Aclaris draws second downgrade despite Phase 2 win for eczema therapy

ozgurdonmaz/iStock via Getty Images Aclaris Therapeutics ( NASDAQ: ACRS ) drew a second downgrade on Wall Street this week as BTIG cut its rating to Neutral from Buy on Thursday after the company said its experimental eczema therapy, ATI 1777, reached the primary efficacy endpoint with twice daily dosing in a mid stage study.

Like Jefferies analyst Roger Song, who downgraded the stock on Wednesday, BTIG analyst Julian Harrison also notes the high placebo response rate as a reason for his decision. "The placebo response was higher than expectations, consistent across endpoints, and not clearly explained in the data disclosure," Harrison wrote removing his $8 target on the stock.

He opined that an efficacy rate to rival Incyte's ( INCY ) FDA approved topical eczema therapy would be a crucial success factor for ATI 1777. However, "we do not see yesterday's data providing sufficient clarity on that point," he added. While future business development activities for the drug can lead to upside, a lack of near term catalysts and yesterday's trial data "make the stock difficult to defend," the analyst said.

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