Ardelyx at Barclays Conference: Pipeline Expansion and Revenue Growth

On Thursday, 13 March 2025, Ardelyx (NASDAQ: ARDX) presented at the Barclays 27th Annual Global Healthcare Conference, offering insights into its strategic initiatives. The company reported robust sales growth for its products IBSRELLA and EXPOSA, while also addressing challenges like Medicare reimbursement changes. Ardelyx emphasized its pipeline expansion strategy, focusing on renal and gastrointestinal (GI) adjacent areas, and expressed optimism about future growth.

Key Takeaways

• Ardelyx aims for $1 billion in IBSRELLA sales, targeting a 10% market share.
• EXPOSA achieved $161 million in its first year, with a long-term target of $750 million.
• The company maintains a strong cash position of $250 million.
• Ardelyx is expanding its sales force and exploring global partnerships.
• The company is focusing on pipeline expansion through internal and external opportunities.

Financial Results

IBSRELLA:

• 2024 sales reached $158 million, with 2025 guidance between $225 million and $275 million.
• Gross-to-net range is 30%, plus or minus 5%.

EXPOSA:

• First full year sales in 2024 amounted to $161 million.
• The target market includes 220,000 non-Medicare patients.
• Long-term sales guidance is set at $750 million.

Overall:

• Ardelyx holds a cash balance of $250 million.
• Royalties from Fosun sales for hyperphosphatemia range between 15% and 20%.

Operational Updates

IBSRELLA:

• Sales force expansion from 34 at launch to 124.
• Targeting 14,000 writers, including 5,000 advanced practice providers.
• Field access managers added to enhance prescription pull-through.

EXPOSA:

• Launched in November 2023, targeting a 30% market share in the nephrology community.

Pipeline:

• Focus on renal or GI adjacent areas.
• Exploring lifecycle management and external innovation opportunities.

Partnerships:

• Collaborations with Kyowa Kirin in Japan, Fosun in China, and Knight in Canada.

Future Outlook

IBSRELLA:

• Aiming for a 10% market share to achieve $1 billion in sales before patent expiry.

EXPOSA:

• Targeting $750 million in sales, with a focus on the nephrology community.

Pipeline:

• High standards for external deals, focusing on unmet needs and underserved patient populations.

Q&A Highlights

IBSRELLA:

• 70% of patients still experience symptoms despite treatment.
• Contract negotiations unlikely to change formulary positioning.

EXPOSA:

• Medicare reimbursement changes will impact 2025 revenue.
• Efforts underway to ensure patient access despite these changes.

Pipeline:

• Prioritizing research and development with existing cash.
• Maintaining a strong balance sheet while exploring new opportunities.

In conclusion, Ardelyx remains focused on executing its commercial strategy and expanding its pipeline. For further details, please refer to the full transcript below.

Full transcript - Barclays 27th Annual Global Healthcare Conference:

Rajeev Prasad, Senior Analyst, Barclays: Rajeev Prasad. I’m the Senior Analyst for the spec pharma sector for Barclays. Thanks for joining us at the Barclays Global Healthcare Conference. And on day three, continuing the spec pharma track, we have with us the management team from Ardilex, including Justin Rentz, the CFO and our Chief Operations Officer too and Caitlin Lowy, the Vice President in Operations. Justin and Caitlin, thank you for joining us today for the healthcare conference.

Maybe to kick start, I’d love to invite you to provide a brief overview on Aardelix and more about the pipeline and the key value drivers for the company and then we can begin to solve the questions.

Justin Rentz, CFO, Ardilex: Great. Thank you. Good morning, everyone. And thank you Balaji for having us. It’s a beautiful day here in Miami at the Barclays Conference.

Also today also happens to be World Kidney Day, so we’re very excited to our kidney colleagues out there to offer a novel medicine for them. So Ardellix is a company that was founded just over fifteen years ago in California and our desire was to discover, develop novel medicines for either gastroenterology or kidney disease. And so novel mechanism of action, small molecule. And so we are so proud and grateful that we have in fact done that twice. We’ve discovered on our own developed, got approved and commercialized two medicines.

So, IBSRILLA is approved for Ittle Bow syndrome with constipation. We got that approved in 2019, launched in 2022. And we are very proud of our commercial success with that. We did $16,000,000 in the first year, then $80,000,000 and then $158,000,000 last year. And so we look forward to executing and building on the revenue of that product.

And we’ll get into that in detail. Our second product, EXFOZA is approved for hyperphosphatemia. So as an add on treatment to binders or if you are unable to tolerate binders, again, novel mechanism based on the NHC3 class and it works either as I said in combination with finders standalone, great efficacy profile, both drugs have had excellent clinical results. And so we launched EXPLOSA in the fall of twenty twenty three, had an excellent first full year sales last year with approximately 160,000,000 in net product sales revenue and look forward to talking more about that as part of our discussion. We have a very strong balance sheet.

We’ve tried to be thoughtful stewards of our capital and so we finished last year with approximately $250,000,000 in cash. So we’re well resourced to build a great company. And so we are looking to expand our pipeline. We have a number of items internally that we’ve discovered that we’re looking to and evaluating and we will be discussing those probably later this year should they move forward appropriately. We’re very measured and methodical in what we do.

We also are looking at external business development and so there’s opportunities that we are being very thoughtful and careful in evaluating, but it will take a very high bar because of the success we’ve had with our first two products, but we are looking to build a great company. And so we’re very grateful for the opportunity to talk to you today, Balanchi. And again, Caitlin is here. I don’t know if I’ve missed any of our key talking points to start.

Caitlin Lowy, Vice President in Operations, Ardilex: No, I think Justin outlined our key strategic priorities really well. Initially, we’re going to be focused on executing and driving commercial excellence for Azrel and Exposa, building out the pipeline and delivering a strong commercial and financial performance.

Rajeev Prasad, Senior Analyst, Barclays: Great. Thank you for that overview. So digging into the commercial side of things with Dibsyella, clearly the flagship product for the company. As I look at last year’s performance and I said launched in 2022,

Justin Rentz, CFO, Ardilex: you had an

Rajeev Prasad, Senior Analyst, Barclays: exceptionally strong launch and but the long term peak sales guidance was $1,000,000,000 So help us understand what degree of element of conservatism is there in the FY 2025 guidance considering that you had such a strong FY 2024? And how are you like baking the long term growth drivers into this guidance?

Justin Rentz, CFO, Ardilex: Sure. No, thank you for asking. So the IBSC space has really evolved over the last fifteen, twenty years. So it was once a primarily generic and over the counter marketplace has evolved with the introduction first of AMITIZA and then later on LINZESS. And so the teams at FOREST now have the and Ironwood did a great job with WinZESS and really building out the prescription marketplace for IBS C and that was about twelve, thirteen years ago.

And then another GCC agonist came along named TRULANCE about seven years ago or so. And they have really built out this prescription marketplace. So when we launched in 2022, there were approximately 5,200,000 scripts written for IBS C indicated drugs and we did around 16,000,000 in sales. In 2023, the indicated market was about 5,700,000 scripts and we did approximately $80,000,000 in sales. And then last year, there were about 6,300,000 scripts written and we did approximately 158,000,000 in sales.

So we’ve been growing with the market. The market clearly has unmet need. IBZREL has an excellent clinical profile and actually in the two Phase three trials, the results were very similar to WinZESS in terms of efficacy. It is the payer dynamic that we cannot really compete with WinZESS on price. And so we are essentially by the way the marketplace has evolved a second or third line treatment option, meaning you if we want the patient to ask if they’ve been on LINZESS or TRULANCE or even both and many of these patients have cycled through both drugs.

Would you like to try something new? Is there something different that you would like to try? And that’s what we are your symptoms completely under control, maybe you can do a little better. And so that’s kind of our marketing message. And so we are trying to give that new option with that novel mechanism for our patients.

And so we’re looking to really penetrate that market. As I mentioned, there were approximately 6,300,000 prescriptions written in 2024. We aspire to achieve at least a 10% market share. And so at our price point with our considered gross to net and that share percentage of scripts, we believe we can get to over $1,000,000,000 And so we are working methodically and building towards that relatively expeditiously as possible. So we increased our sales force initially 34 at launch, 64 a year later, and we built it from 64 to 124 over the course of last year having all reps in the field for sure for the fourth quarter and that’s where we saw some incremental growth.

So we’re trying to build towards that $1,000,000,000 target. We try to be very thoughtful and measured in our guidance. So we believe that when we can achieve a number, we will share that with the external audience. And so we’re comfortable with our $250,000,000 to $250,000,000 guidance. And that is on our path to $1,000,000,000

Rajeev Prasad, Senior Analyst, Barclays: So kind of understand the dynamics around the market growth and the prescription growth and you judiciously building your sales force expansion towards this target. So what kind of time duration should we think about when you speak about $1,000,000,000 or 10% share in this segment? And what kind of field force setup would maybe be needed? Maybe at the time you reach peak sales, what kind of sales force will be needed?

Justin Rentz, CFO, Ardilex: Yes. As I mentioned, we expanded our sales force last year from 64 to 124 over from the timeframe of say March to September. And really our initial launch, we were targeting around 9,000 gastroenterologists and high riding non gastroenterologists. With our increased sales force, we’re now targeting approximately 14,000 writers and those writers include an incremental approximately 5,000 APP, so advanced practice providers because that we’ve found in our work in the first couple of years that there are others within the office dynamic that were providers. So we are trying to drive breadth and depth of those group.

That’s our target audience. And we want each of those targets to ask their patients, would you like to try something new, have your RILs again, same idea, really messaging that over and over again. The composition of MATTERPATIN is February. And so our goal is to drive to that $1,000,000,000 target, of course, prior to that date in Pratt and Expiry. We’re of course doing everything we can to accelerate that growth and we’ll be thoughtful in how we add to the sales force in our team.

One of the changes our recent new Chief Commercial Officer, Eric Foster made is we’ve added some folks that are actually in the field, we call them field access managers and they’re actually out deployed to try to help the pull through of the scripts. Again, in this marketplace their prior auth required, we really want to help the office make this as seamless as possible and get the drug to as many patients as possible.

Caitlin Lowy, Vice President in Operations, Ardilex: Yes. I think the only thing I’d add is the reason why we believe that these investments both in the commercial team, our omni channel communications is the market has really demonstrated that it responds very favorably to Xrella. It has a strong clinical and efficacy profile. And once physicians have experience with EBSRLLA, they’re willing to write more. So we know that once we get in front of them, they’re more likely to write due to the clinical profile.

So these investments we feel very good about and we talk about the field can drive that clinical conviction at the top of the funnel. And then the more that we can use the lever with our Adelixis program and our field access managers to pull them through at the bottom, it allows us to touch the patient at every step of their journey.

Rajeev Prasad, Senior Analyst, Barclays: Understood. And you spoke about the unmet need. Is there a way you can quantify or comment on this unmet need and what section of the patient population this would constitute and how we could tap into them?

Justin Rentz, CFO, Ardilex: Yes, interesting question because there actually is a little bit of a difference in opinion between the physicians and prescribers and the patient population. I think from our survey data, we’ve found that when asked the high rating GIs and high rating non GIs in the physician population writ large, they believe that approximately thirty percent of their patient population is not well served or could possibly do better. When we ask the patient population essentially the same question, it’s closer to seventy percent who believe their needs are not completely resolved.

Caitlin Lowy, Vice President in Operations, Ardilex: Yes. I think that we have data that suggests up to thirteen million patients may have IBS C. So there’s a large patient population and they’re very active in their treatment. They especially those that are diagnosed, they’re looking at their entire life holistically and how to manage the condition. So that’s where some of the activities we’re taking this year to activate those patients in a more aggressive way, we believe will be involved.

As Justin said, seventy percent of them indicate they continue to have symptoms despite treatment. So that’s a large opportunity for us to continue to do.

Rajeev Prasad, Senior Analyst, Barclays: Understood. Maybe on the commercial side of things, can you provide a breakdown around the Medicare versus non Medicare patients for EBSRLLA?

Justin Rentz, CFO, Ardilex: Sure. So EBSRLLA is approximately, at least historically for us in the 50% neighborhood of commercial and then 50% non commercial and that is a little bit more Medicare than Medicaid and then there’s some cash, but it is different than EXPOSA. When we talk about EXPOSA, EXPOSA has a different patient mix, but approximately 50% commercial, approximately 30% Medicare and approximately 20% Medicaid plus or minus historically.

Rajeev Prasad, Senior Analyst, Barclays: And so as an extension to that, could you also talk about your contracting and your especially the close to net strategy and how this likely to evolve?

Justin Rentz, CFO, Ardilex: Sure. So we have not contracted yet with payers. We believe that as a novel mechanism and with the clinical profile that we have that we are comfortable in being second line from a payer perspective again because we have a first line clinical profile, we are there for the patients whose needs have not been well met by frontline therapy. And so we don’t believe that contracting would actually ever move the formulary of either LINZESS or TRULANCE or something else. And so we are firmly in that second line when your symptoms aren’t well needed, which Caitlin just alluded to.

So that’s a place where we are currently playing. Obviously, this is always subject to change. We take an independent look every year, but for now, we don’t believe there’s anything we can do contractually that will give us in a better position than we are right now, because if we did, of course, that would negatively impact our gross to net calculation. So, IBISREL historically has had a what I call 30 plus or minus five gross to net range, less favorable in the first quarter and then more favorable as time progresses. And that’s primarily a variable of the commercial co pay buy down that we do.

So to the extent that the patient’s commercial plan allows, we will do everything we can to pay their co pay at the point of sale. And so as you might imagine, most plan so deductible plans and others reset in January. And so typically our co pay claim amounts are higher and more frequent in the first quarter and they lessen over the course of the year. And so as an example, in 2024, in the first quarter, our gross to net was approximately 33.5% and in Q4 of last year was approximately 28.5%.

Rajeev Prasad, Senior Analyst, Barclays: Understood. That’s 500 basis points spread. I want to spend a few minutes on Exposa. And again similarly there on that front, maybe a quick overview around the product itself. It’s been one full year of launch for you.

And what has been the feedback till now been and what are you seeing on the ground?

Justin Rentz, CFO, Ardilex: Sure. So, Exposa was approved in October of twenty twenty three and we launched in November. And so now we’re fifteen, sixteen months into its commercial availability. It is a great drug. These patients are an end stage renal disease patients on dialysis and again our drug is indicated they’re either an add on therapy to binders or when you can’t tolerate a binder.

These patients, there’s approximately five hundred and fifty thousand patients in the end stage renal disease on dialysis in our country. And the mix is approximately 60% Medicare, 40% non Medicare. We want to make our drug available to everyone because of its novel mechanism. Its clinical profile is excellent. We were again discovered, developed and improved by our team and now launched the response from the patient community.

Again, it’s World Kidney Day today and so we are happy that we are able to make this drug available for kidney patients. It’s easier to take, so it’s one small pill twice a day, thirty milligram strength and it has a really strong clinical profile. And so we have seen patients that were outside of the target ranges set by the kidney community of which the goal generally speaking is to have your MIGS per deciliter 5.5 or less. We have been able to get patients who have been outside of range for many years under control and within acceptable range. And we’ve had even anecdotal feedback of patients who once upon a time were not transplant eligible to suddenly become transplant eligible because their levels were within range.

Caitlin Lowy, Vice President in Operations, Ardilex: Yes. So therapy is really serving an unmet need among patients. It can work in combination with binders as well as a monotherapy. So it’s proven to be a very flexible therapy for physicians. And while our sort of initial cohort of patients were those that maybe had the highest level of phosphate binders, we believe that physicians are beginning to expand their consideration set to really any patient who may be intolerant of binders or who adding EXPOS may allow them to reduce their binder regimen or add on top.

So the therapy has demonstrated we had an incredibly strong first year of sales at $161,000,000 And we believe it just demonstrates the unmet need among the patients and the continued growth opportunity in the future.

Rajeev Prasad, Senior Analyst, Barclays: Got it. And you have a long term guidance of $750,000,000 before peak. Remind us of when the IP expires and what is the trajectory to that $750,000,000 in terms of duration?

Justin Rentz, CFO, Ardilex: Great question. So Exposa has a composition of matter to August of ’thirty three, but its method of use patent extends till April 2034. As Kate alluded to, we did approximately $161,000,000 in sales last year that included Medicare patients as well. On January one of this year, the dialysis bundle took effect and so Medicare patients are no longer revenue generating prescriptions for us. And so we’re having a little bit of a reset here in 2025.

And looking at the total addressable population, again, there’s approximately five hundred and fifty thousand end stage renal disease patients on dialysis, forty percent of them approximately are non Medicare. So our total addressable market is approximately two hundred and twenty thousand patients. And it’s our belief over time that all of these patients at some point are going to need pharmaceutical intervention for their phosphate lowering therapies. So we believe we can get a meaningful share of those two hundred and twenty thousand patients. So in our survey work prior to approval, in our first year of launch and even now, we believe that we can achieve at least a 30% market share, at least the nephrology community believes that that’s kind of on average what they think that they would prescribe to their patients.

And so if we can make that type of penetration at our price point, we can get to that $750,000,000 of net sales prior to patent expiry.

Rajeev Prasad, Senior Analyst, Barclays: Understood. So got you right, the sixty percent Medicare patients are no longer accessible because of the changes in reimbursement?

Justin Rentz, CFO, Ardilex: They are no longer revenue generating patients, but we believe that is the right thing to do to make our drug available to everyone. And so our message hasn’t changed from March twelve of last year to March twelve of this year, which is have the prescription writers and the nephrologist or the nephrologist office to send the script to our Delix Assist. We will evaluate the patient’s coverage and should they be a commercial payer and that is a revenue generating script, excellent. If they happen to be a low income patient and this was true last year as well and they qualify, we will make sure the program is available through our patient assistance program to get them the drug as well, it’s mail order. And to the extent they are a Medicare patient before and now they are a Medicare patient still of course in 2025, we want them to still maintain their medicine.

We want the nephrologist to be agnostic to the coverage of the patient. We want them to write the prescription for every patient that it’s clinically relevant for them to benefit from. And so one of our tests that we’ve evaluated and Eric Foster, our Chief Commercial Officer has really carefully analyzed this. Okay, if you were a commercial patient in 2024 and you’re a commercial patient in 2025, are you still getting the drug? And the answer is yes.

Are you a new commercial patient in 2025? And are you getting the drug? And the answer is yes. If you were a Medicare patient in 2024, were you getting the drug and are you getting it still in 2025? And the answer is yes.

If you’re a new Medicare patient in 2025, are you getting the drug? And the answer is yes. So we’re very pleased with that our strategy is working. We want this drug to be available to everyone. Again, in honor of World Kidney Day, it’s the right thing to do morally to make sure that everyone who could benefit from our drug can get it.

Rajeev Prasad, Senior Analyst, Barclays: Wonderful. That’s great. So you’re definitely addressing one part of the equation, which is to ensure that patients don’t lose access to the drug. The other part of the equation is on the company itself for mitigating the revenue impact. So how could you counter that and what could you do to minimize revenue impact?

Justin Rentz, CFO, Ardilex: Sure. So we will of course have a setback in 2025 with this reduction from Q4 of twenty twenty four. But our goal again, as I just mentioned, is to make it available to everyone and have the nephrologist keep writing. So it is a very large addressable market. We’re only a year and a half since approval.

And so we need to just continue to have the nephrologist write the script. There’s enough of a total addressable market that we believe over time we will make it a the revenue guidance long term.

Rajeev Prasad, Senior Analyst, Barclays: And so to help investors understand this, is there any way you could share metrics around this retention of patients on EXFOZA in 2024, covered with Medicare in 2025? So how can we kind of gauge this or understand this? Sure.

Justin Rentz, CFO, Ardilex: I mean, it’s a little too early to tell specifically in 2025. We’re only about eleven weeks into the year. The overall dialysis space, particularly around phosphate lowering therapies has been a little tumultuous because of the change that affects all patients, not just related to our Adelix. And so we want to keep the nephrologist at the center of the decision making and encourage the dialysis organization to let them know that our DELEXIS drug Exposa is available through our DELEXIS program and to not worry about the other items. But in general, the space is having some challenges in getting their medicine because it’s a new government decision where Medicare no longer includes the oral only outside as a Part D benefit and has moved into a Part B benefit.

And so that is a change for all of us that we have to navigate. That’s too early to tell on a specific basis.

Rajeev Prasad, Senior Analyst, Barclays: Understood. Maybe shifting towards the pipeline side of things, clearly with two compositional matter patents expiring in 02/1933 for both drugs, with the patents expiring in 02/1933. I think you have to get started now to build the pipeline. So help us understand what’s your capital allocation strategy. You called out a strong balance sheet.

I see around $250,000,000 in cash. So how would R and D be prioritized and B2B prioritized over with this kind of balance sheet structure?

Justin Rentz, CFO, Ardilex: Yes, excellent question. So we’ve always tried to be thoughtful stewards of our shareholder capital. And so I think we’ve done a very good job over the past few years in getting us to where we are. And so we need to maintain that discipline in 2025 and beyond. So we aspire to build a great company and to your point, we need to augment the pipeline.

So we’re going to look at internal innovations that we have that we again have focused on the launch and growth of Ibsenrel and EXPOSER for the last few years and appropriately so. And now that we have that in command and in control and we’re going to execute on those, the next step to do is to augment our offerings. And so we’re going to have a very high bar to grow. So it has to be again an area of unmet need, patient population that’s underserved and an area where we think we can make a difference and that will be probably renal adjacent or GI adjacent. We do have some assets internally that we have not developed yet for again capital reasons or priority reasons.

Now we’re going to look to see if we can bring those forward. We’re going to look at lifecycle management to see if there’s any opportunities there because TENOPONUR is an outstanding drug, efficacious and safe, we know the profile. And we’ll also look at external innovation. Again, we’re going to have a very high bar, we’re going to be thoughtful. And again, but we if it can be similar to what we’ve done before, we’ll do it, but we’re not going to do a deal just to do a deal.

Rajeev Prasad, Senior Analyst, Barclays: Understood. And with the TENAPNR approved in multiple geographies and as you think of expanding OUS, what are the timeframes that you’re looking at and the investments needed for this and what’s the strategy?

Justin Rentz, CFO, Ardilex: We have three partners. So we partnered with Kyowa Kirin in Japan for hypophosphatemia. It actually got approved a month before us in September of twenty twenty three. They’ve been selling it for a year and a half now, doing very, very well. We provide them with the product supply.

Tandemo is actually challenging to make and so we actually do provide them with the drug and then they do their final packaging. We’re happy for their success and it’s unpartnered for IBSC in Japan. It happens to be a large market for LINZESS and that’s a potential opportunity. We were proud that two weeks ago our drug was approved in China with our partners Fosun. So Fosun will be moving that forward.

We got a $5,000,000 milestone and we have royalties between 1520% on their sales for hyperphosphatemia. They also have the rights to IBS C. They were focusing on hyperphosphat first. We are partnered with Knight in Canada and they are selling it for IBS C that was approved several years ago and we get a modest royalty from them. Europe is unpartnered as is the rest of world.

Again, it would take the right deal and the right partner. We want to be thoughtful about it. Again, echoing my business development comments, we would never do a deal just to do a deal. So we’d like the right partner to move this forward at the appropriate time. It is not a high priority for us.

Again, the most important thing for us is driving the execution of EBITDALLAR EXPLOSA and then following up with keeping a strong balance sheet. So if we can find the right partner that would fortify our balance sheet to go to our other initiatives, that would be great. But again, now that we have a business development team, we actually have the resources to look at partnering considerations, but it has to be the right deal.

Rajeev Prasad, Senior Analyst, Barclays: Understood. With the time just running out, I think that’s a great spot to leave this conversation at. Justin and Caitlin, thank you so much for your time and look forward to updates on your progress and I wish you the best of the conference. Great. Thank you.

Thank

Caitlin Lowy, Vice President in Operations, Ardilex: you for having us.

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