UPDATE 1-Ironwood IPO raises less than expected-underwriter
* Priced shares at $11.25 vs $14-16 range-underwriter
* Sold 16.7 mln shares, raised about $187.5 mln
* Expected to debut on Nasdaq under "IRWD" on Wednesday
NEW YORK, Feb 2 (Reuters) - Drug maker Ironwood Pharmaceuticals Inc (IRWD.O) initial public offering priced below the expected range, according to an underwriter, raising about 25 percent less than the company had hoped.
The Cambridge, Massachusetts-based company sold 16.7 million shares for $11.25 each, raising about $187.5 million, the underwriter said.
The company had hoped to sell shares for between $14 and $16 each.
Ironwood is the most recent in a spate of companies going public that have downsized their offerings as investors prove choosy and hesitant about risk.
The company currently has one drug for irritable bowel syndrome and constipation in clinical development but does not have regulatory approval to sell it in the U.S. or abroad.
Analysts have said the company could do well if it gets regulatory approval for the drug, but the IPO may not be strong enough to tempt investors in the current environment.
Ironwood has partnerships with Forest Laboratories Inc (FRX.N) and Almirall SA (ALM.MC), but has reported losses each year since it was founded in 1998 and has not yet brought a drug to market.
The company said in a regulatory filing with the U.S. Securities and Exchange Commission that it will use net proceeds from the IPO to fund drug development and commercialization, and for general corporate purposes.
Ironwood is backed by Ridgeback Capital Investments LP, and funds associated with Venrock, the venture capital arm of the Rockefeller family, Polaris Venture Partners, and Morgan Stanley.
The IPO is being led by JP Morgan, Morgan Stanley and Credit Suisse. They have the option to purchase an additional 2.5 million shares.
The company is expected to begin trading on the Nasdaq on Wednesday under the symbol "IRWD." (Reporting by Clare Baldwin; editing by Carol Bishopric)
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