In a June 16 research note, analyst Ram Selvaraju reported that H.C. Wainwright & Co. raised its price target on Aclaris Therapeutics Inc. (ACRS:NASDAQ) to $50 per share from $40 after the biopharma announced positive topline results from its trial of ATI-1777 in moderate to severe atopic dermatitis. In comparison, Aclaris is now trading at about $17.32 per share.
"In the wake of these positive results, we increase our probability of approval to 30% from the previous 20% for ATI-1777," Selvaraju added. "This change has resulted in an increase in our total firm value to $3.2 billion versus the previous $2.2 billion."
The analyst reviewed the results from this Phase 2a trial, in which Aclaris evaluated efficacy, safety, tolerability and pharmacokinetics of ATI-1777, a JAK 1/3 inhibitor.
Data showed ATI-1777 to be tolerated, safe and not associated with any adverse events, Selvaraju noted, and the "pharmacokinetics validated skin sequestration of ATI-1777." These characteristics, he added, differentiate ATI-1777 from other orally and topically administered JAK inhibitors that are pharmacokinetically different.
Trial results also showed "impactful efficacy, despite a relatively small clinical trial size" (50 patients), Selvaraju wrote. Patients who used ATI-1777 showed a statistically significant (p<0.001) drop, 74.4%, in their modified Eczema Area and Severity Index (mEASI) score at four weeks from baseline whereas patients who used a vehicle demonstrated a 41.4% reduction. The percentage change in mEASI score from baseline was the study's primary endpoint.
Additionally, a subsequent analysis that included the two randomized patients not in the initial data set demonstrated a statistically significant result (p=0.002). Aclaris originally excluded these two patients from its full analysis of 23 ATI-1777 patients and 25 vehicle patients because they did not return for follow-up after the initial visit and lacked an official record showing receipt of at least one ATI-1777 dose.
ATI-1777 was shown to "trend in favor" of the secondary endpoints, Selvaraju relayed, noting the study was not designed to detect a statistically significant outcome for them. These endpoints included improvement in itchiness, immunoglobulin-A response, percentage of mEASI responders and reduction in body surface area impacted by disease.
In other news, Selvaraju reported, Aclaris completed a follow-on equity financing that generated about $135 million in net proceeds. This gives the biopharma enough funds to advance ATI-1777 through a Phase 2b study, likely to start later this year or early next, as well as ATI-450.
"We anticipate the company will reach the midpoint of 2021 with roughly $260 million in cash and cash equivalents, which in our view could fund operations well into 2024," Selvaraju wrote.
H.C. Wainwright has a Buy rating on Aclaris Therapeutics.
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Disclosures from H.C. Wainwright & Co., Aclaris Therapeutics, Inc., Target Price Revision, June 16, 2021
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Raghuram Selvaraju, Ph.D. and Boobalan Pachaiyappan, Ph.D. , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of Aclaris Therapeutics, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of May 31, 2021 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Aclaris Therapeutics, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The firm or its affiliates received compensation from Aclaris Therapeutics, Inc. for non-investment banking services in the previous 12 months.
The Firm or its affiliates did receive compensation from Aclaris Therapeutics, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Aclaris Therapeutics, Inc. during the past 12 months.
The Firm does not make a market in Aclaris Therapeutics, Inc. as of the date of this research report.
