Ironwood Pharma Provides Q2 Financials, Terminates Deal with AstraZeneca

Published: Aug 06, 2018 By

Microscope Earnings Money

Ironwood Pharmaceuticals, located in Cambridge, Massachusetts, released its second-quarter financial report and updated its business activities. Key among the announcements was the termination of a license deal with AstraZeneca for its lesinurad franchise.

Lesinurad is in two products, Duzallo (lesinurad and allopurinol) and Zurampic (lesinurad), both used to treat gout. In January of this year, the company evaluated its franchise in an attempt to develop a better marketing strategy in specific test markets. The results the company indicates “did not meet expectations.” And as a result, they have ended the U.S. lesinurad license agreement with AstraZeneca, which will be effective 180 days from the notice.

The company says it expects to save about $75 million to $100 million in full-year 2019 operating expenses as a result of the termination, and cut about 125 staffers, mostly field-based sales employees. It expects one-time charges related to the reduction of staff of about $10 to $13 million. The company had already eliminated about 60 field-based sales jobs in January related to the test market study.

“After initiating the lesinurad market tests in early 2018 and assessing the results in July, we have decided to terminate our licensing agreement with AstraZeneca in its entirety,” said Peter Hecht, the company’s chief executive officer, in a statement. “This action is not taken lightly, but it is an important decision that we believe enables us to allocate capital to the highest return opportunities and drive growth. We are working to maintain appropriate availability of lesinurad for patients and physicians during the termination period.”

Otherwise, the company reported a 14 percent increase in sales of Linzess, used to treat irritable bowel syndrome with constipation and chronic constipation with no known cause. This drug is marketed in collaboration in the U.S. with Allergan. In the second quarter, net sales were $192 million.

The company also reported that in May, Ironwood and Allergan had reached an agreement with Aurobindo Pharma to resolve litigation over Aurobindo’s abbreviated new drug application (ANDA) for a generic version of Linzess before the two companies’ patents expired. Under the terms of the settlement, Aurobindo will be able to market its generic version in the U.S. starting on August 5, 2030.

On the pipeline side, the company is enrolling patients in a Phase III trial for IW-3718, for the treatment of persistent gastroesophageal reflux disease (GERD). It is enrolling patients in its Phase II trials to evaluate praliciguat for diabetic nephropathy and heart failure, and for Phase II trials for IW-1701 for sickle cell disease and achalasia.

In May, Ironwood indicated that it planned to split into two independent, publicly traded companies, Ironwood and “R&D Co.” This split is expected to finish in the first half of 2019. Ironwood will focus on GI diseases with its products Linzess, IW-3718 and linaclotide delayed release. R&D Co. will focus on work in cyclic guanosine monophosphate (cGMP) drugs for serious and orphan diseases, led by praliciguat and olinciguat, and three tissue-targeted sGC programs, including IW-6463 for severe central nervous system diseases, and programs for severe liver and lung disease.

Total revenue for the quarter was $81.1 million, compared to $65.1 million in the second quarter of 2017.

“Ironwood’s performance during the second quarter was driven by year-over-year topline growth of approximately 25 percent, continued strong Linzess demand, initiation of Phase III programs for IW-3718 and linaclotide, and further enrollment in Phase II trials for praliciguat and olinciguat,” Hecht said in a statement.

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