The laboratory Reine Idorsia has entered into exclusive negotiations for the worldwide rights to its treatment for resistant hypertension aprocittan, approved in the United States under the brand name Tryvio and Jeraygo on the Old World.
The exclusivity bonus of $35 million agreed for this purpose should enable the company, which is struggling with its liquidity, to cover its financial obligations until next year. Major new cuts to the workforce are also being considered, it has been revealed.
If applicable, the agreement should also include the usual upfront payment, milestone payments and commissions on sales, a press release issued Wednesday states. The discussions also concern the transfer of Idorsia employees who are working on aprocitentan. The Allschwil firm hopes to sign an agreement before the end of the current year and complete the transaction at the beginning of next year.
However, transferring rights to this duly approved treatment would only be a step on the road to the recovery of the company. “We are also using cost reduction initiatives and a programme to restructure our debt,” says general manager (CEO) André Muller, quoted in the publication.
New clips in view
The management has already launched a consultation process on a new workforce reduction plan, up to 270 jobs in the areas of research and development, as well as support functions. Natural departures, early retirements and transfers to a buyer should reduce the number of layoffs to be made proportionately.
Cost management will also involve a reduction in the number of projects being actively developed and new rights transfers.
Upset by funding concerns for two years now, Idorsia has already sold a research building in the fall of 2022 for 164 million francs, its activities in the Asia-Pacific in the summer of 2023 for 400 million, or even development rights and marketing selatogrel. , developed in the cardiac field, along with cenerimod, against systemic lupus erythematosus at the beginning of the year for 350 million dollars.
475 jobs have already been eliminated
The first part of the restructuring announced in July 2023 involved the elimination of 475 jobs at the Allschwil headquarters, out of a workforce of 1,300 employees at the time. Idorsia also received from its creditors at the beginning of May 2024 a review of the conditions for a convertible loan of 200 million francs, pushing back the maturity to mid-January 2025 and reducing the conversion price.
The founder, administrator and general manager (CEO) of the company, Jean-Paul Clozel put his hand in his pocket in June 2023, giving a bridging loan of 75 million francs.
Noting that the exclusivity bonus should enable Idorsia to survive the coming year, Stefan Schneider notes that the horizon is still unclear. Proceeds from the transfer of the rights to aprocitentan will revert to Janssen, which transferred those rights to Idorsia in September 2023.
Although he appreciates the efforts to reduce costs and restructure debts, the Vontobel analyst is still struggling to identify future sources of income and prefers to refrain from any recommendation on the company’s stock.
At 9:49 am, Idorsia’s registered stock rose 11% to 84.5 cents, a level well beyond the 20 francs the title posted at the start of 2022.
How might the sale of aprocitentan’s rights impact the future of hypertension treatments?
Interview: The Future of Idorsia and Its Treatment for Resistant Hypertension
Time.news Editor (TNE): Today, we’re joined by Dr. Julia Bennett, a leading expert in pharmaceutical developments and the economics of the healthcare industry. Dr. Bennett, thanks for being here. There’s quite a bit happening with Idorsia and its hypertension treatment, aprocitentan. Can you give us an overview of what this news means for the company and the market?
Dr. Julia Bennett (DJB): Absolutely, and thank you for having me. Idorsia’s decision to enter exclusive negotiations for the worldwide rights to aprocitentan is significant. The treatment, which is already approved under the names Tryvio in the U.S. and Jeraygo in Europe, has potential implications not just for the company’s liquidity but also the overall landscape of hypertension treatment options available to patients.
TNE: That’s interesting! The reported exclusivity bonus of $35 million is also noteworthy. How crucial is that financial aspect for Idorsia right now?
DJB: It’s extremely crucial. Idorsia has been facing liquidity issues for a while, and this influx of cash is a temporary lifeline. The $35 million isn’t just an immediate relief; it’s aimed at covering essential financial obligations until next year. However, it’s important to remember that relying on a single agreement won’t be enough for long-term sustainability.
TNE: You mentioned sustainability, and it seems the company is considering major workforce cuts, potentially up to 270 positions. What does that indicate about their internal situation?
DJB: It indicates a substantial restructuring effort. When a company has to cut jobs, especially in critical areas like research and development, it often reflects deeper issues regarding resource allocation and strategic priorities. Idorsia is not only looking to reduce costs but is also scaling back the number of projects actively being developed. This could hinder their innovation pipeline in the long run.
TNE: That restructuring seems quite drastic. Could the sale of rights to aprocitentan and the potential transfer of employees to a buyer be a strategic move for consolidating? How would that affect the operations moving forward?
DJB: Yes, it’s a strategic move. Transferring rights, along with key employees, can help streamline operations and preserve some expertise within a new framework. The hope is that a larger entity can inject fresh capital and strategic vision. However, it poses risks; the culture and mission of Idorsia could shift significantly, impacting employee morale and continuity.
TNE: There’s also mention of debt restructuring initiatives. Are there particular strategies companies like Idorsia use to manage debt more effectively?
DJB: Absolutely. Companies typically engage in a combination of refinancing existing debt, negotiating with creditors, and sometimes selling off non-core assets to manage their debt levels. In Idorsia’s case, it’s about striking a balance between cutting costs and maintaining enough operational capacity to stay relevant in the market.
TNE: Lastly, do you see any major implications for the treatment of resistant hypertension in light of these developments?
DJB: Yes, indeed. With aprocitentan showing promise in a market that desperately needs solutions for resistant hypertension, its future could influence not just patient outcomes but also investor confidence in Idorsia. Depending on how they navigate this complex transition, they could either establish themselves as a leader in this niche or struggle to maintain relevance.
TNE: Thank you, Dr. Bennett. It sounds like Idorsia is at a critical juncture, and the decisions made in the coming months will be pivotal for their future and patient care in hypertension treatment.
DJB: Exactly, and it will be interesting to see how it all unfolds. Thank you for having me!
TNE: Thank you for your insights! We look forward to staying updated on this situation.