Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD) today provided an update on its second quarter 2013 and recent business activities. “The past six months have been a transformative period at Ironwood, thanks to the dedication and hard work of our team,” said Peter Hecht, chief executive officer of Ironwood. “The LINZESS launch is strong and tracking well across all leading indicators, and we and Forest are working closely together to drive all aspects of the launch. At the same time, together with Forest we are making progress in our efforts to maximize the commercial and clinical success of LINZESS by exploring ways to strengthen the existing label and seeking regulatory approval for LINZESS in additional populations and indications. During the second quarter, Almirall launched CONSTELLA in key European countries, and we continue to advance linaclotide in territories around the world along with our partners. We also continued to make progress with our other pipeline programs. We look forward to advancing our key value drivers and managing investments across our portfolio to maximize per share value for our fellow shareholders.” Second Quarter 2013 and Recent Highlights LINZESS ® (linaclotide)
- LINZESS net product sales, as reported by Forest Laboratories, Inc., were $28.8 million in the second quarter of 2013.
- More than 125,000 LINZESS prescriptions were filled in the second quarter of 2013 and more than 200,000 LINZESS prescriptions have been filled since LINZESS launched on December 17, 2012, according to IMS Health.
- To date, more than 70% of high prescribing gastroenterologists and approximately 40% of high prescribing primary care physicians have prescribed LINZESS; approximately 1,000 physicians are writing their first LINZESS prescription each week.
- As of June 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 approximately 50% of patients with national commercial insurance plans have a copay of approximately $30 per month.
- Ironwood and Forest expect to report data in the third quarter of 2013 from a Phase IIIb clinical trial to further evaluate the effect of LINZESS on abdominal symptoms in patients with CIC.
- Ironwood and Forest continue to explore additional development opportunities to strengthen the clinical profile of LINZESS within its indicated population and to expand the product label for broader patient populations and indications, as well as to explore the potential for linaclotide-based combination products. The companies expect to initiate U.S. clinical trials in the pediatric population, as well as for the potential treatment of adult patients suffering from opioid-induced constipation, in the first half of 2014.
- Ironwood’s European partner, Almirall S.A., launched CONSTELLA in the U.K., Germany and the Nordic countries. Almirall will continue launching in additional European countries throughout the remainder of 2013 and 2014.
- The Scottish Medicines Consortium (SMC) published a health technology assessment of CONSTELLA advising payers in Scotland to provide access to CONSTELLA for moderate-to-severe IBS-C adult patients who have not responded adequately to or cannot tolerate other treatment options.
- CONSTELLA was approved by Swissmedic, the regulatory agency in Switzerland, for the symptomatic treatment of moderate to severe IBS-C in adults.
- Ironwood and AstraZeneca expect to begin enrollment in the Phase III clinical trial of linaclotide in adult patients with IBS-C in China in August 2013. The trial is expected to be completed in the first half of 2015.
- Astellas continues to enroll patients in a double-blind, placebo-controlled, dose-ranging Phase II clinical trial of linaclotide in adult patients with IBS-C in Japan. The trial is expected to be completed in the second half of 2013.
- 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.
- Total Revenues. Revenues were approximately $9.7 million in the second quarter of 2013. This consisted of $6.1 million in sales of active pharmaceutical ingredient (API), $1.7 million in the amortization of deferred revenue associated with consideration received from Ironwood’s collaborations with Astellas and AstraZeneca, and $1.9 million in milestone payments from Almirall as a result of the commercial launches of CONSTELLA in the U.K. and Germany. 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 $55.0 million in the second quarter of 2013. This consisted of $24.1 million of research and development expenses and $30.9 million of selling, general and administrative expenses.
- Interest Expense. Interest expense was $5.3 million in the second quarter of 2013 in connection with the $175 million debt financing executed in January 2013.
- Net Loss. Ironwood reported a net loss of $65.1 million, or $0.57 per share, in the second quarter of 2013.
- Cash Position. Ironwood ended the second quarter of 2013 with approximately $301 million of cash, cash equivalents and available-for-sale securities. Ironwood used approximately $80 million of net cash for operations during the quarter.
- Public Equity Offering. In the second quarter of 2013, Ironwood sold 11,204,948 million shares of its Class A common stock through an underwritten public offering at a price to the public of $13.00 per share. As a result of the offering, Ironwood received aggregate net proceeds, after underwriting discounts and commissions and other offering expenses, of approximately $137.8 million.
- 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 2013 non-linaclotide research and development expenses to be in the range of $60 to $75 million.
- Ironwood expects to host an Investor Day in the fourth quarter of 2013 to further discuss its corporate strategy, provide a full update on the LINZESS launch, discuss linaclotide opportunities in additional populations and indications, and discuss its R&D efforts.
LINZESS is thought to work in two ways based on nonclinical studies. LINZESS binds to the GC-C receptor locally, within the intestinal epithelium. Activation of GC-C results in increased intestinal fluid secretion and transit and a reduction in visceral pain, which is thought to be mediated by decreased activity of pain-sensing nerves. The clinical relevance of the effect on pain fibers in nonclinical studies has not been established.In placebo-controlled Phase III clinical trials of more than 2,800 adults, LINZESS was shown to reduce abdominal pain in IBS-C patients and increase bowel movement frequency in both IBS-C patients and CIC patients. Improvement in abdominal pain and constipation occurred in the first week of treatment and was maintained throughout the 12-week treatment period. Maximum effect on abdominal pain was seen at weeks 6-9 and maximum effect on constipation occurred during the first week. When a subset of LINZESS-treated patients in the trials were switched to placebo, they reported their symptoms returned toward pretreatment levels within one week, while placebo-treated patients switched to LINZESS reported symptom improvements. LINZESS is contraindicated in pediatric patients up to 6 years of age. The use of LINZESS in pediatric patients 6 through 17 years of age should be avoided. In nonclinical studies, administration of a single, clinically relevant adult oral dose of linaclotide caused deaths in young juvenile mice. LINZESS has not been studied in pediatric patients. In adults with IBS-C or CIC treated with LINZESS, the most commonly reported adverse event was diarrhea. Ironwood and Forest Laboratories, Inc. are co-promoting LINZESS in the United States. Linaclotide was also approved by the European Commission for the treatment of adults in the European Union with IBS-C and will be marketed under the brand name Constella ® through a license agreement between Ironwood and Almirall, S.A. Ironwood also has partnered linaclotide with Astellas Pharma Inc. for development and commercialization in Japan and with AstraZeneca for development and commercialization in China. About CONSTELLA (linaclotide) Linaclotide is a Guanylate Cyclase-C receptor agonist (GCCA) with visceral analgesic and secretory activities. Linaclotide is a 14-amino acid synthetic peptide structurally related to the endogenous guanylin peptide family. Both linaclotide and its active metabolite bind to the Guanylate Cyclase-C receptor, on the luminal surface of the intestinal epithelium. Through its action at GC-C, linaclotide has been shown to reduce visceral pain and increase GI transit in animal models and increase colonic transit in humans. Activation of GC-C results in an increase in concentrations of cyclic guanosine monophosphate (cGMP), both extracellularly and intracellularly. Extracellular cGMP decreases pain-fiber activity, resulting in reduced visceral pain in animal models. Intracellular cGMP causes secretion of chloride and bicarbonate into the intestinal lumen, through activation of the cystic fibrosis transmembrane conductance regulator (CFTR), which results in increased intestinal fluid and accelerated transit.
Linaclotide was discovered by scientists at Ironwood and is marketed in Europe by Almirall through a license agreement between the two companies. Constella® is a trademark owned by Ironwood Pharmaceuticals, Inc.About Ironwood Pharmaceuticals Ironwood Pharmaceuticals (NASDAQ: IRWD) is committed to the art and science of making medicines, from discovery through commercialization. We’re focused on three goals: transforming knowledge into medicines that make a difference for patients, creating value that will inspire the continued support of our fellow shareholders, and building a team that passionately pursues excellence. Our first product, linaclotide, is approved in the United States and Europe. Our pipeline priorities include exploring further opportunities for linaclotide, leveraging our deep expertise in functional gastrointestinal disorders, and advancing programs in other areas such as allergic conditions, cardiovascular disease, central nervous system disorders and other conditions defined by patient symptoms. Ironwood was founded in 1998 and is headquartered in Cambridge, Mass. Connect with us at www.ironwoodpharma.com or on Twitter at www.twitter.com/ironwoodpharma to learn more about Ironwood. Information that may be important to investors will be routinely posted in both these locations.
|Important Safety Information|
|WARNING: PEDIATRIC RISK|
|LINZESS is contraindicated in pediatric patients up to 6 years of age. Use should be avoided in pediatric patients 6 through 17 years of age. In nonclinical studies, administration of a single, clinically relevant adult oral dose of linaclotide caused deaths in young juvenile mice.|
- LINZESS is contraindicated in pediatric patients up to 6 years of age.
- LINZESS is contraindicated in patients with known or suspected mechanical gastrointestinal obstruction.
- LINZESS is contraindicated in pediatric patients up to 6 years of age. In nonclinical studies, deaths occurred within 24 hours in young juvenile mice (1 to 3 week-old mice; approximately equivalent to human pediatric patients less than 2 years of age) following administration of one or two daily oral doses of linaclotide.
- Use of LINZESS should be avoided in pediatric patients 6 through 17 years of age. Linaclotide did not cause deaths in older juvenile mice (approximately equivalent to humans age 12 to 17 years). Although there were no deaths in older juvenile mice, given the deaths in young juvenile mice and the lack of clinical safety and efficacy data in pediatric patients, use of LINZESS should be avoided in pediatric patients 6 through 17 years of age.
- Diarrhea was the most common adverse reaction of LINZESS-treated patients in the pooled IBS-C and CIC double-blind placebo-controlled trials. Severe diarrhea was reported in 2% of LINZESS-treated patients. The incidence of diarrhea was similar in the IBS-C and CIC populations.
- Patients should be instructed to stop LINZESS if severe diarrhea occurs and to contact their healthcare provider, who should consider dose suspension.
- In IBS-C clinical trials, the most common adverse reactions in LINZESS-treated patients (incidence ≥2% and greater than placebo) were diarrhea (20% vs 3% placebo), abdominal pain (7% vs 5%), flatulence (4% vs 2%), headache (4% vs 3%), viral gastroenteritis (3% vs 1%) and abdominal distension (2% vs 1%).
- In CIC clinical trials, the most common adverse reactions in LINZESS-treated patients (incidence ≥2% and greater than placebo) were diarrhea (16% vs 5% placebo), abdominal pain (7% vs 6%), flatulence (6% vs 5%), upper respiratory tract infection (5% vs 4%), sinusitis (3% vs 2%) and abdominal distension (3% vs 2%).
|Condensed Consolidated Balance Sheets (in thousands)(unaudited)|
|June 30,2013||December 31,2012|
|Cash, cash equivalents and available-for-sale securities||$||300,538||$||168,228|
|Accounts receivable, net||5,298||1,487|
|Prepaid expenses and other current assets||9,565||8,026|
|Total current assets||335,780||184,440|
|Property and equipment, net||35,013||37,537|
|Liabilities and Stockholders’ Equity|
|Accounts payable and accrued expenses||$||35,907||$||48,561|
|Current portion of capital lease obligations||223||261|
|Current portion of deferred rent||2,762||2,735|
|Current portion of deferred revenue||5,074||3,381|
|Total current liabilities||43,966||54,938|
|Capital lease obligations||198||308|
|Total stockholders’ equity||139,416||144,052|
|Total liabilities and stockholders’ equity||$||384,031||$||229,907|
|Condensed Consolidated Statements of Operations (in thousands, except share and per share amounts)(unaudited)|
|Three Months EndedJune 30,||Six Months EndedJune 30,|
|Cost and expenses:|
|Cost of revenue||3,418||—||4,649||—|
|Research and development (1)||24,093||32,238||56,846||61,748|
|Selling, general and administrative (1)||30,870||20,099||64,244||36,418|
|Total cost and expenses||69,543||55,438||161,631||103,322|
|Loss from operations||(59,880||)||(40,834||)||(148,713||)||(76,470||)|
|Other income (expense), net||(5,269||)||31||(10,338||)||66|
|Net loss per share—basic and diluted||$||(0.57||)||$||(0.38||)||$||(1.44||)||$||(0.73||)|
|Weighted average number of common shares used in net loss per share —basic and diluted||113,441,391||107,078,150||110,771,851||105,414,607|
|(1) Non-cash share-based compensation expensesincluded reflected in the condensed consolidatedstatements of operations are as follows:|
|Research and development||$||2,748||$||2,077||$||4,972||$||4,028|
|Selling, general and administrative||2,116||1,979||5,167||3,749|
|LINZESS U.S. Collaboration Expense Calculation1 (in thousands)(unaudited)|
|Three Months EndedJune 30,||Six Months EndedJune 30,|
|LINZESS net sales||$||28,763||$||-||$||33,265||$||-|
|Commercial costs and expenses2||67,629||8,420||138,669||14,894|
|Net profit (loss) on sales of LINZESS||$||(38,866||)||$||(8,420||)||$||(105,404||)||$||(14,894||)|
|Ironwood’s share of net profit (loss)||$||(19,433||)||$||(4,210||)||$||(52,702||)||$||(7,447||)|
|Ironwood’s selling & marketing3||$||8,271||$||1,109||$||16,810||$||2,291|
|Ironwood’s collaboration expense||$||11,162||$||3,101||$||35,892||$||5,156|
|1 Ironwood collaborates with Forest on the development and commercialization of linaclotide in North America. Under the terms of the collaboration agreement, Ironwood receives 50% of the net profits and bears 50% of the net losses from the commercial sale of LINZESS in the U.S. The purpose of this table is to present calculations of the Ironwood’s share of net profit (loss) generated from the sales of LINZESS in the U.S. and the Ironwood’s collaboration expense; however, the table does not present the research and development expenses related to LINZESS in the U.S. that are shared equally between the parties under the collaboration agreement.|
|2 Includes cost of sales incurred by Forest as well as selling and marketing costs incurred by Forest and Ironwood that are attributable to the cost-sharing arrangement between the parties.|
|3 Includes Ironwood’s selling and marketing costs attributable to the cost-sharing arrangement with Forest.|