NPRC

LINZESS® (Iinaclotide) 2023 U.S. net sales of $1.1 billion, an increase of 7% year-over-year, driven by EUTRx prescription demand growth of 10% year-over-year 2023 Ironwood revenue of $443 million, driven primarily by $430 million in U.S. LINZESS collaboration revenue Continues to expect topline results from the STARS Phase III study of apraglutide in patients with short bowel syndrome with intestinal failure (SBS-IF) in March of 2024 BOSTON--(BUSINESS WIRE)-- Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD), a GI-focused healthcare company, today reported its fourth quarter and full year 2023 results and recent business performance. “In 2023, we made important progress toward realizing our vision to become the leading GI healthcare company in the industry,” said Tom McCourt, chief executive officer of Ironwood. “In its 11th year on market, LINZESS had another terrific year as the leading prescription treatment for adults with IBS-C or chronic idiopathic constipation, with prescription demand increasing a robust 10% year-over-year. In June of 2023, LINZESS received FDA approval for functional constipation in pediatric patients ages 6 to 17, becoming the first and only prescription therapy for this patient population. In addition, we strengthened our GI pipeline with the addition of apraglutide. We believe apraglutide has the potential to improve the standard of care for patients with short bowel syndrome dependent on parenteral support, if approved, as the only once-weekly GLP-2 therapy, and achieve $1 billion dollars in peak net sales. Looking ahead in 2024, we remain focused on maximizing LINZESS, advancing our GI pipeline and delivering sustained profits and cash flows. We are excited about the continued strong LINZESS performance and the key pipeline catalysts ahead of us, highlighted by the topline data from our STARS Phase 3 study expected in March and topline data from the ongoing Phase 2 study for CNP-104 expected in the third quarter, which we believe can propel Ironwood’s next phase of growth and create value for patients and shareholders in the years to come.” Fourth Quarter and Full Year 2023 Financial Highlights1 (in thousands, except for per share amounts) Q4 2023 Q4 2022 FY 2023 FY 2022 Total revenues $117,553 $107,199 $442,735 $410,596 Total operating expenses2 79,964 38,836 1,388,165 160,259 GAAP net income (loss)2 (1,745) 48,867 (1,031,559) 175,065 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc.2 (1,087) - (1,002,239) - GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share – basic (0.01) 0.32 (6.45) 1.13 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share – diluted (0.01) 0.27 (6.45) 0.96 Adjusted EBITDA2 39,895 68,703 (884,820) 251,755 Non-GAAP net income (loss)2 39 48,885 (973,788) 174,883 Non-GAAP net income (loss) per share – basic (0.00) 0.32 (6.27) 1.13 Non-GAAP net income (loss) per share – diluted (0.00) 0.27 (6.27) 0.96 1. Refer to the Reconciliation of GAAP Results to Non-GAAP Financial Measures table and to the Reconciliation of GAAP Net Income to Adjusted EBITDA table at the end of this press release. Refer to Non-GAAP Financial Measures for additional information. 2. Figures presented for FY 2023 include a one‐time charge of approximately $1.1 billion related to acquired in‐process research and development from the acquisition of VectivBio in the second quarter of 2023. Fourth Quarter and Full Year 2023 Corporate Highlights U.S. LINZESS Prescription Demand: Total LINZESS prescription demand in the fourth quarter of 2023 was 50 million LINZESS capsules, a 10% increase compared to the fourth quarter of 2022, per IQVIA. Total prescription demand was 191 million LINZESS capsules for the full year 2023, a 10% increase compared to the full year 2022, per IQVIA. U.S. Brand Collaboration: LINZESS U.S. net sales are provided to Ironwood by its U.S. partner, AbbVie Inc. (“AbbVie”). LINZESS U.S. net sales were $274.4 million in the fourth quarter of 2023, a 5% increase compared to $260.3 million in the fourth quarter of 2022, and $1,073.2 million for the full year 2023, a 7% increase compared to $1,002.1 million for the full year 2022. Ironwood and AbbVie share equally in U.S. brand collaboration profits. See the LINZESS U.S. Commercial Collaboration table at the end of the press release. – LINZESS commercial margin was 77% in the fourth quarter of 2023, compared to 74% in the fourth quarter of 2022. LINZESS commercial margin was 73% for the full year in each of 2023 and 2022. See the U.S. LINZESS Full Brand Collaboration table below and at the end of this press release. – Net profit for the LINZESS U.S. brand collaboration, net of commercial and research and development (“R&D”) expenses, was $202.5 million in the fourth quarter of 2023, compared to $183.8 million in the fourth quarter of 2022. Net profit for the LINZESS U.S. brand collaboration, net of commercial and R&D expenses, was $749.9 million for the full year 2023, compared to $695.7 million for the full year 2022. See U.S. LINZESS Full Brand Collaboration table below and at the end of this press release. Collaboration Revenue to Ironwood: Ironwood recorded $114.0 million in collaboration revenue in the fourth quarter of 2023 related to sales of LINZESS in the U.S., a 9% increase compared to $104.8 million for the fourth quarter of 2022. Ironwood recorded $430.5 million in collaboration revenue for the full year 2023, an 8% increase compared to $398.8 million in 2022. See U.S. LINZESS Commercial Collaboration table at the end of the press release. U.S. LINZESS Full Brand Collaboration (in thousands, except for percentages) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 LINZESS U.S. net sales as reported by AbbVie 274,356 $260,327 1,073,210 $1,002,143 AbbVie & Ironwood commercial costs, expenses and other discounts 62,903 66,879 286,045 272,757 Commercial margin 77% 74% 73% 73% AbbVie & Ironwood R&D Expenses 8,980 9,684 37,250 33,684 Total net profit on sales of LINZESS 202,473 183,764 749,915 695,702 Full brand margin 74% 71% 70% 69% In January 2024, Ironwood announced publication in The Lancet Gastroenterology & Hepatology of new linaclotide Phase III data in children and adolescents aged 6-17 years with functional constipation. The data highlighted additional efficacy endpoints from the company’s pivotal Phase III trial, which formed the basis of the June 2023 U.S. Food and Drug Administration (FDA) approval of linaclotide for the treatment of functional constipation in this population. Additional details can be found here. In October 2023, Ironwood presented new data at the 2023 North American Society for Pediatric Gastroenterology, Hepatology & Nutrition (NASPGHAN) Annual Meeting reinforcing the impact of linaclotide on functional constipation in children and adolescents ages 6-17 years-old. The data demonstrated that linaclotide reduces the need for rescue medications in this patient population and further characterized the efficacy and safety pro linaclotide as the only FDA-approved prescription therapy for this population. Additional details can be found here. Pipeline Updates Apraglutide Ironwood is advancing apraglutide, a next-generation, synthetic glucagon-like peptide-2 (“GLP-2”) analog for short bowel syndrome with intestinal failure (“SBS-IF”), a severe malabsorptive condition. Ironwood believes apraglutide has the potential to be the new standard of care for the treatment of short bowel syndrome dependent on parenteral support, also known as short bowel syndrome with intestinal failure, based on its potency and pharmacologic properties. Ironwood is conducting a Phase III clinical trial, STARS, designed to evaluate clinical benefit for both SBS-IF stoma and colon-in-continuity (“CIC”) patients with the unique convenience of weekly dosing. Topline results are expected in March of 2024. In October 2023, Ironwood presented positive final data from the company’s Phase II STARS Nutrition program during United European Gastroenterology (UEG) Week. This multicenter, open-label study of nine patients was designed to evaluate the safety, pharmacokinetics, and efficacy of apraglutide on intestinal absorption in adult patients who have SBS-IF and CIC. Additional details can be found here. Ironwood is also conducting an exploratory Phase II clinical trial, STARGAZE, to evaluate apraglutide in patients with steroid-refractory acute Graft versus Host Disease (aGvHD), a life-threatening condition that occurs when immune cells from the donor attack a recipient’s healthy cells after an allogeneic hematopoietic stem cell transplant. Enrollment is completed and data is expected for the STARGAZE Phase II clinical trial in the first quarter of 2024. CNP-104 Ironwood has a collaboration and license option agreement with COUR Pharmaceuticals Development Company, Inc. (“COUR”). This agreement grants Ironwood an option to acquire an exclusive license to research, develop, manufacture and commercialize, in the U.S., products containing CNP-104 (“CNP-104”), a tolerizing immune modifying nanoparticle, for the treatment of primary biliary cholangitis (“PBC”), a rare autoimmune disease targeting the liver. If successful, CNP-104 has the potential to be the first approved disease modifying therapy for PBC. COUR is currently conducting a clinical study with CNP-104 evaluating the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients, with topline data expected in the third quarter of 2024. IW-3300 Ironwood is currently advancing IW-3300, a guanylate cyclase-C agonist being developed for the potential treatment of visceral pain conditions, such as interstitial cystitis / bladder pain syndrome (“IC/BPS”) and endometriosis. Ironwood is continuing the Phase II proof of concept study in IC/BPS. Fourth Quarter and Full Year 2023 Financial Results Total Revenues. Total revenues in the fourth quarter of 2023 were $117.6 million, compared to $107.2 million in the fourth quarter of 2022. Total revenues for the full year 2023 were $442.7 million, compared to $410.6 million for the full year 2022. Total revenues in the fourth quarter of 2023 consisted of $114.0 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S. and $3.6 million in royalties and other revenue. Total revenues in the fourth quarter of 2022 consisted of $104.8 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S. and $2.4 million in royalties and other revenue. Total revenues for the full year 2023 consisted of $430.5 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S., and $12.2 million in royalties and other revenue. Total revenues for the full year 2022 consisted of $398.8 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S., and $11.8 million in royalties and other revenue. Operating Expenses. Operating expenses in the fourth quarter of 2023 were $80.0 million, compared to $38.8 million in the fourth quarter of 2022. Operating expenses for the full year 2023 were $1,388.2 million, compared to $160.3 million for the full year 2022. Operating expenses in the fourth quarter of 2023 consisted of $38.7 million in selling, general and administrative (“SG&A”) expenses, $35.7 million in R&D expenses, $5.0 million in acquired in‐process research and development as well as $0.6 million in restructuring expenses. Operating expenses in the fourth quarter of 2022 consisted of $28.4 million in SG&A expenses and $10.4 million in R&D expenses. Operating expenses for the full year 2023 consisted primarily of approximately $1.1 billion in acquired in‐process research and development relating to the acquisition of VectivBio, $158.3 million in SG&A expenses, $116.1 million in R&D expenses and $18.3 million in restructuring expenses. Operating expenses for the full year 2022 consisted primarily of $116.0 million in SG&A expenses, and $44.3 million in R&D expenses. Interest Expense and Other Financing Costs. Interest expense was $8.4 million in the fourth quarter of 2023 and $21.6 million for the full year 2023, in connection with Ironwood’s convertible senior notes and revolving credit facility. Interest expense recorded in the fourth quarter of 2023 included $7.6 million in cash expense and $0.6 million in non-cash expense. Interest expense recorded for the full year 2023 included $19.3 million in cash expense and $2.1 million in non-cash expense. Interest expense was $1.5 million in the fourth quarter of 2022 and $7.6 million for the full year 2022, in connection with Ironwood’s convertible senior notes. Interest expense recorded in the fourth quarter of 2022 included $1.1 million in cash expense and $0.4 million in non-cash expense. Interest expense recorded for the full year 2022 included $5.7 million in cash expense and $1.9 million in non-cash expense. Interest and Investment Income. Interest and investment income was $1.2 million in the fourth quarter of 2023 and $19.0 million for the full year 2023. Interest and investment income was $5.4 million in the fourth quarter of 2022 and $9.5 million for the full year 2022. Gain (Loss) on Derivatives. Ironwood recorded a loss on derivatives of an insignificant amount in the fourth quarter of 2022, as a result of the change in fair value of its note hedge warrants. For the full year 2022, Ironwood recorded a gain on derivatives of $0.2 million. Ironwood’s note hedge warrants terminated unexercised upon expiration in April 2023. Income Tax Expense. Ironwood recorded $32.1 million of income tax expense in the fourth quarter of 2023, and $83.5 million of income tax expense for the full year of 2023, the majority of which was non-cash, as Ironwood continues to utilize net operating losses to offset taxable income for federal purposes and in many states. Ironwood recorded $23.4 million of income tax expense in the fourth quarter of 2022 and $77.4 million of income tax expense for the full year of 2022, the majority of which was non-cash, as Ironwood continued to utilize net operating losses to offset taxable income for federal purposes and in many states. GAAP Net Income (Loss) Attributable to Ironwood. GAAP net loss was $1.1 million, or ($0.01) per share (basic and diluted), in the fourth quarter of 2023 compared to GAAP net income of $48.9 million, or $0.32 per share (basic) and $0.27 per share (diluted), in the fourth quarter of 2022. GAAP net loss for the full year 2023 was $1.0 billion, or ($6.45) per share (basic and diluted), compared to GAAP net income of $175.1 million, or $1.13 per share (basic) and $0.96 per share (diluted), for the full year 2022. Non-GAAP Net Income (Loss). Non-GAAP net income was an insignificant amount, or ($0.00) per share (basic and diluted), in the fourth quarter of 2023, compared to non-GAAP net income of $48.9 million, or $0.32 per share (basic) and $0.27 per share (diluted), in the fourth quarter of 2022. Non-GAAP net loss for the full year 2023 was $973.8 million, or ($6.27) per share (basic and diluted), compared to non-GAAP net income of $174.9 million, or $1.13 per share (basic) and $0.96 per share (diluted), for the full year 2022. Non-GAAP net income excludes the impact of mark-to-market adjustments on the derivatives related to Ironwood’s 2022 Convertible Notes, amortization of acquired intangible assets, restructuring expenses and acquisition-related costs, all net of tax effect. See Non-GAAP Financial Measures below. Adjusted EBITDA. Adjusted EBITDA was $39.9 million in the fourth quarter of 2023, compared to $68.7 million in the fourth quarter of 2022. For the full year 2023, adjusted EBITDA was ($884.8) million, compared to $251.8 million for the full year 2022. Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization, and acquisition-related costs, from GAAP net income. See Non-GAAP Financial Measures below. Cash Flow Highlights. Ironwood ended 2023 with $92.2 million of cash and cash equivalents, compared to $656.2 million of cash and cash equivalents at the end of 2022. In the fourth quarter of 2023 and in the full year of 2023, Ironwood repaid $25.0 million and $100.0 million, respectively, of the outstanding principal balance on its revolving credit facility used to partially finance the VectivBio acquisition. The outstanding principal balance on the revolving credit facility was $300.0 million as of December 31, 2023. Ironwood generated $35.8 million in cash from operations in the fourth quarter of 2023, compared to $79.2 million in cash from operations in the fourth quarter of 2022. Ironwood generated $183.4 million in cash from operations for the full year 2023, compared to $273.8 million for the full year 2022. Ironwood 2024 Financial Guidance. In 2024, Ironwood continues to expect: 2024 Guidance U.S. LINZESS Net Sales Growth Low-single digits % Total Revenue $435 to $455 million Adjusted EBITDA1 >$150 million Excludes potential CNP-104 option exercise 1 Adjusted EBITDA is calculated by subtracting restructuring expenses, net interest expense, income taxes, depreciation and amortization, and acquisition-related costs from GAAP net income. For purposes of the 2024 guidance, Ironwood has assumed it will not incur material expenses related to business development activities in 2024 and excludes any costs associated with potential CNP-104 option exercise. Ironwood does not provide guidance on GAAP net income or a reconciliation of expected adjusted EBITDA to expected GAAP net income because, without unreasonable efforts, it is unable to predict with reasonable certainty the non-GAAP adjustments used to calculate adjusted EBITDA. These adjustments are uncertain, depend on various factors and could have a material impact on GAAP net income for the guidance period. Management believes this non-GAAP information is useful for investors, taken in conjunction with Ironwood’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Ironwood’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. Non-GAAP Financial Measures Ironwood presents non-GAAP net income and non-GAAP net income per share to exclude the impact, net of tax effects, of net gains and losses on derivatives related to Ironwood’s 2022 Convertible Notes that are required to be marked-to-market, amortization of acquired intangible assets, restructuring expenses, and acquisition-related costs. Non-GAAP adjustments are further detailed below: The gains and losses on the derivatives related to Ironwood’s 2022 Convertible Notes were highly variable, difficult to predict and of a size that could have a substantial impact on the company’s reported results of operations in any given period. Amortization of acquired intangible assets are non-cash expenses arising in connection with the acquisition of VectivBio and are considered to be non-recurring. Restructuring expenses are considered to be a non-recurring event as they are associated with distinct operational decisions. Included in restructuring expenses are costs associated with exit and disposal activities. Acquisition-related costs in connection with the acquisition of VectivBio are considered to be non-recurring and include direct and incremental costs associated with the acquisition and integration of VectivBio to the extent such costs were not classified as capitalizable transaction costs attributed to the cost of net assets acquired through acquisition accounting. Ironwood also presents adjusted EBITDA, a non-GAAP measure, as well as guidance on adjusted EBITDA. Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization, and acquisition-related costs from GAAP net income. The adjustments are made on a similar basis as described above related to non-GAAP net income, as applicable. Management believes this non-GAAP information is useful for investors, taken in conjunction with Ironwood’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Ironwood’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of non-GAAP net income and non-GAAP net income per share to GAAP net income and GAAP net income per share, respectively, and for a reconciliation of adjusted EBITDA to GAAP net income, please refer to the tables at the end of this press release. Ironwood does not provide guidance on GAAP net income or a reconciliation of expected adjusted EBITDA to expected GAAP net income because, without unreasonable efforts, it is unable to predict with reasonable certainty the non-GAAP adjustments used to calculate adjusted EBITDA. These adjustments are uncertain, depend on various factors and could have a material impact on GAAP net income for the guidance period. Conference Call Information Ironwood will host a conference call and webcast at 8:30 a.m. Eastern Time on Thursday, February 15, 2024 to discuss its fourth quarter and full year 2023 results and recent business activities. Individuals interested in participating in the call should dial +1 (888) 596-4144 (U.S. and Canada) or (647) 495-7514 (international) using conference ID number and event passcode 1057375. To access the webcast, please visit the Investors section of Ironwood’s website at at least 15 minutes prior to the start of the call to ensure adequate time for any software downloads that may be required. The call will be available for replay via telephone starting at approximately 11:30 a.m. Eastern Time on February 15, 2024, running through 11:59 p.m. Eastern Time on February 29, 2024. To listen to the replay, dial (800) 770-2030 (U.S. and Canada) or (647) 362-9199 (international) using conference ID number 1057375. The archived webcast will be available on Ironwood’s website for 1 year beginning approximately one hour after the call has completed. About Ironwood Pharmaceuticals Ironwood Pharmaceuticals (Nasdaq: IRWD), an S&P SmallCap 600® company, is a leading gastrointestinal (GI) healthcare company on a mission to advance the treatment of GI diseases and redefine the standard of care for GI patients. We are pioneers in the development of LINZESS® (linaclotide), the U.S. branded prescription market leader for adults with irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC). LINZESS is also approved for the treatment of functional constipation in pediatric patients ages 6-17 years-old. Ironwood is also advancing apraglutide, a next-generation, long-acting synthetic GLP-2 analog being developed for rare gastrointestinal diseases, including short bowel syndrome with intestinal failure (SBS-IF) as well as several earlier stage assets. Building upon our history of GI innovation, we keep patients at the heart of our R&D and commercialization efforts to reduce the burden of GI diseases and address significant unmet needs. Founded in 1998, Ironwood Pharmaceuticals is headquartered in Boston, Massachusetts, and has an additional site in Basel, Switzerland. We routinely post information that may be important to investors on our website at . In addition, follow us on X and on LinkedIn. About LINZESS (Linaclotide) LINZESS® is the #1 prescribed brand in the U.S. for the treatment of adult patients with irritable bowel syndrome with constipation (“IBS-C”) or chronic idiopathic constipation (“CIC”), based on IQVIA data. LINZESS is a once-daily capsule that helps relieve the abdominal pain, constipation, and overall abdominal symptoms of bloating, discomfort and pain associated with IBS-C, as well as the constipation, infrequent stools, hard stools, straining, and incomplete evacuation associated with CIC. LINZESS relieves constipation in children and adolescents aged 6 to 17 years with functional constipation. The recommended dose is 290 mcg for IBS-C patients and 145 mcg for CIC patients, with a 72 mcg dose approved for use in CIC depending on individual patient presentation or tolerability. In children with functional constipation aged 6 to 17 years, the recommended dose is 72 mcg. LINZESS is not a laxative; it is the first medicine approved by the FDA in a class called GC-C agonists. LINZESS contains a peptide called linaclotide that activates the GC-C receptor in the intestine. Activation of GC-C is thought to result in increased intestinal fluid secretion and accelerated transit and a decrease in the activity of pain-sensing nerves in the intestine. The clinical relevance of the effect on pain fibers, which is based on nonclinical studies, has not been established. In the United States, Ironwood and AbbVie co-develop and co-commercialize LINZESS for the treatment of adults with IBS-C or CIC. In Europe, AbbVie markets linaclotide under the brand name CONSTELLA® for the treatment of adults with moderate to severe IBS-C. In Japan, Ironwood's partner, Astellas, markets linaclotide under the brand name LINZESS for the treatment of adults with IBS-C or CIC. Ironwood also has partnered with AstraZeneca for development and commercialization of LINZESS in China, and with AbbVie for development and commercialization of linaclotide in all other territories worldwide. LINZESS Important Safety Information INDICATIONS AND USAGE LINZESS® (linaclotide) is indicated for the treatment of both irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC) in adults and functional constipation (FC) in children and adolescents 6 to 17 years of age. It is not known if LINZESS is safe and effective in children with FC less than 6 years of age or in children with IBS-C less than 18 years of age. IMPORTANT SAFETY INFORMATION WARNING: RISK OF SERIOUS DEHYDRATION IN PEDIATRIC PATIENTS LESS THAN 2 YEARS OF AGE LINZESS is contraindicated in patients less than 2 years of age. In nonclinical studies in neonatal mice, administration of a single, clinically relevant adult oral dose of linaclotide caused deaths due to dehydration. Contraindications LINZESS is contraindicated in patients less than 2 years of age due to the risk of serious dehydration. LINZESS is contraindicated in patients with known or suspected mechanical gastrointestinal obstruction. Warnings and Precautions LINZESS is contraindicated in patients less than 2 years of age. In neonatal mice, linaclotide increased fluid secretion as a consequence of age-dependent elevated guanylate cyclase (GC-C) agonism, which was associated with increased mortality within the first 24 hours due to dehydration. There was no age dependent trend in GC-C intestinal expression in a clinical study of children 2 to less than 18 years of age; however, there are insufficient data available on GC-C intestinal expression in children less than 2 years of age to assess the risk of developing diarrhea and its potentially serious consequences in these patients. Diarrhea In adults, diarrhea was the most common adverse reaction in LINZESS-treated patients in the pooled IBS-C and CIC double-blind placebo-controlled trials. The incidence of diarrhea was similar in the IBS-C and CIC populations. Severe diarrhea was reported in 2% of 145 mcg and 290 mcg LINZESS-treated patients and in <1% of 72 mcg LINZESS-treated CIC patients. In children and adolescents 6 to 17 years of age, diarrhea was the most common adverse reaction in 72 mcg LINZESS-treated patients in the FC double-blind placebo-controlled trial. Severe diarrhea was reported in <1% of 72 mcg LINZESS treated patients. If severe diarrhea occurs, dosing should be suspended and the patient rehydrated. Common Adverse Reactions (incidence ≥2% and greater than placebo) In IBS-C or CIC adult patients: diarrhea, abdominal pain, flatulence, and abdominal distension. In FC pediatric patients: diarrhea. Please see full Prescribing Information including Boxed Warning: LINZESS® and CONSTELLA® are registered trademarks of Ironwood Pharmaceuticals, Inc. Any other trademarks referred to in this press release are the property of their respective owners. All rights reserved. Forward-Looking Statements This press release contains forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about Ironwood’s ability to execute on its mission; Ironwood’s strategy, business, financial position and operations; Ironwood’s ability to drive growth and profitability; the commercial potential of LINZESS; our financial performance and results, and guidance and expectations related thereto; LINZESS prescription demand growth, LINZESS U.S. net sales growth, total revenue and adjusted EBITDA in 2024; the commercial potential of apraglutide, including its peak sales potential; Ironwood’s anticipation of reaching new clinical development milestones in 2024 and the timing of data related thereto, and the belief that Ironwood is positioned well for long term growth. These forward-looking statements speak only as of the date of this press release, and Ironwood undertakes no obligation to update these forward-looking statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement. Applicable risks and uncertainties include those related to the effectiveness of development and commercialization efforts by us and our partners; preclinical and clinical development, manufacturing and formulation development of linaclotide, apraglutide, CNP-104, IW-3300, and our product candidates; the risk of uncertainty relating to pricing and reimbursement policies in the U.S., which, if not favorable for our products, could hinder or prevent our products’ commercial success; the risk that clinical programs and studies, including for apraglutide, IW-3300 and CNP-104, may not progress or develop as anticipated, including that studies are delayed or discontinued for any reason, such as safety, tolerability, enrollment, manufacturing, economic or other reasons; the risk that findings from our completed nonclinical and clinical studies may not be replicated in later studies; the risk of competition or that new products may emerge that provide different or better alternatives for treatment of the conditions that our products are approved to treat; the risk that we are unable to execute on our strategy to in-license externally developed products or product candidates; the risk that we are unable to successfully partner with other companies to develop and commercialize products or product candidates; the risk that healthcare reform and other governmental and private payor initiatives may have an adverse effect upon or prevent our products’ or product candidates’ commercial success; the efficacy, safety and tolerability of linaclotide and our product candidates; the risk that the commercial and therapeutic opportunities for LINZESS or our product candidates are not as we expect; decisions by regulatory and judicial authorities; the risk we may never get additional patent protection for linaclotide and other product candidates, that patents for linaclotide or other products may not provide adequate protection from competition, or that we are not able to successfully protect such patents; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the risk that the development of any of our linaclotide pediatric programs, apraglutide, CNP-104 and/or IW-3300 are not successful or that any of our product candidates does not receive regulatory approval or is not successfully commercialized; outcomes in legal proceedings to protect or enforce the patents relating to our products and product candidates, including abbreviated new drug application litigation; the risk that financial and operating results may differ from our projections; developments in the intellectual property landscape; challenges from and rights of competitors or potential competitors; the risk that our planned investments do not have the anticipated effect on our company revenues; developments in accounting guidance or practice; Ironwood’s or AbbVie’s accounting practices, including reporting and settlement practices as between Ironwood and AbbVie; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the risk that our indebtedness could adversely affect our financial condition or restrict our future operations; and the risks listed under the heading “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022, in our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2023 and September 30, 2023, and in our subsequent Securities and Exchange Commission filings. Condensed Consolidated Balance Sheets (In thousands) (unaudited) December 31, 2023 December 31, 2022 Assets Cash and cash equivalents $ 92,154 $ 656,203 Accounts receivable, net 129,122 115,458 Prepaid expenses and other current assets 12,012 7,715 Restricted cash - 1,250 Total current assets 233,288 780,626 Restricted cash, net of current portion - 485 Accounts receivable, net of current portion - 14,589 Property and equipment, net 5,585 6,288 Operating lease right-of-use assets 12,586 14,023 Intangible assets, net 3,682 - Deferred tax assets 212,324 283,661 Other assets 3,608 847 Total assets $ 471,073 $ 1,100,519 Liabilities and Stockholders’ Equity Accounts payable $ 7,830 $ 483 Accrued research and development costs 21,331 5,258 Accrued expenses and other current liabilities 44,254 16,700 Current portion of operating lease liabilities 3,126 3,065 Current portion on convertible senior notes 199,560 - Note hedge warrants - 19 Total current liabilities 276,101 25,525 Operating lease liabilities, net of current portion 14,543 16,599 Convertible senior notes, net of current portion 198,309 396,251 Revolving credit facility 300,000 - Other liabilities 28,415 9,766 Total stockholders’ equity (deficit) (346,295 ) 652,378 Total liabilities and stockholders’ equity (deficit) $ 471,073 $ 1,100,519 Condensed Consolidated Statements of Income (In thousands, except per share amounts) (unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Revenues Collaborative arrangements revenue $ 117,553 $ 107,199 $ 442,735 $ 410,596 Total revenues 117,553 107,199 442,735 410,596 Operating expenses: Research and development 35,676 10,446 116,085 44,265 Selling, general and administrative 38,667 28,390 158,314 115,994 Restructuring expenses 621 - 18,317 - Acquired in-process research and development 5,000 - 1,095,449 - Total operating expenses 79,964 38,836 1,388,165 160,259 Income (loss) from operations 37,589 68,363 (945,430 ) 250,337 Other income (expense): Interest expense and other financing costs (8,423 ) (1,526 ) (21,629 ) (7,598 ) Interest and investment income 1,194 5,446 18,971 9,501 Gain on derivatives - (18 ) 19 182 Other income (expense), net (7,229 ) 3,902 (2,639 ) 2,085 Income (loss) before income taxes 30,360 72,265 (948,069 ) 252,422 Income tax expense (32,105 ) (23,398 ) (83,490 ) (77,357 ) GAAP net income (loss) (1,745 ) 48,867 (1,031,559 ) 175,065 Less: GAAP net income (loss) attributable to noncontrolling interests (658 ) - (29,320 ) - GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. $ (1,087 ) $ 48,867 $ (1,002,239 ) $ 175,065 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share—basic $ (0.01 ) $ 0.32 $ (6.45 ) $ 1.13 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share—diluted $ (0.01 ) $ 0.27 $ (6.45 ) $ 0.96 Reconciliation of GAAP Results to Non-GAAP Financial Measures (In thousands, except per share amounts) (unaudited) A reconciliation between net income (loss) on a GAAP basis and on a non-GAAP basis is as follows: Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 GAAP net income (loss)1 $ (1,745 ) $ 48,867 $ (1,031,559 ) $ 175,065 Adjustments: Mark-to-market adjustments on the derivatives related to convertible notes, net - 18 (19 ) (182 ) Amortization of acquired intangible assets 207 - 418 - Restructuring expenses 621 - 18,317 - Acquisition-related costs 1,173 - 40,718 - Tax effect of adjustments (217 ) - (1,663 ) - Non-GAAP net income (loss)1 $ 39 $ 48,885 $ (973,788 ) $ 174,883 ____________________________________ 1 GAAP and non-GAAP net loss for twelve months ended December 31, 2023 include a one-time charge of approximately $1.1 billion related to acquired in-process research and development from the acquisition of VectivBio in the second quarter of 2023. A reconciliation between basic net income (loss) per share on a GAAP basis and on a non-GAAP basis is as follows: Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share – basic $ (0.01 ) $ 0.32 $ (6.45 ) $ 1.13 Plus: GAAP net income (loss) attributable to noncontrolling interests – basic (0.00 ) - (0.19 ) - Adjustments to GAAP net income (loss) per share (as detailed above) 0.01 - 0.37 - Non-GAAP net income (loss) per share – basic $ (0.00 ) $ 0.32 $ (6.27 ) $ 1.13 Weighted average number of common shares used to calculate net income (loss) per share — basic 156,014 153,337 155,435 154,366 A reconciliation between diluted net income (loss) per share on a GAAP basis and on a non-GAAP basis is as follows: Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share – diluted $ (0.01 ) $ 0.27 $ (6.45 ) $ 0.96 Plus: GAAP net income (loss) attributable to noncontrolling interests – diluted (0.00 ) - (0.19 ) - Adjustments to GAAP net income (loss) per share (as detailed above) 0.01 - 0.37 - Non-GAAP net income (loss) per share – diluted $ (0.00 ) $ 0.27 $ (6.27 ) $ 0.96 Weighted average number of common shares used to calculate net income (loss) per share — diluted 156,014 185,188 155,435 186,312 Reconciliation of GAAP Net Income to Adjusted EBITDA (In thousands) (unaudited) A reconciliation of GAAP net income (loss) to adjusted EBITDA: Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 GAAP net income (loss)1 $ (1,745 ) $ 48,867 $ (1,031,559 ) $ 175,065 Adjustments: Mark-to-market adjustments on the derivatives related to convertible notes, net - 18 (19 ) (182 ) Restructuring expenses 621 - 18,317 - Interest expense 8,423 1,526 21,629 7,598 Interest and investment income (1,194 ) (5,446 ) (18,971 ) (9,501 ) Income tax expense 32,105 23,398 83,490 77,357 Depreciation and amortization 512 340 1,575 1,418 Acquisition-related costs 1,173 40,718 Adjusted EBITDA1 $ 39,895 $ 68,703 $ (884,820 ) $ 251,755 ____________________________________ 1 GAAP net loss and adjusted EBITDA for twelve months ended December 31, 2023 includes a one-time charge of approximately $1.1 billion related to acquired in-process research and development from the acquisition of VectivBio in the second quarter of 2023. U.S. LINZESS Commercial Collaboration1 Revenue/Expense Calculation (In thousands) (unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 LINZESS U.S. net sales as reported by AbbVie2 $ 274,356 $ 260,327 $ 1,073,210 $ 1,002,143 AbbVie & Ironwood commercial costs, expenses and other discounts3 62,903 66,879 286,045 272,757 Commercial profit on sales of LINZESS $ 211,453 $ 193,448 $ 787,165 $ 729,386 Commercial Margin4 77 % 74 % 73 % 73 % Ironwood’s share of net profit 105,727 96,724 393,583 364,693 Reimbursement for Ironwood’s commercial expenses 8,260 8,048 36,875 34,074 Ironwood’s collaborative arrangement revenue $ 113,987 $ 104,772 $ 430,458 $ 398,767 ____________________________________ 1 Ironwood collaborates with AbbVie on the development and commercialization of linaclotide in North America. Under the terms of the collaboration agreement, Ironwood receives 50% of the net profits and bears 50% of the net losses from the commercial sale of LINZESS in the U.S. The purpose of this table is to present calculations of Ironwood’s share of net profit (loss) generated from the sales of LINZESS in the U.S. and Ironwood’s collaboration revenue/expense; however, the table does not present the research and development expenses related to LINZESS in the U.S. that are shared equally between the parties under the collaboration agreement. Please refer to the table at the end of this press release for net profit for the U.S. LINZESS brand collaboration with AbbVie. 2 LINZESS net sales are recognized using AbbVie’s revenue recognition accounting policies and reporting conventions. As a result, certain rebates and discounts are classified as LINZESS U.S. commercial costs, expenses and other discounts within Ironwood’s calculation of collaborative arrangements revenue. 3 Includes certain discounts recognized and cost of goods sold incurred by AbbVie; also includes commercial costs incurred by AbbVie and Ironwood that are attributable to the cost-sharing arrangement between the parties. 4 Commercial margin is defined as commercial profit on sales of LINZESS as a percent of total LINZESS U.S. net sales. US LINZESS Full Brand Collaboration1 Revenue/Expense Calculation (In thousands) (unaudited) Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 LINZESS U.S. net sales as reported by AbbVie2 $ 274,356 $ 260,327 $ 1,073,210 $ 1,002,143 AbbVie & Ironwood commercial costs, expenses and other discounts3 62,903 66,879 286,045 272,757 AbbVie & Ironwood R&D Expenses4 8,980 9,684 37,250 33,684 Total net profit on sales of LINZESS $ 202,473 $ 183,764 $ 749,915 $ 695,702 ____________________________________ 1 Ironwood collaborates with AbbVie on the development and commercialization of linaclotide in North America. Under the terms of the collaboration agreement, Ironwood receives 50% of the net profits and bears 50% of the net losses from the commercial sale of LINZESS in the U.S. The purpose of this table is to present calculations of the total net profit (loss) generated from the sales of LINZESS in the U.S., including the commercial costs and expenses and the research and development expenses related to LINZESS in the U.S. that are shared equally between the parties under the collaboration agreement. 2 LINZESS net sales are recognized using AbbVie’s revenue recognition accounting policies and reporting conventions. As a result, certain rebates and discounts are classified as LINZESS U.S. commercial costs, expenses and other discounts within Ironwood’s calculation of collaborative arrangements revenue. 3 Includes certain discounts recognized and cost of goods sold incurred by AbbVie; also includes commercial costs incurred by AbbVie and Ironwood that are attributable to the cost-sharing arrangement between the parties. 4 R&D expenses related to LINZESS in the U.S. are shared equally between Ironwood and AbbVie under the collaboration agreement. View source version on businesswire.com: Contacts Investors: Greg Martini, 617-374-5230 gmartini@ironwoodpharma.com Matt Roache, 617-621-8395 mroache@ironwoodpharma.com Media: Beth Calitri, 978-417-2031 bcalitri@ironwoodpharma.com Source: Ironwood Pharmaceuticals, Inc. View this news release online at:

– LINZESS (Iinaclotide) EUTRx prescription demand growth increased 9% year-over-year; LINZESS U.S. net sales of $270 million, an increase of 9% year-over-year – – Expands clinical utility of LINZESS with FDA approval for pediatric patients ages 6-17 years-old suffering from functional constipation (FC) – – Strengthens GI development portfolio with acquisition of VectivBio Holding AG and its lead investigational asset, apraglutide, for the potential treatment of short bowel syndrome with intestinal failure – – Completes STARS Phase III clinical trial enrollment; now expects topline data in March of 2024 – BOSTON--(BUSINESS WIRE)-- Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD), a GI-focused healthcare company, today reported its second quarter 2023 results and updated its full year 2023 financial guidance. “We made significant progress towards the goal of becoming the leading GI healthcare company, as the second quarter was truly transformative for Ironwood,” said Tom McCourt, chief executive officer of Ironwood. “LINZESS continued its strong momentum with another quarter of impressive performance. As a result, we are raising our full-year 2023 U.S. net sales and Ironwood revenue guidance. Furthermore, we are thrilled that in June the FDA approved LINZESS for the treatment of pediatric patients ages 6 to 17 years-old with functional constipation, expanding its clinical utility and adding another potential growth driver for the brand. Also in the second quarter, we strengthened our GI portfolio with the acquisition of VectivBio, including its lead investigational asset, apraglutide, which we believe is poised to become the new standard of care for patients with short bowel syndrome with intestinal failure if successfully developed and approved, with the potential to achieve $1 billion in peak net sales. Looking ahead, we are excited about continuing to maximize LINZESS, advance our clinical programs, strengthen our financial position, and grow Ironwood’s leadership within GI.” Second Quarter 2023 Financial Highlights1 (in thousands, except for per share amounts) 2Q 2023 2Q 2022 Total revenues $107,382 $97,231 Total operating expenses2 1,190,521 41,576 GAAP net income (loss)2 (1,089,478) 37,080 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc.2 (1,062,187) 37,080 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share – basic (6.84) 0.24 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share – diluted (6.84) 0.21 Adjusted EBITDA2 (1,034,182) 56,015 Non-GAAP net income (loss)2 (1,041,325) 37,761 Non-GAAP net income (loss) per share – basic (6.71) 0.24 Non-GAAP net income (loss) per share – diluted (6.71) 0.21 1. Refer to the Reconciliation of GAAP Results to Non-GAAP Financial Measures table and to the Reconciliation of GAAP Net Income to Adjusted EBITDA table at the end of this press release. Refer to Non-GAAP Financial Measures for additional information. 2. Includes a one-time charge of approximately $1.1 billion related to acquired in-process research and development from the acquisition of VectivBio in the second quarter of 2023. Second Quarter 2023 Corporate Highlights U.S. LINZESS Prescription Demand: Total LINZESS prescription demand in the second quarter of 2023 was 47 million LINZESS capsules, a 9% increase compared to the second quarter of 2022, per IQVIA. U.S. Brand Collaboration: LINZESS U.S. net sales are provided to Ironwood by its U.S. partner, AbbVie Inc. (“AbbVie”). LINZESS U.S. net sales were $269.7 million in the second quarter of 2023, a 9% increase compared to $248.4 million in the second quarter of 2022. Ironwood and AbbVie share equally in U.S. brand collaboration profits. See the LINZESS U.S. Commercial Collaboration table at the end of the press release. – LINZESS commercial margin was 71% in the second quarter of 2023, compared to 69% in the second quarter of 2022. See the U.S. LINZESS Full Brand Collaboration table below and at the end of this press release. – Net profit for the LINZESS U.S. brand collaboration, net of commercial and research and development (“R&D”) expenses, was $180.3 million in the second quarter of 2023, compared to $163.8 million in the second quarter of 2022. See U.S. LINZESS Full Brand Collaboration table below and at the end of this press release. Collaboration Revenue to Ironwood: Ironwood recorded $104.8 million in collaboration revenue in the second quarter of 2023 related to sales of LINZESS in the U.S., an 11% increase compared to $94.5 million for the second quarter of 2022. See U.S. LINZESS Commercial Collaboration table at the end of the press release. U.S. LINZESS Full Brand Collaboration (in thousands, except for percentages) Three Months Ended June 30, 2023 2022 LINZESS U.S. net sales as reported by AbbVie $269,686 $248,351 AbbVie & Ironwood commercial costs, expenses and other discounts 78,998 76,363 Commercial margin 71% 69% AbbVie & Ironwood R&D Expenses 10,356 8,214 Total net profit on sales of LINZESS 180,332 163,774 Full brand margin 67% 66% FDA Approval of New Indication for LINZESS In June 2023, Ironwood announced that the U.S. Food and Drug Administration (“FDA”) approved LINZESS as a once-daily treatment for pediatric patients ages 6-17 years-old suffering from functional constipation. LINZESS is the first and only FDA-approved prescription therapy for functional constipation in this patient population. Acquisition of VectivBio Holding AG (“VectivBio”) On June 29, 2023, Ironwood completed a tender offer to purchase outstanding ordinary shares of VectivBio (the “VectivBio Shares”) at a price per share of $17.00, net to the shareholders of VectivBio in cash, without interest and subject to any applicable withholding taxes. The aggregate consideration paid by Ironwood to acquire the shares accepted for payment was approximately $1.2 billion. Ironwood financed the acquisition through proceeds from the borrowings under a revolving credit facility entered into in connection with the transaction, cash on hand, and cash of VectivBio. As of June 30, 2023, Ironwood holds 98% of the outstanding VectivBio Shares. Ironwood intends to effect a squeeze-out merger under Swiss law to acquire the remaining outstanding VectivBio Shares in the second half of 2023. The remaining outstanding VectivBio Shares are expected to be settled by Ironwood in cash. Workforce Reductions and Restructuring In April 2023, Ironwood reduced its workforce by approximately 10% of its headquarters-based personnel in an effort to further strengthen the operational efficiency of the organization. The workforce reduction was substantially completed during the second quarter of 2023. In June 2023, Ironwood commenced the elimination of certain positions in connection with the VectivBio acquisition. The majority of the eliminations were initiated in June 2023 and the remaining eliminations are expected to be substantially completed during the third quarter of 2023. Pipeline Updates Apraglutide Ironwood is advancing apraglutide, a next-generation, synthetic peptide glucagon-like peptide-2 (“GLP-2”) analog which Ironwood is developing for short bowel syndrome with intestinal failure (“SBS-IF”), a severe malabsorptive condition. Ironwood believes apraglutide has the potential to be the new standard of care for the treatment of SBS-IF based on its potency and pharmacological properties. Ironwood is conducting a Phase III clinical trial, STARS, designed to evaluate clinical benefit for both SBS-IF stoma and colon-in-continuity patients with unique convenience of weekly dosing. Enrollment is completed and topline results are now expected in March of 2024. Ironwood is also conducting a Phase II proof-of-concept clinical trial, STARGAZE, to evaluate apraglutide in patients with steroid-refractory gastrointestinal acute Graft versus Host Disease (aGvHD), a life-threatening condition that occurs when immune cells from the donor attack a recipient’s healthy cells after an allogeneic hematopoietic stem cell transplant. Ironwood expects data for the STARGAZE Phase II clinical trial in the first quarter of 2024. CNP-104 Ironwood has a collaboration and license option agreement with COUR Pharmaceuticals Development Company, Inc. (“COUR”). This agreement grants Ironwood an option to acquire an exclusive license to research, develop, manufacture and commercialize, in the U.S., products containing CNP-104 (“CNP-104”), a tolerizing immune modifying nanoparticle, for the treatment of primary biliary cholangitis (“PBC”), a rare autoimmune disease targeting the liver. If successful, CNP-104 has the potential to be the first approved PBC disease modifying therapy. COUR is currently conducting a clinical study for CNP-104 evaluating the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients, with early data assessing T-cell response from patients enrolled in the clinical study expected in the second half of 2023, which Ironwood believes will inform timing of topline data. IW-3300 Ironwood is currently advancing IW-3300, a guanylate cyclase-C agonist being developed for the potential treatment of visceral pain conditions, such as interstitial cystitis / bladder pain syndrome (“IC/BPS”) and endometriosis. Ironwood is continuing the Phase II proof of concept study in IC/BPS. Second Quarter 2023 Financial Results Total Revenues. Total revenues in the second quarter of 2023 were $107.4 million, compared to $97.2 million in the second quarter of 2022. – Total revenues in the second quarter of 2023 consisted of $104.8 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S. and $2.6 million in royalties and other revenue. Total revenues in the second quarter of 2022 consisted of $94.5 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S. and $2.7 million in royalties and other revenue. Operating Expenses. Operating expenses in the second quarter of 2023 were $1,190.5 million, which includes a one-time charge of $1,090.4 million of acquired IPR&D (“IPR&D”) from the acquisition of VectivBio, compared to $41.6 million in the second quarter of 2022. – Operating expenses in the second quarter of 2023 consisted of $52.5 million in selling, general and administrative (“SG&A”) expenses, and $34.6 million in research and development (“R&D”) expenses, $13.0 million in restructuring expenses and approximately $1.1 billion in acquired in-process research and development. Operating expenses in the second quarter of 2022 consisted of $30.1 million in SG&A expenses and $11.5 million in R&D expenses. Interest Expense and Other Financing Costs. Interest expense was $1.8 million in the second quarter of 2023, in connection with Ironwood’s convertible senior notes and revolving credit facility. Interest expense recorded in the second quarter of 2023 included $1.3 million in cash expense and $0.5 million in non-cash expense. Interest expense was $2.2 million in the second quarter of 2022, in connection with Ironwood’s convertible senior notes. Interest expense recorded in the second quarter of 2022 included $1.7 million in cash expense and $0.5 million in non-cash expense. Interest and Investment Income. Interest and investment income was $8.8 million in the second quarter of 2023. Interest and investment income was $1.0 million in the second quarter of 2022. Loss on Derivatives. Ironwood recorded a loss on derivatives of $0.7 million in the second quarter of 2022 as a result of the change in fair value of its convertible note hedges and note hedge warrants. Ironwood’s note hedge warrants and convertible note hedges terminated unexercised upon expiration in April 2023 and June 2022, respectively. Income Tax Expense. Ironwood recorded $13.3 million of income tax expense in the second quarter of 2023, the majority of which was non-cash, as Ironwood continues to utilize net operating losses to offset taxable income for federal purposes and in many states. Ironwood recorded $16.7 million of income tax expense in the second quarter of 2022. GAAP Net Income (Loss) Attributable to Ironwood. GAAP net loss was ($1,062.2) million, or ($6.84) per share (basic and diluted) in the second quarter of 2023, which includes a one-time charge of ($1,090.4) million of acquired IPR&D from the acquisition of VectivBio, compared to GAAP net income of $37.1 million, or $0.24 per share (basic) and $0.21 per share (diluted) in the second quarter of 2022. Non-GAAP Net Income (Loss). Non-GAAP net loss was ($1,041.3) million, or ($6.71) per share (basic and diluted) in the second quarter of 2023, which includes a one-time charge of ($1,090.4) million of acquired IPR&D from the acquisition of VectivBio, compared to non-GAAP net income of $37.8 million, or $0.24 per share (basic) and $0.21 (diluted) in the second quarter of 2022. – Non-GAAP net income excludes the impact of mark-to-market adjustments on the derivatives related to Ironwood’s 2022 Convertible Notes, amortization of acquired intangible assets, restructuring expenses and acquisition-related costs, all net of tax effect. See Non-GAAP Financial Measures below. Adjusted EBITDA. Adjusted EBITDA was ($1,034.2) million in the second quarter of 2023, which includes a one-time charge of ($1,090.4) million of acquired IPR&D from the acquisition of VectivBio, compared to $56.0 million in the second quarter of 2022. – Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, acquisition-related costs, net interest expense, income taxes, depreciation and amortization, and acquisition-related costs, from GAAP net income. See Non-GAAP Financial Measures below. Cash Flow Highlights. Ironwood ended the second quarter of 2023 with $175.3 million of cash and cash equivalents, compared to $656.2 million of cash and cash equivalents at the end of 2022. – Ironwood generated approximately $35.0 million in cash from operations in the second quarter of 2023, compared to $61.4 million in cash from operations in the second quarter of 2022. – The acquisition of VectivBio was funded through proceeds from a revolving credit agreement, cash on hand and cash of VectivBio. Ironwood 2023 Financial Guidance. Ironwood is increasing its 2023 U.S. LINZESS net sales and total revenue growth guidance and updating its adjusted EBITDA financial guidance. Prior 2023 Guidance Updated 2023 Guidance U.S. LINZESS Net Sales Growth 3% to 5% 6% to 8% Total Revenue $420 to $435 million $435 to $450 million Adjusted EBITDA1 >$250 million ~ ($900) million2 Includes a one-time charge of approximately $1.1 billion from acquisition of VectivBio 1 Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization, and acquisition-related costs from GAAP net income. 2 Updated 2023 adjusted EBITDA guidance includes a one-time charge of approximately $1.1 billion related to acquired in-process research and development from the acquisition of VectivBio in the second quarter of 2023. For purposes of this guidance, Ironwood has assumed that it will not incur material expenses related to additional business development activities in 2023. Non-GAAP Financial Measures Ironwood presents non-GAAP net income and non-GAAP net income per share to exclude the impact, net of tax effects, of net gains and losses on derivatives related to Ironwood’s 2022 Convertible Notes that are required to be marked-to-market, restructuring expenses, and acquisition-related costs. Non-GAAP adjustments are further detailed below: The gains and losses on the derivatives related to Ironwood’s 2022 Convertible Notes were highly variable, difficult to predict and of a size that could have a substantial impact on the company’s reported results of operations in any given period. Restructuring expenses are considered to be a non-recurring event as they are associated with distinct operational decisions. Included in restructuring expenses are costs associated with exit and disposal activities. Acquisition-related costs in connection with the acquisition of VectivBio are considered to be non-recurring and include direct and incremental costs associated with the acquisition and integration of VectivBio to the extent such costs were not classified as capitalizable transaction costs attributed to the cost of net assets acquired through acquisition accounting. Ironwood also presents adjusted EBITDA, a non-GAAP measure, as well as guidance on adjusted EBITDA. Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to Ironwood’s 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization, and acquisition-related costs from GAAP net income. The adjustments are made on a similar basis as described above related to non-GAAP net income, as applicable. Management believes this non-GAAP information is useful for investors, taken in conjunction with Ironwood’s GAAP financial statements, because it provides greater transparency and period-over-period comparability with respect to Ironwood’s operating performance. These measures are also used by management to assess the performance of the business. Investors should consider these non-GAAP measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of non-GAAP net income and non-GAAP net income per share to GAAP net income and GAAP net income per share, respectively, and for a reconciliation of adjusted EBITDA to GAAP net income, please refer to the tables at the end of this press release. Ironwood does not provide guidance on GAAP net income or a reconciliation of expected adjusted EBITDA to expected GAAP net income because, without unreasonable efforts, it is unable to predict with reasonable certainty the non-GAAP adjustments used to calculate adjusted EBITDA. These adjustments are uncertain, depend on various factors and could have a material impact on GAAP net income for the guidance period. Conference Call Information Ironwood will host a conference call and webcast at 8:30 a.m. Eastern Time on Tuesday, August 8, 2023 to discuss its second quarter 2023 results and recent business activities. Individuals interested in participating in the call should dial (888) 330-2384 (U.S. and Canada) or (240) 789-2701 (international) using conference ID number and event passcode 4671230. To access the webcast, please visit the Investors section of Ironwood’s website at at least 15 minutes prior to the start of the call to ensure adequate time for any software downloads that may be required. The call will be available for replay via telephone starting at approximately 11:30 a.m. Eastern Time on August 8, 2023, running through 11:59 p.m. Eastern Time on August 22, 2023. To listen to the replay, dial (800) 770-2030 (U.S. and Canada) or (647) 362-9199 (international) using conference ID number 4671230. The archived webcast will be available on Ironwood’s website for 14 days beginning approximately one hour after the call has completed. About Ironwood Pharmaceuticals Ironwood Pharmaceuticals (Nasdaq: IRWD), an S&P SmallCap 600® company, is a leading global gastrointestinal (GI) healthcare company on a mission to advance the treatment of GI diseases and redefine the standard of care for GI patients. We are pioneers in the development of LINZESS® (linaclotide), the U.S. branded prescription market leader for adults with irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC). LINZESS is also approved for the treatment of functional constipation in pediatric patients ages 6-17 years-old. Ironwood is also advancing apraglutide, a next-generation, long-acting synthetic GLP-2 analog being developed for rare gastrointestinal diseases, including short bowel syndrome with intestinal failure (SBS-IF) as well as several earlier stage assets. Building upon our history of GI innovation, we keep patients at the heart of our R&D and commercialization efforts to reduce the burden of GI diseases and address significant unmet needs. Founded in 1998, Ironwood Pharmaceuticals is headquartered in Boston, Massachusetts, and has additional operations in Basel, Switzerland. We routinely post information that may be important to investors on our website at . In addition, follow us on Twitter and on LinkedIn. About LINZESS (linaclotide) LINZESS® is the #1 prescribed brand in the U.S. for the treatment of adult patients with irritable bowel syndrome with constipation (“IBS-C”) or chronic idiopathic constipation (“CIC”), based on IQVIA data. LINZESS is a once-daily capsule that helps relieve the abdominal pain, constipation, and overall abdominal symptoms of bloating, discomfort and pain associated with IBS-C, as well as the constipation, infrequent stools, hard stools, straining, and incomplete evacuation associated with CIC. LINZESS relieves constipation in children and adolescents aged 6 to 17 years with functional constipation. The recommended dose is 290 mcg for IBS-C patients and 145 mcg for CIC patients, with a 72 mcg dose approved for use in CIC depending on individual patient presentation or tolerability. In children with functional constipation aged 6 to 17 years, the recommended dose is 72 mcg. LINZESS is not a laxative; it is the first medicine approved by the FDA in a class called GC-C agonists. LINZESS contains a peptide called linaclotide that activates the GC-C receptor in the intestine. Activation of GC-C is thought to result in increased intestinal fluid secretion and accelerated transit and a decrease in the activity of pain-sensing nerves in the intestine. The clinical relevance of the effect on pain fibers, which is based on nonclinical studies, has not been established. In the United States, Ironwood and AbbVie co-develop and co-commercialize LINZESS for the treatment of adults with IBS-C or CIC. In Europe, AbbVie markets linaclotide under the brand name CONSTELLA® for the treatment of adults with moderate to severe IBS-C. In Japan, Ironwood's partner, Astellas, markets linaclotide under the brand name LINZESS for the treatment of adults with IBS-C or CIC. Ironwood also has partnered with AstraZeneca for development and commercialization of LINZESS in China, and with AbbVie for development and commercialization of linaclotide in all other territories worldwide. LINZESS Important Safety Information INDICATIONS AND USAGE LINZESS® (linaclotide) is indicated for the treatment of both irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC) in adults and functional constipation (FC) in children and adolescents 6 to 17 years of age. It is not known if LINZESS is safe and effective in children with FC less than 6 years of age or in children with IBS-C less than 18 years of age. IMPORTANT SAFETY INFORMATION WARNING: RISK OF SERIOUS DEHYDRATION IN PEDIATRIC PATIENTS LESS THAN 2 YEARS OF AGE LINZESS is contraindicated in patients less than 2 years of age. In nonclinical studies in neonatal mice, administration of a single, clinically relevant adult oral dose of linaclotide caused deaths due to dehydration. Contraindications LINZESS is contraindicated in patients less than 2 years of age due to the risk of serious dehydration. LINZESS is contraindicated in patients with known or suspected mechanical gastrointestinal obstruction. Warnings and Precautions LINZESS is contraindicated in patients less than 2 years of age. In neonatal mice, linaclotide increased fluid secretion as a consequence of age-dependent elevated guanylate cyclase (GC-C) agonism, which was associated with increased mortality within the first 24 hours due to dehydration. There was no age dependent trend in GC-C intestinal expression in a clinical study of children 2 to less than 18 years of age; however, there are insufficient data available on GC-C intestinal expression in children less than 2 years of age to assess the risk of developing diarrhea and its potentially serious consequences in these patients. Diarrhea In adults, diarrhea was the most common adverse reaction in LINZESS-treated patients in the pooled IBS-C and CIC double-blind placebo-controlled trials. The incidence of diarrhea was similar in the IBS-C and CIC populations. Severe diarrhea was reported in 2% of 145 mcg and 290 mcg LINZESS-treated patients and in <1% of 72 mcg LINZESS-treated CIC patients. In children and adolescents 6 to 17 years of age, diarrhea was the most common adverse reaction in 72 mcg LINZESS-treated patients in the FC double-blind placebo-controlled trial. Severe diarrhea was reported in <1% of 72 mcg LINZESS treated patients. If severe diarrhea occurs, dosing should be suspended and the patient rehydrated. Common Adverse Reactions (incidence ≥2% and greater than placebo) In IBS-C or CIC adult patients: diarrhea, abdominal pain, flatulence, and abdominal distension. In FC pediatric patients: diarrhea. Please see full Prescribing Information including Boxed Warning: LINZESS® and CONSTELLA® are registered trademarks of Ironwood Pharmaceuticals, Inc. Any other trademarks referred to in this press release are the property of their respective owners. All rights reserved. Forward-Looking Statements This press release contains forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about Ironwood’s ability to execute on its mission; Ironwood’s strategy, business, financial position and operations; Ironwood’s ability to drive growth and profitability; the demand, development, commercial availability and commercial potential of linaclotide, including pursuing highly differentiated GI assets to add to our portfolio, and the drivers, timing, impact and results thereof; the potential indications for, and benefits of, linaclotide; our financial performance and results, and guidance and expectations related thereto; LINZESS prescription demand growth, LINZESS U.S. net sales growth, total revenue and adjusted EBITDA in 2023; our ability to develop apraglutide and the expected timing of receiving data from the apraglutide clinical trials; the commercial potential of apraglutide, including potential peak net sales, and the potential of apraglutide to become the standard of care for patients with SBS-IF; the potential of CNP-104 to be the first PBC disease modifying therapy and the expected timing of receiving data from the clinical study for CNP-104 in PBC patients and the results thereof, and the belief that this will inform timing of topline data; our plan to advance IW-3300 including the timing and results thereof; our plans for completing statutory squeeze-out merger, and the expected timing thereof. These forward-looking statements speak only as of the date of this press release, and Ironwood undertakes no obligation to update these forward-looking statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement. Applicable risks and uncertainties include those related to the effectiveness of development and commercialization efforts by us and our partners; preclinical and clinical development, manufacturing and formulation development of linaclotide, apraglutide, CNP-104, IW-3300, and our product candidates; the risk that clinical programs and studies, including for the linaclotide pediatric program, apraglutide, IW-3300 and CNP-104, may not progress or develop as anticipated, including that studies are delayed or discontinued for any reason, such as safety, tolerability, enrollment, manufacturing, economic or other reasons; the risk that findings from our completed nonclinical and clinical studies may not be replicated in later studies; the risk that we or our partners are unable to obtain, maintain or manufacture sufficient LINZESS or our product candidates, or otherwise experience difficulties with respect to supply or manufacturing; the efficacy, safety and tolerability of linaclotide and our product candidates; the risk that the commercial and therapeutic opportunities for LINZESS or our product candidates are not as we expect; decisions by regulatory and judicial authorities; the risk we may never get additional patent protection for linaclotide and other product candidates, that patents for linaclotide or other products may not provide adequate protection from competition, or that we are not able to successfully protect such patents; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the risk that the development of any of our linaclotide pediatric programs, apraglutide, CNP-104 and/or IW-3300 are not successful or that any of our product candidates is not successfully commercialized; outcomes in legal proceedings to protect or enforce the patents relating to our products and product candidates, including abbreviated new drug application litigation; the risk that financial and operating results may differ from our projections; developments in the intellectual property landscape; challenges from and rights of competitors or potential competitors; the risk that our planned investments do not have the anticipated effect on our company revenues; developments in accounting guidance or practice; Ironwood’s or AbbVie’s accounting practices, including reporting and settlement practices as between Ironwood and AbbVie; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the impact of the COVID-19 pandemic; and the risks listed under the heading “Risk Factors” and elsewhere in Ironwood's Annual Report on Form 10-K for the year ended December 31, 2022, and in our subsequent Securities and Exchange Commission filings. Condensed Consolidated Balance Sheets (In thousands) (unaudited) June 30, 2023 December 31, 2022 Assets Cash and cash equivalents $ 175,321 $ 656,203 Accounts receivable, net 118,990 115,458 Prepaid expenses and other current assets 22,500 7,715 Restricted cash 788 1,250 Total current assets 317,599 780,626 Restricted cash, net of current portion 510 485 Accounts receivable, net of current portion - 14,589 Property and equipment, net 5,876 6,288 Operating lease right-of-use assets 13,319 14,023 Intangible assets, net 4,096 - Deferred tax assets 257,900 283,661 Other assets 3,920 847 Total assets $ 603,220 $ 1,100,519 Liabilities and Stockholders’ Equity Accounts payable $ 3,505 $ 483 Accrued research and development costs 20,122 5,258 Accrued expenses and other current liabilities 79,585 16,700 Current portion of operating lease liabilities 3,095 3,065 Current portion on convertible senior notes 199,083 - Note hedge warrants - 19 Total current liabilities 305,390 25,525 Operating lease liabilities, net of current portion 15,598 16,599 Convertible senior notes, net of current portion 197,974 396,251 Revolving credit facility 400,000 - Other liabilities 31,035 9,766 Total stockholders’ equity (deficit) (346,777) 652,378 Total liabilities and stockholders’ equity (deficit) $ 603,220 $ 1,100,519 Condensed Consolidated Statements of Income (In thousands, except per share amounts) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenues Collaborative arrangements revenue $ 107,382 $ 97,231 $ 211,443 $ 194,760 Total revenues 107,382 97,231 211,443 194,760 Operating expenses: Research and development 34,577 11,452 47,424 22,274 Selling, general and administrative 52,484 30,124 83,601 58,985 Restructuring expenses 13,011 - 13,011 - Acquired in-process research and development 1,090,449 - 1,090,449 - Total operating expenses 1,190,521 41,576 1,234,485 81,259 Income (loss) from operations (1,083,139) 55,655 (1,023,042) 113,501 Other income (expense): Interest expense and other financing costs (1,840) (2,207) (3,367) (4,548) Interest and investment income 8,757 1,018 16,029 1,248 Gain (loss) on derivatives - (681) 19 49 Other income (expense), net 6,917 (1,870) 12,681 (3,251) Income (loss) before income taxes (1,076,222) 53,785 (1,010,361) 110,250 Income tax expense (13,256) (16,705) (33,403) (34,369) GAAP net income (loss) (1,089,478) 37,080 (1,043,764) 75,881 Less: GAAP net income (loss) attributable to noncontrolling interests (27,291) - (27,291) - GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. $ (1,062,187) $ 37,080 $ (1,016,473) $ 75,881 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share—basic ($6.84) $ 0.24 ($6.56) $ 0.49 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share—diluted ($6.84) $ 0.21 ($6.56) $ 0.42 Reconciliation of GAAP Results to Non-GAAP Financial Measures (In thousands, except per share amounts) (unaudited) A reconciliation between net income on a GAAP basis and on a non-GAAP basis is as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 GAAP net income (loss)1 $ (1,089,478) $ 37,080 $ (1,043,764) $ 75,881 Adjustments: Mark-to-market adjustments on the derivatives related to convertible notes, net 0 681 (19) (49) Amortization of acquired intangible assets 4 - 4 - Restructuring expenses 13,011 - 13,011 - Acquisition-related costs 35,681 - 35,681 - Tax effect of adjustments (543) - (543) - Non-GAAP net income (loss)1 $ (1,041,325) $ 37,761 $ (995,630) $ 75,832 A reconciliation between basic net income per share on a GAAP basis and on a non-GAAP basis is as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share – basic $ (6.84) $ 0.24 $ (6.56) $ 0.49 Plus: GAAP net income (loss) attributable to noncontrolling interests – basic $ (0.18) - $ (0.18) - Adjustments to GAAP net income (loss) per share (as detailed above) 0.31 - 0.31 - Non-GAAP net income per share (loss) – basic $ (6.71) $ 0.24 $ (6.43) $ 0.49 Weighted average number of common shares used to calculate net income per share — basic 155,367 153,304 154,912 155,550 A reconciliation between diluted net income per share on a GAAP basis and on a non-GAAP basis is as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 GAAP net income (loss) attributable to Ironwood Pharmaceuticals, Inc. per share – diluted $ (6.84) $ 0.24 $ (6.56) $ 0.49 Plus: GAAP net income (loss) attributable to noncontrolling interests – diluted $ (0.18) - $ (0.18) - Adjustments to GAAP net income per share (loss) (as detailed above) 0.31 - 0.31 - Non-GAAP net income per share (loss) – diluted $ (6.71) $ 0.21 $ (6.43) $ 0.42 Weighted average number of common shares used to calculate net income per share — diluted 155,367 184,876 154,912 187,315 1 GAAP and non-GAAP net loss for three months ended June 30, 2023 and for six months ended June 30, 2023 include a one-time charge of approximately $1.1 billion related to acquired in-process research and development from the acquisition of VectivBio in the second quarter of 2023 Reconciliation of GAAP Net Income to Adjusted EBITDA (In thousands) (unaudited) A reconciliation of GAAP net income to adjusted EBITDA: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 GAAP net income (loss)1 $ (1,089,478) $ 37,080 $ (1,043,764) $ 75,881 Adjustments: Mark-to-market adjustments on the derivatives related to convertible notes, net 0 681 (19) (49) Restructuring expenses 13,011 - 13,011 - Interest expense 1,840 2,207 3,367 4,548 Interest and investment income (8,757) (1,018) (16,029) (1,248) Income tax expense 13,256 16,705 33,403 34,369 Depreciation and amortization 265 360 551 715 Acquisition-related costs 35,681 - 35,681 - Adjusted EBITDA1 $ (1,034,182) $ 56,015 $ (973,799) $ 114,216 1 GAAP net loss and adjusted EBITDA for three months ended June 30, 2023 and for six months ended June 30, 2023 includes a one-time charge of approximately $1.1 billion related to acquired in-process research and development from the acquisition of VectivBio in the second quarter of 2023. U.S. LINZESS Commercial Collaboration1 Revenue/Expense Calculation (In thousands) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 LINZESS U.S. net sales as reported by AbbVie2 $ 269,686 $ 248,351 $ 519,900 $ 480,685 AbbVie & Ironwood commercial costs, expenses and other discounts3 78,998 76,363 145,406 137,379 Commercial profit on sales of LINZESS $ 190,688 $ 171,988 $ 374,494 $ 343,306 Commercial Margin4 71% 69% 72% 71% Ironwood’s share of net profit 95,344 85,994 187,247 171,653 Reimbursement for Ironwood’s commercial expenses 9,407 8,458 19,135 17,118 Ironwood’s collaborative arrangement revenue $ 104,751 $ 94,452 $ 206,382 $ 188,771 1 Ironwood collaborates with AbbVie on the development and commercialization of linaclotide in North America. Under the terms of the collaboration agreement, Ironwood receives 50% of the net profits and bears 50% of the net losses from the commercial sale of LINZESS in the U.S. The purpose of this table is to present calculations of Ironwood’s share of net profit (loss) generated from the sales of LINZESS in the U.S. and Ironwood’s collaboration revenue/expense; however, the table does not present the research and development expenses related to LINZESS in the U.S. that are shared equally between the parties under the collaboration agreement. Please refer to the table at the end of this press release for net profit for the U.S. LINZESS brand collaboration with AbbVie. 2 LINZESS net sales are recognized using AbbVie’s revenue recognition accounting policies and reporting conventions. As a result, certain rebates and discounts are classified as LINZESS U.S. commercial costs, expenses and other discounts within Ironwood’s calculation of collaborative arrangements revenue. 3 Includes certain discounts recognized and cost of goods sold incurred by AbbVie; also includes commercial costs incurred by AbbVie and Ironwood that are attributable to the cost-sharing arrangement between the parties. 4 Commercial margin is defined as commercial profit on sales of LINZESS as a percent of total LINZESS U.S. net sales. US LINZESS Full Brand Collaboration1 Revenue/Expense Calculation (In thousands) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 LINZESS U.S. net sales as reported by AbbVie2 $ 269,686 $ 248,351 $ 519,900 $ 480,685 AbbVie & Ironwood commercial costs, expenses and other discounts3 78,998 76,363 145,406 137,379 AbbVie & Ironwood R&D Expenses4 10,356 8,214 19,006 16,380 Total net profit on sales of LINZESS $ 180,332 $ 163,774 $ 355,488 $ 326,926 1 Ironwood collaborates with AbbVie on the development and commercialization of linaclotide in North America. Under the terms of the collaboration agreement, Ironwood receives 50% of the net profits and bears 50% of the net losses from the commercial sale of LINZESS in the U.S. The purpose of this table is to present calculations of the total net profit (loss) generated from the sales of LINZESS in the U.S., including the commercial costs and expenses and the research and development expenses related to LINZESS in the U.S. that are shared equally between the parties under the collaboration agreement. 2 LINZESS net sales are recognized using AbbVie’s revenue recognition accounting policies and reporting conventions. As a result, certain rebates and discounts are classified as LINZESS U.S. commercial costs, expenses and other discounts within Ironwood’s calculation of collaborative arrangements revenue. 3 Includes certain discounts recognized and cost of goods sold incurred by AbbVie; also includes commercial costs incurred by AbbVie and Ironwood that are attributable to the cost-sharing arrangement between the parties. 4 R&D expenses related to LINZESS in the U.S. are shared equally between Ironwood and AbbVie under the collaboration agreement.

Pictured: FDA Action Alert logo/@Nicole Bean for BioSpace The FDA has four target action dates on its schedule this week, including ones in cardiomyopathy, functional constipation, myelofibrosis and Alagille syndrome. Ironwood Pushes Gut Drug to Pediatric Setting On June 14, the FDA is set to release its verdict on Ironwood Pharmaceuticals’ supplemental New Drug Application (sNDA), in which the company proposes to use Linzess (linaclotide) for the treatment of functional constipation in kids and teens aged 6–17 years. Ironwood is developing and commercializing Linzess in collaboration with AbbVie, following a 2015 agreement with Allergan. AbbVie acquired Allergan in 2019. Linzess is a guanylate cyclase-C (GC-C) agonist that works by binding to the GC-C receptor within the intestinal epithelium, which in turn increases fluid secretion, faster transit and lower pain-sensing in the intestine. The drug won the FDA’s approval in August 2012 to treat patients with chronic idiopathic constipation and irritable bowel syndrome with constipation in adults. Linzess’s label bears a boxed warning for risk of serious dehydration when used in children under two years of age. Ironwood supported Linzess’ sNDA with data from a large Phase III study assessing the drug in pediatric patients. With 330 participants, the trial found that 12 weeks of Linzess treatment led to statistically significant and clinically meaningful improvements in spontaneous bowel movement, as compared with placebo. Moreover, patients in the Linzess arm also saw better stool consistency at the 12-week follow-up. Ironwood’s drug was also safe, with the most common side effect being diarrhea. When it accepted Ironwood’s sNDA, the FDA granted Linzess Priority Review, shortening its review time by four months. Ipsen/Albireo Look to Add Rare Genetic Disease to Bylvay’s Label In February 2023, the FDA accepted an sNDA submitted by Albireo, seeking to add the rare genetic disease Alagille syndrome to Bylvay (odevixibat)’s label. The target action date is June 15. Albireo entered into an agreement in January to be acquired by Ipsen Alagille syndrome is a heritable condition characterized by the lack of bile ducts that drain the liver, leading to the accumulation of bile, which ultimately causes organ damage. The disease can also affect the heart, skeleton, eyes, kidneys and central nervous system. Common symptoms include yellow skin or eyes, stunted growth and severe pruritus. Bylvay’s Alagille bid is supported by data from the Phase III ASSERT study, a double-blinded, randomized and placebo-controlled trial that enrolled more than 50 participants across 32 trial sites in North America, the Middle East, Europe and the Asia-Pacific region. In the study’s main analysis, Bylvay significantly reduced pruritus after 6 months of treatment as compared with placebo, thereby meeting ASSERT’s primary endpoint. The drug also significantly lowered serum bile acid levels and improved sleep parameters, according to Albireo. As for safety, ASSERT found Bylvay to be well-tolerated, with a side effect pro was comparable to placebo. None of the patients dropped out due to toxicities. The FDA also granted Bylvay’s sNDA its Priority Review designation. BMS Seeks Another Indication for Camzyos The FDA will release its verdict on June 16 regarding Bristol Myers Squibb‘s sNDA proposing to use its heart drug Camzyos (mavacamten) to lower the need for septal reduction therapy (SRT) in patients with symptomatic obstructive hypertrophic cardiomyopathy (HCM). Currently, many patients suffering from HCM need to undergo SRT, Roland Chen, senior vice president and head of cardiovascular development, Global Drug Development at BMS, said in a statement upon the FDA’s acceptance of the sNDA. SRT is either an open-heart surgical procedure or a catheter-based operation. BMS supported Camzyos’ sNDA with data from the Phase III VALOR-HCM study, a randomized, double-blinded and placebo-controlled trial that enrolled 112 patients with symptomatic obstructive HCM. All participants were qualified for SRT and had been referred for the operation. VALOR-HCM’s primary endpoint was a composite between the number of patients who decided to push through with SRT by week 16 and the number of patients who remain eligible for SRT as determined by their left ventricular outflow tract (LVOT) gradient and New York Heart Association classification. Key secondary endpoints included exercise gradient LVOT and serum biomarkers after 16 weeks of treatment. Camzyos cleared all primary and secondary endpoints “with a high degree of statistical significance,” according to BMS’s announcement. GSK Awaits Approval for Myelofibrosis Hopeful The FDA’s final action date this week is for GSK’s investigational drug, momelotinib, which the company is proposing to treat myelofibrosis patients with anemia. The decision is set to be released by June 16. According to GSK, momelotinib works through a differentiated mechanism of action that involves the inhibition of three signaling pathways: the JAK1 and JAK2 cascades, as well as the activin receptor type I (ACVR1) pathway. By disrupting JAK1 and JAK2 signaling, momelotinib induces improvements in patient constitution and symptoms of splenomegaly. Meanwhile, its ACVR1 activity could decrease levels of hepcidin, which contribute to anemia in myelofibrosis. Data from the pivotal Phase III MOMENTUM trial supported momelotinib’s FDA bid. In December 2022, GSK reported 48-week results from MOMENTUM at the 64th American Society of Hematology (ASH) Annual Meeting. Momelotinib achieved its primary efficacy endpoint of an at-least 50% reduction in Total Symptom Score after 24 weeks. GSK’s myelofibrosis candidate also met key secondary endpoints including transfusion independence and splenic response rate, both likewise measured at 24 weeks. MOMENTUM is a randomized and double-blinded clinical trial that randomized nearly 200 patients, at a 2:1 ratio, to receive either momelotinib or danazol, a common treatment used in myelofibrosis. At 24 weeks, patients on danazol were allowed to switch to momelotinib. Tristan Manalac is an independent science writer based in metro Manila, Philippines. He can be reached at tristan@tristanmanalac.com or tristan.manalac@biospace.com