Sol-Gel Technologies (NASDAQ:SLGL) said it is acquiring topically-applied drug patidegib from PellePharm, and separately announced $22.8M registered direct and private placement offerings.

Sol-Gel will pay PellePharm $4.7M upfront and total development and NDA acceptance milestones of up to $6M, and up to $64M in commercial milestones plus royalties.

Patidegib, designated as SGT-610 by Sol-Gel, is used to treat Gorlin syndrome — a rare inherited disorder affecting the skin and certain organs and tissues. Patients with this disorder have a risk of developing basal cell skin cancer.

Sol-Gel noted that patidegib has received the FDA’s orphan drug designation and has the potential to be the first therapy for preventing new basal cell carcinomas in Gorlin syndrome, if approved by the agency.

A phase 3 study is expected to start in H2 2023, with results expected by the end of 2025.

“We believe that the risk/reward of this deal is extremely favorable to Sol-Gel and its shareholders. We conducted extensive due diligence on patidegib’s earlier development programs and consulted with expert clinicians to design a rigorous new Phase 3 trial that we believe can overcome the deficiencies of the earlier Phase 3 study to generate the safety and efficacy data necessary to support an FDA approval,” said Sol-Gel CEO Alon Seri-Levy.

In a separate release Sol-Gel, said it priced a registered direct offering with Armistice Capital. The company is selling 2.56M ordinary shares at $5 per share.

Concurrent, the company has agreed to issue to Armistice warrants to buy up to 2.56M ordinary shares in a concurrent private placement (the warrant private placement).

In addition, Sol-Gel’s Chairman Mori Arkin’s owned entity M. Arkin Dermatology will buy 2M ordinary shares and warrants to buy up to 2M shares; The purchase price is $5 per share.

The warrants will have an exercise price of $5.85 per ordinary share.

The total gross proceeds of the registered direct offering and the concurrent private placements are expected to be ~$22.8M.

Sol-Gel plans to use the net proceeds to fund the acquisition and planned clinical trial of patidegib, and for working capital and general corporate purposes.

The registered direct offering and the warrant private placement is expected to close around Jan. 31, subject to conditions.