PellePharm and LEO Pharma Announce $760 Million Strategic Collaboration to Advance Innovative Therapies for Rare Dermatological Diseases

VCBeat (WeChat ID: vcbeat) has learned that on November 20, 2018, Eastern Time, Danish dermatology specialist LEO Pharma A/S and PellePharm, a small drug developer based in Silicon Valley, announced a strategic development and commercialization partnership valued at $760 million. The collaboration aims to address unmet needs in the field of dermatology and advance innovative therapies for rare skin conditions, such as Gorlin syndrome and locally advanced basal cell carcinoma (BCC). Following the transaction, Anders Kronborg, CFO of LEO Pharma A/S, will join PellePharm’s board of directors.

Image source: PellePharm official website

PellePharm is an early-stage biopharmaceutical company dedicated to developing innovative solutions for rare dermatological conditions. This transaction is driven by the late-stage clinical development of its breakthrough therapeutic candidates.

Key Contents and Impacts of This Transaction:

1. LEO Pharma A/S acquires a minority stake in PellePharm, providing additional non-dilutive capital to fund PellePharm’s project development and securing an option to acquire all shares of PellePharm.

2. Including equity investment, PellePharm and its shareholders can receive a total of $760 million in funding, development, and commercialization support.

3. PellePharm is expected to initiate Phase 3 clinical trials for its drug targeting Gorlin syndrome in the first quarter of 2009.

Under the terms of the agreement, LEO Pharma A/S initially invested $70 million in PellePharm, comprising equity financing and R&D support, thereby providing PellePharm with sufficient funds to complete its Phase 3 clinical trials for a drug targeting Gorlin syndrome. Gorlin syndrome is a rare genetic disorder that primarily affects the face. As there are currently no FDA-approved drugs available for the treatment of Gorlin syndrome, standard care typically relies on surgical intervention. Patients may undergo up to 30 facial tumor resection surgeries per year, often resulting in repeated trauma, scarring, and disfigurement.

Image source: PellePharm official website

PellePharm is developing a late-stage clinical candidate known as patidegib gel, a product that not only reduces existing tumors in patients with Gorlin syndrome but also inhibits the genetic pathway responsible for tumor formation. According to data released by the company, an interim analysis of a six-month clinical trial showed an average reduction of approximately 60% in facial tumors among participating patients.

Leveraging these data advantages, patidegib was granted “Breakthrough Therapy” designation by the U.S. FDA in late 2017, a status that significantly accelerates the drug’s approval timeline. However, as a startup biopharmaceutical company with only 14 employees, PellePharm required additional funding to advance patidegib into its critical, pivotal, and more costly Phase 3 clinical trials. Consequently, the completion of this transaction effectively alleviated PellePharm’s financial pressures.

Previously, PellePharm had completed over $40 million in early-stage financing.

PellePharm, founded in 2012 and headquartered in California, USA, is a biopharmaceutical company dedicated to developing novel therapies for rare dermatological conditions. Its current primary research areas include Gorlin syndrome and high-frequency basal cell carcinoma (BCC), characterized by its ability to interrupt the tumorigenic genetic pathway at its source.

LEO Pharma A/S, founded in 1908 and headquartered in Denmark, is a long-established multinational pharmaceutical company owned by the LEO Foundation. With operations in more than 130 countries, it is dedicated to providing products and solutions for patients with skin diseases.