Dermira stock (DERM) is tanking today. Prior to today, Dermira stock had been performing rather well as it awaited data releases. Like many biotech stocks a binary endpoint was coming for Dermira stock. Today, Dermira stock is cratering because it just reported Phase 3 trial data that was statistically insignificant for one of its leading drug candidates. Let us discuss.

Two phase 3 trials were ongoing, it's two Phase 3 pivotal trials (CLAREOS-1 and CLAREOS-2) were in patients ages nine years and older with moderate-to-severe acne vulgaris. The results were less than encouraging and Dermira stock is getting nailed for it. So what were they measuring?

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.

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.

So where does Dermira stock go from here? We while the company is continuing to analyze the outcome of the olumacostat glasaretil Phase 3 program, we expect that Dermira will fully discontinue the development program, and move on to other ventures.