Ironwood- Focus Should Shift Towards Apra’ (BUY, TP $17 [22])
Post-Q2, we revise our forecasts to reflect the impact of the Medicaid AMP cap removal on Linzess sales. We expect Medicaid to grow its Linzess volume share, exerting pressure on pricing and resulting in c. 20% and 45% topline and EBIT headwinds in ’24 and ’25, respectively. Nevertheless, we believe that attention should soon shift to apra’ in SPS-IF. With strong P3 results (see HERE), we see a launch in ‘26 and forecast peak risk-adjusted sales of $800m. Our updated PT of $17/share [$22] implies >3x upside, with apra’ accounting for around two-thirds of the company value. We value all other opportunities, including apra’ in aGVHD (completed P2), at just $3/share, which could be a source of future upgrades.For access to the full note, please contact Naresh Chouhan ( )
Ironwood Pharmaceuticals is a gastrointestinal (GI), healthcare company focusing on developing the treatment of GI diseases. The company's commercial product, LINZESS? (linaclotide), a guanylate cyclase type C agonists, is indicated for adult men and women suffering from irritable bowel syndrome with constipation, or chronic idiopathic constipation. In addition, the company is developing MD-7246, an oral, intestinal, non-opioid, pain-relieving agent for patients with abdominal pain associated with certain GI diseases. The company is also developing IW-3718, a gastric retentive formulation of a bile acid sequestrant for the potential treatment of refractory gastroesophageal reflux disease.
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