OBSV - ObsEva drops 78% on plans for restructuring after setback for uterine fibroids drug

The shares of Swiss biotech ObsEva SA ( NASDAQ: OBSV ) plunged ~78% after the company announced Wednesday it intends to begin a corporate restructuring after the FDA cited issues related to the marketing application of uterine fibroids therapy linzagolix.

After the FDA raised the review issues, the company “believes the changes are necessary due to the commercial landscape and potential additional capital needed to fund the completion of the linzagolix clinical development program,” ObsEva ( OBSV ) said.

The resolution of the identified issues may not be complete by Sep. 13, 2023, the FDA action date issued for the linzagolix New Drug Application (NDA).

“The FDA’s review of the NDA is still ongoing and ObsEva has not been informed of any final decision by the agency,” the company said.

The corporate restructuring will involve an end to a license agreement the company has signed with Japanese pharma company Kissei for linzagolix.

In addition, the company also expects to restructure its global license agreement with Organon ( OGN ) for ebopiprant, a prostaglandin F2? receptor antagonist undergoing studies for preterm labor.

The restructuring process will include changes to the sublicense agreement with Yuyuan BioScience for the oral oxytocin receptor antagonist nolasiban in China.

The company has also decided to file for a court-sanctioned moratorium, which, if granted, will offer temporary relief from debt commitments and bankruptcy proceedings.

The U.S. regulatory setback for linzagolix comes weeks after the company announced its European approval as a treatment for symptoms related to uterine fibroids in adult women.

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