Aclaris Therapeutics Reports Third Quarter 2019 Financial Results and Provides Business Highlights and an Update on R&D Progr...
November 07 2019 - 4:01PM
Aclaris Therapeutics, Inc. (NASDAQ: ACRS), a physician-led
biopharmaceutical company focused on immuno-inflammatory diseases,
today announced its financial results for the third quarter of 2019
and provided business highlights and an update on its research and
development programs.
Business Highlights:
- Announced the completion of the strategic review of its
business in September 2019, as a result of which Aclaris is
refocusing its resources on its immuno-inflammatory development
programs and is actively seeking partners for its commercial
products and certain clinical development assets.
- Divested RHOFADE® (oxymetazoline hydrochloride) cream, 1%
(RHOFADE) to EPI Health, LLC in October 2019 for up to $55.0
million, consisting of:
- Upfront payment of $35.0 million; and
- Potential sales milestone payments of up to $20.0 million in
the aggregate upon the achievement of specified levels of net sales
of products covered by the agreement; as well as
- A high single-digit royalty on net sales, on a
product-by-product and country-by-country basis; and
- 25% of any upfront, license, milestone, maintenance or fixed
payment received by EPI Health from a licensee or sublicensee in
any territory outside of the United States, subject to specified
exceptions.
- Seeking partners to:
- Commercialize A-101 45% Topical Solution, an investigational
compound being developed as a potential treatment for common warts
(verruca vulgaris);
- Further develop and commercialize ATI-501 (oral) and ATI-502
(topical), which are investigational Janus Kinase (JAK) 1/3
inhibitor compounds, as potential treatments for alopecia; and
- Commercialize ESKATA® (hydrogen peroxide) topical solution, 40%
(w/w).
R&D Program Updates:
- Recently announced positive results from THWART-1 (WART-301)
and THWART-2 (WART-302), Aclaris’ two pivotal Phase 3 clinical
trials of A-101 45% Topical Solution as a potential treatment for
common warts.
- Announced in August that the first subject in its Phase 1
clinical trial of ATI-450, an investigational oral MK2 inhibitor
compound, has been dosed. ATI-450 is Aclaris’ first
internally developed novel compound to enter the clinical phase of
development.
“We are excited with the progress we have made toward executing
on our new business strategy, with our first step being the
divestiture of RHOFADE,” said Dr. Neal Walker, President and Chief
Executive Officer of Aclaris. “With the success of our two pivotal
Phase 3 trials for A-101 45% Topical Solution, which has the
potential to be the first FDA-approved prescription treatment for
common warts, we believe this program will be of interest to
potential commercial partners. In September, we presented our
new focus on immuno-inflammatory diseases at our R&D day.
We look forward to reporting the results of our Phase 1 trial for
ATI-450 by the end of the first quarter of 2020 and providing
further updates on the execution of our new strategy,” said Dr.
Walker.
Clinical Pipeline Update:
- A-101 45% Topical Solution:
- A-101 45% Topical Solution met the primary and all secondary
efficacy endpoints in both THWART-1 and THWART-2, Aclaris’ pivotal
Phase 3 clinical trials for the treatment of common warts.
- The majority of adverse events (AEs) in THWART-1 and THWART-2
were application site reactions, which were predominantly mild or
moderate. No treatment-related serious adverse events were
observed in the trials. Only one subject in the Phase 3 program had
an AE that led to treatment discontinuation. The most common AEs
occurring in more than 5% of subjects in the A-101 45% Topical
Solution group were AEs at the application site such as pain,
scabbing, erythema, pruritus, pallor and erosion.
- An open-label safety extension Phase 3 clinical trial
(WART-303) evaluating the long-term safety of A-101 45% Topical
Solution as a potential treatment for common warts, has completed
enrollment of 425 patients. Aclaris expects WART-303 to be
completed in the first half of 2020.
- ATI-450:
- ATI-450-PKPD-101 - This is an ongoing Single
Ascending Dose / Multiple Ascending Dose (SAD/MAD) safety,
pharmacokinetic and pharmacodynamic Phase 1 clinical trial of
approximately 60-80 subjects. If successfully completed, Aclaris
expects to initiate a Phase 2 clinical trial for ATI-450 in
subjects with rheumatoid arthritis in the first half of 2020.
Aclaris is also considering developing ATI-450 for an additional
inflammatory indication.
- ATI-1777:
- ATI-1777 is an investigational topical soft-JAK inhibitor
compound that Aclaris is developing as a potential treatment for
moderate-to-severe atopic dermatitis.
- Aclaris expects to submit an IND/regulatory filing for ATI-1777
in mid-2020.
- If the IND/regulatory filing is allowed, Aclaris expects to
initiate a Phase 1/2 clinical trial in the second half of
2020.
Financial Highlights:Liquidity and
Capital Resources
As of September 30, 2019, Aclaris had aggregate cash, cash
equivalents and marketable securities of $91.4 million compared to
$168.0 million as of December 31, 2018. For the quarter and nine
months ended September 30, 2019, net cash used in operating
activities was $23.4 million and $76.1 million, respectively. As of
September 30, 2019, Aclaris had approximately 41.4 million shares
of common stock outstanding.
Aclaris anticipates that its cash, cash equivalents and
marketable securities as of September 30, 2019, after giving effect
to both the upfront payment from the sale of RHOFADE and the full
repayment of the loan facility with Oxford Finance LLC, will be
sufficient to fund its operations into the third quarter of 2021,
without giving effect to any potential new business development
transactions or financing activities.
Third Quarter 2019 and Year-to-Date Financial
Results
- As described above, on September 5, 2019, Aclaris announced the
completion of a strategic review and its decision to refocus its
resources on its immuno-inflammatory development programs and to
actively seek partners for its commercial products. The
accompanying condensed consolidated statements of operations and
selected condensed 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. The accompanying financial statement data
are generally presented in conformity with Aclaris’ historical
format. Aclaris believes this format provides comparability
with its previously filed financial statements.
- Contract research revenues decreased to $1.0 million and $3.1
million for the quarter and nine months ended September 30, 2019,
compared to $1.1 million and $3.4 million for the quarter and nine
months ended September 30, 2018. Cost of revenue was $0.8 million
and $3.0 million for the quarter and nine months ended September
30, 2019, compared to $1.1 million and $3.1 million for the quarter
and nine months ended September 30, 2018. These amounts included
non-cash stock-based compensation, and amortization and
depreciation expenses, of $0.2 million and $0.8 million for the
quarter and nine months ended September 30, 2019, respectively, and
$0.3 million and $0.8 million for the quarter and nine months ended
September 30, 2018, respectively.
- Research and development expenses were $16.2 million and $53.3
million for the quarter and nine months ended September 30, 2019,
respectively, compared to $15.2 million and $41.5 million for the
quarter and nine months ended September 30, 2018, respectively. The
increases were mainly the result of a $4.0 million milestone
payment made by Aclaris to Rigel Pharmaceuticals, Inc. for the
achievement of a specified development milestone, and activities
associated with preclinical development and the recently initiated
Phase 1 clinical trial for ATI-450. These increases were
offset in part by decreases in expenses for several Phase 2
clinical trials of ATI-501 and ATI-502 and two Phase 3 clinical
trials of A-101 45% Topical Solution, which reached or neared
completion in the third quarter of 2019.
- General and administrative expenses were $6.7 million and $21.1
million for the quarter and nine months ended September 30, 2019,
respectively, compared to $6.1 million and $20.5 million for the
quarter and nine months ended September 30, 2018,
respectively.
- Total costs and expenses from continuing operations for the
third quarter of 2019 were $23.8 million, compared to $22.5 million
for the third quarter of 2018. For the nine months ended September
30, 2019, total costs and expenses were $96.6 million, compared to
$65.1 million for the same period in 2018. These amounts included
non-cash stock-based compensation expenses of $4.0 million and
$12.9 million for the quarter and nine months ended September 30,
2019, respectively, compared to $4.0 million and $12.4 million for
the prior year periods, respectively. For the nine months ended
September 30, 2019, there was also an $18.5 million non-cash charge
for the impairment of goodwill. There was no such charge in the
prior year.
- Loss from continuing operations was $23.1 million for the third
quarter of 2019, compared to $20.6 million for the third quarter of
2018. Loss from continuing operations was $94.1 million for the
nine months ended September 30, 2019, compared to $58.5 million for
the nine months ended September 30, 2018.
- Loss from discontinued operations was $32.2 million for the
third quarter of 2019, compared to $12.1 million for the third
quarter of 2018, and was $48.7 million for the nine months ended
September 30, 2019, compared to $35.6 million for the nine months
ended September 30, 2018.
- Net loss, which combines loss from continuing and discontinued
operations, was $55.3 million for the third quarter of 2019,
compared to net loss of $32.7 million for the third quarter of
2018, and was $142.8 million for the nine months ended September
30, 2019, compared to $94.2 million for the nine months ended
September 30, 2018.
2019 Financial Outlook and Cash Runway
- As a result of Aclaris’ new strategic direction announced on
September 5, 2019, which resulted in the reclassification of
expenses related to its commercial products, Aclaris’ prior
full-year 2019 estimated operating expense guidance no longer
represents an accurate estimate of its anticipated operating
expenses, and Aclaris does not believe that updated full-year
guidance for 2019 would be meaningful.
- Aclaris now anticipates that its cash, cash equivalents and
marketable securities as of September 30, 2019, after giving effect
to both the upfront payment from the sale of RHOFADE and the full
repayment of the loan facility with Oxford Finance LLC, will be
sufficient to fund its operations into the third quarter of 2021,
without giving effect to any potential new business development
transactions or financing activities.
Company to Host Conference CallManagement will
conduct a conference call at 5:00 PM ET today to
discuss Aclaris’ financial results and provide a general business
update. The conference call will be webcast live over the
Internet and can be accessed by logging on to the “Investors” page
of the Aclaris Therapeutics website, www.aclaristx.com, prior to
the event. A replay of the webcast will be archived on the Aclaris
Therapeutics website for 30 days following the call.
To participate on the live call, please dial (844)
776-7782 (domestic) or (661) 378-9535 (international), and
reference conference ID 2698128 prior to the start
of the call.
About Aclaris Therapeutics, Inc.Aclaris
Therapeutics, Inc. is a physician-led biopharmaceutical company
committed to addressing the needs of patients with
immuno-inflammatory diseases who lack satisfactory treatment
options. The company’s diverse and multi-stage portfolio includes
one late-stage investigational drug candidate and a pipeline
powered by a robust R&D engine exploring protein kinase
regulation. For additional information, please visit
www.aclaristx.com and follow Aclaris on LinkedIn or Twitter
@aclaristx.
Cautionary Note Regarding Forward-Looking
StatementsAny statements contained in this press release
that do not describe historical facts may constitute
forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These statements may be
identified by words such as “believe,” “expect,” “intend,” “may,”
“plan,” “potential,” “will,” and similar expressions, and are based
on Aclaris' current beliefs and expectations. These forward-looking
statements include expectations regarding seeking a third-party
partner to commercialize A-101 45% Topical Solution, further
develop and commercialize ATI-501 and ATI-502 and commercialize
ESKATA, the clinical development of Aclaris' drug candidates,
including the availability of data from its clinical trials, timing
for initiation or completion of clinical trials and timing for
regulatory filings, and its belief that its existing cash, cash
equivalents and marketable securities will be sufficient to fund
its operations into the third quarter of 2021. These statements
involve risks and uncertainties that could cause actual results to
differ materially from those reflected in such statements. Risks
and uncertainties that may cause actual results to differ
materially include uncertainties inherent in the conduct of
clinical trials and the commercialization of products, Aclaris'
reliance on third parties over which it may not always have full
control, Aclaris' ability to enter into strategic partnerships on
commercially reasonable terms and other risks and uncertainties
that are described in the Risk Factors section of Aclaris' Annual
Report on Form 10-K for the year ended December 31, 2018, the Form
10-Q for the quarter ended September 30, 2019 and other filings
Aclaris makes with the U.S. Securities and Exchange Commission from
time to time. These documents are available under the “SEC filings”
section of the Investors page of Aclaris' website at
http://www.aclaristx.com. Any forward-looking statements speak only
as of the date of this press release and are based on information
available to Aclaris as of the date of this release, and Aclaris
assumes no obligation to, and does not intend to, update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Aclaris Therapeutics,
Inc.Condensed Consolidated Statements of
Operations(unaudited, in thousands, except share and per share
data)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenues: |
|
|
|
|
|
|
|
|
Product sales, net |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Contract research |
|
|
983 |
|
|
|
1,118 |
|
|
|
3,132 |
|
|
|
3,379 |
|
Other revenue |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000 |
|
Total revenues, net |
|
|
983 |
|
|
|
1,118 |
|
|
|
3,132 |
|
|
|
4,379 |
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
Cost of revenue (1) |
|
|
826 |
|
|
|
1,067 |
|
|
|
3,028 |
|
|
|
3,063 |
|
Research and development
(1) |
|
|
16,183 |
|
|
|
15,189 |
|
|
|
53,334 |
|
|
|
41,482 |
|
Sales and marketing
(1) |
|
|
112 |
|
|
|
63 |
|
|
|
629 |
|
|
|
89 |
|
General and administrative
(1) |
|
|
6,726 |
|
|
|
6,141 |
|
|
|
21,142 |
|
|
|
20,481 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
18,504 |
|
|
|
— |
|
Amortization of
definite-lived intangible |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total costs and expenses |
|
|
23,847 |
|
|
|
22,460 |
|
|
|
96,637 |
|
|
|
65,115 |
|
Loss from operations |
|
|
(22,864 |
) |
|
|
(21,342 |
) |
|
|
(93,505 |
) |
|
|
(60,736 |
) |
Other (expense) income,
net |
|
|
(274 |
) |
|
|
710 |
|
|
|
(589 |
) |
|
|
2,189 |
|
Loss from continuing
operations |
|
|
(23,138 |
) |
|
|
(20,632 |
) |
|
|
(94,094 |
) |
|
|
(58,547 |
) |
Loss from discontinued operations
(1) |
|
|
(32,181 |
) |
|
|
(12,108 |
) |
|
|
(48,666 |
) |
|
|
(35,640 |
) |
Net loss |
|
$ |
(55,319 |
) |
|
$ |
(32,740 |
) |
|
$ |
(142,760 |
) |
|
$ |
(94,187 |
) |
Net loss per share,
basic and diluted |
$ |
(1.34 |
) |
|
$ |
(1.06 |
) |
|
$ |
(3.46 |
) |
|
$ |
(3.04 |
) |
Weighted average
common shares outstanding, basic and diluted |
|
41,364,387 |
|
|
|
30,982,192 |
|
|
|
41,296,377 |
|
|
|
30,938,026 |
|
|
|
|
|
|
|
|
|
(1) Amounts include
stock-based compensation expense as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
$ |
25 |
|
|
$ |
194 |
|
|
$ |
454 |
|
|
$ |
560 |
|
Research and
development |
|
1,418 |
|
|
|
1,433 |
|
|
|
4,733 |
|
|
|
4,916 |
|
Sales and
marketing |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
General and
administrative |
|
2,581 |
|
|
|
2,320 |
|
|
|
7,707 |
|
|
|
6,936 |
|
Loss from
discontinued operations |
|
(704 |
) |
|
|
760 |
|
|
|
102 |
|
|
|
2,687 |
|
Total stock-based
compensation expense |
$ |
3,320 |
|
|
$ |
4,707 |
|
|
$ |
12,996 |
|
|
$ |
15,099 |
|
|
|
|
|
|
|
|
|
Aclaris Therapeutics,
Inc.Selected Condensed Consolidated Balance Sheet
Data(unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
September 30, 2019 |
|
December 31, 2018 |
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and
marketable securities |
|
$ |
91,428 |
|
$ |
167,972 |
|
Total assets |
|
|
160,416 |
|
|
275,566 |
|
Total current liabilities |
|
|
38,989 |
|
|
27,342 |
|
Total liabilities |
|
|
75,141 |
|
|
60,442 |
|
Total stockholders'
equity |
|
|
85,275 |
|
|
215,124 |
|
Aclaris ContactMichael Tung, M.D.Senior Vice
President Corporate Strategy/Investor
Relations484-329-2140mtung@aclaristx.com
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