Dermata Therapeutics Inc. (NASDAQ: DRMA) is a biotechnology company, which, as its name suggests, operates in the realm of dermatology. It aims to make a breakthrough in acne treatment, with its DMT310 candidate, yet recent updates demonstrate that severe challenges still lie ahead for DRMA stock.
Dermata Shares Underwhelming Updates
Earlier this month, Dermata Therapeutics Inc. (DRMA) reported on progress relating to its inflammatory skin disease candidate, DMT310. The management revealed that none of the primary endpoints could be attained within the study, despite no sign of any serious adverse conditions arising. The company has stated that despite the setback, it remains fully committed to proceeding with DMT310, and has even requested the FDA for a phase-2 end meeting. Management remains confident that the drug would establish itself as a viable acne treatment before March 2023.
Financial Pressure Pushes on for DRMA
In addition to facing disappointing trial update results for DMT310, Dermata is also faced with gradually mounting financial pressure, which cannot subside in the wake of poor results. The company’s cash holdings are down from $10.8 million to $8.1 million in less than a year. Although Dermata management states it has sufficient runway to fund operations until FY23Q3, the time is ticking for shareholders. Similarly, its R&D costs have doubled year-over-year from $800,000 to over $1.6 million. General and administrative expenses however remained constant over the year at $900,000. Additional funding could face challenges as a result of tight capital markets, and uncertainty regarding the prospects and viability of DMT310.
DRMA, like any biotech company, is one that is wrought with significant uncertainty. However, its immediate prospects appear challenging, given its failure to deliver, in terms of its DMT310 candidate. If the company successfully turns this around, it can tap into a multi-billion dollar global market, with relative ease.