Why Akebia Therapeutics (AKBA) Stock Soared Today

NEW YORK (TheStreet) -- Akebia Therapeutics (AKBA) soared more than 25% on Monday on high volume after UBS initiated coverage on the biopharmaceutical company with a "buy" rating and $28 price target.

"Akebia Therapeutics is a clinical-stage biotech company that we believe is well positioned to produce a treatment for anemia that is potentially safer than current products, which have black box warnings for increased death and cardiovascular events but generated >$6bn in sales in 2013," UBS wrote in a research note. "The company's wholly-owned once-daily oral HIF-PH inhibitor AKB-6548 is in Phase-2b for anemia of chronic kidney disease (CKD). Akebia's second candidate, AKB-6899, is in preclinical studies for oncology."

The Cambridge, Mass.-based drug maker went public in March. UBS also outlined the following points to support its "buy" rating:

[1] HIF activators could become the standard of care in the anemia market if they are approved without the same black box warnings as injectable erythropoiesis-stimulating agents (ESAs) and hence are perceived to be safer than ESAs. The safety of AKB-6548 is supported by clinical and pre-clinical data and the highaltitude literature, which shows no untoward effect of HIF activation. [2] We see blockbuster potential for '6548 if it is found to be safe and effective. It would be second to market but would be well-positioned among competitors due to attractive once-daily dosing and still be ahead of two additional competitors in a multi-billion dollar market. [3] Near term ph2b data (4Q14e) could drive a valuation step-up in AKBA shares. [4] Management has extensive knowledge and experience executing in the CKD segment.

The stock closed up 25.39% to $21.14, a $4.28 increase from its previous close of $16.86. More than 2.9 million hares changed hands, well above the average volume of 423,041. The stock held a range of $17.07 to $23.32 for the day and holds a one-year range of $16.41 to $28.50.

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