GlaxoSmithKline (GSK) is ending its effort to commercialize Toctino (alitretinoin) in the U.S., nearly four years after buying global rights to the eczema drug from its developer Basilea Pharmaceutica for up to £196 million ($281 million).
Basilea disclosed GSK’s action yesterday in a terse announcement that included no reason for the decision.
In its previous public statement about Toctino on August 14, 2015, Basilea said GSK subsidiary Stiefel Laboratories was engaged on “ongoing” preparations to file an NDA with the FDA seeking approval to market the drug for the treatment of severe chronic hand exczema.
Toctino is a once-daily oral retinoid and the only prescription medicine specifically approved for the treatment of severe chronic hand eczema unresponsive to potent topical corticosteroids in adults. Toctino is not approved in the U.S.
Under its June 2012 deal selling Toctino rights to Stiefel, Basilea had been eligible for between £30 million ($43 million) and £50 million ($72 million) in milestone payments, plus double-digit success payments on U.S. net sales beginning three years after U.S. product launch.
Stiefel agreed to make the milestone payments in addition to paying Basilea £146 million ($209 million) up front. The deal was developed at a time when GSK was eager to rebuild its dermatology portfolio through the acquisition of drugs showing growth in demand.
The deal gave Stiefel all Toctino patent rights, trademarks, and product registrations owned by Basilea, as well as a license for the use of clinical information and product know-how from Basilea. Stiefel agreed to oversee Toctino’s further development, manufacture, and commercialization worldwide. Basilea agreed to assign existing Toctino distribution agreements in Europe, Canada, Mexico, Israel, and South Korea to Stiefel.
For the six months, ending June 30, 2015, Basilea recognized CHF 18.8 million ($18.5 million) as contract revenue related to the upfront payment—accounting for three quarters of the company’s CHF 24.988 million ($24.65 million) in total revenue during the period. For all of 2014, Basilea recognized CHF 36.9 million ($36.4 million) as contract revenue, accounting for 87% of total operating income reported that year.
