On August 7, 2024 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 second quarter of 2024 and provided a corporate update (Press release, Aclaris Therapeutics, AUG 7, 2024, View Source [SID1234645482]).

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"With study activities underway for our ATI-2138 Phase 2a trial in moderate to severe atopic dermatitis and the strengthening of our balance sheet through the completion of our royalty purchase agreement with OMERS, we’re well-positioned to drive our strategic initiatives forward," said Dr. Neal Walker, Interim President & CEO and Chair of the Board of Directors of Aclaris. "Our focus remains on leveraging our resources to maximize the potential of our innovative drug candidates, pursue available opportunities, and create long-term value for patients and shareholders alike."

Research and Development Highlights:

ITK Inhibitor Programs
ATI-2138, an investigational oral covalent ITK/JAK3 inhibitor
ATI-2138-AD-201: Aclaris is activating clinical sites and expects to enroll patients in the coming weeks in this Phase 2a open-label trial to investigate the safety, tolerability, pharmacokinetics, efficacy, and pharmacodynamics of ATI-2138 in subjects with moderate to severe atopic dermatitis (AD).
ITK Selective Compound
Aclaris is progressing to development candidate selection a second generation ITK selective inhibitor for autoimmune indications.
Lepzacitinib (ATI-1777), an investigational topical "soft" JAK 1/3 inhibitor
In January 2024, Aclaris reported positive top-line results from its Phase 2b trial of lepzacitinib in atopic dermatitis (AD).
Aclaris is currently seeking a global development and commercialization partner for this program (excluding Greater China). As previously announced, in 2022 Aclaris granted Pediatrix Therapeutics exclusive rights to develop and commercialize lepzacitinib in Greater China.
Zunsemetinib (ATI-450), an investigational oral small molecule MK2 inhibitor
Aclaris plans to support Washington University in St. Louis in its investigator-initiated Phase 1b/2 trials of zunsemetinib as a potential treatment for pancreatic cancer and metastatic breast cancer. Aclaris expects these trials to be primarily funded by grants awarded to Washington University.
Financial Highlights:

Liquidity and Capital Resources

As of June 30, 2024, Aclaris had aggregate cash, cash equivalents and marketable securities of $149.9 million compared to $181.9 million as of December 31, 2023. In July 2024, Aclaris received an upfront payment of $26.5 million and is eligible to receive up to an additional $5.0 million upon the achievement of certain sales milestones in connection with the sale of OLUMIANT royalties and milestones to OMERS Life Sciences.

Aclaris anticipates that its cash, cash equivalents and marketable securities as of June 30, 2024 in combination with the $26.5 million from the sale of OLUMIANT royalties and milestones will be sufficient to fund its operations into 2028, without giving effect to any potential new business development transactions, additional financing activities or the outcome of its strategic review.

Financial Results

Second Quarter 2024

Net loss was $11.0 million for the second quarter of 2024 compared to $29.6 million for the second quarter of 2023.
Total revenue was $2.8 million for the second quarter of 2024 compared to $1.9 million for the second quarter of 2023. The increase was primarily driven by an increase in royalties under the Lilly license agreement during the three months ended June 30, 2024.
Research and development (R&D) expenses were $8.8 million for the quarter ended June 30, 2024 compared to $25.3 million for the prior year period.
The $16.5 million decrease was primarily the result of lower:
Zunsemetinib development expenses associated with clinical activities for a Phase 2a trial for hidradenitis suppurativa which was completed in March 2023, a Phase 2b trial for rheumatoid arthritis which was completed in November 2023, a Phase 2b trial for psoriatic arthritis which was discontinued in December 2023, and drug candidate manufacturing costs;
Costs associated with lepzacitinib preclinical development activities and a Phase 2b clinical trial for AD which was completed in January 2024;
ATI-2138 development expenses, including costs associated with a Phase 1 MAD trial which was completed in September 2023 and other preclinical activities; and
Compensation-related expenses due to a decrease in headcount and higher forfeiture credits.
General and administrative (G&A) expenses were $4.8 million for the quarter ended June 30, 2024 compared to $8.3 million for the prior year period. The decrease was primarily due to a reduction in compensation-related expenses due to lower headcount and higher forfeiture credits, along with the recognition of bad debt expense recorded in the prior year period from Aclaris’ determination that collection of amounts due from EPI Health are uncertain as a result of their filing for Chapter 11 bankruptcy protection.
Licensing expenses were $1.3 million for the quarter ended June 30, 2024 compared to $0.6 million for the prior year period. The increase was due to an increase in royalties earned under the Lilly license agreement.
Revaluation of contingent consideration resulted in a $0.2 million loss for the quarter ended June 30, 2024 compared to a gain of $1.5 million for the prior year period.
Year-to-date 2024

Net loss was $27.9 million for the six months ended June 30, 2024 compared to $57.7 million for the six months ended June 30, 2023.
Total revenue was $5.2 million for the six months ended June 30, 2024 compared to $4.4 million for the six months ended June 30, 2023. The increase was primarily driven by an increase in royalties under the Lilly license agreement during the six months ended June 30, 2024.
R&D expenses were $18.6 million for the six months ended June 30, 2024 compared to $47.9 million for the prior year period.
The $29.3 million decrease was primarily the result of lower:
Zunsemetinib development expenses associated with clinical activities for a Phase 2a trial for hidradenitis suppurativa which was completed in March 2023, a Phase 2b trial for rheumatoid arthritis which was completed in November 2023, a Phase 2b trial for psoriatic arthritis which was discontinued in December 2023, and drug candidate manufacturing costs;
Costs associated with lepzacitinib preclinical development activities and a Phase 2b clinical trial for AD which was completed in January 2024;
ATI-2138 development expenses, including costs associated with a Phase 1 MAD trial which was completed in September 2023 and other preclinical activities; and
Compensation-related expenses due to a decrease in headcount and higher forfeiture credits.
G&A expenses were $11.6 million for the six months ended June 30, 2024 compared to $17.1 million for the prior year period. The decrease was primarily due to a reduction in compensation-related expenses due to lower headcount and higher forfeiture credits, a decrease in patent, legal and accounting related expenses, and the recognition of bad debt expense recorded in the prior year period from Aclaris’ determination that collection of amounts due from EPI Health are uncertain as a result of their filing for Chapter 11 bankruptcy protection.
Licensing expenses were $2.3 million for the six months ended June 30, 2024 compared to $1.6 million for the prior year period. The increase was due to an increase in royalties earned under the Lilly license agreement.
Revaluation of contingent consideration resulted in a $3.0 million loss for the six months ended June 30, 2024 compared to a gain of $2.3 million for the prior year period.
OLUMIANT is a registered trademark of Eli Lilly and Company.