GSK unit Stiefel snags rights to skin drug for CAD$35M

Stiefel Laboratories has injected a new drug in mid-stage development into its dermatology pipeline. The company, a unit of GlaxoSmithKline ($GSK), has ponied up CAD$35 million ($33.9 million) in an upfront payment to Welichem Biotech for rights to an experimental anti-inflammatory compound dubbed WBI-1001 for markets outside of China, Taiwan, Macao and Hong Kong.

The topical drug is a non-steroidal treatment in Phase II development for psoriasis and atopic dermatitis, Research Triangle Park, NC-based Stiefel said in a statement. Welichem ($WBI.TSX), headquartered in Burnaby, British Columbia, has gathered safety and efficacy evidence on the drug in early- and mid-stage studies for the treatment of mild to moderate psoriasis and moderate to severe atopic dermatitis, with data on the compound as a single treatment for up to 12 weeks.  

Welichem's shares were down CAD 9 cents or 18.75% to CAD 39 cents per share as of 9:50 a.m. ET today, the morning after Stiefel announced the deal to gain rights to the Canadian biotech's lead candidate. And, as of Wednesday, Welichem shareholders hadn't yet had their say on the deal, which is subject to their approval.

On top of the upfront payment, Welichem is eligible for customary development and commercial milestone payments. Stiefel also has an option to buy rights to WBI-1001 in the Asian markets that are excluded from the initial agreement for another CAD$15 million ($14.5 million), according to the company.

"Based on clinical results to date, we believe that WBI-1001 has the potential to be a first-line topical therapy for psoriasis and atopic dermatitis" Dr. Liren Tang, Welichem's president and CEO, said in a statement. "As a leader in dermatology products, Stiefel has the clinical development and commercialization capabilities to bring this novel product to these patients around the world."

- here's the release