Hello, ladies and gentlemen. Thank you for standing by. Welcome to Ardelyx’s Third Quarter 2015 Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, today’s call is being recorded. It is now my pleasure to turn the call over to Kimberley Minarovich, Vice President of Investor Relations at Burns McClellan who will make introductory comments.

Thank you. Good afternoon and welcome to Ardelyx’s third quarter end 2015 earnings conference call. Earlier this morning, Ardelyx issued a press release providing the details of the Company’s financial results for the third quarter of 2015, as well as the corporate update. The press release is available in the Investor Relations sector of the corporate website at ir.ardelyx.com. Today’s call will be led by Mike Raab, Ardelyx's President and Chief Executive Officer. He will be joined by Mark Kaufmann, Chief Financial Officer and David Rosenbaum, Senior Vice President of Drug Development. As a reminder during today’s call, Ardelyx will be making forward-looking statements. To the extent that statement contained in on the call are not descriptions of historical facts regarding Ardelyx they are forward-looking statements reflecting the current beliefs and expectations that Management made pursuant to the Safe Harbor of the Private Securities Reform Act of 1995, including the potential for tenapanor in treating IBS-C and hyperphosphatemia in CKD patients on dialysis. Ardelyx's future development plans for tenapanor and the timing thereof, the expected timing for the receipt of the results for the Phase hyperphosphatemia clinical trial, the potential for RDX022 in treating hyperkalemia in kidney and heart disease patients, Ardelyx's future development plans for RDX022 and the timing thereof, the expected timing for the receipt of the results for the RDX022 pharmacodynamic clinical trial and the potential of Ardelyx's drug discovery and design platform. Such forward-looking statements involve substantial risks and uncertainties that could cause the development of tenapanor, RDX022, or Ardelyx's future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in research and the clinical development process and the uncertainties in the manufacture of clinical trial material, including process development, scale up and tech transfer of manufacturing processes. Ardelyx undertakes no obligation to update or revise any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Ardelyx's business in general, please refer to Ardelyx's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 12, 2015and its future current and periodic reports to be filed with the Securities and Exchange Commission. At this time, it is my pleasure to turn the call over to Ardelyx's President and Chief Executive Officer, Mike Raab. Mike?

Thank you, Kimberly. Good morning everyone and thank you all for joining us. On today's call, I will summarize our recent clinical and corporate accomplishments and highlight our upcoming plans. I am joined by David Rosenbaum, Vice President, Drug Development as well as Mark Kaufmann, our Chief Financial Officer, who will review our financial results from the quarter. Over the past three months, we have made significant strides with several of our key clinical candidates. Our principle allows us to accelerate the timelines for tenapanor in IBS-C and RDX022, a potassium binder for the treatment of hyperkalemia. In October, we initiated the first of two Phase 3 clinical trials evaluating tenapanor to treat patients with IBS-C. We designed this trial to closely match our previous Phase 2b clinical trial as well as other successful Phase 3 IBS-C clinical trials conducted in the industry. The study includes a 12-week primary endpoint with a four-week randomized withdrawal - followed by an open-label extension. The primary endpoint of the study is the overall respond rate in 6 out of 12 weeks for patients treated with 50 milligram dose of tenapanor administer twice daily versus placebo. We have also included important secondary endpoints such as the greater complete spontaneous bowel movements, abdominal pain and other abdominal symptoms in 6 out of 12 weeks as well as in 9 out of 12 weeks. This is same responder endpoint that could provide insight into the potential benefit of tenapanor in chronic kidney constipation. The trial will include about 300 patients per group and we expect enrollment to take approximately 12 months. Additionally, I am pleased to announce that we will begin our second Phase 3 trial in IBS-C patients in December ahead of our original plan. The study was expected to start in the first quarter…

Thanks, Mike. Usual process for the company rather than review all information disclosed in the press release, I would like to focus on a few specific financial highlights. Our cash position remained strong with $129 million cash at the end of the third quarter versus $107.2 million at December 31, 2014. The reason for this increase is the financing we closed in June in which we raised $74.3 million in net proceeds after deducting a [ph]. This is offset by our operating expenses and working capital needs during the first nine months as well as our termination agreement with AstraZeneca, which resulted in $25 million upfront payment. We had a net loss in the third quarter of 2015 of $18.1 million or a loss of $0.70 per basic and diluted share compared to a net income of $74,000 or $0 per basic and diluted share in the third quarter of 2014. This change primarily reflects two aspects of our business. First, the AstraZeneca licensing agreement was terminated in June 2015 and a result, we did not recognize any amortization of deferred revenues in the third quarter. Second, the Company's operating expenses have increased significantly to reflect the Company's new clinical trial startup expenses as well as manufacturing expenses. One aspect that [ph] there is mentioning it is the status, the transfer clinical trial materials from AstraZeneca. Last quarter, we announced that we would pay up to $10 million of clinical trial materials in process are already made by AZ. Subsequently, we have reduced that amounts to $8 million during the quarter and we accrued $7.3 million of that amount to reflect partial receipts tenapanor from AZ for our clinical studies. The remaining technology transfer activities have essentially been completed. In conclusion, we are in the process of embarking of several large clinical studies and we are excited to solidify our status as a Phase 3 Company. We are looking forward to updating you as we move forward.

Thank you, Mark. With that, we would now like to take any questions you have. As a reminder, we are also joined today by David Rosenbaum, Senior Vice President of Drug Development, if you have any questions related to our clinical programs. Operator, we are now ready to take questions.

[Operator Instructions] Our first questioner comes from the line of Jason Gerberry from Leerink. Your line is open.

Hi. This is Ed [ph] filling in for Jason. Just one quick question on RDX022, I wondered if you could comment on recent Veltassa approval and black box warning that it received and I heard you mentioning that you were planning to do DDI studies prior to the submission and I just wondered is that just de-risking for that potential drug binding of it that these drugs maybe attributed with, and I wondered if you could provide a little bit more color on that.

Yes, Ed. We are thrilled that Veltassa got approved. Clearly, this is a significant market that [ph] an awful lot of work while the company is involved to build it. DDI studies are standard. If you look back to my experience and David's experience with [ph], we actually did something quite similar to Veltassa has experienced and also that we learned then if you are in-vitro that do not necessarily correlate to the in-vitro experience, so the specific commentary that we said in my opening comments that we will conduct appropriate drug, drug interaction studies prior to NDA submission is exactly that both due to work to make sure that we have the proper information on the label when it comes time for approval versus some of the confusion that has had to work itself out and with Veltassa approval.

Thank you.

Our next question comes from the line of Mike King from JMP Securities. Your line is open.

Thanks for taking the questions. I had a couple on tenapanor and probably one or two on 022. On tenapanor in IBS-C, could you talk about whether you are allowing for enrollment of patient to have failed drug like [indiscernible] or we see what is the patient or naïve treatment that is the first question.

Sure. Mike, this is David Rosenbaum. Yes. We are buying that. There is no exclusion in the clinical protocol that would exclude individuals who have been other IBS-C therapies.

There have to be washout period or?

Yes. As it is standard, so in this clinical protocol, you would have to be off other IBS-C meds for a week before starting and then there is a standard two-week screening period in which you assess individual active IBS-C state.

Okay. Great. Then in regard to the dialysis study, can you talk about what your assumptions going to be for your active control and can you also tell us a bit about the number and frequency of dose adjustments that you will permit?

Sure. First of all, this is a two-part study. In the first part, there are three arms that are tenapanor-only. One arm is 3 milligram bid fixed dose. Another arm is 10 mig bid fixed dose and third arm is the down titration arm, which you just asked about. Everyone will start at 30 mig bid and will be allowed to adjust their dose during the first four weeks of the clinical trial, so they will be allowed to if needed based on GI tolerability go down to 20 mig bid, 15 mig bid 10 mig bid and then finally 3 mig bid at which point their dose will be fixed for the last four weeks of the clinical trial. The second part was?

The active competitive and if you are going to…

In the randomized with to our [ph], which is the second part of the clinical trial, it is a placebo-controlled, there is no active competitor.

Okay. All right. Thank you. Then on 022, I am just wondering, I guess a couple of questions. First is, it seems like you are making a lot of modifications, so I am just wondering if you can comment on that relative to 505(b)2 status, especially if you are going to use a different counter ion. Then I would also ask you about whether you will start your DDIs before the [ph] label change are out there. Thank you?

Yes. What we are doing is, making slight changes to the drug while staying in the same structure and staying within the specification currently available on to [ph]. You can change the counter ion and still remain under 505(b)(2) the short form is not - it can be adjusted. As far as the second part, we have depending on [ph] the generic during the BDI studies personally - and we see our is a completely different product. It undertakes the BDI studies appropriately.

Thank you. Our next question comes from Tim Chiang from BTIG. Your line is open.

Hi. Thanks. David, could you talk a little about the patient sizes for the two pivotal studies for tenapanor and IBS-C?

Sure. Tim. In both clinical trials, there are - well, A, there is only two groups in both. One is 50 mig bid and the other is placebo. Each arm will have around 300 per arm. We chose 300 per arm, because at 300, we will have a 95% power to show a 15% drug effect or an 80% power to show 11.6% drugs effect. If you recall, we effectively we saw in our in Phase 3 primarily endpoint from our Phase 2b clinical trials was 26.4%, so we have powered it to show a much more effect, so we feel it is a very robust clinical trials design.

Thanks. Mike, I had one follow-up. Coming back from the ACG Conference, I mean, could you talk a little about what sort of feedback you are getting from physicians. What are they looking for in an IBS-C treatment? Do you think tenapanor can fill a niche in that marketplace down that road?

I will talk a little bit generally and then have David comment on any feedback you got at ACG. I did not attend that, but I think the biggest issue that we expect to overcome if you look at the Phase 2a that we ran and then ultimately the results in our 2b, our overall responder rate of 50% non-adjusted for placebo compared to the 36-ish percent in both, linaclotide and plecanatide, we feel that we will have an overall responder rates that is greater than the GCC agonist that are out there with lower rates of diarrhea, which is evidenced both by our Phase 2a and our Phase 2b. Overall, as we talked our objective is normalized [ph] in this population and that is why we are looking to sustained response rate where we have gotten a substantial number of our patients as three bowel movings per week at a minimum, so that is why within the normal range, so that is the biggest differentiators compared to what we see or hear it is about in terms of the how the patients are actually doing with [indiscernible] and amount diarrhea that they experience. Tim, I think the feedback that I have got is exactly there are two things. One is, when people see the results from our Phase 2a study and see that we had a once a day drug that had in a small four-week clinical trial had nice effects with no difference in diarrhea between that group in the placebo as well as the results the highest statistical significant results we had in our Phase 2b study. They are starting to see the drug that they think they might be able to use at different doses. Start people out 100 migs, once a day in those people that it works great they expect low rates diarrhea and in those that it do not, they could split it and do a 50 mig bid and increase the efficacy, so I think they see a drug that they could actually titrate unlike any other treatment that is available and the other thing that everyone always points to is the rates of diarrhea. Between that Phase 2a study and the 11.2% rate that we saw in Phase 2b study they see a potential drug that won't have as high rates of diarrhea.

Okay. Maybe just one last question, at what point will you guys consider running chronic constipation studies with tenapanor?

Tim, I guess we look at it two different ways. One as we said before, we would like to see the results of our first Phase 3 IBS-C clinical trial. Two, in our Phase 3 clinical trial both, we have as a key secondary endpoint they are sustained or durable responder endpoint. What this endpoint is, the overall response as well as the complete bowel movement response in 9 of 12 weeks and three of the last four weeks, which means individual have to have an increased of at least one complete by bowel movement have at least a total of three in that week as well as a 30% decrease in abdominal pain. This endpoint when you look at this the CSBM sustained responder endpoint; this is the same that is currently used in chronic idiopathic constipation clinical trials. We believe the results of that clinical trial will give good insights to us as well as granularity [ph] investigated of the utility of the drug in chronic idiopathic constipation and there is a huge overlap if you look in between the IBS-C patient population and the chronic constipation population.

Okay. Great. Thanks very much.

Thank you. Our next question comes from the line Mara Goldstein from Cantor Fitzgerald. Your line is open.

Thanks very much for taking the question. I just had a question on the tenapanor study in the hyperphosphatemia. I know that numbers are small, but if you look at the percent of patients who completed the study, it was lowest and the post 30 milligram arm and I am just wondering if that is related to the GI side effects and how that gets to manage?

Yes. That is a very good question, Mara. You are right, from the Phase 2b study that we previously reported the 30 mig bid group had the highest rate of discontinuation and that was predominately due to the loose stools in diarrhea produce by tenapanor treatments. If you recall, we ran an ESRD study, where we were looking at into interdialytic weight gain. In that clinical trial, which was a double-blind placebo-controlled study in which there was a dose titration arm and a placebo arms, they were 45 in each group. In the dose titration arm ,everyone started at 45mig bid and they will allowed to weekly down titrate base on GI tolerability in which they go down to 30, 15 and 5. When we unblended the study, we saw two things. The main dose was 34 mig bid, which is higher than what we used in the Phase 2b hyperphosphatemia clinical trial and only one individual out of 45 discontinued. When we think forward to this hyperphosphatemia clinical trial that we are starting in December, we have a dose titration arm in which we are starting it 30. If you look at the result even from our Phase 2b, two-third of the individual stayed at 30 throughout the whole clinical trial, with no issues, with no reason to discontinue, so the way we look at is if this we see does it the same thing at the end of the clinical trial these 50 people per group will have 20 to 30 people perhaps staying at the 30 mig group and then some will go down to 20 and a few more will go down to the 15 or 10 and. By doing this, we are allowing people treatment options, because of the heterogeneity of their individual bowel habits the drug can affect them slightly differently, so at the end we will have improved the dropped out rate and will have maximized the effects, because we will have a higher dose in that group.

Right. Okay. Thank you. I appreciate that.

Thank you. [Operator Instructions] It looks like we have a question from Tim Chiang from BTIG. Your line is open.

Hi. Just a quick follow-up, Mark, could you talk a little bit about just what your expectation for cash burn are going forward given the acceleration on the R&D pipeline?

Sure. We actually have not provided specific guidance as you know. The only thing we provided is sort of a general, the overall burn rate that has been running around. This would be R&D plus G&A not including the new clinical trial [ph] expensive. It is around $30 million to $40 million a year and we have provided the guidance of how much it will cost to get to in NDA for the program, which is $65 million to $80 million for tenapanor IBS-C and then 40 to 50 for hyperphosphatemia and 40 to 50 for hyperkalemia RDX022 program. That is all we have provided to-date.

Okay. That probably does not really change the materially. Does it?

The amounts that I gave, no. That does not change.

Okay. Great. Thanks very much.

Sure.

Thank you. That is all the questions that we have in the queue at this time, so I would like to turn the call back over to Mike Raab for closing remarks.

Thank you, operator. The recent achievements and increased momentum of our Ardelyx's clinical programs have positioned the Company well to achieve our milestones. We look forward to continue progress during the remainder of 2015 and the several upcoming milestones in 2016. On behalf of the entire Ardelyx team, we appreciate your support and look forward to continuing to share our milestones with all of you. Thanks again for joining us. Operator, you may now disconnect.