[May 05, 2015] |
|
Ironwood Pharmaceuticals Provides First Quarter 2015 Investor Update
Ironwood
Pharmaceuticals, Inc. (NASDAQ: IRWD) today provided an update on its
first quarter 2015 and recent business activities.
"Strong fundamentals continued to fuel LINZESS prescriptions and net
sales growth, resulting in another solid quarter of profitability for
the LINZESS brand, and we expect at least 16 years of continued
expansion ahead for the U.S. linaclotide franchise," said Peter Hecht,
chief executive officer of Ironwood. "Our innovative pipeline continues
to advance, with positive Phase IIa data for IW-3718 and several
important inflection points expected later this year, including up to
four additional clinical data readouts. We are also excited to apply our
strong commercial capabilities through a collaboration with Exact
Sciences to co-promote their innovative colon cancer diagnostic,
Cologuard."
First Quarter 2015 and Recent Highlights
LINZESS®
(linaclotide)
-
LINZESS U.S. net sales, as provided by Actavis plc, were $95.5 million
in the first quarter of 2015, an approximately 57% increase compared
to the first quarter of 2014.
-
Approximately 460,000 total LINZESS prescriptions were filled in the
first quarter of 2015, an approximately 90% increase compared to the
first quarter of 2014, and more than 2.4 million LINZESS prescriptions
have been filled since the product's launch in December 2012,
according to IMS Health.
-
Higher year over year growth in total LINZESS prescriptions
relative to LINZESS net sales was due to (i) a higher build of
wholesaler inventory in the first quarter of 2014, and (ii) a
previously disclosed change in accounting methodology in the third
quarter of 2014 that resulted in certain costs related to LINZESS
co-pay assistance programs, previously recognized as sales and
marketing expenses, now being recognized as gross-to-net
adjustments.
-
Net profit for the LINZESS brand collaboration in the U.S., including
commercial costs and expenses and research and development (R&D)
expenses, was $15.2 million in the first quarter of 2015. LINZESS U.S.
net profit is shared equally with Actavis.
-
Greater than 125,000 healthcare practitioners have prescribed LINZESS
to nearly 630,000 unique patients since the product's launch,
according to IMS Health.
-
More than 70% of people with commercial insurance or Medicare Part D
plans had unrestricted access to LINZESS as of March 2015.
Additionally, as of March 2015, more than 75% of people with
commercial insurance had access to LINZESS for a co-pay of $30 or less
through formulary coverage or the LINZESS Instant Savings Program.
Research & Development
Ironwood continues to advance its innovative pipeline. During 2015, the
company expects up to ten ongoing clinical studies and five clinical
data readouts, including the recent positive IW-3718 Phase IIa data.
-
Ironwood and Actavis continue to evaluate opportunities to strengthen
the clinical utility of linaclotide in its indicated patient
population, as well as to develop and seek approval of linaclotide in
additional indications, patient populations and formulations.
Development highlights during the first quarter and recent period
include:
-
Faster than anticipated enrollment in the Phase III clinical trial
assessing the efficacy and safety of a once-daily 72 mcg dose of
linaclotide in adult patients with chronic idiopathic constipation
(CIC). If approved, the 72 mcg dose and the currently approved 145
mcg dose would provide a broader range of treatment options to
physicians and adult CIC patients. Data from this trial are now
expected in the second half of 2015 and a supplemental new drug
application is expected to be submitted to the U.S. Food and Drug
Administration (FDA) in the first half of 2016.
-
Ongoing enrollment in the Phase II clinical study evaluating
linaclotide for the treatment of adults suffering from
opioid-induced constipation. Data from this study are expected in
the second half of 2015.
-
Selection of two linaclotide colonic release formulations to be
evaluated in a Phase IIb clinical study in adult patients with
irritable bowel syndrome with constipation (IBS-C). The Phase IIb
study is now expected to initiate in the second half of 2015 with
data anticipated in the second half of 2016.
-
Ironwood continues to advance its pipeline of gastrointestinal (GI)
product candidates and its soluble guanylate cyclase (sGC) program.
Development highlights during the first quarter and recent period
include:
-
Positive top-line data reported from an exploratory Phase IIa
clinical study evaluating IW-3718, Ironwood's investigational
gastric retentive bile acid sequestrant. Data from this study
demonstrated encouraging improvements in relief of heartburn and
certain other symptoms often associated with refractory
gastroesophageal reflux disease (GERD). Ironwood intends to
advance IW-3718 into a dose-ranging Phase IIb study following
development of the commercial-ready formulation.
-
Continued enrollment in a Phase IIa clinical study evaluating the
ability of IW-9179 to provide relief of diabetic gastroparesis
symptoms. IW-9179 is a guanylate cyclase-C
(GC-C) agonist
designed to target the upper GI tract. Data from this study are
expected in the first half of 2016.
-
Started dosing in a Phase I clinical study of IW-1973 with data
expected in the second half of 2015. IW-1973 is the first clinical
compound in a broad library of sGC stimulators discovered by
Ironwood. The company expects to initiate a Phase I clinical study
with its second sGC candidate, IW-1701, in the second half of
2015. Both IW-1973 and IW-1701 are being explored for the
potential treatment of cardiovascular diseases.
Global Partnerships for Linaclotide
-
Ironwood and AstraZeneca AB completed enrollment in a Phase III
clinical trial of linaclotide in adults with IBS-C for China. Data
from this trial are expected in the second half of 2015.
-
Astellas Pharma Inc. continues to enroll patients in its Phase III
clinical trial of linaclotide in adult patients with IBS-C for Japan,
and expects to complete the trial in 2016. In addition, Astellas
recently initiated a Phase II clinical study of linaclotide in adult
patients with chronic constipation for Japan. Astellas expects to
complete the Phase II study in 2016.
-
Almirall, S.A. continues to commercialize CONSTELLA®
(linaclotide) in Europe, where it is approved for adult patients with
moderate to severe IBS-C and is available in 10 European countries,
including the United Kingdom, Italy and Spain.
Cologuard®
Co-Promote
-
Ironwood and Exact Sciences Corp. agreed to co-promote Exact Sciences'
Cologuard, the first and only FDA-approved noninvasive stool DNA
screening test for colorectal cancer. Ironwood's clinical sales
specialists began promoting Cologuard in April 2015. Under the terms
of the deal, Ironwood will be compensated from the net sales generated
from the physicians on whom it calls. The non-exclusive co-promotion
agreement covers an initial one-year term with the opportunity for
extension.
Corporate and Financials
-
Collaborative Arrangements Revenue. Collaborative arrangements
revenue was approximately $28.9 million in the first quarter of 2015
compared to approximately $14.6 million in the first quarter of 2014.
Revenue consisted of approximately $25.1 million in revenue associated
with Ironwood's share of the net profits and losses from the sales of
LINZESS in the U.S., as well as approximately $3.8 million in
amortization of deferred revenue associated with consideration
received from Ironwood's collaboration with Astellas, revenue
recognized in connection with the collaboration with AstraZeneca,
sales of linaclotide active pharmaceutical ingredient (API), and
royalty payments based on sales of linaclotide in territories outside
of the U.S.
-
Cost of revenue. Cost of revenue is recognized upon shipment of
linaclotide API to certain licensing partners outside of the U.S.
Actavis records costs associated with linaclotide API in the U.S. Cost
of revenue was insignificant in the first quarter of 2015 as compared
to $1.9 million in the first quarter of 2014.
-
Operating Expenses. Operating expenses were approximately $57.0
million in the first quarter of 2015 as compared to approximately
$57.1 million in the first quarter of 2014, which included
non-recurring charges totaling $4.3 million associated with Ironwood's
headcount reduction in January 2014. Operating expenses in the first
quarter of 2015 consisted of approximately $26.6 million in R&D
expenses, including an approximately $4.3 million receivable recorded
from Actavis for reimbursement of certain prior period manufacturing
activities. Operating expenses also consisted of approximately $30.3
million in selling, general and administrative (SG&A) expenses.
Non-cash share-based compensation expenses recorded in R&D and SG&A
expenses in the first quarter of 2015 were approximately $2.1 million
and $3.4 million, respectively.
-
Interest Expense. Interest expense was approximately $5.2
million in the first quarter of 2015, as compared to approximately
$5.3 million in the first quarter of 2014, in connection with the $175
million debt financing executed in January 2013.
-
Net Loss. Net loss was approximately $33.2 million, or $0.24
per share, in the first quarter of 2015, as compared to approximately
$49.6 million, or $0.38 per share, in the first quarter of 2014.
-
Cash Position. Ironwood ended the first quarter of 2015 with
approximately $216 million of cash, cash equivalents and
available-for-sale securities. Ironwood used approximately $36 million
of cash for operations during the first quarter of 2015, as compared
to approximately $58 million in the first quarter of 2014 and
approximately $38 million in the fourth quarter of 2014, excluding the
$15.0 million milestone payment received during the fourth quarter
from Astellas upon initiation of a linaclotide Phase III IBS-C trial
for Japan.
-
2015 Financial Guidance.
-
Ironwood continues to expect its 2015 total operating expenses to
be in the range of $220 million to $250 million, which includes
$105 million to $120 million in R&D expenses and $115 million to
$130 million in SG&A expenses.
-
Ironwood continues to expect combined Actavis and Ironwood total
2015 marketing and sales expenses for LINZESS to be in the range
of $230 million to $260 million.
Conference Call Information
Ironwood will host a conference call and webcast at 4:30 p.m. Eastern
Time, on Tuesday, May 5, to discuss its first quarter 2015 and recent
business activities. Individuals interested in participating in the call
should dial (877) 643-7155 (U.S. and Canada) or (914) 495-8552
(international) using conference ID number 26622828. To access the
webcast, please visit the Investors section of Ironwood's website at www.ironwoodpharma.com
at least 15 minutes prior to the start of the call to ensure adequate
time for any software downloads that may be required. The call will be
available for replay via telephone starting at approximately 7:30 p.m.
Eastern Time, on May 5, running through 11:59 p.m. Eastern Time on May
12, 2015. To listen to the replay, dial (855) 859-2056 (U.S. and Canada)
or (404) 537-3406 (international) using conference ID number 26622828.
The archived webcast will be available on Ironwood's website for 14 days
beginning approximately one hour after the call has completed.
About LINZESS (linaclotide)
LINZESS® is the first and only guanylate cyclase-C (GC-C)
agonist approved by the FDA and is indicated for the treatment of both
irritable bowel syndrome with constipation (IBS-C) and chronic
idiopathic constipation (CIC) in adults. LINZESS is a once-daily capsule
that helps relieve the abdominal pain and constipation associated with
IBS-C, as well as the constipation, infrequent stools, hard stools and
incomplete evacuation associated with CIC. The recommended dose is 290
mcg for IBS-C patients and 145 mcg for CIC patients. LINZESS should be
taken at least 30 minutes before the first meal of the day.
LINZESS is thought to work in two ways based on nonclinical studies.
LINZESS binds to the GC-C receptor locally, within the intestinal
epithelium. Activation of GC-C results 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 placebo-controlled Phase III clinical trials of more than 2,800
adults, LINZESS was shown to reduce abdominal pain in IBS-C patients and
increase bowel movement frequency in both IBS-C patients and CIC
patients. Improvement in abdominal pain and constipation occurred in the
first week of treatment and was maintained throughout the 12-week
treatment period. Maximum effect on abdominal pain was seen at weeks 6-9
and maximum effect on constipation occurred during the first week. When
a subset of LINZESS-treated patients in the trials were switched to
placebo, they reported their symptoms returned toward pretreatment
levels within one week, while placebo-treated patients switched to
LINZESS reported symptom improvements. LINZESS is contraindicated in
pediatric patients under 6 years of age. The use of LINZESS in pediatric
patients 6 through 17 years of age should be avoided. In nonclinical
studies, administration of a single, clinically relevant adult oral dose
of linaclotide caused deaths due to dehydration in young juvenile mice.
The safety and efficacy of LINZESS in pediatric patients under 18 years
of age have not been established. In adults with IBS-C or CIC treated
with LINZESS, the most commonly reported adverse event was diarrhea.
Ironwood and Actavis plc are co-promoting LINZESS in the United States.
Linaclotide is marketed by Almirall, S.A. for the treatment of adults
with moderate to severe IBS-C in Europe under the brand name CONSTELLA®.
Ironwood also has partnered with Astellas Pharma Inc. for development
and commercialization of linaclotide in Japan and with AstraZeneca AB
for development and commercialization in China.
About CONSTELLA (linaclotide)
Linaclotide is a guanylate cyclase-C receptor agonist (GCCA) with
visceral analgesic and secretory activities. Linaclotide is a 14-amino
acid synthetic peptide structurally related to the endogenous guanylin
peptide family. Both linaclotide and its active metabolite bind to the
guanylate cyclase-C receptor, on the luminal surface of the intestinal
epithelium. Through its action at GC-C, linaclotide has been shown to
reduce visceral pain and increase GI transit in animal models and
increase colonic transit in humans. Activation of GC-C results in an
increase in concentrations of cyclic guanosine monophosphate (cGMP),
both extracellularly and intracellularly. Extracellular cGMP decreases
pain-fiber activity, resulting in reduced visceral pain in animal
models. Intracellular cGMP causes secretion of chloride and bicarbonate
into the intestinal lumen, through activation of the cystic fibrosis
transmembrane conductance regulator (CFTR), which results in increased
intestinal fluid and accelerated transit.
Linaclotide was discovered by scientists at Ironwood and is marketed by
Almirall, S.A. for the treatment of adults with moderate to severe IBS-C
in Europe under the brand name CONSTELLA, through a license agreement
between the two companies.
About Ironwood Pharmaceuticals
Ironwood Pharmaceuticals (NASDAQ: IRWD) is focused on creating medicines
that make a difference for patients, building value to earn the
continued support of our fellow shareholders, and empowering our team to
passionately pursue excellence. We discovered, developed and are
commercializing linaclotide, which is approved in the United States and
a number of other countries. Our pipeline priorities include exploring
further opportunities for linaclotide, as well as leveraging our
therapeutic expertise in gastrointestinal disorders and our
pharmacologic expertise in guanylate cyclases to address patient needs
across the upper and lower gastrointestinal tract. Ironwood was founded
in 1998 and is headquartered in Cambridge, Mass. Connect with us at www.ironwoodpharma.com
or on Twitter (News - Alert) at www.twitter.com/ironwoodpharma;
information that may be important to investors will be routinely posted
in both these locations.
LINZESS® and CONSTELLA® are trademarks owned by
Ironwood Pharmaceuticals, Inc. Any other trademarks referred to in this
press release are the property of their respective owners. All rights
reserved.
Important Safety Information
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WARNING: PEDIATRIC RISK
|
LINZESS is contraindicated in pediatric patients under 6 years
of age. In nonclinical studies, administration of a
single, clinically relevant adult oral dose of linaclotide caused
deaths due to dehydration in young juvenile mice. Use
of LINZESS should be avoided in pediatric patients 6
through 17 years of age. The safety and efficacy of LINZESS has
not been established in pediatric patients under 18
years of age.
|
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Contraindications
-
LINZESS is contraindicated in pediatric patients under 6 years of age.
-
LINZESS is contraindicated in patients with known or suspected
mechanical gastrointestinal obstruction.
Warnings and Precautions
Pediatric Risk
-
LINZESS is contraindicated in children under 6 years of age. The
safety and effectiveness of LINZESS in pediatric patients under 18
years of age have not been established. In neonatal mice, increased
fluid secretion as a consequence of GC-C agonism resulted in mortality
within the first 24 hours due to dehydration. Due to increased
intestinal expression of GC-C, children under 6 years of age may be
more likely than older children and adults to develop significant
diarrhea and its potentially serious consequences.
-
Use of LINZESS should be avoided in pediatric patients 6 through 17
years of age. Although there were no deaths in older juvenile mice,
given the deaths in young juvenile mice and the lack of clinical
safety and efficacy data in pediatric patients, use of LINZESS should
be avoided in pediatric patients 6 through 17 years of age.
Diarrhea
-
Diarrhea was the most common adverse reaction of LINZESS-treated
patients in the pooled IBS-C and CIC double-blind placebo-controlled
trials. Severe diarrhea was reported in 2% of LINZESS-treated
patients. The incidence of diarrhea was similar in the IBS-C and CIC
populations.
-
Patients should be instructed to stop LINZESS if severe diarrhea
occurs and to contact their healthcare provider. The healthcare
provider should consider dose suspension and rehydration.
Adverse Reactions
-
In IBS-C clinical trials, the most common adverse reactions in
LINZESS-treated patients (incidence =2% and greater than placebo) were
diarrhea (20% vs 3% placebo), abdominal pain (7% vs 5%), flatulence
(4% vs 2%), headache (4% vs 3%), viral gastroenteritis (3% vs 1%) and
abdominal distension (2% vs 1%).
-
In CIC clinical trials, the most common adverse reactions in
LINZESS-treated patients (incidence =2% and greater than placebo) were
diarrhea (16% vs 5% placebo), abdominal pain (7% vs 6%), flatulence
(6% vs 5%), upper respiratory tract infection (5% vs 4%), sinusitis
(3% vs 2%) and abdominal distension (3% vs 2%).
Please see full Prescribing Information including Boxed Warning:
http://www.frx.com/pi/linzess_pi.pdf
This press release contains forward-looking statements. Investors are
cautioned not to place undue reliance on these forward-looking
statements, including, but not limited to, statements about development,
launch and commercialization plans for linaclotide and our product
candidates; commercial efforts for linaclotide and the drivers, timing,
impact and results thereof; market size, growth and opportunity, and
potential demand for linaclotide and our product candidates, as well as
their potential impact on applicable markets; growth in LINZESS U.S. net
sales relative to total LINZESS prescription growth and the drivers
thereof; the potential indications for, and benefits of, linaclotide and
our product candidates; the anticipated timing of pre-clinical, clinical
and regulatory developments; the design, timing and results of clinical
and pre-clinical studies; expected periods of patent exclusivity; the
strength of the intellectual property protection for our product and
product candidates; potential business development activity and the
timing and impact thereof; profitability of the U.S. LINZESS brand
collaboration with Actavis plc; and our company's financial performance
and results, and guidance and expectations related thereto, including
our projected 2015 operating expenses, revenue growth, operating
leverage, and 2015 marketing and sales expense for LINZESS. 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,
but are not limited to, those related to pre-clinical and clinical
development, manufacturing, and formulation development; the risk that
findings from our completed nonclinical and clinical studies may not be
replicated in later studies; decisions made by U.S. regulatory
authorities, the U.S. Patent and Trademark Office and their foreign
counterparts; the risk that we may never get sufficient patent
protection for linaclotide and our product candidates; intellectual
property rights of competitors or potential competitors; efficacy,
safety and tolerability of linaclotide and our product candidates;
competition in disease states; the commercial potential of linaclotide
and our product candidates; the risk that our planned investments do not
have the anticipated effect on our company revenues, linaclotide or our
product candidates; the risk that we are unable to identify and execute
on business development opportunities in a cost-effective and timely
manner or that such opportunities do not have the impact expected; the
risk that we are unable to manage our operating expenses over the year
due to foreseeable or unforeseeable events or occurrences; and the risk
that we and Actavis are unable to commercialize LINZESS within the
guided range of expenses. Applicable risks also include those that are
listed under the heading "Risk Factors" and elsewhere in Ironwood's
Annual Report on Form 10-K for the year ended December 31, 2014, in
addition to the risk factors that are listed from time to time in
Ironwood's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q
and any other subsequent SEC (News - Alert) filings. Ironwood undertakes no obligation
to update these forward-looking statements to reflect events or
circumstances occurring after this press release. Except as otherwise
noted, these forward-looking statements speak only as of the date of
this press release. All forward-looking statements are qualified in
their entirety by this cautionary statement. Further, Ironwood
considers the net profit for the U.S. LINZESS brand collaboration with
Actavis in assessing the product's performance and calculates it based
on inputs from both Ironwood and Actavis. This figure should not be
considered a substitute for Ironwood's GAAP financial results. An
explanation of our calculation of this figure is provided in the U.S.
LINZESS Brand Collaboration table and related footnotes accompanying
this press release.
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Condensed Consolidated Balance Sheets
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(In thousands)
|
(unaudited)
|
|
|
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|
|
|
|
|
|
|
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March 31, 2015
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December 31, 2014
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Assets
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|
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|
|
|
|
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Cash, cash equivalents and available-for-sale securities
|
|
|
|
|
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$
|
215,865
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|
|
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$
|
248,334
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Accounts receivable, net
|
|
|
|
|
|
33,849
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|
|
|
|
25,839
|
Inventory
|
|
|
|
|
|
4,950
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|
|
|
|
4,954
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Prepaid expenses and other current assets
|
|
|
|
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9,212
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|
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|
10,603
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Total current assets
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|
|
|
|
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263,876
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|
|
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289,730
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Property and equipment, net
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|
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|
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27,477
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|
|
|
|
29,826
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Other assets
|
|
|
|
|
|
14,175
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|
|
|
|
13,957
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Total assets
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|
|
|
|
|
$
|
305,528
|
|
|
|
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$
|
333,513
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Liabilities and Stockholders' Equity
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|
|
|
|
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|
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Accounts payable and accrued expenses
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|
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$
|
33,232
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|
|
|
|
$
|
35,948
|
Current portion of capital lease obligations
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|
|
|
|
|
1,177
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|
|
|
|
1,152
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Current portion of deferred rent
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|
|
|
|
|
5,006
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|
|
|
|
4,992
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Current portion of deferred revenue
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|
|
|
|
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7,191
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|
|
|
|
7,191
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Current portion of long-term debt
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|
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13,207
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|
|
|
|
11,258
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Total current liabilities
|
|
|
|
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59,813
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|
|
|
|
60,541
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Capital lease obligations
|
|
|
|
|
|
2,268
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|
|
|
|
2,571
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Deferred rent
|
|
|
|
|
|
9,935
|
|
|
|
|
10,522
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Deferred revenue
|
|
|
|
|
|
7,191
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|
|
|
|
8,989
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Notes payable
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|
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|
158,159
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|
|
|
|
162,338
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Total stockholders' equity
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|
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68,162
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|
|
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|
88,552
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Total liabilities and stockholders' equity
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|
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$
|
305,528
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$
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333,513
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Condensed Consolidated Statements of Operations
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(In thousands, except per share amounts)
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(unaudited)
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Three Months Ended March 31,
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2015
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2014
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Collaborative arrangements revenue
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$
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28,932
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$
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14,605
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Cost and expenses:
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Cost of revenue
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12
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|
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1,924
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Research and development (1)
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26,641
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27,144
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Selling, general and administrative (1)
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30,346
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29,924
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Total cost and expenses
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56,999
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58,992
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Loss from operations
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(28,067
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)
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(44,387
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)
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Other expense
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|
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(5,155
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)
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(5,239
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)
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Net loss
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$
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(33,222
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)
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$
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(49,626
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)
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Net loss per share-basic and diluted
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$
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(0.24
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)
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$
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(0.38
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)
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Weighted average number of common shares used in net loss per
share - basic and diluted
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|
|
|
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141,278
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|
|
|
|
|
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129,745
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(1) Non-cash compensation expenses reflected in the condensed consolidated
statements of operations are as follows:
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Research and development
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$
|
2,054
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|
|
|
|
|
$
|
2,690
|
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Selling, general and administrative
|
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$
|
3,372
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$
|
3,384
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U.S. LINZESS Brand Collaboration1
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Revenue/Expense Calculation
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(in thousands)
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(unaudited)
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Three Months Ended
March 31,
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2015
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2014
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LINZESS U.S. net sales2
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$
|
95,489
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$
|
60,812
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Commercial costs and expenses3
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|
58,151
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|
|
59,916
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Net profit on sales of LINZESS
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$
|
37,338
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$
|
896
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Ironwood's share of net profit
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$
|
18,669
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|
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$
|
448
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Ironwood's selling, general and administrative expenses4
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$
|
7,688
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$
|
7,999
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Profit share adjustment5
|
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$
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(1,220
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)
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$
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-
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Ironwood's collaborative arrangement revenue
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$
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25,137
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$
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8,447
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1
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Ironwood collaborates with Actavis 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. For the three months ended March 31, 2015, net profit for
the U.S. LINZESS brand collaboration with Actavis was $15.2 million,
calculated by subtracting $58.2 million in commercial costs and
expenses and $22.1 million in research and development expenses,
from LINZESS U.S. net sales of $95.5 million.
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2
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For the three months ended March 31, 2014, certain costs related to
the LINZESS co-pay assistance programs were recorded as sales and
marketing expenses. Beginning in the third quarter of 2014, and
following the integration of Forest Laboratories, Inc. with Actavis
plc., these costs are recorded as gross-to-net adjustments.
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3
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Includes cost of goods sold incurred by Actavis as well as selling,
general and administrative expenses incurred by Actavis and Ironwood
that are attributable to the cost-sharing arrangement between the
parties.
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4
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Includes Ironwood's selling, general and administrative expenses
attributable to the cost-sharing arrangement with Actavis.
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5
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Ironwood or Actavis may incur additional expenses related to certain
contractual obligations, resulting in an adjustment to the company's
share of the net profits as stipulated by the collaboration
agreement.
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