Roivant sells Dermavant to Organon for up to $1.2B

Roivant is capitalizing once again on its unique business strategy, this time by selling its subsidiary Dermavant to Organon for a potential $1.2 billion. The majority of this amount, $950 million, is tied to commercial milestones, as revealed in an announcement on Wednesday. Organon is making an initial payment of $175 million, with an additional $75 million contingent upon FDA approval of Dermavant’s skin cream, Vtama, for treating atopic dermatitis. This approval decision is anticipated by the end of the year. Furthermore, Organon will provide tiered royalties on sales to Dermavant’s shareholders.

Roivant CEO Matt Gline highlighted this transaction as another example of the company’s inventive approach to collaborative ventures. In the same announcement, Organon CFO Matthew Walsh noted that the milestone-driven nature of the deal underscores the company's focus on disciplined capital management.

Vtama was initially approved for treating plaque psoriasis in May 2022 and generated $18.4 million in sales during the first quarter—a 10% increase compared to the same period in 2023. The number of prescriptions has more than doubled from nearly 200,000 in August 2023 to over 430,000 by July. Approval for atopic dermatitis is expected to significantly boost revenue, with Gline expressing enthusiasm about leveraging Organon’s commercial capabilities for Vtama.

In January, Dermavant released updated data from two studies showing that over 80% of patients treated had more than a 75% improvement on a skin-clearing endpoint. This deal is the second major acquisition of a Roivant entity in the past year, following the sale of Telavant to Roche for $7.1 billion upfront in late 2023.

Roivant’s other subsidiaries, such as Priovant and its leading product brepocitinib, continue to make progress. Brepocitinib is currently in two Phase 3 trials for dermatomyositis and non-infectious uveitis, although recruitment for the non-infectious uveitis trial has not yet begun.