Ironwood Pharmaceuticals Bucks the Trends, Makes Big Bet on Drug for Millions
2/6/2013 7:47:06 AM
Ironwood Pharmaceuticals is a bit of throwback in biotech. And this is the year the Cambridge, MA-based company (NASDAQ: IRWD) will find out if some old-school sensibility, combined with new technology, can still pay off. While many of today’s biotechs aspire to become bite-size entities that are easily absorbed by Big Pharma acquirers, Ironwood has built its own sales force and staffed up to more than 500 people. While many others are focusing on drugs with sky-high prices for narrow patient populations, Ironwood and its partner Forest Laboratories (NYSE: FRX) are planning to spend as much as $300 million this year marketing a new pill for millions of people. While investors fixate on short-term earnings, Ironwood likes to talk about the potential of its golden goose all the way through the end of its patent life in 2026. “We’ve always talked about two simple, but very hard objectives. We think we can create new medicines and get them to patients. We have one now and it’s pretty amazing,” says Ironwood CEO Peter Hecht. “And we always try to stay focused on generating great returns for our owners. If we can do those things, we’ll earn the right to keep doing it.” The pressure is on this year for Ironwood to show that its long-term strategy is on the right track. For those new to the story, Ironwood won FDA approval back in August for an oral capsule called linaclotide (Linzess). It’s a treatment for chronic constipation and irritable bowel syndrome with constipation in adults. Ironwood and Forest estimate there are 10 million adults in the U.S. who suffer from chronic abdominal pain and constipation and see a doctor about their symptoms at least three times a year. Patients with irritable bowel syndrome with constipation and chronic constipation can use laxatives, but they don’t tend to use them chronically, because they tend to make abdominal pain worse. Ironwood’s drug, importantly, has shown that it can both improve bowel movements and relieve abdominal pain.