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Full Deal Summary

Leo Pharma AS and PellePharm Inc. have agreed to collaborate on the development and commercialization of therapeutics for rare skin diseases, including Gorlin syndrome, a rare genetic form of basal cell carcinoma (BCC). Leo has an option to acquire PellePharm outright.

Leo will provide $70mm up front (including equity) to fund a global Phase III trial for PellePharm's patidegib topical gel 2% for prevention and treatment of Gorlin syndrome. The partners will form a joint committee with PellePharm maintaining responsibility for global development and Leo Pharma providing support in an advisory role. Both companies will jointly plan commercialization. Leo's current CFO Anders Kronborg will join the PellePharm board. In addition, PellePharm stands to receive up to $690mm more in regulatory and commercialization milestones and merger consideration, plus double-digit royalties contingent upon the achievement of certain commercialization goals. Patidegib is a topical gel formulation inhibitor of the hedgehog signaling pathway (known to play a vital role in cellular function and tissue development). Data presented last month from two Phase II studies indicated topical patidegib demonstrated the ability to clear and prevent BCCs, including the reduction of facial BCC lesions in Gorlin syndrome patients. The compound also showed similar efficacy to the oral version in treating BCCs (but avoiding the systemic side effects of the oral formulation). A pivotal Phase III trial in Gorlin syndrome is expected to begin in early 2019. After the companies potentially merge, they will continue to work on rare skin diseases. In the area of dermatology, Leo has signed multiple alliances over the past two years, with partners including Zymeworks, JW Pharma, HitGen, and MorphoSys, and earlier this year bought Bayer's prescription dermatology business. The current deal with PellePharm marks its first in rare skin diseases.


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Financials


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Overview
Potential Deal Value $760.00mm
Upfront Total $70.00mm
Transactions 1 of 1 (11/2018)
Funding Stage Upfront
Upfront (Cash) $70.00mm
Upfront (Total) $70.00mm
Royalty 10%
Royalty 99%

Product Information


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Product 1 of 1
Product Type Pharmaceutical
Generic Name Patidegib
Mechanism of Action Hedgehog pathway inhibitor
Highest Phase at Time of Deal Clinical Development
Phase II
Product Therapeutic Area(s) of Focus Cancer
Solid Tumor
Skin Cancers
Basal Cell Carcinoma
Dermatology
Clinical Developer Leo Pharma AS
PellePharm Inc.