Ironwood Pharmaceuticals Announces Major Restructuring Amid Disappointing 2025 Guidance

Ironwood Pharmaceuticals, a Boston-based biopharmaceutical company, has unveiled a significant restructuring plan that includes cutting half of its workforce. The move comes as the company's 2025 revenue guidance falls short of analyst expectations, prompting a renewed focus on its lead drug candidate, apraglutide.

Workforce Reduction and Financial Outlook

Ironwood announced on Wednesday that it will reduce its workforce by approximately 50%, primarily affecting employees in its field force. The company expects this restructuring to result in annual operating expense savings of $50 million to $60 million, with a projected $40 million to $45 million benefit to yearly profits. However, Ironwood anticipates incurring one-time restructuring charges of $20 million to $25 million.

The restructuring announcement coincided with the release of Ironwood's 2025 revenue guidance, which projects earnings between $260 million and $290 million. This range falls significantly below the $340 million consensus estimated by analysts, according to SeekingAlpha. The disappointing forecast led to a 7% drop in Ironwood's stock price during after-hours trading on Wednesday.

Strategic Focus on Apraglutide Development

As part of its restructuring efforts, Ironwood is discontinuing the Phase II exploratory STARGAZE trial of apraglutide for graft-versus-host disease. This decision allows the company to concentrate its resources on advancing apraglutide through its ongoing Phase III trial for short bowel syndrome (SBS) with intestinal failure and complete a rolling New Drug Application (NDA) submission.

Apraglutide, an investigational GLP-2 analog, has shown promising results in treating SBS, a disorder that often requires patients to receive ongoing intravenous nutrients and fluids. In February 2024, the Phase III STARS trial demonstrated a 25% reduction in the need for parenteral support in SBS patients treated with apraglutide, compared to a 12% reduction in the placebo group.

CEO Tom McCourt emphasized the necessity of these changes, stating, "These changes are necessary to continue to progress apraglutide and maintain our profitability and cash flow goals."

Recent Clinical Data and Regulatory Progress

Ironwood recently presented additional data from the open-label extension study of the STARS trial, showing that more patients were able to discontinue parenteral support with prolonged apraglutide exposure. This data further supports the potential efficacy of the drug in treating SBS.

The company has initiated a rolling NDA submission for apraglutide and expects to complete the filing in the third quarter of this year. This regulatory milestone, coupled with the positive clinical data, underscores Ironwood's commitment to bringing apraglutide to market as a potential treatment for patients with SBS and intestinal failure.