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 Highlights LINZESS ® (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.
- 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.
- 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.
- 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.
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 decrease in the activity of pain-sensing nerves in the intestine. The clinical relevance of the effect on pain fibers, which is based on 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 is 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.About Ironwood Pharmaceuticals Ironwood Pharmaceuticals (NASDAQ: IRWD) is focused on creating medicines that make a difference for patients, building value to earn the continued support of our fellow shareholders, and empowering our team to passionately pursue excellence. We discovered, developed and are commercializing linaclotide, which is approved in the United States and Europe. Our pipeline priorities include exploring further opportunities for linaclotide, as well as leveraging our therapeutic expertise in gastrointestinal disorders and our pharmacologic expertise in guanylate cyclases to address patient needs across the upper and lower gastrointestinal tract. 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; information that may be important to investors will be routinely posted in both these locations. LINZESS® and CONSTELLA® are trademarks owned by Ironwood Pharmaceuticals, Inc. 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)|
|December 31, 2013||December 31, 2012|
|Cash, cash equivalents and available-for-sale securities||$||197,602||$||168,228|
|Accounts receivable, net||3,213||1,487|
|Prepaid expenses and other current assets||6,168||8,026|
|Total current assets||229,128||184,440|
|Property and equipment, net||37,376||37,537|
|Liabilities and Stockholders’ Equity|
|Accounts payable and accrued expenses||$||32,037||$||48,561|
|Current portion of capital lease obligations||1,139||261|
|Current portion of deferred rent||2,790||2,735|
|Current portion of deferred revenue||5,074||3,381|
|Total current liabilities||41,040||54,938|
|Capital lease obligations||3,134||308|
|Total stockholders’ equity||38,225||144,052|
|Total liabilities and stockholders’ equity||$||278,962||$||229,907|
|Condensed Consolidated Statements of Operations (in thousands, except share and per share amounts) (unaudited)|
|Three Months Ended December 31,||Year Ended December 31,|
|Cost and expenses:|
|Cost of revenue||533||965||7,203||965|
|Research and development (1)||22,516||28,273||102,378||113,474|
|Selling, general and administrative (1)||28,720||33,274||123,228||92,538|
|Total cost and expenses||51,769||70,880||274,883||223,007|
|Loss from operations||(46,738||)||(43,900||)||(252,002||)||(72,762||)|
|Other income (expense), net||(5,248||)||45||(20,810||)||138|
|Net loss per share—basic and diluted||$||(0.43||)||$||(0.41||)||$||(2.35||)||$||(0.68||)|
|Weighted average number of common shares used in net loss per share —basic and diluted||120,929,271||107,439,026||115,851,875||106,402,639|
|(1) Non-cash compensation expenses reflected in the condensed consolidated statements of operations are as follows:|
|Research and development||$ 1,904||$ 2,404||$ 9,178||$ 9,080|
|Selling, general and administrative||$ 2,634||$ 2,257||$ 10,651||$ 8,493|
|LINZESS U.S. Collaboration Revenue/Expense Calculation1 (in thousands) (unaudited)|
|Three Months Ended December 31,||Year Ended December 31,|
|LINZESS net sales||$||51,044||$||19,227||$||118,753||$||19,227|
|Commercial costs and expenses2 Includes cost of goods sold incurred by Forest as well as selling, general and administrative expenses incurred by Forest and Ironwood that are attributable to the cost-sharing arrangement between the parties.||62,806||39,157||264,751||61,471|
|Net profit (loss) on sales of LINZESS||$||(11,762||)||$||(19,930||)||$||(145,998||)||$||(42,244||)|
|Ironwood’s share of net loss||$||(5,881||)||$||(9,965||)||$||(72,999||)||$||(21,122||)|
|Ironwood’s selling, general and administrative expenses3 Includes Ironwood’s selling, general and administrative expenses attributable to the cost-sharing arrangement with Forest.||$||8,795||$||1,597||$||33,839||$||5,092|
|Ironwood’s collaboration expense||$||—||$||8,368||$||39,160||$||16,030|
|Ironwood’s collaborative arrangement revenue||$||2,914||$||—||$||—||$||—|