A year after buyout, Lilly to shutter Dermira's Menlo Park facility and shed 163 jobs

Eli Lilly
(Eli Lilly)

Eli Lilly took a sizable leap into the dermatology market last year with its $1.1 billion acquisition of Dermira, picking up Qbrexza, the medicated cloth for excessive sweating, and a potential rival to Regeneron and Sanofi’s atopic dermatitis blockbuster Dupixent.

Now, about a year later, Lilly is selling Qbrexza and plans to shutter Dermira’s Menlo Park facility, shedding 163 jobs along the way, the San Francisco Business Times first reported Monday.

Eli Lilly filed a notice of 163 layoffs early this month, California's Worker Adjustment and Retraining Notification website shows. A Lilly spokesperson confirmed the layoffs and the Menlo Park site closure in an email to Fierce Pharma on Wednesday. 

"Subject to the transaction closing, the Dermira site in Menlo Park, California is to be closed, and all Dermira site and field-based positions, approximately 163 employees, will be impacted," the company's spokesperson said. "The affected employees will have the opportunity to post for open, available positions at Lilly."

Arizona-based Journey Medical will snap up Qbrexza, which drew in $24 million in sales in 2020. Journey said it expects the transaction to close in the second quarter of this year. 

Some Dermira employees could migrate over to Journey Medical as part the Qbrexza acquisition, BioSpace reports. However, it remains uncertain if that will be the case or how many might end up at the new Qbrexza owner.

RELATED: Lilly kicks off 2020's predicted biopharma M&A boom with $1.1B Dermira deal

While Qbrexza is Demira’s only marketed drug, the company also boasts a pipeline that includes the phase 3 atopic dermatitis drug lebrikizumab, a monoclonal antibody for moderate-to-severe atopic dermatitis that could rival the well-established incumbent Dupixent. Lilly said it will continue the development of lebrikizumab.

Dermira paid Roche $80 million upfront for lebrikizumab in 2017. Roche could receive more than $1 billion more from the deal if lebrikizumab succeeds in testing and on the market.