Delgocitinib

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.