ACRS - Earnings call transcript Q4 2019 | Aclaris Therapeutics, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Aclaris Therapeutics Fourth Quarter and Full Year 2019 Earnings and Business Update Call. [Operator Instructions]

I'd now like to hand the conference to your speaker today, Kamil Ali-Jackson, Chief Legal Officer. Please go ahead.

Kamil Ali-Jackson

Victor. you, Thank Chief Ali-Jackson, for Aclaris. I’m Legal Kamil Officer issued note year announcing release earlier XXXX Aclaris that today its fourth press Please results. quarter and full

it, release For will at section www.aclaristx.com. of you have website yet those who of our find in posted seen the the Investors not you

and Joining for and Vice Gordon, David our are Medical Officer; the Dr. and Executive Walker, President Development. Officer; me Executive Chief Officer; Research Financial Monahan, today Joe President, our Chief Frank call Neal Ruffo, our Chief

begin we call we of various federal the company’s within like Aclaris’ business remarks, to remind would operations laws. for Before securities objectives position, results future our statements I the make strategy, are prepared meaning you future and forward-looking and operations financial of that about statements and this plans during the considered

operations filed statements. of other filings statements today, of results materially time. to and Aclaris the forward-looking www.aclaristx.com. assumptions, circumstances, results uncertainties Our that XX-K expectations are from based those and financial of in under current management These section from filings Investors SEC with time earlier makes changes and the and Aclaris' the reflected at XX, website December risks to are involve documents analysis Aclaris' cause condition, discussion in year ended risks, such of the SEC Risk of that These actual differ are for available section XXXX Factors Form could the page described and upon in

A update call is and our website. statements otherwise. may of webcast is events advised Please obligation future and conference undertake provided forward-looking in that call the as we on the to webcast. today’s today information this information, of being we on call this to on be section All of posted is no make new account the Investors provide or we recorded any link of

Neal? the CEO President over of Dr. Walker, to and I'll now Neal call turn Aclaris.

Neal Walker

you call thank our on fourth everyone for joining and quarter you, earnings evening. this Thank Kamil us

and transitional XXXX pipeline. capital year was allocation to a in strategy on immuno-inflammatory we focus redefined shifted our our which our

a focused As of $XX company dermatology. XXXX made our from only biopharmaceutical divested all retired RHOFADE, the reminder, on million strategic a debt in shift and we

core immuno-inflammatory focused The our fourth developing kinase inhibitors we’re productive. So competency was particularly now of on diseases. for quarter

reported positive We the warts. two trials common of results from Phase pivotal second from X

be A-XXX potential has both X it common in reminder across warts a significant Positioned this product, As for statistically the through of XXX. studies the will for pursuing if actively pharmacy were with our channel to XX% approved FDA asset. approved, the Phase all traditional NRX use. as distributed endpoint it at first alternatives highly retail product be strategic is convenience and RX home We're the

human trial to our the of and dose single ascending ATI-XXX in now update, molecule multiple immuno-inflammatory completed in recently first with the we’ve inhibitor oral for treatment diseases. small Turning pipeline ascending MKX

and X January, As announced we our SAD/MAD team pipeline preliminary in positive trial. from to results execute of our started XXXX across Phase continues with the

next the conditions potent IL-X one potential a will to us study, in TNF extrapolate the profile by X provide Phase or IL-X. be various to which of IL-X. arthritis, PD IL-X, other into condition of are levels the more with well-characterized The we demonstrated demonstrate of goal to rheumatoid In and high characterized inflammatory will suppression study the that TNF

ATI-XXX immuno-inflammatory a in intend indications. second also to study We

towards advance IND to covalently kinase submissions. bound which our continue ATI-XXXX ITK/TXK/JAKX we inhibitors our addition, In ATI-XXXX and soft-JAK novel is our additional

opportunities targeting multi-billion is efforts dollar immuno-inflammatory R&D in renewed the market. Our

immunology has opportunity to potential landscape. have the and formulations reshape focus unmet believe address to that positioned well Given the in portfolio needs growing the the oral mechanisms approach continued broadly our novel the space, we for immunology and our us

have site class therapeutics assembled use. we oral Turning small or team design our for can innovative, on that now the focused molecule designed to our a specific of targeted be team world objectives, accomplish kinase to

Our Paul have drug leaders for discovery St. Jon in early Walter stage Monahan, Changelian, by development field who been Smith and in Jacobsen this led team many Louis in has years. Joe

complemented is all Wayne team our by later stage This objectives. based strategic our to continued team deliver development have that on in of

are delivering and following accomplishments proud XXXX. We to the in of forward our look team's on catalyst

in the we to XXXX. half of arthritis rheumatoid half X subsequent in For data Phase plan XXXX first trial of readout ATI-XXX, the for of initiate second

For we mid-XXXX ATI-XXXX, plan the of XXXX. IND ITK/TXK/JAKX And and for plan late half in which we XXXX initiate possibly second X/X finally is the our submit soft-JAK ATI-XXXX in in to XXXX. inhibitor, early the IND or Phase submit trial to

any later Frank I financing will activities. the transactions potential with investments, review get the guidance affect this call, XXXX. million and in the is to more gives to that or sufficient in this development $XX want detail year to to and third of no business ended in we As quarter reiterate us cash

I’ll to that, CMO, update off With our handed progress. you R&D Dave, our on it who’ll Dave?

David Gordon

Thanks Neal.

concluding were January. that for as X oral are pleased study We we to small year ATI-XXX, Phase developing the was which a SAD/MAD a was treatment from potential released our ATI-XXX-PKPD-XXX Preliminary end immuno-inflammatory molecule the very diseases. study by for program in data inhibitor MKX

TNF-alpha, healthy that IL-X. all of I but ATI-XXX IL-X So, IL-Xand marked of repeat inhibition in volunteers information, in beta, summary demonstrated won't

most a pharmacokinetics tolerated observed dizziness, upper dose subjects respiratory in of were at It X XX and hours well more adverse or cohorts. all trial by infection, half-life doses the reported MAD was during tract tested who received ATI-XXX two pain to constipation, in with headache, terminal demonstrated the generally common proportional events the ATI-XXX abdominal trial nausea. the

effect drug-drug methotrexate. And interaction or meaningful demonstrated finally with it no food

dose effect RA and appropriate for we the top subjects On in We plan ATI-XXX of believe the the initiate that these trial clinical near of investigation ATI-XXX SAD/MAD RA. of to results, our study, studied the the BID the in the with Phase or basis X rheumatoid milligram dose arthritis the in XX is future. of

this and establish can XX to important XXX reduce over is if most a question patients study maintain in reduction The with inflammation in weeks in RA.

additional proof-of-concept X initiate for immuno-inflammatory to plan an in study ATI-XXX Phase also a indication. We

Moving to JAK soft filing progressing IND the towards in our topical ATI-XXXX, inhibitor mid-XXXX. investigational we're

As a ATI-XXXX dermatitis. of are treatment initiate moderate as plan severe dermatitis trial half a in the Phase in to for developing atopic clinical subjects X/X subjects a reminder, We atopic the potential to second with we XXXX. healthy and

inhibitor Lastly, oral ATI-XXXX we compound. investigational are also our developing ITK/TXK/JAKX

kinases ATI-XXXX T-cell interrupts avoid or T-cell This inflammatory has toxicities of through cells. and and targeted only immune in mechanism bowel mediated as treatment to disease some which inhibitory unique with This specificity diseases. other T-cells ATI-XXXX psoriasis potential and are like such Cyclospora. for pathways immune a be may both of signaling lymphocytes the or expressed targets therapies associated

for IND fourth in first the XXXX We quarter ATI-XXXX expect in the quarter of XXXX. to or an of submit

I update. will microphone now the for pass the financial to Frank

Frank Ruffo

afternoon everyone. Thanks Good David.

walk results and XXXX It financial year quarter found press referenced be release. can I our fourth financial full the As please tables. through in today's

please to our refer today. For filed section MD&A XX-K further Form of the detail

development P&L from product sales details. are our XX line the First footnote about XX-K discontinued our our statements. the our and our and Form in prior from summarized face just Please loss a expenses our refocus of and operations item reference the for strategic on the revenues historical in of as XXXX note year’s current to reminder presentation during programs on financial a decision immuno-inflammatory resources statement result additional

of and had debt. As of $XX and investments million December XXXX, XX, we no cash

full approximately and the were increase our For million $XX.X $X in net The charges million respectively. our amounts year of XXXX, each expenses and of the year Rigel. to for These other result expenses R&D million license the mainly expense with XXXX. of compared $XX.X in in milestone million year of non-cash million agreement $X.X XXXX full to was related in included $X.X

spending. incurred as related in wart and to trials $X.X to ATI-XXX in our the in and increase clinical million - year. our million increase decrease $X.X spending a XXXX, XXX that $X.X expenses we is These were preclinical million by and in Phase prior compared addition offset X for ATI-XXX clinical In ATI-XXX program a development

full each year-on-year other compared the amounts of million year G&A were restructuring respectively. year included increase. million For and for charges XXXX, million and in year These mainly $XX.X XXXX. one-time non-cash of the total full million $XX.X $XX.X for our approximately to account the Personnel $X.X expenses charges

consisted Other of costs and incurred million This was debt XXXX. net interest for in $X.X to for the decrease repaid in subsequently million compared and was full as of XXXX $X.X October year of of XXXX of result expense repayment October income XXXX. the the full on of year outstanding mainly which borrowed of for income our expense

in our in continuing impairment no a $XX.X of full year. the for loss for to such continuing one-time year of from of was compared Our prior was from goodwill full loss recorded is $XX.X $XXX.X XXXX the which million included million charge charges million XXXX. We recorded operations the non-cash operations, XXXX year

sales year to items draw the from Our item discontinued discontinued two $XX.X loss loss full XXXX the your of for $XX.X of main of for We operations disposition in the from XXXX of net operations. $XX.X was to $XX.X recognized recognized just RHOFADE was attention compared million year the charge of million charge in October the in XXXX the for RHOFADE XXXX prior through such included in XXXX its full our non-cash There to assets breakdown year. of related the no intangible impairment results. onetime to line and full of in million and million also

Now switching flow. to cash

considerably XX, XXXX net cash used commercialized experience million in quarter was The average including of in cash during quarterly the operating net December For $XX.X XXXX fourth rate decreased XXXX. the used the to ended early $XX.X operations quarter fourth year the since activities million in we of XXXX. compared as in

our our rate our announcement changes the on business in pipeline. commercial September our exit burn last the and stage sales reflects product cash focus following initial This early to business business

quarter our related Consistent expect our development exited expenses commercial R&D that expenses transitional we pipeline Our current continued in XXXX. most operations spending business late forward be to related on ATI-XXXX. our burn new cash immuno-inflammatory we from programs strategy, to focused to legacy and specifically ATI-XXXX our going that with include and our products will of fourth API-XXX, derm

recent Additionally, as a of September a the the restructuring savings to headcount prior a to anticipate across XXXX. included relative reduction cash which spending result of company, of we significant restructuring XX% our in rate

of of the without any Given effect changes that these cash quarter current XXXX potential or financing strategy anticipate giving business, we to our the capital transactions into activities. business third provide runway will a and our recent development currently

for few closing With turn to call the over I'll a that, back Neal remarks.

Neal Walker

Frank. Thanks

ATI-XXXX. study We getting out reporting clinical for ATI-XXX as forward on progress year to IND also for the look an the and ATI-XXXX work into

So we look everyone as catalyst year busy progress. updating a make we we year, to forward have this when

questions. pool Victor, for can you please

Operator

[Operator from Chen from Cantor our the Louise Instructions] And of line first will be Fitzgerald. participant

begin. may You

Sudan Loganathan

is This for Sudan Louise Chen. Loganathan in

a questions So few have I here.

a as into unique So regarding first that ATI-XXXX, take to what plan inhibitor as that question going atopic indication so forward JAK dermatitis. you makes you

As inhibitors ATI-XXXX know many we other and of factors terms concern JAK potential for with have different that inflammatory then Thanks. target And emulate with is plans been how for thoughts. some forward to will with safety, in there what going targets are as those there that novel a agent - indications MKX changing what has aspect?

Neal Walker

This is the for questions. Thanks Neal.

do XXXX, first so oral let’s an we ruxolitinib. companies have in number a with JAKs both know that topical on has and it's demonstrated topical most that So think shown quite recently atopic well Insight dermatitis important were of that question,

do that actually safety. how XX we to year on looking opportunity or the think months ago was I actually so probably had particularly differentiate identified XX ago at a So we

Knowing inhibitors on on itch, one fact work orally even place very that well do they The safety that in and well can is one topically. the side. JAK quite both differentiate topically,

the action. that JAK by that chose we important that mean X/X we preferentially on also the targeting to factor. to we is we design support of it skin do soft. the at have And because molecule works And So, an be then that, data side

it specific giving plasma, hits and it's once rapidly site exposure. the virtually it no systemic metabolized So

as really of evolving So this of one market is has dermatitis the quite atopic you an think market areas evolves, disproportionately going when skin differentiate the which the places, disrupted that clearly want key to about SKUs a one you that's forward where indication young rapidly. barrier and

we I also do as the thing solution. decided we're an a think well targeting containing that moderate formulation spray is other into to patients and we designed emollient to severe

this, robust over like to the and to an particularly drive a time, In of condition enhance wax more usage wane. compliance in compound and it tends effort

of about doing the market And a it the targets got think you think in XXXX the but that and we've IL-X you So we're lot IL-X is with here MKX inhibitors analogs very front MKX beta, a an biologics the target the on know I there exciting in potent TNF-alpha, dosage oral IL-X things, is form orally. what this when way. these thing that

of inflammatory you target like think TNF-alpha indications the And that that's rheumatoid by like host driven kind at know look through of psoriasis predominately could conditions so when you now that CAPS, know one are of IL-X pericarditis, beta cytokine. anything There are by of a like that hidradenitis. host through that is things driven arthritis, driven we are gout, just these evolving

think I is quite in exciting earlier the that So, already data that given program on particular reported this we year.

Operator

our question of next line from Blair. And from Lugo Tim comes William

begin. may You

Lachlan Hanbury-Brown

This for taking on Thanks questions. is Lachlan for Tim. the

the was we timelines thinking was any portfolio. looking expect if prioritize partnership are update related like. And do How to will going that's an inflammatory to give the expect what wondering for the indications. to this might start? there's to various know just that just you're look could maybe of about when indication could and also First for of and can you legacy have when on how trial you in And at what that other all I discussions secondly they ATI-XXX we the wondering see if you and sense be or anything I near-term BD

Neal Walker

thanks. Sure,

is Dave, Neal maybe process. and again I'll it on BD or off the Joe hand this So to but

not of active comment don't we derm actively discussions our the we and the across core legacy but only also portfolio. across BD derm in So our business, specifics on on legacy business are

interest a - across think been generate able I we've of company. quite the to bit

this the about and the comment can't relative all at other really remain the to and timing that prospects that we excited specifics time. we on So

can at ATI-XXX, regarding what very diversify match targeting a inflammatory one that RA be think the On beta different molecule. things of this looking TNF of mechanistic I alpha, other also is IL-X with the of number trying kind looking are we also a we're that and of we're indications to since driven. things is thoughtful predominantly but cytokines target to

more driven looking of kind we're IL-X So diseases. beta heavily at

then we're when We'll other go it about some basically that indication. mechanism with dosage will enrollment providing this trying show want be that, shortly. on be updating and to be form. the think And target - to to Dave out of thoughts I And just any and going more what is with thoughtful we're that live terms the maybe shortly we specifics everyone on we times, what oral in proving

David Gordon

predominant is then it also end do of some ideas like the I large key well feasibility studies. so these rear and of at I Yes mean, as mean, we’ve one and second RA and - that But started cancer maybe disease being indication along lines. about we've more got which clear as that orphan shouldn't got these by something the indication makes in study into versus obviously as as sense of takes the maybe some disease RA. maybe driven other that consideration a plan be takes you and we're to you the talking sites

making and of are decisions which making initiating are as top decisions are indications, feasible we but about towards that and program, developable good marching So mind.

can an that deliver So efficient program. we

Operator

of Our Instructions] comes [Operator Leerink. question Smith SVB from line next Thomas the from

You may begin.

Thomas Smith

how the Just the class the issue early tachyphylaxis just a of ascending trial, it's of for an Phase other ATI-XXX, you data and the an couple there programs us, inhibitors? X within X with the Phase quickly of for issue any remind been became dose wondering questions Can I'm obviously portion pXX just on clinical evidence in the multiple historically. tachyphylaxis

David Gordon

about by inhibitors effect that very by a evidence is reduction demonstrated place all eight towards comes its to way probably at you if that’s all in is for rheumatoid baseline you two the effect CRP halfway What about And anti-inflammatory consistently CRP look a with weeks. then around and that weeks, back across in four is baseline essentially baseline seen pXX see by of to to weeks. disease. and the in to really the the look back that arthritis nice so it's back then probably pXX Yes, inhibitors best

chance So seeing you beyond go start weeks really two a you tachyphylaxis. have have to before and to

the and to that inhibition show study was look intention the SAD/MAD early is the not investigation, that that good. in kinetics So of look show And the tachyphylaxis. that the investigate stage to into initiate it show good, would to we're safety to question, get that the discharge of risk was that next we exactly about can

showed Just the ATI-XXX confidence, of is mouse preclinical us that any data a chance to study TNF. real. in this were of that associated, discharging supported whereas confidence to reminder we're the support we study some tachyphylaxis we of pXX that data over preclinical really risk. is so inhibitors gives a but compared that the ability that far, has of what have more and about about ATI-XXX being inhibit release was And going of and models some maybe of the where to pXX the potential we - that weeks, the not significant one that at the a four - And excited to

Thomas Smith

thanks. okay just vitiligo? something potentially guess outside ATI-XXXX wondering just - you're thinking on question about how of And Right, other atopic like derm one I opportunities

Neal Walker

the This Neal. Thanks for is question.

of atopic on that I is designed in think now indication. there And approach could that formulation to certainly consider AD. vitiligo. and we're in one we the a think particular this right Certainly very proof it's derm kind targeted we focused

out I to think I think and doing the across the looking vitiligo study at how a at of gate in allocate capital we’re constantly the portfolio moment.

invest. we're because ATI-XXXX going is know place the very be It’s think is immediate which an remember we that to oral to in you probably not valuable plans a

we where of allocate our mindful being just we're so And capital.

now focus on AD. in the I could but So think we're be to for future, that going something

Operator

to time. call at showing Neal remarks. I And like the I'm Walker, over to CEO back you. closing turn not further any for any Thank Dr. this questions

Neal Walker

our Thank throughout Thank us you And everybody you. to we further forward the look for joining on evening. reporting year. this here progress

Operator

this gentlemen today's concludes conference and Ladies participating. you call. for Thank

disconnect. You may now

Aclaris Therapeutics (ACRS) 25 Feb 202019 Q4 Earnings call transcript