(Reuters) - Ironwood Pharmaceuticals Inc (O:IRWD) said on Tuesday it will cut about 100 jobs after its therapy to treat digestive disorder refractory gastroesophageal reflux failed to significantly reduce heartburn severity in a late-stage trial.
Shares of the drugmaker slumped 18% to $7.80 before the bell, after the company also said it would discontinue development of the treatment, IW-3718.
The company expects to incur one-time costs of about $10 million to $12 million in connection with discontinuing trial and planned reduction in workforce.
"As part of this workforce reduction and in light of recent changes in market dynamics related to the COVID-19 pandemic, Ironwood plans to restructure its commercial organization," the company said.
It said it plans to implement a restructuring that will affect both field-based and home-office employees.
The planned reduction of nearly 35% of the company's workforce is expected to be completed in the first quarter of 2021.
These changes will result in total cost savings of greater than $95 million, the company said.