Dermata Therapeutics (DRMA 5.48%), a clinical-stage biotech specializing in innovative dermatology therapies, released its earnings on August 13, 2025. The company’s primary news item was a narrower net loss than expected, with a GAAP loss per share of $1.66 compared to analyst estimates of $2.90. This improvement came as Dermata reduced its operating expenses, especially in research and development, after completing its pivotal Phase 3 STAR-1 clinical trial for XYNGARI™, its lead acne treatment candidate. Dermata’s cash position strengthened due to an $8.8 million financing round in the first half of 2025, providing a financial runway into the second quarter of 2026. Overall, the quarter showed significant clinical progress, effective cost containment, and improved cash resources, even as operating expenses shifted with development-stage priorities.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | ($1.66) | ($2.90) | ($41.82) | 96.0 % |
| Cash and Cash Equivalents | $6.48 million | $3.16 million* | 105.1 % | |
| Total Operating Expenses | $1.77 million | $2.88 million | (38.6 %) |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Key Focus Areas
Dermata Therapeutics is focused on developing topical and transdermal treatments for chronic skin conditions using its Spongilla technology platform. The company’s lead product, XYNGARI™, is a once-weekly topical therapy made from the freshwater sponge Spongilla lacustris. The Spongilla platform also supports DMT410, a product targeting hyperhidrosis (excessive sweating) and aesthetic dermatology applications.
Over the past year, Dermata has concentrated its resources on the successful execution of pivotal clinical trials. Strong clinical results, operational efficiency, and prudent capital management are essential for its ability to advance from development stage to regulatory approval. The company also aims to build partnerships, such as its current collaboration with Revance on needle-free botulinum toxin delivery, to reach broader markets and address critical unmet dermatological needs.
Quarterly Developments and Financial Performance
The most significant achievement for the period was positive top-line data from the XYNGARI™ STAR-1 Phase 3 trial in moderate-to-severe acne. Dermata reported that XYNGARI™ met all three co-primary endpoints versus placebo in the STAR-1 Phase 3 clinical trial, as announced in March 2025. These statistically significant results emerged as early as week four of treatment in the STAR-1 Phase 3 clinical trial, emphasizing the treatment's rapid onset. This completed trial marks a crucial step toward regulatory submission, as STAR-1 is the first of two required pivotal studies.
Following the conclusion of the STAR-1 trial, the company’s research and development expenses (GAAP) dropped 70% year-over-year. The decrease aligned with the study’s wind-down and reduced clinical activity, although some increases appeared in manufacturing and personnel costs. General and administrative expenses rose 33.3% year-over-year (GAAP), reflecting Dermata’s increased costs as a public company and expanded administrative functions.
Chemistry, manufacturing, and controls costs, referred to as "CMC," increased by $0.1 million in the quarter ended June 30, 2025. The company stated, “The $1.4 million decrease in research and development expenses was primarily the result of $1.6 million of decreased clinical expenses from the XYNGARI™ STAR-1 acne study, for which topline data results were announced in March 2025, partially offset by $0.1 million of increased chemistry, manufacturing, and controls, or CMC, expenses.” At the same time, a new Clinical Trial Collaboration Agreement with Revance was signed to prepare for a Phase 2a trial evaluating DMT410 with DAXXIFY® for topical treatment of axillary hyperhidrosis.
The company’s cash position more than doubled to $6.48 million as of June 30, 2025, compared to December 31, 2024, supported by gross proceeds of $8.8 million from private placement and warrant inducement financings during the first half of 2025. Leadership stated that “The funds raised during the first half of 2025 are expected to fund its operations into the second quarter of 2026.” The company remains pre-commercial, and ongoing operations will require further clinical progress, regulatory success, and possibly additional financing to maintain its trajectory. During the quarter, no dividends were declared or discussed.
Product pipeline progress also included the initiation of manufacturing for the STAR-2 Phase 3 trial of XYNGARI™. The company is evaluating the timeline for STAR-2, which will be followed by a nine-month extension study. Meanwhile, preparations for the DMT410 Phase 2a study, a botulinum toxin therapy using the Spongilla delivery platform, continue. However, no enrollment dates or data from these new studies were yet available. For both programs, partnerships will be vital as Dermata approaches regulatory milestones and potential commercialization.
Outlook and Key Investor Watchpoints
Dermata’s management expects that its current cash resources will cover operating costs into the second quarter of 2026. No revenue or earnings guidance was offered by the company. The business remains pre-commercial, with no product sales expected until at least late 2026 or beyond, depending on the timeline for regulatory approvals and successful trial completions.
For future quarters, investors should monitor the initiation and progress of the STAR-2 Phase 3 trial of XYNGARI™, further updates from the Revance partnership, and operational cash burn rates. The company continues to seek external partnerships for both clinical advancement and eventual commercial distribution. Dermata Therapeutics does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
