All right. If we could get started, I'd like to welcome everyone to the Piper Sandler Healthcare Conference. My name is Biren Amin. I'm one of the biotech analysts here. I'd like to welcome our next company. We have Aclaris and their team. Neal Walker, CEO; Hugh Davis, President, CEO; and Roland Kolbeck. Welcome, gentlemen. Maybe to start off, you know, for the audience, just tell us a little bit about Aclaris, the focus, the pipeline, and then we'll dig kinda into each of the programs.
Sure. Thanks for having us. Aclaris is a development-stage biotech company focused on both large molecule and small molecule therapeutics. What underpins all the assets that we're working on is world-class expertise in both, coming from large pharma companies and a discovery engine and platform behind that. Right now, we have three clinical-stage assets, ATI-O52, which was our IL-4, our TSLP bispecific that's going through SAD/MAD work right now. We have a TSLP mAb that's going through a moderate-to-severe atopic dermatitis study, and all that will report out next year. We have ATI-2138, which is a pretty unique molecule. It's an ITK JAK3 oral inhibitor. Right now, we're cycling on a lead indication for that, which will start next year.
Then, of course, we have our next-gen ITK programs that come into view in later 2026, which we're really excited about. You know, almost four clinical-stage assets by the time 2026 rolls around, a lot going on. Cash runway into Q3 2028 with $167 million on the balance sheet. We're pretty efficient, pretty resilient with our capital.
A lot of programs for a small company. How do you prioritize, manage them all, you know, make sure that, you know, you're executing, moving them forward in a, in a timely manner?
Yeah. I think the way we've sequenced it all out, it allows us to keep a pretty modest cash burn. I mean, we're only burning about, you know, $10 million - $13 million a quarter or so. As kind of one study rolls in, another rolls off. You know, the way we look at it, obviously, TSLP mAb, if we're right about the best-in-class potency, has the ability to address multiple, multi-billion-dollar markets, and certainly has a place in atopic dermatitis. We think very highly of that, although we don't seem to get a lot of credit for that on the street. You know, the bispecific, as we all know, there's a lot of interest in those constructs.
You know, I think if we show meaningful efficacy, you know, coming out of next year, there'll be a lot of investment in that. To me, that's one of the gems in the portfolio. On the small molecule side, we're really excited about the ITK selectives where we engineer out the JAK3. That's not to diminish 2138. It's a great molecule, and it has a lot of applicability across a number of indications, and we're certainly gonna move that forward.
You know, when you talk about prioritizing and, and kinda game-changing potential, I think if you had an oral that hits Th2 but also hits Th1, then you have the very real ability to address the heterogeneity inherent in a lot of these diseases, which, as we know, has been capping the responder rates in, in not just derm diseases but all the respiratory diseases that we all talk about. I look forward to, to getting that into an IND and, and, you know, going after all the same indications that the Th2 biologics go after.
You talked about BSI-045B. This is a trial in atopic dermatitis that's currently ongoing. You know, TSLP antibody, something that could potentially be differentiated, especially given TSLP antibodies have largely been developed for respiratory diseases. Maybe can you talk about your confidence level around this program in AD given, I think with Tezspire, Amgen ran a trial where they really, it really wouldn't support the program moving forward?
Yeah. I think there's two things that if we're right, we'll generate fantastic data by the second half of 2026. I think it's really a bet on the potency. If you look at our slides, the residence time and the potency is worlds better, and we're 70x more potent than Tezzy. If you think about it, if you look at the literature, you have 15% of the mAb gets into the skin, and it's an alarmin, so you want to bind that up, stick to it, and not allow it to kick off the inflammatory cascade. That's the problem, right? I think if you have 15% in the skin, you want to be something that's orders of magnitude more potent. I think we can do that with our molecule.
I think the other bet is that there's just so many design flaws with the Amgen data that even in spite of all that, they still showed a signal. There wasn't an abject failure. They had a p-value of 0.09 on the primary that was adjudicated at week 12. They allowed concomitant use of topical corticosteroid, topical corticosteroids at a pretty high level. That just tells me that the placebo effect just migrated too close. They actually picked up stat sig on an IGA at week 16. That was 29%. Again, to me, there's enough signal there to warrant a modest investment to see if we're right.
We do believe that there's a home for something as safe as TSLP is, particularly in a patient population that skews young, that if we can, you know, recapitulate even half of the data that we showed in our open-label II-A, that's going to be quite a compelling asset.
You also have another design feature in the phase II in which you're using central photography and, or central reading of photography.
That's correct.
What's, I guess, the rationale behind that?
Obviously, I don't think it's any secret we've seen a migration of placebo effect up over time. There are very distinct nuances between when Dupey did their phase IIIs and everybody else, you know, post-2017. One of the issues is that what you're seeing now is you're seeing patients get in that don't even have the disease. That's easy to do because if you think about atopic derm, it's just red, scaly skin, right? A lot of things can look similar to that. You know, that's one problem. The other problem is you're getting patients that even if you set a lower bound of an EASI 16, you're still getting people that might have EASI 12s.
As soon as you allow one of those in, the minute they get their first assessment, they've already shown improvement, right? Because there were never an EASI 16 to begin with. The only way that you can stay on top of that is by adjudicating pictures as they screen in. We want the right patients in. We have a central reviewer at the CRO who's a board-certified dermatologist. I am a board-certified dermatologist. We both look at the pictures separately. We both weigh in on it. If it looks good, that's EASI. Tell the site to enroll. If it doesn't, we talk about it. We've had to do this more than a few times.
Go to the site, have a discussion with the clinical investor and say, "Look, what are you seeing that we're not seeing in, in the picture?" Just have a collegial discussion on that front. Sometimes it even warrants a biopsy, you know, before letting it in. I can tell you this, that all the patients we have in thus far, 100% have AD and meet and meet the criteria. That's what's going to really control, you know, placebo effect. It isn't about Europe versus U.S., that is a false narrative in my view. You can't tell that unless you're actually looking at pictures.
You're doing that at baseline. How about at the primary endpoint? Is that also done at the primary endpoint? Is that.
So.
Is the primary endpoint assessed by the investigator?
That's assessed by the investigator. I'm glad you brought that up 'cause the other thing that we make sure, the other kind of issue with these studies is you can't go back. You gotta look at these on a static basis. You can't go back and compare to a picture as they went in. Why is that important? It's important because you want the same doctor or the same provider assessing that patient throughout the study because they do have a little bit of that recall. If you keep changing, it's very clear in the literature. There's a tremendous amount of inter-rater variability, and that's also why you see these kind of, particularly when you see flares over the course of like six months. You might pick up a flare here or there.
You wanna make sure it's the same person assessing that patient.
That's perfect. And these are patients that are naive on biologics? Or would they have been exposed to Dupixent, for example?
It's all comers. You know, this is an orthogonal mechanism. I don't mind having a patient in that, that "failed." You know, Dupey failures are hard to ascertain. What does that really mean? You know, patients are often poor historians in that regard. Does it mean they were treated for six months and never saw a result, or they saw a result and it went away? I mean, it's very difficult to ascertain that. We don't mind having, you know, either Dupey experienced or JAK experienced in the study. T-Slip works through a different mechanism.
Great. Great. Data second half next year.
Correct.
What would be considered, you know, a good result where, you know, the program could move into a phase III?
Yeah. I mean, look, we obviously, we want it to be stat sig, but to your point, I want the responder rates to be meaningful in some regard, whether that's itch or mean change from baseline on EASI. You know, there's lots of measures you can look at. I guess maybe one comp, if you're just looking at mean change from baseline on EASI, would be the phase II Sanofi data with their OX40, which is 40% range. That would be quite good, I think. Again, I think you gotta look at all of it. I mean, we know TSLP has a very potent effect on itch. At the end of the day, the thing that people come into the office back when I was practicing, you don't sit there and, like, measure EASI score. You're like, "Okay. How do you feel?
What's the itch like?" And if you get rid of that, that's the key. It's, it's a little different than psoriasis, which is more, "I don't want this rash on me," right? It's a symptomatic sort of thing. We are excited about it. You know, we fully are aware that it is a bit of a show-me story, and that's okay. We hope to surprise people.
Great. Great. You also have data sets from some of your other programs earlier in the year. You have the bispecific that you mentioned, Neal, with the TSLP IL-4.
Yep.
Talk about this, you know, the, the rationale of TSLP IL-4. Why IL-4 versus, you know, another cytokine?
Hugh?
Yeah. So when you look at IL-4R, you're actually inhibiting the action of both IL-4 and IL-13. We wanted a drug that was gonna cross over both respiratory and derm indications. The plan with that bispecific was to completely knock down TSLP to a maximum extent. That 400-hour residence time on TSLP, where you can really neutralize it and keep it inactive for the dosing interval, was key. The IL-4R component is able to about the same affinity as Dupixent. We're looking to have the same safety profile 'cause that's gonna be important too as we think about, again, these younger populations, not just adults.
At the end of the day, what we did was we showed that, in a PBMC experiment where you activate with both TSLP and IL-4, we could show a four-time greater potency on CCL17 inhibition, than Dupey and Tezzy combined. The goal with this bispecific is to really be able to have a max effect. That is the goal. By doing that, with the dosing interval, with the YTE on the antibody on the bispecific, that helps offset the target-mediated drug disposition. We are also hoping that we would have a longer dosing interval than Dupey does.
That's great. The program's currently in the phase one SAD MAD study.
Yep.
I think you're gonna complete the MAD cohort relatively soon.
This month. Yep.
Yeah. And then the data, early next year. What can we expect? I guess, you know, the MAD cohort's probably gonna be more instructive in terms of next design. What do you hope to learn from that MAD cohort?
Yeah, you're right. It's five weekly doses in the MAD, and we have two different dose levels that we had taken in. We're looking for good, consistent accumulation in order to be able to know that the drug is pharmacokinetically operating as we would expect, and can be predicted. It's pharmacokinetic safety, of course, and tolerability. On the safety side, as I said, we're really looking for a very similar profile as Tezzy has, and ultimately be able to look at in phase II once we move into the I-B and we go through an AD cohort and an asthma cohort. We really need to be able to get to a dosing that would be useful in maintenance that will be able to maintain that high effectiveness.
Are there any pharmacodynamic measures that we could look at to say, "Okay. This ki and correlates historically to, you know, and compare it to, like, Dupixent, for example, or, or to TSLP?
Yeah. Hugh, you wanna take that?
Yeah. Again, that study is in healthy volunteers. What we're gonna do is ex vivo whole blood assays where we look at the target engagement. We have a TSLP and IL-4-specific assay that will tell us. Then we're also gonna look at a number of soluble proteomics biomarkers in serums. We'll get an idea about, you know, how the PK correlates with target engagement and inhibition. Got it. Got it. That data, early next year. Then you would move into two proof-of-concept studies, phase II studies, one I think in atopic derm and the other in asthma. You would take both of those dose cohorts that you've evaluated in the SAD portion of the phase one into the phase II or how do you think about the design?
No. The asthma study is a single-dose study, and ultimately there, we're looking at FeNO reduction, you know, very similar to the Sanofi study. Ultimately, again, just showing effectiveness in this relevant population, and safety, of course, too, in asthmatics. At the same time, we're gonna take five doses into AD subjects, and there we'll have a 57-day readout, so four weeks after the last dose. There we'll actually be able to show some reasonable effectiveness, especially relative to BSI-045B, the parental TSLP antibody that's part of the bispecific. At the end of the day, both of those will have a single dose level, and they may or may not be the same. We're going through that work now, thinking about single-dose effect versus a multiple-dose effect with the.
Got it. Got it. With the asthma, you talked about FeNO. Will we be able to make cross-talk comparisons to other agents, TSLP, IL-4 agents, IL-33, or even the Sanofi bispecific?
Yeah. We'll look at a number of different biomarker readouts. FeNO is one of them. We're certainly gonna look at eosinophils, for example, circulating eosinophils, things like TARC, /CCL17, IgE. We'll get some ideas about what is IL-4 receptor and what is TSLP-mediated. I think especially on the eosinophil counts, it has been shown for IL-4 receptor inhibition that eosinophils go transiently up. TSLP suppresses eosinophils. We'll see what we'll see in terms of these biomarkers, but we expect to get insights into hitting both mechanisms.
Will the asthma trial be all comers or will you have a cutoff on eosinophils that you're planning to enroll in the trial?
It's greater than 150.
Greater than 150. Okay. Perfect. And both of those data sets probably, by year end, 2026?
Mm-hmm. Second half. Yep.
A lot, I guess, second half of 2026 is probably gonna be a big year across both programs.
Yes.
Good. And then ITK, you know, I think you're planning on launching a study in lichen planus that was recently announced. What was the, in pursuing this indication?
We're trying to, you know, we think it's broadly applicable to a number of different indications, but we're trying to pick a lead where there's not as much competitive intensity, as there are in some of these other areas. That's certainly an area where there's nothing approved. There's a kind of close first cousin in terms of a scarring alopecia called lichen planopilaris that, you know, we know that there's some good investigator initiative with some other similar molecules. We like that as a lead. It's a large market, 2% prevalence. You know, some of these lesions have premalignant potential. Right now it's just being served by, you know, generic, you know, oral steroids and cyclosporine, very old drugs. You know, we think it makes sense as a lead.
We'll grow that into other indications. You know, these days it is kind of finding that right lead just due to the competitive intensity.
Phase II, how many patients will you be enrolling? Is there gonna be a control arm that you could compare to?
Yeah. We'll have placebo control, and it'll be, you know, somewhere in the 70-80 range of patients.
And the primary endpoint,
We like a week 16, you know, basically like an IGA. Think of an IGA in, in, in AD.
When could the trial start to enroll?
That would be pretty early in the first half next year. We're waiting on two long-term tox studies to complete. They did, and all that looks fine. We have six to nine-month chronic tox done now with that molecule. We really have a nice complete full package that can jump right into a II-B, even three down the road.
Could we expect data from this trial by end of 2026? [crosstalk] Or is that more like a 2027?
I would say it's probably more of a early 2027 timeframe. That's what we would guide to at the moment.
Great. After that, a potential for like a phase II, III.
Yep.
If, looks good.
Correct.
You also have a JAK-sparing ITK that you're potentially filing IND on. You know, what are, I guess, some of the steps that you need before the IND gets submitted?
It's just the run-of-the-mill IND-enabling tox at this stage. And, you know, we'll get that done. We're excited about that molecule, getting into the clinic hopefully by the end of the year in 2026. We do think, you know, our approach with that is that we're taking an approach where we target ITK but also tickle TXK, which is important because that hits also the Th1 path. Again, it's our view that kind of the efficacy ceiling that we see in a lot of these diseases that are mainly targeted by Th2 biologics are leaving that Th1 side active. We know this in chronic AD, and in particular in adult patients that that is an area that's not addressed.
If I can give an oral pill that hits not just being an oral Dupey, I would say, "I wanna be like an oral Jack without the Jack, side of things." I think that's the potential. I think that's a very exciting molecule.
Which indications would you potentially pursue with that?
We would pretty much go after anything in the respiratory or derm space that, you know, the Th2 biologics have gone after. You know, we just have a dearth of oral small molecule options. And, you know, I mean, we see this with Protagonist Therapeutics' drug in psoriasis. Like, everybody thought that market was played out, and now we're going back to orals, right?
That's fair.
It's an interesting dynamic. There's what, you know, what I always noticed when I was practicing years ago, there's just a subset, there's a set of patients that always will prefer an oral. It doesn't matter how infrequent the injection is, they just want an oral. And there's lots of reasons for that. It's also a little bit easier to manage, you know, with side effects that will pop up out in the wild. We think, you know, there's really fertile ground on the oral front. That's why I'm glad we've got, you know, large and small molecule options in these hyper-competitive markets. You can, you know, weave and bob and weave depending on where things go.
You know, there's also an extensive discovery platform on the multi-specific antibodies using TSLP as a backbone. Can you talk about these efforts and when we could start to see some of the programs coming out of this?
Sure.
Yeah. That's indeed what we do. I think BSI-045B is just an extremely good platform, a very good parent molecule, if you like, to combine with others. We look into mechanisms, translational data in different indications, and then we picked a few combinations we are working on. Still early days. We haven't disclosed anything, and I think we are not ready yet. As soon as we get to that point, we'll disclose additional information around these efforts. I guess what was the thought in terms of TSLP as a backbone versus an IL-4 as a backbone.
TSLP, again, as Hugh was pointing out, is an exceptionally potent antibody. Again, it sits upstream of an inflammatory cascade that makes it a very attractive starting point. Also, Tezspire is a very safe molecule in the clinic. Combining something with that level of safety with other mechanisms was very attractive to us. It does not mean that in the future we may not work on other bispecific antibodies as well. For now, that is what we are focusing on. That is what we have, and we are trying to make the most of it.
Perfect. Great. I think, you know, we've gone through your programs, but, you know, a lot of exciting data coming up starting as early as Q1 into second half 2026. Looking forward to all of the updates and congrats on all the progress.
Thank you. Yeah. 2026 will be a big year.
Great. Thank you.
Thank you.