Two years after a rebuffed activist attack, Alex Denner finally gets his seat on Ironwood's board
Faced with an insurgency from the activist investor Alex Denner in 2018, Ironwood Pharmaceuticals mounted a vocal and ultimately successful campaign to keep the former Carl Icahn protégé off their board.
Now, two years later and with the company facing a restructuring and major questions about its board, Ironwood has issued a short and surprising press release: Alex Denner is joining the board.
“Ironwood has developed a strong relationship with Alex over these past few years, as Sarissa has become one of our largest shareholders,” Ironwood said in an emailed statement. “Alex knows Ironwood well, and the Board believes he brings to the company an important shareholder perspective as well as broad healthcare-industry knowledge and experience as a board director in overseeing the operations of healthcare companies.”
Much has changed for Ironwood since Denner first took aim at the company, including the executive team that pushed back the 2018 attack. Ironwood has since appointed a new CEO, COO and president. Meanwhile, after two failures wiped out their pipeline, the company faces major strategic questions about how to turn its one approved drug into a blockbuster and whether to bring in new assets.
In the statement, Denner, who manages Sarissa Capital, added only: “I look forward to working with my fellow board members to create value at Ironwood.”
Although Ironwood successfully kept the Icahn disciple off their board, they followed one of the key changes Denner proposed, namely splitting the company into two new entities: Ironwood and Cyclerion. The former would focus on commercial and two big late-stage assets, the latter on the early-stage pipeline.
As part of that move, Ironwood CEO and co-founder Peter Hecht went to lead Cyclerion, while former AstraZeneca executive Mark Mallon came in to run the old company.
Neither biotech, though, has fared well since their divorce. This year, Ironwood axed the only two experimental drugs in its pipeline after both failed late-stage trials, leaving them with the approved GI drug Linzess and a decidedly commercial strategy. Cyclerion, meanwhile, axed two of its own programs after early studies came up bust.
After the second missed trial, Mallon announced they would lay off 100 employees and, faced with questions from investors, said their main focus was turning Linzess from a $150 million per year drug into a $1 billion per year drug. He added they could scout for late or commercial-stage GI assets.
“We’re confident that there are going to be interesting opportunities,” he said. “But the first priority remains Linzess and generating profit. ”