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Edited Transcript of ACRS earnings conference call or presentation 15-Mar-17 12:00pm GMT

Thomson Reuters StreetEvents

Q4 2016 Aclaris Therapeutics Inc Earnings Call

Mar 15, 2017 (Thomson StreetEvents) -- Edited Transcript of Aclaris Therapeutics Inc earnings conference call or presentation Wednesday, March 15, 2017 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Kamil Ali-Jackson

Aclaris Therapeutics, Inc. - Chief Legal Officer

* Neal Walker

Aclaris Therapeutics, Inc. - President & CEO

* Brett Fair

Aclaris Therapeutics, Inc. - SVP, Commercial Operations

* Frank Ruffo

Aclaris Therapeutics, Inc. - CFO

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Conference Call Participants

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* Seamus Fernandez

Leerink Partners - Analyst

* Louise Chen

Guggenheim Securities - Analyst

* Liav Abraham

Citigroup - Analyst

* Tim Lugo

William Blair - Analyst

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to the Aclaris Therapeutics, Inc. fourth-quarter and full-year 2016 earnings conference call. (Operator Instructions). As a reminder, this conference call may be recorded. I would now like to introduce your host for today's conference, Kamil Ali-Jackson, Chief Legal Officer. You may begin.

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Kamil Ali-Jackson, Aclaris Therapeutics, Inc. - Chief Legal Officer [2]

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Thank you. I am Kamil Ali-Jackson, Chief Legal Officer for Aclaris. Please note that earlier today Aclaris issued its press release announcing fourth-quarter and year ended 2016 financial results. For those of you who have not seen it, you will find the release posted in the Investors section of our website at www.aclaristx.com.

Joining me for the call today are Dr. Neal Walker, President and Chief Executive Officer; Chris Powala, our Chief Operating Officer; Dr. Stuart Shanler, our Chief Scientific Officer; Frank Ruffo, our Chief Financial Officer; and Brett Fair, our Senior VP of Commercial Operations.

Before we begin our prepared remarks I would like to remind you that various statements we make during this call about the Company's future results of operations, financial position, business strategy and plans, and objectives for Aclaris' future operations are considered forward-looking statements within the meaning of the federal securities laws.

Our forward-looking statements are based upon current expectations and involve risks, changes in circumstances, assumptions and uncertainties that could cause actual results to differ materially from those reflected in such statements.

These risks are described in the Risk Factors and Management's Discussion and Analysis of Financial Conditions and Results of Operations sections of Aclaris' annual report on Form 10-K for the year ended December 31, 2016 to be filed with the SEC later today, and other filings Aclaris makes with the SEC from time to time. These documents are available under the Financial Information section of the Investors page of Aclaris' website at www.aclaristx.com.

Additional factors may also be set forth in those sections of our annual report on Form 10-K for the year ended December 31, 2016 to be filed with the SEC later today. We encourage all investors to read these reports and our other SEC filings.

All the information we provide on this conference call is provided as of today and we undertake no obligation to update any forward-looking statements we make -- we may make on this call on account of new information, future events or otherwise. Please be advised that today's call is being recorded and webcast. A link to the webcast is posted in the Investors section of our website.

I'll now turn the call over to Dr. Neal Walker, President and CEO of Aclaris. Neal.

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Neal Walker, Aclaris Therapeutics, Inc. - President & CEO [3]

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Thank you, Kamil. Hello, everyone, and thanks for joining us today. I will start with an update of our clinical development programs and other business highlights, then I will hand it off to Brett Fair, our Head of Commercial, who will then briefly address our pre-commercial planning activities after which Frank Ruffo, our CFO, will review our financial results and 2017 guidance.

After our prepared remarks we will open up the line to take your questions. Chris Powala, our Chief Operating Officer, and Dr. Stuart Shanler, our Chief Scientific Officer, will also be available during the question-and-answer portion of the call.

2016 was a transformative year for Aclaris. During the year we made significant progress on all of our programs, enabling us to enter 2017 with a solid foundation and continued momentum as we head towards the goal of becoming a fully integrated biotechnology Company. Let me recap several of the key milestones from 2016 starting with each of our three clinical programs.

First, at the start of 2016 we initiated the Phase 3 clinical program for A-101 40% Topical Solution for the treatment of SKs. As a reminder, A-101 is being positioned as a cash paid, minimally invasive procedure that will be performed in the physician's office. The Phase 3 clinical program consisted of two randomized double-blind vehicle controlled trials known as SEBK-301 and 302 and an open label safety study known as SEBK-303.

Patients in the 301 and 302 received up to two treatments of A-101 40% during the course of the trial. The three trials enrolled a total of almost 1,100 patients across 44 centers in the US.

In November we reported positive top-line results from both Phase 3 trials. A-101 achieved statistically significant and clinically meaningful results on all primary and secondary endpoints. A-101 40% was also well tolerated. There were no treatment related serious adverse events and the rates of hypopigmentation, hyperpigmentation and scarring classified as greater than mild were less than 1% in all groups.

Last month we submitted a new drug application, or NDA, to the FDA for seborrheic keratosis. We have planned for a 12-month review and are hopeful that we will receive approval in the US in early 2018. In addition, we plan to file in the European union in the second half of 2017.

Moving on to common warts. As a reminder, WART-201 was a randomized double-blind vehicle controlled Phase 2 clinical trial designed to evaluate the safety and dose response of two concentrations of A-101 Topical Solution, 40% and 45%, compared with vehicle in patients with common warts. 98 patients were enrolled and patients received treatment once a week for eight weeks.

In August we reported the top-line results of the WART-201 trial in which A-101 45% achieved statistically significant and clinically meaningful results on all primary and secondary endpoints. A-101 45% was also well tolerated. The local skin reactions were similar to placebo and most frequently reported local skin reactions across the treatment groups was mild erythema.

In addition, we also followed the patients for three months post the last treatment to assess durability. In the 45% group only one wart recurred, demonstrating a durable response with this treatment.

Given the safety and efficacy demonstrated in this Phase 2 trial and following an FDA guidance telecom, we intend to develop A-101 45% solution for common warts and plan to initiate Phase 2b trials later this year. In the Phase 2b program we intend to have the patients apply the drug and will position the product as a prescription meant for at-home use.

This brings us now to our Janus Kinase, or JAK, inhibitor portfolio with which we are targeting multiple dermatologic diseases including alopecia areata, vitiligo and androgenetic alopecia.

Late last year we submitted an investigational new drug application, or IND, and begin a Phase 1 human pharmacokinetic pharmacodynamic trial for ATI-50001, the oral formulation of our JAK 1/3 inhibitor. We expect data from this trial in the coming weeks and are planning to initiate a Phase 2 dose ranging trial in patients with the most severe forms of alopecia areata, alopecia totalis and universalis, in the second half of this year.

For ATI-50002, a topical formulation, of a JAK 1/3 inhibitor, we plan to initiate a Phase 2 dose ranging trial in patients with a patchy form of alopecia areata in the second half of this year as well.

In addition to advancing our JAK inhibitor program for the treatment of alopecia areata, as we reported on our last call, we have initiated preclinical development of additional JAK inhibitors which we are developing for topical use both in vitiligo and androgenetic alopecia. We also plan initiate a clinical trial with a topical JAK inhibitor in vitiligo in the second part of this year.

As a reminder, in addition to our portfolio of JAK inhibitors, our intellectual property portfolio includes method of use IP directed towards the use of JAK inhibitors in a variety of hair loss disorders.

We have initiated a US patent directed to methods of treating alopecia areata, androgenetic alopecia, and other hair loss disorders by administering ruxolitinib and a recently issued patent in Japan directed to pharmaceutical compositions comprising ruxolitinib, baricitinib or other JAK inhibitor's for use in treating alopecia areata, androgenetic alopecia and other hair loss disorders.

We look forward to keeping you updated on additional progress during the course of the year. Now we would like to turn the call over to Brett Fair, our Head of Commercial, to discuss the pre-commercial activities of the past year. Brett.

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Brett Fair, Aclaris Therapeutics, Inc. - SVP, Commercial Operations [4]

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Thank you, Neal. Good morning, everyone. As Neal mentioned, we are very excited about the recent NDA filing and the opportunity to launch what will potentially be the first FDA approved drug for seborrheic keratosis. We believe that A-101 represents an evolution of care in the treatment of SK, which is the most common benign skin lesion seen by dermatologists.

With over 80 million sufferers, SK is a highly prevalent condition treated by a targeted group of physicians. However, an unmet need exists in the market as there are no FDA approved drugs. And current SK treatments are invasive, often painful and can result in scarring or dis-pigmentation. As the majority of patients have SKs located in cosmetically sensitive areas, these outcomes can lead to poor patient satisfaction.

To date we have done market research with more than 500 dermatologists in 1,400 patients testing our target product profile. In light of the Phase 3 trial results included in our NDA file, we are confident in our ability to deliver a comfortable and effective treatment option that offers good cosmetic outcomes for patients paying out of pocket for SK removal. Moreover, A-101 is noninvasive, therefore patients can expect less downtime. We expect these attributes to translate into higher patient satisfaction with SK treatment.

In terms of the overall dermatology market, we see the dramatic increase in minimally invasive aesthetic procedures in recent years being a favorable dynamic supporting commercial launch.

In terms of launch readiness, we are well ahead in our planning process and feel confident in our ability to successfully launch the product. Over the last year we have assembled an industry leading team with a successful track record commercializing innovative treatments in the field of dermatology.

To date we have a clear path on a distribution model and have identified our target audience. We expect to have our sales force alignment finalized by midyear and have already made excellent progress with respect to our campaign development.

Key activities include framing and refining our practice model which will enable us to effectively pull the product through our target offices. We will also begin building on our training platform in anticipation of our sales force launch.

In Q2 we will continue to build out our commercial infrastructure as we look to hire a Director of Sales Operations, Training Manager and a dedicated Manager of Trading Customer Service who will oversee our product distribution and related activities. As we have previously stated, we would look to have our sales managers on board by early Q4 with the goal of recruiting and extending contingent offers to sales reps by the end of the year. We are confident that our extensive experience and deep relationships in dermatology will enable us to attract the very best talent.

In parallel with our infrastructure build and launch readiness activities, we continue to have a strong presence at various dermatology meetings, raising the awareness of Aclaris in dermatology and shining a light on the significant unmet need in the treatment of SK. The feedback we have received at these various meetings, including the most recent AAD in Orlando, strengthens our confidence that A-101 represents an evolution of care in the treatment of SK.

In summary, we see a significant market opportunity. In considering our Phase 3 results, coupled with the progress our commercial team has made thus far, we are very optimistic about the launch potential for this product. With that I would like to turn the call over to Frank Ruffo, our CFO, to provide an overview of the financial results for the year. Frank.

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Frank Ruffo, Aclaris Therapeutics, Inc. - CFO [5]

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Thanks, Brett. Good morning. As I walk through our fiscal 2016 financial results please reference the financial tables that can be found in today's press release.

As many of you are aware, during the fourth quarter of 2016 we raised an additional $98.2 million in net proceeds from our follow-on offering of common stock. As a result, as of December 31, 2016 we had approximately $174 million in cash and investments which we believe is sufficient to fund our current operating activities through at least the end of 2018, without giving effect to potential new business development transactions or financing activities.

For the full year of 2016 our operating expenses were $48.6 million compared to $20.7 million for the full year of 2015. Our operating cash burn for 2016 was $34.6 million versus $20.4 million for the prior year. It should be noted that our previously mentioned 2016 operating expenses included $6.1 million in non-cash stock-based compensation and the benefit from $7.4 million and other non-cash charges and increases in net working capital.

On a quarter-over-quarter basis our total operating expenses for the fourth quarter of 2016 were $11.6 million compared to $4.8 million for the fourth quarter of 2015. Our operating cash burn for the most recent quarter was $8.1 million. R&D expenses increased by $4.5 million in Q4 2016 compared to the prior year.

This was primarily attributable to an increase of $2.2 million in expenses associated with our JAK inhibitor programs and a $1.4 million increase in expenses for A-101 programs in SK and common warts. We also had a $1.1 million increase in personnel-related expenses including stock-based compensation mainly due to increased headcount.

General and administrative expenses for the fourth quarter 2016 increased $2.3 million compared to the same period in 2015. The quarter-over-quarter increase was primarily attributable to a $1.4 million increase in personnel-related expenses including stock-based compensation due to increased commercial and administrative headcount.

We also experienced a quarter-over-quarter increase of $800,000 in 2016 for market research related to pre-commercial activities for A-101 offset by a $350,000 decrease in expenses for patent and prosecution costs related to the JAK inhibitor technology acquired in the fourth quarter of 2015.

Net loss attributable to common stockholders was $11.5 million for the fourth quarter of 2016 compared to $4.9 million for the same quarter in 2015, and $48.1 million for the full year 2016 compared to $23.1 million for the full year of 2015.

Net loss attributable to common stockholders for the fourth quarter and the full year of 2015 includes approximately $200,000 and $2.6 million respectively in accreted cumulative dividends and issuance costs on our pre-IPO convertible preferred stock. These preferred shares were outstanding until the close of our IPO in October of 2015 at which time they were converted into common shares.

Now turning to our 2017 financial outlook. We estimate our net cash burn for 2017 to be in the range of $65 million to $70 million without giving effect to potential new business development transactions or financing activities. We estimate that our [2017] operating expenses to be in the range of $84 million to $92 million or $70 million to $75 million when excluding estimated stock-based compensation expense.

We anticipate 2017 research and development expenses to be in the range of $51 million to $58 million, or $46 million to $52 million when excluding estimated stock-based compensation.

As of December 31, 2016 we had roughly 26.1 million shares of common stock outstanding and, assuming no material issuances of equity, we would expect our full-year 2017 weighted average share count to be about 26.3 million. With that I will turn the call back over to Neal for a few closing remarks.

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Neal Walker, Aclaris Therapeutics, Inc. - President & CEO [6]

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Thank you, Frank. Clearly 2016 has been a pivotal year for Aclaris as we continue to generate clinical data on our lead development candidates, build out one of the most experienced teams in dermatology and advance our pipeline. We have built a solid foundation in 2016 and look forward to continuing to innovate in white space areas within both aesthetic and medical dermatology.

As a biotechnology Company cofounded by dermatologists, Aclaris is excited to continue to provide leadership within dermatology supporting both physicians and their patients. Dermatology patients are at the heart of everything we do and our goal is to empower patients by bringing novel medical and aesthetic dermatology treatments for conditions characterized by large underserved patient populations for which there are no FDA approved treatments or where significant treatment gaps exist.

Thanks for being on today's call. And Crystal, can you please poll for questions?

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Questions and Answers

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Operator [1]

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(Operator Instructions). Seamus Fernandez, Leerink.

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Seamus Fernandez, Leerink Partners - Analyst [2]

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So quickly, Neal, can you just update us on the timing of when the Phase 2 JAK studies not just will start, but when we could see some endpoint data? I believe previously you guys had said that we could anticipate that in the first of next year.

Second question just broadly for the team. Coming out of the AAD, what was your sort of -- the general feedback that you guys got out of the dermatology meeting on the opportunity for the JAKs and how utilization is sort of emerging in that space and their enthusiasm for that class? As well as the kind of feedback that you are getting on the appropriate initial target patient population for A-101 and how physicians are really going to utilize A-101, particularly given the aesthetic -- the potential aesthetic benefits? Thanks, guys.

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Neal Walker, Aclaris Therapeutics, Inc. - President & CEO [3]

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Thank you, Seamus, appreciate the questions. So on the first, in terms of guidance relative to our JAK inhibitor program, we intend to kick off three studies. So two will be for alopecia areata, one -- the first one will be oral treatment and that will be for -- when we think of kind of the severe alopecia areata patient we think of totalis and universalis with more extensive hair loss.

And then we will kick off a second study on the topical front again kind of midyear; both of these will kick off simultaneously. And that will be in patients with patchier disease. And we anticipate having results on both of those trials in the first -- late first half of 2018 as you mentioned.

And then we also intend to kick off what we are thinking of at the moment is more of an open label study for a topical program in vitiligo in the back part of this year. And we would anticipate having data on that in the beginning of 2018 as well the first half.

So those are the three JAK inhibitor programs that we are thinking about at the moment. And then coming out of -- to your second question, coming out of AAD and looking at kind of general feedback, I think obviously when you've got an anti-inflammatory class like JAK inhibitors and it could be potentially broadly applicable across a number of indications, what you really need to do is think about what indications are the best route to go.

And in our opinion going after alopecia areata and vitiligo, which are true white space with nothing approved in the category, we think makes a lot of sense. I think there was a lot of excitement, a lot of meetings and presentations about those particular indications, but also psoriasis, atopic dermatitis, some other inflammatory-based diseases as well. So I think there was absolutely a buzz about the category and then it just comes down to picking the right molecule for the right risk benefit profile.

In terms of the feedback around SK and the patient population, I think we have consistently heard not just at AAD but across all of the ad boards that we have conducted that kind of going after face and neck as the beachhead for this. Given the aesthetic nature of the lesions in those regions makes the most sense. And we got a lot of positive feedback from both aesthetic physicians and also the medical dermatologists.

There is a defined profile that we think represents the target and we have consistently said that we think our target physician there is the 3,200 docs, about 30% of the prescribers out there. And they are the ones who see patients with a lot of SKs, they have SKs in aesthetically sensitive areas and they have people who are willing to pay.

And that is just a few of the parameters by which we kind of grade whether somebody is a target. And so, that is how I would summarize it. I think there is a lot of buzz, a lot of positive feedback across the board, across the whole portfolio in addition to common warts. We have also got a lot of interest in that product as well.

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Seamus Fernandez, Leerink Partners - Analyst [4]

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Thank you.

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Operator [5]

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Louise Chen, Guggenheim.

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Louise Chen, Guggenheim Securities - Analyst [6]

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So, my first question here is on the OpEx progression throughout the year. I know you gave some guidance here but how should we think about that? And then on SK for the patients, if your product is approved what would be the out-of-pocket cost for a patient that has a large amount of lesions? And how much would the patient pay and then what would the physician make on that?

And then last thing here is just on the lesion itself. Once it has been removed will it ever come back? Just curious if we should think about patients being recurring patients to the doctors. Thanks.

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Neal Walker, Aclaris Therapeutics, Inc. - President & CEO [7]

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Okay, so I will let Frank handle the OpEx and then I can jump into your second two questions.

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Frank Ruffo, Aclaris Therapeutics, Inc. - CFO [8]

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Thanks, Louise. From an OpEx standpoint we just came off of a quarter of $11.6 million in operating expenses about $2 million of that was non-cash in stock-based compensation. So rolling forward that stock-based compensation will be a large amount; again, that is all non-cash. And I think you can expect that progression to increase by a few million in the first quarter and then sequentially by a couple million each quarter as you roll out through the year.

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Louise Chen, Guggenheim Securities - Analyst [9]

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And what about the R&D progression?

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Frank Ruffo, Aclaris Therapeutics, Inc. - CFO [10]

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Specifically on R&D, I think you will see a significant ramp up early in the year as it relates to the JAK program. As we said before, we are investing significantly on the JAK program and that program will likely double in expenditure this year. Other expenses in that area that will increase significantly would be our medical affairs spending for disease awareness and other medical affairs initiatives. So you will see that grow significantly.

But on the A-101 for warts and the SK, obviously being through Phase 3 on the SK trial, continuing on the wart trial, we will see that number dip a little bit. So on a progression standpoint, I think it will be comparable to the progression on total op expenses -- increase by a couple million early in the year and then sequentially as you roll out to get to that $51 million to $58 million guidance you will see that increase by a couple million each quarter.

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Operator [11]

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Liav Abraham.

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Neal Walker, Aclaris Therapeutics, Inc. - President & CEO [12]

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Sorry, before we get to that, just to answer the last two questions that Louise had. Once you remove these lesions they don't come back, so it is actually a pretty durable response. Although if you are prone to getting more SK deletions that patient -- as an example, if they had 20 and you removed them today, perhaps by the end of the year they would start getting more lesions.

So although it is a durable actual removal when you treat an individual lesion, that patient is still prone to getting additional lesions. So there is kind of a recurring nature to the indication.

And then to your second question, when you think about out-of-pocket, as you treat more lesions the cost goes up. We are continuing to work on our pricing model. We have started to think about guidance related to the cost per applicator. Certainly when you talk -- and I think your question was pertaining to large numbers of lesions, we have always defined that segment as a patient who has a full back.

That is certainly a more premium price point because you are creating a more dramatic response, you are clearing a -- potentially a full back. So, I think we will be providing more formal guidance around pricing towards the back part of the year. But in general physicians -- the cost -- whatever the cost of the doctor is marked up by about 100% to the patient.

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Operator [13]

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Thank you. Liav Abraham, Citi.

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Liav Abraham, Citigroup - Analyst [14]

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Just a couple of questions on your SK compound. Can you just remind us the percentage of patients seeking treatment today for lesions on the face and neck versus the back? And then secondly, if you could help us think about how you are thinking about a launch trajectory at this point given the feedback that you are receiving from the various constituents whether it be payers, physicians and patients?

And then lastly, just on your capacity for business development activities, to what extent do you have capacity both I guess from a financial perspective but also from a people and capabilities perspective? And what type of assets will you be looking for at this stage, medical derm, aesthetic derm, [like what stages] of development? Thank you.

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Neal Walker, Aclaris Therapeutics, Inc. - President & CEO [15]

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Thank you, Liav, for the questions. In terms of the patients seeking treatment, we have consistently gone through this filter of an 83 million prevalent population out there with 18.5 million patients coming in looking for both diagnosis and treatment. And then currently with the sub optimal surgical options that we have we are seeing about 8.3 million procedures.

And so, out of that, when you think about those who have lesions on the face and neck, we know that patients who have SKs, 80% of them have lesions on the face and neck. So, it is a number that is consistent with the 85% that have them on the trunk. So, kind of equal split between face, neck and trunk. Once you are prone to getting these lesions you tend to get them globally and certainly in sun exposed areas.

In terms of the launch trajectory, we haven't really provided any formal guidance around that. We are still working on the pricing model and we have a pretty good idea of who our target audience is. I think one can look to other minimally invasive procedure launches and start to get a good kind of range or bracket around what that might be. And certainly as the year wears on we will look to provide more specific guidance around that.

Relative to your third question on capacity for BD. We have done a lot of work this year and certainly -- or last year and certainly into this year already, scaling up our capacity on both the R&D and also the commercial front. We have historically always been quite active on the BD front. We are looking for both medical -- med derm and aesthetic opportunities. Our preference is to go into white space areas particularly on the med derm front.

We would rather be kind of the first in the category particularly with all the reimbursement headwinds. Definitely a preference for clinical stage assets. And I think on the kind of capability front, we have added a lot to the R&D side of the house. And right now we have got four programs ongoing in warts and three in the JAK inhibitor side. So we feel like we have been able to build a really robust team and we are excited.

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Liav Abraham, Citigroup - Analyst [16]

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Great, thank you.

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Operator [17]

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(Operator Instructions). Tim Lugo, William Blair.

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Tim Lugo, William Blair - Analyst [18]

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For the next Phase 2 in warts, are you going to enroll pediatric patients? And have you had any feedback from the agency around using the PWA versus clear, near clear endpoint? And also are you going to treat one wart per patient or are you going to move it all into multiple warts?

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Neal Walker, Aclaris Therapeutics, Inc. - President & CEO [19]

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Yes, thank you, Tim, good questions. So, the next Phase 2 that we are going to embark on we did -- we are refining the physician wart assessment scale. At the end of the day to win in warts you have to get to clear. So it is kind of a binary process. So the PWA I think is more about getting the right kind of range of sizes of warts and just thinking about the inclusion/exclusion criteria there. But the reality is it as just got to get to clear.

And in terms of the number of warts, that was one of the questions that we were trying to get clarity on when we had a guidance [telecon]. We think it is going to be multiple. Our feeling at the moment is that we'll be treating a range of warts from about one to three per patient. And that is what we are planning on for the Phase 2b at the moment.

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Tim Lugo, William Blair - Analyst [20]

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Okay. And maybe for the JAK program, your three studies kicking off it sounds like before year end. Are any of them going to have placebo arms? And in general, how should we think about placebo rates? I think it is variable between the patchy alopecia areata patients versus the more severe patients?

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Neal Walker, Aclaris Therapeutics, Inc. - President & CEO [21]

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I'm sorry, I missed that question, Tim. Could you just repeat that?

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Tim Lugo, William Blair - Analyst [22]

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Oh, yes sure, sorry. For the three JAK studies kicking off, are you going to use a placebo or vehicle arm in any of them? And in general what should we think about placebo rates in the indication?

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Neal Walker, Aclaris Therapeutics, Inc. - President & CEO [23]

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Yes, so in going back, I don't think I answered your other question on the wart study going into peds. We will go down to 12-year-olds. So, that will be encompassed on that study.

On the JAK inhibitor front, yes, there will be placebo arms? Whenever you have hair loss studies I think the placebo rates are generally a little bit lower, although -- because it is a more objective -- kind of objective process.

But when you think about alopecia areata, there is a stress component to it so that if somebody is certainly enrolling in a study and believes that they may or may not be on drug, you might expect a little bit higher placebo response rate in areata than you would in say like a male or female pattern hair loss.

Tough to us -- for us to kind of really guess at that at the moment. But I think we feel pretty comfortable it is going to be lower than in most derm indications like say an atopic dermatitis.

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Tim Lugo, William Blair - Analyst [24]

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Okay. Thanks for all that.

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Operator [25]

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Thank you. And I am showing no further questions from our phone lines. I would now like to turn the conference back over to Neal Walker for any closing remarks.

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Neal Walker, Aclaris Therapeutics, Inc. - President & CEO [26]

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So, appreciate everybody joining the call today. We are excited about what 2017 will bring. We have got a lot of programs kicking off this year. We are excited about the transition to a commercial stage Company on the SK front. And we are really excited about developing our full JAK inhibitor estate across three indications. And appreciate everybody's time.

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Operator [27]

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Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone have a wonderful day.