ARDELYX, INC. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• IBSRELA Progress: Continues to have a strong growth trajectory. The commercial team is driving prescriber adoption and enhancing patient access. It is on track to meet the 2025 guidance of $240 million to $250 million in net sales and has the potential for over $1 billion in peak annual net sales.
• XPHOZAH Performance: Grew 30% year-over-year (excluding returns reserve release). Despite market disruption from the loss of Medicare Part D coverage, XPHOZAH continued to see patient access and clinical value. The team is monitoring market dynamics closely.
• Financials: Total revenues in Q1 2025 were $74.1 million, a 61% increase from the prior year. R&D expenses increased, while SG&A expenses rose due to commercial activities. Cash position remained strong at $214 million as of March 31, 2025.

Segment Performance

• IBSRELA: In the first quarter of 2025, IBSRELA grew 57% year-over-year, achieving net sales revenue of $44.4 million. It contributed significantly to the overall revenue growth. Despite the typical Q1 contraction in the IBSC market, IBSRELA demonstrated strong prescription demand and ended the quarter with robust momentum.
• XPHOZAH: XPHOZAH saw a 30% year-over-year growth (excluding the one-time returns reserve release), with net sales revenue of $23.4 million. The hyperphosphatemia market was impacted by the loss of Medicare Part D coverage for phosphate-lowering therapies, but XPHOZAH continued to witness patient access and clinical value.

Guidance

• IBSRELA: Reaffirms the 2025 guidance of $240 million to $250 million in net sales revenue.
• XPHOZAH: No formal revenue guidance at present, but is monitoring uptake and market dynamics; expects to provide further updates as the landscape evolves. Targets a peak annual net sales of $750 million for XPHOZAH.

Risks

• Market Disruption: Loss of Medicare Part D coverage for phosphate-lowering therapies is disrupting the dialysis market, causing frustration for nephrologists and patients.
• Returns Reserve: Impact on sales and future gross net deductions, but adjustments were made to the returns reserve due to zero returns and low downstream bottles, improving gross to net prospectively.

Question and Answer

Q: For the IBSC market, do you expect improvement as the year progresses versus the Q1 contraction, and explain the return reserve impact on sales?

A: The IBSC market is expected to improve as the year progresses. The returns reserve was adjusted because there were zero returns and very few bottles in the downstream distribution, which improved the gross to net prospectively.

Q: How do you assess the impact of the newly expanded IBSRELA sales-force and confidence in meeting peak revenue?

A: Monitoring metrics like activity, writers (total and new), and prescriptions. Strong hiring, Q1 demand generation (second highest to date), and unmet need give confidence in meeting peak revenue.

Q: Update on XPHOZAH's patient assistance program and non-Medicare trends?

A: The patient assistance program is operating well, particularly for Medicare patients. Non-Medicare segments showed good momentum post-Medicare transitional fills.

Q: Details on XPHOZAH's long-term guidance and non-Medicare strategy?

A: Long-term guidance of $750 million is based on non-Medicare segments. Strategy focuses on nephrologist engagement and the ArdelyxAssist program for access across non-Medicare channels