Ardelyx, Inc.

Welcome to the Ardellix Fourth Quarter 2025 Earnings Conference. All participants will be in a listen-only mode. I would now like to turn the conference over to Kaitlyn Lowy, Vice President of Corporate Communications and Investor Relations. Kaitlyn, you may begin.

Thank you. Good afternoon and welcome to our fourth quarter and full year 2025 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 ardellis.com. Please note that we are also including a slide presentation to accompany today's remarks. You can view the material by accessing the webcast version of today's call on the investor section of ardellis.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 10-K that will be filed today. It 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 filed by Eric Foster, Chief Commercial Officer, who will provide an update on the performance of Isdrella and Expoza. Dr. Laura Williams, our Chief Patient Officer and Interim Chief Medical Officer, will share an update on our recently announced development program before our Chief Financial Officer, Sue Hohenleitner, reviews the company's financial performance. We will then open the call to questions. With that, let me pass the call over to Mike.

Thank you, Kaitlin, and good afternoon, everyone. It's great to be with all of you here today. 2025 was an extraordinary year for the company as a team delivered on every single one of our strategic priorities. That performance establishes a strong foundation for what we will accomplish in 2026. We will continue growing as Foz and Utrella and execute on our growth initiatives. What was accomplished over these past 12 months is remarkable. We delivered on all four of our key strategic priorities, accelerating building a pipeline focused on addressing areas of unmet patient need and delivering strong financial performance. First, Ibsrella has proven to be a critical growth engine for the company and is a powerful example of our disciplined execution and our conviction in the benefit that a first-in-class medicine can offer IBSC patients. Ibsrella is now helping tens of thousands of patients, evidenced by the incredible revenue growth of 73% compared to 2024 and 61% year-over-year growth in the fourth quarter. Second, 18 months ago we made the decision to preserve access to Xfosa for all appropriate patients as we recognize at a core foundational level that staying true to our principles and doing what's best for patients will result in doing what's best for the company. Today I can tell you that our patient first strategy is working. More patients now have access to Xfosa than ever before and we're confident in our growth expectations. An additional development from just a few weeks ago was the issuance of a new patent for the commercial formulations of Ibsrella and Exposa that expires in 2042 and is now listed in the Orange Book at the FDA. This patent is an important component of our strategy to create additional, valuable intellectual property to support Ibsrella and Exposa. Our job is to maximize the value of these franchises by building a comprehensive IP portfolio, and this patent is an important step in just doing that. Third, we launched two development programs, which along with our Observer Pediatric Program exemplify how we plan to build out our portfolio, develop and commercialize innovative medicine for patients with unmet needs that align with our long-term strategy, leverage our internal core competencies that reflect thoughtful use of our financial resources to create durable, long-term shareholder values. In the fourth quarter, we announced that our Phase III programs expand the Absrella label to include chronic idiopathic constipation, or CIC. Assuming addition of this indication, Absrella would be better aligned with real-world prescribing habits, allowing us to be more comprehensive in our messaging, serve more patients, and increase the scale and the opportunity for Absrella. As well, we announced the commencement of a development program for our next generation NHE3 inhibitor, RDX10531, which we refer to as 531. Building on our foundational expertise in NHE3 inhibition, 531 presents us with the opportunity to potentially extend our reach into new therapeutic areas. Finally, coupled with this extraordinary performance is continued disciplined cash management and execution, resulting with ending 2025 in a stronger financial position than was the case at the end of 2024. We made bold, patient-centric decisions in complex market environments, we strengthened our leadership team to pursue our growth aspirations, and we positioned Ardelex for long-term growth and value creation. We are in a great position. I'm excited about where we're going and our ability to identify and capitalize on the opportunities ahead. In 2026, we will elevate our organization to even higher levels. Our priorities haven't changed, but our expectations for them have. We're delivering on our vision for what the future of Ardelix is becoming, a consequential, patient-centric enterprise built on a broad, thoughtful portfolio of best-in-class medicines. We are focused on significantly growing Ibsrella and maintaining Ibsrella's momentum. With the guidance we shared in January, Ibsrella is clearly demonstrating its blockbuster potential and is on track to deliver a billion dollars in revenue in 2029 with significant growth thereafter. Ibsrella is a powerful engine for the company. We are determined and extremely excited about our future and the many opportunities ahead. Our confidence is high and we have the leadership, the team, the strategy, and the urgency to execute and achieve these goals. With that, I'm turning the call to Eric, Laura, and Sue to walk you through specific drivers and our outlook in more detail. Eric?

Thank you, Mike. It's great to be with you all again. 2025 was an outstanding year. It was marked with incredible commercial execution and performance. We grew Obsprella by more than 70% versus the prior year, with record highs across all key performance metrics. For Exfosa, we ensured patient access continued, and we increased total dispenses year over year. Our teams drove clinical conviction among HCPs, created greater brand awareness for patients, and ensured the prescriptions that were written were filled. We thoughtfully invested across the commercial organization to improve the patient and HCP journey and accelerate access to our medicines. Those investments turned into consistent quarter-over-quarter growth for both Ipsrella and Exposa and set the stage for what will be an important growth year in 2026. Let me start with Ipsrella. We reported an incredibly strong year in 2025, generating 73% growth over 2024. In Q4, we delivered our highest net revenue and strongest demand quarter since launch. Our strategy is sound and led to record growth in 2025. Ipsrella is a first-in-class medicine with a winning and sustainable position among patients who continue to experience symptoms despite treatment with a secretagogue. And there are many patients who continue to experience symptoms and need a different option. The IBSC market is robust and continues to grow double digits with nearly 7 million prescriptions written in 2025, an increase of 11% compared to 2024. As much as 77% of patients on a secretagogue report that they continue to experience symptoms despite treatment. Our strategy, increasing depth and breadth of writing, strengthening our engagement with patients, and supporting prescription pull-through, drove notable increases in new and total riders, as well as new and refilled prescriptions. In the fourth quarter, we finished the year with a record high number of total riders and new and refilled prescriptions. We are confident we have the right levers to drive significant demand. To allow us to capture more of the IBSC market in 2026 and well into the future, we are investing in three key areas. First, the prescriber continues to be a key focus. We continually optimize our field sales team to drive greater reach and frequency with our target, high-riding healthcare providers who represent approximately 50% of the IBSC total prescription market. That optimization allows us to continue to grow the prescriber base and expand the depth of prescribing. Our in-market messaging remains focused on Ibsrella's differentiated mechanism of action and its strong clinical profile. Our message is resonating in driving HCPs to prescribe Ibsrella. We're planning to double down on the high-impact investments we made last year to improve our prescription pull-through. We're increasing the presence of our field reimbursement managers to support patient access and brought significant value to our performance last year. We will also be encouraging HCPs to send prescriptions to the Ipsrella Pharmacy Network, a limited group of specialty pharmacies that offer a patient-centered, high-touch experience who are more equipped to handle prior authorizations and the payer hurdles that restrict patient access. When prescriptions go through a specialty pharmacy, fulfillment rates are higher, and we see, on average, an additional prescription per year for patients. This is a high-value opportunity that we will continue to invest in. And third, the patient. Patients with IBSC are highly active in their health, well-being, and condition. Our research has demonstrated that when patients are introduced to Absrella, our messaging of a different option to address their IBSC symptoms resonates, and they are likely to ask their physician for Absrella. Taking that one step further, We also know that when a patient requests Ipsiroa, the majority of the time, the healthcare provider is willing to write the prescription. This year, we're increasing our opportunities to engage directly with patients. Our plans are to educate, empower, and mobilize patients to take control of their IBSC by seeking new information and talking to their doctor about the symptoms and the treatment options that are available. We continue to drive significant volume at a rapid pace by activating patients, deepening and broadening writing among target healthcare prescribers, and continually improving our prescription pull-through. We have the opportunity to further strengthen the value of Ipsrella franchise with the addition of the investigational CIC indication. This label expansion, if approved, is expected to have a meaningful impact on our business and further strengthen HCP and patient confidence in Ipsrella. Not only can it unlock the opportunity to help patients with CIC, but it would also allow us to further grow adoption among patients with IBSC. These two conditions are closely associated, and the addition of CIC would allow HCPs to consider Ibsrella more closely aligned with how they typically manage patients. These efforts, along with the lack of novel competition currently in development, present a desirable market and an opportunity that can afford Ibsrella the ability to grow volume until we are faced with a generic injury. I'm excited about the opportunities in front of us. We are united with a common purpose to help those impacted by IBSC And we are committed to act with urgency to reach our true potential. Moving on to Exposa. In 2025, we had consistent growth quarter over quarter through the year. I'm proud of our team's ability to navigate the market while also improving patient access to its highest point since launch and increasing total dispenses by 9% and paid dispenses by 41% when excluding Medicare compared to 2024. We are pleased with the performance in 2025 and confident in achieving the growth we expect in 2026. EXPOSA will continue to be a contributor for Ardelex, and our primary focus remains on supporting and ensuring access for all patients, regardless of insurance coverage. We will continue to drive clinical conviction among healthcare providers for earlier utilization while also growing the prescriber base and expanding depth of prescribing. With the majority of patients treated with binders not having fully controlled phosphorus, the high unmet need remains. We have an agile, high-performing, patient-focused team who is committed to unlocking the full potential of Exposa and bringing this important medicine to patients in need. We are focused on broadening reach by continuing to expand access, employing targeted sales initiatives, and a cross-channel strategy to increase patient engagement. I have a tremendous amount of confidence in our ability to deliver on our priorities for this year. Everyone in the organization is executing at a high level and delivering our shared goals, from our commercial team to our clinical development, medical, manufacturing, and corporate teams. 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 Laura. Laura? Thank you, Eric.

I'm really pleased to join you today. In addition to all the great work Eric shared with you in support of Ibsrella and Exposa, I'm excited to talk about the progress we've made to advance our pipeline of new medicines to help patients. While we've been conducting studies with Tanavonor and pediatric patients with IBSC as part of our post-approval commitments for Ibsrella since late 2022, our research and development teams have also been advancing two new programs which signal an important inflection point for our company as part of our corporate growth strategy. As you know, Ibsrella and Xposer were discovered and developed by scientists at Ardellix. Their initial discovery efforts were aimed at treatments for IBSC and began with evaluating potent, minimally systemically absorbed selective NHE3 inhibitors that blocked sodium absorption in the gastrointestinal tract. Inhibition of NHE3 produced an increase in intestinal luminal water content and improved intestinal transit time. These efforts culminated in the discovery of tenapenor, which was also shown to maintain intestinal barrier function and decrease visceral hypersensitivity in animal studies. The clinical effect of this NHE3 inhibition was improvement in constipation and abdominal pain, as demonstrated in our clinical trials in patients with IBSC, and that led to the approval of Ibsrelin. Notably, it was also through these early studies with tenafenor that we uncovered the primary pathway for phosphorus absorption, the paracellular pathway, and tenafinor's ability to block phosphorus absorption via that pathway eventually led to the approval of Exosim. And our recent pipeline programs resulted from our knowledge and expertise around NHE3 inhibition with tenafinor. First, let's start with the planned CIC-labeled expansion. As Eric mentioned, the addition of a CIC indication would better align Adrella with the standard treatment patterns that physicians use when diagnosing and treating patients with CIC and IBSC, which represent a continuum of functional gut disorders whereby patients present with overlapping symptoms of constipation and abdominal pain with a primary issue of having infrequent and difficult bowel movement. The main distinction between the two conditions is that in addition to constipation, IBSC is also characterized by abdominal pain, often accompanied by other abdominal symptoms like bloating, cramping, and discomfort. However, the reality for many patients is that they often alternate between the two conditions and therefore might be diagnosed with either one over time. The need for treatment with different mechanisms of action has proven essential for the management of IBSC, and we believe this holds true for CIC as well. We are confident in Tanapanor's ability to manage patients with CIC, and we have designed a robust clinical trial to support this hypothesis. Why are we confident? First, in our clinical development program for IBSC, the TMPO studies, we demonstrated Tanapanor's ability to safely and effectively treat adults with IBSC, which is typically considered the more challenging condition. In a post-hoc analysis of that tempo data, looking at just the constipation component, tenapenor showed a significantly better durable complete spontaneous bowel movement or CSBM responder rate compared to placebo. And finally, we've had very productive discussions with the FDA and are encouraged that the strong safety package from our IBS clinical studies, when combined with the to support a supplemental new drug application, or SNDA. Last month, we enrolled, randomized, and dosed our first patient in a cell, the Phase III clinical trial that evaluates the safety and efficacy of tenapenor in adults with CIC. A cell is a randomized, double-blind, placebo-controlled clinical trial with a planned enrollment of approximately 700 patients across 110 sites in the U.S., of which more than half are already up and running. Patients will be randomized into one of four treatment groups, which include three different tenapenor doses and the placebo group, with each active dose group randomized in a 3-in-1 manner versus placebo. The study is comprised of a two-week screening period, a 26-week randomized treatment period, and a four-week follow-up safety period. Our primary endpoint is measured at week 12 and will be the proportion of patients who achieve a durable CSBM response defined as an increase from baseline of at least one in average weekly CSBM frequency and at least three CSBMs, both occurring during the same week. Additional information about a cell, including key secondary endpoints and evaluation of safety, can be found on clinicaltrials.gov. We have a thoughtful, comprehensive recruitment plan and expect to have the study fully enrolled by the end of this year. That timeline allows us to complete data analysis and report top-line results in the second half of next year, with subsequent SMDA filing shortly thereafter. This is a well-designed clinical trial with a strategic regulatory path that will hopefully allow us to ultimately bring this therapeutic option to patients. Now moving on to our next generation NHG3 inhibitor, 531. As leaders and entrepreneurs in this space, we're excited about NHG3 inhibition, and I'd like to first provide some scientific background. Sodium hydrogen exchangers, or NAGs, are transport proteins called antiporters that reside on the membrane of cells, and there are nine distinct isoforms or subgroups. Their fundamental role is to maintain normal sodium, water, and pH balance in our cells. NHE3 is an antiporter that is found in the gut, primarily the small and large intestine, as well as the kidney. It transports sodium into the cell and hydrogen out of the cell, thereby regulating sodium absorption, maintaining body salt and fluid balance, and blood pressure homeostasis. In preclinical studies, 5-3-1 was approximately 10 times more potent and 30 times more soluble than tenafenor. Those improvements alone not only support the potential for once daily dosing, but may also provide more opportunities across different therapeutic areas. So where does that take us? Right now, we're focused on finalizing our preclinical studies to support an IND submission in the second half of this year, with plans for a phase one first in human safety trial to begin shortly thereafter. Additionally, we will continue to conduct preclinical research to further inform strategies for our clinical development programs, and we will continue to follow where the science and data lead. I am very excited about the potential for Tanapinor as a treatment option for adult patients with CIC and the opportunities that 531 may offer across several therapeutic areas. These clinical development activities not only bolster the growth of our company, but equally, and perhaps more importantly, they continue to expand our efforts to make a positive impact in the lives of patients, families, and caregivers, and the healthcare providers who help manage their care. I look forward to sharing additional updates in the months ahead. With that, I will now pass it to Sue.

Thank you, Laura. Four months ago, I joined Ardelix as it was clear to me that I had a unique and incredible opportunity to become part of building a great company, helping patients, and creating real value for shareholders. On one of my first days at Ardelix, I heard Dr. Lara deliver a powerful message that resonated deeply with me. The patients are waiting. To me, that phrase reflects urgency, purpose, and accountability. When we deliver with excellence for patients, shareholder value creation follows. Since October, my conviction has only gotten stronger that we're at a turning point for our company's future. We are turning our commercial momentum into a multi-billion dollar opportunity a once sparse pipeline into a robust development portfolio, and a strong organization into an extraordinary one by elevating our game and building the capabilities required to compete and win. Furthermore, we're turning a disciplined capital allocation into a clear strategic advantage and investing with purpose. This is more than progress. We are turning a critical corner as we drive towards profitability and meaningful cash flow generation, allowing us to strengthen our balance sheet fund our ambitions, and build long-term shareholder value. Now let me walk you through the financials. For 2025 results, I'll be focusing my commentary on the full-year performance. However, you can see the fourth quarter results on the slide and in the press release we issued earlier this afternoon. We had significant year-over-year total revenue growth of 22% with full-year 2025 revenues of $407.3 million compared to $333.6 million in 2024. That growth was driven by a significant increase in its RELA demand, which grew revenues to $274.2 million, an increase of 73% compared to the full year of 2024, and finishing 2025 at the upper end of our most recent guidance range. As Eric outlined, that growth was driven by increases in total prescription volume. We also recorded $103.6 million of exposure revenue in 2025 compared to $160.9 million in 2024, a decrease of 36%. As you know, as of January 1st, 2025, we no longer receive Part C reimbursement for Medicare patients who represent roughly 60% of the total exposed patient base. However, our focus on protecting patient access, driving clinical conviction, and supporting prescription pull-through drove year-over-year growth in total dispenses by 9%, and we grew paid dispenses by 41% when excluding Medicare. We are tremendously proud of the efforts made this year to advance our objective that every patient prescribed EXPOSA received EXPOSA regardless of their coverage. Now turning to expenses. Research and development expenses for 2025 were $71.5 million compared to $52.3 million in the prior year. This increase reflects development activities for our ongoing pediatric trials, as well as the Excel trial for CIC, preclinical research activities for the 531 program, and increased medical engagement with the scientific community. Excelling general and administrative expenses were $337.2 million for the full year 2025, compared to $258.7 million in 2024. The increase was primarily related to continued investments to drive demand and adoption of this umbrella. Our net loss for the full year 2025 was $61.6 million, or 26 cents per share, compared to a net loss of $39.1 million, or 17 cents per share, for the full year of 2024. The net loss for 2025 includes $49 million for non-cash expenses from share-based compensation compared to $37.4 million in 2024. We finished 2025 in a strong cash position with $264.7 million in total cash, cash equivalents, and short-term investments, an increase from $250.1 million at the end of 2024. We now have had two consecutive quarters that we generated positive cash flow due to growing revenue. Now turning to guidance for 2026. First, looking at our revenue projections for Ibsrella, we continue to anticipate 2026 revenues for Ibsrella to be between $410 and $430 million. That represents at least 50% year-over-year growth at the low end of the guidance range. Similar to 2025, we expect growth to be driven by quarter-over-quarter increases in demand along with improved prescription pull-through. As for the phasing of revenue, we expect the overall market dynamics in 2026 to be similar to those we saw last year. As we've shared in the past, the IBSC market historically contracts in the first quarter due to copay recess, insurance changes, and prior authorization renewals, among other factors. We expect those factors to similarly impact Q1 of 2026, in addition to the recent winter storm burn that affected a large portion of the country. As in prior years, we expect the market to rebound in the second quarter. Using 2025 as a proxy, we recorded approximately 16% of the full year of Zarella revenues in the first quarter, and we anticipate that 2026 will likely follow a similar pattern. 2026 growth will be supported by thoughtful investments that will also fuel continued growth to a billion dollars in 2029, representing a CAGR of 38%. We expect growth to be driven thereafter by continued adoption of Ibsrella among IBSC patients as well as growth from patients with CIC assuming approval and market launch of Panathenor for CIC. And to build on Mike's comments earlier regarding the new formulation patent, we recognize that there's an opportunity to see Ibsrella growth continue even beyond 2033 when our composition of matter patent expires. Ibsrella will have the same winnable position and we anticipate volume growth to continue until we face generic competition. Now turning to Exposa. We expect revenues to be between $110 and $120 million in 2026. We're focusing on driving depth and breadth of Exposa prescribing and investing at an appropriate level to ensure that Exposa remains a financial contributor for Ardelix. We expect that Exposa will experience similar market dynamics in the first quarter as Absrella. We are reaffirming our expectations of $750 million before the expiration of the EXPOSA method of use patent in 2034. And as is the case with IBSRELA, EXPOSA growth is expected to continue until we face generic competition. Just a note on our growth to net deduction rates. We expect our future GTMs for IBSRELA and EXPOSA to be similar to the results we saw in 2025, which were in line with our expectations. Two of our key priorities for 2026 are to deliver commercial growth and to advance our pipeline, which requires high-impact investments in R&D and SG&A. With that said, we expect overall 2026 operating expenses, inclusive of R&D and SG&A, to increase by approximately 25% for a total OPEX of up to $520 million. We are continuing to fuel the pipeline, and with that comes increased investments in R&D reflecting both the Excel Phase 3 trial for tenapenor and planning for a Phase 1 trial for 531, along with other expenses to support our engagement with the scientific community. We also expect SG&A to grow to support a disciplined investment approach to drive Ibsrella growth through commercial execution, improved prescription pull-through, and patient engagement. These high ROI investments reflect areas of growth in 2026 and will generate momentum to deliver on our longer-term Ibsrella guidance expectations as well as our planned pipeline expansion. Our strong cash position of $265 million, supported by the significant revenue growth we expect, is sufficient to cover all of our planned operating expenses and allow us to reach consistent, positive cash flow with our current operations. We remain focused on thoughtful capital allocation throughout this year as we prioritize growing the top line and further advancing our pipeline. Before I turn the call back to Mike, I want to say how proud I am to be here representing Ardelix for my first earnings call as our CFO. I am both excited and optimistic about the future and the tremendous value we will create as a team for patients and for you, our shareholders. With that, I'll hand it back to Mike.

Thank you, Sue, and I'm thrilled to welcome you to these calls. Your perspective further strengthens our confidence as we communicate the clear growth trajectory that we're on. As you heard from Eric, Laura, and Sue, our priorities are focused and execution-driven. Significantly grows RELA, maintain exposed momentum, further advance our pipeline, and continue delivering strong financial results. We are moving with urgency and discipline against these priorities, and we look forward to demonstrating continued progress as the year unfolds. With that, we'll open the call to questions. Operator?

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad now. You'll 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 1 on your phone now. And our first question will come from Dennis with Jefferies and Company.

Hi, this is Anthea. I'm for Dennis. Thank you for taking our questions. Could you talk about your level of confidence on the underlying volume growth for Xerola to get to your 410, 430 million Xerola guidance? What's really driving that outside of Big Tam and how much of that guidance assumes improvements on the pull-through and the shift to specialty pharmacies. Thank you.

Yeah, first let me address it from a top line. We wouldn't give you the guidance. We didn't have great confidence in reaching that number. You know, as we've talked over the years, Anthea, and with Dennis, is you look at the size of this market and the number of patients that are needing a new alternative versus what they have with secretagogues, there's a vast patient population out there to tap to access this. So our confidence is significant and hasn't wavered, honestly. Eric, if you can address some of that too.

Yeah, thanks very much for the question. As Mike said, we've got tremendous confidence in the guidance that we've given for 2026. In order to drive volume, we're continuing to optimize our sales force. Last year, the team did an excellent job in execution, was able to drive the 73% growth, and we'll continue to optimize that so they can drive top of the funnel. As Mike said, 77% of the patients out there on a Segritagog are currently continuing to experience symptoms, so we know that the market's there. As it relates to pull-through, we are going to double our field reimbursement manager team. We know that they provided significant value to us last year and relates to increase in approvals and resubmission rates, so we know that we can continue to improve there, and we've got a team that's going to expand and be focused there. With regards to the Absarola Pharmacy Network, we're really excited about this opportunity. It's actually something that we started to work on towards the end of last year, and we know that these patients, they need high touch and a more patient-centric option than going to a retail pharmacy. So, what we put in place is the opportunity for them to get the care that they need, to work closely with them and the physicians to make sure that we get a higher rate of fulfillment. So, when you think about all those three things together, we feel really good about 2026 and what we're going to be able to deliver.

Great. Thank you.

Thanks, Cynthia.

And our next question will come from Allison with Piper Sandler.

Hey. Good afternoon and thanks for taking the question. First, just for Sue, following up on some of the prepared remarks on expenses, could you provide any more color on the cadence of the RV and SG&A step-ups for 26? And just with those increases, how should we be thinking about the path toward sustained cash flow positivity? And then just on... You know, the $410 million to $430 million guidance for this year going to $1 billion for Absarilla in 29 days. Do you feel your existing commercial infrastructure is sufficient for hitting that longer-term guidance, or just how should we be thinking about incremental investments on that front? Thank you.

Yeah, thank you, Allison. I'll start out with your questions around OPEX. So, yeah, we are going to be increasing our OPEX about 25% year over year based on the guidance where our Top line is going to grow more than 38%. So, you know, good news is we are growing the OPEX, but not necessarily as much as we are growing the top line momentum. In terms of what we're doing, these investments that we're making, this is really all about growth. Growth not only in the commercial business, but also within the R&D pipeline that Laura talked all about. A lot of the sales and marketing that we're going to be investing in, these are not relatively new programs. These are things that are proven, high ROI programs that are really going to drive that growth. We are going to be and continue to be significantly disciplined and, you know, in all that we do. And the other thing I would like to note, too, is as the year has already started, we have already begun these investments. So the clip that we're on is a pretty good clip to get to do that. In terms of cash flow positivity, we have been cash flow positive. We're very proud of that the last two quarters. And we'll continue to do what we can to drive that. We're not really guiding to positivity at the moment, but stay tuned.

I guess the other thing I would note is, and I'll have Eric comment on it, as you've seen throughout, you know, when we started the Ibsrella program three years ago, we started with 30 people. We expanded to 124. We now see the benefits of the fans and the field-based folks out there. So understand that we always look at how to optimize and invest, and that's something we will continue to do as this program continues to expand. And certainly you can imagine the future with CIC, that there's other opportunities to continue to expand in this organization. Eric?

Yeah, I would say in terms of really maximizing the return from the investment, we're recognizing that we do have an opportunity to improve on reaching frequency. So you may have seen we posted some positions online for the ABD role where we're going to be going up around 15 to 20 roles. As I mentioned, we will be doubling the size of the field reimbursement team. And I feel pretty confident over that over the next couple of years. We are starting those investments now so we can maximize the return that we're going to be able to get in 2026 as well as into 2027. And so I don't anticipate too much changing there. But, of course, we are always looking at the market and our performance and see ways that we can be better for patients. The other thing that I would just call out from a marketing standpoint, the team is really done a nice job of digital marketing and making sure that we're engaging with physicians, reaching that population that's out there. And so this year, you will see a concerted effort and focus on the patient. As Mike mentioned, we know that it's a sizable patient population out there, and we have an opportunity to reach out, engage with them, We know when they are aware of Ipsrella, they go into the office and the physician will write that prescription. So, we want to make sure that we're pulling through, not just on the sales side, but also on the marketing side, and the team has already started that. And the investments that we're making in Q1, you'll see those will be fairly consistent throughout this year.

Thank you.

We'll move next to Chris with Raymond James.

Hey, this is Sam on for Chris. Thanks for taking our questions. Just one on the CIC trial. Can you talk more about the two lower doses you're testing? If I recall correctly, these dose levels weren't quite as efficacious in IVSC. So what are your expectations for how these dose levels will perform in this trial? And is having multiple dose options part of your strategy in CIC, or are you trying to find just one optimal dose? Thanks.

Yeah, I think at the end of the day, we want to obviously make sure that, you know, as we evaluate safety and efficacy, that we are able to actually look at a dose that we don't expect, you know, to provide as much. You typically want to look at the least effective dose, and so that is the lowest dose. We don't expect a lot from that, but I think, as I said earlier, CIC seems to be the less difficult condition to treat, and so it makes sense for that middle dose of 25 milligrams BID, and then the 50 milligram dose is obviously the dose that we used and the data that we used you know, in our tempo trial to actually, you know, provide us some probability of success for this trial. So it's a nice way to look at, you know, dose response in a single phase three, you know, well-designed, robust study.

And I'll just highlight that, too, is we're going to follow the data, right? And what these three different doses tell us will tell us what we move forward with.

Thank you. Thank you.

And next, we'll hear from Matthew with HC Winwright.

Hi, guys. Great to see the successful quarter, and thanks for taking our question. So, with Absrella offering its differentiated NHE3 inhibitor profile, what do you see being the greatest distinctions in the future for the CIC market when we think about the other GCC agonists or serotonin receptor agonist mechanisms, for instance? Really just any color on the unmet need and the differentiation there. Thanks.

Well, thanks for the question. It's a great question. I think at the end of the day, what we talked about before was the fluidity, right, between these two conditions, IBSC and CIC. And so, you know, just as we've seen with IBSC, the need for a different mechanism of action, right, Because a number of patients, you know, on other drugs are still symptomatic. And so that is important also with CIC. And I think that really speaks to, you know, the potential utility of tenapenor in that patient population.

And, you know, you look at the evolution of how CIC, functional constipation, IBSC are characterized by the Rome Foundation, it is continuing to evolve over time. And, you know, notably is the CIC population certainly larger, but many of those patients early on are well treated by over-the-counter medications. And if you look at the prescriptions that we talk about where there isn't a differentiation between in IQV or other data in terms of what is for IVSC or CIC, you're seeing a mix between the two. So that's why the continuum that Eric mentioned of how we can speak to Ibsrella and NHG3 inhibition as a different choice versus all the secretogogs, which is basically it. And the serotonin is a motility. we draw a completely different mechanism and impact on the patient. So, this seems for us, and I think as we hear from the work that we're doing, that it is right for this to be going into CIC because there is such a continuum between CIC and IVFC.

Very helpful. Thank you, guys. Sure.

Next, we'll hear from Rowana with Lear Inc.

Great. Hi, everyone. So I was curious for CIC, what will prescribers focus on most in terms of the primary and secondary endpoints in the Phase III study? And is there an efficacy bar that you're thinking about for defining a highly successful trial in CIC?

One comment, and I'll probably go too far with it, but I'll ask Eric then to comment what it's like in the field. What's interesting is when you talk to gastroenterologists about this, They know how to make people have bowel movement, right? They know that they can do that. And if they're going to have a hard time succeeding with the different over-the-counter and other things that they do, they move to pharmacologic intervention. And so those patients that are not getting relief as a primary endpoint of CSPNs are ultimately in a durable response that Laura described in the endpoints. That's what you want to see in a patient that's having these challenges with bowel movements. And, you know, that's what you look for. Secondary endpoints, I'm sure there's quality of life benefits, but at the end of the day, someone with chronic idiopathic constipation, you want them to be able to have a bowel movement.

Yeah, I would just add, you know, these patients are chronically constipated, as Mike said, and it has a significant impact on their life. So first and foremost, from a primary endpoint, we want to make sure that it can work in constipation and have a lot of confidence there. From a secondary endpoint, as Mike mentioned, quality of life, patient-reported outcomes, Those are areas that we're going to focus on to be able to show that we can treat not just the CIC, but the patient as a whole and feel really good about being able to do that. And lastly, as Laura mentioned, with the differentiating mechanism of action, these are multifactorial conditions and patients need options. And so, we want to be that option for them just like we are with IBSC. We've got a good position there and feel like we'd be able to create a similar market and opportunity for CIC.

Got it. Super helpful. Thanks.

Thanks, man.

And next we'll hear from Yigal with Citigroup.

Hi, this is Joel and Kim on for Yigal. Congrats on the progress and thanks for taking our question. Maybe just a quick one from us. Any additional color you can provide on additional patents or other layers of protection you're thinking about building up in the future?

Yeah, I mean, I think, as I said in my opening comments, our job in this business is to continue to strengthen our intellectual property position for products like Expose in Israel, and that's what we're continuing to do. I think this patent on the formulation is really important, the fact that it's listed in the Orange Book, exactly what you would want to see. And needless to say, I think, you know, without any specifics of what we're going to file or have filed, there are other things that we are working on to further strengthen that position.

Got it. Thank you. And maybe just one more if I could. How are you thinking about long-term exposure growth post-2026 given potential adjustments in Medicare base rates for phosphate binders? Any additional call you can find on that?

Well, to remind you, Medicare base rate and phosphate binders, we do not benefit from that. We made the decision, as I noted in my opening comments, that 18 months ago we made a determination not to participate in that. So our business is focused on, in terms of the revenue generating businesses, Medicaid and Medicare, Medicaid and commercial, excuse me, and the Medicare segment is what Sue referenced to as well, is to make sure that any patient that is appropriate and needs exposure per our label has access to it. And that's what we're extremely proud of, where you saw both the non-Medicare segment of 41% growth during that first year of the TAPA period and an overall growth of dispenses of 9% in the face of all that's going on. So we're extraordinarily proud of that and certainly longer answer than I think your question. But, you know, the base rate increase is not relevant to this business.

Got it. Thank you very much. Thank you.

And our next question comes from Laura with Wedbush Securities.

Hey, good afternoon. Thanks for taking the question. This is Thomas for Laura Chico. So perhaps one question for Ipsrella. So historically, you've positioned Ipsrella for later lines of treatment for IBSC, but as you're now projecting over $400 million in revenue, for this year. Just wonder if there might be more leverage to reengage with payers in re-exploring how frontline use can fit into the picture. And to that end, wonder if frontline utilization, how much, if at all, factors into your 2029 revenue target.

Sure. No, thanks for the question, Tom. And it's interesting. We've talked about this before is, you know, it's 50,000 new patients coming on to IBSC-indicated therapies a month. There is over 7 million prescriptions written last year for IBSC therapies. We need a small fraction of that in order to get to our aspirational numbers. So we're extremely confident in the market opportunity there that's for our indication without having to go to frontline. Notably, however, Our clinical work, our package insert is a first line therapeutic. The payer dynamics which continue to be befuddling to me in this industry and the challenges to get good medicines to patients are the challenge that we all face. I think the work that Eric and our market access team and the leadership that we have there is having us be very thoughtful about how we ensure appropriate market access and lessening as many hurdles as possible. Going after frontline is not an objective that we have and is not factored into the numbers. Although, as we've noted in other calls, there is some organic growth in first-line use because I think people have conviction the benefit of this product is providing their patients. Anything to add, Eric?

Yeah, you know, I would say last year one of our priorities in the commercial side was building out our payer and market access team. We've done a nice job of bringing in the right team. These individuals are engaged with payers and, you know, they continue to, you know, put hurdles in place. And we are working with them to make sure that patients can have access to our product. So we don't aspire to have first line therapy at this point in time. You mentioned kind of later line utilization. And I would say when we look at our internal market research, it's typically around second and third line. So our goal is to be the first branded product post the brand. or generic utilization. And so, that's the team, what they're messaging out there. And, you know, based on the tremendous amount of success that we saw last year in 2025, we continue to feel that that's the right position. But yes, we continue to work with all of the stakeholders that are out there to make sure the patients have access to our products.

And again, we'll continue to invest in those areas and feel good about the direction that we're headed.

Understood. Thank you, again, for the kind of questions.

Thank you. And we'll move next to Julian with BTIG.

Hi. Thank you for taking the questions and congrats on the progress. First, can you talk about how the recently issued 299 patent contributes to your overall IP strategy for Tenapenor? I'm wondering if the patent covers unexpected effects or any other features that you believe help strengthen the patent? And then I thought I heard in prepared remarks that CIC labeling could potentially bolster your ongoing efforts in IVSC. Just wondering if you could expand on that some more. What dynamics would you expect to be at play there?

Sure. Just a brief comment on the intellectual property. This is a formulation patent, very clear and straightforward. It's now orange book listed. It goes out to 2042. And that's the important thing to focus on is building that sort of bulwark of support as we continue to build this business. So feel good about it and ultimately other IP that we will pursue. But this is a strong formulation patent for the commercial formulation of the two products.

Yeah, and I'll take the second part of that question as it relates to CIC and IBSC. So as Laura mentioned, I mean, these two conditions are closely related, and we know that physicians use the Secretogox in both indications. And so, you know, as we gain experience and if approved, an indication in CIC, we know that it will improve physician confidence across both CIC and IBSC, that we feel like we can be the product of choice for those physicians. When we did our research, not only did we see improvement in the CIC, but we also saw increased confidence in the IBSC side, and that's what continues to feed into our optimism as we think about really the true value that Ipsrella can provide for those patients out there with CIC and IBSC.

And we'll move to our next question from Aiden with Leidenberg.

Hello. Good afternoon. Congrats. It's a great quarter, and I appreciate you taking our questions. I've got a couple. So first, throughout the question, so you guide now 2029 billion plus. So you consistently got a billion dollars, but we previously assumed, I think, that would occur in 2033. Do you have any comments, any forecasts, any sort of self-guidance as it comes to 2033? What should we expect for that year? And when do you think that peak year actually may happen for Ypsilanti? And the second question I'll ask is about the CIC trial. So those, as you've mentioned, those have always been interrelated indications. So you decided to start the trial. Just curious to understand how these things changed over the past several years. So was it previously you didn't start the trial because of financial constraints or what are other potential reasons that sort of, you know, stimulated you?

Sure. I mean, I'll answer the second part first, but then actually ask Laura to address it as well. I'm cheap and wanted to make sure that we had enough capital to do the work we need to do. Honestly, that's the very simple calculus that got us to where we are today. The fact that we ended last year with more cash than we did the year before gave me the confidence that we can do this and invest appropriately into the pipeline And then for your first question, you know, the fact that we gave you the numbers billion and 29, you know, I would argue that our internal projections might have been close to that and we were not yet, we decided to not yet provide that. We will continue to grow thereafter. When Zest continues to grow, has not peaked. So this business, this patient population where there's a huge, huge need, continue to come for therapy, and the more innovation that comes, the more patients that are going to evolve. So what PEAK ultimately looks like, we're all going to get there together, and starting where we are now with a kind of growth of 73%, over 24, and a 38% CAGR to get to a billion, the math's pretty straightforward. So I would urge you to take a look at that and the kind of growth that you've seen in the IBSC marketplace where we see the kind of growth with only one mechanism in GCC Agnes before us should give you some perspective as to what the market through LOE would look like before this generic entrant.

All right. Thanks so much. Appreciate the comments and congrats with the quarter and appreciate the guidance for 26. Thanks, Aidan.

And we'll move next to Peyton with TD Cowen.

Hi, guys. This is Peyton. I'm for Joe. Thanks for taking our questions. I guess just a quick one for me. Could you talk about how the CIC trial is powered and then what proportion of patients need to be CVSM responders that you're targeting? Thank you.

Yeah, so the powering, it's a pretty robust sort of sample size calculation. We powered it at 95%, so we feel really comfortable there. And when you couple that with the data that we saw in our tempo studies, it gives us a lot of confidence in terms of the probability of both technical and regulatory success. So as I said before, the sample size is about 700 patients, and obviously that reflects the four, you know, sort of treatment arms, right, three active doses and placebo. And again, that's about 173 patients per arm.

And the proportion of patients that need to be CDC responders per arm?

Yeah, our initial, you know, when we looked at the data in terms of our tempo studies, we saw about at least a 20% difference between placebo and active entenapenor. And so our sample size calculations are such that we're looking really about around the same sort of difference, 18 to 20% difference, you know, between placebo and active drug. And that is for the 25-milligram and 50-milligram dose.

Great. Thanks for taking our questions.

And our next question comes from Jennifer with Cantor Fitzgerald.

Hi. This is Jennifer Gia on behalf of Picard Agril from Cantor. Thanks for taking my questions. I wanted to ask about Ipsrella. Can you talk about the IBSC market where you're finding the greatest opportunity and what is driving the market growth of double digit and how long do you think it's sustainable? And on Exposa, you shared that the peak opportunity being at $750 million. Can you talk about how you get to that number based on the current trend?

Thank you. Sure.

With the Ibsrella market, I'm sorry if you could repeat the question. I didn't hear you clearly.

Oh, so with the Ibsrella drug on IBSC, I wanted to understand where's the greatest opportunity and what is driving the market growth of double digits and how sustainable do you think it's going to be?

I think in the previous question that I answered, with 50,000 patients coming in every month from the GCC agonist already, and 7 million patients already on therapy, there's a very small percentage of that that ultimately we need to get to a billion dollars. So confidence in there is high, particularly given our clinical differentiation. And with the exposed, it's very much the same kind of dynamic, right? I mean, if you look at the Medicare population that we lost, so the original numbers that I've gone through this before is 550,000 patients on dialysis, 60% of those are Medicare. You lose those, that's 330,000, 220,000 patients that are Medicaid and Medicare. Those are the revenue-generating patients for us. It's less than 100,000 patients, closer to 50,000 that you require in order to get to the guidance that we gave.

Thank you. Thank you.

And this concludes our question and answer session. I'd like to turn the conference back to our host for any additional or closing remarks.

Thank you, Operator. To our investors, our employees, and really especially our patients, thank you for your continued engagement and support. We're encouraged by the progress we've made and excited about the opportunities ahead. We remain focused on disciplined execution and long-term value creation, and we appreciate your continued confidence as we move forward. With that, we can now end the call. Thank you operator.