Gilead and LEO Pharma Form Partnership to Advance Oral STAT6 Program for Inflammatory Diseases

Gilead Sciences, a leader in the biopharmaceutical industry, and LEO Pharma, a specialist in dermatological treatments, have announced a strategic partnership aimed at advancing the development and commercialization of LEO Pharma's preclinical oral STAT6 small molecule inhibitors. This collaboration targets the treatment of inflammatory diseases, leveraging the STAT6 transcription factor involved in cytokine signaling relevant to conditions like atopic dermatitis, asthma, and COPD.

The partnership grants Gilead exclusive global rights to the STAT6 program, allowing it to develop, manufacture, and sell these small molecule oral treatments. LEO Pharma retains the option to co-commercialize oral formulations for dermatological purposes outside the United States, while maintaining global rights to develop topical versions of the STAT6 program for skin-related conditions. This strategic move is designed to accelerate the development of therapies that could serve as oral alternatives to injectable biologics frequently used for treating inflammatory diseases.

Both Gilead and LEO Pharma view this partnership as an opportunity to broaden treatment options for patients. Flavius Martin, Executive Vice President of Research at Gilead Sciences, emphasized the company's commitment to expanding its inflammation portfolio through next-generation therapeutics. These therapeutics aim to support long-term remission in inflammatory diseases by targeting key pathogenic pathways, clearing disease-causing cells, modulating immune responses, and restoring cellular function. The collaboration with LEO Pharma is expected to explore the potential of the STAT6 pathway, offering a novel oral treatment option for individuals enduring chronic inflammatory conditions.

Christophe Bourdon, CEO of LEO Pharma, highlighted the significance of STAT6 in treating various inflammatory disorders beyond dermatology. The partnership with Gilead is set to expedite the development of the STAT6 program, maximizing its potential across dermatological and other applications. Bourdon underscored the importance of this collaboration in acknowledging LEO Pharma's scientific capabilities and commitment to innovation for patients with skin diseases.

The terms of the agreement involve LEO Pharma receiving up to $1.7 billion, including a $250 million upfront payment. Additionally, Gilead will pay tiered royalties on the sales of oral STAT6 products, while LEO Pharma will earn similar royalties on the sales of topical products. This financial arrangement underscores the mutual benefits anticipated from the partnership.

The collaboration is expected to influence Gilead’s financial performance, with an estimated reduction in both GAAP and non-GAAP earnings per share by 2025. Bank of America Securities and Latham Watkins LLP acted as financial and legal advisors respectively for LEO Pharma in facilitating this transaction.

Gilead Sciences, founded with the goal of making significant advances in medicine, is known for its work in preventing and treating life-threatening diseases, including those related to inflammation. With operations spanning over 35 countries, Gilead is headquartered in Foster City, California. On the other hand, LEO Pharma is dedicated to elevating the standard of care for individuals with skin conditions, supported by its broad portfolio of treatments that reach millions of patients annually. Headquartered in Denmark, LEO Pharma is a global enterprise with a strong commitment to dermatological innovation.

Through this partnership, both companies aim to harness their respective strengths to bring new treatment options to the market for patients suffering from inflammatory diseases, promising a future of enhanced therapeutic possibilities.