Cyclerion, Planned Ironwood Spin-off, Secures $175M in Private Offering

– Proceeds to advance Cyclerion’s soluble guanylate cyclase (sGC) programs targeting breakthrough treatments for serious and orphan diseases –

– Spin-off expected to be completed in early April 2019 –

Ironwood Pharmaceuticals, Inc. (Nasdaq: IRWD) today announced that Cyclerion Therapeutics, Inc. (Cyclerion) has entered into an agreement for a private placement of up to $175 million. The offering includes commitments from existing Ironwood shareholders, new investors, and certain members of future Cyclerion management. Final proceeds from this offering are expected to support Cyclerion’s sGC stimulator portfolio for at least two years, including four clinical data readouts expected in the second half of 2019. The financing transaction is anticipated to close in early April, immediately following the completion of Ironwood’s planned tax-free spin-off of Cyclerion to Ironwood shareholders.

Peter Hecht, Ironwood’s current chief executive officer (CEO) and expected CEO of Cyclerion following the planned spin-off, stated, “We are grateful for the strong support from the outstanding and experienced group of investors who are participating in this financing. We look forward to launching Cyclerion and Ironwood less than one year since our initial announcement of the separation, and to advancing our efforts to create innovative new medicines for patients and generate value for our shareholders.”

The amount raised in the private placement is subject to certain potential reductions to preserve the tax-free nature of the spin-off. The number of shares issued and price per share will be determined at the time of the separation and pursuant to the terms of the purchase agreement governing the investment.

It is expected that there will be no ongoing funding between Ironwood and Cyclerion following the separation, other than certain shorter-term transition and other services. Ironwood is not expected to retain equity in Cyclerion, and is not investing in the private placement.

Ironwood plans to complete the spin-off of Cyclerion (including the closing of the private placement) in early April 2019, subject to customary conditions, including effectiveness of the Form 10, a favorable opinion with respect to the tax-free nature of the transaction, and final approval of Ironwood’s Board of Directors.

Credit Suisse and J.P. Morgan are serving as joint placement agents for the Cyclerion offering.

https://www.marketscreener.com/IRONWOOD-PHARMACEUTICALS-5933097/news/Ironwood-Pharmaceuticals-Cyclerion-the-Planned-R-D-Spin-off-of-Ironwood-Pharmaceuticals-Secures-28071011/