IRWD - Ironwood Pharmaceuticals

[walkie518]

It's primary revenue generator, Linzess, is doing well and is growing sales.  China approval should be a nice boost, but before that was public information, Ironwood published a deck indicating the standalone company will be profitable this year.

 

Ironwood splitting from Cyclerion likely provides a better entry point after today's 4% spike, that said stock might still be very cheap regardless?

 

Mgmt claims Linzess had $760m of US net sales last year with $440m of "brand profitability."  The one approved indication is growing nicely, and Linzess has one phase 3 and one phase 2 dev program w/Allergan, an IBS-D for one unbranded drug and another for GERD in phase 3 trials. 

 

Assuming that Linzess has only 1 application, $440m of gross profit is a pretty big number for a $2B mcap?

 

Should the GERD drug be approved, this could be a large market.  Should that drug fail, the other Linzess applications, which will get approved for safety (though efficiacy?), might be enough to bolster sales to justify growth in the mcap?

 

Cyclerion is interesting as a spin, but it appears highly speculative despite the management, pipeline, and specificity of application to orphan diseases.  Considering that the Ironwood founders are going with the spin says that they love what they do and Ironwood might be good on its own?

 

Anyone have detailed insight into the underlying science for IRWD or the spin and/or a feel for probability of approval?