What happened

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). 


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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.

George Budwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.