Ironwood-Forest Irritable Bowel Therapy Wins FDA Approval

Ironwood Pharmaceuticals Inc. and Forest Laboratories Inc. won U.S. regulatory approval of their linaclotide treatment for irritable bowel syndrome with constipation.

The therapy was also approved for chronic constipation, the Food and Drug Administration said today in a statement. As many as 11 million Americans have irritable bowel syndrome with constipation, a disorder that causes abdominal pain, according to Cambridge, Massachusetts-based Ironwood.

Linaclotide will compete with Takeda Pharmaceutical Co.’s Amitiza, which generated 18.7 billion yen ($237.6 million) for the Japanese drugmaker in the 12 months ended in March. Peak sales for linaclotide may reach $1.35 billion, Edward Nash, an analyst with Cowen & Co., said in an Aug. 28 interview. The drug may help reduce patients’ pain, an important element in the treatment of IBS-C, he said.

“That’s the really big differentiator for the drug,” Nash said by telephone. “At the end of the day, why is a patient going to even come to the doctor? Yes, it’s because they’re constipated or have diarrhea, but it’s the pain associated with that that’s so significant.”

Linaclotide was developed by Ironwood with New York-based Forest Labs, and the companies will co-promote the drug in the U.S. Ironwood licensed the drug in Europe to Barcelona, Spain-based Almirall SA, and to Tokyo-based Astellas Pharma Inc. for several Asian countries.

Sales Schedule

Ironwood and Forest will start selling the drug in the fourth quarter of this year, said Ironwood Chief Executive Officer Peter Hecht.

The FDA approved the drug without a restriction on how long patients should use it for, which could help sales, he said. “With that in the label, and the demonstrated pain relief, we think we can do an effective job educating patients and physicians,” Hecht said in a telephone interview today.

Forest rose 1.1 percent to $35.04 at 4 p.m. New York time. Ironwood’s shares fell 1.9 percent to $12.42.

Biotechnology stocks typically gain prior to regulatory approval and then decline subsequently, as some investors take profits and seek to avoid the stumbles that companies often experience selling their new therapies for the first time.

Linaclotide was shown in studies to help alleviate abdominal pain and symptoms of constipation. The most common side effect was diarrhea, which might be expected “as a side effect for treating constipation; you’re going to overshoot the mark,” Nash said.

Takeda’s Amitiza is co-marketed with Sucampo Pharmaceuticals Inc. Corey Davis, an analyst with Jefferies & Co. in New York, said that Takeda’s drug won’t pose much competition for linaclotide.

“It’s barely even a drug,” Davis said in a telephone interview. “The side effects are so severe that this is going to blow it away.” The approval had been expected by investors, who were selling the stock on the news, he said.

Davis said linaclotide sales may reach $2 billion. “This is going to be one of the most important drugs in the entire industry in the next couple years,” he said.

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