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Dermira Tumbles On Phase 3 Data For Acne, But Hope Remains


  • Dermira announces failure of two phase 3 studies treating patients with acne.
  • Opportunity still exists with the PDUFA date for DRM04 treating patients with hyperhidrosis.
  • Dermira still has another product in the pipeline that targets atopic dermatitis, with results expected by the first half of 2019.
  • The financials are set to run operations until the first half of 2019.

On Monday, Dermira (NASDAQ:DERM-OLD) announced that it had failed two phase 3 trials using its topical gel olumacostat glasaretil (DRM01). Both of these trials were treating patients with acne. It is really bad that the company did not succeed in either study, but that doesn't mean that it is the end of the company. It has another clinical candidate heading up for potential FDA approval. Considering these other programs have the potential to turn things around, I think that Dermira still has a shot at success.

Phase 3 Results

The two phase 3 studies that had both failed to achieve the co-primary endpoints are CLAREOS-1 and CLAREOS-2. The first co-primary endpoint dealt with a change from baseline in inflammatory and non-inflammatory lesion counts. The second co-primary endpoint was the amount of patients that achieved at least a two-grade improvement from baseline with a final grade of 0 or 1 on the five-point Investigator's Global Assessment scale. Each endpoint was looked at after the patients were treated with DRM01 over a 12-week period. The topical gel from Dermira was not able to beat a control gel on any of the endpoint measures. With this in mind, Dermira stated that it was likely to halt any further development with this prorgram. In my opinion, this was a necessary move. There is no further reason to keep throwing money at this program. That's because there was no salvageable data. DRM01 was shown to be either equivalent to or slightly better than control, but not statistically significant to it. To spend more money on this program would be a total waste. This was a long-shot type of a trial anyways. That's because last year other biotech companies had failed to garner positive data for their respective acne trials as well. Other biotech companies that failed studies for acne were

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This article was written by

Terry Chrisomalis profile picture

Terry Chrisomalis is a private investor in the Biotech sector with years of experience utilizing his Applied Science background to generate long term value from Healthcare.

He is the author of the investing group Biotech Analysis Central which contains a library of 600+ Biotech investing articles, a model portfolio of 10+ small and mid-cap stocks with deep analysis for each, live chat, and a range of analysis and news reports to help Healthcare investors make informed decisions.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (15)

NDHT profile picture
Author stated this twice: the hyperhidrosis program (DRM04) has already passed a phase 3 trial.

The matter of fact is that the DRM04 program (glycopyrronium tosylate) has successfully completed two Phase 3 studies (ATMOS-1 and ATMOS-2), not one.

The FDA normally requires two Phase 3 studies for consideration of approval.
Tika1 profile picture
I second that, market is right 90% of time.

Do you know what is peak revenue estimate for their Topical anticholinergic ((DRM04)). That is only value left other than cash.
Alex Tong profile picture
So you guys like to buy high on good news and sell low on the bad. Keep it up! My profits come from traders just like you.
thorgood4 profile picture
just stop eating all that junk food kids- your skin will clear up without expensive drugs! I think some guy on FM tonight said this was a buy...I hate buying stocks on bad news or the "market is getting it wrong" yada yada. Experience tells me the market usually gets it right.
If there is opportunity, why not buy a few shares for yourself over the next 72 hours?
Jeremy Blum profile picture
After the Clinical failure yesterday, Cowen established a target of $25 and Needham lowered to $19. The analysts still believe there is a lot of value here.
Of course the Dermira trial results were not surprising given that no sebum reducing drugs have been able to show much success in acne as the KOLs have been saying for many years.

Cassiopea has the answer with Winlevi. Results from their two Phase 3 trials due shortly.
MTSkyInvesting profile picture
Run away.
OK - so that leaves the door wide open for Cassiopea (SWX SKIN) to take over the acne market if their Phase 3 acne trial is successful. The results are due out in Q2 2018.
Terry Chrisomalis profile picture
Yes it's highly possible we will have to see what the data brings for that.
This failure and the subsequent termination of further development of the drug speaks volumes of how expensive for a single successful drug to be put on the market. Those complaining about the high drug price have little understanding how arduous a process and how costly for drug cos to get FDA approval to put a drug on the market. As to Dermira, the drop of share price is overdone and at this level, it will be a reasonable risk/reward proposition in view of its strong finance and the upcoming FDA decision in mid year on its second drug. Any buy below $12 is a good entry point and wait for three month to realize potential gains.
HiloHawaiian profile picture
Amen. It is tremendously expensive. My wife worked at Genentech for 20+ years. I’m so tired of the poorly educated, more like indoctrinated, press — writing stories about the excessively high-cost of medication, with little to no understanding of the process. Most new drugs come from American companies. Not all, but most. Why? There is a better chance to get a return on the huge investment, and make a profit. Profit is not evil, it is essential to innovate. Steve Jobs understood this too...
Terry Chrisomalis profile picture
Agreed, that is why I say it is still a good buy. They are going up for FDA approval still.
Terry Chrisomalis profile picture
Yes what you are saying is correct. That's because to bring a drug to market costs millions of dollars. A lot of companies price high in order to recoup all their costs for all clinical trials and other expenses.
SNOA in the same space looks promising.
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