ARDX - NASDAQ

Good day, and welcome to the Ardelyx First Quarter 2024 Earnings Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Caitlin Lowie, Vice President of Corporate Communications and Investor Relations at Ardelyx. Please go ahead.

Thank you. Good afternoon, and welcome to our first quarter 2024 financial results call. During this call, we will refer to the press release issued earlier today, which is available on the Investors section of the company's website at ardelyx.com. During this call, we will be making forward-looking statements that are subject to risks and uncertainties. Our actual results may differ materially from those described. We encourage you to review the risk factors in our most recent quarterly report on Form 10-Q that was filed today and can be found on our website at ardelyx.com. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. Our President and CEO, Mike Raab, will begin today's call with opening remarks and an overview of the company's progress during the first quarter of 2024. Next, Susan Rodriguez, Chief Commercial Officer, will provide an update on the performance of IBSRELA and XPHO

Good afternoon, everyone, and thank you for joining us on this call. Q1 earnings always seem to come quickly after we report our Q4 results. And yet, as usual, a lot has happened since we last provided you an update. First, XPHO

Thank you, Mike. It is great to be here today to discuss the commercial performance for IBSRELA and XPHO

Thank you, Susan. I'm very pleased to be with you today to discuss the first quarter performance we reported, which included meaningful progress towards our IBSRELA net sales revenue guidance, a strong launch of XPHO

Thanks, Justin. I hope that what you took away from our performance during the first quarter is at, one, we continue to have high expectations for IBSRELA, including $140 million to $150 million in net sales revenue this year and on the path to at least 10% market share and $1 billion in annual revenue. Two, XPHO

[Operator Instructions] The first question comes from Chris Raymond with Piper Sandler.

And congrats on the great success here with XPHO

So Chris, thank you for the questions. I guess, first of all, I hope by now you can tell that we're not quitters, and that we see what we're doing for patients and the uptick that we see with XPHO

The next question comes from Yigal with Citi.

Congrats as well on a very strong launch. Susan, I just had a few questions on the commercial franchise. Regarding IBSRELA, can you comment on the percent that were new writers versus repeat writers in the quarter? And then with the almost doubling in the territories, how do you expect that to scale in terms of the size of the base of the prescribing physician community? And then with XPHO

Thanks, Yigal. Thanks for the question. In terms of the new and repeat writing, we have not disclosed the specifics in terms of those percentages. But what I can tell you, that's a really important metric to track, is just the persistence of new writers being generated weekly, monthly, quarterly. And what we're seeing since launch is that this has been persistent with new writers being generated constantly on a weekly, monthly and quarterly basis. So seeing that persist, really gives us great confidence in the momentum and our guidance for this year. In terms of repeat writing, what's important to note there is that now that we're several quarters into launch, we have the data to show that new writers write again. So we're seeing that repeat writing is also persistent where the growth opportunity is, is in continuing to drive that new writer growth but then also amongst that growing writer base, really growing depth of writing. So these repeat writers could write more often and for more patients. And what our salesforce is executing on is really driving that broader view based on the foundation of positive experience they've had to date of patients that now really need to be considered as candidates for IBSRELA because they do have persistent systems, have been tried on other things, and now physicians have seen that there is a path to access and that patients are responding well. So they're broadening their view on potential candidates, and that's really an important growth opportunity for us as well. In terms of the salesforce impact, that's exactly why we believe it was critical to continue to invest in our salesforce footprint because our experience to date shows that the space is quite promotion sensitive. So the more we call on doctors, the more they write IBSRELA, we see that relationship. The more they engage in all of our omnichannel initiatives and in our program, the more IBSRELA they write. So expanding our footprint from 64 to 124 really gives us an opportunity to get those -- get into those HCP offices more frequently to continue to drive that expanded writing and really capitalizing on the fact that they are broadening their view on patients who are candidates for XPHO

Okay. Great. And then if you could comment on the XPHO

Yes, not specifically from a percentage standpoint, Yigal. But what we're hearing persistently is that all nephrology -- in general, nephrologists are just commenting on the flexibility. And that's what's really exciting because that means that, that patient group that they identify, that they believe is inadequately managed on binders or don't tolerate binders, they see XPHO

Yigal, it's Mike. Just one additional comment with that is, I think, as we spoke of earlier in other calls is you never had multiple mechanisms like you do with some many other diseases to manage what the drugs are trying to address. So it's not going to be a static ratio in any given patient. There's going to be an intern intrapatient variability depending upon their serum phosphorus. There's now flexibility and tools for these physicians to finally get phosphorus in the target range that they're looking for. So I think that's an evolve. And as we understand that better in the coming quarters, we'll certainly share it.

The next question comes from Louise Chen with Cantor.

Congratulations on the progress this quarter. So first question I wanted to ask you about was XPHO

Yes. I mean, there are two different product lines in different patient populations. So our guidance with IBSRELA is independent of that. But thanks for asking that. As it relates to stocking, let me ask Justin to address that.

Thank you, Louise. It has been really just in time, if you will, approach with XPHO

The next question comes from Ryan Deschner with Raymond James.

Congrats on the stong early XPHO

Yes. Ryan, thanks for the question. The easy answer is, of course, it's our very, very unique and disruptive commercialization approach. No kidding, I think what we do here and Susan can address it in greater detail, it truly is one about having really good drugs that are making a difference for these patients, having a commercial team that knows how to communicate that to the omnichannel initiatives and remarkable sales team with feet on the ground, talking to physicians about what these drugs can do for their patients because these drugs work. Susan?

Yes. So I would say exactly to Mike's point, our go-to-market strategy, actually, there are really very important parallels between IBSRELA and XPHO

Got it. And then on the Medicare versus non-Medicare breakdown for the first quarter?

Susan?

Yes. Thank you, Mike. Yes, so right now, it's actually really interesting being on the market now for a full quarter that we can see from our IQVIA data what the percent mix is for the XPHO

The next question comes from Dennis Ding with Jefferies.

Congrats on the quarter. Few questions from me, if I may. On gross to net for XPHO

Dennis. Yes, let me just address that quickly. Currently, I think as we've said, our intent is to enter TDAPA. I think the specifics of what you're just describing, that's going to play out over time. But our current intent is to go through the process and as we hope and the work that we're doing and what Buddy Carter is doing and others on the [hill], is understanding how important this medicine is for patients. This is a good policy. It's the right thing to do to ensure that patients get access to a drug that's already beginning to make a difference in many, many lives of dialysis patients. So the work continues and the specifics about how things come in and out based upon these next 6 months or more, we'll get that to you as we also learn. And Justin, if you can address the gross to net.

Thanks, Mike. Dennis, in the first quarter, XPHO

The next question comes from Roanna Ruiz with Leerink Partners.

One for XPHO

Yes, I'll ask Susan to address it, but the realities are, they are not that hard to find. When we know that patients are out of range. And they've been waiting for something like this. So it [indiscernible]. As you asked the question, do you have patients above? The answer is, of course, yes, and then we move forward.. Susan, sorry, I took the...

Yes. No, no, you're absolutely right. But I think in terms of -- I appreciate your question on who are these early patients we're getting. And I think to Mike's point, first of all, important to know that these phosphorus lovers are tracked very closely. So nephrologists have like an ongoing understanding of their patient base and where their phosphoruses are. So what we're seeing in terms of the patients that are being initiated on XPHO

The next question comes from Laura Chico with Wedbush.

Just 2 from me. First on XPHO

No to just briefly address the IBSRELA question, it's execution and everything that we have been doing is what we need to continue doing. Expanded footprint certainly is going to be a benefit as we said, trained in the field by the end of the quarter. So that's certainly a big part of it, too. But it's execution. The patients are there, they're waiting, and when you ask the right questions, if physicians identify, then we help them go through the prior authorization process. Susan, do you want to address the first question?

Yes, sure. So I think just as anything regarding XPHO

The next question comes from Joseph Thome with TD Cowen.

Congrats on the strong launch. Maybe on XPHO

Let me address both the first and the last question. It's early days for us to be sharing what's on the patient assistance program. So we're going to wait until we've got more experience under our belts with that. And as you saw just under 1.5 months ago, we hired Mike Kelleher as our Executive Vice President, Corporate Development and Strategy. That should be the signal to your question, our willingness to invest in pipeline opportunities with its organic development or opportunities we may find outside as I think what we are demonstrating is that the approach that we take to commercialization of drugs is clearly unique. Our ability to attract remarkable performers in the field, I think, is evidence of what you see in both IBSRELA and XPHO

The next question comes from Ed Arce with H.C. Wainwright.

This is Thomas asking a couple of questions for Ed. Congrats on the strong early traction for XPHO

Yes, it's a little bit hard to hear the question, but I think you're asking about the split of patients in GIs versus PCP. I think as Susan has spoken about our targets, it's high writing GIs and high writing PCPs who act as other GIs and have big practices. I don't know, Susan, if you want to add anything more to that?

Yes, exactly. So we identify -- our target audience is 9,000 HCPs that account for 50% of the total IBS-C indicated market. So even though so many doctors write IBS-C scripts, the opportunity of really targeting this concentrated group that accounts for 50% is really what drives the IBSRELA opportunity for us. And as Mike mentioned, what we find is that there really isn't a distinction between a PCP and a GI. What we have is the high-writing GIs and then we have high-writing non-GI that actually behave like GIs and just decide to take an interest in treating IBS-C and using the IBS-C indicated drugs to manage their patients. So it's really not a distinction that's relevant in our go-to-market approach.

Got it. And also, can you discuss how many patients are on XPHO

I think you're asking how many people are on 60-day versus 30-day scripts. I think, again, it's early days for us to be sharing that kind of information.

The next question comes from Matt Kaplan with Ladenburg Thalmann.

Nice out of the gate launch for XPHO

A quick comment and then I'll let Susan to address in more detail, is, nephrologists have been trying their entire careers with these patients to get their serum phosphorous levels in check. And they have been woefully unable to do a single mechanism of action of binders irrespective of the type of binder that it is. Patients don't want to take that amount of material. Low phosphorous foods are unpalatable. It's really a difficult life. And when a new mechanism of action just comes in and as Susan spoke in her opening statement about how this is being utilized along exactly what the votes were in our Adcomm, it's really heartening. And I think physicians see the opportunity to finally have a tool in their toolkit that may help their patients get into the target range that they've been trying to do. And as Susan said also in our opening comments that we are hearing from patients and from physicians that these effects are sustained. That's heartening and extraordinarily rewarding that we're going to have that kind of impact on patients. It is early days. You always are going to have early adopters, right? That's not an uncommon phenomenon. But the difference here is there's not one nephrologist out there that has not struggled with, nor one patient out that has not struggled with how to manage their serum phosphorus. Susan, anything to add?

Yes. I would just say, the Spherix data did report a 56% user base, and that's data that was generated in April. So -- and what we're seeing in the field is that nephrologists really want to spend time with our sales team. We're getting into these offices, they're learning about it. And they do have patients in mind once they are detailed on XPHO

This concludes our question-and-answer session. I would like to turn the conference back over to President and CEO, Mike Raab, for any closing remarks.

Thank you, everyone, for joining us this evening, including our investors who've been on this journey with us, the employees who drive our success, our partners who support us and the patients that we serve. With that, we can close the call. Thank you, operator.