• LINZESS Prescription Demand Growth: Increased 11% in Q2 2024.

• New-to-Brand Prescriptions Growth: Grew 15% year-over-year in Q2 2024.

• LINZESS US Net Sales: $211 million in Q2 2024.

• Ironwood Revenue: $94 million in Q2 2024, a decrease of 12% year-over-year.

• GAAP Net Loss: $1 million in Q2 2024.

• Adjusted EBITDA: $28 million in Q2 2024.

• Operating Cash Flow: Generated $33 million in Q2 2024.

• Cash and Cash Equivalents: $106 million at the end of Q2 2024.

• Revised Full-Year 2024 Guidance for LINZESS US Net Sales: Between $900 million to $950 million.

• Revised Full-Year 2024 Guidance for Ironwood Revenue: Between $350 million and $375 million.

• Revised Full-Year 2024 Guidance for Adjusted EBITDA: Greater than $75 million.

• Warning! GuruFocus has detected 7 Warning Signs with IRWD.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• LINZESS prescription demand increased by 11% in Q2 2024, with new-to-brand prescriptions growing by 15% year-over-year.

• Ironwood Pharmaceuticals Inc (NASDAQ:IRWD) generated $33 million in operating cash flow during the second quarter.

• Positive feedback received on apraglutide's clinical profile, with potential to be the drug of choice for short bowel syndrome.

• Progress made towards apraglutide NDA submission, with a rolling review process expected to begin in Q4 2024.

• Strong engagement with patient advocacy groups and positive feedback from patients and prescribers on apraglutide.

Negative Points

• LINZESS faces pricing headwinds due to higher-than-expected Medicaid utilization, impacting US net sales.

• Ironwood Pharmaceuticals Inc (NASDAQ:IRWD) revised its full-year 2024 guidance downward due to increased Medicaid utilization.

• Q2 2024 revenue decreased by 12% year-over-year, with a GAAP net loss of $1 million.

• Higher Medicaid utilization trends have magnified pricing pressures associated with the AMP cap repeal.

• Commercial margins for LINZESS were lower than anticipated, affecting profitability expectations.

Q & A Highlights

Q: As you think about 2025 and maximizing the net economics of LINZESS, how do you and AbbVie think about contracting and possibly backing off widespread preferred access to drive better net economics? A: Sravan Emany, CFO and COO: We are focused on net economics and will look at contracting strategies that optimize the net economics over the life of the product. Andrew Davis, Chief Business Officer: We will consider the net economics as we plan our contracting strategy for the future.

Q: On apraglutide, given the Q1 2025 submission completion timeline, do you still expect a launch in 2025? Can you provide details on optimizing the commercial use kit? A: Sravan Emany, CFO and COO: Approval could occur in 2025 or early 2026, depending on whether it receives priority or standard review. We are making the commercial vial kit easier for patient use based on human factor trials.

Q: The pricing pressure seems more than anticipated. Has anything changed in your thought process regarding revenue growth trajectory from 2024 onwards? A: Sravan Emany, CFO and COO: We anticipated higher utilization for 2024, but have seen even higher Medicaid utilization than expected, prompting us to revise guidance. This is driven by increased LINZESS use in Medicaid, AMP cap removal, and state-level changes.

Q: Can you talk about the remaining gating items for submitting the BLA for apraglutide and the feedback from potential prescribers? A: Michael Shetzline, CMO: We are finalizing the commercial supply chain and supporting documentation for the CMC components. Feedback from prescribers has been positive, especially regarding the once-weekly dosing and tolerability profile.

Q: Could you discuss your interaction with patient advocacy groups in the short bowel syndrome area with apraglutide and any discussions with payers? A: Michael Shetzline, CMO: We have strong links with patient advocacy groups, and feedback has been enthusiastic. The weekly administration is seen as a significant advantage. Discussions with payers are ongoing as we prepare for launch.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.