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Ironwood (IRWD) Beats Estimates in Q4 Earnings, Stock Up
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Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) reported fourth-quarter 2017 adjusted loss of 14 cents per share, narrower than the Zacks Consensus Estimate of a loss of 21 cents. However, the company had reported adjusted loss of 12 cents in the year-ago period.
Total revenues (collaborative revenue) in the quarter amounted to $94.2 million, up 7.8% from the year-ago period, and beat the Zacks Consensus Estimate of $86.24 million.
The Quarter in Detail
As reported by partner Allergan plc , Ironwood’s key marketed product – Linzess (linaclotide) – generated U.S. net sales of $194.8 million, up 12.2% year over year.
Please note that Ironwood and Allergan have an equal share in brand collaboration profits or losses. Ironwood's share of net profits from the sales of Linzess in the United States (included in collaborative revenues) was $76.6 million in the fourth quarter, up 22% year over year. A $19.1 million milestone payment related to approval of Linzess in Japan was included in revenues.
According to data provided by IMS Health, Linzess prescriptions filled during the quarter were more than 806,000, up 12% from the year-ago period. The drug’s uptake continued to grow in 2017 and it remained a market leader among branded prescription drugs.
During the reported quarter, selling and administrative (SG&A) expenses increased 37.3% to $61.8 million. Research and development (R&D) expenses were $37.1 million, down 1.2% from the year-ago period
Zurampic and Duzallo, approved for uncontrolled gout, generated sales of $1.6 million in the quarter. In August, the FDA approved Duzallo as an oral treatment for hyperuricemia associated with gout in patients. The drug was launched in October 2017.
Combined prescriptions for both the drugs filled during the quarter were 3000, higher than 2066 prescriptions filled only for Zurampic in the previous quarter.
2017 Performance
Revenues for the full year were $298.3 million, up 8.9% from the year-ago period. Revenues included $39 million received as milestone payment from Astellas Pharma related to approval of Linzess in Japan. Loss per share widened 69.1% year over year to 93 cents. R&D expenses increased 6.3% year over to $148.2 million and SG&A expenses rose 34.5% to $233.1 million. The company ended 2017 with $221 million in cash, cash equivalents and available-for-sale securities.
2018 Guidance
The company expects to use less than $75 million for operations in 2018. The company provided its R&D and SG&A expense guidance for 2018 in the range of $160–$180 million and $230–$250 million, respectively.
Pipeline Updates
Linzess is approved in the United States for the treatment of adults with irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (“CIC”). Ironwood and Allergan are looking to broaden Linzess’ label into additional symptoms and develop the drug as non-opioid, pain-relieving agent in IBS patients.
A phase III study to evaluate Linzess in additional abdominal symptoms is expected to start in 2018. The companies are also in discussion with the FDA to start a phase IIb study to evaluate a delayed release formulation of linaclotide for treating all subtypes of IBS, including IBS-mixed and IBS with diarrhea.
Ironwood’s partner in Japan, Astellas Pharma submitted a supplemental new drug application in Japan in September for the label expansion of Linzess in chronic constipation. In China, Hong Kong and Macau, Ironwood has an agreement with AstraZeneca plc (AZN - Free Report) for Linzess. The regulatory filing in China for IBS-C is under review. The company expects the review to be completed in the first half of 2018.
The company is also developing three candidates – IW-3718, IW-1973 and IW-1701 – for gastroesophageal reflux disease, diabetic nephropathy and sickle cell disease, respectively. Ironwood expects to advance IW-3718 in a phase III study in the second half of 2018.
In December 2017, Ironwood announced encouraging top-line data from a phase IIa study, evaluating IW-1973 in patients with type II diabetes with hypertension. The candidate reduced blood pressure and improved metabolic parameters like fasting plasma glucose and cholesterol in diabetic hypertension patients compared to baseline.
Our Take
The company’s fourth-quarter loss was narrower than estimated and sales also beat expectations. Ironwood’s shares gained almost 7% on Thursday on better-than-expected results. However, a look at the company’s share price movement shows that the stock has underperformed the industry this year so far. Ironwood’s shares have lost 8.7% during this period, while the industry registered an increase of 0.8%.
Ironwood is focused on expanding Linzess’ label and its geography. The company is also progressing well other pipeline candidates.
Moreover, sales growth of Linzess is expected to continue in 2018, which will boost top-line. A potential approval in China will be a further boost sales for the drug.
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
XOMA’s loss per share estimates have narrowed from 99 cents to 42 cents for 2018 in the last 60 days. The company pulled off a positive earnings surprise in one of the last four quarters, with an average beat of 47.92%. Share price of the company has skyrocketed 416.3% in the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Ironwood (IRWD) Beats Estimates in Q4 Earnings, Stock Up
Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) reported fourth-quarter 2017 adjusted loss of 14 cents per share, narrower than the Zacks Consensus Estimate of a loss of 21 cents. However, the company had reported adjusted loss of 12 cents in the year-ago period.
Total revenues (collaborative revenue) in the quarter amounted to $94.2 million, up 7.8% from the year-ago period, and beat the Zacks Consensus Estimate of $86.24 million.
The Quarter in Detail
As reported by partner Allergan plc , Ironwood’s key marketed product – Linzess (linaclotide) – generated U.S. net sales of $194.8 million, up 12.2% year over year.
Please note that Ironwood and Allergan have an equal share in brand collaboration profits or losses. Ironwood's share of net profits from the sales of Linzess in the United States (included in collaborative revenues) was $76.6 million in the fourth quarter, up 22% year over year. A $19.1 million milestone payment related to approval of Linzess in Japan was included in revenues.
According to data provided by IMS Health, Linzess prescriptions filled during the quarter were more than 806,000, up 12% from the year-ago period. The drug’s uptake continued to grow in 2017 and it remained a market leader among branded prescription drugs.
During the reported quarter, selling and administrative (SG&A) expenses increased 37.3% to $61.8 million. Research and development (R&D) expenses were $37.1 million, down 1.2% from the year-ago period
Zurampic and Duzallo, approved for uncontrolled gout, generated sales of $1.6 million in the quarter. In August, the FDA approved Duzallo as an oral treatment for hyperuricemia associated with gout in patients. The drug was launched in October 2017.
Combined prescriptions for both the drugs filled during the quarter were 3000, higher than 2066 prescriptions filled only for Zurampic in the previous quarter.
2017 Performance
Revenues for the full year were $298.3 million, up 8.9% from the year-ago period. Revenues included $39 million received as milestone payment from Astellas Pharma related to approval of Linzess in Japan. Loss per share widened 69.1% year over year to 93 cents. R&D expenses increased 6.3% year over to $148.2 million and SG&A expenses rose 34.5% to $233.1 million. The company ended 2017 with $221 million in cash, cash equivalents and available-for-sale securities.
2018 Guidance
The company expects to use less than $75 million for operations in 2018. The company provided its R&D and SG&A expense guidance for 2018 in the range of $160–$180 million and $230–$250 million, respectively.
Pipeline Updates
Linzess is approved in the United States for the treatment of adults with irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (“CIC”). Ironwood and Allergan are looking to broaden Linzess’ label into additional symptoms and develop the drug as non-opioid, pain-relieving agent in IBS patients.
A phase III study to evaluate Linzess in additional abdominal symptoms is expected to start in 2018. The companies are also in discussion with the FDA to start a phase IIb study to evaluate a delayed release formulation of linaclotide for treating all subtypes of IBS, including IBS-mixed and IBS with diarrhea.
Ironwood’s partner in Japan, Astellas Pharma submitted a supplemental new drug application in Japan in September for the label expansion of Linzess in chronic constipation. In China, Hong Kong and Macau, Ironwood has an agreement with AstraZeneca plc (AZN - Free Report) for Linzess. The regulatory filing in China for IBS-C is under review. The company expects the review to be completed in the first half of 2018.
The company is also developing three candidates – IW-3718, IW-1973 and IW-1701 – for gastroesophageal reflux disease, diabetic nephropathy and sickle cell disease, respectively. Ironwood expects to advance IW-3718 in a phase III study in the second half of 2018.
In December 2017, Ironwood announced encouraging top-line data from a phase IIa study, evaluating IW-1973 in patients with type II diabetes with hypertension. The candidate reduced blood pressure and improved metabolic parameters like fasting plasma glucose and cholesterol in diabetic hypertension patients compared to baseline.
Our Take
The company’s fourth-quarter loss was narrower than estimated and sales also beat expectations. Ironwood’s shares gained almost 7% on Thursday on better-than-expected results. However, a look at the company’s share price movement shows that the stock has underperformed the industry this year so far. Ironwood’s shares have lost 8.7% during this period, while the industry registered an increase of 0.8%.
Ironwood is focused on expanding Linzess’ label and its geography. The company is also progressing well other pipeline candidates.
Moreover, sales growth of Linzess is expected to continue in 2018, which will boost top-line. A potential approval in China will be a further boost sales for the drug.
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Ironwood Pharmaceuticals, Inc. Quote
Zacks Rank & Stock to Consider
Ironwood carries a Zacks Rank #3 (Hold). A better-ranked stock in the pharma sector is XOMA Corp (XOMA - Free Report) , carrying a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
XOMA’s loss per share estimates have narrowed from 99 cents to 42 cents for 2018 in the last 60 days. The company pulled off a positive earnings surprise in one of the last four quarters, with an average beat of 47.92%. Share price of the company has skyrocketed 416.3% in the past year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>