Ironwood to cut 35 more jobs as company split nears
- Ironwood Pharmaceuticals said Wednesday it will lay off 35 employees, mainly at its headquarters in Cambridge, Massachusetts, as the drugmaker prepares to split into two independent, public companies later this year.
- The newly announced job cuts bring Ironwood's total workforce reduction to about 235 employees over the past 12 months, according to previous filings with the Securities and Exchange Commission. Following the forthcoming corporate split and creation of a new company called Cyclerion, Ironwood plans to have roughly 330 full-time employees.
- The 'new Ironwood' will be a gastrointestinal-focused company with the aim of delivering profits beginning this year. Mark Mallon, a former AstraZeneca executive, will serve as its new CEO. Cyclerion, on the other hand, will be a clinical-stage biopharma focused on rare and orphan diseases, with a portfolio of five soluble guanylate cyclase stimulators.
Ironwood has been trimming its workforce as it prepares to split into two companies. In 2018, the pharma laid off about 40 Cambridge-based employees due to the planned divide. The 35 cuts announced Wednesday are in addition to those, a company spokesperson confirmed to BioPharma Dive.
Unrelated to the split, Ironwood also has cut about 160 additional employees over the course of the last year. Those workers were mainly in field-based sales positions.
Ironwood expects to complete its transition in the first half of this year. The new Ironwood and Cyclerion will both be independent, publicly traded entities.
The split will lead to a leaner Ironwood, as evidenced by the layoffs and a pipeline focused on gastrointestinal diseases. Mallon predicts his new company will turn a profit for the first time in Ironwood's history by growing revenue from Linzess (linaclotide), an irritable bowel syndrome business therapy .
Ironwood splits U.S. profits on Linzess with Allergan. U.S. net sales from the drug totaled $761 million in 2018, according to Allergan, and made up about three-quarters of Ironwood's revenue.
Though Ironwood's revenue increased in 2018, operating expenses far outpaced it. They swelled to $586 million, up more than 50% from 2017.
Ironwood's stock was up more than 10% Wednesday morning after the company reported fourth quarter results.
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