Ardelyx lawsuit unlikely to succeed, says H.C. Wainwright

H.C. Wainwright keeps a Buy rating on Ardelyx after the company announced it has filed a lawsuit against the Department of Health and Human Services and the Centers for Medicare and Medicaid Services, in collaboration with the American Association of Kidney Patients and the National Minority Quality Forum. The lawsuit argues that the CMS is in violation of its statutory and regulatory authority under the Medicare Improvements for Patients and Providers Act, the analyst tells investors in a research note. While the lawsuit is unlikely to succeed, “a surprise win would represent a significant upside,” says the firm. Wainwright adds that while a “low-probability effort,” Ardelyx’s track record in influencing legislative efforts likely gives management the confidence that they may well prevail. That said, the stock is now setup for a potentially substantial gain in the unlikely scenario that Xphozah is ultimately excluded from the CMS bundle, according to the firm. It continues to view Ardelyx as undervalued