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Item 1.01
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Entry into a Material Definitive Agreement
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On April 25, 2017, Akebia Therapeutics, Inc.
(“Akebia”) entered into a Collaboration and License Agreement (the “Agreement”) with Otsuka Pharmaceutical Co. Ltd. (“Otsuka”), pursuant to which Akebia granted Otsuka an exclusive license for the development and
commercialization of vadadustat, Akebia’s oral hypoxia-inducible factor (HIF) stabilizer currently in development for the treatment of anemia related to chronic kidney disease. The territory covered by the Agreement includes the European Union,
Russia, China, Australia, Canada, the Middle East and certain other countries (the “Territory”), but excludes Latin America and other previously licensed countries. Under the Agreement, Otsuka will be responsible for certain development
activities and commercializing vadadustat in the Territory, while Akebia will continue to lead the ongoing global Phase 3 development program. Otsuka will fund a significant percentage of the costs of such global development program regardless of
the total actual costs ultimately incurred. This Agreement follows a previously announced collaboration between Akebia and Otsuka dated December 18, 2016 (the “Prior Agreement”) in which the parties equally share the costs of
developing and commercializing vadadustat, as well as potential future sales of vadadustat, in the United States.
Financial Terms
Under the terms of the Agreement, Akebia expects Otsuka to pay Akebia at least $208 million, comprised of $73 million upon execution of the Agreement and at
least $135 million of development funding. In addition, Akebia is eligible to receive from Otsuka up to an aggregate of $657 million in development and commercial milestones. Otsuka also agreed to make tiered, escalating royalty payments ranging
from low double digits up to thirty percent of net sales of vadadustat within the Territory. In limited circumstances, upper tier royalties may be subject to reduction if the supply price charged by Akebia to Otsuka for vadadustat exceeds certain
agreed upon thresholds. Otsuka may elect to conduct additional studies of vadadustat in the European Union, subject to Akebia’s right to delay such studies based on its objectives outside the Territory. Otsuka will pay a percentage of the costs
of any such studies, and Akebia will pay its portion of the costs in the form of a credit against future amounts due to Akebia under the Agreement.
Governance
The collaboration will be governed by joint
committees and operational teams, leveraging the governance structure established in the Prior Agreement. Akebia will retain final decision making authority with respect to the manufacture and supply of vadadustat in the Territory, the global Phase
3 development program, and the global brand strategy for vadadustat. Otsuka will have final decision making authority with respect to certain Territory-specific development activities and commercialization matters in the Territory.
Term and Termination
Unless earlier terminated, the
Agreement will expire upon the expiration of the royalty term in the last country in the Territory. The royalty term ends upon the later of the expiration of the patents licensed under the Agreement, the expiration of data or regulatory exclusivity
for vadadustat, or 10 years from first commercial sale of vadadustat. Otsuka may terminate the Agreement for a certain sub-territory or in its entirety upon 12 months’ prior written notice after the release of the first topline data in the
vadadustat global Phase 3 program. Either party may, subject to a cure period, terminate the Agreement in the event of the other party’s uncured material breach.
The foregoing description of the Agreement does not purport to be complete, and is qualified in its entirety by reference to the Agreement, a copy of which we
expect to file with our Quarterly Report on Form 10-Q for the quarter ending June 30, 2017. A copy of the Prior Agreement was filed with our Annual Report on Form 10-K for the fiscal year ending December 31, 2016 and is incorporated herein
by reference.
Forward-Looking Statements
This current report includes forward-looking statements. Such forward-looking statements include those about Akebia’s collaboration with Otsuka, including
statements regarding the anticipated contributions from Otsuka pursuant to the Agreement, Otsuka’s responsibilities pursuant to the Agreement and expectations for Otsuka’s funding obligations pursuant to the Agreement, and the potential
commercialization of vadadustat if approved by regulatory authorities. The words “anticipate,” “appear,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,”
“predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain these identifying words. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in
such statement, including the risk that Akebia will not achieve development or commercial milestones with vadadustat; the ability of Akebia or its collaborators to successfully complete the clinical development of vadadustat; that the funding
required to develop Akebia’s product candidates and operate the company and the actual expenses associated therewith may be greater than currently anticipated by management; the actual costs incurred in the global Phase 3 program for vadadustat
and the availability of financing to cover such costs; the timing of any additional studies initiated by Akebia or its collaborators for vadadustat; the timing and content of decisions made by regulatory authorities; potential delays in
Akebia’s clinical programs as a result of capital constraints; the rate of enrollment in clinical studies of vadadustat; the actual time it takes to initiate and complete clinical studies; the success of competitors in developing product
candidates for diseases for which Akebia is currently developing its product candidates; and Akebia’s ability to obtain, maintain and enforce patent and other intellectual property protection for vadadustat around the world. Other risks and
uncertainties include those identified under the heading “Risk Factors” in Akebia’s Annual Report on Form 10-K for the year ended December 31, 2016, and other filings that Akebia may make with the Securities and Exchange
Commission in the future. Akebia does not undertake, and specifically disclaims, any obligation to update any forward-looking statements contained in this current report.