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Continued Strong Demand Growth for U.S. LINZESS

• Prescription Demand: Total LINZESS prescription demand in the fourth quarter of 2024 was 56 million LINZESS capsules, a 12% increase compared to the fourth quarter of 2023, per IQVIA. Total prescription demand was 212 million LINZESS capsules for the full year 2024, a 11% increase compared to the full year 2023, 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 $223.0 million in the fourth quarter of 2024, a 19% decrease compared to $274.4 million in the fourth quarter of 2023, and $916.3 million for the full year 2024, a 15% decrease compared to $1,073.2 million for the full year 2023. Ironwood and AbbVie share equally in U.S. brand collaboration profits.
  
  – LINZESS commercial margin was 64% in the fourth quarter of 2024, compared to 77% in the fourth quarter of 2023. LINZESS commercial margin was 66% for the full year in 2024 and 73% for the full year in 2023. See the U.S. LINZESS Full Brand Collaboration table 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 $135.2 million in the fourth quarter of 2024, a 33% decrease compared to $202.5 million in the fourth quarter of 2023. Net profit for LINZESS U.S. brand collaboration, net of commercial and R&D expenses, was $570.9 million for the full year 2024, a 24% decrease compared to $749.9 million for the full year 2023. See the U.S. LINZESS Full Brand Collaboration table at the end of this press release.
  

• Collaboration Revenue to Ironwood: Ironwood recorded $88.4 million in collaboration revenue in the fourth quarter of 2024 related to sales of LINZESS in the U.S., a 22% decrease compared to $114.0 million for the fourth quarter of 2023. Fourth quarter of 2024 collaboration revenue to Ironwood includes a $7.2 million positive adjustment to reflect Ironwood’s estimate of LINZESS gross-to-net reserves as of December 31, 2024. Ironwood recorded $340.4 million in collaboration revenue for the full year 2024 related to the sales of LINZESS in the U.S., a 21% decrease compared to $430.5 million in 2023. See the U.S. LINZESS Commercial Collaboration table at the end of the press release.

Streamlined Organization Positioned for Long-Term Success

• In January 2025, Greg Martini was promoted to Senior Vice President, Chief Financial Officer, and Tammi Gaskins was promoted to Senior Vice President, Chief Commercial Officer.

• In January 2025, Ironwood announced a streamlined strategic focus on advancing and realizing the potential of apraglutide in SBS to position the company for long-term growth. This reorganization included a reduction of Ironwood’s workforce by approximately 50%, primarily driven by the elimination of the Ironwood field force. Ironwood expects to incur restructuring charges of approximately $20 to $25 million, which are anticipated to be incurred primarily in the first half of 2025. As a result of the strategic reorganization, Ironwood expects to realize approximately $55 to $60 million of annual operating expense savings, resulting in $40 to $45 million benefit to annual profits, net of impact to collaborative arrangements revenue.

Fourth Quarter and Full Year 2024 Financial Results

• Total Revenue. Total revenue in the fourth quarter of 2024 was $90.5 million, compared to $117.6 million in the fourth quarter of 2023. Total revenue for the full year 2024 was $351.4 million, compared to $442.7 million for the full year 2023.
  
  – Total revenue in the fourth quarter of 2024 consisted of $88.4 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S. and $2.1 million in royalties and other revenue. Total revenue 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 revenue for the full year 2024 consisted of $340.4 million associated with Ironwood’s share of the net profits from the sales of LINZESS in the U.S. and $11.0 million in royalties and other revenue. Total revenue 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 royalites and other revenue.
  

• Total Costs and Expenses. Total costs and expenses in the fourth quarter of 2024 were $57.3 million, compared to $80.0 million in the fourth quarter of 2023. Total costs and expenses for the full year 2024 we $256.6 million, compared to $1,388.2 million for the full year 2023.
  
  – Total costs and expenses in the fourth quarter of 2024 consisted of $33.3 million in selling, general and administrative ("SG&A") expenses, $23.9 million in R&D expenses and $0.1 million in restructuring expenses. Total costs and expenses in the fourth quarter of 2023 consisted of $38.7 million in 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.
  
  – Total costs and expenses for the full year 2024 consisted primarily of $144.0 million in SG&A expenses, $110.0 million in R&D expenses and $2.6 million in restructuring expenses. Total costs and expenses for the full year 2023 consisted primarily of $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.
  

• Interest Expense. Interest expense was $8.9 million in the fourth quarter of 2024 and $33.0 million for the full year 2024, in connection with Ironwood’s convertible senior notes and revolving credit facility. 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 and Investment Income. Interest and investment income was $0.8 million in the fourth quarter of 2024 and $4.5 million for the full year 2024. Interest and investment income was $1.2 million in the fourth quarter of 2023 and $19.0 million for the full year 2023.

• Income Tax Expense. Ironwood recorded $21.9 million of income tax expense in the fourth quarter of 2024 and $64.5 million of income tax expense for the full year of 2024, 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 $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 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 income attributable to Ironwood was $3.2 million, or $0.02 per share (basic and diluted) in the fourth quarter of 2024, compared to GAAP net loss of $1.1 million, or ($0.01) per share (basic and diluted) in the fourth quarter of 2023. GAAP net income for the full year 2024 was $1.8 million, or $0.01 per share (basic and diluted), compared to GAAP net loss of $1 billion, or ($6.45) per share (basic and diluted), for the full year 2023.

• Non-GAAP Net Income. Non-GAAP net income was $3.5 million, or $0.02 per share (basic and diluted), in the fourth quarter of 2024, compared to non-GAAP net income of an insignificant amount, or ($0.00) per share (basic and diluted) in the fourth quarter of 2023. Non-GAAP net income for the full year 2024 was $5.9 million, or $0.04 per share (basic and diluted), compared to non-GAAP net loss of $973.8 million, or ($6.27) per share (basic and diluted), for the full year 2023.
  
  – Non-GAAP net income (loss) 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 $33.8 million in the fourth quarter of 2024, compared to $39.9 million in the fourth quarter of 2023. For the full year 2024, adjusted EBITDA was $100.6 million, compared to ($884.8) million for the full year 2023.
  
  – 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 loss. See Non-GAAP Financial Measures below.
  
  – Note: Beginning in the first quarter of 2025, adjusted EBITDA will be calculated by also subtracting stock-based compensation expense.
  

• Cash Flow Highlights. Ironwood ended 2024 with $88.6 million of cash and cash equivalents, compared to $92.2 million of cash and cash equivalents at the end of 2023.
  
  – In the fourth quarter of 2024, Ironwood repaid $15.0 million of the outstanding principal balance on its revolving credit facility. The outstanding principal balance on the revolving credit facility was $385.0 million as of December 31, 2024.
  
  – Ironwood generated $15.2 million in cash from operations in the fourth quarter of 2024, compared to $35.8 million in cash from operations in the fourth quarter of 2023. Ironwood generated $103.5 million in cash from operations for the full year 2024, compared to $183.4 million for the full year 2023.
  

• Ironwood 2025 Financial Guidance. Ironwood continues to expect:

Non-GAAP Financial Measures

Ironwood presents non-GAAP net income (loss) and non-GAAP net income (loss) 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. Restructuring expenses include 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. Beginning in the first quarter of 2025, adjusted EBITDA will be calculated by also subtracting stock-based compensation expense. The adjustments are made on a similar basis as described above related to non-GAAP net income (loss), 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 (loss) and non-GAAP net income (loss) 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 27, 2025 to discuss its fourth quarter and full year 2024 results and recent business activities. Individuals interested in participating in the call should dial (888) 596-4144 (U.S. and Canada) or (646) 968-2525 (international) using conference ID number and event passcode 2530602. To access the webcast, please visit the Investors section of Ironwood’s website at www.ironwoodpharma.com. The call will be available for replay via telephone starting Thursday, February 27, 2025, at approximately 11:30 a.m. Eastern Time, running through 11:59 p.m. Eastern Time on Thursday, March 13, 2025. To listen to the replay, dial (800) 770-2030 (U.S. and Canada) or (609) 800-9909 (international) using conference ID number 2530602. 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) is a biotechnology company developing and commercializing life-changing therapies for people living with gastrointestinal (GI) and rare diseases. Ironwood is advancing apraglutide, a next-generation, long-acting synthetic GLP-2 analog being developed for short bowel syndrome patients who are dependent on parenteral support. In addition, Ironwood has been a pioneer 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. Building upon our history of innovation, we keep patients at the heart of our R&D and commercialization efforts to reduce the burden of diseases and address significant unmet needs.

Founded in 1998, Ironwood Pharmaceuticals is headquartered in Boston, Massachusetts, with a site in Basel, Switzerland.

We routinely post information that may be important to investors on our website at www.ironwoodpharma.com. 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

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: https://www.rxabbvie.com/pdf/linzess_pi.pdf

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 within the meaning of the Private Securities Litigation Reform Act of 1995. 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; 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 2025; our belief that 2025 will mark the beginning of a transformation for Ironwood to lay the foundation for growth, long-term value creation, and the delivery of new medicines to GI and rare disease patients in need; our plan to include the open-label extension study data in our rolling apraglutide NDA submission and the expected timing to complete such submission; apraglutide’s potential to become a blockbuster drug and significantly expand treatment options for SBS patients; and our belief that apraglutide has the potential to improve the standard of care for adult patients with SBS who are dependent on PS as the first and only GLP-2 with once-weekly administration, if approved. 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, IW-3300, and our other 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 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 risk that apraglutide will not be approved by the FDA or other regulatory agencies; the risk that clinical programs and studies, including for linaclotide pediatric programs, apraglutide and IW-3300, 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 ongoing and completed nonclinical studies and clinical trials may not be replicated in later trials or further data analyses and earlier-stage clinical trials may not be predictive of the results we may obtain in later-stage clinical trials or of the likelihood of regulatory approval; 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 efficacy, safety and tolerability of linaclotide and our product candidates; the risk that the commercial and therapeutic opportunities for LINZESS, apraglutide or our other product candidates are not as we expect; decisions by regulatory and judicial authorities; the risk we may never get additional patent protection for linaclotide, apraglutide and other product candidates, that patents for linaclotide, apraglutide 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 and/or IW-3300 is 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 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, 2023, and in our subsequent Securities and Exchange Commission filings.

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:

A reconciliation between basic net income (loss) per share on a GAAP basis and on a non-GAAP basis is as follows:

A reconciliation between diluted net income (loss) per share on a GAAP basis and on a non-GAAP basis is as follows:

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(In thousands)
(unaudited)

A reconciliation of GAAP net income (loss) to adjusted EBITDA:

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Contacts

Company:
Greg Martini
Chief Financial Officer
gmartini@ironwoodpharma.com

Investors:
Precision AQ (formerly Stern Investor Relations)
Stephanie Ascher
Stephanie.Ascher@precisionaq.com