Akebia Price Target Lowered, Still A Buy At Brean

The company's lead product candidate, AKB-6548 or vadadustat is a small molecule oral drug being studied to treat anemia secondary to chronic kidney disease (CKD).

Akebia currently has two global Phase III trials underway, PRO2TECT and INNO2VATE, for non-dialysis (ND-CKD) and dialysis dependent (DD-CKD) respectively, with the enrollment completion expected in the former in 2H17 and readout in 2H18.

"We like Akebia's asset, vadadustat, which is a new MOA for treating anemia. If successfully developed, it could change the standard of care," analyst Difei Yang wrote in a note.

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"International partnerships aside, Akebia will commercialize vadadustat on its own in the US and we project sales to be around $515 mil in 2022, with sales for ND-CKD indication alone," Yang continued.

The company has signed a deal with the MTPC for the development and commercialization of vadadustat in Japan and Asia and the company could sign a similar deal with respect to Europe in 2016.

Excluding MTPC deal, Akebia has cash and cash equivalents of about $189 million, which should be sufficient to fund the company's operations through the second quarter of 2017.

Yang, who assumes 60 percent probability of success on PRO2TECT trials, lowered the target price to $18 from $26.

Shares of Akebia closed Wednesday's regular trading session at $9.08. The revised price target implies potential upside of 98 percent.

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