(Reuters) - Ironwood Pharmaceuticals Inc IRWD.O said on Tuesday it will cut about 100 jobs after its therapy to treat digestive disorder refractory gastroesophageal reflux failed to significantly reduce heartburn severity in a late-stage trial.
Shares of the drugmaker fell 8% to $8.80, after the company also said it would discontinue development of the treatment, IW-3718.
Ironwood expects to incur one-time costs of about $10 million to $12 million in connection with discontinuing trial and planned reduction in workforce.
It said it will focus on growth of its constipation drug, Linzess, marketed by AbbVie Inc ABBV.N. Linzess is on track to bring in more than $1 billion in sales, Ironwood reiterated on an investor call.
Even in the face of the COVID-19 pandemic, the company said it was seeing steady growth in Linzess. Its sales increased 5% to $219 mln in the second quarter this year.
“As part of this workforce reduction and in light of recent changes in market dynamics related to the COVID-19 pandemic, Ironwood plans to restructure its commercial organization,” the company said.
It said it plans to implement a restructuring that will affect both field-based and home-office employees.
The planned reduction of nearly 35% of the company’s workforce is expected to be completed in the first quarter of 2021.
These changes will result in total cost savings of greater than $95 million, the company said.
Reporting by Dania Nadeem in Bengaluru; Editing by Shinjini Ganguli
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