Please ensure Javascript is enabled for purposes of website accessibility

Why Dermira Stock Jumped Again Today

By Keith Speights - Updated Apr 14, 2019 at 10:52AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

An analyst's upgrade provides another boost to the high-flying biotech stock.

What happened

Shares of Dermira (DERM) jumped 10.5% higher as of 2:35 p.m. EDT on Tuesday. The nice gain came after Citi analyst Liav Abraham bumped the one-year price target for Dermira to $20 from $15. Abraham's increased optimism stemmed from Dermira's announcement on Monday of positive phase 2b results for lead candidate lebrikizumab in treating atopic dermatitis.

So what

While investors shouldn't put too much faith in analysts' price targets, the bullishness for Dermira could be warranted. The phase 2b results for lebrikizumab were impressive, especially the 250 mg dose of the drug.

Hand drawing line chart trending upward.

Image source: Getty Images.

Lebrikizumab blocks interleukin-13 (IL-13), which is secreted by immune cells and plays an important role in causing atopic dermatitis. Another IL-13 inhibitor, Dupixent, is already on the market. Sanofi and Regeneron launched Dupixent in 2017. The drug generated sales totaling $922 million last year and could achieve peak annual sales approaching $5 billion, although roughly half of those projected sales are expected to come from the use of the drug in treating asthma.

Dermira thinks that lebrikizumab could be even more effective than Dupixent in the atopic dermatitis indication. If the company's optimism proves to be warranted, Dermira could have a major blockbuster drug in its lineup within the next few years.

Check out the latest earnings call transcripts for the companies we cover.

Now what

There are still several hurdles for Dermira to jump. The company has to meet with the FDA to discuss the phase 2b results and obtain the go-ahead for a pivotal study. Dermira expects to receive a green light and begin the phase 3 study for lebrikizumab by late 2019.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dermira, Inc. Stock Quote
Dermira, Inc.
DERM

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.