Some investors might love biotech stocks for their lottery ticket-like returns when a company strikes medical gold. A lottery ticket, however, costs only a buck or two, while getting a biotech company wrong can hurt a lot more than that. Case in point: Dermira Inc (NASDAQ:DERM) shares are falling nearly 60% on Monday, after disclosing disappointing clinical data.
Specifically, the biopharmaceutical company announced that the investigational treatment olumacostat glasaretil (formerly DRM01) did not meet the co-primary endpoints in its two Phase 3 pivotal trials (CLAREOS-1 and CLAREOS-2) in patients ages nine years and older with moderate-to-severe acne vulgaris.
Dermira CEO Tom Wiggans commented, “We are surprised and extremely disappointed by the results of the Phase 3 program […] This is disappointing not only for the company, but also for patients who are living with this condition and dermatologists who have been looking for novel therapies to treat them.”
“We remain dedicated to bringing new treatments to people living with chronic, underserved skin conditions. As we look ahead, we are focused on building a commercial organization to support the anticipated launch of glycopyrronium tosylate for axillary hyperhidrosis later this year, subject to FDA approval, as well as our Phase 2b trial evaluating lebrikizumab as a potential treatment for moderate-to-severe atopic dermatitis, for which we expect to announce topline data in the first half of 2019,” added Wiggans.
Dermira chief development officer Luis Peña added, “We are continuing to analyze the outcome of the olumacostat glasaretil Phase 3 program. However, based on the information we have to date, we expect to discontinue the development program […] We want to thank our employees, investigators and partners for their commitments to the acne development program and, most importantly, the patients who participated in these trials.”
The co-primary endpoints of CLAREOS-1 and CLAREOS-2 were the absolute changes from baseline in inflammatory and non-inflammatory lesion counts and the proportion of patients achieving at least a two-grade improvement from baseline to a final grade of zero or one on the five-point Investigator’s Global Assessment (IGA) scale. Each endpoint was measured on the face at the end of the 12-week treatment period. Safety and tolerability were also evaluated.
Phase 3 Results
- The reductions in the numbers of inflammatory lesions from baseline to week 12 in patients treated with olumacostat glasaretil in CLAREOS-1 and CLAREOS-2 were 14.3 and 16.6, respectively, compared to 13.7 and 15.3, respectively, in patients in the corresponding vehicle groups.
- The reductions in the numbers of non-inflammatory lesions from baseline to week 12 in patients treated with olumacostat glasaretil in CLAREOS-1 and CLAREOS-2 were 14.8 and 17.8, respectively, compared to 11.2 and 17.4, respectively, in patients in the corresponding vehicle groups.
- In CLAREOS-1 and CLAREOS-2, the percentages of patients treated with olumacostat glasaretil who achieved a two-grade improvement from baseline to a final grade of zero or one on the IGA scale at week 12 were 19.1% and 16.3%, respectively, compared to 20.8% and 11.8%, respectively, of patients in the corresponding vehicle groups.
- None of these co-primary endpoint results were statistically significant.
Consistent with the Phase 2a and 2b studies, olumacostat glasaretil was well-tolerated. Adverse events were primarily mild or moderate in severity. No treatment-related serious adverse events were reported, and no new or unexpected events were observed.
Most of the Street was quite confident on Dermira ahead of today’s results, with TipRanks analytics showcasing DERM as a Strong Buy. Based on 7 analysts polled in the last 12 months, 6 rate Dermira stock a Buy, while only one recommends a Sell.