Ardelyx Inc. (ARDX) shares surged 7.72% in pre-market trading on Wednesday after the company announced that its collaboration partner, Fosun Pharma, received approval from China's Center for Drug Evaluation for tenapanor (marketed as Wan Ti Le) to control serum phosphorus levels in dialysis patients with chronic kidney disease (CKD).

This approval triggers a $5 million milestone payment to Ardelyx from Fosun Pharma under their licensing agreement. Ardelyx is also eligible to receive additional developmental and commercialization milestones of up to $100 million, as well as tiered royalty payments on net sales ranging from the mid-teens to 20 percent.

Tenapanor, a first-in-class phosphate absorption inhibitor, has the potential to address a significant unmet need in China, where approximately 76% of over one million patients on maintenance hemodialysis suffer from hyperphosphatemia, and the rate of achieving target phosphate levels is low.