On November 4, 2020 Aclaris Therapeutics, Inc. (NASDAQ: ACRS), a clinical-stage biopharmaceutical company focused on developing novel drug candidates for immuno-inflammatory diseases, reported its financial results for the third quarter of 2020 and provided a corporate update (Press release, Aclaris Therapeutics, NOV 4, 2020, View Source [SID1234569800]).
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"We have continued to meet our milestones and meaningfully advance our pipeline," said Dr. Neal Walker, President & CEO of Aclaris. "We recently announced that we dosed our first subject in our Phase 2a trial of ATI-1777 for the treatment of moderate to severe atopic dermatitis. In addition, we initiated our Phase 2a trial of ATI-450 as a potential treatment for cryopyrin-associated periodic syndrome, an orphan immuno-inflammatory indication. We look forward to progressing these trials as well as our ongoing trial of ATI-450 for rheumatoid arthritis."
Research and Development Highlights:
The global outbreak of COVID-19 continues to rapidly evolve and has caused and may continue to cause Aclaris to experience disruptions that could impact the timing of its research and development and regulatory activities listed below.
ATI-450, an investigational oral small molecule MK2 inhibitor compound:
ATI-450-RA-201: An ongoing Phase 2a clinical trial to investigate the safety, tolerability, pharmacokinetics and pharmacodynamics of ATI-450 in subjects with moderate to severe rheumatoid arthritis. Aclaris’ planned enrollment for this trial is up to 25 subjects.
Aclaris anticipates reporting data from this trial in the first half of 2021.
ATI-450-CAPS-201: An ongoing Phase 2a open-label, single-arm clinical trial to investigate the safety, tolerability, efficacy and pharmacodynamics of ATI-450 for the maintenance of remission in subjects with cryopyrin-associated periodic syndrome (CAPS) previously managed with anti-IL1 therapy. Aclaris’ planned enrollment for this trial is up to 10 subjects. The primary endpoint of the trial is an assessment of safety and tolerability. The key secondary efficacy endpoint of the trial is the proportion of subjects who maintain disease remission.
Aclaris initiated this trial and filed for orphan drug designation for the indication in November 2020.
IIT-2020-ATI-450-COVID-19: An ongoing investigator-initiated Phase 2a, randomized, double-blind, placebo-controlled clinical trial to investigate the safety and efficacy of ATI-450, when used in addition to standard of care therapy, as a potential treatment for cytokine release syndrome in approximately 36 hospitalized patients with COVID-19. Aclaris is providing funding and clinical drug supply to the University of Kansas Medical Center (KUMC), the sponsor of the trial. The primary endpoint in this trial is the proportion of subjects who are free from respiratory failure by day 14.
ATI-1777, an investigational topical "soft" Janus Kinase (JAK) 1/3 inhibitor compound:
ATI-1777-AD-201: An ongoing Phase 2a multicenter, randomized, double-blind, vehicle-controlled, parallel-group clinical trial to investigate the efficacy, safety, tolerability and pharmacokinetics of ATI-1777 in subjects with moderate or severe atopic dermatitis. Aclaris’ planned enrollment for this trial is approximately 42 subjects. The primary endpoint is the percentage change from baseline in the Eczema Area and Severity Index (EASI) score at week 4.
The first subject was dosed in October 2020.
ATI-2138, an investigational oral ITK/TXK/JAK3 (ITJ) inhibitor compound:
Aclaris is developing ATI-2138 as a potential treatment for psoriasis and/or inflammatory bowel disease and expects to submit an Investigational New Drug (IND) Application for ATI-2138 in 2021.
Business Development Highlights:
Aclaris continues to pursue strategic alternatives, including seeking partners for:
A-101 45% Topical Solution: to obtain regulatory approval and commercialize A-101 45% Topical Solution, an investigational compound, as a potential treatment for common warts (verruca vulgaris);
ATI-501 & ATI-502: to further develop, obtain regulatory approval and commercialize ATI-501 (oral) and ATI-502 (topical), investigational JAK 1/3 inhibitor compounds, as potential treatments for alopecia; and
ESKATA: to commercialize ESKATA (hydrogen peroxide) topical solution, 40% (w/w).
Financial Highlights:
Liquidity and Capital Resources
As of September 30, 2020, Aclaris had aggregate cash, cash equivalents, restricted cash and marketable securities of $55.2 million compared to $75.0 million as of December 31, 2019. For the three and nine months ended September 30, 2020, net cash used in operating activities was $12.2 million and $29.8 million, respectively. As of September 30, 2020, Aclaris had approximately 42.9 million shares of common stock outstanding.
In August 2020, Aclaris entered into an equity purchase agreement with Lincoln Park Capital Fund, LLC (Lincoln Park). The agreement allows Aclaris to sell, at its discretion, up to $15.0 million of its common stock to Lincoln Park.
Aclaris anticipates that its cash, cash equivalents, restricted cash and marketable securities as of September 30, 2020 will be sufficient to fund its operations through the first quarter of 2022, without giving effect to any potential business development transactions or financing activities.
Third Quarter 2020 and Year-to-Date Financial Results
The accompanying condensed consolidated statements of operations and selected consolidated balance sheet data have been recast for all periods presented to reflect the assets, liabilities, revenue and expenses related to Aclaris’ commercial products as discontinued operations.
Net loss was $10.7 million for the third quarter of 2020 compared to $55.3 million for the third quarter of 2019, and was $37.8 million for the nine months ended September 30, 2020 compared to $142.8 million for the nine months ended September 30, 2019.
Total revenue was $1.4 million for the third quarter of 2020 compared to $1.0 million for the third quarter of 2019, and was $4.9 million for the nine months ended September 30, 2020 compared to $3.1 million for the nine months ended September 30, 2019.
Research and development (R&D) expenses were $6.9 million for the quarter ended September 30, 2020 compared to $16.2 million for the prior year period, and were $22.8 million for the nine months ended September 30, 2020 compared to $53.3 million for the prior year period.
The quarter-over-quarter decrease of $9.3 million was primarily the result of the substantial completion of Aclaris’ various Phase 2 clinical trials of ATI-501 and ATI-502 and two pivotal Phase 3 clinical trials of A-101 45% Topical Solution in 2019, and the corresponding reduction in personnel costs to support these programs. Additionally, Aclaris made a $4.0 million milestone payment for the achievement of a development milestone in the third quarter of 2019 which also contributed to the decrease quarter-over-quarter.
R&D expenses in the third quarter of 2020 included non-cash stock-based compensation expense of $0.4 million compared to $1.4 million in the prior year period.
General and administrative (G&A) expenses were $3.9 million for the quarter ended September 30, 2020 compared to $6.8 million for the prior year period, and were $15.6 million for the nine months ended September 30, 2020 compared to $21.8 million for the prior year period.
The quarter-over-quarter decrease of $3.0 million was primarily the result of lower personnel costs resulting from Aclaris’ decision to discontinue commercial operations in September 2019.
G&A expenses in the third quarter of 2020 included non-cash stock-based compensation expense of $1.3 million compared to $2.6 million in the prior year period.
Loss from continuing operations was $10.7 million for the quarter ended September 30, 2020 compared to $23.1 million for the prior year period, and was $37.6 million for the nine months ended September 30, 2020 compared to $94.1 million for the prior year period. Loss from discontinued operations was $0 for the third quarter of 2020 compared to $32.2 million for the third quarter of 2019, and was $0.3 million for the nine months ended September 30, 2020 compared to $48.7 million for the nine months ended September 30, 2019.