A new strategic development and commercialization collaboration between LEO Pharma and PellePharm is intended to address unmet medical needs across various skin diseases with no approved treatments, the parties say. The collaborators seek to advance innovation and access to potential therapies for patients with life-altering conditions, such as Gorlin Syndrome and High Frequency Basal Cell Carcinoma (BCC), two distinct and rare forms of skin cancer.

Under terms of the agreement, LEO Pharma has initially committed $70 million, comprised of equity financing and financial R&D support to fund the global Phase 3 trial for patidegib topical gel 2% for the prevention and treatment of Gorlin Syndrome, with LEO Pharma securing an option to acquire all shares in PellePharm. PellePharm and its stockholders could receive up to an additional $690 million including merger consideration, and regulatory and commercial milestone payments. In addition, PellePharm stockholders are eligible to receive a double-digit royalty after achieving certain commercial milestones.

The agreement establishes a joint development committee with PellePharm maintaining responsibility for global development and LEO Pharma supporting in an advising role. Both companies will jointly drive commercialization planning, and Anders Kronborg, chief financial officer of LEO Pharma, will join PellePharm’s board of directors.

“We are very excited about the partnership with PellePharm, who are pioneers in Gorlin Syndrome and experts in rare skin diseases. Supporting our ambitious 2025 strategy, it marks LEO Pharma’s entrance in rare skin diseases and it offers a unique opportunity to bring the first treatment forward to people suffering from a very severe skin disease for which there currently are no approved therapies,” said Thorsten Thormann, vice president of research at LEO Pharma.

“Our company is founded on the commitment to targeting rare dermatologic diseases at the source and bringing new groundbreaking treatments forward to patients as efficiently and effectively as possible. As a global leader in medical dermatology, LEO Pharma is a great fit as both a development and commercialization partner. This collaboration puts us on track to commence our pivotal Phase 3 Gorlin Syndrome trial in early 2019. Then after the potential merger, we look forward to working with LEO Pharma to address other rare skin diseases with unmet needs,” said Sanuj Ravindran, president and chief executive officer of PellePharm.

PellePharm’s 2% topical formulation of patidegib aims to be the first approved therapy for the prevention of Gorlin Syndrome, also known as Basal Cell Carcinoma Nevus Syndrome (BCCNS), and has shown early promise in Phase 2 clinical trials treating patients with Gorlin Syndrome and Sporadic BCC in both the U.S. and the U.K.

Currently, there are no FDA-approved therapies for Gorlin Syndrome, and the standard of care for this rare disease is surgery. Patients with this lifelong, severe disease can have as many as 30 surgeries per year beginning in their mid-teens.