Aclaris Therapeutics, Inc. (NASDAQ:ACRS), a dermatologist-led
biopharmaceutical company committed to identifying, developing, and
commercializing innovative therapies to address significant unmet
needs in aesthetic and medical dermatology, and immunology, today
announced financial results for the fourth quarter and year ended
December 31, 2017 and provided an update on its clinical
development and commercial programs.
“2017 was a defining year in Aclaris’ history, with the FDA
approval of ESKATA™ (hydrogen peroxide) Topical Solution, 40%
(w/w), the first and only FDA-approved topical, non-invasive
treatment of raised seborrheic keratosis (SK). We have generated a
high level of excitement around ESKATA in the dermatology
community, and look forward to our official launch in the second
quarter of 2018,” said Dr. Neal Walker, President and Chief
Executive Officer of Aclaris. “In January 2018, we announced
positive topline results from two Phase 2 clinical trials (WART-202
and WART-203) of A-101 45% Topical Solution (A-101 45%) for the
treatment of common warts (verruca vulgaris). We also advanced our
topical Janus kinase (JAK) inhibitor programs in alopecia, with
results from multiple Phase 2 trials expected later this year. As
our early-stage pipeline compounds advance towards the clinic, we
continue to progress towards our goal of becoming a vertically
integrated, commercial-stage biopharmaceutical company with a
robust clinical-stage pipeline and drug discovery engine.”
Clinical Pipeline Update
- A-101 45% Topical Solution
- In January 2018, reported positive results from two Phase 2
clinical trials (WART-202 and WART-203) of A-101 45%, an
investigational new drug for the treatment of common warts. A-101
45% met all primary, secondary, and exploratory endpoints of each
trial analyzed to date, achieving clinically and statistically
significant clearance of common warts.
- Scheduled an End of Phase 2 meeting with the FDA for mid-2018,
and plan to initiate two pivotal Phase 3 trials in the second half
of 2018.
- JAK Inhibitor
- AA-202 Topical – an ongoing Phase 2 clinical
trial of ATI-502 (formerly ATI-50002) for the topical treatment of
alopecia areata (AA). This trial will evaluate the
pharmacokinetics, pharmacodynamics and safety of ATI-502 compared
with placebo in 12 patients with AA. This randomized, double-blind
clinical trial is being conducted at two investigational centers
within the United States, and topline data are expected in the
first half of 2018. After completing the 28-day portion of the
trial, patients will then enter a 6-month open label extension
during which all patients will receive drug.
- AUATB-201 Topical – an ongoing Phase 2
open-label clinical trial of ATI-502 for the topical treatment of
AA. This trial will evaluate the effect of ATI-502 on the regrowth
of eyebrows in up to 24 patients with AA. This trial is being
conducted at two investigational centers in Sydney and Melbourne,
Australia, and topline qualitative data are expected mid-2018.
- AA-201 Topical – an ongoing Phase 2 dose
ranging trial of ATI-502 for the topical treatment of AA. This
trial will evaluate the effect of two concentrations of ATI-502 on
the regrowth of hair in a randomized, double-blinded,
parallel-group, vehicle-controlled trial in up to 120 patients with
AA. This trial is being conducted at 25 investigational centers
within the United States and data are expected by year end
2018.
- VITI-201 Topical – an ongoing Phase 2
open-label clinical trial of ATI-502 for the topical treatment of
vitiligo. This trial will evaluate the effect of ATI-502 on the
repigmentation of facial skin in up to 24 patients with vitiligo
and data are expected in the first half of 2019.
- AGA-201 Topical – a planned Phase 2 open-label
clinical trial of ATI-502 for the topical treatment of androgenetic
alopecia (AGA), also known as male/female pattern hair loss, which
is anticipated to begin in the first half of this year. This trial
will evaluate the effect of ATI-502 on the regrowth of hair in up
to 24 patients with AGA and data are expected in first half of
2019.
- AUAT-201 Oral – a planned Phase 2 dose ranging
trial of ATI-501 (formerly ATI-50001), an oral JAK inhibitor, for
the treatment of AA which is anticipated to begin in the first half
of 2018. Data are expected in mid-2019.
- ATI-450
- Recently presented data from pre-clinical studies of ATI-450
(formerly known as CDD-450), a selective inhibitor of the MK2
pathway, at a symposium at the American College of Rheumatology
annual meeting on November 7, 2017. The abstract summarizing the
data is titled “NOMID-Associated Complications in Mice Are
Prevented By CDD-450, a Small Molecule Inhibitor of the
Mitogen-Activated Protein Kinase-Activated Protein Kinase 2 (MK2)
Pathway.”
- Investigational New Drug application on track for submission to
the FDA in mid-2019.
Commercial
Update
- Expanded commercial organization to 70 people in support of a
successful ESKATA launch.
- Established Aclaris Market Research, Sales, Trade, Training,
and Sales Operations teams.
- Successfully onboarded and trained Aclaris sales force
consisting of 50 Field Sales Specialists, 2 Inside Sales
Representatives, 6 Regional Sales Managers, and 1 Sales
Director.
- Conducted market research with over 2,500 patients and 1,400
HCPs to date.
- Developed comprehensive HCP and consumer campaigns to support a
successful ESKATA launch.
- Finalized ESKATA pricing and positioning.
- Established ESKATA speaker bureau consisting of dermatologist
and nurse practitioner (NP)/physician assistant (PA)
speakers.
- Aclaris present at 30 key dermatology meetings in 2017.
- Generated a high level of corporate awareness with the goal to
position Aclaris as a leading innovative biopharmaceutical company
in dermatology.
- Raised awareness regarding SK disease state awareness and
patient willingness to pay for SK removal.
- Strong presence at 2018 Winter American Academy of Dermatology
in San Diego; Generated a high level of ESKATA awareness.
- Sales force currently implementing key market readiness
activities, including:
- Establishing ESKATA Centers of Excellence.
- Implementation of ESKATA Early Experience Initiative.
- National Sales Meeting scheduled for the second quarter of
2018, followed by official ESKATA launch.
Recent Corporate Highlights
- Promoted Brett Fair to Chief Commercial Officer
- Continued to build our research and development and commercial
infrastructure.
- The United States Patent and Trademark Office recently issued
U.S. Patent No. 9,895,301, which is directed to methods related to
the use and administration of a certain JAK inhibitor for treating
hair loss disorders.
- U.S. Patent No. 9,895,301 covers the use of tofacitinib for
inducing hair growth and for treating hair loss disorders such as
alopecia areata and AGA. Additional issued claims pertain to
methods of using tofacitinib to treat particular phenotypes of
alopecia areata, as well as to treat other hair loss disorders. The
‘301 Patent contains 67 claims and expires in November 2031.
- This newly allowed patent is owned by The Trustees of Columbia
University in the City of New York and exclusively licensed to
Aclaris and is the latest U.S. patent to issue in connection with
Aclaris' JAK drug development program for hair loss disorders.
- Recently added to the NASDAQ Biotechnology Index
(NASDAQ:NBI).
Financial Highlights
Liquidity and Capital Resources
As of December 31, 2017, Aclaris had aggregate cash, cash
equivalents and marketable securities of $208.9 million compared to
$174.1 million as of December 31, 2016. The $34.8 million increase
during the year ended December 31, 2017 included:
- Aggregate net proceeds of $100.2 million from the sale of
common stock under an at-the-market facility with Cowen and Company
LLC in April 2017 and a follow-on public offering of common stock
in August 2017.
- $9.6 million of cash used to acquire Confluence in August 2017,
net of cash acquired.
- $1.2 million of purchases of property and equipment.
- Net loss of $68.5 million, offset by $0.9 million of net cash
provided by working capital and $14.8 million of non-cash
stock-based compensation expense, depreciation and
amortization.
Aclaris anticipates that its cash, cash equivalents and
marketable securities as of December 31, 2017 will be sufficient to
fund its operations into the second half of 2019, without giving
effect to any potential new business development transactions or
financing activities.
Fourth Quarter 2017 Financial Results
- Net loss was $22.9 million for the fourth quarter of 2017,
compared to $11.5 million for the fourth quarter of 2016. Upon new
tax legislation passed in December 2017, Aclaris recognized an
income tax benefit of $1.8 million related to the reversal of the
deferred tax liability associated with the In-Process Research and
Development recognized in the Confluence acquisition earlier this
year.
- Revenue of $1 million and cost of revenue of $0.8 million for
the fourth quarter of 2017 related to our contract research
business acquired in August 2017.
- Total operating expenses for the fourth quarter of 2017 were
$25.7 million, compared to $11.6 million for the fourth quarter of
2016.
-
- Research and development expenses were $13.2 million for the
fourth quarter of 2017, compared to $6.9 million for the fourth
quarter of 2016. The increase of $6.3 million was primarily
attributable to a $2.3 million increase in expenses related to the
WART-202 and WART-203 trials, a $1.5 million increase in
personnel-related expenses, including stock-based compensation, due
to increased headcount, a $2 million increase in preclinical and
clinical trial development expenses related to the JAK inhibitor
portfolio and a $1.5 million increase in Medical Affairs expenses
and other costs, including early stage drug discovery. This
increase was partially offset by a $1.3 million decrease due to the
completion of our ESKATA Phase 3 clinical trials and the submission
preparation of the NDA for ESKATA in November 2016.
- General and administrative expenses were $12.5 million for the
fourth quarter of 2017, compared to $4.7 million for the fourth
quarter of 2016. The increase of $7.8 million was primarily
attributable to $2.9 million in higher personnel-related expenses,
including stock-based compensation, due to increased headcount, and
a $1 million increase related to relocating our corporate
headquarters and administrative costs related to our St. Louis,
Missouri operations acquired in August 2017. Additionally, Aclaris
incurred a $3.3 million increase in market research and sales
operations expenses related to pre-commercial activities for
ESKATA.
Full Year 2017 Financial Results
- Net loss was $68.5 million for the year ended December 31,
2017, compared to $48.1 million for the year ended December 31,
2016.
- Revenue of $1.7 million and cost of revenue of $1.2 million for
the year ended December 31, 2017 related to the contract research
business acquired in August 2017.
- Total operating expenses were $72.9 million for the year ended
December 31, 2017, compared to $48.6 million for the year ended
December 31, 2016. Net cash used in operating activities was $54.7
million, compared to $34.6 million for the year ended December 31,
2016.
- Research and development expenses were $39.8 million for the
year ended December 31, 2017, compared to $33.5 million for the
year ended December 31, 2016. The increase of $6.3 million was due
to higher payroll-related expenses of $5.6 million due to increased
headcount, including stock-based compensation expense, an increase
of $4.5 million in preclinical and clinical trial development
expenses related to our JAK inhibitor portfolio, an increase of
$3.4 million in expenses related to the WART-202 and WART-203
trials, and a $3.6 million increase in medical affairs and early
stage drug discovery activities. The increases noted above
were partially offset by a $7.7 million decrease related to our
ESKATA Phase 3 clinical trials costs, which were completed in
November 2016, and $3.4 million in costs incurred with the
acquisition of Vixen Pharmaceuticals, Inc. in the year ended
December 31, 2016.
- General and administrative expenses were $33.1 million for the
year ended December 31, 2017, compared to $15.1 million for the
year ended December 31, 2016. The increase of $18 million was
primarily attributable to an increase of $9.3 million in
payroll-related expenses due to increased headcount, including
stock-based compensation expense, an increase of $6.1 million in
pre-commercial launch activities for ESKATA, a $1.3 million
increase in facilities-related costs, and a $1.3 million increase
in other professional fees.
- As of December 31, 2017, Aclaris had approximately 30.8 million
shares of common stock outstanding.
2018 Financial Outlook
- Aclaris expects 2018 GAAP research and development (R&D)
expenses to be in the range of $67 to $75 million, which, when
excluding estimated stock-based compensation of $9 million, results
in 2018 non-GAAP R&D expense of $58 to $66 million. The
anticipated increase in R&D expenses in 2018 is mainly due to
the planned execution of Phase 2 clinical trials in AA, AGA, and
vitiligo, two planned pivotal Phase 3 trials in common warts, and
development of our early stage pipeline compounds.
- Aclaris expects 2018 GAAP selling, general and administrative
(SG&A) expenses to be in the range of $80 to $86 million,
which, when excluding estimated stock-based compensation of $14
million, results in 2018 non-GAAP SG&A expense of $66 to $72
million. The anticipated increase in SG&A expenses in 2018 is
primarily the result of the deployment of our new sales force in
January 2018 and the additional selling, marketing and consumer
initiatives to support the commercial launch of ESKATA.
Company to Host Conference Call
Management will conduct a conference call at 8:00 a.m. ET today
to discuss Aclaris’ financial results and provide a general
business update. The conference 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 1495576 prior to the start of the
call.
About Aclaris
Therapeutics, Inc. Aclaris Therapeutics, Inc. is a
dermatologist-led biopharmaceutical company committed to
identifying, developing, and commercializing innovative therapies
to address significant unmet needs in aesthetic and medical
dermatology, and immunology. Aclaris is focused on market segments
with no FDA-approved medications or where treatment gaps
exist. Aclaris is based in Wayne, Pennsylvania and more
information about the company can be found by visiting the Aclaris
website at www.aclaristx.com.
Cautionary Note Regarding Forward-Looking
Statements Any 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",
"may", "plan," "potential," "will," and similar expressions, and
are based on Aclaris' current beliefs and expectations. These
forward-looking statements include expectations regarding Aclaris’
commercial launch of ESKATA, research and development and selling,
general and administrative expenses during 2018 and the clinical
development of its drug candidates, including the availability of
data from its ongoing and planned clinical trials and timing for
initiation of planned clinical trials, and its belief that its
existing capital resources will be sufficient to fund its
operations into the second half of 2019. 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,
Aclaris' reliance on third parties over which it may not always
have full control, and other risks and uncertainties that are
described in the Risk Factors section of Aclaris' Annual Report on
Form 10-K to be filed for the year ended December 31, 2017 and
other filings Aclaris makes with the U.S. Securities and Exchange
Commission from time to time. These documents are available under
the "Financial Information" 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.
Use of Non-GAAP Financial Measures
Aclaris has presented certain non-GAAP financial measures in
this release. This release and the reconciliation tables included
herein include total non-GAAP R&D expense and non-GAAP SG&A
expense, both of which exclude stock-based compensation. Aclaris
excludes stock-based compensation expense because management
believes the exclusion of this item is helpful to investors to
evaluate Aclaris' recurring operational performance. Aclaris
management uses these non-GAAP financial measures to monitor and
evaluate its operating results and trends on an on-going basis, and
internally for operating, budgeting and financial planning
purposes. The non-GAAP financial measures should be considered in
addition to results prepared in accordance with GAAP, but should
not be considered a substitute for or superior to GAAP results.
Aclaris Therapeutics,
Inc.Consolidated Statements of Operations(unaudited, in
thousands, except share and per share data)
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenue |
$ |
999 |
|
|
$ |
- |
|
|
$ |
1,683 |
|
|
$ |
- |
|
Cost of revenue |
|
754 |
|
|
|
‑ |
|
|
|
1,207 |
|
|
|
‑ |
|
Gross
profit |
|
245 |
|
|
|
‑ |
|
|
|
476 |
|
|
|
‑ |
|
Operating
expenses: |
|
|
|
|
|
|
|
Research
and development (1) |
|
13,189 |
|
|
|
6,943 |
|
|
|
39,790 |
|
|
|
33,476 |
|
General
and administrative (1) |
|
12,498 |
|
|
|
4,684 |
|
|
|
33,109 |
|
|
|
15,091 |
|
Total operating
expenses |
|
25,687 |
|
|
|
11,627 |
|
|
|
72,899 |
|
|
|
48,567 |
|
Loss from
operations |
|
(25,442 |
) |
|
|
(11,627 |
) |
|
|
(72,423 |
) |
|
|
(48,567 |
) |
Other
income, net |
|
678 |
|
|
|
152 |
|
|
|
2,070 |
|
|
|
488 |
|
Loss before income
taxes |
|
(24,764 |
) |
|
|
(11,475 |
) |
|
|
(70,353 |
) |
|
|
(48,079 |
) |
Provision for income
taxes |
|
(1,830 |
) |
|
|
‑ |
|
|
|
(1,830 |
) |
|
|
‑ |
|
Net loss |
$ |
(22,934 |
) |
|
$ |
(11,475 |
) |
|
$ |
(68,523 |
) |
|
$ |
(48,079 |
) |
Net loss per share,
basic and diluted |
$ |
(0.74 |
) |
|
$ |
(0.49 |
) |
|
$ |
(2.44 |
) |
|
$ |
(2.25 |
) |
Weighted average common
shares outstanding, basic and diluted |
|
30,838,741 |
|
|
|
23,390,746 |
|
|
|
28,102,386 |
|
|
|
21,415,733 |
|
|
|
|
|
|
|
|
|
(1) Amounts include
stock-based compensation expense as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
$ |
81 |
|
|
$ |
‑ |
|
|
$ |
211 |
|
|
$ |
‑ |
|
Research and
development |
|
1,618 |
|
|
|
714 |
|
|
|
5,471 |
|
|
|
2,291 |
|
General and
administrative |
|
2,601 |
|
|
|
1,196 |
|
|
|
8,748 |
|
|
|
3,813 |
|
Total stock-based
compensation expense |
$ |
4,300 |
|
|
$ |
1,910 |
|
|
$ |
14,430 |
|
|
$ |
6,104 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aclaris Therapeutics,
Inc.Selected Consolidated Balance Sheet Data(unaudited, in
thousands)
|
|
|
|
|
December 31, 2017 |
|
December 31, 2016 |
|
|
|
|
|
|
|
Cash, cash equivalents
and marketable securities |
|
$ |
208,854 |
|
$ |
174,134 |
Total assets |
|
|
243,509 |
|
|
176,085 |
Total current
liabilities |
|
|
12,762 |
|
|
6,223 |
Total liabilities |
|
|
18,247 |
|
|
6,595 |
Total stockholders'
equity |
|
|
225,262 |
|
|
169,490 |
|
|
|
|
|
|
|
Aclaris Therapeutics,
Inc.2018 Financial GuidanceReconciliation
of GAAP R&D Expense to Non-GAAP R&D Expense(in
thousands)
|
|
2018 |
|
|
Low |
|
High |
R&D
expense: |
|
|
|
|
|
|
GAAP R&D
expense |
|
$ |
67,000 |
|
|
$ |
75,000 |
|
Adjustments: |
|
|
|
|
|
|
Stock-based compensation |
|
|
(9,000 |
) |
|
|
(9,000 |
) |
Non-GAAP
R&D expense |
|
$ |
58,000 |
|
|
$ |
66,000 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP SG&A to Non-GAAP
SG&A Expense(in thousands)
|
|
2018 |
|
|
Low |
|
High |
SG&A
expense: |
|
|
|
|
|
|
GAAP SG&A
expense |
|
$ |
80,000 |
|
|
$ |
86,000 |
|
Adjustments: |
|
|
|
|
|
|
Stock-based compensation |
|
|
(14,000 |
) |
|
|
(14,000 |
) |
Non-GAAP
SG&A expense |
|
$ |
66,000 |
|
|
$ |
72,000 |
|
|
|
|
|
|
|
|
|
|
Aclaris Contact Michael Tung, M.D. Senior Vice President
Corporate Strategy/Investor Relations 484-329-2140
mtung@aclaristx.com
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