Ironwood Pharmaceuticals, Inc.
) reported a loss of 43 cents per share in the fourth quarter of
2013 compared to the year-ago loss of 41 cents per share. Despite
the company reporting lower costs in fourth quarter 2013, results
were primarily hurt by lower revenues.
The Zacks Consensus Estimate was a loss of 50 cents per share.
Investors reacted positively to the news with shares rising
Full year 2013 loss was $2.35 per share, wider than the year-ago
loss of 68 cents per share. However, loss was narrower than the
Zacks Consensus Estimate of a loss of $2.41 per share.
Revenues in 2013 fell 84.8% to $22.3 million. Revenues came in
below the Zacks Consensus Estimate of $25 million. 2013 and 2012
revenues included collaborative revenues of approximately $2.9
million and $84.4 million, respectively.
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
$51 million in the fourth quarter of 2013, up 48% sequentially.
Number of prescriptions filled increased 25% to 220,000 driven by
new patient addition and continued demand for Linzess. The
company is focusing on promoting the product to
gastroenterologists and primary care physicians. The company is
also working on expanding managed care access to Linzess and
lowering the out-of-pocket cost borne by patients.
Approximately 75% patients who are covered by commercial
insurance plans and approximately 50% Medicare Part D patients
have unrestricted access to Linzess, while approximately 80% have
tier II ($30 co-pay) access as of Dec 2013. Ironwood is focusing
on promoting the product by improving the marketing mix and will
step up the direct-to-consumer campaign from late Mar 2014.
ACTAVIS PLC (ACT): Free Stock Analysis Report
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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
potentially for the prevention of colon cancer.
Meanwhile, EU partner Almirall has launched the product in nine
European countries including the U.K. and Germany.
During the fourth quarter of 2013, selling, general and
administrative (SG&A) expenses fell 13.7% to $28.7 million.
Research and development (R&D) expenses amounted to $22.5
million, down 20.4%.
For 2014, Ironwood expects 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 (previous guidance: $250-$300
million). Ironwood is working on tightening costs. The company is
looking to reduce its workforce by approximately 10% during the
first quarter of 2014
We are pleased with Linzess uptake rates and believe that it has
the potential to be a blockbuster product in the long run. We are
also positive on the company's cost control efforts.
Ironwood carries a Zacks Rank #3 (Hold). Companies that currently
look attractive in the healthcare space include
). Both carry a Zacks Rank #1 (Strong Buy).