- Strong LINZESS® (linaclotide) demand: total prescription growth of 22% and sequential U.S. net product sales growth of 27% -
- Four mid- to late-stage linaclotide clinical trials expected by year end 2014 -
- Enrollment completed in IW-3718 Phase IIa clinical trial in refractory GERD; data expected in early 2015 -
- Phase IIa clinical trial for IW-9179 in gastroparesis expected to initiate by year end 2014 -
"During the third quarter, we made significant progress across all
aspects of our business. With continued strong prescription demand, we
now expect the LINZESS brand to be profitable going forward and to
deliver significant cash flows to the company into at least 2031," said
Third Quarter 2014 and Recent Highlights
LINZESS U.S. net product sales, as provided by Actavis plc, were
$79.7 millionin the third quarter of 2014, an increase of approximately 27% quarter over quarter. There was an approximately $8 millionunfavorable impact to U.S. net sales as a result of a change in accounting methodology following the integration of Forest Laboratories, Inc.into Actavis, and a decrease in wholesaler inventory levels during the quarter. Details include:
- Gross-to-net adjustments for the third quarter of 2014 were approximately 30% as compared to approximately 23% in the second quarter of 2014. Beginning in the third quarter of 2014, certain costs related to LINZESS co-pay assistance programs, such as the LINZESS Instant Savings Program, are being recognized as gross-to-net adjustments in conformity with Actavis's accounting methodology. Prior to the third quarter of 2014, these costs were recorded as sales and marketing expenses.
- Wholesaler inventory levels at the end of the third quarter decreased half a week from the end of the second quarter to the lower end of the two to three week range. Wholesaler inventory levels are expected to be in the two to three week range going forward.
July 1, 2014, Ironwood and Actavis increased the wholesale acquisition cost of LINZESS by 9.5% to its current price of $8.43per capsule.
Approximately 400,000 total LINZESS prescriptions were filled in the
third quarter of 2014, an increase of approximately 22% quarter over
quarter, and over 1.5 million LINZESS prescriptions have been filled
since the product's launch in
December 2012, according to IMS Health.
More than 70% of people with commercial insurance or
Medicare Part Dplans had unrestricted access to LINZESS as of September 2014. Additionally, as of September 2014, approximately 75% of people with commercial insurance had a co-pay of $30or less for LINZESS, through formulary coverage or the LINZESS Instant Savings Program.
- More than 95,000 healthcare practitioners have prescribed LINZESS to more than 440,000 unique patients since the product's launch, according to IMS Health.
Research & Development
Ironwood and Actavis continue to evaluate opportunities to strengthen
linaclotide's clinical utility in its indicated population, as well as
expand linaclotide into additional approved indications, populations
and formulations. The companies initiated two clinical trials in
support of this strategy:
- A randomized, double-blind, placebo-controlled Phase III clinical trial assessing the efficacy and safety of linaclotide in a once-daily 72 mcg dose in adult patients with chronic idiopathic constipation (CIC). If approved, the 72 mcg dose and the currently approved 145 mcg dose would provide a broader range of treatment options to physicians and the up to 35 million adult patients in the U.S. suffering from CIC. Data from this trial are expected in 2016.
- A randomized, double-blind, placebo-controlled Phase II clinical trial evaluating linaclotide for the treatment of adults suffering from opioid-induced constipation (OIC). It is estimated that more than 8 million people in the U.S. suffer from OIC. Data from this trial are expected in the second half of 2015.
Ironwood continued to leverage its GI and guanylate cyclase expertise
to advance its pipeline of product candidates designed to address
unmet needs across the upper and lower GI tract. Additionally,
Ironwood is investigating multiple candidates within its soluble
guanylate cyclase (sGC) program. Development highlights during the
third quarter and recent period include:
- Completed enrollment in a Phase IIa clinical study evaluating IW‐3718, an investigational gastric retentive bile acid sequestrant for adults with gastroesophageal reflux disease (GERD) symptoms who have not responded adequately to treatment with a proton pump inhibitor (PPI). There are an estimated 7 million Americans who suffer from symptoms of GERD despite treatment with a PPI, the current standard of care. Data from this trial are expected in early 2015.
Filed an investigational new drug application with the
U.S. Food and Drug Administrationfor IW-9179, a guanylate cyclase-C (GC-C) agonist designed to target the upper GI tract. In the fourth quarter of 2014, the company plans to initiate a Phase IIa clinical study evaluating the ability of IW-9179 to provide relief of gastroparesis symptoms. Gastroparesis is an upper GI disorder that affects an estimated 9 million Americans and is characterized by nausea, vomiting, bloating, early satiety and pain. Data from this trial are expected in the first half of 2016.
- Continued to advance the sGC program targeting multiple severe cardiovascular diseases. As part of these efforts, Ironwood expects to advance its first sGC candidate, IW-1973, into clinical development early in the first half of 2015.
Global Partnerships for Linaclotide
Astellas Pharma Inc. initiated a double-blind, randomized,
placebo-controlled Phase III clinical trial of linaclotide in adult
patients with irritable bowel syndrome with constipation (IBS-C) in
Japan, with patient enrollment expected to begin in the coming weeks. Under the terms of Ironwood's license agreement with Astellas, Ironwood will earn a $15 milliondevelopment milestone payment upon enrollment of the first patient. Astellas expects to complete the Phase III trial in 2016. In addition, Astellas now plans to expand its development of linaclotide in Japanand is entering into a Phase II clinical trial with linaclotide in adults with chronic constipation.
Ironwoodand AstraZeneca AB continue to enroll patients in a Phase III clinical trial of linaclotide in adults with IBS-C for China. Data from this trial are now expected in the second half of 2015 and, if approved by the China Food and Drug Administration, the companies anticipate that linaclotide could be commercialized in China in 2017.
Almirall, S.A. continues to commercialize CONSTELLA® in
Europe, where it is approved for adult patients with moderate to severe IBS-C and is available in 10 European countries, including the United Kingdom, Italyand Spain.
Corporate and Financials
Collaborative Arrangements Revenue. Collaborative arrangements
revenue was approximately
$16.9 millionin the third quarter of 2014 compared with approximately $6.8 millionin the second quarter of 2014. Revenue consisted of $13.5 millionin revenue associated with Ironwood's share of the net profits and losses from the sales of LINZESS in the U.S., as well as $3.4 millionrelated to the amortization of deferred revenue associated with consideration received from Ironwood's collaboration with Astellas, revenue recognized in connection with the collaboration with AstraZeneca, and royalty payments based on sales of linaclotide in other territories outside of the U.S.
Operating Expenses. Operating expenses were approximately
$53.6 millionin the third quarter of 2014, as compared to approximately $51.4 millionin the second quarter of 2014. Operating expenses consisted of approximately $25.1 millionin research and development (R&D) expenses, which included $2.2 millionin non-cash share-based compensation expense, and approximately $28.5 millionin selling, general and administrative (SG&A) expenses, which included $3.4 millionin non-cash share-based compensation expense.
Interest Expense. Interest expense was approximately
$5.3 millionin the third quarter of 2014 in connection with the $175 milliondebt financing executed in January 2013.
Net Loss. Net loss was approximately
$42.0 million, or $0.30per share, in the third quarter of 2014, as compared to approximately $60.4 million, or $0.44per share, in the second quarter of 2014.
Cash Position. Ironwood ended the third quarter of 2014 with
$265 millionof cash, cash equivalents and available-for-sale securities. Ironwood used approximately $39 millionof cash for operations during the third quarter of 2014, as compared to approximately $36 millionin the second quarter of 2014.
2014 Financial Guidance. Ironwood today updated its financial
guidance for 2014.
Total operating expenses are now expected to be in the lower end
of the previously-guided range of
$215 millionto $245 million. This guidance is based upon the Company's expectation of $105 millionto $120 millionin R&D expenses and $110 millionto $125 millionin SG&A expenses, both of which are expected to be in the lower end of their ranges. Non-linaclotide R&D expenses are expected to be approximately 45% of total R&D expenses.
In addition, Ironwood now expects its combined Actavis and
Ironwood total 2014 marketing and sales expenses for LINZESS to be
in the lower to mid-range of the previously-guided
$240 millionto $270 million.
- Total operating expenses are now expected to be in the lower end of the previously-guided range of
Conference Call Information
Ironwood will host a conference call and webcast at
About LINZESS (linaclotide)
LINZESS® is the first and only guanylate cyclase-C (GC-C) agonist
approved by the
LINZESS is thought to work in two ways based on nonclinical studies. LINZESS binds to the GC-C receptor locally, within the intestinal epithelium. Activation of GC-C results 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 placebo-controlled Phase III clinical trials of more than 2,800 adults, LINZESS was shown to reduce abdominal pain in IBS-C patients and increase bowel movement frequency in both IBS-C patients and CIC patients. Improvement in abdominal pain and constipation occurred in the first week of treatment and was maintained throughout the 12-week treatment period. Maximum effect on abdominal pain was seen at weeks 6-9 and maximum effect on constipation occurred during the first week. When a subset of LINZESS-treated patients in the trials were switched to placebo, they reported their symptoms returned toward pretreatment levels within one week, while placebo-treated patients switched to LINZESS reported symptom improvements. LINZESS is contraindicated in pediatric patients under 6 years of age. The use of LINZESS in pediatric patients 6 through 17 years of age should be avoided. In nonclinical studies, administration of a single, clinically relevant adult oral dose of linaclotide caused deaths due to dehydration in young juvenile mice. The safety and efficacy of LINZESS in pediatric patients under 18 years of age have not been established. In adults with IBS-C or CIC treated with LINZESS, the most commonly reported adverse event was diarrhea.
Linaclotide is a guanylate cyclase-C receptor agonist (GCCA) with visceral analgesic and secretory activities. Linaclotide is a 14-amino acid synthetic peptide structurally related to the endogenous guanylin peptide family. Both linaclotide and its active metabolite bind to the guanylate cyclase-C receptor, on the luminal surface of the intestinal epithelium. Through its action at GC-C, linaclotide has been shown to reduce visceral pain and increase GI transit in animal models and increase colonic transit in humans. Activation of GC-C results in an increase in concentrations of cyclic guanosine monophosphate (cGMP), both extracellularly and intracellularly. Extracellular cGMP decreases pain-fiber activity, resulting in reduced visceral pain in animal models. Intracellular cGMP causes secretion of chloride and bicarbonate into the intestinal lumen, through activation of the cystic fibrosis transmembrane conductance regulator (CFTR), which results in increased intestinal fluid and accelerated transit.
Linaclotide was discovered by scientists at Ironwood and is marketed by
Almirall, S.A. for the treatment of adults with moderate to severe IBS-C
LINZESS® and CONSTELLA® are trademarks owned by
Important Safety Information
WARNING: PEDIATRIC RISK
LINZESS is contraindicated in pediatric patients under 6 years of age. In nonclinical studies, administration of a single, clinically relevant adult oral dose of linaclotide caused deaths due to dehydration in young juvenile mice. Use of LINZESS should be avoided in pediatric patients 6 through 17 years of age. The safety and efficacy of LINZESS has not been established in pediatric patients under 18 years of age.
- LINZESS is contraindicated in pediatric patients under 6 years of age.
- LINZESS is contraindicated in patients with known or suspected mechanical gastrointestinal obstruction.
Warnings and Precautions
- LINZESS is contraindicated in children under 6 years of age. The safety and effectiveness of LINZESS in pediatric patients under 18 years of age have not been established. In neonatal mice, increased fluid secretion as a consequence of GC-C agonism resulted in mortality within the first 24 hours due to dehydration. Due to increased intestinal expression of GC-C, children under 6 years of age may be more likely than older children and adults to develop significant diarrhea and its potentially serious consequences.
- Use of LINZESS should be avoided in pediatric patients 6 through 17 years of age. Although there were no deaths in older juvenile mice, given the deaths in young juvenile mice and the lack of clinical safety and efficacy data in pediatric patients, use of LINZESS should be avoided in pediatric patients 6 through 17 years of age.
- Diarrhea was the most common adverse reaction of LINZESS-treated patients in the pooled IBS-C and CIC double-blind placebo-controlled trials. Severe diarrhea was reported in 2% of LINZESS-treated patients. The incidence of diarrhea was similar in the IBS-C and CIC populations.
- Patients should be instructed to stop LINZESS if severe diarrhea occurs and to contact their healthcare provider. The healthcare provider should consider dose suspension and rehydration.
- In IBS-C clinical trials, the most common adverse reactions in LINZESS-treated patients (incidence ≥2% and greater than placebo) were 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 clinical trials, the most common adverse reactions in LINZESS-treated patients (incidence ≥2% and greater than placebo) were 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%).
Please see full Prescribing Information including Boxed Warning: http://www.frx.com/pi/linzess_pi.pdf
This press release contains forward-looking statements. Investors are
cautioned not to place undue reliance on these forward-looking
statements, including, but not limited to, statements about our
development and commercialization plans for linaclotide, our product
candidates and the programs in our pipeline, including statements
regarding our LINZESS® patient awareness campaign and its impact; the
launch and commercialization of linaclotide in additional countries and
the timing thereof; market size, growth and opportunity, and potential
demand for linaclotide and our product candidates, as well as their
potential impact on applicable markets; the potential indications for,
and benefits of, linaclotide and our product candidates; the anticipated
timing of pre-clinical and clinical developments; the design, timing and
results of clinical and pre-clinical trials; the expected period of
patent exclusivity; the strength of the intellectual property protection
for our product and product candidates; LINZESS profitability and the
timing thereof; inventory levels and gross-to-net adjustments and their
impact on LINZESS net sales; milestone payments and the timing thereof;
and our company's financial performance and results and guidance related
thereto, including our projected 2014 operating expenses (including
certain research and development expenses and selling, general and
administrative expenses), cash flows, cash burn, and marketing and sales
expense for LINZESS. 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, but are not limited to, those related to
pre-clinical and clinical development, manufacturing, and formulation
development; decisions made by regulatory authorities; decisions made by
the U.S. Patent and Trademark Office and its foreign counterparts;
intellectual property rights of competitors or potential competitors;
efficacy, safety and tolerability of linaclotide and our product
candidates; competition in disease states; the commercial potential of
linaclotide and our product candidates; the risk that we may never get
sufficient patent protection for linaclotide and our product candidates;
the risk that our planned investments do not have the anticipated effect
on our company revenues, linaclotide or our product candidates; the risk
that we are unable to manage our operating expenses over the year due to
foreseeable or unforeseeable events or occurrences; the risk that we and
our partner, Actavis plc, are unable to commercialize LINZESS within the
guided range of expenses; and the risks presented by future business
decisions made by us, our partners and our competitors or potential
competitors. Applicable risks also include those that are listed under
the heading "Risk Factors" and elsewhere in Ironwood's Quarterly Report
on Form 10-Q for the quarter ended
Condensed Consolidated Balance Sheets
|Cash, cash equivalents and available-for-sale securities||$||264,961||$||197,602|
|Accounts receivable, net||14,686||3,213|
|Prepaid expenses and other current assets||11,389||6,168|
|Total current assets||304,081||229,128|
|Property and equipment, net||30,415||37,376|
|Liabilities and Stockholders' Equity|
|Accounts payable and accrued expenses||$||35,042||$||32,037|
|Current portion of capital lease obligations||1,128||1,139|
|Current portion of deferred rent||3,466||2,790|
|Current portion of deferred revenue||5,074||5,074|
|Current portion of long-term debt||9,347||—|
|Total current liabilities||54,057||41,040|
|Capital lease obligations||2,868||3,134|
|Total stockholders' equity||108,150||38,225|
|Total liabilities and stockholders' equity||$||346,168||$||278,962|
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended
Nine Months Ended
|Collaborative Arrangements Revenue||$||16,918||$||4,932||$||38,363||$||17,850|
|Cost and expenses:|
|Cost of revenue||—||2,021||12,442||6,670|
|Research and development (1)||25,122||23,016||74,408||79,862|
|Selling, general and administrative (1)||28,535||30,264||87,758||94,508|
|Total cost and expenses||53,657||61,483||174,608||223,114|
|Loss from operations||(36,739||)||(56,551||)||(136,245||)||(205,264||)|
|Net loss per share—basic and diluted||$||(0.30||)||$||(0.51||)||$||(1.12||)||$||(1.93||)|
|Weighted average number of common shares used in net loss per share —basic and diluted||139,234||120,769||135,799||114,141|
|(1) Non-cash compensation expenses reflected in the condensed consolidated statements of operations are as follows:|
|Research and development||$||2,151||$||2,349||$||7,112||$||7,274|
|Selling, general and administrative||$||3,385||$||2,850||$||10,510||$||8,017|
LINZESS U.S. Collaboration Revenue/Expense Calculation1
Three Months Ended
Nine Months Ended
|LINZESS U.S. net sales||$||79,670||$||34,444||$||203,228||$||67,709|
Commercial costs and expenses2
|Net profit (loss) on sales of LINZESS||$||10,646||$||(28,832||)||$||(5,136||)||$||(134,236||)|
|Ironwood's share of net profit (loss)||$||5,323||$||(14,416||)||$||(2,568||)||$||(67,118||)|
Ironwood's selling, general and administrative expenses3
|Profit share adjustment4||$||—||$||—||$||2,311||$||—|
|Ironwood's collaborative arrangement revenue (expense)||$||13,510||$||(6,182||)||$||23,735||$||(42,074||)|
1 Ironwood collaborates with Actavis on the development and
commercialization of linaclotide in
2 Includes cost of goods sold incurred by Actavis as well as selling, general and administrative expenses incurred by Actavis and Ironwood that are attributable to the cost-sharing arrangement between the parties.
3 Includes Ironwood's selling, general and administrative expenses attributable to the cost-sharing arrangement with Actavis.
4 Ironwood or Actavis may incur additional expenses related to certain contractual obligations, resulting in an adjustment to the company's share of the net profits as stipulated by the collaboration agreement.
Director, Corporate Communications
Director, Investor Relations
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