Good morning. Welcome to the Jefferies Global Healthcare Conference. My name is Dennis Ding, Biotech Research Analyst here. I have the wonderful pleasure of having CFO Sue Hohenleitner here, as well as Chief Commercial Officer Eric Foster here with us from Ardelyx. Welcome.
Thank you.
Thank you.
Before we get into the Q&A, maybe, Sue, if you can give a little bit of background in terms of Ardelyx and what you're trying to achieve, and just give us the state of Ardelyx right now.
Absolutely. Yes. Thank you very much. For those of you that don't know Ardelyx, we are a company focused on developing and commercializing innovative products for unmet patient needs. We have two currently commercialized products. We've got IBSRELA for IBS-C, and we have XPHOZAH for patients on dialysis with hyperphosphatemia. If you think about those two products combined, it's going to be over $500 million in top-line revenue this year. A lot of revenue to be had, and I know we'll have a lot of questions on that, Dennis. Speaking of 2026, I wanted to just provide very quickly what our four key strategic priorities are. The first one is to increase IBSRELA demand. As I talked about, the $500 million , IBSRELA represents over $400 million of that. We guided to $410 million-$430 million.
We really need to see that growth and the continued increased demand there. It's also continuing the momentum that we have with XPHOZAH. The third priority is about continuing to advance our current pipeline, which we'll talk about, we've got one product in preclinical. We also have one in phase III, and we've got some pediatric trials that we'll talk about. Finally, it's to continue the strong financial performance. What I mean by that is its top-line growth, it's keeping our capital allocation plan going, and we can talk about that in a little bit as well. It's also about maintaining a healthy cash position. With that, I'll turn it back to Dennis to start the questions.
Yeah. Would love to start on IBSRELA. That's one of the single biggest growth driver of the company, doing $410 million-$430 million of revenue this year. Before we get into some of the financials and just the growth drivers there, I guess, what is the use case for IBSRELA? Where does it fit in IBS-C?
Yeah, thanks for the question, Dennis, and thanks for the opportunity to be here. Where does it fit in IBS-C? The IBS-C market is a very large market, so in 2025, around 7,000 prescriptions in the market. We focus on 14,000 HCP prescribers that represent about 50% of that total TRx market. IBSRELA is a unique product. It's an NHE3 inhibitor in terms of its mechanism of action. We know that LINZESS and Trulance have been out for a while, and as GC-C agonists, their positioning is really first line. They've done a good job of that over the past 10 + years in establishing themselves in the market. We also know that patients need more. Around 77% of patients, according to our research, continues to demonstrate symptoms and/or not satisfied on a GC-C agonist.
Those patients need something different, and that's where IBSRELA comes in. IBSRELA offers a unique mechanism of action, proven clinical efficacy, and safety profile. For those patients that are looking for something different, that's where IBSRELA can come in and really help them in terms of being able to treat their IBS-C.
You guys have made tremendous progress there in the sense that I believe last year you guys did $275. This year is going to be north of $400. What exactly is driving that growth? What is really resonating with physicians?
Yeah. As you said, in 2025, we did 73% year-over-year growth. In first quarter of this year, 58% year-over-year growth relative to Q1 of 2025. We are continuing to see our momentum be very strong as it relates to IBSRELA. When we think about the opportunity that we have in front of us, really continuing to see the benefit of our sales force. We expanded and doubled the size of our sales force in late 2024 and really saw the fruits of that change in size in 2025 as we saw quarter-over-quarter sequential growth as it relates to demand. We're going to continue to see that in 2026. We've communicated guidance north of 50% year-over-year growth for this year. Good return from our sales professionals.
We are optimizing our alignment and adding some additional representatives, around 20 or so, that will start in the back half of this year in July, as well as some additional field reimbursement managers, which really help the physicians navigate the payer environment and pull those patients through. The third thing I would say is making sure that the scripts that are written get filled. We have the IBSRELA Pharmacy Network, which is a limited group of specialty pharmacies that distribute IBSRELA to patients. We know when those prescriptions go to the IBSRELA Pharmacy Network, there's a higher fulfillment rate as well as, on average, one more refill on an annual basis. Lastly, we know that these patients are very engaged. Like I said, it's a very large market.
This year we've got a concentrated effort to really engage patients, meet them where they are, drive them into the office, because we know when they are aware of IBSRELA, they go to the office, they ask for the product, and the physician will write for the product. It's really those four levers that we're focused on in 2026, and we also know that that's going to continue to support our growth as we go out to the $1 billion in 2029.
In terms of penetration into the post-LINZESS sort of market for IBS-C, can you talk a little bit about how many doctors are prescribing IBSRELA right now? How much more, I guess, runway is there to penetrate? Maybe give a couple of examples in terms of for those high-prescribing doctors, where are they in penetration? Because that could be a leading indicator for some of those later adopters.
Yeah. We haven't really gotten into the details in terms of numbers. I will say, we focus on around 14,000 HCPs. That's broken down into high-writing GIs, high-writing PCPs, and then advanced practice providers, so nurse practitioners and PAs. They're a really important segment for us. They essentially prescribe just like the high-writing GIs do. We know that when a physician writes on average, we're seeing their share around 6% or 7% higher than that of physicians that have just got one or two. Being able to continue to drive depth with our prescribing target physicians is really important to our long-term growth. We still feel like we still have plenty of room in terms of adding new writers. It's really breadth and depth of prescribing that we're focused on.
I think we've only been out now since 2022, so still relatively early in the life cycle of the product and still feel like there's plenty of opportunity, again, in a very large market that's out there.
In terms of driving additional depth into the existing prescriber base, what's been some of the feedback from doctors who are only prescribing it to 1%, 3%, 5% of their patients? What's been some of the pushback? Is there any kind of feedback on efficacy, or is it just mainly waiting for these patients to come in for their visits every six months or every year? I'm just curious, what's going to drive that depth of prescription?
Yeah. I think it's really just like you said, it's around patient identification and the physician engaging the patient and asking them if they're satisfied on their current therapy, or they continue to experience pain with their constipation. From a patient standpoint, that's why we think it's so important to engage them more in 2026 to make sure that they're speaking up on their behalf. We talked earlier this year about our engagement with the LPGA and think that that's really a vital avenue for us to engage patients, to really empower them to go in and speak to their physician honestly about their condition. There's a lot of stigma associated with GI disorders.
For us, it's really about empowering patients to speak up so the physician can recognize them that while they might be on LINZESS or Trulance, they're still not completely satisfied, and they're looking for something different. That's where IBSRELA fits in.
Can you talk a little bit about awareness of IBSRELA at the physician, but also patient level? I'm just curious, in terms of empowering the patients. Are they aware, and what sort of efforts do you think you guys can take to drive that awareness?
Yeah. We do obviously see awareness with IBSRELA, there's still room for improvement there. The team, when it comes to our marketing efforts, very engaged from a digital, social standpoint. I think you'll continue to see us invest in there in the latter part of this year to really try to go broader, because again, it's about driving awareness, patients into the office and requesting for IBSRELA. While we do see a good level of patient awareness, because the population is so big, the patient base is so big, we still have room to go there, and you'll see us investing in that this year.
Yeah, I would just add to that is why we've had a little bit more investment this year when you think year-over-year, our OpEx has gone up slightly by about 25%. A lot of that is these high ROI programs that we're doing and that Eric's been talking about, which I think is great.
Okay. I believe OpEx this year is $525 max or $520?
Up to $520.
$520.
Yeah, which would be about a 25% increase.
Yeah.
Year-over-year.
Okay. I guess what sort of investments are you guys planning to do?
Yeah.
DTC is a big question. Curious where you stand on that, but I'm sure digital channels and things like that. Just elaborate on that a little bit further.
Yep. One of the things I'll say first, too, is, and we can talk about this later, but the R&D, the investment in the R&D programs that we've announced. That's obviously a piece of the SG&A that we've talked about that's up to $520. The rest of it is things like Eric talked about, the patient activation. There's not a broad DTC. I don't think you'll see us on mainstream TV like you see LINZESS. It's great that they're on there because, again, it grows the market, and then we do get that as well. Certainly, some digital DTC and some more direct-to-patient-
Yeah.
I'd say.
Yeah, social is a very powerful medium for patients. We know that they're highly engaged. When you think about the demographic of our patient, 30 - 55 years old, highly engaged in social media. We see good positive return there. From a TV side of things, as Sue mentioned, you're not going to see us doing any Super Bowl ads. You can do much more targeted, cost-effective media when you think about streaming TV and the options that are out there. Could have potential some investments down the road this year, in the later part of the year, that could really reach patients in their TV, but not be doing so on the main broadcast type media.
Okay. Eric, you mentioned the specialty pharmacy dynamic.
Yes.
Which I think is incredibly interesting. When you look at IBSRELA, historically, the specialty pharmacy channel has been around 15% of scripts. I think right now it's 30%-33%.
Yeah.
Something like that. You're essentially doubling the amount of scripts that's flowing through that channel. Elaborate a little bit more on just the rationale behind doing that. You also mentioned one additional script. What is the base of that script? Is it three, four, five?
Yeah, just would love to hear more about that.
As we were looking at our business, prescriptions, they were really going to one of two places. They were going to the retail side, or they were going to specialty pharmacy. Retail, on average, fills about 90% of their prescriptions that they fill are generic. They're also administering vaccines and seeing patients, checking people out at the grocery store or at the pharmacy. There's a lot going on. When you think about IBSRELA and where we're positioned, second line and minimal really discounts on the payer side of things, prior authorizations can be required, and so there are a couple of steps that need to take place in order for the product to be filled.
Really, the retail pharmacy is really not the place to do that. We wanted to make sure that we set up the best environment for physicians and patients to be able to get the script filled. We have the IBSRELA Pharmacy Network. It's a limited group of specialty pharmacies. Specialty pharmacies are important because they're very patient-centric, high touch, and I think you see that in the additional refill. Your question leads to around five or six refills on average, and if they go through the specialty pharmacy, they get the additional refill. The advantage of patients going through the IBSRELA Pharmacy Network, one, you get a higher fulfillment rate, so you don't see the abandonment like you do on the retail side of things, and then you get the additional refill on average on an annual basis.
Okay. How high can that go? Right now it's 30%.
Yeah.
Can it go to 40%, 50%? Just as you think about medium to long-term trajectory for IBSRELA, right?
Yeah.
It seems like a very attractive investment.
It is, and you're exactly right. It is an investment, and we are making a concerted effort to try to make sure that those prescriptions go into the network. I mentioned our field reimbursement team. They're out there messaging to physicians and making sure they've got the right path set up so the scripts can get filled. We're purposely trying to make sure that those scripts go through the IBSRELA Pharmacy Network, and ultimately, at the end of the day, the worst thing that can happen is a physician write a prescription for a product and the patient not get it. This is us putting a strong emphasis on that, and that's why it's one of those four key levers that we talk about that will help us in terms of our long-term growth trajectory.
Have you commented on that abandonment rate historically, where it's been outside of the specialty pharmacy channel and where it is now?
We have not. I will say, we obviously have the information that we're able to look at, and the fulfillment rates look significantly better than they have in the past.
Okay. In terms of the outlook, you guys did provide medium-term guidance, I think $1 billion in 2029. You guys are around $410 or $430. Hopefully, you guys beat and raise this year. That's why we're buy rated.
Buy rated.
The path from 2026 to $400+ million to $1 billion is still fairly steep. I guess, what drives that confidence for you guys to put that number out there?
Yeah, I would say, as Eric mentioned before, we grew 73% IBSRELA in 2025, growing at our guide between 50% and 55%. When you think about getting to $1 billion in 2029, that's about a 38% CAGR. That CAGR feels very doable given where we are, even knowing that there's now a higher base of overall prescriptions in that. Certainly, all of the marketing programs and the selling programs that we're doing are all not only helping us get to the $410 to $430, but also to the $1 billion by 2029, in 2029.
Yeah.
Yeah.
Okay.
Yeah, I would just add, we have a sizable market that's continuing to grow at double digits. We have a winning and sustainable position in that marketplace, and highly effective on execution. With the addition of the area business managers, we're optimizing that alignment to make sure we've got the right reach and frequency to those target HCPs. We feel really good about the team, their ability to execute the right strategy. As you look at it from a competitive standpoint, it's pretty wide open over the next five, six, seven years.
Can you remind me how many reps you have selling IBSRELA right now? Your $1 billion guidance, does that account or assume that you guys would meaningfully expand that further?
Yeah. Right now we have 124. As I mentioned, we'll be going up to 144. This week, I was just in Boston yesterday, actually, with the new 20 ABMs or representatives. They are very motivated and engaged and eager to get out there in the field, they'll be ready to go on July the 1st, as well as the new field reimbursement managers. We'll go to 144 on the sales side, and that's really what we feel is the optimal alignment against the 14,000 HCPs. As you think about the guide in 2029 to $1 billion, it's really primarily IBS-C related and our ability to execute and deliver and drive depth and breadth of prescribing against that 14,000.
As we think about 2029 and beyond, if we have a successful CIC trial that comes in, that really drives greater value in terms of the IBSRELA overall and really opens up that CIC market that can create another inflection post-2029.
Yeah. Okay. On CIC, it's a big phase III readout. Talk a little bit about how big that market is and can be for IBSRELA, appreciating that the competitive landscape might look a little bit different there. I'm assuming given that the data's in 2027, it might not be a huge contributor to your $1 billion guidance in 2029. How are you handicapping that phase III readout? How do you have confidence that'll be positive in CIC?
Yeah. I'll start talking first about the trial and then pass it to Eric for the market size. We have announced that first patients have been dosed. We're continuing to enroll. All of our pre-specified sites that we wanted to be up and running are up and running, so really great accomplishment there. We expect to have full enrollment by the end of this year. The trial will take about 26 weeks in total, and then we'll obviously file after that for approval. It's a 700-person placebo-controlled double-blind study, three arms plus a placebo, and certainly looking for the outcomes mid-next year or so. That's on the actual study itself, and I'll pass it to you on the market opportunity.
Yeah, from a market sizing standpoint, CIC is about two to three times that of IBS-C, much bigger market. We know the vast majority of that is over the counter. There is a strong prescription market as well in CIC. Matter of fact, when you look at the 7 million prescriptions right now, it's IBS-C and CIC because it includes LINZESS and Trulance, which has both of the indications. I think there's a couple of ways that you can look at it.
It's still a very sizable market, and we feel like with the addition of CIC and the conversations we've had with physicians and research, that not only will we gain on the CIC side, but it's going to be able to drive greater confidence for the molecule as a whole, and really raise what we think we can do on the IBS-C side as well.
What sort of patients are you enrolling in the CIC trial? Are they generally treatment naive? Could you get patients who have failed LINZESS? I'm just curious what that population looks like.
You could. You certainly could. I don't think we have any exclusion criteria with regards to patients that have tried that. I think, for us, patient that has constipation with or without pain, this is kind of the future. Constipation with or without pain or abdominal discomfort would really be that target market that we'd be focused on. Very simple message for our field team to be out there with physicians driving the overall value of IBSRELA and helping more patients at the end.
Do you have any insight in terms of how much of LINZESS's revenue comes from CIC versus IBS-C? Maybe you can look at claims data, which we don't have access to, but I'm just curious. As you think about IBSRELA, and I understand that you're saying that CIC is 2x -3x bigger, but in terms of the actual flow through to IBSRELA revenue relative to IBS-C specifically, I'm just trying to gauge the magnitude, like how big that can be relative to IBS-C.
It is somewhat tough to see. They don't disclose it specifically what their split at is, but there's different dosage forms. You can kind of triangulate, but again, it seems like that's prescribed across their dosage, so it's a little bit tough there.
Yeah.
Yeah.
Yeah.
Not really.
Okay. Lastly, just remind me on IP and when you expect IBSRELA to go off patent.
Yep. We did just get Orange Book listed, the 299 patent. That's a formulation patent for tenapanor, so that goes out to November of 2042. That's a brand-new patent, that's not an extension. That complements and supplements the composition of matter and method of use, which are 33 and 34.
For XPHOZAH, talk a little bit about that. It seems to be recovering a little bit. Curious what you're hearing in terms of feedback from doctors given that this entire space has been sort of disrupted with the loss of Part D.
Well, I'll start with some of that and then pass it to you. This year we've guided XPHOZAH full year to be $110 million-$120 million, which would be around a 6%-16% growth versus prior year. When you even look at Q1, our total growth at that is really the paid writers grew about 19%. Total prescriptions grew about 32%. We are seeing that continued growth, albeit a little bit lighter and smaller than what we see with IBSRELA, but certainly continues to grow even in this environment. I would say that's one of the reasons we did want to lean in and provide guidance this year to really give that stability and certainty around what we think is going to happen.
So far, we've been pleased with what we've seen in terms of the financial performance, and I'll pass it to you for physicians.
Yeah, I really lean on kind of the first quarter number, around 19% growth over prior year. That's really the paid prescriptions. When you think about total dispenses, which includes our patient assistance program as well as paid, that was around 32% year-over-year growth. I understand in terms of guidance, $110 million to $120 million , while we're in this TDAPA period, as you mentioned, the market is a bit disrupted, we know that that ends at the end of 2026. For us, we'll be in a good position in 2027 and feel like we've got a product that can really address the unmet needs of those patients that are on dialysis and continue to have hyperphosphatemia.
Okay. How are you thinking about the landscape given that [Unasyn] might get approved fairly soon? Could that add another layer of disruption in terms of a new TDAPA period?
Yeah. Our assumption is that the product would likely be approved at the end of this month and could go into their own TDAPA period. Just to remind everybody, our indication is to use XPHOZAH in addition to that of a binder. Again, 70% of the patients we know continue to have elevated phosphorus levels or don't have kind of two consecutive measures where they're able to have their phosphorus under control, despite being on treatment with a binder. We know that patients are going to continue to need more and need XPHOZAH, and so we're there obviously to address this unmet need and feel like we've got a good place in the market as well.
You guys gave long-term guidance for XPHOZAH. That's $750 million.
I guess, it seems like, given that it might be $110 million or $120 million this year, it seems like a fairly steep ramp. Maybe talk about the confidence that you had when you gave that guidance, I believe it was last year? Your confidence around that today, and I'm just curious how that has evolved.
Yeah, I think what we continue to monitor is the paid prescription growth and seeing 19% even in Q1. We had I'm trying to remember the number from 2025. It so quickly went away.
Which one?
Paid prescriptions.
Oh, 32.
Yeah, 32. No, total for all of 2025.
Oh.
Anyway, what we do see is continued growth in that paid prescriptions. That really gives me, from a financial standpoint. Confidence to continue to reiterate the $750 before the loss of exclusivity.
Yeah, I would say, we continue to do research with physicians thinking about peak share.
Continue to see the same response coming back before the TDAPA period as well as after the TDAPA period. Really, again, sizable market, 550,000 patients a year, unfortunately continue to be on dialysis. Like I said, 70% of those continue to need something else and not able to control their phosphorus. The market is there. XPHOZAH is a great product, proven safety and efficacy, and know that it can really meet that unmet need. For us, it's just continuing to go out and make sure that we're driving awareness, driving clinical conviction with HCPs, and patients can have access to it. We've seen that with our patient assistance program that we provide, as well as their ability to get through commercial and Medicaid.
I think that's a really important point that, regardless of coverage, we want to be sure that XPHOZAH's there for every patient, whether you're on Medicare or any other paying channel. I think, definitely makes us feel very good about what we're doing and what we're being in the market with XPHOZAH for everyone.
Is there a scenario where reimbursement can kind of be restored in the Part D setting?
We're really waiting for that. Obviously, the decision to come back down. At this point, we're assuming business as usual from a reimbursement. Even when you think about the 750, that does not assume that we need Part D coverage or Medicare coverage.
Yeah.
Yeah, our paid prescription growth in 2025 was 41%. Sorry, it was somewhere stuck in my brain. It's there, and that, again, continues to give us confidence that this is a growing market. Regardless of which payer it is, it's a growing market, and the paid prescription volume continues to grow.
Sure.
Yep.
The pipeline, maybe talk a little bit about that. It's not in the clinic yet. Maybe talk a little bit about what is so interesting about this product, what gives it so much promise? I know you guys haven't disclosed a specific indication yet, but curious how you're thinking through that process?
Yeah. You're referring to 10531, which is our preclinical compound that we're looking at now, versus tenapanor. It's highly soluble and potent, and we're looking at it across a variety of different areas. We haven't yet decided or figured out where the science will lead us, but that's really how it's going to happen. The science will lead us to whether it becomes a next gen tenapanor or something different or something in an adjacency, I'd say. That's kind of where we are with that.
Okay. Lastly, just financials.
Yeah.
We heard revenue guidance, we heard some of the OpEx guidance, what about something like profitability? How much of a priority is that for Ardelyx and should we expect it potentially in 2027?
Yeah.
As your products grow, maybe $700 million or something like that, right? I guess, what are some of the gating factors for you that would prevent you from issuing some sort of profitability guidance?
Yeah. I hate to say preventing us from doing it. What I do want to see is some more certainty around our top line and the range that we guided to. As we feel better, when you think about the math there between XPHOZAH and IBSRELA, if they hit the high end of that, if you do the math, that would actually assume that you would get profitable this year. What we don't want to do is guide to profitability maybe in a certain quarter and then have to go back.
We want it to be, look, when we say we're profitable, we're profitable from here out. For me, being here and observing how we're doing this, I think it is right around the corner. It's just not something just yet that I'm ready to say, look, we're here, but I think it is very much right around the corner. Which is another reason why, even in the first quarter, we did put out a capital allocation strategy so everybody knows, as we become income positive and cash flow positive, what is it that we're going to be doing with our capital. Really quickly, and it's what you heard already today. IBSRELA , it's about investing in our pipeline, the current pipeline that we have already on our website, as well as any opportunistic deals that we could be looking at.
Finally, just ensuring the rest of the financial strength. Whether it's the refinance of the SLR loan that we did in April or other things to continue to fortify our cash flow. Overall, I'd say, Dennis, we're getting there. Stay with us.
Yeah. You don't want to guide to profitability and then only for Q1 to be sea-
Correct.
Very seasonally quarter.
Yeah, Q1 is always going to be that bumpy season.
It's more about sustainable profitability.
Absolutely.
You guys are making a lot of investments this year because you do see the long-term potential of each one, right?
Yep.
Yep.
Absolutely.
Anything that you think that I might have missed or any last-minute comments?
I'm okay. No. I think you hit it all.
Okay.
I think we're excited about the year, we're excited about 2026, our four priorities in strategy, and you'll see more of that in 2027 and beyond.
Sounds good. Perfect.
Thank you.
Well, thank you so much, guys.
Thank you.