Buckle up: Biotech board activist Alex Denner is out to shake things up at Ironwood
The change master of biotech is knocking at Ironwood Pharmaceuticals’ front door. And he wants in with plans to stay for awhile.
Alex Denner, known for forcing out old CEOs and forcing through new buyouts, has now set his sights on the longtime Boston/Cambridge player guided by founding CEO Peter Hecht, who launched the company 20 years ago with a plan for the long haul.
In an unusual move, Ironwood put out word of Denner’s move to join the board in a press release Monday. And the company took the opportunity to pointedly praise the board Hecht has already assembled, which includes 8 independent directors on the 9-member group.
According to the release, Ironwood now wants to get some feedback on the move from investors, noting that the Sarissa Capital chief has been by for one visit and that they hope constructive talks will continue. Its stock $IRWD shot up 10% as investors eagerly anticipated a changeup.
“I hope that we’re going to continue to have a pleasant and constructive conversation, as I believe we were having,” Denner told CNBC. “To the extent that they state in their press release that they’re concerned with what investors want, I’ve been told that more value has been created for Ironwood shareholders today than in any single day in history.”
That sounds at least slightly skeptical.
Behind the barbed pleasantries, though, it’s clear that Denner is out to shake things up at Ironwood, a company best known for its franchise drug Linzess and a pipeline of therapies in the same space. Several analysts think the company could do better on the stock price, and Denner is all about value creation — with a big appetite for profiting from turbulence.
Ironwood gained an approval for Duzallo, a combo therapy that matches lesinurad and allopurinol in one pill, last summer. But Geoff Meacham at Barclays and others questioned Hecht’s revenue projections at the time. The biotech has also disappointed analysts with data on IW-3718 for uncontrolled GERD, which were positive but fell short of Hecht’s enthusiastic projection.
Add it up, and Denner can count on some lingering frustrations to help add to his clout at Ironwood — if he’s successful at this new play.
He’s certainly not reluctant to use his influence to maximum effect.
As Carl Icahn’s right hand man, Denner steered Biogen in a new direction, forcing out Jim Mullen and bringing in George Scangos more than 5 years ago. Now that company is expected to steer through a new stretch of reengineering as a new CEO looks over the pipeline and its prospects. Denner — who now runs his own shop at Sarissa — also forced the sale of Ariad to Takeda and more recently played a direct role in seeing Bioverativ go to Sanofi. Denner was Sanofi’s first stop on that deal, and was always the most likely to see the upside in a takeover tied to a big premium. And he recently took control of The Medicines Co. $MDCO amid considerable buzz.
What’s next for Ironwood?
We’ll see. But business as usual is over for now.
Image: Alex Denner. CNBC via GETTY