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Aegis Affirms 'Buy' Rating on Ironwood (IRWD); Co. Serious About Enhancing Pipeline

March 18, 2014 11:37 AM EDT
Get Alerts IRWD Hot Sheet
Price: $8.51 --0%

Rating Summary:
    14 Buy, 11 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 9 | Down: 9 | New: 42
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Aegis Capital affirms its Buy rating and $16 price target on Ironwood Pharmaceuticals (Nasdaq: IRWD) following the company's announcement that IW-3718 Phase 2 has commenced.

Analyst Ram Selvaraju commented, In our view, the start of this study is a further sign that the company is serious about developing a clinical-stage pipeline to complement its sole marketed product, LINZESS® (linaclotide) for the treatment of constipatory gastrointestinal (GI) tract disorders.

Selvaraju noted, We would remind investors that Ironwood recently raised an additional $175mm in gross proceeds from an underwritten registered direct follow-on offering of common stock, which involved the sale of 13.725mm shares at a price per share of $12.75. The company's pro forma cash position is currently estimated at >$300mm. While the firm remains unlikely to reach profitability near-term, we believe it is currently getting minimal credit for its pipeline and that positive clinical data from one or more of these earlier-stage candidates could provide substantial catalysts to the stock price going forward. We note, however, that the firm's most significant competitor, Synergy Pharmaceuticals (Nasdaq: SGYP) is currently slated to report data from a Phase 2b study of its lead drug candidate plecanatide next month. If this data shows comparable efficacy and superior safety to linaclotide, Ironwood shares could come under pressure.

For an analyst ratings summary and ratings history on Ironwood Pharmaceuticals click here. For more ratings news on Ironwood Pharmaceuticals click here.

Ironwood Pharma closed at $12.89 yesterday.


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