Ironwood Pharmaceuticals IRWD reported adjusted earnings of 2 cents per share for the fourth quarter of 2024, missing the Zacks Consensus Estimate of 10 cents. The company had recorded break-even earnings in the year-ago quarter.

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Total revenues in the fourth quarter were $90.5 million, which also missed the Zacks Consensus Estimate of $92 million. The top line decreased almost 23% year over year due to the decrease in collaborative arrangements revenues related to its sole marketed drug, Linzess (linaclotide).

Shares of Ironwood were down 5.3% yesterday, following the weaker-than-expected earnings results.

In the past year, shares of Ironwood have plunged 89.3% compared with the industry’s decline of 15%.

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More on IRWD's Q4 Results

As reported by partner AbbVie ABBV, Ironwood’s marketed product, Linzess, generated net sales of $223 million in the United States, down 19% year over year, due to continued pricing pressure. However, total prescriptions for Linzess increased 12% year over year.

Ironwood and AbbVie equally share Linzess’ brand collaboration profits and losses.

IRWD’s share of net profit from the sales of Linzess in the United States (included in collaborative revenues) totaled $88.4 million, indicating a decrease of 22% year over year.

Ironwood has agreements with two partners, Astellas Pharma and AstraZeneca AZN,  related to the development and commercialization of Linzess in Japan and China, respectively.

Astellas and AstraZeneca have exclusive rights to develop and market the drug in their respective territories. Astellas and AZN are liable to pay royalties to Ironwood on net Linzess revenues earned in their regions.

Ironwood recorded $2.1 million in royalties and other revenues in the fourth quarter, down 41.7% from the prior-year quarter’s figure.

Total cost and expenses (including research and development expenses, selling, general and administrative expenses and restructuring expenses) in the fourth quarter were $57.3 million, down 28.4% from the year-ago quarter.

Adjusted EBITDA in the fourth quarter was $33.8 million, down 15.3% from the year-ago quarter.

As of Dec. 31, 2024, Ironwood had cash and cash equivalents worth $88.6 million compared with $88.2 million as of Sept. 30, 2024.

IRWD's Full-Year Results

For 2024, Ironwood generated revenues of $351.4 million, decreasing almost 20.6% on a year-over-year basis.

For the same period, the company reported adjusted earnings of 4 cents per share against an adjusted loss of $6.27 reported in the year-ago period.

2025 Guidance of IRWD

Ironwood reiterated the total revenue guidance that it provided in January 2025.

The company continues to expect total revenues in the range of $260-$290 million for 2025.

U.S. sales of Linzess (to be recorded by AbbVie) are expected to be in the range of $800-$850 million.

The company expects to deliver an adjusted EBITDA of more than $85 million in 2025.

IRWD's Recent Pipeline Updates

Ironwood initiated the rolling new drug application (“NDA”) submission to the FDA for the next-generation GLP-2 analog, apraglutide, for treating short bowel syndrome (“SBS”) patients who are dependent on parenteral support in January 2025.

The NDA filing is expected to be completed in the third quarter of 2025.

IRWD acquired the rights to develop and commercialize apraglutide following the acquisition of VectivBio in June 2023.

The phase III STARS study evaluated apraglutide for reducing parenteral support dependency in adult patients with short bowel syndrome with intestinal failure (SBS-IF). The open-label extension study, STARS Extend, also evaluated apraglutide for the given indication.

Also, in January 2025, the company announced a restructuring wherein it decided to reduce existing workforce by almost 50%, primarily the field force.

The company also decided to close the phase II exploratory study, STARGAZE, which evaluated apraglutide for treating Graft-versus-Host Disease.

Ironwood expects restructuring charges of around $20-$25 million to be incurred primarily in the first half of 2025.

IRWD's Zacks Rank & Stock to Consider

Ironwood currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the same sector is Rigel Pharmaceuticals, Inc. RIGL, sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for Rigel Pharmaceuticals’ earnings per share have increased from 92 cents to $1.28 for 2025. In the past year, shares of RIGL have risen 40.5%.

RIGL earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, the average surprise being 1,754.28%.

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This article originally published on Zacks Investment Research (zacks.com).

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