Tralokinumab

For the first time since 2018, dermatology-focused Leo Pharma projects that it could turn a profit this year. Its Wednesday guidance comes on the heels of a broad multiyear restructuring — a plan that focused on strengthening Leo’s balance sheet ahead of a potential IPO. And the pharma company should be on track to go public in 2026 if it becomes net profit positive and free cash flow positive this year, CEO Christophe Bourdon told Endpoints News in an interview. Leo also plans to ink dermatology deals this year, with a focus on in-licensing assets that have the potential to address a significant unmet need, Bourdon said. In January, it made a pact with Gilead to advance the Danish company’s early-stage pipeline of STAT6 inhibitors. The biotech’s troubles started in April 2021, when it was slapped with a CRL for its atopic dermatitis candidate, which was meant to compete with Sanofi and Regeneron’s Dupixent. The drug went on to secure approval in December that same year with the brand name Adbry. But when Bourdon joined the company in 2022, it was dealing with high launch costs for Adbry, on top of high R&D costs. It was also operating at an EBITDA in the minus double-digits. It has since been through a series of changes over several years: significant staff cuts , a two-way split in R&D operations that involved an executive reshuffle, and a $14 million acquisition of the rare skin disease company Timber Pharmaceuticals. And on Wednesday, Leo said it delivered a 7% in EBITDA last year. In 2024, sales of the company’s dermatology portfolio hit 10 billion Danish krone ($1.4 billion), which is a 12% rise from 2023, mainly driven by growth in the US. Its total revenues climbed 10% to DKK 12.5 billion ($1.76 billion), bolstered by cash from partnerships. “When I kicked off 2024, I committed to three things — grow the top line, advance innovation and improve the profitability of the organization,” Bourdon said. “We’ve nailed those three objectives.” The company secured EU approval for its chronic hand eczema drug Anzupgo in September. Launch activities for Anzupgo are underway in Germany and Denmark. The pan-JAK inhibitor is also under FDA review with a decision expected in the third quarter. There are no approved treatments for chronic hand eczema in the US. There are five million patients eligible for treatment with Anzupgo across the US and Europe, Bourdon said. Leo’s medical market access and commercial teams are ready for a US launch in the middle of the year, he added. Last month, Gilead licensed Leo’s preclinical oral STAT6 inhibitors and protein degraders for inflammatory diseases, including certain skin conditions. Leo received $250 million upfront, but the pact could be worth up to $1.7 billion when factoring in milestones, with Leo also eligible for tiered royalties on sales. Targeting STAT6 involves entering the nucleus of the cell and degrading complement to correct inflammatory pathways of disease, Bourdon said, adding the approach exemplifies the latest “wave of innovation” in dermatology. It also has potential applications in oncology, he said.

Gilead Sciences’ inflammation drug prospects have come via deals, and the latest one brings drug candidates for an elusive target that’s in pursuit by a growing number of companies. The drugmaker is paying $250 million up front to acquire preclinical small molecules from LEO Pharma. Gilead will continue development of oral formulations of these potential drugs, while privately held LEO will develop topical versions, according to deal terms announced Saturday. Denmark-based LEO could receive up to $1.7 billion in additional payments, depending on the progress of the partnered research. LEO aims to block inhibit the activity of IL-4 and IL-13, two signaling proteins that are validated targets associated with inflammation. Both proteins are already addressed by currently available injectable drugs, including Adbry, an FDA-approved IL-13-blocking antibody marketed by LEO for treating atopic dermatitis. But immunology drug research has been pursuing ways to block these targets with oral small molecules. Some of that research has focused on alternative ways of inhibiting inflammation driven by IL-4 and IL-13. Health IT Reducing Clinical and Staff Burnout with AI Automation As technology advances, AI-powered tools will increasingly reduce the administrative burdens on healthcare providers. By Dr. Michael Blackman, Chief Medical Officer at Greenway Health Signal transducer and activator of transcription factor 6, or STAT6, is a protein that’s required for IL-4 and IL-13 signaling. LEO says preclinical research indicates that targeting STAT6 offers the potential to treat a broad population of patients with an oral alternative to injectable biologic drugs. The LEO drugs are small molecule inhibitors and targeted protein degraders. Gilead’s deal with LEO brings it into a burgeoning field of companies developing STAT6-targeting drugs. While Sanofi’s blockbuster Dupixent, an antibody inhibitor of IL-4 and IL-13, is a cornerstone of the pharma giant’s immunology strategy, the company also has designs on developing that product’s successor. In 2023, Sanofi paid $125 million up front to begin a partnership with privately held Recludix Pharma, a preclinical developer of small molecule inhibitors of STAT6. Recludix is scheduled to present on Wednesday during the annual J.P. Morgan Healthcare Conference in San Francisco. Sanofi has spread its STAT6 bets via a partnership with Nurix Therapeutics, developer of targeted protein degraders. Nurix is also partnered with Gilead in an alliance that spans oncology and immunology.Yet another protein degrader biotech, Kymera Therapeutics, in October began a Phase 1 test of its STAT6 degrader, KT-621. Just before the end of 2024, Johnson & Johnson announced it had licensed global rights, excluding Japan, to Kaken Pharmaceutical’s preclinical STAT6 inhibitor for autoimmune and allergic diseases. To industry observers, the flurry of STAT6 dealmaking is encouraging for the field. Leerink Partners analyst Faisal Khurshid wrote in a note sent to investors on Sunday that as the fourth major licensing deal for STAT6, Gilead’s collaboration with LEO underscores the growing strategic importance of this mechanism. An oral STAT6 degrader has the potential to be a category-defining medicine for T helper type 2 (Th2) inflammatory disorders, and could become an “oral Dupixent,” Khurshid said. Sponsored Post The Funding Model for Cancer Innovation is Broken — We Can Fix It Closing cancer health equity gaps require medical breakthroughs made possible by new funding approaches. By Eve McDavid - CEO of Mission-Driven Tech “We see STAT6 as strategically important for companies aiming to develop small molecules for I&I (immunology & inflammation) indications and/or hold a position in Th2 inflammatory disorders (i.e., atopic dermatitis, asthma),” Khurshid said.