Mara Goldstein Sees 80% Upside for Ardelyx Inc (ARDX) Following Clinical Trial Victory

Ardelyx's drug tenapanor gets closer to FDA approval; Cantor's Mara Goldstein weighs in.


Ardelyx Inc (NASDAQ:ARDX) shares jumped over 40% today, after the drug maker reported positive phase 3 trial for its constipation-predominant irritable bowel syndrome (IBS-c) drug tenapanor, setting up regulatory filings next year.

Specifically, the combined responder rate (primary endpoint) for six of 12 weeks, showed that a greater proportion of tenapanor-treated patients compared to placebo-treated patients had at least a 30 percent reduction in abdominal pain and an increase of one or more complete spontaneous bowel movements (CSBM) in the same week for at least six of the 12 weeks of the treatment period. In addition, tenapanor achieved statistical significance for the CSBM and abdominal pain responder rates in the six of 12 and nine of 12-treatment weeks, with a consistent response across the 26 weeks of the study.

In reaction,¬†Cantor analyst Mara Goldstein reiterated an Overweight rating on Ardelyx shares, while raising her price target to $14.00 (from $12.00), which implies an upside of 80% from current levels. (To watch¬†Goldstein’s track record, click here)

Goldstein commented, “With positive T3MPO-2 results in IBS-C, we believe ARDX shares could gain back ground lost after the release of T3MPO-1, as data shows a path to NDA submission (expected in 2H18) and a commercial opportunity above the current valuation, in our view. This, combined with potential upside from trials in hyperphosphatemia and hyperkalemia (RDX7675), and possible partnerships, suggest to us that the shares have room to move up.”

“We are raising our price target to $14 from $12 based on lowering our revenue risk adjustment to 15% from 25%, and maintaining a 25% discount for unknowns such as regulatory risk, which leaves room, in our view, for upside. With the profile confirmed in T3MPO-2 and unique features (mechanism, onset of action), we see opportunity for tenapanor,” the analyst added.

Wall Street echoes a bullish point of view, with TipRanks analytics exhibiting ARDX as a Buy. All the 6 analysts polled in the past 12 months rates a Buy on Ardelyx stock. The 12-month average price target stands at $16, marking a nearly 105% upside from where the stock is currently trading.