Ardelyx Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 1, 2024

There are 7 speakers on the call.

Operator

and welcome to the Ardellix Second Quarter 2024 Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note today's event is being recorded. I would now like to turn the conference over to Caitlin Lowy, Vice President of Corporate Communications and Investor Relations at Ardelet.

Operator

Please go ahead.

Speaker 1

Thank you. Good afternoon, and welcome to our Q2 2024 financial results call. During this call, we will refer to the press release issued earlier today, which is available on the Investors section of the company's website atardells.com. During this call, we will be making forward looking statements that are subject to risks and uncertainties. Our actual results may differ materially from those described.

Speaker 1

We encourage you to review the risk factors in our most recent quarterly report on Form 10Q that was filed today and can be found on our website atardellx.com. While we may elect to update these forward looking statements in the future, we specifically disclaim any obligation to do so, even if our views change. Our President and CEO, Mike Raab and Chief Financial and Operations Officer, Justin Renz, will share prepared remarks before we open the call to questions. I will now hand the call over to Mike.

Speaker 2

Thank you, Caitlin, and good afternoon, everyone. It is great to be back together to discuss another quarter's strong performance. Across all fronts, we continue to drive exceptional progress. Adderallus growth momentum continued at a strong pace with another quarter of meaningful gains with revenue growing 25% compared to the Q1 of 2024 and nearly doubled compared to the Q2 of last year. This performance demonstrates the important role Xrela is playing addressing the large unmet need among patients with IBS C.

Speaker 2

Every month, we continue to see increases in new and repeat writers as well as new and refill prescriptions. Healthcare providers see their patients having positive experiences with Xarela and are expanding the number of patients in their practices for whom they prescribe. Our market access and affordability program, Ardellus Assist provides a straightforward path for patients to access Xarela. AZRILLA is an important and effective treatment option that is bringing relief to more and more patients who despite previous treatment continue to experience the debilitating symptoms of IBS C. The potential for EXPARELA is significant and reinforces our conviction that it can achieve at least a 10% share of the IVS prescription market and as well on the path to becoming a $1,000,000,000 product before patent expiry.

Speaker 2

The launch of EXFOZA has been remarkable and makes it abundantly clear that patients have needed a different option to manage their phosphorus when binders are insufficient or not well tolerated. Nephrologists are responding favorably to the benefit EXPOS is providing their patients and are increasingly integrating EXPOS into their therapeutic regimens. The consistent feedback from the field is that healthcare practitioners are seeing serum phosphorus improvements in their patients, many for the first time as a result of EXPLOSA. These dynamics are translating into significant growth for EXPOSA in only the 2nd full quarter since launch. Throughout the development and commercialization of this important therapy, we've demonstrated how vital it is for us to assume the role we have to advocate for the rights of CKD patients on dialysis.

Speaker 2

As we discussed during our call in July, we believe that moving EXPOSA into the Medicare bundle would severely restrict and effectively eliminate access to EXPOSA for all patients. To allow patients who are now and may in the future benefit from EXPOSA therapy acting in the best interest of patients and has instead ignored the countless voices from patient, physician and provider communities who have clearly and consistently communicated that oral only phosphate lowering therapies do not belong in the bundle. As we have announced in the past month, we have chosen to advocate for patient access to EXPOSA across numerous fronts. First is the Kidney Patient Act. There is significant support for this bill across multiple stakeholder groups and we call on Congress to act and pass this bipartisan, bicameral legislation and protect access to all phosphate lowering therapies for all dialysis patients.

Speaker 2

2nd, we announced in mid July that we filed a lawsuit claiming that CMS' plan to move oral only phosphate lowering therapies, including Exposa into the bundle is unlawful and oversteps its statutory and regulatory authority. In addition, the complaint argues that the plan is incompatible with CMS' own regulations stating that renal dialysis services do not include those services that are not essential for the delivery of maintenance dialysis. We seek relief under the Administrative Procedure Act to enjoin CMS from proceeding with its plan to include EXFOZA in the bundle and thus eliminate coverage for patients under Medicare Part D beginning in January 1, 2025. We are honored to be joined in this law suit by the American Association of Kidney Patients, the nation's largest independent kidney patient organization and the National Minority Quality Forum, the nation's largest minority healthcare research, education and advocacy organization. Their partnership demonstrates just how significant of an impact this policy will have on patients and how critical it is that we protect patient choice and timely access to phosphate lowering therapies.

Speaker 2

We are still early in the process and cannot share details regarding our expectations of timing or success. At this point, we await confirmation that a government lawyer has been assigned to the case and then we will be able to commence discussions regarding the timeline. We are hopeful that there can be some action before the end of the year on the case. 3rd, with our decision not to apply for TDAPA, we believe that we are able to continue making progress on our strategy to maximize patient access to EXFOZA. As we learn more and make decisions, we are committed to communicating to you as comprehensively as possible.

Speaker 2

I hope that what you can take away from our past actions and from our approach is that we will exhaust all options available to us to protect patient access to EXFOZIP and to protect our business. What should be clear from my remarks and from just seems to come is that our business is growing and our performance during the Q2 demonstrates the strong fundamentals driving this growth. Delivering on our priorities, executing our disruptive commercial and market access approach and remaining committed to the Ardelix mission of putting patients first, Our 2 first in class medicines are bringing meaningful benefits to patients. We are well capitalized and we are focused on our future, both in terms of our current products as well as pipeline expansion. I will now turn the call to Justin, who will walk through the details of our financial performance.

Speaker 2

Justin?

Speaker 3

Thank you, Mike. I'm very pleased to be with you to discuss the 2nd quarter performance we reported earlier today, which included significant growth for both of our commercial products and thoughtful management of our finances, while maintaining a strong balance sheet. Let's start with revenue. We reported significant year over year revenue growth during the Q2, totaling $73,200,000 That is compared to $22,300,000 of total revenue during the same period in 2023. This growth reflects incredibly strong performances from both Interela and EXPOSA, which together totaled $72,600,000 in net product sales revenue in the Q2 of 2024, compared to $18,300,000 in net product sales revenue coming from a Drella loan in the Q2 of 2023.

Speaker 3

Before I jump in, I'd like to take a moment to share our perspective on the publicly available prescription data for Xarel and EXPOSA as many of you ask how to best consider those data in relation to our revenue. 1st, as you know, our net sales revenue is based upon bottle into our distributors and is not directly linked to prescription level data available from Symphony or IQVIA. As we've discussed, our distributors and pharmacies keep limited amounts of product in the channel, essentially just in time inventory management. I encourage you to use some caution as information from prescription data providers can be incomplete and inconsistent, especially for medicines like Anthronexposa as a result of our market access and distribution strategy that relies on the critical relationship between HCPs, specialty pharmacies and our Delix Assist. Remember too that not all prescriptions are a 30 day supply, some are 60 day and some are 90 day supply.

Speaker 3

We understand the desire to use those data, but we want you to consider these dynamics moving forward. With EXPARELA, we began providing with revenue guidance when we were comfortable and we were able to provide a solid expectation of the future performance of the product. We will provide similar guidance to you for exposive when we have a solid perspective of our future expectations. For the Q2 of 2024, net product sales revenue for Xrella was $35,400,000 nearly doubling the $18,300,000 in revenue we reported during the same period last year and 25% quarter over quarter growth compared to the Q1 of 2024. Xarel's performance was due to strong volume growth resulting from demand driven by our commercial focus and increasing both depth and breadth of writing.

Speaker 3

That focus continues to translate into growth in new and refill prescriptions as well as expansion of new and repeat writers. We also benefited from the expected improvement in our gross to net deduction for EXRELA, which decreased from 33.5% in the Q1 this year to 29.7% in the 2nd quarter. As we have seen over the past 2 years, we expect to gradually improve over the remainder of the year. We are in the final stages of completing the expansion of the Intrrella sales team. The IBS team market has responded very favorably to Intrrella product and clinical profile and our marketing efforts.

Speaker 3

It is also clear that increasing exposure and frequency of messaging to our target healthcare providers generates new writers and expands the number of patients treated by existing writers. We expect the expanded sales team to begin having an impact later this quarter. As we consider the second half of the year, the fundamentals driving Intral's performance remain. We anticipate continued strong quarter over quarter growth for the remainder of this year and we reiterate our guidance. We expect full year 2024 Xrella U.

Speaker 3

S. Net product sales revenue will be between $140,000,000 $150,000,000 Now turning to XFOSA. EXPOSA exchanges exceptional performance, reporting $37,100,000 in 2nd quarter net product sales revenue, up from $15,200,000 we reported in the Q1 of the year. Growth continues to be driven by strong demand from healthcare providers who have a clear need for a new and different option for dialysis patients to help them achieve target phosphorus levels. In addition to strong demand for EXFOSA, our gross to net deduction improved from 23.8% in the first quarter to 21.4% for the Q2 period.

Speaker 3

As is the case with Xrella, the primary deductions reflected in our gross to net for exposome on the standard fees to our distributors, rebates and discounts to government payers and costs associated with our commercial co pay program. And consistent with our distribution of market access strategy, we do not contract to provide rebates to payers or pharmacy benefit managers. Commercial patients who have an out of pocket co pay costs may have their co pay requirements covered. Thus, the impact on our gross to net is highly dependent on our payer mix and utilization of our commercial co pay program. We are very pleased with these results to date.

Speaker 3

As we continue to learn more about the patient and payer mix that impacts the calculation, we will provide our expectations for the gross debt deduction as we do with the drill. We are very pleased with our top line results during the quarter. Our commercial approach is working and our teams are executing the highest level to build and maintain the growth momentum we've established from both Azrela and XPOS. Now for the expense and cash side. Throughout the Q2, we continue to be thoughtful in how we manage our expenses.

Speaker 3

Research and development expenses were $12,800,000 compared to $8,300,000 during the Q2 of 2023. This increase reflected expanded field based medical affairs teams focused on the gastroenterology and nephrology communities. Selling, general and administrative expenses were $64,700,000 for the 2nd quarter compared to $27,200,000 for the same period of 2023. The increase was related to commercial launch activities for XPOSA, investments to grow Xrela throughout last year, as well as the expansion of the Xrela sales team that I just spoke to and which occurred primarily during the Q2 of this year. As I previously communicated, we expect our SG and A run rate once the expansion is complete to be approximately $80,000,000 per quarter.

Speaker 3

Substantial top line growth combined with thoughtful cost management resulted in a net loss of approximately $16,500,000 or $0.07 per share compared to a net loss of $17,100,000 or $0.08 per share in the same period of 2023. Our $16,500,000 net loss for the Q2 of 2024 included $12,300,000 in combined non cash expenses from share based compensation and non cash interest expense related to the sale of future royalties. We finished the 2nd quarter in a strong cash position. As of June 30, 2024, we had total cash, cash equivalents and short term investments of $186,000,000 as compared to $184,300,000 at the end of 2023. We did not engage in any fundraising activities during Q2.

Speaker 3

However, as a reminder, we drew the $50,000,000 tranche fee from our debt agreement with SLR Capital back in March. We are pleased with our performance during the Q2, driving continued substantial top line growth across our product lines, managing our operating expenses and maintaining a strong balance sheet. We will continue to be thoughtful with how we deploy capital while focusing on maximizing shareholder value. With that, I'll hand it back to Mike.

Speaker 2

Thanks, Justin. Q2 was a remarkable quarter. We demonstrated significant growth for both our products and we shared our perspectives on the impact the oral only drugs entering the Medicare bundle and our commitment and plans to fight for patients. We are considering all options and making progress, yet we still have a lot of work to do. We do not fight alone.

Speaker 2

I would like to extend my sincere thanks to our many partners, physicians, patients and advocates, as well as all of Team Ardelix for lending their voices to the important work we have ahead of us to protect patient access to expoza. The past few weeks have demonstrated just how aligned we all are in supporting patients and making sure that they have access to innovative therapies. We have a team in place to deliver and we will continue to update you as developments occur and progress is made. We appreciate your support as we move through the next few months. I will now open the call to questions.

Speaker 2

Operator?

Operator

Thank you. We will now begin the question and answer session. Today's first question comes from Louise Chen with Cantor. Please go ahead.

Speaker 1

Hi, congratulations on the quarter and thank you for taking my question. So first question I had for you was on exposa. Obviously, the sales were very strong And you mentioned something from a gross to net perspective that sounded like it may create some volatility quarter to quarter. So just curious how you think we should model think about forecasting the product going forward? And just wanted to confirm, it sounds like there was not any inventory build, but just wanted to confirm

Speaker 4

that there wasn't anything like that. Thank you.

Speaker 2

Hey, Louise. Thanks for the question. Yes, I mean, Justin will go into some detail on it, but I think really what we're trying to communicate there is as we did with Ettorella, giving specifics on guidance is premature at this stage for EXPOSA as we're learning the ins and outs of what's happening. Justin, if you can provide some perspective too?

Speaker 3

Sure. Thanks, Luis. Yes, both products continue to have low amounts of inventory in the channel. So that's been very consistent throughout the course of actually both product launches. And from a gross to net perspective, the largest variable is in our commercial co pay program.

Speaker 3

And so there's been some mild fluctuation. And of course, as Mike suggested, it is sensitive to the payer mix. So we continue to learn more and more about how that goes. But we're pleased with what we've seen so far.

Speaker 1

Okay. And maybe if I could just ask one more question here. I was curious with respect to exposa and your, initiatives to keep it out of the CMS bundle. I know you sued CMS. What other initiatives could you take to fulfill what you're trying to do?

Speaker 1

Thank you.

Speaker 2

Well, I think that's the with the work that we're doing still ongoing, so it's premature to go into any of that. I mean, there's a lot of work going on behind the scenes. I think as you've seen Louise, we will exhaust all options to make sure that patients continue to have access to these drugs.

Operator

Thank you. And our next question today comes from Yigal from Citi. Please go ahead.

Speaker 4

Yes. Hi. Thank you very much. Just as we could follow on the inventory question, is it possible that you could provide any quantification of what the low inventory looks like for both products? And then on the SG and A, you mentioned just and I think $80,000,000 run rate per quarter.

Speaker 4

Just can you comment on when you would get to that point? Thanks.

Speaker 2

Yes, Justin?

Speaker 3

Sure. So on the latter, so SG and A was $64,700,000 in the second quarter, which reports includes non cash stock compensation expense and we continue to add to the sales force. So we expect to get toward as we build the sales force and we're almost done with the ramp up of the OpExarella sales team, we should hit that $80,000,000 level in the Q4 of this year. In terms of inventory in the channel, both products have been very consistently low. We have a very tight distribution channel.

Speaker 3

And so there's obviously some variability on a specialty pharmacy to specialty pharmacy basis. But in general, we've been in that 1.5 to 2.5 maximum and we're closer to 2 weeks tops in the channel on a regular basis.

Speaker 4

Okay. Thank you very much.

Operator

Thank you. And our next question today comes from Dennis Ding with Jefferies. Please go ahead.

Speaker 5

Hi, thanks for taking our questions and congrats on a really strong second quarter. So I had a question on Echeverao. You guys have been obviously expanding your sales force since earlier this year. Just wondering how much of second quarter's performance stems from some of these new sales reps and we'll be expecting an inflection in second half as you complete some of these new hires and maybe even comment on when you expect those new hires to be higher? And then as a follow-up, just on R and D, I mean, we appreciate you guys have 2 very successful commercial franchises, but one piece of feedback we from investors since Panopto or pads do expire in early 2030s, how are you guys thinking about the pipeline?

Speaker 5

So where is this on your list of priorities and how soon can we hear more about that? Thank you.

Speaker 2

Hey, Dennis, thank you for the question. Turning to sales force expansion, I think with Justin's comments, you heard that we expect that the full expansion will begin having impact by the end of this month. It's a process to hire 60 new people. They don't all come on at once. You need to train and certify.

Speaker 2

So the full team is not on board until the end of this quarter. So we expect that. As we said, we're reiterating our 140 to 150. Dennis, you know as well by now that we're not going to get over our skis. We're thrilled with the performance.

Speaker 2

But I think what you can count on is the reiteration of the guidance that we've given. In terms of R and D, I think as we've discussed before, one of the reasons that we've had brought Mike Kelleher on board as our Executive Vice President of Strategy and Corporate Development was to address exactly the question that you have brought up is looking for those programs that we could bring into in house that are complementary to what we have created with BUGEXVOSA and INTELLA. As we make progress on those things, certainly that's what we will bring to the fore and share with everyone.

Speaker 5

Great. Thank you.

Speaker 2

Thanks, Dennis.

Operator

Thank you. And our next question comes from Laura Chico with Wedbush. Please go ahead.

Speaker 1

Good afternoon. Thanks very much for taking the question. I guess just 2 here. 1 on ESVELA, congrats on the progress. Wondering, could you talk a little bit about what's necessary to see pull forward in earlier lines of utilization?

Speaker 1

And with respect to your prior peak estimates here, can you remind me how much does earlier utilization play into your assumptions? And then I think I missed it, but exposome, what was the split on Medicare versus non Medicare? Thank you.

Speaker 2

Yes. So we didn't to the latter question first, we didn't provide that split. I think implied in Justin's comments about gross to net, those are things that we're going to see evolving over time. So I think we've talked historically about a 45 to 55 split non Medicare to Medicare as an example. In terms of AZERLA, the specificity is to I think what you're asking about previous utilization pulling forward is refill prescription rate of that.

Speaker 2

We've not talked about that. And I think it's still something that we're looking to understand and not sharing at this stage. But it's both, right? It's new patients as well as refills. It's physicians that are incredible team on the ground is as convinced to try and then that they are expanding their utilization across the broader patient population.

Speaker 2

It's the grit and the grind that this team does. And that was what drove much of the decision around the expansion that we expect to see the impact of by the end of this

Speaker 1

month. Thanks very much guys.

Speaker 3

Thanks, Lauren. And our

Operator

next question today comes from Roanna Ruiz with Leerink Partners. Please go ahead.

Speaker 1

Hi, afternoon everyone. So question on EXFOZA. I was curious what current field force strategies are getting the most traction so far with physicians in the 1st couple quarters of this year. And if you can elaborate, is volume coming more from possibly new or repeat prescribers far and how that affects your conviction going into the second half of this year with exposa?

Speaker 2

Hi, Ryan. Thanks for the question. So we're 2 quarters in, so it's kind of tough to think about repeat writers yet. I think is probably not inconsistent with other launches. Physicians are going to be trying drugs on their hardest to treat patients.

Speaker 2

And the fact that you then see expansion within that physician to other patients says that it's working in those patients and those patients who may be less challenging or having a less of a difficult time managing a serum phosphorus deserve the opportunity to have a product like XPOSA helping them manage their phosphorus levels. So it's across the board. And that's the enthusiasm that we have that anecdotally we hear these stories about patients who for the first time ever are able to get their serum phosphorus in control, that's meaningful, right? When you've only had binders your entire career through your trainings in nephrologists and then you have a new

Speaker 3

mechanism like Xpose

Speaker 2

as an opportunity to help your patients get to goal, you're going to try it. And if it works, as this does, you're going to expand its use. Okay. And then, as this does, you're going to expand its

Speaker 4

use. Got it. Makes sense.

Operator

Thank you. And our question today comes from Ryan Dessner with Raymond James. Please go ahead.

Speaker 2

Hi there. First off, congratulations on the impressive quarter. Two quick questions from me. At this point, are you getting any feedback from prescribers suggesting there's uptake in patients with adequately controlled serum phosphorus? And number 2, regarding your litigation with CMS, what was the timeline for securing access to Exposa for Medicare patients look like in sort of the best case scenario here?

Speaker 2

Thanks. Hey, Ryan, thanks for the question. It's an interesting question because you would think that patients in control deserve the opportunity for something like EXPOSA2. I can say that not many stories yet that are coming that way. As I think the enthusiasm and excitement that we see is, don't forget that almost 70% almost 80% of these patients over time in the 6 month period of time are out of control.

Speaker 2

So one might say in control today, but historically not, they deserve the opportunity as well. So I think it's all over different kinds of profiles. So the most important thing is the what we're hearing is very strong results in terms of patients getting to GOL. I think from the comments that we made, it's premature for us to be providing any commentary in terms of where the status of the lawsuit stands. We are committed as we learn more in terms of the timeline and discussions that we will have with the government lawyers that we will share that.

Speaker 2

Thank you very much. Thanks, Ryan.

Speaker 3

And our

Operator

next question today comes from Joseph Follin with TD Cowen. Please go ahead. Hi there. Good morning and thank you for taking my questions. Congrats on

Speaker 4

the quarter. Maybe just 2 for me, to follow on a little bit on a prior question. Can you talk a little bit of the breadth of prescribers that you're seeing for EXPOSA versus maybe your overall target prescriber account base? And then second, just to get a little bit of understanding, I guess, if the bundle does go through and we don't really hear by the end of the year that that will be extended, I guess what sort of happens to Medicare patients that are currently on exposa? Is there a grace period or does that hit January 1 and we have to figure out how to get medicine to patients or not?

Speaker 4

Thank you.

Speaker 2

Sure. Thanks for the question, Joe. So in terms of the breadth of prescribing, again, we're 2 quarters into this launch and we've What I can say is the interest on the part of all those physicians that we had been able to see clearly is demonstrated by the revenue that we announced today. So I think we continue on the path that shows that these patients truly deserve the access that we're fighting for them. To your question about Medicare, if things move forward, we have an important continuity of care program that exists for patients.

Speaker 2

So that is going to be something that if we need to, patients are going to be able to access. Our hope is honestly with everything that we're doing and our continued evaluation of other things that we might do is that we don't come to a place where patients who deserve to do so because of a misunderstanding or unlawful perspective that CMS has about what we're trying to fight against, because they're just going to ultimately effectively ensure that patients don't get this drug that's working if they continue on the path

Speaker 3

that they're on. All right.

Speaker 4

Thank you.

Speaker 3

Thanks, Jim.

Operator

And our next question today comes from Ed Arce with H. C. Wainwright. Please go ahead.

Speaker 6

Hi. Thanks for taking my questions. And let me add my congrats on a truly remarkable quarter of growth here. First question is on XFOZA, 145 percent quarterly growth sequential and already surpassing Adjela in the 2nd full quarter. I wanted to ask about the what's driving that.

Speaker 6

Obviously, you've mentioned inherent strong demand and the focus on difficult to treat patients. But wanted to ask if there's other areas that you've discussed with physicians that could share a little bit more light on this. And if there has been any discussion of where exposer may not be appropriate for any of their patients. And then I have a couple of follow ups. Sure.

Speaker 2

So remember that we started educating the nephrology community about this new mechanism and opportunity to expose as disease awareness before what was supposed to be the approval in 2021. We had the terrible surprise that was given to us by the FDA and resulted in the CRL. So there was a lot of disease awareness, product awareness before that occurred and hence the fight that we started that everyone's aware of through the FDR process 2 years plus later with this launch. So disease awareness, exposed awareness was significant. That certainly plays a role, Ed.

Speaker 2

But most importantly is the clear unmet need, the requirements that have to be there for patients to get to goal And the fact that this drug is helping accomplish just that. That's a big and massive part of what is the established sort of market for the opportunity. But it's also the field force. We have a group of remarkable AVDs and exposes side as we do with Adrela, who are doing the work required to help physicians understand an option for both of these indications where there hasn't been another mechanism with a kind of clinical benefit that both of these drugs are providing. I think that's what's driving and is driving as it should, what you're seeing in this quarter's performance.

Speaker 2

In terms of places where you wouldn't use it, there really aren't any comments that we're hearing from that. Remember, our label is for those patients where there is an insufficient response or an intolerant ability to binders, which with the statistics as we all know, insufficient is a very large majority of these patients over any 6 month period of time or less, they are patients who can access this product. So I think our label clinical benefit, the evidence that physicians are seeing in their own practices as well as the commercial approach that we're taking, I think is resulting in what you see.

Speaker 6

Great. Are you aware of any physicians experimenting with this drug as a monotherapy?

Speaker 2

Well, remember that the label says insufficient or inadequate and how they then use that whether it is on top of a fixed dose of binder, whether it is a decrease in binder dose with EXFOZA on top of that or an elimination of binder because it's not working and exposa as monotherapy is all within the indication on our label and all of those are approaches that physicians are taking.

Speaker 6

Got it. Okay. And last question is, just wondering if you could explain a little bit further some of your contingency plans, if it comes to pass that your efforts with CMS on the oral phosphate agents are unsuccessful and they're moved into the bundle?

Speaker 2

Yes. I appreciate the question, absolutely, and would love to be able to be in a position to provide you clarity on that. It's just not it's premature at this stage. It's the work that's ongoing. I think the progress that we've made, I feel very, very good about.

Speaker 2

But I you know us well by now that we're not going to get over our skis and communicate something that we aren't fully 100% comfortable with. So we believe that there are opportunities, God forbid that what you just described occurs, but it's premature for us to provide you those details.

Speaker 6

Got it. Very helpful. Thank you. Thanks, Ed.

Operator

Thank you. And our next question today comes from Matt Kaplan at Ladenburg Thalmann. Please go ahead.

Speaker 4

Hey guys, thanks for taking the questions and congrats on the very strong quarterly results. Just a follow-up to Ed's question a little bit in terms of Exoza. Maybe it's with the understanding it's early in the launch, but help us understand in terms of the breakdown of patients on the drug, is it mostly being used in the combination setting or to Ed's question, monotherapy in patients who are intolerant of the binders?

Speaker 2

So specific breakdown across those patients, right? You're going to get anecdotes, right? I'm not going to when a prescription is filled for EXFOZIPA, it doesn't say on top of binder, on top of half binder monotherapy. You just got a prescription for exposend. So all I can provide all I can say is anecdotally, it's distribution of all those patients.

Speaker 2

What that then results in what it looks like for all the patients, I don't I can't tell you that.

Speaker 4

Okay. Fair enough. And then any update that you're hearing as we spoke recently, but in terms of the status of the Kidney Care Act and where that is?

Speaker 2

Yes. I mean, we continue to make incredible progress. You saw if you follow it as we do, 2 new co sponsors are have joined on the House side. And the fact that we have, as I said in my opening comments, both bipartisan, bicameral support with the Senate companion bill is incredibly strong for us. And it's going to ultimately come down to how bills are passed, which we all know, end up being in omnibus or mini buses at the end of the year, whether it's healthcare legislation that it can ride on, all of those things that we've talked about in the past.

Speaker 2

What is clear is all of the constituents that have worked on this and continue to work on it are demonstrating why this is absolutely the right thing for Congress to do, while in parallel we continue all of the other approaches from both the legal side as well as the evaluations that we're undertaking to look at what else we can do after the decision that we made to not file for GDAPA. So I think as you've heard me describe in our last discussion on this in July, it's kind of like a three-dimensional chess game where we're looking at moving all these pieces and trying to make sure that we are doing all possible to ensure access for patients.

Speaker 3

Okay. Thanks, Mike. Thanks, Matt.

Operator

Thank you. This concludes our question and answer session. I would now like to turn the conference back over to President and CEO, Mike Robb for any closing remarks.

Speaker 2

Thank you everyone for joining us this evening. As I'm sure you understand, we will remain focused on our priorities and we will provide information updates when we can. In the meantime, we remain steadfast in our commitment to patients and to maintaining our commercial momentum. With that, we can close the call. Operator?

Operator

Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful evening.

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Key Takeaways

  • Xrela growth momentum: Xrela net product sales grew 25% sequentially and nearly doubled year-over-year to $35.4 million in Q2, driven by new and refill prescriptions, with 2024 U.S. sales guidance of $140–150 million.
  • Exposa commercial launch: Exposa generated $37.1 million in Q2 net sales—up 145% quarter-on-quarter—as nephrologists adopt it for dialysis patients struggling to control serum phosphorus, reporting meaningful patient improvements.
  • Protecting patient access: Ardellix sued CMS and is championing the bipartisan Kidney Patient Act to block the inclusion of oral phosphate therapies into the Medicare ESRD bundle, preserving Part D coverage and patient choice.
  • Strong financial position: Total Q2 revenue reached $73.2 million versus $22.3 million last year, with a net loss of $16.5 million ($0.07 per share) and ending the quarter with $186 million in cash, equivalents and short-term investments.
  • Operational investments: R&D spending rose to $12.8 million and SG&A to $64.7 million as Ardellix expands its medical affairs teams and adds 60 Xrela sales reps—targeting an $80 million quarterly SG&A run rate by Q4.
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Earnings Conference Call
Ardelyx Q2 2024
00:00 / 00:00