Akebia Therapeutics (NASDAQ: NASDAQ:AKBA) has maintained a Buy rating and a price target of $7.50 from H.C. Wainwright.
The firm's endorsement follows the recent announcement that the Center for Medicare & Medicaid Services (CMS) has recognized Vafseo (vadadustat) for the Transitional Drug Add-On Payment Adjustment (TDAPA).
This decision, effective from January 1, 2025, will grant Vafseo two additional years of reimbursement, separate from the standard end-stage renal disease (ESRD) bundled rate, for dialysis organizations.
The CMS's determination is a significant step in Akebia's strategy for the U.S. commercial launch of Vafseo. The drug, which received FDA approval in March 2024 for treating anemia due to chronic kidney disease (CKD) in adults on dialysis, will be marketed starting January 2025 as a TDAPA product. Additionally, Vafseo has been assigned a Level II Healthcare Common Procedure Coding System (HCPCS) code, enabling dialysis organizations to bill Medicare directly.
Further guidance from the CMS is expected to arrive in the form of a Medicare Claims Processing Change Request, which will provide detailed billing instructions to dialysis organizations for the TDAPA payments under Medicare. This forthcoming documentation will support the billing process for Vafseo, reinforcing its position in the market.
The endorsement of Vafseo's TDAPA status comes shortly after Akebia announced a commercial supply contract with U.S. Renal Care (USRC), a rapidly growing dialysis provider in the United States. The agreement, detailed in a report from October 8, 2024, illustrates Akebia's progress in establishing a strong distribution network for its product.
In other recent news, Akebia Therapeutics has seen significant developments with its anemia drug Vafseo. The Center for Medicare & Medicaid Services has approved additional reimbursement for Vafseo to dialysis organizations, a move that is expected to support the adoption of the drug within these practices. The biopharmaceutical firm has also entered into a substantial commercial supply agreement with U.S. Renal Care for Vafseo, set to be available in January 2025.
The company has initiated a clinical trial known as the VOICE trial, in collaboration with U.S. Renal Care, to evaluate Vafseo's effects on dialysis patients. In a strategic shift, Akebia ended its collaboration with CSL (OTC:CSLLY) Vifor and amended loan terms with Kreos Capital VII, managed by BlackRock Inc (NYSE:BLK), thus regaining full sales rights to Vafseo in the United States.
H.C. Wainwright has reiterated a Buy rating for Akebia, reflecting confidence in the company's commercial strategy and the potential market penetration of Vafseo. Financially, Akebia reported an improvement in Q1 2024 revenues, totaling $32.6 million, despite a net loss of $18 million.
The company remains well-capitalized with $42 million in cash and equivalents. As part of the executive team changes, Akebia appointed Erik Ostrowski as Senior Vice President, Chief Financial Officer, Chief Business Officer, Treasurer, and Principal Financial (NASDAQ:PFG) Officer.
InvestingPro Insights
To complement the positive outlook for Akebia Therapeutics (NASDAQ:AKBA) following the CMS's recognition of Vafseo, InvestingPro data provides additional context for investors. Despite the recent developments, it's important to note that Akebia is not currently profitable, with a negative P/E ratio of -7.0 over the last twelve months as of Q2 2024. This aligns with an InvestingPro Tip indicating that analysts do not anticipate the company will be profitable this year.
However, there are signs of potential improvement. The company's EBITDA for the last twelve months as of Q2 2024 stands at $4.08 million, with an impressive EBITDA growth of 119.82% over the same period. This growth could be indicative of the company's progress towards profitability, possibly driven by developments like the Vafseo approval and recent commercial agreements.
Another InvestingPro Tip highlights that two analysts have revised their earnings upwards for the upcoming period, which may reflect optimism surrounding the Vafseo launch and its TDAPA status. For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could further inform investment decisions regarding Akebia Therapeutics.
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