Ironwood Moves into China Via $150M AstraZeneca Deal
By Catherine Shaffer
AstraZeneca plc will be Ironwood Pharmaceuticals Inc.'s development and commercialization partner for linaclotide in the vast China territory. Ironwood filed a clinical trial application with China's State Food and Drug Administration for a Phase III study of linaclotide in irritable bowel with constipation (IBS-C).
The companies will share the responsibilities and profits of advancing the drug in China, with London-based AstraZeneca taking a 55 percent share of net profits through a specified milestone, and 50 percent thereafter. Ironwood will receive $25 million up front and will be eligible for $125 million in commercial milestone payments related to sales targets.
"This is a next step toward the goal of getting access to linaclotide across the globe. China is a market where a lot of patients are suffering," Michael J. Higgins, Ironwood's chief operating officer and chief financial officer, told BioWorld Today. Linaclotide is marketed in the U.S. under the trade name Linzess.
Many biotech companies choose just one partner to license rights outside the U.S., choosing to focus their own efforts within the U.S. Ironwood, which is based in Cambridge, Mass., has pursued a strategy for seeking out an appropriate partner for each ex-U.S. territory.
"What we've always tried to do is find the best partner for any territory we're looking into," said Jim O'Mara, vice president of corporate development for Ironwood. "By doing that, we've had to eliminate certain territories from discussion."
That strategy, O'Mara said, returns greater value to Ironwood, as compared with the more typical, one-parter-for-the-whole-world approach.
"In every case, every partnership we have, we've structured the deals in a way, we believe, that captures some of the significant long-term value," O'Mara said.
Ironwood's other partners include Forest Laboratories Inc., of New York; Alimirall SA, of Barcelona, Spain; and Astellas Pharma Inc., of Tokyo.
Ironwood and Forest inked their potential $330 million deal on linaclotide in 2007, when Ironwood was known as Microbia Inc. The firms split U.S. development costs and profits, and Ironwood stands to receive royalties from sales in Mexico and Canada, where Forest holds exclusive rights to the compound. Ironwood is also eligible to receive an $85 million milestone payment upon approval. (See BioWorld Today, Sept. 18, 2007.)
Almirall is Ironwood's European partner. That $95 million deal included $40 million up front to Ironwood and a near-term equity milestone of $15 million. Ironwood stands to earn up to $40 million in milestone payments, plus escalating royalties on product sales. (See BioWorld Today, May 5, 2009.)
For some other Asian territories, including Japan, Indonesia, Korea, the Philippines, Taiwan and Thailand, Ironwood is partnered with Astellas. In that deal, dating to 2009, Astellas paid $75 million up front with precommercial milestones on linaclotide, plus escalating royalties. (See BioWorld Today, Nov. 11, 2009.)
Ironwood's shared profits strategy is another departure from the typical deal structure. "In this type of structure, it keeps both parties focused on the vision, and the strategy to get there. In a royalty deal, you're handing your product to a partner and trusting that they're going to do the right thing at the end of the day," O'Mara said.
That means more work, but according to O'Mara the work is worth it. "As we've gone through our partnerships, it's clear we have to spend more time and energy focusing on collaboration and partnerships. We think it's a core asset we bring to the table," he said.
In addition to the terms surrounding linaclotide, Ironwood and AstraZeneca also agreed that Ironwood's sales force would promote AstraZeneca's Nexium (esomeprazole magnesium) in the U.S. for gastroesophageal reflux disease (GERD).
Ironwood said the sales agreement made sense because a large percentage of adults with IBS-C also have GERD, so sales representatives who already have relationships with gastroenterologists will be able to offer both therapies.
Linaclotide is an agonist of guanylate cyclase-C (GC-C) formulated as an oral capsule for once-daily dosing. High intracellular cGMP is believed to stimulate secretion of intestinal fluid, accelerating gastrointestinal transit and frequency of bowel movements.
Increasing extracellular cGMP may decrease the activity of pain-sensing nerves, bringing relief for intestinal pain associated with IBS, according to Ironwood.
Ironwood has found that IBS has equal prevalence all over the world, and in each of the territories it's examined, including the U.S., Europe, China and South America, in spite of different diets and lifestyles.
The market changes in different territories, however. In the U.S., there is an approved product available, Amitiza (lubiprostone), by Sucampo Pharmaceuticals Inc. and Abbott.
Lubiprostone is a laxative, and does not share linaclotide's mechanism of action. It is not available in China, and that lack of any approved product at all distinguishes the Chinese market from the U.S. market.
"There is nothing to help them with the pain they suffer from," Higgins said.
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