Here's a classic market puzzle: a biotech company reports that its main drug is growing like crazy, it beats revenue expectations, and it gives optimistic guidance for the next year. And then its stock goes down. That's what happened to Ardelyx Inc. (ARDX) on Friday, with shares dropping in premarket trading after the company's latest financial update.
The numbers themselves looked pretty good. For the fourth quarter of 2025, Ardelyx reported sales of $125.22 million, which was above what analysts were expecting. On the earnings side, it was essentially a wash—breakeven versus a consensus estimate of a one-cent profit. So, a revenue beat, but no positive earnings surprise to get excited about.
The real story, though, is the company's lead drug, IBSRELA. This is the engine driving the bus. For the full year 2025, IBSRELA revenue hit $274.2 million, which is a 73% jump from the year before. In the fourth quarter alone, it brought in $86.6 million, up 61% year-over-year. That's the kind of growth investors usually love.
And Ardelyx isn't tapping the brakes. The company expects IBSRELA revenue in 2026 to land between $410 million and $430 million. That represents at least 50% growth compared to 2025. They're betting on doctors prescribing it more often and to more patients, particularly those with irritable bowel syndrome with constipation (IBS-C). The long-term goal is even more ambitious: hitting $1 billion in annual revenue by 2029.
The company's other commercial drug, XPHOZAH, also grew in 2025, with revenue reaching $103.6 million. For 2026, Ardelyx expects XPHOZAH to bring in between $110 million and $120 million, driven by what it calls "increased clinical conviction" among prescribers.
So, with all this growth, why is the stock down? Sometimes the market looks past the current quarter and focuses on what's next, or it gets spooked by technical signals. Let's look at the charts.
From a technical analysis perspective, the picture is mixed. The stock is trading well below its 20-day simple moving average, which suggests some short-term weakness. However, it's essentially flat against its 100-day average and is still nicely above its 200-day average. Over the past year, the stock is up nearly 18% and is closer to its 52-week high than its low.
The momentum indicators are telling two different stories. The Relative Strength Index (RSI) is sitting at 41.73, which is in neutral territory—not oversold, not overbought. But the Moving Average Convergence Divergence (MACD) is in negative territory and below its signal line, which is typically read as a bearish sign. So you have neutral momentum from one indicator and bearish pressure from another. Key technical levels to watch are resistance at $6.00 and support at $5.50.
Perhaps the market's tepid reaction is a classic "buy the rumor, sell the news" event, or maybe investors wanted an even bigger beat. It's also worth noting that while the healthcare sector was flat overall on the previous trading day, Ardelyx is moving on its own company-specific news.
What might change the narrative? The company's pipeline. Ardelyx is working to expand IBSRELA's market by getting it approved for patients with chronic idiopathic constipation (CIC). It has already dosed the first patient in a Phase 3 trial called ACCEL for this new use. If all goes well, enrollment should finish by the end of 2026, with results expected in the second half of 2027. Success here would significantly widen the drug's potential patient pool.
Beyond that, Ardelyx is also developing a next-generation drug called RDX10531 and plans to submit an Investigational New Drug application to the FDA in the second half of 2026.
Despite the premarket dip, the analyst community is firmly in the bull camp. The stock carries a consensus Buy rating with an average price target of $12.86, which is more than double where it was trading premarket. Recent actions include BTIG maintaining a Buy rating with a $17.00 target and Wedbush raising its target to $19.00 in January.
In the end, Friday's move for Ardelyx is a reminder that strong fundamental growth doesn't always get an immediate standing ovation from the market. Investors are weighing the impressive trajectory of IBSRELA against near-term technical headwinds and the long timeline for pipeline catalysts. For now, the stock is caught between a bullish future and a cautious present.
