BOSTON--(BUSINESS WIRE)--Feb 16, 2023--
Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD), a GI-focused healthcare company, today reported its fourth quarter and full year 2022 results and recent business performance.
“We performed well and made important progress across our strategic priorities in 2022,” said Tom McCourt, chief executive officer of Ironwood. “While full year LINZESS U.S. net sales growth came in lower than our expectations for 2022 primarily due to inventory fluctuations in the retail channel, we are encouraged by continued robust prescription demand and focused expense management, which helped us deliver our adjusted EBITDA guidance of over $250 million. We ended the year with a strong balance sheet, positioning us well to continue to invest in LINZESS as a growth brand and actively pursue highly differentiated GI assets to add to our portfolio. Looking ahead in 2023, we remain committed to further advancing our strategic priorities, unlocking new opportunities for LINZESS, and strengthening and progressing our innovative GI portfolio. We anticipate a number of exciting milestones this year, and believe Ironwood is well positioned to deliver long term growth and value to patients and shareholders.”
Fourth Quarter and Full Year 2022 Financial Highlights 1 (in thousands, except for per share amounts) | ||||||||
|
| 4Q 2022 | 4Q 2021 | FY 2022 | FY 2021 | |||
Total revenues | $107,199 | $117,130 | $410,596 | $413,753 | ||||
Total operating expenses | 38,836 | 60,538 | 160,259 | 181,494 | ||||
GAAP net income | 48,867 | 41,374 | 175,065 | 528,448 | ||||
GAAP net income per share – basic | 0.32 | 0.25 | 1.13 | 3.26 | ||||
GAAP net income per share –diluted | 0.27 | 0.25 | 0.96 | 3.21 | ||||
Adjusted EBITDA | 68,703 | 56,950 | 251,755 | 233,738 | ||||
Non-GAAP net income | 48,885 | 43,940 | 174,883 | 191,782 | ||||
Non-GAAP net income per share – basic | 0.32 | 0.27 | 1.13 | 1.18 | ||||
Non-GAAP net income per share – diluted | 0.27 | 0.27 | 0.96 | 1.16 |
| 1. | Refer to the Reconciliation of GAAP Results to Non-GAAP Financial Measures table and to the Reconciliation of GAAP Net Income to Adjusted EBITDA table at the end of this press release. Refer to Non-GAAP Financial Measures for additional information. |
Fourth Quarter and Full Year 2022 Corporate Highlights
U.S. LINZESS
– LINZESS commercial margin was 74% in the fourth quarter of 2022, compared to 76% in the fourth quarter of 2021. LINZESS commercial margin was 73% for the full year 2022 compared to 74% for the full year 2021. See the U.S. LINZESS Full Brand Collaboration table below and at the end of this press release.
– Net profit for the LINZESS U.S. brand collaboration, net of commercial and research and development (“R&D”) expenses, was $183.8 million in the fourth quarter of 2022, compared to $200.0 million in the fourth quarter of 2021. Net profit for the LINZESS U.S. brand collaboration, net of commercial and R&D expenses, was $695.7 million for the full year 2022, compared to $701.3 million for the full year 2021. See U.S. LINZESS Full Brand Collaboration table below and at the end of this press release.
U.S. LINZESS Full Brand Collaboration | Three Months Ended | Twelve Months Ended | ||
| 2022 | 2021 | 2022 | 2021 |
LINZESS U.S. net sales as reported by AbbVie | $260,327 | $278,555 | $1,002,143 | $1,005,856 |
AbbVie & Ironwood commercial costs, expenses and other discounts | 66,879 | 67,510 | 272,757 | 265,118 |
Commercial margin | 74% | 76% | 73% | 74% |
AbbVie & Ironwood R&D Expenses | 9,684 | 11,017 | 33,684 | 39,417 |
Total net profit on sales of LINZESS | 183,764 | 200,028 | 695,702 | 701,321 |
Full brand margin | 71% | 72% | 69% | 70% |
Pipeline Updates
Pediatric Program
– In September 2022, Ironwood reported positive topline data from the Phase III trial of LINZESS (linaclotide) 72 mcg in pediatric patients aged 6-17 with functional constipation. Ironwood, and its partner AbbVie, submitted a supplemental New Drug Application (sNDA) to the FDA in December 2022, which was granted priority review with a Prescription Drug User Fee Act (PDUFA) date of June 14, 2023. There are currently no FDA approved prescription therapies for the treatment of functional constipation in pediatric patients.
IW-3300
– Ironwood is continuing the Phase II proof of concept study in IC/BPS, with patient dosing expected to begin in early 2023.
CNP-104
– COUR is currently conducting a clinical study for CNP-104 evaluating the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients, with early data assessing T-cell response from patients enrolled in the clinical study expected in the second half of 2023, which Ironwood believes will inform timing of topline data.
Fourth Quarter and Full Year 2022 Financial Results
– Total revenues in the fourth quarter of 2022 consisted of $104.8 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S. and $2.4 million in royalties and other revenue. Total revenues in the fourth quarter of 2021 consisted of $113.7 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S. and $3.4 million in royalties and other revenue.
– Total revenues for the full year 2022 consisted of $398.8 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S., and $11.8 million in royalties and other revenue. Total revenues for the full year 2021 consisted of $400.4 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S., and $13.4 million in royalties and other revenue.
– Operating expenses in the fourth quarter of 2022 consisted of $28.4 million in selling, general and administrative (“SG&A”) expenses, and $10.4 million in research and development (“R&D”) expenses. Operating expenses in the fourth quarter of 2021 consisted of $28.6 million in SG&A expenses and $31.9 million in R&D expenses.
– Operating expenses for the full year 2022 consisted primarily of $116.0 million in SG&A expenses, and $44.3 million in R&D expenses. Operating expenses for the full year 2021 consisted primarily of $111.1 million in SG&A expenses, and $70.4 million in R&D expenses.
– Interest expense was $7.9 million in the fourth quarter of 2021 and $31.1 million for the full year 2021, in connection with Ironwood’s convertible senior notes. Interest expense recorded in the fourth quarter of 2021 included $1.8 million in cash expense and $6.2 million in non-cash expense. Interest expense recorded for the full year 2021 included $7.2 million in cash expense and $23.9 million in non-cash expense. The reduction in non-cash interest expense in the fourth quarter of 2022 and for the full year 2022 primarily relates to the adoption of ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) on January 1, 2022, which impacts the accounting for Ironwood’s convertible senior notes.
– Interest and investment income was $0.2 million in the fourth quarter of 2021 and $0.7 million for the full year of 2021.
– Ironwood recorded a loss on derivatives of $2.6 million in the fourth quarter of 2021 as a result of the change in fair value of its convertible note hedges and note hedge warrants. For the full year 2021, Ironwood recorded a loss on derivatives of $1.2 million.
– Non-GAAP net income excludes the impact of mark-to-market adjustments on the derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, and the income tax benefit related to the release of the company’s valuation allowance against the majority of deferred tax assets in the second quarter of 2021. See Non-GAAP Financial Measures below.
– Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization from GAAP net income. See Non-GAAP Financial Measures below.
– Ironwood generated $79.2 million in cash from operations in the fourth quarter of 2022, compared to $64.6 million in cash from operations in the fourth quarter of 2021. Ironwood generated $273.8 million in cash from operations for the full year 2022, compared to $261.9 million for the full year 2021.
– In 2022, Ironwood used $126.4 million of cash to complete the board authorized share repurchase program and $120.7 million of cash for the repayment of the remaining aggregate principal on the 2022 Convertible Notes upon maturity in June 2022.
| 2023 Guidance |
U.S. LINZESS Net Sales Growth | 3% to 5% |
Total Revenue | $420 to $435 million |
Adjusted EBITDA 1 | >$250 million |
1 Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization from GAAP net income. For purposes of this guidance, Ironwood has assumed that it will not incur material expenses related to business development activities in 2023. |
Non-GAAP Financial Measures
Ironwood 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 Ironwood’s 2022 Convertible Notes that are required to be marked-to-market, restructuring expenses, and the release of the company’s valuation allowance against the majority of deferred tax assets in the second quarter of 2021. Non-GAAP adjustments are further detailed below:
Ironwood also presents adjusted EBITDA, a non-GAAP measure, as well as guidance on adjusted EBITDA. Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization from GAAP net income. The adjustments are made on a similar basis as described above related to non-GAAP net income, as applicable.
Management 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 GAAP net income, please refer to the tables at the end of this press release.
Ironwood does not provide guidance on GAAP net income or a reconciliation of expected adjusted EBITDA to expected GAAP net income 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 net income for the guidance period.
Conference Call Information
Ironwood will host a conference call and webcast at 8:30 a.m. Eastern Time on Thursday, February 16, 2023 to discuss its fourth quarter and full year 2022 results and recent business activities. Individuals interested in participating in the call should dial (888) 330-2384 (U.S. and Canada) or (240) 789-2701 (international) using conference ID number and event passcode 4671230. 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 16, 2023, running through 11:59 p.m. Eastern Time on March 2, 2023. To listen to the replay, dial (800) 770-2030 (U.S. and Canada) or (647) 362-9199 (international) using conference ID number 4671230. The archived webcast will be available on Ironwood’s website for 14 days beginning approximately one hour after the call has completed.
About Ironwood Pharmaceuticals
Ironwood Pharmaceuticals (Nasdaq: IRWD), an S&P SmallCap 600® company, is a leading gastrointestinal (GI) healthcare company on a mission to advance the treatment of GI diseases and redefine the standard of care for GI patients. We are pioneers in the development of LINZESS® (linaclotide), the U.S. branded prescription market leader for adults with irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC). Under the guidance of our seasoned industry leaders, we continue to build upon our history of GI innovation and challenge what has been done before to shape what the future holds. We keep patients at the heart of our R&D and commercialization efforts to reduce the burden of GI diseases and address significant unmet needs.
Founded in 1998, Ironwood Pharmaceuticals is headquartered in Boston, Massachusetts.
We routinely post information that may be important to investors on our website at www.ironwoodpharma.com. In addition, follow us on Twitter and on LinkedIn.
About LINZESS (linaclotide)
LINZESS® is the #1 prescribed brand in the U.S. for the treatment of adult patients with irritable bowel syndrome with constipation (“IBS-C”) or chronic idiopathic constipation (“CIC”), based on IQVIA data.
LINZESS 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.
LINZESS is contraindicated in pediatric patients less than 2 years of age. In neonatal mice, linaclotide increased fluid secretion as a consequence of age-dependent elevated GC-C agonism resulting in mortality within the first 24 hours due to dehydration. There was no age-dependent trend in GC-C intestinal expression in a clinical study of children 2 to less than 18 years of age; however, there are insufficient data available on GC-C intestinal expression in children less than 2 years of age to assess the risk of developing diarrhea and its potentially serious consequences in these patients. The safety and effectiveness of LINZESS in patients less than 18 years of age have not been established.
LINZESS 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.
In 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 AbbVie for development and commercialization of linaclotide in all other territories worldwide.
LINZESS Important Safety Information
INDICATIONS AND USAGE
LINZESS (linaclotide) is indicated in adults for the treatment of both irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC).
IMPORTANT SAFETY INFORMATION
WARNING: RISK OF SERIOUS DEHYDRATION IN PEDIATRIC PATIENTS LESS THAN 2 YEARS OF AGE
LINZESS is contraindicated in patients less than 2 years of age. In nonclinical studies in neonatal mice, administration of a single, clinically relevant adult oral dose of linaclotide caused deaths due to dehydration. |
Contraindications
Warnings and Precautions
Pediatric Risk
Diarrhea
Common Adverse Reactions (incidence ≥2% and greater than placebo)
Please see full Prescribing Information including Boxed Warning: http://www.allergan.com/assets/pdf/linzess_pi
LINZESS® and CONSTELLA® are registered trademarks of Ironwood Pharmaceuticals, Inc. Any other trademarks referred to in this press release are the property of their respective owners. All rights reserved.
Forward-Looking Statements
This press release contains forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about Ironwood’s ability to execute on its mission; Ironwood’s strategy, business, financial position and operations; the Ironwood’s ability to drive growth and profitability; the demand, development, commercial availability and commercial potential of linaclotide, including pursuing highly differentiated GI assets to add to our portfolio, and the drivers, timing, impact and results thereof; the potential indications for, and benefits of, linaclotide; our financial performance and results, and guidance and expectations related thereto; LINZESS prescription demand growth, LINZESS U.S. net sales growth, total revenue and adjusted EBITDA in 2023; the potential to expand the clinical utility of LINZESS based on the recent sNDA submission in functional constipation for pediatric patients aged 6 to 17 years old; the potential of CNP-104 to be the first PBC disease modifying therapy and the expected timing of receiving data from the clinical study for CNP-104 in PBC patients and the results thereof, and the belief that this will inform timing of topline data; our plan to advance IW-3300 including the timing and results thereof; our anticipation on reaching new clinical milestones in 2023 and the belief that Ironwood is positioned well for long term growth. These forward-looking statements speak only as of the date of this press release, and Ironwood undertakes no obligation to update these forward-looking statements. 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 those related to the effectiveness of development and commercialization efforts by us and our partners; preclinical and clinical development, manufacturing and formulation development of linaclotide, CNP-104, IW-3300, and our product candidates; the risk that clinical programs and studies, including for the linaclotide pediatric program, IW-3300 and CNP-104, may not progress or develop as anticipated, including that studies are delayed or discontinued for any reason, such as safety, tolerability, enrollment, manufacturing, economic or other reasons; the risk that findings from our completed nonclinical and clinical studies may not be replicated in later studies; the risk that we or our partners are unable to obtain, maintain or manufacture sufficient LINZESS or our product candidates, or otherwise experience difficulties with respect to supply or manufacturing; the efficacy, safety and tolerability of linaclotide and our product candidates; the risk that the therapeutic opportunities for LINZESS or our product candidates are not as we expect; decisions by regulatory and judicial authorities; the risk we may never get additional patent protection for linaclotide and other product candidates, that patents for linaclotide or other products may not provide adequate protection from competition, or that we are not able to successfully protect such patents; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the risk that the development of any of our clinical pediatric programs in IBS-C and functional constipation in 6 to 17 year-olds, CNP-104 and/or IW-3300 are not successful or that any of our product candidates is not successfully commercialized; the risk that the FDA will not approve our sNDA submission for the potential indication in functional constipation in pediatric patients aged 6-17; outcomes in legal proceedings to protect or enforce the patents relating to our products and product candidates, including abbreviated new drug application litigation; the risk that financial and operating results may differ from our projections; developments in the intellectual property landscape; challenges from and rights of competitors or potential competitors; the risk that our planned investments do not have the anticipated effect on our company revenues; developments in accounting guidance or practice; Ironwood’s or AbbVie’s accounting practices, including reporting and settlement practices as between Ironwood and AbbVie; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the impact of the COVID-19 pandemic; and the risks listed under the heading “Risk Factors” and elsewhere in Ironwood's Annual Report on Form 10-K for the year ended December 31, 2021, and in our subsequent Securities and Exchange Commission (the “SEC”) filings.
Condensed Consolidated Balance Sheets (In thousands) (unaudited) | ||||||||
|
| December 31, | December 31, |
|
| |||
Assets |
|
|
|
|
| |||
Cash and cash equivalents |
| $ | 656,203 | $ | 620,129 |
| ||
Accounts receivable, net |
|
| 115,458 |
| 114,042 |
|
| |
Prepaid expenses and other current assets |
|
| 7,715 |
| 8,689 |
|
| |
Restricted cash, short-term |
|
| 1,250 |
| 1,250 |
|
| |
Convertible note hedges |
|
| - |
| 1,115 |
|
| |
Total current assets |
|
| 780,626 |
| 745,225 |
|
| |
Restricted cash, net of current portion |
|
| 485 |
| 485 |
|
| |
Accounts receivable, net of current portion |
|
| 14,589 |
| 23,998 |
|
| |
Property and equipment, net |
|
| 6,288 |
| 7,575 |
|
| |
Operating lease right-of-use assets |
|
| 14,023 |
| 15,350 |
|
| |
Deferred tax assets |
|
| 283,661 |
| 333,294 |
|
| |
Other assets |
|
| 847 |
| 1,000 |
|
| |
Total assets |
| $ | 1,100,519 | $ | 1,126,927 |
|
| |
Liabilities and Stockholders’ Equity |
|
|
|
|
| |||
Accounts payable |
| $ | 483 | $ | 935 |
| ||
Accrued research and development costs |
|
| 5,258 |
| 15,896 |
|
| |
Accrued expenses and other current liabilities |
|
| 16,700 |
| 23,566 |
|
| |
Current portion of operating lease liabilities |
|
| 3,065 |
| 3,127 |
|
| |
Current portion of convertible senior notes |
|
| - |
| 116,858 |
|
| |
Note hedge warrants |
|
| 19 |
| 1,316 |
|
| |
Total current liabilities |
|
| 25,525 |
| 161,698 |
|
| |
Convertible senior notes, net of current portion |
|
| 396,251 |
| 337,333 |
|
| |
Operating lease liabilities, net of current portion |
|
| 16,599 |
| 18,484 |
|
| |
Other liabilities |
|
| 9,766 |
| 3,501 |
|
| |
Total stockholders’ equity |
|
| 652,378 |
| 605,911 |
|
| |
Total liabilities and stockholders’ equity |
| $ | 1,100,519 | $ | 1,126,927 |
|
|
Condensed Consolidated Statements of Income (In thousands, except per share amounts) (unaudited) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
Revenues |
|
|
|
| |||||||||||
Collaborative arrangements revenue | $ | 107,199 |
| $ | 116,986 |
| $ | 410,596 |
| $ | 412,784 |
| |||
Sale of active pharmaceutical ingredient |
| - |
|
| 144 |
|
| - |
|
| 969 |
| |||
Total revenues |
| 107,199 |
|
| 117,130 |
|
| 410,596 |
|
| 413,753 |
| |||
Operating expenses: |
|
|
|
| |||||||||||
Research and development |
| 10,446 |
|
| 31,851 |
|
| 44,265 |
|
| 70,405 |
| |||
Selling, general and administrative |
| 28,390 |
|
| 28,687 |
|
| 115,994 |
|
| 111,133 |
| |||
Restructuring expenses |
| - |
|
| - |
|
| - |
|
| (44 | ) | |||
Total operating expenses |
| 38,836 |
|
| 60,538 |
|
| 160,259 |
|
| 181,494 |
| |||
Income from operations |
| 68,363 |
|
| 56,592 |
|
| 250,337 |
|
| 232,259 |
| |||
Other (expense) income: |
|
|
|
| |||||||||||
Interest expense |
| (1,526 | ) |
| (7,951 | ) |
| (7,598 | ) |
| (31,150 | ) | |||
Interest and investment income |
| 5,446 |
|
| 180 |
|
| 9,501 |
|
| 726 |
| |||
Gain (loss) on derivatives |
| (18 | ) |
| (2,566 | ) |
| 182 |
|
| (1,178 | ) | |||
Other (expense) income, net |
| 3,902 |
|
| (10,337 | ) |
| 2,085 |
|
| (31,602 | ) | |||
Income before income taxes |
| 72,265 |
|
| 46,255 |
|
| 252,422 |
|
| 200,657 |
| |||
Income tax (expense) benefit |
| (23,398 | ) |
| (4,881 | ) |
| (77,357 | ) |
| 327,791 |
| |||
GAAP net income | $ | 48,867 |
| $ | 41,374 |
| $ | 175,065 |
| $ | 528,448 |
| |||
|
|
|
|
| |||||||||||
GAAP net income per share—basic | $ | 0.32 |
| $ | 0.25 |
| $ | 1.13 |
| $ | 3.26 |
| |||
|
|
|
|
| |||||||||||
GAAP net income per share—diluted | $ | 0.27 |
| $ | 0.25 |
| $ | 0.96 |
| $ | 3.21 |
|
Reconciliation of GAAP Results to Non-GAAP Financial Measures (In thousands, except per share amounts) (unaudited) | |||||||||||||
A reconciliation between net income on a GAAP basis and on a non-GAAP basis is as follows: | |||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||
| GAAP net income | $ | 48,867 |
| $ | 41,374 |
| $ | 175,065 |
| $ | 528,448 |
| |
| Adjustments: | |||||||||||||
| Mark-to-market adjustments on the derivatives related to convertible notes, net |
| 18 |
|
| 2,566 |
|
| (182 | ) |
| 1,178 |
| |
| Restructuring expenses |
| - |
|
| - |
|
| - |
|
| (44 | ) | |
| Valuation allowance release |
| - |
|
| - |
|
| - |
|
| (337,800 | ) | |
| Non-GAAP net income | $ | 48,885 |
| $ | 43,940 |
| $ | 174,883 |
| $ | 191,782 |
| |
A reconciliation between basic net income per share on a GAAP basis and on a non-GAAP basis is as follows: | |||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||
| GAAP net income per share –basic | $ | 0.32 |
| $ | 0.25 |
| $ | 1.13 |
| $ | 3.26 |
| |
| Adjustments to GAAP net income per share |
| - |
|
| 0.02 |
|
| - |
|
| (2.08 | ) | |
| (as detailed above) | |||||||||||||
| Non-GAAP net income per share –basic | $ | 0.32 | $ | 0.27 | $ | 1.13 |
| $ | 1.18 |
| |||
| Weighted average number of common shares used to calculate net income per share — basic |
| 153,337 |
|
| 163,294 |
|
| 154,366 |
|
| 162,245 |
| |
A reconciliation between diluted net income per share on a GAAP basis and on a non-GAAP basis is as follows: | |||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||
| GAAP net income per share –diluted | $ | 0.27 |
| $ | 0.25 |
| $ | 0.96 |
| $ | 3.21 |
| |
| Adjustments to GAAP net income per share | |||||||||||||
| (as detailed above) |
| - |
|
| 0.02 |
|
| - |
|
| (2.05 | ) | |
| Non-GAAP net income per share –diluted | $ | 0.27 |
| $ | 0.27 |
| $ | 0.96 |
| $ | 1.16 |
| |
Weighted average number of common shares used to calculate net income per share — diluted 1 |
| 185,188 |
|
| 165,631 |
|
| 186,312 |
|
| 164,418 |
|
__________________________________
| 1 Following the adoption of ASU 2020-06 on January 1, 2022, the dilutive impact of Ironwood’s convertible senior notes is determined using the if-converted method. As a result of this change, the weighted average number of common shares used to calculate diluted net income per share includes approximately 29.9 million shares related to the assumed conversion of the 2024 and 2026 convertible senior notes. Under the modified retrospective transition method elected by the Company in connection with the adoption of ASU 2020-06, diluted earnings per share for prior fiscal periods is not required to be, and has not been, restated. |
Reconciliation of GAAP Net Income to Adjusted EBITDA (In thousands) (unaudited) | |||||||||||||||
A reconciliation of GAAP net income to adjusted EBITDA: | |||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
GAAP net income | $ | 48,867 |
| $ | 41,374 |
| $ | 175,065 |
| $ | 528,448 |
| |||
Adjustments: |
|
|
| ||||||||||||
Mark-to-market adjustments on the derivatives related to convertible notes, net |
| 18 |
|
| 2,566 |
|
| (182 | ) |
| 1,178 |
| |||
Restructuring expenses |
| - |
|
| - |
|
| - |
|
| (44 | ) | |||
Interest expense |
| 1,526 |
|
| 7,951 |
|
| 7,598 |
|
| 31,150 |
| |||
Interest and investment income |
| (5,446 | ) |
| (180 | ) |
| (9,501 | ) |
| (726 | ) | |||
Income tax expense (benefit) |
| 23,398 |
|
| 4,881 |
|
| 77,357 |
|
| (327,791 | ) | |||
Depreciation and amortization |
| 340 |
|
| 358 |
|
| 1,418 |
|
| 1,523 |
| |||
Adjusted EBITDA | $ | 68,703 |
| $ | 56,950 |
| $ | 251,755 |
| $ | 233,738 |
|
U.S. LINZESS Commercial Collaboration 1 Revenue/Expense Calculation (In thousands) (unaudited) | ||||||||||||||||
|
|
|
|
|
| |||||||||||
| Three Months Ended | Twelve Months Ended |
| |||||||||||||
| 2022 | 2021 | 2022 | 2021 |
| |||||||||||
LINZESS U.S. net sales as reported by AbbVie 2 | $ | 260,327 |
| $ | 278,555 |
| $ | 1,002,143 |
| $ | 1,005,856 |
|
| |||
AbbVie & Ironwood commercial costs, expenses and other discounts 3 |
| 66,879 |
|
| 67,510 |
|
| 272,757 |
|
| 265,118 |
|
| |||
Commercial profit on sales of LINZESS | $ | 193,448 |
| $ | 211,045 |
| $ | 729,386 |
| $ | 740,738 |
|
| |||
Commercial Margin4 |
| 74 | % |
| 76 | % |
| 73 | % |
| 74 | % |
| |||
|
|
|
|
| ||||||||||||
|
|
|
|
| ||||||||||||
Ironwood’s share of net profit |
| 96,724 |
|
| 105,523 |
|
| 364,693 |
|
| 370,369 |
|
| |||
Reimbursement for Ironwood’s commercial expenses |
| 8,048 |
|
| 8,199 |
|
| 34,074 |
|
| 30,002 |
|
| |||
Ironwood’s collaborative arrangement revenue 2 | $ | 104,772 |
| $ | 113,722 |
| $ | 398,767 |
| $ | 400,371 |
|
|
__________________________________
| 1 Ironwood collaborates with AbbVie 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. Please refer to the table at the end of this press release for net profit for the U.S. LINZESS brand collaboration with AbbVie. |
2 LINZESS net sales are recognized using AbbVie’s revenue recognition accounting policies and reporting conventions. As a result, certain rebates and discounts are classified as LINZESS U.S. commercial costs, expenses and other discounts within Ironwood’s calculation of collaborative arrangements revenue. |
3 Includes certain discounts recognized and cost of goods sold incurred by AbbVie; also includes commercial costs incurred by AbbVie and Ironwood that are attributable to the cost-sharing arrangement between the parties. |
4 Commercial margin is defined as commercial profit on sales of LINZESS as a percent of total LINZESS U.S. net sales. |
US LINZESS Full Brand Collaboration 1 Revenue/Expense Calculation (In thousands) (unaudited) | |||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||
LINZESS U.S. net sales as reported by AbbVie 2 | $ | 260,327 | $ | 278,555 | $ | 1,002,143 | $ | 1,005,856 | |||
AbbVie & Ironwood commercial costs, expenses and other discounts 3 |
| 66,879 |
| 67,510 |
| 272,757 |
| 265,118 | |||
AbbVie & Ironwood R&D Expenses 4 |
| 9,684 |
| 11,017 |
| 33,684 |
| 39,417 | |||
Total net profit on sales of LINZESS | $ | 183,764 | $ | 200,028 | $ | 695,702 | $ | 701,321 |
__________________________________
1 Ironwood collaborates with AbbVie 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 the total net profit (loss) generated from the sales of LINZESS in the U.S., including the commercial costs and expenses and the research and development expenses related to LINZESS in the U.S. that are shared equally between the parties under the collaboration agreement. |
2 LINZESS net sales are recognized using AbbVie’s revenue recognition accounting policies and reporting conventions. As a result, certain rebates and discounts are classified as LINZESS U.S. commercial costs, expenses and other discounts within Ironwood’s calculation of collaborative arrangements revenue. |
3 Includes certain discounts recognized and cost of goods sold incurred by AbbVie; also includes commercial costs incurred by AbbVie and Ironwood that are attributable to the cost-sharing arrangement between the parties. |
4 R&D expenses related to LINZESS in the U.S. are shared equally between Ironwood and AbbVie under the collaboration agreement. |
View source version on businesswire.com:https://www.businesswire.com/news/home/20230216005056/en/
CONTACT: Investors:
Greg Martini, 617-374-5230
gmartini@ironwoodpharma.comMatt Roache, 617-621-8395
mroache@ironwoodpharma.comMedia:
Beth Calitri, 978-417-2031
bcalitri@ironwoodpharma.com
KEYWORD: MASSACHUSETTS UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: RESEARCH FDA CLINICAL TRIALS OTHER HEALTH BIOTECHNOLOGY GENERAL HEALTH PHARMACEUTICAL HEALTH SCIENCE OTHER SCIENCE
SOURCE: Ironwood Pharmaceuticals, Inc.
Copyright Business Wire 2023.
PUB: 02/16/2023 07:00 AM/DISC: 02/16/2023 07:04 AM
http://www.businesswire.com/news/home/20230216005056/en