Ironwood Pharmaceuticals, Inc. · NASDAQ:IRWD
Ironwood Pharmaceuticals — Proxy Contest (May 2018)
48 slides from Ironwood Pharmaceuticals's proxy contest presentation, May 9, 2018
Slide 1: Forward Looking Statements
Forward Looking Statements 2 This presentation contains forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about the benefits of a potential separation, including with respect to Ironwood’s and R&D Co.’s competiti
Slide 2: Additional Information
Additional Information On May 2, 2018, Ironwood filed a definitive proxy statement and WHITE proxy card with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the company’s 2018 Annual Meeting of Shareholders. SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ SUCH DEFINITIVE PROX
Slide 3: Table of Contents
Table of Contents Taking Action Designed to Unlock Shareholder Value An Overview of New Ironwood An Overview of R&D Co. The Right Board with the Right Experience to Oversee Ironwood Sarissa Has Not Made a Compelling Case to Add Alex Denner to the Board 4 VOTE the WHITE Proxy Card FOR Ironwood’s Expe
Slide 4: Taking Action Designed to Unlock Shareholder Value
Taking Action Designed to Unlock Shareholder Value 5 1
Slide 5: Ironwood Today
Ironwood Today 6 1) Abdominal symptom claims 2) The >25% Ironwood revenue CAGR calculation excludes any current or future revenue recognized in the period related to milestone payments to Ironwood, including approximately $39 million recognized in 2016 3) Independent of any new potential partnership
Slide 6: Plan to Unlock Shareholder Value through Separation of sGC Business
Plan to Unlock Shareholder Value through Separation of sGC Business from Commercial + GI Business LINZESS / CONSTELLA Approved for treatment of adults with IBS-C and/or CIC DUZALLO / ZURAMPIC Approved for treatment of hyperuricemia in gout in adult patients IW-3718 Persistent GERD (Phase III expecte
Slide 7: Overview of Strategic Rationale
Overview of Strategic Rationale We believe the planned separation will create, among other things: Two nimbler, more productive businesses with strengthened competitive positions Separate and distinct management teams focused on each business’s unique strategic priorities, target markets, and corpor
Slide 8: Overview of Proposed Transaction
Overview of Proposed Transaction 9 Transaction Structure Expected to be tax-free to Ironwood shareholders Timing Move decisively to separate; transaction is expected to be completed in 1H 2019 Subject to market, regulatory and other conditions Near-term Financial Implications Expect to incur transac
Slide 9: An Overview of New Ironwood
An Overview of New Ironwood 10 2 Commercial Programs & Late-stage GI Development Platform
Slide 10: Plan to Unlock Shareholder Value through Separation of sGC Business
Plan to Unlock Shareholder Value through Separation of sGC Business from Commercial + GI Business LINZESS / CONSTELLA Approved for treatment of adults with IBS-C and/or CIC DUZALLO / ZURAMPIC Approved for treatment of hyperuricemia in gout in adult patients IW-3718 Persistent GERD (Phase III expecte
Slide 11: Building a Next-Gen Commercial Biotech Company
Building a Next-Gen Commercial Biotech Company 12 To do this, we expect to: Maximize long-term per-share cash flows for SHAREHOLDERS Bring important medicines to millions of PATIENTS Continue highly effective linaclotide collaborations VALUE Employ more innovative consumer-led marketing techniques U
Slide 12: IW-3718 and Linaclotide Lifecycle Provide Opportunities for Future Growth
IW-3718 and Linaclotide Lifecycle Provide Opportunities for Future Growth* Status of selected key development programs as of May 9, 2018 Phase I Phase II Phase III Approved IBS-C or CIC in adults Launched 12/12 LINZESS® (linaclotide) linaclotide DUZALLO® (lesinurad + allopurinol) ZURAMPIC® (lesinura
Slide 13: Expect Strong LINZESS Growth Trajectory into early 2030s
Expect Strong LINZESS Growth Trajectory into early 2030s 14 TRx Volume2 1) Lieberman GI Patient Landscape survey, 2010 2) IQVIA Weekly NPA (12/29/17) Market-leader: maintain & strengthen position as branded prescription market leader Millions of patients still suffering: >2M patients treated; ~40M U
Slide 14: Rapid LINZESS growth and expanding operating leverage
Rapid LINZESS growth and expanding operating leverage propelling Ironwood revenue growth 15 Catalyzed by successful 50-50 U.S. collaboration with Allergan 74% 2013-2016 NET SALES CAGR LINZESS U.S. Net Sales + Commercial Costs1 >30% CAGR 1) LINZESS U.S. net sales are reported by Allergan and LINZESS
Slide 15: Fueling LINZESS Growth
Additional focus on digital outreach Fueling LINZESS Growth 16 Direct-to-consumer education to motivate patients and HCPs Increased use of 90-day Rx to improve adherence to therapy Maintaining strong payer coverage to drive affordable patient access High-impact sales effort & dosing flexibility to e
Slide 16: Lifecycle Management Provides Additional Opportunities for Increased Value
Lifecycle Management Provides Additional Opportunities for Increased Value 17 LINZESS: potential for additional abdominal symptom claims (ASC) to fuel growth >65% of IBS-C patients surveyed report suffering from ASCs such as bloating +/or discomfort 1x/week or more2 LINZESS ASC Phase III trial initi
Slide 17: DUZALLO: leveraging customer + market insights as payer coverage expands
DUZALLO: leveraging customer + market insights as payer coverage expands during launch year Nearly 2X patients reaching treatment goal2,3 2 mechanisms to treat disease Addresses monotherapy concern Simple: 2 products in 1 pill, once a day 1 copay for patients High performing test markets High volume
Slide 18: IW-3718 for Persistent GERD: ~10M Adult Patients Suffering in U.S.
IW-3718 for Persistent GERD (pGERD): ~10M Adult Patients Suffering in U.S. (60M+ worldwide)1,2 Patients suffer frequent + bothersome symptoms despite PPI therapy Of patients experience heartburn and regurgitation 6 days per week3 Years of suffering since diagnosis with GERD3 Have damage to the linin
Slide 19: IW-3718 Presents Opportunity to Establish New Treatment Paradigm for Persistent GERD
IW-3718 Presents Opportunity to Establish New Treatment Paradigm for Persistent GERD Offers complementary mechanism with PPI, designed to sequester bile acids in stomach over extended period of time IW-3718 + PPI 20 Diseased GI PPI Alone PPIs block gastric acid from refluxing into esophagus, but do
Slide 20: Positive Phase IIb Results Propelling IW-3718 towards Phase III
Positive Phase IIb Results Propelling IW-3718 1500mg towards Phase III Initiation (expected 3Q 2018) 21 ~53% Patients treated with IW-3718 (+ PPI) reported clinically meaningful reduction in heartburn severity IW-3718 + PPI effect more pronounced in patients with erosive esophagitis vs PPI + placebo
Slide 21: An Overview of R&D Co.
An Overview of R&D Co. 22 3 sGC Discovery and Development Platform Focused on Serious and Orphan Diseases
Slide 22: Plan to Unlock Shareholder Value through Separation of sGC Business
Plan to Unlock Shareholder Value through Separation of sGC Business from Commercial + GI Business LINZESS / CONSTELLA Approved for treatment of adults with IBS-C and/or CIC DUZALLO / ZURAMPIC Approved for treatment of hyperuricemia in gout in adult patients IW-3718 Persistent GERD (Phase III expecte
Slide 23: Separation of sGC business expected to provide development clarity
Separation of sGC business expected to provide development clarity and long-term value creation As an independent company, we believe R&D Co. will: Apply core competency in NO/sGC/cGMP pharmacology Rapidly advance pipeline of clinical-stage assets, including praliciguat and olinciguat Accelerate dru
Slide 24: Rich pipeline provides multiple late-stage opportunities and discovery engine
Rich pipeline provides multiple late-stage opportunities and discovery engine to support product expansion Status of selected key development programs as of May 9, 2018 Discovery Phase I Phase II Phase III Diabetic nephropathy Praliciguat (IW-1973) IW-6463 Severe CNS diseases Severe liver diseases L
Slide 25: Praliciguat Data Support Desirable Drug Profile
Praliciguat Data Support Desirable Drug Profile 26 Multidimensional Pharmacology Once a day dosing Broad tissue distribution Minimal renal clearance Encouraging safety + tolerability profile 3
Slide 26: Praliciguat Enhances NO-sGC-cGMP Signaling
27 HEALTHY FUNCTION ENDOTHELIAL DYSFUNCTION/ REDUCED NO PRALICIGUAT ENHANCES NO-SGC-CGMP SIGNALING Amplification of NO Signaling Vasoconstriction Inflammation Fibrosis Normal Physiological Function praliciguat Praliciguat enhances NO-sGC-cGMP signaling 3
Slide 27: Praliciguat for HFpEF and Diabetic Nephropathy
Praliciguat for Heart Failure with Preserved Ejection Fraction (HFpEF) and for Diabetic Nephropathy HFpEF: up to 27M patients worldwide1 Highly prevalent form of heart failure; ~40-70% of all heart failure patients worldwide3 Highly symptomatic; associated with high rates of morbidity and mortality
Slide 28: Praliciguat: CAPACITY-HFpEF Phase II Trial
Praliciguat: Increasing Blood Flow + Reducing Inflammation, Fibrosis and Vascular Stiffness May Improve HFpEF Symptoms 29 CAPACITY-HFpEF Phase II trial ongoing Patients: Adult patients with HFpEF (EF 45%) Male and female, age 50 years ~332 HFpEF patients, 4-arms (~83/arm) endpoints: Change in peak V
Slide 29: Praliciguat: Diabetic Nephropathy Phase II Trial
Praliciguat: Increasing Blood Flow + Reducing Inflammation and Fibrosis May Protect Renal Function 30 Diabetic nephropathy Phase II trial ongoing Patients: Adult patients with type 2 diabetes mellitus and DN Male and female, age 25 – 75 years Stable regimen of ACE or ARB ~150 patients, 3-arms (~50/a
Slide 30: In Phase IIa Trial, Praliciguat Demonstrated Positive Effects Across Key Biomarkers
In Phase IIa Trial, praliciguat Demonstrated Positive Effects Across Key Biomarkers in Cardiovascular and Renal Disease... 31 Mean (SD) baseline fasting glucose: ~150 mg/dL fasting glucose at day 15 *All patients on at least one glucose lowering Rx 24h ABPM MAP at day 14 Mean baseline MAP: ~92 mm Hg
Slide 31: Reinforcing Potential Treatment Effect of Praliciguat
Reinforcing Potential Treatment Effect of Praliciguat in Diseases such as HFpEF and Diabetic Nephropathy 32 Decrease in Cholesterol Decrease in Triglycerides Mean (SD) baseline serum triglycerides: ~154 mg/dL serum cholesterol at day 15 serum triglycerides at day 15 15.4% 3 14.4% Placebo IW-1973 -40
Slide 32: Olinciguat Data Support Desirable Drug Profile
Olinciguat Data Support Desirable Drug Profile 33 Multidimensional Pharmacology Once a day dosing Minimal renal clearance Encouraging safety + tolerability profile 3 Highly Potent
Slide 33: Olinciguat: Potential to Treat Sickle Cell Disease Pathophysiology
Olinciguat: Potential to Treat Multiple Aspects of Sickle Cell Disease Pathophysiology 34 Sickle cell disease Phase II ongoing Patients: Ambulatory patients with SCD Male and female, age 16 – 70 years Stable treatment regimen Patient has had between 1 – 10 protocol-defined related pain crises in las
Slide 34: Summary
Summary Ironwood intends to separate into two leading, independent biotech companies with compelling value propositions and risk profiles Separation is expected to: Unlock investor value via more tailored allocation of capital resources, separate and distinct management teams, and focus on unique st
Slide 35: The Right Board with the Right Experience to Oversee Ironwood
The Right Board with the Right Experience to Oversee Ironwood 36 4
Slide 36: Proactive, Regularly Refreshed and Accountable Board
Proactive, Regularly Refreshed and Accountable Board Focused on Enhancing Shareholder Value 37 Board oversees and is accountable for corporate strategy and capital allocation, including a full annual strategic review Board regularly explores opportunities to enhance value and is receptive and respon
Slide 37: Ironwood's Board has the Right Mix of Skills and Expertise
Ironwood’s Board has the Right Mix of Skills and Expertise Broader Business Healthcare Industry Ironwood Board Capital Allocation / Finance / Accounting Strategic Transactions Risk Management Human Capital Public Company Board Senior Leadership (small biotech) Senior Leadership (large pharma) Custom
Slide 38: Our Board Nominees are Critical to Ironwood's Success
Our Board Nominees are Critical to Ironwood’s Success LAWRENCE OLANOFF, M.D., PH.D. AMY SCHULMAN DOUGLAS WILLIAMS, PH.D. Independent; Director since 2017 Independent; Director since 2015 Independent; Director since 2014 Professional Highlights & Other Directorships Played instrumental role in Pfizer
Slide 39: Andrew Dreyfus, Marsha Fanucci, Peter Hecht
ANDREW DREYFUS MARSHA FANUCCI PETER HECHT, PH.D. 40 Independent; Director since 2009 Director & CEO since Founding in 1998 Brings valuable industry insight and essential financial expertise. Brings valuable experience as a founder of the company and through his tenure as CEO. Independent; Director s
Slide 40: Terrance McGuire, Julie McHugh, Edward Owens
TERRANCE MCGUIRE JULIE MCHUGH EDWARD OWENS Professional Highlights 38 year history of researching and investing in the life science and chemical industries During 28 year tenure as fund manager, Vanguard Health Care Fund was best performing of all U.S. mutual funds 41 Independent; Director since 201
Slide 41: A Shareholder-Focused Executive Compensation Philosophy
42 A Shareholder-Focused Executive Compensation Philosophy Align employee-owners with interests of fellow shareholders Organization-wide compensation and incentive programs align employee actions with shareholder interests, support our business objectives and hold employees accountable for the achie
Slide 42: Aligning Pay with Performance
43 Aligning Pay with Performance CEO SALARY UNCHANGED at $100,000 for 20 Years 2017 Named Executive Officer (NEO) Annual Incentive Awards Are Aligned with Performance Equity Represents a Significant % of 2017 Direct Compensation *Excludes: (i) Peter Hecht, who was offered, but did not accept, an ann
Slide 43: Commitment to Executive Compensation Best Practices
44 Commitment to Executive Compensation Best Practices Strong Shareholder Endorsement Effective Risk Mitigation and Creation of Shareholder Value Through Application of Best Practices Compensation tied to clear, high-value goals and shareholder value creation No option repricing without shareholder
Slide 44: Sarissa Has Not Made a Compelling Case to Add Alex Denner to the Board
Sarissa Has Not Made a Compelling Case to Add Alex Denner to the Board 45 5
Slide 45: Ironwood Has Constructively Engaged with Sarissa
Ironwood Has Constructively Engaged with Sarissa 46 February 14, 2018 Sarissa files Schedule 13F with the SEC disclosing beneficial ownership of 1,650,000 shares. February 20, 2018 Ironwood reaches out to Sarissa to initiate dialogue. March 27, 2018 Members of Ironwood management have initial meetin
Slide 46: Thorough Board Evaluation Process
Thorough Board Evaluation Process The Board evaluates nominees based on a number of core criteria, including: An owner-oriented attitude and a commitment to represent the interests of our shareholders, Strong personal and professional ethics, integrity and values, Strong business acumen and savvy, D
Slide 47: Conclusion
Conclusion Ironwood’s Board and management team are proactively taking action designed to unlock value through the planned separation of two businesses Ironwood has an engaged, refreshed and accountable Board aligned with shareholder interests Ironwood is open to new ideas, has engaged constructivel
Slide 48: Conclusion
e Conclusion Y Ironwood’s Board and management team —__ Sarissa has not made a compelling case are proactively taking action designed to for joining the Board unlock value through the planned x Alex Denner does not add any expertise separation of two businesses not already represented on the Board ¥