– LINZESS (Iinaclotide) EUTRx prescription
demand growth increased 9% year-over-year; LINZESS U.S. net sales
of $270 million, an increase of 9% year-over-year –
– Expands clinical utility of LINZESS with FDA
approval for pediatric patients ages 6-17 years-old suffering from
functional constipation (FC) –
– Strengthens GI development portfolio with
acquisition of VectivBio Holding AG and its lead investigational
asset, apraglutide, for the potential treatment of short bowel
syndrome with intestinal failure –
– Completes STARS Phase III clinical trial
enrollment; now expects topline data in March of 2024 –
Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD), a GI-focused
healthcare company, today reported its second quarter 2023 results
and updated its full year 2023 financial guidance.
“We made significant progress towards the goal of becoming the
leading GI healthcare company, as the second quarter was truly
transformative for Ironwood,” said Tom McCourt, chief executive
officer of Ironwood. “LINZESS continued its strong momentum with
another quarter of impressive performance. As a result, we are
raising our full-year 2023 U.S. net sales and Ironwood revenue
guidance. Furthermore, we are thrilled that in June the FDA
approved LINZESS for the treatment of pediatric patients ages 6 to
17 years-old with functional constipation, expanding its clinical
utility and adding another potential growth driver for the brand.
Also in the second quarter, we strengthened our GI portfolio with
the acquisition of VectivBio, including its lead investigational
asset, apraglutide, which we believe is poised to become the new
standard of care for patients with short bowel syndrome with
intestinal failure if successfully developed and approved, with the
potential to achieve $1 billion in peak net sales. Looking ahead,
we are excited about continuing to maximize LINZESS, advance our
clinical programs, strengthen our financial position, and grow
Ironwood’s leadership within GI.”
Second Quarter 2023 Financial Highlights1 (in thousands,
except for per share amounts)
2Q
2023
2Q
2022
Total revenues
$107,382
$97,231
Total operating expenses2
1,190,521
41,576
GAAP net income (loss)2
(1,089,478)
37,080
GAAP net income (loss)
attributable to Ironwood Pharmaceuticals, Inc.2
(1,062,187)
37,080
GAAP net income (loss)
attributable to Ironwood Pharmaceuticals, Inc. per share –
basic
(6.84)
0.24
GAAP net income (loss)
attributable to Ironwood Pharmaceuticals, Inc. per share –
diluted
(6.84)
0.21
Adjusted EBITDA2
(1,034,182)
56,015
Non-GAAP net income (loss)2
(1,041,325)
37,761
Non-GAAP net income (loss) per
share – basic
(6.71)
0.24
Non-GAAP net income (loss) per
share – diluted
(6.71)
0.21
1.
Refer to the Reconciliation of
GAAP Results to Non-GAAP Financial Measures table and to the
Reconciliation of GAAP Net Income to Adjusted EBITDA table at the
end of this press release. Refer to Non-GAAP Financial Measures for
additional information.
2.
Includes 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 2023 Corporate Highlights
U.S. LINZESS
- Prescription Demand: Total LINZESS
prescription demand in the second quarter of 2023 was 47 million
LINZESS capsules, a 9% increase compared to the second quarter of
2022, 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 $269.7 million in the
second quarter of 2023, a 9% increase compared to $248.4 million in
the second quarter of 2022.
- Ironwood and AbbVie share equally in U.S. brand collaboration
profits. See the LINZESS U.S. Commercial Collaboration table at the
end of the press release. – LINZESS commercial margin was 71% in
the second quarter of 2023, compared to 69% in the second quarter
of 2022. See the U.S. LINZESS Full Brand Collaboration table below
and 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, was $180.3 million in the second
quarter of 2023, compared to $163.8 million in the second quarter
of 2022. See U.S. LINZESS Full Brand Collaboration table below and
at the end of this press release.
- Collaboration Revenue to Ironwood:
Ironwood recorded $104.8 million in collaboration revenue in the
second quarter of 2023 related to sales of LINZESS in the U.S., an
11% increase compared to $94.5 million for the second quarter of
2022. See U.S. LINZESS Commercial Collaboration table at the end of
the press release.
U.S. LINZESS Full Brand
Collaboration
(in thousands, except for
percentages)
Three Months Ended
June 30,
2023
2022
LINZESS U.S. net sales as
reported by AbbVie
$269,686
$248,351
AbbVie & Ironwood commercial
costs, expenses and other discounts
78,998
76,363
Commercial margin
71%
69%
AbbVie & Ironwood R&D
Expenses
10,356
8,214
Total net profit on sales of
LINZESS
180,332
163,774
Full brand margin
67%
66%
FDA Approval of New Indication for
LINZESS
- In June 2023, Ironwood announced that the U.S. Food and Drug
Administration (“FDA”) approved LINZESS as a once-daily treatment
for pediatric patients ages 6-17 years-old suffering from
functional constipation. LINZESS is the first and only FDA-approved
prescription therapy for functional constipation in this patient
population.
Acquisition of VectivBio Holding AG
(“VectivBio”)
- On June 29, 2023, Ironwood completed a tender offer to purchase
outstanding ordinary shares of VectivBio (the “VectivBio Shares”)
at a price per share of $17.00, net to the shareholders of
VectivBio in cash, without interest and subject to any applicable
withholding taxes. The aggregate consideration paid by Ironwood to
acquire the shares accepted for payment was approximately $1.2
billion. Ironwood financed the acquisition through proceeds from
the borrowings under a revolving credit facility entered into in
connection with the transaction, cash on hand, and cash of
VectivBio.
- As of June 30, 2023, Ironwood holds 98% of the outstanding
VectivBio Shares. Ironwood intends to effect a squeeze-out merger
under Swiss law to acquire the remaining outstanding VectivBio
Shares in the second half of 2023. The remaining outstanding
VectivBio Shares are expected to be settled by Ironwood in
cash.
Workforce Reductions and
Restructuring
- In April 2023, Ironwood reduced its workforce by approximately
10% of its headquarters-based personnel in an effort to further
strengthen the operational efficiency of the organization. The
workforce reduction was substantially completed during the second
quarter of 2023.
- In June 2023, Ironwood commenced the elimination of certain
positions in connection with the VectivBio acquisition. The
majority of the eliminations were initiated in June 2023 and the
remaining eliminations are expected to be substantially completed
during the third quarter of 2023.
Pipeline Updates
Apraglutide
- Ironwood is advancing apraglutide, a next-generation, synthetic
peptide glucagon-like peptide-2 (“GLP-2”) analog which Ironwood is
developing for short bowel syndrome with intestinal failure
(“SBS-IF”), a severe malabsorptive condition. Ironwood believes
apraglutide has the potential to be the new standard of care for
the treatment of SBS-IF based on its potency and pharmacological
properties. Ironwood is conducting a Phase III clinical trial,
STARS, designed to evaluate clinical benefit for both SBS-IF stoma
and colon-in-continuity patients with unique convenience of weekly
dosing. Enrollment is completed and topline results are now
expected in March of 2024.
- Ironwood is also conducting a Phase II proof-of-concept
clinical trial, STARGAZE, to evaluate apraglutide in patients with
steroid-refractory gastrointestinal acute Graft versus Host Disease
(aGvHD), a life-threatening condition that occurs when immune cells
from the donor attack a recipient’s healthy cells after an
allogeneic hematopoietic stem cell transplant. Ironwood expects
data for the STARGAZE Phase II clinical trial in the first quarter
of 2024.
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
PBC disease modifying therapy.
- COUR is currently conducting a clinical study for CNP-104
evaluating the safety, tolerability, pharmacodynamic effects and
efficacy of CNP-104 in PBC patients, with early data assessing
T-cell response from patients enrolled in the clinical study
expected in the second half of 2023, which Ironwood believes will
inform timing of topline data.
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 2023 Financial Results
- Total Revenues. Total revenues in the second quarter of
2023 were $107.4 million, compared to $97.2 million in the second
quarter of 2022.
– Total revenues 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. Total revenues in the
second quarter of 2022 consisted of $94.5 million associated with
Ironwood’s share of the net profits from the sales of LINZESS in
the U.S. and $2.7 million in royalties and other revenue.
- Operating Expenses. Operating expenses in the second
quarter of 2023 were $1,190.5 million, which includes a one-time
charge of $1,090.4 million of acquired IPR&D (“IPR&D”) from
the acquisition of VectivBio, compared to $41.6 million in the
second quarter of 2022.
– Operating expenses in the second quarter of
2023 consisted of $52.5 million in selling, general and
administrative (“SG&A”) expenses, and $34.6 million in research
and development (“R&D”) expenses, $13.0 million in
restructuring expenses and approximately $1.1 billion in acquired
in-process research and development. Operating expenses in the
second quarter of 2022 consisted of $30.1 million in SG&A
expenses and $11.5 million in R&D expenses.
- Interest Expense and Other Financing Costs. 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 expense recorded in the second quarter of
2023 included $1.3 million in cash expense and $0.5 million in
non-cash expense. Interest expense was $2.2 million in the second
quarter of 2022, in connection with Ironwood’s convertible senior
notes. Interest expense recorded in the second quarter of 2022
included $1.7 million in cash expense and $0.5 million in non-cash
expense.
- Interest and Investment Income. Interest and investment
income was $8.8 million in the second quarter of 2023. Interest and
investment income was $1.0 million in the second quarter of
2022.
- Loss on Derivatives. Ironwood recorded a loss on
derivatives of $0.7 million in the second quarter of 2022 as a
result of the change in fair value of its convertible note hedges
and note hedge warrants. Ironwood’s note hedge warrants and
convertible note hedges terminated unexercised upon expiration in
April 2023 and June 2022, respectively.
- Income Tax Expense. Ironwood recorded $13.3 million of
income tax expense in the second quarter of 2023, 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 $16.7 million of income tax expense in
the second quarter of 2022.
- GAAP Net Income (Loss) Attributable to Ironwood. GAAP
net loss was ($1,062.2) million, or ($6.84) per share (basic and
diluted) in the second quarter of 2023, which includes a one-time
charge of ($1,090.4) million of acquired IPR&D from the
acquisition of VectivBio, compared to GAAP net income of $37.1
million, or $0.24 per share (basic) and $0.21 per share (diluted)
in the second quarter of 2022.
- Non-GAAP Net Income (Loss). Non-GAAP net loss was
($1,041.3) million, or ($6.71) per share (basic and diluted) in the
second quarter of 2023, which includes a one-time charge of
($1,090.4) million of acquired IPR&D from the acquisition of
VectivBio, compared to non-GAAP net income of $37.8 million, or
$0.24 per share (basic) and $0.21 (diluted) in the second quarter
of 2022.
– Non-GAAP net income 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 ($1,034.2) million
in the second quarter of 2023, which includes a one-time charge of
($1,090.4) million of acquired IPR&D from the acquisition of
VectivBio, compared to $56.0 million in the second quarter of
2022.
– Adjusted EBITDA is calculated by
subtracting mark-to-market adjustments on derivatives related to
Ironwood’s 2022 Convertible Notes, restructuring expenses,
acquisition-related costs, net interest expense, income taxes,
depreciation and amortization, and acquisition-related costs, from
GAAP net income. See Non-GAAP Financial Measures below.
- Cash Flow Highlights. Ironwood ended the second quarter
of 2023 with $175.3 million of cash and cash equivalents, compared
to $656.2 million of cash and cash equivalents at the end of
2022.
– Ironwood generated approximately $35.0
million in cash from operations in the second quarter of 2023,
compared to $61.4 million in cash from operations in the second
quarter of 2022.
– The acquisition of VectivBio was funded
through proceeds from a revolving credit agreement, cash on hand
and cash of VectivBio.
- Ironwood 2023 Financial Guidance. Ironwood is increasing
its 2023 U.S. LINZESS net sales and total revenue growth guidance
and updating its adjusted EBITDA financial guidance.
Prior 2023 Guidance
Updated 2023 Guidance
U.S. LINZESS Net Sales Growth
3% to 5%
6% to 8%
Total Revenue
$420 to $435 million
$435 to $450 million
Adjusted EBITDA1
>$250 million
~ ($900) million2
Includes a one-time charge of
approximately $1.1 billion
from
acquisition of VectivBio
1 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 income.
2 Updated 2023 adjusted EBITDA
guidance includes 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. For
purposes of this guidance, Ironwood has assumed that it will not
incur material expenses related to additional business development
activities in 2023.
Non-GAAP Financial Measures
Ironwood presents non-GAAP net income and non-GAAP net income
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, 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.
- Restructuring expenses are considered to be a non-recurring
event as they are associated with distinct operational decisions.
Included in restructuring expenses are 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 income. The adjustments are
made on a similar basis as described above related to non-GAAP net
income, 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 and non-GAAP net income per share to GAAP net
income and GAAP net income per share, respectively, and for a
reconciliation of adjusted EBITDA to GAAP net income, please refer
to the tables at the end of this press release.
Ironwood does not provide guidance on GAAP net income or a
reconciliation of expected adjusted EBITDA to expected GAAP net
income 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
income for the guidance period.
Conference Call Information
Ironwood will host a conference call and webcast at 8:30 a.m.
Eastern Time on Tuesday, August 8, 2023 to discuss its second
quarter 2023 results and recent business activities. Individuals
interested in participating in the call should dial (888) 330-2384
(U.S. and Canada) or (240) 789-2701 (international) using
conference ID number and event passcode 4671230. 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 at approximately 11:30 a.m. Eastern Time on
August 8, 2023, running through 11:59 p.m. Eastern Time on August
22, 2023. To listen to the replay, dial (800) 770-2030 (U.S. and
Canada) or (647) 362-9199 (international) using conference ID
number 4671230. The archived webcast will be available on
Ironwood’s website for 14 days 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 global 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, and has additional operations 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
Twitter 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:
http://www.allergan.com/assets/pdf/linzess_pi
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.
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 demand, development, commercial
availability and commercial potential of linaclotide, including
pursuing highly differentiated GI assets to add to our portfolio,
and the drivers, timing, impact and results thereof; the potential
indications for, and benefits of, linaclotide; 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 2023; our ability to
develop apraglutide and the expected timing of receiving data from
the apraglutide clinical trials; the commercial potential of
apraglutide, including potential peak net sales, and the potential
of apraglutide to become the standard of care for patients with
SBS-IF; the potential of CNP-104 to be the first PBC disease
modifying therapy and the expected timing of receiving data from
the clinical study for CNP-104 in PBC patients and the results
thereof, and the belief that this will inform timing of topline
data; our plan to advance IW-3300 including the timing and results
thereof; our plans for completing statutory squeeze-out merger, and
the expected timing thereof. 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
product candidates; the risk that clinical programs and studies,
including for the linaclotide pediatric program, apraglutide,
IW-3300 and CNP-104, 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 and clinical studies may not be replicated in later
studies; the risk that we or our partners are unable to obtain,
maintain or manufacture sufficient LINZESS or our product
candidates, or otherwise experience difficulties with respect to
supply or manufacturing; the efficacy, safety and tolerability of
linaclotide and our product candidates; the risk that the
commercial and therapeutic opportunities for LINZESS or our product
candidates are not as we expect; decisions by regulatory and
judicial authorities; the risk we may never get additional patent
protection for linaclotide and other product candidates, that
patents for linaclotide 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
are not successful or that any of our product candidates 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 we are unable to manage our expenses or cash use, or
are unable to commercialize our products as expected; the impact of
the COVID-19 pandemic; and the risks listed under the heading “Risk
Factors” and elsewhere in Ironwood's Annual Report on Form 10-K for
the year ended December 31, 2022, and in our subsequent Securities
and Exchange Commission filings.
Condensed Consolidated Balance
Sheets
(In thousands)
(unaudited)
June 30,
2023
December 31,
2022
Assets
Cash and cash equivalents
$
175,321
$
656,203
Accounts receivable, net
118,990
115,458
Prepaid expenses and other current
assets
22,500
7,715
Restricted cash
788
1,250
Total current assets
317,599
780,626
Restricted cash, net of current
portion
510
485
Accounts receivable, net of current
portion
-
14,589
Property and equipment, net
5,876
6,288
Operating lease right-of-use assets
13,319
14,023
Intangible assets, net
4,096
-
Deferred tax assets
257,900
283,661
Other assets
3,920
847
Total assets
$
603,220
$
1,100,519
Liabilities and Stockholders’
Equity
Accounts payable
$
3,505
$
483
Accrued research and development costs
20,122
5,258
Accrued expenses and other current
liabilities
79,585
16,700
Current portion of operating lease
liabilities
3,095
3,065
Current portion on convertible senior
notes
199,083
-
Note hedge warrants
-
19
Total current liabilities
305,390
25,525
Operating lease liabilities, net of
current portion
15,598
16,599
Convertible senior notes, net of current
portion
197,974
396,251
Revolving credit facility
400,000
-
Other liabilities
31,035
9,766
Total stockholders’ equity (deficit)
(346,777)
652,378
Total liabilities and stockholders’
equity (deficit)
$
603,220
$
1,100,519
Condensed Consolidated
Statements of Income
(In thousands, except per
share amounts)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Revenues
Collaborative arrangements revenue
$
107,382
$
97,231
$
211,443
$
194,760
Total revenues
107,382
97,231
211,443
194,760
Operating expenses:
Research and development
34,577
11,452
47,424
22,274
Selling, general and administrative
52,484
30,124
83,601
58,985
Restructuring expenses
13,011
-
13,011
-
Acquired in-process research and
development
1,090,449
-
1,090,449
-
Total operating expenses
1,190,521
41,576
1,234,485
81,259
Income (loss) from operations
(1,083,139)
55,655
(1,023,042)
113,501
Other income (expense):
Interest expense and other financing
costs
(1,840)
(2,207)
(3,367)
(4,548)
Interest and investment income
8,757
1,018
16,029
1,248
Gain (loss) on derivatives
-
(681)
19
49
Other income (expense), net
6,917
(1,870)
12,681
(3,251)
Income (loss) before income taxes
(1,076,222)
53,785
(1,010,361)
110,250
Income tax expense
(13,256)
(16,705)
(33,403)
(34,369)
GAAP net income (loss)
(1,089,478)
37,080
(1,043,764)
75,881
Less: GAAP net income (loss) attributable to noncontrolling
interests
(27,291)
-
(27,291)
-
GAAP net income (loss) attributable to
Ironwood Pharmaceuticals, Inc.
$
(1,062,187)
$
37,080
$
(1,016,473)
$
75,881
GAAP net income (loss) attributable to
Ironwood Pharmaceuticals, Inc. per share—basic
($6.84)
$
0.24
($6.56)
$
0.49
GAAP net income (loss) attributable to
Ironwood Pharmaceuticals, Inc. per share—diluted
($6.84)
$
0.21
($6.56)
$
0.42
Reconciliation of GAAP Results
to Non-GAAP Financial Measures
(In thousands, except per
share amounts) (unaudited)
A reconciliation between net
income on a GAAP basis and on a non-GAAP basis is as follows:
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
GAAP net income (loss)1
$
(1,089,478)
$
37,080
$
(1,043,764)
$
75,881
Adjustments:
Mark-to-market adjustments on the
derivatives related to convertible notes, net
0
681
(19)
(49)
Amortization of acquired intangible
assets
4
-
4
-
Restructuring expenses
13,011
-
13,011
-
Acquisition-related costs
35,681
-
35,681
-
Tax effect of adjustments
(543)
-
(543)
-
Non-GAAP net income (loss)1
$
(1,041,325)
$
37,761
$
(995,630)
$
75,832
A reconciliation between basic
net income 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,
2023
2022
2023
2022
GAAP net income (loss) attributable to
Ironwood Pharmaceuticals, Inc. per share – basic
$
(6.84)
$
0.24
$
(6.56)
$
0.49
Plus: GAAP net income (loss) attributable
to noncontrolling interests – basic
$
(0.18)
-
$
(0.18)
-
Adjustments to GAAP net income (loss) per
share (as detailed above)
0.31
-
0.31
-
Non-GAAP net income per share (loss) –
basic
$
(6.71)
$
0.24
$
(6.43)
$
0.49
Weighted average number of common
shares used to calculate net income per share — basic
155,367
153,304
154,912
155,550
A reconciliation between diluted
net income 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,
2023
2022
2023
2022
GAAP net income (loss) attributable to
Ironwood Pharmaceuticals, Inc. per share – diluted
$
(6.84)
$
0.24
$
(6.56)
$
0.49
Plus: GAAP net income (loss) attributable
to noncontrolling interests – diluted
$
(0.18)
-
$
(0.18)
-
Adjustments to GAAP net income per share
(loss) (as detailed above)
0.31
-
0.31
-
Non-GAAP net income per share (loss) –
diluted
$
(6.71)
$
0.21
$
(6.43)
$
0.42
Weighted average number of common
shares used to calculate net income per share — diluted
155,367
184,876
154,912
187,315
1 GAAP and non-GAAP net loss for
three months ended June 30, 2023 and for six months ended June 30,
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
Reconciliation of GAAP Net
Income to Adjusted EBITDA
(In thousands)
(unaudited)
A reconciliation of GAAP net
income to adjusted EBITDA:
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
GAAP net income (loss)1
$
(1,089,478)
$
37,080
$
(1,043,764)
$
75,881
Adjustments:
Mark-to-market adjustments on the
derivatives related to convertible notes, net
0
681
(19)
(49)
Restructuring expenses
13,011
-
13,011
-
Interest expense
1,840
2,207
3,367
4,548
Interest and investment income
(8,757)
(1,018)
(16,029)
(1,248)
Income tax expense
13,256
16,705
33,403
34,369
Depreciation and amortization
265
360
551
715
Acquisition-related costs
35,681
-
35,681
-
Adjusted EBITDA1
$
(1,034,182)
$
56,015
$
(973,799)
$
114,216
1 GAAP net loss and adjusted
EBITDA for three months ended June 30, 2023 and for six months
ended June 30, 2023 includes 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.
U.S. LINZESS Commercial
Collaboration1
Revenue/Expense
Calculation
(In thousands)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
LINZESS U.S. net sales as reported by
AbbVie2
$
269,686
$
248,351
$
519,900
$
480,685
AbbVie & Ironwood commercial costs,
expenses and other discounts3
78,998
76,363
145,406
137,379
Commercial profit on sales of LINZESS
$
190,688
$
171,988
$
374,494
$
343,306
Commercial Margin4
71%
69%
72%
71%
Ironwood’s share of net profit
95,344
85,994
187,247
171,653
Reimbursement for Ironwood’s commercial
expenses
9,407
8,458
19,135
17,118
Ironwood’s collaborative arrangement
revenue
$
104,751
$
94,452
$
206,382
$
188,771
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.
US LINZESS Full Brand
Collaboration1
Revenue/Expense
Calculation
(In thousands)
(unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
LINZESS U.S. net sales as reported by
AbbVie2
$
269,686
$
248,351
$
519,900
$
480,685
AbbVie & Ironwood commercial costs,
expenses and other discounts3
78,998
76,363
145,406
137,379
AbbVie & Ironwood R&D
Expenses4
10,356
8,214
19,006
16,380
Total net profit on sales of LINZESS
$
180,332
$
163,774
$
355,488
$
326,926
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 R&D 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/20230808149704/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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