Denmark’s Leo Pharma is shelling out $1 billion in cash to reacquire US rights held by Warner Chilcott to the company’s psoriasis portfolio and dermatology pipeline.

The Ballerup-based privately-held group is getting the rights back from Warner Chilcott, which it has been in partnership with since 2003, to its topical psoriasis treatments Taclonex and Taclonex Scalp (calcipotriene and betamethasone) and Dovonex (calcipotriene). The deal also includes Leo’s development pipeline, and all inventories of the products.

The deal is Leo’s largest ever, and chief executive Gitte Aabo said it is “indicative of our commitment to geographic expansion and growth in areas including the USA”. Describing the deal as a “unique stepping stone” to the latter market, she noted that an affiliate has been set up in New Jersey.

The acquisition is Leo’s second this month, having agreed to buy US-Australian dermatology specialist Peplin for $287.5 million, and it has recently expanded into China, Mexico and Russia. “Brazil will come onboard during 2010,” the company noted.

Ms Aabo concluding by noting that Leo, over the last decade, has focused on dermatology and critical care and “this strategy has placed us in a very attractive financial and organisational position to actively pursue opportunities”.

As for Warner Chilcott, it said that the deal will result in a one-time after-tax gain of about $450 million, or about $1.79 a share. Net cash proceeds of about $980 million will be used to repay and terminate its existing senior secured credit facilities ($480 million of which was outstanding) and partly finance the purchase of Procter & Gamble's pharmaceutical unit, which it agreed to acquire for $3.1 billion a month ago.