Ironwood Pharmaceuticals Reports Third Quarter 2024 Results

Rhea-AI Summary

Ironwood Pharmaceuticals reported Q3 2024 results with total revenue of $91.6M, down from $113.7M in Q3 2023. LINZESS prescription demand grew 13% year-over-year, though U.S. net sales decreased 19% to $225.5M. The company maintains its 2024 financial guidance with expected U.S. LINZESS net sales of $900-950M and total revenue of $350-375M. GAAP net income was $3.6M ($0.02 per share) compared to $15.3M ($0.10 per share) in Q3 2023. The company remains on track to complete apraglutide NDA submission in Q1 2025.

Positive

• LINZESS prescription demand growth of 13% year-over-year
• Maintained full year 2024 financial guidance
• Commercial margin for LINZESS remained strong at 65%

Negative

• Total revenue declined 19.5% to $91.6M from $113.7M YoY
• LINZESS U.S. net sales decreased 19% to $225.5M YoY
• GAAP net income dropped to $3.6M from $15.3M YoY
• Adjusted EBITDA decreased to $26.2M from $49.1M YoY

Insights

Financial Analyst

The Q3 2024 results show mixed performance with concerning trends. Total revenue declined -19.5% to $91.6 million, primarily due to LINZESS pricing headwinds despite strong prescription growth of 13%. GAAP net income dropped significantly to $3.6 million ($0.02 per share) from $15.3 million year-over-year.

Key concerns include declining LINZESS U.S. net sales (-$53.5 million YoY) and commercial margin compression (65% vs 72%). However, the company maintained its 2024 guidance, projecting LINZESS net sales of $900-950 million and total revenue of $350-375 million.

The balance sheet remains stable with $88.2 million cash position and $400 million in credit facility debt. Pipeline progress with apraglutide NDA submission remains on track for Q1 2025, though discontinuation of CNP-104 and IW-3300 recruitment pause raise some development concerns.

– LINZESS^® (Iinaclotide) EUTRx prescription demand growth of 13% year-over-year –

– Remains on track to complete apraglutide NDA submission in Q1 2025 –

– Maintains Full Year 2024 Financial Guidance –

BOSTON--(BUSINESS WIRE)-- Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD), a GI-focused healthcare company, today reported its third quarter 2024 results and recent business performance.

“LINZESS continued to deliver robust prescription demand growth in the third quarter,” said Tom McCourt, chief executive officer of Ironwood Pharmaceuticals. “LINZESS extended units and new-to-brand prescriptions each increased 13% year-over-year, respectively, reinforcing that patients and health care professionals continue to choose LINZESS in a growing market. Although LINZESS has faced pricing headwinds throughout 2024, we are maintaining our full year financial guidance. With apraglutide, we continue making progress in preparing the NDA submission and remain on track to complete the submission in the first quarter of 2025. Our team is focused on getting apraglutide to market as soon as possible, and we look forward to providing more updates on our progress in the months ahead. We believe that, if approved, apraglutide would be the drug of choice among physicians to treat adult patients with short bowel syndrome who are dependent on parenteral support.”

Third Quarter 2024 Financial Highlights¹
(in thousands, except for per share amounts)

		Q3 2024		Q3 2023
Total revenue		$91,592		$113,739
Total costs and expenses		65,956		73,716
GAAP net income		3,646		13,950
GAAP net income attributable to Ironwood Pharmaceuticals, Inc.		3,646		15,321
GAAP net income – per share basic		0.02		0.10
GAAP net income – per share diluted		0.02		0.09
Adjusted EBITDA		26,159		49,079
Non-GAAP net income		3,869		21,802
Non-GAAP net income per share – basic		0.02		0.14
Non-GAAP net income per share – diluted		0.02		0.12

¹ Refer to the Reconciliation of GAAP Results to Non-GAAP Financial Measures table and to the Reconciliation of GAAP Net Income to Adjusted EBITDA table at the end of this press release. Refer to Non-GAAP Financial Measures for additional information.

Third Quarter 2024 Corporate Highlights

U.S. LINZESS

• Prescription Demand: Total LINZESS prescription demand in the third quarter of 2024 was 54 million LINZESS capsules, a 13% increase compared to the third quarter of 2023, per IQVIA.
• U.S. Brand Collaboration: LINZESS U.S. net sales are provided to Ironwood by its U.S. partner, AbbVie Inc. (“AbbVie”). LINZESS U.S. net sales were $225.5 million in the third quarter of 2024, a 19% decrease compared to $279.0 million in the third quarter of 2023. Ironwood and AbbVie share equally in U.S. brand collaboration profits.
  • LINZESS commercial margin was 65% in the third quarter of 2024, compared to 72% in the third quarter of 2023. See the U.S. LINZESS Full Brand Collaboration table at the end of this press release.
  • Net profit for the LINZESS U.S. brand collaboration, net of commercial and research and development (“R&D”) expenses, was $139.6 million in the third quarter of 2024, a decrease compared to $192.0 million in the third quarter of 2023. See the U.S. LINZESS Full Brand Collaboration table at the end of this press release.
• Collaboration Revenue to Ironwood: Ironwood recorded $88.9 million in collaboration revenue in the third quarter of 2024 related to sales of LINZESS in the U.S., compared to $110.1 million for the third quarter of 2023. Third quarter of 2024 collaboration revenue to Ironwood includes a $5.8 million positive adjustment to reflect Ironwood’s estimate of LINZESS gross-to-net reserves as of September 30, 2024. See the U.S. LINZESS Commercial Collaboration table at the end of the press release.

Pipeline Updates

Apraglutide

• Ironwood is advancing apraglutide, a next-generation, synthetic glucagon-like peptide-2 (“GLP-2”) analog for short bowel syndrome (“SBS”) patients dependent on parenteral support (“PS”), a severe chronic malabsorptive condition. Ironwood believes apraglutide has the potential to improve the standard of care for adult patients with SBS who are dependent on PS as the first and only GLP-2 with once-weekly administration, if approved.
  • Ironwood is working to submit a new drug application (“NDA”) to the U.S. Food and Drug Administration (“FDA”) and marketing applications to other regulatory agencies for apraglutide for the treatment of adult patients with SBS who are dependent on PS.

CNP-104

• In the third quarter of 2024, Ironwood received from COUR Pharmaceutical Development Company, Inc. (“COUR”) the topline data from COUR’s Phase II clinical study for the treatment of primary biliary cholangitis. On September 27, 2024, Ironwood notified COUR of its decision not to exercise the option to acquire an exclusive license to CNP-104. As a result, the collaboration and license option agreement between Ironwood and COUR terminated, and Ironwood retains no rights and has no obligations related to CNP-104.

IW-3300

• Ironwood is advancing IW-3300, a guanylate cyclase-C agonist for the potential treatment of visceral pain conditions, such as interstitial cystitis / bladder pain syndrome (“IC/BPS”) and endometriosis.
  
  Ironwood has decided to end further recruitment for the Phase II proof of concept study in IC/BPS and analyze the data once all currently enrolled patients complete the full 12-week study assessment, which will inform the next steps on the program.

Revolving Credit Facility

• In September 2024, Ironwood entered into a first amendment to its revolving credit agreement to, among other things, increase the quantum of the revolving credit facility from $500.0 million to $550.0 million, extend the maturity date, and increase Ironwood’s permitted maximum consolidated secured net leverage ratio. Additional details can be found in Ironwood’s Form 8-K filing dated September 30, 2024.

Third Quarter 2024 Financial Results

• Total Revenue. Total revenue in the third quarter of 2024 was $91.6 million, compared to $113.7 million in the third quarter of 2023.
  • As noted above, revenue was lower year-over-year, primarily due to the decrease in collaborative arrangements revenue.
  • Total revenue in the third quarter of 2024 consisted of $88.9 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S., and $2.7 million in royalties and other revenue. Total revenue in the third quarter of 2023 consisted of $110.1 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S. and $3.6 million in royalties and other revenue.
• Total Costs and Expenses. Total costs and expenses in the third quarter of 2024 were $66.0 million, compared to $73.7 million in the third quarter of 2023.
  • Total costs and expenses in the third quarter of 2024 consisted of $36.1 million in selling, general and administrative (“SG&A”) expenses, $29.8 million in R&D expenses and an insignificant amount in restructuring expenses. Total costs and expenses in the third quarter of 2023 consisted of $36.0 million in SG&A expenses, $33.0 million in R&D expenses and $4.7 million in restructuring expenses.
• Interest Expense. Interest expense was $9.4 million in the third quarter of 2024, in connection with Ironwood’s convertible senior notes and revolving credit facility. Interest expense was $9.8 million in the third quarter of 2023, in connection with Ironwood’s convertible senior notes and revolving credit facility.
• Interest and Investment Income. Interest and investment income was $1.2 million in the third quarter of 2024. Interest and investment income was $1.7 million in the third quarter of 2023.
• Income Tax Expense. Ironwood recorded $13.7 million of income tax expense in the third quarter of 2024, the majority of which was non-cash, as Ironwood continues to utilize net operating losses to offset taxable income for federal purposes and in many states. Ironwood recorded $18.0 million of income tax expense in the third quarter of 2023, the majority of which was non-cash, as Ironwood continued to utilize net operating losses to offset taxable income for federal purposes and in many states.
• GAAP Net Income Attributable to Ironwood. GAAP net income attributable to Ironwood was $3.6 million, or $0.02 per share (basic and diluted) in the third quarter of 2024, compared to GAAP net income of $15.3 million, or $0.10 per share (basic) and $0.09 per share (diluted) in the third quarter of 2023.
• Non-GAAP Net Income. Non-GAAP net income was $3.9 million, or $0.02 per share (basic and diluted), in the third quarter of 2024, compared to non-GAAP net income of $21.8 million, or $0.14 per share (basic) and $0.12 diluted in the third quarter of 2023.
  • Non-GAAP net income excludes the impact of mark-to-market adjustments on the derivatives related to Ironwood’s 2022 Convertible Notes, amortization of acquired intangible assets, restructuring expenses and acquisition-related costs, all net of tax effect. See Non-GAAP Financial Measures below.
• Adjusted EBITDA. Adjusted EBITDA was $26.2 million in the third quarter of 2024, compared to $49.1 million in the third quarter of 2023.
  • Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization, and acquisition-related costs, from GAAP net loss. See Non-GAAP Financial Measures below.
• Cash Flow Highlights. Ironwood ended the third quarter of 2024 with $88.2 million of cash and cash equivalents, compared to $92.2 million of cash and cash equivalents at the end of 2023.
  • In the third quarter of 2024, Ironwood repaid $25.0 million of the outstanding principal balance on its revolving credit facility. The outstanding principal balance on the revolving credit facility was $400.0 million as of September 30, 2024.
  • Ironwood generated $9.9 million in cash from operations in the third quarter of 2024, compared to $32.5 million in cash from operations in the third quarter of 2023.
• Ironwood 2024 Financial Guidance. Ironwood continues to expect:

	2024 Guidance (November 7, 2024)
U.S. LINZESS Net Sales	$900 - $950 million
Total Revenue	$350 - $375 million
Adjusted EBITDA1	>$75 million

¹ Adjusted EBITDA is calculated by subtracting restructuring expenses, net interest expense, income taxes, depreciation and amortization, and acquisition-related costs from GAAP net income. For purposes of the 2024 guidance, Ironwood has assumed it will not incur material expenses related to business development activities in 2024. Ironwood does not provide guidance on GAAP net income or a reconciliation of expected adjusted EBITDA to expected GAAP net income because, without unreasonable efforts, it is unable to predict with reasonable certainty the non-GAAP adjustments used to calculate adjusted EBITDA. These adjustments are uncertain, depend on various factors and could have a material impact on GAAP net income for the guidance period. Management believes this non-GAAP information is useful for investors, taken in conjunction with Ironwood’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Ironwood’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies.

Non-GAAP Financial Measures

Ironwood presents non-GAAP net income (loss) and non-GAAP net income (loss) per share to exclude the impact, net of tax effects, of net gains and losses on derivatives related to Ironwood’s 2022 Convertible Notes that are required to be marked-to-market, amortization of acquired intangible assets, restructuring expenses, and acquisition-related costs. Non-GAAP adjustments are further detailed below:

• The gains and losses on the derivatives related to Ironwood’s 2022 Convertible Notes were highly variable, difficult to predict and of a size that could have a substantial impact on the company’s reported results of operations in any given period.
• Amortization of acquired intangible assets are non-cash expenses arising in connection with the acquisition of VectivBio and are considered to be non-recurring.
• Restructuring expenses are considered to be a non-recurring event as they are associated with distinct operational decisions. Restructuring expenses include costs associated with exit and disposal activities.
• Acquisition-related costs in connection with the acquisition of VectivBio are considered to be non-recurring and include direct and incremental costs associated with the acquisition and integration of VectivBio to the extent such costs were not classified as capitalizable transaction costs attributed to the cost of net assets acquired through acquisition accounting.

Ironwood also presents adjusted EBITDA, a non-GAAP measure, as well as guidance on adjusted EBITDA. Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization, and acquisition-related costs from GAAP net income. The adjustments are made on a similar basis as described above related to non-GAAP net income (loss), as applicable.

Management believes this non-GAAP information is useful for investors, taken in conjunction with Ironwood’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Ironwood’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of non-GAAP net income (loss) and non-GAAP net income (loss) per share to GAAP net income and GAAP net income per share, respectively, and for a reconciliation of adjusted EBITDA to GAAP net income, please refer to the tables at the end of this press release.

Ironwood does not provide guidance on GAAP net income or a reconciliation of expected adjusted EBITDA to expected GAAP net income because, without unreasonable efforts, it is unable to predict with reasonable certainty the non-GAAP adjustments used to calculate adjusted EBITDA. These adjustments are uncertain, depend on various factors and could have a material impact on GAAP net income for the guidance period.

Conference Call Information

Ironwood will host a conference call and webcast at 8:30 a.m. Eastern Time on Thursday, November 7, 2024 to discuss its third quarter 2024 results and recent business activities. Individuals interested in participating in the call should dial (888) 596-4144 (U.S. and Canada) or (646) 968-2525 (international) using conference ID number and event passcode 2530602. To access the webcast, please visit the Investors section of Ironwood’s website at www.ironwoodpharma.com. The call will be available for replay via telephone starting at approximately 11:30 a.m. Eastern Time on November 7, 2024, running through 11:59 p.m. Eastern Time on November 21, 2024. To listen to the replay, dial (800) 770-2030 (U.S. and Canada) or (609) 800-9909 (international) using conference ID number 2530602. The archived webcast will be available on Ironwood’s website for 1 year beginning approximately one hour after the call has completed.

About Ironwood Pharmaceuticals

Ironwood Pharmaceuticals (Nasdaq: IRWD), an S&P SmallCap 600® company, is a leading gastrointestinal (GI) healthcare company on a mission to advance the treatment of GI diseases and redefine the standard of care for GI patients. We are pioneers in the development of LINZESS® (linaclotide), the U.S. branded prescription market leader for adults with irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC). LINZESS is also approved for the treatment of functional constipation in pediatric patients ages 6-17 years-old. Ironwood is also advancing apraglutide, a next-generation, long-acting synthetic GLP-2 analog being developed for rare gastrointestinal diseases, including short bowel syndrome with intestinal failure (SBS-IF) as well as several earlier stage assets. Building upon our history of GI innovation, we keep patients at the heart of our R&D and commercialization efforts to reduce the burden of GI diseases and address significant unmet needs.

Founded in 1998, Ironwood Pharmaceuticals is headquartered in Boston, Massachusetts, with a site in Basel, Switzerland.

We routinely post information that may be important to investors on our website at www.ironwoodpharma.com. In addition, follow us on X and on LinkedIn.

About LINZESS (Linaclotide)

LINZESS® is the #1 prescribed brand in the U.S. for the treatment of adult patients with irritable bowel syndrome with constipation (“IBS-C”) or chronic idiopathic constipation (“CIC”), based on IQVIA data. LINZESS is a once-daily capsule that helps relieve the abdominal pain, constipation, and overall abdominal symptoms of bloating, discomfort and pain associated with IBS-C, as well as the constipation, infrequent stools, hard stools, straining, and incomplete evacuation associated with CIC. LINZESS relieves constipation in children and adolescents aged 6 to 17 years with functional constipation. The recommended dose is 290 mcg for IBS-C patients and 145 mcg for CIC patients, with a 72 mcg dose approved for use in CIC depending on individual patient presentation or tolerability. In children with functional constipation aged 6 to 17 years, the recommended dose is 72 mcg.

LINZESS is not a laxative; it is the first medicine approved by the FDA in a class called GC-C agonists. LINZESS contains a peptide called linaclotide that activates the GC-C receptor in the intestine. Activation of GC-C is thought to result in increased intestinal fluid secretion and accelerated transit and a decrease in the activity of pain-sensing nerves in the intestine. The clinical relevance of the effect on pain fibers, which is based on nonclinical studies, has not been established.

In the United States, Ironwood and AbbVie co-develop and co-commercialize LINZESS for the treatment of adults with IBS-C or CIC. In Europe, AbbVie markets linaclotide under the brand name CONSTELLA® for the treatment of adults with moderate to severe IBS-C. In Japan, Ironwood's partner, Astellas, markets linaclotide under the brand name LINZESS for the treatment of adults with IBS-C or CIC. Ironwood also has partnered with AstraZeneca for development and commercialization of LINZESS in China, and with AbbVie for development and commercialization of linaclotide in all other territories worldwide.

LINZESS Important Safety Information

INDICATIONS AND USAGE

LINZESS® (linaclotide) is indicated for the treatment of both irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC) in adults and functional constipation (FC) in children and adolescents 6 to 17 years of age. It is not known if LINZESS is safe and effective in children with FC less than 6 years of age or in children with IBS-C less than 18 years of age.

IMPORTANT SAFETY INFORMATION

WARNING: RISK OF SERIOUS DEHYDRATION IN PEDIATRIC PATIENTS LESS THAN 2 YEARS OF AGE   LINZESS is contraindicated in patients less than 2 years of age. In nonclinical studies in neonatal mice, administration of a single, clinically relevant adult oral dose of linaclotide caused deaths due to dehydration.

Contraindications

• LINZESS is contraindicated in patients less than 2 years of age due to the risk of serious dehydration.
• LINZESS is contraindicated in patients with known or suspected mechanical gastrointestinal obstruction.

Warnings and Precautions

• LINZESS is contraindicated in patients less than 2 years of age. In neonatal mice, linaclotide increased fluid secretion as a consequence of age-dependent elevated guanylate cyclase (GC-C) agonism, which was associated with increased mortality within the first 24 hours due to dehydration. There was no age dependent trend in GC-C intestinal expression in a clinical study of children 2 to less than 18 years of age; however, there are insufficient data available on GC-C intestinal expression in children less than 2 years of age to assess the risk of developing diarrhea and its potentially serious consequences in these patients.

Diarrhea

• In adults, diarrhea was the most common adverse reaction in LINZESS-treated patients in the pooled IBS-C and CIC double-blind placebo-controlled trials. The incidence of diarrhea was similar in the IBS-C and CIC populations. Severe diarrhea was reported in 2% of 145 mcg and 290 mcg LINZESS-treated patients and in <1% of 72 mcg LINZESS-treated CIC patients.
• In children and adolescents 6 to 17 years of age, diarrhea was the most common adverse reaction in 72 mcg LINZESS-treated patients in the FC double-blind placebo-controlled trial. Severe diarrhea was reported in <1% of 72 mcg LINZESS treated patients. If severe diarrhea occurs, dosing should be suspended and the patient rehydrated.

Common Adverse Reactions (incidence ≥2% and greater than placebo)

• In IBS-C or CIC adult patients: diarrhea, abdominal pain, flatulence, and abdominal distension.
• In FC pediatric patients: diarrhea.

Please see full Prescribing Information including Boxed Warning: https://www.rxabbvie.com/pdf/linzess_pi.pdf

LINZESS® and CONSTELLA® are registered trademarks of Ironwood Pharmaceuticals, Inc. Any other trademarks referred to in this press release are the property of their respective owners. All rights reserved.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about Ironwood’s ability to execute on its mission; Ironwood’s strategy, business, financial position and operations; Ironwood’s ability to drive growth and profitability; the commercial potential of LINZESS; our financial performance and results, and guidance and expectations related thereto; LINZESS prescription demand growth, LINZESS U.S. net sales growth, total revenue and adjusted EBITDA in 2024; that the increase in LINZESS extended units and new-to-brand prescriptions is reinforcing that patients and health care professionals continue to choose LINZESS in a growing market; our plan to and the expected timing to complete the NDA submission; our plan to on getting apraglutide to market as soon as possible, our belief that if apraglutide is approved, it would be the drug of choice among physicians to treat adult patients with SBS who are dependent on PS; our plan to submit an NDA and marketing applications to other regulatory agencies for apraglutide. These forward-looking statements speak only as of the date of this press release, and Ironwood undertakes no obligation to update these forward-looking statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement. Applicable risks and uncertainties include those related to the effectiveness of development and commercialization efforts by us and our partners; preclinical and clinical development, manufacturing and formulation development of linaclotide, apraglutide, IW-3300, and our other product candidates; the risk of uncertainty relating to pricing and reimbursement policies in the U.S., which, if not favorable for our products, could hinder or prevent our products’ commercial success; the risk that clinical programs and studies, including for linaclotide pediatric programs, apraglutide and IW-3300, may not progress or develop as anticipated, including that studies are delayed or discontinued for any reason, such as safety, tolerability, enrollment, manufacturing, economic or other reasons; the risk that findings from our completed nonclinical studies and clinical trials may not be replicated in later trials and earlier-stage clinical trials may not be predictive of the results we may obtain in later-stage clinical trials or of the likelihood of regulatory approval; the risk that apraglutide will not be approved by the FDA or other regulatory agencies; the risk of competition or that new products may emerge that provide different or better alternatives for treatment of the conditions that our products are approved to treat; the risk that we are unable to execute on our strategy to in-license externally developed products or product candidates; the risk that we are unable to successfully partner with other companies to develop and commercialize products or product candidates; the risk that healthcare reform and other governmental and private payor initiatives may have an adverse effect upon or prevent our products’ or product candidates’ commercial success; the efficacy, safety and tolerability of linaclotide and our product candidates; the risk that the commercial and therapeutic opportunities for LINZESS, apraglutide or our other product candidates are not as we expect; decisions by regulatory and judicial authorities; the risk we may never get additional patent protection for linaclotide, apraglutide and other product candidates, that patents for linaclotide, apraglutide or other products may not provide adequate protection from competition, or that we are not able to successfully protect such patents; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the risk that the development of any of our linaclotide pediatric programs, apraglutide and/or IW-3300 is not successful or that any of our product candidates does not receive regulatory approval or is not successfully commercialized; outcomes in legal proceedings to protect or enforce the patents relating to our products and product candidates, including abbreviated new drug application litigation; the risk that financial and operating results may differ from our projections; developments in the intellectual property landscape; challenges from and rights of competitors or potential competitors; the risk that our planned investments do not have the anticipated effect on our company revenues; developments in accounting guidance or practice; Ironwood’s or AbbVie’s accounting practices, including reporting and settlement practices as between Ironwood and AbbVie; the risk that our indebtedness could adversely affect our financial condition or restrict our future operations; and the risks listed under the heading “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2023, and in our subsequent Securities and Exchange Commission filings.

Condensed Consolidated Balance Sheets (In thousands) (unaudited)
		September 30, 2024				December 31, 2023
Assets
Cash and cash equivalents		$	88,211			$	92,154
Accounts receivable, net			76,202				129,122
Prepaid expenses and other current assets			14,191				12,012
Total current assets			178,604				233,288
Property and equipment, net			4,795				5,585
Operating lease right-of-use assets			11,430				12,586
Intangible assets, net			3,067				3,682
Deferred tax assets			185,338				212,324
Other assets			6,285				3,608
Total assets		$	389,519			$	471,073
Liabilities and stockholders’ equity
Accounts payable		$	3,236			$	7,830
Accrued research and development costs			9,408				21,331
Accrued expenses and other current liabilities			33,566				44,254
Current portion of operating lease liabilities			3,173				3,126
Current portion on convertible senior notes			-				199,560
Total current liabilities			49,383				276,101
Operating lease liabilities, net of current portion			12,882				14,543
Convertible senior notes, net of current portion			198,817				198,309
Revolving credit facility			400,000				300,000
Other liabilities			39,771				28,415
Total stockholders’ deficit			(311,334	)			(346,295	)
Total liabilities and stockholders’ deficit		$	389,519			$	471,073

Condensed Consolidated Statements of Income (Loss) (In thousands, except per share amounts) (unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
Total revenues		$	91,592			$	113,739			$	260,865			$	325,182
Collaborative arrangements revenue			91,592				113,739				260,865				325,182
Costs and expenses:
Research and development			29,827				32,985				86,030				80,409
Selling, general and administrative			36,113				36,046				110,682				119,647
Restructuring			16				4,685				2,520				17,696
Acquired in-process research and development			-				-				-				1,090,449
Total costs and expenses1			65,956				73,716				199,232				1,308,201
Income (loss) from operations			25,636				40,023				61,633				(983,019	)
Other income (expense):
Interest expense and other financing costs			(9,419	)			(9,839	)			(24,120	)			(13,206	)
Interest and investment income			1,152				1,748				3,690				17,777
Gain on derivatives			-				-				-				19
Other income (expense), net			(8,267	)			(8,091	)			(20,430	)			4,590
Income (loss) before income taxes			17,369				31,932				41,203				(978,429	)
Income tax expense			(13,723	)			(17,982	)			(42,579	)			(51,385	)
GAAP net income (loss)1			3,646				13,950				(1,376	)			(1,029,814	)
Less: GAAP net loss attributable to noncontrolling interests			-				(1,371	)			-				(28,662	)
GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc.		$	3,646			$	15,321			$	(1,376	)		$	(1,001,152	)
GAAP net income (loss) per share—basic		$	0.02			$	0.10			$	(0.01	)		$	(6.45	)
GAAP net income (loss) per share—diluted		$	0.02			$	0.09			$	(0.01	)		$	(6.45	)

____________________
¹ Figures presented for the nine months ended September 30, 2023 include a one-time charge of approximately $1.1 billion related to acquired IPR&D from the acquisition of VectivBio in the second quarter of 2023.

Reconciliation of GAAP Results to Non-GAAP Financial Measures
(In thousands, except per share amounts) (unaudited)

A reconciliation between net income (loss) on a GAAP basis and on a non-GAAP basis is as follows:

		Three Months Ended September 30,							Nine Months Ended September 30,
			2024			2023				2024				2023
GAAP net income (loss)1		$	3,646		$	13,950			$	(1,376	)		$	(1,029,814	)
Adjustments:
Mark-to-market adjustments on the derivatives related to convertible notes, net			-			-				-				(19	)
Amortization of acquired intangible assets			207			207				616				211
Restructuring expenses			16			4,685				2,520				17,696
Acquisition-related costs			-			3,864				1,146				39,545
Tax effect of adjustments			-			(904	)			(461	)			(1,447	)
Non-GAAP net income (loss)1		$	3,869		$	21,802			$	2,445			$	(973,828	)

A reconciliation between basic net income (loss) per share on a GAAP basis and on a non-GAAP basis is as follows:

		Three Months Ended September 30,							Nine Months Ended September 30,
			2024			2023				2024				2023
GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share – basic		$	0.02		$	0.10			$	(0.01	)		$	(6.45	)
Plus: Net income (loss) per share attributable to noncontrolling interests – basic			-			(0.01	)			-				(0.18	)
Adjustments to GAAP net income per share (as detailed above)			-			0.05				0.02				0.36
Non-GAAP net income (loss) per share – basic		$	0.02		$	0.14			$	0.01			$	(6.27	)
Weighted average number of common shares used to calculate net income (loss) per share — basic			159,706			158,810				155,886				155,240

____________________
¹ Figures presented for the nine months ended September 30, 2023, include a one-time charge of approximately $1.1 billion related to acquired IPR&D from the acquisition of VectivBio in the second quarter of 2023.

A reconciliation between diluted net income (loss) per share on a GAAP basis and on a non-GAAP basis is as follows:

		Three Months Ended September 30,							Nine Months Ended September 30,
			2024			2023				2024				2023
GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share – diluted		$	0.02		$	0.09			$	(0.01	)		$	(6.45	)
Plus: Net income (loss) per share attributable to noncontrolling interests – diluted			-			(0.01	)			-				(0.18	)
Adjustments to GAAP net income per share (as detailed above)			-			0.04				0.02				0.36
Non-GAAP net income (loss) per share – diluted		$	0.02		$	0.12			$	0.01			$	(6.27	)
Weighted average number of common shares used to calculate net income (loss) per share — diluted			160,232			186,891				158,810				155,240

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA (In thousands) (unaudited)
A reconciliation of GAAP net income (loss) to adjusted EBITDA:
		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
GAAP net income (loss)1		$	3,646			$	13,950			$	(1,376	)		$	(1,029,814	)
Adjustments:
Mark-to-market adjustments on the derivatives related to convertible notes, net			-				-				-				(19	)
Restructuring expenses			16				4,685				2,520				17,696
Interest expense			9,419				9,839				24,120				13,206
Interest and investment income			(1,152	)			(1,748	)			(3,690	)			(17,777	)
Income tax expense			13,723				17,982				42,579				51,385
Depreciation and amortization			507				507				1,526				1,063
Acquisition-related costs			-				3,864				1,146				39,545
Adjusted EBITDA1		$	26,159			$	49,079			$	66,825			$	(924,715	)

____________________
¹ Figures presented for the nine months ended September 30, 2023, include a one-time charge of approximately $1.1 billion related to acquired IPR&D from the acquisition of VectivBio in the second quarter of 2023.

U.S. LINZESS Commercial Collaboration1 Revenue/Expense Calculation (In thousands) (unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
LINZESS U.S. net sales as reported by AbbVie2		$	225,537			$	278,954			$	693,320			$	798,854
AbbVie & Ironwood commercial costs, expenses and other discounts3			78,499				77,736				232,811				223,142
Commercial profit on sales of LINZESS		$	147,038			$	201,218			$	460,509			$	575,712
Commercial Margin4			65	%			72	%			66	%			72	%
Ironwood’s share of net profit			73,519				100,609				230,255				287,856
Reimbursement for Ironwood’s commercial expenses			9,567				9,480				28,961				28,615
Adjustment for Ironwood’s estimate of LINZESS gross-to-net reserves			5,800				-				(7,200	)			-
Ironwood’s U.S. collaborative arrangements revenue5		$	88,886			$	110,089			$	252,016			$	316,471

____________________
¹ Ironwood collaborates with AbbVie on the development and commercialization of linaclotide in North America. Under the terms of the collaboration agreement, Ironwood receives 50% of the net profits and bears 50% of the net losses from the commercial sale of LINZESS in the U.S. The purpose of this table is to present calculations of Ironwood’s share of net profit (loss) generated from the sales of LINZESS in the U.S. and Ironwood’s collaboration revenue/expense; however, the table does not present the research and development expenses related to LINZESS in the U.S. that are shared equally between the parties under the collaboration agreement. Please refer to the table at the end of this press release for net profit for the U.S. LINZESS brand collaboration with AbbVie.
² LINZESS net sales are recognized using AbbVie’s revenue recognition accounting policies and reporting conventions. As a result, certain rebates and discounts are classified as LINZESS U.S. commercial costs, expenses and other discounts within Ironwood’s calculation of collaborative arrangements revenue.
³ Includes certain discounts recognized and cost of goods sold incurred by AbbVie; also includes commercial costs incurred by AbbVie and Ironwood that are attributable to the cost-sharing arrangement between the parties.
⁴ Commercial margin is defined as commercial profit on sales of LINZESS as a percent of total LINZESS U.S. net sales.
⁵ Figures presented for the three months and nine months ended September 30, 2024 include a $5.8 million increase and $7.2 million reduction to collaborative arrangement revenues, respectively, as a result of an adjustment recorded for Ironwood’s estimate of LINZESS gross-to-net reserves as of September 30, 2024.

US LINZESS Full Brand Collaboration1 Revenue/Expense Calculation (In thousands) (unaudited)
		Three Months Ended September 30,						Nine Months Ended September 30,
		2024			2023			2024			2023
LINZESS U.S. net sales as reported by AbbVie2		$	225,537		$	278,954		$	693,320		$	798,854
AbbVie & Ironwood commercial costs, expenses and other discounts3			78,499			77,736			232,811			223,142
AbbVie & Ironwood R&D Expenses4			7,451			9,264			24,823			28,270
Total net profit on sales of LINZESS		$	139,587		$	191,954		$	435,686		$	547,442

____________________
¹ Ironwood collaborates with AbbVie on the development and commercialization of linaclotide in North America. Under the terms of the collaboration agreement, Ironwood receives 50% of the net profits and bears 50% of the net losses from the commercial sale of LINZESS in the U.S. The purpose of this table is to present calculations of the total net profit (loss) generated from the sales of LINZESS in the U.S., including the commercial costs and expenses and the research and development expenses related to LINZESS in the U.S. that are shared equally between the parties under the collaboration agreement.
² LINZESS net sales are recognized using AbbVie’s revenue recognition accounting policies and reporting conventions. As a result, certain rebates and discounts are classified as LINZESS U.S. commercial costs, expenses and other discounts within Ironwood’s calculation of collaborative arrangements revenue.
³ Includes certain discounts recognized and cost of goods sold incurred by AbbVie; also includes commercial costs incurred by AbbVie and Ironwood that are attributable to the cost-sharing arrangement between the parties.
⁴ Expenses related to LINZESS in the U.S. are shared equally between Ironwood and AbbVie under the collaboration agreement.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241107549223/en/

Investors:

Greg Martini, 617-374-5230

gmartini@ironwoodpharma.com

Matt Roache, 617-621-8395

mroache@ironwoodpharma.com

Media:

Beth Calitri, 978-417-2031

bcalitri@ironwoodpharma.com

Source: Ironwood Pharmaceuticals, Inc.

FAQ

What was Ironwood Pharmaceuticals (IRWD) revenue in Q3 2024?

Ironwood Pharmaceuticals reported total revenue of $91.6 million in Q3 2024, compared to $113.7 million in Q3 2023.

What was LINZESS prescription growth for IRWD in Q3 2024?

LINZESS prescription demand grew 13% year-over-year in Q3 2024, reaching 54 million capsules.

What is Ironwood's (IRWD) 2024 revenue guidance?

Ironwood maintains its 2024 guidance with total revenue expected between $350-375 million and U.S. LINZESS net sales of $900-950 million.

When will Ironwood (IRWD) submit the apraglutide NDA?

Ironwood plans to complete the apraglutide NDA submission in the first quarter of 2025.