Shares of Dermira (DERM) - Get Report climbed 3.4% to $9.29 Thursday after Mizuho upgraded shares of the biopharmaceutical company to buy from neutral.

Analyst Irina Koffler also lowered her price target for the Menlo Park, California-based company to $14 from $17 a share. She said in a note to investors that she expects the Spanish pharmaceutical company Almirall to exercise its European rights to lebrikizumab, a treatment of moderate-to-severe atopic dermatitis.

Koffler said she attributes a 40% share selloff of the company's stock since April to financing uncertainty and the "lackluster" performance of the prescription anticholinergi Qbrexza.

"We believe Dermira could be strategically attractive to dermatology-focused companies," Koffler wrote. "We believe there could be significant cost synergies associated with cutting Qbrexza SG&A (Selling, General and Administrative Expenses)."

Koffler said that "the chief risk to our thesis is that Almirall walks away from EU rights."

"If Almirall abandons the deal, it may discourage other strategic interest in lebrikizumab as well," she wrote. "In this case, it's possible that Dermira would need to develop lebrikizumab on its own and pursue multiple financing rounds in the future against a limited catalyst calendar over the next three years while we await lebrikizumab approval and launch. Based on the pending Dermavant IPO focused on a Phase III psoriasis biologic, we believe the category is still attractive to investors and strategics and we view this scenario as unlikely."