Q3 2023 Ardelyx Inc Earnings Call

[music].

Okay.

Good day and welcome to the Ardella third quarter 2023 earnings Conference call.

All participants will be in a listen only mode.

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After todays presentation, there will be an opportunity to ask a question.

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Please note this event is being recorded.

I would now like to turn the conference over to keep the Maui, Vice President of corporate Communications and Investor Relations. Please.

Please go ahead.

Thank you good morning, and welcome to our third quarter 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.

Uh huh.

During this call really nice forward looking statements are subject to risks and uncertainties. Our actual results may differ materially.

We encourage you to review the risk factors in our most recent quarterly report on Form 10-Q that was filed today and can be found on.

Wednesday at our Bell Satcom on.

On the left to update these forward looking statements in the future.

Disclaim any obligation to do so.

Yes.

I'm, President and CEO, Mike Raab will begin today's call with opening remarks.

Our restaurants third quarter right now.

So as you heard Reed Chief commercial officer, who will provide it.

Appointment of Australia, and a launch at the Parliament approval earlier this month.

Chief Financial operations Officer will conclude today's prepared remarks, where they're either on the Companys financial performance during the quarter ended.

Remember 32023 before we open up.

With that let me pass it all over again.

Good morning, everyone and thank you for joining us on the call I'm very pleased to be here. Once again, just a short few weeks after we celebrated the approval of exposure.

With this approval we now have delivered on our mission to provide patients with medicines that matter for the second time. It is something I am immensely proud of.

<unk>, Susan Justin and I will share details on the performance from the third quarter as well as important updates from the first couple of weeks falling in the fourth quarter. Following the announcement of exposes approval.

Before I hand, it over to them, let me share a few of my thoughts on the third quarter and what we expect in the near future for our Dallas.

First it's relevant mentioned continues our quarter over quarter growth in Q3 was driven by a clear need patients have for a new medicine to address the challenging and sometimes and trackable symptoms experienced by patients with Ibs C.

It is relative is establishing a unique role in what has traditionally been thought to be a challenging market to penetrate.

We are demonstrating that when you have a novel mechanism products with a strong safety and efficacy profile, but it's benefiting patients and when you're thinking differently about marketing innovative products that you can disrupt markets.

Second exposure is ready for success.

As Susan discussed on our approval call awareness interest and intend to adopt expose our high among the nephrology community.

The response to our approval has been nothing short of amazing.

It is also humbling as we now have the responsibility to deliver for patients.

We've received words of congratulations from across the kidney community with nephrology expressing their excitement about having this novel therapy available to prescribe for their patients.

As we've shared there is significant pent up demand.

Strong uptake at launch.

Our sales team is already in the field and we expect them to have exposure at our distributors. Shortly after the conclusion of ASN kidney week.

The new era for managing hyperplastic teammate lung kidney patients is here.

Finally, we are well resource for the foreseeable future.

Carefully and thoughtfully finance the company.

Strong cash position as a result.

Sufficient to fund the commercialization expose that support the critical ongoing investment in Israel.

We will also begin investments in R&D in the coming quarters as we work towards the next phase of our Dallas.

I will now hand, it to Susan who will share more on its relative performance and additional details on our launch activities for exposure.

Susan.

Thank you Mike It is great to be back today speaking about Isabella and now it's clear that we continue to disrupt the established Ibs D market with Q3 revenue for Israel at $22 3 million, reflecting a 22% increase versus Q2.

First in class drugs offering meaningful benefit to patients who have been in need of a novel approach.

As I've noted on previous earnings call our growth is consistent.

System, New prescriptions are growing retail prescriptions are growing we continue to grow new writers and existing riders are expanding their use these results reflect the extent to which physicians continue to identify more and more of their patients as candidates for thriller. The patients are getting access just gela and that their treatment.

Sirius is favorable.

Our team's efforts are supported by the strong clinical data package for Israel, which we continue to expand just recently at the American College of Gastroenterology meeting in Vancouver, We had a significant commercial and medical presence, which included a well attended product theater as well as two posters and an oral presentation.

And data analysis about since German spot during treatment with its rollout.

Our research was incredibly well received.

Our poster titled <unk> can improve abdominal symptoms independent of changes in bowel movement frequency in adult patients with Ibs C.

Third by notable opinion leaders, Dr Brenner and Dr. Tony Russell as well as our Delek scientists was recognized with the presidential poster award by the ACG abstract selection Committee.

What is your less than 5% of all posters.

Distinction recognizes high quality unique research.

Our dedicated team is fully engaged with the physician community and carving out a meaningful role for it through all of them on the Ibs C patient population.

Based on the uptake we are seeing it is clear that the potential for Australia is high among this target group of patients who are in need of a novel option and that Israel is on pace to achieve high single digit market share position across the 5 million script market over time.

With the price point, we established within its market enable by the value of its innovation and the favorable uptick dynamics driven by the patient needs. We are well positioned for success with a thriller.

Turning to expose that.

During our call a few weeks ago I characterize in detail these dynamics and our commercial approach.

I will summarize those briefly before discussing our pricing and access strategy in more detail.

The market dynamics are.

Our favorable Hyperpotassemia is a well established therapeutic area with treatment center and globally recognized treatment guidelines.

80% of the estimated 550000 patients with Teekay beyond dialysis in the U S are treated with a prescription therapy in an effort to control their elevated levels of serum phosphorus.

Those being treated it has been shown that 77% are unable to consistently maintain target level of serum phosphorus over a six month period.

The market is primed and ready break suppose that nearly 70% of surveyed Nephrologist report a high or very high need for a new treatment option and a mom with prologis the winter of new treatments for hyper fast the team here three quarters mentioned snap in order to find me.

Survey Nephrologist rate the novel mechanism efficacy tolerability and dosing attributes favorably and 59% reported that they intend to adopt expose that within the first six months of product availability.

Our Dallas is well positioned to capitalize on this opportunity positioning first cause I will center on integrating and novel blocking mechanism therapy for their binder treated patients who have an inadequate response or are intolerant to any Joseph binder therapy.

What pricing for <unk>, so that will be set at $2960 per month of therapy, reflecting the value extends it brings to patients in the context of the CK D market pricing landscape.

We have built a dedicated nephrology sales force of 60 reps that cover the approximately 8000 nephrology health care providers, who write the majority of the Hyperpotassemia prescription or.

Our distribution network is also in place and we'll provide full coverage across the U S are likely to optimally to our access strategy.

Our comprehensive patient services program, our Dallas as Vince has gone library. So is that and is receiving call product is on track to be in the channel following ASN kidney week in early November.

As I outlined in our approval call. There are three foundational component to our go to market approach centered on enabling us prologis to integrate first in class phosphate absorption inhibitor expos that into the treatment regimen of their buying or treated patients who have had an inadequate response or cannot tolerate any joseph bind her therapy.

First expose that is novel.

It is the first in class phosphate absorption inhibitor. It is not a binder. This is a significant innovation for patients who up until now have only had one treatment option for managing hyper hospital.

Second patients are in need of innovation. The vast majority of the 550000 seat 80 patients I know who are treated with a phosphate binder to lower their phosphorous levels are unable to consistently achieve or maintain target level.

And third our Dallas its commitment to patient access and affordability patients prescribed <unk> chosen will have access to comprehensive prior authorization support and affordability program.

Our galaxy disconnect providers payers and specialty pharmacies to help facilitate prior authorization and other administrative processes.

For commercial patient co pays will be covered at the level of 100% patients unable to afford expose that can apply for our patient assistance program that provides drug at no cost to patients who meet the program's Brian eligibility criteria.

I'd like to further characterize the access landscape and our access strategy as we received a number of questions. Following our approval call two weeks ago.

Expose that like Israel will be available to patients through a prior authorization process.

We have been engaged with payers for several months to educate them on X those that its novel mechanism of action clinical data and now the approved label.

Over the coming months parents will issue their coverage policy, we anticipate that the requirement will be depositions of tasks that patients have not had an adequate response to their binder treatment or if they're not able to tolerate binder therapy.

While the specifics around the requirements will vary by plan. It is important to note that the majority of patients treated with binders today by Nephrologists meet these criteria.

What will be most important is that nephrologist prescribing expose the based on patient need and integrate the prior authorization work stream into their office practice.

That patients prescribed <unk> those that can access expose them.

Neurologists are well accustomed to the prior authorization processes at several products, commonly used for patient with TKD anti out that require them.

Given the limited agents available today to treat hyperpotassemia, the recognized unmet patient need and unopposed position of expose that as the only non binder next line option for patients we anticipate that expose it will be accessible via the prior authorization pathway early in the launch.

We do not intend to contract with payers and anticipate and Jenny and persistent uptake I'm expose that by H B P based on addressing the patients' unmet needs and effectively engaging in the prior authorization administrative process.

They expose the Salesforce has been in the field and will be joining the nephrology community. This weekend at the ASN kidney week in Philadelphia.

In parallel the it's relatively L. T maintains their singular focus on disrupting the Ibs D market also with a first in class therapy addressing important unmet patient needs.

They are telling us commercial team is executing at the highest level with teams of experienced dedicated and highly capable individuals who are delivering on our delek admission everyday addressing important unmet treatment needs through innovation with that I will hand, it to Justin.

Thank you Susan.

Our Dell has delivered on a number of key milestones since August.

Continued growth of its rollout across all key metrics.

The approval is imminent commercial launch.

The expansion of our commercial organization to support it.

The approval of can add more fiberglass a team in Japan.

The approval of its role in Hong Kong for Ibs C, which we announced this morning, and an amended loan agreement, which provides additional cash and flexibility to fund our future growth.

We find ourselves with a very strong cash position, we are well resource to support our ongoing operations, including the commercialization of both of our in market products.

With that backdrop, I will discuss the specifics of our financial performance.

In the third quarter of 2023, we had total revenues of $56 4 million compared to $4 9 million in total revenues during the third quarter of 2022.

The increase request and drove net product sales growth as well as milestone and collaboration payments from our international partners.

Next let me take you through the relative contribution of our revenue components during the quarter.

First as previously mentioned, we have U S. Net product sales have been strong in the quarter ended September 32023 of $22 3, Million% to 22% increase from $18 3 million, we reported in the second quarter.

As a reminder, in the third quarter of 2022, we reported <unk> net product sales of $4 $9 million.

Second we reported other net product supply revenue of $2 $1 million related to our international partners. This is compared to 92000 and product supply revenues third quarter of last year.

Third we recorded $30 million in licensing revenue as a result of milestone and contract amendment payments.

Following the approval of an abnormal hyperpotassemia in Japan in September.

Fourth we recorded a $2 million milestone payment from Fosun pharma following the NDA submission for hyper fast opinion in China, which we announced back in July.

And finally, we recorded a small amount of royalty income from Knight pharmaceuticals, as we receive a percentage there are drilling their product sale in Canada.

Overall, our revenues were in line with our expectations regarding U S net product sales as well as well as milestone payments related to our international collaboration partners.

Looking ahead, we currently expect net sales revenue in the U S for the full year of 2023 to be between 76 and $78 million.

Please note that this does not include any anticipated sales mix towards the partner milestone payments or product supply revenues.

In addition, the FDA approval of expose it triggered a $3 million milestone payment from Boston, which will be recognized as revenue.

We received in this current fourth quarter.

At the end of Q3, we reported year to date 2023 net sales revenue of approximately $52 million are raised and narrowed our full year guidance range of $76 million to $78 million represents our expectation of continued consistent right.

We are still early in our launch and unable to fully anticipate how seasonality maybe pointing to performance during the fourth quarter. So we will continue to take a measured approach as we guide you.

Performance.

Research and development expenses were $8 6 million for the third quarter of 2023, which is an increase of $1 1 million from the $7 5 million in the same period last year.

Selling general and administrative expenses were $32 $7 million in the third quarter of 2023, an increase of $14 million from the $8 $7 million, we reported for the same period of 2022.

The increase was going to cost us.

It continued commercialization growth of Israel as well as launch preparation activities for <unk>.

As we mentioned during our second quarter call in August we anticipated costs associated with exposure would be incremental $20 million per quarter ramping up in the third quarter, and then being fully reflected in our SG&A expenses beginning in the fourth quarter. This year.

We had net income of approximately $6 6 million or three cents per fully diluted share in the third quarter of 2023 compared to a net loss of $22 9 million or <unk> 14 per share in the same period last year.

Our net income in the third quarter and three adults from $30 million milestone collaboration Amendment.

Here as well as increased sales and that's wrong.

From a cash perspective, we have never been in a stronger financial position of the company. Let me take a step back and tell you where we are how we got here what a neat.

First as you saw in the press release this morning.

September 32023, we had total cash cash equivalents and short term investments of $165 1 million as compared to $123 9 million at the end of 2022.

This reflects $58 4 million in gross proceeds that we raised during the quarter with sales of approximately four 8 million shares.

Common stock under our ATM program at an average selling price of $4 24 per share.

We also received a $2 million milestone payment from both.

Following the submission of an NDA for example, India, and China, which we announced back in July.

In addition to our cash as of September 32023.

Once a quarter and they're awesome REIT other contributing factors that I want to point out that significantly strengthens our cash position.

First we have received payment from kind of appearing for the $30 million receivable associated with the approval in Japan.

Also associated with that approval is a $5 million milestone payment we have received from healthcare royalty partners.

Finally, we drew 25 million from our loan agreement with <unk>.

A R or solar cap.

These items as well as the ongoing business collateral as of yesterday October 30, our cash and investments amounted to approximately $281 million when combined with access to additional capital or option B is a walgreen with solar and our continued financial discipline as a company.

Operator: Good day and welcome to the Ardelyx 3rd quarter of 2023 earnings conference call. All participants will be in a listen only mode. Should you need assistance please signal a conference specialist by pressing the start to follow by zero.

We believe that we are very well resource for the foreseeable future.

We have taken a very thoughtful disciplined patient approach to how we fund the company we.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask the question, you may press star than one on the touch tone zone. To withdraw your question, please press star, then two. Please note, this event is being recorded.

We are positioned to support continued investments in our in market products as well as beginning of investments in our pipeline programs.

We will continue to make thoughtful decisions that maximize shareholder value.

With that I'll turn it back to Mike.

Caitlin Lowie: I would now like to turn the conference over to Caitlin Lowie, Vice President of Corporate Communications and Industrial Relations at Ardelyx. Please go ahead. Thank you.

Thanks, Justin this is an exciting time at our dollars within a couple of weeks, we will have exposure at our distributors and ready for fulfillment to patients alongside them as rolla.

Caitlin Lowie: Good morning and welcome to our 3rd quarter financial results call. During this call, we will refer to the press release issue earlier today, which is available on the industrial section of the company's website at Ardelyx.com. During this call, we will be making forwarding statements that are subject to risk and uncertainty. Our actual results may differ materially, so subscribe. We encourage you to review the risk factors in our most recent quarterly report on form 10Q. So as file today, it can be found on our website at Ardelyx.com.

We are focused on execution this year and yet we are not done we have a lot of work ahead of us continuing the momentum we've established with this rollout.

Ensuring a successful launch of expose.

And looking ahead to next year, where we will begin investing for further growth.

We've shown that we can deliver on our promises we continue to strengthen our company and our balance sheet, we are well resources resource and excited about what is to come.

Caitlin Lowie: Following me, I would like to update you for looking in the future. We specifically displaying any obligation to do so, even our views change.

I want to thank the members of the investment community who've been alongside US on this interesting journey.

None of this would have been impossible without the dedication passion and the resilience of TMR Dallas.

Michael Raab: Our President CEO, Mike Rob, will begin today's call with the opening remarks in an overview of the conference progress during the 3rd quarter of 2023.

Thank you for what you do for patients every day.

I will now open the call to questions operator.

Susan Rodriguez: Next, Susan Rodriguez, Chief Commercial Officer, will provide an update on the performance of Australia and a launch of exposure that following its approval earlier this month.

We will now begin the question and answer session.

To ask a question you May Press Star then one on your Touchtone phone.

Justin Renz: Susan Ren, Chief Financial Operations Officer, will conclude today's prepared remarks with review of the company's financial performance during the quarter ended September 3, 2023, before we open the call to questions. With that, let me pass the call over to Mike.

If you are using a speakerphone please pick up your handset before pressing the keys.

If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

Michael Raab: Good morning, everyone, and thank you for joining us on the call. I'm very pleased to be here once again just a short few weeks after we celebrated the approval of exposure. With this approval, we now have delivered on our mission to provide patients with medicines that matter for the second time.

The first question today comes from Louise Chen from Cantor. Please go ahead.

Hi, congratulations on a strong quarter and thanks for taking my question I wanted to ask you. How are you thinking about gross to net for Expos.

Michael Raab: It is something I am immensely proud of. Today, Susan, Justin and I will share the tales on the performance from the 3rd quarter, as well as important updates from the first couple of weeks, in the 4th quarter, following the announcement of exposure as approval. Before I hand it over to them, let me share a few of my thoughts on the 3rd quarter and what we expect in the near future for our delegates.

And then also do you think there's a bolus of patients waiting for drug just kind of curious how you think about how fast the uptake might be especially in the last quarter of the year or do you expect more of the uptake to come in the first half of 'twenty 'twenty four.

And then last question I wanted to ask you was obviously a very strong cash position. What do you think your cash runway takes you out too. Thank you.

Michael Raab: First, its relevant momentum continues. Our quarter over quarter growth in Q3 was driven by a clear need patients have for new medicine to address the challenging and sometimes intractable symptoms experienced by patients with IVSC. It is relatively establishing a unique role in what has traditionally been thought to be a challenging market to penetrate. We are demonstrating that when you have a novel mechanism product with a strong safety enough because you profile that is benefiting patients and when you are thinking differently about marketing innovative products that you can disrupt markets.

Yeah. So let me ask Justin to address the first and last question first and then.

Susan please.

Uptake.

Great. Thank you Mike good morning movies.

Our gross to net for exposure.

Our commercial strategy will be very similar as well, which means that we don't expect significant rebating the payers other than the statutorily required rebates to certain government payers, which would obviously have a negative effect on our gross to net but in general.

Michael Raab: Second, exposure is ready for success. As Susan discussed on our approval call, awareness, interest, and intent to adopt exposure are high among the nephrology community. The response to our approval has been nothing short of amazing. It is also humbling as we now have the responsibility to deliver for patients. We've received words of congratulations from across the kidney community with an effervescing their excitement about having this novel therapy available to prescribe for their patients.

We expect it to be very similar to what we saw with its rollout there may be some seasonality our gross to net in our first quarter being perhaps.

Whilst the other quarters due to the resetting of commercial copay programs, but otherwise.

Very confident that it'll be in here certainly in the early year comparable to withdraw.

And then regarding our cash position you.

You may see in our 10-Q, which we filed earlier today, then we no longer have a going concern which means.

Our auditors are confident we have more than a year of cash for us we believe.

Michael Raab: As we've shared, there is significant pent-up demand and we expect strong uptake it much. Our sales team is already in the field and we expect to have exposed our distributors shortly after the conclusion of ASN's kidney week.

It is more than that we believe we have enough cash runway for for quite a while we can't simply proud because we're waiting to see how successful we are being close to launch or case quite confident our cash position.

Michael Raab: The new era for managing hyperpositimium on kidney patients is here. Finally, we are well-resourced for the foreseeable future. We carefully and thoughtfully finance the company and have a strong cash position as a result, sufficient to fund the commercialization exposed and support the critical ongoing investment in a drillup. We will also begin investments in R&D in the coming quarters as we work towards the next phase of our deluxe.

Susan.

Yes, we've been regarding the uptake that makes sense that you're exactly right. There is you know a very large group of patients today, who despite treatment with binders are unable to consistently maintain target levels and and patients that can't tolerate find her therapy. So there's clearly a nice opportunity there and now these.

Patients will have a new option, where they expose us I think what's important here is thinking about the integration of novel mechanism expose the into the Nephrologist prescribing pattern, you know how exactly they're going to integrate use of exposure across their patient groups. So it's always going to take some time for the <unk>.

Susan Rodriguez: I will now hand it to Susan, who will share more in Isabella's performance and additional details on the large activities for exposure.

Susan Rodriguez: Susan?

Susan Rodriguez: Thank you, Mike. It is great to be back today, speaking about Isabella and now Isabella. We continue to disrupt the established IBSC market with Q3 revenue for Isabella at 22.3 million, reflecting a 22% increase versus Q2.

[noise] community to adapt their practices now that they have an expanded treatment armamentarium, so given that and given our our promotional presence with nephrologists. We believe that the uptake of expose its really going to be really quite steady and consistent and did identify patients early that they believe are most in need of extended that.

Susan Rodriguez: This first-in-class drug is operating meaningful benefit to patients who have been in need of a novel approach. As I noted on previous earnings calls, our growth is consistent and persistent. New prescriptions are growing. Racial prescriptions are growing. We continue to grow new writers and existing writers are expanding their youth. These results reflect the extent to which physicians continue to identify more and more of their patients as candidates for a drillup that patients are getting access to a drillup and that their treatment experience is favorable.

And then based on your experience Christine to expand their use to those additional patients that they are quite aware today or are not meeting the target level I dislike binder treatment.

Thank you.

The next question comes from Dennis thing with Jefferies. Please go ahead.

Hi, good morning.

Susan Rodriguez: Our team's efforts are supported by the strong clinical data package for a drillup, which we continue to expand. Just recently, at the American College of Gallantarology meeting in Vancouver, we had a significant commercial and medical presence, which included a well-attended product theater, as well as two posters and an oral presentation on data analyses about symptom response during treatment with a drillup. Our research was incredibly well received. Our poster, titled, Tanapinar can improve abdominal symptoms, independent of changes in bowel movement frequency and adult patients with IBSC, authored by notable opinion leaders, Dr. Derrick Brenner and Dr. Tony Lembo, as well as our delic scientist, was recognized with the Presidential Posture Award by the ACG Abstract Selection Committee.

Two questions for me.

Number one maybe on the.

Congressional action to delay moving florals into the bundle can you comment if you haven't met with the C V O and what can you disclose when does from those discussions as it relates to expose the pricing under $3000 a month price would impact their cost estimates for removing for moving <unk> into the bundle versus.

Keeping them out and then number two on the withdrawal of guidance.

You know schemes space.

Off of scripts, which continue to generally grow week over week your guidance for the year. It seems a little bit conservative for Q4. So is there anything you can be expecting in the quarter is that investors are missing. Thank you.

Sure. Thanks for the questions Dennis.

So with any congressional action other than maybe what the CBO, we don't meet with them.

Susan Rodriguez: Awarded to less than 5% of all posters, this distinction recognizes high quality unique research. Our dedicated team is fully engaged with the physician community and carving out a meaningful role for Israel among the IBSC patient's population. Based on the uptake we are seeing, it is clear that the potential for Israel is high among the target group of patients who are as needed in not all option, and that is realized on pace to achieve a high single-digit market share position across this 5 million-square-square-square-square-square-square-square-square-square-square-square-square. With the price point we established with the business market, enabled by the value of its innovation and the favorable uptake dynamics driven by the patient needs, we are well positioned for success with the umbrella.

I've never seen that companies actually meet with the congressional budget office any bill going through Congress needs to get scored best just standard fare.

That's our expectation that could be happening here or whether or not our price has an impact on that again that is the process. The CBO goes through.

And that's not something that we have transparency to with its rollout I think is in the guidance as Justin said and I think as you've seen we take a very measured approach and the way that we have certainly been asked the company and the guidance that we go we're very confident confident with this range and felt that rising raising at the way we did in narrowing it was giving you a.

Perspective in terms of our confidence of words Rolla revenue and uptake is growing.

Susan Rodriguez: Turning to expose us, during our call a few weeks ago, I characterized in detail the dynamics and our commercial approach. I will summarize those briefly before discussing our pricing and access strategy in more detail. The market dynamics for its so-so are favorable. Hyper-phosphatemia is a well-established therapeutic area with treatment goal centered on globally recognized treatment guidelines. 80% of the estimated 550,000 patients with CKB and dialysis in the US are treated with a prescription therapy in an effort to control their elevated levels of serophosphorus.

Alright, thank you.

Thanks Dennis.

The next question comes from Yigal <unk> with Citi. Please go ahead.

Yeah, Hi, Michael Thank you very much.

On the pricing so I suppose that you could get a little more insight into the thought process around it's around the 29.

Susan Rodriguez: Of those being treated, it has been shown that 77% are unable to consistently maintain target levels of serophosphorus over a six month period. The market is primed and ready for exposure. Nearly 70% of surveyed nephrologists report a high or very high need for a new treatment option. And among the phrologists aware of new treatments for hyper-phosphatemia, three quarters mentioned to NAPINOR by name. Surveyed nephrologists rate the novel mechanism efficacy, tolerability and dosing attributes favorably, and 59% reported that they intend to adopt exposure within the first six months of product availability.

If we look at the Binder is obviously there.

Oh Wow, Okay, a year worth.

So you're about 70, 575% to 80% premium obviously, you have very significant value proposition.

Accident.

So we don't have anything like that in the market.

Maybe spend a little more time discussing the thinking around that.

Thank you.

Sure. Thank you Carl.

I think what you just described as there's significant differences in the opportunity and the benefit of that exposure would bring patients. That's really the differentiator here is looking at what we're thinking is the best thing and what's most appropriate for patients, especially in the context of other brands.

Binders within the marketplace. So we're very comfortable with where we landed and think that the prices exactly where it needs to be and it's appropriate for.

For the patients and what we are going to be bringing for them.

Okay.

And then maybe for Susan Susan.

Is it if you could talk a little bit more about ROA.

Susan Rodriguez: Our deluxe is well positioned to capitalize on this opportunity. Positioning for exposure will center on integrating a novel blocking mechanism therapy for their binder treated patients who have an inadequate response or are intolerant to any just to binder therapy. WAP pricing for exposure will be set at $2,960 per month of therapy, reflecting the value exposure brings to patients in the context of the CKB market pricing landscape. We have built a dedicated nephrology sales course of 60 reps that cover the approximately 8,000 nephrology healthcare providers who write the majority of the hyper-phosphatemia prescription.

But could you tell us what the refill rate is in the number.

Later, so far.

I know you have access to.

Yeah. Thanks for the question Yeah, we track that closely we have not specifically disclosed them those growth rates, but what I can tell you is that the refill rates you know are growing at comparable or greater than that you know then the new Rx right. So both.

Are showing very healthy growth and that have been persistent so reflecting that physicians are continuing to write new scripts for patient and windows scripts are written they're getting rebuilt. So it's very encouraging looking at those rates and in terms of the average script per rider again, it's not a specific metric we have.

Susan Rodriguez: Our distribution network is also in place and will provide full coverage across the U.S, aligned optimally to our access strategy. Our comprehensive patient services program, our deluxe assist, has gone live for exposure and is receiving calls. Product is on track to begin the channel following ASN's kidney week in early November.

Disclose but we track that very closely and what's really encouraging is that every single month, we see a new cohort of riders joined me Israel are writing group. So we're we're persistently accumulating writer and when you track existing riders.

Susan Rodriguez: As I outlined in our approval call, there are three foundational components to our go-to-market approach centered on enabling his phrologist to integrate first-in-class phosphate absorption inhibitor exposure into the treatment regimen of their binder treated patients who have had an inadequate response or cannot tolerate any dose of binder therapy. First, exposure is novel. It is a first-in-class phosphate absorption inhibitor. It is not binder. This is a significant innovation for patients who up until now have only had one treatment option for managing hyper-phosphatemia.

With me on a persistent level, they're increasing their prescription volume firms rollout. So all of those fundamental demand indicators continued to be very strong.

Okay.

First I'll start on that.

The cost of the financing obviously, you highlighted a very strong position.

I guess yesterday.

I'm curious if you're awesome.

Positive net income, although I know that it was driven by perhaps some one time items, but nonetheless, I just curious Justin.

He said you kind of give us a sense as to the likelihood that you might see.

Susan Rodriguez: Second, patients are in need of innovation. The vast majority of the 550,000 CKD patients on dialysis who are treated with a phosphate binder to lower their phosphorus levels are unable to consistently achieve or maintain target levels. And third, Ardelyx's commitment to patient access and affordability. Patients with projects those who will have access to comprehensive prior authorization support and affordability programs. Ardelyx assists connect providers, payers, and specialty services to help facilitate prior authorization and other administrative processes.

That's a lot of credit winding down or if that's more of a backup plan is not really.

Yes.

Yeah.

Oh, I'm, sorry, I had trouble understanding the second part of your question you asked about our cash friendly because there was one time items.

And then the rest of us.

You'd be accessing we'd be accessing the credits that we have are financing the company in the future how that's oh yeah.

Thank you yes.

We're very pleased with our third quarter, we're clearly not at a point, yet where we can share where breakeven is we take a very measured approach to our funding as you've seen I do think with our internal projections, we can be very flexible and patient we have until March 15th of next year to potentially draw. The next tranche of gasoline. So that's one.

Susan Rodriguez: For commercial patients, their co-pays will be covered at the level of 100%. Patients unable to afford exposure can apply for our patient assistance program that provides drug at no cost to patients who need the program's broad eligibility criteria.

The team will evaluate as we see how well expose our watches and the continued growth of <unk>.

Susan Rodriguez: I'd like to further characterize the access landscape and our access strategy as we received a number of questions following our approval call two weeks ago. Expoza, like Israel, will be available to patients through a prior authorization process. We have been engaged with payers for several months to educate them on exoza, its normal mechanism of action, clinical data, and now the approved label. Over the coming months, payers will issue their coverage policy.

So it is something that we wanted to have a flexible and beyond.

We don't have any intention to do a significant equity raised at this time, we're always looking at all of our different ways to raise capital when appropriate.

Yeah, and you got what I would add to that did you know.

Solar has been a spectacular and a unique partner in this whole process for us, but I mean, you think about when we first established a relationship with them. The company was in a very different position.

Susan Rodriguez: We anticipate that the requirement will be that physicians attest that patients have not had an adequate response to their binder treatment or that they are not able to tolerate binder therapy. While the specifics around the requirements will vary by plans, it is important to note that the majority of patients treated with binders today by misbiologists meet these criteria. What will be most important is that nephrologists prescribe exposure based on patient needs and integrate the prior authorization work stream into their office practice so that patients prescribed exposure can access exposure.

And the terms around this long or a really favorable to us and what we're able to accomplish with it which is why we drew down 22.5. The additional 50 at our discretion is nice to have and we may at some point in the future take that down before the time frame that.

Justin just mentioned, but I think it's important that we have taken the approach that we have and have strong partners like solar to grow the company to where we want it to be.

Got it okay. Thank you very much.

Okay.

The next question comes from Ed Arce with H C. Wainwright. Please go ahead.

Susan Rodriguez: Nephrologists are well accustomed to the prior authorization processes as several products commonly used for patients with CKD and dialysis require them. Given the limited agents available today to treat hyperphosphatemia, the recognized unmet patient needs an unopposed position of expoza as the only non binder next flying option for patients. We anticipate that exoza will be accessible via the prior authorization pathway early in the launch. We do not intend to contract a pair and anticipate a steady and persistent update of expoza by HTTP based on addressing the patients on met needs and effectively engaging in the prior authorization administrative process.

Hi, Thanks for taking my questions and congrats on the approval in the quarter.

First I wanted to ask about its rella, you know given the guidance the new guidance range you could.

Discuss sort of what youre continuing to see as drivers of additional uptake oh with new and existing riders.

And then.

Uh huh.

Turning to expose I'm wondering if.

You know with our initial.

Initial sales.

In the fourth quarter or are you expecting to report a quarterly metrics, let's say fourth quarter early next year.

Susan Rodriguez: The exposure sales force is then in the field and will be joining the nephrology community this weekend at the ASN Kidney Week in Philadelphia. In parallel, the Israeli sales team maintains their singular focus on disrupting the IDSD market also with a first in class therapy addressing important on that patient needs. The Artellex commercial team is executing at the highest level with teams that experienced, dedicated and highly capable individuals who are delivering on our deluxe admissions every day addressing important on that treatment needs through innovation.

And sort of disclosing those I'm tracking goes beyond Scripps.

And then finally on on pricing.

I know this was already brought off but I wanted to ask how you came to that number as you think about balancing.

The the you know the.

The ability to.

Sure the differentiated value proposition with the patient access and affordability that your that you've mentioned is important for your long. Thanks. So much.

Justin Renz: With that, I will hand it to Chuck. Thank you, Susan. Our Delta has delivered on a number of key milestones since August. Continued growth of взrelocross all key measures. The approval and the imminent commercial launch to expose us. The expansion of our commercial organizations to support exposed us. The approval of Tenabno for Hyper-Fot 15 in Japan. The approval of Ibrillian Hong Kong for IVFC, between us this morning. And an amended loan agreement which provides additional cash and flexibility to fund our future growth. We find ourselves in the very strong cash position. We are well-resourced to support our ongoing operations, including the commercialization of both of our in-market products.

Sure Let me make a couple of comments on all of those Ed. Thank you for the question and then I'll ask.

Susan to address all of them as well so.

Israel uptake dynamic it's because the drug works right. It is something that people are getting.

The samples and then their first prescription of the drug is doing something that they've never experienced before with.

The products that they've previously been utilizing so that's really what's driving us as they experience is positive and our <unk> assist.

It's just program that facilitates access is extraordinarily important.

The hallmark of what we do and the way that we help patients get access to the drugs that we develop with expose the metrics.

Justin Renz: With that backdrop, I will discuss the specifics of our financial performance. In the third quarter of 2023, we had total revenues of $56.4 million compared to $4.9 million in total revenues during the third quarter of 2022. The increased repressions draws net product sales growth as well as milestone and collaboration payments from our international partners. Next, let me take you through the relative contributions of our revenue components during the quarter. First, as previously mentioned, we had US net product sales of Israel in the quarter and in September 30, 2023 of $22.3 million, a 22% increase from the 18.3 million we reported in the second quarter.

Would love to provide as much as we can but we'll provide what we think is appropriate.

Early in the launch we want to make sure that as we did with its rollout is probably four to five quarters of these questions being asked and that will do the best to answer them before we're giving more solid metrics as we see it as things evolve.

And with pricing pricing is an art as well as the science I think what we have done here given the expansiveness of the entirety of what we do for patients that this is a completely appropriate price for what this drug gangs because there are no other drugs to manage phosphorus.

Our next line opportunities with a novel mechanism that may very well be the way that we can ultimately get a greater percentage of our patients to goal.

Justin Renz: As a reminder, in the third quarter of 2022, we reported Israel in net product sales of $4.9 million. Second, we reported Israel in net product supply revenue of $2.1 million related to our international partners. This is compared to $92,000 in product supply revenue in the third quarter of last year. Third, we reported $30 million in the licensing revenue as a result of milestone and contract amendment payments from Pirocure and following the approval of Tenabino or Pryproposcutaneous in Japan in September.

And that's what we should all be focused on is is that we with this approval and.

Field Force out there already next week this week with a S. N is going to be spectacular and we're all going to learn a lot about this together.

And we feel very confident that we have prices appropriately.

Are gonna be reflecting that and uptake over the ensuing.

Orders that we worked together talking about this Susan would you like to add anything.

Yeah. Thanks, Mike I think in terms of Wendy let me take the relevant aspect of your question first and then touch on really expose the pricing I think sometimes rental what we're finding is I mean, there are many high writing physician, who are just beginning to prescribe it.

Justin Renz: Fourth, we reported $2,000,000 milestone payment from POS in Pharma following the NDA submission for Hyperposcutaneous in China, which we announced back in July. And finally, we recorded a small amount of royalty income from night pharmaceuticals as we received a percentage of their Israel net product sales in Canada. Overall, our revenues were in line with our expectations regarding US net product sales from Israel as well as milestone payment related to our international collaboration partners.

And as we get in there opposite with the frequency in the sampling we continue to bring on more and more new riders. So that's really there is a lot of runway there to continue to bring on new writers for example, and then as I mentioned before on top of that the existing rider expanding their use across their patient population and what.

Justin Renz: Looking ahead, we currently expect net sales revenue in the US for the full year of 2023 to be between $76 million and $78 million. Please note that this does not include any anticipated sales mix pose of partner milestone payments for product supply revenues. In addition, the FDA approval of exposed a triggered a $3 million milestone payment from POS which will be recognized as revenue and is expected to be received in this current fourth quarter.

We're finding you know even in the third dimension you know as a growth driver is as they gain the favorable experience in Israel that they're expanding their view and they see patients daily in their office on patients who could benefit from Israel and so we have very very strong.

Gross you mentioned there in view for Israel are taking us into the future I think in terms of exposed the pricing as Mike mentioned, we consider multiple dynamics, let's just talk a little bit about you know obviously, we've talked about the novelty of the draw of the unmet need and our commitment to patient access if you look at the TKD pricing landscape.

Justin Renz: At the end of Q3, we reported year to date 2023 net Israel sales revenue of approximately $52 million. Our raise and narrowed full year guidance range of $76 to $78 million represents our expectation of continued consistent growth. We are still early in our watch and unable to fully anticipate how seasonality may point to performance during the fourth quarter so we will continue to take a measured approach as we die due in our expected sale performance.

There have been a few innovations launched recently, which is which is really encouraging for the kidney patients dialysis you know in high unmet need areas like nephropathy, Iga nephropathy and lupus nephritis.

Does that product price in a range, depending on which line depending of $4000 to $10000 a month and you look at specifically hyper Foster team here I know you guys had mentioned the branded pricing.

Justin Renz: Research and development expenses were $8.6 million to the third quarter of 2023, which is an increase of $1.1 million from the $7.5 million in the same period last year, selling general administrative expenses for $32.7 million to the third quarter of 2023, an increase of $14 million from the $18.7 million we reported for the same period of 2022. The increase with due to the cost of social with the continued personalization and growth of its rail, as well as loss preparation activities for exposure.

Of the products. If you look at the number of capsules with neuron and it depends on which product there on the expense of branded binders is actually distributed across a pretty broad range, which ranges from $1400. A month, two we estimate around $2400 a month. So in that context I'm you know if you consider the overall.

I'll see TD pricing landscape, the Hyperpotassemia branded binder ranges of costs per month. The novel innovation that exposure represents we we believe that it's an appropriate price point you.

Justin Renz: As we mentioned during our second quarter call in August, we anticipated the cost of social with exposure would be incremental $20 million per quarter, ramping up in the third quarter and then being fully reflected in our SCNA expenses beginning in the fourth quarter of this year. We had net income of approximately $6.6 million for three cents for fully diluted share in the third quarter of 2023, compared to a net loss of $22.9 million for 14 cents per share in the same period last year. Our net income in the third quarter has resulted in $30 million in collaboration and maintenance payments from Kiwick here, as well as increased sales in the drug.

You had mentioned a commitment to access my test has emphasized this oh springs rail and expose that you know we are quite confident with the program. We have in place that we're going to support the neurology offices with the prior authorization submissions. So patients can gain access to explore that and that exposure will be affordable either because we can.

Often their co pay for commercial patients and for patients who can't afford the product you don't have local MPS I program and we would be eligible for a patient assistance program. So access and affordability really is our primary focus and that's what's going to be important to bring exposure to these patients.

Justin Renz: From a cash perspective, we have never been in the stronger financial position of the company. Let me take a step back and tell you where we are, how we got here, and what it means. First, as you saw in the press week this morning, as of September 30, 2023, we had total cash, cash equivalent, and shorter investments of $165.1 million as compared to $123.9 million at the end of 2022. This reflects 58.4 million gross proceeds that we ran during the quarter through sales on approximately 14 million shares of common stock under our ACM program and the average selling price of $4.24 per share.

Great Mike and Susan. Thank you so much for those comments very helpful look forward to seeing the team later this week and Philly.

Thanks, Ed you can see that.

The next question comes from Joseph Thome with T. D. Cowen. Please go ahead.

Hi, there good morning, and thank you for taking my questions maybe the two on its rollout uptake I guess are you seeing physicians I'm. Obviously the drug is launching what are you seeing physicians wanted to use the drug earlier in the triple down on their patients or obviously you talked about the target you know postpone desk market, but are you seeing them wanting.

Justin Renz: We also received the $2 million milestone payment from Folsom, following the submission of an NDA for Chinatown for Hype for Hust, Kenya, and China, which we announced back in July. In addition to our cash as of September 30, 2023, subsequent to quarter end, there are also three other contributing factors that are one point out that significantly strengthens our cash position. First, we have received payment from Kiwick here for the $30 million receivable associated with approved one Japan.

Use it earlier and then second we did see the phase III trial in adolescent patients I'm I guess, what is the current uptake in adolescent patients between 12, and I guess 17, 18 years of age and what's sort of the eventual goal of of this study would it be just to remove that line on the label that said safety and efficacy of the drug arent available.

Justin Renz: Second, also associated with that approval is a $5 million milestone payment we have received from healthcare world departments. And finally, we drew $22.5 million from our loan agreement with SLR or solar capital. Considering these items, as well as the ongoing business in October, as of yesterday, October 30, our cash investment amounted to approximately $218.1 million. We combined with access to additional capital with our option, we have a loan agreement solar and our continued financial discipline as a company. We believe that we are very well resources for foreseeable future. We have taken a very thoughtful, disciplined, and patient approach to how we fund the company.

Eligible in pediatric patients dosed at 18 or is there something else that can be are done with it after the study yourself. Thank you.

Sure. Thanks for the question, Joe and I'll ask Susan to speak to the Israeli uptake, but first let me address the pediatric adolescent question that was an interim look at some of the data that was presented.

Still indicated only for adults.

With Ibs C. So that hasnt changed so any insights that we have right I can't think of any of that say that we're treating adolescence because that is not indicated in our label.

Nor as first line therapy right I mean, if you look at the way that we position this.

It is a drug that's going to be used for patients that are no longer responding.

Two the GCC agonist.

Specific feedback as to whether or not people are using it earlier, Susan you want address that.

Yeah. Thank you actually it's interesting for you.

Justin Renz: We are positioned to support continued investments in our in-market products as well as beginning investments in our pipeline programs. We will continue to make thoughtful decisions that maximize shareholder value.

If you recall, we have a very focused approach calling on the highest writing submission for IV <unk>.

Its mission for the physician and the patients they see in their office daily have all been cycle, you know have cycled through a GC C. Agonist. So very important to think about the context on where were smoking with Israel are so for those physicians patients they'd be daily I typically have already been treated with these products. So it depends on.

Michael Raab: And with that, I'll turn it back to mine. Thanks, Justin.

Michael Raab: This is an exciting time at our delegates. Within a couple of weeks, we will have exposure at our distributors and ready for fulfillment to patients alongside of Zerella. We have focused on execution this year and yet we are not done. We have a lot of work ahead of us, continuing the momentum we've established with Zerella, ensuring a successful launch at Xfosa, and looking ahead to next year where we will begin investing for further growth.

How do you define early what we're finding is that because the patients meet already the prior authorization criteria. It's really just the physicians eagerness and identifying increasingly patient that they believe can benefit from a novel option.

Michael Raab: We have shown that we can deliver on our promises. We continue to strengthen our company and our balance sheet where well resources and excited about what is to come. I want to thank the members of the investment community who have been alongside us on this interesting journey.

Yeah.

Remember the alcohol labor for US It was really does support projects you.

But in our case focusing on these high writing physicians, it's really not an issue after the patients you walk into their deposits everyday meet meet the prior off criteria.

Michael Raab: However, none of this would have been possible without the dedication, the passion, and the resilience of Team Ardelyx. Thank you for what you do for patients every day.

Okay perfect. Thank you very much.

Thanks, Jeff.

The next question comes from Matt Kaplan with Ladenburg Thalmann. Please go ahead.

Operator: I will now open the call to questions operator. We will now begin the question and answer session. To ask your question, you may press star than one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star than two. At this time, we will pause them entirely to assemble our roster.

Hey, good morning, guys and congrats on the strong quarter.

Just just focusing on Israel out a little bit Oh, maybe Susan can you talk about how patients are using it's relevant in a real world setting now versus the youth and long term clinical studies.

Yeah, Matt I'm actually what we're finding I mean, our clinical data package really shows a a rapid response to thriller and a sustained response to thriller which is really a piece of our overall product profile and clinical data profile that physicians respond very.

Louise Chen: The first question today comes from the week 10 from Cantor. Please go ahead. Hi, congratulations on a strong quarter and thanks for taking my questions. I wanted to ask you, how are you thinking about growth to net for Xfosa? And then also, do you think there is a bolus of patients waiting for drug? Just kind of curious how you think about how fast the uptake might be especially in the last quarter of the year or do you expect more of the uptake to come in the first half of 2024?

Louise Chen: And then last question I wanted to ask you was obviously of a very strong cash position. What do you think your cash runway takes you out to? Thank you. Yeah, so let me ask Justin to address the first and last question first and then Susan, please about that thing. Great. Thank you, Mike. Good morning, Louise. We're going to our growth to net for Xfosa. Our commercial strategy will be very similar to Xfosa, which means that we don't expect significant rebateing the payers, other than the statutorily required rebate for certain government payers, which would obviously have, you know, negative effect on growth to net.

Favorably to and what we're finding in the real world is that that has been their experience that patients have responded to as rolla and when they respond to it birla. They continue to have a sustained effect I mean, obviously, you're not going it's not going to be the that's the right drug for every single patient, but where the physician feedback I really has been.

Favorable on their treatment experience consistent with their expectations based on the clinical data package and spirits has been tracking to launch over time and persistently, they're reporting either moderate or high satisfaction, which even with Israel and reporting low discontinuation rates.

Alright. Thank you and then I guess given the similarities between the Ibs C market and Hypersound Sapremia Oh market in terms of that.

Into these two markets with a novel mechanism of action combined with the unmet need.

Louise Chen: But in general, we expected to be very similar to what we saw with the draw up. There may be some season out in our roast net and our first quarter of being perhaps last other quarters due to the reset of commercial program programs. But otherwise, you know, we're very confident that it'll be in the certainly in the early years comparable to a drop. And then regarding our cash position, you may see in our thank you, which we found today that we no longer have a going concern, which means our auditors are confident we have more than a year of cash.

Talk a little bit about the learnings that you've.

You've had and the launch of Israeli law that you're going to apply to excellent.

And that is in place.

Yeah, so yeah, you're spot on in terms of their parallels between the two markets and very important learning and the physician interest because of the limited options that they have had and the recognized unmet need there are interests in the novel mechanism profile understanding the way the drug works uniquely and it's.

Clinical data package. So we're very much a science based clinical based out patient B cell and also learned the criticality of emphasizing our commitment to patient access and affordability. So physicians really they prescribe based on patients needing a drag and it's important that we.

Louise Chen: For us, we believe that is is more than that. We believe we have enough cash runway for quite a while. We can't specifically put on because we're waiting to see how successful we are. We have closed the launch or quite quite confident our cash position. Excuse me. Yes, we've been regarding the uptake of Xoza. You're exactly right. There is, you know, a very large group of patients today who despite treatment with binders are unable to consistently maintain target levels and patients that can't tolerate binder therapy.

We encourage them that they did not have to have a concern around the prior authorization process that we can support that we can remind them that they're they have familiarity with that administrative process with other drugs. It right and this one is no different and in this case than the patients that they're identifying who are in need.

Louise Chen: So there's clearly a nice opportunity there and now these patients will have a new option with Xoza. I think what's important here is thinking about the integration of novel mechanism Xoza into the nephrologist prescribing pattern. You know, how exactly they're going to integrate use of Xoza across their patient groups. So it's always going to take some time for the position community to adapt their practices now that they have an expanded treatment armamentarium.

Of our novel drug implicitly need the prior authorization criteria. So all of that will be very critical and really supporting physician uptake integrating novel mechanism expose them into their treatment patterns for these patients who have for so long have had no options outside of binders.

And Matt what I would add to that is that the.

The power of our delegates assist and the comprehensiveness of that program.

Louise Chen: So given that and given our promotional presence with nephrologists, we believe that the uptake of Xoza is really going to be really quite steady and consistent as they identify patients early that they believe are most in need of Xoza and then based on their experience proceed to expand their use to those additional patients that they're quite aware today are are not meeting the target level despite binder treatment. Thank you.

When physicians utilize it in a way that has been designed I think they find an extraordinarily seamless program, where they get confidence that if they're going to write a script that their patient is going to get it irrespective of whether or not it's a co pay pay down it's an affordability issue Medicaid Medicare or.

<unk> is there to accomplish an awful lot of it it's really be that program and how physicians and ultimately the patients who are receiving whether it's a draw or would that expose are finding that our dogs assist is really doing the job that it's been designed to do.

Dennis Ding: The next question comes from Dennis Ding, Jeffrey. Please go ahead.

Okay, Great Great and then last question can provide a little bit more detail the presence that you're going to have at the upcoming ASN meeting later this week.

Dennis Ding: Good morning. Two questions for me. Number one, maybe on the congressional action to delay moving oils into the bundle. Can you comment if you haven't met with the CBO and what can you disclose from those discussions as a realistic Xoza pricing and out of 3000. $1,000 a month price would impact their cost estimates for for moving in for moving oils into the bundle versus keeping them out.

Sure Susan.

Yeah. So we only have a very strong president spikes noted that at the upcoming ASN meeting, we will have a strong promotional booth presence, reflecting our whole launch campaign for expose that with as we mentioned earlier in the narrative, we have a sales force out and deployed calling on them.

Dennis Ding: And then number two on the electrolyte guidance. You know, it seems space off of scripts which continue to generally grow week over week. Your guidance for the year seems a little bit conservative for Q for so is there anything you could be expecting in the quarter of that investors are missing.

Allergy health care providers as we speak so we will have a strong promotional presence at ASN reminder, at banner you know I think anywhere you look across the a S N floor, you're going to see exposure there and its novel blocking mechanism campaign. We also have.

Michael Raab: Thank you. Sure. Thanks for the questions, Dennis. So with any congressional action and meeting with the CBO, we don't meet with them. I've never seen that companies actually meet with the congressional budget office any bill going through Congress needs to get scored. That's just standard fair. So that's our expectation that's going to be happening here. Whether or not our price has an impact on that. Again, that is the process that CBO goes through.

Clinical scientific presence at ASN, we'll have a product theater to really have an opinion leaders presenting on the novel product profile of expose on its clinical data package. So we're quite encouraged about all of the events at ASN and hopefully look forward to seeing you there.

Great. Thanks.

Thanks.

Thanks, Matt.

Michael Raab: And that's not something that we have transparency to. What is rela I think is in the guidance as Justin said, and I think as you've seen, we take a very measured approach in the way that we have certainly financed the company and the guidance that we give. We're very confident confident with this range and felt that rise the raising it the way we did and narrowing it was giving you a perspective in terms of our confidence of words, rela revenue and uptake is going.

The next question.

<unk> comes from Laura Chico with Wedbush Securities. Please go ahead.

Michael Raab: All right. Thank you.

This is anchored on for Laura Chico, how should we be thinking about gross to net dynamics for exposure pricing over time.

Michael Raab: Thank you, Dennis.

Your steady state rate expectations for gross to net discount and then just my last question is could you perhaps review why Israel as a competitor it makes sense.

Let me start with the last one first.

Great question is why does the draw as a competitor. It makes sense I think Susan is the best one to address that given what the experiences that we're seeing in the field and then I'll ask Justin to address growth efforts both in.

Yigal Nochomovitz: The next question comes from the goal for city. Please go ahead. Hi, Mike and Dean. Thank you very much for taking a question. I'm the pricing for exposure. You can see a little more insight into the thought process around around the $29.60. If you look at the binders, obviously their price around $20,000 a year, a year about $75,000 to $80,000 premium. Obviously you have very significant value proposition with unique mechanisms of action.

Discounts.

Susan.

So I think it's always a comparator, let let's just take a step back.

And I think it's some of the parallels that Matt alluded to so as a novel mechanism drug are specialty drugs.

There are you know the the gross to net component take into account the distribution the mandated government rebates and other consideration that Jonathan can touch on overall.

Yigal Nochomovitz: We don't have anything like that in the market, but on the less to use, maybe spend a little more time discussing the thinking around that type of opinion. Thank you. Sure, thanks, Yigal. I think what you just described as significant differences in the opportunity and the benefit that exposure would bring patients, that's really the differentiator here is looking at what we're thinking is the best thing and what's most appropriate for patients, especially in the context of other branded binders within the marketplace. So we're very comfortable with where we've landed and think the price is exactly where it needs to be and it's appropriate for the patients and what we are going to be bringing for them. Okay, here.

And then the gross to net but between the two products, we're going to need to wait and see because the mix of patients. The payer mix of patients also determined the extent to which the government mandated rebates become a part of your you know gross to net profile, but what is comparable between the two which is an important comparator.

Is that there will not be incremental rebates that we're providing payers for access to the drug access to the drug will be achieved by a prior authorization because for these patients in both cases, they have limited options and then and physician prescribing our novel mechanism drug just because those options have not been adequate and they are in need of a new <unk>.

Susan Rodriguez: And then maybe for Susan.

Susan Rodriguez: Susan, if you could talk a little bit more about Ms. Rela, I'm not sure if you have this data, but can you tell us what the lethal rate is and the number of risks per writer so far? If that's data, you have access to. Yes, thanks, Yigal, for the question. Yeah, we tracked that closely. We have not specifically disclosed those growth rates, but what I can tell you is that the lethal rates are growing at comparable or greater than the new RX rate.

So that's how patients will access our drug and therefore, they will not be that the pay the incremental payor rebate question that item, which we get a lot of questions on that because I think for a product launch at those are those are rebates that are negotiated over time. So they start to you know integrate themselves into your gross to net profile that that is one eye on that.

We can tell you today is not going to be something that's going to show up on the profile for either party.

Just to follow up on the question were you asking about the financial comparator or the clinical comparison to other drugs in the market.

Susan Rodriguez: So both are showing very healthy growth and that has been persistent. So reflecting that physicians are continuing to write new scripts for patients and when those scripts are written, they're getting refilled. So it's very encouraging looking at those rates and in terms of the average script per writer. Again, it's not a specific metric, we have disclosed, but we track that very closely. And what's really encouraging is that every single month we see a new cohort of writers join the umbrella writing group. So we're persistently accumulating writers and when you track existing writers monthly on a persistent level, they're increasing their prescription volume for umbrella. So all of the fundamentals and the indicators continue to be very strong.

Financial comparator.

Great. Thank you.

Justin do you want to restaurants now for a closer and.

And discounting.

Sure. Thank you Susan briefly touched on it just to elaborate the most important thing for us is access and making sure that patients have access to it and so our commercial strategy will be very similar to what we did with its relevant screens as Susan mentioned, we go through significant rebating payers, but we will have our same generous commercial co pay.

A commercial buy down process, where if you have partial coverage, we will take care of your co pay 100%.

And so as a result, we.

I expect to see some seasonality that we saw withdrawal, where the first quarter of the year.

When many patients plans reset there may be deductibles, where we will help the patient.

Justin Renz: Okay, thanks, and then one quick one for Justin on the cash and the financials. Obviously, highlighted a very strong past position. I did yesterday.

Meet that need and then it may improve if you will over the course.

Justin Renz: This is various, and we also mentioned that you did report positive net income, although I know that it was driven by perhaps some one-time items. But nonetheless, I think it's various systems. We can kind of give us a benefit to the likelihood that we might need to use the SLR credit line again, or set more of a backup plan, and it's not really something very good, especially the draw on again. Hi, you go.

Following subsequent quarter, so as a general premise draw as you may have seen our first quarter was just about 33% it's come down into the high Twenty's over the course of this year and I think it's fair to say at least initially we expect similar gross to net margins.

Thank you.

This concludes our question and answer session I would like to turn the conference back over to President and CEO, Mike Raab for any closing remark.

Justin Renz: I'm sorry, I trouble other students, second quarter of your portrait. That's better cash-friendly because there was one-time item. And then the rest of the writers, whether it be accessing, we'd be accessing the credit that we have or asking the company in the future. How about that? Oh, thank you. Thank you, yes.

Thank you everyone for joining us this morning before I close the call I want to recognize and remember the kidney community, who we recently lost Derek for thing.

Eric was an incredible person and patient advocates who meant so much to so many people in the kidney community and beyond.

Justin Renz: So, we're very pleased with that third quarter. We're clearly not at the point yet, where we can share. We're break even as we think of very measured approach to our funding as you've seen. I do think with our internal projections, we can be very flexible in patient. We have until March 15th of next year to potentially draw the next trance of death. And so that's something that the team will evaluate as we see how well expose the launches.

Justin Renz: And they continue growth as well. So it's something that we want to have the flexible beyond. You know, we don't have any intentions to do a significant equity race this time. We're always looking at all of our different ways to raise capital when appropriate. Yeah, and you go, what I'd add to that is, you know, the solar has been a spectacular and unique partner in this whole process for us. I mean, you think about when we first established a relationship with them, the company was in a very different position.

For our delegates Derek brought the patient voice T. Our Delek scientific Advisory Board and was the driving force behind the creation of yard dogs patient Advisory Council.

Eric was a warrior who despite its many health challenges always persevered put others first and continued his mission to advocate for kidney patients with a smile.

Tariffs passing as a reminder to all of us that our job is not done.

There are so many patients with <unk>, who need innovation and we need to continue investing in and developing innovations with urgency for this community of patients.

With that we can close the call.

Operator.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Justin Renz: And the terms around this loan are really favorable to us and what we're able to accomplish with it, which is why we drew down the 22.5. The additional 50 at our discretion is nice to have. And we may at some point in the future take that down before the timeframe that Justin just mentioned. But, you know, I think it's important that we have taken the approach that we have and have strong partners like solar to grow the company to where we want it to be.

[music].

Justin Renz: Okay, thank you very much.

Ed Arce: The next question comes from Ed Art with H.C.

Ed Arce: Wingwright please go ahead. Hi, thanks for taking my questions and congrats on the approval and the quarter. First, I wanted to ask about Israel, you know, given the guidance, the new guidance range. You could discuss sort of what you're continuing to see as drivers of additional uptake, both with you and existing writers. And then turning to expose a wondering if, you know, with initial sales in the fourth quarter, are you expecting to report quarterly metrics, say, fourth quarter early next year and sort of disclosing those and tracking those beyond scripts.

Ed Arce: And then finally on pricing, I know this was already brought up, but I wanted to ask how you came to that number as you think about balancing the ability to capture the differentiated value proposition with the patient access and affordability. That you're, that you've mentioned is important for your launch. Thanks so much. Sure, let me make a couple comments on all those that thank you for the question, and then I'll ask Susan to address all of them as well.

Ed Arce: So, you know, the Israel uptake dynamic is because the drug works, right? It is something that people are getting, you know, the samples and then their first prescription, the drug is doing something that they've never experienced before with the products that they've previously been utilizing. So, that's really what's driving us is the experience is positive. And our Delta SIS program that facilitates access is extraordinarily important. And the hallmark of what we do in the way that we help patients get access to the drugs that we develop.

Ed Arce: With exposed metrics, you know, would love to provide as much as we can, but we'll provide what we think is appropriate. Early in the launch, you know, we, we want to make sure that as we did with electrolytes, probably four to five quarters of, you know, these questions being asked and that we'll do the best to answer them before we're giving, you know, more solid metrics as we see it as things evolve.

Ed Arce: And with pricing, you know, pricing is an art as well as a science. I think what we have done here given the expansiveness of the entirety of what we do for patients that this is a completely appropriate price for what this drug brings because there are no other drugs to manage phosphorus. That our next line opportunities with a novel mechanism that may very well be the way that we can ultimately get a greater percentage of our patients to goal.

Ed Arce: And that's what we should all be focused on is that we with this approval and the field force out there already next week, this week with ASN is going to be spectacular. And we're all going to learn a lot about this together. And we feel very confident that we have prices appropriately and are going to be reflecting that in and uptake over the ensuing, you know, quarters that we were together talking about this.

Michael Raab: Susan, would you like to add anything? Yeah, thanks Mike. I think in terms, let me take the umbrella aspect of your question first and then touch on the expose of pricing. I think, sort of, what we're finding is, I mean, there are many high writing physicians who are just beginning to prescribe the umbrella. And as we get in their offices with the frequency and the sampling, we continue to bring on more and more new writers.

Michael Raab: So that's really, there is a lot of runway there to continue to bring on new writers, and then as I mentioned before, on top of that, the existing writers, expanding their youth across their patient population. And what we're finding, you know, even the third dimension, you know, as a growth driver is, as they gain the favorable experience of Israel, they're expanding their view as they see patients daily in their office on patients who could benefit from Israel.

Michael Raab: So we have very, very strong growth dimensions there in view for Israel taking us into the future. I think in terms of extroza pricing, as Mike mentioned, we consider multiple dynamics. Let's just talk a little bit about, you know, obviously we talked about the novelty of the drugs, the unmet need in our commitment to patient access. If you look at the CKD pricing landscape, there have been a few innovations launched recently, which is, which is really encouraging for CKD patients with dialysis.

Michael Raab: You know, in high and mid-need areas, like the property, hygiene, the property, Lucis, the brightest, those products priced in a range, depending on which one, depending on $4,000 to $10,000 a month. If you look at specifically hyperphosphatemia, I know you've all had mentioned the branded pricing of the product. If you look at the number of castles that you're on, and it depends on which product you're on, the excess of branded binders is actually distributed across a pretty broad range, which ranges from $1400 a month to, we estimate around $2400 a month.

Michael Raab: So in that context, you know, to consider the overall CKD pricing landscape, the hyperphosphatemia branded binder ranges of cost per month, the novel innovation that expose or represent, we believe that it's an appropriate price point. You had mentioned the commitment to access, Mike has emphasized this. Close proofs, Rella and Expoza, you know, we are quite confident with the program we have in place that we're going to choose supports and apology offices with this gyroauthorization submission.

Michael Raab: So patients can gain access to its CKD, and that exposure will be affordable, either because we can access their co-pay for commercial patients and for patients who can't afford the product to, who don't have local pay programs. They would be eligible for our patient assistance program. So, access and affordability really is our primary focus, and that's what's going to be important to bring Expoza to these patients.

Ed Arce: Great, Mike and Susan, thank you so much for those comments very helpful. Look forward to seeing the team later this week in Philly. Thanks, Ed. We'll see you then.

Joseph John: The next question comes from Joseph's phone with TV Cowan. Please go ahead. Hi there, good morning, and thank you for taking my questions. Maybe the two on ebbs Rella uptake, I guess, are you seeing physicians? Obviously, the drug is launching. Well, are you seeing physicians wanted to use the drug earlier in the treatment line on their patients? Or, obviously, we talked about the target, you know, post phone dust market, but are you seeing them want to use it earlier?

Joseph John: And then second, we did see that phase three trial in adolescent patients. I guess what is the current uptake in adolescent patients between 12 and, I guess, 17, 18 years of age? And what sort of the eventual goal of this study would it be just to remove that line on the label that said safety and efficacy of the drug aren't available in pediatric patients as an 18 or is there something else that can be done with the out of the study. Thank you. Sure, thanks for the questions, Joe.

Michael Raab: And I'll ask Susan to speak to the Israel uptake. But first, let me address the pediatric adolescent question. That was an interim look at some of the data that was presented. We are still indicated only for adults with IVSC. So that hasn't changed. So any insights that we have, I can't think of any that say that we're treating adolescents because that's not indicated in our label. Norin's first line therapy, right? I mean, if you look at the way that we position this, it is a drug that's going to be used for patients that are no longer responding to the GCC agonist, specific feedback as to whether or not people are using it earlier.

Susan Rodriguez: Susan, you want to address that? Yeah, thank you. Actually, it's interesting for, if you recall, we were very focused approach, calling on the highest writing position for IVSC or decision position. For those positions, the patients they see in their offices daily have all been cycles, you know, have cycle through GCC agonist. So very important to think about the context on where we're focused with Israel. So for those positions, patients they see daily typically have already been treated with these products.

Susan Rodriguez: So it depends on how you define early, what we're finding is that because the patients meet already the prior authorization criteria, it's really the position's eagerness and identifying increasingly patients that they believe can benefit from a novel option. Remember that the overall label for Israel does support product use, but in our case, focusing on these high writing positions, it's really not an issue for the patients who walk into their office every day meet the prior off criteria.

Joseph John: Okay, perfect. Thank you very much. Thanks, Jeff.

Matthew Kaplan: The next question comes from Matt Kaplan with Leidenberg-Zalman. Please go ahead. Good morning, guys, and we're at on the strong quarter. Just focusing on Israel a little bit. Maybe Susan, can you talk about how patients are using Israel in a real world setting now versus the youth in the long-term clinical studies? Yeah, that actually what we're finding in our clinical data package really shows a rapid response to Israel and a sustained response to Israel, which is really a piece of our overall product profile and clinical data profile that physicians respond very favorably to.

Matthew Kaplan: And what we're finding in the real world is that that has been their experience that patients have responded to Israel and when they respond to Israel, they continue to have a sustained effect. I mean, obviously, you're not going, it's not going to be the right drugs for every single patient, but where the physician feedback really has been quite favorable on their treatment experience, consistent with their expectations based on the clinical data package. And Spirits has been tracking the launch over time, and persistently they're reporting either moderate or high satisfaction, which even when Israel and reporting low discontinuation rates.

Susan Rodriguez: All right. Thank you. And then I guess given the similarities between the IDF-C market and the hyper-spositemia. Thank you. Market in terms of going into these two markets with a novel mechanism of action combined with the unmet need. Can you talk a little bit about the learnings that you've had in the launch of Israela that you're going to apply to exosem?

Susan Rodriguez: Laura, excuse me please. Yeah, so yeah, you're spot on in terms of the parallels between the two markets and it's very important learning is the decision interest because of the limited options that they have had and they're recognized on that need their interest in the novel mechanism profile understanding the way the drug works uniquely and its clinical data package. So we're very much science based clinical based cell, patient based cell and also learn the criticality of emphasizing our commitment to patient access and affordability.

Susan Rodriguez: So physicians really, they prescribe based on patients needing a drug and it's important that we encourage them that they do not have to have a concern around the prior authorization process that we can support that. We can remind them that they have familiarity with that administrative process with other drugs they write and this one is no different and in this case, the patients that they're identifying who are in need of our novel drugs implicitly need to prior authorization criteria.

Susan Rodriguez: So all of that will be very critical in really supporting physician optate integrating novel mechanism exposure into their treatment pattern for these patients who have for so long have had no options outside of binders. And what I would add to that is you know the power of our deluxe assist and the comprehensiveness of that program when physicians utilize it in the way that it's been designed. I think they find an extraordinarily seamless program where they get confidence that if they're going to write a script that their patient is going to get it irrespective of whether or not it's a co pay down, it's an affordability issue, Medicaid, Medicare, our deluxe assist is there to accomplish an awful lot.

Susan Rodriguez: It's really the that program and how physicians and ultimately the patients who are receiving whether it's a driller than expose are finding that our deluxe assist is really doing the job that it's been designed to do.

Matthew Kaplan: Okay. Great.

Susan Rodriguez: And then last question. Can you provide a little bit more detail on the presence that you're going to have at the upcoming ASM meeting later this week? Sure. Susan? Yes, so we will have a very strong presence for so that at the upcoming ASM meeting, we will have a strong promotional booth presence, reflecting our whole launch campaign first. As we mentioned earlier in the narrative, we have a Salesforce out and deployed calling on apology healthcare providers as we speak so we'll have a strong promotional presence at ASM reminder at banners, you know, I think anywhere you look across the ASM floor, you're going to see expose and it's novel blocking mechanism campaign.

Susan Rodriguez: We also have a clinical scientific presence at ASM will have a product theater where we have opinion leaders presenting on the novel product profile of expose and its clinical data package. So we're quite encouraged about all of the events at ASM and hopefully look forward to seeing you there.

Matthew Kaplan: Great. Thanks. Thanks, Matt.

Laura Chico: The next question comes from Laura Chico with Wedgush Security. Please go ahead. This is Ingridon for Laura Chico. How should we be thinking about gross tenets dynamics for exfose or pricing over time? And what your study state rate expectations for gross tenets discount? And then just our last question is, could you perhaps review why is Rella as a competitor makes sense?

Michael Raab: Let me start with the last one first. It's a great question. Is Rella as a competitor makes sense? I think Susan is the best one to address that given what the experiences are that we're seeing in the field. And then I'll ask Justin to address gross tenets for exfose and discounts. Yes, so I think it's always a competitor. Let's just take a step back and I think it's some of the parallels that Matt alluded to.

Michael Raab: So as a novel mechanism drug, a specialty drug, there are, you know, the gross tenets components taken to account, the distribution, the mandated government rebates and other consideration that Johnson can touch on. Overall, the next question comes from the gross tenets between the two products. We're going to need to wait and see because the mix of patients, the pair mix of patients also determines the extent to which the government mandated rebates become a part of your, you know, gross tenets profile.

Michael Raab: But what is comparable between the two, which is an important comparator, is that there will not be incremental rebates that we're providing pairs for access to the drug access to the drug will be achieved by a prior authorization because for these patients in both cases, they have limited options and a physician prescribing our novel mechanism drug is because those options have not been adequate and they're in need of a new option. So that's how patients will access our drugs and therefore there will not be the incremental pay or rebate gross tenet item, which we get a lot of questions on that because they think for product launches, those are, those are rebates that are negotiating over time.

Michael Raab: So they start to, you know, integrate themselves into your gross tenet profile. That, that is one item that we can tell you today is not going to be something that's going to show up on the profile for either product. Just to follow up on the question, were you asking about the financial comparator or the clinical comparison to other drugs in the market financial comparator.

Justin Renz: Great. Thank you. Justin, do you want to address the rest of the net for exposing and discounting? Sure. Thank you. Susan, briefly touched on a note, just to elaborate, the most important thing for us is access and making sure the patient that access to it. And so our commercial strategy will be very similar to what we did with its relo, which means as Susan mentioned, we don't consider rebating to payers, but we will have our same generous commercial copay commercial buydown process.

Justin Renz: So if you have commercial coverage, we will take care of your copay 100%. And so as a result, we may expect to see the seasonality that we saw with the drill where in the first quarter of the year, when many patients plans reset, there may be deductibles where we will help the patient meet that need. And then it may improve, if you will, over the course of following subsequent quarters. So as a general premise with the drill, as you may have seen, our first quarter was just about 33%. It's come down into the high 20s over the course of this year. And I think it's fair to say, at least initially, we expect similar growth in that margin for exposing.

Justin Renz: Thank you.

Michael Raab: This concludes our question and answer session. I would like to turn the conference back over to President and CEO Mike Robb for any closing remarks. Thank you, everyone, for joining us this morning.

Michael Raab: Before I close the call, I want to recognize and remember the kidney community who we recently lost, Derek Forefang. Derek was an incredible person and patient advocate who met so much to so many people in the kidney community and beyond. For Ardelyx, Derek brought the patient voice to the Ardelyx scientific advisory board and was the driving force behind the creation of the Ardelyx patient advisory council. Derek was a warrior who, despite as many health challenges, always persevered, put others first and continued his mission to advocate for kidney patients with a smile.

Michael Raab: Derek's passing is a reminder to all of us that our job is not done. There are so many patients with CKD who need innovation and we need to continue investing in and develop the innovations with urgency for this community of patients.

Operator: With that, we can close the call. Thank you, operator. The conference has not concluded.

Operator: Thank you for attending today's presentation.

Operator: You may now disconnect.