US-based women’s health-focused health care company Organon has agreed to acquire clinical-stage biopharmaceutical company Dermavant, for up to $1.2bn.
Dermavant, a subsidiary of UK-based healthcare company Roivant, is dedicated to developing and commercialising advanced therapeutics in immuno-dermatology.
Organon’s consideration of up to $1.2bn includes an upfront payment of $175m and a $75m milestone payment contingent on regulatory approval in AD.
The consideration also includes additional payments of up to $950m based on the achievement of certain commercial milestones, in addition to tiered royalties on net sales.
Dermavant will own the global rights to its lead product, VTAMA (tapinarof) cream, except in China, and has out-licensed Japan rights.
The transaction is expected to be completed in the fourth quarter of this year, subject to review under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions.
Upon closing, Organon would assume Dermavant liabilities worth $286m, as reported by Roivant on 30 June 2024, which would be subject to fair value accounting by Organon.
Organon CEO Kevin Ali said: “We look forward to combining Dermavant’s strong dermatology commercial and field medical organisation in the US, with Organon’s market access capabilities, regulatory expertise and worldwide commercial reach.
“This will allow us to bring VTAMA cream, a patient-focused innovation in dermatology, providing an effective, well-tolerated, non-steroidal treatment option to the millions of people living with plaque psoriasis and potentially atopic dermatitis.
“The acquisition will deliver on Organon’s objective of improving the health of women throughout their life stages by investing in treatments for conditions that affect women differently.”
The VTAMA cream, intended for the topical treatment of mild, moderate, and severe plaque psoriasis in adults, was approved by the US Food and Drug Administration (FDA) in May 2022.
VTAMA is a once-daily, steroid-free, topical cream applied to affected areas, without any safety label warnings or precautions or restrictions on location and duration of use.
The medical cream works by activating aryl hydrocarbon receptors in the skin to reduce inflammation and normalise the skin barrier.
The safety and effectiveness of VTAMA cream were evaluated in PSOARING-1 and 2 randomised, double-blind, vehicle-controlled trials for psoriasis.
VTAMA was also evaluated as part of the Phase 3 ADORING-1 and 2 clinical studies for the treatment of atopic dermatitis and is currently under review with the FDA.
Freshfields Bruckhaus Deringer served as legal advisor and Goldman Sachs & Co. as financial advisor to Roivant, while Covington & Burling served as legal advisor to Organon, on this deal.
Dermavant CEO Todd Zavodnick said: “This is an unparalleled opportunity for continued growth and innovation for Dermavant, preserving our values and vision and allowing them to thrive in the new structure at Organon.
“We set out to revolutionise the standard of care in dermatology, and we delivered, becoming the #1 branded topical for plaque psoriasis within just two months after launching VTAMA cream, and providing over 275,000 patients with the relief they desperately needed.”
Roivant CEO Matt Gline said: “We are able to meet Organon’s structural objectives and to create a transaction that is very attractive to both Roivant and Dermavant stakeholders, while still preserving meaningful economics tied to the potential future success of VTAMA.”
