Ironwood Pharmaceuticals, Inc. (IRWD) Earnings Call Transcript & Summary

Welcome to the Ironwood Pharmaceuticals' conference call to discuss the positive top line results from global Phase III trial, a once-weekly apraglutide in adults with short bowel syndrome with intestinal failure. I would now like to welcome Tom McCourt, Chief Executive Officer, to begin the call. Tom, over to you.

Thanks, operator, and good morning, everyone. As the operator mentioned, I'm Tom McCourt, Chief Executive Officer of Ironwood Pharmaceuticals, and I could not be more excited to join all of you to discuss the positive top line results from the pivotal Phase III STARS trial we announced earlier today. Before I begin, please take a moment to review our safe harbor statement as we will be making some forward-looking statements today. Joining me today are Mike Shetzline, our Chief Medical Officer; Sravan Emany, our Chief Financial Officer; and Andrew Davis, our Chief Business Officer. Following our remarks, we'll open the call for a brief Q&A session. We are thrilled to share that apraglutide met its primary and 2 key secondary endpoints in the STARS Phase III trial, the largest trial conducted to date in patients with short bowel syndrome with intestinal failure, a condition which patients are dependent on parenteral support. Apraglutide is the first GLP-2 to demonstrate positive Phase III results when dosed once weekly. Today marks a significant step forward in our efforts to address unmet need in short bowel syndrome patients who are dependent on parenteral support, and it's an inflection point for Ironwood as a company that strives to advance the treatment of GI disease and redefine standard of care for GI patients. Based on the Phase III clinical data, we continue to believe that apraglutide, if proved, can extend Ironwood's growth horizon into the 2040s and has the potential to achieve over $1 billion in peak net sales. And I can't think of a day more fitting to share this wonderful news for Ironwood and for patients we serve than Rare Disease Day. This day serves as a special reminder of why we do what we do. Before I hand it over to Mike, to review the top line data in more detail, I would like to thank the patients, caregivers, advocates, investigators and the countless individuals that share the dedication to advance and support new therapies for diseases like short bowel syndrome that have a significant unmet medical need. I would now like to hand it over to Mike to share the study results in more detail. Mike?

Yes. Thanks, Tom. As Tom noted, we could not be happier to share the positive top line results for apraglutide. These clinical data are an exciting development for patients suffering from SBS who are dependent on parenteral support. Before reviewing the data, I'd like to take a moment to talk about the patients with SBS who are dependent on parenteral support, starting on Slide 5. SBS-IF results from severe organ failure due to a reduction in intestinal function below the minimum necessary for adequate nutrient and fluid absorption, leading to a dependence on parenteral support or the IV administration of fluid, nutrients to maintain health, growth and survival. Approximately 18,000 adult patients are impacted by this disorder across the U.S., Europe and Japan. This condition is associated with increased mortality, significant morbidity, high economic burden and reduced quality of life. So as you can imagine, reducing a number of hours a day and/or the number of days per week on parenteral support is extremely important to patients. As Tom noted earlier, the STARS Phase III study was the largest GLP-2 trial ever conducted in SBS-IF with 164 patients randomized, stratified roughly 50-50 across stoma and colon-in-continuity. As you can see on Slide 6, the primary endpoint was relative change from baseline in weekly parenteral support volume at week 24, and an aggregate endpoint across both patient populations. The study also included several aggregate and anatomy specific secondary endpoints. The treatment arms were well balanced for baseline age, gender, region, body weight and time since SBS diagnosis and initiation of parenteral support. In the apraglutide arm, patients received 5 milligrams and 15 patients received 2.5 milligram doses. The actual weekly parenteral spot volume at baseline was approximately 13 liters for the overall combined population, with stoma requiring more than those with colon-in-continuity as expected. And the average actual days on parenteral store per week at baseline was 6 days. Moving to the study results. We're thrilled that the trial met its primary endpoint of relative change from baseline in actual weekly parenteral sport volume at week 24, driven by both stoma and colon-in-continuity patients. As shown on Slide 7, patients dosed with apraglutide had a 25.5% relative reduction from baseline in the actual weekly parenteral support volume, compared with 12.5% reduction from baseline for placebo or twice the effect, a highly statistically significant outcome with a clear separation over time between those patients that received apraglutide and those that received placebo. Importantly, apraglutide also demonstrated a rapid onset of treatment effect that was statistically significant from 8 weeks onwards. Overall, apraglutide was generally well tolerated, and the top line safety data were generally consistent with the safety profile demonstrated in apraglutide's clinical studies to date. Next, I'll review the key secondary endpoint starting with the 2 that achieved statistical significance on Slide 8. As a reminder, these key secondary endpoints were designed in a statistical hierarchy. The study met its first key secondary endpoint in the hierarchy, which was patients who achieved a reduction of at least 1 day per week off of parenteral support at week 24 from baseline. 43% of patients dosed with apraglutide achieved an improvement from baseline of at least 1 day per week of parenteral support at week 24 compared to 27.5% in placebo, a statistically significant outcome. The study also met the second key endpoint in hierarchy, which was relative change from baseline in actual weekly parenteral support volume at week 24 in the stoma population. Stoma patients dosed with apraglutide had a relative reduction of 25.6% versus baseline as compared to 7.8% relative reduction in for placebo, a highly statistically significant outcome. The study also included 2 key secondary endpoints focused solely on the colon-in-continuity population at week 48, which are the reduction from baseline of at least 1 day per week of parenteral support and patients reaching enteral autonomy. Results on both colon-in-continuity 48-week secondary endpoints were numerically favorable in patients dosed with apraglutide, but the endpoints were not met as they did not achieve statistical significance relative to placebo. With the third key secondary endpoint, 51.8% of patients with colon-in-continuity dosed with apraglutide achieved at least 1 day per week off of parenteral support compared to 44.4% for placebo. And finally, with the fourth key secondary endpoint on enteral autonomy, we are encouraged that some patients were able to enteral autonomy or a complete weaning off of parenteral support at week 48. 7 of 56 colon-in-continuity patients or 12.5% reached enteral autonomy on apraglutide versus 2 out of 27 or 7.4% on placebo. Moving to Slide 9. To summarize, it's fantastic news for patients and providers that we have achieved these results for the first-ever once-weekly next-generation GLP-2 analog. In particular, we're excited about the highly statistically significant results for the primary endpoint and the potential to provide once weekly dosing for GLP-2 analog, if approved for patients who are dependent on parenteral support. We're so thankful to the patients, clinical investigators, our employees, particularly those here in Basel, who are involved in the largest study in the GLP-2 analog in SBS-IF. Looking ahead, we're focused on moving expeditiously on discussions with the FDA and other regulatory agencies with the priority to get apraglutide to patients as soon as possible if approved. With that, I'll turn it back to Tom.

Thanks, Mike. Yes, we are thrilled with the results of the STARS pivotal study. These positive results reinforce our belief that apraglutide, if approved, is poised to improve the standard of care in the treatment of patients with short bowel syndrome who are dependent on parenteral support as the only once-weekly GLP-2 analog. Based on the Phase III clinical data, we believe Ironwood is well positioned to maximize potential benefit of apraglutide for patients and create value for shareholders by leveraging our expertise in clinical development, regulatory, medical affairs and commercial execution, with the potential to achieve over $1 billion in peak net sales if approved. We will continue to analyze the full data set and look forward to sharing additional data at future medical meetings. Today marks an important milestone for Ironwood and reinforces our commitment to redefine standard of care for GI patients and, more specifically, to support the SBS patient community. Thanks for joining us today, and we look forward to sharing more information in the months ahead. Operator, you can now open the line for questions.

[Operator Instructions] Our first question comes from the line of David Amsellem with Piper Sandler.

So just a couple. I wanted to dig in further on the colon-in-continuity data. Do you think this is, broadly speaking, a population where it's exceedingly difficult to get a separation because there's some degree of colon, for lack of a better term, adaptability, and that's going to drive a high placebo response? So I wanted to get your thoughts there. And secondly, can you say what the P value is on those secondaries in the CIC subgroup? And also in any of the weeks in the -- of the CIC subgroups did you see statistical separation? In other words, was the separation at 24 weeks or other weeks? And how should we think about how the 2 arms were trending as you move through the study period?

Thanks, David. Mike, do you want to tackle the first question?

Sure. So thanks, David. So for the placebo, I think it's always a great question to analyze placebo and figure out how it's playing in your treatment effect. So for us, the placebo response for the 24-week endpoint was actually low. And that really is likely related to the rigorous optimization and stabilization period that's designed into the trial. And I really give kudos to the clinical team because to have a placebo response of 12.5% in this patient population is quite impressive. Because as you know, if they don't have enough time to naturally adapt, meaning wean as much as they can on their own and then we put them in a treatment trial, then they'll begin to wean, but more based to their natural ability to wean than the treatment for the drug. So having the natural adaptation period maximized in the screening period gave us a great opportunity to see a therapeutic game. Now to that point, you're asking about CIC and how does it bode a placebo effect in CIC. It is also clear that in the CIC subgroup out -- by 48 weeks, we started to see a placebo response which impacted the therapeutic game, because as in the third key secondary, we had over 50% of patients achieving the 1 day off. However, with a 44% placebo there, wasn't statistical significance there. So we have a lot to learn from that point of view, meaning how the placebo is going to play out in CIC compared to stoma or compared to the general population. But I think it is really striking and positive how we had the therapeutic game we had in the 24 weeks. And we did see an effect in CIC, although it wasn't statistically significant, and we're certainly going to dig in deeper to see that further. And then that will also come out in terms of your p value question. We'll have more and more data as we prepare these results for meetings in the near future, and we'll certainly share a lot more going forward. You had another question on the weekly. So you could see on the one side, we do have the weekly split on the primary end point, that they were statistically significant with nominal p values through the study from 8 weeks onward. And we'll certainly share more about that with the trial as we get deeper into the data. We had the top line data really which was stuck mostly to the primary endpoint and the key secondary endpoints that were in the statistical hierarchy.

Our next question comes from the line of Mohit Bansal with Wells Fargo.

Just wanted to probe further on the CIC patients. So in our chats with doctors, I mean, the lack of benefit among CIC has been a challenge commercially for reimbursement and all. So to that extent, how big a challenge do you see with these data today? And what would it take for for you to make sure that CIC patients also have access to a drug like this? This is my question.

Thanks, Mohit. Andrew Davis, do you want -- would you mind answering this one?

Yes. So I think it's important that we get out there and educate the market on this, right? I think getting more CIC patients on therapy and the benefit they can potentially receive. As we noted, both stoma and CIC patients contributed to our top line hit, and so I think it's important for us to make sure these folks understand that, they understand the benefit that all patients can receive on this therapy and that we can get more patients engaged on GLP-2 therapy and specifically apraglutide.

Our next question comes from the line of Amy Li with Jefferies.

Just wanted to dig into the secondary endpoints a bit. What -- how did the data look on relative PS reductions in the CIC population? Can you kind of go over the placebo response. How much of an impact are you seeing from the weaning protocol relative to differences in the baseline population? And then another one, can you go over how stoma patients did on enteral autonomy? And finally, given the data does look somewhere between GATTEX's and Zealand's, what's been the physician feedback so far? And do you expect your label to include both stoma and CIC patients or just stoma? Any color there would be super helpful.

Yes. Mike, do you want to handle the questions regarding the CIC and the weaning protocol?

Yes, sure. Clearly, the placebo effect for the first half of the trial, right, which was the primary endpoint, was low. Lower than what has been demonstrated in other clinical trials. So as I mentioned, we think that's related to the operational excellence and sort of the ability for patients to really get to their natural adaptations so we could really see a therapeutic gain. Now the flip side of that is because we did have a weaning protocol, you could obviously imply the weaning protocol could have affected the placebo on the front end, in the first 24 weeks. But again, that was lower. I find it a little challenging to see the weaning protocol lowering the placebo response. But certainly, anything is possible in the clinical trial. But to the other part of the study, the 24- to 48-week endpoint, where we continue to try to wean patients, right, in a blinded fashion in a clinical trial, then there could have been some impact on the weaning algorithm in the patient population. And we did see, as we described in the endpoints, a fair amount of placebo response, certainly in the third endpoint on the 1 day off. But also we had a couple of placebo patients achieve enteral autonomy, which obviously eliminated the statistical likelihood of an outcome for us on the treatment side. Without that, that endpoint could have been statistically significant. So we'll have to dive in deeper to that. Because as you know, this is the first sort of controlled trial of the weaning algorithm and we certainly have a lot more to learn. And we'll also take that charge for the volumes. Our primary endpoint was the relative change from baseline. So reporting the top line now in that perspective, but we certainly have a lot of work to do on the volume reductions.

I think it's really important also to recognize that these are different trial designs. And we want to be a little careful about how you compare data across different trial designs with different end points. So obviously, we'll do our best to better understand that. This is an incredibly robust data set in a study that nobody has ever done anything like this before in this space. And we did that, with the primary objective is to be able to really well characterize the benefit to both patient populations. So I think it's an exciting day for us. We have an enormous amount of work to do with regard to this robust data set that I think is going to inform a lot more as far as the potential benefits that apraglutide offers both stoma patients as well as CIC patients.

To that end...

Yes. Tom, let me just -- may I just add that we did -- I just want to recall because Andrew said this as well, but we did see a clinical benefit in CIC in the colon-in-continuity patients participating and contributing to the primary endpoint. So we do think we're making ground there with this unique design. As Tom said, all the trials have their unique designs and their unique primary end points. So from that capacity, we know that Soma and colon-in-continuity actually contributed to the primary endpoint in our study.

And to that end, I think to the last question, Amy, we are going to pursue a label for both CIC and stoma patient population.

Our next question comes from the line of Chase Knickerbocker with Craig Hallum.

So I get that this is way too early of a question, but I just wanted to ask one on kind of a larger picture on the commercial front potentially for this drug. I certainly appreciate you're still deconstructing the data, but I just want to dig in kind of on the initial profile we see here. So as was just kind of mentioned on the call, relative improvement over placebo on the primary, somewhere between GATTEX and glepa, and then not statistically significant CIC endpoint.

So Chase...

Go ahead.

I apologize, you didn't come in on our phone. Could you repeat that?

Yes. Yes. So I just want to dig in a little bit on the initial profile. So as was just kind of mentioned on the call, relative improvement over placebo, somewhere between the other 2 pivotal trials in the competitive entrants here, and then not statistically significant on CIC endpoints. So I just want to dig in a little bit on how clinicians are going to kind of think about this data relative to your other new potential entrants into this market? And then also, if we kind of take a look at kind of, again, way too early of a question, but just kind of how payers might think of this with a potential kind of GATTEX generic being more relevant for them longer term. I'd just love to get your kind of overarching thoughts, and I certainly appreciate that it's probably too early of a question.

Yes. So I think I would start. Thank you, Chase, for your question. I'd say -- I would characterize, again, to Tom's point, these are different trials. Two, I think I would challenge the characterization that between the other trials or our data set is in between. I think the placebo response here and our treatment arms performance relative to the placebo response is really meaningful. It's statistically significant, really statistically significant. And so I think that's what's going to be the most -- the largest focus here, does apraglutide work for these patients. And the fact that it worked for both -- in both patient populations contributing to the primary endpoint at 24 weeks in terms of relative baseline and being the only once-weekly therapy, I think all make us think that we -- from an overall product profile perspective that I think we've got something that's differentiated. So we'll continue to dig into that, obviously. And so I think that's the -- I think the first initial response. Andrew, did you have anything else that you would add to that, or Tom?

Yes. So I think to add on that, and I can probably address the second question. So I agree, right, with what Sravan said. I think when we look at the relative effect here and I think that's what we see as being critical in our conversations with physicians historically, we see ourselves as having a very strong relative effect relative to competition. And I think that's what's going to be important and clearly going to be a key message for us as we look forward. And I think otherwise, as we think about commercialization and we think about the $1 billion opportunity out there, I think this is about a combination of really engaging more patients to be on therapy and then winning market share on that therapy. And I think when we think about our organization, what we've accomplished in GI over the past decade, along with the preparation we've been making on this, I think we're well positioned for both of those mandates, right? How can we bring more patients on to therapy that are eligible for it and where it can make a real benefit for them. And I think this kind of larger trial can help give that further confidence to both patients and physicians, and it makes sense and that they should be on therapy. And that when we look at our profile, we combine relative effect, we combine these key secondary endpoints and we combine that with the once-weekly dosing, that really is something that we think can be a market leader. So when we put those together, that's really what we see as a commercial proposition. I think we have a very strong one here, both in absolute terms and relative to our competition. I think to answer your question on generics, I think we thought it was more -- I think generics GATTEX, it may or may not occur. As we sit here today, we still don't have an approved generic in the United States. I think orphan disease generics are a lot different marketplace than your kind of standard pharmacy counter-generics. I think this is really about how we serve patients and how we make sure that we can get patients on the therapy and continue to support them on their therapeutic journey. I think we're well positioned to do that. I think most generic companies are not well positioned to do that. And I think it's something where, at the end of the day, there's a lot of downstream effects for the patients, for the physicians and for the payers around someone with short bowel syndrome. And I think we can have a clear value proposition where a single generic isn't really going to change the market in any significant way.

One final thought here, too, which I think is important. As you know, over 50% of patients discontinue GATTEX in the first 12 months. And from talking to clinicians in our market research, the main reason for that is, one, a recognition of the benefit, particularly in CIC patients. And one of the things that we saw here was a pretty rapid response to therapy, which obviously is going to help patients recognize the benefit that they could realize. I think the other is certainly the daily burden of a daily injection and being able to go to a once-a-week more convenient administration certainly will be very appealing. And certainly, we'll be working very closely with the payer to make sure that we have broad access.

Our next question comes from the line of Jason Butler with Citizens JMP.

Congrats on the results. I guess just a follow-on to Tom's last point there on persistence. Obviously, there's limitations with GATTEX. Now that you have the Phase III results in hand, can you just speak to what your confidence level is that the once-weekly injection profile will be differentiating versus once daily or twice weekly? And how you think about the potential to make improvements relative to the persistence rates we see with GATTEX?

Andrew or Tom?

I can go for it. So I think, first of all, it worked in once weekly, it's very clear we have a once weekly profile. And yes, that's where we -- that's clearly approved where we expect to be. I think in terms of its profile in terms of persistency, I think everything we've done in terms of research up to this point show that as being a real benefit. And I think we'll dig into the data on the trial further too. But I think we saw and you saw on the charts here that we have that relatively quick improvement by week 8 that was statistically significant, and then it continued on through week 24. So I think that really just goes to show that this is a great therapy for patients and that this is something with an opportunity that, that once-weekly burden is significantly less than a daily or a biweekly burden. And on top of that, we have a relatively simple dosing profile of 1 dose -- or 1 of 2 doses that is clearly dependent on a weight point, where, as Mike noted in his opening, the majority of patients were above 50 kilos. So I think when we see that, it's pretty simple for patients to understand and should be fairly simple for them to ultimately administer it themselves.

The other thought to consider, one is a big part of this is getting into the market and educating both patients and physicians on how to improve overall care. And certainly, we've learned a lot from GATTEX about what's working and what's not working. Certainly, the importance of this whole weaning algorithm and the role that, that can play is an enhancement to therapy. And certainly, we are bringing a very, very strong medical and commercial team that knows this space very well, knows these customers very well. And that work has already started with regard to our go-to-market strategy and how we are going to go forward and identify more patients, engage more patients and certainly hold their hand through the journey to not only get on therapy, but stay on therapy. And that's going to be a big powerful force to determine how successful we will be in the market.

Our next question comes from the line of Tim Chiang with Capital One.

Just given the profile of apraglutide, obviously, it's a longer-acting product with the once-a-week dosing profile. Could you talk a little bit more and dig into -- I just wanted to dig into the safety profile a little bit more and the tolerability aspects of apraglutide. Could you talk a little bit about what were the dropout rates? Were there dropouts in the active treatment arm during the study? And what were the most common side effects that patients dosed with apraglutide experienced?

Sure. Mike?

Yes. Thanks, Tim. Yes. So Tim, we really didn't see anything different than what we've seen in the other apraglutide trials. It was generally safe and well tolerated. We are going to put all that together as we move to meetings in the future, but there really wasn't anything of concern. We do think that the once weekly and the profile you're alluding to, gives us a good position from an overall safety and tolerability perspective. And we had very, very few dropouts at all on the trial. And in fact, 95% of the patients remained and continued into the extension trial, actually.

I see. And maybe just one follow-up, Mike. Just looking at what you think the FDA is going to require for long-term safety. Just based on results you've shown, you don't see a problem there, right?

No, I don't see a problem. Obviously, we'll have to engage the agency to make sure they agree. But clearly, with this being the largest trial, and as I gave the summary of the patients treated, we have a pretty significant number of patients treated in this trial, we think we're in a good position for submission. But we'll certainly keep you updated on that as we engage the agency. It's obviously going to be an agency discussion and decision, but we certainly think we're in an excellent position for a submission.

Tim, one of the things that I think is important to recognize, Mike's point earlier, how large this trial was, but also the geographic diversity, the diversity of the patient population, which obviously adds a lot of complexity to manage this population and to see this kind of response as far as relative improvement from placebo is really quite remarkable. And like I said, this was a very innovative, very ambitious study in which we evaluated basically populations and endpoints that had never been evaluated before. I think this is going to be -- there's still a lot to learn here, but I think we're very excited about the overall performance of the drug and what we're going to learn moving forward.

Our next question comes from the line of Naresh Chouhan with Intron Health.

There's obviously a lot of data you've disclosed there, a lot more to come, a lot of secondary end points we haven't seen yet. What do you think -- now that you have seen the data, what do you think are the main points of the penetration that docs are most likely to care about between apra and the incumbent? And based on your answer on the placebo effect, do you think docs may focus more on the absolute efficacy given that in the real world, the placebo effect from the weaning -- I'm sorry, the placebo effect from the weaning is less likely to occur?

Yes, I think that's a really great question. And I think our impression and the feedback we've already gotten from our investigators and some of the early KOL interactions is very positive. To your point, this is all about managing the patient and overall response as I think about real-world data that we'll obviously be collecting over time. But to see that kind of response with the weaning algorithm is extremely encouraging. I think the other piece, too, is the robustness of the trial design at the primary endpoint. And really, this is really the first drug ever to show both populations, both anatomical populations, contributing to the primary endpoint, which really differentiates the brand as we talk to KOLs. But a lot of this is going to be how effective we are in commercializing the product and helping docs identify who appropriate patients are and really supporting the needs of the patient. So I think we're anxious to get rolling here. Certainly, to finish the data analysis, to really better characterize the overall benefit of the drug, but also get prepared to go to market.

There are no further questions at this time. This concludes today's call. You may now disconnect.