AstraZeneca, Ironwood partner on IBS drug in China

British drug giant AstraZeneca PLC and a small U.S. drug developer, Ironwood Pharmaceuticals Inc., said Tuesday that they are teaming up to develop and then market Ironwood's new drug for irritable bowel syndrome in China.

The drug, called linaclotide, was approved in August by the U.S. Food and Drug Administration and is the first in a new class of medicines. Marketed here under the brand name Linzess, it is Ironwood's only approved product.

Ironwood, based in Cambridge, Mass., applied to China's State Food and Drug Administration in May for permission to do a late-stage study of the drug in adult patients with the form of irritable bowel syndrome characterized by abdominal pain and constipation, rather than the form causing frequent diarrhea.

Ironwood and AstraZeneca, which is based in London, will jointly oversee development and marketing of the drug in China, although AstraZeneca will have primary responsibility for local operations there.

The drug works by increasing concentrations in the intestine of a substance that increases secretion of intestinal fluid and speeds movement of food through the gastrointestinal tract, causing more frequent bowel movements. In prior patient studies, the drug's most common side effects included diarrhea, abdominal pain and bloating, flatulence, headache, sinus and upper respiratory tract infections and the viral form of gastroenteritis, an inflammation of the stomach and intestines better known as stomach flu.

The agreement calls for AstraZeneca to give an upfront payment of $25 million to Ironwood. The companies will split net profits and losses in China on the drug. Ironwood will also be eligible for $125 million in milestone payments if it achieves certain sales targets.

The companies also agreed to have Ironwood's roughly 160 sales representatives promote AstraZeneca's blockbuster treatment for severe heartburn, Nexium, to gastroenterologists and primary care doctors in the U.S.

Ironwood's head of marketing and sales, Thomas McCourt, noted that a large percentage of adults who have irritable bowel syndrome with constipation or chronic constipation of unknown cause also may suffer from severe heartburn, known as gastroesophageal reflux disease, or GERD.

Ironwood shares slipped 23 cents, or 1.8 percent, to $12.27 in midday trading Tuesday. Its shares have traded in a 52-week range of $10.65 to $15.92.