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Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD) today provided an update on its fourth quarter 2013 and recent business activities.
“2013 was a transformational year for Ironwood. LINZESS had a strong first full year in the market with greater than 200,000 unique adult patients filling a LINZESS prescription, more than 580,000 total prescriptions filled, over 50,000 healthcare practitioners gaining experience with LINZESS, approximately $119 million of net product sales for 2013 and approximately $138 million of net product sales since LINZESS launched in December 2012,” said Peter Hecht, chief executive officer of Ironwood. “We are executing on our strategy to grow a leading GI therapeutics company by building on the success of LINZESS, leveraging our commercial capabilities and advancing a pipeline of multiple GI and guanylate cyclase programs. Through the prudent and efficient allocation of our capital across these priority growth platforms, we are working to maximize value for patients and for our fellow shareholders.”
Fourth Quarter 2013 and Recent HighlightsLINZESS® (linaclotide)
LINZESS net product sales, as reported by Forest Laboratories, Inc., were $51.0 million in the fourth quarter of 2013, an increase of approximately 48% quarter over quarter, and $118.8 million for the year ended December 31, 2013.
More than 220,000 LINZESS prescriptions were filled in the fourth quarter of 2013, resulting in more than 24% growth in total prescriptions quarter over quarter, and over 580,000 LINZESS prescriptions were filled in 2013, according to IMS Health.
In 2013, more than 50,000 healthcare practitioners prescribed LINZESS, including approximately 90% of high prescribing gastroenterologists and approximately 70% of other high prescribing healthcare practitioners, primarily primary care physicians. Physician prescribing continues to increase month over month.
As of December 2013, approximately 75% of adult irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC) patients with commercial insurance had unrestricted access to LINZESS and approximately 80% of adult patients with commercial insurance had access to LINZESS at a copay of $30 per month or less through formulary coverage or the LINZESS Instant Savings Program.
Ironwood and Forest continue to explore opportunities to enhance the clinical profile of LINZESS by seeking to expand its utility in its indicated populations, as well as studying linaclotide in additional indications and populations, new formulations and in combination with other products to assess its potential to treat various gastrointestinal (GI) conditions.
Linaclotide (Rest of World)
Almirall, S.A., Ironwood’s European partner, continues to launch CONSTELLA ® (linaclotide) in Europe. CONSTELLA is currently available to adult IBS-C patients in nine countries in Europe, including the United Kingdom and Germany.
Ironwood and AstraZeneca AB continue to enroll 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. has completed enrollment in a Phase II double-blind, placebo-controlled, dose-ranging clinical trial of linaclotide in adult patients with IBS-C in Japan.
Research & Development
Ironwood is leveraging its strong therapeutic expertise in GI disorders to advance up to seven GI development programs with multiple opportunities to generate proof of concept data over the next 24 months.
Building on its pioneering research with linaclotide, guanylate cyclase-C (GC-C) and other guanylate cyclases, Ironwood is also advancing a second GC program targeting soluble guanylate cyclase (sGC), a validated mechanism with the potential for broad therapeutic utility and multiple opportunities for product development.
Corporate and Financials
Total Revenues. Revenues were approximately $5.0 million in the fourth quarter of 2013. This consisted of $2.9 million in collaborative arrangements revenue associated with its share of the net profits and losses from the sales of LINZESS in the U.S., $0.5 million in sales of active pharmaceutical ingredient (API), $1.5 million in the amortization of deferred revenue associated with consideration received from Ironwood’s collaborations with Astellas and AstraZeneca, and $0.1 million in royalty payments based on sales of CONSTELLA in Europe from Almirall. For 2013, revenues were approximately $22.9 million. This consisted of $2.9 million in collaborative arrangements revenue associated with its share of the net profits and losses from the sales of LINZESS in the U.S., $12.2 million in sales of API, $5.7 million in the amortization of deferred revenue associated with consideration received from Ironwood’s collaborations with Astellas and AstraZeneca, $1.9 million in milestone payments from Almirall as a result of the commercial launches of CONSTELLA in the U.K. and Germany, and $0.2 million in royalty payments from Almirall.
Operating Expenses. Operating expenses were approximately $51.2 million in the fourth quarter of 2013. This consisted of $22.5 million in research and development (R&D) expenses, which included approximately $1.9 million in non-cash share-based compensation expense, and $28.7 million in selling, general and administrative (SG&A) expenses, which included approximately $2.6 million in non-cash share-based compensation expense. For 2013, operating expenses were approximately $225.6 million and consisted of $102.4 million in research and development expenses, which included approximately $9.2 million in non-cash share-based compensation expense, and $123.2 million in SG&A expenses, which included approximately $10.7 million in non-cash share-based compensation expense.
Collaborative Arrangements Revenue/Collaboration Expense. 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. For the fourth quarter of 2013, Ironwood recorded the settlement payment from Forest as collaborative arrangements revenue and no collaboration expense was recorded. For 2013, collaboration expense was $42.1 million.
Interest Expense. Interest expense was $5.3 million in the fourth quarter of 2013 in connection with the $175 million debt financing executed in January 2013. For 2013, interest expense was $21.0 million.
Net Loss. Net loss was $52.0 million, or $0.43 per share, in the fourth quarter of 2013. For 2013, net loss was $272.8 million, or $2.35 per share.
Cash Position. Ironwood ended 2013 with approximately $198 million of cash, cash equivalents and available-for-sale securities. Ironwood used approximately $42 million of net cash for operations during the quarter and approximately $273 million of net cash for operations during the year ended December 31, 2013.
2013 Financial Guidance. Ironwood provided financial guidance for its 2013 non-linaclotide R&D expenses to be in the range of $60 to $75 million. Total actual non-linaclotide R&D expenses in 2013 were $56.3 million. Additionally, Ironwood provided financial guidance for its 2013 marketing and sales expenses for LINZESS to be in the range of $250 to $300 million. Total actual 2013 marketing and sales expenses for LINZESS were $255.5 million.
2014 Financial Guidance. Ironwood expects its 2014 total operating expenses to be in the range of $215 to $245 million, consisting of $105 to $120 million in R&D expenses and $110 to $125 million in SG&A expenses. Non-linaclotide R&D expenses are expected to be approximately 45% of total R&D expenses. In addition, Ironwood today updated its financial guidance for the Forest and Ironwood total 2014 marketing and sales expenses for LINZESS, which it now expects to be in the range of $240 to $270 million.
Conference Call Information
Ironwood will host a conference call and webcast at 8:30 a.m. Eastern Time, on Tuesday, January 21, to discuss its fourth 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 30523527. 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 January 28, 2014. To listen to the replay, dial (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (international) using conference ID number 30523527. 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.