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Ironwood (IRWD) Q2 Earnings Miss, Keeps 2022 Sales Guidance

Ironwood Pharmaceuticals, Inc. IRWD reported second-quarter 2022 adjusted earnings of 21 cents per share, missing the Zacks Consensus Estimate of 31 cents. The company had reported adjusted earnings of 34 cents per share in the year-ago quarter.

Total revenues of $97.2 million missed the Zacks Consensus Estimate of $99 million. Revenues were down 6.5% year over year.

Shares of Ironwood were down 1.83% after-hours on Aug 4, following lower-than-expected earnings. The company’s shares have declined 1.6% so far this year compared to the industry’s decrease of 19.5%.

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Quarter in Detail

As reported by partner AbbVie ABBV, Ironwood’s sole marketed product — Linzess (linaclotide) — generated net sales of almost $248.35 million in the United States, down 4.2% year over year. Ironwood and AbbVie equally share Linzess’ brand collaboration profits or losses.

Ironwood's share of net profits from the sales of Linzess in the United States (included in collaborative revenues) was $94.5 million in the second quarter, down 6% year over year.

Per data provided by IQVIA, the prescription volume for Linzess capsules in the second quarter increased about 9% year over year. The prescription volume growth was driven by strong demand for Linzess, partially offset by the lower net price of the drug and inventory channel fluctuations.

The company recorded $2.7 million in royalties and other revenues compared with $3.7MILLION in the year-ago period.

We note that Ironwood has agreements with two partners — Astellas Pharma and AstraZeneca AZN — related to the development and commercialization of Linzess in Japan and China, respectively. Ironwood records royalties on sales of Linzess from Astellas and AstraZeneca in their respective territories.

Selling, general and administrative expenses were up 11.4% year over year to $30.1 million during the second quarter. Research & development expenses declined 5.8% year over year to $11.5 million.

2022 Guidance Maintained

Ironwood maintained its previously issued guidance for 2022. The company expects its total revenues to be between $420 million and $430 million. It expects U.S. sales of Linzess to increase in low single-digit percentage points.

The company expects adjusted EBITDA to be more than $250 million for the year.

Pipeline Update

Ironwood is progressing with the development of its linaclotide clinical program for pediatric patients. The data readout from a late-stage study evaluating linaclotide in functional constipation patients aged 6 to 17 years is expected in the second half of 2022.

Ironwood’s two early-stage studies are evaluating its pipeline candidates — IW-3300 and CNP-104 — for treating visceral pain conditions and primary biliary cholangitis, respectively.

Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise


Ironwood Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Ironwood Pharmaceuticals, Inc. Quote


Zacks Rank & Stock to Consider

Currently, Ironwood carries a Zacks Rank #5 (Strong Sell).

A better-ranked stock in the same sector is Ionis Pharmaceuticals IONS, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ionis’ loss estimates for 2022 have widened from $2.40 to $2.44 in the past 30 days. Shares of Ionis have returned 42.2% year to date. Earnings of IONS beat estimates in two of the last four quarters and missed the mark on the other two occasions. VRCA delivered an earnings surprise of 24.35%, on average.

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