Aclaris Therapeutics(ACRS) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements The company reported a $15.4 million net loss in Q2 2025, with total assets decreasing to $189.1 million due to operational cash usage Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $25,402 | $24,570 | | Marketable securities (Short-term & Long-term) | $155,488 | $179,326 | | Total current assets | $104,202 | $125,951 | | Total assets | $189,147 | $220,327 | | Liabilities & Equity | | | | Total current liabilities | $26,839 | $31,596 | | Total liabilities | $57,408 | $64,773 | | Accumulated deficit | $(933,375) | $(902,861) | | Total stockholders' equity | $131,739 | $155,554 | Condensed Consolidated Statements of Operations and Comprehensive Loss Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $1,777 | $2,766 | $3,232 | $5,163 | | Research and development | $11,449 | $8,759 | $23,033 | $18,604 | | General and administrative | $5,386 | $4,752 | $11,525 | $11,596 | | Loss from operations | $(18,408) | $(12,854) | $(36,492) | $(31,786) | | Net loss | $(15,429) | $(10,986) | $(30,514) | $(27,927) | | Net loss per share | $(0.13) | $(0.15) | $(0.25) | $(0.39) | Condensed Consolidated Statements of Cash Flows Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(23,050) | $(33,137) | | Net cash provided by investing activities | $24,166 | $16,159 | | Net cash used in financing activities | $(284) | $(66) | | Net increase (decrease) in cash | $832 | $(17,044) | | Cash and cash equivalents at end of period | $25,402 | $22,834 | Notes to Unaudited Condensed Consolidated Financial Statements - The company is a clinical-stage biopharmaceutical firm focused on immuno-inflammatory diseases, utilizing its proprietary KINect drug discovery platform[19] - As of June 30, 2025, the company had cash, cash equivalents, and marketable securities of $180.9 million and an accumulated deficit of $933.4 million. Management believes existing cash is sufficient to fund operations for more than 12 months[20][22] - The fair value of the contingent consideration liability related to the Confluence acquisition increased by $1.8 million during the first six months of 2025, primarily due to changes in the probability of success for certain product candidates and lower discount rates[43][81] - In June 2025, stockholders approved an increase in authorized common stock from 200 million to 400 million shares[50] - The company has two reportable segments: therapeutics, which focuses on developing innovative therapies, and contract research, which provides laboratory services[89] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Advancing key product candidates, the company saw R&D expenses rise to $23.0 million in H1 2025, with $180.9 million in liquidity Our Key Product Candidates - Bosakitug (ATI-045): An anti-TSLP monoclonal antibody. A Phase 2 trial in moderate to severe atopic dermatitis was initiated in June 2025, with top-line data expected in the second half of 2026[100][103] - ATI-2138: An oral ITK/JAK3 inhibitor. Announced positive top-line results from a Phase 2a trial in atopic dermatitis in July 2025. The company intends to further develop it for alopecia areata[105][106][107] - ATI-052: An anti-TSLP and anti-IL-4R bispecific antibody. An IND was cleared in April 2025, and a Phase 1a/1b program was initiated in June 2025. Top-line data from the Phase 1a portion is expected in early 2026[108][109][110] - Lepzacitinib (ATI-1777): A topical "soft" JAK 1/3 inhibitor. The company is seeking a global development and commercialization partner for this program following positive Phase 2b results[111][113] Results of Operations - Total revenue decreased by $1.0 million for Q2 2025 and $1.9 million for the six months ended June 30, 2025, compared to the same periods in 2024. The decline was primarily due to lower licensing revenue following the sale of a portion of OLUMIANT® royalty payments[159][161] Research & Development Expenses by Program (in thousands) | Program | 6 Months 2025 | 6 Months 2024 | Change | | :--- | :--- | :--- | :--- | | Bosakitug | $6,231 | $0 | $6,231 | | ATI-2138 | $2,926 | $815 | $2,111 | | ATI-052 | $2,037 | $0 | $2,037 | | Zunsemetinib | $216 | $4,514 | $(4,298) | | Lepzacitinib | $0 | $1,368 | $(1,368) | | Total R&D Expenses | $23,033 | $18,604 | $4,429 | - The increase in R&D expenses for the six months ended June 30, 2025 was driven by manufacturing and clinical development costs for Bosakitug, ATI-2138, and ATI-052, offset by decreased spending on Zunsemetinib and Lepzacitinib[164][165][166][168] Liquidity and Capital Resources - As of June 30, 2025, the company had $180.9 million in cash, cash equivalents, and marketable securities[179] - Net cash used in operating activities decreased to $23.1 million for the first six months of 2025, compared to $33.1 million for the same period in 2024, primarily due to a decrease in cash used for accounts payable and accrued expenses[182][183] - The company believes its existing cash, cash equivalents, and marketable securities are sufficient to fund operating and capital expenditure requirements for more than 12 months from the issuance date of this report[189] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Aclaris Therapeutics is not required to provide this information - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information under this item[201] Item 4. Controls and Procedures Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal controls - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025[202] - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[203] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings or aware of any threatened actions - The company is not currently a party to any material legal proceedings[204] Item 1A. Risk Factors There have been no material changes to the company's risk factors from those described in its Annual Report on Form 10-K - The company's risk factors have not changed materially from those described in its Annual Report[205] Item 5. Other Information No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[207] Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including certificates of incorporation and officer certifications