Otsuka drops beleaguered Akebia after FDA snub. Will AstraZeneca follow suit with FibroGen?

Akebia Therapeutics is slipping into even more trouble after the FDA's surprise rejection of its oral anemia drug vadadustat. After a round of layoffs, the beleaguered biotech has found its partner Otsuka and the Nasdaq stock exchange rubbing salt in its wounds.

In a bitter breakup, Otsuka has decided to terminate the licensing deals covering vadadustat for chronic kidney disease (CKD) anemia for the U.S., Europe and other regions, Akebia said (PDF) Friday. Otsuka is jumping ship even as applications for the drug have been submitted to multiple drug agencies, including the European Medicines Agency and regulators in the U.K., Switzerland and Australia.

Simultaneously, Nasdaq on Thursday sent Akebia a warning of potential delisting from the exchange because the company’s stock price has closed below $1 per share for 30 consecutive trading days.

Otsuka and Akebia originally inked their U.S. partnership in late 2016 and added more international markets in April 2017. Now, the ex-U.S. part of the deal is being capped in a civil manner; Otsuka will officially bow out a year from now. But the U.S. section has triggered a disagreement.

Otsuka is alleging “material breaches” by Akebia and is therefore demanding an early termination of the U.S. deal as early as June 12 rather than waiting a year. However, Akebia “disagrees with and intends to dispute” the allegations, the Cambridge, Massachusetts-based biotech said.

Under the agreements, Akebia leads vadadustat’s global development, while Otsuka funds 80% of the costs. As of the end of March, Akebia had received $813 million from the collaboration. Akebia said it will continue to support those ongoing vadadustat applications.

The termination doesn’t affect vadadustat’s ongoing marketing in Japan, where it’s sold under the brand name Vafseo by Mitsubishi Tanabe Pharma since its launch in CKD anemia in August 2020.

The Otuska-Akebia situation draws comparisons to the FDA rejection of FibroGen and AstraZeneca’s rival drug roxadustat.

A few days ago, FibroGen revealed that the partners “have not been able to find a path forward for AstraZeneca to fund further roxadustat development of anemia of CKD in the U.S.” The FDA has said that the companies need to run additional clinical trials if they want to try roxadustat with the agency in CKD anemia again. Without an agreement on what that clinical program should look like, the U.S. part of the FibroGen-AZ collaboration also looks to have hit a dead end.

For its part, Akebia has been in hot water after the FDA in March spurned vadadustat in both dialysis-dependent and nondialysis renal anemia because of cardiovascular and liver toxicities. The rebuff dashed Akebia’s commercial expansion plan and its blockbuster hopes of being first to the market with an oral HIF-PH inhibitor following roxadustat’s high-profile rejection.

To cope with the setback, Akebia last month said it would cut 42% of its workforce to save costs. Then last week, the company said its chief commercial officer Dell Faulkingham and its chief operating officer Michel Dahan have agreed to leave effective June 30, 2022, and Jan. 23, 2023, respectively.

The FDA decision—and the gloomy business outlook—has hit Akebia’s stock price hard. The company now has 180 calendar days to find a way to lift its closing share price to $1 or above for at least 10 consecutive trading days to be compliant with Nasdaq’s listing rules. It may be eligible for an additional 180-day grace period.

Akebia will monitor its share price and may “consider available options,” which it said could include a reverse stock split.