Ironwood Pharmaceutical, Inc. (NASDAQ:IRWD)’s Has High Prospects Despite Low Q2 Earnings

779

By Chris Hillman on August 6, 2014 BioPharma

Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) posted a loss of 38 cents for each of the company’s share. The figures are not bad compared with numbers from the same quarter a year back: the loss was 57 cents for each share. However, the company missed the Zacks estimate of 36 cents loss by 2 cents. The stock prices of Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) jumped up by 1.9 percent as soon as the news hit the market despite this loss.

ironwood

The revenues of the company fell down by 29.2 percent, on yearly basis, and came to a total of $6.8 million, missing the Zacks prediction of $15 million. Based on the sequential figures, the revenues were down by 53 percent because of a decrease in the company’s wholesale inventory. The company only had 2-3 inventory weeks during the second quarter.

Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) works with Actavis (ACT) to market its Linzess drug, commonly known as Constella. The drug was designed for people suffering from the irritable bowel syndrome. If compared sequentially, the sales of Constella drug increased by 3 percent during the second quarter. The total revenue raised by Constella came to a total of $62.7 million. download (7)

Why Ironwood Pharmaceuticals Stocks is Up

The company filled almost 326,000 prescriptions during the second quarter of the year 2014. In just the past three month sales have gone up by 48%. Half of Ironwood Pharmaceutical total revenue of $5 million for fourth quarter of 2013 came from Linzess alone. News has it that this increase resulted due to the direct to consumer campaign launched by the company, which promoted Linzess prescription all over the country. The company is now planning to expand its reach to primary care physicians as well as gastroenterologists.

Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) is trying to expand its operations in order to reduce the out of pockets expenses borne by the patients. Linzess can be accessed freely by the patients who are on their Medicare Part D or insurance plans.
EU partner of Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), Almirall, has introduced the medicine in almost ten European States including Italy and UK. The company is planning on launching the product in other countries as well. Almirall, however, could not come to an agreement with the Health Insurance Association of Germany on the refund price of the drug and has decided to stop the marketing of Linzess in that country.

The drug is backed up by a number of patents, and chances are that it will not face any competition till 2031.

Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) is running its tests on Linzess for prevention of colon cancer and constipation that opium addicts experience. The company will start phase 2 of its trials in the third quarter of the year, and the results will be available by the third quarter of the year 2015. The company is also performing its test on IW-3718 and IW-9179.

TV Ad Promotions

The company’s administrative and general expenses decreased by 5.1 percent and came to a total of $29.3 million for its second quarter. Research and Development costs came down by 8.1 percent, with a total expense of $22.1 million. Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) expects its expenses to remain within the range of $215 million – $245 million for the current fiscal year. As for the marketing costs of Linzess, the company expects the expenses to stay within the boundaries of $240 million and $270 million as they launch further TV Ad promotions which has been responsible for high drug sales.