Ironwood Pharma (NASDAQ:IRWD)

CAPS Rating: 3 out of 5

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Player Avatar zzlangerhans (99.73) Submitted: 11/23/2012 8:15:09 PM : Outperform Start Price: $10.82 IRWD Score: +11.95

After getting a buzzcut from Savient in 2010 I'm a little hesitant about buying into a drug launch, but I like linaclotide's chances enough to give Ironwood a green thumb as the share price sags post approval. Linaclotide has sailed past the FDA and CHMP fairly easily and will become available in the US next month. The billion dollar plus valuation of Ironwood comes from the expectation that linaclotide will fill the shoes of Zelnorm, which generated 560M in sales in 2006 before it was withdrawn in 2007 for possible cardiac side effects. Those are big shoes to fill, but linaclotide would justify Ironwood's valuation at even half that revenue.

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