Ironwood Pharmaceuticals Inc (IRWD) 2011 Q3 法說會逐字稿

Good day, everyone, and welcome to the Ironwood Pharmaceuticals Third Quarter 2011 Investor Update. Today's conference is being recorded. At this time I would like to turn the call over to Halley Gilbert. Please go ahead.

Good afternoon, and thank you for joining us for our investor update for the third quarter of fiscal year 2011. Joining me for today's call are Michael Higgins, our Chief Operating Officer and Chief Financial Officer, and Tom McCourt, our Chief Commercial Officer. We also have Peter Hecht, our Chief Executive Officer; Mark Currie, our Chief Scientific Officer, and Jim DeTore, our Vice President of Finance, available for the question-and-answer portion of the call.

By now you should have a copy of our press release which crossed the wire this afternoon. If you need a copy of the press release, you can go to our website at www.ironwoodpharma.com to find an electronic copy.

Some of the information discussed in today's call, particularly the information related to linaclotide, is based on information as of today, November 7, 2011, and contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those set forth in such statements. We do not undertake any obligation to update any forward-looking statements made during this call or contained in the accompanying slides as a result of new information, future events or otherwise.

For a discussion of these risks and uncertainties, you should review the forward-looking statement disclosure in our press release, as well as the risks under the heading Risk Factors in our annual report on Form 10-K for the year ended December 31, 2010, or Form 10-Q for quarter ended June 30, 2011, and any of our future SEC filings. I would now like to turn the call over to Michael Higgins.

Thanks, Halley, and welcome to all of you who are joining us for the discussion today. On the call I will provide updates on the MAA and NDA submissions, and presentations at recent medical meetings. In addition, as we have done in the past, we would like to utilize today's call to frame for you our view of the linaclotide launch and share lessons learned from other successful launches. Tom McCourt will lead this part of the discussion.

Before I turn the call over to Tom, let me briefly review some recent highlights. In September, our European partner, Almirall, submitted a Marketing Authorization Application to the EMA for linaclotide for the treatment of irritable bowel syndrome with constipation. In October, we received FDA notification that the NDA for linaclotide for CC and IBSC had been accepted for standard 10-month review. The PDUFA date is expected to occur in June of 2012. We are looking forward to working with the respective regulatory authorities over the coming months to address their questions during the review process.

In addition to these regulatory events, at the recent ACG and UEGW meetings, we, our partners and collaborators presented additional analysis of the effects of linaclotide on treating the abdominal and bowel symptoms in CC and IBSC from our Phase IIb and Phase III programs. This analysis further characterized the abdominal pain lowering and constipation symptom improving actions of linaclotide. Going forward we anticipate providing more in-depth analysis of the extensive CC and IBSC Phase III studies at the 2012 Digestive Disease Week meeting and in future publications.

Commercial preparations continue throughout the organization. The commercial and manufacturing operations teams here at Ironwood and at our commercial partners, Forest and Almirall, as well as at our supply chain partners, are all working together closely across a global network to ensure integration in our planning in preparation for the launch and commercialization of linaclotide.

While we remain highly focused on linaclotide, we continue to advance our pipeline, which includes product candidates and research efforts focused on gastrointestinal disease, pain and inflammation, respiratory disease, and cardiovascular disease. All of our product candidates to date including linaclotide have been internally discovered.

One final point before I turn it over to Tom. We ended the quarter with approximately $175 million in cash and equivalents. Our goal of year-end cash north of $150 million has not changed. I'll now turn the call over to Tom to discuss the commercial aspects of linaclotide.

Thanks, Michael. As mentioned earlier, we would like to continue sharing some of our insights on potential commercial opportunity in terms of how we view the patient, the customer and the market as Ironwood and our global commercial partners prepare to hopefully launch linaclotide.

Today we will briefly review some of the data presented in previous calls to make sure we are grounded on the market opportunities, and then we would like to share some additional observations from a number of primary care launch analogs and identify some relevant learnings that appear to be applicable to linaclotide.

IBSC and chronic constipation populations experience a continuum of symptoms. With all patients experiencing difficult and infrequent bowel movement with over 30 million patients suffering from additional bothersome abdominal symptoms including pain, discomfort, bloating and fullness.

In a large epidemiology study involving over 10,000 individuals, the patient landscape was comprehensively characterized in terms of prevalence, symptoms, healthcare-seeking behavior and treatment. These 30 million patients suffer from a variety of frequent abdominal and constipation symptoms, experiencing at least one symptom over 100 days annually. In fact, 70% of patients report suffering from some symptom every day, and the majority of these patients describe their symptoms as extremely to very bothersome, with pain as a primary reason patients seek care.

These patients take a variety of medication to manage both abdominal and constipation symptoms. These patients report using laxatives as rescue medication when the straining gets difficult, but avoid taking laxatives daily, as laxatives often exacerbate abdominal pain, bloating and cramping. Yet these patients still take laxatives 90 to 100 days per year.

So, it's not surprising that over 70% of IBSC and chronic constipation patients are not completely satisfied with treatment. With over 25% saying that they are not at all to very little satisfied, and approximately 50% reporting to be only somewhat satisfied. The primary complaint driving dissatisfaction are the minimal improvement or worsening of abdominal symptoms and a lack of predictability of treatment.

Physicians have a very similar view from an efficacy perspective. In our market research, both gastroenterologists and primary care physicians view current treatment options as ineffective or only somewhat effective in relieving abdominal symptoms.

This slide outlines the patient flow we just discussed and identifies the patients that we will be focusing on at launch. There are about 15 million patients suffering from both abdominal and constipation symptoms who are actively seeking care and treated with more than 10 million patients not satisfied and could benefit from an effective treatment.

Based on the results from the clinical program to date, the emerging profile for linaclotide looks very promising. Linaclotide is a first-in-class, local acting, minimally absorbed peptide that acts on both pain-sensing nerves and intestinal fluid to improve abdominal pain, bowel symptoms, and improves patient satisfaction.

In addition to abdominal pain, linaclotide improves a variety of abdominal symptoms including discomfort, bloating, cramping and fullness. All measured abdominal symptoms reduced within the first week and this effect continues to improve throughout the 26-week treatment period.

The randomized withdrawal further demonstrates the improvement in symptoms. In this case measuring the number of complete spontaneous bowel movements, or CSBMs reported weekly. Patients experienced an increase in CSBMs within the first days as plotted on the blue line, which is sustained throughout the 12-week treatment period.

After completing the 12-week assessment of the primary endpoint, patients on placebo, plotted on the yellow line, were randomized to receive linaclotide designated in the charts as switching from the yellow line to the blue dotted line. As you can see, the number of complete spontaneous bowel movements increased within the first week.

Patients taking linaclotide, plotted on the blue line, either were continued on linaclotide, as the blue line, or randomized in a blinded manner to placebo, as designated in the switch from the blue line to the yellow dotted line, and experienced a reemergence of constipation symptoms. This return of symptoms upon discontinuation of linaclotide was also observed in a number of abdominal symptoms. So, patients are likely to recognize the need and benefit for continued treatment.

Diarrhea was the most common adverse event reported by about 20% of patients. These data were from the 26-week IBSC trial and are representative of all four Phase III trials. 90% of patients experiencing diarrhea reported the episode as mild to moderate with 50% reporting their event within the first week of treatment. It is also important to note that 4% of the patients discontinued due to diarrhea and that no serious adverse events reported as diarrhea.

Overall, patient satisfaction is the key indicator of clinical performance and often reflects the real life discussion between patients and physicians as they assess treatment response. Over 50% of patients receiving linaclotide reported to be quite to very satisfied. This is comparable to the level of satisfaction reported in GERD patients who suffer from frequent heartburn taking a proton pump inhibitor.

Now, let's turn to the physicians. In an independent third-party research study, physicians were exposed to a blinded clinical profile similar to linaclotide, and they reported a high likelihood to prescribe if the drug was approved. According to the study, about 25% of gastroenterologists and PCP physicians would prescribe linaclotide immediately after launch, with another 50% to 60% of physicians expressing a willingness to prescribe linaclotide once they are comfortable with the post-marking safety profile.

In a separate quantitative market research study conducted by Ironwood, physicians were asked what percentage of IBSC and chronic constipation patients they would treat with an agent having a profile similar to linaclotide. These physicians reported that they would potentially prescribe linaclotide to 40% to 50% of IBSC and chronic constipation patients, and to 60% to 65% of patients who are not fully satisfied with prior treatment.

Now, we must recognize that these estimates are often overstated based on historical correlation between market research dated intent and actual physician behavior. But the intent to prescribe looks extremely encouraging for linaclotide.

This is our current launch timeline. The promotional campaign and educational materials will be submitted to the Office of Prescription Drug Products, also known as OPDP, and formerly known as DDMAC, shortly after approval. Ironwood in force will then train the sales force, followed by a scientific launch 60 to 90 days after approval, at which time the sales force will review the package insert and provide early experience kits to enable physicians to evaluate linaclotide with appropriate patients. We are planning a full commercial launch 30 to 60 days after the scientific launch once comments are received from the OPDP.

We also want to share some our work and current thinking about possible adoption and uptake analogs at launch. It is important to note that primary care and specialty product launches are very different. First, the population of patients for primary care products tend to be much larger and managed by far more physicians. So, the uptake is directly dependent on the number of physicians trying and adopting a new drug, thus requiring a broad educational and selling effort.

Second, there are generally far more components in the primary care treatment process to progress from a physician treatment decision to chronic management of a patient. As you all know, the treatment process in primary care is highly dependent on a patient's willingness and ability to fill a prescription, which can be hampered by either inconvenience or high co-pays. So, it is critical for patients to quickly recognize the benefit of taking a new medication and continue to benefit to adhere to therapy.

Now, this is in sharp contrast to a specialty drug marketing effort, where there are generally fewer physicians, fewer patients often getting their drug in the office, which is generally scheduled and actively monitored.

Finally, there is generally a higher cost associated with a specialty drug, thus sales uptake curves tend to be steep and plateau faster as opposed to primary care drugs, which ramp over time and may take four to six quarters to actually understand the sales performance.

We examined all the primary care launches since 2005, the graph plots total prescriptions by quarter and tracks up to five years. As you can see, there was great variability in uptake, but for the most part these drugs ramped over time with several exceeding $1 billion in sales. Prilosec and Zelnorm were launched prior to 2005, but we included Prilosec, in the bold black line, and Zelnorm, in the bold green line, because we believe they are relevant launch analogs which we will examine closer in a few minutes.

We then segmented the launches based on sales growth and identified three basic segments of drugs -- highly successful launches in green, defined by five-year or trending five-year sales greater than $1 billion; successful launches in yellow as greater than $500 million; and lower performing launches in red. The mean curve of each of the three segments was plotted as total prescription by quarter. Prilosec and Zelnorm were both added as references, again illustrating the uptake path of successful primary care launches in highly symptomatic gastrointestinal disorders.

It is also important to note that there have been relatively few highly innovative primary care launches over the past several years. They truly advance care and dramatically expand and build categories.

We then examined the higher performing brands to identify some common drivers of successful launches. To no one's surprise, we observed a number of common themes that were largely grounded in the existence of a significant unmet medical need in the level of product differentiation that could be easily recognized and soundly justified.

First, physicians clearly recognize the need for better treatment. The patients could be easily identified and physicians exhibited a greater urgency to switch once convinced the new drug provided an incremental improvement with a minimal hassle to their office staff and to patients.

Second, patients were generally actively involved in the treatment process. They were either highly symptomatic or very concerned with the health disorder. Patients taking the more successful drugs tended to quickly recognize a positive treatment experience leading to better adherence to therapy.

And third, payers demonstrated a stronger willingness to serve the unmet medical need of the patient based on the level of suffering or healthcare risk, and then provided these drugs with reasonable access and reimbursement.

We previously mentioned that proton pump inhibitors and GERD appear to be a reasonable analog as we chart linaclotide's launch. The prevalence of GERD is similar to IBS and chronic constipation. In addition, the frequency and bothersomeness of symptoms and the level of satisfaction with preexisting therapy were also quite comparable.

And, finally, Prilosec was the first-in-class innovation in a market that needed to be developed in terms of patient and physician awareness of the level of suffering, and most important, provided the opportunity to improve patients' lives. The key insight here is the simplicity of owning, relieving and preventing heartburn, which in the end drove the success of Prilosec. Prilosec was the market leader over 10 years experiencing steady growth, exceeding $30 billion in accumulated sales in the US alone.

Now, Prilosec and Zelnorm serve as reasonable but not perfect analogs for linaclotide in the GCCC category. As you can see, both Prilosec and Zelnorm experienced steady and comparable growth over the first 12 to 18 months. For Prilosec, this growth was driven by its ability to effectively relief heartburn, thus capturing patient share. And these patients tended to adhere to treatment which further accelerated the growth. And, of course, the entire market was fueled by new patients entering physicians' offices hoping for the relief of heartburn.

On the other hand, the growth of Prilosec was hampered by an initial safety concern including a boxed warning. A narrow indication, a limitation on the duration of treatment, a poor understanding of GERD, and early managed care restrictions.

Now, turning to Zelnorm, the initial growth was largely fueled by a highly visible outspoken patient population actively seeking care and asking for effectively relief of their symptoms. The growth of Zelnorm slowed at 18 months following a dear doctor letter communicating a safety risk. The growth was further hampered by a narrow indication initially limiting the use of Zelnorm to women only with IBS and constipation under the age of 65, and a limitation on the duration of treatment.

In addition, there was relatively low adherence likely caused by the marginal improvement in abdominal symptoms, yet Zelnorm was still on track to exceed $1 billion in sales in the US.

We believe linaclotide looks promising but will require significant marketing effort. First, physicians are currently expressing an urgency to improve care. It will be key for us to help identify appropriate patient and aid in the assessment of linaclotide's clinical benefits. We will be working closely with a very interested gastroenterology community and with our partner Forest, who possess a strong selling expertise and great access to the primary care audience.

Second, millions of patients are actively seeking care, looking for relief of their bothersome symptoms. There is an opportunity to educate patients to more accurately communicate their level of suffering, share their treatment history, and express their desire for effective therapy.

Third, our initial impression is that most payers recognize the unmet medical need of many suffering from IBSC and chronic constipation. We will need to provide a strong value proposition based on the sound medical evidence that is provided at a reasonable cost.

Finally, we do see an encouraging future for linaclotide with the existence of a large unmet medical need with millions of highly symptomatic patients actively seeking care and asking for help. We recognize the challenge and responsibility we face to create a new category with an innovative product which we will hope will build over time to help millions of patients. With that, I'd like to now open it up for questions.

(Operator Instructions) We will go first to Mario Corso of Caris & Company.

Hi. Yes, thanks for taking my questions. Good evening, everybody. I guess just on the market, hearing Tom talk, I wonder if you guys can talk a little bit about how your view of the market has changed over time? I mean, you have had the Phase III data for just about a year now, and I'm wondering if it has been -- it sounds to me like it's been a gradual change, maybe kind of nuanced from a focus on constipation to more in the pain and symptom side of the market. And I'm wondering secondarily there, how important a role do you think the label will play there? Do you need explicit label claims on treating pain, for example, or is just having the data in the label, in the clinical trial section, is that sufficient? Thanks very much.

Mario, this is Tom. Great question. So, I heard two questions, really. One is how we look at the market, and I think we do recognize that both abdominal symptoms and constipation are important to patients. But the key differentiator that we have seen so far with linaclotide is the consistent way in which it improved not only abdominal pain but a number of abdominal symptoms, which we know is the primary reason why patients seek care.

So, I think our thinking has evolved slightly, but I think we will continue to focus on how do we differentiate our brand, which is largely around abdominal pain.

As far as the question on the label, and I think our current view here is the reason why we designed the trial the way we did was we knew we needed to be able to communicate the benefit specifically around pain. And therefore the fact that we hit the composite endpoint, those data we feel fairly certain -- of course, we can never speak on behalf of the FDA or for the FDA, but we think it is highly likely that we are going to be able to get the pain data in the label. And certainly having that label, which is really the blueprint by which we will follow as we promote the drug will be critically important.

And we will go next to Keah Nakae of Chardan.

Yes, thank you. Tom, as you continue to get ready for the launch, I guess may two things. One, your data has been out there a while; what is your research telling you about what the level of awareness of linaclotide is amongst GPs?

Yes, it's a great question, thank you. With PCPs, obviously we haven't had a whole lot of visibility. I mean, really, we have had the initial publication, the New England Journal of Medicine, which was super for us. But we haven't had a lot of press getting that message out to primary care. But certainly when we show primary care physicians the profile of the drug, as we have seen before, they react in a very, very positive manner.

I think we have been surprised how quickly the GEs have picked up the noise. We just got back from ACG, and at the ACG, at the American College of Gastroenterology meeting, linaclotide was probably mentioned in almost every clinical update in the functional GI arena with regard to the scientific sessions as well as the post-graduate course. So, clearly the GI community is quickly picking this up and getting the information out in front of the GI community. We certainly look forward to the day when we can share it with primary care physicians.

And the second part of that, Tom, is over the next seven, eight months, what are some of the key things you are going to be focusing on in order to prepare beyond what you shared with us today?

Yes, I think the primary focus is certainly going to be preparing the sales force. I mean, they are clearly the most important asset we have to get the information and help physicians identify appropriate patients and effectively use the product. Certainly, we will have a number of the scientific data, a number of publications around the scientific data coming out as appropriate in peer reviewed journals.

But I think as far as our preparation, the commercial preparation for launch, we have a couple of big opportunities coming up. One is certainly Digestive Disease Week, which the medical team, the medical affairs team I know is working rigorously to make sure that we have all the key scientific data available and exposed to the GI community. Then as we prepare, the commercial team prepares for launch, we will be focusing largely on what is our core message that really resonates with docs and patients, preparing the sales force, and certainly preparing all communication channels to docs, patients and payers as we can. Does that answer your question?

Yes, just to follow-up on that. As you think about bringing on the folks once you have the approval, how much -- and I know you've identified who you might want to bring on -- how much communication are you having with them before you actually bring them onboard?

so, I don't think we've been too specific about that. I think we will have a sales force in place shortly after approval, but obviously we need to do all the ground work. We will certainly bring on the managers, we'll be interviewing all the candidates. We will have all the potential candidates prepared to -- we'll be providing offers just shortly after approval. But I think the activity really, for the managers, will be identifying the very best talent in the marketplace. And, as you know, there is a lot of great talent out there right now that are desperately looking for jobs, although the very best of the best are still working for other companies and we want to make sure that we go find the best talent we can and have them ready to effectively educate the medical community.

Okay. One other follow-up point is, as you know, we have the relationship with Forest, and that team will be focused on the primary care, but they will be ready to go. They are in place now, so a lot of the preparation companies typically have to be ready for, we have, because of the partnership, we will be ready to go right off the mark. So, in combination with the team that Tom's building will have access to a great team out of Forest as well.

That's a great point, Michael, and I apologize for missing that. But I think the other piece, we spent a lot of time looking at the offices that their primary care sales force is currently calling on, and there is an enormous overlap in the target physicians that the Forest team is currently calling on and those people that we want to be able to deliver our message to.

Okay, thanks, guys.

We will go next to Geoff Meacham of JPMorgan.

Hi. This is [Anu Pomerom] in for Geoff Meacham. You briefly mentioned this in your slides, but I'm just wondering what the feedback from payers have been so far and how you are thinking about your pricing strategy and, in particular, how payers view the pain benefit of linaclotide. Thanks.

Yes. I mean, this is something we are obviously being very careful about because we're doing market research in a blinded fashion, and certainly there have been other decision resources and other groups that have gone out and actually talked to payers.

I think the walk-aways that we are getting is, one, they know there is a problem with this population. They know these people are suffering, they know what they have and what they have available to provide to their patients is inadequate.

When we have provided the blinded profile, they responded very favorably to the overall profile, both with regard to efficacy and safety and tolerability. But the real differentiator here consistently is of the data around abdominal pain and bloating.

So, I think we feel pretty good so far. With regard to what their view of what is the unmet medical need, the clinical profile of the drug, and, of course, now what we'll be doing over the next several months will be figuring out what is the right price point to come into the market with.

Great. Thanks for taking our question.

We'll go next to Ram Selvajaru of Morgan Joseph.

Thanks very much for taking my question. Can you hear me?

Yes.

Just one quick point of clarification. The guidance of the year-end cash of approximately around $150 million, does that include the milestone that you expect upon acceptance of the linaclotide NDA filing?

Yes, it does.

Okay. And then just the other question was, with respect to the sales force that you expect to be using the target gastroenterologists, do you foresee any significant segmentation of that physician population, and if so, can you give us any color on what that segmentation might look like?

I just want to make sure I'm clear on the question. So, as far as specifically the gastroenterology community? Yes. So, as you know, there are really kind of two basic groups of gastroenterologists. One that tend to be therapeutic endoscopists, and those that tend to broadly manage patients, which who can be pretty easily identified by their prescribing behavior. Those that would be managing a lot of IBS patients are the same docs that are managing a lot of GERD patients and a lot of inflammatory bowel, but mainly GERD patients.

So, we think we can identify those people, yet at this point that number is somewhere between 6,000 and 7,000 of the 14,000 or 15,000 gastroenterologists that are out there. And, of course, obviously the Ironwood sales force will also be calling on a number of top decile PCPs as well in collaboration with their Forest counterparts.

Okay. And then just one final question. With respect to Forest, have you and Forest had any discussions on what a DTC campaign for this drug might look like, if at all?

I think we have had a lot of discussions around this. I think what we got alignment on is we both agree that an informed patient is extremely important and can really affect what the launch uptake is. What we're trying to get a line on now, we are working together to get a line on is really what does that communication vehicle look like and at what point in time do we amplify that message?

So, I think that's going to be an ongoing collaboration with Forest to make sure we are making really the right commercial decision.

And, of course, they are actively considering what the impact of the use of digital media and social networking might be in that process, correct?

Absolutely.

Thank you very much.

We will go next to Catherine Arnold with Credit Suisse.

Thanks very much for taking my question. Tom, I wanted to thank you for taking the time to go through some of your launch benchmarks, because I do think that in this era it is extraordinarily important to understand how you are thinking about not just appropriate product benchmarks, but also I think all the considerations that occur in this market versus maybe easier days in the pharmaceutical industry. So, thank you for that.

And with that, I guess I wanted to kind of get some color from you as to how you do think about some of the launches. Like, even if we were in the exact same world we were in when Prilosec launched or Zelnorm launched, you pointed out why there are not appropriate benchmarks. I guess how different are you thinking about the launch curve relative to where we are today versus the good old days, if you will, because you lived in those good old days, too.

And then on the payer front, I am wondering if you could just give a little bit of color on when you think there will be some important milestones that will give you visibility? We often hear from companies on calls after products launch what their projections are for acceptance on a payer basis one year out, etc. And I'm wondering if you sort of are thinking about next year in mileposts on the payer side and when you might have a better sense for how that process is going to work out?

Sure. Let me take a shot at it. So, as far as the uptake curves, I think you're spot on, Catherine, on this. We still think that Zelnorm and Prilosec are reasonable analogs with regard to trying to predict what that uptake curve looks like. It may shift up or shift down a little bit, but as far as the shape of the uptake curve, I think it's probably pretty applicable to what we are likely to see as we go into the market.

The drivers and barriers are a little different for us, and I think we know that the payer is far more effective in managing uptake. So, I think that's the piece of the other part of the equation is so how will the payer embrace this? And obviously that's going to come down to the pricing strategy and the contracting strategy we bring forward.

And I think what we've seen certainly as we examine through all the recent launch analogs, particularly the successful launch analogs, it generally took at least six months to really see the payer making definitive decisions with regard to long-term access and reimbursement of the brand. However, in the near term, they generally provided pretty reasonable access, and that probably will an inflection point one way or the other as we get out 6 to 12 months. And what that will look like we're studying right now and trying to figure out what is the best way to approach the payer.

And do you think that the approach to the payer has been hurt from the standpoint of the OPDP review period, which is obviously much more protracted than it used to be?

Yes. I mean, the answer, I think you know the answer to the question, which is yes. Because it delays the materials you have available to really go in and talk to the payer. Now, the exception to that would be a value dossier that is certainly, if it's important to inform a decision, that would certainly be accessible through medical affairs, if it's appropriate. But I think the important piece here is what do we have to inform the payer of a good decision?

I think what we are hearing so far is they recognize there is a problem, and just based on the basic profile of the drug, they are responding pretty positively to it. And then the third piece is, as I mentioned, coming up with where we enter the market from a pricing contracting perspective. I think so far it looks very encouraging.

May I ask one other quick question, which is on the safety analysis. Could you update us on your thoughts on whether you'll share that information with us and when?

I'll let Mark take that.

Yes, Catherine, this is Mark. Those trials are still ongoing. At this point we haven't concluded yet whether we'll be offering further disclosure on those trials. But certainly things continue to move along quite well and we are quite satisfied, and ultimately we will sit with our partner and work with what we need to disclose there.

And, Catherine, if we feel there is something material, we certainly feel there is an obligation to disclose very quickly on that. So, I think essentially we're telling you that things continue to move forward and if there is material information that we feel is appropriate, we will be sharing that quickly. And we will continue to do that throughout. I think in terms of saying anything more on it, there certainly will be in the future some level of publication and the teams will determine what is the most appropriate way to talk about that. But short of that, we don't expect to make a big announcement at different points along the way.

Thank you.

(Operator Instructions) We will go next to David Friedman of Morgan Stanley Smith Barney.

Hi, it's Sara calling for Dave. I just had a quick question around the R&D this quarter. You had a bit of an uptick this quarter versus your kind of run rate of prior quarters with no new trials ongoing. So, I'm just wondering if you can explain what's in that number this quarter and if there are some prelaunch linaclotide costs that are now going to be incorporated into R&D going forward?

Yes, so let me just comment quickly and, Jim, maybe you want to provide more detail. As you know, Sara, we haven't provided a significant amount of detail in those line items, but you'll note and you did the way you asked the question, there are other things that go in beyond just the research numbers. So, there is a variety of factors that go in and I'll let Jim comment on that. But we continue to invest in the pipeline as we discussed in the past. We think it is critically important for our long-term success of the Company, and we have continued and will continue to do that.

We haven't provided significant detail on the specifics of the pipeline primarily because of competitive reasons. We want to make sure that we -- most of these areas are highly competitive and our view is that we want to make sure that we have -- are basically at the point of proof of concept before we talk in detail. But you can certainly expect that we'll be talking about these programs in more detail as we roll forward. But with that, let me let Jim comment a little bit on some of the other elements that impact that number that you're asking about.

Well, maybe just one other elements, Sara. I would say the investment in our redundancy in our supply chain for API, specifically, that rolls through our P&L as research and development expense.

Okay, great. Thank you.

And as there are no further questions at this time, I'll turn the call back to Michael Higgins for closing remarks.

Great. Well, thank you all for your time and for your continued interest in Ironwood. We look forward to keeping you up-to-date as we progress towards launch. Thanks. Take care.

And this does conclude today's conference call. We thank you for your participation and have a wonderful day.