Conference Transcript - IRWD 2026-06-04

Amy, Analyst — Jefferies

Okay, awesome. Let's get started. Hi, everyone. Thanks so much for joining us for day two of the Jeffries New York Health Care Conference. I hope everyone's still hanging in there. I'm Amy. I'm the biotech analyst at Jeffries. I have the pleasure of hosting the Ironwood team. We have Tom McCourt, chief executive officer, and Tammy Gaskins, the chief commercial officer. Awesome. I will turn it over to them for opening remarks.

Tom McCourt, CEO

Well, first of all, I want to thank Amy for having us. We're having a very productive day here. And I think where we are right now with Ironwood is this has really been a turnaround year for us. As you know, we ran into some headwinds due to some legislative issues on pricing that we made a very bold move with our WAC strategy that really has had a huge impact on our revenues. And we're looking at probably in net sales as far as growth. And we're continuing to make great progress in clinical profile. And I think the second piece, obviously, is when the FDA, however, they've been continuing to maximize. The second is...

Amy, Analyst — Jefferies

Awesome. That's super helpful. Let's actually start with apraglutide. Given there are, I mean, like a few days ago, you saw the Lilly deal, right? It seems like there's strategic interest, especially in the GI space. I think the deal value is around $1.3 billion. We talked about this Hami asset before. I believe it's quite long-acting. What is kind of the read-across to you from the deal, both in terms of the deal value and then in terms of the interest in this SPSIF or beyond space?

Tom McCourt, CEO

Maybe I'll start now with Tammy. She's certainly the expert in this category. I think it, one, it's brought tremendous new light to the GLP tube mechanism. Questions, saying what's going on, where is everybody going? And clearly this is looking more and more like a platform opportunity, where it's going to be beyond just shortfall syndrome. Clearly, Lilly kind of communicated that indirectly as far as where, I'm not exactly sure where they're heading. But it's certainly, you know, we're looking at those opportunities. Do you combine it with a GLP-1 to manage muscle wasting? Do you combine it with a biolasticity? There's a number of options, you know, as far as a life cycle management play that, you know, we're still really understanding. That being said, it's very early on. There's always, when you have a drug that long-acting, if you've got a tolerability issue, you've got a real problem. And I think the thing, but it's got placebo-like tolerance. We're spurring a lot of interest. We're getting a lot of inbound.

Amy, Analyst — Jefferies

And then Tammy.

Tammy Gaskins, Analyst — Other

If I could just add, Amy. I mean, we're certainly as excited about apraglutide and the differentiated clinical profile that we believe it will have if approved. So we have already had positive phase three data, to your point, in SPS-IF. And right now, we're certainly further advanced. We're working on initiating this month the second confirmatory trial to eventually move forward with an NDA in SPS-IF. And as you were saying, the HANMI asset has been in phase two since 2021 and still doesn't have any human efficacy data. So we're certainly ahead there. But again, it also makes us, as we've already been excited about the GLP-2 mechanism and platform, we believe there is more potential there to explore beyond SBSIF alone.

Amy, Analyst — Jefferies

Awesome. And when would you start potentially looking at indications beyond SBFIF? and can you go over a couple ones that are on your short list?

Tom McCourt, CEO

I mean, I think right now we have to focus on getting SPS up and running and enrolling very fast. I mean, that's going to be absolutely number one, two, and three priority. You know, we certainly will begin looking at probably animal models, et cetera, as far as additional areas of interest. I think IBD could be one of those areas. But, you know, we'll certainly, you know, start examining that. But I think right now we really need to get our clinical trial, our confirmatory trial run.

Amy, Analyst — Jefferies

Okay, great. And then since you reported the STARS, now I guess STARS-1 trial, you've given out a couple of additional cuts on interaltonomy, you know, long-term durability. Can you go over, one, the physician reception, and then, two, the key learnings as you look at, you know, people on extended duration of apriclutide? was there anything that was surprising or was there anything that was interesting yeah so we

Tammy Gaskins, Analyst — Other

continue to hear very positive feedback from KOLs from our investigators from physicians and market research about the data from our initial stars trial we're calling it stars one we call it 007 as well as we have an ongoing long-term extension study called stars extend so if I just go back to the original Phase III positive primary endpoint, double the rate of placebo, significant p-value, 0.001, so really impressive results in terms of reducing relative change from baseline and weekly parental support volume, which can be really burdensome for patients. Many are on for 10 hours a day, 5 to 7 days a week, so it's a big burden for these patients. But what we're even more excited about is in our STARS-XTEND trial, the longer patients are on apiglutide, the more improvement and benefit we see. And one of our key data cuts, as you mentioned, analyses, was looking at one in five patients actually achieving enteral autonomy. And that's the ultimate goal, to have complete weaning. So we continue to see the benefit together with the only one to show once weekly administration and achieve these results, but also with a good tolerability profile that we know those three things together are going to be key to not only differentiating apiglutide, but really growing comfort and use of the class and improving persistency levels along the

Amy, Analyst — Jefferies

Awesome. um you kind of talked about differentiation right um i i think um now uh there is probably more of a need to differentiate more than ever because it looks like you know there could be gatics generics unless please update us if you heard anything new uh coming this year or next year um you have glupoglutide and for now it looks like zealand's still committed to running that that trial um can you talk to us about kind of physician feedback on what the differentiation factors are i think You mentioned safety and, you know, the ability to kind of reach internal autonomy, especially in a real-world setting. But I just kind of like what is mostly resonating in your discussions?

Tom McCourt, CEO

I think maybe it starts, so I think it starts with what's the unmet medical need, right? And, you know, when you look at GATICS, whether it's, you know, the branded product or generic, the challenge is you can't, they can't keep patients on the drug. I mean, 50% of these patients, you know, and that's mainly due to the fact that if you miss a couple doses, it really can mess up the problem. And, you know, there's a fair bit of gastric distress, so patients just don't tolerate the problem. So they can't really, mechanism where, you know, with APRA, and it's so convenient, so they do, the generic doesn't solve the problem.

Tammy Gaskins, Analyst — Other

Yeah, no, you said it absolutely right, Tom, in terms of a lot, people understand that GLP-2, the GLP-2 mechanism is helpful for these patients, but they also have to be motivated to want to start because they believe that in doing so, they're going to see a benefit. They're going to be able to take the therapy and tolerate it and stay with it, and that's really correct. So it's the combined profile of the ease of administration, the efficacy that we're seeing with days off therapy really being the North Star together with the tolerability that's going to set help set afroglutide apart in the class and as is really critical to grow the utilization of the class overall too and you mentioned generic so you know our our projections our commercial forecast course does assume that there's a generic GATX on the market as well as glaboglutide from a competitive company but with that we still believe that glaboglutide will drive to to class leading share because of that profile

Amy, Analyst — Jefferies

okay are you aware of any updates from the generic front only so from a US

Tammy Gaskins, Analyst — Other

perspective the only thing that's been disclosed publicly which was later last year was from CIPLA that they anticipate have launching a generic in the 26 27 timeframe, but we haven't received any further or heard publicly any further updates on that this year. So it was possible for a generic to come into the market since 2023, but that hasn't happened. And based on research and just precedent in the rare disease space, you know, we think it's unlikely this would be a multi-source generic market because it takes a lot of patient support not just from a reimbursement but also from a clinical management perspective to support these patients because as they're starting GLP-2 therapy, they also have to have their parental support adjusted and managed throughout the process. So it's pretty complex and so that's why we believe that it's not going to be a multi-source generic market. Okay, awesome. Just

Amy, Analyst — Jefferies

going to your STARS-2 trial, I will say we were going into, we were hoping for potentially a smaller trial, shorter trial, a bridging trial. It looks to be more like a, almost like a full confirmatory trial and you committed to using the same dose. I think there were some differences. You might not go for the CIC subset, which, I mean, we've talked about before, wasn't even necessarily required by the FDA, right? So can you talk to us about kind of your trial design and what you think you could do differently this time. You are going for a, you know, slightly lower than planned dose, but similar to what your STARS-1 trial showed. So what is the, like, it's a very variable indication. So what is the kind of comfort level that you can replicate what you saw in STARS-1?

Tom McCourt, CEO

I think we're very confident we'll replicate. I think we believe, you know, based on all the work we've done, while there was a lower dose that was actually delivered to the patient, was consistent across the board, and clearly we saw sound efficacy as well as very, very good. I think, you know, this is very similar to the first trial, you know, with the primary endpoint is basically the same. I think it will only be a 24 as opposed to a 40, which GLEP is going to be. So I think we've, and I think the real opportunity here for us is how can we accelerate enrollment. Yeah. And for us, you know, we certainly have all the current centers up and running from STARS Extend, but we're going to increase the number of sites, particularly in the U.S., because keep in mind, Vector Bio was a European-based company. Most of their sites were in Europe. So we think there's clearly a very significant opportunity in the U.S. to expand the sites. And also with, you know, certainly the concentration of electronic records as well as AI, I think we can identify and enroll patients, you know, faster than we did before.

Amy, Analyst — Jefferies

So I think you've talked, in terms of timelines, you said you would file before year-end 29, right? It looks like from GLEPA's clinicaltrials.gov, it says, like, late 2028. But you're saying, like, maybe that's a placeholder. So, like, in terms of is there an ability to kind of accelerate timelines before, you know, that year-end 2029 timeframe? And then how do you think you'll enter relative to GLEPA?

Tom McCourt, CEO

Yeah, well, we'll see how the recruitment goes, right? I think we do see a real opportunity to accelerate enrollment by identifying patients faster and getting them to study centers, which, you know, we've been around. So I think this is really about it.

Tammy Gaskins, Analyst — Other

Yeah, just to add, Amy, because of the fact that we do have the experience, we had the largest trial to date in SBSIF. We had 164 patients, 68 sites. So we certainly have the foundation and the experience in that. But also, because the STARS-XTEND trial is ongoing and clinicians know these patients are seeing positive results, we do expect there's going to be enthusiasm for enrolling in an apoglutide trial. And all those things are going to be critical to getting this done as quickly as possible and ultimately out there for patients.

Amy, Analyst — Jefferies

Awesome. Super helpful. This is, we've talked about this before, but do you, because you've done some kind of dose relationship, you know, from your current data, also from the phase, you know, earlier, like the phase two as well. Do you think you're leaving efficacy on the table by going for a slightly lower dose that replicates TARS-1? Like, why don't you just run a higher dose trial?

Tom McCourt, CEO

Well, I think, first of all, A number one is we want the strongest benefit risk profile I can possibly have when I go in and talk to the FDA. Right. Right. And we have a very, very good benefit risk profile right now. The last thing I want to do is compromise that. Now, are we leaving efficacy on the table? Possibly. Will we explore that? Absolutely. Careful that something doesn't pop up on the safety side that I can't explain. So, you know, with the higher dose. Right. That's

Amy, Analyst — Jefferies

always going to be the risk. Well, you guys tested the five milligram dose in the phase two, right? the open-label phase 2. And then even earlier than that, there was like an option of a 10 milligram versus 5. So I mean, it's like, I guess what is, what are the safety risks that you can

Tom McCourt, CEO

think of? Well, I look at the other GLP-2s, right? I mean, you got fluid overload, which appeared to be a problem with some of the GLP-2s. You had gastric distress, you know, which is a significant problem. So, and the question is, you know, those were small numbers, right? There was a dose-ranging study done, but those were relatively small doses, and I think 5 mg probably was the right dose to use at the time, but I want to be able to leverage the safety database of the 3.5. Now, we'll be exploring a dose-escalation study, so for instance, we have, whatever, over 150 patients in STARS extent, those people that are partial responders, should we escalate I think those are the things we'll be talking to the FDA on to say, can we get there faster with an existing population? Interesting. Which would be very doable.

Amy, Analyst — Jefferies

So is there a possibility if you can kind of build in some dose escalation into your open-label extension that you can talk to the FDA and potentially get that on label, given you already have existing Phase II open-label data with that dose, right?

Tom McCourt, CEO

You know, I can't speak for the FDA. But I think, again, I think the data rules the day. So, you know, if we see, you know, better efficacy and comparable tolerability, I think FDA would be leaning in on that because this is, you know, an enormously burdensome disease. And, you know, if we can increase enteral autonomy or grab a couple more days a week off parental support, that's enormously beneficial to the patients. And FDA recognized that, and they're very pleased with the safety profile.

Tammy Gaskins, Analyst — Other

But the first principle being confirmatory, Amy. So we have to confirm positive results we saw. And it's the totality of those data sets that will give us a comprehensive package to help us to get to market as quickly as possible at a dose that we know can benefit patients.

Amy, Analyst — Jefferies

makes sense. I think another part of apraglutide's profile that was, that stood out is the low rates of ISRs, right? Yeah. And you're seeing with glepaglutide, I mean, they had almost like multi-fold, like much higher rates of ISRs than you guys, which could be because of the ADAs. And you know, you're seeing high rates of ADAs as well, but have you kind of disclosed your rates of ADAs? And then if there's any kind of molecular differences between apra and glepa?

Tom McCourt, CEO

Yeah, the answer is we've disclosed everything that we have.

Amy, Analyst — Jefferies

Yeah, right. Okay, awesome. I guess looking at the market, I remember, you know, when we last talked a few years ago about the ICD-10 code, it was, I think, recently instituted, and that was still kind of gathering patients, right? And then we talked about how these patients are generally, you know, interspersed, not necessarily even managed at academic centers, maybe even managed by like home health nurses or nutritionists. So what is the most recent kind of update on how many diagnosed patients there are with SBSIF? And then your 700 million number, I know Tammy, you talked about the split, but what does that imply in terms of how many players and then kind of how much penetration or market share you're assigning for each yeah so in terms of if i start with

Tammy Gaskins, Analyst — Other

patient population and icd dead code so they went into effect a little over two years ago so we are seeing them be utilized more they're still not up to the levels that we would ultimately want them to to be but we because of that we are seeing specifically in the u.s increases just in the prevalence of SBS overall now when we get to that 700 million dollar Amy that's where we look at about 8,000 patients in the US being what we would call GLP2 eligible and we define that as being on parental support three or more days a week okay that's what the studies have done and the labeling of the currently available therapy but of those patients based on market research and then some claims data, we guess that at any given time there's only about 2,000 patients on GATEX, as I mentioned. So for a variety of reasons. So we definitely see, not only with the differentiated profile of apoglutai, but also with Share-A-Voice, being out there, and even if we have more than one company selling a GLP-2, that's going to help increase awareness, connect those dots to help identify patients so we do see class utilization growing as part of that forecast we do see persistency improving with once weekly administration and the tolerability profile over what we see with GATEX today and as I mentioned we seem to get we expect to get to class leading share I'm not going to give you a specific percentage number but we configure that in a market of having gatex slash a generic gatex glepa and apiglutide obviously that only um increases or improves if any of those things don't happen any of those other

Amy, Analyst — Jefferies

products don't get to market okay awesome makes sense um maybe just going to lenzess um post the pricing reset uh you're still seeing growth right can you kind of go over what segments you're seeing the most growth from in terms of indications, and then maybe that payer channel or whatever relevant other metrics.

Tammy Gaskins, Analyst — Other

Absolutely. So first, if I could start just with a little reminder that our first quarter results that we did report 272.5 million in U.S. net sales, which was a 97% increase year-on-year, so I'll just start with that. To give a little context or foundation, we do, for Lynn Zess, our largest books of business are Medicare Part D, followed by commercial. And for 3Q1, growth across all channels was in line with our expectations, including, as we reported in Q1, we had 5% demand growth year on year, which was slightly, higher than what we guided to with low single-digit, but still in line with our expectations. Okay, so this year, what really builds to our guidance, our full year net sales guidance is a combination of improved net price and low single-digit growth, which we guided to with the expectation that with the WAC change and elimination of inflationary rebates across channels that this could cause some channels like Medicaid to possibly shift make a shift in demand utilization versus prior year so we still remain confident in our guidance and always look at demand closely but just to give a little context on on that guidance that gets us where demand fits in to get as to that full-year guidance of between $1.125 and $1.175 billion.

Amy, Analyst — Jefferies

In terms of, I guess, the cadence for growth for the rest of the year, are you kind of thinking about growth being consistent to what you saw from Q4 to Q1? Or are there any seasonality aspects that we should think about? And then from a gross-to-net perspective, is there any changes in dynamics that we should be considering?

Tammy Gaskins, Analyst — Other

Yeah, so from a sequential quarterly net sales perspective, we expect that there will be significantly reduced variability from quarter to quarter because of the change in net price and having more consistent net price across channels year on year. So what that consistent net price does is help assure that you have less impact on a quarterly basis from shifts in this mix of business relative to gross to net rebate reserve accruals versus actual units dispensed in a quarter. So less sequential variability, if any comes in, it will be more from a year-on-year quarterly variability perspective because of differences in phasing of gross net rate reserves year-on-year.

Amy, Analyst — Jefferies

Okay. Okay, that's super helpful. And then just maybe about the growth that you're seeing, are these coming from, I guess, the benefit in pricing and then maybe insurance giving you guys, you know, more favorable coverage or reduction of, you know, either approval rates going higher or are these coming from like like the fundamental population

Tammy Gaskins, Analyst — Other

demand as as well so this is my favorite answer to give and tom who's uh who launched the brand can certainly add in so the good news is that it's so with the price change one of our key principles was to maintain access which we have so we've uh had class leading access for the Linsess for a long time across both commercial and Medicare Part D, and we have maintained that through this change. But we know Linsess is market leader, our ex-market leader, after we're in our 14th year on the market. The clinical profile, the experience that physicians and patients have, it's really what continues to drive that. And the IBSC and CIC category continues to grow in the adult population because we do You see an aging U.S. population and more factors contributing to more patients presenting to their HCPs coming out of the OTC category looking for more relief from their symptoms. Tom, anything you want to add?

Tom McCourt, CEO

I think that's spot on. I think it's been, you rarely see a brand like this, that it's this kind of linear growth for 10, 12 years. I had the great good fortune to run Prilosec years ago. I haven't seen a brand that looks anything like this, which says a lot about how big the market is and how significant the unmet medical need is. But I think this has become almost a tipping point where we're at because it's so well understood. It's the knee-jerk go-to brand, and it's a great place to be. And as a market leader, our number one job is to continue to grow the market and capture disproportionate share. And I think we've done that quite well. As you know, the margins get better over time. And we're really, I think, in a very good spot to finish the run. Now the focus really is on post-LOE strategies. And Tammy and the team have spent a lot of time looking at how do we hang on to as much business as we can post-LOE and certainly the OTC plan, which is all on the table. So I think now this is really about, you know, doing the work and making sure that we can hang on to those revenues as long as we can.

Amy, Analyst — Jefferies

And when can we get an update on, I mean, have you talked to the FDA about it already? What type of studies do you need? And, I mean, I'm also assuming, like, given your pricing change there, you're probably seeing some sort of price elasticity as well, which kind of fits well into OTC, right? So any update there?

Tammy Gaskins, Analyst — Other

So we continue to talk about and explore this with Abby, our collaboration partner on Linzess, as you know, and look at this for the future. But as we make more progress in that, we will be certain to provide updates at that time. But just know right now it is something we are working on very diligently.

Tom McCourt, CEO

Yeah, and I think the path, you know, obviously the first player here was Miralax that went over the counter. I think this trial design is very straightforward, if indeed we even need to do another trial for occasional constipation. But it's generally a two-week trial. These patients can be recruited and enrolled very rapidly. So I think it's, you know, because the safety profile is so strong and lends us, I think this will be a pretty reasonable move.

Amy, Analyst — Jefferies

Okay, that makes a lot of sense. And then maybe just finally a financial question in terms of, I mean, you had like $200 million debt tranche, right? It seems like you'll be fine for that. General de-levering, and then maybe just from a management perspective, hiring for the new CFO, your plans for that and your vision.

Tom McCourt, CEO

I mean, obviously losing Greg was unfortunate, but we're all cheering for him. But he also left the team in very good shape. We have our interim CFO who has been a 10-year veteran here. He was our controller. He's our chief accounting officer and extremely capable. So right now, he's the acting CFO, and we'll evaluate that as it's come. But I don't think we're missing a beat with regard to the CFO role.

Amy, Analyst — Jefferies

Amazing. Well, thank you so much for the Iowa team. Thank you so much, everyone, for being here.