Loss Widens at IRWD on Higher Costs - Analyst Blog
January 16 2013 - 5:40AM
Zacks
Ironwood Pharmaceuticals, Inc.’s (IRWD)
fourth-quarter 2012 loss of 41 cents per share compared unfavorably
with the year-ago loss of 7 cents per share. Results were hurt by
higher selling, general and administrative (SG&A) and
collaboration expense. The Zacks Consensus Estimate hinted at a
loss of 50 cents per share.
Total revenues in the final quarter of 2012 were down 16.1%
year-over-year to $27 million. Revenues were above the Zacks
Consensus Estimate of $18 million.
Full year 2012 loss was 68 cents per share compared to year-ago
loss of 65 cents per share. Loss was narrower than the Zacks
Consensus Estimate of loss of 78 cents per share. Revenues in 2012
jumped 128.1% from the previous year to $150.2 million.
Linzess Launch Quarter Sales
The company and partner Forest Laboratories,
Inc. (FRX) reported Linzess (linaclotide) net product
sales of $19.2 million in the fourth quarter of 2012. Linzess sales
primarily consisted of initial trade stocking.
We remind investors that on Dec 17, 2012, the companies
announced the US launch of their drug Linzess. The launch followed
the approval of the drug by the US Food and Drug Administration
(FDA) in Aug 2012 for the treatment (once-daily) of adults
suffering from irritable bowel syndrome with constipation (IBS-C)
or chronic idiopathic constipation (CIC).
In the EU, approval came in November 2012 under the trade name
Constella. Ironwood Pharma is collaborating with Almirall, S.A. in
EU for the drug. The product is expected to be launched in the EU
in the first half of 2013. Ironwood Pharma is also working with its
Japanese partner, Astellas Pharma Inc. for the development of
linaclotide in Japan and other Asian countries.
To further analyze the effect of Linzess on abdominal symptoms
in patients suffering from CIC, Forest Labs and Ironwood Pharma
have initiated a phase IIIb clinical trial. Results from the trial
are expected in the second half of 2013.
Other Expenses
During the quarter, SG&A expenses surged 139% to $33.3
million. The massive increase was primarily attributable to Linzess
commercialization costs. For 2013, Ironwood Pharma expects total
investment in sales and marketing for Linzess to be in the range of
$250-$300 million.
Research and development (R&D) expenses amounted to $28.3
million, an increase of 16.7%, reflecting investment in its
pipeline, which includes IW-9179 (phase II) for patients with
functional dyspepsia.
We currently have an Outperform recommendation on Ironwood
Pharma. The stock carries a Zacks Rank #2 (Buy) in the short run.
We expect investor focus to remain on the market performance of the
lead product, Linzess.
Pharma stocks, which currently look very attractive, are
Targacept Inc. (TRGT), Aeterna
Zentaris (AEZS) and Valeant
Pharmaceuticals (VRX). These companies carry a Zacks Rank
#1 (Strong Buy).
AETERNA ZENTARS (AEZS): Free Stock Analysis Report
FOREST LABS A (FRX): Free Stock Analysis Report
IRONWOOD PHARMA (IRWD): Free Stock Analysis Report
TARGACEPT INC (TRGT): Free Stock Analysis Report
VALEANT PHARMA (VRX): Free Stock Analysis Report
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