Ironwood Pharma (IRWD) Spins off Cyclerion Therapeutics (CYCN)

 

• Sector(s): Healthcare
• Industry: Biotechnology
• Full Time Employees: 94
• http://www.cyclerion.com

In late-February, Cambridge, Mass.-based Ironwood Pharmaceuticals announced it had entered into a private placement deal of up to $175 million that would be used to support its spinoff of Cyclerion Therapeutics. Today, Cyclerion has been launched on the second floor of a 200,000-square-foot, 3-story space on Binney Street, in Cambridge.

After the separation, no ongoing funding between Ironwood and Cyclerion is expected aside from some shorter-term transition expenses and other services. Ironwood isn’t expected to retain equity in the new company and did not invest in the private placement.

Cyclerion plans to utilize the power of sGC pharmacology to discover, develop and commercialize breakthrough treatments for serious and orphan diseases. It has a portfolio of five differentiated sGC stimulator programs each designed for unique target tissues.

At the time of the private placement, Peter Hecht, Ironwood’s then chief executive officer and expected chief executive of Cyclerion, stated, “We are grateful for the strong support from the outstanding and experienced group of investors who are participating in this financing. We look forward to launching Cyclerion and Ironwood less than one year since our initial announcement of the separation, and to advancing our efforts to create innovative new medicines for patients and generate value for our shareholders.”

Ironwood was founded in 1998 and developed Linzess to treat irritable bowel syndrome with constipation, which launched commercially in 2012 with Allergan. Ironwood has two experimental compounds in mid- and late-stage clinical trials for gastrointestinal disorders.

Mark Mallon, who recently took over as Ironwood’s chief executive officer after 24 years at AstraZeneca, told the Boston Globe, “These two companies are particularly well-positioned, post the spin[off], to really do great things. It was the right strategy at the right time.”