Dermatology Company Sol-Gel Posted two significant messages; One on licensing its two leading acne and rosacea treatment products to the Galderma Corporation, and the other on the development plans for a new psoriasis treatment product. Sol-Gel Is traded on the Nasdaq at a value of $ 308 million (at a price per share about 10% higher than when it was first issued in 2018).
He is the chairman and controlling shareholder of the company Murray Arkin, A leading billionaire and investor in Israel, who in 2004 sold the pharmaceutical company Agis to Perigo for $ 820 million, and has since invested in dozens of companies in the biomed field, as well as in leading companies in the Israeli economy such as Bezeq, Bank Hapoalim and Bituach Yashir.
“Sol-Gel is probably my last active managerial role in my career,” Arkin, 68, told Globes, “so I’m very determined to make it a leading company.” This does not mean, of course, that Arkin is retiring, but that he will continue to dominate his investment empire. Sol-Gel’s CEO from the beginning is Alon Sri-Levy, and the responsibility is divided so that he is responsible for day-to-day management, and Arkin for R&D and strategy.
Did you choose this active role, as closing a circle with the field of dermatology?
“Definitely. I have 48 years of experience in this field, and many products that are still being signed up are the ones I brought into the world along with my friends Baggis. I try to bring everything I have learned, and also to show young people that my strength is still in my waist.”
The agreement announced by Sol-Gel today is part of a long-term strategy, which should reach its interesting stage in just five years. Sol-Gel gives Galdrama the full marketing rights to its acne and rosacea medications, for a $ 7 million down payment, royalties of 15% -20% and another $ 8 million in milestone payments.
On the face of it, this is a relatively small amount for the product’s potential, but includes an interesting section that allows Sol-Gel to return the product to Lydia in five years, without consideration.
According to Arkin, “Introducing such a product to the market requires $ 100-150 million, and a company like ours cannot afford to spend such a sum to build a marketing system, and in the meantime also to develop its future products. However, Galdrama is a leader in these areas, but its products are losing These days their patent. “
Why would Gelderma return the product to you after five years of market building?
“Because in this period they intend to develop new products, which have a potential of billions of dollars, compared to the potential of hundreds of millions of the products we deliver to them. While they build their greater opportunity, they can preserve their marketing and revenue, and then when it arrives The new product that is more worthwhile for them to market, they will move to. “
The agreement is subject to FDA approval for both of these products, which was already due to be accepted but was rejected due to the inability of the FDA to physically inspect the company’s plants during the Corona period. If all goes well, the approvals are expected in the coming months.
And what will you do in the five years until the product comes back to you?
“During this period, we are developing an innovative product for the treatment of psoriasis, using our special technology for the enxpolation (wrapping) of tiny amounts of the drug in a bubble that facilitates its penetration into the skin. Our competitor is Arcutis, which is valued at over $ 1 billion. “We have shown in animal experiments that our product is a better version of their product. We tested it in a special animal model developed by Prof. Amos Gilhar of the Technion, in which human skin is implanted.”
To be an acquirer and not an acquirer
Arkin estimates that Sol-Gel’s product will still be patented when Arcotis’ product becomes generic. “In such a field, when the rest of the products are generic, while our product is protected and better than them, we will be able to take a very significant share of the market.
In the past, you wanted to set up a larger array of dermatology companies around Sol-Gel. Is this still the plan?
“There is no doubt that Sol-Gel should be part of a large topical dermatology company (external use). If we succeed in our program, we can be the acquirer and not the acquirer, but the consideration is always the good of the employees and shareholders.”