Why Ironwood Pharma Is Poised to Pull Back

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, drug developer Ironwood Pharmaceuticals has received an alarming one-star ranking.

With that in mind, let's take a closer look at Ironwood and see what CAPS investors are saying about the stock right now.

Ironwoodfacts

Headquarters (founded)

Cambridge, Mass. (1998)

Market Cap

$1.6 billion

Industry

Biotechnology

Trailing-12-Month Revenue

$150.2 million

Management

Co-Founder/CEO Peter Hecht
COO/CFO Michael Higgins

Return on Equity (average, past 3 years)

(58.7%)

Cash/Debt

$168.2 million / $569,000

Competitors

Shire
Sucampo Pharmaceuticals
Takedo Pharmaceutical


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 27% of the 45 members who have rated Ironwood believe the stock will underperform the S&P 500 going forward.

Earlier today, one of those Fools, All-Star zzlangerhans, succinctly summed up the Ironwood bear case for our community:

Ironwood will likely continue to be a cyclical stock for the next few quarters as Linzess revenue optimism faces off against the anxiety engendered by large quarterly losses. Meanwhile, the company has initiated a phase II trial of GC-C agonist IW-9179 for functional dyspepsia, a condition which they claim affects a large proportion of Americans. Functional dyspepsia, however, is not a condition that is well-defined in the medical community. One might call it indigestion, and it is unclear how many people out there are actually requiring a chronic medication for this condition above and beyond antacids. For Ironwood to present it as a major source of morbidity in the US seems disingenuous.

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The article Why Ironwood Pharma Is Poised to Pull Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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