On Tuesday, Aclaris Therapeutics Inc . (NASDAQ:ACRS) received an upgrade in its stock rating by BTIG from Neutral to Buy. The firm also set a new price target of $8.00 for Aclaris, indicating a positive outlook for the company's shares.
This decision was influenced by the promising prospects of Aclaris' treatments for atopic dermatitis, BSI-045B and ATI-2138, which have been assigned probabilities of success at 70% and 55% respectively.
The upgrade comes after Aclaris acquired full ex-China rights to an anti-TSLP humanized monoclonal antibody (mAb), known as BSI-045B, and an anti-TSLP/IL4R bispecific mAb from the China-based company, Biosion (Private).
BTIG noted the significant potency of BSI-045B, highlighting that it is likely best-in-class with its potency being 71 times greater than tezepelumab and two to nine times higher than other anti-TSLP therapies currently in development.
BTIG's analysis also pointed to the potential of BSI-045B to become an early-line treatment option for atopic dermatitis (AD). This optimism is supported by Phase 2a open label Proof of Concept (PoC) data, where 300mg of BSI-045B administered every two weeks showed EASI-75/90 rates of 94%/65% at 26 weeks without any topical corticosteroids (TCS).
These results are seen as favorable when compared to currently approved therapies like Dupixent, Adbry, and Ebglsyss, which showed 56% to 70% / 33% to 41% at 16 weeks in pivotal studies.
Although the data for BSI-045B are still in early stages and have been evaluated at a different timepoint compared to commercial agents (26 weeks vs. 16 weeks for approved options), BTIG believes the results warrant further investigation in the indication.
The firm's confidence in Aclaris' pipeline led to the reduction of their discount rate from 25.0% to 17.5%, reinforcing the positive sentiment towards the company's stock.
In other recent news, Aclaris Therapeutics has been the recipient of several significant analyst upgrades and has made strategic moves to expand its portfolio.
Jefferies analyst raised the company's rating from Hold to Buy and increased the price target to $7, following a promising discussion about the company's drug candidate BSI-045B for Atopic Dermatitis (AD).
This comes as Piper Sandler also upgraded Aclaris from Neutral to Overweight, following the acquisition of two inflammation and immunology assets from Biosion. However, Stifel maintained a Hold rating on the company.
Aclaris Therapeutics has secured an exclusive licensing agreement with Biosion, Inc., adding two potential immunology drugs, BSI-045B and BSI-502, to its portfolio. The company has also raised about $80 million through a private stock sale with investors such as Vivo Capital and Forge Life Science Partners participating.
In terms of research and development, Aclaris has initiated a Phase 2a trial for ATI-2138, a potential treatment for moderate-to-severe atopic dermatitis.
Also, the company sold a portion of its future royalty earnings from OLUMIANT, a treatment for alopecia areata, to OMERS, a Canadian pension plan, for an upfront payment of $26.5 million. These recent developments highlight the company's strategic efforts to advance its programs and secure its financial position.
InvestingPro Insights
The recent upgrade of Aclaris Therapeutics Inc. (NASDAQ:ACRS) by BTIG aligns with several key metrics and insights from InvestingPro. The company's stock has shown remarkable performance, with a 229.04% price total return over the past year and a significant 163.87% return in the last month alone. This strong momentum is reflected in an InvestingPro Tip noting that ACRS has seen a "significant return over the last week."
Despite the positive outlook on its treatments for atopic dermatitis, it's important to note that ACRS is not currently profitable, with a negative gross profit margin of -284.04% in the last twelve months. However, the company holds more cash than debt on its balance sheet, which could provide financial flexibility as it develops its promising pipeline.
Interestingly, while BTIG has set a price target of $8.00, the current InvestingPro Fair Value stands at $2.7, suggesting potential for further analysis. Investors should also consider that two analysts have revised their earnings upwards for the upcoming period, which may reflect growing confidence in the company's prospects.
For a more comprehensive analysis, InvestingPro offers 11 additional tips for ACRS, providing deeper insights into the company's financial health and market position.
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