Ardelyx Reports First Quarter 2022 Financial Results and Recent Business Highlights

 Conference Call Scheduled for 4:30 PM Eastern Time Today

WALTHAM, Mass., May 5, 2022 /PRNewswire/ -- Ardelyx, Inc. (Nasdaq: ARDX), a biopharmaceutical company founded with a mission to discover, develop and commercialize innovative first-in-class medicines that meet significant unmet medical needs, today provided a business update and reported financial results for the first quarter ended March 31, 2022.

"Ardelyx is off to a great start in 2022 with the commercial launch of IBSRELA®, our first-in-class, novel therapy for the treatment of IBS-C in adults," said Mike Raab, president and chief executive officer of Ardelyx. "Initial channel stocking began in late March, the sales force is mobilized across the country, and early response to the product as a new treatment option has been positive. In parallel, we continue to persist in our pursuit of FDA approval for XPHOZAH®, our first-in-class, phosphate absorption inhibitor, and received notification from the FDA that an advisory committee meeting will be convened to get further input from experts, augmented with clinicians familiar with the clinical management of hyperphosphatemia."

Recent Business Highlights

• On April 4, 2022, the company announced the launch of IBSRELA (tenapanor), the first and only NHE3 inhibitor for the treatment of irritable bowel syndrome with constipation (IBS-C) in adults. IBSRELA is the first FDA-approved product for Ardelyx. Commercial efforts are focused on the 9,000 HCPs who account for 50% of the prescriptions of IBS-C indicated products, with broad-based distribution, a targeted specialty sales force, and omnichannel tactics. Marketing messages center on the multifactorial pathophysiology of IBS-C, and the role novel mechanism IBSRELA can play to address important medical unmet needs.
• The company presented multiple presentations at the National Kidney Foundation 2022 Spring Clinical Meetings, in Boston, MA on April 6-10, 2022, covering additional data further supporting the efficacy and safety of XPHOZAH, an investigational, first-in-class, phosphate absorption inhibitor for the control of serum phosphorus in adult patients with chronic kidney disease (CKD) on dialysis.
• On April 11, 2022, the company announced it reached an agreement with its Japanese collaboration partner, Kyowa Kirin Co. Ltd., to amend the license agreement, originally executed in 2017. Under the amendment, in consideration for a reduction in the royalty rate due Ardelyx upon net sales in Japan, Kyowa Kirin has agreed to pay Ardelyx consideration of up to an additional U.S. $40 million payable in two tranches. The first payment is due following Kyowa Kirin's filing with the Japanese Ministry Health, Labour and Welfare (MHLW) of its application for marketing approval for tenapanor and the second payment is due following MHLW's approval to market tenapanor for hyperphosphatemia in Japan. Kyowa Kirin is finalizing its Phase 3 clinical program for tenapanor for hyperphosphatemia and has disclosed its current expectation to file for approval with MHLW in the second half of 2022 and its current expectation that it will receive a decision from MHLW regarding its application in the second half of 2023. The royalty rate will be reduced from the high-teens to low-double digits for a two-year period of time following the first commercial sale in Japan, and then to mid-single digits for the remainder of the royalty term.
• On April 25, 2022, the company announced that the Office of New Drugs (OND), Center for Drug Evaluation and Research (CDER) of the U.S. Food and Drug Administration (FDA), has provided an interim response to Ardelyx's second level of appeal of the Complete Response Letter (CRL) received on July 28, 2021, for XPHOZAH. The OND noted that additional input from the Cardiovascular and Renal Drug Advisory Committee augmented with expert clinicians would be valuable in further considering the clinical meaningfulness of the phosphate lowering effect demonstrated in Ardelyx's Phase 3 clinical program for XPHOZAH.

First Quarter 2022 Financial Results

• Cash Position: As of March 31, 2022, we had total cash, cash equivalents and investments of $89.7 million, as compared to total cash, cash equivalents and investments of $116.7 million as of December 31, 2021.
• Product Sales: We recognized our first commercial product sales, net for IBSRELA during March 2022 in the amount of $0.5 million.
• Collaboration Revenue: We generated $18 thousand in collaboration revenue for the quarter ended March 31, 2022, as compared to $6.6 million for the quarter ended March 31, 2021. The decrease in our collaboration revenue was primarily the result of a $5.0 million development milestone which we earned in 2021, as well as recognition of the previously received upfront payment from the KKC 2019 research and collaboration agreement that was fully earned and recognized as revenue as of December 31, 2021.
• R&D Expenses: Research and development expenses were $8.9 million for the quarter ended March 31, 2022, a decrease of $11.6 million, or 56.7%, compared to $20.5 million for the quarter ended March 31, 2021. Research and development expenses included non-cash stock compensation expense of approximately $1.2 million and $1.1 million in the quarters ended March 31, 2022, and 2021, respectively. The decrease in our R&D expenses is primarily the result of lower clinical study costs from the OPTIMIZE study, lower tenapanor manufacturing expenses as we have begun to capitalize costs associated with the production of IBSRELA to inventory, and lower expenses for research following the elimination of our research function in the fourth quarter of 2021.
• SG&A Expenses: Selling, general and administrative expenses were $19.3 million for the quarter ended March 31, 2022, an increase of $2.2 million, or 12.9%, compared to $17.1 million for the quarter ended March 31, 2021. Selling, general and administrative expenses included non-cash stock compensation expense of approximately $2.5 million and $2.0 million in the quarters ended March 31, 2022, and 2021, respectively. The increase in selling, general and administrative expenses was primarily due to an increase in costs associated with preparations for the commercial launch of IBSRELA.
• Net Loss: Net loss for the quarter ended March 31, 2022, was $28.1 million, or $0.21 per share, compared to $33.2 million, or $0.34 per share, for the quarter ended March 31, 2021.

Conference Call Details

The company will host a conference call today, May 5, 2022, at 4:30 PM ET to review its financial results and provide a business overview. To participate in the conference call, please dial (866) 777-2509 (domestic) or (412) 317-5413 (international) and ask to be joined into the Ardelyx, Inc. call. A webcast of the call can also be accessed by visiting the Investor page of the company's website at www.ardelyx.com and will be available on the website for 30 days following the call.

IMPORTANT SAFETY INFORMATION

CONTRAINDICATIONS

• IBSRELA is contraindicated in patients less than 6 years of age due to the risk of serious dehydration.
• IBSRELA is contraindicated in patients with known or suspected mechanical gastrointestinal obstruction.

WARNINGS AND PRECAUTIONS

Risk of Serious Dehydration in Pediatric Patients

• IBSRELA is contraindicated in patients below 6 years of age. The safety and effectiveness of IBSRELA in patients less than 18 years of age have not been established. In young juvenile rats (less than 1 week old; approximate human age equivalent of less than 2 years of age), decreased body weight and deaths occurred, presumed to be due to dehydration, following oral administration of tenapanor. There are no data available in older juvenile rats (human age equivalent 2 years to less than 12 years).
• Avoid the use of IBSRELA in patients 6 years to less than 12 years of age. Although there are no data in older juvenile rats, given the deaths in younger rats and the lack of clinical safety and efficacy data in pediatric patients, avoid the use of IBSRELA in patients 6 years to less than 12 years of age.

Diarrhea

Diarrhea was the most common adverse reaction in two randomized, double-blind, placebo-controlled trials of IBS-C. Severe diarrhea was reported in 2.5% of IBSRELA-treated patients.  If severe diarrhea occurs, suspend dosing and rehydrate patient.

MOST COMMON ADVERSE REACTIONS

The most common adverse reactions in IBSRELA-treated patients (incidence ≥2% and greater than placebo) were: diarrhea (16% vs 4% placebo), abdominal distension (3% vs