Akebia Therapeutics (AKBA) announced this morning that in their Type C meeting with the FDA, they learned that the Agency would require “a significantly larger number of patients than proposed, and accordingly would require meaningfully more time and cost to complete.” Therefore, they are not going to pursue a broad non-dialysis chronic kidney disease (NDD-CKD) label for Vafseo. But: “We were encouraged by the discussion with FDA on smaller subgroups of CKD patients where we may be able to align on a potential clinical trial design and path forward.”
Given CEO John Butler’s history of winning against the FDA, I expect him to pursue a smaller subgroup that most needs Vafseo and get approval. Then he’ll leverage that into a series of label expansions that eventually cover everyone with NDD-CKD who can be helped by Vafseo. But that will take many years compared to the two to three years a broad NDD-CKD label would have taken.
Near-term, this doesn’t reduce the value of the business much, so today’s drop is the usual over-reaction. We’ll see strong Vafseo growth in the coming September quarter earnings release, and perhaps guidance for a significantly stronger December quarter.
This does reduce the likelihood of an Amgen (AMGN) acquisition bid, but not because they care about NDD-CKD. It’s because I doubt Butler would sell the company for les than $10 a share, and although Amgen could bid $10 for a stock selling for $5, they probably can’t do that for a stock selling for less than $3. So we’ll have to wait for the quarterly results to get the stock up, which I expect to happen. AKBA remains a Buy under $4.
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