Ironwood Pharmaceuticals Q4 2023 Earnings Call Transcript

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Provided by Quartr
February 15, 2024

Key Takeaways

  • Positive Sentiment: In 2023, LINZESS prescription demand grew 10% year over year with new-to-brand scripts up 15%, reaching a record 46% TRx share and securing FDA approval for pediatric functional constipation ages 6–17.
  • Positive Sentiment: Key pipeline programs are advancing: apraglutide Phase 3 STARS data readout in March targets best-in-class potential, CMP-104 Phase 2 PBC topline results are due in Q3, and IW3300 for visceral pain remains on track.
  • Positive Sentiment: Ironwood’s 2024 guidance calls for more than $150 million in adjusted EBITDA, over $175 million in operating cash flow, and $435–$455 million in total revenues, underscoring financial stability and growth.
  • Negative Sentiment: LINZESS US net sales growth guidance of low single digits reflects a headwind from mid-to-high single-digit price erosion, largely driven by the Medicaid AMP cap removal effective January 2024.
AI Generated. May Contain Errors.
Earnings Conference Call
Ironwood Pharmaceuticals Q4 2023
00:00 / 00:00

There are 10 speakers on the call.

Operator

Good day, and welcome to the Ironwood Pharmaceuticals 4th Quarter and Full Year 2023 Investor Update Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. And finally, I would like to advise all participants that this call is being recorded. Thank you.

Operator

I'd now like to welcome Matt Roche, Director of Investor Relations to begin the conference. Matt, over to you.

Speaker 1

Thank you, Gavin. Good morning, and thanks for joining us for our Q4 and full year 2023 investor update. Our press release issued this morning can be found on our website. Today's call and accompanying slides include forward looking statements. Such statements involve risks and uncertainties and may cause actual results to differ materially.

Speaker 1

A discussion of these statements and risk factors is available on the current Safe Harbor statement slide, as well as under the heading Risk Factors Our annual report on Form 10 ks for the year ended December 31, 2022 and our quarterly report on Form 10 Q for the quarters ended June 30, 2023, and September 30, 2023, and in our subsequent SEC filings. All forward looking statements speak as of the date of this presentation, and we undertake no obligation to update such statements. Also included are non GAAP financial measures, which should be considered only as a supplement to and not a substitute for or superior to GAAP measures. To the extent applicable, please refer to the tables at the end of our press release Reconciliations of these measures to the most directly comparable GAAP measures. During today's call, Tom McCourt, our Chief Executive Officer, will begin with a brief overview.

Speaker 1

Mike Schutzlein, our Chief Medical Officer, will discuss our pipeline and Shravan Hemani, our Chief Financial Officer, will provide a commercial update and review our financial results and guidance. Today's webcast includes slides. So for those of you dialing in, please go to the Events section of our website to access the With that, I'll turn the call over to Tom. Thanks, Matt.

Speaker 2

Good morning, everyone, and thanks for joining us today. I'm absolutely delighted to share with you the progress we made in 2023 and why we believe our future is bright. We made important progress in 2023 toward realizing our vision of becoming the leading GI Healthcare company in the industry. I am very proud of the Ironwood team and the significant headway we made in 2023 across our 3 strategic priorities, which are maximize LINZESS, advance our GI pipeline and deliver sustained profits and cash flows. As we turn our attention to 2024, I'm confident in our strategy and look forward to what we expect to be an exciting and transformational year for our company.

Speaker 2

Let's begin on Slide 6 with a brief overview of some of our key achievements against our strategic priorities in 2023. 1st, maximizing LINZESS. In its 11th year on the market, LINZESS had another terrific year as the leading prescription treatment for adults with IBS C and chronic idiopathic conservation. In 2023, prescription demand increased a robust 10% year over year. New to brand prescriptions ramped up significantly, increasing 15% compared to 2022, which we believe is a key indicator for future growth potential.

Speaker 2

In addition, LINZESS reached an all time high of 46% in TRx share in the combined branded and generic iPSC and chronic idiopathic constipation market, strengthening its market leadership. And in June of 2023, LINZESS received FDA approval for functional constipation in pediatric patients ages 6 to 17, becoming the 1st and only approved prescription therapy for this patient population, an achievement we're incredibly proud of. Moving forward, our focus remains on continuing to grow LINZESS prescription demand and delivering strong brand profits and cash flow. Next, advance our GI pipeline in areas of high unmet need. Last year, we strengthened our GI pipeline with the acquisition of ActiveBio, including its lead asset, apraglutide.

Speaker 2

As the next generation, long acting GLP-two analog, We believe opraglutide, if successful, has the potential to become the standard of care in treating patients with short bowel syndrome dependent on parenteral support based on its clinical profile and the potential convenient once weekly dosing. If approved, we believe apraglutide can achieve $1,000,000,000 in peak neck sales. Apraglutide's unique pharmacologic properties and strong clinical data to date, including the positive data from the STARS Nutrition Study gives us confidence in the STARS Phase 3 study, which will let us on track to read out in March. In addition to opraglutide, We're also excited about the progress of CMP-one hundred and four, a potential disease modifying therapy for the treatment of primary biliary cholangitis or PBC. Late last year, we completed an early analysis that showed Evidence of favorable T cell responses in patients treated with CMP-one hundred and four supporting the mechanistic rationale for the asset, which we believe could positively impact disease progression in PBC.

Speaker 2

We're looking forward to the top line Phase 2 data in the 3rd quarter. We believe both opraglatide and CMP-one hundred and four have the potential to improve standard of care and the quality of life for patients suffering from these serious GI diseases with key data expected this year. Our 3rd priority is to deliver sustained profits and cash flow. We're committed to being thoughtful and disciplined in our capital allocation as we strive to grow the business, achieve our vision and deliver value to patients and shareholders. Looking ahead to 2024, we expect to deliver greater than $150,000,000 in adjusted EBITDA, while continuing to progress multiple clinical programs with the potential to deliver long term growth.

Speaker 2

We believe the positive momentum across the pipeline programs combined with the continued strong performance of LINZESS, uniquely positions us for success in our mission to be the leader in GI. We're excited about the key near term data catalysts, which we believe will present the opportunity to propel Ironwood's growth and create value for patients and shareholders for years to come. At the end of this month, we will be celebrating Rare Disease Day. I'd like to take this opportunity to say a special thank you to all the employees, patients, caregivers and advocates in the rare disease community for their shared dedication to advancing and supporting new therapies for diseases with significant unmet medical need. I would now like to turn that call over to Mike to review our pipeline.

Speaker 2

Mike?

Speaker 3

Thanks, Tom, and good morning, everyone. Over the past few years, we've made significant strides to expand our footprint in GI. Today, we have a portfolio of innovative GI development programs with upcoming data that could be transformational for our company as shown on Slide 8. In March, we expect top line data from the STARS Phase 3 clinical program of apraglutide in short bowel syndrome with intestinal failure, which was our primary focus and the value driver of the Vectiv Bio acquisition. We believe epraglutide, if successful and approved, has best in class potential as the only once weekly GLP-two analog For the whole spectrum of patients with short bowel syndrome dependent on parenteral support, also known as SPSIF, a disease for which there is considerable unmet need.

Speaker 3

The novel STARS III trial is designed to show efficacy across both patient subtypes, Stoma and colon and continuity. As you may recall, the primary endpoint is relative change from baseline and weekly parenteral spore volume at 24 weeks. We view success as achieving this the primary endpoint as the only once weekly GLP-two therapy for SBSIF and look forward to seeing the pivotal data in March. In addition to evaluating aplaglutide for short bowel syndrome with intestinal failure, we're also looking at the asset as a potential treatment for patients with graft versus host disease or GVHD. Data is expected from this exploratory Phase 2 study later this quarter, which will inform a decision on further investment in the program.

Speaker 3

Next, CMP-one hundred and four for PBC. We're encouraged by the favorable T cell responses in patients treated with CMP-one hundred and four that we saw last year and look forward to seeing how this may impact liver function in the top line results expected in the Q3 of 2024. We're excited about CMP-one hundred and four because it has the potential to be the 1st disease modifying therapy for patients suffering with PBC As there are no therapies on the market today that address the root cause of the autoimmune destruction of the liver bile ducts. And finally, IW3300, a wholly owned Ironwood asset for visceral pain conditions, including interstitial cystitis and bladder pain syndrome. The Phase 2 study is ongoing and progressing well.

Speaker 3

The near term catalyst I just highlighted reinforce our confidence in the tremendous opportunity we have in front of us with multiple programs that we believe have the potential to improve the standard of care and the quality of life for patients suffering with GI diseases. With that, I'll turn it over to Sravan.

Speaker 4

Thanks, Mike, and good morning, everyone. I'll begin on Slide 10. As Tom mentioned earlier, LINZESS had another very strong year in 2023. As you can see, demand growth has been remarkable over time, reinforcing that patients and healthcare professionals continue to choose LINZESS in a growing market. We believe the strong demand momentum and success of LINZESS will continue as a result of high treatment satisfaction with both patients and healthcare professionals combined with increased clinical utility From the new pediatrics indication, class leading formulary access, guideline recommendations, focused commercial execution and new patient start acceleration.

Speaker 4

Next, I'll provide a brief update on the Vectiv Bio transaction. The integration of Ironwood Ineffective Bio Business Operations is ongoing and progressing very well. In December, We successfully completed the squeeze out merger under Swiss law. At that time Ironwood purchased all remaining outstanding ordinary shares of Vector Bio for $17 share in cash. Next, I will provide additional details on our 4th quarter and full year 2023 financial performance.

Speaker 4

I'm pleased that we were able to meet or exceed all three of our guidance metrics in 2023. I'll begin with LINZESS. LINZESS U. S. Net sales were $274,000,000 in the Q4 of 2023, an increase of 5% compared to the Q4 of 2022, driven by prescription demand growth 10%, partially offset by price and inventory channel fluctuations.

Speaker 4

For full year 2023, as shown on Slide 11, LINZESS U. S. Net sales were $1,073,000,000 an increase of 7% year over year driven by continued strong LINZESS prescription demand growth of 10%. Commercial margins were 77% in the 4th quarter compared to 74% in the Q4 of 2022. For the full year 2023, commercial margins were 73% in line with full year 2022.

Speaker 4

Moving to Ironwood revenues. In Q4, Ironwood revenues were $118,000,000 driven primarily by U. S. LINZESS collaboration revenues of $114,000,000 For the full year, Ironwood revenues were $443,000,000 with LINZESS U. S.

Speaker 4

Collaboration revenues of $430,000,000 In the Q4 and for the full year, Ironwood recorded $32,000,000 $83,000,000 income tax expense, respectively, the majority of which was non cash. In addition, Ironwood recorded interest expense of $8,000,000 and $22,000,000 in the 4th quarter and for the full year respectively and recorded $1,000,000 $19,000,000 in interest and investment income respectively in the Q4 and for the full year. GAAP net loss was $2,000,000 in the 4th quarter, Driven by one time non cash tax expense tied to a change in Massachusetts state laws and approximately $1,000,000,000 for the full year in 2023. As a reminder, for the full year GAAP net loss includes a one time charge approximately $1,100,000,000 from the acquisition of ActiveBio. Adjusted EBITDA was $40,000,000 in Q4 and a loss of $885,000,000 for the full year.

Speaker 4

Full year adjusted EBITDA loss also includes the one time charge of approximately $1,100,000,000 from the acquisition of Vectiv Bio. In the Q4 and for the full year 2023, Ironwood generated approximately $36,000,000 $183,000,000 respectively In cash flow from operations, we ended the year with $92,000,000 in cash and cash equivalents after paying $100,000,000 of the outstanding principal balance On our revolving credit facility in cash, as of the end of December, the outstanding drawn balance on the revolver was $300,000,000 Next, I'll review our 2024 guidance on Slide 12. As previously stated in January, We expect LINZESS U. S. Net sales growth in the low single digits percent driven by continued high single digit prescription demand growth offset by mid to high single digit price erosion, primarily driven by the Medicaid AMP cap removal legislation, which went into effect on January 1st this year.

Speaker 4

We expect Ironwood revenue of between $435,000,000 $455,000,000 And we expect adjusted EBITDA of greater than $150,000,000 which is in line with our previously stated expectation on announcement of the Vectiv Bio acquisition of greater than $175,000,000 of operating cash flows in 2024. To wrap up, we are very pleased with the progress we made in 2023. Ironwood is a much different company than we were just a few years ago and we believe we have positioned 2024 as a potential transformational year for our company. Looking ahead, we remain focused on maximizing LINZESS, advancing our GI pipeline and delivering sustained profits and cash flows. We are excited about the continued strong LINZESS performance and the key pipeline catalysts ahead of us, which we believe can propel Ironwood's next phase of growth.

Speaker 4

We look forward to sharing the STARZ Phase 3 top line results with you in March. I want to close by thanking all of our employees, patients, caregivers and advocates for their shared dedication to advancing and supporting therapies for GI diseases. Operator, you may now open up the line

Operator

And your first question comes from the line of Amy Lee from Jefferies. Your line is open.

Speaker 5

Hey, thanks so much for taking our question. Just 2 from us. On CIC, it looks like lepaglutide twice daily is showing higher improvement on PS reduction compared to GADX in CIC patients despite a relatively similar meaning protocol. Do you view this as a sign that improved PK will translate to efficacy? Additionally, can you walk us through the order of the hierarchical testing that you'll be looking at the secondary endpoints and where CIC falls relative to this?

Speaker 5

And then finally, can you give us any color on how much additional sales force that you may need to to launch epiprobutide in SBS and how we should model SG and A. Thanks so much.

Speaker 4

Okay. Well, thanks, Amy. I guess I'll start by handing it over to Mike answer the first two questions and I'll answer the 3rd on the sales force. Yes.

Speaker 3

Thanks, Amy. Good questions. So the first question you asked is related to PK and exposure around the Glepaglutide program and sort of some of the findings they had, which did sort of portend a better, from parenteralsport reduction perspective, outcome in the CIC population. The root of your question is obviously what gives you the best pharmacodynamic response from a PK perspective. And we've actually modeled and looked into this quite extensively The question is whether it's Cmax or whether it's AUC, right, whether you need to cover the receptor for multiple times or consistently throughout time.

Speaker 3

And that's sort of the where you're getting at with the Glepaglutide twice weekly that by doing it twice weekly or giving the drug twice weekly, They maintain sort of a higher trough throughout the week. And is that the reason why they might see better principal support reductions? We certainly think that There is an exposure related benefit to having, you know, drug chronically or at least persistently, available to the receptors. And that's one of the reasons why we think the once weekly has the potential opportunity best in class. So we certainly consider that.

Speaker 3

We're going to learn a lot from the study in terms of how to model that pharmacodynamic response, but it certainly is part of the PKPD profile that we think is very positive and The second question you asked was about the key secondaries. So we have taken into account statistically The secondary endpoints, obviously, to have future discussions with the agency on potential label language. Those key secondaries are The first one is really the reduction of at least one day off parenteral support for the total population at week 24. So, it's not a subtype endpoint, it's the total population. The second one really looks at the parenteral support volume reductions in stoma, as we've mentioned many times we think the CAC population takes a little longer to respond they start with lower preferential support volume needs and those kind of things The 4th one is the enteral economy, endpoint and that's at week 48.

Speaker 4

And then with respect to the sales force question, at launch, we will have the largest sales force ever arrayed against this disease state with over 90 our existing 90 reps, 90 plus reps here at Ironwood. From an incremental investment standpoint, I think we'll see as we, As we get closer to launch, how much that needs to evolve? We don't think it's very much. We do think there will be additional investments though, tied to selling a therapy that is a rare disease. And so that includes hub services, patient services.

Speaker 4

There is this becomes much more of a service model where we have to follow the patient through, their, you know, their patient journey and help support them. So we'll build out some of those additional or ancillary components of our sales force and our team. But that We don't think it's significant in terms of incremental spend and would not affect the guidance we've already given in terms of where we'll be in 2025.

Speaker 2

This is Tom. I think the big thing to understand with the Salesforce deployment is we're already in the Since today, a lot of these physicians who really kind of specialize in managing these patients reside. So that's the reason why we feel very confident that we have an adequate sales force. There may be some additional roles that will be specific For certain large GI practices that we're taking a look at that I think could very creatively and effectively accelerate the uptake of the drug, but we're not looking at certainly a significant incremental spend in sales force.

Speaker 5

Great. That's super helpful. Thanks so much.

Operator

Your next question comes from the line of David Amsellem from Piper Sandler. Your line is open.

Speaker 6

Hey, thanks. This is Tim on for David. As we get closer to apaglutide data, what are your latest thoughts on pricing of apaglutide to

Speaker 7

the extent of generic Gattex materializes? And what's your latest thinking on your strategy for apaglutide ex U. S, particularly in Europe? Thanks.

Speaker 4

Yes. So thanks, Tim. First on pricing, I think we're still working On some of that in terms of where those, where we'll price it, I don't think we've communicated, yet our strategy. And I think we still have some time before we we feel like we're ready to do that. I think a lot of that will tie to what what our clinical profile actually looks like and how differentiated it actually is.

Speaker 4

And so we'll wait till we have the data in March before we start working on that. With respect to the second component of your question, which is APRA US, look, we're think we understand that our current field and sales force is heavily U. S. And we're open, I think, to some flexibility about How we'll think about ex U. S.

Speaker 4

In a very strategic manner for our company?

Speaker 2

I mean, you can imagine, I mean, having a best in class product Like this or potentially best in class product list, we are certainly getting a fair bit of inbound interest. But obviously, it's something we're going to Certainly take advantage of as we move forward.

Speaker 7

Awesome. Thanks guys.

Operator

Your next question comes from the line of Mahesh Pantel from Wells Fargo. Your line is open.

Speaker 6

Great. Thank you for taking my question. I have 2. So one is like how much information about the secondary endpoints that you just mentioned, we could expect to see with the top line release in March? That's the first question.

Speaker 6

And the second one is, You do have a differentiated weaning mechanism from the parenteral support. Could you talk a little bit more about that? And Could it impact placebo as well as we are as we

Operator

look forward to the data? Thank you.

Speaker 3

Yes, sure. So as I mentioned, I mean, I can give you the key secondaries are described as I put them forward in the in the prior question. I mean, the main one is the days off, The one at least one day off Brent transport you may recall that's kind of a standard endpoint. It's been around since the GATX days because GATX use a responder definition And the responder was a 20% reduction that translated roughly to like one day out of the week and stuff like that. But that's sort of been one that's been compared across agents in the class.

Speaker 3

And then the other 2, we're really just trying to get granular on the subpopulations between stoma and CIC. The stoma is at 24 weeks, as we mentioned, because oftentimes the stoma populations have a higher principal volume need, and they tend to respond more quickly. That's to 24 week is also at that point for that reason. The third one is the CIC specific subpopulation, but that's a parenteral support volume reduction at week 48 because they often take longer to respond and then finally enteral autonomy which is the complete weaning off of parenteral sport which we think is a value value to patients. And then we'll certainly share the data in March with the top line results.

Speaker 3

The second question you talked about the weaning algorithm. The aspect of weaning obviously weaning is a part of the study, right? But the aspect of the difference between stoma and CIC has been around since the GATX days and really became clear sort of in the post marketing endpoint in the GAT X program or even the GLAPA program, on really highlighting the differences between CIC And, stoma, the real data looking closer at that data, it really became clear that The reason for that is the CIC patients start with a lower parenteral spore volume at baseline and therefore make smaller incremental reductions. And that called into question this 10% threshold for urine output to define who gets to wean. And so that got to a lot of external discussions, which were happening for the last decade, honestly.

Speaker 3

Could CIC patients participate in the primary endpoint if they could wean without hitting the 10% endpoint. And that's what the weaning algorithm is all about. It's saying, if patients in their weaning have greater than 10% reduction or increase in urine output, they can wean all patients. But if they have less than 10% and they're a CIC patient, then they go through a bunch of other parameters, Like their diet, like their stool input, their nutritional status or their stool output, their nutritional status, their body weight, and all those parameters and if they're all in line and the subject's doing nutritionally very well, then even if they don't hit the 10%, they could still participate in weaning. The weaning algorithm we used in the STARS Nutrition study, and you saw that data presented at UEGW, And the patients did very well, granted a small 9 patient open label study, but they all did respond and did were able to wean.

Speaker 3

And so the point to the question you asked about the placebo response is a good question. We that's an open label study. So we certainly got the treatment effect From that study, we had a 40% reduction in parenteral support volume at week 24 that increased to 52% by week 50 in week 52. So we certainly think there's an opportunity for therapeutic gain. To your point about placebo, we roughly look at the placebo response agnostic of that aspect across the patient population.

Speaker 3

So even including what we've seen in other studies with the placebo response around the 20%, We think there's certainly room there for therapeutic gain with the weaning algorithm in CIC patients.

Operator

Helpful. Thank you very much. Your next question comes from the line of Chase Knickerbocker from Craig Hallum Capital Group. Your line is open.

Speaker 8

Good morning, guys. Thanks for taking the questions. I actually wanted

Speaker 3

to start with the LINZESS question, believe it or not.

Speaker 8

So a longer one to start. I just want to dig in a little bit deeper on 2024 net revenue guidance. Maybe talk about the different moving pieces that could drive outperformance or underperformance on that guide from a standpoint of the net pricing decline assumptions. So you guys like pretty confident in those assumptions, the assumed pediatric growth driving some increased Medicaid exposure that actually makes that erosion a little bit worse. And what does additional pediatric exposure or differing patient mix kind of due to that erosion kind of assumption?

Speaker 4

Morning, Chase. So thanks for your question. I would say Our guidance is pretty straightforward and consistent with how we've done it in past years, which is, at this point in time, we're still anticipating high single digit Volume growth, over a very strong 2023, the fact that we're going to still grow another year from a volume perspective, That's going to be high single digits again. It's pretty impressive in my mind. We also gave guidance At the JPMorgan Healthcare Conference that we think in today that the, that we think the price erosion and any other fluctuations will essentially be mid to high single digit headwind to have low single digit growth, in for the full year.

Speaker 4

Now, if some of those headwinds do not materialize, we could have a year that resembles last year, but at this point in time, we feel, that given the change in the MCAP Rules from Medicaid that we anticipate just given our volume and where our book of business has been over the last few years, that that's a That's going to affect us this year. It won't affect us on a 2025 over 2024 perspective, because it's a year over year measure. But for this year, we do think that there will be a meaningful headwind from a price perspective, just given our volume and volumes in Medicaid.

Speaker 2

I think the one thing that we are seeing is we're seeing growth across the entire population. I think that's important to note. You look across all doses, we're seeing very strong growth both in new to brand, new prescriptions as well as overall total Rx. So I I mean, that's very healthy. We are seeing some very promising movement in the pediatric population, but at this point, it's a relatively small percent of our business, but it's growing rapidly and there is probably some additional exposure on the Medicaid side in the pediatric population.

Speaker 2

But I think As far as overall health of growth, we're seeing it across all patient populations, all payer segments. So I think it's all heading in the right direction. And to Shravan's point, we see this You know, cap change is kind of a one time hit this year. But the most important thing that we have to continue to do is drive demand growth. It's the one thing that's within our control.

Speaker 2

And what we do know about this brand, it continues to be extremely promotionally responsive. So we're going to continue to invest appropriately in the brand.

Speaker 8

Yes. Thanks, Tom. And maybe kind of Piggybacking off of that, if we dig in a little bit more to the volume growth assumptions, what percentage, I guess, or what portion of that growth kind of comes from the pediatric population in your guys' assumptions, what portion of that kind of growth assumption? And then also just to ask another question before I hop back in the queue. On 104, I mean, pretty high price tag acquisition recently, obviously, in PVC.

Speaker 8

Maybe speak to how this kind of validates Your kind of attempts at the space and way too early of a question, but if your thesis plays out here 104 is an approvable medicine and How do you see it kind of fitting into the treatment paradigm?

Speaker 2

Go ahead.

Speaker 4

Yes. So Chase, we haven't given guidance On the size of the pediatric indication, I think we're still evaluating. It's small, we're still but it's growing. We're still evaluating through some of the pilots that we're running, we extended them into this year. I think we mentioned that earlier this year.

Speaker 4

And so Well, as we know more, we'll come back and give more granular guidance potentially over the course of the year. But at this time, it's baked into our guidance. I want to reiterate what Tom said is, We continue to see patients, more patients seeking care in this space. And the good news is that as the market leader, We're seeing more patients, we get a disproportionate share and more patients end up coming on LINZESS. Based on the clinical profile, patient satisfaction and formulary access, which is class leading And, you know, just, just had, you know, the duration on the market and effectiveness.

Speaker 4

So, we, we do get a disproportion of that, but a lot of it is also just, broader demand also as patients seek care. With respect to CMP 104, you know, it's, you know, Congratulations to the Sima Bay team. Obviously, that's a great outcome for them. We think this space is, is the reason we entered the space is we found an Asset from a science perspective and a profile perspective, we think that actually, 1, is an extension of our GI Continuity continuum, and in terms of where we can we as an organization can treat GI diseases, so it fits core within our strategy. 2, I think we found the science behind this asset and the potential to be disease modifying, Exceptionally interesting.

Speaker 4

As Mike had mentioned earlier, all the other therapies on market, essentially treat the underlying symptoms Of PBC, very few actually get to the autoimmune destruction. Whereas we think, And again, we will it's a hypothesis which we will have more data for you in the Q3 of this year. And hopefully it's validated that We think that CMP 104 actually will stop and arrest that, autoimmune destruction. And so which we think will be a differentiated asset in this market. And so that's our perspective.

Speaker 4

But again, congratulations to the San Mateo team.

Speaker 2

I think this is all great news. I mean, this is it really puts a Focus on it is a highly problematic disease that needs better care. So I think it increases the attention and the momentum in this marketplace And hopefully, if we're right, we can really take advantage of.

Speaker 4

Great. Thanks, guys.

Operator

Your next question comes from the line of Jason Butler from JMP Securities. Your line is open.

Speaker 9

Hi, thanks for taking the questions. Just 2 for me. For apraglizide, could you just walk us through the gating items following positive results from STARZ and a potential regulatory submission. And then just on LINZESS, how are you thinking about further investment in The pediatric commercial opportunity, it's still early like you said, but are you seeing signals that continue to justify investing in that business? Thanks.

Speaker 4

Yes. I'll start with the second one, Jason, on LINZESS, just For a point of continuity and then Mike will answer the first question regarding regulatory pathway. Yes, look, early signs are very positive on pediatrics. And just from a new to brand, specific dose size that 92 microgram or 72 microgram dose, We feel really we feel positive about it. We think it's an opportunity worth pursuing between now and 2029 and worthy of the investment.

Speaker 4

But again, it's still too early to provide granular guidance as to what we think it will be in this year. And so we're just, as we know more, we'll share that. We just don't want to, given the growth profile and given the how small it is right now, It's something that we just want to be more cautious about from a guidance perspective. But we are pleased with the uptake and I'm pleased with the return on investment this fall.

Speaker 2

But we're not seeing dramatic increase in our investment. I think this isn't Maybe a refinement of our marketing mix. I mean, there's no question, we're running a number of pilots, digital pilots right now, Certainly sales piles right now. And we're taking a critical look too on the whole Medicaid exposure piece, which has to be of the equation with regard to where we're going to focus our activity and investment. So I think we're very pleased with what we're seeing as As Robin said, but we certainly are going to be very, very disciplined with regard to how we invest our money and at this point in the life cycle.

Speaker 3

Yes. So for epigrutide for the Phase 3, I mean, honestly, we're clearly 110% focused on the March top line results and We're much committed to that and delivering that so we all can understand where we are. And then of course, we still have a launch opportunity for 2025, which we're focused on.

Operator

And your next question comes from the line of Tim Chiang of Capital One. Your line is open.

Speaker 7

Mike, I wanted to ask you a couple of questions just on like Obviously, there's not going to be any head to head data with apraglutide and GADX. But Just looking at the GADIX label, obviously that drug was approved a long, long time ago. Their primary efficacy endpoint It's really a clinical response measurement. And I wanted to get your comments on it because obviously let's assume you have good data in March. But how would you sort of I mean, will you provide data on The secondary outcome measure of at least a 20% reduction of parental support volume from baseline at weeks 20 in 2024, just sort of as a relative comparator to Gattox?

Speaker 3

Yes. Thanks, Tim. So You're exactly right and I kind of alluded this into my other comments, but the GAD Techs program had a responder definition. Responder definition required a 20% reduction in and that actually translates quite well to the endpoint of the reduction in at least one day off per week. In fact, you may recall, I don't know if you're aware, but at the GAAP tax advisory committee, it all came down to that from the agency is one day a week meaningful and does this sort of 20% relate to that meaning the responder definition And it was a key discussion point and clearly the advisors agreed and it ultimately got NPS's approval for GATX and short bowel syndrome requiring parenteral Support.

Speaker 3

So for us, it translates into that one day off. To your point, we have a 20% reduction endpoint, but it's not one of the key secondaries that's statistically accounted for because it's also in the regulatory discussions taking a second seat to the parental support volume reduction at 24 weeks as well as the one day off endpoint. And that's how the discussions have gone with the agency. But they do very much correlate whether you take the relative change from baseline or percent change, those volumes do translate pretty well. And if you look, GLP is primary was a little nuance too as the percent change.

Speaker 3

They didn't use the responder definition, GATIX did. But if you look at the data, it actually translates pretty well across the two studies even 10 years apart which I felt quite interesting given the nature of a short bowel syndrome with intestinal failure.

Speaker 7

Okay. That's helpful, Mike. And I guess just the common ground between The data that we have with GADX and GlePA is that they have obviously shown Basically about a 2 point or a 2 liter reduction per week in parental support needs, right? I mean, and that's sort of that's like the absolute delta over placebo. So I just wanted to make sure that sort of I mean, if you can get that similar type of efficacy, That would be considered a win, Mike?

Speaker 3

Yes. Well, I think right now, I mean, you're getting to the granular volumes. But honestly right now for us the win is going to be the statistics around the primary endpoint. I mean because that's how it's going to play forward with the agency perspective and that's what we're committed to delivering. But we certainly will have all that data, Tim, as things roll forward.

Speaker 3

And just like it happened with the GAPTEX and the GLPPA programs, A lot of those more nuanced volume datas do come out, later because the primary top line data usually sticks to the statistically relevant endpoints from a first run perspective and then we'll have multiple scientific sessions which will continue to roll out data to inform us of the study outcomes.

Speaker 7

I mean, is it possible that some of this more specific data might be able to be released at like an upcoming medical like DDW or do you think you won't make the cutoff?

Speaker 3

Well, the abstract deadline for this DDW is full of last December. So it's That's kind of a there's obviously the fast track point. But the point is for the top line, we really stick to the statistically relevant endpoints. They're going to there'll be a lot of data coming later.

Speaker 7

Got it. Okay. Thanks so much, Mike.

Operator

As there are no further questions, I would like to thank our speakers for today's presentation and thank you all for joining us. This now concludes today's conference. You

Speaker 1

may

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