Why Dermira Shares Are Shooting Higher After Last Year's Disappointment

Dermira Inc DERM, which develops new therapies for chronic skin conditions, was spiking higher Monday after an announcement from the company regarding a midstage trial involving its investigational candidate for atopic dermatitis.

What Happened

Dermira reported positive results ahead of the market open Monday from a Phase 2b dose-ranging study of lebrikizumab that is being evaluated for treating adult patients with moderate-to-severe atopic dermatitis.

Lebrikizumab is a humanized antibody that binds interleukin-13, or IL-3, inhibiting downstream signaling. IL-13 is believed to be a pathogenic mediator that causes type 2 inflammation, leading to itching, skin thickening and infection.

Dermira said all three doses evaluated in the dose-ranging study — 125mg every four weeks, 250mg every four weeks and 250mg every two weeks — met the primary endpoint of showing greater improvements in the Eczema Area and Severity, or EASI, index at week 16 compared to placebo.

The safety results were consistent with prior studies, according to Dermira. 

"I have many patients for whom current therapies do not adequately address their needs. These data show that lebrikizumab may offer a targeted, effective and well-tolerated therapeutic approach," Emma Guttman-Yassky, a leading study investigator, said in a statement. 

Why It's Important

The positive trial results should come as a welcome relief for Dermira, the shares of which suffered a backlash a year ago after another investigational candidate, olumacostat glasaretil in moderate-to-severe acne, flunked two late-stage trials. Subsequently, the company opted to discontinue the development of the asset.

The stock slumped 66 percent March 5, 2018 in reaction to this adverse development.

What's Next

Following the positive results, Dermira said it intends to move the candidate into a Phase 3 program following an end-of-Phase 2 meeting with the FDA and is aiming for an end-of-2019 timeframe for the initiation of the late-stage trial.

Dermira shares were ripping higher by 99.4 percent at $13.64 at the time of publication Monday.

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