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Ironwood (IRWD) Beats Estimates in Q3 Earnings, Stock Up

Zacks Equity Research

Ironwood Pharmaceuticals, Inc. IRWD reported third-quarter 2017 adjusted loss of 18 cents per share, narrower than the Zacks Consensus Estimate of a loss of 23 cents and  flat year over year.

Total revenues (collaborative revenues) in the quarter amounted to $86.8 million, up 31.3% from the year-ago period and beat the Zacks Consensus Estimate of $68.5 million.

Ironwood’s shares gained 2.09% on Nov 2. In fact, a look at the company’s share price movement shows that the stock has underperformed the industry this year so far. Ironwood’s shares have lost 0.8% during this period, while the industry registered a decrease of 0.2%.

The Quarter in Detail

As reported by partner Allergan plc AGN, Ironwood’s key marketed product – Linzess – generated U.S. net sales of $190.9 million, up 16% year over year.

Please note that Ironwood and Allergan have an equal share in brand collaboration profits or losses. Ironwood's share of the net profits from the sales of Linzess in the United States (included in collaborative revenues) was $63.4 million in the third quarter, up 26.6% year over year.

According to data provided by IMS Health, Linzess prescriptions filled during the quarter were more than 780,000, up 13% from the year-ago period.

During the reported quarter, selling and administrative (SG&A) expenses increased 37.3% to $61.8 million. Research and development (R&D) expenses were $37.1 million, down 1.2% from the year-ago period.

Zurampic, approved for uncontrolled gout, generated sales of $0.7 million in the quarter. Zurampic prescriptions filled during the quarter were 2066, higher than 1500 prescriptions filled in the previous quarter.

In August, the FDA approved Duzallo as an oral treatment for hyperuricemia associated with gout in patients. The drug was launched in October. With this approval, Duzallo became the first dual-mechanism treatment for patients with uncontrolled gout.

Pipeline Updates

Linzess is currently approved in the United States for the treatment of adults with irritable bowel syndrome with constipation (IBS-C; 290 mcg) and chronic idiopathic constipation (CIC; 145 mcg & 72 mcg). Ironwood and Allergan are looking to broaden Linzess’ label into additional symptoms and develop the drug as non-opioid, pain-relieving agent in IBS patients. A phase III study to evaluate Linzess in additional symptoms is expected to start in 2018.

The company is planning to advance delayed release-2 formulations of Linzess and will stop the development of delayed release-1.

Ironwood’s partner in Japan, Astellas Pharma submitted a supplemental new drug application Japan in September for label expansion of Linzess in chronic constipation. In China, Hong Kong and Macau, Ironwood has an agreement with AstraZeneca plc AZN for Linzess. The regulatory filing is under review in China for IBS-C. The company expects the review to be completed in the first quarter of 2018.

In July, Ironwood reported positive data on IW-3718 from a phase IIb study conducted in patients with uncontrolled GERD. The study met its primary endpoint. The results demonstrated that an oral dose of IW-3718 (1500 mg) administered twice daily in combination with a proton pump inhibitor (“PPI”) significantly reduced heartburn severity in patients when compared to PPI alone.

The company is also developing two candidates – IW-1973 and IW-1701 – for diabetic nephropathy and sickle cell disease, respectively.

2017 Guidance

The company expects to use less than $110 million for operations in 2017 (previously $100 million). The company, however, maintained its R&D expenses and SG&A expenses guidance for 2017 in the range of $145-$160 million and $235-$250 million, respectively.

Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise


Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Ironwood Pharmaceuticals, Inc. Quote

Zacks Rank & Stock To Consider

Ironwood currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the pharma sector is Agenus Inc. AGEN, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Agenus’ loss estimates remained stable at $1.17 for 2017 and narrowed from $1.40 to $1.36 for 2018 over the last 30 days. The company delivered positive earnings surprise in three of the trailing four quarters with an average beat of 4.27%.

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