Good day, everyone, and welcome to the Ardelyx First Quarter 2025 Earnings Call. Now I would like to turn the conference over to Caitlin Lowie, Vice President of Corporate Communications and Investor Relations. Caitlin, you may begin.

Thank you. Good afternoon, and welcome to our second quarter 2025 financial results call. During this call, we will refer to the press release issued earlier today, which is available on the Investors section of the company's website at ardelyx.com. During this call, we will be making forward-looking statements that are subject to risks and uncertainties. Our actual results may differ significantly from those described. We encourage you to review the risk factors in our most recent quarterly report on Form 10-Q that will be filed today and can be found on our website at ardelyx.com. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so even if our views change. Our President and CEO, Mike Raab, will begin today's call with opening remarks and an overview of the company's progress during the second quarter of 2025. Next, Chief Commercial Officer, Eric Foster, will provide an update on the performance of IBSRELA and XPHOZAH. Justin Renz, Chief Financial and Operations Officer, will conclude today's prepared remarks with a review of the company's financial performance during the second quarter ended June 30, 2025, before we open the call to questions. With that, let me pass the call over to Mike.

Good afternoon. It's a pleasure to be with you today to share our second quarter 2025 results, a quarter that reflects the strength of our strategy, the momentum behind our products and exceptional execution by our team. We're proud to report a standout quarter for both IBSRELA and XPHOZAH, reinforcing the power of our commercial model and the real-world impact our differentiated therapies are having for patients with IBS-C and CKD on dialysis. These results validate our strategy and highlight our ability to deliver on our priorities. In the second quarter, we generated $97.7 million in total revenue, representing 33% year-over-year growth, a strong signal of accelerating demand across our portfolio. IBSRELA continues to perform with net sales revenue of $65 million during the second quarter, up 84% year-over-year and 46% quarter-over-quarter. IBSRELA demand growth is broad-based with record highs across all our key indicators. Our IBSRELA team has done an exceptional job expanding reach, deepening prescriber engagement, conviction, and prescription pull-through. Given this outstanding momentum, we are raising our full year 2025 net sales revenue guidance for IBSRELA to $250 million to $260 million, a meaningful step forward as we scale the opportunity ahead for this important medicine. XPHOZAH posted a very encouraging quarter as well. With a changed market landscape, XPHOZAH recorded net sales revenue of $25 million, up 7% compared to the first quarter this year. And when adjusted for the one-time reserve that was released in Q1, net sales grew 27%. This performance speaks volumes about the strength and agility of the XPHOZAH team as they help guide healthcare providers through this changed landscape. Our Q2 results further strengthen our conviction for the significant opportunity we have ahead as we drive continued growth for XPHOZAH. Notably, our strong commercial execution and continued disciplined investments in our business has resulted in a meaningful quarter-over-quarter improvement in net loss as well. Additionally, we strengthened our balance sheet and further enhanced our financial flexibility by drawing an additional $50 million of debt. As we progressed, we've also thoughtfully scaled the organization, and we've been deliberate in strengthening our leadership team to match the opportunity ahead. Over the past 18 months, we've added transformative talent that will help guide us into our next phase of growth. We recently promoted Mike Kelliher to Chief Business Officer and appointed Laura Williams as Chief Patient Officer. We also welcomed three dynamic and experienced leaders to our executive team, Ed Connor as Chief Medical Officer; John Bishop as Chief Technical Operations Officer; and Jamie Brady as Chief Human Resources Officer. This group brings deep expertise, vision and executional excellence, exactly what we need as we execute on our ambition to create a significant enterprise and build a company of lasting impact. As you also saw in the press release we issued early today, Justin Renz, our Chief Financial and Operations Officer, will be leaving the company. Justin has been instrumental in Ardelyx's journey, leading with strength, goodwill and purpose through periods of both challenge and transformation. He has built a world-class finance organization and positioned us to thrive going forward. We are incredibly grateful to Justin and that he will remain with us to ensure a seamless leadership transition. Justin, thank you for your partnership, your leadership and your unwavering commitment to our mission. Ardelyx is stronger, more focused and energized by the opportunities ahead. We are united by a deep commitment to patients backed by best-in-class science and guided by a team that knows how to execute. Our therapies are making a real difference. Our strategy is working, and we are well positioned to deliver even greater impact moving forward. With that, I'll hand it over to Eric to walk us through our second quarter commercial performance and how his team will drive continued success in the second half of 2025 and into the future.

Thank you, Mike. It's great to be with you today, and I'm excited to share insights into the performance we delivered during the second quarter and how we plan to maintain that momentum for the remainder of the year. Let me start with IBSRELA. IBSRELA recorded an impressive $65 million in net sales revenue for Q2, demonstrating 84% year-over-year growth and 46% quarter-over-quarter growth. We saw a clear acceleration in demand, delivering our strongest quarter since launch, supported by growth across all key demand indicators compared to the first quarter of this year. This performance was driven by focused commercial execution, which generated growth in both breadth and depth of prescribing and an improvement in prescription pull-through. Let me dive into it a bit more, starting with commercial execution. During the quarter, the team drove significant increases in new and total prescriptions through increased field activities to targeted HCPs. We also deployed highly effective marketing activities, including peer-to-peer HCP education programs and digital HCP and consumer engagement. By focusing on increasing the breadth of writers, we generated growth in new writers, new prescriptions and new patient starts. In addition, existing writers expanded their view of patients they consider candidates for IBSRELA and in turn, increased their depth of prescribing. We were also pleased to see that refills made up a greater proportion of prescriptions in Q2, which means new prescriptions are spinning off more refills. Both new and refill prescriptions reached all-time highs. We also saw early evidence that the investment in the field access manager team is having a positive impact on our prescription pull-through. The team focused on educating offices to ensure that providers can navigate the access landscape, if needed. We are seeing early indicators that approval rates and resubmission rates are improving. It is still early for the field access manager team, but we are pleased with the progress and results to date. It has been three full quarters since we completed our sales force expansion and the field team is hitting their stride. In the second half, they will continue their focus on target HCPs and reinforce IBSRELA's unique and differentiated position as the next choice therapy after trial with a secretagogue. We know that only one-fourth of patients on the secretagogue are satisfied, and there remains significant opportunity in the market. We will continue the sales and marketing activities that drove increased demand during the first half of 2025 with the aim of continuing to expand both depth and breadth of the prescribing base. Additionally, our expanded field access team will maintain their focus on improving prescription pull-through to help ensure that all appropriate patients prescribed IBSRELA get on treatment. Working with ArdelyxAssist, our team is focused on supporting HCPs to understand the channels that are best equipped to handle prescriptions. The field access manager team also works closely with HCPs to provide prior authorization support to improve patient pull-through. Coming off a strong Q2 performance, I have full confidence in our team. IBSRELA is an important medicine that delivers meaningful benefits to patients, and our commercial strategy is working. As we look to the second half of the year, we remain focused on executing at a high level and expect our strong momentum to continue. We are raising our guidance for this year. We are confident in our ability to deliver peak sales of more than $1 billion. Now on to XPHOZAH. We are very pleased with the performance that XPHOZAH delivered in the second quarter, delivering $25 million in net product sales revenue, a 27% increase over the first quarter of this year when the one-time Q1 reserve release is excluded, driven by meaningful demand growth. XPHOZAH is an important medicine to help patients achieve target phosphorus levels and our strategy, providing broad-based patient access to XPHOZAH regardless of payer and increasing support for prescription pull-through, is working in the new market environment for phosphate management. We are seeing growth across all key demand indicators, including improved access for patients on both patient assistance and paid prescriptions as well as growth in our non-Medicare payer segments, the total number of writers and new and refill prescriptions. Demand accelerated during the quarter, and we are confident we have the right strategy in place to continue to drive growth in the second half of 2025. Taking a closer look at some of the factors behind the Q2 results. This market, like IBSRELA, is responsive to the promotional messaging from our field-based area business directors and our marketing efforts. Since the beginning of the year, the field and marketing teams have been focused on ensuring HCPs understand the access path for XPHOZAH, and we are seeing positive signs that this messaging is resonating. Total dispenses, including both patient assistance and paid prescriptions, have increased from the prior quarter as well as the total number of writers. These are positive indicators that give us confidence that our strategy and messaging are generating clarity and confidence in prescribing. Core to our strategy is driving prescriptions to ArdelyxAssist in order to support patients and providers as they navigate the access landscape in this new environment. During the second quarter, we saw growth in the percentage of prescriptions growing through ArdelyxAssist and the number of target HCPs who have had a patient successfully access XPHOZAH through ArdelyxAssist. Both are strong indicators that we are gaining momentum in this new environment. We have grown the total number of paid prescriptions month-over-month since March, and we are focused on continuing that steady and consistent growth for the remainder of the year by generating greater depth and breadth in prescribing among XPHOZAH writers. To support patient access, we will continue to engage and partner with leadership teams and dialysis providers on ways to educate and support access to XPHOZAH. Finally, on patient pull-through, we will continue to support HCPs and patients in their prior authorization and pull-through needs. ArdelyxAssist plays an integral role regardless of payer, and we remain committed to patient access for the long term. As you can see, the XPHOZAH team is focused on the right areas, and we are delivering strong results. We know there continues to be a significant unmet need among patients with elevated phosphorus despite treatment with binders, and we seek to deliver on that opportunity. As such, we remain confident in our ability to achieve peak sales of $750 million. It was a strong quarter for both IBSRELA and XPHOZAH. The team is focused and executing at the highest level, generating increased demand and improvements in patient pull-through. We are optimistic about the remainder of 2025, and we look forward to continued growth throughout the year. I will now turn it over to Justin.

Thanks, Eric. Before jumping into the financials from the quarter, I want to take a moment to share my thoughts on leaving Ardelyx later this year. I have had the privilege of seeing the evolution of Ardelyx over the past 5 years. As many of you who have followed us for a long time know, there have been some challenges, but there have been many more successes. During my time at Ardelyx, I've had the opportunity to help launch two drugs, build the supply chain and support systems designed to ensure the product was always available for patients, navigate challenging financial markets and what I'm most proud of, build a team capable and equipped to support the future operations for this company. After establishing the infrastructure required to be a successful commercial company, Ardelyx is in a strong position, and it seems like the right time for me to make a transition. I look forward to staying on to help with the smooth transition of the finance leadership for the company. Ardelyx is a great company with an exciting future, and I look forward to continuing to follow the company's future successes after my departure. Now on to the strong financial performance we delivered during the second quarter ended June 30, 2025. As Mike and Eric both shared, we generated significant patient demand during the second quarter. We have continued to thoughtfully invest in our business to support that growth and finished Q2 with an improvement in net loss on a quarter-over-quarter basis. This performance reinforces our confidence in our ability to continue to generate significant revenue and carefully structure and manage our cost base. We shared our full financials in the press release and 8-K issued earlier today. I will not go into all the individual items, but instead focus on the key drivers during the quarter, starting with revenue. For the period ended June 30, 2025, we reported total revenue of $97.7 million, an increase of 33% compared to the $73.2 million we reported in Q2 of last year. The growth was driven by significant increases in revenue by IBSRELA and product supply sales to our collaboration partners. During the second quarter of 2025, we recorded IBSRELA net product sales revenue of $65 million, an increase of 84% over the same period last year. IBSRELA has demonstrated consistent growth since launch, and our strong performance in the second quarter was a reflection of the continued patient demand. We also saw an improvement in our gross to net deductions during Q2 compared to the first quarter due to decreased costs associated with our commercial co-pay program. We finished the second quarter with a gross to net deduction of approximately 32.2%. We expect IBSRELA to continue its strong performance for the remainder of 2025. And as such, we are raising our guidance and currently expect to finish the year with between $250 million and $260 million in net product sales revenue. We expect this growth to be driven by patient demand and improved prescription pull-through as well as modest improvements in our gross to net deduction. XPHOZAH also had a very encouraging performance, recording $25 million in sales during the second quarter of 2025, which we delivered despite the loss of our largest payer, Medicare, compared to $37.1 million we recorded during the second quarter of last year. The $25 million for XPHOZAH we reported for Q2 reflects a 7% increase in net sales revenue from Q1 of 2025, driven by patient demand. As a reminder, our first quarter XPHOZAH net sales revenue included a $3.8 million returns reserve release. Excluding the reserve release, we delivered a 27% increase in net sales revenue compared to Q1 of 2025. Our gross to net deduction was 29% for XPHOZAH, in line with our first quarter gross to net of approximately 31% when one excludes the Q1 returns reserve release. Looking ahead, the signals we are seeing are very encouraging. The XPHOZAH strategy is working. We've established its place in the new market environment and the business is positioned for further growth in the second half of the year, driven by patient demand. In addition to product sales, we also recorded more than $6 million in product supply revenue related to sales to our international commercialization partners. Now turning to expenses. R&D expenses were $15.7 million for the second quarter of 2025 compared to $12.8 million for the same quarter of the prior year. And SG&A expenses were in line with our expectations at $84 million compared to $64.7 million we reported in the second quarter of last year. The increase in SG&A was related to our continued investment in commercial activities for IBSRELA and XPHOZAH, including the IBSRELA sales force expansion as well as growth of the overall corporate infrastructure to support our strategy. We expect our SG&A run rate to increase to approximately $90 million on a quarterly basis for the remainder of the year with incremental increases each quarter. In the second quarter of 2025, we also had $11.7 million in non-cash stock compensation expense and $2.2 million in non-cash interest expense. I would also note that we satisfied our $75 million total royalty obligation to AstraZeneca during the second quarter. This obligation is now complete, we have already seen an improvement to our gross margin since May. We had a net loss of approximately $19.1 million or $0.08 per share in the second quarter compared to a net loss of $16.5 million or $0.07 per share in the same period of last year. It should be noted that this is a significant improvement compared to the first quarter of 2025 when we reported a net loss of $41 million or $0.17 per share. With respect to cash, we ended the second quarter with $238.5 million of cash, cash equivalents and short-term investments. This includes $48.7 million of incremental debt from our partners at SLR Capital. At a favorable interest rate of 8.7%, we believe this was a prudent opportunity to further strengthen our balance sheet and brings our current outstanding debt to $200 million with a blended interest rate of approximately 9.67% interest-only through June 30, 2028. We also have the option for an additional $100 million and two $50 million tranches through next year. We believe that the performance in the second quarter demonstrates our commitment to growing the top line while focusing on the bottom line. We remain committed to achieving the peak net sales revenue opportunities that we see for both of our commercial products, totaling more than $1.75 billion, thoughtfully investing in our business and maximizing shareholder value. And with that, I'll hand it back to Mike.

Thanks, Eric, and thank you, Justin. I hope that what you have taken away from our call today is that the performance is an indication of what you can expect from us, a focus on execution, continued momentum and delivering on our priorities. I'd like to say a note of thanks to everyone on the Ardelyx team for your hard work and commitment to bringing our important medicines to patients. Thank you also to our shareholders for your continued trust and support. I will now open the call to questions. Elvis.

Our first question comes from Louise Chen from Scotiabank.

Congratulations on the quarter. I had two for you. Number one, I wanted to ask you if there is any update on a potential EU partner? And then secondly, I wanted to ask you how you're thinking about getting to cash flow positive? Is it a near-term or medium-term goal for you?

Listen, the second part of your questions first is, obviously, we always look at cash flow breakeven and free cash flow in order to reinvest in the business. That's clearly an important thing. I think you can do the math with the guidance that we've given and see that it's not that far off on the horizon. In terms of EU, we're going to continue to evaluate opportunities. If you look at both of these businesses as it relates to Europe and that's not even think about the negative halo of MFN over making those decisions, there's nothing really substantive to talk about in terms of those opportunities at this stage.

Our next question comes from Dennis Ding from Jefferies & Company.

I have two, if I may. One is on IBSRELA. So talk about the new guidance and what's factored into that. It seems a little conservative given the demand and scripts that we're seeing and also the fact that $8 million of that $10 million raise came from the Q2 beat. So I'm wondering if there's anything that we are not thinking about, but you are seeing on the ground? And then my second question is on XPHOZAH. Can you remind us what the gross to net was in Q2? I think you may have said 29%, which is surprising given that's better than Q1 but you are booking only commercial and Medicaid revenue in Q2, which have worse gross to net than Medicare. So how are you thinking about gross to net for the second half of the year for...

Sure. I'll have Justin address that. Sure. Thank you, Dennis, for the questions. I'll have Justin address the second in a minute. With the first, you should know us well enough by now that when we give numbers, we are thoughtful and deliberate about what we say. Nothing to read into this, except that, that $10 million increase in our guidance is a meaningful step in the right direction of what this opportunity is. And I think should put little doubt in people's minds about our long-term projections, the opportunity for this business. So I would focus on that. And with opportunity to give you more perspective on how we believe this year will play out, we certainly will provide that. Justin, do you want to provide some perspective on Q2 gross to net?

Thanks, Dennis. So you're correct. In Q1, when one excludes that one-time returns reserve release we did, our gross to net would have been approximately 31%. And for Q2, it was approximately 29%. It does pertain to product mix, right, patient mix and who the payer is. So those are pretty close to each other. There's really mild differences. We did have an improvement in commercial co-pay. That was the primary driver. Again, co-pay for both of our products typically improves over the course of the year. Many of our patients are on what I'll call calendar year health care plans. So if they're commercial patients, they may have a higher deduct in the beginning part of the year, and it improves for them as a patient over time. So the primary difference between Q1 and Q2 is on the amount of commercial co-pay that we need to, again, help the patient and patient assistance. I would look for it to be in that 30% range in general for the rest of this year. Again, 29% to 31% is a reasonable range. And we're still learning in the new environment, there might be minor changes here and there, but I expect it to be in that general range.

Next, we have Ryan Deschner from Raymond James.

Congrats on the quarter. I'm curious how much of this quarter's IBSRELA sales growth be attributed to expanded sales team now that it's firing on all cylinders and you've got three full quarters in. Do you expect continued meaningful script pull-through acceleration into 2026 due to this expanded field team? Or will that start to taper off around that time?

Thanks for the question, Ryan. Let me ask Eric to address that. And certainly, it's not only on the sales side with the APDs, but the field access managers that Eric has spoken to that you can address that, too.

Yes. Thanks, Ryan, for the question. As I said in my earlier comments, we're three full quarters post completion of the expansion. So obviously, with increased call activity, we're seeing significant increases in terms of number of writers leading to increase in new and refill prescriptions. We expect that to continue. Just to remind you, I mean, there's significant opportunity in this market. Only one-fourth of patients we know are satisfied in this large market with being on therapy with the secretagogue. So we feel very confident in the opportunity that's in front of us. With this increased activity, we certainly expect it to continue for the remainder of the year.

And as a quick follow-up, just wanted to see how you're thinking about one quarter sort of seasonality going forward, how we should think about that over the next few years?

Sure. I'll ask Eric to provide some more perspective on it. But I think as we spoke about in the first quarter, it's the first time we saw it in the way that we did. And as this business grows and the magnitude of that impact is there, I think it's something that's prudent to have in there. Eric?

Yes. Like I said, we're very confident in our results at this point. We want to make sure we're mindful of the summer months, and we don't get ahead of ourselves. So really confident about our performance at this point in the year and certainly look forward to being able to move into back half of this year. We know that primarily, we do see that seasonality in Q1. I think for us, as we move into the back half of this year, it's more just being mindful of those events as we go through this quarter and feel really confident about how we're going to be able to finish things up.

Our next question comes from Julian Harrison of BTIG.

Congrats on the quarter. On XPHOZAH, apologies if I missed it. Wondering if there was any contribution from transitional scripts in 2Q? Or are we completely past that now? And then on IBSRELA, do you have any sense for how uptake in the first-line setting is trending? Are you seeing any traction there? Did you promote use at all in that setting? Or is that something typically just happening on its own right now?

Sure. Let me address the first part of your question on XPHOZAH transition scripts. There was an inconsequential amount there and how long that lasts. That's something we're not really taking a whole lot of stance on. So generally, it's about 50-50 in the overall mix between Medicaid and commercial is the way to think about it. In terms of first-line therapy, Julian.

Yes. Good question. Thank you for that, Julian. Yes. first-line therapy, certainly, we are aware of some of that. I think as you look at our positioning kind of post use with a secretagogue and having significant opportunity there, we feel very confident in our positioning there. I think as physicians continue to get confident in IBSRELA and the impact that it can have for patients, certainly, they may go to that earlier than what they're used to going to. And it is important to note, our indication is for first-line use. So it's more than appropriate for physicians to go to that first line. And for us, it's about making sure that we have patient access. So if they're able to get it first line and they have confidence in the product for the patient and it's the right choice, they should be able to get it. If it's post use with the secretagogue, again, we've got focus there on patient pull-through and very confident in the improvements that we're seeing there and expect that to continue for the remainder of the year.

Up next, we have Joseph Thome from TD Cowen.

Congrats on the progress and best wishes to Justin on his next steps. Maybe on the pull down of the $50 million, can you go into a little bit more detail as to what triggered that outside of the favorable interest rate dynamics? And maybe when you think about that remaining $100 million, what would be sort of the triggers to pull the rest down? Obviously, you instituted the new CMO. Should we be thinking about this as sort of opportunistic BD or kind of building out the pipeline at all? Or kind of what would you be using this cash for?

Just a quick comment, then I'll ask Justin to mention. SLR Solar has been a phenomenal partner of ours. And with the opportunity to get this, it's something that just made sense to strengthen the balance sheet, as I said in my opening comments. Justin, any other adds?

Yes. Thanks, Mike, and thanks, Joe. Again, hopefully, you've seen over time, we try to be very thoughtful and strategic with any of our fundraising initiatives, debt, equity and otherwise. So cost of capital is always important to us and be mindful of our shareholders. The debt presented itself at a very favorable interest rate. And so we thought it was a prudent opportunity for us to take advantage of that and give us some near-term flexibility. So looking ahead, again, it's always important for us to have optionality for our team. So we will never do anything just to do anything, but it's nice to have that flexibility and optionality going forward.

And maybe just one more, if I may. Do you think that both of the sales teams are now rightsized to meet your kind of peak guidance that you've set out for both XPHOZAH and IBSRELA? Or when is the right time to kind of reassess if you're at the right size?

Yes. Just one quick comment for me and I'll ask Eric to step in is, we are always assessing how best to optimize our footprint and what we're doing. So that should never stop. I think we're pretty confident in terms of where we are and right size. But Eric, anything to add?

Yes. Thanks, Joe. Yes, pretty confident in terms of where we are with IBSRELA. Just a reminder, we're coming off our three highest quarters of demand. So we feel like the team is really hitting their stride in addition to the expansion of the field access manager. So focusing on improvements in the middle of the funnel to be able to improve access. So I think right now, as we look at the sizing of our teams, we feel very confident where it is. To Mike's point, we're always assessing to look for opportunities to be able to drive incremental demand. But we also have our marketing activities that are out there. As I mentioned earlier, highly impactful marketing activities that supplement the field force activity, right, that's out there. On the XPHOZAH side, as we said since the beginning of the year, it's about patient access and physicians now differentiate between Medicare or non-Medicare segments. And so we're focused on the same number of nephrologists that we were focused on last year. And as you can see by some of the numbers and the improvements in the demand indicators from Q1 to Q2, certainly feel like their efforts are appropriate and having impact with those physicians that we're targeting. And so right now, I feel really good about the sizing that we have for that team as well.

Our next question comes from Yigal from Citigroup.

This is Jin-Wook Kim on for Yigal. Congrats on the quarter. Maybe just two quick ones from us. We were wondering if there's any color at all you could provide on the breakdown of new patients versus refill and prescriptions for IBSRELA?

Yes, we've not historically given a whole lot of detail around that. I think as you heard in Eric's comments, we have seen a good amount of increase in refill, which is exactly what we want to see. These patients are sticky with the benefit that these medicines are providing. So we like to see that trend. I mean the specifics, we have not historically given those details. Anything to add?

No, nothing more to add there, just about making sure that the patient is going to the right channel to be able to get the product. And with that, we saw more refills this quarter than we have seen in the past, certainly versus new prescriptions. And that, again, is just another indicator that gives us confidence in terms of what we're able to achieve with IBSRELA.

Got you. Very encouraging. And if I may, just one more question. Is there any update on the ongoing CMS legal proceedings?

Yes, we've moved away from trying to predict government actions, but our case will be presented on September 25. While there isn't a set timeline for receiving a response, we will share any significant updates as soon as we have them.

Our next question comes from Laura Chico from Wedbush Securities.

I've got to start out with a shoutout to Justin. Best of luck, Justin. Sorry to see you leaving. But congrats on the quarter. And I guess one on XPHOZAH. Now there's been a couple of quarters in the new reimbursement environment. Just wondering, Mike, if you can kind of recalibrate for us and just tell us what gives you confidence in the new peak estimate for XPHOZAH that you're seeing now in this reimbursement environment? And when might you be in a position to restore guidance for XPHOZAH?

Yes. Thanks for the question, Laura. And thank you for the shoutout to Justin. Clearly, that is well earned and appropriate. In terms of guidance for XPHOZAH, we will provide it. As we said in our comments, we saw month-over-month growth since March. And I would like a little bit more consistency before we get out there with numbers for you. As you can imagine, we continue to be thoughtful about what we say and when we say it. For me, that question that you asked at the beginning in terms of what gives me confidence is with a total available market of 220,000 patients, which is basically what we are now, given that's the non-Medicare segment. The math is pretty straightforward. As you look at our guidance of $750 million with a number of scripts, if you use binder script refills, you use our WACC with modest price increases over time, it's substantively fewer than 100,000 patients that gets you to that $750 million. So I've got great confidence in this trajectory and the performance that we're seeing here and our commitment to the patients. I have great faith in the XPHOZAH team and Eric, the pull-through work that the fans are doing across the board, the marketing efforts, the entire XPHOZAH team is focused on what's doing right for these patients. And as a result, we writ large, have great confidence in that number that we provided.

That's helpful, Mike. And maybe just one last one. On IBSRELA, I don't know if you'll be able to answer this, but what is the average duration on treatment now for a patient there?

Sure, I mean, I think the average duration for IBS-C scripts is about 5, and we're trending the same, if not a little bit better. So I feel very good about the refill rates that we're seeing here just given this tends to be a disease of the experience the patients have is somewhat waxing and remitting. And that has been historically the case, and we'll see if that is the case with us or if it's a tachyphylaxis you see with the GCC agonist, that's the sort of thing that we pay close attention to.

Next, we have Prakhar Agrawal from Cantor Fitzgerald.

Congrats on the quarter. So first on IBSRELA, you commented on typical summer seasonality, but it seems like the 3Q script trends are also looking good. So maybe just comment on how do you see IBSRELA trends for the rest of the year and just the market overall. If you look at some of the prior year trends, second half in aggregate tends to be much stronger than first half. So should this year be any different? And just had a quick follow-up.

Yes, Prakhar, thank you for the question. As I said at the start with the first question I got was what do we think about this $250 million to $260 million compared to performance and exactly what you just described. With an opportunity to provide you more perspective as we go through the rest of the year, we certainly will do that. This is a meaningful step for us to give a $10 million increase in our guidance. We haven't done that before in this way. So we are going to take mindful and thoughtful steps as we see the performance show itself. And the data that you look at historically that you just described, sure, I can't argue against that, and we will provide more perspective as we can going forward.

I understand that you’re not providing guidance on XPHOZAH, but the consensus estimate is $99 million for the full year. Could you share your thoughts on your comfort level with the Street estimates for XPHOZAH for the year? Also, do you anticipate sequential quarterly growth for XPHOZAH for the remainder of the year?

Yes. That’s a great question because it pushes me to give you guidance, but I won't fully do that. What I can say is that we just achieved a $25 million quarter driven by actual demand in the non-Medicare sector. If we consider flat growth, we're looking at the modest growth needed to reach our targets. I'm optimistic about our trajectory. I am confident that soon we will be able to offer some guidance. Since March, we've seen growth, but I want to be cautious about making predictions so as not to get ahead of ourselves. That's why we're holding off on guidance for now, but we will provide it eventually.

Next, we have Aydin Huseynov from Ladenburg Thalmann.

Congratulations for the strong quarter, actually a record quarter for IBSRELA, I think. So let me ask a general question first. So you're now like almost on track to generate $400 million a year and you only traded at $1 billion valuation. So one can imagine that you might be approached by larger players. And if you do, where do you see the potential acquirers interest more in GI space or in the renal space? And this is obviously a very hypothetical question, but do you think you're valid more on GI or on the renal side?

You guys are the sell side, you tell me. I clearly think we're undervalued on both sides of the equation, whether it's $750 million peak for XPHOZAH or $1 billion or more on IBSRELA, we're undervalued. And whether it's because people find show me story for XPHOZAH, and I think we're showing everyone or that IBSRELA in the GI market is hard to understand. I can't understand that because it's pretty straightforward with what we're doing in our performance. So our objective here is to build a great company and a sustainable enterprise. And I'm less interested in how other people think of us in terms of bigger companies out there versus ultimately the patients that we're here to serve.

Our next question comes from Allison Bratzel from Piper Sandler.

This is Ashley on for Allison. Congrats on the great quarter, guys. I just had two questions. One for XPHOZAH. I know this is already asked in terms of guidance, but if there's anything that you can point us to in terms of what you're hoping to see in terms of any specific metrics or indicators that would give you the confidence to provide guidance maybe in the second half of the year? That would be really helpful. And then second, on your licensing revenue and product supply revenue and non-cash royalty revenue from your partners, we're seeing some really good growth on that front. So just wondering what that could look like in the second half of the year or if you have any expectations?

Sure. Justin will address the second question in a minute. For your first one, it's frankly more of the same, right? If you look at what we've done, Q1 with all the peculiarities we saw there and uncertainties that people had, I think what we've shown everyone in Q2 is they trust us. Our strategy is right, and we're serving these patients who really need better phosphorus control. So I think that's unequivocal. I'm thoughtful. We are conservative and mindful of the way we give guidance. And I think it's seeing more of the same, honestly, as we navigate this quarter and into next to gain the confidence to provide you some guidance. Justin?

Yes, we generate product supply revenue from our three international collaborative partners. We had a strong second quarter, exceeding $6 million. Our partners place orders with us on a quasi-regular basis, but not every quarter. We expect additional revenue from them in the fourth quarter, which should be relatively similar to the previous quarter. I anticipate limited revenue in Q3. As for 2026, we haven't reached that point yet because they haven't placed their orders. Our partners are performing well; Kyowa Kirin is seeing success in Japan with their hyperphosphatemia sales. We have monetized that royalty stream with our partners and healthcare royalty partners, and I expect it to grow each quarter as Kyowa Kirin continues to strengthen its market presence. They have had a successful launch. However, any modest increase in non-cash royalty revenue is balanced out by a corresponding cost in our P&L.

Next, we have Roanna Ruiz from Leerink Partners.

This is Mazi on for Roanna. Just one from us. Sorry if it's been asked already, but can you provide more granular detail on the current prescription mix between Medicare PAP and revenue-generating non-Medicare patients for XPHOZAH? And how do you expect this to evolve throughout the remainder of '25?

Great question. So we don't talk about the number of scripts that are non-revenue, as we've not done that historically. But for Medicaid and commercial for XPHOZAH, roughly 50-50 is turning out the way we expected it to.

That concludes our question-and-answer session. Mike, I'll turn things back over to you for any additional or closing comments.

Excellent. Thank you all for joining us this afternoon. We are, as ever, focused on our vision of a healthier tomorrow for patients and to maximizing shareholder value. With that, we can close the call. Thank you, Elvis.

That concludes our meeting today. You may now disconnect.