Ardelyx: Limited Pipeline, Rising Costs, And Uncertain Growth Ahead (Downgrade)

Summary

• Ardelyx, Inc. faces significant challenges in 2025 due to Xphozah's reimbursement issues and modest growth from Ibsrela, prompting a downgrade to "sell" and "market underperform."
• Xphozah's loss of Medicare Part D coverage limits revenue potential, despite the company's $750 million annual sales guidance.
• Increased SG&A expenses and looming debt obligations raise concerns about Ardelyx's ability to achieve consistent profitability and fund necessary R&D investments.
• ARDX has strong liquidity with a current ratio over 2, but cash-generating capability and limited pipeline cast doubt on sustaining a $1 billion-plus market valuation.

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Ardelyx, Inc.’s (NASDAQ:ARDX) stock is up a modest 4% since my last evaluation in November. I recommended “hold,” but expressed caution due to “regulatory headwinds, competitive pressures, and uncertain long-term growth beyond tenapanor.” Back then, the focus was on its

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