CompaniesIRWD
Overview
IRWD
Ironwood Pharmaceuticals
HealthcarePharmaMispriced Patent Cliff
$3.65+2.8%
Market Cap
$576M
SEC 10-K / Q1 2026 10-Q
P/E (TTM)
5.9×
via financials
Rev Growth YoY
158.9%
+158.9%SEC filing
Gross Margin
75.2%
SEC filing
FCF Yield
8.5%
calculated
Upside to FV
—
vs fair value
Conviction
3/5Single-drug pharma priced for a 2026 patent cliff — but every ANDA settlement locks generics out to March 2029, at just 3.1× guided EBITDA.
Research Depth
ScreeningDeep DiveFull Model
Updated 13d ago
Thesis
Ironwood markets LINZESS (linaclotide) for IBS-C/CIC. The market discounts a 2026 patent cliff, but every settled ANDA agreement locks generics out until March 31, 2029 — Teva's license starts then, with Sandoz/Aurobindo following 2030. Q1 2026 revenue was $106.5M (+159% YoY) with $40.8M net income, and FY2026 adj EBITDA is guided >$300M, putting the stock at ~3.1× guided EBITDA. At 2.5× forward earnings, any beat could mechanically re-rate the stock 30–50%. Phase 1.
Bull Case
Mispricing~3.1× guided EBITDA and 2.5× forward P/E; generics locked out to March 2029 = ~2.5 years of near-monopoly cash flows the market is ignoring.
MomentumQ1 2026 revenue $106.5M (+159% YoY), $40.8M net income; FY2026 LINZESS net sales guided $1.125–1.175B.
PipelineApraglutide (short bowel syndrome) Phase 3 STARS-2 starting Q2 2026 — could eventually replace LINZESS.
Bear Case
Melting Ice CubeSingle-drug dependency; after 2029 generic entry, LINZESS revenue faces a structural step-down.
Balance SheetNegative book equity; $200M convertible notes mature June 2026 — an imminent cash obligation. 12.6% short interest.
IRA CliffCMS-negotiated LINZESS price (~$136/mo vs ~$568 list) takes effect Jan 1, 2027, pressuring Medicare volume economics.
Key Metrics
Market Cap
$576M
SEC 10-K / Q1 2026 10-Q
Enterprise Value
$953M
calculated
Revenue (TTM)
$362M
SEC filing
P/E (TTM)
5.9×
via financials
Forward P/E
2.5×
consensus
P/S (TTM)
1.7×
via financials
P/B
[awaiting: neg equity]
via financials
EV/EBITDA
3.1×
calculated
PEG
—
calculated
Revenue Growth
158.9%
SEC filing
Gross Margin
75.2%
SEC filing
Operating Margin
68.1%
SEC filing
Net Margin
28.3%
SEC filing
Free Cash Flow
$51M
SEC filing
FCF Yield
8.5%
calculated
Debt / Equity
[awaiting: neg equity]
SEC filing
Current Ratio
1.4×
SEC filing
Short Interest
12.6%
exchange
Institutional Own.
98.3%
13F
Insider Own.
2.9%
proxy
Shares Out.
158.0M
SEC filing
Float
150.0M
exchange
Valuation
Price vs Fair Value
Bear$2.50
Base$5.50
Bull$8.00
Now $3.65
Bear Case
$2.50
Apraglutide fails; converts strain balance sheet; cliff prices in
Base Case
$5.50
Generics locked to 2029; >$300M EBITDA holds; modest re-rate from 2.5× fwd P/E
Bull Case
$8.00
Apraglutide advances + debt paydown executes; multiple normalizes
DCF Summary
DCF awaiting Phase 2+
Discounted cash-flow model is built once research reaches Deep Dive.
Historical Multiples
Multiple history pending
This section is being deepened.
Peer Comparison
Peer set pending
Comparable companies awaiting selection.
Financials
Income statement pending
Awaiting SEC filing backfill.
Balance sheet pending
Awaiting SEC filing backfill.
Cash flow pending
Awaiting SEC filing backfill.
Phase 1 — full backfill pending; Q1 2026 from 10-Q. Negative book equity (debt-financed buybacks).
Catalysts
Jun '26
Balance Sheethigh relevance
$200M convertible-note repayment
Removes the most acute near-term liquidity overhang; cash repayment confirms balance-sheet management.
Aug–Nov '26
Earningshigh relevance
Q2/Q3 2026 — EBITDA toward >$300M run-rate
At 2.5× forward P/E, an earnings beat could mechanically re-rate the stock 30–50%.
H2 '26
Pipeline
Apraglutide NDA submission / FDA filing acceptance
Shifts apraglutide to 'under active FDA review'; potential trigger for institutional re-entry.
Risks
| Risk | Category | Severity | Probability | Impact on Thesis |
|---|---|---|---|---|
| $200M converts due June 2026 | Market/Macro | High | High | Imminent cash obligation against a negative-equity balance sheet. |
| Single-drug dependency / 2029 cliff | Execution | High | High | Generic entry March 2029; revenue step-down unless apraglutide succeeds. |
| IRA price cut from Jan 2027 | Regulatory | Medium | High | CMS-negotiated ~$136/mo vs ~$568 list pressures Medicare volume economics. |
| 12.6% short interest | Market/Macro | Low | Medium | Amplifies drawdowns on any negative print. |
Technical Snapshot
52-Week Range
$0.62$3.65$5.78
RSI (14)
55
neutral
50-Day MA
$3.40
+7.4%above
200-Day MA
$2.20
+65.9%above
Avg Vol (30d)
5M
0%vs average
Support Levels
$3.00$2.20$0.62
Resistance Levels
$4.50$5.78
Price path reconstructed from the 52-week range, current price, and 50/200-day moving averages — connect a live market-data feed for production.
Ownership & Insider Activity
Top Institutional Holders via 13F filings
13F holdings pending
Institutional holder detail awaiting filing.
Insider Activity
Institutions ~98%; insiders ~2.9%. Short interest ~12.6%.
Insider transactions pending
This section is being deepened.
Peer Comparison
Peer set pending
Comparable companies awaiting selection.
Research Notes
2026-06-03Internal
Patent-cliff mispricing
Generic lock-out is March 2029 via settled ANDA agreements, not 2026. At ~3.1× guided EBITDA the cliff looks over-discounted; the $200M June 2026 convert and negative book equity are the offsetting risks.