26 February 2019 - - Cyclerion Therapeutics, Inc. (Cyclerion), the planned spin-off of US-based commercial biotechnology company Ironwood Pharmaceuticals, Inc.'s (NASDAQ: IRWD) research and development arm, has entered into an agreement for a private placement of up to USD 175m, the company said.

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.

This 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.

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 said it 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.

Cyclerion Therapeutics expects to be a clinical-stage biopharmaceutical company harnessing the power of sGC pharmacology to discover, develop and commercialize breakthrough treatments for serious and orphan diseases.

It plans to advance its portfolio of five differentiated sGC stimulator programmes with distinct pharmacologic and biodistribution properties that are uniquely designed to target tissues of greatest relevance to the diseases they are intended to treat.

These programmes, each of which have important milestones anticipated in 2019, include olinciguat in Phase 2 development for sickle cell disease, praliciguat in Phase 2 trials for heart failure with preserved ejection fraction (HFpEF) and for diabetic nephropathy, IW-6463 in Phase 1 development for serious and orphan central nervous system diseases, and two late-stage discovery programs targeting serious liver and lung diseases, respectively.

Ironwood Pharmaceuticals is a commercial biotechnology company. It discovered, developed and are commercializing linaclotide, the US branded prescription market leader for adults with irritable bowel syndrome with constipation (IBS-C) or chronic idiopathic constipation.

Its pipeline priorities for linaclotide include a Phase IIIb trial evaluating its efficacy and safety on multiple abdominal symptoms, including abdominal bloating, pain, and discomfort in adult patients with IBS-C, as well as research into a formulation of linaclotide designed to relieve abdominal pain associated with IBS.

Ironwood is also advancing a pipeline of innovative product candidates in areas of significant unmet need, including persistent gastroesophageal reflux disease, and the product candidates that Cyclerion expects to advance following completion of the planned separation of Ironwood and Cyclerion into two independent, publicly-traded companies.

The separation is expected to be completed in early April 2019. Ironwood was founded in 1998 and is headquartered in Cambridge, Mass.