Good day, ladies and gentlemen, and welcome to Akebia Therapeutics Second Quarter of 2021 Financial Results and Business Update Conference Call. As a reminder, this call is being recorded. I would now like to introduce your host for today’s event, Kristen Sheppard, Senior Vice President of Investor Relations with Akebia..

Thank you, and welcome to Akebia’s second quarter 2021 financial results and business update conference call. Please note that the press release detailing our results for the second quarter was issued earlier this morning and is available on the Investors section of our website.

For your convenience, a replay of today’s call will also be available on our website, shortly after we conclude. Joining me for today’s event is John Butler, our Chief Executive Officer; David Spellman, our Chief Financial Officer; Dr. Steven Burke, our Chief Medical Officer; and Dell Faulkingham, our Chief Commercial Officer.

Before we begin, I would like to remind everyone that this call includes forward-looking statements. Each forward-looking statement included in this call is subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements.

Additional information regarding these risks is described in the forward-looking statements section of the press release we issued earlier today, as well as in the risk factors and management’s discussion and analysis sections of our most recent annual and quarterly reports filed with the SEC.

The forward-looking statements on this call speak only as of the original date of this call, and accepted as required by law, we do not undertake any obligation to update or revise any of these statements. With that, I would like to introduce our CEO, John Butler.

John?.

Thank you, Kristen, and thank you all for joining us today. The first half of 2021 has been marked by significant milestones that have further strengthened Akebia’s position, and the potential market opportunity for vadadustat, setting the stage for an exciting and catalyst-rich year ahead for us.

During the quarter, these achievements were highlighted by the publication of our global Phase 3 program results for vadadustat in the New England Journal of Medicine, and more recently, FDA acceptance for filing of the vadadustat NDA for the treatment of anemia due to chronic kidney disease, in both adult patients on dialysis and not on dialysis, with a PDUFA target action date of March 29, 2022.

Putting all this together, as there are currently no approved HIF-PHIs to treat anemia due to CKD in the U.S., we believe vadadustat is positioned as a potential first-in-class product, and that these achievements bring us one step closer to having a novel oral therapeutic available for patients living with this disease.

This is an exciting time in Akebia, and we believe we have a tremendous opportunity ahead of us, which is why I want to spend some time this morning and really remind everyone of the clarity of the global Phase 3 data for vadadustat, our clinical development program, and vadadustat’s potential market opportunity in dialysis, which we believe is now broader than originally anticipated.

I also want to underscore the significance of our existing commercial footprint. We’ve established a strong reputation in the kidney community with our commercial product, Auryxia, and we look forward to leveraging both, our nephrology-focused sales force and our expertise upon the launch of vadadustat.

And, of course, all my comments today regarding the launch of vadadustat, its adoption and use, are all subject to its regulatory approval. So, let’s begin. We believe strongly in vadadustat’s potential as a treatment for anemia due to CKD.

And we’re excited with the prospect of having vadadustat lead a new class of therapeutics and help people living with this disease. Today, there are approximately 560,000 dialysis patients in the United States, a number that will continue to grow as the overall population ages. In general, this is a group of patients with significant health issues.

Approximately 90% are being treated with a erythropoiesis-stimulating agents or ESAs, to manage their anemia. The impact of this disease on patients with CKD is profound.

In addition to the well-known symptoms of fatigue, dizziness and shortness of breath, anemia has been associated with more severe adverse outcomes, such as cardiovascular complications, including left ventricular hypertrophy and congestive heart failure.

Multiple large peer reviewed studies have demonstrated the increased cardiovascular risks associated with ESA use in both dialysis and non-dialysis patients. Physicians and key opinion leaders associate that risk with the speed of hemoglobin increase and hemoglobin overshoots above their target level.

These concerns were raised recently in the context of the FDA’s review of another company’s HIF-PHI product under development and their newly disclosed adverse event data.

Well, we will not speculate on the outcome for their company or their data, we believe there are differentiating and important aspects of the global Phase 3 data for vadadustat and our program.

As the vadadustat NDA is actively under review at the FDA, I’ll limit my comments to our public data, which fortunately, there’s an abundance of, and it’s published in one of the most reputable journals in the world. Our team has done a great job executing on our publication plans.

First, our global Phase 3 clinical data show that once daily dosing of vadadustat increased hemoglobin in a gradual and steady manner. The data also showed that vadadustat minimized hemoglobin overshoots compared to darbepoetin alfa and ESA. We have been highlighting this treatment goal in the design of our studies for a number of years.

And it’s encouraging to see this approach validated in the Phase 3 results across both, our dialysis and non-dialysis programs.

I’d also like to remind you that our entire global Phase 3 program, including the starting dose used in both, dialysis and non-dialysis programs, was designed after extensive dialogue with both, the FDA and European regulators.

This was a very significant undertaking, and we’re very pleased that it enabled us to align with regulators on the details of our statistical analysis plan, the pre-specified analyses, and the non-inferiority margins.

We’re also grateful to have the support of the chairs of the Independent Executive Steering Committee for both INNO2VATE and PRO2TECT, doctors Chertow and Eckardt, and the entire committee, who have continued to ensure the ongoing quality of our program, as well as an objective, independent voice in data analysis and publication.

Having the results of our global Phase 3 program published in the New England Journal of Medicine was tremendous validation of all of this work. We believe these publications not only reinforce the scientific rigor and quality of our program, but also speak to the clarity of the data for the broader medical community.

This is one more tangible example of Akebia’s commitment to transparency. Feedback and interest in these publications from key opinion leaders and the broader kidney community continues to be very positive.

We believe these publications will be highly informative for physicians, patients, dialysis providers, and payers, as they make important decisions about patient care, and potentially a key consideration when differentiating among HIFs in the class, as well as differentiating vadadustat from treatment with the assays.

Importantly, as seen in the New England Journal publications, our global Phase 3 data showed no significant safety signal on adverse events, including thromboembolic events, seizures, and infections.

More specifically, the data show that these events were very similar for vadadustat as compared to darbepoetin alfa in the dialysis and non-dialysis programs. We’ve provided the links to these journal publications in today’s press release, and of course, they are also available on our website.

I encourage you to read these papers and the supplementary data as well as we believe they will provide a very clear understanding of vadadustat and our program. And of course, we have Dr. Burke, our Chief Medical Officer, on the call today to answer any questions you have about the journal publications.

With vadadustat’s PDUFA data set for March, we’re progressing on the path to commercialization and are highly focused on pre-launch activities to ensure that we are well positioned for successful U.S. launch in 2022, subject to regulatory approval.

More recently, with the exciting potential for vadadustat to now be first-to-market, we’ve been expanding our planning to include a broader market opportunity in dialysis than originally anticipated. We believe dialysis represents a large and growing potential $2 billion market opportunity in the U.S. alone.

We believe we have a clear path ahead of us in dialysis. And we’re confident that upon U.S. approval, we will have the potential to address the unmet needs of over 0.5 million adult patients on dialysis, and rapidly establish vadadustat as the new oral standard of care for the treatment of anemia due to CKD.

We anticipate that the consistency and clarity of our dialysis data bolstered by recent publication in the New England Journal will play a meaningful role in helping develop treatment protocols within dialysis providers, which are critical to driving adoption in the dialysis market.

We’re also conducting two studies, one led by our partner Otsuka to show that vadadustat can also be dosed three times a week. Assuming the data are positive, we expect to use this data to support the supplemental NDA for this dosing regimen, post approval.

Although the significant majority of dialysis patients are cared for in center, several factors including the COVID-19 pandemic are supporting a growing shift towards home dialysis. Based on reports from the largest dialysis providers, home dialysis appears to be the fastest growing segment of the dialysis population.

CMS is also creating payment models to encourage this move to home treatment.

These trends are exciting as we believe that as a convenient once daily oral therapeutic vadadustat has the potential to offer an important value proposition, both to the growing number of home dialysis patients and to dialysis providers looking to better support these patients, simplify administration, and grow their home progress.

With our planned commercial launch and strategic alignments, we believe that we can enable broad market access for patients and support rapid adoption to vadadustat in the dialysis market. As a potential first-to-market product, our go-to-market strategy now has a broad focus.

Our plans include leveraging our exclusive distribution relationship with Vifor Pharma to access Fresenius Medical Care and certain independent dialysis providers which include up to 60% of the U.S. dialysis patients.

Additionally, we plan to leverage our direct nephrology focused sales force to facilitate adoption at DaVita and other strategically important dialysis providers that account for the remaining 40% of patients with our partner Otsuka sharing in the launch costs and responsibilities. Adding to this is a unique reimbursement model in the U.S.

dialysis market with TDAPA and add-on payment to the bundle that’s intended to encourage adoption of innovative therapies by clinicians and dialysis providers. Although there’s limited market experience with the TDAPA process, our understanding of the process suggests it may take approximately six months from regulatory approval to TDAPA designation.

Now, as TDAPA payments will continue for two years following TDAPA designation, we believe that the timing of TDAPA designation will be important to the rate of adoption. Again, as a potential first-in-class product, we now believe vadadustat has a broader market opportunity in dialysis than originally anticipated.

And we believe we created a go-to-market strategy to support both, our near-term and long-term growth potential in this market. Now, turning to non-dialysis. Consistent with our prior comments, while we remain cautious for approval in non-dialysis, we believe we have put forward a compelling and extensive NDA data package.

And we look forward to continuing to work with the FDA in their review of the efficacy and safety data. We believe the patient need for a safe and effective oral treatment for anemia due to CKD is clear across both, the dialysis and non-dialysis populations. Now, shifting gears to performance of our existing commercial product, Auryxia.

We’re encouraged with Auryxia’s performance in the second quarter. We continue to be pleased with how the market is viewing Auryxia’s strength. And importantly, the team continues to do a great job supporting our customers and patients, getting our therapies to those in need.

We’re hopeful that as the industry continues to focus on prioritizing vaccines for dialysis patients, COVID-related hospitalizations and mortality will continue to decline. We continue to expect Auryxia to deliver annual revenue growth for 2021.

And again, we’re excited to leverage this outstanding team with the expected launch of vadadustat next year. Finally, I’d like to share with you a number of potential catalysts that we’re focused on for 2021 and beyond. As our largest potential market, the U.S.

remains our highest priority with vadadustat with a PDUFA target action date of March 29, 2022. We’re also continuing to collaborate with our partner, Otsuka, and expect to file vadadustat’s MAA submissions to the European Medicines Agency, later this year.

We continue to explore potential development opportunities from vadadustat and look to share more information on these efforts later this year.

As we discussed previously, UTHealth is engaged in an ongoing investigator sponsored study of vadadustat as a potential therapy to prevent and lessen the severity of acute respiratory distress syndrome or ARDS, in adult patients who’ve been hospitalized due to COVID-19.

They currently have over 300 patients enrolled in this 400-patient study, and when possible, we’ll share an update on the study. We look towards additional presentations of our Phase 3 results and data, including multiple abstracts expected at ASN and at future medical conferences and in peer reviewed journals.

Lastly, as we move closer to the potential launch of vadadustat, we’ll also look to share progress on our pre-commercial activities. So, to briefly summarize, this is a busy and exciting time at Akebia. We remain confident in vadadustat’s potential as a first-in-class treatment for anemia due to CKD.

And we look forward to continuing to engage with the FDA in their review of our NDA. I’ll now turn the call over to Dave, who will review our financial results.

Dave?.

Thank you, John, and good morning, everyone. As John mentioned, having laid the groundwork for potential approval, we’re advancing pre-commercial launch preparations for vadadustat.

We believe we are well-positioned with our existing commercial footprint, and together with our partners, our team is fully engaged in the work to ensure appropriate commercial drug supply at the time of launch, subject to approval. Turning to our financial results for the quarter, starting with revenue.

Total revenue was $52.9 million in the second quarter of 2021 compared to $90.1 million for the second quarter of 2020, reflecting lower collaboration revenue consistent with successfully completing our global Phase 3 clinical development program of vadadustat.

In terms of Akebia’s commercial performance, net product revenue for Auryxia increased 7.4% to $33 million for the second quarter of 2021 compared with $30.7 million for the second quarter of 2020. We are encouraged by this growth, which we believe is a great illustration of our commercial team’s execution in this ongoing COVID-19 environment.

We believe this performance also highlights Auryxia’s favorable product profile and the critical nature of this therapy. Looking ahead, we believe the team’s focus and execution on our marketing, sales and payer strategies will continue to drive net product revenue growth. Turning to expenses.

We continue to prioritize investments to support both, vadadustat and top line growth, while also continuing to focus on improving costs and advancing our pipeline of development opportunities. Cost of goods sold was $52.5 million for the second quarter of 2021 compared to $174.6 million for the second quarter of 2020.

Current year includes a $30 million non-cash charge for excess purchase commitments, consistent with continued execution of our long-term care contract strategy, which remains focused on contract economics and net product revenue growth.

Cost of goods sold for the prior year period included the impact of a non-cash impairment charge of $115.5 million related to the Auryxia intangible assets in addition to other charges noted in our press release for that period.

Research and development expenses were $37.2 million for the second quarter of 2021 compared to $52.8 million for the second quarter of 2020. The spending reduction was primarily driven by a decrease in costs, consistent with completing the INNO2VATE and PRO2TECT, global Phase 3 clinical programs.

We expect that R&D expenses will remain significant, as we continue to support ongoing planned clinical work, as well as the cost of our supply chain and inventory build ahead of the expected approval of vadadustat.

For clarity, we would like to remind you that consistent with the terms of collaboration agreements for regions including the U.S., Europe, Japan and others, vadadustat supply chain costs are shared with our partners, respectively.

Selling, general and administrative expenses increased to $41.7 million for the second quarter of 2021 compared to $35.5 million for the second quarter of 2020. The increase compared to the prior year period was due primarily to higher marketing expenses as we prepare for a potential launch of vadadustat, subject to approval.

As our commercial team is already in place, we expect only a modest increase in SG&A for the remainder of 2021 for these efforts and Auryxia growth. For our bottom line, net loss was $83 million for the second quarter of 2021 compared to $175.8 million for the second quarter of 2020.

The improvement in net loss compared to the prior year period was due primarily to the non-recurrence of the onetime impairment charge in the prior year quarter as well as lower operating expenses, partially offset by lower collaboration revenue for the second quarter of 2021. Turning to our capital position.

We ended the second quarter with $247 million in cash, cash equivalents and available for sale securities. Our Q2 cash balance includes the impact of $37.3 million in net proceeds from sales of stock under our ATM in the second quarter.

We also received $16.1 million in net proceeds from sales under the ATM subsequent to the quarter-end through July 16th. We believe that our cash resources will be sufficient to fund our current operating plan through at least the next 12 months.

Additionally, we believe our cash runway would extend beyond that period, assuming timely regulatory approval of vadadustat and the receipt of associated regulatory milestones.

With respect to future milestone payments to Akebia, I’ll remind you that subject to the terms of our collaboration agreements with Otsuka, Akebia has the right to receive milestone payments from Otsuka upon the approval of vadadustat in U.S. and Europe.

Given the tiered nature of these milestones, if vadadustat succeeds in being the first HIF-PHI to market in the U.S., the U.S. regulatory milestones from Otsuka are estimated to be $15 million and $50 million for dialysis and non-dialysis indications, respectively. Additionally, there are significant sales and commercial milestones.

As a part of our existing R&D funding arrangement with Otsuka, up to 50% of these milestones may be used to offset accumulated R&D pre-funding, which today stands at $100 million. In addition, consistent with the terms of our license agreement with Vifor, Akebia has the right to receive a $25 million milestone payment upon U.S.

approval of vadadustat and its inclusion in the Prospective Payment System, or TDAPA, whichever is first. With that, we’ll open the line to questions.

Operator?.

Thank you. [Operator Instructions] Our first question comes from the line of Chris Raymond with Piper Sandler..

It’s Ally Bratzel on for Chris this morning. So, just a couple of questions from us on vadadustat kind of based on the roxadustat AdCom.

So first, just, could you talk to how the outcome of the roxa panel, thinking on the likelihood that the FDA will convene a panel for vadadustat? Second, just on the population used for vadadustat MACE analysis, could you just confirm that your MACE analyses were shown on an on-study basis rather than an on-treatment basis? I guess, that was our vadadustat plan in the [indiscernible] articles, but it was an area of debate during the roxa AdCom.

So, I wanted to verify. And then, last question, just on dosing. So, you saw a slower rise in hemoglobin for vadadustat and for assays in INNO2VATE and PRO2TECT. So, that does seem to validate the dosing schemes in your Phase 3s.

But just hoping you could talk to your competence that you identified the right dosing protocol that will be acceptable to regulators.

Anything related to that kind of how does the discussion at the FDA -- or by the FDA to AdCom, just on roxadustat’s dosing and the rapid increase in hemoglobin? Maybe Steve, your view on the profitability of the three times weekly regimens that you’re exploring with vadadustat? Thanks..

Good morning, Ally. Thanks for the questions. That was a kind of a long list. So hopefully, I jotted them all down. And we can get to them all. So, we’re happy to answer them all. So, your first question was about the likelihood of a panel for vadadustat now.

Again, we -- the last communication we had around the panel of the FDA, as we’ve said previously is that they said not to expect the panel. I don’t think it’s worth speculating whether it’s more likely or less likely at this point. But, as we said back then, even before the roxadustat panel, we’re planning for one and we’re preparing for one.

So, if we learn from FDA that they would like to hold the panel, we’ll be ready for that. But, we haven’t heard any update on that. Your second question was around the population for the analysis, was this an on-treatment or on-study analysis. And I’m going to ask Dr. Burke to comment on that.

Steve?.

Yes. As outlined in the New England Journal of Medicine publications, it was an intent to treat analysis in the safety population.

So, if a patient was randomized and received a dose of study medication, we followed those patients until the very end of the global study completion date, at which time we announced the closure of the study and asked the sites to bring the patients back in further end of treatment and the study visit. So, it’s a pure intent to treat..

And I think that’s one of the strengths of the way we design the studies, and again, did that in consultation with the regulators. But, it was a true study where because you had an active control, you were able to continue to follow the patients. I think, your third question revolved around the dosing regimen and the gradual dose.

And, again, I’ll pass it to Steve for that..

Right. The dosing regimen was designed in collaboration with the FDA, including the starting dose. It was designed to have a gradual and sustained increase in hemoglobin while minimizing hemoglobin overshoots, rapid rise in the hemoglobin. And this is described in the New England Journal of Medicine paper..

And again, I mean, we’ve said -- we’ve been, I think, saying this for years now, but we did have this discussion with the FDA before. If you recall, our starting dose in the Phase 2 studies was 450 milligrams a day and in consultation with the agency -- and really focused on that concern about too rapid rise in hemoglobin.

We, again in consultation, went to a 300-milligram starting dose for both dialysis and non-dialysis. And I think, importantly, the results speak for themselves, right? If you see that gradual rise, you see fewer overshoots. So, from that perspective, this is why we have so much confidence in the data.

The efficacy data in both dialysis and non-dialysis is very clear. Physicians aren’t in a rush to get hemoglobin elevated higher. Doing this over time, avoiding those overshoots and keeping them in the range long-term, that’s what they’re looking for.

And again, that avoiding overshoots, I think we heard is something that the FDA is really concerned about. And we feel quite good about how we design the program and maybe more importantly, the data that the program generated. So, your third question revolved around TIW.

And that is -- our TIW studies modify and focus -- our ongoing modified fully enrolled focus is enrolling now. We have -- I think, most importantly, obviously, when we see that data, we’ll give you an answer as to the viability of that three times weekly dose. Again, we saw in Phase 2, small Phase 2 that we were able to do that.

But that’s -- those are ongoing studies. We know we have a safe and effective once daily dose in dialysis. And that’s the dose that we’ll be launching with, assuming regulatory approval. And again, the data is so clear that that works.

I don’t know Steve there is anything you want to add on TIW?.

No..

Okay.

Did we cover all your questions, Ally?.

Yes. Thank you..

Thank you..

Thank you. Our next question comes from the line of Bert Hazlett with BTIG..

Just with regard to the -- could you put a little more meat on the bone with regard to home dialysis and the TDAPA process? Kind of the efforts that you’re considering longer term with home dialysis and then maybe more near-term with TDAPA, kind of what the gating items are? And then, secondly, could you also talk a little bit more about your commercial sales force infrastructure, post-approval? Thanks so much..

Great. Bert, thanks for the questions. So, of course, home dialysis and TDAPA are both dialysis issues, but they’re -- so they’re related, but not exactly the same? And I’m going to turn to Dell to ask, maybe to start on home dialysis..

Yes, absolutely. Thanks for the question. We feel like we’re in a real position of strength, as you think about home dialysis. Clearly, our data is under review with the FDA. So, we’re not sure exactly what our final label is going to look like.

But, when you think about the clarity of our Phase 3 data, when you look at the things that John just talked about relative to the gradual steady rise, hemoglobin overshoots and I think then thinking about the dosing, it really does align very well with the home dialysis population.

And this is a population that is growing at about 15% a year right now. It’s the fastest growing segment of the market. And we feel like that vadadustat is really well-positioned upon approval to drive rapid adoption there, through the dialysis organizations. I think, to speak to your second question….

I just wanted to emphasize something on the home. I mean, Dell said it exactly right. I mean, this is a growing population, in center still the largest population. But, you look at all of the initiatives that are coming out, today, they are all focused on giving patients more choice and getting patients out of the center to home.

And I think, the COVID pandemic is the clearest example of why that matters. The mortality rate in the dialysis population, as we’ve talked about before, was -- small studies said 20% to 30%. Having all these people in center is a challenge.

And CMS is even putting different payment programs, ESRD Treatment Choice, ETC program, which is encouraging, which is a mandatory program that encourages dialysis providers to move patients to the home setting. And so, this is going to continue to be a fast-growing segment.

To be sure, we think vadadustat has applicability and will be used in both, home and in center. But home is just such a clear opportunity for one’s daily dose. TDAPA is another really important opportunity for us. So, I mean, this is -- not a lot of people have gone through it, none have gone through the TDAPA process.

So, we think we understand that, but we’ll learn more as we go.

But Dell, do you want to talk about that?.

Yes, sure. Our understanding of the rule is, the rule is -- seems very clear. And our -- we believe that vadadustat will be eligible for TDAPA coverage. The coverage period will be two years, once approved. And essentially, our understanding is based on the quarterly coding system will apply as soon as possible, after approval.

And at that point in time, there’ll be some time in between. We think it could be about six months before we receive TDAPA reimbursement. And we think that’ll be a key in patient adoption, as we launch and really looking at the revenue ramp for the product. And I think, our commercial infrastructure is really set up to help us launch quickly.

Right now, we have a commercial team that is about 142 people, the majority of those are field based employees, and supporting Auryxia today. And this is a really experienced nephrology sales force. And they have strong reputation with nephrologists and the DO community.

And when you look at our promotion with Auryxia in dialysis patients with hyperphosphatemia, the overlap is so strong with where we’ll be when we launch vadadustat that we feel like we really have the right commercial leverage to launch well, and to launch quickly..

Now, the only the only thing I’ll kind of emphasize on the TDAPA, Dell, thanks for that, is -- again, we’re going to see exactly how this comes down. We will launch right after approval, as quickly as we can. And we’ll go through the TDAPA process as quickly as we can.

Remember, it’s very important for the dialysis providers at that point, when they have access to the drug after approval to start working on their protocols. They need to have those protocols in order to really convert all of those patients. So, the timing actually works quite well.

I think, we just wanted to emphasize that process, because as Dell said, it really will influence the speed of the ramp, having that TDAPA reimbursement. So, that’s -- I just wanted to make sure we were really clear about that.

Does that help, Bert?.

Yes, that does. Just a quick follow-up if I could, actually just shift.

With regard to manufacturing and CMC, are any of those issues gating items with regard to the progress of the NDA, just a quick one?.

No gating items for us. Obviously, all of that was part of our NDA. And we’re confident we’ll have multiple drug products, drug substance manufacturers as our plan and that was included in our NDA. So, we feel fine about that..

Our next question comes from the line of Alethia Young with Cantor Fitzgerald..

Hi. Thanks for taking my questions. And congrats on the progress. This is Nina [ph] on for Alethia. We were wondering if you could just share some differences in the market dynamics for dialysis and non-dialysis in Japan, the U.S. and Europe.

And also, if you could share how much more investment is needed for the dialysis launch, if approved in 2022, since you already have sales force broadly in place? Thanks..

Thank you for the question. So, I’ll handle the market dynamics kind of in a general sense. So, the U.S. market is -- the dialysis and non-dialysis markets are quite different from a reimbursement perspective, treatment perspective. We’ve talked a lot about that.

The non-dialysis patients are generally not treated with the ESA because of the safety concerns, the difficulty of acquiring the product, the fact that it’s injectable, whereas dialysis patients are routinely treated with an ESA. So, as we think about the dialysis market in U.S.

it’s a market where we take share, and the non-dialysis market is where we are growing size of the market opportunity. Europe, vis-à-vis the U.S., I mean, it’s a little bit smaller dialysis market. And it’s hard to talk about Europe, because every country in Europe is quite different.

The UK has very large, very few dialysis centers, where in Germany, there’s hundreds of very small dialysis centers. The other difference is that non-dialysis patients are more frequently treated with the ESAs in Europe.

So, the level of concern around safety has never been as high in the European market for the non-dialysis population and the access has been good. There is also more biosimilar products available in the European market. Japan is -- dialysis patients, so they’re treated, these are healthy, more healthy patients, because there’s no transplant.

It’s culturally not kind of acceptable in Japan. So, healthy patients, they go on dialysis, so their outcomes, as usual, are quite good and longer. I think similarly, you’re looking at growing the non-dialysis market in Japan.

Dell, did I miss anything there?.

No, I think you’ve covered it all..

I think the last question was the investment in the U.S.?.

Dell, do you want to?.

Absolutely. As we said, we really feel like with our existing commercial infrastructure, we’re really in position of strength here to launch vadadustat. And we’re excited about the opportunity that lies ahead. We feel like we have the right experience in our sales organization.

And when you think about what we’re going to need to add vadadustat to the bag, so to speak and support the portfolio, we really think the investment is going to be very incremental from where it is today. We collaborate closely with Otsuka, and we’ll work together with them to create the deployment that maximizes vadadustat launch.

But, we really feel like overall, we have -- coming at it from a position of strength and we’ll need a whole lot more..

Thank you. Our next question comes from the line of David Lebovitz with Morgan Stanley..

This is Avatar Jones [ph] on for Dave, this morning. Few questions from us. First, have you received questions from FDA on the causality of MACE events? And if so, how do you plan to address those? Secondly, so aside from rapid hemoglobin rise, roxa’s panel, they have prophesized that the MACE events could be related to non-specific HIF inhibition.

Can you comment on vadadustat in that regard? And then, lastly, can you also -- any updates on the progress of Auryxia’s litigation and coverage? Thank you..

Great. Thank you for the comments. So, we are in discussions with the FDA. Now, it’s kind of the normal review process, won’t speak to the nature of them, because they look broadly. So, they’re very, very robust package. And again, we have confidence in the data. And so, we feel confident in being able to answer any of the questions that FDA raises.

So, commenting on a panel, or the fact that they brought up this idea that there may be non-specific HIF target effects. I think, it’s really important to look at the data. I think that’s what kind of where I think FDA will always land is, what does the data tell us? And we are very confident in the safety profile that we’ve generated with vadadustat.

I don’t know if that data was driven because we have the right dosing regimen or because of the differences in the product. We have the data to support the safety and efficacy of vadadustat, and we believe that’s what matters.

And we’ve always recognized the complexity of the HIF pathway and that before any of us who are in the room here today, were with the company, we selected vadadustat as product for development based on the characteristics that we’re going to give it the most kind of preference for increasing EPO and managing anemia.

So, we’re really quite confident in the product. And we’re quite confident in the product because of the data that we generated. And then, the third question was around Auryxia litigation, and that is ongoing. And as soon as we have any further updates beyond that, we will update you..

Our next question comes from the line of Difei Yang with Mizuho Securities. .

Hi, thank you. This is Dan Clark [ph] on for Difei.

First question from us, has the feedback from the nephrologists community changed on the outcome of your competitor? We’d be curious to know anything you’ve heard regarding data versus ESAs and data versus other oral HIFs?.

I think it’s obviously, early and this is a long process of communication. But, we are very encouraged by the conversations we have with nephrologists. I mean, remember, the difference that vadadustat brings to the table here is that the nephrologists can go directly to the New England Journal of Medicine and review the data in full.

And that makes a huge difference the credibility of that publication. And again, we don’t talk about it -- I think maybe we don’t talk about it enough. The lead authors on each of those papers in New England Journal were the co-chairs of our Independent Executive Steering Committee for INNO2VATE and PRO2TECT.

So, the analyses in the New England Journal, how we abstract that, show up at the scientific meetings, the analysis of the data in general from the beginning have been overseen and done in collaboration with this independent steering committee, and that I think, brings great credibility to the data, to the process, and as at the end of the day allows us very significant differentiation.

I don’t know if Steve or Dell -- Dell, do you want to add some?.

Yes. I think, certainly recent market events create perceptions and some confusion in the marketplace. And we certainly hear that from nephrologists.

But I think as the potential first-in-class product here, we have a lot of work to do, moving forward and ensuring that we are differentiating vadadustat from other HIFs and ESAs as well as ensuring that people are really clear on the unmet need, which we believe is still very substantial and nephrologists understand that as well..

That might have been the most important thing that came out of the AdCom was that hour of open discussion where you heard from patients both dialysis and non-dialysis patients about the need. And I think, I know the FDA heard that as well and sees the need here also. So, we’re encouraged by our position..

Just another quick one from us.

As your commercialization plans materially change, I understand that you mentioned as a larger opportunity out there now following the AdCom, have you made changes to your commercialization plan following that AdCom meeting?.

So, yes, I mean, I guess in fairness, the opportunity is still the same, the market still same. We just have the opportunity for us. I mean, Dell and his team are pretty excited about that..

Yes. We’re really excited about it. I think, the opportunity to be first and to be a leader in the marketplace gives us the opportunity, as mentioned, to really differentiate ourselves from the other HIF products, as well as the ESA, and to really help build that unmet need in the marketplace, as John talked about.

So, when you look at our overall commercialization plan, I don’t think it’s materially changed in customers that we’re working with in the marketplace, how we’re engaging with Auryxia today and how we plan to engage with vadadustat upon approval.

But we certainly recognize the opportunity to be the market lead, as the first product to market potentially, and really, really excited about it..

And in relationship with Vifor still has a lot of power for us also. As we said that that’s what really moves the needle quickly for us in the dialysis community. So, yes, it’s an exciting time, it really is. The opportunity to potentially be first to market is kind of a game changer for us..

Thank you. Our next question comes from the line of Eric Joseph, JP Morgan. Your line is open..

Assuming approval in both the non-dialysis and dialysis settings, can you just unpack a little bit more how the reimbursement and economic constraints differ between the two segments? And what that could mean for net pricing with vadadustat in the two segments? And then, perhaps separately, is TDAPA eligibility something that applies in the non-dialysis setting? Thanks..

They are two very different markets and different from a reimbursement standpoint. And I’ll ask Dell to walk through that..

So, I think starting with -- at the highest level, when you look at the dialysis opportunity, it’s really contract-driven at the dialysis organization level. And the TDAPA payment, which we believe we’re eligible for, it’s intended to drive use of new and innovative products at launch.

And we think the rule is clear here, and that will be covered for the patients that are part of the PPS bundle. In addition to that, there are other payment groups, but still that drives largely through the dialysis contract. So, that’s if you look at the dialysis business.

If you move over and look at the NDD population, it’s going to be a more typical contracting with payers and PBMs for coverage of the product. And we anticipate, given the unmet need in the space, that we will be able to obtain coverage for our product and drive coverage and get access and reimbursement. That will be important moving forward.

And obviously, that’s the key focus for us right now..

Yes. And again, as we said upfront, I always want to make sure, we tell people that we remain cautious on the NDD indication, given the [indiscernible] base. But overall -- but as I also said, we still feel quite confident in the data that we’ve submitted. And we’ll be ready to launch in both areas. And you had a second question….

TDAPA eligibility..

Yes. TDAPA eligibility was not applied to the non-dialysis setting..

Our next question comes from the line of Ed Arce with H.C. Wainwright..

Three for me. First, on the line of discussion around differentiation here, we talked about the adverse events that were highlighted at the recent AdCom. I’m wondering if there’s any quantitative data around the EPO overshoots.

And given the focus on the rapid rise there, if there’s any data, specifically that you can point to, either in the New England Journal, or is that something that perhaps you could look to or we could look to for -- at ASM as potential follow-on publication or analysis? That’s one.

Second is given the receipt of CRO on tenapanor in hyperphosphatemia, just wondering your impressions from clinicians on the impact on the overall space there and potentially the impact to Auryxia’s growth going forward? And then, finally, the question on the regulatory milestones.

I know we went over this in the prepared remarks, but I missed some of the numbers. So, if you could repeat that. That’d be helpful. Thank you so much..

Ed, thanks so much for your questions. So first, on the AEs, we haven’t published the data on EPO, which is what we said is that it was clearly fewer overshoots to vadadustat versus darbepoetin. That certainly could be the basis for a publication later. And we do think it will be an important differentiator. So I think you were right to bring that up..

And that is all mentioned in the New England Journal, publication..

It is, yes. Sorry Kristen, it’s mentioned. The data just doesn’t accompany at this point. So, but would certainly be an interesting publication on its own. And then, your second question was on the CRO for tenapanor and the impact on that.

As a purpose-driven company that’s focused on patient care, anything that actually can help patients achieve a lower hyper -- lower phosphorus level, manage hyperphosphatemia, I think would be welcome. So, from that perspective, I guess, it’s disappointing.

We never really looked at it in a -- as a competitor per se, but we really thought that that would be -- there would be utilization of the products together, but I don’t think we see much impact. Other than that, we believe in Auryxia’s growth potential and it will grow this year.

Dell, do you want to add comments on that?.

No, I think there is a tremendous amount of room for improvement in patient outcomes, and so, certainly, from an impact perspective in the space. But, as John said, we believe that Auryxia is an important part of that equation in improving outcomes. And it’s a foundational treatment for hyperphosphatemia and it has been for more than six years.

And we have a lot of real world efficacy and safety data that supports that. So, from our point-of-view, it hasn’t really changed our view of what we hope to accomplish with Auryxia. And we’re going to continue to execute against our commercial plans to drive net revenue growth moving forward..

Thanks, Dell. And David….

Yes. Ed, I can clarify the regulatory milestones. So, in the U.S., for a first HIF approved in dialysis, the milestone would be $15 million; and if we are the first HIF approved in non-dialysis, that would be $50 million..

Ladies and gentlemen, that concludes our Q&A session. I would now like to turn the call back over to Mr. Butler for closing remarks..

Thanks, Towanda. And thanks to everyone who joined us for the call today. As I mentioned, this is a very exciting time for Akebia. The potential to be first in class is really energizing the Company. And we’ll look forward to continuing to update you on our progress as we move through the year. Thank you..

Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect..