Akebia Therapeutics Inc. (NASDAQ: AKBA) shares saw a handy gain on Tuesday after the company reported a new collaboration. Specifically, Akebia announced that it has entered into a collaboration and license agreement in the United States for vadadustat with Otsuka Pharmaceutical.

Vadadustat is an oral hypoxia-inducible factor stabilizer currently in development for the treatment of anemia associated with chronic kidney disease (CKD). Anemia related to CKD affects an estimated 1.8 million patients in the United States and arises from the kidney’s failure to produce adequate amounts of erythropoietin, a key hormone stimulating the production of red blood cells. Left untreated, anemia significantly accelerates patients’ overall deterioration of health with increased morbidity and mortality.

Under the terms of the agreement, Otsuka will pay $265 million or more in committed capital. This includes a payment of $125 million upon signing and a payment of approximately $35 million in the first quarter of 2017. Accordingly, the agreement also provides for Otsuka to pay $105 million or more of the costs of the global development program for vadadustat.

Additionally, Otsuka will pay potential development and commercial milestones up to $765 million.

Tatsuo Higuchi, president and representative director of Otsuka, commented:

Vadadustat has the potential to significantly change the current standard of care for patients with anemia associated with CKD and addresses a high unmet need for those suffering with this disease. With Akebia’s renal expertise, this collaboration will enable Otsuka to expand our cardio-renal portfolio while demonstrating our commitment to delivering new treatment options to patients worldwide.

Excluding Tuesday’s move, Akebia has underperformed the broad markets, with the stock down about 35% year to date.

Shares of Akebia were trading up about 20% at $10.15 on Tuesday, with a consensus analyst price target of $14.57 and a 52-week trading range of $7.00 to $13.20.

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