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.
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.
