ARDX - NASDAQ

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" Raymond James

" Citi

" Leerink Partners

" Jefferiesruiz

" Wedbush Securities

" H.C. Wainwright

" TD Cowen

" BTIG

" Ladenburg Thalmann

" Cantor Fitzgerald

Good day, everyone, and welcome to the Ardelyx Third Quarter 2025 Earnings Conference Call. Now I'd like to turn the call over to Caitlin Lowie, Vice President of Corporate Communications and Investor Relations. Caitlin, please go ahead.

Thank you. Good afternoon, and welcome to our third quarter 2025 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 significantly from those described. We encourage you to review the risk factors in our most recent quarterly report on Form 10-Q that will be 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 Rabb, will begin today's call with opening remarks and an overview of the company's progress during the third quarter of 2025. Next, Chief Commercial Officer, Eric Foster, will provide an update on the performance of IBSRELA and XPHO

Thanks, Caitlin. It's great to be here with all of you today to share our third quarter 2025 results. Another standout quarter for both IBSRELA and XPHO

Thanks, Mike, and it's great to be with you all once again. The commercial organization continues to operate at an exceptionally high level. Our commercial strategy is strong and continues to be the foundation of our success. We are focused on addressing areas of high unmet need, delivering first-in-class medicines, leveraging a targeted sales and marketing approach to both patients and prescribers and investing in high-impact patient services programs to improve access. I'm excited to share with you today how this focus drove our performance during the third quarter, starting with IBSRELA. The strong demand for IBSRELA continued during Q3, leading to our highest demand quarter since launch. Additionally, we delivered record highs in the following areas. Revenue was $78.2 million, posting 92% growth year-over-year. We continue to see the strength of our field sales force and the impact of our marketing initiatives, which drove us to new highs in new writers and total writers, reflecting growth in both depth and breadth of writing. This increase in writers also led to growth in new refill and total prescriptions. Once again, the increased and focused activity from our field access manager team resulted in improved pull-through rates. These results clearly indicate that our strategies are working and our strong momentum continues. We remain focused on the patient, the prescriber and improving prescription pull-through so more patients can benefit from IBSRELA. First, the patient. IBS-C patients are incredibly engaged and consistently seek information and new options to address their unmet IBS-C symptoms. In fact, more than 75% of surveyed patients report that they continue to experience the symptoms of IBS-C despite treatment on a secretagogue. In contrast, patients report highly satisfied with IBSRELA. In a poster, we presented earlier this week at the American College of Gastroenterology's Annual Scientific Meeting, 88% of surveyed IBSRELA patients reported treatment satisfaction. Further internal market research also suggests that when patients learn about IBSRELA, they are motivated to ask for the therapy by name, and when they do, physicians are highly likely to prescribe it. Our focus on the patient will continue. In some areas, we will increase our investment in targeted patient marketing efforts to support our future growth expectations. Next is the prescribing health care provider. The investments we have made in our field-based team and physician marketing efforts continue to demonstrate that HCPs are highly responsive to IBSRELA's safety, efficacy and tolerability profile and its differentiated mechanism of action. Once again, we saw increased targeted activity from our sales team who drove expanded adoption and utilization. We maintain our focus on driving depth and breadth of prescribing among high-writing HCPs who are frequently seeing patients with IBS-C. Our messages are resonating, and the team will continue to drive clinical conviction and ultimately to identify and prescribe IBSRELA for those in need. Finally, prescription pull-through. The investments we are making in this area are delivering improvements across the patient journey. Our field access manager team increased their call activity during Q3, translating into increased rates of prior authorization approvals and resubmission approvals. We continue to look for ways to improve the patient experience, lessen the burden on HCPs and help ensure that every patient who has prescribed IBSRELA gets on treatment. We are focused on addressing critical aspects of the patient and physician journey and maintaining and building momentum as we enter the fourth quarter. As I mentioned earlier, my team and I just attended the ACG Annual Conference, and we heard directly from many HCPs about the impact of IBS-C and the important role that IBSRELA is playing for their patients. We are committed to the patient community, and we continue to bring important science to HCPs with 3 posters presented at the conference. I'm incredibly proud of all this team has accomplished, and I look forward to a strong close to 2025 on our path to more than $1 billion peak revenue. Now turning to XPHO

Thanks, Eric. Ardelyx delivered an impressive quarter with continued meaningful growth for both products and another record-setting quarter for IBSRELA. We thoughtfully invested to improve our commercial opportunities, restart our pipeline and strengthened our balance sheet through significant top line growth. Starting with revenue. For the period ended September 30, 2025, we reported total revenue of $110.3 million, an increase of 12% compared to the $98.2 million we reported in Q3 of last year. The growth was primarily driven by an incredibly strong performance by IBSRELA, recording revenue of $78.2 million, an increase of 92% over the same period last year. The team's focus on driving increased demand for IBSRELA and improving prescription pull-through continues to drive this momentum. The performance was also a result of expected improvement in our gross to net deduction, finishing the third quarter at approximately 31%, a slight improvement over Q2. We expect IBSRELA growth to continue, and as such, we are raising our guidance and currently expect to finish the year between $270 million and $275 million in revenue. XPHO

Thank you, Justin, not just for the thoughtful commentary that you provided as you finish up your final quarter with us, but for your leadership, your partnership and support of everyone at Ardelyx. Ardelyx' third quarter performance was a continuation of consistently delivering on our priorities. IBSRELA's strength is the foundation of our growth and the opportunities ahead for this business are significant. XPHO

[Operator Instructions]. Our first question comes from Chris Raymond of Raymond James.

Best of luck to you, Justin. It's great working with you and hope to in the future. Just some questions. Maybe first of all, on IBSRELA. Just looking at the -- I guess, it's the SparxIT data that kind of sticks out to me the most. You guys have now sort of mid-teens share, I think, overall in the IBS-C market, but first-line share looks like it's also in the single digits. Mike, maybe -- obviously, you got a long way to go to compete with Linzess for frontline share, but maybe just talk about how frontline use maybe is factoring into your long-range plans and what you guys are doing to try to make that more of a lever that you can pull? Then maybe the next question on the 10531, I guess you guys didn't talk about indications maybe for a reason, but just looking at the literature and potential targets for a potent soluble molecule here, some pretty big indications, hypertension, heart failure, maybe some diabetes indications. Are you looking at something as more broad or more of a targeted indication?

Well, I think let me answer the second part first. We've got to take some baby steps before we go to the sprint in marathon, right? I mean we understand how to develop NHE3 inhibitors exceedingly well. The characteristics of the molecules are extremely unique and the fact that we've got one that's as soluble and potent as this does open up the opportunity to consider things like what you just described. It is premature for us to consider what indications until we go through these initial steps. As I said in my comments, the ability that we now have to invest in what we have created in NHE3 inhibition is an incredible strength. I'll head it off questions that I'm sure are going to come is that this is well within our ability to spend and get it to the phases of development as we take advantage of the engine that IBSRELA is. To your questions about IBSRELA, I'll ask Eric to comment as well. I think as we've spoken in the past, Chris, the indication in our clinical work was first line, right? There is nothing in our label, nothing in our clinical work that says it cannot be first line. The growth that you see in that is completely organic. When we started this effort to commercialize IBSRELA, we made the intentional decision to position it in a way that is second and third line because no matter what we did with PBMs and formularies, we would never be first line because we wouldn't generate the kind of revenue to supplant what they're getting from current first-line therapies. We are seeing that organic growth because it is a good drug and experience with physicians who are writing the scripts are being successful in driving those through. There are millions of patients on GCC agonist right now, 80% or more of which are dissatisfied with their therapy. The market could grow no more, and we would still be able to meet our objectives and the projections that we've had. I think it's a really important way to think about the business is we -- because of the way that we've approached this, our target and our commitment to $1 billion or more is based upon second-line therapy with the established patients that are there and the call points that Eric and the team are pursuing. Anything to add to that, Eric?

Thanks, Chris, for the question. Yes, the only thing that I would add to that, Mike, is we're coming off a third quarter where we've got all-time highs in new writers and total writers. Clearly, we are doing a great job of expanding breadth and depth and utilization of IBSRELA. With that comes confidence in the product when they see the results and the impact that it can have with patients. As you mentioned, we know that more than 75% of the physicians or patients that are out there are continuing to experience symptoms, so they need something different. We remain committed to our strategy. We're pleased to see that it does get some utilization first line, as you noted, that we're indicated from a first-line basis, but we remain committed and very confident with what we saw in Q3 and the momentum that we're generating coming into Q4.

Next, we have Yigal from Citi.

This is Joohwan Kim on for Yigal. Congrats on the quarter. Maybe just 2 quick ones for us. I know you had commented on solubility and potency, but just wondering if you could provide a little bit more color on what 531 is hoping to solve that was suboptimal versus tenapanor?

Versus tenapanor is one way to look at it. When you have highly soluble gut-restricted drugs, you may have better penetration into the target of NHE3. Solubility matters to have a molecule do what it needs to do where you're trying to target it. Potency will bring you lower doses or better efficacy. That's exactly the preclinical work that we're embarking upon is to understand how best to leverage those qualities of this molecule. As I said in the previous question, it's premature for us to speak as to whether or not it is to answer questions that tenapanor can't or if there are other indications that make more sense to pursue.

Maybe just one more, if I may. It seems like Israel is really continuing to take off due in part to the investment into the sales force. Just wondering, as you're seeing that there's still a big opportunity there, is there any consideration for perhaps increasing the sales force even further beyond what you had already done to reach that peak 750 as early as possible?

I mean the one -- just a general comment, I'll ask Eric to comment on the specifics. Every day, we think about where else we can invest in this growth and this opportunity because what we see here in terms of the benefits providing patients, the organic growth that the previous question had in terms of moving into first line, this is a very good drug that's helping a lot of people. There are a lot of people that aren't being helped by it yet because of the breadth, depth and reach. There are many ways to communicate with those HCPs and those patients, and that broad-based approach is what we will always consider. We will always look at new and better ways to penetrate, but certainly investing those considerations and investing in whether it's the fans of the sales force is something that Eric always considers.

Yes. Thanks for that question. As Mike said, we're constantly looking at the data to see where we can continue to drive growth and value. As we're looking at the sales force, just recall, we're now about 3 to 4 full quarters in with the expanded sales force. What they've done is really raised the bar. Right now, I've got great confidence in this team. We are well on our path to achieve $1 billion peak year sales. As we go into Q4, I feel really confident about where the team is. We'll continue to look at the size of the field team, but we remain confident there. Also just want to take the opportunity to remind you, it's not just the field team. We've got great marketing initiatives out there. We've got a wonderful field access manager team that's focused on pull-through. It's really a team effort out there that's driving the growth of IBSRELA.

Next, we have Roanna Ruiz from Leerink Partners.

A couple for me. One for thinking about IBSRELA. What pushes and pulls could impact your ability to reach the high versus low end of your new guidance? It did sound like you're making great strides with new and repeat prescribers as well. Could you give us a little bit more color like what's resonating there?

Yes. I mean I think the guidance reflects our confidence in what we are doing with all the questions you've heard previously. I think that increased guidance in the range that we've provided is to show you our confidence in what we're going to deliver this year. I think Eric can go into some more of the specifics around it, but that should speak for itself. I think, Roanna, you've noticed over the years that we've taken a pretty conservative approach in the way that we provide these numbers. What we do is give you numbers that we are confident that we're going to meet. That's been consistently the way we've approached it over the years.

Yes. Like I said earlier, I mean, we're very confident in the strategy we have. If you think a little bit about what I mentioned earlier, we know that there are millions of patients out there that are -- have been on or are on secretagogue. Again, more than 75% of those patients continue to experience symptoms of IBS-C. What they need is something different. We know that this is a multifactorial disease. They need something that potentially offers a different mechanism with a proven safety and efficacy profile. I mentioned the poster at the American College of Gastroenterology that was just presented showing that more than 85% of the patients out there were satisfied with IBSRELA. We have a great opportunity out there to address a high unmet need in this patient population, and we continue to be confident with the strategy.

One question on 531. It did sound like it's just the beginning of building the pipeline. I was curious if there are any other targets or molecules that you're interested in or would consider? Is external BD also an option?

Well, yes, I mean, to the second part first is, as you know, just under 2 years ago, we brought in Mike Kelleher to lead our corporate development efforts. He and his team are always looking and speaking to opportunities that are out there. We will pull the trigger on things when the right thing is there for us. As I said in my opening comments, we're now at a place where we could look at these assets that we had sitting on the shelf because they're really good. Are there other ones? There may be, but our focus at this point for our internal pipeline generated pipeline is 531.

Our next question comes from Dennis Ding of Jefferies.

Congrats on the quarter. Two questions for me. One on IBSRELA. You guys are running trials in peds less than 18 years old. Can you help frame the size of that market versus the adults and if that is already accounted for in your $1 billion peak sales guidance? Also maybe comment on the timing of clinical trials to go into CIC? Then number two, on XPHO

Sure. Thanks for the question, Dennis. From the top, if you look at where we are with IBSRELA and where -- sorry, the pediatric trials were a commitment that you have to make to the agency. I think if you look at the total prescriptions that are out there for IBS-C, it includes those. The market that we're all penetrating is relatively small, but any IBS-C drug, those are included in the prescriptions there. We've not specified whether or not we are counting on that to get to the $1 billion because we're just looking at the total market as the market that we're penetrating. For CIC, we've not spoken of doing anything there. It's obviously, as I spoke in your last meeting in London, that is obviously one that we would consider as we have the ability to pay for it. Those are the sorts of things we will look at. As it relates to XPHO

Laura Chico from Wedbush Securities has our next question.

This is Thomas on for Laura Chico. Just one from us. You discussed gross to net for 3Q earlier for XPHO

Thank you, Thomas. Our gross to net was approximately 29% for Q3, and we do think that will be somewhat consistent going to Q4. We're not in a position yet to discuss specifics around 2026. Look for us to update that in early 2026.

Next, we have Matthew Caufield from H.C. Wainwright.

When we think about XPHO

Yes, sure. That's an important question, I think, to really understand how we can make sure that these patients have access. As we said earlier, we remain committed to access for these patients regardless of who the payer is. On the non-Medicare side, it's covered through their prescription benefit. ArdelyxAssist can adjudicate it and they can also work with specialty pharmacies to deliver to the patient. On the Medicare side, ArdelyxAssist can fulfill that through our patient assistance program. Because we did not file for TDAPA, the dialysis organizations are not buying and billing it. Important to note though, what we've seen is actually increased access when we think about patients, whether they're Medicare or non-Medicare, so more patients today have access to XPHO

Our next question comes from Joseph Thome of TD Cowen.

Congrats on the progress, and let me add my best of luck to Justin. Maybe the first one on the new program. I guess anything that you can share on the profile of this drug, whether it's extended release? Or is there a way to, I guess, improve tolerability? Obviously, the NHE3 mechanism does result in some diarrhea. I guess, is that able to be modulated given that it's kind of...

Joe, great question. I mean those are obviously the things that you begin to explore in the preclinical work that you're doing. I mean we have obviously years and years of experience and knowledge around the translation of what you see in animal models all the way through to human experience. Obviously, that's one thing that we would look at. The benefit that we together have learned about what NHE3 inhibition does, right, it's blocking sodium. Fundamentally, that's what it does. Then it's tightening the junctions, gosh, and that's where it works in phosphorus. That was not predictable. Geez, it also has a benefit in pain, which one would never assume that, that was the case until you start the IBS-C work. Those 3 different things that this molecule, NHE3 inhibition does, does open a vista for lots of things to consider, contemplate exactly around the lines of what you questioned, but time will tell. It is early, early in the process, but we were excited to announce its development.

Yes, and a little bit related to that. I guess, maybe can you talk a little bit about why now is the right time? I guess, did you see anything preclinically that you can share that kind of triggered the announcement or anything in the field, I guess? Or is it just kind of continued progress and now I guess anything?

Well, I kind of talked about it in a couple of previous questions is you look at the balance sheet that we have, we've not raised any money for years, and it's on the basis of what we're driving with IBSRELA and XPHO

Our next question comes from Julian Harrison of BTIG.

It's great to see another beat and raise for IBSRELA. You're at more than 70% year-over-year growth at the lower end of the new range for 2025. I guess looking to next year and beyond, I'm curious to what extent you think this cadence of growth can persist? Then looking towards the intellectual property estate, are you at a point now where you can talk more about how you're exploring extending exclusivity potentially beyond composition of matter? Are there any pending patent applications that you would highlight as potentially being Orange Book eligible?

Yes, great questions. It is exactly what we are doing and should be doing to protect the franchise that we're building. Yes, of course, those things are all the things that we will contemplate and talk about when we can. I think what's important about your question is the growth that you see as you described for IBSRELA, the potential is spectacular, right? If you look at the number of scripts that we have compared to the market that's out there and the growth that is being driven by the need that's out there for the patients by Linzess and others, that is to our benefit over time. Our belief is that reaching that $1 billion is something that's well within our control or we wouldn't have said that we expect it to be there. I think as we gain and continue to gain more perspectives and guidance, we can provide more guidance on when and how that is achieved. We're excited about the future for IBSRELA and what we're doing now, certainly with IBS-C and hyperphosphatemia with XPHO

Next, we have Aydin Huseynov of Ladenburg Thalmann.

Congrats with a great commercial quarter. Regarding business development activities, just curious on the kind of assets you're looking for? Is it more like a GI space? Or is it more like an early-stage Phase I preclinical? Or would you prefer something like Phase III plug and play or complementary to your commercial portfolio?

The answer is yes to all of that at the right time, right? We're going to take some baby steps as we can begin to afford to do more. The natural thing is to look at therapeutic areas and the close adjacencies of the therapeutic areas that we're currently in. Like any biotech company, we're going to be opportunistic as something demonstrates itself. Me too is not very interesting. Even me better, not very interesting. I think this very special and unique way that we approach commercialization is a really important driver of the considerations that we have for things to bring in. That's the lens from which we look at things. I think in the coming year, for sure, you're going to be hearing much more of that as we get our legs under us and look at opportunities that we are confident that we will bring in.

One more question, general question for me. You're making almost $400 million in annualized sales. You've got the -- you give about $75 billion long-term guidance and yet you're trading on $1.2 billion market cap. What do you think the market is underestimating, the long-term guidance itself or the future after 2033? Just curious on your thoughts on this.

I'll be completely transparent, and we've talked about this before. I think there's an over-index on XPHO

Next, we have Prakhar Agrawal of Cantor Fitzgerald.

This is Daz on for Prakhar. Could you comment on any potential tailwinds or headwinds in 2026 that we should be aware of for IBSRELA and XPHO

I can't think of any. I think we're looking forward to getting out of the apices of what the bundle is doing for these patients and being able to help them to the degree that we believe we can and should. The turmoil is significant. I don't think -- I think that's not a headwind. I think that's a tailwind that ultimately is going to help us as we emerge from '26 with this remarkable product. I think there are only tailwinds for both of them, not only because I'm an optimist, but I think everything that we're sharing with you today says that we've got the wind in our sails that are going to help us propel us to, at a minimum, the guidance that we've given for peak for both.

That concludes our question-and-answer session. With that, I'll turn the program back over to our host for any closing comments.