Arecor Therapeutics PLC (AIM:AREC) said it is to wind down operations at subsidiary Tetris Pharma over the current year as part of a regrouping around its core insulin products.
Agreement has been reached with Xeris BioPharma over the return of the rights to Tetris' main product, severe hypoglycaemia (low glucose) treatment Ogluo,
Arecor said the decision followed a strategic review of Tetris, which determined that while Ogluo remains a proven product, rising supply chain costs and fixed selling prices in the licensed territories have significantly reduced margins.
The extended timeline required to achieve breakeven no longer presents an optimal investment case, Arecior added especially after a partner lost a key NHS tender.
Impairment costs and goodwill for Tetris Pharma will mean a £3 million charge in the 2024 numbers.
Sarah Howell, Arecor’s chief executive, said: "This strategic decision consolidates Arecor's focus on research and development in areas in which our innovative Arestat technology can deliver transformational opportunities.
“These include the progression of our next-generation insulin portfolio and innovation in the field of the oral delivery of peptides.
“We will also continue to progress our partnered portfolio of Arestat-enabled superior therapeutics under our revenue-generating technology licensing model.
“These present the greatest opportunities for the Group to build significant value and we remain confident in our strategy and excited about the opportunities for Arecor."
Ogluo is commercialised by Tetris Pharma under a license and supply agreement with Xeris BioPharma.