A Pharma You WON’T Want To Miss!

One successful or lackluster drug can make or break small and mid-sized pharmaceutical ventures. Savvy development strategies and an efficient pipeline are a must in this competitive sector.

Ironwood Pharmaceutical has used their industry knowledge to build partnerships and develop drugs with a high probability for success. They accomplish this by concentrating on three simple drug development criteria.

  • They identify medical conditions where there is a significant unmet need for effective treatment solutions
  • They target disorders that are highly symptomatic
  • They develop pharmaceutical treatment solutions whose superior effectiveness can be easily demonstrated with solid clinical evidence

 

QUICK FACTS

Ticker                                     IRWD

Industry                                  Medical Laboratories & Research

Recent Price                          $10.80

Market Cap                            $1.2 b

Shares Outstanding              107.4 m

Average Volume                    185,588

Dividend Yield                        N/A

Website                                  http://www.ironwoodpharma.com/

 

COMPANY DESCRIPTION

In August 2012, Ironwood Pharmaceutical’s (IRWD) newest drug – LINZESS™ (Linaclotide) – received FDA approval, leading to an $85 million milestone payment from partner and pharmaceutical heavy hitter, Forest Laboratories (FRX).

LINZESS™ has shown considerable promise as an irritable bowel syndrome (IBS) treatment during clinical trials. It was first discovered by Ironwood scientists in 2003. They secured financial support and partnership for LINZESS™ development, production and distribution from Forest Laboratories beginning in 2007.

IRWD has been able to leverage this combined strength to increase the size, scope and speed of LINZESS™ development, with commercialization forecast to begin in December 2012.

FINANCIALS

IRWD’s most recent quarterly numbers were released on November 6, 2012.

The company reported revenue of $96.4 million in the quarter. Up from last year’s third quarter revenue of $12.2 million. This is an increase of 689.1%. Ironwood Pharmaceutical also reported a net income of approximately $47.6 million… a year-over-year increase from a net loss of $20.6 million.

As of September 30, 2012, the company reported $125.8 million in cash and $360,000 of long-term debt.

 

KEY METRICS ANALYSIS

Trailing P/E                                       N/A

Price / Sales                                     7.5 x

Return on Assets                            -9.6 %

Insider ownership                             0.2 %

Short Ratio                                       22.2 x

Current Ratio                                    5.7 x

Total Debt To Equity                         0.4 x

 

RECENT EVENTS

On November 28, 2012, Ironwood announced the approval of Linaclotide in Europe, which will be branded under the name Constella®. European Commission approval makes Constella® the first and only EU approved drug for the symptomatic treatment of moderate to severe IBS-C.

Ironwood and partner Forest Laboratories forecasts the commercial launch of Constella® to occur in the first half of 2013.

According to statistics, 10% of the EU suffers from IBS. And approximately one third of those patients suffer from the IBS-C form. This means Constella® could potentially help treat the symptoms of 15 million IBS-C sufferers across the EU.

 

MANAGEMENT TEAM

Bryan E. Roberts Ph.D. – Independent Chairman of the Board

Peter M. Hecht Ph.D. – CEO and Director

Mark G. Currie Ph.D. – Senior Vice President – Research and Development, Chief Scientific Officer

Michael J. Higgins – CFO, COO, Senior Vice President

Thomas A. McCourt – Senior Vice President – Marketing and Sales, Chief Commercial Officer


STOCK ANALYSIS

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

IRWD’s 52-week low was $10.02 and the 52-week high was $15.92.  Right now the stock is trading at $10.80.  The 50-day moving average is near $11.75 a share and the 200-day moving average is at $12.56.  The company has a market cap of $1.2 billion and 107.4 million shares outstanding.