Ardelyx Receives FDA Nod; Shares Pop 14.5%

Ardelyx (ARDX) announced that the U.S. Food and Drug Administration (FDA) has issued a Complete Response Letter (CRL) related to the company’s New Drug Application (NDA) for tenapanor. The drug is designed to control serum phosphorus in adult patients with chronic kidney disease (CKD) who are on dialysis.

Following the news, shares of the biopharmaceutical company, which is focused on the research, development, and commercialization of innovative medicines to improve treatment for patients with kidney and cardiorenal diseases, gained more than 20% in Friday’s pre-market trading.

According to the CRL, though the FDA agreed that “the submitted data provide substantial evidence that tenapanor is effective in reducing serum phosphorus in CKD patients on dialysis,” they consider the treatment effect as “small and of unclear clinical significance.”

In order to receive tenapanor’s NDA approval, Ardelyx must “conduct an additional adequate and well-controlled trial demonstrating a clinically relevant treatment effect on serum phosphorus or an effect on the clinical outcome thought to be caused by hyperphosphatemia in CKD patients on dialysis,” as required by the FDA. However, no safety, clinical biopharmaceutics, CMC or non-clinical issues were identified in the CRL. (See Ardelyx stock charts on TipRanks)

Disappointed with the letter, Ardelyx CEO Mike Raab said, “We continue to believe tenapanor represents an important, first-in-class treatment option for patients with elevated phosphorus. We do not agree with the FDA’s subjective assessment on the clinical relevance of the treatment effect of tenapanor in our studies which met all clinical endpoints agreed upon by the FDA. In our view, the serum phosphorus lowering data generated with tenapanor in all of our clinical studies is meaningful and clinically significant. We will work with the agency to address the issues raised and, to the extent possible, find an expeditious path forward.”

Ardelyx said that the NDA was supported by a comprehensive development program, which involved more than 1,000 patients and included three Phase 3 clinical trials, all of which met their primary and key secondary endpoints.

Following the news of an earlier deficiency letter, issued by the FDA in response to tenapanor on July 19, Citigroup analyst Samantha Semenkow reiterated a Buy rating but deceased the stock’s price target to $7 from $16.

The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating. That’s based on 4 analysts suggesting a Buy and 2 analysts recommending a Hold. The average Ardelyx price target of $4.17 implies 139.7% upside potential to current levels. Shares have decreased 70.4% over the past year.