We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Ironwood (IRWD) Incurs Loss in Q1, Announces Restructuring
Read MoreHide Full Article
Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) reported first-quarter 2018 adjusted loss of 27 cents per share, wider than the Zacks Consensus Estimate of a loss of 16 cents. However, the company had reported adjusted loss of 33 cents in the year-ago period.
Total revenues (collaborative revenue) in the quarter amounted to $69.2 million, up 32.7% from the year-ago period, and missed the Zacks Consensus Estimate of $89.5 million.
Quarter in Detail
As reported by partner Allergan plc , Ironwood’s key marketed product – Linzess (linaclotide) – generated U.S. net sales of $159.3 million, up 7.9% 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 $61.2 million in the first quarter, up 23.7% year over year. Sales of linaclotide active pharmaceutical ingredient to the company’s Japanese partner Astellas Pharma added $5.4 million to revenues.
According to data provided by IMS Health, Linzess prescriptions filled during the quarter were more than 764,000, up 9% from the year-ago period. The drug’s uptake continued to grow in 2018 following a strong performance in 2017 and it remained a market leader among branded prescription drugs.
In January, Ironwood and Allergan settled a patent litigation related to an abbreviated new drug application of Sun Pharmaceutical Industries, seeking approval of a generic version of Linzess. Per the settlement agreement, Sun Pharmaceuticals will be allowed to market an authorized generic version from Feb 1, 2031.
Zurampic and Duzallo, approved for uncontrolled gout, generated sales of $0.6 million in the quarter. Duzallo was launched in October 2017 as an oral treatment for hyperuricemia associated with gout.
During the reported quarter, selling and administrative (SG&A) expenses increased 11.4% to $61.9 million. Research and development (R&D) expenses were $37.1 million, up 8.3% from the year-ago period
Restructuring Initiative
In a separate press release, Ironwood announced its intent to split the company into two separate entities. One entity, which will continue with the current name, will focus on the three commercial drugs and gastrointestinal (“GI”) pipeline development. The other entity will focus on the development of the Soluble Guanylate Cyclase pipeline for the treatment of serious and orphan diseases.
The company expects to achieve increased operational performance and strategic flexibility following the completion of the restructuring process.The separation is expected to close in the first half of 2019.
2018 Guidance
Ironwood expects to incur charges related to its restructuring initiative. Hence, the company did not provide any financial guidance for the full year and plans to provide an update in the second-quarter earnings release.
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 a non-opioid, pain-relieving agent in IBS patients.
A phase III study to evaluate Linzess in additional abdominal symptoms is expected to start in mid-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.
A label expansion of Linzess in the chronic constipation indication is under review in Japan. 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, Praliciguat (IW-1973) and Olinciguat (IW-1701) – for gastroesophageal reflux disease, diabetic nephropathy and sickle cell disease, respectively. Ironwood expects to advance IW-3718 in phase III studies in the third quarter of 2018. Two phase II studies to evaluate Praliciguat in diabetic nephropathy and heart failure are currently enrolling patients.
Our Take
The company’s first-quarter loss was wider than estimated and sales also missed expectations. However, the stock was up 3.2% on May 1 on restructuring news. The prospect of the new Ironwood with its sole focus on marketed drugs and GI pipeline is more attractive with lower potential R&D costs.
A look at the company’s share price movement shows that the stock has outperformed the industry this year so far. Ironwood’s shares have gained 24.7% during this period, while the industry declined 3.4%.
Ironwood is focused on expanding Linzess’ label and its geography. Linzess’ sales growth is expected to continue in 2018, which will boost the top line. A potential approval in China will further boost sales of the drug.
Meanwhile, we expect the new Ironwood to be able to be turn profitable faster as revenues grow and operating expenses decline after restructuring.
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Ligand’s earnings per share estimates moved up from $4.20 to $4.43 for 2018 and remained stable at $5.32 for 2019 in the last 30 days. The company delivered a positive surprise in three of the trailing four quarters with an average beat of 24.88%. Share price of the company has increased 14.6% in a year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Ironwood (IRWD) Incurs Loss in Q1, Announces Restructuring
Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) reported first-quarter 2018 adjusted loss of 27 cents per share, wider than the Zacks Consensus Estimate of a loss of 16 cents. However, the company had reported adjusted loss of 33 cents in the year-ago period.
Total revenues (collaborative revenue) in the quarter amounted to $69.2 million, up 32.7% from the year-ago period, and missed the Zacks Consensus Estimate of $89.5 million.
Quarter in Detail
As reported by partner Allergan plc , Ironwood’s key marketed product – Linzess (linaclotide) – generated U.S. net sales of $159.3 million, up 7.9% 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 $61.2 million in the first quarter, up 23.7% year over year. Sales of linaclotide active pharmaceutical ingredient to the company’s Japanese partner Astellas Pharma added $5.4 million to revenues.
According to data provided by IMS Health, Linzess prescriptions filled during the quarter were more than 764,000, up 9% from the year-ago period. The drug’s uptake continued to grow in 2018 following a strong performance in 2017 and it remained a market leader among branded prescription drugs.
In January, Ironwood and Allergan settled a patent litigation related to an abbreviated new drug application of Sun Pharmaceutical Industries, seeking approval of a generic version of Linzess. Per the settlement agreement, Sun Pharmaceuticals will be allowed to market an authorized generic version from Feb 1, 2031.
Zurampic and Duzallo, approved for uncontrolled gout, generated sales of $0.6 million in the quarter. Duzallo was launched in October 2017 as an oral treatment for hyperuricemia associated with gout.
During the reported quarter, selling and administrative (SG&A) expenses increased 11.4% to $61.9 million. Research and development (R&D) expenses were $37.1 million, up 8.3% from the year-ago period
Restructuring Initiative
In a separate press release, Ironwood announced its intent to split the company into two separate entities. One entity, which will continue with the current name, will focus on the three commercial drugs and gastrointestinal (“GI”) pipeline development. The other entity will focus on the development of the Soluble Guanylate Cyclase pipeline for the treatment of serious and orphan diseases.
The company expects to achieve increased operational performance and strategic flexibility following the completion of the restructuring process.The separation is expected to close in the first half of 2019.
2018 Guidance
Ironwood expects to incur charges related to its restructuring initiative. Hence, the company did not provide any financial guidance for the full year and plans to provide an update in the second-quarter earnings release.
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 a non-opioid, pain-relieving agent in IBS patients.
A phase III study to evaluate Linzess in additional abdominal symptoms is expected to start in mid-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.
A label expansion of Linzess in the chronic constipation indication is under review in Japan. 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, Praliciguat (IW-1973) and Olinciguat (IW-1701) – for gastroesophageal reflux disease, diabetic nephropathy and sickle cell disease, respectively. Ironwood expects to advance IW-3718 in phase III studies in the third quarter of 2018. Two phase II studies to evaluate Praliciguat in diabetic nephropathy and heart failure are currently enrolling patients.
Our Take
The company’s first-quarter loss was wider than estimated and sales also missed expectations. However, the stock was up 3.2% on May 1 on restructuring news. The prospect of the new Ironwood with its sole focus on marketed drugs and GI pipeline is more attractive with lower potential R&D costs.
A look at the company’s share price movement shows that the stock has outperformed the industry this year so far. Ironwood’s shares have gained 24.7% during this period, while the industry declined 3.4%.
Ironwood is focused on expanding Linzess’ label and its geography. Linzess’ sales growth is expected to continue in 2018, which will boost the top line. A potential approval in China will further boost sales of the drug.
Meanwhile, we expect the new Ironwood to be able to be turn profitable faster as revenues grow and operating expenses decline after restructuring.
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Ironwood Pharmaceuticals, Inc. Quote
Zacks Rank & Key Pick
Ironwood currently carries a Zacks Rank #3 (Hold). Ligand Pharmaceuticals Incorporated (LGND - Free Report) is a better-ranked stock in the health care sector, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ligand’s earnings per share estimates moved up from $4.20 to $4.43 for 2018 and remained stable at $5.32 for 2019 in the last 30 days. The company delivered a positive surprise in three of the trailing four quarters with an average beat of 24.88%. Share price of the company has increased 14.6% in a year.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>