Q2 2024 Ironwood Pharmaceuticals Inc Earnings Call
Celine: Thank you for standing by. My name is Celine and I will be your conference operator today. At this time, I would like to welcome everyone to the Ironwood Pharmaceuticals Q2 2024 Investor Update Conference Call.
All lines have been placed on mute to prevent any background noise. After the speaker remarks, there will be a question and answer session.
If you would like to ask a question during this time, please press star followed by the number 1 on your telephone keypad.
Celine: If you would like to withdraw your question, please press star 1 again. Thank you. I would now like to turn the call over to Matt Roache, Director of Investor Relations. Please go ahead.
Matt Roache: Thank you, Celine. Good morning, and thanks for joining us for our second quarter 2024 investor update. Our press release issued this morning can be found on our website.
Speaker Change: Today's call and accompanying slides include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Celine: Such statements involve risks and uncertainties and may cause actual results to differ materially.
Celine: A 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 31, 2023, and in our subsequent SEC filings.
All four 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, or superior to, GAAP measures.
Celine: 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 .
Celine: During today's call, Thomas McCourt, our Chief Executive Officer, will begin with a brief overview.
Speaker Change: Mike Shetzline, our Chief Medical Officer, will discuss our pipeline, and Sravan Emany, our Chief Operating Officer and Chief Financial Officer, will provide a commercial update and review our financial results and guidance.
Andrew Davis: Andrew Davis, our Chief Business Officer, is available for the question and answer session following our prepared remarks.
Speaker Change: 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. With that, I'll turn the call over to Tom.
Tom: Thanks, Matt. Good morning, everyone. Thanks for joining us today.
Tom: We continue to make progress across our strategic priorities in the second quarter.
Tom: Starting with Linzess, prescription demand remains robust, increasing 11% in the second quarter with continued strength in new-to-brand prescriptions which grew 15% versus the prior year.
Celine: This marks the sixth consecutive quarter of double-digit new-to-brand volume growth, underscoring that patients and providers are consistently choosing Linzess.
Celine: While demand is up, Linzess is continuing to experience pricing headwinds driven by a higher-than-expected Medicaid utilization.
Celine: which is impacting our U.S. net sales. As a result, we are revising our full year 2024 guidance. Sravan will speak more to the specifics on the call later.
Sravan: From a financial perspective, even with the continued LINZUS pricing pressure, we believe we are in a fortunate position with meaningful cash flows generated by LINZUS and a capital structure to support continued execution of our strategic priorities over the upcoming years.
Sravan: Moving to our pipeline, in May, we presented our Late Breaking Stars Phase 3 data at the Digestive Disease Week meeting, which was very well received.
Celine: Since DDW, we've continued to receive positive feedback on apiglutide's clinical profile from physicians, key opinion leaders, and patient advocacy partners.
Celine: The positive feedback was reinforced through a recent advisory board meeting supporting our belief that if approved, apiglutide would be the drug of choice.
Celine: among physicians to treat adult patients with short bowel syndrome who are dependent on parenteral support based on its differentiated profile included demonstrated efficacy tolerability and once-weekly dosing convenience
Celine: We believe these three distinguishing factors will drive uptake, adherence, and improve quality of life for patients with short bowel syndrome who are dependent on parental support.
Sravan: We also continue to make strides in our commercial planning activities for Apricotide.
Sravan: And we are encouraged that patients identified by the recently implemented ICD-10 codes have supported our estimates of between 8,000 and 10,000 adult SBS patients who are dependent on support actually exist in the U.S. today.
Celine: We believe a significant portion of these patients remain untreated by currently available therapies. The ability to identify these unique patients using ICD-10 codes is an important development to enable a more targeted and informed go-to-market strategy.
Speaker Change: And, we continue to believe Afroglutide is well positioned to address the ongoing unmet needs because of its strong clinical profile.
Sravan: including the convenience of once-weekly dosing, the low incidence of both injection site reactions and GI tolerability issues, and a demonstrated high rates of compliance as seen in the STARS Phase III study.
Sravan: Moreover, we are developing a robust patient service program to help drive uptake and adherence to therapy.
Sravan: We are advancing our launch planning and are confident we are well equipped to commercialize afroglutide if approved with an established sales force with a very strong presence in offices of GI specialists across the United States.
Celine: Over the past few months, we've continued to progress towards the apiglutide NDA submission, a labeled focus on adult SBS, and expected to complete the filing in the first quarter 2025.
Celine: Mike will provide additional details on our submission strategy in a few minutes.
Mike: Next, CMP-104 for the potential treatment of primary biliary cholangitis.
Speaker Change: We are on track to share Phase 2 proof-of-concept top-line results this quarter, which will inform a decision on our option to acquire an exclusive license from Core Pharma for C&P 104 in the U.S.
Speaker Change: Moving to our third strategic priority of delivering sustained profits and cash flow.
Speaker Change: In the second quarter, we generated $33 million of operating cash flow.
Speaker Change: Also, in June , we repaid the $20 million principal amount of our 2024 convertible notes upon maturity using a combination of cash on hand and funds drawn from our revolving credit facility.
Speaker Change: Looking ahead, we are intently focused on managing Linzess pricing pressure to maximize profits and cash flow while simultaneously progressing our pipeline to extend Ironwood's growth horizon beyond Linzess.
mminding: With that, I'll hand it over to Mike to discuss our pipeline in more detail. Mike?
mminding: Yeah, thanks, Tom. And good morning, everyone. I'll start with an update on the NDA submission for apiglutide for patients with short bowel syndrome who are dependent on parenteral support.
mminding: As Tom mentions, we've made steady progress in preparing the NDA submission.
Speaker Change: Our plan is to pursue a rolling NDA review. The rolling review allows us to submit completed sections of the application as they become available and continue to engage with the agency as we proceed with the submission process.
Speaker Change: We expect the rolling review process to begin in the fourth quarter. The early modules will include the non-clinical and clinical components.
mminding: As we progressed work on the regulatory filing, in conjunction with our commercial planning activities, we decided to make enhancements to the presentation of the VILE kit to optimize it for commercial use. As a result, we expect to fully complete the NDA submission in the first quarter of 2025.
mminding: Moving to slide 8, as Tom pointed out, we continue to receive positive feedback on apiglutide's clinical profile and believe it has the potential to improve the standard of care for patients living with SPS who are dependent on parenteral support.
Tom: based on the combination of demonstrated efficacy, tolerability, and once-weekly dosing convenience.
Tom: In cell-based assays of receptor activation, apiglutide retained potency and selectivity at the GLP-2 receptor compared with native GLP-2 and teduglutide, and is uniquely designed to accelerate intestinal growth for improved gut function and absorption.
Tom: Epiglutide is the only GLB2 analog to achieve a statistically significant reduction in weekly parenteral support volume with once-weekly dosing. Patients achieve the clinically meaningful parenteral support reductions as early as week 8 in the STARS Phase 3 study.
Tom: In addition, we saw a powerful parenteral support volume reduction with apiglutide as some patients achieve two and three days off per week.
Tom: Furthermore, 7 patients were able to achieve enteral autonomy by week 24, including patients with a stoma versus none on placebo.
Tom: Importantly, apiglutide demonstrated high rates of compliance, and similar rates of adverse events were observed between treatment and placebo groups, with no malignancies and discontinuations due to GI tolerability issues.
Tom: We look forward to continuing to evaluate the robust dataset from the largest ever GLP-2 study in short bowel syndrome with intestinal failure and plan to disclose further findings at additional medical meetings.
Tom: including the American College of Gastroenterology meeting in October where our phase 3 subgroup analysis was accepted for an oral presentation.
Tom: Before moving on, I'd like to take a moment to highlight that August is Short Bow Syndrome Awareness Month.
Tom: As part of our unwavering commitment to people suffering from SPS, I want to say a big thank you to this rare disease community of patients.
Tom: advocates, caregivers, investigators, and healthcare professionals for their dedicated support and ongoing devotion to raising awareness around the serious and chronic malabsorptive disorder.
Tom: Moving to CMP104 on slide 9, this is a tolerizing immune-modifying nanoparticle for the treatment of primary biliary cholangitis, which is a rare autoimmune disease that causes the liver's bile ducts to slowly deteriorate.
Tom: and can lead to irreversible damage and scarring of the liver, ultimately requiring liver transplant.
Tom: As a reminder, the Phase 2 study is a 42-patient placebo-controlled study evaluating the safety, tolerability, pharmacodynamics, and efficacy of CMP104 in patients with PBC who are unresponsive to UGCA and or Ocalva.
Tom: Top line results will be based on data through day 120 of treatment. A positive signal in liver function markers, in addition to T cell response, would further support the potential for CMP104.
Tom: Top-line data from the Phase 2 proof-of-concept study inpatients with PBC remains on track, and we look forward to sharing top-line results with you later this quarter.
Tom: With that, I'll turn it over to Sravan.
Sroveven: Thanks, Mike. And good morning, everyone. I'll begin on slide 11. As Tom mentioned earlier, Linzess continued to deliver impressive demand growth in the second quarter.
Sroveven: Lenz's volume grew 11% year-over-year in the second quarter, while new-to-brand prescriptions increased 15%, compared with the second quarter of 2023.
Tom: On a year-to-date basis, Linzess extended units and new-to-brand volume growth increased 10 and 16 percent year-over-year, respectively.
Sroveven: Reinforcing the patients and healthcare practitioners continue to choose Linzess in a growing market.
Sroveven: Next, I'll discuss Collaborative Arrangements Revenue on slide 12.
Tom: Linzess U.S. net sales, as reported by AbbVie, were $211 million in the second quarter.
Speaker Change: In the second quarter, Ironwood recorded a $17 million adjustment to collaborative arrangements revenue.
Tom: This $17 million adjustment is comprised of two components.
Tom: Ironwood increased collaborative arrangement revenues by $30 million related to the 2023 LINZES change in gross to net estimate that Ironwood previously reported in the first quarter. As this change in estimate is now reflected in the second quarter of LINZES U.S. net sales as reported by Avdi.
Tom: In addition, Ironwood reported a $13 million reduction to collaborative arrangements revenue in the second quarter to reflect Ironwood's estimate of Linzess Gross Net Reserves as of June 30, 2024.
Tom: With this adjustment, Ironwood's U.S. collaboration revenue was $91 million in the second quarter.
Speaker Change: Before moving on to our financial highlights, I'd like to take a moment to discuss what is happening with Medicaid in more detail.
Tom: Over the past few quarters, we have seen growth in Linzess Medicaid prescription volumes and an increase in Medicaid prescriptions as a percent of our overall Linzess business.
Speaker Change: We now believe the higher-than-expected Medicaid utilization, which we saw in 2023, will also be higher-than-expected in 2024, based on a combination of legislative and market factors which include
Tom: Medicaid redetermination having a lower-than-expected impact on MNTS.
Tom: Ironwood revenue in the second quarter was $94 million.
Tom: The decrease of 12% year over year.
Tom: GAAP net loss was $1 million and adjusted EBITDA was $28 million.
Tom: In June we repaid the $200 million principle of the 2024 convertible notes upon maturity.
Speaker Change: Is it $50 million of cash on hand, and $150 million draw on our revolving credit facility.
Speaker Change: The outstanding principal balance on the revolver was 424 million sorry $125 million at the end of June.
Tom: We ended the second quarter with $106 million of cash and cash equivalents on the balance sheet.
Tom: We continue to believe Linzess cash flows will support our existing portfolio, including the potential for <unk>.
Tom: <unk> launch for the progress.
Tom: On our development programs and repay our debt moving to slide 14.
Tom: We are revising our full year 2024 guidance to reflect additional pricing risk.
Tom: Primarily associated with the higher than expected Medicaid utilization trends I just mentioned.
Tom: As a result, we now expect a linzess U S net sales between 900 $950 million.
Tom: Ironwood revenue of between 350, and $375 million and adjusted EBITDA of greater than <unk> greater than $75 million.
Tom: In the second half of 2024 disciplined expense management remains a priority as we seek to offset topline revenue headwinds to optimize profits and cash flows.
Tom: To wrap up.
Tom: Linzess prescription demand continues to be healthy, but it is currently being more than offset by pricing headwinds primarily due to higher Medicaid utilization.
Tom: Moving forward remain focused on maximizing linzess profits and cash flows until generic entry in 2029.
Speaker Change: In terms of our pipeline I'm excited for the future of Africa, where we see an attractive market opportunity and has significant lifecycle management initiatives ahead of us.
Speaker Change: Furthermore, we look forward to providing an update later this quarter on <unk> 104, and the potential treatment of PBC.
Speaker Change: I think 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 diseases.
Speaker Change: Operator, you May now open up the line for questions.
Speaker Change: Thank you.
Speaker Change: I will now begin the question and answer session.
Speaker Change: If you have bombed ask a question please press.
Speaker Change: Press Star one on your telephone keypad Teresa home and join the queue.
Speaker Change: He would like to withdraw your question simply press star one of them.
Speaker Change: I call the phone to ask your question and then Tony <unk>.
Speaker Change: Pick up your handset im.
Speaker Change: I'm sure that your phone is not on mute.
Speaker Change: Asking a question.
Brian <unk>: Your first question comes from Brian <unk> from Bam preference.
Speaker Change: Please go ahead.
Speaker Change: Yeah.
Brian <unk>: Hey, Thanks, So just a few so as you think about 2025 and maximizing the net economics of Linzess, how do you think about.
Speaker Change: You and how do you think about contracting and <unk>.
Speaker Change: Maybe backing off.
Speaker Change: Widespread preferred access as a means of driving a narrower gross to net maybe sacrificing some volumes, but also.
Speaker Change: Driving better net economics, so just help us understand the thought process as we move beyond this year. So that's number one and then number two on 104 help us level set expectations in terms of what you want to see in order to move forward and then what next steps would look like to the extent that you see.
Speaker Change: And adequate.
Speaker Change: Efficacy signal, particularly on markers of liver function. Thank you.
Mike: Sure. So good morning, David Hope, you're well when we start with the second component on CMT, one of four hand that over to Mike and then Andrew will answer the second question I'm sorry. Your first question regarding.
Speaker Change: The contracting strategy.
Speaker Change: Okay.
David: Yes, Thanks, David.
David: Yep.
Speaker Change: The primary thing we're looking at really is in the top line results for the T. Cell response, we certainly believes that the T cell response in T cell effects will be a leading indicator of the clinical benefit and we will also then evaluate several markers of liver function and the linkage obviously between the T cell response in liver function.
David: Also equally important for us to look at as I said, we are on track to deliver that this quarter. What comes after that is a little bit premature at this stage right. This is the first in human study proof of concept study, we certainly look to learn a lot, but again, we did the deal primarily because we thought we'd have a good look at the T.
David: T cell response and that this T cell response could be a leading indicator for clinical outcomes. So until we get that we will have.
Speaker Change: To wait on what to determined to do after that.
Speaker Change: Thanks, Mike and then Andrew will respond regarding the contracting.
Andrew Davis: Yes, David Thanks for the question.
Andrew Davis: The point is net economics definitely is key for us as we look across the book of business from here at alloy. So I think thats something as we look at our contracting strategy. Both for next year in the future, we'll really be looking at what is the.
Speaker Change: Net economics that get driven over the life of the product.
David: Okay.
Speaker Change: Your next question comes from the line of.
Speaker Change: With Jefferies.
Speaker Change: Please go ahead.
Speaker Change: Hey, thanks, so much for taking our question.
Speaker Change: Africa is hard given the Q1 2025 submission completion timeline do you still expect launch in 2025.
Speaker Change: And then also can you give us some color on how you are optimizing the commercial use Ken I know you alluded to it earlier is there going to be any formulation changes format changes.
Speaker Change: Any color would be super helpful.
Speaker Change: Yeah sure Thanks, Amy and good morning all.
Speaker Change: Take those questions look I think our view on approval could occur.
Speaker Change: In 2025 or early 2026, depending on whether we receive priority or standard review.
David: And our view would be early 'twenty, six and from our perspective.
Speaker Change: With respect to the hit.
Speaker Change: I think it's industry, it's common industry practice.
David: That what's used commercially is different than what's used in clinical trials I think we you would take a very long view on absolutely tied here that we have IP out until 2040, and we want to make sure that the launches as successful as possible.
Speaker Change: So we as.
David: As we can.
Speaker Change: <unk> human factor trials, but learned ways to make the commercial bio kit presentation easier for patient use and we're implementing those changes.
Speaker Change: And so.
David: Not to get to a lot of detail, but I think the goal here is to make it easier for our patients administer themselves.
Speaker Change: Excellent. Thanks, so much.
Speaker Change: Your next question comes from the line of Mohit Bansal with Wells Fargo.
Speaker Change: Please go ahead.
Mohit Bansal: Great. Thank you very much for taking my question and I have to defend.
Mohit Bansal: Different question. So one is.
Speaker Change: It does seem like that the pricing pressure is.
Speaker Change: More than you anticipated in last quarter, you said that it seems like earlier than anticipated and you did anticipate this pricing pressure starting 'twenty five.
Speaker Change: So that's why like I think last quarter. It was more like into 'twenty five onwards, it should be similar to what you were previously expecting but has anything changed in that thought process now that.
Speaker Change: Like how should we think about the revenue growth trajectory versus 'twenty four from now at this point.
Speaker Change: And then the second question is.
Speaker Change: Regarding <unk> zero Fuller.
Speaker Change: Can you just remind us like when you saw the help you understood <unk>, what kind of T cell responses. They saw and then those patients and how could they.
Speaker Change: How could how do you correlate that to the.
Speaker Change:
Speaker Change: With the sickle patient trials.
Speaker Change: So could.
Speaker Change: Could you repeat the second part of that question is did.
Speaker Change: Did you was the question that but.
Speaker Change: The T cell response, the core saw yeah on there.
Speaker Change: I think that was the study.
Speaker Change: No. It was a healthy volunteer study or was it I think it was the PBC study is that right.
Speaker Change: I cannot replace with a 40 patient study.
Speaker Change: I can just put in some pieces of information.
Speaker Change: This is the first in human study for <unk> in PBC patients. This 42 patient study there is no other clinical dataset you may be referring to a study many years ago that was done with the core platform and celiac.
Speaker Change: That data was January celiac because of different auto immune disease.
Holly: Holly kind of valent autoimmune disease right glia Dan.
Speaker Change: Tides of insult for celiac have a lot of different epitopes.
Speaker Change: Driven by a lot of different deaminated, glean and peptides and you can also externally challenge.
Speaker Change: Those T cells with gluten.
Speaker Change: Currently than the T cells that are primarily in the liver for PBC. So there are there are differences across those two diseases, but we certainly think our approach is a valid way to look at the potential benefit of this platform technology in the autoimmune disease like PBC, we're certainly using different techniques given the T cell antigen specific T cell response.
Speaker Change: But that's sort of how it plays out on the different diseases.
Speaker Change: Yeah, and then respect and then with respect to the guidance.
Speaker Change: In Q1, I think as we mentioned we did anticipate higher utilization for the full year 2024, and that was our best estimate at the time.
Speaker Change: Since Q1, we've seen higher than an even higher than anticipated Medicaid utilization of linzess.
Speaker Change: And felt it was prudent to revise guidance and therefore, you can see we've meaningfully modified our guidance to.
Speaker Change: To account for that even higher utilization and that's driven again by the three things we talked about which is even though there are less patients on Medicaid Linzess use continues to increase in terms of our book of business in terms of share.
Speaker Change: Hum.
Speaker Change: And cap removal is pretty significant and then there's also just changes that are occurring on the state level with respect to enhanced.
Speaker Change: Enhanced increased eligibility and then also just formulary changes. So all of that has just led to an even greater increase than we anticipated that started the year.
Speaker Change: For the book of business.
Speaker Change: Got it.
Speaker Change: Yeah.
Speaker Change: And then if you would like to ask a question on the telephone keypad.
Speaker Change: Question comes from the line of Jason.
Speaker Change: Peterson.
Speaker Change: Great.
Speaker Change: Please go ahead.
Jason Peterson: Hi, Thanks for taking my questions just a couple of episodes and I can you just talk about what the remaining gating items are to submitting the BLA.
Speaker Change: <unk> 25, and then just as you continue to get ready for launch what is the work that youre doing what is the feedback that youre getting from from potential prescribers on the on the data.
Speaker Change: Yes, great Mike do you want to tackle that one in terms of outstanding Raining I'm sure al.
Mike: Yeah. So for in terms of what's going on I mean, we've obviously made steady progress in preparing the NDA. We've had a focus on obviously the quality of data package. The early models modules that were working on now will include the non clinical and clinical components.
Speaker Change: We've continued to progress on the regulatory filing in conjunction with the commercial planning activities also have some additional information we've been getting as we talked about in terms of the first application of <unk>.
Mike: Pursues the file we decided to make those enhancements to the presentation of the vial to optimize it commercially and we are in the process of finalizing the commercial supply chain and the supporting documentation for the CMC components of the application and as I said.
Speaker Change: Tom and I, both said, we expect to complete that in the quarter first quarter of 2025.
Speaker Change: And then with respect to the feedback Mike on clinical profile from physicians and other.
Speaker Change: <unk>.
Mike: Yeah, we've gotten great. We continue to get great feedback from external trends, maybe prescribers people their kols key opinion leaders thought leaders in the area.
Mike: We are quite impressed with the fact that we are the first and currently only once weekly to hit the primary endpoint and SBA Saf.
Tom: It's a pretty significant achievement. They certainly I think our tolerability profile is excellent as well as Tom mentioned, we had an AD board to review that with a lot of externals and prescribers and really it was very well received so there's quite a lot of enthusiasm out there and we're looking to continue that that engagement with the prescribers in the community and push forward the submission to get to.
Tom: Market as early as possible.
Jason: Yes, Jason.
Tom: This is Tom.
Jason Peterson: Yes, Andrew to jump in here as well, but.
Tom: We think about next steps this is really about preparing the market and preparing the organization for a successful launch.
Speaker Change: <unk> already initiated some disease awareness programs you know this is really about identifying Vince.
Speaker Change: And making sure that we can get patients into the programs. These patient support programs to get them on therapy as quickly as possible and retain them.
Tom: One of the really.
Jason Peterson: Big pieces of data that we've met nobody ever had access to this implementation of the new ICD 10 codes, which are actually in our labeling a lot of these patients and it's validated how many patients are really out there, but it also allows us to target and really guide our go to market strategy.
Jason Peterson: Which is data that didn't exist before so as the commercial team continues to evolve its go to market strategy.
Jason: We're going to do our best to increase the overall awareness of the disease proactively identify the patients and their location and then how do we align that with our commercial capabilities.
Jason: Certainly the sales force is already in these offices. Many of these offices and these patients are hub services, which is really going to be critical to be able to pull the business through Andrew if there's anything else you'd like to comment beyond that.
Jason: No.
Jason: I think we're excited here, Jason I think we're getting great feedback.
Jason: Yeah.
Jason: Okay.
churn: Your next question comes from the line of churn with capital one. Please go ahead.
churn: Hi, Thanks, Mike could you talk a little bit about how much interaction.
Speaker Change: A discussion <unk> had with patient advocacy groups and the short bowel syndrome disease area would that preclude tide I mean, what sort of responses have you gotten so far and then just sort of.
Speaker Change: Have you already started to talk.
Speaker Change: With Payors.
Speaker Change: On Africa.
Speaker Change: Yeah Yeah.
Speaker Change: We have it.
Speaker Change: Got it alright.
Speaker Change: Please go ahead.
Speaker Change: Yes, so we certainly have a strong link with the patient advocacy groups.
Speaker Change: This is a disease that has a very vocal and actually longstanding advocacy among patients started way back decades ago.
Speaker Change: I would say only foundation, so theres a lot of good networking out there by patients and the feedback we've gotten from patients is very enthusiastic many have participated in our trial.
Speaker Change: The compliance in our trial has been very high people have talked about how nice if I could say it that way the drug is from a utilization perspective, they don't suffer some of the adverse effects that no other agents might be a little more comment at achieving that.
Speaker Change: That overall has been very very good and obviously the weekly administration is just a big bonus in terms of if youre not on parental support seven days a week and you have to take something every day, that's one position, but if you really on the on print shelf sport four or five days a week.
Speaker Change: Take something more than that can be a little bit more work than you might want to do and so the opportunity for the patient population that just have a weekly administration really broadens the utility across the the spss community, but in general I can say, it's been very very positive.
Speaker Change: Okay, Great and Trevor and I have one follow up just on the Linzess JV commercial.
Speaker Change: Commercial margins.
Speaker Change: They were about 62% this quarter do you think that number.
Speaker Change: Stay at around that figure in the back half of this year.
Speaker Change: Yes, so look from.
Speaker Change: From a commercial margin perspective, I think since the spin.
Speaker Change: Tim I think the company has been very focused on maximizing the brand profit and then improving it as much as possible I think we had opened this year I think the based on our guidance, we thought would be close to 70%.
Speaker Change: And I think our goal is I think our guidance reflects our best estimate in terms of our.
Speaker Change: Our profit.
Speaker Change: As of now and where we sit today.
Speaker Change: Okay.
Speaker Change: I know you you did comment about the $17 million gross to net adjustment, but youre not going to get that in future.
Speaker Change: Future quarters. This year is that right.
Speaker Change: Well I think the point of that is that we've adjusted our guidance down.
Speaker Change: <unk> thousand $995 million.
Speaker Change: Net sales for Linzess.
Speaker Change: Accounting for increased Medicaid utilization throughout the back half of the year.
Speaker Change: Yeah.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you Allen.
Speaker Change:
Speaker Change: Disconnect.
Speaker Change: Please wait the conference will begin shortly.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Okay.
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Speaker Change: Yes.