Ironwood Pharmaceuticals’ IRWD sole marketed product, Linzess (linaclotide), has witnessed a strong uptake in recent times. The company has a partnership with AbbVie ABBV to jointly develop and commercialize Linzess in the United States.
Linzess is approved for the treatment of irritable bowel syndrome with constipation (IBS-C) in adults and pediatric patients aged seven years and above. The drug is also approved for treating functional constipation (FC) in children and adolescents aged six to 17 years.
Last month, the FDA approved Linzess for the treatment of FC in pediatric patients aged two years and older.
Ironwood’s top line primarily comprises revenues recorded through its collaborative arrangements with ABBV related to the development and commercialization of Linzess in the United States.
IRWD and ABBV equally share Linzess’ brand collaboration profits and losses in the country.
Ironwood also has agreements with Astellas Pharma and AstraZeneca AZN related to the development and commercialization of Linzess in Japan and China, respectively. Both Astellas Pharma and AstraZeneca pay royalties to Ironwood on net Linzess revenues earned in their regions.
These partnerships provide Ironwood with an additional revenue stream through royalties on Linzess sales outside the United States.
IRWD Expects Linzess to Sustain Sales Momentum in 2026
Ironwood recorded $104.2 million as its share of net profit from U.S. sales, up 169% from the prior year, while total prescription demand grew 5%. Linzess is witnessing strong prescription demand, underscoring management’s optimism for sustained growth in 2026.
Ironwood expects a significant improvement in Linzess’ sales in 2026 and subsequently its share of net profit from the sales of this partnered drug in the United States.
Importantly, earlier this year, Linzess' list price was reduced to support patient access. Despite the reduction, management expects Linzess' net sales to grow year over year in 2026, as the lower list price should reduce certain mandatory government rebates.
As a result, lower rebate payments are expected to drive higher net revenues in 2026.
Ironwood expects total revenues of $450 million to $475 million in 2026. The company expects Linzess to remain its primary growth driver in 2026. Continued prescription demand, the recent pediatric label expansion and favorable pricing dynamics should support higher profit contributions in the upcoming quarters.
IRWD's Price Performance, Valuation and Estimates
Year to date, shares of Ironwood have lost 0.5% compared with the industry’s 8.6% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, Ironwood is trading at a discount to the industry. Going by the price-to-sales ratio, the company’s shares currently trade at 1.55, lower than 2.21 for the industry. The stock is trading below its five-year mean of 3.80.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings per share has increased from 98 cents to $1.04 over the past 60 days. During the same time frame, loss per share estimates for 2027 have remained stable at 3 cents.
Image Source: Zacks Investment Research
IRWD's Zacks Rank
Ironwood currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
AstraZeneca PLC (AZN): Free Stock Analysis Report
Ironwood Pharmaceuticals, Inc. (IRWD): Free Stock Analysis Report
AbbVie Inc. (ABBV): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).