aibioAkebia Therapeutics draws $10.0 million Tranche C loan from Kreos, receives $9.3 million net
Tickers AKBA
Akebia drew the extended $10.0 million Tranche C loan on February 3, 2025, the last day of its extension. It received $9.3 million net and issued a warrant to a Kreos affiliate for 1,153,846 shares at $1.30 a share.
Key facts
- Company
- Akebia Therapeutics, Inc. (NASDAQ: AKBA)
- News type
- Debt Financing
- Primary source
- Akebia Therapeutics, Inc. Form 8-K filed February 7, 2025 (SEC EDGAR)
Akebia Therapeutics, Inc. (Nasdaq: AKBA) drew the final $10.0 million tranche of its senior secured term loan on February 3, 2025, after amending the loan with Kreos Capital VII (UK) Limited, the lender representative. The company received net proceeds of $9.3 million that day, after debt issuance costs, interest, fees and expenses. It disclosed the amendment, the drawdown and a related warrant in a Form 8-K filed February 7, 2025 under Items 1.01, 2.03 and 3.02. John P. Butler, its president and chief executive officer, signed the filing.
The amendment and the extended deadline
The facility is a senior secured term loan of up to $55.0 million, under an agreement dated January 29, 2024 and a First Amendment dated July 10, 2024. It has three tranches. An initial $37.0 million was funded on January 29, 2024, and $8.0 million more on April 19, 2024. The third tranche, $10.0 million, could be drawn in a single draw until December 31, 2024.
The Second Amendment, signed February 3, 2025, pushed that expiry date to February 3, 2025. The extended loan has terms substantially similar to the original third tranche, with one difference: interest accrues as if the money had been advanced on December 31, 2024. Akebia elected to draw it on the last day of the extension.
The company expects to file the Second Amendment as an exhibit to its 2024 annual report. Until then, the 8-K's description is the only public account of the amended terms.
The warrant
Under a warrant agreement dated January 29, 2024, Akebia issued a warrant on February 3, 2025 to Kreos Capital VII Aggregator SCSp, an affiliate of the lender representative. The warrant lets the holder buy 1,153,846 common shares at $1.30 a share, subject to standard adjustments for stock splits, stock dividends, rights offerings and pro rata distributions. It is exercisable for eight years from issue.
The warrant and the shares it covers were not registered under the Securities Act of 1933. Akebia relied on Section 4(a)(2) and Rule 506(b). The holder may resell the shares only under an effective registration statement, under Rule 144 or under another available exemption. The 8-K does not give the company's share price on the issue date, so the value of the warrant cannot be read from the filing.
Who the filing names
The 8-K names Kreos Capital VII (UK) Limited as the lender representative and Kreos Capital VII Aggregator SCSp as the warrant holder. It does not name any placement agent, underwriter, financial adviser or law firm for the loan or the warrant.
What the annual report says about the runway
Akebia's annual report for 2023, filed March 14, 2024, is the most recent full report before this filing. It describes Auryxia, a commercial product, and vadadustat, a candidate whose new drug application was resubmitted after the FDA issued a complete response letter.
The report says Akebia's cash, the cash it expects from product, royalty, supply and license revenue, and the borrowings available under the BlackRock Credit Agreement should fund its operating plan for at least twenty-four months if vadadustat is approved in the United States. If vadadustat is not approved, the report says the plan is funded for at least twelve months from the filing. It adds that a significant shortfall against the plan, or a failure to approve vadadustat, would hurt liquidity and could affect Akebia's ability to continue as a going concern.
The report also lists its obligations under the Kreos loan agreement, and the restrictions in the BlackRock Credit Agreement, as a risk to its financial condition. The 10-K says Kreos is a group of funds and accounts managed by BlackRock Inc.
The February 2025 draw adds $10.0 million of debt to that funding base. The 8-K does not say whether Akebia expects to draw more under the facility, and it does not update the vadadustat timeline that the runway depends on.