Inclusion Criteria:
1. Aged 18 years of age or older.
2. Provision of written informed consent.
3. Laboratory confirmed previous or current Mycobacterium leprae or Mycobacterium lepromatosis infection.
4. Leprosy type 2 reaction meeting the following criteria:
i. Acute (first episode and no treatment initiated) or ii. Recurrent (at least one further episode occurring 28 days or more after withdrawal of leprosy type 2 reaction treatment).
- Presence of at least 10 leprosy type 2 reaction tender papular and/or nodular skin lesions (not including scars).
- An ENLIST score of at least 9.
5. If a woman of reproductive potential, agree to the use of two reliable contraceptive measures (at least one of which is a highly effective form of contraception) from Screening until at least 4 weeks after completion of treatment with dovramilast or standard of care. Refer to Special Considerations for additional information.
6. If male (including those who have had a successful vasectomy), agree to using a latex condom during any sexual contact with women of reproductive potential from Screening until at least 4 weeks after completion of treatment with dovramilast or standard of care.
Exclusion Criteria:
1. Chronic leprosy type 2 reaction, defined as the reaction occurring for 24 weeks or more during which a subject has required treatment either continuously or where any treatment free period had been < 28 days.
2. Receipt of thalidomide, lenalidomide, pomalidomide, systemic corticosteroids, clofazimine (> 50 mg/day), apremilast or any other phosphodiesterase (PDE) 4 inhibitor, or immunosuppressive/immunomodulatory treatment within 28 days of Baseline.
3. Receipt of an investigational agent within 28 days of Baseline or 5 half-lives of the investigational agent (whichever is longer).
4. Leprosy type 2 reaction with orchitis, uveitis, iritis, or severe neuritis (Grade 3 or greater severe neuritis).
5. Current diagnosis of leprosy type 1 reaction or Lucio's phenomenon.
6. Current tuberculosis, malaria, cutaneous or visceral leishmaniasis or other serious bacterial, viral, or parasitic infection at Screening or Baseline.
7. Active systemic fungal infection requiring or undergoing treatment.
8. Other than leprosy type 2 reaction, any clinically significant (as determined by the Investigator) cardiac, endocrinologic, pulmonary, neurologic, psychiatric, hepatic, renal, hematologic, immunologic disease, or other major disease that is currently uncontrolled.
9. Other than leprosy type 2 reaction, any other dermatological condition that could, in the opinion of the Investigator, interfere with the study assessments.
10. Chronic hepatitis B, chronic hepatitis C, or human immunodeficiency virus (HIV) positive.
11. Pregnant women or breastfeeding mothers.
12. Use (or planned use) of antimetabolites or alkylating agents, rifampin use more frequent than monthly, phenobarbital, carbamazepine, phenytoin, traditional or herbal preparations (including St. John's wort), foods (including grapefruit) known to affect activity of the cytochrome (CYP)3A4 enzyme; of all strong CYP3A and P-gp inhibitors including ketoconazole, itraconazole, voriconazole, posaconazole, clarithromycin, ritonavir, cobicistat, diltiazem; and sensitive substrates of CYP3A4, CYP2C9, CYP2C19, and P-gp. Other CYP3A4, CYP2C9, CYP2C19, and P-gp non-sensitive substrates should be used with caution when concomitantly administered with dovramilast.
13. Known or suspected active substance abuse or a history of substance abuse within 6 months prior to Screening.
14. Prior history of suicide attempt at any time in the subject's lifetime prior to Screening or Randomization, or major psychiatric illness requiring hospitalization within the last 3 years.
15. Current diagnosis of depression, and/or history of suicide ideation
16. History of or presence of cardiac disease, including:
- Clinically significant abnormal electrocardiogram
- QTcF > 450 msec
17. Receipt of a vaccination within 7 days of Baseline.
18. Known or suspected hypersensitivity to: PDE4 inhibitors including dovramilast or apremilast; thalidomide; prednisolone, or; excipients used in the formulation of dovramilast, thalidomide or prednisolone.
19. Body Mass Index < 15 kg/m\^2 or > 35 kg/m\^2.
20. Unable to, or significant difficulty with, swallowing tablets/capsules.
21. Anemia requiring transfusion.
22. History of or current pancreatitis.
23. Known or suspected cirrhosis of the liver.
24. The following laboratory abnormalities:
- White blood cells (WBC) < 2.5 x 10\^9/ L.
- Neutrophils (granulocytes) < 1.0 x 10\^9/L.
- Platelets < 80 x 10\^9/L.
- Aspartate aminotransferase or alanine aminotransferase > 2 times the upper limit of reference range.
- Albumin < 30 mg/dL.
- Bilirubin > 2 mg/dL
- Calculated creatinine clearance (Cockcroft Gault) < 50 milliliter (mL)/minute.
- Lipase ≥ 1.6 times the upper limit
25. Previous participation in this study
26. Unwilling, unlikely or unable to comply with all protocol specified assessments, including photographic assessments
27. Enrolled in another leprosy type 2 reaction treatment study