Citizens JMP downgrades Ironwood on delayed apraglutide launch

Citizens JMP downgraded Ironwood (IRWD) to Market Perform from Outperform without a price target The stock in midday trading is down 31% to 66c. The company disclosed the FDA is requiring a confirmatory Phase 3 trial be conducted for apraglutide, likely delaying the launch by several years, the analyst tells investors in a research note. While the firm has high confidence in the success of an additional trial and sees opportunities to further differentiate apraglutide as the best-in-class GLP-2 analog, it downgraded the shares on the regulatory delay. In addition to the regulatory delay, the need for an additional Phase 3 trial increases Ironwood’s balance sheet pressure and increases the risk of defaulting on outstanding debt obligations, contends Citizens JMP.