Akebia Secures $55 Million Term Loan Financing

Rhea-AI Summary

Akebia Therapeutics, Inc. has closed a loan facility with BlackRock, providing up to $55.0 million of borrowing capacity. The loan will be used to pay down principal outstanding from a previous loan agreement and extends the interest-only period in the event of vadadustat approval by the FDA. The company also has the option to draw down an additional $18.0 million contingent on FDA approval. Akebia's CEO, John P. Butler, expressed satisfaction with the new loan facility and the ongoing support from Pharmakon Advisors, LP.

Insights

Financial Analyst

Akebia Therapeutics' announcement of securing a loan facility with BlackRock-managed funds is a strategic financial move that offers the company a significant liquidity boost. The immediate access to $37.0 million, with an additional $18.0 million contingent on FDA approval, provides Akebia with the necessary capital to navigate the period leading up to and following the potential approval of vadadustat. This financing arrangement is particularly noteworthy as it extends the interest-only period and defers principal repayment, thereby reducing short-term cash outflows and preserving liquidity.

The transaction is also indicative of investor confidence in Akebia's prospects with vadadustat, as evidenced by the competitive terms of the loan. For stakeholders, this could signal a positive outlook on the drug's approval and future revenue streams. However, it is also important to consider the increased financial leverage and the eventual repayment obligations that come with such financing.

Medical Research Analyst

The focus on vadadustat, Akebia's investigative treatment for anemia in patients on dialysis, highlights the importance of the drug's regulatory review by the FDA. Anemia management in chronic kidney disease is a significant clinical need and vadadustat represents a potential new class of therapy that could offer benefits over current treatments. The outcome of the FDA's decision will have a profound impact on Akebia's financial health and market positioning.

It's crucial to understand that the biopharmaceutical industry is highly dependent on the success of clinical trials and regulatory approvals. A positive FDA decision could lead to substantial revenue growth for Akebia, while a negative outcome might jeopardize the company's financial stability, despite the new loan facility.

Market Research Analyst

Analyzing the competitive landscape, Akebia's vadadustat enters a market with existing treatments for anemia in kidney disease patients. The company's ability to capture market share will depend on vadadustat's clinical benefits, cost-effectiveness and how it differentiates from competitors. The strengthened balance sheet could enable more aggressive marketing and sales strategies post-approval.

Furthermore, the partnership with a reputable institution like BlackRock could enhance Akebia's credibility in the eyes of investors and partners. It's essential to monitor how the market reacts to this news, as it could influence Akebia's stock performance in the short term, with longer-term implications hinging on vadadustat's commercial success.

Strengthens Balance Sheet Ahead of Potential Vadadustat Approval on March 27, 2024

CAMBRIDGE, Mass., Jan. 30, 2024 /PRNewswire/ -- Akebia Therapeutics^®, Inc. (Nasdaq: AKBA), a biopharmaceutical company with the purpose to better the lives of people impacted by kidney disease, today announced it has closed a loan facility with funds and accounts managed by BlackRock. The loan provides Akebia with up to $55.0 million of borrowing capacity available in three tranches.

At the closing, Akebia drew the first tranche of $37.0 million and used the proceeds to pay down $35.0 million of principal outstanding from a loan agreement with Pharmakon Advisors, LP (Pharmakon), the investment manager of the BioPharma Credit funds, plus interest and fees. The new agreement substantially extends the interest-only period in the event of vadadustat approval by the U.S. Food and Drug Administration (FDA) without requiring any principal repayment until December 31, 2025, with an option for Akebia to extend until December 31, 2026.

Two additional tranches comprising a total of $18.0 million are available to be drawn down at Akebia's option through December 31, 2024, contingent in part on FDA approval of vadadustat. Details of the loan agreement are provided in a Current Report on Form 8-K filed on January 30, 2024.

"Now within two months of a major milestone, the potential U.S. approval of vadadustat, we are pleased to have further strengthened our balance sheet with the immediate addition of a $37.0 million loan facility on very competitive terms with an excellent partner in BlackRock," said John P. Butler, Chief Executive Officer of Akebia. "The loan from BlackRock-managed funds and accounts enables our team to use capital more strategically as we prepare to launch a potential new medication for patients on dialysis with anemia. We also deeply appreciate Pharmakon, a tremendous partner for more than four years. The ongoing support from Pharmakon has contributed meaningfully to our ability to fund operations as we worked through the regulatory process for vadadustat globally. We are now delighted to embark on this new journey with this investment from BlackRock."

About Akebia Therapeutics
Akebia Therapeutics, Inc. is a fully integrated biopharmaceutical company with the purpose to better the lives of people impacted by kidney disease. Akebia was founded in 2007 and is headquartered in Cambridge, Massachusetts. For more information, please visit our website at www.akebia.com, which does not form a part of this release.

Forward-Looking Statements
Statements in this press release regarding Akebia Therapeutics, Inc.'s ("Akebia's") strategy, plans, prospects, expectations, beliefs, intentions and goals are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, as amended, and include, but are not limited to, statements regarding: Akebia's expectations regarding a decision by the FDA on its New Drug Application for vadadustat, including the timing thereof; and Akebia's expectations and beliefs regarding the impact that the loan facility with BlackRock will have on Akebia, including its ability to use capital more strategically. The terms "intend," "believe," "plan," "goal," "expect," "potential," "anticipate," "will," "continue," derivatives of these words, and similar references are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results, performance or experience may differ materially from those expressed or implied by any forward-looking statement as a result of various risks, uncertainties and other factors, including, but not limited to, risks associated with: decisions made by health authorities, such as the FDA, with respect to regulatory filings, including the anticipated FDA decision on the NDA for vadadustat and the potential effects of a negative decision on Akebia's cash runway; the potential therapeutic benefits, safety profile, and effectiveness of vadadustat; the potential demand and market potential and acceptance of, as well as coverage and reimbursement related to, Auryxia and vadadustat if approved, including estimates regarding the potential market opportunity; the competitive landscape for Auryxia and vadadustat if approved, including potential generic entrants; the ability of Akebia to attract and retain qualified personnel; Akebia's ability to implement cost avoidance measures and reduce operating expenses; the results of preclinical and clinical research; the direct or indirect impact of the COVID-19 pandemic on regulators and Akebia's business, operations, and the markets and communities in which Akebia and its partners, collaborators, vendors and customers operate; manufacturing, supply chain and quality matters and any recalls, write-downs, impairments or other related consequences or potential consequences; and early termination of any of Akebia's collaborations. Other risks and uncertainties include those identified under the heading "Risk Factors" in Akebia's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, and other filings that Akebia may make with the U.S. Securities and Exchange Commission in the future. These forward-looking statements (except as otherwise noted) speak only as of the date of this press release, and, except as required by law, Akebia does not undertake, and specifically disclaims, any obligation to update any forward-looking statements contained in this press release.  

Akebia Therapeutics^® is a registered trademark of Akebia Therapeutics, Inc.

Akebia Therapeutics Contact
Mercedes Carrasco
mcarrasco@akebia.com

 

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SOURCE Akebia Therapeutics, Inc.

FAQ

What is the purpose of Akebia Therapeutics, Inc.?

Akebia Therapeutics, Inc. aims to better the lives of people impacted by kidney disease.

What is the ticker symbol for Akebia Therapeutics, Inc.?

The ticker symbol for Akebia Therapeutics, Inc. is AKBA.

What is the loan facility amount provided by BlackRock to Akebia?

BlackRock provided Akebia with a loan facility of up to $55.0 million.

What is the purpose of the loan facility obtained by Akebia from BlackRock?

The loan facility will be used to pay down principal outstanding from a previous loan agreement and extends the interest-only period in the event of vadadustat approval by the FDA.

What is the additional borrowing capacity available to Akebia through the loan facility?

Akebia has the option to draw down an additional $18.0 million contingent on FDA approval.

Who is the Chief Executive Officer of Akebia Therapeutics, Inc.?

The Chief Executive Officer of Akebia Therapeutics, Inc. is John P. Butler.