NEW YORK, NY / ACCESSWIRE / September 13, 2024 / Pomerantz LLP announces that a class action lawsuit has been filed against Ardelyx, Inc. ("Ardelyx" or the "Company") (NASDAQ:ARDX) and certain officers. The class action, filed in the United States District Court for the District of Massachusetts, and docketed under 24-cv-12119, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Ardelyx securities between October 31, 2023 and July 1, 2024, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officers.
If you are a shareholder who purchased or otherwise acquired Ardelyx securities during the Class Period, you have until October 15, 2024 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Danielle Peyton at [email protected] or 646-581-9980 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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Ardelyx is a biotechnology company focused on developing and commercializing therapies for, among other things, patients with chronic kidney disease ("CKD"). According to Ardelyx, 550,000 people in the United States suffer from end stage renal disease ("ESRD"), which is the final stage of CKD characterized by a progressive loss of kidney function.
Patients suffering from ESRD must undergo regular dialysis treatment-typically 3 times a week for 3-5 hours-in order to survive due to the critically important role the kidneys play in filtering waste from the bloodstream.
Over the last decade, Ardelyx has developed a novel active ingredient called tenapanor. On October 17, 2023, Ardelyx announced that tenapanor branded as XPHOZAH® was approved by the U.S. Food and Drug Administration to reduce elevated levels of phosphorus in the bloodstream in CKD patients on dialysis who either cannot tolerate or did not adequately respond to other therapies.
XPHOZAH is a single tablet taken twice daily that blocks phosphate absorption (i.e., it is a phosphorus inhibitor). It can only be taken orally because its mechanism of action involves blocking uptake of phosphorus in the gastrointestinal tract. As such, there is no injectable version of XPHOZAH. This mechanism is relevant to how XPHOZAH is covered by Medicare.
In 2008, Congress passed the Medicare Improvements for Patients and Providers Act ("MIPPA"), which, among other things, directed and authorized the Centers for Medicare and Medicaid Services ("CMS") (an agency within the U.S. Department of Health and Human Services) to create a bundled payment system for "renal dialysis services" known as the ESRD Prospective Payment System ("ESRD PPS bundle") under which a single bundled payment is made under Medicare Part B to dialysis facilities to reimburse them for dialysis services, and dialysis-related drugs, laboratory tests, and other products and services that were previously billed separately.
When Congress created the ESRD PPS bundle payment system for "renal dialysis services," it limited the reach of the bundled payment to injectable drugs or biologicals, or their oral equivalent. In 2009, however, CMS proposed to include oral-only drugs with no injectable equivalent in the ESRD PPS bundle.
In 2012, Congress delayed the inclusion of oral-only drugs in the ESRD PPS bundle until January 1, 2016. Then in 2014, Congress further delayed such inclusion until January 1, 2025 ("Jan 2025 Deadline"). There is presently legislation pending-The Kidney PATIENT Act (H.R. 5074)-to further delay the inclusion until 2033.
In 2016, CMS introduced the ESRD PPS Transitional Drug Add-on Payment Adjustment ("TDAPA") program to pay for new ESRD-related therapies not yet in the ESRD-PPS bundle. TDAPA provides for an additional payment for two years for new ESRD-related therapies on top of the single bundled payment to enable CMS to gather sufficient claims data to incorporate the new therapy into the bundle and adjust the base payment rate. In 2024, CMS introduced a reduced add-on payment for an additional three years beyond the initial two years for therapies admitted into the TDAPA program.
Manufacturers must apply to include their therapies in TDAPA. See https://www.cms.gov/files/document/tdapa-application-requirements-updated-07112022.pdf.
With the Jan 2025 Deadline approaching, CMS began to take action to place oral-only drugs into the ESRP PPS bundle. On April 29, 2024, CMS issued guidance concerning inclusion of oral-only drugs in the ESRD PPS bundle effective January 1, 2025. Then on June 27, 2024, CMS released the proposed Calendar Year 2025 ESRD PPS rule in which it confirmed its intention to bring XPHOZAH and other oral-only ESRD-related drugs into the ESRD PPS bundle beginning January 1, 2025, and to cease separate payment for XPHOZAH and other such drugs under Medicare Part D on such date.
Shifting reimbursement for XPHOZAH into the ESRD PPS bundle-without applying to include XPHOZAH in TDAPA-will have a materially adverse effect on sales of XPHOZAH because if dialysis facilities are forced to pay for an oral-only drug like XPHOZAH using the single bundled payment that they receive from CMS, they will have less wherewithal and incentive to facilitate patients' access to XPHOZAH, and sales of XPHOZAH will suffer.
The Complaint alleges that, in its Forms 10-Q filed on October 31, 2023, and May 2, 2024, and in its Form 10-K filed on February 22, 2024, Ardelyx indicated that it would apply to include XPHOZAH in TDAPA. Further, on an earnings call on May 2, 2024, Defendant Michael Raab advised analysts that "our intent is to enter TDAPA." But then on July 2, 2024, Ardelyx shocked investors by disclosing that it had decided not to apply to include XPHOZAH in TDAPA.
Upon the above news, Ardelyx's stock price fell $2.29 per share, or 30.25%, to close at $5.28 per share on July 2, 2024.
Subsequently, on July 17, 2024, in partnership with the American Association of Kidney Patients and the National Minority Quality Forum, Ardelyx filed a lawsuit in the U.S. District Court for the District of Columbia against CMS claiming, among other things, that CMS's plan to move XPHOZAH, along with all oral-only drugs, into the ESRD PPS bundle is inconsistent with MIPPA's statutory provision, and contradicts CMS's own regulations.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
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SOURCE: Pomerantz LLP