Deals

Leo Pharma lines up an option to buy BridgeBio’s PellePharm and its PhIII rare skin cancer drug

Dermatology company Leo Pharma’s voracious appetite for partnerships has been fueled with yet another deal, this time with BridgeBio’s PellePharm. The Danish drugmaker has taken a minority stake and agreed to provide R&D support to the Bay Area company, which is set to test its rare skin cancer drug, patidegib, in a Phase III trial.

The century old drugmaker, which consummated a deal to swallow German giant Bayer’s prescription dermatology business in the United States in addition to forging pacts with MorphoSys and Zymeworks $ZYME earlier this year, has initially committed $70 million comprised of equity financing and financial R&D support for a late-stage trial evaluating PellePharm’s patidegib for Gorlin syndrome – a rare, genetic skin disease that affects 10,000 in the United States.

Sanuj Ravindran

Under the terms of the deal, Leo Pharma has the option to buy PellePharm, with the latter and its stockholders eligible to receive up to an additional $690 million including merger consideration and milestone payments. If the drug is approved, PellePharm stockholders are also eligible to receive a double-digit royalty upon achieving certain commercial milestones.

Patidegib is a topical gel formulation designed to treat Gorlin syndrome, characterized by mutations in the tumor suppressor gene encoding Patched1 (PTCH1), which acts as the primary inhibitor of the hedgehog signaling pathway that is known to play a role in cellular function and tissue development; this culminates in the formation of hundreds of basal cell carcinomas (BCCs), especially on on the face and sun-exposed areas. With no FDA-approved treatments for the disease, the standard-of-care is surgery, with patients suffering from a severe form of Gorlin syndrome undergoing as many as 30 procedures annually.

Ervin Epstein

PellePharm is expected to begin recruiting patients for the Phase III in the first quarter of next year, and the company expects to have a data readout by the second half of 2020, chief Sanuj Ravindran told Endpoints News, adding that if all goes well, he anticipates approval by 2021. Mid-stage data on the drug, which has secured the orphan drug status and breakthrough therapy designation from the FDA, have shown promise in mitigating BCC tumors in patients with Gorlin syndrome by blocking the disease at its source within the hedgehog signaling pathway. The gel formulation is being developed to eliminate the need for surgeries.

PellePharm’s founders developed a topical gel formulation after licensing the drug from Infinity Pharmaceuticals, to help alleviate certain systemic adverse events observed with oral hedgehog inhibitors, such as Roche’s $RHBBY Erivedge. Although Ravindran did not disclose pricing plans for the drug, he noted oral HHIs are priced at around $100,000 annually.

PellePharm was conceived by Ervin Epstein, Jean Tang, and Phil Beachy in 2012, as they had worked with oral HHIs and saw the need to develop such treatments with a more tolerable safety profile. Michael Henderson, who co-founded PellePharm while at medical school aged 22, is now in charge of hunting down potential assets for BridgeBio to snap up.

In 1908, pharmacists August Kongsted and Anton Antons bought the Leo Pharmacy in Copenhagen, Denmark. From starting out in the basement of the pharmacy, today Leo Pharma’s products — mainly within dermatology and thrombosis — are used in over 100 countries.


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