Ironwood Pharmaceuticals Q2 Earnings Call Highlights

Key Points

• LINZESS sales strengthened: U.S. second-quarter sales rose 14% to $282.3 million, prompting Ironwood to raise 2026 LINZESS guidance to $1.15 billion-$1.2 billion.
• Apraglutide advanced: The company began enrolling patients in the confirmatory Phase III STARS-2 trial for short bowel syndrome with intestinal failure and is working to accelerate recruitment.
• Financial outlook improved: Ironwood repaid $200 million in convertible notes, raised 2026 revenue guidance to $460 million-$485 million and expects adjusted EBITDA above $310 million.

Ironwood Pharmaceuticals NASDAQ: IRWD reported second-quarter results marked by higher LINZESS sales, the start of enrollment in its confirmatory Phase III study of apraglutide, and repayment of its convertible notes, prompting the company to raise its full-year 2026 financial outlook.

Chief Executive Officer Thomas McCourt said the company remains focused on three priorities for 2026: maximizing LINZESS performance, advancing apraglutide for short bowel syndrome with intestinal failure, and delivering sustained profitability and cash flow.

LINZESS Sales Rise as Guidance Increases

LINZESS generated $282.3 million in U.S. net sales during the second quarter, up 14% from a year earlier. McCourt said performance was driven by improved net price and mid-single-digit prescription-demand growth. First-half U.S. net sales for LINZESS totaled $555 million, a 44% year-over-year increase.

Chief Commercial Officer Tammi Gaskins said prescription volume, measured by total prescriptions, increased 4% in the second quarter and 5% through June. The company now expects mid-single-digit demand growth for the full year.

Gaskins attributed part of the higher net price to the continued benefit of eliminating inflationary rebates across channels, as well as favorable timing related to gross-to-net rebate reserves compared with the second quarter of 2025. She said Ironwood expects reduced quarterly variability in net sales during 2026 because net prices are more consistent across channels than they were last year.

The company expects LINZESS demand to build in the second half, with the fourth quarter projected to produce the highest net sales of the year. Management said it does not expect a significant reduction in Medicaid demand after having worked with its partner and state payers to maintain patient access.

Ironwood raised its 2026 LINZESS U.S. net-sales guidance to between $1.15 billion and $1.2 billion, representing growth of more than 30% year over year. McCourt said the outlook would return LINZESS to blockbuster status and result in the highest annual U.S. net sales in the product’s history.

During the quarter, the Food and Drug Administration approved LINZESS for functional constipation in pediatric patients ages 2 and older. McCourt said LINZESS is now the only prescription therapy approved for functional constipation in that age group.

Apraglutide Confirmatory Study Begins Enrollment

Ironwood initiated its confirmatory Phase III STARS-2 trial of apraglutide in June and has begun recruiting patients. The study is evaluating the once-weekly GLP-2 analog in adults with short bowel syndrome with intestinal failure who depend on parenteral support, such as IV fluids and nutrients.

New Chief Medical Officer and Head of Research and Drug Development Jeff Silber said STARS-2 is a 24-week global, randomized, double-blind, placebo-controlled trial. Its primary endpoint is the relative change from baseline in actual weekly parenteral-support volume at week 24.

Silber said the company is adding sites and leveraging infrastructure developed during the prior Phase III STARS trial, which included 68 global sites. Ironwood is also adding more U.S. sites and identifying high-potential locations with known patient populations in an effort to support enrollment.

The company is evaluating opportunities to accelerate enrollment, though management characterized the process as being in its early stages. Chief Strategy Officer Jeff Ruberti said the company had activated its first sites and was enrolling patients.

Silber highlighted prior STARS data showing apraglutide reduced parenteral-support requirements compared with placebo at week 24, with treatment effects observed as early as week eight. He said the study showed apraglutide was well tolerated, with overall safety and gastrointestinal tolerability similar to placebo.

In the STARS long-term extension study, more than one in five enrolled patients had achieved enteral autonomy as of January 2025, according to Silber. He said Ironwood believes apraglutide’s once-weekly dosing, tolerability profile and clinical results could position it as a preferred GLP-2 treatment option if approved.

Management also addressed a dosing issue from the original STARS trial. Silber said the intended 5-milligram dose resulted in delivery of 3.5 milligrams because of the study kit and instructions. He said Ironwood has redesigned the kit, completed human-factor studies and collected drug-exposure and pharmacokinetic data, adding that the company is confident it can control dosing in STARS-2.

Profitability, Debt Reduction and Outlook

Ironwood reported second-quarter total revenue of $113 million, GAAP net income of $51.3 million and adjusted EBITDA of $83 million. The company ended the quarter with $79 million in cash and cash equivalents, along with $113 million in collaboration receivables.

Interim Chief Financial Officer Ron Silver said Ironwood repaid its $200 million convertible notes at maturity in June using cash on hand. The company plans to use operating cash flow to further reduce debt and expects to end 2026 with less than $300 million in gross debt outstanding. McCourt said the company expects gross leverage to be below one times by year-end.

For 2026, Ironwood raised total revenue guidance to between $460 million and $485 million and now expects adjusted EBITDA of more than $310 million. Silver said research and development expense should rise in the second half as the STARS-2 study ramps up, while selling, general and administrative expenses are expected to increase modestly.

McCourt also announced leadership changes, including Silber’s appointment as chief medical officer following the retirement of former CMO and R&D head Mike Schutzelein. Ron Silver, previously senior vice president, corporate controller and chief accounting officer, is serving as interim CFO.

About Ironwood Pharmaceuticals (NASDAQ:IRWD)

Ironwood Pharmaceuticals, Inc is a commercial‐stage biotechnology company focused on the discovery, development and commercialization of medicines for gastrointestinal (GI) disorders. The company's flagship product is linaclotide, marketed under the brand name LINZESS in the United States for the treatment of irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC). Through a strategic collaboration with Allergan (now part of AbbVie), Ironwood also commercializes linaclotide in select ex-U.S.

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