Dr. Reddy's sells off psoriasis candidate in out-licensing deal
- Indian drugmaker Dr Reddy's Laboratories has out-licensed its topical steroid DFD-06 to specialist Encore Dermatology, sending U.S. rights to the company in exchange for $32.5 million in milestone payments.
- Though its wholly-owned subsidiary Promius Pharma, Dr Reddy's will also be eligible for fixed royalty payments on net sales of the drug, which is intended for use in moderate to severe plaque psoriasis.
- Dr Reddy's share price inched up on the news, but the stock is still down by roughly 25% (on the New York Stock Exchange) since earnings were released last month.
Dr Reddy's has completed Phase 3 studies, manufactured registration batches, and made preparations for a New Drug Application (NDA) filing for DFD-06, but has chosen to license the drug out rather than pursue commercialization in house.
"We look forward to obtaining NDA approval this fall, enabling Encore’s management team to quickly deliver this product to the providers and their patients." says Anil Namboodiripad, SVP, Proprietary Products, and president, Promius Pharma.
Dr. Reddy's has had a challenging year. Shares in the drugmaker began a month-long slide following the announcement of its first quarter 2018 results in July 2017, which recorded a 6% decline in revenues and a 53% fall in profits year-on-year. The lackluster results were due, in part, to price erosion from U.S. customer consolidation and a lower contribution from U.S. product launches.
The Indian drugmaker has also had a tough time with manufacturing, running afoul of stepped-up oversight from the Food and Drug Administration. In April, the regulator completed an audit of the company's Srikakulam-based production site, flagging points where the site fell short of regulatory standards. This inspection resulted in a Form 483, adding to similar letters issued to the company's Miryalguda and Bachupally sites this year.
- Dr Reddy's Laboratories Press release
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