2022 Q3 Form 10-Q Financial Statement

#000162828022021096 Filed on August 04, 2022

View on sec.gov

Income Statement

Concept 2022 Q3 2022 Q2 2022 Q1
Revenue $48.96M $126.8M $61.70M
YoY Change 0.43% 139.56% 17.96%
Cost Of Revenue $37.95M $18.60M $31.34M
YoY Change 138.0% -64.57% -9.43%
Gross Profit $11.02M $108.2M $30.36M
YoY Change -66.42% 25775.36% 71.52%
Gross Profit Margin 22.5% 85.33% 49.2%
Selling, General & Admin $30.92M $32.81M $44.33M
YoY Change -33.3% -21.23% 7.26%
% of Gross Profit 280.64% 30.33% 146.03%
Research & Development $27.35M $26.03M $43.83M
YoY Change -32.42% -30.06% 7.93%
% of Gross Profit 248.25% 24.06% 144.4%
Depreciation & Amortization $9.424M $9.426M $9.428M
YoY Change -0.63% -0.91% -0.97%
% of Gross Profit 85.54% 8.71% 31.06%
Operating Expenses $59.19M $74.26M $88.85M
YoY Change -32.51% -6.9% 7.52%
Operating Profit -$48.17M $33.90M -$58.49M
YoY Change -12.23% -142.73% -9.92%
Interest Expense -$3.952M -$5.037M -$5.062M
YoY Change -22.28% 1.51% 5.35%
% of Operating Profit -14.86%
Other Income/Expense, Net $1.167M $411.0K $1.134M
YoY Change 173.3% -67.51% 604.35%
Pretax Income -$51.87M $29.28M -$62.42M
YoY Change -12.9% -135.26% -10.31%
Income Tax
% Of Pretax Income
Net Earnings -$51.87M $29.28M -$62.42M
YoY Change -12.9% -135.26% -10.29%
Net Earnings / Revenue -105.92% 23.1% -101.17%
Basic Earnings Per Share -$0.28 $0.16 -$0.35
Diluted Earnings Per Share -$0.28 $0.15 -$0.35
COMMON SHARES
Basic Shares Outstanding 183.8M shares 183.6M shares 179.6M shares
Diluted Shares Outstanding 183.9M shares 190.4M shares 179.6M shares

Balance Sheet

Concept 2022 Q3 2022 Q2 2022 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $144.8M $143.9M $174.6M
YoY Change -30.14% -41.74% -36.01%
Cash & Equivalents $144.8M $143.9M $174.6M
Short-Term Investments
Other Short-Term Assets $29.62M $42.13M $24.12M
YoY Change -25.02% 276.79% 97.71%
Inventory $40.04M $36.27M $39.42M
Prepaid Expenses
Receivables $23.09M $81.87M $64.58M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $237.5M $304.2M $302.7M
YoY Change -28.04% -8.13% -17.08%
LONG-TERM ASSETS
Property, Plant & Equipment $5.622M $6.035M $6.451M
YoY Change -21.87% -21.32% -21.02%
Goodwill $55.10M $55.10M $55.10M
YoY Change 0.0% 0.0% 0.0%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $26.28M $34.95M $39.42M
YoY Change -62.25% -48.2% -0.55%
Total Long-Term Assets $198.4M $217.6M $232.7M
YoY Change -27.11% -22.49% -11.76%
TOTAL ASSETS
Total Short-Term Assets $237.5M $304.2M $302.7M
Total Long-Term Assets $198.4M $217.6M $232.7M
Total Assets $435.9M $521.8M $535.4M
YoY Change -27.62% -14.72% -14.85%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $19.71M $24.94M $19.47M
YoY Change -31.59% -40.59% -36.25%
Accrued Expenses $87.36M $91.28M $109.7M
YoY Change -39.63% -18.31% -11.49%
Deferred Revenue $1.265M $5.047M $10.44M
YoY Change -91.94% -57.48% -42.8%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $65.95M $98.16M $97.85M
YoY Change
Total Short-Term Liabilities $188.0M $233.7M $253.9M
YoY Change -0.66% 41.12% 47.04%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0% -100.0% -100.0%
Other Long-Term Liabilities $74.31M $66.89M $77.74M
YoY Change -3.98% -21.64% 45.0%
Total Long-Term Liabilities $74.31M $66.89M $77.74M
YoY Change -57.44% -63.3% -48.25%
TOTAL LIABILITIES
Total Short-Term Liabilities $188.0M $233.7M $253.9M
Total Long-Term Liabilities $74.31M $66.89M $77.74M
Total Liabilities $422.0M $459.5M $509.2M
YoY Change -9.26% 5.09% 22.76%
SHAREHOLDERS EQUITY
Retained Earnings -$1.545B -$1.493B -$1.523B
YoY Change 11.2% 12.28% 22.11%
Common Stock $1.559B $1.556B $1.549B
YoY Change 2.12% 3.39% 6.02%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $13.85M $62.30M $26.12M
YoY Change
Total Liabilities & Shareholders Equity $435.9M $521.8M $535.4M
YoY Change -27.62% -14.72% -14.85%

Cashflow Statement

Concept 2022 Q3 2022 Q2 2022 Q1
OPERATING ACTIVITIES
Net Income -$51.87M $29.28M -$62.42M
YoY Change -12.9% -135.26% -10.29%
Depreciation, Depletion And Amortization $9.424M $9.426M $9.428M
YoY Change -0.63% -0.91% -0.97%
Cash From Operating Activities $33.81M -$30.66M -$21.62M
YoY Change -160.08% -51.44% -69.44%
INVESTING ACTIVITIES
Capital Expenditures $0.00 $0.00 $114.0K
YoY Change -100.0% 93.22%
Acquisitions
YoY Change
Other Investing Activities $0.00 $0.00 $0.00
YoY Change -100.0% -100.0%
Cash From Investing Activities $0.00 $0.00 -$114.0K
YoY Change -100.0% -100.57%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -32.94M -9.000K $47.55M
YoY Change -299.84% -100.02% -36.16%
NET CHANGE
Cash From Operating Activities 33.81M -30.66M -$21.62M
Cash From Investing Activities 0.000 0.000 -$114.0K
Cash From Financing Activities -32.94M -9.000K $47.55M
Net Change In Cash 868.0K -30.67M $25.81M
YoY Change -102.18% 431.53% 9.04%
FREE CASH FLOW
Cash From Operating Activities $33.81M -$30.66M -$21.62M
Capital Expenditures $0.00 $0.00 $114.0K
Free Cash Flow $33.81M -$30.66M -$21.73M
YoY Change -160.08% -51.44% -69.3%

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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:112%">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. The Company has one commercial product, Auryxia</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:112%;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:112%"> (ferric citrate), which is approved by the U.S. Food and Drug Administration, or FDA, and marketed for two indications in the United States: the control of serum phosphorus levels in adult patients with chronic kidney disease, or CKD, on dialysis, or DD-CKD, and the treatment of iron deficiency anemia, or IDA, in adult patients with CKD not on dialysis, or NDD-CKD. Ferric citrate is also approved and marketed in Japan as an oral treatment for IDA in adult patients for the improvement of hyperphosphatemia in such 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:112%">Vadadustat, the Company’s lead investigational product candidate, is an investigational oral hypoxia-inducible factor prolyl hydroxylase, or HIF-PH, inhibitor designed to mimic the physiologic effect of altitude on oxygen availability. On March 29, 2022, the Company received a complete response letter, or CRL, from the FDA. The CRL provided that the FDA had completed its review of the Company's new drug application, or NDA, for vadadustat for the treatment of anemia due to CKD in adult patients and had determined that it could not approve the NDA in its present form. The Company held an end of review conference with the FDA and are in the process of determining next steps for a potential U.S. approval for vadadustat as a treatment of anemia due to CKD in patients on dialysis. On May 12, 2022, the Company received notice from its former collaboration partner, Otsuka Pharmaceutical Co. Ltd., or Otsuka, that Otsuka had elected to terminate the Collaboration and License Agreement dated December 18, 2016, or the Otsuka U.S. Agreement, and the Collaboration and License Agreement dated April 25, 2017, or the Otsuka International Agreement. On June 30, 2022, the Company and Otsuka entered into a Termination and Settlement Agreement, or the Termination Agreement, pursuant to which, among other things, the Company and Otsuka agreed to terminate the Otsuka U.S. Agreement and the Otsuka International Agreement as of June 30, 2022 (see Note 4 for further details). In October 2021, Otsuka submitted a Marketing Authorization Application, or MAA, for vadadustat for the treatment of anemia due to CKD in adult patients with DD-CKD and NDD-CKD to the European Medicines Agency, or EMA</span><span style="color:#0000ff;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">. </span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%"> In connection with the Termination Agreement, in July 2022, Otsuka filed a request with the EMA to transfer the MAA for vadadustat to the Company. Vadadustat is approved in Japan as a treatment for anemia due to CKD in both DD-CKD and NDD-CKD 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:112%;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:112%">,</span><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:6.5pt;font-weight:400;line-height:112%;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:112%">and marketed and sold in Japan by Mitsubishi Tanabe Pharma Corporation, or MTPC.</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:115%">In addition, the Company continues to explore additional development opportunities to expand its pipeline and portfolio of novel therapeutics. </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, commercializing Auryxia, 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, in December 2018. Additionally, following regulatory approval of vadadustat in Japan, the Company began recognizing royalty revenues from 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 HCR, 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 6 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, if approved, or any other potential product candidate, it may be unable to achieve profitability.</span></div><div><span><br/></span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:700;line-height:120%">Going Concern</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. Pursuant to the requirements of ASC 205-40, the Company’s management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. This evaluation initially does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented as of the date the financial statements are issued. </span></div><div><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:112%">When substantial doubt exists under this methodology, the Company’s management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of the Company’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.</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:107%">As of June 30, 2022, the Company had cash and cash equivalents of approximately $143.9 million. 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. However, the Company's operating plan includes assumptions pertaining to cost avoidance measures and the reduction of overhead costs that would result from the planned amendment of certain contractual arrangements, including with certain supply and collaboration partners, and the reduction of certain infrastructure costs. Therefore, because these cost avoidance initiatives and certain other elements of the Company's operating plan are outside of its control, including the planned amendment of certain contractual arrangements, including with supply and collaboration partners, and the reduction of certain infrastructure costs, there is uncertainty as to whether the Company's cash resources will be adequate to support its operations for a period through at least the next twelve months from the date of issuance of these financial statements. </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:112%">In addition, on July 15, 2022, or the Effective Date, the Company entered into the Second Amendment and Waiver with BioPharma Credit PLC, or the Collateral Agent, BPCR Limited Partnership, as a Lender, and BioPharma Credit Investments V (Master) LP, as a Lender, or the Second Amendment and Waiver, which amends and waives certain provisions of the loan agreement entered on November 11, 2019, between the Company, with Keryx Biopharmaceuticals, Inc., or Keryx, as guarantor, and the Collateral Agent, as collateral agent and a lender, and BioPharma Credit Investments V (Master) LP as a lender, or the Loan Agreement, as amended by the First Amendment and Waiver among the Collateral Agent, the Lenders and the Company, dated February 18, 2022, or the First Amendment and Waiver. The Collateral Agent and the Lenders are collectively referred to as Pharmakon (see Note 11). Pursuant to the Second Amendment and Waiver, on the Effective Date, the Company made prepayments totaling $25.0 million together with a prepayment premium of $0.5 million plus all accrued and unpaid interest on such prepayments of principal to the Effective Date, and Pharmakon agreed to waive or modify certain covenants in the Loan Agreement (see Note 11). If an event of default occurs and is continuing under the Loan Agreement, the Collateral Agent is entitled to take enforcement action, including acceleration of amounts due under the Loan Agreement, which the Company may not have the available cash resources to repay at such time. For example, pursuant to covenants in the Loan Agreement, the Company's Annual Reports on Form 10-K must not be subject to any qualification as a going concern. If any of the Company's future Annual Reports on Form 10-K is subject to any qualification related to going concern, it will result in an event of default under the Loan Agreement. </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:107%">These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date the financial statements are issued. Management’s plans to alleviate the conditions that raise substantial doubt through cost avoidance measures, including amending certain contractual arrangements, and deprioritizing and cancelling certain infrastructure activities for the Company to continue as a going concern for a period of twelve months from the date the financial statements are issued. However, the Company has concluded that the likelihood that its plan to extend its cash runway from one or more of these approaches will be successful, while reasonably possible, is less than probable. Accordingly, the Company has concluded that substantial doubt exists about its ability to continue as a going concern for a period of at least twelve months from the date of issuance of these financial statements. </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:112%">The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities, other than obligations under the Loan Agreement classified as current, that might result from the outcome of the uncertainties described above.</span></div>
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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, refund liabilities to customers, 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. </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%">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.</span></div>
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CY2022Q2 us-gaap Long Term Debt
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CY2022Q2 us-gaap Common Stock Shares Outstanding
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CY2022Q2 us-gaap Common Stock Shares Issued
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CY2021Q4 us-gaap Common Stock Shares Outstanding
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CY2021Q4 us-gaap Common Stock Shares Issued
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1800000 usd
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us-gaap Operating Lease Cost
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3600000 usd
us-gaap Operating Lease Cost
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us-gaap Operating Lease Payments
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3700000 usd
us-gaap Operating Lease Payments
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CY2022Q2 us-gaap Lessee Operating Lease Liability Payments Due Next Twelve Months
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CY2022Q2 us-gaap Operating Lease Liability
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us-gaap Research And Development Arrangement Contract To Perform For Others Costs Incurred Gross
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175700000 usd
CY2022Q2 us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
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CY2021Q2 us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
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us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
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us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
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17616760 shares

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