Ironwood Pharmaceuticals to acquire Swiss biotech company VectivBio

Ironwood Pharmaceuticals, a gastrointestinal (GI)-focused healthcare company, has agreed to acquire VectivBio Holding AG, a Switzerland-based biotech company, listed on the Nasdaq, for around $1 billion, including the latter’s debt.

Shareholders of VectivBio will be paid $17 per share in cash.

VectivBio is a clinical-stage biopharmaceutical company headquartered in Basel, specializing in the development of treatments for severe rare gastrointestinal conditions. Its focus lies in addressing conditions such as Short Bowel Syndrome with Intestinal Failure (SBS-IF) and acute Graft versus Host Disease (aGvHD), which are debilitating and rare disorders.

VectivBio’s leading investigational asset, apraglutide, is a next-generation GLP-2 analog currently in phase 3 clinical trials. It has demonstrated promising data thus far, with plans for topline results to be available by the end of the year.

Apraglutide has the potential to become the leading GLP-2 therapy for treating SBS-IF, offering advantages such as potency, unique convenience with weekly dosing, and a phase 3 clinical trial designed to evaluate clinical benefits for patients with both SBS-IF stoma and colon-in-continuity.

If apraglutide proves successful and gains regulatory approval, Ironwood projects it could achieve peak net sales of $1 billion. This transaction has the potential to enhance Ironwood’s innovative portfolio and pipeline, driving advancements in gastrointestinal disease treatment and redefining the standard of care for gastrointestinal patients.

Ironwood Pharmaceuticals claims that it is well-equipped to leverage its expertise in clinical development, regulatory pathways, medical affairs, and commercial execution to maximize the value of apraglutide for patients, healthcare professionals, and shareholders.

Tom McCourt — Ironwood Pharmaceuticals CEO said: “The acquisition of VectivBio, including its compelling asset, apraglutide, is an ideal strategic fit with 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.”

The all-cash deal has received approval from the boards of directors of both Ironwood Pharmaceuticals and VectivBio. It is supported by Orbimed, Versant Ventures, Forbion, and VectivBio’s directors and officers, who collectively hold a 28.6% stake in the Swiss biotech company.

Luca Santarelli — VectivBio CEO and founder said: “We are delighted to enter into this agreement with Ironwood to advance the development and commercialization of innovative therapies targeted at GI and rare diseases, which is the mission of VectivBio.

“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. We believe this Transaction represents the best outcome for our patients and shareholders.”

The transaction is expected to close in the second half of 2023, subject to certain conditions. These conditions include the tendering of more than 80% of VectivBio’s outstanding shares, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, specific shareholder approvals, and other customary closing conditions.