IRONWOOD PHARMACEUTICALS INC Q1 FY2024 earnings call

Strategic Priorities

• Maximize LINZESS
• Advance GI pipeline
• Deliver sustained profits and cash flow

LINZESS Performance

• Prescription volume up 10% YOY in Q1 2024, with 18% new-to-brand growth, marking the fifth consecutive quarter of double-digit new-to-brand growth

Pipeline Progress

• Phase III STARS trial for apraglutide in short bowel syndrome with intestinal failure showed positive topline results, demonstrating potential as the first weekly GLP-2 therapy for eligible patients
• Exploratory STARGAZE trial for apraglutide in steroid-refractory GI acute graft versus host disease showed positive safety and tolerability, with secondary endpoints indicating efficacy
• CNP-104 Phase II proof-of-concept study in PBC completed patient enrollment and is on track to report topline results in Q3 2024, targeting evaluation of safety, tolerability, pharmacodynamics, and efficacy

In the first quarter of 2024, LINZESS maintained strong demand momentum with prescription volume increasing 10% year-over-year, supported by an 18% new-to-brand prescription growth. LINZESS U.S. net sales were $257 million, a 3% year-over-year increase. Ironwood's total revenue in Q1 was approximately $75 million, driven primarily by U.S. LINZESS collaboration revenue of $72 million, but down 28% year-over-year due to a $30 million change in estimate related to the LINZESS collaborative arrangement.

• Full year 2024 outlook: Expect LINZESS U.S. net sales decline in the mid-single digits percent, Ironwood revenue between $405 million and $425 million, and adjusted EBITDA greater than $120 million
• Impact of LINZESS gross-to-net change in estimate led to revised full year 2024 guidance

• Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially
• Mix changes in revenue recognition, such as government and contractual rebates, can impact financial results

Q: Can you provide color on efficacy across both stoma and colon-in-continuity patients?

A: Michael Shetzline stated that the primary endpoint included both stoma and colon-in-continuity patients, and they plan to share further data at DDW supporting efficacy in both populations Q: What was the breakdown of the $60 million gross-to-net adjustment?

A: Sravan Emany explained it was due to differences between AbbVie's gross-to-net estimates in 2023 and actual subsequent payments, primarily related to government and contractual rebates Q: What is the internal estimate on the durability of apraglutide treatment?

A: Michael Shetzline mentioned that apraglutide is a once-weekly therapy, and Phase III data supports its weekly administration and long-term potential Q: How should we think about benefit on endpoints like ALP with CNP-104?

A: Michael Shetzline explained the different mechanism of CNP-104 targeting PDC-E2 and the timeline for potential ALP response, noting it's an early time frame but aligned with the therapy's immunology focus Q: Will early data from the STARS study be shown at DDW?

A: Michael Shetzline confirmed they plan to present early data from the CIC patient population at DDW, supporting efficacy in both stoma and colon-in-continuity patients