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Akebia Therapeutics Inc (NASDAQ:AKBA)
Q4 2019 Earnings Call
Mar 10, 2020, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Akebia Fourth Quarter and Full-Year 2019 Financial Results and Business Highlights Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference to your host today, Kristen Sheppard. Please go ahead, ma'am.

Kristen K. Sheppard -- Vice President, Investor Relations

Thank you and good morning. My name is Kristen Sheppard, Vice President of Investor Relations with Akebia. Thank you for joining us to discuss Akebia's fourth quarter and full-year 2019 financial results and our recent business highlights. The press release containing the Company's financial results for the fourth quarter and the full year was issued earlier this morning and is available on our Investor Relations website. For your convenience, an audio replay of today's call will also be available on our website shortly after we conclude today's webcast. Joining our call today are John Butler, President and Chief Executive Officer, and Jason Amello, Chief Financial Officer.

Before we begin, I'd like to remind everyone that this conference call includes forward-looking statements. Each forward-looking statements contained in this call is subject to risks and uncertainties that could cause actual results to differ materially from those described in these statements. Additional information regarding these factors is described in the Risk Factors and Management's Discussion and Analysis sections of our most recent quarterly and annual reports filed with the SEC. The forward-looking statements on this call speak only as of the original date of this call and we do not undertake any obligation to update or revise any of these statements.

With that, I'd like to turn the call over to our CEO, John Butler. John?

John Butler -- President and Chief Executive Officer

Thanks, Kristen. Good morning, everyone, and thanks for joining us today. 2019 was a year of considerable progress for Akebia, as we continued to advance our global Phase 3 program for vadadustat and position Akebia for the future. More specifically, we made great strides executing on our global Phase 3 program for vadadustat, having achieved full enrollment in PRO2TECT and INNO2VATE with [Phonetic] over 7,400 patients. In Japan, our collaboration partner, Mitsubishi Tanabe, submitted a JNDA for vadadustat. If approved, this is expected to lead to the first launch of vadadustat worldwide this year. We added key members to our senior team and bolstered our capabilities by successfully integrating a 140-person nephrology-focused commercial organization, and we executed on our financing strategy, strengthening our balance sheet with a $100 million non-dilutive term loan.

As a result of these achievements, we entered 2020 well positioned with significant opportunities to continue advancing our mission to better the life of each person impacted by kidney disease and build long-term value for our shareholders. With many significant milestones on the horizon, 2020 is already shaping up to be equally, if not more exciting than 2019.

We've developed what I think is an exciting path forward for vadadustat. So let me summarize the big picture at Akebia and what we're focused on in the coming months and throughout the year. Our highest priority remains the successful execution of our global Phase 3 program for vadadustat, our investigational HIF-PHI being developed for the treatment of anemia due to CKD, which we believe is our largest value driver. To that end, I am excited to say that the countdown to our data has begun. In just a short time, next quarter, in fact, Akebia plans to provide the first readout of our global Phase 3 program for vadadustat. We expect to report top-line data from INNO2VATE, our studies in patients with anemia due to CKD on dialysis in Q2. We expect to follow that with top-line data from PRO2TECT, our studies in non-dialysis patients with anemia due to CKD the middle of this year.

It's incredibly energizing to all of us at Akebia to consider how close we are to the data readouts and to the potential introduction of vadadustat into our nephrology-focused commercial engine, subject to regulatory approval. Akebia has an incredible opportunity to make a difference in the lives of patients with anemia due to CKD. An estimated 5.7 million people in the U.S. suffer from anemia due to CKD. Essentially every organ in the body is affected by this disease, most notably the kidneys and heart. There are limitations to the current standard of care in treating and managing this disease, including the risk of cardiovascular events. Our goal is to establish vadadustat upon regulatory approval as a new oral standard of care to address important patient and prescriber needs with a differentiated safety profile compared with the current standard of care, ESAs. We have a tremendous amount of confidence in our clinical development program, and believe it's designed for clinical, regulatory, and commercial success. Very importantly, we expect clear data readouts for efficacy and safety.

First, both INNO2VATE and PRO2TECT are designed to assess non-inferiority for efficacy and cardiovascular safety for vadadustat using an active control, darbepoetin alfa, an injectable ESA, which is the current standard of care. Simply put, we believe that in order to change the standard of care, you need to compare to the standard of care. We believe this will enable a straightforward collection and analysis of major adverse cardiovascular events or MACE across the relevant studies and ultimately a clear and understandable data readout on both efficacy and safety, setting us further apart from our competition.

Going a little deeper into what differentiates vadadustat. If successful with these studies, we expect vadadustat to be the first drug of its class in the U.S. and EU markets with clear data directly comparing its outcomes to the current standard of care in both dialysis and non-dialysis patients. We believe these data will be highly informative for physicians, patients, and payers as they make important decisions about patient care and a key consideration when differentiating between HIF-PHIs in the class.

We have thoroughly and thoughtfully constructed a global Phase 3 program, which was designed after extensive dialog with the FDA and European regulators. We have a straightforward statistical analysis plan in place, a prospectively defined and agreed to non-inferiority margin with the FDA and EMA, and we also agreed with the FDA on the key components of our statistical analysis plan, all of which further increase our confidence in the success of our program. So, this is a very exciting program on multiple levels and we believe all of this sets up an incredibly important period in the Akebia story this year; expected top-line data readouts from our global Phase 3 program for vadadustat.

Consistent with the timelines we set forth over a year ago, we expect to report top-line data from INNO2VATE next quarter, followed by top-line data from PRO2TECT the middle of this year. As you would expect, as the time approaches, we'll move into a quiet period with respect to our communications with investors and analysts so that we can analyze the top-line data and prepare for release. We plan to submit additional data from these studies for presentation at future scientific venues and publication in peer-reviewed journals. And that's not all. As I mentioned earlier, we've developed what I think is an exciting path forward for vadadustat. Recently, we announced an agreement with our partner in dialysis, Vifor Pharma, to potentially access a Priority Review Voucher or PRV for the vadadustat NDA with the FDA to expedite review. While there's more work to be done, we believe this path would meaningfully enhance the potential of bringing vadadustat to patients as quickly as possible, subject to regulatory approval.

Finally, we believe we are well positioned for a very strong vadadustat launch upon approval, with our partner Otsuka sharing in the launch costs and responsibilities and a distribution agreement with Vifor Pharma that facilitates access to up to 60% of the dialysis patients in the U.S., coupled with our existing nephrology-focused commercial organization. I'm very pleased with the strength of our partnerships and I'm encouraged by the confidence and enthusiasm our partners continue to demonstrate in both vadadustat and Akebia. These partnerships continue to allow us to creatively and cost effectively advance vadadustat in ways that we believe have the potential to drive significant value for our investors.

When you take all of these efforts, our depth of experience, the design of our clinical program, the potential to accelerate our NDA with a PRV and our launch plans, you can see why we're so excited about the future.

I'll stop there and let Jason take you through the numbers.

Jason Amello -- Senior Vice President and Chief Financial Officer

Thank you, John, and good morning. As John mentioned, our highest priority is executing on our global Phase 3 program for vadadustat. We're also making significant progress to further developing our commercial strategies and capabilities to maximize the value of vadadustat, subject to approval. As we go through the financial results for the fourth quarter and the full year of 2019, it's important to keep in mind for comparison purposes that our merger with Keryx Biopharmaceuticals closed on December 12, 2018, and as a result, 2018 only reflects 18 days of Keryx's operating results through December 31, 2018.

So starting with revenue, total revenue was $69.6 million for the fourth quarter of 2019, compared to $59.9 million for the fourth quarter of 2018 and $335 million for the full year 2019, compared to $207.7 million for the full year of 2018. Our collaboration agreements are both highly strategic and important elements of our financial strength. And given that, total collaboration and license revenue continues to be a significant source of revenue for us, reflecting the value we are creating as we continue to execute and advance our programs. So, majority of our collaboration revenue for both periods relates to our Otsuka agreements. Historically, Otsuka has funded 52.5% of our Phase 3 development cost of vadadustat, and starting in Q2 2019, Otsuka began funding 80% of these costs.

Collaboration revenue was $40.6 million for the fourth quarter of 2019, compared to $53 million in the fourth quarter of 2018 and $223.9 million for the full year 2019, compared to $200.9 million for the full year of 2018. The change in both periods is due to the timing in which vadadustat development expenses are incurred and the associated revenue being recognized on a percentage of completion basis. With continued progress, future collaboration revenue will also come in the form of additional milestones and royalties, which I'll discuss in a moment.

Net product revenue for the sales of Auryxia was $28.9 million for the fourth quarter of 2019, compared with $6.8 million for the 18 days of 2018 and $111.1 million for the full year of 2019, compared to $6.8 million for the 18 days of 2018. If you would add the unaudited sales recorded by Keryx before the merger, pro forma net product revenue from the sales of Auryxia for the full year of 2018 would have been approximately $96 million. Cost of goods sold associated with the manufacturer of Auryxia was $38.1 million for the fourth quarter of 2019, which includes non-cash charges related to the application of purchase accounting as a result of the merger with Keryx of $18.8 million for inventory step-up and $9.1 million for the amortization of intangibles. Cost of goods sold was $145.3 million for the full year 2019, which includes non-cash charges of $70.4 million for inventory step-up and $36.4 million for amortization of intangibles.

Moving further down the P&L, R&D expenses were $80.4 million for the fourth quarter of 2019, compared to $87.1 million for the fourth quarter of 2018 and $323 million for the full year 2019, compared to $291 million for the full year of 2018. The change in both periods is largely attributable to a change in costs associated with our research and development programs, including our PRO2TECT and INNO2VATE Phase 3 studies as they advance toward readout this year. It is important to keep in mind that 80% of our Phase 3 costs are reimbursed by Otsuka, which gets recorded as collaboration revenue as I mentioned earlier.

Selling, general and administrative expenses were $44.9 million for the fourth quarter of 2019, compared to $55.1 million for the fourth quarter of 2018, which included $41.7 million of merger-related expenses in 2018. For the full year of 2019, SG&A was $149.5 million, compared to $87.1 million for the full year of 2018, which included $49.5 million of merger-related expenses in 2018. Excluding the merger-related expenses in 2018, the increase for both periods over 2018 is primarily attributable to having a full year of Auryxia commercialization-related costs in 2019 versus only 18 days in 2018.

As a result of the foregoing operating results, the Company reported a net loss of $94.5 million for the fourth quarter of 2019, compared to $60.1 million for the fourth quarter of 2018 and $279.7 million for the full year of 2019, compared to $143.6 million for the full year of 2018. Again, I want to point out that the net loss for the fourth quarter and the full year of 2019 includes the impact of non-cash charges to cost of goods sold of $27.9 million and $106.8 million respectively related to the application of purchase accounting for the merger with Keryx that I mentioned earlier.

Looking ahead, assuming approval of vadadustat in Japan, we expect to receive a $15 million regulatory milestone payment from Mitsubishi Tanabe this year. Also, as we move past our INNO2VATE and PRO2TECT readouts that are expected in Q2 and mid-2020 respectively, we expect both associated R&D expenses and revenues to decrease. Separately, I'll note that subject to the terms of our collaboration agreements with our strategic partners, Akebia has the potential to receive development and regulatory milestone payments from Otsuka upon the approval of vadadustat in the U.S. and in Europe.

Lastly, given the pending litigation and fundamental impact that CMS' non-coverage decision continues to have on our business, we are not providing guidance on Auryxia revenue and continue to be cautious on our planning for Auryxia net product revenue for 2020. We encourage you to do the same. Over the longer term, we remain optimistic about Auryxia's growth prospects.

With respect to our capital position, cash, cash equivalents and available for sale securities were $147.7 million at December 31, 2019. We are pleased to have extended our cash runway well into 2021 with disciplined spending and the identification of operating efficiencies, coupled with the receipt of a $15 million regulatory milestone from MTPC, assuming approval of vadadustat in Japan, and the additional sales of common stock under our ATM facility with Cantor Fitzgerald. The Company received net proceeds of $73.5 million upon the sale of 10.7 million common shares at a weighted average price of $7.04 per share, of which $16.8 million was received in Q4 of 2019 and $56.7 million was received this quarter. In line with good corporate governance, we expect to file a new ATM this quarter. Lastly, we ended the year with approximately 121.7 million shares outstanding.

With that, I'll turn it back to the operator for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from Chris Raymond with Piper Sandler. Your line is now open.

Chris Raymond -- Piper Sandler -- Analyst

Hey, thanks. Just a couple of questions. On the Priority Review Voucher, I wonder if you could just talk about your confidence, I guess, in the regulatory package that makes you again sort of confident that in an eight-month review, just kind of comparing this to the decision by your competitor, not to pursue that. I'm kind of just curious in terms of signals, feelings you get maybe from FDA, etc. Obviously, you must have had some degree of confidence to do this. Just maybe talk about that a little bit.

John Butler -- President and Chief Executive Officer

Yeah, sure, Chris. Thanks very much for the question. Really this goes back to the program, right? The clarity of the data that we expect to get from our Phase 3 program for both INNO2VATE and PRO2TECT. We've been saying this for years now about our expectation around how we will be able to analyze, interpret our data and by extension how we expect the agency will be able to do that in an efficient manner as well and that gives us tremendous amount of confidence that taking on a PRV and accelerating that review will pay great dividends in the future.

Chris Raymond -- Piper Sandler -- Analyst

Okay, good. And then just maybe a housekeeping issue. We found on ClinicalTrials.gov, you guys just recently posted a Phase 1 trial in healthy volunteers to assess, I think, looking at the effects of phosphate binders on the PK of vadadustat. Can you maybe talk about the reasoning there? And is that a gating factor at all in your package, or is this more of a marketing study, if you will?

John Butler -- President and Chief Executive Officer

Yeah, we decided to add a drug-drug interaction studies with phosphate binders. We have done a number of DDIs in the past and made the decision with our partner that it makes sense to do this. It's -- these are pretty quick studies. This won't be a gating item in our filing at all.

Chris Raymond -- Piper Sandler -- Analyst

Cool. Thanks very much.

John Butler -- President and Chief Executive Officer

Thanks, Chris.

Operator

Thank you. Our next question comes from Eric Joseph with J.P. Morgan. Your line is now open.

Eric Joseph -- J.P. Morgan -- Analyst

Hi, good morning. Thanks for taking the questions. Can you talk a little bit about where things stand in terms of vadadustat manufacturing into CMC? Whether there are any scale-ups or stability requirement that are required to move through ahead of launch? And, I guess, related to that, to what extent you might have Asia or China exposure for vadadustat manufacturing? Thanks.

John Butler -- President and Chief Executive Officer

Thanks, Eric. So, yes, we're obviously hard at work on getting everything prepared for filing. Our expectation for filing for vadadustat is that we roll out multiple API and drug product manufacturers as part of our initial label and all of the work that we need for registration is completed and obviously, we also have to have validation work done for Japan for PMDA. So, that work, obviously, is completed as well as that's well under review. So, we feel very confident about where we are with that.

We don't think that there was any impact from China. We do have manufacturing second source in China, but that validation work is ongoing now and we expect that there won't be any impact on timing for review or approval. And it is obviously -- the coronavirus, obviously, constantly evolving situation and we will continue to monitor that as well. And frankly, at the end of the day, I mean, the most important thing for us is patient safety and we think about the U.S. even. That's really where our primary thought is. This is a very fragile population, the dialysis population, who we deal with, but we haven't seen any impacts from it at this point, but we'll continue to monitor.

Eric Joseph -- J.P. Morgan -- Analyst

Got it. That's very helpful. Thanks for taking the question. I guess maybe a follow-up here. Just, is it -- is there any way that you can kind of help guide us to anticipating data within second quarter from INNO2VATE? I know in your opening comments you made a remark about kind of moving into a quiet period. Does that reflect sort of visibility that you're seeing on [Indecipherable] right now, and, I guess, is there a way to sort of narrow down when within second quarter we could anticipate top-line data? Thanks.

John Butler -- President and Chief Executive Officer

Thanks, Eric. So, second quarter has been our guidance for, I think, over a year now, and that's where we are maintaining guidance. Really, with INNO2VATE, this is no longer about what type of study, actually, is it about accrual of MACE events, and we are very confident that we have achieved or about to achieve the number of -- target number of MACE events. So, it's really about the time to clean the data, lock the database, analyze, etc. So -- and obviously that can take differential amounts of time. So, I think sticking with second quarter just is very comfortable for us to know we have the time to do this right.

Eric Joseph -- J.P. Morgan -- Analyst

Got it. Okay. Thanks for taking the questions.

John Butler -- President and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Difei Yang with Mizuho. Your line is now open.

Difei Yang -- Mizuho -- Analyst

Hi, good morning and thanks for taking my question. Just a quick one. With regards to the evolving COVID-19 situation, would that -- from risk management perspective, would that in any way might change the timeline on readout -- on top-line readouts just because of the potential disruption at different hospitals, etc., etc.?

John Butler -- President and Chief Executive Officer

Yeah. No, thanks for that question, Difei. So right now, we don't anticipate or see any significant impact that COVID-19 might have on the readout, but I said an answer to Eric's question, I mean, this is really about what's best for the patients and making sure that that remains our focus. It's -- again, we don't anticipate any change, but it's such an evolving situation that we're constantly kind of evolving with it, but as of now, we feel confident.

Difei Yang -- Mizuho -- Analyst

Okay, thank you. Thank you. Now, a more of a technical question relative to NDD setting for vadadustat. I think in the past, we talked about how ESA being used and being tested. We are just wondering from the top-line readout perspective, would we see any potential benefits with regards to delaying the progress from Stage 3 to Stage 4 and so on. Or should we just be expecting really very top-line results on non-inferiority?

John Butler -- President and Chief Executive Officer

Thank you, Difei, again for that question, gives us the opportunity to make sure we clarify what to expect in top-line readout. Top-line readout is just that. It's top-line. So, if you recall, for INNO2VATE and then you'll see the same for PRO2TECT, you have a primary efficacy endpoint for each of the two studies. The incident patient population and the conversion population in INNO2VATE and you will see a top-line primary efficacy endpoint readout for each of those and then, of course, you combine the MACE events and have one top-line safety readout and that's primary endpoint and that's what you will see in top-line data, along with kind of general safety. I mean, if you look at back at our old press releases from data that we presented, you'll get a sense of the completeness with which we present data, but it will be top-line. So things like progression, etc., that we will be saving for a future scientific meeting and publication.

Difei Yang -- Mizuho -- Analyst

Thank you, John, for the clarification.

John Butler -- President and Chief Executive Officer

Thank you, Difei.

Operator

Thank you. Our next question comes from Chad Messer with Needham. Your line is now open.

Gill -- Needham & Company, LLC -- Analyst

Hello, and this is Gill [Phonetic] on for Chad. Just a question about -- in previous presentations, you guys discussed new CMS rule about transitional drug add-on payment adjuster. Could you provide additional detail how this would improve your market access? Thank you.

John Butler -- President and Chief Executive Officer

Thanks for the question. So, TDAPA, Transitional Drug Add-On Payment Adjustment is a rule that was published by CMS late last year, and it will -- according to the final rule, it will apply to any new drug that is introduced for the dialysis population. Of course, vadadustat would be included in that. And what that allows for dialysis is for payment for the drug on an ASP basis outside of the bundle for two years. So, this is obviously really meant to encourage innovation for dialysis patients and it's incredibly helpful for driving uptake and adoption at the dialysis centers. So, we do expect that we'll be able to access that for vadadustat.

This is -- when you pair TDAPA with our relationship with Vifor, which again, I mean, we put in place to drive revenue quickly because of the relationship that they have with Fresenius Medical Care plus another 20% of small- and medium-sized dialysis providers. When you pair those two, we think that is an incredible opportunity for vadadustat to accelerate its launch revenue.

Gill -- Needham & Company, LLC -- Analyst

Just to make sure that my understanding is correct, so for the first two years, patients, using the rule out of CMS, would be getting drug at cost?

John Butler -- President and Chief Executive Officer

So the way it works is that dialysis providers will purchase vadadustat and then on a calculated ASP basis, the same way it's done for other kind of Part B-covered drugs, they would be reimbursed for that drug at an ASP plus zero level. Right now, normally ESAs today are in the bundle and so the -- whatever price they pay, that's incorporated into the bundle. They will still be getting that full bundle payment, but be able to get their ESA med, vadadustat in this case, outside of the bundle. Now, all of this, of course, there is details around exactly how this will work. There hasn't been a drug get incorporated into this outside of the parsabiv and cinacalcet. So, some of this detail still remains to be worked out by CMS, but if you think about it, the opportunity to be paid for your drug for anemia outside of the bundle creates a great economic incentive for the dialysis providers and obviously, a great opportunity for patients to benefit from the drug.

Gill -- Needham & Company, LLC -- Analyst

Yeah. That makes sense. Thank you so much for the clarifications.

Operator

Thank you. Our next question comes from David Lebowitz with Morgan Stanley. Your line is now open.

David Lebowitz -- Morgan Stanley -- Analyst

Thank you for taking my question. Would you be able to, I guess, run us through for the two Phase 3 trials what -- based on the number of patients in the studies, what -- how many events need to take place, I guess, in each arm, I guess, for vadadustat [Phonetic] to meet non-inferiority And is there -- on the MACE side of things, is superiority something even really being considered?

John Butler -- President and Chief Executive Officer

Thanks for the questions, David. So we've not disclosed the number of events that we're targeting and obviously, all of the modeling we've done is looking at hazard ratio of 1, I mean, a kind of pure non-inferiority measure and that's what we're looking for. That's what our expectations are is that we will see non-inferiority between the two treatments. And the great thing is when you look at what physicians are expecting, what they are looking for when it comes to choosing a new drug to treat anemia versus what they've been using for years, vadadustat is really be ideal product to compete there and differentiate from the ESAs and it's not about superiority on MACE, it's mostly about maintaining EPO in the physiologic range.

And that is, when you look at the EPO data that we've already published, you can see that that is what vadadustat accomplishes and physicians will not only versus the ESAs but versus other HIFs that are in development in the class as well. Then when you add that to the fact that we increase hemoglobins in a slow and steady pace versus fast and furious, what you see with other products and we minimize hemoglobin cycling and importantly excursions, these are all the areas that physicians want to see, these are all things we've demonstrated in prior studies already, including most recently in our Phase 3 data out of Japan. So, we think we're incredibly well positioned from a commercial perspective and non-inferiority is what we're expecting from the MACE trial.

David Lebowitz -- Morgan Stanley -- Analyst

Thank you for taking my question.

Operator

Thank you. Our next question comes from Ed Arce with H.C. Wainwright. Your line is now open.

Ed Arce -- H.C. Wainwright & Co. -- Analyst

Hi, everyone. Thanks for taking my questions and congrats on the recent PRV agreement. So just a couple of questions for me. Just sort of on a modeling basis here, given that Otsuka now for the better part of three quarters has been paying the higher 80% reimbursement and recorded as collaboration revenue, I want to see if you could remind us how that will ultimately impact your future profit-sharing as that has to be sort of backed into ultimately that number? And then I have a follow-up.

Jason Amello -- Senior Vice President and Chief Financial Officer

Sure. Ed, it's Jason. Yeah, so as R&D expenses start to decline, the collaboration revenue, obviously, as a percentage of that will start to decline. We're constantly evaluating the post-data and post-approval costs that we'll have and other studies that we'll be doing relative to vadadustat so that will constantly be modulating based on forecasts and so forth. But in the near term, as you see, the trial coming to an end and R&D going down, you'll see a downtick in the collaboration revenue as well.

John Butler -- President and Chief Executive Officer

So remember, the -- when you look at that difference between the 51% and the 80%, that is revenue they will be able to claw back through milestones and royalty in the future, but we also created in the contract that they can't take down any more than 50% of any payment in the year. So, it moderates the timing over which they'll get that payment back.

Ed Arce -- H.C. Wainwright & Co. -- Analyst

Okay, all right, great. And just another follow-up, you mentioned the $15 million milestone that you expect later this year upon approval in Japan. Are there any other external milestones or payments between now and sort of your -- at the end of your run rate that you might expect?

Jason Amello -- Senior Vice President and Chief Financial Officer

Yeah. So we have, obviously, through the partnerships with Otsuka for both U.S. and Europe, there are development and regulatory milestone that get paid upon approval. So that will depend on the timing of the data, the quality of the data and so forth. So those are sizable milestones that will happen upon approval. With Vifor, assuming that vadadustat is in the bundle through the Vifor arrangement just a [Phonetic] $25 million milestone with that as well.

Ed Arce -- H.C. Wainwright & Co. -- Analyst

Great. Thanks, again.

Operator

Thank you. Our next question comes from Bert Hazlett with BTIG. Your line is now open.

Robert Hazlett -- BTIG, LLC -- Analyst

Thanks. Yeah, just a point of clarification, which Ed just asked. The milestones are due on the timing and the quality of the data, could you just go into that quality part a little bit more? And I have a second one.

John Butler -- President and Chief Executive Officer

Yes. There is different criteria that results in different milestones. So, depends on what the label says. It depends on where we fall from the competitive position standpoint, things like that. So it's more around not just, OK, you have approval, but what type of approval is it and the milestones are different based on each of those types of outcomes.

Robert Hazlett -- BTIG, LLC -- Analyst

Can you go in a little bit more into the degree of difference of the milestone depending upon what they are?

John Butler -- President and Chief Executive Officer

No, we haven't disclosed that yet. We have to see the data before we will disclose anything like that.

Robert Hazlett -- BTIG, LLC -- Analyst

Okay. Well, just on the data then, in terms of -- you're preparing for similar results for your Company, you've got a sequential readout, INNO2VATE and then PRO2TECT. How should we be thinking -- we're going to get the top-line data with INNO2VATE, how should we be thinking and how should we investors be considering how INNO2VATE can inform PRO2TECT results? I know it's going to be complicated, I know there's a lot of moving parts, but just in general terms, if you could frame that for us that would be helpful.

John Butler -- President and Chief Executive Officer

Sure, Bert. Thanks for the question. Obviously, every data point informs the next, right? This is MACE data in a fragile population in INNO2VATE and so seeing positive results there, I think, are -- will be informative, certainly will for me as to what we'll see in PRO2TECT. Just like seeing competitive data, MACE data, I think is complicated as the analysis there was, I think, informs us and reduces our risk. Our Japanese Phase 3 data on the efficacy side informs the INNO2VATE data, and I think the INNO2VATE data will, I think, certainly inform PRO2TECT as well, but it's different patient population. So there -- and there always still has -- you still have risk until you see the data readout, but I certainly will be more encouraged about what PRO2TECT can show when I see positive INNO2VATE data.

Robert Hazlett -- BTIG, LLC -- Analyst

Okay, thank you. Just a couple of quick ones. I know that you have said this before, how long would you expect in the case of positive data, how long would it take you to file the NDA in the U.S. and the EU? And then just regard with the ATM, I think you said $56.7 million this quarter and could you give us the shares outstanding again that are currently out? Thanks.

Jason Amello -- Senior Vice President and Chief Financial Officer

Yeah, so on the ATM, there was $17 million raised in Q4 and $57 million this quarter in Q1 and the total outstanding shares currently inclusive of all of that is 121.7 million. That was end of the year, so if you add $57 million to that -- of the 10.7 million shares that was raised in total, I could tell you how much is in '19.

John Butler -- President and Chief Executive Officer

So, Jason is getting that updated number for you, Bert. I'm sorry, what's the second question again?

Robert Hazlett -- BTIG, LLC -- Analyst

Just the timing of the NDA in the U.S. and the EU.

John Butler -- President and Chief Executive Officer

Yeah. Well, we are going to move as quickly as possible, and I think that's the safest way to say it. We will have INNO2VATE, we'll be working on that and then it's about when we'll get PRO2TECT and how quickly we can pull all of that together into a filing, I mean, if we are going to be moving extremely quickly. My expectation -- we're looking to file them as close to simultaneously as possible. My expectation is that the NDA will come first, but we're -- obviously the tremendous amount of overlap between the packages. So, we're -- we'll be working with Otsuka on that, and we have a very robust plan, but it is -- we won't let any grass grow under our feet.

Robert Hazlett -- BTIG, LLC -- Analyst

Okay. We'll look forward to the data. Thank you very much for taking the question.

Jason Amello -- Senior Vice President and Chief Financial Officer

Bert, just to give you the share count, so, if you add just extra number of shares that were sold in Q1, that will bring the new share count to 129.7 million.

Robert Hazlett -- BTIG, LLC -- Analyst

Okay, thank you.

Jason Amello -- Senior Vice President and Chief Financial Officer

Okay.

John Butler -- President and Chief Executive Officer

Thanks, Jason.

Operator

Thank you. [Operator Instructions] Our next question comes from Kennen MacKay with RBC Capital Markets. Your line is now open.

Kennen Mackay -- RBC Capital Markets -- Analyst

Hi, thanks for taking the question. I've had two questions. One on statistical analysis and is the -- I was just hoping if you could describe how a superiority analysis would be run. So, is the non-inferiority and then superiority analysis hierarchical even if we're not sort of expecting the superiority? And can you just remind us of the definition of non-inferiority sort of how the analysis could be conducted?

John Butler -- President and Chief Executive Officer

Yeah. So, answering from the perspective of not being a statistician, but the superiority analysis is the same analysis as a non-inferiority analysis. Important -- again, I wanted to make sure that the main point that everyone takes away is that this is a non-inferiority study, that's the outcome we're expecting and you're superior, simply if you -- the lower bound of your 95% [Phonetic] confidence interval doesn't cross one. And again, that's not our expectation for the study, but that's kind of the definition of it. I don't believe it's considered a hierarchical analysis because it's the same analysis.

Kennen Mackay -- RBC Capital Markets -- Analyst

Got you. Okay. Thanks, John. And then maybe on hemoglobin and differentiation versus the MACE endpoint there. So we know hemoglobin goals and protocols, those are set, but can you remind us the protocol for vadadustat hemoglobin levels? Is it possible to even get superiority on hemoglobin, given that you're treating to a set goal there?

John Butler -- President and Chief Executive Officer

Yeah, I would be very, very surprised to see that and I think when you've seen that with a competitor, most physicians kind of discount calling it superiority because you know with an ESA, if I want a higher hemoglobin, I get more, right? So that's not at all the goal. What we've done with both vadadustat and Aranesp, in our studies, physicians are treating to the same range. In the U.S., they're treating to maintain the hemoglobin within the range of 10 to 11 and outside of the U.S. maintain it within a range of 10 to 12 for both products.

So, you -- again, when you look at what differentiates vadadustat, it's this idea that you have the slow steady increase in hemoglobin and you avoid cycling and excursions. If you think about an analysis for -- your primary endpoint is the average hemoglobin between week 24 and 36 and you don't get penalized for having hemoglobin that's too high. That's an excursion beyond where you expect it to be. So, I think with all of that, just expecting to see non-inferiority for hemoglobin is -- will be perfect, it will be just what we want to show in the study just like we showed it in the Japanese study or our partner Mitsubishi did.

Kennen Mackay -- RBC Capital Markets -- Analyst

That's very helpful. Thank you very much.

John Butler -- President and Chief Executive Officer

Thanks, Kennen.

Operator

Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to John Butler, CEO, for closing remarks.

John Butler -- President and Chief Executive Officer

Thanks very much, Joel, and thanks everyone for joining us today. I hope you'll agree that we have an incredibly exciting time coming up in the very near term and we look forward to keeping you updated on the progress and speaking to you next quarter about the results of our INNO2VATE Phase 3 program. Thanks very much. Have a great day.

Operator

[Operator Closing Remarks]

Duration: 44 minutes

Call participants:

Kristen K. Sheppard -- Vice President, Investor Relations

John Butler -- President and Chief Executive Officer

Jason Amello -- Senior Vice President and Chief Financial Officer

Chris Raymond -- Piper Sandler -- Analyst

Eric Joseph -- J.P. Morgan -- Analyst

Difei Yang -- Mizuho -- Analyst

Gill -- Needham & Company, LLC -- Analyst

David Lebowitz -- Morgan Stanley -- Analyst

Ed Arce -- H.C. Wainwright & Co. -- Analyst

Robert Hazlett -- BTIG, LLC -- Analyst

Kennen Mackay -- RBC Capital Markets -- Analyst

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