ObsEva Announces Wind-Down of Operations and Notifies SIX that it Will Lack the Resources to Establish Audited IFRS Financial Statements for 2023
- ObsEva SA is facing financial challenges leading to the termination of all employees and potential delisting from the SIX Swiss Exchange.
- CEO Fabien de Ladonchamps will continue to lead the company during the moratorium period granted by the Geneva court.
- The company's cash position is low, hindering its ability to maintain operations and prepare audited financial statements under IFRS.
- ObsEva is exploring options for restructuring or liquidation while seeking to monetize Nolasiban, a compound aimed at increasing live birth rates for women undergoing IVF.
- Risk of delisting from the SIX Swiss Exchange due to financial constraints.
- Substantial risk of lacking resources to prepare audited financial statements for 2023.
- Potential inability to meet listing requirements on the SIX Swiss Exchange.
- Low cash position affecting the company's operational capabilities.
- Uncertainty surrounding the future of ObsEva's workforce and operations.
Insights
The announcement by ObsEva SA regarding the wind-down of its operations and potential delisting from the SIX Swiss Exchange represents a critical event with significant implications for shareholders and creditors. The inability to have financial statements audited under IFRS suggests severe liquidity constraints, which typically indicates a distressed financial position. This could lead to substantial losses for existing shareholders as the equity value may be eroded in the event of liquidation or restructuring. Creditors may also face challenges in recovering loans or outstanding payments due to the moratorium, which protects the company from claims. The market's reaction to such news is often negative, potentially leading to a sharp decline in stock price and increased volatility. It's essential for investors to closely monitor the company's next steps, particularly any developments regarding the monetization of Nolasiban, which could provide some financial relief if successful.
The focus on monetizing Nolasiban, a compound designed to improve live birth rates in IVF treatments, is a strategic move for ObsEva. However, the current financial situation overshadows the potential of this asset. The biopharmaceutical industry is capital-intensive, with long development cycles and high regulatory hurdles. ObsEva's financial distress illustrates the risks inherent in the sector, especially for companies that are unable to secure steady funding through milestones. For competitors and potential acquirers, the distress of ObsEva may present an opportunity to acquire valuable assets at a lower cost. However, the success of such an asset's monetization amidst a wind-down process can be complex and uncertain, potentially affecting the asset's value and attractiveness to potential buyers or licensees.
The temporary moratorium granted to ObsEva by the Tribunal de première instance of Geneva is a legal measure that provides the company with breathing space to explore restructuring or liquidation options without the immediate pressure from creditors. The appointment of a commissioner to supervise the company's activities ensures that the interests of all parties, including creditors and employees, are considered during this process. From a legal standpoint, the moratorium is a double-edged sword; it offers protection to the company but also signals to the market and stakeholders that the company's financial health is compromised. This legal development will likely influence the strategies of creditors, who may need to reassess their approach to recovery in light of the moratorium and the company's limited cash position.
Ad hoc announcement pursuant to Art. 53 LR of the SIX Swiss Exchange
Geneva, Switzerland – 28 February 2024 – ObsEva SA (SIX: OBSN), a biopharmaceutical company developing novel therapies for women's health, today announced that it will wind-down its operations with the termination of all of its employees, including Fabien de Ladonchamps, CEO, and notified SIX Swiss Exchange's listing authority that there was a substantial risk that it will lack the resources to have financial statements for 2023 prepared under IFRS audited, and that it is as a result likely not going to be able to satisfy the requirements for maintaining its listing on SIX. Fabien de Ladonchamps, CEO, will remain in function during the notice period for the duration of the moratorium process and beyond, as needed.
On 29 January 2024, the Tribunal de première instance of Geneva granted a temporary moratorium (sursis provisoire) to ObsEva for a period of four months ending 29 May 2024 and appointed a commissioner (commissaire) to supervise the company's activities during the process. The moratorium limits the ability of ObsEva's creditors to enforce their claims against the company while it evaluates the possibility of a restructuring or orderly liquidation.
Fabien de Ladonchamps, Chief Executive Officer, said: “While we are pursuing our efforts to monetize Nolasiban, our compound designed to increase live birth rate for women undergoing IVF, ObsEva's cash position remains low, which compromises our ability to keep operating the company with existing workforce and to have financial statements prepared in accordance with IFRS audited. Therefore, we decided to inform SIX of the situation. This may lead to a delisting.”
About ObsEva
ObsEva is a biopharmaceutical company developing novel therapies to improve women’s reproductive health and pregnancy. ObsEva has established a development program focused on improving in vitro fertilization success rates. ObsEva is listed on the SIX Swiss Exchange where it is traded under the ticker symbol “OBSN”. For more information, please visit www.ObsEva.com.
For further information, please contact:
For general information: For investors information:
contact@obseva.ch IR@obseva.ch
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FAQ
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