– LINZESS® (linaclotide) EUTRx prescription
demand growth of 11% year-over-year –
– Plans to pursue apraglutide rolling NDA
review; expects to complete submission in the first quarter of 2025
–
– On track to deliver CNP-104 topline results
in the third quarter of 2024 –
– Revises FY 2024 financial guidance due to
continued LINZESS pricing pressure associated with
higher-than-expected Medicaid utilization trends –
Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD), a GI-focused
healthcare company, today reported its second quarter 2024 results
and recent business performance.
“We continued to make progress across our portfolio in the
second quarter,” said Tom McCourt, chief executive officer of
Ironwood Pharmaceuticals. “LINZESS prescription demand and
new-to-brand growth remain robust, increasing 11% and 15%
year-over-year in Q2, respectively. While demand is up, LINZESS
continues to experience pricing headwinds driven by
higher-than-expected Medicaid utilization trends. Even with
continued LINZESS pricing pressure, we believe we are in a
fortunate position with meaningful cash flow generation from
LINZESS and a capital structure to support the continued execution
of our strategic priorities. Beyond LINZESS, we have continued to
receive positive feedback from physicians, key opinion leaders, and
patient advocacy partners on apraglutide’s clinical profile. This
positive feedback supports our belief that, if approved,
apraglutide would be the drug of choice among physicians to treat
adult patients with short bowel syndrome who are dependent on
parenteral support, based on its demonstrated efficacy,
tolerability and once-weekly dosing convenience. In addition, we
look forward to providing an update on CNP-104 later this quarter,
which will inform a decision on our option to acquire an exclusive
license from COUR for CNP-104 in the U.S.”
Second Quarter 2024 Financial Highlights1 (in thousands,
except for per share amounts)
Q2
2024
Q2
2023
Total revenue2
$94,396
$107,382
Total costs and expenses3
69,419
1,190,521
GAAP net loss2,3
(860)
(1,089,478)
GAAP net loss attributable to Ironwood
Pharmaceuticals, Inc.2,3
(860)
(1,062,187)
GAAP net loss – per share basic2,3
(0.01)
(6.84)
GAAP net loss – per share diluted2,3
(0.01)
(6.84)
Adjusted EBITDA2,3
27,909
(1,034,182)
Non-GAAP net income (loss)2,3
1,508
(1,041,325)
Non-GAAP net income (loss) per share –
basic2,3
0.00
(6.71)
Non-GAAP net income (loss) per share –
diluted2,3
0.00
(6.71)
1 Refer to the Reconciliation of GAAP
Results to Non-GAAP Financial Measures table and to the
Reconciliation of GAAP Net Loss to Adjusted EBITDA table at the end
of this press release. Refer to Non-GAAP Financial Measures for
additional information.
2 Figures presented for the second quarter
of 2024 include a $17.0 million adjustment to collaborative
arrangements revenue, driven by a $30.0 million increase to
collaborative arrangements revenue as a result of a gross-to-net
change in estimate related to the year ended December 31, 2023,
previously recorded by Ironwood in the first quarter of 2024, which
was reflected in LINZESS U.S. net sales as reported by AbbVie in
the second quarter of 2024. This was partially offset by a $13.0
million reduction to collaborative arrangements revenue in the
second quarter of 2024, to reflect Ironwood’s estimate of LINZESS
gross-to-net reserves as of June 30, 2024.
3 Figures presented for the second quarter
of 2023 include a one‐time charge of approximately $1.1 billion
related to acquired in‐process research and development from the
acquisition of VectivBio in the second quarter of 2023.
Second Quarter 2024 Corporate Highlights
U.S. LINZESS
- Prescription Demand: Total LINZESS
prescription demand in the second quarter of 2024 was 52 million
LINZESS capsules, an 11% increase compared to the second quarter of
2023, per IQVIA.
- U.S. Brand Collaboration: LINZESS
U.S. net sales are provided to Ironwood by its U.S. partner, AbbVie
Inc. (“AbbVie”). LINZESS U.S. net sales were $211.2 million in the
second quarter of 2024, a 22% decrease compared to $269.7 million
in the second quarter of 2023. Ironwood and AbbVie share equally in
U.S. brand collaboration profits.
- LINZESS U.S. net sales as reported by AbbVie in the second
quarter of 2024 reflected the gross-to-net change in estimate
related to the year ended December 31, 2023, which Ironwood
previously accounted for in the first quarter of 2024 by recording
a $30.0 million reduction to collaborative arrangements
revenue.
- LINZESS commercial margin, including the gross-to-net change in
estimate, was 62% in the second quarter of 2024, compared to 71% in
the second quarter of 2023. See the U.S. LINZESS Full Brand
Collaboration table at the end of this press release.
- Net profit for the LINZESS U.S. brand collaboration, net of
commercial and research and development (“R&D”) expenses, and
including the gross-to-net change in estimate, was $120.5 million
in the second quarter of 2024, a decrease compared to $180.3
million in the second quarter of 2023. See the U.S. LINZESS Full
Brand Collaboration table at the end of this press release.
- Collaboration Revenue to Ironwood:
Ironwood recorded $91.4 million in collaboration revenue in the
second quarter of 2024 related to sales of LINZESS in the U.S.,
compared to $104.8 million for the second quarter of 2023. Second
quarter of 2024 collaboration revenue to Ironwood includes a $17.0
million adjustment, driven by a $30.0 million increase to
collaborative arrangements revenue as a result of a gross-to-net
change in estimate related to the year ended December 31, 2023,
previously recorded by Ironwood in the first quarter of 2024, which
was reflected in LINZESS U.S. net sales as reported by AbbVie in
the second quarter of 2024. This was partially offset by a $13.0
million reduction to collaborative arrangements revenue in the
second quarter of 2024, to reflect Ironwood’s estimate of LINZESS
gross-to-net reserves as of June 30, 2024. See the U.S. LINZESS
Commercial Collaboration table at the end of the press
release.
Pipeline Updates
Apraglutide
- Ironwood is advancing apraglutide, a next-generation, synthetic
glucagon-like peptide-2 (“GLP-2”) analog for short bowel syndrome
(“SBS”) patients dependent on parenteral support (“PS”), a severe
chronic malabsorptive condition. Ironwood believes apraglutide has
the potential to improve the standard of care for adult patients
with SBS who are dependent on PS as the first and only GLP-2 with
once-weekly administration, if approved.
- In May 2024, Ironwood presented late-breaking data during the
2024 Digestive Disease Week® (DDW) meeting from its pivotal Phase
III clinical trial, STARS, which evaluated the efficacy and safety
of once-weekly subcutaneous apraglutide in adult patients with
short bowel syndrome with intestinal failure (“SBS-IF”). These
findings build on the positive topline data that Ironwood
previously announced in February 2024. Additional details from the
late-breaking presentation can be found here.
- Ironwood is working to submit a new drug application (“NDA”) to
the U.S. Food and Drug Administration (“FDA”) and marketing
applications to other regulatory agencies for apraglutide for the
treatment of adult patients with SBS who are dependent on PS.
CNP-104
- Ironwood has a collaboration and license option agreement with
COUR Pharmaceuticals Development Company, Inc. (“COUR”). This
agreement grants Ironwood an option to acquire an exclusive license
to research, develop, manufacture and commercialize, in the U.S.,
products containing CNP-104 (“CNP-104”), a tolerizing immune
modifying nanoparticle, for the treatment of primary biliary
cholangitis (“PBC”), a rare autoimmune disease targeting the liver.
If successful, CNP-104 has the potential to be the first approved
disease modifying therapy for PBC.
- COUR is currently conducting a clinical study with CNP-104
evaluating the safety, tolerability, pharmacodynamic effects and
efficacy of CNP-104 in PBC patients. Topline data is expected in
the third quarter of 2024.
IW-3300
- Ironwood is currently advancing IW-3300, a guanylate cyclase-C
agonist being developed for the potential treatment of visceral
pain conditions, such as interstitial cystitis / bladder pain
syndrome (“IC/BPS”) and endometriosis. Ironwood is continuing the
Phase II proof of concept study in IC/BPS.
Second Quarter 2024 Financial Results
- Total Revenue. Total revenue in the second quarter of
2024 was $94.4 million, compared to $107.4 million in the second
quarter of 2023.
- As noted above, revenue was lower year-over-year, primarily due
to the decrease in collaborative arrangements revenue.
- Total revenue in the second quarter of 2024 consisted of $91.4
million associated with Ironwood’s share of the net profits from
the sales of LINZESS in the U.S., and $3.0 million in royalties and
other revenue. Total revenue in the second quarter of 2023
consisted of $104.8 million associated with Ironwood’s share of the
net profits from the sales of LINZESS in the U.S. and $2.6 million
in royalties and other revenue.
- Operating Expenses. Operating expenses in the second
quarter of 2024 were $69.4 million, compared to $1,190.5 million in
the second quarter of 2023, which included a one-time charge of
$1,090.4 million of acquired in-process research and development
(“IPR&D”) from the acquisition of VectivBio.
- Operating expenses in the second quarter of 2024 consisted of
$37.0 million in selling, general and administrative (“SG&A”)
expenses, $30.4 million in R&D expenses and $2.1 million in
restructuring expenses. Operating expenses in the second quarter of
2023 consisted of $52.5 million in SG&A expenses and $34.6
million in R&D expenses, $13.0 million in restructuring
expenses and approximately $1.1 billion in acquired IPR&D from
the acquisition of VectivBio.
- Interest Expense. Interest expense was $7.5 million in
the second quarter of 2024, primarily in connection with Ironwood’s
convertible senior notes and revolving credit facility. Interest
expense was $1.8 million in the second quarter of 2023, in
connection with Ironwood’s convertible senior notes and revolving
credit facility.
- Interest and Investment Income. Interest and investment
income was $1.4 million in the second quarter of 2024. Interest and
investment income was $8.8 million in the second quarter of
2023.
- Income Tax Expense. Ironwood recorded $19.7 million of
income tax expense in the second quarter of 2024, the majority of
which was non-cash, as Ironwood continues to utilize net operating
losses to offset taxable income for federal purposes and in many
states. Ironwood recorded $13.3 million of income tax expense in
the second quarter of 2023, the majority of which was non-cash, as
Ironwood continued to utilize net operating losses to offset
taxable income for federal purposes and in many states.
- GAAP Net Loss Attributable to Ironwood. GAAP net loss
attributable to Ironwood was ($0.9) million, or ($0.01) per share
(basic and diluted) in the second quarter of 2024, compared to GAAP
net loss attributable to Ironwood of ($1,062.2) million, or ($6.84)
per share (basic and diluted) in the second quarter of 2023, which
included a one-time charge of ($1,090.4) million of acquired
IPR&D from the acquisition of VectivBio.
- Non-GAAP Net Income (Loss). Non-GAAP net income was $1.5
million, or $0.00 per share (basic and diluted), in the second
quarter of 2024, compared to non-GAAP net loss of ($1,041.3)
million, or ($6.71) per share (basic and diluted), in the second
quarter of 2023, which included a one-time charge of ($1,090.4)
million of acquired IPR&D from the acquisition of VectivBio.
- Non-GAAP net income (loss) excludes the impact of
mark-to-market adjustments on the derivatives related to Ironwood’s
2022 Convertible Notes, amortization of acquired intangible assets,
restructuring expenses and acquisition-related costs, all net of
tax effect. See Non-GAAP Financial Measures below.
- Adjusted EBITDA. Adjusted EBITDA was $27.9 million in
the second quarter of 2024, compared to ($1,034.2) million in the
second quarter of 2023, which included a one-time charge of
($1,090.4) million of acquired IPR&D from the acquisition of
VectivBio.
- Adjusted EBITDA is calculated by subtracting mark-to-market
adjustments on derivatives related to Ironwood’s 2022 Convertible
Notes, restructuring expenses, net interest expense, income taxes,
depreciation and amortization, and acquisition-related costs, from
GAAP net loss. See Non-GAAP Financial Measures below.
- Cash Flow Highlights. Ironwood ended the second quarter
of 2024 with $105.5 million of cash and cash equivalents, compared
to $92.2 million of cash and cash equivalents at the end of 2023.
- In the second quarter of 2024, Ironwood repaid the aggregate
principal amount of the 2024 Convertible Notes of approximately
$200.0 million upon maturity, using $50.0 million of cash on hand
and drawing $150.0 million from its revolving credit facility. The
outstanding principal balance on the revolving credit facility was
$425.0 million as of June 30, 2024.
- Ironwood generated $33.5 million in cash from operations in the
second quarter of 2024, compared to $35.0 million in cash from
operations in the second quarter of 2023.
- Ironwood 2024 Financial Guidance. Ironwood has revised
its FY 2024 financial guidance due to continued LINZESS pricing
pressure as a result of higher-than-expected Medicaid utilization
trends for FY 2024. Ironwood now expects:
Prior 2024 Guidance (May
9, 2024)
Revised 2024 Guidance
(August 8, 2024)
U.S. LINZESS Net Sales
Mid-single digits % decline 2
$900 - $950 million
Total Revenue
$405 - $425 million
$350 - $375 million
Adjusted EBITDA1
>$120 million Excludes
potential CNP-104 option exercise
>$75 million Excludes
potential CNP-104 option exercise
1 Adjusted EBITDA is calculated by
subtracting restructuring expenses, net interest expense, income
taxes, depreciation and amortization, and acquisition-related costs
from GAAP net loss. For purposes of the 2024 guidance, Ironwood has
assumed it will not incur material expenses related to business
development activities in 2024 and excludes any costs associated
with potential CNP-104 option exercise. Ironwood does not provide
guidance on GAAP net loss or a reconciliation of expected adjusted
EBITDA to expected GAAP net loss because, without unreasonable
efforts, it is unable to predict with reasonable certainty the
non-GAAP adjustments used to calculate adjusted EBITDA. These
adjustments are uncertain, depend on various factors and could have
a material impact on GAAP net loss for the guidance period.
Management believes this non-GAAP information is useful for
investors, taken in conjunction with Ironwood’s GAAP financial
statements, because it provides greater transparency and
period-over-period comparability with respect to Ironwood’s
operating performance. These measures are also used by management
to assess the performance of the business. Investors should
consider these non-GAAP measures only as a supplement to, not as a
substitute for or as superior to, measures of financial performance
prepared in accordance with GAAP. In addition, these non-GAAP
financial measures are unlikely to be comparable with non-GAAP
information provided by other companies.
2 2024 U.S. LINZESS Net Sales guidance
presented as year-over-year change relative to 2023 U.S. LINZESS
Net Sales as reported by AbbVie of $1,073.2 million.
Non-GAAP Financial Measures
Ironwood presents non-GAAP net income (loss) and non-GAAP net
income (loss) per share to exclude the impact, net of tax effects,
of net gains and losses on derivatives related to Ironwood’s 2022
Convertible Notes that are required to be marked-to-market,
amortization of acquired intangible assets, restructuring expenses,
and acquisition-related costs. Non-GAAP adjustments are further
detailed below:
- The gains and losses on the derivatives related to Ironwood’s
2022 Convertible Notes were highly variable, difficult to predict
and of a size that could have a substantial impact on the company’s
reported results of operations in any given period.
- Amortization of acquired intangible assets are non-cash
expenses arising in connection with the acquisition of VectivBio
and are considered to be non-recurring.
- Restructuring expenses are considered to be a non-recurring
event as they are associated with distinct operational decisions.
Restructuring expenses include costs associated with exit and
disposal activities.
- Acquisition-related costs in connection with the acquisition of
VectivBio are considered to be non-recurring and include direct and
incremental costs associated with the acquisition and integration
of VectivBio to the extent such costs were not classified as
capitalizable transaction costs attributed to the cost of net
assets acquired through acquisition accounting.
Ironwood also presents adjusted EBITDA, a non-GAAP measure, as
well as guidance on adjusted EBITDA. Adjusted EBITDA is calculated
by subtracting mark-to-market adjustments on derivatives related to
Ironwood’s 2022 Convertible Notes, restructuring expenses, net
interest expense, income taxes, depreciation and amortization, and
acquisition-related costs from GAAP net loss. The adjustments are
made on a similar basis as described above related to non-GAAP net
income (loss), as applicable.
Management believes this non-GAAP information is useful for
investors, taken in conjunction with Ironwood’s GAAP financial
statements, because it provides greater transparency and
period-over-period comparability with respect to Ironwood’s
operating performance. These measures are also used by management
to assess the performance of the business. Investors should
consider these non-GAAP measures only as a supplement to, not as a
substitute for or as superior to, measures of financial performance
prepared in accordance with GAAP. In addition, these non-GAAP
financial measures are unlikely to be comparable with non-GAAP
information provided by other companies. For a reconciliation of
non-GAAP net income (loss) and non-GAAP net income (loss) per share
to GAAP net loss and GAAP net loss per share, respectively, and for
a reconciliation of adjusted EBITDA to GAAP net loss, please refer
to the tables at the end of this press release.
Ironwood does not provide guidance on GAAP net loss or a
reconciliation of expected adjusted EBITDA to expected GAAP net
loss because, without unreasonable efforts, it is unable to predict
with reasonable certainty the non-GAAP adjustments used to
calculate adjusted EBITDA. These adjustments are uncertain, depend
on various factors and could have a material impact on GAAP net
loss for the guidance period.
Conference Call Information
Ironwood will host a conference call and webcast at 8:30 a.m.
Eastern Time on Thursday, August 8, 2024 to discuss its second
quarter 2024 results and recent business activities. Individuals
interested in participating in the call should dial (888) 596-4144
(U.S. and Canada) or (646) 968-2525 (international) using
conference ID number and event passcode 2530602. To access the
webcast, please visit the Investors section of Ironwood’s website
at www.ironwoodpharma.com. The call will be available for replay
via telephone starting at approximately 11:30 a.m. Eastern Time on
August 8, 2024, running through 11:59 p.m. Eastern Time on August
22, 2024. To listen to the replay, dial (800) 770-2030 (U.S. and
Canada) or (609) 800-9909 (international) using conference ID
number 2530602. The archived webcast will be available on
Ironwood’s website for 1 year beginning approximately one hour
after the call has completed.
About Ironwood Pharmaceuticals
Ironwood Pharmaceuticals (Nasdaq: IRWD), an S&P SmallCap
600® company, is a leading gastrointestinal (GI) healthcare company
on a mission to advance the treatment of GI diseases and redefine
the standard of care for GI patients. We are pioneers in the
development of LINZESS® (linaclotide), the U.S. branded
prescription market leader for adults with irritable bowel syndrome
with constipation (IBS-C) or chronic idiopathic constipation (CIC).
LINZESS is also approved for the treatment of functional
constipation in pediatric patients ages 6-17 years-old. Ironwood is
also advancing apraglutide, a next-generation, long-acting
synthetic GLP-2 analog being developed for rare gastrointestinal
diseases, including short bowel syndrome with intestinal failure
(SBS-IF) as well as several earlier stage assets. Building upon our
history of GI innovation, we keep patients at the heart of our
R&D and commercialization efforts to reduce the burden of GI
diseases and address significant unmet needs.
Founded in 1998, Ironwood Pharmaceuticals is headquartered in
Boston, Massachusetts, with a site in Basel, Switzerland.
We routinely post information that may be important to investors
on our website at www.ironwoodpharma.com. In addition, follow us on
X and on LinkedIn.
About LINZESS (Linaclotide)
LINZESS® is the #1 prescribed brand in the U.S. for the
treatment of adult patients with irritable bowel syndrome with
constipation (“IBS-C”) or chronic idiopathic constipation (“CIC”),
based on IQVIA data. LINZESS is a once-daily capsule that helps
relieve the abdominal pain, constipation, and overall abdominal
symptoms of bloating, discomfort and pain associated with IBS-C, as
well as the constipation, infrequent stools, hard stools,
straining, and incomplete evacuation associated with CIC. LINZESS
relieves constipation in children and adolescents aged 6 to 17
years with functional constipation. The recommended dose is 290 mcg
for IBS-C patients and 145 mcg for CIC patients, with a 72 mcg dose
approved for use in CIC depending on individual patient
presentation or tolerability. In children with functional
constipation aged 6 to 17 years, the recommended dose is 72
mcg.
LINZESS is not a laxative; it is the first medicine approved by
the FDA in a class called GC-C agonists. LINZESS contains a peptide
called linaclotide that activates the GC-C receptor in the
intestine. Activation of GC-C is thought to result in increased
intestinal fluid secretion and accelerated 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 the United States, Ironwood and AbbVie co-develop and
co-commercialize LINZESS for the treatment of adults with IBS-C or
CIC. In Europe, AbbVie markets linaclotide under the brand name
CONSTELLA® for the treatment of adults with moderate to severe
IBS-C. In Japan, Ironwood's partner, Astellas, markets linaclotide
under the brand name LINZESS for the treatment of adults with IBS-C
or CIC. Ironwood also has partnered with AstraZeneca for
development and commercialization of LINZESS in China, and with
AbbVie for development and commercialization of linaclotide in all
other territories worldwide.
LINZESS Important Safety Information
INDICATIONS AND USAGE
LINZESS® (linaclotide) is indicated for the treatment of both
irritable bowel syndrome with constipation (IBS-C) and chronic
idiopathic constipation (CIC) in adults and functional constipation
(FC) in children and adolescents 6 to 17 years of age. It is not
known if LINZESS is safe and effective in children with FC less
than 6 years of age or in children with IBS-C less than 18 years of
age.
IMPORTANT SAFETY INFORMATION
WARNING: RISK OF SERIOUS DEHYDRATION IN
PEDIATRIC PATIENTS LESS THAN 2 YEARS OF AGE
LINZESS is contraindicated in patients
less than 2 years of age. In nonclinical studies in neonatal mice,
administration of a single, clinically relevant adult oral dose of
linaclotide caused deaths due to dehydration.
Contraindications
- LINZESS is contraindicated in patients less than 2 years of age
due to the risk of serious dehydration.
- LINZESS is contraindicated in patients with known or suspected
mechanical gastrointestinal obstruction.
Warnings and Precautions
- LINZESS is contraindicated in patients less than 2 years of
age. In neonatal mice, linaclotide increased fluid secretion as a
consequence of age-dependent elevated guanylate cyclase (GC-C)
agonism, which was associated with increased mortality within the
first 24 hours due to dehydration. There was no age dependent trend
in GC-C intestinal expression in a clinical study of children 2 to
less than 18 years of age; however, there are insufficient data
available on GC-C intestinal expression in children less than 2
years of age to assess the risk of developing diarrhea and its
potentially serious consequences in these patients.
Diarrhea
- In adults, diarrhea was the most common adverse reaction in
LINZESS-treated patients in the pooled IBS-C and CIC double-blind
placebo-controlled trials. The incidence of diarrhea was similar in
the IBS-C and CIC populations. Severe diarrhea was reported in 2%
of 145 mcg and 290 mcg LINZESS-treated patients and in <1% of 72
mcg LINZESS-treated CIC patients.
- In children and adolescents 6 to 17 years of age, diarrhea was
the most common adverse reaction in 72 mcg LINZESS-treated patients
in the FC double-blind placebo-controlled trial. Severe diarrhea
was reported in <1% of 72 mcg LINZESS treated patients. If
severe diarrhea occurs, dosing should be suspended and the patient
rehydrated.
Common Adverse Reactions (incidence ≥2% and greater than
placebo)
- In IBS-C or CIC adult patients: diarrhea, abdominal pain,
flatulence, and abdominal distension.
- In FC pediatric patients: diarrhea.
Please see full Prescribing Information including Boxed Warning:
https://www.rxabbvie.com/pdf/linzess_pi.pdf
LINZESS® and CONSTELLA® are registered trademarks of Ironwood
Pharmaceuticals, Inc. Any other trademarks referred to in this
press release are the property of their respective owners. All
rights reserved.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Investors are cautioned not to place undue reliance on these
forward-looking statements, including statements about Ironwood’s
ability to execute on its mission; Ironwood’s strategy, business,
financial position and operations; Ironwood’s ability to drive
growth and profitability; the commercial potential of LINZESS; our
financial performance and results, and guidance and expectations
related thereto; LINZESS prescription demand growth, LINZESS U.S.
net sales growth, total revenue and adjusted EBITDA in 2024; our
plan to pursue apraglutide rolling NDA review and the expected
timing to complete submission; our belief that our cash flow
position supports the continued execution of strategic priorities;
our belief that if apraglutide is approved, it would be the drug of
choice among physicians to treat adult patients with SBS who are
dependent on PS, based on its demonstrated efficacy, tolerability
and once-weekly dosing convenience; our plan to submit an NDA and
marketing applications to other regulatory agencies for
apraglutide; apraglutide's potential, if approved, to be the first
and only once-weekly GLP-2 analog for adult SBS patients who are
dependent on PS; the timing of topline data for CNP-104, which will
inform a decision on our option to acquire an exclusive license
from COUR, and that, if successful, CNP-104 has the potential to be
the first approved disease modifying therapy for PBC. These
forward-looking statements speak only as of the date of this press
release, and Ironwood undertakes no obligation to update these
forward-looking statements. Each forward-looking statement is
subject to risks and uncertainties that could cause actual results
to differ materially from those expressed or implied in such
statement. Applicable risks and uncertainties include those related
to the effectiveness of development and commercialization efforts
by us and our partners; preclinical and clinical development,
manufacturing and formulation development of linaclotide,
apraglutide, CNP-104, IW-3300, and our other product candidates;
the risk of uncertainty relating to pricing and reimbursement
policies in the U.S., which, if not favorable for our products,
could hinder or prevent our products’ commercial success; the risk
that clinical programs and studies, including for linaclotide
pediatric programs, apraglutide, CNP-104 and IW-3300, may not
progress or develop as anticipated, including that studies are
delayed or discontinued for any reason, such as safety,
tolerability, enrollment, manufacturing, economic or other reasons;
the risk that findings from our completed nonclinical studies and
clinical trials may not be replicated in later trials and
earlier-stage clinical trials may not be predictive of the results
we may obtain in later-stage clinical trials or of the likelihood
of regulatory approval; the risk that apraglutide will not be
approved by the FDA or other regulatory agencies; the risk of
competition or that new products may emerge that provide different
or better alternatives for treatment of the conditions that our
products are approved to treat; the risk that we are unable to
execute on our strategy to in-license externally developed products
or product candidates; the risk that we are unable to successfully
partner with other companies to develop and commercialize products
or product candidates; the risk that healthcare reform and other
governmental and private payor initiatives may have an adverse
effect upon or prevent our products’ or product candidates’
commercial success; the efficacy, safety and tolerability of
linaclotide and our product candidates; the risk that the
commercial and therapeutic opportunities for LINZESS, apraglutide
or our other product candidates are not as we expect; decisions by
regulatory and judicial authorities; the risk we may never get
additional patent protection for linaclotide, apraglutide and other
product candidates, that patents for linaclotide, apraglutide or
other products may not provide adequate protection from
competition, or that we are not able to successfully protect such
patents; the risk that we are unable to manage our expenses or cash
use, or are unable to commercialize our products as expected; the
risk that the development of any of our linaclotide pediatric
programs, apraglutide, CNP-104 and/or IW-3300 is not successful or
that any of our product candidates does not receive regulatory
approval or is not successfully commercialized; outcomes in legal
proceedings to protect or enforce the patents relating to our
products and product candidates, including abbreviated new drug
application litigation; the risk that financial and operating
results may differ from our projections; developments in the
intellectual property landscape; challenges from and rights of
competitors or potential competitors; the risk that our planned
investments do not have the anticipated effect on our company
revenues; developments in accounting guidance or practice;
Ironwood’s or AbbVie’s accounting practices, including reporting
and settlement practices as between Ironwood and AbbVie; the risk
that our indebtedness could adversely affect our financial
condition or restrict our future operations; and the risks listed
under the heading “Risk Factors” and elsewhere in our Annual Report
on Form 10-K for the year ended December 31, 2023, and in our
subsequent Securities and Exchange Commission filings.
Condensed Consolidated Balance
Sheets
(In thousands)
(unaudited)
June 30, 2024
December 31, 2023
Assets
Cash and cash equivalents
$
105,524
$
92,154
Accounts receivable, net
58,108
129,122
Prepaid expenses and other current
assets
14,548
12,012
Total current assets
178,180
233,288
Property and equipment, net
5,068
5,585
Operating lease right-of-use assets
11,823
12,586
Intangible assets, net
3,273
3,682
Deferred tax assets
193,019
212,324
Other assets
4,257
3,608
Total assets
$
395,620
$
471,073
Liabilities and stockholders’
equity
Accounts payable
$
3,227
$
7,830
Accrued research and development costs
6,720
21,331
Accrued expenses and other current
liabilities
32,406
44,254
Current portion of operating lease
liabilities
3,157
3,126
Current portion on convertible senior
notes
-
199,560
Total current liabilities
45,510
276,101
Operating lease liabilities, net of
current portion
13,452
14,543
Convertible senior notes, net of current
portion
198,647
198,309
Revolving credit facility
425,000
300,000
Other liabilities
34,738
28,415
Total stockholders’ deficit
(321,727)
(346,295)
Total liabilities and stockholders’
deficit
$
395,620
$
471,073
Condensed Consolidated
Statements of Income (Loss)
(In thousands, except per
share amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Total revenues1
$
94,396
$
107,382
$
169,273
$
211,443
Collaborative arrangements revenue1
94,396
107,382
169,273
211,443
Costs and expenses:
Research and development
30,388
34,577
56,203
47,424
Selling, general and administrative
36,964
52,484
74,569
83,601
Restructuring
2,067
13,011
2,504
13,011
Acquired in-process research and
development
-
1,090,449
-
1,090,449
Total costs and expenses2
69,419
1,190,521
133,276
1,234,485
Income (loss) from operations
24,977
(1,083,139)
35,997
(1,023,042)
Other income (expense):
Interest expense and other financing
costs
(7,470)
(1,840)
(14,701)
(3,367)
Interest and investment income
1,369
8,757
2,538
16,029
Gain on derivatives
-
-
-
19
Other income (expense), net
(6,101)
6,917
(12,163)
12,681
Income (loss) before income taxes
18,876
(1,076,222)
23,834
(1,010,361)
Income tax expense
(19,736)
(13,256)
(28,856)
(33,403)
GAAP net loss1,2
(860)
(1,089,478)
(5,022)
(1,043,764)
Less: GAAP net loss attributable
to noncontrolling interests
-
(27,291)
-
(27,291)
GAAP net loss attributable to Ironwood
Pharmaceuticals, Inc.
$
(860)
$
(1,062,187)
$
(5,022)
$
(1,016,473)
GAAP net loss per share—basic
$
(0.01)
$
(6.84)
$
(0.03)
$
(6.56)
GAAP net loss per share—diluted
$
(0.01)
$
(6.84)
$
(0.03)
$
(6.56)
_________________
1 Figures presented for the three
and six months ended June 30, 2024 include a $17.0 million increase
and $13.0 million reduction to collaborative arrangement revenues,
respectively, as a result of an adjustment recorded for Ironwood’s
estimate of LINZESS gross-to-net reserves as of June 30, 2024.
2 Figures presented for the three
and six months ended June 30, 2023 include a one-time charge of
approximately $1.1 billion related to acquired IPR&D from the
acquisition of VectivBio in the second quarter of 2023.
Reconciliation of GAAP Results to Non-GAAP Financial
Measures
(In thousands, except per
share amounts) (unaudited)
A reconciliation between net income (loss)
on a GAAP basis and on a non-GAAP basis is as follows:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
GAAP net loss1,2
$
(860)
$
(1,089,478)
$
(5,022)
$
(1,043,764)
Adjustments:
Mark-to-market adjustments on the
derivatives related to convertible notes, net
-
-
-
(19)
Amortization of acquired intangible
assets
204
4
409
4
Restructuring expenses
2,067
13,011
2,504
13,011
Acquisition-related costs
359
35,681
1,146
35,681
Tax effect of adjustments
(262)
(543)
(461)
(543)
Non-GAAP net income (loss)1,2
$
1,508
$
(1,041,325)
$
(1,424)
$
(995,630)
A reconciliation between basic and diluted net income (loss) per
share on a GAAP basis and on a non-GAAP basis is as follows:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
GAAP net loss attributable to Ironwood
Pharmaceuticals, Inc. per share – basic and diluted
$
(0.01)
$
(6.84)
$
(0.03)
$
(6.56)
Plus: Net income (loss) per share
attributable to noncontrolling interests
-
(0.18)
-
(0.18)
Adjustments to GAAP net income (loss) per
share (as detailed above)
0.01
0.31
0.02
0.31
Non-GAAP net income (loss) per share–
basic and diluted
$
0.00
$
(6.71)
$
(0.01)
$
(6.43)
Weighted average number of common shares
used to calculate net loss per share — basic and diluted
159,014
155,367
158,357
154,912
_________________
1 Figures presented for the three and six
months ended June 30, 2024 include a $17.0 million increase and
$13.0 million reduction to collaborative arrangement revenues,
respectively, as a result of an adjustment recorded for Ironwood’s
estimate of LINZESS gross-to-net reserves as of June 30, 2024.
2 Figures presented for the three and six
months ended June 30, 2023, include a one-time charge of
approximately $1.1 billion related to acquired IPR&D from the
acquisition of VectivBio in the second quarter of 2023.
Reconciliation of GAAP Net
Loss to Adjusted EBITDA
(In thousands)
(unaudited)
A reconciliation of GAAP net loss to
adjusted EBITDA:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
GAAP net loss1,2
$
(860)
$
(1,089,478)
$
(5,022)
$
(1,043,764)
Adjustments:
Mark-to-market adjustments on the
derivatives related to convertible notes, net
-
-
-
(19)
Restructuring expenses
2,067
13,011
2,504
13,011
Interest expense
7,470
1,840
14,701
3,367
Interest and investment income
(1,369)
(8,757)
(2,538)
(16,029)
Income tax expense
19,736
13,256
28,856
33,403
Depreciation and amortization
506
265
1,019
551
Acquisition-related costs
359
35,681
1,146
35,681
Adjusted EBITDA1,2
$
27,909
$
(1,034,182)
$
40,666
$
(973,799)
_________________
1 Figures presented for the three and six
months ended June 30, 2024 include a $17.0 million increase and
$13.0 million reduction to collaborative arrangement revenues,
respectively, as a result of an adjustment recorded for Ironwood’s
estimate of LINZESS gross-to-net reserves as of June 30, 2024.
2 Figures presented for the three and six months ended June 30,
2023, include a one-time charge of approximately $1.1 billion
related to acquired IPR&D from the acquisition of VectivBio in
the second quarter of 2023.
U.S. LINZESS Commercial
Collaboration1
Revenue/Expense
Calculation
(In thousands)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
LINZESS U.S. net sales as reported by
AbbVie2
$
211,183
$
269,686
$
467,783
$
519,900
AbbVie & Ironwood commercial costs,
expenses and other discounts3
80,950
78,998
154,312
145,406
Commercial profit on sales of LINZESS
$
130,233
$
190,688
$
313,471
$
374,494
Commercial Margin4
62%
71%
67%
72%
Ironwood’s share of net profit
65,117
95,344
156,736
187,247
Reimbursement for Ironwood’s commercial
expenses
9,298
9,407
19,394
19,135
Adjustment for Ironwood’s estimate of
LINZESS gross-to-net reserves
17,000
-
(13,000)
-
Ironwood’s U.S. collaborative arrangements
revenue5
$
91,415
$
104,751
$
163,130
$
206,382
_________________
1 Ironwood collaborates with AbbVie 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 Ironwood’s share of net profit (loss)
generated from the sales of LINZESS in the U.S. and Ironwood’s
collaboration revenue/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. Please refer to the table at the end of
this press release for net profit for the U.S. LINZESS brand
collaboration with AbbVie.
2 LINZESS net sales are recognized using
AbbVie’s revenue recognition accounting policies and reporting
conventions. As a result, certain rebates and discounts are
classified as LINZESS U.S. commercial costs, expenses and other
discounts within Ironwood’s calculation of collaborative
arrangements revenue.
3 Includes certain discounts recognized
and cost of goods sold incurred by AbbVie; also includes commercial
costs incurred by AbbVie and Ironwood that are attributable to the
cost-sharing arrangement between the parties.
4 Commercial margin is defined as
commercial profit on sales of LINZESS as a percent of total LINZESS
U.S. net sales.
5 Figures presented for the three and six
months ended June 30, 2024 include a $17.0 million increase and
$13.0 million reduction to collaborative arrangement revenues,
respectively, as a result of an adjustment recorded for Ironwood’s
estimate of LINZESS gross-to-net reserves as of June 30, 2024.
US LINZESS Full Brand
Collaboration1
Revenue/Expense
Calculation
(In thousands)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
LINZESS U.S. net sales as reported by
AbbVie2
$
211,183
$
269,686
$
467,783
$
519,900
AbbVie & Ironwood commercial costs,
expenses and other discounts3
80,950
78,998
154,312
145,406
AbbVie & Ironwood R&D
Expenses4
9,736
10,356
17,372
19,006
Total net profit on sales of LINZESS
$
120,497
$
180,332
$
296,099
$
355,488
_________________
1 Ironwood collaborates with AbbVie 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 total net profit (loss) generated
from the sales of LINZESS in the U.S., including the commercial
costs and expenses and the research and development expenses
related to LINZESS in the U.S. that are shared equally between the
parties under the collaboration agreement.
2 LINZESS net sales are recognized using
AbbVie’s revenue recognition accounting policies and reporting
conventions. As a result, certain rebates and discounts are
classified as LINZESS U.S. commercial costs, expenses and other
discounts within Ironwood’s calculation of collaborative
arrangements revenue.
3 Includes certain discounts recognized
and cost of goods sold incurred by AbbVie; also includes commercial
costs incurred by AbbVie and Ironwood that are attributable to the
cost-sharing arrangement between the parties.
4 Expenses related to LINZESS in the U.S. are shared equally
between Ironwood and AbbVie under the collaboration agreement.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808744786/en/
Investors: Greg Martini, 617-374-5230
gmartini@ironwoodpharma.com
Matt Roache, 617-621-8395 mroache@ironwoodpharma.com
Media: Beth Calitri, 978-417-2031
bcalitri@ironwoodpharma.com
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