Q2 2026 Ironwood Pharmaceuticals Inc Earnings Call

August 6, 2026

Operator 2: Good morning, everyone. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ironwood Pharmaceuticals Q2 2026 Investor Update Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Thank you. I would like to now turn the call over to Chris Stamm, VP, Investor Relations and Communications. Please go ahead.

Operator: Good morning, everyone. My name is Ian, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ironwood Pharmaceuticals Q2 2026 Investor Update Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Thank you. I would like to now turn the call over to Chris Stamm, VP, Investor Relations and Communications. Please go ahead.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. Thank you. I would like to now turn the call over to Chris Stam, VP Investor Relations and Communications.

Speaker #1: Please go ahead.

Speaker #2: Good morning, and thanks for joining our second quarter release issued this morning highlighting Q2 results can be found on our website. Today's call and accompanying slides include forward-looking statements within the meeting of the Private Securities Litigation Reform Act of 1995, such statements involve risks and uncertainties, that may cause actual results to differ materially.

Chris Stamm: Good morning. Thanks for joining our Q2 2026 investor update. A press release issued this morning highlighting Q2 results can be found on our website. Today's call and accompanying slides include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially. A discussion of these statements and risk factors is available on the current safe harbor statement slide, as well as under the heading Risk Factors in our annual report, Form 10-K, for the year ended 31 December 2025, and in our subsequent SEC filings. All forward-looking statements speak as of the date of this presentation. We undertake no obligation to update such statements. Also included are non-GAAP financial measures, which should be considered only as a supplement to and not a substitute for or superior to GAAP measures.

Speaker #2: A discussion of these statements and risk factors is available on the current Safe Harbor Statement slide as well as under the heading Risk Factors in our annual report Form 10-K for the year ended December 31, 2025, and in our subsequent SEC filings.

Chris Stamm: A discussion of these statements and risk factors is available on the current safe harbor statement slide, as well as under the heading Risk Factors in our annual report, Form 10-K, for the year ended 31 December 2025, and in our subsequent SEC filings. All forward-looking statements speak as of the date of this presentation.

Speaker #2: All forward-looking statements speak as of the date of this presentation and we undertake no obligation to update such statements. Also included are non-GAAP financial measures, which should be considered only as a supplement to and not a substitute for or superior to GAAP measures.

Chris Stamm: We undertake no obligation to update such statements. Also included are non-GAAP financial measures, which should be considered only as a supplement to and not a substitute for or superior to GAAP measures.

Speaker #2: To the extent applicable, please refer to the tables at the end of our press release for reconciliations of these measures to the most directly comparable GAAP measures.

Chris Stamm: To the extent applicable, please refer to the tables at the end of our press release for reconciliations of these measures to the most directly comparable GAAP measures. During today's call, Thomas McCourt, our Chief Executive Officer, will review Q2 business highlights and strategic priorities. After Tom, Chief Commercial Officer Tammi Gaskins will provide an overview of Q2 LINZESS performance. Next, Jeff Silber, our newly appointed Chief Medical Officer and Head of Research and Drug Development, will give a brief update on apraglutide. Ron Silver, our Interim Chief Financial Officer, will close our prepared remarks with a financial update before we open the call for questions. Jeff Ruberti, our Chief Strategy Officer, will also be available for the Q&A at the end of the call. Today's webcast includes accompanying slides. For those joining by phone, please visit the events section of our website to access the presentation.

Speaker #2: During today's call, Tom McCourt, our Chief Executive Officer, will review second quarter business highlights and strategic priorities. After Tom, Chief Commercial Officer Tammy Gaskins will provide an overview of second quarter Lindsay's performance.

Speaker #2: Next, Jeff Silber, our newly appointed Chief Medical Officer, and Head of Research and Drug Development, will give a brief update on Apricotide. Then Ron Silver, our interim Chief Financial Officer, will close our prepared remarks with a financial update before we open the call for questions.

Chris Stamm: Next, Jeff Silber, our newly appointed Chief Medical Officer and Head of Research and Drug Development, will give a brief update on apraglutide. Ron Silver, our Interim Chief Financial Officer, will close our prepared remarks with a financial update before we open the call for questions.

Speaker #2: Jeff Roberti, our Chief Strategy Officer, will also be available for the Q&A at the end of the call. Today's webcast includes accompanying slides; for those joining by phone, please visit the events section of our website to access the presentation.

Chris Stamm: Jeff Ruberti, our Chief Strategy Officer, will also be available for the Q&A at the end of the call. Today's webcast includes accompanying slides. For those joining by phone, please visit the events section of our website to access the presentation.

Speaker #2: And with that, I'll turn the call over to Tom.

Chris Stamm: With that, I'll turn the call over to Tom.

Speaker #3: Thanks, Chris. And thanks, everyone, for joining us to review IRONWOOD's second quarter 2026 financial results and business update. Before I begin, in addition to welcoming Chris, who joined the team in June to lead our IR and communications efforts, I'd like to introduce two recent additions to the IRONWOOD leadership team.

Thomas McCourt: Thanks, Chris. Thanks, everyone, for joining us to review Ironwood's Q2 2026 financial results and business update. Before I begin, in addition to welcoming Chris, who joined the team in June to lead our IR and communications efforts, I'd like to introduce two recent additions to the Ironwood leadership team, who you'll be hearing more from today and in the weeks and months ahead. First, I want to sincerely thank former Chief Medical Officer and Head of R&D, Mike Schutzelein, who retired after a distinguished career dedicated to advancing GI science and patient care. Most recently, he led the team through a major company milestone, the successful initiation of the confirmatory Phase III STARS-2 trial. Last month, we welcomed Dr. Jeff Silber, Mike's successor, who brings more than 30 years of experience in the industry and academia.

Tom McCourt: Thanks, Chris. Thanks, everyone, for joining us to review Ironwood's Q2 2026 financial results and business update. Before I begin, in addition to welcoming Chris, who joined the team in June to lead our IR and communications efforts, I'd like to introduce two recent additions to the Ironwood leadership team, who you'll be hearing more from today and in the weeks and months ahead.

Speaker #3: Who you'll be hearing more from today and in the weeks and months ahead. But first, I want to sincerely thank former Chief Medical Officer and Head of R&D, Mike Schetzlein, who retired after a distinguished career dedicated to advancing GI science and patient care.

Tom McCourt: First, I want to sincerely thank former Chief Medical Officer and Head of R&D, Mike Shetzline, who retired after a distinguished career dedicated to advancing GI science and patient care.

Speaker #3: Most recently, he led the team through a major company milestone. The successful initiation of the Confirmatory Phase 3 STARS II trial. Last month, we welcomed Dr. Jeff Silver, Mike's successor, who brings more than 30 years of experience in the industry and academia.

Tom McCourt: Most recently, he led the team through a major company milestone, the successful initiation of the confirmatory Phase III STARS-2 trial. Last month, we welcomed Dr. Jeff Silber, Mike's successor, who brings more than 30 years of experience in the industry and academia.

Speaker #3: Jeff is an accomplished leader in drug development from preclinical through submission, commercialization, and expanding value of brands through lifecycle management. Previously, Chief Medical Officer at Vendanta Biosciences, he brings broad late-stage development expertise to IRONWOOD.

Thomas McCourt: Jeff is an accomplished leader in drug development from preclinical through submission, commercialization, and expanding value of brands through lifecycle management. Previously Chief Medical Officer at Vedanta Biosciences, he brings broad late-stage development expertise to Ironwood, having supported multiple successful new drug applications and valuable brands in leadership roles at AbbVie, EMD Serono, Merck KGaA, and Merck & Co. His leadership will be instrumental as we advance apraglutide through Phase III and commercialization. I'd also like to introduce Ron Silver, our Senior Vice President, Corporate Controller, and Chief Accounting Officer, who is serving as Interim Chief Financial Officer. Ron has been with Ironwood for 8 years, serving in key financial leadership roles, providing him with deep knowledge of our business and strategy. His experience and leadership will be invaluable as we continue to execute against our priorities. Let's dive into the Q2 business updates.

Tom McCourt: Jeff is an accomplished leader in drug development from preclinical through submission, commercialization, and expanding value of brands through lifecycle management. Previously Chief Medical Officer at Vedanta Biosciences, he brings broad late-stage development expertise to Ironwood, having supported multiple successful new drug applications and valuable brands in leadership roles at AbbVie, EMD Serono, Merck KGaA, and Merck & Co.

Speaker #3: Having supported multiple successful new drug applications and valuable brands in leadership roles at AbbVie, EMD Serrano, Merck, KGA, and Merck & Company. His leadership will be instrumental as we advance Apricotide through Phase 3 and commercialization.

Tom McCourt: His leadership will be instrumental as we advance apraglutide through Phase III and commercialization. I'd also like to introduce Ron Silver, our Senior Vice President, Corporate Controller, and Chief Accounting Officer, who is serving as Interim Chief Financial Officer.

Speaker #3: I'd also like to introduce Ron Silver, our Senior Vice President, Corporate Controller, and Chief Accounting Officer, who is serving as Interim Chief Financial Officer.

Speaker #3: Ron has been with IRONWOOD for eight years, serving in key financial leadership roles providing him with deep knowledge of our business and strategy. His experience in leadership will be invaluable as we continue to execute against our priorities.

Tom McCourt: Ron has been with Ironwood for 8 years, serving in key financial leadership roles, providing him with deep knowledge of our business and strategy. His experience and leadership will be invaluable as we continue to execute against our priorities. Let's dive into the Q2 business updates.

Speaker #3: Now, let's dive into the second quarter business updates. At the beginning of the year, we outlined three key priorities for 2026. Maximizing the performance of Lindsay's, advancing Apricotide, and delivering sustained profitability and cash flow.

Thomas McCourt: At the beginning of the year, we outlined three key priorities for 2026: maximizing the performance of LINZESS, advancing apraglutide, and delivering sustained profitability and cash flow. These priorities remain central to achieving our mission to redefine standard of care for patients living with gastrointestinal rare disease while creating long-term shareholder value. During Q2, we made meaningful progress across each priority. Starting with LINZESS, the brand continues to demonstrate exceptional strength in its 14th year on the market and remains the prescription leader in both irritable bowel syndrome with constipation and chronic idiopathic constipation. We are pleased to report a second consecutive quarter of strong LINZESS performance, delivering $282.3 million in US net sales, fueled by improved net price and mid-single-digit prescription demand growth. This outstanding performance supported our decision to raise our full year 2026 financial guidance.

Tom McCourt: At the beginning of the year, we outlined three key priorities for 2026: maximizing the performance of LINZESS, advancing apraglutide, and delivering sustained profitability and cash flow. These priorities remain central to achieving our mission to redefine standard of care for patients living with gastrointestinal rare disease while creating long-term shareholder value. During Q2, we made meaningful progress across each priority.

Speaker #3: These priorities remain central to achieving our mission to redefine standard of care for patients, living with gastrointestinal rare disease while creating long-term shareholder value.

Speaker #3: During the second quarter, we made meaningful progress across each priority. Starting with Lindsay's, the brand continues to demonstrate exceptional strength in its 14th year on the market and remains a prescription leader in both irritable bowel syndrome with constipation and chronic idiopathic constipation.

Tom McCourt: Starting with LINZESS, the brand continues to demonstrate exceptional strength in its 14th year on the market and remains the prescription leader in both irritable bowel syndrome with constipation and chronic idiopathic constipation.

Speaker #3: We're pleased to report a second consecutive quarter of strong Lindsay's performance, delivering 282.3 million in US net sales fueled by improved net price and mid-single-digit prescription demand growth.

Tom McCourt: We are pleased to report a second consecutive quarter of strong LINZESS performance, delivering $282.3 million in US net sales, fueled by improved net price and mid-single-digit prescription demand growth. This outstanding performance supported our decision to raise our full year 2026 financial guidance.

Speaker #3: This outstanding performance supported our decision to raise our full-year 2026 financial guidance. Based on the updated outlook, Lindsay's is positioned to grow more than 30% year over year.

Thomas McCourt: Based on the updated outlook, LINZESS is positioned to grow more than 30% year-over-year, return to blockbuster status, and deliver the highest annual US net sales in the product's history. We also achieved an important regulatory milestone during the quarter, with the FDA approval of LINZESS for the treatment of functional constipation in pediatric patients 2 years of age and older. This is another important milestone, establishing LINZESS as the only prescription therapy approved for functional constipation in this age group, addressing yet another unmet patient need. Turning to apraglutide. In June, we initiated the STARS-2 confirmatory phase III clinical trial evaluating apraglutide in adults with Short Bowel Syndrome with Intestinal Failure, or SBS-IF. The trial is now actively recruiting patients, and we continue to activate additional sites to drive enrollment.

Tom McCourt: Based on the updated outlook, LINZESS is positioned to grow more than 30% year-over-year, return to blockbuster status, and deliver the highest annual US net sales in the product's history. We also achieved an important regulatory milestone during the quarter, with the FDA approval of LINZESS for the treatment of functional constipation in pediatric patients 2 years of age and older.

Speaker #3: Return to blockbuster status and deliver the highest annual US net sales in the product's history. We also achieved an important regulatory milestone during the quarter.

Speaker #3: With the FDA approval of Lindsay's for the treatment of functional constipation in pediatric patients two years of age and older. This is another important milestone establishing Lindsay's as the only prescription therapy approved for functional constipation in this age group, addressing yet another unmet patient need.

Tom McCourt: This is another important milestone, establishing LINZESS as the only prescription therapy approved for functional constipation in this age group, addressing yet another unmet patient need.

Speaker #3: Turning to Apricotide, in June, we initiated the STARS II Confirmatory Phase 3 clinical trial evaluating Apricotide in adults with short bowel syndrome with intestinal failure, or SBSIF.

Tom McCourt: Turning to apraglutide. In June, we initiated the STARS-2 confirmatory phase III clinical trial evaluating apraglutide in adults with Short Bowel Syndrome with Intestinal Failure, or SBS-IF. The trial is now actively recruiting patients, and we continue to activate additional sites to drive enrollment.

Speaker #3: The trial is now actively recruiting patients and we continue to activate additional sites to drive enrollment. STARS II will build on the positive data from the Phase 3 STARS trial which we believe demonstrates that Apricotide has the potential to be a best-in-class therapy for patients with SBS who are dependent on parental support.

Thomas McCourt: STARS-2 will build on the positive data from the phase III STARS trial, which we believe demonstrates that apraglutide has the potential to be a best-in-class therapy for patients with SBS who are dependent on parenteral support. Our goal is to ensure apraglutide will be the first long-acting GLP-2 analog to market. Finally, we delivered strong financial results during the quarter, generating $51.3 million in GAAP net income and $83 million in adjusted EBITDA. We also repaid our $200 million convertible notes at maturity with cash on hand. We expect to leverage LINZESS generating cash flow to further reduce our debt. We are well-positioned to end 2026 with a gross leverage below 1x, while maintaining resources necessary to advance and prepare for the potential commercialization of apraglutide. With that, I will turn the call over to Tammi to provide some additional context on LINZESS. Tammi?

Tom McCourt: STARS-2 will build on the positive data from the phase III STARS trial, which we believe demonstrates that apraglutide has the potential to be a best-in-class therapy for patients with SBS who are dependent on parenteral support. Our goal is to ensure apraglutide will be the first long-acting GLP-2 analog to market.

Speaker #3: Our goal is to ensure Apricotide will be the first long-acting GLP-2 analog to market. Finally, we delivered strong financial results during the quarter, generating $51.3 million in gap net income and $83 million in adjusted EBITDA.

Tom McCourt: Finally, we delivered strong financial results during the quarter, generating $51.3 million in GAAP net income and $83 million in adjusted EBITDA. We also repaid our $200 million convertible notes at maturity with cash on hand. We expect to leverage LINZESS generating cash flow to further reduce our debt.

Speaker #3: We also repaid our $200 million convertible notes at maturity with cash on hand. Looking ahead, we expect to leverage LINZESS's generating cash flow to further reduce our debt as well, and we are well positioned to end 2026 with a gross leverage below 1x.

Tom McCourt: We are well-positioned to end 2026 with a gross leverage below 1x, while maintaining resources necessary to advance and prepare for the potential commercialization of apraglutide. With that, I will turn the call over to Tammi to provide some additional context on LINZESS. Tammi?

Speaker #3: While maintaining resources necessary to advance and prepare for the potential commercialization of Apricotide. With that, I'll turn the call over to Tammy to provide some additional context on Lindsay's.

Speaker #3: Tammy?

Tammi Gaskins: Great. Thanks, Thomas, and good morning, everyone. As Thomas just stated, LINZESS delivered another strong quarter with US net sales of $282.3 million. That is a 14% year-over-year increase driven by both demand growth and improved net price. Through H1, LINZESS US net sales reached $555 million, up 44% year-over-year, underscoring the strength and momentum of the brand. If I just double-click for a minute on demand, the slide you see shows year-on-year TRx volume growth of 4% for Q2 and 5% year-to-date June. We expect this demand momentum to persist and anticipate mid-single-digit demand growth through the full year, giving us the confidence to raise our full-year financial guidance.

Speaker #2: Great. Thanks, Tom, and good morning, everyone. As Tom just stated, Lindsay's delivered another strong quarter with US net sales of $282.3 million. That's a 14% year-over-year increase driven by both demand growth and improved net price.

Speaker #2: Now, through the first half, Lindsay's US net sales reached $555 million, up 44% year-over-year, underscoring the strength and momentum of the brand. Now, if I just double-click for a minute on demand, the slide you see shows year-on-year EU TRX volume growth of 4% for Q2 and 5% year-to-date June.

Tammi Gaskins: If I just double-click for a minute on demand, the slide you see shows year-on-year TRx volume growth of 4% for Q2 and 5% year-to-date June. We expect this demand momentum to persist and anticipate mid-single-digit demand growth through the full year, giving us the confidence to raise our full-year financial guidance.

Speaker #2: We expect this demand momentum to persist and anticipate mid-single-digit demand growth for the full year, giving us the confidence to raise our full-year financial guidance.

Speaker #2: Turning to price, the positive impact seen in Q1 from elimination of inflationary rebates across channels really continued to benefit net price as planned, in addition to favorable timing of gross-to-net rebate reserves as compared to the second quarter of 2025.

Tammi Gaskins: Turning to price, the positive impact seen in Q1 from elimination of inflationary rebates across channels really continued to benefit net price as planned, in addition to favorable timing of gross to net rebate reserves as compared to Q2 2025. Our full-year net sales guidance reflects the ongoing benefit of improved net price, combined with anticipated reduced variability in sequential quarterly US net sales as compared to 2025, really due to more consistent net price across channels. To that end, since demand volume is historically highest in H2, we expect quarterly performance to build, with Q4 projected to deliver the highest net sales for 2026. This performance also highlights the significant unmet needs that LINZESS helps to address for millions of patients with IBS-C and CIC across the US.

Speaker #2: Our full-year net sales guidance reflects the ongoing benefit of improved net price combined with anticipated reduced variability in sequential quarterly US net sales as compared to 2025, really due to more consistent net price across channels.

Tammi Gaskins: Our full-year net sales guidance reflects the ongoing benefit of improved net price, combined with anticipated reduced variability in sequential quarterly US net sales as compared to 2025, really due to more consistent net price across channels.

Speaker #2: To that end, since demand volume is historically highest in the second half of the year, we expect quarterly performance to build with the fourth quarter projected to deliver the highest net sales for 2026.

Tammi Gaskins: To that end, since demand volume is historically highest in H2, we expect quarterly performance to build, with Q4 projected to deliver the highest net sales for 2026. This performance also highlights the significant unmet needs that LINZESS helps to address for millions of patients with IBS-C and CIC across the US.

Speaker #2: This performance also highlights the significant unmet needs that Lindsay's helps to address for millions of patients with IBSC and CIC across the US. And the recent FDA approval for FC down functional constipation down to two years of age further expands the reach of Lindsay's and helps highlight its importance for a new broader range of patients.

Tammi Gaskins: The recent FDA approval for FC, functional constipation, down to two years of age further expands the reach of LINZESS and helps highlight its importance for a new broader range of patients. Now, I'd like to hand the presentation over to Jeff Silber to highlight our progress advancing apraglutide.

Speaker #2: Now, I'd like to hand the presentation over to Jeff Silber to highlight our progress advancing Apricotide.

Speaker #3: Thanks, Tammy, and good morning, everyone. I'm excited to be joining the IRONWOOD team at such an important time. We've worked to bring Apricotide to patients suffering from SBSIF as quickly as possible.

Jeff Silber: Thanks, Tammi, and good morning, everyone. I'm excited to be joining the Ironwood team at such an important time. We work to bring apraglutide to patients suffering from SBS-IF as quickly as possible. Today, I'd like to share my perspective on why the science behind apraglutide and what it could mean for patients is so compelling. There's a considerable unmet need for patients with SBS-IF. On average, these patients require parenteral support, that is IV fluids and nutrients, 10 hours per day, six days per week, creating a real burden to their quality of life. Although parenteral support meets the nutritional needs that enable them to survive, patients continue to face many significant daily challenges. As highlighted in the landmark HCP survey that Ironwood presented at DDW last May, central line infections, fatigue, central line pain, and abdominal pain are all common and highly distressing challenges associated with

Speaker #3: Today, I'd like to share my perspective on why the science behind Apricotide and what it could mean for patients is so compelling. There's a considerable unmet need for patients with SBSIF.

Speaker #3: On average, these patients require parental support, that is, IV fluids and nutrients, 10 hours per day six days per week creating a real burden to their quality of life.

Jeff Silber: On average, these patients require parenteral support, that is IV fluids and nutrients, 10 hours per day, six days per week, creating a real burden to their quality of life. Although parenteral support meets the nutritional needs that enable them to survive, patients continue to face many significant daily challenges.

Speaker #3: Although parental support meets the nutritional needs that enable them to survive, patients continue to face many significant daily challenges. As highlighted in the landmark HCP survey that IRONWOOD presented at DDW last May, central line infections, fatigue, central line pain, and abdominal pain are all common and highly distressing challenges associated with parental support.

Jeff Silber: As highlighted in the landmark HCP survey that Ironwood presented at DDW last May, central line infections, fatigue, central line pain, and abdominal pain are all common and highly distressing challenges associated with

Speaker #3: These findings underscore the need for therapies that reduce patients' IV dependence and the associated burden of parental support while improving their quality of life.

Jeff Silber: Things underscore the need for therapies that reduce patients' IV dependence and the associated burden of parenteral support while improving their quality of life. One of the reasons I'm so excited to have joined Ironwood is the opportunity to help advance a therapy with the potential to address this significant unmet medical need. First, apraglutide is currently the only once-weekly GLP-2 analog with positive phase III efficacy and safety data in adults with SBS-IF. Data from the STARS study, the largest phase III clinical trial in SBS-IF conducted to date, demonstrated significant reductions in parenteral support requirements compared with placebo at week 24, with treatment effects observed as early as week eight. As you can see in the graph on the left, at week 24 in the overall population, the reduction in weekly parenteral support volume in the apraglutide group was more than double that of the placebo group.

Speaker #3: One of the reasons I'm so excited to have joined IRONWOOD is the opportunity to help advance a therapy with the potential to address this significant unmet medical need.

Speaker #3: First, Apricotide is currently the only once-weekly GLP-2 analog with positive Phase 3 efficacy and safety data in adults with SBSIF. Data from the STARS study, the largest Phase 3 clinical trial in SBSIF conducted to date, demonstrated significant reductions in parental support requirements compared with placebo at week 24 with treatment effects observed as early as week 8.

Jeff Silber: First, apraglutide is currently the only once-weekly GLP-2 analog with positive phase III efficacy and safety data in adults with SBS-IF. Data from the STARS study, the largest phase III clinical trial in SBS-IF conducted to date,

Jeff Silber: demonstrated significant reductions in parenteral support requirements compared with placebo at week 24, with treatment effects observed as early as week eight. As you can see in the graph on the left, at week 24 in the overall population, the reduction in weekly parenteral support volume in the apraglutide group was more than double that of the placebo group.

Speaker #3: As you can see in the graph on the left, at week 24 in the overall population, the reduction in weekly parental support volume in the Apricotide group was more than double that of the placebo group.

Speaker #3: In addition, a significantly greater proportion of patients receiving Apricotide were able to reduce their dependence on parental support by at least one day per week.

Jeff Silber: In addition, a significantly greater proportion of patients receiving apraglutide were able to reduce their dependence on parenteral support by at least one day per week. Importantly, apraglutide was well-tolerated in the STARS study with an overall safety and GI tolerability profile that was similar to that of placebo. The graph on the right comes from our phase III long-term extension study, STARS Extend. About 90% of the patients enrolled in the STARS trial rolled over into STARS Extend, and the majority remained on treatment at the time of the analysis shown here. These longer-term data show that patients achieve further reductions in their parenteral support requirements with continued exposure to apraglutide. This translates into more patients achieving additional days off of parenteral support, with some reaching enteral autonomy, which is the ultimate goal for patients with SBS-IF.

Speaker #3: Importantly, Apricotide was well tolerated in the STARS study with an overall safety and GI tolerability profile that was similar to that of placebo. The graph on the right comes from our Phase 3 long-term extension study, STARS Extend.

Jeff Silber: The graph on the right comes from our phase III long-term extension study, STARS Extend. About 90% of the patients enrolled in the STARS trial rolled over into STARS Extend, and the majority remained on treatment at the time of the analysis shown here.

Speaker #3: About 90% of the patients enrolled in the STARS trial rolled over into STARS Extend, and the majority remained on treatment at the time of the analysis shown here.

Speaker #3: These longer-term data show that patients achieve further reductions in their parental support requirements with continued exposure to Apricotide. This translates into more patients achieving additional days off of parental support, with some reaching enteral autonomy which is the ultimate goal for patients with SBSIF.

Jeff Silber: These longer-term data show that patients achieve further reductions in their parenteral support requirements with continued exposure to apraglutide. This translates into more patients achieving additional days off of parenteral support, with some reaching enteral autonomy, which is the ultimate goal for patients with SBS-IF.

Speaker #3: In fact, more than one in five patients enrolled in STARS Extend had achieved enteral autonomy as of January 2025. We look forward to sharing additional STARS Extend updates in the future.

Jeff Silber: In fact, more than one in five patients enrolled in STARS Extend had achieved enteral autonomy as of January 2025. We look forward to sharing additional STARS Extend updates in the future. The clinical profile we have observed to date reflects apraglutide's best-in-class differentiated molecular design, differentiating it from both native GLP-2 and other GLP-2 analogs. Apraglutide is long-acting, enabling convenient once-weekly dosing, and it's demonstrated a favorable tolerability profile that may support better treatment adherence. This is an important point because maintaining patients on therapy is a key factor in achieving full treatment benefit, including meaningful and sustained reductions in parenteral support.

Speaker #3: The clinical profile we have observed to date reflects Apricotide's best-in-class differentiated molecular design. Differentiating it from both native GLP-2 and other GLP-2 analogs. Apricotide is long-acting enabling convenient once-weekly dosing.

Jeff Silber: Apraglutide is long-acting, enabling convenient once-weekly dosing, and it's demonstrated a favorable tolerability profile that may support better treatment adherence. This is an important point because maintaining patients on therapy is a key factor in achieving full treatment benefit, including meaningful and sustained reductions in parenteral support.

Speaker #3: And it's demonstrated a favorable tolerability profile that may support better treatment adherence. This is an important point because maintaining patients on therapy is a key factor in achieving full treatment benefit including meaningful and sustained reductions in parental support.

Speaker #3: When you put all of this together, the clinical evidence, the favorable tolerability, and the convenience of once-weekly dosing, we believe that Apricotide has the potential to become the preferred GLP-2 treatment option for patients with SBSIF.

Jeff Silber: When you put all this together, the clinical evidence, the favorable tolerability, and the convenience of once-weekly dosing, we believe that apraglutide has the potential to become the preferred GLP-2 treatment option for patients with SBS-IF, which we expect to expand the number of patients who may benefit from GLP therapy. Looking into the future, a uniquely differentiated GLP-2 analog like apraglutide has the potential to restore intestinal function in patients with other types of GI compromise beyond SBS-IF. Today, however, our top priority is advancing apraglutide to patients with SBS-IF as quickly as possible. To that end, the confirmatory phase III STARS-2 trial was initiated in June as planned and is now actively recruiting patients. STARS-2 is a 24-week global randomized double-blind placebo-controlled trial. The primary endpoint is relative change from baseline in actual weekly parenteral support volume at week 24.

Speaker #3: Which we expect to expand the number of patients who may benefit from GLP therapy. Looking into the future, a uniquely differentiated GLP-2 analog like Apricotide has the potential to restore intestinal function in patients with other types of GI compromise beyond SBSIF.

Jeff Silber: Looking into the future, a uniquely differentiated GLP-2 analog like apraglutide has the potential to restore intestinal function in patients with other types of GI compromise beyond SBS-IF. Today, however, our top priority is advancing apraglutide to patients with SBS-IF as quickly as possible.

Speaker #3: Today, however, our top priority is advancing Apricotide to patients with SBSIF as quickly as possible. And to that end, the confirmatory Phase 3 STARS 2 trial was initiated in June as planned and is now actively recruiting patients.

Jeff Silber: To that end, the confirmatory phase III STARS-2 trial was initiated in June as planned and is now actively recruiting patients. STARS-2 is a 24-week global randomized double-blind placebo-controlled trial. The primary endpoint is relative change from baseline in actual weekly parenteral support volume at week 24.

Speaker #3: STARS 2 is a 24-week global randomized double-blind placebo-controlled trial. The primary endpoint is relative change from baseline in actual weekly parental support volume at week 24.

Speaker #3: As we continue to add clinical trial sites, we'll be leveraging the infrastructure and the relationships that we developed during the conduct of the STARS study.

Jeff Silber: As we continue to add clinical trial sites, we'll be leveraging the infrastructure and the relationships that we developed during the conduct of the STARS study. As a reminder, the phase III STARS study was the largest SBS-IF trial conducted to date with 68 global sites. We're building on that strong foundation, leveraging those existing site relationships and adding new high-potential sites, including more sites in the US, and identifying opportunities to accelerate enrollment. Successful execution of STARS-2 remains one of our highest priorities for Ironwood. As site activation continues, we expect enrollment to build, and we're evaluating opportunities to accelerate the enrollment timeline. We look forward to updating you on our progress in the coming months. In summary, if approved, we believe apraglutide's differentiated clinical profile, once-weekly dosing, and long-term data position it to meaningfully improve the treatment landscape for patients with SBS-IF.

Speaker #3: As a reminder, the Phase 3 STARS study was the largest SBSIF trial conducted to date with 68 global sites. We're building on that strong foundation leveraging those existing site relationships and adding new high-potential sites including more sites in the US and identifying opportunities to accelerate enrollment.

Jeff Silber: We're building on that strong foundation, leveraging those existing site relationships and adding new high-potential sites, including more sites in the US, and identifying opportunities to accelerate enrollment. Successful execution of STARS-2 remains one of our highest priorities for Ironwood.

Speaker #3: Successful execution of STARS 2 remains one of our highest priorities for IRONWOOD. As site activation continues, we expect enrollment to build, and we're evaluating opportunities to accelerate the enrollment timeline.

Jeff Silber: As site activation continues, we expect enrollment to build, and we're evaluating opportunities to accelerate the enrollment timeline. We look forward to updating you on our progress in the coming months. In summary, if approved, we believe apraglutide's differentiated clinical profile, once-weekly dosing, and long-term data position it to meaningfully improve the treatment landscape for patients with SBS-IF.

Speaker #3: We look forward to updating you on our progress in the coming months. In summary, if approved, we believe Apricotide's differentiated clinical profile once-weekly dosing and long-term data position it to meaningfully improve the treatment landscape for patients with SBSIF.

Speaker #3: With that, I'll pass the call to Ron.

Jeff Silber: With that, I'll pass the call to Ron.

Speaker #1: Thanks, Jeff. And thanks, Tom, for the introduction. I'm pleased to have the opportunity to join the call today. I look forward to working closely with our investors and analysts as we continue to advance our strategic priorities.

Ron Silver: Thanks, Jeff. Thanks, Tom, for the introduction. I'm pleased to have the opportunity to join the call today and look forward to working closely with our investors and analysts as we continue to advance our strategic priorities with a focus on financial discipline and operational excellence. Turning to our financial results. During Q2, total revenue was $113 million, GAAP net income was $51 million, and adjusted EBITDA was $83 million. We ended the quarter with $79 million in cash and cash equivalents and $113 million in collaboration receivables. As Tom mentioned, we repaid our convertible notes at maturity in June. Looking ahead, we intend to continue using operating cash flows to further reduce our debt balance. Based on our current outlook, we expect to end the year with less than $300 million of gross debt outstanding, further strengthening our balance sheet and financial flexibility.

Speaker #1: With a focus on financial discipline and operational excellence, turning to our financial results—during the second quarter, total revenue was $113 million, GAAP net income was $51 million, and adjusted EBITDA was $83 million.

Speaker #1: We ended the quarter with $79 million in cash and cash equivalents and $113 million in collaboration receivables. As Tom mentioned, we repaid our convertible notes at maturity in June.

Ron Silver: We ended the quarter with $79 million in cash and cash equivalents and $113 million in collaboration receivables. As Tom mentioned, we repaid our convertible notes at maturity in June.

Speaker #1: Looking ahead, we intend to continue using operating cash flows to further reduce our debt balance. Based on our current outlook, we expect to end the year with less than $300 million of gross debt outstanding.

Ron Silver: Looking ahead, we intend to continue using operating cash flows to further reduce our debt balance. Based on our current outlook, we expect to end the year with less than $300 million of gross debt outstanding, further strengthening our balance sheet and financial flexibility.

Speaker #1: Further strengthening our balance sheet and financial flexibility. Now turning to guidance. Given the continued strength of LINZS and our very strong first-half performance, I am pleased to share that we are increasing our full year 2026 guidance.

Ron Silver: Now turning to guidance. Given the continued strength of LINZESS and our very strong H1 performance, I am pleased to share that we are increasing our full year 2026 guidance. We now expect LINZESS US net sales of between $1.15 billion and $1.2 billion, representing a greater than 30% increase year over year. This increase is driven by significantly improved net price and mid-single-digit LINZESS prescription demand growth. Our revenue guidance has increased to between $460 million and $485 million. We expect adjusted EBITDA of greater than $310 million. This increase in our guidance reflects both the strength of our underlying business and our confidence in continued execution on our priorities throughout the remainder of the year.

Speaker #1: We now expect LINZS US net sales of between $1.15 billion and $1.2 billion. Representing a greater than 30% increase year over year. This increase is driven by significantly improved net price and mid-single-digit LINZS prescription demand growth.

Ron Silver: This increase is driven by significantly improved net price and mid-single-digit LINZESS prescription demand growth. Our revenue guidance has increased to between $460 million and $485 million. We expect adjusted EBITDA of greater than $310 million. This increase in our guidance reflects both the strength of our underlying business and our confidence in continued execution on our priorities throughout the remainder of the year.

Speaker #1: Our revenue guidance has increased to between $460 million and $485 million and we expect adjusted EBITDA of greater than $310 million. This increase in our guidance reflects both the strength of our underlying business and our confidence in continued execution on our priorities throughout the remainder of the year.

Speaker #1: Now I'd like to turn the call back over to Tom for some closing remarks.

Ron Silver: Now I'd like to turn the call back over to Tom for some closing remarks.

Speaker #3: Thanks, Ron. In summary, the second quarter was marked by strong commercial execution of LINZS, continued advancement of Apricotide with the initiation of STARS 2, and meaningful progress towards strengthening our balance sheet.

Thomas McCourt: Thanks, Ron. In summary, the Q2 was marked by strong commercial execution of LINZESS, continued advancement of apraglutide, with the initiation of STARS-2, and meaningful progress towards strengthening our balance sheet. Throughout the H2 of the year, we will remain laser-focused on executing on our strategic priorities and advancing our vision to redefine standard of care for patients living with GI and rare disease. Before I turn it over to Q&A, I would like to thank our employees, patients, caregivers, investigators, and advocacy partners for their continued commitment and support. Operator, we're now ready to open up the line for questions.

Tom McCourt: Thanks, Ron. In summary, the Q2 was marked by strong commercial execution of LINZESS, continued advancement of apraglutide, with the initiation of STARS-2, and meaningful progress towards strengthening our balance sheet.

Speaker #3: Throughout the second half of the year, we will remain laser-focused on executing on our strategic priorities in advancing our vision to redefine standard of care for patients living with GI and rare diseases.

Tom McCourt: Throughout the H2 of the year, we will remain laser-focused on executing on our strategic priorities and advancing our vision to redefine standard of care for patients living with GI and rare disease. Before I turn it over to Q&A, I would like to thank our employees, patients, caregivers, investigators, and advocacy partners for their continued commitment and support. Operator, we're now ready to open up the line for questions.

Speaker #3: Before I turn it over to Q&A, I would like to thank our employees, patients, caregivers, investigators, and advocacy partners for their continued commitment and support.

Speaker #3: Operator, we're now ready to open up the line for questions.

Speaker #1: Thank you. At this time, I would like to remind everybody that in order to ask a question, please press star followed by the number one on your telephone keypad.

Operator 2: Thank you. At this time, I would like to remind everybody that in order to ask a question, please press star, followed by the number one on your telephone keypad. Once again, that is star, followed by the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Our first question comes from the line of Jason Butler from Citizens. Your line is opened.

Operator: Thank you. At this time, I would like to remind everybody that in order to ask a question, please press star, followed by the number one on your telephone keypad. Once again, that is star, followed by the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Our first question comes from the line of Jason Butler from Citizens. Your line is opened.

Speaker #1: Once again, that is star followed by the number one, on your telephone keypad. We will pause for just a moment to compile the Q&A roster.

Speaker #1: Our first question comes from the line of Jason Bullard from Ferguson's. Your line is opened.

Speaker #4: Hi guys. Can you hear me?

Jason Butler: Hi, guys. Can you hear me?

Speaker #3: Yep.

Thomas McCourt: Yep.

Speaker #4: Yep. Hey, it's Jason Butler from Citizens. Thanks for taking the questions. Just a couple for me. First, I know one question at the beginning of the year was, would there be an impact on demand from the net price change?

Thomas McCourt: Yep.

Tom McCourt: Yep.

Jason Butler: Hey, it's Jason Butler from Citizens. Thanks for taking the questions. Just a couple from me. First, I know one question at the beginning of the year was: would there be an impact on demand, from the net price change? Seems like you have an increased comfort level that that isn't going to happen now, even on a delayed basis. Can you just walk us through those dynamics?

Speaker #4: It seems like you have an increased comfort level that isn't going to happen now even on a delayed basis. Can you just walk us through those dynamics?

Speaker #3: Everyone, thank you.

Ron Silver: Tammi, you want to take that one?

Tom McCourt: Tammi, you want to take that one?

Speaker #5: Hi Jason, it's Tammy. Appreciate the question. So as I stated, through June, we are tracking to 5% year-to-date EUTRX volume demand growth, which is modestly ahead of what we had shown or indicated early in the year, which was low single-digit demand growth.

Tammi Gaskins: Hi, Jason. It's Tammi. Appreciate the question. As I stated, through June, we are tracking to 5% year-to-date, EUTRX volume demand growth, which is modestly ahead of what we had shown or indicated early in the year, which was low single-digit demand growth. Based on where we are in the year, and the fact that historically, our performance from a demand perspective even further increases in the second half of the year, that has given us the confidence and the belief to raise the demand number to mid-single digits. We've done a lot. We did indicate previously that we thought there could be some demand softening due to the elimination of the inflationary rebates across channels.

Speaker #5: And based on where we are in the year, and the fact that historically our performance from a demand perspective even further increases in the second half of the year, that has given us the confidence and the belief to raise the demand number to mid-single digits.

Tammi Gaskins: Based on where we are in the year, and the fact that historically, our performance from a demand perspective even further increases in the second half of the year, that has given us the confidence and the belief to raise the demand number to mid-single digits. We've done a lot. We did indicate previously that we thought there could be some demand softening due to the elimination of the inflationary rebates across channels.

Speaker #5: We've done a lot we did indicate previously that we thought there could be some demand softening due to the elimination of the inflationary rebates cross-channels.

Speaker #5: But we've done a lot working with our partner to really help ensure ongoing access for patients across channels. And we think we're in a very good spot now to deliver in that mid-single digit range to the full year.

Tammi Gaskins: We've done a lot working with our partner to really help ensure ongoing access for patients across channels, and we think we're in a very good spot now to deliver in that mid-single-digit range through the full year.

Speaker #4: Great. And then, second one for me—just on STARS 2—I understand you're still relatively early here in the trial, but can you just walk us through how site onboarding is going?

Jason Butler: Great. Then, second one for me, just STARS-2. I understand you're still relatively early here in the trial, but can you just walk us through how site onboarding is going? Then just the comments you made about potentially impacting or improving enrollment timelines. Can you just give us a little more detail about what your strategies could be there? Thank you.

Speaker #4: And then just the comments you made about potentially impacting or improving enrollment timelines. Can you just give us a little more detail about what your strategies could be there?

Speaker #4: Thank you.

Speaker #3: Yep, absolutely, Jason. This is Jeffrey Brady. I'll open the response. But as you noted, it's early days. We initiated the trial in June, and we have our first sites activated and enrolling patients.

Jeff Ruberti: Yep. Absolutely, Jason. This is Jeff Ruberti. I'll open the response. As you noted, it's early days. We initiated the trial in June, and we have our first sites activated and enrolling patients. The full weight of the company is really pressing behind ramping up the trial, activating more sites, and we look forward to providing more operational details. As we noted, Jeff Silber just joined the team, and it is top priority as well. Jeff, do you want to comment on the opportunity to accelerate the timeline?

Speaker #3: And the full weight of the company is really pressing behind ramping up the trial, activating more sites, and we look forward to providing more operational details.

Speaker #3: As we noted, Jeff Silber just joined the team and is top priority as well. And Jeff, do you want to comment on the opportunity to accelerate the timeline?

Jeff Ruberti: As we noted, Jeff Silber just joined the team, and it is top priority as well. Jeff, do you want to comment on the opportunity to accelerate the timeline?

Speaker #2: Sure. It's week three. And so I am working with the team and what's impressed me so far is the diligence with which the team is executing on the plan that had been laid out in early over the last several months.

Jeff Silber: Sure. It's week three, and so I am working with the team, and what's impressed me so far is the diligence with which the team is executing on the plan that had been laid out over the last several months. I am just now beginning to look through this with a fine-tooth comb. I will be looking for opportunities to accelerate and look forward to sharing in the coming months. For right now, the priority really is to execute optimally on the plan that had already been developed.

Speaker #2: I am just now beginning to look through this with a fine-tooth comb, will be looking for opportunities to accelerate and look forward to sharing in the coming months for right now, the priority really is to execute optimally on the plan that had already been developed.

Jeff Silber: I am just now beginning to look through this with a fine-tooth comb. I will be looking for opportunities to accelerate and look forward to sharing in the coming months. For right now, the priority really is to execute optimally on the plan that had already been developed.

Speaker #3: Yeah, I think the big thing here, Jason, is Tom, is really the expansion of the number of sites. Particularly in the US, where we were with STARS, as you recall, there wasn't a lot of US sites.

Thomas McCourt: Yeah. I think the big thing here, Jason, it's Tom, is really the expansion of the number of sites, particularly in the US, where we were with STARS. As you recall, there wasn't a lot of US sites. It was largely ex-US. We see a real opportunity here, and obviously, that's building off real strong support from our scientific steering committee, who are a lot of the key investigators around the country. Also our ability to identify high-potential sites where there clearly is, or we know there are patients that exist. I think with our trial design and combining that with the clinical profile of the drug

Tom McCourt: Yeah. I think the big thing here, Jason, it's Tom, is really the expansion of the number of sites, particularly in the US, where we were with STARS. As you recall, there wasn't a lot of US sites.

Speaker #3: It was largely ex-US. And we see a real opportunity here. And obviously, that's building off real strong support from our steering committee scientific steering committee, who are a lot of the key investigators around the country and also our ability to identify high potential sites where there clearly is or we know there are patients that exist.

Tom McCourt: It was largely ex-US. We see a real opportunity here, and obviously, that's building off real strong support from our scientific steering committee, who are a lot of the key investigators around the country. Also our ability to identify high-potential sites where there clearly is, or we know there are patients that exist. I think with our trial design and combining that with the clinical profile of the drug

Speaker #3: And I think with the with our trial design and combining that with the clinical profile of the drug, we were pretty confident that we're going to be able to bring in a number of patients fairly quickly.

Thomas McCourt: We're pretty confident that we're going to be able to bring in a number of patients fairly quickly. Obviously, we'll be updating you and the rest of the investment community as we progress through that process.

Tom McCourt: We're pretty confident that we're going to be able to bring in a number of patients fairly quickly. Obviously, we'll be updating you and the rest of the investment community as we progress through that process.

Speaker #3: But obviously, we'll be updating you and the rest of the investment community as we progress through that process.

Speaker #4: Thanks, Tom. I appreciate it. Thanks for taking the questions.

Jason Butler: Thanks, Tom. I appreciate it. Thanks for taking the questions.

Speaker #1: Our next question comes from the line of Mohit Bansal with Wells Fargo. Your line is opened.

Operator 2: Our next question comes from the line of Mohit Bansal with Wells Fargo. Your line is open.

Operator: Our next question comes from the line of Mohit Bansal with Wells Fargo. Your line is open.

Speaker #6: Great. Thank you very much for taking my questions and congrats on all the progress. So just to I have two questions. So one on Eprion and one on Linzes.

Mohit Bansal: Great. Thank you very much for taking my questions, and congrats on all the progress. I have two questions, one on apraglutide and one on LINZESS. For LINZESS, there was some concern around could there be some plans they could have an issue given the price is higher now. Are you seeing anything like that in the Medicaid patient population so far? It doesn't seem like that, but would love for you to touch upon that. Then for apraglutide, now that you are expanding to newer sites and all that, how do you make sure that trial conduct issues last time and when people did not dose properly, how do you ensure that a repeat of that doesn't happen as you go into more sites here? Thank you.

Speaker #6: So there was some for Linzes, there was some concern around could there be some plans they could have an issue given the price is higher now?

Speaker #6: Are you seeing anything like that in the Medicaid patient population? So far, it doesn't seem like that, but we'd love to touch we'd love for you to touch upon that.

Mohit Bansal: It doesn't seem like that, but would love for you to touch upon that. Then for apraglutide, now that you are expanding to newer sites and all that, how do you make sure that trial conduct issues last time and when people did not dose properly, how do you ensure that a repeat of that doesn't happen as you go into more sites here? Thank you.

Speaker #6: And then for Epra, so now that you are expanding to newer sites and all that, how do you make sure that the trial conduct issues last time when people did not dose properly?

Speaker #6: How do you ensure that a repeat of that doesn't happen as you go into more sites here? Thank you.

Speaker #3: Sure. Tammy, do you want to take the first question on Linzes?

Thomas McCourt: Tammi, do you want to take the first question on this?

Tom McCourt: Tammi, do you want to take the first question on this?

Speaker #5: Yeah, sure. Hi Mohit. It's Tammy, and appreciate the question. So you're absolutely correct in that before we had talked about and part of the reason we indicated low single-digit demand growth at the beginning of the year is through the elimination of the inflationary rebates across channels, including Medicaid.

Tammi Gaskins: Yeah, sure. Hi, Mohit. It's Tammi. Appreciate the question. You're absolutely correct in that before we had talked about, part of the reason we indicated low single-digit demand growth at the beginning of the year is through the elimination of the inflationary rebates across channels, including Medicaid. We thought there could be some demand softening. Based on where we are at the year, the 5%, the fact that we have done, as I mentioned, a lot with our partner to work with the states individually to help ensure ongoing access to those patients. We are now very confident in that mid-single digit expectation for that mid-single digit demand growth through the rest of the year, especially since historically, our demand has a bit of a seasonality and increases towards the latter half of the year, especially in Q4.

Speaker #5: We thought there could be some demand softening. But based on where we are at the year, the 5%, and the fact that we have done, as I mentioned, a lot with our partner to work with the states individually to help ensure ongoing access to those patients we are now very confident in that mid-single digit expectation for that mid-single demand growth for the through the rest of the year, especially since historically our demand has a bit of a seasonality and increases towards the latter of the half of the year, especially in Q4.

Tammi Gaskins: Based on where we are at the year, the 5%, the fact that we have done, as I mentioned, a lot with our partner to work with the states individually to help ensure ongoing access to those patients. We are now very confident in that mid-single digit expectation for that mid-single digit demand growth through the rest of the year, especially since historically, our demand has a bit of a seasonality and increases towards the latter half of the year, especially in Q4.

Speaker #3: Just to I'm sorry. No, no, you're good. Jeff, just to be clear on kind of this issue or concern that we had on dose, as you recall, with the original trials, the STARS trial, the intent was to deliver a 5 milligram dose.

Thomas McCourt: Oh, sorry. No, you go. Jeff. Just to be clear on kind of this issue or concern that we had on dose. As you recall, with the original trials, the STARS trial, the intent was to deliver a 5-milligram dose. Unfortunately, due to the kit and the instructions, what we actually saw was a delivery of three and a half milligrams. Clearly the drug worked, and it was extremely well-tolerated, even at three and a half milligrams. What we wanted to do was match that so we could leverage the great data of STARS with this smaller confirmatory trial. What we've done since then, based on the root cause analysis on the delivery, we've dramatically improved the kit to avoid any kind of errors in instruction or implementation of the new kit. We've done several human factor studies around that.

Tom McCourt: Oh, sorry. No, you go. Jeff. Just to be clear on kind of this issue or concern that we had on dose. As you recall, with the original trials, the STARS trial, the intent was to deliver a 5-milligram dose. Unfortunately, due to the kit and the instructions, what we actually saw was a delivery of three and a half milligrams.

Speaker #3: Unfortunately, due to the kit and the instructions, what we actually saw was a delivery of 3.5 milligram. Now, clearly, the drug worked, and it was extremely well tolerated, even at 3.5 milligrams.

Tom McCourt: Clearly the drug worked, and it was extremely well-tolerated, even at three and a half milligrams. What we wanted to do was match that so we could leverage the great data of STARS with this smaller confirmatory trial.

Speaker #3: So what we wanted to do was match that. So we could leverage the great data of STARS with this smaller confirmatory trial. Now, what we've done since then, based on the root cause analysis on the delivery, we've dramatically improved the kit to avoid any kind of errors in instruction or implementation of the new kit.

Tom McCourt: What we've done since then, based on the root cause analysis on the delivery, we've dramatically improved the kit to avoid any kind of errors in instruction or implementation of the new kit. We've done several human factor studies around that.

Speaker #3: And we've done several human factor studies around that. We've also done drug exposure and kinetic data. So we're absolutely confident that we're in complete control of the dose.

Thomas McCourt: We've also done drug exposure and kinetic data. We're absolutely confident that we're in complete control of the dose, we're absolutely confident that this error will not happen in STARS-2. I think moving forward, we see a very high probability of success to reconfirm the great data we saw in the original STARS trial.

Tom McCourt: We've also done drug exposure and kinetic data. We're absolutely confident that we're in complete control of the dose, we're absolutely confident that this error will not happen in STARS-2. I think moving forward, we see a very high probability of success to reconfirm the great data we saw in the original STARS trial.

Speaker #3: And we're absolutely confident that this error will not happen in STARS 2. So I think moving forward, we see a very, very high probability of success to reconfirm the great data we saw in the original STARS trial.

Speaker #6: Very helpful. Thank you. And then congrats, Jeff and Ron, and welcome to the group. Thank you.

Mohit Bansal: Very helpful. Thank you. Congrats, Jeff and Ron, welcome to the group. Thank you.

Speaker #3: Thank you.

Thomas McCourt: Thanks.

Jeff Silber: Thanks.

Thomas McCourt: Thank you.

Ron Silver: Thank you.

Speaker #5: Thanks.

Tammi Gaskins: Thanks.

Thomas McCourt: Thanks, Mohit.

Tom McCourt: Thanks, Mohit.

Speaker #3: Great fun.

Speaker #1: Once again, a reminder, if you'd like to ask a question, please press star, followed by the number one on your telephone keypad. Our next question comes from the line of Dominic Rose with Intron Health.

Operator 2: Once again, a reminder, if you'd like to ask a question, please press star followed by the number one on your telephone keypad. Our next question comes from the line of Dominic Rose with Intron Health. Your line is opened.

Operator: Once again, a reminder, if you'd like to ask a question, please press star followed by the number one on your telephone keypad. Our next question comes from the line of Dominic Rose with Intron Health. Your line is opened.

Speaker #1: Your line is opened.

Speaker #7: Hi, this is Dominic from Intron Health. Thanks for taking my questions. I've got two. My first question is both Q1 and Q2 saw favorable time phasing of gross-to-net rebate reserves.

Dominic Rose: Hi, this is Dominic from Intron Health. Thanks for taking my questions. I've got two. My first question is, both Q1 and Q2 saw favorable time phasing of gross to net rebate reserves. Do we expect this to unwind in H2, or would there be more favorable moves? Is there anything you can tell us about that? My second question is, in May you flagged that Medicaid would be most likely seeing reduced volume growth in H2. Is that still your expectation now given the guidance upgrade? Thanks.

Speaker #7: Do we expect this to unwind in H2, or would there be more favorable moves? Is there anything you can tell us about that? And my second question is, in May, you flagged that Medicaid would be most likely seeing reduced volume growth in H2.

Dominic Rose: Is there anything you can tell us about that? My second question is, in May you flagged that Medicaid would be most likely seeing reduced volume growth in H2. Is that still your expectation now given the guidance upgrade? Thanks.

Speaker #7: Is that still your expectation now, given the guidance upgrade? Thanks.

Speaker #3: Thanks, Dominic. Tammy, you want to take both of those?

Thomas McCourt: Thanks, Dominic. Tammi, you want to take both of those?

Tom McCourt: Thanks, Dominic. Tammi, you want to take both of those?

Speaker #5: Sure. Appreciate the question. This is Tammy. So to start with the favorability of phasing of gross-to-net reserve. So first, as I indicated in my comments, we do expect less variability in sequential quarterly net sales this year.

Tammi Gaskins: Sure. Appreciate the question. This is Tammi. To start with the favorability of phasing of gross to net reserve. First, as I indicated in my comments, we do expect less variability in sequential quarterly net sales this year. We had quite a bit of variability last year because there was for two key reasons. One, there was more difference in net price across channels. Because of accruing rebates relative to actual demands dispensed in a quarter, that variability in price had more of a variability because of seasonality of certain sectors of the business. This year, more consistent net price across channels, not be affected nearly to the extent of the seasonality and actual units dispensed.

Speaker #5: We had quite a bit of variability last year because there was for two key reasons. One, there was more difference in net price across channels.

Speaker #5: And because of accruing rebates relative to actual demands dispensed in a quarter, that variability in price had more of a variability because of seasonality of certain sectors of the business.

Tammi Gaskins: Because of accruing rebates relative to actual demands dispensed in a quarter, that variability in price had more of a variability because of seasonality of certain sectors of the business. This year, more consistent net price across channels, not be affected nearly to the extent of the seasonality and actual units dispensed.

Speaker #5: So this year, we're consistent net price across channels—not affected nearly to the extent of the seasonality in actual units dispensed. But also, we expect to see quarter-on-quarter increases in performance, with Q4 actually being the strongest quarter that we'll have this year from a net sales perspective.

Tammi Gaskins: Also we expect to see quarter on quarter increase in performance with Q4 actually being the strongest quarter that we'll have this year from a net sales perspective. In key takeaway, don't expect there to be an unwinding, if you will, due to changes in favorability quarter on quarter.

Speaker #5: In key takeaway, don't expect there to be an unwinding, if you will, due to changes in favorability quarter-on-quarter.

Speaker #3: And the anticipated reduction for Medicaid volume?

Thomas McCourt: The anticipated reduction for Medicaid volume?

Tom McCourt: The anticipated reduction for Medicaid volume?

Speaker #5: Yes. Yes. So as I said, we saw strong 5% demand growth through mid-year. We've worked very hard at a state level with our payer to help maintain excess across channels.

Tammi Gaskins: Yes. As I said, we saw strong 5% demand growth through mid-year. We've worked very hard at a state level with our payer to help maintain access across channels, including Medicaid, and we are still projecting to have our growth across channels to be in line with expectations to drive that mid-single digit demand growth through the full year.

Speaker #5: Including Medicaid and we are still projecting to have our growth across channels to be in line with expectations to drive that mid-single digit demand growth full to full through the full year.

Speaker #3: So bottom line, Tammy, I think what we're at is we're not seeing the dramatic reduction in Medicaid that we thought we were at risk of.

Thomas McCourt: Bottom line, Tammi, I think where we're at is we're not seeing the dramatic reduction in Medicaid that we thought we were at risk of.

Tom McCourt: Bottom line, Tammi, I think where we're at is we're not seeing the dramatic reduction in Medicaid that we thought we were at risk of.

Speaker #3: So I think we feel very good about the current trend we're on with regard to volume, as well as net price.

Tammi Gaskins: Correct.

Thomas McCourt: I think we feel very good about the current trend we're on with regard to volume as well as net price.

Tom McCourt: I think we feel very good about the current trend we're on with regard to volume as well as net price.

Speaker #5: And we expect more consistent sequential quarterly net sales growth, continue to improve performance each quarter throughout the end of the year with fourth quarter being our strongest performer.

Tammi Gaskins: We expect more consistent sequential quarterly net sales growth, continue to improve performance each quarter throughout the end of the year, with Q4 being our strongest performer.

Speaker #7: Thank you. I appreciate the detail.

Dominic Rose: Thank you. I appreciate the detail.

Speaker #3: Thanks, Dominic.

Thomas McCourt: Thanks, Mohit.

Tom McCourt: Thanks, Mohit.

Speaker #1: Our next question comes from the line of Chase Knickerbocker with Craig Hellum. Your line is opened.

Operator 2: Our next question comes from the line of Chase Knickerbocker with Craig-Hallum. Your line is opened.

Operator: Our next question comes from the line of Chase Knickerbocker with Craig-Hallum. Your line is opened.

Speaker #8: Good morning. Thanks for taking the questions. Maybe just on Lindsay's net sales guidance—the high end of the range went up by a higher magnitude than the bottom.

Chase Knickerbocker: Good morning. Thanks for taking the questions. Maybe just on LINZESS net sales guidance. The high end of the range went up by a higher magnitude than the bottom. Just trying to understand the end caps on the guidance there. Is it a little bit of conservatism just as far as kind of IRA rebates in H2 as far as the bottom end of the range? Or just maybe help me understand both sides. Thanks.

Speaker #8: Just trying to understand the edge caps. The end caps on the guidance there. Is it a little bit of conservatism just as far as kind of IRA rebates in the back half?

Speaker #8: As far as the bottom end of the range, or just maybe kind of help me understand both sides? Thanks.

Speaker #3: Hi, Chase. The increase in the guidance was actually consistent on each end of the range. It was up by 25 million. And I think the major driver of the confidence to raise that guidance was the mid-single digit demand, which we've seen now consistently two quarters in a row.

Thomas McCourt: Hi, Chase. The increase in the guidance was actually consistent on each end of the range. It was up by $25 million. I think the major driver of the confidence to raise that guidance was the mid-single digit demand, which we've seen now consistently two quarters in a row. It gives us confidence we'll be able to land in that range. Just to reiterate, the range was improved consistently across both ends.

Tom McCourt: Hi, Chase. The increase in the guidance was actually consistent on each end of the range. It was up by $25 million. I think the major driver of the confidence to raise that guidance was the mid-single digit demand, which we've seen now consistently two quarters in a row. It gives us confidence we'll be able to land in that range. Just to reiterate, the range was improved consistently across both ends.

Speaker #3: So it gives us confidence we'll be able to land in that range. But just to reiterate, the range was improved consistently across both ends.

Speaker #8: Understood. And then just as we think about the EBITDA guidance on the year, any additional kind of color you can give us as far as kind of how we should be thinking about kind of R&D progressing in Q3 and Q4 on those step-ups?

Chase Knickerbocker: Understood. Then just as we think about the EBITDA guidance on the year, any additional kind of color you can give us as far as how we should be thinking about R&D progressing in Q3 and Q4 on those step-ups, just as we think about the bottom end of the P&L?

Speaker #8: Just as we think about kind of the bottom end of the bottom end of the P&L.

Speaker #3: Absolutely. Ron, do you want to take that?

Thomas McCourt: Absolutely. Ron, do you want to take that?

Tom McCourt: Absolutely. Ron, do you want to take that?

Speaker #2: Sure. Thanks. Thanks, Chase. Appreciate the question. So for the remainder of '26, we do expect R&D expense to increase relative to the first half of the year.

Ron Silver: Sure. Thanks, Chase. Appreciate the question. For the remainder of 2026, we do expect R&D expense to increase relative to H1 of the year. That reflects the ramp-up of the STARS 2 trial we initiated in June. We also expect a modest increase in SG&A expense as well. Thank you, Rob X.

Speaker #2: And that reflects the ramp-up of the STARS 2 trial. We initiated in June. We'd also expect a modest increase in SG&A expense as well.

Speaker #2: I think through OPEX.

Speaker #3: And obviously, Chase, that's all going to be dependent on how many sites we can get up and running and how fast we can do that.

Thomas McCourt: Obviously, Chase, that's all going to be dependent on how many sites we can get up and running and how fast we can do that. Obviously, that's a critical investment in our future. While obviously this quarter the EBITDA was remarkably strong, I think we'll see that continuing throughout the end of the year, but we clearly will see an increased expense, as Ron mentioned. That's going to be largely dependent on how many sites we can get up and running and how fast we can do it.

Tom McCourt: Obviously, Chase, that's all going to be dependent on how many sites we can get up and running and how fast we can do that. Obviously, that's a critical investment in our future. While obviously this quarter the EBITDA was remarkably strong,

Speaker #3: And obviously, that's a critical investment in our future. So while obviously, this quarter, the EBITDA was remarkably strong, I think we certainly see that continuing throughout the end of the year.

Tom McCourt: I think we'll see that continuing throughout the end of the year, but we clearly will see an increased expense, as Ron mentioned. That's going to be largely dependent on how many sites we can get up and running and how fast we can do it.

Speaker #3: But we clearly will see an increased expense as Ron mentioned. But that's going to be largely dependent on how many sites we can get up and running and how fast we can do it.

Speaker #8: Got it. Thanks, guys.

Chase Knickerbocker: Got it. Thanks, guys.

Speaker #3: Thanks, Chase.

Thomas McCourt: Thanks, Chase.

Tom McCourt: Thanks, Chase.

Speaker #1: And there are no further questions at this time. With that, that concludes today's conference call. Thank you all for joining us. You may now disconnect.

Operator 2: There are no further questions at this time. With that concludes today's conference call. Thank you all for joining us. You may now disconnect. Have a good rest of your day.

Operator: There are no further questions at this time. With that concludes today's conference call. Thank you all for joining us. You may now disconnect. Have a good rest of your day.

Q2 2026 Ironwood Pharmaceuticals Inc Earnings Call

Request DemoDemo

Ironwood

Earnings