Ironwood Pharmaceuticals cuts 100 jobs after digestive disease drug falters
Ironwood Pharmaceuticals, a GI-focused healthcare company, announced that data from one of its two identical Phase III trials evaluating IW-3718 in refractory gastroesophageal reflux disease (GERD), did not meet the pre-specified criteria associated with a planned early efficacy assessment. Following the assessment from an independent data monitoring committee, Ironwood unblinded the data and confirmed that IW-3718-302 did not meet the criteria, including the study’s primary endpoint of achieving a statistically significant improvement in heartburn severity. IW-3718 was generally well-tolerated in study IW-3718-302.
Based on these findings, Ironwood plans to discontinue development of IW-3718, including stopping enrollment in IW-3718-301, the second Phase III trial.
Ironwood plans to restructure, cutting approximately 100 full-time employees, or nearly 35% of the current workforce. This is expected to affect both field-based and home-office employees, including the relevant general & administrative support functions. Following the changes, Ironwood expects to have approximately 210 full-time employees. The planned workforce reduction is anticipated to be substantially completed in the first quarter of 2021.
Ironwood expects these changes to result in total cost savings of greater than $95 million, comprised of at least $45 million in annualized cost savings related to the planned workforce reduction and an additional approximately $50 million related to external spend for IW-3718 previously expected through 2021. Ironwood expects to incur one-time costs of approximately $10 million to $12 million in connection with discontinuing development of IW-3718, primarily associated with the planned reduction in workforce. Such costs are expected to be incurred primarily in the fourth quarter of 2020.
As part of this workforce reduction and in light of recent changes in market dynamics related to the COVID-19 pandemic, Ironwood plans to restructure its commercial organization.
"We have made the difficult decision to re-align our resources and capital with our business moving forward," said Mark Mallon, chief executive officer of Ironwood. "With a streamlined organization that we believe will be positioned well to deliver in this current environment, we aim to continue our efforts to maximize LINZESS and to drive further growth and profitability. There are approximately 70 million people today living with GI diseases in the U.S., and we remain steadfast in our mission to advance GI medicines and redefine the standard of care for these patients."
Read the Ironwood statement