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Ironwood Amends Linzess Agreement with AstraZeneca in China

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Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) amended its collaboration agreement with UK-based pharma giant AstraZeneca (AZN - Free Report) related to development and commercialization of its gastrointestinal drug, Linzess (linaclotide), in China. Both companies had entered into an agreement in 2012.

Linzess is currently approved as a treatment for irritable bowel syndrome with constipation (IBS-C) and chronic idiopathic constipation in the United States and Japan. The drug was approved for IBS-C in China in January this year.

The deal gives AstraZeneca exclusive rights to develop, manufacture and commercialize Linzess in China. AstraZeneca will be responsible for all expenses related to Linzess in China. Ironwood will stop joint funding for development and commercialization of linaclotide in China and will no longer share profit from net sales of Linzess in that country.

Per the terms of the deal, Ironwood will receive up to $15 million from AstraZeneca, which includes $35 million in non-contingent payments to be paid in three installments through 2024. The remaining $90 million will be paid as commercial milestone payments upon achievement of certain net sales targets. Ironwood is also eligible to receive tiered royalties (up to 20%) on annual net sales of Linzess in China.

So far this year, shares of Ironwood have declined 7.1% against 7% increase for the industry.


Ironwood also amended its agreement with Japanese pharma company, Astellas Pharma, last month. Ironwood will receive $10 million and will be no longer responsible for the supply of linaclotide active pharmaceutical ingredient to Astellas for manufacturing of Linzess as per the amended deal.

Please note that Ironwood markets Linzess in the United States in partnership with Allergan (AGN - Free Report) . The amendments to the existing collaboration agreements for Linzess in international markets are part of Ironwood’s strategy to streamline its business and focus its efforts on the United States.

Ironwood is currently developing Linzess for treating multiple abdominal symptoms in adult patients with IBS-C. In June, the company announced positive top-line data from a phase IIIb study. It is also developing a delayed release version of Linzess, MD-7246, in a phase II study.

Notably, Linzess has performed encouragingly on the back of strong demand and expansion in new patient population and geographical regions. However, the drug may face rising competition going forward with other companies developing treatment for IBS-C. Earlier this month, Ardelyx, Inc. (ARDX - Free Report) received FDA approval for Ibsrela (tenapanor) as a treatment for IBS-C.


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Ironwood currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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