Ardelyx chops a third of its staff after stock-crushing failure in chronic kidney disease
A couple of weeks after the FDA turned down Ardelyx’s chronic kidney disease candidate, shocking analysts and CEO Mike Raab, the company is axing 33% of its employees to deal with the loss.
Ardelyx shared in an SEC filing it’s cutting 83 employees in a restructuring plan that will be implemented this month. The plan is expected to save the company about $17 million in cash compensation annually, according to the filing.
The company’s stock $ARDX dipped more than 2% in pre-market trading, with shares pricing in at $1.64 apiece. That’s a big fall from a few weeks ago, when shares were trading at $7.70 apiece.
News of the cuts came on July 29 — one day after Ardelyx formally received a complete response letter rejecting tenapanor. The company says it first heard from the agency a couple of weeks before that, though the rejection was not yet final. The team asked for a meeting with the FDA to discuss the drug’s shortcomings, but said they were turned down.
According to Ardelyx, the agency was concerned with tenapanor’s efficacy, raising questions about the magnitude of improvement in Phase III trials and whether that would translate to real benefit for CKD patients.
Raab called the CRL “extremely disheartening and disappointing,” noting that the drug had hit its primary endpoint in three pivotal trials across 1,000 patients. However, those studies focused on biomarkers — in this case, reduction of phosphate levels — rather than clinical outcomes. Also, 16% of patients in the most recent trial withdrew because of diarrhea.
Tenapanor had initially failed in CKD patients with diabetes, and afterward, Ardelyx began developing it for a subset of kidney patients with hyperphosphatemia — an overabundance of phosphate in the blood, which can cause bone or organ damage and increase the risk of heart attacks.
Raab wasn’t the only one who thought tenapanor was on a sure-fire path to approval. When the company’s last trial read out in December 2019, SVB Leerink’s Ami Fadia wrote, “we believe … approval is now all but certain.” Even when the FDA extended its review of the drug back in April, Jefferies’ Chris Howerton expressed confidence in the drug’s approval.
The drug was also approved for IBS last year, but that’s a minor win compared to a potential approval in CKD.