Ironwood Pharmaceuticals plans to buy VectivBio, a Switzerland-based biotechnology company focused on treating rare disorders, in an all-cash deal valued at around $1 billion.
Terms hold that Ironwood will pay $17 for each VectivBio share, reflecting a 43% premium to the stock’s price at market’s close Friday. Each company’s board of directors has approved the transaction, which is expected to close sometime in the back half of this year.
Ironwood specializes in diseases of the stomach and intestines, and currently co-markets the irritable bowel syndrome drug Linzess alongside AbbVie. The proposed acquisition, should it go through, would hand Ironwood new and potentially lucrative research programs. For example, the company believes VectivBio’s most advanced experimental medicine, named apraglutide, could become a blockbuster product should it gain approval.
Apraglutide is in late-stage human testing for a condition known as short bowel syndrome with intestinal failure. The disease occurs when the intestines either aren’t long enough or have lost some of their function, making absorbing nutrients far more challenging. Patients can experience symptoms like malnutrition, weight loss and dehydration that can be deadly if left untreated. By Ironwood’s estimates, this condition affects about 18,000 adults across the U.S., Europe and Japan.
VectivBio is also evaluating apraglutide as a potential treatment for acute graft-versus-host disease, which arises during certain stem cell transplants when the donor cells attack the body as if it’s a foreign pathogen. A small clinical trial began last May, and should produce results around August 2025. In a statement, Ironwood noted how this disease often affects the gastrointestinal system.
VectivBio and apraglutide represent “an ideal strategic fit,” according to Ironwood’s CEO Tom McCourt.
McCourt added that, due to the success of Linzess, Ironwood has “healthy cash flow generation” and “meaningful” earnings. “We are confident that with our [gastrointestinal] expertise, commercial capabilities, and robust balance sheet, we are well-positioned to continue developing apraglutide,” he said.
Ironwood estimates the purchase of VentivBio will start being accretive to earnings per share in 2026, assuming apraglutide is successfully commercialized. The buyer’s share price was down by nearly 5% in late-morning trading Monday.
Ironwood recorded nearly $411 million in revenue last year and, by the end of this March, had $740 million in cash and cash equivalents on hand. The company expects to partially finance its acquisition with money drawn from a four-year, $500 million revolving credit facility.
For the deal to close, more than 80% of VectivBio’s outstanding shares must be tendered to the deal. Ironwood said it has already received tender and support agreements from a group representing almost 29% of VectivBio’s holdings. The group includes the investment firms Orbimed, Forbion and Versant Ventures, as well as VectivBio’s directors and officers.