Dermira (DERM) Stock Will Not Climb Much From Here, Says Analyst


So what to make of Dermira’s (NASDAQ:DERM) latest success? On Friday, the dermatology drug maker announced that the FDA has approved the company’s hyperhidrosis treatment Qbrexza. In reaction, Dermira’s shares surged nearly 25% at one point today before losing steam, as investors attempt to sell the stock on the news

So, should you buy or sell the stock? Mizuho analyst Irina Rivkind Koffler remains sidelined on DERM as she doesn’t think the stock will do much from here as the company awaits lebrikizumab data in the first half of 2019.

As such, Koffler reiterates a Neutral rating on Dermira shares, while slightly raising her price target from $9.00 to $10.00. (To watch Koffler’s track record. click here)

The analyst commented, “This event was highly expected, in our view, given how much time was devoted to its discussion at the recent investor event, and the fact that Dermira hired its sales managers ahead of approval […] The label looks encouraging in that patients as young as 9 years can be treated (presenting the first true pediatric option for this condition), but there is some itching (8.1%) and burning/stinging (14.1%) in the label, which may deter some patients, in our view. We think shares could trade modestly higher on the news.”

“Dermira will also likely hold a call ahead of Qbrexza launch to announce pricing and discuss its commercial plan. Mgmt. previously guided to $300- $700/month pricing and we model to the higher end of this range at $650/ TRx. FactSet consensus estimates for 2018-2019 Qbrexza sales are $2.4M and $26.6M and mgmt. reminded us that it will only have ~30% commercial lives covered in 2018, and 50% of lives covered by Jan 2019, with a more stable steady-state of coverage only achieved in 2020. We therefore slowed our product ramp and lowered our 2018 estimate for Qbrexza (also because launch is during a colder season),” the analyst continued.

Out of the 7 analysts polled in the past 12 months, 4 rate Dermira stock a Buy, 2 rate the stock a Hold and 1 recommends Sell. With a return potential of 147%, the stock’s consensus target price stands at $23.60.

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