State of Business
In February 2022, Orphazyme announced that it had been notified by the Committee for Medicinal Products for
Human Use (CHMP) of the European Medicines Agency (EMA) of a negative trend vote as part of the ongoing
review of the Marketing Authorisation Application (MAA) for its investigational product candidate, arimoclomol,
for the treatment of Niemann-Pick disease type C (NPC).
In May 2022, the Company announced that it had signed an agreement to sell substantially all of the
Company’s assets and business activities, including those relating to the development and approval of
arimoclomol and the full claw back liability related to the French early access program, to Zevra Denmark A/S,
a wholly owned subsidiary of Zevra Inc. now known as Zevra Therapeutics (Zevra) for a total of USD 12.8
million in cash and assumed liabilities estimated to equal approximately USD 5.2 million (the Sale of Assets).
Under the terms of the agreement, Zevra agreed to acquire substantially all of Orphazyme’s assets and
business activities, including those relating to the development and approval of arimoclomol, retain a majority
of Orphazyme’s remaining Danish employees, continue the early access programs with arimoclomol and pursue
the potential approval of arimoclomol as a treatment option for NPC.
Since the Sale of Assets, the focus has been to ensure the smooth transition of assets to Zevra. Further, the
Company has also continued to assist its legal representatives with a putative class action lawsuit in the United
States.
In 2022, the business operations and activities that were part of the Sale of Assets agreement with Zevra were
reclassified as discontinued operations, but in 2023 all activities and financials are considered related to
continuing operations.
At the Annual General Meeting in May 2023, the Board of Directors withdraw their positions and was replaced
by Michael Hove (Chairman), Jakob Have and Jakob Bendtsen as board members. In May 2023, it was
announced that the board of directors and CEO/CFO Anders Fink Vadsholt had entered into a severance
agreement pursuant to which Mr. Vadsholt would step down as CEO/CFO of the Company end of September
2023, at which point it was announced that the Company had signed an CEO agreement with Jakob Bendtsen
as the new CEO of the company. Jakob Bendtsen is also continuing in his role as board member.
On July 9, 2021, a putative class action lawsuit was filed against the Company and certain of its current and
former directors and officers in the United States District Court for the Northern District of Illinois. The lawsuit
alleged that certain representations about arimoclomol in the Company’s U.S. IPO offering documents and in
subsequent public statements were false and misleading, in violations of U.S. securities. While the
Management at the time did not believe the class action lawsuit claims had any merit, the Company decided,
for cost control reasons and because of the risks inherent in any litigation, to engage in settlement discussions.
In May 2023, Orphazyme agreed with the plaintiffs on the US Security class action case to settle the case by
Orphazyme paying a settlement amount. A written settlement document was filed by the parties to the Court
which was approved in October 2023. Following the approval there has been a general 100-day objection
period, where the consortia behind the class action could object to the settlement amount. The court did not
receive any objections and the case was finally closed early February 2024. The settlement amount was USD
2,5 million of which USD 0,5 million was covered by insurance leaving a net amount of USD 2 million which
was paid in November 2023.
The Company is in process to liquidate its subsidiaries in US and Switzerland and expect that the liquidation
will be finalized in H1 2024. Following these liquidations, the Company will only consist of the Danish parent
company.
The final parts of the remaining activities have been handed over to Zevra, however the Company believes it is
entitled to receive additional compensation for expenses incurred in the level of DKK 4.5 million. The company
is currently investigating options to recover the amount from Zevra.
The Company has carried out a number of initiatives to strengthen the capital structure and liquidity of the
Company which includes a reverse stock split and capital reductions during November 2023 until January 2024.
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