8-K
Ironwood Pharmaceuticals Inc (IRWD)
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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
Current Report
Pursuant to
Section 13 or
15(d) of the
Securities Exchange
Act of 1934
Date
of Report (Date of Earliest Event Reported):
January 10, 2022
IRONWOOD PHARMACEUTICALS, INC.
(Exact name of registrant as specifiedin its charter)
| Delaware | 001-34620 | 04-3404176 |
|---|---|---|
| (State or other jurisdiction | (I.R.S. Employer | |
| of incorporation) | (Commission File Number) | Identification Number) |
| 100 Summer Street, Suite 2300 | ||
| --- | --- | |
| Boston, Massachusetts | 02110 | |
| (Address of principal | ||
| executive offices) | (Zip code) |
(617) 621-7722
(Registrant’s telephone number,
including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under<br>the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under<br>the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under<br>the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under<br>the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which<br><br> registered |
|---|---|---|
| Class<br> A common stock, $0.001 par value | IRWD | Nasdaq<br> Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 Results of Operations andFinancial Condition.
On January 10, 2022, Ironwood Pharmaceuticals, Inc. (the “Company”) issued a press release (the “Press Release”) containing an update on its recent business activities.
In addition, beginning on January 10, 2022, the Company intends to use the presentation (the “Corporate Presentation”) furnished herewith, or portions thereof, which provides updates on the Company’s business activities, in one or more meetings with or presentations to investors.
The Press Release and Corporate Presentation contain information regarding certain of the Company’s results of operations for 2021. Copies of the Press Release and Corporate Presentation are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.
The Press Release and Corporate Presentation are being furnished pursuant to Item 2.02 of this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall such document be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements andExhibits.
| (d) | Exhibits. |
|---|---|
| Exhibit No. | Description |
| --- | --- |
| 99.1 | Ironwood Pharmaceuticals, Inc. Press Release dated January 10, 2022 |
| 99.2 | Corporate Presentation |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Ironwood Pharmaceuticals, Inc. | ||
|---|---|---|
| Dated: January 10, 2022 | By: | /s/ Sravan K. Emany |
| Name: Sravan K. Emany | ||
| Title: Senior Vice President, Chief Financial Officer |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Ironwood Pharmaceuticals Provides Update onFY 2021 Financial Guidance and Announces FY 2022 Financial Guidance
–LINZESS Expected to Achieve Blockbuster Status with U.S. Net Sales in Excess of $1 Billion in 2021 –
– Initiates Board AuthorizedShare Repurchase Program in Q4 2021 –
– ExpectsContinued Double-Digit LINZESS® Prescription Demand Growth in 2022 –
BOSTON, Mass., January 10, 2022 — Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD), a GI-focused healthcare company, today provided updated financial guidance for full year 2021 and announced financial guidance for full year 2022. The results were announced in advance of the Company’s presentation at the 40th Annual J.P. Morgan Healthcare Conference, which will take place on Wednesday, January 12, 2022 at 7:30 a.m. ET.
“Among the key highlights of 2021 was the progress we made across our three strategic priorities which strengthened our organization and delivered strong operational performance,” said Tom McCourt, chief executive officer of Ironwood. “We expect to report solid financial results in 2021 and deliver our third consecutive year of profits. Notably, we expect LINZESS to exceed $1 billion in U.S. net sales reaching blockbuster status, a significant accomplishment for Ironwood. Additional highlights include advanced innovation through our expanded pipeline and development programs, and the initiation of a share repurchase program of up to $150 million through December 2022.”
“Looking ahead in 2022, we remain committed to further advancing our strategic priorities, unlocking new opportunities for LINZESS and strengthening our pipeline with innovative GI assets. We expect continued double-digit LINZESS prescription demand growth, further reinforcing its position as the #1 prescribed brand in the U.S. for the treatment of adults with IBS-C or chronic idiopathic constipation. For 2022, we have also refined our mix of brand investment and class-leading payer access, which we expect to result in low single digit LINZESS net sales growth, and we expect to deliver strong brand margins. At the same time, we expect adjusted EBITDA growth well in excess of Ironwood revenue growth in 2022. Overall, we believe we remain well positioned for long term growth and are focused on delivering patient benefit and shareholder value.”
Updated Full Year 2021 Financial Guidance^1^
Ironwood expects LINZESS U.S. net sales to exceed $1 billion in 2021^2^, with LINZESS U.S. net sales growth, total Ironwood revenues, and Ironwood adjusted EBITDA to be at the high end of our previously disclosed guidance ranges for full year 2021. The table below summarizes Ironwood’s revised full year 2021 guidance.
Ironwood now expects:
| Previous 2021 Guidance<br> <br>(November 2021) | Updated 2021 Guidance^1^ | |
|---|---|---|
| LINZESS U.S. net sales growth | 6% - 8% | High end of 6% - 8% |
| Total revenue | $390 - $410 million | High end of $390 – $410 million |
| Adjusted EBITDA^3^ | >$210 million | >$230 million |
Update on Board Authorized Share RepurchaseProgram
Ironwood repurchased $27 million of shares of the Company’s common stock in the fourth quarter of 2021 under its board authorized share repurchase program of up to $150 million through December 31, 2022.
Full Year 2022 Financial Guidance
For full year 2022, Ironwood expects LINZESS U.S. net sales growth to be in the low single digits, total revenues to be between $420 million and $430 million and adjusted EBITDA^3^ to be greater than $250 million. The table below summarizes Ironwood’s full year 2022 guidance outlined above.
^1^ Guidance based on unaudited, preliminary and estimated amounts and may change as we receive final 2021 data and complete the preparation of our 2021 financial statements.
^2^ 2021 LINZESS U.S. net sales is unaudited, preliminary and based on estimates, and may change as we receive final 2021 data from AbbVie Inc. and as we and AbbVie complete the preparation of our respective 2021 financial statements. LINZESS U.S. net sales are reported by AbbVie and LINZESS costs incurred by each of us and AbbVie are reported in our respective financial statements.
^3^Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to our 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization, from GAAP net income. For purposes of this guidance, we have assumed that Ironwood will not incur material expenses related to business development activities in 2022. 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.
In 2022, Ironwood expects:
| 2022 Guidance | |
|---|---|
| LINZESS U.S. net sales growth | Low single digits |
| Total revenue | $420 - $430 million |
| Adjusted EBITDA^3^ | >$250 million |
J.P. Morgan Healthcare Conference Presentationand Webcast Details
As previously announced, Ironwood will present a corporate overview at the 40th Annual J.P. Morgan Healthcare Conference on Wednesday, January 12, 2022 at 7:30 a.m. ET. The event is being held virtually and a live audio webcast of Ironwood’s presentation is accessible through the Investors section of the Company’s website at www.ironwoodpharma.com. To access the webcast, please log on to the Ironwood website approximately 15 minutes prior to the start time to ensure adequate time for any software downloads that may be required. A replay of the webcast will be available on Ironwood’s website for 14 days following the conference.
About Ironwood Pharmaceuticals
Ironwood Pharmaceuticals (Nasdaq: IRWD) 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). Under the guidance of our seasoned industry leaders, we continue to build upon our history of GI innovation and challenge what has been done before to shape what the future holds. 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.
We routinely post information that may be important to investors on our website at www.ironwoodpharma.com. 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. 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. LINZESS should be taken at least 30 minutes before the first meal of the day.
LINZESS is contraindicated in pediatric patients less than 2 years of age. In neonatal mice, linaclotide increased fluid secretion as a consequence of age-dependent elevated GC-C agonism resulting in 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. The safety and effectiveness of LINZESS in patients less than 18 years of age have not been established.
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 in adults for the treatment of both irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC).
IMPORTANT SAFETY INFORMATION
| WARNING: RISK OF SERIOUS DEHYDRATION IN PEDIATRIC PATIENTS LESS THAN 2 YEARS OF AGE<br><br> <br>****<br><br> <br>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. |
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Contraindications
| · | LINZESS is contraindicated in patients less than 2 years of age due to the<br>risk of serious dehydration. |
|---|---|
| · | LINZESS is contraindicated in patients with known or suspected mechanical<br>gastrointestinal obstruction. |
| --- | --- |
Warnings and Precautions
Pediatric Risk
| · | LINZESS is contraindicated in patients less than<br>2 years of age. In neonatal mice, linaclotide increased fluid secretion as a consequence of age-dependent elevated GC-C agonism resulting<br>in mortality within the first 24 hours due to dehydration. There was no age-dependent trend in GC-C intestinal expression in a clinical<br>study of children 2 to less than 18 years of age; however, there are insufficient data available on GC-C intestinal expression in children<br>less than 2 years of age to assess the risk of developing diarrhea and its potentially serious consequences in these patients. The safety<br>and effectiveness of LINZESS in patients less than 18 years of age have not been established. |
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Diarrhea
| · | Diarrhea was the most common adverse reaction in LINZESS-treated patients<br>in the pooled IBS-C and CIC double-blind placebo-controlled trials. The incidence of diarrhea was similar in the IBS-C and CIC<br>populations. Severe diarrhea was reported in 2% of 145 mcg and 290 mcg LINZESS-treated patients, and in <1% of 72 mcg LINZESS-treated<br>CIC patients. If severe diarrhea occurs, dosing should be suspended and the patient rehydrated. |
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Common Adverse Reactions (incidence ≥2% and greater than placebo)
| · | In IBS-C clinical trials: diarrhea (20% vs 3% placebo), abdominal pain (7%<br>vs 5%), flatulence (4% vs 2%), headache (4% vs 3%), viral gastroenteritis (3% vs 1%) and abdominal distension (2% vs 1%). |
|---|---|
| · | In CIC trials of a 145 mcg dose: diarrhea (16% vs 5% placebo), abdominal<br>pain (7% vs 6%), flatulence (6% vs 5%), upper respiratory tract infection (5% vs 4%), sinusitis (3% vs 2%) and abdominal distension (3%<br>vs 2%). In a CIC trial of a 72 mcg dose: diarrhea (19% vs 7% placebo) and abdominal distension (2% vs <1%). |
| --- | --- |
Please see full Prescribing Information including Boxed Warning: http://www.allergan.com/assets/pdf/linzess_pi
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; the Ironwood’s ability to drive growth and profitability; the demand, development, commercial availability and commercial potential of linaclotide and the drivers, timing, impact and results thereof; the potential indications for, and benefits of, linaclotide; and our financial performance and results, and guidance and expectations related thereto, including expectations related to LINZESS prescription demand growth and brand margins, LINZESS U.S. net sales growth, total revenue and adjusted EBITDA in 2021 and 2022; and the potential of unlocking new opportunities for LINZESS and strengthening Ironwood’s pipeline with innovative GI assets. 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, CNP-104, and our product candidates; the risk that clinical programs and studies 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 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; 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, and in our subsequent Securities and Exchange Commission (the “SEC”) filings.
Investors:
Matt Roache, 617-621-8395
mroache@ironwoodpharma.com
Media:
Beth Calitri, 978-417-2031
bcalitri@ironwoodpharma.com
Exhibit 99.2
| Leading in GI through<br>Growth and Innovation<br>J.P. Morgan<br>Healthcare Conference<br>January 12, 2022<br>PRESENTED BY<br>Tom McCourt, CEO<br>Ironwood Pharmaceuticals<br>Exhibit 99.1 |
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| Safe Harbor Statement<br>2<br>This presentation contains forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about our ability to execute on our<br>vision and mission; our strategy, business, financial position and operations, including with respect to maximizing LINZESS® (linaclotide), strengthening an innovative GI pipeline and delivering sustained<br>profits and generating cash flow; the demand, development, commercial availability and commercial potential of linaclotide and the drivers, timing, impact and results thereof; the potential indications for,<br>and benefits of, linaclotide and our ability to drive LINZESS growth; our ability to successfully execute and the value-creation potential of our strategic priorities, including our efforts to drive LINZESS growth<br>in demand and net sales, enhance linaclotide clinical utility through robust lifecycle management opportunities, advance treatments for serious, organic GI diseases and other prioritized criteria focused on<br>value creation, deliver sustained profits and generate cash flow, and apply thoughtful and disciplined capital allocation decisions; our option to acquire an exclusive license to develop and commercialize<br>CNP-104 in the U.S.; the timing of initiating a PoC to evaluate the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients; the timing, achievement and payment of certain<br>milestones and royalties under our agreement with COUR; the opportunity for COUR’s nanoparticle delivery platform to treat PBC and potentially eliminate the immune cell bile duct destruction present in<br>PBC; the potential for CNP-104 to transform the treatment of PBC in the U.S.; the strength of the Company’s balance sheet and the Company’s ability to return cash to shareholders, including the potential<br>that we return capital to shareholders via a share repurchase program; the potential of IW-3300 to be an effective treatment of visceral pain conditions and the size of the IC/BPS and endometriosis<br>populations, as well as our plans to advance IW-3300 into clinical development (including the timing and results thereof); the status of our development program to investigate the safety and efficacy of<br>LINZESS for children; expectations regarding our global collaborations; and our financial performance and results, and guidance and expectations related thereto, including, without limitation, expectations<br>related to LINZESS U.S. net sales growth, Ironwood revenue and adjusted EBITDA in 2021 and 2022, as well as expected cash and cash equivalents in 2021, EUTRx and Rx demand growth and brand<br>margins in 2022, and price erosion in 2022 and 2023. These forward-looking statements speak only as of the date of this presentation, and Ironwood undertakes no obligation to update these forward-<br>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<br>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<br>development of linaclotide, CNP-104 and our product candidates; the risk that clinical programs and studies may not progress or develop as anticipated, including that studies are delayed or discontinued<br>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<br>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<br>manufacturing; the efficacy, safety and tolerability of linaclotide and our product candidates; the risk that the therapeutic opportunities for LINZESS or our product candidates are not as we expect; decisions<br>by regulatory and judicial authorities; the risk we may never get additional patent protection for linaclotide and other product candidates; the risk that we may never get sufficient patent protection for<br>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<br>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; the risk that we may elect to not exercise our<br>option to acquire the exclusive license for CNP-104; the risk that the development of either CNP-104 and/or IW-3300 is not successful or that any of our product candidates is not successfully<br>commercialized; the risk that the clinical trial for CNP-104 is delayed or not initiated by COUR; outcomes in legal proceedings to protect or enforce the patents relating to our products and product<br>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<br>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;<br>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<br>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 Quarterly Report on Form 10-Q for the<br>quarter ended September 30, 2021, and in our subsequent SEC filings.<br>Ironwood uses non-GAAP financial measures in this presentation, which should be considered only a supplement to, and not a substitute for or superior to, GAAP measures. Refer to the Reconciliation of<br>Non-GAAP Financial Measures to GAAP Results table and to the Reconciliation of Adjusted EBITDA to GAAP net income table and related footnotes on pages 25 and 26 of this presentation. Further,<br>Ironwood considers the net profit for the U.S. LINZESS brand collaboration with AbbVie in assessing the product’s performance and calculates it based on inputs from both Ironwood and AbbVie. This<br>figure should not be considered a substitute for Ironwood’s GAAP financial results. An explanation of our calculation of this figure is provided in the U.S. LINZESS Brand Collaboration table and related<br>footnotes on page 27 of this presentation.<br>LINZESS® is a registered trademark of Ironwood Pharmaceuticals, Inc. Any other trademarks referred to in this presentation are the property of their respective owners. All rights reserved. |
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| Our Vision is to be the Leading U.S. GI Healthcare Company<br>Ironwood Pharmaceuticals: (Nasdaq: IRWD)<br>Emerging as a Leader in GI<br>3 1 IQVIA Monthly National Prescription Audit November 2021.<br>Blockbuster Brand That is<br>Still Growing<br>Strengthening Innovative Pipeline<br>for the Future<br> FDA approved in the U.S. in 2012 as first-in-<br>class GC-C agonist for adults with IBS-C or<br>CIC<br>Highly-skilled clinical and commercial<br>organization built LINZESS to become the<br>U.S. branded prescription market leader for<br>IBS-C and CIC1<br>Settled with the filers of all known ANDAs to<br>date, with the earliest licensed entry of any<br>generic linaclotide in the U.S. is March 2029<br>Focus on serious, organic GI diseases and<br>other prioritized criteria focused on value<br>creation<br> Pipeline currently includes assets for the<br>potential treatment of primary biliary<br>cholangitis, visceral pain conditions and<br>functional constipation & IBS-C in pediatric<br>population<br> Clear therapeutic focus and pipeline<br>development strategy; experienced<br>corporate development team<br>Structured for Growth<br>and Sustained Profitability<br>Ironwood became a profitable, GI-focused<br>healthcare company following spin-out of<br>sGC business in 2019<br>Additional restructuring in 2020 designed to<br>enhance profitability; strengthened<br>management team in 2021<br>Thoughtful and disciplined capital allocation<br>decisions |
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| Strengthen<br>Innovative<br>GI Pipeline<br>Maximize<br>LINZESS®<br>(linaclotide)<br>Deliver<br>Sustained Profits and<br>Generate Cash Flow<br>2021: We Executed Against Our Three Strategic Priorities<br>4<br>Continue to grow LINZESS demand<br>and net sales<br>Focus on serious, organic GI diseases<br>with high unmet patient need<br>Apply thoughtful and disciplined capital<br>allocation decisions<br>Expect to exceed ~$1B U.S. LINZESS net<br>sales in 2021, up ~8% Y/Y1<br>Expect LINZESS EUTRx demand up<br>~12% Y/Y in 20212<br>74% commercial margin in Q3 2021<br>CNP-104: Entered into collaboration and<br>license option agreement with COUR<br>Pharmaceuticals<br>IW-3300: Progressed evaluation for<br>potential treatment of visceral pain conditions<br>Pediatrics: Advanced linaclotide<br>pediatrics development program<br>GAAP Net Income of $56M in Q3 2021<br>Expect to end 2021 with >$600M in cash<br>and cash equivalents3<br>Board authorized share repurchase program<br>of up to $150M through Dec. 2022;<br>$27M of shares repurchased as of<br>December 31, 2021<br>1 2021 LINZESS U.S. net sales is unaudited, preliminary and based on estimates, and may change as we receive final 2021 data from AbbVie Inc. and as we and AbbVie complete the preparation of our<br>respective 2021 financial statements. LINZESS U.S. net sales are reported by AbbVie and LINZESS costs incurred by each of us and AbbVie are reported in our respective financial statements. 2 IIQVIA<br>NPA 3 2021 Cash and Cash Equivalents is unaudited, preliminary and based on estimates and may change as we receive final 2021 data and complete the preparation of our 2021 financial statements. |
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| Our Leadership Team is Ready to Usher in a New Era of<br>Growth and Innovation<br>5<br>SRAVAN EMANY<br>Chief Financial Officer<br>JOHN MINARDO<br>Chief Legal Officer<br>ANDREW DAVIS<br>Chief Business Officer<br>TOM MCCOURT<br>Chief Executive Officer<br>MIKE SHETZLINE<br>Chief Medical Officer and Head of<br>Research and Development<br>JASON RICKARD<br>Chief Operating Officer |
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| LINZESS is the #1 Prescribed Branded Treatment in the U.S. for<br>Adult IBS-C / CIC Patients with Continued Growth Opportunities<br>6 6<br>40M Potential<br>Patients<br>Adult CIC and IBS-C population in<br>the U.S.3<br>~3.5M Unique Patients<br>Since Launch on LINZESS4<br>Significant<br>opportunity to<br>reach new<br>patients<br>Payer Access<br>Class-Leading Payer Access<br>Patient Activation<br>Optimize Marketing Mix<br>Life-Cycle<br>Planned Future LCM<br>Opportunities<br>IRWD GE2 Focus<br>Refined Professional<br>Promotion<br>We expect to grow<br>LINZESS demand through:<br>LINZESS Extended Unit Growth1<br>EUTRx<br>Volume<br>1,700,000<br>1,900,000<br>2,100,000<br>2,300,000<br>2,500,000<br>2,700,000<br>2,900,000<br>3,100,000<br>3,300,000<br>3,500,000<br>1 IQVIA NPA Week Ending 12/3/21. 2 Gastroenterologist. 3 Lieberman GI Patient Landscape survey, 2010; U.S. Census data. 4 IQVIA Total Patient Tracker October 2021. |
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| ~$350M1<br>Ironwood’s share of<br>expected 2021 U.S.<br>LINZESS profits<br>50/50<br>profit share<br>In 2022, we expect to:<br>~$7001<br>-$400<br>-$200<br>$0<br>$200<br>$400<br>$600<br>$800<br>$1,000<br>$1,200<br>2013 2014 2015 2016 2017 2018 2019 2020 2021<br>LINZESS brand profitability (incl. R&D)<br>LINZESS U.S. net sales<br>7<br>LINZESS Demand is Increasing and Fueling U.S. Net Sales<br>~$1B1<br>(in millions)<br>Drive continued double-digit % Rx<br>demand growth<br>Refine mix of brand investment and<br>class-leading payer access<br>Experience high single digit price<br>erosion in 2022, but anticipate 2023<br>price erosion to be more modest<br>Deliver strong brand margins<br>1 2021 total revenue, LINZESS U.S. net sales and brand profitability and Ironwood’s share of 2021 U.S. LINZESS profits) are unaudited, preliminary and based on estimates, and may change as we<br>receive final 2021 data from AbbVie, Inc. and as we and AbbVie complete the preparation of our respective 2021 financial statements. In connection with its acquisition of Allergan, AbbVie recast LINZESS<br>U.S. net sales (previously reported by Allergan) for periods beginning on January 1, 2019 to conform with its revenue recognition accounting policies and reporting conventions for certain rebates and<br>discounts. LINZESS U.S. net sales are reported by AbbVie and LINZESS costs incurred by each of us and AbbVie are reported in our respective financial statements. LINZESS costs include cost of goods<br>sold incurred by AbbVie and selling, general and administrative expenses and research and development expenses incurred by AbbVie and Ironwood that are attributable to the cost-sharing arrangement<br>between the parties. See slide 26 for detailed breakdown. |
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| PBC affects an estimated 133,000<br>people in the U.S.2<br>Received FDA Fast Track<br>Designation<br>Clinical study initiation imminent with<br>readout estimated in 2023<br>Interstitial Cystitis / Bladder Pain<br>Syndrome is a large and growing<br>patient population that affects an<br>estimated 4-12 million people in the<br>U.S.3<br>IND accepted by FDA<br>Clinical study is expected to be<br>initiated in Q1 2022<br>We Are Unlocking New Opportunities for the Future of<br>LINZESS (linaclotide) and Strengthening Our Pipeline<br>FUTURE<br>FORWARD<br>Primary Biliary Cholangitis (PBC)<br>CNP-104 IW-3300<br>Advancing pediatric program in IBS-C & Functional<br>Constipation (FC)<br>Interstitial Cystitis / Bladder Pain Syndrome<br>8<br>Linaclotide Lifecycle Management Development Assets<br>1 U.S. Census; Loening-Baucke, V. "Prevalence, Symptoms and Outcome of Constipation in Infants and Toddlers", The Journal of Pediatrics, March 2005; Van der Berg, M.M., et al, “Epidemiology of<br>Childhood Constipation”, Am J of Gastro, Vol. 101, p2401, 2006. 2 Kim et al., Epidemiology and Natural History of Primary Biliary Cirrhosis in a U.S. Community, Gastroenterology July 2000; 199:1631-<br>1636. 3 Interstitial Cystitis Association, February 2016.<br>FC affects an estimated 4-6 million<br>6-17 year-olds in the U.S.1<br>FDA revisions to label relating to<br>pediatric safety profile<br>Currently no FDA approved prescribed<br>pediatric therapies for IBS-C and FC |
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| In assessing any new potential asset, we seek to:<br>9<br>Our Corporate Development Priorities: Deliver Patient Benefit<br>and Shareholder Value<br>Prioritize diseases<br>that are primarily<br>managed by<br>gastroenterologists<br>Target innovation,<br>via first-in-class<br>or differentiated<br>opportunities<br>Explore innovative,<br>earlier-stage clinical<br>assets and late-stage<br>/ commercial assets<br>Maintain our ability to<br>deliver profits and<br>generate cash<br>1 Focus on organic<br>GI diseases, where<br>mechanisms are<br>well understood<br>2 3<br>4 5 |
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| 10<br>We Are Prioritizing Serious, Organic GI Diseases Primarily<br>Managed by Gastroenterologists<br>Abdominal<br>Pain Pruritis Celiac Disease Liver Injury /<br>Failure<br>Pancreatitis Esophageal /<br>Allergic<br>Gut<br>Inflammation<br>Rare GI<br>Diseases |
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| We Are Updating FY 2021 Financial Guidance and Providing<br>FY 2022 Guidance<br>11<br>Previous 2021<br>Guidance (Nov 2021)<br>Updated 2021<br>Guidance2 2022 Guidance<br>LINZESS U.S. net<br>sales growth 6% to 8% High end of 6% to 8% Low single digits %<br>Ironwood revenue $390 – $410 million High end of $390 – $410 million $420 – $430 million<br>Adjusted EBITDA1 >$210 million >$230 million >$250 million<br>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,<br>depreciation and amortization from GAAP net income. For purposes of this guidance, we have assumed that the Company will not incur material expenses related to business development activities in<br>2022. 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<br>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<br>net income for the guidance period. 2 Guidance based on unaudited, preliminary and estimated amounts and may change as we receive final 2021 data and complete the preparation of our 2021<br>financial statements.<br>Ironwood now expects: |
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| Ironwood is Leading in GI through Growth and Innovation<br>12<br>FUURE<br>FORWARD<br>Leading position in the IBS-C / CIC market expected to<br>exceed $1 billion in 2021 LINZESS U.S. net sales, with<br>continued strong prescription demand growth potential1<br>Highly capable commercial team with deep GI experience<br>across the U.S. with leading GI specialists and PCPs<br>Actively pursuing opportunities to strengthen innovative<br>pipeline of GI assets in areas of high unmet need<br>Exploring linaclotide Lifecycle Management opportunities in<br>order to enhance future value potential<br>Strong balance sheet and cash flows enables disciplined<br>capital allocation to reach new patients and to deliver value to<br>shareholders<br>Accomplished management team with strong GI commercial,<br>drug development and M&A expertise<br>1 2021 LINZESS U.S. net sales is unaudited, preliminary and based on estimates, and may change as we receive final 2021 data from AbbVie Inc. and as we and AbbVie complete the preparation of<br>our respective 2021 financial statements. LINZESS U.S. net sales are reported by AbbVie and LINZESS costs incurred by each of us and AbbVie are reported in our respective financial statements.<br>Maximize LINZESS<br>Strengthen Innovative GI Pipeline<br>+<br>+<br>Deliver Sustained Profits and<br>Generate Cash Flow<br>Our Strategy: |
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| Appendix |
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| Japan<br>Rest of world<br>China (incl. Hong Kong & Macau)<br> • LINZESS launched in Japan for<br>IBS-C in March 2017 and chronic<br>constipation in August 2018<br> • LINZESS net sales for six months<br>ended 9/30/21 (as reported by<br>Astellas) were ~¥3.5B, up 12% Y/Y<br> • Astellas has exclusive rights to<br>develop, manufacture &<br>commercialize<br> • IRWD eligible for royalties beginning in<br>the mid single-digits escalating up to<br>low double-digit %, based on annual<br>net sales in Japan<br> • LINZESS launched in China in<br>November 2019<br> • Chinese National Healthcare Security<br>Administration (NHSA) included<br>LINZESS in 2021 reimbursement list<br> • Expect modest ramp-up in 2022<br> • AstraZeneca has exclusive rights to<br>develop, manufacture, & commercialize<br> • IRWD eligible for up to $90M in sales-<br>based milestones and royalties starting in<br>mid single digits escalating up to 20%,<br>based on annual net sales in China<br>(including Hong Kong and Macau)<br>Global Linaclotide Partnerships Designed to Enable Access<br>Worldwide<br>14 |
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| LINZESS Achieved All-Time Highs in TRx Volume and Market<br>Share in 2021<br>15<br>LINZESS TRx Volume1<br>1 IQVIA NPA Week Ending December 3, 2021.<br>LINZESS TRx Market Share – All-Time High1<br>0%<br>5%<br>10%<br>15%<br>20%<br>25%<br>30%<br>35%<br>40%<br>45%<br>50%<br>LINZESS<br>All-Time High (43%)<br>Lactulose<br>Molecule (41%)<br>Total AMITIZA (9%)<br>Trulance (4%)<br>Montegrity (2%)<br>Zelnorm (0%)<br>Volume<br>TRx<br>Market Share<br> 50,000<br> 55,000<br> 60,000<br> 65,000<br> 70,000<br> 75,000<br> 80,000<br>2021 2020 2019 |
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| 39.5<br>40.0<br>40.5<br>41.0<br>41.5<br>42.0<br>42.5<br>43.0<br>Average<br>TRx<br>Fill Size<br>1 IQVIA Weekly Patient Insights Week Ended December 3, 2021. 2 IQVIA Weekly NPA Week Ending December 3, 2021. 3 IQVIA Quantity Frequency October 2021.<br>LINZESS NBRx Volume Growth1<br>16<br>LINZESS 90-Day Prescription ~20%2<br> 380,000<br> 400,000<br> 420,000<br> 440,000<br> 460,000<br> 480,000<br> 500,000<br>YTD 2019 YTD 2020 YTD 2021<br>NBRx Volume<br>~16% y/y<br>10.0%<br>12.0%<br>14.0%<br>16.0%<br>18.0%<br>20.0%<br>% 90 Quantity<br>YTD October<br>Percent 90 Count Quantity3<br>2018 2019 2020 2021<br>Strong LINZESS New-to-brand Volume and 90-Day<br>Prescriptions Are Key Indicators of Future Growth Potential |
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| The Natural History of Primary Biliary Cholangitis<br>17<br>Symptomatic Preterminal Asymptomatic Preclinical or<br>Silent<br>Up to 20 years<br>*30-50% asymptomatic after<br>5 years<br>2 years<br>Approx. 10 years<br>6-10 years<br>AMA + ALP +/-GGT Fatigue<br>Pruritus<br>Abdominal pain<br>Portal hypertension<br>Variceal bleeding<br>Jaundice<br>Liver<br>Failure<br>Hunter Chascsa DM, Lindor KD. J Gastroenterol 2019.<br>PBC is a chronic inflammatory autoimmune cholestatic liver disease, which when untreated will<br>culminate in end-stage biliary cirrhosis. Current available therapies can slow disease progression<br>but are not curative.<br>Ascites<br>Encephalopathy |
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| CNP-104 is Supported by Established Research and Data<br>Regarding (1) the Nanoparticle Delivery Platform and (2) the<br>PDC-E2 Antigen<br>18<br> • COUR’s platform has shown proof of technology in clinical and<br>preclinical settings further demonstrating the opportunity for the<br>platform to treat PBC<br> • Well-understood MOA and nanoparticle platform<br> • Each platform program consists of antigen(s) (each targeted specifically<br>to the disease/indication) encapsulated within biodegradable<br>nanoparticles<br> • The nanoparticles effectively reprogram antigen presenting cells (APCs)<br>to become ‘pro-tolerogenic’ triggering peripheral tolerance mechanisms<br>while avoiding immune activation<br>Nanoparticle Platform PDC-E2 Antigen<br> • Well-characterized and common PBC autoantigen: PDC-E2 protein<br> • >95% of patients with PBC1<br> • PDC-E2 is the immunodominant autoantigen of PBC2<br> • T cell dependent autoimmune mechanisms drive PBC disease<br>pathology<br> • PBC pathology driven by autoimmunity to PDC-E2 protein2<br> • CD4+T cells, CD8+T cells, and autoreactive B cells, collectively form an<br>orchestrated autoimmune effector response that leads to the<br>pathogenesis of PBC<br> • The T cell and the autoantibody responses have been largely<br>determined to be directed against PDC-E2<br>Proprietary PLGA nanoparticle<br>with PDC-E2 encapsulated<br>COUR’s proprietary platform combines PDC-E2 with state-of-the-art pharmaceutical nanoparticles to tolerize the immune system and<br>potentially eliminate the immune cell bile duct destruction present in PBC.<br>1 NEJM 2005(353)1261-1273; Hepatology 1999(29)271–6<br>2 J Immunol 1987(138)3525-3531; Journal of Hepatology 2003(39) 639–648 |
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| • Strong pre-clinical data: Stable peptide expected to provide great flexibility in<br>formulation<br> – IW-3300 also demonstrated pain relief in bladder pre-clinical hypersensitivity<br>model<br> – IW-3300 reversed endometriosis-induced vaginal hypersensitivity in a pre-<br>clinical vaginal distension model<br> • Very high unmet need in Interstitial Cystitis / Bladder Pain Syndrome<br>and in Endometriosis<br> – Limited number of treatment options available<br> – Patients surveyed report experiencing a low QoL and many reported<br>experiencing reduced productivity<br> • Strong pre-clinical evidence combined with sound scientific &<br>commercial rationale supports POC study to explore potential impact<br>of IW-3300 on chronic visceral pain outside of GI tract<br>Our wholly-owned IW-3300 is Entering Phase I development<br>for potential treatment of visceral pain conditions<br>19<br>Target indications are strategically linked to GC-C mechanism, designed to address a<br>significant medical need and have a defined path to POC<br>Opportunity to test the “cross-talk” hypothesis in humans for the first time |
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| KEY<br>Sham (“normal response)<br>Baseline (ENDO pre-treat.)<br>Vehicle<br>IW-3300, 1 µg/kg<br>IW-3300, 3 µg/kg<br>IW-3300, 10 µg/kg<br><br><br><br><br><br><br><br><br><br><br><br><br>0<br>5<br>10<br>15<br>von Frey Vaginal Withdrawal Threshold (g)<br>Sham Endo V 1 3 10<br>IW-3300<br>(µg/kg/day)<br>V 1 3 10<br>IW-3300<br>(µg/kg/day)<br>V 1 3 10<br>IW-3300<br>(µg/kg/day)<br>Day 1 Day 5 Day 13<br>Mean ± SEM; N = 8 per group<br>20<br>In Pre-clinical Model, IW-3300 Reversed Endometriosis-induced<br>Vaginal Hypersensitivity<br>Key |
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| IW-3300 Demonstrated Pain Relief In Pre-Clinical Model of<br>Bladder Hypersensitivity<br>0<br>1<br>2<br>3<br>4<br>5<br>6<br>7<br>0.16 0.4 1 2 4 8 15<br>Sham+vehicle (n=2)<br>Sham+IW3300 (n=3)<br>40Gy+vehicle (n=4)<br>40Gy+IW3300 (n=5)<br>IW-3300 (3 µg/kg/day) reversed radiation-induced chronic bladder hypersensitivity,<br>consistently reducing the number of withdrawal responses with increased forces<br>Calibrated Forces (g)<br>*p<0.05, **p<0.01, ***p<0.001 vs. Sham + Vehicle; RM 2-Way ANOVA with Bonferroni post-hoc test<br>#p<0.05, ##p<0.01, ###p<0.001 vs. 48 Gy + Vehicle; RM 2-Way ANOVA with Bonferroni post-hoc test<br>Study Method<br> • Pre-clinical model treated with 8 fractionated radiation doses of 6 Gy (48 Gy<br>total) to create hypersensitivity of the bladder<br> • IW-3300 (3 ug/kg/day) or vehicle were administered intra-colonically once<br>daily on days 56-72 after radiation<br> • Bladder sensitivity was assessed on Days 42,56, 72 via application of von<br>Frey filaments applied to the suprapubic area<br> • The frequency of withdrawal responses to individual von Frey filaments with<br>increasing calibrated forces of 0.16, 0.4, 1, 2, 4, 8, and 15 g was recorded.<br>Hypersensitive pre-clinical model<br>Average number of withdrawal responses<br>***<br>** *<br>*<br>*<br>*<br>*<br>###<br>##<br>#<br>#<br>21 |
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| $56M<br>GAAP Net Income<br>$0.34/share – basic and diluted<br>$65M<br>Adjusted EBITDA2<br>$104M<br>Total Revenue<br>Primarily driven by $100M in U.S. LINZESS<br>collaboration revenue<br>$253M<br>U.S. LINZESS Net Sales1<br>5% Y/Y growth<br>Primarily driven by 12% Y/Y prescription demand<br>growth partially offset by net price and inventory<br>channel fluctuations<br>LINZESS commercial margin: 74%1<br>22<br>1 LINZESS U.S. net sales are reported by AbbVie and LINZESS costs incurred by each of us and AbbVie are reported in our respective financial statements. LINZESS costs include certain<br>discounts recognized and cost of goods sold incurred by AbbVie, as well as selling, general and administrative expenses incurred by AbbVie and Ironwood that are attributable to the cost-<br>sharing arrangement between the parties. See slide 27 for detailed breakdown. 2 Refer to the Reconciliation of GAAP net income to adjusted EBITDA on slide 26 of this presentation.<br>We Reported Robust Financial Performance in Q3 2021 |
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| 23<br>Execution and disciplined investments are leading to a strong<br>cash balance that we believe will support future growth<br>$177<br>$363<br>Expect<br> >$600<br>$0<br>$100<br>$200<br>$300<br>$400<br>$500<br>$600<br>$700<br>2019 2020 2021<br>(millions)<br>Cash and Cash Equivalents2<br>1 Collaborative Arrangement Revenues for 2021 are unaudited, preliminary and based on estimates and may change as we receive final 2021 data and complete the preparation of our<br>2021 financial statements; Collaborative arrangement revenues are a subset of total revenue and exclude sale of Linaclotide API to global partners. 2 2021 Cash and Cash Equivalents is<br>unaudited, preliminary and based on estimates and may change as we receive final 2021 data and complete the preparation of our 2021 financial statements. 3 2021 expected<br>Collaborative Arrangement Revenue assumes Ironwood ends 2021 with Total Revenue at the high-end of $390 - $410 million revenue guidance.<br>$380 $382<br>Expect<br>~$410<br>$0<br>$100<br>$200<br>$300<br>$400<br>$500<br>2019 2020 2021<br>(millions)<br>Collaborative Arrangement Revenue1<br>$42M in one-time license and non-contingent milestones<br>FUTURE<br>FORWARD<br>3 |
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| 1 2021 cash and cash equivalents is unaudited, preliminary and based on estimates and may change as we receive final 2021 data and complete the preparation of our 2021<br>financial statements. 2 Due dates of aggregate principal amounts of convertible senior notes outstanding as of December 31, 2021.<br>$121<br>$200 $200<br>$0<br>$100<br>$200<br>$300<br>$400<br>2021 2022 2023 2024 2025 2026<br>Principal in $<br>Ms<br>Debt Maturity Profile2<br>2.25% Convertible Notes<br>Conv price: $14.51<br>Call spread strike: $18.82<br>0.75% Convertible Notes<br>Conv price: $13.39<br>Capped call price: $17.05<br>1.50% Convertible Notes<br>Conv price: $13.39<br>Capped call price: $17.05<br>24<br>Expect to end 2021 with >$600 million in cash and cash equivalents1<br>We are Maintaining a Strong Capital Structure |
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| Q3 2021 Financial Summary<br>Three Months Ended<br>September 30, 2021<br>Nine Months Ended<br>September 30, 2021<br>(000s, except per share<br>amounts)<br>(000s, except per share<br>amounts)<br>GAAP net income $ 55,845 $ 487,074<br>Adjustments:<br>Mark-to-market adjustments on the derivatives related to convertible<br>notes, net (2,164) (1,388)<br>Restructuring expenses (73) (44)<br>Valuation allowance release - (337,800)<br>Non-GAAP net income $ 53,608 $ 147,842<br>GAAP net income per share – basic $ 0.34 $ 3.01<br>Adjustments to GAAP net income (detailed above) (0.01) (2.10)<br>Non-GAAP net income per share – basic $ 0.33 $ 0.91<br>GAAP net income per share – diluted $ 0.34 $ 2.97<br>Adjustments to GAAP net income (detailed above) (0.01) (2.07)<br>Non-GAAP net income per share – diluted $ 0.33 $ 0.90<br>1.The company presents non-GAAP net income and non-GAAP net income per share to exclude the impact of net gains and losses on the derivatives related to our 2022 convertible notes that<br>are required to be marked-to-market, restructuring expense, and the release of the company’s valuation allowance against the majority of deferred tax assets in the second quarter of 2021.<br>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.<br>In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of the company’s non-GAAP<br>financial measures to the most comparable GAAP measures, please refer to the table above. Additional information regarding the non-GAAP financial measures is included in the company’s<br>press release dated November 4, 2021.<br>Reconciliation of GAAP results to non-GAAP financial measures1<br>25 |
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| Q3 2021 Financial Summary<br>Three Months Ended<br>September 30, 2021<br>Nine Months Ended<br>September 30, 2021<br>(000s) (000s)<br>GAAP net income1 $ 55,845 $ 487,074<br>Adjustments:<br>Mark-to-market adjustments on the derivatives related to<br>convertible notes, net (2,164) (1,388)<br>Restructuring expenses (73) (44)<br>Interest expense 7,841 23,199<br>Interest and investment income (178) (546)<br>Income tax expense (benefit) 3,827 (332,672)<br>Depreciation and amortization 358 1,164<br>Adjusted EBITDA $ 65,456 $ 176,787<br>1 Ironwood presents GAAP net income and adjusted EBITDA, a non-GAAP measure. Adjusted EBITDA is calculated by subtracting mark-to-market adjustments on derivatives related to<br>Ironwood’s 2022 Convertible Notes, restructuring expenses, net interest expense, income taxes, depreciation and amortization from GAAP net income. Investors should consider these non-<br>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<br>measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of the company’s non-GAAP financial measures to the most comparable<br>GAAP measures, please refer to the table above. Additional information regarding the non-GAAP financial measures is included in the company’s press release dated November 4,<br>2021. 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<br>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<br>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<br>addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies.<br>Reconciliation of GAAP net income to adjusted EBITDA<br>26 |
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| Q3 2021 Financial Summary<br>LINZESS U.S. Brand Collaboration<br>Three Months<br>Ended<br>September 30, 2021<br>Nine Months Ended<br>September 30, 2021<br>(000s) (000s)<br>LINZESS U.S. net product sales $ 252,650 $ 727,301<br>AbbVie & Ironwood commercial<br>costs, expenses and other<br>discounts2<br>66,658 197,608<br>AbbVie & Ironwood R&D<br>expenses5 9,753 28,400<br>Total net profit on sales of<br>LINZESS6 $ 176,239 $ 501,293<br>Commercial Profit & Collaboration Revenue1 Ironwood & AbbVie Total Net Profit<br>1 The purpose of the Commercial Profit and Collaboration Revenue table is to present the calculation of Ironwood’s share of net profits generated from sales of LINZESS in the U.S. and Ironwood’s<br>collaboration revenue / expense; 2 Includes certain discounts recognized and cost of goods sold incurred by AbbVie, as well as selling, general and administrative expenses incurred by AbbVie and Ironwood<br>that are attributable to the cost-sharing arrangement between the parties. 3 Includes Ironwood’s selling, general and administrative expenses attributable to the cost-sharing arrangement with AbbVie. 4 In<br>connection with its acquisition of Allergan in the second quarter of 2020, AbbVie recast LINZESS U.S. net sales (previously reported by Allergan) for periods beginning on January 1, 2019 through March 31,<br>2020 to conform with its revenue recognition accounting policies and reporting conventions for certain rebates and discounts. This recast did not result in any change to Ironwood’s historically reported<br>collaborative arrangements revenue or collaborative arrangements revenue policy. Ironwood continues to record collaborative arrangements revenue based on actual settlement payments received from<br>AbbVie. 5 R&D expenses related to LINZESS in the U.S. are shared equally between Ironwood and AbbVie under the collaboration agreement. 6 Ironwood has recalculated its share of net profit on sales of<br>LINZESS in the U.S. to conform with AbbVie’s recast of historically reported LINZESS U.S. net sales (previously reported by Allergan).<br>Three Months Ended<br>September 30, 2021<br>Nine Months Ended<br>September 30, 2021<br>(000s) (000s)<br>LINZESS U.S. net product sales $ 252,650 $ 727,301<br>AbbVie & Ironwood commercial<br>costs, expenses and other<br>discounts2<br>66,658 197,608<br>Commercial profit on sales of<br>LINZESS<br>$ 185,992 $ 529,693<br>Commercial Margin 74% 73%<br>Ironwood’s share of net profit 92,996 264,846<br>Reimbursement for Ironwood’s<br>selling, general, and<br>administrative expenses3<br>7,397 21,803<br>Ironwood’s collaboration<br>revenue $ 100,393 $ 286,649<br>27 |
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