Can Linzess Continue to Aid IRWD's Top Line After a Strong Q3?

Ironwood Pharmaceuticals’ IRWD sole marketed product, Linzess (linaclotide), has witnessed a strong uptake in recent quarters. The company markets Linzess in the United States in collaboration with AbbVie ABBV.

IRWD and ABBV equally share Linzess’ brand collaboration profits and losses in the country.

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.

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.

Besides ABBV, Ironwood also has agreements with Astellas Pharma and AstraZeneca AZN related to the development and commercialization of Linzess in Japan and China, respectively. Both companies pay royalties to Ironwood on net Linzess revenues earned in their regions.

These collaborations act as one of the sources of revenues in the form of royalties for Ironwood.

IRWD Raises Revenue Outlook on Strong Linzess Performance

Linzess sales have picked up momentum in recent quarters on the back of increasing demand.

As reported by partner ABBV, Linzess generated net sales of $314.9 million in the United States, up 40% year over year, driven by strong demand growth in the third quarter of 2025.

Ironwood’s share of net profit from the sales of Linzess in the United States totaled $119.6 million, reflecting an increase of 35% year over year during the third quarter.

In the first nine months of 2025, Ironwood’s share of net profit from the sales of Linzess in the United States was $244.1 million.

Linzess’ sales have been rising owing to strong demand growth in the United States. Management expects this momentum to continue heading into the new year.

Owing to the strong performance of Linzess during the third quarter, Ironwood raised its full-year 2025 revenue guidance. The company now expects total revenues of $290-$310 million for 2025, up from its previous guidance of $260-$290 million.

IRWD's Price Performance, Valuation and Estimates

Year to date, shares of Ironwood have declined 30% against the industry’s rise of 5%. The stock has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

From a valuation standpoint, Ironwood is trading at a discount to the industry. Going by the price-to-sales (P/S) ratio, the company’s shares currently trade at 1.66, lower than 2.32 for the industry. The stock is trading below its five-year mean of 4.26.

The Zacks Consensus Estimate for 2025 earnings per share (EPS) has declined from 16 cents to 15 cents over the past 30 days. During the same time frame, EPS estimates for 2026 have increased from 40 cents to 46 cents.

IRWD's Zacks Rank

Ironwood currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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