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Jean-Paul (68) and Martine (67) Clozel couple and their biotech company Idorsia travel through a valley of tears. A week ago, the company announced a serious cost-cutting program. There are compromises, especially when researching and developing new drugs that are at the heart of a biotech company like Idorsia.
Only the most promising drug candidates in the pipeline will be further pursued. As many as 500 of 1,200 jobs could be victims of austerity. The goal is to cut cash burn by half. Also, Idorsia quit her job in Asia in exchange for 400 million Swiss francs sold to British Sosei Heptares.
Financial misery is so bad
Now the six-month figures reveal the full extent of the financial misery:
- Sales did not budge in the second quarter either. Sales in the first half of the year were only 51 million francs. First of all, Daridoxerant, the sleeping pill to which hopes are pinned, just doesn’t go away. It sold only 11.8 million francs in the first half of the year. After all: In the US, medicine is now covered by two large private insurance companies. An application has been filed for Medicare coverage.
- The cash burn is huge. Operating loss for the first half was CHF 375 million (US GAAP), compared to CHF 405 million in the same period last year. The company has set a target to limit losses to CHF 735 million by the end of the year, “except for unforeseen events” as stated in the press release.
- The liquidity situation is accordingly bleak: At the end of June, Idorsia still had cash and cash equivalents of CHF 33 million. While the liquidity was still 212 million francs at the end of March, it was 466 million francs at the end of December 2022. After all: a remedy is now provided with the sale of the Asian business.
- Equity is a huge minus, exceeding 1 billion francs at the end of 2022, which is 661 million francs.
- Profitability targets: Suspended due to tough financial situation, as Idorsia announced today.
Jean-Paul Clozel and his wife Martine are trying to start a biotech company from scratch; Something that many do not even dare to do. As a rule, newcomers license their active ingredients to Big Pharma as soon as it becomes expensive, as the drugs must be tested on patients. Dry periods are inevitable in such an adventure. But such numbers are difficult even for a pureblood entrepreneur like Clozel.
Apparently the stock market sees it that way too. This morning Allschwil confirmed the half-year figures from BL with minus 12 percent. Late in the morning the share was 6 francs.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
