Ironwood to Discontinue IW-3718 Development Program Following Results from Planned Efficacy Assessment

Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD), a GI-focused healthcare company, today announced that data from IW-3718-302, one of Ironwood’s two identical Phase III trials evaluating IW-3718 in refractory gastroesophageal reflux disease (GERD), did not meet the pre-specified criteria associated with a planned early efficacy assessment. Following the assessment from an independent data monitoring committee, Ironwood unblinded the data and confirmed that IW-3718-302 did not meet the criteria, including the study’s primary endpoint of achieving a statistically significant improvement in heartburn severity. IW-3718 was generally well-tolerated in study IW-3718-302.

Based on these findings, Ironwood plans to discontinue development of IW-3718, including stopping enrollment in IW-3718-301, the second Phase III trial.

“The outcome of this assessment is deeply disappointing for Ironwood and for patients, given the large unmet need among patients with refractory GERD for an alternative to standard treatment options,” said Mark Mallon, chief executive officer of Ironwood. “IW-3718-302 was a robust and well-conducted Phase III trial, and while we plan to conduct a complete analysis of the data set, we believe these findings are definitive. We extend our gratitude to the patients, investigators and their staff and the entire Ironwood team who played a critical role in advancing IW-3718.”

Ironwood plans to implement an organizational restructuring, reducing headcount by approximately 100 full-time employees, or nearly 35% of the current workforce. This is expected to affect both field-based and home-office employees, including the relevant general & administrative support functions. Following the changes, Ironwood expects to have approximately 210 full-time employees. The planned workforce reduction is anticipated to be substantially completed in the first quarter of 2021.

Ironwood expects these changes to result in total cost savings of greater than $95 million, comprised of at least $45 million in annualized cost savings related to the planned workforce reduction and an additional approximately $50 million related to external spend for IW-3718 previously expected through 2021. Ironwood expects to incur one-time costs of approximately $10 million to $12 million in connection with discontinuing development of IW-3718, primarily associated with the planned reduction in workforce. Such costs are expected to be incurred primarily in the fourth quarter of 2020.

As part of this workforce reduction and in light of recent changes in market dynamics related to the COVID-19 pandemic, Ironwood plans to restructure its commercial organization. Ironwood remains committed to seeking to maximize LINZESS, and commercial efforts are being designed to focus primarily on gastroenterologists where Ironwood has strong, established relationships and a demonstrated ability to educate and impact treatment decisions.

Mark Mallon continued, “We have made the difficult decision to re-align our resources and capital with our business moving forward. With a streamlined organization that we believe will be positioned well to deliver in this current environment, we aim to continue our efforts to maximize LINZESS and to drive further growth and profitability. There are approximately 70 million people today living with GI diseases in the U.S., and we remain steadfast in our mission to advance GI medicines and redefine the standard of care for these patients.”

Conference Call Information

Ironwood will host a conference call and webcast at 8:30 a.m. Eastern Time on Tuesday, September 29, 2020 to discuss the IW-3718 program. Individuals interested in participating in the call should dial (866) 324-3683 (U.S. and Canada) or (509) 844-0959 (international) using conference ID number 3895614. 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 September 29, 2020 running through 11:59 p.m. Eastern Time on October 13, 2020. To listen to the replay, dial (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (international) using conference ID number 3895614. The archived webcast will be available on Ironwood’s website for 14 days beginning approximately one hour after the call has completed.

About IW-3718

IW-3718 is a gastric-retentive investigational formulation of colesevelam. IW-3718 was designed to maintain the bile-acid sequestrant in the stomach over an extended period of time where it was positioned to intercept bile before it reaches the esophagus. Data from non-clinical and clinical studies collectively supported the extended release and gastric-retentive profile of IW-3718.

About Ironwood Pharmaceuticals

Ironwood Pharmaceuticals (Nasdaq: IRWD) is a GI-focused healthcare company dedicated to creating medicines that make a difference for patients living with GI diseases. We discovered, developed and are commercializing linaclotide, the U.S. branded prescription market leader for adults with irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC).

Ironwood was founded in 1998 and is headquartered in Boston, Mass. For more information, please visit our website at www.ironwoodpharma.com or www.twitter.com/ironwoodpharma; information that may be important to investors will be routinely posted in both these locations.

About LINZESS (linaclotide)

LINZESS® is the #1 prescribed brand for the treatment of adult patients with irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC), based on IQVIA data.

LINZESS is a once-daily capsule that helps relieve the abdominal pain and constipation associated with IBS-C, as well as the constipation, infrequent stools, hard stools, straining, and incomplete evacuation associated with CIC. The recommended dose is 290 mcg for IBS-C patients and 145 mcg for CIC patients, with a 72-mcg dose approved for use in CIC depending on individual patient presentation or tolerability. LINZESS should be taken at least 30 minutes before the first meal of the day.

LINZESS is contraindicated in pediatric patients less than 6 years of age. The safety and effectiveness of LINZESS in pediatric patients less than 18 years of age have not been established. In neonatal mice, linaclotide increased fluid secretion as a consequence of GC-C agonism resulting in mortality within the first 24 hours due to dehydration. Due to increased intestinal expression of GC-C, patients less than 6 years of age may be more likely than patients 6 years of age and older to develop severe diarrhea and its potentially serious consequences. In adults with IBS-C or CIC treated with LINZESS, the most commonly reported adverse event was diarrhea.

LINZESS is not a laxative; it is the first medicine approved by the FDA in a class called guanylate cyclase-C (GC-C) agonists. LINZESS contains a peptide called linaclotide that activates the GC-C receptor in the intestine. Activation of GC-C is thought to result in increased intestinal fluid secretion and accelerated transit and a decrease in the activity of pain-sensing nerves in the intestine. The clinical relevance of the effect on pain fibers, which is based on nonclinical studies, has not been established.

In the United States, Ironwood and AbbVie co-develop and co-commercialize LINZESS for the treatment of adults with IBS-C or CIC. In Europe, AbbVie markets linaclotide under the brand name CONSTELLA® for the treatment of adults with moderate to severe IBS-C. In Japan, Ironwood's partner Astellas markets linaclotide under the brand name LINZESS for the treatment of adults with IBS-C or CIC. Ironwood also has partnered with AstraZeneca for development and commercialization of LINZESS in China, and with AbbVie for development and commercialization of linaclotide in all other territories worldwide.

LINZESS Important Safety Information

INDICATIONS AND USAGE

LINZESS (linaclotide) is indicated in adults for the treatment of both irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC).

IMPORTANT SAFETY INFORMATION

Contraindications

• LINZESS is contraindicated in patients less than 6 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

Pediatric Risk

• LINZESS is contraindicated in patients less than 6 years of age. The safety and effectiveness of LINZESS in patients less than 18 years of age have not been established. In neonatal mice, linaclotide increased fluid secretion as a consequence of GC-C agonism resulting in mortality within the first 24 hours due to dehydration. Due to increased intestinal expression of GC-C, patients less than 6 years of age may be more likely than patients 6 years of age and older to develop severe diarrhea and its potentially serious consequences.
• Use of LINZESS should be avoided in pediatric patients 6 years to less than 18 years of age. Although there were no deaths in older juvenile mice, given the deaths in young juvenile mice and the lack of clinical safety and efficacy data in pediatric patients, use of LINZESS should be avoided in pediatric patients 6 years to less than 18 years of age.

Diarrhea

• 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. If severe diarrhea occurs, dosing should be suspended and the patient rehydrated.

Common Adverse Reactions (incidence ≥2% and greater than placebo)

• In IBS-C clinical trials: diarrhea (20% vs 3% placebo), abdominal pain (7% vs 5%), flatulence (4% vs 2%), headache (4% vs 3%), viral gastroenteritis (3% vs 1%) and abdominal distension (2% vs 1%).
• In CIC trials of a 145 mcg dose: diarrhea (16% vs 5% placebo), abdominal pain (7% vs 6%), flatulence (6% vs 5%), upper respiratory tract infection (5% vs 4%), sinusitis (3% vs 2%) and abdominal distension (3% vs 2%). In a CIC trial of a 72 mcg dose: diarrhea (19% vs 7% placebo) and abdominal distension (2% vs <1%).

Please see full Prescribing Information including Boxed Warning: http://www.allergan.com/assets/pdf/linzess_pi

LINZESS® and CONSTELLA® are registered trademarks of Ironwood Pharmaceuticals, Inc. Any other trademarks referred to in this press release are the property of their respective owners. All rights reserved.

Forward-Looking Statements

This press release contains forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about our plans to discontinue development of IW-3718; our intent to stop enrollment in IW-3718-301; our plans to further analyze the full data set, including any findings from such further examination; the extent and timing of the planned workforce reduction, as well as the anticipated timing of completion; the extent of anticipated total cost savings associated with the discontinuation of IW-3718, including the annualized cost savings related to the planned workforce reduction, as well as the anticipated decrease in external spend for IW-3718 and the timing thereof; the extent and timing of anticipated one-time costs in connection with discontinuing development of IW-3718; the planned restructure of our commercial organization, and any associated impacts thereof including our ability to impact treatment decisions; the size of the U.S. population of people living with GI diseases; our strategy, business and operations, including with respect to driving growth and profitability. These forward-looking statements (except as otherwise noted) 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 effectiveness of development and commercialization efforts by us and our partners; preclinical and clinical development, manufacturing and formulation development; the risk that clinical programs and studies may not progress or develop as anticipated, including that studies are delayed or discontinued for any reason, such as safety, tolerability, enrollment, manufacturing, economic or other reasons, including due to the impacts of the COVID-19 pandemic; the risk that findings from our completed nonclinical and clinical studies may not be replicated in later studies; efficacy, safety and tolerability of linaclotide and our product candidates; the risk that the therapeutic opportunities for LINZESS or our product candidates are not as we expect; the difficulty of predicting the extent, financial impact or timing of the planned workforce reduction, including the risk that the actual financial impact could vary materially from the outcomes anticipated; decisions by regulatory and judicial authorities; the risk that we may never get sufficient patent protection for linaclotide and other product candidates, that patents for linaclotide or other products may not provide adequate protection from competition, or that we are not able to successfully protect such patents; the outcomes in legal proceedings to protect or enforce the patents relating to linaclotide and our 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; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; and the risks listed under the heading "Risk Factors" and elsewhere in Ironwood's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 and in our subsequent SEC filings. In addition, the COVID-19 pandemic and the associated containment efforts have had a serious adverse impact on the economy, the severity and duration of which are uncertain. Government stabilization efforts will only partially mitigate the consequences. The extent and duration of the impact on our business and operations is highly uncertain. Factors that will influence the impact on our business, operations and financial results include the duration and extent of the pandemic, the extent of imposed or recommended containment and mitigation measures, and the general economic consequences of the pandemic. The pandemic could have a material adverse impact on our business, operations and financial results for an extended period of time.

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