Ardelyx, Inc. (NASDAQ:ARDX) Q4 2023 Earnings Call Transcript

Ardelyx, Inc. (NASDAQ:ARDX) Q4 2023 Earnings Call Transcript February 22, 2024

Ardelyx, Inc. misses on earnings expectations. Reported EPS is $-0.12 EPS, expectations were $-0.09. Ardelyx, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Welcome to the Ardelyx Fourth Quarter and Full Year 2023 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Caitlin Lowie, Vice President of Corporate Communications and Investor Relations at Ardelyx. Please go ahead.

Caitlin Lowie: Thank you. Good afternoon and welcome to our fourth quarter and full year 2023 financial results call. During this call, we will refer to the press release issued earlier today, which is available on the investor 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 materially from those described. We encourage you to review the risk factors in our most recent annual report on Form 10-K that was filed today. It 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 fourth quarter of 2023 and the full year 2023. Next, Susan Rodriguez, Chief Commercial Officer, will provide an update on the performance of IBSRELA and XPHOZAH. Our Chief Medical Officer, Dr. Laura Williams, will then discuss and expose the real-world evidence study announced today. Justin Renz, Chief Financial and Operations Officer, will conclude today’s prepared remarks with a review of the company’s financial performance during the fourth quarter and full year ended December 31, 2023, before we open the call to questions. With that, let me pass the call over to Mike.

Mike Raab: Good afternoon, everyone, and thank you for joining us on the call. I feel like I’ve said this every quarter, but we are really excited to be here to discuss our progress and performance. The fourth quarter was significant, as was all of 2023, as we continue our evolution as an integrated biotech company, bringing two first-in-class products to patients. IBSRELA and XPHOZAH are demonstrating favorable market response with high healthcare practitioner interest and continuously expanding adoption. In November of last year, we launched XPHOZAH, and the market response, both in terms of treatment uptake and direct feedback we’ve received from the field, has validated what has always been clear to us, that physicians and patients have been waiting for a novel mechanism option to help control serum phosphorus.

As you will hear from Susan, all the indicators we track early in launch point to a strong uptake. Additionally, as we announced today, as part of our commitment to continually build our understanding of the clinical utility of our products, we are conducting a real-world evidence study designed to capture the impact that an XPHOZAH-based regimen can have on the treatment of hyperphosphatemia. Laura will review more details about the study during our call today. Turning to IBSRELA. In January, we shared our enthusiasm for our commercial progress we are making, and our expectations for IBSRELA are high. We shared that we believe IBSRELA has the potential to become a $1 billion drug. The patients are there, they need relief, and many of them continue to experience symptoms despite treatment with incumbent therapies, clearly reinforcing the need for novel treatment options like IBSRELA.

IBSRELA’s mechanism of action, solid clinical data, and a growing user base of positive experience is resonating, driving expanding consideration and adoption by more and more healthcare practitioners. With patients’ positive experiences with IBSRELA, ACPs are beginning to change how they engage with and treat their IBS-C patients as they are expanding their use of the therapy. In addition, the path for access is established. These are the fundamentals of our commercial strategy, and they are working. As we noted in January, we will always look to expand the opportunity and to ensure our medicines get to those patients who need it. Thus, we are thoughtfully investing in expanding our commercial reach. We are also thinking about what the future of Ardelyx will look like, and we find ourselves in a unique and enviable position.

We have options. With both XPHOZAH and IBSRELA approved in the U.S. and doing well, we are engaging potential international partners to bring these products to patients in other global markets. In addition, with our established and proven commercial organization, we are emerging as a partner of choice for development stage assets in therapeutic areas where patients continue to have unmet needs. And with our successful track record of discovery, development, and regulatory approvals, we also have the opportunity to develop earlier stage assets ourselves. These activities are ongoing, and we look forward to sharing more information when appropriate. In the meantime, our top priority is to focus on sustaining the commercial momentum of IBSRELA and XPHOZAH.

I will now hand the call to Susan to share an update on our commercial performance. Susan?

Susan Rodriguez: Thank you, Mike. It is great to be here today to share a commercial update on both IBSRELA and XPHOZAH. Let me start with IBSRELA. IBSRELA has established a unique position within the IBS-C treatment paradigm and is changing the way the HCP community treats patients with IBS-C. HCPs that we have reached with our messaging are responding favorably to the differentiated mechanism of action and clinical data profile, adopting IBSRELA, and continuously expanding their use based on the patient responses they are seeing. Significant opportunity exists to continue to expand awareness, knowledge, and uptake across our target market. Our research has demonstrated that when HCPs become aware of IBSRELA and its first-in-class mechanism, they begin prescribing, and the more they see, hear, and learn about IBSRELA, the more they prescribe and expand their thinking of patients who are candidates for IBSRELA.

The fundamentals driving IBSRELA’s growth momentum are strong. IBS-C is a condition of multifactorial pathophysiology, and patients need multiple mechanism therapies to improve treatment outcomes and provide additional relief. Prior to the launch of IBSRELA, there was a single class of drugs available for patients with a large unmet need across patients whose symptoms persisted despite treatment with these therapies. IBS-C prescriptions are concentrated across an accessible group of HCPs who have demonstrated to be very responsive to both our field-based sales team as well as our omni-channel digital engagement program. A favorable access profile is established. Interest is high. Response to the IBSRELA profile is driving adoption. Favorable treatment experiences are driving expanded use, which, in turn, is driving a continuously expanding view of patients who are candidates for IBSRELA therapy.

We continue to see consistent, persistent growth of IBSRELA across all key performance metrics. New prescriptions are growing. Refill prescriptions are growing. New writers are growing, and use across the existing writer base is persistently growing. These foundational elements will be leveraged and built upon as we increase our investment in IBSRELA in 2024. You can expect to see continued steady growth throughout the year. Turning to XPHOZAH. At just three months since launch in November, we are very pleased to see the market responding as we anticipated. The high level of awareness, interest, and intent to adopt has translated into strong initial product uptake. The $2.5 million in revenue we reported during the fourth quarter, but really from mid-November through the end of December, validate that there were patients and physicians who were waiting for first-in-class phosphate absorption inhibitor XPHOZAH as a much-needed option for patients who were not able to achieve target serum phosphorus levels with phosphate binders alone or who were intolerant of phosphate binders.

We are continually hearing from physicians who say that patients who are on an XPHOZAH-based regimen are experiencing positive results. Additionally, patients are responding favorably to the single-tablet, twice-daily dosing profile of XPHOZAH, both when it’s being added to their binder regimen or when the HCP chooses to discontinue their binder therapy and initiate treatment with XPHOZAH. In addition to a positive therapeutic response and patient experience reported by physicians, we are rapidly establishing a favorable access landscape for XPHOZAH. Payers are establishing coverage policies which provide access to XPHOZAH via a prior authorization for patients who are not adequately responding to binder therapy or are intolerant of binder therapy.

Nephrologists report to us that a large subset of their patients meet these criteria, and nephrologists are demonstrating a willingness to engage in the administrative PA process to secure access to therapy for these patients as they believe they are in need of a novel mechanism approach. At this point, we are seeing patients access XPHOZAH across all commercial and government payers. In addition, we are seeing patients take advantage of the resources available through our patient services programs, including our copay pay down program and patient assistance program for qualifying patients. Finally, we are also seeing strong market interest and responsiveness to our in-market messaging centered on the novel phosphate blocking mechanism and clinical profile of XPHOZAH.

Our XPHOZAH-dedicated sales force of 60 are finding nephrology offices across the country welcoming and eager to learn more. Our digital and in-person educational sessions are highly attended and our various omni-channel digital communications are seeing high levels of engagement. These are all positive launch indicators that we believe will result in continued, consistent and persistent uptake. The foundational elements of the Ardelyx commercial approach are all working together and we are incredibly pleased with the performance thus far. What we see is consistent and persistent growth driven by the market need, favorable market access and key demand creation fundamentals that are delivering on the mission of Ardelyx to bring a novel mechanism therapy to patients who, despite treatment with available therapies are in great need of a new option.

It is an exciting time for our team and for Ardelyx. The growth momentum we are seeing for both IBSRELA and XPHOZAH is exciting. The team is laser-focused on sustaining this momentum with the strategic intent to reach all patients in need of our first-in-class therapies. I look forward to continuing to share updates with you in the future. With that, I will hand it to Laura.

Laura Williams: Thank you, Susan. I’m really pleased to join you today. In addition to all the great work that Susan shared with you in support of IBSRELA and XPHOZAH, we also continue to expand our medical and clinical understanding of our products. Medical education for patients and HCPs, as well as data dissemination via abstract presentations and publications, continue to provide valuable insight and enhance the science around our products and more generally within these therapeutic areas, which brings me to one of the data-gathering programs that I’m extremely excited about. Today, we announced that we will be initiating a real-world evidence study of XPHOZAH. As we know in clinical development, gaining a real-world understanding, our therapies can vastly increase our knowledge of how these drugs are impacting patients outside of the more controlled clinical setting, complementing our overall understanding of the treatment paradigms for our patients.

Real-world evidence studies can shine additional light on the safety, tolerability and effectiveness of a therapy and provide greater insight into epidemiology, disease burden, treatment patterns, treatment adherence, impact on quality of life, and importantly, how a new drug like XPHOZAH integrates into a patient’s lived experience. We anticipate that these types of data will provide Ardelyx with additional insights to help us support the patient and physician communities as they integrate XPHOZAH into their treatment practices. It will also help us develop educational materials for patients to maximize their understanding of the drug and potentially enhance their experience, while continuing to highlight the favorable benefit-risk profile of XPHOZAH.

And it will also support ongoing discussions with payers. This will be a real-world, long-term, prospective observational cohort study designed to capture the impact of XPHOZAH-based regimens in patients with hyperphosphatemia on maintenance dialysis who were either not controlled on or intolerant of binder therapy. To that end, patients on the XPHOZAH-based regimen will include those who are using XPHOZAH in combination with phosphate binders, as well as those who are taking XPHOZAH as monotherapy. We will follow these patients over a period of up to three years to understand the persistence of treatment effectiveness and achieving and maintaining serum phosphorous within the guideline recommended range. This extended analysis period will allow us to also examine changes in treatment patterns, discontinuation rates across treatment regimens and the impact of an XPHOZAH-based regimen on patient satisfaction.

I am very excited about what XPHOZAH may be able to do for our patients and capturing data in a real-world setting will not only supplement the insights we’ve gained in our clinical trials, but more importantly will further expand our understanding and enhance our ability to support the patients and the physician communities who are constantly striving to manage serum phosphorous in the setting of end-stage kidney disease. I look forward to sharing more detail and results from this trial in the future. I will now pass it to Justin.

Justin Renz: Thank you, Laura. Earlier in January, we pre-announced our product revenue, so I’ll use this as an opportunity to review that material and highlight additional key financials from the fourth quarter and full year 2023. What I believe you will hear from the information we have provided today is, we find ourselves in a strong financial position. We are well-resourced, we have multiple revenue streams and we are thoughtfully investing in continued growth. We have total revenues of $34.4 million in the fourth quarter of 2023, driven by growth in net product sales revenue. On a full-year basis, we reported total revenues of $124.5 million in 2023 compared to $52.2 million in 2022. Our significant year-over-year growth was driven primarily by the strong performance of IBSRELA.

I will now take a moment to walk through the relevant contributions of our revenue components during the fourth quarter and full year. First, we had U.S. net product sales revenue of IBSRELA in the quarter ended December 31, 2023 of $28.1 million, a 26% quarter-over-quarter increase from the $22.3 million we reported in the third quarter. On an annual basis, we recorded $80.1 million of IBSRELA, U.S. net product sales revenue in 2023 compared to $15.6 million in 2022 as a result of consistent and persistent growth in all key metrics. We also recorded $2.5 million in U.S. net product sales revenue of XPHOZAH in the fourth quarter following the launch in November. Second, we reported $3 million in licensing revenue in the fourth quarter, bringing our full-year licensing revenue total to $35.8 million, which is comparable to the $35 million in licensing revenue that we recognized in 2022.

Finally, we reported product supply revenue of approximately $800,000 in the fourth quarter and $6.1 million for the full year of 2023 compared to $1.5 million during the full year of 2022. Research and development expenses were $9.5 million in the fourth quarter of 2023 compared to $9.1 million for the same quarter of 2022. In 2023 and 2022, R&D expenses were $35.5 million and $35.2 million respectively. Selling, general and administrative expenses were $47.7 million in the fourth quarter of 2023, an increase of $28 million from the $19.7 million we reported for the same period of 2022. The increase was due to the costs associated with the continued commercialization and growth of IBSRELA, as well as the launch activities for XPHOZAH. On a full-year basis, total SG&A expenses were $134.4 million compared to $76.6 million in 2022.

We had a net loss of approximately $28.8 million or $0.12 per share in the fourth quarter of 2023 compared to net income of $10.7 million or $0.06 per fully diluted share in the same period of 2022. The net loss for the fourth quarter of 2023 includes $5 million in combined non-cash expenses from share-based compensation and non-cash interest expense related to the sale of future royalty. Our net loss for the full year of 2023 was $66.1 million or $0.30 per share, which included $17.9 million of non-cash expenses from share-based compensation, non-cash interest expense related to the sale of future royalties and impairment of a right of lease use asset. In 2022, we reported a net loss of $67.2 million or $0.42 per share for the full year. As of December 31st, 2023, we had total cash, cash equivalents and short-term investments of $184.3 million as compared to $123.9 million at the end of 2022.

This includes $22.4 million in net proceeds that we drew in mid-October from our term loan agreement with SLR Capital, which we announced following the approval of XPHOZAH. In addition to our cash as of December 31st, 2023, in January, we received a $3 million milestone payment from Fosun Pharma following the U.S. approval of XPHOZAH. We also intend to draw the next $50 million tranche from our term loan agreement with SLR prior to the expiry of this option on March 15th, 2024. Now, let me take a few minutes to give you some insights to what we currently expect for 2024. First, as it relates to IBSRELA. Our strong performance in 2023 was driven by consistent uptake for IBSRELA across each of our key measures, including new writers and repeat writers, as well as new and refilled prescriptions.

IBSRELA’s performance to-date and as Susan shared earlier, the continued insight from our in-field experience has strengthened our confidence in the potential for this product. As a result, in January, we announced we currently expect IBSRELA’s U.S. net product sales revenue for the full year 2024 to be between $140 million and $150 million. As a reminder, our guidance does not include any anticipated XPHOZAH, partner milestone payments or product supply revenues. As we’ve continually done since the launch of IBSRELA, we have thoughtfully increased our investment as our internal expectations evolved. We began additional planned investments into our sales and marketing in January, including the expansion of our field presence from 64 to 124 dedicated to IBSRELA, as well as increasing our spending in marketing initiatives, including additional engagement, product sampling, and our patient support services.

As a result, by the third quarter of 2024, we anticipate incurring incremental operating expenses, averaging approximately $20 million more per quarter when compared to our fourth quarter of 2023. We feel confident that our current cash position will support our expected spend, including these investments. We are excited about IBSRELA’s performance, the early days of XPHOZAH, and the strength of our cash position. We will continue to be thoughtful with how we deploy capital while focusing on maximizing shareholder value. With that, I’ll hand it back to Mike.

Mike Raab: Thanks, Justin. We accomplished a lot in 2023, and we’re not yet done, and we’re not looking back. 2024 is going to be yet another important and exciting year for our delegates. We are looking ahead, and our team is more aligned than ever on the company’s path forward. I will now open the call to questions. Danielle?

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Q&A Session

Operator: [Operator Instructions]. The first question comes from Dennis Ding from Jefferies. Please go ahead.

Dennis Ding: Hi. Thanks for taking our questions, and congratulations on all the progress. So, two questions for me. For XPHOZAH’s growth to net, can you remind us your guidance on that and the various pushes and pulls that could take place in Q1, given you guys have made some comments on things like co-pay assistance and patient assistance programs? And then question number two is also on XPHOZAH, but around HR 5074. I appreciate this is sort of out of your control, but can you elaborate on some of the different scenarios that could come out of this, and that you’re confident in your ability to manage the business in each of these scenarios? Thank you.

Mike Raab: Sure, Dennis. Let me address the second question first, and then I’ll pass it off to Justin for some discussion on growth to net. You hit the nail on the head. We can’t predict what’s going to happen in Washington. We’re very confident with the approach that we’re taking in the business with XPHOZAH, and obviously continue to monitor and participate as much as is practicable in what’s trying to be accomplished in DC. Obviously, the broader questions there in terms of the continued resolution of government functioning is what the priority is there in DC, and we will continue to update you and everyone else as when anything changes with the work that’s being done there. Justin?

Justin Renz: Thanks, Mike. Hi, Dennis. So for the fourth quarter, our growth to net deduction was in line with our expectations at approximately 21%. Generally speaking, at this stage, it’s too early to tell what we can expect with any high level of specificity or detail. What we can say is generally speaking, we expect that we may see a higher percentage of XPHOZAH patients on Medicare compared to IBSRELA. So due to the government segment rebate dynamics, we expect that the growth to net deduction may be slightly unfavorable for XPHOZAH compared to IBSRELA when it’s somewhat early, and of course, we haven’t really experienced the seasonality yet because it’s obviously the first time we’ve watched and started selling XPHOZAH in the first quarter of the calendar year.

Dennis Ding: Got it. Thank you.

Operator: The next question comes from Chris Raymond of Piper Sandler. Please go ahead.

Chris Raymond: Hey, thanks, and congrats from us too on the progress. Maybe two questions, and they’re both XPHOZAH. So just on the three-year observational study, at least in terms of the SPRIX [ph] data that we get, and I know you guys get that too, intent to prescribe is really robust. Awareness, almost universal, and there’s just a ton of evidence that docs are, at least initially, you’re very satisfied with the drug. And it seems like the pinch point really is access, as you might expect right now. So I guess the question is what commercial itch does this trial scratch with that kind of reception you’ve already had, or is there a regulatory commitment that this fulfills? And then I’ve got a follow-up.

Mike Raab: Yeah, and let me just quickly address that, and then I’ll pass on to Laura for any other comments. No regulatory commitment for this. This is, as Laura said in her comments, our continued commitment to understanding the clinical utility and where and how a product like XPHOZAH can be used. And it’s certainly curiosity, but it’s also understanding that as this continues to grow, there’s going to be questions and thoughts from payers and others that we want to be prepared to answer. And the only time to start is before you get those questions. So it’s better to have these data than not. And it has as much to do with our belief in the clinical utility and capturing the data, demonstrating that. Laura, anything to add?

Laura Williams: Yeah, Mike, I think the only other piece to add is, you know, again, this, as you said, no regulatory commitment. This really reflects our desire to better understand the impact that a drug like XPHOZAH could have on patients. We think that impact will be positive. And I think the other piece of it is we also want to get a sense of patient satisfaction. You launch these drugs, you obviously have an objective to address on that need. And I think the ability to capture data on, how patients are experiencing these drugs in their lived day-to-day, sort of quality of life settings is really, really important.

Chris Raymond: Okay, great. Thanks. And maybe a follow-up, please. Yeah, Susan, in your comments, you mentioned, out of the gate working through prior ops, expecting that out of the gate. But again, back to the SPRIX data that it looks like about 20% or so of patients do not involve prior ops. Can you give a little bit of color, I guess, on maybe the dynamic going forward? Is it the goal to reduce the number of patients requiring prior ops, reduce the sort of lead time or the turnaround time for those or both, or, you know, any sort of comment on the dynamic and what your, focus items are as you try to streamline the process for access?

Susan Rodriguez: Yeah, thanks, Chris. Yeah, we have been engaged with payers really months in advance of the approval, post-approval now with the final label. And they’re defining their coverage policies really exactly as we anticipated, very consistent with our labels, providing a path to access via a prior authorization, requiring the patient to have been treated on binders previously inadequately responding or intolerant of binders. So that is really our go-to-market strategy because we at this time do not intend to engage in contracting with the payers. You know, XPHOZAH is the only non-binder available. It is the first-in-class phosphate absorption inhibitor, the only option now for patients that have been treated on binders and have been found to be inadequate.

So we really are not going to be contracting. There is no path forward for a formulary position that is going to be first, before treatment with binders. So the prior op path is the direction that we’re on. So what’s critical for our commercial success is the comprehensive patient services support in the office to enable that prior op process and getting the physician and the office comfortable with that process. And what we’re finding exactly is with IBSRELA, once they run through the process a few times and they get more and more comfortable with it and realize that when they go through that administrative process, the patient ends up having access to XPHOZAH because of all of our patient assistance programs and ability to buy down their commercial co-pay.

So both from an access and affordability standpoint, our patient services really enable the physician to successfully navigate that PA process. So for us, the success in the access path is really continuing to support that nephrology interest and wanting to go through the process because they believe the patient’s in need of XPHOZAH and supporting them through that process. What we’re finding so far is that when they do so, we’re getting those prior ops approved and patients are gaining access to XPHOZAH.

Chris Raymond: Thanks so much.

Operator: The next question comes from Laura Chico from Wedbush. Please go ahead.

Laura Chico: Hey, good afternoon. Thanks very much for taking my question. One on XPHOZAH and then one on IBSRELA. For XPHOZAH, could you just talk a little bit more about at what point you would move to secure PDUFA for XPHOZAH? And how should we think about the base case in terms of duration in which that would be active? I’m not sure if the calcium medic experience would be a relevant proxy here.

Mike Raab: Yeah, so Laura, I think we’re still trying to determine that as well. Obviously, if we go into depth, but we’ve got to go through getting the proper codes and doing that. So I think as we get closer to that and get more clarity, we’ll provide that commentary.

Laura Chico: Okay. And then back to IBSRELA, I think Susan made the comment that you had kind of a changing view on who might be a good patient for this drug as you’re getting more experience and exposure. Could you just expand on that a little bit further? And I guess specifically, I’m trying to understand a little bit more about how you’re thinking about utilization earlier in the disease process. Are you seeing signs of earlier utilization with IBSRELA? Thanks.

Susan Rodriguez: Yeah, actually, it’s really an expanding view. So what we’re finding is that now that the HCPs who treat IBS-C have a novel mechanism option, they’re increasingly identifying and aware of the patients that they had treated with GCC agonists, but are having persistent symptoms and really could benefit from a novel approach. So it’s really the patients they treat every day, particularly these high-riding HCPs that we’re focused on, every patient that they see has likely been tried on a GCC agonist or is on a GCC agonist. And what we’re finding, so those patients implicitly meet the prior authorization criteria. And what we’re finding is that physicians are increasingly identifying them, engaging them in dialogue and saying, hey, there is a new therapy option available now that I really think you could benefit from.

So they’re just expanding their view on patients now that actually could benefit from a novel approach since they’ve seen the good results for IBSRELA in the patients they initially tried it on.

Laura Chico: Thank you.

Operator: Thank you. The next question comes from Louise Chen from Cantor Fitzgerald. Please go ahead.

Louise Chen: Hi, congratulations on all the progress and thanks for taking my questions. So I wanted to ask you, including the drawdown that you expect in March, what do you estimate your cash runway to be? And then also on tenapanor, I saw that you have a potential regulatory action coming in China. So just curious, how big that opportunity could potentially be for you? And then same question for Japan with the launch, how should we think about revenues in Japan in first quarter ’24 and beyond? Thank you.

Mike Raab: Sure. Let me address a couple of those things and then I’ll pass it off to Justin. Recall that what we did with our relationship with KKC in Japan is we monetized those royalties, right? So you shouldn’t expect anything more coming from our partnership in Japan. And it’s up to KKC to speak to what kind of revenues they would expect out of their market. With our relationship in China, certainly there’s some regulatory actions that can happen there. We’ve not really spoken a whole lot about what the opportunity is. And I think we’ll hold off on that as well. In terms of the drawdown in March, we’re probably not going to give you any specific numbers in terms of runway and what that provides. But if you can address that, Justin.

Justin Renz: Sure. Thank you, Louise. And thank you, Mike. We are overall starting to move towards what we’ll call steady state spending. So this drawdown, of course, we’re very mindful of how we bring in additional capital and we try to be thoughtful and measured in how we approach our spending and our planning. And so on top of the 184.3 billion we had at the end of the year, this really does put us in good shape. And we are obviously always trying to balance need or fund our operations with other considerations. So for us, we’re taking it thoughtfully and measured. And we mentioned the increased activities we look to add to the commercial team this year. And once we get to the steady state, as I mentioned, we’ll be able to give you a more precise number. We’re not really consistent to give you an exact date now, other than we’re in really good shape in the near term.

Louise Chen: Okay. Thank you.

Operator: The next question comes from Yigal Nochomovitz from Citi. Please go ahead.

Yigal Nochomovitz: Hi, Mike and team. Thank you. On the observational trial that you talked about, can you just talk a little bit more, is there a fixed number of patients that can enroll or is it more open-ended? Will the patients that go into that trial be getting free drug or are they still considered commercial patients? And also just, you obviously had approval back in October. Just curious as to why the study is starting now versus right after when the drug was approved. Thanks.

Mike Raab: Sure, Laura.

Laura Williams: Yeah, sure. I mean, thanks, Yigal. I mean, the first question in terms of the number of patients, it is more open. I mean, obviously it’s a real-world study where, again, we’re looking at patients who are being prescribed the drug in a real-world clinical setting. And so it’s not free drug. It’s basically patients who, again, are either intolerant to phosphate binders or have not gotten to their treatment goal on binders alone. And so it’s more of an open sort of enrollment piece. But again, the investigators that are looking to enroll patients will make that decision based on the normal shared decision-making between patients and physicians.

Mike Raab: And Yigal, to address your question about its commencement, it takes time to get these things going and figuring out which investigators we’ll work with. So nothing about that timeframe doesn’t make it relevant.

Yigal Nochomovitz: Right. Okay. And then I was doing some math on the guidance. So 140 to 150 works out to 9% to 12% quarter-on-quarter growth. So just curious about how you arrived at that. And then actually, if you carry that out into the future, and then you look at what happened with Linzess. Linzess, it launched December 2012. It got to a billion in 2021. It took nine years. If you take the low end of your guidance on quarterly, quarter-on-quarter, you will get to 1 billion in, I guess, somewhere around 2029, 2030. So just curious what you think about that timetable.

Mike Raab: Well, I think your math is very good. But what we’ve said is that we see this as $1 billion opportunity. We haven’t given the timeframe within which we will accomplish that. I think, I hope what you’ve learned about us, we’re very measured in the way that we do this. And certainly, if we see opportunity to give you more specificity around the timeframe of hitting those numbers, we will. But we’re very confident with what we’ve guided for this year between 140, 150, certainly gets us on the kind of trajectory you just described.

Yigal Nochomovitz: Okay. Great. Thank you.

Operator: The next question comes from Ryan Deschner of Raymond James. Please go ahead.