Ironwood Pharmaceuticals Reports First Quarter 2025 Results

5/7/25 7:05:00 AM ET

Biotechnology: Pharmaceutical Preparations

Health Care

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– On track to achieve FY 2025 financial guidance; raised adjusted EBITDA guidance to greater than $105 million for 2025 –

– LINZESS® (linaclotide) EUTRx prescription demand growth of 8% year-over-year; in line with full-year expectations –

– Exploring strategic alternatives to maximize stockholder value –

Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), a biotechnology company developing and commercializing life-changing therapies for people living with gastrointestinal (GI) and rare diseases, today reported its first quarter 2025 results and recent business performance.

"LINZESS demand continues to be strong, and we remain on track to meet our full-year 2025 guidance and further, recently raised our adjusted EBITDA guidance. We are making a concerted effort to maximize stockholder value across all areas of the business, including advancing plans for a confirmatory Phase 3 trial for apraglutide and exploring strategic alternatives," said Tom McCourt, chief executive officer of Ironwood.

First Quarter 2025 Financial Highlights¹(in thousands, except for per share amounts)

	Q1 2025	Q1 2024
Total revenue²	$41,143	$74,877
Total costs and expenses	70,251	63,857
GAAP net loss	(37,386)	(4,162)
GAAP net loss – per share basic and diluted	(0.23)	(0.03)
Adjusted EBITDA³	(4,742)	21,142
Non-GAAP net loss	(23,228)	(2,933)
Non-GAAP net loss per share – basic and diluted	(0.14)	(0.02)

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

²Total revenue for three months ended March 31, 2025 reflects a change in estimate of AbbVie gross-to-net rebate reserves, which was refined to reflect rebates owed for units dispensed in the first quarter of 2025. Ironwood does not expect first quarter LINZESS U.S. net sales results or this change in estimate to impact the full-year results.

³Adjusted EBITDA is calculated by subtracting restructuring expenses, net interest expense, income taxes, depreciation and amortization, and stock-based compensation, from GAAP net income. The exclusion of stock-based compensation from Adjusted EBITDA represents an update to our definition of Adjusted EBITDA, effective in the first quarter of 2025. For comparison purposes, first quarter 2024 Adjusted EBITDA has also been updated to reflect this updated definition.

Recent 2025 Corporate Highlights

Apraglutide

In April 2025, Ironwood announced based on a recent discussion with the U.S. Food and Drug Administration (FDA) that a confirmatory Phase 3 trial will be needed to seek approval of apraglutide for patients with short bowel syndrome (SBS) with intestinal failure (IF) who are dependent on parenteral support. Consistent with FDA discussions, Ironwood plans to continue the long-term extension trial and work with the FDA on the design of a confirmatory Phase 3 trial and the regulatory path forward.
Apraglutide generated strong safety and efficacy data in the STARS Phase 3 trial, the largest SBS-IF trial to date, and following an analysis of long-term extension trial data, 27 apraglutide-dosed patients dependent on parenteral support achieved enteral autonomy, which is the ultimate goal for these patients. Ironwood believes the data from the STARS and STARS Extend trials will continue to be an integral part of an NDA submission package.

U.S. LINZESS

Prescription Demand: Total LINZESS prescription demand in the first quarter of 2025 was 53 million LINZESS capsules, an 8% increase compared to the first quarter of 2024, 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 $138.5 million in the first quarter of 2025, a 46% decrease compared to $256.6 million in the first quarter of 2024. Ironwood and AbbVie share equally in U.S. brand collaboration profits.
- Q1 2025 LINZESS U.S. net sales reflects a change in AbbVie's estimate of gross-to-net rebate reserves, which is expected to impact the quarterly phasing of LINZESS U.S. net sales but not the full-year results. This change in estimate is based on expected rebates owed for units dispensed by channel in each quarter, which negatively impacted Q1 2025 net sales. Moving forward, gross-to-net rebate reserves will continue to be based on rebates owed for units dispensed by channel in each applicable quarter. Based on historical trends, Ironwood expects rebates owed for units dispensed in subsequent quarters to offset the Q1 2025 change in estimate impact and expects no impact for the full year.
- As a reminder, based on information provided by AbbVie, in Q1 2024, Ironwood recorded a $30 million reduction to collaborative arrangements revenue in its first quarter 2024 financial statements because of a LINZESS gross-to-net change in estimate related to the year ended December 31, 2023.

– LINZESS commercial margin was 52% in the first quarter of 2025, compared to 71% in the first quarter of 2024. 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 $65.9 million in the first quarter of 2025, a 62% decrease compared to $175.6 million in the first quarter of 2024. See the U.S. LINZESS Full Brand Collaboration table at the end of this press release.

Collaboration Revenue to Ironwood: Ironwood recorded $38.8 million in collaboration revenue in the first quarter of 2025 related to sales of LINZESS in the U.S., a 46% decrease compared to $71.7 million for the first quarter of 2024. See the U.S. LINZESS Commercial Collaboration table at the end of the press release.

Corporate Updates

In April 2025, Ironwood announced that Goldman Sachs & Co. LLC has been engaged to explore strategic alternatives for the company.

First Quarter 2025 Financial Results

Total Revenue. Total revenue in the first quarter of 2025 was $41.1 million, compared to $74.9 million in the first quarter of 2024.

– Total revenue in the first quarter of 2025 consisted of $38.8 million associated with Ironwood's share of the net profits from the sales of LINZESS in the U.S., and $2.3 million in royalties and other 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.

– The year-over-year decrease in total revenue reflects a change in AbbVie's gross-to-net rebate reserves in the first quarter of 2025, which is expected to impact the quarterly phasing of LINZESS U.S. net sales in 2025 but is not expected to impact the full-year results. See U.S. Brand Collaboration section of this press release above for further explanation.
Total Costs and Expenses. Total costs and expenses in the first quarter of 2025 were $70.3 million, compared to $63.9 million in the first quarter of 2024.

– Total costs and expenses in the first quarter of 2025 consisted of $24.3 million in selling, general and administrative ("SG&A") expenses, $27.4 million in R&D expenses and $18.6 million in restructuring expenses. Total costs and expenses in the first quarter of 2024 consisted of $37.6 million in SG&A expenses, $25.8 million in R&D expenses, and $0.4 million in restructuring expenses.
Interest Expense. Interest expense was $8.1 million in the first quarter of 2025, in connection with Ironwood's convertible senior notes and revolving credit facility. Interest expense was $7.2 million in the first quarter of 2024, in connection with Ironwood's convertible senior notes and revolving credit facility.
Interest and Investment Income. Interest and investment income was $0.9 million in the first quarter of 2025. Interest and investment income was $1.2 million in the first quarter of 2024.
Other. Other income was insignificant in the first quarter of 2025 driven by a gain recorded for pension-related activities.
Income Tax Expense. Ironwood recorded $1.1 million of income tax expense in the first quarter of 2025, 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 $9.1 million of income tax expense in the first quarter of 2024, 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 Loss. GAAP net loss was $37.4 million, or ($0.23) per share (basic and diluted) in the first quarter of 2025, compared to GAAP net loss of $4.2 million, or ($0.03) per share (basic and diluted) in the first quarter of 2024.
Non-GAAP Net Loss. Non-GAAP net loss was $23.2 million, or ($0.14) per share (basic and diluted), in the first quarter of 2025, compared to non-GAAP net loss of $2.9 million, or ($0.02) per share (basic and diluted), in the first quarter of 2024.

– Non-GAAP net loss excludes the impact of 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 ($4.7) million in the first quarter of 2025, compared to $21.1 million in the first quarter of 2024.

– Adjusted EBITDA is calculated by subtracting stock-based compensation, restructuring expenses, net interest expense, income taxes, depreciation and amortization, and acquisition-related costs, from GAAP net loss. See Non-GAAP Financial Measures below.
Cash Flow Highlights. Ironwood ended the first quarter of 2025 with $108.5 million of cash and cash equivalents, compared to $88.6 million of cash and cash equivalents at the end of 2024.

– Ironwood generated $20.0 million in cash from operations in the first quarter of 2025, compared to $45.0 million in cash from operations in the first quarter of 2024.
Ironwood 2025 Financial Guidance. Ironwood continues to expect:

	2025 Guidance (May 2025)
U.S. LINZESS Net Sales	$800 - $850 million High single digit prescription demand growth, more than offset by expected price erosion due to Medicare Part D redesign
Total Revenue¹	$260 - $290 million
Adjusted EBITDA²	>$105 million

¹ Ironwood's U.S. collaborative arrangements revenue includes reimbursement from AbbVie for a portion of Ironwood's commercial expenses related to sales of LINZESS in the U.S. The FY2025 total revenue guidance accounts for the impact of the reduction to Ironwood's commercial expenses and corresponding reimbursement from AbbVie due to Ironwood's strategic reorganization announced in January 2025.

² Adjusted EBITDA is calculated by subtracting restructuring expenses, net interest expense, income taxes, depreciation and amortization and stock-based compensation, from GAAP net income. The exclusion of stock-based compensation from Adjusted EBITDA represents an update to our definition of Adjusted EBITDA, effective in the first quarter of 2025. For purposes of this guidance, we have assumed that Ironwood will not incur material expenses related to business development activities in 2025. 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.

Non-GAAP Financial Measures

Ironwood presents non-GAAP net income (loss) and non-GAAP net income (loss) per share to exclude amortization of acquired intangible assets, restructuring expenses, and acquisition-related costs, all net of tax effect. Non-GAAP adjustments are further detailed below:

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 stock-based compensation, 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 (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.

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

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; Ironwood's financial performance and results, and guidance and expectations related thereto; LINZESS prescription demand growth, LINZESS U.S. net sales, total revenue and adjusted EBITDA in 2025; Ironwood's engagement of Goldman Sachs to explore strategic alternatives; Ironwood's concerted effort to maximize stockholder value across all areas of the business, including advancing plans for a confirmatory Phase 3 trial for apraglutide; the belief that the data from the STARS and STARS Extend trials will continue to be an integral part of an NDA submission package; the expectation that the change in AbbVie's estimate of gross-to-net rebate reserves will impact the quarterly phasing of LINZESS U.S. net sales but not the full-year results and that moving forward, gross-to-net rebate reserves will continue to be based on rebates owed for units dispensed by channel in each applicable quarter; and the expectation that rebates owed for units dispensed in subsequent quarters will offset the Q1 2025 change in estimate impact and will not have impact for the full year . 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 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 and apraglutide, 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 that apraglutide will not be approved by the FDA or other regulatory agencies; 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 and/or apraglutide 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; the risk that our activities to explore potential strategic alternatives may not result in any transaction or maximize stockholder value; 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, 2024, and in our subsequent Securities and Exchange Commission filings.

Condensed Consolidated Balance Sheets (In thousands) (unaudited)


	March 31, 2025	December 31, 2024

Assets
Cash and cash equivalents	$108,481	$88,559
Accounts receivable, net	39,768	81,886
Prepaid expenses and other current assets	12,330	11,923
Total current assets	160,579	182,368
Property and equipment, net	4,256	4,495
Operating lease right-of-use assets	10,619	11,028
Intangible assets, net	2,658	2,860
Deferred tax assets	143,563	144,234
Other assets	5,538	5,923
Total assets	$327,213	$350,908
Liabilities and stockholders' equity
Accounts payable	$5,827	$2,127
Accrued research and development costs	5,627	6,681
Accrued expenses and other current liabilities	33,439	26,849
Current portion of operating lease liabilities	3,204	3,189
Total current liabilities	48,097	38,846
Operating lease liabilities, net of current portion	11,717	12,304
Convertible senior notes, net of current portion	199,160	198,988
Revolving credit facility	385,000	385,000
Other liabilities	17,292	17,105
Total stockholders' deficit	(334,053)	(301,335)
Total liabilities and stockholders' deficit	$327,313	$350,908


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


	Three Months Ended March 31,
	2025		2024
Total revenues¹	$	41,143	$	74,877

Costs and expenses:
Research and development		27,432		25,815
Selling, general and administrative		24,260		37,605
Restructuring		18,559		437
Total costs and expenses		70,251		63,857
Income (loss) from operations		(29,108)		11,020
Other income (expense):

Interest expense and other financing costs		(8,070)		(7,231)

Interest and investment income		869		1,169
Other		37		-
Other income (expense), net		(7,164)		(6,062)
Income (loss) before income taxes		(36,272)		4,958
Income tax expense		(1,114)		(9,120)
GAAP net loss		(37,386)		(4,162)

GAAP net loss per share—basic and diluted	$	(0.23)	$	(0.03)

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¹ Total revenue for three months ended March 31, 2025 reflects a change in estimate of AbbVie gross-to-net rebate reserves, which was refined to reflect rebates owed for units dispensed in the first quarter of 2025. Ironwood does not expect first quarter LINZESS U.S. net sales results or this change in estimate to impact the full-year 2025 results.


Reconciliation of GAAP Results to Non-GAAP Financial Measures
(In thousands, except per share amounts) (unaudited)

A reconciliation between net loss on a GAAP basis and on a non-GAAP basis is as follows:

	Three Months Ended March 31,
	2025		2024
GAAP net loss¹	$	(37,386)	$	(4,162)
Adjustments:
Amortization of acquired intangible assets		202		204
Restructuring expenses		18,559		437
Acquisition-related costs		-		787
Tax effect of adjustments		(4,603)		(199)
Non-GAAP net loss¹	$	(23,228)	$	(2,933)

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

	Three Months Ended March 31,
	2025		2024
GAAP net loss per share – basic	$	(0.23)	$	(0.03)

Adjustments to GAAP net loss per share (as detailed above)		0.09		0.01
Non-GAAP net loss per share – basic and diluted	$	(0.14)	$	(0.02)

Weighted average number of common shares used to calculate net loss per share — basic and diluted		160,974		157,700

____________________

¹ GAAP and non-GAAP net loss for three months ended March 31, 2025 impacted by a change in estimate of AbbVie gross-to-net rebate reserves for LINZESS U.S. net sales, which was refined to reflect rebates owed for units dispensed in the first quarter of 2025. Ironwood does not expect first quarter LINZESS U.S. net sales results or this change in estimate to impact the full-year 2025 results. As a reminder, 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.


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

A reconciliation of GAAP net loss to adjusted EBITDA:

	Three Months Ended March 31,
	2025		2024
GAAP net loss¹	$	(37,386)	$	(4,162)
Adjustments:
Stock-based compensation		5,291		8,385
Restructuring expenses		18,559		437
Interest expense		8,070		7,231
Interest and investment income		(869)		(1,169)
Income tax expense		1,114		9,120
Depreciation and amortization		479		513
Acquisition-related costs		-		787
Adjusted EBITDA^{1, 2}	$	(4,742)	$	21,142

____________________

¹ GAAP net loss and adjusted EBITDA for three months ended March 31, 2025 impacted by a change in estimate of AbbVie gross-to-net rebate reserves for LINZESS U.S. net sales, which was refined to reflect rebates owed for units dispensed in the first quarter of 2025. Ironwood does not expect first quarter LINZESS U.S. net sales results or this change in estimate to impact the full-year 2025 results. As a reminder, first quarter 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.


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

	Three Months Ended March 31,
	2025		2024
LINZESS U.S. net sales as reported by AbbVie^2,3	$	138,477	$	256,600
AbbVie & Ironwood commercial costs, expenses and other discounts⁴		66,907		73,362
Commercial profit on sales of LINZESS	$	71,570	$	183,238
Commercial Margin⁵		52%		71%


Ironwood's share of net profit		35,785		91,619
Reimbursement for Ironwood's commercial expenses⁶		2,983		10,096
Adjustment for Ironwood's estimate of LINZESS gross-to-net reserves⁷		-		(30,000)
Ironwood's U.S. collaborative arrangements revenue^3,7	$	38,768	$	71,715

____________________

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 LINZESS U.S. net sales for three months ended March 31, 2025 impacted by a change in estimate of AbbVie gross-to-net rebate reserves, which was refined to reflect rebates owed for units dispensed in the first quarter of 2025. Ironwood does not expect first quarter LINZESS U.S. net sales results or this change in estimate to impact the full year 2025 results.

⁴ 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.

⁵ Commercial margin is defined as commercial profit on sales of LINZESS as a percent of total LINZESS U.S. net sales.

⁶ Year-over-year decrease reflects impact of the reduction to Ironwood's commercial expenses and corresponding reimbursement from AbbVie due to Ironwood's strategic reorganization announced in January 2025.

⁷ Based on information provided by AbbVie, Ironwood estimated a $60.0 million LINZESS gross-to-net change related to the year ended December 31, 2023, and 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,
	2025		2024
LINZESS U.S. net sales as reported by AbbVie^2,3	$	138,477	$	256,600
AbbVie & Ironwood commercial costs, expenses and other discounts⁴		66,907		73,362
AbbVie & Ironwood R&D Expenses⁵		5,678		7,636
Total net profit on sales of LINZESS^3,6	$	65,892	$	175,602

____________________

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.

⁵ Expenses related to LINZESS in the U.S. are shared equally between Ironwood and AbbVie under the collaboration agreement.

⁶ Total net profit on sales of LINZESS for three months ended March 31, 2024 does not reflect the estimated gross-to-net change related to the year-ended December 31, 2023.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250507245810/en/

Company contact:

Greg Martini

Chief Financial Officer

[email protected]

Investors:

Precision AQ (formerly Stern Investor Relations)

Stephanie Ascher

[email protected]

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Date	Price Target	Rating	Analyst
4/15/2025		Overweight → Equal Weight	Wells Fargo
4/15/2025		Buy → Hold	Jefferies
4/14/2025		Mkt Outperform → Mkt Perform	Citizens JMP
9/9/2024	$5.00	Market Perform	Leerink Partners
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1/17/2024	$21.00	Buy	Craig Hallum
12/14/2023	$20.00	Overweight	Wells Fargo
11/9/2023	$21.00	Buy	Jefferies

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