When chairman Jean-Paul Clozel called the biotech a “20-year-old startup”, he wasn’t reaching for poetry.
Actelion — the company he and his wife Martine built from scratch after Roche cut funding for their cardiovascular research — grew into Europe’s most profitable biotech and eventually sold for $30bn.
Idorsia was the implied sequel. When J&J came for Actelion, the Clozels resisted, then demanded that the entire R&D pipeline be spun into a new vehicle. Thus Idorsia, born with a pedigree and a promise.
When it floated at $1.5bn, Idorsia held the makings of “a second Actelion, if not a better Actelion” in their telling. The founders and several directors bought shares in the open market. They also extended the company unusually generous financing through a convertible note.
The newborn had every advantage: elite leadership, deep scientific talent, a sweet spot in Switzerland’s prestigious pharma cluster, four potential blockbusters closing in on late-stage trials, ample cash and a market in love with biotechs.
Eight years later, reality dragged the balance sheet back to earth. The flagship insomnia drug failed to scale in the US. Two key programs stumbled. Cash burn ballooned. Once visible on the horizon, profitability slipped clean out of view.
The reckoning was brutal. Idorsia sold crown-jewel assets to buy time, cut most of its R&D staff and reworked its convertible debt on punishing, dilutive terms. The share price imploded and bankruptcy is no longer a distant tail risk.
As a result, Jean-Paul Clozel stepped down as chief executive. After a brief interlude in which longtime moneyman André Muller trimmed staff and R&D to keep the lights on, Srishti Gupta was appointed to the top job.
Ms. Gupta is married to Novartis chief executive officer Narasimhan. The coincidence has already sparked takeover chatter, though nothing substantive exists beyond the optics.
Idorsia is a harsh reminder that you can have brains, stamina, integrity and a head start, and still fail spectacularly. Few biotechs have started with more hand-dealt aces. Fewer have managed to misplay them all.