What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-02-18 compared with 2021-02-17 · 100 added, 95 removed, 384 unchanged (34% of the section changed)

2 unchanged sentences

LINZESS ® (linaclotide), our commercial product, is the first product approved by the United States Food and Drug Administration, or U.S.

FDA, in a class of GI medicines called guanylate cyclase type C agonists and is indicated for adult men and women suffering from irritable bowel syndrome with constipation, or IBS-C, or chronic idiopathic constipation, or CIC.

LINZESS is available to adult men and women suffering from IBS-C or CIC in the United States, or the U.S., and Mexico and to adult men and women suffering from IBS-C in Japan and China.

FDA, in a class of GI medicines called guanylate cyclase type C agonists, or GC-C agonists, and is indicated for adult men and women suffering from irritable bowel syndrome with constipation, or IBS-C, or chronic idiopathic constipation, or CIC.

LINZESS is available to adult men and women suffering from IBS-C or CIC in the United States, or the U.S., and Mexico, IBS-C or chronic constipation in Japan, and IBS-C in China.

Linaclotide is available under the trademarked name CONSTELLA ® to adult men and women suffering from IBS-C or CIC in Canada, and to adult men and women suffering from IBS-C in certain European countries.

We have strategic partnerships with leading pharmaceutical companies to support the development and commercialization of linaclotide throughout the world, including with AbbVie Inc.

(together with its affiliates), or AbbVie, (successor to Allergan plc (together with its affiliates), or Allergan) in the U.S.

(together with its affiliates), or AbbVie, in the U.S.

and all countries worldwide other than China (including Hong Kong and Macau) and Japan, AstraZeneca AB (together with its affiliates), or AstraZeneca, in China (including Hong Kong and Macau) and Astellas Pharma Inc., or Astellas, in Japan.

We also aim to leverage our leading capabilities in GI to bring additional treatment options to GI patients;

for example, we have a U.S.

disease education and promotional agreement with Alnylam Pharmaceuticals, Inc., or Alnylam, for Alnylam’s GIVLAARI® (givosiran) for the treatment of acute hepatic porphyria, or AHP.

On April 1, 2019, we completed a tax-free spin-off of our soluble guanylate cyclase, or sGC, business into a separate publicly traded company, Cyclerion Therapeutics, Inc., or Cyclerion.

In completing the separation of our sGC business into Cyclerion, or the Separation, we advanced our strategy to drive growth as a GI-focused healthcare company, building on our commercial success with LINZESS and advancing our GI development capabilities.

In 2021, we refreshed our GI-focused strategy following our decision to discontinue our IW-3718 and MD-7246 development programs and now are focused on three core priorities:

maximize LINZESS, build our innovative GI pipeline and deliver sustained profits and generate cash flow.

We also aim to leverage our leading development and commercialization capabilities in GI to bring additional treatment options to GI patients;

for example, in November 2021, we entered into a collaboration and license option agreement, or the COUR Collaboration Agreement, with COUR Pharmaceutical Development Company, Inc., or COUR, that grants us an option to acquire an exclusive license, or the License, to research, develop, manufacture and commercialize, in the U.S., products containing CNP-104, a tolerizing immune modifying nanoparticle for the treatment of primary biliary cholangitis, or PBC.

In 2021, we evolved our GI-focused strategy, building on our commercial success and GI development capabilities to focus on three core priorities:

maximize LINZESS, strengthen our innovative GI pipeline, and deliver sustained profits and generate cash flow.

We were incorporated in Delaware on January 5, 1998 as Microbia, Inc.

2 unchanged sentences

Performance Against 2021 Core Priorities

Drive LINZESS Growth

● We recognized approximately $368.6 million in collaborative arrangements revenue related to sales of LINZESS in the U.S.

Maximize LINZESS

● We recognized $400.4 million in collaborative arrangements revenue related to sales of LINZESS in the U.S.

during the year ended December 31, 2021, a 9 % increase compared to the year ended December 31, 2020.

1 unchanged sentence

in 2021 compared to 2020.

FDA approved a supplemental New Drug Application, or NDA, for LINZESS, resulting in updated U.S.

prescribing information with data demonstrating that linaclotide improved the overall abdominal symptoms of bloating, discomfort, and pain in adult patients with IBS-C compared to placebo.

● We and AbbVie entered into settlement agreements with the two remaining generic drug manufacturers resolving all pending patent infringement litigation brought in response to abbreviated New Drug

Applications seeking approval to market generic versions of LINZESS prior to the expiration of our and AbbVie’s applicable patents.

● The United States Patent and Trademark Office granted patents covering the formulation of the 72 mcg dose of LINZESS and methods of using the formulation.

The patents are expected to expire in 2031.

GI Development Portfolio

We and AbbVie announced top-line data from a Phase II trial evaluating MD-7246, a delayed release formulation of linaclotide, in adult patients with abdominal pain associated with irritable bowel syndrome with diarrhea, or IBS-D.

The Phase II trial did not meet its primary or key secondary endpoints.

Based on these findings, we and AbbVie discontinued the development of MD-7246.

We announced that one of our two identical Phase III trials evaluating IW-3718, a gastric retentive formulation of a bile acid sequestrant, in refractory gastroesophageal reflux disease, or refractory GERD, did not meet the pre-specified criteria associated with a planned early efficacy assessment.

Following the assessment from an independent data monitoring committee, we unblinded the data and confirmed that the data from this Phase III trial did not meet the criteria, including the study’s primary endpoint of achieving a statistically significant improvement in heartburn severity.

Based on these findings, we are discontinuing the development of IW-3718.

Deliver Sustainable Profits

● Delivered net income of $106.2 million during the year ended December 31, 2020, reflecting our second full year of profitability.

● In May 2021, we and AbbVie entered into a settlement agreement with a generic drug manufacturer, Teva Pharmaceuticals USA, Inc., or Teva.

Pursuant to the terms of the settlement, we and AbbVie will grant Teva a license to market a generic version of 72 mcg LINZESS beginning March 31, 2029 (subject to U.S.

FDA approval), unless certain limited circumstances, customary for settlement agreements of this nature, occur.

With this settlement agreement, we and AbbVie have settled with the filers of all known ANDAs to date seeking approval to market generic versions of LINZESS.

● In August 2021, the U.S.

FDA approved a revised label for LINZESS based on clinical safety data that had been generated thus far in pediatric studies.

The updated label modified the boxed warning for risk of

serious dehydration and contraindication against use in children to those less than two years of age.

The boxed warning and contraindication previously applied to all children less than 18 years of age and less than six years of age, respectively.

The safety and effectiveness of LINZESS in patients less than 18 years of age have not been established.

Clinical pediatric programs in IBS-C and functional constipation are ongoing.

Strengthen Innovative GI Pipeline

● In November 2021, we entered into the COUR Collaboration Agreement with COUR, a biotechnology company developing novel immune-modifying nanoparticles to treat autoimmune diseases.

The COUR Collaboration Agreement grants us an option to acquire an exclusive license to research, develop, manufacture and commercialize, in the U.S., products containing CNP-104, a potential treatment for PBC, a rare autoimmune disease targeting the liver that affects an estimated 133,000 people in the U.S.

COUR has initiated a clinical study, or the Initial Study, evaluating the safety, tolerability, and pharmacodynamic effects and efficacy of CNP-104 in PBC patients.

In December 2021, the U.S.

FDA granted Fast Track Designation to CNP-104.

● We are advancing IW-3300, a GC-C agonist, for the potential treatment of visceral pain conditions, such as interstitial cystitis / bladder pain syndrome, or IC/BPS, and endometriosis.

IC/BPS affects an estimated 4 to 12 million Americans, according to the Interstitial Cystitis Association.

An estimated 4 million reproductive-age women in the U.S.

have been diagnosed with endometriosis, according to a study published in Gynecologic and Obstetric Investigation.

Both diseases have a limited number of treatment options available.

In December 2021, the U.S.

FDA accepted our Investigational New Drug Application, or IND, and the Phase I clinical program has commenced in the first quarter of 2022 to evaluate the safety and tolerability of IW-3300 in healthy volunteers.

Deliver Sustained Profits and Generate Cash Flow

● Delivered net income of $528.4 million during the year ended December 31, 2021, reflecting our third consecutive full year of profitability.

● We generated $261.9 million in cash from operations during the year ended December 31, 2021, ending the year with $620.1 million in cash and cash equivalents.

● In connection with our decision to discontinue IW-3718 development, we reduced our workforce by approximately 100 full-time employees.

This workforce reduction affected both field-based and home-office employees, including the relevant general and administrative support functions.

We substantially completed the reduction in our workforce in the fourth quarter of 2020.

Impact of the COVID-19 Pandemic on our Business

There continue to be significant uncertainties surrounding the extent and duration of the impact of the COVID-19 pandemic on our business and operations.

The COVID-19 pandemic resulted in changes to our business and operations which impacted our financial condition and results of operations for the year ended December 31, 2020 and the COVID-19 pandemic may have a material adverse impact on our business and financial condition in the future.

There continue to be significant uncertainties surrounding the extent and duration of the impact of the COVID-19 pandemic on our business and operations and the COVID-19 pandemic may have a material adverse impact on our business and financial condition in the future.

We took important actions in 2021 designed to mitigate the impacts of the COVID-19 pandemic on our business.

20 unchanged sentences

FDA to understand the safety and efficacy of LINZESS in pediatric patients.

In August 2021, the U.S.

FDA approved a revised label for LINZESS based on clinical safety data that had been generated thus far in pediatric studies.

The updated label modified the boxed warning for risk of serious dehydration and contraindication against use in children to those less than two years of age.

The boxed warning and contraindication previously applied to all children less than 18 years of age and less than 6 years of age, respectively.

The safety and effectiveness of LINZESS in patients less than 18 years of age have not been established.

Clinical pediatric programs in IBS-C and functional constipation are ongoing.

16 unchanged sentences

AstraZeneca began commercializing LINZESS in China in November 2019.

We are also advancing IW-3300, a GC-C agonist, which is in pre-clinical development for the potential treatment of visceral pain conditions, including Interstitial Cystitis / Bladder Pain Syndrome (IC / BPS) and Endometriosis.

IC/BPS affects an estimated four to 12 million Americans, according to the Interstitial Cystitis Association.

An estimated four million reproductive-age women in the U.S.

We are also advancing IW-3300, a GC-C agonist, which is in Phase I development for the potential treatment of visceral pain conditions, such as IC/BPS and endometriosis.

IC/BPS affects an estimated 4 to 12 million Americans, according to the Interstitial Cystitis Association.

An estimated 4 million reproductive-age women in the U.S.

have diagnosed endometriosis, according to a study published in Gynecologic and Obstetric Investigation in 2017.

Both diseases have a limited number of treatment options available.

Through the COUR Collaboration Agreement, we have an option to acquire an exclusive license from COUR to research, develop, manufacture and commercialize, in the U.S., products containing CNP-104 for the potential treatment of PBC.

PBC affects an estimated 133,000 people in the U.S.

Currently, there is no approved therapy that addresses the root cause of the autoimmune destruction of the bile ducts in PBC.

Collaborations and Partnerships

18 unchanged sentences

has fluctuated for the years ended December 31, 2021, 2020, and 2019 based on timing of milestone and non-contingent payments.

Our collaborative arrangements revenue may continue to fluctuate as a result of the timing and amount of royalties from sales of linaclotide in the markets in which it is currently approved, or any other markets where linaclotide receives approval, as well as clinical and commercial milestones received and recognized under our current and future strategic partnerships outside of the U.S.

Collaboration Agreement for North America with AbbVie

7 unchanged sentences

In January 2017, we and AbbVie entered into an amendment to the European License Agreement.

The European License Agreement, as amended, extended the license to develop and commercialize linaclotide in all countries other than China (including Hong Kong and Macau), Japan, and the countries and territories of North America.

The European License Agreement, as amended, extended the license to

develop and commercialize linaclotide in all countries other than China (including Hong Kong and Macau), Japan, and the countries and territories of North America.

We refer to the additional licensed countries as the Expanded Territory.

12 unchanged sentences

In addition, AstraZeneca may be required to make milestone payments totaling up to $90.0 million contingent on the achievement of certain sales targets and is required to pay tiered royalties to us at rates beginning in the mid-single-digits percent and increasing up to twenty percent based on the aggregate annual net sales of products containing linaclotide in the territory.

Co-Promotion and Other Commercial Agreements

Collaboration and License Option Agreement with COUR

In November 2021, we entered into the COUR Collaboration Agreement with COUR, pursuant to which we have been granted an option to acquire an exclusive license to research, develop, manufacture and commercialize, in the U.S., products containing CNP-104 for the treatment of PBC.

COUR has commenced the Initial Study evaluating the safety, tolerability, and pharmacodynamic effects and efficacy of CNP-104 in PBC patients.

In December 2021, the U.S.

FDA granted Fast Track Designation to CNP-104.

Pursuant to the terms of the COUR Collaboration Agreement, we made an upfront, non-refundable payment of $6.0 million to COUR and we will pay COUR non-contingent payments and milestone payments totaling $13.5 million in connection with certain development activities and regulatory milestones.

After reviewing the data from the Initial Study, if we exercise the option, we will pay COUR $35.0 million in exchange for the exclusive license.

Additionally, we will pay royalties to COUR in the high single digits to low double digits percentage of the aggregated annual net sales in the U.S.

of products containing CNP-104 and COUR will be eligible to receive commercial milestone payments of up to $440.0 million over the term of the agreement.

Other Agreements

Disease Education and Promotional Agreement with Alnylam

In August 2019, we and Alnylam entered into a disease education and promotional agreement for Alnylam’s GIVLAARI for the treatment of AHP and in December 2020, this agreement was amended.

Under the agreement, we received service fees totaling approximately $5.5 million for services rendered from the commencement of the agreement through December 31, 2020 and are eligible to receive royalties based on a percentage of net sales of GIVLAARI that are directly attributable to our promotional efforts over the term of the agreement, which is approximately three years.

In August 2019, we and Alnylam entered into a disease education and promotional agreement, or the Alnylam Agreement, for Alnylam’s GIVLAARI for the treatment of acute hepatic porphyria.

The Alnylam agreement, as

amended, was terminated in June 2021 with an effective termination date of September 30, 2021.

Under the Alnylam Agreement, we received service fees totaling $5.5 million for services rendered from the commencement of the agreement through December 31, 2020, and we remain eligible to receive royalties based on a percentage of net sales of GIVLAARI that are directly attributable to our promotional efforts prior to the termination of the Alnylam agreement through September 30, 2022, which is one year following the termination of the agreement.

Our vision is to become the leading U.S.

2 unchanged sentences

Our strategy is focused on three core priorities:

maximize LINZESS, build our innovative GI pipeline, and deliver sustained profits and generate cash flow.

maximize LINZESS, strengthen our innovative GI pipeline, and deliver sustained profits and generate cash flow.

Key elements of our strategy include:

2 unchanged sentences

● exploring development opportunities to enhance the clinical profile of LINZESS by studying linaclotide in additional indications, populations and formulations to assess its potential to treat various conditions;

● leveraging our U.S.-focused commercial capabilities in marketing, reimbursement, patient engagement and sales, as well as advancing a hybrid (virtual and in-person) selling model and technologies such as telehealth, to expand the commercial potential of LINZESS;

● leveraging our U.S.-focused commercial capabilities in marketing, reimbursement, patient engagement and sales to expand the commercial potential of LINZESS;

collaborating with global partners who share our vision, values, culture, and processes to develop and commercialize linaclotide outside of the U.S.;

4 unchanged sentences

for IBS-C and CIC, according to our internal research.

LINZESS accounts for the majority of prescriptions in the U.S.

LINZESS accounts for the majority of branded prescriptions in the U.S.

for adults with IBS-C and CIC, according to 2021 data from IQVIA Inc.

4 unchanged sentences

by Takeda Pharmaceuticals Limited.

AMITIZA also is being commercialized for the treatment of adults with CIC in certain European countries, including the United Kingdom and Switzerland by Sucampo AG, and for the treatment of chronic constipation in Japan by Mylan N.V., and an authorized generic version of AMITIZA became available in the U.S.

in January 2021 and is being commercialized by Endo International plc.

AMITIZA also is being commercialized for the treatment of adults with CIC in certain European countries, including the United Kingdom and Switzerland by Sucampo AG, and for the treatment of chronic constipation in Japan by Mylan N.V., an authorized generic version of AMITIZA became available in the U.S.

in January 2021 and is being commercialized by Endo International plc., and we expect additional generic versions of AMITIZA may become available.

TRULANCE® (plecanatide) was approved in the U.S.

4 unchanged sentences

In April 2019, US WorldMeds, LLC received approval for the reintroduction of ZELNORM™ (tegaserod) in the U.S.

for the treatment of IBS-C in women under the age of 65.

In September 2019, Ardelyx, Inc.

received approval for ISBRELA™ (tenapanor) in the U.S.

for the treatment of IBS-C in adults.

for the treatment of IBS-C in women under the age of 65, and in November 2021, Ardelyx, Inc., or Ardelyx, announced its plans to launch IBSRELA TM (tenapanor), Ardelyx’s U.S.

FDA approved treatment for IBS-C in adults, in the second quarter of 2022.

ISBRELA is not currently commercially available.

11 unchanged sentences

alone or with partners, and expect to rely on partners to develop and commercialize our drugs in territories outside the U.S.

In executing our

strategy, our goal is to retain oversight over the worldwide development and commercialization of our products by playing an active role in their commercialization or finding partners who share our vision, values, culture and processes.

In executing our strategy, our goal is to retain oversight over the worldwide development and commercialization of our products by playing an active role in their commercialization or finding partners who share our vision, values, culture and processes.

To date, we have established a high-quality commercial organization dedicated to bringing innovative, highly-valued GI healthcare solutions to our customers, including patients, payors, and healthcare providers.

16 unchanged sentences

FDA publication, Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book, seven granted European patents, most of which have been validated in available European countries, ten granted Japanese patents, five granted Chinese patents, 61 issued patents in other foreign jurisdictions, and numerous pending U.S., foreign and Patent Cooperation Treaty, or PCT, patent applications.

We own or jointly own all of the issued patents and pending applications.

We and our partners own, either jointly or individually, all of the issued patents and pending applications.

The issued U.S.

5 unchanged sentences

The granted Chinese patents, which will expire between 2024 and 2032, the granted Japanese patents, which will expire between 2025 and 2036, some of which are subject to granted and potential patent term extension, and the granted patents in other foreign jurisdictions, which will expire between 2024 and 2034, some of which may be subject to potential patent term extension, contain claims directed to the linaclotide molecule, pharmaceutical compositions of linaclotide for use in treating GI disorders, and room temperature stable formulations of linaclotide.

We have pending patent applications in certain countries worldwide that, if issued, will expire between 2024 and 2037 and which include claims covering the linaclotide molecule, methods of using linaclotide to treat GI disorders, the current commercial formulations of linaclotide and uses thereof to treat GI disorders.

We have pending patent applications in certain countries worldwide that, if issued, will expire between 2024 and 2040 and which include claims covering the linaclotide molecule, methods of using linaclotide to treat GI disorders, the current commercial formulations of linaclotide and uses thereof to treat GI disorders and delayed release and other potential formulations of linaclotide.

The patent term of a patent that covers an U.S.

5 unchanged sentences

As a result, the patent term of this patent was extended to August 30, 2026, 14 years from the date of linaclotide’s approval by the U.S.

Similar provisions are available in Europe and certain other foreign jurisdictions to extend the term of a patent that covers an approved drug.

Similar provisions are available in Europe and certain other foreign

jurisdictions to extend the term of a patent that covers an approved drug.

We have received patent term extensions in Japan for several of our linaclotide patents.

We have also received patent term extensions, called supplementary protection certificates, for certain linaclotide patents from several national patent offices in Europe.

We and AbbVie received Notice Letters regarding ANDAs submitted to the U.S.

FDA by five generic drug manufacturers requesting approval to engage in commercial manufacture, use, sale and offer for sale of linaclotide capsules, proposed generic versions of LINZESS.

We and AbbVie received Paragraph IV certification notice letters regarding ANDAs submitted to the U.S.

FDA by five generic drug manufacturers requesting approval to engage in commercial manufacture, use, sale and offer for sale of linaclotide capsules (72 mcg, 145 mcg and 290 mcg), proposed generic versions of LINZESS.

All five manufacturers requested approval for their 145 mcg and 290 mcg generic doses of LINZESS and two requested additional approval for their 72 mcg generic doses of LINZESS.

We and AbbVie have entered into settlement agreements with all five of these generic drug manufacturers providing for licenses to market their 145 mcg and 290 mcg generic versions of LINZESS, beginning as early as March 2029 (subject to U.S.

FDA Approval), unless certain limited circumstances, customary for settlement agreements of this nature, occur.

In addition, we and AbbVie entered into a settlement agreement providing one generic drug manufacturer a license to market its 72 mcg generic version of LINZESS beginning in August 2030 (subject to U.S.

We and AbbVie have entered into settlement agreements with all five of these generic drug manufacturers providing for licenses to market their 72 mcg (if applicable),145 mcg and 290 mcg generic versions of LINZESS, beginning as early as March 2029 (subject to U.S.

FDA Approval), unless certain limited circumstances, customary for settlement agreements of this nature, occur.

16 unchanged sentences

● conducting adequate and well-controlled human clinical trials that establish the safety and efficacy of the product for its specific intended use(s);

● in order to evaluate a drug in humans in the U.S., an Investigational New Drug Application, or IND, must be submitted and come into effect before human clinical trials may begin;

● in order to evaluate a drug in humans in the U.S., an IND must be submitted and come into effect before human clinical trials may begin;

● the submission to the U.S.

41 unchanged sentences

FDA may refer an application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved.

FDA is not bound by the

recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA, the U.S.

31 unchanged sentences

When an ANDA or 505(b)(2) application is submitted, it must contain one of several possible certifications regarding each of the patents listed in the Orange Book for the reference drug.

A certification that

a listed patent is invalid, unenforceable or will not be infringed by the sale of the proposed product is called a “Paragraph IV” certification.

A certification that a listed patent is invalid, unenforceable or will not be infringed by the sale of the proposed product is called a “Paragraph IV” certification.

A certification that provides the date a listed patent will expire, but does not challenge the validity, enforceability or infringement of the patent, is called a “Paragraph III” certification.

40 unchanged sentences

Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and U.S.

FDA approval of a new NDA or NDA

supplement before the change can be implemented.

FDA approval of a new NDA or NDA supplement before the change can be implemented.

An NDA supplement for a new indication typically requires clinical data similar in type and quality to the clinical data supporting the original application for the original indication, and the U.S.

48 unchanged sentences

Laws and regulations have been enacted by the federal government and various states to regulate the sales and marketing practices of pharmaceutical manufacturers with marketed products.

The laws and regulations generally limit financial interactions between manufacturers and health care providers and/or require disclosure to the government and public of such interactions.

The laws and regulations generally limit financial interactions between manufacturers and health care providers, require disclosure to the government and public of such interactions and/or require reporting of pricing information or marketing expenditures.

Many of these laws and regulations contain ambiguous requirements or require administrative guidance for implementation.

Our Legacy Business

On April 1, 2019, we completed the Separation.

At the time of the Separation, Cyclerion’s portfolio was comprised of several sGC stimulators, including olinciguat, a vascular sGC stimulator in Phase II development, praliciguat, a systemic sGC stimulator in Phase II development, and IW-6463, a central nervous system-penetrant sGC stimulator in Phase I development.

In connection with the Separation, certain assets and liabilities related to the sGC business were transferred to Cyclerion, including various U.S.

On April 1, 2019, we completed a tax-free spin off of our soluble guanylate cyclase, or sGC, business into a separate publicly traded company, Cyclerion Therapeutics, Inc., or Cyclerion.

In connection with the separation of our sGC business, or the Separation, certain assets and liabilities related to the sGC business were transferred to Cyclerion, including various U.S.

and foreign patents and Patent Cooperation Treaty patent applications.

The Separation and related agreements are more fully described in Note 3, Cyclerion Separation , to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Uncontrolled Gout Programs

In June 2016, we closed a transaction with AstraZeneca pursuant to which we received an exclusive license to develop, manufacture, and commercialize in the U.S.

products containing lesinurad as an active ingredient, including ZURAMPIC ® and DUZALLO ® .

In January 2018, we commenced an initiative to evaluate the optimal mix of investments for our lesinurad franchise for uncontrolled gout, including ZURAMPIC and DUZALLO.

As part of this effort, in 2018 we began re-allocating resources within our lesinurad franchise to systematically explore a more comprehensive marketing mix in select test markets (with paired controls), while continuing to build market presence for the lesinurad franchise across the country.

In July 2018, we obtained and analyzed the results from the lesinurad franchise test markets.

Data from the test markets did not meet expectations.

In connection with the results, we determined on July 31, 2018 to terminate the lesinurad license agreement.

In August 2018, we delivered to AstraZeneca a notice of termination of the lesinurad license agreement.

The post-marketing clinical study to further evaluate the renal and cardiovascular safety of lesinurad was terminated following the termination of the lesinurad license agreement.

We requested that the U.S.

FDA withdraw approval of the NDA for the Lesinurad Products, and in January 2021, the NDA withdrawal for DUZALLO became effective.

Human Capital

As of January 1, 2021, Ironwood had 232 employees.

As of December 31, 2021, we had 219 employees.

Of these employees, 40 were on our drug development team, 126 were on our sales and commercial team, and 53 were in general and administrative functions.

In connection with our decision to discontinue development of IW-3718, we reduced our workforce by approximately 100 full-time

employees, which reduction was substantially completed in the fourth quarter of 2020.

For information regarding reductions in our workforce during the years ended December 31, 2020, 2019 and 2018, refer to Note 18, Workforce Reduction and Restructuring , to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

We consider our employee relations to be good.

3 unchanged sentences

Additionally, approximately 19% of our employees are racially or ethnically diverse and, in 2021, approximately 24% of our new hires were racially or ethnically diverse.

In 2020, we established an EDI workgroup dedicated to advancing key EDI initiatives.

Ironwood’s leadership team and board of directors champions these efforts.

In October 2020, our management adopted a long-term EDI strategy and, in January 2021, our board of directors approved a specific corporate goal for 2021 aimed at fostering an environment where employees feel included and empowered.

Current EDI initiatives include empowering our employee resource groups, such as Ironwomen and ISTAR (Ironwood Stands Together Against Racism), introducing new learning and development opportunities, strengthening our talent acquisition strategies, and introducing new metrics and measurements on outreach to diverse candidate sources, retention, career advancement, and employee survey feedback from diverse populations.

Our equity, diversity and inclusion principles are also reflected in our employee training and policies.

In 2021, we continued to advance our equity, diversity, and inclusion, or EDI, initiatives with strong advocacy by our leadership team and board of directors.

In 2021, we incorporated into our corporate goals an EDI scorecard reflecting numerous metrics and deliverables.

Over the course of the year we achieved our target level of performance on these EDI metrics.

We strove to ensure that our candidate pools included diverse candidates and, as a result, both of the executive officers hired in 2021 represent diverse populations.

For 2022, we are committed to furthering our EDI efforts consistent with our long-term EDI strategy adopted in 2020.

Our board of directors has approved a specific corporate goal for 2022 aimed at fostering an environment where employees feel included and empowered.

Current EDI initiatives include empowering our employee resource groups, such as W@IRWD (Women at Ironwood) and ISTAR (Ironwood Stands Together Against Racism), introducing new learning and development opportunities, strengthening our talent acquisition strategies, supporting equality programs in our local communities and delivering on metrics for retention, career advancement, and employee survey feedback from diverse populations.

Compensation and Benefits

3 unchanged sentences

Communication and Engagement

We strongly believe that Ironwood’s success depends on employees understanding how their work contributes to Ironwood’s ability to execute on its vision, mission and strategy.

Communication and engagement have been especially critical in 2020 in light of challenges brought on by macro events such as the COVID-19 pandemic and the racial injustice in the U.S., as well as internal factors including the recent reduction in our workforce.

We strongly believe that our success depends on employees understanding how their work contributes to our ability to execute on our vision, mission and strategy.

Communication and engagement have been especially critical in light of challenges brought on by macro events such as the COVID-19 pandemic, the competition for talent in the biopharmaceutical industry and employees’ higher expectations on engagement by their employers.

To this end, we utilize a variety of channels to facilitate open and direct communication, including frequent town hall meetings, Ironwood intranet, CEO blog, leadership engagement opportunities, regular communications regarding business updates, and employee engagement surveys.

1 unchanged sentence

The health and safety of all our employees is a top priority for us.

In 2020, we augmented certain healthcare, childcare and leave benefits in an effort to support our employees and their families in the face of the unique challenges brought on by the COVID-19 pandemic.

In addition, we established a working group focused on creating and keeping employees well informed about the company’s latest plans and guidance around COVID-19.

We also provided personal protective equipment and safety trainings for field-based employees, a home supply stipend to create home office space, reallocated commuter benefits for home office use, extended additional wellness benefits including backup childcare, and provided our employees with resilience training, among other efforts.

We have augmented certain healthcare, childcare and leave benefits in an effort to support our employees and their families in the face of the unique challenges brought on by the COVID-19 pandemic.

We maintain a working group focused on creating and keeping employees well informed about the company’s latest plans and guidance around COVID-19.

We also provided personal protective equipment, at-home COVID-19 test kits and safety trainings for field-based employees, a home supply stipend to create home office space, reallocated commuter benefits for home office use, extended additional wellness benefits including backup childcare, and provided our employees with resilience training, among other efforts.

Available Information

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business