© Reuters. Photograph: Lee Jae-won/Reuters.
Written by Raghav Mahobey
(Reuters) – Pharmaceutical company Ironwood said on Monday it will buy Swiss-based drug developer VectivBio Holding AG for $1.15 billion, adding a promising treatment for digestive disorders to its portfolio.
Ironwood offered VectivBio $17 per share, a premium of about 43% over the stock’s last close.
Shares of VectivBio were at $16.21 in morning trade, while Ironwood shares were down 4.5% to $10.
The deal, expected to close in the second half, will help ease Massachusetts-based Ironwood’s dependence on the bowel disease drug Linzess, which it sells with AbbVie (NYSE: NYSE).
AbbVie reported $250.2 million in first-quarter US sales from Linzess.
VectivBio is developing apraglutide for a type of short bowel syndrome, in which the body is unable to properly absorb nutrients and can be fatal.
Data from the late-stage study is expected by the end of the year.
Ironwood hopes the treatment will become a successful treatment, based on a longer dosing period and potentially better efficacy to help it compete with other therapies.
“There are definitely challenges with daily injections versus once-weekly injections. But I think what will really drive it (apraglutide) is the overall efficacy of the drug,” Ironwood CEO Thomas McCourt said on the conference call.
Ironwood added that the deal would add to its earnings from 2026, with successful commercialization of the treatment.
The disease’s treatable population is estimated to be about 18,000 adult patients in the United States, Europe and Japan, according to the companies.
Apraglutide belongs to a class of therapies known as GLP-2s, which includes Takeda Pharmaceutical’s Gattex which is already approved for short bowel syndrome and requires daily injections.