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Ironwood Pharmaceuticals Provides Third Quarter 2013 Investor Update

Stocks in this article: IRWD

Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) today provided an update on its third quarter 2013 and recent business activities.

“This quarter, we continued to make good progress across our key value drivers. LINZESS is performing well across the key leading indicators, reinforcing the significant opportunity we see ahead. Our scientists continue to advance the pharmacology of linaclotide and explore its utility more broadly while also progressing our broader pipeline, and our global partners are making important strides in bringing linaclotide to appropriate patients worldwide,” said Peter Hecht, chief executive officer of Ironwood Pharmaceuticals, Inc.

Third Quarter 2013 and Recent Highlights

LINZESS ® (linaclotide)

  • LINZESS net product sales, as reported by Forest Laboratories, Inc., were $34.4 million in the third quarter of 2013.
  • More than 178,000 LINZESS prescriptions were filled in the third quarter of 2013, resulting in more than 40% growth in total prescriptions compared to the previous quarter, and more than 539,000 LINZESS prescriptions have been filled since the launch of LINZESS on December 17, 2012, according to IMS Health.
  • To date, more than 80% of high prescribing gastroenterologists and more than 50% of high prescribing primary care physicians have prescribed LINZESS; approximately 1,000 physicians are writing their first LINZESS prescription each week.
  • As of September 2013, approximately 80% of adult irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC) patients with commercial insurance had unrestricted access to LINZESS and greater than 60% of adult patients with commercial insurance have access to LINZESS at a copay of $30 per month or less through formulary coverage or the LINZESS Instant Savings Program.
  • Ironwood received positive top-line data from a Phase IIIb clinical trial conducted with Forest to evaluate the effect of LINZESS on abdominal symptoms in patients with CIC and prominent abdominal bloating. The average bloating score reported by these patients at baseline was 7.1 on a 0 to 10 point scale. Data from the clinical trial demonstrated that LINZESS dosed at 145 mcg in adult CIC patients resulted in a statistically significant increase in bowel movements, achieving the trial’s primary endpoint. Data from the trial also indicate that all 27 pre-specified secondary endpoints, including a statistically significant reduction in abdominal bloating relative to baseline in adult patients suffering from CIC, were achieved. Diarrhea was the most commonly reported adverse reaction reported in the study. Data showed a diarrhea rate of 5.9% and 16.9% in patients treated with LINZESS at the 145 mcg and 290 mcg doses, respectively, versus 2.3% in placebo-treated patients, and a 1.3% and 5.0% discontinuation rate due to diarrhea in patients treated with LINZESS at the 145 mcg and 290 mcg dose, respectively, versus 0.6% in placebo-treated patients.
  • Ironwood and Forest continue to explore additional development opportunities to work with the FDA to strengthen the clinical profile of LINZESS within its indicated population and to expand the product label for additional approved patient populations and indications, as well as to explore the potential for linaclotide-based combination products. The companies expect to initiate a Phase IIa clinical trial of LINZESS in adult patients with opioid-induced constipation during the first half of 2014, and to continue working with the FDA to establish an appropriate plan to study LINZESS in the pediatric population.

Linaclotide (Rest of World)

  • CONSTELLA ® (linaclotide) is currently available to adult IBS-C patients in multiple countries in Europe, and Ironwood’s European partner, Almirall, S.A., will continue to launch CONSTELLA in additional European countries.
  • Ironwood and AstraZeneca AB began enrolling patients in a Phase III clinical trial of linaclotide in adult patients with IBS-C in China. The trial is expected to be completed in the first half of 2015.
  • Astellas Pharma Inc. completed enrollment in a double-blind, placebo-controlled, dose-ranging Phase II clinical trial of linaclotide in adult patients with IBS-C in Japan.

Research & Development

  • In addition to exploring additional linaclotide development opportunities, Ironwood is leveraging its pioneering understanding of linaclotide’s pharmacology and mechanism of action, guanylate cyclase-C (GC-C) agonists, cyclic GMP, and symptomatic diseases to advance other programs in its pipeline, which include early development candidates and discovery research efforts focused on gastrointestinal disease, central nervous system disorders, allergic conditions and cardiovascular disease.

Corporate and Financials

  • Total Revenues. Revenues were approximately $4.9 million in the third quarter of 2013. This consisted of $3.4 million in sales of active pharmaceutical ingredient (API) and $1.5 million in the amortization of deferred revenue associated with consideration received from Ironwood’s collaborations with Astellas and AstraZeneca. LINZESS net product sales are recorded by Forest and are not included in Ironwood’s total revenues (refer to the LINZESS U.S. Collaboration Expense Calculation at the end of this press release).
  • Operating Expenses. Operating expenses were approximately $53.3 million in the third quarter of 2013. This consisted of $23.0 million of research and development expenses, which included approximately $2.3 million in non-cash share-based compensation expense, and $30.3 million of selling, general and administrative expenses, which included approximately $2.9 million of non-cash share-based compensation expense.
  • Collaboration Expense. Ironwood reported $6.2 million in collaboration expense in the third quarter of 2013. Ironwood records its share of the net profits and losses from the sales of LINZESS in the U.S. on a net basis and presents the settlement payments as collaborative arrangements revenue or collaboration expense, as applicable.
  • Interest Expense. Interest expense was $5.3 million in the third quarter of 2013 in connection with the $175 million debt financing executed in January 2013.
  • Net Loss. Ironwood reported a net loss of $61.8 million, or $0.51 per share, in the third quarter of 2013.
  • Cash Position. Ironwood ended the third quarter of 2013 with approximately $242 million of cash, cash equivalents and available-for-sale securities. Ironwood used approximately $58 million of net cash for operations during the quarter.
  • Financial Guidance. Ironwood today reiterated its financial guidance for the Forest and Ironwood total 2013 sales and marketing expense for LINZESS to be in the range of $250 to $300 million. Ironwood also reiterated its guidance for its 2013 non-linaclotide research and development expense to be in the range of $60 to $75 million.
  • Ironwood will host an Investor Day on December 12, 2013 to further discuss its corporate strategy, including an update on the commercialization of LINZESS, a discussion around linaclotide opportunities in additional populations and indications, and its overall R&D efforts.

Conference Call Information

Ironwood will host a conference call and webcast at 8:30 a.m. Eastern Time, on Tuesday, October 22, to discuss its third quarter 2013 and recent business activities. Individuals interested in participating in the call should dial (877) 643-7155 (U.S. and Canada) or (914) 495-8552 (international) using conference ID number 75229614. To access the webcast, please visit the Investors section of Ironwood’s website at www.ironwoodpharma.com at least 15 minutes prior to the start of the call to ensure adequate time for any software downloads that may be required. The call will be available for replay via telephone starting today at approximately 11:30 a.m. Eastern Time, running through 11:59 p.m. Eastern Time on October 29, 2013. To listen to the replay, dial (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (international) using conference ID number 75229614. The archived webcast will be available on Ironwood’s website for 14 days beginning approximately one hour after the call has completed.

About LINZESS (linaclotide)

LINZESS is the first and only guanylate cyclase-C (GC-C) agonist approved by the FDA for the treatment of both irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC) in adults. LINZESS is a once-daily capsule that helps relieve the abdominal pain and constipation associated with IBS-C, as well as the constipation, infrequent stools, hard stools and incomplete evacuation associated with CIC. The recommended dose is 290 mcg for IBS-C patients and 145 mcg for CIC patients. LINZESS should be taken at least 30 minutes before the first meal of the day.

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