Analyst Sees This Kidney Disease Company's Stock Could Rise Sixfold, But Lists Two Issues

Analyst Sees This Kidney Disease Company's Stock Could Rise Sixfold, But Lists Two Issues
  • Piper Sandler raised its price target on Ardelyx Inc ARDX to $8 from $3 and upgraded to Overweight from a Neutral rating.
  • The upgrade follows a surprisingly positive advisory committee vote of 9-4 in favor of tenapanor as monotherapy and 10-2 (1 abstention) as combo therapy for controlling serum phosphorus in dialysis-dependent chronic kidney disease (CKD). 
  • While we found the vote itself remarkable, it was more meaningful that the vote was not split along “party lines,” the analyst wrote.
  • To a significant surprise, the FDA issued a CRL in July 2021 in this indication, despite the company having run two large, positive Phase 3 trials with the FDA’s input on the design and execution of those trials. 
  • In a rare sequence of events, ARDX appealed the CRL, got its day in court, and now, yet another rejection is still very much a possibility. FDA could ask for more data in the combo treatment setting.
  • If granted, the company will resubmit the NDA, which would undergo a two or six month-review. The exact timing for potential resubmission is not clear at this point. For now, Piper models a ~YE23 approval and 2024 launch. 
  • The second issue is cash. The company currently has <12 months of cash at ~$91 million.
  • Price Action: ARDX shares are up 1.16% at $1.74 during the premarket session on the last check Friday.
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