Ironwood downgraded to Hold from Buy at Craig-Hallum

Craig-Hallum downgraded Ironwood (IRWD) to Hold from Buy with a price target of $1, down from $7, as the risk-reward has changed following the company’s update that the FDA will require a second Phase 3 trial for apraglutide, delaying potential approval to ~2029. The requirement in part stems from lower-than-expected drug exposure in the STARS study due to dose preparation issues, a newly disclosed issue. Timing of material apraglutide revenues will now likely not line-up with Linzess LOE, presenting challenges, the firm says. The extra trial will require funding, limit EBITDA growth, reduce potential debt paydown before Linzess LOE, and this plus the apraglutide delay makes refinancing the June 2026 convertible notes more complicated, argues Craig-Hallum. While strategic alternatives are being explored, uncertainty is much higher now, it adds.