2021 Q4 Form 10-Q Financial Statement

#000162828021021760 Filed on November 04, 2021

View on sec.gov

Income Statement

Concept 2021 Q4 2021 Q3 2020 Q3
Revenue $59.61M $48.76M $59.99M
YoY Change 5.12% -18.72% -34.78%
Cost Of Revenue $42.37M $15.94M $30.35M
YoY Change -33.0% -47.46% -20.69%
Gross Profit $17.24M $32.81M $29.64M
YoY Change -5845.33% 10.69% -44.81%
Gross Profit Margin 28.92% 67.3% 49.41%
Selling, General & Admin $44.83M $46.36M $40.17M
YoY Change 11.23% 15.4% 17.53%
% of Gross Profit 260.07% 141.28% 135.52%
Research & Development $29.56M $40.47M $46.86M
YoY Change -21.39% -13.63% -37.11%
% of Gross Profit 171.48% 123.34% 158.07%
Depreciation & Amortization $9.453M $9.484M $500.0K
YoY Change 22.29% 1796.8% -16.67%
% of Gross Profit 54.84% 28.9% 1.69%
Operating Expenses $83.39M $87.70M $87.74M
YoY Change 5.73% -0.05% -19.96%
Operating Profit -$66.16M -$54.89M -$58.10M
YoY Change -22.54% -5.52% 3.92%
Interest Expense -$5.083M -$5.085M -$2.274M
YoY Change 121.0% 123.61% -1097.37%
% of Operating Profit
Other Income/Expense, Net $560.0K $427.0K -$1.864M
YoY Change -135.07% -122.91% -4434.88%
Pretax Income -$70.68M -$59.54M -$59.96M
YoY Change -18.76% -0.69% 7.33%
Income Tax $0.00 $0.00
% Of Pretax Income
Net Earnings -$70.68M -$59.54M -$59.96M
YoY Change -18.76% -0.69% 9.85%
Net Earnings / Revenue -118.58% -122.13% -99.95%
Basic Earnings Per Share -$0.34 -$0.42
Diluted Earnings Per Share -$404.7K -$0.34 -$0.42
COMMON SHARES
Basic Shares Outstanding 175.0M shares 173.8M shares 143.3M shares
Diluted Shares Outstanding 173.8M shares 143.3M shares

Balance Sheet

Concept 2021 Q4 2021 Q3 2020 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $149.8M $207.2M $269.3M
YoY Change -44.25% -23.06% 84.94%
Cash & Equivalents $149.8M $207.2M $169.3M
Short-Term Investments $0.00 $0.00 $100.0M
Other Short-Term Assets $33.14M $39.50M $9.000M
YoY Change 122.42% 338.91% 15.38%
Inventory $38.20M $33.69M $88.24M
Prepaid Expenses
Receivables $50.88M $49.69M $24.47M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $272.0M $330.1M $391.0M
YoY Change -26.77% -15.58% 30.77%
LONG-TERM ASSETS
Property, Plant & Equipment $6.754M $7.196M $8.821M
YoY Change -21.67% -18.42% -31.08%
Goodwill $55.10M $55.10M $55.10M
YoY Change 0.0% 0.0% 0.09%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $49.75M $69.60M $44.17M
YoY Change 31.0% 57.58% -54.89%
Total Long-Term Assets $253.5M $272.2M $285.1M
YoY Change -7.03% -4.55% -42.54%
TOTAL ASSETS
Total Short-Term Assets $272.0M $330.1M $391.0M
Total Long-Term Assets $253.5M $272.2M $285.1M
Total Assets $525.6M $602.3M $676.1M
YoY Change -18.41% -10.93% -14.97%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $33.59M $28.81M $40.40M
YoY Change -18.69% -28.7% -37.23%
Accrued Expenses $104.5M $144.7M $123.0M
YoY Change -20.03% 17.63% -2.86%
Deferred Revenue $20.91M $15.69M $18.03M
YoY Change 37.41% -12.99% -43.89%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $97.54M
YoY Change
Total Short-Term Liabilities $256.5M $189.2M $181.5M
YoY Change 37.06% 4.27% -18.68%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $97.23M $76.61M
YoY Change -100.0% 26.92%
Other Long-Term Liabilities $82.53M $77.39M $40.97M
YoY Change 36.16% 88.9% 36.3%
Total Long-Term Liabilities $82.53M $174.6M $117.6M
YoY Change -47.43% 48.52% 291.15%
TOTAL LIABILITIES
Total Short-Term Liabilities $256.5M $189.2M $181.5M
Total Long-Term Liabilities $82.53M $174.6M $117.6M
Total Liabilities $449.1M $465.1M $358.2M
YoY Change 13.26% 29.86% 9.32%
SHAREHOLDERS EQUITY
Retained Earnings -$1.460B -$1.390B -$1.091B
YoY Change 24.02% 27.43% 55.88%
Common Stock $1.537B $1.527B $1.408B
YoY Change 7.84% 8.4%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $76.46M $137.2M $318.0M
YoY Change
Total Liabilities & Shareholders Equity $525.6M $602.3M $676.1M
YoY Change -18.41% -10.93% -14.97%

Cashflow Statement

Concept 2021 Q4 2021 Q3 2020 Q3
OPERATING ACTIVITIES
Net Income -$70.68M -$59.54M -$59.96M
YoY Change -18.76% -0.69% 9.85%
Depreciation, Depletion And Amortization $9.453M $9.484M $500.0K
YoY Change 22.29% 1796.8% -16.67%
Cash From Operating Activities -$62.81M -$56.27M -$27.24M
YoY Change 104.05% 106.57% -347.86%
INVESTING ACTIVITIES
Capital Expenditures $0.00 $0.00 $50.00K
YoY Change -100.0% -100.0% -101.98%
Acquisitions
YoY Change
Other Investing Activities $0.00 $0.00 -$49.98M
YoY Change -100.0% -100.0% -285.66%
Cash From Investing Activities $0.00 $0.00 -$49.94M
YoY Change -100.0% -100.0% -304.76%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 5.403M 16.48M 1.050M
YoY Change -82.29% 1469.71% 452.63%
NET CHANGE
Cash From Operating Activities -62.81M -56.27M -27.24M
Cash From Investing Activities 0.000 0.000 -49.94M
Cash From Financing Activities 5.403M 16.48M 1.050M
Net Change In Cash -57.41M -39.79M -76.13M
YoY Change -196.61% -47.74% -314.03%
FREE CASH FLOW
Cash From Operating Activities -$62.81M -$56.27M -$27.24M
Capital Expenditures $0.00 $0.00 $50.00K
Free Cash Flow -$62.81M -$56.27M -$27.29M
YoY Change 106.2% 106.19% -301.85%

Facts In Submission

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Nature of Organization and Operations<div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%">Akebia Therapeutics, Inc., referred to as Akebia or the Company, was incorporated in the State of Delaware in 2007. Akebia is a biopharmaceutical company with the purpose of bettering the lives of people impacted by kidney disease. Akebia’s lead investigational product candidate, vadadustat, is an oral therapy in development for the treatment of anemia due to chronic kidney disease, or CKD. Vadadustat is an oral hypoxia-inducible factor prolyl hydroxylase inhibitor, or HIF-PHI, designed to mimic the physiologic effect of altitude on oxygen availability. At higher altitudes, the body responds to lower oxygen availability with stabilization of hypoxia-inducible factor, or HIF, which stimulates erythropoietin, or EPO, production, and can lead to red blood cell, or RBC, production and improved oxygen delivery to tissues. Vadadustat is approved and marketed in Japan as a treatment for anemia due to CKD in both dialysis-dependent and non-dialysis dependent adult patients under the trade name Vafseo</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:115%;position:relative;top:-3.5pt;vertical-align:baseline">TM</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%">. The Company submitted a New Drug Application, or NDA, to the U.S. Food and Drug Administration, or FDA, for vadadustat in March of 2021 for the treatment of anemia due to CKD in adult patients with CKD on dialysis, or DD-CKD, and adult patients with CKD not on dialysis, or NDD-CKD. The Company's NDA submission was accepted for filing by the FDA in May 2021 and </span><span style="background-color:#ffffff;color:#373737;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%">at the time of filing the NDA, the FDA indicated that they were not currently planning to hold an Advisory Committee meeting to discuss the application</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%"> for vadadustat. The FDA also assigned the application standard review and a Prescription Drug User Fee Act (PDUFA) target action date of March 29, 2022. The Company’s collaboration partner, Otsuka Pharmaceutical Co. Ltd., submitted a Marketing Authorization Application, or MAA, for vadadustat for the treatment of anemia due to CKD in adult patients to the European Medicines Agency, or EMA, in October 2021</span><span style="color:#0000ff;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%">.</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%"> In addition, the Company has a commercial product, Auryxia</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:115%;position:relative;top:-3.5pt;vertical-align:baseline">®</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:115%"> (ferric citrate), which is currently approved by the FDA and marketed for two indications in the United States: the control of serum phosphorus levels in DD-CKD adult patients and the treatment of iron deficiency anemia, or IDA, in NDD-CKD adult patients. Ferric citrate is also approved and marketed in Japan as an oral treatment for IDA in adult patients for the improvement of hyperphosphatemia in adult patients with DD-CKD and NDD-CKD under the trade name Riona (ferric citrate hydrate).</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">Since inception, the Company has devoted most of its resources to research and development, including its preclinical and clinical development activities, and providing general and administrative support for these operations. The Company began recording revenue from the U.S. sales of Auryxia and revenue from sublicensing rights to Auryxia in Japan from the Company’s Japanese partners, Japan Tobacco, Inc. and its subsidiary Torii Pharmaceutical Co., Ltd., collectively JT and Torii, on December 12, 2018 following the consummation of a merger with Keryx Biopharmaceuticals, Inc., or Keryx, or the Merger. Additionally, following regulatory approval of vadadustat in Japan, the Company began recognizing royalty revenues from Mitsubishi Tanabe Pharma Corporation, or MTPC, from the sale of Vafseo in August 2020. In February 2021, the Company entered into a royalty interest acquisition agreement with HealthCare Royalty Partners IV, L.P., or the Royalty Agreement, whereby the Company sold its right to receive royalties and sales milestones under its Collaboration Agreement with MTPC, or the MTPC Agreement, subject to certain caps and other terms and conditions (see Note 5 for additional information). The Company has not generated a profit to date and may never generate profits from product sales. Vadadustat and the Company’s other potential product candidates are subject to long development cycles, and the Company may be unsuccessful in its efforts to develop, obtain marketing approval for or market vadadustat and its other potential product candidates. If the Company does not successfully commercialize Auryxia, vadadustat or any other potential product candidate, if approved, it may be unable to achieve profitability.</span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:12pt;font-weight:400;line-height:120%"> </span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">The Company’s management completed its going concern assessment in accordance with Accounting Standards Codification, or ASC, 205-40, </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:112%">Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">, or ASC 205-40. The Company believes that its cash resources will be sufficient to allow the Company to fund its current operating plan through at least the next twelve months from the filing of this Quarterly Report on Form 10-Q. If the Company receives regulatory approval of vadadustat in the U.S., the Company expects to incur significant incremental costs to its current operating plan to commercialize vadadustat, including costs of marketing, manufacturing and distribution. The potential timely regulatory approval of vadadustat and the receipt of associated regulatory milestones is an important source of funding of the Company's cash runway. However, the Company will require additional funding to fund its operating plan beyond the next twelve months. There are numerous risks and uncertainties associated with research, development and commercialization activities, and actual results could vary materially as a result of a number of factors, many of which are outside of the Company's control. There can be no assurance, however, that the current operating plan will be achieved in the time frame anticipated by the Company, or that its cash resources will fund the Company’s operating plan for the period anticipated by the Company or that additional funding will be available on terms acceptable to the Company, or at all. The Company will require additional capital to pursue development and commercial activities related to Auryxia and vadadustat or any additional products and product candidates, including those that may be in-licensed or acquired. The Company expects to finance future cash needs through product </span></div>revenue, public or private equity or debt transactions, payments from its collaborators, strategic transactions, or a combination of these approaches. However, additional financing may not be available to the Company on acceptable terms, or at all. If the Company is unable to raise capital in sufficient amounts when needed or on attractive terms, it may not be able to pursue development and commercial activities related to Auryxia and vadadustat or any additional products and product candidates, including those that may be in-licensed or acquired.
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<div style="margin-bottom:6pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Use of Estimates</span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: prepaid and accrued research and development expense, operating lease assets and liabilities, derivative liabilities, other non-current liabilities, including the excess purchase commitment liability, stock-based compensation expense, product and collaboration revenues including various rebates and reserves related to product sales, non-cash interest expense on the liability related to sale of future royalties, inventories, income taxes, intangible assets and goodwill. The Company has made estimates of the impact of COVID-19 within the unaudited condensed consolidated financial statements and there may be changes to those estimates in future periods including changes to sales, payor mix, reserves and allowances, intangible assets and goodwill. </span></div>Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances.
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