Earnings call transcript Q4 2022

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Operator

Good day, and welcome to the Ironwood Pharmaceuticals Q4 and Full Year 2022 Investor Update Conference Call. Today's call is being recorded. [Operator Instructions]. Thank you.

And I would now like to turn the conference over to Matt Roache, Director of Investor Relations. ahead. go Please

Matt Roache

Good our Savanna. update. thanks joining for Thank quarter morning, and for fourth investor full us you, and year XXXX

Our morning website. press this found release our on can be issued

statements. as Today's Form accompanying safe on Factors, XX-K uncertainties may and discussion actual call cause the we risk our well harbor day the SEC speak in December our the such XXXX, A involve Risk filings. presentation, to materially. statements these undertake on XX, slides forward-looking report heading, current to update ended that differ for statements. annual and results forward-looking as of and of obligation this risks the under year Such and include future no factors and slide as statements statement statements in of All available is

Also only considered our the substitute measures. for should of refer applicable, measures included as not these press reconciliations measures, or please directly a To superior non-GAAP are a which most end of and measures. GAAP at the the GAAP to extent for to be comparable release financial the tables to supplement to

During will strategic and commercial pipeline. review financial And review an Chief Officer, our McCourt, our priorities Financial Chief the today's results Mike will performance our update will our on Shetzline, LINZESS. discuss our Tom provide of and our call, Officer, CEO, Medical Sravan guidance. Emany,

Today's webcast slides. includes

go in, the you please of Events access accompanying those for So to the our separately. section dialing to of slides website

to call over the turn I'll Tom. that, With

Thomas McCourt

for morning, today. Good us Matt. and thanks joining Thanks, everyone,

as as the area and developing in ever. As in of solutions GI commitment we need begin to our innovative XXXX, high strong unmet is advancing

care lot be we progress and to past team. patients. with hard treatment a have for closed And Ironwood dedication, made advancing proud made of thanks I'm to while diseases, back in the year, redefining proud very we the we standard XXXX Looking of important the of GI their in of. -- work

maximize demand and You've priorities, about our generate strengthen that sustained GI LINZESS, guidance, I'm made full all say strategic on even our pillars. are innovative based focused prescription and of X delighted LINZESS to remain our and seek our talk believe growth, deliver in we us approach continue on our EBITDA drive progress to X well profits strides strategic strategy for adjusted we year flow. strong cash and heard to where XXXX. we we I positioned across portfolio confident in greater success and delivered key

of quick with key what X, achievements begin the strategic for against priorities some in of Slide Let's we on our overview and a expect XXXX. XXXX

constipation. LINZESS idiopathic demand maximize LINZESS. continues see chronic widespread care adults growth, acceptance as with the for profitability IBS-C among to and leading strong branded prescription health treatment prescription First, and practitioners

of The continued XX% In potential, in XXXX, starts, prescription high a of reached high which X% than all-time growth demand year-over-year. share, growing which future demonstrate end to increased patient new market achieving of an December. brand lead leadership by more for as its market all-time the indicator TRx and is an

growth leverage XXXX. over margins to We're population. patient particularly XX, excited priority announced and XX we X our a we granted this we FDA drive week, expand for date LINZESS As assigned sNDA pleased And about investment utility this and PDUFA underserved a constipation the ages to to brand pediatric a review focused improve earlier potential the to clinical of the patients that to of in are functional plan time. June of

assess in initiated efficacy. tolerability, which a our proof-of-concept PBC, CNP-XXX, progress Next, and starting COUR will GI the treatment disease-modifying potential portfolio, strengthen cholangitis. the In XXXX, and innovative for pharmacodynamic biliary study safety, with primary effect Pharmaceuticals

treatment potential pain Ironwood's IW-XXXX, off the as XXXX interstitial of for end activities wholly-owned start kicked the also its pain for conditions, bladder cystitis and visceral syndrome. at of GC-C such study We agonist

this several pipeline We advance of potential opportunities exciting value our the to anticipate year.

in data of from for early half expect we study the the into second First, CNP-XXX. year the patients clinical enrolled

patient interstitial for for IW-XXXX expect cystitis a study dosing pain to near in syndrome bladder the proof-of-concept and Second, in term. begin we the

Finally, to portfolio, potential in strengthen expertise actively several benefit and market attractive we we see continue to in opportunities evaluate GI. opportunities the Ironwood's could that our from

year in generate deliver sustained million and sheet, cash XXXX cash balance of in principal our in priority EBITDA strategic $XXX notes. convertible third ended million with repaying the share over on Our completing our We 'XX flow. is on our by and and program equivalents repurchase cash $XXX to profits the after million guidance nearly and the adjusted delivered $XXX deploying on

health highly in execute on management the our care are strategy a a profitable biopharma a positioned with gastrointestinal the strong team growing experienced We well skilled cash company a U.S. in fortunate balance. in leading we believe We the to GI position of and to diseases company and we're become being strive and of as

bit Slide the more of a X. LINZESS talk let's on about Now performance

updated we As X, see strong a formulary you been see access. of the on demand for supported growth prescription LINZESS left guideline linear side has class-leading remarkable, can has and Over to a combination Slide performance been time, LINZESS continue as of treatment robust clinical by of the high the growth support satisfaction, trajectory.

the functional will appropriate anticipate be believe U.S. functional the the as this We XX. see future, market in and approved, in for X new ages if an acceleration in to approve patient potential constipation opportunity, We continue should million could LINZESS adult pediatric children affects expand the roughly of X- patients XX-year-old constipation indication the to X starts adolescents FDA to and augmented an for

the be its still XX LINZESS future current suffer constipation. amongst leader This U.S. that and incremental IBS to indications. across potential market exists chronic approximately that from million need both and well the branded adults is positioned to is in the

our Looking company we're position our pipeline for We future. making strategy in in the in growth. in confident our and brand long-term ahead, we're our believe the and investments

on Ironwood very and all meaningful groundwork the momentum I patients' you continued continue laid have impact would employees we say a to lives. priorities strategic our like execution big against who to the strong for to thank make as

turn the would call discuss Mike? now like pipeline. I to Mike our to over to

Michael Shetzline

morning, Tom, good Thanks, and everyone.

continue programs. linaclotide progress I'll make our X. our Slide pipeline begin with program pediatric We to X across on

be FDA could in this review only adolescents that mentioned, As LINZESS constipation XX for first thrilled Tom prescription approved, to years and lead granted sNDA June. to therapy the LINZESS the children which to X priority we're commercial patient and for a of functional age, in population. If treat would the launch potentially

we the the LINZESS clinical the year. opportunities seek for forward of patient this the and at to standard broaden utility Week proud LINZESS. A of of data strong in this group. profile new the Digestive to redefine III further indication of to pediatric I'm meeting May Phase clinical reinforce the accomplishments would look Disease as presenting team's of care We continue

which the XXX,XXX in estimated for next, PBC, people treatment the affects potential an CNP-XXX, of U.S.

immunology of PDC-EX As program indicator lead opportunity T antigen Therefore, assess for previously, the is responsible CNP there cell discussed a of benefit. we've is underpinning the targeting PBC. an the should strong which the clinical specific pathology focused be on to responses, PDC-EX-specific

in T top potential responses We option expect the T of cell This exercise. timing and inform cell in will to early half dosed second XXXX. CNP-XXX line with patients of the assess data

this on today patients, it about a introduces address destruction medicine, market as asset of on excited it is program progress PBC. in the throughout no cause PBC the year. therapies provide are bile CNP-XXX potentially We'll We're of truly for new there the root because the the the a and autoimmune that game-changing updates precision ducts

There's to on interstitial currently million affects an a yet pain need there syndrome. IW-XXXX, very Moving asset treatment in of wholly-owned the the for medical to potential Americans, are Ironwood significant estimated few million of the as area a treatment unmet in and market X development. IC-BPS or options on bladder cystitis XX it

off daily, evaluate In and in We're XXXX, rating with along receive prepared dosing scale, start the term. II syndrome. with to for once begin forward pain abdominal study assessed dosing over XX-point other volunteers, from This in patients Phase worst pain the cystitis with We're numeric study randomized, Patients change successfully enroll the in severe assessments. moderate continues a kicked be of dosing weekly visceral baseline in proof-of-concept excited administered impact based double-blind trial of patient bladder studies healthy to an and on on study. will monitoring begin patients the weeks. IW-XXXX activities near has using we look study monthly who to designed XX to to been and we completed urinary placebo-controlled to pain study This will pain as patients symptoms and the efficacy potential advance. IW-XXXX in updates interstitial we and thoughtfully providing

to be in the time be first the tested humans, of in and proud will clinical cross-talk this This hypothesis is we're forefront the area. development at

to Sravan. turn over I'll that, With the call

Sravan Emany

Mike, price net sales an good million more of XXXX, growth U.S. was start of I'll inventory fluctuation. offset update were the LINZESS' of decrease morning, Strong LINZESS to X% and fourth fourth $XXX X% and quarter a in quarter Thanks, everyone. compared XXXX. of prescription the demand with performance. on channel than by

full slight as XXXX, as year to U.S. year LINZESS compared net XXXX. sales full $X.XXX billion, were For on decrease a shown Slide XX,

to strong of our on we growth While see. the inventory that in to net prescription XXXX, remain in channel, we sales in full expectations year confident the potential lower for than continue retail growth due demand based came fluctuations primarily the long-term LINZESS

LINZESS profitability. quarter margins of in of Commercial brand were XXXX. XX% XX% the XXXX to Turning to fourth quarter fourth compared the in

versus XXXX. XXXX, margins commercial full For year were year full for XX% XX%

$XXX Moving revenues collaboration to of $XXX U.S. Ironwood Ironwood were QX, LINZESS driven by In revenues. primarily million, million. revenues the

$XX of $XX were quarter the Ironwood full the revenues respectively, For U.S. for Adjusted with and QX the of million. of fourth and EBITDA $XX the and for from million was net and recorded million revenues GAAP $XX income In $XXX LINZESS full year. million full year, which year. majority noncash. $XXX $XXX in million income fourth million full year, the was for expense, Ironwood million, collaboration tax million $XXX the was the quarter

robust our profits and Throughout expense management. driving demonstrating remained to commitment focused cash disciplined the prescription deliver strong demand we and by flows year, on continued LINZESS

beginning I'm that pleased greater a we adjusted achieved at As EBITDA the able guidance million of initial were XXXX. of to our $XXX we that issued result, than

full in cash $XXX the $XXX capital In XXXX, cash of our for $XXX quarter on year. and cash the operations fourth amount in from We nearly repurchase flow XXXX by notes. million our equivalents and million convertible the year million and million repaying ended completing generated our cash allocation. XXXX share with program of deploying $XX Next, and principal during -- after we

and innovative, portfolio. our highly We company success growth our actively believe we by to differentiated for future bolster maximizing assets positioning are pursuing LINZESS GI

believe we a take on that focused over our to and disciplined shareholders will to identifying term. value remain approach for continue create and and long We We the balanced in investing patients deployment. capital opportunities

Turning XXXX to Slide on our guidance XX.

growth. LINZESS and As previously between we sales net X%, percent expect demand by January, stated single-digit driven X% prescription of high U.S. in growth

In expect to mid-single-digit our payer addition, we access class-leading erosion. maintain price with

revenue which includes We of and between million of and adjusted increased Ironwood programs, our investment million greater million, expect IW-XXXX. pipeline and CNP-XXX EBITDA $XXX advance $XXX than $XXX to

wrap and strengthening believe continued innovative and delivering we flow. well our strategic on remain LINZESS, focused portfolio sustained GI we maximizing priorities growth, for profits To cash and up, generating Ironwood X is positioned and progressing our of advancing

balance cash management team with exciting the GI, emerging beginning LINZESS constipation that with equivalents; continues if ahead; with of a and an drug commercial, an accomplished and demand over development impressive to indication strong pipeline market strong to growth, We expand a in this approved; expertise. functional the with cash year, with anticipated $XXX brand pediatric have milestones and deliver a M&A sheet blockbuster million potential

ahead excited a value. strive us We shareholder work with and make GI patients deliver of for as are difference the diseases about to to living we

up line may you questions. Operator, now for the open

Operator

Instructions]. [Operator

David first Our Amsellem will Piper Sandler. from come question with

David Amsellem

had a few. just I

the about per first, one. with number level you And stable That's net driving a mind, talk talk in that of more in guidance way realized more about you'll can of more dynamics the stability versus XXXX? just in the Rx? stable less XXXX erosion your price -- that or are see for confidence So trajectory

secondly, my how under your age the about question. of can box warning? then, making And thinking eventual regarding And just you work about on of progress the X talk That's or towards LINZESS X second you're children under? removal the and

your view pediatric And to then I'm at And volumes extent the XX? drive to particularly, accelerated frame opportunity, up lastly, you getting growth post the what's the just in approval? that could do what X is how on which

Sravan Emany

first price. David, the thank start you questions. on for Look, the I'll -- with your question

I Mike. to answer. children -- which third restate then the I And the Tom the I'll think will X, we regarding of have question second question, Your age under we hand may think can we'll you --

XXXX, respect as Okay. -- for high know, LINZESS and to is the volume prescription With you brand. valued a

that year excited XXth high digits we're in and life the with We drug's single are growing drug. still the really we're of the cycle,

And made did that years maintain payer and same of several investment in investments last we of the the to we XXXX. in XXXX, not have. we've level course to need access so establish we significant over with the And make maintain that the to payers did access as class-leading

you know, evaluate LINZESS the profits strive and We generate As to brand. for volume price of company the we and and maximize continually trade-offs. try performance to for

D out X top Part the is programs preferred as on, -- reminder, a commercial top XX And LINZESS of X so plans XX and plans. Medicare covered think, on the I commercial of of out

year, we've price entered we perspective, have -- just line expectations. to going from came entered payers. think our negotiations were XXXX volumes on negotiations as I We past thought with on where need the to the and we be based visibility So a over in we the based

about for And sit where feel so just XXXX. mid-single-digit that today, erosion pretty we good we

Thomas McCourt

Sravan, I the to have of visibility is great line contracts. bottom think the that, we

We So what We came of that we expected. predicted within X.X% digit. probably last saw year. single high we in

much similar contracting have see aggressive where didn't as we erosion think the confidence in I process. we here price

So we're digits. projecting mid-single

to things do the fairly So think in reasonable have I digits. we're that confidence happen, think but have I we we mid-single -- can going be

Sravan Emany

Mike?

Michael Shetzline

Yes, sure.

age that good was the the kids due than including of less younger to institution regards original It's recall box around also XX. in of when question originally kids, about drug the really the the X, launched, general. but the the you to that box adverse had events label to in the the under in theoretical warning So was of risk

data in the and a encompassing work then, X had revision, to studies you with below, pretty populations, from which And you and clinical is box generate XX-year-old significant warning the with much together call. year during that's had end the that's the submitted opportunity the where currently of to it put our XXXX, in we've requirements data. a as just And we at just got pediatric post-marketing X- to see to agency sNDA And below, saw because which that last priority and We, actually and can those plan the the down we to generate the took just the we is. about XX what populations. that review all talked

peds. we're we data So in your peds point additional robust have a directly, continuing set very studies. To

has in and have well to tolerated. believe with our date, an clinical in data, with to the which, part working clinical very agency. discussions in less olds, We been from study generation profile of to months we of And path have X, of certainly continue X- We our X-year-olds. have planning to additional year we're X the further X a That's to the manifest study a AbbVie. to real gone also agency, label with partners, LINZESS, the with than safe

Thomas McCourt

is I'll remarkable. have and the pediatric And take pediatric this this tolerability III drug. really the Mike's the the -- great program Tom. opportunity. to of point, maybe the And out And in I'll safety -- is clinical the Phase obviously, pediatric on data we confidence take of

that striking million at the opportunity, available challenge what One, talk real chronically pediatric functional options. was X what's demonstrates which are drug suffering is patients therapeutic look tolerated, a it been was from we about -- I currently But the efficacy. clearly how the When constipation. well with

you've adults, which got from to really going the from seeking-care kids, you're of the kid That keep a a suffering, in to that's behavior. different go But is doctor. mind, is one see if things

is they just So percent and a not multiple generally of the present times much care-seeking Xx. patients or much, higher year, percent, X a

So a very it's available population.

also know of out lot there's that prescriber pretty while a a base. concentrated We it's pediatricians there,

lot of can to selling we our get top think with prescribers that efforts. we a So existing the

talk inform effort then be will sensitive this promotional the will first to concentrated investment. in because which further the really So about understand how we drug marketplace, we promotionally want

just managing to which physicians communication seen not educate we're drug we're looking target try. we can on in at better other looks choice promotion, encouraging market very patients. willingness And their profile research these the at So in looking product with we've everything clinical for channels personal the the a and the also to of and regard profile

going will creation, we As promotional response. in upside be there hope really indication the believe, I to But could we evaluate June. at over value -- look some as time, in There's obviously, the start we upside the the real the XXXX to we be on to of of medical that that positioned kids. the and lot need think I an help unmet population, profile based size clinical the believe LINZESS in the the 'XX 'XX. will well awful But all of and drug, get

Operator

from Our come Wolle will Daniel with next question JPMorgan.

Daniel Wolle

on Can data to see us data what in XXXX? for questions will half able you be CNP-XXX. Or opt Street for internal this announce to Street? assuming out data Two you the to what will where on response? cell an release early T you versus reads see me. you when in will readout the Is the the second clarify positive One,

is if changes see see is, And question guess, outcome, level and some to to serum are just phosphatase there changes to we T be in year? potential data question on it it my then I will serum response? data, second going is include this levels? is, outcome Or phosphatase possible cell

Michael Shetzline

Yes, clarify. I opportunity for can the address that. to Thanks

is in for that we're the the readout by opportunity clinicaltrials.gov, the the be inform of trying trial us get full reported always in trying of What half until line extend study data 'XX will timing the -- data. to to on second in to do as too, XXXX clear, top acknowledging clarity is Just add planned to to the we're XXXX.

all So in to the can inform our decisions as programs in the of data objective business clinical to use we addition, any possible. is as early

the of strong that potentially responses 'XX, in cell from expect based second CNP-XXX, half for is T And really on enrolled the clinical T lead data indicator a response the to science on early So we the cell we think focused see patients. around responses.

they do specifically, meaningful again, a approved provides phos phos right? liver often that mentioned patients. still is actually phos. biomarker, alk a show have Alk for you alk to benefit And alk it to And products is biomarker. to it's -- phos, not a the And post-marketing commitments with

We of is more actually by think the cells. the at autoreactive addressed the underlying driven PDC-EX T looking pathology antigen, by PBC, specifically

so of And half focus to that's in what on what we 'XX. we're focus -- trying second the really

As on prepared in inform really half early it the give an on T XXXX. we'll in update I of cell responses of program. the remarks, will the us the at you we to timing. status see And point, the on mentioned the expect data second that But

Daniel Wolle

Okay.

just Or that an Street? So is be readout? to response will able internal to T the this clarify, you release cell to data

Michael Shetzline

an and decisions. group business at do. point, to we're Again, as fashion further we that When decision a update make going internal assessment decide early small data what the just we'll to to program controlled make in understand very and a we Yes. relevance a to make see the the

Operator

Tim Capital One. Our Chiang come next question will with from

Timothy Chiang

Mike, some up I to on of wanted follow comments CNP-XXX. the on

you've comment that to XX% I mean, T a here? very, a positive leads I right? out you in cell ask I in CNP-XXX. seen. there's you, that that, what very Or response I Is cell made obviously, reduction this have And to what, there had, discussions data you've there's been, preclinicals, preclinical we've -- on the should some counts think in reduction think guess, about in that prior T wanted

Michael Shetzline

Yes.

an those treatment PBC, preclinical, there is T CNP-XXX, data. in So cells that preclinical is that for you a And with reduction that's question. the a COUR There get which animal good an interrogated in does show has model animal there's with model. a autoreactive

platform to a gets autoantigen celiac regards in gliadin in referred particles gluten, me a run uses study number is you COUR that nano That of heard the celiac. That's say by it Takeda technology number the the XX% and was you've and degraded to the disease proof then deamidated encapsulate actually. there to peptides. the But in

The saw celiac meaningful June X-day the into In And and patients. celiac epithelial cells the is XXXX. X patients, in in of a celiac published patients, a XX% this that Gastro in in treatments structure, translated period in improvement celiac reduction also autoreactive over in gut the an patients, histology. T

cells. again, that's of of reducing the T So downstream effect sort those autoreactive

said for before, would patients game-changing the response we have and see opportunity and as with if XX% quite PBC. that heard too, by help clinical me done data. The published be So we But impressive that's to PBC in similar evidence a where potentially is may a PBC, you in company. celiac we that's The hear about see the directly. evidence study the another you from by preclinical is say --

Thomas McCourt

the a heard see a I've in to see cell destruction. you alk bile probably Mike, you reduction phos clinical duct past with clearly the what in T to dramatic and that would regard and if or expect as say we far strong response impact bio overall of indicator as do cells, it's

Michael Shetzline

we of PBC, that, Because the which specific PDC-EX we the really on that destruction. the this the targeting is pathology autoantigen the exactly. approach, -- is which and that root cause of based CNP-XXX, is targeting PBC, duct antigen, science, the bile of Yes, think

ducts. celiac again, epithelial the or can patients the the And in cells, decreased of showed gut celiac should of autoreactive those PBC decrease improve duct from then proof-of-concept technology If cells. the bile reduce they're and T mean eliminate that T I patients histology. T destruction potentially did The we T cells, in patients. we proof data destroy cells autoreactive actually bile

Timothy Chiang

dosing is is there? there in that comparable the comparable in celiac the in running dosing you're The that's anything study? mean that PBC follow-up No, just the Mike. Maybe one helpful, then. study, I

Michael Shetzline

Yes.

PBC studying I and in the that's think it's question, we're current doses great why a X patients.

response different I But may I fair the to doses. So clearly, think, it's make a there's diseases pharmacodynamic do also to association. have that think different a reason

this be dose that as cognizant terms as right find So to the we're that what's And do celiac similarly, of we in the well. to in in patients. want happening sure we I'm open-minded study PBC space clearly

Operator

Instructions]. [Operator

come Peaker Our from with Boris next will Cowen. question

Boris Peaker

question on One CNP-XXX.

mentioned break is market XXX you you I subgroup there based that And if particular heard if will that Can be about patients, down that XXX,XXX any I You targeting? -- on correctly. severity? XXX if the is heard patients, you disease

Michael Shetzline

Yes.

So I good think it's a question.

think as know of diseases, severity of I or acid, advised decompensated is with this most And aspects important. indicated liver disease being fact, aspect with probably liver the around cirrhosis is of liver in you label that disease obeticholic with terms patients not severity disease. in in

because So targeting patient should it's we're mechanism and with the our the immunology But destruction. to patients PBC. reality patients more disease populations, innovative early in program, new the applicable duct underlying PBC. is be the obviously again, with behind is all starting Because, bile broadly with liver

might In applicable the acid have and -- to plays approaches, of some there the could reduce a more severe of see liver bile cells, should as be if semisynthetic the you using those semisynthetic that we're T patients. concern out broad acids disease be labeling, to autoreactive reason that other bile with And But if population science patients. with able to we're a and some reason. demonstrated

because like again, to why real the go We we're But really study. in the we got it's long of proof-of-concept Now, in that's way grounded the program data. root science cause of a again, PBC. getting

Boris Peaker

Act LINZESS? could thoughts impact the on you maybe your comment Reduction second on Inflation Great. And question on my of is,

Sravan Emany

potential number Look, closely with take certain of any a We're the working think, this -- proposed legislation, here. Sure. business. that. any wide partner, as I'll stage, it's legislation. of Sravan. still around we'll our impact assess developments on this with AbbVie, to is our aspects Boris, At unknowns I this follow

thinking we've about core our the And been aspect of important years. and potential for impact with to to access. for broad to ensure note, D the coverage many strategy patient LINZESS, Medicare years, it's And has here working been Part

a from of is standpoint, discounting us. standpoint, new from So this a to none negotiation

that's we'll can we sense that you like. I we're when I what right come say. looks think have to -- we better back think so But a And now, of what

Thomas McCourt

we're the the I payers I working confident. to access. payers closely we're as reason is why ensure to as think currently very seeing significant providing Medicare discounts And we're payer here I are because -- Medicare. well mean, reasonably erosion some which with price we the very commercial mean broad

So of we're all I they're be the -- it Yes. on, have going payers. think that there the already out are that actively game impact? major the could focusing negotiating in some brands to with But and

feel So wait to have position we'll about good I but and we're think see, we the in. pretty

Operator

And you Thank and may no disconnect. today's conference. for we participation, conclude questions, further you will with your now

Ironwood Pharmaceuticals (IRWD) 16 Feb 232022 Q4 Earnings call transcript