Aclaris Therapeutics(US:ACRS)2020-08-07 11:31Financial Performance - The company reported a net loss of $27.2 million for the six months ended June 30, 2020, and $161.4 million for the year ended December 31, 2019, with an accumulated deficit of $480.7 million as of June 30, 2020[115]. - The company recognized a net loss of $(11.597) million for the three months ended June 30, 2020, compared to a net loss of $(49.876) million for the same period in 2019, an improvement of $38.279 million[146]. - The net loss for the six months ended June 30, 2020, was $27.18 million, a decrease of $60.26 million (68.8%) from a net loss of $87.44 million in the same period of 2019[158]. - Total revenue for the three months ended June 30, 2020, was $2.046 million, up from $0.886 million in 2019, representing an increase of $1.16 million[146]. - Total revenue for the six months ended June 30, 2020, was $3.45 million, an increase of $1.30 million (60.4%) compared to $2.15 million in the same period of 2019[158]. - Contract research revenue increased to $1.9 million for the three months ended June 30, 2020, compared to $0.9 million for the same period in 2019, reflecting a growth of 108.9%[146]. - Contract research revenue increased to $3.04 million for the six months ended June 30, 2020, up from $2.15 million in 2019, representing a growth of 41.4%[159]. - Total costs and expenses decreased to $13.427 million in Q2 2020 from $44.486 million in Q2 2019, a reduction of $31.059 million[146]. - Total costs and expenses decreased to $30.34 million for the six months ended June 30, 2020, down from $72.79 million in 2019, a reduction of $42.45 million (58.3%)[158]. Research and Development - The company is developing ATI-450, an investigational oral drug candidate for rheumatoid arthritis, which demonstrated marked inhibition of pro-inflammatory mediators in a Phase 1 clinical trial involving 77 healthy subjects[106][107]. - A Phase 2a clinical trial for ATI-450 in moderate to severe rheumatoid arthritis was initiated in March 2020, with enrollment temporarily paused due to COVID-19 but resumed in May 2020, with data expected in the first half of 2021[108][119]. - The company plans to initiate a Phase 2a clinical trial of ATI-450 for cryopyrin-associated periodic syndrome (CAPS) in the second half of 2020[110]. - An IND for ATI-1777, a topical JAK inhibitor for atopic dermatitis, was submitted in June 2020, with plans to initiate a Phase 1/2a trial in the second half of 2020[112]. - The company expects to incur significant research and development expenses as it continues to advance its drug candidates, with a focus on ATI-450 and ATI-1777[125]. - The company expects to initiate a Phase 1/2a clinical trial for ATI-1777 in the second half of 2020, indicating ongoing investment in new product development[150]. Operational Expenses - General and administrative expenses are expected to increase due to higher insurance premiums and legal expenses related to ongoing lawsuits[128]. - Research and development expenses significantly decreased to $6.466 million in Q2 2020 from $17.519 million in Q2 2019, a reduction of $11.053 million[150]. - General and administrative expenses decreased to $5.572 million in Q2 2020 from $7.469 million in Q2 2019, a decrease of $1.897 million[151]. - Personnel expenses in general and administrative costs decreased by $465,000 year-over-year due to lower headcount[152]. - Stock-based compensation in general and administrative expenses decreased to $2.118 million in Q2 2020 from $2.654 million in Q2 2019, a reduction of $536,000[151]. - Loss from operations improved to $(11.381) million in Q2 2020, compared to $(43.600) million in Q2 2019, an improvement of $32.219 million[146]. Funding and Capital Structure - The company has historically financed operations through equity sales and loans, and anticipates needing substantial additional funding to support ongoing operations[116]. - The company entered into a Loan and Security Agreement with Silicon Valley Bank for $11.0 million in term loans, fully drawn on March 30, 2020[171]. - The term loan repayment schedule includes interest-only payments until March 1, 2022, followed by 24 equal monthly installments of principal[172]. - The company may raise additional capital through the sale of equity or debt securities, which could dilute stockholders' ownership[185]. - The Loan and Security Agreement with SVB has an annual interest rate of the greater of the prime rate plus 2% or 6.75%, with $11.0 million outstanding as of June 30, 2020[200]. - The company has a debt outstanding of $11.0 million as of June 30, 2020[200]. Market and Economic Conditions - The impact of COVID-19 on clinical trials and development programs remains uncertain, with potential disruptions affecting timelines and operations[120]. - The ongoing COVID-19 pandemic has introduced significant volatility in financial markets, impacting the company's operations and funding requirements[201]. - The primary exposure to market risk is interest rate sensitivity, affected by changes in the general level of U.S. interest rates[199]. - The company does not expect an immediate 10% change in market interest rates to have a material effect on the fair market value of its investment portfolio[199]. - The company has the ability to hold its marketable securities until maturity, mitigating the impact of interest rate changes on operating results[199]. - A 100 basis-point increase in the interest rate on the loan with SVB would result in approximately $0.1 million of additional interest expense on an annualized basis[200]. Strategic Initiatives - The company is pursuing strategic alternatives, including partnerships, to further develop and commercialize its drug candidates and FDA-approved products[114]. - The company announced a strategic review in September 2019, refocusing on immuno-inflammatory development programs and seeking partners for commercial products[168].