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Akebia Therapeutics AKBA recently announced that it is floating a secondary issue of 25 million shares of its common stock to the public at an issue price of $2 per share, amounting to $50 million.
The company also granted an option to underwriters of the issue to purchase an additional 3.75 million shares at the same price.
The secondary offering is expected to close today.
Why Did AKBA Stock Fall?
Akebia’s shares fell more than 28% yesterday after the announcement. Though the issue does not significantly dilute the existing shareholder base, the issue price per share did not sit well with investors. The issue price was at a discount to the closing price on Thursday, with the stock closing at $2.04.
Year to date, shares of Akebia have outperformed the industry.
AKBA’s Plans for the Proceeds
Akebia plans to use the net proceeds from this new issue and its existing cash balance to fund working capital and general corporate purposes, which may include supporting research, development and commercial activities for its marketed and pipeline drugs.
The company currently has two marketed drugs in its portfolio, namely Auryxia and Vafseo, both of which are approved for adults with chronic kidney disease (CKD). Auryxia is approved for two indications – control of serum phosphorus levels in dialysis-dependent CKD and iron deficiency anemia in non-dialysis-dependent CKD.
Vafseo, which is the only oral HIF-based treatment available in the United States, is approved to treat anemia due to CKD in adult patients on dialysis for at least three months. Though this drug was approved by the FDA last year, the drug was commercially launched in the country in January. AKBA expects to generate $10-$11 million from the drug’s sales during the first quarter of 2025.
Akebia is also planning to start the phase III VALOR study, which seeks to expand Vafseo’s label in non-dialysis-dependent adult patients with anemia due to CKD. This study is expected to start before this year’s end.
The company is also evaluating two other HIF-based product candidates – AKB-9090 (for cardiac surgery-related acute kidney injury or acute respiratory distress syndrome) and AKB-10108 (for retinopathy of prematurity) – in preclinical studies.
AKBA’s Zacks Rank
Akebia carries a Zacks Rank #3 (Hold) at present.
Akebia Therapeutics, Inc. Price
Akebia Therapeutics, Inc. price | Akebia Therapeutics, Inc. Quote
Key Picks Among Biotech Stocks
Some better-ranked stocks from the sector are ANI Pharmaceuticals ANIP, CytomX Therapeutics CTMX and 89bio ETNB. While ANIP and CTMX each sport a Zacks Rank #1 (Strong Buy) at present, ETNB carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.