The wheels are almost entirely off Danish biotech Orphazyme after the company’s board of directors called for a court-mediated restructuring, prompting the second round of layoffs in less than a year—this time for half of the global staff.
The in-court restructuring will determine whether any operations can continue, if any capital can be raised, or if a sale for all or some parts of the company's assets is prudent, according to an after-market release issued Thursday.
Orphazyme recently closed its commercial business in the U.S., U.K., and Germany. Last but certainly not least, the company plans to delist from Nasdaq, likely effective by the end of March.
It’s a Shakespearean fall from grace fit for this moment on Wall Street as Reddit day traders ballooned the stock to an eye-popping $77 per share last year.
In late March 2021, Orphazyme announced its lead asset, arimoclomol, failed to improve disease progression in a phase 2/3 trial for inclusion body myositis, a progressive muscular disorder. Less than two months later, the same asset failed to prove any benefit for ALS patients in a phase 3 trial.
That left all the company’s chips for arimoclomol to be pushed towards Niemann-Pick disease Type C, a rare genetic disorder that impacts the ability of cells to transport cholesterol and lipids. In June, the FDA rejected the drug, saying more data was necessary, prompting Orphazyme to slash two-thirds of its workforce. The final blow came a couple of weeks ago, when European regulators conveyed that arimoclomol was unlikely to get approved at the end of March.
"Following the very disappointing outcomes from the regulatory authorities in the U.S. and EU, we are forced to consider some extremely difficult choices," CEO Anders Vadsholt said in a statement. "Our employees have worked tirelessly with a focus on bringing arimoclomol as a potential new treatment option to patients with Niemann-Pick disease type C."
Arimoclomol was originally licensed from CytRx in 2011 for $150,000 in upfront cash plus $150 million in royalty payments. In a 2019 release, CytRx said it was slated to earn $10 million should arimoclomol be approved in the U.S. and Europe.