- The stock price of Ardelyx Inc (NASDAQ: ARDX) fell by over 17% today. This is why it happened.
The stock price of Ardelyx Inc (NASDAQ: ARDX) – a biopharmaceutical company focused on the discovery, development, and commercialization of innovative first-in-class medicines to improve treatment for people with kidney and cardiorenal diseases – fell by over 17% today. Investors are responding positively to Ardelyx announcing that the company has met with the U.S. Food and Drug Administration (FDA) in a Type A meeting, but was not provided sufficient clarity on what constitutes “clinical relevance of the magnitude of treatment effect” and continues to await additional information regarding the path forward for the company’s New Drug Application (NDA) for tenapanor for the control of serum phosphorus in adult patients with chronic kidney disease (CKD) on dialysis.
The company had announced that on October 12, 2021, it began implementing a restructuring plan to further reduce operating costs and better align the company’s workforce with the needs of its business following the receipt of a complete response letter (CRL) from the FDA on July 28, 2021, regarding the company’s NDA for the control of serum phosphorus in adult patients with CKD on dialysis, and the results to date of the subsequent Type A meeting.
This restructuring plan is expected to be completed in December 2021. And in connection with the restructuring, the company estimates that it will incur aggregate restructuring charges of approximately $2.3 million, which will be recorded primarily in the fourth quarter 2021, related to severance payments and other employee-related costs. The company is expecting that the workforce reduction will decrease its annual cash compensation costs by approximately $18.1 million. At the end of the third quarter ended September 30, 2021, Ardelyx had $141.7 million in cash and cash equivalents (unaudited).
In July 2021, Ardelyx had announced that it had received a CRL from the FDA regarding the company’s NDA for tenapanor for the control of serum phosphorus in adult patients with CKD on dialysis. And according to the CRL, while the FDA agrees that “the submitted data provide substantial evidence that tenapanor is effective in reducing serum phosphorus in CKD patients on dialysis,” they characterize the magnitude of the treatment effect as “small and of unclear clinical significance.”
The FDA had noted that for the application to be approved, Ardelyx needs “to conduct an additional adequate and well-controlled trial demonstrating a clinically relevant treatment effect on serum phosphorus or an effect on the clinical outcome thought to be caused by hyperphosphatemia in CKD patients on dialysis.” There were no safety, clinical pharmacology/biopharmaceutics, CMC or non-clinical issues identified in the CRL.
Ardelyx has yet to receive minutes from the Type A meeting held October 1, 2021. And the discussion at the meeting did not provide clarification on the key requirements: the FDA’s definition of clinical significance and relevant treatment effect.
“Given that we have conducted the requisite registration studies, which met all primary and key secondary endpoints with no safety or other identified issues, we continue to be extremely disappointed and surprised by the lack of clarity from the FDA on the next steps to resubmit our NDA. In order to preserve our cash resources and extend our cash runway, we have made the extremely difficult decision to implement a restructuring plan that includes a significant reduction in force. We have retained key employees needed to continue to support the regulatory process and work to achieve our goal to gain approval for tenapanor for hyperphosphatemia. While a setback for our company, we believe the delay in approval represents a more significant hardship for patients who are being denied access to tenapanor, a much-needed, novel therapeutic alternative with a different mechanism of action. We remain dedicated to providing these underserved patients, of which 77% are unable to maintain target phosphorus levels despite active treatment with currently available therapies, another treatment option.”
— Mike Raab, president and chief executive officer of Ardelyx
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