Ironwood Pharmaceuticals, Inc. (IRWD) Q4 2022 Earnings Call Transcript

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Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) Q4 2022 Earnings Conference Call February 16, 2023 8:30 AM ET

Company Participants

Matt Roache - Director, IR

Thomas McCourt - CEO & Director

Michael Shetzline - Chief Medical Officer, SVP and Head, Research & Drug Development

Sravan Emany - SVP, Principal Financial Officer & CFO

Conference Call Participants

David Amsellem - Piper Sandler & Co.

Daniel Wolle - JPMorgan Chase & Co.

Timothy Chiang - Capital One Securities

Boris Peaker - Cowen and Company


Good day, and invited to nan Ironwood Pharmaceuticals Q4 and Full Year 2022 Investor Update Conference Call. Today's telephone is being recorded. [Operator Instructions]. Thank you.

And I would now for illustration to move nan convention complete to Matt Roache, Director of Investor Relations. Please spell ahead.

Matt Roache

Thank you, Savanna. Good morning, and acknowledgment for joining america for our 4th fourth and afloat twelvemonth 2022 investor update. Our property merchandise issued this greeting tin beryllium recovered connected our website.

Today's telephone and accompanying slides see forward-looking statements. Such statements impact risks and uncertainties that whitethorn origin existent results to disagree materially. A chat of these statements and consequence factors is disposable connected nan existent safe harbor connection descent arsenic good arsenic nether nan heading, Risk Factors, successful our yearly study connected Form 10-K for nan twelvemonth ended December 31, 2021, and successful our early SEC filings. All forward-looking statements speak arsenic of nan time of this presentation, and we undertake nary responsibility to update specified statements.

Also included are non-GAAP financial measures, which should beryllium considered only arsenic a supplement to and not a substitute for aliases superior to GAAP measures. To nan grade applicable, please mention to nan tables astatine nan extremity of our property merchandise for reconciliations of these measures to nan astir straight comparable GAAP measures.

During today's call, Tom McCourt, our CEO, will reappraisal our strategical priorities and supply an update connected nan commercialized capacity of LINZESS. Mike Shetzline, our Chief Medical Officer, will talk our pipeline. And Sravan Emany, our Chief Financial Officer, will reappraisal our financial results and guidance.

Today's webcast includes slides. So for those of you dialing in, please spell to nan Events conception of our website to entree nan accompanying slides separately.

With that, I'll move nan telephone complete to Tom.

Thomas McCourt

Thanks, Matt. Good morning, everyone, and acknowledgment for joining america today. As we statesman 2023, our committedness to processing and advancing innovative solutions successful nan area of precocious unmet request successful GI is arsenic beardown arsenic ever. Looking backmost successful nan past year, we person made -- we made important advancement successful advancing nan curen of GI diseases, while redefining modular of attraction for patients. I'm very proud of nan Ironwood team. And acknowledgment to their difficult activity and dedication, we closed 2022 pinch a batch to beryllium proud of.

You've heard america talk astir our focused attack based connected 3 strategical priorities, wherever we activity to maximize LINZESS, fortify and advancement our innovative GI portfolio and present sustained profits and make rate flow. I'm delighted to opportunity that we proceed to thrust beardown LINZESS medicine request growth, delivered connected our afloat twelvemonth adjusted EBITDA guidance, and we made strides crossed each 3 of our cardinal strategical pillars. I stay assured successful our strategy and judge we are good positioned for moreover greater occurrence successful 2023.

Let's statesman connected Slide 6, pinch a speedy overview of immoderate of nan cardinal achievements against our strategical priorities for 2022 and what we expect successful 2023. First, maximize LINZESS. LINZESS continues to spot beardown medicine request growth, profitability and wide acceptance among wellness attraction practitioners arsenic nan starring branded medicine curen for adults pinch IBS-C and chronic idiopathic constipation.

In 2022, medicine request accrued much than 9% year-over-year. The marque continued to show marketplace activity by achieving an all-time precocious successful caller diligent starts, which is simply a lead parameter for its early maturation potential, and increasing TRx marketplace share, which reached an all-time precocious of 45% arsenic of nan extremity of December.

As we announced earlier this week, we are pleased that nan FDA granted a privilege reappraisal of our sNDA for functional constipation successful pediatric patients ages 6 to 17 and assigned a PDUFA day of June 14, 2023. We're peculiarly excited astir nan imaginable to grow nan objective inferior of LINZESS to this underserved diligent population. And we scheme to leverage a focused finance to thrust maturation and amended marque margins complete time.

Next, fortify and advancement our innovative GI portfolio, starting pinch CNP-104, nan imaginable disease-modifying curen for superior biliary cholangitis. In 2022, COUR Pharmaceuticals initiated a proof-of-concept study successful PBC, which will measure nan safety, tolerability, pharmacodynamic effect and efficacy.

We besides kicked disconnected study commencement activities astatine nan extremity of 2022 for nan IW-3300, Ironwood's wholly-owned GC-C agonist for its imaginable curen of visceral symptom conditions, specified arsenic interstitial cystitis and bladder symptom syndrome.

We expect respective breathtaking opportunities to beforehand nan worth imaginable of our pipeline this year. First, we expect early information successful nan 2nd half of nan twelvemonth from patients enrolled into nan objective study for CNP-104. Second, we expect to statesman diligent dosing for a proof-of-concept study successful nan interstitial cystitis and bladder symptom syndrome for IW-3300 successful nan adjacent term. Finally, we proceed to actively measure opportunities to fortify our portfolio, and we spot respective imaginable charismatic opportunities successful nan marketplace that could use from Ironwood's expertise successful GI.

Our 3rd strategical privilege is to present sustained profits and make rate flow. We delivered connected our guidance of complete $250 cardinal successful adjusted EBITDA and ended nan twelvemonth pinch $656 cardinal successful rate and rate equivalents connected nan equilibrium sheet, aft deploying astir $250 cardinal successful 2022 by completing our stock repurchase programme and repaying nan main connected our '22 convertible notes.

We are successful a fortunate position of being a profitable biopharma institution pinch a highly skilled and knowledgeable squad successful nan guidance of gastrointestinal diseases and a beardown and increasing rate balance. We judge we're good positioned to execute connected our strategy arsenic we strive to go nan starring GI wellness attraction institution successful nan U.S.

Now let's talk a spot much astir nan capacity of LINZESS connected Slide 7. As you tin spot connected nan near broadside of Slide 7, nan capacity of LINZESS has been remarkable, arsenic we proceed to spot a robust linear maturation trajectory. Over time, nan beardown medicine request maturation for LINZESS has been supported by a operation of precocious curen satisfaction, updated objective line support and class-leading formulary access.

We proceed to spot an acceleration of due caller big diligent starts and expect this will beryllium augmented successful nan future, should nan FDA o.k. an denotation for functional constipation successful patients ages 6 to 17. We judge nan pediatric opportunity, if approved, could grow nan marketplace imaginable for LINZESS arsenic functional constipation affects astir 6 cardinal 6- to 17-year-old children and adolescents successful nan U.S.

This is incremental to nan request that still exists amongst astir 40 cardinal adults successful nan U.S. that suffer from IBS and chronic constipation. LINZESS is good positioned to beryllium nan branded marketplace leader crossed some its existent and imaginable early indications. Looking ahead, we're assured successful our strategy and successful our future. We judge nan investments we're making successful nan marque and successful our pipeline position our institution for semipermanent growth.

I would for illustration to opportunity a very large convey you to each nan Ironwood labor who person laid nan groundwork for continued momentum and beardown execution against our strategical priorities arsenic we proceed to make meaningful effect connected patients' lives.

I would now for illustration to move nan telephone complete to Mike to talk our pipeline. Mike?

Michael Shetzline

Thanks, Tom, and bully morning, everyone. We proceed to make advancement crossed our 3 pipeline programs. I'll statesman pinch our linaclotide pediatric programme connected Slide 9.

As Tom mentioned, we're thrilled that nan FDA granted privilege reappraisal for nan LINZESS sNDA for functional constipation successful children and adolescents 6 to 17 years of age, which could perchance lead to a commercialized motorboat successful June. If approved, LINZESS would beryllium nan first and only medicine therapy to dainty this diligent population.

A caller pediatric denotation would further reenforce nan beardown objective floor plan of LINZESS. I'm proud of nan team's accomplishments arsenic we proceed to activity opportunities to broaden nan objective inferior of LINZESS and redefine nan modular of attraction for this diligent group. We look guardant to presenting nan Phase III information astatine nan Digestive Disease Week gathering successful May of this year.

CNP-104, next, for nan imaginable curen of PBC, which affects an estimated 130,000 group successful nan U.S. As we've discussed previously, nan beardown immunology underpinning nan CNP programme is focused connected targeting nan circumstantial PDC-E2 antigen responsible for nan pathology of PBC. Therefore, location is an opportunity to measure PDC-E2-specific T compartment responses, which should beryllium a lead parameter of objective benefit. We expect to measure T compartment responses successful patients dosed pinch CNP-104 successful nan 2nd half of 2023. This early T compartment information will pass nan timing of apical statement and imaginable action exercise.

We're excited astir nan CNP-104 because it is genuinely a precision medicine, and it introduces a perchance caller game-changing plus for PBC patients, arsenic location are nary therapies connected nan marketplace coming that reside nan guidelines origin of nan autoimmune demolition of nan bile ducts successful PBC. We'll supply updates connected nan programme advancement passim this year.

Moving connected to IW-3300, a wholly-owned Ironwood plus for nan imaginable curen of interstitial cystitis and bladder symptom syndrome. There's a important unmet aesculapian request successful nan area of IC-BPS arsenic it affects an estimated 4 cardinal to 12 cardinal Americans, yet location are very fewer curen options presently connected nan marketplace aliases successful development.

In 2022, we successfully completed dosing studies successful patient volunteers, and we kicked disconnected study commencement activities for nan Phase II proof-of-concept study. We're prepared to statesman dosing patients successful nan adjacent term. This study has been thoughtfully designed to measure nan imaginable effect of IW-3300 connected visceral symptom successful patients pinch interstitial cystitis and bladder symptom syndrome. This proceedings will enroll patients pinch mean to terrible symptom successful a randomized, double-blind placebo-controlled study complete 12 weeks. Patients who person IW-3300 administered erstwhile daily, efficacy will beryllium assessed based connected alteration from baseline successful nan worst abdominal symptom utilizing an 11-point numeric standing scale, on pinch monitoring of urinary symptoms and different play and monthly assessments. We're excited to statesman diligent dosing and we look guardant to providing updates arsenic nan study continues to advance.

This is nan first clip nan cross-talk presumption will beryllium tested successful humans, and we're proud to beryllium astatine nan forefront of objective improvement successful this area.

With that, I'll move nan telephone complete to Sravan.

Sravan Emany

Thanks, Mike, and bully morning, everyone. I'll commencement pinch an update connected LINZESS' performance. LINZESS U.S. nett income were $260 cardinal successful nan 4th fourth of 2022, a alteration of 7% compared to nan 4th fourth of 2021. Strong medicine request maturation of 9% was much than offset by value and inventory transmission fluctuation.

For afloat twelvemonth 2022, arsenic shown connected Slide 11, LINZESS U.S. nett income were $1.002 billion, a flimsy alteration arsenic compared to afloat twelvemonth 2021. While afloat twelvemonth nett income maturation came successful little than our expectations for 2022, chiefly owed to inventory fluctuations successful nan unit channel, we stay assured successful nan semipermanent maturation imaginable of LINZESS based connected nan beardown medicine request that we proceed to see.

Turning to LINZESS marque profitability. Commercial margins successful nan 4th fourth of 2022 were 74% compared to 76% successful nan 4th fourth of 2021. For afloat twelvemonth 2022, commercialized margins were 73% versus 74% for afloat twelvemonth 2021.

Moving to Ironwood revenues. In Q4, Ironwood revenues were $107 million, driven chiefly by nan U.S. LINZESS collaboration revenues of $105 million. For nan afloat year, Ironwood revenues were $411 million, pinch LINZESS U.S. collaboration revenues of $399 million. In nan 4th fourth and for nan afloat year, Ironwood recorded $23 cardinal and $77 cardinal of income taxation expense, respectively, nan mostly of which was noncash. GAAP nett income was $49 cardinal successful nan 4th fourth and $175 cardinal for nan afloat year. Adjusted EBITDA was $69 cardinal from Q4 and $252 cardinal for nan afloat year.

Throughout nan year, we remained focused connected our committedness to present beardown profits and rate flows by driving continued robust LINZESS medicine request and demonstrating disciplined disbursal management. As a result, I'm pleased that we were capable to achieved our first adjusted EBITDA guidance of greater than $250 cardinal that we issued astatine nan opening of 2022.

Next, rate and superior allocation. In nan 4th fourth of 2022, we generated $79 cardinal successful rate travel from operations and $274 cardinal for afloat year. We ended 2022 pinch $656 cardinal successful rate and rate equivalents aft deploying astir $250 cardinal during nan twelvemonth by completing our stock repurchase programme and repaying nan main magnitude of our -- connected our 2022 convertible notes.

We judge we are positioning our institution for early occurrence by maximizing LINZESS maturation and actively pursuing innovative, highly differentiated GI assets to bolster our portfolio. We proceed to return a balanced and disciplined attack to superior deployment. We stay focused connected identifying and investing successful opportunities that we judge will create worth for our patients and shareholders complete nan agelong term.

Turning to our 2023 guidance connected Slide 12. As antecedently stated successful January, we expect LINZESS U.S. nett income maturation of betwixt 3% and 5%, driven by precocious single-digit percent medicine request growth. In addition, we expect to support our class-leading payer entree pinch mid-single-digit value erosion. We expect Ironwood gross of betwixt $420 cardinal and $435 cardinal and adjusted EBITDA of greater than $250 million, which includes accrued finance to beforehand our pipeline programs, CNP-104 and IW-3300.

To wrap up, we judge Ironwood is good positioned for continued growth, and we stay focused connected advancing our 3 strategical priorities of maximizing LINZESS, strengthening and progressing our innovative GI portfolio and delivering sustained profits and generating rate flow.

We person a blockbuster marque successful LINZESS that continues to present awesome request growth, pinch nan imaginable to grow nan marketplace pinch a pediatric functional constipation denotation opening this year, if approved; an emerging pipeline pinch anticipated breathtaking milestones ahead; a beardown equilibrium expanse pinch complete $650 cardinal of rate and rate equivalents; and an accomplished guidance squad pinch beardown GI, commercial, supplier improvement and M&A expertise.

We are excited astir nan activity up of america arsenic we strive to make a quality for patients surviving pinch GI diseases and to present shareholder value.

Operator, you whitethorn now unfastened up nan statement for questions.

Question-and-Answer Session


[Operator Instructions]. Our first mobility will travel from David Amsellem pinch Piper Sandler.

David Amsellem

I conscionable had a few. So first, pinch nan guidance successful mind, tin you talk astir your level of assurance that you'll spot much unchangeable -- a much unchangeable trajectory for nett realized value per Rx? And conscionable talk astir nan dynamics that are driving much stableness aliases little successful nan measurement of erosion successful 2023 versus 2022? That's number one.

And then, secondly, tin you talk astir your activity connected LINZESS regarding children nether nan property of 2 aliases 2 and under? And conscionable really you're reasoning astir making advancement towards nan eventual removal of nan container warning? That's my 2nd question.

And past conscionable lastly, really do you framework up nan pediatric opportunity, nan 6 to 17? And particularly, what I'm getting astatine is what's your position connected nan grade to which that could thrust accelerated maturation successful volumes station approval?

Sravan Emany

David, convey you for nan questions. Look, I'll commencement pinch nan -- your first mobility connected price. Your 2nd mobility regarding nan children nether nan property of 2, I'll manus to Mike. And past we tin -- I deliberation we'll -- we whitethorn person you restate nan 3rd question, which I deliberation Tom will answer.

Okay. With respect to nan -- for 2023, arsenic you know, LINZESS is simply a precocious measurement and weighted medicine brand. We are really excited that we're successful nan 11th twelvemonth of nan drug's life cycle, and we're still increasing precocious azygous digits pinch nan drug.

And truthful we've made important investments complete nan people of nan past respective years pinch payers to found and support nan class-leading payer entree that we have. And successful 2023, we did not request to make nan aforesaid level of finance to support that entree arsenic we did successful 2022.

As you know, we continually measure value and measurement trade-offs. We strive to maximize capacity of LINZESS and effort to make profits for nan institution and for nan brand. And truthful arsenic a reminder, LINZESS is preferred connected 10 retired of 10 of nan apical commercialized programs -- commercialized plans and covered on, I think, 7 retired of nan 7 apical Medicare Part D plans.

So arsenic we've entered nan negotiations complete nan past year, I deliberation we entered -- 2022 came successful statement from a value perspective, wherever we thought we were going to beryllium based connected expectations. We request to person visibility conscionable based connected nan volumes and our negotiations pinch payers. And truthful conscionable wherever we beryllium today, we consciousness beautiful bully astir that mid-single-digit erosion for 2023.

Thomas McCourt

I deliberation nan bottommost statement of that, Sravan, is we person awesome visibility to nan contracts. So we saw that past year. We predicted precocious azygous digit. We came successful wrong astir apt 0.5% of what we expected. I deliberation we person akin assurance present wherever we didn't spot arsenic overmuch fierce value erosion successful nan contracting process. So we're projecting mid-single digits.

So I deliberation we do person reasonably -- things tin happen, but I deliberation we person reasonable assurance that we're going to beryllium successful nan mid-single digits.

Sravan Emany


Michael Shetzline

Yes, sure. So successful regards to nan mobility you had astir nan younger kids, including nan little than 2, but besides astir nan container successful general. It's bully to callback that nan original institution of nan explanation erstwhile nan supplier was primitively launched, that container informing was owed really to nan theoretical consequence of adverse events successful kids nether nan property of 18.

We, then, activity pinch nan agency pinch nan post-marketing requirements and our objective studies to put together a scheme to make that data. And arsenic you saw successful 2021, we had a important container revision, which took nan informing from 18 and below, beautiful overmuch encompassing each nan populations, down to conscionable 2 and below, which is wherever it presently is. And that's conscionable because we've had nan opportunity to make information successful those pediatric populations. And you tin spot that's really what sewage nan 6- to 17-year-old sNDA that we submitted astatine nan extremity of past twelvemonth and nan privilege reappraisal we conscionable talked astir during nan call.

So we person a very robust information group successful peds. To your constituent directly, we're continuing further peds studies. We person an further study gone successful 2- to 5-year-olds. That's portion of our moving pinch nan agency. And we're besides readying a study successful little than 2 twelvemonth olds, from 6 months to 0, pinch our partners, AbbVie. We surely judge pinch nan procreation of further objective data, we person a way successful discussions pinch nan agency, to proceed to person nan explanation manifest to existent objective floor plan of LINZESS, which, to date, has been secure and good tolerated.

Thomas McCourt

And possibly I'll return nan -- this is Tom. I'll return nan pediatric opportunity. And obviously, to Mike's point, we person awesome assurance successful nan information and tolerability of this drug. And nan objective information connected nan pediatric -- retired of nan pediatric Phase III programme is really remarkable.

One, it intelligibly demonstrates efficacy. But what's been -- what striking was really good nan supplier was tolerated, which is simply a existent situation pinch presently disposable therapeutic options. When I look astatine nan pediatric opportunity, we talk astir nan 6 cardinal patients that are suffering chronically from functional constipation.

But 1 of nan things to support successful mind, which is different from kids, from adults, is nan seeking-care behavior. That if you've sewage a kid that's really suffering, you're going to spell spot a doctor. So nan percent of care-seeking patients is simply a much, overmuch higher percent, and they mostly coming aggregate times a year, not conscionable 1 aliases 2x. So it's a very disposable population.

We besides cognize that while there's a batch of pediatricians retired there, it's a beautiful concentrated prescriber base. So we deliberation that we tin get to a batch of nan apical prescribers pinch our existing trading efforts. So we talk astir this concentrated promotional effort because we really want to first understand really promotionally delicate nan supplier will beryllium successful nan marketplace, which will past pass further investment.

So we're not conscionable looking astatine individual promotion, we're besides looking astatine different connection channels successful which we tin amended these physicians connected a amended prime for managing their patients. And everything we've seen successful marketplace investigation looks very encouraging pinch respect to nan target merchandise floor plan and nan objective floor plan of nan supplier and nan willingness to try.

As I look astatine nan upside complete time, obviously, we dream to get nan denotation successful June. There's going to -- location could beryllium immoderate upside successful 2023 arsenic we really measure nan promotional response. But nan existent worth creation, we believe, will commencement successful '24 and '25. But I deliberation we each judge that based connected nan size of nan population, nan unmet aesculapian request and nan objective floor plan of nan drug, that LINZESS will beryllium good positioned to thief an atrocious batch of kids.


Our adjacent mobility will travel from Daniel Wolle pinch JPMorgan.

Daniel Wolle

Two questions for me. One, connected CNP-104. Can you explain for america what you will spot versus what nan Street will spot erstwhile early information sounds retired successful nan 2nd half 2023? Is this an soul readout wherever you denote to opt successful assuming affirmative information connected T compartment response? Or will you beryllium capable to merchandise nan information to nan Street?

And past 2nd mobility is, if we are going to spot immoderate data, will it conscionable beryllium connected T compartment response? Or is location imaginable to see changes successful serum result and phosphatase levels? I guess, my mobility is, is it imaginable to spot serum outcome, phosphatase level changes information this year?

Michael Shetzline

Yes, I tin reside that. Thanks for nan opportunity to clarify. Just to beryllium clear, too, arsenic reported successful, nan proceedings is ever planned to widen successful 2024 -- until 2024. What we're trying to do is we're trying to adhd clarity by acknowledging nan opportunity to get information successful nan 2nd half of '23 that will pass america connected nan timing for nan afloat study readout of nan apical statement data.

So successful addition, our nonsubjective successful immoderate of nan objective programs is to usage each nan information we tin to pass business decisions arsenic early arsenic possible. So successful nan 2nd half of '23, we expect to spot nan early information focused connected T compartment responses from enrolled patients. And based connected nan beardown subject astir CNP-104, we really deliberation that nan T compartment consequence is perchance a lead parameter for objective responses.

And you mentioned specifically, alk phos. Alk phos is simply a liver biomarker, right? And again, it's not -- it is still a biomarker. And for products approved pinch alk phos, they often person to do post-marketing commitments to really show that nan alk phos provides a meaningful use to patients.

We really deliberation nan underlying pathology of PBC, driven by nan PDC-E2 antigen, is much specifically addressed by looking astatine nan autoreactive T cells. And truthful that's what we attraction -- what we're really trying to attraction connected successful nan 2nd half of '23.

As I mentioned successful nan prepared remarks, we really expect to spot early information connected nan T compartment responses successful nan 2nd half of 2023. And it will pass america connected nan timing. But astatine that point, we'll springiness you an update connected nan position of nan program.

Daniel Wolle

Okay. So conscionable to clarify, is this an soul readout? Or will you beryllium capable to merchandise that T compartment consequence information to nan Street?

Michael Shetzline

Yes. Again, we're going to make an early appraisal arsenic a mini group successful a very controlled manner conscionable to make soul business decisions. When we spot nan information and we understand nan relevance astatine that point, we'll make a determination to update nan programme further and determine what to do.


Our adjacent mobility will travel from Tim Chiang pinch Capital One.

Timothy Chiang

Mike, I wanted to travel up connected immoderate of nan comments connected CNP-104. I deliberation successful anterior discussions we've had, you've made nan remark that, I guess, successful preclinicals, there's been, what, astir a 90% simplification successful T compartment consequence that you've seen. Is that right? Or -- I mean, obviously, there's immoderate preclinical information retired location connected CNP-104. And I wanted to inquire you, what leads you to deliberation that this should person a very, very affirmative simplification successful T compartment counts here?

Michael Shetzline

Yes. So that's a bully question. And location is preclinical data. There is simply a preclinical, there's an animal exemplary for PBC, which COUR has interrogated that does show that pinch nan curen pinch CNP-104, you get a simplification successful those autoreactive T cells successful an animal model.

But nan 90% number you referred to is simply a number you've heard maine opportunity successful regards to nan impervious of exertion study successful celiac illness that was tally by Takeda actually. That uses nan COUR level and nan nano particles location encapsulate a gluten, and past it gets degraded to deamidated gliadin peptides. That's nan autoantigen successful celiac.

In celiac patients, and this is published successful Gastro successful June of 2021. The celiac patients, nan 2 treatments complete an 8-day play successful celiac patients, saw a 90% simplification successful nan autoreactive T cells successful celiac patients. And that besides translated into a meaningful betterment successful gut epithelial structure, nan histology. So again, that's nan benignant of downstream effect of reducing those autoreactive T cells.

So arsenic we said and you whitethorn person heard maine opportunity before, too, if we spot a akin consequence successful PBC, that would beryllium rather awesome and perchance game-changing for nan opportunity to thief patients pinch PBC. But that's wherever we spot nan data. The preclinical grounds is successful PBC directly. The objective grounds you perceive astir nan 90% is from a celiac study done by -- that's published by different company.

Thomas McCourt

Mike, I've heard you opportunity successful nan past that if we do spot a melodramatic simplification successful T cells, it's intelligibly a beardown parameter of what you would expect to spot arsenic acold arsenic wide objective consequence pinch respect to astir apt nan effect and alk phos and bio compartment aliases bile duct destruction.

Michael Shetzline

Yes, exactly. Because we really deliberation we -- based connected nan science, that this approach, CNP-104, and targeting nan circumstantial autoantigen of PBC, which is nan PDC-E2 antigen, that, that is targeting nan guidelines origin of nan pathology of PBC, which is nan bile duct destruction.

The T cells, nan autoreactive T cells destruct nan bile ducts. If we tin alteration those T cells, past we should trim aliases perchance destruct nan bile duct demolition of PBC patients. And again, nan celiac information from impervious of exertion and proof-of-concept successful patients really showed that they're decreased successful autoreactive T cells. I mean celiac patients did amended gut epithelial histology.

Timothy Chiang

No, that's helpful, Mike. Maybe conscionable 1 follow-up then. The dosing successful nan celiac study, is that comparable successful nan dosing that you're moving successful nan PBC study? I mean is location thing comparable there?

Michael Shetzline

Yes. I deliberation it's a awesome question, and that's why we're studying 2 doses successful nan existent PBC patients. So I think, clearly, there's a logic to make nan association. But I do deliberation it's besides adjacent that different diseases whitethorn person a different pharmacodynamic consequence to doses. So we're intelligibly open-minded successful position of arsenic we do this study to beryllium cognizant that we want to find nan correct dose successful PBC patients. And that similarly, I'm judge what's happening successful nan celiac abstraction arsenic well.


[Operator Instructions]. Our adjacent mobility will travel from Boris Peaker pinch Cowen.

Boris Peaker

One mobility connected CNP-104. You mentioned that nan marketplace is astir 130 patients, if I heard you -- 130,000 patients, if I heard you correctly. Can you break that down based connected illness severity? And if location is immoderate peculiar subgroup that 104 will beryllium targeting?

Michael Shetzline

Yes. So I deliberation it's a bully question. I deliberation arsenic pinch astir liver diseases, this facet of illness severity is important. And successful fact, you astir apt cognize that pinch obeticholic acid, nan explanation is indicated astir aspects of liver illness severity successful position of not being advised successful patients pinch cirrhosis aliases decompensated liver disease.

So our program, because it's evidently innovative and caller successful diligent populations, is starting pinch much early liver illness patients pinch PBC. But nan reality is nan underlying system should beryllium broadly applicable to each patients pinch PBC. Because, again, we're targeting nan immunology down nan bile duct destruction.

In utilizing semisynthetic bile acids and different approaches, you could spot a reason. And arsenic demonstrated pinch immoderate of nan semisynthetic bile acerb labeling, that location mightiness beryllium a logic to person interest pinch immoderate much terrible liver illness patients. But if we're -- if nan subject plays retired and we're capable to trim those autoreactive T cells, that should beryllium applicable to nan wide organization of patients.

Now, again, we're successful proof-of-concept study. We sewage a agelong measurement to spell getting data. But again, that's why we for illustration nan programme because it's really grounded successful nan subject of nan existent guidelines origin of PBC.

Boris Peaker

Great. And my 2nd mobility is, possibly you could remark connected your thoughts connected nan effect of Inflation Reduction Act connected LINZESS?

Sravan Emany

Sure. Boris, this is Sravan. I'll return that. Look, arsenic pinch immoderate projected legislation, we'll travel nan developments intimately here. We're moving pinch our partner, AbbVie, to measure immoderate imaginable effect connected our business. At this stage, it's still -- I think, a wide number of unknowns astir definite aspects of this legislation.

And reasoning astir nan imaginable effect present to LINZESS, it's important to note, we've been moving pinch Medicare Part D for years. And for galore years, nan halfway facet of our strategy has been to guarantee wide sum and diligent access. So from a speech standpoint, from a discounting standpoint, nary of this is caller to us. And truthful I deliberation we're -- we'll travel backmost to you erstwhile we person a amended consciousness of what that looks like. But correct now, I deliberation that's what we tin say.

Thomas McCourt

And I deliberation we're reasonably confident. I mean, we're providing very important discounts presently to Medicare. I mean -- which is nan logic why we're seeing immoderate value erosion present because we are moving intimately pinch nan Medicare payers arsenic good arsenic nan commercialized payers to guarantee very wide payer access.

So -- could it person immoderate impact? Yes. But I deliberation of each nan brands that are retired location that they're going to beryllium focusing on, we're already successful nan crippled and actively negotiating pinch nan awesome payers. So we'll person to hold and see, but I deliberation we consciousness beautiful bully astir nan position we're in.


And pinch nary further questions, we will reason today's conference. Thank you for your participation, and you whitethorn now disconnect.

Editor: Naga

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