Q1 2022 Ironwood Pharmaceuticals Inc Earnings Call
Operator: Please wait.
Please wait the conference will begin shortly.
Operator: The conference will begin shortly.
[music].
Operator: Good morning.
Sravan Emany: Then I'll discuss our capital allocation strategy.
Tom Mccourt: But we are initiating those discussions, and things are going well, and we can give you more details as they materialize.
Operator: The conference will begin shortly.
Good morning, My name is Joseph and I'll be your conference operator today.
Sravan Emany: Finally, I'll review our 2022 guidance.
At this time I would like to welcome everyone to the Ironwood Pharmaceuticals first quarter 2022 investor update call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there'll be a question and answer session.
If you'd like to ask a question at this time simply press the star followed by the number one on your telephone keypad.
I would like to withdraw your question.
The Star then the number one on your telephone keypad.
Joseph: My name is Joseph and I will be your conference operator today.
Sravan Emany: Please refer to our press release for our detailed financial information.
Tom Mccourt: Mike, maybe you can take – hi, this is Tom.
Thank you Matt.
Matt Roche director of Investor Relations you May begin your conference.
Joseph: At this time, I would like to welcome everyone to the Ironwood Pharmaceuticals First Quarter 2022 Investor Update Call.
Sravan Emany: I'll start on slide 13.
Tom Mccourt: Maybe you can take a minute and talk a little bit about the whole issue of the box warning and why that's kind of a key step as we move forward.
Thank you Joseph.
And thanks for joining us for our first quarter 2022 investor update.
The release issued this morning.
Web site.
Today's call and accompanying slides include forward looking statements.
Such statements involve risks and uncertainties and may cause actual results to differ materially.
These statements and risk factors are available on the current safe Harbor statement slide.
Under the heading risk factors.
Annual report on Form 10-K.
December 31 2021.
In our future SEC filings.
All forward looking statements.
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 not a substitute for or superior to GAAP measures.
To the extent applicable please refer to the tables at the end of our press release.
Conciliation of these measures to the most directly comparable GAAP measures.
Sravan Emany: Winsest U.S. net sales were $232 million in the first quarter of 2022, an 8% increase, compared to the first quarter of 2021. Net sales growth was driven by continued strong prescription demand, partly offset by net, price erosion.
During today's call Tom Mccourt, our CEO will review our strategic priorities.
As an update on the commercial performance of Linzess.
Mike <unk>, our Chief Medical Officer will discuss our pipeline and driven by our Chief Financial Officer will review, our financial results and guidance.
Today's webcast includes slides for those of you dialing in is going to the events section of our website to access the accompanying slides separately.
Joseph: All lines have been placed on mute to prevent any background noise.
With that I will turn the call with Tom Thanks.
Joseph: After the speaker's remarks, there will be a question and answer session.
Sravan Emany: In Q1, we experienced more modest net price erosion than anticipated due to a one-time, gross-to-net benefit. From time to time, we may have one-time adjustments related to contracts or estimates as a normal, part of the gross-to-net process that can have a quarterly impact, but that does not alter our full-year expectations.
Tom Mccourt: The team's made tremendous progress already, but kind of what is the path forward to get that result?
Thanks, Matt Good morning, everyone. Thanks for joining us today.
Joseph: If you'd like to ask a question at this time, simply press the star followed by the number one on your telephone keypad.
Sravan Emany: Therefore, for the full year, we continue to expect Winsest U.S. net sales growth in, the low-significant-to-net period, driven by U.S.-Linz-esque collaboration revenues of $94 million.
Tom Mccourt: Yeah, certainly.
I'm delighted to announce our Q1 results this morning.
Sravan Emany: Turning to income tax expense, during the first quarter of 2022, Ironwood recorded $17.7, million of income tax expense, the majority of which was non-cash, as Ironwood continues to use net operating losses to offset taxable income for federal purposes and in many states. As a reminder, Ironwood has significant net operating loss carry-forwards from prior years, and therefore the majority of our income taxes will be a non-cash expense as we use our net operating losses.
Tom Mccourt: So obviously, again, as I mentioned, the safety and tolerability is a key element for the OTC approach.
Painting last year's momentum we're off to a tremendous start this year as demonstrated by the continued strong linzess performance initiation of IW 3300, and CMT one O four clinical studies.
Another quarter of delivering profitability and positive cash flow from operations.
Sravan Emany: Moving to Ironwood's profitability, gap net income was $39 million and adjusted EBITDA, was $58 million in the first quarter of 2022.
Tom Mccourt: And as you know, last year, we had a great milestone event with the agency in the removal, of a large majority of what was the warning and contraindication present on the prior Linzess label.
We remain committed to advancing the treatment of Gi diseases, and redefining standard of care for Gi patients.
We are focused on driving value for our shareholders by bringing important medicines to our patients.
Believe the progress we've made across the organization in the first quarter demonstrates the steps we're taking to become.
<unk>, the leading GI health care company in the U S.
Joseph: If you'd like to withdraw your question, press the star and then the number one on your telephone keypad.
Sravan Emany: Before moving on, I'd like to point out that beginning in the first quarter of 2022, we adopted ASU 2020-06, the new convertible debt accounting standard, which has the effect of decreasing our non-cash interest expense and increasing the number of shares used in the computation of our diluted earnings per share. It's important to note that the adoption of this accounting standard does not affect, cash flows or adjusted EBITDA. Please refer to our public filings for additional information on this change.
Tom Mccourt: So the prior label actually included all pediatric population subjects 18 and under. Through the last years of our post-marketing studies in pediatric patients, we generated, a significant amount of data in pediatric patients, primarily along the ages of age 2 to 18.
Now I'll begin with a brief overview of our strategic priorities on slide six.
Joseph: Thank you.
Tom Mccourt: As you know, we've done a study in IBS patients from 7 to 17.
Our strategy starts with maximizing linzess.
To be excited by the performance of Linzess, which has delivered another quarter of double digit.
Double digit demand growth.
And we believe there's more opportunity ahead.
Tom Mccourt: We've done a study in functional, constipation in patients 6 to 17.
Beyond Linzess, we're making progress on our clinical trials and remain on track with previously shared data readout timing.
Tom Mccourt: And we've also recently completed a functional constipation study in 2- to 5-year-olds.
We're focused on strengthening our pipeline.
Through our in license and acquisition of Gi innovative Gi assets, which we believe will position our company for continued growth and finally, we continue to deliver sustained profits and cash flow. We ended the first quarter with approximately $593 million in cash and cash equivalents on the balance sheet and we continue to execute.
Sravan Emany: Now, moving to cash and capital allocation priorities, in the first quarter, we generated, $64 million in cash flow from operations and ended the quarter with $593 million in cash and cash equivalents. We continue to execute on our forward authorized share repurchase program of up to $150 million, that runs through the end of this year. From March 31st, we have repurchased $118 million of shares and we've repurchased an, additional $16 million of shares through April 30th of 2022.
On our board authorized share repurchase program.
Sravan Emany: Lastly, we have neglected to settle the $121 million 2022 convertible note that matures, on June 15th in cash.
Through the end of March we have repurchased 180, <unk> hundred $18 million in our common stock.
We see these achievements in the first quarter as important progress that we believe will support continued growth and success of our company.
Joseph: Matt Roache, Director of Investor Relations, you may begin your conference.
Sravan Emany: With a strong balance sheet and disciplined approach to capital deployment, we're well, positioned to create value for our patients and shareholders by maximizing LMS and actively pursuing innovative, highly differentiated GI assets to bolster our portfolio.
Now, let's turn to some additional details on the commercial performance of Linzess starting on slide seven.
Matt Roache: Thank you, Joseph.
It's hard to believe that 2022 represents year 10 of Linzess being on the market Linzess has grown from being the first in class GCC agonists, becoming the number one prescribed branded treatment in the U S for adults with Ibs C in chronic idiopathic constipation.
Matt Roache: Good morning and thanks for joining us for our First Quarter 2022 Investor Update.
Matt Roache: Our press release issued this morning can be found on our website.
As you can see on this slide linzess as a leader in the category with 83% share and 75% total prescription share with Gastroenterologists and the branded Ibs C and chronic constipation market.
Linzess is also the leader in the combined branded and generic Ibs and chronic constipation market with 43% total prescription share.
Most important we're proud to have supported nearly 4 million unique patients with linzess since the launch of the brand in 2012.
Sravan Emany: Next, our 2022 guidance on slide 14. We are reiterating our full year 2022 financial guidance as we remain confident in the continued, strength of LMS with expectations of double-digit prescription demand growth.
Building on last year's momentum Linzess prescription demand increased an impressive 11% year over year in the first quarter of 2022 as shown on slide eight.
Continuing the stretch of five consecutive quarters of double digit prescription demand growth.
Sravan Emany: While we had a strong performance in Q1 due to the previously mentioned one-time net price, benefit, we continue to expect U.S. LMS net sales growth in the low single digits for the year.
In addition, 90 day prescriptions have grown as a percent of total retail prescriptions with an all time high of 21% at the end of Q1.
Sravan Emany: As such, we continue to expect Ironwood revenue of $420 million to $430 million, which includes, approximately $10 million in royalty and other revenues, and adjusted EBITDA of greater than, $250 million.
This has also helped increase the average prescription size of Linzess roughly 43 days.
Slide nine provides a bit more color on what we believe are the key drivers of linzess demand over the long term.
Matt Roache: Today's call and accompanying slides include forward-looking statements. Such statements involve risks and uncertainties that may cause actual results to differ materially.
It starts with a strong clinical profile linzess as FDA approved labeling demonstrating the improvement of overall abdominal symptoms of bloating pain and discomfort in adults with Ibs C and we're committed to helping both patients and providers understand the importance of treating these symptoms beyond <unk>.
Matt Roache: The 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 annual report on Form 10-K for the year ended December 31st, 2021, and in our future SEC filings.
Tom Mccourt: We submitted all that data to the agency, and in their review, when we submitted that, we also proposed a modification to the warning and contraindication. And the agency was very supportive, and that's what got the current label, which really only, restricts from the 2-years and below age category.
Tom Mccourt: Please note, we're currently not approved for pediatric patients.
Tom Mccourt: This was obviously based on the warning language that was originally proposed in the label that was based on preclinical data, not clinical data.
The patient.
Additionally, the American College of Gastroenterology guideline strongly recommends GCC agonists, including Linzess to treat Ibs C symptoms and recognize the high quality of evidence supporting Linzess.
Moving to patient activation Linzess continues to lead the Ibs C and chronic constipation branded prescription market and direct to consumer promotion with the goal of educating more appropriate adult patients to seek care for Ibs C versus continuing the frustrating cycle are self managing with OTC therapies.
In April we together with our partner Abbvie launched our newest consumer campaign, which performed extremely well in market research.
Of course patient activation is not possible without the care physicians and other healthcare professionals.
At Ironwood.
We are in GI health care company with an experienced and highly skilled sales force focused on broadening the use of Linzess with Gastroenterologists in high volume primary care physicians for appropriate patients.
In addition, our investment our investment in payer access is helping support clinical decisions by health care practitioners.
We are proud that after many years Linzess is class, leading payer access and it's widely available on commercial and Medicare part D formularies.
When looking at key plants Linzess as preferred on the top 10 commercial plans and is covered or better on the top seven Medicare part D. Plans net net most patients will have access to linzess at chosen by their health care professional.
Finally, we believe we can expand the clinical utility of Linzess through key lifecycle management initiatives, including our ongoing pediatric program.
Over time, we continue to refine our marketing mix and then the investment in the brand to support brand growth and improve brand margins and cash flow generation.
We remain focused on the levers that we believe will drive continued demand growth and in turn generate profits and cash flow.
Matt Roache: All forward-looking statements speak as of the date of this presentation, so we undertake no obligation to update such statements.
Sravan Emany: Looking ahead, we remain focused on advancing our three strategic priorities.
Looking ahead, we're excited about continuing to maximize linzess.
Advancing our clinical programs strengthening our financial position and growing ironwood's leadership position within Gi.
Matt Roache: Also included are non-GAAP financial measures, which should be considered only as a supplement to, not a substitute for or 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 most directly comparable GAAP measures.
In a few weeks, we will be presenting abstracts at the digestive disease week meeting our DW.
Two of which are oral presentations, highlighting our commitment to advancing the science as we strive to deliver better therapies for patients suffering from Gi diseases.
In particular, we will be presenting new data on the clinical utility of the abdominal score which is important to help physicians better understand the symptoms most important to patients suffering from functional Gi disorders.
We look forward to CDW and sharing data on Linaclotide as well as preclinical IW 300, 3300 data with the brightest minds in the Gi community.
Matt Roache: During today's call, Tom McCourt, our CEO, will review our strategic priorities, provide an update on the commercial performance of LINZ-S.
Sravan Emany: We have built a strong foundation, and we are excited about the opportunities ahead, of us to improve the lives of GI patients and deliver shareholder value.
I would like to say a big thank you to all ironwood employees, who have laid the groundwork for continued momentum and strong execution against our strategic priorities as we continue to help make a remarkable impact on patient lives.
Matt Roache: Mike Schetzlein, our Chief Medical Officer, will discuss our pipeline, and Srivan Anandi, our Chief Financial Officer, will review our financial results and guidance.
Sravan Emany: I want to close by thanking all of our employees, patients, caregivers, and advocates for their, shared dedication to advancing and supporting therapies for GI disorders.
I would now like to hand, the call over to Mike, who will discover discuss our pipeline programs.
Matt Roache: Today's webcast includes slides, so for those of you dialing in, please go to the events section of our website to access the accompanying slides separately.
Operator: Operator, you may now open up the line for questions. At this time, I would like to remind everyone, in order to ask a question, press star and, the number one on your telephone keypad.
Tom Mccourt: So with this delivery of clinical data in the 2-year-olds to 18-year-olds, we were able to drastically remove a lot of the language in that population, but it still remains for 2 and below.
Tom Mccourt: And we think that's critical, obviously, because the goal eventually is to remove the entire warning.
Thanks, Tom I'll start with a lot of appetite pediatric program on slide 11, the clinical studies are ongoing and we continue to expect the functional constipation study in 6% to 17 year olds to readout in the second half of this year.
Matt Roache: With that, I will turn the call over to Tom.
<unk> utilizing a 72 microgram dose and evaluating the safety and efficacy of an appetite for a 12 week period in comparison to placebo. The spontaneous found Lewis as the primary endpoint. This is an exciting opportunity to potentially expand the clinical utility of Linzess and assuming positive data and FDA approval, bringing a new.
Treatment option to this patient population as they are currently no FDA approved prescription pediatric therapies for functional constipation.
Tom Mccourt: And we do think going forward, as we generate more data in the pediatric population, we'll have ongoing discussions with the agency, and we do look at that as quite possible. Because the real point here is that we've now disproven what was a theoretical risk based on preclinical data at launch with the significant amount of pediatric data we have, which was that pediatric patients might be sensitive to GCC agonist and have an adverse event with over secretion or dehydration and really bad morbid diarrhea. And we have not seen that in pediatric patients. In fact, what we've seen is that the doses needed in pediatric subjects are actually akin to what we use in adults.
Next to our advancing IW 3300, why don't I take let's say agonist and a wholly owned asset.
Tom Mccourt: That's why the dose we're focusing on in the functional conservation study is actually 72 micrograms for that phase three program.
Tom Mccourt: With respect to our business development activities, I'd say we're very focused on creating value, here for shareholders at Ironwood.
Tom Mccourt: The bar for pursuing a transaction, from our perspective, is very high.
NGL treatment of that sharp pain condition, such as interstitial cystitis bladder pain syndrome in endometriosis.
Tom Mccourt: As you're pretty much well aware, David, in this environment, from a market perspective, capital and cash preservation is very important.
Tom Mccourt: We take this stewardship of the fact that we have $250 million this year or so, even, doubt that we're going to produce roughly $600 million of cash on our balance sheet. We want to be good stewards of all of that.
Tom Mccourt: And look, I think our approach is to be value investors. We can find opportunities in a market that's potentially dislocated to create value.
Tom Mccourt: We'll do it, but I think it's got to really work for us.
The single ascending dose study completed in the first quarter of this year.
Safety Tolerability and Tolerability in healthy volunteers based on our successful completion of that study, we're now planning to kickoff the multiple ascending dose study in quarter two.
Consistent with prior guidance, we expect to start phase III.
Concept study at the end of this year that will focus on pain benefits and IW IW 300 for patient suffering from interstitial cystitis bladder pain syndrome, where apparently working to finalize the study design.
We recently had an advisory board meeting on this program and the Urologists, we spoke which we're really excited about the preclinical evidence for IW 3300, and relate that desktop pain and a number of preclinical models.
And lastly, <unk> or pharmaceuticals is currently conducting clinical study of <unk> and the data is on track to read out in 2023. The study is evaluating the safety Tolerability pharmacodynamics and efficacy of <unk> in patients 18 to 75 years of age with PVC or unrest.
Safe to air So endara Ocala.
And points include Pharmacodynamic outcomes, such as a change in <unk>, which has been the foundation of prior product approvals.
With compelling feature is the object objectivity of the immunological outcomes for this study as well as the specificity of the therapy.
Arent diagnosis of PBC includes a positive anti mitochondrial antigen with just the immune response to the target of this therapy at PDC two antigen. So clinically we're identifying the right patients to treat in this study we are currently leveraging our expertise and reputation in the Gi community to help core advanced.
Study.
We're thrilled to collaborate with cooler on CMT, one of which we believe has the potential to significantly shift the treatment paradigm MTBC away from symptom management and be the first disease modifying therapy for PBC patients with that I'll now turn it over to Sharon to review our financial performance, Thanks, Mike and good morning, everyone.
Operator: We'll pause for just a moment to compile a Q&A roster.
Tom Mccourt: I think you've seen commentary from other CEOs during the recent two weeks of earnings, calls talking about where expectations are from sellers and how they potentially haven't moderated yet.
Tom Mccourt: Thanks, Matt.
Tom Mccourt: Good morning, everyone, and thanks for joining us today.
Operator: Your first question comes from the line of Eric Joseph.
Tom Mccourt: And so I would just point you to that.
Tom Mccourt: I'm delighted to announce our Q1 results this morning. Maintaining last year's momentum, we're off to a tremendous start this year, as demonstrated by the continued strong LINZ-S performance, the initiation of IW3300 and CMP104 clinical studies, and another quarter of delivering profitability and positive cash flow from operations.
Operator: Your line is open.
Tom Mccourt: From a size and scale perspective, I would also say, look, it really just depends whether, or not we see value.
I would like to provide a few updates. This morning first I will highlight our first quarter performance, then I'll discuss our capital allocation strategy and finally I'll review, our 2022 guidance. Please refer to our press release for our detailed financial information.
Tom Mccourt: At Ironwood, we remain committed to advancing the treatment of GI diseases and redefining standard of care for GI patients.
Hannah Ong: Hi.
Hannah Ong: Good morning.
Tom Mccourt: It depends on opportunity set and whether or not we think we have the right capabilities, to execute a deal.
Tom Mccourt: I think the other thing, Trevor, we might want to comment and maybe Mike comment, we're, seeing a lot of opportunities and attractive opportunities.
I'll start on slide 13, Linzess U S. Net sales were $232 million in the first quarter of 2022.
Hannah Ong: This is Hannah Ong for Eric.
Tom Mccourt: So I think we're encouraged with what we're seeing.
Tom Mccourt: I mean, C&P 104 is a classic example of a potential game changer in a very high unmet, need market where we could really make a difference in the marketplace and certainly make a difference for Ironwood.
Hannah Ong: Thanks for taking the questions.
8% increase compared to the first quarter of 2021.
Hannah Ong: So, just first on the pediatric opportunity for lenoxatide, you have the trial currently, going on with data expected towards the end of this year.
Net sales growth was driven by continued strong prescription demand.
We offset by net price erosion.
In Q1, we experienced more modest net price erosion than anticipated due to a one time gross to net benefit from time to time, we may have one time adjustments related to contracts or estimates as a normal part of the gross to net process. They can have a quarterly impact, but that does not alter our full year expectations. Therefore, the full year we can.
Do you expect Linzess U S net sales growth in the low single digits driven.
Driven by double digit prescription demand growth.
Turning to Linzess brand profitability.
Commercial margin in the first quarter of 2022, 74% compared to 73% of that first quarter of 2021.
Moving to Ironwood revenues.
In the first quarter of 2020 to 22, Ironwood revenues were $98 million up 10% year over year, primarily driven by U S. Linzess collaboration revenues of $94 million.
Hannah Ong: Can you talk a little bit about your expectations for the study?
Turning to income tax expense.
During the first quarter of 2020 to Ironwood recorded $17 $7 million of income tax expense. The majority of which was noncash as ironwood continues to use net operating losses to offset taxable income for federal purposes and in many states. As a reminder, ironwood has significant net operating loss carryforwards from prior year.
Hannah Ong: What would you consider as a win or label-expanding data or label-expansion-enabling data with, respect to SVM?
Years, and therefore, the majority of our income taxes will be a noncash expense as we use our net operating losses.
Moving to ironwood's profitability.
GAAP net income was $39 million and adjusted EBITDA was $58 million in the first quarter of 2022.
Tom Mccourt: I think Shrevan has done a tremendous job with dealing with the capital markets and, his expertise in the capital markets.
Before moving on I'd like to point out beginning.
Beginning in the first quarter of 2022.
Tom Mccourt: And I think the bottom line, as Shrevan mentioned, is the bar is high.
We adopted ASU 2026, new convertible debt accounting standard.
As the effect of decreasing our noncash interest expense and increasing the number of shares used in the computation of our diluted earnings per share.
It's important to note that the adoption of this accounting standard does not affect cash flows or adjusted EBITDA.
Please refer to our public filings for additional information on this change.
Tom Mccourt: And we just want to make sure we're making very good, thoughtful moves as we proceed.
Now moving to cash and capital allocation priorities in the first quarter, we generated $64 million in cash flow from operations and ended the quarter with $593 million in cash and cash equivalents.
Tom Mccourt: That's great.
David Ansellem: Very helpful.
David Ansellem: Thanks, guys.
We continue to execute on our board authorized share repurchase program of up to $150 million that runs through the end of this year.
David Ansellem: Thanks, David.
Tim Chang: Your next question comes from the line of Tim Chang.
Through March 31, we have repurchased $118 million of shares.
And if we purchased an additional $16 million of shares through April 30 of 2022.
Tim Chang: Your line is open.
Tim Chang: Hi.
Lastly, we have neglected to settle the 121 million 22022, sorry, 2022 convertible note that matures on June 15th and cash but.
Tim Chang: Thanks.
With a strong balance sheet and disciplined approach to capital deployment.
Well positioned to create value for our patients and shareholders by maximizing linzess and actively pursuing innovative highly differentiated gi assets to bolster our portfolio.
Tom Mccourt: We are focused on driving value for our shareholders by bringing important medicines to our patients.
Next.
Our 2022 guidance on slide 14.
We are reiterating our full year 2022 financial guidance as we remain confident in the continued strength of linzess with expectations of double digit prescription demand growth.
While we had a strong performance in Q1 due to the previously mentioned one time net price benefit.
You'd expect U S. Linzess net sales growth in the low single digits for the year.
As such we continue to expect Ironwood revenues.
$420 million to $430 million, which includes approximately $10 million in royalty and other revenues and adjusted EBITDA of greater than $250 million.
Tom Mccourt: I believe the progress we've made across the organization in the first quarter demonstrates the steps we're taking to become the leading GI healthcare company in the U.S.
Looking ahead, we remain focused on advancing our three strategic priorities built a strong foundation and we are excited about the opportunities ahead of us through the lives of Gi patients and deliver shareholder value.
Tom Mccourt: Now, I'll begin with a brief overview of our strategic priorities on slide 6.
Tom Mccourt: Our strategy starts with maximizing LINZUS. We continue to be excited by the performance of LINZUS, which has delivered another quarter of double-digit demand growth, and we believe there's more opportunity ahead.
Tom Mccourt: Beyond LINZUS, we're making progress on our clinical trials and remain on track with previously shared data readout timing.
Tom Mccourt: We're focused on strengthening our pipeline through our in-license and acquisition of innovative GI assets, which we believe will position our company for continued growth.
Tom Mccourt: And finally, we continue to deliver sustained profits and cash flow.
I want to close by thanking all of our employees patients caregivers and advocates for their shared dedication to advancing and supporting therapies for Gi disorders.
Tom Mccourt: We ended the first quarter with approximately $593 million in cash and cash equivalents on the balance sheet, and we continue to execute on our board-authorized share repurchase program. Through the end of March, we have repurchased $118 million in our common stock.
Tom Mccourt: We see these achievements in the first quarter as important progress that we believe will support continued growth and success for our company.
Tom Mccourt: Now, let's turn to some additional details on the commercial performance of LINZUS starting on slide 7.
Tom Mccourt: It's hard to believe that 2022 represents year 10 of LINZUS being on the market. LINZUS has grown from being the first-in-class GCC agonist to becoming the number one prescribed branded treatment in the U.S. for adults with IBSD and chronic idiopathic constipation.
Tom Mccourt: As you can see on the slide, LINZUS is the leader in the category with 83% share and 75% total prescription share with gastroenterologists in the branded IBSD and chronic constipation market. LINZUS is also the leader in the combined branded and generic IBS and chronic constipation market with 43% total prescription share.
Tom Mccourt: Most important, we're proud to have supported nearly 4 million unique patients with LINZUS since the launch of the brand in 2012.
Tom Mccourt: Building on last year's momentum, LINZUS prescription demand increased an impressive 11% year-over-year in the first quarter of 2022 as shown on slide 8, continuing the stretch of five consecutive quarters of double-digit prescription demand growth. In addition, 90-day prescriptions have grown as a percent of total retail prescriptions with an all-time high of 21% at the end of Q1. This has also helped increase the average prescription size of LINZUS for roughly 43 days.
Operator, you May now open up the lines for questions.
Okay.
At this time I would like to remind everyone in order to ask a question press star and the number one on your telephone keypad, we'll pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Eric Joseph Your line is open.
Hi, Good morning. This is Hannah on for Eric Thanks for taking the question.
Tom Mccourt: Slide 9 provides a bit more color on what we believe are the key drivers of LINZUS demand over the long term. It starts with a strong clinical profile.
Tom Mccourt: LINZUS has FDA-approved labeling demonstrating the improvement of overall abdominal symptoms of bloating, pain, and discomfort in adults with IBSD, and we're committed to helping both patients and providers understand the importance of treating these symptoms beyond constipation.
Tim Chang: Could you talk a little bit more about this pediatric study?
Just first on the pediatric opportunity for Linaclotide.
The trial currently going on with data expected towards the end of this year.
Can you talk a little bit about your expectations for the study what would you consider as a run or label expanding data.
Or maybe will extension, enabling data with respect to SDN and then on the <unk>.
Hannah Ong: And then on the potential design of a Phase II proof-of-concept study for IW3300, just, wondering, in general, if we might see any changes in the project candidate, either near-term or down the line, because while you're initially evaluating a suppository formulation, are there any plans to revisit that?
Potential design of a phase two proof of concept study for IW 300, just wondering in general if we might see any changes in the economy.
Candidate, either near term or down the line.
Because while you're initially evaluating and for clothing jewelry formulation.
Are there any plans to revisit that.
Hannah Ong: And also, if so, what are the steps to making that happen?
And also wanted to substitute making that happen.
Hannah Ong: Thanks for taking the questions.
Thanks for taking the question.
Tom Mccourt: All right.
Tom Mccourt: Additionally, the American College of Gastroenterology guideline strongly recommends GCC agonists, including LINZUS, to treat IBSD symptoms and recognize the high quality of evidence supporting LINZUS.
Tom Mccourt: Well, good morning, Hannah.
Tim Chang: How many patients have you enrolled in this pediatric study?
All right well good morning, and thank you for your questions I'll hand, it over to Mike <unk> to answer that.
Tom Mccourt: Moving to patient activation, Linzess continues to lead the IBSC and chronic constipation branded prescription market in direct-to-consumer promotion, with the goal of educating more appropriate adult patients to seek care for IBSC, first continuing the frustrating cycle of self-managing with OTC therapies.
Tom Mccourt: Thank you for your questions.
Tim Chang: And I'm sort of wondering, you know, assuming the data is positive, would this data – would, you go to the FDA and see if the data could be leveraged to remove the black box warning from your current label in the pediatric setting?
Tom Mccourt: In April, we, together with our partner AbbVie, launched our newest consumer campaign, which performed extremely well in market research.
Mike Schetzlein: I'll hand it over to Mike Schetzlein to answer some of the specifics.
Tom Mccourt: Of course, patient activation is not possible without the care of physicians and other healthcare professionals.
Tom Mccourt: At Ironwood, we are a GI healthcare company with an experienced and highly skilled sales force focused on broadening the use of Linzess with gastroenterologists and high-volume primary care physicians for appropriate patients.
Tom Mccourt: In addition, our investment in payer access is helping support clinical decisions by healthcare practitioners.
Tom Mccourt: We are proud that after many years, Linzess has class-leading payer access and is widely available on commercial and Medicare Part D formularies.
Mike Schetzlein: Yeah.
Tom Mccourt: When looking at key plans, Linzess is preferred on the top 10 commercial plans and is covered, or better, on the top 7 Medicare Part D plans.
Mike Schetzlein: Thanks for the question.
Tim Chang: And I know it's pediatric patients less than two years of age that the black box refers, to.
Yes. Thanks for the question. So the Pizza program and as you May know is was developed on the back of the Phase II study. So we did a phase II study it actually enrolled about 173 years or so.
Tom Mccourt: Net-net, most patients who have access to Linzess get chosen by their healthcare professionals.
Mike Schetzlein: So, the AIDS program, as you may know, was developed on the back of a Phase II study. So, we did a Phase II study. It actually enrolled about 173 or so pediatric subjects between the age of 6 and 17.
Tim Chang: Yeah.
Tim Chang: So thanks for the question.
Tim Chang: It's a good clarification.
Tom Mccourt: Finally, we believe we can expand the clinical utility of Linzess through key lifecycle management initiatives, including our ongoing pediatric program.
Tim Chang: So the current study that I'm addressing that we think can increase the clinical utility, for Limpest is this study in functional constipation in 6- to 17-year-olds.
Tom Mccourt: Over time, we continue to refine our marketing mix and investment in the brand to support brand growth and improve brand margins and cash flow generation.
Tom Mccourt: We remain focused on the levers that we believe will drive continued demand growth and, in turn, generate profits and cash flow.
Tom Mccourt: Looking ahead, we're excited about continuing to maximize Linzess, advancing our clinical programs, strengthening our financial position, and growing Ironwood's leadership position within GI.
Tom Mccourt: In a few weeks, we will be presenting eight abstracts at the Digestive Disease Week meeting, or DDW, two of which are oral presentations highlighting our commitment to advancing the science as we strive to deliver better therapies for patients suffering from GI diseases. In particular, we'll be presenting new data on the clinical utility of the abdominal score, which is important to help physicians better understand the symptoms most important to patients suffering from functional GI disorders.
Patrick subjects between the age of six and 17.
Tom Mccourt: We look forward to DDW and sharing data on lenacletide as well as preclinical IW3300 data with the brightest minds in the GI community.
Tom Mccourt: I would like to say a big thank you to all Ironwood employees who have laid the groundwork for continued momentum and strong execution against our strategic priorities as we continue to help make a remarkable impact on patient lives.
Mike Schetzlein: The clinical studies are ongoing, and we continue to expect the functional constipation study in 6- to 17-year-olds to read out in the second half of this year. The study is utilizing a 72-microgram dose and evaluating the safety and efficacy of lenacletide over a 12-week period in comparison to placebo, with spontaneous bowel movements as the primary endpoint.
Mike Schetzlein: And those, the recruitment criteria for those are their own criteria.
Tim Chang: And it is a phase 3 study that we designed in collaboration with the FDA with the ultimate, goal of potentially submitting an SNDA for approval of functional constipation in 6- to 17-year-olds.
Tom Mccourt: I would now like to hand the call over to Mike, who will discuss our pipeline programs.
Tom Mccourt: Mike?
And does that begin recruitment criteria for those of our own criteria. So they include the patients have had less than three downloads per week based on their own criteria. So that's the inclusion criteria roughly where patients come into the pediatric studies is not too different than the adult studies they come in roughly at about two or so.
Mike Schetzlein: Thanks, Tom.
Mike Schetzlein: I'll start with the lenacletide pediatric program on slide 11.
Mike Schetzlein: This is an exciting opportunity to potentially expand the clinical utility of lenzaz, and assuming positive data and FDA approval, bring a new treatment option to this patient population, as there are currently no FDA-approved prescription pediatric therapies for functional constipation.
Mike Schetzlein: So, they include the patients having to have less than three bowel movements per week based, on their own criteria.
Tim Chang: So that is the goal.
Tim Chang: That study is currently ongoing. It's a large study because it actually includes some safety data in IBS patients as well, but roughly about 460 patients.
Mike Schetzlein: So, that's the inclusion criteria.
Tim Chang: And so a lot of details are on clincharles.gov.
Mike Schetzlein: Roughly, when patients come into the pediatric studies, and it's not too different in the, clinical studies, they come in roughly with about two or so SPMs per week.
Tim Chang: It's actually a 12-week study. And it's looking at the change from baseline in spontaneous bowel movements over a 12-week, period using the weekly sort of average SPM frequency.
Spm's per week, so that's like the baseline. So we're looking at obviously for a clinical improvement and oftentimes, we see somewhere a number of one to two.
Mike Schetzlein: So, that's like the baseline.
Tim Chang: And it's, again, it's a change from baseline.
Mike Schetzlein: So, we're looking, obviously, for clinical improvement.
Tim Chang: So it's compared to their baseline, which is a 2-week run-in period where they obviously, have to be established with their own criteria of less than 3 SPMs per week.
Mike Schetzlein: And oftentimes, we see somewhere a number of one to two, increase of one to two SPMs, per week as a clinically meaningful benefit for patients.
An increase of 1% to two SPM scale per week.
The clinically meaningful benefit for patients so that they are kind of the metrics, but please don't lose sight of the fact that there is currently nothing approved.
Mike Schetzlein: So, they're kind of the metrics, but please don't lose sight of the fact that there's, currently nothing approved for pediatric functional constipation.
Tim Chang: So we do think that if we can have a clinically meaningful effect and a statistically positive, effect in that study, that there is a very real opportunity to have a discussion with the agency for a label change to include indication in functional constipation in pediatric patients.
For pediatric functional constipation, so we really feel like this great opportunity, obviously data permitting of the discussion with the agency because clearly from that phase II study, we did see a dose dependent increase in the criteria around constipation, including of Sps as well as debt.
Mike Schetzlein: So, we really feel like this is a great opportunity.
Tim Chang: Now, that's data permitting.
Tim Chang: The study is still ongoing.
Mike Schetzlein: Obviously, data permitting to have the discussion with the agency, because clearly from that, phase two study, we did see a dose dependent increase in the criteria around constipation, including SPMs as well as the Bristol stool scale score as well for stool consistency.
The Bristol stool scale score as well or stool consistency and so certainly that data in hand, and we look for to look at data, obviously carefully with our partners Abbvie and look for a good discussion with the agency, but we are on track to do that in second half of this year. So hopefully that answers that question, maybe I'll stop there to see if that answered that question before I go to the <unk>.
Mike Schetzlein: So, certainly, with that data in hand, and we look at the data, obviously, carefully, with our partners at the, and look for a good discussion with the agency.
Mike Schetzlein: But we're on track to do that in the second half of this year.
Tim Chang: We'll pull all that together in the latter half of this year.
Tim Chang: We also obviously will have to have discussions with AbbVie, but we're clearly on the same, page strategically with AbbVie with that approach.
Tim Chang: So that's the current focus on the functional constipation component.
Mike Schetzlein: So, hopefully, that answers that question.
Mike Schetzlein: Maybe I'll stop there to see if that answers the P's question before I go to the 3300 question.
Mike Schetzlein: Next, we're advancing IW3300, a guanylate cyclase C agonist and a wholly-owned Ironwood, asset for the potential treatment of visceral pain conditions such as interstitial cystitis, bladder pain syndrome, and endometriosis. The single ascending-dose study completed in the first quarter of this year to test, the safety and tolerability in healthy volunteers.
Mike Schetzlein: Okay, so for IW3300, again, we're real excited about that program because, you know, for, the first time we're going to be able to test this hypothesis that's been in the medical and scientific community for decades, which is a crosstalk hypothesis.
<unk> thousand 300 question.
Yes, you answered the question.
Okay. So far I don't think 3300 again, we're real excited about that program because for the first time, we're going to be able to test this high.
Hypothesis, that's been in the medical and scientific community for decades, which is a cross talk hypothesis.
Mike Schetzlein: So, you know, sort of clinically, when people have left arm pain, people worry about cardiac pain, right?
So in a clinically when people have left are paying people worry about cardiac pain right, that's sort of like the snow Renault plasticity overlap that happens in all of us that often happens in the pelvic organs and then that's what we discovered with IW $3300 is a really hosting visceral hypersensitivity AJ and all the pre clinic.
Mike Schetzlein: That's sort of like this neuronal plasticity or this normal neuronal overlap that happens in all of us.
Mike Schetzlein: That often happens in the pelvic organs.
Mike Schetzlein: And that's what we discovered with IW3300 is as a really potent visceral hypersensitivity agent in all the preclinical models we tested, it reduced that visceral sensitivity.
The models, we tested reduced at this real sensitivity and.
Mike Schetzlein: And so given the colonic action of lenacletide that we know of, we're first testing the rectal administration of IW3300 just to ensure we have the adequate dose to prove this hypothesis because we'll know with the rectal administration that we're getting adequate exposure.
And so given the colonic action of Linaclotide that.
We're first testing the rectal administration of IW 3300, just to ensure we have adequate dose.
Mike Schetzlein: Based on the successful completion of that study, we're now planning to kick off the, multiple ascending-dose study in quarter two.
This hypothesis, because we'll know with erectile administration that we're getting adequate exposure.
Mike Schetzlein: So we certainly feel like we can achieve the dose we need if the crosstalk hypothesis proves to be valid to show a real clinical improvement in the pain sensation in bladder pain syndrome patients because there's a lot of epidemiologic data that sort of correlates with IBS and bladder pain syndrome.
So we certainly feel like we can achieve the dose we need.
The cross sell hypothesis appears to be valid as Shelly and real clinical improvement.
The pain sensation in bladder pain syndrome patients because theres a lot of epidemiologic data that sort of correlates with ibs and bladder pain syndrome. So we think based on that the proof of concept studies targeting the depositary. We've always had the vision that an oral therapy will be useful in this population and probably.
Mike Schetzlein: So we think based on that, the proof of concept study is targeting this suppository.
Mike Schetzlein: We've always had the vision that an oral therapy would be useful in this population and probably preferred. The current chemistry really supports the opportunity for an oral formulation.
Preferred care.
Current chemistry really supports the opportunity for an oral formulation again, we're just testing a depository.
Mike Schetzlein: Again, we're just testing the suppository because of the need to sort of prove this hypothesis in clinical subjects in order to make sure we had adequate exposure.
As the need to sort of prove this hypothesis in clinical subjects and wanted to make sure we had adequate exposure.
Mike Schetzlein: A real interesting sideline though is that we've discussed this with urologists. Since there really are no good therapies currently available for bladder pain syndrome, they've actually looked positively even at the rectal formulation.
Interesting sideline those at least discussed this with urologists since there really arent no. Good therapies currently available for bladder pain syndrome, they've actually helped positively Ethernet direct cell formulation. So we do have we have got that feedback. We do appreciate your point and from a longer term vision. There certainly is an opportunity.
Mike Schetzlein: Consistent with prior guidance, we expect to start phase two proof-of-concept study, at the end of this year. That will focus on pain benefits of IW3300 for patients suffering from interstitial cystitis, and bladder pain syndrome. We're currently working to finalize the study design. We recently held an advisory board meeting on this program, and the urologists we spoke, with were really excited about the preclinical evidence for IW3300 and relief of visceral pain in a number of preclinical models.
Mike Schetzlein: So we do have, we have gotten that feedback, but we do appreciate your point that from a longer term vision, there certainly is an opportunity for an oral formulation.
Mike Schetzlein: Okay, great.
Oral formulation.
Okay, Great. That's very helpful. Thanks for taking my questions.
Okay.
Mike Schetzlein: And lastly, CMP104.
Hannah Ong: That's very helpful.
Your next question comes from the line of David and sell them.
Mike Schetzlein: Core Pharmaceuticals is currently conducting a clinical study of CMP104, and the data is, on track to read out in 2023. The study is evaluating the safety, tolerability, pharmacodynamics, and efficacy of CMP104 in, patients 18 to 75 years of age with PBC who are unresponsive to Erso and or Ocalva. The endpoints include pharmacodynamic outcomes, such as a change in alkaline phosphatase, which has been the foundation of prior product approvals.
Mike Schetzlein: The real compelling feature is the objectivity of the immunological outcomes for this study, as well as the specificity of the therapy. The current diagnosis of PBC includes a positive anti-mitochondrial antigen, which is the immune, response to the target of this therapy, the PDCE2 antigen.
Your line is open.
Mike Schetzlein: So clinically, we're identifying the right patients to treat in this study.
Hannah Ong: Thanks for taking my questions.
Hey, Thanks, So just had a couple of questions first regarding business development and M&A can you just give us a refresher on how big of a transaction.
David Ansellem: Your next question comes from the line of David Anselum.
You are radically.
David Ansellem: Your line is open.
And what is the extent to which you would lever up.
Execute on a transaction so that's number one.
David Ansellem: Hey, thanks.
Just talk philosophically about how you're thinking about.
Okay.
David Ansellem: So just had a couple of questions.
And then secondly.
Just wanted to get a refresher on.
With critical path items for an OTC version of <unk>.
Hello, Todd.
Its something thats been talked about in the past, but just a refresher on what needs to happen.
To get to a point, where there could be a low dose OTC version of the product. Thank you.
Okay, well thank you David.
There was some background noise so I'll just.
Mike Schetzlein: We're currently leveraging our expertise and reputation in the GI community to help, CORE advance the study.
David Ansellem: First regarding business development and M&A, can you just give us a refresher on how big of a transaction you could theoretically do and what is the extent to which you would lever up to execute on a transaction?
I think the first question on driving around BD, and our approach to BD and size and scale of it.
Mike Schetzlein: We're thrilled to collaborate with CORE on CMP104, which we believe has the potential, to significantly shift the treatment paradigm in PBC away from symptom management and be the first disease-modifying therapy for PBC patients.
David Ansellem: So that's number one.
One was around OTC and sort of the gate staging items before we can actually achieve that is that correct.
That is correct, yes, sorry about the background noise, yes, and no, but I just want to make sure we got the questions right.
Once you adjust the OTC.
First and then because I think thats, probably a little simpler than the PD one so.
David Ansellem: And just to talk philosophically about how you think about raising capital on M&A.
So we're having ongoing discussions with our partner Abbvie.
David Ansellem: And then secondly, just wanted to get a refresher on the critical path items for an OTC version of linaclotide.
Obviously, we think there could be a huge opportunity for an OTC version of <unk>.
Linzess given the fact that we have an extensive safety and Tolerability of database showed the drug is extremely safe and well tolerated as well as highly efficacious. So we're initially initiated those discussions are progressing we think theres an opportunity because there are regulatory metrics in that space in terms of other things like Merrill exited Glenn <unk>.
David Ansellem: I know it's something that's been talked about in the past, but just a refresher on, you know, what needs to happen, to get to a point where there could be a low-dose OTC version of the product.
So we definitely think there's an opportunity we think it may evolve around the concept of vacation of activation casino days as things transition to the TCE adequate demand patient friendly language and has obviously an extensive safety database. So we think based on those precedents based on the current data that we have with Linzess and the medical need sort of out there.
We think theres, a huge opportunity, but we are initiating those discussions and things are going well and we can give you more details as they materialize, but maybe you can dig hi. This is Tom maybe you could take a minute and talk a little bit about the whole issue of the box warning and why that's kind of a.
David Ansellem: Thank you.
Tom Mccourt: Great.
Tim Chang: How that relates to the warning, we already don't have the 6- to 17-year-olds in the, current warning, in the current, what was the early boxed warning language.
Key step as we move forward. The team has made tremendous progress already but kind of what is the path forward to get that resolved, yes, certainly so obviously again as I mentioned the safety and Tolerability is a key element for the OTC approach and as you know last year, we had a great milestone event with the agency in the removal of the large <unk>.
Majority of what was the warning and counter indication precedent on the prior Linzess label that the private label actually included all pediatric population subjects 18 and under through the last years of our post.
Post marketing studies in pediatric patients, we generated a significant amount of data in pediatric patients primarily alumnae ages of age 10 to 18 as you know.
And in that study in Ibs patients from 717 within the study.
Perhaps the patient in patients six to 17, and we have also recently completed a functional constipation study in two to five year old.
Cemented all that data to the agency and in their review.
We submitted that we also proposed a modification to the warning and counter indication.
Agency was very supportive and that's what that the current label, which really only restricts.
Tim Chang: As you mentioned, and as I clarified, that only pertains to the 2 years and below population.
Two years and below age category are placed out recover that approved for pediatric patients.
Tim Chang: So we will aggregate all of our pediatric data, going forward to have further discussions to ultimately get that part of the label removed.
Obviously based on the warning language that was.
Tim Chang: All pediatric data helps, but we'll likely need to have data in the less than two-year-olds too to have that discussion for complete removal.
Tim Chang: Okay, no, that helps.
They proposed in the label that was based on preclinical data and that clinical data. So with this delivery of clinical data in the two year olds to 18 year olds, we were able to drastically.
Tim Chang: Thanks for the answer, Mike.
Boris Peaker: Thank you.
You've a lot of the language in that population, but it still remains for <unk> and below and we think that's critical obviously because the goal of eventually is to remove the entire warning and we do think going forward as we generate more data in the pediatric population will have ongoing discussions with the agency and we do look at that is quite possible because the real.
<unk> point.
Point here is that we felt disapprove then what was the theoretical risk based on preclinical data at launch with the significant amount of pediatric data, we have which was that pediatric patients slightly sensitive the GCC agonist and adverse event with over secretion our dehydration.
And really bad morbid diarrhea, and we have past events in pediatric patients in fact, what we've seen is that the dose is needed in pediatric subjects actually it will be used in adults. That's why this dose.
Focusing on in this functional agitation study is actually 72 micrograms for that phase III program.
Great and with respect to our business development activities.
Look we're very focused on creating value here for shareholders at Ironwood the bar for pursuing a transaction in our from our perspective is very high as you can.
Pretty much well aware David in this environment from a market perspective capital and cash preservation is very important we feel very.
We take this stewardship of the fact that we've got $250 million this year or so EBITDA that we're going to produce roughly $600 million of cash on our balance sheet.
I Wonder if you could stewards of all of that.
And look I think we our approach is to be value investors, if we can find opportunities.
In a market that potentially dislocated to create value, we'll do it but.
I think it is.
It required it has got to really work for US I think we've seen commentary from other Ceos. During the recent two weeks of earnings calls talking about where expectations are from sellers and how they potentially haven't moderated again.
And so I would just point you to that.
From a from a size and scale perspective, I would also say look at it really just adds whether or not we see value alright depends on opportunity set and whether or not we think we have the right capabilities to execute a deal.
I think the other thing Trevor you might want to comment and maybe Mike can comment we're seeing a lot of opportunities with attractive opportunities I mean, <unk> is a classic example of a potential game changer.
And a very high unmet need market.
We could really make a difference in the marketplace and certainly can make a difference for ironwood.
We are encouraged with what we're seeing shrugging it has done a tremendous job with.
Mike Schetzlein: With that, I'll now turn it over to Shrevan to review our financial performance.
Sravan Emany: Thanks, Mike.
Dealing with the capital markets that has expertise of the capital markets and I think the bottom line as you bet as Trevor mentioned is the bar is high and we just wanted to make sure we're being making very good thoughtful moves as we proceed.
Great very helpful. Thanks, guys.
Tom Mccourt: Well, thank you, David.
Thanks, David.
Tom Mccourt: There was some background noise, so I'll just – I think the, first question was running around BD and our approach to BD and size and scale of it.
Yeah.
Your next question comes from the line of Tim Chiang Your line is open.
Tom Mccourt: The second one was around OTC and sort of the gate staging items before we can actually achieve that.
Sravan Emany: Good morning, everyone.
Tom Mccourt: Is that correct?
Sravan Emany: I would like to provide a few updates this morning.
Tom Mccourt: That is correct.
Tom Mccourt: Yes.
Hi, Thanks.
Could you talk a little bit more about this.
Tom Mccourt: Sorry about the background noise.
This pediatric study.
How many patients have you enrolled in this pediatric study and I'm sort of wondering.
Tom Mccourt: Yes.
Assuming the data is positive would this data would you go to the FDA and see if the data could.
Tom Mccourt: Yeah, no problem.
Could be leveraged to remove the black box warning.
Tom Mccourt: I just want to make sure we got the questions right.
From your current label.
In.
In the pediatric setting.
Tom Mccourt: Why don't you address, the OTC point first, and then – because I think that's probably a little simpler than the BD1, and I'll answer that.
I know, it's pediatric patients less than two years of age.
The black box refers to.
Tom Mccourt: Yeah.
Tom Mccourt: So we're having ongoing discussions with our partner, ADVI, because obviously we think there could be a huge opportunity for an OTC version, of Linzess, given the fact that we have an extensive safety and tolerability database to show the drug is extremely safe and well-tolerated, as well as highly efficacious.
Tom Mccourt: So we've initiated those discussions, and we're progressing.
Yes. So thanks for the question just a clarification.
The current study that I'm addressing that we think can increase the clinical utility for linzess as their study and functional constipation and six to 17 year olds and it is a phase III study that we designed in collaboration with the FDA with the ultimate goal of potentially submitting an NDA for approval of functional.
Constipation and six to 17 year olds. So that is the goal that study is currently ongoing it's a large study because it actually includes some safety data in ibs patients, while the roughly about 460 patients.
Other details around Glen Charles that Gov, It's actually a 12 week study and.
And it's looking at the change from baseline in spontaneous bowel movements and over a 12 week period using the weekly average SPM frequency and it's again, it's a change from baseline so it's compared to their baseline, which is a two week running period, where they obviously have to be established withdrawal criteria of less than three spm's per week. So we do.
I think that if we can have a clinically meaningful effect.
Typically.
They've effect in that study that there is a very real opportunity to have an.
A discussion with the agency or a label change to include an indication and functional constipation in pediatric patients. That's data permitting study is still ongoing we'll pull that together in the end of this latter half of this year. We also obviously will have to.
That discussions with Abbvie, but we're clearly on the same page strategically and with Abbvie with that approach. That's the current focus on the functional constipation, Gabon, it how that relates to the warning we've already.
Has the six to 17 year olds in the current warning to play in the current robust early boxed warning language as you mentioned as I clarified that only pertains to two years and below population. So we aggregate all of our pediatric data going forward to have further discussions to ultimately get that part of the label removed at all.
Pediatric data helps but will.
Likely need to have data in the last two year olds to have that discussion for complete removal.
Okay.
Thanks.
Okay that helps thanks, thanks for the answer Mike.
Thank you.
Boris Peaker: Your next question comes from Boris Peaker.
Your next question comes from Boris <unk>.
Boris Peaker: Your line is open.
Your line is open.
Boris Peaker: Great, many of my questions have been asked, already answered, but maybe just a little more on Linzess.
Great.
My questions have been asked already answered, but maybe just a little more on Linzess I'm just curious how much room do you think there is to cut on marketing expenses without significantly impacting revenue I mean is that a discussion that you're having with abbvie.
Boris Peaker: I'm just curious, how much room do you think there is, to cut on marketing expenses without significantly impacting revenue?
Boris Peaker: I mean, is that a discussion that you're having with AbbVie, in the current kind of environment?
The current kind of environment.
Tom Mccourt: Yeah, so I'll, Tom, you wanna try and answer that one?
Yes, So Tom do you want to China, and so on yes Boris.
Tom Mccourt: Yeah, Boris, I mean, that is an ongoing discussion.
It is an ongoing discussion.
Tom Mccourt: You know, we have continued to throttle back, particularly on professional promotion, which is, you know, the second biggest expense line, you know, on the brand P&L.
We have continued to throttle back, particularly on professional promotion, which is general update.
The second biggest expense line.
The brand P&L and the thing Thats remarkable is the strength of the market leader position is still enabling the brand to grow even though we dramatically pulled back on personal promotion, we constantly evaluate that.
Tom Mccourt: And the thing that's remarkable, is the strength of the market leader position is still enabling the brand to grow, even though we've dramatically pulled back in personal promotion.
Tom Mccourt: We constantly evaluate that, and we'll be taking another look at it probably mid-year to see will we continue to kind of throttle back at that expense.
It will be taken another look at it probably mid year to seek while we continue to kind of throttle back on that expense and I think pieces. We're also looking at the media by one of the real advantages of having a happy as a partner because they have such strength with regard to media discounts, which has really helped the bottom.
Tom Mccourt: And I think the other piece is, you know, we're also looking at, you know, the media buy.
Tom Mccourt: You know, one of the real advantages, of having AbbVie as a partner is they have such strength with regard to media discounts, you know, which has really helped the bottom line, but we'll continue to look at that as well.
But we'll continue to look at that as well. So I think there is opportunity to continue to expand the margin markets excuse me margins and make it more profitable brand and we will we'll continue to refine that with <unk>.
Tom Mccourt: So I think there's opportunity, to continue to expand the markets, excuse me, margins, and make a more profitable brand, and we'll continue to refine that, you know, with our finance colleagues across the two organizations.
Our finance colleagues across the two organizations.
Great. Thank you for taking my question.
Yes.
Yes.
Yes.
There are no further questions at this time and that concludes today's conference call.
You may now disconnect.
Sravan Emany: First, I'll highlight our first quarter performance.
Tom Mccourt: We think there's an opportunity, because there are regulatory metrics in that space, in terms of other things like mural exotica and OTC.
Boris Peaker: Great.
Please wait the conference will begin shortly.
Tom Mccourt: So we definitely think there's an opportunity.
Boris Peaker: Thank you for taking my question.
Tom Mccourt: We think it may evolve around the concept of occasional constipation, because you know these – as things transition to OTC, you've got to put them in patient-friendly language and have, obviously, an extensive safety database.
Operator: Yeah.
Tom Mccourt: So we think, based on those precedents, based on the current data we have with Linzess and the medical need sort of out there, we think there's a huge opportunity.
Operator: There are no further questions at this time, and that concludes today's conference call.
Operator: You may now disconnect.
Operator: Please wait.
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Yes.
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