Eli Lilly to Shut Down Dermira Facility and Divest Qbrexza to Journey Medical

Compiled by Fan Dongdong

Eli Lilly Announces Closure of Dermira Facility in Menlo Park, Layoffs of 163 Employees, and Planned Sale of Hyperhidrosis Drug Qbrexza to Journey Medical

In January 2020, Eli Lilly acquired the dermatology company Dermira for a total consideration of approximately $1.1 billion, thereby obtaining U.S. FDA-approved assets for hyperhidrosis treatment, Lebrikizumab, and an emerging drug pipeline. Eli Lilly’s key asset of interest, Lebrikizumab, is under development for the treatment of moderate-to-severe atopic dermatitis in adolescents and adults.

Sixteen months later, Eli Lilly decided to divest most of the portfolio acquired in the transaction, with the exception of lebrikizumab, shut down Dermira’s Menlo Park facility, and sell the hyperhidrosis drug Qbrexza to Journey Medical. Notably, Qbrexza generated $24 million in net sales in 2020 alone, a performance that could represent an attractive revenue growth opportunity for Arizona-based Journey Medical.

Results from two pivotal Phase III trials demonstrated that Qbrexza achieved a clinically significant reduction in sweat production, and other clinical trials have confirmed the safety and efficacy of this medication after 48 weeks of treatment.

Although Eli Lilly may lay off Dermira employees, Journey Medical could potentially absorb some of Dermira’s former employees due to the sale of Qbrexza to Journey Medical. However, no exact figures have been released regarding the number of employees who will be laid off. It has been confirmed that the layoffs at Dermira include CEO Andrew Hotchkiss, five vice president positions, 11 senior manager roles, and 75 sales positions.

Despite Dermira’s announcement of factory closures and layoffs, recent news indicates that the preclinical drugs developed by the company hold significant potential. In January, Luis Peña, former co-founder and Chief Development Officer of Dermira, along with Dr. Eugene Bauer, co-founder and former Chief Medical Officer, and Hans Hofland, former Head of Research, announced three promising R&D collaborations in dermatology with Evommune. In a statement, Evommune CEO Peña said, “These three promising research programs expand Evommune’s product pipeline, enabling the company to grow into a research and development-driven organization over the long term. We are pleased to have the opportunity to continue developing these therapies, thereby improving the quality of life for patients in urgent need of new treatment options.”

In recent times, Eli Lilly has become increasingly active in seeking solutions for dermatological conditions, particularly atopic dermatitis. In late 2017, Dermira acquired Lebrikizumab from Genentech for an upfront payment of $135 million, with a commitment to generate $1.4 billion in development and regulatory milestones. Eli Lilly is actively advancing the research and development of the monoclonal antibody Lebrikizumab to compete with Regeneron and Sanofi’s Dupixent (an FDA-approved treatment for moderate-to-severe atopic dermatitis).

Reference source: Lilly Closes Dermira’s Menlo Park Facility, Cutting 163 Jobs in the Process