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ALM: Pays US$55mn to acquire R&D and marketing rights for KX2-391 in phase III

Pays US$55mn to acquire R&D and marketing rights for KX2-391 in phase III

Almirall has acquired the R&D and marketing rights (US and Europe) for KX2-391, a treatment in Phase III (FDA) for actinic keratosis being developed by Athenex. The price paid is US$55mn and the company estimates that if milestones and 15% royalties are included, the total payments could add up to US$155mn.

If Almirall decides to develop new molecules from the active principle, Athenex would be entitled to receive an additional US$65mn.

Actinic keratosis: a growing market

The company commented that 14-29% of visits to dermatologists relate to actinic keratosis. The market is estimated in US$300mn (US and Europe) and grows at double digits. The two leading medicaments have a 60% market share. Almirall did not comment on the evolution of the approval process and when it is to apply for registration in Europe.

We see this acquisition as a defensive move

Almirall’s Solaraze (diclofenac sodium) treats actinic keratosis and we expect €35mn sales (5.4% of the total) in 2017e. Competitors launched generics this year and sales of Solaraze should start to decline.

We see the development and expected marketing of KX2-391 as the strategy to remain in the profitable market for actinic keratosis. KX2-391 should be the substitute of Solaraze once it obtains FDA approval. If we look at market shares, a 10-15% share of a US$300mn market would approximately equal to Solaraze’s current sales.

This move does not change our opinion. We continue to recommend to Hold with a target price of €10.48.