A month has gone by since the last earnings report for Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) . Shares have lost about 10.3% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is IRWD due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Ironwood Incurs Loss in Q1, Announces Restructuring
Ironwood reported first-quarter 2018 adjusted loss of 27 cents per share, which waswider 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. However, it missed the Zacks Consensus Estimate of $89.5 million.
The Quarter in Detail
As reported by partner Allergan, Linzess generated U.S. net sales of $159.3 million, up 7.9% year over year.
Ironwood and Allergan equally share 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.
Linzess witnessed continued strong demand growth year over year. 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.
Zurampic and Duzallo, approved for uncontrolled gout, generated sales of $0.6 million
During the reported quarter, selling and administrative (SG&A) expenses increased 11.4% to $61.9 million and research and development (R&D) expenses were $37.1 million, up 8.3% from the year-ago period.
Ironwood expects to incur charges related to a restructuring initiative announced in May 2018. 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There have been two revisions lower for the current quarter. In the past month, the consensus estimate has shifted downward by 22.2% due to these changes.
Ironwood Pharmaceuticals, Inc. Price and Consensus
At this time, IRWD has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, IRWD has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.