What changed in this filing

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Item 1. Business

2023-02-16 compared with 2022-02-18 · 110 added, 102 removed, 382 unchanged (36% of the section changed)

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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:

We are also 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.

In 2022, our GI-focused strategy, building on our commercial success and GI development capabilities, continued to focus on three core priorities:

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

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● We recognized $398.8 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.

This increase was primarily driven by an increase in LINZESS prescription demand in the U.S.

in 2021 compared to 2020.

● 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.

during the year ended December 31, 2022, a slight decrease compared to the year ended December 31, 2021.

The slight decrease was primarily driven by net price erosion and inventory channel fluctuations, partially offset by an increase in LINZESS prescription demand.

● In September 2022, we announced positive topline data from a Phase III clinical trial evaluating linaclotide 72 mcg in pediatric patients aged 6-17 years with functional constipation, or FC.

The trial met its primary and secondary endpoints, demonstrating that linaclotide 72 mcg improved frequency of spontaneous bowel movements and stool consistency.

Linaclotide was generally well-tolerated, and the safety profile is consistent with previously reported studies with linaclotide in FC and irritable bowel syndrome in pediatric patients.

In December 2022, we and AbbVie submitted a Supplemental New Drug Application, or sNDA,

FDA seeking approval of a new indication of linaclotide for FC in pediatric patients aged 6-17 years.

In February 2023, the U.S.

FDA granted priority review to our sNDA and assigned a Prescription Drug User Free Act, or PDUFA, date of June 14, 2023.

Additional clinical pediatric programs in IBS-C and FC are ongoing.

There are currently no U.S.

FDA approved prescription therapies for FC.

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.

● Through the COUR Collaboration Agreement, we and COUR are developing CNP-104 for the potential treatment of PBC, a rare autoimmune disease targeting the liver that affects approximately 130,000 people in the U.S., according to a study published in Clinical Gastroenterology and Hepatology in 2018.

If successful, CNP-104 has the potential to be the first approved PBC disease modifying therapy.

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.

COUR is currently conducting a clinical study to evaluate the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients, with early data assessing T-cell response from patients enrolled in the clinical study expected in the second half of 2023 .

We expect that such early data will inform timing of topline data readout.

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

IC/BPS affects an estimated 4 to 12 million people in the U.S., according to the Interstitial Cystitis Association as of 2022.

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.

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

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.

We successfully completed Phase I studies to evaluate the safety and tolerability of IW-3300 in healthy volunteers and expect to begin patient dosing for the Phase II proof of concept study in IC/BPS patients in early 2023.

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.

● Delivered net income of $175.1 million during the year ended December 31, 2022.

● We generated $273.8 million in cash from operations during the year ended December 31, 2022, ending the year with $656.2 million in cash and cash equivalents.

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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.

We continue to evaluate the impact of the COVID-19 pandemic on our operating results and financial condition.

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IBS-C and CIC are chronic, functional GI disorders that afflict millions of sufferers worldwide.

As many as 11.5 million adults suffer from IBS-C and as many as 28.5 million adults suffer from CIC in the U.S., according to the Lieberman GI Patient Landscape Survey performed in 2010, or the Lieberman Survey.

As many as 11.5 million adults suffer from IBS-C and as many as 28.5 million adults suffer from CIC in the U.S., based on Rome II criteria from the Lieberman GI Patient Landscape Survey performed in 2010, or the Lieberman Survey.

Symptoms of IBS-C include abdominal pain, discomfort and/or bloating and constipation symptoms (e.g., incomplete evacuation, infrequent bowel movements, hard/lumpy stools), while CIC is primarily characterized by constipation symptoms.

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FDA approved LINZESS as a once-daily treatment for adult men and women suffering from IBS-C (290 mcg dose) or CIC (145 mcg dose).

We and AbbVie began commercializing

LINZESS in the U.S.

We and AbbVie began commercializing LINZESS in the U.S.

in December 2012.

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In September 2020, based on Phase IIIb data demonstrating the efficacy and safety of LINZESS 290 mcg on the overall abdominal symptoms of bloating, pain and discomfort, in adult patients with IBS-C, the U.S.

FDA approved our Supplemental New Drug Application to include a more comprehensive description of the effects of LINZESS in its approved label.

We and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S.

FDA approved our sNDA to include a more comprehensive description of the effects of LINZESS in its approved label.

In addition, we and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S.

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

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

In September 2022, we announced positive topline data from a Phase III clinical trial evaluating linaclotide 72 mcg in pediatric patients aged 6-17 years with FC.

The trial met its primary and secondary endpoints, demonstrating that linaclotide 72 mcg improved frequency of spontaneous bowel movements and stool consistency.

Linaclotide was generally well-tolerated, and the safety profile is consistent with previously reported studies with linaclotide in FC and irritable bowel syndrome in pediatric patients.

In December 2022, we and AbbVie submitted an sNDA to the U.S.

FDA seeking approval of a new indication of linaclotide for FC in pediatric patients aged 6-17 years.

In February 2023, the U.S.

FDA granted priority review to our sNDA and assigned a PDUFA date of June 14, 2023.

There are currently no U.S.

FDA approved prescription pediatric therapies for FC.

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.

Additional clinical pediatric programs in IBS-C and FC are ongoing.

Linaclotide—Global.

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AstraZeneca began commercializing LINZESS in China in November 2019.

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.

We are advancing IW-3300, a GC-C agonist, for the potential treatment of visceral pain conditions, including IC/BPS and endometriosis.

IC/BPS affects an estimated 4 to 12 million Americans, according to the Interstitial Cystitis Association as of 2022.

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

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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.

Through the COUR Collaboration Agreement, we and COUR are developing CNP-104 for the potential treatment of PBC, a rare autoimmune disease targeting the liver that affects approximately 130,000 people in the U.S., according to a study published in Clinical Gastroenterology and Hepatology in 2018 .

If successful, CNP-104 has the potential to be the first approved PBC disease modifying therapy.

In December 2021, the U.S.

FDA granted Fast Track Designation to CNP-104.

COUR is currently conducting a clinical study for CNP-104 to evaluate the safety, tolerability, pharmacodynamic effects and efficacy of CNP-104 in PBC patients, with early data assessing T-cell response expected from patients enrolled in the clinical study in the second half of 2023.

We expect that such early data will inform timing of topline data readout.

Collaborations and Partnerships

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The following chart shows our revenue for the U.S.

and territories outside of the U.S.

as a percentage of our total revenue for each of the years ended December 31, 2021, 2020, and 2019.

and the rest of the world as a percentage of our total revenue for each of the years ended December 31, 2022, 2021, and 2020.

Year Ended December 31,

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Our revenue from our LINZESS collaboration with AbbVie for the U.S.

is highly dependent on the responsiveness of patients to fill prescriptions and other factors such as wholesaler buying patterns.

Our collaborative arrangements revenue outside of the U.S.

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

is highly dependent on the responsiveness of patients to fill prescriptions and other factors such as retail chains’ and wholesalers’ buying patterns and inventory levels.

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 strategic partnerships outside of the U.S.

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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.

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In September 2019, we and AstraZeneca amended and restated the collaboration agreement, under which AstraZeneca obtained the exclusive right to develop, manufacture and commercialize products containing linaclotide in the territory.

Under the terms of the amended and restated agreement, we transferred all manufacturing responsibilities in China (including Hong Kong and Macau) to AstraZeneca, and we are entitled to receive non-contingent payments totaling $35.0 million in three installments through 2024, of which $10.0 million was received in January 2021.

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.

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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.

COUR has initiated a clinical study to evaluate the safety, tolerability, and pharmacodynamic effects and efficacy of CNP-104 in PBC patients, with early data assessing T-cell response from patients enrolled in the clinical study expected in the second half of 2023.

We expect that such early data will inform timing of topline data readout.

Pursuant to the terms of the COUR Collaboration Agreement, we made an upfront, non-refundable payment of $6.0 million to COUR during the year ended December 31, 2021 and agreed to pay a non-contingent payment and milestone payments to COUR totaling $13.5 million in connection with certain development activities and regulatory milestones.

After reviewing the data from the clinical study for CNP-104, if we exercise the option, we will pay COUR $35.0 million in exchange for the exclusive license.

Upon commercialization, 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, 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.

GI-focused healthcare company.

To achieve this vision, we are dedicated to leveraging our development and commercial expertise to advance the treatment of GI diseases and redefine the standard of care for patients suffering from GI diseases.

To achieve this vision, we assembled a team with demonstrated success in creating, acquiring and partnering, developing, and commercializing medicines that can make a difference in patients’ lives.

We are dedicated to leveraging our development and commercial expertise to advance the treatment of GI diseases and redefine the standard of care for patients suffering from GI diseases.

Our strategy is focused on three core priorities:

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

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

Key elements of our strategy include:

● assembling a team with a singular passion and documented success in creating, developing and commercializing GI medicines that can make a significant difference in patients’ lives;

● successfully and profitably commercializing LINZESS in collaboration with AbbVie in the U.S.;

● 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;

Maximize LINZESS

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

● Exploring development opportunities to enhance the clinical profile of LINZESS by studying linaclotide in additional indications, populations, and formulations.

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

● evaluating innovative, externally developed products for in-licensing or acquisition opportunities, prioritizing assets that address serious, organic GI diseases, provide scientific innovation, sound mechanistic rational, a strong clinical safety profile, a clear development path towards commercialization and in disease areas primarily managed by gastroenterologists;

● executing our strategy with our stockholders’ long-term interests in mind by delivering sustainable profits and long-term per share cash flows.

Strengthen and progress our innovative GI portfolio

● Evaluating innovative, externally developed clinical and commercial products for in-licensing, or acquisition opportunities.

We are prioritizing assets that address serious GI diseases in areas primarily managed by gastroenterologists/hepatologists and provide scientific innovation.

In addition, we are pursuing assets that we believe have a sound mechanistic rationale, a strong clinical safety profile, and a clear development path towards potential regulatory approval and commercialization.

● Progressing our current pipeline, including LINZESS in a pediatric population, CNP-104 for the potential treatment of PBC, and progressing our wholly owned GC-C agonist, IW-3300, for the potential treatment of IC/BPS and endometriosis.

Deliver sustained profits and cash flow

● Executing our strategy with our stockholders’ long-term interests in mind by delivering sustainable profits and cash flows.

● Applying a thoughtful and disciplined capital allocation strategy to deliver value for our shareholders over the long-term.

Linaclotide competes globally with certain branded and generic prescription therapies and over the counter, or OTC, products for the treatment of IBS-C and CIC, or their associated symptoms.

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

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

LINZESS is the number one prescribed branded treatment in the U.S.

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

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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., 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.

Authorized generic versions of AMITIZA became available in the U.S.

by Endo International plc and Dash Pharmaceuticals LLC in January 2021 and in October 2022, respectively, and we expect additional generic versions of AMITIZA may become available.

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

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by Bausch Health Companies.

Shire plc obtained approval of MOTEGRITY™ (prucalopride) in the U.S.

Shire plc obtained approval of MOTEGRITY™

(prucalopride) in the U.S.

for the treatment of CIC in adults in December 2018.

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, 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.

In April 2022, Ardelyx, Inc., or Ardelyx, launched IBSRELA TM (tenapanor), a U.S.

FDA approved treatment for IBS-C in adults.

Manufacturing and Supply

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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.

To date, we have established a high-quality commercial organization dedicated to supporting our vision of becoming the leading GI healthcare company in the U.S.

Our GI commercial capabilities, including marketing, patient engagement and sales, are designed to support our existing product as well as potential future internally and externally developed products.

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patents listed in the U.S.

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.

FDA publication, Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book, eight granted European patents, most of which have been validated in available European countries, ten granted Japanese patents, five granted Chinese patents, 80 issued patents in other foreign jurisdictions, and numerous pending U.S., foreign and Patent Cooperation Treaty, or PCT, patent applications.

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

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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.

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

FDA approved drug is also eligible for patent term extension, which permits patent term extension as compensation for some of the patent term lost during the U.S.

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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.

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In the U.S., pharmaceutical products are subject to extensive regulation by the U.S.

The Federal Food, Drug, and Cosmetic Act and other federal and state statutes and regulations, as well as similar foreign regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-marketing requirements and assessments, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products.

sampling, and import and export of pharmaceutical products.

FDA and other regulatory authorities have very broad enforcement authority and failure to abide by applicable regulatory requirements can result in administrative or judicial sanctions being imposed on us, including warning letters, refusals of government contracts, clinical holds, civil penalties, injunctions, restitution, disgorgement of profits, recall or seizure of products, total or partial suspension of production or distribution, withdrawal of approval, refusal to approve pending applications, and civil or criminal prosecution.

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Clinical trials are typically conducted in three sequential phases, though the phases may overlap or be combined.

In Phase I, the initial introduction of the drug into healthy human subjects, the drug is usually tested for safety (adverse effects), dosage tolerance and pharmacologic action, as well as to understand how the drug is taken up by and distributed within the body.

In Phase I, the initial introduction of the drug into healthy human subjects, the drug is usually tested for safety (adverse effects), dosage tolerance and

pharmacologic action, as well as to understand how the drug is taken up by and distributed within the body.

Phase II usually involves studies in a limited patient population (individuals with the disease under study) to:

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In order to obtain approval of an ANDA, an applicant must, among other things, establish that its product is bioequivalent to an existing approved drug and that it has the same active ingredient(s), strength, dosage form, and route of administration.

A generic drug is considered bioequivalent to its reference drug if testing demonstrates that the rate and extent of absorption of the generic drug is not significantly different from the rate and extent of absorption of the reference drug when administered under similar experimental conditions.

A generic drug is considered bioequivalent to its reference drug if testing demonstrates that the rate and extent of

absorption of the generic drug is not significantly different from the rate and extent of absorption of the reference drug when administered under similar experimental conditions.

The Hatch-Waxman Act also provides incentives by awarding, in certain circumstances, certain legal protections from generic competition.

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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.

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.

FDA uses similar procedures and actions in reviewing such NDA supplements as it does in reviewing NDAs.

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

An sNDA 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.

FDA uses similar procedures and actions in reviewing such sNDAs as it does in reviewing NDAs.

Adverse event reporting and submission of periodic reports is required following U.S.

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While we cannot predict what executive, legislative and regulatory proposals will be adopted or other actions will occur, such events could have a material adverse effect on our business, financial condition and profitability.

For additional information relating to pricing and reimbursement, see Item 1A, Risk Factors, elsewhere in this Annual Report on Form 10-K.

For additional information relating to pricing and reimbursement and legislative and other reform initiatives that may affect coverage, pricing and reimbursement, see Item 1A, Risk Factors, elsewhere in this Annual Report on Form 10-K.

Sales and Marketing

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We are also subject to various federal and state laws pertaining to health care “fraud and abuse,” including anti-kickback laws and false claims laws, for activities related to sales of any of our products or product candidates that may in the future receive marketing approval.

Anti-kickback laws generally prohibit persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid.

Although the specific provisions of these laws vary, their scope is generally broad and there may not be regulations, guidance or court decisions that apply the laws to particular industry practices.

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

Our Legacy Business

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.

Human Capital

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We consider our employee relations to be good.

Equity, Diversity, and Inclusion (EDI)

We believe that creating an equitable, diverse, and inclusive culture is critical to attracting, motivating and retaining the talent necessary to deliver on our mission.

Approximately 49% of our employees are women, and women represent approximately 29% of our leadership team (vice president and above) and nearly 27% of our board of directors (including our board and audit chairs).

Diversity, Equity and Inclusion (DE&I)

Creating a diverse, equitable, and inclusive culture is essential to attracting, motivating and retaining the talent necessary to deliver on our corporate mission.

To establish and maintain this culture, we have a simple vision in mind:

to make Ironwood an environment rooted in valuing each employee for who they are.

This begins with ensuring our workforce represents the diverse populations we serve and reflecting our DE&I principles in our employee-related trainings and policies.

Women represent approximately 52% of our employee base, 27% of our leadership team (vice president and above) and 33% of our board of directors (including our board and audit committee chairs).

Additionally, approximately 18% of our employees are racially or ethnically diverse and in 2022, approximately 28% of our new hires were racially or ethnically diverse.

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.

We are focused on fostering an environment where employees feel included and empowered.

This approach includes DE&I initiatives such as learning and development opportunities, strengthened talent acquisition strategies, the support of equality programs in our local communities, and added metrics related to retention and career advancement of diverse populations.

We are also proud to have three strong and growing employee resource groups:

W@IRWD (Women at Ironwood), ISTAR (Ironwood Stands Together Against Racism), and PRIDE.

In 2022, we continued to advance our DE&I initiatives with strong advocacy from our leadership team and board of directors.

We incorporated DE&I metrics into our corporate goals.

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

Compensation and Benefits

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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.

Our communication and engagement efforts seek to offset competitive talent challenges in the biopharmaceutical industry and employees’ higher expectations of 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.

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

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 have augmented certain healthcare, childcare and leave benefits in an effort to support our employees and their families in the face of the continuing 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.

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, and extended additional wellness benefits including backup childcare, among other efforts.

Available Information

You may obtain free copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after they are electronically filed or furnished to the SEC, on the Investors section of our website at www.ironwoodpharma.com or by contacting our Investor Relations department at (617) 621-8395.

Investor Relations department at (617) 621-8395.

The contents of our website are not incorporated by reference into this report and you should not consider information provided on our website to be part of this report.

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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