Akebia Therapeutics Inc.
11/10/2025 | Press release | Distributed by Public on 11/10/2025 06:36
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the United States, or U.S., Securities and Exchange Commission, or the SEC, on March 13, 2025, or the 2024 Form 10-K. In addition to historical information, the following discussion and analysis contains forward-looking statements that reflect our plans, estimates, beliefs and explanations that involve significant risks and uncertainties. As a result of many factors, such as those set forth under "Risk Factors" in Part II, Item 1A. of this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements.
Business Overview
We are a fully integrated biopharmaceutical company with two commercial products for patients impacted by kidney disease. We have built a business focused on developing and commercializing innovative therapeutics that we believe serves as a foundation for future growth. Our team has significant expertise in hypoxia-inducible factor, or HIF, science having developed and commercialized Vafseo® (vadadustat), an oral HIFfactor prolyl hydroxylase, or HIF-PH, inhibitor and have selected two additional HIF-based molecules for preclinical development.
We have established the company as a leader in the kidney community, and we believe our cross-organizational expertise in renal disease positions the company for success. Chronic kidney disease, or CKD, is a condition in which the kidneys are progressively damaged to the point that they cannot properly filter the blood circulating in the body. This damage causes waste products to build up in the patient's blood, leading to other health problems, including anemia, cardiovascular disease and bone disease. CKD significantly impacts the U.S. healthcare system, potentially affecting approximately 37 million patients and costing Medicare nearly $125 billion annually for treating Medicare beneficiaries with CKD or end-stage renal disease, or ESRD, according to the Centers for Disease Control and Prevention. Our two commercial products address certain complications of kidney disease.
Our current portfolio includes:
Vafseois an orally administered medicine that was approved by the U.S. Food and Drug Administration, or the FDA, in March 2024 for the treatment of anemia due to CKD in adult patients on dialysis for at least three months. Shipment of Vafseo commenced in January 2025. We have commercial supply agreements for the purchase of Vafseo in place with dialysis organizations caring for nearly 100% of dialysis patients in the U.S. The current U.S. market opportunity for the treatment of anemia due to CKD in patients with dialysis is approximately $1 billion based on current erythropoiesis stimulating agent, or ESA, pricing and Vafseo is the only oral HIF-based treatment available in the U.S.
We recently completed a Type C meeting with the FDA and, while we have not yet received final minutes from the meeting, based on the FDA feedback, we have not come to alignment regarding a path forward for the design of the VALOR clinical trial for the use of vadadustat to treat anemia in patients with late-stage CKD not on dialysis. As a result, we do not plan to initiate VALOR and therefore do not expect to pursue a broad label for Vafseo for CKD non-dialysis dependent patients.
In the European Union, or EU, the United Kingdom, or UK, Switzerland and Australia, Vafseo is approved for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis. Our partner MEDICE Arzneimittel Pütter GmbH & Co. KG, or Medice, has an exclusive license to develop and commercialize Vafseo for the treatment of anemia in patients with CKD in defined territories and launched Vafseo in Germany, Austria, Switzerland, the Netherlands and certain other countries in Europe.
In Japan, Vafseo is approved as a treatment for anemia due to CKD in both dialysis dependent and non-dialysis dependent patients and is marketed and sold by our collaborator Mitsubishi Tanabe Pharma Corporation, or MTPC. In Taiwan, Vafseo is approved for the treatment of symptomatic anemia due to CKD in adult patients on chronic maintenance dialysis and launched in October 2024 by Tai Tien Pharmaceutical Company, an affiliate of MTPC. In Korea, Vafseo is approved as an anemia treatment for patients with CKD on hemodialysis.
Auryxia® (ferric citrate)is an orally administered medicine approved and marketed in the U.S. for two indications: (1) the control of serum phosphorus levels in adult patients with dialysis dependent chronic kidney disease, or DD-CKD, and (2) the treatment of iron deficiency anemia, or IDA, in adult patients with non-dialysis-dependent chronic kidney disease, or NDD-CKD.
Today, we market Auryxia in the U.S. Auryxia became part of our portfolio in 2018 and has historically contributed meaningful revenue to the business. In March 2025, Auryxia lost exclusivity, or LoE. We believe the dynamics of Auryxia reimbursement being included in the ESRD bundle could result in a slower revenue decline after the LoE date
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than in other LoE situations, but the impact of LoE on future Auryxia revenues will depend on many factors, including our ability to maintain contracts with dialysis organizations, the timing and number of additional generics and the pricing of generics and other products on the market that compete with Auryxia.
Ferric citrate hydrate has also been approved in Japan, and is marketed and sold by our Japanese sublicensee, Japan Tobacco, Inc., and its subsidiary, Torii Pharmaceutical Co., Ltd., collectively, JT and Torii, as an oral treatment for the improvement of hyperphosphatemia in patients with CKD, including DD-CKD and NDD-CKD, and for the treatment of adult patients with IDA under the trade name Riona in Japan. Averoa SAS, or Averoa, has an exclusive license to develop and commercialize ferric citrate in the European Economic Area, or EEA, Turkey, Switzerland, the UK, the Balkans and certain countries in Eastern Europe and the Middle East. Averoa applied for marketing authorization for ferric citrate in Europe in April 2024. In March 2025, the Committee for Medicinal Products for Human Use of the European Medicines Agency adopted a positive opinion recommending the European Commission, or EC, to approve Averoa's marketing authorization. The EC granted marketing authorization in June 2025. In November 2025, the Medicines and Healthcare Products Regulatory Agency, or MHRA, granted Averoa's UK marketing authorization. However, Averoa has not yet obtained pricing authorization nor commenced sales of ferric citrate in Europe or UK.
Our HIF-based product candidates and other pipeline assetsare being evaluated to target areas of unmet needs. The discovery of HIF laid the foundation to explore the central role of oxygen sensing in many diseases. As we have seen through the development of Vafseo as a treatment for anemia due to CKD, when stabilized, HIF triggers wide-ranging adaptive, protective responses during hypoxic or ischemic conditions. We have selected two additional HIF molecules for preclinical development: AKB-9090, potentially for cardiac surgery-related acute kidney injury, or CS-AKI, or acute respiratory distress syndrome, or ARDS, and AKB-10108 for retinopathy of prematurity, or ROP, in neonates.
In June 2021, we acquired from Cyclerion Therapeutics, Inc., or Cyclerion, an exclusive global license under certain intellectual property rights to research, develop and commercialize praliciguat, an investigational oral soluble guanylate cyclase, or sGC, stimulator. We believe there is potential to explore the use of praliciguat for indications within kidney disease.
We continue to explore additional commercial and development opportunities to expand our pipeline and portfolio of novel therapeutics through both internal research and external innovation to leverage our fully integrated team.
Factors Affecting Our Performance and Results of Operations
Financial Components
Product Revenue
We generate product revenue from commercial sales of Auryxia and Vafseo to a limited number of customers, including dialysis organizations, wholesale distributors, certain specialty pharmacy providers and our authorized generic distribution partner, Mylan Therapeutics, Inc., or AG Partner. Our net product revenue includes many variables, including judgments and estimates of discounts, rebates and product returns, which can fluctuate from quarter-to-quarter and year-over-year.
We had exclusive rights under a series of patents and patent applications to commercialize Auryxia in the U.S. that protected us from generic drug competition until March 20, 2025. Following LoE, since March 2025, our AG Partner has been selling an authorized generic version of Auryxia in the U.S. The impact of LoE on future Auryxia revenues will depend on many factors, including our ability to maintain contracts with dialysis organizations, the timing and number of additional generics and the pricing of generics and other products on the market that compete with Auryxia.
License, Collaboration and Other Revenue
License, collaboration and other revenue includes revenue earned under our agreements with our partners, including license fees, royalty payments and revenue from product we supply.
We expect to continue to generate revenue from our collaboration, license and supply agreements with Medice, MTPC, JT and Torii and any other collaborations into which we have entered or may enter.
Cost of Goods Sold
Cost of goods sold, or COGS- Cost of product and other revenue includes costs closely correlated or directly related to the costs to manufacture commercial drug substance and drug product, including at our contract manufacturing organizations, or CMOs, as well as indirect costs. Direct and indirect costs include fees for packaging, shipping, insurance and quality assurance, idle capacity charges, changes in reserves for excess inventory, write-offs for inventory that fails to meet specifications or is otherwise no longer suitable for commercial sale, including scrap, changes in our firm purchase commitment liability and royalties due to the licensor of Auryxia related to U.S. and Japan product sales recognized during the period.
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Cost of product and other revenue also includes costs to manufacture drug product provided to MTPC and Medice for commercial sales of Vafseo in Japan and in the EEA, the UK, Switzerland and Australia, or collectively the Medice Territory, respectively, as well as to our AG Partner. In addition, cost of product and other revenue includes personnel-related costs, including salaries and bonuses, employee benefits and stock-based compensation attributable to employees in particular functions and associated directly with the manufacturing of our commercial products.
Cost of product and other revenue for a newly launched product does not include the full cost of manufacturing until the initial pre-launch inventory is depleted and additional inventory is manufactured and sold. Until we received regulatory approval for Vafseo in the U.S., we recorded costs incurred to manufacture the U.S. pre-launch inventory, such as raw materials, drug substance and drug product conversion costs as research and development, or R&D, expense.
Cost of goods sold - Amortization of intangible asset- In addition, COGS included the amortization of development product rights for Auryxia through the end of 2024.
Research and Development Expenses
R&D expenses consist primarily of costs incurred for the development of Vafseo and costs associated with our pipeline which includes:
•personnel-related expenses, including salaries, bonuses, employee benefits, stock-based compensation and travel expenses for employees engaged in R&D functions;
•costs associated with feasibility and potential new manufacturing processes and methods for our commercial products;
•regulatory registration and related fees for non-commercial products;
•expenses incurred under agreements with contract research organizations, or CROs, and investigative sites that conduct our clinical trials;
•the cost of acquiring, developing and manufacturing clinical trial materials through CMOs;
•facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies associated with our laboratory space as well as our R&D team;
•costs associated with discovery and development for preclinical, clinical and regulatory activities; and
•costs associated with the pre-launch inventory build for Vafseo in the U.S. prior to the FDA approval in March 2024.
R&D costs are expensed as incurred. Advance payments made for goods or services to be received in the future for use in R&D activities are recorded as prepaid expenses and other current assets. The prepaid amounts are expensed as the benefits are consumed. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors and our clinical sites.
We cannot determine with certainty the duration and completion costs of our R&D projects, the costs of related clinical development, or if, when, or to what extent we will generate revenue from the commercialization or sale of any of our product candidates.
From inception through September 30, 2025, we have incurred $1.7 billion in R&D expenses. We expect to incur significant R&D expenditures for the foreseeable future as we continue the development of Auryxia, Vafseo and any other product or product candidate, including those that may be in-licensed or acquired.
A significant portion of our R&D costs have been external costs, which we track on a program-by-program basis as well as costs related to possible new manufacturing processes and methods associated with our commercial products. These external costs include fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical trials and costs related to acquiring and manufacturing clinical trial materials, including costs paid to CMOs to manufacture clinical trial materials.
We do not track our internal personnel and facilities costs on a program-by-program basis as our personnel are deployed across multiple R&D projects.
Each of our products and product candidates has technical, clinical, regulatory, and commercial risk, including those discussed more fully under the heading "Risk Factors" in Part II, Item 1A of this Form 10-Q. A change in the outcome of any of the variables with respect to the development of Auryxia, Vafseo or any other product or product candidate could result in a significant change in the costs and timing associated with that development.
Selling, General and Administrative Expenses
Selling, general and administrative, or SG&A, expenses consist primarily of compensation for personnel, including stock-based compensation related to commercial, marketing, executive, finance and accounting, information technology, corporate and
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business development and human resource functions. Other SG&A expenses include costs for marketing initiatives for our commercial products, market research and analysis on our commercial products and potential product candidates, conferences and trade shows, travel expenses, professional services fees (including legal, patent, accounting, audit, tax, and consulting fees), insurance costs, general corporate expenses and allocated facilities-related expenses, including rent and maintenance of facilities.
License Expenses
License expenses relate to royalties due to Panion & BF Biotech, Inc., or Panion, for sales of Auryxia in the U.S. and Riona in Japan.
Other Income (Expense), Net
Other income (expense), net consists primarily of interest income on our interest-bearing accounts, interest expense related to our term loans, accretion of the debt discount on our term loans as well as amortization of the discount on the liability related to the termination fees associated with the termination agreement with BioVectra Inc., or BioVectra, entered into in December 2022, or the BioVectra Termination Agreement. See Note 10, Commitments and Contingencies, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on the BioVectra Termination Agreement. Other income (expense) also includes non-cash interest on our liability related to settlement royalties and the amortization of the discount and deferred gain related to our Working Capital Fund (as defined below) liability to Vifor (International) Ltd. (now a part of CSL Limited), or CSL Vifor. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on our arrangements with CSL Vifor.
Change in Fair Value of Warrant Liability
Change in fair value of warrant liability relates to the change in fair value of our warrant liability related to a warrant agreement with Kreos Capital VII Aggregator SCSp, an affiliate of Kreos Capital VII (UK) Limited, or Kreos.See Note 3, Fair Value of Financial Instruments, and Note 7, Indebtedness, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on the warrant liability.
Recent Events
Public Offering of Common Stock
On March 19, 2025, we entered into an underwriting agreement, or the Underwriting Agreement, with Leerink Partners LLC and Piper Sandler & Co., as representatives of the several underwriters named therein, collectively, the Underwriters, relating to an underwritten public offering, or the Offering, of 25,000,000 shares, or the Shares, of our common stock. The offering price was $2.00 per share, and the Underwriters agreed to purchase the Shares from us pursuant to the Underwriting Agreement at a price of $1.88 per share. Under the terms of the Underwriting Agreement, we granted the Underwriters a 30-day option to purchase up to 3,750,000 additional shares of common stock, or the Additional Shares, at the public offering price per share, and the Underwriters partially exercised their option and purchased 850,000 Additional Shares on April 22, 2025.
Net proceeds from the Offering of the Shares were $46.5 million, after deducting underwriting discounts and commissions and estimated offering expenses and net proceeds from the Offering of the Additional Shares were $1.6 million, after deducting underwriting discounts and commissions and estimated offering expenses.
Borrowing Under BlackRock Term Loans
On February 3, 2025, we and Kreos, which are funds and accounts managed by BlackRock Inc., collectively, BlackRock, entered into the Second Amendment to the Agreement for the Provision of a Loan Facility, or the Second Amendment, which amended certain provisions of the Agreement for the Provision of a Loan Facility, dated January 29, 2024, or the BlackRock Credit Agreement. The BlackRock Credit Agreement provides for a senior secured term loan facility in the aggregate principal amount of up to $55.0 million, subject to certain customary conditions, or the Term Loan Facility.
The Term Loan Facility provided us access to three tranches: (i) an initial tranche of $37.0 million, which was funded on January 29, 2024, (ii) an additional tranche of $8.0 million, which was funded on April 19, 2024, and (iii) a final tranche of $10.0 million, which was available in a single draw through an expiry date of December 31, 2024, or the Prior Tranche C Loan. As a result of the Second Amendment, the Prior Tranche C Loan expiry date was extended until February 3, 2025, or the Extended Tranche C Loan. The terms of the Extended Tranche C Loan are substantially similar to the terms of the Prior Tranche C Loan, however, interest accrued on the Extended Tranche C Loan as if it was advanced on December 31, 2024.
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On February 3, 2025, we received $9.3 million on the Extended Tranche C Loan, after deducting debt issuance costs, interest, fees and expenses.
On February 3, 2025, in connection with the drawdown of the Extended Tranche C Loan, in accordance with the warrant agreement, dated as of January 29, 2024, between the Company and Kreos Capital VII Aggregator SCSp, or the Warrant Holder, we issued a warrant to the Warrant Holder to purchase 1,153,846 shares of our common stock, at an exercise price per share of $1.30. The warrant shall be exercisable for eight years from the date of issuance.
On July 21, 2025, the Warrant Holder exercised its option to purchase 2,115,384 shares of our common stock under the Initial Warrant on a cashless basis at an exercise price per share of $1.30. On July 23, 2025, as a result of the cashless exercise, we issued 1,408,588 shares to the Warrant Holder.
See Note 7, Indebtedness,in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.
At-the-Market (ATM) Offering
On September 3, 2024, in connection with the filing of a new shelf registration statement on Form S-3, we filed a prospectus related to our amended and restated sales agreement with Jefferies LLC (which amended and restated the prior sales agreement), pursuant to which we are able to offer and sell up to $75.0 million of our common stock at current market prices from time to time. From September 12, 2024 (the date our shelf registration statement on Form S-3 went effective) through December 31, 2024, we sold 14,271,631 shares of our common stock under this program with gross proceeds of $24.3 million ($23.8 million, net of offering expenses). During the nine months ended September 30, 2025, we sold 9,437,364 shares of our common stock under this program with gross proceeds of $18.7 million ($18.4 million, net of offering expenses).
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Results of Operations
Comparison of the Three Months Ended September 30, 2025 and 2024
| Three Months Ended September 30, | Change | |||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Product revenue, net | $ | 56,789 | $ | 35,592 | $ | 21,197 | 60 | % | ||||||||||||||||||
| License, collaboration and other revenue | 1,977 | 1,836 | 141 | 8 | % | |||||||||||||||||||||
| Total revenues | 58,766 | 37,428 | 21,338 | 57 | % | |||||||||||||||||||||
| Cost of goods sold | ||||||||||||||||||||||||||
| Cost of product and other revenue | 9,383 | 5,150 | 4,233 | 82 | % | |||||||||||||||||||||
| Amortization of intangible asset | - | 9,011 | (9,011) | (100) | % | |||||||||||||||||||||
| Total cost of goods sold | 9,383 | 14,161 | (4,778) | (34) | % | |||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Research and development | 14,944 | 8,487 | 6,457 | 76 | % | |||||||||||||||||||||
| Selling, general and administrative | 29,094 | 26,516 | 2,578 | 10 | % | |||||||||||||||||||||
| License | 896 | 769 | 127 | 17 | % | |||||||||||||||||||||
| Total operating expenses | 44,934 | 35,772 | 9,162 | 26 | % | |||||||||||||||||||||
| Income (loss) from operations | 4,449 | (12,505) | 16,954 | (136) | % | |||||||||||||||||||||
| Other expense, net | (4,758) | (6,678) | 1,920 | (29) | % | |||||||||||||||||||||
| Change in fair value of warrant liability | 1,464 | (856) | 2,320 | (271) | % | |||||||||||||||||||||
| Income (loss) before income taxes | 1,155 | (20,039) | 21,194 | (106) | % | |||||||||||||||||||||
| Income tax expense | (615) | - | (615) | * | ||||||||||||||||||||||
| Net income (loss) | $ | 540 | $ | (20,039) | $ | 20,579 | (103) | % | ||||||||||||||||||
| *Percentage change not meaningful. | |||||
Product Revenue, Net-Net product revenue is derived from sales of Auryxia and Vafseo in the U.S. We distribute Auryxia and Vafseo principally through a limited number of dialysis organizations, wholesale distributors, certain specialty pharmacy providers and our AG Partner.
Net product revenue was $56.8 million for the three months ended September 30, 2025, compared to $35.6 million for the three months ended September 30, 2024. The increase was primarily due to Vafseo's entry to the market in January 2025 and an increase in sales volumes of Auryxia.
Auryxia lost exclusivity in the U.S. in March 2025, which may have a negative impact on future Auryxia revenue. We believe the dynamics of Auryxia reimbursement being included in the ESRD bundle could result in a slower revenue decline after the LoE date than in other LoE scenarios. Additionally, since March 2025, our AG Partner has been selling an authorized generic version of Auryxia in the U.S., which may slightly offset a revenue decline following the LoE. However, our ability to continue to generate revenue from sales of Auryxia following LoE will depend on many factors, including our ability to maintain contracts with dialysis organizations, the timing and number of additional generics that enter the market and the pricing of generics and other products on the market that compete with Auryxia.
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The following table summarizes our product revenue by product for the three months ended September 30, 2025 and 2024 (in thousands):
| Three Months Ended September 30, | |||||||||||
|
Product
|
2025 | 2024 | |||||||||
|
Vafseo(1)
|
$ | 14,322 | $ | - | |||||||
|
Auryxia(2)
|
42,467 | 35,592 | |||||||||
|
Total product revenues
|
$ | 56,789 | $ | 35,592 | |||||||
(1) Vafseo entered the U.S. market in January 2025.
(2) Includes the authorized generic version of Auryxia sold and distributed by our AG Partner during the three months ended September 30, 2025.
License, Collaboration and Other Revenue-License, collaboration and other revenue was $2.0 million for the three months ended September 30, 2025, compared to $1.8 million for the three months ended September 30, 2024.
Cost of Goods Sold-Cost of Product and Other Revenue-Cost of product and other revenue was $9.4 million for the three months ended September 30, 2025 compared to $5.2 million for the three months ended September 30, 2024. The increase was primarily due to higher Auryxia volume during the three months ended September 30, 2025. In addition, cost of product and other revenue for the three months ended September 30, 2024 was offset by a $3.7 million benefit that we recorded due to our ability to sell inventory previously written-down as excess inventory during the three months ended September 30, 2024.
We began capitalizing our Vafseo costs in March 2024, in connection with the FDA's approval of Vafseo for the treatment of anemia due to CKD in adult patients on dialysis for at least three months. Prior to the capitalization of Vafseo inventory costs, such costs were recorded as research and development expenses in the period incurred. Cost of product and other revenue for Vafseo was $0.5 million for the three months ended September 30, 2025, comprised of manufacturing and overhead costs as the associated inventory costs such as raw materials, drug substance and drug product conversion costs were expensed previously. If Vafseo inventory sold during the three months ended September 30, 2025 was valued at cost, our cost of product and other revenue would have been $1.6 million. As of September 30, 2025, we had $25.4 million of reduced-cost Vafseo inventory. We expect our cost of product and other revenue for Vafseo will increase, reflecting the full cost of manufacturing, subsequent to the utilization of our reduced-cost Vafseo inventory.
Cost of Goods Sold-Amortization of Intangible Asset-Amortization of intangible asset related to the acquired developed product rights for Auryxia was amortized using a straight-line method over its estimated useful life of approximately six years. Our intangible asset was fully amortized as of December 31, 2024. We recorded no amortization expense and $9.0 million in amortization expense for the three months ended September 30, 2025 and 2024, respectively, related to the developed product rights for Auryxia.
R&D Expenses-R&D expenses were $14.9 million for the three months ended September 30, 2025, compared to $8.5 million for the three months ended September 30, 2024. The increase was primarily driven by increased clinical trial activities related to Vafseo and higher headcount related costs.
The following table summarizes our external research and development expenses by program, as well as costs not allocated to programs, for the three months ended September 30, 2025 and 2024 (in thousands):
| Three Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Vafseo clinical trial and other external costs | $ | 7,154 | $ | 3,046 | |||||||
| External costs for other programs, including feasibility and new processes and methods associated with commercial product | 1,386 | 1,462 | |||||||||
| Total external R&D expenses | 8,540 | 4,508 | |||||||||
| Internal personnel, consulting, facilities and other | 6,404 | 3,979 | |||||||||
| Total R&D expenses | $ | 14,944 | $ | 8,487 | |||||||
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We expect to incur significant R&D expenses in future periods in support of ongoing or planned studies with respect to the development of our product candidates as well as Vafseo.
Selling, General and Administrative Expenses-Selling, general and administrative expenses were $29.1 million for the three months ended September 30, 2025, compared to $26.5 million for the three months ended September 30, 2024. The increase was largely due to higher marketing costs in connection with the Vafseo U.S. launch and increased headcount related costs during the three months ended September 30, 2025.
License Expenses-License expenses related to royalties due to Panion relating to sales of Riona in Japan were $0.9 million and $0.8 million for the three months ended September 30, 2025 and 2024, respectively.
Other Expense, Net-Other expense, net, was $4.8 million for the three months ended September 30, 2025, compared to $6.7 million for the three months ended September 30, 2024. The decrease was primarily due to increased interest income related to our money market funds which offset interest expense during the three months ended September 30, 2025.
Change in Fair Value of Warrant Liability-Change in fair value of warrant liability was $1.5 million and $0.9 million for the three months ended September 30, 2025 and 2024, respectively.
Income Tax Expense-Income tax expense was $0.6 million for the three months ended September 30, 2025. There was no income tax expense for the three months ended September 30, 2024.
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Comparison of the Nine Months Ended September 30, 2025 and 2024
| Nine Months Ended September 30, | Change | |||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | $ | % | ||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||
| Product revenue, net | $ | 173,041 | $ | 107,810 | $ | 65,231 | 61 | % | ||||||||||||||||||
| License, collaboration and other revenue | 5,533 | 5,873 | (340) | (6) | % | |||||||||||||||||||||
| Total revenues | 178,574 | 113,683 | 64,891 | 57 | % | |||||||||||||||||||||
| Cost of goods sold | ||||||||||||||||||||||||||
| Cost of product and other revenue | 26,927 | 15,780 | 11,147 | 71 | % | |||||||||||||||||||||
| Amortization of intangible asset | - | 27,032 | (27,032) | (100) | % | |||||||||||||||||||||
| Total cost of goods sold | 26,927 | 42,812 | (15,885) | (37) | % | |||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Research and development | 35,711 | 25,866 | 9,845 | 38 | % | |||||||||||||||||||||
| Selling, general and administrative | 81,391 | 78,870 | 2,521 | 3 | % | |||||||||||||||||||||
| License | 2,493 | 2,242 | 251 | 11 | % | |||||||||||||||||||||
| Restructuring | - | 58 | (58) | (100) | % | |||||||||||||||||||||
| Total operating expenses | 119,595 | 107,036 | 12,559 | 12 | % | |||||||||||||||||||||
| Operating income (loss) | 32,052 | (36,165) | 68,217 | (189) | % | |||||||||||||||||||||
| Other expense, net | (19,177) | (11,269) | (7,908) | 70 | % | |||||||||||||||||||||
| Change in fair value of warrant liability | (5,361) | 1,345 | (6,706) | (499) | % | |||||||||||||||||||||
| Loss on extinguishment of debt | - | (517) | 517 | (100) | % | |||||||||||||||||||||
| Income (loss) before income taxes | 7,514 | (46,606) | 54,120 | (116) | % | |||||||||||||||||||||
| Income tax expense | (615) | - | (615) | * | ||||||||||||||||||||||
| Net income (loss) | $ | 6,899 | $ | (46,606) | $ | 53,505 | (115) | % | ||||||||||||||||||
| *Percentage change not meaningful. | |||||
Product Revenue, Net-Net product revenue is derived from sales of Auryxia and Vafseo in the U.S. We distribute Auryxia and Vafseo principally through a limited number of dialysis organizations, wholesale distributors, certain specialty pharmacy providers and our AG Partner.
Net product revenue was $173.0 million for the nine months ended September 30, 2025, compared to $107.8 million for the nine months ended September 30, 2024. The increase was primarily due to Vafseo's entry to the market in January 2025 and an increase in sales volumes of Auryxia.
Auryxia lost exclusivity in the U.S. in March 2025, which may have a negative impact on future Auryxia revenue. We believe the dynamics of Auryxia reimbursement being included in the ESRD bundle could result in a slower revenue decline after the LoE date than in other LoE scenarios. Additionally, since March 2025, our AG Partner has been selling an authorized generic version of Auryxia in the U.S., which may slightly offset a revenue decline following the LoE. However, our ability to continue to generate revenue from sales of Auryxia following LoE will depend on many factors, including our ability to maintain contracts with dialysis organizations, the timing and number of additional generics that enter the market and the pricing of generics and other products on the market that compete with Auryxia.
Akebia Therapeutics, Inc. | Form 10-Q | Page 38
The following table summarizes our product revenue by product for the nine months ended September 30, 2025 and 2024 (in thousands):
| Nine Months Ended September 30, | |||||||||||
|
Product
|
2025 | 2024 | |||||||||
|
Vafseo(1)
|
$ | 39,635 | $ | - | |||||||
|
Auryxia(2)
|
133,406 | 107,810 | |||||||||
|
Total product revenues
|
$ | 173,041 | $ | 107,810 | |||||||
(1) Vafseo entered the U.S. market in January 2025.
(2) Includes the authorized generic version of Auryxia sold and distributed by our AG Partner during the nine months ended September 30, 2025.
License, Collaboration and Other Revenue-License, collaboration and other revenue was $5.5 million for the nine months ended September 30, 2025, compared to $5.9 million for the nine months ended September 30, 2024. The decrease was primarily due to revenue recognized in connection with our supply agreement with MTPC during the nine months ended September 30, 2024.
Cost of Goods Sold-Cost of Product and Other Revenue-Cost of product and other revenue was $26.9 million for the nine months ended September 30, 2025 compared to $15.8 million for the nine months ended September 30, 2024. The increase was primarily due to higher Auryxia volume during the nine months ended September 30, 2025. In addition, cost of product and other revenue for the nine months ended September 30, 2024 was offset by a $12.3 million benefit that we recorded due to our ability to sell inventory previously written-down as excess inventory during the nine months ended September 30, 2024. We also recorded a charge of $2.1 million related to our firm purchase commitment liability during the nine months ended September 30, 2024.
We began capitalizing our Vafseo costs in March 2024, in connection with the FDA's approval of Vafseo for the treatment of anemia due to CKD in adult patients on dialysis for at least three months. Prior to the capitalization of Vafseo inventory costs, such costs were recorded as research and development expenses in the period incurred. Cost of product and other revenue for Vafseo was $2.4 million for the nine months ended September 30, 2025, comprised of manufacturing and overhead costs as the associated inventory costs such as raw materials, drug substance and drug product conversion costs were expensed previously. If Vafseo inventory sold during the nine months ended September 30, 2025 was valued at cost, our cost of product and other revenue would have been $4.6 million. As of September 30, 2025, we had $25.4 million of reduced-cost Vafseo inventory. We expect our cost of product and other revenue for Vafseo will increase, reflecting the full cost of manufacturing, subsequent to the utilization of our reduced-cost Vafseo inventory.
Cost of Goods Sold-Amortization of Intangible Asset-Amortization of intangible asset related to the acquired developed product rights for Auryxia was amortized using a straight-line method over its estimated useful life of approximately six years. Our intangible asset was fully amortized as of December 31, 2024. We recorded no amortization expense and $27.0 million in amortization expense for the nine months ended September 30, 2025 and 2024, respectively, related to the developed product rights for Auryxia.
R&D Expenses-R&D expenses were $35.7 million for the nine months ended September 30, 2025, compared to $25.9 million for the nine months ended September 30, 2024. The increase was primarily due to clinical trial activities related to Vafseo and higher headcount related costs.
The following table summarizes our external research and development expenses by program, as well as costs not allocated to programs, for the nine months ended September 30, 2025 and 2024 (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Vafseo clinical trial and other external costs | $ | 14,914 | $ | 6,337 | |||||||
| External costs for other programs, including feasibility and new processes and methods associated with commercial product | 3,985 | 4,252 | |||||||||
| Total external R&D expenses | 18,899 | 10,589 | |||||||||
| Internal personnel, consulting, facilities and other | 16,812 | 15,277 | |||||||||
| Total R&D expenses | $ | 35,711 | $ | 25,866 | |||||||
Akebia Therapeutics, Inc. | Form 10-Q | Page 39
We expect to incur significant R&D expenses in future periods in support of ongoing or planned studies with respect to the development of our product candidates as well as Vafseo.
Selling, General and Administrative Expenses-Selling, general and administrative expenses were $81.4 million for the nine months ended September 30, 2025, compared to $78.9 million for the nine months ended September 30, 2024. The increase was largely due to higher marketing costs in connection with the Vafseo U.S. launch and increased headcount related costs during the nine months ended September 30, 2025.
License Expenses-License expenses related to royalties due to Panion relating to sales of Riona in Japan were $2.5 million and $2.2 million for the nine months ended September 30, 2025 and 2024, respectively.
Restructuring Expenses-There were no restructuring expenses and $0.1 million of restructuring expenses for the nine months ended September 30, 2025 and 2024, respectively.
Other Expense, Net-Other expense, net, was $19.2 million for the nine months ended September 30, 2025, compared to $11.3 million for the nine months ended September 30, 2024. The increase was primarily due to non-cash interest expense related to the settlement royalty liability in connection with the Vifor Termination Agreement which we entered into in July 2024, partially offset by interest income related to our money market funds. See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information on our arrangements with CSL Vifor.
Change in Fair Value of Warrant Liability-Change in fair value of warrant liability was $5.4 million and $1.3 million for the nine months ended September 30, 2025 and 2024, respectively.
Loss on Extinguishment of Debt-During the nine months ended September 30, 2024, we recorded a $0.5 million loss on the extinguishment of debt in connection with the repayment of the Pharmakon Term Loans. We did not record any loss on the extinguishment of debt during the nine months ended September 30, 2025.
Income Tax Expense-Income tax expense was $0.6 million for the nine months ended September 30, 2025. There was no income tax expense for the nine months ended September 30, 2024.
Liquidity and Capital Resources
As of September 30, 2025, we had cash and cash equivalents of $166.4 million and restricted cash of $1.7 million.
To date, we have funded our operations principally through sales of our common stock, including through our employee stock purchase plan, product sales, payments received from our collaboration and licensing partners, borrowings under term loans, a working capital payment from CSL Vifor also referred to as a Working Capital Fund liability and a royalty transaction. From inception through September 30, 2025, we raised approximately $929.2 million of net proceeds from the sale of equity, including $567.9 million from various underwritten public offerings, $291.3 million from at-the-market offerings pursuant to our sales agreement with Jefferies LLC and prior sales agreements with Cantor Fitzgerald & Co., and $70.0 million from the sale of 7,571,429 shares of common stock to CSL Vifor.
We generated net income of $0.5 million and $6.9 million during the three and nine months ended September 30, 2025, respectively, and incurred net loss of $20.0 million and $46.6 million during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025 and December 31, 2024, we had an accumulated deficit of $1.7 billion.
We had exclusive rights under a series of patents and patent applications to commercialize Auryxia in the U.S. that protected us from generic drug competition until March 2025. While we believe the dynamics of Auryxia reimbursement being included in the ESRD bundle could result in a slower revenue decline after the LoE date than in other LoE scenarios, the impact of LoE on future Auryxia revenues will depend on many factors, including our ability to maintain contracts with dialysis organizations, the timing and number of additional generics and the pricing of generics and other products on the market that compete with Auryxia. Additionally, since March 2025, our AG Partner has been selling an authorized generic version of Auryxia in the U.S., which may slightly offset the revenue decline following the LoE.
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 for the foreseeable future, including to commercialize Vafseo and Auryxia and advance our existing programs. However, if our operating performance deteriorates significantly from the levels expected in our long-term operating plan, including if we do not achieve our future anticipated Vafseo revenue projections, it would have an adverse effect on our liquidity and capital resources and could affect our ability to achieve and maintain profitability or continue as a going concern in the future. In addition, we may also seek to sell additional private or public equity, enter into new debt transactions, explore potential strategic transactions or a combination of these approaches or other strategic alternatives. If we raise additional funds by issuing equity securities, our shareholders would experience dilution. Debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders. Additional
Akebia Therapeutics, Inc. | Form 10-Q | Page 40
financing may not be available to us in amounts or on terms acceptable to us, if at all. If we are unable to raise additional capital in sufficient amounts when needed or on attractive terms, we may not be able to pursue development and commercial activities related to Auryxia and Vafseo, or any additional products and product candidates, including those that may be in-licensed or acquired. Any of these events could significantly harm our business, financial condition and prospects.
There can be no assurance that the current operating plan will be achieved in the time frame anticipated by us, or that our cash resources will fund our operating plan for the period of time anticipated by us, or that additional funding will be available on terms acceptable to us, or at all. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves numerous risks and uncertainties, and actual results could vary as a result of a number of factors, many of which are outside our control. We have based this estimate on assumptions that may be substantially different than actual results, and we could utilize our available capital resources sooner than we currently expect. Our future funding requirements, both near- and long-term, will depend on many factors including, but not limited to, those described under Part II, Item 1A. Risk Factors under the heading "Risks Related to our Financial Position, Need for Additional Capital and Growth Strategy."
Contractual Obligations and Commitments
Debt Agreements and Other Funding Arrangements
BlackRock Term Loans
On January 29, 2024, or the Closing Date, we entered intothe BlackRock Credit Agreement, which provides for a senior secured term loan facility, in the aggregate principal amount of $55.0 million, or the Term Loan Facility. The Term Loan Facility was available in three tranches (i) Tranche A - $37.0 million was funded on the Closing Date and used to repay the Pharmakon Term Loans; (ii) Tranche B - $8.0 million was funded on April 19, 2024, and (iii) Tranche C - $10.0 million was funded on February 3, 2025, collectively, the Term Loans. The Term Loan Facility matures on January 29, 2028, or the BlackRock Maturity Date.
We are required to make interest-only payments until December 31, 2026 after which, we will begin making equal monthly principal payments. In the event of certain prespecified events, the repayment schedule will be accelerated.
The Term Loan Facility will accrue interest at a floating annual rate equal to the sum of (i) term Secured Overnight Financing Rate, or SOFR, for a tenor of one month (subject to a floor of 4.25% per annum) plus (ii) a margin of 6.75% per annum (subject to an overall cap of 15.00% per annum on the all-in interest rate). During the continuance of any payment event of default the interest rate on such overdue sum will automatically increase by an additional 3.0% per annum, and may be subject to an additional late fee of 2.0% of such overdue sum.
All obligations under the Term Loan Facility are secured by substantially all of our existing and after-acquired assets. The BlackRock Credit Agreement requires us to either (i) maintain cash and cash equivalents, measured as of the last day of each fiscal month, greater than or equal to $15.0 million or (ii) earn consolidated revenue, measured as of the last day of each fiscal month for the trailing twelve-month period, of $150.0 million. The BlackRock Credit Agreement contains certain representations and warranties, affirmative and negative covenants that limit our ability to engage in specified types of transactions and other provisions typical within a credit agreement. If an event of default occurs and is continuing under the BlackRock Credit Agreement, BlackRock is entitled to take enforcement action, including acceleration of amounts due which could limit our ability to make certain payments under the Vifor Termination Agreement. If we prepay the Term Loans prior to the BlackRock Maturity Date, we will be required to pay a prepayment fee ranging from 1.0% to 4.0% of the amount prepaid. If prepayment is made during the first year, we are required to pay the amount of otherwise due interest payments for the twelve-month period following pre-payment.
On the Closing Date, the Warrant Holder received a warrant to purchase 3,076,923 shares of our common stock, at an exercise price per share of $1.30, and upon the borrowing of Tranche C in February 2025, we issued additional warrants to purchase 1,153,846 shares of our common stock at an exercise price per share of $1.30. Each warrant is exercisable for eight years from the date of issuance.
On July 21, 2025, the Warrant Holder exercised its option to purchase 2,115,384 shares of our common stock under the Initial Warrant on a cashless basis at an exercise price per share of $1.30. On July 23, 2025, as a result of the cashless exercise, we issued 1,408,588 shares to the Warrant Holder.
See Note 7, Indebtedness, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.
Liability Related to Settlement Royalties
Akebia Therapeutics, Inc. | Form 10-Q | Page 41
On July 10, 2024, we and CSL Vifor entered into the Vifor Termination Agreement. Pursuant to the terms of the Vifor Termination Agreement, we will pay CSL Vifor decreasing quarterly tiered royalty payments ranging from a high single-digit percentage of our net sales of Vafseo up to $450.0 million to a mid-single digit percentage of our net sales of Vafseo above $450.0 million, in each case, in the U.S. during a calendar year, or the Settlement Royalty Payments. The Settlement Royalty Payments commenced upon the first sale of Vafseo by us, our affiliates or third-party licensees to a third party for use in the U.S., and will continue until the later of the (i) expiration of the last-to-expire valid claim listed in the FDA Orange Book that would be infringed by the making, using, selling or importing of Vafseo in the U.S. or (ii) the expiration of marketing or regulatory exclusivity for Vafseo in the U.S., or the Settlement Royalty Term. Beginning on July 1, 2027 and throughout the Settlement Royalty Term, we have the option to make a one-time payment to CSL Vifor, or the Royalty Buy-Down Option,upon which the Settlement Royalty Payments will be adjusted as of the date of exercise of the Royalty Buy-Down Option such that we will then only pay CSL Vifor quarterly royalty payments based on a mid-single digit percentage of our net sales of Vafseo up to $450.0 million in the U.S. during a calendar year in lieu of the above Settlement Royalty Payments. If we exercise the Royalty Buy-Down Option, the WCF Royalty Payments will continue as described below.
The WCF Royalty Payments, as described below, the Settlement Royalty Payments and the Royalty Buy-Down Option are in consideration for the termination of the Vifor License Agreement and all obligations thereunder, and the covenants and agreements set forth in the Vifor Termination Agreement, including the settlement and release of all disputes and claims arising from the Vifor License Agreement.
As a result of the Vifor Termination Agreement, we concluded that CSL Vifor no longer met the definition of a customer and, therefore, the arrangement should not be considered a revenue contract with a customer under ASC 606, Revenue from Contracts with Customers. We therefore determined that the $43.3 million received from Vifor in connection with the Vifor License Agreement and related investment agreements should be classified as debt and we are amortizing such amount using the effective interest method over the Settlement Royalty Term. The liability related to settlement royalties and the amortization are based on our current estimates of future royalties expected to be paid over the life of the arrangement. The annual effective interest rate as of September 30, 2025 was 24.6% which is reflected as interest expense in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The Company recognized interest expense related to the settlement royalties liability of $3.9 million and $14.7 million for the three and nine months ended September 30, 2025, respectively. As of September 30, 2025, $14.3 million and $53.0 million of the settlement royalties liability is classified as a current and non-current liability, respectively.
See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, in the accompanying notes to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for further information.
Working Capital Fund Liability
In February 2022, we amended our agreement with CSL Vifor and they contributed $40.0 million to a working capital fund, or the Working Capital Fund, established to partially fund our costs of purchasing Vafseo from our contract manufacturers.
Pursuant to the terms of the Vifor Termination Agreement, and generally consistent with the terms of the Vifor License Agreement, we agreed to repay the Working Capital Fund to CSL Vifor through quarterly tiered royalty payments ranging from 8% to 14% of our net sales of Vafseo in the U.S., or the WCF Royalty Payments. The WCF Royalty Payments commenced on July 1, 2025, and will continue until the earlier of (i) the cumulative total of the WCF Royalty Payments equals $40.0 million, or (ii) May 31, 2028, or the WCF Royalty Term. The WCF Royalty Payments are subject to certain minimum true-up milestones.
The Working Capital Fund is considered a debt arrangement with zero coupon interest and we impute interest on the Working Capital Fund liability at a rate of 15.0% per annum. As of September 30, 2025, $13.0 million and $27.7 million of the Working Capital Fund liability is classified as a current and non-current liability, respectively, based on management's estimated timing of the repayment of the Working Capital Fund liability to CSL Vifor.
See Note 8,Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, in the accompanying notes to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for further information.
Liability Related to Sale of Future Royalties
In February 2021, we sold to HealthCare Royalty Partners IV L.P., or HCR, our right to receive royalties and sales milestones for Vafseo in Japan and certain other Asian countries, such countries collectively, the MTPC Territory, such payments collectively the Royalty Interest Payments, in each case, payable to us under the Collaboration Agreement dated December 11, 2015, between us and MTPC, or the MTPC Agreement. The Royalty Interest Payments are subject to an annual maximum "cap" of $13.0 million, after which we will receive 85% of the Royalty Interest Payments for the remainder of that year. The Royalty
Akebia Therapeutics, Inc. | Form 10-Q | Page 42
Interest Payments are also subject to an aggregate maximum "cap" of $150.0 million, after which the Royalty Interest Payments will revert back to us.
We received $44.8 million from HCR, net of certain transaction expenses, which we recorded as a liability at the transaction date. We amortize the liability related to the sale of future royalties using the effective interest method over the life of the arrangement. The annual effective interest rate as of September 30, 2025 was 0%. We retain the right to receive all potential future regulatory milestones for Vafseo under the MTPC Agreement. We recorded non-cash royalty revenue of $0.5 million during each of the three months ended September 30, 2025 and 2024, and $1.3 million and $1.4 million during the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, $2.1 million and $50.6 million of the liability related to the sale of future royalties is classified as a current and non-current liability, respectively.
See Note 8, Liability Related to Settlement Royalties, Working Capital Fund Liability and Liability Related to Sale of Future Royalties, in the accompanying notes to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for further information.
Off-Balance Sheet Arrangements
Letter of Credit
As of September 30, 2025, in connection with the Cambridge Lease (as defined below), we had $1.7 million in a letter of credit outstanding.
Director and Officer Indemnification
We have entered into indemnification agreements with our directors and certain officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. No demands have been made upon us to provide indemnification under such agreements and there are no claims that we are aware of that could have a material effect on our consolidated financial statements.
Contractual Obligations and Commitments Other Than Debt Agreements
We are party to contractual obligations involving commitments to make payments to third parties in the future. Certain contractual obligations are reflected on our condensed consolidated balance sheet as of September 30, 2025, while others are considered future obligations. Our material cash requirements as of September 30, 2025, include contractual obligations and commitments arising in the normal course of business, including leases, license agreements, manufacturing agreements and unconditional purchase commitments which are described in more detail below.
Cambridge Lease
We lease approximately 65,167 square feet of office, storage and laboratory space in Cambridge, Massachusetts under non-cancelable operating leases, collectively the Cambridge Lease. The office, storage and lab lease expires on September 11, 2026, and we are currently marketing the furnished office space for sublease.
See Note 9, Leases, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.
License Agreements
Panion License Agreement
We have a license agreement with Panion, under which we are required to pay royalties related to the sale of Auryxia. The royalty payment obligations are contingent upon generating product revenue, and the amount and timing of such payments are not known. See Note 10, Commitments and Contingencies, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.
Cyclerion Agreement
In June 2021, we entered into a license agreement, or the Cyclerion Agreement, with Cyclerion, as amended in December 2024, under which we obtained an exclusive global license under certain intellectual property rights to research, develop and commercialize praliciguat, an investigational oral soluble guanylate cyclase stimulator.
Under the Cyclerion Agreement, as amended, Cyclerion is eligible to receive up to an aggregate of $198.5 million from usin specified development and regulatory milestone payments on a product-by-product basis. Cyclerion will also be eligible to receive specified commercial milestones as well as tiered royalties ranging from mid-single-digit percentage to twenty percent of net sales, on a product-by-product basis, and subject to reduction upon expiration of patent rights or the launch of a generic product in the territory.
Akebia Therapeutics, Inc. | Form 10-Q | Page 43
See Note 10, Commitments and Contingencies, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.
Manufacturing Agreements
We have various supply arrangements to which we are a party, and we are obligated to pay for drug substance and drug product for commercial use. Under one of our agreements, we are required to purchase a minimum quantity of Auryxia drug substance at a predetermined price. We are also obligated to purchase a certain percentage of the global demand for Vafseo drug substance and drug product based on certain quarterly and annual forecasts we provide to certain suppliers. Our supply agreements for Vafseo drug substance and drug product provide for a volume-based pricing structure. We may also be required to reimburse certain suppliers for reasonable expenses.
See Note 10, Commitments and Contingencies, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.
Amounts Due Under Former Manufacturing and Unconditional Purchase Commitments
On December 22, 2022, we and BioVectra terminated any and all existing agreements for BioVectra to supply us Auryxia drug substance. Under the BioVectra Termination Agreement, we agreed to pay BioVectra a total of $32.5 million consisting of (i) an upfront payment of $17.5 million that was paid in December 2022 and (ii) six quarterly payments of $2.5 million which commenced in April 2024 and were completed in July 2025. In addition, we and BioVectra have released one another from all existing and future claims and liabilities and agreed to return certain materials and documents.
See Note 10, Commitments and Contingencies, in the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for further information.
Other Third Party Contracts
Unconditional Purchase Commitments
We enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation. In addition, we contract with various organizations to conduct R&D activities with remaining contract costs to us of approximately $86.8 million as of September 30, 2025. The scope of the services under these R&D contracts can be modified upon mutual agreement of the parties, and the contracts or scope of services can be cancelled by us upon written notice. In some instances, the contracts may be cancelled by the third party upon written notice.
Cash Flows
The following table provides a summary of cash flow data for each applicable period:
| Nine Months Ended September 30, | |||||||||||
|
NET CASH PROVIDED BY/(USED IN)(in thousands):
|
2025 | 2024 | |||||||||
| Operating activities | $ | 36,863 | $ | (36,193) | |||||||
| Investing activities | (49) | (31) | |||||||||
| Financing activities | 77,775 | 27,338 | |||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | $ | 114,589 | $ | (8,886) | |||||||
| Cash, cash equivalents and restricted cash - beginning of period | 53,550 | 44,579 | |||||||||
| Cash, cash equivalents and restricted cash - end of period | $ | 168,139 | $ | 35,693 | |||||||
Operating Activities
Net cash provided by operating activities was $36.9 million for the nine months ended September 30, 2025. Net cash provided by operating activities for the nine months ended September 30, 2025 consisted of net income of $6.9 million as well as net non-cash adjustments of $35.4 million, including a change in fair value of the warrant liability of $5.4 million, offset by a reduction of $5.4 million in working capital.
Net cash used in operating activities was $36.2 million for the nine months ended September 30, 2024. Net cash used in operating activities consisted of a net loss of $46.6 million and net non-cash adjustments of $46.9 million, including amortization of our intangible asset of $27.0 million, and a reduction of $36.4 million in working capital.
Investing Activities
Akebia Therapeutics, Inc. | Form 10-Q | Page 44
Immaterial net cash was used in investing activities for each of the nine months ended September 30, 2025 and 2024.
Financing Activities
Net cash provided by financing activities was $77.8 million for the nine months ended September 30, 2025, which primarily consisted of proceeds of $10.0 million from the issuance of debt under the BlackRock Credit Agreement and net proceeds of $66.4 million from the sale of common stock from our March 2025 underwritten public offering and under our ATM facility.
Net cash provided by financing activities was $27.3 million for the nine months ended September 30, 2024, which primarily consisted of proceeds of $45.0 million from the issuance of debt under the BlackRock Credit Agreement and net proceeds of $20.4 million from the sale of common stock under our ATM Facility, partially offset by principal payments of debt of $37.1 million primarily related to the Pharmakon Term Loans which were repaid in January 2024.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 2, Summary of Significant Accounting Policies, of the Notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Critical Accounting Estimates and Significant Judgments
Our management's discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities in our unaudited condensed consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses, other long-term liabilities, a liability related to settlement royalties, revenues, including various rebates, returns and reserves related to product sales, inventories, classification of expenses between cost of goods sold, R&D and selling, general and administrative, long-term assets, including our right-of-use assets and goodwill. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. In making estimates and judgments, management employs critical accounting policies.
During the nine months ended September 30, 2025, there were no material changes to our methodologies used for our critical accounting estimates as reported in our 2024 Form 10-K.
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