Ardelyx(ARDX) - 2022 Q3 - Quarterly Report

Financial Performance - Total revenue for the three months ended September 30, 2022, was $4.986 million, a 325% increase compared to $1.173 million in the same period of 2021[175]. - Net product sales for IBSRELA amounted to $4.885 million during the three months ended September 30, 2022, attributed to the commercial launch of the product[175]. - Total revenue for the nine months ended September 30, 2022, was $7.980 million, a 12% decrease from $9.068 million in the same period of 2021[175]. - The decrease in total revenue for the nine months was primarily due to a $5.0 million development milestone earned in the prior year that did not recur[176]. - Product supply revenue decreased by 67.7% to $92,000 in the three months ended September 30, 2022, compared to $285,000 in the same period of 2021[175]. - Licensing revenue increased by 350% to $9,000 in the three months ended September 30, 2022, compared to $2,000 in the same period of 2021[175]. - Collaborative development revenue was $0 for the three months ended September 30, 2022, a decrease of $886,000 compared to $886,000 in the same period of 2021[175]. Operating Expenses - For the three months ended September 30, 2022, total operating expenses decreased by 38% to $26.9 million compared to $43.4 million in the same period of 2021[181]. - Research and development expenses for the three months ended September 30, 2022 were $7.5 million, a decrease of 68% from $23.7 million in the prior year[181]. - Selling, general and administrative expenses decreased by 5% to $18.7 million for the three months ended September 30, 2022, compared to $19.7 million in the same period of 2021[182]. Cash and Liquidity - Cash and cash equivalents as of September 30, 2022 totaled $61.6 million, down 15% from $72.4 million as of December 31, 2021[190]. - Total liquid funds, including cash and short-term investments, decreased by 22% to $90.6 million as of September 30, 2022, compared to $116.7 million at the end of 2021[190]. - As of September 30, 2022, the company had cash, cash equivalents, and investments totaling $90.6 million, consisting of bank deposits, money market funds, and high-quality fixed income instruments[207]. Debt and Financing - The company entered into a 2022 Loan Agreement providing for a senior secured term loan facility with $27.5 million funded at closing and an additional $22.5 million available upon FDA approval and revenue milestones[194]. - The 2022 Loan bears interest at a floating rate of 7.95% plus the greater of 0.10% or the one-month ICE rate, with an outstanding principal amount of $27.5 million as of September 30, 2022[208]. - Net cash provided by financing activities decreased by $11.9 million, with net proceeds from common stock issuance totaling $52.8 million in the nine months ended September 30, 2022, down from $67.2 million in the same period in 2021[204]. Product Development and Regulatory - The first product sales of IBSRELA were recognized in March 2022, targeting the 11 million people in the U.S. affected by IBS-C[134][135]. - The company expects to continue incurring substantial operating losses as it commercializes IBSRELA and seeks approval for XPHOZAH[133]. - XPHOZAH is being developed for the control of serum phosphorus in adult patients with CKD on dialysis, with three Phase 3 trials involving over 1,000 patients meeting their primary endpoints[137]. - The company received a Complete Response Letter from the FDA regarding XPHOZAH, indicating the treatment effect was characterized as "small and of unclear clinical significance"[138]. - The company is evaluating a new formulation for RDX013 after a Phase 2 trial did not meet its primary endpoint but showed proof of concept in lowering serum potassium levels[142]. Inventory and Future Outlook - As of September 30, 2022, the company had approximately $28.8 million of inventory on hand that was previously expensed as research and development[164]. - The company expects revenue fluctuations in future periods based on the success of IBSRELA commercialization and regulatory approvals for other products[163]. - The company anticipates future funding requirements will depend on product revenue generation, collaboration partnerships, and the timing of milestone payments[197]. Other Financial Information - The company incurred an accumulated deficit of $790.8 million as of September 30, 2022, raising substantial doubt about its ability to continue as a going concern[190]. - Interest expense for the three months ended September 30, 2022 was $886,000, a decrease of 27% from $1.2 million in the same period of 2021[184]. - The company recognized a non-cash interest expense related to the sale of future royalties of $831,000 for the three months ended September 30, 2022[187]. - Other income for the three months ended September 30, 2022 increased to $704,000, compared to a loss of $134,000 in the same period of 2021, reflecting unrealized gains on foreign currency[188]. - The company sold 32.6 million shares during the three months ended September 30, 2022, generating gross proceeds of $35.1 million at an average price of approximately $1.08 per share[193]. - The estimated fair value of the 2022 Exit Fee is recorded as a derivative liability, included in accrued expenses and other current liabilities[194]. - The company had no off-balance sheet arrangements as of September 30, 2022[205].