– Reported positive topline results from global Phase III STARS trial of once-weekly apraglutide in adults with short bowel syndrome with intestinal failure (SBS-IF) –

– Reported positive results from Phase II exploratory STARGAZE trial of apraglutide in patients with steroid-refractory gastrointestinal acute Graft-versus-Host Disease (SR GI aGVHD) –

– LINZESS^® (linaclotide) EUTRx prescription demand growth of 10% year-over-year –

– Revises FY 2024 financial guidance due to a LINZESS gross-to-net change in estimate –

Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), a GI-focused healthcare company, today reported its first quarter 2024 results and recent business performance.

"In the first quarter of 2024, we made significant advancements across our portfolio," said Tom McCourt, chief executive officer of Ironwood. "LINZESS maintained its strong demand momentum, experiencing a rise in prescription volume by a robust 10% year-over-year, while continuing to generate meaningful cash flow. Particularly noteworthy during the quarter was the positive Phase III clinical data for apraglutide, which validates its potential as the first and only once-weekly GLP-2 analog for adult patients with short bowel syndrome who are dependent on parenteral support. The positive results from the STARS trial, coupled with our proven track record of effective commercial execution, uniquely position Ironwood in the market and reinforce our belief in the long-term value potential of apraglutide for patients and shareholders. We are working swiftly and plan to file an NDA as soon as possible for apraglutide for adult SBS patients dependent on parenteral support. In addition, we remain focused on executing across our strategic priorities by advancing our other GI pipeline assets, driving robust LINZESS demand growth, and delivering sustained profits and cash flow."

First Quarter 2024 Financial Highlights¹(in thousands, except for per share amounts)

	Q1 2024	Q1 2023
Total revenue²	$74,877	$104,061
Total operating expenses	63,857	43,964
GAAP net income (loss)²	(4,162)	45,714
GAAP net income (loss) – per share basic²	(0.03)	0.30
GAAP net income (loss) – per share diluted²	(0.03)	0.25
Adjusted EBITDA²	12,757	60,383
Non-GAAP net income (loss)²	(2,933)	45,695
Non-GAAP net income (loss)per share – basic	(0.02)	0.30
Non-GAAP net income (loss) per share – diluted	(0.02)	0.25

¹Refer to the Reconciliation of GAAP Results to Non-GAAP Financial Measures table and to the Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA table at the end of this press release. Refer to Non-GAAP Financial Measures for additional information.

² Figures presented in Q1 2024 include a $30.0 million reduction to collaborative arrangements revenue due to a LINZESS gross-to-net change in estimate related to the year ended December 31, 2023.

First Quarter 2024 Corporate Highlights

U.S. LINZESS

Prescription Demand: Total LINZESS prescription demand in the first quarter of 2024 was 50 million LINZESS capsules, a 10% increase compared to the first quarter of 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 $256.6 million in the first quarter of 2024, a 3% increase compared to $250.2 million in the first quarter of 2023. Ironwood and AbbVie share equally in U.S. brand collaboration profits.
- Based on information subsequently provided by AbbVie, Ironwood recorded a $30 million reduction to collaborative arrangements revenue in its first quarter 2024 financial statements as a result of a LINZESS gross-to-net change in estimate related to the year ended December 31, 2023. See the LINZESS U.S. Commercial Collaboration table at the end of the press release.
- LINZESS commercial margin, excluding the gross-to-net change in estimate, was 71% in the first quarter of 2024, compared to 73% in the first quarter of 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 and excluding the gross-to-net change in estimate, was $175.6 million in the first quarter of 2024, compared to $175.2 million in the first quarter of 2023. See the U.S. LINZESS Full Brand Collaboration table at the end of this press release.
Collaboration Revenue to Ironwood: Ironwood recorded $71.7 million in collaboration revenue in the first quarter of 2024 related to sales of LINZESS in the U.S., a decrease compared to $101.6 million for the first quarter of 2023, due to a $30.0 million reduction to collaborative arrangements revenue from a LINZESS gross-to-net change in estimate as noted above. See the U.S. LINZESS Commercial Collaboration table at the end of the press release.
In January 2024, Ironwood announced a 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.

Pipeline Updates

Apraglutide

Ironwood is advancing apraglutide, a next-generation, synthetic glucagon-like peptide-2 ("GLP-2") analog for short bowel syndrome patients dependent on parenteral support ("PS"), a severe chronic malabsorptive condition. Ironwood believes 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.
In February 2024, Ironwood announced positive topline results from its pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing PS dependency in adult patients with short bowel syndrome with intestinal failure ("SBS-IF"). Based on the results from the STARS clinical trial, Ironwood plans to submit a new drug application and other regulatory filings for apraglutide for use in adult patients with SBS who are dependent on PS. Additional details on the topline results can be found here. Data from the Phase III STARS study was accepted as a late-breaker oral presentation and will be presented on May 21, 2024 at Digestive Disease Week^® (DDW) 2024 in Washington D.C.
In March 2024, Ironwood announced positive, primary results up to Day 91 for its Phase II exploratory trial, STARGAZE, to evaluate apraglutide in patients with steroid-refractory gastrointestinal acute Graft-versus-Host Disease ("SR GI aGvHD"), which evaluated the safety and tolerability of once-weekly apraglutide in SR GI aGvHD patients treated with standard of care, including systemic corticosteroids and ruxolitinib. The STARGAZE study will continue through its two-year endpoint, where apraglutide will be re-evaluated for safety and efficacy. Additional details can be found here.

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. Enrollment is complete and topline data is 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.

First Quarter 2024 Financial Results

Total Revenue. Total revenue in the first quarter of 2024 was $74.9 million, compared to $104.1 million in the first quarter of 2023.
- As noted above, revenue was lower year-over-year primarily due to the $30.0 million LINZESS gross-to-net change in estimate recorded to collaborative arrangements revenue.
- Total revenue in the first quarter of 2024 consisted of $71.7 million associated with Ironwood's share of the net profits from the sales of LINZESS in the U.S., including the $30.0 million reduction, and $3.2 million in royalties and other revenue. Total revenue in the first quarter of 2023 consisted of $101.6 million associated with Ironwood's share of the net profits from the sales of LINZESS in the U.S. and $2.5 million in royalties and other revenue.
Operating Expenses. Operating expenses in the first quarter of 2024 were $63.9 million, compared to $44.0 million in the first quarter of 2023.
- Operating expenses in the first quarter of 2024 consisted of $37.6 million in selling, general and administrative ("SG&A") expenses, $25.8 million in R&D expenses and $0.4 million in restructuring expenses. Operating expenses in the first quarter of 2023 consisted of $31.1 million in SG&A expenses and $12.9 million in R&D expenses.
Interest Expense. Interest expense was $7.2 million in the first quarter of 2024, primarily in connection with Ironwood's convertible senior notes and revolving credit facility. Interest expense was $1.5 million in the first quarter of 2023, in connection with Ironwood's convertible senior notes.
Interest and Investment Income. Interest and investment income was $1.2 million in the first quarter of 2024. Interest and investment income was $7.3 million in the first quarter of 2023.
Gain on Derivatives. Ironwood recorded a gain on derivatives of an insignificant amount in the first quarter of 2023, as a result of the change in fair value of its note hedge warrants. Ironwood's note hedge warrants terminated unexercised upon expiration in April 2023.
Income Tax Expense. Ironwood recorded $9.1 million of income tax expense in the first quarter 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 $20.1 million of income tax expense in the first quarter 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). GAAP net loss was $4.2 million, or ($0.03) per share (basic and diluted), in the first quarter of 2024, which includes a $30.0 million reduction to collaborative arrangements revenue due to a LINZESS gross-to-net change in estimate, compared to GAAP net income of $45.7 million, or $0.30 per share (basic) and $0.25 per share (diluted), in the first quarter of 2023.
Non-GAAP Net Income (Loss). Non-GAAP net loss was $2.9 million, or ($0.02) per share (basic and diluted), in the first quarter of 2024, which includes a $30.0 million reduction to collaborative arrangements revenue due to a LINZESS gross-to-net change in estimate, compared to non-GAAP net income of $45.7 million, or $0.30 per share (basic) and $0.25 per share (diluted), in the first quarter of 2023.
- 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 $12.8 million in the first quarter of 2024, which includes a $30.0 million reduction to collaborative arrangements revenue due to a LINZESS gross-to-net change in estimate, compared to $60.4 million in the first quarter of 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 income. See Non-GAAP Financial Measures below.
Cash Flow Highlights. Ironwood ended the first quarter of 2024 with $121.5 million of cash and cash equivalents, compared to $92.2 million of cash and cash equivalents at the end of 2023.
- In the first quarter of 2024, Ironwood repaid $25.0 million 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 $275.0 million as of March 31, 2024.
- Ironwood generated $45.0 million in cash from operations in the first quarter of 2024, compared to $80.2 million in cash from operations in the first quarter of 2023.
Ironwood 2024 Financial Guidance. Ironwood has revised its FY 2024 financial guidance due to a LINZESS gross-to-net change in estimate related to the year ended December 31, 2023. Ironwood now expects:

	Prior 2024 Guidance (February 15, 2024)	Revised 2024 Guidance² (May 9, 2024)
U.S. LINZESS Net Sales³	Low-single digits % growth	Mid-single digits % decline
Total Revenue	$435 to $455 million	$405 to $425 million
Adjusted EBITDA¹	>$150 million ^{Excludes potential CNP-104 option exercise}	>$120 million ^{Excludes potential CNP-104 option exercise}

¹Adjusted 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.

²Based on information provided by AbbVie, Ironwood estimates a $60.0 million LINZESS gross-to-net change related to the year ended December 31, 2023, and has recorded a $30.0 million reduction to collaborative arrangements revenue in its first quarter 2024 financial statements to reflect this change in estimate.

³2024 U.S. LINZESS Net Sales guidance presented as year-over-year change relative to 2023 U.S. LINZESS Net Sales as reported by AbbVie of $1,073.2 million.

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, May 9, 2024 to discuss its first quarter 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 3416473. To access the webcast, please visit the Investors section of Ironwood's website at www.ironwoodpharma.com 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 May 9, 2024, running through 11:59 p.m. Eastern Time on May 23, 2024. To listen to the replay, dial (800) 770-2030 (U.S. and Canada) or (609) 800-9909 (international) using conference ID number 3416473. 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, 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

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: 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; 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; our plan to file an NDA for apraglutide as soon as possible and apraglutide's potential, if approved, to be the first and only once-weekly GLP-2 analog for adult SBS patients who are dependent on PS; our belief that the positive results from the STARS Phase III trial, coupled with our proven track record of effective commercial execution, position Ironwood uniquely in the market and reinforce our belief in the long-term value potential of apraglutide for patients and shareholders; our plan to file an NDA for apraglutide for adult SBS patients dependent on PS as soon as possible; and the timing of topline data for CNP-104 and that, if successful, CNP-104 has the potential to be the first approved disease modifying therapy for PBC. 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 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 clinical programs and studies, including for linaclotide pediatric programs, apraglutide, CNP-104 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 completed nonclinical studies and clinical trials may not be replicated in later trials 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 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, 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, CNP-104 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.

Condensed Consolidated Balance Sheets (In thousands) (unaudited)

	March 31, 2024		December 31, 2023
Assets
Cash and cash equivalents	$	121,540	$	92,154
Accounts receivable, net		72,015		129,122
Prepaid expenses and other current assets		14,619		12,012
Total current assets		208,174		233,288
Property and equipment, net		5,288		5,585
Operating lease right-of-use assets		12,208		12,586
Intangible assets, net		3,478		3,682
Deferred tax assets		206,273		212,324
Other assets		3,398		3,608
Total assets	$	438,819	$	471,073
Liabilities and stockholders' equity
Accounts payable	$	6,222	$	7,830
Accrued research and development costs		11,880		21,331
Accrued expenses and other current liabilities		31,398		44,254
Current portion of operating lease liabilities		3,142		3,126
Current portion on convertible senior notes		199,800		199,560
Total current liabilities		252,442		276,101
Operating lease liabilities, net of current portion		14,004		14,543
Convertible senior notes, net of current portion		198,477		198,309
Revolving credit facility		275,000		300,000
Other liabilities		29,414		28,415
Total stockholders' deficit		(330,518)		(346,295)
Total liabilities and stockholders' deficit	$	438,819	$	471,073

Condensed Consolidated Statements of Income (Loss) (In thousands, except per share amounts) (unaudited)

	Three Months Ended March 31,
	2024		2023
Total revenue¹		74,877		104,061
Collaborative arrangements revenue¹		71,700		101,600
Operating expenses:
Research and development		25,815		12,847
Selling, general and administrative		37,605		31,117
Restructuring expenses		437		-
Total operating expenses		63,857		43,964
Income from operations		11,020		60,097
Other income (expense):
Interest expense and other financing costs		(7,231)		(1,527)
Interest and investment income		1,169		7,272
Gain on derivatives		-		19
Other income (expense), net		(6,062)		5,764
Income before income taxes		4,958		65,861
Income tax expense		(9,120)		(20,147)
GAAP net income (loss)¹	$	(4,162)	$	45,714

GAAP net income (loss) per share—basic¹	($0.03)		$0.30

GAAP net income (loss) per share—diluted¹	($0.03)		$0.25

______________________________

¹ Figures presented in Q1 2024 reflect a $30.0 million reduction to collaborative arrangements revenue due to a LINZESS gross-to-net change in estimate related to the year ended December 31, 2023.

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 March 31,
	2024		2023
GAAP net income (loss)^1,2	$	(4,162)	$	45,714
Adjustments:
Mark-to-market adjustments on the derivatives related to convertible notes, net		-		(19)
Amortization of acquired intangible assets		204		-
Restructuring expenses		437		-
Acquisition-related costs		787		-
Tax effect of adjustments		(199)		-
Non-GAAP net income (loss)^1,2	$	(2,933)	$	45,695

______________________________

¹ Q1 2024 GAAP and non-GAAP net loss reflect costs associated with the acquisition of VectivBio in the second quarter of 2023.

² Q1 2024 GAAP and non-GAAP net loss reflect a $30.0 million reduction to collaborative arrangements revenue due to a LINZESS gross-to-net change in estimate related to the year ended December 31, 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 March 31,
	2024		2023
GAAP net income (loss) – basic	$	(0.03)	$	0.30

Adjustments to GAAP net income (loss) per share (as detailed above)		0.01		(0.00)
Non-GAAP net income (loss) per share – basic	$	(0.02)	$	0.30

Weighted average number of common shares used to calculate net income (loss) per share — basic		157,700		154,452

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 March 31,
	2024		2023
GAAP net income (loss) per share – diluted	$	(0.03)	$	0.25

Adjustments to GAAP net income (loss) per share (as detailed above)		0.01		(0.00)
Non-GAAP net income (loss) per share – diluted	$	(0.02)	$	0.25

Weighted average number of common shares used to calculate net income (loss) per share — diluted		157,700		186,680

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

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

	Three Months Ended March 31,
	2024		2023
GAAP net income (loss)^1,2	$	(4,162)	$	45,714
Adjustments:
Mark-to-market adjustments on the derivatives related to convertible notes, net		-		(19)
Restructuring expenses		437		-
Interest expense		7,231		1,527
Interest and investment income		(1,169)		(7,272)
Income tax expense		9,120		20,147
Depreciation and amortization		513		286
Acquisition-related costs		787		-
Adjusted EBITDA^1,2	$	12,757	$	60,383

______________________________

¹ Q1 2024 GAAP net loss and adjusted EBITDA reflect costs associated with the acquisition of VectivBio in the second quarter of 2023.

² Q1 2024 GAAP net loss and adjusted EBITDA reflect a $30.0 million reduction to collaborative arrangements revenue due to a LINZESS gross-to-net change in estimate related to the year ended December 31, 2023.

U.S. LINZESS Commercial Collaboration¹ Revenue/Expense Calculation (In thousands) (unaudited)

	Three Months Ended March 31,
	2024		2023
LINZESS U.S. net sales as reported by AbbVie²	$	256,600	$	250,214
AbbVie & Ironwood commercial costs, expenses and other discounts³		73,362		66,408
Commercial profit on sales of LINZESS	$	183,238	$	183,806
Commercial Margin⁴		71%		73%


Ironwood's share of net profit		91,619		91,903
Reimbursement for Ironwood's commercial expenses		10,096		9,728
Ironwood's portion of gross-to-net change in estimate⁵		(30,000)		-
Ironwood's collaborative arrangements revenue	$	71,715	$	101,631

______________________________

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.

⁵ Based on information provided by AbbVie, Ironwood estimates a $60.0 million LINZESS gross-to-net change related to the year ended December 31, 2023, and has recorded a $30.0 million reduction to collaborative arrangements revenue in its first quarter 2024 financial statements to reflect this change in estimate.

US LINZESS Full Brand Collaboration¹ Revenue/Expense Calculation (In thousands) (unaudited)

	Three Months Ended March 31,
	2024		2023
LINZESS U.S. net sales as reported by AbbVie²	$	256,600	$	250,214
AbbVie & Ironwood commercial costs, expenses and other discounts³		73,362		66,408
AbbVie & Ironwood R&D Expenses⁴		7,636		8,650
Total net profit on sales of LINZESS⁵	$	175,602	$	175,156

______________________________

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.

⁴ R&D expenses related to LINZESS in the U.S. are shared equally between Ironwood and AbbVie under the collaboration agreement.

⁵ Total net profit on sales of LINZESS does not reflect the estimated gross-to-net change related to the year ended December 31, 2023.

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Ironwood Pharmaceuticals Reports First Quarter 2024 Results