Johnson & Johnson is ending development of bermekimab in eczema, but said it will continue to work on the previously rejected XBiotech drug in another skin disease known as hidradenitis suppurativa. The move results in a $610 million pre-tax impairment charge. 

J&J’s Janssen unit had paid $750 million for the rights to bermekimab in late 2019 and could have doled out more if the Big Pharma decided to test the anti-IL-1alpha monoclonal antibody in areas outside dermatology. The company demonstrated confidence in the asset despite the European Union’s rejection of the drug for colorectal cancer in 2017.

But now that deal is going up in smoke as J&J appears to be unimpressed by data from a midstage test in atopic dermatitis, which was scheduled for a readout this year. The company disclosed the culling Wednesday in a Securities and Exchange Commission filing

“Additional information regarding efficacy through the clinical trial became available which led the Company to the decision,” J&J said in the filing. The phase 2b trial was updated Jan. 26 on the ClinicalTrials.gov database and the study’s completion date is scheduled for June 14 of this year. 

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While J&J is axing the drug in atopic dermatitis, it will continue studying the treatment in hidradenitis suppurativa, a chronic immune-mediated skin disease. The drug retains a carrying value of about $150 million for the HS indication, the company said in the SEC disclosure. That phase 2a/2b trial is slated to wrap up in September 2023, according to ClinicalTrials.gov. 

J&J’s move comes the same day as Novartis axed its topical pan-JAK inhibitor for mild to moderate atopic dermatitis.

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