Ardelyx, Inc. ARDX announced that it terminated its agreement with AstraZeneca PLC AZN whereby the former will regain rights to its portfolio of NHE3 inhibitors, including Ardelyx's lead pipeline candidate, tenapanor.
We note that both the companies entered into a collaboration agreement in Oct 2012 to develop and commercialize Ardelyx's internally discovered portfolio of NHE3 inhibitors including tenapanor.
In exchange for rights, Ardelyx will pay AstraZeneca an upfront fee of $15 million along with royalties equal to 10% of net sales of tenapanor by Ardelyx or a licensee, and 20% of non-royalty payments, which Ardelyx is entitled to receive from a new partner should it elect to license, or provide rights to develop and commercialize tenapanor. The total payment will not exceed $90 million. Ardelyx will also pay an additional $10 million for R&D and acceleration of reverting the program.
Afetr regaining rights, Ardelyx intends to initiate a phase III program on tenapanor for the treatment of constipation-predominant irritable bowel syndrome (IBS-C) in the fourth quarter of 2015. As per the termination agreement, AstraZeneca is required to complete the manufacture of clinical trial material necessary for the phase III program in IBS-C patients.
The company also plans to begin a phase IIb trial to evaluate the optimal dosing regimen of tenapanor for the treatment of hyperphosphatemia in dialysis patients in the fourth quarter of 2015. Ardelyx plans to initiate trials on the candidate in mid-2015.
Further, Ardelyx announced that it will develop a new product candidate, RDX022, for the treatment of elevated potassium. Ardelyx will be pursuing a 505b(2) regulatory pathway in the U.S.
Meanwhile, Ardelyx entered into an agreement to sell shares of its common stock and warrants to purchase common stock worth approximately $77.8 million in a private placement. These proceeds will be used for the development of tenapanor and RDX022.
Being a clinical-stage company, Ardelyx does not have any approved product in its kitty. Hence, we expect investor focus on further updates from tenapanor.
Shares of Ardelyx soared 39.7% on the news.
Ardelyx currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Actelion Ltd. ALIOF and Gilead Sciences Inc. GILD. Both carry a Zacks Rank #1 (Strong Buy).
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