Gastrointestinal (GI) focused Ironwood Pharmaceuticals (NASDAQ:IRWD) has agreed to acquire VectivBio (NASDAQ:VECT), a clinical-stage biopharmaceutical company, in a significant deal worth $1 billion. Under the terms of the agreement, each share of VectivBio will be acquired for $17 in cash. The market has already begun to react, with VectivBio’s stock experiencing a notable surge subsequent to the announcement of the acquisition.
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Switzerland-based VectivBio is working on developing treatments for conditions such as Short Bowel Syndrome with Intestinal failure (SBS-IF) and acute Graft versus Host Disease. The company’s lead product candidate, apraglutide is in Phase 3 development for the treatment of SBS-IF with topline data expected by the end of this year.
The acquisition of Vectiv further boosts Ironwood’s development pipeline and apraglutide could be a potential $1 billion opportunity (peak sales) for the company.
Ironwood shares have corrected nearly 14.7% so far this year while short interest in the stock still remains elevated at about 12.6% at present.
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