Shares of Ardelyx (NASDAQ: ARDX) are set to open sharply lower in pre-market trading, plunging 25.94% following the release of the company's disappointing first-quarter 2025 financial results and a subsequent analyst downgrade.

The biopharmaceutical firm's earnings report, released after market close on Thursday, fell significantly short of analyst expectations. Ardelyx reported a quarterly loss of $0.17 per share, missing the consensus estimate of a $0.10 loss by a considerable margin. This represents a 70% negative surprise compared to projections. The company's revenue for the quarter came in at $74.11 million, falling short of analyst estimates of $80.68 million, despite showing a year-over-year increase of 61.1%.

The disappointing results were primarily driven by lower-than-expected product sales. Ardelyx's flagship products, IBSRELA and XPHOZAH, generated sales of $44.40 million and $23.41 million respectively, both falling short of analyst projections. In response to the earnings miss, Raymond James downgraded Ardelyx from Strong Buy to Outperform and cut its price target from $13 to $11, further contributing to the stock's pre-market decline. These factors have raised concerns among investors about Ardelyx's near-term growth prospects and its path to profitability, despite the company's focus on developing innovative treatments for unmet medical needs.