Sleeping pills not selling as expected: Idorsia cuts 270 jobs again
The Basel-based company must continue to reduce its costs. She hopes to get an inhaler by licensing a blood pressure medication.
A new round of savings is affecting the Idorsia company.
The biotechnology company Idorsia, located in Allschwil BL, is facing the next clear: After the owner couple Jean-Paul and Martine Clozel already cut 500 jobs last year, another 270 people from research and development as well with employees in administrative functions. to leave The company announced this on Wednesday. The dismantling should be completed by the end of the year. It is then expected that the staffing level will decrease to around 500 people. Within less than two years, the company had to lay off about half of its workforce.
The background to the painful decision: The company must save huge costs to return to the profit zone. Time is running out. In the last nine months, Idorsia generated sales of only 53 million francs, a large part of which came from the promising Quiviviq, a sleeping pill. But these returns are far from covering the costs. Idorsia made a loss of 180 million francs in the first three quarters. Slowly but surely the company is threatening to run out of money. It was in the deep red in previous years; in 2022 it was 800 million francs and last year it was 300 million francs.
Blood pressure lowering drugs should give fluidity
In order to buy time, Idorsia is now trying to sell the global rights to the antihypertensive drug Aprocitentan. After selling his company Actelion, Jean-Paul Clozel gave the active ingredient to the pharmaceutical giant Johnson & Johnson. However, doubts arose shortly before the market launch. Last year Idorsia bought back the drug. Now a new buyer is ready, as Idorsia announced on Wednesday. The contracts with the unnamed interested party should be signed by the end of the year.
As part of the exclusive negotiations, Idorsia will receive 35 million francs, which should ease the acute cash crunch in the short term. The actual purchase price and license income are added later. ”This is the first decisive step to bring Idorsia into a financially sustainable position and on the way to profitability,” said CEO André Müller.
Idorsia went into this precarious state mainly because of his sleeping pill Quiviviq. It blocks the hormone orexin, which regulates sleep patterns. People with sleep disorders should be able to fall asleep and stay asleep better.
Founder Clozel likes to describe it as an “unusual drug”. But the proof of this is still pending; In the important US market, authorities suspect the drug may be addictive and prescriptions are restricted. But Clozel doesn’t let that deter her. At the latest general meeting, he was convinced that the drug had huge potential and could generate revenues of over a billion. According to new estimates, the market potential for sleeping pills in the most important markets is 4.1 billion francs in 2032. Now Idorsia must take advantage of this and convince the authorities and doctors. Time is running out.
What are the main challenges Idorsia is facing in the biopharmaceutical market today?
Interview with Dr. Clara Nguyen, Biopharmaceutical Expert, on Idorsia’s Recent Challenges
Time.news Editor (TNE): Welcome, Dr. Nguyen. It’s always a pleasure to have you on our platform. Today, we’re discussing the recent news surrounding Idorsia and the significant job cuts they announced. Given your expertise in the biopharmaceutical sector, could you shed some light on what led to these drastic measures?
Dr. Clara Nguyen (CN): Thank you for having me. Idorsia’s situation is indeed concerning. The company has faced financial difficulties, including substantial losses—180 million francs in just the first three quarters alone. The sluggish sales of their flagship product, Quiviviq, a sleeping pill, have exacerbated these issues. Even though it generated some revenue, it hasn’t come close to covering operational costs.
TNE: It sounds like a challenging environment for Idorsia. With nearly half of the workforce laid off in less than two years, what do you think the company needs to do to stabilize?
CN: To stabilize, Idorsia must streamline its operations and focus on cost management. The decision to cut 270 additional jobs is a painful but necessary step to reduce expenditure. Beyond just cutting jobs, they need to ensure that remaining resources are allocated efficiently—this means investing in R&D for products with higher growth potential.
TNE: Speaking of R&D, you mentioned Quiviviq earlier. What does its underperformance signify for the company’s future?
CN: Quiviviq’s underperformance is alarming, especially since the company hoped it would deliver significant sales. High expectations often accompany new products, and when they don’t meet those expectations, it can lead to a loss of investor confidence and increased scrutiny. Idorsia must either find a way to boost Quiviviq’s sales through improved marketing or pivot to new, promising therapies.
TNE: The article mentions that Idorsia is looking to sell rights to Aprocitentan, an antihypertensive drug. How crucial is this move for the company’s future?
CN: Selling the global rights to Aprocitentan is vital for Idorsia. It could provide an influx of capital that the company desperately needs right now. However, they must ensure that the terms of the sale are favorable. Given the past challenges with Aprocitentan, including its previous transfer to Johnson & Johnson and subsequent re-acquisition, there are concerns about its market viability.
TNE: This predicament raises a broader question about the biopharmaceutical industry. Are we seeing a trend of companies like Idorsia struggling with product commercialization?
CN: Absolutely. The biotech landscape can be volatile. Companies invest billions in R&D, but not every product makes it to market successfully. There’s also competition from generics once patents expire, and as we’ve seen with Idorsia, the path to profitability is fraught with obstacles. Companies need robust strategies that include not only innovative research but also strong marketing and commercialization plans.
TNE: Looking ahead, what advice would you give to Idorsia as they navigate through this tumultuous time?
CN: First and foremost, they need to streamline their focus on what they do best, which is developing innovative therapies. They should also consider partnerships with larger pharmaceutical firms to increase their market reach and distribution capabilities. Lastly, transparent communication with investors and stakeholders is key. Maintaining confidence can be just as important as the actual financial figures.
TNE: Thank you, Dr. Nguyen, for your insights. It’s clear that Idorsia faces a tough road ahead, but with strategic planning, there is hope for recovery.
CN: Thank you for having me. I hope we see Idorsia turn things around and deliver much-needed innovations to the market in the future.
