Why Shares of Ardelyx Were Down Wednesday

What happened

Shares of Ardelyx (ARDX 13.48%) were down more than 12% as of 3:30 p.m. on Wednesday. The healthcare company, which has a chronic kidney disease (CKD) drug that is awaiting approval later this month, saw its shares fall after Novo Nordisk reported positive phase 3 trial data for Ozempic (semaglutide) to treat CKD.

So what

Ardelyx focuses on small molecules to treat diseases with significant unmet medical needs. The company’s only approved drug is Isbrela (tenapanor), approved to treat irritable bowel syndrome (IBS) with constipation. However, the company is looking to add indications to tenapanor. A different version of the drug, called Xphozah, is looking to be approved to control serum phosphate levels in adults with CKD on dialysis or those who have had a poor response or intolerance to phosphate binder therapy. Xphozah has a Prescription Drug User Fee Act (PDUFA) date of Oct. 17 for Food and Drug Administration (FDA) approval. The company said it would launch the drug in the fourth quarter, pending approval. Ardelyx also has a pipeline candidate, RDX013, that is in phase 2 trials to lower potassium levels to treat CKD. 

The announcement by Novo Nordisk regarding Ozempic takes the wind out of potential Xphozah approval. Novo’s news also hurt several kidney dialysis provider stocks as well.

Now what

There was already plenty of risk associated with Ardelyx. As of Q2, the company only had $127.6 million in cash, so it will need additional funding if it is able to launch Xphozah. It’s financials are improving, though the company isn’t yet profitable. Q2 revenue was $18.3 million, up 61% year over year, and the company said it had a net loss of $17.1 million, or $0.08 in earnings per share (EPS), compared to a net loss of $26.9 million, or $0.19 in EPS loss in the same period a year ago.