Shares of Akebia Therapeutics (NASDAQ:AKBA) 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 (NYSE:FMS) for the experimental anemia drug vadadustat. Vadadustat is presently in late-stage development as a treatment for anemia associated with chronic kidney disease (CKD).
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.
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.