PellePharm Inks $70M Deal with LEO Pharma for Skin Cancer Drug

Xconomy San Francisco — 

PellePharm now has a partner to finance late-stage clinical tests of its experimental treatment for a rare skin cancer that has no FDA-approved drug treatment.

Denmark-based LEO Pharma has agreed to pay $70 million to PellePharm for the biotech startup’s Phase 3 study of patidegib, a topical gel developed to prevent and treat Gorlin syndrome. The payment consists of an equity investment and cash for the clinical trial.

LEO Pharma, which specializes in skin diseases, gains an option to acquire San Francisco-based PellePharm (a subsidiary of startup creator BridgeBio) and the startup’s shareholders could receive up to $690 million in milestone payments. If the drug reaches the market, LEO Pharm would also pay those shareholders royalties tied to the drug’s sales.

Gorlin syndrome, also known as nevoid basal cell carcinoma syndrome, is a genetic disorder that predisposes a patient to develop cancers, particularly basal cell carcinoma, a skin cancer. The most common treatment for this cancer is surgery, and Gorlin syndrome patients can undergo as many as 30 surgeries per year starting in their mid-teenage years, according to PellePharm and LEO Pharma.

PellePharm’s drug was developed to block the hedgehog signaling pathway, which plays a role in cellular function and tissue development. Gorlin syndrome patients have a mutation in the PTCH gene, which normally turns off this pathway when it’s not needed. The PellePharm drug was developed to block the pathway, and in turn, halt cancer growth. Though the PellePharm drug is a small molecule, the company developed it in a topical gel formulation in order to avoid affecting other parts of the body. PellePharm says its gel is stable at room temperature for at least two years, which is meant to make it easy for patients to use at home to manage their disease.

Under the agreement, PellePharm will take the lead on clinical testing of patidegib, and LEO Pharma will have an advisory role. The drug is expected to start the Phase 3 trial in early 2019. If it wins approval, both companies will share responsibilities in planning its commercialization.

PellePharm is a subsidiary of Palo Alto, CA-based BridgeBio. The startup creator forms companies focused on developing treatments for rare genetic diseases. Those biotechs operate independently, but share resources provided by BridgeBio.

Photo by Wade Roush