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Life Sciences Roundup

Ironwood chief executive breaks silence on IPO

Xconomy.Com / March 29, 2010

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Peter Hecht is finally able to speak about Ironwood Pharmaceuticals Inc.’s landmark initial public offering, breaking the silence required under quiet-period rules. The Cambridge company’s chief executive gave Xconomy a front-row perspective.

Based on the promise of its lead drug, linaclotide (for chronic constipation), Ironwood raised $203 million in its maiden public offering last month — a rare feat for biotechs nowadays. Hecht shed some light on how Ironwood succeeded.

He began by hitting familiar notes on his philosophy, mainly that Ironwood takes a long-term view and works first in investors’ interest. Those may sound like cornerstones of any business strategy, but the way Hecht and his team have put them into practice has made Ironwood one of only a handful of Massachusetts biotechs worth more than $1 billion.

Ironwood, Hecht said, was fortunate to have already met many of the major institutional investors before it launched the IPO road show last year. Four of the large public equities buyers that participated were previous investors in the company, which had raised more than $300 million in private financings before filing in November to go public.

“They knew what they were getting into,’’ Hecht said.

And in the past three years, Ironwood has found partners to help commercialize linaclotide: New York-based Forest Laboratories; Spain’s Laboratorios Almirall; and the Japanese drug maker Astellas Pharma.

Ironwood’s main attraction is linaclotide. The company reported late last year that the drug passed two pivotal trials as a treatment for chronic constipation; in the second half of this year Ironwood is expected to deliver results of two more trials.

One big priority was to find new backers committed to hanging onto their shares long enough for the company to achieve some of its goals over the next five years, Hecht said. The IPO also boosted the cash stockpile to $320 million, he said, enough to fund the company for another five years.

Still, Ironwood had to overcome a hurdle or two.

After testing the appetite for a price range for the IPO of $14 to $16 per share, the company ultimately priced it at $11.25. Hecht said hitting the $14-$16 target was less important than finding new long-term investors. -- RYAN MCBRIDE

Epizyme Corp., a Cambridge start-up focused on the hot field of epigenetics, has recruited a new chief executive and a new chief deal maker, Robert Gould, who quit a big job at the Broad Institute of MIT and Harvard.

Gould has served on the board at Epizyme since its founding two years ago, as it has grown to 20 employees and closed $40 million Series B financing. (It has now raised a total of $54 million from New Enterprise Associates, MPM Capital, Kleiner Perkins Caufield & Byers, Bay City Capital, Astellas Venture Partners, and Amgen Ventures.)

He is replacing founding CEO Kazumi Shiosaki.

Epizyme has also brought in Jason Rhodes, a former Alnylam Pharmaceuticals vice president, to lead deal-making activities.

Both executives spoke of the huge opportunity for Epizyme in epigenetics, which involves turning on and off certain genes. Epizyme is in early stages of pursuing small-molecule drugs to block enzymes believed to be involved in cancer, called histone methyltransferases. Its research could also lead to drugs for other diseases, where it will focus its initial efforts.

It’s got a local rival in Constellation Pharmaceuticals, which is also doing epigenetics research. -- RYAN MCBRIDE

SmartCells, a Beverly company developing a daily, self-regulating injection for treating diabetes, has raised $1.75 million of a planned $4 million equity offering, according to documents filed with the Securities and Exchange Commission. The company, whose SmartInsulin product is in preclinical testing, declined to comment on what round the funding represents. In July, SmartCells completed the sale of $1.15 million in convertible debt, according to its website.

* * *

IntelligentMDx, a Cambridge maker of molecular diagnostic tests, has garnered emergency use authorization for its product for detecting the H1N1 virus. The Food and Drug Administration clearance allows the IntelligentMDx diagnostic assay to be used while the flu outbreak is still in emergency status, but that expires April 26.

* * *

Jackson Laboratory, a nonprofit provider of genetic research and lab mice in Bar Harbor, Maine, said chief executive Richard Woychik is stepping down. He told the board he is open to staying on while the firm seeks a replacement. The biotech has a total of 1,318 employees in Maine and Sacramento, Calif., and a budget of $170 million for the current fiscal year.

This report was compiled by the editors of Xconomy, an online news website focused on the business of technology and innovation. For more New England coverage, visit www.Xconomy.com/boston.