RARE Daily

Ironwood to Acquire VectivBio for $1 Billion

May 22, 2023

Rare Daily Staff

Ironwood Pharmaceuticals, a GI-focused healthcare company, said it has entered into an agreement to acquire Swiss biotech VectivBio Holding, a clinical-stage company pioneering novel treatments for severe rare gastrointestinal conditions.

Ironwood will pay $17.00 per share in an all-cash transaction with an estimated aggregate value of approximately $1 billion, net of VectivBio cash and debt. The acquisition price represents a premium of 80 percent relative to the volume-weighted average share price over the previous 90 trading days. The transaction was approved by both the Ironwood and VectivBio Boards of Directors, conditioned upon, among other things, the tender of shares representing more than 80 percent of VectivBio’s issued and outstanding shares and other customary conditions.

VectivBio is focused on the discovery and development of treatments for severe, rare conditions, including Short Bowel Syndrome with Intestinal Failure (SBS-IF) and acute Graft versus Host Disease (aGvHD). SBS-IF is a severe malabsorptive condition requiring ongoing I.V. administration of fluids and nutrients and is associated with significant morbidity and mortality, high economic burden, and an impaired quality of life. A substantial number of SBS-IF patients remain dependent on chronic parenteral support, and there is considerable unmet need in this patient population, which has an estimated addressable population of 18,000 adult patients across the U.S., Europe, and Japan. aGVHD is an immunologically mediated disease occurring in individuals undergoing allogeneic hemopoietic stem cell transplantation (HSCT) where donor immune cells react against the host recipient. The gastrointestinal system is among the most common sites affected by acute GVHD, and severe manifestations of aGVHD of the gut portends a poor prognosis in patients after HSCT.

VectivBio’s lead investigational asset, apraglutide, is a next-generation, GLP-2 analog which has shown compelling data to date and is currently in phase 3 with plans for topline readout by year’s end. Apraglutide has the potential to be the best-in-class GLP-2 therapy for the treatment of SBS-IF based on its potency and pharmacological properties, unique convenience of weekly dosing, and phase 3 study designed to evaluate clinical benefit for both SBS-IF stoma and colon-in-continuity patients. If successful and approved, Ironwood believes apraglutide presents an opportunity to reach $1 billion in peak net sales.

Ironwood believes this transaction has the potential to strengthen its portfolio and pipeline to advance the treatment of GI diseases and redefine the standard of care for GI patients.

“The acquisition of VectivBio, including its compelling asset, apraglutide, is an ideal strategic fit with Ironwood,” said Tom McCourt, CEO of Ironwood. “With the success of our blockbuster product, Linzess, we have built a strong GI commercial function, healthy cash flow generation, and meaningful EBITDA. We are confident that with our GI expertise, commercial capabilities, and robust balance sheet, we are well-positioned to continue developing apraglutide, with the goal of getting it into the hands of the patients who need it the most and potentially generate significant and sustainable value for shareholders.”

Besides apraglutide, VectivBio is also advancing its modular, small molecule CoMET platform to address a broad range of previously undruggable inherited metabolic diseases (IMDs). CoMET leverages innovative chemistry, based on a proprietary stabilized pantetheine backbone, to restore fundamental cellular metabolism in pediatric populations with IMDs characterized by a deficit of energy metabolism caused by the depletion of functional Coenzyme A. Candidates from the CoMET platform are initially being evaluated in methylmalonic acidemia, propionic acidemia, and other organic acidemias.

“Ironwood’s capabilities and established track record in GI make it the ideal company to bring apraglutide, if approved, to patients suffering from SBS-IF and other serious GI conditions,” said Luca Santarelli, CEO and founder of VectivBio. “We believe this transaction represents the best outcome for our patients and shareholders.”

Ironwood expects to finance the acquisition with cash on hand and funds drawn through a four-year, $500 million revolving credit facility entered in connection with the transaction.

Photo: Luca Santarelli, CEO and founder of VectivBio

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