Ironwood Pharmaceuticals, Inc.
) second-quarter 2013 loss of 57 cents per share compared
unfavorably with the year-ago loss of 38 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 71 cents per share.
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Total revenues in the second quarter of 2013 were down to $9.7
million from $14.6 million in the year-ago period. Revenues were
above the Zacks Consensus Estimate of $8 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 U.S. equally. Net sales of the drug, as reported by Forest
Labs, came in at $28.8 million in the second quarter of 2013 as
compared to $4.5 million in the previous quarter.
We remind investors that on Dec 17, 2012, the companies announced
the U.S. launch of Linzess. The launch followed the approval of
the drug by the U.S. Food and Drug Administration (FDA) in Aug
The companies are 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 Pharma have
initiated a phase IIIb clinical trial. Results from the trial are
expected in the third quarter of 2013. Forest Labs and Ironwood
plan to evaluate the use of Linzess in the pediatric population
and in opioid-induced constipation patients in the first half of
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 now available in Germany, the UK and
the Nordic countries and is expected to be launched across Europe
in 2013 and 2014.
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 this year. Ironwood and
AstraZeneca expect to start enrollment 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 second quarter of 2013, SG&A expenses surged 53.6%
to $30.9 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 $24.1
million, a decrease of 25.3%. In 2013, Ironwood continues to
expect to invest approximately $60-$75 million in R&D
expenses not pertaining to linaclotide.
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
Cadence Pharmaceuticals Inc.
), carrying a Zacks Rank #1 (Strong Buy).