Q4 2020 Ironwood Pharmaceuticals Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Ironwood Pharmaceuticals fourth quarter and full year 2020, Investor update conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone keypad. If you require any further assist.
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Ironwood Pharmaceuticals fourth quarter and full year 2020 investor update. At this time, all participants are in a listen-only mode. For this presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. If you require any further assistance, please press star zero. I would now like to turn to your speaker today, Meredith Kaya. Thank you. Please go ahead.
Please press Star Zero I would now like to hand, the conference over to your speaker today Meredith Kaya. Thank you. Please go ahead.
Good morning, and thanks for joining us for our fourth quarter and full year 2020, Investor update our press release crossed the wire. This morning and can be found on our website.
Meredith Kaya: Good morning, and thanks for joining us for our fourth quarter and full year 2020 investor update. Our press release crossed the wire this morning and can be found on our website. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially.
Today's call and accompanying slides include forward looking statements such statements involve risks and uncertainties that may cause actual results to differ materially.
Meredith Kaya: A discussion of these statements and risk factors is available on the current Safe Harbor Statements slide as well as under the heading Risk Factors in our quarterly report on Form 10-Q for the quarter ended September 30, 2020 and in our future SEC filings. All four forward-looking statements speak as of the date of this presentation, and we undertake no obligation to update such statements. Also included are non-GAAP financial measures, which should be considered only as a supplement to, and not a substitute for, superior to, GAAP measures.
Discussion of these statements and risk factors is available on the current safe Harbor statement slide as well as under the heading risk factors in our quarterly report on form 10-Q for the quarter ended September 32020, and in our future SEC filings.
All forward looking statements speak as of the date of this presentation and we undertake no obligation to update such statements. Also included are non-GAAP financial measures, which should be considered only as a supplement to and on a substitute for superior to GAAP measures to the extent applicable. Please refer to the tables at the end of our press release for reconciliations of these measures to the Mr.
Meredith Kaya: To the extent applicable, please refer to the tables at the end of our press release for reconciliations of these measures to the most directly comparable GAAP measures. During today's call, Mark Mallon, our CEO, will begin with an overview, followed by Tom McCourt, our president and incoming interim CEO, who will review our strategic priorities for the commercial performance of Linzess. Then Gina Konselman, our CFO, will review our 2020 financial results and provide guidance for 2021. And finally, Mike Shetzline, our Chief Medical Officer, will provide an overview of our current focus on GI innovation.
<unk> comparable GAAP measures.
During today's call Mark Mallon, our CEO will begin with an overview followed by Tom Mccourt, our president and incoming interim CEO, who will review our strategic priorities in commercial performance of Linzess.
Then Gina councilman, our CFO will review, our 2020 financial results and provide guidance for 2021, and finally, Mike <unk>, Our Chief Medical Officer will provide an overview of our current focus on GI innovation, we will close the Q&A session. We.
Meredith Kaya: We will close with a Q&A session. We will be referring to slides via the webcast. For those of you dialing in, please go to the events section of our website to access the webcast slides. With that, I will turn the call over to Mark.
We will be referring to slides via the webcast for those of you dialing in please go to the events section of our website to access the webcast slides with that I will turn the call over to Mark.
Mark Mallon: Thanks, Mareth. Good morning, everyone, and thanks for joining us today.
Thanks, Meredith good morning, everyone and thanks for joining us today.
Mark Mallon: Let me begin by saying how proud I am of the entire Ironwood team who truly showed their passion and commitment throughout 2020 to advance treatment for GI diseases and redefine the standard of care for GI patients. Their passion and mission-driven approach is one of the things that has most inspired me during my time with Ironwood. As I shared last week, deciding to leave Ironwood was not easy, but the chance to pursue certain passions of mine is really the right decision for me personally and for my family.
Let me begin by saying how proud I am of the entire Ironwood team, who truly showed their passion and commitment throughout 2022 advanced treatments for Gi diseases, and redefining the standard of care for Gi patients their passion and mission driven approach is one of the things that has most inspired me during my time with Ironwood as I.
Last week deciding to leave Ironwood was in D C, but the chance to pursue certain passions of mine is really the right decision from me personally from my family.
Mark Mallon: I'm confident Ironwood will be in great hands with Tom as interim CEO while the board conducts its search. Tom has been an incredible colleague of mine for many years and a key member of the leadership team since joining Ironwood in 2009. In addition to his many accomplishments over the years, he led the successful launch and commercialization of Linzess.
I'm confident ironwood will be in great hands with Tom as interim CEO, while the board conducts its search.
It's been an incredible colleague of mine for many years and a key member of the leadership team since joining us in 2009 in.
In addition to his many accomplishments over the years. He led the successful launch and commercialization on Linzess.
Mark Mallon: Despite the challenges of the COVID-19 pandemic over the last year, Ironwood's business fundamentals and financials are strong. We believe the resilience and strength of Lyncette, combined with the continued profit and cash generation in 2020, provide a solid foundation for the future. I'm confident Ironwood is well-positioned to deliver value for patients and shareholders. Turning to our 2020 performance, We began 2020 focused on our three core priorities: to drive Lindsay's growth, advance our GI portfolio, and deliver sustainable profit.
Despite the challenges of COVID-19 pandemic over the last year Ironwood business fundamentals and financials were strong we believe the resilience and strength in Linzess combined with the continued profit and cash generation in 2020 provides a solid foundation for the future I'm confident ironwood is well positioned to deliver value for patients and shareholders.
Turning to our 2020 performance.
We began 2020 focused on our three core priorities to drive Linzess growth advance, our Gi portfolio and deliver sustainable profit.
Mark Mallon: Lincez continues to be the prescription market leader within its category, demonstrating exceptional growth in the brand's eighth year since launch. Additionally, Ironwood has now delivered its second consecutive year of profits and ended 2020 with over $360 million in cash, more than doubling our cash position from the end of 2019.
And it says continues to be the prescription market leader within its category demonstrating exceptional growth in the brand's eighth year since launch. Additionally, Ironwood has now delivered its second consecutive year of profit and ended 2020 with over $360 million in cash more than doubling our cash position from the end of 2019.
Mark Mallon: Turning to our pipeline, the results from the 3718 and 7246 clinical programs were disappointing. These were two distinct programs that were being developed to treat high unmet medical needs and represented an opportunity to potentially help millions of patients. While these types of outcomes are not uncommon in drug development, they are certainly never easy, especially when they affect our own teammates, as they did with the recent workforce reduction. We were pleased to receive the approval of a lineclotide SNDA for overall abdominal symptoms data in adults with IBSC, as well as the progress of our ongoing pediatric studies, with several GI diseases in desperate need of new therapy.
Turning to our pipeline. The result from the 37 18 and $72 46 clinical programs were disappointing. These are two distinct programs that were being developed to treat high unmet medical needs and represented an opportunity to potentially help millions of patients on these types of outcomes are not uncommon in drug development. They are certainly never easy, especially when they affect our own.
On teammates as these did with the recent work force reduction.
We're pleased we were pleased to receive the approval of Linaclotide S. NDA from overall abdominal symptoms data in adults with Ibs C as well as the progress of our ongoing pediatric studies.
With several Gi diseases in desperate need of new therapies continued scientific progress within this category and our unique expertise and capabilities. The team is focused on finding and advancing innovative treatments for Gi diseases.
Mark Mallon: Continued scientific progress within this category based on our unique expertise and capabilities The team is focused on finding and advancing innovative treatments for GI disease. I'm proud of the strong foundation we've built together. All of you at Ironwood are true champions in the GI community, and I'm privileged to have worked alongside you. I look forward to following Ironwood as it seeks to drive continued success. With that, I'll turn it over to Tom. Tom?
Proud of the strong foundation, we've built together all of you and Ironwood are two champions of the Gi in the GI community and I'm privileged to have worked alongside you I look forward to following ironwood as it seeks to.
It seeks to drive continued success with.
With that I'll turn it over to Tom Tom.
Thanks, Mark and good morning, everyone.
Thomas A. McCourt: Thanks, Mark. And good morning, everyone.
Thomas A. McCourt: I look forward to serving as the interim CEO following Mark's transition, as we build on the strong foundation we have in place. Our path forward strategy begins with maximizing Lenz's We believe there's substantial opportunity for continued growth and are working closely with our partner to deploy innovative commercial strategies and enhance clinical, the clinical profile through lifecycle management. Second, we are focused on building an innovative GI development portfolio by pursuing assets, The Target Series Organic G.I. We maintain a disciplined approach to exploring and assessing potential new assets, including applying a focused set of criteria and a high bar for any potential deal that we may consider.
Look forward to serving as the interim CEO following Mark's transition as we build on the strong foundation, we have in place our path forward strategy begins with maximizing Linzess. We believe there's substantial opportunity for continued growth and are working closely with our partner to deploy innovative commercial strategies and enhancing clinical.
Clinical profile through lifecycle management.
Second we're focused on building an innovative Gi development portfolio by pursuing assets.
The target serious organic Gi diseases.
We maintain a disciplined approach to exploring and assessing potential new assets, including applying a focused set of criteria and a high bar for any potential deal that we may consider.
We believe our new refreshed approach.
Thomas A. McCourt: We believe our new refreshed approach has the potential to drive our business further and faster, and with the potential to provide great benefit to patients we conserve, and third, we seek to continue to take a thoughtful and disciplined approach to capital allocation in an effort to continue generating sustainable profits and cash flow. We're steadfast in our mission and importantly remain focused on our goals of driving value to shareholders by bringing important medicines to patients and building a growing and successful business. Now, let me turn to the commercial performance.
It has the potential to drive our business further and faster and with the potential for providing great benefit to patients we conserve.
Third we seek to continue to take your thoughtful and disciplined approach to capital allocation in an effort to continue generating sustainable profit and cash flow.
We are steadfast in our mission and importantly remain focused on our goals of driving value to shareholders by bringing important medicines to patients and building a growing and successful business.
Now, let me turn to the commercial performance in 'twenty 'twenty Linzess showed incredible strength and resilience on the face of the pandemic.
Thomas A. McCourt: In 2020, Linzess showed incredible strength and resilience in the face of the pandemic, further strengthening its position as the number one prescribed medicine in the U.S. for the treatment of adults with IBSD and chronic constipation. Linzess prescription demand grew 8% in the fourth quarter and 9% for the full year 2020 year-over-year. This strong performance translated into full year U.S. net sales of $931 million, a remarkable achievement.
Further strengthening its position as the number one prescribed medicine in the us for the treatment of adults with Ibs C and chronic constipation linzess prescription demand grew 8% in the fourth quarter and 9% for the full year 2020 year over year.
This strong performance translated into full year U S net sales of $931 million a remarkable achievement.
Thomas A. McCourt: We are seeing strong LINZUS demand growth continuing into the first quarter, and while it's still early, we're very encouraged by the performance thus far. We believe Linzess remains on track to exceed a billion dollars in U.S. net sales with several additional opportunities to drive further growth. The brand hit all-time highs in new-to-brand prescriptions in the second half of 2020, reinforcing that patients and healthcare practitioners continue choosing Linzess for appropriate patients despite the pandemic-related limitations.
And we're seeing strong linzess demand growth continuing into the first quarter and while it's still early we're very encouraged by the performance thus far.
We believe Linzess remains on track to exceed $1 billion in U S. Net sales with several additional opportunities to drive further growth.
The brand hit all time highs in new to brand prescriptions in the second half of 'twenty 'twenty reinforcing that patients and health care practitioners continue choosing linzess for appropriate patients. Despite the pandemic related limitations.
Thomas A. McCourt: We also saw an increase in 90-day prescriptions as a percent of our total business. In the fourth quarter, 90-day prescription demand was 20% of our business versus 17% during the same time in 2019, meaning on average, more total pills per prescription.
We also saw an increase of 90 day prescriptions as a percent of our total business.
In the fourth quarter 90 day prescription demand was 20% of our business for 17% during the same time in 2000 22019 meeting.
Meaning on average more total pills per prescription.
The brand success to date in the U S has come through consistent strong execution of the commercial strategy. That's grounded in three core fundamental increasing awareness of linzess amongst physicians motivating appropriate patients to seek care and request linzess and securing broad payer access.
Gina Konselman: The brand's success to date in the U.S. has come through consistent, strong execution of the commercial strategy that's grounded in three core fundamentals, increasing awareness of LINZS among physicians, motivating appropriate patients to seek care and request LINZS, and securing broad payer access. Moving forward, we intend to continue to focus on these core fundamentals, but to execute them in new ways, in an effort to further maximize the Lintus potential To further support our clinical discussions with health care practitioners, we're working to strengthen the virtual selling capabilities we deployed in 2020 and create a hybrid selling model.
Moving forward, we intend to continue to focus on these core fundamentals, but to execute in new ways.
In an effort to further maximize the linzess potential first.
To further support our clinical discussions with health care practitioners, we're working to strengthen the virtual selling capabilities. We deployed in 2020, Inc.
Create a hybrid selling model. We think this will be important capability for the future. In addition, we intend to build further awareness of the overall abdominal symptom data in adults with Ibs C. Based on the FDA approved labeling update in 2020.
Gina Konselman: We think this will be an important capability for the future. In addition, we intend to build further awareness of overall abdominal symptom data in adults with IBSC based on the FDA-approved labeling update in 2020. We also intend to advance our efforts in telemedicine in light of the expansion of the use of telemedicine by patients and physicians. We're in the process of expanding our telemedicine efforts and capabilities and seeking to strengthen its impact in 2021.
We also intend to advance our efforts in telemedicine in light of the expansion of the use of telemedicine by patients and physicians.
We're in the process of expanding our telemedicine efforts and capabilities and seeking to strengthen the impact in 2021.
Since launch there has been.
Gina Konselman: Since launch, there has been a significant focus on establishing broad payor access. As the prescription market leader in this category, Linzess has wide, unrestricted access, and we seek to maintain this status as a key growth driver for the brand. Lastly, we expect to advance additional lifecycle management efforts for LinAquitide. We believe we have a long runway to continue to grow, and we are currently evaluating opportunities for LinaxGyde, both with regard to new indications and new patient populations. With that, I'll turn the call over to Gina. Gina?
Difficult focused on establishing broad payer access.
The prescription market leader in its category Linzess, there's wide unrestricted access and we seek to maintain the status as a key growth driver for the brand.
Lastly, we expect to advance additional lifecycle management efforts for Linaclotide.
We believe.
We have a long runway to continue to grow and we are currently.
We are evaluating opportunities for linac side, both with regard to new indications and new patient populations with that I'll turn the call over to Gina Gina.
Gina Konselman: Thanks, Tom, and good morning, everyone. I am pleased to be able to highlight our strong financial performance for 2020 and provide our 2021 financial guidance. Please refer to our press release for our detailed financial information. First, I will touch on our 2020 financial performance. Ironwood's total revenues in the fourth quarter of 2020 were $117 million, driven primarily by a 9% increase in U.S. collaboration revenue from Linzess year-over-year and $390 million for the full year, exceeding our 2020 revenue guidance.
Thanks, Tom and good morning, everyone I am pleased to be able to highlight our strong financial performance for 2020 and provide our 2021 financial guidance. Please refer to our press release for a detailed financial information.
First touching on our 2020 financial performance Ironwood.
Total revenues in the fourth quarter of 2020 were $117 million driven primarily by a 9% increase in U S collaboration revenue from Linzess year over year, and 390 million for the full year exceeding our 2020 revenue guidance.
Gina Konselman: A reminder that 2019 revenues included $42 million in license and milestone payments and $49 million in sales of lenacletide API recorded in 2019. Beginning in 2020, we are no longer responsible for the supply of lenacletide API to our ex-U.S. partners.
A reminder, that 2019 revenue included $42 million in license and milestone payments on $49 million on sales of Linaclotide API recorded in 2019.
Beginning in 2020, we are no longer responsible for the supply of Linaclotide API to our ex U S partners.
Gina Konselman: API sales during this past year reflected the remaining API shipments to Astellas and AstraZeneca per our amended agreement. Regarding Linzess, U.S. net sales were up 16% in the fourth quarter and 10% for the full year 2020, year over year. I'd like to briefly comment on commercial margin in the fourth quarter, as it was lower than we have seen in previous quarters. This decrease is due primarily to an adjustment to selling expenses recorded during the period.
Sales during this past year reflected the remaining API shipments to Astellas and Astrazeneca for our amended agreements.
Regarding Linzess U S. Net sales were up 16% in the fourth quarter and 10% for the full year 2020 year over year.
I'd like to briefly comment on commercial margin in the fourth quarter and it was lower than we have seen in previous quarters. This day.
Greece is due primarily to an adjustment to selling expenses recorded during the period.
Gina Konselman: During the first three quarters of 2020, only costs associated with in-person details were included as part of the Linz S-U.S. brand collaboration. Since we weren't able to execute as many in-person details due to COVID-19 restrictions, we saw a significant improvement in commercial contribution during those periods. However, we and Abby decided to adjust the selling expenses recorded in the fourth quarter to include costs incurred throughout the year related to virtual detailing and overhead due to the COVID-19 pandemic.
The first three quarters of 2020 on the costs associated with in person details were included as part of the Linzess U S brand collaborations.
We weren't able to execute as many in person details due to COVID-19 restrictions, we saw a significant improvement in commercial contribution during those periods.
We and Abbvie determined to adjusted selling expenses recorded in the fourth quarter to include costs encourage your route the year related to virtual detailing and overhead due to the COVID-19 pandemic.
Gina Konselman: As such, full year 2020 expenses are similar to our investments in 2019, and the adjustment simply reflects timing across the quarters. Looking ahead to 2021, we expect the commercial investment behind Linsesnest to be in line with our investment in 2020, and we continue to seek to expand margins through growing Linsesnest sales and disciplined investment behind the brand. Turning now to Ironwood's profitability and cash, for full year 2020, our profitability was driven by significantly higher LINZF net sales and lower operating expenses compared to 2019.
As such full year 2020 expenses are similar to our investments in 2019, and the adjustment simply reflects timing across the quarters.
Looking ahead to 2021.
The commercial investment behind Linzess.
In line with our investment in 2020, and we continue to seek to expand margins through growing linzess net sales and disciplined investment behind the brand.
Turning now to Io with profitability and cash from full year 2020, our profitability was driven by significantly higher linzess net sales and lower operating expenses compared to 2019.
Gina Konselman: Capital Net Income was $106 million, and Adjusted EBITDA was $161 million in 2020. Additionally, we generated $169 million in cash flow from operations, and ended the year with $363 million in cash and investments. We are pleased to provide our full year 2021 financial guidance, in which we expect U.S. Linzess net sales growth of 3-5%. We anticipate net sales growth to be driven by high single-digit percent growth in Linzess prescription demand, continuing its momentum for 2020, offset by mid-single-digit percent price erosion resulting from certain contract changes going into effect this year. We expect total revenue of $370 to $385 million, mainly driven by growth in U.S. collaboration revenues and inclusive of approximately $10 million that we anticipate from royalties, co-promotion, and other revenue.
GAAP net income was $106 million and adjusted EBITDA was $161 million in 2020. Additionally, we generated $169 million in cash flow from operations and ended the year with $363 million in cash and investments.
We're pleased to provide our full year 2021 financial guidance and which we expect.
U S. Linzess net sales growth of 3% to 5%, we anticipate net sales growth to be driven by high single digit percent growth in linzess prescription demand continuing its momentum from 2020 offset by mid single digit percent price erosion, resulting from certain contract changes going into effect this year.
We expect total revenue of 370 to 385 million, mainly driven by growth in U S collaboration revenue and inclusive of approximately $10 million that we anticipate from royalties co promotion and other revenue.
Gina Konselman: And lastly, we expect Adjusted EBITDA of greater than $190 million, with Adjusted EBITDA continuing to be a proxy for cash generation as it was in 2020. We believe our continued financial performance, our current cash balance, and the numerous steps taken to strengthen our financial profile position us well for 2021 and beyond. Delivering shareholder value is at the heart of successfully meeting our strategic priorities. This is a critical threshold for our investment decisions as we continue to invest thoughtfully in our business.
And lastly, we expect adjusted EBITDA of greater than $190 million with adjusted EBITDA continuing to be a proxy for cash generation as it was in 2020.
We believe our continued financial performance, our current cash balance and the numerous steps taken to strengthen our financial profile positions us well for 2021 and beyond.
Delivering shareholder value is at the heart of successfully meeting our strategic priorities. This is a critical threshold for our investment decisions as we continue to invest thoughtfully into our business.
Our capital allocation strategy is focused on maximizing linzess as Tom mentioned earlier, we can we expect to continue to invest in opportunities to drive further growth in Linzess. This is our highest priority and where we believe we can create the most value today.
Gina Konselman: Our capital allocation strategy is focused on maximizing Linzess. As Tom mentioned earlier, we expect to continue to invest in opportunities to drive further growth for Linzess. This is our highest priority and where we believe we can create the most value today. We are also leveraging our GI expertise in an effort to build an innovative pipeline by pursuing inorganic opportunities to diversify our GI portfolio. And lastly, we expect to continue to explore ways to deploy any excess free cash, including the potential for opportunistic share repurchases.
We are also leveraging our expertise in an effort to build an innovative pipeline by pursuing inorganic opportunities to diversify our Gi portfolio.
And lastly, we expect to continue to explore ways to deploy any excess free cash, including the potential for opportunistic share repurchases.
Before I turn it over to Mike I want to briefly highlight our renewed strategy to build our GI pipeline. We are focused on diseases that are largely managed by ge's prioritizing organic gi diseases, with well defined pathology and where we have an opportunity to accelerate development within shorter timelines.
Gina Konselman: Before I turn it over to Mike, I want to briefly highlight our renewed strategy to build our GI pipeline. We are focused on diseases that are largely managed by GEs, prioritizing organic GI diseases with well-defined pathology, and where we have an opportunity to accelerate development within shorter timelines. In addition, we are focused on innovative clinical assets that have already demonstrated preliminary efficacy and safety. And finally, we seek to maintain our ability to deliver profits in cash, as we have been doing. With that, I'll turn it over to Mike.
Addition, we are focused on innovative clinical assets that are already that already have demonstrated preliminary efficacy and safety.
And finally, we seek to maintain our ability to deliver profit and cash as we have been doing with that I'll turn it over to Mike.
Thanks, Dana I'll spend the last few minutes touching on the opportunities within the Gi space and our own Ironwood 3300 program at.
Michael Shetzline: Thanks, Gina. I'll spend the last few minutes touching on the opportunities within the GI space and our own Ironwood 3300 program. We've been steadfast in our efforts to advance treatments for GI diseases, and over the past two years... I'm sorry, with pest control diseases over the past two years.
We've been steadfast in our efforts to advance treatments for Gi diseases and over the past two years.
I'm, sorry, with pest Chad this is us over the past two years and the learnings we've gained give us confidence in our refresh strategy to also explore earlier stage development opportunities in serious organic diseases through our.
Michael Shetzline: And the learnings we've gained give us confidence in our fresh strategy to also explore earlier stage development opportunities in serious organic diseases. Through our recent assessment of the GI landscape, we identified over 100 GI assets across more than 25 disease areas that fit our new focus strategy. Through these efforts, we prioritized eight disease areas with high unmet need and where we believe we can have the most impact. These areas have seen a lot of progress in the understanding of the disease, the pathophysiology, and the potential targets.
Our recent assessment of the GI landscape, we've identified over 100 G I assets across more than 25 disease areas that fit our new focused strategy through these efforts, we prioritized eight disease areas with high unmet need and where we believe we can have the most impact these areas, where we've seen a lot of progress in the understanding of the disease the pet.
Physiology and the potential targets for example, two of the disease areas. We're looking at our pancreatitis and celiac disease pancreatitis is a significant medical need since on unfortunately today patients are still treated with IV fluids in pain management with no approved therapies targeting the underlying pathology of their disease.
Michael Shetzline: For example, two of the disease areas we're looking at are pancreatitis and celiac. Pancreatitis is a significant medical need since, unfortunately, today, patients are still treated with IV fluids and pain management, with no approved therapies targeting the underlying pathology of their disease. Celiac Disease, where the pathophysiology is very well defined, and the mechanism is well understood, and there are lots of opportunities to target new medications for suffering. However, for patients suffering from these diseases, there still is no medical therapy. While these are just two examples, clearly, there remains tremendous unmet need within GI.
Celiac disease, whereas the pathophysiology us very well defined and the mechanism is well understood and there are lots of opportunities to target new medications for suffering for patients suffering from these diseases is still has no medical therapies.
While these are just two examples clearly there remains tremendous unmet need within Gi.
In conjunction with this strategy. We're also advancing 3300 GCC agonist being developed for the potential treatment of visceral pain conditions, such as bladder pain syndrome in endometriosis 3300, us a staple and potent GCC agonists that provides a true opportunity to test the trust the cross talk hypothesis in humans.
Michael Shetzline: In conjunction with this strategy, we're also advancing 3300, a GCC agonist being developed for the potential treatment of visceral pain conditions such as bladder pain syndrome and endometriosis. 3300 is a stable and potent GCC agonist that provides a true opportunity to test the crosstalk hypothesis in humans. Crosstalk is a well-known biologic phenomenon where sensations or injury from one organ can cause altered sensations in a nearby organ because of overlapping nerve pathways.
Cross talk us a well known biologic phenomenon, where sensations or injury originating one networking can close altered sensation in the nearby Oregon because of overlapping nerve pathways. We believe this can result in enhanced pain perception affecting the bladder and reproductive organs in the pelvic area.
We have strong preclinical data in a number of visceral pain models, including vaginal and bladder pain that suggest the potential for GCC stimulation with 3300 to alleviate the visceral pain.
Michael Shetzline: We believe this can result in enhanced pain perception affecting the bladder and reproductive organs in the pelvic area. We have strong preclinical data in a number of visceral pain models, including vaginal and bladder pain, that suggest the potential for GCC stimulation with 3300 to alleviate visceral pain. We expect to submit an IND application with the U.S. FDA in the second half of 2021, putting us on track, if approved, to initiate a phase one clinical trial with 3300 in early 2022. We expect this trial will help us determine the asset's potential for further clinical development. I'll now turn it over to Mark for some closing comments before Q&A.
We expect to submit an IND application with the U S. FDA in the second half of 2021, putting us on track if approved to initiate a phase one clinical trial with 3300 in early 2022, we expect this trial will help us determine the assets potential for further clinical development.
I'll now turn it over to Mark for some closing comments before Q&A.
Mark.
Sorry, I was on mute.
Apologies everyone. So thanks, Mike for catching.
Catching that and thanks for the update on 3300, it's certainly an exciting opportunity for ironwood.
As you've heard from the team. This morning, Ironwood as a significant opportunity ahead to advance our vision of becoming the leading Gi focused health care company in the us and I want to thank the entire ironwood team a tremendous effort in putting patients at the forefront of everything we do.
Thanks again for joining us. This morning, operator, we can now open the line for Q&A.
Mark Mallon: Sorry, I was on mute. Apologies, everyone.
Certainly at this time, we'd like to take any questions. You may have for us today to ask a question. Please press star one on your telephone keypad. Our first question is from Martin Auster with Credit Suisse. Your line is open.
Mark Mallon: So thanks, Mike, for catching that. And thanks for the update on 3300. It's certainly an exciting opportunity for Ironwood. As you've heard from the team this morning, Ironwood has a significant opportunity ahead to advance our vision of becoming the leading GI-focused healthcare company in the U.S. And I want to thank the entire Ironwood team for a tremendous effort in putting patients at the forefront of everything we do. Thanks again for joining us this morning, Operator. Megan, we can now open the line for Q&A.
Hi, Martin Hi, Evan.
Hi, everyone. This is actually mark on on for Marty.
Okay, great. Thanks for taking my question.
I guess two from me I was wondering if you might be able to provide a little more clarity on your 'twenty 'twenty one guidance.
And it looks like revenue guidance is roughly flat year over year, while you expect Linzess U S. Net sales to grow 3% to 5% is that discrepancy do too.
Operator: Certainly, at this time, we would like to take any questions you may have for us today. To ask a question, please press star 1 on your telephone keypad. Our first question is from Martin Oster with Credit Suisse. Your line is open.
Higher Abbvie ironwood commercial costs or is there something else, we need to consider and I guess are there any additional details you could provide on how we should think about the b. These costs moving forward and then the second question I have relates to I believe generic amitiza entered the market.
Unknown Speaker: Hi Martin. Hi everyone. Hi everyone. This is actually Mark for Marty.
Unknown Speaker: But yeah, thanks for taking my question. I guess, too, for me, I was wondering if you might be able to provide a little more clarity on your 2021 guidance. It looks like revenue guidance is roughly flat year-over-year, while you expect Winzest U.S. net sales to grow 3-5%. Is that discrepancy due to higher Avdi Ironwood commercial costs, or is there something else we need to consider? And I wonder, are there any additional details you could provide on how we should think about these costs moving forward?
I'm just curious if you could kind of speak to what impact do you see them kind of entered the market and has it resulted in any pressure on linzess pricing and if so how does that impact on pricing compare to your expectations coming into the year.
So thanks for the questions Mark Gino can you take the first one on Tom maybe you can pick up the question on Amitiza.
Sure sure I'm happy to thank Mark.
If I understood. It correctly I think you're asking about the decline in revenue. Despite the fact that we're guiding that you're kind of ironwood revenue. Despite the fact that we're guiding.
Unknown Speaker: And then the second question I have relates to, I believe Generic Anitiza entered the market the other month. I'm just curious if you could kind of speak to what impact you have seen since it entered the market, and has it resulted in any pressure on Winzest pricing? And if so, how has that affected pricing compared to your expectations coming into the year?
Guiding to increase the Linzess revenue.
So maybe just a quick reminder, that the ironwood revenue includes a bit more than the collaboration revenue that we recognized from the Linzess collaboration with Abbvie.
Unknown Speaker: So thanks for the questions, Mark. Gina, can you take the first one, and Tom, maybe you can pick up the question on amethyst? Sure.
The other revenue for instance in 2020 included a small amount of API sales. We had just a wrap up of the API sales to Astellas and Astrazeneca in 2020.
Gina Konselman: I'm happy to. Thanks, Mark. So, if I understand you correctly, I think you're asking about the decline in revenue, despite the fact that we're, the decline in Ironwood revenue, despite the fact that we're guiding to increase Glenzess revenue. So, maybe just a quick reminder that the Ironwood revenue includes a bit more than the collaboration revenue that we recognize from Lindsay's collaboration with Abby. Other revenue, for instance, in 2020, included a small amount of API sales.
From the restructured arrangements in 2019, we actually had significant revenue in 2019 related to those agreements and then a small amount in 2020, that's that's done that with US at this point, it's wrapped up and we're not expecting revenue to continue in 2020. So that's one part of it.
And the other part of it is related to the 10 million that I called out as part of the guidance. The 10 million is included in the overall ironwood revenue and it's actually down a bit year over year are expected to be in 'twenty 'twenty, one versus 'twenty 'twenty.
Gina Konselman: We had just a wrap-up of the API sales to Astellas and AstraZeneca in 2020. From the restructured arrangements in 2019, we actually had significant revenue from those agreements in 2019, and then a small amount in 2020. That's done now.
And that is in part due to the restructured on island agreement that you mentioned as well in.
In 2020, we received fixed payments plus royalties and then in 2021 going forward, we are expecting to only receive royalties.
Gina Konselman: At this point, it's wrapped up, and we're not expecting revenue to continue in 2020. So, that's one part of it. And the other part of it is related to the $10 million that I called out as part of the guidance. The $10 million is included in the overall Ironwood revenue, and it's actually down a bit year over year, or expected to be, in 2021 versus 2020. And that is in part due to the restructured alnilam agreement that we mentioned as well. In 2020, we received fixed payments plus royalties, and then in 2021, and going forward, we are expecting
Okay.
Yeah.
Got it that Martin on many fronts.
Okay.
Okay.
Hey, Mark can you take them yet.
Go ahead, yes, Yep Yep Yep Yep go ahead, so yeah, you're absolutely right generic amitiza as a single source generic is now available.
I think as far as its impact.
Its been a its market share has been eroding overtime and keep in mind.
Was the market leader when we entered the market and obviously with really within the first 18 months, we were able to actually.
Gina Konselman: Mark, would you like me to take the M&T question?
I'll catch it and actually surpass it with regard to market share.
Thomas A. McCourt: Yeah, yes, yeah, go ahead.
And these it's important to remember these are very different molecules and the overall efficacy and tolerability looks quite different than the the Pea said, what's been driving linzess growth over time has been the high level treatment.
Thomas A. McCourt: So yeah, you're absolutely right. Generic Ametiza as a single source generic is now available. I think as far as its impact, you know, its market share has been eroding over time. Keep in mind, you know, it was the market leader when we entered the market, and obviously, within the first 18 months, we were able to actually catch it and actually surpass it with regard to market share. And, and this, it's important to remember, these are very different molecules.
Satisfaction, both on the part of the or the part of the physician and the patient as far as pricing pressure I think it's important to remember we've been playing in a generic market since relaunch with generic peg and so there's been multiple generic options available to patients and I think it also is important to note that.
Thomas A. McCourt: And the overall efficacy and tolerability look quite different. And, you know, the piece that has been driving Linzess growth over time has been the high level of treatment satisfaction, both on the part of the payer or on the part of the physician and the patient. As far as you know, pricing pressure, you know, I think it's important to remember that we've been playing in a generic market since we launched with generic peg. And so there have been multiple generic options available to patients. And I think it also is important to note that, you know, the vast majority of patients still continue to be treated by OTCs, even though they're not satisfied.
The far majority of patients still continued to be treated by OTC us, even though they're not satisfied and that's really where our source of business comes from.
Hey, we all anticipate further pricing pressure from from a variety of areas, including excluding the government, but you know us.
As we've mentioned before this year, we guided to stable price, which we are which we realized next year. You know we did share up a couple of contracts. So there will be some some price erosion that Gina had mentioned, but I think the important thing. The most important thing is how healthy the brand is and you know when you look at its demand.
Thomas A. McCourt: And that's really where our source of business comes from. Hey, we all anticipate further pricing pressure from a variety of areas, you know, including, including the government. But, you know, as we've mentioned before, this year, we guided to a stable price, which we realized. Next year, you know, we did secure a couple of contracts. So there will be some price erosion as Gina mentioned, but I think the most important thing is how healthy the brand is.
Growth, it's ongoing demand growth and what we're seeing certainly as we finished last year and we're heading into this year I think we're very confident in the ongoing viability of the brand in the marketplace.
Great. Thanks for taking my question.
Your next question is from Eric Joseph with JP Morgan Your line is open.
Hi, Eric.
Hi, good morning, Thanks for taking the questions.
I guess just one following up on <unk>.
Well really I was just thinking through potential transactions in European GIC.
First of all are you might be able to offer on that.
Thomas A. McCourt: And, you know, when you look at its demand growth, its ongoing demand growth, and what we're seeing, certainly as we finished last year and we're heading into this year, I think we're very confident in the ongoing viability of the brand in the market.
The age of assets that you're looking at it is fair to exercise and weather.
Whether there is any potential impact.
Executing on that protect us.
Transactions from the change in leadership.
Thanks.
Eric could you repeat that question.
I don't know about the others, but it was it broke up a little bit and it was hard to hear.
Thomas A. McCourt: Great. Thanks for taking my questions.
Yeah.
Operator: Your next question is from Eric Joseph with J.P. Morgan. Your line is open.
Stuart can you hear me now sorry about this that's better Yep, that's better thing, but okay. Yeah.
Unknown Speaker: Hi Eric. Good morning. Thanks for taking the questions. I guess just one follow-up question, well, really, as you're thinking through potential transactions in the organic GI space, I'm just wondering if there's any further color you might be able to offer in terms of the age of assets that you're looking at in terms of transaction size and whether there's any potential impact on executing a potential transaction from the change in leadership.
Just wondering if there's any further color on potential transactions that youre thinking about in the organic Gi space, particularly around skies.
<unk>.
The deal and speed.
Of development in a target asset and whether the change in leadership might have any impact on timing.
So Tom why don't you take sort of how you're seeing the sort of organic opportunities.
Unknown Speaker: Eric, could you repeat that question? I don't know about the others, but it broke up a little bit, and it was hard to hear.
In G I.
Uh huh.
It's you know suddenly jump in with any thoughts you have us well.
And my question about the strategic direction that then.
Unknown Speaker: Stewart, can you hear me now? Sorry about that. That's better. Yep, that's a better thing.
Go ahead, Tom sure yes.
Yes, it's mark.
Both Mark and Gina mentioned.
Unknown Speaker: But OK, yeah. Just wondering if there's any further color on potential transactions that you're thinking about in the organic GI space, particularly around size and the size of a deal and speed of development in a target asset, and whether the change in leadership might have any impact on timing.
We're really focusing on these series organic diseases, we've identified a number of assets as Mike mentioned in most of these are held by fairly small companies with limited development expertise and essentially no commercial expertise.
Thomas A. McCourt: Thanks. So, Tom, why don't you take sort of how you're seeing the sort of organic opportunities in GI and, you know, Gina, certainly jump in with any thoughts you have as well. And Tom, you can also address the question about strategic...
So obviously, where we're really focusing on particularly assets that we can leverage our internal expertise to accelerate time to market. So we're really looking for an asset that where there's clear incremental value to be created.
Unknown Speaker: Strategic Directions
Thomas A. McCourt: Go ahead, Tom. Sure.
So we have a very high bar, we've looked at a number of assets to date.
Thomas A. McCourt: As both Mark and Gina mentioned, we're really focusing on these serious organic diseases. We've identified a number of assets, as Mike mentioned, and most of these are held by fairly small companies with limited development expertise and essentially no commercial expertise. So obviously, we're really focusing on assets that we can leverage our internal expertise to accelerate time to market. So we're really looking for an asset where there's clear incremental value to be created.
But we will continue to strive to make sure that you know it.
It is the right next move for us.
As far as you know, where we're going on I mean, obviously it just builds.
It is very complementary to linzess with regard to the commercial model, but obviously, Mike and his team bring very deep scientific and medical expertise.
To make a good choice and then obviously working with with gene US corporate development team to make sure we get we get the right deal done.
Thomas A. McCourt: So we have a very high bar; we've looked at a number of assets to date, but we will continue to strive to make sure that it is the right next move for us as far as where we're going. I mean, obviously, it just builds, and it's very complementary to Linzess with regard to the commercial model, but obviously, Mike and his team bring very deep scientific and medical expertise to make a good choice, and then obviously, working with Gina's corporate development team to make sure we get the right deal done.
Sure. Thanks, Tom I mean, I I might just continue to add on.
I don't expect it to impact the leadership change to impact our ability to be able to continue to execute hopefully on a transaction. This year one I just had.
A lot of confidence in Tom, especially working with him over these last seven.
[noise] years, plus in addition to the fact, you know that Julie has stepped up and is giving us additional time.
Sure. So I think the combination has put us on in great hands. I would also just remind you that we just talked a little bit on the last question about that small amount of revenue and the fluctuations on API and royalties for instance on milestone payments, but the core business is strong so the collaboration revenue related to Linzess.
Thomas A. McCourt: Sure, thanks, Tom. I mean, I might just continue to add that I don't expect the leadership change to impact our ability to continue to execute, hopefully, on transactions this year. One, I just have, you know, a lot of confidence in Tom, especially working with him over these last seven years plus, in addition to the fact that Julie has stepped up and is giving us additional time as Executive Chair. So I think the combination has put us in great hands.
Is incredibly strong and growing year over year and without fundamental for growing revenue in our core business and cash generation. It just positions us.
And in a great place to be able to have the financial capacity to be able to not only afford the upfront related to a development stage asset, but also gives us the ability to continue to fund it through development.
Gina Konselman: I would also just remind you that, you know, we talked a little bit on the last question about, you know, that small amount of revenue and the fluctuations, you know, in API and royalties, for instance, are milestone payments. But the core business is strong. So the collaboration revenue related to Linzess is incredibly strong and growing year over year. And with that fundamental for growing revenue from our core business and cash generation, it just positions us in a great place to be able to have the financial capacity to be able to not only afford the upfront related to a development stage asset but also gives us the ability to continue to fund it through development and gives us the P&L space to maintain profitability at the same time.
That's the P&L space to maintain profitability at the same time.
Eric I just wanted to add one more thought about sort of the readiness of the team to continue to execute I I don't think I've seen ironwood are more ready to keep executing at a high level.
I've been but whether you're talking about driving linzess growth.
We've got a fantastic commercial team that Tom has built its strength and actually over the last year, it's executing extremely well they've got new ideas. They are collaborating well I believe that's being driven in the business development standpoint, we've got a fully aligned board with a fully aligned management team.
The number of strength and the team we've got a clear set of targets that Mike and Tom have talked about.
Mark Mallon: Eric, I just want to add one more thought about sort of the readiness of the team to continue to execute. I don't think I've seen Ironwood more ready to keep executing at a high level in the time I've been here.
We've got the resources to focus on the people and the alignment to move fast on that and the third is that look you clearly saw the ability to sort of generate profit and cash.
Mark Mallon: But whether you're talking about driving Linfez growth or the team, we've got a fantastic commercial team that Thomas built and strengthened, actually, over the last year. It's executing extremely well. They've got new ideas. They're collaborating well. That's being driven.
In 2020, and that sort of execution and delivery focus is as high as ever. So the team is really ready to keep executing I don't think theyre going to Miss a beat they might even step up the beach.
Mark Mallon: From a business development standpoint, we've got a fully aligned board with a fully aligned management team, and a number of strengths in the team. We've got a clear set of targets that Mike and Tom have talked about, and we've got the resources to focus on the people and the alignment to move fast on that. And the third is that, look, you clearly saw the ability to sort of generate profit and cash in 2020, and that sort of execution and delivery focus is as high as ever.
[laughter].
That's great. Thanks for all the color there appreciate the I appreciate you taking my questions.
Our final question is from Bruce <unk> with Cowen Your line is open.
Good morning.
Hi, Bruce.
Yep.
Yeah.
Can you talk about the trend in gross to net discounting on the outlook for that over the next several years.
Sure.
I'll ask Gina to maybe share her thoughts on that and Tom may want to add some additional color to them I'm sure go.
Mark Mallon: So the team's really ready to keep executing. I don't think they're going to miss a beat. They might even step up the beat.
Sure Hi, Boris Yes, Im happy too, especially since 2020 was.
Thomas A. McCourt: That's great. Thanks for all the color there. I appreciate you taking the questions. Apologies for the delay.
It's certainly a great year and when we were quite pleased with you know Tom mentioned, we originally guided to net sales price for the year, we actually did recognize price if you're if you think about you know the year over year growth in net sales. It wasn't just due to the strong demand. It was also a price depreciation as well that price appreciation was re.
Operator: Our final question is from Boris Peaker with Cohen. Your line is open.
Boris Peaker: Good morning. How are you? Can you talk about the trend in gross-to-net discounting and the outlook for that over the next several years?
Gina Konselman: I'll ask Gina to maybe share her thoughts on that, and Tom may want to add some additional color to it. Go ahead, Gina.
Due to a thoughtful plan design changes that we implemented at the beginning of the year. So at the beginning of 2020.
Gina Konselman: Sure. Hi Boris. Yes, I'm happy to, especially since 2020 was, you know, it's our.
Where for instance, we were no longer exclusive on certain plans.
Fortunate for US we didn't see a dip in demand because of those changes. We also had you know and that was the bulk of the change. We also had some small you know I would say unfavorable small and favorable adjustments in 2019 related to gross to net.
Gina Konselman: You know, it's certainly been a great year and one we have been.
Gina Konselman: And that was the bulk of the change. We also had some small, I would say unfavorable, small unfavorable adjustments in 2019 related to gross net, just typical adjustments from time to time. But because they weren't repeated in 2020, it did add to some price depreciation for the year. So then looking forward to 2021, we've obviously guided to a mid-single-digit price erosion. We continue to see pricing pressure, mainly due to some competitive pressures in addition to the fact that, you know, Amorys is going generic.
Typical adjustments from time to time, but because they weren't repeated in 2020 as it did at to some price appreciation for the year. So then looking forward to 'twenty and 'twenty one we've obviously we've guided to.
Mid single digit price erosion for the year that is also due to the contract changes that we are aware of.
We continue to see pricing pressure, mainly due to some competitive pressures. In addition to the fact that you know amitiza is going generic.
Gina Konselman: But you know, our strategy for demand growth hasn't changed. We continue to invest fully behind the brand, believe that it will continue for many years to come through demand. And at the same time, we want to focus on broad payer access, you know, with an affordable copay, which for most of our patients is $30 or less. So in order to maintain that broad access, there are times year over year when we need to make changes to make sure that our patients can still access Linzess at an affordable price. So that's the change this year.
But you know our strategy for demand growth hasn't changed we continue to invest behind the brands and believe that it will continue for many years to come true demand.
At the same time, we want to focus on broad.
Payer access with us.
On an affordable co pay which is from most of our patients is $30 or less so in order to maintain that broad access there are times year over year that we need to make changes.
To make sure that our patients can still.
Access linzess at an affordable price and so that's that's the change this year.
Gina Konselman: You know, you've heard me say this before, and I wouldn't expect price appreciation as the norm. I'm pleased with 2020, but I wouldn't expect it going forward. I do expect, you know, continued pressure, even pressure throughout 2021. We've guided to the mid single-digit price erosion, but you know, payers don't always wait till the contracts expire to knock on the door. So we'll just continue to monitor it and execute according to plan, right, focused on demand growth and broad payer access at the same time.
On.
You have heard me say this before and that I wouldn't expect price appreciation as the norm I am pleasantly.
Pleased with 2020, but I wouldn't expect it going forward I do expect.
Continued pressure even pressured throughout 2021, we've guided to the mid single digit price erosion, but you know payers don't always wait until the contracts expire to knock on the door. So on bill just continuing to monitor it and and execute according to plan right focused on demand growth and broad payer access at the same time.
Thomas A. McCourt: Great
Great.
Thomas A. McCourt: Go ahead. Boris, just one last thought, and this was really kind of an awakening for us this year. As you know, the far majority of our major plans were, you know, preferred unrestricted, meaning, you know, we're one of one. And we have made, we made a couple of decisions last year to, you know, forego, you know, the exclusivity and move to, you know, basically, one of two or one or even a non-preferred position.
Go ahead for US just want one last thought and this was really kind of on an.
Awakening for US this year as you know the far majority of our major plants were preferred unrestricted meaning we're one of one.
And we have made us we made a couple of decisions last year or two you know forego the exclusivity and move to.
Basically you know one or two or one or even a non preferred position yet we continue in those plans we continued to drive growth.
Thomas A. McCourt: Yet we continue to, in those plans, we continue to drive growth, like, you know, double-digit growth. So, you know, I think it offers us some flexibility knowing where we are with these plans as far as other options that maybe we wouldn't normally have. And I think it just speaks to how strong the brand is with regard to, you know, the preference that positions appear. But I completely agree with Gina as we move forward. I think you have to anticipate some price erosion year on year, which is the reason why we have to continue to drive demand.
Double digit growth.
No.
I think it offers us some flexibility knowing where we are with these plans as far as other options that maybe we wouldn't have normally had and I think it just speaks to how strong the brand is.
With regard to the preference that physicians it appears but I completely agree with.
As we move forward.
Thank you have to anticipate.
Some price erosion.
We're on your M, which is the reason why we have to continue to drive demand.
Thomas A. McCourt: That's very helpful. My second question is, I think not too long ago, we were talking about a previously prescription option becoming over-the-counter and how that was contributing to your price growth. Is that still out there? Is that still helping prescription growth? And can you provide any updates on that also?
Got it okay, that's very helpful.
My second question is I think not too long ago, we were talking about previously prescription.
Option, becoming over the counter.
Sure and how that was contributing to your price growth can you kind of a is that still out there that's still helping.
Unknown Speaker: Sure. So I think...
Unknown Speaker: Unknown Speaker I think we're talking. I think we're talking. I think we're talking.
Prescription growth and maybe can you provide any updates on that altogether.
Unknown Speaker: Yeah, I think, specifically, you're talking about the removal of generic PEG from the prescription market. Is that correct?
Sure. So I think I'll have Tom talk.
Yeah, I think specifically you're talking about the removal of generic peg from the prescription market does that yeah. Yeah. Yeah. So theres no question at the end of last year, we saw.
Unknown Speaker: Yeah.
Thomas A. McCourt: Yeah, so there's no question at the end of last year, we saw not last year, but the year before 19, we saw this, you know, removal, and we saw a bolus and an influx of prescriptions. But I think the big thing that we saw was the dynamic change in the market, because you've just eliminated the market leader is only available by prescription. So if they're going to choose a prescription drug, we just eliminate one option.
Last year. The 419, we saw this removal and we saw a bolus in influx of prescriptions, but I think the big thing that we saw with the dynamic change in the market because you've just eliminated the market leader.
It's available by prescription so if theyre going to choose a prescription drug we just eliminated an option and obviously that had a significant impact in people's choice to Linzess.
Thomas A. McCourt: And obviously, that had a significant impact on people's choice to use Linzess. Because, you know, when patients are frustrated with OTCs, the last thing they want is another OTC walking out the door. So, you know, not only does Linzess have a great clinical performance profile and level of satisfaction, but now it's one of actually fewer options, with the exception of the recent new entrance into the market, which really is not differentiated at all.
Because you know there you know when patients are frustrated with OTC. The last thing they want us another OTC walking out the door. So you know not only us linzess have a great clinical performance profile on level of satisfaction, but but now it's one of actually fewer options.
With the exception of the recent new entrants into the market.
It's really not differentiated at all.
Thomas A. McCourt: And, you know, I have struggled to gain share, as you know. So, you know, we've continued to see Linzess. Ironwood Pharmaceuticals Inc., So I think it's this dynamic change of choice that has also helped fuel the growth of Linzess.
No I have struggled to gain share as you know so you know we've continued to see linzess.
Thrive the far majority of the business is coming directly from the OTC market, which is where it needs to come from.
And we're continuing to increase our overall market share.
In the marketplace. So I think I think it's this dynamic change of choice, which has also helped fuel the growth of Linzess.
Got it okay, great. Thanks for the detailed answers to my questions.
Thomas A. McCourt: Okay, well great, thanks for the detailed answers to my questions.
Sure.
Our final question is from Jacob Hughes with Wells Fargo Securities. Your line is open.
Operator: Our final question is from Jacob Hughes with Wells Fargo Securities. Your line is open.
Okay.
Hey, guys good morning.
Jacob William Hughes: Hey, guys. Good morning. Good morning.
Good morning, good morning.
Inc.
Unknown Speaker: Good morning.
Unknown Speaker: This is a follow-up question on your guidance. If I just, on your revenue guidance, if I just take kind of the midpoint of your revenue guidance,
A follow up question on your guidance.
But I just on.
On your revenue guys, let us take kind of the midpoint of your revenue guidance and.
Unknown Speaker: Take out the $10 million that you mentioned for other purposes, and it kind of implies collaboration revenues flattish or up modestly year over year.
Take out the 10 million that you mentioned for other where it kind of implies.
Collaboration revenues flat us are up modestly year over year.
Unknown Speaker: Irving A, and I was just wondering if that is the point to kind of
And I was just wondering is that does that point to kind of already a reduction on the commercial margin or.
Unknown Speaker: A reduction on the...
Unknown Speaker: Transcripts provided by Transcription Outsourcing, LLC.
Higher investment or you know what what's the.
Unknown Speaker: Unknown Speaker Hi.
Unknown Speaker: or, you know, what's the explanation there? Thanks.
The explanation there.
Peter you want to take that.
Gina Konselman: Gina, do you want to take that?
Sure of course, one you know we do expect to collaborate linzess revenue to continue to grow over time. We also expect margin to continue to expand over time, just through growing revenue thoughtful investment.
Gina Konselman: Sure, of course. One thing we do expect limb test revenues to continue to grow over time. We also expect margin to continue to expand over time just through growing revenue and thoughtful investments. The investments have been, you know; we've been investing fully behind the brand. If you see, if you take a look at the numbers this year, I think they're about ten million dollars here, you know, last year over year. So I think, you know, we can still fully invest in the brand and make more thoughtful investments with a higher ROI.
On the investments have been you know we've been investing fully behind the brands. If you see if you take a look at the numbers. This year I think there are about $10 million here you know last year over year. So I think we can still fully invest behind the brand and.
Make more thoughtful investments with a higher our ally as well.
Gina Konselman: as well. I will go back to thinking about it as we guide it to growing Lindsay sales of 3 to 5% for the year.
I would go back to thinking about it as we guided to on growing linzess sales of 3% to 5% for the year roughly same level on investment and just remind you that obviously, we get 50% of that increase right.
Unknown Speaker: Transcripts provided by Transcription Outsourcing, LLC.
Unknown Speaker: Okay. All right. Thank you.
Operator: All right, hopefully that's helpful.
Okay.
Okay alright, thank you.
Hopefully that's helpful.
We have no further questions at this time I'll turn the call back to presenters for closing remarks.
Thomas A. McCourt: We have no further questions at this time. I turn the call back to the presenters for closing remarks.
Tom.
Mark Mallon: Tom, and the team again, I just want to thank all of you for your great work in 2020, and I want to wish you the best of luck, Tom, as you move into the role of interim CEO, and, of course, the whole team to continue their great work and success. As I said in my remarks, I have full confidence in everything moving forward. And Tom, I'll give you a chance to have the last word as you're going to be moving into the interim CEO role. Thanks for all your support over the last few years.
I just want and the team again I just want to thank all of you for great work in 2020, and I want to wish you. The best of luck, Tom as you move into the interim CFO and <unk>.
Of course, the whole team for the continued their great work and success.
As I said in my remarks on full confidence of everything moving forward and Tom If I will give you a chance to have the last word as youre going to be moving.
Moving into the interim CEO role thanks for all your support over the last two years.
Thomas A. McCourt: for the last two years. Mark, I know I speak on behalf of the board and certainly the management team. It's been a terrific experience with you, and we've learned a lot from your leadership. I mean, think about what we've achieved over the last couple of years in really right-sizing the company, getting it focused, making it more profitable, and I think you're leaving it in our hands in very good shape. As the interim CEO coming in, I couldn't be more excited about the opportunity here. I think everybody knows I'm a big believer in Linzus.
Sure Mark I know I speak on behalf of the board and certainly the management team you know it's been a terrific.
Experience with you and we've learned a lot you know Premier leadership I mean, you think about what we've achieved over the last couple of years and really right sizing the company getting it focus making them more profitable and I think you're you're leaving it in our hands and in very good shape.
You know as the interim CEO coming in and I couldn't be more excited about the opportunity here.
I think everybody knows I'm, a big believer in lids US I think we have a long ways to go with it particularly with a healthy healthy.
Thomas A. McCourt: I think we have a long way to go with it, particularly with a healthy life cycle, and we have a great partner. I mean, AbbVie has turned out to be a tremendous partner and a new catalyst to help us think even broader about the brand, both in terms of the life cycle but also some of the innovation in the commercial space, which we've invested in virtual selling in this hybrid model. The telemedicine area is very exciting, particularly in this category for this brand, and certainly we have a very strong expert team to move forward. So thank you for everything, and I look forward to the upcoming year and making a very good decision with the board on the future CEO. Thank you.
The healthy lifecycle, and we have a great partner I mean, abbvie has turned out to be a tremendous partner and a new catalyst to help us think even broader about the brand both in terms of lifecycle, but also.
Some of the innovation in the market in the commercial space, which you know we've invested in and virtual selling and this hybrid model to Tele medicine area is very exciting, particularly in this category for this brand and certainly we have a very strong <unk>.
Expert team to us to move forward so.
Thank you for everything and I look forward to the upcoming year and making a very good decision with the board on.
Mark Mallon: Thanks Operator, that's it for us.
On the future CEO.
CEO.
Operator: This concludes today's conference call. You may now disconnect.
Thank you.
Thanks, operator, that's it for US from this concludes today's conference call you may now disconnect.
Unknown Speaker: BF-WATCH TV 2021
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