IRWD 10-K & 10-Q changes, risk factors and insider trading

Our revenues from the commercialization of LINZESS are subject to these and other factors, and therefore hasour revenues have been and may be unpredictable from quarter-to-quarter and year-to-year.

Our and our partner’s ability to commercialize our products successfully depends in part on the coverage and reimbursement levels set by governmental authorities, private health insurers and other third-party payors. In determining whether to approve reimbursement for our products and at what level, we expect that third-party payors will consider factors that include the efficacy, cost effectiveness and safety of our products, as well as the availability of other treatments, including generic prescription drugs and OTC alternatives. Further, in order to obtain and maintain acceptable reimbursement levels and access for patients at copay levels that are reasonable and customary, we have offered, and expect to continue to face increasing pressure to offer, discounts or rebates from list prices or discounts to third-party payors or other unfavorable pricing modifications. As an example, effective January 1, 2026, the LINZESS list price has been lowered in response to evolving health care dynamics and to support ongoing patient access. Due to the decrease in the list price of LINZESS, the inflationary component of statutory required rebates across channels, including Medicaid, has been eliminated. Obtaining and maintaining favorable reimbursement can be a time consuming and expensive process, and there is no guarantee that we or AbbVie, with respect to LINZESS in the U.S., will be able to negotiate or continue to negotiate pricing terms with third-party payors at levels that are profitable to us, or at all. Certain third-party payors also require prior authorization for, or have refused to provide, reimbursement for our products, and others may do so in the future. Our business would be materially adversely affected if we and our partners are not able to receive approval for reimbursement of our products from third-party payors on a broad, timely or satisfactory basis; or if reimbursement is subject to overly broad or restrictive prior authorization requirements; or if reimbursement is not maintained at satisfactory levels or becomes subject to prior authorization. In addition, our business could be adversely affected if government healthcare programs, private health insurers, including managed care organizations, or other reimbursing bodies or payors limit or reduce the indications for or conditions under which our products may be reimbursed. Moreover, as discussed further below and above in Part I, Item 1,under1, under the heading Pricing and Reimbursement, changes in insurance coverage or reimbursement levels by governmental authorities, private health insurers and other third-party payors, or in the type of such coverage held by patients may materially harm our business and commercialization efforts.

We have experienced and may experience additional pricing pressures in connection with the sale of our current and future products due to the healthcare reforms discussed below and above in Part I, Item 1,under1, under the heading Pricing and Reimbursement, as well as the trend toward initiatives aimed at reducing healthcare costs, the increasing influence of managed care, the scrutiny of pharmaceutical pricing, the ongoing debates on reducing government spending and additional legislative proposals. There has been significant scrutiny of pharmaceutical pricing and the resulting costs of pharmaceutical products that could cause significant operational and reimbursement changes for the pharmaceutical industry. There have been a number of federal and state efforts to address drug costs, which generally have focused on increasing transparency around drug costs or limiting drug prices, price increases or other related costs. Certain of these efforts have resulted in legislative and regulatory reforms.reforms, which could have a negative impact on our revenues.

Beyond the ACA, there have been ongoing legislative and administrative and other health care reform efforts, which couldhave havehad an adverse effect on our products’ or product candidates’ commercial success. Some healthcare reform efforts affect pricing or payment for drug products or the healthcare industry more generally. Drug pricing and payment reform was a focus of the former Biden Administration and ishas likely to continuecontinued to be a focus of the current Trump Administration. For example, federal legislation enacted in 2021 eliminated the statutory cap on Medicaid drug rebate program effective January 1, 2024.

Most significantly, in August 2022, President Biden signed the IRA into law. This statute marks the most significant action by Congress with respect to the pharmaceutical industry since the adoption of the ACA in 2010. The IRA contains various drug pricing and payment provisions. Among other provisions, the IRA imposes a yearly cap ($2,000$2,100 in 20252026) on out-of-pocket prescription drug prices in Medicare Part D. Additionally, the IRA, through a newly establishedthe Manufacturer Discount Program, eliminated, effective January 1, 2025, the size of the discount on brand-name drugs that pharmaceutical manufacturers are required to offer Medicare beneficiaries who are in the Medicare Part D coverage gap, or “donut hole,” by significantly lowering the beneficiary maximum out-of-pocket cost and requiring pharmaceutical manufacturers to provide a 10% discount in the initial coverage phase of the plan and 20% discount in the catastrophic coverage phase of the plan on brand-name drugs.

In addition, the IRA requires Medicare to negotiate prices for certain high-cost drugs and biologicals,biologics, including both physician-administered products covered under Medicare Part B benefit and self-administered drugs covered under the Medicare Part D benefit. CMS annually selects a specified number of negotiation-eligible drugs from those drugs with the highest total Medicare Part B or D expenditures over a preceding 12-month period. Eligible drugs generally include single-source brand-name drugs or biological products that have been on the market without therapeutically-equivalent generic or biosimilar alternatives for a specified number of years with certain exceptionsexceptions. (e.g.,Drugs orphanand drugsbiologics indicatedthat have been approved for onlya onesingle rare disease or condition andwere originally categorically excluded from price negotiation. With passage of the One Big Beautiful Bill Act in July 2025, Congress extended this exemption to drugs and biologics with lessmultiple thanorphan $200drug million in annual Medicare expenditures).designations. CMS will publish the negotiated price, known as the MFPMFP, for each of the selected products. Manufacturers of selected drugs would beare required to offer the drug for Medicare recipients at the MFP. Manufacturers who fail to negotiate or offer the MFP can face significant civil money penalties or excise tax liability on sales of that drug.

In 2024, HHS published the results of the first Medicare drug price negotiations for ten10 selected drugs that treat a range of conditions, including diabetes, chronic kidney disease, and rheumatoid arthritis, and the prices of the selected drugs will becomebecame effective on January 1, 2026. On January 17, 2025, HHS announced the selection of 15 additional drugs, which included LINZESS, covered by Medicare Part D, for the second cycle of price negotiations.negotiations, and on November 25, 2025, released the MFP for a 30-day equivalent supply of LINZESS. The negotiatedMFP for a 30-day equivalent supply of LINZESS, which will become the new Medicare net price foras LINZESS will be effective startingof January 1, 2027. Depending on the share of Medicare spending each year that2027, is attributedset to LINZESS or any other product candidate that we develop and whether or not those drugs become eligible for Medicare negotiation, those drugs and our revenue may be adversely impacted by this provision.$136.

It is unclear how the IRA will be implemented. While there had been some questions about the Trump Administration’s position on this program, CMS issued a public statement on January 29, 2025, declaring that lowering the cost of prescription drugs is a top priority of the new administration and CMS is committed to considering opportunities to bring greater transparency in the negotiation program. On June 6, 2023, Merck & Co. filed a lawsuit against the HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution. Subsequently, a number of other parties, including the U.S. Chamber of Commerce, also filed lawsuits in various courts with similar constitutional claims against the HHS and CMS. HHS has generally won the substantive disputes in these cases, and various federal district court judges have expressed skepticism regarding the merits of the legal arguments being pursued by the pharmaceutical industry. CertainMost of these cases are now on appeal and the Court of Appeals for the Third Circuit heard oral argument in threecertain of these cases. In May 2025, the Court of Appeals for the Third Circuit rejected a challenge to the Medicare price negotiation program, finding that the program did not violate that company’s due process rights under the Constitution since there is no protected property interest in selling goods to Medicare beneficiaries at a price higher than what the government is willing to pay in reimbursement. We expect that litigation involving these and other provisions of the IRA will continue, with unpredictable and uncertain results.

Healthcare reform efforts have been and may continue to be subject to scrutiny and legal challenge. For example, with respect to the ACA, tax reform legislation was enacted that eliminated the tax penalty established for individuals who do not maintain mandated health insurance coverage beginning in 2019 and, in 2021, the U.S. Supreme Court dismissed the latest judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. As another example, revisions to regulations under the federal anti-kickback statute would remove protection for traditional Medicare Part D discounts offered by pharmaceutical manufacturers to pharmacy benefit managers and health plans. The revisions were challenged in court and, pursuant to court order, the removal was delayed, and recent legislation imposed a moratorium on implementation of the rule until January 2032. CertainAdoption pharmaceuticalof manufacturersnew andhealthcare organizationsreform havelegislation filed lawsuits challengingat the IRAfederal drugor pricestate negotiationlevel program.could negatively affect demand for, or pricing of, our products or product candidates if approved for sale.

We are working closely with AbbVie to execute our joint commercialization plan for LINZESS. The commercialization plan includes an agreed upon marketing campaign that targets the physicians and healthcare providers who see patients who could benefit from LINZESS treatment. LINZESS’s consumer marketing campaign targets theappropriate adult menadults and womenpediatric patients who suffer from IBS-CIBS-C, CIC or CIC.FC per approved indications.

In order to optimize the commercial potential of LINZESS, we and AbbVie must execute upon this commercialization plan effectively and efficiently. In addition, we and AbbVie must continually assess, modify and adapt our commercialization plan in a coordinated and integrated fashion, including evaluating and adjusting as necessary the level and mix of marketing and promotion efforts, in response to changing business, market or other factors in order to advance the commercial potential of LINZESS. Further, we and AbbVie must continue to focus the sales and marketing efforts for the brand on educating customers about the relevant data and information for LINZESS in treating adults and pediatric patients aged 7 years and older with IBS-C and adult patients with CIC, and taking a measured approach to educating and raising awareness on the FC indicationand IBS-C indications for pediatric patients ages 6-17 years-old.patients. We and AbbVie must ensure a highly targeted and efficient promotional mix combined to continue effectively promoting LINZESS to key healthcare professionals. If we and AbbVie fail to evolve with the changing commercial landscape successfully and perform these commercial functions in the highest quality manner and in accordance with our joint commercialization plan and related agreements, LINZESS will not achieve its maximum commercial potential and we may suffer financial harm. Our commercial efforts to further target and engage adult and pediatric patients within IBS-Cthe orapproved CICindications may not effectively increase appropriate patient awareness or patient/physician dialogue and may not increase the revenues that we generate from LINZESS.

ApraglutideApraglutide, a next generation, long-acting GLP-2 analog in development for SBS patients who are dependent on PS, will require extensive clinical development, management of nonclinical, clinical and manufacturing activities, regulatory approval and adequate manufacturing supply, and if approved, fully integrating apraglutide into our commercial infrastructure to support the appropriate sales, marketing, and market access efforts to generate sales in pursuit of revenue. In February 2024, we announced positive topline results from our pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing PS dependency in adult patients with SBS-IF. We are also conducting an open-label extension study, STARS Extend, to further assess safety of apraglutide in adult patients with SBS-IF. Based on these results, we have initiated a rolling NDA submission to the U.S. FDA for apraglutide for the treatment of adult patients with SBS who are dependent on PS. We are not permitted to market or promote this product candidateapraglutide before we receive regulatory approval from the U.S. FDA, the EMA, or comparable foreign regulatory authorities in the applicable jurisdiction, and we may never receive any such regulatory approval for apraglutide. To obtain regulatory approvals for apraglutide, we must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the U.S. FDA, EMA or comparable foreign regulatory authorities, that such product candidate is safe and effective for its intended uses. We may be required by the U.S. FDA, EMA or comparable foreign regulatory authorities to perform additional or unanticipated clinical trials to obtain regulatory approval. In April 2025, we announced that in preparation for the eventNDA submission to the U.S. FDA werefor toapraglutide, determinepharmacokinetic analysis indicated that the dataexposure fromand ourdose pivotaldelivered in the STARS Phase III clinical trial were lower than planned due to dose preparation and administration. Based on discussions with the U.S. FDA, it became clear that a confirmatory Phase III clinical trial is needed to seek approval of an NDA for apraglutide for patients with SBS-IF who are dependent on PS. In the fourth quarter of 2025, we met with the U.S. FDA and aligned on key design elements of a confirmatory Phase III clinical trial, STARS,STARS-2, combinedof withapraglutide. Site initiations are expected to begin in the datasecond from our open-label extension study, STARS Extend, is insufficient for acceptancequarter of our2026. NDA,If we are unable to successfully initiate or complete the confirmatory Phase III clinical trial, if the results of this trial are not positive or are only modestly positive, if there are safety concerns or if we needdetermine tothat conductthe anyobserved othersafety U.S.or FDA-requiredefficacy studies,profile approvalwould ofnot ourbe anycompetitive NDAin the marketplace, we may be delayed in obtaining regulatory approval for apraglutide or we may requirenot usobtain toregulatory expendapproval moreat resources than we have available.all. It is also possible that additionalthe studies,confirmatory ifPhase performedIII andclinical completed,trial may not be considered sufficient by the U.S. FDA to approve our NDA.NDA, which could further delay a regulatory approval or may require us to expend more resources than we have available. Any delay in obtaining, or an inability to obtain, any marketing approvals would prevent us from commercializing our product candidates, including apraglutide, generating revenues on such product candidates and achieving and sustaining profitability. If any of these outcomes occur, we may be forced to abandon our development efforts for our product candidates,apraglutide, which could significantly and materially harm our business. Even if we do receive such regulatory approval, we may be unable to successfully commercialize apraglutide within any approved indications or develop apraglutide for the treatment of additional indications, which would materially adversely impact our business and prospects.

The time required to complete drug development and to obtain regulatory approval from the U.S. FDA, EMA and other comparable foreign regulatory authorities is unpredictable, typically takes many years following the commencement of clinical trials and depends upon numerous factors. In addition, regulatory approval policies, regulations, or the type and amount of clinical data necessary to gain regulatory approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions, which may cause delays in the regulatory approval of or may result in the decision not to approve apraglutide or other product candidates. Regulatory approval is never guaranteed. Data obtained from nonclinical studies and clinical trials are susceptible to varying interpretations, and regulatory authorities may not interpret our data as favorably as we do, which may further delay, limit or prevent development efforts, clinical trials, or regulatory approval. Even if we believe the nonclinical or clinical data for our product candidates are sufficient to support approval, such data may not be considered sufficient to support approval by the U.S. FDA, EMA and other comparable foreign regulatory authorities. AsIn anFebruary example,2024, we announced positive topline results from our pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in Decemberreducing 2024,PS dependency in adult patients with SBS-IF. However, in April 2025, we announced that, based on discussions with the U.S. FDAFDA, issueda Zealand,confirmatory whichPhase III clinical trial is developingneeded glepaglutide,to aseek long-actingapproval GLP-2of analog,an NDA for the potential treatment of SBSapraglutide for patients with SBS-IF who are dependent on PS,PS. In the fourth quarter of 2025, we met with the U.S. FDA and aligned on key design elements of a Complete Response Letter concluding that glepaglutide did not meet the full requirements for substantial evidence to establish efficacy and safety and recommended conducting an additional clinical trial to provide further data. Consequently, Zealand now is expecting to initiate an additionalconfirmatory Phase III clinical trialtrial, inSTARS-2, 2025.of apraglutide. Of the large number of drugs in development, only a small percentage successfully complete the U.S. FDA, EMA or comparable foreign regulatory approval processes and are commercialized. Accordingly, it is possible that we will never obtain regulatory approval, or that regulatory approval may be substantially delayed, for apraglutide or our other product candidates.apraglutide.

As part of our growth strategy, weWe intend to explore further linaclotide development opportunities as well as to advance the development of our other pipeline programs, such as apraglutide, through internal or external opportunities.

We and AbbVie are exploring development opportunities to enhance the clinical profile of LINZESS by studying linaclotide in new or existing indications, populations and formulations to assess its potential to treat various conditions. For example, we and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S. FDA to understand the safety and efficacy of LINZESS in pediatric patients. In June 2023, the U.S. FDA approved LINZESS, and in September 2024, Health Canada approved CONSTELLA, as once-daily treatments for pediatric patients ages 6-17 years-old with FC, in the U.S. and Canada, respectively. In November 2025, the U.S. FDA approved LINZESS for the treatment of IBS-C in patients aged 7 years of age and older. Additional clinical pediatric programs in IBS-C and FC are ongoing. These development efforts may fail or may not increase the revenues that we generate from LINZESS. Furthermore, they may result in adverse events, or perceived adverse events, in certain patient populations that are then attributed to the currently approved patient population, which may result in adverse regulatory action at the U.S. FDA or in other countries or harm linaclotide’s reputation in the marketplace, each of which could materially harm our revenues from linaclotide.

We have ongoing or planned nonclinical studies and clinical trials for linaclotide and apraglutide. Many companies in the pharmaceutical industry have suffered significant setbacks in clinical trials even after achieving promising results in earlier nonclinical studies or clinical trials. Findings from ongoing or completed nonclinical studies may not be replicated in later clinical trials or further data analyses, and findings from early-stage clinical trials may not be predictive of the results we may obtain in later-stage clinical trials or of the likelihood of regulatory approval. A failure of one or more clinical trials can occur at any stage of testing, which may result from a multitude of factors, including, among other things, flaws in study design or implementation, dose selection issues, placebo effects, patient enrollment criteria and failure to demonstrate favorable safety or efficacy traits. ResultsFor fromexample, in April 2025, we announced that in preparation for the NDA submission to the U.S. FDA for apraglutide, pharmacokinetic analysis indicated that the exposure and dose delivered in the STARS Phase III clinical trialstrial were lower than planned due to dose preparation and findingsadministration. fromBased nonclinicalon studies could lead to abrupt changes in development activities, including the possible limitation or cessation of development activities associateddiscussions with a particular product candidate or program. We cannot be certain that linaclotide or apraglutide will be successful in ongoing, planned or future clinical trials. Furthermore, our analysis of data obtained from nonclinical and clinical activities is subject to confirmation and interpretation by the U.S. FDA, EMAit andbecame otherclear applicablethat regulatorya authorities,confirmatory whichPhase could delay, limit or prevent regulatory approval. The U.S. FDA, EMA or other regulatory authorities may also require additionalIII clinical trials,trial whichis mayneeded beto costlyseek or delay, limit, prevent or otherwise impact regulatory submission or approval. Satisfactionapproval of U.S.an FDA,NDA EMA or other applicable regulatory requirements is costly, time-consuming, uncertain and subject to unanticipated delays. We cannot give any assurance thatfor apraglutide or our other product candidates will receive regulatory approval. Even if we do receive such regulatory approval, we may be unable to successfully commercialize apraglutide or any other product candidate in any approved indications or develop such product candidates for thepatients treatmentwith ofSBS-IF additionalwho indications,are whichdependent wouldon materially adversely impact our business and prospects.PS.

Delays in the completion of clinical testing of any of our products or product candidates could result in increased costs and could delay or limit our ability to generate revenues.

Delays in the completion of clinical testing could significantly affect our product development costs and timing of data readouts and regulatory submissions and potential approvals. We do not know whether planned clinical trialstrials, including the confirmatory Phase III clinical trial for apraglutide, will be completed on schedule, if at all. The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to:

The pricing of apraglutide and our other product candidates, if and when approved for marketing, will depend, in part, on the pricing and reimbursement strategies adopted by our competitors. For example, with respect to apraglutide, a marketed GLP-2 product already exists in the U.S., E.U. and other international markets, which may or may not be genericized within the coming years. Additionally, it is possible that anotherother investigational GLP-2 products may be approved and launched in advance of the potential approval of apraglutide in the U.S., EMA and Japan. Order of market entry and reimbursement decisions could place apraglutide at a competitive disadvantage, possibly deny market exclusivity rights, and/or elevate the need for significant clinical differentiation to support certain pricing decisions. If these or other factors impact the price we can charge for apraglutide, we may reduce our revenue and results of operations could be affected. Similar competitive factors could apply to pricing and reimbursement decisions for our other product candidates, if approved, in the future.

The pharmaceutical industry and the markets in which we operate are intensely competitive. We compete in the marketing and sale of our products, the development of new products or product candidates and the acquisition of rights to new products with commercial potential. Certain of our competitors have substantially greater financial, technical and human resources than us. Mergers and acquisitions in the pharmaceutical industry may result in even more resources being concentrated in our competitors and enable them to compete more effectively. Competition may also increase further as a result of advances made in the commercial applicability of technologies and greater availability of capital for investment in these fields. Additionally, new developments, including the development of other drug technologies and methods of preventing the incidence of disease, occur in the pharmaceutical and medical technology industries at a rapid pace. These developments may render our products obsolete or noncompetitive.non-competitive.

Linaclotide competes with certain prescription therapies and OTC products, some of which have attained significant levels of market acceptance. The availability of prescription competitors and OTC products could limit the demand, and the price we are able to charge, for LINZESS unless we are able to maintain market acceptance among the medical community and patients and differentiate LINZESS on the basis of actual or perceived clinical benefits supported by broad payer access. For example, Takeda’s AMITIZA (lubiprostone) is approved by the U.S. FDA for sale in the U.S. for the treatment of IBS-C, CIC and opioid-induced constipation; Bausch’s TRULANCE (plecanatide) is approved by the U.S. FDA for sale in the U.S. for the treatment of adults with IBS-C and CIC; Takeda’s MOTEGRITY (prucalopride) is approved by the U.S. FDA for the treatment of CIC in adults and generic versions have been available in the U.S. since January 2025; Ardelyx’s IBSRELA™ (tenapanor) is approved by the U.S. FDA for the treatment for IBS-C in adults; and Vibrant Gastro Inc.’s Vibrant, a drug-free capsule, is approved by the U.S. FDA for the treatment of CIC in adults who have not experienced relief of their bowel symptoms by using laxative therapies at the recommended dosage for at least one month. OTC laxatives such as MiraLAX® and DULCOLAX®, and lactulose, a prescription laxative treatment, are also available for the treatment of constipation. Additionally, we believe other companies are developing products that could compete with linaclotide, should they be approved by the U.S. FDA or comparable foreign regulatory authorities and become commercially available. In addition, there are other compounds in late-stage development and other potential competitors that are in earlier stages of development that, if approved, may compete with linaclotide. If our current or potential competitors are successful in completing drug development for their drug candidates and obtain approval from the U.S. FDA or comparable foreign regulatory authorities, they could limit the demand for linaclotide. In addition to competition from such prescription and OTC products, we may also face competition from multiple low-cost generic versions of such products when available in the U.S. For example, an authorized generic version of AMITIZA was first launched in the U.S. in January of 2021 and multiple versions are now available. It is possible that additional generic versions may become available in the future.

In addition, any product candidates that we successfully develop and commercialize will compete with existing drugs and new drugs that may become available in the future. Apraglutide, if successfully developed and approved, will compete with companies that are commercializing or developing drugs for SBS, such as Takeda, which currently distributes the GLP-2 analog teduglutide, marketed as GATTEX® (teduglutide) in the U.S. and REVESTIVE® (teduglutide for injection) in Europe, and Zealand, which is developing glepaglutide, a long-acting GLP-2 analog, for the treatment of SBS for patients who are dependent on PS and is expecting to initiateinitiated an additional Phase III clinical trial in 2025.the first quarter of 2026. Hanmi Pharmaceutical is also developing a GLP-2 analog, to be administered once a month, and which is in a Phase II clinical trial. Products with other mechanisms of action may emerge as future competition.

Our products or product candidates may cause undesirable side effects or have other properties that could delay or prevent their development, create unpredictable clinical trial results, impact itstheir regulatory approval or limit their commercial potential.

Linaclotide has been prescribed to millions of patients since its launch in the U.S. and other territories beginning in December 2012. The number and type of patients treated with linaclotide could continue to grow if physicians prescribe linaclotide to more patients and as we and our partners conduct clinical trials, including in new indications, populations or formulations, as well as explore potential combination products, in existing and new territories. As the patient experience with linaclotide increases and expands, we and others may identify previously unknown side effects, known side effects may be found to be more frequent or severe than in the past, and others may detect unexpected safety signals for linaclotide or any products perceived to be similar to linaclotide. The most commonly reported adverse reaction since linaclotide became commercially available, as well as in the clinical trials for linaclotide in IBS-C and CIC, has been diarrhea. In the linaclotide Phase III IBS-C and CIC clinical trials in adults, severe diarrhea was reported in 2% or less of the linaclotide-treated patients and its incidence was similar between the IBS-C and CIC populations. In the linaclotide Phaseclinical III FC trialtrials in pediatric patients ages 6-17 years-old,years-old with FC and pediatric patients ages 7-17 years-old with IBS-C, severe diarrhea was reported in one linaclotide-treated patient.patient in each respective trial.

In addition, the U.S. FDA-approved labeling for LINZESS contains a boxed warning describing the risk of serious dehydration in pediatric patients less than two years of age and a contraindication against its use in these patients. These and other restrictions could limit the commercial potential of LINZESS. We and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S. FDA to understand the safety and efficacy of LINZESS in pediatric patients. In June 2023, the U.S. FDA approved LINZESS as a once-daily oral treatment for pediatric patients ages 6-17 years-old with FC, making LINZESS the first and only U.S. FDA-approved prescription therapy for FC in this patient population. TheIn safetyNovember and2025, effectivenessthe U.S. FDA approved LINZESS for the treatment of LINZESSIBS-C in patients withaged FC less than 67 years of age orand older. This new indication establishes LINZESS as the first and only prescription drug approved for the treatment of IBS-C in patients with IBS-C less than 187-17 years of age have not been established.old. Additional clinical pediatric programs in IBS-C and FC are ongoing. There can be no assurances, however, whether there may be any significant unknown side effects that could limit the commercial potential of LINZESS in thisthese pediatric population.populations.

Patients treated with apraglutide may experience well-known class-specific adverse events. The most frequentlyfrequent adverse events in our pivotal Phase III clinical trial, STARS, were nausea, vascular device infection, headache, abdominal pain, nasopharyngitis, nausea, headache, rash,fatigue, and fatigue.nasopharyngitis. There may be additional mechanistic side effects that are only observed in future clinical trials and/or through real-world experience with patients using our products.

In August 2012, the U.S. FDA approved LINZESS as a once-daily treatment for adult men and womenadults suffering from IBS-C or CIC. Although we and AbbVie completed additional nonclinical studies and clinical trials in adults and pediatric patients that were required by the U.S. FDA in connection with the approval of LINZESS, LINZESS remains subject to ongoing U.S. FDA requirements, including those governing the testing, manufacturing, labeling, packaging, storage, advertising, promotion, sale, distribution, recordkeeping and submission of safety and other post-market information. For example, the U.S. FDA has the authority to require post-marketing studies and clinical trials, labeling changes based on new safety information, and compliance with REMS approved by the U.S. FDA.

The U.S. FDA-approved labeling for LINZESS contains a boxed warning describing the risk of serious dehydration in pediatric patients less than two years of age and a contraindication against its use in these patients. We and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S. FDA to understand the safety and efficacy of LINZESS in pediatric patients. In June 2023, the U.S. FDA approved LINZESS as a once-daily treatment for pediatric patients ages 6-17 years-old with FC, making LINZESS the first and only U.S. FDA-approved prescription therapy for FC in this patient population. TheIn safetyOctober 2025, the U.S. FDA granted us a pediatric exclusivity for studies conducted on linaclotide, and effectivenessin November 2025, approved LINZESS for the treatment of LINZESSIBS-C in patients withaged FC less than 67 years of age orand older. This new indication establishes LINZESS as the first and only prescription drug approved for the treatment of IBS-C in patients with IBS-C less than 187 years of age have not been established. Additional clinical pediatric programs in IBS-C and FC are ongoing in support of post-approval requirements. Our ability to expand the indication or labeling information for LINZESS will depend on, among other things, our successful completion of pediatric clinical programs.older.

These post-approvalPost-approval requirements impose resource and cost burdens on us. Failure to effectively, appropriately and timely conduct and complete the required studies relating to our products, monitor and report adverse events and meet our other post-approval commitments would lead to negative regulatory action at the U.S. FDA, which could include restrictions on the sale of our products or withdrawal of regulatory approval of our products for their currently approved indications and patient populations.

We may be unable to successfully integrate the business and personnel of VectivBio, and may not realize the expected benefits and anticipated synergies of suchthe acquisition.VectivBio Acquisition.

The success of the VectivBio Acquisition will depend, in part, on our ability to realize all or some of the expected benefits from the acquisition and anticipated synergies from integrating its business with our existing business. The integration process may be complex, costly and time-consuming and we may not ultimately realize the return on our investment.acquisition. Risks we may face in connection with the VectivBio Acquisition include, among others:

If we experience difficulties with the integration process or if the business of VectivBio deteriorates, the anticipated benefits, cost savings, growth opportunities and other synergies of the VectivBio Acquisition may not be realized fully or at all, or may take longer to realize than expected. If any of the above risks occur, our business, financial condition, results of operations and cash flows may be materially and adversely impacted, we may fail to meet the expectations of investors or analysts, and our stock price may decline as a result.

We have no internal manufacturing or distribution capabilities. Instead, we rely on a combination of contract manufacturers and our partners to manufacture API, finished drug product and finished goods for linaclotide, apraglutide, and our other product candidates. For linaclotide, each of our partners is responsible for API, finished drug product and finished goods manufacturing (including bottling and packaging) for its respective territories and distributing the finished goods to wholesalers. We and/or our partners have commercial supply agreements with independent third parties to manufacture linaclotide API. For apraglutide, we design and develop the manufacturing process together with CDMOs ,CDMOs, and we rely on these CDMOs and other third-party suppliers for the manufacture and supply, including filling and packaging of all the components of the finished product for human use. Should we, or any of our partners or any third-party manufacturers we or our partners engage, experience setbacks or challenges in our manufacturing efforts, our development and commercialization efforts may be materially harmed.

The GDPR, United Kingdom’s GDPR and FADP also increase the scrutiny applied to transfers of personal data from the EEA, UK, and Switzerland, respectively (including from clinical trial sites in the EEA) to countries that are considered by the European Commission, United Kingdom or Switzerland, respectively, to lack an adequate level of data protection, such as the U.S. In July 20202023, the European Commission adopted an adequacy decision for the EU-U.S. Data Privacy Framework, which permits U.S. companies who self-certify under the framework to rely on it as a valid data transfer mechanism for data transfers from the E.U. to the U.S. There is currently one pending litigation against the EU-U.S. Data Privacy Framework before the Court of Justice of the E.U. (CJEU) invalidated the E.U.-U.S. Privacy Shield Framework, under which personal data could be transferred from the EEA to U.S. entities that had self-certified under the Privacy Shield scheme. The framework has been replaced by the E.U.-U.S. Data Privacy Framework for which the European Commission adopted an adequacy decision in July 2023. While we do not currently rely upon this framework,and we expect there to be additional legal challenges to this framework in the future,future. whichIf couldthese drawchallenges intoare questionsuccessful, they may not only impact the legitimacyEU-U.S. Data Privacy Framework, but also further limit the viability of otherthe cross-border transfer mechanism, including theso-called standard contractual clauses on which we rely to transfer personal data from the EEA to the U.S. and other jurisdictions.data transfer mechanisms. The uncertainty around this issue has the potential to impact our business. As supervisory authorities issue further guidance on personal data export mechanisms or where the standard contractual clauses cannot be used, we could incur additional compliance costs, complaints, and/or regulatory investigations and, if we are unable to otherwise transfer personal data among jurisdictions in which we operate, our services and geographical location or segregation of our relevant systems and operations could be affected.

In addition, in the U.S., we are subject to the CCPA, as amended by the CPRA, which became effective on January 1, 2023 (the CPRA, together with CCPA, the California Privacy Law). The California Privacy Law gives California consumers (defined to include all California residents) certain rights regarding personal information collected about them; the California Privacy Law also imposes certain obligations and limitations on companies regarding the collection, use, selling or sharing (as defined in the California Privacy Law) of personal information collected from or about California consumers. Other states have passed or may pass comprehensive privacy laws or laws specifically regulating health information that may affect our business. For example, Washington state recently passed the My Health My Data Act to which we are subject, which regulates the collection and sharing of health information, and provides a right of action for violation of the statute.

We have several issued patents in the U.S. related to LINZESS, including a LINZESS composition of matter and methods of use patent (U.S. Patent 7,304,036), expiringwhich in 2026.October 2025 received pediatric exclusivity, and consequently will now expire in 2027. Additional U.S. patents related to LINZESS include multiple patents relating to our commercial, room temperature stable formulations of the 72 mcg, 145 mcg and 290 mcg doses of linaclotide and methods of using these formulations, the latest of which expires in the early 2030s, as well as other patents and patent applications covering formulations of linaclotide, and molecules related to linaclotide.

In addition, we have exclusive rights to apraglutide including issued composition of matter and method of use patents in the U.S. in lead indications. We aim to maintain a strong and broad estate of patents in the U.S. and other geographic areas. To this end, we have exclusively licensed 5759 patents and 3 pending patent applications in the U.S., E.U., Japan, China and other jurisdictions protecting apraglutide. We also own onetwo U.S. granted patent andpatents, one granted European patent and two granted Japanese patentpatents as well as approximately 3840 pending patent applications worldwide that cover apraglutide, including ultrapure compositions, methods of manufacture and methods of use in various diseases.

Licensing of intellectual property is of critical importance to our business and involves complex legal, business, and scientific issues. Disputes may arise regarding intellectual property subject to a licensing agreement, including but not limited to:

We are currently a party to and may in the future be party to license agreements. Apraglutide is among the assets that are subject to licensing agreements with third parties. For example, we are a party to an amended and restated intellectual propertyexclusive license agreementagreement, withdated as of December 6, 2016, as amended, by and between GlyPharma Therapeutic Inc. (as predecessor to VectivBio AG) and Ferring, or the Ferring Agreement, pursuant to which we have exclusive rights to apraglutide including an issued composition of matter and method of use patent in the U.S. in lead indications, or the Ferring Agreement.indications. The Ferring Agreement imposes, and other current or future license agreements may impose, various diligence, milestone payment, royalty, and other obligations on us. These milestone, royalty, and other payments associated with the license, will make it less profitable for us to develop apraglutide or other product candidates that are the subject of current or future licenses. If we fail to comply with our obligations under the Ferring Agreement, or we are subject to a bankruptcy, we may be required to make certain payments to Ferring, we may lose the exclusivity of our license, or Ferring may have the right to terminate the license. If the Ferring Agreement is terminated, we could lose intellectual property rights that are important to our business, be liable for damages to the licensor or be prevented from developing and commercializing our apraglutide. Termination of the agreement or reduction or elimination of our rights under the agreement may also result in us being required to negotiate a new or reinstated agreement with less favorable terms, and it is possible that we may be unable to obtain any such additional license at a reasonable cost or on reasonable terms and will be unable to develop and commercialize apraglutide. These or similar risks may apply to other license agreements, including future license agreements. If disputes over intellectual property and other rights that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize apraglutide.

In recent years, we have focused primarily on developing, manufacturing and commercializing linaclotide, as well as developing our other product candidates. For example, in June 2023, we acquired VectivBio and added apraglutide, a next generation long-acting GLP-2 analog, in development for the treatment of patients with SBS who are dependent on PS,apraglutide to our pipeline. We have financed our business to date primarily through the issuance of equity, our collaboration and license arrangements, and debt issuances, including our $200.0 million aggregate principal amount of Convertible Senior Notes, bearing an interest of 1.50% and due in June 2026, or the Convertible Senior Notes, and our $550.0 million secured revolving credit facility, or the Revolving Credit Facility. We currently derive a significant portion of our revenue from our LINZESS collaboration with AbbVie for the U.S. We believe that the revenues from the LINZESS collaboration will continue to constitute a significant portion of our total revenue for the foreseeable future. Such revenue is highly dependent on LINZESS demand and other factors such as fluctuations in retail chains’ and wholesalers’ buying patterns and inventory levels, pricing and reimbursement. Our collaborative arrangements revenue outside of the U.S. has and may continue to fluctuate as a result of the timing and amount of royalties from sales of linaclotide in the markets in which it is currently approved, or any other markets where linaclotide receives approval, as well as clinical and commercial milestones received and recognized under our current and future strategic partnerships outside of the U.S.

For the year ended December 31, 2023, we incurred a net loss in connection with the VectivBio Acquisition. Prior to the year ended December 31, 2019, we incurred net losses in each year since our inception in 1998. As of December 31, 2024,2025, we had an accumulated deficit of approximately $1.7 billion. We cannot be certain that sales of our products, and the revenue from our other commercial activities, will not fall short of our projections or be delayed. Further, we expect to continue to incur substantial expenses in connection with our efforts to commercialize linaclotide and,and ifresearch, approved, apraglutide, researchdevelop, and developcommercialize our product candidates, including apraglutide, and access externally developed products or product candidates. Because of the numerous risks and uncertainties associated with developing and commercializing pharmaceutical products, as well as those related to our expectations for our products and our other activities, we are unable to predict the extent of any future losses. Failure to achieve sustainable net income and maintain positive cash flows would have an adverse effect on stockholders’ equity and working capital.

We are a biotechnology company developing and commercializing life-changing therapies for people living with gastrointestinal, or GI, and rare diseases. We are focused on the development and commercialization of innovative GI product opportunities in areas of significant unmet need, leveraging our demonstrated expertise and capabilities in GI and rare diseases.

LINZESS® (linaclotide), our commercial product, is the first product approved by the U.S. FDA, in a class of GI medicines called GC-C agonists and is indicated for adultthe mentreatment of irritable bowel syndrome with constipation, or IBS-C, in adults and womenpediatric sufferingpatients from7 IBS-Cyears of age and older, chronic idiopathic constipation, or CIC, in adults, and forfunctional constipation, or FC, in pediatric patients ages 6-17 years-old suffering from FC.years-old. LINZESS is also available tofor adultthe mentreatment andof womenadults suffering fromwith IBS-C or CIC in the U.S. and Mexico, adultadults men and women suffering fromwith IBS-C or chronic constipation in Japan, and adultadults men and women suffering fromwith IBS-C in China, and pediatric patients ages 6-17 with FC in the U.S.China. Linaclotide is available under the trademarked name CONSTELLA® tofor adultthe mentreatment andof womenadults suffering fromwith IBS-C or CIC and pediatric patients ages 6-17 years old with FC in Canada, and to adultadults men and women suffering fromwith IBS-C in certain European countries.

Through the VectivBio Acquisition, we are advancing apraglutide, a next-generation, synthetic long-acting peptide analog of GLP-2 for SBS patients who are dependent on PS. In February 2024, we announced positive topline results from our pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing parenteral support dependency in adult patients with SBS-IF. InWe Januaryare 2025,also weconducting initiatedan aopen-label rollingextension NDAstudy, submissionSTARS Extend, to further assess the U.S.safety FDA and plan to submit marketing applications to other regulatory authorities forof apraglutide for use in adult patients with SBSSBS-IF. In April 2025, we announced that, based on discussions with the U.S. FDA, a confirmatory Phase III clinical trial is needed to seek approval of a new drug application or NDA, for apraglutide for patients with SBS-IF who are dependent on PS. In the fourth quarter of 2025, we met with the U.S. FDA and aligned on key design elements of a confirmatory Phase III clinical trial, STARS-2, of apraglutide. Site initiations are expected to begin in the second quarter of 2026.

To date, we have dedicated a majority of our activities to the research, development and commercialization of linaclotide, as well as to theother research and development of our other product candidates,programs, including apraglutide. Prior to the year ended December 31, 2019, we incurred net losses in each year since inception. As of December 31, 2024,2025, we had an accumulated deficit of approximately $1.7 billion. We are unable to predict the extent of any future losses or guarantee that our company will be able to generate and maintain positive cash flows.

Research and Development Expense.Expenses. The core of our research and development strategy is to leverage our demonstrated expertise and capabilities in GI and rare diseases to bring multiple medicines to patients. Research and development expenseexpenses consistsconsist of expenses incurred in connection with the research into and development of products and product candidates. These expenses consist primarily of compensation, benefits and other employee-related expenses, research and development related facility costs, third-party contract costs relating to nonclinical study and clinical trial activities, development of manufacturing processes, regulatory registration of third-party manufacturing facilities, and licensing fees for our product candidates.

Linaclotide. Our commercial product, LINZESS, is commercially available in the U.S. for the treatment of IBS-C orin adults and pediatric patients 7 years of age and older, CIC in adults and for FC in pediatric patients ages 6-17 years-old. Linaclotide is also available to adult men and womenadults suffering from IBS-C or CIC in certain countries of the world, including China, Japan, and in a number of European countries.

In addition, we and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S. FDA to understand the safety and efficacy of LINZESS in pediatric patients. In August 2021, the U.S. FDA approved a revised label for LINZESS based on clinical safety data that had been generated thus far in pediatric studies. The updated label modified the boxed warning for risk of serious dehydration and contraindication against use in children to those less than two years of age. The boxed warning and contraindication previously applied to all children less than 18 years of age and less than 6 years of age, respectively. In June 2023, the U.S. FDA approved LINZESS as a once-daily treatment for pediatric patients ages 6-17 years-old with FC, making LINZESS the first and only U.S. FDA-approved prescription therapy for FC in this patient population. TheOn safetyOctober 15, 2025, the U.S. FDA granted us a pediatric exclusivity for studies conducted on linaclotide, and effectivenessin ofNovember 2025, approved LINZESS infor pediatric patients with FC less than 67 years of age orand in patientsolder with IBS-C less than 18 years of age have not been established.IBS-C. Additional clinical pediatric programs in IBS-C and FC are ongoing.

Apraglutide for SBS-IF. In February 2024, we announced positive topline results from our pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing PS dependency in adult patients with SBS-IF. SBS-IF, a rare and severe organ failure condition in which patients are dependent on PS, affects an estimated 18,000 adult patients in the U.S., Europe, and Japan. We are also conducting an open-label extension study, STARS Extend, to further assess the safety of apraglutide in adult patients with SBS-IF. In JanuaryApril 2025, we initiatedannounced athat, rollingbased NDAon submissiondiscussions towith the U.S. FDAFDA, anda planconfirmatory Phase III clinical trial is needed to submitseek marketingapproval applicationsof toan other regulatory filingsNDA for apraglutide for use in adult patients with SBSSBS-IF who are dependent on PS. In the fourth quarter of 2025, we met with the U.S. FDA and aligned on key design elements of a confirmatory Phase III clinical trial, STARS-2, of apraglutide. Site initiations are expected to begin in the second quarter of 2026.

IW-3300. We arewere also advancingdeveloping IW-3300, a GC-C agonist, for the potential treatment of visceral pain conditions, such as IC/BPS and endometriosis.BPS. In SeptemberApril 2024,2025, based on analysis of the Phase II data, we decided to endcease furtherdeveloping recruitmentIW-3300 for the Phase II proof of concept study in IC/BPS and analyze the data once all currently enrolled patients complete the full 12-week study assessment, which will inform the next steps in the program.BPS.

Early research and development. Our early research and development efforts have been focused on supporting our development stage GI and rare diseases programs, including exploring strategic options for further development of certain of our internal programs, as well as evaluating external development-stage GI programs.

The following table sets forth our research and development expenses related to our product pipeline for the years ended December 31, 2024, 2023,2025 and 2022,2024, respectively. These expenses relate primarily to compensation, benefits and other employee-related expenses and external costs associated with nonclinical studies and clinical trial costs for our product candidates. We allocate costs related to facilities, depreciation, share-based compensation, research and development support services and certain other costs directly to programs.

The lengthy process of securing regulatory approvals for product candidates, including apraglutide, requires the expenditure of substantial resources. Any failure by us to obtain, or any delay in obtaining, regulatory approvals would materially adversely affect our product development efforts and our business overall. Given the inherent uncertainties that come with the development of pharmaceutical products, we cannot estimate with any degree of certainty how our programs will evolve, and therefore the amount of time or money that would be required to obtain regulatory approval to market them.

We expect to invest in our development programs and incur substantial research and development expenses for the foreseeable future. We will continue to invest in linaclotide, including the investigation of ways to enhance the clinical profile within its currently approved indications, and the exploration of its potential utility in other indications, populations and formulations. We will continue to invest in our GIformulations, and rare disease-focused product candidates, includingin apraglutide, as we advance themit through pre-clinical and clinical trials, in addition to funding research and development activities under our external collaboration and license agreements.agreements with respect to our products and product candidates.

Restructuring Expenses. Restructuring expenses pertain to a headquarters-based workforce reduction in April 2023 and restructuring initiativesinitiative in connection with the VectivBio AcquisitionAcquisition, commencingas well as workforce reductions in JuneJanuary 2023.2025 consisting primarily of field-based sales employees and August 2025 consisting of certain positions supporting apraglutide commercialization efforts. The workforce reduction and restructuring initiatives are more fully described in Note 16,15, Workforce Reductions and Restructuring, to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Interest Expense and Other Financing Costs. Interest expense consists primarily of cash and non-cash interest costs related to our convertible senior notes and our $550.0 million secured revolving credit facility, or the Revolving Credit Facility. Non-cash interest expense consists of amortization of debt issuance costs.

Determining pension expense and obligations for our defined benefit pension plan uses actuarial estimates of participants’ age at retirement, life span, the long-term rate of return on investmentsassets and other factors. In addition, pension expense is sensitive to the discount rate used to value the pension obligation. As a sensitivity measure, an increase or decrease in our discount rate assumption of 1.00% would decrease and increase our pension expensebenefit obligation by $1.8$2.0 million and $2.3$2.6 million, respectively. These assumptions are subject to the risk of change, including macroeconomic conditions, as they require significant judgment and have inherent uncertainties that management or its actuaries may not control or anticipate. A detailed discussion of our defined benefit pension plan is contained in Note 1514, Retirement Plans, to our consolidated financial statementsstatements, setwhich forthappears in Item 8 of this Annual Report on Form 10-K.

Collaborative arrangements revenue. The decrease in collaborative arrangements revenue of $91.3$55.3 million for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 was primarily related to a $90.1$51.1 million decrease in our share of net profits from the sale of LINZESS in the U.S., which was driven by decreased net price (including a $43.0 million reduction to collaboration revenue as a result of changes in estimates of sales reserves and allowancesinventory associatedchannel with government and contractual rebates),fluctuations, partially offset by increases fromincreased prescription demand.

CostCosts and Expenses

Research and development. The decrease in research and development expenses of $4.7$16.3 million for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 was primarily related to $11.3$9.6 million ofdecrease share-basedin compensationexternal expenseapraglutide andcosts, $3.5a $5.9 million in related payroll taxes recognizeddecrease in thecosts second quarter of 2023 immediately after the closing of the VectivBio Acquisition in connectionassociated with the vestingIW-3300 accelerationdevelopment of outstanding stock options and RSUs under VectivBio’s 2021 Equity Incentive Plan,program, a $6.0$2.8 million payment to COURdecrease in thecosts second quarter of 2023 related to CNP-104 in connectionassociated with the amendment of the COUR Collaboration Agreement, a $4.8 million reduction to research and development expense in connection with the settlement of a license-related contract liability, and a $2.5$1.8 million decrease in external linaclotide costs, partially offset by a $15.9$4.8 million increasereduction to research and development expense recognized during the first quarter of apraglutide2024 programin costs,connection with the settlement of a $6.0license-related millioncontract increase in compensation, benefits, and other employee-related expenses, and a $2.0 million increase related to an amendment of the COUR Collaboration Agreement.liability.

Selling, general and administrative. Selling, general and administrative expenses decreased $14.0by $62.0 million for the year ended December 31, 20242025 compared to the year ended December 31, 2023,2024, primarily due to $16.2 million of share-based compensation and $3.0 million in related payroll taxes recognized in the second quarter of 2023 immediately after the closing of the VectivBio Acquisition in connection with the vesting acceleration of outstanding stock options and RSUs under VectivBio’s 2021 Equity Incentive Plan, and a $0.9$47.8 million decrease in compensation, benefits, and other employee-related expenses, and a $13.5 million decrease in sales and marketing expenses, both resulting from the restructuring initiatives during 2025, as well as a decrease of $5.9 million in professional services expenses. The decrease was partially offset by a $8.0$12.5 million increaselegal settlement incurred in professional2025 serviceswhich costsis (includingmore $4.5fully milliondescribed relatedin toNote commercial4, launchCollaboration, planningLicense, forand apraglutide,Other if approved).Agreements.

Interest expense and investmentother income.financing costs. Interest and investment incomeexpense decreased by $14.5$0.3 million infor the year ended December 31, 20242025 compared to the year ended December 31, 2023,2024, primarily fromdue to a decrease of $1.1 million in cashinterest andexpense investmentassociated balances followingwith the VectivBio2024 AcquisitionConvertible Notes, which were fully repaid upon maturity in June 2023.2024, partially offset by a $0.7 million increase in other financing costs.

Other. During the yearyears ended December 31, 2025 and 2024, we recorded a gain of $0.2 million and $0.6 millionmillion, respectively, for pension-related activities.

We anticipate our cash balanceand andcash equivalents balance, our expected net cash inflows from operationsoperations, our borrowing capacity on our Revolving Credit Facility, and/or additional capital sources to allow us to meet our near-termshort-term and long-term cash obligations, which are reflected in our consolidated balance sheets. Our most significant fixed obligations are debt obligationsobligations, supply purchase commitments, and lease commitments, for which annual payments are disclosed in Note 9, Debt, Note 10, Debt,Commitments and Contingencies, and Note 7,6, Leases, respectively, to our financial statements included elsewhere in this Annual Report on Form 10-K.

We have financed our operations to date primarily through both the private sale of our preferred stock and the public sale of our common stock, debt financings, and cash generated from our operations. As of December 31, 2024,2025, our debt is comprised of $200.0 million aggregate principal amount of convertible notes, due in June 2026, and $385.0 million aggregate principal amount outstanding under our Revolving Credit Facility, which we entered into in May 2023 to partially finance the VectivBio Acquisition. The Revolving Credit Facility provides for $550.0 million of borrowing capacity and includes a $10.0 million letter of credit subfacility. Refer to Note 10,9, Debt, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, for information related to our debt obligations.

The following table summarizes cash flows from operating, investing, and financing activities for the years ended December 31, 2024, 2023,2025 and 20222024:

Net cash inflows during the year ended December 31, 2025 and 2024 totaled $127.0 million and $103.5 millionmillion, respectively, and were derived primarily from collaboration arrangements revenue related to sales of LINZESS in the U.S., partially offset by research and development expenditures for apraglutide.

Cash used in investing activities for the year ended December 31, 2025 and 2024 waswere insignificant and pertained to the purchase of property and equipment.

Under our collaboration with AbbVie for North America, total net sales of LINZESS in the U.S., as recorded by AbbVie, are reduced by commercial costs incurred by each party, and the resulting amount is shared equally between us and AbbVie. Additionally, we receive royalties from AbbVie based on sales of linaclotide in its licensed territories outside of the U.S. We believe revenues from our LINZESS partnership for the U.S. with AbbVie will continue to constitute a significant portion of our total revenue for the foreseeable future and we cannot be certain that such revenues, as well as the revenues from our other commercial activities, will continue to enable us to generate positive cash flows, or to do so in the timeframes we expect. We also anticipate that we will continue to incur substantial expenses for the next several years as we further develop and commercialize linaclotide in the U.S., develop and commercialize other product candidates, including apraglutide, and invest in building our pipeline through internal or external opportunities. We believe that our cash on hand as of December 31, 2024 will be sufficient to meet our projected operating needs at least through the next twelve months from the issuance of these financial statements.

The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the notes to those financial statements appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025 which was filed with the U.S. Securities and Exchange Commission, or the SEC, on February 26, 2026, or the 2025 Annual Report on Form 10-K. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth under “Note Regarding Forward-Looking Statements,” in this Quarterly Report on Form 10-Q, under “Part I, Item 1A—Risk Factors” in our 2025 Annual Report on Form 10-K,10-K and under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements.

We have strategic partnerships with leading pharmaceutical companies to support the development and commercialization of linaclotide throughout the world, including with our partner, AbbVie Inc., or together with its affiliates, AbbVie, in the U.S. and all countries worldwide other than China (including Hong Kong and Macau) and Japan, AstraZenecaGrand ABLife Sciences (Beijing) Co., Ltd., or togetherGrand withLife its affiliates, AstraZenecaSciences, in China (including Hong Kong and Macau), and Astellas Pharma Inc., or Astellas, in Japan. In May 2026, AstraZeneca AB, our former partner in China (including Hong Kong and Macau), notified us that it assigned all its rights and obligations under the collaboration agreement to Grand Life Sciences.

We are also advancing apraglutide, a next-generation, synthetic long-acting peptide analog of glucagon-like peptide-2, or GLP-2, for short bowel syndrome, or SBS, patients who are dependent on parenteral support, or PS. In February 2024, we announced positive topline results from our pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing parenteral support dependency in adult patients with short bowel syndrome with intestinal failure, or SBS-IF. We are also conducting an open-label extension study, STARS Extend, to further assess the safety of apraglutide in adult patients with SBS-IF. In April 2025, we announced that, based on discussions with the U.S. FDA, a confirmatory Phase III clinical trial is needed to seek approval of a new drug application or NDA, for apraglutide for patients with SBS-IF who are dependent on PS. InWe the fourth quarter of 2025, wesubsequently met with the U.S. FDA and aligned on key design elements of a confirmatory Phase III clinical trial, STARS-2, of apraglutide. SiteSTARS-2 initiationsis a 24-week global, randomized, double-blind, placebo-controlled trial. The clinical trial will consist of a primary endpoint measuring relative change from baseline in actual weekly PS as well as additional key secondary endpoints. In June 2026, we initiated STARS-2 and are expectedactively torecruiting begin in the second quarter of 2026.patients.

To date, we have dedicated a majority of our activities to the research, development and commercialization of linaclotide, as well as other research and development programs, including apraglutide. For the three and six months ended MarchJune 31,30, 20262026, we recorded net income of $51.3 million and $92.1 million, respectively. For the three and six months ended June 30, 2025, we recorded net income of $40.8$23.6 million and a net loss of $37.4$13.8 million, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of approximately $1.6 billion. We are unable to predict the extent of any future losses or guarantee that our company will be able to generate and maintain positive cash flows.

Apraglutide. In February 2024, we announced positive topline results from our pivotal Phase III clinical trial, STARS, which evaluated the efficacy and safety of once-weekly subcutaneous apraglutide in reducing PS dependency in adult patients with SBS-IF. SBS-IF, a rare and severe organ failure condition in which patients are dependent on PS, affects an estimated 18,000 adult patients in the U.S., Europe, and Japan. We are also conducting an open-label extension study, STARS Extend, to further assess the safety of apraglutide in adult patients with SBS-IF. In April 2025, we announced that, based on discussions with the U.S. FDA, a confirmatory Phase III clinical trial is needed to seek approval of an NDA for apraglutide for patients with SBS-IF who are dependent on PS. InWe the fourth quarter of 2025, wesubsequently met with the U.S. FDA and aligned on key design elements of a confirmatory Phase III clinical trial, STARS-2, of apraglutide. SiteIn initiationsJune 2026, we initiated STARS-2 and are expectedactively torecruiting begin in the second quarter of 2026.patients.

In addition, we and AbbVie have established a nonclinical and clinical post-marketing plan with the U.S. FDA to understand the safety and efficacy of LINZESS in pediatric patients. In August 2021, the U.S. FDA approved a revised label for LINZESS based on clinical safety data that had been generated thus far in pediatric studies. The updated label modified the boxed warning for risk of serious dehydration and contraindication against use in children to those less than two years of age. The boxed warning and contraindication previously applied to all children less than 18 years of age and less than 6 years of age, respectively. In June 2023,2023 and May 2026, the U.S. FDA approved LINZESS as a once-daily treatment for pediatric patients ages 6-17 years-old and 2-5 years-old with FC, respectively, making LINZESS the first and only U.S. FDA-approved prescription therapy for FC in this patient population. On October 15, 2025, the U.S. FDA granted us a pediatric exclusivity for studies conducted on linaclotide, and in November 2025, approved LINZESS for pediatric patients 7 years of age and older with IBS-C. Additional clinical pediatric programs in FC are ongoing.

The following table sets forth our research and development expenses related to our product pipeline for the three and six months ended MarchJune 31,30, 2026 and 2025, respectively. These expenses relate primarily to compensation, benefits and other employee-related expenses and external costs associated with nonclinical studies and clinical trial costs for our product candidates. We allocate costs related to facilities, depreciation, share-based compensation, research and development support services and certain other costs directly to programs.

As a result of the factors discussed above, including the factors discussed under “Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q, and under “Part I, Item 1A – Risk Factors” in our 2025 Annual Report on Form 10-K,10-K and under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, we are unable to determine the duration and costs to complete current or future nonclinical and clinical stages of our product candidates or when, or to what extent, we will generate revenues from the commercialization and sale of our product candidates. Development timelines, probability of success and development costs vary widely. We anticipate that we will make determinations as to which additional programs to pursue and how much funding to direct to each program on an ongoing basis in response to the data of each product candidate, the competitive landscape and ongoing assessments of such product candidate’s commercial potential.

Restructuring Expenses. Restructuring expenses primarily pertain to a workforce reductionsreduction in January 2025 consisting primarily of field-based sales employees and August 2025 consisting of certain positions supporting apraglutide commercialization efforts.employees. The workforce reduction and restructuring initiatives are more fully described in Note 11, Workforce Reductions and Restructuring, to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Interest Expense and Other Financing Costs. Interest expense consists primarily of cash and non-cash interest costs related to ourthe 1.50% convertible senior notes due 2026, or the 2026 Convertible NotesNotes, which we repaid upon maturity in June 2026, and our $550.0 million secured revolving credit facility, or the Revolving Credit Facility. Non-cash interest expense consists of amortization of debt issuance costs.

During the three and six months ended MarchJune 31,30, 2026, there were no material changes to our critical accounting policies as reported in our 2025 Annual Report on Form 10-K.

Three and six months ended MarchJune 31,30, 2026 compared to three and six months ended MarchJune 31,30, 2025

Collaborative arrangements revenue. The increase in collaborative arrangements revenue of $65.4$27.8 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 was primarily related to a $65.5$24.4 million increase in our share of net profits from the sale of LINZESS in the U.S., which was driven primarily by increased net price, as well as inventory channel fluctuationsprice and increased prescription demand.

Research and development. The decrease in research and development expenses of $5.5$1.0 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 was primarily related to $1.4a $1.6 million decrease in external costs associated with the IW-3300 development program,program and a $1.0$1.2 million decrease in external costs associated with the linaclotide program, partially offset by a $0.9$1.3 million decreaseincrease in external costs associated with the apraglutide program, and a $0.5 million decrease in compensation, benefits, and other employee-related expenses.program.

Selling,The generaldecrease in research and administrative. Selling, general and administrativedevelopment expenses decreasedof by $12.2$6.4 million for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025,2025 was primarily duerelated to a $6.4$3.0 million decrease in compensation,external benefits,costs andassociated otherwith employee-relatedthe expensesIW-3300 development program and a $0.9$2.3 million decrease in salesexternal andcosts marketingassociated expenses, both resulting fromwith the restructuringlinaclotide initiatives during 2025, as well as a decrease of $5.3 million in professional services expenses.program.

Restructuring expenses. The decrease in restructuring expense of $18.6$18.3 million for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 iswas primarily related to the workforce reduction in January 2025 consisting primarily of field-based employees. Workforce reduction and restructuring initiatives are more fully described in Note 11, Workforce Reductions and Restructuring, to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.

Interest expense and other financing costs. Interest expense and other financing costs increaseddecreased by $1.1$1.2 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarily due to professional services incurred in connection with potential financing transactions, partially offset by lower interest rates on the Revolving Credit Facility throughout the period.

Interest expense and investmentother income.financing Interestcosts and investment income increaseddecreased by $0.8$0.1 million for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 20252025, primarily due to anlower increaseinterest inrates cashon andthe cashRevolving equivalentsCredit balances,Facility throughout the period, partially offset by aprofessional decreaseservices incurred in interestconnection rates.with potential financing transactions.

Other. During each of the three and six months ended MarchJune 31,30, 2026 and 2025, we recorded a gain of an insignificant amount for pension-related activities.

Income taxes. For the three and six months ended MarchJune 31,30, 20262026, we recorded income tax expense of $22.4 million and $46.8 million, respectively. For the three and six months ended June 30, 2025, we recorded income tax expense of $24.4$14.2 million and $1.1$15.3 million, respectively. Due to our ability to utilize our net operating losses and research and development credits to offset the majority of federal taxable income and taxable income in most states, the majority of our tax provision will be a non-cash expense.

As of MarchJune 31,30, 2026, we had $220.5$79.1 million of cash and cash equivalents. Our cash equivalents include amounts held in money market funds, U.S. Treasury securitiesfunds and commercial paper. We invest cash in excess of immediate requirements in accordance with our investment policy, which limits the amounts we may invest in certain types of investments and requires all investments held by us to be at least A- rated, with a remaining final maturity when purchased of less than twenty-four months, so as to primarily achieve liquidity and capital preservation objectives.

We have financed our operations to date primarily through both the private sale of our preferred stock and the public sale of our common stock, debt financings, and cash generated from our operations. As of MarchJune 31,30, 2026, our debt is comprised of $200.0 million aggregate principal amount of convertible notes, due in June 2026, and $385.0 million aggregate principal amount outstanding under our Revolving Credit Facility, which we entered into in May 2023 to partially finance our acquisition of VectivBio Holding AG in June 2023. The Revolving Credit Facility provides for $550.0 million of borrowing capacity and includes a $10.0 million letter of credit subfacility. Refer to Note 8, Debt, to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for information related to our debt obligations.

The following table summarizes cash flows from operating, investing, and financing activities for the threesix months ended MarchJune 31,30, 2026 and 2025:

Net operating cash inflows for the threesix months ended MarchJune 31,30, 2026 and 2025 totaled $5.1$63.4 million and $20.0$4.9 million, respectively, and were derived primarily from collaboration arrangements revenue related to sales of LINZESS in the U.S.

Cash used in investing activities for the threesix months ended MarchJune 31,30, 2025 was insignificant and pertained to the purchase of property and equipment.

Cash used in financing activities for the six months ended June 30, 2026 was $199.7 million, which was comprised primarily of a repayment of $200.0 million aggregate principal on the 2026 Convertible Notes upon their maturity in June 2026. Cash provided by financing activities for the threesix months ended MarchJune 31,30, 2025 was insignificant and was generated by employee equity transactions.

Under our collaboration with AbbVie for North America, total net sales of LINZESS in the U.S., as recorded by AbbVie, are reduced by commercial costs incurred by each party, and the resulting amount is shared equally between us and AbbVie. Additionally, we receive royalties from AbbVie based on sales of linaclotide in its licensed territories outside of the U.S. We believe revenues from our LINZESS partnership for the U.S. with AbbVie will continue to constitute a significant portion of our total revenue for the foreseeable future and we cannot be certain that such revenues, as well as the revenues from our other commercial activities, will continue to enable us to generate positive cash flows, or to do so in the timeframes we expect. We also anticipate that we will continue to incur substantial expenses for the next several years as we further develop and commercialize linaclotide in the U.S., develop and commercialize other product candidates, including apraglutide, and invest in building our pipeline through internal or external opportunities. We believe that our cash and cash equivalents on hand as of MarchJune 31,30, 2026, our expected cash inflows from operations, and our borrowing capacity on our Revolving Credit Facility will be sufficient to meet our projected operating needs at least through the next twelve months from the issuance of these financial statements. We have short-term and long-term debt obligations, including convertible notes that mature on June 15, 2026, which are disclosed in Note 8, Debt, to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. There is no assurance we will have sufficient liquidity to meet our debt obligations when they become due.

Our forecast of the period of time through which our financial resources will be adequate to support our operations, including the underlying revenue expectations and estimates regarding the costs to continue to develop, obtain regulatory approval for, and commercialize linaclotide in the U.S., develop and commercialize other product candidates, including apraglutide, and our goal to generate and maintain positive cash flows, are forward-looking statements that involve risks and uncertainties. Our actual results could vary materially and negatively from these and other forward-looking statements as a result of a number of factors, including the factors discussed under the headings “Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q and under “Part I, Item 1A—Risk Factors” in our 2025 Annual Report on Form 10-K.10-K and under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. We have based our estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

For a discussion of recent accounting pronouncements, refer to Note 2, Summary of Significant Accounting Policies, to our consolidated financial statements in our 2025 Annual Report on Form 10-K and Note 2, Summary of Significant Accounting Policies, appearing elsewhere in this Quarterly Report on Form 10-Q. We did not otherwise adopt any new accounting pronouncements during the three and six months ended MarchJune 31,30, 2026 that had a material effect on our condensed consolidated financial statements included in this report.