Organon to buy Roivant's dermatology unit for up to $1.2 billion
(Reuters) -Women health-focused company Organon said on Wednesday it has agreed to buy Roivant's unit Dermavant for up to $1.2 billion, expanding its reach to the skin disorder treatment market.
Shares of Roivant, which owns 86% of Dermavant as of March 31, 2024, and was founded by former Republican presidential candidate Vivek Ramaswamy, were up 1.7% at $12.26 in early trading. However, Organon was down 1.4%.
Dermavant's Vtama cream, approved by the U.S. Food and Drug Administration in May 2022, treats psoriasis, a common long-term inflammatory skin disease.
The FDA is also reviewing an application to expand the use of the drug to treat atopic dermatitis in adults and children over two, with a decision expected by the fourth quarter of 2024.
Atopic dermatitis, often referred to as eczema, causes inflammation, redness, and irritation of the skin and disproportionately affects women. The condition occurs in 10% to 30% of children and 2% to 10% of adults in the United States, according to the National Institutes of Health.
"We are excited for Vtama cream to benefit from Organon's commercial scale. We believe they have the capabilities and reach to ensure patients globally can access this important medicine," said Roivant's CEO Matt Gline.
Vtama generated net product revenue of $75.1 million in the fiscal year ended March 31, 2024, according to Roivant's annual report.
Organon, which was spun-off from Merck in 2021, will make an upfront payment of $175 million, as well as payments of $75 million and up to $950 million upon achievement of certain milestones. Organon will pay Dermavant shareholders tiered royalties on net sales.
The company expects to close the transaction in the fourth quarter of this year.
(Reporting by Sneha S K; Editing by Vijay Kishore)
