Ironwood, Flush With Cash, Anticipates Big Year with Constipation Drug
Ask Ironwood Pharmaceuticals CEO Peter Hecht what he’s trying to accomplish in the next six to 12 months, and he doesn’t tiptoe around. “We’re trying to build the next great pharmaceutical company,” Hecht says. “I know that sounds ludicrous, but I thought I’d just start out with our ambition first.”
It’s an open question whether he will achieve that, but it’s clear that Ironwood is serious. It’s a private biotech company with 150 employees in Cambridge, MA, that changed its name from Microbia in April. The company has raised a total of $231 million in its 10-year history, including a $50 million private round announced on Oct. 1, led by Morgan Stanley, right when Lehman Brothers and much of Wall Street was crumbling around it. Other investors include notable names like Venrock Associates, Polaris Venture Partners, and Fidelity Biosciences.
The investors are mainly betting on Ironwood’s lead drug candidate, linaclotide. It’s a novel compound for chronic constipation and for constipation from irritable bowel syndrome. One week after the financing announcement crossed the wire, Ironwood and its partner, New York-based Forest Laboratories, said a study of 420 patients showed the drug significantly improved constipation symptoms and reduced abdominal pain. Researchers reported no serious side effects related to the drug, although 1 percent to 7 percent of patients on the medicine dropped out of the study because of diarrhea, according to a presentation at the American Society of Gastroenterology. These results were promising enough for Ironwood and Forest to start up a program of four final-stage clinical trials, encompassing a total of 2,500 patients, to amass enough evidence to potentially bring this drug to the marketplace.
To hear Hecht tell the story, Ironwood didn’t start down this path because it had narrow expertise in a specific disease like diabetes, or in a particular technology platform, like RNA interference drugs. “We don’t have any of that,” he says. “I know it sounds hokey and trite and incredibly naïve, but we have really talented people and enormous passion.”
The strategy at Ironwood, Hecht says, is to look for great areas of medical need and work to develop drugs for them. Constipation from irritable bowel syndrome was one such area. The numbers of patients diagnosed with this condition is fuzzy, but Novartis tegaserod maleate (Zelnorm) reached $561 million in peak sales for treating this condition in 2006, despite “modest efficacy,” Hecht says. The drug was pulled from the market in March 2007 after the FDA found it raised cardiovascular risks.
The Ironwood drug has been designed to work differently than the Novartis product. The Novartis drug worked to regulate serotonin, a neurotransmitter in the brain and the gut. Ironwood’s is an engineered protein fragment or peptide, designed in such a way that it is an oral pill that can pull off a tricky balancing act. It has been made to withstand the harsh acids of the stomach, navigate its way into the gut, and act exclusively in that environment, without being absorbed throughout the body, where it can cause side effects, Hecht says. The drug is thought to act by stimulating secretions of fluids into the intestines, which softens stool, and helps people have easier bowel movements, Hecht says.
If this drug succeeds in the final phase of clinical trials, Ironwood won’t just sit back and collect royalties from its partner. It plans to build a U.S.-based sales force and split the profits 50/50 with Forest Laboratories. This is pretty heady stuff for a company that doesn’t even have the high profile that comes with a listing on the NASDAQ. Hecht didn’t reveal timelines for when the trials should produce an answer, but Ironwood is clearly going to find out if it has a big drug on its hands sooner than most biotechs in Massachusetts, or anywhere else.
When we talked a couple weeks ago, Hecht seemed almost like he was unwilling to tell investors what they want to hear, even when he could. It probably shouldn’t be surprising for a guy whose company was re-named Ironwood in April. The name was inspired by a type of tree that thrives in the harshest desert climates, with some living as long as 1,500 years. That’s not exactly the time horizon of most investors.
“We’re in this for the long haul,” Hecht says.