H ey, everyone. Welcome to the 2024 Jefferies Healthcare Conference. My name is Amy Li. I am a biotech analyst. I have the pleasure of welcoming Ironwood Pharmaceuticals. With us is Sravan Emany, the Chief Financial Officer. I will turn it over to him for any introductory remarks.
First of all, Amy, thank you so much for inviting us here to the Jefferies Healthcare Conference. It's Ironwood's first time attending, so really pleased to be here and excited to be here and have this opportunity to present. Ironwood Pharmaceuticals, for those that are unfamiliar with our story, we're a GI-focused healthcare company. We've got one marketed product in LINZESS, which is for the treatment of IBS-C and chronic constipation, and functional constipation for children between the ages of six and 18 years old. It's a blockbuster drug. It's a billion-dollar-plus drug. We split the brand profits 50/50 with AbbVie. They have been our partner. We've been on the market for over 12 years. By far, number one market share in the United States for the treatment of IBS-C.
I t's a great brand, and it produces a lot of profit and cash flow for the organization. Last year, we acquired a company called VectivBio for a little over $1 billion. VectivBio brought to Ironwood apraglutide, which is a treatment for Short Bowel Syndrome, which affects about 8,000-10,000 patients in the United States, about 17,000 patients globally. It's a very rare GI-related disease. We just read out phase III results earlier this year, which were really exciting. We've met our primary endpoint with real statistical significance, and our first two key secondaries. W e're excited to file that drug, and then launch it hopefully by the end of next year. Lastly, we've got CNP-104, which is a treatment for primary biliary cholangitis, which is in phase II, which we'll read out results later this year in the third quarter.
Excellent. S tarting off with apraglutide, you presented full data at DDW. P ost the data, what has been the physician's feedback? W hat have they said relative to, one, how they're going to think about their prescribing practice, and two, how they think about the data in context of the competitive landscape?
Yeah. Well, thank you. F irst of all, super excited is I think the response. It's overwhelmingly positive from what we heard from physicians. We were just at Digestive Disease Week, which is the largest GI healthcare sort of physician conference. A few weeks ago, w e were able to present some additional data beyond our top-line results which we reported earlier this year.
Th en the docs have been anticipating a once-weekly therapy for a long time, and I think the fact that we were able to deliver a couple things, one, be able to deliver a strong efficacy with respect to 2x our placebo response, be able to deliver rapid onset of sort of benefit to patients, so e arly response in terms of the first couple weeks. We had a lot of volume of high responders, you know, lots of patients that had multiple days off therapy, w hich is really important.
T hen I think the safety and tolerability data, which we also released, it's essentially equivalent to placebo. I think the overall package of that, I think is really exciting for physicians and having a tool in their toolkit to help manage these patients that are high users of healthcare and specifically parenteral nutrition. Giving them something that can help reduce that burden, and something that they feel like will work and do it in a way that's tolerable and safe, and in a way that will be consistent for those patients, I think they're really excited about.
Excellent. I n terms of the data, one, what are physicians most excited about ? B ecause there's a couple of moving parts, right? For those of you who aren't familiar, the indication is in short bowel syndrome with intestinal failure. A lot of the patients are on a good amount of, you know, parenteral support, and apraglutide, as well as other GLP-2's help people kind of wean that off. Apraglutide is a once-weekly drug. T hen, you know, there's Gattex, which is once daily, and then there's another competitor, Glempa, that's a twice-weekly drug.
Yeah.
There's been data that's put out. I mean, it's hard to compare because it's quite a heterogeneous population. I'd love to hear how doctors are thinking about it. I f you look at just the top-line data, Gattex is 11% parenteral support reduction at 24 weeks. Apra is around 13%. Glempa is around 18%. Do doctors see that as actually clinically different, and how are doctors thinking about a once weekly approach versus some of these other administration methods?
Yeah. L et me just take a big step back, w hich is, we ran the largest global trial ever, s o we had 164 patients, 68 sites, 18 countries. That's a multiple of the other two trials. Cross-trial comparisons are naturally fraught, especially they're even more fraught when you have a heterogeneous patient population like this. T hen when you have the N, sort of the number of patients in each trial, the sample size being so different and ours being so large relative to theirs, i t's very difficult and challenging. We also all tried to measure different things, right?
Yeah.
We measured percent reduction you know, relative to baseline in terms of parenteral support volume. That was our primary endpoint. Gattex tried to focus on clinical responder definition, which was something that existed , you know, 10 years ago when they ran their trial.
Yeah.
Glempa did total volume reduction, s o all different measures altogether. When you look at our thing, and I think you can compare all you want about them, I think what really matters to these clinicians is, does our drug work, r ight? I think they look at apraglutide, and they say, "Oh, it's 2x placebo." W e run these trials with a placebo for a reason, and our placebo-adjusted response was the largest y ou can say. Y ou can look at multiple individual data points, but in aggregate, our data is clinically the best. It's 2x placebo response. W e feel really good about that profile. We really feel good about the overall, a nd then clinicians and physicians are really focused on the overall benefit to patients.
A gain, like I said, we're really excited about a once-weekly therapy. The fact that it worked and worked so well, and then I think the high responder data was really, really important to them because they say, "Okay, I could put a patient on this therapy and they have the chance to get multiple days off therapy," is really what they're looking for, not just one day. There's like real benefit, and I think we were able to show that and I think the client's factor here. N ow, I know Gattex, we talked about their trial, t hey've had 11 years now of real-world data being on market commercially.
Yeah.
Right. W e're also talking about something that there's actual real-world evidence in terms of prescribing and treatment of those patients. I think what these physicians want is a therapy that they can have a high level of compliance with their patients, and an ability for them to see real benefit. I think apraglutide, more than anything else, I think from the data that we've presented, they see that that's available to them.
Yeah.
That's what they're really excited about, and I think that's what they care about more than they care about individual small differences in one or two cross-section or cross-tabs of our data. It's d oes the drug work? Do patients see benefit? I think we've proven that resoundingly.
Excellent. Y ou mentioned something about compliance, and I think it's a pretty, you know, important point, given Gattex, about half of these patients discontinue after a year.
Yeah.
T he data at DDW, I think you were showing mid-single-digit discontinuation rates and relatively low ISRs. I would say probably one of the lowest among all the competitors that we've seen so far. O ne, how are you thinking about that in terms of the durability out to time? A lso, how do you think about that as it feeds into kind of the real-world efficacy when you factor in compliance to some of these agents?
Yeah, and I think that's a great point. We're very pleased with the overall profile here. I think the rapid onset that we saw of treatment in the first 8 weeks, in the first 16 weeks of our trial, gives I think physicians real confidence that if they put their patient on therapy, that they're going to see that benefit. That's one. Two, the once-weekly administration, it's not just convenience.
It is also something that is small, i t reduces the overall burden on the patient. If you have a patient that's on parenteral nutrition 5 days a week, having a therapy that's 7 days a week on top of their 5 days of parenteral nutrition to try and get a day off , y ou may be willing to do it to get down to 4 days of parenteral nutrition. I f you're on 3 or 4 days, that's a lot.
Right.
B eing able to provide access to a therapy that's only once a week, that allows them to be able to get a response that's really fast. T hen ultimately, it's hard to say this now, but I think one of the things we plan to do and do really well, just knowing our commercial team and our commercial model, is really support these patients once they're out of the doctor's office.
Right.
Whether that's through access and support or actual, you know, coordination with their nutritionist and/or care provider, I think being helpful in that regard will all be important to maintain patients on therapy.
Awesome. M oving on to the filing, one, can you give us an update on timelines for the filing? N umber two, expectations for the label. I know, you know, in your trial design, you split out stoma and CIC patients. Do you expect to get a broad label, and what sort of precedents have we kind of seen , you know, on that?
Yeah. I'll start with the simple and direct answer, which is, we anticipate getting a broad label. We anticipate having a label for both CIC and stoma patients. While we did separate out and run a separate arm for a secondary endpoint of CIC patients, our primary endpoint had both patients in there. It was both CIC patients and stoma patients, and we met our primary endpoint with a 2x placebo response. With both CIC and stoma patients contributing to that endpoint, it wasn't just one component, w hich wasn't seen in other earlier trials, specifically Gattex's. R eally, I think that we feel a high level of confidence, given the Gattex regulatory precedent, that we'll have a broad label here for apraglutide.
Okay, perfect. T hen you have previously put out a $1 billion + peak revenue estimate for apraglutide. Can you go over the underlying assumptions in that number?
Sure. T his is something that I think as time passes on, we get greater confidence in as a commercial team at Ironwood. Our original estimate was about 8,000-10,000 patients in the United States. To get to $1 billion, need roughly 2,000 patients on therapy at Gattex's pricing, which is a little bit over $500,000 a year per patient. S imple math, that's $1 billion. The idea, I think as we've gone on, and one of the things that's been an interesting development for us, is that the government started tracking ICD-10 codes for short bowel patients. We now have, after I think that started late 2023, about seven months in, we're already at 10,000 patients plus and counting, and we're growing.
T he number of patients that we have in our patient population, I think the low end of our market is kind of gone or we've actually tracked these patients. More importantly, I think one of the things that we've seen is that these patients aren't just in clustered in big metro areas at the major sort of centers, they're out in the community. O ne of the things that we have, and given our our pretty sizable sales force, Ironwood has 90+ sales reps that focus on the top prescribing gastroenterologists in the country, through LINZESS, where they detail LINZESS. We have a depth of relationship. I mean, most of our sales force is tenured well over, you know, 8+ years.
The vast majority have been with us since launch. T hey have access, and they know these doctors. We can identify where these patients are, and they're in Mississippi, they're in St. Louis area, they're in, you know, Kansas, right? W e know where they are, and we can track them and we have reps that cover those spaces. I think we feel really confident in our ability to identify these patients, the profile of our drug, which again in aggregate, we think is best in class and be able to have relationships with the GIs, that we're able to get 20% market share, which is getting 20% of, you know, 2,000 patients on therapy, which is how we've always thought about it.
Yeah, excellent. Y eah, so the 10,000+ patients, that's I think one of the difficulty, you know, is trying to size up that market. A s you alluded to, the ICD-10 codes only came on, you know, recently.
Sure.
A s you guys are learning more about the market, how are you thinking about kind of apraglutide positioning? During our KOL calls, I think we've had, you know, physicians say, "There is a mix between CIC and stoma. Certain patients kind of resolve spontaneously, whereas certain patients will get on a GLP-2 and is needed." H ow are you thinking about kind of positioning, and is the market bigger than you previously expected?
Well, I think it's already starting to trend towards the upper end from a market size perspective, of what we thought. I want to be very clear and definitive, that we think the GLP-2s work for both patient populations. W e think we'll get usage in both patient populations, specifically apraglutide. W e think physicians here and in our conversations with physicians, their willingness to use it for CIC patients , you know, I think they're very willing to do so. T hey've expressed a high willingness that, "Oh, I can help this patient." I think our trials show that there is benefit to being on a GLP-2 for patients or CIC patients, and so, you know, the market splits about 50/50 and that measure moves. It depends. We'll learn more as these ICD-10 codes start to break those down in more detail.
I think where we sit today, we're increasingly confident of, one, being able to not just be in stoma, but actually get real penetration into the overall 10,000, I mean, we think the entire market is truly addressable and most of that 10,000 is addressable for us.
Excellent. Then as you do your market research, how much of the market do you think is kind of Gattex refractory? Do you expect, one, a bolus at launch in that population? How big is the size? T hen, as we think about kind of Gattex's previous penetration to stoma and CIC, I think Vectiv has put out, you know, some numbers. It almost looks like around half of them were stoma penetration, and then around 20-ish% in CIC. Do you expect upside with a once-weekly GLP-2?
Yeah, so I would frame it slightly differently. I would say that our perspective on this market is that our approach to it will be, we think we'll get the majority of the new starts. That's where we're going to focus, new starts. I think the next sort of bucket of patients for us will be those refractory patients, which are sizable. I think their, you know, Gattex average is about 1,500 patients on therapy at a time, but there's been a high discontinuation rate.
We think, we estimate somewhere between 2,500 and 3,500 patients have been on Gattex overall. T here is a sizable portion there. B eing able to go back out to those patients and say, "Hey, you discontinued for X, Y, Z reason," this is a, I think the burden or barrier or hurdle to try our therapy is quite low, given again the efficacy, tolerability, and then the once-weekly administration. It won't be much for them to try. Then we'll see how that goes, and then I think the last piece will be conversions over time.
Okay, excellent. I nteresting, can you go over your rationale for going after some of these new starts rather than Gattex switchers? I n terms of kind of the new incident population, is there a high amount of new incident or is it mostly patients who are defined, but not on any treatment, given, you know, as you alluded to, they're very spread out, they're not well managed, etc ?
A gain, this is a super heterogeneous population. The incidence rates are very variable. As you can imagine, they're as a result of a patient having some sort of surgical intervention, where they remove some component of their colon. T hat is quite variable. Again, I think there are lots of patients that just aren't on therapy today. I think being able to raise awareness about the short bowel syndrome, about this need for parenteral nutrition, the dataset that we've created, the ability that we can show these patients a benefit, which is get them off or even reduce significantly their parenteral support volumes, I think we'll be able to attract the new patient. I think that's where we'll start first because I think , you know, it's easier to start with patient a fresh.
Right.
Two, I think we'll be able to get those refractory patients. Again, I think those are people who have tried GLP-2s. Obviously, the burden there is convincing them to try again . I think that's where we'll go next, and then there will be the conversions from Gattex.
Okay, awesome. T hen as we think about kind of Gattex's early payer discussions, what have you heard, you know, in terms of their willingness to cover CIC?
Yeah.
We've seen from Gattex's prior auth criteria, it looks like it's generally broad. The cutoff is basically the inclusion criteria, so certain patients, you know, for CIC may not require as much PS. That's where the cutoff is, but there's no, you know, cutoff, you know, related to just stoma.
Yeah.
I'd love to kind of hear, you know, early, you know, feedback from payers on your data.
Yeah. I will say that from our understanding and from what we've done from research and our early discussions, I think if you have insurance, you will be able to access a GLP-2 straight up. I think the burdens are, these are already high users of healthcare. The additional incremental usage of GLP-2s to potentially reduce elsewhere is I think potentially welcome. T hen given the number of payers that exist, it's not like every payer is overwhelmed , t housands and thousands of these patients.
There are only 1,500 patients on therapy right now, s o we haven't seen or heard issues of authorization. I think the most important thing is payers will pay for benefit and if patients achieve benefit, and I think that's what we plan to bring to the table. We have what we think is the total package for these patients. I think that once they start to see that benefit, I think payers will easily realize that too, that this works for their patients, and they'll support us.
Excellent. J ust moving on to your sales force, as you mentioned, you know, you said that, you know, one of the biggest benefits for Ironwood is you have a 90-person, you know, sales force. You don't need to have that much SG&A spend, and you're almost, you know, accretive one or probably at or you know, a year after launch.
Yeah, in the first year of launch.
Right, in the first year of launch. C an you go over, how much of that 90-person rep is split between you and AbbVie? Is it Ironwood only? What kind of centers do they cover, and the overlap, you know, of that relative to the SBS-IF distribution that you talked about earlier?
Yeah. F irst, the 90-person sales force is all Ironwood. The overall sales force for LINZESS is more than that. AbbVie provides its own coverage that tends to be more focused on primary care than core GI. We call on the top prescribing gastroenterologists around the country. That includes some centers of excellence, but also it's just also in the community as well, just the top GIs. W e have pretty broad coverage, b ased on our understanding of the market.
We're learning more obviously with these ICD-10 codes, but we do think there's a high degree of overlap. We don't think there's much in the way of new spend required. The sales force clearly has capacity, and you know, we were just at our national sales meeting this past week. They're eager to go out and serve these patients. Y eah, I think if there's any spend, it's incremental.
Yeah.
One of the things that we're investing in, obviously in a rare disease, you need to have a good hub. We're building out the hub services, and that's well on its way. There are other programs as well that we're focused on to serving these patients, but those are incremental spend. Those are not, you know, meaningful dollars.
Okay. W hen you say incremental, are you talking about sub-$20 million, sub-$10 million, sub-$5 million?
Yeah. I mean, I think it depends. Well, the opportunity itself is, if it proves really valuable, I mean, will we push more spend faster? Yeah, potentially, b ut I don't see us having to spend $25 million extra to build out a sales force.
Right.
We're not in that position.
Okay, excellent. T hen let's move on. I mean, since we're talking about spend, R&D spend, what are your expectations for this year and next year? Y ou've completed the phase III apraglutide trial.
Sure.
You have, you know, looked at, you've kind of modulated some of your spend for some of these pipeline assets. Y ou think you've de-seeded IW-3718. You're trying to partner out 330. How are you kind of thinking about, you know, the quarter-over-quarter spend, and then as well as the year-over-year spend heading into this year and next for R&D?
Yeah. F or 2024, obviously we have the full year contribution of apraglutide, which we did not have last year. In our R&D spend, we'll also include our CMC spend. As we think about, we've got regulatory spend in advance of our filing this year, and next year we'll have spend associated with building up commercial supply in advance of a launch. Those things are naturally part of spend build, but all of which will be accretive the moment we launch the drug. I would say this year is going to be more than 2023.
Yeah.
We think we've communicated that. We'll give 2025 guidance as we give 2025 guidance starting next year.
Okay, excellent. I n terms of, I guess, one, on pricing, any updates, and then number 2, on your patents, it looks like the composition of matter patents expires in 2030. Will you be filing for any sort of patent term extension for apraglutide?
Yeah. I would say that our view on the patents is unlike others, we own this outright focused on this. We will have patents. We have method of use patents out to 2041. We'll be investing in our IP strategy and IP portfolio, and we'll feel really confident that we'll have patent exclusivity into the 2040s.
Excellent.