Ironwood at The Citizens JMP Life Sciences Conference: Strategic Outlook

On Wednesday, 07 May 2025, Ironwood Pharmaceuticals (NASDAQ:IRWD) presented at The Citizens JMP Life Sciences Conference 2025. The company highlighted its strategic initiatives and financial outlook amidst both challenges and opportunities. Key topics included the growth of LINZESS, developments in the Aproglutide pipeline, and strategic alternatives to enhance shareholder value.

Key Takeaways

• Ironwood raised its EBITDA target from $85 million to $105 million.
• LINZESS continues to show high single-digit demand growth.
• Aproglutide development faces delays due to FDA trial requirements.
• The company is exploring strategic options to address perceived undervaluation.
• Net sales are projected to remain within the $800 million to $850 million range.

Financial Results

• Ironwood raised its EBITDA target from $85 million to $105 million, reflecting confidence in its financial performance.
• Net sales are expected to be between $800 million and $850 million, despite adjustments in accounting methods by partner AbbVie.
• Changes in revenue recognition by AbbVie will introduce seasonality in net sales, with a larger impact in Q1.
• The company is focusing on cash flow management and debt compliance, restructuring to optimize financial stability.

Operational Updates

• LINZESS remains a primary revenue driver, with efforts underway to pursue an over-the-counter (OTC) pathway to extend its market presence.
• Ironwood is working closely with the FDA on a required confirmatory trial for Aproglutide, a potential treatment for short bowel syndrome.
• The company is reducing commercial investments in LINZESS and Aproglutide while maintaining strong medical affairs within the gastrointestinal community.

Future Outlook

• Ironwood is actively exploring strategic alternatives to maximize shareholder value, including potential asset monetization.
• The company aims to launch an OTC version of LINZESS, which could increase its market longevity.
• Aproglutide’s confirmatory trial is expected to be smaller and faster, with the possibility of adding another dosage to evaluate its full potential.
• The profitability of LINZESS is anticipated to grow as the company shifts towards a harvest mode.

Q&A Highlights

• Ironwood expressed confidence in managing debt obligations and maintaining compliance with debt covenants.
• The medical affairs group will continue to engage with key players in the gastrointestinal field.
• The company is considering additional dosages in the Aproglutide trial to explore its full potential.

For a detailed understanding of Ironwood’s strategic plans and financial outlook, refer to the full conference call transcript below.

Full transcript - The Citizens JMP Life Sciences Conference 2025:

Jason, Host, Citizens Life Science Conference: Say good afternoon. Welcome to the Citizens Life Science Conference. Happy to be joined next by Ironwood Pharmaceuticals. Ironwood is a company focused on GI diseases and has, been commercializing successfully LINZESS for, about the last decade. Exciting new pipeline product in Aproglutide, for the treatment of short bowel syndrome.

We’ll we’ll we’ll talk about that as well. We’re we’re joined this morning by Tom McCourt, company’s CEO and Greg Martini, CFO. So Tom, Greg, really appreciate you being here. You reported earnings this morning. Yeah.

It’s always always fun. Well,

Tom McCourt, CEO, Ironwood Pharmaceuticals: Yeah. First Go ahead.

Jason, Host, Citizens Life Science Conference: I’d say, maybe just give you the opportunity, Tom, to give a quick intro and we’ll jump into

Tom McCourt, CEO, Ironwood Pharmaceuticals: Well first of all Jason, thanks for having us and thanks, a big thanks to Citizen to let us participate. As you know, it’s been a very very active few months for us as an organization. As you mentioned, we reported earnings earlier this morning. The LINZESS, which you had mentioned, it’s continued to do extremely well as far as growth demand. High single digits in it’s what, twelfth year.

It’s just really been a remarkable molecule over time. And we reiterated our guidance for the year. We’re on track to either meet or exceed the guidance. We also raised our EBITDA target from $85,000,000 to $105,000,000 And so we also disclosed earlier, a few weeks ago, that our partner, AbbVie, has changed some of their accounting mechanisms by which they account for reserves for rebates, which is going to create some seasonality in how it affects the net sales, and the first impact that Greg will explain in greater detail was this first quarter. And we also believe that it will change over time and we’re very confident if demand continues to hold up, that we’ll certainly land the EBITDA and certainly land the net sales goal.

As far as APRA, Aproglutide, which we believe will be the best in class GLP-two initially for short bowel syndrome, the largest clinical trial ever run-in this disease entity. We had very strong efficacy data, as you know, but particularly good safety and tolerability data, which is a bit of a challenge sometimes with Gaddix, where we saw basically placebo like adverse event reporting with a once a week injection. So we’re very bullish on that, and we were a little surprised and somewhat disappointed that FDA has asked us to do a conservative trial. We talk a bit more specifically about that, but right now we’re working with the FDA to get that up and running as fast as we can. We think it’s largely going to be a smaller study that we could probably do faster, but I think there’s no question the market opportunity is there, this is going be the best in class GLP-two and we just want to get it to patients as quickly as we can.

The last piece that we did announce a couple weeks ago also is you know, with some of the pricing pressures that we’ve had on LINZESS combined with the delay with the APRA as far as the additional trial, we’re certainly evaluating other strategic options, alternatives for us as an organization. And we’ve been very busy over the last couple weeks since we announced it. And the good news is we’re getting a lot of inbound interest, lots of different opportunities and structures that we’ll be working through, but we’ll certainly keep everybody posted as we move forward because the real intent here is how do we create more shareholder value, which obviously we are not satisfied with the stock performance where it is and I think there’s a real opportunity to turn that around. Great.

Jason, Host, Citizens Life Science Conference: Thanks Tom. Maybe we’ll start with Liz S. And the demand growth. So you said it’s incredible how consistently the product has grown year over year, quarter over quarter almost. So what is it today that is still driving demand growth for the product?

Tom McCourt, CEO, Ironwood Pharmaceuticals: Yeah I think it’s three things still. One, there’s still a lot of patients out there suffering, tens of millions. You know, as good as the drug has done, we’ve treated like five to 6,000,000 patients, which is incredible. But there’s tens of millions out there that are still suffering. Certainly this is a best in class clinical profile, but I think the treatment satisfaction that we see both from patients and physicians is best in class.

And then you combine that with very broad payer access, you know we invest heavily into payer access, it’s easy to prescribe. So I think this is still, you know, how do we drive demand and continue to catapult it? I think we do see a play towards the end of LOE to take it over the counter. There’s no question, we’ve been in conversations with the FDA already about what it’s going to take and there’s a clear path forward that could create a longer tail. Cause it’s very big market.

I had the opportunity to do that both with Prilosec and Exxiom, which were highly successful drugs as you know, over the counter, as well as prescription drug. But those are very crowded markets. This is as big as far as prevalence of patients, but there’s only a couple of different players and this drug could really thrive in that environment.

Jason, Host, Citizens Life Science Conference: Every year you and your partner AbbVie think about not just the growth opportunity but also the investment that you’re putting behind the Can you talk about that most recent conversations, those most recent conversations, and just how much are you investing in that growth at the tail end of the branded life cycle?

Tom McCourt, CEO, Ironwood Pharmaceuticals: You know, this is something, as you know, we’ve evolved over time, and this was largely early on, literally, you know, this was solely about personal promotion, then we moved into consumer advertising, etcetera, and we’ve evolved the marketing mix quite a bit, and we’ve continued to kind of ratchet down the personal promotion because once you get such a strong position in the market, I mean, have 50% market share, how much personal promotion do you really need? So we’ve really, you know, we launched with 1,400,000 calls, now we’re down to like almost 200,000 calls. But the growth of the brand hasn’t slowed down, it’s actually accelerated. So it’s really primarily, we’re still going to be present in the offices, that’s largely AbbVie that will be doing that, and we’ll continue to look at the investment in the consumer advertising because the benefit of consumer advertising isn’t just new patients, it’s also reminding the millions of patients that have taken it to go refill their prescriptions when they have symptoms again. So it’s a very, very profitable marketing tool.

But we’ve continued to reduce the investment to increase the profitability of the brand, and everything we’ve done to tweak it has not slowed down the growth. So I think we have great confidence that it will continue to grow as we continue to maximize the profitability of the brand.

Jason, Host, Citizens Life Science Conference: Great. You mentioned the changes that AbbVie made to revenue recognition. Can you just walk us through those details? And I think the the important thing you said was seasonality. Yeah.

Right? And you expect there to be a there was an impact in one q but there there’s not going to be an impact overall to the full year. So Right. Can you just walk us through those dynamics and what changed?

Greg Martini, CFO, Ironwood Pharmaceuticals: Yeah, absolutely. So I think Jason you hit the two key points in terms of our confidence in the full year. In the first quarter we saw 8% prescription demand growth, that’s in line with our expectations of high single digits for the full year. We reiterated our full year expectation of 800 to 8 50 million for net sales even with the lower net sales in the first quarter. Our confidence in this is really driven by the fact that this change is focused on really gross to net rebate estimates being tied to units dispensed in the quarter, which is more closely linked to the actual channels that those units are now being sold through.

And in the first quarter we always have a seasonal dynamic where we have lower volumes in the first quarter that are sold to wholesalers. In the first quarter historically units dispensed have exceeded units sold to wholesalers and that’s ultimately what’s resulting in a larger rebate now in the first quarter relative to gross sales. So Q1 is being impacted because you have more units being dispensed. In subsequent quarters you’ll see gross sales and units dispensed to be more aligned in terms of that seasonality and so we really have historical data to really provide confidence that we are on track for the full year and that this is really more of a pronounced impact in Q1. Another

Jason, Host, Citizens Life Science Conference: part of the net price discussion has been the Medicare Part D rebuild. Can you just walk us through the background there, how you think it has impacted LINZESS and what your confidence is now that you understand those dynamics moving forward through 2025?

Greg Martini, CFO, Ironwood Pharmaceuticals: Yeah absolutely so again just going back to our guidance and our expectations for the year, our range of 800 to 850,000,000 took into account several assumptions associated with the Part D redesign being the first year with this impact. We feel like we’ve conservatively covered the range of outcomes of of what could play out with the Part D redesign for LINZESS. I’d say the key for us ultimately will be these new manufacturer rebates in the initial and catastrophic coverage tiers and ultimately as we get further into the year we’ll see what portion of the LINZESS Medicare volumes are going through each of the initial and catastrophic phases. We again feel very confident our guidance range accounts for the various scenarios of what those volumes could look like and we’ll continue to have better visibility into the potential impact as the year progresses.

Jason, Host, Citizens Life Science Conference: Fantastic. Tony you mentioned OTC. You made some progress over the last couple years with the FDA and the label for LINZESS itself giving the FDA some more comfort around I guess I’d describe it as theoretical safety questions. Where do you think the FDA, what is your strategy, let me ask it that to get the product approved in an OTC format?

Tom McCourt, CEO, Ironwood Pharmaceuticals: Yeah, so the issue that FDA had, there was theoretical concern that kids have more GCC receptors than adults, so higher density, and therefore will be more sensitive to LINZESS. And there was also a preclinical study in neonatal mice where we saw some dehydration and deaths in the rats, which we ended up with this box warning for all kids under the 18. Since we’ve, one, we’ve disproved the hypothesis because it isn’t true that they have a higher density. Two, the neonatal mice was never a validated model. And then we ran clinical trials as part of a post marketing requirement to make sure that we knew how it would behave in kids.

And what we saw is very good efficacy in kids with very good tolerability. So the first group was kids from six to 17, which then got added to our label, the only drug ever approved for pediatric constipation. We then have just finished a trial with a cohort of two year olds to six year olds. That looks very good as far as tolerability. So there’s clearly a path forward to eliminate the box, which then creates an opportunity for us to take it over the counter.

Because we obviously want to take it over the counter with as clean as label. And by the way, I live this with Prilosec. Don’t know if you remember one hundred years ago, Prilosec launched with a box warning for carcinoid tumors. We were able to work with the FDA to remove that box, and of course it became one of the biggest OTC brands ever.

Jason, Host, Citizens Life Science Conference: Right, right. Guess positively you have very good visibility into loss of exclusivity. You can plan for that. Can you just speak, I guess there’s a couple questions here. One, what’s the investment in the brand going to be as we approach LOE?

But also, as we get past this year when we have more certainty around the Medicare Part D rebuild, how much more visibility and certainty will you have about net price between now and the end of brand life?

Tom McCourt, CEO, Ironwood Pharmaceuticals: Yeah, think it’s going to the net price is going to get increasingly more predictable, right? I think we see this as kind of the transition year where I think we’re going to go back to seeing net sales growth over the next three or four years. Part of that is how we’re contracting and how much broader access do we really need considering how strong the brand is in the marketplace. So we’ll certainly be really critically assessing that. We’re moving towards a harvest mode for the brand, where we can increase certainly more profitability while the brand continues to thrive.

So I think that’s kind of the path forward. One, I think we’re going see an increase in net sales over time. I think you’ll see greater profitability of the brand as we head into LOE and then at some point we’ll have to figure out when do we bring the OTC into the market.

Jason, Host, Citizens Life Science Conference: Got it. Okay. So would love to switch over to apaglutide. You said, you know, potentially best in class GLP two. We we we agree.

Not not just the, you know, profile, but also the clinical data look look fantastic. So can you just this is an asset that you you you acquired. I guess it’s getting on two years ago now. Can you just walk us through what attracted you to the product in the first place and how you view the product profile in the marketplace?

Tom McCourt, CEO, Ironwood Pharmaceuticals: Yeah, I think for me it all starts with the unmet medical need, right? And when we looked at this market, I mean I think clearly Gaddix was an advancement in care, but it’s a daily injection, it’s not well tolerated, and over half these patients discontinue within the first twelve to eighteen months because they either can’t take the injection every day they just can’t tolerate the drug. So there was clearly a benefit to the patient if they could keep them on the drug. So what we saw in Aproglutide was one, it was clearly a more potent agent, it was clearly a much, much longer acting agent, and it could be a once a week. So we felt one, if it worked and the patients could tolerate it better, with a once a week injection, I can hang on to those patients for a longer period of time.

So that was exciting, that’s what really got us going. But I think what we’ve learned over time, which is new and we shared some of this data with the FDA recently, is the longer these patients are on, the better they get. And so we announced that of the one hundred and ten patients that were in the treatment arm, we had almost 27 patients that were completely off parental support. So these patients went from five to seven days, eight to ten hours a day of parental support to nothing. And we’re seeing that continuing to grow in the extension trial, which the FDA strongly encourages us to include it in the NDA package because nobody’s ever seen this before.

So I think you combine the unmet medical need with the clinical profile, but also the ability to keep patients on drug so they can really realize the full benefit of therapy over time, you know, is really an incredible clinical profile to bring to market and bring to patients.

Jason, Host, Citizens Life Science Conference: And I think it’s important to remember that you highlighted some of the limitations of GADx, but it’s still a very success drug. Mean its peak sales of around 700,000,000.

Tom McCourt, CEO, Ironwood Pharmaceuticals: In The US, yeah.

Jason, Host, Citizens Life Science Conference: It’s growing.

Tom McCourt, CEO, Ironwood Pharmaceuticals: It’s continuing to grow in spite of the fact that they have trouble keeping patients on. So I think about every patient that we get will probably be more valuable because we can hang on to them longer. So

Jason, Host, Citizens Life Science Conference: when you acquired the asset the phase three START trial was already ongoing, you read out the results from that trial last year, trial met like primary endpoint, multiple secondary endpoints. Can you just walk us through the kind of key takeaways from the phase three trial?

Tom McCourt, CEO, Ironwood Pharmaceuticals: Yeah, well certainly the fact that as you know there’s two anatomies of patients, those that have a stoma and those that have some remnant colon. And in our primary endpoint, we showed that both contributed to the positive endpoint and that was a lengthy conversation with FDA. Because we had a third secondary endpoint where we just looked at CIC at rather than twenty four weeks, forty eight, where we saw separation but wasn’t statistically significant. So it raised some questions about does the drug really work in CIC. There’s no question the drug works in these people that have remnant colon that I think we were able to get good alignment with the FDA on.

So I think that piece was really the telling piece. The piece that evolved was post phase three, we started looking at the kinetics and dynamics, and the drug exposure was lower than we expected. And so we didn’t understand why. Was it a bioavailability issue, was it an administration issue? So we did a rather extensive root cause analysis, and what we found was that the way the drug was being administered, the full five mg wasn’t actually administered.

So it was less than five mg, but the reality is the drug still worked, it was extremely well tolerated, and it was a consistent dose, right? So we felt very good about going in and having a conversation with the FDA about it to make sure we’re clear on kind of the path forward. All of our advisors were fully supportive, And so we were a bit surprised when the FDA came back and said, Yeah, we agree that the trial was successful, the profile looks good, but this dose thing, we’d like you to run another confirmatory trial just to make sure we know you’re in control of the dose. And since then we’ve also significantly improved the delivery device that we would test anyways. So now we really need to get this confirmatory study up and running.

We’ll be talking to the FDA in the coming weeks, but this is gonna, like I said, it’ll be a much smaller trial for probably the primary endpoint, which will be a twenty four week endpoint. So hopefully we can get it up and running quickly. I think the good news here is all the study centers are still in the extension trial. So we don’t have to activate study centers, can just go right into the study centers and start recruiting patients. And I think that’s the one thing we learned a lot about is how to find these patients, and then how to get them into the trial as quickly as we can.

Jason, Host, Citizens Life Science Conference: So one point you mentioned was that you weren’t delivering the full dose. Is there a potential then if you delivered the full dose that you would see better efficacy? And at the same time I’ll ask the question like, there any safety concern by delivering the full dose?

Tom McCourt, CEO, Ironwood Pharmaceuticals: Well you know, first of all the answer is yes and I don’t know yet. So we have to obviously match the dose from the first trial, which we’ll do. The one question is do you add another dose? Right, and to really say how good could the drug really be? Which is a question we should definitely answer at some point.

But I think right now we really want to focus on, let’s satisfy the FDA with regard to the least effective dose that’s extremely well tolerated. I mean we have no evidence that the tolerability changes from what we’ve seen so far, so I think we’re fairly confident that we could probably push the dose, maybe have a better clinical response, but I think that’s obviously work to do as far as our life cycle is concerned.

Jason, Host, Citizens Life Science Conference: Got it. And then just back to that FDA dialogue right now, you mentioned maybe a smaller trial, hopefully faster to results. What are the other components of trial design that you still think need to be agreed with FDA?

Tom McCourt, CEO, Ironwood Pharmaceuticals: So I think it’s pretty straightforward because we have a validated endpoint, an accepted endpoint. As far as a primary endpoint, we definitely want to have both patient populations, stoma and remnant colon patients in the trial. The primary endpoint has been at twenty four weeks, so I think those are the key components. I don’t think there’s going to be much change beyond that. The only other thing that we would consider depending on what we end up doing with our strategic options is do I add another dose?

And to really push to see how good the drug could be.

Jason, Host, Citizens Life Science Conference: A few minutes left, maybe we could just talk about the strategic alternatives, process. I’m guessing there’s not a ton more you can say, but just how are you thinking about the different options that you have? What I guess, you have a, you know, a sense of what you’re willing to to consider versus scenarios that you’re less in favor of?

Tom McCourt, CEO, Ironwood Pharmaceuticals: Maybe I’ll just say a couple of things and I’ll hand it over to Greg because obviously he’s closer to it. He’s really largely running the process. Think being in a situation where you have two great assets and, you know, we’ve got some debt that we gotta manage. Right? And I think I think these are two very attractive assets, and I think we’re getting some inbound interest, and maybe Greg can, you know, kinda share more about kind of the range of things we’re seeing.

Greg Martini, CFO, Ironwood Pharmaceuticals: Yeah. Absolutely. I think the the acknowledgement that we have at this very moment is where we’re trading from market cap standpoint. As Tom mentioned, we have two valuable assets in Linzess and aproglutide, each individually likely more valuable than where we’re trading today as an enterprise. And really the concern is ultimately the funding and the balance sheet associated with our current portfolio.

So as we look at all these options, we’re really looking to realize more of the potential of each individual asset whether that’s through addressing our balance sheet or potentially monetizing either one or both of the assets that we have in our portfolio.

Jason, Host, Citizens Life Science Conference: Got it. And guess just when you think about where you’re sitting today with the EBITDA guidance that you have out there, what’s your comfort level about, you know, managing that debt in the in the near term or in the near to mid term?

Greg Martini, CFO, Ironwood Pharmaceuticals: Yeah. Absolutely. I think OpEx and cash flow management is is definitely a key focus of mine. We took some steps to restructure the organization earlier this year with the intent of driving cash flows and making sure that we were going to be in a position to continue to repay debt and meet our debt obligations. That continues to be a focus.

I have a very high degree of confidence that we will be able to continue to maintain our debt covenant compliance, that will continue to drive cash flows and with the recent increase in adjusted EBITDA guidance, provides additional comfort, with our ability to do that.

Jason, Host, Citizens Life Science Conference: So so one of the things as as part of that process is you’ve you’ve pulled back on the commercial investment for for aproglutide as well as your your field force for for LINZESS. One of the things that that’s always been core to Ironwood is that that expertise and and physician relationship network within the GI community. How are you planning to maintain that as you run through this confirmatory study and then get ready potentially to launch a product again when that study’s done?

Tom McCourt, CEO, Ironwood Pharmaceuticals: Yeah, think we saw this as really a pivot year for us. As I mentioned, we had been throttling back the selling effort both within the GI community as well as the primary care community. And looking at what we really needed to do to be successful for Aproglutide was really a different selling model with far fewer reps in the large academic and large GI practices, who’s kind of where the future was gonna go. So we were gonna have to retool that and really build out a hub service group for patient support. So that was really kind of the focus point.

I think certainly we still have a very strong medical affairs group that knows all the key GI players and we have certainly a great heritage there that I think when it’s time to retool, we’ll be able to retool quickly.

Jason, Host, Citizens Life Science Conference: Fantastic. Well Tom, Greg, really appreciate you being with us this afternoon. Looking forward to staying up to date on the progress. Jason.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.