Dermata Therapeutics, Inc.

Previous wording

Our lead product candidate, XYNGARI™, is intended to utilize ourSpongilla technology for the once weekly treatment of a variety of skin diseases, with our initial focus being the treatment of acne, which has a U.S. market size of approximately 30 million patients seeking treatment. In March 2025, we announced that our XYNGARI™ Phase 3SpongillaTreatment ofAcneResearch (STAR-1) trial topline data met all co-primary endpoints at week 12. XYNGARI™ demonstrated highly statistically significant difference compared with placebo for all primary endpoints after 12 weeks of once weekly treatments. XYNGARI™ patients saw a rapid and sustained therapeutics treatment effect in absolute reduction in inflammatory lesion counts with a -11.4 lesion reduction at week four, -14.7 lesions reduction at week 8, and -16.8 lesion reduction at week 12 compared to -8.6, -10.9, and -13.1 lesion reduction for placebo at weeks 4, 8, and 12, respectively. XYNGARI™ patients also saw a rapid and sustained therapeutics treatment effect in absolute reduction in noninflammatory lesion counts with a -12.4 lesion reduction at week four, -15 lesions reduction at week 8, and -17.3 lesion reduction at week 12 compared to -8.8, -10.4, and -12.4 lesion reduction for placebo at weeks 4, 8, and 12, respectively. Lastly, we observed a sustained therapeutics treatment effect in the investigator’s global assessment of acne with a 11.9% of XYNGARI™ patients being considered a responder at week four, 21.6% of XYNGARI™ patients being considered a responder at week 8, and 29.4% of XYNGARI™ patients being considered a responder at week 12 compared to 6.2%, 8.0%, and 15.2% of placebo patients being considered a responder at weeks 4, 8, and 12, respectively. The Phase 3 STAR-1 trial was double-blind, randomized, placebo controlled, and enrolled 520 patients with moderate-to-severe acne, age 9 years or older across sites in the United States and Latin America. The co-primary endpoints included absolute reduction in inflammatory and noninflammatory lesion counts and the improvement in investigators global assessment (IGA) of acne. Patients were treated once a week for 12 weeks with either XYNGARI™ or placebo and were evaluated monthly. We are currently evaluating the full data set from the STAR-1 trial. As requested by the FDA, we will have to complete a second Phase 3 trial, STAR-2, which will be followed by an extension study to follow patients for a 12-month total treatment period. The STAR-2 trial will include a near identical trial design to the STAR-1 trial and is planned to begin by the end of 2025. Previously XYNGARI™ has shown its ability to treat the multiple causes of acne in a Phase 2b study where we initially saw a 45% reduction in inflammatory lesions after four treatments, with XYNGARI™ achieving statistically significant improvements at all time points for all three primary endpoints throughout the study (reduction in inflammatory lesions, reduction in non-inflammatory lesions, and impr…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Our lead product candidate, XYNGARI™, is intended to utilize ourSpongilla technology for the once weekly treatment of a variety of skin diseases, with our initial focus being the treatment of acne, which has a U.S. market size of approximately 30 million patients seeking treatment. In March 2025, we announced that our XYNGARI™ Phase 3SpongillaTreatment ofAcneResearch (STAR-1) trial topline data met all co-primary endpoints at week 12. XYNGARI™ demonstrated highly statistically significant difference compared with placebo for all primary endpoints after 12 weeks of once weekly treatments. XYNGARI™ patients saw a rapid and sustained therapeutics treatment effect in absolute reduction in inflammatory lesion counts with a -11.4 lesion reduction at week four, -14.7 lesions reduction at week 8, and -16.8 lesion reduction at week 12 compared to -8.6, -10.9, and -13.1 lesion reduction for placebo at weeks 4, 8, and 12, respectively. XYNGARI™ patients also saw a rapid and sustained therapeutics treatment effect in absolute reduction in noninflammatory lesion counts with a -12.4 lesion reduction at week four, -15 lesions reduction at week 8, and -17.3 lesion reduction at week 12 compared to -8.8, -10.4, and -12.4 lesion reduction for placebo at weeks 4, 8, and 12, respectively. Lastly, we observed a sustained therapeutics treatment effect in the investigator’s global assessment of acne with a 11.9% of XYNGARI™ patients being considered a responder at week four, 21.6% of XYNGARI™ patients being considered a responder at week 8, and 29.4% of XYNGARI™ patients being considered a responder at week 12 compared to 6.2%, 8.0%, and 15.2% of placebo patients being considered a responder at weeks 4, 8, and 12, respectively. The Phase 3 STAR-1 trial was double-blind, randomized, placebo controlled, and enrolled 520 patients with moderate-to-severe acne, age 9 years or older across sites in the United States and Latin America. The co-primary endpoints included absolute reduction in inflammatory and noninflammatory lesion counts and the improvement in investigators global assessment (IGA) of acne. Patients were treated once a week for 12 weeks with either XYNGARI™ or placebo and were evaluated monthly. We are currently evaluating the full data set from the STAR-1 trial. As requested by the FDA, we would have to complete a second Phase 3 trial, STAR-2, which would be followed by an extension study to follow patients for a 12-month total treatment period. The STAR-2 trial would include a near identical trial design to the STAR-1 trial and we are currently evaluating next steps as it relates to the XYNGARI™ Phase 3 STAR-2 clinical trial. Previously XYNGARI™ has shown its ability to treat the multiple causes of acne in a Phase 2b study where we initially saw a 45% reduction in inflammatory lesions after four treatments, with XYNGARI™ achieving statistically significant improvements at all time points for all three primary endpoints throughout the study (reduction in inflam…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We have not generated any revenue to date and have incurred significant operating losses. Our net losses were $2.3 million and $3.1 million for the three months ended March 31, 2025, and 2024, respectively. As of March 31, 2025, we had an accumulated deficit of $68.0 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We anticipate that our expenses will increase significantly in connection with our ongoing activities, as we:

Current wording

We have not generated any revenue to date and have incurred significant operating losses. Our net losses were $4.0 million and $6.0 million for the six months ended June 30, 2025, and 2024, respectively. As of June 30, 2025, we had an accumulated deficit of $69.7 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future. We anticipate that our expenses will increase significantly in connection with our future activities, as we:

Previous wording

On January 21, 2025, we closed a private placement (the “January 2025 PIPE”) priced at the market under Nasdaq rules, in which we sold 1,935,412 shares of Common Stock, pre-funded warrants to purchase an aggregate of 72,468 shares of Common Stock with an exercise price of $0.001 per share (“January 2025 Pre-Funded Warrants”), and 2,007,880 warrants (the “January 2025 PIPE Warrants”) to purchase up to an aggregate of 2,007,880 shares of Common Stock. The January 2025 PIPE Warrants have an exercise price of $1.27. Certain our insiders, including our Chief Executive Officer, Chief Financial Officer and certain members of the our board of directors, participated in the January 2025 PIPE. These insiders purchased an aggregate of 1,220,476 shares of Common Stock and January 2025 PIPE Warrants to purchase up to an aggregate of 1,220,476 shares of Common Stock, for an aggregate purchase price of approximately $1,550,000. The purchase price per share of Common Stock and accompanying January 2025 PIPE Warrant for these insiders was the same as paid by other investors in the January 2025 PIPE. In connection with the January 2025 PIPE, we entered into a registration rights agreement with the investor, pursuant to which we agreed to prepare and file a registration statement with the SEC registering the resale of the shares of Common Stock underlying the securities sold in the January 2025 PIPE financing. We filed a Form S-3 on January 30, 2025, which was declared effective by the SEC on February 5, 2025. We received net cash proceeds of approximately $2.3 million from the January 2025 PIPE after deducting underwriters’ discounts and offering expenses of approximately $0.3 million. During the first quarter of 2025, all of the January 2025 Pre-Funded Warrants were exercised. As of March 31, 2025, no January 2025 Pre-Funded Warrants remained outstanding.

Current wording

On January 21, 2025, we closed a private placement (the “January 2025 PIPE”) priced at the market under Nasdaq rules, in which we sold 193,539 shares of Common Stock, pre-funded warrants to purchase an aggregate of 7,246 shares of Common Stock with an exercise price of $0.01 per share (“January 2025 Pre-Funded Warrants”), and 200,785 warrants (the “January 2025 PIPE Warrants”) to purchase up to an aggregate of 200,785 shares of Common Stock. The January 2025 PIPE Warrants have an exercise price of $12.70. Certain our insiders, including our Chief Executive Officer, Chief Financial Officer and certain members of the our board of directors, participated in the January 2025 PIPE. These insiders purchased an aggregate of 122,047 shares of Common Stock and January 2025 PIPE Warrants to purchase up to an aggregate of 122,047 shares of Common Stock, for an aggregate purchase price of approximately $1,550,000. The purchase price per share of Common Stock and accompanying January 2025 PIPE Warrant for these insiders was the same as paid by other investors in the January 2025 PIPE. In connection with the January 2025 PIPE, we entered into a registration rights agreement with the investor, pursuant to which we agreed to prepare and file a registration statement with the SEC registering the resale of the shares of Common Stock underlying the securities sold in the January 2025 PIPE financing. We filed a Form S-3 on January 30, 2025, which was declared effective by the SEC on February 5, 2025. We received net cash proceeds of approximately $2.3 million from the January 2025 PIPE after deducting underwriters’ discounts and offering expenses of approximately $0.3 million. During the first quarter of 2025, all of the January 2025 Pre-Funded Warrants were exercised. As of June 30, 2025, no January 2025 Pre-Funded Warrants remained outstanding.

Previous wording

On March 27, 2025, we announced that our XYNGARI™ Phase 3 STAR-1 trial met all co-primary endpoints by achieving highly statistically significant difference when compared with placebo after 12 weeks of once weekly treatments. At week 12, XYNGAR™ achieved IGA success (2-point change and 0 or 1) in 29.4% of patients vs. 15.2% of patients on placebo (p<0.001), XYNGARI™ saw a -16.8 inflammatory lesion reduction compared with a -13.1 inflammatory lesion reduction for placebo (p<0.001), and XYNGARI™ saw a -17.3 noninflammatory lesion reduction compared with a -12.4 noninflammatory lesion reduction for placebo (p<0.001). Based on this positive data, we plan initiate the second XYNGARI™ Phase 3 STAR-2 trial by the end of 2025.

Current wording

On March 27, 2025, we announced that our XYNGARI™ Phase 3 STAR-1 trial met all co-primary endpoints by achieving highly statistically significant difference when compared with placebo after 12 weeks of once weekly treatments. At week 12, XYNGAR™ achieved IGA success (2-point change and 0 or 1) in 29.4% of patients vs. 15.2% of patients on placebo (p<0.001), XYNGARI™ saw a -16.8 inflammatory lesion reduction compared with a -13.1 inflammatory lesion reduction for placebo (p<0.001), and XYNGARI™ saw a -17.3 noninflammatory lesion reduction compared with a -12.4 noninflammatory lesion reduction for placebo (p<0.001). Based on this positive data, we are evaluating next steps with respect to the XYNGARI™ Phase 3 STAR-2 clinical trial.

Previous wording

On March 27, 2025, we entered into an inducement offer letter agreement (the “March 2025 Inducement Letter”) with a holder (the “Holder”) of certain of our existing warrants to purchase an aggregate of 4,834,470 shares of our common stock. Such existing warrants were made up of (i) certain of the May 17, 2024 (the “May 2024 Warrants”), which were issued in two separate series, having an exercise price of $4.91 per share, and (ii) the September 16, 2024, which were issued in two separate series, having an exercise price of $1.58 per share (the “September 2024 Warrants” and together with the May 2024 Warrants, the “Existing Warrants”). Pursuant to the March 2025 Inducement Letter, the Holder agreed to exercise for cash its Existing Warrants at a reduced exercise price of $1.284 per share in consideration for our agreement to issue in a private placement (i) new Series A common stock purchase warrants (the “New Series A Warrants”) to purchase up to 4,980,806 shares of Common Stock (the “New Series A Warrant Shares”) and (ii) new Series B common stock purchase warrants (the “New Series B Warrants” and together with the New Series A Warrants, the “New Warrants”) to purchase up to 4,688,134 shares of Common Stock (the “New Series B Warrant Shares” and together with the New Series A Warrant Shares, the “New Warrant Shares”). We received net proceeds of approximately $5.8 million from the exercise of the Existing Warrants by the Holder, after deducting financial advisor fees and other offering expenses payable by us.

Current wording

On March 27, 2025, we entered into an inducement offer letter agreement (the “March 2025 Inducement Letter”) with a holder (the “Holder”) of certain of our existing warrants to purchase an aggregate of 483,447 shares of our common stock. Such existing warrants were made up of (i) certain of the May 17, 2024 (the “May 2024 Warrants”), which were issued in two separate series, having an exercise price of $49.10 per share, and (ii) the September 16, 2024, which were issued in two separate series, having an exercise price of $15.80 per share (the “September 2024 Warrants” and together with the May 2024 Warrants, the “Existing Warrants”). Pursuant to the March 2025 Inducement Letter, the Holder agreed to exercise for cash its Existing Warrants at a reduced exercise price of $12.84 per share in consideration for our agreement to issue in a private placement (i) new Series A common stock purchase warrants (the “New Series A Warrants”) to purchase up to 498,080 shares of Common Stock (the “New Series A Warrant Shares”) and (ii) new Series B common stock purchase warrants (the “New Series B Warrants” and together with the New Series A Warrants, the “New Warrants”) to purchase up to 468,813 shares of Common Stock (the “New Series B Warrant Shares” and together with the New Series A Warrant Shares, the “New Warrant Shares”). We received net proceeds of approximately $5.7 million from the exercise of the Existing Warrants by the Holder, after deducting financial advisor fees and other offering expenses payable by us. As of June 30, 2025, 388,700 shares were held in abeyance.

Previous wording

In June 2024, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright &Co., LLC (“HCW”), as sales agent, pursuant to which we may offer and sell, from time to time through HCW, shares of our common stock for aggregate proceeds of up to $1,662,761 (upon the terms and subject to the conditions and limitations set forth in the ATM Agreement). During the three months ended March 31, 2025, we sold no shares of common stock under the ATM Agreement and have no capacity to sell shares pursuant to the ATM Agreement remaining.

Current wording

In June 2024, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“HCW”), as sales agent, pursuant to which we may offer and sell, from time to time through HCW, shares of our common stock for aggregate proceeds of up to $1,662,761 (upon the terms and subject to the conditions and limitations set forth in the ATM Agreement). During the six months ended June 30, 2025, we sold no shares of common stock under the ATM Agreement and have no capacity to sell shares pursuant to the ATM Agreement remaining.

Previous wording

Interest income decreased by $33,082 from $69,298 for the three months ended March 31, 2024, to $36,216 for the three months ended March 31, 2025. The decrease in interest income resulted from decreased cash balances.

Current wording

Interest income increased by $17,002 from $54,636 for the three months ended June 30, 2024, to $71,638 for the three months ended June 30, 2025. The increase in interest income resulted from increased cash balances.

Previous wording

Research and development expenses decreased by $0.3 million from $1.6 million for the three months ended March 31, 2024, to $1.3 million for the three months ended March 31, 2025. The decrease in research and development expenses resulted from $0.1 million of decreased clinical expenses from the XYNGARI™ STAR-1 acne study, which completed enrollment during the fourth quarter of 2024, and $0.2 million of decreased stock-based compensation resulting from the cancellation of out-of-the-money stock options during the first quarter of 2024.

Current wording

Research and development expenses decreased by $1.7 million from $3.6 million for the six months ended June 30, 2024, to $1.9 million for the six months ended June 30, 2025. The decrease in research and development expenses resulted from $1.7 million of decreased clinical expenses from the XYNGARI™ STAR-1 acne study, which completed enrollment during the fourth quarter of 2024.

Previous wording

General and administrative expenses decreased by $0.5 million from $1.6 million for the three months ended March 31, 2024, to $1.1 million for the three months ended March 31, 2025. This decrease resulted from $0.3 million of decreased stock-based compensation resulting from the cancellation of out-of-the-money stock options during the first quarter of 2024 and $0.2 million of decreased audit fees.

Current wording

General and administrative expenses decreased by $0.3 million from $2.5 million for the six months ended June 30, 2024, to $2.2 million for the six months ended June 30, 2025. The decrease in general and administrative expense was the net result of $0.3 million of decreased stock-based compensation resulting from the cancellation of out-of-the-money stock options during the first quarter of 2024.

Previous wording

Cash and cash equivalents used in operations of $2.7 million for the three months ended March 31, 2024, was the result of the net loss of $3.1 million, offset by $0.6 million in non-cash stock-based compensation expense, a decrease in prepaid expenses and other current assets of $0.1 million, and decreases in accounts payable and accrued and other current liabilities of $0.3 million.

Current wording

Cash used in operations of $4.6 million for the six months ended June 30, 2025, was the result of the net loss of $4.0 million and decreases in accounts payable and accrued expenses and other current liabilities of $0.9 million, partially offset by the decrease in prepaid expenses and other current assets of $0.2 million and non-cash stock-based compensation of $0.1 million.

Previous wording

Cash used in operations of $1.9 million for the three months ended March 31, 2025, was the result of the net loss of $2.3 million, offset by increases in accounts payable and accrued expenses of approximately $0.3 million, as well as the decrease of prepaid expenses and other current assets of approximately $0.1 million.

Current wording

Cash used in operations of $4.8 million for the six months ended June 30, 2024, was the result of the net loss of $6.0 million and a decrease in accrued and other current liabilities of $0.2 million, offset by increases in non-cash stock-based compensation of $0.6 million, an increase in accounts payable of $0.4 million, and a decrease in prepaid expenses and other current assets of $0.4 million.

Previous wording

Cash provided by financing activities of $8.5 million for the three months ended March 31, 2025, was the result of the January 2025 PIPE financing which raised net proceeds of $2.3 million, and the March 2025 Inducement financing which raised net proceeds of $6.2 million.

Current wording

Cash provided by financing activities of $7.9 million for the six months ended June 30, 2025, was primarily the result of the January 2025 PIPE financing which raised net proceeds of approximately $2.2 million, and the March 2025 Inducement financing which raised net proceeds of $5.7 million.

Previous wording

Since our inception, we have not generated any revenue or commercialized any products. As of March 31, 2025, our cash and cash equivalents totaled $9.7 million, and we had an accumulated deficit of $68.0 million. For the three months ended March 31, 2025, and the year ended December 31, 2024, we used cash of $1.9 million and approximately $11.1 million, respectively, in operations. We expect our cash resources to fund operations into the first quarter of 2026. We anticipate that we will continue to incur net losses for the foreseeable future.

Current wording

Since our inception, we have not generated any revenue or commercialized any products. As of June 30, 2025, our cash and cash equivalents totaled $6.5 million, and we had an accumulated deficit of $69.7 million. For the six months ended June 30, 2025, and the year ended December 31, 2024, we used cash of $4.6 million and approximately $11.1 million, respectively, in operations. We expect our cash resources to fund operations into the second quarter of 2026. We anticipate that we will continue to incur net losses for the foreseeable future.

Previous wording

We believe that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements into the first quarter of 2026. We have based this estimate of cash runway on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We anticipate that we will continue to incur net losses for the foreseeable future. These factors raise substantial doubt about our ability to continue as a going concern for the one-year period following the date that these financial statements were issued. We will require additional capital to complete the Phase 3 studies for XYNGARI™ for the treatment of acne, continue development of XYNGARI™, and to pursue in-licenses or acquisitions of other drug candidates. Therefore, based on our recurring losses from operations incurred since inception, expectation of continuing operating losses for the foreseeable future, and the need to raise additional capital to finance future operations, we are developing plans to mitigate this risk, which may consist of raising additional capital through some combination of equity or debt financings, and/or potentially new collaborations, business transactions, and reducing cash expenditures. If we are not able to secure adequate additional funding, we may be forced to make significant reductions in our operations and the pursuit of our growth strategy. In that event, we may have to delay, scale back, or eliminate some or all of our research and development programs and activities which could adversely affect our business prospects, or we may be unable to continue operations.

Current wording

We believe that our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements into the second quarter of 2026. We have based this estimate of cash runway on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We anticipate that we will continue to incur net losses for the foreseeable future. These factors raise substantial doubt about our ability to continue as a going concern for the one-year period following the date that these financial statements were issued. We will require additional capital to complete the Phase 3 studies for XYNGARI™ for the treatment of acne, continue development of XYNGARI™, and to pursue in-licenses or acquisitions of other drug candidates. Therefore, based on our recurring losses from operations incurred since inception, expectation of continuing operating losses for the foreseeable future, and the need to raise additional capital to finance future operations, we are developing plans to mitigate this risk, which may consist of raising additional capital through some combination of equity or debt financings, and/or potentially new collaborations, business transactions, and reducing cash expenditures. If we are not able to secure adequate additional funding, we may be forced to make significant reductions in our operations and the pursuit of our growth strategy. In that event, we may have to delay, scale back, or eliminate some or all of our research and development programs and activities which could adversely affect our business prospects, or we may be unable to continue operations.