Akebia, Trading M&A For an IPO, Follows Fast in Anemia Drug Race
Akebia Therapeutics and its investors had hit a crossroads familiar to many startup biotechs last year. Its lead drug, AKB-6548, a pill for the anemia people get when their kidneys are failing, had just produced good enough data to move it into a Phase 2b study. If that went well too, the company would need to do a pricey late-stage trial if the drug were to have a chance to make it to market. So more money was needed—a lot of it.
Meanwhile, rival drugs, some further along in development, were advancing. Akebia (NASDAQ: AKBA) faced a tough choice. Should it sell itself to the highest bidder (assuming it could find one), or go it alone and build a company, the long road ahead and the competition be damned?
“There was clearly significant interest [from buyers], but I think sometimes when you get significant interest you realize, wait a minute, if I put a few more dollars in here myself, and finance it through the next study, the step up is going to be a lot greater,” says Akebia CEO John Butler, who joined the company after the decision was made.
Akebia opted to go for it alone. The company raised a private round, brought in Butler, the ex-head of Genzyme’s renal business, to lead the company, and moved its headquarters from Cincinnati to the biotech hub of Cambridge, MA. Then it sprinted towards an IPO in late March to grab even more cash, in the nick of time. Akebia was one of the last big biotech IPOs in the recent boom, raising some $30 million more than it first sought, just before a plunge in biotech stocks.
“We just moved at 100 miles an hour to get this thing done,” Butler says “This is why from the day I started it was let’s just move as quickly as we can because windows are open, but windows close, and you don’t know when they’re gonna close.”
Still, now comes the hard part for Akebia. The mostly-virtual, 27-employee company, is in a heated race with three rival groups—San Diego, CA-based FibroGen (teamed with giants AstraZeneca and Astellas Pharma), big British drugmaker GlaxoSmithKline, and Bayer—that are also trying to bring an anemia pill to the market. The huge prize they’re all trying to grab is replacing the injectable blockbuster biologic anemia drugs like Amgen’s epoetin alfa (Epogen) and darbapoeitin alfa (Aranesp), whose use has been dialed back a bit over the past several years due to significant safety concerns, but still generate billions of dollars.
What’s more, all three groups are using variations of the same approach—using a drug to try to trick the body into thinking it’s at high altitude. That stimulates the body to make more red blood cells, the natural corrective response to low-oxygen conditions. And Akebia is trailing FibroGen, which already started a Phase 3 trial for its prospect, FG-4592 (Both GSK’s and Bayer’s prospects are just a bit behind Akebia), giving it a lead in the race to make it to the market first. So Akebia must not only show that AKB-6548 works as well, and is safer, than the old biologic drugs; it also may have to stand out in among the new drugs as well. But that’s what Akebia signed up for when it decided not to sell—a high-stakes race to the finish line.
Akebia started up in 2007, a spinout of Proctor & Gamble founded by P&G medicinal chemist Joseph Gardner and Bob Shalwitz, a former Reliant Pharmaceuticals and Abbott Laboratories executive. The company was initially based on two disparate scientific ideas. One was to look into the biology of hypoxia inducible factor, or HIF—a system of checks and balances that makes sure cells have the right amount of oxygen to survive. The second was to focus on activators of Tie-2 receptors, which are implicated in the formation of new blood vessels.
Akebia’s HIF efforts developed faster, and for good reason: an oral anemia drug is a big deal. When people with chronic kidney disease start to show signs of anemia, they’re first given iron to raise their hemoglobin levels. That eventually stops working, however, because … Next Page »