|Ironwood Pharmaceuticals Sends Letter to Shareholders Highlighting Director Nominees|
– Urges Shareholders to Vote “FOR” the Ironwood Director Nominees on the WHITE Proxy Card –
The Ironwood Board of Directors strongly recommends that shareholders vote on the WHITE proxy card “FOR” Ironwood’s experienced, diverse and independent nominees. Ironwood’s letter to shareholders and other materials regarding the Board’s recommendation for the 2018 Annual Meeting can be found at www.ironwoodannualmeeting.com.
The full text of the letter follows:
Dear Fellow Shareholder,
Over the past 20 years, Ironwood has grown into a strong commercial biotech company that is bringing important medicines to millions of patients, advancing a robust pipeline of innovative drug candidates, and cultivating a team of talented and passionate employees. We are taking action designed to realize the value we are generating from accelerating revenue growth and advancement of our promising drug candidates through our recently announced intent to separate into two independent, publicly traded companies (Ironwood and “R&D Co.”).
This is an exciting and critical period for Ironwood as we work to complete the separation, which is now underway. Importantly, we believe we have the right Board in place to oversee that value creation opportunity and effectively execute this process with urgency and stability. Your Board:
At our Annual Meeting on
In this letter, we invite you to hear from Larry, Amy and Doug about their experience and why they believe Ironwood is on the right path to deliver substantial value creation.
We are excited about the opportunities ahead for Ironwood, and thank you for your continued support.
The Ironwood Board of Directors
To elect the Ironwood Board of Directors’ nominees, we encourage you to vote today by telephone, Internet, or by signing and dating the enclosed WHITE proxy card and returning it in the postage-paid envelope provided.
MEET THE IRONWOOD BOARD NOMINEES
Can you tell me more about the unique skillsets you bring to Ironwood?
I have led drug development for the majority of my career. On the clinical pharmacology side, I have a very good understanding of the interface between drug discovery and drug development. Having led large drug development organizations in three different companies, I also have a deep understanding of what makes projects successful. Getting a new drug approved is a major endeavor, but it’s only a part of the process. You can have a great product and still fail in the commercial market, but you can’t take a bad product and be successful in the commercial market. To achieve success, it’s critical to have the ability to effectively manage the process between drug discovery and development and drug development and commercialization. I also have significant experience in partnering as well as M&A. At Forest, I was involved in the negotiations of a number of partnerships, and as a Forest Board member, I was involved in the company’s decision to sell to Actavis.
I’ve always been impressed with Ironwood’s ability to achieve that critical balance. I was excited to join the Ironwood Board in 2015, given that the directors have a unique blend of expertise and skillsets that are critical to both commercial and R&D success. It’s an advantage we have over many other companies of Ironwood’s size.
As someone with significant industry experience, could you describe why a separation is the best path forward for Ironwood?
I’ve been an executive at three pharmaceutical companies over my 30-year
career, and my experience has shown me that the model for success in
this industry has changed dramatically. Success in the market today
requires a greater degree of focus, and investors likewise look for
companies that have a clear strategy and identifiable core competencies,
whether that is in drug discovery, development or commercialization. By
separating the company into two more nimble, productive businesses with
strengthened competitive positions, we believe there is a unique
opportunity to hone the models and focus on each company’s specific
attributes. The commercial company is expected to have products that
provide a great deal of value for physicians and patients and to be well
positioned for success.
As a member of the governance and nominating committee, how does Ironwood approach the vetting of director candidates?
Out of all the companies I’ve been involved with, Ironwood has been the most deliberate in its assessment of Board candidates. My own recruitment process spanned over several months, and I was interviewed by many directors. This is a very thorough process that is both appropriate and necessary to ensure we are adding candidates that bring the right mix of competencies and experiences, as well as the personal qualities to strengthen our collective decision-making needed for the long-term success of the company. As a Board, we are happy to shake things up to get the best outcome for the company, and we have proven our openness to adding several new directors that bring unique perspectives.
You’ve served on the
The Board’s priorities are clear. They start with total shareholder return over the short-, medium- and long-term. We certainly hold management accountable and spend a significant amount of time discussing management’s performance. We look to ensure that both the management team and company are growing and developing and that the right talent is in place, both at the Board and management level. In fact, we believe that the composition of the Board and assessing the leadership of the company are two of the most critical decisions that a Board has to make. We continually look at ways to enhance value for shareholders; closing the gap between what we believe the value potential of the company is relative to how the market values Ironwood is a top priority. The decision to embark on the separation is a prime example of this Board taking proactive action to address that gap.
While at Pfizer, you played an instrumental role in the sale of
Pfizer Nutrition to
During my tenure at Pfizer, I developed broad M&A experience and skills.
I also experienced firsthand the significant opportunities that exist to
unlock value, as evident from the sale of the Pfizer nutrition business
As a member of the compensation and HR committee, how does Ironwood use compensation to get the best out of all of its people?
Ironwood has a thoughtful and engaged Board, and that’s part of what attracted me to joining the Board. I think the Compensation and HR Committee is in sync with a thoughtfully run company that is determined to align management’s incentives with delivering value. At Ironwood, the compensation committee is highly independent and makes its own judgments and spends a lot of time looking at how management assesses itself and sets targets. We take a very active view of understanding how we want to fund the bonus pool. And from a Board standpoint, the vast majority of Ironwood directors’ compensation is not paid in cash. I think that reflects the company’s strong view of having owner-oriented directors whose interests are directly aligned with shareholders.
You have M&A experience as both an executive and a Board member. How did those experiences help you in the Board’s review of the range of strategic options?
Immunex and ZymoGenetics were publicly traded companies before being
In your comprehensive review, how did the Board determine that the separation of the two businesses was the right path forward for Ironwood?
As a Board, we periodically evaluate a variety of alternatives. We have been analyzing the performance of the business, progress of the business, and debating a number of different options. Several of us had heard from investors the suggestion to split the company. After a thorough review of the full range of strategic options, we unanimously came to the conclusion that a separation was the right course of action designed to unlock value—and that this is the right time to do it—given the maturity of the commercial business and the maturity of the sGC business. The breadth of opportunities that we’re seeing with the sGC stimulators reminds me of what we saw in the early days with the TNF inhibitor class, which was a common mechanism driving diseases in distinct tissues. That realization led to multiple, innovative and life-changing therapies. We are creating two very distinct operating units that are both at a stage where they have the opportunity to create more value independently.
How would you describe the dynamic of the Ironwood Board?
I have been on several Boards over the years and I find this one to be populated by particularly accomplished individuals in the biotech and pharma industry. There is a great mix of skills and backgrounds among the directors. You don’t have too many finance people or too many R&D people – just enough of each. It’s a really well-balanced mix of skillsets that, from my perspective, cover the entirety of the kinds of issues that you are likely to face as a Board in this industry. It is a group that is not afraid to speak up, is very engaged in Board meetings and continuously challenges management. It is also a group that respects each other and functions at a high level. It is one of the strongest Boards that I have ever been associated with.
How did the Board evaluate Alex Denner’s candidacy?
It was a process to evaluate the existing Board’s composition and expertise in an effort to identify any gaps that could be filled. Ultimately, we concluded that the requisite skills and experience needed to make the best decisions as we move forward with the separation—decisions that are focused on advancing shareholder interests—were already around the table.
IRONWOOD’S BOARD HAS THE RIGHT MIX OF SKILLS AND EXPERTISE
Amy, Larry and Doug – along with the entire Ironwood Board, bring together the right mix of skills and expertise to oversee Ironwood at this important time in our transformation.
Your Board uses a rigorous process to determine the appropriate Board
make-up, and as a result has an excellent group of individuals with the
appropriate skills. Moreover, the Board’s annual evaluation process
serves to improve the effectiveness of all members and the Board as a
whole. Ironwood strongly believes that Sarissa has not made a compelling
case for Ironwood to add
PROTECT THE VALUE OF YOUR INVESTMENT IN IRONWOOD:
Whether or not you plan to attend the Annual Meeting, you have an opportunity to protect your investment in Ironwood by voting the WHITE proxy card “FOR ALL” of our nominees. YOUR VOTE IS EXTREMELY IMPORTANT!
We urge you to vote today by telephone, Internet, or by signing and dating the enclosed WHITE proxy card and returning it in the postage-paid envelope provided.
Please disregard any gold proxy card you get from Sarissa.
If you have any questions about how to vote your shares, or need
additional assistance, please contact our proxy solicitor,
This press release contains forward-looking statements. Investors are
cautioned not to place undue reliance on these forward-looking
statements, including statements about the benefits of a potential
separation, including with respect to Ironwood’s and R&D Co.’s
competitive position and enhanced operational, commercial and scientific
effectiveness; the structure, including the division of assets among
Any trademarks referred to in this press release are the property of their respective owners.
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