Aclaris Therapeutics, Inc 10-Q for FY2021 Q3

Aclaris Therapeutics, Inc. (ACRS)

10-Q 2021-11-02 For: 2021-09-30

Added on April 08, 2026

About this 10-Q

Aclaris Therapeutics, Inc filed this 10-Q on November 2, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

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

Revenue: $1.66M; up 14.5% from $1.45M a year earlier
Net loss: $21.15M; compared with a net loss of $10.66M 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 September 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 September 30, 2021 and December 31, 2020			2

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

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

Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 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			20

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			37

Signatures			39


	September 30,		December 31,
	2021		2020

Assets
Current assets:
Cash and cash equivalents	$	53,602	$	22,063
Short-term marketable securities		144,280		32,068
Accounts receivable, net		811		772
Prepaid expenses and other current assets		7,089		2,590
Total current assets		205,782		57,493
Marketable securities		45,735		—
Property and equipment, net		1,170		1,654
Intangible assets		7,067		7,123
Other assets		3,740		4,514
Total assets	$	263,494	$	70,784
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	7,564	$	5,254
Accrued expenses		7,408		5,906
Current portion of lease liabilities		669		603
Discontinued operations - current liabilities		2,198		3,111
Total current liabilities		17,839		14,874
Other liabilities		2,507		3,179
Long-term debt, net		—		10,653
Contingent consideration		26,200		4,061
Deferred tax liability		367		367
Total liabilities		46,913		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 September 30, 2021 and December 31, 2020		—		—
Common stock, $0.00001 par value; 100,000,000 shares authorized at September 30, 2021 and December 31, 2020; 61,226,750 and 45,109,314 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		1		—
Additional paid‑in capital		789,186		542,286
Accumulated other comprehensive loss		(3)		(94)
Accumulated deficit		(572,603)		(504,542)
Total stockholders’ equity		216,581		37,650
Total liabilities and stockholders’ equity	$	263,494	$	70,784


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Revenues:
Contract research	$	1,415	$	1,331	$	4,556	$	4,373
Other revenue		244		118		704		529
Total revenue		1,659		1,449		5,260		4,902

Costs and expenses:
Cost of revenue		1,099		1,189		3,564		3,847
Research and development		13,976		6,240		29,711		20,382
General and administrative		5,979		3,859		16,676		15,632
Revaluation of contingent consideration		900		626		22,139		2,393
Total costs and expenses		21,954		11,914		72,090		42,254
Loss from operations		(20,295)		(10,465)		(66,830)		(37,352)

Other expense, net		(851)		(194)		(1,231)		(205)
Loss from continuing operations		(21,146)		(10,659)		(68,061)		(37,557)
Loss from discontinued operations		—		—		—		(285)
Net loss	$	(21,146)	$	(10,659)	$	(68,061)	$	(37,842)

Net loss per share, basic and diluted	$	(0.35)	$	(0.25)	$	(1.23)	$	(0.90)
Weighted average common shares outstanding, basic and diluted		61,219,321		42,802,582		55,215,037		42,187,140

Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities, net of tax of $0	$	5	$	(24)	$	(5)	$	(1)
Foreign currency translation adjustment		176		(36)		96		22
Total other comprehensive income (loss)		181		(60)		91		21
Comprehensive loss	$	(20,965)	$	(10,719)	$	(67,970)	$	(37,821)


						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

Issuance of common stock in connection with vesting of restricted stock units	21,763		—		29		—		—		29
Unrealized gain on marketable securities	—		—		—		5		—		5
Foreign currency translation adjustment	—		—		—		176		—		176
Stock-based compensation expense	—		—		3,702		—		—		3,702
Net loss	—		—		—		—		(21,146)		(21,146)
Balance at September 30, 2021	61,226,750	$	1	$	789,186	$	(3)	$	(572,603)	$	216,581


	September 30, 2021
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents	$	50,631	$	—	$	—	$	50,631
Marketable securities		—		190,015		—		190,015
Total assets	$	50,631	$	190,015	$	—	$	240,646


Liabilities:
Contingent consideration	$	—	$	—	$	26,200	$	26,200
Total liabilities	$	—	$	—	$	26,200	$	26,200


	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


	September 30, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(In thousands)	Cost		Gain		Loss		Value
Marketable securities:
Corporate debt securities	$	36,725	$	3		(10)	$	36,718
Commercial paper		81,828		—		—		81,828
Asset-backed debt securities		37,229		3		(7)		37,225
Foreign government agency debt securities		4,112		—		(2)		4,110
U.S. government agency debt securities		30,124		10		—		30,134
Total marketable securities	$	190,018	$	16	$	(19)	$	190,015


		Gross Cost				Accumulated Amortization
	Remaining		September 30,		December 31,		September 30,		December 31,
(In thousands, except years)	Life (years)	2021		2020		2021		2020
Other intangible assets	5.8	$	751	$	751	$	313	$	257
In-process research and development	n/a		6,629		6,629		—		—
Total intangible assets		$	7,380	$	7,380	$	313	$	257


		Year Ending
(In thousands)		December 31,
2021	$	18
2022		75
2023		75
2024		75
2025		75
Thereafter		120
Total	$	438


				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	1,013,600		23.73
Exercised	(115,548)		12.63		$	1,373
Forfeited and cancelled	(25,825)		22.77
Outstanding as of September 30, 2021	3,743,725	$	17.51	7.0	$	18,150
Options vested and expected to vest as of September 30, 2021	3,743,725	$	17.51	7.0	$	18,150
Options exercisable as of September 30, 2021	2,177,823	$	17.85	5.6	$	10,517


		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	629,348		23.72
Vested	(1,339,625)		3.18	$	31,486
Forfeited and cancelled	(67,917)		10.06
Outstanding as of September 30, 2021	1,465,963	$	12.67


		September 30,		December 31,
(In thousands)	2021		2020
Computer equipment	$	1,253	$	1,197
Lab equipment		1,389		1,340
Furniture and fixtures		620		617
Leasehold improvements		1,123		1,123
Property and equipment, gross		4,385		4,277
Accumulated depreciation		(3,215)		(2,623)
Property and equipment, net	$	1,170	$	1,654


	Nine Months Ended
	September 30,
	2021		2020
Risk-free interest rate	0.90	%	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 September 30, 2021	Therapeutics		Research		and Other		Company
Total revenue	$	244	$	3,335	$	(1,920)	$	1,659
Cost of revenue		—		2,912		(1,813)		1,099
Research and development		14,083		—		(107)		13,976
General and administrative		—		837		5,142		5,979
Revaluation of contingent consideration		900		—		—		900
Loss from operations	$	(14,739)	$	(414)	$	(5,142)	$	(20,295)

(In thousands)			Contract		Corporate		Total
Three Months Ended September 30, 2020	Therapeutics		Research		and Other		Company
Total revenue	$	118	$	3,015	$	(1,684)	$	1,449
Cost of revenue		—		2,765		(1,576)		1,189
Research and development		6,347		—		(107)		6,240
General and administrative		—		672		3,187		3,859
Revaluation of contingent consideration		626		—		—		626
Loss from operations	$	(6,855)	$	(422)	$	(3,188)	$	(10,465)

(In thousands)			Contract		Corporate		Total
Nine Months Ended September 30, 2021	Therapeutics		Research		and Other		Company
Total revenue	$	704	$	10,016	$	(5,460)	$	5,260
Cost of revenue		—		8,705		(5,141)		3,564
Research and development		30,030		—		(319)		29,711
General and administrative		—		2,344		14,332		16,676
Revaluation of contingent consideration		22,139		—		—		22,139
Loss from operations	$	(51,465)	$	(1,033)	$	(14,332)	$	(66,830)


	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2021		2020		Change		2021		2020		Change
Revenues:
Contract research	$	1,415	$	1,331	$	84	$	4,556	$	4,373	$	183
Other revenue		244		118		126		704		529		175
Total revenue		1,659		1,449		210		5,260		4,902		358

Costs and expenses:
Cost of revenue		1,099		1,189		(90)		3,564		3,847		(283)
Research and development		13,976		6,240		7,736		29,711		20,382		9,329
General and administrative		5,979		3,859		2,120		16,676		15,632		1,044
Revaluation of contingent consideration		900		626		274		22,139		2,393		19,746
Total costs and expenses		21,954		11,914		10,040		72,090		42,254		29,836
Loss from operations		(20,295)		(10,465)		(9,830)		(66,830)		(37,352)		(29,478)

Other expense, net		(851)		(194)		(657)		(1,231)		(205)		(1,026)
Loss from continuing operations		(21,146)		(10,659)		(10,487)		(68,061)		(37,557)		(30,504)
Loss from discontinued operations		—		—		—		—		(285)		285
Net loss	$	(21,146)	$	(10,659)	$	(10,487)	$	(68,061)	$	(37,842)	$	(30,219)


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).

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: November 2, 2021	By:	/s/ Neal Walker
		Neal Walker
		President and Chief Executive Officer
		(On behalf of the Registrant)


Date: November 2, 2021	By:	/s/ Frank Ruffo
		Frank Ruffo
		Chief Financial Officer
		(Principal Financial Officer)