Ironwood Pharmaceuticals, Earnings Call INSIGHTS: Huge Opportunity in CC, Feeling Good About Commercial Readiness

On Tuesday, Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.

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Huge Opportunity in CC

Geoffrey Meacham – JPMorgan: A question for you commercially, I guess for Tom, so with the start of your Phase 3b, maybe help us with the impact of this incremental opportunity in CC, either patient numbers or whatever demographics you can share with us?

Thomas McCourt – CCO and SVP, Marketing and Sales: Certainly I’ll ask Mark to jump in here as well, but I think as we’ve mentioned over and over again, there’s a huge opportunity within CC with these patients that have – that by definition are CC patients than IBS patients that have significant abdominal symptoms that would include bloating, fullness, a number of other symptoms which we think is really a huge opportunity for us and I think the more we can understand how well these patients respond to the drug. Obviously the stronger case we can make that they are appropriate drugs – appropriate patients for the drug and that this really becomes the drug of first choice for those patients.

Mark G. Currie, Ph.D. – SVP, R&D and Chief Scientific Officer: I would add to those thoughts not only from the clinical trials but from the patient interview that I appear over, certainly the abdominal symptoms rank very high for the patients that have chronic constipation and there were certainly groups of those patients that had high rates of bloating as a major symptom causing distress for the patients and ultra discomfort. So I think that certainly supports what Tom and the commercial team are thinking around the patient population.

Geoffrey Meacham – JPMorgan: Just one more on the commercial side, Michael you mentioned China and South America and likely a partnership for linaclotide this is I guess outside of the Astellas and the Almirall regions. But maybe help us with kind of how you are thinking about these markets? Is this – there is a partnership or something that you guys would want to do, some period preapproval say six months or a year, is it something that you had want to get the label to better understand what the opportunity is in these emerging markets?

Michael J. Higgins – COO and CFO: Yes, Jeff. It’s Michael. I will take that. The opportunities there as you know, we’ve discussed a bit. We believe that the opportunity both in China and in South America, specifically Brazil we think the opportunity is there. We’ve done a fair amount of work on the prevalence. We know it’s there. There is a need to create market. So, our discussions have really focused on finding the right partner to help advance the creation of the markets in those territories. So, it’s hard to predict when those partnerships ever come to fruition, so we’ve been actively having those conversations now. We’re not limiting ourselves to the exact timing of them. We’re engaged actively in conversations right now. I won’t ever predict when those would be complete, but we certainly are engaged in substantive conversations. So we don’t think it’s necessary to have specific clinical data either in those territories or even launch data in the U.S., we think we can move forward with those, but we’ll see how they progress and we’re going to look to find a partner who can help advance it and we’re going to look to retain significant long-term value in all of those territories.

Geoffrey Meacham – JPMorgan: So you’re comfortable at this point with not needing a partner to enhance your regulatory probability of success, it’s more of a commercial straight out partnership.

Michael J. Higgins – COO and CFO: Yeah, I think we’re comfortable with advancing the program and I think what we’re going to look for in each of these territories is the right partner that can help us with all aspects of the business, but we want to remain involved as we have across the globe. So, we’re going to be participants in any relationship that we establish.

Feeling Good About Commercial Readiness

Graig Suvannavejh – Jefferies: I just have two. One is, just wondering if there was any progress you can report on the commercialization efforts whether they relate to aspects on reimbursement of the payor front as well as on DDMAC materials. Then secondly, just more of a modeling question, just your R&D in the first half of the year was a little higher than what I had expected. Is that a good run rate for the second half?

Michael J. Higgins – COO and CFO: Why don’t we have Tom take the first question and then Jim will give a little detail on the R&D numbers.

Thomas McCourt – CCO and SVP, Marketing and Sales: Could you repeat the first question? I just want to make sure I have…

Graig Suvannavejh – Jefferies: Yeah, I just wanted to know if you could comment on any progress you’re making just on general commercialization efforts, particularly on the payor front and perhaps DDMAC materials.

Thomas McCourt – CCO and SVP, Marketing and Sales: Sure. I think we feel very, very good as far as where we are overall with the commercial readiness. As you know, we’ve been working very closely with Forest, both preparing a sales organization, the promotional platform, and certainly preparing for the payor, and as you know, the payor space is a place where Forest has a particular competency that we’re really leveraging. I think we’ve spent a great deal of time really understanding from the payor what is the value proposition need to be to really secure reimbursement, because our number one objective here is to make sure that we get drug to patient. So, I think we’re feeling pretty good about the overall value proposition to the payor in terms of the clinical benefit and certainly making sure that we get price right to make sure that we can maximize availability to patients. So, I think we’re making good progress there. I think we’ve zeroed in on the right strategies, and I think we’re fairly confident we’ll do well there. With regard to DDMAC, which as you know is now OPDP that will all depend on what final labeling looks like. We have the promotional materials ready to go. Obviously, they’ll have to be tweaked once we get the final label to make sure that they are absolutely aligned. But we’ll have to see what final labeling looks like and how we’ll have to adapt the promotional platform, so we could submit as quickly as possible, which enables us to get to commercialization as fast as we can.

James M. DeTore – VP, Finance and Administration: It’s Jim DeTore. On the expenses, particularly with R&D, we talked about the fact that we’re going to continue to invest in robustness and redundancy of the supply chain. We’ve talked about the fact for linaclotide and continue to expand the usage of linaclotide in other populations such as the 3B study that was mentioned earlier. Then we have our $60 million to $70 million we’ve talked about in non-linaclotide. I would say all those investments will continue. In terms of China, quarter-to-quarter there is going to be choppiness quarter-to-quarter. So it’s difficult to say – to put a trend line to that but I would say those investments will continue.

Graig Suvannavejh – Jefferies: So in terms of the second half it is too difficult for you to kind of give us some sense of whether it will be on a similar run rate to the first half?

Michael J. Higgins – COO and CFO: I think activities will continue but how they come through quarter-over-quarter is difficult to predict at this time and we don’t have any guidance in that area.

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