J&J to record $610 million charge related to skin disease drug

[February 02, 2022]  (Reuters) -Drugmaker Johnson & Johnson said on Wednesday it would take a non-cash impairment charge of about $610 million in the first quarter over its decision to stop the development of a skin disease treatment.

The drug, bermekimab, is a human monoclonal antibody that was being tested for the treatment of chronic skin diseases atopic dermatitis and hidradenitis suppurativa.

J&J said it had decided to terminate the development of the drug for atopic dermatitis following the availability of additional efficacy data.

The company had struck a $750 million deal in late 2019 to purchase all rights to the drug, which was in Phase 2 development, from XBiotech Inc.

J&J said bermekimab will retain a carrying value of about $150 million relating to hidradenitis suppurativa, after the impairment charge.

Atopic dermatitis, commonly known as eczema, is characterized by skin inflammation and redness. Hidradenitis suppurativa causes painful lumps to form under the skin, especially in areas such as armpits where the skin rubs together.

(Reporting by Amruta Khandekar; Editing by Anil D'Silva)

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