HC Wainwright Downgrades Aclaris Therapeutics Inc Following Phase 2b Trial Results
Aclaris Therapeutics Inc (NASDAQ: ACRS) recently received a downgrade from HC Wainwright after releasing the topline results from its Phase 2b study of ATI-1777, an investigational topical “soft” JAK 1/3 inhibitor, in patients with mild to severe atopic dermatitis (eczema). The trial showed promising results, but there were some concerns regarding its commercial potential and competition in the market.
The primary efficacy endpoint of the trial was the percent change from baseline in the Eczema Area and Severity Index (EASI) score at week 4. The results showed statistical significance for patients treated with ATI-1777 2% twice-daily (BID) compared to those treated with the vehicle. However, the once-daily (QD) treatment did not demonstrate statistically superior effectiveness compared to the placebo.
HC Wainwright’s analysts, Raghuram Selvaraju and Boobalan Pachaiyappan, downgraded Aclaris Therapeutics’ stock from Buy to Neutral based on these findings. They noted that the marginal difference in the primary endpoint between the twice-daily treatment and placebo, as well as the lack of statistical superiority for the once-daily treatment, raised concerns about the commercial potential of ATI-1777.
Furthermore, the analysts highlighted the competitive landscape in the atopic dermatitis market, particularly the presence of Dupixent (dupilumab) from Sanofi SA (NASDAQ: SNY) and Regeneron Pharmaceuticals Inc (NASDAQ: REGN). Dupilumab is a well-established treatment with an impressive efficacy profile. Its dosing regimen of twice-monthly subcutaneous injections is considered less burdensome compared to a twice-daily topical product like ATI-1777. HC Wainwright also mentioned other marketed drugs that appear to be equally effective as ATI-1777.
Aclaris Therapeutics plans to seek a partner for the continued clinical development of ATI-1777. If a partnership is established, the company’s rating and valuation will be reassessed. However, HC Wainwright believes that developing and successfully commercializing a twice-daily topical treatment for atopic dermatitis may be challenging, especially if it is not considered best-in-class.
Despite the downgrade, ACRS shares saw a 9.2% increase on Monday, reaching $1.24. Investors may still see potential in Aclaris Therapeutics and its future prospects. However, the concerns raised by HC Wainwright highlight the competitive nature of the atopic dermatitis market and the need for innovative and superior treatments to succeed.
