With ominous FDA talks, ObsEva scraps lead women's health drug, plots layoffs in major restructuring

An approval decision for ObsEva's uterine fibroids candidate, linzagolix, isn’t likely to happen on time. After getting that bleak hint from the FDA, women’s health specialist ObsEva is taking a sharp turn.

The FDA informed ObsEva that its application for oral GnRH antagonist linzagolix in uterine fibroids has important deficiencies that prevents the agency from moving the review further. Although the Swiss biotech said it has a plan to address the problems with additional data, it doesn’t believe it can deliver a fix by the original FDA target decision date of Sept. 13.

Without a previously expected influx of cash, ObsEva is taking a series of drastic measures.

After considering “the cost of ongoing development and the competitive impact of a potential delay” for the FDA approval, the company has decided to scrap linzagolix altogether, returning the license to its discoverer, Japanese company Kissei, ObsEva said Tuesday. A sublicense in Europe and certain other territories with Theramex will also be transferred to Kissei. That’s despite the drug having won approvals in the EU and the U.K. just last month under the brand name Yselty.

Along with linzagolix, some employees will also have to go. The company will launch a “mass dismissal process,” ObsEva said, but the exact number of job cuts will be decided later after consultation with the company’s employees.

ObsEva will now focus first on ebopiprant, a potential treatment for preterm labor that the company licensed to Organon a year ago. ObsEva itself in-licensed the PGF2α receptor antagonist from Merck KGaA back in 2015.

Under the 2021 agreement, Organon gained global development, manufacturing and commercial rights to ebopiprant. ObsEva received $25 million upfront, and $475 million in development, regulatory and commercial milestones as well as tiered double-digit royalties on sales are also up for grabs.

In addition, ObsEva will focus on an also troubled drug candidate, nolasiban. The oral oxytocin receptor antagonist was designed to improve the success rate of in vitro fertilization procedures. The drug hit its pregnancy rate goal in one phase 3 trial but failed in another in 2019.

Since the flop, the company has basically started over with the drug, exploring the possibility of using a higher dose, earlier and longer drug exposure and potentially narrowing the target patient population. In 2020, ObsEva out-licensed China rights to local firm Yuyuan BioScience.

And now, as part of the restructuring, ObsEva said it’s pondering additional ex-China licensing agreements for nolasiban.

To help with the transition, ObsEva has decided to apply for a moratorium process in Switzerland, which grants a company financial protection against debtors during a restructuring.

Besides the reorg, ObsEva said its Chief Administrative Officer Fabien de Ladonchamps is stepping down from the company’s executive committee but will remain a senior manager.

The entire women’s health market has had some ups and downs lately because of the pandemic. For example, Organon’s women’s health franchise saw sales grow 4% to $1.6 billion in 2021. Meanwhile, last year, AbbVie was reportedly exploring a sale of its legacy Allergan women’s health business, but no deal has happened so far.