Company of the week: Poxel SA: Navigating Judicial Reorganization While Clinical Assets Retain Promise

Poxel SA, a French biopharmaceutical company that successfully developed and commercialized the first-in-class diabetes drug TWYMEEG® in Japan, filed for judicial reorganization on July 29, 2025, after shareholders rejected critical financial resolutions triggering immediate debt defaults despite securing a $50 million royalty monetization deal with OrbiMed just months earlier. The company, with a current market capitalization of approximately €18-20 million and stock trading at €0.30-0.32 per share, now operates under a six-month court observation period through February 2026 while pursuing strategic alternatives including potential asset sales, partnerships, or acquisition.

Despite financial distress with only €1.3 million in cash as of June 30, 2025, Poxel retains valuable assets including escalating royalties from TWYMEEG® sales in Japan that exceeded ¥5 billion in 2024, a Phase 3-ready NASH drug candidate PXL065 that showed promising Phase 2 results, and multiple rare disease programs with FDA Fast Track and Orphan Drug designations targeting markets projected to reach $2.3 billion by 2035.

Company Evolution and Corporate Structure

From Merck Spinoff to Metabolic Disease Pioneer

Poxel emerged in 2009 as a spinoff from Merck Serono following Merck KGaA's strategic decision to divest metabolic disease assets that no longer aligned with its portfolio priorities after acquiring Serono in 2007. Thomas Kuhn, who had led diabetes clinical development at Merck since 2000, became founding CEO and secured €16 million in Series A funding from Edmond de Rothschild Investment Partners, InnoBio fund, and Crédit Agricole Private Equity in 2010.

The company went public on Euronext Paris in February 2015 at €6.66 per share, raising €26.8 million to advance its pipeline of first-in-class treatments targeting mitochondrial dysfunction in metabolic diseases.

The company's breakthrough came with Imeglimin, a novel mitochondrial bioenergetics modulator that became the first drug in the new "glimin" class to receive regulatory approval. After signing a transformative partnership with Sumitomo Pharma in October 2017 worth up to ¥33.75 billion (approximately $300 million), Poxel successfully guided the drug through Japanese clinical trials.

The Pharmaceuticals and Medical Devices Agency approved Imeglimin in June 2021 for type 2 diabetes treatment, and Sumitomo launched it as TWYMEEG® in September 2021. By 2024, TWYMEEG® had achieved net sales exceeding ¥5 billion, triggering higher royalty tiers and milestone payments for Poxel.

Ownership Structure and Governance Changes

The reorganization proceedings have fundamentally altered Poxel's governance and ownership dynamics. While historical ownership included Bpifrance at approximately 12.2%, management and founders at 8.3%, and public float at 79.5%, the current structure remains unclear as creditors negotiate recovery options. IPF Partners, as senior secured creditor, now has board representation through Alexandre Bragadir and significant influence over strategic decisions during the observation period.

The complete board overhaul on July 31, 2025 replaced all existing directors including founder-CEO Thomas Kuhn, Chairwoman Pascale Boissel, Richard Kender, and Mohammed Khoso Baluch. The new board consists of restructuring specialist Nicolas Trouche as CEO, pharmaceutical industry veteran Sophie Jacq Lapointe with over 20 years experience at Roche, Sanofi, and Ipsen, Amit Kohli bringing 30 years of experience from Sanofi and Becton Dickinson, and the IPF Partners representative. This transition reflects creditor agreement on leadership needed to navigate the reorganization process while preserving asset value.

Clinical Pipeline and Development Programs

TWYMEEG® (Imeglimin) - Commercial Success in Japan

Imeglimin represents Poxel's flagship first-in-class therapy, now approved and marketed in Japan. Mechanistically, Imeglimin targets mitochondrial function in energy-producing tissues to address core defects in type 2 diabetes. Specifically, it acts on the mitochondria in liver, muscle, and pancreatic beta cells to improve glucose homeostasis through multi-factorial effects: inhibiting hepatic gluconeogenesis, increasing muscular insulin-mediated glucose uptake, and enhancing insulin secretion from pancreatic cells.

The drug modulates the mitochondrial respiratory chain and oxidative phosphorylation, thereby improving the energy status of cells and insulin signaling.

TWYMEEG's commercial performance continues showing strong growth under Sumitomo Pharma's commercialization. Q1 2025 generated €1.066 million in royalties from JPY 172 million, representing 137% year-over-year growth. FY2024 achieved the critical JPY 5 billion net sales threshold, triggering 10% royalties and a JPY 500 million milestone payment. Gross sales reached JPY 7.6 billion in FY2024 (€47.1 million), up 65% from FY2023.

Sumitomo Pharma projects FY2025 gross sales of JPY 11.2 billion (€69.4 million), a 47% increase that could trigger 12% royalties and a JPY 1 billion milestone payment if the JPY 10 billion threshold is reached. In April 2025, Japan's PMDA approved an expanded label for patients with moderate to severe renal impairment, broadening the addressable market.

PXL065 - Deuterated R-Pioglitazone for NASH and Rare Diseases

PXL065 is Poxel's lead investigational drug for non-alcoholic steatohepatitis (NASH, also termed metabolic dysfunction-associated steatohepatitis or MASH). It is a deuterium-modified R-stereoisomer of pioglitazone, engineered to retain pioglitazone's NASH efficacy while minimizing side effects. Using deuterium substitution, Poxel's scientists stabilized the R-pioglitazone isomer, which lacks significant PPARγ agonist activity while still exerting "non-genomic" thiazolidinedione (TZD) actions.

The Phase 2 DESTINY-1 trial met its primary endpoint, demonstrating statistically significant liver fat reduction across all doses with 21-25% reduction compared to placebo (p=0.008-0.02). Critically, 40-50% of PXL065-treated patients showed at least one-stage fibrosis improvement without NASH worsening versus 17% for placebo, while avoiding the dose-dependent weight gain and edema that limit traditional pioglitazone use.

PXL065 also has potential in rare metabolic indications. Given mechanistic overlaps, Poxel is exploring PXL065 for X-linked adrenoleukodystrophy (ALD), particularly the adult form called adrenomyeloneuropathy (AMN). The FDA granted Orphan Drug designation and Fast Track status for PXL065 in ALD (AMN subtype) in early 2022. Phase 3 development for NASH and Phase 2a biomarker studies in ALD remain on hold pending financing or partnership.

PXL770 - Direct AMPK Activator for Rare Diseases

PXL770 is a first-in-class direct activator of adenosine monophosphate-activated protein kinase (AMPK), a central energy sensor in cells that regulates metabolic pathways. The compound received FDA Fast Track designation and Orphan Drug designation for both X-linked adrenoleukodystrophy and autosomal dominant polycystic kidney disease (ADPKD).

In preclinical ALD studies, PXL770 reduced very long-chain fatty acid levels by 25% in brain and 32% in spinal cord tissue in disease models. The compound's direct AMPK activation is noteworthy because most existing metabolic drugs activate AMPK only indirectly. Despite promising preclinical data, planned Phase 2a trials in adult AMN patients remain suspended due to lack of funding.

Vonafexor (EYP001) - Partnered FXR Agonist

PXL007, the code Poxel used for a farnesoid X receptor (FXR) agonist program, was licensed to ENYO Pharma in 2015 for infectious disease applications. ENYO's lead FXR agonist, known as EYP001 or vonafexor, has progressed through clinical trials for hepatitis B virus. ENYO secured €39 million in Series C funding in January 2024 co-led by OrbiMed to continue development. Poxel is entitled to milestone payments as vonafexor advances and royalties on any future sales.

Partnership Economics and Financial Arrangements

Sumitomo Pharma Partnership Structure

The 2017 Sumitomo partnership covered Japan, China, South Korea, Taiwan, and 9 other Asian markets with deal terms including ¥4.75 billion upfront (~$42 million), up to ¥2.75 billion in development milestones, and additional sales-based milestone payments plus tiered royalties on net sales. The royalties escalate from 8% up to 18% based on sales thresholds.

In practice, Poxel earns 8% royalty on Japanese net sales initially, rising to 10% once annual net sales exceed ¥5 billion and to 12% above ¥10 billion, with further tiers up to 18% at higher sales. Additionally, Sumitomo agreed to two one-time sales-based milestone payments: ¥500 million (~€3.1M) when net sales hit ¥5 billion, and ¥1 billion (~€6.3M) at ¥10 billion.

Importantly, Poxel had an obligation to Merck Serono for Imeglimin: Merck receives a fixed 8% royalty on Imeglimin net sales as a legacy of the spin-off IP license. This means the first 8% of net sales goes to Merck; Poxel only realizes net royalty income on the portion above 8%.

OrbiMed Royalty Monetization

The OrbiMed royalty monetization announced in September 2024 provided critical near-term funding but failed to resolve Poxel's structural financial challenges. The $50 million upfront payment was structured as a bond issuance secured by TWYMEEG® royalties from Japan, with OrbiMed entitled to receive payments until achieving a 2x return capped at $100 million.

While the deal provided net proceeds of $42.5 million after a $7.5 million reserve deposit, most funds went toward reducing existing debt obligations to IPF Partners and government-backed PGE loans, leaving insufficient working capital for operations. The arrangement means Poxel's near-term benefit from Imeglimin sales is effectively nil – all royalties go to OrbiMed (and Merck) until that $100M cap is reached, which could take several years.

Failed Roivant Partnership

The February 2018 deal with Roivant Sciences through its subsidiary Metavant was aimed at developing and commercializing Imeglimin in all territories outside Asia. Deal terms included $35 million upfront to Poxel, Roivant purchased $15 million of Poxel equity at €8.50 per share, and Poxel was eligible for up to $600 million in future payments tied to development, regulatory, and sales milestones with double-digit royalties.

However, Metavant withdrew in late 2020 before Phase 3 could begin, citing a strategic pivot. The partnership's collapse left Poxel without a clear path to fund Imeglimin Phase 3 in the West and underscores the risk of relying on partner continuity.

Financial Performance and Capital Structure

Revenue Evolution and Profitability Metrics

Poxel's revenues come primarily from milestone payments and royalties under its partnerships. Revenue has been lumpy, tied to partnership events:

• 2021: €13.4 million revenue driven by the ¥1.75 billion (≈€13.2M) milestone for Japanese approval of TWYMEEG
• 2022: Revenue dropped sharply to €0.674 million with no new milestones
• 2023: €1.98 million revenue, virtually all from royalties, but entirely offset by the 8% royalty due to Merck Serono
• 2024: €6.6 million revenue, a 235% increase over 2023, driven by escalating TWYMEEG® royalties
• Q1 2025: €1.066 million revenue, representing 137% growth over prior year period

The company has consistently operated at a net loss. Net R&D expense dropped from €12.4 million in 2022 to €3.8 million in 2023 as the company curtailed new trials due to cash constraints. General & administrative expenses were €9.4 million in 2022 and €8.4 million in 2023. In 2023, Poxel recorded a substantial impairment charge of €16.6 million on the PXL065 intangible asset, indicating uncertainty about funding Phase 3 development.

Cash Position and Burn Rate

Poxel's cash trajectory shows steady decline:

• End 2021: €32.3 million cash including Japanese approval milestone
• End 2022: Cash dropped significantly with limited new financing
• June 30, 2023: €0.955 million revenue for H1 with cash dwindling
• August 31, 2024: ~€2.9 million after OrbiMed deal
• June 30, 2025: €1.3 million total, with only €750,000 available

Despite projecting cash runway through end of 2025 after the OrbiMed transaction, reality proved harsher – Poxel filed for insolvency by mid-2025, prompting court-protected reorganization.

Debt Structure and Obligations

The company maintains complex debt arrangements that contributed to its current crisis:

• IPF Partners: €14.2-17.1 million in senior secured bonds following multiple restructurings
• IRIS: €4.3 million in convertible ORANE bonds
• PGE Loan: €3 million remaining from COVID-era government-backed financing
• OrbiMed: $50 million in bonds secured by TWYMEEG royalties

When shareholders rejected critical financial delegations at the February 11, 2025 meeting needed to issue shares for ORANE redemption, it triggered immediate default provisions allowing creditors to demand full repayment the company could not meet.

Market Performance and Valuation Dynamics

Stock Price Evolution

Poxel SA is listed on Euronext Paris (compartment C) under ticker POXEL with ISIN FR0012432516. The stock's trajectory reflects its financial deterioration:

• IPO (Feb 2015): Priced at €6.66 with market cap ~€116 million
• 2017 High: Stock jumped ~43% on Sumitomo deal announcement, reaching €8-9 range
• 2020-2021: TWYMEEG approval provided support around €2-3
• 2022-2023: Steep decline to penny-stock territory under €1
• 2025 Low: Hit €0.115 in December 2024 before modest recovery
• Current (Sept 2025): Trading at €0.30-0.32, down 98% from IPO

Trading was suspended from July 30 to August 11, 2025 during initial reorganization proceedings before resuming under court supervision. With 53.7 million shares outstanding, the current market capitalization of €18-20 million represents a fraction of the company's historical investment and potential pipeline value.

Competitive Landscape Assessment

NASH/MASH Market Dynamics

The NASH/MASH market, valued at $7.9 billion in 2024 and projected to reach $31.8 billion by 2033 with 17.7% CAGR, recently saw its first FDA approval with Madrigal's Resmetirom in March 2024. Novo Nordisk's semaglutide gained MASH approval in August 2025, showing 32.7% disease resolution versus 16% for placebo. PXL065 must differentiate through its improved safety profile versus generic pioglitazone while competing against well-funded programs from Gilead, AbbVie, and Roche.

Rare Disease Opportunities

The adrenoleukodystrophy market presents a more favorable competitive dynamic with limited treatment options for this devastating rare disease affecting 1 in 14,000-17,000 male births. The market is projected to grow from $519 million in 2024 to $2.3 billion by 2035 at 13.9% CAGR. Bluebird Bio's Skysona gene therapy represents the only approved treatment for cerebral ALD, while Minoryx Therapeutics' leriglitazone faced EMA rejection in 2024.

For autosomal dominant polycystic kidney disease, affecting 1 in 400-1,000 individuals, only tolvaptan is currently approved with moderate efficacy and tolerability challenges. PXL770's novel AMPK activation mechanism addresses different pathways than existing treatments, potentially offering combination therapy opportunities.

Strategic Alternatives and Recovery Scenarios

Asset Monetization Options

The six-month observation period ending February 2026 provides a defined timeframe for Poxel to restructure operations and satisfy creditor obligations while preserving pipeline value. Asset divestiture appears the most probable near-term strategy, with PXL065's Phase 3-ready NASH program potentially commanding €300-500 million from strategic buyers seeking de-risked late-stage assets. PXL770's rare disease platform with multiple FDA designations could attract €150-300 million from specialized rare disease companies like Ultragenyx or Alexion.

Imeglimin's China rights remain unpartnered and could generate €20-50 million upfront from regional players seeking validated diabetes therapies. The intellectual property portfolio, including composition of matter patents extending through 2041 with potential five-year extensions, holds significant value for acquirers.

Full Company Acquisition Scenarios

Full company acquisition represents a viable option with potential acquirers including:

• Novo Nordisk: Recently acquired Catalent for $16.5 billion and has strategic interest in differentiated diabetes assets
• Roche: Purchased Carmot for $3.1 billion for metabolic programs
• GSK: Acquired Boston Pharmaceuticals' NASH portfolio for $1.2 billion in May 2025

Analyst estimates suggest enterprise value of €400-800 million based on pipeline assets, though distressed sale dynamics would likely reduce realization. The presence of a marketed product (TWYMEEG) generating escalating royalties provides a valuation floor uncommon for distressed biotechs.

Partnership Structures

Risk-sharing Phase 3 collaborations for PXL065 could potentially generate €100-200 million upfront plus success-based milestones up to €1 billion. Global pharmaceutical companies with established NASH programs might find PXL065's differentiated profile attractive for portfolio diversification. Retaining certain geographic rights would allow Poxel to participate in future value creation while reducing capital requirements.

The liquidation scenario, while representing downside risk, would likely recover only €100-250 million in distressed asset sales, well below going-concern valuations. TWYMEEG®'s proven commercial success and escalating royalty stream provide tangible cash flow to support higher valuations than typical clinical-stage assets.

Risk Assessment and Future Viability

Financial Solvency Risk

The biggest risk is that Poxel fails to secure new funding or restructuring and is forced to liquidate by early 2026. This would destroy shareholder value (equity → $0) and likely significantly impair the pipeline's value with assets sold under distress conditions. The company must execute a turnaround within months – a short runway to broker deals or investments.

Execution Risk on Pipeline

Even if funded, the pipeline assets face development risk. NASH trials are expensive with Phase 3 requiring ~1000 patients over 18-24 months for outcomes like fibrosis improvement. PXL065 would require careful trial design and significant capital (~$50-100M for Phase 3). For ALD trials, while smaller, the risk is that reducing a biomarker (VLCFA) may not translate into clinical benefit.

Regulatory and Market Risk

The regulatory landscape for metabolic drugs is stringent. For a NASH drug, FDA often requires evidence not just of histology improvement but also reasonable safety in co-morbid populations. TZDs historically carry a warning for heart failure risk; even if PXL065 is different, regulators will scrutinize any edema or cardiac signals.

If Poxel's drugs reach market, commercial competition will be intense. By ~2028 when PXL065 could conceivably launch (if trials resumed in 2024), there might be multiple drugs approved. For ALD, commercial risk is lower since it's an orphan indication with no competitors, but the patient population is limited.

Macro-Economic Environment

The environment for biotech funding has been tight in 2022-2023 with rising bankruptcies. Rising interest rates and risk-off sentiment made investors less willing to fund money-losing biotechs. Any uptick in biotech sentiment or lower interest rates in 2024 could marginally help if investors start looking for beaten-down opportunities.

Conclusion and Investment Perspective

Poxel stands at a critical crossroads between preserving significant scientific value and potential liquidation. The company has innovative science and a diversified metabolic pipeline, highlighted by a first-in-class approved drug (Imeglimin) and promising clinical candidates (PXL065 and PXL770). It has forged valuable partnerships and demonstrated an ability to progress drugs to market in one region.

However, years of operating losses and heavy reliance on external financing have culminated in a cash crisis that threatens its existence. The next few months through February 2026 are crucial: Poxel must restructure and likely pivot to a leaner model focusing on its best shots (like orphan ALD) while leveraging any incoming royalties.

From a professional investment perspective, Poxel represents a high-risk special situation. The bull case scenario with 40% probability envisions successful strategic partnership or acquisition at €400-600 million enterprise value, potentially delivering €3-5 per share recovery for equity holders. The base case at 40% probability involves selective asset divestitures generating €250-350 million, enabling partial creditor recovery with €1-2 per share for shareholders. The bear case with 20% probability results in forced liquidation under time pressure and likely total equity impairment.

Critical success factors include rapid identification of strategic partners, maintaining clinical program momentum during reorganization, effective creditor negotiations preserving asset value, and favorable market timing as biotech M&A activity recovers. Near-term catalysts through early 2026 include TWYMEEG®'s Q4 2024 sales results confirming growth trajectory, announcement of strategic partnerships for pipeline assets, creditor agreement on reorganization terms, and court approval of the continuation plan.

Despite severe financial distress triggering insolvency proceedings, Poxel retains valuable clinical assets addressing large, growing markets with limited treatment options. Whether the company can transform its current crisis into a turnaround will hinge on securing new partnerships or investment, maintaining stakeholder confidence, and focusing on niches where it can win. The next steps in the judicial proceedings and any forthcoming deals will determine whether Poxel emerges as a restructured metabolic innovator or sees its once-promising assets dispersed through liquidation.