On Tuesday, H.C. Wainwright maintained a Buy rating on Akebia Therapeutics (NASDAQ:AKBA) stock with a steady price target of $7.50, significantly above the current trading price of $1.88. The firm's valuation of Akebia shares is based on a risk-adjusted net present value (rNPV) model.
The price target is comprised of several key components relating to the company's products and market prospects. According to InvestingPro data, analyst targets range from $4.00 to $7.50, reflecting strong upside potential despite the company's current $411.27 million market capitalization.
The first element contributing $4.17 per share to the price target is the anticipated U.S. net sales of Vafseo, which is expected to launch in January 2025. The projections include a 100% probability of success (PoS) and forecast peak sales reaching approximately $1.049 billion by 2031.
Additionally, $2.69 per share is attributed to projected royalty revenues from Vafseo in the European Union market, with peak royalties estimated at $343 million in 2033. These projections are particularly significant given the company's current annual revenue of $169.88 million and recent momentum, with InvestingPro showing a 48.41% price return over the past six months.
Furthermore, the analysis includes $0.53 per share from Auryxia's net sales for treating hyperphosphatemia. However, the Centers for Medicare & Medicaid Services (CMS) has declined to cover the iron deficiency anemia (IDA) indication, and sales are expected to decline after the product becomes widely generic on March 20, 2025. Lastly, the model assigns negligible value to royalties from Vafseo sales in Japan due to the terms of the royalty interest acquisition agreement signed in February 2021.
H.C. Wainwright also outlined several risks that could impact the investment thesis and target price for Akebia Therapeutics. These risks include the potential for a smaller commercial opportunity for Vafseo due to factors such as market size, competition, or pricing. Other concerns are the possibility of additional regulatory requirements causing significant delays, challenges related to intellectual property, and the company's ability to raise sufficient capital on reasonable terms.
In other recent news, Akebia Therapeutics has begun shipping its anemia treatment, Vafseo, to adult patients with chronic kidney disease (CKD) on dialysis in the U.S. Akebia has also announced plans for a Phase 3 trial in mid-2025 for the use of vadadustat in late-stage CKD patients not on dialysis, following feedback from the U.S. Food and Drug Administration.
In financial updates, Akebia reported a decrease in total revenue to $37.4 million from $42 million in the same quarter of the previous year. The company recorded a net loss of $20 million for the quarter, mainly due to increased spending on Vafseo's prelaunch activities and a decline in revenue from its existing product, AURYXIA.
Despite these financial challenges, Akebia is optimistic about Vafseo's potential, particularly in the dialysis and non-dialysis CKD patient segments. The company has secured reimbursement agreements and is actively engaging with the medical community to promote Vafseo's benefits.
Lastly, Akebia is planning to start enrollment for the VOICE trial for Vafseo soon and is focused on expanding dialysis center supply contracts from 60% to 100% by the Vafseo launch date.
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