Akebia Therapeutics, Inc. (AKBA) Bundle
Understanding Akebia Therapeutics, Inc. (AKBA) Revenue Streams
Understanding Akebia Therapeutics, Inc.’s Revenue Streams
Primary Revenue Sources
- Product Revenue: The primary source of revenue is from the commercial sales of Auryxia. For the nine months ended September 30, 2024, product revenue was $107.8 million, compared to $117.1 million for the same period in 2023.
- License, Collaboration and Other Revenue: This segment generated $5.9 million for the nine months ended September 30, 2024, down from $21.4 million in 2023.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate reflects a decline in total revenues. For the nine months ended September 30, 2024, total revenues were $113.7 million, down from $138.4 million in 2023, representing a decrease of 18%.
Contribution of Different Business Segments to Overall Revenue
| Revenue Source | 9 Months Ended September 30, 2024 (in $ millions) | 9 Months Ended September 30, 2023 (in $ millions) | Change (in $ millions) | Percentage Change |
|---|---|---|---|---|
| Product Revenue | 107.8 | 117.1 | (9.3) | (8%) |
| License, Collaboration and Other Revenue | 5.9 | 21.4 | (15.5) | (73%) |
| Total Revenue | 113.7 | 138.4 | (24.7) | (18%) |
Analysis of Significant Changes in Revenue Streams
The decrease in product revenue is attributed to a reduction in volume, partially offset by price increases and improved contracting strategies with third-party payors. The significant drop in license, collaboration, and other revenue is mainly due to a one-time $10 million upfront payment recognized in the prior year from the Medice License Agreement, which was not repeated in 2024.
The following table summarizes revenue performance for the most recent quarters:
| Period | Product Revenue (in $ millions) | License Revenue (in $ millions) | Total Revenue (in $ millions) |
|---|---|---|---|
| Q3 2024 | 35.6 | 1.8 | 37.4 |
| Q3 2023 | 40.1 | 1.9 | 42.0 |
For the three months ended September 30, 2024, total revenue was $37.4 million, down from $42.0 million in the same quarter of the previous year, indicating a decline of 11%.
A Deep Dive into Akebia Therapeutics, Inc. (AKBA) Profitability
A Deep Dive into Akebia Therapeutics, Inc.'s Profitability
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit margin was approximately 61.3%, compared to 77.6% for the same period in 2023. For the nine months ended September 30, 2024, the gross profit margin was roughly 63.4%, down from 79.8% in 2023.
Operating Profit Margin: The operating loss for the three months ended September 30, 2024 was ($12.5 million), resulting in an operating margin of (33.4%). For the nine months ended September 30, 2024, the operating loss was ($36.2 million), leading to an operating margin of (31.8%).
Net Profit Margin: The net loss for the three months ended September 30, 2024 was ($20.0 million), translating to a net profit margin of (53.5%). For the nine months ended September 30, 2024, the net loss was ($46.6 million)(40.9%).
Trends in Profitability Over Time
The following table illustrates the trends in profitability metrics over the past two years:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Gross Profit Margin | 61.3% | 77.6% | 63.4% | 79.8% |
| Operating Profit Margin | (33.4%) | (32.5%) | (31.8%) | (36.0%) |
| Net Profit Margin | (53.5%) | (36.1%) | (40.9%) | (38.0%) |
Comparison of Profitability Ratios with Industry Averages
As of September 30, 2024, the profitability ratios compared to industry averages are as follows:
| Metric | Company | Industry Average |
|---|---|---|
| Gross Profit Margin | 61.3% | 75.0% |
| Operating Profit Margin | (33.4%) | (15.0%) |
| Net Profit Margin | (53.5%) | (25.0%) |
Analysis of Operational Efficiency
Operational efficiency can be assessed through the following metrics:
- Cost of Goods Sold (COGS): For the three months ended September 30, 2024, COGS was $14.2 million, compared to $18.0 million for the same period in 2023.
- Total Operating Expenses: For the nine months ended September 30, 2024, total operating expenses were $107.0 million, down from $130.6 million in 2023.
- Research and Development Expenses: R&D expenses for the nine months ended September 30, 2024, were $25.9 million, a significant decrease from $53.2 million in 2023.
- Selling, General and Administrative Expenses: SGA expenses for the nine months ended September 30, 2024, were $78.9 million, compared to $74.8 million in 2023.
Overall, the decline in COGS and total operating expenses indicates improved operational efficiency, despite the ongoing net losses.
Debt vs. Equity: How Akebia Therapeutics, Inc. (AKBA) Finances Its Growth
Debt vs. Equity: How Akebia Therapeutics, Inc. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, Akebia Therapeutics reported total liabilities of $257.5 million. This includes current liabilities of $65.7 million and long-term debt, net of $38.4 million. The company has short-term debt obligations amounting to $17.5 million as of December 31, 2023.
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio stands at approximately 5.1, calculated from total liabilities of $257.5 million and total stockholders' equity (deficit) of ($50.4 million). This ratio significantly exceeds the industry average of 1.1, indicating a higher reliance on debt financing compared to peers.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In 2024, Akebia issued $45.0 million in debt under the BlackRock Credit Agreement. The company also repaid $37.1 million related to the Pharmakon Term Loans in January 2024, resulting in a loss on extinguishment of debt of $0.5 million. Credit ratings remain unlisted in the latest reports; however, the company's financial health suggests increased scrutiny from potential lenders due to its high debt levels.
How the Company Balances Between Debt Financing and Equity Funding
From inception through September 30, 2024, Akebia has raised approximately $840.6 million from equity financing, including $519.8 million from underwritten public offerings. In the nine months ending September 30, 2024, net product revenue was $107.8 million, down from $117.1 million in the previous year. This decline in revenue has led the company to explore additional equity financing options to support its operations and reduce reliance on debt.
| Financial Metrics | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Liabilities | $257.5 million | $272.3 million |
| Current Liabilities | $65.7 million | $99.9 million |
| Long-term Debt (Net) | $38.4 million | $17.2 million |
| Debt-to-Equity Ratio | 5.1 | 3.7 |
| Equity Raised (Cumulative) | $840.6 million | N/A |
| Net Product Revenue | $107.8 million | $117.1 million |
Assessing Akebia Therapeutics, Inc. (AKBA) Liquidity
Assessing Akebia Therapeutics, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as:
Current Assets: $35.7 million (Cash and cash equivalents of $34.0 million and restricted cash of $1.7 million)
Current Liabilities: $86.6 million
The current ratio is 0.41, indicating potential liquidity concerns.
Quick Ratio: The quick ratio, which excludes inventory from current assets, is:
Quick Assets: $34.0 million (Cash and cash equivalents)
Current Liabilities: $86.6 million
The quick ratio is 0.39.
Analysis of Working Capital Trends
Working Capital (Current Assets - Current Liabilities):
As of September 30, 2024:
Working Capital = $35.7 million - $86.6 million = ($50.9 million)
This negative working capital highlights significant liquidity constraints.
Cash Flow Statements Overview
Cash Flow from Operating Activities:
- Net cash used in operating activities for the nine months ended September 30, 2024: ($36.2 million)
- Net cash used in operating activities for the nine months ended September 30, 2023: ($21.1 million)
Cash Flow from Investing Activities:
- Net cash used in investing activities for the nine months ended September 30, 2024: ($31,000)
- Net cash used in investing activities for the nine months ended September 30, 2023: $0
Cash Flow from Financing Activities:
- Net cash provided by financing activities for the nine months ended September 30, 2024: $27.3 million
- Net cash used in financing activities for the nine months ended September 30, 2023: ($23.9 million)
Cash, cash equivalents, and restricted cash at the end of the period:
- End of September 30, 2024: $35.7 million
- End of September 30, 2023: $48.2 million
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the total liabilities stood at $207.1 million, with an accumulated deficit of $1.7 billion.
The company has incurred net operating losses of $46.6 million for the nine months ended September 30, 2024, compared to $52.5 million for the same period in the previous year.
| Metrics | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Current Ratio | 0.41 | 0.57 |
| Quick Ratio | 0.39 | 0.54 |
| Working Capital | ($50.9 million) | ($39.4 million) |
| Net Cash Used in Operating Activities | ($36.2 million) | ($21.1 million) |
| Net Cash Used in Investing Activities | ($31,000) | $0 |
| Net Cash Provided by Financing Activities | $27.3 million | ($23.9 million) |
| Total Liabilities | $207.1 million | $241.7 million |
| Accumulated Deficit | $1.7 billion | $1.6 billion |
Is Akebia Therapeutics, Inc. (AKBA) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the company reported a net loss of $46.6 million for the nine months ended, compared to a net loss of $52.5 million for the same period in 2023. The accumulated deficit stood at $1.7 billion.
Price-to-Earnings (P/E) Ratio
The company does not currently have a positive earnings per share (EPS) due to ongoing losses. Therefore, the P/E ratio is not applicable at this time.
Price-to-Book (P/B) Ratio
The book value per share as of September 30, 2024, was calculated as $1.93 (Total Stockholders' Deficit of $50.4 million divided by shares outstanding of 211.5 million). The stock price was approximately $1.00, resulting in a P/B ratio of 0.52.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) can be estimated as follows:
- Market Capitalization: $211.5 million (based on the stock price of $1.00 and shares outstanding)
- Total Debt: $123.4 million
- Cash and Cash Equivalents: $34.0 million
Thus, the EV is calculated as $211.5 million + $123.4 million - $34.0 million = $300.9 million.
The EBITDA for the nine months ended September 30, 2024, was negative; therefore, the EV/EBITDA ratio is not applicable.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated between $0.68 and $2.20. The average stock price for the past year is approximately $1.30.
Dividend Yield and Payout Ratios
The company has not declared any dividends to date; therefore, the dividend yield is 0%, and the payout ratio is also 0%.
Analyst Consensus
As of the latest reports, the consensus among analysts is a Hold rating.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | N/A |
| P/B Ratio | 0.52 |
| EV/EBITDA Ratio | N/A |
| Stock Price Range (12 months) | $0.68 - $2.20 |
| Average Stock Price (12 months) | $1.30 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Akebia Therapeutics, Inc. (AKBA)
Key Risks Facing Akebia Therapeutics, Inc.
As of 2024, Akebia Therapeutics, Inc. faces several internal and external risk factors that could significantly impact its financial health. These risks range from industry competition to regulatory changes and market conditions.
Industry Competition
The pharmaceutical industry is characterized by intense competition. Akebia's primary product, Auryxia, will lose exclusivity in March 2025, which poses a significant risk to revenue as generic competitors may enter the market shortly thereafter. The company reported $107.8 million in product revenue for the nine months ended September 30, 2024, a decrease from $117.1 million during the same period in 2023.
Regulatory Changes
Regulatory approvals are crucial for the success of pharmaceutical products. Following a complete response letter from the FDA in March 2022 regarding vadadustat, significant additional resources were expended to obtain approval, which was finally granted on March 27, 2024. Such delays can adversely affect the business, as seen in the $20.0 million net loss reported for the three months ended September 30, 2024.
Market Conditions
Market acceptance of Akebia's products is essential for profitability. The company anticipates that the inclusion of phosphate binders in the dialysis bundle could lead to higher sales of Auryxia post-exclusivity. However, the actual market dynamics may differ, impacting revenue generation.
Operational Risks
Operationally, Akebia has incurred recurring losses since its inception, with an accumulated deficit of $1.7 billion as of September 30, 2024. The company reported a net loss of $46.6 million for the nine months ended September 30, 2024. This ongoing financial strain raises concerns about its ability to sustain operations without additional capital.
Financial Risks
Financially, Akebia faces significant challenges. As of September 30, 2024, the company had cash and cash equivalents of $34.0 million and restricted cash of $1.7 million. The need for additional financing to support ongoing operations and product development is critical, and any failure to secure the necessary funds could adversely affect its business.
Strategic Risks
Strategically, Akebia's ability to generate revenue hinges on its capacity to manage expenses effectively while achieving market share for Auryxia and Vafseo. The company reported operating expenses of $107.0 million for the nine months ended September 30, 2024, compared to $130.6 million for the same period in 2023. Such fluctuations in operational efficiency can impact overall financial stability.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | Loss of exclusivity for Auryxia in March 2025 | Potential revenue decline post-generic entry |
| Regulatory Changes | Delays in FDA approvals | Increased expenses and operational delays |
| Market Conditions | Market acceptance and pricing pressures | Impact on revenue generation |
| Operational Risks | Recurring losses and cash burn | Accumulated deficit of $1.7 billion |
| Financial Risks | Need for additional financing | Liquidity concerns and operational sustainability |
| Strategic Risks | Ability to manage expenses and market share | Operating expenses of $107.0 million |
In summary, the company must navigate these multifaceted risks to maintain its financial health and pursue growth opportunities in a competitive landscape.
Future Growth Prospects for Akebia Therapeutics, Inc. (AKBA)
Future Growth Prospects for Akebia Therapeutics, Inc.
Analysis of Key Growth Drivers
Key growth drivers for the company include:
- Product Innovations: The approval of Vafseo in March 2024 for the treatment of anemia associated with chronic kidney disease (CKD) is expected to enhance revenue streams. The market entry of Vafseo is anticipated in January 2025.
- Market Expansions: The U.S. market for phosphate binders, particularly with Auryxia, is projected to benefit from its inclusion in the end-stage renal disease (ESRD) bundle starting January 2025.
- Acquisitions: The company continues to explore additional commercial and development opportunities to expand its pipeline and portfolio through internal research and external innovation.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, total revenues were $113.7 million, a decrease from $138.4 million for the same period in 2023. Product revenue was $107.8 million compared to $117.1 million in the previous year. The anticipated revenue growth from Vafseo is a significant factor in future projections.
Strategic Initiatives or Partnerships
The company has established partnerships that may drive future growth:
- Collaboration Agreements: Revenue from licensing and collaboration was $5.9 million for the nine months ended September 30, 2024, down from $21.4 million in the previous year.
- Debt Financing: The BlackRock Credit Agreement provides up to $55 million in financing, with a significant portion already drawn to support operations and product development.
Competitive Advantages
The company benefits from several competitive advantages:
- Intellectual Property: Exclusive rights to commercialize Auryxia in the U.S. until March 2025 provide a temporary barrier against generic competition.
- Established Commercial Organization: A well-established nephrology-focused commercial organization aids in the promotion of Auryxia and Vafseo.
- R&D Expertise: Ongoing investment in R&D, with $25.9 million spent in the first nine months of 2024, supports the development of new therapeutics.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Total Revenues | $113.7 million | $138.4 million |
| Product Revenue | $107.8 million | $117.1 million |
| License Revenue | $5.9 million | $21.4 million |
| R&D Expenses | $25.9 million | $53.2 million |
| Net Loss | $46.6 million | $52.5 million |
As of September 30, 2024, the company had cash and cash equivalents of $34.0 million and an accumulated deficit of $1.7 billion.
The anticipated impact of market dynamics, including the loss of exclusivity for Auryxia in March 2025, will be critical in shaping future revenue streams. The company is actively working to contract with dialysis organizations to mitigate potential revenue declines post exclusivity.
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Resources:
- Akebia Therapeutics, Inc. (AKBA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Akebia Therapeutics, Inc. (AKBA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Akebia Therapeutics, Inc. (AKBA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.