Ironwood Taps New CEO as It Prepares for Split -- WSJ

By Jonathan D. Rockoff

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 5, 2019).

An executive at British drugmaker AstraZeneca PLC has been tapped to lead Ironwood Pharmaceuticals Inc. after the biotech company reorganizes to focus on selling drugs for stomach diseases.

Mark Mallon is slated to join Ironwood, the company said, after a 24-year career at AstraZeneca, most recently overseeing strategy. He previously oversaw sales of AstraZeneca's big-selling heartburn medicines in the U.S., a business akin to Ironwood's.

Mr. Mallon will initially serve as an adviser to the Ironwood board and then take over from Ironwood CEO Peter Hecht after the company spins out a new firm developing drugs for rare diseases, Ironwood said. Ironwood has said it expects to separate during the first half of this year.

After the split, Dr. Hecht will become chief executive of the new company, which will be called Cyclerion Therapeutics Inc., Ironwood said.

The moves are designed to give Ironwood room to double down on its bet it can increase sales in the $29.9 billion global market for stomach drugs, while Cyclerion focuses on the development of a new class of drugs for rare conditions like sickle cell disease.

Cambridge, Mass.-based Ironwood was a darling on Wall Street when it launched its lead product treating irritable-bowel symptoms in 2013. The drug, called Linzess, was a novel kind of therapy, a biotech drug swallowed as a pill rather than injected like most such medication.

The drug's sales have grown steadily, surpassing $550 million for Ironwood and partner Allergan PLC during the first nine months of 2018.

Yet Ironwood hasn't turned a profit, as it invested much of the proceeds in efforts to discover other new drugs for stomach and other disorders. Its shares were flat in the early months of last year, before rising after an activist investor sought a seat on the board.

In May, Ironwood said it would split up.

Once at the helm, Mr. Mallon will be responsible for expanding sales of Linzess and bringing to market two other gastrointestinal drugs in the late stages of testing.

One of the experimental drugs is a next-generation heartburn treatment, while the second is for chronic intestinal pain.

Mr. Mallon has had relevant experience, having built up sales of heartburn remedies Prilosec and Nexium while leading AstraZeneca's U.S. gastrointestinal-drugs business. Another of his roles there was leading development of the company's stomach drugs in the U.S.

At Cyclerion, the company to be spun off, Dr. Hecht will try to bring to market experimental drugs, called sGC stimulators, targeting the nitric oxide molecules that play an important role in regulating key body functions like nerve function, tissue build-up and inflammation.

The group has two drugs in the middle stage, or phase 2, of testing.

One of the compounds is under development to treat sickle cell disease. Another experimental drug is in testing to treat a condition affecting diabetics, called diabetic nephropathy, that is a leading cause of kidney failure.

Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com

(END) Dow Jones Newswires

January 05, 2019 02:47 ET (07:47 GMT)

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