Ironwood Pharma (NASDAQ:IRWD)

CAPS Rating: 2 out of 5

Recs

1
Player Avatar zzlangerhans (99.78) Submitted: 9/22/2011 2:53:35 PM : Outperform Start Price: $11.03 IRWD Score: +8.13

Ironwood carries a high market cap given that they only have one significant pipeline asset, the IBS drug linaclotide which has not yet been approved by any country. However, the market seems to have demonstrated conclusively that it is willing to spot the company a valuation of over a billion dollars for linaclotide, which has been submitted to the FDA and will likely be submitted to the EMA before the end of 2011. Given the lack of surprises since positive results were announced for the last linaclotide phase III trials in late 2010, the stock has been unusually volatile. The share price took a big hit in the broad market decline last month but did not participate in the recovery. Today the stock dropped back below the 11 threshold and I will be very surprised if it has not recovered by the time the FDA accepts the linaclotide NDA in October.

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