Hello, welcome to the Ardelyx second quarter 2023 conference call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your touchtone phone. To withdraw your question, please press star, then 2. Please note, this event is being recorded. I'd now like to turn the conference over to Caitlin Lowie. Please go ahead, ma'am. Thank you. Good morning, welcome to our second quarter financial results call. During this call, we will refer to the press release issued earlier today, which is available on the investor section of the company's website at ardelyx.com. During this call, we'll be making forward-looking statements that are subject to risks and uncertainties. Our actual results may differ materially from those described. We encourage you to review our risk factors in our most recent quarterly report on Form 10-Q that was filed today and can be found on our website at ardelyx.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 Chief Executive Officer, Mike Raab, will begin today's call with opening remarks and an overview of the company's progress during the second quarter of 2023. Next, Susan Rodriguez, Chief Commercial Officer, will provide an update on the launch of Ibsrela. Justin Renz, Chief Financial and Operations Officer, will conclude today's prepared remarks with a review of the company's financial performance during the second quarter ended June 30, 2023, before we open the call to questions. With that, let me pass the call over to Mike. Good morning, everyone, and thank you for joining us on the call. I'm really pleased to be here today and along with Susan and Justin, to share with you the progress we've made over the past quarter. At the midway point of 2023, we're excited about the critical milestones we've achieved, the continued execution of our priorities, and the important two quarters ahead of us. Ibsrela is making significant inroads in the IBS-C market as healthcare practitioners and patients recognize the benefits of its novel mechanism profile. Our growth rate accelerated with net sales revenue in the second quarter of $18.3 million, reflecting a 61% increase in net sales revenue over Q1. This performance is the result of the incredible efforts of a team that is fully engaged in the field, calling on HCPs and articulating the unique value proposition that Ibsrela offers patients who are in need of a new treatment option. At this stage of our commercialization of Ibsrela, we're excited to provide revenue guidance for the very first time. We currently expect Ibsrela net sales revenue for 2023 to be in the range of $72 million-$77 million. Physician adoption, patient need, and positive treatment experiences, as well as a favorable access, are the fundamentals driving our Ibsrela growth, and we believe the strength of these forces continues to predict expanded use of Ibsrela. As we've said, physicians are finding Ibsrela to be an important treatment option for their patients with IBS-C. Patients are experiencing positive results and refilling their prescriptions. Access to Ibsrela is favorable, enabled by our best-in-class patient services program, ArdelyxAssist. We are confident in the future performance of Ibsrela, we hope that this guidance will offer better insight into our expectations for this product in the market. As it relates to XPHOZAH, meaningful progress has been made since we spoke in May. First, as we announced mid-May, the FDA had set the review, full review date for XPHOZAH of October 17th, we expect to launch XPHOZAH in the fourth quarter of this year as quickly as possible following approval. Market awareness, interest, and intent to adopt XPHOZAH is high. We will have comprehensive sales, medical affairs, patient services, and payer access support in place at launch. As we get closer to launch, we will share more details on our expectations for XPHOZAH and our launch plan to drive uptake and long-term success. Second, as you may have seen, a bipartisan bill was introduced last week in the House of Representatives by Buddy Carter, Carol Miller, Annie Kuster, and Terri Sewell, that would delay the implementation of the oral-only policy under the Medicare ESRD Prospective Payment System, or PPS, through January 1st of 2033. The introduction of this bill is an important first step in extending the exclusion of the oral-only ESRD drugs from the PPS. Currently, oral-only phosphorus-lowering treatments, which XPHOZAH would be considered upon approval, are scheduled to enter the PPS beginning in January of 2025, eliminating separate payment under Medicare Part D for the approximately 60%-65% of CKD patients on dialysis who are covered by Medicare. We believe this important legislation is in the best interest of patients, and we join the entire kidney community, advocates, patients, nephrologists, and dialysis providers that support the efforts to advance it. Congress, taking action to extend this exclusion, as it has done three previous occasions, will ensure that CKD patients on dialysis continue to have access to personalized care and innovation. Pending approval of XPHOZAH by the end of this year, within two years, Ardelyx will have launched two highly differentiated commercial products in markets for patients with significant unmet medical needs, twice delivering on the vision of Ardelyx, a feat few biotechnology companies have ever accomplished. Susan will now talk through the market dynamics and key performance metrics that are driving our success and accelerated sales growth for Ibsrela. Susan? Thank you, Mike. 15 months into the launch of Ibsrela, we are establishing a strong early market position, disrupting the IBS-C market by addressing the need for a novel mechanism treatment option. With a strong field force of more than 60 reps having daily interactions with the top writing IBS-C HCPs, we continue to focus on driving both breadth and depth of Ibsrela writing across HCPs for their patients who can benefit from a novel treatment approach. Our omni-channel digital tactics further amplify our commercial presence, enabling continuous engagement with existing writers as well as expanding awareness to cultivate new writers. With new writers continuously being added and existing writers increasing their prescribing, Ibsrela is redefining the treatment landscape. Our Q2 sales performance and revenue growth over Q1 reflects the growing uptake of Ibsrela and the opportunity we believe this drug offers for a meaningful subset of patients that, up until the launch of Ibsrela, had limited treatment options. This market is highly promotion sensitive, our market presence is strong, and the value proposition of Ibsrela is resonating with HCPs and patients. The May 2023 Launch Dynamics Tracking Report, published in Q2 by Spherix, an independent market research firm, provides a view of the market response to Ibsrela based on a monthly launch tracking survey across a sample of GIs. The May 2023 findings reported, based on the 76 GIs surveyed, that 91% rated Ibsrela as an advance over existing therapies. Additionally, of the subset of respondents who reported using Ibsrela, 98% reported satisfaction with treatment. The May 2023 Spherix survey results also provide a view of the strength of our targeted commercial presence in high IBS-C writing HCP offices, with 74% of survey GIs reporting seeing an Ibsrela rep, of which the majority reported seeing a rep within the last 3 months. These results align with the persistent growth that we are seeing in both new and refill prescriptions, and the feedback we receive daily from HCPs. HCPs are interested in Ibsrela, are engaging actively with our sales team, responding to our omni-channel communications, adopting Ibsrela, and continuously expanding their use across their practice based on their favorable treatment experience. Momentum is strong and the potential is high. We believe the opportunity for this drug to deliver sales for Ardelyx of $500 million or more at peak is very real. Our commercial presence is strong and making an impact. The novel mechanism and clinical profile resonate with physicians. Patients are gaining access to the drug and seeing positive results. The need is clear, the opportunity is clear, the product is performing, and the team is executing at the highest level. Commercial capabilities at Ardelyx are strong, proven, and mobilizing to be prepared to launch XPHOZAH. if approved in the fourth quarter of this year. Marketing, distribution, payer access, and patient services commercial ramp has been ongoing, with the build-out of the nephrology sales team now underway. Upon its approval, XPHOZAH, like Ibsrela, will be a novel mechanism therapy entering into an established therapeutic area with limited treatment options that is highly accessible via a targeted focus on a concentrated number of HCPs. Our strategy centers on treating nephrologists with a product positioning directed at patients with unmet medical needs and a path to access to bring this first-in-class phosphate absorption inhibitor, XPHOZAH, to patients. I look forward to continuing to report on our Ibsrela performance, as well as sharing more details on the XPHOZAH launch in the near future. With that, I will hand it to Justin. Thank you, Susan. Our second quarter of 2023 reflects positive momentum on a number of financial metrics: accelerated sales growth, improvement to our gross to net margin as compared to last quarter, careful monitoring of cash expenditures, and strengthening of our balance sheet in the methodical manner we have taken over the past several quarters. I will walk through those metrics now and then discuss the guidance we provided today for Ibsrela net product sales in 2023. In the second quarter of 2023, we had total revenue of $22.3 million, compared to $2.5 million in the second quarter of 2022, reflecting increases to both our net product sales of Ibsrela and our product supply and licensing-related revenue. As previously mentioned, we had net product sales of Ibsrela in Q2 2023 of $18.3 million, which is significant 61% quarter-over-quarter growth from the $11.4 million we reported in the first quarter. As a reminder, in the second quarter of 2022, our first full quarter of sales following launch, we reported net product sales of $1.6 million. We also reported $4 million in product supply and licensing-related revenue in the second quarter of this year, compared to $1 million in the second quarter of 2022. Research and development expenses were $8.3 million for the quarter ended June 30, 2023, which is a decrease of $1.4 million from the $9.7 million for the same quarter last year. Expenses in the prior year reflect higher clinical manufacturing expenses, as well as costs associated with our appeal at the FDA's July 2021 Complete Response Letter on the NDA for XPHOZAH. We saw our gross to net margin improve in the second quarter when compared to the first quarter. As we expected, as healthcare plans reset in the new calendar year, our gross to net was somewhat higher in the first quarter than it had been in the third and fourth quarter of 2022. We were pleased to see that our gross net improved in the second quarter of 2023 to be approximately 28%. We anticipate the gross to net margin to continue to be in the high 20s for the remainder of 2023. Selling, general, and administrative expenses were $27.2 million for the second quarter of 2023, an increase of $8.3 million when compared to the $18.9 million for the same period of 2022. The increase was primarily due to the increased costs associated with the continued commercialization and growth of Ibsrela. For the quarter ended June 30, 2023, we had a net loss of approximately $17.1 million, or $0.08 per fully diluted share, compared to a net loss of $26.9 million, or $0.19 per share in the second quarter of 2022. The net loss for the quarter ended June 30, 2023, included $4.2 million in combined non-cash expenses from share-based compensation and non-cash pensions expense. As of June 30, 2023, we had total cash, cash equivalents, and short-term investments of $127.6 million, as compared to $123.9 million at December 31, 2022. This reflects $11.6 million we raised during the quarter through sales of approximately 3 million shares of common stock under our ATM program. We will continue to be patient and explore further opportunities to raise additional capital for the company. I'm now going to walk through some of the details of our financial expectations for the next 12 months. First, as you saw in our press release this morning and as you heard from Mike, for the first time, we've shared full-year net sales revenue guidance for Ibsrela. 15 months following the launch, we continue to see sales trends moving in a steady, positive direction. Patients are refilling their prescriptions, previously writing HCPs are finding new patients, and we have new HCPs writing every day. Our strategy to grow depth and breadth of writers is working. We are also gaining visibility into the patterns and dynamics of this launch each day, enabling us to make more firm projections. We currently expect net improve Ibsrela sales revenue for full year 2023 to be between $72 million-$77 million. At the end of the 2nd quarter, we reported year-to-date 2023 net sales revenue of $29.7 million. This full-year guidance range represents thoughtful consideration of continued growth, consistent with the volume of new prescriptions we've seen, a favorable growth trajectory for refill prescriptions, and strong demand and interest for this novel treatment. We have confidence in Ibsrela's potential. We continue to believe that Ibsrela can generate $500 million or more in net sales revenue at peak. In addition, I wanted to address a question we received related to Symphony Script tracking data. As we sought to understand the differences between our reported revenue and the Symphony Script data, we've identified that numbers reported by Symphony include prescriptions from the pharmacy that fulfills prescriptions for our patient assistance program. Ardelyx does not receive revenue from patient assistance program prescriptions. For this reason, the Symphony data does not directly tie to our reported revenue. In addition, as Susan shared, we will begin investing this quarter to prepare for the launch of XPHOZAH in the fourth quarter, pending approval. When we launch XPHOZAH, if approved and as we ramp up, we expect incremental expenditure to be approximately $20 million per quarter. We hope to quickly drive uptake and establish a position for XPHOZAH in the hyperphosphatemia treatment landscape. As we have discussed in previous quarters, we will continue to strengthen our cash position by looking at all options available to us, including non-equity solutions. As a reminder, we expect to recognize a $2 million milestone payment in the third quarter from our partner in China, Fosun Pharma, following the acceptance of the NDA for tenapanor for hyperphosphatemia, which we announced earlier in July. In addition, assuming the approval of tenapanor for hyperphosphatemia in Japan, we will earn another milestone payment later this year from our Japanese partner, Kyowa Kirin. Led by the continued growth of Ibsrela, we are in excellent financial position as we prepare for the XPHOZAH launch. We are confident in our ability to fund our operations, and we will continue to make thoughtful decisions to maximize shareholder value. With that, I'll hand it over to Mike. Thanks, Justin. Q2 was another quarter where Ardelyx achieved important milestones, delivered on our priorities, and strengthened our business. We are excited with Ibsrela's performance and are beginning to see upside for this product. The team behind Ibsrela is focused, dedicated, and driven to help the patients that we serve. They have set a standard for the type of success and innovative thinking that can be expected from the Ardelyx commercial organization. Demand for XPHOZAH is high, and we believe we have the potential for a strong launch after approval. We continue to support our partners' regulatory submissions while engaging in discussions for further international expansion and looking at all the options available to us from a financing perspective. Before closing, I would like to take a moment, as I always do, to thank the incredible team Ardelyx. Your talent, your passion, and commitment are the driving force behind the performance that we've shared today. I will now open the call to questions. Operator? Yes, thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. At this moment, we will pause momentarily to assemble the roster. The first question comes from your Yigal Nochomovitz with, Citigroup. Hi, Mike and team. Thank you very much. Could you just spend a little bit more time talking about the assumptions behind the newly introduced guidance range? Obviously, it implies a quarterly growth or quarter-over-quarter growth potentially lower than what you saw 2Q over 1Q for the back half of the year. If you could just delve into that a little bit more. Then on the legislation with the bundling, can you talk about the likelihood that that legislation will come to fruition and keep the orals out of the bundle to 2033? Thanks. Sure. Let me start with the last part first, is I feel like starting to sing Schoolhouse Rock! as to how a bill becomes a law. I can't give you any specific percentages on the probabilities. This is such an important first step. You know, what we're focused on is making sure that the team is ready to launch in the fourth quarter, pending approval. We'll take it step by step. I think this is such a strong message of what Congress has previously done three other times, that it gives me some hope and optimism. I can't give you specific numbers. As it relates to the guidance, you know, as I said, Justin did, this is our first time giving guidance. We're going to take a very measured approach. I think as we look at how we've performed since launch, you know, there's different percentages growth quarter to quarter, so we're not going to just straight line things. We're going to take these in a stepwise fashion, as we have with this, and I think this is a measured and appropriate first step for guidance. Justin, anything to add to that? No, Mike, that's excellent. Again, we're really encouraged by Q2's quarter-over-quarter growth, and be measured, thoughtful, and, and really, Susan and the commercial team are doing an amazing job, and we'll keep you apprised of our progress. Thanks. Just one, one quick question on the, on the Symphony. The patient assistance program, Can you say what percentage of the, the, the script volume coming out of Symphony was driven by the, the PAP, for which you don't, book revenue? Yeah, I mean, it's going to vary depending upon all the scripts, right? There's not a specific percentage that we can say is going to be true last quarter to the next one, but it's just that it's a PAP program that shows up in Symphony. Okay. Thanks, Mike. Sure. Thank you. The next question comes from Dennis Ding with Jefferies. Hi, good morning. Congratulations on the progress, and thanks for taking our questions. two, if I may. you know, for exposed, you know, what are your expectations into the October PDUFA, including how the label could eventually shake out and how that would impact your positioning in the market? Then, you know, number two, ever since the resubmission and acceptance, you know, how have engagement with the FDA been? What more needs to happen in the next two months into the PDUFA? Thank you. Sure. I think as we shared when we said that we had refiled the NDA and as well with Dr. Stein's letter, and frankly, all the discussions that occurred at the AdCom, we believe the likelihood is that this is going to be an indication that says something along the lines when binders are insufficient or intolerable, which is the majority of patients, as, as everyone knows. I think that secures a very powerful second-line spot where all the binder, you know, it's what? Almost 80% of patients are above range in any six-month period of time. We feel strong and feel good about if that's the indication ultimately ends up being. There's not really been any substantive communication with the agency, didn't anticipate any. You know, traditionally, you begin your negotiations on your package insert, a month or so prior to your PDUFA date. If you recall, in our last go around, we negotiated the majority of the package insert, before what occurred to ultimately end up in the CRL. I don't know how much relitigation is going to have to be required for the PI since that's already been done, but that's what we would anticipate. Thank you. Thanks, Dennis. Thank you. The next question comes from Laura Chico with Wedbush. Hey, good morning, guys. Thanks for taking the question. I just wanted to circle back on the guidance real quick here. What I guess maybe if you could explain, Mike, what gave this? Why was now a good time to start providing guidance? Was there anything that's changed, kind of in the trajectory or anything there? Yeah, rationale around why now is a good time for guidance. Well, we said that we would do it in about 15-18 months from launch as we learned more about the data and got more comfortable. I think as Justin said in, in his opening remarks, that we're gaining confidence in those numbers being representative of, of, of where we're going. That's really what generated it. It's, you know, we're 15, 16 months post-launch, and it just seemed like the right time. Justin, anything to add? Okay. No, I think that's perfect. Laura? Thanks, guys. Okay, then if I could follow up on one, just with respect to the legislation. I don't think we've seen text on the bill yet. I know you mentioned we've already had the can kicked down the road three times previously. I guess just on the off chance the bill does not progress, I'm just wondering if you could kind of walk through mechanistically what would actually happen if it were included in the bundle. I guess I'm trying to work through the scenario of, you know, potential impacts during a transition. Yeah, thanks, if there's any color there you could provide. Sure, you know, to see the text of the bill, you can go to Buddy Carter's website. congressman from Georgia, and the bill is there. As it relates to the bundle, you know, it's, it would end up being January 1st of 2025 as it goes in, you ultimately are in a 2-year TDAPA period, like other drugs that have gone into America, like Sensipar and Parsabiv. They collect the data from that 2-year period, then the following year, they increase their base rate based upon a calculation on those data that they collected, to increase the base rate to cover the cost associated with anything going into the bundle. I think what makes these oral only so unique is that they are not given during the provision of dialysis. If you recall, or as we've talked, that in fact, you're not allowed to eat when you're on dialysis, certainly our package insert and others say you have to take your drugs while you have food, right? Whether it's a meal or a snack, in the case of binders, for us, it's one small pill before breakfast and whether it's dinner or lunch, your next largest meal. It makes it a vexing issue for the providers to actually accomplish what they need to when they're not going to be giving these drugs during the provision of the dialysis services. That's very helpful, Mike. Last question, I'll hop, hop back in the queue. In terms of ATM utilization, I think there was about $11 million generated this quarter. Could you just comment on kind of appetite for further use of the ATM? Thanks very much. Sure. Justin? Yeah, thank you. We sold approximately 3 million shares during the second quarter for gross proceeds of approximately $11.6 million. As we discussed in our prepared remarks, we're going to be very methodical and patient in our capital raising ideas, so we're open-minded to non-equity solutions as well as we continue to explore other options across both business development, debt and other non-equity solutions. It's certainly a tool in our toolbox, but we are going to be patient and methodical as we've tried to be in previous quarters, as we've demonstrated through the Washington trial. Thanks very much, guys. Thank you. The next question comes from Matthew Kaplan with Ladenburg Thalmann. Hi, good morning, guys, and congrats on the Ibsrela results for the quarter. Nice, nice results. Just wanted to dive in a little bit more to your preparation for the XPHOZAH launch, you know, going into the October 17th PDUFA date. Give us a little bit more color in terms of how you're thinking about the build-out of that, that sales team, and will it look like the Ibsrela team or in terms of size and give us a little bit more color as you, as you prep for it. Sure. Susan? Yes. Hi, Matt. We are, as we mentioned, in our narrative, we have, you know, mobilized to prepare for the launch of XPHOZAH. We have the capabilities to ramp up all the marketing, distribution, payer engagement, patient services. Your question on the sales force, we are fielding a dedicated nephrology sales force. This market, as the Ibsrela, as we have noted around the IBS-C market, has a very concentrated number of doctors with around 8,000 HCPs, accounting for the majority of hyperphosphatemia scripts. To really reach that target group, we are fielding a group of about 60, which we believe really will develop a very, you know, establish a strong sales force presence for XPHOZAH with a dedicated nephrology sales force across the country. It really is a sales force comparable in size to our Ibsrela sales force. However, it is dedicated to the nephrology call point, and we are experiencing a really high level of interest, because we're interviewing, you know, to fill those spots as we speak, with very seasoned salespeople, coming in with nephrology experience and established relationships. We're quite enthusiastic about launching this dedicated team and we will be prepared, you know, to be able to launch as quickly as possible upon the approval of XPHOZAH in the fourth quarter. Matt, the thing I would add to that is, if you recall, before the CRL, we had an extensive disease awareness campaign and a, and an organization that was feet on the ground doing that. What's been remarkable is to see the continued awareness that has built even since then, and the anticipation for it. You know, we're, we're enthusiastic about what we're going to be launching into. Okay. That's, that's, that's helpful. Follow on to that is, I guess, why should, should the XPHOZAH launch look like the Ibsrela launch, or why should it look different, given, I guess, given what you just said, Mike, in terms of the level of awareness, et cetera? What should our expectations be in, in terms of the trajectory of the launch? Yeah. I, I think what we'll do is hold on that. You know, we will spend some more time, more dedicated time with everyone as we get closer to the PDUFA date, telling you more about our expectations and, and how that's going to look. You know, I think we're still gathering perspectives on it. We think it's going to be a positive response to the launch, quantifying that at this stage is probably premature. Okay. Fair enough. Last question, in terms of the prep for the launch, I think in your prepared remarks, Justin, you mentioned incremental increase in SG&A. Can you just go over that again and how we should think about that? Yeah. Thank you, Matt. We'd like to guide that we anticipate an additional incremental $20 million in combined SG&A spend, as well as some additional cloud supply spend. Starting in this quarter and going on, that will be the incremental cost. Of course, once the drug is in the market, we're generating revenue that will be offset by the proceeds from that revenue. We're guiding you to an incremental $20 million a quarter, respectively. Great. Thanks, thanks again. Thanks, Ben. Thank, thank you. Once again, as a reminder, please press star, then one if you would like to ask a question. The next question comes from Peyton Bohnsack with TD Cowen. Hi, guys. Thanks for taking our questions. I guess a little more on the data that you mentioned. I'm assuming that you have to apply for this. It's my assumption that you guys would apply for this if it wasn't put in the bundle, however unlikely that may be? Yeah, I mean, it, whatever the process is to get those data collected, we would certainly participate in that. Gotcha. Then I guess as kind of like a follow-up, how, how have kind of discussions been going for other areas, like specifically Europe? Have you begun to move forward with any of those? If you have any timelines, that'd be great. We have ongoing discussions in all the unpartnered territories, whether it's IBS-C in Japan, Europe, the rest of the world. Those conversations continue. Some, you know, there's better trajectory than others. No specific timeline that I can give you in terms of when anything like that would be finalized. Great. I guess just, like, one final one for me. Seeing how you guys are, you know, pretty deep into the Ibsrela launch now, and XPHOZAH is probably going to get approved and, and then launched, could you maybe talk about your long-term P&D or internal R&D strategy? Would you guys restart your earlier-stage pipelines, or would you be looking to license something? Yeah, I mean, it's, it's a great question. We, as we've said, there's a couple of programs that are sort of laying fallow at this point, both the metabolic acidosis, the hyperkalemia program, to speak of two, that with sufficient capital, obviously looking at those, and restarting those would be a, a, a prudent thing to do. I think what we're also demonstrating, Peyton, with what we've done with Ibsrela, and I'm confident we'll demonstrate with XPHOZAH, is an extraordinarily powerful commercial organization, that should be the partner of choice for new and upcoming drugs in IBS and new and upcoming drugs in dialysis and renal. So we'll continue looking across multiple ways of strengthening our pipeline, as we get to a place where we have a, a strong enough balance sheet to do that. Great. Thank you very much. Appreciate all the color. Thank you, Peyton. Thank you. This concludes our question and answer session. I'd like to return the conference back over to President and CEO, Mike Raab, for any closing comments. Thank you, everyone, for joining us this morning. I look forward to providing you with further updates in the weeks and months ahead. We have a number of milestones that I look forward to sharing, including an approval of XPHOZAH in October and continued growth of Ibsrela. With that, we can close the call. Thank you, operator. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.