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Dermata Therapeutics, Inc. (DRMA)·Q3 2025 Earnings Summary

Executive Summary

  • Dermata reported Q3 2025 net loss of $1.69M and EPS of $(1.65), reflecting continued operating discipline amid a strategic pivot to OTC dermatology; cash was $4.66M, with runway guided “into Q2 2026.”
  • Management announced a decisive shift from prescription dermatology to OTC products, targeting a mid-2026 launch of a once-weekly acne kit leveraging Spongilla technology—positioned as the new growth chapter.
  • Operating expenses fell sharply YoY as clinical spend wound down after completion of the STAR-1 Phase 3 acne study (R&D $0.5M vs $2.4M YoY), while SG&A rose on marketing ahead of the OTC transition.
  • Versus S&P Global consensus, Q3 EPS modestly missed by ~$0.06 per share; earlier quarters were significant beats amid one-analyst coverage and zero revenue expectations. Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • Strategic pivot clarifies commercialization path: “This is the beginning of a new growth chapter…leverag[ing] our Spongilla technology to reach consumers directly.”
  • Clinical de-risking: STAR-1 Phase 3 achieved statistically significant results for all three co-primary endpoints, with efficacy evident as early as week 4—supporting the product’s value proposition.
  • Cash runway extended: Management guides funding “into the second quarter of 2026,” enabling brand-building, manufacturing, and launch readiness for the mid-2026 acne kit.

What Went Wrong

  • No revenue and ongoing losses: Q3 net loss $(1.69)M and EPS $(1.65), driven by development-stage status and pre-commercial investments; SG&A up on marketing ahead of OTC pivot.
  • Reduced R&D reflects pause post-STAR-1 and shifting priorities; near-term clinical momentum (e.g., STAR-2) is de-emphasized in favor of OTC, increasing execution risk in consumer channel buildout.
  • Limited external visibility: No earnings call transcript available, constraining insight into channel strategy, pricing, and detailed launch readiness beyond press commentary.

Financial Results

MetricQ1 2025Q2 2025Q3 2025
EPS ($USD)$(0.45) $(1.66) $(1.65)
Net Loss ($USD Millions)$(2.303) $(1.701) $(1.692)
Total Operating Expenses ($USD Millions)$2.339 $1.773 $1.761
R&D Expense ($USD Millions)$1.281 $0.618 $0.505
SG&A/G&A Expense ($USD Millions)$1.058 (G&A) $1.155 (G&A) $1.256 (SG&A)
Cash and Equivalents ($USD Millions)$9.719 $6.481 $4.664
Weighted Avg Shares (thousands)5,155 1,027 1,026
MetricQ1 2025Q2 2025Q3 2025
EPS Actual ($)$(0.45) $(1.66) $(1.65)
EPS Consensus Mean ($)$(4.50)*$(2.90)*$(1.59)*
Surprise ($)+$4.05+$1.24-$0.06
Revenue Consensus Mean ($USD Millions)$0.00*$0.00*$0.00*

Values retrieved from S&P Global.*

Notes:

  • Company presents operating expenses and net loss; no revenue line is presented in the statements of operations.
  • SG&A/G&A labeling varies by quarter (G&A in Q1/Q2 vs SG&A in Q3).

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayQ1 2025Fund operations into Q1 2026 ——
Cash RunwayQ2 2025Fund operations into Q2 2026 —Raised vs Q1
Cash RunwayQ3 2025—Fund operations into Q2 2026 Maintained vs Q2
Product Launch Timeline (OTC Acne Kit)Q2 2025Not specifiedMid-2026 launch targeted New guidance with OTC pivot
XYNGARI™ STAR-2 (Rx path)Q1 2025Initiate by end of 2025; 9-month extension to follow Evaluating next steps; additional manufacturing initiated Deferred; reassessing
XYNGARI™ STAR-2 (Q3 status)Q3 2025—Not referenced; focus on OTC portfolio Strategic pivot away from Rx emphasis
DMT410 Phase 2a with RevanceQ1–Q2 2025Prepare Phase 2a; finalize design/start-up Not referenced in Q3 pressImplied ongoing; Q3 de-emphasized

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Strategic DirectionLate-stage biotech; Rx path; STAR-2 planned Continuing clinical planning; financing to support ops Pivot to OTC; consumer-focused brand build Shift from Rx clinical to OTC commercialization
Clinical Efficacy (XYNGARI™)STAR-1 met all co-primary endpoints; week-4 separation Full dataset confirms significance at weeks 4 and 12 Clinical success cited to support OTC strategy Efficacy reiterated; used to underpin pivot
Financing/LiquidityRaised $8.8M; cash $9.7M; runway to Q1’26 Cash $6.5M; runway to Q2’26 Cash $4.7M; runway to Q2’26 Runway stable at Q2’26 despite spend
Commercialization PrepManufacturing for STAR-2 Evaluating STAR-2; CMC investments Branding, packaging, manufacturing for OTC launch Refocus on OTC GTM
PartnershipsRevance collaboration for DMT410 (hyperhidrosis) Continued collaboration; design/start-up Not referenced in Q3 pressDeprioritized in messaging
Operating DisciplineLower R&D YoY; audit fee reductions R&D down; G&A up modestly R&D down sharply; SG&A up for marketing Spend mix shifts to marketing

Management Commentary

  • “The planned launch of our once-weekly acne kit in mid-2026 marks the initial step toward building a scalable portfolio of products that merge medical-grade science with everyday convenience.” — Gerry Proehl, Chairman, President & CEO
  • “We see this as more than a product launch…it is the beginning of a new growth chapter…to reach consumers directly.” — Gerry Proehl
  • “We plan to leverage our deep dermatological know-how, scientific credibility, and innovative Spongilla technology to reach consumers directly.” — Gerry Proehl

Q&A Highlights

  • No earnings call transcript was available for Q3 2025 on the company’s investor relations site or within our document catalog; as a result, no Q&A themes or clarifications could be assessed.

Estimates Context

  • Coverage remains minimal (one analyst), limiting robustness of consensus; revenue consensus was $0, consistent with development-stage status. Values retrieved from S&P Global.*
  • EPS comparison:
    • Q1 2025: Actual $(0.45) vs $(4.50)* — bold beat driven by lower operating expenses and one-time cost reductions.
    • Q2 2025: Actual $(1.66) vs $(2.90)* — bold beat largely from reduced clinical spend post-STAR-1.
    • Q3 2025: Actual $(1.65) vs $(1.59)* — slight miss amid higher marketing spend in SG&A tied to OTC pivot.

Key Takeaways for Investors

  • Execution risk shifts from regulatory/clinical to consumer commercialization: brand development, pricing, channel strategy, and manufacturing timelines are now critical pre-launch milestones.
  • Operating leverage likely hinges on disciplined SG&A as marketing ramps; R&D tailwinds from winding down STAR-1 are largely realized.
  • Cash runway guidance into Q2 2026 supports the mid-2026 launch window; monitoring financing flexibility remains prudent given pre-revenue status.
  • Clinical validation (STAR-1) strengthens product credibility for OTC positioning; early onset (week 4) is a differentiator for acne category marketing.
  • Near-term catalysts: brand name/identity announcement, packaging/manufacturing updates, and launch readiness checkpoints; absence of a Q3 call reduces visibility—watch for incremental 8-Ks and IR posts.
  • Strategy transition may reduce regulatory burden and time-to-market but increases commercial execution demands; assess management’s consumer distribution partnerships and promotional ROI as they emerge.
  • Trading lens: headlines on brand launch timing, manufacturing readiness, and any pre-orders/affiliate partnerships could drive sentiment in a thinly covered microcap; EPS prints will be driven by spend mix more than revenues until launch.