On the Brink, Orphazyme Announces Second Round of Layoffs

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Amidst a massive restructuring effort, Danish biotechnology firm Orphazyme announced another round of layoffs, this time involving global employees. 

The Orphazyme board of directors decided to cut 50% of its current global staff count after carefully considering its financial state. The layoff decision, the firm's second in just a year, accompanied a petition for an in-court restructuring following the receipt of a negative trend vote from the European Medicines Agency's Committee for Medical Products for Human Use on its marketing authorization application to use arimoclomol to treat Niemann-Pick disease type C. 

Concurrent with this information, Orphazyme named a new chief executive, Anders Vadsholt, to take over for Christophe Bourdon, who joined Leo Pharma as its new CEO. 

"Following the very disappointing outcomes from the regulatory authorities in the U.S. and E.U., we are forced to consider some extremely difficult choices,"  Vadsholt in a statement. "Our employees have worked tirelessly with a focus on bringing arimoclomol as a potential new treatment option to patients with Niemann-Pick disease type C. It is with a heavy heart that we are faced with the prospect of parting ways with valued colleagues, and I want to thank them for their hard work, their commitment to Orphazyme, and their outstanding dedication to showing up for patients in need." 

The court-mediated restructuring activity's main goal is to evaluate which areas of the company can profitably continue and which require the most help. The board will also determine whether there's a need to inject additional capital or to sell parts of all of Orphazyme's assets. 

Over the past month, the company closed down commercial operations in the U.K., the U.S. and Germany. On March 11, the firm will begin negotiations under the Danish Act on Collective Redundancies and the Act on Information and Consultation. 

In June 2021, the company announced that it is laying off around two-thirds of its workforce, including teams in Europe and the U.S., to free up resources and focus only on "essential activities." At that time, board members Rémi Droller, Martijn Kleijwegt and Anders Hedegaard also resigned from their positions. 

Aside from the latest job cuts, Orphazyme will also be voluntarily delisting American Depositary Shares from the Nasdaq Global Select Market. On March 21, the company will file a Form 25 with the Securities and Exchange Commission to start the delisting process, which it hopes will take effect on March 31. Deregistration of the ADSs and the underlying ordinary shares will happen 90 days after Form 25 is sent. Orphazyme will then file a Form 15 with the SEC to halt reporting obligations.

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