for the night. The next day, patients come back to the office, where they are outfitted with special glasses and exposed to the blue light for 17 minutes.
It works, but it’s much more of a hassle than the more commonly used treatment, cryosurgery, during which doctors use liquid nitrogen to freeze off the AKs. Cryosurgery can burn and leave white marks, but concedes Doman, “the positive to it is that it’s fast.”
Dusa’s new study is designed to test whether applying the drug to the entire face and then treating it with the blue light after one, two, or three hours will remove AKs effectively and prevent them from recurring. The idea came from dermatologists in the field, who tried the product that way and then reported to Dusa that they were getting positive results. Then, last year, an independent study was published in the British Journal of Dermatology showing that applying the drug to the entire face prevented the recurrence of AKs for up to 12 months.
But marketing products for anything other than what the FDA sanctions—so called “off-label” marketing—is illegal. So Dusa’s salespeople couldn’t tell doctors about the positive results others were seeing when they covered the face with the drug and then left it on for a shorter period of time than what the label instructed. “We think the new trial will allow us to get that on our label,” says Doman, whose previous experience includes stints at Johnson & Johnson and Bristol-Myers Squibb.
If all goes well, Dusa will complete the Phase 2 study a year from now and proceed to a pivotal, Phase 3 study, Doman says. At that point, the company will need to decide whether to use the currently marketed drug in the trial or to start investigating a new formulation. Dusa’s scientists are working on ways to make the drug more effective and even faster, Doman says.
AKs stem from sun damage and generally start appearing when people hit their 50s. The market for effective treatments, therefore, is growing in step with the aging of the population. Roth Capital Partners analyst Scott Henry estimates that the total market for AK treatments is $700 million a year. He predicts that the combination of a demographics and inflation will continue to drive Dusa’s growth. In a May report Henry declares, “the DUSA business model remains in the early innings.”
Dusa’s stock has seen some volatility over the last year—jumping from $2 to $7 and then falling back to around $4.25. Henry has a 12-month price target on the stock of $6.50.
Doman says Dusa is actively looking for acquisition or licensing candidates to fill out its pipeline. “We’re in a good position to bring something in to leverage our sales and marketing capabilities,” he says, adding that the company will most likely stay in field of medical dermatology. But he also suspects that Dusa itself could become an acquisition target and fetch a decent premium—a scenario that he believes would validate the turnaround effort he started more than a half-decade ago. “We’re finally getting rid of the old baggage,” Doman says. “We’re not a science project anymore. We’re a real company.”
