Shares of Ironwood Pharmaceuticals collapsed Thursday on mixed results for its gastrointestinal disease treatment. The biotech stock erased a 38% gain over three months.
Ironwood tested its drug, apraglutide, in patients with short bowel syndrome and intestinal failure. In this condition, the body can't absorb enough nutrients from food because part of the small intestine is missing. Patients often require parenteral support, also known as a feeding tube.
Though the study met its primary goal — lowering the volume of nutrients given through a feeding tube after 24 weeks — two secondary goals of the study failed.
In response, Ironwood stock plummeted 37.6% to 9.43 on Thursday. Shares of the biotech stock hit their lowest point since November. That also reversed a breakout. Ironwood Pharmaceuticals stock had been near a profit-taking zone after breaking out of a consolidation with a buy point at 12.66, according to MarketSmith.com.
Ironwood Pharmaceuticals Plans To Ask For Approval
Ironwood assessed the results in patients who still have some portion of their colon intact — known as colon-in-continuity. This is a less severe form of the disease. Other patients require a stoma, a surgically made hole in the abdomen that allows waste to be removed in a collection bag.
But after 48 weeks, apraglutide failed to make a statistically significant difference among colon-in-continuity patients on two marks. Just seven out of 56 patients no longer needed their feeding tubes. There also wasn't a marked improvement in days patients didn't need their feeding tubes.
Apraglutide was generally well tolerated and safety was in line with expectations. Ironwood is now planning to ask regulators to approve apraglutide.
Still, Ironwood Pharmaceutical stock opened sitting at its 200-day moving average. The biotech stock hasn't been at that point in two months.
Shares had run up since December, earning a Relative Strength Rating of 94. This means shares have performed in the top 6% of all stocks over the last 12 months, according to IBD Digital.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
