Idorsia announces financial results for the first half 2023 –
adapting the company to create sustainable value
Ad hoc announcement pursuant to Art. 53 LR
Allschwil, Switzerland – July
25, 2023
Idorsia Ltd (SIX: IDIA) today announced its financial results
for the first half of 2023.
Business highlights
- Transaction with Sosei
Heptares: Idorsia sells its Asia Pacific
(ex-China) operations – including selected license rights to
products – for a total consideration of CHF 400 million.
- Cost reduction initiative with the target of a
reduction in cash-burn at headquarters by approximately 50%
expected to become fully effective in early 2024.
Commercial highlights
- QUVIVIQ™
(daridorexant): Total
net sales of CHF 11.8 million in the first half 2023.
- QUVIVIQ in the
US: CVS coverage secured in July 2023 –
with Express Scripts QUVIVIQ is now covered by two of the largest
insurance plans in the commercial space. Bids submitted for
Medicare Part-D with expected coverage in the new year. Team now
focused on converting strong demand into sales.
- QUVIVIQ in
Europe: Demand continues to grow in
Germany and Italy. Promising launch in Switzerland in June
2023.
- PIVLAZ® (clazosentan)
in Japan: Net sales of CHF 32.4
million in the first half 2023. As a result of the Sosei Heptares
deal, Idorsia will no longer report sales of PIVLAZ in Japan and
territories granted to Sosei Heptares.
Pipeline highlights
- Daridorexant – Approved by Health Canada for
the management of adult patients with insomnia under the tradename
QUVIVIQ.
- Aprocitentan – New Phase 3 data presented at
the European Society of Hypertension Annual Meeting 2023 – NDA
under review with the US FDA – PDUFA December 19, 2023 – and MAA
under review with the European Medicines Agency.
- Portfolio review initiated – Objective to
prioritize assets that can be advanced rapidly and with reasonable
financial investment.
Financial highlights
- Net revenue HY 2023 at CHF 51
million.
- US GAAP operating expenses HY 2023 at CHF 426
million and non-GAAP operating
expenses HY 2023 at CHF 393 million.
- US GAAP operating loss HY 2023 of CHF 375
million and non-GAAP operating
loss of CHF 342 million.
- Guidance for 2023: The
company is committed to manage operating expenses to deliver US
GAAP operating loss of around CHF 735 million and non-GAAP
operating loss of around CHF 650 million – unforeseen events
excluded.
- Profitability target: Suspended – target
to be provided again during 2024.
Jean-Paul Clozel, MD
and Chief Executive Officer, commented:“I maintain
our ambition to become a mid-sized biopharmaceutical leader, and I
believe in our innovative portfolio as well as the science upon
which it is built. With aprocitentan currently advancing in the
registration process, we are well on track to have the third drug
from our pipeline available for patients. Capitalizing on this
clinical success to make Idorsia profitable has been more
challenging than I had hoped. As a result, adaptations must be made
to reduce our global cash-burn. The sale of our affiliates in Japan
and South Korea has given us some breathing space to make those
adaptations. As announced last week, the cost reduction initiative,
including a full portfolio review, combined with potential
collaborations, will extend the time we have to create sustainable
value. I'm grateful to all those who continue to support us in our
purpose to help more patients.”
Financial results
US GAAP results |
First Half |
Second Quarter |
in CHF millions, except EPS (CHF) and number of shares
(millions) |
2023 |
2022 |
2023 |
2022 |
Net revenues |
51 |
22 |
30 |
5 |
Operating expenses |
(426) |
(427) |
(207) |
(229) |
Operating income (loss) |
(375) |
(405) |
(177) |
(212) |
Net income (loss) |
(405) |
(419) |
(193) |
(222) |
Basic EPS |
(2.28) |
(2.36) |
(1.08) |
(1.25) |
Basic weighted average number of shares |
178.1 |
177.3 |
178.3 |
177.5 |
Diluted EPS |
(2.28) |
(2.36) |
(1.08) |
(1.25) |
Diluted weighted average number of shares |
178.1 |
177.3 |
178.3 |
177.5 |
US GAAP net revenue of CHF 51 million in the first half of 2023
(CHF 22 million in the first half of 2022) consisted of product
sales of QUVIVIQ (CHF 12 million) and PIVLAZ (CHF 32 million),
contract revenue recognized in connection with Mochida
Pharmaceutical Co., Ltd (CHF 3 million) and Neurocrine Biosciences,
Inc. (CHF 2 million), and revenue share from Johnson &
Johnson (CHF 2 million).
US GAAP operating expenses in the first half of 2023 amounted to
CHF 426 million (CHF 427 million in the first half of 2022), of
which CHF 5 million related to cost of sales (CHF 1 million in the
first half of 2022), CHF 172 million to R&D expenses (CHF 192
million in the first half of 2022) and CHF 249 million to SG&A
expenses (CHF 234 million in the first half of 2022).
US GAAP net loss in the first half of 2023 amounted to CHF 405
million (CHF 419 million in the first half of 2022). The decrease
of the net loss was driven by higher net revenues and lower
operating expenses, largely in the R&D functions, which was
partially offset by higher financial expenses.
The US GAAP net loss resulted in a net loss per share of CHF
2.28 (basic and diluted) in the first half of 2023, compared to a
net loss per share of CHF 2.36 (basic and diluted) in the first
half of 2022.
Non-GAAP* measures |
First Half |
Second Quarter |
in CHF millions, except EPS (CHF) and number of shares
(millions) |
2023 |
2022 |
2023 |
2022 |
Net revenues |
51 |
22 |
30 |
5 |
Operating expenses |
(393) |
(407) |
(191) |
(219) |
Operating income (loss) |
(342) |
(384) |
(161) |
(202) |
Net income (loss) |
(369) |
(395) |
(180) |
(206) |
Basic EPS |
(2.07) |
(2.23) |
(1.01) |
(1.16) |
Basic weighted average number of shares |
178.1 |
177.3 |
178.3 |
177.5 |
Diluted EPS |
(2.07) |
(2.23) |
(1.01) |
(1.16) |
Diluted weighted average number of shares |
178.1 |
177.3 |
178.3 |
177.5 |
* Idorsia measures, reports and issues guidance on non-GAAP
operating performance. Idorsia believes that these non-GAAP
financial measurements more accurately reflect the underlying
business performance and therefore provide useful supplementary
information to investors. These non-GAAP measures are reported in
addition to, not as a substitute for, US GAAP financial
performance.
Non-GAAP net loss in the first half of 2023 amounted to CHF 369
million: the CHF 36 million difference versus US GAAP net loss was
mainly due to depreciation and amortization (CHF 8 million),
share-based compensation (CHF 24 million), and a loss on marketable
securities (CHF 5 million).
The non-GAAP net loss resulted in a net loss per share of CHF
2.07 (basic and diluted) in the first half of 2023, compared to a
net loss per share of CHF 2.23 (basic and diluted) in the first
half of 2022.
Transaction with Sosei
HeptaresOn July 20, 2023, Idorsia sold its operating
businesses in the Asia Pacific (ex-China) region to Sosei Heptares
for a total consideration of CHF 400 million.
The territories within the scope of the transaction are
Australia, Brunei, Cambodia, Indonesia, Japan, Laos, Malaysia,
Myanmar, New Zealand, Philippines, Singapore, South Korea,
Thailand, Taiwan, and Vietnam.
The transaction includes the acquisition by Sosei Heptares of
Idorsia’s affiliates in Japan and South Korea, the assignment of
the license for PIVLAZ (clazosentan) for the Asia Pacific
(ex-China) region, the co-exclusive license for daridorexant for
the Asia Pacific (ex-China) region and the assignment of all
potential milestones in connection with the co-exclusive license of
daridorexant granted to Mochida Pharmaceutical. The transaction
also includes an option for Sosei Heptares – upon payment of
separate option fees – to license cenerimod and lucerastat for the
development and commercialization in the territories.
With the completion of the transaction with Sosei Heptares on
July 20, 2023, the full-year financial operating results of Idorsia
will no longer include details from the operations in Japan and
South Korea. The net sales, operating expenses and other financial
and tax expenses incurred in the first 6.5 months, as well as the
gain from the sale will be recorded on separate line items “results
of discontinued operations” and “gain from sale of discontinued
operations” recorded below the line item “net income (loss) from
continuing operations”.
Bridge loanIn order to bridge the completion of
the transaction with Sosei Heptares, Idorsia secured a loan with
Jean-Paul Clozel, CEO, Member of the Board of Directors and
Idorsia’s largest shareholder, for up to CHF 75 million. Idorsia
drew down a first tranche of CHF 20 million in June and an
additional tranche of CHF 30 million in July. The loan was fully
repaid on July 21, 2023.
Cost reduction initiativeOn July 21, 2023,
Idorsia announced that it has launched a cost reduction initiative
with the target to reduce cash-burn at headquarters by
approximately 50%. The company will review the research and
development pipeline and product portfolio with the objective to
prioritize assets that can be advanced rapidly and with reasonable
financial investment. Following the portfolio review, those
projects not aligned to the company priorities will be either
paused or prepared for partnership or out-licensing.
Up to 500 positions could become redundant, mainly in Research
& Development and the associated support functions, at
headquarters in Allschwil, Switzerland. A consultation process with
employee representatives at headquarters has been initiated. Upon
completion of the consultation process, Idorsia intends to conclude
the initiative before the end of 2023 with the reduction of costs
becoming fully effective early in 2024.
Consequently, a one-off charge – the size of which is still to
be determined, in part, upon conclusion of employee representative
consultations – will be included in the 2023 financial
statements.
Profitability TargetIdorsia had set a target to
become profitable in 2025 with global revenue above CHF 1 billion.
With the transaction with Sosei Heptares in the APAC (ex-China)
region, a slower than expected ramp up of QUVIVIQ sales, a
portfolio review and ongoing discussions with potential partners,
together with the announced cost reduction initiative, there are
many moving parts, and the company has therefore suspended its 2025
profitability target.
Financial outlook 2023The 2023
financial outlook is calculated on the basis of QUVIVIQ
(daridorexant) being available in the US, Germany, Italy, and
Switzerland with additional launches anticipated in the UK and
Spain in the second half of 2023; Regulatory applications for
aprocitentan being under review by the US FDA and the EMA; and the
Phase 3 studies with selatogrel and cenerimod expected to continue
to actively recruit in the second half of 2023.
The company re-issues its full year 2023 financial guidance and
expects a US GAAP operating loss of around CHF 735 million and a
non-GAAP operating loss of around CHF 650 million for 2023 –
unforeseen events excluded and taking into account the ongoing cost
reduction initiative in connection with the review of the research
and development pipeline and product portfolio. In addition,
following the completion of the transaction with Sosei Heptares,
Idorsia will no longer include the operations in Japan and South
Korea in its financial operating result as explained above.
André C. Muller, Chief Financial Officer,
commented:“The transaction completed with Sosei Heptares
brought much-needed cash to Idorsia, creating value for both
companies, while maintaining our ability to develop our drugs for
patients in the region. This 400 million Swiss francs deal, of
which 396 million are already paid, allows us to extend the cash
runway to early 2024. We are working on several initiatives to
secure additional funding in the second half of 2023 and, in
parallel, we launched a cost reduction initiative that is expected
to have full effect by early 2024. However, we can re-issue our
2023 financial guidance unforeseen events excluded. With many
moving parts expected to fall into place in the next few quarters,
this should allow us to provide a new profitability target again
during 2024.”
Liquidity and indebtednessAt the end of the
first half of 2023, Idorsia’s liquidity amounted to CHF 33
million.
(in CHF millions) |
Jun 30, 2023 |
Mar 31, 2023 |
Dec
31, 2022 |
Liquidity |
|
|
|
Cash and cash equivalents |
33 |
212 |
146 |
Short-term deposits |
- |
- |
320 |
Long-term deposits |
- |
- |
- |
Total liquidity* |
33 |
212 |
466 |
|
|
|
|
Indebtedness |
|
|
|
Convertible loan |
335 |
335 |
335 |
Convertible bond |
796 |
795 |
795 |
Other financial debt |
192 |
162 |
162 |
Total indebtedness |
1,322 |
1,292 |
1,292 |
*rounding differences may occur
The liquidity of CHF 33 million includes the proceeds of Sosei
Heptares (CHF 10 million) and the bridge loan (CHF 20 million), but
excludes the cash held by the Japanese and Korean
affiliates (CHF 11 million) included in a separate line item
“Assets held for sale”.
Commercial operations
In the first half of 2023, QUVIVIQ™ (daridorexant) in the US,
Germany, Italy, and Switzerland, and PIVLAZ® (clazosentan) in
Japan, generated total product sales of CHF 44.2 million.
United
States
Product |
Mechanism of action |
Indication |
Commercially available since |
|
Dual orexin receptor antagonist |
Treatment of adult patients with insomnia, characterized by
difficulties with sleep onset and/or sleep maintenance |
May 2022 |
QUVIVIQ (daridorexant) net sales in the first
half of 2023 reached CHF 8.8 million in the US. This net sales
number encompasses the QUVIVIQ copay program aimed at driving
demand and product uptake, and thus does not reflect the actual
dispensed prescriptions and product demand.
QUVIVIQ continues to show a solid upward trajectory in product
demand and writer base. In the first half of 2023, more than
125,000 prescriptions were dispensed – an increase of more than 85%
as compared to the approximately 65,000 dispensed prescriptions in
the entire eight months that QUVIVIQ was on the market in 2022.
Additionally, refills continue to rise week-on-week, reflecting the
efficacy and safety of QUVIVIQ and its adoption by both the patient
and physician.
Regarding insurance coverage, in July, QUVIVIQ was added to the
CVS national formulary which covers 20 million lives. Additionally,
the company anticipates Medicare Part D coverage to begin in the
new year 2024, potentially opening an entirely new channel which
would substantially improve product access and paid
prescriptions.
Importantly, going into the second half of 2023, the increased
insurance coverage of QUVIVIQ will enable a shift from Idorsia-paid
consignment to insurance-paid prescriptions.
For more information about QUVIVIQ in the US, see the Full
Prescribing Information (PI and Medication Guide).
Patricia Torr, President
and General Manager of
Idorsia US,
commented:“Since launch, our strategy in the US
has been to drive demand and product adoption in order to secure
reimbursement from payers. This has resulted in strong brand
recognition, positive experiences and feedback from both clinicians
and patients, as well as enhanced insurance coverage. Our focus now
is on converting the strong demand we have created into sales. In
line with our strategy, we are starting to see this reflected in a
shift from a consignment model we’ve used to drive demand, to a
retail model as our market access positions continue to grow. As we
move forward in the second half of 2023, we expect to see an
increasing number of insurance -paid prescriptions coming through
the retail channel.”
Europe and Canada
Product |
Mechanism of action |
Indication |
Commercially available |
|
Dual orexin receptor antagonist |
Treatment of adult patients with insomnia characterised by symptoms
present for at least three months and considerable impact on
daytime functioning |
Switzerland: Jun 2023Germany: Nov 2022Italy: Nov 2022 |
In April 2022, marketing authorization for QUVIVIQ for the
treatment of adult patients with insomnia characterised by symptoms
present for at least three months and considerable impact on
daytime functioning, was granted by the European Commission and
subsequently by the Medicines and Healthcare products Regulatory
Agency (MHRA) in Great Britain. In November 2022, QUVIVIQ was
launched in Italy and Germany. Launch preparations are underway in
the UK and Spain, with a target launch in the second half of 2023,
followed by France in the first half of 2024. For more information
about QUVIVIQ in the EU, see the Summary of Product
Characteristics.
Marketing authorization for QUVIVIQ for the treatment of adult
patients with insomnia characterized by symptoms present for at
least three months and considerable impact on daytime functioning,
was also granted by Swissmedic in December 2022, and the company
made QUVIVIQ available to patients in Switzerland in June 2023. For
more information about QUVIVIQ in Switzerland, see the Patient
Information and Information for Healthcare Professionals.
Health Canada granted market authorization for QUVIVIQ for the
management of adult patients with insomnia, characterized by
difficulties with sleep onset and/or sleep maintenance in April
2023, and the company aims to make it available to patients in
Canada in the first half of 2024. For more information on the
marketing authorization of QUVIVIQ in Canada, see the Product
Monograph.
The launches in Germany, Italy, and Switzerland are progressing
well with increasing volumes and continued positive feedback from
physicians and patients on the differentiated profile of QUVIVIQ.
Net sales in the first half of 2023 in Germany, Italy, and
Switzerland were CHF 3 million.
Pricing and reimbursement processes are underway in key European
markets to secure access to QUVIVIQ for chronic insomnia
patients.
Jean-Yves Chatelan, President of
Europe and Canada region,
commented:“Our teams across Europe and Canada are making
great progress with the launch of QUVIVIQ and with securing access
and reimbursement. We are getting great feedback from physicians
and patients where QUVIVIQ is available. QUVIVIQ is the first and
only dual orexin receptor antagonist available in Europe and is
specifically approved for adult patients suffering from chronic
insomnia disorder. Chronic insomnia is a 24-hour disorder, with
significant negative impact on patients at night and during the
day. Making QUVIVIQ available to the millions of patients suffering
from chronic insomnia and impacting so many lives is incredibly
rewarding.”
Japan
Product |
Mechanism of action |
Indication |
Commercially available since |
|
Endothelin receptor antagonist |
Prevention of cerebral vasospasm, vasospasm-related cerebral
infarction, and cerebral ischemic symptoms after aneurysmal
subarachnoid hemorrhage securing |
April 2022 |
PIVLAZ (clazosentan) was launched in Japan in
April 2022 for the prevention of cerebral vasospasm,
vasospasm-related cerebral infarction and cerebral ischemic
symptoms in patients suffering from aneurysmal subarachnoid
hemorrhage (aSAH). Net sales in the first half of 2023 were CHF
32.4 million.
In July 2023, Idorsia and Sosei Heptares completed a transaction
for Idorsia’s operating businesses in the Asia Pacific (ex-China)
region, including assignment of the license for PIVLAZ
(clazosentan). As a result, Idorsia will no longer report sales of
PIVLAZ in Japan and territories granted to Sosei Heptares.
Clinical developmentIdorsia's
has a diversified and balanced clinical development pipeline –
covering multiple therapeutic areas, including CNS, cardiovascular
and immunological disorders, as well as orphan diseases.
As part of the cost reduction initiative announced on July 21,
2023, and expected to be implemented by the end of 2023, Idorsia
will review the research and development pipeline and product
portfolio with the objective to prioritize assets that can be
advanced rapidly and with reasonable financial investment.
Following the portfolio review, those projects not aligned to the
company priorities will be either paused or prepared for
partnership or out-licensing.
Idorsia’s portfolio
Product / compound |
Mechanism of action |
Therapeutic area |
Status |
QUVIVIQ™
(daridorexant) |
Dual orexin receptor antagonist |
Insomnia |
Commercially available in the US Germany, Italy,
and Switzerland;Approved in the EU, UK, and Canada;Filing in Japan
expected in H2 2023;Phase 2 in pediatric insomnia – recruiting |
Aprocitentan* |
Dual endothelin receptor antagonist |
Difficult-to-control (resistant) hypertension |
NDA under review in the US, MAA under review in the EU, other
filings in preparation |
Lucerastat |
Glucosylceramide synthase inhibitor |
Fabry disease |
Phase 3 primary endpoint not met, open-label extension study
ongoing |
Selatogrel |
P2Y12 inhibitor |
Suspected acute myocardial infarction |
Phase 3 recruiting |
Cenerimod |
S1P1 receptor modulator |
Systemic lupus erythematosus |
Phase 3 recruiting |
ACT-1004-1239 |
ACKR3 / CXCR7 antagonist |
Multiple sclerosis and other demyelinating diseases |
Phase 2 in preparation |
Sinbaglustat |
GBA2/GCS inhibitor |
Rare lysosomal storage disorders |
Phase 1 complete |
ACT-1014-6470 |
C5aR1 antagonist |
Immune-mediated disorders |
Phase 1 |
ACT-777991 |
CXCR3 antagonist |
Recent-onset Type 1 diabetes |
Phase 1 |
IDOR-1117-2520 |
Undisclosed |
Immune-mediated disorders |
Phase 1 |
* In collaboration with Janssen Biotech to jointly develop
aprocitentan, Janssen Biotech has sole commercialization rights
worldwide
Neurocrine Biosciences has a global license to develop and
commercialize ACT-709478 (NBI-827104), Idorsia's novel T-type
calcium channel blocker. ACT-709478 was investigated in a Phase 2
study for the treatment of a rare form of pediatric epilepsy. The
study did not meet the primary endpoint. ACT-709478 was generally
well tolerated. Neurocrine continues to analyze the data generated
in the study.
On July 20, 2023, Idorsia sold its operating businesses in the
Asia Pacific (ex-China) region to Sosei Heptares, including the
assignment of the license for PIVLAZ (clazosentan) for the Asia
Pacific (ex-China) region. Idorsia retains the rights to
clazosentan in the rest of the world.
Further details including the current status of each project in
our portfolio can be found in our innovation fact sheet.
Half Year Financial ReportA full financial
update is available in Idorsia's 2023 Half Year Financial Report,
at www.idorsia.com/investors/corporate-reports.
Results Day CenterInvestor community: To make
your job easier, we provide all relevant documentation via the
Results Day Center on our corporate website:
www.idorsia.com/results-day-center.
Upcoming Financial Updates
- Nine-Months 2023 Financial Results reporting on October 24,
2023
- Full-Year 2023 Financial Results reporting on February 6,
2024
- First Quarter 2024 Financial Results reporting on April 25,
2024
Notes to the editor
About IdorsiaIdorsia Ltd is reaching out for
more – We have more ideas, we see more opportunities and we want to
help more patients. In order to achieve this, we will develop
Idorsia into a leading biopharmaceutical company, with a strong
scientific core.
Headquartered near Basel, Switzerland – a European biotech-hub –
Idorsia is specialized in the discovery, development and
commercialization of small molecules to transform the horizon of
therapeutic options. Idorsia has a 20-year heritage of drug
discovery, a broad portfolio of innovative drugs in the pipeline,
an experienced team of professionals covering all disciplines from
bench to bedside, and commercial operations in Europe and North
America – the ideal constellation for bringing innovative medicines
to patients.
Idorsia was listed on the SIX Swiss Exchange (ticker symbol:
IDIA) in June 2017 and has over 1,200 highly qualified specialists
dedicated to realizing our ambitious targets.
For further information, please
contactAndrew C. WeissSenior Vice President, Head
of Investor Relations & Corporate CommunicationsIdorsia
Pharmaceuticals Ltd, Hegenheimermattweg 91, CH-4123 Allschwil+41 58
844 10
10investor.relations@idorsia.commedia.relations@idorsia.comwww.idorsia.com
The above information contains certain "forward-looking
statements", relating to the company's business, which can be
identified by the use of forward-looking terminology such as
"estimates", "believes", "expects", "may", "are expected to",
"will", "will continue", "should", "would be", "seeks", "pending"
or "anticipates" or similar expressions, or by discussions of
strategy, plans or intentions. Such statements include descriptions
of the company's investment and research and development programs
and anticipated expenditures in connection therewith, descriptions
of new products expected to be introduced by the company and
anticipated customer demand for such products and products in the
company's existing portfolio. Such statements reflect the current
views of the company with respect to future events and are subject
to certain risks, uncertainties and assumptions. Many factors could
cause the actual results, performance or achievements of the
company to be materially different from any future results,
performances or achievements that may be expressed or implied by
such forward-looking statements. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those
described herein as anticipated, believed, estimated or
expected.
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