Gilead Sciences, Inc. and LEO Pharma are partnering to accelerate the development and commercialization of LEO Pharma’s small molecule oral signal transducer and activator of transcription 6 (STAT6) programs for the potential treatment of patients with inflammatory diseases.
STAT6 is the specific transcription factor required for interleukin (IL)-4 and IL-13 cytokine signaling, which are clinically validated targets for T helper 2 (Th2) mediated inflammatory conditions such as atopic dermatitis, asthma, and COPD, among many others. Targeting STAT6 has shown potential preclinically to treat a broad population of patients and provide an oral alternative to those currently treated with injectable biologics.
Under this partnership, Gilead will acquire LEO Pharma’s preclinical oral STAT6 small molecule inhibitors and targeted protein degraders. Gilead will lead further development efforts for the oral programs, while LEO Pharma will lead development for potential topical formulations of STAT6 inhibitors.
“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,” says Flavius Martin, MD, Executive Vice President, Research, Gilead Sciences, in a news release.
“STAT6 holds potential for treating various inflammatory diseases, including outside dermatology. This strategic partnership with Gilead will enable us to accelerate the development of the STAT6 program and maximize its potential in dermatology and beyond,” adds Christophe Bourdon, CEO of LEO Pharma. “This partnership acknowledges LEO Pharma’s scientific capabilities and strengthens our commitment to innovate for people with skin diseases.”
Gilead will have global rights to develop, manufacture, and commercialize the small molecule oral STAT6 program. LEO Pharma will have the option to potentially co-commercialize oral programs for dermatology outside the United States. LEO Pharma will hold exclusive global rights to STAT6 topical formulations in dermatology.
LEO Pharma is eligible to receive up to $1.7 billion in total payments, including an upfront payment of $250 million. In addition, LEO Pharma may also receive tiered royalties ranging from high single-digit to mid-teens on sales of oral STAT6 products. Gilead may receive tiered royalties ranging from high single-digit to mid-teens on sales of topical STAT6 products.
Gilead does not exclude acquired in-process research and development expenses from its non-Generally Accepted Accounting Principles (GAAP) financial measures. This transaction with LEO Pharma is expected to reduce Gilead’s GAAP and non-GAAP 2025 EPS by approximately $0.15 – $0.17.
Bank of America Securities acted as financial advisors to LEO Pharma in this transaction and Latham Watkins LLP acted as legal advisors.
