients, but also for the dialysis organizations who will save in that incremental expense. And so we look forward to sharing data from this trial in due course.

Now we will shift to the non-dialysis opportunity. As mentioned, we believe this is a multibillion-dollar opportunity. There's about the same number of patients with anemia caused by CKD in the U.S., about 550,000 as there are patients with anemia caused by CKD who are on dialysis.

The big difference here, though, is with respect to the payer dynamics. In the non-dialysis segment, you're looking at predominantly private and unbundled government payment. And so we, therefore, would expect to see higher pricing in this segment.

And in the Q&A portion today, Nick will have the opportunity to talk to you some more about the high level of unmet need that we see in this NDD segment of the market.

So what are our plans? We are looking to start a Phase III trial, which we call VALOR. This will be a cardiovascular outcome study. About 1,500 patients in the U.S. with Stage 4 or 5 CKD not on dialysis. We are engaging with FDA on this study. We have had a Type B meeting. We have requested a Type C meeting. And following FDA feedback, we plan to finalize the protocol, and we plan to start this trial by the end of this year.

I'll now talk a little bit about our pipeline beyond NDD. We have a number of programs, many of which utilize our HIF-based technology. I'll highlight a couple here. One is AKB-9090. This is a program in AKI or acute kidney injury, large unmet need. We are progressing this trial into a Phase I this year.

Another program we are really passionate about is AKB-10108. This is an ROP or retinopathy of prematurity. This is a rare disease that's outside of renal, but notably, a disease in which we think our HIF technology matches up nicely against the biology of this disease, and we really hope that we can make a positive impact for patients here and likewise, look forward to continuing to progress this trial into the clinic. So collectively, you're looking at multiple billions of dollars of incremental market opportunity for the company across this pipeline.

2025 has really been a transformational year for Akebia. As we look at our objectives for the rest of the year, first and foremost, we'll continue to execute on the U.S. launch of Vafseo. Secondly, we plan to initiate the Vafseo Phase III trial in that non-dialysis segment by the end of the year. We have, ahead of schedule, achieved our objective of fully enrolling the VOICE trial. And lastly, and importantly, we will continue to advance our pipeline beyond NDD, including our work with AKB-9090, which is our program in acute kidney injury.

So with that, I'll turn it back over to Patrick for some Q&A.

Sure. Thank you, Erik. Thanks for providing the overview on Akebia. That's fantastic. I would love to go a little bit more into some of the detail around both Vafseo and the opportunity that's there. So I've put together a couple of questions in order to facilitate some of that discussion for the next 20 minutes or so.

Nick, could you possibly start by providing a little bit more detail around the opportunity that exists in treating the anemia of patients that have anemia associated with dialysis. And so what does that group look like? Is it a homogenous group, sort of? Is it expected and projected to grow over the next couple of years? And sort of what is the forecast and opportunity there?

Yes. When you think about the overall dialysis market in itself and those patients that have anemia, it's around 550,000 patients in it. Over the last number of years, it's been a fairly stable market. Prior to COVID, it was actually growing kind of that 2% to 4%. COVID, unfortunately, has stunted the growth of the market a little bit. It seemingly is recovering more recently, but generally about 550,000 patients.

As Erik alluded to, all those dialysis patients, you have really 3 segments, [indiscernible], folks that are in the home population, and that's about 80,000 patients. You have the patients that are not well managed on an ESA. What that means is they're either receiving higher doses of ESAs because their response rate is not very well or they're continuing to fluctuate in their ESA dose. In other words, they're coming in for consistent dose modifications. That kind of hemoglobin cycling, that high-dose ESA has been associated with increased cardiovascular risk. And so that population is very important as well.

And then our label is very broad. You've got the general population that is under the care of an ESA but is also a population that Vafseo can address as well.

And so just to hone in on that a little bit, I think about patients that are having a difficult ability maintaining hemoglobin and sometimes they go beyond where they need to and it becomes a safety issue. Could you maybe highlight a little bit about the safety profile about Vafseo that is interesting and helpful in this situation?

Yes. So when you look at Vafseo, when you use an ESA, you see using a synthetic hormone, you're really dumping it in at the end of the chain, where Vafseo is working earlier and using the bodies and trying to help the body naturally stimulate erythropoietin. And so what we see is instead of a large bolus of ESA going in and then over time declining, Vafseo from an EPO effect actually has very minor, but consistent increases in EPO levels that leads to a more consistent treatment paradigm. And we believe that more consistent treatment paradigm will lead to better outcomes. Obviously, the VOICE trial is out there trying to prove that.

In addition, you're getting ancillary benefits, iron mobilization. In order to make a healthy red blood cell and oxygen, you kind of need two things, erythropoietin and iron. And so having iron mobilization is a very interesting way to be able to get a dual mechanism of action around how do you treat these patients appropriately.

That's great. And congratulations on the progress that you guys have had. You're 2 full quarters into the launch so far. Would love to get some perspectives on the progress that you guys have made and sort of what has been the response that you have seen from prescribers and from docs that are in the space?

Yes. We've been overwhelmingly happy with the advocacy, the interest from physicians. Let's be honest, they've been waiting for a HIF-PHI for quite some time. And so it's really great that we've been welcomed with open arms. We do peer-to-peer engagement programs and record attendance at those, which has been great by both physicians and clinic staff.

When we think about how that translates into, we'll call it the results, Erik alluded to the 725 physicians, on average, 30 prescriptions. Right now, our primary customer is USRC. The other organizations are going through the protocoling process, which we'll talk about, I imagine, in a little bit. But from a USRC perspective, over 80% of their physicians have written a prescription of Vafseo. Over 80% of their clinic have prescribed Vafseo. And so when you think of demand growth of 55% Q2 versus Q1, it's really that core physician base expanding and going deeper.

The other thing we're very happy to see is dose. Dose -- making sure patients are on the right dose is so important to controlling any disease state, anemia in particular. And so when we think about dose, it's been increasing. They've been titrating up from the starting dose of 300-milligram. We've seen about a 25% to 30% increase in dose as patients continue to get refills. And that dose level is approximating what we saw in the INNO2VATE-style study, which is our pivotal study that led to approval.

Sometimes when you put a product into clinical practice, the actual results don't actually match up with your study. It's good to actually see that we're seeing what we saw there. And good for patients. They're getting to the right dose. Their anemia is controlled. And frankly, 25% more dose means it's 25% more revenue.

Yes. I mean I can't imagine the inertia that continues to exist with nephrologists that have treated dialysis patients for a long time in order to get them to convert over to writing and getting comfortable in prescribing a new drug. It's a lot of leg work. And so congrats on that. Yes.

I know you mentioned a little bit earlier like this growth from 40,000 up to 275,000 potential prescribers by the end of this year. Would love to get just a little bit more granular around sort of how that is progressing, like what the steps are, sort of what that looks like and how you guys see it moving forward?

Yes. So when you think about the dialysis market, it is -- a majority of the dialysis population sits in we call the top 5 dialysis organizations. There's Fresenius and DaVita that both have over 200,000 patients. They're the big -- the larger LDOs as we call them.

And then you have a group of midsized dialysis organizations that includes U.S. Renal Care at about 36,000 patients, IRC and DCI both have about 16,000 patients.

When we think about where we were in the first half of the year, USRC was the vast majority of our sales. They protocolized quickly. We are thankful for their partnership. They are advocates for the product. And so when you think about that 40,000, it was USRC and a bunch of IDOs, SDOs. I call them dogs and cats, but a lot of smaller ones in there, maybe they have 1,000 patients, 250 patients, 400 patients, and that made up the 40,000.

While we think there's still growth opportunity in that segment, when we look to transition further, it's really going deeper into that. And so we look at what's happening in Q3. We announced a week ago that IRC at 16,000 has protocolized the product and it's available for prescribing. So prescribing access has been achieved. We expect DCI to come on here in the third quarter as well. And so that's really the number 4 and 5 will be protocolized, prescribing access achieved in quarter 3.

More importantly, the DaVita pilot, right? So DaVita being 200,000, 204,000 patients.

Big name.

Big name. And they've initiated what they call an operational pilot. Over 100 clinics. It's not to check safety and efficacy. It's really to make sure all the systems talk to each other. When you're that complex with thousands of clinics, you want to make sure everything works right. And so they're over 100 clinic pilot would make them just about the fifth largest dialysis organization. The pilot alone.

And so it's massive and really important for us to get right. And so we're partnering with them well. That kicked off kind of middle of August. Folks are initiating patients on therapy. We're really pleased with where the DaVita pilot is going. Now that's -- the pilot is going to last about 3 months. And when successful, they'll open that product up and allow all of their physicians for their 204,000 patients to prescribe. And that's really the goal that you add all those numbers together and you get to these 275,000 patients available by year-end.

Got it. No, that's impressive. And it came up a couple of times, and I think we should probably talk about it just a little bit, but what is the process of moving the drug into a new dialysis organization. So from contract to protocol to actual prescriptions, like what does that look like? And how -- I can't imagine how detailed it is, but I bet there's a lot of different steps to it.

Yes. Dialysis is always fairly unique, right? And so when I think about it is you have to have a product that has clinical value. But you also have to have an economic value and patients have to be reimbursed. And so how do you get that economic value with dialysis organizations? Well, you need to contract them with them to make sure that they're being reimbursed appropriately for the products versus what they're paying for it. And so really proud that prior to launch, we had 100% of patients at dialysis organizations having access to contracts and representing a favorable economic value proposition.

Then you go into the clinical world where you're working with the clinical side of the dialysis organizations around educating them about the product, the published data, the label, where they can use it. And with that education, they say, "we want to use it here or in this patient population." So they write a protocol.

The last step of that is they actually have to put the protocol into the system. They have to train their staff. They have to make sure all the systems talk to each other. And so we call that operationalizing the protocol. And so those are the 3 steps. And once it's operationalized, then our teams are able to go in there and work with physicians, further educate them, help them identify patients and then we're off and running.

And so are you working hand in hand with them to establish those protocols in the setup? Or is it largely internalized inside of the dialysis.

Yes. Our medical team has done a wonderful job educating. It's really around us educating on the breadth of science because as you're probably aware, your label is just a small piece of the data that you've accumulated for the product over time. And so helping them put that in context, helping educate them on the breadth of the data and then they're really making the decisions around it. As they go through the initiation, they may want to make tweaks to their protocol, and we're actively helping educate on whether those tweaks are good, bad, indifferent. And so it's a partnership, but they're responsible for ultimately writing the protocol.

Great. I think one of the things that I was coming up to speed before we met last year was around the importance of TDAPA and sort of what that means as far as like reimbursement in the first 2 years of the launch. And so for the group that's here and has joined us online, I think it would be great to get pretty detailed around sort of what that means and what that looks like.

Yes. CMS really looked at this space and said, hey, if we go to a bundled payment for each dialysis session, you're likely to squash innovation. And so what they did is they created TDAPA, the Transitional Drug Add-On Payment Adjustment. What that is, is an additional payment outside of the bundled rate in addition to the bundled rate for INNO2VATE therapies. It lasts typically 2 years long. And products have to qualify for it. So you have to submit, qualify and be granted TDAPA status, if you will, and then Vafseo has done that.

And so this additional payment is utilized to incentivize dialysis organizations to try innovative therapy. And that's the thing. If you look at ESAs, they're in the bundled rate. And they're in the bundled rate at about $15 of the $274 per treatment that's ESA related. When you utilize a TDAPA product, you no longer incur the $15 cost associated with ESA. You still get $274. You no longer incur the $15 cost, and you get an additional payment for Vafseo. So there's a cost avoidance and an economic profitability component associated with the purchase of Vafseo. Those things -- two things together allow them to try these innovative therapies.

And so the TDAPA program lasts for 2 years. And then post expiration, what does the world look like after that?

Yes. We've talked often. I mean we work with dialysis organizations prior to launch. And really going out there is we want to make sure patients can continue on therapy with Vafseo. Some of the prior products we have launched in the space really didn't have an answer for what happens post-TDAPA.

Our answer is we're going to match the ESA pricing. And so we're going to be very similar to the ESAs that are on the market today, therefore, making sure that there is not a financial disincentive for dialysis organizations and for physicians. Physicians hate putting a patient on therapy and then having to take them off the therapy they're doing well on and put them back on something that they might not do well on. And so they don't want to have that cycling of patients in and out of therapy. We think we've got a solution to that with the matching of the ESA pricing.

And that pricing transparency, we think is really important to becoming standard of care. We talked about other key elements. It all starts with the clinical value proposition. But that price transparency, the continuation of data generation, we talked about voice as well. If you have these 3 elements, again, we really think you're in a good spot to become the standard of care.

And I think that's a great position to transfer into VOICE, just to understand what that program, what it looks like, what it can mean for the organization and sort of the time lines around when you guys are expecting to have some data that comes from that side?

Yes. Maybe I'll start and then maybe kick it to Erik if he's got additional comments is when you think about a patient population, the VOICE study is really two things, using the products 3 times a week in the clinic. And so you eliminate some compliance challenges, et cetera, et cetera. That patient is well controlled in a TIW setting. And so it's off-label. But having a proof out there and data out there that you can use it is important for physicians to understand.

Secondly, hospitalization and mortality. When you think about the costs that Erik alluded to in this hospitalization rate, on average, a dialysis patient is hospitalized twice a year. On average, each of those hospitalization costs about $60,000 a year. So there's about $120,000 of cost in that system that the DOs are on the hook for a portion of it. So if you can eliminate that by 10% per patient, that's a $12,000 cost savings per patient, massive. Importantly, when the patient is in the hospital, they're not in the chair. So you're not collecting your $274, right? And so that $274 is a meaningful piece if they're out of the chair for a significant portion.

They're not being dialyzed at the hospital.

They're being dialyzed at the hospital or God forbid forgoing dialysis. And so the economic benefit for dialysis organization is, I won't say obvious, but a big number. Patients do better when they're not in the hospital, right? And so being able to keep patients out of the hospital, hopefully being able to demonstrate a mortality impact.

We're in the business of working with dialysis and CKD patients to benefit them and improve their lives. You don't do that without being able to show a positive outcome in mortality or hospitalization. And so this is a cornerstone of kind of how we think about building the evidence generation for that dialysis population.

That's great. That's great.

Yes. And I'd just add, maybe it's intuitive, but that NDD label expansion would provide great synergies from a financial infrastructure perspective, right, sales force synergies, manufacturing synergies, general infrastructure synergies. So a really nice add-on to what the product portfolio stands today.

Yes. That's interesting. And so like thinking about non-dialysis patients, like how early could Vafseo be used? Like is it patients that are truly like Stage 5, end-stage renal disease? Or could you drop back to Stage 4, Stage 3 depending on where their GFR is? Like what is applicable here? And sort of like when I think of the world around like non-dialysis patients in anemia, like you've got oral iron, IV iron, you've got ESAs and then you're adding this on, where could this potentially fall in that range of treatments that would be available?

Yes, it's a great question. I mean patients start being anemic in kind of around Stage 3, right? Now they increase the percentage of those populations that are anemic from 3 to 4 to 5 as patients progress, the percentage of those populations that become anemic grows, but there's applicability in all 3 of those stages.

The thing about that market is, yes, ESA is available, but they've been declining in use. Just under 30% of patients today who have anemia in non-dialysis are being treated with an ESA. That's a decrease from nearly where it was 50% of patients being treated a number of years ago. It found up 28%.

The question is why? They're not any less anemic. And so when you look at the why is ESAs are really a rescue therapy. When you think about how insurance companies and how physicians are using it, they're not allowed to use an ESA until their hemoglobin drops below 10. And so you have a patient that comes in, they're anemic, they get a shot of an ESA, it goes up, it starts to come down. They can't actually treat proactively until it goes below 10, then they treat again. And you get this hemoglobin cycling that we talk about.

And physicians are really worried about are they -- what's the risk benefit there? Are they doing more harm than good, if you will? And so they wait or they don't use them, and they use it as a rescue therapy. You see transfusions in that population going up. And if you get a transfusion, you reduce your eligibility for a kidney transplant. That's a massive patient concern.

If you're now move down the list or you have to wait, imagine every time you get a transfusion, you can't receive a transplant for 90 days. If the call comes and there's a match and you're in that ineligible period, you have to forgo it. And hopefully, one other one will come up. Massive issue from a patient satisfaction, patient progression standpoint.

We view an oral therapy, Vafseo, being able to kind of smooth out that hemoglobin cycling instead of being a rescue therapy being a maintenance therapy, folks being well controlled over periods of time and not taking them off transplant lives, not increasing the cardiovascular risk associated with those patients.

No, that's a really interesting point to consider, especially around becoming ineligible for a transplant. That is not something that I considered in the past. Just to shift back a little bit around to the launch, has there been anything in the commercial launch that has surprised you?

It's interesting is I haven't known this for way too long probably. But when you think about a launch, this one was particularly interesting is binders, phosphate binders are also going in the bundle at the same time. While we knew there would be disruption from that, we didn't recognize where -- how much disruption. The larger dialysis organizations kind of had it on rail. They can work their way through it. Their disruptions were relatively minimal. But the medium-sized to smaller folks, it took them longer. It's a bigger cost item that was shifting for them. And so they had to take care of binders first. And so that took them some time. I think that resulted in us shifting where we're going to get more access to patients later in the year. And so that maybe is the surprise of maybe looking at that disruption and thinking it was going to be more manageable.

And maybe that's a good point to segue into Auryxia, your other product that's been out there that lost exclusivity earlier this year. What are -- how has that product continued to fare? Do you see any potential competition that's coming up on the horizon? Any insight into that?

Yes. Auryxia is interesting is -- it's been on the market just about 11 years. It's a well-understood clinical profile. Physicians really want to use Auryxia for all of its benefits around controlling phosphorus. It's always been plagued with a lower access profile than most.

In some ways, our contracting strategy has increased the number of addressable patients. And so what we see is we'll call it a resurgence of Auryxia, which has been really good from a P&L perspective, cash flow perspective, patient perspective, but we also know that it might be a little short-lived here. I don't know, Erik, if you want to add commentary on to that one.

Yes. No, I mean, I would reiterate, yes, we're obviously really pleased, right? I mean Auryxia has shown since losing IP exclusivity, quarterly year-over-year increase -- sequential quarterly increase in revenues. There's an authorized generic, but obviously, no incremental generic competition yet. So we budget conservatively for Auryxia. And the longer we go without incremental generic competition is really just more upside to our internal forecast.

No, it's good insight. And it's good to see the product has hung in there as well as it has over the last couple of quarters. Fantastic.

And then maybe just to close out, I know you guys raised some cash earlier this year. You're starting to generate revenue. What is sort of the financial projections and the position of the company as it stands now?

Yes. Really happy with our financial position, ended the second quarter with $137 million in cash. As mentioned, we are financed to profitability. And when we look at that guidance, we take into account. Obviously, revenues coming in from the products, but we also take into account the expense side, including the cost of the planned NDD trial.

No, that's great. And I really appreciate the opportunity to meet with you guys here today. I don't know if there's any closing statements that you want to provide. But if not, it's been great to have you here at the conference and to participate in our fireside chat again this year. It looks really good.

Yes. No, thank you very much. It was great to be here.

Awesome. Yes. Thanks, guys.