Organon to Acquire Dermavant and VTAMA® (tapinarof) Cream, 1%

Organon, a global healthcare company focused on improving women's health, has announced its acquisition of Dermavant Sciences Ltd., a subsidiary of Roivant, in a definitive agreement. This strategic acquisition expands Organon's international dermatology capabilities to the U.S. market.

Dermavant is known for its development and commercialization of innovative therapies in immuno-dermatology, including the VTAMA® (tapinarof) cream. VTAMA cream is a non-steroidal, once-daily topical treatment for mild, moderate, and severe plaque psoriasis in adults, approved by the FDA in May 2022. The cream, which requires no safety label warnings or usage restrictions, is currently under FDA review for an additional indication to treat atopic dermatitis in both adults and children aged two years and older. The FDA's decision on this application is expected in the fourth quarter of 2024.

Psoriasis, a chronic inflammatory skin disease, affects over 8 million Americans, while atopic dermatitis impacts approximately 16.5 million adults and more than 9.6 million children in the U.S. Women are disproportionately affected by these conditions, which significantly impact the quality of life and disease burden.

Kevin Ali, CEO of Organon, expressed enthusiasm about the acquisition, highlighting the synergy between Dermavant's robust U.S. dermatology operations and Organon's global market access and regulatory expertise. He emphasized that the combination would enhance the availability of VTAMA cream, providing an effective and well-tolerated treatment option for individuals with plaque psoriasis and potentially atopic dermatitis.

Matt Gline, CEO of Roivant, and Todd Zavodnick, CEO of Dermavant, both lauded the acquisition as a strategic move that aligns with their companies' long-term goals. Gline noted the attractiveness of the deal for both Roivant and Dermavant stakeholders, while Zavodnick emphasized the potential for continued growth and innovation under Organon's larger structure.

Financially, Organon agreed to acquire Dermavant for up to $1.2 billion, with an initial payment of $175 million and an additional $75 million milestone payment upon regulatory approval for atopic dermatitis. The deal also includes up to $950 million in commercial milestone payments and tiered royalties on net sales. Completion of the transaction is pending regulatory review and other customary conditions, with closing expected in the fourth quarter of 2024.

The acquisition is structured to be financially prudent, with success-based milestones and royalties. Organon’s CFO, Matthew Walsh, noted that the deal is designed to align with the company's disciplined capital allocation strategy, aiming to reduce leverage while strategically adding growth assets.

About VTAMA cream, it is a non-steroidal topical treatment that activates aryl hydrocarbon receptors in the skin to reduce inflammation and normalize the skin barrier. Its safety and efficacy were demonstrated in clinical trials, and it is currently under FDA review for treating atopic dermatitis.

Organon, headquartered in Jersey City, New Jersey, is dedicated to improving women's health across various stages of life, offering over 60 medicines and products in women’s health, biosimilars, and established medicines. Dermavant, a biopharmaceutical company, focuses on developing therapies for high unmet medical needs in immuno-dermatology, including plaque psoriasis and atopic dermatitis.