Ironwood's colonic delivery platform a 'pipeline within a pipeline,' say analysts

Ironwood has several shots on goal in its pipeline, according to Barclays analysts .

Ironwood Pharmaceuticals is already chalking up some success with its first colonic delivery drug Linzess, but analysts reckon another good pay-off could come from two follow-up drugs.  

The company held an R&D update this week that, while not providing much in the way of data, reinforced the view that Ironwood has several shots on goal in its pipeline, including some with significant potential if upcoming trials meet expectations, according to analysts at Barclays.

"We remain positive on the pipeline ahead of potentially de-risking data sets over the course of 2017/2018," they said in a research note, which highlights the two Linzess follow-up drugs as well as Ironwood's soluble guanylate cyclase (sGC) stimulator program and gastroesophageal reflux disease (GERD) candidate IW-3718.

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Ironwood is working on two delayed release formulations of linaclotide, the active in its already-marketed Linzess for constipation caused by inflammatory bowel syndrome (IBS-c) which brought in sales of $625 million for the company last year, up more than a third on the prior year, with the company predicting $1 billion or more by the end of the decade.

These new drugs are described as a "pipeline within a pipeline" for Ironwood, as well as the next big commercial driver for the company. Linzess delivers linaclotide directly to the stomach, but the new versions release it throughout the gastrointestinal tract.

The company presented "impressive" Phase 2b data for the first delayed-release formulation (known as DR1) earlier this year, said the analysts, showing that it could cut the abdominal pain associated with IBS-c. Those data clearly support a phase 3 trial due to start later this year, and given the established role of linaclotide that is a low-risk project, according to Barclays.

Ironwood is predicting market potential of $2 billion for Allergan-partnered DR1, but Barclays said a bigger opportunity could lie in the firm's second colonic release formulation (DR2). This differs from DR1 in that it does not result in fluid secretion, which clinically translates into no difference in constipation rates but a clear effect on pain and could open up a new market for linaclotide in non-constipated IBS.

"We continue to think patients with either Crohn's or ulcerative colitis who have normalized inflammation but are still experiencing [lower GI pain] represents an area for further development," they suggest.

Staying in the GI arena, Barclays said it is expecting data mid-year from a phase 2b data for bile sequestrant IW-3718 in GERD that is uncontrolled using current drugs such as proton pump inhibitors, which could set up a pivotal trial in 2018. An estimated 10 million people in the U.S. alone have uncontrolled GERD, and Ironwood has lofty expectations for its drug, once again predicting $2 billion or more in peak sales.

The Barclays analysts are pretty confident the drug will meet its efficacy endpoint in the ongoing study, which is due to report mid-year, but they still have questions about potential variability in patient-reported data from the study which could make it harder to define a "clinically meaningful outcome."

Finally, Ironwood's ace in the pack could be its sGC stimulator program, currently headed by IW-1973 which is being developed for diabetics with resistant hypertension, heart failure with preserved ejection fraction (HFpEF), and diabetic nephropathy, according to Barclays.

Phase 2a data in resistant hypertension is due later this year, and could provide proof of concept to help the company select dosing for large phase 2 trials in all three indications due to start before year-end. Ironwood is playing catch-up with Merck & Co and Bayer, which started phase 3 trials of their own sGC stimulator vericiguat in heart failure with reduced ejection fraction (HFrEF) last year and have a phase 2 study in HFpEF ongoing.

Ironwood thinks IW-1973 could garner $5 billion plus in sales given the sheer number of patients with the three indications. The Barclays analysts have a guarded view on that, particularly given the difficulties Novartis has had persuading payers to cover its heart failure drug Entresto, and said "strong clinical rationales" are behind the drug.

Overall, the R&D day was "consistent with our prior view that there are several shots at value creation" at Ironwood, the analysts concluded.

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