Akebia Therapeutics Inc. (NASDAQ:AKBA) announced on Wednesday that it has entered into a Termination and Settlement Agreement with CSL (OTC:CSLLY) Vifor, effectively ending their previous collaboration.
The biopharmaceutical company, based in Cambridge, Massachusetts, and Vifor (International) Ltd., which is now part of CSL Limited, mutually agreed to terminate their Second Amended and Restated License Agreement, originally signed on February 18, 2022, and amended on May 3, 2024.
The termination, effective immediately as of Tuesday, was based on business reasons. Under the original agreement, CSL Vifor had an exclusive license to sell Akebia's product, Vafseo, to a specified Supply Group within the United States.
Alongside the termination, the companies have structured a repayment plan for the $40 million working capital fund previously established by CSL Vifor to support Akebia's purchase of Vafseo from contract manufacturers.
Akebia Therapeutics will commence quarterly tiered royalty payments to CSL Vifor starting July 1, 2025, ranging from 8% to 14% of the net sales of Vafseo in the U.S. until the earlier of the total payments reaching $40 million or May 31, 2028. Additionally, the company is obliged to make minimum true-up payments on specific dates if the cumulative royalty payments fall short of the agreed milestones.
In conjunction with the termination agreement, Akebia will also make separate quarterly royalty payments to CSL Vifor based on net sales of Vafseo. These payments will vary depending on the annual sales volume and will continue until the end of Vafseo's market exclusivity or patent expiry. Akebia retains the option to reduce future royalty obligations with a one-time payment starting July 1, 2027.
Concurrent with the settlement, Akebia has amended its loan agreement with Kreos Capital VII (UK) Limited, managed by BlackRock Inc (NYSE:BLK)., which was originally established on January 29, 2024. The amendment includes covenants related to the termination with CSL Vifor.
The details of the Termination and Settlement Agreement, as well as the Amendment to the loan agreement, will be further outlined in Akebia's forthcoming Quarterly Report on Form 10-Q for the quarter ending June 30, 2024. This strategic shift comes as Akebia Therapeutics continues to navigate the highly competitive pharmaceutical landscape.
The company's decision to terminate the agreement with CSL Vifor and amend its loan terms reflects a reevaluation of its business strategies and financial commitments. This information is based on a press release statement.
In other recent news, Akebia Therapeutics reported significant developments. The firm regained full sales rights to Vafseo in the United States, a strategic move aimed at enhancing the drug's commercial prospects.
The company also disclosed the wholesale acquisition cost for Vafseo at $1,278 for a 30-day supply. As part of its plans, Akebia submitted a Transitional Drug Add-on Payment Adjustment application and expects full designation by 2025.
Akebia Therapeutics also announced the appointment of Erik Ostrowski as Senior Vice President, Chief Financial Officer, Chief Business Officer, Treasurer, and Principal Financial (NASDAQ:PFG) Officer. Ostrowski's diverse experience in biotechnology finance is expected to be beneficial to the company.
On the financial front, Akebia reported Q1 2024 revenues of $32.6 million, an improvement from the previous year, despite a net loss of $18 million. The company remains well-capitalized with $42 million in cash and equivalents. These are the recent developments regarding Akebia Therapeutics.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.