Update on Ironwood Pharma - Analyst Blog

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Updates on products and pipeline candidates are highly-awaited events in the pharma/biotech sector as these provide investors information on the current status, efficacy and safety profile of a candidate. These updates play a crucial role in determining whether a firm is worth investing in or not. Sometimes, companies host Investor Days to present such information.

Ironwood Pharmaceuticals, Inc. ( IRWD ) hosted its Investor Day a few days back to discuss its strategy. The company intends to work on maximizing revenues from its sole marketed drug, Linzess (linaclotide). Meanwhile, Ironwood is also focused on advancing its pipeline.

Linzess Performance

Linzess (EU trade name: Constella) was launched in Dec 2012 in collaboration with Forest Laboratories, Inc. ( FRX ) for patients suffering from irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC).

Forest Labs and Ironwood share Linzess revenues generated in the U.S. equally. Net sales of the drug, as reported by Forest Labs, were $34.4 million in the third quarter of 2013 compared to $28.8 million in the preceding quarter.

According to IMS Health data, prescriptions filled till Nov 2013 were more than 500,000 with at least 190,000 being unique patients. As of Oct 2013, 75% of the Linzess claims were reimbursed.

Initiative to Drive Linzess Sales

Ironwood is focusing on promoting the product by improving the marketing mix and stepping up the direct-to-consumer campaign from the first half of 2014. The company also plans to increase the efficiency of the sales force by focusing on the highest prescribing physicians. To lower the out-of-pocket cost borne by patients, the company is looking to improve the reimbursement rates further and aims to achieve more than an 80% rate of payment for Linzess claims.

Ironwood along with Forest Labs is looking to broaden Linzess' label by expanding the targeted patient population and gaining approval for additional indications. The companies intend to evaluate Linzess in pediatric patients and for opioid-induced constipation (phase II study expected to be initiated in the first half of 2014). The drug is also being evaluated for the prevention of colorectal cancer (phase I biomarker study ongoing).

In the second half of 2014, the companies plan to initiate a co-administration study of Linzess and a proton pump inhibitor and investigate a fixed-dose combination for symptoms of gastroesophageal reflux disease (GERD) and IBS-C or CIC.

The companies also plan to initiate a phase II trial in mid-2015 to evaluate the targeted delivery of Linzess to the distal small intestine and colon for abdominal symptoms in patients with IBS-C, CIC or other gastrointestinal (GI) disorders (including ulcerative colitis and diverticulitis).

Other Pipeline Candidates

Ironwood aims to advance seven GI candidates with proof-of-concept data expected in the next two years. Some of the 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 to be initiated in the first half of 2014, with data expected in the first half of 2015).

Guidance

For 2014, Ironwood expects total investment in sales and marketing for Linzess at the $250-$300 million range. The company is also working on reducing the net cash used in operating activities through revenue growth and cost control.

Ironwood carries a Zacks Rank #3 (Hold). We expect investor focus to remain on the market performance of Linzess, which has blockbuster potential. Some better-ranked stocks include Actelion Ltd. ( ALIOF ) and Jazz Pharmaceuticals ( JAZZ ). Both carry a Zacks Rank #1 (Strong Buy).



ACTELION LTD (ALIOF): Get Free Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ALIOF , FRX , IRWD , JAZZ

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