Ironwood Pharmaceuticals, Inc.
) third-quarter 2013 loss of 51 cents per share compared
unfavorably with the year-ago earnings of 42 cents per share.
Results were primarily hurt by lower revenues. The Zacks
Consensus Estimate was at a loss of 58 cents per share.
Total revenues in the third quarter of 2013 declined to $4.9
million from $96.4 million in the year-ago period. In the third
quarter of 2012, revenues were boosted by an $85 million
milestone payment from its partner
Forest Laboratories, Inc.
). Revenues were below the Zacks Consensus Estimate of $7
Ironwood's sole marketed product is Linzess indicated for
irritable bowel syndrome with constipation (IBS-C) or chronic
idiopathic constipation (CIC). Ironwood co-markets the drug with
Forest Labs. Forest Labs and Ironwood share Linzess revenues
generated in the U.S. equally. Net sales of the drug, as reported
by Forest Labs, came in at $34.4 million in the third quarter of
2013 as compared to $28.8 million in the preceeding quarter.
In the third quarter, the number of prescriptions filed increased
by more than 40% to 178,000. The company is focusing on promoting
the product to gastroenterologists and primary care physicians.
The company is also working on expanding managed care access to
Linzess and lowering the out-of-pocket cost borne by patients.
Approximately 80% patients who are covered by commercial
insurance plans have unrestricted access to Linzess, while
approximately 60% have tier II ($30 co-pay) access as of Sep
2013. Ironwood's Medicare part D plan covers approximately 15% -
20% of the targeted patient population.
Ironwood is looking to broaden Linzess' label by expanding the
targeted patient population and gaining approval for additional
indications. The company is evaluating Linzess for abdominal
symptoms in patients with CIC in a phase IIIb trial. Top-line
data from the trial suggest encouraging efficacy. The study met
its primary endpoint. Ironwood also intends to evaluate Linzess
in pediatric patients and for opioid-induced constipation (phase
IIa study expected to be initiated in the first half of 2014),
both of which represent significant commercial opportunity.
In the EU, approval came in Nov 2012 under the trade name
Constella. Ironwood is collaborating with Almirall, S.A. in the
EU for the drug.
Ironwood is also working with its Japanese partner, Astellas, for
the development of Linzess in Japan, South Korea, Taiwan,
Thailand, the Philippines and Indonesia and with
) in China, Hong Kong and Macau. Currently, Astellas is
evaluating the drug in a phase II trial for IBS-C with results
expected this year (enrollment complete). Ironwood and
AstraZeneca started enrolling patients in a phase III trial
evaluating linaclotide in adult IBS-C patients in Aug 2013 with
data expected in the first half of 2015.
During the third quarter of 2013, selling, general and
administrative (SG&A) expenses surged 32.5% to $30.3 million.
For 2013, Ironwood expects total investment in sales and
marketing for Linzess on the lower end of the $250-$300 million
Research and development (R&D) expenses amounted to $23
million, up 0.7%. In 2013, Ironwood expects to invest in the
lower end of the $60-$75 million range in R&D expenses not
pertaining to linaclotide.
Ironwood carries a Zacks Rank #3 (Hold). We expect investor focus
to remain on the market performance of Linzess. Currently,
) look well positioned with a Zacks Rank #1 (Strong Buy).
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