IRONWOOD PHARMACEUTICALS INC

Previous wording

trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing parenteral support dependency in adult patients with short bowel syndrome with intestinal failure, or SBS-IF. In April 2025, we announced that, based on discussions with the U.S. FDA, a confirmatory Phase III trial is needed to seek approval of a new drug application or NDA, for apraglutide for patients with SBS-IF who are dependent on PS.

Current wording

Through the VectivBio acquisition, we are advancing apraglutide, a next-generation, synthetic long-acting peptide analog of glucagon-like peptide-2, or GLP-2, for short bowel syndrome, or SBS, patients who are dependent on parenteral support, or PS. In February 2024, we announced positive topline results from our pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing parenteral support dependency in adult patients with short bowel syndrome with intestinal failure, or SBS-IF. In April 2025, we announced that, based on discussions with the U.S. FDA, a confirmatory Phase III trial is needed to seek approval of a new drug application or NDA, for apraglutide for patients with SBS-IF who are dependent on PS.

Previous wording

To date, we have dedicated a majority of our activities to the research, development and commercialization of linaclotide, as well as to the research and development of apraglutide and our other product candidates. For the three months ended March 31, 2025 and 2024, we recorded a net loss of $37.4 million and $4.2 million, respectively. As of March 31, 2025, we had an accumulated deficit of approximately $1.7 billion. We are unable to predict the extent of any future losses or guarantee that our company will be able to maintain positive cash flows. In April 2025, we announced that we would be exploring strategic alternatives for the company.

Current wording

To date, we have dedicated a majority of our activities to the research, development and commercialization of linaclotide, as well as to the research and development of apraglutide and our other product candidates. For the three and six months ended June 30, 2025, we recorded net income of $23.6 million and a net loss of $13.8 million, respectively. For the three and six months ended June 30, 2024, we recorded a net loss of $0.9 million and $5.0 million, respectively. As of June 30, 2025, we had an accumulated deficit of approximately $1.7 billion. We are unable to predict the extent of any future losses or guarantee that our company will be able to generate and maintain positive cash flows.

Previous wording

Linaclotide. Our commercial product, LINZESS, is commercially available in the U.S. for the treatment of IBS-C or CIC in adults and for FC in pediatric patients ages 6-17 years-old. Linaclotide is also available to adult men and women suffering from IBS-C or CIC in certain countries of the world, including China, Japan, and in a number of European countries.

Current wording

Linaclotide. Our commercial product, LINZESS, is commercially available in the U.S. for the treatment of IBS-C or CIC in adults and for FC in pediatric patients ages 6-17 years-old. Linaclotide is also available to adult men and

Previous wording

updated label modified the boxed warning for risk of serious dehydration and contraindication against use in children to those less than two years of age. The boxed warning and contraindication previously applied to all children less than 18 years of age and less than 6 years of age, respectively. In June 2023, the U.S. FDA approved LINZESS as a once-daily treatment for pediatric patients ages 6-17 years-old with FC, making LINZESS the first and only FDA-approved prescription therapy for FC in this patient population. The safety and effectiveness of LINZESS in patients with FC less than 6 years of age or in patients with IBS-C less than 18 years of age have not been established. Additional clinical pediatric programs in IBS-C and FC are ongoing.

Current wording

In addition, we and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S. FDA to understand the safety and efficacy of LINZESS in pediatric patients. In August 2021, the U.S. FDA approved a revised label for LINZESS based on clinical safety data that had been generated thus far in pediatric studies. The updated label modified the boxed warning for risk of serious dehydration and contraindication against use in children to those less than two years of age. The boxed warning and contraindication previously applied to all children less than 18 years of age and less than 6 years of age, respectively. In June 2023, the U.S. FDA approved LINZESS as a once-daily treatment for pediatric patients ages 6-17 years-old with FC, making LINZESS the first and only FDA-approved prescription therapy for FC in this patient population. The safety and effectiveness of LINZESS in patients with FC less than 6 years of age or in patients with IBS-C less than 18 years of age have not been established. Additional clinical pediatric programs in IBS-C and FC are ongoing.

Previous wording

Apraglutide for SBS-IF. In February 2024, we announced positive topline results from our pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing parenteral support, or PS, dependency in adult patients with SBS-IF. SBS-IF, a rare and severe organ failure condition in which patients are dependent on PS, affects an estimated 18,000 adult patients in the U.S., Europe, and Japan. We are also conducting an open-label extension study, STARS Extend, to further assess the safety of apraglutide in adult patients with SBS-IF. In April 2025, we announced that, based on discussions with the U.S. FDA, a confirmatory Phase III trial is needed to seek approval of an NDA for apraglutide for patients with SBS-IF who are dependent on PS. We plan to work with the U.S. FDA on the design of a confirmatory Phase II trial and the regulatory path forward.

Current wording

Apraglutide for SBS-IF. In February 2024, we announced positive topline results from our pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing parenteral support, or PS, dependency in adult patients with SBS-IF. SBS-IF, a rare and severe organ failure condition in which patients are dependent on PS, affects an estimated 18,000 adult patients in the U.S., Europe, and Japan. We are also conducting an open-label extension study, STARS Extend, to further assess the safety of apraglutide in adult patients with SBS-IF. In April 2025, we announced that, based on discussions with the U.S. FDA, a confirmatory Phase III trial is needed to seek approval of an NDA for apraglutide for patients with SBS-IF who are dependent on PS. We plan to align with the U.S. FDA on the design of a confirmatory Phase III trial and the regulatory path forward in the fourth quarter of 2025. Subject to alignment with the U.S. FDA, we expect to initiate a confirmatory Phase III trial in the first half of 2026.

Previous wording

The following table sets forth our research and development expenses related to our product pipeline for the three months ended March 31, 2025 and 2024, respectively. These expenses relate primarily to compensation, benefits and other employee-related expenses and external costs associated with nonclinical studies and clinical trial costs for our product candidates. We allocate costs related to facilities, depreciation, share-based compensation, research and development support services and certain other costs directly to programs.

Current wording

The following table sets forth our research and development expenses related to our product pipeline for the three and six months ended June 30, 2025 and 2024, respectively. These expenses relate primarily to compensation, benefits and other employee-related expenses and external costs associated with nonclinical studies and clinical trial costs for our product candidates. We allocate costs related to facilities, depreciation, share-based compensation, research and development support services and certain other costs directly to programs.

Previous wording

materially adversely affect our product development efforts and our business overall. Given the inherent uncertainties that come with the development of pharmaceutical products, we cannot estimate with any degree of certainty how our programs will evolve, and therefore the amount of time or money that would be required to obtain regulatory approval to market them. For example, based on feedback received from the U.S. FDA in April 2025, a confirmatory Phase III trial is needed to seek approval for apraglutide.

Current wording

The lengthy process of securing regulatory approvals for product candidates, including apraglutide, requires the expenditure of substantial resources. Any failure by us to obtain, or any delay in obtaining, regulatory approvals would materially adversely affect our product development efforts and our business overall. Given the inherent uncertainties that come with the development of pharmaceutical products, we cannot estimate with any degree of certainty how our programs will evolve, and therefore the amount of time or money that would be required to obtain regulatory approval to market them. For example, based on feedback received from the U.S. FDA in April 2025, a confirmatory Phase III trial is needed to seek approval for apraglutide.

Previous wording

Interest Expense and Other Financing Costs. Interest expense consists primarily of cash and non-cash interest costs related to our convertible senior notes and Revolving Credit Facility. Non-cash interest expense consists of amortization of debt issuance costs.

Current wording

Interest Expense and Other Financing Costs. Interest expense consists primarily of cash and non-cash interest costs related to our convertible senior notes and our $550.0 million secured revolving credit facility, or the Revolving Credit Facility. Non-cash interest expense consists of amortization of debt issuance costs.

Previous wording

Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make certain estimates and assumptions that may affect the reported amounts of assets and liabilities, the disclosure of assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. We base our estimates on our historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from our estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.

Current wording

reported amounts of assets and liabilities, the disclosure of assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. We base our estimates on our historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from our estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.

Previous wording

During the three months ended March 31, 2025, there were no material changes to our critical accounting policies as reported in our 2024 Annual Report on Form 10-K.

Current wording

During the three and six months ended June 30, 2025, there were no material changes to our critical accounting policies as reported in our 2024 Annual Report on Form 10-K.

Previous wording

Three months ended March 31, 2025 compared to three months ended March 31, 2024

Current wording

Three and six months ended June 30, 2025 compared to three and six months ended June 30, 2024

Previous wording

Collaborative arrangements revenue. The decrease in collaborative arrangements revenue of $33.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily related to a $32.9 million decrease in our share of net profits from the sale of LINZESS in the U.S. The decrease reflects a change in AbbVie’s estimate of gross-to-net rebate reserves effective at the beginning of 2025 and is expected to impact the quarterly phasing of LINZESS U.S. net sales. This change is based on expected rebates owed for units dispensed by channel in each quarter, which negatively impacted net sales during the three months ended March 31, 2025. Based on historical trends, we expect rebates owed for units dispensed in subsequent quarters to offset the impact reflected during the three months ended March 31, 2025.

Current wording

compared to the six months ended June 30, 2024 was primarily related to a $38.7 million decrease in our share of net profits from the sale of LINZESS in the U.S. The decrease reflects a change in AbbVie’s estimate of gross-to-net rebate reserves effective at the beginning of 2025 and is expected to impact the quarterly phasing of LINZESS U.S. net sales. Additionally, the decrease in collaborative arrangements revenue was driven by an adjustment during the second quarter of 2025 to reduce cumulative collaborative arrangements revenue by $2.9 million due to an increase in estimated development costs in connection with the confirmatory Phase III trial needed to seek U.S. FDA approval for apraglutide.

Previous wording

Research and development. The increase in research and development expenses of $1.6 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily related to a $4.8 million reduction to research and development expense recognized during the first quarter of 2024 in connection with the settlement of a license-related contract liability, partially offset by a $1.7 million decrease in external apraglutide costs, a $0.8 million decrease in external linaclotide costs, and a $0.7 million decrease in compensation, benefits, and other employee-related expenses.

Current wording

The decrease in research and development expenses of $5.4 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily related to a $5.4 million decrease in external apraglutide costs, a $2.4 million decrease in costs associated with the COUR Collaboration Agreement, a $1.8 million decrease in external linaclotide costs, and a $1.2 million decrease in external costs associated with the IW-3300 development program, partially offset by a $4.8 million reduction to research and development expense recognized during the first quarter of 2024 in connection with the settlement of a license-related contract liability.

Previous wording

Selling, general and administrative. Selling, general and administrative expenses decreased by $13.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a $9.6 million decrease in compensation, benefits, and other employee-related expenses and $2.5 million decrease in sales and marketing activities, both resulting from the restructuring initiative during the first quarter of 2025.

Current wording

Selling, general and administrative. Selling, general and administrative expenses decreased by $20.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to a $12.0 million decrease in compensation, benefits, and other employee-related expenses and a $5.0 million decrease in sales and marketing expenses, both resulting from the restructuring initiative during the first quarter of 2025, as well as a decrease of $2.4 million in professional services expenses.

Previous wording

Restructuring expenses. The increase in restructuring expense of** $**18.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 is primarily due to the workforce reduction in January 2025 consisting primarily of field-based sales employees. Workforce reduction and restructuring initiatives are more fully described in Note 11,Workforce Reductions and Restructuring.

Current wording

Restructuring expenses. The decrease in restructuring expense of** $2.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 is due to employee severance, benefits and related costs for the VectivBio Acquisition-related workforce reduction. The increase in restructuring expense of $**15.8 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 is primarily due tothe workforce reduction in January 2025 consisting primarily of field-based sales employees. Workforce reduction and restructuring initiatives are more fully described in Note 11,Workforce Reductions and Restructuring.

Previous wording

Interest expense and other financing costs. Interest expense increased by $0.8 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to an increase of $1.2 million in interest on the Revolving Credit Facility, resulting from increases in debt principal balance. This increase was partially offset by a $0.6 million decrease in coupon interest expense associated with the 2024 Convertible Notes, which was fully repaid upon maturity in June 2024.

Current wording

Interest expense and other financing costs. Interest expense increased by $0.9 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 primarily due to an increase of $1.2 million in interest on the Revolving Credit Facility, resulting from a higher outstanding principal balance throughout the period. This increase was partially offset by a $0.5 million decrease in coupon interest expense associated with the 2024 Convertible Notes, which were fully repaid upon maturity in June 2024.

Previous wording

Interest and investment income. Interest and investment income decreased by $0.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 due to a decrease in cash balances and a decrease in interest rates.* *

Current wording

Interest and investment income. Interest and investment income decreased by $0.6 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 due to a decrease in cash and cash equivalents balances and a decrease in interest rates.

Previous wording

Other. During the three months ended March 31, 2025, we recorded a gain of an insignificant amount for pension-related activities.

Current wording

Other. During the three and six months ended June 30, 2025, we recorded a gain of an insignificant amount for pension-related activities.

Previous wording

Income taxes.* *For the three months ended March 31, 2025 and 2024, we recorded income tax expense of $1.1 million and $9.1 million, respectively. Due to our ability to utilize our net operating losses to offset federal taxable income and taxable income in most states, the majority of our tax provision will be a non-cash expense until our net operating losses have been fully utilized.

Current wording

Income taxes.* *For the three and six months ended June 30, 2025, we recorded income tax expense of $14.2 million and $15.3 million, respectively. For the three and six months ended June 30, 2024, we recorded income tax expense of $19.7 million and $28.9 million, respectively. Due to our ability to utilize our net operating losses to offset federal taxable income and taxable income in most states, the majority of our tax provision will be a non-cash expense until our net operating losses have been fully utilized.

Previous wording

As of March 31, 2025, we had $108.5 million of cash and cash equivalents. Our cash equivalents include amounts held in money market funds, U.S. Treasury securities and commercial paper. We invest cash in excess of immediate requirements in accordance with our investment policy, which limits the amounts we may invest in certain types of investments and requires all investments held by us to be at least A- rated, with a remaining final maturity when purchased of less than twenty-four months, so as to primarily achieve liquidity and capital preservation objectives.

Current wording

As of June 30, 2025, we had $92.9 million of cash and cash equivalents. Our cash equivalents include amounts held in money market funds, U.S. Treasury securities and commercial paper. We invest cash in excess of immediate requirements in accordance with our investment policy, which limits the amounts we may invest in certain types of investments and requires all investments held by us to be at least A- rated, with a remaining final maturity when purchased of less than twenty-four months, so as to primarily achieve liquidity and capital preservation objectives.

Previous wording

We anticipate our cash balance and our expected net cash inflows from operations and/or additional capital sources to allow us to meet our near-term and long-term cash obligations, which are reflected in our condensed consolidated balance sheets. Our most significant fixed obligations are debt obligations and lease commitments, for which annual payments are disclosed in Note 8,Debt, and Note 6,Leases, respectively, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

We anticipate our cash and cash equivalents balance, our expected net cash inflows from operations, our borrowing capacity on our Revolving Credit Facility, and/or additional capital sources to allow us to meet our short-term and long-term cash obligations, which are reflected in our condensed consolidated balance sheets. Our most significant fixed obligations are debt obligations and lease commitments, for which annual payments are disclosed in Note 8,Debt, and Note 6,Leases, respectively, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

We have financed our operations to date primarily through both the private sale of our preferred stock and the public sale of our common stock, debt financings, and cash generated from our operations. As of March 31, 2025, our debt is comprised of $200.0 million aggregate principal amount of convertible notes, due in 2026, and $385.0 million aggregate principal amount outstanding under our Revolving Credit Facility, which we entered into in May 2023 to partially finance the VectivBio Acquisition. The Revolving Credit Facility provides for $550.0 million of borrowing capacity and includes a $10.0 million letter of credit subfacility. Refer to Note 8,Debt, to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for information related to our debt obligations.

Current wording

We have financed our operations to date primarily through both the private sale of our preferred stock and the public sale of our common stock, debt financings, and cash generated from our operations. As of June 30, 2025, our debt is comprised of $200.0 million aggregate principal amount of convertible notes, due in June 2026, and $385.0 million aggregate principal amount outstanding under our Revolving Credit Facility, which we entered into in May 2023 to partially finance the VectivBio Acquisition. The Revolving Credit Facility provides for $550.0 million of borrowing capacity and includes a $10.0 million letter of credit subfacility. Refer to Note 8,Debt, to our condensed consolidated

Previous wording

The following table summarizes cash flows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes cash flows from operating, investing, and financing activities for the three and six months ended June 30, 2025 and 2024:

Previous wording

Net cash inflows for the three months ended March 31, 2025 and 2024 totaled $20.0 million and $45.0 million, respectively, and were derived primarily from collaboration arrangements revenue related to sales of LINZESS in the U.S.

Current wording

Net cash outflows for the three months ended June 30, 2025 totaled $15.1 million and net cash inflows for the six months ended June 30, 2025 totaled $4.9 million, and were derived primarily from collaboration arrangements revenue related to sales of LINZESS in the U.S. Net cash inflows for the three and six months ended June 30, 2024 totaled $33.5 million and $78.5 million, respectively, and were derived primarily from collaboration arrangements revenue related to sales of LINZESS in the U.S.

Previous wording

Cash used in investing activities for the three months ended March 31, 2025 and 2024 was insignificant and pertained to the purchase of property and equipment.

Current wording

Cash used in investing activities for the three and six months ended June 30, 2025 was insignificant and pertained to the purchase of property and equipment. Cash used in investing activities for the three and six months ended June 30, 2024 was insignificant and pertained to the purchase of property and equipment.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2025 was insignificant and was generated by employee equity transactions.

Current wording

Cash provided by financing activities for the three and six months ended June 30, 2025 was insignificant and was generated from employee stock purchases.

Previous wording

Cash used in financing activities for the three months ended March 31, 2024 totaled $15.6 million and was comprised primarily of a $25.0 million repayment on the Revolving Credit Facility, partially offset by $10.1 million of proceeds from the exercise of stock options.

Current wording

Cash used in financing activities for the three and six months ended June 30, 2024 totaled $49.4 million and $64.9 million, respectively. Cash used in financing activities during the six months ended June 30, 2024 was comprised primarily of a repayment of $200.0 million aggregate principal on the 2024 Convertible Notes upon maturity in June 2024, partially offset by $125.0 million of net borrowings under the Revolving Credit Facility and $10.8 million of proceeds from stock option exercises and employee stock purchases.

Previous wording

Under our collaboration with AbbVie for North America, total net sales of LINZESS in the U.S., as recorded by AbbVie, are reduced by commercial costs incurred by each party, and the resulting amount is shared equally between us and AbbVie. Additionally, we receive royalties from AbbVie based on sales of linaclotide in its licensed territories outside of the U.S. We believe revenues from our LINZESS partnership for the U.S. with AbbVie will continue to constitute a significant portion of our total revenue for the foreseeable future and we cannot be certain that such revenues, as well as the revenues from our other commercial activities, will continue to enable us to generate positive cash flows, or to do so in the timeframes we expect. We also anticipate that we will continue to incur substantial expenses for the next several years as we further develop and commercialize linaclotide in the U.S., develop** **and commercialize other product candidates, including apraglutide, and invest in building our pipeline through internal or external opportunities. We believe that our cash and cash equivalents on hand as of March 31, 2025 and our expected cash inflows from operations, will be sufficient to meet our projected operating needs at least through the next twelve months from the issuance of these financial statements. We have long-term debt obligations, including convertible notes that mature on June 15, 2026, which are disclosed in Note 8,Debt, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q. There is no assurance we will have sufficient liquidity to meet our long-term debt obligations when they become due.

Current wording

Under our collaboration with AbbVie for North America, total net sales of LINZESS in the U.S., as recorded by AbbVie, are reduced by commercial costs incurred by each party, and the resulting amount is shared equally between us and AbbVie. Additionally, we receive royalties from AbbVie based on sales of linaclotide in its licensed territories outside of the U.S. We believe revenues from our LINZESS partnership for the U.S. with AbbVie will continue to constitute a significant portion of our total revenue for the foreseeable future and we cannot be certain that such revenues, as well as the revenues from our other commercial activities, will continue to enable us to generate positive cash flows, or to do so in the timeframes we expect. We also anticipate that we will continue to incur substantial expenses for the next several years as we further develop and commercialize linaclotide in the U.S., develop** **and commercialize other product candidates, including apraglutide, and invest in building our pipeline through internal or external opportunities. We believe that our cash and cash equivalents on hand as of June 30, 2025, our expected cash inflows from operations, and our borrowing capacity on our Revolving Credit Facility will be sufficient to meet our projected operating needs at least through the next twelve months from the issuance of these financial statements. We have short-term and long-term debt obligations, including convertible notes that mature on June 15, 2026, which are disclosed in Note 8,Debt, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q. There is no assurance we will have sufficient liquidity to meet our debt obligations when they become due.

Previous wording

For a discussion of recent accounting pronouncements, refer to Note 2,Summary of Significant Accounting Policies, to our consolidated financial statements in our 2024 Annual Report on Form 10-K and Note 2,Summary of Significant Accounting Policies, appearing elsewhere in this Quarterly Report on Form 10-Q. We did not otherwise adopt any new accounting pronouncements during the three months ended March 31, 2025 that had a material effect on our condensed consolidated financial statements included in this report.

Current wording

For a discussion of recent accounting pronouncements, refer to Note 2,Summary of Significant Accounting Policies, to our consolidated financial statements in our 2024 Annual Report on Form 10-K and Note 2,Summary of Significant Accounting Policies, appearing elsewhere in this Quarterly Report on Form 10-Q. We did not otherwise adopt any new accounting pronouncements during the three and six months ended June 30, 2025 that had a material effect on our condensed consolidated financial statements included in this report.