Brean Sees Huge Upside In Akebia Shares

Small-cap biotech Akebia Therapeutics Inc AKBA plunged on Tuesday after the company released disappointing earnings after the close on Monday. Shares traded recently at $8.11.

The company reported a wider-than-expected loss for its fiscal second-quarter, losing $0.95 per share compared to estimates calling for a loss of $0.57 per share. The company didn't record any revenue in the quarter, but Akebia's drug vadadustat is currently being evaluated in Phase III trials.

adadustat is indicated for the treatment of anemia related to chronic kidney disease. The company initiated its global Phase III program for non-dialysis patients in December 2015 and enrollment is expected to be complete in the second-half of 2017. The company also announced the initiation of its INNOVATE trial evaluating the drug in dialysis patients on August 8.

Despite the wider-than-expected loss in Q2, analysts at Brean Capital remain bullish on the name and wrote in a note that current financial performance is irrelevant to their model. The firm reiterated its $26 price target on the stock, citing the likelihood of a European partnership for vadadustat in the second-half of 2016. The stock has been largely range-bound in recent months, although Akebia is trading well off of highs seen at the beginning of 2016.

Company CEO John Butler summed up the current landscape for Akebia in a press release announcing the Q2 results.

"We continue to make progress with our critical development and strategic priorities. With the initiation of INNOVATE and the continued enrollment in our PROTECT program for non-dialysis patients, we now have two indications in Phase 3 for anemia related to chronic kidney disease." He added that "our efforts to a secure a collaboration for vadadustat in Europe and other international regions continues to progress with the goal of financing our global Phase 3 program and supporting a strong commercial introduction."