IRWD - Earnings call transcript Q1 2019 | Ironwood Pharmaceuticals, Inc.

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Operator

Good morning. My name is James, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Ironwood Pharmaceutical first quarter 2019 investor update call. [Operator Instructions]. And now I would like to turn the call over to your host, Meredith Kaya. ahead. go Please

Meredith Kaya

thanks quarter and joining for us Good investor you update. first XXXX our morning, for

Our All included Risk considered annual as table crossed only Today's in be is current measures, obligation the measures. undertake our involve results found as measures. slides press Safe statements the to be and forward-looking on no please measures speak risks date on discussion morning release include and are refer these well which update may under for our ended the and superior should wire and supplement and differ A to uncertainties website, filings. cause of as Such GAAP reconciliations of materially. most on statements. such www.ironwoodpharma.com. to statements. the call of that our statements December accompanying available and this and statements GAAP to Factors non-GAAP the earlier actual the the XX-K we Form XX, future heading to for or our Statement these the financial Also as directly forward-looking report extent applicable, of risk SEC not release slide for at in comparable a factors the year Harbor XXXX, this To end substitute to press presentation, of can

be overview slides progress, our quarter, results Consylman the of Gina to GI During this quarter Mike by programs our first an review our guidance. XXXX Mallon close financial discussing today's will via development the with will Mark McCourt begin We'll and financial Shetzline referring will call, Tom available webcast. will highlight first commercial and

Events With I Mark. in, please of section to lines. to turn website you the those access will that, the For over the webcast of call to go our dialing

Mark Mallon

thanks to morning, for Good everyone, and transformative start today. for XXXX been Ironwood. had us a Meredith. joining Thanks, It

a the Ironwood the I'm new still It's our which today right reasons, greater of LINZESS, our being my Ironwood on future as about ever first reaffirmed the to financials strength more as assets, than quarter consolidated each for of and reported of I business, But the and can we and X, reflect been separation a them. During three I separation, were generate and a that. launched all strategy. that confident month, energized completion the believe first came XXXX April from the that we have about was month XXXX, CEO: First, of our just and in core value company. following in

start view. simple: medicines for believe will it I diseases the My and better is with patients and team, difference to do unmatched my expertise strengthening be Second, real vision many is that that we this, treatments. I begin and in my cash that to to time develop in and need commercialize and our our believe living unlock with new need for GI of To by Ironwood diseases is a are profit an of the fellow science shareholders. caliber value generating to third, emerging Ironwoodians in GI new and in for And make core. exciting

this second and portfolio given year-over-year, a and includes now many all profits And development in on rate to to GI in have advancing company's are grew in we its trend the lower made Phase year to say, pipeline. demand improve XXXX growth, we Phase of XX% strengthen our you needed are half in exploring sheet LINZESS cash seen time cost important our data how already. line, capital, impressive which our executing and of II seventh is we We've and As structure trial, brand such me the from and of about We've history. balance first best progress continuing to business our LINZESS cost this of decisions refinancing the for debt. XXXX. we growth, late-stage the our our late-stage We're to our heard expect bottom as -- since the our and beginning accelerating deliver clear XXXX initiate GI launch. We're our to program III

Of to course, more there's is do. plenty

sales in net For improve need we growth price to reduction was lower and to in inventory the staggered a example, net due the LINZESS channel. growth. quarter first modest The in

to price growth XXXX, beyond. we stabilize in be low sales very and percent our mid-single-digit are to and explore Allergan, to net expect in in to XXXX We ways with partner, working closely

ways also are millions the look the as more all of importantly, programs these exploring to back potential value and best to a profitable we And need. patients company, products, to to are maximum become believe get our to try We we and approved, committed identify for quickly in options. are ways to clinical need what to our accelerate shareholders we deliver if

who turn to everyone at these as companies the of should I'll team, accomplished. Continuing want appreciation they to business of my separation. a the by at Cyclerion, over colleagues proud Tom. a it it turn the high level rest such over tirelessly Ironwood significant to task, operate a year that I while last Before over through the this the X is an going and worked execute be not at my and to close that, easy deep With expressing change work I for great to

Thomas McCourt

satisfaction. its remains LINZESS clinical in high Thanks, U.S. broad and class, leader profile, by branded, prescription driven and payer access strong its market the Mark. patient physician

to quarter, we in mentioned, compared demand accelerating year. Mark last see annual As first were to XXXX LINZESS growth thrilled the during

we the first of new the in high the a due typically plans the beginning sequential quarter, prescriptions demand decrease to impact in in year. see in Additionally, resetting deductible of

to We is clear XXXX, quarter in fourth to November. of largely constipation compared For compared XX% this the fourth XXXX. X% the demand demand prescription generic-prescription new of the LINZESS' the decreased withdrawal growth example, for only MiraLAX in XXXX. XXXX, due of In of decreased first demand inflection the quarter to last first of quarter by quarter however, believe

country of alternative MiraLAX are fastest, many growth LINZESS the In our seeing option. the choosing as physicians in eroding prescription that their where fact, we're and patients belief more was areas pronounced reinforcing

We Medicare also channel, MiraLAX no is shift available. Part in D higher is this product utilization which this market that the driving constipation because the to in market-leading was believe for prescribed longer

April, we second of seeing the growth observed the since the to the are beginning appears some be strongest we into launch. weeks-to-date that Importantly, In demand first quarter in quarter. of the volume continuing

so which still we the to to to as being LINZESS generic-prescription in in that some Another is key indicator well of the see the growth, for positive LINZESS is new-to-brand the through market come. year-over-year year, filled in growth saw There XX% we're and way first event seeing quarter exceeding is quarter through compared the we up growth prescribing impact its last that XXXX. of this as months makes expect MiraLAX coming a of it continuing result market, first

the at share quarter prescription of LINZESS overall market substantially Looking LINZESS of substantially the products X XX Since grew MiraLAX, a share the and products. the the increased briefly market other generic-prescription XXXX, withdrawal points, grew whereas, more In by first has market. slower other to rate. at much branded branded compared

LINZESS our relative and the forward. even market growth puts Our increase share competitors branded to an in stronger to moving position

price. Turning to net

IBS-C was modest offset as during growth emerging price Cigna, Even quarter expect second, we some new of competitor D; utilization lower the emerging scale moving net impact the was to XXXX third, the the in to by into in a by net this price in of competitive which of the the of a to a LINZESS mentioned, Medicare continue such will to Aetna price the Mark threat a was first Scripts chronic digits, impacted moving and don't by in we quarter. price the significant and forward a class. first acquisition clinical in first, the lower coming net believe for and in Express the we substantial largely this constipation The profiles and some high XXXX. inventory impact a the by remainder with limited payer the be labels mid- and reduction single given The sales competitors products. expect As channel CVS higher Part X undifferentiated things: this in net see of forward; of the consolidation the and space, don't

to prescription since launch. available a Our LINZESS suffering access to chronic helped has and double-digit make every to and population of grow rates patients investments from has enabled constipation in year demand at payer broad both IBS-C us LINZESS

mitigate continue XXXX, we and/or working are For with to options That such future. contracting these our explore erosion more to access innovative we further said, selective partner expect to approaches. the price invest in payer reasons, closely beyond as to in

the which continue to of promotional LINZESS always believe patients our campaign, campaign building power recognized the brand. for most Turning the LINZESS performers our of to beginning to campaign has of April. among continued generating in of campaigns DTC consistently start of as incremental drivers sources in the responsive highly the recent be direct-to-consumer near-term new patients. some The I'll XXXX symptoms our and to we to the last activating last with with date. campaign physician has most our best LINZESS. learnings launched efforts, more potential their appropriate, their with on Yes if from as business and even to applying successful activate request the year's, By XXXX the year's discuss new been

will that study. generated near-term Another our be symptoms abdominal Phase of the from data is driver III potential growth

our think We If as abdominal discomfort do often report promoting all patients term possible. most important have as it than as pain, their as the symptoms and often We for bloating including expect anticipating abdominal typically completed now a results top constipation market data describe soon symptoms, symptoms describe when the patients to in discomfort, patients research line their of the actually positive, to and mid-XXXX. indicates catchall these data physicians, we're problematic. pain. we and using are as bloating which reporting they Further, begin describe as their IBS-C especially rather study, these that

one are the and by an to an and enthusiastic symptoms and the future we new for can multiple a opportunity the to and population data of role whole category in the from even to IBS-C. of additional committed All can And summary, positive, In We the the runway these patient of expected additional as well this IBS-C can the into to have more the into about continue as enable productive dialogue time. III of physicians we beyond. an adults to under Allergan suffering are as building patients patent If brand believe communicate ability these coverage drivers LINZESS. in we and growth tap XXXX long Phase physicians. about brand treatment treating benefits with lead play data see the key and LINZESS XXXX, a over

We linaclotide. are preparing in of our with China efforts global LINZESS our XXXX. half and partner, the to expected briefly launch Turning in for second an AstraZeneca, of

chronic our Japan, LINZESS IBS-C. partner is in Astellas, with marketing constipation patients either and to

mentioned Astellas pipeline steady the in I'll programs. fall. fiscal adults their of call to second turn with since continued see to over With The that, up for sales growth in the launch to Mike are indication they recently, compared call XXX% of to constipation last discuss XXXX. year GI XXXX As chronic the their our

Michael Shetzline

important decrease Tom, data with we'll in of XXXX being developed GERD. point an following reduction trials Thanks, we top with XXXX, to on defined I'll to I'll of acid baseline, Phase Also, XXXX, completion a A we're highlighting results as with progressing hard half at the for most the in persisting IIb a very expect pain U.S. one of also GERD persistent overall if XXXX, treatment XXXX of The sequestrant associated least an which start be heartburn morning, experiences working the trials. time from is in in XX these treatment the for with of a expense Phase minutes expect represents line. spend III incur and primary XXXX The in that on key of good and our program line XXXX the accelerate symptoms impact well, second that million regurgitation, in full highly available. expense of we for and bile with currently help is year which this reminder persistent and opportunity believe they the are estimated bothersome to of to persistent patients limited the point XXXX these based patient next report everyone. is end looking XX% the IBS can despite was bothersome of at abdominal the GERD suffering and one symptoms expected secondary data. a our end GERD heartburn PPIs. who the evaluated few approved therapies responder, diarrhea. from severity for We XXXX

with pain to abdominal treatment pain as believe be the fundamentally We're who a non-opioid new relieving abdominal Turning XXXX intestinal certain compared bowel a function. If from an have opportunity the party XXXX exploring on oral, of diseases. the by agent We several patients report LINZESS to a suffering more to these in may with a abdominal without have XXXX. to million GI XX recurring different diseases successful, profile broader for focused that pain-relieving potential clinical product franchise GI disorders. than create pain across we associated impacting

bowel of initially for the decided does with XXXX abdominal them that evaluate effect that suffering believe no that million to pain have the These two, treatment This of of are options the limited with on this on constipation. patients weeks the of available. frequent patients and U.S. estimated We show seeking key these trials explore population X XX in II majority are trial: we're patients. observed hypothesis over IBS-D call opportunity first to expeditiously discuss high patients questions an through unmet linaclotide II in answer now in And reasons: XXX with from the IBS-D to one, areas to on We're Phase number the trial of us this Most advance with abdominal possible. diligently to importantly, pass clinical second, IBS patients results. IBS-C XXXX Overall, there is versus the to XXXX placebo millions GI initiate our move pain. does pain help designed appropriate with quarter IBS-D unmet I X it and in significant comparably three We There in no trial of We to IBS-D need reduced data is demonstrated as focused Allergan approximately to key effect an micrograms Phase in Our XX pain safety, doses working represents our in Gina patient abdominal questions. care medical for and IBS-D both results XXX to are population. from answer a change relieve diarrhea; in month. explore developing represent to candidates track and to XXXX these reinforce suffering this pipeline need. financial medical treatment a XXXX tolerability people on over this as function. will XXXX to trial of the as abdominal trial and

Gina Consylman

our I Thanks, release financial detailed guidance. XXXX financial Mike. results refer first will to next our minutes few quarter updating financial and spend our press the information. Please highlighting for the

we early the includes to for Cyclerion-related pre-separation assets, discontinued expect As and of incurred periods until prior higher the expenses and approximately in quarterly X-month averages and the X- to full we filed liabilities results, million said, the company completed report in million higher approximately a quarter. reminder, Directionally, XXXX and we per separation-related quarter historical quarter an average quarter we our XXXX, meaning QX the With separation it as than Ironwood X-K XXXX discontinued that expenses second first that last quarters. both operations, operations $XX reported quarter. as in compared Cyclerion-related which as reflects expenses second in this for expect the in month, was new When year be not separation of first costs the XXXX XXXX. to we $XX reclassify

XX. with were commercial during a LINZESS $XX Ironwood the revenue net were sales LINZESS. resulting margin of XX%, million million. first the in $XX collaboration by API $XXX driven in Ironwood quarter were revenues million the during Linaclotide Turning Slide first of million, to Total quarter first primarily $X.X sales quarter.

and million to fluctuate during Allergan separation million to in reduction of We revenue with are API was sales adjusting down million due per to anticipate in the first expect million XXXX. year restructuring of to as we $X.XX be API the also Slide on $XX highlighting timing result cash the first quarter, full This during $XXX that quarter. turn compared XXXX million for approximately million. a in XXXX expenses consisted payment the SG&A. We expenses in the shipments primarily R&D or first our million operating net first or and flat net we financial was $XX per the The reported million $X.XX the X.XXX% loss to GAAP in to quarter, cash depending quarter I in in third first now quarter the quarter non-GAAP $XX on in $XXX restructuring that of $XX the loss $X our quarter cost We and of share. to non-GAAP goods our the $XX.X we approximately million $XX total expense, And in $XX.X million from quarter Note in in We guidance. will XX, incurred just quarterly now the recorded within investments. approximately sales million expense, during primarily expenses $XX in cash sold. in XXXX. SG&A separation-related recorded made of of share we and the expense disclosures. adjustments over of $X and first gross-to-net million payment during made was notes principle ended

on expect April time the of we in to separation company's Following first the profitability history. the to transition completion X, the for

sheet and enable debt. million. to continuing the Ironwood metric operational to portion that, cost With year and clear, to the be in separation step calculated our income core expenses. EBITDA and depreciation our Beginning flexibility, operations of call business EBITDA I this our calendar expect detailed strengthen general Q&A refinancing press Cyclerion-related to is existing invest we balance potential profits us an XXXX from excludes to taxes, we to be $XX important our the operations, of continue call. as and expense, from non-GAAP be by the To expected Specifically as turn operations it profitability subtracting from through in will and continuing ways to amortization to of relates our begin from in lower full interest continuing increase for operator to adjusted is the XXXX, our capital evaluate release. all expect into will greater Adjusted the over prudently than net net

Operator

[Operator Instructions].

question the Lebowitz of from comes Stanley. first David Your Morgan line from

David Lebowitz

With respect to you use will be assuming comes actually what wait present drug? Phase what NDA help upcoming an to the data the the positive, what to to you data, effectively I and, IIIb able be able out to has -- doctors immediately supplement? will for guess, And promote to

Thomas McCourt

is question. Based so This evidence the guidance, OPDP to take required I'll substantial claim. demonstrate that Yes. on the Tom, with you're

not required claim it's So we a existing to you have here. actually indication, it's change a that's as long have and in what exactly don't -- order promote as to the label within

have symptoms opportunity specific to speak within claim patients that population some So with very the the further than with to an pain. to IBS-C expand broadly and more set we better identify identify

is the medical with think is need, which that and then data, soon to the be language identifying to So use structure. being And discomfort broadly bloating we'll direct-to-consumer in use to their key with, able able unmet traditionally to patients working educating physicians is here on move the as advertising. the patients And forward have I expanded intention to addition piece through pain. in our first, be more communicate we'll certainly, FDA we claim as

tap and this to a patient new we unlock we as whole population as forward. move opportunity So a new see whole also into

Operator

line question of next Your the from Joseph JPMorgan. from Eric comes

Eric Joseph

how LINZESS the little guidance, to think sort about a are in the upfront whether the XXXX. launch additional commercial bit. how expansion of hoping the and P&L the commercial China LINZESS, in the just positive? it spend, whether I'm potential whether just in data thinking was unpack about that with to how curious, guidance And factors that launch, claims, from the symptoms the of spend that impacts associated just abdominal I growth wondering provided also

Mark Mallon

So me comment of both those. first let on

terms guide better that in going pressure but Tom we're We're captures as getting the in of in the to. isn't regards abdominal launch certainly It's included but likely. to the the of that expecting this in China, working of so growth, be In on the be be we've basically the -- second to impact in year, -- than the do ongoing more guided claim, this pricing mentioned, that So likely guidance. we to that. growth the in But half substantial believe symptom volume unlikely XXXX. won't reimbursement year, to we that

will really with occur has be along or so right? linked will only those been scaling And we behind as the once reimbursement comes substantial to obtained. onboard, resources the AstraZeneca, partner, our So that spend reimbursement brand

Eric Joseph

I if follow-up, A Great. could.

on seeing potentially for particular view GERD, HX curious anticipate as XXXX how acid potassium-competitive sort you or in whether persistent or I'm know the competitive And from you just and the them being PPI treatments to of as U.S. with in the blockers you're market. Just the the landscape differentiated well. what of class adapted any just

Mark Mallon

So I'm let Tom going that. on comment

Thomas McCourt

Sure.

has you mechanism. that know, unique a As been, look, clearly

like to more are these I this the think even reluctant products U.S. companies sensitive recognize potent. to is look PPIs, have them it's with market suppression chronic you regard and of right developed the Also, to pretty doesn't the is reason I it why that now come with think better than are which the much acid, traditional it. However,

suggesting not I'm aren't PPIs safe. They are. Now that

I think, enable a differentiator they're managing is But sleep, the they're what impact I will them very clearly what It's debilitating is GERD. this up to think, very think heartburn their Certainly, the approved these is forward XXXX disrupts drug patients clear think that really patients. with seeing regurgitation, I the these to But in will a It's get have very night. I we're wakes patient in the and which reduction offering. step persistent with and real us safe, unique and care. improve effective. the in we

heartburn, certainly, equally it unfolds, So data regard reduction with but symptoms. the improvement to in we're both of the as important, see, to regurgitation as excited the

Operator

question next of line from Vamil Divan Suisse. the Your comes from Crédit

Inanc Caner

you This from the LINZESS price? XXXX volume just expect is sales and of impact in you quarter? net what from of can And break quantify you for the the Could on reductions terms inventory guidance what of expect sort Vamil. down during you Inanc

Mark Mallon

Thanks that going question. Okay. Gina take for I to am ask to that.

Gina Consylman

Sure. Thank for the you question.

a where On growth, And channel, in demand. price tick to a than net of XXXX, and we then we year. burn was expect reduction guided seasonality lower that obviously QX. sales a burn components, price all typically work inventory on is provided in And we We've see to throughout year remember, digit the year slightly some was see the in out more throughout build inventory volume, as we X and of guidance themselves mid-single the QX QX to the low which QX. over The combination LINZESS see net the it's some fluctuation it modest some the ago. just we in QX then and just a down

Operator

Your next question from comes America. from the line Ying of Huang Bank of

Mark Mallon

Are Ying? on mute? you

Ying Huang

Can you now? hear me

Mark Mallon

Yes.

Ying Huang

benefited from the withdrawal MiraLAX. you generic for So of Tom, the guys

of was that to trend to you rest expanded forecast XXX XXXX? you for I do to I quarter MiraLAX the margin? the continue switching margin you commercial comment And the expect of on basis the compared first the by points about can year. from last saw Because you of X Do then maybe benefit not the secondly, from So or the for wondering, to LINZESS. year, continue the rest quarters, next,

Thomas McCourt

Yes.

this as to that a market-changing the option of thrust to to patients the has So needed market kind the this remove far something event, obviously, real near-term as prescription as and really created leader move MiraLAX, been else. of

to go the did Now majority OTC MiraLAX. over-the-counter

portion captured through those. And system. a working the there's we of significant course, MiraLAX of still However,

of MiraLAX, in I of As inventory of on as most we And mentioned change think, pharmacies, codes early, that more is this looks seeing and saw we striking we're country behavioral in part the areas prescription the our there in becoming so migrating like zip saw physicians remaining think or LINZESS greatest I option. an I to rapid where wasn't is, the preferred thing their a this -- growth. erosion

level. thoughtful we broad able at payer the we continuing But we there to in always And going with as most patients So of I opportunity to powerful we're compared drug. a on far a forward that's is if move third of see so what And move is to on overall can't hand, -- X that time to over as drug. take accelerate our certainly pretty see we other continue think we've see spot seen this been extremely patients I to appropriate to think with access. our going is the the in Two, is and we've it's over we option. exciting being growth. from we're seeing And I is time benefit probably just it that. this healthy brand's really of. investment And probably One, alteration and more actually certainly accelerating something to be brand things: thing we this the by, The the terms the elimination ignore invest still with in driven the terms think habit real that as what physicians a the prescribing of advantage of is lot as out as is certainly margins, to the treatment in we of think, I margins either. over couple there consistent years. wanted from can be growth last are We growth, improve satisfied that forward, a the want we wanted One, to

the a on like going margins I a this approach to is So to it continue brand. think, that still the growth it. thing brand, wonderful We're is growth but grow

Operator

the of Your from Meacham Barclays. comes line next question Geoff from

Geoffrey Meacham

a A commercial financial and one.

I you at I uptick let's when it, higher call sure wasn't is opportunity need, So it unmet it the Is view Then do starts? Phase LINZESS, one positive. compliance? with the the underserved IIIb new or dose how follow-up. the have Is on look quantifiable. is, incremental commercial Tom, it's a directly an the new need if assuming the for

Thomas McCourt

we've it Yes, not activate restricted the the isn't the ability has to In clear. the get know, really doses to claim three need going to the research just really and you really discomfort patients, dose. now further majority we're This do it that other so of well brand of identify And pain. new pain. into will is, our broadens on the words, the the to allows This tip Geoff, abdominal we a as abdominal the improvement which as which call the patient we patients broader have competitors when of dose and describe emerging tailor iceberg really is patient. What a physician market, move really as the and we're able in we what bloating, be can really discomfort set. seen competitors. getting population is in that and market we're bloating other with from you does, pain, What differentiate to

to and is. broaden it'll it patients in I clinical appropriate So view of to I to need, allows the us help the effectively us physicians' more It think profile. patient think strengthens speak also who

Geoffrey Meacham

rate? not time, persistent the you the rationale Tom, And getting most would of good pain say for abdominal the is that is, a

Thomas McCourt

this Yes, as than category with any brand. the persistent alternative. this you strong is quite think the LINZESS or with higher I in persistent, rate Adherence know, brand is

on those worse and the drug, that's that reason they the we long in days. and fact due Where reduction and XX-day beyond program and at adherence XX-day they weeks. keep we initiated come on started is, patients which that piece stronger time. So is actually patient to a before. that over when in where is we to enough the generally those discomfort, as experience you did the increases get their is to them believe it's adherence takes the XX% X can can patients seeing And XX being you're stop a you longer the benefit they adherence the XX%, are lose we able feels X than feel we is XX as first -- which in seeing symptoms back If to adherence the this supply. and a better why pain, what bloating XX-day supply of just much we're driving good. days, by patients patients XX that really same a have really And get co-pay The on

the I making sure full take business moving obviously recognize adequate forward the benefit payer access, So the an help have of certainly treat them sure make pull which is realize our us going of one, broad benefit they trial; that and to drug; they patients -- through. the really enable secret help is, so to they think treatment drug the

Geoffrey Meacham

second priority the all just as mentioned And a efficiency apologize. I profitability? I the strategic prepared maximizing debt of didn't reduction versus does remarks. question, this catch was But just the it, Okay. in think over rank I so how operational

Mark Mallon

will for that question. thanks you think, take Geoff, I additional I that and an So then, can add comment. maybe, Gina,

first well as operational an that So delivering and as the as say sure I is, going we're said, sure you generate three next priorities. on are impact be make which to debt, on the improving Those accelerating then positive to as will to maximizing and highlighted, will, have opportunity our think the certainly, priority also pipeline, the which growth, we that can we're efficiency. basically would bottom is refinance list the line. LINZESS thing the we I make I our first we

that's right order capital our of the use of now. clear So

Operator

from next Your of Boris comes the and Peaker from Cowen question line Company.

Boris Peaker

XXXXs. on just time see one this in Just still early And sales Can as that? of billion the what if you so, were you in terms getting have to you comment that? $X to at point, mind? long-term in discussing line in we sometime guidance, guidance Do

Mark Mallon

just that cut off, Could the the... full get was Mark. question? just we half first make sure to want is repeat you so Because This

Boris Peaker

reach guidance. Sure. In in is that? remains behind there? are still that getting early anticipate Yes, yes. 'XX. LINZESS kind to what $X do what discussed $X kind assumptions in just I'm a year sales still it of the XXXXs, as past if key of it's so, That in whether LINZESS you And there. curious 'XX, maybe sometime billion the you out target And and in if a billion

Mark Mallon

Thanks for that question.

believe to driving ambition are brand, -- our $X we we be So that clearly and can still and committed this to is growth. billion brand

accelerate -- access good innovative a looking accelerated reasonable I when we guidance abdominal occurs, critical refine that price growth. if think, the, to that positive. Allergan we can important we in stabilize area. assumptions the And that's year, working can that health to or payers. for penetration we that impact and the key much now we're price, beyond remain hard and the of can positive -- more XXXX. erosion, very targeting, really are the is also much current is right we that now. the are ways we claim a think sort unmet growth have level more And contracting most continue it's into effectively is And the have of think And new And It's, balance say, how price. we put with obviously, for the maintaining And guidance thing then the priority factors our the current care, I think to for uncertainty patients see but but for drive on determine let's near about we with start a us think that strategy overall the in I have continuing there's and the symptoms how growth. we've volume in and too the across term of our have lots then I to then the symptoms at given at really can can need

Boris Peaker

follow-up term. a long the on just And

the mentioned and essentially does or I'm and outside the be just settlement that I'm You LINZESS, of formulation -- a the all till include curious, patent just formulation until that? will just existing exclusivity -- delayed-release XXXX. for formulation

Mark Mallon

Yes.

positive been the had importantly, been in to remain -- has IP or very and also we've So specific the cases the -- but to composition the the as so forms to specific around confident talking the date. that's in we now the that evidenced patent and course, confident have to that have we all formulation current IR overall our have by cases far reached about And And we matter we're and matter, on we've of settlements covers the XXXX. linaclotide of formulation. very settled been the yes, IP both we're have the of of substance market. date -- And current

Thomas McCourt

piece well. to there that, Mark, it's the to release. the is I delayed think note as some important innovative probably other And IP there's clearly

So novel, very is that so XXXX, as at substance for we're this, confident at I see patent. beyond patent. looks least expand we certainly an extension can the we in and look unique there the patent and think there matter These IP XXXX, pure the we of

Mark Mallon

you Thank clarifying, Tom. Absolutely. for

Boris Peaker

-- And is a run the out time Like IP would on for line that? XXXX? for when

Thomas McCourt

guidance here. way it finding far X for in was on mid-XXXXs. think is was I'm as effect now, consistently I amplification estimating symptom it's -- Again, gotten to the this if And a the think Correct we've certainly, But I'm colon. far so between we're given, separate on probably I a of unique novel And the the somewhere IP. see this wrong. think, as I the impact right and me kind very us not its if we've like that's we mistaken pain, pain mechanisms in the relief. of

Mark Mallon

period the we get mid-'XXs into to going was to product we IP I importantly, with developed, say and well have a substantial so No, the time launched, protection. of believe approved

-- excited opportunity, yes, it's this we're very about So of course.

Operator

Wainwright. comes Selvaraju from from Ram Your next of H.C. line the question

Edward Marks

Ram. Edward is for This Marks on

up of question VIBERZI. sort clinical on one a Just and follow

wondering to for slated additional needed then might question, And XXXX, after studies for the complete just are clinical So trials enrollment? when the be what Phase the II? XXXX

Mark Mallon

Okay. Mike, could Those questions. them. take are two you great

Michael Shetzline

Sure.

could GERD So repeat second the supposed question, for half III are to question? second and Phase the line program, deliver program, we those the the persistent top in data And XXXX you the program XXXX get of XXXX.

Edward Marks

studies Phase additional read be II the positively? What should it needed out trial, might after Yes.

Michael Shetzline

That's a question. good

we the for is bowel diarrhea. an on give data also in current with the pain, but that is habits. rationale the as And So efficacy for explore mentioned, relieving the on to to us impact XXXX IBS trial, us abdominal

bowel As the program did I XXXX, there noted habits. no on with II impact Phase earlier we IBS-C was in

prove the into this potential GI II does real the And what IBS-C that's pain-relieving then those give But for real development IBS-D the next, data from approach. that's support also opportunities results what XXXX, branch GI with in the we have diseases. already program. And IBS-D that and other expedite an with then clearly Phase opportunity for to current unlock non-opioid data where to agent. path, of if the we So to terms a have could trial, that positive us clearly we pain the opportunity intestinal do from to

Mark Mallon

III also to least you're IBS-D. current I to timing this, do the a like just to trying additional if in assumption Thanks, think need think of because that Mike, for that. I say, But clarify, study we a of study the is get about think to a, one will Phase at type let's approval

Michael Shetzline

Yes, correct.

Phase So II correct. program, still will III the Phase and -- study

Mark Mallon

do a program. III Phase have we'll So to

and We way. and of on to is a do a Phase assumption we be already I that the fast also have we way creative that in to will have and required. see to leverage is safe for ways studies think there looking if But linaclotide there program innovative be wealth III will both that that data Phase a smart II the

or lower this directly thing that, in of on is possibly, Mike might pain. should The III depending interesting, could -- concept very Phase types be GI patients. used could of be could other something I referred in which as other require be proof be And a abdominal study into just to, product we that think, the those, a is different them, of might set

study Phase the for to We'll IBS-D. of possibilities have results to Phase XXXX of confirm do for a II. lots III So

Edward Marks

on follow-up VIBERZI extended out And then to like it just XXXX. was a agreement. the Looks

new wondering terms that just And some if wondering receive. was might always in Ironwood case part compensation are these some of adjustments be the how to Just new that then line the these that adjustments. in whether of or of was material of

Mark Mallon

how And think So Or that agreement then material I'm talk the I the the going we -- Gina the a was, compensation? And extension VIBERZI already this this to is agreement. had? is ask -- one, I question to was previously this is financial an of agreed? about heard

Gina Consylman

that product. is significant you, several Thank VIBERZI. closely and years, VIBERZI been just Allergan. Well, in is for across synergies their of reminder, we're LINZESS we've sales a Mark. working promotion And continue force it the to product And to Sure. think excited now our promoting with promote there we for a very

recently So additional are extension an it received as a just is renewal $X completed. that of that milestones but was there a may approximately million the agreement does year, cap for include of well. and the It be

Mark Mallon

payment additional is million revenue is milestones cap the hit for the possibility $X the if certain we for make for there So . to call. But

Thomas McCourt

Yes.

Operator

line from Berenberg comes next Capital. Your the from of Trucchio Patrick question

Patrick Trucchio

Can commentary does you remarks, areas on And prepared would business to LINZESS. Or should need Ironwood including, then enter Ironwood which disease? elaborate be or development GI this some your unmet have organically? alluded to in additional first, have this Ironwood development on interested And into? ability secondly, the you next? moving so, And would in I please of these areas Mark, which stage be we in? anticipate assets if most of interested a areas year follow-up of in

Mark Mallon

Okay.

the of area where of is. So key some let GI some and on science exciting he the need Mike the unmet to where comment in I'm sees going

be We consider going point, externally Because of we big them. our to mean, got the At really are capital competitive think clear, externally. the how thing, look in and -- look move been is in-house would that to at it if meet going there assets make can have shareholders, And to all significant very we first options. current good that get I good We've LINZESS additional sure then, would I to we've best we're the on exciting, to and for I with, chance what of at are make we're what on, cash pipeline. potentially we that these But have be very is are that forward, terms accelerate key continue the that we're opportunities versus have to are to opportunities pipeline. looking to value as commitment use clear maximize going if are two needs, a In we would see to a profit we at to delivering said, any to our generation. and our difference products.

at then if with to than in we program lot think to I Mike, plate once exciting other that certainly of the cash I into, generation looking point on a for But or areas LINZESS, rather say, now -- right we We've development be it in going anything -- this would area, this And sure. on be of preclinical opportunities, with would do our so possibilities. that couple and would want of on assets. sure a commitment making hand, we be the move do in-development delivering were the interest and really let's later-stage then that you to us? profit. we're well be get want we'll in comment to got

Michael Shetzline

was but which support opportunity I from the company, various the a have gut, attracted treat system Ironwood reasons not the but a on think focus diseases. health to of perspective, disease delivery from of, we And is as GI So components, actually. to this area X to the yes, question fully one only basically a care aspect had I I

which clearly is lumen. sort lumen the science, mean GI have fantastic, using a other if delivery technology to gut in XXXX, today target And just of the we looking targeted and to then GI you opportunities. disease don't happening we inflammation ways potential at have So done at deliver but the look in what's drugs for of I lot like with innovative

and using system. gut question part approaches the GI approaches a diseases. as delivery GI that peptide at we do cutting was second And are the can some of the things edge really oral So of

within has syndromes, functional very there things with but pain -- morbid well experience like is disease. we IBS, a us of anybody functional or constipation upper for bowel much within need and patient even landscape There history that really space related -- significant then And the other Ironwood's very a about And IBS been -- gastroparesis, touched and conditions been dyspepsia broader than general. need in inflammatory and disorders inflammatory number that and well just As the the lot the patients particular. within for GI including gut in the industry. inflammation have competitive knows treated are lot by diarrhea. high aren't lumen a with in medical extends is and conditions and today But gut there

extends I opportunity food of related things but tract. in people So patients. for allergy of which by disorders upper it all need there's a really the an esophagitis, which that pathology we disorder And of another aspect a the GI condition of is in clearly But an about And think gamut there. medical other driven and, every is is to tract. And whether may gut, GI have the and esophagus to huge focused. know then the eosinophilic gut aggregate, gut many it's by or are

focusing there I a a of is opportunity, attracted this and think here. venture that's leading one are to company. I am Because really health So to the main huge reasons become we GI care

Mark Mallon

that Patrick, answer did we your just -- question? did

Patrick Trucchio

That's Yes. then on follow-up to LINZESS. And helpful, just yes.

Just have generic we year, price Should in year in the next Amitiza the stabilizing terms year? new we'll the of competition following IIIb on readout competition pressure the market, in the market. expect LINZESS. data context Phase help new additional this on And to then pricing of stabilizing on in symptoms

Mark Mallon

yes, will some. short I because the mean, for it I is, think me, I answer help think

any Tom strengthened LINZESS And extent our focus negotiations in I to, the offer the I -- them, you highlight with really would better on no and this payers. And the continuous But is look where dominant don't bullet think, lead system as advantages a a any any that current competitors basically position in player. That they able the the puts have even that and have across I care further us think talk and in us his silver new if narrower versus price. at over competitors, here, as right. seeing there competitors, think we I competitors, market we're are will have the existing new basically that various to been we health a highlighted indications. differentiates and versus

bullet, a of pain for brand. I that as a the have help real think claimed well think, as but abdominal symptoms, in will bloating differentiator. It's and then silver value having it the certainly not other product will And us so protecting is a I

Thomas McCourt

the also of I in to impact the net. in which about you what gross affected XXXX. health to plans, broad group, keep a default broader year's important think happened force think very and it's us which clearly perspective this to consolidation to discounts When

I Medicare will, growth lower claim have on think, people. of could increase stabilize. of Because expansion tend that symptoms actually commercial utilization this think in business. of the these where our our be people the the to discounts side these D, younger to I have the which And traditionally Part tend think abdominal one the I areas symptom is

So growth to continue think going -- see that and I commercial to Part strong I D. do think across we're

pushed with this we're us is other the of forward. case that We've make really the seeing hard that moving separation, right seeing formulary. dominance options the and contracting now our that almost think positions in piece about think we we strong unrestricted market strength I sure the puts very brand as access, we're to position different a some in market exclusive share, in the in in had

forward market. not in brand As because leader the be market, of moving a in and critical our that the as market strong the may position

I cycle So at broaden think and our with of clinical the access. we'll brand continue critically the do need I assess competitors, to every where the look brand with programs. each say we to And emerging be we as the again, regard on the formulary to and strengthen utility to life contract

research, be They than at I labeling. believe, They patient different emerging of restrictive have largely have I And based population do indications. the the going on use look very different As limited drugs. competitors, LINZESS. see to these we market are using our they're a more

to I our we think, But I position strategy. want brand critical with to treat regard a think contracting growth investment regard think again, our marketing-leading in how growth. a to make now So on decisions I we we're be continue with this as more to to and

Operator

from BTIG. Your question Timothy of from Chiang line comes next the

Timothy Chiang

I a sales benefited last guys from quite bit Astellas. year, you from think

a arrangement year?. about was it total of mean do contribution you this your sort revenues. the XX% I expect think guys percentage from Astellas of I similar

Mark Mallon

let on Yes, I'll comment Gina that.

Gina Consylman

and You're right. able Astellas to of over recognize XXXX, API healthy were a to of million relatively it does margin in have XX% as approximately just We sales $XX well.

the to nice drop bottom So down a line. it was

that And sales total down with For little included expected revenue $XXX that guided to we've we've $XXX million. flat a API to of XXXX, we've said be also to more for to bit provided color is and XXXX. million in the that,

Timothy Chiang

I additional And long maybe mean, into you obviously, for China? to much a on population. arrangement provide robust. probably guys? a can mean, that's target how just color I to going turn I pricing you be -- it your big mean, But obviously, take this meaningful isn't for as will contributor in AstraZeneca how

Mark Mallon

So what touched upon key the of to I is the China. points think opportunity help you've frame in couple a

we will -- be is about reaching of potentially it number patients. So large million that XX reach. think could a patients Maybe AstraZeneca

to to exceptional think this of happen They're reimbursement, unlikely then now sort track province to a record. China you But annual rollout And but hopeful got a to AstraZeneca an it's XXXX. which really year. so then at. has has AstraZeneca there because I you national fantastic listing, level, is key be have accelerated. is through has moving getting get which reimbursement those process, a we're for provinces also get But

I in our seen we've will the XXXX, that the what to be expectations to hopefully after could in expect see -- be you so reimbursement, And U.S. what penetration uptake think would which an the within we similar

in -- opportunity, U.S. say, going is try scale the was to the you as not as it then as Now last pricing the the and to be to robust point

about I in China to think people like guide pricing generally, I think Europe.

you a speed. be that's new penetration to should very really more is leaders really expect But be when which, reimbursement. very we'll we which is take in see, able when get good and the great first China, product it and the XX so some for patients, But a probably And a constipation still we the and solution have take again, do pricing IBS-C I that sizable, I as key AstraZeneca of see. sizable been of million access, you we elsewhere -- in we've should to think one will China, like think, the with level

Timothy Chiang

just much the China how of in Mark, expect you do I mean, will self-pay. market be

Mark Mallon

self-pay. is going For I to be be a think, some will reimbursement. there But majority product like this, the

Timothy Chiang

one Okay. And guidance. just maybe continuing last adjusted It's question. just the from operations really EBITDA on

this quarter that guys this some figure I with were over how that operating figure. you get the benefits guys provided But reported point? the obviously, mean, you'll guidance pretty far you're do next after? the -- of quarter somewhat from of provide expense you commingled and, obviously, at some $XX expect get you to quarter Cyclerion. obviously, Obviously, separation And Cyclerion to You I do that million. or from numbers know

Mark Mallon

you would take that? Gina,

Gina Consylman

Sure.

to decided our a generating we provide So is to XX maybe time profit. the back just We what up start appropriate And really about in first this years to and metric metric. most thought with over why was start hard for this us.

point, an years And and generation has profitability. it's been existence move for us at to just a this time So loss. in Ironwood's here over and at XX and been to really exciting cash for running

announced good this metric around been color So several it we business. also sGC what's a And have a lesinurad separation Cyclerion completed just terminate the continue then is to with the commercial back in And strong that to we of think really throw of to at running different very greater dollars off profits. weeks We you alone. we starting QX the $XX if We've hundred put ago, XXXX, ran as And confident solid that about completed margins. million achieving at significant We and see profits we've know few continuing a just year in And early even And to a the that able hundred expecting in we're the addition, that loss versus X. that. a I've several it. million August. reminder and dollars. little our completion in to share in of we and LINZESS providing loss. in last about been feel And margins, longer We invest the complete. had million. bit April about obviously, January, license separation, on than that arrangement. of that just And mentioned feel we've just is

of they that quarter year-over-year were in first saw up You XXXX. already the

I that pretty number. have So hit a think, are it. it's I that would there And attainable concrete to think occurred events already confidence give us

Operator

Instructions]. from Koffler your the line of [Operator And comes Mizuho. from next Irina question

Irina Koffler

spend your that this apologize XXXX? looking Is at able I last quarter, margin year. you before, been has it just you'll XX% than your be million on And can $X.X comment asked this Allergan. commercial commercial but hit target some that to like with target it's earlier less than possible if

So of that think run can more rate, savings your if look $XX what's to going Because I -- collaboration that's expect million, Allergan drive additional I EBITDA at than with we as the feel million? $XX like a we target.

So into maybe you can that? delve further

Mark Mallon

Thanks two for questions. your

I'll that, more a comments and overall make couple me then on comment specifics. Let let on Gina of

an attractive target, I the terms continue commercial and mean, we mentioned -- a we've maintain this, bit mean to XX% in that the to for margin certainly have actually this improvement seen year. of LINZESS. very want we Tom And of I So

to the is going clear focus for the brand generate good we're wisely our money profitably to a growth. return. But spend to to So continue drive

we -- to can of levels. bottom the going volume more at are we're very that of at strong those how be drops my do can so protecting so And is XX%, that's or perspective, from job sustain growth double-digit XX% a What we the price we looking whether, to line. seen? the better healthy And I'm long have that

about So it. that's how thinking we're

to about I quarter. for spending The quarter, think level. the from spend we're say have terms thing We in the right fluctuations this at of you would quarter second

the we a the to for not basically, the this but major want right think going So at We from opportunities, we're at any when change we're growing and a it, brand largely at promotion, spending. both from looking that signal as do We're a margin a level. in to miss grow to physician improve point. sized consumer

you anything, we're to make think add past it. to than consistent with Gina? spending be a from major looking I want break so Do And more

Gina Consylman

from add much and don't earlier that to investment any there I changed hit has have back separation order termination back we don't Cyclerion just and -- reiterate business really pull in except comment, significantly the I'd LINZESS is need the EBITDA just to metric think to just too go with to to I my our that lesinurad. of really in provided. the already on

the metric. are think we I planning profitability and our still investment So brand make full behind for can

Mark Mallon

Operator, any are there more questions?

Operator

queue call the no at time. are questions further this back over. in I There turn

Mark Mallon

wrap we'll it then. I up think So

time all of and that is clearly Ironwood GI-focused time with new generating shareholders. as I It this is you industry-leading got So an execute strategy near-term an on right to to exciting business our my morning be for to significant us taking thanks opportunities to for and several now, said. We've and value build at patients colleagues.

then focus are clear our seeing got on for we've clearly initially advancing -- in in lay foundation of very and really and And our or of development accelerating and deliver positive III in GI and profits persistent been we've strategy, first GERD grow to execution cash LINZESS be XXXX II. Phase promising generation already and clear -- late-stage that critically, the XXXX I think to year, to to going IBS-D forward. for signs very the continue profit which is abdominal growth, where portfolio, pain Phase and

we're in generating use, of give for best do pipeline, if as the cash have use As can we've our is and we those highlighted, internal have What a use capital from to we going work really interest the going looking shareholder to we GI area, also terms us optimal is efficient wanting priority return. leverage what And really and a in that priorities, going to our unmet our being success have. these then companies we're forward. other LINZESS, this once job that -- really building is with is of in the to that is profit capabilities growing a great first perspective. and at But GI with there and delivering the already year of from capital that profit we need on

for available And call. the joining everybody so rest the again, day. thanks We're the of

the to additional If we'd Meredith, love you. you ahold continue you questions, how any all and have to know get of discussion. Thank

Operator

conference. today's concludes This

may You now disconnect.

Ironwood Pharmaceuticals (IRWD) 5 May 192019 Q1 Earnings call transcript