Ardelyx Inc. (NASDAQ: ARDX) shares dropped sharply on Friday after the firm announced that the U.S. Food and Drug Administration (FDA) has approved its treatment of irritable bowel syndrome with constipation (IBS-C) in adults. While this approval is positive, this appears to be a case of “sell the news.”

Specifically, the FDA approved Ardelyx’s Ibsrela (tenapanor), which is a minimally absorbed small molecule that acts locally in the gastrointestinal tract to inhibit the sodium-hydrogen exchanger NHE3, resulting in an increase in bowel movements and a decrease in abdominal pain for IBS-C patients.

The approval was supported by two Phase 3 trials demonstrating a statistically significant reduction in constipation and abdominal pain in adult patients with IBS-C.

The primary endpoint for both trials was the proportion of patients who were responders during the 12-week treatment period. A responder, as defined by the FDA, was a patient who experienced at least a 30% reduction in the weekly average abdominal pain score compared with baseline and an increase of at least one complete spontaneous bowel movement in weekly average from baseline, in the same week, for at least six of the first 12 treatment weeks.

Mike Raab, president and CEO of Ardelyx, commented:

Ibsrela has the potential to provide IBS-C patients and their doctors with a novel mechanism and an innovative approach to managing IBS-C, a highly burdensome and difficult-to-treat condition affecting more than 11 million people in the United States. This approval is an extremely important and rewarding milestone for Ardelyx, and represents the culmination of years of dedication to advancing our discoveries and medicines in an effective and rigorous manner. We look forward to establishing a commercial collaboration with a partner that has the capabilities to drive the successful launch and marketing of IBSRELA in this large and underserved IBS-C patient population.

Shares of Ardelyx traded down more than 9% early Thursday to $5.68. The 52-week range is $1.60 to $6.78, and the consensus price target is $11.60.

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