For three months, Idorsia's employees have had the shadow of significant cost cuts looming over them. Now, the insomnia-focused biotech is laying bare how deep the cuts will go.
The company is laying off 300 people, predominantly in R&D and associated functions, according to an announcement Tuesday. About 175 other positions were made redundant by either canceling open positions or not replacing people who left outside of the layoffs.
It follows Idorsia's warning in July that it may have to let go of up to 500 people as part of an effort to shave its costs in half by early 2024. By the sounds of it, the reduction in workforce won't be enough on its own to get the finances up to the desired level.
“I am fully aware that these measures need underpinning with additional funding in the coming months,” Idorsia CEO Jean-Paul Clozel, M.D., said in this morning's release. The company had 205 million Swiss francs ($229 million) on hand as of the end of September.
A key source of the painful fiscal measures is sluggish sales of insomnia med Quviviq. The med brought in 20 million Swiss francs ($22.3 million) through the first nine months of the year, three-quarters of which came from the U.S. Quviviq first became commercially available in May 2022, and Idorsia hopes it could soon crack in the Chinese market, with a phase 3 study recently initiated by partner Simcere.
To try to fix its fortunes, Idorsia sold off its Asia-Pacific business (excluding China) to Sosei Heptares for 400 million Swiss francs ($447 million), which included rights to certain assets. Idorsia also reacquired rights to aprocitentan from Janssen in a deal worth up to 306 million Swiss francs ($342 million). Janssen originally decided to opt into the asset back in 2017, coughing up a $230 million milestone payment as a result.
Aprocitentan is currently under review by global regulators as a treatment for resistant hypertension. The FDA has set a March 2024 deadline for deciding the drug’s fate.
Beyond aprocitentan and Quviviq, the future of other drugs in Idorsia's pipeline appears up in the air. The biotech says it’s undergoing a portfolio review “in connection with potential partnership discussions, and a main objective to prioritize assets that can be advanced rapidly and with reasonable financial investment.”