Ardelyx, Inc.

Welcome to the Ardellix Fourth Quarter and Fiscal Year 2024 earnings call. All participants will be in listen-only mode. I would now like to turn the conference over to Caitlin Lowy, Vice President of Corporate Communications and Investor Relations. Caitlin, you may begin.

Thank you. Good morning and welcome to our Fourth Quarter and Full Year 2024 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 ardellix.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 annual report on Form 10K that was filed today and can be found on our website at ardellix.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 Robb, will begin today's call with opening remarks and an overview of the company's progress during the Fourth Quarter of 2024. Next, Eric Foster, Chief Commercial Officer, will provide an update on the performance of Estrella and Exposa. 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, 2024, before we open the call to questions. With that, let me pass the call over to Mike.

Thank you, Caitlin, and good morning, everyone. I'm pleased to be here today to discuss our Fourth Quarter and full year 2024 performance. In the past year, our team's dedication to outstanding commercial execution led to numerous significant achievements. Estrella's growth continued throughout 2024 with an acceleration in the Fourth Quarter as we began to see the positive impact of our expanded sales team. It is evident that patients are benefiting from Estrella as this important medication provides rapid and lasting relief from the symptoms of IVFC, which can significantly disrupt patient's lives. For Exposa, our team successfully executed one of the best product launches in recent years. In the first year of sales, we demonstrated that Exposa is a crucial medication for dialysis patients, enabling them to achieve and maintain target phosphorus levels. In the midst of this outstanding performance, we confidently tackled a challenging reimbursement environment. Our commitment to prioritizing patient needs has never wavered. We've taken strong, decisive actions and we're dedicated to ensuring that patients continue to have access to Exposa as they always have, regardless of the coverage changes made by CMS. Our commitment to protecting patient access guarantees that at a minimum, we will continue to serve dialysis patients as we aim to grow the Exposa business to at least $750 million before patent expiry. Building on the impressive performance of both the Estrella and Exposa, we've successfully reinforced our cash reserves, finishing 2024 with a strong cash position, paving the way for future growth. These accomplishments established the foundation for our growth in 25 and beyond, and we're poised to execute our strategic priorities with determination, firmly anchored in our commitment to commercial excellence. Estrella's growth momentum is continuing as the commercial team builds clinical conviction among prescribers, which alongside our exceptional patient services team, ensures that prescriptions are filled and reach patients. Estrella is an outstanding product and patients deserve access to this treatment and the benefit it provides. Despite the coverage changes the CKT community is navigating, preliminary evidence clearly indicates that our Exposa strategy is effective and that patients across all access paths are successfully receiving treatment. We're extremely proud of our team's performance and the strong initial indicators we are observing, which Eric will share with you momentarily. Our exceptional commercial execution has demonstrated our ability to establish a sustainable and resilient company. Our corporate development team is focused on building a robust pipeline and are actively identifying and evaluating a range of internal and external opportunities. Their efforts leverage our proven strength in development, regulatory affairs, and commercial excellence to drive our next phase of growth. Our focus on serving our patients and driving exceptional commercial and financial performance is at the core of who we are and what we do. We're extremely proud to have generated over $330 million in revenue last year and finished the year with a robust $250 million on our balance sheet. This strong financial position empowers us as we build our company for the future. Rest assured, we will be diligent stewards of our capital, strategically investing in areas where we have confidence in our ability to generate significant value for shareholders. We are building an exceptional company, one that stands out in the industry. Our future is incredibly promising and we are poised for great success. I will now hand the call to Eric to share an update on our commercial performance. Eric.

Thank you, Mike. It's great to be with you all again. Across our portfolio, we had a great fourth quarter driven by strong demand from prescribers for these two -in-class medicines that are demonstrating the clinical benefits they can offer patients. Every day, we hear success stories of patients with IBSC whose quality of life has improved thanks to IBSRELA, or CKD patients who have struggled for years to achieve target phosphorus levels are now coming into range thanks to Xpoza. We had a strong momentum throughout 2024 and we'll look to maintain that momentum in 2025 with strategic investments in areas where we believe we can drive further demand and share. Let me start with IBSRELA. We reported an incredibly strong quarter with more than 32% growth quarter over quarter from Q3. We completed our Salesforce expansion at the end of Q3 and they were trained and in the field for all of Q4, driving that accelerated growth. Importantly, we saw growth from all our key indicators in the fourth quarter, including new and repeat riders and new and refill prescriptions. We particularly saw a notable increase in the growth of new riders. We are pleased to see that because it aligns with the expanded targeting that we implemented with the growth of our sales team. Not only is the team focused on high-riding gastroenterologists, but we've been able to expand the number of high-riding non-GIs, as well as a number of advanced practice providers or APPs, which includes nurse practitioners or PAs who are heavily involved in IBSC management for patients. We're excited about the exit trajectory coming into 2025 and as we look to maintain the momentum, we're focused on maximizing our pull-through across the patient journey. Starting with the top of the funnel, our sales team will continue to focus on driving clinical conviction and patient identification among our expanded HCP list. At the same time, we are thoughtfully increasing our investments in omni-channel communication to engage and drive action among prescribers and patients. Initially, our marketing efforts focused on the prescribers and we saw early on that they were highly responsive to Absarilla's safety and efficacy profile and our marketing messages. We have also learned that IBSC patients are incredibly engaged, seeking new information and connecting with patients alike while also exploring options to manage their condition. We will be increasing our investment in -to-patient communication in 2025 to empower patients to learn more about their condition and the different options to treat their symptoms of IBSC. At the same time that we are driving more patients at the top of the funnel, we will be increasing our focus on pulling those patients through to the bottom of the funnel so more patients can access IBSRELA. We've got an incredible patient services program with our Delix Assist and it performed phenomenally in the fourth quarter. We believe that we can do more and so in 2025, we'll be investing in our patient services programs and notably expanding our Access Manager team. This is a field-based team that is part of our Delix Assist that will focus on pulling through those appropriately identified patients. This team will work with physician offices to help understand the process for prior authorizations and make sure that barriers are addressed so patients can have access to our medicines. We have always had pull-through rates that are in line with our industry. However, we recognize that we can do more and we have the unique ability to address this opportunity because of the our Delix Assist program that helps connect healthcare providers, pharmacies, patients, and payers. I'm excited about the incredible potential that IBSRELA has to help many more patients with IBSC and the continued growth we expect in 2025. Moving on to EXPOSA. The performance that we delivered in 2024 demonstrates just how important this medicine is for patients. EXPOSA's differentiated mechanism of action and strong safety and efficacy profile were attractive to prescribing physicians since launch in late 2023. But the real-world experience that physicians have with EXPOSA demonstrates the significant impact that it can have. More patients are now able to achieve target phosphorus levels thanks to the addition of EXPOSA to their treatment regimen for hyperphosphatemia, an innovation that came nearly 50 years after the introduction of phosphate binders. We recognize that the question everyone is asking is what is going to happen to EXPOSA in 2025. This is what we know today. First and most importantly, dialysis patients who are in need of EXPOSA to lower their serum phosphorus levels have access to treatment. Today, EXPOSA is available as it always has been as a prescription written by a healthcare provider. The only thing that has changed is that EXPOSA is no longer covered by Medicare Part D. Second, our commercial approach is unchanged from last year. As with Ibsrela, our EXPOSA team is focused on driving clinical conviction and patient identification and pulling prescriptions through to the patient. At the same time, they're helping the nephrology community and care teams to understand that their ability to prescribe EXPOSA remains unchanged and that for the best experience, prescriptions should be sent to the Ardellix Assist Specialty Pharmacy. Most importantly, we do not want physicians to change their prescribing habits based on patient coverage. Our message is to prescribe as you always have based on the patient need and we will adjudicate patient access and affordability on our end. That directive will ultimately support our long-term growth expectations. For us, ensuring patients have access to therapies is both a moral obligation and a strategic opportunity. We have seen the benefit that EXPOSA offers and we are fortunate that the business we've structured and the approach that we have taken allows us to ensure access to our medicines regardless of payer. With this approach, we are confident that we can deliver significant growth on our path to 750 million at peak. It is too early for us to share any meaningful commentary on the first quarter, but I can share a few thoughts. The first thing that I looked for when we entered January was if our processes were operating as planned and there are four key patient paths that we have been monitoring. First is an existing patient who was covered by Medicare still on therapy through our patient assistance program in 2025 if they qualify. Second is an existing non-Medicare patient still receiving a revenue generating script. Third is a new qualifying Medicare patient able to access EXPOSA through our patient assistance program and fourth is a new non-Medicare patient receiving a revenue generating script. The answer in all four of these scenarios is yes. So the systems and processes that we put in place in anticipation of this change are working as designed. At this point, we're staying very close to all the stakeholders to quickly learn and address any concerns that may arise. We are connecting with prescribers through every avenue we can to reinforce our message that the access path for EXPOSA is unchanged. Our early indicators are in line with our expectations and we'll share more in the months ahead as we have additional data available. I have a tremendous amount of confidence in our team's ability to deliver on our priorities for this year. They are focused, empowered and a high performing team. We are investing across the commercial organization to strengthen our position in the market, support patients along their journey and accelerate our growth momentum in the years ahead. I will now turn it over to Justin. Justin. Thank you, Eric.

Earlier in January, we announced our product revenue and cash position. So I use this as an opportunity to review that material and highlight additional key financials from both the fourth quarter and full year 2024 as well as offer some thoughts on 2025. We had total revenues of $116.1 million in the fourth quarter of 2024, driven by growth in product sales. On a full year basis, we reported total revenues of $333.6 million in 2024 compared to $124.5 million in the prior year. Our performance was driven by strong year over year growth for Absrela and the exceptional launch of EXPOSA. During the fourth quarter of 2024, we recorded Absrela net product sales revenue of $53.8 million, nearly double the same period of 2023 and an increase of over 32% quarter over quarter from Q3. Our growth was driven by several factors, including strong patient demand, the completion of our field-based sales team expansion and an improvement in our growth to net deduction, which was .5% for the fourth quarter. On an annual basis, we recorded $158.3 million of Absrela net product sales revenue in 2024 compared to 80.1 million in the prior year. We also recorded $57.2 million in net product sales revenue of EXPOSA in the fourth quarter, the increase of 11% over Q3, driven by continued demand for the -in-class medicine. Our growth to net deduction remained consistent at .3% for the fourth quarter. On an annual basis, we recorded $160.9 million of US net EXPOSA sales in 2024 compared to 2.5 million during a partial fourth quarter of 2023 following launch. In addition to product revenue, we also had $4.2 million in product supply and licensing revenue in the fourth quarter and $11.7 million for the full year 2024 compared to 3.8 million during the fourth quarter and 41.9 million for the full year of 2023. As a reminder, we received non-recurring regulatory milestone payments from our collaboration partners in the fourth quarter of last year. We also recorded just over $900,000 in non-cash royalty revenue during the fourth quarter of 2024 and 2.7 million for the full year 2024. Research and development expenses were $13.7 million for the fourth quarter of 2024 compared to 9.5 million for the same quarter of the prior year. In 2024 and 2023, R&D expenses were $52.3 million and $35.5 million respectively. The increase in R&D expenses reflects increased medical engagement with scientific communities and pediatric clinical trial activities. Selling, general administrative expenses were $76.1 million for the fourth quarter of 2024 compared to 47.8 million that were reported for the same period in the prior year. On a full year basis, total SG&A expenses were $258.7 million compared to 134.4 million in 2023. The increase was related to commercial activities for XFOSA, including the aforementioned Salesforce expansion, as well as growth of the overall corporate infrastructure to support our strategy. We had net income of approximately $4.6 million or two cents per share in the fourth quarter of 2024 compared to a net loss of 28.8 million or 12 cents per share in the same period of the prior year. The net income for the fourth quarter of 2024 included $10.8 million in combined non-cash expenses from share-based compensation and net non-cash expense related to the monetization of hyperphosphatumia sales royalties in Japan. Our net loss for the full year 2024 was $39.1 million or 17 cents per share, which included $41.8 million for non-cash expenses from share-based compensation and net non-cash expense related to the monetization of hyperphosphatumia sales royalties in Japan. As of December 31st, 2024, our total cash, cash equivalents and short-term investments increased to $250.1 million as compared to 184.3 million at the end of 2023. This includes $49.7 million in net proceeds that we drew in October from our term loan agreement with SLR Capital, as well as operating cash flows generated during the second half of the year. Before I close, I wanna share some of our financial expectations for 2025 and beyond. From a revenue perspective, we anticipate continued long-term growth for both Absrela and Exposa. We continue to expect Absrela to achieve greater than $1 billion in net product sales annually prior to patent expiry. As we announced in January, we expect to deliver between 240 and $250 million in net product sales revenue for Absrela in 2025, driven by our expanded sales force, as well as investments in patient pull-through and our omni-channel communications efforts. We also expect our growth in net deduction to follow a similar trend that we have seen over the past two years, being 30%, plus or minus 5%, and less favorable in the first quarter and more favorable by the fourth quarter. As we relate to Exposa, as you have heard from Mike and Eric, we continue to have a significant expectation for Exposa, driven by the clear unmet need for CKD patients to have another option to lower their serum phosphorus at the target levels. We expect that Exposa will achieve $750 million in annual net sales revenue prior to patent expiry. As I think we have demonstrated in the past, we provide guidance that is thoughtful and reflects our expectations of the business. We also only give information we feel that we are in a position to give an accurate view. As such, we will not be sharing 2025 Exposa revenue guidance at this time. One thing I can share is that we expect Exposa's gross net deduction in 2025 to be less favorable than we saw in 2024 due to the change in our payer mix. We will also be increasing our STNA expense by approximately $10 million per quarter in 2025, as compared to the fourth quarter of 2024's run rate to grow both Absrela and Exposa. Those investments include the additional market access team members and the omnichannel communications that Eric spoke to, as well as increased costs associated with our patient assistance program following the elimination of Medicare Part D coverage for Exposa. You should note that our royalty obligation payable to AstraZeneca is expected to be fully satisfied in 2025, which should generate some gross margin favorability in the second half of this year. We are excited to be making these investments to grow our business, and we will do so based on our strong cast position of over $250 million. We feel very confident we are in a position to fund our expected operations from our current cast position. We are building a great company and expect to create significant shareholder value this year by delivering on our key strategic priorities. With that, I'll hand it back to Mike.

Thanks, Justin. Since our founding in 2007, every year, no matter the challenges we've encountered, has made us better and more resolute in our mission. 2024 was an incredible year for Ardellix, and the patients we serve are benefiting from our medicines. We protected patient access to Exposa. We doubled down on our commitment to IVSC patients with IZRELA. We strengthened our financial foundation to ensure future growth, and most importantly, we never deviated from our values. The path ahead is clear and filled with promise. We are fully committed to our priorities, driving IZRELA's growth, executing on the Exposa strategy, building a pipeline of impactful medicines, and achieving strong financial and commercial performance. I'm truly excited about our future. We'll keep you informed about our progress in the quarters ahead. I will now open the call to questions. Operator?

If you would like to ask a question, please press star one on your telephone keypad now. You will be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you have a question, please press star one on your phone now. And our first question comes from Yigal at Citigroup.

Oh, great, thank you very much. So my question relates to the IZRELA guidance. So 240 to 250, if you do the math, I mean, it seems quite conservative, about 5% or on quarter growth at the midpoint. I mean, I can understand the low end being conservative, but the high end, I mean, even if you were assume modest decrease versus what you saw in 4Q24, the 32%, it seems like the upper end of the guidance could be quite a bit higher. So I'm just curious if you could comment on the thinking around the 240 to 250. Yeah,

thanks for the question, Yigal. Totally understand, I think as we've seen this business grow and the overall contraction that we see in the IDSC market writ large in the first quarter, we wanna see the impact of that. Historically, if you look at IDSC scripts, they go down about 10%. We've not experienced that historically, and that's probably more due to volume compared to the growth that we have now. So we really wanna navigate that first before we give you anything that's any different than 240 to 250. Again, as Justin said in his comments, and I think you've experienced our guidance in the past, we'll give you numbers that we're confident that we're gonna hit.

Okay, understood. And then on the 750 with Xfosa, so can you just clarify, is this based on using 2033 Hatch Waxman 14 years from 2019 approval, or is it based on an earlier date without Hatch Waxman just based on the core IP? Can you just clarify what timeline you're referencing there, please? Yeah, it includes the extension of Hatch Waxman. Okay, all right. And then last one on the BD front, should we have an expectation that we could see some sort of licensing of a new product this year, or that's to be determined?

To be determined. We're gonna bring in the other team that we've built. We talked about Mike Kelleher and the team that he's established and what they're looking at now. Certainly our objective is to continue to build a pipeline and for the right opportunity, if it's here this year, we certainly would announce that.

All right, thanks so much. Thanks, Y'all.

And our next question comes from Dennis Ding of Jeffreys.

Hi, good morning. Thanks for taking our questions. We have one on Exposa and another follow-up on Nisralla. So for Exposa, thanks for your comments and prepared remarks. It's very encouraging to hear. So we're seeing scripts potentially bottoming out, but curious what you're seeing real time in the field now that we're towards the end of February and if doctors are broadly prescribing Exposa in the same way as they did in 2024. I guess the key question is from a volume perspective, do you think we are at the bottom? And then I have a follow-up.

Sure, just a brief comment from me that I'll ask Eric to comment is, the entire phosphorus management market has been challenge disrupted as we, as providers move into the bundle and how ultimately that operates within the DOs, getting to the patients, all those things. So we're working within that context, right? So think about that. And the message is, Eric said in his comments, that we're trying to enforce with physicians the directive that keep doing what you've been doing historically and we will adjudicate on our end all the issues that we're thinking with coverage for Medicare patients. Whether or not we're at the bottom, I think I certainly wouldn't be in a position to predict that we feel really good about the performance. And I think Eric can comment a little bit more on the sort of four areas that he's been tracking to ensure that that confidence continues.

Yeah, thanks Dennis. I agree with Mike. I mean, I think it is too early to say whether or not we've been at the bottom. What I can say is our message has certainly been well received with regards to access continuing for exposure for these patients. And again, it was really important that we make sure that we were confident that the plan that we have and those four patient groups and pathways that they were being able to kind of flow through and receive access. And very early on, we saw that those four patient paths, they were successful and that patients were able to have access. So we're continuing to see that as we saw from the beginning part of this quarter. And we just continue to be encouraged that we're continuing to see that flow through. As Mike said, there is a lot of activity right now with regards to the binders being in the bundles and the DOs having to work through that. So we're certainly empathetic to the challenges that they're going through. And we just continue to remain focused on ourselves and making sure that physicians are confident that there continues to be access for exposure. And those patients out there in need can have access to it. So we're encouraged by seeing that and we're just gonna continue to push forward from there.

Okay, great. And then my follow up on Israel, it's a three-parter. So I apologize for that. But you started two phase two trials in Parkinson's and CF associated constipation. Can you talk about the rationale behind those two very specific populations and if they are part of your $1 billion peak sales guidance or if these are incremental opportunities and perhaps help us size those markets for us? Thank you.

Sure. Those are investigator sponsored trials which are certainly common in the industry. So those are not ones that we sponsor. And I think as you look at it, constipation is many different etiologies, Parkinson's being one that's common and we're excited to see what those results will look like. And no, that's not part of the billion.

Okay, perfect. Thanks so much.

Our next question comes from Laura Chico of Web Bush Securities.

Good morning. Thanks very much for taking the question. One unexposed, apologies if I missed this, are there any quantitative metrics you could share just with respect to kind of the retention of patients now in 2025 and any possibility you can kind of frame context around the quantification of free drug in the quarter so far?

Yeah, I think the latter question, it's too early for that Laura. As people are going through this process that we described in our remarks, I think I'll ask you to talk about sort of the first two groups of patients that came in from 24 into 25 and seeing that they're still on therapy, that's probably the only thing that we can comment on at this stage.

Yeah, so as Mike said, we're not gonna be able to get into specifics in terms of quantifying it, but I can confirm that we had patients that were on exposed in 2024 covered by Medicare Part D. And as they came into 2025, and obviously we re-verified their benefits and they are able to qualify for our patient assistance program, they have been given access to Exposa. So those patients that were receiving it through Medicare Part D in 2024, now have access to our patient assistance program if they qualify and are continuing to have access in 2025. And then those patients that were receiving it through their commercial or their non-Medicare benefit, again, going through that re-verification process in the January timeframe, if their coverage does continue, we've been able to confirm that they still continue to have access to Exposa in 2025.

Okay, and then maybe just one for Justin, and I think I missed this, with the SLR term loan draw, I think it was about $50 million, where are the primary proceeds going to be applied as more for infrastructure, SGA expansion, any other comments right there?

Sure, Laura, as you know, we've always been very prudent in our capital raising strategies, and so we had an opportunity with SLR capital in October to add that 49.7 million to our balance sheet to give us over $250 million. So we are very well resourced, it's at a very competitive interest rate, and so we want to take advantage of that as well as extend the runway of our interest only period until July of 2028. So it's somewhat of a strategic move to give us plenty of opportunity to give Eric the ability to do what he needs to do to expand the team, to grow a business, and to give our company the opportunity to build a pipeline, which we've touched on in the past, but we're gonna be methodical and patient. But again, with a strong balance sheet now, with plenty of runway, we have that flexibility to build a great company.

Thanks, guys.

Thank you. And our next question comes from Joseph Tomey of TD Cowan.

Hi there, good morning, and thank you for taking my questions. Maybe on the first one, on Exposa, I guess just how familiar are the treating physicians with the bundling dynamics? I guess when we do our KOL calls, some physicians are acutely aware of reimbursement dynamics and others seemingly aren't at all, they just kind of write the prescription and it goes off. So how often are you finding that you're having to correct physician behaviors and kind of remind them just kind of keep doing things as normal? And then maybe second on the BDPs, what sort of assets are you looking for? You've had good progress with the prior authorization commercially with some of your assets. Would you look for a commercial agent or would you wanna expand out the development pipeline? Thank you.

Thanks for the question, Joe. Let me address the second one first and ask Eric to speak to what you just articulated in terms of the terminal that we see out there is exactly what you pointed to. But in terms of what we're looking at, obviously staying within our therapeutic areas is the first strategic consideration that Mike and the team are looking at. And whether the specific types that we're gonna be looking at I think is premature to address that. We're gonna look at something that makes sense within our team with the skill sets that we have across the organization. And the commercial team, but building a broad and robust pipeline is the objective.

Yeah, and then with regard to your first question, Joe, I think it's a good one. What we have learned is the vast majority of the physicians are aware of the bundle situation. But to your point, it's really the DOs that have absorbed, that really have absorbed this as we moved into 2025. And for us, it really allows us to keep a very simple message to the physicians. We know that they do not discern between Medicare or non-Medicare or based on payer coverage. So for us, our message continues to be simple and straightforward as it was in 2024, that regardless of coverage, that they can feel confident that they will have access to Exposa. And that's exactly what we're seeing in 2025.

Thank you. As a reminder, if you would like to ask a question, please press star one on your phone at any time. And our next question comes from Rolana Ruiz of LeeRink Partners.

Hey, morning, everyone. So quick one on Exposa. Given the new reimbursement dynamic, I was curious what factors could allow you to meet or even exceed the 750 million peak sales guide for this product. And also want us to know if you could elaborate a bit more on some of the strategies and resources you're using to make sure Medicare patients continue to stay on Exposa therapy if they qualify.

Sure, I mean, to the last part first is, that is up to the physician, right? And the strong messaging that Eric has been talking about, keep doing what you're doing and the clear clinical benefit that Exposa therapy has demonstrated in helping patients reach their target levels, which previously many have not been able to do, but with Exposa they are. And in terms of the first part of your question, I was scared to address that.

Yeah, so we, as we think about for the patient's journey, we're very proud of our Adelix Assist team and the service that they're able to provide for physicians and for patients out there. And that's one of the reasons why we've decided to expand that to be more of a field-facing team in 2025. So we think about the levers for us, again, it's very simple messaging that we continue to have access, regardless of payer coverage or patients continue to have access, regardless of payer coverage. We continue to make sure that we've got a solid marketing plan. We're out there with physicians, we're in the community, -to-peer programming, meeting them at conferences where we know that they like to receive information and they like to engage with the teams. And then again, the Adelix Assist, to be able to work with the offices, to help triage those patients as they work through their journey, to be able to have access. And we're confident that that works and we're seeing a lot of traction there and access is flowing through in 2025. So that's what's really giving us the confidence that we'll be able to achieve that, whether it's having access in the non-Medicare segments and then also patients being able to qualify for our patient assistance program if they are Medicare patients.

Got it. And last one for me, I noticed you're getting solid traction with the recent Ibsorella Field Force expansion. Just thinking ahead, are there any triggers or milestones that might encourage you to do additional Field Force expansion, either for Ibsorella or Expoza?

We always consider all opportunities to do and deliver more and better to our patients. I think as Eric mentioned, increasing the access team with the field-based access managers is a critical next step. Maybe you can talk a little bit more about that, Eric, for the pull through.

Yeah, so, and also just to recognize that we just completed at the end of Q3 the expansion. So we're still fairly early on in that expansion. Q4 was the first full quarter having the team there. So we still feel like there's plenty of opportunity based on the sizing that we have to get to the 124 that's out in the field right now. So we have plenty of opportunity there. And then for us, it's really about how do we pull through those patients and make sure that the teams are focused in terms of their core areas of responsibility. And that really felt like we could do more with regards to the field access manager team. And so we're excited to be able to expand that team that's taking place in Q1. And they will be out there in the field working with their ABD partners on the sales side starting in Q2. So feeling very confident that we've got the right resources across the patient journey, whether it's through driving clinical conviction, patient identification with the HCPs, or pulling through those patients with the offices and the payer teams.

Got it, thanks.

And our next question comes from Julian Harrison of BTIG.

Hi, good morning. Congrats on the really strong quarter and for taking my questions. On EXPOSA, I'm wondering if you're able to share the approximate public versus private reimbursement split for the fourth quarter. Was it approximately 60-40 or was it notably different than that? And then also curious if private payer access is where you want it to be for 2025 or maybe there's some near-term opportunities to grow the coverage on that side. Thank you.

Thanks for the question. You know, what I think is a confident number that we can say is a 60-40 split between Medicare and non-Medicare. The non-Medicare is more than commercial, right, it's Medicare, it's Medicaid commercial, Tricare VA and Native American Affairs. So that goes with the five pillars of non-Medicare. In terms of expanding access on the commercial side, remember doing that we don't have rebates, we don't have discounts, and that's why we've embraced the prior auth process. So any specificity around expanding that is certainly something that we would always consider but don't see that as a strategy in the short term. I don't know if anything

you'd add to that. No, I would just say, I mean, to your point, following on from prior authorization standpoint, the PA approval rate is very high, and I think you can see that with the uptake that we had in 2024, and certainly reflects the innovation and really the real value that it provides to patients.

Excellent, thank you.

Our next question comes from Ryan Deshner of Raymond James.

Good morning, I wanted to ask about what the level of promotion sensitivity for ExposA looks like compared to what you were seeing at Absrela at this point in the launch and then I have a follow-up. Sure.

Yeah, right now, I would say the team is very focused. We've not expanded the team. We feel like we've got the right number, still continue to focus on the same targets that we did in 2024 and continuing to get receptivity. As Mike mentioned, obviously a lot of activity in the market and so the team continues to be focused on working with nephrologists, obviously working with the dialysis organizations as well, and right now from a promotional sensitivity standpoint, we feel like it's just as it was in 2024, and we still have the same confidence that we had coming into the year.

Got it, and then how are you thinking about expectations for growth to net further down the line at steady state for ExposA now that you're four full quarters into the launch?

Thank you, Ryan. It's still relatively early, as you might imagine, the launch and with the pair dynamic change that we're seeing in 2025 and expect to see prospectively, it'd be truly to give precision. We try to give information when we have it. So as I said in my prepared remarks, we expect it to be less favorable in 2025 compared to 2024 because the Medicaid and commercial related discounts, if you will, are higher than Medicare, but we'll give more color as things progress. It's just too early for us to give guidance.

Got it, thank you very much.

And our next question comes from Ed Arcee of HC Wainwright.

Hello, good morning, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you so much for taking our questions. So first question, also on ExposA, I just wonder if you can discuss the estimated bottom line impact of ExposA now being filled by transitional fantasy as well as the Estetilix patient assistance program, perhaps as a rough set of net sales and also will this be reflected in cost of good souls starting in the first quarter?

Yeah, so I just, I believe I understand your question. Transition Pharmacy is the Ardellixis Pharmacy. We have a closed distribution network with ExposA as compared to Zrela. So there's no change that is different with transition being the pharmacy with whom we work. So I wouldn't expect a change from that. I know Justin can address that as well, but as Justin just said in the previous question, we do anticipate some change to gross net due to the change in pair mix, which would be different that you will see going forward and we'll give you more clarity as things evolve. Justin, I see that.

Just to reiterate what both Mike and Eric said earlier that our patient mix was approximately 60% Medicare, 40% non-Medicare in 2024. And so that is, again, with patients losing Medicare Part D benefit coverage in 2025, that will be a change that we are working through in 2025, but still believe is a significant population that we will build from. And then on the, I believe you may be referring to the cost of our patient assistance program. So as a reminder, costs related to our patient assistance program do not run through costs of goods sold, but rather are part of our SG&A expenditures. And again, they're somewhat modest and that's been included in the guidance that we gave where we believe SG&A will increase approximately $10 million per quarter over the course of 2025 compared to Q4 of 2024.

Got it. And then perhaps one more question from us with XRELA. Based on your methods guidance, 240 and 2025, and you outline a number of initiatives this year, what other programs, strategies do you have in place in order for XRELA to reach towards the $1 billion net sales goal?

Sure, I'll ask Eric to comment a little bit more, but as he said in his prepared remarks, the -the-channel efforts that we have underway, patient communication that is gonna expand a number of other initiatives like that are part of the -the-channel efforts.

Yeah, I would, as we come into 2025, one, we've got the continued expansion of the sales force, so we've got a full team in place there. The team, the marketing team's done a great job. We've had the evolution of the campaign in Q4 of last year and now continue to expand our patient initiatives and our patient marketing efforts. This is a devastating disease for these patients, and we need to continue to amplify the impact of the disease and the patient voice. We know we've got an engaged patient population, and we wanna meet them where they are to make sure that they feel empowered and confident when they run or when they get into the office. And the marketing team is working very hard to really pull that through in 2025. And then from an access standpoint, we talked a bit about the field access managers. So again, as you think about that patient journey, really from coming into the physician's office, talking about their disease and the impact on their life, and really raising their voice and being impactful with the physician to be able to get the right treatment for them, that we feel that we've got the right insights and we've got the right strategy, that we're gonna be able to amplify that in 2025. And then again, with the field access manager team to really help those patients be able to pull through so that they can continue to have access to it throughout.

Understood. Thank you again for taking the questions. Looking forward to looking at your 2025 progress.

Thanks, Evan. And our next question comes from Chris Raymond of Piper Sandler.

Yep, hey, thanks guys. Just on the commercial pay market for Exposa, I know it's early, but as you guys have done scenario planning with such a large segment of the market getting freed right going forward, have you thought about when you might start to see private payers coming back to you for more discounts, if at all? Ask maybe another way, I know Exposa already has a decent discount off of list price, but is there a point in time where maybe you'll feel comfortable that you won't see any more significant pricing pressure from the commercial market? Thanks.

Hey Chris, thanks for the question. We actually don't discount to payers. That's the whole decision that we made to embrace the prior authorization process. And if and when they come to us, that means that we have come to their radar and generating sufficient revenue that they're gonna ask us those questions. When or even if that happens, I think it's hard to predict. I don't know, Herrick, any thoughts?

Yeah, I would say our primary objective is access to Exposa. And in the current market, patients can have access. We're seeing that certainly on the commercial side and the other non-Medicare segments. Should that change and should we start to engage in communications? Again, our primary goal is access to Exposa and we will engage in those conversations. And if we need to shift and pivot, then we certainly have the flexibility to do so. But right now we continue to see that the access is maintained in those non-Medicare segments and we're gonna continue to push forward.

Thank you. This concludes our question and answer session. I would like to turn the conference back over to President and CEO, Mike Robb, for any closing remarks.

Thank you all for joining us this morning. And a special shout out goes to Kim Ardelics, who I know is listening. Your hard work is invaluable in bringing our central medicines to patients and we wouldn't be where we are without you. I also want to acknowledge our shareholders for their support on this journey. We're building significant company, having successfully developed our medicines from initial concept through development and now into commercialization. This achievement is not just noteworthy, it's a testament to our capabilities and we're excited to seize the opportunity and to do it again. With that, we can conclude the call. Thank you, operator.

This concludes today's conference call. Thank you for attending.