On Friday, H.C. Wainwright increased its price target on shares of Ardelyx, Inc. (NASDAQ:ARDX) to $13.00, up from the previous target of $11.00, while maintaining a Buy rating on the stock. The firm's optimism is based on projections of robust sales growth for IBSRELA, Ardelyx's treatment for irritable bowel syndrome with constipation (IBS-C).
Ardelyx recently reported net sales of $80.1 million for IBSRELA in the United States for 2023, aligning closely with the preliminary estimate of $80 million disclosed in January 2024. The company's fourth-quarter sales showed a significant increase, with revenues of $28.1 million, marking a 26.2% growth over the third quarter's $22.3 million.
The company's management has confirmed that IBSRELA is on track to meet its 2024 net sales revenue guidance of $140-150 million, which would represent an annual increase of 75% to 87%. Additionally, the management anticipates that IBSRELA will capture over 10% of the IBS-C market share, eventually generating more than $1 billion in annual U.S. net product sales before the expiration of its patent.
Assuming the relevant patent, extended to August 1, 2033, under the Hatch-Waxman Act (U.S. patent no. 8,541,448), applies to IBSRELA, the management's projections indicate that the drug could reach $1 billion in U.S. net sales by mid-2033. This forecast is supported by the consistent quarterly and annual sales growth since IBSRELA's U.S. launch in April 2022.
H.C. Wainwright cites the consistent sales performance and the latest management guidance, which suggests a baseline annual sales growth of 75% for IBSRELA in 2024, as reasons for the increased confidence in the drug's growth trajectory. The firm believes that the management's projection of $1 billion peak net sales is reasonable and achievable by 2033, leading to the raised price target for Ardelyx shares.
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