Ironwood Pharmaceuticals, Inc.

Ladies and gentlemen, thank you for standing by. My name is Sherrell, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ironwood Pharmaceuticals Q2 2023 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. If you would like to ask a question during this time, Simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Matt Roach, Director of Investor Relations. Your line is now open.

Thank you, Sherelle. Good morning and thanks for joining us for our second quarter 2023 investor update. Our press release issued this morning can be found on our website. Today's call and accompanying slides include forward-looking statements. 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 on Form 10-K in the year ended December 31, 2022, and in our subsequent SEC filings. 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. To the extent applicable, please refer to the tables at the end of our press release for reconciliation of these measures to the most directly comparable GAAP measures. During today's call, Tom McCourt, our Chief Executive Officer, We review our strategic priorities and our pipeline. And Shrevan Imani, our Chief Financial Officer, will provide an update on the commercial performance of Linzess, discuss the recent addition of apraglutide to our portfolio through our acquisition of VectorBio, and review our financial results and updated guidance. Andrew Davis, our Chief Business Officer, is available for the question and answer session following our prepared remarks. Mike Schatzlein, our Chief Medical Officer, is unable to attend today's call, as he's out for personal reasons unrelated to Ironwood's business. While we do not know how long Mike may be out, we will provide updates as appropriate. Today's webcast includes slides, so for those of you dialing in, please go to the event section of our website to access the accompanying slides separately. With that, I'll turn the call over to Tom.

Thanks, Matt. Good morning, everyone, and thanks for joining us today. I'm excited to provide an update on our progress on what has been a transformative quarter at Ironwood. First, I'm pleased to announce that we are increasing our full year LINZUS US NET sales and Ironwood revenue guidance based on the strong performance of LINZUS. Second, LINZUS received FDA approval to treat pediatric patients ages 6 to 17 years old for functional constipation, further expanding the clinical utility of the brand and its growth potential. Finally, we're excited to have completed the tender offer to acquire Vector Bio, including their key GLP-2 asset, epiglutide. If successful and approved, we believe epiglutide has the potential to become the new standard of care for patients suffering from short bowel syndrome with intestinal failure and achieve a billion dollars in peak net sales. We believe the continued success of lenses combined with our expanding pipeline as as well positioned to realize our vision of becoming the leading GI healthcare company. let's turn to slide six for a brief overview of our strategic priorities. First maximize lenses. Linzess continues to see robust prescription demand growth, profitability, and widespread acceptance among healthcare practitioners as a leading branded prescription treatment for adults with IBSC and chronic idiopathic constipation. In the second quarter, U.S. net sales and prescription demand both increased 9% year-over-year, demonstrating that the momentum of the brand remains strong. In June, Linzess received FDA approval for pediatric patients ages 6 to 17 for functional constipation, making Linzess the first and only prescription therapy indicator for the use in this population, which has a high unmet medical need and limited treatment options. We're extremely proud of this achievement for Ironwood, but more importantly for patients. Moving on to our second strategic priority, strengthen and progress our innovative GI portfolio. In addition to the impressive LINZUS performance in the second quarter, we also significantly enhanced our GR portfolio with the acquisition of ActiveBio. This acquisition fits squarely within our strategic framework, and we believe it represents a critical step for Ironwood to achieve our vision and deliver value to patients and shareholders. Our third strategic priority is to deliver sustained profits and generate cash flow. We expect the cash flow from Linzess will support a rapid de-levering to below two times total net debt to EBITDA ahead of the potential epiglutide commercial launch in 2025. As a GI-focused biopharma with strong cash flow generation, we believe we are well positioned to maximize Linzess growth and continue to advance our pipeline programs to create the next growth horizon for the company. Next, I'll review our pipeline programs, which you can see on slide 7. I'll start with an update on the timing of the top-line data for the STARS Phase III clinical program of afraglutide and short bowel syndrome intestinal failure, which continues to be our primary focus in the VECTIV-BIO pipeline and the expected value driver from the acquisition. We recently completed enrollment of the STARS phase three trial with 164 patients suffering from short bowel syndrome with intestinal failure. It is the largest GLP-2 study ever conducted in short bowel syndrome with intestinal failure. A big congratulations to the entire STARS clinical team and the entire organization for this tremendous accomplishment. Given the medical need and the interest of patients, We elected to enroll all screen patients that made it successfully through the star studies screening process in honor of their commitment to participate in the clinical trial, allowing for more global diversity, which we believe is beneficial to both patients and the global development program. We expect the addition of these patients will now result in a top line readout for the stars phase three in March 2024. In addition, apraglutide for short bowel syndrome and testicle failure receive fast-track designation, which is designed to expedite development of treatments for patients with limited treatment options and can lead to earlier drug approval and faster access. Apiglutide's FAST-TRACK designation further reinforces our conviction in the clinical development program based on the unmet medical need and the potential benefit for patients suffering from short bowel syndrome with intestinal failure, which remains on track for a potential launch in 2025. We look forward to providing additional updates as the study continues to advance. In addition to evaluating apiglutide for short bowel syndrome with intestinal failure, We are also evaluating the asset as a potential treatment for patients with graft-versus-host disease, or GBHD. Graft-versus-host disease is immunologically mediated and occurs in individuals with allogenic hematopoietic stem cell transplantation where donor immune cells react against the host recipient. The gastrointestinal tract is among the most common sites that is affected by GVHD and severe manifestations of GVHD if the gut portends poor prognosis in patients after stem cell transplant. We are currently executing a proof of concept phase two study, which is going well, and recently completed a preplanned interim analysis. The interim analysis supported continuing the study without any changes. Given the recent acceleration in recruitment of the study, we expect a complete recruitment in the near term, and we expect data on the complete study in the first quarter of 2024. Now, the CMP104 for the potential treatment of primary biliary cholangitis. The proof of concept study is ongoing, and given the strong science underlying this therapy, we plan to assess T cell response in patients dose with CMP104 in the second half of 2023. This will inform the timing of the top line data and potential option exercise. We expect to provide an update on the program at that time. We're excited about CMP104 because it is truly precision medicine and it introduces a potentially new game-changing asset for PBC patients. as there are no therapies on the market today that address the root cause of the autoimmune destruction of bile ducts in PBC. Moving to IW3300, a wholly owned ironwood asset for the potential treatment of interstitial cystitis and bladder pain syndrome. There is a significant unmet need in this area, as this chronic condition affects millions of America. Yet, there are very few treatment options currently on the market or in development. We are currently executing a proof of concept phase two study, which is progressing as planned. We're excited about this program as it is the first time the crosstalk hypothesis will be tested in humans. We are proud to be on the forefront of the clinical development in this area. Before I turn the call over to Shravan, I want to acknowledge all the Ironwood employees, including our newest colleagues who have joined us for Vector Bio who have continued the momentum and strong execution against their strategic priorities as we pursue our mission to help make a remarkable impact in patients' lives. Trevin, over to you.