SVB Leerink downgraded Aclaris Therapeutics (NASDAQ:ACRS) to “market perform” from “outperform” and slashed its price target to $4 from $13 after the failure of the company’s topical treatment for alopecia areata, an autoimmune disorder, resulting in unpredictable hair loss. The stock closed at $4.45 on June 26.
Analyst Dr. Pasha Sarraf writes that Aclaris’ topical ATI-502 did not achieve statistical superiority at the primary or secondary endpoints due to high rates of disease resolution in vehicle-treated patients.
“We were aspirationally hoping for a meaningful profile for ATI-502, but we were willing to settle for an incremental profile (we had assigned just a 15% probability of success for the topical JAK ATI-502 in alopecia given difficulties in skin absorption), but Aclaris’ topical JAK inhibitor has turned out to be slightly worse than placebo, no better than an oily substance applied to the skin, and thankfully safe,” he added.
Beyond cash and expenses, “we have generously assigned 100% probability of success with Aclaris’ Phase 3 warts program and retain our partnership credit for Aclaris for its MK2 inhibitor, but assign very little value to this program at this early stage,” Dr. Sarraf said.
