Aclaris Therapeutics, Inc 10-Q for FY2021 Q2

Aclaris Therapeutics, Inc. (ACRS)

10-Q 2021-08-05 For: 2021-06-30

Added on April 08, 2026

About this 10-Q

Aclaris Therapeutics, Inc filed this 10-Q on August 5, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.82M; down 10.9% from $2.05M a year earlier
Net loss: $18.16M; compared with a net loss of $11.6M a year earlier

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(Mark one)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Delaware (State or Other Jurisdiction of Incorporation or Organization)	46-0571712 (I.R.S. Employer Identification No.)
640 Lee Road, Suite 200 Wayne, PA (Address of principal executive offices)	19087 (Zip Code)


Title of Each Class:	Trading Symbol(s)	Name of Each Exchange on which Registered
Common Stock, $0.00001 par value	ACRS	The Nasdaq Stock Market, LLC


Large accelerated filer ◻		Accelerated filer ◻

Non-accelerated filer ⌧		Smaller reporting company ☒

		Emerging growth company ☐


			PAGE

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements			2

Unaudited Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020			2

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2021 and 2020			3

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020			4

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020			5

Notes to Unaudited Condensed Consolidated Financial Statements			6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21

Item 3. Quantitative and Qualitative Disclosures about Market Risk			35

Item 4. Controls and Procedures			35

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			36

Item 1A. Risk Factors			37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			37

Item 6. Exhibits			38

Signatures			39


	June 30,		December 31,
	2021		2020

Assets
Current assets:
Cash and cash equivalents	$	113,447	$	22,063
Short-term marketable securities		118,227		32,068
Accounts receivable, net		939		772
Prepaid expenses and other current assets		8,648		2,590
Total current assets		241,261		57,493
Marketable securities		34,503		—
Property and equipment, net		1,287		1,654
Intangible assets		7,086		7,123
Other assets		3,909		4,514
Total assets	$	288,046	$	70,784
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,244	$	5,254
Accrued expenses		6,931		5,906
Current portion of lease liabilities		647		603
Discontinued operations - current liabilities		3,094		3,111
Total current liabilities		14,916		14,874
Other liabilities		2,917		3,179
Long-term debt, net		10,731		10,653
Contingent consideration		25,300		4,061
Deferred tax liability		367		367
Total liabilities		54,231		33,134
Commitments and contingencies (Note 17)
Stockholders’ Equity:
Preferred stock, $0.00001 par value; 10,000,000 shares authorized and no shares issued or outstanding at June 30, 2021 and December 31, 2020		—		—
Common stock, $0.00001 par value; 100,000,000 shares authorized at June 30, 2021 and December 31, 2020; 61,204,987 and 45,109,314 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively		1		—
Additional paid‑in capital		785,455		542,286
Accumulated other comprehensive loss		(184)		(94)
Accumulated deficit		(551,457)		(504,542)
Total stockholders’ equity		233,815		37,650
Total liabilities and stockholders’ equity	$	288,046	$	70,784


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Revenues:
Contract research	$	1,606	$	1,853	$	3,141	$	3,042
Other revenue		218		193		460		411
Total revenue		1,824		2,046		3,601		3,453

Costs and expenses:
Cost of revenue		1,263		1,389		2,465		2,658
Research and development		7,897		6,466		15,735		14,142
General and administrative		5,870		5,572		10,697		11,773
Revaluation of contingent consideration		4,800		—		21,239		1,767
Total costs and expenses		19,830		13,427		50,136		30,340
Loss from operations		(18,006)		(11,381)		(46,535)		(26,887)

Other expense, net		(155)		(189)		(380)		(11)
Loss from continuing operations		(18,161)		(11,570)		(46,915)		(26,898)
Loss from discontinued operations		—		(27)		—		(285)
Net loss	$	(18,161)	$	(11,597)	$	(46,915)	$	(27,183)

Net loss per share, basic and diluted	$	(0.34)	$	(0.28)	$	(0.90)	$	(0.65)
Weighted average common shares outstanding, basic and diluted		53,968,405		42,133,646		52,163,136		41,876,037

Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities, net of tax of $0	$	25	$	(37)	$	(10)	$	23
Foreign currency translation adjustment		(69)		5		(80)		58
Total other comprehensive income (loss)		(44)		(32)		(90)		81
Comprehensive loss	$	(18,205)	$	(11,629)	$	(47,005)	$	(27,102)


						Accumulated
	Common Stock			Additional		Other				Total
		Par		Paid‑in		Comprehensive		Accumulated		Stockholders’
	Shares	Value		Capital		Loss		Deficit		Equity
Balance at December 31, 2020	45,109,314	$	—	$	542,286	$	(94)	$	(504,542)	$	37,650
Issuance of common stock in connection with exercise of stock options and warrants and vesting of restricted stock units	666,144		—		(2,579)		—		—		(2,579)
Issuance of common stock in connection with public offering, net of offering costs of $7,011	6,306,271		—		103,348		—		—		103,348
Unrealized loss on marketable securities	—		—		—		(35)		—		(35)
Foreign currency translation adjustment	—		—		—		(11)		—		(11)
Stock-based compensation expense	—		—		2,675		—		—		2,675
Net loss	—		—		—		—		(28,754)		(28,754)
Balance at March 31, 2021	52,081,729	$	—	$	645,730	$	(140)	$	(533,296)	$	112,294

Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units	1,024,666		—		1,041		—		—		1,041
Issuance of common stock in connection with public offering, net of offering costs of $8,899	8,098,592		1		134,851		—		—		134,852
Unrealized gain on marketable securities	—		—		—		25		—		25
Foreign currency translation adjustment	—		—		—		(69)		—		(69)
Stock-based compensation expense	—		—		3,833		—		—		3,833
Net loss	—		—		—		—		(18,161)		(18,161)
Balance at June 30, 2021	61,204,987	$	1	$	785,455	$	(184)	$	(551,457)	$	233,815


	June 30, 2021
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	103,855	$	—	$	—	$	103,855
Marketable securities		—		152,730		—		152,730
Total assets	$	103,855	$	152,730	$	—	$	256,585


Liabilities:
Contingent consideration	$	—	$	—	$	25,300	$	25,300
Total liabilities	$	—	$	—	$	25,300	$	25,300


	December 31, 2020
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	14,955	$	1,500	$	—	$	16,455
Marketable securities		—		32,068		—		32,068
Total assets	$	14,955	$	33,568	$	—	$	48,523


Liabilities:
Contingent consideration	$	—	$	—	$	4,061	$	4,061
Total liabilities	$	—	$	—	$	4,061	$	4,061


	June 30, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gain		Loss		Value
Marketable securities:
Corporate debt securities	$	28,548	$	3	$	(7)	$	28,544
Commercial paper		70,518		—		—		70,518
Asset-backed debt securities		30,951		1		(7)		30,945
U.S. government agency debt securities		22,721		3		(1)		22,723
Total marketable securities	$	152,738	$	7	$	(15)	$	152,730


		Gross Cost				Accumulated Amortization
	Remaining		June 30,		December 31,		June 30,		December 31,
(In thousands, except years)	Life (years)	2021		2020		2021		2020
Other intangible assets	6.1	$	751	$	751	$	294	$	257
In-process research and development	n/a		6,629		6,629		—		—
Total intangible assets		$	7,380	$	7,380	$	294	$	257


		Year Ending
(In thousands)		December 31,
2021	$	37
2022		75
2023		75
2024		75
2025		75
Thereafter		120
Total	$	457


				Weighted
		Weighted		Average
		Average		Remaining	Aggregate
	Number	Exercise		Contractual	Intrinsic
(In thousands, except share and per share data and years)	of Shares	Price		Term	Value
				(in years)
Outstanding as of December 31, 2020	2,871,498	$	15.16	6.8	$	4,890
Granted	993,600		23.88
Exercised	(115,548)		12.63		$	1,373
Forfeited and cancelled	(10,925)		21.78
Outstanding as of June 30, 2021	3,738,625	$	17.54	7.2	$	17,541
Options vested and expected to vest as of June 30, 2021	3,738,625	$	17.54	7.2	$	17,541
Options exercisable as of June 30, 2021	2,044,235	$	17.51	5.8	$	10,090


		Weighted
		Average
		Grant Date		Aggregate
	Number	Fair Value		Intrinsic
(In thousands, except share and per share data)	of Shares	Per Share		Value
Outstanding as of December 31, 2020	2,244,157	$	3.83
Granted	607,148		24.00
Vested	(1,314,214)		2.87	$	31,049
Forfeited and cancelled	(38,375)		6.86
Outstanding as of June 30, 2021	1,498,716	$	12.76


	Six Months Ended
	June 30,
	2021		2020
Cash flows from operating activities:
Net loss	$	(46,915)	$	(27,183)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		535		1,182
Stock-based compensation expense		6,507		6,762
Revaluation of contingent consideration		21,239		1,767
Changes in operating assets and liabilities:
Accounts receivable		(167)		4,895
Prepaid expenses and other assets		(5,223)		890
Accounts payable		(1,290)		(6,026)
Accrued expenses		861		87
Net cash used in operating activities		(24,453)		(17,626)
Cash flows from investing activities:
Purchases of property and equipment		(52)		(141)
Purchases of marketable securities		(147,289)		(27,139)
Proceeds from sales and maturities of marketable securities		26,557		30,735
Net cash provided by (used in) investing activities		(120,784)		3,455
Cash flows from financing activities:
Proceeds from issuance of common stock in connection with public offerings, net of issuance costs		238,200		—
Proceeds from debt financing (including warrants), net of issuance costs		—		10,913
Restricted stock unit employee tax withholdings		(3,038)		—
Finance lease payments		—		(92)
Proceeds from exercise of employee stock options and the issuance of stock		1,459		—
Net cash provided by financing activities		236,621		10,821
Net increase (decrease) in cash, cash equivalents and restricted cash		91,384		(3,350)
Cash, cash equivalents and restricted cash at beginning of period		22,063		35,937
Cash, cash equivalents and restricted cash at end of period	$	113,447	$	32,587

Supplemental disclosure of non-cash investing and financing activities:
Additions to property and equipment included in accounts payable	$	37	$	339
Fair value of warrants issued in connection with debt financing	$	—	$	378
Offering costs included in accounts payable	$	28	$	—


		June 30,		December 31,
(In thousands)	2021		2020
Computer equipment	$	1,232	$	1,197
Lab equipment		1,354		1,340
Furniture and fixtures		620		617
Leasehold improvements		1,123		1,123
Property and equipment, gross		4,329		4,277
Accumulated depreciation		(3,042)		(2,623)
Property and equipment, net	$	1,287	$	1,654


	Six Months Ended
	June 30,
	2021		2020
Risk-free interest rate	0.91	%	0.87	%
Expected term (in years)	6.2		6.1
Expected volatility	76.60	%	85.19	%
Expected dividend yield	0	%	0	%


(In thousands)			Contract		Corporate		Total
Three Months Ended June 30, 2021	Therapeutics		Research		and Other		Company
Total revenue	$	218	$	3,481	$	(1,875)	$	1,824
Cost of revenue		—		3,024		(1,761)		1,263
Research and development		8,011		—		(114)		7,897
General and administrative		—		879		4,991		5,870
Revaluation of contingent consideration		4,800		—		—		4,800
Loss from operations	$	(12,593)	$	(422)	$	(4,991)	$	(18,006)

(In thousands)			Contract		Corporate		Total
Three Months Ended June 30, 2020	Therapeutics		Research		and Other		Company
Total revenue	$	193	$	3,657	$	(1,804)	$	2,046
Cost of revenue		—		3,082		(1,693)		1,389
Research and development		6,577		—		(111)		6,466
General and administrative		—		688		4,884		5,572
Loss from operations	$	(6,384)	$	(113)	$	(4,884)	$	(11,381)
Loss from discontinued operations	$	(27)	$	—	$	—	$	(27)

(In thousands)			Contract		Corporate		Total
Six Months Ended June 30, 2021	Therapeutics		Research		and Other		Company
Total revenue	$	460	$	6,681	$	(3,540)	$	3,601
Cost of revenue		—		5,793		(3,328)		2,465
Research and development		15,946		—		(211)		15,735
General and administrative		—		1,507		9,190		10,697
Revaluation of contingent consideration		21,239		—		—		21,239
Loss from operations	$	(36,725)	$	(619)	$	(9,191)	$	(46,535)

(In thousands)			Contract		Corporate		Total
Six Months Ended June 30, 2020	Therapeutics		Research		and Other		Company
Total revenue	$	411	$	7,064	$	(4,022)	$	3,453
Cost of revenue		—		6,468		(3,810)		2,658
Research and development		14,354		—		(212)		14,142
General and administrative		—		1,440		10,333		11,773
Revaluation of contingent consideration		1,767		—		—		1,767
Loss from operations	$	(15,710)	$	(844)	$	(10,333)	$	(26,887)
Loss from discontinued operations	$	(284)	$	—	$	(1)	$	(285)


	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2021		2020		Change		2021		2020		Change
Revenues:
Contract research	$	1,606	$	1,853	$	(247)	$	3,141	$	3,042	$	99
Other revenue		218		193		25		460		411		49
Total revenue		1,824		2,046		(222)		3,601		3,453		148

Costs and expenses:
Cost of revenue		1,263		1,389		(126)		2,465		2,658		(193)
Research and development		7,897		6,466		1,431		15,735		14,142		1,593
General and administrative		5,870		5,572		298		10,697		11,773		(1,076)
Revaluation of contingent consideration		4,800		—		4,800		21,239		1,767		19,472
Total costs and expenses		19,830		13,427		6,403		50,136		30,340		19,796
Loss from operations		(18,006)		(11,381)		(6,625)		(46,535)		(26,887)		(19,648)

Other expense, net		(155)		(189)		34		(380)		(11)		(369)
Loss from continuing operations		(18,161)		(11,570)		(6,591)		(46,915)		(26,898)		(20,017)
Loss from discontinued operations		—		(27)		27		—		(285)		285
Net loss	$	(18,161)	$	(11,597)	$	(6,564)	$	(46,915)	$	(27,183)	$	(19,732)


Exhibit No.		Document

3.1		Amended and Restated Certificate of Incorporation of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37581), filed with the SEC on October 13, 2015).

3.2		Amended and Restated Bylaws of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37581), filed with the SEC on June 24, 2020).

10.1*		Fifth Amended and Restated Non-Employee Director Compensation Policy.

10.2		Sales Agreement, dated May 20, 2021, by and among the Registrant, SVB Leerink LLC and Cantor Fitzgerald & Co. (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37581), filed with the SEC on May 20, 2021).

31.1*		Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act.

31.2*		Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act.

32.1**		Certifications of Principal Executive Officer and Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act.

101.INS		XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


*	Filed herewith.
**	These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.


	ACLARIS THERAPEUTICS, INC.

Date: August 5, 2021	By:	/s/ Neal Walker
		Neal Walker
		President and Chief Executive Officer
		(On behalf of the Registrant)


Date: August 5, 2021	By:	/s/ Frank Ruffo
		Frank Ruffo
		Chief Financial Officer
		(Principal Financial Officer)