Ardelyx buys troubled sodium drug back from AstraZeneca with PhIII in sight

Moving on from a costly Phase II setback for its lead drug, Ardelyx ($ARDX) is looking to go it alone without AstraZeneca ($AZN), buying out its former partner and pressing forward into late-stage development.

The Fremont, CA, biotech is paying $15 million up front and $10 million in R&D costs to regain tenapanor, a treatment designed to clear excess sodium from the gastrointestinal tract. AstraZeneca first bought into the drug in 2012, signing a $272 million deal to underwrite its development in chronic kidney disease, hyperphosphatemia and irritable bowel disease, but a string of safety and efficacy issues has since clouded tenapanor's future, marring Ardelyx's share value in the process.

Most recently, tenapanor missed its primary endpoint in a Phase IIb trial on patients with chronic kidney disease and Type 2 diabetes, failing to significantly decrease the urinary albumin-creatinine ratio compared to placebo. A month before, the drug met its main efficacy goal in a Phase IIb trial on dialysis patients with dangerously high phosphate levels, but not without charting alarming rates of diarrhea compared to placebo.

But Ardelyx remains undaunted, touting tenapanor's potential and plotting to kick off a Phase III trial in IBS and a second Phase IIb study on hyperphosphatemia by year's end.

Separately, the biotech has signed a deal to sell about $77.8 million worth of shares in a private placement, money that will help accelerate its pipeline. In tandem, Ardelyx unveiled a new candidate, RDX022, that will begin clinical development this year as a treatment for high levels of potassium, or hyperkalemia. The company plans to advance RDX022 through the FDA's 505b(2) pathway, which allows new products to use data from similar, already-approved drugs in their applications. That should allow Ardelyx to effectively skip Phase II, the company believes, and management plans to get RDX022 into late-stage studies by the second half of 2016.

"Together with tenapanor and RDX013, our small-molecule hyperkalemia program, RDX022 is an exciting program that augments a formidable pipeline of innovative products," Ardelyx CEO Mike Raab said in a statement. "This is a pivotal point in the history of Ardelyx and an exciting time for our company as we focus our efforts towards building a commercially-driven, fully integrated company with wholly owned products to transform the treatment paradigm in the indications that they treat."

The biotech's shares rose about 17% on the news Wednesday but are still down more than 50% since January.

Beyond its top three prospects, Ardelyx is working with Sanofi ($SNY) on preclinical treatments that target NaP2b, a phosphate transporter. Under that deal, signed in 2014, the biotech is eligible for up to $198 million, plus tiered royalties on any approved products.

- read the tenapanor release
- get more on the private placement

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