LEO Pharma A/S and Japanese pharmaceutical company Astellas Pharma Inc. have entered into an Asset Purchase Agreement under which Astellas will transfer its global dermatology business to LEO Pharma for € 675 million.

Under the terms of the agreement, the assets and associated responsibilities relating to Astellas' global portfolio of dermatology products, which include Protopic^® for eczema and other products for the treatment of acne and skin infection, will be transferred to LEO Pharma (except for Protopic^® in Japan). The transaction is subject to the satisfaction of customary closing conditions, including review and approval by competition authorities. The closing of this transaction is anticipated in the first quarter of 2016.

Following the closing, Astellas and LEO Pharma will work closely together to ensure a smooth and effective transition of the products and business to LEO Pharma. The transaction does not include any manufacturing facilities.

The addition of Astellas' dermatology products will extend LEO Pharma's reach to millions more people living with skin diseases.

The transaction will be the largest in LEO Pharma's more than 100-year history in terms of incremental turnover. Annual turnover is estimated to increase by more than 20 percent once the portfolio is fully transferred. With the agreement, LEO Pharma creates a strong foothold in markets such as China and Russia and adds critical scale in many other markets.

Today's announcement, says LEO, demonstrates the company’s commitment to its 2020 strategy. Internal innovation together with growth through acquisitions and partnerships serves to strengthen the company's global position as a preferred partner in dermatology.

"This is a historic milestone for LEO Pharma and will be instrumental in our efforts to help even more people living with skin diseases. We are excited about this opportunity and look forward to working closely with Astellas to ensure a seamless transfer of the portfolio," said Gitte Aabo, CEO and President of LEO Pharma. "With our expanded portfolio, we will be able to offer patients an even wider range of treatment solutions to meet their individual needs. For LEO Pharma, leading in dermatology care is about making a real difference to people's everyday lives."

The Astellas dermatology portfolio comprises prescription and over-the-counter products, including established and strong brands such as Protopic® for eczema, Locoid® and Locobase® for skin care, and Zineryt® for acne.

Yoshihiko Hatanaka, President and CEO of Astellas commented, "Astellas continuously considers its strategy and as a result, we reached this decision. We feel that dermatology patients around the world will be better served by transferring these products to LEO Pharma, a company with a strong focus on the dermatology therapeutic area. We are pleased to work with LEO Pharma to ensure smooth continuation of product supply around the world."

J.P. Morgan is acting as financial advisor, Kromann Reumert as legal advisor and PricewaterhouseCoopers as financial and tax due diligence adviser to LEO Pharma.