Leo Pharma buys rare skin disease drug in $435M deal

Dive Brief:

Leo Pharma on Tuesday said it will acquire the rights to dersimelagon, an experimental medicine from that’s undergoing Food and Drug Administration review, in a deal potentially worth hundreds of millions of dollars.
If approved, the medicine would be the first oral treatment for two skin conditions known as erythropoietic protoporphyria and X-linked protoporphyria, Leo said. The rare genetic diseases cause severe reactions to the sun; patients can experience burning sensations, rashes, swelling and in some cases even liver damage.
Leo did not release exact details of the transaction, other than saying it includes as much as $435 million in upfront and near-term milestone payments “together with potential downstream milestones and tiered royalties on net sales.” The private company, co-owned by the Leo Foundation and Nordic Capital, separately said its first-half revenue rose 10% to 7.26 billion Danish kroner, or about $1.12 billion.

Dive Insight:

The deal adds a late-stage asset to Leo’s pipeline as the dermatology company works toward a goal of launching a new medicine every two to three years and considers an initial public offering. The Danish drugmaker said the acquisition will build on its purchase of the gene therapy specialist Reply in April and a partnership with Boehringer Ingelheim announced last year that centers on the drug Spevigo.

Tanabe, a Japanese pharmaceutical company now owned by Bain Capital, submitted its application for dersimelagon to the FDA in June. The agency has granted the drug Fast Track and Orphan Drug designations, designed to reward makers of therapies that fill an unmet need by speeding up development and offering benefits such as tax credits and exemptions from user fees.

“Dersimelagon represents a compelling opportunity to expand our rare dermatology pipeline with a late-stage oral therapy candidate,” Leo CEO Christophe Bourdon said in the company’s statement. “This acquisition is closely aligned with our strategy of identifying and investing in high-impact innovation in medical dermatology.”

A Phase 3 study released earlier this year showed dersimelagon could help patients spend more time in sunlight while experiencing fewer episodes of pain. Tanabe said the drug was generally well tolerated; the most common side effects were benign moles, headache, nausea, diarrhea and skin hyperpigmentation.