Gilead and LEO Pharma Partner on Inflammatory Condition Programs

Gilead Sciences has strategically partnered with LEO Pharma to accelerate the development and marketing of LEO Pharma's small molecule oral signal transducer and activator of transcription 6 (STAT6) programs. These programs are designed to provide treatment solutions for individuals suffering from inflammatory conditions.

The collaboration will see Gilead acquire LEO Pharma's preclinical oral STAT6 small molecule inhibitors and targeted protein degraders. Gilead will lead the further development of these oral programs, while LEO Pharma will concentrate on the potential development of topical formulations of STAT6 inhibitors. This agreement allows Gilead to gain global rights to develop, manufacture, and commercialize the oral STAT6 program.

Financially, LEO Pharma stands to receive up to $1.7 billion in total payments through this partnership, which includes an upfront payment of $250 million. Moreover, LEO Pharma is entitled to receive tiered royalties based on sales of oral STAT6 products. Conversely, Gilead might earn royalties from the sales of any topical formulations that result from this collaboration. Additionally, LEO Pharma retains the option to co-commercialize oral programs for dermatology outside the United States, while exclusively holding global rights to topical STAT6 formulations in dermatology.

This collaboration is anticipated to impact Gilead's financial performance, specifically projecting a reduction in both GAAP and non-GAAP earnings per share for 2025 by $0.15 to $0.17. Flavius Martin, Gilead Sciences' Research Executive Vice-President, emphasized the company's commitment to expanding its inflammation portfolio and developing advanced therapies aimed at supporting long-term remission in patients with inflammatory diseases. Through this partnership, Gilead aims to explore the potential of the STAT6 pathway to deliver an oral treatment option for patients battling chronic inflammatory conditions.

Bank of America Securities and Latham Watkins lent their expertise by providing financial and legal advisory services to LEO Pharma for this deal. STAT6, a vital transcription factor, plays a crucial role in IL-4 and IL-13 cytokine signaling, making it a validated target for Th2-mediated inflammatory conditions like atopic dermatitis and asthma. Preclinical studies indicate that targeting STAT6 might offer an oral alternative to injectable biologics.

LEO Pharma, headquartered in Denmark, is recognized for its specialization in dermatological care. This partnership builds on Gilead's previous collaborations, such as its agreement with Terray Therapeutics in December 2024, aimed at discovering and developing small-molecule therapies.