Finesse with Linzess

Thanks to a relatively flat expense line in 2Q16, Ironwood Pharmaceuticals Inc. (NASDAQ:IRWD) almost doubled proceeds from its Linzess linaclotide deal with Allergan plc (NYSE:AGN). Going forward, the biotech expects to be able to deploy an expanding cash flow into its pipeline and to bring in additional products for its reps to sell.

Under a 2007 deal with Forest Laboratories Inc. (now part of Allergan), the companies equally split Linzess profits and expenses. "We wanted to make sure we would be in a situation not just taking a passive royalty in Linzess like you often see with biotech deals," said Tom Graney, Ironwood's CFO and SVP of finance and corporate strategy. "The team was confident Linzess was going to be an important, high-margin, highly profitable drug."...