Idorsia | Financial Information

The company reports on its financial performance on a quarterly basis starting its financial year on January 01.

Financial Status

On April 17, 2024, Idorsia published an Unaudited Financial Status as of March 31, 2024, in connection with an upcoming bondholder meeting.

Unaudited Financial Status

Highlights - 9M 2023

Transaction with Sosei Heptares (hereafter referred as the “Sosei Deal”): Idorsia sold its Asia Pacific (ex-China) operations on July 20 – including selected license rights to products – for a total consideration of CHF 400 million.
Cost reduction initiative targeting a reduction of the fixed cost base at headquarters by approximately 50% expected to become fully effective in early 2024.
Management change in the US: Tausif ‘Tosh’ Butt joined as President and General Manager of Idorsia US in September 2023.
Aprocitentan: Worldwide rights reacquired from Janssen – agreement now effective following clearance by US antitrust authorities.

QUVIVIQ™ (daridorexant): Total net sales of CHF 20 million in the first nine months of 2023.
QUVIVIQ in the US: With CVS and Express Scripts, QUVIVIQ is covered by two of the largest commercial insurance plans. Bids for Medicare Part-D have been submitted with first coverage expected in the new year. The team in the US continues to focus on generating demand and converting it into sales.
QUVIVIQ in Europe: Demand continues to grow in Germany, Italy, and Switzerland. Product made available in Spain in Sept 2023. Launched in the UK in Oct 2023 – NICE Technology appraisal guidance published Oct 2023. Four-week prescription limitation (Anlage III) lifted by GBA in Germany – official publication expected in coming weeks.

Daridorexant – Phase 3 study with daridorexant in Chinese patients initiated by Simcere.
Aprocitentan – NDA under review with the US FDA – new PDUFA date of March 19, 2024 – MAA under review with the European Medicines Agency.
Portfolio review ongoing – The review is made in connection with potential partnership discussions, and a main objective to prioritize assets that can be advanced rapidly and with reasonable financial investment.

As reported

Net revenue 9M 2023 at CHF 131 million.
US GAAP operating expenses 9M 2023 at CHF 275 million and non-GAAP operating expenses 9M 2023 at CHF 517 million.
US GAAP operating loss 9M 2023 of CHF 181 million and non-GAAP operating loss of CHF 420 million.
The Sosei Deal: The sale led to a one-off profit of CHF 363 million of which CHF 68 m are recorded as contract revenue, CHF 302 million recorded as gains on sale of disposal group and CHF 7 million recorded as impairment of intangible assets.

Financial highlights (on the scope excluding the Sosei Deal and related APAC operations in 2023 until closing)

Net revenue 9M 2023 at CHF 29 million, of which CHF 20 million net sales with QUVIVIQ in the US and Europe (Germany, Italy, Switzerland) and CHF 9 million contract revenues.
US GAAP operating expenses 9M 2023 at CHF 537 million and non-GAAP operating expenses 9M 2023 at CHF 486 million.
US GAAP operating loss 9M 2023 of CHF 509 million and non-GAAP operating loss of CHF 455 million.

Financial Guidance - 9M 2023

“The Sosei Deal, in conjunction with the almost complete cost reduction initiative at headquarters and the ongoing portfolio prioritization, allows us to both extend our cash runway well into the first quarter of 2024 and improve our guidance for 2023 with a lower spend. Our short-term priority is to further extend our cash runway and we are actively reviewing all avenues including potential out-license deals with a few balls in the air that we expect to catch in the upcoming months.”

André C. Muller (October 2023)
Chief Financial Officer

The 2023 financial outlook is calculated based on: QUVIVIQ (daridorexant) being available in the US, Germany, Italy, Switzerland, Spain, and the UK; 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 accounting for the Sosei Deal, which led to a one-off profit of CHF 363 million, impacts US GAAP and non-GAAP numbers, therefore, Idorsia’s guidance excludes the Sosei Deal and related APAC operations in 2023 until closing. This gives a better view of the scope of operations that the company is currently operating.

Following the Sosei Deal, the cost reduction initiative, the portfolio review and the first nine months operations, the company is updating its full year 2023 financial guidance and expects a US GAAP operating loss of around CHF 670 million (previously CHF 735 million) and non-GAAP operating loss of around CHF 600 million (previously CHF 650 million) for 2023, both metrics include the restructuring charge, exclude APAC operations in 2023 until the closing of the Sosei Deal and the one-off impact of such transaction, and exclude any unforeseen events.

Financial Result - 9M 2023

US GAAP results

As of September 30, 2023 (as reported)

	Nine Months		Third Quarter
in CHF millions, except EPS (CHF) and number of shares (millions)	2023	2022	2023	2022
Net revenues	131	43	80	21
Operating expenses	(275)	(653)	150	(227)
Operating income (loss)	(144)	(610)	231	(206)
Net income (loss)	(181)	(635)	224	(216)
Basic EPS	(1.02)	(3.58)	1.26	(1.22)
Basic weighted average number of shares	178.2	177.4	178.4	177.5
Diluted EPS	(1.02)	(3.58)	0.96	(1.22)
Diluted weighted average number of shares	178.2	177.4	232.5	177.5

US GAAP net revenue of CHF 131 million in the first nine months of 2023 (CHF 43 million in the first nine months of 2022) consisted of product sales of QUVIVIQ (CHF 20 million) and PIVLAZ (CHF 34 million; until the closing on July 19, 2023 of the Sosei Deal – See below), the one-off impact of the Sosei Deal (CHF 68 million), and other contract revenues mainly Mochida (CHF 4 million), Johnson & Johnson (CHF 4 million) and Neurocrine (CHF 2 million).

US GAAP operating expenses in the first nine months of 2023 amounted to CHF 275 million (CHF 653 million in the first nine months of 2022), of which CHF 7 million related to cost of sales (CHF 4 million in the first nine months of 2022), CHF 235 million to R&D expenses (CHF 278 million in the first nine months of 2022), CHF 318 million to SG&A expenses (CHF 372 million in the first nine months of 2022), CHF 11 million restructuring charges and a one-off income of CHF 295 million relating to the Sosei Deal.

US GAAP net loss in the first nine months of 2023 amounted to CHF 181 million (CHF 635 million in the first nine months of 2022). The decrease of the net loss is mainly attributable to the one-off income related to the Sosei Deal but was also driven by higher revenues and lower operating expenses throughout all functions.

The US GAAP net loss resulted in a net loss per share of CHF 1.02 (basic and diluted) in the first nine months of 2023, compared to a net loss per share of CHF 3.58 (basic and diluted) in the first nine months of 2022.

Non-GAAP* measures

As of September 30, 2023

	Nine Months		Third Quarter
in CHF millions, except EPS (CHF) and number of shares (millions)	2023	2022	2023	2022
Net revenues	131	43	80	21
Operating expenses	(517)	(621)	(124)	(214)
Operating income (loss)	(386)	(577)	(44)	(193)
Net income (loss)	(420)	(597)	(51)	(202)
Basic EPS	(2.36)	(3.36)	(0.29)	(1.14)
Basic weighted average number of shares	178.2	177.4	178.4	177.5
Diluted EPS	(2.36)	(3.36)	(0.29)	(1.14)
Diluted weighted average number of shares	(2.36)	(3.36)	(0.29)	(1.14)

* 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 nine months of 2023 amounted to CHF 420 million: The CHF 239 million difference versus US GAAP net loss was mainly due to the one-off effect of the Sosei Deal (CHF 295 million income), depreciation and amortization (CHF 15 million), share-based compensation (CHF 26 million), restructuring charges (CHF 11 million) and a loss on marketable securities (CHF 4 million).

The non-GAAP net loss resulted in a net loss per share of CHF 2.36 (basic and diluted) in the first nine months of 2023, compared to a net loss per share of CHF 3.36 (basic and diluted) in the first nine months of 2022.

Company Funding - 9M 2023

Liquidity as of September 30, 2023

At the end of the first nine months of 2023, Idorsia’s liquidity amounted to CHF 255 million.

The liquidity of CHF 255 million includes cash and cash equivalents of CHF 205 million and short-term deposits of CHF 50 million.

Total debt as of September 30, 2023

Type of debt	Debt holder	Nominal Amount	Debt maturity
Convertible loan	Cilag Holding AG	CHF 335 million	June 15, 2027
Convertible bonds	-	CHF 200 million	July 17, 2024
Convertible bonds	-	CHF 600 million	August 4, 2028
Sale and leaseback transaction	-	CHF 164 million	-