Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) Q4 2023 Earnings Call Transcript

Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) Q4 2023 Earnings Call Transcript February 15, 2024

Ironwood Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $-0.01 EPS, expectations were $0.2. IRWD isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, and welcome to the Ironwood Pharmaceuticals Fourth Quarter and Full Year 2023 Investor Update Call. [Operator Instructions]. And finally, I would like to advise all participants that this call is being recorded. Thank you. I’d now like to welcome Matt Roache, Director of Investor Relations to begin the conference. Matt, over to you.

Matt Roache: Thank you, Gavin. Good morning, and thanks for joining us for our fourth quarter and full year 2023 investor update. Our press release issued this morning can be found on our website. Today’s call and accompanying slides include forward-looking statements. Such statements involve risks and uncertainties that may cause actual results to differ materially. A discussion of these statements and risk factors is available on the current safe harbor statement slide as well as under the heading Risk Factors in our annual report on Form 10-K for the year ended December 31, 2022, and our quarterly report on Form 10-Q for the quarters ended June 30, 2023, at September 30, 2023, and in our subsequent SEC filings. All forward-looking statements speak as of the date of this presentation, we undertake no obligation to update such statements.

Also included our non-GAAP financial measures, which should be considered only as a supplement to and not a substitute for or superior to GAAP measures. To the extent applicable, please refer to the tables at the end of our press release for reconciliations of these measures to the most directly comparable GAAP measures. During today’s call, Tom McCourt, our Chief Executive Officer, will begin with a brief overview. Mike Shetzline, our Chief Medical Officer, will discuss our pipeline and Sravan Emany, our Chief Financial Officer, to provide a commercial update and review our financial results and guidance. Today’s webcast includes slides. So, for those of you dialing in, please go to the Events section of our website to access the accompanying slide separately.

With that, I’ll turn the call over to Tom.

Tom McCourt : Thanks, Matt. Good morning, everyone, and thanks for joining us today. I’m absolutely delighted to share with you the progress we made in 2023 and why we believe our future is bright. We made important progress in 2023 toward realizing our vision of becoming the leading GI health care company in the industry. I am very proud of the Ironwood team and the significant headway we made in 2023 across our three strategic priorities, which are: maximize LINZESS, advance our GI pipeline and deliver sustained profits and cash flows. As we turn our attention to 2024, I’m confident in our strategy and look forward to what we expect to be an exciting and transformational year for our company. Let’s begin on Slide 6 with a brief overview of some of our key achievements against our strategic priorities in 2023.

And First, maximizing LINZESS. In its 11th year on the market, LINZESS had another terrific year as the leading prescription treatment for adults with IBS-C and chronic idiopathic constipation. In 2023, prescription demand increased a robust 10% year-over-year. New-to-brand prescriptions ramped up significantly, increasing 15% compared to 2022, which we believe is a key indicator for future growth potential. In addition, LINZESS reached an all-time high of 46% in TRx share in the combined branded and generic IBS-C and chronic idiopathic constipation market strengthening its market leadership. And in June of 2023, LINZESS received FDA approval for the functional constipation in pediatric patients ages six to 17, becoming the first and only approved prescription therapy for this patient population, an achievement we’re incredibly proud of.

Moving forward, our focus remains on continuing to grow LINZESS subscription demand and delivering strong brand profits and cash flow. Next, advance our GI pipeline in areas of high unmet need. Last year, we strengthened our GI pipeline with the acquisition of VectivBio, including its lead asset, Apraglutide as the next-generation, long-acting GLP-2 analog, we believe Apraglutide, if successful, has the potential to become the standard of care in treating patients with short bowel syndrome dependent on parenteral support based on its clinical profile and the potential convenient once-weekly dosing. If approved, we believe Apraglutide can achieve $1 billion in peak net sales. Apraglutide’s unique pharmacologic properties and strong clinical data to date, including the positive data from the STARS Nutrition study gives us confidence in the STARS Phase 3 study which will let on track to read out in March.

In addition to Apraglutide, we’re also excited about the progress of CNP-104, a potential disease-modifying therapy for the treatment of primary biliary cholangitis or PBC. Late last year, we completed an early analysis that showed evidence of favorable T-cell responses in patients treated with CNP-104 supporting the mechanistic rationale for the asset, which we believe could positively impact disease progression in PBC. We’re looking forward to the top-line Phase 2 data in the third quarter. We believe both Apraglutide and CNP-104 have the potential to improve standard of care and the quality of life for patients suffering from these serious GI diseases with key data expected this year. Our third priority is to deliver sustained profits and cash flow.

We’re committed to being thoughtful and disciplined in our capital allocation as we strive to grow the business, achieve our vision and deliver value to patients and shareholders. Looking ahead to 2024, we expect to deliver greater than $150 million in adjusted EBITDA, while continuing to progress multiple clinical programs with the potential to deliver long-term growth. We believe the positive momentum across the pipeline programs, combined with the continued strong performance of LINZESS uniquely positions us for success of our mission to be the leader in GI. We’re excited about the key near-term data catalysts, which we believe will present the opportunity to propel Ironwood’s growth and create value for patients and shareholders for years to come.

At the end of this month, we will be celebrating rare disease day. I’d like to take this opportunity to say a special thank you to all the employees, patients, caregivers and advocates in the rare disease community for their shared dedication to advancing and supporting new therapies for diseases with significant unmet medical need. I would now like to turn the call over to Mike to review our pipeline. Mike?

Mike Shetzline : Thanks, Tom, and good morning, everyone. Over the past few years, we’ve made significant strides to expand our footprint in GI. Today, we have a portfolio of innovative GI development programs with upcoming data that could be transformational for our company, as shown on Slide 8. In March, we expect top-line data from the STARS Phase 3 clinical program of Apraglutide in short bowl syndrome with intestinal failure, which was our primary focus and the value driver of the VectivBio acquisition. We believe Apraglutide, if successful and approved has best-in-class potential as the only once-weekly GLP-2 analog for the whole spectrum of patients with short bowel syndrome dependent on parenteral support also known as SBS-IF, a disease for which there is considerable unmet need.

The novel STARS 3 trial is designed to show efficacy across both patient subtypes, stoma and colon-in-continuity. As you may recall, the primary endpoint is relative change from baseline in weekly parenteral score volume at 24 weeks. We view success as achieving the primary endpoint as the only once-weekly GLP-2 therapy for SBS-IF and look forward to seeing the pivotal data in March. In addition to evaluating Apraglutide for short bowel syndrome with intestinal failure, we’re also looking at the asset as a potential treatment for patients with graft-versus-host disease or GvHD. Data is expected from this exploratory Phase 2 study later this quarter, which will inform a decision on further investment in the program. Next, CNP-104 for PBC. We’re encouraged by the favorable T-cell responses in patients treated with CNP-104 that we saw last year and look forward to seeing how this may impact liver function in the top-line results expected in the third quarter of 2024.

We’re excited about CNP-104 because it has the potential to be the first disease-modifying therapy for patients suffering with PBC. As there are no therapies on the market today that address the root cause of the autoimmune destruction of the liver bio ducts. And finally, IW-3300 a wholly owned Ironwood asset for visceral pain conditions, including interstitial cystitis and bladder pain syndrome. The Phase 2 study is ongoing and progressing well. The near-term catalysts I just highlighted reinforce our confidence in the tremendous opportunity we have in front of us with multiple programs that we believe have the potential to improve the standard of care and the quality of life for patients suffering with GI diseases. With that, I’ll turn it over to Sravan.

Sravan Emany: Thanks, Mike, and good morning, everyone. I’ll begin on Slide 10. As Tom mentioned earlier, LINZESS had another very strong year in 2023. As you can see, demand growth has been remarkable over time, reinforcing that patients and health care professionals continue to choose LINZESS in a growing market. We believe the strong demand momentum and success of LINZESS will continue as a result of high treatment satisfaction with both patients and health care professionals, combined with increased clinical utility from the new pediatric syndication, class-leading formulary access, guideline recommendations, focused commercial execution and new patient start acceleration. Next, I’ll provide a brief update on the VectivBio transaction.

The integration of Ironwood and VectivBio business operations is ongoing and progressing very well. In December, we successfully completed the squeeze-out merger under Swiss law. At that time, Ironwood purchase all remaining outstanding ordinary shares of VectivBio for $17 per share in cash. Next, I will provide additional details on our fourth quarter and full year 2023 financial performance. I’m pleased that we were able to meet or exceed all three of our guidance metrics in 2023. I’ll begin with LINZESS. LINZESS U.S. net sales were $274 million in the fourth quarter of 2023, an increase of 5% compared to the fourth quarter of 2022, driven by prescription demand growth, 10%, partially offset by price and inventory channel fluctuations. For full year 2023, as shown on Slide 11, LINZESS U.S. net sales were $1.73 billion, an increase of 7% year-over-year, driven by continued strong LINZESS prescription demand growth of 10%.

Commercial margins were 77% in the fourth quarter compared to 74% in the fourth quarter of 2022. For the full year 2023, commercial margins were 73%, in line with full year 2022. Moving to Ironwood revenues. In Q4, Ironwood revenues were $118 million, driven primarily by U.S. LINZESS collaboration revenues of $114 million. For the full year, Ironwood revenues were $443 million with LINZESS U.S. collaboration revenues of $430 million. In the fourth quarter and for the full year, Ironwood recorded $32 million, and $83 million income tax expense, respectively, the majority of which was noncash. In addition, Ironwood recorded interest expense of $8 million and $22 million in the fourth quarter and for the full year, respectively, and recorded $1 million and $19 million in interest and investment income, respectively, in the fourth quarter and for the full year.

GAAP net loss was $2 million in the fourth quarter. driven by a onetime noncash tax expense tied to a change in Massachusetts state laws and approximately $1 billion for the full year in 2023. As a reminder, for the full year, GAAP net loss includes a onetime charge of approximately $1.1 billion from the acquisition of VectivBio. Adjusted EBITDA was $40 million in Q4 and a loss of $885 million for the full year. The full year adjusted EBITDA loss also includes the onetime charge of approximately $1.1 billion from the acquisition of VectivBio. In the fourth quarter and for the full year 2023, Ironwood generated approximately $36 million and $183 million, respectively, in cash flow from operations and ended the year with $92 million in cash and cash equivalents after repaying $100 million of the outstanding principal balance on our revolving credit facility in cash.

As of the end of December, the outstanding drawn balance on the revolver was $300 million. Next, I’ll review our 2024 guidance on Slide 12. As previously stated in January, we expect LINZESS U.S. net sales growth in the low single digit’s percent, driven by continued high single-digit prescription demand growth, offset by mid- to high single-digit price erosion primarily driven by the Medicaid AMP cap removal legislation, which went into effect on January 1 of this year. We expect Ironwood revenue of between $435 million and $455 million, and we expect adjusted EBITDA of greater than $150 million which is in line with our previously stated expectations on announcement of the VectivBio acquisition of greater than $175 million of operating cash flows in 2024.

To wrap up, we are very pleased with the progress we made in 2023. Ironwood is a much different company than we were just a few years ago, and we believe we have positioned 2024 as a potential transformational year for our company. Looking ahead, we remain focused on maximizing LINZESS, advancing our GI pipeline and delivering sustained profits and cash flows. We are excited about the continued strong LINZESS performance. and the key pipeline catalysts ahead of us, which we believe can propel Ironwood’s next phase of growth. We look forward to sharing the STARS Phase 3 top-line results with you in March. I want to close by thanking all of our employees, patients, caregivers and advocates for their shared dedication to advancing and supporting therapies for GI diseases.

Operator, you may now open up the line for questions.

Operator: [Operator Instructions]. The first question is from the line of Amy Li from Jefferies. Your line is open.

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Q&A Session

Amy Li : Thanks, so much for taking my questions. Just two from us. On CIC, it looks like Apraglutide twice daily is showing higher improvement on PS reduction compared to GATX and CIC patients despite a relatively similar approval. Do you view this as a sign that improved PK will translate to efficacy? Additionally, can you walk us through the order of the hierarchical testing that you’ll be looking at for the secondary endpoints and where CIC falls relative to this? And then finally, can you give us any color on how much additional sales force that you may need to add to launch Apraglutide in SBS and how we should model SG&A. Thanks so much.

Sravan Emany: Okay. Well, thanks, Amy. I guess I’ll start by handing it over to Mike can answer the first two questions, and I’ll answer the third on the sales force.

Mike Shetzline: Yes. Thanks, Amy. Good questions. So, the first question you ask is related to PK and exposure around the Apraglutide program and sort of some of the findings they had, which did sort of portend a better from a parenteral support reduction perspective of outcome in the CIC population. The root of your question is, obviously, what gives you the best pharmacodynamic response from a PK perspective. And we’ve actually modeled and looked into this quite extensively because the question is whether it’s Cmax or whether it’s AUC, right, whether you need to cover the receptor for multiple times or consistently throughout time and that’s sort of where you’re getting at with the Apraglutide twice weekly that by doing it twice weekly or giving the drug twice weekly, they maintain sort of a higher trough throughout the week.

And is that the reason why they might see better parental support reductions. We certainly think that there is an exposure-related benefit to having drug chronically or at least persistently available to the receptors. And that’s one of the reasons why we think that once weekly has the potential opportunity to best-in-class. So, we certainly consider that. We’re going to learn a lot from the study in terms of how to model that pharmacodynamic response, but it certainly is part of the PK/PD profile that we think is very positive and aspirational for Apraglutide. The second question you asked is about the key secondaries. So, we have taken into account statistically the secondary endpoints, obviously, to have future discussions with the agency on potential label language.

Those key secondaries are the first one is really the reduction of at least 1 day off parenteral sport for the total population at week 24. So, it’s not a subtype endpoint, it’s the total population. The second one really looks at the parental support volume reductions in Stoma, the subpopulation at week 24. And then the third one looks at the parental support volume reductions for CIC, specifically at week 48. And because as we’ve mentioned many times, we think the CIC population takes a little longer to respond. They start with lower parental support volume needs and those kind of things. The fourth one is the enteral autonomy endpoint, and that’s at week 48.

Sravan Emany: And then with respect to the sales force question. At launch, we will have the largest sales force ever rate against this disease state with over 90 — our existing 90 reps — 90-plus reps here at Ironwood. From an incremental investment standpoint, I think we’ll see as we get closer to launch of how much that needs to evolve, we don’t think it’s very much. We do think there will be additional investments though tied to selling a therapy that is a rare disease. And so that includes hub services, patient services. There is this becomes much more of a service model where we have to follow the patient through their patient journey and help support them. So, we’ll build out some of those additional ancillary components of our sales force and our team. But that we don’t think is significant in terms of incremental spend and would not affect the guidance we’ve already given in terms of where we’ll be in 2025.

Tom McCourt: This is Tom. I think the big thing to understand with the sales force deployment is we’re already in the offices today, a lot of these physicians who really kind of specialize in managing these patients reside. So that’s the reason why we feel very confident that we have an adequate sales force. There may be some additional roles that will be specific for certain large GI practices that we’re taking a look at that I think we very creatively and effectively accelerate the uptake of the drug. But we’re not looking at certainly a significant incremental spend in sales force.

Operator: Your next question comes from the line of David Amsellem from Piper Sandler. Your line is open.

Unidentified Analyst : This is Tim on for David. As we get closer to Apraglutide data, what are your latest thoughts on pricing of Apraglutide to the extent a generic Gattex materializes? And what’s your latest thinking on your strategy for Apraglutide ex U.S., particularly in Europe?

Sravan Emany: Yes. So, thanks, Tim. First, on pricing, I think we’re still working on some of that in terms of where we’ll price it. I don’t think we’ve communicated yet our strategy. And I think we still have some time before we feel like we’re ready to do that. I think a lot of that will tie to what our clinical profile actually looks like and how differentiated it actually is. And so, we’ll wait until we have the data in March before we start working on that. With respect to the second component of your question, which is apra U.S., look, I think we understand that our current field and sales force is heavily U.S. and we’re open, I think, some flexibility about how we’ll think about ex U.S. in a very strategic manner for our company.

Tom McCourt: I mean you can imagine, I mean, having a best-in-class product like this or potentially best-in-class product business, and we are certainly getting a fair bit of inbound interest but obviously, it’s something we’re going to certainly take advantage of as we move forward.

Operator: Your next question comes from the line of Mohit Bansal from Wells Fargo. Your line is open.

Mohit Bansal : Great. Thanks for taking my question. I have two. So, one is like how much information about the secondary end point that you just mentioned, we could expect to see with the top line release in March. That’s the first question. And the second one is, you do have a differentiated leaning mechanism from the parental support. Could you talk a little bit more about that? And could it impact placebo as well as we look forward to the data. Thank you.

Mike Shetzline: Yes, sure. So, as I mentioned, I mean, I can give you the key secondaries are described as I put them forward in the prior question. I mean, the main one is the days of the — at least one day of parental support, you may recall that’s kind of a standard endpoint. It’s been around since the Gattex phase because Gattex use a responder definition and the responder was a 20% reduction. That translated roughly to like one day out of the week and stuff like that. But that’s sort of been one that’s been compared across agents in the class. And then the other two, we’re really just trying to get granular on the subpopulations between stoma and CIC. The stoma is at 24 weeks, as we mentioned, because oftentimes the stoma populations have a higher parental support volume need they tend to respond more quickly.

That’s why the 24 week is also at that point for that reason. The third one is the CIC specific subpopulation, but that’s a parental support volume reduction at week 48 because they often take longer to respond. And then finally, antroautonomy, which is the complete lifelong parenteral support, which we think is a value to patients. And then we’ll certainly share the data in March with the top-line results. And the second question, you talked about the weaning algorithm. The weaning the aspect of weaning — obviously, weaning is a part of the study, right? But the aspect of the difference between Stoma and CIC has been around since the Gattex days and really became clear sort of in the post-marketing approach to Gattex with patients because even though the CIC subpopulation did not participate in the primary endpoint in the Gattex program or even the CLEPA program really highlighting the differences between CIC and Stoma.

The real data — looking closer at that data, it really became clear that the reason for that is the CIC patients start with a lower parenteral score volume at baseline and, therefore, make smaller incremental reductions. And that called into question this 10% threshold for urine output to define who gets to wean. And so that got to a lot of external discussions, which were happening for the last decade, honestly. Could CIC patients participate in the primary endpoint, if they could wean without hitting the 10% endpoint? And that’s what the weaning algorithm is all about. It’s saying, if patients in their weaning have greater than 10% or increasing EUTRx, but they can wean all patients. But if they have less than 10% and they’re a CIC patient, then they go through a bunch of other parameters, like their diet, like their stool, input, their nutritional status or their stool output, their nutritional status, their body weight and all those parameters.

And if they’re all in line and the subject is doing nutritionally very well, then even if they don’t hit the 10%, they could still participate in weaning. The weaning algorithm we used in the STARS nutrition study, and you saw that data presented at UEGW and the patient did very well. Granted a small 9-patient open-label study, but they all did respond and were able to wean. And so, the point to the question you asked about the placebo response is a good question, that’s an open-label study. So, we certainly got the treatment effect from that study. We had a 40% reduction in parental per volume at week 24. That increased to 52% in week 52. And so, we certainly think there’s an opportunity for therapeutic gain. To your point about placebo, we roughly look at the placebo response agnostic of that aspect across the patient population.

So even including what we’ve seen in other studies with the placebo response around the 20%. We think there’s certainly room there for therapeutic gain with the weaning algorithm in CIC patients.

Operator: Your next question comes from the line of Chase Knickerbocker from Craig-Hallum Capital Group. Your line is open.

Chase Knickerbocker : Good morning, guys. Thanks for taking my questions. I actually wanted to start with the LINZESS question, believe it or not. So, a longer one to start. I just want to dig in a little bit deeper on 2024 net revenue guidance. Maybe talk about the different moving pieces that could drive outperformance or underperformance on that guide from a standpoint of the net pricing decline assumptions. So, you guys like pretty confident in those assumptions. Is the assumed pediatric growth driving some increased Medicaid exposure that actually makes that erosion a little bit worse. And what does additional pediatric exposure or different patient mix kind of do to that erosion kind of assumption?

Sravan Emany: I would say our guidance is pretty straightforward and consistent with how we’ve done it in the past years, which is, at this point in time, we’re still anticipating high single-digit volume growth over a very strong 2023. The fact that we’re going to still grow another year from a volume perspective, that’s going to be high single digits. Again, it’s pretty impressive in my mind. We also gave guidance at the JPMorgan Healthcare Conference that we think. And today, we think the price erosion and any other fluctuations will essentially be mid to high single-digit headwind to have low single-digit growth in for the full year. Now if some of those headwinds do not materialize, we could have a year that resembles last year.

But at this point in time, we feel that given the change in the AMCAP rules from Medicaid that we anticipate, just given our volume and where our book of business has been over the last few years that’s going to affect us this year. It won’t affect us on a 2025 over 2024 perspective because it’s a year-over-year measure. But for this year, we do think that there will be a meaningful headwind from a price perspective just given our volumes on Medicaid.

Tom McCourt: I think the one thing that we are seeing is we’re seeing growth across the entire population. I think that’s important to note. You look across all doses, we’re seeing very strong growth, both in new to brand, new prescriptions as well as overall total Rxs [ph]. So, I mean that’s very healthy. We are seeing some very promising movement in the pediatric population but at this point, it’s a relatively small percent of our business, but it’s growing rapidly, and there is probably some additional exposure on the Medicaid side in the pediatric population. But I think as far as overall health of growth, we’re seeing it across all patient populations, all payer segments. So, I think it’s all heading in the right direction.

And to Sravan’s point, we see this cap change is kind of a onetime hit this year. But the most important thing that we have to continue to do is drive demand growth. It’s the one thing that’s within our control. And what we do know about this brand, it continues to be extremely promotionally responsive, but we’re going to continue to invest appropriately in the brand.

Chase Knickerbocker: Yes. Thanks, Tom. And maybe kind of piggybacking off of that. If we dig in a little bit more to the volume growth assumptions. What percentage, I guess, or what portion of that growth kind of comes from the pediatric population in your guys’ assumption? What portion of that kind of growth assumption? And then also just to ask another question before I hopped in back in the queue. On 104, I mean, pretty high price tag acquisition recently, obviously, in PBC. Maybe speak to how this kind of validates your kind of attempts at the space and way too early of a question, but if your thesis plays out here, 104 is an approvable medicine. And how do you see kind of fitting into the treatment paradigm?

Sravan Emany: Chase, we haven’t given guidance on the size of the pediatric indication. I think we’re still evaluating. It’s small, and we’re still — but it’s growing. We’re still evaluating through some of the pilots that we’re running. We extended them into this year. I think we mentioned that earlier this year. And so, as we know more, we’ll come back and give more granular guidance potentially over the course of the year. But at this time, it’s baked into our guidance. I want to reiterate what Tom said is we continue to see patients, more patients seeking care in this space. And the good news is that as the market leader, we’re seeing more patients, we get a disproportionate share, and more patients end up coming on LINZESS.

Based on the clinical profile, patient satisfaction, and formulary access, which is class-leading and just the duration on the market effectiveness. So, we do get a disproportion of that, but a lot of it is also just broader demand also as patients care. With respect to CNP-104, it’s — congratulations to the Simon Bay team. Obviously, that’s a great outcome for them. We think this space is — the reason we entered the space is we found an asset from a science perspective and a profile perspective, we think that actually, one is an extension of our GI continuum. And in terms of where we can — we, as an organization, can continue to treat GI diseases. So, it’s poor within our strategy. Two, I think we found the signs behind this asset and the potential to be disease-modifying, exceptionally interesting.

As Mike had mentioned earlier, all the other therapies on market essentially treat the underlying symptoms of PBC, there if you actually get to the autoimmune destruction whereas we think — and again, we will — with a hypothesis, which we will have more data for you in the third quarter this year. And hopefully, it’s validated that we think that CNP-104 actually will stop and arrest that autoimmune destruction. And so, which we think will be a differentiated asset in this market. And so that’s our perspective. But again, congratulations to the Simon [indiscernible].

Tom McCourt: Yes. I think this is all great news. I mean this is — it really puts a focus on it is a highly problematic disease that needs better care. So, I think it increases the intention and the momentum in this marketplace and hopefully, if we’re right, we can really take advantage.

Operator: Your next question comes from the line of Jason Butler from JMP Securities. Your line is open.

Jason Butler : Thanks for taking my questions. Just two for me. For apraglutide, could you just walk us through the gating items following positive results from STARS and a potential regulatory submission, and then just on one, how are you thinking about further investment in the pediatric commercial opportunity? It’s still early, like you said, but are you seeing signals that continue to justify investing in that business?

Sravan Emany: Yes, I’ll start with the second one, Jason, on LINZESS, just for a point of continuity and then Mike will answer the first question regarding regulatory pathway. Yes, look, early signs are very positive on pediatrics. And just from a new to brand, specific dose size that 92-microgram or so microgram dose, we feel really — we feel positive about it. We think it’s an opportunity worth pursuing between now and 2029 and worthy of the investment but again, it’s still too early to provide granular guidance as to what we think it will be in this year. And so, we’re just — as we know more, we’ll share that. We just don’t want to — given the growth profile and given how small it is right now. It’s something that we just want to be more cautious about from a guidance perspective. But we are pleased with the uptake and pleased with the return on investment.

Tom McCourt: But we’re not seeing a dramatic increase in our investment. I think this is maybe a refinement of our marketing mix. I mean there’s no question. We’re running a number of pilots, digital pilots right now, certainly sales pilots right now. And we’re taking a critical look on the whole Medicaid exposure piece, which has to be part of the equation with regard to where we’re going to focus our activity and investment. So, I think we’re very pleased with what we’re seeing as Sravan said, but we certainly are going to be very, very disciplined with regard to how we invest our money at this point in the life cycle.

Sravan Emany: Mike?

Mike Shetzline: Yes. So yes, for the apraglutide for the Phase 3, I mean, honestly, we’re clearly 110% focused on the March top line results and very much committed to that in delivering that. So, we all can understand where we are. And then, of course, we still have a launch opportunity for 2025, which we’re focused on. And then in between that, that will all fall in as we see the date in March.

Operator: Your next question comes from the line of Tim Chiang of Capital One. Your line is open.

Tim Chiang : Mike, I wanted to ask you a couple of questions just on like obviously, there’s not going to be any head-to-head data with apraglutide and type and Gattex. But just looking at the Gattex label, obviously, that drug was approved a long, long time ago. Their primary efficacy endpoint with is really a clinical response measurement. And I wanted to get your comments on it because obviously, let’s assume you have good data in March. But how would you sort of — I mean will you provide data on the secondary outcome measure of at least a 20% reduction of parental support volume from baseline at weeks 20 and 24. Just sort of as a relative comparator to Gattex.

Mike Shetzline: Yes. Thanks, Tim. So, you’re exactly right, and I kind of alluded this into my other comments, but the Gattex program had a responder definition. The responder definition required a 20% reduction in parental support volume to be a responder. And that actually translates quite well to the end point of the reduction in at least 1 day of per week. In fact, you may recall, I don’t know if you’re aware, but at the Gattex Advisory Committee, it all came down to that from the agency is one day a week meaningful? And does this sort of 20% relate to that, meaning a responder definition. And it was a key discussion point and clearly, the advisers agreed and it ultimately got NPS approval for Gattex and short bowel syndrome requiring parenterol support.

So, it’s for us, it translates into that one day off. To your point, we have a 20% reduction endpoint, but it’s not one of the key secondaries that’s statistically accounted for because it’s also in the regulatory discussions taken a second seat to the parenteral support volume reduction at 24 weeks as well as the one day off end why, and that’s how the discussions have gone with the agency. But they do very much correlate whether you take the relative change from baseline or percent change those volumes do translate pretty well. And if you look CapEx primary was a little nuance to is the percent change. They didn’t use the responder definition CapEx did. But if you look at the data, it actually translates pretty well across the two studies even 10 years apart, which I felt quite interesting given the nature of a short bowl syndrome with intestinal failure.

Tim Chiang: Okay. That’s helpful, Mike. And I guess, just the common ground between the data that we have with Gattex and Glepa is that they have obviously shown basically about a two point or 2-liter reduction per week in parenteral support needs, right? I mean and that’s sort of that’s like the absolute delta over placebo. So, I just wanted to make sure that sort of — I mean, if you can get that similar type of efficacy, that would be considered a win, Mike?

Mike Shetzline: Yes. Well, I think right now, I mean you’re getting to the granular volumes. But honestly, right now for us, the win is going to be the statistics around the primary endpoint. I mean because that’s how it’s going to play forward with the agency productive, and that’s what we’re committed to delivering. But we certainly will have all that data, Tim, as things roll forward, just like it happened with the Gattex and the Glepa programs. A lot of those more nuanced volume data’s do come out later because the primary top line data usually sticks to a statistically relevant endpoints from a first run perspective, and then we’ll have multiple scientific sessions, which we’ll continue to roll out data to inform us of the study outcomes.

Tim Chiang: I mean, is it possible that some of this more specific data might be able to be released at like an upcoming medical conference like DDW? Or do you think you won’t make the cutoff?

Mike Shetzline: Well, the abstract deadline for this DDW is for us last December. So that’s kind of a — there’s obviously the fast track point. But the point is for the top line, we really stick to the statistically relevant endpoints. So, they are going to — there’ll be a lot of data coming later.

Operator: As there are no further questions, I would like to thank our speakers for today’s presentation, and thank you all for joining us. This now concludes today’s conference. You may now disconnect.