Ardelyx, Inc. Q2 FY2025 earnings call

• Product Performance: IBSRELA showed broad-based demand growth with record highs in key indicators, and XPHOZAH performed well in a changed market landscape.
• Commercial Execution: IBSRELA's team expanded reach, deepened prescriber engagement, and saw improvements in prescription pull-through. XPHOZAH's team focused on patient access, prescription pull-through, and navigating the new market landscape.
• Leadership and Organization: Added transformative talent, promoted Mike Kelliher to Chief Business Officer and appointed Laura Williams as Chief Patient Officer; welcomed new executives. Strengthened balance sheet by drawing additional $50 million of debt.
• Financials: Total revenue was $97.7 million, up 33% y-o-y; net loss improved quarter-over-quarter; SG&A expenses increased due to investment in commercial activities, with run rate expected to reach ~$90M quarterly for remainder of 2025.

In the second quarter, Ardelyx generated $97.7 million in total revenue, a 33% year-over-year growth. IBSRELA had net sales revenue of $65 million, up 84% year-over-year and 46% quarter-over-quarter, contributing significantly to the revenue growth. XPHOZAH recorded net sales revenue of $25 million, up 7% compared to the first quarter of 2025, and up 27% when adjusted for the onetime reserve release. IBSRELA's revenue contribution is substantial due to its strong growth, while XPHOZAH's performance, though lower in absolute terms, shows improvement despite market changes.

• Raised full-year 2025 net sales revenue guidance for IBSRELA to $250 million to $260 million.
• Confident in achieving peak sales of over $1 billion for IBSRELA and $750 million for XPHOZAH.
• Expect SG&A run rate to increase to approximately $90 million on a quarterly basis for the remainder of 2025 with incremental increases each quarter.

• Market dynamics and reimbursement changes that could impact product sales and revenue.
• Uncertainties related to legal proceedings, such as the CMS legal proceedings where arguments are scheduled for September 25, with no certainty on response timelines.

Q: Any update on a potential EU partner? And how are you thinking about getting to cash flow positive?

A: On EU, continuing to evaluate opportunities; on cash flow positive, it's not far off on the horizon based on guidance.

Q: Talk about the new guidance for IBSRELA and what's factored into it. Also, what was the gross to net for XPHOZAH in Q2?

A: Guidance for IBSRELA is a meaningful step based on strong momentum; XPHOZAH's Q2 gross to net was approximately 29%, with it expected to be in the 30% range generally for the rest of the year.

Q: How much of IBSRELA's sales growth is attributed to the expanded sales team, and will script pull-through accelerate into 2026?

A: Increased call activity from the expanded sales team has led to growth, and they expect script pull-through to continue.

Q: Any contribution from transitional scripts in 2Q for XPHOZAH? And how is uptake in the first-line setting for IBSRELA trending?

A: Inconsequential amount of transitional scripts for XPHOZAH; for IBSRELA, aware of first-line therapy trends and focused on patient access.

Q: What triggered the pull down of $50 million debt, and when might the remaining $100 million be pulled down?

A: SLR Solar partnership provided favorable interest rate, and flexibility and optionality are important; will pull down remaining debt when prudent.

Q: Are both sales teams rightsized to meet peak guidance?

A: Always assessing to optimize footprint, but confident in current sizing with teams hitting their stride.

Q: Any color on CMS legal proceedings?

A: Arguments scheduled for September 25, and will provide updates when substantive information is known.

Q: What gives confidence in the new peak estimate for XPHOZAH in the new reimbursement environment?

A: Confidence comes from total available market and performance trends, with great faith in the XPHOZAH team.

Q: Average duration on treatment for IBSRELA patients?

A: Average duration for IBS-C scripts is about 5, with good refill rates.

Q: IBSRELA trends for the rest of the year and market overall?

A: Will provide more perspective as performance shows, with historical second half trends considered.

Q: Comfort on Street estimates for XPHOZAH full year and sequential growth?

A: Confident in trajectory with month-over-month growth since March, but will provide guidance when more consistent.

Q: Granular detail on XPHOZAH prescription mix between Medicare PAP and non-Medicare patients?

A: Roughly 50-50 for Medicaid and commercial, but not providing granular script numbers.