404 pm Ironwood Pharma announces $150 mln public offering of common stock (IRWD): IRWD) today announced that it has commenced a $150 million underwritten public offering of its Class A common stock. All ofthe shares are being offered by Ironwood.
•Co intends to use the net proceeds from this offering to support the commercialization of LINZESS (linaclotide) in the U.S. and to fund linaclotide and other development opportunities to advance its strategy to grow a leading gastrointestinal company, in addition to general corporate purposes.
•J.P. Morgan and BofA/Merrill are acting as joint book running managers and as representatives of the underwriters for the offering.
Not surprised. They have to make massive inroads with primary care docs. It's very expensive and requires large sales force. This is another reason SGYP will be sold this year, no point in investing in a phase 3 and massive sales force. Let big pharma with an established field force go after it!!
I'd see this as IRWD getting out in front of SGYP data release more than anything else. IRWD ended 2013 with $198mm in cash and burned $42mm in Q4-2013 ($168mm per year run rate). I know they are planning their direct to customer advertising campagin for 2014, but it is hard to see how they would need an additional $180mm above their Q4 run rate for this year (198-168+150=180). I would have to expect they are assuming a more challenging environment once SGYP data is released.
This is definitely not an indication that sales for IRWD are bad. Sales were about $120mm for 2013 and should pick up nicely once they start direct to customer advertising.
Perhaps you're right...it wouldn't be a big surprise to me if IRWD was afraid of Plecanotide's success and is doing everything it can to steal the limelight from SGYP. Frankly, it seems a bit of a stupid move on IRWD's part as the marketplace is big enough for both SGYP and IRWD to co-exist...at least until SGYP sells the business to big pharma:) and I doubt IRWD is gonna scare any of the big boys much...