Ironwood Pharma (IRWD)	IRWD, C, 6					Post-IPO shares: 95mm
Pharmaceutical co			$mm
Cambridge, MA	2006	2007	2008	'08 9mos	'09 9mos $	IPO Mkt
Revenue	$3	$11	$22	$17	$28	Cap (mm)
R&D	$37	$53	$54	$43	$47	$1,425
Profit (loss)	-$36	-$57	-$60	-$43	-$59	@$15
VALUATION RATIOS	IPO Mrkt	Price /	Price /	Price /	Price /	% offered
	Cap (mm)	Sales	Earnings	BookValue	TangibleBV	in IPO
Ironwood Pharma (IRWD)	$1,425	91.0	-18	5.48	5.45	18%
SCORECARD		Mgt	Market	Market Do-	Proprie-	Total
1-5, 5 is high			Growth	mination	tary	rating
20 is perfect		2	2	0	2	6

BUSINESS

Portfolio of internally discovered drug candidates that includes one Phase 3 drug candidate (linaclotide), one Phase 1 pain drug candidate, and multiple preclinical programs.

Lead drug candidate is for the treatment of irritable bowel syndrome with constipation, or IBS-C, and chronic constipation, or CC,

. IRWD has pursued a partnering strategy for the commercialization of linaclotide that has enabled IRWD to retain significant control over linaclotide's development and commercialization, share the costs of drug development and commercialization with collaborators whose capabilities complement ours, and retain approximately half of the future long-term value of linaclotide in the major pharmaceutical markets, should linaclotide meet IRWD’s sales expectations.

REVENUE

Revenue to date from the human therapeutics segment is generated primarily through collaborative research, development and/or commercialization agreements. The terms of these agreements typically include payment to IRWD of one or more of the following: nonrefundable, up-front license fees; milestone payments; and royalties on product sales.

VALUATIONS

"As a result of both the accelerated liquidity date for the one-indication IPO scenario and the passage of time from the November 2, 2009 valuation to the February 5, 2010 anticipated effective date, management's estimated fair value of our common stock at February 5, 2010 would be $12.18 a 19% discount from the midpoint of the range, $15." -- Page 57 of the Jan 20, 2009 S-1 filing

Valuations per stock options

$11.72 November 2, 2009 $7.36 October 22, 2009 $5 May 5, 2009 $4.89 December 31, 2008

PRIMARY DRUG CANDIDATE

Currently in Phase 3 clinical trials

Linaclotide is a first-in-class compound that is currently in Phase 3 clinical development for the treatment of irritable bowel syndrome with constipation, or IBS-C, and chronic constipation, or CC, and will require the successful completion of at least two Phase 3 clinical trials for each indication before submission of an NDA to the FDA for potential approval in such indication.

In November 2009, IRWD announced that we achieved favorable results in CC trials. Even though linaclotide met the endpoints of the CC trial, it may not be approved for the CC indication or for any other indication for which we are seeking approval from the FDA. The FDA may disagree with IRWD’s trial design or our interpretation of data from clinical trials, or may change the requirements for approval even after it has reviewed and commented on the design for our clinical trials. The FDA might also approve linaclotide for fewer or more limited indications than we request, or may grant approval contingent on the performance of costly post-approval clinical trials. In addition, the FDA may not approve the labeling claims that we believe are necessary or desirable for the successful commercialization of linaclotide.

Linacotide According to IRWD, Linaclotide is a first-in-class compound currently in confirmatory Phase 3 clinical trials evaluating its safety and efficacy for the treatment of patients with irritable bowel syndrome with constipation (IBS-C) or chronic constipation (CC). IBS-C and CC are gastrointestinal disorders that affect millions of sufferers worldwide. Linaclotide recently achieved favorable efficacy and safety results in two Phase 3 CC trials, meeting all 32 primary and secondary endpoints, including the improvement of abdominal symptoms such as bloating and discomfort as well as constipation symptoms, across both doses evaluated in these independent trials involving 1,287 subjects.

IRWD expectx to have data from the Phase 3 IBS-C trials in the second half of 2010. If those trials are successful, IRWD intends to file a New Drug Application with the U.S. Food and Drug Administration, or the FDA, in the first half of 2011, seeking approval to market linaclotide to IBS-C and CC patients age 18 and older in the U.S.

If the FDA approves linaclotide for those indications, IRWD may seek to expand linaclotide's market opportunity by exploring its utility in other gastrointestinal indications and in the pediatric population.

Linaclotide was designed by Ironwood scientists to target the defining attributes of IBS-C: abdominal pain, discomfort, bloating and constipation. Linaclotide acts locally in the gut with no detectable systemic exposure in humans at therapeutic doses. In the six Phase 2 and Phase 3 clinical trials IRWS has completed to date in over 2,000 IBS-C and CC patients, linaclotide has demonstrated rapid and sustained improvement of the multiple symptoms of IBS-C and CC, with favorable tolerability and convenient once-daily oral dosing.

STRATEGIC PARTNERS The three primary strategic alliances are with Forest, Almirall and Astellas.

MICROBIA

Majority stockholder of Microbia, Inc., or Microbia, a biomanufacturing company based in Lexington, Massachusetts. Microbia was spun out of Ironwood in 2006 and focuses on building a specialty biochemicals business based on a proprietary strain-development platform. Microbia's technology platform has been designed to produce high-quality, competitively-priced specialty ingredients and industrial biomaterials from renewable resources.

PATENTS & INTELLECTUAL PROPERTY

Linaclotide and GC-C Patent Portfolio

The linaclotide patent portfolio is currently composed of two issued U.S. patents; a granted European patent (which has been validated in 31 European countries and in Hong Kong); four issued patents in other foreign jurisdictions; nine pending U.S. non-provisional patent applications; five pending U.S. provisional patent applications; two pending Patent Cooperation Treaty, or PCT, applications; and 46 pending foreign patent applications, all of which relate to issued U.S. patents, pending U.S. non-provisional patent applications or pending PCT applications. IRWD owns all of the issued patents and own or jointly own all of the pending applications.

The issued U.S. patents, which will expire in 2025, contain claims directed to the linaclotide molecule, pharmaceutical compositions thereof, methods of using linaclotide to treat gastrointestinal disorders and processes for making the molecule. If claims in our pending patent covering the room temperature stable formulation are allowed, they would expire in August 2029. The granted European patent, which will expire in 2024, contains claims directed to the linaclotide molecule, pharmaceutical compositions thereof and uses of linaclotide to prepare medicaments for treating gastrointestinal disorders. The pending PCT, U.S., foreign and provisional applications contain claims directed to linaclotide and related molecules, pharmaceutical formulations thereof, methods of using linaclotide to treat various diseases and disorders and processes for making the molecule. These patent applications, if issued, will expire between 2024 and 2030.

In addition to the patents and patent applications related to linaclotide, IRWD currently have one issued U.S. patent, five pending U.S. non-provisional patent applications, one pending PCT application and five pending foreign non-provisional patent applications, all of which relate to the U.S. issued patent or pending U.S. non-provisional patent applications, which are directed to other GC-C agonist molecules, pharmaceutical compositions thereof, methods of using these molecules to treat various diseases and disorders and processes of synthesizing the molecules. The issued U.S. patent will expire in 2024. The patent applications, if issued, will expire between 2024 and 2029.

Additional Intellectual Property

IRWD’s pipeline patent portfolio is currently composed of three issued U.S. patents; a granted European patent (which has been validated in 31 European countries and in Hong Kong); six issued patents in other foreign jurisdictions; 15 pending U.S. non-provisional patent applications; three pending U.S. provisional applications; nine pending PCT applications; and 67 pending foreign patent applications, all of which relate to issued U.S. patents or pending U.S. non-provisional patent applications. IRWD owns all of the issued patents and own or jointly own all of the pending applications. One of the issued U.S. patents expires in 2022, and the other two patents expire in 2024. The European patent and the other foreign issued patents expire in 2024. The pending patent applications, if issued, will expire between 2024 and 2030.

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the date of filing the non-provisional application. In the U.S., a patent's term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office in granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier-filed patent.

The patent term of a patent that covers an FDA-approved drug may also be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is under regulatory review. Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended. Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug. We expect to apply for patent term extensions for some of IRWD’s current patents, depending upon the length of clinical trials and other factors involved in the filing of an NDA

USE OF IPO PROCEEDS

$237mm or $272 if over-allotment exercised . $225.0 million to fund the development and commercialization of linaclotide; . $39.0 million to fund the research and development of IW-6118, an inhibitor of Fatty Acid Amide Hydrolase, or FAAH, being evaluated for the treatment of pain and inflammation, in Phase 1 and Phase 2 studies, and to continue discovery and preclinical research of early-stage compounds in gastrointestinal pain, inflammation and cardiovascular indications during the twelve month period following the IPO