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Ironwood Pharma (IRWD)
NASDAQ:IRWD
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Ironwood Pharma
(NASDAQ:IRWD)
57Neutral
Positive Factors
Financial Health
The 10-K filing confirms no financial restatements, which is a positive sign for the company's financial health.
Product Development
The apraglutide opportunity could help drive growth over the longer term.
Negative Factors
Balance Sheet Concerns
There is uncertainty over the company's balance sheet due to eroding Linzess revenues.
Revenue Decline
Linzess faces price erosion from the Medicare Part D redesign, affecting the 2025 outlook.
Ironwood Pharma (IRWD) vs. S&P 500 (SPY)
Market Cap
$152.99M
Dividend YieldN/A
Average Volume (3M)2.95M
Price to Earnings (P/E)87.5
Beta (1Y)0.35
Revenue Growth-20.63%
EPS GrowthN/A
CountryUS
Employees253
SectorHealthcare
Sector Strength69
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)0.01
Shares Outstanding161,809,430
10 Day Avg. Volume2,994,932
30 Day Avg. Volume2,949,768
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.60
Price to Cash Flow (P/CF)5.70
P/FCF Ratio5.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.00Price Target Upside751.06% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Ironwood Pharma Business Overview & Revenue Model
Company DescriptionIronwood Pharmaceuticals, Inc. (IRWD) is a healthcare company that focuses on the development and commercialization of innovative solutions for gastrointestinal (GI) diseases. Based in the United States, Ironwood's core product, LINZESS (linaclotide), is a prescription medication used to treat irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC). The company operates primarily in the pharmaceuticals sector and is committed to improving the lives of patients with GI disorders through its product offerings.
How the Company Makes MoneyIronwood Pharmaceuticals generates revenue primarily through the sales of its flagship product, LINZESS, which it markets in collaboration with Allergan, now a part of AbbVie. The company earns a significant portion of its income from product sales in the United States, leveraging its co-promotion agreement with Allergan. Additionally, Ironwood receives royalties from out-licensed sales of linaclotide in other territories, contributing to its global revenue streams. The company's earnings are also supported by milestone payments and licensing fees from partnerships and collaborations aimed at expanding the reach and applications of its GI therapies.
Ironwood Pharma Financial Statement Overview
Summary
Ironwood Pharma demonstrates operational recovery with improved profitability and cash flow generation. However, significant financial risks remain due to high leverage and negative equity, which could impact future growth and financial stability. Continued focus on revenue growth and equity improvement is essential to mitigate existing financial risks.Income Statement
The income statement shows a recovery in profitability with a TTM net income of $24.98 million compared to a significant loss in the previous year. Gross profit margin is strong at 99.6%, indicating effective cost management. However, revenue has declined from $442.7 million to $378.4 million, reflecting a negative growth trend. The EBIT margin has improved to 28.7% TTM from a negative margin last year, showing operational improvements but highlighting previous volatility.60
Neutral
Balance Sheet
The balance sheet reveals significant leverage issues with a negative stockholders' equity of $311.3 million TTM, resulting in a concerning debt-to-equity ratio. Total liabilities exceed total assets, indicating financial instability. The equity ratio is negative, and the company is reliant on debt financing, posing risks in the event of interest rate increases or market downturns.35
Negative
Cash Flow
Cash flow analysis shows strong operating cash flow of $124.2 million TTM, which is robust compared to net income, illustrating good cash generation capability. Free cash flow is positive and stable, although lower than previous periods, indicating efficient cash management. The operating cash flow to net income ratio is favorable, suggesting healthy cash conversion from profits.70
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 378.42M | 442.74M | 410.60M | 413.75M | 389.52M | 428.41M | Gross Profit |
| 376.89M | 337.95M | 409.18M | 412.23M | 386.39M | 404.54M | EBIT |
| 108.55M | -945.43M | 250.34M | 232.26M | 142.94M | 120.12M | EBITDA |
| 106.14M | -924.86M | 261.44M | 233.33M | 141.90M | 101.13M | Net Income Common Stockholders |
| 24.98M | -1.00B | 175.06M | 528.45M | 106.18M | -15.31M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 248.33M | 92.15M | 656.20M | 620.13M | 362.56M | 177.02M | Total Assets |
| 333.51M | 471.07M | 1.10B | 1.13B | 559.24M | 402.75M | Total Debt |
| 177.32M | 715.54M | 415.92M | 475.80M | 453.70M | 431.22M | Net Debt |
| 103.02M | 623.38M | -240.29M | -144.33M | 91.14M | 254.20M | Total Liabilities |
| 244.96M | 817.37M | 448.14M | 521.02M | 496.60M | 496.00M | Stockholders Equity |
| 88.55M | -346.30M | 652.38M | 605.91M | 62.64M | -93.25M |
| Cash Flow | Free Cash Flow | ||||
| 123.82M | 183.15M | 273.63M | 261.63M | 166.99M | 3.54M | Operating Cash Flow |
| 124.17M | 183.43M | 273.76M | 261.89M | 168.84M | 10.72M | Investing Cash Flow |
| -4.33M | -1.03B | -136.00K | -265.00K | -1.84M | -11.14M | Financing Cash Flow |
| -142.99M | 277.16M | -237.55M | -4.55M | 18.55M | -1.19M |
Ironwood Pharma Technical Analysis
Negative
0.94
Price Trends
1.60
Negative
2.72
Negative
3.88
Negative
Market Momentum
-0.15
Negative
38.48
Neutral
44.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IRWD, the sentiment is Negative. The current price of 0.94 is below the 20-day moving average (MA) of 1.36, below the 50-day MA of 1.60, and below the 200-day MA of 3.88, indicating a bearish trend. The MACD of -0.15 indicates Negative momentum. The RSI at 38.48 is Neutral, neither overbought nor oversold. The STOCH value of 44.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IRWD.
Ironwood Pharma Risk Analysis
Ironwood Pharma disclosed 45 risk factors in its most recent earnings report. Ironwood Pharma reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ironwood Pharma Peers Comparison
Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
57 Neutral | $152.99M | 87.50 | -8.02% | ― | -20.63% | ― | |
57 Neutral | $139.32M | ― | -72.60% | ― | -29.11% | -219.44% | |
56 Neutral | $56.29M | ― | -24.71% | ― | -4.26% | -3.92% | |
49 Neutral | $57.75M | ― | -16.66% | ― | -17.83% | 94.26% | |
48 Neutral | $6.35B | 1.19 | -46.26% | 2.67% | 19.24% | 1.75% | |
45 Neutral | $239.27M | ― | 77.48% | ― | 13.80% | -389.41% | |
38 Underperform | $189.93M | ― | 23.44% | ― | 185.66% | 89.22% |
* Healthcare Sector Average
Performance Comparison
IRWD
Ironwood Pharma
0.94
-6.85
-87.93%
ASRT
Assertio Therapeutics
0.62
-0.19
-23.46%
ESPR
Esperion
1.02
-0.92
-47.42%
CPIX
Cumberland Pharmaceuticals
4.06
2.51
161.94%
AQST
Aquestive Therapeutics
2.47
-1.47
-37.31%
DERM
Journey Medical Corp
6.03
2.01
50.00%
Ironwood Pharma Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -45.03% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong demand growth for LINZESS and promising data for apraglutide, suggesting potential future growth. However, concerns about pricing headwinds from Medicare Part D redesign and cash liquidity tempered the overall outlook.Highlights
Apraglutide's Potential for Market Expansion
The data from the STARS Extend study showed that 27 patients achieved enteral autonomy, reinforcing apraglutide's potential as a blockbuster therapy for short bowel syndrome. The NDA submission is expected to be completed by the third quarter of 2025.
LINZESS Demand Growth
LINZESS saw a 12% increase in prescription demand growth in Q4 2024 compared to Q4 2023. For the full year 2024, there was an 11% prescription demand growth year-over-year, and new-to-brand volume growth was 14%.
Financial Performance and Guidance
Ironwood achieved its 2024 financial guidance with $916 million in net sales. The company expects continued strong demand growth for LINZESS in 2025, despite anticipated pricing headwinds.
Debt Reduction Efforts
Ironwood reduced its total debt balance by approximately $115 million in 2024, ending the year with $385 million drawn on its credit facility.
Lowlights
Pricing Headwinds Due to Medicare Part D Redesign
The redesign of Medicare Part D, which went into effect earlier this year, poses a pricing headwind for LINZESS, potentially impacting revenue despite strong demand.
Cash and Liquidity Concerns
Ironwood ended 2024 with $88.6 million in cash and cash equivalents, which may be seen as limited given the company's debt obligations and the need to fund apraglutide's launch.
Company Guidance
During the Ironwood Pharmaceuticals Fourth Quarter 2024 Investor Update Conference Call, the company provided guidance for the upcoming year. They expect U.S. LINZESS net sales to range between $800 million and $850 million, forecasting high single-digit prescription demand growth despite potential pricing headwinds due to Medicare Part D redesign. Ironwood anticipates total revenue between $260 million and $290 million and adjusted EBITDA, excluding stock-based compensation, to exceed $85 million. The company aims to complete the NDA submission for apraglutide by the third quarter of 2025, with prelaunch activities underway for its potential commercialization. Ironwood reported $916 million in LINZESS net sales for 2024 and projects its cash flows will support the development and launch of apraglutide, with a focus on delivering sustained profits and reducing debt. The company ended 2024 with $88.6 million in cash and cash equivalents and $385 million in debt, having repaid $115 million over the year.Ironwood Pharma Corporate Events
Delistings and Listing ChangesRegulatory Filings and Compliance
Ironwood Pharma Faces Nasdaq Compliance Deadline
Neutral
Mar 27, 2025
Ironwood Pharmaceuticals announced it received a notification from Nasdaq on March 21, 2025, due to a delay in filing its 2024 Annual Report, which led to non-compliance with Nasdaq’s listing rules. The company has until May 20, 2025, to submit a compliance plan, with a potential extension to September 1, 2025, to file the report. The notice does not immediately affect the company’s Nasdaq listing, and Ironwood plans to file the report promptly to regain compliance.
Executive/Board ChangesBusiness Operations and Strategy
Ironwood Pharma Announces Major Workforce Cuts and CFO Change
Negative
Jan 29, 2025
On January 17, 2025, Ironwood Pharmaceuticals announced a significant workforce reduction of approximately 50% to streamline operations and focus on its strategic pipeline, affecting mainly field-based sales employees. This move is expected to result in charges of $20.0 to $25.0 million, with most costs incurred in the first half of 2025. Additionally, on January 29, 2025, Gregory Martini was promoted to Senior Vice President, Chief Financial Officer, effective January 27, 2025, succeeding Thomas McCourt in this role.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.