Dive Brief:
- Aclaris Therapeutics will lay off 86 employees and end certain development programs as it restructures to extend cash for operations, the company said Thursday.
- The biopharma said it will shift its focus to immuno-inflammatory therapies under development and seek partners to sell its commercial dermatology products, Rhofade and Eskata.
- The moves will cost between $3 million and $3.5 million over six months, excluding non-cash charges, Aclaris said in a Thursday statement. Cash payments for the restructuring should be largely done by the end of March, the Wayne, Pennsylvania-based company said.
Dive Insight:
The moves will give the company breathing room to focus on a pipeline that includes a Phase 1 treatment for rheumatoid arthritis known as ATI-450. Aclaris expects the layoffs and refocusing to preserve enough cash to fund operations into the third quarter of 2021.
Last month, when the company announced it was undertaking a strategic review, Aclaris estimated it had access to enough money to fund operations into the fourth quarter of 2020. It reported cash, cash equivalents and marketable securities worth $115.5 million as of June 30.
Aclaris said it will no longer use a sales force to promote Rhofade (oxymetazoline), a treatment for redness associated with rosacea, but will continue to sell and distribute the product while it looks for a marketing partner. Aclaris already decided to stop marketing Eskata (hydrogen peroxide), a topical solution to treat skin growths known as seborrheic keratoses, because of disappointing sales.
The company had net revenue of $10.9 million in the first six months of 2019, with sales of Rhofade reaching $8.4 million and Eskata bringing in $300,000.
Aclaris CEO Neal Walker said the restructuring will remove expenses and risks associated with a commercial infrastructure, giving the company needed cash to focus on its immuno-inflammatory medicines.
“Although de-emphasizing its commercial products is disappointing to some investors we have spoken with, we think [Aclaris] is doing the right thing to position itself better for future growth,” Cantor Fitzgerald analyst Louise Chen wrote in a note to investors today.
Aclaris isn’t the only biopharma discussing restructuring this week. Zafgen and Abeona Therapeutics both said they’ve engaged advisors to review strategic options, including possible mergers.
Investors will be able to get more financial guidance on the Aclaris restructuring with the release of third-quarter operating results, the company said. Aclaris also plans to hold an R&D-focused investor event on Sept. 27 in New York.