Ironwood Pharmaceuticals, Inc.
) reported a loss of 38 cents per share in the first quarter of
2014, much narrower than the year-ago loss of 87 cents per share
and the Zacks Consensus Estimate of a loss of 45 cents.
Ironwood's share price jumped 11.21% on the news.
Revenues also increased a whopping 348.7% year over year to $14.6
million driven by Linzess sales. Revenues came in above the Zacks
Consensus Estimate of $9 million.
Ironwood's sole marketed product is Linzess (EU trade name:
Constella) indicated for irritable bowel syndrome with
constipation (IBS-C) or chronic idiopathic constipation (CIC).
Ironwood co-markets the drug with
Forest Laboratories Inc.
). Net sales of the drug, as reported by Forest Labs, came in at
$60 million in the first quarter of 2014, up 19% sequentially.
Number of prescriptions filled increased 11% to approximately
240,000 driven by new patient addition and continued demand for
Linzess. The company is focusing on promoting the product to
gastroenterologists and primary care physicians.
Ironwood has launched a direct-to-consumer campaign which should
boost new patient and refill rate for Linzess over the next three
to six months.
The company is also working on expanding managed care access to
Linzess and lowering the out-of-pocket cost borne by patients.
More that 70% of the patients who are covered by commercial
insurance plans and Medicare Part D patients have unrestricted
access to Linzess. Meanwhile, more than 70% have tier II ($30
co-pay) access as of Mar 2014.
Meanwhile, EU partner Almirall has launched the product in 10
European countries including the U.K., Germany and Italy. More
launches are expected in 2014. However, Almirall has recently
announced its decision to discontinue commercialization of
Constella in Germany from May 2014. The company has taken this
decision after it was unable to reach an agreement with the
German National Association of Statutory Health Insurance Funds
regarding a reimbursement price for Constella.
Linzess is well protected by patents and is unlikely to face
generic competition before 2026. Ironwood and Forest are working
to strengthen the patent further. The companies received Notices
of Allowance from the U.S. Patent and Trademark Office (USPTO)
related to two Linzess patents which can extend Linzess' patent
protection by five years (till 2031). The patents are expected to
be issued in mid 2014.
Ironwood is looking to broaden Linzess' label by expanding the
targeted patient population and gaining approval for additional
indications including opioid-induced constipation, pediatrics and
prevention of colon cancer.
Some other interesting pipeline candidates include IW-9179 (phase
IIa-functional dyspepsia ongoing, phase IIa - gastroparesis to be
initiated in the first half of 2015, data expected in 2016) and
IW-3718 (phase IIa - refractory GERD ongoing, with data expected
in the first half of 2015).
During the first quarter of 2014, selling, general and
administrative (SG&A) expenses fell 10.3% to $29.9 million.
Research and development (R&D) expenses amounted to $27.1
million, down 17.1%.
2014 Guidance Maintained
For 2014, Ironwood continues to expect operating expenses in the
range of $215 million to $245 million (R&D expenses of $105
million to $120 million and SG&A expenses of $110 million to
$125 million). Linzess-development related expenses are expected
to be approximately 55% of total R&D spend.
For 2014, Ironwood expects total investment (including Forest
Labs' share) in sales and marketing for Linzess in the $240
million to $270 million range.
We are pleased with Linzess' uptake rates and believe that it has
the potential to be a blockbuster product in the long run.
Narrower-than-expected loss and above expectation revenues
reported in the first quarter are also encouraging.
Ironwood carries a Zacks Rank #2 (Buy). Other well-ranked stocks
in the health care sector include
OncoGenex Pharmaceuticals, Inc.
). Both carry the same rank as Ironwood.
ALLERGAN INC (AGN): Free Stock Analysis
FOREST LABS A (FRX): Free Stock Analysis
IRONWOOD PHARMA (IRWD): Free Stock Analysis
ONCOGENEX PHARM (OGXI): Free Stock Analysis
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