Ironwood Pharmaceuticals Provides Fourth Quarter 2012 Investor Update

  Ironwood Pharmaceuticals Provides Fourth Quarter 2012 Investor Update

  *Initiated Promotional Efforts for LINZESS™ (linaclotide) with Forest in
    December 2012; LINZESS Available to Patients in Pharmacies Across U.S.;
    Forest Reported $19.2 Million in Net Sales of LINZESS in Fourth Quarter
  *Almirall Received Approval from European Commission for Constella^®
    (linaclotide) in E.U.
  *Formed Strategic Collaboration with AstraZeneca to Co-Develop and
    Co-Commercialize linaclotide in China; Gained Rights to Co-Promote
    NEXIUM^® (esomeprazole magnesium) ^ in U.S.
  *Advanced Pipeline of Early Development Candidates and Discovery Research
    Efforts, and Continued to Explore Development Opportunities to Broaden
    LINZESS Label, both within Current Indications and Potential Future
  *Ended 2012 with $168 Million of Cash, Cash Equivalents and
    Available-for-Sale Securities; Completed $175 Million Debt Offering in
    January 2013

Business Wire

CAMBRIDGE, Mass. -- January 15, 2013

Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD) today provided an update on its
fourth quarter 2012 and recent business activities.

“The past several months have been a remarkable period of time for us at
Ironwood – particularly with the commercial launch of LINZESS in the U.S. and
the approval of Constella in the E.U.,” said Peter Hecht, Chief Executive
Officer of Ironwood. “In December, the joint Ironwood and Forest team stocked
LINZESS in over 44,000 pharmacies across the U.S. and began educating over
85,000 physicians. Looking ahead, we will continue to focus on the LINZESS
launch, while also exploring development opportunities to strengthen the
clinical profile of linaclotide and broaden the product label in other
indications and geographies. We will also continue to progress our other
pipeline programs, including potential linaclotide-based combination products,
IW-9179 for functional dyspepsia and IW-2143 for anxiety, among others.
Through these activities, we continue to work towards our overarching goals of
delivering differentiated medicines to patients and value to our

Fourth Quarter 2012 and Recent Highlights

LINZESS (linaclotide)

  *LINZESS net product sales, as reported by Forest Laboratories, Inc., were
    $19.2 million in the fourth quarter of 2012.
  *In December 2012, Ironwood and Forest initiated promotional efforts for
    LINZESS in the United States, with more than 1,400 sales specialists now
    educating over 85,000 physicians. LINZESS is available in more than 44,000
    pharmacies. The United States Food and Drug Administration (FDA) approved
    LINZESS in August 2012 as a once-daily treatment for adult men and women
    suffering from irritable bowel syndrome with constipation (IBS-C) or
    chronic idiopathic constipation (CIC). LINZESS can help to relieve
    abdominal pain and constipation associated with IBS-C, as well as
    constipation, infrequent bowel movements, incomplete evacuation and hard
    stools associated with CIC.
  *Ironwood and Forest are exploring development opportunities to strengthen
    the clinical profile of LINZESS within its indicated population and to
    expand the product label for broader patient populations and indications,
    as well as exploring the potential for linaclotide-based combination
    products. In July 2012, the companies initiated a Phase 3b clinical trial
    to further characterize the effect of LINZESS on abdominal symptoms in
    patients with CIC. Ironwood expects to report data from this trial in the
    second half of 2013.

Constella (linaclotide)

  *In November 2012, Ironwood and Almirall, S.A. announced that Almirall
    received marketing authorization from the European Commission for
    Constella^® (linaclotide 290mcg) for the symptomatic treatment of moderate
    to severe IBS-C in adults in the European Union. Initial launches in
    Europe are expected in the first half of 2013.

Linaclotide (Rest of World)

  *In October 2012, Ironwood and AstraZeneca formed a collaboration to
    co-develop and co-commercialize linaclotide in China. The two companies
    are jointly responsible for strategic oversight of the development and
    commercialization of linaclotide in China. AstraZeneca will have primary
    responsibility for local operational execution, including clinical
    development. In addition, as part of the arrangement, Ironwood’s sales
    force will promote AstraZeneca’s NEXIUM in the United States.
  *In October 2012, Astellas initiated a double-blind, placebo-controlled,
    dose-ranging Phase 2 clinical trial of linaclotide in more than 500
    Japanese adult patients with IBS-C.

Research & Development

  *In addition to exploring further linaclotide development opportunities,
    Ironwood continues to advance its pipeline, which includes early
    development candidates and discovery research efforts focused on
    gastrointestinal disease, central nervous system disorders, allergy
    conditions and cardiovascular disease.
  *In October 2012, the company advanced its second GC-C agonist, IW-9179,
    into a Phase 2 clinical trial designed to evaluate its safety in
    approximately 80 patients with functional dyspepsia. Functional dyspepsia
    is a condition characterized by upper gastrointestinal pain, fullness,
    early satiety and bloating, and is estimated to affect more than 35
    million people in the United States. There are a limited number of
    approved treatment options for functional dyspepsia.
  *In December 2012, Ironwood advanced its investigational anti-anxiety
    compound, IW-2143, into a Phase 1 clinical trial. IW-2143 was in-licensed
    from Bionomics Limited in January 2012.
  *In December 2012, Ironwood expanded its research collaboration with
    Protagonist Therapeutics, Inc. The collaboration, originally announced in
    January 2011, leverages Protagonist’s proprietary disulfide‐rich peptide
    (DRP) technology platform and is aimed at providing Ironwood with novel
    peptides against targets for potential development in therapeutic areas
    with significant unmet medical needs.


  *Ironwood ended 2012 with approximately $168 million of cash, cash
    equivalents and available-for-sale securities. Ironwood used approximately
    $70 million of net cash for operations during the year ended December 31,
  *In January 2013, Ironwood completed a debt offering of $175 million
    bearing an 11% interest rate.

Conference Call Information

Ironwood will host a conference call and webcast at 8:30 a.m. Eastern Time, on
Tuesday, January 15, to discuss its fourth quarter 2012 and recent business
activities. Individuals interested in participating in the call should dial
(877) 643-7155  (U.S. and Canada) or (914) 495-8552 (international) using
conference ID number 83300312. To access the webcast, please visit the
Investors section of Ironwood’s website at 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 today at approximately 11:30 a.m. Eastern Time, running
through 11:59 p.m. Eastern Time on January 22, 2013. To listen to the replay,
dial (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (international) using
conference ID number 83300312. The archived webcast will be available on
Ironwood’s website for 14 days.

About LINZESS (linaclotide)

LINZESS is the first and only guanylate cyclase-C (GC-C) agonist approved by
the FDA for the treatment of both irritable bowel syndrome with constipation
(IBS-C) and chronic idiopathic constipation (CIC) in adults. 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 and incomplete evacuation associated with CIC. The recommended dose is
290 mcg for IBS-C patients and 145 mcg for CIC patients. LINZESS should be
taken at least 30 minutes before the first meal of the day.

LINZESS is thought to work in two ways based on nonclinical studies. LINZESS
binds to the GC-C receptor locally, within the intestinal epithelium.
Activation of GC-C results in increased intestinal fluid secretion and transit
and a reduction in visceral pain, which is thought to be mediated by decreased
activity of pain-sensing nerves. The clinical relevance of the effect on pain
fibers in nonclinical studies has not been established.

In placebo-controlled Phase III clinical trials of more than 2,800 adults,
LINZESS was shown to reduce abdominal pain in IBS-C patients and increase
bowel movement frequency in both IBS-C patients and CIC patients. Improvement
in abdominal pain and constipation occurred in the first week of treatment and
was maintained throughout the 12-week treatment period. Maximum effect on
abdominal pain was seen at weeks 6-9 and maximum effect on constipation
occurred during the first week. When a subset of LINZESS-treated patients in
the trials were switched to placebo, they reported their symptoms returned
toward pretreatment levels within one week, while placebo-treated patients
switched to LINZESS reported symptom improvements. LINZESS is contraindicated
in pediatric patients up to 6 years of age. The use of LINZESS in pediatric
patients 6 through 17 years of age should be avoided. In nonclinical studies,
administration of a single, clinically relevant adult oral dose of linaclotide
caused deaths in young juvenile mice. LINZESS has not been studied in
pediatric patients. In adults with IBS-C or CIC treated with LINZESS, the most
commonly reported adverse event was diarrhea.

Ironwood and Forest Laboratories, Inc. are co-promoting LINZESS in the United
States. Linaclotide was also approved by the European Commission for the
treatment of adults in the European Union with IBS-C and will be marketed
under the brand name Constella^® through a license agreement between Ironwood
and Almirall, S.A. Ironwood also has partnered linaclotide with Astellas
Pharma Inc. for development and commercialization in Japan and certain other
Asian countries and with AstraZeneca for development and commercialization in

About Ironwood Pharmaceuticals

Ironwood Pharmaceuticals (NASDAQ: IRWD) is an entrepreneurial pharmaceutical
company dedicated to the art and science of great drugmaking. Ironwood is
located in Cambridge, Mass. To learn more, visit

Important Safety Information

LINZESS is contraindicated in pediatric patients up to 6 years of age. Use
should be avoided in pediatric patients 6 through 17 years of age. In
nonclinical studies, administration of a single, clinically relevant adult
oral dose of linaclotide caused deaths in young juvenile mice.


  *LINZESS is contraindicated in pediatric patients up to 6 years of age.
  *LINZESS is contraindicated in patients with known or suspected mechanical
    gastrointestinal obstruction.

Warnings and Precautions

Pediatric Risk

  *LINZESS is contraindicated in pediatric patients up to 6 years of age. In
    nonclinical studies, deaths occurred within 24 hours in young juvenile
    mice (1 to 3 week-old mice; approximately equivalent to human pediatric
    patients less than 2 years of age) following administration of one or two
    daily oral doses of linaclotide.
  *Use of LINZESS should be avoided in pediatric patients 6 through 17 years
    of age. Linaclotide did not cause deaths in older juvenile mice
    (approximately equivalent to humans age 12 to 17 years). 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 through
    17 years of age.


  *Diarrhea was the most common adverse reaction of LINZESS-treated patients
    in the pooled IBS-C and CIC double-blind placebo-controlled trials. Severe
    diarrhea was reported in 2% of LINZESS-treated patients. The incidence of
    diarrhea was similar in the IBS-C and CIC populations.
  *Patients should be instructed to stop LINZESS if severe diarrhea occurs
    and to contact their healthcare provider, who should consider dose

Adverse Reactions

  *In IBS-C clinical trials, the most common adverse reactions in
    LINZESS-treated patients (incidence ≥2% and greater than placebo) were
    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 clinical trials, the most common adverse reactions in
    LINZESS-treated patients (incidence ≥2% and greater than placebo) were
    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%).

Drug Interactions

No drug-drug interaction studies have been conducted with LINZESS. Linaclotide
and its active metabolite are not measurable in plasma following
administration of the recommended clinical doses; hence, no systemic drug-drug
interactions or drug interactions mediated by plasma protein binding of
linaclotide or its metabolite are anticipated.

Linaclotide does not interact with the cytochrome P450 enzyme system based on
the results of in vitro studies. In addition, linaclotide is neither a
substrate nor an inhibitor of the efflux transporter P-glycoprotein (P-gp).
Ironwood Pharmaceuticals, Inc.

This press release contains forward looking statements. Investors are
cautioned not to place undue reliance on these forward‐looking statements,
including, but not limited to, the potential for LINZESS as a treatment option
for adults in the United States suffering from IBS-C and CIC, the availability
of LINZESS in pharmacies in the U.S., Ironwood’s and Forest’s intended
non-clinical and clinical development activities for linaclotide and
Ironwood’s intended activities and associated timelines for the other product
candidates and early development programs in its pipeline, the anticipated
launch timeline for Constella in the European Union, the development and
potential commercialization of linaclotide in China, and the potential for
IW-9179 as a treatment option for adults suffering from functional dyspepsia.
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 the
risks that the commercial launch of LINZESS in the U.S. is not executed as
anticipated, Ironwood or its partners are unable to manufacture or distribute
a sufficient commercial supply of LINZESS, adoption of LINZESS by physicians
or patients is faster or slower than anticipated, Almirall is unable to obtain
sufficient pricing or reimbursement for Constella in countries in the European
Union, serious adverse events arise in patients that are deemed to be
definitely or probably related to linaclotide treatment, the incidence or
severity of diarrhea in patients treated with linaclotide is higher than
expected, or advancements in the further development of linaclotide in
additional patient populations or indications, or in the development of other
products or early development programs in Ironwood’s pipeline, do not proceed
as expected, as well as risks related to the difficulty of predicting
regulatory approvals and the acceptance of and demand for new pharmaceutical
products. Applicable risks also include those that are listed in Ironwood’s
Quarterly Report on Form 10‐Q for the quarter ended September 30, 2012, in
addition to the risk factors that are listed from time to time in Ironwood’s
Annual Reports on Form 10‐K, Quarterly Reports on Form 10‐Q and any subsequent
SEC filings. Ironwood undertakes no obligation to update these forward‐looking
statements to reflect events or circumstances occurring after this press
release. These forward‐looking statements speak only as of the date of this
press release. All forward‐looking statements are qualified in their entirety
by this cautionary statement.

Condensed Consolidated Balance Sheets

(in thousands)

                                                 December 31,     December 31,

                                                 2012             2011
Cash, cash equivalents and                       $   168,228      $   164,016
available-for-sale securities
Accounts receivable, net                             1,487            652
Inventory                                            6,699            —
Prepaid expenses and other current assets           8,026           2,899
Total current assets                                 184,440          167,567
Property and equipment, net                          37,537           33,625
Other assets                                        7,930           7,785
Total assets                                     $   229,907      $   208,977
Liabilities and Stockholders’ Equity
Accounts payable and accrued expenses            $   48,561       $   24,568
Current portion of capital lease                     261              233
Current portion of deferred rent                     2,735            4,042
Current portion of deferred revenue                 3,381           36,291
Total current liabilities                            54,938           65,134
Capital lease obligations                            308              422
Deferred rent                                        11,593           12,435
Deferred revenue                                     18,024           21,130
Other liabilities                                    992              —
Total stockholders’ equity                          144,052         109,856
Total liabilities and stockholders’ equity       $   229,907      $   208,977

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

                     Three Months Ended                Year Ended

                     December 31,                      December 31,
                     2012           2011              2012           2011
Revenue              $ 26,980        $ 32,154          $ 150,245       $ 65,871
Cost and
Cost of                965             —                 965             —
Research and           28,273          24,224            113,474         86,093
general and            33,274          13,925            92,538          45,546
Collaboration         8,368          1,037            16,030         374
Total cost and        70,880         39,186           223,007        132,013
Loss from              (43,900)        (7,032)           (72,762)        (66,142)
Other income          45             58               138            1,293
(expense), net
Net loss
before income          (43,855)        (6,974)           (72,624)        (64,849)
tax expense
Income tax            —              —                —              3
Net loss             $ (43,855)      $ (6,974)         $ (72,624)      $ (64,852)
Net loss per
share —basic         $ (0.41)        $ (0.07)          $ (0.68)        $ (0.65)
and diluted
average number
of common
used in net
loss per share         107,493,026     100,394,800       106,402,639     99,874,790
—basic and


Ironwood Pharmaceuticals, Inc.
Media Relations
Lisa Buffington, 617-374-5103
Vice President, Corporate Communications
Investor Relations
Meredith Kaya, 617-374-5082
Associate Director, Investor Relations
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