Privately held Dermira Inc. lifted its veil of silence, at least partially, to disclose $35 million in new funding. The infusion came in a Series B financing that included Japanese dermatology specialist Maruho Co. Ltd., of Osaka, and existing investors Bay City Capital, New Enterprise Associates and Canaan Partners as well as a "related transaction" that CEO Tom Wiggans coyly sidestepped.

"It's a very good deal with a very good company and allows us to really drive our programs forward," Wiggans told BioWorld Today, adding that terms of the transaction were confidential. He declined to delineate the structure of the Series B or differentiate between the amounts included in the round and the transaction but said the combined funding will allow Dermira to generate clinical data on all three of its dermatology programs over the next year.

"These are very innovative, great programs, but they're just entering the clinic so you never know how they're going to turn out," Wiggans said. "The indicators are that they're very exciting molecules, so we want to drive all of them forward."

Redwood City, Calif.-based Dermira burst on the dermatology scene in 2011 with a $42 million Series A and the acquisition of Valocor Therapeutics Inc., a spin-out of QLT Inc., of Vancouver, British Columbia. (See BioWorld Today, Oct. 24, 2011.)

Since then, the company has labored quietly, preferring to work "below the radar," Wiggans said. Dermira's most advanced compound is lemuteporfin, a topical photodynamic therapy for acne originally developed by QLT for benign prostatic hyperplasia. Lemuteporfin didn't destroy tumors, but when applied topically, it collects in the oil-secreting sebaceous glands, where exposure to red light activates the compound to destroy them.

QLT was forced to halt work on lemuteporfin after its Visudyne (verteporfin) photodynamic therapy for wet age-related macular degeneration was overrun by Genentech Inc.'s Lucentis (ranibizumab), prompting a series of restructurings, including the packaging of its dermatology assets in Valocor. A proof-of-concept trial of lemuteporfin is now under way. (See BioWorld Today, Aug. 13, 2010.)

As part of the Valocor acquisition, Dermira also obtained DRM01 , an inhibitor of the enzyme acetyl coenzyme A carboxylase, which is involved in the biosynthesis of sebum, the oily substance secreted by sebaceous glands, and DRM02, which targets integrin-linked kinase and may be applicable for atopic dermatitis and vitiligo. Dermira plans to begin proof-of-concept studies for both compounds within the next year.

'Massive' Consolidation Creates Opportunity

A veteran of the dermatology space, Wiggans previously headed Peplin Inc., which garnered positive data in its first pivotal trial of actinic keratosis drug PEP005 and was promptly acquired by LEO Pharma A/S for $287.5 million. (See BioWorld Today, Sept. 4, 2009.)

Wiggans then teamed up with scientist Eugene Bauer, who'd had similar success as co-founder of Neosil Inc., which was acquired by Peplin, and Connetics Corp., which was sold to Stiefel Laboratories Inc. – itself later acquired by Glaxosmithkline plc for $2.9 billion. (See BioWorld Today, Oct. 24, 2006, and April 22, 2009.)

Dermira was formed in 2010, with Bay City Capital and New Enterprise providing seed funding.

Maruho is the leading Japanese dermatology drug developer, with fiscal year 2011 sales of approximately ¥61 billion (US$607 million). The company has multiple clinical programs under way for atopic dermatitis, psoriasis, acne and other skin disorders. Discussions with Maruho began "some time ago," Wiggans said, and the parties remained in touch as the compounds progressed. "Frankly, we wanted to get the programs up and running and get some data under our belt," he explained.

He declined to confirm whether Maruho's participation in the financing was related to the transaction but suggested no strings were attached. "We see them as a great partner and investor," he said.

In the meantime, Dermira is seeking to expand its pipeline, with its roster of former Peplin, Connetics and Stiefel employees – among others – examining potential assets for in-licensing, which could occur soon, Wiggans hinted. Long term, the company aspires to construct a standalone dermatology drug developer. Wiggans characterized consolidation in the space as "massive," adding that "we view the opportunity to create a new dermatology company as exciting and very timely."

A spate of acquisitions two years ago saw dermatology giant Allergan Inc. purchase Vicept Therapeutics Inc. for $275 million, while Valeant Pharmaceuticals International Inc. made back-to-back buys of Sanofi SA's dermatology unit and Johnson & Johnson's Ortho Dermatologics division before making an even bigger grab of Medicis Pharmaceuticals International Inc. last year. (See BioWorld Today, July 20, 2011, and Sept. 5, 2012.)

Antibiotic developer Paratek Pharmaceuticals Inc., a potential competitor with tetracycline-derived compound PTK-AR01 under investigation in acne and rosacea, also filed and priced but has not yet closed an initial public offering. (See BioWorld Today, Oct. 1, 2012, and March 21, 2013.)

And new entrants pursuing acne continue to come. This year, alone, Brickell Biotech Inc., of Miami, landed a $7 million Series B to advance its candidates in acne, atopic dermatitis and hyperhidrosis; Austin, Texas-based Xbiotech Inc. showed in a Phase II study that lead candidate MABp1 produced improvement in moderate to severe acne vulgaris lesions; and Novan Therapeutics Inc., of Durham, N.C., demonstrated in a Phase I study that its candidate SB204 reduces colonization of skin by Propionibacterium acnes. (See BioWorld Today, Feb. 27, 2013.)

With acne affecting some 50 million in the U.S. and three times that number worldwide, Dermira will seek to conduct clinical studies of its candidates with an eye to global filings.

"The U.S. is still a very attractive market for dermatology," Wiggans said. As its regulatory strategy unfolds, the company will balance its ex-U.S. aspirations "against focused development priorities and spending our money wisely," he acknowledged. "First things first."