Categories LATEST, Other Industries

Dermira suffers a fatal fall after catastrophic trial fail

Investors are ruthless if companies fail to fulfill their promises – a fact that especially applies to pharma companies. And Dermira learned it the hard way. Shares of the skin specialist tanked almost 60% on Monday after the company announced that its closely-watched experimental acne drug failed to meet the objectives of two phase 3 clinical trials, eliminating hopes raised by the positive results in the previous trial.

Initial success for the new acne drug olumacostat glasaretil, previously termed DRM01, sparked a lot of hype, lifting Dermira’s status higher. But on Monday, the company stunned Wall Street after it reported that its lead drug candidate has been a catastrophic failure.

Dermira stated that its new drug candidate failed to meet the objectives when compared to an inactive topical gel. Though the company is still reviewing the data, it has slashed its plan to continue with DRM01.

This sort of an overreaction from the stock market is expected as a similar trend was noticed when companies like Novan and Foamix Pharmaceuticals witnessed the same fate as that of Dermira. Both the companies had failed during the Phase 3 trials last year, sending the company’s stock spiraling.

This loss proves to be too costly for CEO Tom Wiggans and his team as the company had taken on debt for the first time last year when the acne trial showed some promising results during the mid-stage.

Dermira is now left with two drug candidates to focus on, one of them being DRM04, which is intended to reduce sweating in kids. The company has completed the clinical testing of this treatment and is awaiting an approval from the FDA for marketing. If the company gets an okay from the FDA, the drug will be launched during the second quarter of this year.

Another drug in the pipeline is for skin inflammation, called ‘lebrikizumab’. But before investors pass their judgment on these two projects, it is important to see how the company progresses after the big loss of its acne experiment.

Most Popular

Earnings Preview: Fastenal Company likely to report higher Q2 sales and profit

Fastenal Company (NASDAQ: FAST), a leading provider of industrial and construction supplies, is set to publish its second-quarter results next week. The company is among the hardest hit by the

What to look for when Netflix (NFLX) reports its Q2 2025 earnings results

Shares of Netflix, Inc. (NASDAQ: NFLX) stayed red on Monday. The stock has gained 50% over the past three months. The streaming giant is scheduled to report its earnings results

Coinbase shines on stablecoin boom, S&P 500 debut. Will the rally continue?

Coinbase Global, Inc. (NASDAQ: COIN) has emerged as the largest and most user-friendly cryptocurrency exchange in the US, since going public a few years ago. It has played a pivotal

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top