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Ironwood (IRWD) Q4 Earnings Miss, Linzess Volume Grows

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Ironwood Pharmaceuticals, Inc. IRWD reported fourth-quarter 2021 adjusted earnings of 27 cents per share, missing the Zacks Consensus Estimate of 31 cents. The company had reported adjusted earnings of 36 cents per share in the year-ago quarter.

Total revenues of $117.1 million beat the Zacks Consensus Estimate of $109.6 million. Revenues were almost flat year over year.

Shares of Ironwood were down 3.6% on Feb 17, following lower-than-expected earnings result. However, the company’s shares have gained 13.9% in the past year against the industry’s decrease of 31.8%.

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Zacks Investment Research


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Quarter in Detail

As reported by partner AbbVie ABBV, Ironwood’s sole marketed product — Linzess — generated net sales of almost $278.6 million in the United States, flat year over year. Ironwood and AbbVie equally share Linzess’ brand collaboration profits or losses. Prescription volume growth was driven by strong demand for Linzess, partially offset by lower net price of the drug and inventory channel fluctuations.

Ironwood's share of net profits from the sales of Linzess in the United States (included in collaborative revenues) was $113.7 million in the fourth quarter, up 2.7% year over year.

Per data provided by IQVIA, the prescription volume for Linzess capsules in the fourth quarter increased about 10% year over year.

The company recorded $3.4 million in royalties and other revenues compared with $6 million in the year-ago period.

We note that Ironwood has agreements with two partners — Astellas Pharma and AstraZeneca AZN — related to the development and commercialization of Linzess in Japan and China, respectively. Ironwood records royalties on sales of Linzess from Astellas and AstraZeneca in their respective territories.

Selling, general and administrative expenses were down 15.9% year over year to $28.6 million during the fourth quarter. Research & development expenses nearly doubled year over year to $31.9 million. The R&D expenses included a payment of 19.5 million related to collaboration and license option agreement with COUR Pharmaceutical for adding a new candidate to its pipeline.

Full-Year Results

Ironwood reported revenues of $413.8 billion, up 6.2% year over year. Sales were primarily driven by its share of the net profits of $400.4 million from the sales of Linzess in the United States. The drug’s total sales were $1 billion for the full year.

The company’s adjusted earnings for 2021 were $1.16 per share, up 46.8% from the year-ago period as margins improved with an efficient capital allocation strategy.

2022 Guidance

Ironwood maintained its previously issued guidance for 2022 The company expects Linzess sales as well as total revenue growth in 2022. The company expects its total revenues to be between $420 million and $430 million.It expects U.S. sales of Linzess to grow in low single-digit percentage points.

The company expects adjusted EBITDA to be more than $250 million for the year.

Pipeline Update

Ironwood initiated two early-stage studies recently to evaluate two pipeline candidates — IW-3300 and CNP-104 — for treating visceral pain conditions and primary biliary cholangitis, respectively.

In November, Ironwood signed an option agreement with privately-held COUR Pharmaceuticals Development Company to gain an exclusive license to COUR Pharmaceuticals’ products containing CNP-104 Particle.

Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

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

Ironwood Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Ironwood Pharmaceuticals, Inc. Quote

Zacks Rank

Currently, Ironwood carries a Zacks Rank #3 (Hold).

Collegium Pharmaceutical COLL is a better-ranked drug stock, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings per share estimates for Collegium have narrowed from $3.52 to $5.86 for 2022 in the past 30 days. Collegium’s shares have gained 15.2% so far this year. Collegium has a four-quarter average negative earnings surprise of 22.76%.


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