Ironwood Pharmaceuticals Inc. ( IRWD - Snapshot Report ) recently commenced a phase I study in the US with its anti-anxiety candidate, IW-2143 (BNC210). The company informed its licensing partner, Bionomics Limited, regarding the development.

IW-2143’s safety and pharmacokinetics will be evaluated in the study. Single and multiple doses of the candidate will be used.

Ironwood Pharma has a collaboration, research and license agreement with Bionomics for IW-2143. Under the agreement signed in Jan 2012, Ironwood Pharma is responsible for the global development and commercialization of any resulting products. The company made an upfront payment of $3 million and will fund clinical studies. Besides this, Ironwood Pharma is liable to make payments on the achievement of development and regulatory milestones. Once IW-2143 is successfully commercialized, the company will pay royalties on product sales.

With the phase I study in progress, Bionomics could receive a $2 million milestone payment. The anxiety disorder market represents significant potential with about 40 million Americans suffering from anxiety every year. Although several treatments are available, the market is characterized by a significant unmet need.

We are pleased to see Ironwood Pharma focusing on the development of its early-stage candidates. However, the company is better known for Linzess (linaclotide), its once-daily treatment for adult men and women suffering from irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC).

Linzess gained FDA approval in late Aug and was launched in the US in Dec. Meanwhile, EU approval came in Nov under the trade name Constella. While Ironwood Pharma’s collaboration partner for Linzess in the US is Forest Labs ( FRX - Analyst Report ) , the company’s EU partner is Almirall, SA. Astellas Pharma ( ALPMY ) is collaborating with the company for the product in Japan and a few other Asian countries.

We expect investor focus to remain on the successful commercialization of Linzess. We currently have a Neutral recommendation on Ironwood Pharma, which carries a Zacks #2 Rank (Buy). Astellas carries a Zacks #1 Rank (Strong Buy).