1446847--3/30/2010--IRONWOOD_PHARMACEUTICALS

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Risks Related to Our Business and Industry We are largely dependent on the success of linaclotide, which may never receive regulatory approval or be successfully commercialized. Our clinical trials may fail to demonstrate acceptable levels of safety and efficacy of linaclotide, which could prevent or significantly delay regulatory approval. The positive top-line results from our two Phase 3 clinical trials assessing the safety and efficacy of linaclotide in patients with CC may not be indicative of our two Phase 3 clinical trials assessing the safety and efficacy of linaclotide in patients with IBS-C. Linaclotide may cause undesirable side effects or have other properties that could delay or prevent its regulatory approval or limit its commercial potential. Delays in the completion of clinical testing could result in increased costs and delay or limit our ability to generate revenues. Because we work with Forest Laboratories, Inc. to develop, promote and manufacture linaclotide in North America, we are dependent upon a third party in our efforts to obtain regulatory approval for, and to commercialize, linaclotide within our expected timeframes. We may face competition in the IBS-C and CC marketplace for linaclotide, and new products may emerge that provide different or better alternatives for treatment of gastrointestinal conditions. We have limited sales and marketing experience and resources, and we may not be able to effectively market and sell linaclotide. Even if linaclotide receives regulatory approval, it may still face future development and regulatory difficulties. Even if linaclotide receives regulatory approval in the U.S., we or our collaborators may never receive approval to commercialize linaclotide outside of the U.S. If we or our collaborative partners and other third parties upon whom we rely to produce linaclotide are unable to satisfy FDA quality standards and related regulatory requirements, experience manufacturing difficulties, or are unable to manufacture sufficient quantities of our product candidates, our development and commercialization efforts may be materially harmed. Guidelines and recommendations published by various organizations can reduce the use of our products. We are subject to uncertainty relating to reimbursement policies which, if not favorable for linaclotide, could hinder or prevent linaclotide's commercial success. We face potential product liability exposure, and, if successful claims are brought against us, we may incur substantial liabilities. In pursuing our growth strategy, we will incur a variety of costs and may devote resources to potential opportunities that are never completed or for which we never receive the benefit. Our failure to successfully discover, acquire, develop and market additional product candidates or approved products would impair our ability to grow. Healthcare reform measures could hinder or prevent our product candidates' commercial success. If our strategic alliances are unsuccessful, our operating results will be negatively impacted. We will need to increase the size of our organization, and we may experience difficulties in managing growth. We may not be able to manage our business effectively if we lose any of our current management team or if we are unable to attract and motivate key personnel. We will need to obtain FDA approval of any proposed product names, and any failure or delay associated with such approval may adversely impact our business. If we fail to comply with healthcare regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected. Our business involves the use of hazardous materials, and we must comply with environmental laws and regulations, which can be expensive and restrict how we do business. Our business and operations would suffer in the event of system failures. If the proprietary strain-development platform of our biomanufacturing segment does not succeed, we may lose our investment in Microbia, Inc. Risks Related to Intellectual Property Limitations on our patent rights relating to our product candidates may limit our ability to prevent third parties from competing against us. If we are sued for infringing intellectual property rights of third parties, it will be costly and time consuming, and an unfavorable outcome in that litigation would have a material adverse effect on our business. We may become involved in lawsuits to protect or enforce our patents, which could be expensive, time consuming and unsuccessful. Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. We have not yet registered trademarks for linaclotide in our potential markets, and failure to secure those registrations could adversely affect our business. We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. Risks Related to Our Finances and Capital Requirements We have incurred significant operating losses since our inception and anticipate that we will incur continued losses for the foreseeable future. We have not generated any product revenue from our product candidates and may never be profitable. We may need additional funding and may be unable to raise capital when needed, which would force us to delay, reduce or eliminate our product development programs or commercialization efforts. Our quarterly operating results may fluctuate significantly. Raising additional funds by issuing securities may cause dilution to existing stockholders and raising funds through borrowing or licensing arrangements may restrict our operations or require us to relinquish proprietary rights. We have limited experience complying with public company obligations. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our Class A common stock. Our ability to use net operating loss and tax credit carryforwards and certain built-in losses to reduce future tax payments is limited by provisions of the Internal Revenue Code, and may be subject to further limitation as a result of our IPO. Risks Relating to Securities Markets and Investment in Our Stock The concentration of our capital stock ownership with our pre-IPO investors (and their affiliates), founders, directors, executives and employees will limit your ability to influence certain corporate matters. Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control which could negatively impact the market price of our Class A common stock. If holders of shares of our Class B common stock convert their shares of Class B common stock into shares of Class A common stock and exercise their registration rights, a significant number of shares of our Class A common stock could be sold into the market, which could reduce the trading price of our Class A common stock and impede our ability to raise future capital. To the extent outstanding stock options are exercised, there will be further dilution to investors in our Class A common stock. We expect that the price of our Class A common stock will fluctuate substantially. Future sales of our Class A common stock may depress our stock price. We have never paid dividends on our capital stock, and because we do not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, of our common stock will be the sole source of gain on an investment in our Class A common stock. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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1446847--3/30/2010--IRONWOOD_PHARMACEUTICALS_INC