Ardelyx Advances Drug For Chronic Kidney Disease, Where SOC Treatment Lacks

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About: Ardelyx, Inc. (ARDX)
by: Terry Chrisomalis
Summary

Ardelyx announced positive results from its first phase 3 study for CKD patients on dialysis and hyperphosphatemia using its drug tenapanor.

Results from the second phase 3 study known as PHREEDOM, dealing with end-stage kidney disease and hyperphosphatemia, are expected to be released by Q4 of 2019.

A near-term catalyst within the next few days is the PDUFA date of September 12, 2019 set for tenapanor as a treatment for patients with IBS-C.

Ardelyx had $123.9 million in cash as of June 30, 2019 with enough cash extending out past 12 months as of the SEC filing date of August 9, 2019.

Ardelyx (ARDX) announced that it had achieved positive results from its phase 3 study using its drug tenapanor to treat patients with chronic kidney disease (CKD). This is good news for these patients who don't have an adequate drug that can lower their serum phosphorus levels. While these results were released for this phase 3 study, there is a second late-stage study that is set to report results in Q4 of 2019. This provides another catalyst for investors to look forward to. It will also shape the company's program to where it could eventually file for regulatory approval for this specific indication.

Late-Stage Study Not Just Enough For Regulatory Approval, Ability To Save Lives

Ardelyx has been able to achieve the primary endpoint and all key secondary endpoints from its phase 3 AMPLIFY study. This study dealt with patients with chronic kidney disease (CKD). With CKD a patient's kidney becomes damaged and inflamed. In turn, the kidney can't filter blood properly. However, the drug in question known as tenapanor, is specifically going after hyperphosphatemia in patients with CKD and on dialysis. Hyperphosphatemia occurs when there is a high level of phosphate in the blood. In some patients, the amount of calcium deposits produced from high phosphorus levels don't cause issues. However, for those who get phosphorous levels higher than 5.5 mg/dL, it can be fatal. Besides being fatal, other issues can occur like bones fracturing and then the possibility for cardiovascular events occuring. There is an addressable market for tenapanor which makes the latest findings very good news. The problem is that even with about half of CKD patients who take phosphate binders, they are unable to achieve normal levels (below 5.5 mg/dL) in order to be in good shape. Before diving further, it's important to underscore binders. Phosphate binders are given alongside meals so that the absorption of phosphate from food is decreased. In this instance and study, tenapanor had to be given alongside binders to achieve all endpoints. The phase 3 AMPLIFY study recruited a total of 236 patients with CKD on dialysis with hyperphosphatemia. As I alluded to above, in order for the patient to be brought into the study they had to have a level of 5.5 mg/dL or higher and up to 10.0 mg/dL. Patients were randomized to receive either tenapanor or placebo two times a day. Although, as I alluded to before both arms of the study continued to take phosphate binder treatments as well. The primary endpoint was to determine the change from baseline in serum phosphorus levels at week 4 between the tenapanor and binder arms. A binder arm in the study in essence means placebo 2 times a day plus phosphate binders. It was shown that tenapanor along with phosphate binders had achieved a statistically significant reduction in serum phosphorus from baseline to end of the 4-week treatment of 0.84 mg/dL. On the other hand, the binder arm only saw a decrease of 0.19 mg/dL. Tenapanor achieved a statistically significant decrease compared to placebo with a p-value of p=0.0004.

Financials

According to the 10-Q SEC Filing, Ardelyx had cash, cash equivalents and short-term investments of $123.9 million as of June 30, 2019. The company believes that it has enough cash to fund its operations for at least the next 12 months as of the date of the SEC filing for the financials which was August 9, 2019. The key thing to understand though is that it's quite possible that it may choose to raise cash earlier than anticipated. That's because on September 12, 2019 there is a PDUFA date set for potential tenapanor approval to treat patients with IBS-C. Depending upon its manufacturing plans and commercial activity, it is highly likely that it may need to raise cash earlier than its projected date. The key is if it will choose to do so immediately upon approval of tenapanor or if it will wait a bit till several catalysts. A readout of results is expected in Q4 of 2019, which is from the other phase 3 study known as PHREEDOM. This late-stage study is evaluating tenapanor as a monotherapy for hyperphosphatemia in patients with end-stage renal disease (ESRD) who are on dialysis. If appropriate, I believe it would be more prudent for the biotech to raise cash after this event. However, to be on the safe side it is possible but not guaranteed to raise cash before data is released.

Conclusion

The announcement of positive results from the phase 3 study using tenapanor to treat patients with CKD and hyperphosphatemia on dialysis is good news for both patients and investors. There two potential catalyst opportunities that could boost the stock higher in the coming months. The first one in the near-term just a few days away is the possible FDA approval of tenapanor for the treatment of irritable bowel syndrome with constipation (IBS-C). The PDUFA date has been established for September 12, 2019. Approval could come on or slightly before that date. It is important to note that this remains a risk as well. That's because there is no guarantee that the FDA will approve tenapanor for this indication. If the drug is rejected, then the stock could trade much lower. On the flip side, whichever decision the FDA decides to go for the IBS-C indication, there is the readout of the phase 3 PHREEDOM study. This is the second late-stage study dealing with patients with end-stage kidney disease and hyperphosphatemia. Results from this study are expected in Q4 of 2019. That means this is another catalyst opportunity for investors, should things go south with the upcoming FDA decision for the IBS-C indication.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.