After safety concerns derailed an approval of Akebia Therapeutics’ blockbuster hopeful vadadustat late last month, the company warned that a restructuring was in the cards. This week, Akebia telegraphed job cuts for nearly half of its workforce and revealed deeper issues with the FDA on its lead drug candidate.
Akebia’s board of directors on Monday signed off on plans to slash the company's workforce by some 42% across “all areas of the company,” or 47% including the closing of most open job positions, a filing says. The move follows last month’s receipt of an FDA complete response letter on HIF-PH inhibitor prospect vadadustat, a candidate to treat anemia from chronic kidney disease (CKD).
"We believe vadadustat could have delivered benefit to the hundreds of thousands of people living with anemia due to CKD in the U.S. and are disheartened that we cannot deliver a new treatment option," Akebia CEO John Butler told Fierce Pharma in an emailed statement Thursday. "We’re disappointed to be in a position where a workforce reduction was necessary," he said, adding that the move was "critical to the long-term sustainability of the company."
Vadadustat’s rejection came about half a year after the FDA’s high-profile rebuff of fellow HIF-PH classmate roxadustat, developed by FibroGen and AstraZeneca. In Akebia’s case, the regulator noted safety concerns for the company’s Otsuka-partnered drug, including higher risks of thromboembolic events and liver injury. On the heels of the FDA’s snub, Butler said the company would need to tighten its belt.
“We will be making adjustments to our cost structure to reduce spend while still enabling us to invest in the future,” the CEO said on a conference call late last month.
In its securities filing, Akebia said it expects the layoff round to be “substantially completed” by the end of the second quarter.
Akebia’s only marketed drug, Auryxia, generated sales of $142 million last year, climbing 10% over the sum it earned in 2020. The job cuts will help Akebia "to focus on Auryxia, our commercial product, as well as to explore strategic pipeline assets," Butler added in his emailed statement.
Meanwhile, the company says it will pursue “additional measures to further reduce its operating expenses and increase revenue from Auryxia.”
Employees hit by the job cuts, meanwhile, will receive separation benefits including severance pay, healthcare coverage and other related benefits, Akebia said. The company expects to take a one-time restructuring charge of about $12 million. Conversely, Akebia expects the staff reduction to save about $60 million to $65 million in net cash required for operating activities through the end of 2023.
"We extend our deepest appreciation to our departing team members—colleagues and friends—who worked tirelessly toward our purpose," the CEO added. "As we move forward, our team remains committed to making Akebia a great place to work for our employees so that we may best serve our patients and the broader community."
Restructuring aside, Akebia’s vadadustat woes are deepening. Alongside news of the proposed job cuts, Akebia revealed that the FDA has slapped a partial clinical hold on its U.S. trials of vadadustat in kids with anemia due to CKD.
“As a result of the partial clinical hold, all activities in the United States for and related to the Company’s clinical trials of vadadustat in pediatric patients will be suspended,” the company said.
Outside the U.S., vadadustat has clinched approval in Japan for anemia from CKD in both dialysis-dependent and nondialysis-dependent patients. There, the company’s local partner Mitsubishi Tanabe Pharma is marketing the drug under the Vafseo moniker.
Following the dual rejection of vadadustat and roxadustat, prospects for the HIF-PH inhibitor class look dim in the U.S. Up next with a contender is GlaxoSmithKline with its daprodustat. Armed with wins in trials for both dialysis and non-dialysis patients, GSK is expected to submit applications for approval in the U.S. and Europe in the first half of 2022.
Akebia’s job cuts come amid something of a restructuring spree in the biotech world. In March alone, Fierce Biotech tallied 17 companies total that announced layoffs, including smaller outfits like Ovid Therapeutics, Zosano and 2seventy bio plus pharma majors Merck & Co., Gilead Sciences and Biogen.
So far in April, job cuts have been disclosed at Sanofi, bluebird bio, Novartis and, now, Akebia.