LEO Pharma and 4SC Discovery form pact worth as much as $125 million

Pair enter into an exclusive research and license agreement, with the primary aim being to jointly research, develop and commercialize an oral treatment for inflammatory skin diseases

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BALLERUP, Denmark & PLANEGG-MARTINSRIED,Germany—Late February saw LEO Pharma A/S, a Danish pharmaceutical companyspecializing in dermatology therapeutics worldwide, enter into an exclusiveresearch and license agreement with German biotech company 4SC Discovery GmbH.The chief aim of this deal is to jointly research, develop and commercialize anoral treatment for inflammatory skin diseases, such as psoriasis.
The companies report that the collaboration hasthe potential to result in "a novel and convenient breakthrough therapy" forchronic skin conditions. The compound, which is currently in the earlydevelopment stage, has already been shown in preclinical models tosignificantly reduce—and possibly eradicate—symptoms of psoriasis.
Under the agreement, LEO Pharma will issue anupfront payment of €1 million, or roughly $1.3 million, to 4SC Discovery—a whollyowned subsidiary of 4SC AG—and additional funding for research and development.LEO Pharma will receive an exclusive option to license the worldwide marketingand commercialization rights of the compound for use in inflammatory skindiseases, including psoriasis and other therapeutic areas. Upon LEO Pharmaexercising the option, 4SC Discovery will be eligible for a milestone paymentof as much as €3 million ($3.9 million) and further payments upon achievingspecific development milestones of as much as €92 million ($120.2 million), aswell as double-digit royalties potentially if commercialization is achieved.
The deal marks what LEO Pharma calls "the latestmilestone" in its "ambitious growth strategy, which involves actively seekingnew opportunities to expand the company pipeline for the benefit of patients."
"The compound has the potential to completelyeradicate symptoms of psoriasis, liberating people from the burden of thischronic skin disease," said Kim Kjoeller, LEO Pharma's senior vice president ofglobal development. "LEO Pharma strives to constantly expand and improvetreatment options for patients and this latest deal is the perfect example ofour commitment to meeting patient needs with breakthrough novel therapies."
For 4SC Discovery, the deal marks what it calls "akey early-stage partnering deal" with one of the company's compounds from itsresearch engine.
"We are delighted to have won LEO Pharma, a globalleader in skin diseases, as an ideal research and license partner for ourhighly innovative compound, which is based on the modulation of cytokines,"said Dr. Daniel Vitt , managing director of 4SC Discovery and chief scientificofficer at 4SC AG. "Our goal is now to speed up and jointly develop a novelbreakthrough therapy addressing the high medical need in chronic inflammatoryskin diseases such as psoriasis. This partnership again demonstrates the greatexpertise and scientific potential of 4SC in the fields of autoimmune andinflammatory diseases."
Founded in 1908, LEO Pharma is an independent,research-based pharmaceutical company that develops, manufactures and marketspharmaceutical drugs to dermatologic and thrombotic patients in more than 100countries globally. The company has its own sales forces in 61 countries andemploys some 5,000 people worldwide. LEO Pharma is headquartered in Denmark andis wholly owned by the LEO Foundation.
4SC Discovery GmbH specializes in the early-stageresearch and discovery of novel therapeutic compounds against cancer andautoimmune diseases. It also offers its technologies and research services toother companies and engages in partnerships with pharmaceutical and biotechcompanies to accelerate the development and commercialization of its ownearly-stage therapeutic programs. As of the end of 2012, 4SC Group had 86employees. The company was founded in 1997 and has been listed on the PrimeStandard of the Frankfurt Stock Exchange since December 2005.
SOURCE: 4SC/LEO Pharma news release

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