Ironwood to buy VectivBio for $1.15 bln to boost digestive disorder drugs portfolio

May 22 (Reuters) – Ironwood Pharmaceuticals Inc (IRWD.O) said on Monday it will acquire Switzerland-based drug developer VectivBio Holding AG (VECT.O) for $1.15 billion to boost its portfolio of experimental digestive disorder drugs.

Ironwood will pay $17 per share for VectivBio, a premium of about 43% to VectivBio’s last close.

VectivBio shares were up nearly 40% in premarket trade, while Ironwood stock was down 2.7%.

As part of the deal, Ironwood will acquire VectivBio’s experimental therapy apraglutide, which Ironwood says could reach $1 billion in peak net sales.

Apraglutide is currently being tested in a late-stage study for treating a type of short bowel syndrome, where the body is unable to properly absorb nutrients and can be potentially fatal.

The disease has an estimated addressable population of 18,000 adult patients in the United States, Europe and Japan, according to the companies.

Through the deal, expected to close in the second half of 2023, Ironwood is seeking to expand its drug portfolio, which at present is dependent on bowel disease drug Linzess.

The company has licensed Linzess to AbbVie Inc’s (ABBV.N) Allergan. The drug had U.S. net sales of $250.2 million in the first quarter of this year, according to AbbVie.

Reporting by Raghav Mahobe in Bengaluru; Editing by Janane Venkatraman

Our Standards: The Thomson Reuters Trust Principles.

Source: Reuters