Akebia, Otsuka pen $865M expansion to anemia pill pact

Otsuka logo on office wall
Otsuka has now committed close to $2 billion in deals for Akebia's vadadustat.

Otsuka Pharmaceutical has expanded its anemia pact with Akebia Therapeutics. The revised deal gives Otsuka the rights to anemia pill vadadustat in return for $73 million upfront and up to $792 in development funding and milestone payments.

Akebia landed the original deal with Otsuka late last year. That agreement gave Otsuka the U.S. rights to phase 3 oral hypoxia-inducible factor stabilizer vadadustat. Otsuka paid $125 million and committed to up to $905 million more in milestones and development funding for the U.S. rights. And has now put itself on the hook for a similar amount to round out its rights to vadadustat with a deal covering Europe, China, Russia, Canada, Australia and the Middle East.

Otsuka will make tiered, double-digit royalty payments that could rise to 30% on sales it makes in the markets now under its jurisdiction.

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The deal expansion also gives Akebia $135 million in development funding, adding to the money it has already extracted from Otsuka and its other partner Mitsubishi Tanabe Pharma to support a phase 3 trials. With the phase 3 trials set to enroll 5,700 patients, the deals have equipped Akebia to run and maintain control of a sizable late-stage program without going cap in hand to investors. And given it a single partner to support the work in two key markets.

“We now have a single, strong collaborator for the two largest markets, the U.S. and Europe. This simplifies governance and decision making, maximizing the efficiency of our global phase 3 development program and ultimately the commercialization of vadadustat,” Akebia CEO John Butler said in a statement.

The deal wraps up a period of dealmaking that has secured the near-term financial future of vadadustat and set Akebia up to pull in sizable sums if the anemia drug is a clinical and commercial success. Akebia got the streak going late in 2015 when it offloaded rights to vadadustat in Japan and other Asian countries to Mitsubishi in a $350 million deal, before following up with the two Otsuka agreements.

Akebia has emerged from the agreements with upward of $573 million in upfront payments and development funding, plus milestone commitments that could top out above $1.5 billion.

Otsuka and Mitsubishi struck the agreements on the strength of the potential for vadadustat to increase hemoglobin levels in anemic patients with chronic kidney disease. The hope is vadadustat will deliver more consistent, gradual increases in hemoglobin than is achieved using recombinant erythropoiesis stimulating agents such as Amgen’s Epogen. And that its oral dosage form and potential for flexible dosing will make it a more convenient option than the competition. GlaxoSmithKline and FibroGen also have oral anemia drugs in late-phase development.

Shares in Akebia jumped 28% in after-hours trading following the news. The original Otsuka deal also triggered a double-digit upswing in Akebia’s stock price.