Blockbuster dreams quashed, Ironwood drops AstraZeneca's $1.3B gout drug disaster
AstraZeneca paid $1.3 billion to buy the experimental gout drug lesinurad. They handed over US rights to Ironwood $IRWD for much, much less two years ago — after it was approved on mixed efficacy and safety data. And now the Cambridge, MA-based biotech is punting it back after watching the treatment flounder on the market.
Ironwood dismissed lesinurad (Zurampic) in its Q2 report. CEO Peter Hecht summed it up this way:
After initiating the lesinurad market tests in early 2018 and assessing the results in July, we have decided to terminate our licensing agreement with AstraZeneca in its entirety. This action is not taken lightly, but it is an important decision that we believe enables us to allocate capital to the highest return opportunities and drive growth. We are working to maintain appropriate availability of lesinurad for patients and physicians during the termination period.
The drug — once a Hecht favorite before activist investor Alex Denner started to press for a revamp — contributed only $1.1 million in Q2 topline revenue out of the $81 million recorded at Ironwood. Now Hecht is exiting out of his $265 million deal with AstraZeneca as Ironwood looks to spin off its R&D operations into a new company in the first half of 2019 in a quest to become commercially successful.
Ironwood is also laying off 125 staffers in the reorganization, most sales staff that had been devoted to the launch failure. The biotech’s shares were down about 4% in early afternoon trading.
There’s no immediate word what AstraZeneca plans to do with lesinurad.
The drug fell short of hitting all its primary endpoints in a slate of three late-stage studies, and a slight minority of 6 of the FDA’s expert advisers fretted that the drug’s safety profile did not merit an approval, leaving AstraZeneca with a narrow one-vote margin in its favor. (The advisory group voted 10 to 4 for an approval.) And those safety concerns were also reflected in the agency’s internal review. Nevertheless, the FDA approved it in late 2015.
None of that will improve the drug’s profile for any prospective partner. And now that it’s a bust on the market, the therapy — once tapped as a blockbuster after being shoved forward as a top late-stage prospect — is even more tarnished.