12 Best Small Cap Pharma Stocks to Buy Now

5. Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD)

Number of Hedge Fund Holders: 29

Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) stands fifth among the best small cap pharma stocks to buy now. It is a leading company focused on developing treatments for gastrointestinal (GI) diseases, with its main product, Linzess (linaclotide), being the top prescription treatment for irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC) in the U.S. The company generates revenue through Linzess sales and collaborations with other companies like AbbVie. Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) stands out for its deep expertise in the GI field and its strong pipeline of potential drugs, positioning it to address unmet medical needs and create significant market opportunities in the GI space.

Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD)’s Q3 2024 results show a mixed performance. Total revenue dropped to $91.6 million, down from $113.7 million in Q3 2023, mainly due to lower collaboration revenue from AbbVie related to Linzess. While prescription demand for Linzess grew by 13%, the company’s revenue from the drug decreased because of pricing pressures.

Net income also saw a significant decline, falling to $3.6 million ($0.02 per share) from $15.3 million ($0.10 per share) in the same quarter last year. Adjusted EBITDA decreased to $26.2 million from $49.1 million, reflecting the impact of lower revenue and pricing challenges.

Linzess U.S. net sales dropped by 19%, from $279.0 million to $225.5 million. Collaboration revenue from AbbVie also decreased to $88.9 million, compared to $110.1 million in Q3 2023. Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD)’s focus remains on treating GI disorders, including IBS-C and CIC, with LINZESS, and they are also working on apraglutide for patients with short bowel syndrome (SBS). They expect to submit the NDA for apraglutide in Q1 2025, which could provide a major growth opportunity for the company.