IRWD

Leadership Updates

• Two new additions joined the Ironwood leadership team: Jeff Silber as Chief Medical Officer and Head of Research and Drug Development, bringing over 30 years of late-stage drug development experience; and Ron Silver as Interim Chief Financial Officer, who has served at Ironwood for 8 years in key financial leadership roles.
• Former Chief Medical Officer Mike Shetzline retired after leading the successful initiation of the STARS II Phase III trial for apraglutide.

Linzess Commercial Performance

• Linzess remains the prescription leader in both irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation (CIC) in its 14th year on the market.
• Q2 2026 delivered 4% year-over-year EUTRX volume growth, with 5% year-to-date growth, driven by improved net price from the elimination of inflationary rebates across all channels and favorable timing of gross-to-net rebate reserve adjustments.
• The FDA approved Linzess for the treatment of functional constipation in pediatric patients 2 years of age and older, making it the only prescription therapy approved for this indication and patient population, expanding the brand's patient reach.
• Management expects mid-single-digit full-year 2026 demand growth, with sequential quarterly net sales increases through the end of the year, and Q4 2026 projected to be the strongest quarter for Linzess in 2026.

Apraglutide Pipeline Progress

• The confirmatory Phase III STARS II trial for apraglutide (a once-weekly GLP-2 analog for short bowel syndrome with intestinal failure (SBS-IF)) was initiated in June 2026 as planned and is actively recruiting patients.
• Apraglutide is the only once-weekly GLP-2 analog with positive Phase III efficacy and safety data in SBS-IF, demonstrating greater reductions in parenteral support volume than placebo and a safety profile similar to placebo. Long-term extension data shows continued reductions in parenteral support dependence, with more than 20% of patients achieving enteral autonomy.
• The company is expanding the site network for STARS II, adding more high-potential sites particularly in the U.S. (the original STARS trial was largely ex-U.S.) and leveraging existing site relationships from the first trial to accelerate enrollment.

Financial Performance

• Q2 2026 GAAP net income was $51 million, and adjusted EBITDA was $83 million.
• The company repaid its $200 million convertible notes at maturity in June 2026 using cash on hand, and plans to continue using operating cash flow from Linzess to further reduce debt.

• Full year 2026 Linzess U.S. net sales guidance was raised to $1.15 billion to $1.2 billion, representing a greater than 30% year-over-year increase, driven by significantly improved net price and mid-single-digit prescription demand growth (up from the prior guidance of low single-digit demand growth). • Total full year 2026 revenue guidance was increased to $460 million to $485 million. • Adjusted EBITDA guidance for full year 2026 was raised to greater than $310 million. • Management expects to end 2026 with gross debt outstanding below $300 million, putting gross leverage below 1x, while retaining sufficient resources to advance and prepare for the potential commercialization of apraglutide. • Management expects less variability in sequential quarterly U.S. net sales in 2026 compared to 2025, with sequential quarterly growth and Q4 2026 as the strongest sales quarter of the year.

Ironwood Pharmaceuticals operates two core product segments: Linzess and the pipeline candidate apraglutide. For Q2 2026, Linzess generated $282.3 million in U.S. net sales, representing a 14% year-over-year increase, and contributed 100% of the company's product revenue (apraglutide is still in clinical development with no revenue). Total company revenue for Q2 2026 was $113 million, including collaboration receivables. Year-to-date (first half 2026), Linzess U.S. net sales reached $555 million, a 44% increase year-over-year. For the full year 2026, Linzess is projected to account for 100% of product revenue, with net sales expected between $1.15 billion and $1.2 billion, a greater than 30% year-over-year increase.

• Forward-looking statements regarding apraglutide clinical trial progress, enrollment timelines, and commercial potential are subject to inherent risks and uncertainties that could cause actual results to differ materially, as disclosed in Ironwood's SEC filings. • Prior to the quarter, management anticipated potential demand softening for Linzess after the elimination of inflationary rebates, particularly in the Medicaid patient population, though this risk did not materialize in the first half of 2026. • Clinical trial enrollment for STARS II is dependent on successful site activation and patient recruitment, which could be slower than currently anticipated. • The original STARS trial experienced a dosing error (unintended 3.5 mg dose instead of the planned 5 mg dose) due to kit and instruction issues, though root cause corrective actions have been implemented to prevent recurrence in STARS II.

Q: Investors previously wondered if net price changes for Linzess would cause delayed demand softening. Can you explain current demand dynamics? / A: Management reported that year-to-date EUTRX volume growth is 5%, which is ahead of the initial early 2026 forecast of low single-digit growth. Work with distribution partners to maintain patient access across all channels has offset expected demand impacts from rebate elimination, so management now expects full-year mid-single-digit demand growth, with typical seasonal acceleration in the second half. No demand softening has materialized to date.

Q: How is site onboarding progressing for STARS II, and what strategies could accelerate enrollment timelines? / A: The trial was initiated only three weeks prior to the call, with the first sites already activated and enrolling patients. Management is prioritizing expansion of the site network, particularly in the U.S., where the original STARS trial had very limited coverage. New high-potential U.S. sites are being added, leveraging existing key investigator relationships, and the new CMO is conducting a full review to identify opportunities to speed up enrollment, with updates to come in future months.

Q: How are you avoiding the dosing error that occurred in the original STARS trial for STARS II? / A: In the original STARS trial, kit and instruction errors led to unintended delivery of a 3.5 mg dose instead of the planned 5 mg dose, though the drug still performed well and was well tolerated at the lower dose. Root cause analysis led to significant redesign of the drug kit to eliminate instruction and dosing errors. Multiple human factor studies were completed to confirm the design, and additional exposure kinetics data confirms the team can now control dosing reliably, so a repeat error is very unlikely.

Q: Will the favorable time phasing of gross-to-net rebate reserves in H1 2026 unwind in the second half, and is Medicaid volume growth still expected to slow? / A: Management expects much less sequential quarterly net sales variability in 2026 compared to 2025, due to more consistent net pricing across channels that is less sensitive to seasonal volume shifts. There will be no unwinding of favorable reserve adjustments, and sequential quarterly growth will continue through Q4, which is projected to be the strongest quarter of 2026. Management is no longer expecting a material reduction in Medicaid volume growth that was previously anticipated, as state-level payer outreach has maintained patient access, so full-year mid-single-digit demand growth is on track.