Mizuho believes shares of Dermira may approach or even top $15 following lebrikizumab data in atopic dermatitis
Shares of Dermira (DERM) jumped after the company announced results from a Phase 2b dose-ranging study of lebrikizumab in adult patients with moderate-to-severe atopic dermatitis, with all three does meeting the primary endpoint. The news sent the shares of competitor Regeneron Pharmaceuticals (REGN) into negative territory on Monday. However, Piper Jaffray analyst Christopher Raymond argued that while lebrikizumab appears competitive with Regeneron’s Dupixent in atopic dermatitis at first glance, a “number of caveats” translate into a strong potential that the latter’s Phase 3 experience “will hold up.”
PHASE 2B RESULTS: Dermira has announced results from a Phase 2b dose-ranging study of lebrikizumab, an investigational therapy, in adult patients with moderate-to-severe atopic dermatitis. All three doses of lebrikizumab met the primary endpoint, demonstrating greater improvements in the Eczema Area and Severity Index score compared to placebo. The safety profile for lebrikizumab observed in the study was consistent with prior studies evaluating this investigational therapy. Across all of the doses evaluated, lebrikizumab showed a dose-dependent and statistically significant improvement in the primary endpoint. The improvement in EASI score was 62.3% for patients receiving lebrikizumab, 125 milligrams, every four weeks, 69.2% for patients receiving lebrikizumab, 250 mg, every four weeks and 72.1% for patients receiving lebrikizumab, 250 mg, every two weeks compared to 41.1% for patients receiving placebo. Patients treated with lebrikizumab at the 250 mg dose every two or four weeks achieved statistically significant improvements in other key efficacy measures compared to placebo after 16 weeks of treatment. The secondary endpoints for the 125 mg lebrikizumab dosing arm did not meet statistical significance. Following an end-of-Phase 2 meeting with the U.S. Food and Drug Administration, Dermira plans to initiate a Phase 3 clinical development program for lebrikizumab by the end of 2019.
DERMIRA MAY RALLY TO $15: Commenting on Dermira’s data, Mizuho analyst Irina Koffler noted that the trial was able to identify a dose with a more favorable one-month dosing regimen compared to Dupixent, and “unexpectedly,” a slightly stronger efficacy signal compared to Regeneron’s Dupixent in the 250 mg once-monthly dose as well. The EASI endpoint was the primary endpoint in the trial, rather than the Investigator’s Global Assessment, but the IGA scores were statistically significant in the 250 mg once-monthly arm as well, which was reassuring, she pointed out, adding that the data exceeded the company’s expectations and management is calling the drug “best in class.” Koffler believes Dermira’s stock may now approach or even surpass $15 and become “strategically attractive” to partners like Almirall. The analyst sees Dermira likely pursuing additional financing to support a Phase 3 program, which it plans to initiate by the end of 2019.
REGENERON SELLOFF ‘MISPLACED’: Meanwhile, Piper Jaffray analyst Christopher Raymond told investors in a research note of his own that he would be a buyer on weakness in Regeneron shares after what he sees as a “misplaced” reaction following Phase 2 data from Dermira’s Dupixent competitor. While at first glance, lebrikizumab appears competitive with Dupixent in atopic dermatitis, the analyst pointed out a “number of caveats” that he thinks translate into a strong potential that Dupixent’s Phase 3 experience “will hold up.” First, he noted, Dupixent appears to have been consistently studied in patients with more severe atopic dermatitis, making cross-trial comparisons “particularly suspect here.” Second, lebrikizumab’s safety data, which is pooled across doses, may not tell the full safety picture of the drug’s most active dose, Raymond contended. Lastly, the analyst reminded investors that lebrikizumab showed similarly positive Phase 2 data in asthma before failing in Phase 3. Given all of this, he thinks “it’s far too early to be writing” Dupixent’s obituary in atopic dermatitis. The analyst reiterated an Overweight rating and $487 price target on Regeneron’s shares.
