Ironwood PharmaceuticalsIRWD reported adjusted earnings of 36 cents per share for the third quarter of 2026, surpassing the Zacks Consensus Estimate of 30 cents. The company had reported adjusted earnings of 24 cents per share in the year-ago quarter.
Total revenues in the third quarter were $133 million, which missed the Zacks Consensus Estimate of $149 million. Revenues, however, rose around 9% year over year.
Shares of Ironwood were up 6.9% yesterday following the better-than-expected earnings as well as a raised 2026 outlook.
Year to date, shares of Ironwood have risen 19.6% against the industry's decline of 0.8%.
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IRWD's Q3 Earnings in Detail
As reported by its partner AbbVieABBV, Ironwood's sole marketed product, Linzess (linaclotide), generated net sales of $324.9 million in the United States, up 3.2% year over year. Sales growth was driven by higher prescription demand, partially offset by lower net pricing due to unfavorable rebate reserve adjustments.
Total prescription demand for Linzess increased 4.9% year over year during the third quarter.
IRWD and ABBV share Linzess' U.S. brand collaboration profits and losses equally.
Ironwood's share of net profit from sales of Linzess in the United States (included in collaborative revenues) totaled $129.9 million, reflecting an 8.6% year-over-year increase.
Ironwood also has agreements with two partners, Astellas Pharma and AstraZenecaAZN, related to the development and commercialization of Linzess in Japan and China, respectively.
Astellas and AstraZeneca have exclusive rights to develop and market the drug in their respective territories. Both companies are liable to pay royalties to Ironwood on net Linzess revenues earned in their regions.
Ironwood's royalties and other revenues were $3.1 million in the third quarter of 2026, compared with $2.5 million reported in the year-ago period.
Total cost and expenses (including research and development expenses, selling, general and administrative expenses and restructuring expenses) in the third quarter were $39.9 million, down 14.3% year over year.
Ironwood recorded adjusted EBITDA of $97.9 million in the reported quarter, up 19.7% year over year.
As of Sept. 30, 2026, Ironwood had cash and cash equivalents worth $86.4 million compared with $79.1 million as of June 30, 2026.
IRWD's 2026 Guidance
Ironwood raised its full-year 2026 financial guidance, reflecting higher Linzess sales expectations and strong profitability.
The company now expects total revenues between $485 million and $510 million, compared with its previous guidance of $460 million to $485 million.
U.S. Linzess net sales, recorded by AbbVie, are now projected between $1.20 billion and $1.25 billion, compared with the previous expectation of $1.15 billion to $1.20 billion. The updated outlook indicates more than 35% year-over-year growth, supported by improved net pricing and mid-single-digit prescription demand growth.
Ironwood also raised its adjusted EBITDA guidance to more than $350 million from the previous projection of more than $310 million.
IRWD's Recent Key Updates
Ironwood is developing its next-generation GLP-2 analog, apraglutide, for treating patients with short bowel syndrome ("SBS") with intestinal failure ("IF") who are dependent on parenteral support ("PS").
The confirmatory phase III STARS-2 study evaluating apraglutide in short bowel syndrome with intestinal failure (SBS-IF) is now actively recruiting patients. The primary endpoint of the STARS-2 study will assess the relative change from baseline in actual weekly PS volume at week 24 in the given patient population.
Subject to positive study results, Ironwood plans to seek regulatory approval for apraglutide in 2029 while exploring opportunities to accelerate its development.
Last month, Ironwood announced that its chief commercial officer Tammi Gaskins will become CEO, effective Jan. 1, 2027. Current CEO Tom McCourt will retire from his executive position but remain on the company's board of directors.
Ironwood Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Ironwood Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Ironwood Pharmaceuticals, Inc. Quote
IRWD's Zacks Rank & Stock to Consider
Ironwood currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the drug sector is Collegium PharmaceuticalCOLL, currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Over the past 30 days, estimates for Collegium Pharmaceutical's 2026 earnings per share have risen from $7.18 to $7.39, while estimates for 2027 have increased from $5.78 to $6.84 during the same time. COLL shares have plunged 45.7% year to date.
Collegium Pharmaceutical's earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with the average surprise being 10.53%.
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This article originally published on Zacks Investment Research (zacks.com).
