Ironwood Pharmaceuticals, Inc. IRWD reported adjusted earnings of 2 cents per share for the third quarter of 2024, missing the Zacks Consensus Estimate of 9 cents. The company had recorded adjusted earnings of 12 cents per share in the year-ago quarter.
Total revenues in the third quarter were $91.6 million, which beat the Zacks Consensus Estimate of $89 million. However, the top line decreased almost 19.4% year over year due to the decrease in collaborative arrangements revenues related to its sole marketed drug, Linzess (linaclotide).
Shares of Ironwood were down 7.5% on Nov. 7 following the announcement of the earnings.
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More on IRWD's Q3 Results
As reported by partner AbbVie ABBV, Ironwood’s marketed product — Linzess — generated net sales of $225.5 million in the United States, down 19% year over year, due to continued pricing pressure. However, total prescriptions for Linzess increased 13% year over year.
Ironwood and AbbVie equally share Linzess’ brand collaboration profits and losses.
IRWD’s share of net profit from the sales of Linzess in the United States (included in collaborative revenues) totaled $88.9 million, declining almost 19.3% year over year.
Shares of Ironwood have plunged 59.2% year to date compared with the industry’s decline of 3.3%.
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Ironwood has agreements with two partners — Astellas Pharma and AstraZeneca AZN — related to the development and commercialization of Linzess in Japan and China, respectively.
Astellas and AstraZeneca have exclusive rights to develop and market the drug in their respective territories. Astellas and AZN are liable to pay royalties to Ironwood on net Linzess revenues earned in their regions.
Ironwood recorded $2.7 million in royalties and other revenues in the third quarter, down 25% from the prior-year quarter’s figure.
Total cost and expenses (including research and development expenses, selling, general and administrative expenses and restructuring expenses) in the third quarter were $66 million, down 10.4% from the year-ago quarter.
Adjusted EBITDA in the third quarter was $26.2 million, down 46.6% from the year-ago quarter.
As of Sept 30, 2024, Ironwood had cash and cash equivalents worth $88.2 million compared with $105.5 million as of June 30, 2024.
2024 Guidance
Ironwood reiterated its revenue guidance for 2024 provided earlier this year.
The company continues to expect total revenues in the range of $350-$375 million for 2024.
U.S. sales of Linzess are expected in the range of $900-$950 million, unchanged from the previous expectation.
The company expects to deliver adjusted EBITDA of more than $75 million in 2024.
IRWD's Recent Pipeline Updates
Ironwood is advancing a next-generation GLP-2 analog for reducing parenteral support (PS) dependency in adult patients with short bowel syndrome with intestinal failure (SBS-IF).
Ironwood plans to complete a new drug application filing for apraglutide to the FDA for the treatment of adult patients with SBS who are dependent on PS in the first quarter of 2025.
Ironwood acquired the rights to develop and commercialize apraglutide following the acquisition of VectivBio in June 2023.
Ironwood is developing two other pipeline candidates, IW-3300 and CNP-104.
Along with the earnings release, Ironwood announced that it has decided to stop further recruitment of patients in the phase II proof-of-concept study, which is evaluating IW-3300 for the potential treatment of visceral pain conditions, such as interstitial cystitis/bladder pain syndrome and endometriosis.
IRWD will analyze the data once all currently enrolled patients in the above mentioned study complete the full 12-week study assessment. An update on the same is expected in the first half of 2025.
Ironwood, in collaboration with COUR Pharmaceuticals, was developing CNP-104 for treating primary biliary cholangitis (PBC).
Along with the earnings release, the company announced that in September 2024, it decided not to exercise the option to acquire an exclusive license to CNP-104.
Following this, the collaboration and license option agreement between Ironwood and COUR was terminated. The company has no rights and obligations related to CNP-104 going forward.
This might have hurt investors’ sentiments and resulted in the stock decline on Nov. 7.
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Ironwood Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Ironwood Pharmaceuticals, Inc. Quote
IRWD's Zacks Rank & Key Pick
Ironwood currently carries a Zacks Rank #5 (Strong Sell).
A better-ranked stock in the biotech sector is Lisata Therapeutics, Inc. LSTA, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, estimates for Lisata Therapeutics’ 2024 loss per share have narrowed from $2.97 to $2.90. Loss per share estimates for 2025 have narrowed from $2.61 to $2.53 during the same time. Year to date, shares of LSTA have risen 6.6%.
LSTA’s earnings beat estimates in each of the trailing four quarters, the average surprise being 20.75%.
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