• Novartis on Thursday inked a deal for development and commercialization rights to MOR106, an interleukin (IL)-17C inhibitor for the treatment of atopic dermatitis that was jointly developed by Galapagos and MorphoSys.
• Per deal terms, the Swiss pharma will pay $111 million upfront, with another $1 billion in potential milestone payments lined up, as well as royalties in the low-teens to low-twenties to be split jointly between the two companies.
• Novartis will take over all costs related to development, manufacturing and commercialization globally. MOR106 is currently being studied in a Phase 2 trial.

Novartis aims to expand its presence in dermatology and immunology, building upon the strong launch of its top-selling IL-17 inhibitor Cosentyx (secukinumab).

Cosentyx rebounded from an apparent slowdown at the start of the year, earning more than $701 million in the second quarter. As of April, Novartis claimed the drug holds a greater than 40% share in new-to-brand prescriptions in rheumatology and a nearly 20% share in dermatology.

With more than $2 billion in sales annually, Cosentyx has clearly proved capable of competing with a field full of rivals. Just among IL inhibitors, it competes with Eli Lilly’s Taltz (ixekizumab), Johnson & Johnson’s Stelara (ustekinumab) and Tremfya (guselkumab) and Bausch Health’s Siliq (brodalumab).

The deal with Galapagos and MorphoSys gives Novartis another potential contender in this space. The Swiss pharma will initially test the compound in atopic dermatitis, but the pact allows for studying other indications. MOR106 is the only publicly known IL-17C inhibitor currently in testing, according to the companies.

“We are a leader in immuno-dermatology and committed to reimagining the care of patients with severe diseases such as psoriasis, chronic spontaneous urticaria and atopic dermatitis. There is a key role for biologics to treat these severe diseases, which are more than just skin conditions, as they have complex underlying root causes,” said Eric Hughes, Novartis’ global development unit head of immunology, hepatology and dermatology, in a statement.

Novartis’ immuno-dermatology pipeline is a bit light at the moment — at least compared to its work in areas like oncology. The company only has three other dermatology-targeted drugs in development, plus new indications for Cosentyx.

Atopic dermatitis is a severe form of eczema that affects about 8% of adults worldwide, and nearly 14% of children.