- A closely watched drug candidate from Dermira Inc. failed to meet any of its objectives in two Phase 3 studies testing the topical therapy as a treatment for acne, dashing hopes raised by an earlier trial success.
- "We are surprised and extremely disappointed by the results of the Phase 3 program," said Dermira CEO Tom Wiggans in a March 5 statement. Shares in the California-based biotech dropped by more than 60% Monday morning, erasing over $500 million from the company's market capitalization.
- Dermira expects it will discontinue development of the drug, known as DRM01 or olumacostat glasaretil.
DRM01 didn't just come up short. The drug failed to meet any of its co-primary endpoints in either of the Phase 3 studies, which collectively enrolled 1,500 patients.
Results showed treatment with DRM1 failed to significantly outperform placebo vehicle in reducing the number of inflammatory or non-inflammatoy lesions from baseline through week 12. No statistical difference between treatment and control was observed in the share of patients who experienced a two-grade improvement from baseline to a final grade of zero or one on a five-point scale — the studies' other primary endpoint.
Dermira said it would continue to examine results from the study, but did not signal any expectation further analysis would turn up a silver lining.
Analysts expressed surprise at the degree to which DRM01 failed in the two studies testing the drug.
"This news comes as a major disappointment to us given the very positive Phase 2b results that raised our level of conviction around the likelihood of success in the Phase 3 study," wrote Leerink analyst Seamus Fernandez in a March 5 note to investors.
With DRM01 in the dustbin, investors will now turn to the company's drug candidate for hyperhidrosis, or excessive sweating. A decision on approval from the Food and Drug Administration is expected by June 30, with a market launch planned for the second half of the year if all goes according to plan.
In the ever forward-looking world of sell-side analysts, that near-term catalyst tempers some of the disappointment around DRM01's failure. "This pivots attention squarely on DRM04, which we do believe holds meaningful value and could be a $500 [million] + product," wrote Cowen analyst Ken Cacciatore.
Even so, DRM01's miss is costly, lowering Dermira's upside and raising the stakes for DRM04 and the company's substantially thinned pipeline.
Dermira reported $551 million in cash and equivalents as of December 31, giving the company the financial firepower to support the potential launch of DRM04 as well as develop earlier-stage programs such as lebrikizumab in atopic dermatitis.