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Up to 500 of the 1,200 jobs are to be cut and research projects canceled. There is a lack of funds.
The biotech company Idorsia has to save rigorously because of its tight financial situation. The Basel-based company wants to cut up to 500 jobs and only the most important ones will be continued in the current research projects.
The cost-cutting program aims to cut costs at headquarters by about half, according to a statement. The difficulties can therefore be attributed to product sales, which were more sluggish than hoped, and an overall difficult global financial environment.
Focus on promising research
The result is that Idorsia has to cut costs. This significantly reduces investments in research and development. In addition, the biotech company will focus on those activities that can be advanced quickly and at a reasonable financial cost.
Founded by the Clozels
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Legend: Jean-Paul Clozel is now CEO of Idorsia. Reuters/Arnd Wiegman
Idorsia is the second company of the Clozels, well-known in the biotech scene. Martine and Jean-Paul Clozel sold their first pharmaceutical company, Actelion, to Johnson & Johnson in 2017 for $30 billion. They kept part of the range of research to themselves and immediately founded the new company Idorsia. Among other things, they research the development of new drugs, such as sleeping pills. (Jodd)
Those projects that don’t match the company’s priorities are either halted or prepared for partnership or out-licensing.
Slimmer on the road from 2024
At Idorsia, up to 500 of the approximately 1,200 jobs are to be cut. According to the information, they will be eliminated primarily in the area of research and development and the associated support functions.
The company strives to minimize the number of potential layoffs through natural turnover, retirements and other measures. A consultation process with the employee representatives at headquarters has been initiated.
We cannot sustain the current level of investment.
The savings program should be completed by the end of the year after a consultation process, and the cost reduction should take full effect from the beginning of 2024.
“I deeply regret having to initiate such an initiative, but we simply cannot sustain the current level of investment,” company boss Jean-Paul Clozel is quoted as saying in the statement.
Selling the Asian business is not enough
Idorsia has been in a bind for a long time because the company urgently needs fresh funds to be able to finance its research efforts. Recently, there had been repeated speculation about a possible capital increase.
Only yesterday, Thursday, did the biotech company announce that it was selling its Asian business for CHF 400 million. Experts welcomed this step in principle, but at the same time emphasized that these funds were not sufficient to cover the capital requirements well beyond the current year.