Arcutis, Sato enter licensing agreement for roflumilast in Japan

Key takeaways:

• The agreement will expand roflumilast into Japan.
• Arcutis will receive an upfront payment of $25 million from Sato.

Arcutis has entered into a licensing agreement with Sato Pharmaceutical Co. Ltd. to develop, manufacture and commercialize topical roflumilast in Japan for the treatment of multiple skin conditions, according to a company press release.

Roflumilast, which comes in both cream and foam topical formulations, is a next generation phosphodiesterase type 4 inhibitor. Under this strategic collaboration and licensing agreement, Sato will have exclusive rights to develop, manufacture and commercialize both formulations of the drug for multiple dermatological conditions including plaque psoriasis, seborrheic dermatitis, atopic dermatitis and “potentially additional dermatological conditions in the future,” according to the release.

“We are delighted to partner with Sato, who share[s] our mission to provide meaningful innovation to individuals suffering from immune-mediated skin diseases,” Frank Watanabe, president and CEO of Arcutis, said in the release. “This partnership, built on topical roflumilast’s strong product profile, expands the market opportunity for this effective and well-tolerated steroid-free treatment for multiple skin conditions, and provides meaningful non-dilutive capital for us.”

Per this agreement for Sato’s rights in Japan in addition to the agreement signed in the summer of 2023 for Huadong Pharmaceutical’s rights in Greater China and Southeast Asia, Arcutis will maintain the rights to roflumilast cream and foam in the U.S., where it is marketed as Zoryve, and other geographies excluding these areas.

Sato has agreed to pay Arcutis $25 million for the licensing rights with a possible additional $40 million if certain regulatory and sales milestones are reached. Arcutis may also receive tiered, low double-digit percentage royalties, according to the press release.