ACRS - Aclaris Therapeutics: The Many Lives Of This Biopharmaceutical Developer

2023-09-28 07:18:10 ET

Summary

• Aclaris Therapeutics is a developer of kinome-based medicines for immune-inflammatory and oncology indications.
• The company's platform, KINect, helps advance small molecules targeting kinases to replicate or improve the effects of expensive biologics.
• ACRS has a lead asset, zunsemetinib, in phase 2 trials for rheumatoid arthritis and psoriatic arthritis, with other assets in early stages.
• Aclaris has a history of failures.

Aclaris Therapeutics ( ACRS ) is a developer of kinome based medicines for immune inflammatory and oncology indications. Kinome is the entire set of protein kinase enzymes encoded by an organism's genome. These protein kinases use phosphorylation - the adding of phosphate groups to other proteins - to regulate various cellular processes. Phosphorylation can activate or deactivate target proteins, thereby controlling signaling pathways, cellular responses to stimuli, and numerous biological functions.

The kinome encompasses a diverse group of protein kinases, each with its own specific substrates and functions. These kinases are involved in processes such as cell growth, cell division, immune responses, and the transmission of signals within cells.

ACRS has a platform called KINect that is a kinase discovery engine which helps advance its small molecules targeting these kinases, and which the company intends to replicate or better the effects of expensive biologics. There are over 70 kinase drugs in the market with annual revenue over $48bn, however 90% of the human kinase is unexplored, creating an opportunity.

Here's the company pipeline:

Lead asset zunsemetinib is an MK2 inhibitor. It is an oral small molecule drug in a phase 2b trial targeting moderate to severe rheumatoid arthritis. It is also in a phase 2a trial targeting psoriatic arthritis. Second asset ATI-1777 is a topical "soft" JAK 1/3 inhibitor also in a phase 2b trial targeting moderate to severe atopic dermatitis. Other assets, including the oncology one, are in early stages.

Lead asset zunsemetinib ran a phase 2 trial in hidradenitis suppurativa, which it failed earlier this year. Zunsemetinib failed to meet the primary endpoint of reducing abscesses in patients with moderate to severe hidradenitis suppurativa ((HS)) at week 12, compared with a placebo. It also failed to meet secondary goals like the percentage of patients who achieved at least a 50% reduction in number of inflammatory lesions. Worse, there was an elevation in levels of enzyme creatine phosphokinase in patients with zunsemetinib, compared to competing drugs, which could have safety implications, according to Stifel analyst Alex Thomson, cited in that Reuters report.

For RA, the company published data from the phase 2a trial in 19 subjects in 2021. Data showed durable clinical activity at week 12, and the drug was generally safe and well-tolerated. Primary endpoint was safety. From the TPT software, here's the safety data:

The molecule also demonstrated sustained reduction in DAS28-CRP, and evaluation of ACR20/50/70 responses over 12 weeks. Here's the efficacy "Aclaris Therapeutics Announces Positive Preliminary Topline Data from 12-Week Phase 2a Trial of Oral ATI-450 for Moderate to Severe Rheumatoid Arthritis," although note that the trial was not powered for statistical significance:

In this trial, ATI-450 demonstrated durable clinical activity, as defined by a marked and sustained reduction in DAS28-CRP and evaluation of ACR20/50/70 responses over 12 weeks. The mean change from baseline in DAS28-CRP score at week 12 was a 2.0 reduction in the treatment arm compared to a 0.35 increase in the placebo arm. The proportion of subjects with a DAS28-CRP score at week 12 of ? 3.2 (low disease activity or remission) was 40% and 0% in the treatment and placebo arms, respectively, and the proportion of subjects with a DAS28-CRP score of < 2.6 (remission) was 20% and 0% in the treatment and placebo arms, respectively.

ACR20/50/70 was observed at week 12 in 60%, 33% and 20%, respectively, of the 15 subjects in the treatment arm, and in 0% of the two subjects in the placebo arm. The median reduction from baseline in hsCRP was >40% throughout the 12 weeks of the trial in the treatment arm. A sustained median reduction from baseline in hsCRP was not observed in the placebo arm. An interim analysis (11 treatment, two placebo) of ex vivo stimulated cytokines from blood samples taken from the treatment arm showed a marked and durable inhibition of TNF?, IL1?, IL6, and IL8 over the 12 week dosing period. Similarly, analysis of endogenous cytokines also demonstrated a marked and sustained inhibition of median concentrations of TNF?, IL6, IL8, and MIP1? in the treatment arm over the 12 week period.

The phase 2b study is fully enrolled. The study compares ATI-450 (zunsemetinib) Plus Methotrexate ((MTX)) Versus Placebo Plus MTX in patients who have had an inadequate response to MTX alone. Primary endpoint is "Proportion of patients achieving ACR20 at Week 12 :Baseline to Week 12." Data will be available in Q4. The phase 2b trial of ATI-1777 in atopic dermatitis will also deliver data in the second half of 2023.

Financials

ACRS has a market cap of $469mn and a cash balance of $211mn. Research and development (R&D) expenses were $25.3 million for the quarter ended June 30, 2023, while General and administrative (G&A) expenses were $8.3 million. At that rate, they have a cash runway of 6-7 quarters.

Institutions hold most of ACRS. Wellington, BlackRock and Foresite are the top holders. Insiders used to regularly sell until a few months ago, but lately, there has been a few purchases.

Risks

ACRS has a history of failures and dissipations. There have been trials that failed, like the HS trial we cited, and there have been trials that have just fizzled out, like in the alopecia indication as well as the approved Eskata product, about which FiercePharma once stingingly noted:

FDA promo police spank Aclaris for misleading info in Eskata video

RA may or may not be different, but there's that risk.

Bottom Line

Everything sounds logical until you dig deeper, when you come across abject failures of high potential molecules with science-heavy R&D. ACRS is trading near 52-week lows, and they have two data updates this year. People who are not risk-averse may consider this an opportunity.

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