By Colin Kellaher

Organon has agreed to buy medical dermatology company Dermavant Sciences, a majority-owned unit of Roivant Sciences, in a deal worth up to $1.2 billion.

Organon on Wednesday said it will make an up-front payment of $175 million, along with up to $1.025 billion in milestone payments.

Organon, a Jersey City, N.J., healthcare company, said the deal expands its dermatology portfolio with the addition of Vtama, a non-steroidal topical therapy approved for treatment of plaque psoriasis in adults and under FDA review for an additional indication to treat atopic dermatitis.

Organon said it will pay Dermavant's shareholders tiered royalties on sales of Vtama, adding that it will also assume Dermavant liabilities valued at roughly $286 million as of June 30.

The deal is slated to close by the end of the year.

Biopharmaceutical company Roivant said it expects the deal to result in about $500 million in payments and cash savings within the next three years, along with the removal of all debt from its balance sheet.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

September 18, 2024 08:14 ET (12:14 GMT)

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