Ironwood Pharmaceuticals, Inc. Q3 FY2024 earnings call

LINZESS Performance - LINZESS continues to have robust year-over-year prescription demand growth, with 13% increase in Q3, but faces pricing headwinds due to higher Medicaid prescriptions. ### Pipeline - Apraglutide NDA submission for short bowel syndrome patients on track for Q1 2025; presented new STARS Phase 3 findings at ACG with positive results on efficacy, tolerability, and once weekly dosing; decided not to exercise option to acquire CNP104 license and ended recruitment for IW-3300 Phase 2 study. ### Financials - Generated $10 million of operating cash flow and $26 million in adjusted EBITDA in Q3; amended credit facility to get $50 million additional liquidity and extend maturity to Dec 2028, repaid $25 million of revolving credit facility.

LINZESS: In the third quarter, prescription demand increased by 13%, with new to brand prescriptions also growing by 13% (seventh consecutive quarter of double-digit new to brand volume growth). LINZESS US net sales were $226 million. Revenue contribution is primarily from LINZESS.

- Maintaining full-year 2024 guidance: Expect LINZESS US net sales between $900 million and $950 million, Ironwood revenue between $350 million and $375 million, and adjusted EBITDA greater than $75 million.

- Pricing headwinds due to increase in Medicaid prescriptions as a percent of LINZESS business. ### - Uncertainty around the impact of 2025 Medicare Part D redesign on LINZESS.

Q: Could we see LINZESS commercial margin continue to expand and help offset pricing headwinds?

A: We believe there'll be a pricing headwind in 2025, haven't given specific 2025 guidance yet, but pleased with Q3 margins and will manage track expenses to draw profits from the brand.

Q: Potential for different contracting with payers as LINZESS nears end of commercial life?

A: Currently looking critically at how to increase profits and cash flow, including market access, contracting, media spend, and selling effort; objective is to increase margins and profitability.

Q: Size of salesforce needed for apraglutide and overlap with LINZESS team?

A: Existing LINZESS salesforce in gastroenterology has overlap with apraglutide prescribers, will fold apraglutide into existing selling effort with some additions for rare disease focus.

Q: $30 million charge reversal dynamic and fourth quarter inflection?

A: Charge reversal is due to timing differences in gross to net adjustments with AbbVie, which will even out over full year; fourth quarter tends to have more profit for LINZESS due to cyclical nature.

Q: SG&A costs for apraglutide pre-launch and R&D 2025?

A: Will provide 2025 guidance next year, but existing sales force infrastructure helps, and will give guidance on spend and launch when available.