One of the doyens of European biotech is stepping back from general management. Jean-Paul Clozel founded rare disease focused Actelion along with his wife Martine Clozel in 1997, a company that went on to become publicly traded and launch three blockbuster drugs. The Clozels then sold up to J&J for an astonishing USD 30 billion in 2017, the biggest ever deal for a European biotech. For the last seven years, Clozel has served as CEO of Idorsia, a rebranded spinoff of Actelion’s drug discovery and early clinical pipeline business.
Although retiring from the CEO role, Clozel plans to stand for election as Chairman of Idorsia’s Board of Directors at this year’s annual general meeting, a move that will presumably meet little resistance from the rest of the Board given his status as the company’s founder and driving force. Although already a billionaire, a quiet and luxurious retirement away from the business is clearly not on Clozel’s mind as he approaches 70 years old. “Having devoted so much energy to Idorsia, I want to stay engaged and support the company to realise its potential,” he said in a company statement. Current Idorsia CFO André Muller will take on the CEO role.
While Idorsia has been able to launch three drugs in less than seven years of existence – a supercharged return given the long timelines commonly seen in the life sciences industry – the company is still yet to turn a profit. Idorsia faced several financing challenges last year, including the costs associated with establishing commercial operations as well as a massive USD 343 million payout to J&J to reacquire aprocitentan, a drug for resistant hypertension originally developed by Clozel’s team at Actelion.
Additionally, Idorsia’s insomnia medication QUVIVIQ has encountered challenges in the US market because it is part of a class known as dual orexin receptor antagonists, which are classified as Schedule IV controlled substances. This classification leads to stricter regulations and access issues, making it harder for patients to obtain prescriptions.
Clozel euphemistically described 2023 as “a year of adaptation” in the company’s latest annual report. Idorsia has had to cut its cloth accordingly, selling up its Asia-Pacific operations to Nxera Pharma, partnering its Phase III assets with Viatris, reducing its headcount, and prioritising its portfolio assets. This has given it the “breathing space” to repay its debts and continue executing its strategy in 2024 and beyond, wrote Clozel and Board Chairman Mathieu Simon in a letter to shareholders.
A frequent PharmaBoardroom interviewee over the years in the context of our coverage of the Swiss pharma ecosystem, Clozel has always been forthright in his opinions. Here we take a look back on some of his key statements and insights.
2016: M&A? No Way!
Back in 2016, when leading Actelion and just months from sealing the USD 30 billion J&J deal, Clozel was bullish in rejecting the value that being acquired could bring. “I do not see the value in such acquisitions,” he proclaimed. “It merely shifts value from one place to another and does not create anything new. If you put together a company with 20,000 scientists together with another company with 20,000 scientists, you do not double the output. There are advantages for big companies in acquiring smaller ones in terms of synergies and savings. But when it comes to innovation, it is my belief that two researchers will always have more ideas than one. With mega mergers, research groups frequently get merged as well, and the result is fewer ideas.”
He added “In terms of the level of our innovation, I am convinced that we would be less innovative if we were integrated within another company. As a matter of consistency, we do not pursue such an approach with other smaller companies.”
2017: The Right Deal at the Right Time
Just a year later, we spoke to Clozel after he had sealed the highly lucrative and somewhat unique J&J deal. J&J acquired Actelion’s sales arm while the development branch became Idorsia, still led by Clozel who explained why he had U-turned on his attitudes to M&A in the intervening months.
“I would like to extend my sincere gratitude to J&J, because they realised the mutually-beneficial nature of this deal for both sides. Sometimes in these situations, everyone is interested in making the best deal for themselves without considering whether it is a good one for the other party involved and for society in general – as yes, the ultimate concern should always be the patient. There was no value destruction. It is true that I have always claimed I would never sell, but we didn’t sell the company, we were bought. J&J made a fair offer that Actelion could not refuse, and I hope there will be more deals like this in the future.”
Clozel noted that Idorsia would create its own identity as it evolved. As “a drug hunting company,” he stated that its primary concern would not be to bring products to market as soon as possible, but to focus on discoveries that potentially address unmet medical needs. “This is uncharted territory!” he proclaimed. “I feel like Christopher Columbus. I want to discover something, but I do not know what it will be”
He also added that Idorsia was aiming to become profitable in between five and six years (2022 and 2023), a goal that has not yet been achieved as of mid-2024.
2021: Small Molecules and Inching Closer to Profitability
Our last conversation with Clozel was conducted remotely during the COVID-19 pandemic in 2021. In that interview, he explained why – in a world of pharma R&D driven primarily by large molecule biologics – Idorsia was trying to become “the best small molecule company in the world.”
“When you have started two companies, people think that you like risk,” he said. “In fact, I hate risk and have tried to avoid it my entire life. One big risk is technological. New technologies are inherently risky. For example, from seeing cell and gene therapy as something of a home run people are now waking up to the fact that it is not so easy.
“Therefore, I like using very established technology: small molecules. “We try to look at diseases which can only be addressed through small molecules – of which there are many – and we are doing very well. I want Idorsia to become the best small molecule company in the world.”
Clozel also discussed the rapid development that Idorsia had experienced and its journey towards becoming a profitable company. “Idorsia is a ten-to-15-year story condensed into just three years,” he noted. “We are discussing the launch of a drug three years after its creation; something unheard of in the life of a biotech which usually take more than ten years to get to the market.”
“We are closer and closer to becoming profitable and revenues will likely start as soon as this year as we get royalties from J&J for ponesimod once hopefully approved later in March. As we launch more drugs, other sources of revenue will come in and we are confident that they will be large.”
New Beginnings
While Idorsia has still not reached this status as a profitable company, Clozel’s legacy – along with that of his wife and Idorsia Chief Science Office Martine – as perhaps Europe’s most successful biotech entrepreneur is secure. However, it remains to be seen whether the move from general management up to the boardroom will suit a man who has spent the past quarter of a century running his own business.
Doubtless, new CEO incumbent Muller will feel the pressure of filling the shoes of an illustrious predecessor still in the building, although Clozel has already offered a ringing endorsement. “André has shown the perfect qualities of a biotech leader,” he said in a company statement. “[These are] Creativity, solution-oriented, resilient, a team-player and pragmatic – all qualities that we need to successfully discover and develop innovative drugs … I have absolute confidence that he is the right person to prepare the company for an exciting future.”
Article image source: Idorsia
