The layoffs will allow Ironwood to dedicate more resources to pushing its lead molecule apraglutide through a Phase III trial and a rolling NDA submission.
Ironwood Pharmaceuticals on Wednesday announced a steep workforce reduction initiative that will allow it to lower its spending and “is intended to position the company for long-term growth.”
The news of the layoffs comes as Ironwood unveiled its 2025 revenue guidance, expecting to make between $260 million to $290 million—a range that falls far below the $340 million consensus by analysts, according to SeekingAlpha. Ironwood dipped around 7% in after-hours trading Wednesday.
Approximately 50% of Ironwood’s employees will be affected by the layoffs, mostly those working in its field force, the biotech revealed in its news release.
As part of the restructuring program, Ironwood is also discontinuing the Phase II exploratory STARGAZE trial of apraglutide for graft-versus-host disease. This decision, according to the biotech, will allow it to “further focus its resources and investments.” CEO Tom McCourt in a statement added that “these changes are necessary to continue to progress apraglutide and maintain our profitability and cash flow goals.”
Ironwood expects to absorb around $20 million to $25 million in one-time restructuring charges. The company projects $50 million to $60 million in annual operating expense savings, resulting in a $40 million to $45 million benefit to its yearly profits.
Apraglutide is an investigational GLP-2 analog for short bowel syndrome (SBS) with intestinal failure, a disorder that often requires patients to receive ongoing intravenous nutrients and fluids, and which is typically associated with “significant morbidity and mortality,” according to Ironwood’s website.
The biotech is testing apraglutide in the Phase III STARS trial, which in February 2024 demonstrated a 25% reduction in the need for parenteral support in SBS patients, compared to 12% in placebo counterparts. Apraglutide also aced its secondary endpoints, including an increase in the proportion of patients who were able to take at least one day off of parenteral support.
On Wednesday, Ironwood presented additional data from the open-label extension study of STARS, showing that more patients were weaned off parenteral support with prolonged apraglutide exposure. Ironwood has kicked off a rolling NDA submission for apraglutide and expects to complete its filing in the third quarter of this year.
