Ironwood, Allergan Report Positive Linzess IBS-C Study Data

Ironwood Pharmaceuticals, Inc. IRWD and Allergan plc AGN announced encouraging top-line data from a phase IIb study on the colonic release-1 (CR1) formulation of Linzess (linaclotide) for the treatment of adult patients suffering from irritable bowel syndrome with constipation (IBS-C). In a separate press release, the companies reported top-line data from the same phase IIb study on a second formulation — the colonic release-2 (CR2) formulation of Linzess.

Ironwood’s year-to-date share price movement shows that the stock has outperformed the Zacks classified Medical - Drugs industry. Specifically, Ironwood has gained 32.6% during this period, while the industry lost 25.2%. Allergan has too outperformed the Zacks classified Medical - Generic Drugs industry, having lost 37.9% during this period, compared with the industry’s 38.8% decline.

Note that Linzess is currently approved in the U.S. in an immediate release (IR) formulation for the treatment of adults with IBS-C or chronic idiopathic constipation (CIC).

The double-blinded, placebo-controlled, dose-ranging study was conducted to evaluate the safety and efficacy of each colonic release formulation of Linzess. Patients in the study were randomized into one of eight treatment groups – one group received placebo, one group received Linzess 290 mcg (approved formulation), three groups received various doses of Linzess CR1 (30 mcg, 100 mcg or 300 mcg), and three groups received various doses of Linzess CR2 (30 mcg, 100 mcg or 300 mcg). The approved formulation was incorporated as a reference group in the study. All the doses were given orally, once daily for 12 weeks.

Data showed that patients who received 300 mcg of CR1 witnessed numerically greater improvement in abdominal pain in comparison to placebo and the 290 mcg IR formulation of Linzess. The companies plan to discuss phase III development plans with the FDA, with studies in adults with IBS-C anticipated to begin in the second half of 2017.

Patients who received CR2 also experienced improvement in abdominal pain and other abdominal symptoms like bloating and discomfort, compared to placebo, without impacting bowel movement function. The companies believe that these data support further evaluation of CR2 in specific gastrointestinal indications where patients experience abdominal pain but are not necessarily constipated, such as IBS-mixed, IBS with diarrhea, ulcerative colitis and diverticulitis.

The companies also intend to discuss the advancement of CR2 into a phase IIb dose-ranging study in patients with non-constipation subtypes of IBS with the regulatory authority. Successful development of the formulation is expected to benefit an estimated additional 20–25 million patients who suffer from non-constipation subtypes of IBS.

Additional data from the phase IIb study will be presented at forthcoming scientific meetings as well as in peer-reviewed publications.

We remind investors that a regulatory application for the 72 mcg dose of Linzess for the treatment of adults with CIC is currently under FDA review. Launch in the U.S. is expected in 2017, subject to approval.

We note that Ironwood has an agreement with Allergan for the development and commercialization of Linzess in the U.S. and the EU. The companies are also working on pursuing patent protection for CR1 and CR2 which, if issued, is expected to provide patent coverage into the mid 2030s.

Zacks Rank & Key Picks

While Ironwood carries a Zacks Rank #3 (Hold), Allergan has a Zacks Rank #4 (Sell). A couple of better-ranked stocks in the health care sector are Sucampo Pharmaceuticals, Inc. SCMP and Athersys, Inc. ATHX. Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sucampo’s earnings estimates increased from $1.03 to $1.22 for 2016 and from $1.30 to $1.69 for 2017 over the last 60 days. The company posted a positive surprise in all of the four trailing quarters with an average beat of 35.55%.

Athersys’ loss estimates narrowed from 23 cents to 18 cents for 2016, while that for 2017 remained unchanged over the last 60 days. The company posted a positive surprise in all of the four trailing quarters with an average beat of 110.52%. Its share price has surged approximately 50% year to date.

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