ARDELYX, INC. Q4 FY2024 earnings call

Management Statement and Operational Highlights:

• IBSRELA’s growth continued in 2024, with acceleration in the fourth quarter due to an expanded sales team, showing growth in new and repeat writers, and new and refill prescriptions.
• XPHOZAH had a successful product launch in late 2023, demonstrating its importance for dialysis patients in achieving target phosphorus levels.
• Committed to prioritizing patient access, especially for XPHOZAH despite reimbursement challenges, aiming to grow XPHOZAH business to at least $750 million before patent expiry.
• Finished 2024 with a strong cash position, having reinforced cash reserves.
• Corporate development team focused on building a robust pipeline and evaluating internal and external opportunities.

Segment Performance:

• IBSRELA: In the fourth quarter of 2024, IBSRELA net product sales revenue was $53.8 million, nearly double the same period in 2023, and a 32% quarter-over-quarter increase from Q3. For the full year 2024, IBSRELA net product sales revenue was $158.3 million. Revenue contribution: Drove significant growth in total revenues.
• XPHOZAH: In the fourth quarter of 2024, XPHOZAH net product sales revenue was $57.2 million, an 11% increase over Q3. For the full year 2024, XPHOZAH US net sales were $160.9 million. Revenue contribution: Contributed strongly to total revenues with its successful launch.

Guidance:

• For IBSRELA, expect $240 million to $250 million in net product sales revenue in 2025, driven by expanded sales force and patient pull-through efforts. Gross to net deduction expected to be 30% plus or minus 5%, less favorable in Q1 and more favorable by Q4.
• For XPHOZAH, aim to achieve $750 million in annual net sales revenue prior to patent expiry, but no 2025 revenue guidance provided yet. XPHOZAH’s gross to net deduction in 2025 expected to be less favorable than 2024 due to payer mix change.
• SG&A expenses to increase by approximately $10 million per quarter in 2025 compared to Q4 2024 run rate. Royalty obligation payable to AstraZeneca expected to be fully satisfied in 2025, generating gross margin favorability in the second half of the year.

Risks:

• Reimbursement challenges, particularly for XPHOZAH with changes in Medicare Part D coverage, which could impact access and financial performance.
• Change in payer mix for XPHOZAH leading to less favorable gross to net deductions in 2025.
• Potential impact of market dynamics on the adoption and sales of both IBSRELA and XPHOZAH.

Q: Yigal Nochomovitz asked about IBSRELA guidance, XPHOZAH timeline, and BD front.

A: Mike Raab responded that IBSRELA guidance is $240M-$250M as they want to navigate first quarter trends, XPHOZAH timeline includes Hatch-Waxman extension, and BD front is to be determined.

Q: Dennis Ding asked about XPHOZAH scripts and IBSRELA trials.

A: Mike Raab and Eric Foster discussed XPHOZAH scripts being early to predict bottom, and IBSRELA trials in Parkinson's and CF-associated constipation are investigator-sponsored.

Q: Laura Chico asked about XPHOZAH patient access and SLR term loan proceeds.

A: Eric Foster and Justin Renz discussed XPHOZAH patient access through ArdelyxAssist and SLR term loan proceeds for strategic expansion.

Q: Joseph Thome asked about XPHOZAH physician familiarity and BD assets.

A: Justin Renz and Eric Foster discussed physician awareness of reimbursement dynamics and BD assets being within therapeutic areas.

Q: Roanna Ruiz asked about XPHOZAH peak sales and Medicare patients.

A: Mike Raab and Eric Foster discussed XPHOZAH peak sales through patient journey and Medicare patient access via physician prescription.

Q: Julian Harrison asked about XPHOZAH reimbursement split and private payer access.

A: Mike Raab and Eric Foster discussed 60-40 Medicare-non-Medicare split and private payer access maintained.

Q: Ryan Deschner asked about XPHOZAH promotion sensitivity and gross to net.

A: Eric Foster and Justin Renz discussed XPHOZAH promotion sensitivity unchanged and gross to net too early to predict.

Q: Thomas Yip asked about XPHOZAH bottom line impact and IBSRELA strategy.

A: Mike Raab and Eric Foster discussed XPHOZAH pharmacy impact and IBSRELA strategies including omnichannel efforts.

Q: Chris Raymond asked about XPHOZAH commercial pay market.

A: Mike Raab and Eric Foster discussed no discounts to payers and continued access maintenance in non-Medicare segments.