Ironwood (IRWD) Q4 Earnings Miss, Revenues Beat Marginally
Ironwood Pharmaceuticals, Inc. IRWD reported break-even quarterly earnings for fourth-quarter 2023 against the Zacks Consensus Estimate of 20 cents per share. The company had recorded adjusted earnings of 27 cents per share in the year-ago quarter.
Total revenues in the reported quarter were $117.6 million, which marginally beat the Zacks Consensus Estimate of $116.6 million. The top line also increased almost 9.6% year over year.
Quarter in Detail
As reported by partner AbbVie Inc. ABBV, Ironwood’s sole marketed product — Linzess (linaclotide) — generated net sales of almost $274.4 million in the United States, up 5% year over year, driven by prescription growth. Total prescriptions for Linzess increased 10% 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 $114 million, up 9% year over year.
Linzess’ collaborative revenues from U.S. sales beat our model estimate of $112.6 million.
ABBV received FDA approval for the expanded use of Linzess for treating functional constipation in pediatric patients aged 6-17 years in June 2023. Following this nod, Linzess became the first and only FDA-approved prescription therapy for functional constipation in pediatric patients.
Ironwood has agreements with two partners — Astellas Pharma and AstraZeneca AZN — related to the development and commercialization of Linzess in Japan and China, respectively.
Both 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 $3.6 million in royalties and other revenues, up 50% from the prior-year quarter’s figure.
As of Dec 31, 2023, Ironwood had cash and cash equivalents worth $92.2 million compared with $110.2 million as of Sep 30, 2023.
Shares of Ironwood have rallied 26.5% in the past year against the industry’s decline of 5.6%.
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Full-Year Results
For 2023, Ironwood generated revenues of $442.7 million, up 7.8% year over year.
For the same period, the company reported a loss of $6.27 per share against earnings of 96 cents per share in 2022.
2024 Guidance
Ironwood expects total revenues in the range of $435-$455 million for 2024. The company anticipates U.S. sales of Linzess to grow in low-single digits.
IRWD expects to deliver adjusted EBITDA of greater than $150 million for the year.
Pipeline Updates
With the acquisition of VectivBio in June, Ironwood acquired the rights to develop and commercialize apraglutide. The candidate is being evaluated in the phase III STARS study for treating short-bowel syndrome patients with intestinal failure. Top-line data from the same is expected in March 2024.
Apraglutide is also being evaluated in a phase II exploratory study, STARGAZE, for patients with steroid-refractory gastrointestinal acute Graft versus Host Disease. Data from the study is anticipated by the first quarter of 2024.
Ironwood is developing two other pipeline candidates, IW-3300 and CNP-104.
A phase II proof-of-concept study is evaluating IW-3300 for the potential treatment of visceral pain conditions, such as interstitial cystitis/bladder pain syndrome and endometriosis.
Meanwhile, Ironwood, in collaboration with COUR Pharmaceuticals, is developing CNP-104 for treating primary biliary cholangitis (PBC). A clinical study is being conducted by COUR Pharmaceuticals to evaluate the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients. Top-line data from the same is expected in the third quarter of 2024.
Zacks Rank & Stocks to Consider
Ironwood currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the healthcare sector is Exact Sciences Corp. EXAS, sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Exact Sciences’ 2024 loss per share have narrowed from $1.22 to $1.15. In the past year, shares of EXAS have lost 3.8%.
Exact Sciences’ earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 44.21%.
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