Ironwood Pharmaceuticals, Inc. (NASDAQ: IRWD) announced today that it is reducing headcount by approximately 10 percent to align its workforce with its strategy to grow a leading gastrointestinal (GI) therapeutics company.
As detailed at Ironwood’s Investor Day in December 2013, the Company’s strategy is driven by four priority growth platforms: 1) maximizing the potential of LINZESS ® (linaclotide), both by building on its successful launch for adult patients with irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation (CIC) and by exploring the potential utility of linaclotide in additional indications and populations where there exists large unmet need; 2) leveraging Ironwood’s commercial capabilities; 3) advancing a pipeline of multiple GI and guanylate cyclase clinical development programs; and 4) continuing to operate productively and efficiently by prioritizing investments in key value drivers. As maximizing LINZESS is core to Ironwood’s strategy, Ironwood’s field-based sales force and medical science liaison team are excluded from the workforce reduction.
“We are grateful to all of our employees for their passion and hard work in bringing LINZESS to adult patients; we’ve now developed significant expertise in gastrointestinal diseases and in guanylate cyclase pharmacology, providing us with a strong foundation and promising path forward as we continue to build a leading GI company,” said Peter Hecht, chief executive officer of Ironwood. “While it is difficult to part with any of our talented colleagues, we believe this action effectively aligns our resources with our strategy and positions us to maximize value both for patients and for our fellow shareholders.”
Ironwood estimates that it will incur aggregate charges of approximately $4.0 million to $4.5 million for severance and benefit costs in connection with its reduction in workforce, of which approximately 85 percent to 95 percent are expected to result in cash expenditures. The reduction in workforce is expected to be complete during the first quarter of 2014. The Company continues to focus on driving growth through productive and efficient operations, and expects continued reductions in net cash used in operating activities in 2014 through continued revenue growth and expense management. More information regarding the reduction in workforce is available in the Form 8-K Ironwood filed today with the Securities and Exchange Commission (SEC). The archived webcast of Ironwood’s December 2013 Investor Day is available for replay on Ironwood's website until March 12, 2014.