Peter Hecht, CEO of Cambridge-based Ironwood Pharmaceuticals, is stepping down to take the helm of a new drug company being spun out of the firm he helped found.
Hecht will become chief executive of newly named Cyclerion Therapeutics, which will focus on developing treatments for rare diseases.
Mark Mallon, a drug industry veteran with 24 years of experience at the British biopharma giant AstraZeneca, will succeed him at Ironwood.
Ironwood has developed medicines for gastrointestinal diseases, including Linzess, and is among a relatively small group of Cambridge biotechs with approved drugs on the market. But the 21-year-old company, under pressure from an activist investor to increase the value of its stock, announced in May that it planned to split into two independent publicly traded firms.
Terrance G. McGuire, Ironwood’s chairman of the board, said Friday that Mallon and Hecht were well suited to run their respective companies.
“Mark’s extensive experience building and shaping businesses, combined with his deep knowledge of GI, will be invaluable as he works to take Ironwood to the next level and create significant value for Ironwood stakeholders,” McGuire said. “Peter is an incredible entrepreneur and leader, and his passion for creating drugs that can change patients’ lives positions him and the team for success at Cyclerion.”
The appointments are expected to take effect when Ironwood’s split is completed sometime in the first half of this year.
Last spring, Ironwood took the unusual step of telling shareholders that an activist biotech investor, Alex Denner of Sarissa Capital, was seeking to join its board. Denner, who ran biotech investments for famed corporate raider Carl Icahn before starting Sarissa in 2012, told the Globe then that Ironwood’s commercial performance had been “sub-scale.”
Soon afterward, the company announced that it would split into two independent publicly traded firms — one focusing on treatments for gastrointestinal diseases and gout, the other on therapies for orphan diseases, such as sickle cell disease.
Ironwood’s stock was up by more than 9 percent on the Nasdaq exchange Friday afternoon.
Hecht said he was delighted to run Cyclerion and looked forward to “cheering on” Mallon at Ironwood.
“From day one, it has been a privilege to work with every one of our teammates to build Ironwood into a thriving business that is on the cusp of launching two exciting new companies,” he said.
Mallon said he wanted to increase sales of Linzess and develop new medicines for conditions such as gastroesophageal reflux disease.
Ironwood, with a market value of $1.6 billion, was ranked the 22nd biggest biopharma employer in Massachusetts last year, with 480 employees, according to a recent report by the Massachusetts Biotechnology Council.