On Wednesday, Citi adjusted its outlook for Ardelyx, Inc (NASDAQ: NASDAQ:ARDX), reducing the biopharmaceutical company's price target to $10 from $14, while maintaining a Buy rating on the stock. The revision comes in the wake of increased commercial uncertainty surrounding Ardelyx's hyperphosphatemia treatment, XPHOZAH™.
The firm's analysis recognized that recent disclosures regarding the TDAPA strategy for XPHOZAH™ have significantly impacted the projected sales for the treatment. Consequently, this has led to a substantial decrease in the price target. Despite the market's negative response to this news, which saw Ardelyx's stock price fall by 30% on Wednesday, Citi reaffirms its Buy rating.
Citi's stance is underpinned by the belief that Ardelyx's current stock price does not reflect the underlying value of its other approved drug, IBSRELA. The firm suggests that the market reaction, while understandable, presents a buying opportunity for investors, given the disparity between the stock's trading price and the base value of IBSRELA.
The price target adjustment by Citi reflects a recalibration of expectations for Ardelyx in light of the new information regarding its commercial strategy. The firm's maintained Buy rating indicates a confidence in the company's long-term prospects despite the immediate market turbulence.
In other recent news, Ardelyx, Inc. reported a significant increase in its product-related revenue for the first quarter of 2024, reaching $45.6 million. This growth was driven by its products IBSRELA and XPHOZAH, which contributed $28.4 million and $15.2 million in net sales revenue respectively. The company also maintained a robust cash position, reporting $202.6 million at the end of the quarter.
In a strategic move, Ardelyx opted not to include its kidney disease drug XPHOZAH in the Medicare Prospective Payment System (PPS), with the goal of ensuring patient access to the drug. The company is also supporting bipartisan legislation aimed at extending the exclusion of oral-only medications from the Medicare ESRD PPS, to maintain patient access to XPHOZAH.
Meanwhile, Ladenburg Thalmann adjusted its outlook on Ardelyx shares, reducing the price target to $12.50 from the previous $14.50, while maintaining a Buy rating. This decision followed a reassessment of the potential market performance of XPHOZAH, leading to a more conservative sales forecast. Despite the reduction in the price target, the firm emphasized its continued confidence in the stock, focusing primarily on the value of IBSRELA, another Ardelyx product, which is considered to contribute $10 per share to the overall price target.
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