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Akebia Therapeutics Announces Second Quarter 2018 Financial Results

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--Company to Host Conference Call Today at 4:30 p.m. Eastern Time--

Akebia
Therapeutics
, Inc. (NASDAQ:AKBA), a biopharmaceutical company
focused on delivering innovative therapies to patients with kidney
disease through the biology of hypoxia-inducible factor (HIF), today
announced financial results for the second quarter ended June 30, 2018.

"In the second quarter, we continued to drive our Phase 3 vadadustat
program while executing on our long-term growth strategy with the
announcement of the pending merger with Keryx Biopharmaceuticals," said
John P. Butler, President and Chief Executive Officer of Akebia
Therapeutics. "The combination is expected to create a fully-integrated
company focused on the development and commercialization of therapeutics
for patients with kidney disease. We are actively engaged in integration
planning and continue to target the closing of the transaction by the
end of 2018."

Second Quarter 2018 and Recent Corporate Highlights

Merger Announcement:

  • The definitive merger agreement with Keryx Biopharmaceuticals, Inc.
    (NASDAQ:KERX) was announced, offering potential operating and product
    portfolio synergies and the opportunity to create significant value
    and accelerate the growth potential beyond what either company would
    achieve separately;
  • The combined company will have an expanded and highly complementary
    nephrology portfolio, with Auryxia® (ferric citrate), a
    U.S. Food and Drug Administration (FDA)-approved product in two
    indications with significant growth opportunity, and vadadustat, an
    investigational late-stage hypoxia-inducible factor prolyl hydroxylase
    inhibitor, which has the potential to provide a new oral standard of
    care to patients with anemia due to chronic kidney disease (CKD);
  • The combined company will have an established renal development,
    manufacturing and commercial organization, positioning it as a partner
    of choice for the renal community and for companies developing renal
    products; and
  • The combined company plans to leverage its leadership's extensive
    expertise in the commercial renal market with the goal of maximizing
    sales of Auryxia while driving launch momentum for vadadustat in the
    United States, subject to FDA approval.

Clinical Development:

  • Completed U.S. enrollment of the Phase 3 INNO2VATE
    Conversion study, targeting full enrollment of the INNO2VATE
    program globally by the end of 2018. The company expects top-line
    results for the program in the fourth quarter of 2019 or the first
    quarter of 2020, subject to the accrual of major adverse cardiac
    events (MACE);
  • Continued to enroll subjects in the Phase 3 PRO2TECT
    program, with top-line results anticipated in mid-2020, subject to the
    accrual of MACE;
  • Initiated the Phase 2 FO2RWARD-2 study in dialysis
    dependent patients with anemia due to CKD, with top-line results
    expected in the first half of 2019. Results from this study are
    expected to provide additional characterization and differentiation of
    vadadustat and may further strengthen the company's commercial
    position, subject to vadadustat's regulatory approval; and
  • Completed a type-C meeting with the FDA, in which Akebia and the
    agency aligned on the statistical analysis plan in advance of a
    planned NDA filing for vadadustat.

Financial Results

Akebia reported a net loss of $34.1 million, or ($0.60) per share, for
the second quarter of 2018 as compared to a net loss for the second
quarter of 2017 of $21.5 million or ($0.53) per share.

Collaboration revenue was $48.8 million for the second quarter of 2018
compared to $28.5 million for the second quarter of 2017. Collaboration
revenue recognized in the second quarter of 2018 related to revenue
recognized under both the collaboration agreement with Otsuka
Pharmaceutical Co. Ltd., or Otsuka, related to the United States, or the
Otsuka U.S. Agreement, and the collaboration agreement with Otsuka
related to Europe, China and certain other regions, or the Otsuka
International Agreement, as well as revenue recognized in connection
with the collaboration agreement with Mitsubishi Tanabe Pharma
Corporation. Collaboration revenue recognized in the second quarter of
2017 only related to the Otsuka U.S. Agreement and the Otsuka
International Agreement, which were consummated in December 2016 and
April 2017, respectively.

Research and development expenses were $71.9 million for the second
quarter of 2018 compared to $43.8 million for the second quarter of
2017. The increase was primarily attributable to external costs related
to the continued advancement of the global PRO2TECT and INNO2VATE
Phase 3 programs, including enrollment; and the manufacture of drug
substance and drug product in support of the global Phase 3 program.
Research and development expenses were further increased by headcount
and compensation-related costs.

General and administrative expenses were $12.5 million for the second
quarter of 2018 compared to $6.9 million for the second quarter of 2017.
The increase was primarily attributable to an increase in costs to
support the company's research and development programs, including
headcount and compensation-related costs, and costs incurred related to
the proposed merger with Keryx Biopharmaceuticals.

Akebia ended the second quarter of 2018 with cash, cash equivalents and
available for sale securities of $402.1 million. The company also
generally receives cost-share funding from its collaboration agreements
with Otsuka on a prepaid quarterly basis. Akebia expects its existing
cash resources, including the prepaid quarterly committed cost-share
funding from its collaborators, to fund its current operating plan into
the first quarter of 2020.

Conference Call and Webcast

Akebia management will host its second quarter 2018 investor update
conference call and webcast beginning at 4:30 p.m. Eastern Time today,
Wednesday, August 8, 2018.

Individuals interested in participating in the call should dial (877)
458-0977 (U.S. and Canada) or (484) 653-6724 (international) using
conference ID number 1398303. To access the webcast, visit the Investors
section of Akebia's website at www.akebia.com
at least 15 minutes prior to the start of the call to ensure adequate
time for any software downloads that may be required.

Beginning the morning of August 9, 2018, the call will be available for
replay via telephone and the archived webcast will be available on
Akebia's website. To listen to the telephone replay, dial (855) 859-2056
(U.S. and Canada) or (404) 537-3406 (international) using conference ID
number 1398303. The telephone replay will be available for six days
following the call.

About Akebia Therapeutics

Akebia Therapeutics, Inc. is a biopharmaceutical company headquartered
in Cambridge, Massachusetts, focused on delivering innovative therapies
to patients with kidney disease through hypoxia-inducible factor
biology. For more information, please visit our website at www.akebia.com,
which does not form a part of this release.

Forward-Looking Statements

Statements in this press release regarding Akebia's strategy, plans,
prospects, expectations, beliefs, intentions and goals are
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995, as amended, including but not
limited to statements regarding the expected benefits of the pending
merger with Keryx, including but not limited to expected synergies,
value creation, growth potential, and the combined company's portfolio;
the closing of the pending merger with Keryx, including the timing
thereof; the competitive position of the combined company following
completion of the merger with Keryx, including but not limited to being
a partner of choice for the renal community and for companies developing
renal products; plans and goals for the combined company following
completion of the merger with Keryx; the potential for vadadustat to
provide a new oral standard of care to patients with anemia due to CKD;
the rate and timing of enrollment of our clinical trials; the
anticipated timing of the availability and presentation of clinical
trial data and results; the benefits, including the potential effect on
commercial position, of the designs of our studies; the potential
characterization and differentiation information we believe will result
from the designs of our studies; potential and anticipated payments from
our collaborators, including the timing thereof; expectations regarding
financial position, including the period of time our cash resources and
committed funding from our collaborators will fund our current operating
plan. The terms "anticipate," "expect," "goal," "may," "opportunity,"
"plan," "potential," "target," "will" and similar references are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. Each
forward-looking statement is subject to risks and uncertainties that
could cause actual results to differ materially from those expressed or
implied in such statement, including that Akebia or Keryx may be unable
to obtain stockholder approval as required for the pending merger;
conditions to the closing of the pending merger may not be satisfied;
the pending merger may involve unexpected costs, liabilities or delays;
the effect of the announcement of the pending merger on the ability of
Akebia or Keryx to retain and hire key personnel and maintain
relationships with customers, suppliers and others with whom Akebia or
Keryx does business, or on Akebia's or Keryx's operating results and
business generally; Akebia's or Keryx's respective businesses may suffer
as a result of uncertainty surrounding the pending merger and disruption
of management's attention due to the pending merger; the outcome of any
legal proceedings related to the pending merger; Akebia or Keryx may be
adversely affected by other economic, business, and/or competitive
factors; the occurrence of any event, change or other circumstances that
could give rise to the termination of the merger agreement; risks that
the pending merger disrupts current plans and operations and the
potential difficulties in employee retention as a result of the pending
merger; the risk that Akebia or Keryx may be unable to obtain
governmental and regulatory approvals required for the transaction, or
that required governmental and regulatory approvals may delay the
transaction or result in the imposition of conditions that could reduce
the anticipated benefits from the proposed transaction or cause the
parties to abandon the proposed transaction; risks that the anticipated
benefits of the pending merger or other commercial opportunities may
otherwise not be fully realized or may take longer to realize than
expected; other risks to the consummation of the merger, including the
risk that the merger will not be consummated within the expected time
period or at all; rate of enrollment in clinical studies of vadadustat;
the rate of major adverse cardiovascular events in PRO2TECT
and INNO2VATE; the risk that clinical trials may not be
successful; the risk that existing preclinical and clinical data may not
be predictive of the results of ongoing or later clinical trials;
manufacturing risks; the quality and manner of the data that will result
from clinical studies of vadadustat; the actual funding required to
develop and commercialize Akebia's product candidates and operate the
company, and the actual expenses associated therewith; the actual costs
incurred in the clinical studies of vadadustat and the availability of
financing to cover such costs; the risk that clinical studies are
discontinued or delayed for any reason, including for safety,
tolerability, enrollment, manufacturing or economic reasons; early
termination of any of Akebia's collaborations; Akebia's and its
collaborators' ability to satisfy their obligations under Akebia's
collaboration agreements; the timing and content of decisions made by
regulatory authorities; the timing of any additional studies initiated
for vadadustat; the actual time it takes to initiate and complete
preclinical and clinical studies; the success of competitors in
developing product candidates for diseases for which Akebia is currently
developing its product candidates; the scope, timing, and outcome of any
ongoing legal, regulatory and administrative proceedings; changes in the
economic and financial conditions of the businesses of Akebia and its
partners; and Akebia's ability to obtain, maintain and enforce patent
and other intellectual property protection for vadadustat and any other
product candidates. Other risks and uncertainties include those
identified under the heading "Risk Factors" in Akebia's Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 2018, and other
filings that Akebia may make with the U.S. Securities and Exchange
Commission (the "SEC") in the future. These forward-looking statements
(except as otherwise noted) speak only as of the date of this press
release, and Akebia does not undertake, and specifically disclaims, any
obligation to update any forward-looking statements contained in this
press release.

Additional Information and Where to Find It

In connection with the proposed merger, Akebia and Keryx plan to file
with the SEC and mail or otherwise provide to their respective
stockholders a joint proxy statement/prospectus regarding the proposed
transaction. BEFORE MAKING ANY VOTING DECISION, AKEBIA'S AND KERYX'S
RESPECTIVE STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY
OTHER DOCUMENTS FILED BY EACH OF AKEBIA AND KERYX WITH THE SEC IN
CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE THEREIN
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION. Investors and
stockholders will be able to obtain a free copy of the joint proxy
statement/prospectus and other documents containing important
information about Akebia and Keryx, once such documents are filed with
the SEC, through the website maintained by the SEC at www.sec.gov.
Akebia and Keryx make available free of charge at www.akebia.com
and www.keryx.com,
respectively (in the "Investors" section), copies of materials they file
with, or furnish to, the SEC.

Participants in the Merger Solicitation

This document does not constitute a solicitation of proxy, an offer to
purchase or a solicitation of an offer to sell any securities. Akebia,
Keryx and their respective directors, executive officers and certain
employees and other persons may be deemed to be participants in the
solicitation of proxies from the stockholders of Akebia and Keryx in
connection with the proposed merger. Security holders may obtain
information regarding the names, affiliations and interests of Akebia's
directors and officers in Akebia's Annual Report on Form 10-K for the
fiscal year ended December 31, 2017, which was filed with
the SEC on March 12, 2018, and its definitive proxy statement for the
2018 annual meeting of stockholders, which was filed with
the SEC on April 30, 2018. Security holders may obtain information
regarding the names, affiliations and interests of Keryx's directors and
officers in Keryx's Annual Report on Form 10-K for the fiscal year
ended December 31, 2017, which was filed with the SEC on February 21,
2018, and the Amendment No. 1 on Form 10-K/A, which was filed with
the SEC on April 30, 2018, and its definitive proxy statement for the
2018 annual meeting of stockholders, which was filed with the SEC on May
31, 2018. To the extent the holdings of Akebia securities by Akebia's
directors and executive officers or the holdings of Keryx securities by
Keryx's directors and executive officers have changed since the amounts
set forth in Akebia's or Keryx's respective proxy statement for its 2018
annual meeting of stockholders, such changes have been or will be
reflected on Statements of Change in Ownership on Form 4 filed with
the SEC. Additional information regarding the interests of such
individuals in the proposed merger will be included in the joint proxy
statement/prospectus relating to the proposed merger when it is filed
with the SEC. These documents (when available) may be obtained free of
charge from the SEC's website at www.sec.gov,
Akebia's website at www.akebia.com and
Keryx's website at www.keryx.com.

Tables Follow

       

AKEBIA THERAPEUTICS, INC.
Consolidated Statements
of Operations

(in thousands except share and per share
data)

(unaudited)

 
Three Months Ended Six Months Ended
June 30, 2018     June 30, 2017 June 30, 2018     June 30, 2017
Collaboration revenue $ 48,793 $ 28,520 $ 94,723 $ 49,385
Operating expenses:
Research and development 71,917 43,751 133,321 103,800
General and administrative   12,538     6,905     21,562     12,693  
Total operating expenses   84,455     50,656     154,883     116,493  
Operating loss (35,662 ) (22,136 ) (60,160 ) (67,108 )
Other income, net   1,593     618     2,673     1,048  
Net loss $ (34,069 ) $ (21,518 ) $ (57,487 ) $ (66,060 )
Net loss per share - basic and diluted $ (0.60 ) $ (0.53 ) $ (1.09 ) $ (1.66 )
Weighted-average number of common shares - basic and

diluted

  56,890,295     40,819,957     52,774,794     39,795,282  
 

 

 
AKEBIA THERAPEUTICS, INC.
Selected Balance Sheet Data
(in
thousands)

(unaudited)
 
June 30, 2018 December 31, 2017
Cash, cash equivalents and available for sale securities $ 402,123 $ 317,792
Working capital 242,997 217,250
Total assets 413,781 364,247
Total stockholders' equity 165,924 122,574

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