Ardelyx deserted but far from depressed

When Ardelyx’s tenapanor failed a phase II trial in chronic kidney disease the company was unusually forthcoming about the possibility that partner AstraZeneca might back out.

If this was an effort to manage expectations, it has paid off handsomely. As of yesterday, Ardelyx will be developing tenapanor alone, and yet its shares are up 40%. True, it has also unveiled a new drug that will soon enter clinical trials and raised $78m in a private placement, but time was the loss of a major partner would have seen shares fall, not rise.

That Ardelyx is to pay Astra $25m to regain tenapanor rights suggests that it is eager to accelerate clinical development. The project seems to be dead when it comes to diabetic patients with chronic kidney disease, but the company is convinced the NHE3 inhibitor has a future in IBS (Kidney disease failure complicates Astra’s Ardelyx choice, May 6, 2015).

Regaining tenapanor will allow Ardelyx to push forward with its development in constipation-predominant IBS; a phase III trial is set to start towards the end of this year. At around the same time, it will begin a phase IIb trial of tenapanor in hyperphosphataemia. If the trials are successful Ardelyx will seek a new partner, at least for IBS.

Out of nowhere

The real surprise on the clinical front is the new drug, which has rocketed out of nowhere straight into phase III. The exact mechanism by which RDX022 is to treat hyperkalaemia is not clear – all Ardelyx has said is that it is a non-absorbed polymer which will enter phase III trials late next year.

RDX022 will follow the 505(b)(2) regulatory pathway in the US, suggesting that it may be a new formulation of an older compound. More details ought to emerge at the company’s analyst day next month.

Analysts at Leerink wrote that better tolerability and more convenient dosing than potassium scavengers will be desirable if it is to succeed in hyperkalaemia. And if it does, the company might seek additional capital to fund launch activities for ’022.

This flurry of clinical research will be at least partly funded by the $77.8m net capital raise. Ardelyx puts the cost of its IBS-C research at $60-$85m, and the phase IIb hyperphosphataemia trial should be fairly inexpensive.

That does not mean Ardelyx’s worries are over. The IBS market, including IBS-C, is more or less sewn up by Valeant with Linzess and Takeda with Amitiza. Tenapanor will have to at least equal these drugs if it is to build sales. Leerink analysts suggest that whatever its success, under the presumed partnership Ardelyx could receive a mid-20% royalty.

At least for the nephrology indications Ardelyx could go it alone with a small specialist sales force. But earlier trials of tenapanor in hyperphosphataemia have associated the drug with worrying levels of diarrhoea.

Rise though they did yesterday, the group’s shares are still way down from their $27-range before the kidney disease failure. Even so, Ardelyx is trying hard and seems to have the support of its investors. It seems to be down, but not out.

To contact the writer of this story email Elizabeth Cairns in London at elizabethc@epvantage.com or follow @LizEPVantage on Twitter

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