A Drugless Drugmaker IPO!

It wasn't perfect, but after the last couple of years we've had, investors should be happy to take it.

Yesterday Ironwood Pharmaceuticals (NASDAQ:IRWD) priced its initial public offering at $11.25 per share. That's less than the $14 to $16 the company had hoped for, but Ironwood may have been a little optimistic with its pricing. Even at the lower price, the company is valued at $1.1 billion

The most exciting thing about Ironwood's IPO? The company doesn't have any drugs on the market. Last year we had Bristol-Myers Squibb (NYSE:BMY) spinoff Mead Johnson Nutrition (NYSE:MJN), but that could hardly be called a drug company IPO. Later in the year we actually got a few IPOs from drug companies with Cumberland Pharmaceuticals and Talecris Biotherapeutics (NASDAQ:TLCR), but both already had products on the market.

Ironwood has one phase 3 compound, linaclotide, which treats chronic constipation. The drug has already passed two phase 3 trials and data from one more is expected in the second half of the year. Ironwood has a 50/50 partnership with Forest Labs (NYSE:FRX) for the drug in the U.S., and has licensed the drug to Laboratorios Almirall in Europe and Astellas Pharma in Asia. With three different drugmakers having taken a financial stake in linaclotide and a couple of phase 3 trials under its belt, Ironwood isn't the most risky drugmaker out there. Still, it signals that investors are willing to take on some risk and is a good sign for other drugmakers like Anthera Pharmaceuticals, which has plans to go public later in the year.

Finding the next Amgen (NASDAQ:AMGN) or Biogen Idec (NASDAQ:BIIB) isn't easy, but first they've got to be public -- at least for those of us who don't have enough money to invest in a venture capital fund. Yesterday's IPO, with more to come, is a good first step.

Is Ironwood worth the risk? Head over to Motley Fool CAPS and tell us what you think by giving the stock an outperform or underperform rating.