– Proceeds to advance Cyclerion’s soluble guanylate cyclase (sGC)
programs targeting breakthrough treatments for serious and orphan
diseases –
– Spin-off expected to be completed in early April 2019 –
CAMBRIDGE, Mass.--(BUSINESS WIRE)--
Ironwood
Pharmaceuticals, Inc. (Nasdaq: IRWD) today announced that Cyclerion
Therapeutics, Inc. (Cyclerion) has entered into an agreement for a
private placement of up to $175 million. The offering includes
commitments from existing Ironwood shareholders, new investors, and
certain members of future Cyclerion management. Final proceeds from this
offering are expected to support Cyclerion’s sGC stimulator portfolio
for at least two years, including four clinical data readouts expected
in the second half of 2019. The financing transaction is anticipated to
close in early April, immediately following the completion of Ironwood’s
planned tax-free spin-off of Cyclerion to Ironwood shareholders.
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Peter Hecht, Ironwood’s current chief executive officer (CEO) and
expected CEO of Cyclerion following the planned spin-off, 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.”
The amount raised in the private placement is subject to certain
potential reductions to preserve the tax-free nature of the spin-off.
The number of shares issued and price per share will be determined at
the time of the separation and pursuant to the terms of the purchase
agreement governing the investment.
It is expected that there will be no ongoing funding between Ironwood
and Cyclerion following the separation, other than certain shorter-term
transition and other services. Ironwood is not expected to retain equity
in Cyclerion, and is not investing in the private placement.
Ironwood plans to complete the spin-off of Cyclerion (including the
closing of the private placement) in early April 2019, subject to
customary conditions, including effectiveness of the Form 10, a
favorable opinion with respect to the tax-free nature of the
transaction, and final approval of Ironwood’s Board of Directors.
Credit Suisse and J.P. Morgan are serving as joint placement agents for
the Cyclerion offering.
About Cyclerion Therapeutics
Cyclerion Therapeutics expects to be a clinical-stage biopharmaceutical
company harnessing the power of sGC pharmacology to discover, develop
and commercialize breakthrough treatments for serious and orphan
diseases. Cyclerion plans to advance its portfolio of five
differentiated sGC stimulator programs with distinct pharmacologic and
biodistribution properties that are uniquely designed to target tissues
of greatest relevance to the diseases they are intended to treat. These
programs, each of which have important milestones anticipated in 2019,
include olinciguat in Phase 2 development for sickle cell disease,
praliciguat in Phase 2 trials for heart failure with preserved ejection
fraction (HFpEF) and for diabetic nephropathy, IW-6463 in Phase 1
development for serious and orphan central nervous system diseases, and
two late-stage discovery programs targeting serious liver and lung
diseases, respectively.
About Ironwood Pharmaceuticals
Ironwood Pharmaceuticals (Nasdaq: IRWD) is a commercial biotechnology
company focused on creating medicines that make a difference for
patients, building value for our fellow shareholders, and empowering our
passionate team. We discovered, developed and are commercializing
linaclotide, the U.S. branded prescription market leader for adults with
irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic
constipation (CIC). Our pipeline priorities for linaclotide include a
Phase IIIb trial evaluating its efficacy and safety on multiple
abdominal symptoms, including abdominal bloating, pain, and discomfort
in adult patients with IBS-C, as well as research into a formulation of
linaclotide designed to relieve abdominal pain associated with IBS.
We are also advancing a pipeline of innovative product candidates in
areas of significant unmet need, including persistent gastroesophageal
reflux disease, and the product candidates that Cyclerion expects to
advance following completion of the planned separation of Ironwood and
Cyclerion into two independent, publicly-traded companies. The
separation is expected to be completed in early April 2019. Ironwood was
founded in 1998 and is headquartered in Cambridge, Mass. For more
information, please visit www.ironwoodpharma.com
or www.twitter.com/ironwoodpharma;
information that may be important to investors will be routinely posted
in both these locations.
Forward-Looking Statements
This press release contains forward-looking statements. Investors are
cautioned not to place undue reliance on these forward-looking
statements, including statements about the proposed separation of our
operations into two independent, publicly traded companies, including
the status, structure, funding arrangements, completion, timing and
tax-free nature of the separation; the closing of Cyclerion’s financing,
the expected use of proceeds and the duration of the cash runway that
will be provided by the financing; the business and operations of
Ironwood and Cyclerion and any benefits of the separation; the
anticipated timing of preclinical, clinical and regulatory developments;
and future commercialization efforts. Each forward-looking statement is
subject to risks and uncertainties that could cause actual results to
differ materially from those expressed or implied in such statement.
Applicable risks and uncertainties include those related to the
possibility that we may not complete the separation on the terms or
timeline currently contemplated, if at all, that we may not achieve the
expected benefits of a separation, and that a separation could harm our
business, results of operations and financial condition; the risk that
the costs of the separation outweigh the benefits of the separation; the
risk that financial and operating results may differ from our
projections; the risk that our clinical programs and studies may not
progress or develop as anticipated; the risk that we may be unable to
make, on a timely or cost-effective basis, the changes necessary to
operate as independent companies; Cyclerion’s lack of independent
operating history and the risk that its accounting and other management
systems may not be prepared to meet the financial reporting and other
requirements of operating as an independent public company; the risk
that a separation may adversely impact our ability to attract or retain
key personnel; and the risks listed under the heading “Risk Factors” and
elsewhere in Ironwood’s Annual Report on Form 10-K for the year ended
December 31, 2018, the information statement filed with Cyclerion’s
Registration Statement on Form 10, and in our subsequent SEC filings,
including SEC filings related to the proposed separation. These
forward-looking statements (except as otherwise noted) speak only as of
the date of this press release, and Ironwood undertakes no obligation to
update these forward-looking statements.
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Investors and Media
Brian Cali, 617-621-8351
bcali@ironwoodpharma.com
Meredith
Kaya, 617-374-5082
mkaya@ironwoodpharma.com
Source: Ironwood Pharmaceuticals, Inc.