Ironwood Pharmaceuticals Q4 Earnings Call Highlights

25 Feb 2026, 20:30 by Tristan Rich · The Markets Daily

Ironwood Pharmaceuticals (NASDAQ:IRWD) executives highlighted stronger demand trends for LINZESS, a revamped pricing approach intended to improve 2026 net sales performance, and key next steps for the company’s apraglutide development program during the company’s fourth-quarter and full-year 2025 investor update call.

LINZESS demand growth and pediatric IBS-C approval

Chief Executive Officer Thomas McCourt said the company delivered on full-year 2025 guidance for LINZESS, reporting $865 million in U.S. net sales. He attributed the performance to 11% prescription demand growth and 8% new-to-brand volume growth year-over-year.

McCourt also emphasized a clinical milestone: FDA approval in November 2025 for LINZESS to treat irritable bowel syndrome with constipation (IBS-C) in patients ages 7 and older. He said the indication makes LINZESS “the first and only prescription drug approved” for IBS-C in patients 7 to 17 years old.

Commercially, McCourt said LINZESS maintained prescription market leadership in IBS-C and chronic constipation, surpassed 5.7 million unique patients treated since launch, and ended 2025 with about 45% market share. He added that fourth-quarter demand grew 13% year-over-year and full-year demand grew 11%, marking the second consecutive year of 11% prescription demand growth. The company pointed to “all-time highs” in new-to-brand patient volumes.

List price cut and expectations for 2026 net sales rebound

Management repeatedly returned to one of the central drivers of its 2026 outlook: a LINZESS list price reduction effective January 1, 2026. McCourt said the move was made in response to “evolving healthcare dynamics” and to support patient access.

On the call, the company said it expects LINZESS to return to U.S. net sales growth in 2026 after two years of declines tied to pricing headwinds. McCourt said Ironwood expects LINZESS to return to blockbuster status, with greater than $1.1 billion in U.S. net sales in 2026, driven by improved net price and low single-digit prescription demand growth.

McCourt said the company expects more than a 30% increase in 2026 LINZESS U.S. net sales year-over-year, “specifically driven by the elimination of the inflationary component of statutory required rebates across the channels, including Medicaid,” due to the list price decrease. Chief Commercial Officer Tammi Gaskins added that a key goal of the WAC reduction was maintaining access, and said the company has maintained broad coverage across major commercial and Medicare Part D books of business.

In Q&A, executives addressed concerns about early-year prescription trends and payer positioning. McCourt said LINZESS has shown consistent seasonality for years, with first-quarter softness tied to high-deductible plan resets, followed by acceleration through the year. He said the company felt it was “right on track” for 2026.

Apraglutide: STARS-2 confirmatory Phase III trial details

Chief Medical Officer Michael Shetzline said 2026 is expected to be “a critical year” for apraglutide development, with site initiation for the confirmatory Phase III trial, STARS-2, expected in the second quarter of 2026.

Shetzline reviewed why a confirmatory trial is required. He said that in April 2025 the FDA requested another Phase III trial after pharmacokinetic analysis of the prior STARS Phase III study indicated that “the exposure and dose delivered…were lower than planned” because of dose preparation and administration. Even so, Shetzline said the company continues to anticipate the STARS data set—along with STARS-2—will support a future NDA submission.

Ironwood shared several design elements for STARS-2:

124 patients with short bowel syndrome with intestinal failure, randomized 1:1
Enrollment to include patients with both stoma and colon discontinuity anatomy
Primary endpoint: relative change from baseline in actual weekly parenteral support volume at week 24 in the overall population (same as STARS)
Key secondary endpoints at week 24: clinical response (≥20% reduction in parenteral support volume), days off parenteral support per week, and enteral autonomy
Once-weekly apraglutide at a 3.5 mg dose, intended to align with what was delivered in STARS

Shetzline said the company refined instructions for use and kit components to improve dosing accuracy and administration in STARS-2. He said Ironwood expects the timeline to support an NDA submission before the end of 2029.

Management also discussed longer-term data. McCourt cited results from the STARS Extend open-label extension study presented at the American College of Gastroenterology meeting in October, noting that 34 patients achieved and maintained enteral autonomy—complete weaning from parenteral support—for at least three months.

2025 financial results and 2026 guidance

Chief Financial Officer Gregory Martini said the company ended 2025 in a “strong financial position,” meeting its latest full-year guidance. He reported LINZESS net sales of $163 million in the fourth quarter and $865 million for the full year. Fourth-quarter LINZESS U.S. net sales declined 27% year-over-year, which Martini said reflected net price erosion partially offset by the 13% prescription demand growth.

Martini said fourth-quarter net price was affected by quarterly phasing of gross-to-net rebate reserves because units dispensed exceeded units sold to wholesalers. He added that the company had previously discussed a change in AbbVie’s estimate of 2025 gross-to-net rebate reserves that was expected to affect quarterly phasing but not full-year results. For the full year, LINZESS U.S. net sales decreased 6% year-over-year, with net price erosion “primarily associated with the Medicare Part D redesign,” partially offset by 11% prescription demand growth.

For full-year 2025, Martini reported total Ironwood revenue of $296 million, GAAP net income of $24 million, and Adjusted EBITDA of $138 million. He also said disciplined expense management included a $61 million reduction in operating expenses year-over-year, contributing to $127 million in cash flows from operations and $215 million of cash and cash equivalents at year-end.

Looking ahead, Ironwood reiterated 2026 guidance:

U.S. LINZESS net sales: $1.125 billion to $1.175 billion
Ironwood revenue: $450 million to $475 million
Adjusted EBITDA: greater than $300 million

Martini said the company plans to use cash on hand and cash flows to reduce debt in 2026, including repayment of its 2026 convertible notes at maturity in June, and expects to end 2026 with approximately $300 million of debt, which he characterized as less than 1x 2026 Adjusted EBITDA.

Strategic alternatives remain on the table

In response to a question on strategic alternatives, McCourt said Ironwood is in a “very different financial position” than it was nine months earlier when it evaluated options. He said the company now has a clear path to leverage increased LINZESS revenue, reduce debt, and move forward with the confirmatory trial, while remaining open to alternatives that could increase shareholder value.

About Ironwood Pharmaceuticals (NASDAQ:IRWD)

Ironwood Pharmaceuticals, Inc is a commercial‐stage biotechnology company focused on the discovery, development and commercialization of medicines for gastrointestinal (GI) disorders. The company’s flagship product is linaclotide, marketed under the brand name LINZESS in the United States for the treatment of irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC). Through a strategic collaboration with Allergan (now part of AbbVie), Ironwood also commercializes linaclotide in select ex-U.S.