Akebia Therapeutics (AKBA) - Get Report announced a licensing deal Tuesday with Otsuka Pharmaceutical of Japan that fully funds ongoing late-stage clinical trials of the company's experimental anemia pill in exchange for 50% of the U.S. commercial rights.

Last December, Akebia sold Asian rights to the drug, vadadustat, to another Japanese drug company, Mitsubishi Tanabe Pharma. Akebia's original plan for this December was to find a European pharma partner for vadadustat -- and raise enough money to fully pay for the two large phase III studies that started enrolling patients earlier this year.

That plan changed when Otsuka expressed interest in owning a piece of vadadustat for the U.S. market.

"Our partnering goal was to fund the global phase III program for vadadustat while maintaining as much long-term value for the company as possible," said Akebia CEO John Butler, responding to questions Monday night via email. "Otsuka put a compelling offer on the table. We had to consider this. We continue discussions with additional partners for other geographies, such as Europe."

Otsuka is paying $125 million to Akebia as an upfront licensing payment for vadadustat, plus another $35 million in the first quarter of 2017. Otsuka is also obligated to pay a minimum of $105 million to fund the vadadustat phase III clinical trials.

In exchange, Otsuka receives 50% ownership of vadadustat in the U.S. If the drug is approved, Akebia and Otsuka will share in marketing costs and split sales evenly. Akebia is also eligible to receive additional development and commercial milestone payments for vadadustat of up to $765 million. The specific triggers for these future payments were not disclosed Tuesday.

Vadadustat is designed to stimulate the production of red blood cells (and the oxygen-carrying molecule hemoglobin) by mimicking the body's reaction to high altitudes. Fibrogen (FGEN) - Get Report is developing a similar pill.

Both Akebia and Fibrogen intend their respective pills to treat patients with chronic kidney disease, including dialysis patients. If approved, the drugs are taking aim at replacing less convenient, injectable anemia drugs like Amgen's (AMGN) - Get Report Epogen.

Total U.S. sales of injectable anemia drugs to treat kidney disease patients are estimated to be $3.5 billion annually, Akebia estimates.

A phase III study of vadadustat in non-dialysis kidney disease patients started in January and is expected to be fully enrolled by the end of 2017. A second phase III study in dialysis patients began in August and should be fully enrolled in the first half of 2018, said Butler.

Fibrogen, Akebia's chief competitor, is backed by Astellas and AstraZeneca (AZN) - Get Report . The phase III studies of Fibrogen's anemia pill, known as roxadustat, are already fully enrolled with results expected in 2018.

Ahead of the Otsuka deal, Akebia shares closed Monday at $8.35, giving the company an enterprise value of $159 million. At $20.05 per share, Fibrogen's enterprise value is $1.16 billion.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.