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Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) reported second-quarter 2023 adjusted loss of $6.71 per share against earnings of 24 cents in the year-ago quarter. However, the reported figure included a one-time expense of approximately $1.1 billion pertaining to acquired in-process research and development (IPR&D) of VectivBio in the quarter.
Excluding the IPR&D cost, earnings were 31 cents per share, which beat the Zacks Consensus Estimate of 25 cents.
Ironwood completed the buyout of VectivBio, a Switzerland-based biotech company, in June. VectivBio focused on the development of treatments for severe and rare gastrointestinal conditions. The all-cash transaction was valued at approximately $1.1 billion, under which Ironwood paid $17.00 for one share of VectivBio.
Total revenues of $107.8 million beat the Zacks Consensus Estimate of $103 million. The top line also increased 10.4% year over year.
The stock nosedived 16.8% in the year-to-date period compared with the industry’s 3.5% decline.
Image Source: Zacks Investment Research
Quarter in Detail
As reported by partner AbbVie (ABBV - Free Report) , Ironwood’s sole marketed product — Linzess (linaclotide) — generated net sales of almost $269.7 million in the United States, up 9% year over year driven by prescription growth. The total prescription and new prescription demand of Linzess increased 9% and 15%, respectively, from that recorded in the year-ago period.
Ironwood and AbbVie equally share Linzess’ brand collaboration profits and losses. IRWD’s share of net profit from the sales of Linzess in the United States (included in collaborative revenues) totaled $104.8 million, up 11% year over year.
Linzess’ collaborative revenues from U.S. sales beat our model estimate of $101.5 million.
In the quarter, IRWD and ABBV received FDA’s approval for Linzess label expansion fortreating functional constipation in pediatric patients aged 6-17 years. Linzess becomes the first and only FDA-approved prescription therapy for functional constipation in pediatric patients.
Ironwood has agreements with two partners — Astellas Pharma and AstraZeneca (AZN - Free Report) — related to the development and commercialization of Linzess in Japan and China, respectively. Both Astellas and AstraZeneca have exclusive rights to develop and market the drug in their respective territories. The partners are liable to pay royalties to Ironwood on net Linzess revenues earned in their own regions.
The company recorded $2.6 million in royalties and other revenues, down 3.7% from the prior-year quarter’s figure.
2023 Guidance Update
Ironwood updated its previously issued guidance for 2023, reflecting continued strong performance of Linzess in the United States.
The company expects total revenues in the range of $435-$450 million, up from the previous guided range of $420-$435 million. It also anticipates U.S. sales of Linzess to grow in the band of 6-8%, up from the previous range of 3-5%.
The company now expects adjusted EBITDA at a loss of approximately $900 million for the year (against the previously anticipated earnings of $250 million). The figure includes the abovementioned onetime charge of approximately $1.1 billion from the VectivBio acquisition.
Pipeline and Other Updates
With the acquisition of VectivBio, Ironwood acquired rights to develop and commercialize apraglutide. The candidate is being evaluated in a phase III study for treating short-bowel syndrome patients with intestinal failure. Enrollment in the study is complete and the top-line data from the same is expected in March 2024.
Apraglutide is also being evaluated in a phase II proof-of-concept studyfor patients with steroid-refractory gastrointestinal acute Graft versus Host Disease. Data from the study is anticipated by the first quarter of 2024.
Ironwood is also evaluating two other pipeline candidates, IW-3300 and CNP-104, for treating visceral pain conditions and primary biliary cholangitis (PBC), respectively. The phase II proof-of-concept study evaluating IW-3300 is ongoing for interstitial cystitis/bladder pain syndrome.
IRWD, in collaboration with COUR Pharmaceuticals, is developing CNP-104. The clinical study for the same is being conducted by COUR Pharmaceuticals to evaluate the candidate’s safety, tolerability, pharmacodynamic effects and efficacy in PBC patients. The study is expected to complete enrollment in the second half of 2023.
Ironwood Pharmaceuticals, Inc. Price and Consensus
In the past 90 days, the Zacks Consensus Estimate for ADC Therapeutics has narrowed from a loss of $2.77 per share to a loss of $2.61 for 2023. The consensus estimate has narrowed from a loss of $2.59 per share to a loss of $2.55 for 2024 during the same time frame. Shares of the company have lost 58.3% year to date.
ADCT’s earnings beat estimates in three of the trailing four quarters and missed the mark in one, delivering an average surprise of 10.70%.
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Ironwood's (IRWD) Reports Q2 Loss, Linzess Volume Rises
Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) reported second-quarter 2023 adjusted loss of $6.71 per share against earnings of 24 cents in the year-ago quarter. However, the reported figure included a one-time expense of approximately $1.1 billion pertaining to acquired in-process research and development (IPR&D) of VectivBio in the quarter.
Excluding the IPR&D cost, earnings were 31 cents per share, which beat the Zacks Consensus Estimate of 25 cents.
Ironwood completed the buyout of VectivBio, a Switzerland-based biotech company, in June. VectivBio focused on the development of treatments for severe and rare gastrointestinal conditions. The all-cash transaction was valued at approximately $1.1 billion, under which Ironwood paid $17.00 for one share of VectivBio.
Total revenues of $107.8 million beat the Zacks Consensus Estimate of $103 million. The top line also increased 10.4% year over year.
The stock nosedived 16.8% in the year-to-date period compared with the industry’s 3.5% decline.
Image Source: Zacks Investment Research
Quarter in Detail
As reported by partner AbbVie (ABBV - Free Report) , Ironwood’s sole marketed product — Linzess (linaclotide) — generated net sales of almost $269.7 million in the United States, up 9% year over year driven by prescription growth. The total prescription and new prescription demand of Linzess increased 9% and 15%, respectively, from that recorded in the year-ago period.
Ironwood and AbbVie equally share Linzess’ brand collaboration profits and losses. IRWD’s share of net profit from the sales of Linzess in the United States (included in collaborative revenues) totaled $104.8 million, up 11% year over year.
Linzess’ collaborative revenues from U.S. sales beat our model estimate of $101.5 million.
In the quarter, IRWD and ABBV received FDA’s approval for Linzess label expansion fortreating functional constipation in pediatric patients aged 6-17 years. Linzess becomes the first and only FDA-approved prescription therapy for functional constipation in pediatric patients.
Ironwood has agreements with two partners — Astellas Pharma and AstraZeneca (AZN - Free Report) — related to the development and commercialization of Linzess in Japan and China, respectively. Both Astellas and AstraZeneca have exclusive rights to develop and market the drug in their respective territories. The partners are liable to pay royalties to Ironwood on net Linzess revenues earned in their own regions.
The company recorded $2.6 million in royalties and other revenues, down 3.7% from the prior-year quarter’s figure.
2023 Guidance Update
Ironwood updated its previously issued guidance for 2023, reflecting continued strong performance of Linzess in the United States.
The company expects total revenues in the range of $435-$450 million, up from the previous guided range of $420-$435 million. It also anticipates U.S. sales of Linzess to grow in the band of 6-8%, up from the previous range of 3-5%.
The company now expects adjusted EBITDA at a loss of approximately $900 million for the year (against the previously anticipated earnings of $250 million). The figure includes the abovementioned onetime charge of approximately $1.1 billion from the VectivBio acquisition.
Pipeline and Other Updates
With the acquisition of VectivBio, Ironwood acquired rights to develop and commercialize apraglutide. The candidate is being evaluated in a phase III study for treating short-bowel syndrome patients with intestinal failure. Enrollment in the study is complete and the top-line data from the same is expected in March 2024.
Apraglutide is also being evaluated in a phase II proof-of-concept studyfor patients with steroid-refractory gastrointestinal acute Graft versus Host Disease. Data from the study is anticipated by the first quarter of 2024.
Ironwood is also evaluating two other pipeline candidates, IW-3300 and CNP-104, for treating visceral pain conditions and primary biliary cholangitis (PBC), respectively. The phase II proof-of-concept study evaluating IW-3300 is ongoing for interstitial cystitis/bladder pain syndrome.
IRWD, in collaboration with COUR Pharmaceuticals, is developing CNP-104. The clinical study for the same is being conducted by COUR Pharmaceuticals to evaluate the candidate’s safety, tolerability, pharmacodynamic effects and efficacy in PBC patients. The study is expected to complete enrollment in the second half of 2023.
Ironwood Pharmaceuticals, Inc. Price and Consensus
Ironwood Pharmaceuticals, Inc. price-consensus-chart | Ironwood Pharmaceuticals, Inc. Quote
Zacks Rank & Stock to Consider
Currently, Ironwood has a Zacks Rank #4 (Sell).
A better-ranked stock in the same industry is ADC Therapeutics (ADCT - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 90 days, the Zacks Consensus Estimate for ADC Therapeutics has narrowed from a loss of $2.77 per share to a loss of $2.61 for 2023. The consensus estimate has narrowed from a loss of $2.59 per share to a loss of $2.55 for 2024 during the same time frame. Shares of the company have lost 58.3% year to date.
ADCT’s earnings beat estimates in three of the trailing four quarters and missed the mark in one, delivering an average surprise of 10.70%.