IRWD - Ironwood falls 15% on deal to buy VectivBio for $17/share cash

2023-05-22 07:22:48 ET

• Ironwood Pharmaceuticals ( NASDAQ: IRWD ) fell ~15% in the pre-market Monday after the company focused on gastrointestinal (GI) products agreed to acquire the Swiss biotech VectivBio Holding AG ( NASDAQ: VECT ) for $17.00 per share in an all-cash deal. VectivBio ( VECT ) added ~39% in reaction.
• The bid implies a total consideration of ~$1B excluding VectivBio cash and debt. The offer price indicates a premium of ~80% on VECT stock based on the volume-weighted average share price for the past 90 trading days.
• In connection with the transaction, Orbimed, Forbion and Versant Ventures, and other shareholders representing ~29% of VECT’s ownership have agreed to tender their shares in an upcoming tender offer IRWD plans to begin.
• VectivBio is a clinical-stage biotech focused on rare conditions such as Short Bowel Syndrome with Intestinal Failure (SBS-IF) and acute Graft versus Host Disease (aGvHD).
• Its lead asset, apraglutide, targeted at SBS-IF, is expected to generate topline Phase 3 data before the year-end.
• The deal is expected to complete in H2 2023, and following the close, Ironwood ( IRWD ) plans to update its full-year 2023 adjusted EBITDA financial guidance.

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