Ardelyx Inc. (ARDX, Financial) just put out data from a phase III study of its lead development asset – tenapanor. The study was the first of two planned phase IIIs with the combined data from each expected to underpin a registration submission with the Food and Drug Administration (FDA) on completion.
The news hit press as positive with the drug hitting against its primary endpoint and also performing against seven of eight secondary endpoints. Across the session subsequent to the release, however, Ardelyx took a close to 40% hit on its pre-news market capitalization.
Here's what happened, why Ardelyx is down on what at first glance looks to be positive news and what happens next.
As mentioned, the drug is called tenapanor and it's under investigation as a potential therapy for irritable bowel syndrome with constipation, or IBS-C. For those unfamiliar with the condition, it's a gastrointestinal (GI) disorder characterized by significant abdominal pain and constipation, when a bowel movement is difficult due to insufficient/decreased amount of fluid in the gastrointestinal tract, or happens less often than normal for the same reason. It's a significant market in the U.S. (around 11 million people reportedly suffer from the condition), and it's a pretty strong unmet need.
The drug is part of a family of drugs called NHE3 transporter inhibitors. NHE3 is a protein that – in a normal and healthy environment – is responsible for the maintenance of sodium balance in the body. We don't really need to get too deep into the science on this one; suffice to say that the NHE3 protein, through what are called transporters and and antiporters, remove sodium (and aid its excretion through urine) in the former and protects the sodium from removal through urine through the latter.
Tenapanor has a mechanism of action (MOA) based on the transporter side of the equation. It stops the body from removing sodium in the GI. An increased level of sodium leads to an increased level of fluid in the gut, which loosens the stool, and in doing so, helps to relieve constipation.
So that's the MOA, and the data that just hit press suggest that it's valid. The study, called T3MPO-1, was a 12-week, double-blind trial with a four-week, randomized withdrawal period conducted in a total of 610 patients meeting what's called the ROME III criteria for the diagnosis of IBS-C. Keep this participant number in mind – we'll come back to it.
The primary endpoint was what's called the combined responder rate for six of 12 weeks and was defined at least a 30% reduction in abdominal pain and an increase of one or more complete spontaneous bowel movements (CSBM) in the same week for at least six of the 12 weeks of the treatment period.
The numbers showed that a greater proportion of tenapanor-treated patients compared to placebo-treated patients (27.0% vs. 18.7%, p=0.02) hit against this definition, and that's the primary endpoint hit that's grabbing the headlines.
Looking at the breakdown elements, these numbers came in at 33.9% (active) and 29.4% (control) respectively in CSBM, and 44.0% (active) and 33.1% (control) in abdominal pain.
So what's the issue?
Well, with this space, safety and tolerability are almost as important as efficacy. Specifically, as it relates to IBS-C, the primary concern is diarrhea. The reason for this isn’t too complicated – basically, the drug has to strike a balance between condition and resolution. If it misses this balance, the diarrhea side effect comes into play and, in many cases, could negate the positive impact of the treatment.
So that's a number that was really under the spotlight for this drug and this study. How may patients got diarrhea and – just as importantly – how many of these patients chose to discontinue the study because of the severity of the side effect?
In this instance, then, these numbers came in at 14.6% and 5.9%. Again, at first glance, and just as with the endpoint hit, these numbers look pretty good. When considered against a backdrop of competition assets, however, they aren’t. Ardelyx has two primary competitors with this drug – one called Trulance, developed by Synergy Pharmaceuticals Inc. (SGYP, Financial), and one called Linzess, an Ironwood Pharmaceuticals Inc. (IRWD, Financial) asset.
The latter is standard of care in both IBS-C and a condition called chronic idiopathic constipation (CIC). This latter condition is another that Ardelyx is trying to target with tenapanor, and it's a condition for which the above-noted Trulance is already approved. Trulance also has an sNDA with the FDA right now for an expansion from the CIC population to the IBS-C population.
Basically, then, Ardelyx is competing with Synergy and Ironwood in both CIC and IBS-C, and if it's going to attract a decent market share in both of these indications, it needs to offer patients in each a more attractive safety/efficacy balance than its competitors.
When compared to Linzess (the already approved in both indications SOC), things look good. Linzess logged a 20% diarrhea rate in its approval data and a discontinuations due to severity rate of 5% (versus the above noted 14.6% and 5.9% for tenapanor). Looking at the numbers compared to those of Trulance, though, doesn’t paint such a rosy picture. In the study that underpinned the sNDA that's currently with the FDA in the U.S., the drug performed pretty much on par with tenapanor from an efficacy perspective, but for the two key numbers we've been looking it, Trulance far outperforms tenapanor – 4.3% and 1.2%.
The bottom line here, then, is that these two drugs are facing off against one another, and Trulance looks far more attractive from a patient's perspective than does tenapanor. This doesn’t necessarily mean tenapanor can't pick up any of the market – these things are often dictated by many more inputs than a safety profile – but it does mean that the market is likely going to weigh in favor of Trulance, and by proxy, Synergy.
This, then, gives markets an opportunity.
Not in Ardelyx, at least not long term. The company will likely recover a portion of its lost value on this (what is likely an) oversell, and chances are we'll see some decent revenues from the asset, especially if it can expand to cover both IBS-C and CIC.
The opportunity on the back of this data is to pick up an exposure to what it means for Synergy. These numbers have essentially handed the impetus to the latter, and it should draw benefit from this edge going forward.
Disclosure: The author does not own any of the stocks discussed in this article and does not intend to open a position in any stocks discussed within the next 30 days.
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