STAT6 is a transcription factor essential for IL-4 and IL-13 cytokine signalling, which are validated targets for Th2 mediated inflammatory conditions such as atopic dermatitis. Credit: Kmpzzz/Shutterstock.

Gilead Sciences and LEO Pharma have entered a strategic collaboration to expedite the development and commercialisation of the latter’s small molecule oral signal transducer and activator of transcription 6 (STAT6) programmes.

The programmes are aimed at treating individuals with inflammatory conditions.

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Gilead will acquire LEO Pharma’s preclinical oral STAT6 small molecule inhibitors and targeted protein degraders.

Gilead will spearhead further development of the oral programmes, while LEO Pharma will focus on developing potential topical formulations of STAT6 inhibitors.

LEO Pharma is eligible to receive up to $1.7bn in total payments, including a $250m upfront payment.

The company is also eligible for tiered royalties on sales of oral STAT6 products, while Gilead may earn royalties on sales of topical formulations.

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The agreement grants Gilead global rights to develop, manufacture and commercialise the oral STAT6 programme.

LEO Pharma retains the option to co-commercialise oral programmes for dermatology outside the US and will exclusively hold global rights to topical STAT6 formulations in dermatology.

The partnership is expected to impact Gilead’s financials, with an anticipated reduction in both GAAP [generally accepted accounting principles] and non-GAAP 2025 earnings per share by $0.15 to $0.17.

Gilead Sciences Research executive vice-president Flavius Martin stated: “As we continue to expand our inflammation portfolio, we’re committed to developing next-generation therapies to support long-term remission in patients with inflammatory diseases through mechanisms that block major pathogenic pathways, eliminate pathogenic cells, tolerise the immune system and restore cell function.

“By partnering with LEO Pharma, we hope to explore the potential of the STAT6 pathway to bring forward an oral option for patients suffering from chronic inflammatory conditions.”

Bank of America Securities and Latham Watkins provided financial and legal advisory services, respectively, to LEO Pharma for this transaction.

The company noted that STAT6 is a “transcription factor” essential for IL-4 and IL-13 cytokine signalling, which are validated targets for Th2-mediated inflammatory conditions such as atopic dermatitis, asthma and chronic obstructive pulmonary disease. Preclinical studies suggest that targeting STAT6 could offer an oral alternative to injectable biologics.

Headquartered in Denmark, LEO Pharma specialises in dermatological care.

The partnership follows Gilead’s collaboration with Terray Therapeutics in December 2024 for the discovery and development of small-molecule therapies.