Ardelyx at Morgan Stanley Conference: Strategic Growth Amid Challenges

On Monday, 08 September 2025, Ardelyx Inc (NASDAQ:ARDX) presented at the Morgan Stanley 23rd Annual Global Healthcare Conference, outlining its strategic initiatives and financial projections. CEO Mike Raab highlighted significant advancements with IBSRELA and XPHOZAH, emphasizing potential revenue growth despite operational challenges. The company is navigating market dynamics with a focus on expanding patient access and optimizing capital allocation.

Key Takeaways

• Ardelyx projects IBSRELA revenue of $250 million to $260 million for 2024, with a long-term target of $1 billion.
• XPHOZAH’s relaunch strategy focuses on patient access, aiming for $750 million peak revenue despite a reduced market.
• The company ended Q2 with $238 million in cash, nearing cash flow break-even.
• Field access managers are pivotal in boosting prescription volumes for both IBSRELA and XPHOZAH.
• Strategic capital allocation and business development are focused on renal and gastrointestinal therapeutic areas.

Financial Results

Ardelyx reported a Q2 net loss of $17 million, which included $14 to $15 million of non-cash charges. Despite this, the company’s financial position remains robust with $238 million in cash, positioning it close to achieving cash flow break-even.

For IBSRELA, the revenue guidance for 2024 has been increased to between $250 million and $260 million. The company aims for a peak revenue of $1 billion, capturing approximately 10% of the IBS-C market, which exceeds 6 million prescriptions annually and has shown double-digit growth.

For XPHOZAH, the first half of 2024 saw revenues of $50 million. Despite a strategic decision that reduced the total addressable market from 550,000 to 220,000 patients, the company aims for a $750 million peak revenue target.

Operational Updates

IBSRELA has seen increased activity following the expansion of its sales force, with significant prescription volume growth. The company is leveraging omnichannel marketing, particularly social media, to enhance patient awareness and intent, supported by an expanded team of field access managers to improve prescription pull-through.

XPHOZAH’s relaunch strategy prioritizes patient access, irrespective of payer status, facilitated by field access managers who assist healthcare providers in navigating the system. This has resulted in a month-over-month increase in patient uptake, with Q2 marking the highest number of scripts written.

Future Outlook

Ardelyx’s future strategy includes optimizing commercial efforts for IBSRELA and XPHOZAH, exploring opportunities in renal and gastrointestinal therapeutic areas, and enhancing manufacturing efficiency. The company is also evaluating business development opportunities, focusing on novel therapies addressing unmet needs, and is open to various stages of development and commercialization.

The company aims to generate free cash flow to reinvest in its business, expanding the growth and market share of both IBSRELA and XPHOZAH, and addressing the 90% of the IBS-C market and 75% of unsatisfied patients.

For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - Morgan Stanley 23rd Annual Global Healthcare Conference:

Bob Klingenberger, Executive Director, Morgan Stanley: Great. Good morning. Before we begin, I need to read the following disclosure. For important disclosures, please see the Morgan Stanley disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. My name is Bob Klingenberger. I’m an Executive Director with the healthcare team. It’s my privilege to be joined by the team from Ardelyx this morning, Mike Raab, Justin Renz, and Eric Foster. Mike, maybe just to start off, could you give us a kind of a summary update on where things stand with Ardelyx and the recent progress you all have made with IBSRELA and XPHOZAH?

Mike Raab, Chief Executive Officer, Ardelyx: Sure. Bob, thank you for the invitation, Morgan Stanley. We’re really happy to be here and share some of the perspectives that we have on where we are today with Ardelyx. When the idea for tenapanor had always presented to the board, it was December 23, 2008. To see the evolution of the company to where we are today, we’ve given guidance now for IBSRELA from $250 million to $260 million this year. I don’t think people anticipated that we would be able to accomplish that, and certainly we’re well on the way to our peak revenue that we’ve spoken about of $1 billion. Our ability to get that, I think if you look at our growth rate year over year, it is very clear.

For XPHOZAH, that has been a remarkable journey for us in 2021, getting the CRL to where we are today, where in the first half of this year we have generated about $50 million of revenue. Where we are headed, I think with XPHOZAH, is completely proving the idea that we had of not participating in the tenapanor period to ensure that all patients would continue to have access to XPHOZAH. Between both of those products and ultimately our objective to build a sustainable enterprise in our corporate and business development efforts, I think we’re well on the way. I think these next 6, 12, 18 months are going to be an exciting time for the company as the trajectory of our growth continues to expand.

Bob Klingenberger, Executive Director, Morgan Stanley: Yeah. You mentioned the increased guidance for the year. Maybe just beginning with IBSRELA, could you give us some kind of color on what’s driving that from the commercial strategies that you all have been implementing?

Mike Raab, Chief Executive Officer, Ardelyx: Let me ask Eric to address it. Eric joined us now over a year ago and has done a phenomenal job in helping us see what the opportunity is as he expanded the sales organization.

Eric Foster, General Manager, Ardelyx: Thanks, Mike. Thanks, Bob. Yeah, very confident going into Q2. When we think about the drivers for the sales team for IBSRELA, the second quarter was our third full quarter post-expansion of the sales force. Typically, it takes two to three quarters to get up to speed. The area business directors, they’re building relationships, they reach in frequency into the offices. What we saw in Q2 was significant increased activity, which led to more new writers, more total writers, and ultimately led to more new and refilled prescriptions. I feel really good kind of about the recipe that we have on the sales side. From an omnichannel marketing side of things, we are very engaged on the social media side, driving awareness, intent for patients to go in, ask for IBSRELA. I feel really confident about the position that we have kind of post Linzess.

I think it is important to mention that we do have an indication where we can be used first line, and we have seen some of that utilization first line. What we feel there is physician confidence. As physicians continue to write for the product, they’re seeing the efficacy, the benefit to the patient, giving them greater confidence, and they’re able to go to it earlier. We feel like we’ve got a really winnable position for the long term. We were very pleased with the success that we saw in Q2, giving us the confidence to raise guidance to that $250 to $260 million for the rest of 2025.

Bob Klingenberger, Executive Director, Morgan Stanley: Yeah. You know, longer term, like the $1 billion peak sales guidance for IBSRELA, I think that roughly translates to 10% of the market. Could you walk us through just sort of the characteristics that are differentiating about the product within the IBS-C market and how you feel like that market, you see that evolving and the share evolving to kind of reach that peak number?

Eric Foster, General Manager, Ardelyx: Yeah. You know, the IBS-C market is a very well-established market. It’s a large market. We’re talking more than 6 million prescriptions on an annual basis. Over the past few years, we’ve seen that market grow double digits. That’s giving increased momentum there. We feel confident that we can achieve that billion even if the market did not grow. If you think about the patients that are out there, primarily Linzess and Trulance, they offer significant discounts for their preferred positioning with payers, where at this point in time, we do not. We know that only about a quarter of patients are very satisfied out there on their GCC agonist or their secretagogue. That leaves a very large market out there of patients that really are looking for something else. If you think about IBSRELA, it works differently. It’s the only product in a different class of therapy.

If a patient were to go on to a secretagogue and not experience the relief or potentially adverse events, there is another option out there for them. From an efficacy and a safety standpoint, comparable to what I think physicians are used to seeing. We’ve got, again, a winnable position, strong efficacy, safety. Patients clearly need different choices out there. It’s a disease that has multiple factors in terms of the etiology of the disease. It’s important for physicians to have multiple tools in their bag to be able to help patients. IBSRELA is a unique option for them to be able to do that.

Mike Raab, Chief Executive Officer, Ardelyx: One thing I would add to that and ask Eric to comment on it is, you know, obviously we all have probably experienced our health care system in which we all live today. Ultimately, getting prescriptions for new drugs filled is not an easy task for a patient. I think one of the strategies, Eric, you talked about it, is we have field access managers that really function pulling through the prescriptions that the ABDs have generated on the top of the funnel. I think it’s a really critical part of what we’re accomplishing for that growth.

Eric Foster, General Manager, Ardelyx: Yeah. We saw that early success in Q2. As Mike mentioned, we expanded our field access manager team. These are individuals that are in the field working with physicians’ offices, working with patients to help be able to pull through that prescription. The last thing we want is for a physician to identify a patient, write a prescription, and that patient not be able to have access. We know with the additional help of the field access manager team, we saw an increase in resubmission rates and approval rates early on in Q2. As Mike mentioned, it’s really a combination of driving to the top of the funnel, but then improving the efficiency of how patients can have access to the product and the physicians so that they can have greater confidence that they know when they write that prescription, the patient will actually receive it.

We saw really good indicators of that in Q2. All of that together is what’s given us that confidence for the remainder of the year and to be able to reach that billion.

Bob Klingenberger, Executive Director, Morgan Stanley: As you think about, you mentioned the market doesn’t, you don’t feel like it needs to grow to sort of get to that billion peak. Can you just walk us through a little bit of what the funnel looks like to kind of get to that billion and maybe a little bit of how you see going from 2025, your guidance now to that billion, the ramp to get there?

Eric Foster, General Manager, Ardelyx: Yeah, sure. As I mentioned, Linzess, TruLance, they are kind of the predominant first-line payers. Tens of thousands of new patients go on to therapy every single month for that class of product. This is a very large product or a market, more than 6 million prescriptions, and only a quarter of those patients feeling very satisfied. We know that those patients are going to need something else, and IBSRELA is that option for them. When we think about what are the levers that we have in order to drive to that billion, continue driving top of the funnel, improving pull-through, that’s what the field access manager team is working on. I think we have a very engaged and motivated patient base. 35 to 55-year-old females, they are out there seeking information. They are looking for different options, and they’re looking for treatments. We’re meeting them where they are.

I mentioned social media, that’s an area of strong presence for us out there. For us, it’s about meeting them where they are, making sure that they have the awareness of IBSRELA. They understand the benefits of the product, the safety of the product, and they feel confident going in and talking to their physician. As we think about that over long term, I think there’s probably a lot more that we can do as we’re looking at patient engagement and something that we’ll be focused on for sure.

Mike Raab, Chief Executive Officer, Ardelyx: Bob, as I look at the market, the way Eric just described it, remember you said 6 million prescriptions, and over the last couple of years, that business has grown double digit year over year. We’re seeing tens of thousands of new prescriptions every month. When we launched, we said it’s a billion dollars, 10%, and the market has subsequently grown. At our growth rate, 10% of that 6 million is a really small number, relatively. The opportunity set is spectacular for this product, given the benefit of providing patients. To me, I’m incredibly excited about the progress that Eric and the team have made and the beginning of seeing the fruits of the labor with the field access managers coming in and understanding that those investments make sense to accelerate our path towards that peak.

Bob Klingenberger, Executive Director, Morgan Stanley: As you think about, you mentioned some of the commercial initiatives kind of early this year and seeing the dividends of that. Are there others that are in the pipeline you have planned to continue throughout the rest of the year and into next year?

Eric Foster, General Manager, Ardelyx: Yeah. One that I would highlight would be on the patient side. As I mentioned, there are millions of patients that are out there. For us, I feel really confident in terms of our strategy coming out of the gate and how we’ve been able to have success over the past two and a half years to three years. We need to continue to evolve. I think that really engaging the patients, because we know they are out there seeking information, we need to be there for them. I think that’s one that I would certainly highlight. In the future, I would expect to see a stronger presence from us with regards to how we work with patients.

Bob Klingenberger, Executive Director, Morgan Stanley: Yeah. Maybe just moving to the XPHOZAH side, obviously this year has been a bit of a kind of a relaunch in terms of strategy. Do you want to maybe just talk us through how you’ve navigated kind of that relaunch, so to speak, and how you feel about the performance so far and the outlook for the rest?

Eric Foster, General Manager, Ardelyx: Yeah. Yeah. For us, it’s really been about putting the patient first. Our strategy has been making sure the patient has access to XPHOZAH, regardless of who their payer is, if it’s Medicare or if it’s a non-Medicare payer. In Q1, we saw that that strategy worked. We were really pleased to see that. In Q2, it was all about, can we now start to grow? We did see that we can start to grow that in Q2. To your point, there is confusion out there in the market. There is disruption. It’s our job to cut through the clutter. We know working with dialysis organizations, working with HCPs, the physicians, renal dietitians, there are lots of stakeholders in this environment.

Our team is very focused on providing the access message, but then also that they understand that the reason why is because when you give XPHOZAH, in addition to a binder, patients can lower their phosphorus levels. About 70% of patients, we know, cannot lower their phosphorus levels. Just like there’s a sizable market with IBSRELA, there certainly is a sizable market here as well. These patients are very sick, and they need products like XPHOZAH. For us, it’s about being persistent, cutting through the clutter, making sure that physicians understand how to access this product. Regardless of who their payer is, they can be confident that a patient can have access to XPHOZAH. We saw that happen in Q2.

Mike Raab, Chief Executive Officer, Ardelyx: Bob, I think, you know, as we think about this as a relaunch, certainly our decision to do what we chose to do has been adding to the clutter, if you will. The most important thing in that is, as Eric said, having the patient be first. We gave up 60% of our TAM, right? 330,000 patients no longer can pay for the drug. That doesn’t prevent us from providing it through our patient assistance program. The way I look at it is our TAM shrank from 550,000 to 220,000 patients. What does that mean in terms of for us to get to the $750 million peak that we described? You only need 60,000 of those 220,000. It’s a third of that TAM. Given the clear need that’s needed for XPHOZAH, which is doing for patients, that certainly seems very doable in our mind.

What we do know is if you look at precedent out there of other therapeutics that have gone into the bundle that are innovative, they have some penetration that’s better than when it started during the TNAP period. After that period, it goes away. To me and to us as a company and as a team, to know that there was a potential for XPHOZAH to go away for these patients after it’s been helping them for a two-year period of time is unconscionable. We made the hard decision to do what we’re doing, and we believe wholeheartedly it’s the right thing to do.

Bob Klingenberger, Executive Director, Morgan Stanley: Maybe just to help, you talked about the TAM kind of moving. How do you think about the strategy with the relaunch to make sure that you’re getting to that kind of third, the different strategies you’re?

Mike Raab, Chief Executive Officer, Ardelyx: A fundamental part of it, and I’ll ask Eric to address it, is that, like, you’re a nephrologist. We don’t want you to worry whether I’m commercial, and we’re your patients, I’m commercial, Eric’s Medicaid, and Justin’s Medicare. We don’t want you to think about that. We want you to write a prescription if you believe any of the three of these patients require additional phosphorus lowering. Then we adjudicate behind the scenes in our Ardelyx Assist program where those will land. That’s the idea, is ultimately, you don’t worry about it. We’ll adjudicate appropriately. Anything?

Eric Foster, General Manager, Ardelyx: Yeah. I would just add, just like we have the field access managers on the IBSRELA side, we also have them on the XPHOZAH side too. To Mike’s point, helping the offices be able to kind of work through the system, it is a new environment for them. We’re glad that we have a resource there for them and for the patients so that they can help navigate this new environment. We’ve seen that success. We saw month-over-month growth from March. We saw, as a percentage of patients that go on to XPHOZAH, more patients were getting on product in Q2 than ever before. Those are good early indicators for us that the strategy is working. It’s still early. We know that we need to continue to move forward and make sure that we don’t lose focus. That’s what the team’s doing right now.

Mike Raab, Chief Executive Officer, Ardelyx: To reemphasize the point I just made, Q2 was the largest number of scripts written. We lost revenue because Medicare went away, but the demand is there for physicians recognizing that XPHOZAH is required. It’s working. It just is a new environment and a relaunch that we’re doing.

Bob Klingenberger, Executive Director, Morgan Stanley: Maybe just to clarify, more than even prior to the decision.

Mike Raab, Chief Executive Officer, Ardelyx: Yeah, before that, it was Q4 in our growth, and Q2 eclipsed it.

Bob Klingenberger, Executive Director, Morgan Stanley: Yeah, no, that’s, I mean, as you talked about the $750 million peak, you know, the sort of smaller total addressable market, that’s now going to only be driven by the commercial, right? You’re not commercial Medicaid.

Eric Foster, General Manager, Ardelyx: Medicaid. Yeah, we like to refer to it as the non-Medicare payer segment.

Bob Klingenberger, Executive Director, Morgan Stanley: Right.

Eric Foster, General Manager, Ardelyx: What that is, is commercial and Medicaid are the two predominant, but there’s some VA and Tricare and DOD. What we saw in Q2 was that part of the business grew from Q1. That’s a really important indicator because that essentially is the paying business moving forward. We’ve got a really close eye on that. It was good to see that growth in Q2.

Bob Klingenberger, Executive Director, Morgan Stanley: Yeah, we’ve talked a little bit about kind of your peak goals and some of the guidance you’re getting for the year. Maybe addressing this a little bit for you as well as you think about kind of moving into next year and the evolution of the business. I know, obviously, having given guidance, but you know, approaching that kind of break-even profitability, how do you all think about that as a kind of a priority for Ardelyx to achieve in your terms?

Mike Raab, Chief Executive Officer, Ardelyx: I’ll make one quick comment and then pass it over to Justin. We’re at a place right now where we’ve hired an excellent corporate and business development team headed by Mike Kelleher. We’re approaching cash flow break-even where we will be able to meaningfully reinvest into this business, whether it’s in our direct therapeutic areas, associated ones, and to be opportunistic. I think as Justin has shepherded us through the various financing that we’ve done over the last four years to get to where we are today, it’s a critical juncture for the history of the company of where we’re going to be in the next 6, 12 months.

Eric Foster, General Manager, Ardelyx: Our balance sheet is getting to the point where we have that flexibility and soon optionality to make those decisions that Mike mentioned with our great corporate development team. Think about the second quarter where, even in spite of the environment where XPHOZAH had less net revenue compared to Q4, with that growth trajectory, we still only lost $17 million in Q2, but that included around $14 to $15 million of non-cash charges. You can see we’re really approaching that cash flow break-even point relatively soon. That will allow our team to really be able to thoughtfully look at a lot more things that maybe we could have in days gone by and really build that pipeline and help build us a great company.

Bob Klingenberger, Executive Director, Morgan Stanley: Maybe just talk us through, Justin, if you could, where you sit, Q2 balance sheet, and how that on a capital allocation priority is going forward, how you think about utilizing the various levers that you mentioned there.

Eric Foster, General Manager, Ardelyx: Sure. We finished the second quarter with about $238 million in cash, which is great. As I mentioned, our utilization for operations is quite low. We’ve always tried to thoughtfully invest in the business. Our inventory is in great shape as we prepare to meet the needs of these patients that’s coming. We’re in great shape there as well. We’ve always tried to be thoughtful about capital. We look very closely at our cost of capital, and whether that’s equity, debt, or another instrument. I think now we’re at that position where our team will have a lot of optionality, if you will, flexibility to look at different things because we can support, you know, a growing business going forward.

Bob Klingenberger, Executive Director, Morgan Stanley: In terms of allocation of that capital, Mike, maybe talk to us a little bit about, you mentioned the corporate development team, but is there what areas might you initially look to build? Are there kind of...

Mike Raab, Chief Executive Officer, Ardelyx: It’s, you know, we have actually a board meeting this week up in Boston. One of the questions we all continue to ask Eric is, you know, hypothetically, if money weren’t an object, what else would you be doing with the two teams that we have, right? You can’t forget the burden at hand, right? As you look at capital allocation and are we optimizing what we’re doing with the conversation we just had about IBSRELA and XPHOZAH, that’s always going to be probably job one, to make sure that capital is appropriately and investments are appropriately focused on those two areas. Secondly, if you look at renal, GI, that makes sense. What are the associated nearby indications or therapeutic areas, cardiorenal? If you look at hepatology and other things like that. As I said, you’d be opportunistic. We always want to optimize our manufacturing.

That’s something we will continue to do because every % improvement, even though our gross profits are phenomenal, any improvement there is going to be critical given the volumes we’re going through.

Bob Klingenberger, Executive Director, Morgan Stanley: Yeah, maybe, Eric, today, how much, you know, with the existing portfolio, how much sort of synergy is there in terms of, you know, kind of GI?

Eric Foster, General Manager, Ardelyx: Yeah. They’re very distinct and different. As I think about it, they’re very different. That’s one of the reasons why we have two completely separate, really, businesses, not just Salesforce, but two completely separate business units led by two different General Managers. That’s important because we want to be able to pull through those insights and go deep. When we think about business development, we have a lot of deep insights in GI and nephrology that can really help us out. I also like to say we also have a core strength in commercial execution as well and pull through. While those two are very different, our commercial strategy and execution kind of brings them together. In the event that we were to find something that was adjacent or different, I do feel confident that we could take it and be successful.

Mike Raab, Chief Executive Officer, Ardelyx: We do have shared services in our access and reimbursement. A lot of the strategies there go back and forth. The field force, the physician-facing, the HCP-facing people are clearly distinct, but there’s a lot of shared services internally.

Bob Klingenberger, Executive Director, Morgan Stanley: Maybe, you know, we talk beyond the therapeutic kind of criteria when you think about business development. What other criteria are out there kind of?

Mike Raab, Chief Executive Officer, Ardelyx: Great question. For us, certainly, it’s got to be distinct. It can’t be me too. It is not terribly interesting, even me better. It’s got to be an unmet need. You know, everyone says this, right? That it’s got to be an unmet need. It’s got to be novel, all those things. It’s not unique that we’re saying things like that. That’s the lens that we look at opportunities through.

Bob Klingenberger, Executive Director, Morgan Stanley: Yeah, any sort of phase of development, you know, kind of looking broadly or, you know, honing in on that?

Mike Raab, Chief Executive Officer, Ardelyx: Obviously, what we can afford today is different than what we can afford a year, two years, three years from now. You always look at it through that lens. As Justin pointed out, we try to be very thoughtful about capital allocation and where and how we spend dollars that aren’t ours, right? It’s the shareholders’ money, so we try to be very thoughtful about that. What does that mean? Earlier stage now, you know, 1B, 2, thereabouts sort of things. Later, buying revenue is tough, just philosophically because one would argue that mostly, that’s baked into the price. We’ll look at everything across the stages of development and commercial as well.

Bob Klingenberger, Executive Director, Morgan Stanley: How do you think about, in the context of the approaching cash flow break-even, something earlier stage, incremental investment in that, how do you think about balancing all of that, capital allocation, P&L?

Mike Raab, Chief Executive Officer, Ardelyx: Yeah. I mean, anytime, you know this, Bob, anytime you look at a transaction and do a deal model, that’s going to include the additional regulatory, clinical, all the headcount that are required in there. I think you look at the entire cost of development of something that you’re bringing in, and then we look as to whether or not it’s affordable at this stage or is it affordable now, almost, but then clearly will be. You can take a little bit more risk. I think, as we balance both where we are with cash on hand, we’re collecting money now, which is amazing to be able to do, and the growth of the business kind of gives you a line of sight in terms of what is and isn’t affordable.

Bob Klingenberger, Executive Director, Morgan Stanley: Yeah. We’ve talked about with each product, sort of the billion and the $750 million of peak revenue. You all have talked about the IP profile of the product. That implies a lot of growth in the medium and longer term. How do you think about balancing the investment needed for that, investment needed to add additional portfolio?

Mike Raab, Chief Executive Officer, Ardelyx: Yeah. I mean, it’s a good problem to have, right? First and foremost, because, you know, as we look at the expansion that was done and the lift that we’re seeing, the investment now in the field access managers and the lift that we’re seeing, any script that doesn’t get filled, the fact that you as a physician have written a script for me, your patient, and I go to CVS, Walgreens, whatever it might be, and it doesn’t get filled, that’s awful, right? Because you’ve got two parties that are critical for ultimately generating the revenue for us that have done their job, and the system then fails them, right? For us, the field access managers and what we do at Ardelyx is absolutely critical.

I think we will always look at that first because it is the bird in the hand to make sure that you are optimizing those. Anything to add to that, Eric?

Eric Foster, General Manager, Ardelyx: No. I mean, I think I would just reinforce that the opportunity is there, and we just need to continue to improve to pull through those patients. I like what Mike said. We’ve got two parties there, two stakeholders there that have done their job. If we can help pull through the system, that will only make things better. We feel like we’ve got the right number of salespeople out there, given the market that we’re focused on to drive top of the funnel. We’re always continuing to kind of look at our organizational design and our numbers there. It feels good that they’re driving top of the funnel. We’ve got the field access managers pulling through, and we just need to continue to keep getting better there and the opportunity is there.

Bob Klingenberger, Executive Director, Morgan Stanley: Yeah, it’s a, you know, I talked a little bit about the kind of the trajectory from today to where you have your peak guidance. Maybe just, you know, kind of as a thought exercise, five years in the future, end of the decade, where do you sort of, you know, aspirationally perhaps, kind of see the company?

Mike Raab, Chief Executive Officer, Ardelyx: Elegant question. We haven’t guided as to when. I like the thought exercise. If you look at our growth rate and look at our gross profit, look at our expenses, I think the math is pretty straightforward. The trajectory that we’re on gives me great confidence that we will be generating that free cash flow not too far on the horizon where we can continue to build this. The amount of free cash flow that comes allows us to do bigger and more interesting things that we contemplate now but can’t afford, right? There are things that we look at and say, "Gosh, that would be ideal." It’s not yet time. It gives us flexibility. To challenge Eric with the two products that are on the market now, what more can we do for those? What more can we do to expand those peaks if it’s even possible, right?

That should be the thought exercise. When you have products like these that are making such a difference for the patients that are taking them, you must always go through it. At 10% penetration, what about the 90% that don’t get it? 25% of patients are satisfied. 75% of patients are not satisfied. How do we make sure that we do everything we can to address all the patients that have the need? That’s the exercise we go through.

Bob Klingenberger, Executive Director, Morgan Stanley: As you’ve guided for IBSRELA for the rest of the year, as you think about 3Q, 4Q, is there anything aside from the different commercial initiatives, anything else that you guys are kind of laser-focused on for the rest of the year in terms of executions?

Mike Raab, Chief Executive Officer, Ardelyx: Eric, anything pop out to you? I mean, I think the answer is everything. You have to be juggling a thousand things in businesses like this, just given the complexity of the healthcare environment in which we all operate. You can see when you have let a ball drop that it ripples through the system. It is something Eric and his team are laser-focused on, is execution as well as possible because there are patients at the end of this that have, again, you the physician, me the patient, we do our job. Always looking at optimizing that pull-through is certainly one of the most important things.

Eric Foster, General Manager, Ardelyx: Yeah. I would say 17 days. We’ve got 17 days left in this quarter, and that’s all I want the team focused on right now. 17 days to help as many patients as we possibly can. I believe in our team, I believe in our company, I believe in our products, I believe in our strategy. The team, through strong commercial execution and improved prescription pull-through, put up some record numbers for us in Q2. I just want the team right now focused on these 17 days. When Q4 comes, we’ll deal with it then. I do think a lot of it is execution for us right now. We know if we do our job, it helps the company out, it helps more patients, and it’s a good win-win story.

Mike Raab, Chief Executive Officer, Ardelyx: My guess is that was a message to the field.

Eric Foster, General Manager, Ardelyx: Yeah.

Mike Raab, Chief Executive Officer, Ardelyx: Exactly.

Bob Klingenberger, Executive Director, Morgan Stanley: I’m sure they’re listening. As you talk about the Ardelyx story with investors and analysts and the like, what are the one or two things, aside maybe from a lot that we’ve been through already, that you feel like people are maybe just missing or you want to make sure to reemphasize for the folks?

Mike Raab, Chief Executive Officer, Ardelyx: Yeah. Very simply, right, and clearly, I’m terribly, terribly biased with what I’m about to say, is that we’re undervalued, right? We’ve just gone through some of the metrics that support, justify, demonstrate why $1 billion and $750 million are doable and we’re on the path for that. I would argue at just shy of $1.5 billion market cap, we’re well undervalued given the trajectory of where these businesses are and what this team has accomplished and what it can continue to accomplish, whether it’s with these two programs and/or additional ones that we can bring in. Again, that’s my bias as Chief Technology Officer of the company that we don’t get the recognition that I believe the company and all of our employees deserve.

That, to me, is probably one of the most important things that we try to emphasize when we’re speaking to whether it’s investors or analysts, anyone who wants to hear the story of the opportunities that lie here.

Bob Klingenberger, Executive Director, Morgan Stanley: Yeah. I know we’re kind of running up against time, but is there, aside from the things people are missing, as you look to the rest of the year, we talked about the motivation and things like that. Anything else you want to just emphasize for folks?

Mike Raab, Chief Executive Officer, Ardelyx: Yeah. I mean, Eric said it, if you look at quarter over quarter, record-breaking growth, the double-digit trajectory, you know, we’re navigating and doing something certainly with XPHOZAH that’s never been done before. Just to remind people, when we got the CRL in 2021, we did something. We did a formal dispute resolution and then an advisory committee. No one believed we’d win either of those. We won that, and that’s never been done in the history of the country, right? That is, most people feel that that’s a failing path to go down with the regulatory agencies. However, because of the data, the patient need that’s there, and the results that we’ve now demonstrated with the products on the market, obviously, we celebrate the fact that we were right.

I think continue to have faith in the fact that this organization, this company, our focus on the patient, drugs that are differentiated, are going to literally and figuratively pay dividends for the patients who need these drugs and for our shareholders or prospective shareholders with what we can accomplish from here going forward. Again, that’s my bias speaking, but I think it’s also some pretty black and white trajectories and performance that have happened since we’ve launched these drugs that should demonstrate to folks what the organization can accomplish.

Bob Klingenberger, Executive Director, Morgan Stanley: We’re just about out of time. Justin, Eric, Mike, appreciate you all joining us this morning. Good luck with the rest of the conference.

Mike Raab, Chief Executive Officer, Ardelyx: All right, Bob. Thank you very much.

Eric Foster, General Manager, Ardelyx: Thank you, Bob.

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