Denmark-based LEO Pharma has entered a definitive agreement to buy Bayer’s global prescription dermatology unit for an undisclosed sum, a move that the company said will enable it to “expand significantly” in key markets worldwide and broaden its therapeutic areas.

LEO will acquire global product rights, except for Afghanistan and Pakistan, and take over the sales and marketing organizations in 14 countries, as well as a production facility in in Segrate, Italy. Some 450 employees will transfer to the new owner. 

The transaction is expected to close during 2018 for the US market, and during the second half of 2019 for all other markets, subject to the satisfaction of customary closing conditions and regulatory approvals. Bayer had been expected to sell the business as part of a streamlining of focus following the Monsanto acquisition.

With annual sales of more than €289 million, the portfolio to be transferred includes branded topical prescription treatments for acne, fungal skin infections and rosacea, along with a range of topical steroids.

Inclusion of the Bayer global product slate will add complementary treatment areas and strengthen the existing business of LEO Pharma worldwide, allowing the company to more than double its sales in some markets, the drugmaker said.

The transaction does not include Bayer’s over-the-counter dermatology portfolio of brands such as Bepanthen and Canesten and other products it picked up with the $14.2 billion acquisition of Merck & Co’s OTC business in 2014, which was widely criticized for being too expensive.

With the strong prescription dermatology brands, LEO Pharma said it “will advances significantly towards our goal of helping 125 million patients by 2025.” At the same time, the company will broaden its treatment range and considerably enhance its size in key markets, said Gitte P. Aabo, president and CEO.

Praising the Danish company’s “long history as a leader in scientific advancement and a culture that values discovery and innovation,“ Heiko Schipper, member of Bayer’s Board of Management and president of Consumer Health, said LEO Pharma “is the right owner to grow and further develop the prescription dermatology business while enabling us to focus on building our core over-the counter brands.”