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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________

Commission File Number 001-36352
AKEBIA THERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 20-8756903
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
   
 245 First Street, Cambridge, MA
 02142
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (617871-2098
n/a
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $0.00001 par value per shareAKBA
The Nasdaq Capital Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an 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
ý
    
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 13(a) of the Exchange Act. ¨
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of August 25, 2023 was 188,313,807.




CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that are being made pursuant to the provisions of the U.S. Private Securities Litigation Reform Act of 1995 with the intention of obtaining the benefits of the “safe harbor” provisions of that Act. All statements contained in this Quarterly Report on Form 10‑Q other than statements of historical fact are forward-looking statements. These forward-looking statements may be accompanied by words such as “anticipate,” “believe,” “build,” “can,” “contemplate,” “continue,” “could,” “should,” “designed,” “estimate,” “project,” “expect,” “forecast,” “future,” “goal,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “strategy,” “seek,” “target,” “will,” “would,” and other words and terms of similar meaning, but the absence of these words does not necessarily mean that a statement is not forward-looking. These forward-looking statements include, but are not limited to, statements about:
the potential therapeutic benefits, safety profile, and effectiveness of vadadustat; 
our expectations with respect to the development of vadadustat, if any, following our receipt of a complete response letter to and our End of Dispute Type A meeting with the U.S. Food and Drug Administration regarding our new drug application for vadadustat for the treatment of anemia due to chronic kidney disease in adult patients, including the timing of when we expect to resubmit the new drug application for vadadustat and when we expect the Prescription Drug User Fee Act date;
that delivering value broadly to the kidney community, as well as others who may benefit from our medicines, will result in delivering value for stockholders;
our pipeline and portfolio, including its potential, and our related research and development activities;
the timing of or likelihood of regulatory filings and approvals, including with respect to labeling or other restrictions, the potential approval of vadadustat and our outlook related thereto, and potential indications for vadadustat;
the timing, investment and associated activities involved in continued commercialization of Auryxia® (ferric citrate), its growth opportunities and our ability to execute thereon;
the potential indications, demand and market opportunity, potential and acceptance of Auryxia and vadadustat, if approved, including the size of eligible patient populations; 
the potential therapeutic applications of the hypoxia inducible factor pathway;
our competitive position, including estimates, developments and projections relating to our competitors and their products and product candidates, and our industry; 
our expectations, projections and estimates regarding our capital requirements, need for additional capital, financing our future cash needs, costs, expenses, revenues, capital resources, cash flows, financial performance, profitability, tax obligations, liquidity, growth, contractual obligations, the period of time our cash resources will fund our current operating plan, estimates with respect to our ability to operate as a going concern, our internal control over financial reporting and disclosure controls and procedures, and any future deficiencies or material weaknesses in our internal controls and procedures; 
the direct or indirect impacts of the recent COVID-19 pandemic on our business, operations and the markets and communities in which we and our partners, collaborators, vendors, and customers operate;
our manufacturing, supply and quality matters and any recalls, write-downs, impairments or other related consequences or potential consequences;
estimates, beliefs and judgments related to the valuation of intangible asset, goodwill, debt and other assets and liabilities, including our impairment analysis and our methodology and assumptions regarding fair value measurements;
the timing of the availability and disclosure of clinical trial data and results;
our and our collaborators’ strategy, plans and expectations with respect to the development, manufacturing, supply, commercialization, launch, marketing and sale of Auryxia and vadadustat, if approved, and the associated timing thereof; 
our plans with respect to commercializing Vafseo® in Europe;
the designs of our studies, and the type of information and data expected from our studies and the expected benefits thereof;



our ability to maintain any marketing authorizations we currently hold or will obtain, including our marketing authorizations for Auryxia and our ability to complete post-marketing requirements with respect thereto;
our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms and processes on a timely basis, or at all, with third-party payors for Auryxia and vadadustat, if approved;
the timing of initiation of our clinical trials and plans to conduct preclinical studies and clinical trials in the future; 
the timing and amounts of payments from or to our collaborators and licensees, and the anticipated arrangements and benefits under our collaboration and license agreements, including with respect to milestones and royalties; 
our intellectual property position, including obtaining and maintaining patents, and the timing, outcome and impact of administrative, regulatory, legal and other proceedings relating to our patents and other proprietary and intellectual property rights, patent infringement suits that we have filed or may file, or other actions that we may take against companies, and the timing and resolution thereof;
expected ongoing reliance on third parties, including with respect to the development, manufacturing, supply and commercialization of Auryxia and vadadustat, if approved;
accounting standards and estimates, their impact, and their expected timing of completion;
estimated periods of performance of key contracts;
our facilities, lease commitments, and future availability of facilities;
cybersecurity;
insurance coverage;
management of personnel, including our management team, and our employees, including employee compensation, employee relations, and our ability to attract, train and retain high quality employees;
the implementation of our business model, current operating plan, and strategic plans for our business, product candidates and technology, and business development opportunities including potential collaborations, alliances, mergers, acquisitions or licensing of assets;
our workforce reductions, future charges expected to be incurred in connection therewith and estimated reductions in net cash required for operating activities in connection therewith; and
the timing, outcome and impact of current and any future legal proceedings.

Any or all of these forward-looking statements in this Quarterly Report on Form 10-Q may turn out to be inaccurate. These forward-looking statements involve risks and uncertainties, including those that are discussed below under the heading "Risk Factors Summary", and the risk factors identified further in Part II, Item 1A. "Risk Factors" included in this Quarterly Report on Form 10-Q and elsewhere in this Quarterly Report on Form 10-Q, that could cause our actual results, financial condition, performance or achievements to be materially different from those indicated in these forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason. Unless otherwise stated, our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

This Quarterly Report on Form 10-Q also contains estimates and other information concerning our industry and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Unless otherwise expressly stated, we obtained this industry, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.





RISK FACTORS SUMMARY

Investing in our common stock involves numerous risks, including the risks summarized below and described in further detail in “Part II, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects. These risks include, but are not limited to, the following:
We have incurred significant losses since our inception, and anticipate that we will continue to incur significant losses and cannot guarantee when, if ever, we will become profitable or attain positive cash flows.
We will require substantial additional financing to achieve our goals. A failure to obtain this necessary capital when needed, or on acceptable terms, could force us to delay, limit, reduce or terminate our product development or commercialization efforts.
Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product and product candidates on unfavorable terms to us.
If we fail to comply with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.
We may not be successful in our efforts to identify, acquire, in-license, discover, develop and commercialize additional products or product candidates or our decisions to prioritize the development of certain product candidates over others may not be successful, which could impair our ability to grow.
We may engage in strategic transactions to acquire assets, businesses, or rights to products, product candidates or technologies or form collaborations or make investments in other companies or technologies that could harm our operating results, dilute our stockholders’ ownership, increase our debt, or cause us to incur significant expense.
Our business has been and may continue to be, directly or indirectly, adversely affected by the recent COVID-19 pandemic.
Our obligations in connection with the loan agreement with Pharmakon and requirements and restrictions in the loan agreement could adversely affect our financial condition and restrict our operations.
Our Royalty Interest Acquisition Agreement with HealthCare Royalty Partners IV, L.P. contains various covenants and other provisions, which, if violated, could materially adversely affect our financial condition.
Our business is substantially dependent on the commercial success of Auryxia. If we are unable to continue to successfully commercialize Auryxia, our results or operations and financial condition will be materially harmed.
If we are unable to maintain or expand, or, if vadadustat is approved, initiate, sales and marketing capabilities or enter into additional agreements with third parties, we may not be successful in commercializing Auryxia, vadadustat, if approved, or any other product candidates that may be approved.
Our, or our partners', failure to obtain or maintain adequate coverage, pricing and reimbursement for Auryxia, vadadustat, if approved, or any other future approved products, could have a material adverse effect on our or our collaboration partners’ ability to sell such approved products profitably and otherwise have a material adverse impact on our business.
We face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully than, we do.
The commercialization of Riona® and Vafseo in Japan, Vafseo in Europe and our current and potential future efforts with respect to the development and commercialization of our products and product candidates outside of the United States subject us to a variety of risks associated with international operations, which could materially adversely affect our business.
Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and we will incur additional costs in connection with, and may experience delays in completing, or ultimately be unable to complete, the development of vadadustat and any other product candidates.
We may find it difficult to enroll patients in our clinical trials, which could delay or prevent clinical trials of Auryxia, vadadustat or any other product or product candidate, including those that may be in-licensed or acquired.
Conducting clinical trials outside of the United States, as we have done historically and as we may decide to do in the future, presents additional risks and complexities and, if we decide to conduct a clinical trial outside of the United States in the future, we may not complete such trials successfully, in a timely manner, or at all, which could affect our ability to obtain regulatory approvals.
Auryxia, vadadustat or any other product or product candidate, including those that may be in-licensed or acquired, may cause undesirable side effects or have other properties that may delay or prevent marketing approval or limit their commercial potential.
We may not be able to obtain marketing approval for, or successfully commercialize, vadadustat or any other product candidate, or we may experience significant delays in doing so, any of which would materially harm our business.
Products approved for marketing are subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or withdrawal from the market, and we may be subject to penalties, including withdrawal of marketing approval, if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, or product candidates, when and if any of them is approved.
We are subject to a complex regulatory scheme that requires significant resources to ensure compliance and our failure to comply with applicable laws could subject us to government scrutiny or enforcement, potentially resulting in costly



investigations, fines, penalties or sanctions, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.
We will incur significant liability if it is determined that we are promoting any “off-label” use of Auryxia or any other product we may develop, in-license or acquire or if it is determined that any of our activities violates the federal Anti-Kickback Statute.
Disruptions in the FDA, regulatory authorities outside the U.S. and other government agencies caused by global health concerns or funding shortages could prevent new products and services from being developed or commercialized in a timely manner, which could negatively impact our business.
Compliance with privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and process data globally, and the failure to comply with such requirements could subject us to significant fines and penalties, which may have a material adverse effect on our business, financial condition or results of operations.
Legislative and regulatory healthcare reform may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain for any products that are approved in the United States or foreign jurisdictions.
We depend on collaborations with third parties for the development and commercialization of Auryxia, Riona, Vafseo and vadadustat and if these collaborations are not successful or if our collaborators terminate their agreements with us, we may not be able to capitalize on the market potential of Auryxia, Riona, Vafseo and vadadustat, and our business could be materially harmed.
We may seek to establish additional collaborations and, if we are not able to establish them on commercially reasonable terms, or at all, we may have to alter our development and commercialization plans.
We rely upon third parties to conduct all aspects of our product manufacturing, and in many instances only have a single supplier, and the loss of these manufacturers, their failure to supply us on a timely basis, or at all, or their failure to successfully carry out their contractual duties or comply with regulatory requirements, cGMP requirements, or guidance could cause delays in or disruptions to our supply chain and substantially harm our business.
We rely upon third parties to conduct our clinical trials and certain of our preclinical studies. If they do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain or maintain marketing approval for Auryxia, vadadustat or any of our product candidates, and our business could be substantially harmed.
If the licensor of certain intellectual property relating to Auryxia terminates, modifies or threatens to terminate existing contracts or relationships with us, our business may be materially harmed.
If we are unable to adequately protect our intellectual property, third parties may be able to use our intellectual property, which could adversely affect our ability to compete in the market.
We may not be able to protect our intellectual property rights throughout the world.
The intellectual property that we own or have licensed and related non-patent exclusivity relating to our current and future products is, and may be, limited, which could adversely affect our ability to compete in the market and adversely affect the value of Auryxia.
The market entry of one or more generic competitors or any third party’s attempt to challenge our intellectual property rights will likely limit Auryxia sales and have an adverse impact on our business and results of operation.
Litigation and administrative proceedings, including third party claims of intellectual property infringement and opposition/invalidation proceedings against third party patents, may be costly and time consuming and may delay or harm our drug discovery, development and commercialization efforts.
We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.
If we fail to attract, retain and motivate senior management and qualified personnel, we may be unable to successfully develop, obtain and/or maintain marketing approval of and commercialize vadadustat or commercialize Auryxia.
Our cost savings plan and the associated workforce reductions implemented in April, May and November 2022 may not result in anticipated savings, could result in total costs and expenses that are greater than expected and could disrupt our business.
We may encounter difficulties in managing our growth, including with respect to our employee base, and managing our partnerships and operations successfully.
We have identified a material weakness in our internal control over financial reporting as of December 31, 2022 relating to our product return reserves that resulted in a revision of our financial statements for the years ended December 31, 2022, 2021 and 2020. If we are not able to remediate this material weakness, or if we experience additional material weaknesses or other deficiencies in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
We are currently subject to legal proceedings that could result in substantial costs and divert management's attention, and we could be subject to additional legal proceedings.
Our stock price has been and may continue to be volatile, which could result in substantial losses for holders or future purchasers of our common stock and lawsuits against us and our officers and directors.



Akebia Therapeutics, Inc.
Form 10-Q
For the Quarter Ended June 30, 2023


TABLE OF CONTENTS
 
Page
Part I
Item 1
Condensed Consolidated Balance Sheet
Condensed Consolidated Statement of Operations and Comprehensive Income (Loss)
Condensed Consolidated Statements of Stockholders' (Deficit) Equity
Condensed Consolidated Statements of Cash Flows
Notes to the Condensed Consolidated Financial Statements
Item 2
Item 3
Item 4
Item 1
Item 1A
Item 2
Item 3
Item 4
Item 5
Item 6


In this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise requires, references to “Akebia,” “we,” “us,” “our,” “the Company,” and similar references refer to Akebia Therapeutics, Inc. and, where appropriate, its consolidated subsidiaries. On December 12, 2018, in connection with the consummation of the merger (Merger) with Keryx Biopharmaceuticals, Inc. (Keryx), Keryx became a wholly owned subsidiary of the Company.

AURYXIA®, AKEBIA Therapeutics®, Vafseo® and their associated logos are trademarks of Akebia and/or its affiliates. All other trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, trademarks, trade names, and service marks referred to in this Quarterly Report on Form 10-Q may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other company.
Akebia Therapeutics, Inc. | Form 10-Q | Page 1


PART I—FINANCIAL INFORMATION
Item 1.  Financial Statements.

Akebia Therapeutics, Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share amounts)June 30,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents$53,572 $90,466 
Inventories20,905 21,568 
Accounts receivable, net19,572 40,284 
Prepaid expenses and other current assets24,398 32,864 
Total current assets118,447 185,182 
Property and equipment, net4,419 5,214 
Operating right-of-use assets14,391 29,158 
Intangible asset, net54,063 72,084 
Goodwill59,044 59,044 
Other long-term assets3,348 5,372 
Total assets$253,712 $356,054 
Liabilities and stockholders' (deficit) equity
Current liabilities:
Accounts payable$11,776 $18,021 
Accrued expenses and other current liabilities56,408 75,777 
Short-term deferred revenue 3,738 
Current portion of long-term debt24,000 32,000 
Total current liabilities92,184 129,536 
Deferred revenue, net of current portion43,296 43,296 
Long-term operating lease liabilities11,480 28,961 
Embedded debt derivative760 760 
Long-term debt, net18,486 34,078 
Liability related to sale of future royalties56,548 57,484 
Refund liability to customer40,623 40,992 
Other long-term liabilities17,142 15,717 
Total liabilities280,519 350,824 
Commitments and contingencies (Note 13)
Stockholders' (deficit) equity:
Preferred stock $0.00001 par value, 25,000,000 shares authorized; no shares issued and
   outstanding at June 30, 2023 and December 31, 2022
  
Common stock $0.00001 par value; 350,000,000 shares authorized at June 30, 2023 and December 31, 2022; 188,128,869 and 184,135,714 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively
2 2 
Additional paid-in capital1,568,260 1,562,247 
Accumulated other comprehensive income6 6 
Accumulated deficit(1,595,075)(1,557,025)
Total stockholders' (deficit) equity(26,807)5,230 
Total liabilities and stockholders' (deficit) equity$253,712 $356,054 
 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Akebia Therapeutics, Inc. | Form 10-Q | Page 2


Akebia Therapeutics, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Three Months Ended June 30,Six Months Ended June 30,
 (dollars in thousands, except per share amounts) 
2023202220232022
Revenues
Product revenue, net$42,244 $43,309 $76,950 $84,681 
License, collaboration and other revenue14,132 83,056 19,431 103,307 
Total revenues56,376 126,365 96,381 187,988 
Cost of goods sold
Product8,273 9,589 19,452 32,694 
Amortization of intangible asset9,011 9,011 18,021 18,021 
Total cost of goods sold17,284 18,600 37,473 50,715 
Operating expenses:
Research and development20,197 26,027 39,883 69,860 
Selling, general and administrative27,036 32,240 52,090 76,806 
License expense949 892 1,517 1,580 
Restructuring(94)14,531 12 14,531 
Total operating expenses48,088 73,690 93,502 162,777 
Operating (loss) income(8,996)34,075 (34,594)(25,504)
Other income (expense)
Interest expense(1,642)(5,037)(3,204)(10,099)
Other (expense) income(10)411 272 1,545 
Loss on lease termination(524) (524) 
Net (loss) income$(11,172)$29,449 $(38,050)$(34,058)
Comprehensive (loss) income$(11,172)$29,449 $(38,050)$(34,058)
Net (loss) income per share:
Basic$(0.06)$0.16$(0.20)$(0.19)
Diluted$(0.06)$0.15$(0.20)$(0.19)
Weighted average common shares outstanding:
Basic186,817,431 183,597,766 185,798,865 181,609,452 
Diluted186,817,431 190,375,317 185,798,865 181,609,452 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


Akebia Therapeutics, Inc. | Form 10-Q | Page 3


Akebia Therapeutics, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

   
Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Accumulated
Deficit
Total Stockholders'
Equity (Deficit)
(dollars in thousands)SharesAmount
Balance at December 31, 2021177,000,963 $1 $1,536,800 $6 $(1,462,799)$74,008 
Issuance of common stock, net of
   issuance costs
4,404,600 1 7,177 — — 7,178 
Proceeds from sale of stock under
   employee stock purchase plan
191,146 — 367 — — 367 
Stock-based compensation expense— — 4,536 — — 4,536 
Restricted stock unit vesting1,789,326 — — — — — 
Net loss— — — — (63,509)(63,509)
Balance at March 31, 2022183,386,035 $2 $1,548,880 $6 $(1,526,308)$22,580 
Stock-based compensation expense— — 6,841 — — 6,841 
Exercise of options142,440 — 67 — — 67 
Restricted stock unit vesting176,179 — — — — — 
Net income— — — — 29,449 29,449 
Balance at June 30, 2022183,704,654 $2 $1,555,788 $6 $(1,496,859)$58,937 
Common StockAdditional Paid-In
Capital
Accumulated Other Comprehensive Income (Loss)Accumulated
Deficit
Total Stockholders'
Equity (Deficit)
(dollars in thousands)SharesAmount
Balance at December 31, 2022184,135,714 $2 $1,562,247 $6 $(1,557,025)$5,230 
Proceeds from sale of stock under
   employee stock purchase plan
103,500 — 34 — — 34 
Stock-based compensation expense— — 2,489 — — 2,489 
Restricted stock unit vesting1,596,732 — — — — — 
Net loss— — — — (26,878)(26,878)
Balance at March 31, 2023185,835,946 $2 $1,564,770 $6 $(1,583,903)$(19,125)
Stock-based compensation expense— — 3,490 — — 3,490 
Restricted stock unit vesting2,292,923 — — — — — 
Net loss— — — — (11,172)(11,172)
Balance at June 30, 2023188,128,869 $2 $1,568,260 $6 $(1,595,075)$(26,807)
 


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Akebia Therapeutics, Inc. | Form 10-Q | Page 4


Akebia Therapeutics, Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 Six Months Ended June 30,
(dollars in thousands)20232022
Operating Activities:
Net loss$(38,050)$(34,058)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization795 833 
Amortization of intangible asset18,021 18,021 
Non-cash interest expense related to sale of future royalties 4,428 
Non-cash royalty revenue related to sale of future royalties(936)(764)
Non-cash collaboration revenue (9,550)
Non-cash research and development expense782  
Non-cash interest expense983 916 
Non-cash operating lease expense(955)(1,198)
Non-cash write-off from termination of lease(825) 
Write-down of inventory612 7,430 
Change in excess inventory purchase commitments 4,854 
Stock-based compensation expense5,979 11,453 
Change in fair value of embedded debt derivative (710)
Changes in operating assets and liabilities:
Accounts receivable20,712 (30,421)
Inventory10,828 (4,362)
Prepaid expenses and other current assets7,684 561 
Other long-term assets(5,876)10,012 
Accounts payable(12,058)(8,807)
Accrued expense and other current liabilities(19,382)(19,464)
Operating lease liabilities1,034 1,205 
Deferred revenue(3,738)5,963 
Other long-term liabilities481 (8,622)
Net cash used in operating activities(13,909)(52,280)
Investing Activities:
Purchases of equipment (114)
Net cash used in investing activities (114)
Financing Activities:
Proceeds from refund liabilities to customers 40,000 
Proceeds from issuance of common stock, net of issuance costs 7,102 
Proceeds from issuances of stock under employee stock purchase plan34 367 
Proceeds from the exercise of stock options 67 
Repayments of term debt(24,000) 
Net cash (used in) provided by financing activities(23,966)47,536 
Decrease in cash, cash equivalents and restricted cash(37,875)(4,858)
Cash, cash equivalents and restricted cash — beginning of period93,169 151,839 
Cash, cash equivalents and restricted cash — end of period$55,294 $146,981 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Akebia Therapeutics, Inc. | Form 10-Q | Page 5

Table of Contents
Akebia Therapeutics, Inc.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS







1.NATURE OF BUSINESS
Akebia Therapeutics, Inc., referred to as Akebia or the Company, was incorporated in the State of Delaware in 2007. Akebia is a fully integrated biopharmaceutical company with the purpose of bettering the lives of people impacted by kidney disease. The Company has one commercial product, Auryxia® (ferric citrate), which is approved by the U.S. Food and Drug Administration (FDA), and marketed for two indications in the United States: the control of serum phosphorus levels in adult patients with chronic kidney disease (CKD) on dialysis (DD-CKD), and the treatment of iron deficiency anemia (IDA) in adult patients with CKD not on dialysis (NDD-CKD). Ferric citrate is also approved and marketed in Japan as an oral treatment for IDA in adult patients for the improvement of hyperphosphatemia in such patients with DD-CKD and NDD-CKD under the trade name Riona (ferric citrate hydrate).

Vadadustat, the Company’s lead investigational product candidate, is an investigational oral hypoxia-inducible factor prolyl hydroxylase (HIF-PH), inhibitor designed to mimic the physiologic effect of altitude on oxygen availability. On March 29, 2022, the Company received a complete response letter (CRL) from the FDA. The CRL provided that the FDA had completed its review of the Company's new drug application (NDA) for vadadustat for the treatment of anemia due to CKD in adult patients and had determined that it could not approve the NDA in its present form. In October 2022, the Company submitted a Formal Dispute Resolution Request with the FDA and focused on the favorable balance between the benefits and risks of vadadustat for the treatment of anemia due to CKD in adult DD-CKD patients in light of safety concerns expressed by the FDA in the CRL for dialysis patients related to the rate of adjudicated thromboembolic events driven by vascular access thrombosis for vadadustat compared to the active comparator and the risk of drug-induced liver injury. In May 2023, the Office of New Drugs (OND) denied the Company's appeal but provided a path forward for the Company to resubmit the NDA for vadadustat for the treatment of anemia due to CKD for dialysis dependent patients without the need for the Company to generate additional clinical data. In July 2023, the Company held an End of Dispute Type A meeting with the FDA to align on the contents of the NDA resubmission. The Company expects to resubmit the NDA by the end of the third quarter of 2023, with a potential Prescription Drug User Fee Act (PDUFA) date that the Company projects will be in March 2024.

In October 2021, the Company's former collaboration partner, Otsuka Pharmaceutical Co. Ltd. (Otsuka), submitted a Marketing Authorization Application (MAA) for vadadustat for the treatment of anemia due to CKD in adult patients with DD-CKD and NDD-CKD to the European Medicines Agency (EMA). In connection with the Termination and Settlement Agreement with Otsuka dated June 30, 2022 (Termination Agreement), Otsuka transferred the MAA for vadadustat with each of the EMA, the United Kingdom, Switzerland and Australia to the Company. In April 2023, the European Commission (EC) approved the marketing authorization of vadadustat under the trade name Vafseo for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis. In May 2023, the United Kingdom (UK) Medicines and Healthcare products Regulatory Agency approved the marketing authorization of vadadustat under the trade name Vafseo for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis. In June 2023, the Swiss Agency for Therapeutics Products approved the marketing authorization for vadadustat under the trade name Vafseo for the treatment of symptomatic anemia associated with CKD in adults on chronic maintenance dialysis. Vadadustat is approved in Japan as a treatment for anemia due to CKD in both DD-CKD and NDD-CKD patients under the trade name Vafseo, and marketed and sold in Japan by Mitsubishi Tanabe Pharma Corporation (MTPC). Vadadustat is also approved in Korea as a treatment for anemia due to CKD in DD-CKD patients.

In addition, the Company continues to explore additional development opportunities to expand its pipeline and portfolio of novel therapeutics.

Since inception, the Company has devoted most of its resources to research and development, including its preclinical and clinical development activities, commercializing Auryxia, and providing general and administrative support for these operations. The Company began recording revenue from the U.S. sales of Auryxia and revenue from sublicensing rights to Auryxia in Japan from the Company’s Japanese partners, Japan Tobacco, Inc. and its subsidiary Torii Pharmaceutical Co., Ltd. (collectively, JT and Torii), in December 2018. Additionally, following regulatory approval of vadadustat in Japan, the Company began recognizing royalty revenues from MTPC from the sale of Vafseo in August 2020. In February 2021, the Company entered into a royalty interest acquisition agreement with HealthCare Royalty Partners IV, L.P. (HCR) (Royalty Agreement), whereby the Company sold its right to receive royalties and sales milestones under its Collaboration Agreement with MTPC (MTPC Agreement), subject to certain caps and other terms and conditions (see Note 6 for additional information). The Company has not generated a profit to date, and may never generate profits, from product sales. Vadadustat and the Company’s other potential product candidates are subject to long development cycles, and the Company may be unsuccessful in its efforts to develop, obtain marketing approval for or market vadadustat and its other potential product candidates. If the Company does not successfully commercialize Auryxia, vadadustat, if approved, or any other potential product candidate, it may be unable to achieve profitability.
Akebia Therapeutics, Inc. | Form 10-Q | Page 6

Table of Contents
Akebia Therapeutics, Inc.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS






The Company’s management completed its going concern assessment in accordance with Accounting Standards Codification, or ASC, 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, or ASC 205-40. As of June 30, 2023, the Company had cash and cash equivalents of approximately $53.6 million. Based on its current operating plan, the Company believes that its cash resources will be sufficient to allow the Company to fund its current operating plan through at least the next twelve months from the filing of this Quarterly Report on Form 10-Q. If the Company’s operating performance deteriorates significantly from the levels expected in the Company’s operating plan, it would have an effect on the Company’s liquidity and its ability to continue as a going concern in the future. The Company expects to finance future cash needs through product revenue, potential strategic transactions, public or private equity or debt transactions, operating expense management, or a combination of these approaches. Assuming the Company is successful in executing its operating plan, the Company will require additional funding to fund its strategic growth beyond Auryxia or to pursue later stage development and commercial activities for its product candidates and any additional product or product candidates, including those that may be in-licensed or acquired. There can be no assurance that the current operating plan will be achieved in the time frame anticipated by the Company, or that its cash resources will fund its operating plan for the period anticipated by the Company, or that additional funding will be available on terms acceptable to the Company, or at all.
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company's significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2022, and notes thereto, which are included in the Company's Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A that was filed with the Securities and Exchange Commission (SEC) on August 28, 2023 (2022 Annual Report on Form 10-K/A). Since the date of those financial statements, there have been no material changes to the Company's significant accounting policies.

In the opinion of management, all adjustments, consisting of normal recurring accruals and revisions of estimates, considered necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included. Interim results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023 or any other future period.
Basis of Presentation and Principals of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. (GAAP) for interim financial reporting and as required by Regulation S-X, Rule 10-01. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the ASC and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB).
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Certain monetary amounts, percentages, and other figures included elsewhere in these unaudited condensed consolidated financial statements have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.
Segment Information
Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company's chief operating decision maker as of June 30, 2023 was its President and Chief Executive Officer. Based on the criteria established by Accounting Standards Codification 280, Segment Reporting, the Company has one operating and reportable segment, which is the business of developing and commercializing novel therapeutics for people with kidney disease.
Revision of Previously Issued Financial Statements
In connection with the preparation of its consolidated financial statements as of and for the three and six months ended June 30, 2023, the Company identified immaterial prior period errors related to the identification, evaluation and accounting for product returns in its previously issued consolidated financial statements.
In accordance with SAB No. 99, “Materiality,” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” and as described further in Note 3, Revision of Previously Issued Financial Statements, the Company evaluated the errors and determined the related impacts were not material to its financial statements for the prior year periods when they occurred, but that correcting the errors in the current period would be
Akebia Therapeutics, Inc. | Form 10-Q | Page 7

Table of Contents
Akebia Therapeutics, Inc.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS






significant to the Company's results of operations for the three and six months ended June 30, 2023. Accordingly, the Company has revised previously reported financial information for such immaterial errors. A summary of revisions to certain previously reported financial information presented herein for comparative purposes is included in Note 3, Revision of Previously Issued Financial Statements.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities as of and during the reported period. Management bases its estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. In certain circumstances, management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to: prepaid and accrued research and development expense, right-of-use assets and liabilities, embedded debt derivative, refund liabilities to customers, other long-term liabilities, stock-based compensation expense, and certain judgments regarding product and collaboration revenues including various rebates, returns and reserves related to product sales, non-cash interest expense on the liability related to sale of future royalties, inventories, income taxes, intangible asset and goodwill.

Although the Company regularly assesses these estimates, actual results could differ materially from these estimates. Changes in estimates are recorded in the period they become known.

Reconciliation of Cash, Cash Equivalents and Restricted Cash

In determining its cash, cash equivalents and restricted cash, the Company considers only those highly liquid investments, readily convertible to cash which as of June 30, 2023 primarily included funds invested in money market funds. The following table reconciles cash, cash equivalents and restricted cash reported within the Company's consolidated balance sheet to the total amounts showing in the consolidated statement of cash flows:
(in thousands)June 30, 2023December 31, 2022
Cash and cash equivalents$53,572 $90,466 
Restricted cash included in other long-term assets1,722 2,703 
Total cash, cash equivalents and restricted cash$55,294 $93,169 
3.REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
As previously disclosed, including in the Company's Form 12b-25 filed with the SEC on August 10, 2023, in the course of preparing its financial statements for the quarter ended June 30, 2023, the Company identified certain accounting errors relating to the recording and reporting of reserves for returns of the Company’s product, Auryxia® (ferric citrate) at the time the Company acquired Keryx Biopharmaceuticals, Inc. ("Keryx") on December 12, 2018 and when calculating the product return reserves for subsequent annual and quarterly periods through March 31, 2023 (collectively, the "Product Return Reserve Errors"). This resulted in errors in the Company's consolidated financial statements previously filed by the Company with the SEC for each of the fiscal years ended December 31, 2022, 2021 and 2020. Specifically, the Company utilized an incorrect methodology to calculate, record and report the Auryxia product return reserves at the time the Company acquired Keryx on December 12, 2018, which resulted in errors in the calculation of and understatement of goodwill of $2.6 million in each of the subsequent annual periods. The Company continued to utilize the incorrect methodology to calculate, record and report the product return reserves in the consolidated financial statements it issued with respect to its fiscal years ended December 31, 2022, 2021 and 2020, which resulted in the product return reserves and other product revenue allowances being understated by $8.2 million, $7.9 million and $6.0 million as of December 31, 2022, 2021 and 2020, respectively. A breakdown of the understatement of the product return reserves between current and long-term in the consolidated balance sheet are as follows:

Akebia Therapeutics, Inc. | Form 10-Q | Page 8

Table of Contents
Akebia Therapeutics, Inc.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS






December 31,
(in thousands)202020212022
Included in accrued expenses and other current liabilities:
Product return reserves and other product revenue allowances $1,956 $4,557 $5,051 
Included in other long-term liabilities:
Product return reserves 4,048 3,360 3,132 
Total understatement of product return reserves and other product revenue allowances $6,004 $7,917 $8,183 

Further, as a result of the Product Return Reserve Errors, revenue was overstated by $0.1 million, $1.9 million and $0.6 million, and accounts receivable was understated by $1.1 million, $0.7 million and $0.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. The changes did not impact cash or ending cash balances in the Company’s consolidated balance sheets in the periods presented in this report or in previously issued annual and quarterly financial statements.
In addition to the Product Return Reserve Errors, the Company has corrected other immaterial misstatements in the revised consolidated financial statements for the years ended December 31, 2022, 2021 and 2020 and related quarterly periods, including a $1.4 million to goodwill in each of the years ended December 31, 2022, 2021 and 2020 related to an excess purchase commitment recorded in connection with the Keryx acquisition. The changes did not impact cash or ending cash balances in the Company’s consolidated balance sheets in the periods presented in this report or in previously issued annual and quarterly financial statements.
The Company assessed the materiality of the Product Return Reserve Errors, including the presentation on prior period consolidated financial statements in accordance with the SEC Staff Accounting Bulletin No. 99, Materiality, codified in ASC Topic 250, Accounting Changes and Error Corrections (ASC 250). Based on this assessment, the Company evaluated the materiality of the impacts caused by the Product Return Reserve Errors and concluded that they do not result in a material misstatement of the Company's previously issued consolidated financial statements but would materially misstate the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2023. As a result, the Company determined that it was necessary to revise the consolidated financial statements it previously issued with respect to the fiscal years ended December 31, 2022, 2021 and 2020 and filed an amendment to its Annual Report on Form 10-K for the fiscal year ended December 31, 2022 with the SEC on August 28, 2023 to reflect the revisions.

The following tables reflect the impact of this revision on the Company’s condensed consolidated financial statements as of and for the three and six months ended June 30, 2022 (dollars in thousands, except per share amounts):


June 30, 2022
Condensed Consolidated Balance SheetAs Previously ReportedAdjustmentAs Revised
Inventories$36,272 $3,954 $40,226 
Accounts receivable, net81,869 133 82,002 
Total current assets304,163 4,087 308,250 
Goodwill55,053 3,991 59,044 
Total assets$521,804 $8,078 $529,882 
Accrued expenses and other current liabilities$91,284 $3,721 $95,005 
Total current liabilities233,680 3,721 237,401 
Other non-current liabilities66,889 7,721 74,610 
Total liabilities459,504 11,442 470,946 
Accumulated deficit(1,493,496)(3,363)(1,496,859)
Total liabilities and stockholders' equity$521,804 $8,078 $529,882 



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Akebia Therapeutics, Inc.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS






Condensed Consolidated Statement
of Operations and Comprehensive Income
Three Months Ended June 30, 2022
As Previously ReportedAdjustmentAs Revised
Product revenue, net$43,703 $(394)$43,309 
Selling, general and administrative32,807 (567)32,240 
Operating income33,902 173 34,075 
Net income $29,276 $173 $29,449 
Comprehensive income$29,276 $173 $29,449 
Earnings per share - basic $0.16$ $0.16
Earnings per share - diluted$0.15$ $0.15
Six Months Ended June 30, 2022
Condensed Consolidated Statement of
Operations and Comprehensive Income
As Previously ReportedAdjustmentAs Revised
Product revenue, net$85,151 $(470)$84,681 
Cost of goods sold, product31,923 771 32,694 
Selling, general and administrative77,134 (328)76,806 
Operating loss(24,591)(913)(25,504)
Net loss and comprehensive loss(33,145)(913)(34,058)
Net loss per share - basic and diluted$(0.18)$(0.01)$(0.19)

June 30, 2022
Condensed Consolidated Statement of Stockholders' (Deficit) EquityAs Previously ReportedAdjustmentAs Revised
Accumulated deficit$(1,493,496)$(3,363)$(1,496,859)
Net income$29,276 $173 $29,449 

Six Months Ended June 30, 2022
Condensed Consolidated Statement of Cash FlowsAs Previously ReportedAdjustmentAs Revised
Net loss$(33,145)$(913)$(34,058)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in excess inventory purchase commitments(773)5,627 4,854 
Changes in operating assets and liabilities:
Accounts receivable(30,994)573 (30,421)
Inventory1,159 (5,521)(4,362)
Other long-term assets9,347 665 10,012 
Accrued expenses and other current liabilities(18,625)(839)(19,464)
Other non-current liabilities(9,030)408 (8,622)
Net cash used in operating activities$(52,280)$ $(52,280)

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Akebia Therapeutics, Inc.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS






The following tables reflect the impact of this revision on the Company’s condensed consolidated financial statements as of and for the three months ended March 31, 2023 and 2022 (dollars in thousands, except per share amounts):
March 31, 2023
Condensed Consolidated Balance SheetAs Previously ReportedAdjustmentAs Revised
Inventories$20,604 $(194)$20,410 
Accounts receivable, net17,781 950 18,731 
Prepaid expenses and other current assets25,381 (678)24,703 
Total current assets120,719 79 120,798 
Goodwill55,053 3,991 59,044 
Total assets$276,858 $4,070 $280,928 
Accrued expenses and other current liabilities$46,367 $4,712 $51,079 
Total current liabilities82,944 4,712 87,656 
Other non-current liabilities12,643 4,129 16,772 
Total liabilities291,210 8,841 300,051 
Accumulated deficit(1,579,130)(4,773)(1,583,903)
Total liabilities and stockholders' equity$276,858 $4,070 $280,928 


Three Months Ended March 31, 2023
Condensed Consolidated Statement of
Operations and Comprehensive Income
As Previously ReportedAdjustmentAs Revised
Product revenue, net$34,828 $(122)$34,706 
Cost of goods sold, product10,473 705 11,178 
Selling, general and administrative25,221 (168)25,053 
Operating loss(24,938)(661)(25,599)
Net loss $(26,217)$(661)$(26,878)
Comprehensive loss$(26,217)$(661)$(26,878)
Earnings per share - basic and diluted$(0.14)$(0.01)$(0.15)

March 31, 2023
Condensed Consolidated Statement of Stockholders' (Deficit) EquityAs Previously ReportedAdjustmentAs Revised
Accumulated deficit$(1,579,130)$(4,773)$(1,583,903)
Net loss$(26,217)$(661)$(26,878)

Three Months Ended March 31, 2023
Condensed Consolidated Statement of Cash FlowsAs Previously ReportedAdjustmentAs Revised
Net loss$(26,217)$(661)$(26,878)
Changes in operating assets and liabilities:
Accounts receivable21,399 154 21,553 
Accrued expenses and other current liabilities(25,047)(68)(25,115)
Other non-current liabilities 573 573 
Net cash used in operating activities$(17,538)$(2)$(17,540)



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Akebia Therapeutics, Inc.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS







March 31, 2022
Condensed Consolidated Balance SheetAs Previously ReportedAdjustmentAs Revised
Inventories$39,422 $1,676 $41,098 
Accounts receivable, net64,582 776 65,358 
Total current assets302,687 2,452 305,139 
Goodwill55,053 3,991 59,044 
Total assets$535,356 $6,443 $541,799 
Accrued expenses and other current liabilities$109,660 $4,583 $114,243 
Total current liabilities253,914 4,583 258,497 
Other non-current liabilities77,743 5,398 83,141 
Total liabilities509,240 9,981 519,221 
Accumulated deficit(1,522,772)(3,536)(1,526,308)
Total liabilities and stockholders' equity$535,356 $6,443 $541,799 

Three Months Ended March 31, 2022
Condensed Consolidated Statement of
Operations and Comprehensive Income
As Previously ReportedAdjustmentAs Revised
Product revenue, net$41,448 $(76)$41,372 
Cost of goods sold, product22,333 772 23,105 
Selling, general and administrative44,327 239 44,566 
Operating loss(58,493)(1,088)(59,581)
Net loss$(62,421)$(1,088)$(63,509)
Comprehensive loss$(62,421)$(1,088)$(63,509)
Earnings per share - basic and diluted$(0.35)$ $(0.35)

March 31, 2022
Condensed Consolidated Statement of Stockholders' (Deficit) EquityAs Previously ReportedAdjustmentAs Revised
Accumulated deficit$(1,522,772)$(3,536)$(1,526,308)
Net loss$(62,421)$(1,088)$(63,509)
Three Months Ended March 31, 2022
Condensed Consolidated Statement of Cash FlowsAs Previously ReportedAdjustmentAs Revised
Net loss$(62,421)$(1,088)$(63,509)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in excess inventory purchase commitments(773)773  
Changes in operating assets and liabilities:
Accounts receivable(13,707)(71)(13,778)
Inventory(5,247)(3,243)(8,490)
Other long-term assets3,297 669 3,966 
Accrued expenses and other current liabilities4,426 2,960 7,386 
Net cash used in operating activities$(21,620)$ $(21,620)

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Akebia Therapeutics, Inc.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS






December 31, 2021
Condensed Consolidated
Statement of Stockholders' (Deficit) Equity
As Previously ReportedAdjustmentAs Revised
Accumulated deficit$(1,460,351)$(2,448)$(1,462,799)
Net loss$(282,840)$816 $(282,024)

The consolidated balance sheet as of December 31, 2022 has been revised in this Quarterly Report on Form 10-Q.
4.PRODUCT REVENUE AND RESERVES FOR VARIABLE CONSIDERATION
To date, the Company’s only source of product revenue has been from the U.S. sales of Auryxia. Total net product revenue was $42.2 million and $43.3 million for the three months ended June 30, 2023 and 2022, respectively, and $77.0 million and $84.7 million for the six months ended June 30, 2023 and 2022, respectively. Product revenue allowance and reserve categories were as follows: 
(in thousands)Chargebacks
and Discounts
Rebates, Fees
and other
Deductions
Product ReturnsTotal
Balance at December 31, 2022$1,259 $30,043 $10,923 $42,225 
Current provisions related to sales in current year5,216 37,270 2,462 44,948 
Adjustments related to prior year sales(8)(473) (481)
Credits/payments made(5,616)(41,474)(5,510)(52,600)
Balance at June 30, 2023$851 $25,366 $7,875 $34,092 
(in thousands)Chargebacks
and Discounts
Rebates, Fees
and other
Deductions
Product ReturnsTotal
Balance at December 31, 2021$1,047 $27,100 $10,065 $38,212 
Current provisions related to sales in current year4,965 42,562 2,735 50,262 
Adjustments related to prior year sales131 784  915 
Credits/payments made(5,236)(43,803)(2,968)(52,007)
Balance at June 30, 2022$907 $26,643 $9,832 $37,382 
 
Chargebacks, discounts and estimated product returns are recorded as a reduction of revenue in the period the related product revenue is recognized in the unaudited condensed consolidated statement of operations and comprehensive income (loss). Chargebacks are recorded as a reduction to accounts receivable while discounts, rebates, fees and other deductions are recorded with a corresponding increase to accrued expenses and other current liabilities or accounts payable on the unaudited condensed consolidated balance sheets. Estimated product returns for the period related to product sales are recorded as other long-term liabilities in the unaudited condensed consolidated balance sheet.

Accounts receivable, net related to product sales, was approximately $18.2 million and $37.3 million as of June 30, 2023 and December 31, 2022, respectively.
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Akebia Therapeutics, Inc.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS






5.LICENSE, COLLABORATION AND OTHER REVENUE
The Company recognized the following revenues from its license, collaboration and other revenue agreements (in thousands):
 
 Three Months Ended June 30,Six Months Ended June 30,
License, collaboration and other revenue:2023202220232022
MTPC Collaboration Agreement$516 $434 $4,678 $8,398 
Otsuka U.S. Agreement2,225 81,135 2,225 86,773 
Otsuka International Agreement   5,503 
Total collaboration revenue $2,741 $81,569 $6,903 $100,674 
JT and Torii Sublicense Agreement1,391 1,487 2,528 2,633 
Medice License Agreement10,000  10,000  
Total license, collaboration and other revenue$14,132 $83,056 $19,431 $103,307 

The following table presents changes in the Company’s contract assets and liabilities (in thousands):
Six Months Ended June 30, 2023
Balance at
Beginning of
Period
AdditionsDeductionsBalance
at End
of Period
Contract assets:    
Accounts receivable(1)
$1,901 $943 $(2,319)$525 
Prepaid expenses and other current assets$781 $ $(781)$ 
Contract liability:
Deferred revenue$47,034 $ $(3,738)$43,296 
Six Months Ended June 30, 2022
Balance at
Beginning of
Period
AdditionsDeductionsBalance
at End
of Period
Contract assets:
Accounts receivable(1)
$19,094 $92,146 $(54,614)$56,626 
Prepaid expenses and other current assets$4,309 $9,550 $(4,309)$9,550 
Contract liabilities:
Deferred revenue$42,380 $65,042 $(59,079)$48,343 
Accounts payable$3,171 $ $(3,171)$ 
 (1) Excludes accounts receivable related to amounts due to the Company from product sales of Auryxia which are included in the accompanying unaudited condensed consolidated balance sheet as of June 30, 2023 and 2022.

The Company recognized the following revenues as a result of changes in the contract asset and contract liability balances in the respective periods (in thousands): 
Three Months Ended June 30,Six Months Ended June 30,
Revenue Recognized in the Period:2023202220232022
Deferred revenue — beginning of the period$ $15,503 $ $22,105 

During the three and six months ended June 30, 2023 and 2022, the Company recognized no revenue from performance obligations satisfied in previous periods.

MTPC Collaboration Agreement
On December 11, 2015, the Company and MTPC entered into the MTPC Agreement, providing MTPC with exclusive development and commercialization rights to vadadustat in Japan and certain other Asian countries (collectively, the MTPC Territory), which was amended effective as of December 2, 2022. In addition, the Company supplies vadadustat to MTPC for both clinical and commercial use in the MTPC Territory. In February 2021, the Company entered into the Royalty Agreement
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