Details of the Downgrade
HC Wainwright recently lowered its rating on Aclaris Therapeutics Inc ACRS.
The company had recently announced the top-line results from its Phase 2b study of ATI-1777, an investigative topical “soft” JAK 1/3 inhibitor for patients with mild to severe atopic dermatitis (eczema).
The trial successfully met the primary efficacy endpoint, indicating a statistical significance for patients treated with ATI-1777 2% twice-daily (BID) compared to those treated with vehicle.
However, the once-daily treatment did not show statistically superior effectiveness compared to a placebo, leading to concerns about its commercial potential.
Considering the competitive landscape, the marginal difference in the effectiveness of the twice-daily treatment and placebo was deemed unappealing.
Analysts Raghuram Selvaraju and Boobalan Pachaiyappan downgraded the stock from Buy to Neutral, reflecting doubts about the future commercial development of ATI-1777.
Aclaris intends to seek a partner for the further clinical development of ATI-1777, and a potential partnership would lead to a reassessment of the company’s rating and valuation.
The potential challenges of developing and commercializing a twice-daily topical treatment for atopic dermatitis, in the face of existing products like Dupixent (dupilumab) from Sanofi SA SNY and Regeneron Pharmaceuticals Inc REGN, have raised concerns about the market prospects for ATI-1777.
Evaluation of Stock Performance
Despite the downgrade, ACRS shares are up 9.2% at $1.24 as of the last check on Monday.
