Hi, good morning, and welcome to the 2023 Jefferies London Healthcare Conference. My name is Dennis Ding, biotech analyst here at Jefferies. Very pleased to have Ardelyx and CFO Justin Renz here. So, you know, obviously, the story has been an incredible bounce-back story ever since the whole XPHOZAH dynamic over the last few years. You guys have made a lot of progress since then, including getting XPHOZAH approved in the U.S., which is a great milestone. IBSRELA is launching well in IBS and keeps growing week over week. You know, we've tracked the scripts and everything. So as we move into the end of the year in 2024, talk about the priorities for the company and the outlook that you have. Sure. Good morning, everyone. Thank you, Dennis and Jefferies, for having us this morning. As Dennis just mentioned, we have two approved products, IBSRELA for irritable bowel syndrome with constipation and XPHOZAH for hyperphosphatemia for chronic kidney disease patients on dialysis. As Dennis alluded to, our focus is on the commercialization of both of those products. We launched IBSRELA in April of last year. It's going well, growing every quarter. We recently updated our and raised and narrowed our guidance to between $76 million and $78 million of revenue this year. XPHOZAH was approved on October 17, so just about three, four weeks ago now. That was a great accomplishment for our team. Cross-functionally, we're very proud of that. Our team is in the process of getting trained and in the field, and so to answer your question, our goal is to do just that, really grow both of those products' revenue, really make them an important part of the treatment paradigm for both indications. And then in the background, we are now reasonably well-resourced that we can start doing some modest R&D investments and think about what's next. We have some promising early-stage stuff that we have been, you know, rightfully so, not prioritizing, and we'll get on that next year. Great. So, you know, I know it's early. Obviously, you guys just launched XPHOZAH, you know, coming out of ASN, but talk about the progress there, the feedback that you may be getting from doctors. Thank you. Yes, we were delighted with our approval of XPHOZAH last month. We had a very strong presence at the American Society of Nephrology in Philadelphia just a couple of weeks ago. We had a product theater that was standing room only. There was a lot of interest and awareness of our drug, maybe because of the fact that it took us a while to get this ultimately approved, through the U.S. FDA process. It put us in a position to constantly be in the news in the sense. And so the interest and awareness of XPHOZAH as an option for patients with chronic kidney disease on dialysis with hyperphosphatemia is very high. And so, we are in the process of training and getting our reps all certified. They are in the field, in the East Coast, and all 60 reps will be deployed by next week, out there detailing it. There's a lot of excitement, a lot of enthusiasm, a lot of interest, and so we're looking forward to sharing our progress, you know, as time goes by. You know, maybe remind everybody, you know, hyperphosphatemia, what that is, what's currently being used out there, and then maybe we can kind of talk a little bit about reimbursement. Sure. So hyperphosphatemia is exactly what it sounds like, elevated levels of phosphate in your blood. So if you are a normal, healthy human with functioning kidneys, you naturally excrete phosphate through your urine. If you have chronic kidney disease on dialysis, you're not able to basically, you know, excrete the excess levels of phosphate. Phosphate is a ubiquitous ingredient in almost everything we eat. It's not even listed as an ingredient on many food products because it's, it's just so common, so to speak. So like everything else, when you have normal levels of phosphate in a typical patient, human might be between 2.5 mg and 4.5 mg per deciliter. The guidance by KDOQI says that over 5.5 mg per deciliter is deemed elevated, the goal, therefore, is to lower phosphate levels in your blood to lower than 5.5 mg per deciliter. So our drug, tenapanor, is a phosphate absorption inhibitor, so it works by blocking. Its novel mechanism basically has claudins that close, that keep phosphate from being absorbed, and it goes right out. So our drug is an opportunity to work with the existing therapies out there, and those are called binders, and they do just that. So binders such as sevelamer, which is the market leader and has been around for a long time, originally a GelTex and Genzyme product. Sevelamer, you take with every meal or snack, and so you need to basically have it present in your stomach when you're eating, and that binds to the phosphate in your food, and then you excrete it out. Many patients have to take multiple binders with each meal, and so it's a cumbersome regimen. These patients also have other medicines that they take, so their pill burden is quite high. Our drug is one small pill that you take before your first meal and your last meal of the day, so it's literally the size of a Tic Tac as opposed to the size of, I'll say, a fish oil pill for kind of frame of reference. So we get very good efficacy on a much lower pill burden, and the advisory panel, which met, ironically, I think a year ago today, agreed that we have benefit there that will help all patients in both being compliant, staying on it, and also adding, of course, to their health by lowering their levels of phosphate in their blood. So we believe the efficacy, the ease of use, can work both synergistically, if you will, with binders, because we have combination data, and our drug is indicated for patients who either can't tolerate binders or they're no longer working for them. And so we can either add on to that or, again, if it's not working for them. ... Right, let me summarize that really quickly. This is for patients with CKD on dialysis who have high hyperphosphatemia. Correct. Right? That's a pretty sizable market. Yes. I think it's like 500,000 in the U.S. alone. 80% of them, you know, Take phosphate-lowering therapies. Take phosphate-lowering therapies. Another 80% of those are not controlled, so that's kind of where the market is- Correct. You guys would be used on, in combo with the phosphate binders. And then if they are unable to tolerate the binders- Unable then the nephrologist, and again, it's important to note that it's a nephrologist-driven market, so the nephrologist writes the script, and that's how it works. So she or he will dictate the treatment regimen. Right. And the current standard of care, like a big issue with that is the high pill burden. And, you know, those patients, they're on like 10, 13, 15 pills a day, but XPHOZAH's, you know, BID or twice daily. Correct, and they also have fluid restrictions, and so it's very hard to even swallow these pills often for these patients. Right. So for the fourth quarter, you know, you guys are just launching. How should we expect revenue to kind of ramp? I mean, like I know it's early, there's probably some stocking, but can you just help frame, you know, the progress you guys will be making over the next month and a half? Yeah, thank you for asking. The interest and awareness is high. Our goal is to literally. We'll probably have modest revenue in the fourth quarter. But the goal is to really make this available to as many patients as possible. So we're really focused on access to make sure that if the nephrology community writes the script, and we're gonna require a prior auth, because, again, the binders are standard of care. They're, generally speaking, inexpensive because they've been generic for a while, and our drug will be coming, you know, behind that, if you will. Our indication is for when binders are either not tolerated or in addition to them. So we can expect modest revenue in the fourth quarter, and then our goal literally is to just add additional patients every day, every week. So how should we think about the ramp in 2024, right? Like, I think a lot of investors in our conversations are really focused on how XPHOZAH would do in 2024. I think there's a general understanding that IBSRELA will continue to grow, and that's okay, but, you know, XPHOZAH is really sort of the wild card in terms of how big can revenue be, right? So is it $10 million, $30 million, $50 million, or even higher in 2024? So how should we think about that ramp, that trajectory? And yeah. Yeah. Well, I mean, internally, of course, we're very excited. We're so grateful that we got this approved last month, and we can make this treatment available for patients. It'd be premature for me to give you a hard and fast number. We think it will do well. We don't want to be... We want to be very measured and thoughtful in our guidance, and we're not there yet. We're just literally getting in the field this week. So I would expect we would probably give an update in early 2024 with more specifics. But you touched on IBSRELA. IBSRELA continues to grow. We really want persistent and consistent growth for both products, and that is our main focus. Right. So do you expect, like a bolus of patients in, let's say, first quarter of 2024? Just because, you know, when we speak to a lot of physicians, there is a lot of enthusiasm, and we did a survey, and that there was, like, you know, a lot of positive comments around XPHOZAH. So I'm just wondering, you know, would you expect some sort of bolus, or is it kind of like a, "Let's get a couple patients, then grow that over time? Sure. Again, it's a new mechanism, which is great, and I think we need to do our best to make sure the nephrology community is aware of how our drug works, the dosing regimen, and all the ancillary things that go along with that to make sure that, for example, you should no longer have to take your stool softeners or laxatives, things of that nature. You know, you can't take it pre-dialysis. Our drug is contraindicated to take before your first dialysis session of a day. So it's all about making the nephrology community more and more aware of it. You're right in suggesting that the community has been waiting for this product for a little while. So we do think uptake will be strong. We do believe that there are patients who can benefit from it right away. So we're hopeful, to your point, that there will be very strong adoption early. We are seeing a very strong response from the community out there. We've made the supply, so we are well prepared and resourced, both with the supplies ready to go and the team going in the field. I'm hopeful and optimistic, but again, it's too premature to give you a hard and fast number on how well it will come in. Okay. If we look at some of the historical branded launches in the hyperphosphatemia space, like Auryxia or Velphoro, and we look at that, that launch trajectory, excuse me, over, you know, the first few years, you know, those are relatively old drugs, I think like 2015-ish timeframe. But those have done like $10 million, $15 million, $20 million the first few years. So maybe talk a little bit about your confidence in driving greater adoption. What's the differentiation versus some of these older drugs? And, yeah, you know, basically, how should we think about, how should investors all think about the revenue ramp? Sure. Well, it's important to note that XPHOZAH's the first and only approved phosphate absorption inhibitor, so it's different, and it's a new option for patients with elevated levels of phosphate in their blood. And so again, we're this novel mechanism should differentiate it from the recent branded binder launches. You know, we literally block the absorption of phosphate, and this is different than as opposed to binding to the phosphate. And so there's a significant reduction in our serum phosphorus in our phase III trials with a single pill twice daily. So this is again, where we think we differentiate ourselves. We do expect a strong uptake as we've talked about because of this novel mechanism. Steady, consistent growth, you know, we're engaging the healthcare community as we speak. And I think the favorable response is something we're really excited about. You know, again, as I mentioned at ASN, we had a number of posters. Our partner, Kyowa Kirin, who's going to be selling this in Japan, hopefully in early 2024, also had posters and presentations. There's a lot of interest in the clinical data, and so we are really going to try to make it the access through ArdelyxAssist, which we believe is a best-in-class way for doctors and the nephrologist, if you will, in their offices, to get the scripts through, get through the prior auth, and get the drug to the patients. The patients are waiting. They need a new option for them, and hopefully, we can deliver it for them. The team has given an update over the last few weeks around the pricing of XPHOZAH. So talk about, you know, the decision to go with, I believe, you know, $3,000 a month price, and what are some of the pushes and pulls on that number? Sure. So, I mean, we believe the price is appropriate in the context of the CKD market landscape, you know, the novel mechanism of action that I've spoken about several times. And the patient population needs something new. It's the, again, as I, I say, it's the only product approved for patients who are not able to achieve the guidelines that currently exist for the established targeted phosphate therapy. So we don't anticipate there being an issue with payers. You know, we will, we'll see how that plays out, but we've done a lot of research with all the stakeholders, and we believe that our price is appropriate. So when we speak with investors around XPHOZAH's price, you know, it you know, there are some who think that that's great, you guys are a premium product. You guys are priced, you know, about 2x some of the branded drugs out there. But there are also some people who think that the price may be too high. There's gonna be a lot of payer pushback, and that could limit some of the access, you know, especially in 2024 when you guys are launching. Presumably, heading into your pricing announcement there, you know, there was probably some engagement with the payers, some feedback on the price, the label, and things like that. Can you give a little bit of color on, you know, some of those discussions? Sure. There are two branded binders that are currently available in the United States, and their pricing, on average, is between $1,500-$2,400 or so per month, actually. And so that is a pretty healthy price as well. So we're in terms of us being a premium to them, we are really not dramatically different from those options. Again, that's on average because the dosing levels of those branded binders is different for per patient. You know, some have to take three or four pills with each meal, and so it's on a pill by pill basis, as opposed to our drug is one small pill twice a day. Access and affordability is very important to us, so we have a very generous patient assistance program. So we will put that in place, and so to the extent that you are of a certain income level, we will make it available to you. So we will have that program... It's already rolled out, and this has worked very well with IBSRELA, so it's basically the same playbook we're using for XPHOZAH. We also have a commercial co-pay program. You're not allowed to do this in the United States for our government patients like Medicare and Medicaid, but for commercial customers, we will pay their co-pay at the point of sale, if you will, the point of prescription being delivered, and so that's an important part of our access and affordability plan as well. Payers understand that this is a pre- you know, a product that has a unique label and a unique mechanism. Got it. And, you know, if we can shift over to reimbursement, right? There has been some legislation around including orals or oral phosphate binders or phosphate-lowering medications into the, you know, TDAPA bundle payment system. So maybe just remind the investors in the room who may not be totally familiar with the U.S. reimbursement system for dialysis patients, but, you know, talk a little bit about that dynamic and some of the proposed legislation to delay that inclusion. Sure. This is an important issue, of course, at Ardelyx. It's important to note that XPHOZAH right now and next year is launched into a traditional prescription market. Sure. Yes. So the normal- Yes. Medicare Part D, Medicaid, commercial, VA, et cetera. And the nephrologist drives this process, so she or he writes the script, and then it goes through like any other normal oral prescription today. Currently, phosphate oral phosphate-lowering therapies are slated to go into what's called the dialysis bundle on January first of 2025. And so it therefore would be part of the bundled payment system that chronic kidney disease patients on dialysis have. Buddy Carter, who is a representative from Georgia, and several others introduced a bill late July that would extend the period of time before oral-only phosphate-lowering therapies would go into the bundle until January first of 2033. It has bipartisan, bicameral support. We believe that it is the right thing for patients to have this not included in the bundle, and by and large, I'm not aware of really too much resistance to that because it's the right thing for the patients and the prescribers. So, however, it requires an act of Congress, and so as an American, sometimes our Congress is not the most smoothly functioning organization. So it'll be interesting to see how that plays out over time. We have no idea about the timing, which is often a challenge, and the question that investors ask us is, "Well, when will this happen?" I'm like, "Well, we don't know." So the important thing is, right now, it's a normal nephrologist-driven script going through the normal payment methods. We are launching full steam ahead this year and next. Should the dialysis bundle not be resolved for phosphate, oral phosphate-lowering therapies, we would, in fact, apply at the end of next year for the TDAPA period, which could give you two or more years of extended time for the government to figure out utilization. 'Cause the drug would move from a Medicare Part D, as in dog, to Medicare B, as in boy, which would be different. And so how that is score kept is also, to be determined. So when a bill is dropped, the Congressional Budget Office then needs to assess the merits of the drug, whether it's a pay for, meaning it saves the government money, or a coster, which means it costs the government money. And so ultimately, we believe that our... This bill that Buddy Carter introduced will probably be combined with other legislation in an omnibus package at some point, with offsets and pay-fors. We have no idea when the CBO will score it. It's. There's probably 100 bills in front of Congress right now, and, you know, it's anyone's guess of when it will get scored. Right. So, a big factor in my view on whether a bill like that could get passed, is just this dynamic of whether moving these phosphate binders into the bundle, would it save the government money, the government money, or would it cost the government money, right? Because right now, like, I feel like the U.S. government's in a cost-saving mode. They're trying to find other areas to reduce costs in order to fund other programs. So if that analysis of moving orals into the bundle, if that saves money, then it would be sort of a no-brainer for Congress to pass it, right? So, you know, in terms of the CBO's calculations, and perhaps the company has done some of this analysis internally, but how confident are you that, you know, that move would save the government money, or at least be- Right. Well, it, the CBO has their own methodologies, and leadership will determine that, so I'm not gonna speculate on how they calculate it. We believe it's the right thing for patients. It's the right thing to do. We have no reason to believe it's worse than neutral, and so therefore, we believe it is the right act for Congress to do, to enact it, irrespective of the financing. Of course, to your point, then the timing will matter because, as you might imagine, with a number of bills in front of Congress, they will have to figure out how to consolidate all of them in an omnibus package- Right ... and payors would obviously be more well-received than costers. But again, we are hopeful that this legislation will get enacted and... But we're gonna keep going, irrespective of that, full steam ahead. I think in the last few minutes, maybe we can talk a little bit about IBSRELA. Recently, you guys have, I think, raised your guidance for peak sales. I think before it was mid- to high single-digit% share of the IBS-C market. Now, you guys are thinking about high single-digit%. So what drove that confidence to kind of guide investors to to model more than what you guys have been guiding before? And also, how should we think about 2024 for IBSRELA? Sure. Thank you for asking. Yeah, persistent and consistent growth, so we've been very pleased with our team's ability to have the gastroenterology community adopt our drug. It's been very well received. To your point, we've had increasing growth quarter-over-quarter, and so the consistent and persistent uptake across the board, across the United States, has encouraged us that we now believe that we can achieve that high single-digit market share that you just mentioned. Our phase III clinical studies were all done in front-line therapy, and so it's really the payer market in the United States that keeps us from being that. And so you do need to essentially fail a GC-C agonist for the payer to approve it. But there are a number of patients who have been on a GC-C agonist, and they are actually very good therapies, but it doesn't work for everyone all the time. And so when they come off and they're looking for a new treatment option, we wanna be there for them. And so we believe that now, in light of having a year and a half of experience behind us, our commercial team has assessed the marketplace and our ability to penetrate across both the GI market and the non-GI markets. There are a number of high-writing non-gastroenterologists, and then, of course, there are many folks who write one or two prescriptions a year, whether they're you know an internist or general medicine. So, you know, our goal is to constantly just make everyone aware of IBSRELA, its opportunity, its novel mechanism, and give, you know, a treatment option that is different from the GC-Cs. And as a result, we think we can now achieve that higher single-digit share than we did when we first launched. Great. You know, you made an interesting comment, you know, in the very beginning of our, you know, fireside around R&D. I think historically, the company has kind of messaged to people that R&D has not been a big priority for the company because you guys were focused on IBSRELA, XPHOZAH getting approved, et cetera. But now it seems like, you know, you mentioned the balance sheet. You guys are a little bit more comfortable with spending, or investing a little bit more in R&D. So maybe talk about that and what has led to or what has shifted in the company's view on that. Sure. Again, just to reiterate, though, our priorities absolutely are the growth of IBSRELA and the successful launch of XPHOZAH, and that is job one and job two. We do have some early-stage pipeline assets that we are excited about. We haven't disclosed them yet. We probably will at some point in 2024. I think it's important to always have something next, and so we are excited about some of the things we have. It's gonna be a modest investment in 2024. You know, we're talking single-digit millions. Again, it's important for companies to focus. I think sometimes companies differentiate, try to differentiate so much that they diworsify, to quote Peter Lynch from years ago, than versus diversify. So we're gonna be very focused on that. We have a couple ideas we wanna spend our money on, and, you know, we'll share with that as we make our progress. All right, very good. Well, I think that's all the time that we have today. Thank you so much, Justin, for- Thank you, Dennis, for having us. Nice to see you. Appreciate it.