Aclaris Therapeutics Inc ATI-2138 Phase 2a Results and ITK Franchise Update Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Louise Chen - Scotiabank GBM - Analyst : Hi. Congratulations on the data, and thanks for taking my questions. First question I have for you is, if you could provide more color on EASI and the statistical outlier that you mentioned. Neal Walker - Aclaris Therapeutics Inc - Non-Executive Chairman of the Board, Chief Executive Officer, Co-Founder Hi, hey Louise. thanks, this is Neal. So, in that particular, with that particular patient, it was independently identified at the Guttman lab, while they were doing the PD analysis of all the work they were doing, whether it was O-Link or the biopsies or tape strips, that they were about a four standard deviation molecular outlier, which essentially means, in Layman's terms, that there was such vibrant and diverse inflammation that it was not typical, one would see an AD. Now, certainly, you can see a non-lesional skin, some inflammation. It's more typical though in atopic to see just robust inflammation in the lesional area. So it was interesting, because clearly you can see in that spaghetti plot, we decided to provide you with the actual curves from all the patients to show you the stark contrast and mainly to show why the week 12 migrated up a little bit from the 70% response rate, at weeks four and eight is very consistent that it migrated up. And it was because that particular patient, not only did it get better, they got markedly worse. So I think there's some phenotypic things that we saw in the pictures that looked like there's more than AD going on. And we're actually still tracking that down, just out of interest and indefinite to the patient, frankly, to make sure that the diagnosis is.

Question: Raghuram Selvaraju - H.C. Wainwright & Co - Analyst : Thanks very much for taking my questions and congrats on this data. Just in a general sense, can you comment on two aspects of the positioning for ATI-2138? Do you see atopic dermatitis as being principally a proof of concept indication for this candidate, and not something that you would be likely to return to in the future at any point in its development? And by extension, is this also applicable to future ITK inhibitors, or would you consider a topic dermatitis to be a lead indication for one or another of the future ITK inhibitors in the portfolio? And also, could you maybe comment on the potential positioning of 2138 within the alopecia areata indication, specifically? Because, my understanding is that when we look at traditional JAK inhibitors, and their applicability in AA, effectively patients are forced to keep taking those molecules as long as they want continued efficacy, because as soon as those medications are withdrawn, the issue arises again. In that context, you expect a similar mechanistic situation with 2138. And in that context, would you anticipate that given the expectation of a significantly improved safety and tolerability profile, and the avoidance of some of the most troublesome issues associated with the broader spectrum JAK inhibitors, that 2138 would be better suited to long-term chronic dosing in alopecia areata. Neal Walker - Aclaris Therapeutics Inc - Non-Executive Chairman of the Board, Chief Executive Officer, Co-Founder Yeah, thank you. I'll take that in order, Ragh. And it's a great question because I will admit that -- you know, it's a little bit confusing when we're talking about doing a POC indication with one asset and then saving that indication for potentially a later asset. So let's start with your first aspect of that, yes, this was designed to be a proof of concept in AD. AD, you know, has a lot. Obviously, it's skin disorder, so it comps nicely to what we might expect in alopecia areata just from a skin penetration perspective. So 2138, I think the profile where you have another JAK entrant in a market that JAK inhibitors are not first line in AD, I don't think makes a lot of sense. And so, you know, we definitely view this as POC and we've been very consistent from the day we initiated this study that the next place that we're going to go is alopecia areata. And so we will, for an ITK selective, and this is important, we can't study AD and everything, the ITK selective with the JAK engineered out would be a very elegant oral solution in a market that doesn't have a great oral solution just yet, and has the opportunity to be a first-line oral treatment, very convenient. And so, we think the ITK selective would be very well positioned, not only in AD, but think of all the Th2 diseases that are the hot areas that other biologics are actually chasing after, and respiratory would be very relevant for all those sorts of things like asthma, COPD, and the like. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Raghuram Selvaraju - H.C. Wainwright & Co - Analyst : And then just two other quick questions, if I may. Firstly, given all the pharmacodynamic information you now have about 2138. And how that might guide what you would expect as core characteristics from a pharmacological profile of the next-generation ITK inhibitors, do you feel as though you have a clearer sense of how you might position the small molecule elements of the portfolio, relative to the biologic elements of the portfolio? And if there is likely to be any overlap or any combinatorial regimen exploration with these two categories of medications? And then, just with respect to the future for 2138, are you considering vitiligo as a potential additional indication beyond alopecia areata for this molecule at this time? Neal Walker - Aclaris Therapeutics Inc - Non-Executive Chairman of the Board, Chief Executive Officer, Co-Founder Yes, we are. And you may have caught that in the deck that we included new data in vitiligo. That was done at the wonderful, wonderful data there. And we know ritlecitinib has been shown in their Phase 2 work to be quite strong in vitiligo. Another area where you get a lot of long-term use, huge unmet need, and JAK inhibitors really rule the day there and so people are obviously willing to take those over the long term. In terms of the small molecule positioning, it's an interesting question. Maybe there's overlap, maybe there's combination strategy down the road. I know there's a lot of talk in the market these days of combining mechanisms and to get through efficacy ceilings and things. So you never rule that out. I do think, though, there are -- there's seemingly distinct populations of patients that tend, some patients like oral, some patients like biologics and sometimes they cross over, sometimes they don't. But in my experience, having practiced in the past, those patients who like oral tend to like oral. So, you know, that's, you know -- I think it's a false narrative when people talk about having to win the entire market. It never works that way and there's plenty of room in large and growing markets for both orals and biologics.

Question: Biren Amin - Piper Sandler Inc - Analyst : Yeah, hi guys. Thanks for taking my questions and congrats on the data. Maybe just your thoughts on the alopecia indication. What type of trial design would you be looking at? Is it more of like a Phase 2b or would it be more like a Phase 2a? And can you maybe just talk about timelines around the next study for alopecia? And lastly, on the dosing for alopecia, would you look to going higher than 10 milligrams BID, or do you feel like that's the appropriate dose for alopecia based on the status? And thanks. Neal Walker - Aclaris Therapeutics Inc - Non-Executive Chairman of the Board, Chief Executive Officer, Co-Founder Yeah, was a good question. So, you know, I think right now the way we're thinking about alopecia is doing something in line with, you know, an 80-, 90-patient study, two-to-one randomization, something in that regard. The placebo effect is not really a concern in this indication. And I think for us, you know, we do want to push dose. We think there's strongly that -- I mean, we just didn't see anything on the safety side here. So we think it makes sense to push dose and we think that we can drive an even more robust effect. So to me, that makes sense to do in the alopecia study. Timeline wise, we're just finishing up the long-term [tox] in life and that's, you know, completing imminently. The rat work is already done. The monkey work is done in about the next couple weeks or so. So just given some, a few months to get reports together, et cetera, you know, we should be starting that study, perhaps in the December timeframe, more likely in the January timeframe. And these are quick enrollers. You know, we haven't even started yet, so I don't want to give you a timeframe. But if anything can be done within a pretty quick time period, it's an alopecia areata study. These are six-month studies. You have to really go out to six months to get a good idea of how it's working. So that's the way I would look at it. But we're excited about it. I think it's pretty clear when you look at us comping to ritlecitinib, it gives me comfort knowing how much more potent we are on ITK. And we do know this is published out there at a poster that Angela Christiano, their group presented about a year ago, where they looked into the effect of ITK in their mouse model. And sure enough it didn't demonstrate exactly a JAK effect, but it was a pretty robust effect. So we think that provides a nice, I guess, free boost, if you will, to the molecule's efficacy.

Question: Seth Allen - Stifel - Analyst : Hey guys, thanks for taking the question. This is Seth Allen for ALEC. Maybe two questions from us. First, just curious if patients were allowed to use TCS in the trial protocol? And then if you could provide any more color on the trial deviations, are these coming from patients from the same trial site or different trial sites? We just like to know a little bit more about that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Seth Allen - Stifel - Analyst : Excellent. Thank you.

Question: Thomas Smith - Leerink Partners LLC - Analyst : Hey guys, thanks so much for taking the questions and congrats on the nice data. First of all, in 2138 safety, overall it's clean in the study, but can you just disclose the other treatment related AEs beyond the myalgia? And then coming back to the potential for 2138 to differentiate from the other JAKs, can you just clarify -- do think there's a path to avoiding the JAK class labeling with this compound? And when do you think we'll get clarity on that aspect of the competitive positioning? Neal Walker - Aclaris Therapeutics Inc - Non-Executive Chairman of the Board, Chief Executive Officer, Co-Founder Yeah. I'd love to tell you that that would be great that we could do that. I go into this believing that that's probably going to be a difficult hill to climb, however, I think we've seen this over time that the labelling is a little bit nuanced, depending on the JAK inhibitor and where you're at in the class. And I mean, obviously we've seen so [TIK2] that that was really just a slight warning and that's about it. So I'd like to believe that someone might take a data-driven approach. But there's no way to know that until you get to the NDA review time, unfortunately. But I think that's another reason why it makes sense to position this particular asset and indications, where JAK inhibitor use is accepted over the long term and docs are comfortable with it. I haven't run into a dermatologist yet who is squeamish about prescribing these sorts of things long term in alopecia areata patients, vitiligo patients. Certainly in AD, they're used a little bit differently. But that's what I'd say on that. On the -- your first question on the possibly related AEs that we mentioned, the first one was the moderate myalgia. And that just continued from, I think, a few weeks into the study that patient finished the study, they didn't discontinue, no CPK elevations. The other three were -- one was vomiting, and that I think lasted a day. And again was mild. And it was themed, possibly related. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Thomas Smith - Leerink Partners LLC - Analyst : Got it. That makes sense. Super helpful. And then if I could just ask a follow-up question, just on the itch improvement, really interesting signal. Could you just comment on the time course of that benefit and how early you saw that improvement? And then how are you thinking about potentially incorporating that into your alopecia program? I don't think ritlecitinib has any data on the label for pruritus, but is there potential for you to design your program to maybe get that on the label and provide another differentiating point? Neal Walker - Aclaris Therapeutics Inc - Non-Executive Chairman of the Board, Chief Executive Officer, Co-Founder You know, perhaps, it's not a big feature, of that particular condition, but it was right out of the gate. And you would expect that with this mechanism. That it was robust and deep, starting at week 1, week 2, and just carrying that. At some point, we're getting north of 70% in terms of the number of patients we're getting greater than or equal to 4. And so it was quite remarkable. And again I think it's one of the higher, you know, itch parameters ever reported, albeit it's ten patients, of course. But you know that was quite a strong feature and it makes sense with the mechanism. So we weren't surprised.