H.C. Wainwright Reiterates Neutral Rating, $2 PT on Akebia Therapeutics (AKBA)

H.C. Wainwright analyst Ed Arce reiterated a Neutral rating and $2.00 price target on Akebia Therapeutics (NASDAQ: AKBA), as the company announced a planned workforce reduction to conserve cash.

The analyst comments: "Yesterday in a Form 8-K filing, Akebia announced a workforce reduction by approximately 42% across all functional areas, primarily to reduce operating costs following the receipt of the complete response letter (CRL) for vadadustat's NDA for the treatment of anemia due to chronic kidney disease (CKD) on March 29, 2022. This workforce reduction is expected to be substantially completed by the end of 2Q22, with a one-time restructuring charge of approximately $12M in 2Q22. Akebia expects the workforce reduction to reduce its OpEx net cash use by approximately $60–65M through the end of 2023.

We employ a rNPV model to value AKBA shares. Our price target is the sum of three components: (1) $0.57 per share for royalties on net sales of vadadustat in the EU (Jan. 2023 launch; 60% PoS; $118M peak revenue in 2030); (2) $1.30 per share for net sales of Auryxia for hyperphosphatemia alone (CMS refuses to cover the IDA indication) with peak sales of $192M in 2024, before the product becomes widely genericized on March 20, 2025; and (3) $0.13 per share for potential Otsuka commercial milestone payments of up to $525M in the EU, plus a $17M approval milestone. Risks to our investment thesis and target price include: (1) failure to secure another regulatory approval pathway for vadadustat in dialysis; (2) additional data requirements from the FDA or other significant timeline delays; (3) a smaller than anticipated commercial opportunity due to market size, competition, and/or pricing; and (4) intellectual property opposition."

For an analyst ratings summary and ratings history on Akebia Therapeutics click here. For more ratings news on Akebia Therapeutics click here.

Shares of Akebia Therapeutics closed at $0.54 yesterday.

By Vlad Schepkov

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