Anemia is common among patients with Chronic Kidney Disease (CKD) and end stage renal disease (ESRD). It is estimated that about 1.8 million people in the U.S. have anemia associated with chronic kidney disease.

Patients with kidney illness have a low supply of erythropoietin (EPO), one sort of hormone created by the kidneys to flag the generation of red blood cells. Again, the production of erythropoietin is regulated by a sort of protein, namely the Hypoxia-Inducible Factor (or HIF).

Akebia Therapeutics Inc (NASDAQ: AKBA) is a biopharmaceutical company focused on the development of noble proprietary therapeutics based on hypoxia inducible factor biology for patients with kidney disease.

They have a drug candidate in focus: AKB-6548, an orally bio-available hypoxia-inducible factor-prolyl hydroxylase (HIF-PH) inhibitor designed to increase natural production of erythropoietin in chronic kidney disease patients.

Since the levels of hypoxia-inducible variables in body tissues are directed by HIF-PH enzymes, by repressing the HIF-PH enzymes, HIFs could be balanced out or up-regulated, permitting the body to better react to reduced oxygen, injury and infection.

AKB-6548 is under a phase IIb trial in patients with anemia secondary to chronic kidney disease who are not dependent on dialysis. This study was launched in July 2013, and enrollment was finished – reaching the target of 209 patients – in April of this year.

Akebia hopes to proclaim results from the phase IIb study AKB-6548 for the treatment of anemia associated with chronic kidney disease in patients who are not dependent on dialysis sometime during this quarter (Q42014).

A phase II study of AKB-6548 in patients with anemia related to chronic kidney disease undergoing dialysis has also been initiated by the company. Data from this clinical study are expected in the third quarter of 2015.

ESAs (erythropoiesis stimulating agents), which are synthetic versions of EPO, are the mainstay of treatment to correct anemia in chronic kidney disease and end stage renal disease patients. Akebia fosters the hope that AKB-6548 would have a number of advantages over the current standard of care, ESA injections. 

Erythropoietin-Stimulating Agents or ESA is a kind of drug used in the treatment of CKD related anemia. It stimulates the production of red blood cell and is administered with a syringe.

With simplicity of administration like the once-daily, oral dosing, it has the potential to restore the normal diurnal variation of erythropoietin (EPO) for a patient with anemia in a way that an injectable erythropoietin stimulating agent cannot do. There is opportunity to potentially avoid the black box label ascribed to injectable rESAs because of the noble mechanism of action and dosing profile are some of the advantages of AKB-6548, according to Akebia.

Also in the pipeline is AKB-6899, the company’s second hypoxia inducible factor-prolyl hydroxylase (HIF-PH) inhibitor product candidate, which is still under preclinical testing. This compound, which is being developed for reducing tumor growth and development of metastases, is expected to enter phase I testing during the second half of 2015. The term metastases is the plural number of metastasis, which is the transmission of a disease-producing agents from the initial to other organs of the body.

Since inception, Akebia has incurred losses, and as of June 30, 2014, had an accumulated deficit of $81.0 million. No revenue has been generated to date. The company’s fiscal year ends in December.

The company ended Q2, 2014 with cash in $124.2 million, which is expected to be sufficient to support operations through the first half of 2016.

We first shared this trade thesis with our premium subscribers a few sessions ago, we told them to look at the stock chart below for a possible trade plan and and what could become a great trade opportunity if the technicals played out as we thought they might. A look at the more recent chart shows that they are playing out within the range, so we're now looking for a bounce around the $20 per share range. 

Below is the chart from September 29th with our Trade Thesis notes.