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Presentation

Ardelyx, Inc. misses on earnings expectations. Reported EPS is $-0.15 EPS, expectations were $-0.13.

Operator: Welcome to the Ardelyx First Quarter 2026 Earnings Call. All participants will be in a listen-only mode. I would now like to turn the conference over to Unknown Speaker, Senior Vice President of Corporate Communications and Investor Relations. Unknown Speaker, you may begin. Thank you, Ross.

Unknown Speaker: Good afternoon, everyone, and welcome to our first quarter 2026 financial results and business update call. Earlier today, we issued our earnings release, which can be found on the Investors section of our website at ardelyx.com. Slides that accompany today’s call can also be found on our website. On today’s call, I am joined by Michael Raab, President and CEO of Ardelyx, who will share our Q1 progress towards our 2026 priorities. Eric Foster, Chief Commercial Officer, will provide an update on the performance of Ibsrela and Exposa. And Sue Hohenleitner, our Chief Financial Officer, will provide some key highlights from our financial results. Before we begin, I would like to remind that some of the statements made during the call today are forward-looking statements, which are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in our Annual Report on Form 10-K, our Quarterly Report on Form 10-Q, which was filed today, and from time to time in our other documents filed with the SEC.

While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligations to do so, even if our views change. I will now pass the call over to Michael Raab. Michael?

Michael Raab: Thank you. Good afternoon, everyone. It is great to be with all of you today. Before we dive in, I want to take a moment to welcome Lisa to the team. We are excited to have her on board leading our IR efforts as our new head of investor relations. 2026 is poised to be another significant year of growth for our company, and we are already off to a great start. At Ardelyx, we are building an innovative pipeline of medicines for patients with unmet medical needs. Our first quarter performance reinforces our confidence in the strategy we have laid out and in our ability to capture the opportunities ahead to create long-term value. As we build on this momentum, our focus is on executing on our four key priorities: accelerating the growth of Ibsrela, maintaining the Exposa momentum, building and expanding our pipeline, and delivering strong financial results.

Starting with Ibsrela. In the first quarter, our disciplined commercial execution drove 58% year-over-year revenue growth. With more than 7 million prescriptions written for IBS-C-indicated medicines last year, Ibsrela is well positioned as a differentiated mechanism for patients who continue to experience symptoms despite treatment with a secretagogue. Our strategy continues to positively impact demand drivers and today, Ibsrela is helping tens of thousands of patients with IBS-C, and we remain on track to deliver at least $1 billion in annual revenue in 2029. With Exposa, our patient-first strategy continues to guide our execution with demand growing. Today, more patients have access to Exposa than ever before, and we remain committed to supporting patients irrespective of payer coverage.

Next, our pipeline. As a result of our performance and execution, we are at a stage where we have the financial flexibility to further invest in our pipeline, positioning our company for durable long-term growth. Earlier this year, we initiated the EXCEL trial, a Phase 3 clinical trial evaluating Ibsrela for chronic idiopathic constipation, or CIC, as part of our efforts to expand our label and to reach more patients. This trial has rapidly gained attention from clinicians and patients alike, and all pre-identified sites have been initiated in under four months and are engaged in patient recruitment activities. We remain on track to complete enrollment by year-end and to announce topline data in 2027. If EXCEL reads positive, Ibsrela will expand treatment options for more patients.

In addition, we have a strategy to expand the use of Ibsrela which may help pediatric patients with IBS-C and has potential to extend SNDA-related patent life for an additional six months. Our ongoing pediatric program consists of several studies evaluating Ibsrela in patients with IBS-C and functional constipation, the pediatric equivalent to adult CIC. This effort is an example of our ongoing strategy to extend tenapanor, which includes our recently announced Orange Book-listed 2099 patent covering the commercial formulations of Ibsrela and Exposa, building additional value for these franchises. Also included in our pipeline is our development program for our next-generation NHE3 inhibitor, 531, which continues to progress through IND-enabling studies, building on our foundational experience in NHE3 inhibition.

531 may extend our reach into other therapeutic areas, which would drive additional value for shareholders. We are excited for this next phase of Ardelyx’s evolution as we execute on our pipeline and explore various external opportunities that align with our mission and core capabilities and meet our disciplined capital allocation approach. We have been growing our team at Ardelyx and now have a deep bench of talent at the executive level. I am excited with the two newest additions who have joined the executive team: Felicia Attenberg, our Chief Legal Officer, and Dr. Rajani Dharavahi, our Chief Medical Officer. Felicia’s broad legal training and experience as a business partner, as well as Rajani’s experience advancing innovative therapies from development to patients, will be beneficial to Ardelyx as we build upon our commercial foundation, invest in our pipeline, and focus on delivering meaningful outcomes for patients.

I would also like to take a moment to thank Dr. Laura Williams, our Chief Patient Officer, who has been serving the dual role of CMO and CPO while helping to guide us on this journey and has done an outstanding job advancing our clinical programs. Thank you, Laura. Finally, we remain in a position of financial strength. Our Q1 revenue performance positions us to reiterate our previously communicated full-year 2026 revenue guidance for Ibsrela and Exposa. We have the flexibility to allocate capital to both near-term commercial execution and investments that would expand our pipeline to drive long-term growth and value for the company, our patients, and our shareholders. I am confident in our strategy and our team’s ability to deliver on our key priorities.

Together, we are advancing a growing, differentiated, innovative pipeline of medicines that address unmet patient needs. With that, I am pleased to turn the call over to Eric to walk you through our commercial success. Eric?

Eric Foster: Thank you, Michael. It is great to be with you all again. In Q1, we continued to build upon the incredible commercial momentum and execution and performance from last year. Ibsrela grew in total writers, new and refill prescriptions, and total prescriptions year over year. For Exposa, we continue to ensure patient access regardless of payer coverage, which drove an increase in total expenses and paid prescriptions year over year. Our commercial team remains focused on expanding adoption among HCPs, creating greater brand awareness for patients, and ensuring the fulfillment of written prescriptions. Our investments to improve the HCP and patient journey and expand access to our medicines have turned into consistent year-over-year growth for both Ibsrela and Exposa.

Let me start with Ibsrela. Ibsrela continues to be our main revenue driver and our commercial execution generated 58% product revenue growth year over year. During the quarter, we saw robust demand trends, notwithstanding expected first-quarter market dynamics and temporary disruption from two severe winter storms. Our growth in demand is a result of our efforts to capture more of the IBS-C market in 2026 by driving Ibsrela as the first-line therapy following a secretagogue failure. Ibsrela is a first-in-class innovative medicine with a winning and sustainable position in a growing market with nearly 7 million prescriptions written last year. Through research, we know that as many as 77% of patients on a secretagogue continue to experience symptoms despite treatment, demonstrating a high unmet medical need for additional options.

I will now walk you through our key demand drivers which include growing both breadth and depth of writing, increasing patient activation, and lastly, improving prescription pull-through and fulfillment. Beginning with growing breadth and depth of writing. We are focusing on high-writing health care providers who are responsible for approximately 50% of the IBS-C total prescriptions, and our field sales team is driving greater reach across those targets. These efforts resulted in an increase in the number of writers in Q1, underscoring the effectiveness of our commercial activities. We are also seeing deeper prescribing within existing accounts. When an HCP is familiar with the access path and sees positive patient experiences, they are more likely to prescribe Ibsrela more broadly.

Our end-market messaging focused on Ibsrela’s differentiated mechanism of action and its established safety and efficacy profile is resonating and continuing to drive HCPs to prescribe Ibsrela. With respect to patients, the IBS-C population is highly engaged in managing their condition. As awareness of Ibsrela’s effectiveness and safety increases, patients are more likely to initiate conversations with their physicians, which in most cases results in a prescription. We continue to focus on identifying and reaching patients through multifaceted marketing efforts. We are currently seeing robust engagement across digital and social channels while we continue to explore new channels to reach and engage with the sizable IBS-C patient population looking for something different.

One such initiative is through our partnership with the LPGA, where we will educate, empower, and mobilize patients to take control of their IBS-C by seeking new information and talking to their doctor about their symptoms and the treatment options that are available. We chose to partner with the LPGA due to their clear strategic alignment between the LPGA’s legacy of empowering women and Ardelyx’s mission to empower patients to proactively manage their health. Patients deserve open dialogue about their symptoms and their options, and we are excited to partner with the LPGA to accomplish this goal. Lastly, our full commercial organization is focused on driving prescription pull-through to help ensure that all patients prescribed Ibsrela get on treatment.

Based on prior success, we are increasing the presence of our field reimbursement managers who support patient access. This team is talking directly to prescribers and supporting them with account education and patient pull-through to improve patient access. To drive further adoption, we are continuing to encourage HCPs to send prescriptions to the Ibsrela Pharmacy Network, a limited group of specialty pharmacies that offer a patient-centric, high-touch experience and who are best equipped to handle prior authorizations and the payer hurdles that can restrict patient access. As prescriptions go through our specialty pharmacy network, fulfillment rates are higher, and we see on average an additional refill per year for patients. This is a high-value opportunity that we will continue to help achieve our projected revenue growth.

We are united in our purpose to make a meaningful difference to patients impacted by IBS-C, and we are moving with urgency to capture the opportunities ahead and realize our full potential. Moving on to Exposa. Our high-performing, patient-focused Exposa team is committed to achieving the full potential of Exposa and bringing this important medicine to patients in need. I continue to be proud of the team’s ability to improve patient access and drive growth. As a result, we saw an increase in total expenses by 32% and paid prescriptions by 19% compared to the same quarter in 2025, which is important as the overall prescription market declined by 10% over the same time period. We are broadening our reach by employing targeted sales initiatives and a cross-channel strategy to increase HCP and patient engagement.

We saw solid growth across key metrics in Q1, with notable increases in total writers, new and refill prescriptions, and total prescriptions across the non-Medicare segments compared to the same time period last year. This growth shows progress against our key strategic initiatives, which includes optimized HCP targeting and enhanced access messaging to support pull-through. Exposa continues to be an important contributor for Ardelyx, and we remain focused on supporting and ensuring access for all patients regardless of payer coverage. With the majority of patients treated with binders not having fully controlled phosphorus, the high unmet need is clear. I am confident in the team’s ability to deliver on our priorities for both Ibsrela and Exposa this year.

The entire organization is executing incredibly well at a high level in a fast-paced environment, consistently achieving our shared goals as a result. At the same time, we are making prudent investments across the commercial organization to strengthen our position in the market, support patients along their journey, and accelerate long-term growth. I will now turn it over to Sue. Sue?

Sue Hohenleitner: Thank you, Eric. As you heard from Michael and Eric, we are continuing to advance our commercial momentum to drive significant value creation. We are leveraging disciplined capital allocation into a clear strategic advantage by investing with purpose in commercial growth and building our pipeline. We are driving towards profitability and meaningful cash generation, allowing us to strengthen our balance sheet, invest in growth, and build long-term shareholder value. Now let me walk you through the financials. Our quarter-over-quarter total product revenues were $93.4 million compared to $67.8 million in the same period last year, representing 38% growth. That growth was driven by a significant increase in Ibsrela demand with Q1 2026 revenues of $70.1 million, an increase of 58% compared to 2025.

The Q1 2026 demand for Ibsrela increased despite the expected Q1 seasonal dynamics that were further exacerbated by the winter storms. We continue to expect Ibsrela revenues to grow quarter over quarter for the remainder of the year. Revenue for Exposa during the quarter was $23.3 million and, on an as-reported basis, remained consistent with the prior year revenue. However, it is important to understand the underlying business results we are seeing. As you may recall, in Q1 2025, we recorded a $3.8 million favorable adjustment related to product returns. Taking that adjustment into account, our paid prescriptions of Exposa actually grew 19% year over year. Now turning to expenses. R&D expenses for 2026 were $20.2 million compared to $14.9 million for the same period in 2025.

This increase primarily reflects development activities for the EXCEL Phase 3 trial for CIC. SG&A expenses were $102.3 million for 2026 compared to $83.2 million for the same period in 2025. This increase was reflective of the ongoing investments to drive commercialization, demand, and adoption of Ibsrela. Our net loss for 2026 was $37.6 million, or a loss of $0.15 per share, compared to a net loss of $41.1 million, or $0.17 per share, for the same period in 2025. The net loss for Q1 2026 included $14.2 million for non-cash expenses from share-based compensation, compared to $12.1 million for the same period in 2025. We are in a position of financial strength with $238.1 million in total cash, cash equivalents, and short-term investments as of the end of the first quarter.

To capitalize on the favorable market conditions, we recently refinanced our existing debt with SLR. You may recall we entered into a loan agreement with SLR in 2022 that provided a total of $300 million of cash, of which $200 million has been drawn down. The remaining $100 million of cash is available for drawdown this year. We are pleased with the positive outcome of this refinancing with SLR, which extended the maturity and interest-only period of our loan by two years and lowered our overall cost of capital and annual interest expenses throughout the term of the loan. Now turning to guidance for 2026. We are reiterating our 2026 revenue guidance for Ibsrela between $410 million and $430 million. That represents 50% to 57% year-over-year growth.

We expect the growth to be driven by quarter-over-quarter increases in demand along with improved prescription pull-through. Our long-term growth expectation for Ibsrela remains to reach at least $1 billion in 2029, representing a 38% CAGR. Now turning to Exposa. We are reiterating our revenue guidance between $110 million and $120 million in 2026. We continue to invest at an appropriate level to ensure that Exposa remains a contributor of financial growth for Ardelyx. Our full-year product revenues are expected to grow between 38% and 46%, outpacing our operational expenses, which will grow by approximately 25%, consistent with prior guidance. We are at a stage in our development where it is necessary for us to prudently invest in our growth accelerators: our commercial operations and our pipeline, all of which require high-impact investments in R&D and SG&A.

In 2025, we grew our cash balance year over year even as we increased investment in both commercial execution and pipeline development. As we transition into more steady and measurable cash flow in the near future, I think it is important to begin to share our capital allocation priorities as we head into this new era. Our priorities include: one, accelerating Ibsrela growth, as this is our highest ROI use of capital today; two, investing in our current pipeline to create additional growth drivers and expand with external business development opportunities; and three, maintaining our financial strength. Importantly, we are funding current operations and pipeline from our revenue base, which demonstrates the growing financial maturity of Ardelyx.

In addition, as I stated previously, we have proactively refinanced our debt and reduced our cost of capital while preserving optionality for BD partnerships or other future opportunities. Ultimately, all of this builds towards sustainable profitability. We hope this view of our capital allocation priorities is helpful as you continue to support the strategic value of our now and as we evolve into the future. With that, I will hand it back to Michael.

Michael Raab: Thank you, Sue. As you heard, we are focused on executing our priorities: significantly grow Ibsrela, maintain Exposa momentum, further advance our pipeline, and continue delivering strong financial results. We are moving with purpose, urgency, and discipline against these priorities, and we look forward to demonstrating continued progress as the year unfolds. To our investors, employees, and especially the patients, thank you for your continued engagement and support. We are encouraged by the progress we have made and excited about the opportunities ahead. We remain focused on disciplined execution and long-term value creation, and we appreciate your continued confidence as we move forward. We will now open the call for questions. Operator?

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Operator: If you would like to ask a question, you will be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you would like to ask a question, please press 1 on your phone now. Our first question comes from Roanna Ruiz from Leerink Partners. Please go ahead, Roanna.

Roanna Ruiz: Yep. Thanks. A couple from me. First one, thought it was interesting you mentioned the Ibsrela demand increased despite the storms and seasonality. How should that flow through to the next quarters and in light of your current guidance?

Michael Raab: Sure. I will ask Eric to comment a bit on it. For us, seeing what we all went through in the first quarter, which is normal seasonality and those two storms, seeing that continued growth in demand only strengthens our conviction in terms of where we are seeing this business grow, and we are very, very pleased with those results. Eric, anything to add?

Eric Foster: Yeah. Thanks, Roanna, for the question. Very pleased with what we saw in terms of demand in Q1 and very similar to the patterns that we have seen in the past. We expect to continue to see quarter-over-quarter growth as we move forward. I feel very confident with the team that we have in place and continuing to invest in access and making sure that all patients that are written a prescription can get fulfillment. So I feel very comfortable about the strategy that we have in place and our ability to be able to continue the strong execution, and you should see that continue to grow as we move through the year.

Roanna Ruiz: Great. And the other question I had, I was curious about any color you could share about OpEx throughout 2026. How should we think about this with the Phase 3 CIC study ramping up as well?

Sue Hohenleitner: Sure. Yeah. Thanks, Roanna. Yeah. I would say that we have said before we are going to guide, and we are up to about $520 million in total OpEx, and that would be consistent throughout the quarter. So you saw in first quarter that we recorded about $122 million of that OpEx expense. So what I would see is a bit of a ramp up as we move through. As we continue to enroll the patients in the study, you will see more of those expenses come through the rest of the year.

Michael Raab: And to be clear, that was all factored into the guidance that we gave, the expectation of the spend that we would have for CIC.

Roanna Ruiz: Understood. Thanks a lot.

Operator: Thanks, Roanna. Our next question comes from Joohwan Kim from Citi. Please go ahead.

Joohwan Kim: Hi. This is Joohwan Kim on for Yigal. Congrats on the progress and thanks for taking our question. Maybe just a quick one from us. Have you tracked towards your December enrollment completion target for the Phase 3 CIC trial? Can you provide any color on the pace of enrollment relative to internal expectations so far? And are there any learnings from the IBS-C TEMPO enrollment experience that are helping you optimize recruitment? Thanks. Oh, interesting question in regards to TEMPO.

Michael Raab: As I stated in my comments, we have all the pre-identified sites up and running, and that pace of enrollment of the sites was wonderful to see, and it was on par with what we expected out of the TEMPO program. As I also noted, the enthusiasm both by treating physicians and patients is evident, and that enrollment continues at pace. So we are very confident with the timeframe that we have shared where we would be able to expect both for it to be completed and the data to be shared.

Joohwan Kim: Great. Appreciate it.

Eric Foster: Thank you.

Operator: Our next question comes from Dennis Ding from Jefferies. Please go ahead, Dennis.

Dennis Ding: Hey, guys. Thanks for taking my questions. I had several questions around Ibsrela. So number one, Q1 had some seasonality, and on a quarter-over-quarter basis, it was a bigger step down relative to last year, which is totally fine because it is a bigger base. But in terms of the recovery, should we also expect a bigger recovery than what we saw last year as well? I believe consensus for Q2 assumes about a $30 million quarter-over-quarter recovery for Q2. Question number two, just specifically around the specialty pharmacy dynamic. Can you share if that shift away from retail is working out in terms of better fill and reauthorization rates relative to last year? The channel is about 30% of the mix, but how much higher can that go? And then I have one more.

Michael Raab: Let me just quickly address some of those and I will ask Eric to comment. I think the Q2 recovery—rather than recovery, it is just a normal course of business. I think that term is an important one to think about. It is what we expect and what we plan for given the predictable dynamics that everyone sees in Q1. Now the surprise was the storms—the two storms, both the Mid-Atlantic one and the one in the Northeast—and that clearly had a meaningful impact in that sector of the country. And if you think about where many distribution centers are, they were smack dab in the middle of the Ohio River Valley where much of that was hit. So one cannot predict—we are not weather people, and they are wrong 50% of the time at least.

So we do not try to predict storms, but it is one thing that is notable. I am very confident with the data that you see every week, that we are on the path to what we expected out of Q2. I do think, again, just to reemphasize, it is not a recovery, rather just a pattern of the business. I will ask Eric to comment a little bit more on that in terms of what they saw in the field. But the IPN, the Ibsrela Pharmacy Network, is a fundamentally important part of our strategy moving forward, given Eric’s comments in his opening statements. It is better for patients, and I will let him talk about the dynamics in terms of the shift. At this point, it is early for us to say what we think the ultimate potential percentage of the business that would go through that is.

It is probably a little bit too much detail that will become evident through the data. That we know is imperfect, but it will become evident over time.

Eric Foster: Yes. Thanks, Michael. And thanks for the question, Dennis. As far as Q1 goes, we had talked about the seasonality, and as Michael said, for us, we have the experience and the knowledge to know most of that is coming. What we were not aware of, obviously, were the storms. So we feel like the team planned accordingly. We were able to push through the temporary disruption there and, just like we saw last year, we really started to see the acceleration in the back half of the quarter, and we certainly see that, which gives us great confidence as we moved into Q2. With regards to the Ibsrela Pharmacy Network, we continue to be very excited about that opportunity and really to bring Ibsrela to patients that are prescribed Ibsrela.

If we think about the fulfillment rate and your question around is there better fulfillment—absolutely there is when it goes to the Ibsrela Pharmacy Network. That is really the driver for us to make sure that patients that are prescribed Ibsrela can get on therapy. We will continue to work on moving business into the Ibsrela Pharmacy Network. We expect that to continue through the year. It is also important to note when that happens, there is an additional, on average, prescription or refill in that year. So it is really great for patients. You get a higher fulfillment rate, you get a better refill rate as those prescriptions go through the Ibsrela Pharmacy Network.

Sue Hohenleitner: Yeah, and one thing I would add, Dennis—you kind of talked about the guidance—we were pretty overt about Q1 with kind of a soft guide, but that was all factored into our full year, and that is all factored into our year guidance. We are not going to provide similar color going forward. We felt like that was appropriate for Q1 just given the storms and some of the volatility, but I think as we go forward, as we said, we are going to continue to grow quarter over quarter.

Dennis Ding: Okay. Perfect. And then as my follow-up. Lilly is running a Phase 2 with its GLP-1 agonist for IBS-C. Data might be in 2027. So I am curious how you are thinking about that study and the durability of the Ibsrela franchise over the long term in the 2030s, and you will be well north of $1 billion in revenue. Thanks so much.

Michael Raab: Yeah. I mean, I think for us, what we need to do is follow the data, and anything that helps patients is a good thing. I think that is just a fundamental way that we—and I—look at this business. Anything that is going to help patients is the right thing to do. The realities are, if you look at the potential patients that could, should, or might be taking GLP-1s, it is a relatively small percentage who actually are versus those who would benefit from it. So I would not imagine there is going to be a massive degradation of the market, given the positioning that we have for Ibsrela in that market. I do not see that as a massive threat on the horizon. Is it better for patients if it works? Of course it is, and that is something we should all cheer.

Dennis Ding: Perfect. Thanks so much.

Michael Raab: Thanks, Dennis.

Operator: Our next question comes from Christopher Raymond from Raymond James. Please go ahead, Chris.

Christopher Raymond: Hey, yes, thanks. We have talked to some KOLs who indicate they are already using Ibsrela to some extent in CIC. Michael, I know you are not going to want to give too much color here, but just maybe in broad strokes, can you talk about what kind of CIC use you are seeing in the field? I mean, LINZESS, TRULANCE, Amitiza—they all have CIC on their labels already. Maybe second part of that question is would the competitive dynamic in this indication be maybe similar to what we have seen with IBS-C, or are you thinking something different? Thanks.

Michael Raab: So yes. What is important about what you said is all the others have dual indications. Clearly, we have heard and understand what you have described as volunteer in your KOL clinician discussions. As you know, physicians, in the art of what they practice, can prescribe things off label. We cannot promote things off label, and we will not and do not. That is a fundamental part of this business, as everyone understands. If a physician feels it is appropriate for CIC, they should. What is really interesting—if you have not looked at Rome V, which was just published—the changing definition of CIC, functional constipation, IBS-C, which we know, given our experiences on the front lines, is a continuum of care. Understanding how the Rome Foundation has evolved its definitions is one of the fundamental reasons why we moved into the CIC program.

It is a natural course. As we have spoken over the years, would we have loved to have both indications at launch? Of course. But as you know, I am cheap, and we did not have the money to invest in both indications. Now that we are in a place that we can, we are, to provide those benefits and try to eliminate some of the barriers in the way that physicians think about this and the further hurdles that the prior authorizations will put them through if it is an off-label indication. I agree with everything that is the genesis of your question, and what we are doing with the CIC program is specifically designed to address that, coupled with what has happened with Rome V.

Christopher Raymond: Thank you.

Michael Raab: Thanks, Chris.

Operator: Our next question comes from Ashley Marie Aloupis from Piper Sandler. Please go ahead, Ashley.

Ashley Marie Aloupis: Hi. This is Ashley on for Ali. Congrats on the quarter and all the progress made. Just two questions from us. You talked about this in your prepared remarks, but could you talk a little more about the Ibsrela pediatric trials and the workings of the potential six months of additional patent life and how meaningful those additional six months could be for Ibsrela? And then also, just wondering once the IND is filed, do you have any line of sight into timelines around getting 531 into the clinic and how quickly you plan to move if the IND studies are positive? Thank you.

Michael Raab: We will work at pace if those studies are positive because it is the right thing to do. Fundamental again to what we do is we follow the data, and all this pre-IND work is really critical for us to understand. Let me remind you that when we created tenapanor back in 2009, it was based upon a huge amount of preclinical work that we had done to understand all aspects of where this molecule engages, certainly with animal models and ultimately into man. So we have good experience in this, and there are very tried-and-true approaches that one takes in order to make the decision to file or not to file an IND. The data tell us what the right thing is to do. With regards to the pediatric indication, this is tried-and-true practice that everyone does in the industry.

One of the things that the FDA put in place was the Pediatric Research Equity Act to encourage companies to develop drugs for the pediatric population. Now, it is pretty hard—IBS-C—given different age groups, the inability or challenge to describe pain. It is subjective. So it is a harder population; it is a smaller population. But the mere operational effort to put this in place, primarily to show safety—one of the fundamental tenets of pediatric development—allows you flexibility to treat the younger patients if you demonstrate the safety that we expect to demonstrate, given our long history of utility of this molecule. So the benefit of that six months—you look at whatever peak it is that you have modeled, just look at each incremental month of value that that will generate, and that will tell you the value in your modeling of what those six months are worth.

It is significant.

Ashley Marie Aloupis: Got it. Thank you for the color.

Operator: Our next question comes from Joseph Thome from TD Cowen. Please go ahead, Joseph.

Joseph Thome: Hi there. Good afternoon, and thank you for taking my questions. Maybe a little bit of an extension of a prior question, but can you walk through the physician-type point differences between CIC and IBS constipation? If you are successful in CIC, would you need to go a little bit more into a primary care segment with your sales force? Or by the time they are presenting to a level where they may be in the GI office? Anything around that would be helpful. And then you mentioned about it a couple times, obviously, on the call. Can you talk a little bit about the company’s willingness to maybe lever up the balance sheet, given what your expectations are for the growth of Ibsrela, to do something maybe a little bit larger in size?

Michael Raab: Sure. Let me address the first one and ask Eric to comment too. As we said when we announced the EXCEL program, the CIC market is significantly larger than the IBS-C market. However, the vast majority of those patients are effectively treated with over-the-counter medications. So I think that is an important distinction as you look at the epidemiology in these populations as to what the differences are and not get over your skis in terms of what that market sizing might be. It is an important distinction that those who are not served by OTC meds are the ones that end up going and being referred to other offices. Eric, do you want to comment a little bit on what we would do in the field, if anything?

Eric Foster: Yeah. Thanks, Joe, for the question. As you know, today we focus on high-writing GIs, APPs, and high-writing non-GI. That does put us in more of the primary care setting. I feel really confident about the targeting that we have right now for IBS-C, and you can see a lot of the great momentum that we have. With regards to CIC, I do think you are correct. As Michael mentioned, it is a bit of a larger patient population, and we do see and expect more patients to be going to their primary care. At some point, as we are continuing to look at that patient population and making sure that we have the right reach, we will make that decision at that time. Certainly, I can see that there is more utilization in the primary care market. That is something that we definitely will consider as we look at the right-sizing of the team as we get closer to product being approved.

Michael Raab: And, Joe, a fundamental part of that is—as Eric has talked about in the past—we call on 50% of the HCPs today that write for IBS-C and, frankly, CIC-indicated drugs alike. That is the 14 thousand HCPs. The other 50% is about 182 thousand HCPs, and we are not going to cover them all. So it is going to be an optimization of those who might be writing a disproportionate amount for CIC, which you can find through the data. A little bit of a cautionary note not to take this as though we are going to double or triple the size of the organization, but rather an optimization as you have seen us do this year. With regards to levering the balance sheet, we are at such an incredible, pivotal time for the evolution of the company, where—not really reading between the lines—Sue has said explicitly we are going to generate more top line than expense.

So that journey that we are on, that horizon, is not that far away. What we are trying to do—I will ask Sue to comment. I am not sure how much leverage is needed versus execution in the way we are doing, but certainly, we are not afraid of doing the right thing for opportunities that present themselves.

Sue Hohenleitner: Yep. And as you heard, we already did do a refinance of our debt. We still have access to an extra $100 million of that loan. So we have got that. We have got plenty of options to do that if and when it is necessary or a great opportunity presents itself.

Joseph Thome: Great. Thank you.

Michael Raab: Thanks, Joe.

Operator: Our next question comes from Laura Kathryn Chico from Wedbush Securities. Please go ahead, Laura.

Laura Kathryn Chico: Thank you very much for taking the question. Three for me. First, I thought I heard Eric mention an expansion of the field manager level, and I am just trying to understand if that is more impactful on the depth of prescribing or the breadth of prescribing. Which of those two levers impacts hitting the upper range of guidance or kind of impacts the guidance swing there? I have two quick follow-ups.

Eric Foster: Yes. Thanks for the question, Laura. I hate to say it, but both, actually. It is very hard getting the physician to write that first prescription, and so we want to make sure when they write the prescription that they have confidence that it will be filled. That is what the field reimbursement manager does. They work with the physician’s office to ensure, as they navigate the payer dynamics, that they are able to pull through and get that prescription filled. With regards to physicians as they continue to increase their depth of prescribing, that same confidence is important that not just the first one goes through, but subsequent ones. That team is really focused on helping prescriptions get pulled through, whether it is the first prescription or subsequent ones.

I think you heard me say in my prepared remarks we saw an increase in writers as well as an increase in depth of prescribing as well. So we are having impact across both of them. That is why I go to both of them to say that it is important to make it happen across both.

Michael Raab: Laura, when Eric first started talking about hiring this skill set, one of the things that really opened my eyes is a very simple example. If I am the salesperson, I worry that that script is going to be filled—that is the way you are going to compensate me. So if I am spending my time looking at Dr. Foster and whether or not that script is actually getting filled, I am not calling on Dr. Raab, because I am worried about that. Bringing on the field access managers allows the account-based directors to have confidence that they can drive the top of the funnel and that there will be those there to help pull through at the bottom of the funnel, resulting in compensation ultimately in incentive comp. I do not think I would ever imagine not having both in the launch of a drug going forward.

Laura Kathryn Chico: Okay. Two quick follow-ups and kind of related to that. I think in the prepared remarks, I heard that the Exposa paid rate was also up. Just curious if you could quantify that. And then with respect to EXCEL, the site activation on the pre-identified sites has moved really rapidly. How are you monitoring—any conversation around quality checks that you can do to ensure you are getting sites to adhere to protocols and recruiting the right patients would be helpful—but also what are your assumptions around discontinuation rates?

Michael Raab: Once the site is up and running—do we not pay any attention to it? No. You are right. The quality of the patients is really, really important. As you get the enthusiasm of startup, there is training and reminding people of why you started, and any clinical trial has screen failures that happen. Then the sites get better and better at identifying the patients. That is just a natural progression of clinical development and recruitment. Rajani— a couple weeks now onto the job—is into this with both feet and both arms, and we all feel very good about both the quality of the sites as well as, as those sites learn and get better at enrollment, that we see those failure rates begin to taper, which is something you factor into your projections of how you enroll.

We all feel very good about what we have said, and ultimately the quality of the patients is going to be there, defined by our inclusion and exclusion criteria. So we feel very good about that quality that Rajani’s team and our CRO are following through with. In regards to your first question, what is important is, on a GAAP basis, of course, the year-over-year quarters look similar. It is so important—what Sue reminded everyone of—that $3.8 million return reserve reversal that we did in Q1 2025 should be excluded as you look at the base business that we have defined, which is a non-Medicare business, which grew by 19%. If you look at our sequential growth, even since we started this effort to not participate in TDAPA, because we believed what we are now seeing is ultimately what was going to be true, it is proving out.

The growth that we are seeing in that non-Medicare segment, with all the challenges dialysis organizations are facing, further emphasizes the value of this program and the product for patients who need phosphorus management. It is an opaque and difficult business that we have chosen to partake in in the way that we have, but the numbers are showing that we are helping the patients that we anticipated that we would.

Laura Kathryn Chico: Thanks very much.

Michael Raab: Thanks, Laura.

Operator: Our next question comes from Prakhar Agrawal from Cantor Fitzgerald. Please go ahead, Prakhar.

Prakhar Agrawal: Hi. Thank you for taking my questions. Congrats on the quarter as well. Firstly on Exposa, maybe I missed this, but I did not hear you reiterate the long-term guide of $750 million. I know the speed is a little bit more conservative, but just wanted to check if you are reiterating that. You talked about investing in high-value opportunities as well. Has there been a change in the level of investment for Exposa this year and maybe in the future too? Secondly, maybe if you can talk about the gross-to-net for both products for Q1 and trends for rest of the year. And last question, given the investments you are making both on the R&D and SG&A, how should we think about the cash flow profitability? Thank you.

Sue Hohenleitner: Thanks, Prakhar. That is a lot for me, so let us see if I can hit it all. In terms of the high-value opportunities with Exposa, yes, we ensure that Exposa continues to be a contributor. We do not necessarily tease out separate product P&Ls, but rest assured, we continue to ensure that all of the spending that is done—any investments we make behind those patients and that growth—makes it a financial contributor. In terms of the gross-to-net, you probably saw in what we filed we are a little over 36.4% GTN, and that is a blend. We do not necessarily split that out. What I would say is first quarter is going to be your highest quarter in terms of GTN, just given all the dynamics with copays and deductibles, etc.

What we have always said before is it is about low-30s when you think about a blended total GTN rate for the year. You will see that high in Q1 and then taper off as we go into further quarters. Before I leave Exposa, yes, we will reiterate the $750 million, and I am reiterating that. So within the guidance, we have given the $1 billion for Ibsrela and the $750 million for Exposa. In terms of R&D and SG&A and cash flow, it is something that we are continuing to monitor. As you can see with the top-line guide being $520 million to $550 million and our OpEx only $520 million, there is a possibility we will get to cash flow positivity. But certainly, we want to continue to see how the year unfolds and make sure that we are hitting on all cylinders, and then we will likely come back with an update if it is appropriate on cash.

Michael Raab: We appreciate the question of wanting to traject quarter to quarter, but we are not going to get into the practice of quarter guidance. I think the yearly guidance that Sue just went through is really important.

Prakhar Agrawal: Thank you so much.

Operator: Our next question comes from Matthew Caufield from H.C. Wainwright. Please go ahead, Matthew.

Matthew Caufield: Hi. Thank you, guys. With the investor focus on sales execution, is there further granularity that you could share on Ibsrela growth between the new patient starts versus refill persistence trends? And then where things may stand presently for the total penetration among target prescribers there? Thanks for any color on execution overall.

Michael Raab: I think that is getting into detail that we probably would not get into specifics on. You can begin to look through your script data in terms of NRx and TRx and tease that out to some extent with what you do. I recognize that it is going to be imperfect data. Suffice it to say, with Eric’s prepared remarks, that we are seeing both— with the other question that was asked—breadth and depth. We are seeing great refills, and we are seeing lots of new prescriptions coming through as well. Eric, anything to add?

Eric Foster: [inaudible]

Matthew Caufield: Thank you.

Operator: Our next question comes from Julian Harrison from BTIG. Please go ahead, Julian.

Julian Harrison: Hi. This is Andrew on for Julian. Congratulations on the results this quarter, and thanks for taking our question. On Ibsrela, which of the growth drivers would you say you believe still has the most room to grow: writers, new prescriptions, refill, or pull-through? Thank you.

Michael Raab: I think Eric will probably say yes to all of the above. What is interesting is, for the 7 million prescriptions for IBS-C-indicated products that I referenced in my opening remarks, it is a very small percentage of the market one needs to penetrate in order to get to our guidance of peak. There is massive opportunity out there. Eric, any granularity around the specifics would be great.

Eric Foster: Sure. I am very excited about all of them, as you list them. As we think about the Ibsrela opportunity, as Michael said, there are 7 million prescriptions written for IBS-C on an annual basis, and we continue to see that market grow. We feel very confident in the position that we have—winning position, sustainable over time—that we have had for the past three years. We continue to see an increase in writers, total writers, new writers, as well as depth of prescribing, and that is really important. What that tells you is physicians continue to have confidence in Ibsrela and look at it as a viable option for their patients that are in need. Of those patients, we know that 77% continue to have symptoms despite treatment with a secretagogue.

Very healthy market, strong position for Ibsrela, continuing to grow writers as well as depth of prescribing, and we feel really good about the opportunity we have moving forward. When you think about the Ibsrela Pharmacy Network and being able to improve the fulfillment rate as well as the number of refills for patients, it really leads to success across the business in those important drivers. That is what gives us that confidence to the $1 billion in 2029 and beyond.

Operator: There are no further questions at this time. This now concludes today’s conference call. Thank you for joining. You may now disconnect.

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