Roche in part-sale of mixed bag lebrikizumab to Dermira

The deal could be worth more than $1 billion in biobucks for the pair.

California dermatology biotech Dermira will take on exclusive worldwide rights to IL-13 monoclonal antibody lebrikizumab from Roche, although the Big Pharma holds on to its rights for the med in certain indications.

The complex deal could be worth more than $1 billion in biobucks: Drilling down into the numbers, Dermira will make a first payment of $80 million to Roche, with future payments worth $55 million coming next year.

But that’s not all, as Dermira will also need to cough up extra payments if the med hits certain milestones, made up of $40 million when Dermira’s first phase 3 clinical study is started, and up to $210 million when it hits regulatory and first commercial sale milestones “in certain territories."

And then there’s the big number: $1.025 billion, based on the “achievement of certain thresholds for net sales of lebrikizumab,” in indications other than interstitial lung disease, which Roche will be hanging on to.

And should it gain approval, Dermira will also be making royalty payments “representing percentages of net sales that range from the high single-digits to the high teens.”

This comes after a mixed bag of data for the med, as last February, Roche suffered a setback when it posted one win and one loss for identical phase 3 studies for lebrikizumab in asthma patients.

The side-by-side studies were designed to give Roche a solid foundation of data for the approval and marketing of the anti-inflammatory drug for a clearly defined patient population.

But while Lavolta I hit its primary endpoint on significantly cutting the rate of asthma exacerbations among patients selected on two key biomarkers for airway inflammation, levels of serum periostin or blood eosinophils, Lavolta II missed the exact same measure of efficacy.

Ironically, Dermira, which got off a $125 million IPO in 2014 and now has a market cap north of $1 billion, has seen a similar situation with its experimental sweat drug DRM04, which last summer passed one Phase 3 test, but narrowly missed its target on a second late-stage trial, although analysts believed this would still be good enough to gain an FDA approval.

RELATED: Dermira posts broadly positive results for excessive sweat drug

But the deal for Dermira is focused around lebrikizumab’s potential in atopic dermatitis, as well as “all other indications” except for interstitial lung disease, such as idiopathic pulmonary fibrosis (IPF), as Roche is holding on to the exclusive rights to develop and promote the mAb in this indication. This dovetails with its marketed med Esbriet (pirfenidone), which it gained through its 2014 buyout of InterMune.

Dermira says it plans to start a phase 2b dose-ranging test for lebrikizumab patients with moderate to severe atopic dermatitis in the first quarter next year, as it seeks to find the best path for late-stage work. Getting top-line results for this will cost the biotech around $200 million, it estimates, but adds that it should have enough cash to get to 2019, even under this new deal.

Tom Wiggans, chairman and CEO of Dermira, said: “We believe atopic dermatitis is one of the greatest unmet needs in dermatology, and lebrikizumab, if successfully developed and approved, could represent a meaningful advancement in the treatment of this disease. The addition of this program to our development portfolio represents an important step toward our goal of building a leading medical dermatology company dedicated to delivering differentiated, new therapies to the millions of patients living with chronic skin conditions.”