Press Release: Ironwood Pharmaceuticals To Participate In The Jefferies London Healthcare Conference

Ironwood Pharmaceuticals, Inc. IRWD reported adjusted earnings of 2 cents per share for the third quarter of 2024, missing the Zacks Consensus Estimate of 9 cents. The company had recorded adjusted earnings of 12 cents per share in the year-ago quarter.

Total revenues in the third quarter were $91.6 million, which beat the Zacks Consensus Estimate of $89 million. However, the top line decreased almost 19.4% year over year due to the decrease in collaborative arrangements revenues related to its sole marketed drug, Linzess (linaclotide).

Shares of Ironwood were down 7.5% on Nov. 7 following the announcement of the earnings.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

More on IRWD's Q3 Results

As reported by partner AbbVie ABBV, Ironwood’s marketed product — Linzess — generated net sales of $225.5 million in the United States, down 19% year over year, due to continued pricing pressure. However, total prescriptions for Linzess increased 13% year over year.

Ironwood and AbbVie equally share Linzess’ brand collaboration profits and losses.

IRWD’s share of net profit from the sales of Linzess in the United States (included in collaborative revenues) totaled $88.9 million, declining almost 19.3% year over year.

Shares of Ironwood have plunged 59.2% year to date compared with the industry’s decline of 3.3%.

Ironwood Pharmaceuticals (IRWD) came out with quarterly earnings of $0.02 per share, missing the Zacks Consensus Estimate of $0.09 per share. This compares to earnings of $0.12 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -77.78%. A quarter ago, it was expected that this drugmaker would post earnings of $0.17 per share when it actually produced break-even earnings, delivering a surprise of -100%.

Over the last four quarters, the company has not been able to surpass consensus EPS estimates.

Ironwood, which belongs to the Zacks Medical - Drugs industry, posted revenues of $91.59 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.94%. This compares to year-ago revenues of $113.74 million. The company has topped consensus revenue estimates two times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Ironwood shares have lost about 55.9% since the beginning of the year versus the S&P 500's gain of 24.3%.

What's Next for Ironwood?

While Ironwood has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Ironwood: unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.16 on $97.16 million in revenues for the coming quarter and $0.28 on $355.05 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Drugs is currently in the top 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Cosmos Health Inc. (COSM), another stock in the same industry, has yet to report results for the quarter ended September 2024.

This company is expected to post quarterly loss of $0.11 per share in its upcoming report, which represents a year-over-year change of -22.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Cosmos Health Inc.'s revenues are expected to be $14 million, up 9.2% from the year-ago quarter.

Zacks Investment Research