Full Press Release Details
Pharmaceuticals Reports Fourth Quarter and Full Year 2020 Results, Exceeding or Meeting Full Year 2020 Financial Guidance; Provides
Full Year 2021 Financial Guidance
LINZESS (linaclotide) 2020 U.S. net sales of $931 million, up 10% year-over-year; Ironwood expects 2021 U.S. LINZESS
net sales growth of 3 to 5% -
2020 total revenue of $390 million, driven primarily by $369 million in
U.S. LINZESS collaboration revenue -
2020 GAAP net income was $106 million and adjusted EBITDA was $161 million;
ended 2020 with $363 million in cash and cash equivalents -
Full year 2021 total revenue guidance of $370 to $385 million and
adjusted EBITDA guidance of >$190 million -
Mass., February 17, 2021 - Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD), a GI-focused healthcare company, today
provided an update on its fourth quarter and full year 2020 results and recent business performance.
fourth quarter marked a strong finish to 2020, which is a testament to the hard work and dedication of the Ironwood team. LINZESS
U.S. net sales grew 10% year-over-year in 2020 - remarkable growth in the face of the COVID-19 pandemic - and Ironwood
delivered its second full year of profits. While the year did bring disappointing outcomes within the development portfolio, the
team took thoughtful actions to help better position Ironwood for the future," said Mark Mallon, chief executive officer
of Ironwood. "Looking ahead, Ironwood has a tremendous opportunity to maximize LINZESS through innovative commercial strategies,
build its GI pipeline by pursuing assets for serious, organic GI diseases, and deliver sustainable profits and cash flow. I believe
in Ironwood's future as a GI leader, as it seeks to progress its mission to advance the treatment of GI diseases and redefine
the standard of care for patients."
Quarter and Full Year 2020 Financial Highlights1
thousands, except for per share amounts)
| 4Q 2020 | 4Q 2019 | FY 2020 | FY 2019 | |||||||||||||
| Total revenues | $ | 116,680 | $ | 126,301 | $ | 389,523 | $ | 428,413 | ||||||||
| Total costs and expenses | 65,296 | 76,708 | 246,583 | $ | 308,290 | |||||||||||
| GAAP income from continuing operations | 43,204 | 47,858 | 106,176 | 58,943 | ||||||||||||
| GAAP net income | 43,204 | 47,858 | 106,176 | 21,505 | ||||||||||||
| GAAP net income per share - basic | 0.27 | 0.31 | 0.67 | 0.14 | ||||||||||||
| GAAP net income per share - diluted | 0.27 | 0.30 | 0.66 | 0.14 | ||||||||||||
| Adjusted EBITDA | 65,952 | 54,515 | 160,678 | 147,791 | ||||||||||||
| Non-GAAP net income | 56,934 | 47,090 | 127,687 | 85,497 | ||||||||||||
| Non-GAAP net income per share - basic | 0.36 | 0.30 | 0.80 | 0.55 | ||||||||||||
| Non-GAAP net income per share - diluted | 0.36 | 0.30 | 0.79 | 0.55 |
Quarter and Full Year 2020 Corporate Highlights
| - | Prescription Demand : Total LINZESS prescription demand in the fourth quarter of 2020 was 38 million LINZESS capsules, an 8% increase compared to the fourth quarter of 2019, per IQVIA. Total prescription demand was 144 million LINZESS capsules for the full year 2020, a 9% increase compared to the full year 2019, per IQVIA. |
| - | U.S. Brand Collaboration : |
| U.S. LINZESS Full Brand Collaboration 1 | Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| (in thousands, except for percentages) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
| LINZESS U.S. net sales as reported by AbbVie | $ | 278,320 | $ | 239,650 | $ | 931,211 | $ | 844,761 | ||||||||
| AbbVie & Ironwood commercial costs, expenses and other discounts | 97,992 | 56,940 | 260,825 | 270,150 | ||||||||||||
| Commercial margin | 65 | % 2 | 76 | % | 72 | % | 68 | % | ||||||||
| AbbVie & Ironwood R&D Expenses | 11,889 | 16,344 | 51,295 | 60,870 | ||||||||||||
| Total net profit on sales of LINZESS | 168,439 | 166,366 | 619,091 | 513,741 | ||||||||||||
| Full brand margin | 61 | % | 69 | % | 66 | % | 61 | % |
Promotional Partnerships and Global Collaborations
Quarter and Full Year Financial Results
| - | Total revenues in the fourth quarter of 2020 consisted of $110.7 million associated with Ironwood's share of the net profits from the sales of LINZESS in the U.S., $3.5 million in linaclotide royalties, co-promotion and other revenue, and $2.5 million in sales of linaclotide API. Total revenues in the fourth quarter of 2019 consisted of $101.6 million associated with Ironwood's share of the net profits from the sales of LINZESS in the U.S., $20.6 million in sales of linaclotide API, and $4.1 million in linaclotide royalties, co-promotion and other revenue. | |
| - | Total revenues for the full year 2020 consisted of $368.6 million associated with Ironwood's share of the net profits from the sales of LINZESS in the U.S., $12.9 million in linaclotide royalties, co-promotion and other revenue, and $8.0 million in sales of linaclotide API. Total revenues for the full year 2019 consisted of $325.5 million associated with Ironwood's share of the net profits for the sales of LINZESS in the U.S., $48.8 million in sales of linaclotide API, $42.4 million in license and non-contingent milestone payments, and $11.7 million in linaclotide royalties, co-promotion and other revenue. |
| _ | Operating expenses for the full year 2020 consisted primarily of $140.0 million in SG&A expenses, $88.1 million in R&D expenses, $15.4 million in restructuring expenses, and $3.1 million in cost of revenues. Operating expenses for the full year 2019 consisted primarily of $172.5 million in SG&A expenses, $115.0 million in R&D expenses, $23.8 million in cost of revenues, and $3.6 million in restructuring expenses partially offset by $3.5 million related to the settlement of non-cancellable purchase commitments and a $3.2 million gain on lease modification in connection with the separation of Ironwood and Cyclerion Therapeutics, Inc. (Cyclerion) completed on April 1, 2019. | |
| _ | Restructuring expenses for the full year 2020 are related to a workforce reduction in connection with Ironwood's decision to discontinue IW-3718. Ironwood reduced its workforce by approximately 100 full-time employees. The workforce reduction was substantially completed in the fourth quarter of 2020. |
| - | Income Tax Expense. Ironwood recorded $1.3 million in state income taxes in the fourth quarter of 2020 and $2.7 million for the full year 2020, primarily in connection with a change in California tax law that temporarily disallows the use of net operating losses. Ironwood did not record any income tax expense in 2019. |
| - | Net Income. |
| _ | Ironwood recorded $43.2 million and $47.9 million in income from continuing operations during the fourth quarter of 2020 and 2019, respectively. Ironwood recorded $106.2 million and $58.9 million in income from continuing operations during the full year 2020 and 2019, respectively. | |
| _ | Ironwood did not incur any separation-related expenses for the full year 2020. Ironwood recorded $37.4 million in GAAP net loss from discontinued operations for the full year 2019. |
| _ | Ironwood ended 2020 with $362.6 million of cash and cash equivalents, compared to $177 million of cash and cash equivalents at the end of 2019. | |
| _ | Ironwood generated $51.5 million in cash from operations in the fourth quarter of 2020, compared to $27.6 million in cash from operations in the fourth quarter of 2019. Ironwood generated $168.8 million in cash from operations for the full year 2020, compared to $10.7 million for the full year 2019. |
| 2020 Results | Revised 2020 Guidance | Original 2020 Guidance | ||||||||||
| U.S. LINZESS Net Sales Growth | 10 | % | ~10 | % | Mid-single digit % increase | |||||||
| Total Revenue | $390 million | High end of $370 - $385 million | $360 - $380 million | |||||||||
| Adjusted EBITDA 1 | $161 million | ~$150 million | >$105 million |
Adjusted EBITDA is calculated by subtracting net interest expense, income taxes, depreciation, amortization, mark-to-market
adjustments on derivatives related to Ironwood's 2022 Convertible Notes, restructuring expenses, separation expenses, and
loss on extinguishment of debt from GAAP income from continuing operations.
2021, Ironwood expects:
| 2021 Guidance | ||||
| U.S. LINZESS Net Sales Growth | 3% to 5% | |||
| Total Revenue | $370 to $385 million | |||
| Adjusted EBITDA 1 | >$190 million |
Adjusted EBITDA is calculated by subtracting net interest expense, income taxes, depreciation, amortization, mark-to-market
adjustments on derivatives related to Ironwood's 2022 Convertible Notes, restructuring expenses, separation expenses, and
loss on extinguishment of debt from GAAP income from continuing operations.
presents non-GAAP net income and non-GAAP net income per share to exclude the impact of net gains and losses on derivatives related
to our 2022 Convertible Notes that are required to be marked-to-market. Ironwood also excludes restructuring, separation-related
expenses, and loss on extinguishment of debt from non-GAAP net income, if any. These adjustments, as applicable, are reflected
in the non-GAAP net income in the fourth quarter and full year 2020 and 2019 presented in this press release. Non-GAAP adjustments
are further detailed below:
also presents adjusted EBITDA, a non-GAAP measure, as well as guidance on adjusted EBITDA. Adjusted EBITDA is calculated by subtracting
net interest expense, income taxes, depreciation, amortization, mark-to-market adjustments on derivatives related to Ironwood's
2022 Convertible Notes, restructuring expenses, separation expenses and loss on extinguishment of debt from GAAP income from continuing
operations. The adjustments are made on a similar basis as described above related to non-GAAP net income, as applicable.
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 and non-GAAP net income per share to GAAP net income and GAAP net
income per share, respectively, and for a reconciliation of adjusted EBITDA to income from continuing operations on a GAAP basis,
please refer to the tables at the end of this press release.
does not provide guidance on GAAP income from continuing operations or a reconciliation of expected adjusted EBITDA to expected
GAAP income from continuing operations 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 income from continuing operations for the guidance period.
will host a conference call and webcast at 8:30 a.m. Eastern Time on Wednesday, February 17, 2021 to discuss its fourth quarter
and full year 2020 results and recent business activities. Individuals interested in participating in the call should dial (833)
350-1432 (U.S. and Canada) or (647) 689-6932 (international) using conference ID number and event passcode 4598414. 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 11:30 a.m. Eastern Time on February 17, 2021 running through 11:59 p.m. Eastern
Time on March 3, 2021. To listen to the replay, dial (800) 585-8367 (U.S. and Canada) or (416) 621-4642 (international) using
conference ID number 4598414. The archived webcast will be available on Ironwood's website for 14 days beginning approximately
one hour after the call has completed.
Ironwood Pharmaceuticals
Pharmaceuticals (Nasdaq: IRWD) is a GI-focused healthcare company dedicated to creating medicines that make a difference for patients
living with GI diseases. We discovered, developed and are commercializing linaclotide, the U.S. branded prescription market leader
for adults with irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC).
was founded in 1998 and is headquartered in Boston, Mass. For more information, please visit our website at www.ironwoodpharma.com or www.twitter.com/ironwoodpharma;
information that may be important to investors will be routinely posted in both these locations.
LINZESS (linaclotide)
is the #1 prescribed brand for the treatment of adult patients with irritable bowel syndrome with constipation (IBS-C) and chronic
idiopathic constipation (CIC), based on IQVIA data.
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. 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. LINZESS should be taken at least 30 minutes before
the first meal of the day.
is contraindicated in pediatric patients less than 6 years of age. The safety and effectiveness of LINZESS in pediatric patients
less than 18 years of age have not been established. In neonatal mice, linaclotide increased fluid secretion as a consequence
of guanylate cyclase-C (GC-C)
agonism resulting in mortality within the first 24 hours due to dehydration. Due to increased intestinal expression of GC-C, patients
less than 6 years of age may be more likely than patients 6 years of age and older to develop severe diarrhea and its potentially
serious consequences. In adults with IBS-C or CIC treated with LINZESS, the most commonly reported adverse event was diarrhea.
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.
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