Idorsia’s plans to sell its hypertension drug Tryvio have faced a speed bump, even as the biotech plows ahead with around 250 layoffs.
Last month, the company said it had secured a $35 million exclusivity fee from an unnamed suitor for the global rights to Tryvio, with a deal expected to be signed before the end of the year. Should the negotiations bear fruit, Idorsia will be in line for an undisclosed upfront fee, milestone payments and tiered royalties of sales, it said at the time.
But, in an update Friday morning, the biotech said this timeline now looks too ambitious.
“Negotiations with the undisclosed party continue, however the company cannot guarantee that an agreement can be reached,” Idorsia explained in the Dec. 20 release. “As a result, the company is considering options to extend the company’s operational cash runway to bridge to a potential binding offer, as well as all strategic options.”
Tryvio, the first approved medicine to target the endothelin pathway as opposed to the typical methods of other antihypertensive therapies, received the nod from the FDA in March to treat high blood pressure when combined with other antihypertensive drugs.
The initial announcement in late November of a potential deal for the drug came with a warning that Idorsia is looking to cut about 270 roles in R&D as well as support functions at the company’s Allschwil, Switzerland, headquarters in order to reduce its operating costs.
In today’s update, Idorsia said that after a consultation process with employee representatives at its headquarters, it now looks like 250 positions globally will be impacted, with the process already underway.
Money is certainly on Idorsia’s mind. The company expects to end 2024 with around 70 million Swiss francs ($78 millon) in the bank, including the $35 million exclusivity fee from the still-unnamed buyer. Should the Tryvio deal come through in the coming days, this is likely to add another 30 million Swiss francs ($33.4 million) to Idorsia’s bank balance.
Even if the sale does work out, Idorsia said it is still “diligently seeking additional funding” of at least 200 million Swiss francs ($223 million) to pave out a cash runway into 2026.
Over previous years, Idorsia has issued two convertible bonds with a combined nominal value of 800 million Swiss francs ($893 million), but the biotech is looking for an extension to their repayment timelines “given the near-term maturity and the inability of the company to repay the bonds at this time,” Idorsia said in the release.
“Signing the agreement for [Tryvio] is a crucial first step to ensure the future of Idorsia,” CEO André Muller said in the release. “Based on our current liquidity forecasts, there are additional prerequisites to allow the company to continue to operate, which include the completion of the recently announced company restructuring; the restructuring of the company’s outstanding debt, including the 2025 and 2028 convertible bonds; and raising additional funding.”
“As a result of these constraints and the delay to the completion of the [Tryvio] agreement, we are also considering all strategic options beyond a deal for [Tryvio],” the CEO added.
The Swiss biopharma, which also manufactures insomnia med Quviviq, has been walking a financial tightrope for the last couple of years. After laying off 300 employees last year, Idorsia secured short-term salvation in February 2024 via a $350 million upfront payment from Viatris in exchange for the global rights to two phase 3 candidates.