Organon Expands Dermatology Portfolio with $1.2B Acquisition of Dermavant and VTAMA Cream

Acquisition Details:
Organon has agreed to acquire Dermavant for up to $1.2 billion, with an upfront payment of $175 million and a $75 million milestone payment upon regulatory approval for atopic dermatitis, as well as up to $950 million for commercial milestones.

VTAMA Cream:
VTAMA (tapinarof) cream is a novel, non-steroidal topical therapy approved by the FDA in May 2022 for treating plaque psoriasis in adults and is under review for atopic dermatitis in adults and children aged two years and older.

Strategic Rationale:
The acquisition aims to enhance Organon’s dermatology portfolio, leveraging Dermavant’s strong U.S. dermatology presence and Organon’s global market reach and regulatory expertise.

Market Impact:
VTAMA cream has quickly become the leading branded topical treatment for plaque psoriasis, and the acquisition is expected to expand Organon’s dermatology offerings in the U.S. market.

Financial Impact:
The transaction is expected to be modestly dilutive to Adjusted EBITDA in 2025, turning accretive in 2026, with net leverage expected to be elevated above 4.0x as a result of the transaction.

Closing Date:
The transaction is expected to close in the fourth quarter of 2024, subject to review under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions.