Ardelyx slashes one-third of its workforce after FDA rejection for key kidney disease prospect

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Ardelyx expects its restructuring move to save about $17 million in yearly cash compensation costs. (Getty/AndreyPopov)

In the aftermath of a surprise FDA rejection in chronic kidney disease, Ardelyx is tightening its belt.

July 29, the day after the FDA bounced back the company’s NHE3 inhibitor tenapanor, Ardelyx’s board gave the all-clear for a restructuring plan aimed at reducing operating costs and streamlining its workforce, the biotech said (PDF) this week in a U.S. securities filing.

Under the restructuring plan, which kicked off Monday and is expected to wrap up this month, the biotech will part ways with 33% of its workforce, or about 83 employees. Ardelyx expects the move to save about $17 million in yearly costs.

“We made the unfortunate, but necessary, restructuring changes to extend our cash runway as we work through additional regulatory steps with the FDA to potentially get tenapanor approved in hyperphosphatemia,” Ardelyx’s CEO Mike Raab said in an emailed statement.

Ardelyx staffers on the restructuring chopping block will receive cash payments equal to their base pay for 60 days, plus company-funded healthcare premiums for the period. Ardelyx will take on roughly $3.4 million in restructuring charges. 

The restructuring scheme comes after the FDA last week rejected Ardelyx’s drug tenapanor to control serum phosphorous—or phosphorous in the blood—in chronic kidney disease patients on dialysis.

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Many saw an approval as a sure bet, making the rejection especially painful and confusing. Raab said in a statement at the time the company was “saddened” by the news and did not agree with the regulator’s assessment, while Piper Sandler analysts last week said they were “flummoxed” by the FDA’s “conflicting messaging” around tenapanor’s application.

Ardelyx’s data offered “substantial evidence” that tenapanor reduced serum phosphorous in chronic kidney disease patients on dialysis, the FDA said. But the regulator characterized the treatment effect as “small and of unclear clinical significance" in its rejection letter.

To refile, the company will first need to run another study to confirm tenapanor’s “clinically relevant treatment effect,” the FDA said in its letter. Ardelyx last week said it planned to request a meeting with the regulator “as soon as possible” to discuss next steps.

Ardelyx remains confident in its drug, which “met all clinical endpoints agreed upon by the FDA,” Raab said in a release. Investigators tested tenapanor in more than 1,000 patients across three phase 3 trials.

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For its part, the Piper Sandler team wrote to clients last week that they were “shocked to see such capriciousness from what we’ve heretofore seen as a shining example of regulatory excellence,” referencing the FDA’s back and forth. They pointed to tenapanor’s success in the clinic and the fact that Ardelyx entered labeling negotiations with the regulator earlier this year.

They warned that the FDA’s “nonsensical” decision could add to a “feeling that the agency is not prioritizing physicians or patients.” It’s a sentiment that many are starting to share.

Physician trust in the agency is on the decline, with more than 40% of doctors polled in a recent Spherix Global Insights survey saying their confidence in the regulator had dropped over the past year. Neurologists and nephrologists led the decline, citing the FDA’s controversial approval of Biogen’s Alzheimer’s disease drug Aduhelm and its rejection of tenapanor in chronic kidney disease.