Ironwood dumps AstraZeneca gout drug Zurampic—and lays off 125 in the process

Zurampic, a drug AstraZeneca once laid out more than $1 billion to get its hands on, has wound up on the scrap heap.

On Monday, Ironwood Pharmaceuticals said it would end its Zurampic (lesinurad) licensing agreement with AZ "in its entirety." It’s a move the company says will save it between $75 million and $100 million in 2019 expenses—and one that will put 125 employees, most of them field-based sales reps, out of a job.

"This action is not taken lightly, but it is an important decision that we believe enables us to allocate capital to the highest return opportunities and drive growth. We are working to maintain appropriate availability of lesinurad for patients and physicians during the termination period," Ironwood CEO Peter Hecht said in a statement.

Ironwood, which in 2016 paid AZ $100 million up front and promised up to $165 million more in milestones and royalties, decided to dump Zurampic after performing market tests earlier this year, it said. The company explored "a more comprehensive marketing mix" for both Zurampic and new combo product Duzallo, but "data from the test markets did not meet expectations," spurring Ironwood to hand the drug back to the British drugmaker.

Now, the franchise will be AstraZeneca's problem to pick back up or leave be—a problem it bought for a pretty penny as part of its $1.3 billion Ardea acquisition back in 2012. "We are currently evaluating the implications of Ironwood’s notification," the company said in a statement.

Analysts once predicted peak sales of $500 million and up for Zurampic, but the drug always came along with question marks. It missed primary endpoints in all three of its late-stage trials, but it skated by after hitting a target for lowering serum uric acid levels. Safety-wise, it bears a black-box warning for kidney failure, and the FDA required a postmarketing safety study when doling out the approval.

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