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 first quarter 2018 and provided an update on its clinical development and commercial programs.
The first quarter of 2018 was a busy one as we prepared for the launch of ESKATA (hydrogen peroxide) Topical Solution, 40% (w/w), the first and only FDA-approved topical treatment for raised seborrheic keratosis (SK). We held the ESKATA Launch Meeting last week, and ESKATA is now officially available for physicians and their patients, said Brett Fair, Chief Commercial Officer of Aclaris.
Successful rollout and implementation of the ESKATA Early Experience Initiative (EEI).
Program expanded to over 700 accounts to accommodate market demand for ESKATA.
Ongoing in-service programs to support successful training and product integration.
Positive initial ESKATA feedback from EEI program captured in physician and patient post-application surveys.
Aclaris sales force successful in generating a significant number of ESKATA pre-orders from targeted accounts ahead of official launch meeting.
Commenced health care provider (HCP) order processing and shipping the week of April 23, 2018.
ESKATA Launch Campaign Highlights:
ESKATA Launch Meeting held April 30May 4, 2018; Unveiled New ESKATA Campaign; sales force trained on new tools and resources to support a successful ESKATA launch.
ESKATA Consumer website (www.eskata.com) launched May 1, 2018; includes Find A Doctor resource for patients seeking ESKATA treatment.
ESKATA HCP website (www.eskatahcp.com) updated with new campaign and downloadable tools/resources for offices.
ESKATA Peer-to-peer Speaker Programs beginning in May 2018.
In March, we announced positive results from the 3-month follow-up portion of the WART-203 Phase 2 clinical trial of A-101 45% Topical Solution (A-101 45%) for the treatment of common warts (verruca vulgaris). We are also advancing our topical Janus kinase (JAK) inhibitor programs, with results from multiple Phase 2 trials expected 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, said Dr. Neal Walker, President and Chief Executive Officer of Aclaris.
Clinical Pipeline Update:
A-101 45% Topical Solution
In March 2018, announced positive results from the 3-month, post-treatment, follow-up evaluation period of the twice-weekly placebo-controlled Phase 2 trial (WART-203) of A-101 45% Topical Solution (A-101 45%), an investigational new drug consisting of a proprietary high-concentration stabilized hydrogen peroxide topical solution being developed as a prescription treatment for common warts (verruca vulgaris).
Over the 3-month post-treatment follow-up period, clinically and statistically significant greater improvements in common wart reduction and clearance vs. placebo were observed among subjects treated with A-101 45%.
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 Candidates
AA-202 Topical an ongoing Phase 2 clinical trial of ATI-502 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 in 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 an ongoing 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. 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, an oral JAK inhibitor for the treatment of AA, which is anticipated to begin in the first half of 2018. This trial will evaluate the effect of two concentrations of ATI-501 on the regrowth of hair in a randomized, double-blinded, parallel-group, vehicle-controlled trial in 120 to 160 patients with AA. This trial will be conducted in the United States and data are expected in mid-2019.
ATI-450 (MK-2 Inhibitor)
Investigational New Drug application on track for submission to the FDA in mid-2019.
Recent Corporate Highlights
Exclusively licensed the Canadian rights to commercialize A-101 40% Topical Solution for the treatment of raised seborrheic keratoses to Cipher Pharmaceuticals.
Appointed Bryan Reasons as a director and Chairman of the Audit Committee.
Liquidity and Capital Resources
As of March 31, 2018, Aclaris had aggregate cash, cash equivalents and marketable securities of $187.0 million compared to $208.9 million as of December 31, 2017. The $21.9 million decrease during the quarter ended March 31, 2018 included:
Net loss of $30.2 million, offset by $5.4 million of non-cash stock-based compensation expense, depreciation and amortization, $2.1 million of net cash provided by changes in operating assets and liabilities, and $0.9 million for a non-cash expense associated with an increase in the fair value of a contingent consideration liability.
$0.3 million of cash used for purchases of property and equipment.
$0.4 million in cash proceeds from the exercise of employee stock options.
Aclaris anticipates that its cash, cash equivalents and marketable securities as of March 31, 2018 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.
First Quarter 2018 Financial Results
Net loss was $30.2 million for the first quarter of 2018, compared to $12.6 million for the first quarter of 2017.
Revenue of $1.1 million and cost of revenue of $1.0 million for the first quarter of 2018 related to Aclariss contract research business acquired in August 2017.
Total operating expenses for the first quarter of 2018 were $31.1 million, compared to $12.9 million for the first quarter of 2017.
Research and development expenses were $13.6 million for the first quarter of 2018, compared to $7.8 million for the first quarter of 2017. The increase of $5.8 million was primarily attributable to a $2.7 million increase in expenses related to the preclinical and clinical development of Aclariss JAK inhibitor portfolio, a $1.3 million increase in medical affairs activities and early-stage drug discovery, a $0.9 million increase in fair value of the contingent consideration liability, a $0.8 million increase in Aclariss A-101 45% topical solution program as Phase 2 clinical trials were initiated in June 2017, and a $0.6 million increase in personnel-related expenses, including stock-based compensation, due to increased headcount. These increases were partially offset by a $0.5 million decrease in ESKATA development expenses in the first quarter of 2018.
Sales and marketing expenses were $11.2 million for the first quarter of 2018, compared to $1.4 million for the first quarter of 2017. The $9.8 million increase is mainly due to increases in direct marketing and professional fees, as well as other sales and marketing expenses of $5.8 million, in preparation for the commercial launch of ESKATA in the second quarter of 2018. Personnel expenses, including stock-based compensation, increased by $4.0 million as Aclaris completed the hiring of its field sales force in the first quarter of 2018.
General and administrative expenses were $6.3 million for the first quarter of 2018, compared to $3.7 million for the first quarter of 2017. The increase of $2.6 million was primarily attributable to $1.6 million in higher personnel-related expenses, including stock-based compensation, due to increased headcount, a $0.4 million increase in professional and legal fees, and a $0.5 million increase in facility, support and other general and administrative expenses.
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