Ironwood Pharmaceuticals, Inc.
) first-quarter 2013 loss of 87 cents per share compared
unfavorably with the year-ago loss of 34 cents per share. Results
were primarily hurt by higher selling, general and administrative
(SG&A) and collaboration expense. The Zacks Consensus
Estimate hinted at a loss of 70 cents per share.
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Total revenues in the first quarter of 2013 were down to $3.3
million from $12.2 million in the year-ago period. Revenues were
below the Zacks Consensus Estimate of $6 million.
We note that Ironwood's sole marketed product is Linzess
(linaclotide). It is marketed for the treatment (once-daily) of
adults suffering from irritable bowel syndrome with constipation
(IBS-C) or chronic idiopathic constipation (CIC). Ironwood
co-markets the drug with
Forest Laboratories, Inc.
). Forest Labs and Ironwood share Linzess revenues generated in
the US equally. Net sales of the drug, as reported by Forest Labs
came in at $4.5 million in the first quarter of 2013 as compared
to $19.2 million in the last quarter. We note that in the final
quarter of 2012 Linzess sales primarily consisted of initial
We remind investors that on Dec 17, 2012, the companies announced
the US launch of Linzess. The launch followed the approval of the
drug by the US Food and Drug Administration (FDA) in Aug 2012.
In the EU, approval came in Nov 2012 under the trade name
Constella. Ironwood is collaborating with Almirall, S.A. in EU
for the drug. The product is expected to be launched in the UK
and Germany by Jun 30, 2013.
Ironwood is also working with its Japanese partner, Astellas
Pharma Inc. for the development of Linzess in Japan, South Korea,
Taiwan, Thailand, the Philippines and Indonesia and with
) in China. Currently, Astellas is evaluating it in a phase II
trial for IBS-C with results expected in the second half of 2013.
Ironwood and AstraZeneca expect to initiate a phase III trial
evaluating linaclotide in adult IBS-C patients in the second half
The company is looking to broaden the Linzess label by
incorporating additional patient populations and indications. To
further analyze the effect of Linzess on abdominal symptoms in
patients suffering from CIC, Forest Labs and Ironwood have
initiated a phase IIIb clinical trial. Results from the trial are
expected in the second half of 2013. Ironwood plans to initiate
additional trials to evaluate Linzess for additional
During the quarter, SG&A expenses surged 104.5% to $33.4
million. The massive increase was primarily attributable to
Linzess commercialization costs. For 2013, Ironwood continues to
expect total investment in sales and marketing for Linzess in the
range of $250 - $300 million.
Research and development (R&D) expenses amounted to $32.8
million, an increase of 11%, as the company continues to develop
Linzess. In 2013, Ironwood expects to invest approximately
$60-$75 million in R&D expenses not pertaining to
Ironwood carries a Zacks Rank #3 (Hold) in the short run. We
expect investor focus to remain on the market performance of
Linzess. Stocks, which currently look attractive in the pharma
), carrying a Zacks Rank #1 (Strong Buy).