Ironwood acquires VectivBio in a $1 billion deal

Ironwood Pharmaceuticals, Inc., a GI-focused healthcare company, and VectivBio Holding AG, a pioneering novel clinical-stage biopharmaceutical company, transformational treatments for rare severe gastrointestinal conditions, have signed a definitive agreement for Ironwood to acquire VectivBio for $17.00 per shares in all-cash transactions at an estimated aggregate consideration of approximately $1 billion, net of VectivBio’s cash and debt.

The acquisition price represents a premium of 80% relative to the volume-weighted average share price over the previous 90 trading days. The transaction was approved by the boards of directors of Ironwood and VectivBio.

The transaction required, among other things, a stock tender representing more than 80% of VectivBio’s issued and outstanding shares and other general conditions. Orbimed, Forbion and Versant Ventures, and directors and officers of VectivBio, jointly representing a 28.6% shareholding in VectivBio, entered into a tender and endorsement agreement pursuant to the agreement of the supporting shareholders, inter alia, to offer their shares in the tender offer.

VectivBio

Headquartered in Basel, Switzerland, VectivBio is a clinical-stage biotechnology company focused on discovery and development of treatments for severe and rare conditions, including short bowel syndrome with intestinal failure (SBS-IF) and acute graft versus host disease (aGvHD).

SBS-IF is a severe malabsorption condition requiring continuous IV fluid and nutrition administration, and is associated with significant morbidity and mortality, high economic burden, and reduced quality of life. A large number of SBS-IF patients remain dependent on chronic parenteral support, and there is an unmet need in this patient population, which has an estimated treatable population of 18,000 adult patients across the US, Europe, and Japan.

aGVHD is an immunologically mediated disease that occurs in individuals undergoing allogeneic hemopoietic stem cell transplantation (HSCT) in which the donor’s immune cells react against the recipient’s host. The gastrointestinal system is one of the most common sites of acute GVHD, and severe manifestations of intestinal aGVHD signify a poor prognosis in patients after HSCT.

VectivBio’s main asset

VectivBio’s key investigative asset, apraglutide, is a next-generation GLP-2 analog that has shown exciting data to date and is currently in Phase 3 with plans for a topline reading by the end of the year.

Apraglutide has the potential to be a 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 a Phase 3 study designed to evaluate clinical benefit for both SBS-IF stoma and deep-colon patients. -continuity. If successful and approved, Ironwood believes apraglutide presents an opportunity to reach $1 billion in peak net sales.

This transaction has the potential to strengthen Ironwood’s innovative portfolio and pipeline to advance the treatment of GI disease and redefine standards of care for GI patients. With its proven track record, Ironwood is well positioned to leverage its expertise in clinical development, regulatory pathways, medical affairs and commercial execution to advance and maximize the potential value of apraglutide to patients, clinicians and shareholders.

“The acquisition of VectivBio, including its attractive asset, apraglutide, is an ideal strategic fit for Ironwood,” said Tom McCourt, chief executive officer of Ironwood.

“With the success of our blockbuster product, LINZESS, we have built a strong GI commercial function, generating healthy cash flow and meaningful EBITDA. We believe that with our GI expertise, commercial capabilities and strong balance sheet, we are well positioned to continue developing apraglutide, with the aim of getting it into the hands of the patients who need it most and potentially generating significant and sustainable production. value for shareholders.”

“We are pleased to enter this agreement with Ironwood to advance the development and commercialization of innovative therapies targeted at GI and rare diseases, which is VectivBio’s mission,” said Luca Santarelli, chief executive officer and founder 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.”

Benefits of Ironwood

Ironwood said the acquisition of VectivBio and its major investigative asset apraglutide provides a significant opportunity to accelerate the next growth horizon for Ironwood.

Ironwood said it believes the transaction will further strengthen its portfolio and channels, with the potential to significantly accelerate its growth horizon. With approximately 18,000 treatable adult patients suffering from SBS-IF across the US, Europe, and Japan, apraglutide, if successfully developed, has significant revenue potential given the orphan drug designation for the treatment of adult patients with SBS-IF, data of which is of interest. to date, convenient weekly dosing and possible expansion to additional GI conditions, including aGvHD.

The company said the deal also supports long-term profitability and generates cash flow. Apraglutide is a late stage clinical asset with the potential to reach $1 billion in peak net sales if successfully developed and approved. The addition of apraglutide provides another high-growth potential revenue stream, diversifies Ironwood’s portfolio and channels, and potentially broadens Ironwood’s growth horizon well into the 2030s.

Ironwood anticipates the pro forma company will remain positioned to provide sustainable profits and cash flow. Ironwood expects to generate more than $175 million of operating cash flow annually on a pro forma basis leading up to the commercial launch of apraglutide. The transaction, assuming successful commercialization of apraglutide, is expected to increase earnings per share from 2026.

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