By Manojna Maddipatla

(Reuters) – Ardelyx Inc’s experimental drug has shown promise in a late-stage study as a standalone therapy to reduce elevated blood phosphate levels in patients with chronic kidney disease (CKD), the drugmaker said on Tuesday.

However, 52.5% patients on the trial experienced diarrhea, leading to a discontinuation rate of 16% in the early phase of the study, the company said.

Shares of the California-based company fell as much as 6.8% to $6.74, before paring losses in late morning trading.

While investor concern is likely over the higher-than-anticipated discontinuation rate, the results were positive with the drug, tenapanor, hitting the key goal of phosphate lowering, Piper Jaffray analyst Christopher Raymond said.

Ardelyx plans to seek marketing approval for tenapanor in the middle of next year and expects the U.S. health regulator’s nod in mid-2021.

The positive results are the latest in a series of wins for Ardelyx. In September, it received U.S. Food and Drug Administration approval for tenapanor’s use as a treatment for irritable bowel syndrome with constipation.

In the same month, Ardelyx had also reported positive data from another late-stage trial testing tenapanor and phosphate binders against binders alone, in reducing serum phosphorus levels.

Binders are the only approved therapy for hyperphosphatemia, a condition resulting in an abnormally elevated level of phosphorus in the blood that is estimated to affect more than 745,000 dialysis patients in major developed countries, Ardelyx said.

If approved, tenapanor will be the only non-phosphate binder treatment for the condition, the company said on Tuesday.

Unlike phosphate binders, tenapanor works by inhibiting the absorption of phosphorus and helps surpass the inherent limitations of binders.

Use of tenapanor oral pill is a huge change for CKD patients on dialysis, who have been taking handfuls of binders throughout their time on therapy, Chief Executive Officer Mike Raab said on a conference call on Tuesday.

“Tenapanor, if approved, will completely disrupt and displace the binder market as a new treatment option with dosing of just one small pill twice a day.”

Given tenapanor’s earlier approval in patients with irritable bowel syndrome with constipation, the drug’s review process for hyperphosphatemia is immensely de-risked, analyst Raymond said.

He expected tenapanor to bring in U.S. sales worth $782 million in 2025.

(Reporting by Manojna Maddipatla in Bengaluru; Editing by Shinjini Ganguli and Shailesh Kuber)