Roivant Sciences Offloads Psoriasis Medicine Maker To Organon For Up To $1.2B

Organon & Co OGN has agreed to acquire Roivant Sciences Ltd’s ROIV Dermavant Sciences Ltd, which is focused on developing and commercializing therapeutics in immunodermatology.

Dermavant’s novel product, Vtama (tapinarof) cream, 1%, for the topical treatment of mild, moderate, and severe plaque psoriasis in adults, was approved by the FDA in May 2022.

Vtama cream is a once-daily, steroid-free, topical therapy applied to affected areas.

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The FDA is reviewing a supplemental application for Vtama cream as a potential treatment for atopic dermatitis (AD) in adults and children two years and older. Prescription Drug User Fee Act action is expected in the fourth quarter of 2024.

Psoriasis is a common chronic inflammatory skin disease affecting over 8 million Americans 20 years or older and 125 million people worldwide.

Organon has agreed to acquire Dermavant for aggregate consideration of up to approximately $1.2 billion, with an upfront payment of $175 million and a $75 million milestone payment upon regulatory approval in atopic dermatitis, as well as payments of up to $950 million for the achievements of certain commercial milestones.

In addition, Organon will pay Dermavant shareholders tiered royalties on net sales.

Dermavant owns the rights to Vtama cream globally, excluding China, and has out-licensed Japan rights.

The transaction is expected to be modestly dilutive to Adjusted EBITDA in 2025, turning accretive in 2026. Organon expects net leverage to be elevated above 4.0x due to the transaction.

Price Action: At last check on Wednesday, OGN stock was down 2.14% at $20.11, while ROIV stock was down 0.08%.

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