Earnings call transcript: Ardelyx tops growth goals in Q3 2026 as stock jumps

Ardelyx said third-quarter revenue rose 19% from a year earlier and its net loss narrowed to $700,000, as the biotech company pushed closer to profitability and saw its shares rise 9.57% in after-hours trading to $3.32. Product revenue reached $125.5 million, below the $129.22 million forecast, but investors appeared to focus on strong demand for IBSRELA, improving financial leverage and reaffirmed full-year guidance.

Ardelyx posted a solid third quarter, with both of its commercial products contributing to growth. IBSRELA continued to lead the business, helped by higher demand, a larger sales force, expanded reimbursement support and a new direct-to-consumer advertising campaign. XPHOZAH also grew, though at a slower pace, as the company navigated a complicated dialysis reimbursement environment.

The quarter showed a business that is still spending heavily to support growth, but with clear signs of operating leverage. Gross profit margin remained above 95%, and the company said it ended the period with $285.3 million in cash, equivalents and short-term investments. That cash position gives Ardelyx room to keep investing in its pipeline while it works toward profitability in 2027. The company maintains a strong current ratio of 3.34, indicating liquid assets comfortably exceed short-term obligations—a key financial health indicator as it scales operations.

Ardelyx reported product revenue of $125.5 million versus the $129.22 million forecast, a shortfall of about $3.72 million, or roughly 2.9%. No EPS actual was provided, so a direct earnings-per-share comparison was not available.

The revenue miss was modest, especially against the company’s strong year-over-year growth and narrowing loss. Investors seemed to view the quarter as broadly constructive rather than disappointing, likely because the underlying business trends remained healthy and management kept its full-year outlook unchanged.

The stock closed the regular session at $3.03 and rose to $3.32 in after-hours trading, a gain of $0.29, or 9.57%. The move pushed the shares closer to the middle of their 52-week range of $2.955 to $8.4, after spending much of the year near the low end. The stock has fallen 56% over the past six months and remains down 48% year-to-date, giving the company a market capitalization of $754 million. According to InvestingPro analysis, the stock appears undervalued at current levels, with a Fair Value of $3.46—making it one to watch on the platform’s most undervalued stocks list.

The reaction suggests investors were encouraged by the company’s revenue growth, improving loss profile and confidence in its 2027 profitability target. The after-hours move also indicates that the market gave more weight to the long-term commercial story than to the small revenue miss.

Ardelyx reaffirmed its full-year 2026 guidance. The company expects:

Management also pointed to several growth drivers ahead. The company said enrollment in its ACCEL Phase III trial for IBSRELA in chronic idiopathic constipation has been completed ahead of schedule, with top-line results expected in the second half of 2027. It also said it will continue to invest in its sales force, reimbursement support and direct-to-consumer marketing. Wall Street analysts see significant upside potential, with price targets ranging from $8 to $18. For deeper insights into Ardelyx’s growth trajectory, investors can access the comprehensive Pro Research Report on InvestingPro, which distills complex data into actionable intelligence for one of 1,400+ US stocks covered.

Chief Executive Mike Raab said the company’s products are “well-positioned for significant long-term growth,” citing a stronger financial position and a robust patent portfolio.

He also said IBSRELA is “a promotionally sensitive brand,” explaining why the company expanded its sales force and launched its first direct-to-consumer campaign. In testing, 91% of IBS-C patients said they would ask their doctor if IBSRELA was right for them.

Chief Financial Officer Sue Hohenleitner said the company’s “greater than 95% gross profit margin and prudently managed OPEX” should help operating margin expand over time, calling that “the leverage of this business.”

Analysts focused on three main issues: access, XPHOZAH and the CIC pipeline.

On access, management said it is using several tools at once, including field reimbursement support, payer discussions and digital efforts, rather than relying on a “magic bullet.” The company said physicians are highly convinced in IBSRELA, but patients still have to move through the prior authorization process.

On XPHOZAH, executives said they want to wait until the end of the TDAPA period and see how 2027 unfolds before giving a longer-term revenue framework.

On the CIC program, management said the ACCEL trial’s endpoint is durable response, defined as maintaining the constipation endpoint without pain for three of the last four weeks of treatment. Executives said the market is larger than IBS-C, but most CIC patients are treated with over-the-counter products, so the company expects to target treatment-experienced patients rather than first-line use.

Paul, Conference Operator: Welcome to the IBSRELA third quarter 2026 earnings call. All participants will be in a listen-only mode. I would now like to turn the conference over to Lisa Caperelli, SVP, Investor Relations and Corporate Communication. Lisa, you may begin.

Lisa Caperelli, SVP, Investor Relations and Corporate Communication, Ardelyx: Thank you, Paul. Good afternoon, and welcome to our third quarter 2026 financial results and business update call. Earlier today, we issued our earnings release, which can be found on the investor section of our website at ardelyx.com. Slides that accompany today’s call can also be found on our website. On today’s call, I am joined by Mike Raab, President and CEO of Ardelyx, and Sue Hohenleitner, our Chief Financial Officer. Before we begin, I’d like to remind you that some of the statements made during the call today are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements involve a number of risks and uncertainties that may cause our actual results to differ materially from those expressed or implied, including those described in our annual report on Form 10-K, our quarterly report on Form 10-Q, which was filed today, and from time to time in our other documents filed with the SEC. These forward-looking statements speak only as of today’s date, and while we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so, even if our views change. I will now pass the call over to Mike. Mike?

Mike Raab, President and CEO, Ardelyx: Thank you, Lisa. Good afternoon, everyone, and thank you for joining us today. Ardelyx is a company focused on developing and commercializing innovative medicines, and today, with IBSRELA and XPHOZAH, we have two first-in-class medicines that in the third quarter generated over $125 million in revenue, up 19% from a year ago. With a strengthened financial position and a robust patent portfolio, our products are well-positioned for significant long-term growth. Our focus is now to leverage that foundation and to build a pipeline to create long-term value. Our third quarter’s performance bolsters our confidence as we focus on executing on our priorities: accelerating the growth of IBSRELA, maintaining XPHOZAH’s momentum, building and expanding our pipeline, and delivering strong financial results. Starting with IBSRELA. In Q3, IBSRELA generated revenue of $96.3 million, representing 23% year-over-year growth.

HCP confidence in IBSRELA remains high, with demand reaching all-time highs as the number of total writers, total prescriptions, and market share continues to grow. This growth supports our full-year guidance and reinforces our long-term view of achieving $1 billion in annual revenue. Critical to that is our ongoing work to thoughtfully eliminate the payer friction HCPs and patients experience when first starting IBSRELA. In our efforts to alleviate some of this friction in the third quarter, we began to see progress that gave us confidence that these initiatives are beginning to take hold. As we’ve noticed in the past, IBSRELA is a promotionally sensitive brand, and mid-year, we expanded our sales force to increase reach and frequency to our target HCPs and continue to build the top of the funnel demand. In addition, we doubled our field reimbursement team to help HCPs navigate the prior authorization landscape.

We’re also continuing our efforts to transition writers to utilize the IBSRELA Pharmacy Network, as we know that when the IPN is utilized, patients experience two to three higher fulfillment rates, faster fill times, and at least one additional refill per patient on an annual basis. We will continue to assess all tools at our disposal to streamline the prior authorization process, such as how best to leverage digital and AI tools. Our teams are executing at a high level, translating into notable results with total prescriptions growing. on September 1st, we embarked on a highly targeted effort to raise awareness of IBSRELA with IBS-C patients and launched our first direct-to-consumer ad. This highly targeted ad has a clear call to action and is intended to reach more than 10 million people through outlets such as Netflix, Hulu, Prime Video, and Disney+.

In the testing phase of the ad with IBS-C patients, 91% of them said that they would ask their doctor if IBSRELA was right for them. In a short time, we’ve seen that the campaign has delivered meaningful impressions and is driving an increase in traffic to our consumer-focused website. These are early positive indicators, and we continue to monitor how this increased awareness translates into new patient starts. As you know, the IBS-C market is very large. Over 7 million prescript