Derma Sciences Exploring Sale After Stopping Development of Its Only Drug
November 13, 2015
By Alex Keown, BioSpace.com Breaking News Staff
PRNCETON, N.J. – The failure of Derma Sciences Phase III aclerastide, which was being studied for the treatment of diabetic foot ulcers, has the company mulling several options forward, including a possible sale Reuters reported this morning.
Derma Sciences plunged nearly 30 percent after the company announced Thursday it was ceasing its Phase III clinical trials for aclerastide, which was being studied for the treatment of diabetic foot ulcers. A third-party assessment by Data Monitoring Committee of aclerastide found the drug did not meet its end goals of healing diabetic foot ulcers, the company said in a statement. Derma Sciences said it was halting the clinical trial and is terminating the aclerastide program. There were no safety concerns related to the treatment, the company said. In addition to halting the trial of aclerastide for foot ulcer treatment, Derma Science said it would also stop developing aclerastide as a treatment to reduce scars and treat radiation dermatitis.
If untreated diabetic foot ulcers can be a factor in amputations in diabetic patients. Some patients who experience foot ulcers may not know they are there because of nerve or blood vessel damage. Treatments for diabetic foot ulcers can include hemorheologic agents and antiplatelet agents. Smith & Nephew Inc. ’s Regranex, a topical gel, for the treatment of diabetic foot ulcers, has been on the market since 1997.
Aclerastide was the company’s only clinical program, although it does have some wound-care products on the market, including Medihoney, Xtrasorb and Bioguard.
Derma Sciences' three divisions, advanced wound care, pharmaceutical wound care and traditional wound care, generated a combined $22 million in revenue for the third quarter of 2015.
Company stock dropped from $5.60 per share to $4.04 per share after the company announced its decision. Thursday’s sell off of the stock saw 1.4 million shares sold. On average, 140,000 shares of the stock move monthly, The Street reported. The Street rated the stock a “sell,” saying the “company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, disappointing return on equity, weak operating cash flow, deteriorating net income and generally disappointing historical performance in the stock itself.” The day before the stock plummeted, Zacks rated the stock a “buy.”
“We are very disappointed with the findings of the analyses of the DMC, but are grateful for the support and commitment from the participating patients and the study investigators,” Edward J. Quilty, chairman and chief executive officer of Derma Sciences, said in a statement. “We have stopped further enrollment and initiated an orderly termination of the aclerastide trials and program, which we believe will be substantially complete by year end. We are also halting all development work with DSC127 in scar reduction and radiation dermatitis.”
The termination of the drug trial will cost the company approximately $2 million and overall save about $5 million per quarter, the company said. As of Sept. 30, Derma Sciences had $49.4 million of cash and cash equivalents and $12 million of long-term investments, the company said. Before the stock drop, Derma Sciences had a market value of $145 million, Reuters said.