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Ironwood (IRWD) Posts Narrower-than-Expected Loss in Q3

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Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) reported an adjusted loss of 18 cents per share in the third quarter of 2016, narrower than both the Zacks Consensus Estimate of a loss of 23 cents and the year-ago loss of 25 cents.

Total revenue in the quarter amounted to $66.1 million, up 66.9% from the year-ago period and above the Zacks Consensus Estimate of $61 million.

Quarter in Detail

Ironwood’s sole marketed product, Linzess (irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC)), generated U.S. net sales of $164.4 million, as reported by partner Allergan plc in its third-quarter 2016 earnings release, up 9.2% sequentially and 40% year over year.

According to data provided by IMS Health, Linzess prescriptions filled during the quarter crossed 700,000, up 26% from the year-ago period.

Ironwood and Allergan are presently working on broadening Linzess’ label by expanding the target patient population and gaining approval in additional indications. The two companies expect to launch a 72 mcg dose for CIC in early 2017, if approved. An approval is expected to boost prescriptions among the estimated 35 million adult CIC patients.

Meanwhile, the companies have filed for a regulatory approval of Linzess in China and Japan. Furthermore, a linaclotide colonic release formulation is in a phase IIb study in adults suffering from IBS-C, with data expected later this year. This second-generation GC-C agonist candidate has the potential to provide greater and faster abdominal pain relief, and will be able to expand the IBS-C and CIC market, if approved.

Moreover, Ironwood has several candidates in its pipeline, including IW-3718 for refractory gastroesophageal reflux disease, presently in a dose-ranging phase IIb study with data expected in 2017.

Ironwood has a licensing agreement with AstraZeneca PLC (AZN - Free Report) for the exclusive U.S. rights to gout treatment Zurampic (lesinurad) and all products containing lesinurad. Zurampic was launched in Oct 2016.

During the reported quarter, selling and administrative (SG&A) expenses were up a significant 40% to $45.0 million primarily due to investments associated with the launch of Zurampic.

Research and development (R&D) expenses were $37.5 million, up 45.3% from the year-ago period due to continued advancement of pipeline candidates, as well as costs associated with the submission of the lesinurad-allopurinol fixed dose combination product and the expansion of medical team for lesinurad.

2016 Guidance Updated

Backed by its financial discipline, the company now expects to use less than $50 million for operations in 2016, down from the previous guidance of less than $70 million. The company has, however, maintained its guidance for R&D expenses and SG&A expenses in the range of $140–$150 million and $170–$180 million, respectively.

Total marketing and sales expenses for Linzess are still expected to be around the mid-to-high end of the $230–$260 million range.

IRONWOOD PHARMA Price, Consensus and EPS Surprise

 

IRONWOOD PHARMA Price, Consensus and EPS Surprise | IRONWOOD PHARMA Quote

Zacks Rank & Key Picks

Ironwood currently carries a Zacks Rank #4 (Sell). A better-ranked stock in the health care sector is Anika Therapeutics Inc. (ANIK - Free Report) , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anika’s earnings estimates have increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company has posted a positive earnings surprise in all of the four trailing quarters with an average beat of 33.1%. Its share price has gained 8.6% year to date.

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