ObsEva, desperate for cash, sells rights to PhII drug in bid to extend runway, test new pregnancy candidate
Just a few months after ObsEva substantially imploded over a big setback relating to its lead drug, linzagolix, the women’s health biotech is selling rights to one of only two drugs left in its pipeline.
ObsEva put out word Tuesday that it is selling all its rights to ebopiprant, a PGF2α receptor antagonist being tested in Phase II for preterm labor, to XOMA for $15 million upfront, plus $98 million in milestones for a total of $113 million.
The biotech added that the deal includes the company’s license agreements for the drug with both Organon and Merck KGaA. The licensing deal with Organon was reached last year, giving Organon global development, manufacturing and commercial rights to ebopiprant.
As for how it affects ObsEva, it will allow the biotech to get out of debt (resolving its over-indebtedness position, per a company statement), free it from Swiss bankruptcy hearings and regain compliance with Nasdaq.
ObsEva CEO Brian O’Callaghan noted that the deal gets ObsEva more than a year of runway, allowing the company to focus on nolasiban, an oxytocin receptor antagonist candidate the company in-licensed from Merck KGaA to improve in vitro fertilization. ObsEva currently has worldwide, exclusive, commercial rights for the drug except in China, where Yuyuan Bioscience holds development and commercialization rights.
This is one of the newest developments for the company after the company imploded back in July — thanks to the FDA, who raised an issue with certain deficiencies in ObsEva’s NDA for then-lead drug linzagolix for uterine fibroids, which ObsEva had in-licensed from Kissei Pharmaceutical back in 2015. Although ObsEva found ways to secure approvals in the EU and the UK for the drug, ObsEva decided to hand it back to Kissei after the FDA setback.
After a massive stock fail, the biotech enacted mass layoffs, announcing plans to cut 70% of its employees and new chief strategy officer Katja Buhrer by the end of the year and save more than $7.5 million on annual expenses.
ObsEva declined an interview request from Endpoints News before deadline.