Ardelyx Soars Over 30% as Investors Cheer Q1 Results and Pipeline Progress

Shares of Ardelyx Inc. (NASDAQ: ARDX) were skyrocketing over 30% in early trading Thursday after the biopharmaceutical company reported better-than-expected first-quarter revenue and provided updates on its promising pipeline of drugs for gastrointestinal and cardiorenal diseases.

Ardelyx founded in 2007 and headquartered in Waltham, Massachusetts currently employs around 267 full-time staff. The company partners with larger pharmaceutical companies like Kyowa Kirin, Fosun and Knight Therapeutics on certain development and commercialization initiatives.

Ardelyx Surges on Strong Q1 2024 Earnings Results Fueled by XPHOZAH Sales Growth.”

As of 11:47 AM EDT, Ardelyx’s stock was trading at $8.88 up a staggering $2.09 or 30.68% from the previous close. Over 14.7 million shares had already traded hands compared to the stock’s average daily volume of 5.6 million shares.

The massive surge came after Ardelyx delivered its Q1 2024 earnings results before the market opened. While the company posted an adjusted net loss of $0.30 per share its revenue of $29 million easily topped Wall Street’s consensus estimate of $23.5 million.

Ardelyx’s strong topline performance was driven by early sales of XPHOZAH (tenapanor) its first-in-class product to treat hyperphosphatemia or elevated serum phosphorus levels in adults with chronic kidney disease on dialysis. XPHOZAH was approved by the FDA in October 2023 after successful Phase 3 trials.

In the earnings release Ardelyx CEO Mike Raab highlighted the “significant progress” made in launching XPHOZAH and advancing the rest of the company’s pipeline. He stated XPHOZAH prescriptions and sales are rapidly accelerating with over 7,500 dialysis patients having already received the drug.

Ardelyx’s Growth Trajectory and Pipeline Progress

Ardelyx expects the XPHOZAH launch trajectory to continue ramping up throughout 2024. Analysts have forecasted the drug to reach blockbuster status with over $1 billion in peak sales based on its unique mechanism of action and the large patient population.

Beyond XPHOZAH investors are excited about Ardelyx’s prospects for tenapanor in treating irritable bowel syndrome with constipation (IBS-C). Tenapanor is currently under review with the FDA with a decision expected in Q3 2024. If approved it would be the first minimally absorbed small molecule for IBS-C.

Ardelyx also has two other pipeline candidates in development – RDX013 for hyperkalemia and RDX020 for metabolic acidosis. Both target large underserved patient populations.

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Ardelyx Shows Potential for Further Growth

With a current market cap of around $2 billion after today’s surge Ardelyx still looks undervalued according to analysts. The average price target of $13.65 implies nearly 54% further upside from current levels. Several firms have recently boosted their targets with Jefferies having a Street-high $16 target.

While Ardelyx is unprofitable due to cash burn its $202 million in cash on hand should offer sufficient runway for at least the next 12 months as XPHOZAH sales ramp up. Ardelyx looks to be well-positioned for future growth given the combination of XPHOZAH’s blockbuster potential. The de-risked the tenapanor prospect and the remainder of its pipeline.

The biotech’s progress was highlighted as a key reason why the stock has delivered a stellar 170% return over the past 5 years trouncing the S&P 500’s 75% gain during that span. Thursday’s euphoric move indicates the market expects Ardelyx’s outperformance to continue.

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