The deal includes a $175m upfront payment for Roivant’s subsidiary Dermavant. Image credit: Shutterstock / testing.

Organon is set to acquire Roivant’s immuno-dermatology subsidiary Dermavant in a potential $1.2bn deal.

Organon will pay $175m upfront for the business as part of the transaction, which is expected to close in the fourth quarter of this year, as per an 18 September press release.

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Shares in both Organon and Roivant were down at close compared to their respective market opening prices on the day of the announcement.

The bulk of the deal comes in the form of Dermavant’s plaque psoriasis treatment Vtama (tapinarof) The steroid cream is currently under review by the US Food and Drug Administration (FDA) for a label expansion into atopic dermatitis (AD) – if this goes through, Organon will pay Dermavant a milestone payment of $75m.

Based on how Vtama does commercially, Dermavant could also be in line for a further $950m of milestone payments.

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Dermavant’s lead asset Vtama won FDA approval for plaque psoriasis in May 2022. The drug brought in modest US sales of $78m in 2023 for Roivant, though its quarter-on-quarter growth has been underwhelming.

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Whilst psoriasis affects eight million people in the US aged 20 and older, AD affects 16.5 million adults in the country, and a further 9.6 million children have the condition. An FDA clearance for AD would open Vtama to a US market predicted to be worth $13.5bn by 2030, according to analysis by GlobalData’s Pharma Intelligence Center.

GlobalData is the parent company of Pharmaceutical Technology.

Vtama boasted strong results in a Phase III trial for AD earlier this year, with 51% of 728 patients achieving complete disease clearance following 48-week use of the cream.

The supplemental new drug application (sNDA) would allow Vtama’s use in adults and children two years of age and older with the inflammatory skin condition – the Prescription Drug User Fee Act (PDUFA) action is expected in the fourth quarter of this year.

Organon’s 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.”

The deal follows several bolt-on deals by Organon recently, including purchasing US rights to Eli Lilly’s migraine medications Emgality (galcanezumab) and Rayvow (lasmiditan) for $50m in December last year. The deal was updated, giving more rights to Organon for Emgality, for $22.5m last month.

While the Dermavant acquisition marks a dermatology expansion for Organon in the US, it also signals the second time in just over a year that Roivant has sold a subsidiary. Roivant earned $7.1bn from Roche when the latter bought its immunology company Telavant in December last year.