What happened

Shares of Ardelyx (ARDX 0.26%) were soaring 8.9% as of 2:57 p.m. EDT on Wednesday. The big jump came after the company announced that its Japanese partner, Kyowa Kirin, has begun four late-stage clinical studies evaluating Ardelyx's lead candidate tenapanor in treating hyperphosphatemia, a disorder where there's an abnormally high level of phosphate in the blood.

So what

Kyowa Kirin's initiation of multiple phase 3 studies is good news for Ardelyx in a couple of ways. For one thing, it triggered a $5 million milestone payment. More importantly, it gets the two collaboration partners even closer to potential regulatory approval for tenapanor in Japan.

Scientist looking through a microscope

Image source: Getty Images.

Ardelyx received a $30 million up-front payment from Kyowa Kirin in 2017 when the Japanese drugmaker licensed tenapanor, and it stands to receive a total of up to $55 million in development milestone payments plus up to 8.5 billion yen (around $78 million based on current exchange rates) in commercialization milestones. Ardelyx will also receive royalties in the high teens if tenapanor wins approval in Japan.

Now what

While the start of Japanese clinical studies is good news for Ardelyx, a more important milestone for the biotech stock is only a couple of weeks away. By April 29, the Food and Drug Administration should announce its approval decision for tenapanor in controlling phosphorus levels in adult patients with chronic kidney disease.