S-4
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As filed with the Securities and Exchange Commission on October 1, 2018

Registration No. 333-          

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

AKEBIA THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   2834   20-8756903
(State or Other Jurisdiction of
Incorporation or Organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification Number)

245 First Street

Cambridge, MA 02142

(617) 871-2098

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

 

 

John P. Butler

President and Chief Executive Officer

Akebia Therapeutics, Inc.

245 First Street

Cambridge, MA 02142

(617) 871-2098

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

 

 

Copies to:

 

Peter Handrinos, Esq.
R. Scott Shean, Esq.

Daniel Rees, Esq.
Latham & Watkins LLP
200 Clarendon Street
Boston, Massachusetts 02116
(617) 948-6000

 

Jodie Morrison

Interim Chief Executive Officer

Scott Holmes

Chief Financial Officer
Keryx Biopharmaceuticals, Inc.
One Marina Park Drive, 12th Floor
Boston, Massachusetts 02210

(617) 466-3500

 

Stuart Cable, Esq.

Jacqueline Mercier, Esq.
Goodwin Procter LLP
100 Northern Avenue
Boston, Massachusetts 02210
(617) 570-1000

 

 

Approximate date of commencement of proposed sale of the securities to the public:

As soon as practicable after the effective date of this registration statement and consummation of the merger of Alpha Therapeutics Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of Akebia Therapeutics, Inc. (“Akebia”), with and into Keryx Biopharmaceuticals, Inc. (“Keryx”), as described in the Agreement and Plan of Merger, dated as of June 28, 2018, as so amended, among Akebia, Keryx and Merger Sub (the “Merger”).

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ☐


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If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☒

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

 

CALCULATION OF REGISTRATION FEE

 

 

Title Of Each Class Of
Securities To Be Registered
 

Amount

To Be
Registered (1)

  Proposed
Maximum
Offering
Price
Per Unit
  Proposed
Maximum
Aggregate
Offering Price (2)
  Amount Of
Registration
Fee (3)

Common Stock, par value $0.00001 per share

 

63,995,678

  N/A   $555,881,755.00   $67,372.87

 

 

(1)

Represents the maximum number of shares of common stock of Akebia, par value $0.00001 per share, estimated to be issuable or subject to options or other equity-based awards for which Akebia will issue substitute awards upon consummation of the Merger, as described in this joint proxy statement/prospectus. The number of shares of Akebia common stock being registered is based upon the product of (i) 170,960,592 shares of Keryx common stock outstanding and subject to options and other equity-based awards of Keryx outstanding as of the date of this registration statement, and that may be granted after such date and prior to completion of the Merger multiplied by (ii) 0.37433, the exchange multiplier for the Merger.

(2)

Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act of 1933, as amended (the “Securities Act”), and calculated pursuant to Rules 457(f)(1) and 457(c) of the Securities Act. The proposed maximum aggregate offering price of the registrant’s common stock was calculated on the basis of (i) $3.25, the average of the high and low prices per share of Keryx common stock, on The Nasdaq Capital Market on September 25, 2018, and (ii) the maximum number of shares of Keryx common stock estimated to be cancelled and exchanged in the Merger.

(3)

Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and calculated pursuant to Rules 457(c) and 457(f) under the Securities Act, based on a rate of $121.20 per $1,000,000 of the proposed maximum aggregate offering price.

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine.

 

 

 


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Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This joint proxy statement/prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

 

PRELIMINARY—SUBJECT TO COMPLETION—DATED OCTOBER 1, 2018

 

LOGO

  

LOGO

 

MERGER PROPOSAL—YOUR VOTE IS VERY IMPORTANT

[      ], 2018

 

 

Dear Shareholders of Keryx Biopharmaceuticals, Inc. and Shareholders of Akebia Therapeutics, Inc.:

As previously announced, the Boards of Directors of Keryx Biopharmaceuticals, Inc. (“Keryx”) and Akebia Therapeutics, Inc. (“Akebia”) have unanimously approved a merger. Keryx, Akebia, and Alpha Therapeutics Merger Sub, Inc., a wholly owned subsidiary of Akebia ( “Merger Sub”), entered into an Agreement and Plan of Merger, dated as of June 28, 2018, as amended on October 1, 2018 (and as amended from time to time, the “Merger Agreement”), pursuant to which Merger Sub will merge with and into Keryx, with Keryx becoming a wholly owned subsidiary of Akebia (the “Merger”). The combined company will keep the name Akebia Therapeutics, Inc. Upon consummation of the Merger, each issued and outstanding share of common stock of Keryx, $0.001 par value per share (“Keryx Share”), will be converted into the right to receive 0.37433 shares (the “Exchange Multiplier”) of common stock of Akebia, par value $0.00001 per share (“Akebia Share”), and cash in lieu of fractional shares. This Exchange Multiplier will not be adjusted for changes in the market price of either Keryx Shares or Akebia Shares between the date of signing of the Merger Agreement and consummation of the Merger. Because Akebia’s share price will fluctuate between the date of signing and the completion of the Merger, and because the Exchange Multiplier is fixed and will not be adjusted to reflect changes in Akebia’s or Keryx’s share price, the value of the Akebia Shares received by Keryx shareholders in the Merger may differ from the implied value based on the share price on the date of signing of the Merger Agreement or the date of this joint proxy statement/prospectus. We urge you to obtain current share price quotations for Akebia Shares and Keryx Shares.

Immediately following the effective time of the Merger, Keryx shareholders and Akebia shareholders are expected to own approximately 50.6% and 49.4%, respectively, of Akebia Shares, calculated based on the companies’ fully diluted market capitalizations as of the date of signing of the Merger Agreement and also taking into account the 4,000,000 additional Keryx Shares expected to be issued to Baupost Group Securities, L.L.C. in connection with the conversion under that certain Notes Conversion Agreement prior to the consummation of the Merger. Keryx Shares and Akebia Shares are currently listed on The Nasdaq Capital Market and The Nasdaq Global Market, respectively, under the symbols “KERX” and “AKBA,” respectively. Following the Merger, Akebia Shares will continue to be listed on The Nasdaq Global Market under Akebia’s current symbol, “AKBA.” Following the consummation of the Merger, Keryx Shares will no longer be listed on any stock exchange or quotation system, and Keryx will cease to be a publicly traded company. Akebia will continue as the combined company, with Keryx as its wholly owned subsidiary.

To obtain the approvals of the Keryx shareholders and the Akebia shareholders required in connection with the Merger, Keryx will hold a special meeting of its shareholders (the “Keryx Special Meeting”) and Akebia will hold a special meeting of its shareholders (the “Akebia Special Meeting”).

At the Keryx Special Meeting, Keryx shareholders will be asked to consider and vote on, among other things, a proposal to adopt the Merger Agreement (the “Keryx Merger Proposal”).

At the Akebia Special Meeting, Akebia shareholders will be asked to consider and vote on, among other things, the issuance of Akebia Shares in connection with the Merger (the “Akebia Share Issuance Proposal”).

We cannot consummate the Merger unless the shareholders of Keryx approve the Keryx Merger Proposal and the shareholders of Akebia approve the Akebia Share Issuance Proposal, each as described herein. Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend either the Keryx Special Meeting or the Akebia Special Meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the Keryx Special Meeting or Akebia Special Meeting, as applicable.

The Keryx Board of Directors has carefully considered and unanimously approved the Merger Agreement and determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and in the best interests of Keryx and its shareholders. The Keryx Board of Directors unanimously recommends that Keryx shareholders vote “FOR” the Keryx Merger Proposal and “FOR” each of the other proposals to be considered at the Keryx Special Meeting and described in the accompanying joint proxy statement/prospectus.

The Akebia Board of Directors has carefully considered and unanimously approved the Merger Agreement and determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and in the best interests of Akebia and its shareholders. The Akebia Board of Directors unanimously recommends that Akebia shareholders vote “FOR” the Akebia Share Issuance Proposal and “FOR” each of the other proposals to be considered at the Akebia Special Meeting and described in the accompanying joint proxy statement/prospectus.

 

 

The obligations of Keryx and Akebia to consummate the Merger are subject to the satisfaction or waiver of several conditions set forth in the Merger Agreement, including receipt of shareholder approval for the required proposals described above. The accompanying joint proxy statement/prospectus contains detailed information about Keryx, Akebia, the Keryx Special Meeting, the Akebia Special Meeting, the Merger Agreement, the Merger and the other business to be considered by the Keryx shareholders and Akebia shareholders at the Keryx Special Meeting and the Akebia Special Meeting, respectively. Keryx and Akebia encourage you to read the accompanying joint proxy statement/prospectus carefully. In particular, you should read the “Risk Factors” section beginning on page 36 of the accompanying joint proxy statement/prospectus for a discussion of the risks you should consider in evaluating the Merger and how it will affect you.

On behalf of the Keryx Board of Directors and the Akebia Board of Directors, thank you for your consideration and continued support.

 

Michael Rogers

Chairperson of the Board

Keryx Biopharmaceuticals, Inc.

  

Muneer A. Satter

Chairperson of the Board

Akebia Therapeutics, Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Merger, the securities to be issued in connection with the Merger or any other transaction described in the accompanying joint proxy statement/prospectus or passed upon the adequacy or accuracy of the disclosure in the accompanying joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The accompanying joint proxy statement/prospectus is dated [ ● ], 2018 and is first being mailed to the Keryx shareholders and Akebia shareholders on or about [ ● ], 2018.


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ADDITIONAL INFORMATION

The accompanying joint proxy statement/prospectus incorporates by reference important business and financial information about Keryx and Akebia from other documents that are not included in or delivered with the accompanying joint proxy statement/prospectus. This information is available to you without charge upon your request. You can obtain the documents incorporated by reference into the accompanying joint proxy statement/prospectus by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:

 

Keryx Biopharmaceuticals, Inc.

One Marina Park Drive, 12th Floor

Boston, Massachusetts 02210

Attention: Investor Relations

Telephone: (617) 466-3500

 

or

  

Akebia Therapeutics, Inc.

245 First Street

Cambridge, Massachusetts 02142

Attention: Investor Relations

Telephone: (617) 844-6130

http://ir.akebia.com/contact-investor-relations

 

or

LOGO    LOGO

 

1290 Avenue of the Americas, 9th Floor

New York, NY 10104

Toll-Free: (888) 680-1525

  

 

1407 Broadway, 27th Floor

New York, NY 10018

Toll-Free: (800) 322-2885

Email: proxy@mackenziepartners.com

Keryx shareholders and Akebia shareholders may also consult the websites of Keryx or Akebia for more information concerning the Merger and other transactions described in the accompanying joint proxy statement/prospectus. The website of Keryx is www.keryx.com and the website of Akebia is www.akebia.com. Information included on these websites is not incorporated by reference into the accompanying joint proxy statement/prospectus.

If you would like to request any documents, you must do so by [ ], 2018, in order to receive them before the special meetings.

For a more detailed description of the information incorporated by reference in the accompanying joint proxy statement/prospectus and how you may obtain it, see “Where You Can Find More Information” beginning on page 179 of the accompanying joint proxy statement/prospectus.


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LOGO

KERYX BIOPHARMACEUTICALS, INC.

One Marina Park Drive, 12th Floor

Boston, Massachusetts 02210

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON [ ], 2018

To the Shareholders of Keryx Biopharmaceuticals, Inc.:

We cordially invite you to attend a special meeting of the shareholders of Keryx Biopharmaceuticals, Inc. (“Keryx”) being held in connection with a proposed merger with Akebia Therapeutics, Inc. (“Akebia”). On June 28, 2018, Akebia, Keryx and Alpha Therapeutics Merger Sub, Inc., a wholly owned subsidiary of Akebia (“Merger Sub”), entered into an Agreement and Plan of Merger, dated as of June 28, 2018, as amended on October 1, 2018 (and as amended from time to time, the “Merger Agreement”), pursuant to which Merger Sub will merge with and into Keryx, with Keryx surviving as a wholly owned subsidiary of Akebia (the “Merger”).

The special meeting will be held at [ ● ] local time, on [ ● ], 2018, at the offices of Goodwin Procter LLP, which are located at 100 Northern Avenue, Boston, Massachusetts 02210 (the “Keryx Special Meeting”). At the Keryx Special Meeting, you will be asked to consider and vote upon the following proposals:

 

  1.

Keryx Merger Proposal. To adopt the Merger Agreement, a copy of which is attached as Annex A to the accompanying joint proxy statement/prospectus, and thereby approve the Merger and other transactions contemplated thereby (the “Keryx Merger Proposal”);

 

  2.

Keryx Adjournment Proposal. To approve adjournments of the Keryx Special Meeting from time to time, if necessary or appropriate to solicit additional proxies in favor of the Keryx Merger Proposal if there are insufficient votes at the time of such adjournment to approve such proposal (the “Keryx Adjournment Proposal”); and

 

  3.

Keryx Advisory Compensation Proposal. To approve, on a non-binding, advisory basis, the compensation that may become payable to Keryx’s named executive officers that is based on or otherwise relates to the Merger, as disclosed in “The Merger—Interests of Keryx’s Directors and Executive Officers in the Merger” beginning on page 120 of the accompanying joint proxy statement/prospectus (the “Keryx Advisory Compensation Proposal” and together with the Keryx Merger Proposal and the Keryx Adjournment Proposal, the “Keryx Proposals”).

Approval of the Keryx Merger Proposal is required for the consummation of the Merger. Neither the approval of the Keryx Adjournment Proposal nor the approval of the Keryx Advisory Compensation Proposal is required for the consummation of the Merger. The Keryx Board of Directors (the “Keryx Board”) is not aware of any other business to be acted upon at the Keryx Special Meeting.

Approval of the Keryx Merger Proposal requires the affirmative vote of the holders of a majority of all outstanding shares of Keryx common stock, $0.001 par value per share (the “Keryx Shares”), entitled to vote at the Keryx Special Meeting. Approval of the Keryx Adjournment Proposal and the Keryx Advisory Compensation Proposal require the affirmative vote of the holders of a majority of the voting interest of the shares present, in person or by proxy, and entitled to vote on the applicable proposal at the Keryx Special Meeting.


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Each of the Keryx Merger Proposal, Keryx Adjournment Proposal, and Keryx Advisory Compensation Proposal is described in more detail in the accompanying joint proxy statement/prospectus, which you should read carefully in its entirety.

The failure of any shareholder of record of Keryx to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the Keryx Special Meeting will have the same effect as a vote “AGAINST” the Keryx Merger Proposal, but will not have an effect on the outcome of the Keryx Adjournment Proposal or the Keryx Advisory Compensation Proposal. If you hold your shares in “street name,” failure to instruct your bank, broker, or other nominee on how to vote your shares will have the same effect as a vote “AGAINST” the Keryx Merger Proposal, but will not have any effect on the Keryx Adjournment Proposal or the Keryx Advisory Compensation Proposal. Abstentions will have the same effect as a vote “AGAINST” the Keryx Merger Proposal, the Keryx Adjournment Proposal and the Keryx Advisory Compensation Proposal.

The Keryx Board has set [ ● ], 2018 as the record date for the Keryx Special Meeting. Only holders of record of Keryx Shares as of 5:00 p.m. U.S. Eastern Time on [ ● ], 2018 will be entitled to notice of and to vote at the Keryx Special Meeting and any adjournments thereof. Any shareholder entitled to attend and vote at the Keryx Special Meeting is entitled to appoint a proxy to attend and vote on such shareholder’s behalf. Such proxy need not be a holder of Keryx Shares.

Your vote is very important. To ensure your representation at the Keryx Special Meeting, please complete and return the enclosed proxy card or submit your proxy by telephone or through the Internet. Please submit your proxy promptly whether or not you expect to attend the Keryx Special Meeting. Submitting a proxy now will not prevent you from being able to vote in person at the Keryx Special Meeting. If your Keryx Shares are held in “street name” in the name of a bank, broker, or other nominee, follow the instructions on the voting instruction card furnished to you by such bank, broker, or other nominee.

The Keryx Board has unanimously approved the Merger Agreement and the transactions contemplated thereby, and has determined that the Merger Agreement and the Merger are advisable, fair to, and in the best interests of Keryx and its shareholders. The Keryx Board therefore unanimously recommends that you vote “FOR” the Keryx Merger Proposal, “FOR” the Keryx Adjournment Proposal and “FOR” the Keryx Advisory Compensation Proposal.

 

By Order of the Board of Directors,
Jodie Morrison
Interim Chief Executive Officer
Boston, Massachusetts
[ ● ], 2018


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YOUR VOTE IS IMPORTANT!

WHETHER OR NOT YOU EXPECT TO ATTEND THE KERYX SPECIAL MEETING IN PERSON, WE URGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) VIA THE INTERNET, (2) BY TELEPHONE OR (3) BY MARKING, SIGNING AND DATING THE ENCLOSED KERYX PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. IF YOU ATTEND THE KERYX SPECIAL MEETING AND WISH TO VOTE YOUR KERYX SHARES IN PERSON, YOU MAY DO SO AT ANY TIME PRIOR TO CLOSING OF THE POLLS. You may revoke your proxy or change your vote at any time before the polls close at the Keryx Special Meeting. If your Keryx Shares are held in “street name” in the name of a bank, broker, or other nominee holder of record, please follow the instructions on the voting instruction form furnished to you by such record holder.

We urge you to read the accompanying joint proxy statement/prospectus, including all documents incorporated by reference into the accompanying joint proxy statement/prospectus, and its annexes and exhibits carefully and in their entirety. If you have any questions concerning the Merger Agreement, the Merger, the Keryx Proposals, the Keryx Special Meeting or the accompanying joint proxy statement/prospectus, would like additional copies of the accompanying joint proxy statement/prospectus or need help voting your Keryx Shares, please contact:

 

 

LOGO

1290 Avenue of the Americas, 9th Floor

New York, NY 10104

Toll-Free: (888) 680-1525

or

 

 

LOGO

One Marina Park Drive, 12th Floor

Boston, MA 02210

Attention: Investor Relations

Telephone: (617) 466-3500


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LOGO

AKEBIA THERAPEUTICS, INC.

245 First Street

Cambridge, Massachusetts 02142

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON [ ], 2018

To the Shareholders of Akebia Therapeutics, Inc.:

We cordially invite you to attend a special meeting of the shareholders of Akebia Therapeutics, Inc. (“Akebia”) being held in connection with a proposed merger with Keryx Biopharmaceuticals, Inc. (“Keryx”). On June 28, 2018, Akebia, Keryx, and Alpha Therapeutics Merger Sub, Inc., a wholly owned subsidiary of Akebia (“Merger Sub”), entered into an Agreement and Plan of Merger, dated as of June 28, 2018, as amended on October 1, 2018 (and as amended from time to time, the “Merger Agreement”), pursuant to which Merger Sub will merge with and into Keryx, with Keryx surviving as a wholly owned subsidiary of Akebia (the “Merger”).

The special meeting will take place at [ ● ] local time, on [ ● ], 2018, at the offices of Latham & Watkins LLP, which are located at 200 Clarendon Street, Boston, Massachusetts 02116 (the “Akebia Special Meeting”). At the Akebia Special Meeting, you will be asked to consider and vote upon the following proposals:

 

  1.

Akebia Share Issuance Proposal. To approve the issuance of shares of common stock, par value $0.00001 per share, of Akebia (“Akebia Shares”) in connection with the Merger (the “Akebia Share Issuance Proposal”); and

 

  2.

Akebia Adjournment Proposal. To approve adjournments of the Akebia Special Meeting from time to time, if necessary or appropriate, including to solicit additional proxies in favor of the Akebia Share Issuance Proposal if there are insufficient votes at the time of such adjournment to approve such proposal (the “Akebia Adjournment Proposal” and, together with the Akebia Share Issuance Proposal, the “Akebia Proposals”).

The approval by Akebia shareholders of the Akebia Share Issuance Proposal is a condition to the consummation of the Merger. If the Akebia Share Issuance Proposal is not approved, the Merger will not be consummated. The approval of the Akebia Adjournment Proposal is not required for the consummation of the Merger. The Akebia Board of Directors (the “Akebia Board”) is not aware of any other business to be acted upon at the Akebia Special Meeting.

Please refer to the accompanying joint proxy statement/prospectus for further information with respect to the business to be transacted at the Akebia Special Meeting.

The Akebia Board has set [ ● ], 2018 as the record date for the Akebia Special Meeting. Only holders of record of Akebia Shares as of 5:00 p.m. U.S. Eastern Time on [ ● ], 2018 will be entitled to notice of and to vote at the Akebia Special Meeting and any adjournments thereof. Any shareholder entitled to attend and vote at the Akebia Special Meeting is entitled to appoint a proxy to attend and vote on such shareholder’s behalf. Such proxy need not be a holder of Akebia Shares.

To be approved, the Akebia Share Issuance Proposal and the Akebia Adjournment Proposal require the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively thereon at the Akebia Special Meeting.


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The failure of any shareholder of record of Akebia to submit a signed proxy card, grant a proxy electronically over the Internet or by telephone or to vote in person by ballot at the Akebia Special Meeting will not have an effect on the outcome of the Akebia Share Issuance Proposal or the Akebia Adjournment Proposal. An abstention will have no effect on the outcome of the Akebia Share Issuance Proposal or the Akebia Adjournment Proposal. If you hold your Akebia Shares in “street name” through a bank, broker, or other nominee and you do not instruct your bank, broker, or other nominee on how to vote your shares, your bank, broker, or other nominee will not be permitted to vote your shares on any of the Akebia Proposals, which will have no effect on the outcome of the Akebia Share Issuance Proposal or the Akebia Adjournment Proposal.

Your vote is very important. Whether or not you expect to attend the Akebia Special Meeting in person, we urge you to submit your proxy with respect to your Akebia Shares as promptly as possible by: (1) accessing the Internet website specified on your proxy card; (2) calling the toll-free number specified on your proxy card; or (3) signing and returning the enclosed proxy card in the postage-paid envelope provided, to ensure that your Akebia Shares are represented and voted at the Akebia Special Meeting. Submitting a proxy now will not prevent you from being able to vote in person at the Akebia Special Meeting. If your Akebia Shares are held in “street name” in the name of a bank, broker, or other nominee, please follow the instructions on the voting instruction card furnished by the record holder.

The Akebia Board has unanimously approved the Merger Agreement and the transactions contemplated thereby, including the issuance of Akebia Shares, and has determined that the Merger Agreement and the Merger, including the issuance of Akebia Shares, are advisable, fair to, and in the best interests of Akebia and its shareholders. The Akebia Board unanimously recommends that you vote “FOR” the Akebia Share Issuance Proposal and “FOR” the Akebia Adjournment Proposal.

 

By Order of the Board of Directors,
John P. Butler
President and Chief Executive Officer

Cambridge, Massachusetts

[ ● ], 2018


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YOUR VOTE IS IMPORTANT!

WHETHER OR NOT YOU EXPECT TO ATTEND THE AKEBIA SPECIAL MEETING IN PERSON, WE URGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) VIA THE INTERNET, (2) BY TELEPHONE OR (3) BY MARKING, SIGNING AND DATING THE ENCLOSED AKEBIA PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. IF YOU ATTEND THE AKEBIA SPECIAL MEETING AND WISH TO VOTE YOUR AKEBIA SHARES IN PERSON, YOU MAY DO SO AT ANY TIME PRIOR TO THE CLOSING OF THE POLLS AT THE SPECIAL MEETING. You may revoke your proxy or change your vote at any time before the polls close at the Akebia Special Meeting. If your Akebia Shares are held in “street name” in the name of a bank, broker, or other nominee holder of record, please follow the instructions on the voting instruction form furnished to you by such record holder.

We urge you to read the accompanying joint proxy statement/prospectus, including all documents incorporated by reference into the accompanying joint proxy statement/prospectus, and its annexes and exhibits carefully and in their entirety. If you have any questions concerning the Merger Agreement, the Merger, the Akebia Proposals, the Akebia Special Meeting or the accompanying joint proxy statement/prospectus, would like additional copies of the accompanying joint proxy statement/prospectus or need help voting your Akebia Shares, please contact:

 

 

LOGO

1407 Broadway, 27th Floor

New York, NY 10018

Toll-Free: (800) 322-2885

Email: proxy@mackenziepartners.com

or

 

 

LOGO

245 First Street

Cambridge, Massachusetts 02142

Attention: Investor Relations

Telephone: (617) 844-6130

http://ir.akebia.com/contact-investor-relations


Table of Contents

TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS

     1  

SUMMARY

     15  

Parties to the Merger

     15  

The Merger

     16  

The Combined Company Board and Management After the Merger

     17  

Keryx’s Reasons for the Merger; Recommendation of the Keryx Board

     18  

Akebia’s Reasons for the Merger; Recommendation of the Akebia Board

     18  

Voting Agreements

     18  

Voting by Keryx’s Directors and Executive Officers

     19  

Voting by Akebia’s Directors and Executive Officers

     19  

Opinion of Keryx’s Financial Advisor–MTS Securities, LLC

     19  

Opinion of Akebia’s Financial Advisor–Evercore Group L.L.C.

     20  

Opinion of Akebia’s Financial Advisor–J.P. Morgan Securities LLC

     20  

The Merger Agreement

     21  

Regulatory Approvals Required for the Merger

     24  

Accounting Treatment

     24  

Certain U.S. Federal Income Tax Consequences

     25  

Interests of Keryx’s Directors and Executive Officers in the Merger

     25  

Interests of Akebia’s Directors and Executive Officers in the Merger

     26  

Appraisal Rights

     26  

Comparison of Shareholder Rights

     26  

Risk Factors

     26  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF KERYX

     27  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF AKEBIA

     29  

SELECTED AKEBIA AND KERYX UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

     31  

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

     33  

COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

     35  

Market Prices

     35  

Holders

     35  

RISK FACTORS

     36  

Risks Related to the Merger

     36  

Risks Related to the Business of the Combined Company After the Merger

     42  

Risks Related to Keryx’s Business

     46  

Risks Related to Akebia’s Business

     46  

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     47  

THE KERYX SPECIAL MEETING

     49  

Date, Time, and Place of the Keryx Special Meeting

     49  

Purpose of the Keryx Special Meeting

     49  

Recommendation of the Keryx Board

     49  

Record Date for the Keryx Special Meeting and Quorum

     49  

Required Vote

     50  

Keryx Voting Agreement

     50  

Voting by Keryx’s and Akebia’s Directors and Executive Officers

     50  

Voting of Proxies; Incomplete Proxies

     51  

Failures to Vote, Broker Non-Votes, and Abstentions

     51  

Revocability of Proxies and Changes to a Keryx Shareholder’s Vote

     52  

Solicitation of Proxies

     53  

Adjournments

     53  

Postponements

     53  

 

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Attending the Keryx Special Meeting

     54  

Shareholder List

     54  

Assistance

     54  

KERYX PROPOSALS

     54  

Keryx Proposal 1: The Keryx Merger Proposal

     54  

Keryx Proposal 2: The Keryx Adjournment Proposal

     55  

Keryx Proposal 3: The Keryx Advisory Compensation Proposal

     55  

THE AKEBIA SPECIAL MEETING

     57  

Date, Time, and Place of the Akebia Special Meeting

     57  

Purpose of the Akebia Special Meeting

     57  

Recommendation of the Akebia Board

     57  

Record Date for the Akebia Special Meeting and Quorum

     57  

Required Vote

     58  

Akebia Voting Agreement

     58  

Voting by Akebia’s Directors and Executive Officers

     58  

Voting of Proxies; Incomplete Proxies

     58  

Failures to Vote, Broker Non-Votes, and Abstentions

     59  

Revocability of Proxies and Changes to an Akebia Shareholder’s Vote

     59  

Solicitation of Proxies

     60  

Adjournments

     60  

Postponements

     60  

Attending the Akebia Special Meeting

     60  

Shareholder List

     61  

Assistance

     61  

AKEBIA PROPOSALS

     61  

Akebia Proposal 1: The Akebia Share Issuance Proposal

     61  

Akebia Proposal 2: The Akebia Adjournment Proposal

     62  

THE MERGER

     63  

General Description of the Merger

     63  

Consideration to be Received by the Keryx Shareholders

     63  

Notes Conversion Transactions

     63  

Background of the Merger

     64  

Keryx’s Reasons for the Merger; Recommendation of the Keryx Board

     78  

Akebia’s Reasons for the Merger; Recommendation of the Akebia Board

     82  

Certain Keryx Management Unaudited Prospective Financial Information

     86  

Opinion of Keryx’s Financial Advisor – MTS Securities, LLC

     90  

Certain Akebia Management Unaudited Prospective Financial Information

     102  

Opinion of Akebia’s Financial Advisor – Evercore Group L.L.C

     107  

Opinion of Akebia’s Financial Advisor – J.P. Morgan Securities LLC

     113  

The Combined Company Board and Management After the Merger

     120  

Interests of Keryx’s Directors and Executive Officers in the Merger

     120  

Quantification of Potential Payments to Keryx Named Executive Officers in Connection with the Merger

     124  

Interests of Akebia’s Directors and Executive Officers in the Merger

     127  

Regulatory Approvals Required for the Merger

     129  

Accounting Treatment

     130  

Listing of Akebia Shares

     130  

Delisting and Deregistration of Keryx Shares

     130  

CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES

     130  

U.S. Federal Income Tax Consequences of the Merger to U.S. Holders of Keryx Shares

     132  

 

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THE MERGER AGREEMENT

     133  

Explanatory Note Regarding the Merger Agreement and the Summary of the Merger Agreement

     133  

Structure of the Merger

     133  

Consummation and Effectiveness of the Merger

     133  

Post-Closing Governance

     133  

Merger Consideration

     134  

Appraisal Rights

     134  

Procedures for Surrendering Keryx Stock Certificates

     134  

Treatment of Keryx Equity Awards

     135  

Conditions to Consummation of the Merger

     135  

Representations and Warranties

     136  

Definition of “Material Adverse Effect”

     137  

Conduct of Business Pending the Merger

     138  

Obligations to Call Special Meetings

     141  

Obligations to Recommend the Approval of the Merger Agreement and the Approval of the Akebia Share Issuance Proposal

     141  

No Solicitation

     141  

Appropriate Action Covenant

     144  

Indemnification Covenant

     144  

Employee Matters

     145  

Other Agreements

     145  

Termination of the Merger Agreement

     146  

Termination Fees and Expenses

     147  

Exclusive Remedy

     149  

Other Expenses

     150  

Specific Performance

     150  

Third-Party Beneficiaries

     150  

Amendments; Waivers

     150  

AKEBIA AND KERYX UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     150  

DESCRIPTION OF CAPITAL STOCK

     164  

General

     164  

Akebia Shares

     164  

Preferred Stock

     165  

Anti-Takeover Effects of the Akebia Charter and the Akebia Bylaws

     165  

COMPARISON OF SHAREHOLDER RIGHTS

     166  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF KERYX

     172  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF AKEBIA

     174  

LEGAL MATTERS

     175  

EXPERTS

     176  

KERYX ANNUAL MEETING SHAREHOLDER PROPOSALS

     176  

AKEBIA ANNUAL MEETING SHAREHOLDER PROPOSALS

     176  

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     178  

WHERE YOU CAN FIND MORE INFORMATION

     179  

Annex  A—Merger Agreement and First Amendment to the Merger Agreement

     A-1  

Annex B—Opinion of MTS Securities, LLC

     B-1  

Annex C—Opinion of Evercore Group LLC

     C-1  

Annex D—Opinion of J.P. Morgan Securities LLC

     D-1  

 

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS

The following are brief answers to certain questions that you may have regarding the Merger Agreement, the Merger, the issuance of Akebia Shares in connection with the Merger, the Keryx Special Meeting, the Akebia Special Meeting and the Merger Consideration (each as defined below). You are urged to read carefully this entire joint proxy statement/prospectus and additional important information contained in the annexes and exhibits to, and the documents incorporated by reference into, this joint proxy statement/prospectus because the information in this section may not provide all of the information that might be important to you in determining how to vote. See “Incorporation of Certain Documents by Reference” and “Where You Can Find More Information” beginning on pages 178 and 179, respectively, in this joint proxy statement/prospectus.

 

Q:

What is the proposed transaction?

 

A:

On June 28, 2018, Keryx Biopharmaceuticals, Inc. (“Keryx”), Akebia Therapeutics, Inc. (“Akebia”), and Alpha Therapeutics Merger Sub, Inc., a wholly owned direct subsidiary of Akebia (“Merger Sub”), entered into an Agreement and Plan of Merger, as amended on October 1, 2018 (and as amended from time to time, the “Merger Agreement”). The merger contemplated by the Merger Agreement will be implemented through a merger of Merger Sub with and into Keryx, with Keryx becoming a wholly owned subsidiary of Akebia (the “Merger”).

In the Merger, each share of common stock of Keryx, par value $0.001 per share (“Keryx Share”), issued and outstanding (other than shares held by Akebia, Merger Sub, any subsidiaries of Akebia or Keryx, or by Keryx as treasury shares) immediately prior to the effective time of the Merger (the “Effective Time”) will become the right to receive 0.37433 shares (the “Exchange Multiplier”) of common stock of Akebia, par value $0.00001 per share (“Akebia Shares”), and cash in lieu of fractional shares (such consideration, the “Merger Consideration”).

Immediately following the Effective Time, Keryx shareholders and Akebia shareholders are expected to own approximately 50.6% and 49.4%, respectively, of the Akebia Shares, based on the companies’ fully diluted market capitalizations as of the date of signing of the Merger Agreement and also taking into account the 4,000,000 additional Keryx Shares (the “Additional Shares”) expected to be issued to Baupost Group Securities, L.L.C. (“Baupost”) in connection with the conversion under that certain Notes Conversion Agreement, dated as of June 28, 2018, by and among Keryx, Baupost and Akebia (the “Notes Conversion Agreement”) prior to the consummation of the Merger, as more fully described in “The Merger—Notes Conversion Transactions” beginning on page 63 of this joint proxy statement/prospectus.

 

Q:

Why are Keryx and Akebia proposing the Merger?

 

A:

Each of the Keryx Board of Directors (the “Keryx Board”) and the Akebia Board of Directors (the “Akebia Board”) believes that the proposed Merger will provide a number of significant potential strategic benefits and opportunities that will be in the best interests of the Keryx shareholders and Akebia shareholders, respectively. To review the reasons for the proposed Merger in greater detail, see “The Merger—Keryx’s Reasons for the Merger; Recommendation of the Keryx Board” and “The Merger—Akebia’s Reasons for the Merger; Recommendation of the Akebia Board” beginning on pages 78 and 82, respectively, in this joint proxy statement/prospectus.

 

Q:

Why am I receiving this joint proxy statement/prospectus?

 

A:

Each of Keryx and Akebia is sending these materials to the Keryx shareholders and Akebia shareholders, respectively, as of the applicable record date, to help the Keryx shareholders and the Akebia shareholders decide how to vote their Keryx Shares and/or their Akebia Shares, as the case may be, with respect to the matters to be considered at the special meeting of shareholders of Keryx (the “Keryx Special Meeting”) and the special meeting of shareholders of Akebia (the “Akebia Special Meeting”), respectively.

 

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Consummation of the Merger requires certain approvals by both Keryx shareholders and Akebia shareholders. To obtain these required approvals, Keryx will hold the Keryx Special Meeting to request that the Keryx shareholders approve, among other things, a proposal to adopt the Merger Agreement (the “Keryx Merger Proposal”), and Akebia will hold the Akebia Special Meeting to request that the Akebia shareholders approve, among other things, the issuance of Akebia Shares in connection with the Merger (the “Akebia Share Issuance Proposal”). Further information about the Keryx Special Meeting, the Akebia Special Meeting, the Merger Agreement, the Merger, and the issuance of Akebia Shares as the Merger Consideration is contained in this joint proxy statement/prospectus. This joint proxy statement/prospectus constitutes both a joint proxy statement of Keryx and Akebia and a prospectus of Akebia with respect to the Akebia Shares to be issued in connection with the Merger. It is a joint proxy statement because it will be used by both Keryx in soliciting proxies from the Keryx shareholders and by Akebia in soliciting proxies from the Akebia shareholders. It is a prospectus because Akebia, in connection with the Merger, is offering Akebia Shares in exchange for outstanding Keryx Shares, as described in further detail elsewhere in this joint proxy statement/prospectus.

The enclosed proxy materials allow you to submit a proxy by telephone or over the Internet, or by signing and returning the enclosed proxy card in the postage-paid envelope provided, without attending the applicable company’s special meeting in person.

Your vote is very important. You are encouraged to submit your proxy as soon as possible by telephone or over the Internet, or by signing and returning the enclosed proxy card in the postage-paid envelope provided, even if you do plan to attend the Keryx Special Meeting or the Akebia Special Meeting in person.

 

Q:

What will Keryx shareholders receive in the Merger?

 

A:

In the Merger, each Keryx Share issued and outstanding immediately prior to the Effective Time (other than shares held by Akebia, Merger Sub, any subsidiaries of Akebia or Keryx, or by Keryx as treasury shares) will become the right to receive 0.37433 shares of Akebia Shares. No fractional Akebia Shares will be issued to Keryx shareholders in connection with the Merger. Instead, following the Effective Time, each former holder of Keryx Shares who otherwise would be entitled to receive a fractional Akebia Share will receive an amount in cash (without interest) determined by multiplying (i) the fraction of an Akebia Share that such holder would otherwise be entitled to receive (taking into account all Keryx Shares held by such holder) by (ii) the prevailing prices of Akebia Shares on The Nasdaq Global Market.

 

Q:

What will happen to my Akebia Shares?

 

A:

Following the Effective Time, Akebia will be the combined company entity, with Keryx as its wholly owned subsidiary, and you will continue to own the same Akebia Shares that you own prior to the Effective Time. However, as a result of the issuance of new Akebia Shares to Keryx shareholders as Merger Consideration, your ownership percentage in Akebia will be reduced.

 

Q:

When will the Merger be consummated?

 

A:

The Merger is expected to be consummated by the end of 2018, subject to the satisfaction (or waiver to the extent permitted) of certain conditions to closing as set forth in the Merger Agreement. However, neither Keryx nor Akebia can predict the actual date on which the Merger will be consummated, or whether it will be consummated at all, because the Merger is subject to factors beyond each company’s control, including approval of the Keryx Merger Proposal by Keryx shareholders and approval of the Akebia Share Issuance Proposal by Akebia shareholders. See “The Merger Agreement—Conditions to Consummation of the Merger” beginning on page 135 of this joint proxy statement/prospectus.

 

Q:

What are the conditions to the consummation of the Merger?

 

A:

In addition to approval of the Keryx Merger Proposal by Keryx shareholders and approval of the Akebia Share Issuance Proposal by Akebia shareholders, consummation of the Merger is subject to the satisfaction

 

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  or, to the extent permitted by applicable law, waiver by Akebia and Keryx of a number of other conditions, including the receipt of required approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). On August 21, 2018, the FTC granted early termination, effective immediately, of the applicable waiting period under the HSR Act. See “The Merger Agreement—Conditions to Consummation of the Merger” beginning on page 135 of this joint proxy statement/prospectus.

 

Q:

What effect will the Merger have on Keryx and Akebia?

 

A:

At the Effective Time, Merger Sub will merge with and into Keryx, with Keryx surviving as a wholly owned subsidiary of Akebia. Following the consummation of the Merger, Keryx Shares will no longer be listed on The Nasdaq Capital Market or any other stock exchange or quotation system, and Keryx will cease to be a publicly traded company.

Akebia Shares will continue to be registered and subject to reporting obligations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), following the consummation of the Merger. Akebia Shares will continue to be listed on The Nasdaq Global Market and will trade under the current Akebia symbol, “AKBA,” following the Merger.

 

Q:

Who will serve as the directors and senior management of the combined company after the consummation of the Merger?

 

A:

Pursuant to the Merger Agreement, following the consummation of the Merger, the board of directors of the combined company (the “Combined Board”) will consist of (i) [ ● ], [ ● ], [ ● ], and [ ● ], who are currently members of the Akebia Board and were designated by the Akebia Board (the “Continuing Directors”); (ii) [ ● ], [ ● ], [ ● ], [ ● ], and [ ● ], who are currently members of the Keryx Board and were designated by the Keryx Board (the “Keryx Board Designees”); and (iii) [ ● ], an independent director designated by the Akebia Board and the Keryx Board who is not currently a member of either the Akebia Board or the Keryx Board (the “Additional Director”), who will serve as the Chairperson of the Combined Board as of the Effective Time.

The current executive leadership team at Akebia is expected to continue to serve in the same roles in the combined company after the consummation of the Merger. Akebia’s current executive leadership team is as follows: Mr. Butler, Akebia’s President and Chief Executive Officer, Jason A. Amello, Akebia’s Senior Vice President, Chief Financial Officer and Treasurer, Michel Dahan, Akebia’s Senior Vice President, Chief Business Officer, Rita Jain, M.D., Akebia’s Senior Vice President, Chief Medical Officer, Nicole R. Hadas, Akebia’s Senior Vice President, General Counsel and Secretary, Karen Tubridy, Akebia’s Senior Vice President, Chief Development Officer, and Tamara Dillon, Akebia’s Senior Vice President, Human Resources.

 

Q:

When and where are the Keryx Special Meeting and the Akebia Special Meeting?

 

A:

Keryx: The Keryx Special Meeting will be held at [ ● ] local time, on [ ● ], 2018, at the offices of Goodwin Procter LLP located at 100 Northern Avenue, Boston, Massachusetts 02210.

Akebia: The Akebia Special Meeting will be held at [ ● ] local time, on [ ● ], 2018, at the offices of Latham & Watkins LLP located at 200 Clarendon Street, Boston, Massachusetts 02116.

 

Q:

Who is entitled to vote?

 

A:

Keryx: The Keryx Board has fixed 5:00 p.m. U.S. Eastern Time on [ ● ], 2018 as the record date for determining the Keryx shareholders who are entitled to notice of and to vote at the Keryx Special Meeting. If you were a holder of record of Keryx Shares as of 5:00 p.m. U.S. Eastern Time on [ ● ], 2018, you are entitled to receive notice of and to vote at the Keryx Special Meeting and any adjournments thereof.

 

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Akebia: The Akebia Board has fixed 5:00 p.m. U.S. Eastern Time on [ ● ], 2018 as the record date for determining the Akebia shareholders who are entitled to notice of and to vote at the Akebia Special Meeting. If you were a holder of record of Akebia Shares as of 5:00 p.m. U.S. Eastern Time on [ ● ], 2018, you are entitled to receive notice of and to vote at the Akebia Special Meeting and any adjournments thereof.

 

Q:

What are Keryx shareholders being asked to vote on?

 

A:

At the Keryx Special Meeting, Keryx shareholders will be asked to approve the following items:

 

  1.

the Keryx Merger Proposal;

 

  2.

a proposal to approve adjournments of the Keryx Special Meeting from time to time to another date and place, if necessary or appropriate to solicit additional votes in favor of the Keryx Merger Proposal if there are insufficient votes at the time of such adjournment to approve such proposal (the “Keryx Adjournment Proposal”); and

 

  3.

a proposal to approve, on a non-binding, advisory basis, the compensation that may become payable to Keryx’s named executive officers that is based on or otherwise relates to the Merger, as disclosed in “The Merger—Interests of Keryx’s Directors and Executive Officers in the Merger” (the “Keryx Advisory Compensation Proposal” and, together with the Keryx Merger Proposal and the Keryx Adjournment Proposal, the “Keryx Proposals”).

Approval of the Keryx Merger Proposal is required for consummation of the Merger. Neither the approval of the Keryx Adjournment Proposal nor the approval of the Keryx Advisory Compensation Proposal is required for consummation of the Merger.

No other matters are intended to be brought before the Keryx Special Meeting by Keryx.

 

Q:

What vote is required to approve each proposal at the Keryx Special Meeting?

 

A:     1.

Keryx Merger Proposal: Approval of the Keryx Merger Proposal requires the affirmative vote of the holders of a majority of all outstanding Keryx Shares entitled to vote at the Keryx Special Meeting. For the Keryx Merger Proposal, an abstention or a failure to vote (i.e., a failure to submit a proxy card or vote in person) will have the same effect as a vote cast “AGAINST” this proposal.

 

  2.

Keryx Adjournment Proposal: Approval of the Keryx Adjournment Proposal requires the affirmative vote of the holders of a majority of the voting interest of the Keryx Shares present and entitled to vote on the proposal. For the Keryx Adjournment Proposal, an abstention will have the same effect as a vote cast “AGAINST” this proposal and a failure to vote (i.e., a failure to submit a proxy card or vote in person) will have no effect on the outcome of the Keryx Adjournment Proposal.

 

  3.

Keryx Advisory Compensation Proposal: Approval of the Keryx Advisory Compensation Proposal requires the affirmative vote of the holders of a majority of the voting interest of the Keryx Shares present and entitled to vote on the proposal. For the Keryx Advisory Compensation Proposal, an abstention will have the same effect as a vote cast “AGAINST” this proposal and a failure to vote (i.e., a failure to submit a proxy card or vote in person) will have no effect on the outcome of the Keryx Advisory Compensation Proposal.

 

Q:

How does the Keryx Board recommend Keryx shareholders vote?

 

A:

The Keryx Board has determined that the Merger Agreement and the Merger are advisable and in the best interests of Keryx and the Keryx shareholders, and has approved and adopted the Merger Agreement and the

 

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  Merger. The Keryx Board therefore unanimously recommends that the Keryx shareholders vote their Keryx Shares:

 

  1.

FOR” the Keryx Merger Proposal;

 

  2.

FOR” the Keryx Adjournment Proposal; and

 

  3.

FOR” the Keryx Advisory Compensation Proposal.

 

Q:

Are there any risks relating to the Merger or Keryx’s, Akebia’s or the proposed combined company’s business that Keryx shareholders should consider in deciding whether to vote for the Keryx Proposals?

 

A:

Yes. Before making any decision on whether and how to vote, Keryx shareholders are urged to read carefully and in its entirety the information contained in “Risk Factors” beginning on page 36 of this joint proxy statement/prospectus. Keryx shareholders should also read and carefully consider the risk factors of Keryx and Akebia and the other risk factors that are incorporated by reference into this joint proxy statement/prospectus. See “Incorporation of Certain Documents by Reference” and “Where You Can Find More Information” beginning on pages 178 and 179, respectively, of this joint proxy statement/prospectus.

 

Q:

Do any of Keryx’s directors or executive officers have interests in the Merger that may be different from, or in addition to, those of Keryx shareholders?

 

A:

Yes. Keryx’s directors and executive officers have interests in the Merger that may be different from, or in addition to, the interests of Keryx shareholders generally. See “The Merger—Interests of Keryx’s Directors and Executive Officers in the Merger” beginning on page 120 of this joint proxy statement/prospectus. The members of the Keryx Board were aware of and considered these interests, among other matters, in evaluating the Merger Agreement and the Merger, and in recommending that the Keryx shareholders approve the Keryx Proposals.

 

Q:

What are Akebia shareholders being asked to vote on?

 

A:

At the Akebia Special Meeting, Akebia shareholders will be asked to approve the following items:

 

  1.

the Akebia Share Issuance Proposal; and

 

  2.

a proposal to approve adjournments of the Akebia Special Meeting from time to time, if necessary or appropriate, including to solicit additional proxies in favor of the Akebia Share Issuance Proposal if there are insufficient votes at the time of such adjournment to approve such proposal (the “Akebia Adjournment Proposal” and, together with the Akebia Share Issuance Proposal, the “Akebia Proposals”).

Approval by Akebia shareholders of the Akebia Share Issuance Proposal is a condition to the consummation of the Merger. If the Akebia Share Issuance Proposal is not approved, the Merger will not be consummated. The approval of the Akebia Adjournment Proposal is not required for the consummation of the Merger.

No other matters are intended to be brought before the Akebia Special Meeting by Akebia.

 

Q:

What vote is required to approve each proposal at the Akebia Special Meeting?

 

A:     1.

Akebia Share Issuance Proposal: To be approved, the Akebia Share Issuance Proposal requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively thereon at the Akebia Special Meeting. For the Akebia Share Issuance Proposal, an abstention or a failure to vote (i.e., a failure to submit a proxy card or vote in person) will have no effect on the outcome of this proposal. If you hold Akebia Shares in “street name” through a bank,

 

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  broker, or other nominee and you do not instruct your bank, broker, or other nominee on how to vote your shares, your bank, broker, or other nominee will not be permitted to vote your shares on the Akebia Share Issuance Proposal, which will have no effect on the outcome of this proposal.

 

  2.

Akebia Adjournment Proposal: To be approved, the Akebia Adjournment Proposal requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively thereon at the Akebia Special Meeting. For the Akebia Adjournment Proposal, an abstention or a failure to vote will have no effect on the outcome of the proposal. If you hold Akebia Shares in “street name” through a bank, broker, or other nominee and you do not instruct your bank, broker, or other nominee on how to vote your shares, your bank, broker, or other nominee will not be permitted to vote your shares on the Akebia Adjournment Proposal, which will have no effect on the outcome of this proposal.

 

Q:

How does the Akebia Board recommend Akebia shareholders vote?

 

A:

The Akebia Board has determined that the Merger, the Merger Agreement and the issuance of Akebia Shares in connection with the Merger are advisable and in the best interests of Akebia and the Akebia shareholders. The Akebia Board therefore unanimously recommends that the Akebia shareholders vote:

 

  1.

FOR” the Akebia Share Issuance Proposal; and

 

  3.

FOR” the Akebia Adjournment Proposal.

 

Q:

Are there any risks relating to the Merger or Akebia’s, Keryx’s or the proposed combined company’s business that Akebia shareholders should consider in deciding whether to vote for the Akebia Proposals?

 

A:

Yes. Before making any decision on whether and how to vote, Akebia shareholders are urged to read carefully and in its entirety the information contained in “Risk Factors” beginning on page 36 of this joint proxy statement/prospectus. Akebia shareholders should also read and carefully consider the risk factors of Keryx and Akebia and the other risk factors that are incorporated by reference into this joint proxy statement/prospectus. See “Incorporation of Certain Documents by Reference” and “Where You Can Find More Information” beginning on pages 178 and 179 respectively, of this joint proxy statements/prospectus.

 

Q:

Do any of Akebia’s directors or executive officers have interests in the Merger that may be different from, or in addition to, those of Akebia shareholders?

 

A:

Yes. Akebia’s directors and executive officers have interests in the Merger that may be different from, or in addition to, the interests of Akebia shareholders generally. See “The Merger—Interests of Akebia’s Directors and Executive Officers in the Merger” beginning on page 127 of this joint proxy statement/prospectus. The members of the Akebia Board were aware of and considered these interests, among other matters, in evaluating the Merger Agreement and the Merger, and in recommending that the Akebia shareholders approve the Akebia Proposals.

 

Q:

Are there any Keryx shareholders already committed to vote in favor of the Keryx Merger Proposal? Are any Akebia shareholders already committed to vote in favor of the Akebia Share Issuance Proposal?

 

A:

Keryx: Yes. Simultaneously with the execution of the Merger Agreement, Akebia entered into a voting agreement (the “Keryx Voting Agreement”) with Baupost, pursuant to which Baupost has agreed, among other things, to vote the Keryx Shares that it owns at the time such vote is taken in favor of the Keryx Proposals and against approval of any proposal made in opposition to, in competition with, or inconsistent with, the Merger Agreement or the Merger. Baupost is the owner of approximately [ ● ]% of the outstanding Keryx Shares as of the record date for the Keryx Special Meeting (excluding (i) Keryx Shares issuable upon conversion of Keryx’s Zero Coupon Convertible Senior Notes due 2021 (the “Convertible Notes”) held by Baupost and (ii) the issuance of the Additional Shares, as described in “The Merger—Notes Conversion Transactions” beginning on page 63 of this joint proxy statement/prospectus).

 

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Akebia: Yes. Simultaneously with the execution of the Merger Agreement, Keryx entered into a voting agreement with Muneer A. Satter, Chairperson of the Akebia Board, (the “Akebia Voting Agreement”) pursuant to which Mr. Satter has agreed, among other things, to vote the Akebia Shares that he beneficially owns at the time such vote is taken in favor of the Akebia Proposals and against approval of any proposal made in opposition to, in competition with, or inconsistent with, the Merger Agreement or the Merger. As of the record date for the Akebia Special Meeting, Mr. Satter beneficially owns approximately [ ● ]% of the outstanding Akebia Shares.

 

Q:

Who else must approve the Merger?

 

A:

Under the HSR Act, Keryx and Akebia may not consummate the Merger until they have furnished certain information and materials to the Antitrust Division of the U.S. Department of Justice (the “DOJ”) and the U.S. Federal Trade Commission (the “FTC”), and the applicable waiting period has expired or been terminated. On August 21, 2018, the FTC granted early termination, effective immediately, of the applicable waiting period under the HSR Act. Additional information regarding the HSR approval required for consummation of the Merger is set forth in “The Merger—Regulatory Approvals Required for the Merger” and “The Merger Agreement—Conditions to Consummation of the Merger” beginning on pages 129 and 135, respectively, of this joint proxy statement/prospectus.

 

Q:

What do I need to do now?

 

A:

After carefully reading and considering the information contained in, or incorporated by reference into, this joint proxy statement/prospectus, please submit your proxy or voting instruction card for your Keryx Shares or Akebia Shares, as applicable, as soon as possible so that your shares will be represented at your respective company’s special meeting. Please follow the instructions set forth on the proxy card or on the voting instruction card provided by your bank, broker, or other nominee if your shares are held in “street name” through your bank, broker, or other nominee.

 

Q:

How do I vote?

 

A:

If you are a shareholder of record of Keryx as of the record date for the Keryx Special Meeting, or a shareholder of record of Akebia as of the record date for the Akebia Special Meeting, you may submit your proxy before your respective company’s special meeting in one of the following ways:

 

  1.

visit the website shown on your proxy card to submit your proxy via the Internet;

 

  2.

call the toll-free number for telephone proxy submission shown on your proxy card; or

 

  3.

complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope provided.

You may also cast your vote in person at your respective company’s special meeting.

If your shares are held in “street name,” through a bank, broker, or other nominee, that institution will send you separate instructions describing the procedure for voting your shares. Please follow the voting instructions provided by your bank, broker, or other nominee. “Street name” shareholders or shareholders who wish to vote in person at the applicable company’s special meeting will need to obtain a “legal proxy” from their bank, broker, or other nominee.

 

Q:

How many votes do I have?

 

A:

Keryx: You are entitled to one vote for each Keryx Share that you owned as of 5:00 p.m. U.S. Eastern Time on the record date for the Keryx Special Meeting. As of 5:00 p.m. U.S. Eastern Time on the record date for the Keryx Special Meeting, [ ● ] Keryx Shares were outstanding and entitled to vote at the Keryx Special Meeting.

 

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Akebia: You are entitled to one vote for each Akebia Share that you owned as of 5:00 p.m. U.S. Eastern Time on the record date for the Akebia Special Meeting. As of 5:00 p.m. U.S. Eastern Time on the record date for the Akebia Special Meeting, [ ● ] Akebia Shares were outstanding and entitled to vote at the Akebia Special Meeting.

 

Q:

What if I transfer my Keryx Shares before the Keryx Special Meeting, or I transfer my Akebia Shares before the Akebia Special Meeting?

 

A:

Keryx: If you transfer your Keryx Shares after the record date for the Keryx Special Meeting but before the Keryx Special Meeting, unless you provide the transferee of your Keryx Shares with a proxy, you will retain your right to vote at the Keryx Special Meeting, but will have transferred the right to receive the Merger Consideration. In order to receive Akebia Shares as a result of the Merger, you must hold your Keryx Shares through the Effective Time.

Akebia: If you transfer your Akebia Shares after the record date for the Akebia Special Meeting but before the Akebia Special Meeting, unless you provide the transferee of your Akebia Shares with a proxy, you will retain your right to vote at the Akebia Special Meeting.

 

Q:

Should I send in my Keryx stock certificates now?

 

A:

No. Any Keryx shareholders who hold certificated Keryx Shares should keep their existing stock certificates at this time. If and when the Merger is consummated, Keryx shareholders will receive from the exchange agent a letter of transmittal and written instructions for exchanging their stock certificates for Akebia Shares. Akebia shareholders do not need to take any action with respect to their stock certificates.

Akebia will not issue stock certificates in respect of any Akebia Shares issued in connection with the Merger, except as required by law. Keryx shareholders who are entitled to receive the Merger Consideration will receive Akebia Shares in book-entry form.

 

Q:

Who is the exchange agent for the Merger?

 

A:

American Stock Transfer & Trust Company, LLC (“AST”) will be the exchange agent (the “Exchange Agent”) for the Merger.

 

Q:

How would I receive the Merger Consideration to which I would be entitled?

 

A:

After receiving the proper documentation from you, following completion of the Merger, the Exchange Agent for the Merger will forward to you the Akebia Shares and cash for fractional shares to which you are entitled. More information on the documentation you are required to deliver to the Exchange Agent may be found in the section entitled “The Merger Agreement—Procedures for Surrendering Keryx Stock Certificates” beginning on page 134 of this joint proxy statement/prospectus.

 

Q:

What constitutes a quorum?

 

A:

Keryx: The presence of Keryx shareholders representing a majority of the voting interest of all Keryx Shares entitled to vote at the Keryx Special Meeting, in person or represented by proxy, is necessary to constitute a quorum at the Keryx Special Meeting. Abstentions will be counted as present and entitled to vote for purposes of determining a quorum. If your Keryx Shares are held in the name of a bank, broker, or other nominee, you must provide your bank, broker, or other nominee with instructions on how to vote your Keryx Shares. If you do not provide voting instructions for any of the Keryx Proposals, your Keryx Shares will not be voted on any Keryx Proposal, as your bank, broker, or other nominee will not have discretionary voting authority with respect to any of the Keryx Proposals and your Keryx Shares will not be counted as present and entitled to vote for purposes of determining a quorum.

 

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Akebia: The presence of Akebia shareholders entitled to cast a majority of all votes entitled to be cast by the holders of all outstanding Akebia Shares entitled to vote, in person or represented by proxy, is necessary to constitute a quorum at the Akebia Special Meeting. Abstentions will be counted as present and entitled to vote for purposes of determining a quorum. If your Akebia Shares are held in the name of a bank, broker, or other nominee, you must provide your bank, broker, or other nominee with instructions on how to vote your Akebia Shares. If you do not provide voting instructions for any of the Akebia Proposals, your Akebia Shares will not be voted on any Akebia Proposal, as your bank, broker, or other nominee will not have discretionary voting authority with respect to any of the Akebia Proposals and your Akebia Shares will not be counted as present and entitled to vote for purposes of determining a quorum.

 

Q:

If my shares are held in “street name” by a bank, broker, or other nominee, will my bank, broker, or other nominee vote my shares for me?

 

A:

No. If your shares are held in the name of a bank, broker, or other nominee, you are considered the “beneficial owner” of the shares held for you in what is known as “street name” and as such, you are not the “record holder” of such shares. If this is the case, this joint proxy statement/prospectus has been forwarded to you by your bank, broker, or other nominee. If your shares are held in “street name” in a stock brokerage account or by a bank or other nominee, you must provide your bank, broker, or other nominee with instructions on how to vote your shares. Please follow the instructions provided by your bank, broker, or other nominee. Please note that you may not submit a proxy with respect to shares held in “street name” by returning a proxy card directly to Keryx or Akebia or by voting in person at your respective company’s special meeting unless you provide a “legal proxy,” which you would need to obtain from your bank, broker, or other nominee. If you do not provide voting instructions to your bank, broker, or other nominee, your shares will not be voted on any proposal, as your bank, broker, or other nominee will not have discretionary voting authority with respect to any of the proposals described in this joint proxy statement/prospectus.

A “broker non-vote” occurs when a broker submits a proxy that states that the broker votes for at least one proposal, but does not vote for proposals on non-routine matters because the broker has not received instructions from the beneficial owner on how to vote and does not have discretionary authority to vote on those proposals. Under the rules of The Nasdaq Stock Market LLC (“Nasdaq”), brokers do not have discretionary authority to vote on non-routine matters. Because all of the matters to be considered at the Keryx Special Meeting and the Akebia Special Meeting are non-routine and brokers will not have discretionary authority to vote on any of the Akebia Proposals or the Keryx Proposals, Akebia and Keryx do not expect to receive any broker non-votes, and shares for which voting instructions are not provided to the broker will not be deemed voting power present for any matter before the meeting, resulting in such shares being excluded from the calculation of quorum.

If you are a Keryx shareholder and you do not instruct your bank, broker, or other nominee on how to vote your shares on any of the Keryx Proposals:

 

   

your shares will not be counted towards determining whether a quorum is present; and

 

   

your bank, broker, or other nominee will not be permitted to vote your shares on the Keryx Merger Proposal, the Keryx Adjournment Proposal, or the Keryx Advisory Compensation Proposal, and this will have the same effect as a vote cast “AGAINST” the Keryx Merger Proposal and will have no effect on the vote counts for the Keryx Adjournment Proposal and the Keryx Advisory Compensation Proposal.

If you are an Akebia shareholder and you do not instruct your bank, broker, or other nominee on how to vote your shares on any of the Akebia Proposals:

 

   

your shares will not be counted towards determining whether a quorum is present; and

 

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your bank, broker, or other nominee will not be permitted to vote your shares on the Akebia Share Issuance Proposal or the Akebia Adjournment Proposal, and this non-vote will have no effect on the vote counts for the Akebia Share Issuance Proposal or the Akebia Adjournment Proposal.

 

Q:

What if I do not vote?

 

A:

Keryx Quorum: If you are a Keryx shareholder and you fail to vote (i.e., fail to submit a proxy card or vote in person) or fail to properly instruct your bank, broker, or other nominee how to vote with respect to any of the Keryx Proposals, your Keryx Shares will not count towards determining whether a quorum is present. However, if you respond with an “abstain” vote on any of the Keryx Proposals, or vote on one or more of the Keryx Proposals, your Keryx Shares will count towards determining whether a quorum is present.

Keryx Merger Proposal: If you are a Keryx shareholder and you fail to vote (i.e., fail to submit a proxy card or vote in person) or fail to return a voting instruction card instructing your bank, broker, or other nominee how to vote on the Keryx Merger Proposal, or if you respond with an “abstain” vote on the Keryx Merger Proposal, this will have the same effect as a vote cast “AGAINST” the Keryx Merger Proposal.

Keryx Adjournment Proposal and Keryx Advisory Compensation Proposal: If you are a Keryx shareholder and you fail to vote (i.e., fail to submit a proxy card or vote in person) or fail to return a voting instruction card instructing your bank, broker, or other nominee how to vote on the Keryx Adjournment Proposal and the Keryx Advisory Compensation Proposal, this will have no effect on the vote count for the Keryx Adjournment Proposal or the Keryx Advisory Compensation Proposal. If you are a Keryx shareholder and you respond with an “abstain” vote on the Keryx Adjournment Proposal or the Keryx Advisory Compensation Proposal, this will have the same effect as a vote cast “AGAINST” the Keryx Adjournment Proposal or the Keryx Advisory Compensation Proposal, respectively.

Akebia Quorum: If you are an Akebia shareholder and you fail to vote (i.e., fail to submit a proxy card or vote in person) or fail to properly instruct your bank, broker, or other nominee how to vote with respect to any of the Akebia Proposals, your Akebia Shares will not count towards determining whether a quorum is present. However, if you respond with an “abstain” vote on any of the Akebia Proposals, or vote on one or more of the Akebia Proposals, your Akebia Shares will count towards determining whether a quorum is present.

Akebia Proposals: If you are an Akebia shareholder and you fail to vote (i.e., fail to submit a proxy card or vote in person) or fail to return a voting instruction card instructing your bank, broker, or other nominee how to vote, or if you respond with an “abstain” vote on the Akebia Proposals, this will have no effect on the outcome of the Akebia Proposals.

An abstention occurs when a holder attends the applicable meeting in person and does not vote (assuming that such holder did not previously authorize a proxy) or returns a proxy or voting instruction card with an “abstain” vote.

Please note that if you sign and return your proxy or voting instruction card without indicating how to vote on any particular proposal (and you do not change your vote after delivering your proxy or voting instruction card), the Keryx Shares represented by your proxy will be voted “FOR” each Keryx Proposal in accordance with the recommendation of the Keryx Board, or the Akebia Shares represented by your proxy will be voted “FOR” each Akebia Proposal in accordance with the recommendation of the Akebia Board, as applicable. See the Q&A below entitled “May I change my vote after I have delivered my proxy or voting instruction card?” for further information on how to change your vote.

Your vote is very important. Whether or not you plan to attend the Keryx Special Meeting or the Akebia Special Meeting, as applicable, please promptly complete and return the enclosed proxy card or submit your proxy by telephone or through the Internet.

 

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Q:

May I change my vote after I have delivered my proxy or voting instruction card?

 

A:

Keryx: If you are a Keryx shareholder of record, you may change your vote or revoke a proxy at any time before your proxy is voted at the Keryx Special Meeting. You can do this by:

 

   

sending a written notice of revocation that is received by Keryx prior to 11:59 p.m. (U.S. Eastern Time) on the day preceding the Keryx Special Meeting, stating that you would like to revoke your proxy, to Keryx’s Corporate Secretary at Keryx’s corporate headquarters, One Marina Park Drive, 12th Floor, Boston, Massachusetts 02210;

 

   

submitting a new proxy bearing a later date (by Internet, telephone or mail) that is received by Keryx prior to 11:59 p.m. (U.S. Eastern Time) on the day preceding the Keryx Special Meeting; or

 

   

attending the Keryx Special Meeting and voting in person or bringing a written notice of revocation to the Secretary of the Keryx Special Meeting prior to the voting at the Keryx Special Meeting (your attendance at the meeting will not, by itself, revoke your proxy; you must vote in person by ballot at the meeting to change your vote or submit a written notice of revocation to revoke your proxy).

Attending the Keryx Special Meeting will not automatically revoke a proxy that was submitted through the Internet or by telephone or mail. If you wish to change your vote at the Keryx Special Meeting, you must vote by ballot at such meeting or if you wish to revoke your vote at the Keryx Special Meeting, you must bring a written notice of revocation to the Secretary of the Keryx Special Meeting prior to the voting at the Keryx Special Meeting.

If you are a Keryx shareholder whose shares are held in “street name” by a bank, broker, or other nominee, you may revoke your proxy and vote your Keryx Shares in person at the Keryx Special Meeting only in accordance with applicable rules and procedures as employed by such bank, broker, or other nominee. If your Keryx Shares are held in an account at a bank, broker, or other nominee, you should contact your bank, broker, or other nominee to change your vote.

Akebia: If you are an Akebia shareholder of record, you may change your vote or revoke a proxy at any time before your proxy is voted at the Akebia Special Meeting. You can do this by:

 

   

sending a written notice of revocation that is received by Akebia prior to 11:59 p.m. (U.S. Eastern Time) on the day preceding the Akebia Special Meeting, stating that you would like to revoke your proxy, to Nicole R. Hadas, Akebia’s Secretary, at 245 First Street, Cambridge, Massachusetts 02142;

 

   

submitting a new proxy bearing a later date (by Internet, telephone or mail) that is received by Akebia prior to 11:59 p.m. (U.S. Eastern Time) on the day preceding the Akebia Special Meeting; or

 

   

attending the Akebia Special Meeting and voting in person or bringing a written notice of revocation to the Secretary of the Akebia Special Meeting prior to the voting at the Akebia Special Meeting (your attendance at the meeting will not, by itself, revoke your proxy; you must vote in person by ballot at the meeting to change your vote or submit a written notice of revocation to revoke your proxy).

Attending the Akebia Special Meeting will not automatically revoke a proxy that was submitted through the Internet or by telephone or mail. If you wish to change your vote at the Akebia Special Meeting, you must vote by ballot at such meeting or if you wish to revoke your vote at the Akebia Special Meeting, you must bring a written notice of revocation to the Secretary of the Akebia Special Meeting prior to the voting of the Akebia Special Meeting.

If you are an Akebia shareholder whose shares are held in “street name” by a bank, broker, or other nominee, you may revoke your proxy and vote your Akebia Shares in person at the Akebia Special Meeting only in accordance with applicable rules and procedures as employed by such bank, broker, or other nominee. If your shares are held in an account at a bank, broker, or other nominee, you should contact your bank, broker, or other nominee to change your vote.

 

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Q:

Will a proxy solicitor be used?

 

A:

Yes.

Keryx has engaged Georgeson LLC (“Georgeson”) to assist in the solicitation of proxies for the Keryx Special Meeting, and Keryx estimates it will pay Georgeson a fee of $12,500, plus reimbursement for reasonable and documented out-of-pocket expenses and disbursements incurred in connection with the proxy solicitation. Keryx has also agreed to indemnify Georgeson against certain losses, costs, and expenses. In addition to mailing proxy solicitation material, Keryx’s directors, officers, and employees may also solicit proxies in person, by telephone, or by any other electronic means of communication deemed appropriate. No additional compensation will be paid to Keryx’s directors, officers or employees for such services.

Akebia has engaged MacKenzie Partners, Inc. (“MacKenzie”) to assist in the solicitation of proxies for the Akebia Special Meeting, and Akebia estimates it will pay MacKenzie a fee of approximately $40,000, plus reimbursement for reasonable and documented out-of-pocket expenses and disbursements incurred in connection with the proxy solicitation. Akebia has also agreed to indemnify MacKenzie against certain losses, costs, and expenses. In addition to mailing proxy solicitation material, Akebia’s directors, officers, and employees may also solicit proxies in person, by telephone or by any other electronic means of communication deemed appropriate. No additional compensation will be paid to Akebia’s directors, officers, or employees for such services.

 

Q:

Who will count the votes?

 

A:

At the Keryx Special Meeting, AST will serve as inspector of elections, count all of the proxies or ballots submitted and report the votes at the Keryx Special Meeting. Whether you submit your proxy by accessing the Internet, telephone or mail, your proxy will be received directly by AST.

At the Akebia Special Meeting, Broadridge Financial Solutions, Inc. (“Broadridge”) will serve as inspector of elections, count all of the proxies or ballots submitted and report the votes at the Akebia Special Meeting. Whether you submit your proxy by accessing the Internet, telephone or mail, your proxy will be received directly by Broadridge.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

Keryx shareholders and Akebia shareholders may receive more than one set of voting materials, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold Keryx Shares or Akebia Shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold such shares. If you are a holder of record of Keryx Shares or Akebia Shares and your shares are registered in more than one name, you will receive more than one proxy card. In addition, if you are a holder of both Keryx Shares and Akebia Shares, you will receive one or more separate proxy cards or voting instruction cards for each company. Therefore, if you are a record holder, please complete, sign, date, and return each proxy card and voting instruction card that you receive or otherwise follow the voting instructions set forth in this joint proxy statement/prospectus to ensure that you vote every Keryx Share and/or every Akebia Share that you own.

 

Q:

Where can I find the voting results of the Keryx Special Meeting and the Akebia Special Meeting?

 

A:

Preliminary voting results are expected to be announced at the Keryx Special Meeting and the Akebia Special Meeting and may be set forth in a press release of Keryx or Akebia after the Keryx Special Meeting and the Akebia Special Meeting, respectively. Final voting results for the Keryx Special Meeting and the Akebia Special Meeting are expected to be published in Current Reports on Form 8-K to be filed by Keryx and Akebia with the Securities and Exchange Commission (the “SEC”) within four business days after the Keryx Special Meeting and the Akebia Special Meeting, as applicable.

 

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Q:

Are Keryx shareholders entitled to appraisal rights?

 

A:

No. Under Delaware General Corporation Law (the “DGCL”) § 262(b)(1), Keryx shareholders are not entitled to exercise any appraisal rights in connection with the Merger.

 

Q:

Are Akebia shareholders entitled to appraisal rights?

 

A:

No. Under the DGCL § 262(b)(1), Akebia shareholders are not entitled to exercise any appraisal rights in connection with the Merger.

 

Q:

What if I hold Keryx stock options?

 

A:

Options to purchase Keryx Shares (“Keryx Option”) granted under a Keryx equity incentive plan (“Keryx Equity Plan”) that are outstanding immediately prior to the Effective Time (whether vested or unvested), will automatically and without any action on the part of the holder thereof, be cancelled and converted into an option to acquire the number of Akebia Shares (an “Akebia Option”), equal to the product of (i) the number of Keryx Shares subject to such Keryx Option as of immediately prior to the Effective Time, multiplied by (ii) the Exchange Multiplier, rounded down to the nearest whole number of Akebia Shares, at an exercise price per Akebia Share equal to the quotient obtained by dividing the per share exercise price of Keryx Options by the Exchange Multiplier, rounded up to the nearest whole cent. To the extent that Section 409A or Section 421(a) of the Internal Revenue Code of 1986, as amended (the “Code”), applies to any such Keryx Option, the foregoing adjustment will be subject to any modifications that are required to make the substitution of Akebia Options for Keryx Options consistent with the Code.

 

Q:

What if I hold Keryx restricted shares?

 

A:

All restricted shares of Keryx (“Keryx Restricted Shares”) that are outstanding and subject to restrictions (including vesting), other than those restrictions that accelerate or lapse as a result of the Effective Time, will be cancelled and converted into awards of restricted stock units of Akebia (“Akebia RSUs”) with respect to that number of Akebia Shares that is equal to the product of (i) the number of Keryx Shares subject to the Keryx Restricted Share award as of immediately prior to the Effective Time, multiplied by (ii) the Exchange Multiplier. Keryx Restricted Shares that are outstanding and whose restrictions (including vesting) accelerate or lapse as a result of the Effective Time, will automatically become the right to receive 0.37433 fully paid and non-assessable Akebia Shares.

 

Q:

What are the U.S. federal income tax consequences of the Merger to U.S. Holders of Keryx Shares?

 

A:

The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Assuming that the Merger so qualifies, a U.S. Holder (as defined on page 131 of this joint proxy statement/prospectus) of Keryx Shares generally will not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of Keryx Shares for Akebia Shares in the Merger, except with respect to cash received by Keryx shareholders in lieu of fractional Akebia Shares.

Please review the information set forth in the section entitled “Certain U.S. Federal Income Tax Consequences” beginning on page 130 of this joint proxy statement/prospectus for a more complete description of certain U.S. federal income tax consequences of the Merger. The tax consequences to you of the Merger will depend on your particular facts and circumstances. Please consult your tax advisors as to the specific tax consequences to you of the Merger.

 

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Q:

What happens if the trading price of Keryx Shares or Akebia Shares changes before the consummation of the Merger?

 

A:

No change will be made to the Exchange Multiplier if the trading price of Keryx Shares or Akebia Shares changes before the consummation of the Merger. Accordingly, the exact value at the consummation of the Merger of the Akebia Shares to be received by Keryx shareholders in the Merger will depend on the trading price of the Akebia Shares at the consummation of the Merger.

 

Q:

What happens if the Merger is not consummated?

 

A:

If the Merger is not consummated, Keryx shareholders will not receive the Merger Consideration in exchange for their Keryx Shares. Instead, Akebia and Keryx will remain independent public companies and the Keryx Shares and the Akebia Shares will continue to be listed and traded on The Nasdaq Capital Market and The Nasdaq Global Market, respectively, under their current ticker symbols. Under specified circumstances, Keryx or Akebia may be required to pay to, or be entitled to receive from, the other party a fee or reimbursement of expenses with respect to the termination of the Merger Agreement, as described under “The Merger Agreement—Termination Fees and Expenses” beginning on page 147 of this joint proxy statement/prospectus.

 

Q:

Do I need identification to attend the Keryx Special Meeting or the Akebia Special Meeting in person?

 

A:

Yes. Please bring proper identification, together with proof that you are a record owner of Keryx Shares or Akebia Shares. If your shares are held in “street name,” please bring acceptable proof of ownership, such as a letter from your broker or an account statement stating or showing that you beneficially owned Keryx Shares or Akebia Shares, as applicable, on the applicable record date.

 

Q:

Whom should I contact if I have any questions about the proxy materials or voting?

 

A:

If you have any questions about the proxy materials or if you need assistance submitting your proxy or voting your shares or need additional copies of this joint proxy statement/prospectus or the enclosed proxy card, you should, if you are a Keryx shareholder, contact Georgeson, Keryx’s proxy solicitor, by telephone toll-free at (888) 680-1525, and, if you are an Akebia shareholder, contact MacKenzie, Akebia’s proxy solicitor, by mail at 1407 Broadway, 27th Floor, New York, NY 10018, by email at proxy@mackenziepartners.com, or toll-free at (800) 322-2885.

 

Q:

Where can I find more information about Keryx and Akebia?

 

A:

You can find more information about Keryx and Akebia from the various sources described under “Where You Can Find More Information” beginning on page 179 of this joint proxy statement/prospectus.

 

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SUMMARY

This summary highlights selected information included in this joint proxy statement/prospectus. You should read carefully this entire joint proxy statement/prospectus and its annexes and exhibits and the other documents referred to in this joint proxy statement/prospectus because the information in this summary may not provide all of the information that might be important to you in determining how to vote. Additional important information about Keryx and Akebia is also contained in the annexes and exhibits to, and the documents incorporated by reference into, this joint proxy statement/prospectus. For a description of, and instructions as to how to obtain, this information, see “Where You Can Find More Information” beginning on page 179 of this joint proxy statement/prospectus. Certain items in this summary include a page reference directing you to a more complete description of that item.

Parties to the Merger

Keryx Biopharmaceuticals, Inc.

Keryx is a commercial stage biopharmaceutical company focused on bringing innovative medicines to people with kidney disease. Keryx’s marketed product, Auryxia® (ferric citrate) tablets, is an orally available, absorbable, iron-based medicine. Auryxia is approved by the U.S. Food and Drug Administration (the “FDA”), for the control of serum phosphorus levels in patients with chronic kidney disease (“CKD”), on dialysis and for the treatment of iron deficiency anemia in adults with CKD, not on dialysis. Ferric citrate is also approved in Japan under the trade name Riona® and marketed by Keryx’s Japanese partner, Japan Tobacco, Inc. and its subsidiary, Torii Pharmaceutical Co., Ltd., and approved in Europe as Fexeric®.

The principal executive offices of Keryx are located at One Marina Park Drive, 12th Floor, Boston, Massachusetts 02210. Its telephone number is (617) 466-3500 and its website is www.keryx.com. Information on this Internet web site is not incorporated by reference into or otherwise part of this joint proxy statement/prospectus.

This joint proxy statement/prospectus incorporates important business and financial information about Keryx from other documents that are not included in or delivered with this joint proxy statement/prospectus. For a list of the documents that are incorporated by reference, see “Incorporation of Certain Documents by Reference” beginning on page 178 of this joint proxy statement/prospectus.

Akebia Therapeutics, Inc.

Akebia is a biopharmaceutical company focused on developing and commercializing novel therapeutics for patients based on hypoxia-inducible factor (“HIF”) biology, and building its pipeline while leveraging its development and commercial expertise in renal disease. HIF is the primary regulator of the production of red blood cells in the body, as well as other important metabolic functions. Pharmacologic modulation of the HIF pathway may have broad therapeutic applications. Akebia’s lead product candidate, vadadustat, is an oral therapy in Phase 3 development and has the potential to set a new standard of care in the treatment of anemia due to CKD. The Akebia management team has extensive experience in developing and commercializing drugs for the treatment of renal and metabolic disorders, as well as a deep understanding of HIF biology. This unique combination of HIF and renal expertise enables Akebia to advance a pipeline of HIF-based therapies to potentially address serious diseases.

The principal executive offices of Akebia are located at 245 First Street, Cambridge, Massachusetts 02142. Its telephone number is (617) 871-2098, and its website is www.akebia.com. Information on this Internet web site is not incorporated by reference into or otherwise part of this joint proxy statement/prospectus.

This joint proxy statement/prospectus incorporates important business and financial information about Akebia from other documents that are not included in or delivered with this joint proxy statement/prospectus. For



 

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a list of the documents that are incorporated by reference, see “Incorporation of Certain Documents by Reference” beginning on page 178 of this joint proxy statement/prospectus.

Alpha Therapeutics Merger Sub, Inc.

Merger Sub was incorporated in the State of Delaware on June 15, 2018, and is a direct, wholly owned subsidiary of Akebia. Merger Sub was formed solely for the purpose of consummating the Merger. Merger Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the Merger.

The principal executive offices of Merger Sub are located at 245 First Street, Cambridge, Massachusetts 02142; its telephone number is (617) 871-2098.

The Merger (See Page 63)

Structure of the Merger (See Page 133)

Pursuant to the Merger Agreement, Merger Sub will merge with and into Keryx, with Keryx surviving as a direct, wholly owned subsidiary of Akebia. In the Merger, each Keryx Share issued and outstanding immediately prior to the Effective Time (other than shares held by Akebia, Merger Sub, any subsidiaries of Akebia or Keryx, or by Keryx as treasury shares) will become the right to receive 0.37433 Akebia Shares.

Immediately following the Effective Time, Keryx shareholders and Akebia shareholders are expected to own approximately 50.6% and 49.4%, respectively, of the Akebia Shares, calculated based on the companies’ fully diluted market capitalizations as of the signing of the Merger Agreement and also taking into account the Additional Shares expected to be issued to Baupost in connection with the conversion under the Notes Conversion Agreement prior to the consummation of the Merger. Keryx Shares currently trade on The Nasdaq Capital Market under the symbol “KERX,” and Akebia Shares currently trade on The Nasdaq Global Market under the symbol “AKBA.” Following the consummation of the Merger, Akebia Shares will continue to be listed on The Nasdaq Global Market and will continue to trade under the symbol “AKBA.” Based on the number of outstanding Keryx Shares and Akebia Shares as of the record date of the Keryx Special Meeting and the record date of the Akebia Special Meeting, respectively, and the Keryx and Akebia equity awards expected to vest in connection with the Merger, a total of approximately [ ● ] million Akebia Shares are expected to be outstanding immediately after the consummation of the Merger.

Treatment of Keryx Equity Awards (See Page 135)

At the Effective Time, upon the terms and subject to the conditions of the Merger Agreement, outstanding Keryx equity awards will be treated as follows:

 

   

Keryx Stock Options. Each Keryx Option, to the extent then outstanding and unexercised, will automatically, without any action on the part of the holders thereof, be cancelled and converted, as of the Effective Time of the Merger and thereafter evidence an Akebia Option with respect to the number of Akebia Shares that is equal to the product of (A) the number of Keryx Shares subject to such Keryx Option as of immediately prior to the Effective Time, multiplied by (B) the Exchange Multiplier, rounded down to the nearest whole number of Akebia Shares (after such conversion, “Rollover Options”), at an exercise price per Akebia Share equal to the quotient obtained by dividing (x) the per share exercise price of Keryx Options by (y) the Exchange Multiplier, rounded up to the nearest whole cent. To the extent that Section 409A or Section 421(a) of the Code applies to any such Keryx Option, the foregoing adjustment will be subject to such modifications, if any, as are required to cause the substitution contemplated by the Merger Agreement to be made in a manner consistent with Section 409A or Section 421(a) of the Code, as applicable.



 

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Keryx Restricted Share Awards. Each Keryx Restricted Share award, to the extent then outstanding and subject to restrictions (including vesting), other than those restrictions that accelerate or lapse as a result of the Merger, shall automatically and without any action on the part of the holder thereof, be cancelled and converted, as of the Effective Time of the Merger, and thereafter evidence an Akebia RSU award with respect to the number of Akebia Shares that is equal to the product of (A) the number of Keryx Shares subject to such Keryx Restricted Share award as of immediately prior to the Effective Time, multiplied by (B) the Exchange Multiplier (after such conversion, “Rollover Restricted Shares”). Each Keryx Share that is the subject of a Keryx Restricted Share award, to the extent then outstanding and whose restrictions (including vesting) accelerate or lapse as a result of the Merger, shall automatically, without any action of the part of the holders thereof, become the right to receive 0.37433 Akebia Shares.

 

   

Following the Effective Time, each Rollover Option and Rollover Restricted Share shall be subject to the same terms and conditions as had applied to the corresponding Keryx Option or Keryx Restricted Share as of immediately prior to the Effective Time, except for such terms rendered inoperative by reason of the Merger, subject to such adjustments as reasonably determined by Akebia and Keryx to be necessary or appropriate to give effect to the conversion or the Merger, and Akebia may assume the Keryx Equity Plans.

The Combined Company Board and Management After the Merger (See Page 120)

Pursuant to the Merger Agreement, following the consummation of the Merger, the Combined Board will consist of (i) [ ● ], [ ● ], [ ● ], and [ ● ], who will be the Continuing Directors; (ii) [ ● ], [ ● ], [ ● ], [ ● ], and [ ● ], who will be the Keryx Board Designees; and (iii) [ ● ], who will be the Additional Director who will serve as the Chairperson of the Combined Board as of the Effective Time.

As of the Effective Time, the Continuing Directors, the Keryx Board Designees, and the Additional Director will be allocated among three classes of directors as follows:

 

   

Class II will consist of one Continuing Director and two Keryx Board Designees and will be up for re-election in 2019;

 

   

Class III will consist of the Additional Director, one Continuing Director, and one Keryx Board Designee and will be up for re-election in 2020; and

 

   

Class I will consist of two Continuing Directors and two Keryx Board Designees and will be up for re-election in 2021.

At the Effective Time, Akebia will take all necessary action to cause Mr. Butler to continue as Chief Executive Officer of the combined company. In the event that Mr. Butler is not the Chief Executive Officer of Akebia immediately prior to the Effective Time, Akebia will select another individual reasonably acceptable to Keryx to be appointed as Chief Executive Officer of the combined company as of the Effective Time.

In addition to Mr. Butler, the remainder of Akebia’s current executive leadership team is expected to continue to serve in the same roles in the combined company after the consummation of the Merger. Akebia’s current executive leadership team also includes: Jason A. Amello, Akebia’s Senior Vice President, Chief Financial Officer, and Treasurer; Michel Dahan, Akebia’s Senior Vice President, Chief Business Officer; Rita Jain, M.D., Akebia’s Senior Vice President, Chief Medical Officer; Nicole R. Hadas, Akebia’s Senior Vice President, General Counsel, and Secretary; Karen Tubridy, Akebia’s Senior Vice President, Chief Development Officer; and Tamara Dillon, Akebia’s Senior Vice President, Human Resources.



 

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Keryx’s Reasons for the Merger; Recommendation of the Keryx Board (See Page 78)

Following a review and discussion of all relevant information regarding the Merger, at a meeting held on June 27, 2018, the Keryx Board, on the unanimous recommendation of a special transaction committee, unanimously: (1) determined that the Merger Agreement and the Merger were in the best interests of Keryx and its shareholders, (2) approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, and declared the Merger Agreement advisable, (3) recommended that the Keryx shareholders adopt the Merger Agreement, and (4) directed that the Merger Agreement be submitted for consideration by the Keryx shareholders at the Keryx Special Meeting.

The Keryx Board unanimously recommends that the Keryx shareholders vote “FOR” the Keryx Merger Proposal, “FOR” the Keryx Adjournment Proposal, and “FOR” the Keryx Advisory Compensation Proposal.

For the factors considered by the Keryx Board in reaching its decision to approve the Merger Agreement and the transactions contemplated thereby, including the Merger and the Keryx Merger Proposal, and to make the foregoing recommendations, see “The Merger—Keryx’s Reasons for the Merger; Recommendation of the Keryx Board” beginning on page 78 of this joint proxy statement/prospectus.

Akebia’s Reasons for the Merger; Recommendation of the Akebia Board (See Page 82)

After consideration, and following the unanimous recommendation of a transaction committee, the Akebia Board, by a unanimous vote of all directors at its meeting on June 28, 2018, approved the Merger Agreement and the transactions contemplated thereby, including the Merger and the issuance of Akebia Shares in connection with the Merger.

The Akebia Board unanimously recommends that the Akebia shareholders vote “FOR” the Akebia Share Issuance Proposal and “FOR” the Akebia Adjournment Proposal.

For the factors considered by the Akebia Board in reaching its decision to approve the Merger Agreement and the transactions contemplated thereby, including the Merger and the Akebia Share Issuance Proposal, and to make the foregoing recommendations, see “The Merger—Akebia’s Reasons for the Merger; Recommendation of the Akebia Board” beginning on page 82 of this joint proxy statement/prospectus.

Voting Agreements

Simultaneously with the execution of the Merger Agreement, Keryx entered the Akebia Voting Agreement with Mr. Satter, pursuant to which Mr. Satter has agreed, among other things, to vote the Akebia Shares that he beneficially owns as of the record date for the Akebia Special Meeting in favor of the Akebia Proposals and against approval of any proposal made in opposition to, in competition with, or inconsistent with, the Merger Agreement or the Merger.

Mr. Satter is the beneficial owner of approximately [ ● ]% of the outstanding Akebia Shares as of the record date for the Akebia Special Meeting.

Simultaneously with the execution of the Merger Agreement, Akebia entered into the Keryx Voting Agreement with Baupost, pursuant to which Baupost has agreed, among other things, to vote the Keryx Shares that it beneficially owns as of the record date for the Keryx Special Meeting in favor of the Keryx Proposals and against approval of any proposal made in opposition to, in competition with, or inconsistent with, the Merger Agreement or the Merger.



 

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Baupost is the beneficial owner of approximately [ ● ]% of the outstanding Keryx Shares as of the record date for the Keryx Special Meeting (excluding (i) Keryx Shares issuable upon conversion of the Convertible Notes held by Baupost and (ii) the issuance of the Additional Shares, as described in “The Merger—Notes Conversion Transactions” beginning on page 63 of this joint proxy statement/prospectus). Neither the Keryx Shares issuable upon conversion of the Convertible Notes nor the Additional Shares are expected to be issued and outstanding as of the record date for the Keryx Special Meeting.

Voting by Keryx’s Directors and Executive Officers

As of the record date for the Keryx Special Meeting, directors and executive officers of Keryx and their affiliates owned and were entitled to vote [ ● ] Keryx Shares, representing approximately [ ● ]% of the Keryx Shares outstanding on that date. Keryx currently expects that Keryx’s directors and executive officers will vote their Keryx Shares in favor of the Keryx Merger Proposal, the Keryx Advisory Compensation Proposal, and, if necessary, the Keryx Adjournment Proposal, although none of them has entered into any agreement obligating him or her to do so.

Voting by Akebia’s Directors and Executive Officers

As of the record date for the Akebia Special Meeting, directors and executive officers of Akebia and their affiliates owned and were entitled to vote [ ● ] Akebia Shares, representing approximately [ ● ]% of the Akebia Shares outstanding on that date. Directors and executive officers of Akebia and their affiliates owned and were entitled to vote [ ● ] Keryx Shares, representing less than [ ● ]% of the Keryx Shares outstanding on that date. Akebia currently expects that Akebia’s directors and executive officers will vote their Akebia Shares in favor of the Akebia Proposals and their Keryx Shares in favor of the Keryx Proposals, although none of them has entered into any agreement obligating them to do so, other than Mr. Satter with respect to his Akebia Shares.

Opinion of Keryx’s Financial Advisor—MTS Securities, LLC (See Page 90)

Keryx retained MTS Health Partners, L.P. (“MTS Health Partners”) as its financial advisor in connection with a potential strategic transaction. On June 27, 2018, MTS Securities, LLC (“MTS Securities”), an affiliate of MTS Health Partners, rendered its oral opinion to the Keryx Board (which was subsequently confirmed in writing as of June 27, 2018) that, as of that date and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in the MTS Opinion, the Exchange Multiplier to be received by the holders of Keryx Shares (other than (A) holders of (i) Keryx Shares held as of the Effective Time of the Merger by Akebia, Merger Sub or Keryx as treasury shares, (ii) Keryx Shares held as of the Effective Time of the Merger by any subsidiary of either Keryx or Akebia (other than Merger Sub), and (iii) restricted Keryx Shares issued under an equity plan of Keryx and subject to restrictions, other than those restrictions that accelerate or lapse as a result of the Effective Time of the Merger (for the purposes of this section and the MTS Opinion (as defined below), the “Excluded Shares”), (B) Baupost, and (C) their respective affiliates) in the Merger is fair, from a financial point of view, to such holders.

The full text of the written opinion of MTS Securities (the “MTS Opinion,”) sets forth the assumptions made, procedures followed, matters considered, and qualifications and limitations on the review undertaken by MTS Securities in connection with the MTS Opinion. The MTS Opinion is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. The summary of the MTS Opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the MTS Opinion. We urge you to read carefully the MTS Opinion, together with the summary thereof in this joint proxy statement/prospectus, in its entirety. MTS Securities provided its opinion for the information and assistance of the Keryx Board in connection with its



 

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consideration of the Merger. The MTS Opinion addressed solely the fairness, from a financial point of view, of the Exchange Multiplier to be received by the holders of Keryx Shares (other than holders of Excluded Shares, Baupost and their respective affiliates) in the Merger and does not address any other aspect or implication of the Merger. The MTS Opinion was not a recommendation to the Keryx Board or any shareholder of Keryx as to how to vote or to take any other action in connection with the Merger.

Opinion of Akebia’s Financial Advisor—Evercore Group L.L.C. (See Page 107)

Akebia has retained Evercore Group L.L.C. (“Evercore”) to act as a financial advisor in connection with the Merger. The Akebia Board engaged Evercore based on Evercore’s qualifications, experience, and reputation, as well as its familiarity with the business and management team of Akebia. Evercore is an internationally recognized investment banking firm and is regularly engaged in the valuation of businesses in connection with mergers and acquisitions, leveraged buyouts, competitive biddings, private placements, and valuations for corporate and other purposes. As part of this engagement, Akebia requested that Evercore evaluate the fairness, from a financial point of view, of the Exchange Multiplier to Akebia. On June 28, 2018, Evercore delivered to the Akebia Board its oral opinion, subsequently confirmed by its delivery of a written opinion dated as of June 28, 2018, that, as of June 28, 2018, and based upon and subject to the assumptions, procedures, factors, qualifications, limitations, and other matters set forth in Evercore’s written opinion, the Exchange Multiplier was fair, from a financial point of view, to Akebia.

The full text of Evercore’s written opinion, dated June 28, 2018, which sets forth, among other things, the assumptions made, procedures followed, matters considered, and qualifications and limitations on the scope of review undertaken by Evercore in delivering its opinion, is attached as Annex C to this joint proxy statement/prospectus and is incorporated herein by reference in its entirety. The description of Evercore’s written opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. Evercore’s opinion should not be construed as creating any fiduciary duty on Evercore’s part to any party, and such opinion is not intended to be, and does not constitute a recommendation to the Akebia Board or to any other person in respect of the Merger, including as to how any holder of Akebia Shares should vote or act in respect of the Merger.

You are urged to read Evercore’s opinion carefully and in its entirety. Evercore’s opinion was addressed to, and provided for the information and benefit of, the Akebia Board, and was delivered to the Akebia Board in connection with its evaluation of the fairness, from a financial point of view, of the Exchange Multiplier to Akebia. The opinion did not address any other aspects or implications of the Merger.

Evercore’s opinion necessarily was based upon information made available to Evercore as of June 28, 2018 and financial, economic, monetary, market, regulatory, and other conditions and circumstances as they existed and could be evaluated on such date. It is understood that subsequent developments may have affected or may affect the opinion, and Evercore undertook no obligation, and is under no obligation, to update, revise, or reaffirm its opinion based on subsequent developments. Evercore’s opinion did not express any opinion as to the price at which the Akebia Shares or the Keryx Shares will trade at any time.

Opinion of Akebia’s Financial Advisor—J.P. Morgan Securities LLC (See Page 113)

Pursuant to an engagement letter dated June 17, 2018, Akebia retained J.P. Morgan Securities LLC (“J.P. Morgan”) as a financial advisor in connection with the proposed Merger.

At the meeting of the Akebia Board on June 28, 2018, J.P. Morgan rendered its oral opinion to the Akebia Board that, as of such date and based upon and subject to assumptions, procedures, factors, qualifications,



 

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limitations, and other matters set forth in its opinion, the Exchange Multiplier in the proposed Merger was fair, from a financial point of view, to Akebia. J.P. Morgan has confirmed its June 28, 2018 oral opinion by delivering its written opinion to the Akebia Board, that, as of June 28, 2018, the Exchange Multiplier in the proposed Merger was fair, from a financial point of view, to Akebia.

The full text of the written opinion of J.P. Morgan, which sets forth the assumptions made, matters considered, and limits on the review undertaken, is attached as Annex D to this joint proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion.

Akebia’s shareholders are urged to read the opinion in its entirety. J.P. Morgan’s written opinion was addressed to the Akebia Board (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed Merger, was directed only to the Exchange Multiplier in the Merger and did not address any other aspect of the Merger. J.P. Morgan expressed no opinion as to the fairness of the Exchange Multiplier to the holders of any class of securities, creditors, or other constituencies of Akebia or as to the underlying decision by Akebia to engage in the proposed Merger.

The issuance of J.P. Morgan’s opinion was approved by a fairness committee of J.P. Morgan. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. The opinion does not constitute a recommendation to any shareholder of Akebia as to how such shareholder should vote with respect to the proposed Merger or any other matter.

The Merger Agreement (See Page 133)

The terms and conditions of the Merger are contained in the Merger Agreement, which is attached to this joint proxy statement/prospectus as Annex A. You should read the Merger Agreement carefully, as it is the legal document that governs the Merger.

Conditions to Consummation of the Merger (See Page 135)

As more fully described in this joint proxy statement/prospectus and as set forth in the Merger Agreement, the consummation of the Merger depends on a number of conditions being satisfied or waived. These conditions include:

 

   

receipt of approval of the Akebia Share Issuance Proposal;

 

   

receipt of approval of the Keryx Merger Proposal;

 

   

the absence of any adverse law or order promulgated, entered, enforced, enacted, or issued by any government entity that prohibits, restrains, or makes illegal the consummation of the Merger;

 

   

the Akebia Shares to be issued in the Merger being approved for listing on The Nasdaq Global Market;

 

   

receipt of material government approvals, including the expiration or termination of the waiting period, and any extension thereof, under the HSR Act, early termination of which was granted by the FTC on August 21, 2018, effective immediately;

 

   

subject to certain materiality exceptions, the accuracy of certain representations and warranties of each of Akebia and Keryx contained in the Merger Agreement and the compliance by each party with the covenants contained in the Merger Agreement;

 

   

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the conversion of Convertible Notes pursuant to the terms of the Notes Conversion Agreement. The issuance of the Additional Shares is a condition of the conversion, but not of the Merger.

Keryx and Akebia cannot be certain when, or if, the conditions to the Merger Agreement will be satisfied or waived (to the extent waiver is permitted by applicable law), or when or whether the Merger will be consummated.

No Solicitation (See Page 141)

As more fully described in this joint proxy statement/prospectus and as set forth in the Merger Agreement, the Merger Agreement restricts the ability of either Keryx or Akebia to, directly or indirectly:

 

   

initiate, seek, or solicit, or knowingly encourage, facilitate, or take any other action that could reasonably be expected to promote any inquiries or the making or any submission of any proposal that constitutes, or could reasonably be expected to lead to, any Acquisition Proposal (as defined in “The Merger Agreement—No Solicitation”);

 

   

subject to certain exceptions, engage in any discussions or negotiations or disclose any non-public information to any person that has made or could reasonably expected to make an Acquisition Proposal with respect to Keryx or Akebia; or

 

   

enter into any agreement, including any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, or other similar agreement, with respect to an Acquisition Proposal involving Keryx or Akebia, as applicable (other than an Acceptable Confidentiality Agreement, as defined in the Merger Agreement).

If, however, either Keryx or Akebia, as applicable, receives an Acquisition Proposal that was not solicited in violation of the Merger Agreement and, prior to receipt of shareholder approval of the Keryx Merger Proposal (in the case of Keryx) or shareholder approval of the Akebia Share Issuance Proposal (in the case of Akebia), such party’s board of directors determines in good faith (after consultation with such party’s outside counsel) that such competing acquisition proposal is or could reasonably be expected to lead to a Superior Proposal (as defined in “The Merger Agreement—No Solicitation”) and that a failure to take certain actions would be inconsistent with the directors’ fiduciary duties to Keryx’s shareholders (in the case of the Keryx Board) or directors’ fiduciary duties to Akebia’s shareholders (in the case of the Akebia Board), then such party may, subject to specified conditions and requirements, furnish nonpublic information to the person making the proposal and participate in discussions or negotiations with such person.

Further, at any time prior to obtaining the approval of the Keryx Merger Proposal or the approval of the Akebia Share Issuance Proposal, as applicable, and following any Intervening Event (as defined in “The Merger Agreement—No Solicitation”), the Keryx Board or the Akebia Board, as applicable, may make a Keryx Adverse Recommendation Change or an Akebia Adverse Recommendation Change (as defined in “The Merger Agreement—No Solicitation”), as applicable, if such board (i) determines in good faith after consultation with outside legal counsel that the failure to make a Keryx Adverse Recommendation Change or a Akebia Adverse Recommendation Change, as applicable, in response to such Intervening Event would be a breach of its fiduciary obligations to its shareholders, (ii) determines in good faith that the reasons for making such a Keryx Adverse Recommendation Change or Akebia Adverse Recommendation Change are independent of and unrelated to any pending Acquisition Proposal, and (iii) provides written notice to the other party (a “Keryx Notice of Change” or an “Akebia Notice of Change”) advising such other party that such board is contemplating making a Keryx Adverse Recommendation Change or Akebia Adverse Recommendation Change, as applicable, and specifying the material facts and information constituting the basis for such contemplated determination; provided, however, that the Keryx Board or the Akebia Board, as applicable (x) has given the other party at least five business days



 

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after receipt of the Keryx Notice of Change or Akebia Notice of Change, as applicable, and (y) during that five business day period, at the request of the other party, has negotiated in good faith with respect to any change or modifications to the Merger Agreement which would allow the appropriate board not to make a Keryx Adverse Recommendation Change or Akebia Adverse Recommendation Change, as appropriate, in response to such Intervening Event and consistent with the board’s fiduciary obligations to its shareholders.

Termination of the Merger Agreement (See Page 146)

The Merger Agreement may be terminated at any time prior to the consummation of the Merger in any of the following ways:

 

   

by mutual written consent of Keryx and Akebia;

 

   

by Akebia, at any time prior to the Effective Time, if any of Keryx’s covenants, representations, or warranties contained in the Merger Agreement shall have become untrue, such that a condition to Akebia’s obligations to consummate the Merger would not be satisfied and such breach is (A) incapable of being cured by Keryx or (B) not cured within 30 days’ notice to Keryx of such breach;

 

   

by Akebia, if Keryx materially breaches the non-solicitation provisions of the Merger Agreement or the Keryx Board or any committee thereof (A) makes a Keryx Adverse Recommendation Change (as defined in the Merger Agreement), (B) does not include the Keryx Recommendation (as defined in the Merger Agreement) in this joint proxy statement/prospectus, or (C) publicly proposes or allows Keryx to publicly propose any of the actions in (A) or (B);

 

   

by Akebia, at any time prior to the approval of the Akebia Share Issuance Proposal, upon written notice to Keryx, in order to enter into a definitive agreement with a third party providing for a Superior Proposal with respect to Akebia, if in connection with such Superior Proposal, it has complied in all material respects with the non-solicitation provisions of the Merger Agreement and substantially concurrently with such termination Akebia enters into such definitive agreement;

 

   

by Keryx, at any time prior to the Effective Time, if any of Akebia’s or Merger Sub’s covenants, representations, or warranties contained in the Merger Agreement shall have become untrue, such that a condition to Keryx’s obligations to consummate the Merger would not be satisfied and such breach is (A) incapable of being cured by Akebia or Merger Sub or (B) not cured within 30 days’ notice to Akebia of such breach;

 

   

by Keryx, if Akebia materially breaches the non-solicitation provisions of the Merger Agreement or the Akebia Board or any committee thereof (A) makes an Akebia Adverse Recommendation Change (as defined in the Merger Agreement), (B) does not include the Akebia Recommendation (as defined in the Merger Agreement) in this joint proxy statement/prospectus, or (C) publicly proposes or allows Akebia to publicly propose any of the actions in (A) or (B);

 

   

by Keryx, at any time prior to the approval of the Keryx Merger Proposal, upon written notice to Akebia, in order to enter into a definitive agreement with a third party providing for a Superior Proposal with respect to Keryx, if in connection with such Superior Proposal, it has complied in all material respects with the requirements of the Merger Agreement and substantially concurrently with such termination Keryx enters into such definitive agreement;

 

   

by either Keryx or Akebia, if the Merger and the other transactions contemplated by the Merger Agreement violate any order, decree, or ruling of any court or governmental body that has become final and non-appealable or there shall be a law that makes the contemplated transactions illegal or otherwise prohibited; provided, however, that this termination right shall not be available to any party whose action or failure to act has been the primary cause of the failure of the Merger to occur and such action or failure to act constitutes a breach of the Merger Agreement;



 

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by either Keryx or Akebia, if the Merger has not be consummated by 5:00 p.m., New York time on December 28, 2018 (the “Termination Date”); provided, however, that this termination right shall not be available to any party whose action or failure to act has been the primary cause of the failure of the Merger to occur and such action or failure to act constitutes a breach of the Merger Agreement;

 

   

by either Keryx or Akebia, if Keryx’s shareholders do not approve the Keryx Merger Proposal at the Keryx Special Meeting; provided, however, that this termination right shall not be available to any party whose action or failure to act has been the primary cause of the failure of the Merger to occur and such action or failure to act constitutes a breach of the Merger Agreement; or

 

   

by either Keryx or Akebia, if Akebia’s shareholders do not approve the Akebia Share Issuance Proposal at the Akebia Special Meeting; provided, however, that this termination right shall not be available to any party whose action or failure to act has been the primary cause of the failure of the Merger to occur and such action or failure to act constitutes a breach of the Merger Agreement.

Termination Fees and Expenses (See Page 147)

Upon termination of the Merger Agreement under certain circumstances specified in the Merger Agreement, Akebia may be required to pay Keryx a termination fee of $22 million, and upon termination of the Merger Agreement under certain other circumstances specified in the Merger Agreement, Keryx may be required to pay Akebia a termination fee of $22 million. Upon termination of the Merger Agreement in certain circumstances specified in the Merger Agreement, Akebia or Keryx may be required to reimburse the other party’s transaction expenses up to $6 million, to be credited against the $22 million termination fee (if such fee is subsequently required to be paid, as specified in the Merger Agreement).

Regulatory Approvals Required for the Merger (See Page 129)

To consummate the Merger, Keryx and Akebia must obtain approvals or consents from, or make filings with, the FTC and the Antitrust Division of the DOJ. Under the HSR Act, the Merger cannot be consummated until, among other things, notifications have been given and certain information has been provided to the FTC and the Antitrust Division of the DOJ and all applicable waiting periods (and any extensions thereof) have expired or been terminated.

Keryx and Akebia made various filings and submissions for the above-referenced approvals and consents. On August 21, 2018, the FTC granted early termination, effective immediately, of the applicable waiting period under the HSR Act.

The HSR approval condition is discussed under “The Merger—Regulatory Approvals Required for the Merger” beginning on page 129 of this joint proxy statement/prospectus.

Accounting Treatment (See Page 130)

Akebia will account for the Merger using the acquisition method of accounting in accordance with generally accepted accounting principles in the United States (“GAAP”). Although the business combination of Akebia and Keryx is a “merger of equals,” GAAP requires that one of the two companies in the Merger be designated as the acquirer for accounting purposes based on the evidence available. Accordingly, Akebia will be treated as the acquiring entity for accounting purposes. In identifying Akebia as the acquiring entity, the companies took into account, among other factors, the structure of the Merger, the composition of the Combined Board, and the decision that the current executive leadership team at Akebia will continue to serve in the same roles in the combined company. As a result, the historical financial statements of Akebia will become the historical financial statements of the combined company.



 

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The combined company will measure Keryx’s assets acquired and liabilities assumed at their fair values, including net tangible and identifiable intangible assets acquired and liabilities assumed, as of the consummation of the Merger. Any excess of the purchase price over those fair values will be recorded as goodwill.

Definite lived intangible assets will be amortized over their estimated useful lives. Intangible assets with indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually. All intangible assets and goodwill are also tested for impairment when certain indicators are present.

The allocation of purchase price reflected in the unaudited pro forma combined financial statements is based on preliminary estimates using assumptions that Akebia management believes are reasonable based on currently available information. The final purchase price and fair value assessment of assets and liabilities will be based in part on a detailed valuation that has not yet been completed.

Certain U.S. Federal Income Tax Consequences (See Page 130)

The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Assuming the Merger so qualifies, a U.S. Holder (as defined on page 131 of this joint proxy statement/prospectus) of Keryx Shares generally will not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of Keryx Shares for Akebia Shares in the Merger, except with respect to cash received by Keryx shareholders in lieu of fractional Akebia Shares.

Please review the information set forth in the section entitled “Certain U.S. Federal Income Tax Consequences” for a more complete description of certain U.S. federal income tax consequences of the Merger. Please consult your tax advisors as to the specific tax consequences to you of the Merger.

Interests of Keryx’s Directors and Executive Officers in the Merger (See Page 120)

In considering the recommendation of the Keryx Board with respect to the Keryx Proposals, Keryx shareholders should be aware that certain members of the Keryx Board and certain executive officers have interests in the Merger that may be different from, or in addition to, those of the Keryx shareholders generally. These interests include, but are not limited to:

 

   

expected service as members of the Combined Board following consummation of the Merger;

 

   

accelerated vesting of equity awards;

 

   

additional cash awards under preexisting retention agreements;

 

   

entitlement to severance benefits under preexisting severance arrangements; and

 

   

continued indemnification in favor of the current and former directors and officers of Keryx, as well as certain obligations related to maintenance of directors’ and officers’ liability insurance.

These interests are described in more detail below and may present such executive officers and directors with actual or potential conflicts of interest. The Keryx Board was aware of these interests during its deliberations on the merits of the Merger, and considered these interests, among other matters, in reaching its decision to approve and declare advisable the Merger Agreement, the Merger, and the other transactions contemplated by the Merger Agreement, and in its decision to recommend that Keryx shareholders vote for the Keryx Proposals. For additional information on the interests of Keryx’s directors and officers in the Merger, see “The Merger—Interests of Keryx’s Directors and Executive Officers in the Merger” beginning on page 120 of this joint proxy statement/prospectus.



 

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Interests of Akebia’s Directors and Executive Officers in the Merger (See Page 127)

In considering the recommendation of the Akebia Board, Akebia shareholders should be aware that certain of Akebia’s executive officers and directors have interests in the Merger that may be different from, or in addition to, those of Akebia’s shareholders generally. These interests include, but are not limited to:

 

   

expected service as members of the Combined Board following consummation of the Merger;

 

   

expected service as members of the executive leadership team of Akebia following consummation of the Merger;

 

   

the treatment of equity awards;

 

   

entitlement to severance benefits under preexisting employment agreements;

 

   

entitlement to certain employee benefits; and

 

   

continued indemnification in favor of the current and former directors and officers of Akebia, as well as certain obligations related to the maintenance of directors’ and officers’ liability insurance.

These interests may present such executive officers and directors with actual or potential conflicts of interest. The Akebia Board was aware of these interests during its deliberations on the merits of the Merger and in deciding to recommend that Akebia shareholders vote for the Akebia Proposals. For additional information on the interests of Akebia’s directors and officers in the Merger, see “The Merger—Interests of Akebia’s Directors and Executive Officers in the Merger” beginning on page 127 of this joint proxy statement/prospectus.

Appraisal Rights (See Page 134)

Under the DGCL, neither the holders of Akebia Shares nor of Keryx Shares are entitled to exercise any appraisal rights in connection with the Merger or the other transactions contemplated by the Merger Agreement.

Comparison of Shareholder Rights (See Page 166)

As a result of the Merger, the holders of Keryx Shares will become holders of Akebia Shares, and their rights will be governed by the DGCL and by the Ninth Amended and Restated Certificate of Incorporation of Akebia (the “Akebia charter”) and Akebia’s Amended and Restated Bylaws (the “Akebia bylaws”) (instead of the amended and restated certificate of incorporation of Keryx (the “Keryx charter”) or Keryx’s Amended and Restated Bylaws (the “Keryx bylaws”)). Following the Merger, former Keryx shareholders will have different rights as Akebia shareholders than they had as Keryx shareholders. For additional information on shareholder rights, see “Comparison of Shareholder Rights” beginning on page 166 of this joint proxy statement/prospectus.

Risk Factors (See Page 36)

In deciding how to vote your Keryx Shares or Akebia Shares, you should read carefully this entire joint proxy statement/prospectus, including the documents incorporated by reference herein and the annexes and exhibits hereto, and in particular, you should read the “Risk Factors” section beginning on page 36 of this joint proxy statement/prospectus. See also “Incorporation of Certain Documents by Reference” and “Where You Can Find More Information” beginning on pages 178 and 179, respectively, of this joint proxy statement/prospectus.



 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF KERYX

Set forth below are selected historical consolidated financial data for Keryx. The financial data as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 are derived from Keryx’s audited financial statements and related notes that are incorporated by reference into this joint proxy statement/prospectus from Keryx’s Annual Report on Form 10-K for the year ended December 31, 2017. The financial data as of December 31, 2015, 2014 and 2013 and for the years ended December 31, 2014 and 2013 are derived from the audited financial statements of Keryx that are not included in or incorporated by reference into this joint proxy statement/prospectus.

The selected historical consolidated financial data as of June 30, 2018 and for the three and six months ended June 30, 2018 and June 30, 2017 are derived from Keryx’s unaudited financial statements and related notes that are incorporated by reference into this joint proxy statement/prospectus from Keryx’s Quarterly Report on Form 10-Q for the period ended June 30, 2018. The selected historical consolidated financial data of Keryx as of June 30, 2017 are derived from Keryx’s unaudited consolidated financial statements and related notes from Keryx’s Quarterly Report on Form 10-Q for the period ended June 30, 2017, which is not incorporated by reference into this joint proxy statement/prospectus. Keryx’s management believes that Keryx’s unaudited consolidated financial statements have been prepared on a basis consistent with its audited financial statements and include all normal and recurring adjustments necessary for a fair presentation of the results for each interim period.

The information set forth below is only a summary and it is not necessarily indicative of the results of future operations of Keryx, nor does it include the effects of the Merger. Interim results for the six months ended and as of June 30, 2018 are not necessarily indicative of, and are not projections for, the results to be expected for the fiscal year ended December 31, 2018. The selected historical consolidated financial statement data provided below is only a summary, and you should read it in conjunction with the audited consolidated financial statements of Keryx and the related notes contained in its Annual Report on Form 10-K for the year ended December 31, 2017, the unaudited consolidated financial statements and related notes contained in the Quarterly Report on Form 10-Q for the period ended June 30, 2018, and the other information that Keryx has previously filed with the SEC and which is incorporated into this joint proxy statement/prospectus by reference. See

 

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Incorporation of Certain Documents by Reference” and “Where You Can Find More Information” beginning on pages 178 and 179, respectively, of this joint proxy statement/prospectus.

 

    Year Ended December 31,     Six Months
Ended June 30,
 
    2017     2016     2015     2014     2013     2018     2017  
    (in thousands, except share and per share data)  

Consolidated statements of operations data:

             

Net U.S. Auryxia product sales

  $ 55,514     $ 27,173     $ 10,141     $ —       $ —       $ 44,727     $ 24,621  

License revenue

    5,127       4,810       3,539       10,825       7,000       2,773       2,343  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

    60,641       31,983       13,680       10,825       7,000       47,500       26,964  

Costs and expenses:

             

Cost of goods sold

    21,955       37,803       4,520       —         —         17,029       8,653  

License expense

    3,076       2,886       2,124       495       —         1,664       1,406  

Research and development

    37,679       29,504       36,694       51,502       34,734       17,162       15,776  

Selling, general and administrative

    99,622       84,553       81,410       70,057       19,349       54,548       48,089  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total costs and expenses

    162,332       154,746       124,748       122,054       54,083       90,403       73,924  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

    (101,691     (122,763     (111,068     (111,229     (47,083     (42,903     (46,960

Other income (expense):

             

Amortization of debt discount

    (62,965     (34,227     (11,357     —         —         (1,316     (62,965

Other income (expense), net

    981       (4,025     (630     411       351       171       452  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense), net

    (61,984     (38,252     (11,987     411       351       (1,145     (62,513
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

    (163,675     (161,015     (123,055     (110,818     (46,732     (44,048     (109,473

Income tax (benefit) expense

    (235     80       90       700       —         (634     40  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

  $ (163,440   $ (161,095   $ (123,145   $ (111,518   $ (46,732   $ (43,414   $ (109,513
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net loss per common share

  $ (1.43   $ (1.52   $ (1.19   $ (1.23   $ (0.58   $ (0.36   $ (1.00
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares used in computing basic and diluted net loss per common share

    114,507,668       105,845,121       103,898,399       91,000,902       81,009,561       120,149,604       109,846,152  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

     As of December 31,     As of
June 30,
 
     2017     2016     2015     2014     2013     2018     2017  
     (in thousands, except share and per share data)  

Consolidated Balance Sheet Data:

              

Cash and cash equivalents

   $ 93,526     $ 111,810     $ 200,290     $ 74,284     $ 55,696       49,458       140,527  

Accounts receivable, net

     8,146       5,236       3,656       834       —         15,430       8,459  

Inventory

     28,695       12,681       41,881       7,830       —         48,584       18,085  

Working capital

     96,146       111,346       171,688       69,285       41,600       70,565       145,186  

Total assets

     158,872       141,427       258,685       103,628       60,766       145,651       184,189  

Convertible senior notes

     125,000       125,000       90,773       —         —         130,088       125,000  

Accumulated deficit

     (998,538     (835,098     (674,003     (550,858     (439,340     (1,041,336     (944,611

Total stockholders’ (deficit) equity

     (14,095     (8,296     86,934       73,484       45,400       (41,192     25,649  

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA OF AKEBIA

Set forth below are selected historical consolidated financial data for Akebia. The financial data as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016, and 2015 are derived from Akebia’s audited financial statements and related notes that are incorporated by reference into this joint proxy statement/prospectus from Akebia’s Annual Report on Form 10-K for the year ended December 31, 2017. The financial data as of December 31, 2015, 2014, and 2013 and for the years ended December 31, 2014 and December 31, 2013 are derived from the audited financial statements of Akebia that are not included in or incorporated by reference into this joint proxy statement/prospectus.

The selected historical consolidated financial data as of June 30, 2018 and for the three and six months ended June 30, 2018 and June 30, 2017 are derived from Akebia’s unaudited financial statements and related notes that are incorporated by reference into this joint proxy statement/prospectus from Akebia’s Quarterly Report on Form 10-Q for the period ended June 30, 2018. The selected historical consolidated financial data of Akebia as of June 30, 2017 are derived from Akebia’s unaudited consolidated financial statements and related notes from Akebia’s Quarterly Report on Form 10-Q for the period ended June 30, 2017, which is not incorporated by reference into this joint proxy statement/prospectus. Akebia management believes that Akebia’s unaudited consolidated financial statements have been prepared on a basis consistent with its audited financial statements and include all normal and recurring adjustments necessary for a fair presentation of the results for each interim period.

The information set forth below is only a summary and it is not necessarily indicative of the results of future operations of Akebia, nor does it include the effects of the Merger. Interim results for the six months ended and as of June 30, 2018 are not necessarily indicative of, and are not projections for, the results to be expected for the fiscal year ended December 31, 2018.

The selected historical consolidated financial statement data provided below is only a summary, and you should read it in conjunction with the audited consolidated financial statements of Akebia and the related notes contained in its Annual Report on Form 10-K for the year ended December 31, 2017, the unaudited consolidated financial statements and related notes contained in the Quarterly Report on Form 10-Q for the period ended June 30, 2018, and the other information that Akebia has previously filed with the SEC and which is incorporated into this joint proxy statement/prospectus by reference. See “Incorporation of Certain Documents by Reference

 

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and “Where You Can Find More Information” beginning on pages 178 and 179, respectively, of this joint proxy statement/prospectus.

 

     Year Ended December 31,     Six Months
Ended June 30,
 
     2017     2016     2015     2014     2013     2018     2017  
           (in thousands, except share and per share data)  

Consolidated statements of operations data:

              

Collaboration revenue

   $ 177,984     $ 1,535     $ —       $ —       $ —       $ 94,723     $ 49,385  

Operating expenses:

              

Research and development

     230,893       115,785       43,016       23,263       8,902       133,321       103,800  

General and administrative

     27,008       22,210       18,497       14,677       7,031       21,562       12,693  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     257,901       137,995       61,513       37,940       15,933       154,883       116,493  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (79,917     (136,460     (61,513     (37,940     (15,933     (60,160     (67,108

Other income, net

     3,003       713       797       906       2,766       2,673       1,048  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

   $ (76,914   $ (135,747   $ (60,716   $ (37,034   $ (13,167   $ (57,487   $ (66,060

Accretion on preferred stock

     —         —         —         (86,899     (55,886     —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss applicable to common shareholders

   $ (76,914   $ (135,747   $ (60,716   $ (123,933   $ (69,053   $ (57,487   $ (66,060
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per share applicable to common shareholders—basic and diluted(1)

   $ (1.77   $ (3.60   $ (2.29   $ (8.04   $ (126.94   $ (1.09   $ (1.66
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average number of common shares used in net loss per share applicable to common shareholders—basic and diluted

     43,500,795       37,716,949       26,469,170       15,406,386       544,002       52,774,794       39,795,282  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

See Note 2 of the notes to our consolidated financial statements appearing in the Akebia Annual Report on Form 10-K for the year ended December 31, 2017, for a description of the method used to calculate basic and diluted net loss per share of common stock.

 

     As of December 31,     As of
June 30,
 
     2017     2016     2015     2014     2013     2018     2017  
           (in thousands, except share and per share data)  

Consolidated Balance Sheet Data:

              

Cash and cash equivalents and available for sale securities

   $ 317,792     $ 260,343     $ 138,454     $ 108,918     $ 32,556     $ 402,123     $ 321,215  

Working capital

     214,007       182,053       129,149       103,595       29,529       242,997       150,798  

Total assets

     364,247       300,216       142,940       110,995       34,665       413,781       336,822  

Redeemable convertible preferred stock

     —         —         —         —         157,827       —         —    

Accumulated deficit

     (374,050     (297,136     (161,389     (100,673     (127,072     (428,294     (363,196

Total shareholders’ equity (deficit)

     119,331       68,120       130,998       104,078       (127,072     165,925       56,998  

 

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SELECTED AKEBIA AND KERYX UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL DATA

The following selected unaudited pro forma condensed combined financial data (the “selected pro forma data”) give effect to the Merger. The selected unaudited pro forma combined statements of operations and comprehensive loss data for the year ended December 31, 2017 and the six months ended June 30, 2018, give effect to the Merger under the acquisition method of accounting, as if the Merger had occurred on January 1, 2017. The selected unaudited pro forma combined balance sheet data as of June 30, 2018 gives effect to the Merger under the acquisition method of accounting, as if the Merger had occurred on June 30, 2018, assuming each outstanding Keryx Share, Keryx Restricted Shares, and the Keryx Options had become Akebia Shares, Akebia RSUs, or options to acquire Akebia Shares, respectively, based on the Exchange Multiplier.

The historical consolidated financial information has been adjusted in the selected pro forma data to give effect to pro forma events that are (i) directly attributable to the Merger, (ii) factually supportable and (iii) with respect to the statements of income, expected to have a continuing impact on Akebia’s results after the Merger.

The selected pro forma data have been derived from, and should be read in conjunction with, the more detailed unaudited pro forma combined financial information of Akebia following the Merger appearing elsewhere in this joint proxy statement/prospectus and the accompanying notes to the unaudited pro forma combined financial information. In addition, the selected pro forma data were based on, and should be read in conjunction with, the following historical consolidated financial statements and accompanying notes, which are incorporated by reference into this joint proxy statement/prospectus:

 

   

Separate historical consolidated financial statements of Akebia as of, and for the year ended and six months ended, December 31, 2017 and June 30, 2018, respectively, and the related notes included in Akebia’s Quarterly Report on Form 10-Q for the period ended June 30, 2018 and Akebia’s Annual Report on Form 10-K for the year ended December 31, 2017; and

 

   

Separate historical consolidated financial statements of Keryx as of, and for the year ended and six months ended, December 31, 2017 and June 30, 2018, respectively, and the related notes included in Keryx’s Quarterly Report on Form 10-Q for the period ended June 30, 2018 and Keryx’s Annual Report on Form 10-K for the year ended December 31, 2017.

The selected pro forma data have been prepared by Akebia using the acquisition method of accounting in accordance with the Financial Accounting Standards Board, Accounting Standards Codification (“ASC”) 805, Business Combinations, and uses the fair value concepts defined in ASC 820, Fair Value Measurements and Disclosures, which Akebia has adopted as required. Akebia has been treated as the acquirer in the Merger for accounting purposes. Acquisition accounting requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. Fair value measurements recorded in acquisition accounting are dependent upon certain valuation studies of Keryx’s assets and liabilities and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Accordingly, the pro forma adjustments reflect the assets and liabilities of Keryx at their preliminary estimated fair values which use assumptions that Akebia believes are reasonable based on information that is currently available to it. Differences between these preliminary estimates and the final acquisition accounting will occur, and those differences could have a material impact on the selected pro forma data. The pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed combined financial information prepared in accordance with the rules and regulations of the SEC.

The selected pro forma data have been presented for informational purposes only. The selected pro forma data do not purport to represent the actual results of operations that Akebia and Keryx would have achieved had the companies been combined during the periods presented in the selected financial data and is not intended to project the future results of operations that Akebia may achieve after the Merger is consummated.

 

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The selected pro forma data do not reflect any cost savings that may be realized as a result of the Merger and also do not reflect any restructuring or integration-related costs to achieve those potential cost savings.

Amounts below are presented in thousands, except per share amounts.

 

     For the Six
Months Ended
June 30, 2018
     For the Year
Ended
December 31, 2017
 

Pro Forma Condensed Combined Statements of Operations and Comprehensive Loss Data:

     

Total revenue

   $ 142,223      $ 240,125  

Operating expenses

   $ 281,427      $ 511,661  
  

 

 

    

 

 

 

Loss from continuing operations

   $ (139,204    $ (271,536

Interest income and other income

   $ 2,844      $ 3,759  

Loss before income taxes from continuing operations

   $ (136,360    $ (267,777
  

 

 

    

 

 

 

Net loss from continuing operations

   $ (135,726    $ (267,542

Net loss per share from continuing operations

   $ (1.20    $ (2.59
  

 

 

    

 

 

 

Diluted net loss per share from continuing operations

   $ (1.20    $ (2.59
  

 

 

    

 

 

 

 

     As of
June 30,
2018
 

Pro Forma Condensed Combined Balance Sheet Data:

  

Cash, cash equivalents and current marketable securities

   $ 447,156  

Working capital

   $ 403,950  

Total assets

   $ 956,851  

Other long-term liabilities

   $ 69  

Total liabilities

   $ 324,148  

Combined company shareholders’ equity

   $ 632,703  

 

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

The following table sets forth selected historical and unaudited pro forma combined per share information for Akebia and Keryx.

Historical Per Share Information of Akebia and Keryx. The historical per share information of each of Akebia and Keryx below is derived from the audited consolidated financial statements of each of Akebia and Keryx as of, and for the year ended, December 31, 2017 and the unaudited consolidated financial statements of each of Akebia and Keryx as of, and for the six months ended, June 30, 2018.

Unaudited Pro Forma Combined per Share Data of Akebia. The unaudited pro forma combined per share data of Akebia set forth below gives effect to the Merger under the acquisition method of accounting, as if the Merger had been effective on January 1, 2017, the first day of Akebia’s fiscal year ended December 31, 2017, in the case of net income per share.

The unaudited pro forma combined per share data of Akebia is derived from the audited consolidated financial statements of each of Akebia and Keryx as of, and for the year ended, December 31, 2017, and the unaudited consolidated financial statements of each of Akebia and Keryx as of, and for the six months ended, June 30, 2018.

The acquisition method of accounting is based on Financial Accounting Standards Board, ASC 805, Business Combinations, and uses the fair value concepts defined in ASC 820, Fair Value Measurements and Disclosures, which Akebia has adopted as required. Acquisition accounting requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. Fair value measurements recorded in acquisition accounting are dependent upon certain valuation studies of Keryx’s assets and liabilities and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Accordingly, the pro forma adjustments reflect the assets and liabilities of Keryx at their preliminary estimated fair values. Differences between these preliminary estimates and the final values in acquisition accounting will occur and these differences could have a material impact on the unaudited pro forma combined per share information set forth in the following table.

The unaudited pro forma combined per share data of Akebia does not purport to represent the actual results of operations that Akebia would have achieved had the companies been combined during these periods or to project the future results of operations that Akebia may achieve after consummation of the Merger.

 

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Generally. You should read the below information in conjunction with the selected historical consolidated financial information included elsewhere in this joint proxy statement/prospectus and the historical consolidated financial statements of Akebia and Keryx and related notes that have been filed with the SEC, certain of which are incorporated by reference into this joint proxy statement/prospectus. See “Selected Historical Consolidated Financial Data of Akebia,” “Selected Historical Consolidated Financial Data of Keryx” and “Where You Can Find More Information” beginning on pages 27, 29, and 179, respectively, of this joint proxy statement/prospectus. The unaudited pro forma combined per share data of Akebia is derived from, and should be read in conjunction with, the Akebia and Keryx unaudited pro forma condensed combined financial statements and related notes included in this joint proxy statement/prospectus. See “Akebia and Keryx Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 150 of this joint proxy statement/prospectus.

 

     As of/For the
Six Months
Ended
June 30, 2018
     As of/For the
Year Ended
December 31,
2017
 

Akebia Historical per Common Share Data:

     

Net income—basic

   $ (1.09    $ (1.77

Net income—diluted

   $ (1.09    $ (1.77

Cash dividends paid

     —          —    

Keryx Historical per Common Share Data:

     

Net income from continuing operations—basic

   $ (0.36    $ (1.43

Net income from continuing operations—diluted

   $ (0.36    $ (1.43

Cash dividends paid

     —          —    

Unaudited Pro Forma Combined per Share Data:

     

Net income—basic

   $ (1.20    $ (2.59

Net income—diluted

   $ (1.20    $ (2.59

Cash dividends paid

     —          —    

 

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COMPARATIVE PER SHARE MARKET PRICE AND DIVIDEND INFORMATION

Market Prices

The principal trading market of Akebia Shares is The Nasdaq Global Market and the principal trading market of Keryx Shares is The Nasdaq Capital Market. The following table sets forth, for the calendar periods indicated, the high and low sales prices per Akebia Share and per Keryx Share as reported by The Nasdaq Global Market and The Nasdaq Capital Market, respectively. Akebia Shares are traded under the symbol “AKBA,” and Keryx Shares are traded under the symbol “KERX.”

 

     Akebia Shares      Keryx Shares  
     High      Low      High      Low  

2016:

           

First Quarter

   $ 12.74      $ 7.02      $ 5.74      $ 2.80  

Second Quarter

   $ 9.99      $ 7.00      $ 6.98      $ 4.43  

Third Quarter

   $ 9.38      $ 7.31      $ 7.80      $ 4.03  

Fourth Quarter

   $ 11.07      $ 7.16      $ 6.65      $ 4.11  

2017:

           

First Quarter

   $ 10.70      $ 8.58      $ 6.54      $ 4.47  

Second Quarter

   $ 16.54      $ 8.69      $ 7.49      $ 5.50  

Third Quarter

   $ 19.73      $ 12.78      $ 8.38      $ 6.31  

Fourth Quarter

   $ 20.25      $ 14.07      $ 8.07      $ 4.33  

2018:

           

First Quarter

   $ 15.86      $ 9.29      $ 5.18      $ 3.94  

Second Quarter

   $ 11.60      $ 7.90      $ 5.98      $ 3.30  

Third Quarter (through September 19, 2018)

   $ 11.73      $ 7.32      $ 4.64      $ 2.78  

The following table sets forth the closing sale prices per Akebia Share and per Keryx Share as reported on The Nasdaq Global Market and The Nasdaq Capital Market, respectively, as of June 27, 2018, the last trading day before the public announcement of the Merger Agreement, and as of [ ● ], 2018, the latest practicable date before the filing of this joint proxy statement/prospectus. The table also shows the implied value of the Merger Consideration per Keryx Share on each of the dates, which has been determined by multiplying the closing price of an Akebia Share on each of the dates by the 0.37433 Exchange Multiplier.

 

     Akebia
Shares
     Keryx
Shares
     Implied Value
of Merger
Consideration
 

June 27, 2018

   $ 10.38      $ 4.48      $ 3.89  

[ ● ], 2018

   $ [ ● ]      $ [ ● ]      $ [ ● ]  

The market prices of Akebia Shares and Keryx Shares have fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate from the date of this joint proxy statement/prospectus to the date of the Akebia Special Meeting and the Keryx Special Meeting and the date the Merger is consummated and thereafter. No assurance can be given concerning the market prices of Akebia Shares or Keryx Shares before consummation of the Merger or Akebia Shares after consummation of the Merger.

Holders

As of the close of business on the record date for the Akebia Special Meeting, [ ● ] Akebia Shares, held by [ ● ] holders of record, were outstanding and entitled to vote at the Akebia Special Meeting. As of the close of business on the record date for the Keryx Special Meeting, [ ● ] Keryx Shares, held by [ ● ] holders of record, were outstanding and entitled to vote at the Keryx Special Meeting.

 

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RISK FACTORS

In addition to the other information contained in or incorporated by reference into this joint proxy statement/prospectus, including the matters addressed under “Cautionary Statement Regarding Forward-Looking Statements” of this joint proxy statement/prospectus, Akebia shareholders should carefully consider the following risks in deciding whether to vote for the approval of the Akebia Proposals, and Keryx shareholders should carefully consider the following risks in deciding whether to vote for the approval of the Keryx Proposals. Descriptions of some of these risks can be found in the Quarterly Report for Akebia on Form 10-Q for the period ended June 30, 2018 and the Quarterly Report for Keryx on Form 10-Q for the period ended June 30, 2018, and any amendments thereto, as such risks may be updated or supplemented in each company’s subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, and other filings with the SEC from time to time, which are incorporated by reference into this joint proxy statement/prospectus. You should read carefully this entire joint proxy statement/prospectus and its annexes and exhibits and the other documents incorporated by reference into this joint proxy statement/prospectus. See also “Incorporation of Certain Documents by Reference” and “Where You Can Find More Information” beginning on pages 178 and 179, respectively, of this joint proxy statement/prospectus.

Risks Related to the Merger

Fluctuations in the market price of Akebia Shares will affect the value of the Merger Consideration.

In connection with the closing of the Merger, each Keryx Share issued and outstanding immediately prior to the Effective Time will become the right to receive 0.37433, or the Exchange Multiplier, of Akebia Shares (plus cash in lieu of fractional shares). This Exchange Multiplier will not be adjusted in the event of any change in the market price of Akebia Shares or Keryx Shares and as a result, prior to the Effective Time, Keryx shareholders and Akebia shareholders cannot be sure of the value of the Akebia Shares to be issued in connection with the Merger. Based on the closing price per share of Akebia Shares on The Nasdaq Global Market on [ ● ], 2018, the latest practicable date before the filing of this joint proxy statement/prospectus, the 0.37433 of an Akebia Share that the holders of Keryx Shares will hold immediately following the Effective Time in respect of each Keryx Share they held immediately prior to the Effective Time would have a value of approximately $[ ● ].

The exact dollar value of the Akebia Shares that the Akebia shareholders and the Keryx shareholders will hold upon consummation of the Merger will not be known at the time of the Akebia Special Meeting or the Keryx Special Meeting and may be greater than, the same as or less than the current market prices of Akebia Shares at the time of the Akebia Special Meeting or the Keryx Special Meeting. The market price of the Akebia Shares is subject to general price fluctuations in the market for publicly traded equity securities and has experienced volatility in the past and may vary significantly from the dates of the Akebia Special Meeting and the Keryx Special Meeting. As a result of these fluctuations, the value of the Merger Consideration will also vary. For example, based on the range of closing prices of Akebia Shares during the period from June 27, 2018, the last trading day before public announcement of the Merger, through [ ● ], 2018, the latest practicable trading date before the filing of this joint proxy statement/prospectus, the Exchange Multiplier represented a value ranging from a low of $[ ● ] to a high of $[ ● ] for each Keryx Share.

Stock price changes may result from a variety of factors, including general market, industry and economic conditions, changes in the respective businesses, operations and prospects of Keryx and Akebia, regulatory considerations, results of the Keryx Special Meeting and the Akebia Special Meeting, announcements with respect to the Merger or any of the foregoing, and other factors beyond the control of Keryx or Akebia. You should obtain current market price quotations for Keryx Shares and for Akebia Shares, but as indicated above, the prices at the time the Merger is consummated may be greater than, the same as or less than such price quotations.

 

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The Merger may not be consummated unless important conditions are satisfied or waived and there can be no assurance that the Merger will be consummated.

The Merger Agreement contains a number of conditions that must be satisfied or waived (to the extent permitted by applicable law) to consummate the Merger. Those conditions include, among others:

 

   

approval of the Keryx Merger Proposal by the Keryx shareholders;

 

   

approval of the Akebia Share Issuance Proposal by the Akebia shareholders;

 

   

approval for listing on The Nasdaq Global Market of the Akebia Shares to be issued to Keryx shareholders in connection with the Merger, subject to official notice of issuance;

 

   

receipt of the requisite antitrust approval;

 

   

the absence of any law or order prohibiting the Merger; and

 

   

the effectiveness of the registration statement of which this joint proxy statement/prospectus is a part.

These conditions to the consummation of the Merger may not be satisfied or waived (to the extent permitted by applicable law) and, as a result, the Merger may not be consummated at the time expected, or at all. For additional information regarding the conditions to the Merger, see “The Merger Agreement—Conditions to Consummation of the Merger” beginning on page 135 of this joint proxy statement/prospectus.

In addition, Keryx or Akebia may elect to terminate the Merger Agreement in certain other circumstances. See “The Merger Agreement—Termination of the Merger Agreement” beginning on page 146 of this joint proxy statement/prospectus.

The Merger Agreement contains provisions that could discourage a potential competing acquirer of either Keryx or Akebia.

The Merger Agreement contains “no shop” provisions that restrict each of Akebia’s and Keryx’s ability to solicit, initiate or knowingly encourage and induce, or take any other action designed to facilitate competing third-party proposals relating to a merger, reorganization or consolidation of the company or an acquisition of the company’s stock or assets. In addition, the other party generally has an opportunity to offer to modify the terms of the Merger in response to any competing acquisition proposals before the board of directors of the company that has received a third-party proposal may withdraw or qualify its recommendation with respect to the Merger. If the Merger Agreement is terminated in connection with the pursuit of a third-party transaction by one of the parties, that party will be required to pay a termination fee of $22 million to the other party. See “The Merger Agreement—No Solicitation,” “The Merger Agreement—Termination of the Merger Agreement” and “The Merger Agreement—Termination Fees and Expenses” beginning on pages 141, 146, and 147, respectively, of this joint proxy statement/prospectus.

These provisions could discourage a potential third-party acquirer that might have an interest in acquiring all or a significant portion of Akebia or Keryx from considering or proposing an acquisition, even if it were prepared to pay consideration with a higher per share cash or market value than the market value proposed to be received or realized in the Merger. A potential third-party acquirer maintaining interest in the face of these provisions might propose to pay a lower price to the shareholders than it might otherwise have proposed to pay because of the added expense of the $22 million termination fee that may become payable in certain circumstances.

If the Merger Agreement is terminated and either Akebia or Keryx determines to seek another business combination, it may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger.

 

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The pendency of the Merger could materially adversely affect the business, financial condition, results of operations or cash flows of Keryx or Akebia.

The announcement and pendency of the Merger could disrupt Keryx’s or Akebia’s businesses, in any of the following ways, among others:

 

   

Keryx’s or Akebia’s employees may experience uncertainty about their future roles with the combined company, which might adversely affect each company’s ability to retain and hire key managers and other employees;

 

   

the attention of Keryx management or Akebia management may be directed toward completion of the Merger, integration planning and transaction-related considerations and may be diverted from the company’s day-to-day business operations and, following the completion of the Merger, the attention of the combined company’s management may also be diverted to such matters;

 

   

vendors, suppliers, business partners or others may seek to modify or terminate their business relationship with Keryx or Akebia or the combined company following completion of the Merger;

 

   

Keryx or Akebia, or the combined company following completion of the Merger, and their respective directors could become subject to lawsuits relating to the Merger; and

 

   

Keryx or Akebia may experience negative reactions from their shareholders, patients enrolled in their studies and the medical community, among others.

These disruptions could be exacerbated by a delay in the completion of the Merger or termination of the Merger Agreement. Additionally, if the Merger is not consummated, each company will have incurred significant costs and diverted the time and attention of management. A failure to consummate the Merger may also result in negative publicity, reputational harm, litigation against Keryx or Akebia or their respective directors and officers, and a negative impression of the companies in the financial markets. The occurrence of any of these events individually or in combination could have a material adverse effect on either or both companies’ financial statements and stock price.

In addition, the Merger Agreement restricts Akebia and Keryx from taking certain actions until the Effective Time without the consent of the other party, including, among others: the payment of dividends; the issuance of equity (including certain equity incentive awards); certain increases to employee compensation and benefits; capital expenditures; the incurrence of indebtedness; acquisitions and divestitures; and the entry into or amending certain material contracts. Akebia and Keryx are required to conduct business in the ordinary course consistent with past practice. The restrictive covenants, which are subject to various specific exceptions, may prevent Akebia or Keryx from pursuing attractive business opportunities that may arise prior to the consummation of the Merger. Although Akebia and Keryx may be able to pursue such activities with the other company’s consent, the other company may not be willing to provide its consent. For a description of the restrictive covenants applicable to Akebia and Keryx, see “The Merger Agreement—Conduct of Business Pending the Merger” beginning on page 138 of this joint proxy statement/prospectus.

Keryx directors and executive officers and Akebia directors and executive officers have interests in the Merger that may be different from, or in addition to, the interests of Keryx shareholders and Akebia shareholders.

Certain of the directors and executive officers of Keryx and certain of the directors and executive officers of Akebia negotiated the terms of the Merger Agreement and these individuals have interests in the Merger that may be different from, or in addition to, those of Keryx shareholders and Akebia shareholders, respectively. These interests include, but are not limited to, the continued service of certain of these individuals as directors and executive officers of Akebia after the date of the consummation of the Merger (the “Closing Date”), the treatment in the Merger of Keryx Restricted Shares, Keryx Options and certain other compensation arrangements with the Keryx and Akebia directors and executive officers, and provisions in the Merger Agreement regarding continued indemnification of and advancement of expenses of the directors and executive officers of Keryx and

 

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Akebia. Keryx shareholders and Akebia shareholders should be aware of these interests when they consider their respective Boards of Directors’ recommendations that they vote in favor of the Merger-related proposals.

The members of the Keryx Board were aware of and considered these interests relating to Keryx, among other matters, in evaluating the Merger Agreement and the Merger, and in recommending that Keryx shareholders approve the Keryx Proposals. The interests of Keryx directors and executive officers are described under “The Merger—Interests of Keryx’s Directors and Executive Officers in the Merger” beginning on page 120 of this joint proxy statement/prospectus.

The members of the Akebia Board were aware of and considered these interests relating to Akebia, among other matters, in evaluating the Merger Agreement and the Merger, and in recommending that Akebia shareholders approve the Akebia Proposals. The interests of Akebia directors and executive officers are described in more detail under “The Merger—Interests of Akebia’s Directors and Executive Officers in the Merger” beginning on page 127 of this joint proxy statement/prospectus.

Following the consummation of the Merger, the composition of the board of directors and management of the combined company will be different from the composition of the current board of directors and management of each of Akebia and Keryx and Akebia’s current shareholders will not have a majority ownership and voting interest in the combined company, which may affect the strategy and operations of the combined company.

Pursuant to the Merger Agreement, following the consummation of the Merger, the Combined Board will consist of (i) [ ● ], [ ● ], [ ● ], and [ ● ], who will be the Continuing Directors; (ii) [ ● ], [ ● ], [ ● ], [ ● ], and [ ● ], who will be the Keryx Board Designees; and (iii) [ ● ], who will be the Additional Director who will serve as the Chairperson of the Combined Board as of the Effective Time.

As of the Effective Time, the Continuing Directors, the Keryx Board Designees, and the Additional Director will be allocated among three classes of directors as follows:

 

   

Class II will consist of one Continuing Director and two Keryx Board Designees and will be up for re-election in 2019;

 

   

Class III will consist of the Additional Director, one Continuing Director, and one Keryx Board Designee and will be up for re-election in 2020; and

 

   

Class I will consist of two Continuing Directors and two Keryx Board Designees and will be up for re-election in 2021.

At the Effective Time, Akebia will take all necessary action to cause Mr. Butler to continue as Chief Executive Officer of the combined company. In the event that Mr. Butler is not the Chief Executive Officer of Akebia immediately prior to the Effective Time, Akebia will select another individual reasonably acceptable to Keryx to be appointed as Chief Executive Officer of the combined company as of the Effective Time.

In addition to Mr. Butler, the remainder of Akebia’s current executive leadership team is expected to continue to serve in the same roles in the combined company after the consummation of the Merger. Akebia’s current executive leadership team also includes: Jason A. Amello, Akebia’s Senior Vice President, Chief Financial Officer, and Treasurer; Michel Dahan, Akebia’s Senior Vice President, Chief Business Officer; Rita Jain, M.D., Akebia’s Senior Vice President, Chief Medical Officer; Nicole R. Hadas, Akebia’s Senior Vice President, General Counsel, and Secretary; Karen Tubridy, Akebia’s Senior Vice President, Chief Development Officer; and Tamara Dillon, Akebia’s Senior Vice President, Human Resources.

This composition of the Combined Board may affect the combined company’s business strategy and operating decisions following the consummation of the Merger, as compared to those of Akebia and Keryx prior to the Merger. In addition, there can be no assurances that the Combined Board will function effectively as a team and that any differences or difficulties, should they arise, will not have an adverse effect on the combined company’s business or results after the Closing Date.

 

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In addition, immediately following completion of the Merger and the issuance of the Akebia Shares to the Keryx shareholders at the Effective Time, Akebia’s current shareholders in the aggregate will not have a majority ownership and voting interest in the combined company, which may result in Akebia shareholders having less influence on the combined company’s management and policies. Akebia’s shareholders currently have the right to vote for the election of directors to Akebia’s Board of Directors and on other matters affecting Akebia. Immediately following completion of the Merger, based on the companies’ fully diluted market capitalizations as of the signing of the Merger Agreement and also taking into account the Additional Shares expected to be issued to Baupost in connection with the conversion under that certain Notes Conversion Agreement prior to consummation of the Merger, Akebia’s shareholders and Keryx’s shareholders are expected to own approximately 49.4% and 50.6%, respectively, of the combined company’s outstanding shares. As a result, current Akebia shareholders may have less influence on the combined company’s management and policies than they currently have.

The opinions of Keryx’s and Akebia’s financial advisors do not reflect changes in circumstances that may have occurred or that may occur between the signing of the Merger Agreement and the consummation of the Merger.

The opinion rendered to the Keryx Board by MTS Securities, and the opinions rendered to the Akebia Board by J.P. Morgan and Evercore, were provided in connection with, and at the time of, the Keryx and Akebia Boards’ respective evaluations of the Merger. These opinions were based on the respective financial analyses performed, which considered market and other conditions then in effect, and financial forecasts and other information made available to them, as of the date of their respective opinions, which may have changed, or may change, after the date of the opinions. Neither the Keryx Board nor the Akebia Board has obtained updated opinions from their respective financial advisors as of the date of this joint proxy statement/prospectus or as of any other date, nor does either expect to receive updated, revised or reaffirmed opinions prior to the consummation of the Merger. Changes in the operations and prospects of Keryx or Akebia, general market and economic conditions and other factors that may be beyond the control of Keryx or Akebia, and which changes were not taken into account by Keryx’s and Akebia’s financial advisors in rendering their respective opinions, may significantly alter the value of Keryx or Akebia or the prices of Keryx Shares or Akebia Shares by the time the Merger is consummated. The opinions do not speak as of the time the Merger will be consummated or as of any date other than the date of such opinions. Because there are no plans for Keryx’s and Akebia’s financial advisors to update their opinions, the opinions do not address the fairness of the Exchange Multiplier or the Merger Consideration, as applicable, from a financial point of view, at any time other than the time such opinions were issued, even though the Keryx Board’s recommendation that Keryx shareholders vote “FOR” the Keryx Proposals and the Akebia Board’s recommendation that Akebia shareholders vote “FOR” the Akebia Proposals are made as of the date of this joint proxy statement/prospectus. For a description of the opinions that the Keryx Board and the Akebia Board received from their respective financial advisors, see “The Merger—Opinion of Keryx’s Financial Advisor—MTS Securities, LLC,” “The Merger—Opinion of Akebia’s Financial Advisor—Evercore Group L.L.C.,” and “The Merger—Opinion of Akebia’s Financial Advisor—J.P. Morgan Securities LLC” beginning on pages 90, 107, and 113, respectively, of this joint proxy statement/prospectus.

Failure to consummate the Merger could negatively impact respective future stock prices, operations and financial results of Keryx and Akebia.

If the Merger is not consummated for any reason, Keryx and Akebia may be subjected to a number of material risks, including the following:

 

   

a decline in the market prices of Keryx Shares or Akebia Shares to the extent that their current market prices reflect a market assumption that the Merger will be consummated and will be beneficial to the value of the business of Akebia after the Closing Date;

 

   

having to pay certain costs related to the proposed Merger, such as legal, accounting, financial advisory, printing and mailing fees, which must be paid regardless of whether the Merger is consummated;

 

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addressing the consequences of operational decisions made since the signing of the Merger Agreement, including because of restrictions on Keryx’s or Akebia’s operations imposed by the terms of the Merger Agreement and decisions to delay or defer capital expenditures;

 

   

returning the focus of management and personnel to operating Keryx or Akebia, as applicable, on a standalone basis, without any of the benefits expected to have been provided by the consummation of the Merger; and

 

   

negative reactions from their respective shareholders, suppliers, employees, patients enrolled in our studies and the medical community.

In addition to the above risks, Keryx or Akebia may be required, under certain circumstances, to pay a termination fee of up to $22 million to the other party, and in some cases reimburse the other party’s expenses up to $6 million, which may materially adversely affect Keryx’s or Akebia’s financial condition, as applicable. The business of Keryx or Akebia may be adversely impacted by the failure to pursue other beneficial opportunities due to the focus of Keryx and Akebia management on the Merger. A failure to consummate the Merger may also result in negative publicity, reputational harm, litigation against Keryx or Akebia or their respective directors and officers, and a negative impression of the companies in the financial markets.

If the Merger is not consummated, we cannot assure the Akebia shareholders or the Keryx shareholders that these risks will not materialize and will not materially adversely affect the business, financial results and stock price of the respective companies.

Keryx shareholders and Akebia shareholders will not be entitled to appraisal rights in the Merger.

Appraisal rights are statutory rights that, if applicable under law, enable shareholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to shareholders in connection with the extraordinary transaction.

Under the DGCL § 262(b), shareholders do not have appraisal rights if the shares of stock they hold, as of the record date for determination of shareholders entitled to vote at the meeting of shareholders to act upon a merger, are either (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders. Notwithstanding the foregoing, appraisal rights are available if shareholders are required by the terms of the Merger Agreement to accept for their shares anything other than (a) shares of stock of the surviving corporation, (b) shares of stock of another corporation that will either be listed on a national securities exchange or held of record by more than 2,000 holders, (c) cash instead of fractional shares or (d) any combination of clauses (a) through (c).

Because Akebia Shares are listed on The Nasdaq Global Market, a national securities exchange, and are expected to continue to be so listed on the record date for the Akebia Special Meeting, Akebia shareholders will not be entitled to appraisal rights in the Merger with respect to their Akebia Shares. Similarly, Keryx Shares are listed on The Nasdaq Capital Market and are expected to continue to be so listed on the record date for the Keryx Special Meeting. Because holders of Keryx Shares will also receive Akebia Shares in the Merger and cash in lieu of fractional shares, holders of Keryx Shares will also not be entitled to appraisal rights in the Merger with respect to their Keryx Shares.

Financial projections regarding Keryx and Akebia may not prove accurate.

In connection with the Merger, Keryx and Akebia prepared and considered internal financial forecasts for Keryx and Akebia. These financial projections are based on several assumptions, including regarding future operating cash flows, expenditures and income of Keryx and Akebia, including benefits to be realized from the Merger. These financial projections were not prepared with a view to public disclosure, are subject to significant

 

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economic, competitive, industry and other uncertainties and may not be achieved in full, within projected timeframes or at all. The failure of Keryx or Akebia to achieve projected results could have a material adverse effect on the price of the Akebia Shares, the combined company’s financial position after the Closing Date, and the combined company’s ability to pay dividends, and/or pay dividends at or above the rate currently paid by Akebia or Keryx, following the consummation of the Merger.

The Merger may disrupt attention of Keryx management and Akebia management from ongoing business operations.

Each of Keryx and Akebia has expended, and expects to continue to expend, significant management resources to consummate the Merger. The attention of each company’s management may be diverted away from the day-to-day operations of the businesses of Keryx and Akebia, respectively, including implementing initiatives to improve performance, execution of existing business plans and pursuing other beneficial opportunities, in an effort to consummate the Merger. This diversion of management resources could disrupt Keryx’s or Akebia’s operations and may have an adverse effect on the respective businesses, financial conditions, results of operations and cash flows of the two companies or the combined company after the Closing Date.

The market price for Akebia Shares following completion of the Merger will continue to fluctuate and may be affected by factors different from those that historically have affected Akebia Shares and Keryx Shares.

Following the completion of the Merger, Akebia shareholders and Keryx shareholders will be shareholders in the combined company. Keryx’s business differs in important respects from that of Akebia and the combined company’s business will differ from that of Akebia and Keryx prior to the completion of the Merger. Accordingly, the results of operations of the combined company and the market price of Akebia Shares after the completion of the Merger may be affected by factors different from those currently affecting the independent results of operations of each of Akebia and Keryx. This joint proxy statement/prospectus describes the businesses of Keryx and Akebia and incorporates by reference important information regarding the businesses of Keryx and Akebia and also describes important factors to consider in connection with those businesses and the business of the combined company.

Risks Related to the Business of the Combined Company After the Merger

Combining the two companies may be more difficult, costly or time consuming than expected, and Akebia may not realize all of the anticipated benefits of the Merger.

Keryx and Akebia have operated and, until the consummation of the Merger, will continue to operate, independently. The success of the Merger will depend on, among other things, the combined company’s ability to integrate the businesses of Keryx and Akebia in a timely fashion. Additionally, the combined company may not be able to successfully achieve the level of cost savings, revenue enhancements and synergies that it expects. If the combined company is not able to successfully achieve these objectives, the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected. In addition, failure to successfully integrate the businesses in the expected timeframe may adversely affect the combined company’s business, financial condition, results of operations or cash flows.

In addition, the combined operation of two businesses may be a complex, costly and time-consuming process. The difficulties of combining the operations of the companies include, among others:

 

   

the diversion of management attention to integration matters;

 

   

difficulties in integrating functions, personnel and systems;

 

   

difficulties in assimilating employees and in attracting and retaining key personnel;

 

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difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the combination;

 

   

challenges of managing a larger combined company following the Merger, including challenges of conforming standards, controls, procedures and accounting and other policies and compensation structures;

 

   

declines in Akebia’s results of operations, financial condition or cash flows;

 

   

a decline in the market price of Akebia Shares;

 

   

contingent liabilities that are larger than expected;

 

   

potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the Merger;

 

   

disruption of existing relationships, patients, doctors, business partners, and other constituencies; and

 

   

the disruption of, or the loss of momentum in, ongoing research and development, including Akebia’s ongoing clinical trials.

Many of these factors are outside the control of Keryx and Akebia, and any one of them could result in increased costs, decreased expected revenues and diversion of management time and energy, which could materially impact the business, financial condition, results of operations and cash flows of the combined company. These factors could cause dilution to the earnings per share of the combined company, decrease or delay the expected accretive effect of the Merger and negatively impact the price of Akebia Shares. As a result, it cannot be assured that the combined company will realize the full benefits anticipated from the Merger within the anticipated time frames, or at all.

In addition, following the Merger, Akebia will become responsible for Keryx’s liabilities and obligations, including with respect to legal, financial, regulatory, and compliance matters. These obligations will result in additional cost and investment by Akebia and, if Akebia has underestimated the amount of these costs and investments or if Akebia fails to satisfy any such obligations, Akebia may not realize the anticipated benefits of the Merger. Further, it is possible that there may be unknown, contingent or other liabilities or problems that may arise in the future, the existence and/or magnitude of which Akebia was previously unaware. Any such liabilities or problems could have an adverse effect on the combined company’s business, financial condition, results of operations or cash flows.

Even if the Merger is successfully consummated and the businesses integrated, there can be no assurance that the Merger will result in the realization of the full benefit of the anticipated synergies and cost savings or that these benefits will be realized within the expected time frames or at all. Difficulties in integrating the businesses could harm the reputation of the combined company. In addition, by engaging in the Merger, Akebia may forego or delay pursuit of other opportunities that may have proven to have greater commercial potential.

Baupost, Keryx’s current largest shareholder, may have significant influence over the combined company following the Merger and may cause the combined company to take actions that may not be, or refrain from taking actions that may be, in the combined company’s best interest or the best interest of its other shareholders.

Baupost is the owner of approximately [ ● ]% of the outstanding Keryx Shares as of the record date for the Keryx Special Meeting. Pursuant to the Notes Conversion Agreement, Baupost is expected to convert all of the existing Convertible Notes it holds into Keryx Shares and receive the Additional Shares. Following Baupost’s conversion of the Convertible Notes and the issuance to Baupost of the Additional Shares, Baupost is expected to beneficially own approximately [ ● ]% of Keryx Shares. After consummation of the Merger, Baupost is expected to be the beneficial owner of approximately [ ● ]% of shares of the combined company. Baupost, through its

 

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equity interests, may have significant influence over matters submitted to shareholders of the combined company for approval and other corporate actions, such as:

 

   

the election of directors;

 

   

the timing and manner in which the combined company raises additional funds;

 

   

the timing and manner of dividend distributions;

 

   

the approval of contracts between the combined company and Baupost or its respective affiliates, if any, which could involve conflicts of interest;

 

   

open market purchase programs or other purchases of Akebia Shares;

 

   

to delay, defer or prevent a change in who controls the combined company; and

 

   

other matters that may adversely affect the market price of Akebia Shares.

Moreover, because large shareholders have potential power to direct or influence the combined company’s corporate actions, the combined company may be required to engage in transactions that may not be agreeable to or in the best interest of its other shareholders.

Keryx and Akebia will incur substantial direct and indirect costs as a result of the Merger and the combined company will incur substantial direct and indirect costs in connection with combining the business of Keryx and Akebia following the Merger.

Keryx and Akebia will incur substantial expenses in connection with and as a result of consummating the Merger, and over a period of time following the consummation of the Merger, Akebia also expects to incur substantial expenses as a combined company in connection with coordinating and, in certain cases, combining the businesses, operations, policies and procedures of Keryx and Akebia. A portion of the transaction costs related to the Merger will be incurred regardless of whether the Merger is consummated. While Keryx and Akebia have assumed that a certain level of transaction expenses will be incurred, factors beyond Keryx’s and Akebia’s control could affect the total amount or the timing of these expenses. Although many of the expenses that will be incurred, by their nature, are difficult to estimate accurately, the current estimate of the aggregate expenses that will be incurred by Keryx and Akebia is approximately $30.5 million, which is subject to change. These expenses may exceed the costs historically borne by Keryx and Akebia. These expenses could adversely affect the financial condition, results of operations and cash flows of the combined company following the consummation of the Merger.

Akebia’s actual financial position and results of operations after the Merger as a combined company may differ materially from the unaudited pro forma financial information included in this joint proxy statement/prospectus.

The unaudited pro forma financial information included in this joint proxy statement/prospectus is presented for informational purposes only and may not be an indication of what Akebia’s financial position or results of operations would have been had the Merger been consummated on the dates indicated. The unaudited pro forma financial information has been derived from the audited and unaudited historical financial statements of Akebia and Keryx and certain adjustments and assumptions regarding Akebia after giving effect to the Merger. The assets and liabilities of Keryx have been measured at fair value based on various preliminary estimates using assumptions that Akebia and Keryx management believes are reasonable, utilizing information currently available. These fair value measurements can be highly subjective and the reasonable application of measurement principles may result in a range of alternative estimates using the same facts and circumstances. These estimates, which require extensive use of accounting estimates and management judgment, may be revised as additional information becomes available and as additional analyses are performed. Differences between preliminary estimates in the unaudited pro forma financial information and the final acquisition accounting will occur and could have a material impact on the unaudited pro forma financial information and the combined company’s financial position and future results of operations.

 

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Furthermore, during the preparation of the unaudited pro forma condensed combined financial statements, Akebia was aware of one material difference between Akebia’s accounting policies and the accounting policies of Keryx related to revenue recognition. As further described in Note 3, Akebia adopted ASC 606 using the full retrospective transition method, whereas Keryx adopted ASC 606 using the modified retrospective method. Following the Merger, the combined company will conduct a more detailed review of Keryx’s accounting policies in an effort to determine if differences in accounting policies require restatement or reclassification of results of operations or reclassification of assets or liabilities to conform to Akebia’s accounting policies and classifications. As a result of that review, the combined company may identify other differences among the accounting policies of the companies that, when conformed, could have a material impact on the unaudited pro forma condensed combined financial statements contained in this joint proxy statement/prospectus.

In addition, the assumptions used in preparing the unaudited pro forma financial information may not prove to be accurate, and other factors may affect the combined company’s financial condition or results of operations following the consummation of the Merger. Any material variance from the pro forma financial information may cause significant variations in the market price of the Akebia Shares. See “Akebia and Keryx Unaudited Pro Forma Condensed Combined Financial Statements” beginning on page 150 of this joint proxy statement/prospectus.

Sales of Akebia Shares after the completion of the Merger may cause the market price of Akebia Shares to fall.

Based on the number of outstanding Keryx Shares as of the record date for the Keryx Special Meeting, Akebia would issue approximately [ ● ] Akebia Shares as Merger Consideration. Keryx shareholders may decide not to hold the Akebia Shares they receive in the Merger and other Keryx shareholders, such as funds with limitations on the amount of stock they are permitted hold in individual issuers, may be required to sell Akebia Shares that they receive in the Merger. Such sales, or market perception of such sales, of Akebia Shares could result in higher than average trading volume following the closing of the Merger and may cause the market price for Akebia Shares to decline. Such sales may take place promptly following the Merger or at other times in the future.

The Merger will be dilutive to Akebia’s earnings per share.

Because Akebia Shares will be issued in connection with the Merger, the Merger will be dilutive to Akebia’s earnings per share. Future events and conditions could increase the dilution that is currently projected, including adverse changes in market conditions, additional transaction and integration-related costs and other factors such as the failure to realize some or all of the benefits anticipated in the Merger. Any dilution of, or delay of any accretion to, Akebia’s earnings per share could cause the price of Akebia’s Shares to decline or grow at a reduced rate.

Akebia is expected to record goodwill and other intangible assets as a result of the Merger, and such goodwill and other intangible assets could become impaired in the future.

Accounting standards in the United States require that one party to the Merger be identified as the acquirer. In accordance with these standards, the Merger will be accounted for as an acquisition of Keryx Shares by Akebia and will follow the acquisition method of accounting for business combinations. The Akebia assets and liabilities will be consolidated with those of Keryx on Akebia’s financial statements. The combined company will measure Keryx’s assets acquired and liabilities assumed at their fair values, including net tangible and identifiable intangible assets acquired and liabilities assumed, as of the consummation of the Merger. The excess of the purchase price over the fair value of Keryx’s assets and liabilities will be recorded as goodwill. Akebia currently estimates that the Merger will add approximately $289.0 million of goodwill and other intangible assets.

 

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In accordance with GAAP, the combined company will be required to periodically assess these assets to determine if they are impaired. To the extent goodwill or other intangible assets become impaired, the combined company may be required to incur material charges relating to such impairment. Such a potential impairment charge could have a material impact on future operating results and statements of financial position of the combined company.

If third parties threaten to terminate, terminate or alter existing contracts or relationships with Akebia or Keryx, including the licensor of certain intellectual property relating to Keryx’s product, Auryxia, Akebia’s and Keryx’s respective businesses may be materially harmed.

Keryx has contracts with customers, suppliers, vendors, landlords, licensors and other business partners which may require Keryx to obtain consents from these other parties in connection with the Merger. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenues and may lose rights that are material to the business of the combined company. In addition, third parties with whom Akebia or Keryx currently have relationships may terminate or otherwise reduce the scope of their relationship with either party in anticipation of the Merger. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the Merger. The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the Merger or the termination of the Merger Agreement.

As more fully described in its public filings made with the SEC, Keryx has licensed and sublicensed certain intellectual property rights covering Auryxia from a third-party, Panion & BF Biotech, Inc., or Panion, pursuant to an amended and restated license agreement between Keryx and Panion. Panion has the right to terminate the license agreement upon, among other things, the occurrence of a breach of a material provision of the license agreement that is not cured within ninety days of written notice.

On September 21, 2018, Keryx notified Akebia that, following announcement of the Merger, Panion notified Keryx in writing that the license agreement will terminate on November 21, 2018 if Keryx does not cure the breach alleged by Panion that Keryx failed to use commercially reasonable best efforts to commercialize Auryxia outside the United States. Panion proposed amendments to the license agreement, including additional payments by Keryx to Panion to cure the alleged breach, and expressed an interest in reaching agreement with Keryx on this issue. Keryx is confident that it has satisfied its development obligations under the license agreement and that the alleged breach claims asserted by Panion are, therefore, without merit. The parties are in discussions and believe this will be resolved amicably.

If it is determined that Keryx has breached a material provision of the license agreement, Panion could terminate the agreement and Keryx would lose certain intellectual property rights covering Auryxia.

Risks Related to Keryx’s Business

You should read and consider the risk factors specific to Keryx’s business that will also affect Akebia after the Merger. These risks are described in Part I, Item 1A of Keryx’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and any amendments thereto, as such risks have been or may be updated or supplemented in Keryx’s subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, and in other documents that are incorporated by reference into this joint proxy statement/prospectus. See “Incorporation of Certain Documents by Reference and Where You Can Find More Information” beginning on pages 178 and 179, respectively, of this joint proxy statement/prospectus.

Risks Related to Akebia’s Business

You should read and consider the risk factors specific to Akebia’s business that will also affect Akebia after the Merger. These risks are described in Part II, Item 1A of Akebia’s Quarterly Report on Form 10-Q for the period ended June 30, 2018, and any amendments thereto, as such risks have been or may be updated or supplemented in Akebia’s subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K,

 

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and in other documents that are incorporated by reference into this joint proxy statement/prospectus. See “Incorporation of Certain Documents by Reference and Where You Can Find More Information” beginning on pages 178 and 179, respectively, of this joint proxy statement/prospectus.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This joint proxy statement/prospectus contains certain forward-looking statements within the meaning of the federal securities law. Such statements are based upon current plans, estimates and expectations that are subject to various risks and uncertainties. The inclusion of forward-looking statements should not be regarded as a representation that such plans, estimates and expectations will be achieved. Words such as “anticipate,” “expect,” “project,” “intend,” “believe,” “may,” “will,” “should,” “plan,” “could,” “target,” “contemplate,” “estimate,” “position,” “predict,” “potential,” “opportunity” and words and terms of similar substance used in connection with any discussion of future plans, actions or events identify forward-looking statements. All statements, other than historical facts, including statements regarding the expected timing of the closing of the Merger; the ability of the parties to complete the Merger considering the various closing conditions; the potential benefits of vadadustat; the expected timing of Akebia’s Otsuka funding option; the timing of availability of top-line results from clinical trials of vadadustat; the composition of the Combined Board; the assigned classes of the members of the Combined Board; the financial profile of the combined company following consummation of the Merger; the potential to establish a new standard of care; the expected timing of enrollment in clinical trials; revenue growth; the market opportunity, commercial momentum and growth potential of Auryxia; the expected benefits of the Merger, such as efficiencies, the expected management team, cost savings and the expected timing thereof, synergies, the ability to deliver value, the potential to maximize sales, the ability to build launch momentum for vadadustat in the United States, enhanced revenues, growth potential, market profile, financial strength, and financial flexibility, the potential for accelerating profitability and reducing capital needs; the competitive ability and position of the combined company; the strategy of the combined company; the expected cash position of the combined company; and any assumptions underlying any of the foregoing, are forward-looking statements. Important factors that could cause actual results to differ materially from Akebia’s and Keryx’s plans, estimates or expectations could include, but are not limited to:

 

   

Keryx or Akebia may be unable to obtain shareholder approval as required to consummate the Merger;

 

   

Conditions to the closing of the Merger may not be satisfied;

 

   

The Merger may involve unexpected costs, liabilities, or delays;

 

   

The effect of the announcement of the Merger on the ability of Keryx or Akebia to retain and hire key personnel and maintain relationships with customers, suppliers, and others with whom Keryx or Akebia does business, or on Keryx’s or Akebia’s operating results, current plans, operations, and business generally;

 

   

Keryx’s or Akebia’s respective businesses may suffer as a result of uncertainty surrounding the Merger and disruption of management’s attention due to the Merger;

 

   

The outcome of any legal proceedings related to the Merger;

 

   

Keryx or Akebia may be adversely affected by other economic, industry, business, and/or competitive factors;

 

   

The occurrence of any event, change, or other circumstances that could give rise to the termination of the Merger Agreement;

 

   

The risk that Akebia or Keryx may be unable to obtain governmental and regulatory approvals required for the Merger or that required governmental or regulatory approvals may delay the Merger or result in the imposition of conditions that could reduce the anticipated benefits from the Merger or cause the parties to abandon the Merger;

 

   

Risks that the anticipated benefits of the Merger or other commercial opportunities may otherwise not be fully realized or may take longer to realize than expected;

 

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The ability to implement integration plans for the combined company following completion of the Merger and the ability to recognize the anticipated growth, and cost savings and benefits of the Merger;

 

   

The impact of legislative, regulatory, competitive, and technological changes;

 

   

Expectations for ongoing and future clinical trials, the timing, and potential outcomes of clinical studies and interactions with regulatory authorities;

 

   

The amount of any costs, fees, expenses, impairments, and charges related to the Merger;

 

   

Changes in the anticipated tax treatment of the Merger;

 

   

The impact of Akebia shareholders having a reduced ownership and voting interest after the Merger and less influence over management;

 

   

The failure of the Merger to be accretive and potential dilution to the combined company’s earnings per share;

 

   

The uncertainty of the value of the Merger Consideration that Keryx shareholders would receive in the Merger due to the fixed Exchange Multiplier and a potential fluctuation in the market price of Akebia Shares;

 

   

The possibility of changes in circumstances between the date of the signing of the Merger Agreement and the consummation of the Merger that is not reflected in the fairness opinion obtained by the Keryx Board and Akebia Board;

 

   

The effect of restrictions placed on Keryx’s and Akebia’s business activities and the limitations on Keryx’s and Akebia’s ability to pursue alternatives to the Merger pursuant to the Merger Agreement;

 

   

The possibility of actual results of operations, cash flows and financial position following completion of the Merger materially differing from the unaudited pro forma condensed combined financial information contained in this joint proxy statement/prospectus; and

 

   

Other risks to the consummation of the Merger, including the risk that the Merger will not be consummated within the expected time period or at all.

A detailed discussion of risks related to the Merger is included above under the heading “Risk Factors” beginning on page 36 of this joint proxy statement/prospectus. A detailed discussion of risks related to Akebia’s business is included in the section entitled “Risk Factors” in Akebia’s Quarterly Report on Form 10-Q for the period ended June 30, 2018 filed with the SEC on August 8, 2018 and available at www.sec.gov and www.akebia.com under “Investors”, as well as any subsequently filed amendments or Current Reports on Form 8-K or other filings with the SEC updating or supplementing such factors. A detailed discussion of risks related to Keryx’s business is included in the section entitled “Risk Factors” in Keryx’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the SEC on February 21, 2018 and any amendments thereto and available at www.sec.gov and www.keryx.com under “Investors & Media” as well as any subsequently filed Quarterly Reports on Form 10-Q or Current Reports on Form 8-K or other SEC filings updating or supplementing such factors. Actual results may differ materially from those projected in the forward looking statements. Any forward looking statements in this joint proxy statement/prospectus are only made as of the date of this joint proxy statement/prospectus, unless otherwise specified, and, except as required by law, neither Akebia nor Keryx undertakes any obligation to update or revise any forward looking statements. See “Incorporation of Certain Documents by Reference and Where You Can Find More Information” beginning on pages 178 and 179, respectively, of this joint proxy statement/prospectus.

 

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THE KERYX SPECIAL MEETING

Date, Time, and Place of the Keryx Special Meeting

The Keryx Special Meeting will be held at [ ● ] local time, on [ ● ], 2018, at the offices of Goodwin Procter LLP, located at 100 Northern Avenue, Boston, Massachusetts 02210. On or about [ ● ], 2018, Keryx commenced mailing this joint proxy statement/prospectus and the enclosed form of proxy card to its shareholders entitled to vote at the Keryx Special Meeting.

Purpose of the Keryx Special Meeting

At the Keryx Special Meeting, Keryx shareholders will be asked to consider and vote upon the following proposals:

 

  1.

Keryx Merger Proposal;

 

  2.

Keryx Adjournment Proposal; and

 

  3.

Keryx Advisory Compensation Proposal.

Recommendation of the Keryx Board

The Keryx Board recommends that the Keryx shareholders vote “FOR” the Keryx Merger Proposal, “FOR” the Keryx Adjournment Proposal and “FOR” the Keryx Advisory Compensation Proposal. See “The Merger—Keryx’s Reasons for the Merger; Recommendation of the Keryx Board” beginning on page 78 of this joint proxy statement/prospectus.

Consummation of the Merger is conditioned on approval of the Keryx Merger Proposal. If you abstain or fail to vote on the Keryx Merger Proposal, or if you fail to give voting instructions to your bank, broker, or other nominee, it will have the same effect as a vote “AGAINST” the Keryx Merger Proposal. Consummation of the Merger is not conditioned on the approval of the Keryx Adjournment Proposal or the Keryx Advisory Compensation Proposal.

Record Date for the Keryx Special Meeting and Quorum

Record Date

Only holders of record of Keryx Shares at 5:00 p.m. U.S. Eastern Time on [ ● ], 2018, the record date for the Keryx Special Meeting, will be entitled to receive notice of, and to vote, at the Keryx Special Meeting or any postponements or adjournments thereof. Each Keryx Share entitles the holder thereof to cast one vote on each matter that comes before the Keryx Special Meeting.

As of the record date for the Keryx Special Meeting, there were [ ● ] Keryx Shares outstanding and entitled to vote at the Keryx Special Meeting.

Quorum

In order for business to be conducted at the Keryx Special Meeting, a quorum must be present. A quorum requires the presence of the Keryx shareholders representing a majority in voting interest of the stock of Keryx entitled to vote at the Keryx Special Meeting, in person or represented by proxy. For purposes of determining whether there is a quorum, all shares that are present will count towards the quorum, which will include proxies received but marked as abstentions. If a quorum is present when the Keryx Special Meeting is convened, the Keryx shareholders present may continue to transact business until adjournment, even if the withdrawal of a number of the Keryx shareholders originally present leaves less than the proportion or number otherwise required for a quorum. Abstentions (Keryx Shares for which proxies have been received but for which the holders have

 

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abstained from voting or as to which the holder attends the Keryx Special Meeting in person but does not vote) will be counted as present and entitled to vote for purposes of determining a quorum. A failure to instruct your bank, broker, or other nominee will result in your shares not being included in the calculation of the number of Keryx Shares represented at the Keryx Special Meeting for purposes of determining whether a quorum has been achieved. However, your Keryx Shares will be counted toward determining whether a quorum is present if you instruct your bank, broker, or other nominee on how to vote your shares with respect to one or more of the Keryx Proposals.

Required Vote

Approval of the Keryx Merger Proposal is a condition to the consummation of the Merger. If the Keryx Merger Proposal is not approved, the Merger will not be consummated. Neither the approval of the Keryx Adjournment Proposal nor the approval of the Keryx Advisory Compensation Proposal is a condition to the consummation of the Merger.

Required Vote to Approve the Keryx Merger Proposal

Approval of the Keryx Merger Proposal requires the affirmative vote of the holders of a majority of the outstanding Keryx Shares entitled to vote at the Keryx Special Meeting.

Required Vote to Approve the Keryx Adjournment Proposal

Approval of the Keryx Adjournment Proposal requires the affirmative vote of the holders of a majority of the voting interest of the Keryx Shares present, in person or by proxy, and entitled to vote at the Keryx Special Meeting.

Required Vote to Approve the Keryx Advisory Compensation Proposal

Approval of the Keryx Advisory Compensation Proposal requires the affirmative vote of the holders of a majority of the voting interest of the Keryx Shares present, in person or by proxy, and entitled to vote on the Keryx Advisory Compensation Proposal at the Keryx Special Meeting.

Keryx Voting Agreement

Simultaneously with the execution of the Merger Agreement, Akebia entered into the Keryx Voting Agreement with Baupost, pursuant to which Baupost has agreed, among other things, to vote the Keryx Shares that it beneficially owns as of the record date for the Keryx Special Meeting in favor of the Keryx Proposals and against approval of any proposal made in opposition to, in competition with, or inconsistent with, the Merger Agreement or the Merger.

Baupost is the beneficial owner of approximately [ ● ]% of the outstanding Keryx Shares as of the record date for the Keryx Special Meeting (excluding (i) Keryx Shares issuable upon conversion of the Convertible Notes held by Baupost and (ii) the issuance of the Additional Shares, neither of which is expected to be issued and outstanding as of the record date for the Keryx Special Meeting).

Voting by Keryx’s and Akebia’s Directors and Executive Officers

As of the record date for the Keryx Special Meeting, directors and executive officers of Keryx and their affiliates owned and were entitled to vote [ ● ] Keryx Shares, representing approximately [ ● ]% of the Keryx Shares outstanding on that date, and directors and executive officers of Akebia and their affiliates owned and were entitled to vote [ ● ] Keryx Shares, representing less than [ ● ]% of the Keryx Shares outstanding on that date. Keryx currently expects that Keryx’s directors and executive officers and Akebia’s directors and executive

 

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officers will vote any Keryx Shares they hold in favor of the Keryx Merger Proposal, the Keryx Advisory Compensation Proposal, and, if necessary, the Keryx Adjournment Proposal, although none of them has entered into any agreement obligating him or her to do so.

Voting of Proxies; Incomplete Proxies

If you are a shareholder of record of Keryx Shares as of the record date for the Keryx Special Meeting, a proxy card is enclosed for your use. Keryx requests that Keryx shareholders submit their proxies over the Internet, by telephone or by completing and signing the accompanying proxy card and returning return it to Keryx promptly in the enclosed postage-paid envelope as soon as possible. Keryx shareholders may also authorize a proxy to vote their shares by telephone or through the Internet. Information and applicable deadlines for authorizing a proxy to vote by telephone or through the Internet are set forth on the enclosed proxy card. When the accompanying proxy card is returned properly executed, the Keryx Shares represented by it will be voted at the Keryx Special Meeting or any adjournment or postponement thereof in accordance with the instructions contained on in the proxy card.

If a proxy is signed and returned without an indication as to how the Keryx Shares represented by the proxy are to be voted with regard to a particular proposal, the Keryx Shares represented by the proxy will be voted in favor of each such proposal, as applicable, in accordance with the recommendation of the Keryx Board. In accordance with the Keryx bylaws and the DGCL, except as otherwise required by law, business transacted at the Keryx Special Meeting will be limited to those matters set forth in the notice of the meeting.

Your vote is important. Accordingly, please submit a proxy as soon as possible by telephone, over the Internet, or by signing and returning the enclosed proxy card, whether or not you plan to attend the Keryx Special Meeting in person.

Failures to Vote, Broker Non-Votes, and Abstentions

If you hold your Keryx Shares in a stock brokerage account or if your Keryx Shares are held by a bank or other nominee (that is, in “street name”), you must provide the record holder of your shares with instructions on how to vote your Keryx Shares. Please follow the voting instructions provided by your bank, broker, or other nominee. Please note that you are not permitted to vote Keryx Shares held in “street name” by returning a proxy card directly to Keryx or by voting in person at the Keryx Special Meeting unless you provide a “legal proxy,” which you must obtain from your bank, broker, or other nominee. Obtaining a legal proxy may take several days. Further, brokers who hold Keryx Shares on behalf of their customers may not give a proxy to Keryx to vote those shares without specific instructions from their customers.

If your bank, broker, or other nominee holds your Keryx Shares in “street name,” your Keryx Shares will be counted toward determining whether a quorum is present only if you instruct your bank, broker, or other nominee on how to vote your shares with respect to one or more of the Keryx Proposals.

If your bank, broker, or other nominee holds your Keryx Shares in “street name,” your bank, broker, or other nominee will vote your shares only if you provide instructions on how to vote on the relevant proposal. Therefore, if your Keryx Shares are held in “street name” and you do not instruct your bank, broker, or other nominee on how to vote your shares:

 

  1.

your bank, broker, or other nominee will not be permitted to vote your Keryx Shares on the Keryx Merger Proposal, and this failure to instruct your bank, broker, or other nominee will have the same effect as a vote “AGAINST” this proposal;

 

  2.

your bank, broker, or other nominee will not be permitted to vote your Keryx Shares on the Keryx Adjournment Proposal, and this failure to instruct your bank, broker, or other nominee will have no effect on the vote count for this proposal; and

 

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  3.

your bank, broker, or other nominee will not be permitted to vote your Keryx Shares on the Keryx Advisory Compensation Proposal, and this failure to instruct your bank, broker, or other nominee will have no effect on the vote count for this proposal.

Even if your Keryx Shares are held in “street name,” you are welcome to attend the Keryx Special Meeting. If your Keryx Shares are held in “street name,” you may not vote your Keryx Shares in person at the Keryx Special Meeting unless you obtain a proxy, executed in your favor, from the holder of record (i.e., your bank, broker, or other nominee). If you hold your Keryx Shares in “street name” and wish to vote in person, please contact your bank, broker, or other nominee before the Keryx Special Meeting to obtain the necessary proxy from the holder of record.

Under Nasdaq rules, brokers do not have discretionary authority to vote on non-routine matters. A “broker non-vote” occurs when a broker submits a proxy that states that the broker votes for at least one proposal, but does not vote for proposals on non-routine matters because the broker has not received instructions from the beneficial owners on how to vote and thus does not have discretionary authority to vote on those proposals. Because all of the matters to be considered at the Keryx Special Meeting are non-routine and brokers will not have discretionary authority to vote on any of the Keryx Proposals, Keryx does not expect to receive any broker non-votes. If broker non-votes were received, they would not have any impact on the outcome of the Keryx Adjournment Proposal or the Keryx Advisory Compensation Proposal, but would have the same effect as a vote “AGAINST” the Keryx Merger Proposal.

Failures to attend the Keryx Special Meeting (in person or by proxy) and vote will also not be counted for purposes of determining whether a quorum is present and will have no effect on the Keryx Adjournment Proposal or the Keryx Advisory Compensation Proposal. An abstention will have the same effect as a vote “AGAINST” the Keryx Adjournment Proposal and the Keryx Advisory Compensation Proposal. An abstention or a failure to attend the Keryx Special Meeting (in person or by proxy) and vote will have the same effect as a vote “AGAINST” the Keryx Merger Proposal.

Revocability of Proxies and Changes to a Keryx Shareholder’s Vote

If you are a holder of Keryx Shares as of the record date for the Keryx Special Meeting, you have the power to revoke your proxy at any time before it is voted at the Keryx Special Meeting. You can revoke your proxy in one of three ways:

 

   

sending a written notice of revocation that is received by Keryx prior to 11:59 p.m. (U.S. Eastern Time) on the day preceding the Keryx Special Meeting, stating that you would like to revoke your proxy, to Keryx’s Corporate Secretary at Keryx’s corporate headquarters, One Marina Park Drive, 12th Floor, Boston, Massachusetts 02210;

 

   

submitting a new proxy bearing a later date (by Internet, telephone or mail) that is received by Keryx prior to 11:59 p.m. (U.S. Eastern Time) on the day preceding the Keryx Special Meeting; or

 

   

attending the Keryx Special Meeting and voting in person or bringing a written notice of revocation to the Secretary of the Keryx Special Meeting prior to the voting at the Keryx Special Meeting (your attendance at the meeting will not, by itself, revoke your proxy; you must vote in person by ballot at the meeting to change your vote or submit a written notice of revocation to revoke your proxy).

If you wish to change your vote at the Keryx Special Meeting, you must vote by ballot at such meeting or if you wish to revoke your vote at the Keryx Special Meeting, you must bring a written notice of revocation to the Secretary of the Keryx Special Meeting prior to the voting at the Keryx Special Meeting.

 

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The latest dated completed proxy will be the one that counts. Written notices of revocation and other communications with respect to the revocation of any proxies should be addressed to:

Keryx Biopharmaceuticals, Inc.

One Marina Park Drive, 12th Floor

Boston, MA 02210

Attn: Corporate Secretary

If you are a Keryx shareholder whose Keryx Shares are held in “street name” by a bank, broker, or other nominee, you may revoke your proxy or voting instructions and vote your Keryx Shares in person at the Keryx Special Meeting only in accordance with applicable rules and procedures as employed by your bank, broker, or other nominee. If your Keryx Shares are held in “street name” in an account at a bank, broker, or other nominee, you must follow the directions you receive from your bank, broker, or other nominee in order to change or revoke your proxy or voting instructions and should contact your bank, broker, or other nominee to do so.

Solicitation of Proxies

The cost of the solicitation of proxies from Keryx shareholders will be borne by Keryx. In addition to solicitations by mail, Keryx’s directors, officers and employees may solicit proxies personally, by telephone, by facsimile or otherwise, without additional compensation. Keryx will also request brokerage firms, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of Keryx Shares held of record on the record date for the Keryx Special Meeting and will provide customary reimbursement to such firms for the cost of forwarding these materials. Keryx has retained Georgeson to assist in the solicitation of proxies and has agreed to pay them a fee of approximately $12,500, plus reasonable and documented expenses, for these services.

Adjournments

Although it is not currently expected, the Keryx Special Meeting may be adjourned for the purpose of soliciting additional proxies if Keryx has not received sufficient proxies to constitute a quorum or sufficient votes for approval of the Keryx Merger Proposal. If a quorum is not present, adjourning the Keryx Special Meeting requires the majority in voting interest of the Keryx shareholders present (in person or by proxy) and entitled to vote at the Keryx Special Meeting, or in the case that no Keryx shareholders are present at the Keryx Special Meeting, any Keryx officer entitled to preside at or to act as secretary of the Keryx Special Meeting may adjourn the Keryx Special Meeting. Pursuant to the Keryx bylaws, notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which adjournment is taken. If the Keryx Special Meeting is adjourned, shareholders who have already sent in their proxies will be allowed to revoke them at any time prior to their use. The Merger Agreement provides that the Keryx Special Meeting will not be adjourned to a date that is more than ten business days after the date for which the Keryx Special Meeting was originally scheduled without the consent of Akebia.

Postponements

At any time prior to convening the Keryx Special Meeting, the Keryx Board may postpone the Keryx Special Meeting for any reason without the approval of the Keryx shareholders. The Merger Agreement provides that the Keryx Special Meeting will not be postponed to a date that is more than ten business days after the date for which the Keryx Special Meeting was originally scheduled without the consent of Akebia. Although it is not currently expected, the Keryx Board may postpone the Keryx Special Meeting for the purpose of soliciting additional proxies if Keryx has not received sufficient proxies to constitute a quorum or sufficient votes for approval of the Keryx Merger Proposal. If the Keryx Special Meeting is postponed for the purpose of soliciting additional proxies, shareholders who have already sent in their proxies will be allowed to revoke them at any time prior to their use.

 

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Attending the Keryx Special Meeting

Subject to space availability and certain security procedures, all Keryx shareholders as of the record date for the Keryx Special Meeting, or their duly appointed proxies, may attend the Keryx Special Meeting. Each person attending the Keryx Special Meeting must have proof of ownership of Keryx Shares, as well as a valid government-issued photo identification, such as a driver’s license or passport, to be admitted to the meeting. If you hold your Keryx Shares in your name as a shareholder of record, you will need proof of ownership of Keryx Shares. If your Keryx Shares are held in “street name” in the name of a bank, broker, or other nominee and you plan to attend the Keryx Special Meeting, you must present proof of your ownership of Keryx Shares, such as a bank or brokerage account statement, to be admitted to the Keryx Special Meeting.

Shareholder List

A list of Keryx shareholders entitled to vote at the Keryx Special Meeting will be available for inspection at Keryx’s principal executive offices, located at One Marina Park Drive, 12th Floor, Boston, Massachusetts 02210, at least ten days prior to the date of the Keryx Special Meeting and continuing through the Keryx Special Meeting for any purpose germane to the Keryx Special Meeting. The list will also be available at the Keryx Special Meeting for inspection by any Keryx shareholder present at the Keryx Special Meeting.

Assistance

If you need assistance in completing your proxy card or have questions regarding the Keryx Special Meeting, please contact Georgeson, the proxy solicitor for Keryx, by telephone toll-free at (888) 680-1525.

KERYX PROPOSALS

Keryx Proposal 1: The Keryx Merger Proposal

Keryx shareholders are asked to adopt the Merger Agreement that it has entered into with Akebia and Merger Sub. Keryx shareholders should carefully read this joint proxy statement/prospectus in its entirety, including the documents incorporated by reference and the Merger Agreement, for more detailed information concerning the Merger Agreement and the Keryx Merger Proposal. For a summary and detailed information regarding this Keryx Merger Proposal, see the information about the Merger and the Merger Agreement throughout this joint proxy statement/prospectus, including the information set forth in the sections entitled “The Merger” and “The Merger Agreement” beginning on pages 63 and 133, respectively, of this joint proxy statement/prospectus. A copy of the Merger Agreement, including the First Amendment to the Merger Agreement, dated as of October 1, 2018, by and among Akebia, Keryx and Merger Sub (the “First Amendment to the Merger Agreement”), is attached as Annex A to this joint proxy statement/prospectus.

Approval of the Keryx Merger Proposal is a condition to the consummation of the Merger. If this Keryx Merger Proposal is not approved, the Merger will not occur. If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have the same effect as a vote “AGAINST” the proposal to adopt the Merger Agreement. See “The Merger—Keryx’s Reasons for the Merger; Recommendation of the Keryx Board” beginning on page 78 of this joint proxy statement/prospectus.

The Keryx Board formed a special committee of three independent directors (the “Keryx Special Committee”), to, among other things, review and evaluate the Merger, the Merger Agreement and the transactions contemplated thereby, including the Keryx Merger Proposal, and consider and evaluate alternatives available to Keryx. The Keryx Board, upon the unanimous recommendation of the Keryx Special Committee, unanimously determined that the Merger and the Merger Agreement were advisable and in the best interests of Keryx and its shareholders, approved the Merger Agreement and recommended that Keryx shareholders adopt the Merger Agreement.

 

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The Keryx Board unanimously recommends that Keryx shareholders vote “FOR” the Keryx Merger Proposal to adopt the Merger Agreement.

Keryx Proposal 2: The Keryx Adjournment Proposal

Keryx shareholders are asked to approve adjournments of the Keryx Special Meeting from time to time, if necessary or appropriate, to solicit additional affirmative votes in favor of the Keryx Merger Proposal if there are insufficient votes at the time of such adjournment to approve the Keryx Merger Proposal. The Merger Agreement provides that the Keryx Special Meeting will not be postponed or adjourned to a date that is more than ten business days after the date for which the Keryx Special Meeting was originally scheduled without the consent of Akebia. Consummation of the Merger is not conditioned on the approval of this Keryx Adjournment Proposal.

If the Keryx shareholders approve this Keryx Adjournment Proposal, Keryx could adjourn or postpone the Keryx Special Meeting, and any adjourned or postponed session of the Keryx Special Meeting, and use the additional time to solicit additional proxies for the approval of the Keryx Merger Proposal.

If, at the Keryx Special Meeting, the number of Keryx Shares present in person or by proxy and voting in favor of the Keryx Merger Proposal is not sufficient to approve that proposal, Keryx may move to adjourn the Special Meeting in order to enable the Keryx Board to solicit additional proxies for the approval of the Keryx Merger Proposal. In that event, the Keryx shareholders will be asked to vote only upon the Keryx Adjournment Proposal, and not the Keryx Merger Proposal or the Keryx Advisory Compensation Proposal. The approval of the Keryx Adjournment Proposal requires the affirmative vote of the holders of a majority of the voting interests of the Keryx Shares present, in person or by proxy, and entitled to vote on the proposal at the Keryx Special Meeting. If you abstain from voting on the Keryx Adjournment Proposal, it will have the same effect as a vote cast “AGAINST” the Keryx Adjournment Proposal. If you fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the Keryx Adjournment Proposal.

The Keryx Adjournment Proposal relates only to adjournments of the Keryx Special Meeting occurring for purposes of soliciting additional proxies for approval of Keryx Merger Proposal in the event that there are insufficient votes to approve that proposal. Keryx may also choose to (i) adjourn the meeting at any time or (ii) postpone the meeting before it is convened without shareholder approval, in each case under the authority provided by the Keryx bylaws and Delaware law. In the case that a quorum is not present at the Keryx Special Meeting, the Keryx bylaws provide that the meeting may be adjourned by a majority of the Keryx Shares present and entitled to vote or, if there are no Keryx Shares present and entitled to vote, by any officer of Keryx entitled to preside at or to act as secretary of the Keryx Special Meeting. If a quorum is not present at the Keryx Special Meeting, each vote cast in favor of the Keryx Adjournment Proposal will also count as a vote cast in favor of adjourning the meeting.

The Keryx Board unanimously recommends that Keryx shareholders vote “FOR” the Keryx Adjournment Proposal.

Keryx Proposal 3: The Keryx Advisory Compensation Proposal

Keryx is providing its shareholders with the opportunity to vote, on a non-binding, advisory basis, to approve the agreements or understandings between Keryx’s named executive officers and Keryx concerning compensation that is based on or otherwise relates to the Merger, as required by Section 14A of the Exchange Act and the applicable SEC rules issued thereunder, which were enacted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. This proposal, commonly known as the “say on golden parachute” vote, gives Keryx shareholders the opportunity to vote on a non-binding, advisory basis on such agreements or understandings and the related compensation that will or may be paid to its named executive officers in connection with the Merger. This non-binding, advisory proposal relates only to already existing contractual obligations of Keryx that may result in a payment or benefit to Keryx’s named executive officers in

 

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connection with, or following, the consummation of the Merger and does not relate to any new compensation or other arrangements that may be entered into between Keryx’s named executive officers and Akebia or any of its subsidiaries.

The compensation payments that Keryx’s named executive officers may be entitled to receive in connection with the Merger are summarized in the section entitled “The Merger—Quantification of Potential Payments to Keryx Named Executive Officers in Connection with the Merger” beginning on page 124 of this joint proxy statement/prospectus.

The Keryx Board encourages you to carefully review the compensation information disclosed in this joint proxy statement/prospectus, including in the description referenced above.

The Keryx Board is presenting this Keryx Advisory Compensation Proposal, which gives Keryx shareholders the opportunity to express their views on the “golden parachute” compensation by voting for or against (or abstaining with respect to) the following resolution:

“RESOLVED, that the shareholders of Keryx approve, solely on a non-binding, advisory basis, the agreements or understandings between Keryx’s named executive officers and Keryx and the related compensation that will or may be paid to its named executive officers in connection with the Merger, as disclosed pursuant to Item 402(t) of Regulation S-K in the section of the joint proxy statement/prospectus entitled “The Merger—Quantification of Potential Payments to Keryx Named Executive Officers in Connection with the Merger” beginning on page 124 of this joint proxy statement/prospectus.

The vote on the Keryx Advisory Compensation Proposal is a vote separate and apart from the vote on the Keryx Merger Proposal and is not a condition to completion of the Merger. Accordingly, you may vote to adopt the Merger Agreement pursuant to the Keryx Merger Proposal and vote not to approve the Keryx Advisory Compensation Proposal and vice versa. This Keryx Advisory Compensation Proposal is merely an advisory vote and will not be binding on Keryx, Akebia, the Keryx Board or the Akebia Board regardless of whether the Merger Agreement is adopted pursuant to the Keryx Merger Proposal. Further, the underlying compensation agreements and understandings are contractual in nature and not, by their terms, subject to shareholder approval. Regardless of the outcome of the advisory vote, if the Merger is completed, Keryx’s named executive officers will be eligible to receive the Merger-related compensation payments and benefits, in accordance with the terms and conditions of the applicable compensation agreements and understandings relating to those payments and benefits.

Approval of the non-binding, Keryx Advisory Compensation Proposal requires the affirmative vote of a majority of the voting interests of the Keryx Shares present, in person or by proxy, and entitled to vote on the proposal at the Keryx Special Meeting. If you fail to submit a proxy and do not attend the Keryx Special Meeting in person or if you do not provide your bank, broker, or other nominee with voting instructions on the Keryx Advisory Compensation Proposal, your Keryx Shares will have no effect on the Keryx Advisory Compensation Proposal. If you abstain from voting on the Keryx Advisory Compensation Proposal, it will have the same effect as a vote “AGAINST” the Keryx Advisory Compensation Proposal.

The Keryx Board unanimously recommends that the Keryx shareholders vote “FOR” the approval, on a non-binding, advisory basis, of the Keryx Advisory Compensation Proposal.

 

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THE AKEBIA SPECIAL MEETING

Date, Time, and Place of the Akebia Special Meeting

The Akebia Special Meeting will be held at [ ● ], local time, on [ ● ], 2018, at the offices of Latham & Watkins LLP located at 200 Clarendon Street, Boston, Massachusetts 02116. On or about [ ● ], 2018, Akebia commenced mailing this joint proxy statement/prospectus and the enclosed form of proxy card to its shareholders entitled to vote at the Akebia Special Meeting.

Purpose of the Akebia Special Meeting

At the Akebia Special Meeting, Akebia shareholders will be asked to consider and vote upon the following proposals:

 

  1.

Akebia Share Issuance Proposal; and

 

  2.

Akebia Adjournment Proposal.

Recommendation of the Akebia Board

The Akebia Board recommends that the Akebia shareholders vote “FOR” the Akebia Share Issuance Proposal and “FOR” the Akebia Adjournment Proposal. See “The Merger—Akebia’s Reasons for the Merger; Recommendation of the Akebia Board” beginning on page 82 of this joint proxy statement/prospectus.

Consummation of the Merger is conditioned on approval of the Akebia Share Issuance Proposal. Consummation of the Merger is not conditioned on the approval of the Akebia Adjournment Proposal.

Record Date for the Akebia Special Meeting and Quorum

Record Date

Only holders of record of Akebia Shares at 5:00 p.m. U.S. Eastern Time on [ ● ], 2018, the record date for the Akebia Special Meeting, will be entitled to notice of, and to vote at, the Akebia Special Meeting or any postponements or adjournments thereof. Each Akebia Share entitles the holder thereof to cast one vote on each matter that comes before the Akebia Special Meeting.

As of the record date for the Akebia Special Meeting, there were [ ● ] Akebia Shares outstanding and entitled to vote at the Akebia Special Meeting.

Quorum

In order for business to be conducted at the Akebia Special Meeting, a quorum must be present. The presence of Akebia shareholders entitled to cast a majority of all votes entitled to be cast by the holders of all outstanding Akebia Shares entitled to vote, in person or represented by proxy, is necessary to constitute a quorum at the Akebia Special Meeting. Abstentions (Akebia shares for which proxies have been received but for which the holders have abstained from voting or as to which the holder attends the Akebia Special Meeting in person but does not vote) will be counted as present and entitled to vote for purposes of determining a quorum. Shares for which no voting instructions were provided to the broker will not be included in the calculation of the number of Akebia Shares represented at the Akebia Special Meeting for purposes of determining whether a quorum has been achieved. However, your Akebia Shares will be counted toward determining whether a quorum is present if you instruct your bank, broker, or other nominee on how to vote your Akebia Shares with respect to one or more of the Akebia Proposals.

 

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Required Vote

Approval by Akebia shareholders of the Akebia Share Issuance Proposal is a condition to the consummation of the Merger. If the Akebia Share Issuance Proposal is not approved, the Merger will not be consummated. The Akebia Adjournment Proposal is not a condition to the consummation of the Merger.

Required Vote to Approve the Akebia Share Issuance Proposal

Approval of the Akebia Share Issuance Proposal requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively thereon at the Akebia Special Meeting.

Required Vote to Approve the Akebia Adjournment Proposal

Approval of the Akebia Adjournment Proposal requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively thereon at the Akebia Special Meeting.

Akebia Voting Agreement

Simultaneously with the execution of the Merger Agreement, Keryx entered into the Akebia Voting Agreement with Mr. Satter, pursuant to which Mr. Satter has agreed, among other things, to vote the Akebia Shares that he beneficially owns in favor of the Akebia Proposals and against approval of any proposal made in opposition to, in competition with, or inconsistent with, the Merger Agreement or the Merger.

Mr. Satter is the beneficial owner of approximately [ ● ]% of Akebia Shares as of the record date for the Akebia Special Meeting.

Voting by Akebia’s Directors and Executive Officers

As of the record date for the Akebia Special Meeting, directors and executive officers of Akebia and their affiliates owned and were entitled to vote [ ● ] Akebia Shares, representing approximately [ ● ]% of the Akebia Shares outstanding on that date. Akebia currently expects that Akebia’s directors and executive officers will vote their Akebia Shares in favor of the Akebia Proposals, although none of them has entered into any agreement obligating him or her to do so, other than Mr.  Satter.

Voting of Proxies; Incomplete Proxies

If you are a shareholder of record of Akebia Shares as of the record date for the Akebia Special Meeting, a proxy card is enclosed for your use. Akebia requests that Akebia shareholders sign the accompanying proxy and return it promptly in the enclosed postage-paid envelope. Akebia shareholders may also authorize a proxy to vote their Akebia Shares by telephone or through the Internet. Information and applicable deadlines for authorizing a proxy to vote by telephone or through the Internet are set forth on the enclosed proxy card. When the accompanying proxy is returned properly executed, the Akebia Shares represented by it will be voted at the Akebia Special Meeting or any adjournment or postponement thereof in accordance with the instructions contained in the proxy.

If a proxy is signed and returned without an indication as to how the Akebia Shares represented by the proxy are to be voted with regard to a particular proposal, the Akebia Shares represented by the proxy will be voted in favor of each such proposal, as applicable, in accordance with the recommendation of the Akebia Board. In accordance with the Akebia bylaws and the DGCL, except as otherwise required by law, business transacted at the Akebia Special Meeting will be limited to those matters set forth in the notice of the meeting.

Your vote is important. Accordingly, please submit a proxy as soon as possible by telephone, over the Internet, or by signing and returning the enclosed proxy card, whether or not you plan to attend the Akebia Special Meeting in person.

 

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Failures to Vote, Broker Non-Votes, and Abstentions

If you hold your Akebia Shares in a stock brokerage account or if your Akebia Shares are held by a bank, broker, or other nominee (that is, in “street name”), you must provide the record holder of your shares with instructions on how to vote your Akebia Shares. Please follow the voting instructions provided by your bank, broker, or other nominee. Please note that you are not permitted to vote Akebia Shares held in “street name” by returning a proxy card directly to Akebia or by voting in person at the Akebia Special Meeting unless you provide a “legal proxy,” which you must obtain from your bank, broker, or other nominee. Obtaining a legal proxy may take several days. Further, brokers who hold Akebia Shares on behalf of their customers may not give a proxy to Akebia to vote those shares without specific instructions from their customers.

Accordingly, if your bank, broker, or other nominee holds your Akebia Shares in “street name” as of the record date for the Akebia Special Meeting and you fail to instruct your bank, broker, or other nominee to vote your Akebia Shares, your bank, broker, or other nominee will not be permitted to vote on your behalf on the Akebia Share Issuance Proposal or the Akebia Adjournment Proposal and your Akebia Shares will not be counted towards determining whether a quorum is present. Your Akebia Shares will, however, be counted toward determining whether a quorum is present if you instruct your bank, broker, or other nominee on how to vote your Akebia Shares with respect to one or both of the Akebia Proposals.

Even if your Akebia Shares are held in “street name,” you are welcome to attend the Akebia Special Meeting. If your Akebia Shares are held in street name, you may not vote your Akebia Shares in person at the Akebia Special Meeting unless you obtain a proxy, executed in your favor, from the holder of record (i.e., your bank, broker, or other nominee). If you hold your Akebia Shares in “street name” and wish to vote in person, please contact your bank, broker, or other nominee before the Akebia Special Meeting to obtain the necessary proxy from the holder of record.

Under Nasdaq rules, brokers do not have discretionary authority to vote on non-routine matters. A “broker non-vote” occurs when a broker submits a proxy that states that the broker votes for at least one proposal, but does not vote for proposals on non-routine matters because the broker has not received instructions from the beneficial owners on how to vote and thus does not have discretionary authority to vote on those proposals. Because all of the matters to be considered at the Akebia Special Meeting are non-routine and brokers will not have discretionary authority to vote on any of the Akebia Proposals, Akebia does not expect to receive any broker non-votes. If broker non-votes were received, they would not have any impact on the outcome of the Akebia Share Issuance Proposal or Akebia Adjournment Proposal.

Abstentions and failures to attend the Akebia Special Meeting (in person or by proxy) and vote will have no effect on the Akebia Share Issuance Proposal or the Akebia Adjournment Proposal.

Revocability of Proxies and Changes to an Akebia Shareholder’s Vote

If you are a holder of record of Akebia Shares on the record date for the Akebia Special Meeting, you have the power to revoke your proxy at any time before your proxy is exercised at the Akebia Special Meeting. You can revoke your proxy in one of three ways:

 

   

sending a written notice of revocation that is received by Akebia prior to 11:59 p.m. (U.S. Eastern Time) on the day preceding the Akebia Special Meeting, stating that you would like to revoke your proxy, to Nicole R. Hadas, Akebia’s Secretary, at 245 First Street, Cambridge, Massachusetts 02142;

 

   

submitting a new proxy bearing a later date (by Internet, telephone or mail) that is received by Akebia prior to 11:59 p.m. (U.S. Eastern Time) on the day preceding the Akebia Special Meeting; or

 

   

attending the Akebia Special Meeting and voting in person or bringing a written notice of revocation to the Secretary of the Akebia Special Meeting prior to the voting at the Akebia Special Meeting (your attendance at the meeting will not, by itself, revoke your proxy; you must vote in person by ballot at the

 

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meeting to change your vote or submit a written notice of revocation to revoke your proxy). Attending the Akebia Special Meeting will not automatically revoke a proxy that was submitted through the Internet or by telephone or mail. If you wish to change your vote at the Akebia Special Meeting, you must vote by ballot at such meeting to change your vote, or if you wish to revoke your vote at the Akebia Special Meeting you must bring a written notice of revocation to the Secretary of the Akebia Special Meeting prior to the voting of the Akebia Special Meeting.

If you are an Akebia shareholder whose shares are held in “street name” by a bank, broker, or other nominee, you may revoke your proxy and vote your Akebia Shares in person at the Akebia Special Meeting only in accordance with applicable rules and procedures as employed by such bank, broker, or other nominee. If your shares are held in an account at a bank, broker, or other nominee, you should contact your bank, broker, or other nominee to change your vote.

Solicitation of Proxies

The cost of the solicitation of proxies from Akebia shareholders will be borne by Akebia. In addition to solicitations by mail, Akebia’s directors, officers and employees may solicit proxies personally, by telephone, by facsimile or otherwise, without additional compensation. Akebia will also request brokerage firms, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of Akebia Shares held of record on the record date for the Akebia Special Meeting and will provide customary reimbursement to such firms for the cost of forwarding these materials. Akebia has retained MacKenzie to assist in the solicitation of proxies and has agreed to pay them a fee of approximately $40,000, plus reasonable and documented expenses, for these services.

Adjournments

Although it is not currently expected, the Akebia Special Meeting may be adjourned for the purpose of soliciting additional proxies if Akebia has not received sufficient proxies to constitute a quorum or sufficient votes for approval of the Akebia Share Issuance Proposal. Pursuant to the Akebia bylaws, notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which adjournment is taken. If the Akebia Special Meeting is adjourned for the purpose of soliciting additional proxies, shareholders who have already sent in their proxies will be allowed to revoke them at any time prior to their use. The Merger Agreement provides that the Akebia Special Meeting will not be adjourned to a date that is more than ten business days after the date for which the Akebia Special Meeting was originally scheduled without the consent of Keryx.

Postponements

At any time prior to convening the Akebia Special Meeting, the Akebia Board may postpone the meeting for any reason without the approval of the Akebia shareholders. The Merger Agreement provides that the Keryx Special Meeting will not be postponed to a date that is more than ten business days after the date for which the Keryx Special Meeting was originally scheduled without the consent of Keryx. Although it is not currently expected, the Akebia Board may postpone the Akebia Special Meeting for the purpose of soliciting additional proxies if Akebia has not received sufficient proxies to constitute a quorum or sufficient votes for approval of the Akebia Share Issuance Proposal. If the Akebia Special Meeting is postponed for the purpose of soliciting additional proxies, shareholders who have already sent in their proxies will be allowed to revoke them at any time prior to their use.

Attending the Akebia Special Meeting

Subject to space availability and certain security procedures, all Akebia shareholders as of the record date of the Akebia Special Meeting, or their duly appointed proxies, may attend the Akebia Special Meeting. Each person attending the Akebia Special Meeting must have proof of ownership of Akebia Shares, as well as a valid

 

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government-issued photo identification, such as a driver’s license or passport, to be admitted to the meeting. If you hold your Akebia Shares in your name as a shareholder of record, you will need proof of ownership of Akebia Shares. If your Akebia Shares are held in “street name” in the name of a bank, broker, or other nominee and you plan to attend the Akebia Special Meeting, you must present proof of your ownership of Akebia Shares, such as a bank or brokerage account statement, to be admitted to the meeting.

Shareholder List

A list of Akebia shareholders entitled to vote at the Akebia Special Meeting will be available for inspection at Akebia’s corporate office, located at 245 First Street, Cambridge, Massachusetts 02142, at least ten days prior to the date of the Akebia Special Meeting and continuing through the Akebia Special Meeting for any purpose germane to the Akebia Special Meeting. The list will also be available at the Akebia Special Meeting for inspection by any Akebia shareholder present at the Akebia Special Meeting.

Assistance

If you need assistance in completing your proxy card or have questions regarding the Akebia Special Meeting, please contact MacKenzie, the proxy solicitor for Akebia, by telephone toll-free at (800) 322-2885.

AKEBIA PROPOSALS

Akebia Proposal 1: The Akebia Share Issuance Proposal

Akebia shareholders are asked to approve the issuance of Akebia Shares to Keryx shareholders in connection with the Merger. Akebia shareholders should carefully read this joint proxy statement/prospectus in its entirety, including the documents incorporated by reference and the Merger Agreement, for more detailed information concerning the Merger Agreement and the Akebia Share Issuance Proposal. For a detailed discussion of the terms of the Merger Agreement and the Merger, including the proposed Akebia share issuance, see the information about the Merger and the Merger Agreement throughout this joint proxy statement/prospectus, including the information set forth in sections entitled “The Merger” and “The Merger Agreement” beginning on pages 63 and 133, respectively, of this joint proxy statement/prospectus. A copy of the Merger Agreement, including the First Amendment to the Merger Agreement, is attached as Annex A to this joint proxy statement/prospectus.

Approval of the Akebia Share Issuance Proposal is a condition to the consummation of the Merger. If the Akebia Share Issuance Proposal is not approved, the Merger will not occur. For a detailed discussion of the conditions of the Merger, see “The Merger Agreement—Conditions to Consummation of the Merger” beginning on page 135 of this joint proxy statement/prospectus.

The approval of the Akebia Share Issuance Proposal requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively thereon at the Akebia Special Meeting.

Recommendation of the Akebia Board. The Akebia Board formed a transaction committee (the “Akebia Transaction Committee”) of five independent directors as further described in “The Merger—Background of the Merger” beginning on page 64 of this joint proxy statement/prospectus. The Akebia Board, upon the unanimous recommendation of the Akebia Transaction Committee, unanimously determined that the Merger Agreement and the Merger are advisable and in the best interests of Akebia and its shareholders, adopted and approved the Merger Agreement and transactions contemplated thereby, and recommended that Akebia shareholders approve the Akebia Share Issuance Proposal. Accordingly, the Akebia Board unanimously recommends that Akebia shareholders vote “FOR” the Akebia Share Issuance Proposal.

 

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Akebia Proposal 2: The Akebia Adjournment Proposal

Akebia shareholders are asked to approve adjournments of the Akebia Special Meeting from time to time, if necessary or appropriate, to solicit additional affirmative votes in favor of the Akebia Share Issuance Proposal if there are insufficient votes at the time of such adjournment to approve the Akebia Share Issuance Proposal. The Merger Agreement provides that the Akebia Special Meeting will not be postponed or adjourned to a date that is more than ten business days after the date for which the Keryx Special Meeting was originally scheduled without the consent of Keryx. Consummation of the Merger is not conditioned on the approval of this Akebia Adjournment Proposal.

If the Akebia shareholders approve this Akebia Adjournment Proposal, Akebia could adjourn or postpone the Akebia Special Meeting, and any adjourned or postponed session of the Akebia Special Meeting, and use the additional time to solicit additional proxies for the approval of the Akebia Share Issuance Proposal.

If, at the Akebia Special Meeting, the number of Akebia Shares present or represented and voting in favor of the Akebia Share Issuance Proposal is insufficient to approve such proposal, Akebia may move to adjourn the Akebia Special Meeting in order to enable the Akebia Board to solicit additional proxies for approval of the Akebia Share Issuance Proposal. In that event, the Akebia shareholders will be asked to vote only upon the Akebia Adjournment Proposal, and not the Akebia Share Issuance Proposal. Additionally, pursuant to the Akebia bylaws, the Chairperson of the meeting may adjourn the meeting without the approval of the Akebia shareholders. Approval of the Akebia Adjournment Proposal requires the affirmative vote of the holders of a majority of the votes cast affirmatively or negatively thereon at the Akebia Special Meeting. If you abstain from voting, fail to cast your vote, in person or by proxy, or fail to give voting instructions to your brokerage firm, bank, trust or other nominee, it will have no effect on the Akebia Adjournment Proposal.

The Akebia Adjournment Proposal relates only to adjournments of the Akebia Special Meeting occurring for purposes of soliciting additional proxies for approval of the Akebia Share Issuance Proposal in the event that there are insufficient votes to approve that proposal. Akebia retains full authority to the extent set forth in its bylaws and Delaware law (subject to the terms of the Merger Agreement) to adjourn the Akebia Special Meeting for any other purpose, or to postpone the Akebia Special Meeting before it is convened, without the consent of any Akebia shareholders.

The Akebia Board unanimously recommends that Akebia shareholders vote “FOR” the Akebia Adjournment Proposal.

 

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THE MERGER

The following is a description of certain material aspects of the Merger. This description may not contain all of the information that may be important to you. The discussion of the Merger in this joint proxy statement/prospectus is qualified in its entirety by reference to the Merger Agreement, which is attached to this joint proxy statement/prospectus as Annex A. We encourage you to read carefully this entire joint proxy statement/prospectus, including the annexes and exhibits to, and the documents incorporated by reference in, this joint proxy statement/prospectus and the exhibits to the registration statement to which this joint proxy statement/prospectus relates, for a more complete understanding of the Merger and the documents incorporated by reference. This section is not intended to provide you with any factual information about Akebia or Keryx. Such information can be found elsewhere in this joint proxy statement/prospectus and in the public filings Akebia and Keryx make with the SEC, as described in “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” beginning on pages 178 and 179, respectively, of this joint proxy statement/prospectus.

General Description of the Merger

Pursuant to the Merger Agreement, Merger Sub will merge with and into Keryx, with Keryx surviving as a wholly owned subsidiary of Akebia. In the Merger, each Keryx Share issued and outstanding immediately prior to the Effective Time (other than shares held by Akebia, Merger Sub, any subsidiaries of Keryx or Akebia, or by Keryx as treasury shares) will become the right to receive 0.37433 Akebia Shares.

Immediately following the Effective Time, Keryx shareholders and Akebia shareholders are expected to own approximately 50.6% and 49.4%, respectively, of the Akebia Shares, calculated based on the companies’ fully diluted market capitalizations as of the signing of the Merger Agreement and also taking into account the Additional Shares expected to be issued to Baupost in connection with the conversion under that certain Notes Conversion Agreement prior to the consummation of the Merger. Keryx Shares currently trade on The Nasdaq Capital Market under the symbol “KERX,” and Akebia Shares currently trade on The Nasdaq Global Market under the symbol “AKBA.” Following the consummation of the Merger, Akebia Shares will continue to be listed on The Nasdaq Global Market and will continue to trade under the symbol “AKBA.” Based on the number of outstanding Keryx Shares and Akebia Shares as of the record date of the Keryx Special Meeting and the record date of the Akebia Special Meeting, respectively, and the Keryx and Akebia equity awards expected to vest in connection with the Merger, a total of approximately [ ● ] million Akebia Shares are expected to be outstanding immediately after the consummation of the Merger.

Consideration to be Received by the Keryx Shareholders

In the Merger, each Keryx Share issued and outstanding immediately prior to the Effective Time (other than shares held by Akebia, Merger Sub, any subsidiaries of Akebia or Keryx, or by Keryx as treasury shares) will become the right to receive 0.37433 Akebia Shares.

Notes Conversion Transactions

In connection with the Merger, Keryx entered into a Notes Conversion Agreement with Baupost, the holder of approximately $164.75 million of Keryx’s Convertible Notes and, with respect to certain sections only, Akebia. Pursuant to the terms of the Notes Conversion Agreement, Baupost has agreed to convert the Convertible Notes into 35,582,335 Keryx Shares (the “Conversion Shares”) in accordance with the terms of the governing indenture, dated May 9, 2018, by and between Keryx and the Bank of New York Mellon Trust Company, N.A. (the “Indenture”), immediately prior to the Effective Time of the Merger, conditioned upon the issuance to Baupost of an additional 4,000,000 Keryx Shares (the “Additional Shares”) and the satisfaction of the conditions in the Merger contained in Article 6 of the Merger Agreement. The Conversion Shares and the Additional Shares will be issued prior to the Effective Time and will become Akebia Shares with the same Exchange Multiplier as other Keryx Shares.

 

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Background of the Merger

Each of the Akebia Board and the Keryx Board, together with members of the respective management teams of Akebia and Keryx, regularly reviews and assesses the performance, future growth prospects, business plans and overall strategic direction of Akebia and Keryx, respectively, and considers a variety of strategic alternatives that may be available to Akebia and Keryx, respectively, including continuing to pursue each respective company’s strategy as a standalone company or pursuing potential strategic or financing transactions with third parties, in each case with the goal of maximizing shareholder value.

In connection with such a review by Akebia and with the consent of the Akebia Board, on December 8, 2017, John P. Butler, President and Chief Executive Officer of Akebia, contacted Gregory P. Madison, then-President and Chief Executive Officer of Keryx, to discuss the potential for a transaction between Akebia and Keryx.

In connection with such a review by Keryx and following the December 8, 2017 discussion between Mr. Butler and Mr. Madison, on December 13, 2017, the Keryx Board held a meeting at which members of Keryx management and a representative of Perella Weinberg Partners (“PWP”) participated. As part of this meeting, PWP provided an overview of the merger and acquisition landscape in the life sciences industry, and the Keryx Board discussed potential business development initiatives, including potential business combination transactions and various possible merger partners. Also during this meeting, Mr. Madison reported to the Keryx Board on, and the Keryx Board discussed, Mr. Madison’s conversation with Mr. Butler. The Keryx Board also received an operational and financial update from management and discussed how Keryx’s cash position would likely limit its ability to undertake an acquisition, development or licensing deal. Following these discussions, the Keryx Board considered the possibility that a strategic transaction, such as a merger or company sale, might provide the Keryx shareholders with more value than proceeding as a standalone company and instructed Keryx management to work with certain Keryx Board members in a preliminary exploration of strategic alternatives and identifying potential merger partners or possible acquirers of Keryx.

In the days following the December 13, 2017 Keryx Board meeting, certain members of the Keryx Board held meetings with members of the Keryx management team to further discuss business development initiatives, including potential business combination transactions, various possible merger partners and potential acquirers and other strategic alternatives. The Keryx Board instructed Keryx management to engage in high-level discussions about a potential business combination with Akebia, “Party A” and “Party B,” which parties the Keryx Board believed to be the most viable potential merger partners based on the profiles reviewed of eight potential strategic partners or acquirers in the industry. Also during this time, the Keryx Board and management engaged in high level discussions with representatives of Baupost, Keryx’s largest shareholder and the holder of the then-existing Zero Coupon Convertible Senior Notes due 2020 (the “Convertible Notes due 2020”), to ensure that Baupost would be supportive of such an exploration and consideration of such a transaction.

In connection with these discussions and with the support and authorization of the Keryx Board, Keryx engaged PWP as its financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”) as its outside legal counsel with respect to a potential strategic transaction, and PWP reached out to Akebia, Party A and Party B to gauge each party’s interest in exploring a strategic transaction with Keryx. PWP was chosen to assist Keryx as a financial advisor given its expertise and experience with similar merger transactions, and because of the familiarity of several members of Keryx management and the Keryx Board with PWP.

Following those discussions, in December 2017, Akebia and Keryx entered into a reciprocal confidentiality agreement, and representatives of management from Akebia and Keryx met to discuss a potential transaction between the parties and conduct initial due diligence concerning the companies’ businesses. As part of these discussions, the parties considered the benefits and risks of such a transaction, including that a combination of the two companies would have an expanded and complementary nephrology portfolio with an infrastructure to maximize potential for both Auryxia and vadadustat. However, given the balance sheets and cash positions of the

 

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two companies, further financing for the combined company would likely be important to achieve long-term success for a combined company. The parties also considered that the combined company would likely be in a better position to raise equity capital if it were able to eliminate Keryx’s Convertible Notes due 2020 held by Baupost. The parties determined to continue discussions over the course of the following weeks. The risks and benefits considered by the parties throughout their consideration of the Merger can be found under the headings “The MergerKeryx’s Reasons for the Merger; Recommendation of the Keryx Board” and “The MergerAkebia’s Reasons for the Merger; Recommendation of the Akebia Board” beginning on pages 78 and 82, respectively, of this joint proxy statement/prospectus.

On December 19, 2017, the Akebia Board held a regularly scheduled meeting, together with members of Akebia management, representatives of Evercore, and representatives from Ropes & Gray LLP (“Ropes & Gray”), legal counsel to Akebia, at which the potential transaction was discussed. During the meeting, Akebia management and the Akebia Board discussed Keryx and its product, Auryxia. Akebia management presented an overview, including the risks and potential benefits of the potential transaction with Keryx, and provided an update regarding the discussions with Keryx. The Akebia Board also discussed certain relationships between members of the Akebia Board, on the one hand, and Keryx and Baupost, on the other hand. The Akebia Board noted that Mr. Butler previously served as an independent member of the Keryx Board at the request of Baupost from December 2015 to September 2017, including as Chairperson of the Keryx Board from May 2016 to September 2017. It was also noted that Mr. Madison previously worked with Mr. Butler in the renal division of Genzyme Corporation. The Akebia Board discussed that Ronald C. Renaud, Jr., a member of the Akebia Board, served as Chief Financial Officer of Keryx from 2006 to 2007. The Akebia Board also discussed that Mr. Renaud currently serves as Chief Executive Officer of Translate Bio, Inc., of which Baupost is an investor. Finally, the Akebia Board noted that Muneer A. Satter, the Chairperson of the Akebia Board, also serves as Chairperson of the Board of Directors of Aerpio Pharmaceuticals, Inc. (“Aerpio”), of which Michael Rogers, the Chairperson of the Keryx Board, is Chief Financial Officer. The Akebia Board authorized Akebia management to expend the necessary corporate resources in furtherance of preparing an offer of merger or other business combination with Keryx. Among other things, the Akebia Board viewed the potential transaction as potentially creating a sustainable, kidney disease-focused, therapeutic leader that is well positioned to be a partner of choice throughout the renal community and for companies developing renal products. The Akebia Board believed that a potential transaction with Keryx could present the opportunity to establish a leading renal company with a large market opportunity, along with having significant synergy potential and an experienced leadership team. Evercore was chosen to assist Akebia as a financial advisor in the transaction, among other reasons, because of its qualifications, expertise and reputation, as well as its familiarity with Akebia’s business and the Akebia management team.

Following the meeting of the Akebia Board, on December 19, 2017, Mr. Butler contacted Mr. Madison, confirming that Akebia was interested in further discussions regarding a potential transaction between Akebia and Keryx. Mr. Butler indicated that the parties should continue due diligence and that Akebia would send a non-binding offer letter to Keryx in early January 2018 regarding a potential transaction if the diligence supported moving forward.

From December 20, 2017 through January 4, 2018, members of management of Keryx and Akebia continued to have discussions as part of due diligence of each company by the other. In January 2018, Akebia selected J.P. Morgan to be a financial co-advisor to Akebia in connection with the potential transaction. J.P. Morgan was chosen to assist Akebia as a financial advisor because of, among other things, its experience and its qualifications and reputation in connection with such matters and its familiarity with Akebia, Keryx and the industries in which they operate.

On the morning of January 4, 2018, Mr. Butler and Mr. Madison met in Boston, Massachusetts, to discuss certain topics regarding the potential transaction, including the potential transaction structure, the potential management of the combined company and the potential structure of the board of directors of the combined company.

 

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On the afternoon of January 4, 2018, the Akebia Board held a telephonic meeting, together with members of Akebia management and representatives of Ropes & Gray and Evercore. Representatives of Ropes & Gray discussed the fiduciary duties of the Akebia Board in connection with a potential transaction with Keryx, and the Akebia Board reviewed the relationships between certain members of the Akebia Board, on one hand, and Keryx and Baupost, on the other hand, that were previously discussed at the Akebia Board’s December 19, 2017 meeting. The Akebia Board, Akebia management and representatives of Evercore also discussed the opportunity presented by the potential transaction, financial analyses and certain diligence items. The Akebia Board then reviewed and discussed the draft non-binding offer letter that had been prepared by Akebia management and directed Mr. Butler to send the non-binding offer letter to Keryx. The non-binding offer letter proposed, among other terms, a stock-for-stock merger of 0.299 Akebia Shares for each Keryx Share outstanding, which assumed, among other things, the full conversion of the Convertible Notes due 2020. At this exchange ratio, Keryx security holders would hold approximately 48.5% of the combined company. The offer letter also provided for the Combined Board to consist of four designees from the Akebia Board, one of whom would be the Chairperson, four designees from the Keryx Board, and the Chief Executive Officer of the combined company, who would be Mr. Butler. Additionally, the offer letter proposed that Baupost would provide a support agreement in favor of the transaction and that Mr. Madison would serve in a leadership position at Akebia following the proposed transaction.

On the morning of January 5, 2018, Mr. Butler and Mr. Madison had a telephone call wherein Mr. Butler presented Mr. Madison with the material terms of the non-binding offer letter, which was subsequently e-mailed to Mr. Madison.

On January 6, 2018, the Keryx Board held a telephonic meeting at which members of Keryx management, as well as representatives of Skadden and PWP, participated. Skadden reviewed with the Keryx Board its fiduciary duties in connection with its receipt of the January 5, 2018 non-binding offer letter from Akebia. Skadden also reviewed with the Keryx Board certain considerations with respect to Baupost and Mr. Butler’s former membership on the Keryx Board in light of the potential transaction. After discussion, it was determined that the Baupost board observer would not participate in Keryx Board meetings with respect to a potential merger transaction. The Keryx Board discussed the potential strategic benefits and risks of a merger with Akebia. Keryx management also discussed with the Keryx Board that it would be meeting with Party A and Party B, individually, to discuss a possible business combination with each company. The Keryx Board also discussed next steps, including that Keryx management and its advisors should continue to engage in discussions with Akebia regarding a potential business combination, but that any such potential business combination should be a merger of equals, with Akebia shareholders and Keryx shareholders owning 50% of the combined company, respectively. The Keryx Board also directed Keryx management and Keryx’s advisors to propose that the Combined Board consist of four designees from each of the Akebia Board and the Keryx Board, with the ninth director being a new independent director chosen by mutual agreement of Akebia and Keryx, and that the Chairperson of the Combined Board would be designated by the Keryx Board Designees. The Keryx Board also directed Keryx management and its advisors to propose that Keryx would be willing to request that Baupost convert the Convertible Notes due 2020 and sign a support agreement, but only after Keryx and Akebia reach general agreement on the deal terms and once due diligence had been completed. The Keryx Board also indicated that it was supportive of continuing discussions with Party A and Party B.

Also at this meeting, the Keryx Board formally formed a special transaction committee (the “Keryx Special Committee”) to explore the potential business combination with Akebia and any other potential alternative transaction involving Keryx that may present itself (a “Potential Transaction”) consisting of Michael Rogers, Mark J. Enyedy and Steven C. Gilman (which members had been working with representatives of Keryx management during the preliminary exploration of potential business development initiatives since December 2017), with Mr. Enyedy serving as Chairperson. The Keryx Special Committee was delegated authority to, among other things, (a) explore and consider Potential Transactions and to determine whether any such Potential Transaction was in the best interests of and fair to the Keryx shareholders; (b) consult with Keryx management, financial and legal advisors and any other advisors or the Keryx Board in connection with such exploration and

 

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consideration of any Potential Transaction; (c) enter into discussions and negotiations with respect to the terms and conditions of any Potential Transaction; and (d) submit its recommendations with respect to any Potential Transaction to the Keryx Board for consideration. Throughout the Keryx Special Committee’s evaluation of Potential Transactions, the Keryx Special Committee met frequently via telephone conference calls for formal meetings, but its members were also in regular informal communication with Keryx management and advisors and with each other. The Keryx Special Committee also received reports from and discussed the potential Akebia transaction with the Research and Development Committee of the Keryx Board (the “R&D Committee”), whose members are Dr. Gilman, Michael T. Heffernan and Jodie Morrison, and which was charged with overseeing and reviewing the regulatory and clinical due diligence undertakings on Akebia with respect to the potential transaction with Akebia.

On January 7, 2018, following discussions on the afternoon of January 6, 2018 between members of management of Keryx and Akebia and representatives of PWP and Evercore regarding the merger terms, Mr. Madison sent Mr. Butler a non-binding response letter, which had been reviewed by the Keryx Special Committee, outlining the terms authorized by the Keryx Board at its January 6, 2018 meeting. The terms authorized included an exchange ratio of 0.3223 Akebia Shares for each Keryx Share. In addition, the response letter proposed a Combined Board consistent with that proposed at the January 6, 2018 Keryx Board meeting. The response letter also provided that Mr. Madison would serve in a leadership position at the combined company and proposed that Keryx would request a support agreement from Baupost in favor of the transaction and that Akebia would request a support agreement from Mr. Satter in favor of the transaction.

On January 10, 2018, members of management of Akebia and Keryx met, along with their respective financial and legal advisors, to discuss due diligence and a potential process and timeline for further exploration of a potential business combination between the two companies. At this meeting, Akebia indicated it would be comfortable with a merger of equals, subject to due diligence and assuming the conversion of the outstanding Convertible Notes due 2020 at no additional cost to Akebia. Akebia also proposed that the Chairperson of the Combined Board should be a new independent director selected by the eight Continuing Directors and Keryx Board Designees, rather than selected by the Keryx Board Designees as proposed by Keryx in its non-binding response letter of January 7, 2018. Akebia also noted that it desired to announce a financing transaction for the combined company at the time the business combination between the parties was announced. Later on January 10, 2018, Evercore sent a counterproposal to PWP indicating that Akebia was willing to pursue a merger of equals, but subject to completion of due diligence and assuming and conditioned upon the conversion of the Convertible Notes due 2020 at no cost to Akebia.

From January 10, 2018, through January 18, 2018, members of Akebia and Keryx management and each company’s respective representatives and advisors continued discussions, negotiations and diligence surrounding the potential transaction and its terms, including meetings and telephone calls on the topics of quality control, commercialization, clinical trial programs, regulatory matters and intellectual property. During this time, each of Akebia and Keryx made information available for the other party in their respective electronic datarooms.

During this time, at the instruction of the Keryx Special Committee, Keryx also engaged in high-level, preliminary discussions with each of Party A and Party B regarding a potential strategic transaction between Keryx and Party A and Party B, respectively. Following such preliminary discussions, between late January and early February, Party A informed Keryx that it would be unable to pursue a potential business combination at this time given the status of Party A’s pipeline and certain governance issues. Also during this time, Keryx management and its financial and legal advisors periodically met with, reported to and received authorization to take additional actions from the Keryx Special Committee.

On January 18, 2018, the Keryx Board held a telephonic meeting at which members of Keryx management, Skadden and PWP participated. At this meeting, management and PWP reported to the Keryx Board on recent discussions with Akebia and PWP provided the Keryx Board with an overview of the risks associated with announcing a financing transaction for the combined company in conjunction with an announcement of the

 

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business combination, including the increased complexity involved with such a financing could heighten the execution risk or the transaction as a whole.

Between January 20, 2018 and January 30, 2018, members of management of Akebia and Keryx met on several occasions, along with their respective financial and legal advisors, to continue to discuss due diligence efforts and findings. On January 24, 2018, while reciprocal due diligence was underway, Ropes & Gray circulated a draft of the Merger Agreement to the parties.

On February 2, 2018, the Keryx Board held a telephonic meeting at which members of Keryx management, Skadden and PWP participated. PWP reported to the Keryx Board on recent discussions with Akebia and PWP, and Keryx management reported and discussed with the Keryx Board the preliminary results of Keryx’s due diligence of Akebia to date. The Keryx Board also discussed uncertainties inherent in development stage companies. The Keryx Board discussed next steps, including continued due diligence efforts.

Between February 2, 2018 and February 12, 2018, the parties continued to conduct reciprocal due diligence. During such time, members of Keryx management and its outside consultants met with the R&D Committee to discuss Akebia’s vadadustat clinical program, as well as the timing and investment required to complete Akebia’s vadadustat clinical program. At a meeting of the R&D Committee held on February 9, 2018, the R&D Committee determined to recommend that the Keryx Board discontinue pursuing a transaction with Akebia at such time and reported its recommendation to the members of the Keryx Special Committee.

On February 12, 2018, the R&D Committee reported to the Keryx Board the results of due diligence and certain uncertainties inherent in development stage companies. The Keryx Board (including the Keryx Special Committee) determined, based on the report and recommendation of the R&D Committee, that based on the due diligence to date and taking into account the risks attendant to a merger transaction with Akebia, including the respective balance sheets and cash positions of the two companies, that it would be in the best interests of the Keryx shareholders if Keryx were to continue as a standalone company and explore whether other potential merger partners might provide greater value to the Keryx shareholders. Accordingly, the Keryx Board determined to cease discussions with Akebia regarding a potential transaction at that time.

On February 16, 2018, Mr. Madison contacted Mr. Butler to inform him that Keryx was not interested in pursuing a transaction with Akebia at that time. Mr. Butler communicated this message to the Akebia Board and Akebia management. Both parties removed access by the other party to their respective electronic data rooms. At this time, Keryx terminated its engagement of its legal and financial advisors with respect to the potential transaction with Akebia.

Thereafter, over the next several weeks, the Keryx Board and the Keryx Special Committee worked with members of Keryx management to explore other possible strategic opportunities, including other potential merger partners or acquirers, as a potential alternative to remaining a standalone company. In connection with these undertakings, Keryx sought and received advice from MTS Health Partners as its financial advisor, who worked with Keryx management and the Keryx Special Committee to identify a list of potential merger partners and acquirers. MTS Health Partners was chosen to assist Keryx as its financial advisor because of, among other things, its knowledge of the life sciences industry, the familiarity of several members of Keryx senior management and the Keryx Board with MTS Health Partners, and its experience with merger and sale transactions. The Keryx Special Committee authorized Keryx management and MTS Health Partners to engage in high-level, preliminary discussions with the ten strategic parties who had been identified by the Keryx Special Committee as the most viable potential acquirers based primarily on financial profile and market position, perceived interest in Keryx and ability to pay. The Keryx Special Committee also authorized Keryx management and MTS Health Partners to engage in high-level, preliminary discussions with three other parties who had been recommended by MTS Health Partners as viable potential merger partners and to continue its discussions with Party B, who had signed a reciprocal and customary confidentiality agreement (absent an express standstill) in May 2017 in connection with earlier business development discussions with Party B. The Keryx Special Committee also instructed Keryx management to continue to monitor developments in Akebia’s business,

 

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programs and potential financing needs. The Keryx Board also instructed Keryx management to continue discussions with Baupost on Keryx’s strategic opportunities, including a potential refinancing of the Convertible Notes due 2020.

Following the outreach performed by MTS Health Partners, certain of the contacted parties engaged in high-level due diligence and preliminary discussions with Keryx management and MTS Health Partners. None of the parties, however, was interested in pursuing an acquisition of or merger with Keryx, including Party B, which cited timing concerns in light of its own portfolio and financial profile. During this time, Keryx also began negotiating the refinancing of the Convertible Notes due 2020 with Baupost.

Also during this time, in March 2018, representatives of Baupost communicated to Akebia management that Baupost was interested in conducting diligence on Akebia and its clinical program. Baupost and Akebia entered into a confidentiality agreement with the consent of the Akebia Board, and thereafter, Akebia shared certain information with Baupost and Baupost’s consultants, and engaged in discussions with Baupost regarding diligence over the next several weeks.

In March 2018, Akebia completed a public stock offering, raising $89.3 million in gross proceeds.

On April 27, 2018, the Keryx Board held a meeting at which members of Keryx management and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (“Mintz Levin”), Keryx’s outside legal advisor, participated. Although the purpose of the meeting was to discuss the resignation of Mr. Madison as Keryx’s Chief Executive Officer, the upcoming earnings announcement and the status of refinancing negotiations with Baupost, at this meeting, representatives of Baupost also provided Keryx with access to a consultant who had conducted due diligence on Akebia, including on its clinical trial and research and development programs. Also at this meeting, the Keryx Board determined that Ms. Morrison should contact Mr. Butler to inquire as to whether Akebia would be interested in reengaging in discussions regarding a potential transaction with Keryx. Representatives from Keryx management, including Ms. Morrison, who had been appointed Interim Chief Executive Officer of Keryx, then met with the Baupost consultant to gather additional information regarding Akebia’s clinical program.

On April 29, 2018, Ms. Morrison contacted Mr. Butler to inform him of Mr. Madison’s departure and to indicate that Keryx would consider renewing discussions regarding a potential transaction with Akebia in light of Keryx’s review of additional information regarding Akebia’s clinical program for vadadustat, and to inquire whether Akebia would also be interested in reengaging in such discussions.

Between May 2, 2018 and May 5, 2018, Ms. Morrison and Mr. Butler discussed the process and timing of reengaging in the exploration of a potential transaction between Keryx and Akebia. In connection with these discussions and other possible strategic opportunities, Keryx sought and received advice from outside regulatory and clinical consultants and legal advisors, including Goodwin Procter LLP (“Goodwin”).

On May 4, 2018, the Akebia Board held a telephonic meeting, together with members of Akebia management, to discuss renewing interactions with Keryx regarding a potential transaction. The Akebia Board directed Akebia management to continue preparatory work for a potential transaction with Keryx.

On May 7, 2018, the Keryx Board held a telephonic meeting at which members of Keryx management, MTS Health Partners, Goodwin and Mintz Levin participated. At this meeting, in addition to approving the exchange of the Convertible Notes due 2020 for the Convertible Notes to Baupost, the Keryx Board discussed the possible business combination with Akebia and expressed its support for and authorized Ms. Morrison’s and Keryx management’s reengaging in discussions with Mr. Butler and Akebia, including because of Akebia’s improved cash position as a result of its March equity offering and the current dynamics in the marketplace. The Keryx Board also noted that the results of Akebia’s upcoming type-C meeting with the FDA would be known and taken into account before any agreement with Akebia would be entered into by Keryx, thereby mitigating the clinical trial uncertainties identified by the R&D Committee in February. Also at this meeting, Goodwin described the Keryx Board’s fiduciary duties in connection with its consideration of a business combination with Akebia. The Keryx Board noted that Mr. Enyedy had been appointed to the Keryx Board as an independent director at the request of Baupost, and also noted that Mr. Rogers was serving as the Chief Financial Officer of Aerpio and that the Akebia Board’s

 

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Chairperson, Mr. Satter, was also the Chairperson of Aerpio’s Board of Directors. The Keryx Board discussed that, given the potential role of Baupost and its consultant in the contemplated transaction, as well the relationship Mr. Rogers had with the Chairperson of the Akebia Board, it would be prudent to reconstitute the Keryx Special Committee to alleviate any perceived conflicts of interest. Following such discussion, the Keryx Board unanimously appointed Ms. Morrison, Mr. Heffernan and Dr. Gilman as the members of the Keryx Special Committee, and appointed Ms. Morrison as Chairperson. The Keryx Special Committee noted that Keryx management had engaged MTS Health Partners and Goodwin to act as Keryx’s financial and legal advisors, respectively, in connection with a potential transaction and determined that the Keryx Special Committee was comfortable relying on the advice of such advisors without the need for any separate Keryx Special Committee advisors. The Keryx Special Committee also discussed and approved the terms of an engagement letter with MTS Health Partners, which was entered into on May 18, 2018 and subsequently ratified by the full Keryx Board. Throughout the reconstituted Keryx Special Committee’s evaluation of a potential business combination with Akebia, the Keryx Special Committee met frequently via telephone calls for formal meetings, and its members were also in regular informal communication with its advisors, with Keryx management and with each other.

On May 8, 2018, Ms. Morrison contacted Mr. Butler and indicated that the Keryx Board supported reengaging in discussions with Akebia regarding a potential merger of equals. Thereafter, the parties and their respective advisors reengaged in business discussions and reciprocal due diligence. During such time, Keryx also resumed discussions with Baupost regarding conversion of the Convertible Notes in connection with a merger with Akebia and whether Baupost would be supportive of a combination of the two companies.

On May 10, 2018, the Keryx Board held a telephonic meeting in which members of Keryx management, MTS Health Partners, Goodwin and Mintz Levin participated to, among other things, review Keryx’s long range plan (see “—Certain Keryx Management Unaudited Prospective Financial Information” beginning on page 86 of this joint proxy statement/prospectus) and continue discussions regarding the potential business combination with Akebia. Following such meeting, Keryx’s long range plan (which is defined as the Keryx Management Keryx Projections under the heading “—Certain Keryx Management Unaudited Prospective Financial Information” beginning on page 86 of this joint proxy statement/prospectus) was shared with Akebia.

Between May 11, 2018 and May 16, 2018, the parties discussed next steps, timing and continued reciprocal due diligence efforts of a proposed transaction.

On May 11, 2018, Akebia management shared with Keryx management certain unaudited prospective financial information of Akebia on a standalone basis. Keryx management, along with MTS Health Partners, reviewed such projections and applied certain assumptions and adjustments, to arrive at the Keryx Management Adjusted Akebia Projections (see “—Certain Keryx Management Unaudited Prospective Financial Information” beginning on page 86 of this joint proxy statement/prospectus).

On May 17, 2018, the Akebia Board held a telephonic meeting, together with members of Akebia management and representatives of J.P. Morgan and Evercore. The Akebia Board, Akebia management and its advisors discussed the opportunity presented by a potential transaction with Keryx, as well as financial analyses, diligence items and transaction structure. The Akebia Board reviewed the relationships between certain members of the Akebia Board and Keryx and certain members of the Akebia Board and Baupost that were previously discussed at the Akebia Board’s December 19, 2017 and January 4, 2018 meetings, and determined that it was in the best interest of Akebia to form the Akebia Transaction Committee that would be authorized by the Akebia Board to oversee Akebia’s activities with respect to the potential transaction, including among other things, to direct Akebia’s officers, employees and advisors with respect to the potential transaction and to explore and negotiate the potential transaction. The Akebia Transaction Committee consisted of the following Akebia Board members: Scott A. Canute, Michael D. Clayman, Maxine Gowen, Duane Nash and Michael S. Wyzga. Shortly thereafter and as further discussed below, the Akebia Transaction Committee engaged Abrams & Bayliss LLP (“Abrams”) to serve as legal counsel to the Akebia Transaction Committee.

On May 21, 2018, the Akebia Transaction Committee held a telephonic meeting together with members of Akebia management. Mr. Satter and Mr. Butler also attended at the invitation of the Akebia Transaction

 

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Committee. The Akebia Transaction Committee, Mr. Butler, Mr. Satter and Akebia management discussed the financial analyses and process updates for the potential transaction with Keryx.

On the morning of May 23, 2018, Mr. Butler met with Ms. Morrison in Boston, Massachusetts. During the course of the meeting, Mr. Butler provided Ms. Morrison with an overview of certain key terms of the potential transaction that Akebia planned to propose in a non-binding offer letter to Keryx.

On May 24, 2018, the Akebia Transaction Committee held a telephonic meeting together with members of Akebia management and representatives of J.P. Morgan, Evercore, Abrams and Latham & Watkins LLP (“Latham”), who had been retained by Akebia as outside legal counsel for the potential transaction with Keryx. The Akebia Transaction Committee also invited all members of the Akebia Board and each Akebia Board member attended the meeting. The Akebia Board, Akebia management and its advisors discussed the opportunity presented by the potential transaction and financial analyses relating to the potential transaction. During the meeting, the Akebia Transaction Committee and a representative from Abrams discussed the merger process to date, the independence of the members of the Akebia Transaction Committee, the Akebia directors’ fiduciary duties, and potential next steps to oversee the merger negotiations. The Akebia Board reviewed and discussed a draft non-binding offer letter that had been prepared by Akebia management and then directed Mr. Butler to send the offer letter to Keryx. The non-binding offer letter proposed, among other terms, a merger that would result in the shareholders of each company owning 50% of the combined company, which assumed, among other things, the full conversion of the Convertible Notes held by Baupost and that Baupost would provide a support agreement in favor of the transaction. The non-binding offer letter also provided that the Combined Board would consist of an equal number of directors from each company, including Mr. Butler, who would be the Chief Executive Officer of the combined company, and one additional independent director to serve as Chairperson, who would be selected by the other directors of the Combined Board.

On May 24, 2018, following the meeting of the Akebia Transaction Committee, Mr. Butler e-mailed the non-binding offer letter to Ms. Morrison.

On May 29, 2018, the Keryx Special Committee held a telephonic meeting at which members of Keryx management, MTS Health Partners and Goodwin participated. At the meeting, the Keryx Special Committee discussed the May 24, 2018 non-binding offer letter from Akebia, Keryx’s standalone prospects, the Keryx Management Adjusted Akebia Projections, the Keryx Management Akebia Projections (as described under the heading “—Certain Keryx Management Unaudited Prospective Financial Information” beginning on page 86 of this joint proxy statement/prospectus) and certain preliminary financial information prepared by MTS Health Partners. Members of the Keryx management team reported to the Keryx Special Committee on the assumptions underlying the Keryx Management Adjusted Akebia Projections, which projections Keryx management directed MTS Health Partners to use, along with the Keryx Projections, to prepare preliminary financial information discussed at this meeting. The Keryx Special Committee discussed the status of Akebia’s clinical trials and efforts towards the approval and commercial launch of vadadustat and Akebia’s improved cash position, as well as the challenges Keryx would face on a standalone basis, including as a result of recent departures of key members of the management team, that made a business combination between the two companies potentially more attractive to the Keryx shareholders at this time. The Keryx Special Committee also discussed the risks associated with operating as a public company with a portfolio consisting of only one commercialized product with no pipeline, including the impact on Keryx’s ability to raise financing on favorable terms, if at all. The Keryx Special Committee also noted, based on informal knowledge of the industry and on the outreach conducted by MTS Health Partners and Keryx management at the direction of the Keryx Special Committee in February and March of 2018, the lack of other viable potential merger partners or potential acquirers in the industry that would be likely to provide holders of Keryx Shares with the same potential value as a business combination with Akebia. In light of such factors and based on information discussed at the meeting, the Keryx Special Committee determined to continue discussions with Akebia for a merger of equals, noting that Keryx would work cooperatively to provide for the conversion of the Convertible Notes if Akebia required it to be a condition to the closing of the merger, and that any cost associated with such conversion would need to be shared

 

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equally between Keryx and Akebia. The Keryx Special Committee also determined to propose that the Combined Board consist of 11 members, with five directors from each of the Akebia Board and the Keryx Board, with the Keryx Board Designees selecting the eleventh member, an independent Chairperson who was not a member of either the Akebia Board or the Keryx Board. The Keryx Special Committee also noted that it was supportive of having Mr. Butler serve as the Chief Executive Officer of the combined company. After discussion, the Keryx Special Committee instructed management and the advisors to continue discussions with Akebia and to make a counterproposal on the terms discussed at this meeting.

On May 30, 2018, Ms. Morrison telephoned Mr. Butler to propose the transaction terms authorized by the Keryx Special Committee at the May 29, 2018 Keryx Special Committee meeting, and following such telephone conversation, sent Mr. Butler a non-binding counterproposal outlining such terms.

On June 1, 2018, representatives of Latham sent a draft of the Merger Agreement to Goodwin. The draft Merger Agreement provided, among other things (i) for a merger between Keryx and a wholly owned subsidiary of Akebia, in connection with which shareholders of Keryx would receive Akebia Shares in exchange for their Keryx Shares, (ii) for a transaction intended to be tax-free that resulted in Akebia as the surviving parent entity for purposes of the combined company and with Keryx as a wholly owned subsidiary of Akebia, (iii) that following the closing, the Combined Board would consist of (A) four directors from each of the Akebia Board and the Keryx Board, to be designated by the Akebia Board and the Keryx Board, respectively, and (B) one additional independent director, who was not a member of either the Akebia Board or the Keryx Board and would serve as Chairperson, and (iv) that following the closing, Mr. Butler would serve as Chief Executive Officer of the combined company. The draft Merger Agreement also included the condition that the Convertible Notes due 2021 held by Baupost must be converted into Keryx Shares before Akebia was obligated to proceed with closing of the Merger. The draft Merger Agreement also provided for largely reciprocal representations, warranties and covenants for both Akebia and Keryx relating to actions taken before the closing.

On June 5, 2018, the Akebia Board held a telephonic meeting, together with members of Akebia management and representatives of J.P. Morgan, Evercore and Latham. At the request of the Akebia Board, Akebia management prepared three sets of unaudited financial projections for Akebia in anticipation of such Akebia Board meeting, each of which was based on a different set of assumptions and was prepared for the purpose of evaluating a potential transaction with Keryx, (the “June 5th Projections”). The Akebia Board, Akebia management and its advisors discussed the opportunity presented by a potential transaction with Keryx and certain other financial analyses of the potential transaction. Representatives of Latham described the fiduciary duties of the Akebia Board in connection with the potential transaction. The Akebia Board directed Akebia management to continue working with Keryx with regard to the potential transaction.

Also on June 5, 2018, Akebia participated in a type-C meeting with the FDA, in which Akebia and the FDA aligned on the statistical analysis plan in advance of a planned NDA filing for vadadustat, the results of which were reported by Mr. Butler to Ms. Morrison.

On June 7, 2018, members of the Akebia and Keryx management teams met with representatives from Baupost to discuss the proposed transaction and whether Baupost would be willing to convert the Convertible Notes in connection with, and would otherwise be supportive of, a merger of the two companies. Baupost indicated that it would consider converting some or all of the Convertible Notes as part of the transaction, but that it would request consideration for agreeing to convert the Convertible Notes prior to the closing of the transaction, in the form of equity of the combined company, noting that it was not obligated to convert under the terms of the Indenture and that such conversion would entail its surrender of the value associated with holding the Convertible Notes for a longer period of time. Also at this meeting Akebia management reiterated that the Convertible Notes should be converted at no cost to Akebia.

Later on June 7, 2018, the Keryx Special Committee held a telephonic meeting at which members of Keryx management, MTS Health Partners and Goodwin participated. At this meeting, Ms. Morrison reported on the

 

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results of the Akebia type-C meeting with the FDA and on the meeting with Baupost. Also at this meeting, Goodwin presented the high-level open issues presented in the draft Merger Agreement provided by Latham. Ms. Morrison also reported to the Keryx Special Committee that she and Mr. Butler continued to discuss and consider the appropriate size and composition of the Combined Board. After discussion, the Keryx Special Committee authorized Goodwin to return a draft of the merger agreement to Latham on the terms discussed at the meeting, including to indicate, among other things, (a) that structure (including the tax implications of the transaction and the ultimate parent of the combined company) should be considered an open item until diligence is substantially completed, (b) the cost to convert the Convertible Notes should be shared equally between Akebia and Keryx, and (c) the Combined Board should consist of five designees from each of the Akebia Board and the Keryx Board, to be designated by the Akebia Board and the Keryx Board, respectively, with an additional eleventh director (not serving on the Keryx Board or the Akebia Board) to be designated by the Keryx Board Designees, who would serve as the Chairperson. Following such meeting, Goodwin sent Latham a revised draft of the Merger Agreement reflecting the terms discussed with the Keryx Special Committee.

On the afternoon of June 8, 2018, the Akebia Board held a telephonic meeting, together with members of Akebia management and representatives of J.P. Morgan, Evercore and Latham. Akebia management provided a status update to the Akebia Board, and the Akebia Board, Akebia management and its advisors discussed financial analyses relating to the potential transaction with Keryx. Following such Akebia Board meeting, Mr. Butler telephoned Ms. Morrison and informed Ms. Morrison that the Akebia Board was insisting on conversion of the Convertible Notes in full at the time of the merger, without any cost to Akebia.

On June 10, 2018, the Keryx Special Committee held a telephonic meeting at which members of Keryx management, MTS Health Partners and Goodwin participated. At this meeting, Ms. Morrison reported on her conversation with Mr. Butler. Also at this meeting, MTS Health Partners presented preliminary financial information regarding a preliminary range of proposed valuations for the early conversion by Baupost of the Convertible Notes. After discussion, the Keryx Special Committee authorized Keryx management and MTS Health Partners to discuss the preliminary range of proposed valuations and Akebia’s position with respect to the allocation of the cost of the conversion with representatives from Baupost.

On June 11, 2018, Ms. Morrison and other members of Keryx management and representatives of MTS Health Partners had a telephone call with representatives of Baupost. During this telephone call, Keryx management presented to Baupost a preliminary range of proposed valuations for the early conversion by Baupost of the Convertible Notes. Baupost indicated that the range at which Baupost was valuing an early conversion was considerably higher than the preliminary range of proposed valuations provided by Keryx, but agreed to take Keryx’s proposal under consideration and indicated it would revert with a proposal in the coming days. Baupost also reiterated that it would consider accepting consideration in the form of equity of the combined company.

Later on June 11, 2018, the Keryx Special Committee held a telephonic meeting at which members of Keryx management, MTS Health Partners and Goodwin participated. At this meeting, Ms. Morrison reported on the telephone call with Baupost and the difference in the valuation for the conversion posited by each of Baupost and Keryx. Following discussion, including discussion of the preliminary range of proposed valuations prepared by Keryx management and MTS Health Partners, the Keryx Special Committee decided that Ms. Morrison should communicate to Baupost Keryx’s view of the value of the conversion.

Following the Keryx Special Committee meeting, on June 11, 2018, Ms. Morrison telephoned a representative of Baupost, to inform him of the Keryx Special Committee’s view on the value of the conversion of the Convertible Notes. The representative of Baupost indicated that his view was that such valuation was unacceptable and that Baupost was viewing the value of the conversion to be higher, and that the cost should be split between Akebia and Keryx.

Also on June 11, 2018, the Akebia Transaction Committee held a telephonic discussion with representatives from Abrams. Mr. Satter also participated in the call. A representative from Abrams and members of the Akebia

 

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Transaction Committee addressed certain aspects of the negotiations with Keryx and Baupost requiring the oversight of the Akebia Transaction Committee.

During the period from June 12, 2018 to June 14, 2018, Akebia management, in consultation with the Akebia Board, determined that certain key assumptions underlying the June 5th Projections were no longer applicable because of additional information that became available to Akebia subsequent to preparing the June 5th Projections, including assumptions around timing for clinical trial completion and commercial launch. As a result, Akebia management and the Akebia Board determined that the June 5th Projections were outdated and should not be used by Akebia in connection with evaluating a potential transaction with Keryx. Following such determination, the Akebia Board directed Akebia management to prepare an updated single set of unaudited financial projections that would more accurately reflect the risks and probability of success of Akebia’s lead product candidate, vadadustat, certain revenue projections, timing for clinical trial completion and commercial launch, and estimated operational costs. Akebia management then prepared, and provided to the Akebia Board, J.P. Morgan and Evercore, the Risk-Adjusted Akebia Management Akebia Projections, a more detailed description of which can be found under the section titled “—Certain Akebia Management Unaudited Prospective Financial Information—Akebia Management Akebia Projections” beginning on page 102 of this joint proxy statement/prospectus.

On June 13, 2018, representatives from Akebia, along with representatives from Latham and Goodwin, met at Akebia’s offices in Cambridge, Massachusetts, to discuss and negotiate certain terms of the Merger Agreement and other transaction documents, along with ongoing diligence matters.

On June 14, 2018, the Akebia Transaction Committee held a telephonic meeting, together with representatives from Abrams and Ernst & Young LLP (“Ernst & Young”), independent auditors for Akebia. A representative from Abrams reviewed certain issues raised by the draft Merger Agreement, including the conversion of the Convertible Notes and issues related to the post-closing governance of the combined company. A representative from Ernst & Young provided an update on Akebia’s due diligence of Keryx.

On June 14, 2018, the Akebia Board held a meeting, together with members of Akebia management. Representatives of J.P. Morgan, Evercore, Latham and Abrams were also present. Akebia management provided a status update to the Akebia Board, and the Akebia Board, Akebia management and its advisors discussed financial analyses relating to the potential transaction with Keryx. Representatives from Latham described the fiduciary duties of the Akebia Board and provided an update on the discussions and negotiations that had taken place since the prior Akebia Board meeting on June 5, 2018.

On June 15, 2018, Mr. Butler had a telephone conversation with Ms. Morrison to discuss certain transaction-related matters and to inform Ms. Morrison that Akebia planned to update its guidance on the timing of top-line results for the vadadustat clinical trial programs.

On June 16, 2018, Latham sent a revised draft of the Merger Agreement to Goodwin. The revised draft provided that the Combined Board would consist of (A) four directors from each of the Akebia Board and the Keryx Board, to be designated by the Akebia Board and the Keryx Board, respectively and (B) one additional independent director, not serving on the Keryx Board or the Akebia Board, to be designated by the Keryx Board, who would serve as Chairperson of the Combined Board, provided that the Keryx Board Designees could choose one of the Keryx Board Designees to be the Chairperson of the Combined Board and in such an event, the Continuing Directors and the Keryx Board Designees would choose a ninth Board member, who was neither a member of the Akebia Board nor the Keryx Board, provided that all of the designees would be reasonably acceptable to the other party.

On June 17, 2018, the Keryx Board held a telephonic meeting at which members of Keryx management, MTS Health Partners, Goodwin and Mintz Levin participated. At this meeting, Ms. Morrison reported on the status of the negotiations with Baupost and MTS Health Partners provided an overview of the preliminary financial information regarding the preliminary range of proposed valuations for an early conversion of the

 

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Convertible Notes. The Keryx Board also reviewed the preliminary financial information regarding the proposed transaction prepared by MTS Health Partners. Goodwin described the Keryx Board’s fiduciary duties in connection with a merger of equals transaction. Goodwin also reviewed the status of and open items in the Merger Agreement, including which company would be the surviving parent entity for purposes of the combined company. Keryx management provided the Keryx Board with a report on Keryx’s due diligence findings and Akebia’s due diligence efforts, and reported on outstanding diligence items for both parties. The Keryx Board instructed management and its advisors to continue discussions with Akebia and Baupost concerning the Merger.

Also on June 17, 2018, the Akebia Transaction Committee held a telephonic meeting, together with Mr. Satter and representatives from Abrams and Ernst & Young. A representative from Abrams reviewed the Akebia negotiating positions and options relating to key open issues under the proposed Merger Agreement and provided an overview regarding anticipated topics for discussion at the Akebia Board meeting scheduled for June 18, 2018. A representative from Ernst & Young provided an update on Akebia’s due diligence of Keryx.

On June 18, 2018, Goodwin sent a revised draft of the Merger Agreement to Latham. The revised draft noted that the transaction structure and the construct of the Combined Board were still under consideration by Keryx.

On the morning of June 18, 2018, the Akebia Board held a telephonic meeting, together with members of Akebia management. Representatives of Latham and Abrams were also present. Representatives of Latham described the fiduciary duties of the Akebia Board, along with the proposed terms of the transaction documents, including the Merger Agreement, with a particular focus on open issues, including the transaction structure, the treatment of the Convertible Notes held by Baupost and the composition of the Combined Board.

Between June 18, 2018 and June 23, 2018, Akebia’s Chief Business Officer and representatives of Keryx management (with representatives of MTS Health Partners present) spoke by telephone and in-person with representatives of Baupost on the terms of the conversion of the Convertible Notes. Akebia’s Chief Business Officer communicated Akebia’s position that the Baupost conversion should occur prior to the Effective Time and at no cost to Akebia (subject to approval by the Keryx Board and the Akebia Board). At the end of such discussions, Baupost proposed to Keryx that, as compensation for the value Baupost was losing by converting the Convertible Notes earlier than it was otherwise required, Baupost should receive appropriate consideration, proposed in the form of the Additional Shares (which represented approximately $20.0 million in value at that time). The Keryx representative then communicated Baupost’s position to Akebia’s Chief Business Officer, who responded that such a proposal would need to be discussed further with Akebia management and advisors, as well as the Akebia Board.

On June 20, 2018, the Akebia Board held a telephonic meeting, together with representatives from Akebia management, Evercore, J.P. Morgan and Latham. Management presented an overview of the Risk-Adjusted Akebia Management Akebia Projections, the Akebia Management Keryx Projections and the Akebia Management Pro Forma Projections. The Akebia Board discussed the revised terms of the transaction, including the split of equity in the combined company between the Akebia and Keryx equity holders, the terms of the conversion of the Convertible Notes and the composition of the Combined Board. At this meeting, the Akebia Board, in consultation with Akebia management, determined that, in order to cause Baupost and Keryx to convert the Convertible Notes and enter into a support agreement concerning the Merger, the most recent Baupost proposal would be acceptable to Akebia, resulting in the allocation of 4,000,000 Keryx Shares to Baupost, the cost of which would be split evenly between Keryx and Akebia when formulating the Exchange Multiplier.

Between June 20, 2018 and June 23, 2018, members of Akebia management had discussions with members of Keryx management on a number of topics including the transaction documents, due diligence matters and the timing of the proposed transaction.

On June 20, 2018, the Akebia Transaction Committee held a telephonic meeting, together with representatives from Abrams and Ernst & Young. A representative from Ernst & Young provided an update

 

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regarding Akebia’s ongoing due diligence of Keryx. A representative from Abrams reviewed Akebia’s next steps in connection with the Akebia Transaction Committee’s assessment of Ernst & Young’s due diligence relating to Keryx.

On June 22, 2018, Latham sent a revised draft of the Merger Agreement to Goodwin. On June 23, 2018, Goodwin sent a revised draft of the Merger Agreement to Latham. Also on that date, Latham and Goodwin discussed and negotiated the terms of the Keryx Voting Agreement and Akebia Voting Agreement with counsel to Baupost and Mr. Satter.

On June 23, 2018, the Keryx Special Committee held a telephonic meeting at which representatives of MTS Health Partners and Goodwin participated. At this meeting, Ms. Morrison reported that while progress had been made on negotiating the definitive agreements and with the Baupost arrangements, there remained some open diligence items on both sides.

On June 24, 2018, the Keryx Board held a telephonic meeting at which members of Keryx management, MTS Health Partners, Goodwin and Mintz Levin participated. Ms. Morrison gave the Keryx Board an update on the potential merger with Akebia, including that progress had been made on negotiating the definitive agreements and with the Baupost arrangements. Ms. Morrison noted that there were some remaining due diligence items on both sides, and noted that progress had been made on such items since the meeting of the Keryx Special Committee the previous day. Also at this meeting, Goodwin provided the Keryx Board with an overview of the remaining open items in the Merger Agreement, which included the composition and size of the Combined Board and the amount of the reciprocal termination fee.

Also on June 24, 2018, the Akebia Board held a telephonic meeting, together with members of Akebia management. Representatives of J.P. Morgan, Evercore, Latham and Abrams were also present. Akebia management updated the Akebia Board on diligence matters to date. Representatives from Latham described the fiduciary duties of the Akebia Board and provided an update regarding the terms of the Merger Agreement, the Notes Conversion Agreement, the Akebia Voting Agreement and the Keryx Voting Agreement, including the resolution of certain terms, such as the structure of the transaction and that the Baupost registration rights agreement would not be entered into until the Effective Time. Representatives of Latham also discussed the terms that remained subject to further negotiation, particularly certain covenants of the parties to be completed before the Effective Time. Representatives of J.P. Morgan and Evercore then presented their respective financial analyses of the transaction. The Akebia Board discussed their views on the remaining open items in the Merger Agreement and authorized Akebia management to continue negotiating with Keryx to finalize the Merger Agreement.

On the afternoon of June 24, 2018, the Akebia Transaction Committee held a telephonic meeting, together with representatives from Abrams and Ernst & Young. A representative from Abrams provided an update regarding proposed changes to the Merger Agreement. A representative from Ernst & Young provided an update regarding Akebia’s due diligence of Keryx.

On the morning of June 25, 2018, the Akebia Board held a telephonic meeting, together with members of Akebia management. Representatives of Latham and Abrams were also present. The Akebia Board, Akebia management and its advisors discussed diligence, certain terms of the Merger Agreement and the opportunity presented by the potential transaction.

On the afternoon of June 25, 2018, Latham sent a revised draft of the Merger Agreement to Goodwin, reflecting changes that were discussed in the meeting of the Akebia Board meeting earlier that day.

On the evening of June 25, 2018, the Akebia Board held a telephonic meeting, together with members of Akebia management. Representatives of Latham, Abrams and Morris, Nichols, Arsht & Tunnell LLP, Akebia’s Delaware legal counsel, were also present. The Akebia Board, Akebia management and its advisors discussed diligence and certain terms of the Merger Agreement.

 

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On June 26, 2018, the Akebia Board held a telephonic meeting, together with members of Akebia management. Representatives of J.P. Morgan, Evercore, Latham and Abrams were also present. Representatives of J.P. Morgan and Evercore presented financial analyses on the transaction and the form of opinion they were proposing to provide as to whether the Exchange Multiplier was fair, from a financial point of view, to Akebia. Representatives from Latham provided an update on the terms of the transaction since the prior Akebia Board meeting. The Akebia Board discussed items that remained subject to negotiation in the transaction documents and provided guidance on such items relating to covenants to be complied with before the Effective Time, including receiving the final Keryx diligence items requested by Akebia management. The Akebia Board confirmed its approval of the transaction documents, subject to those final terms being accepted by Keryx. Mr. Butler discussed a proposed timeline to finalize the Merger Agreement and announce a transaction.

Later on June 26, 2018, Mr. Butler informed Ms. Morrison that the Akebia Board had approved the transaction documents, subject to the final terms being accepted by Keryx. During such conversation, Ms. Morrison identified open items that would need to be finalized before the Keryx Board would approve the transaction. Thereafter, Akebia, Keryx and their respective advisors finalized due diligence and negotiation of the ancillary definitive documentation, including the Akebia Voting Agreement, the Keryx Voting Agreement and the Notes Conversion Agreement, and on June 27, 2018 met in person at Goodwin’s Boston office to finalize the terms of the Merger Agreement. The results of these negotiations were reported to the Keryx Board during a regularly scheduled meeting being held at Keryx’s offices in Boston, Massachusetts on June 27, 2018. The Keryx Board authorized Keryx management and advisors to finalize the definitive documentation and communications plan for final consideration and approval by the Keryx Board and the Keryx Special Committee.

Later on June 27, 2018, the Keryx Special Committee and the Keryx Board held a joint telephonic meeting at which members of Keryx management, MTS Health Partners, Goodwin and Mintz Levin participated. During the meeting, a representative of MTS Health Partners reviewed with the Keryx Board its financial analysis of the proposed transaction. Following discussion, MTS Securities provided an oral opinion (which was subsequently confirmed in writing as of June 27, 2018) that, as of the date of the MTS Opinion and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth therein, the Exchange Multiplier to be received by holders of Keryx Shares in the Merger is fair, from a financial point of view, to such holders (other than holders of Excluded Shares, Baupost and their respective affiliates). The full text of the MTS Opinion sets forth the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by MTS Securities in connection with the MTS Opinion. The MTS Opinion is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. For a more complete discussion of the MTS Opinion, see the section entitled “—Opinion of Keryx’s Financial Advisor—MTS Securities, LLC” beginning on page 90 of this joint proxy statement/prospectus. Goodwin described the Keryx Board’s fiduciary duties and the key provisions of the Merger Agreement and ancillary documents. The Keryx Board asked questions and discussed the Merger Agreement provisions and related matters. After discussion in which the Keryx Special Committee and the Keryx Board considered the factors discussed further in “Keryx’s Reasons for the Merger; Recommendation of the Keryx Board” beginning on page 78 of this joint proxy statement/prospectus, the members of the Keryx Board, upon the unanimous recommendation of the Keryx Special Committee, unanimously approved the Merger Agreement and the transactions contemplated by the Merger Agreement. The Keryx Board also deemed it advisable, and in the best interests of Keryx and its shareholders, to consummate the Merger and the other transactions contemplated by the Merger Agreement, on the terms and subject to the conditions set forth in the Merger Agreement, and to recommend that Keryx shareholders adopt the Merger Agreement.

On the morning of June 28, 2018, the Akebia Transaction Committee held a telephonic meeting, together with representatives from Abrams, Ernst & Young, and Jason A. Amello, Akebia’s Senior Vice President, Chief Financial Officer and Treasurer. Mr. Wyzga and a representative from Abrams provided an overview regarding the proposed final version of the Merger Agreement. The members of the Akebia Transaction Committee deliberated regarding the terms of the Merger Agreement, determined such terms are in the best interests of Akebia, and unanimously determined to recommend approval of the Merger Agreement to the Akebia Board.

 

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On the morning of June 28, 2018, following the Akebia Transaction Committee meeting, the Akebia Board held a telephonic meeting together with members of Akebia management. Representatives of J.P. Morgan, Evercore, Latham and Abrams were also present. Representatives of Latham reviewed the proposed final terms of the Merger Agreement, focusing on the changes to the Merger Agreement since the June 26, 2018 Akebia Board meeting. The closing trading price of Akebia common stock on June 27, 2018 was $10.38 and the Exchange Ratio represented a 15.3% premium to that price. Representatives of J.P. Morgan and Evercore then each reviewed with the Akebia Board their financial analyses of the transaction and each delivered to the Akebia Board an oral opinion, which was confirmed by delivery of a written opinion dated June 28, 2018, that as of that date and based on and subject to various assumptions, procedures, factors, qualifications, limitations and other matters described in their respective opinions, the Exchange Multiplier was fair, from a financial point of view, to holders of Akebia Shares. For a detailed discussion of the opinions provided by J.P. Morgan and Evercore, please see “—Opinion of Akebia’s Financial Advisor – Evercore Group L.L.C.” and “—Opinion of Akebia’s Financial Advisor – J.P. Morgan Securities LLC” beginning on pages 107 and 113, respectively, of this joint proxy statement/prospectus. After further discussion and the unanimous recommendation of the Akebia Transaction Committee to approve the Merger Agreement and the related transaction documents, the Akebia Board unanimously determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement were advisable and in the best interests of Akebia and its shareholders, approved and declared advisable the Merger Agreement and the Merger, and recommended that Akebia shareholders vote to approve the issuance of Akebia Shares in connection with the Merger.

On the morning of June 28, 2018, following the Akebia Board meeting, Akebia and Keryx executed the Merger Agreement. Akebia, Keryx and Baupost also executed the Notes Conversion Agreement. Akebia and Baupost executed the Keryx Voting Agreement, and Keryx and Mr. Satter executed the Akebia Voting Agreement.

Before the opening of Nasdaq trading on June 28, 2018, Akebia and Keryx issued a joint press release announcing entry into the Merger Agreement and held a joint conference call to discuss the Merger.

On October 1, 2018, Akebia, Keryx and Merger Sub entered into the First Amendment to the Merger Agreement, revising the composition of the Akebia Board effective immediately after the Effective Time to provide for certain changes to the combined company board structure as discussed in “—The Combined Company Board and Management After the Merger” beginning on page 120 of this joint proxy statement/prospectus.

Keryx’s Reasons for the Merger; Recommendation of the Keryx Board

Following a review and discussion of all relevant information regarding the Merger, at a meeting held on June 27, 2018, the Keryx Board, on the recommendation of the Keryx Special Committee: (1) determined that the Merger Agreement and the Merger are in the best interests of Keryx and its shareholders, (2) approved the Merger Agreement and the transactions contemplated by the Merger Agreement, including the Merger, and declared the Merger Agreement advisable, (3) recommended that the Keryx shareholders adopt the Merger Agreement, and (4) directed that the Merger Agreement be submitted for consideration by the Keryx shareholders at the Keryx Special Meeting.

ACCORDINGLY, THE KERYX BOARD RECOMMENDS THAT KERYX SHAREHOLDERS VOTE “FOR” THE PROPOSAL TO ADOPT THE MERGER AGREEMENT, “FOR” THE PROPOSAL TO APPROVE THE ADJOURNMENT OF THE KERYX SPECIAL MEETING IF NECESSARY OR APPROPRIATE TO SOLICIT ADDITIONAL PROXIES IF THERE ARE NOT SUFFICIENT VOTES TO ADOPT THE MERGER AGREEMENT, AND “FOR” THE PROPOSAL TO APPROVE, ON A NON-BINDING, ADVISORY BASIS, COMPENSATION THAT MAY BE PAYABLE TO KERYX’S NAMED EXECUTIVE OFFICERS RELATING TO THE MERGER.

The Keryx Board believes that the Merger presents a strategic opportunity to expand value for the Keryx shareholders through a combination with the complementary business of Akebia. In reaching its decision to

 

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approve the Merger Agreement and recommend the adoption of the Merger Agreement to its shareholders, the Keryx Special Committee and the Keryx Board consulted with Keryx management, as well as its legal and financial advisors, and considered a number of factors, including, among others, the following:

 

   

Knowledge of Keryx’s and Akebia’s Businesses and Financial Condition. The Keryx Special Committee’s, the Keryx Board’s and management’s knowledge of Keryx’s business, operations, financial condition, and prospects, and their respective understanding of Akebia’s business, operations, financial condition, and prospects, including the information obtained through due diligence;

 

   

Establishes a Leading Renal Company with Enhanced Position and Large Market Opportunity. The fact that Keryx’s business and operations complement those of Akebia and that the transaction will create a fully integrated biopharmaceutical company focused with an expected implied equity value of approximately $1.3 billion as of the signing of the Merger Agreement;

 

   

Expanded and Complementary Nephrology Portfolio. The potential of the combined company to offer therapeutic options to patients across all stages of CKD, and the potential to become a partner of choice for the renal community and for companies developing renal products, which would create long-term shareholder value;

 

   

Financial Strength and Opportunities. The expected synergies to be realized by the combined company, and the opportunity of the combined company to have superior future earnings and prospects compared to Keryx’s future earnings and prospects on a standalone basis, including because the combined company will have the infrastructure to maximize the market potential of Auryxia and build launch momentum for vadadustat in the United States, subject to FDA approval;

 

   

Significant Synergy Potential. The Merger with Akebia provides the Keryx shareholders with the opportunity to gain access to an innovative Phase 3 product candidate with the potential to compete in a complementary market to Keryx’s only product, Auryxia, as well as the opportunity to gain a seasoned Chief Executive Officer;

 

   

Challenges that Keryx Would Face on a Standalone Basis. The challenges facing Keryx if it were to continue on a standalone basis, including its limited ability to pursue viable business development opportunities in light of its cash position and significant debt, and a lack of resources given that Keryx was operating without a complete management team, its ability to attract key management candidates, including a permanent chief executive officer, and the risks inherent in being a single-product company with no meaningful pipeline and also the belief that Akebia is the merger partner most likely to provide Keryx’s shareholders with long-term value;

 

   

Participation in Potential Appreciation. The fact that holders of Keryx Shares will receive Akebia Shares pursuant to the Merger, the potential that the value of Akebia Shares, as the combined company, will increase after the completion of the Merger, and the participation of Keryx shareholders in any increase in that value;

 

   

Voting Agreements. Baupost, which owns approximately [ ● ]% of the outstanding Keryx Shares as of the record date for the Keryx Special Meeting, prior to any conversion of the Convertible Notes and issuance of the Additional Shares, agreed to convert the Convertible Notes into Keryx Shares prior to closing and entered into the Keryx Voting Agreement in support of the transaction. Mr. Satter, Chairperson of the Akebia Board and a shareholder who owns approximately [ ● ]% of outstanding Akebia Shares as of the record date for the Akebia Special Meeting, has also agreed to support the transaction by entering into the Akebia Voting Agreement. The Keryx Board viewed Baupost’s and Mr. Satter’s support for the Merger favorably;

 

   

Value of Consideration Received. The value of the consideration to be received by Keryx shareholders as a result of the Merger and the relationship between the current and historical market values of the Keryx Shares, and the percentage of the combined company that Keryx shareholders would own following the Merger;

 

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Receipt of Fairness Opinion of MTS Securities. The opinion of MTS Securities, rendered orally to the Keryx Board on June 27, 2018 (and subsequently confirmed in writing as of June 27, 2018), that, as of the date of the MTS Opinion and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth therein, the Exchange Multiplier to be received by the holders of Keryx Shares (other than holders of Excluded Shares, Baupost and their respective affiliates) in the Merger is fair, from a financial point of view, to such holders (the full text of the MTS Opinion, which sets forth the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by MTS Securities in connection with the MTS Opinion, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference), as more fully described under the section entitled “—Opinion of Keryx’s Financial Advisor – MTS Securities, LLC” beginning on page 90 of this joint proxy statement/prospectus;

 

   

The Terms of the Merger Agreement. The terms and conditions of the Merger Agreement as negotiated by Keryx management, including:

 

   

Fixed Exchange Multiplier. The fact that the Merger Consideration is based on a fixed Exchange Multiplier provides certainty as to the number of Akebia Shares that will be issued to Keryx shareholders;

 

   

Reciprocity. The review by the Keryx Board, in consultation with Keryx’s advisors, of the structure of the Merger and the terms and conditions of the Merger Agreement, including certain reciprocal provisions that may have the effect of discouraging alternative acquisition proposals involving Akebia or Keryx and their ability to terminate the Merger Agreement;

 

   

Conditions to Consummation of the Merger. The limited number and nature of the conditions to the parties’ obligations to complete the Merger and the belief of the Keryx Board of the likelihood of satisfying such conditions;

 

   

Right to Withdraw Recommendation to Keryx Shareholders. In certain circumstances, the Keryx Board has the right under the Merger Agreement to withdraw its recommendation to Keryx shareholders that they approve the Keryx Merger Proposal;

 

   

Opportunity to Vote. Keryx shareholders will have an opportunity to vote on the adoption of the Merger Agreement;

 

   

Termination Fee. Akebia is obligated to pay Keryx a termination fee of $22 million in certain circumstances as summarized under “The Merger Agreement—Termination Fees and Expenses” beginning on page 147 of this joint proxy statement/prospectus; and

 

   

Expense Reimbursement Amount. Akebia is obligated to reimburse Keryx an expense amount not to exceed $6 million under certain termination circumstances summarized under “The Merger Agreement—Termination Fees and Expenses” beginning on page 147 of this joint proxy statement/prospectus;

 

   

Ability to Negotiate with Third Parties. The ability of Keryx under the terms of the Merger Agreement to negotiate with third parties concerning certain unsolicited competing business combination proposals if Keryx were to receive such a proposal prior to the adoption of the Merger Agreement by the Keryx shareholders, and to terminate the Merger Agreement to accept a superior proposal under certain circumstances;

 

   

Consideration of Alternatives. The Keryx Board had considered certain alternatives to the Merger and determined that entering into the Merger Agreement was more favorable to Keryx shareholders than other alternatives available to Keryx, including continued operation of Keryx on a standalone basis or the pursuit of potential alternative transactions;

 

   

Likelihood of Completing the Merger. The likelihood of completing the Merger on the anticipated schedule;

 

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Composition of Combined Board. The fact that, under the Merger Agreement at signing, four representatives from the Keryx Board would be directors of the Combined Board, and, pursuant to the First Amendment to the Merger Agreement, the fact that five representatives from the Keryx Board will be directors of the Combined Board and that the Akebia Board and the Keryx Board will jointly designate the Additional Director, who will serve as Chairperson of the Combined Board; and

 

   

Tax-Free Reorganization. The intention that the Merger will be treated as a tax-free reorganization for U.S. federal income tax purposes. 

The Keryx Special Committee and the Keryx Board also weighed the factors described above against certain factors and potential risks associated with entering into the Merger Agreement, including, among others, the following:

 

   

the fact that the Exchange Multiplier is fixed, which means that Keryx shareholders could be adversely affected by a decrease in the trading price of the Akebia Shares relative to the trading price of the Keryx Shares during the pendency of the transaction;

 

   

the fact that the integration of Akebia and Keryx may be complex and time consuming and may require substantial resources and effort, and the risk that if the combined company is not successfully integrated, the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected, including the possibility that anticipated strategic and other benefits to Keryx and the combined company following completion of the Merger, including the expected synergies, will not be realized or will take longer to realize than expected;

 

   

the potential for diversion of management and employee attention, which resources are already limited, and for increased employee attrition during the period prior to completion of the Merger, and the potential effect of the Merger on Keryx’s business and relations with healthcare providers, patients, regulators, partners, and suppliers;

 

   

the restrictions on the conduct of Keryx’s business prior to completion of the Merger, requiring Keryx to conduct its business only in the ordinary course, subject to specific limitations, which could delay or prevent Keryx from undertaking business opportunities that may arise pending completion of the Merger and could negatively impact Keryx’s relationships with employees, healthcare providers, patients, regulators, partners, and suppliers;

 

   

the fact that the Merger Agreement includes certain restrictions on the ability of Keryx to solicit proposals for alternative transactions or engage in discussions regarding such proposals;

 

   

the requirement for Keryx to pay a $22 million termination fee to Akebia in certain circumstances;

 

   

the transaction costs to be incurred by Keryx in connection with the Merger; and

 

   

the various other applicable risks associated with Keryx and Akebia and the Merger, including the risks described in “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” beginning on pages 36 and 47, respectively, of this joint proxy statement/prospectus.

In considering the recommendation of the Keryx Board with respect to the proposal to adopt the Merger Agreement, Keryx shareholders should be aware that some of Keryx’s directors and executive officers may have interests in the Merger that are different those of Keryx shareholders. The Keryx Board was aware of and considered these interests, among other matters, in evaluating the Merger Agreement and the transactions contemplated by the Merger Agreement, and in recommending that the Merger Agreement be adopted by the Keryx shareholders. See “— Interests of Keryx Directors and Executive Officers in the Merger” beginning on page 120 of this joint proxy statement/prospectus.

The foregoing discussion of the information and factors considered by the Keryx Special Committee and the Keryx Board in reaching its conclusions and recommendations is not intended to be exhaustive, but includes the

 

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material factors considered by the Keryx Special Committee and the Keryx Board. In view of the wide variety of factors considered in connection with its evaluation of the Merger Agreement and the transactions contemplated by the Merger Agreement, and the complexity of these matters, neither the Keryx Special Committee nor the Keryx Board found it practicable to, and did not attempt to, quantify, rank or assign any relative or specific weights to the various factors considered in reaching its determination and making its recommendation. In addition, individual directors may have given different weights to different factors. The Keryx Special Committee and the Keryx Board considered all of the foregoing factors as a whole and based its recommendation on the totality of the information presented.

The foregoing discussion also contains forward-looking statements with respect to future events that may have an effect on Keryx’s business, financial condition, or results of operations or the future financial performance of the combined company. See “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” beginning on pages 36 and 47, respectively, of this joint proxy statement/prospectus.

Akebia’s Reasons for the Merger; Recommendation of the Akebia Board

After consideration, and following the unanimous recommendation of the Akebia Transaction Committee, the Akebia Board, by a unanimous vote of all directors at its meeting on June 28, 2018, approved the Merger Agreement and the transactions contemplated thereby, including the Akebia share issuance.

FOR THE REASONS SET FORTH BELOW, THE AKEBIA BOARD UNANIMOUSLY DECLARED THAT THE MERGER AGREEMENT, THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, INCLUDING THE AKEBIA SHARE ISSUANCE ARE ADVISABLE AND IN THE BEST INTERESTS OF AKEBIA AND ITS SHAREHOLDERS AND UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE AKEBIA SHARE ISSUANCE. THE AKEBIA BOARD UNANIMOUSLY RECOMMENDS TO AKEBIA’S SHAREHOLDERS THAT THEY VOTE “FOR” THE AKEBIA SHARE ISSUANCE PROPOSAL AND “FOR” THE AKEBIA ADJOURNMENT PROPOSAL.

In the course of evaluating the Merger Agreement and the transactions contemplated thereby, including the Akebia share issuance, the Akebia Board consulted with Akebia management and Akebia’s legal and financial advisors and considered a number of factors in reaching its decision to approve the Merger Agreement and the transactions contemplated thereby, including the Akebia share issuance, which included the following (not in order of relative importance):

 

   

Establishes a Leading Renal Company with Enhanced Position and Large Market Opportunity. Combining Akebia and Keryx is expected to create a sustainable, kidney disease-focused, therapeutic leader that is well positioned to be a partner of choice throughout the renal community and for companies developing renal products;

 

   

Expanded and Complementary Nephrology Portfolio. Upon consummation of the Merger, Akebia will have a complementary portfolio comprising Keryx’s commercial product, Auryxia, and Akebia’s product candidate, vadadustat. Auryxia and vadadustat, if approved by the FDA, have the potential to deliver an all-oral treatment approach for patients with anemia due to CKD. More broadly, the combined company will have the potential to offer therapeutic options to patients across all stages of CKD, including non-dialysis dependent and dialysis dependent patients;

 

   

Financial Strength and Opportunities. Based on the unaudited pro forma cash and cash equivalent balance as of March 31, 2018, the combined company is expected to have a balance of approximately $453 million of cash and cash equivalents. This cash and cash equivalent balance, along with the expected cost synergies of greater than $250 million to be realized five years following closing, and the potential for increasing revenues from Auryxia, are expected to provide the combined company with significant financial strength and flexibility to enable continued growth;

 

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Significant Synergy Potential. The combined company will bring together Keryx, a commercial organization, with Akebia, a research and development organization that is currently driving an approximately 7,000-patient global Phase 3 clinical program. The combined company will have an established renal development, manufacturing and commercial organization, and plans to leverage its leadership’s extensive expertise in the commercial renal market with the goal of maximizing sales of Auryxia while driving launch momentum for vadadustat in the United States, subject to its approval by the FDA. Keryx’s established U.S. sales and marketing organization and its medical affairs team have built strong awareness within the nephrology community to address the needs of patients with CKD, and will drive the launch preparation and execution for vadadustat in the United States, subject to its approval by the FDA;

 

   

Experienced Renal Management Team. The combined company will be led by a management team with a long track record of success developing, launching and commercializing products for patients with kidney disease. Mr. Butler, Akebia’s President and Chief Executive Officer, will lead the combined company as Chief Executive Officer. Mr. Butler has nearly two decades of executive experience in the commercial renal therapeutic field, including as the leader of Genzyme Corporation’s renal business;

 

   

Representation on the Akebia Board. The fact that four members of the Akebia Board will serve as members of the Combined Board, and pursuant to the First Amendment to the Merger Agreement, the fact that the Akebia Board and the Keryx Board will jointly designate the Additional Director, who will serve as the Chairperson of the Combined Board;

 

   

Participation in Potential Appreciation. After giving effect to the Merger, Akebia shareholders will own approximately 49.4% of the combined company based on the companies’ fully diluted market capitalizations as of the signing of the Merger Agreement and also taking into account the Additional Shares to be issued to Baupost prior to consummation of the Merger, and as a result, Akebia shareholders would participate in the future growth of the combined company after the consummation of the Merger;

 

   

Voting Agreements. Baupost, which owns approximately [ ● ]% of the outstanding Keryx Shares as of the record date for the Keryx Special Meeting, prior to any conversion of the Convertible Notes, agreed to convert the Convertible Notes into Keryx Shares prior to closing and entered into the Keryx Voting Agreement in support of the transaction. Mr. Satter, Chairperson of the Akebia Board and a shareholder who owns approximately [ ● ]% of outstanding Akebia Shares as of the record date for the Akebia Special Meeting, has also agreed to support the transaction by entering into the Akebia Voting Agreement. The Akebia Board viewed Baupost’s and Mr. Satter’s support for the Merger favorably;

 

   

Financial Analyses of Evercore and J.P. Morgan; Receipt of Fairness Opinions. The financial presentations of Evercore and J.P. Morgan and their oral opinions (which were subsequently confirmed in their written opinions, each dated June 28, 2018) to the Akebia Board that, as of the date of and based on and subject to various assumptions procedures, factors, qualifications, limitations and other matters described in their respective written opinions, the Exchange Multiplier was fair, from a financial point of view, to Akebia shareholders. The full text of the opinions of Evercore and J.P. Morgan, which set forth the assumptions made, procedures followed, matters considered, and limitations on the reviews undertaken by Evercore and J.P. Morgan in connection with the Evercore opinion and the J.P. Morgan opinion, respectively, are attached as Annex C and Annex D, respectively, to this joint proxy statement/prospectus and are incorporated herein by reference), as more fully described under the sections entitled “The MergerOpinion of Akebia’s Financial Advisor – Evercore Group L.L.C.” and “The MergerOpinion of Akebia’s Financial Advisor – J.P. Morgan Securities LLC” beginning on pages 107 and 113, respectively, of this joint proxy statement/prospectus;

 

   

Knowledge of Akebia’s and Keryx’s Businesses and Financial Condition. The Akebia Board’s knowledge of Akebia’s business, financial condition, results of operations and prospects, as well as Keryx’s business, financial condition, results of operations and prospects, taking into account the

 

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discussions of Akebia management with Keryx management and the results of Akebia’s due diligence review of Keryx, which included review of historical financial results and projections, existing agreements, contingent liabilities and legal and other matters, and the subsequent recommendation of the Merger by Akebia management;

 

   

Terms of the Merger Agreement. The terms and conditions of the Merger Agreement, including:

 

   

Fixed Exchange Multiplier. The fact that the Merger Consideration is based on a fixed Exchange Multiplier provides certainty as to the number of Akebia Shares that will be issued to Keryx shareholders;

 

   

Reciprocity. The review by the Akebia Board, in consultation with Akebia’s advisors, of the structure of the Merger and the terms and conditions of the Merger Agreement, including certain reciprocal provisions that may have the effect of discouraging alternative acquisition proposals involving Akebia or Keryx and their ability to terminate the Merger Agreement;

 

   

Conditions to Consummation of the Merger. The limited number and nature of the conditions to the parties’ obligations to complete the Merger and the belief of the Akebia Board of the likelihood of satisfying such conditions;

 

   

Right to Withdraw Recommendation to Akebia Shareholders. In certain circumstances, the Akebia Board has the right under the Merger Agreement to withdraw its recommendation to Akebia shareholders that they approve the Akebia Share Issuance Proposal;

 

   

Opportunity to Vote. Akebia shareholders will have an opportunity to vote on the issuance of the Akebia Shares in connection with the Merger;

 

   

Termination Fee. Keryx is obligated to pay Akebia a termination fee of $22 million in certain circumstances as summarized under “The Merger Agreement—Termination Fees and Expenses” beginning on page 147 of this joint proxy statement/prospectus; and

 

   

Expense Reimbursement Amount. Keryx is obligated to reimburse Akebia an expense amount not to exceed $6 million under certain termination circumstances summarized under “The Merger Agreement—Termination Fees and Expenses” beginning on page 147 of this joint proxy statement/prospectus;

 

   

Consideration of Alternatives. The Akebia Board had considered certain alternatives to the Merger and determined that entering into the Merger Agreement was more favorable to Akebia shareholders than other alternatives available to Akebia, including continued operation of Akebia on a standalone basis or the pursuit of potential alternative transactions; and

 

   

Likelihood of Completing the Merger. The likelihood of completing the Merger on the anticipated schedule.

The Akebia Board also considered various risks and other potentially negative factors concerning the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, including the Akebia share issuance, which included the following factors:

 

   

the challenges inherent in combining the businesses, operations and workforces of Akebia and Keryx, including: (i) the possible diversion of management focus and resources from operational matters and other strategic opportunities and (ii) difficulties in integrating and retaining management employees, including from the two companies’ respective labor groups, as well as the potential effect the challenges inherent in combining the businesses, operations and workforces of Akebia and Keryx could have on Akebia’s business and relations with regulators, partners, and suppliers;

 

   

the fact that forecasts of future results of operations and synergies are necessarily estimates based on assumptions;

 

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the risk of not realizing anticipated synergies and cost savings between Akebia and Keryx and the risk that other anticipated benefits might not be realized;

 

   

the fact that Akebia shareholders will be sharing participation of Akebia’s potential growth with Keryx shareholders after the consummation of the Merger;

 

   

the possibility that the Merger might not be completed, or that completion might be unduly delayed, including as a result of Akebia’s or Keryx’s shareholders failing to grant the requisite approvals to consummate the Merger, and the potential negative impact that may have on Akebia’s business and relationships with employees, doctors, patients, regulators and the communities in which it operates;

 

   

the substantial costs to be incurred in connection with the Merger, including the cash and other costs of integrating the businesses of Akebia and Keryx, as well as the transaction expenses arising from the Merger;

 

   

the terms of the Merger Agreement, including generally reciprocal covenants relating to (i) the two companies’ conduct of their respective businesses during the period between the signing of the Merger Agreement and the completion of the Merger, and (ii) the restrictions on the two companies’ ability to solicit alternative transaction proposals;

 

   

the fact that, in certain circumstances, the Keryx Board has the right under the Merger Agreement to withdraw its recommendation to Keryx shareholders that they adopt the Merger Agreement;

 

   

the fact that Akebia is obligated to pay Keryx a termination fee of $22 million in certain circumstances as summarized under “The Merger Agreement—Termination Fees and Expenses” beginning on page 147 of this joint proxy statement/prospectus;

 

   

the fact that Akebia is obligated to reimburse Keryx an expense amount of up to $6 million under certain termination circumstances as summarized under “The Merger Agreement— Termination Fees and Expenses” beginning on page 147 of this joint proxy statement/prospectus;

 

   

the fact that the Exchange Multiplier will not be adjusted at consummation of the Merger based on the relative market values of Akebia Shares or Keryx Shares; and

 

   

the other factors described in the section entitled “Risk Factors”, the matters described under “Cautionary Statement Regarding Forward-Looking Statements” and the matters described under “Certain Akebia Management Unaudited Prospective Financial Information” beginning on pages 36, 47, and 102 of this joint proxy statement/prospectus.

The above discussion of the factors considered by the Akebia Board is not intended to be exhaustive, but does set forth material factors considered by the Akebia Board. In light of the wide variety of factors considered in connection with its evaluation of the Merger Agreement and the transactions contemplated thereby, including the Akebia share issuance, and the complexity of these matters, the Akebia Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative or specific weight or values to any of these factors, and individual directors may have held varied views of the relative importance of the factors considered. The Akebia Board viewed its position and recommendation as being based on an overall review of the totality of the information available to it and considered these factors in the aggregate to be favorable to, and to support, its determination regarding the Merger and the Akebia share issuance.

This explanation of Akebia’s reasons for the Merger and the other transactions contemplated by the Merger Agreement, including the Akebia share issuance, and other information presented in this section is forward-looking in nature and should be read in light of the section of this joint proxy statement/prospectus entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 47 of this joint proxy statement/prospectus.

 

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Certain Keryx Management Unaudited Prospective Financial Information

Keryx does not as a matter of course publicly disclose financial projections or forecasts as to future performance, revenues, earnings or other results given, among other things, the unpredictability, uncertainty and subjectivity of the underlying assumptions and estimates inherent in preparing financial projections and forecasts. As a result, Keryx does not endorse unaudited prospective financial information as a reliable indication of future results. Moreover, Keryx’s internally prepared unaudited financial projections presented below were based on estimates, assumptions and judgments made by Keryx management at the respective times of their preparation and speak only as of such times. Except as required by law, Keryx has no obligation to update the unaudited financial projections included in this section. It has not done so and does not intend to do so.

The unaudited financial projections concerning each of Keryx and Akebia on a standalone basis, without giving effect to the Merger, and also of the combined company on a pro forma basis set forth in this section were prepared by Keryx management and made available, except as otherwise described below, to the Keryx Board in its review and evaluation of the Merger and to Keryx’s financial advisor (see “—Opinion of Keryx’s Financial Advisor – MTS Securities LLC” beginning on page 90 of this joint proxy statement/prospectus). These unaudited financial projections are not being included in this joint proxy statement/prospectus to influence the voting decision of any Keryx shareholder or Akebia shareholder with respect to the Merger, but instead because these unaudited financial projections, in whole or in part, were provided, or formed the basis of what was provided, to the Keryx Board, Akebia and Keryx’s and Akebia’s financial advisors in connection with their evaluation of Merger as described herein.

You should note that the unaudited financial projections set forth below constitute forward-looking statements. Please see the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 47 of this joint proxy statement/prospectus for more information. You should also note that the unaudited financial projections were not prepared with a view toward public disclosure or with a view toward complying with GAAP, the published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The information set forth in the section entitled “—Certain Keryx Management Unaudited Prospective Financial Information” was prepared utilizing Keryx’s historical internal accounting policies and forecast approach and does not give effect to the adoption of any new accounting pronouncements. The unaudited prospective financial information included in this section has been prepared by, and is the responsibility of, Keryx management. Neither Keryx’s nor Akebia’s respective independent registered public accountants, nor any other independent accountants or financial advisors, have compiled or performed any procedures with respect to the unaudited financial projections set forth below, nor have they expressed any opinion, judgment or any other form of assurance on such information or its achievability, and none assumes any responsibility for, and each disclaims any association with, the unaudited financial projections. The reports of the independent registered public accounting firms incorporated by reference in this joint proxy statement/prospectus relate to historical financial statements. The unaudited prospective financial information of Keryx does not extend to any prospective financial information or the estimated synergies and should not be seen to do so.

The unaudited financial projections set forth below should not be relied upon as necessarily indicative of actual future results, and readers of this joint proxy statement/prospectus are cautioned not to place undue reliance on such unaudited financial projections. Furthermore, since the unaudited financial projections cover multiple years, such information by its nature becomes less predictive with each successive year. Although the unaudited financial projections are presented with numerical specificity, the unaudited financial projections reflect assumptions, estimates and judgments that are inherently uncertain and, although considered reasonable by Keryx management as of the date of their use in preparing the unaudited financial projections, are subject to significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the unaudited financial projections set forth below, including, among others, risks and uncertainties due to general business, economic, regulatory, market and financial conditions, as well as changes in Keryx’s or Akebia’s respective businesses, financial condition or results of operations, and other risks.

 

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Keryx Management Keryx Projections

The following table presents summary selected unaudited prospective financial information for Keryx for the calendar years ending 2018 through 2028 prepared by Keryx management in connection with Keryx’s evaluation of the Merger (the “Keryx Management Keryx Projections”). The Keryx Management Keryx Projections include Keryx management’s assumptions for U.S. sales of Auryxia with consistent gross-to-net assumptions, royalties on sales of Riona in Japan, and no price increases, among other assumptions. The Keryx Management Keryx Projections were presented to the Keryx Board for the purposes of considering and evaluating the Merger, and were shared with Keryx’s financial advisor (see “— Opinion of Keryx’s Financial Advisor – MTS Securities, LLC” beginning on page 90 of this joint proxy statement/prospectus).

Keryx Management Keryx Projections (Standalone, Pre-Merger Basis) ($ in millions, unaudited)

 

     2018     2019     2020      2021      2022      2023      2024      2025      2026      2027      2028  

Revenue

   $ 98     $ 154     $ 218      $ 297      $ 365      $ 389      $ 403      $ 413      $ 428      $ 446      $ 463  

Gross Profit

     73       113       162        237        292        311        331        342        355        369        384  

EBIT (1)

     (60 )     (9     37        110        162        200        222        240        261        295        328  

Net Income

   $ (60   $ (10   $ 36      $ 109      $ 162      $ 200      $ 222      $ 211      $ 196      $ 222      $ 246  

 

(1)

Earnings before interest and taxes (“EBIT”) refers to Keryx’s gross profit less operating expenses.

In addition, at the direction of Keryx management, MTS Securities calculated unlevered free cash flow from unaudited prospective financial information for Keryx provided to MTS Securities by Keryx management for the calendar years ending 2018 through 2028, as set forth below.

 

     2018     2019     2020      2021      2022      2023      2024      2025      2026      2027      2028  

Unlevered Free Cash Flow (1)

   $ (90   $ (24   $ 26      $ 96      $ 147      $ 197      $ 215      $ 205      $ 191      $ 217      $ 242  

 

(1)

Unlevered Free Cash Flow is defined for purposes of the Keryx Management Keryx Projections as EBIT less income tax expense, plus depreciation and amortization, less changes in working capital, less capital expenditures. Unlevered Free Cash Flow is a non-GAAP measure and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flow or as a measure of liquidity.

Keryx Management Akebia Projections

The summary selected unaudited prospective financial information for Akebia for the calendar years ending 2018 through 2028 was prepared by Keryx management in connection with Keryx’s evaluation of the Merger (the “Keryx Management Akebia Projections”). The Keryx Management Akebia Projections were created by Keryx management based on Keryx management’s assumptions about Akebia’s business, including assumptions as to probability of success through approval of Akebia’s product candidate, vadadustat, certain revenue projections, timing for clinical trial completion, commercial launch, estimated tax assets and rates, working capital and capital expenditures without regard or reference to any financial information provided by Akebia management to Keryx in connection with Keryx’s consideration of the Merger. The Keryx Management Akebia Projections were presented to the Keryx Board for the purposes of considering and evaluating the Merger, and were shared with Keryx’s financial advisor (see “—Opinion of Keryx’s Financial Advisor – MTS Securities, LLC” beginning on page 90 of this joint proxy statement/prospectus).

 

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Keryx Management Akebia Projections (1)

(Standalone, Pre-Merger Basis) ($ in millions, unaudited)

 

     2018     2019     2020     2021     2022     2023     2024      2025      2026      2027      2028  

Akebia Revenue (2)

   $ 129     $ 258     $ 152     $ 146     $ 154     $ 153     $ 207      $ 284      $ 396      $ 503      $ 561  

Gross Profit

     129       258       152       146       132       131       182        239        339        432        488  

EBIT

     (168 )     (87     (54     (90     (16     (20     41        99        196        285        337  

Net Income

   $ (168   $ (87   $ (54   $ (90   $ (16   $ (20   $ 41      $ 99      $ 186      $ 271      $ 254  

 

(1)

Includes certain assumptions relating to the business and operations of Akebia deemed appropriate by Keryx management, including for cumulative probability of success through approval of Akebia’s product candidate, vadadustat.

(2)

Akebia Revenue is defined for purposes of the Keryx Management Akebia Projections as Akebia’s share of U.S. net product sales plus revenue from collaboration partners.

In addition, at the direction of Keryx management, MTS Securities calculated unlevered free cash flow from the Keryx Management Akebia Projections provided to MTS Securities by Keryx management for the calendar years ending 2018 through 2028, as set forth below.

 

     2018     2019     2020     2021     2022     2023     2024      2025      2026      2027      2028  

Unlevered Free Cash Flow (1)

   $ (165   $ (109   $ (60   $ (101   $ (42   $ (20   $ 21      $ 75      $ 164      $ 242      $ 226  

 

(1)

Unlevered Free Cash Flow is defined for purposes of the Keryx Management Akebia Projections as EBIT less income tax expense, plus depreciation and amortization, less changes in working capital, less capital expenditures. Unlevered Free Cash Flow is a non-GAAP measure and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flow or as a measure of liquidity.

Keryx Management Adjusted Akebia Projections

In connection with Keryx’s consideration of the Merger, Keryx management also generated an adjusted set of Akebia projections for the calendar years ending 2018 and 2025, which are presented in the table below (the “Keryx Management Adjusted Akebia Projections”). The Keryx Management Adjusted Akebia Projections were based on certain financial information provided to Keryx management by Akebia to which Keryx management applied its own assumptions for probability of success, estimated tax assets and rates, working capital and capital expenditures and depreciation and amortization.

The Keryx Management Adjusted Akebia Projections were presented to the Keryx Board for the purposes of considering and evaluating the Merger and were shared with Keryx’s financial advisor (see “—Opinion of Keryx’s Financial Advisor to Keryx – MTS Securities, LLC” beginning on page 90 of this joint proxy statement/prospectus).

Keryx Management Adjusted Akebia Projections (1)

(Standalone, Pre-Merger Basis) ($ in millions, unaudited)

 

     2018     2019     2020     2021     2022      2023      2024      2025  

Akebia Revenue (2)

   $ 169     $ 244     $ 158     $ 167     $ 343      $ 690      $ 863      $ 915  

Operating Income (EBIT)

   $ (198 )   $ (175   $ (65   $ (56   $ 144      $ 470      $ 601      $ 645  

 

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(1)

Included certain assumptions relating to the business and operations of Akebia deemed appropriate by Keryx management, including for the cumulative probability of success through approval of Akebia’s product candidate, vadadustat.

(2)

Akebia Revenue is defined for purposes of the Keryx Management Adjusted Akebia Projections as Akebia’s share of U.S. net product sales plus revenue from collaboration partners.

In addition, at the direction of Keryx management, MTS Securities calculated, from the Keryx Management Adjusted Akebia Projections provided to MTS Securities by Keryx management for the calendar years ending 2018 through 2025, unlevered free cash flow as set forth below.

 

     2018     2019     2020     2021     2022      2023      2024      2025  

Unlevered Free Cash Flow (1)

   $ (201 )   $ (193   $ (97   $ (50   $ 72      $ 336      $ 417      $ 517  

 

(1)

Unlevered Free Cash Flow is defined for purposes of the Keryx Management Adjusted Akebia Projections as EBIT less income tax expense, plus depreciation and amortization, less changes in working capital, less capital expenditures. Unlevered Free Cash Flow is a non-GAAP measure and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flow or as a measure of liquidity.

Keryx Management Pro Forma Analysis

The following table presents summary estimated unaudited pro forma financial information for the combined company (the “Keryx Management Pro Forma Analysis”) prepared by Keryx management based on its assumptions in respect of the combined company following the completion of the Merger for the calendar years ending 2018 through 2028 in connection with Keryx’s evaluation of the Merger. Such assumptions included certain synergies, dis-synergies and estimated NOL balances. The Keryx Management Pro Forma Analysis was made available to the Keryx Board for the purposes of considering and evaluating the Merger, and was shared with Keryx’s financial advisor (see “—Opinion of Keryx’s Financial Advisor—MTS Securities, LLC” beginning on page 90 of this joint proxy statement/prospectus).

Keryx Management Pro Forma Analysis

(Post-Merger Basis)

($ in millions, unaudited)

 

     2018     2019     2020     2021      2022      2023      2024      2025      2026      2027      2028  

Revenue

   $ 228     $ 416     $ 374     $ 449      $ 549      $ 573      $ 635      $ 705      $ 833      $ 957      $ 1,033  

Gross Profit

     202       374       317       388        448        469        538        593        708        817        888  

EBIT

     (245 )     (123     (43     28        179        198        279        341        463        593        675  

Net Income

   $ (245   $ (124   $ (44   $ 28      $ 170      $ 188      $ 252      $ 264      $ 356      $ 453      $ 514  

In addition, at the direction of Keryx management, MTS Securities calculated, from the unaudited prospective financial information for the combined company provided to MTS Securities by Keryx management for the calendar years ending 2018 through 2028, unlevered free cash flow as set forth below.

 

     2018     2019     2020      2021      2022      2023      2024      2025      2026      2027      2028  

Unlevered Free Cash Flow (1)

   $ (236   $ (87   $ 13      $ 72      $ 190      $ 209      $ 247      $ 295      $ 383      $ 475      $ 538  

 

(1)

Unlevered Free Cash Flow is defined for purposes of the Keryx Management Pro Forma Analysis as EBIT less income tax expense, plus depreciation and amortization, less changes in working capital, less capital expenditures. Unlevered Free Cash Flow is a non-GAAP measure and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flow or as a measure of liquidity.

 

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The unaudited projections included in this section “Certain Keryx Management Unaudited Prospective Financial Information” may calculate certain non-GAAP financial measures using different methodologies from other companies, and Keryx does not provide a reconciliation of the forward-looking non-GAAP financial measures to the comparable GAAP financial measures because it is unable to reasonably predict certain items contained in the GAAP financial measures, including non-recurring and infrequent items that are not indicative of Keryx’s ongoing operations. These items are uncertain, depend on various factors and could have a material impact on Keryx’s GAAP results for the applicable period. Keryx encourages you to review all of its financial statements included in the sections entitled “Selected Historical Consolidated Financial Data of Keryx,” “Selected Akebia and Keryx Unaudited Pro Forma Condensed Combined Financial Data” and “Comparative Historical and Unaudited Pro Forma Per Share Data” beginning on pages 27, 31, and 33, respectively, of this joint proxy statement/prospectus in their entirety and to not rely on any single financial measure.

Opinion of Keryx’s Financial Advisor – MTS Securities, LLC

Keryx retained MTS Health Partners as a financial advisor in connection with a potential strategic transaction. On June 27, 2018, MTS Securities rendered its oral opinion to the Keryx Board (which was subsequently confirmed in writing as of June 27, 2018), that, as of that date and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in the MTS Opinion and described below, the Exchange Multiplier to be received by the holders of Keryx Shares (other than holders of Excluded Shares, Baupost and their respective affiliates) in the Merger is fair, from a financial point of view, to such holders.

The full text of the MTS Opinion sets forth the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by MTS Securities in connection with the MTS Opinion. The MTS Opinion is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. The summary of the MTS Opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the MTS Opinion. We urge you to read carefully the MTS Opinion, together with the summary thereof in this joint proxy statement/prospectus, in its entirety.

MTS Securities provided its opinion for the information and assistance of the Keryx Board in connection with its consideration of the Merger. The MTS Opinion addressed solely the fairness, from a financial point of view, of the Exchange Multiplier to be received by the holders of Keryx Shares (other than holders of Excluded Shares, Baupost and their respective affiliates) in the Merger and does not address any other aspect or implication of the Merger. The MTS Opinion was not a recommendation to the Keryx Board or any shareholder of Keryx as to how to vote or to take any other action in connection with the Merger.

In the course of performing its review and analyses for rendering the opinion described above, MTS Securities:

(i) reviewed the financial terms of a draft copy of the Merger Agreement as of June 26, 2018, which was the most recent draft available to MTS Securities prior to the time it rendered its oral opinion (the “Draft Merger Agreement”);

(ii) reviewed certain publicly available business and financial information concerning Keryx and Akebia and the industry in which they each operate;

(iii) reviewed certain publicly available financial analyses and forecasts relating to each of Keryx and Akebia prepared by equity analysts who report on Keryx and Akebia, respectively;

(iv) reviewed the Keryx Management Keryx Projections, certain unaudited unadjusted prospective financial information of Akebia on a standalone basis provided by Akebia management to Keryx and MTS Securities, the

 

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Keryx Management Adjusted Akebia Projections, and the Keryx Management Akebia Projections, including estimates of certain potential benefits of the Merger prepared by Keryx management; information on the Keryx Management Keryx Projections, the Keryx Management Adjusted Akebia Projections and the Keryx Management Akebia Projections are explained in more detail in the section entitled “Certain Keryx Management Unaudited Prospective Financial Information.” In this section (i) the Keryx Management Keryx Projections, (ii) the certain unaudited unadjusted prospective financial information of Akebia on a standalone basis provided by Akebia management to Keryx and MTS Securities to which Keryx management applied certain assumptions and adjustments to arrive at the Keryx Management Adjusted Akebia Projections, (iii) the Keryx Management Adjusted Akebia Projections, and (iv) the Keryx Management Akebia Projections are collectively referred to as the “Projections;”

(v) conducted discussions with members of management and representatives of each of Keryx and Akebia concerning the matters described in clauses (ii) through (iv) above;

(vi) compared the financial and operating performance of each of Keryx and Akebia with publicly available information concerning other publicly traded companies and reviewed the current and historical market prices of the Keryx Shares, the Akebia Shares and certain publicly traded securities of such other companies, in each case, that MTS Securities deemed relevant;

(vii) reviewed and analyzed, based on each of the Keryx Management Keryx Projections, the Keryx Management Adjusted Akebia Projections and the Keryx Management Akebia Projections, the cash flows to be generated by Keryx and Akebia, respectively, to determine the present value of each of Keryx’s and Akebia’s, respectively, discounted cash flows; and

(viii) performed such other financial studies, analyses and investigations and considered such other information as MTS Securities deemed appropriate for the purposes of its opinion.

In arriving at its opinion, MTS Securities assumed and relied upon, without assuming liability or responsibility for independent verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information that was publicly available or was provided to, discussed with or reviewed by MTS Securities and upon the assurances of Keryx management that they were not aware of any material relevant developments or matters related to Keryx or Akebia or that may affect the Merger that were omitted or that remained undisclosed to MTS Securities. The MTS Opinion does not address any legal, regulatory, tax, accounting or financial reporting matters, as to which MTS Securities understood that Keryx had obtained such advice as it deemed necessary from experts, and MTS Securities relied with the consent of the Keryx Board on any assessments made by experts to Keryx with respect to such matters. Without limiting the foregoing, MTS Securities did not consider any tax effects of the Merger or the transaction structure on any person or entity. MTS Securities did not conduct any independent verification of the Projections and expressed no view as to the Projections or the assumptions upon which they were based. Without limiting the generality of the foregoing, with respect to the Projections, MTS Securities assumed, with the consent of the Keryx Board and based upon discussions with Keryx management and Akebia management, that each of the Projections was reasonably prepared in good faith and that the Projections, including any estimates of certain potential benefits of the Merger prepared by Keryx management and the timing to achieve such benefits, reflected the best currently available estimates and judgments of Keryx management and Akebia management regarding the future results of operations and financial performance of Keryx and Akebia.

In arriving at its opinion, MTS Securities did not make any analysis of, and did not express any opinion as to, the adequacy of the reserves of Keryx or Akebia and relied upon information provided to MTS Securities by Keryx and Akebia as to such adequacy. In addition, MTS Securities did not make any independent evaluations or appraisals of the assets or liabilities (including any contingent derivatives or off balance sheet assets or liabilities) of Keryx, Akebia or any of their respective subsidiaries, and MTS Securities was not furnished with any such evaluations or appraisals, nor did MTS Securities evaluate the solvency of Keryx, Akebia or any other entity under any state or federal law relating to bankruptcy, insolvency or similar matters. The analyses performed by

 

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MTS Securities in connection with its opinion were going concern analyses. MTS Securities expressed no opinion regarding the liquidation value of Keryx, Akebia or any other entity. MTS Securities assumed that there was no material change in the assets, financial condition, business or prospects of Keryx or Akebia since the date of the most recent relevant financial statements made available to MTS Securities. Without limiting the generality of the foregoing, MTS Securities undertook no independent analysis of any pending or threatened litigation, regulatory action, possible unasserted claims or other contingent liabilities to which Keryx, Akebia or any of their respective affiliates is a party or may be subject, and at the direction of Keryx and with its consent, MTS Securities made no assumption concerning, and therefore did not consider, the possible assertion of claims, outcomes or damages arising out of any such matters in rendering its opinion. MTS Securities also assumed that neither Keryx nor Akebia is party to any material pending transaction that was not disclosed to MTS Securities, including, without limitation, any financing, recapitalization, acquisition or merger, divestiture or spin-off, other than the Merger. MTS Securities did not consider any potential legislative or regulatory changes currently being considered or that may be adopted by any governmental or regulatory bodies or any potential changes in accounting methods or generally accepted accounting principles that may be adopted.

MTS Securities assumed that the representations and warranties of each party contained in the Merger Agreement and in all other related documents and instruments that are referred to therein are and will be true and correct as of the date or the dates made or deemed made, that each party thereto will fully and timely perform all of the covenants and agreements required to be performed by it under the Merger Agreement, the Akebia Voting Agreement and any other agreement contemplated by any such agreements, that all conditions to the consummation of the Merger will be satisfied without waiver thereof and that the transactions contemplated by the Merger Agreement will be consummated in accordance with the terms of the Merger Agreement without waiver, modification or amendment of any term, condition or agreement thereof. MTS Securities assumed that the final form of the Merger Agreement will be in all respects relevant to its analysis identical to the Draft Merger Agreement. MTS Securities also assumed that any governmental, regulatory and other consents and approvals contemplated in connection with the Merger will be obtained and that, in the course of obtaining any of those consents and approvals, no restrictions will be imposed or waivers made that would have an adverse effect on Keryx, Akebia or the benefits contemplated to be realized as a result of the Merger.

The MTS Opinion was necessarily based on economic, market, financial and other conditions existing, and on the information made available to MTS Securities, as of the date of its opinion. Although subsequent developments may affect the conclusion reached in its opinion, MTS Securities did not assume any obligation to update, revise or reaffirm the MTS Opinion.

The MTS Opinion addresses solely the fairness, from a financial point of view, to the holders of Keryx Shares (other than holders of Excluded Shares, Baupost and their respective affiliates) of the Exchange Multiplier to be received by such holders in the Merger and does not address any other terms in the Merger Agreement or any other agreement relating to the Merger or any other aspect or implication of the Merger, including, without limitation, the form or structure of the Merger. The MTS Opinion does not address Keryx’s underlying business decision to proceed with the Merger or the relative merits of the Merger compared to other alternatives available to Keryx. The MTS Opinion does not express any opinion as to the prices or ranges of prices at which shares or other securities of any person, including Keryx Shares or Akebia Shares, will trade at any time, including following the announcement or consummation of the Merger. The MTS Opinion does not in any manner address the amount or nature of compensation to any of the officers, directors or employees of any party to the Merger, or any class of such persons, relative to the compensation to be paid to the shareholders of Keryx in connection with the Merger or with respect to the fairness of any such compensation. The MTS Opinion noted that the Merger Agreement provides that certain restricted shares of Keryx will be converted into restricted stock units of Akebia in the Merger, as determined by the Exchange Multiplier, and that MTS Securities did not consider the effect on the conversion thereof or any restrictions on holders of such restricted shares of Keryx.

In accordance with customary investment banking practice, MTS Securities employed generally accepted valuation methods in reaching its opinion. The MTS Opinion was reviewed and approved by a fairness committee of MTS Securities.

 

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Summary of Financial Analysis

MTS Securities performed a variety of financial analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not susceptible to partial analysis or summary description. In arriving at its opinion, MTS Securities considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor considered. Each analytical technique has inherent strengths and weaknesses, and the nature of the available information may further affect the value of particular techniques. The overall conclusions MTS Securities reached were based on all the analyses and factors presented, taken as a whole, and also on application of MTS Securities’ own experience and judgment. Such conclusions may involve significant elements of subjective judgment and qualitative analysis. MTS Securities therefore gave no opinion as to the value or merit standing alone of any one or more parts of the analyses. Furthermore, MTS Securities believes that the summary provided and the analyses described below must be considered as a whole and that selecting any portion of the analyses, without considering all of them, would create an incomplete view of the process underlying MTS Securities’ analysis and opinion. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described below should not be taken to be the view of MTS Securities with respect to the actual value of Keryx, Keryx Shares, Akebia or Akebia Shares.

Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of the corresponding summaries and are alone not a complete description of the financial analyses performed by MTS Securities. Considering the data in the tables below without considering the corresponding full narrative descriptions of the financial analyses, including the methodologies and assumptions underlying such analyses, could create a misleading or incomplete view of the financial analyses performed by MTS Securities.

In performing its analyses, MTS Securities made numerous assumptions with respect to industry performance, general business, regulatory and economic conditions and other matters, all of which are beyond MTS Securities’ control and many of which are beyond the control of Keryx and/or Akebia. Any estimates used by MTS Securities in its analysis are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

MTS Securities performed standalone valuation analyses of both Keryx and Akebia using a variety of valuation methodologies, as described below. MTS Securities then performed a relative valuation analysis in order to compare the Exchange Multiplier to be received by holders of Keryx Shares (other than holders of Excluded Shares, Baupost and their respective affiliates) in the Merger, to the range of exchange multipliers implied based on the respective standalone valuation ranges. MTS Securities also analyzed the performance of the pro forma combination. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before June 27, 2018 and is not necessarily indicative of current market conditions.

Keryx Valuation Analysis

MTS Securities analyzed the valuation of Keryx using two different methodologies: discounted cash flow analysis and public trading comparable companies analysis. The results of each of these analyses are summarized below.

Keryx Discounted Cash Flow Analysis – Overview

MTS Securities performed a discounted cash flow analysis of Keryx by calculating, based on the Keryx Management Keryx Projections, the estimated present value of Keryx’s discounted cash flows and terminal value. MTS Securities utilized the discounted cash flow analysis of Keryx to determine a range of implied values of Keryx Shares. At the direction of Keryx, MTS conducted certain sensitivity analyses for the purposes of its discounted cash flow analysis using ranges of (i) terminal exit revenue multiples of 2.0x to 5.0x, based upon

 

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MTS Securities’ analysis of transactions involving single-to-few small molecule, off-patent products, (ii) revenue achievements of 75% to 125%, as provided by Keryx management, and (iii) weighted average cost of capital of 11% to 15%, reflecting calculated estimates of Keryx’s weighted average cost of capital, based upon MTS Securities’ analysis of the cost of capital for Keryx’s comparable company universe.

Discounted Cash Flow Analysis – Keryx Management Keryx Projections

MTS Securities discounted to present value as of June 30, 2018, (i) estimates of the Unlevered Free Cash Flow (as defined below) to be generated by Keryx from July 1, 2018 through December 31, 2028, calculated by MTS Securities based on the Keryx Management Keryx Projections and (ii) a terminal enterprise value at December 31, 2028 by applying an enterprise value to revenue multiple to Keryx’s terminal revenue. For the purposes of this section, “Opinion of Keryx’s Financial Advisor – MTS Securities, LLC”, “Unlevered Free Cash Flow” is defined as earnings before interest and taxes (“EBIT”) less income tax expense, plus depreciation and amortization, less changes in working capital, less capital expenditures. Keryx’s terminal revenue assumption was provided by Keryx management and calculated based on 2028 Auryxia U.S. sales, discounted based on Keryx management assumptions. An implied per share value was calculated based on Keryx’s current capitalization, as provided by Keryx management and assuming the conversion of the Convertible Notes into Keryx Shares.

Where MTS Securities sensitized a range of terminal exit revenue multiples and weighted average cost of capital, the midpoint of the revenue achievement range, 100%, was utilized, and the implied value of each Keryx Share, rounded to the nearest $0.25 per share, ranged from $4.25 to $6.00. Where MTS Securities sensitized revenue achievement and weighted average cost of capital, the midpoint of the terminal exit revenue multiple range, was utilized, and the implied value of each Keryx Share, rounded to the nearest $0.25 per share, ranged from $2.75 to $7.75. Where MTS Securities sensitized only the weighted average cost of capital, the implied value of each Keryx Share, rounded to the nearest $0.25 per share, ranged from $4.50 to $5.75. MTS Securities compared the ranges of implied value of each Keryx Share to the closing price of Keryx Shares on June 27, 2018 of $4.48 per share.

Public Trading Comparable Companies Analysis

MTS Securities reviewed and compared the projected operating performance of Keryx, based on the Keryx Management Keryx Projections, with publicly available information concerning other publicly traded companies and reviewed the current market price of Keryx Shares and certain publicly traded securities of such other companies. MTS Securities selected the following specialty (non-primary care) commercial companies without meaningful pipelines:

 

   

AMAG Pharmaceuticals Inc.

 

   

Amarin Corporation plc

 

   

Collegium Pharmaceutical, Inc.

 

   

Lexicon Pharmaceuticals Inc.

 

   

Synergy Pharmaceuticals Inc.

 

   

Vanda Pharmaceuticals Inc.

 

   

Veloxis Pharmaceuticals A/S

Although none of the selected companies is directly comparable to Keryx, MTS Securities included these companies in its analysis because they are publicly traded companies with certain characteristics that, for purposes of analysis, may be considered similar to certain characteristics of Keryx.

MTS Securities calculated the following metrics for each of the selected comparable companies using consensus equity research estimates as of June 27, 2018 for such companies:

 

   

The enterprise value (“EV”)

 

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The enterprise value as a multiple of estimated peak sales (“EV/Peak Sales”)

 

   

The enterprise value as a multiple of estimated 2019 and 2020 revenues (“EV/2019E Revenue” and “EV/2020E Revenue”)

 

   

The stock price as a multiple of projected earnings per share (“Price/2020E Earnings”)

For purposes of this analysis, the equity value of each of the selected comparable companies was calculated by multiplying the closing price per share of common stock of such company on June 27, 2018 by the number of such company’s fully diluted outstanding shares, and the enterprise value was calculated by adding to that result such company’s net debt, preferred stock and minority interest.

MTS Securities derived a low and high enterprise valuation range, as well as a low and high multiple range for EV/Peak Sales, EV/2019E Revenue, EV/2020E Revenue and Price/2020E Earnings, each based on the minimum and maximum enterprise values and multiples, respectively, of the comparable companies, for Keryx. MTS Securities applied the low and high ranges to derive low and high equity valuations of Keryx, based upon each metric, after adjusting for net debt, preferred stock and minority interest, as appropriate, and an implied value of each Keryx Share was calculated based on Keryx’s current capitalization, as provided by Keryx management and assuming the conversion of the Convertible Notes into Keryx Shares.

The table below notes the low and high ranges and implied value of each Keryx Share, rounded to the nearest $0.25, for each metric:

 

Metric

   Keryx Value
($mm)
     Metric Range    Implied Value of Each
Keryx Share Range

Enterprise Value

     —        $203 –$1,359    $1.75 –$9.00

EV/Peak Sales

   $ 463      0.5x – 1.7x    $2.00 –$5.50

EV/2019E Revenue

   $ 154      1.2x – 6.3x    $1.75 –$6.50

EV/2020E Revenue

   $ 218      1.1x – 5.0x    $2.00 –$7.25

Price/2020E Earnings

   $ 37      4.4x – 52.8x    $1.00 –$12.25

MTS Securities compared the ranges of implied value of each Keryx Share to the closing price of Keryx Shares on June 27, 2018 of $4.48 per share.

Historical Stock Price Performance

MTS Securities reviewed the share price trading history of Keryx Shares for the one-year period beginning on June 28, 2017 and ending on June 27, 2018. During this period, Keryx Shares traded as low as $3.92 per share and as high as $8.38 per share, compared to the closing price of Keryx Shares on June 27, 2018 of $4.48 per share. During the 90 calendar day period ending June 27, 2018, Keryx Shares traded as low as $3.92 per share and as high as $5.98 per share. In addition, MTS Securities reviewed the volume weighted average trading price over the 5 trading day, 10 trading day, 20 trading day, 30 trading day, 60 trading day, 6 month and 12 month periods ending on June 27, 2018. These volume weighted average prices are set forth in the table below:

 

Trading Period

   Volume Weighted
Average Price
 

5 Trading Day

   $ 4.81  

10 Trading Day

   $ 4.94  

20 Trading Day

   $ 5.02  

30 Trading Day

   $ 5.14  

60 Trading Day

   $ 4.97  

6 Months

   $ 4.76  

12 Months

   $ 5.58  

 

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MTS noted that the share price trading history and volume weighted average trading prices were referenced for informational purposes only and were not relied upon for valuation purposes.

Akebia Valuation Analysis

MTS Securities analyzed the valuation of Akebia using two different methodologies: discounted cash flow analysis and public trading comparable companies analysis. The results of each of these analyses are summarized below.

Akebia Discounted Cash Flow Analysis – Overview

MTS Securities performed discounted cash flow analyses of Akebia by calculating, based on each of the Keryx Management Adjusted Akebia Projections and the Keryx Management Akebia Projections, the estimated present value of Akebia’s discounted cash flows and terminal value. MTS Securities utilized the discounted cash flow analyses of Akebia to determine a range of implied values of Akebia Shares. At the direction of Keryx, MTS Securities conducted certain sensitivity analyses for purposes of its discounted cash flow analyses using ranges of (i) terminal exit revenue multiples of 4.0x to 6.0x, based upon MTS Securities’ analysis of transactions involving single-to-few small molecule products with several years of estimated patent life remaining where the target was commercial for at least two years prior to acquisition, (ii) revenue achievements of 50% to 150%, as provided by Keryx management, (iii) probabilities of success, as provided by Keryx management and based on Keryx management’s estimate of the likelihood of approval, and (iv) weighted average cost of capital of 13% to 17%, reflecting calculated estimates of Akebia’s weighted average cost of capital, based upon MTS Securities’ analysis of the cost of capital for Akebia’s comparable company universe.

Discounted Cash Flow Analysis – Keryx Management Adjusted Akebia Projections

MTS Securities discounted to present value as of June 30, 2018, (i) estimates of the Unlevered Free Cash Flow that Akebia will generate during the period beginning on July 1, 2018 through on December 31, 2025, calculated by MTS Securities based on the Keryx Management Adjusted Akebia Projections , and (ii) a terminal enterprise value at December 31, 2025 by applying an enterprise value to revenue multiple to Akebia’s terminal revenue. Akebia’s terminal revenue assumption was calculated as Akebia’s share of vadadustat U.S. sales plus royalties in 2025. An implied per share value was calculated based on Akebia’s current capitalization, as provided by Akebia’s management.

Where MTS Securities sensitized a range of terminal exit revenue multiples and weighted average cost of capital, the midpoints of the revenue achievement range, and probability of success range were utilized, and the implied value of each Akebia Share, rounded to the nearest $0.25 per share, ranged from $24.50 to $40.75. Where MTS Securities sensitized revenue achievement and weighted average cost of capital, the midpoints of the terminal exit revenue multiple range and probability of success range, were utilized, and the implied value of each Akebia Share, rounded to the nearest $0.25 per share, ranged from $13.50 to $51.00. Where MTS Securities sensitized probability of success and weighted average cost of capital, the midpoints of the revenue achievement range, and terminal exit revenue multiple range, were utilized, and the implied value of each Akebia Share, rounded to the nearest $0.25 per share, ranged from $26.75 to $37.75. MTS Securities compared the ranges of implied value of each Akebia Share to the closing price of Akebia Shares on June 27, 2018 of $10.38 per share.

Discounted Cash Flow Analysis – Keryx Management Adjusted Akebia Projections

MTS Securities discounted to present value as of June 30, 2018 (i) estimates of the Unlevered Free Cash Flow that Akebia will generate during the period beginning on July 1, 2018 through on December 31, 2028,

 

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calculated by MTS Securities based on the Keryx Management Akebia Projections and (ii) a terminal enterprise value at December 31, 2028 by applying an enterprise value to revenue multiple to Akebia’s terminal revenue, all on a probability of success adjusted basis. Akebia’s terminal revenue assumption was calculated as Akebia’s share of vadadustat U.S. sales plus royalties in 2028. An implied per share value was calculated based on Akebia’s current capitalization, as provided by Akebia management.

Where MTS Securities sensitized a range of terminal exit revenue multiples and weighted average cost of capital, the midpoints of the revenue achievement range, and probability of success range were utilized, and the implied value of each Akebia Share, rounded to the nearest $0.25 per share, ranged from $10.25 to $18.25. Where MTS Securities sensitized revenue achievement and weighted average cost of capital, the midpoints of the terminal exit revenue multiple range, and probability of success range, were utilized, and the implied value of each Akebia Share, rounded to the nearest $0.25 per share, ranged from $3.75 to $26.25. Where MTS Securities sensitized probability of success and weighted average cost of capital, the midpoints of the revenue achievement range, and terminal exit revenue multiple range, were utilized, and the implied value of each Akebia Share, rounded to the nearest $0.25 per share, ranged from $11.50 to $16.75. MTS Securities compared the ranges of implied value of each Akebia Share to the closing price of Akebia Shares on June 27, 2018 of $10.38 per share.

Public Trading Comparable Companies Analysis

MTS Securities reviewed and compared the projected operating performance of Akebia, based on each of the Keryx Management Adjusted Akebia Projections and the Keryx Management Akebia Projections, with publicly available information concerning other publicly traded companies and reviewed the current market price of Akebia Shares and certain publicly traded securities of such other companies. MTS Securities selected the following selected specialty (non-primary care) development stage companies with Phase II data and single-to-few molecules:

 

   

Aldeyra Therapeutics, Inc.

 

   

Cara Therapeutics, Inc.

 

   

Fibrogen Inc.

 

   

Galectin Therapeutics Inc.

 

   

Genfit S.A.

 

   

Inventiva S.A.

 

   

Madrigal Pharmaceuticals, Inc.

 

   

Minerva Neurosciences, Inc.

 

   

Reata Pharmaceuticals, Inc.

 

   

Resverlogix Corp.

 

   

Seres Therapeutics, Inc.

 

   

Viking Therapeutics, Inc.

Although none of the selected companies is directly comparable to Akebia, MTS Securities included these companies in its analysis because they are publicly traded companies with certain characteristics that, for purposes of analysis, may be considered similar to certain characteristics of Akebia.

MTS Securities calculated the following metrics for each of the selected comparable companies, using consensus equity research estimates as of June 27, 2018 for such companies:

 

   

EV

 

   

EV/Peak Sales

 

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For purposes of this analysis, the enterprise value of each comparable company was calculated by multiplying the closing price per share of common stock of such company on June 27, 2018 by the number of such company’s fully diluted outstanding shares and adding to that result such company’s net debt, preferred stock and minority interest.

MTS Securities derived a low and high enterprise valuation range, as well as a low and high multiple range for EV/Peak Sales, each based on the minimum and maximum enterprise values and multiples, respectively, of the comparable companies, for Akebia. MTS Securities applied the low and high ranges to the respective valuation metrics of Akebia to derive low and high equity valuations based upon each metric, after adjusting for net debt, preferred stock and minority interest as appropriate, and an implied value of each Akebia Share was calculated based on Akebia’s current capitalization, as provided by Akebia management. For the EV/Peak Sales valuation using the Keryx Management Adjusted Akebia Projections, the EV/Peak Sales multiple range was applied to the 2025 estimate of Akebia’s share of vadadustat U.S. sales plus royalties, after taking into account a probability of success adjustment. For the EV/Peak Sales valuation using the Keryx Management Akebia Projections, the EV/Peak Sales multiple range was applied to the 2028 probability of success adjusted estimate of Akebia’s share of vadadustat U.S. sales plus royalties.

The table below notes the low and high ranges and implied value of each Akebia Share, rounded to the nearest $0.25, for each metric:

 

Metric

   Akebia Value
($mm)
     Metric Range      Implied Value of Each
Akebia Share Range
 

Enterprise Value

     —        $ 73 –$5,023      $ 8.00 –$90.25  

EV/Peak Sales – Keryx Management Adjusted Akebia Projections

   $ 721        0.2x – 2.9x      $ 9.00 –$42.00  

EV/Peak Sales – Keryx Management Akebia Projections

   $ 497        0.2x – 2.9x      $ 8.25 –$31.00  

MTS Securities compared the ranges of implied value of each Akebia Share to the closing price of Akebia Shares on June 27, 2018 of $10.38 per share.

Historical Stock Price Performance

MTS Securities reviewed the share price trading history of Akebia Shares for the one-year period beginning on June 28, 2017 and ending on June 27, 2018. During this period, Akebia Shares traded as low as $8.93 per share and as high as $20.25 per share, compared to the closing price of Akebia Shares on June 27, 2018 of $10.38 per share. During the 90 calendar day period ending June 27, 2018, Akebia Shares traded as low as $8.93 per share and as high as $15.37 per share. In addition, MTS Securities reviewed the volume weighted average trading price over the 5 trading day, 10 trading day, 20 trading day, 30 trading day, 60 trading day, 6 month and 12 month periods ending on June 27, 2018. These volume weighted average prices are set forth in the table below.

 

Trading Period

   Volume Weighted
Average Price
 

5 Trading Day

   $ 10.75  

10 Trading Day

   $ 10.88  

20 Trading Day

   $ 10.52  

30 Trading Day

   $ 10.49  

60 Trading Day

   $ 10.05  

6 Months

   $ 11.65  

12 Months

   $ 13.74  

MTS noted that the share price trading history and volume weighted average trading prices were referenced for informational purposes only and were not relied upon for valuation purposes.

 

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Relative Valuation Analysis

MTS Securities compared the following combinations of low and high equity values of both companies to determine the implied range of exchange multipliers, in terms of Akebia Shares to be received by Keryx shareholders for each existing Keryx Share:

 

   

Keryx High Share Value and Akebia Low Share Value (K High / A Low)