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Ironwood (IRWD) Q1 Loss Wider than Expected, Sales Miss
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Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) reported first-quarter 2017 adjusted loss of 33 cents per share, significantly wider than both the Zacks Consensus Estimate of a loss of 19 cents and the year-ago loss of 8 cents.
Total revenue (collaborative revenues) in the quarter amounted to $52.2 million, down 20.9% from the year-ago period and also below the Zacks Consensus Estimate of $72 million. In the last-year quarter, the company received a milestone payment of $15 million from Astellas for the development of Linzess to treat adults with IBS-C in Japan.
Ironwood’s shares lost 1% on May 8, 2017, following the earnings release. A look at the company’s share price movement shows that the stock has underperformed the Zacks classified Medical - Drugs industry this year so far. Ironwood’s shares gained 2.9% during this period, while the industry registered an increase of 5.4%.
The Quarter in Detail
As reported by partner Allergan plc , Ironwood’s key marketed product – Linzess – generated U.S. net sales of $147.6 million, down 15% sequentially but up 7.7% year over.
Please note that Ironwood and Allergan have an equal share in brand collaboration profits or losses. Ironwood's share of the net profits from the sales of Linzess in the U.S. (included in collaborative revenues) was $49.5 million in the first quarter, down 21.2% sequentially.
According to data provided by IMS Health, Linzess prescriptions filled during the quarter crossed 700,000, up 17% from the year-ago period.
Differences in trade buying patterns, which resulted in destocking of approximately $20 million in inventory during the first quarter, drove sales and prescription growth of Linzess.
During the reported quarter, selling and administrative (SG&A) expenses increased 53.6% to $55.6 million, primarily due to investments for the launch of Zurampic.
Research and development (R&D) expenses were $33.7 million, up 6% from the year-ago period due to costs associated with pipeline development.
Other Updates
Linzess is currently approved in the U.S. for the treatment of adults with irritable bowel syndrome with constipation (IBS-C; 290 mcg) and chronic idiopathic constipation (CIC; 145 mcg). Ironwood and Allergan are looking to broaden Linzess’ label by expanding the targeted patient population and gaining approval for additional indications.
This January, the FDA approved a 72 mcg dose of Linzess for the treatment of adults with CIC. The new dose was introduced in Mar 2017. Approval for this lower dose strength would boost prescriptions in the large, heterogeneous adult CIC patient population. In Dec 2016, Ironwood announced positive top-line data from a phase IIb study evaluating a colonic formulation of Linzess. Data from the study showed that the colonic formulation led to improvements in pain relief over Linzess, supporting the advancement of the colonic formulation to phase III development in 2017.
Allergan has a deal with Astellas for Linzess in Japan. In China, Hong Kong and Macau, Ironwood has an agreement with AstraZeneca plc (AZN - Free Report) for Linzess. The drug received approval for IBS-C indication in Japan in Dec 2016 and was subsequently launched in Mar 2017. Furthermore, a regulatory filing has been submitted in China for IBS-C. The company expects the review to be completed in the first quarter of 2018.
Zurampic, Ironwood’s second commercial product for the treatment of uncontrolled gout, was launched in Oct 2016.
Zurampic raked in sales of $0.3 million in the quarter. Zurampic prescriptions filled during the quarter were 900, higher than 371 prescriptions filled in the previous quarter. At the call, management said that it expects slow uptake of the drug in 2017. The company also expects sales to be nominal as it works on educating physicians and patients as well as secure payer access.
This year, Ironwood expects to launch Duzallo, the fixed-dose combination of Zurampic and allopurinol. The new drug application for Duzallo was accepted by the FDA for review in January this year. The PDUFA date is in the second half of 2017 and the drug is expected to be launched in late 2017. If approved, Duzallo would become the first dual-mechanism treatment for patients with uncontrolled gout.
2017 Guidance
The company continues to expect to use less than $100 million for operations in 2017, much higher than the 2016 levels. This is due to the full-year of commercial expenses related to the launch of Zurampic and to support the launch of Duzallo and pipeline advancement.
The company also maintained its R&D expenses and SG&A expenses guidance for 2017 in the range of $145–$160 million and $235–$250 million, respectively.
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Ironwood currently carries a Zacks Rank #3 (Hold). A better-ranked stocks in the health care sector is VIVUS, Inc. , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
VIVUS’s loss per share estimates narrowed from 50 cents to 39 cents for 2017, over the last 30 days. The company posted positive earnings surprises in all of the four trailing quarters with an average beat of 233.69%.
Zacks’ Best Private Investment Ideas
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Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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Ironwood (IRWD) Q1 Loss Wider than Expected, Sales Miss
Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) reported first-quarter 2017 adjusted loss of 33 cents per share, significantly wider than both the Zacks Consensus Estimate of a loss of 19 cents and the year-ago loss of 8 cents.
Total revenue (collaborative revenues) in the quarter amounted to $52.2 million, down 20.9% from the year-ago period and also below the Zacks Consensus Estimate of $72 million. In the last-year quarter, the company received a milestone payment of $15 million from Astellas for the development of Linzess to treat adults with IBS-C in Japan.
Ironwood’s shares lost 1% on May 8, 2017, following the earnings release. A look at the company’s share price movement shows that the stock has underperformed the Zacks classified Medical - Drugs industry this year so far. Ironwood’s shares gained 2.9% during this period, while the industry registered an increase of 5.4%.
The Quarter in Detail
As reported by partner Allergan plc , Ironwood’s key marketed product – Linzess – generated U.S. net sales of $147.6 million, down 15% sequentially but up 7.7% year over.
Please note that Ironwood and Allergan have an equal share in brand collaboration profits or losses. Ironwood's share of the net profits from the sales of Linzess in the U.S. (included in collaborative revenues) was $49.5 million in the first quarter, down 21.2% sequentially.
According to data provided by IMS Health, Linzess prescriptions filled during the quarter crossed 700,000, up 17% from the year-ago period.
Differences in trade buying patterns, which resulted in destocking of approximately $20 million in inventory during the first quarter, drove sales and prescription growth of Linzess.
During the reported quarter, selling and administrative (SG&A) expenses increased 53.6% to $55.6 million, primarily due to investments for the launch of Zurampic.
Research and development (R&D) expenses were $33.7 million, up 6% from the year-ago period due to costs associated with pipeline development.
Other Updates
Linzess is currently approved in the U.S. for the treatment of adults with irritable bowel syndrome with constipation (IBS-C; 290 mcg) and chronic idiopathic constipation (CIC; 145 mcg). Ironwood and Allergan are looking to broaden Linzess’ label by expanding the targeted patient population and gaining approval for additional indications.
This January, the FDA approved a 72 mcg dose of Linzess for the treatment of adults with CIC. The new dose was introduced in Mar 2017. Approval for this lower dose strength would boost prescriptions in the large, heterogeneous adult CIC patient population. In Dec 2016, Ironwood announced positive top-line data from a phase IIb study evaluating a colonic formulation of Linzess. Data from the study showed that the colonic formulation led to improvements in pain relief over Linzess, supporting the advancement of the colonic formulation to phase III development in 2017.
Allergan has a deal with Astellas for Linzess in Japan. In China, Hong Kong and Macau, Ironwood has an agreement with AstraZeneca plc (AZN - Free Report) for Linzess. The drug received approval for IBS-C indication in Japan in Dec 2016 and was subsequently launched in Mar 2017. Furthermore, a regulatory filing has been submitted in China for IBS-C. The company expects the review to be completed in the first quarter of 2018.
Zurampic, Ironwood’s second commercial product for the treatment of uncontrolled gout, was launched in Oct 2016.
Zurampic raked in sales of $0.3 million in the quarter. Zurampic prescriptions filled during the quarter were 900, higher than 371 prescriptions filled in the previous quarter. At the call, management said that it expects slow uptake of the drug in 2017. The company also expects sales to be nominal as it works on educating physicians and patients as well as secure payer access.
This year, Ironwood expects to launch Duzallo, the fixed-dose combination of Zurampic and allopurinol. The new drug application for Duzallo was accepted by the FDA for review in January this year. The PDUFA date is in the second half of 2017 and the drug is expected to be launched in late 2017. If approved, Duzallo would become the first dual-mechanism treatment for patients with uncontrolled gout.
2017 Guidance
The company continues to expect to use less than $100 million for operations in 2017, much higher than the 2016 levels. This is due to the full-year of commercial expenses related to the launch of Zurampic and to support the launch of Duzallo and pipeline advancement.
The company also maintained its R&D expenses and SG&A expenses guidance for 2017 in the range of $145–$160 million and $235–$250 million, respectively.
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Ironwood Pharmaceuticals, Inc. Quote
Zacks Rank & Key Picks
Ironwood currently carries a Zacks Rank #3 (Hold). A better-ranked stocks in the health care sector is VIVUS, Inc. , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
VIVUS’s loss per share estimates narrowed from 50 cents to 39 cents for 2017, over the last 30 days. The company posted positive earnings surprises in all of the four trailing quarters with an average beat of 233.69%.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>