Dermira, Inc. (NASDAQ:DERM) Tumbled In Response to Licensing Agreement NEWS
Shares of Dermira, Inc. (NASDAQ:DERM) tumbled -13.35% in morning trade Tuesday, soon after a biopharmaceutical company dedicated to bringing biotech ingenuity to medical dermatology by delivering differentiated, new therapies to the millions of patients living with chronic skin conditions, recently declared that it has reached a licensing agreement with F. Hoffmann-La Roche Ltd and Genentech, Inc., a member of the Roche Group (together Roche). Following the agreement, Dermira will obtain exclusive, worldwide rights to develop and commercialize lebrikizumab, a monoclonal antibody targeting interleukin 13 (IL-13), for atopic dermatitis and all other indications, except Roche will retain certain rights, counting exclusive rights to develop and promote lebrikizumab for interstitial lung diseases, such as idiopathic pulmonary fibrosis.
Under the terms of the agreement, Dermira will make an initial payment of $80 million to Roche and payments totaling $55 million in 2018. Dermira will also be obligated to make additional payments upon the achievement of certain milestones, comprising $40 million upon the initiation of Dermira’s first Phase 3 clinical study, up to $210 million upon the achievement of regulatory and first commercial sale milestones in certain territories and up to $1.025 billion based on the achievement of certain thresholds for net sales of lebrikizumab for indications other than interstitial lung disease. Upon potential regulatory approval, Dermira will make royalty payments representing percentages of net sales that range from the high single-digits to the high teens. The effectiveness of the agreement is subject to expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, as amended (HSR).
“Atopic dermatitis is one of the most common skin diseases in the world, affecting millions of adults and children, and moderate to severe forms of this condition present a tremendous burden for patients,” said Tom Wiggans, chairman and chief executive officer of Dermira. “We believe atopic dermatitis is one of the greatest unmet needs in dermatology, and lebrikizumab, if successfully developed and approved, could represent a meaningful advancement in the treatment of this disease. The addition of this program to our development portfolio represents an important step toward our aim of building a leading medical dermatology company dedicated to delivering differentiated, new therapies to the millions of patients living with chronic skin conditions.”
Dermira plans to initiate a Phase 2b dose-ranging study assessing lebrikizumab in adult patients with moderate-to-severe atopic dermatitis in the first quarter of 2018. The objective of the Phase 2b dose-ranging study will be to optimize the dose of lebrikizumab for the design of a Phase 3 program. Preliminary design elements of the Phase 2b dose-ranging study include evaluating a loading dose and higher dose regimens of lebrikizumab than were explored in previous atopic dermatitis studies.
The stock closed its last trade at the price of $22.43, while exchanging hands with the volume of 1915447 shares contrast to its average daily volume of 546.35K shares. Trading volume is an important technical indicator a shareholder uses to confirm a trend or trend reversal. It is generally higher when the price of a security is changing, as the strength of any given price movement is measured mainly by the volume and shifts in trade volume can make observed price movements more significant. News about a company’s financial status, products, or plans, whether positive or negative, will typically result in a temporary increase in the trade volume of its stock. Higher volume for a stock is also an indicator of higher liquidity in the market. For institutional shareholders who wish to sell a large number of shares of a certain stock, lower liquidity will force them to sell the stock slowly over a longer period of time, to avoid losses because of slippage. The stock, as of recent close, has shown weekly downbeat performance of -16.59% which was maintained at -21.52% in 1-month period, and is down -26.05% in this year. The company now has a market value of $941.16M.
The stock, after recent close, is -21.53% below their SMA 50 and -20.59% from SMA20 and is -27.82% above than SMA200. 96.20% shares of the company were owned by institutional investors. The company has 39.71 values in price to sale ratio while price to book ratio was recorded as 2.07. It beta stands at -.
The average 12 month target price among brokers that have covered the stock in the last year is $46. Analyst mean recommendation for this stock stands at 2. Analyst recommendations as stated on FINVIZ are rated on a 1 to 5 scale. 1 is equivalent to a buy rating, 3 a hold rating, and 5 a sell rating. The consensus recommendation is the average rating on a stock by the analyst community.
