Dive Brief:
- Idorsia, the Switzerland-based biotechnology company, disclosed Friday a broad cost-cutting initiative that could include as many as 500 layoffs.
- The initiative’s main goal is to reduce the cash-burn at Idorsia’s headquarters by about half. Paring down research is part of the plan, as the company works to “prioritize assets that can be be advanced rapidly and with reasonable financial investment.” As such, Idorsia warned that hundreds of positions, especially those in research and development and associated support functions, could become “redundant.”
- Last year, Idorsia reported product sales of 51 million Swiss francs, or roughly $55 million. The company also had operating expenses of 900 million Swiss francs, with the vast majority coming from selling, general and administrative costs as well as research and development.
Dive Insight:
A drawn-out downturn in the biotech stock market has made funding much harder to come by for many smaller drugmakers. As a result, job cuts, research re-evaluations and broad-scale restructurings have become commonplace over the past year. So far in 2023, more than 90 biotech or pharmaceutical companies have pursued layoffs, according to data compiled by BioPharma Dive.
Idorsia now joins that list. In a statement, the company said it’s in a “challenging financial situation” because of “lower than anticipated product sales and a difficult global financial environment.” Idorsia sells two products: a pill for insomnia, Quviviq, and a brain drug called Pivlaz. Another Idorsia medicine, aprocitentan, is currently under review at the Food and Drug Administration, which should make an approval decision by mid-to-late December.
“I continue to believe that Quviviq can be the success we hope for, but unfortunately it will take longer than originally planned,” Jean-Paul Clozel, Idorsia’s CEO, said in the Friday statement.
“The cost reduction initiative together with potential collaborations will give the company the time it needs to realize the value we have created,” Clozel added. “I deeply regret having to launch such an initiative, but we simply cannot sustain current investment levels.”
Idorsia says it now must “substantially reduce investment in research and development and focus on activities crucial to the company’s immediate objective, which is to maximize the time the company has to deliver commercial success with its products.”
The company is reviewing its product portfolio and pipeline of research programs, and any deemed as not priorities will either be paused or wrapped into partnerships or out-licensing deals.
The cost-cutting initiative comes one day after Idorsia announced the sale of its Asia Pacific operations outside of China. The operations are going to the Tokyo-based biopharmaceutical company Sosei Heptares, which agreed to pay 400 million Swiss francs.
In June, Idorsia said it had secured $75 million in bridge financing to extend the company’s cash runway until the end of July.
Idorsia was formed in 2017, built around the research-stage assets that were left over from Johnson & Johnson’s $30 billion acquisition of Actelion.