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Why Akebia Therapeutics Stock Is Skyrocketing Today

By George Budwell - May 16, 2017 at 12:02PM

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Akebia Therapeutics gets a sizable equity investment from Vifor Pharma as part of a supply agreement for the experimental anemia drug vadadustat.

What happened

Shares of Akebia Therapeutics (AKBA -7.15%) have jumped today, rising 17.8% as of 11:49 a.m. EDT, following the announcement that Akebia and Vifor Pharma Group have agreed to an exclusive license agreement with Fresenius Medical Care (FMS -0.68%) for the experimental anemia drug vadadustat. Vadadustat is presently in late-stage development as a treatment for anemia associated with chronic kidney disease (CKD). 


Image source: Getty Images.

So what

The big-ticket item for Akebia is that Vifor Pharma agreed to make a $50 million equity investment in Akebia at $14 per share as part of this deal. In other words, Vifor just became one of Akebia's largest stakeholders, which should be a stabilizing influence on this small-cap drugmaker's share price moving forward. 

Now what

According to the press release, Akebia stands to make an additional $20 million upon vadadustat's approval in the United States and inclusion in a bundled reimbursement model. More importantly, though, this licensing agreement largely assures that vadadustat will get off to a hot start once it enters the market. Fresenius, after all, is the largest kidney dialysis provider in the U.S., with a 40% market share -- implying that the deck will be stacked in the drug's favor right out of the gate. 

Akebia appears to be building a solid foundation for growth through vadadustat's robust late-stage development program. So, even though it does have to share a portion of the drug's profits and milestone payments with its U.S. collaborator Otsuka Pharmaceutical Co. Ltd, this up-and-coming drugmaker may be worth checking out.

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Stocks Mentioned

Akebia Therapeutics, Inc. Stock Quote
Akebia Therapeutics, Inc.
$0.35 (-7.15%) $0.03
Fresenius Medical Care AG & Co. KGaA Stock Quote
Fresenius Medical Care AG & Co. KGaA
$24.94 (-0.68%) $0.17

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