U.S. stocks lower as investors rotate out of tech ahead of Jackson Hole
On Friday, Ardelyx Inc . (NASDAQ:ARDX) experienced a change in its stock rating and price target as Raymond (NSE:RYMD) James analyst Ryan Deschner adjusted the company’s status from "Strong Buy" to "Outperform." Accompanying this downgrade, the price target was also reduced from $13.00 to $11.00. Deschner’s decision was influenced by concerns about the future growth of Ardelyx’s Ibsrela and Xphozah franchises, which have recently demonstrated weaker than expected net sales and are contending with increased spending in sales, general, and administrative (SG&A) expenses.
Ardelyx’s Ibsrela and Xphozah both fell short of consensus estimates for net sales this quarter. The analyst pointed out that the first quarter is typically slower for the IBS-C market and that Xphozah has faced challenges after losing Medicare coverage due to changes in the dialysis bundling program. This coverage loss affected approximately 60% of the market for Xphozah. According to InvestingPro analysis, while the company achieved impressive revenue growth of 168% in the last twelve months, current metrics indicate the company is trading above its Fair Value. For deeper insights into Ardelyx’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Despite these setbacks, Ardelyx’s management remains confident, reiterating their 2025 guidance for Ibsrela at $240 million to $250 million and maintaining their peak sales guidance for Xphozah at $750 million. Deschner acknowledged the company’s commercialization team’s strong track record in executing its strategies and expressed continued optimism about the demand for Ardelyx’s drugs in treating IBS-C and hyperphosphatemia (HP (NYSE:HPQ)).
The analyst’s outlook for Ardelyx is still positive, emphasizing the potential for the company’s pharmaceutical products. Deschner’s comments suggest that while there is added uncertainty, there is also a solid foundation for Ardelyx’s future success, underpinned by the company’s robust commercialization efforts and the anticipated market demand for its Ibsrela and Xphozah treatments.
In other recent news, Ardelyx Inc reported its first-quarter 2025 earnings, revealing a net loss of $0.17 per share, which was below the anticipated loss of $0.11 per share. The company’s revenue reached $74.1 million, falling short of the expected $78.09 million, despite a 61% year-over-year growth. Sales of Ardelyx’s key products, IBSRELA and XPOVIO, demonstrated strong growth, with IBSRELA net sales increasing by 57% and XPOVIO by 55% over the previous year. Ardelyx’s cash, cash equivalents, and short-term investments totaled $214 million at the end of the quarter. The company remains optimistic about its future prospects, projecting IBSRELA net sales for 2025 to be between $240 million and $250 million, and aiming for peak sales of $750 million for XPOVIO. Despite the earnings miss, Ardelyx is focusing on expanding its market presence and maximizing sales potential for its core products. Additionally, the company is exploring corporate development and licensing opportunities to enhance its market position.
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