As Concert Pharmaceuticals prepares to submit its experimental hair loss treatment to the FDA, it is also exploring potential partnerships to help sell the drug in the US. But instead of collaborating, Concert agreed to be acquired in a deal that puts its flagship program in the hands of a larger company with the resources to commercialize it globally.
Sun Pharmaceuticals buys Concert in a $576 million deal. Under the financial terms announced Thursday, Sun will pay $8 for each share of Lexington, Mass.-based Concert, representing a premium of about 33 percent over the biotech’s average share price over the past month. Concert shareholders could stand to gain even more. The deal includes a contingent value option that requires Mumbai, India-based Sun Pharma to pay up to an additional $3.50 per share if Concert’s drug, deuruxolitinib, achieves milestone sales. If approved, the product would compete with a rival anti-hair loss drug from Eli Lilly and potentially another from Pfizer.
Concert has developed a drug to treat alopecia areata, a condition in which the immune system attacks hair follicles. The resulting hair loss from alopecia may be patchy or complete. Although it mostly affects the scalp, alopecia can also cause hair loss elsewhere on the body. This autoimmune disorder affects both women and men and can occur at any age.
Concurrently tested deruxolitinib (called CTP-543 in earlier stages of its development) in two placebo-controlled phase 3 studies. Results from the first study, which enrolled 706 patients, showed that both doses of the twice-daily pill led to statistically significant hair restoration after 24 weeks of treatment. There were similar results reported last August for the second phase 3 study, which enrolled 517 patients. In his report from financial results for the third quarterConcert said it plans to file a new drug application for deuruxolitinib in the first half of 2023. The company added that it is conducting pre-commercial activities with the intention of commercializing the drug in the US on its own or with the help of strategic partners.
Deuruxolitinib is a small molecule designed to block JAK1 and JAK2, two
Janus kinase enzymes that play a role in inflammation. Other drugs from the class of drugs known as JAK inhibitors have reached the market. These drugs pose potentially fatal cardiovascular and cancer risks that are noted on their labels. Because of these risks, The FDA has increased its scrutiny of JAK-blocking drugs.
In the two phase 3 trials of deruxolitinib, serious adverse events were reported in nine patients in the first phase 3 study and five patients in the second. Concert said only one of the adverse events in each late-stage study was considered possibly related to the experimental treatment. For the rest of the study participants, the drug was well tolerated. Concert reported that the most common side effects included Covid-19 infection; the common cold; higher levels of creatine kinase (an indicator of potential muscle damage); acne; and headache.
Sun Pharma and Concert expect to complete the transaction later this quarter. If deuruxolitinib reaches the market, it will compete with Eli Lilly’s Olumiant, which FDA approved last June as a treatment for alopecia. Like the drug Concert, Lilly’s pill is a JAK inhibitor. Olumiant was first approved in 2018 as a treatment for moderate to severe rheumatoid arthritis. Pfizer, meanwhile, has already done so attached for multi-market regulatory approvals for its alopecia treatment JAK inhibitor ritlecitinib.
“There is a significant unmet need in the area of alopecia areata, and we look forward to building on Concert’s commitment to supporting the alopecia areata patient community,” Abhay Gandhi, Sun Pharma’s CEO for North America, said in a prepared statement. “We are well positioned to successfully bring this product to the global market.”