Ironwood Pharmaceuticals Initiates Apraglutide NDA Submission, Highlights Compelling New Data and Updates Corporate Structure to Position for the Future

Rhea-AI Summary

Ironwood Pharmaceuticals (NASDAQ: IRWD) announced significant corporate restructuring and updates on its apraglutide drug development. The company has initiated a rolling NDA submission for apraglutide in short bowel syndrome (SBS), with completion expected in Q3 2025. New data from the open-label extension study showed increased patient success in achieving enteral autonomy.

The company is implementing a 50% workforce reduction, primarily affecting its field force, to optimize costs while maintaining LINZESS growth and supporting apraglutide development. The restructuring is expected to generate $55-60 million in annual operating expense savings.

For FY2025, Ironwood projects LINZESS U.S. net sales of $800-850 million, total revenue of $260-290 million, and adjusted EBITDA exceeding $85 million. The company has also appointed Greg Martini as CFO and Tammi Gaskins as CCO to strengthen its leadership team.

Positive

• New data shows increased success in patients achieving enteral autonomy with apraglutide
• Expected annual operating expense savings of $55-60 million from restructuring
• Projected adjusted EBITDA >$85 million for 2025
• LINZESS maintaining high single-digit prescription demand growth

Negative

• 50% workforce reduction implementation
• Expected restructuring charges of $20-25 million in H1 2025
• Discontinuation of STARGAZE Phase 2 study for apraglutide in Graft-versus-Host Disease
• LINZESS facing pricing pressure due to Medicare Part D redesign

Insights

Financial & Biotech Analyst

The announced corporate restructuring represents a pivotal strategic shift with significant financial implications. The 50% workforce reduction, primarily affecting the field force, is expected to generate $55-60 million in annual operating savings, translating to a $40-45 million benefit to annual profits. This aggressive cost-cutting measure appears well-timed given the pricing pressures on LINZESS.

The financial guidance for 2025 reveals both opportunities and challenges. While LINZESS prescriptions are projected to grow at high single digits, pricing pressures from Medicare Part D redesign will impact net sales, projected at $800-850 million. The adjusted EBITDA guidance of >$85 million demonstrates management's commitment to maintaining profitability during this transition.

The apraglutide program's progress is particularly noteworthy. The extension study data showing 27 patients achieving enteral autonomy strengthens the drug's clinical profile. The decision to include long-term extension data in the NDA submission, while delaying completion to Q3 2025, could enhance approval prospects and potential market positioning.

The strategic decision to wind down the STARGAZE study for Graft-versus-Host Disease indicates a laser focus on the core SBS opportunity. This market, while smaller, offers higher pricing potential and less competition than traditional GI markets. The restructuring charges of $20-25 million in H1 2025 represent a reasonable investment for this strategic pivot.

– Data from open label extension study of apraglutide demonstrate further increase in patients achieving enteral autonomy –

– Initiated rolling NDA submission, now to include long-term extension data given continued clinical improvement over time, with submission completion expected in Q3 2025 –

– Organizational restructuring positions the Company to realize the potential of apraglutide in SBS and long-term success in GI and rare disease –

– Expects adjusted EBITDA excluding stock-based compensation of greater than $85 million in 2025, driven by strong LINZESS prescription demand growth and expense management to offset pricing headwinds –

- Greg Martini named Chief Financial Officer and Tammi Gaskins named Chief Commercial Officer to further strengthen experienced leadership team in Ironwood’s next stage of growth –

BOSTON--(BUSINESS WIRE)-- Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD), a biotechnology company developing and commercializing life-changing therapies for people living with gastrointestinal (GI) and rare diseases, today announced a streamlined strategic focus on advancing and realizing the potential of apraglutide for the treatment of short bowel syndrome (“SBS”) patients who are dependent on parenteral support. In line with this strategic update, Ironwood will be reducing its workforce by approximately 50%. This reorganization is intended to position the company for long-term growth.

“Ironwood’s long track record of success stems from our ability to be nimble as an organization by focusing on both significant medical needs and financial performance. While LINZESS continues to grow prescription demand, given the impact of ongoing pricing pressures, we are taking steps to reduce Ironwood costs that are predominantly associated with the brand. By doing so, we believe we can continue to generate profits and cash flows and support the successful development of apraglutide. LINZESS remains an important part of our strategy, along with continued investment in apraglutide for SBS patients who are dependent on parenteral support, which we believe will deliver value to our stakeholders and ultimately bring a new therapy to patients with great unmet need,” said Tom McCourt, chief executive officer of Ironwood.

“We have made important progress by initiating our rolling new drug application (“NDA”) submission and announcing new data from our open label extension study, STARS Extend, demonstrating an increased number of patients on apraglutide achieving enteral autonomy over time. We plan to include the long-term extension data in our NDA submission, in addition to the robust efficacy and tolerability data from STARS, the largest Phase 3 clinical trial ever conducted in SBS-IF patients. With these new data, we are even more encouraged about apraglutide’s potential to help SBS patients who are dependent on parenteral support,” said Mike Shetzline, M.D., Ph.D, chief medical officer, senior vice president and head of research and drug development at Ironwood.

"Our apraglutide launch planning is well underway. Under Tammi’s leadership we have strong commercial capabilities to support the future success of apraglutide, if approved. As a rare disease therapy, this will require a very targeted promotional effort while providing a robust patient hub service model,” Mr. McCourt added.

“While the reduction in force is particularly difficult, these changes are necessary to continue to progress apraglutide and maintain our profitability and cash flow goals, to support Ironwood’s long-term growth. I want to personally thank all the employees affected by this restructuring for their dedication to our mission and their many contributions to the company,” added Mr. McCourt.

Recent Pipeline and Corporate Updates:

Apraglutide Open Label Extension Study, STARS Extend:

• The extension study data demonstrate that more patients weaned off parenteral support with longer exposure to apraglutide.
• An analysis of long-term extension data also showed that 27 apraglutide-dosed patients achieved enteral autonomy, which is the ultimate goal of SBS patients who are dependent on parenteral support.

Strategic Reorganization:

• Reorganization is primarily driven by the elimination of Ironwood’s field force.
• Ironwood also has decided to wind down the Phase 2 exploratory study, STARGAZE, of apraglutide in Graft-versus-Host Disease to further focus its resources and investments.
• Ironwood expects to incur restructuring charges of approximately $20 to $25 million, which are anticipated to be incurred primarily in the first half of 2025.
• Ironwood expects to realize, as a result of the strategic reorganization, approximately $55 to $60 million of annual operating expense savings, resulting in $40 to $45 million benefit to annual profits, net of impact to collaborative arrangements revenue.

Leadership Updates:

• Greg Martini has been promoted to Senior Vice President, Chief Financial Officer. Greg joined Ironwood in 2017 and has served in roles of increasing responsibility, most recently as Vice President, Strategic Finance and Investor Relations since 2022.
• Tammi Gaskins has been appointed Senior Vice President, Chief Commercial Officer. Tammi joined Ironwood in 2020 and has been integral in shaping the apraglutide commercial launch plan and driving the performance of LINZESS. Prior to joining Ironwood, Tammi spent 20 years at AstraZeneca in various commercial leadership positions across different therapeutic areas.

Full Year 2025 Financial Guidance:
Ironwood is providing FY 2025 financial guidance.

	FY 2025 Guidance (January 2025)
LINZESS U.S. 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 revenue 1	$260 - $290 million
Adjusted EBITDA 2	>$85 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.

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.

Conference Call Information

Ironwood will host a conference call and webcast at 4:30 p.m. Eastern Time on Wednesday, January 29, 2025 to discuss the recent corporate updates. Individuals interested in participating in the call should dial (888) 596-4144 (U.S. and Canada) or (646) 968-2525 (international) using conference ID number and event passcode 2530602. To access the webcast, please visit the Investors section of Ironwood’s website at www.ironwoodpharma.com. The call will be available for replay via telephone starting at approximately 6:30 p.m. Eastern Time on January 29, 2025, running through 11:59 p.m. Eastern Time on February 12, 2025. To listen to the replay, dial (800) 770-2030 (U.S. and Canada) or (609) 800-9909 (international) using conference ID number 2530602. The archived webcast will be available on Ironwood’s website for 1 year beginning approximately one hour after the call has completed.

About Ironwood Pharmaceuticals

Ironwood Pharmaceuticals (Nasdaq: IRWD), an S&P SmallCap 600® company, 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, and has additional operations 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 generate profits and cash flow and support the successful development of apraglutide; the belief that LINZESS along with continued investment in apraglutide will help to deliver value to stakeholders and bring therapy to patients; Ironwood’s plan to include long-term extension data in its apraglutide NDA submission and the expected timing to complete the submission; Ironwood’s financial performance and results, and guidance and expectations related thereto; LINZESS U.S. net sales, total revenue and adjusted EBITDA in 2025; Ironwood's expectations regarding the timing and financial impact to be incurred in connection with the workforce reduction, as well as the timing of the completion of all impacts of the workforce reduction. These forward-looking statements speak only as of the date of this press release, and Ironwood undertakes no obligation to update these forward-looking statements. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement. Applicable risks and uncertainties include those related to the effectiveness of development and commercialization efforts by us and our partners; preclinical and clinical development, manufacturing and formulation development of linaclotide, apraglutide, IW-3300, and our other product candidates; the risk of uncertainty relating to pricing and reimbursement policies in the U.S., which, if not favorable for our products, could hinder or prevent our products’ commercial success; the risk that healthcare reform and other governmental and private payor initiatives may have an adverse effect upon or prevent our products’ or product candidates’ commercial success; the risk that apraglutide will not be approved by the FDA or other regulatory agencies; the risk that clinical programs and studies, including for linaclotide pediatric programs, apraglutide and IW-3300, may not progress or develop as anticipated, including that studies are delayed or discontinued for any reason, such as safety, tolerability, enrollment, manufacturing, economic or other reasons; the risk that findings from our ongoing and completed nonclinical studies and clinical trials may not be replicated in later trials or further data analyses and earlier-stage clinical trials may not be predictive of the results we may obtain in later-stage clinical trials or of the likelihood of regulatory approval; the risk of competition or that new products may emerge that provide different or better alternatives for treatment of the conditions that our products are approved to treat; the risk that we are unable to execute on our strategy to in-license externally developed products or product candidates; the risk that we are unable to successfully partner with other companies to develop and commercialize products or product candidates; the efficacy, safety and tolerability of linaclotide and our product candidates; the risk that the commercial and therapeutic opportunities for LINZESS, apraglutide or our other product candidates are not as we expect; decisions by regulatory and judicial authorities; the risk we may never get additional patent protection for linaclotide, apraglutide and other product candidates, that patents for linaclotide, apraglutide or other products may not provide adequate protection from competition, or that we are not able to successfully protect such patents; the risk that we are unable to manage our expenses or cash use, or are unable to commercialize our products as expected; the risk that the development of any of our linaclotide pediatric programs, apraglutide and/or IW-3300 is not successful or that any of our product candidates does not receive regulatory approval or is not successfully commercialized; outcomes in legal proceedings to protect or enforce the patents relating to our products and product candidates, including abbreviated new drug application litigation; the risk that financial and operating results may differ from our projections; developments in the intellectual property landscape; challenges from and rights of competitors or potential competitors; the risk that our planned investments do not have the anticipated effect on our company revenues; developments in accounting guidance or practice; Ironwood’s or AbbVie’s accounting practices, including reporting and settlement practices as between Ironwood and AbbVie; the risk that our indebtedness could adversely affect our financial condition or restrict our future operations; and the risks listed under the heading “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2023, and in our subsequent Securities and Exchange Commission filings.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250129150325/en/

Company contact:

Greg Martini

gmartini@ironwoodpharma.com

Investors:

Precision AQ (formerly Stern Investor Relations)

Stephanie Ascher

Stephanie.Ascher@precisionaq.com

Source: Ironwood Pharmaceuticals, Inc.

FAQ

When will Ironwood Pharmaceuticals (IRWD) complete its apraglutide NDA submission?

Ironwood Pharmaceuticals expects to complete its rolling NDA submission for apraglutide in Q3 2025.

How much will IRWD save from its 2025 restructuring plan?

The strategic reorganization is expected to generate approximately $55-60 million in annual operating expense savings.

What are Ironwood's (IRWD) revenue projections for LINZESS in 2025?

Ironwood projects LINZESS U.S. net sales of $800-850 million for FY2025.

How many employees will be affected by IRWD's 2025 restructuring?

Ironwood will be reducing its workforce by approximately 50%, primarily affecting its field force.

What is IRWD's projected adjusted EBITDA for 2025?

Ironwood expects adjusted EBITDA excluding stock-based compensation to be greater than $85 million in 2025.