Will Linzess Continue to Aid IRWD's Top Line in 2026 After a Soft Q4?

Ironwood Pharmaceuticals’ IRWD sole marketed product, Linzess (linaclotide), 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 in children and adolescents aged six to 17 years.

The company markets Linzess in the United States in collaboration with drug giant AbbVie ABBV. Ironwood’s top line primarily comprises revenues recorded under its collaborative arrangements with ABBV for 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 collaborations act as one of the sources of revenues in the form of royalties for Ironwood.

IRWD Banks on Linzess to Aid Sales in 2026

Ironwood recently reported its fourth-quarter 2025 results, which reflected softer Linzess sales, resulting in a reduced share of net profit for the company. Per management, the decline in Linzess sales was largely due to gross-to-net rebate adjustments and higher pricing pressure from the Medicare Part D redesign, and not underlying demand.

Ironwood’s share of net profit from the sales of Linzess in the United States declined 15% year over year to $289.3 million in 2025.

However, Linzess’ prescription demand remained strong during this period, underscoring management’s optimism for sustained growth in 2026.

Also, effective Jan. 1, 2026, Linzess’ list price was reduced to help maintain patient access. Despite the price cut, management expects Linzess’ net sales to increase year over year in 2026, as the lower list price will reduce certain mandatory government rebates. Fewer rebate payments should translate into higher net revenues in 2026.

Ironwood expects a strong rebound and improvement in Linzess’ sales in 2026 and subsequently its share of net profit from the sales of this partnered drug in the United States. The rebound is expected to come mainly from improved net pricing after a list-price cut and continued prescription growth. Ironwood is also focusing on Linzess’ label expansion efforts to support long-term growth.

Ironwood expects total revenues of $450 million to $475 million in 2026. The revenue outlook for 2026 indicates an increase of 54% year over year at the midpoint compared with 2025.

IRWD's Price Performance, Valuation and Estimates

In the past six months, shares of Ironwood have skyrocketed 220.3% against the industry’s decline of 7.9%. The stock has also outperformed 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 ratio, the company’s shares currently trade at 1.99, lower than 2.31 for the industry. The stock is trading below its five-year mean of 4.05.

The Zacks Consensus Estimate for 2026 earnings per share has remained stable at 76 cents over the past 30 days. During the same time frame, loss per share estimates for 2027 have also remained stable at 3 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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