Dive Brief:
- Ironwood Pharmaceuticals said in a regulatory filing it has started layoffs as preparation for its split into two independent, publicly-traded companies.
- The biotech has planned out the organizational structure of the two companies, including employee roles, and intends to cut around 40 jobs. These will not affect the salesforce.
- Following the losses, to be complete by Dec. 31, Ironwood expects to have approximately 630 full-time employees. One-time employee severance and benefit costs will be around $5 million to $5.5 million, about 75% of which will be cash expenditures.
Dive Insight:
The job losses at Cambridge, Massachusetts-based Ironwood follow an announcement in May that revealed plans to break into two, one focusing on the company's soluble guanylate cyclase (sGC) research platform, and the other retaining Linzess and other marketed products, as well as two gastrointestinal pipeline drugs.
Ironwood has faced some internal challenges. The company split, due to complete in the first half of 2019, was a result of pressure from activist investor Alex Denner of Sarissa Capital. Denner's bid to join the board was defeated in May 2018, when shareholders voted to instead re-elect all three of the company's director nominees: Lawrence Olanoff, Amy Schulman and Douglas Williams.
Ironwood has three drugs on the market; Linzess (linaclotide) for irritable bowel syndrome, as well as Zurampic (lesinurad) and Duzallo (lesinurad and allopurinol) for uncontrolled gout. Pipeline drugs include a delayed release form of linaclotide for abdominal pain associated with irritable bowel syndrome, IW-3718 for uncontrolled gastroesophageal reflux disease, praliciguat for diabetic nephropathy and heart failure with preserved ejection fraction as a diabetic complication, and olinciguat (IW-1701) for achalasia and sickle cell disease.
