Upside Of 124% Expected For Akebia Therapeutics Following Vadadustat Collaboration

Analysts at JMP Securities believe Akebia Therapeutics Inc AKBA, a biopharmaceutical company that develops therapeutics based on hypoxia-inducible factor (HIF) biology, could deliver investors a triple-digit percentage return.

JMP's Michael King maintains an Outperform rating on Akebia's stock with a price target boosted from $19 to $21 after the company announced an agreement with Otsuka Pharmaceutical. As part of the agreement, Otsuka has received the rights to Akebia's anemia pill called vadadustat for $73 million upfront plus up to $792 million in development funding and milestone payments.

Partnership 'Validates' Akebia's Position

According to King, the agreement expands a prior collaboration and will now see vadadustat commercialized in Europe, Russia, China, Canada, Australia and the Middle East. The expanded partnership "validates" Akebia's competitive position, but perhaps more important, the deal alleviates any financing overhang that may have haunted Akebia's stock over the past few years.

Even more significant, Otsuka boasts the necessarily knowledge and expertise to launch and market vadadustat.

Finally, the incremental capital for Akebia will help the company run a Phase II study in hypo-responders (people with high doses of ESA but lacking an adequate hemoglobin response). Another study is likely to proceed with will evaluate three-times weekly vadadustat regimen versus the daily regimen.

At last check, shares of Akebia were up 23.92 percent at $11.61.