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Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD) today provided an update on its first quarter 2014 and recent business activities.
“During the first fifteen months of the LINZESS launch, we have established a strong foundation of physician experience and payer coverage for LINZESS. Now, while we continue advancing with prescribers and payers, we are intensifying our efforts to educate appropriate patients about LINZESS through a multi-channel, direct-to-consumer patient awareness campaign,” said Peter Hecht, chief executive officer of Ironwood. “With commercial momentum, significant progress in our R&D pipeline and the close of a $190 million equity offering, Ironwood continues to grow into a leader in gastrointestinal therapeutics as we work to maximize value for patients, health care providers and our fellow shareholders.”
First Quarter 2014 and Recent HighlightsLINZESS® (linaclotide)
LINZESS net product sales, as reported by Forest Laboratories, Inc., were $60.8 million in the first quarter of 2014, an increase of approximately 19% quarter over quarter.
Nearly 240,000 LINZESS prescriptions were filled in the first quarter of 2014, according to IMS Health, resulting in approximately 11% growth in total prescriptions quarter over quarter. More than 800,000 LINZESS prescriptions have been filled by more than 260,000 unique adult patients since the product’s launch in December 2012, according to IMS Health.
The total number of unique healthcare practitioners prescribing LINZESS since launch reached more than 63,000 in the first quarter of 2014, according to IMS Health. This includes approximately 92% of high prescribing gastroenterologists and approximately 76% of other high prescribing healthcare practitioners, mostly primary care physicians.
More than 70% of people with commercial insurance and Medicare Part D plans had unrestricted access to LINZESS as of March 2014. Additionally, in March 2014, more than 70% of people with commercial insurance had a copay of $30 or less, through formulary coverage or the LINZESS Instant Savings Program.
Ironwood and Forest launched a DTC patient awareness campaign for LINZESS designed to help adults suffering from IBS-C or CIC recognize the symptoms of these disorders, describe their symptoms to their doctor, and ask their doctor about LINZESS to help proactively manage their disease. The extensive multi-channel campaign includes television, print and online advertising; social media elements; an updated brand website ( www.linzess.com); brochures in doctors’ offices and pharmacies; and a waiting room TV program.
Ironwood and Forest received Notices of Allowance from the United States Patent and Trademark Office (USPTO) for two separate patent applications covering the commercial formulation of LINZESS and methods of using the product to treat patients with IBS-C or CIC. Both of these patent applications are expected to issue in mid-2014 and extend LINZESS patent protection by an additional five years into 2031. In addition, Ironwood was successful in defending a separate linaclotide patent that was subject to an inter partes reexamination. The USPTO confirmed that all claims in the patent are patentable, concluding the review in Ironwood’s favor and affirming the strength of Ironwood’s intellectual property around LINZESS.
Linaclotide (Rest of World)
Almirall, S.A., Ironwood’s European partner, continues to commercialize CONSTELLA® (linaclotide) in Europe, where it is the first and only prescription product approved by the European Medicines Agency for the symptomatic treatment of moderate to severe IBS-C in adult patients. CONSTELLA has been approved for adult patients with moderate to severe IBS-C and has been launched in 10 countries in Europe, including the United Kingdom, Germany and most recently Italy, with additional country launches expected in 2014. Almirall recently announced that it intends to suspend commercialization of CONSTELLA in Germany in May 2014, following an inability to reach agreement with the German National Association of Statutory Health Insurance Funds on a reimbursement price that reflects the innovation and value of CONSTELLA. Almirall is assessing all possibilities to facilitate continued access to CONSTELLA for appropriate patients in Germany.
Forest received marketing approval for linaclotide in Canada and Mexico; launches in both countries are expected in mid-2014. Forest has the rights to commercialize CONSTELLA in Canada and, through a sublicense from Forest, Almirall has the rights to commercialize LINZESS in Mexico.
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. completed a Phase II double-blind, placebo-controlled, dose-ranging clinical trial of linaclotide in adult patients with IBS-C in Japan. Preliminary top level data from Astellas indicate higher responder rates for all linaclotide dose groups versus placebo in the primary endpoint, although the difference was not statistically significant. Linaclotide was well tolerated in all dose groups within this study.
Research & Development
Ironwood continues to explore opportunities to evaluate linaclotide in additional indications such as opioid-induced constipation, colorectal cancer prevention, and pediatrics, as well as in combination with a proton pump inhibitor and in a colonic delivery formulation. Ironwood also is leveraging its gastrointestinal and guanylate cyclase expertise to advance a robust pipeline of additional potential product candidates, including IW‐3718 which is being studied for refractory GERD, IW-9179 which is being studied for functional dyspepsia (FD) and gastroparesis, and a soluble guanylate cyclase (sGC) program. Research and development highlights for the quarter include:
Ironwood initiated dosing of its investigational bile acid sequestrant, IW‐3718, in a Phase IIa clinical study for patients with GERD symptoms who have not responded adequately to treatment with a proton pump inhibitor. Data from this trial are expected in the first half of 2015.
Ironwood ended its exploratory Phase IIa study of IW-9179 in FD prior to completing enrollment, due to challenges with the rigorous enrollment exclusion criteria in the trial. Data analysis is ongoing but preliminary data support continued development. Ironwood continues to define a path forward for IW-9179 in FD. In parallel, Ironwood plans to initiate a Phase IIa clinical trial of IW-9179 in patients with gastroparesis in the first half of 2015.
Ironwood identified a development candidate in its sGC program, which targets a proven mechanism for treating pulmonary arterial hypertension (PAH) and other cardiovascular diseases with the potential for broad therapeutic utility both inside and outside of the CV therapeutic category. Preclinical development is ongoing.
Corporate and Financials
Collaborative Arrangements Revenue. Collaborative arrangements revenue was approximately $14.6 million in the first quarter of 2014 compared with approximately $5.0 million in the fourth quarter of 2013. The collaborative arrangements revenue consisted of $8.4 million in revenue associated with Ironwood’s share of the net profits and losses from the sales of LINZESS in the U.S., as well as $6.2 million in sales of linaclotide active pharmaceutical ingredient (API), amortization of deferred revenue associated with consideration received from Ironwood’s collaboration with Astellas, revenue recognized under the collaboration with AstraZeneca, and milestone and royalty payments based on sales of CONSTELLA in Europe from Almirall.
Operating Expenses. Operating expenses were approximately $57.1 million in the first quarter of 2014, including non-reoccurring charges totaling $4.3 million associated with Ironwood’s headcount reduction in January 2014, as compared to approximately $51.2 million in the fourth quarter of 2013. Operating expenses consisted of approximately $27.1 million in research and development (R&D) expenses, which included $2.7 million in non-cash share-based compensation expense, and approximately $30.0 million in selling, general and administrative (SG&A) expenses, which included $3.4 million in non-cash share-based compensation expense.
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 from and to Forest as collaborative arrangements revenue or collaboration expense, respectively. In the first quarter of 2014 and the fourth quarter of 2013, Ironwood recorded the settlement payments from Forest of approximately $8.4 million and $2.9 million, respectively, as collaborative arrangements revenue, and no collaboration expense was recorded.
Interest Expense. Interest expense was approximately $5.3 million in the first quarter of 2014 in connection with the $175 million debt financing executed in January 2013.
Net Loss. Net loss was approximately $49.6 million, or $0.38 per share, in the first quarter of 2014, as compared to approximately $52.0 million, or $0.43 per share, in the fourth quarter of 2013.
Cash Position. Ironwood ended the first quarter of 2014 with approximately $332 million of cash, cash equivalents and available-for-sale securities, up from approximately $198 million as of the end of 2013. Ironwood used approximately $58 million of cash for operations during the first quarter of 2014.
Public Equity Offering. In the first quarter of 2014, Ironwood sold 15,784,325 shares of its Class A common stock through a firm commitment, underwritten public offering at a price to the public of $12.75 per share. As a result of the offering, Ironwood received aggregate net proceeds, after underwriting discounts and commissions and other offering expenses, of approximately $190.4 million.
2014 Financial Guidance. Ironwood today reiterated its financial guidance for 2014. Total operating expenses are expected 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 reiterated its financial guidance for the Forest and Ironwood total 2014 marketing and sales expenses for LINZESS, which it continues to expect 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, April 29, to discuss its first quarter 2014 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 3733415. 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, on April 29, running through 11:59 p.m. Eastern Time on May 6, 2014. To listen to the replay, dial (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (international) using conference ID number 3733415. 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 and is indicated 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.