November 30, 2023

VIA EDGAR

U.S. Securities and Exchange Commission
Division of Corporation Finance, Office of Life Sciences
100 F Street, N.E.
Washington, D.C. 20549

Attention: Lynn Dicker and Tara Harkins

Ladies and Gentlemen:

On behalf of Ironwood Pharmaceuticals, Inc. (the “Company”), I hereby submit this letter in response to the comment letter from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated November 15, 2023, relating to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the Commission on February 16, 2023 (the “2022 Form 10-K”), and the Company’s Current Report on Form 8-K, furnished to the Commission on February 16, 2023. The Staff’s comment is presented in italics below.

Form 8-K filed on February 16, 2023

Exhibits

Pursuant to its collaboration (the “Collaboration”) with AbbVie Inc. (together with its affiliates, “AbbVie”) for the development and commercialization of linaclotide in North America, the Company receives 50% of the net profits and bears 50% of the net losses from commercial sales of LINZESS (the U.S. marketing name for linaclotide) in the United States. LINZESS net sales are calculated and recorded by AbbVie using AbbVie’s revenue recognition accounting policies and reporting conventions. As set forth in the Company’s earnings releases, the U.S. LINZESS Commercial Collaboration table presents the calculation of the Company’s share of net profit (loss) generated from the sale of LINZESS in the United States and the Company’s Collaboration revenue/expense. This table does not present the research and development (“R&D”) expenses related to LINZESS in the United States that are shared equally between the Company and AbbVie. Also as set forth in the Company’s earnings releases, the U.S. LINZESS Full Brand Collaboration table presents calculations of the total net profit (loss) generated from the sales of LINZESS in the United States, including the commercial costs and expenses and the R&D expenses related to LINZESS in the United States that are shared equally between the Company and AbbVie.

Reconciliation to Financial Statements

U.S. LINZESS Commercial Collaboration

Fiscal Year and Quarterly Period Ended December 31, 2022

U.S. LINZESS Commercial Collaboration¹

Revenue/Expense Calculation

(In thousands)

(unaudited)

As shown above, “Ironwood’s collaborative arrangement revenue,” included in the U.S. LINZESS Commercial Collaboration table in the Company’s earnings release for the fiscal year and quarterly period ended December 31, 2022, agrees to the “Collaborative arrangements revenue related to sales of LINZESS in the U.S.” in the table summarizing collaborative arrangements revenue from the Collaboration, included under Note 4—Collaboration, License and Other Agreements (“Note 4”) to the Company’s Consolidated Financial Statements, on page F-20 of the 2022 Form 10-K, as shown below. Because AbbVie, and not the Company, records net sales of LINZESS in the United States, “LINZESS U.S. net sales as reported by AbbVie,” as well as the subsequent line items used to calculate “Ironwood’s collaborative arrangement revenue”, do not correspond to specific line items on the Company’s financial statements.

The Company recognized collaborative arrangements revenue from the Collaboration for North America during the years ended December 31, 2022, 2021, and 2020 as follows (in thousands):

As shown above and presented in Note 4 on page F-20, “Royalty revenue” is added to “Collaborative arrangements revenue related to sales of LINZESS in the U.S.,” resulting in “Total collaborative arrangements revenue” related to the Collaboration. “Total collaborative arrangements revenue” from the Collaboration agrees to “AbbVie (North America)” under “Linaclotide Collaboration and License Agreements” in the Collaborative Arrangements Revenue table in Note 4, on page F-19 of the 2022 Form 10-K and as shown below. Revenues from the Company’s other collaborative arrangements are added to “AbbVie (North America),” resulting in “Total collaborative arrangements revenue.”

“Total collaborative arrangements revenue” in the above table agrees to “Collaborative arrangements revenue” under “Revenues” on the face of the Company’s Consolidated Statements of Income and Comprehensive Income, presented on page F-5 of the 2022 Form 10-K and as shown below.

Ironwood Pharmaceuticals, Inc.
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)

Quarterly Period Ended September 30, 2023

U.S. LINZESS Commercial Collaboration¹

Revenue/Expense Calculation

(In thousands)

(unaudited)

Similarly, as shown above, “Ironwood’s collaborative arrangement revenue,” included in the U.S. LINZESS Commercial Collaboration table presented in the Company’s earnings release for the quarterly period ended September 30, 2023, agrees to “Collaborative arrangements revenue related to sales of LINZESS in the U.S.,” presented in the table summarizing collaborative arrangements revenue from the Collaboration, included under Note 5—Collaboration, License and Other Agreements (“Note 5”) to the Company’s Consolidated Financial Statements, on page 17 of the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, filed with the Commission on November 9, 2023 (the “Q3 2023 Form 10-Q”), as shown below.

The following table summarizes collaborative arrangements revenue from the Collaboration for North America (in thousands):

As shown above and presented in Note 5 on page 17, “Royalty revenue” is added to “Collaborative arrangements revenue related to sales of LINZESS in the U.S.,” resulting in “Total collaborative arrangements revenue.” “Total collaborative arrangements revenue” from the Collaboration agrees to “AbbVie (North America)” under “Linaclotide Collaboration and License Agreements” in the Collaborative Arrangements Revenue table included under Note 5, on page 16 of the Q3 2023 Form 10-Q and as shown below. Revenues from the Company’s other collaborative arrangements are added to “AbbVie (North America),” resulting in “Total collaborative arrangements revenue.”

“Total collaborative arrangements revenue” from the above table agrees to “Collaborative arrangements revenue” under “Revenues” on the face of the Company’s Condensed Consolidated Statements of Income (Loss), presented on page 6 of the Q3 2023 Form 10-Q and as shown below.

Ironwood Pharmaceuticals, Inc.

Condensed Consolidated Statements of Income (Loss)

(In thousands, except per share amounts)

(unaudited)

U.S. LINZESS Full Brand Collaboration

Fiscal Year and Quarterly Period Ended December 31, 2022

US LINZESS Full Brand Collaboration¹

Revenue/Expense Calculation

(In thousands)

(unaudited)

Quarterly Period Ended September 30, 2023

US LINZESS Full Brand Collaboration¹

Revenue/Expense Calculation

(In thousands)

(unaudited)

“LINZESS U.S. net sales as reported by AbbVie” and “AbbVie & Ironwood commercial costs, expenses and other discounts,” included in the U.S. LINZESS Full Brand Collaboration table in the Company’s earnings releases and as shown above, agree to the corresponding line items included in the U.S. LINZESS Commercial Collaboration table presented in the Company’s earnings releases and used to calculate certain measures in the Company’s financial statements, as outlined above.

“AbbVie & Ironwood R&D Expenses” represent the combined R&D expenses of the Company and AbbVie in connection with the Collaboration, which expenses are shared equally by the Company and AbbVie. The amount presented in “AbbVie & Ironwood R&D Expenses” is not discretely reported in the Company’s Consolidated Financial Statements, but 50% of such amounts are included within the broader “Research and development” line item under “Costs and expenses” presented in the Company’s income statements. The amount presented in “Total net profit on sales of LINZESS” is also not discretely reported in the Company’s Consolidated Financial Statements, but, as outlined above, the inputs to this line item are calculated in the same manner as the corresponding measures in the Company’s financial statements.

Why the Company Presents this Information

The Company discloses the U.S. LINZESS Commercial Collaboration and U.S. LINZESS Full Brand Collaboration tables because it believes they present useful information for investors evaluating the Collaboration and its impact on the Company. The Company’s interest in the Collaboration is one of its most important assets. Accordingly, there is significant investor focus on the Company’s collaborative arrangements revenue, and the Company believes it is useful for investors to see a breakdown of how this measure is calculated, as shown in the U.S. LINZESS Commercial Collaboration table.

Because the U.S. LINZESS Commercial Collaboration table and the collaborative arrangements revenue line item do not give effect to R&D expenses, the U.S. LINZESS Full Brand Collaboration table provides useful incremental information to investors regarding the total Collaboration profitability. In connection with the Collaboration, the Company and AbbVie jointly collaborate on the management of LINZESS through a joint commercial committee and a joint development committee. When making decisions regarding the Collaboration and the Company’s strategy, the Company’s management evaluates profitability of the Collaboration based on a fulsome evaluation of revenues and expenses, including R&D expenses. The U.S. LINZESS Full Brand Collaboration therefore allows investors to analyze the LINZESS brand from the perspective of the Company’s management. Because AbbVie, and not the Company, records net sales of LINZESS in the United States, this would not be possible without this supplement disclosure.

*      *      *

Should the Staff have additional questions or comments regarding the foregoing, please do not hesitate to contact me at (617) 375-5055.

Paul M. Kinsella, Ropes & Gray LLP 

William J. Michener, Ropes & Gray LLP