– LINZESS (Iinaclotide) EUTRx prescription
demand growth increased 10% year-over-year; LINZESS U.S. net sales
of $250 million, an increase of 8% year-over-year –
– GAAP net income of $46 million and adjusted
EBITDA of $60 million; ended Q1 2023 with $740 million in cash and
cash equivalents –
Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD), a GI-focused
healthcare company, today reported its first quarter 2023 results
and recent business performance.
“We are off to a terrific start to the year, as the strong
momentum of LINZESS continues,” said Tom McCourt, chief executive
officer of Ironwood. “In the first quarter, LINZESS prescription
demand increased over 10% year-over-year, with LINZESS achieving an
all-time high in new-to-brand patient volume. We look forward to
our upcoming June 14th PDUFA date for a potential pediatric
functional constipation indication in children and adolescents ages
6 to 17, which, if approved, would further expand the growth
potential of the brand. In addition, we made progress with our
pipeline programs, CNP-104 and IW-3300, and finished the quarter
with $740 million of cash and cash equivalents on our balance
sheet. We believe we are well-positioned to maximize LINZESS growth
and continue to build an innovative GI portfolio supporting the
next growth horizon for the company.”
First Quarter 2023 Financial Highlights1
(in thousands, except for per share amounts)
1Q 2023
1Q 2022
Total revenues
$104,061
$97,529
Total operating expenses
43,964
39,683
GAAP net income
45,714
38,801
GAAP net income per share – basic
0.30
0.25
GAAP net income per share –diluted
0.25
0.21
Adjusted EBITDA
60,383
58,201
Non-GAAP net income
45,695
38,071
Non-GAAP net income per share – basic
0.30
0.24
Non-GAAP net income per share –
diluted
0.25
0.21
- 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.
First Quarter 2023 Corporate Highlights
U.S. LINZESS
- Prescription Demand: Total LINZESS
prescription demand in the first quarter of 2023 was 45 million
LINZESS capsules, a 10% increase compared to the first 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 $250.2 million in the
first quarter of 2023, an 8% increase compared to $232.3 million in
the first 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 73% in
the first quarter of 2023, compared to 74% in the first 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 $175.2 million in the first quarter of
2023, compared to $163.2 million in the first 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 $101.6 million in collaboration revenue in the
first quarter of 2023 related to sales of LINZESS in the U.S., an
8% increase compared to $94.3 million for the first 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 March 31,
2023
2022
LINZESS U.S. net sales as reported by
AbbVie
$250,214
$232,334
AbbVie & Ironwood commercial costs,
expenses and other discounts
66,408
61,016
Commercial margin
73%
74%
AbbVie & Ironwood R&D Expenses
8,650
8,166
Total net profit on sales of LINZESS
175,156
163,152
Full brand margin
70%
70%
Pipeline Updates
Pediatric Program
- Ironwood and AbbVie are currently advancing the linaclotide
clinical pediatric program to potentially expand the clinical
profile of LINZESS (assuming FDA approval).
– In September 2022, Ironwood reported
positive topline data from the Phase III trial of LINZESS
(linaclotide) 72 mcg in pediatric patients aged 6-17 with
functional constipation. Ironwood, and its partner AbbVie,
submitted a supplemental New Drug Application (sNDA) to the FDA in
December 2022, which was granted priority review with a
Prescription Drug User Fee Act (PDUFA) date of June 14, 2023. There
are currently no FDA approved prescription therapies for the
treatment of functional constipation in pediatric patients.
CNP-104
- Ironwood has a collaboration and license option agreement with
COUR Pharmaceuticals Development Company, Inc. (“COUR”). This
agreement gives 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.
Leadership Changes
- On April 10, 2023, Ironwood determined to eliminate the role of
chief operating officer to streamline the executive leadership
team. Accordingly, Jason Rickard’s last day as Senior Vice
President, Chief Operating Officer, and as an employee of the
Company, will be May 12, 2023.
First Quarter 2023 Financial Results
- Total Revenues. Total revenues in the first quarter of
2023 were $104.1 million, compared to $97.5 million in the first
quarter of 2022.
– Total revenues in the first quarter of 2023
consisted of $101.6 million associated with Ironwood’s share of the
net profits from the sales of LINZESS in the U.S. and $2.5 million
in royalties and other revenue. Total revenues in the first quarter
of 2022 consisted of $94.3 million associated with Ironwood’s share
of the net profits from the sales of LINZESS in the U.S. and $3.2
million in royalties and other revenue.
- Operating Expenses. Operating expenses in the first
quarter of 2023 were $44.0 million, compared to $39.7 million in
the first quarter of 2022.
– Operating expenses in the first quarter of
2023 consisted of $31.1 million in selling, general and
administrative (“SG&A”) expenses, and $12.9 million in research
and development (“R&D”) expenses. Operating expenses in the
first quarter of 2022 consisted of $28.9 million in SG&A
expenses and $10.8 million in R&D expenses.
- Interest Expense. Interest expense was $1.5 million in
the first quarter of 2023, in connection with Ironwood’s
convertible senior notes. Interest expense recorded in the first
quarter of 2023 included $1.1 million in cash expense and $0.4
million in non-cash expense. Interest expense was $2.3 million in
the first quarter of 2022, in connection with Ironwood’s
convertible senior notes. Interest expense recorded in the first
quarter of 2022 included $1.8 million in cash expense and $0.5
million in non-cash expense.
- Interest and Investment Income. Interest and investment
income was $7.3 million in the first quarter of 2023. Interest and
investment income was $0.2 million in the first quarter of
2022.
- Gain on Derivatives. Ironwood recorded a gain on
derivatives of an insignificant amount in the first quarter of
2023, as a result of the change in fair value of its note hedge
warrants. Ironwood recorded a gain on derivatives of $0.7 million
in the first quarter of 2022 as a result of the change in fair
value of its convertible note hedges and note hedge warrants.
- Income Tax Expense. Ironwood recorded $20.1 million of
income tax expense in the first 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 $17.7 million of income tax expense in
the first quarter of 2022.
- GAAP Net Income. GAAP net income was $45.7 million, or
$0.30 per share (basic) and $0.25 per share (diluted), in the first
quarter of 2023, compared to GAAP net income of $38.8 million, or
$0.25 per share (basic) and $0.21 per share (diluted) in the first
quarter of 2022.
- Non-GAAP Net Income. Non-GAAP net income was $45.7
million, or $0.30 per share (basic) and
- $0.25 per share (diluted), in the first quarter of 2023,
compared to non-GAAP net income of $38.1 million, or $0.24 per
share (basic) and $0.21 (diluted) in the first 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. See Non-GAAP Financial Measures below.
- Adjusted EBITDA. Adjusted EBITDA was $60.4 million in
the first quarter of 2023, compared to $58.2 million in the first
quarter of 2022.
– Adjusted EBITDA is calculated by
subtracting mark-to-market adjustments on derivatives related to
Ironwood’s 2022 Convertible Notes, net interest expense, income
taxes, depreciation and amortization from GAAP net income. See
Non-GAAP Financial Measures below.
- Cash Flow Highlights. Ironwood ended the first quarter
of 2023 with $740.3 million of cash and cash equivalents, compared
to $656.2 million of cash and cash equivalents at the end of
2022.
– Ironwood generated $80.2 million in cash
from operations in the first quarter of 2023, compared to $64.1
million in cash from operations in the first quarter of 2022.
- Ironwood 2023 Financial Guidance. In 2023, Ironwood
continues to expect:
2023 Guidance
U.S. LINZESS Net Sales Growth
3% to 5%
Total Revenue
$420 to $435 million
Adjusted EBITDA1
>$250 million
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 from GAAP net income. For purposes of
this guidance, Ironwood has assumed that it will not incur material
expenses related to 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 of net gains and losses on
derivatives related to Ironwood’s 2022 Convertible Notes that are
required to be marked-to-market. 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.
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, net interest expense, income
taxes, depreciation and amortization 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 Thursday, May, 4 2023 to discuss its first 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 May
4, 2023, running through 11:59 p.m. Eastern Time on May 18, 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 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).
Under the guidance of our seasoned industry leaders, we continue to
build upon our history of GI innovation and challenge what has been
done before to shape what the future holds. 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.
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. 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. LINZESS should be taken at least 30
minutes before the first meal of the day.
LINZESS is contraindicated in pediatric patients less than 2
years of age. In neonatal mice, linaclotide increased fluid
secretion as a consequence of age-dependent elevated GC-C agonism
resulting in 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. The safety and effectiveness of
LINZESS in patients less than 18 years of age have not been
established.
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 in adults for the treatment
of both irritable bowel syndrome with constipation (IBS-C) and
chronic idiopathic constipation (CIC).
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 Pediatric Risk
- 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 GC-C agonism resulting in
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. The safety and effectiveness of LINZESS in patients less
than 18 years of age have not been established.
Diarrhea
- 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. If severe diarrhea occurs,
dosing should be suspended and the patient rehydrated.
Common Adverse Reactions (incidence ≥2% and greater than
placebo)
- In IBS-C clinical trials: 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 trials of a 145 mcg dose: 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%). In a CIC trial of a 72 mcg dose: diarrhea
(19% vs 7% placebo) and abdominal distension (2% vs <1%).
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; the 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; the believe that
the LINZESS prescription demand growth acceleration compared to Q4
2022 can be augmented by the potential approval of a pediatric
functional constipation indication in children and adolescents ages
6 to 17, potentially expending the growth potential of the brand;
the potential to expand the clinical utility of LINZESS based on
the recent sNDA submission in functional constipation for pediatric
patients aged 6 to 17 years old; 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; and our plan to advance IW-3300 including
the timing and results 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, CNP-104, IW-3300, and our product
candidates; the risk that clinical programs and studies, including
for the linaclotide pediatric program, 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 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 clinical pediatric programs in IBS-C and
functional constipation in 6 to 17 year-olds, CNP-104 and/or
IW-3300 are not successful or that any of our product candidates is
not successfully commercialized; the risk that the FDA will not
approve our sNDA submission for the potential indication in
functional constipation in pediatric patients aged 6-17; 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 (the “SEC”) filings.
Condensed Consolidated Balance Sheets
(In thousands) (unaudited)
March 31, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
740,342
$
656,203
Accounts receivable, net
115,749
115,458
Prepaid expenses and other current
assets
9,033
7,715
Restricted cash, short-term
1,250
1,250
Total current assets
866,374
780,626
Restricted cash, net of current
portion
485
485
Accounts receivable, net of current
portion
-
14,589
Property and equipment, net
6,015
6,288
Operating lease right-of-use assets
13,674
14,023
Deferred tax assets
267,909
283,661
Other assets
820
847
Total assets
$
1,155,277
$
1,100,519
Liabilities and Stockholders’
Equity
Accounts payable
$
118
$
483
Accrued research and development costs
2,874
5,258
Accrued expenses and other current
liabilities
17,771
16,700
Current portion of operating lease
liabilities
3,080
3,065
Note hedge warrants
-
19
Total current liabilities
23,843
25,525
Operating lease liabilities, net of
current portion
16,105
16,599
Convertible senior notes, net of current
portion
396,653
396,251
Other liabilities
11,824
9,766
Total stockholders’ equity
706,852
652,378
Total liabilities and stockholders’
equity
$
1,155,277
$
1,100,519
Condensed Consolidated Statements of
Income (In thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
2023
2022
Revenues
Collaborative arrangements revenue
$
104,061
$
97,529
Total revenues
104,061
97,529
Operating expenses:
Research and development
12,847
10,822
Selling, general and administrative
31,117
28,861
Total operating expenses
43,964
39,683
Income from operations
60,097
57,846
Other income (expense):
Interest expense
(1,527)
(2,341)
Interest and investment income
7,272
230
Gain on derivatives
19
730
Other income (expense), net
5,764
(1,381)
Income before income taxes
65,861
56,465
Income tax expense
(20,147)
(17,664)
GAAP net income
$
45,714
$
38,801
GAAP net income per share—basic
$
0.30
$
0.25
GAAP net income per share—diluted
$
0.25
$
0.21
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
March 31,
2023
2022
GAAP net income
$
45,714
$
38,801
Adjustments:
Mark-to-market adjustments on the
derivatives related to convertible notes, net
(19)
(730)
Non-GAAP net income
$
45,695
$
38,071
A reconciliation between basic net income per share on a GAAP
basis and on a non-GAAP basis is as follows:
Three Months Ended
March 31,
2023
2022
GAAP net income per share –basic
$
0.30
$
0.25
Adjustments to GAAP net income per share
(as detailed above)
(0.00)
(0.01)
Non-GAAP net income per share –basic
$
0.30
$
0.24
Weighted average number of common shares
used to
calculate net income per share — basic
154,452
157,821
A reconciliation between diluted net income per share on a GAAP
basis and on a non-GAAP basis is as follows:
Three Months Ended
March 31,
2023
2022
GAAP net income per share –diluted
$
0.25
$
0.21
Adjustments to GAAP net income per share
(as detailed above)
(0.00)
(0.00)
Non-GAAP net income per share –diluted
$
0.25
$
0.21
Weighted average number of common shares
used to calculate net income per share — diluted
186,680
189,540
Reconciliation of GAAP Net Income to
Adjusted EBITDA (In thousands) (unaudited)
A reconciliation of GAAP net income to adjusted EBITDA:
Three Months Ended
March 31,
2023
2022
GAAP net income
$
45,714
$
38,801
Adjustments:
Mark-to-market adjustments on the
derivatives related to convertible notes, net
(19)
(730)
Interest expense
1,527
2,341
Interest and investment income
(7,272)
(230)
Income tax expense
20,147
17,664
Depreciation and amortization
286
355
Adjusted EBITDA
$
60,383
$
58,201
U.S. LINZESS Commercial Collaboration1
Revenue/Expense Calculation (In thousands)
(unaudited)
Three Months Ended
March 31,
2023
2022
LINZESS U.S. net sales as reported by
AbbVie2
$
250,214
$
232,334
AbbVie & Ironwood commercial costs,
expenses and other discounts3
66,408
61,016
Commercial profit on sales of LINZESS
$
183,806
$
171,318
Commercial Margin4
73%
74%
Ironwood’s share of net profit
91,903
85,659
Reimbursement for Ironwood’s commercial
expenses
9,728
8,660
Ironwood’s collaborative arrangement
revenue2
$
101,631
$
94,319
1Ironwood 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.
2LINZESS 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.
3Includes 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.
4Commercial 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
March 31,
2023
2022
LINZESS U.S. net sales as reported by
AbbVie2
$
250,214
$
232,334
AbbVie & Ironwood commercial costs,
expenses and other discounts3
66,408
61,016
AbbVie & Ironwood R&D
Expenses4
8,650
8,166
Total net profit on sales of LINZESS
$
175,156
$
163,152
1Ironwood 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.
2LINZESS 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.
3Includes 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.
4R&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/20230504005066/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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