Aclaris Therapeutics, Inc. 10-Q

Item 1. Financial Statements ACLARIS THERAPEUTICS, IN C. CONDENSED CONSOLIDATED BALANCE SHEET S (Unaudited) ​ (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2022 2021 ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 36,342 ​ $ 27,349 ​ Short-term marketable securities ​ 143,280 ​ 164,065 ​ Accounts receivable, net ​ ​ 633 ​ ​ 623 ​ Prepaid expenses and other current assets ​ 10,626 ​ 12,995 ​ Total current assets ​ 190,881 ​ 205,032 ​ Marketable securities ​ 23,955 ​ 34,242 ​ Property and equipment, net ​ 1,277 ​ 1,335 ​ Intangible assets ​ ​ 7,030 ​ ​ 7,048 ​ Other assets ​ 3,384 ​ 3,554 ​ Total assets ​ $ 226,527 ​ $ 251,211 ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 8,121 ​ $ 9,985 ​ Accrued expenses ​ 5,687 ​ 10,051 ​ Current portion of lease liabilities ​ ​ 716 ​ ​ 693 ​ Discontinued operations ​ ​ 2,202 ​ ​ 2,202 ​ Total current liabilities ​ 16,726 ​ 22,931 ​ Other liabilities ​ ​ 2,035 ​ 2,172 ​ Contingent consideration ​ ​ 27,200 ​ ​ 28,400 ​ Deferred tax liability ​ 367 ​ 367 ​ Total liabilities ​ 46,328 ​ 53,870 ​ Commitments and contingencies (Note 16) ​ ​ ​ ​ ​ ​ ​ Stockholders’ Equity: ​ ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.00001 par value; 10,000,000 shares authorized and no shares issued or outstanding at March 31, 2022 and December 31, 2021 ​ ​ — ​ ​ — ​ Common stock, $ 0.00001 par value; 100,000,000 shares authorized at March 31, 2022 and December 31, 2021; 61,737,483 and 61,228,446 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively ​ 1 ​ 1 ​ Additional paid‑in capital ​ 795,366 ​ 792,971 ​ Accumulated other comprehensive loss ​ ( 972 ) ​ ( 224 ) ​ Accumulated deficit ​ ( 614,196 ) ​ ( 595,407 ) ​ Total stockholders’ equity ​ 180,199 ​ 197,341 ​ Total liabilities and stockholders’ equity ​ $ 226,527 ​ $ 251,211 ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 2 Table of Contents ACLARIS THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) ​ (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ 2022 2021 ​ Revenues: ​ ​ ​ ​ ​ ​ ​ Contract research ​ $ 1,221 ​ $ 1,535 ​ Other revenue ​ ​ 232 ​ ​ 242 ​ Total revenue ​ ​ 1,453 ​ ​ 1,777 ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs and expenses: ​ ​ ​ ​ ​ ​ ​ Cost of revenue ​ ​ 1,155 ​ ​ 1,202 ​ Research and development 14,306 ​ 7,838 ​ General and administrative 6,099 ​ 4,827 ​ Revaluation of contingent consideration ​ ​ ( 1,200 ) ​ ​ 16,439 ​ Total costs and expenses 20,360 ​ 30,306 ​ Loss from operations ( 18,907 ) ​ ( 28,529 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net 118 ​ ( 225 ) ​ Net loss ​ $ ( 18,789 ) ​ $ ( 28,754 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share, basic and diluted ​ $ ( 0.31 ) ​ $ ( 0.57 ) ​ Weighted average common shares outstanding, basic and diluted ​ 61,431,026 ​ 50,337,807 ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive loss: ​ ​ ​ ​ ​ ​ ​ Unrealized loss on marketable securities, net of tax of $ 0 ​ $ ( 748 ) ​ $ ( 35 ) ​ Foreign currency translation adjustment ​ ​ — ​ ​ ( 11 ) ​ Total other comprehensive loss ​ ( 748 ) ​ ( 46 ) ​ Comprehensive loss ​ $ ( 19,537 ) ​ $ ( 28,800 ) ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 3 Table of Contents ACLARIS THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) ​ (In thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Additional ​ Other ​ ​ ​ Total ​ ​ ​ ​ Par ​ Paid ‑ in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Value Capital Loss Deficit Equity Balance at December 31, 2021 ​ 61,228,446 ​ $ 1 ​ $ 792,971 ​ $ ( 224 ) ​ $ ( 595,407 ) ​ $ 197,341 ​ Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units ​ 509,037 ​ ​ — ​ ​ 49 ​ ​ — ​ ​ — ​ ​ 49 ​ Unrealized loss on marketable securities ​ — ​ ​ — ​ ​ — ​ ​ ( 748 ) ​ ​ — ​ ​ ( 748 ) ​ Stock-based compensation expense ​ — ​ ​ — ​ ​ 2,346 ​ ​ — ​ ​ — ​ ​ 2,346 ​ Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 18,789 ) ​ ​ ( 18,789 ) ​ Balance at March 31, 2022 ​ 61,737,483 ​ $ 1 ​ $ 795,366 ​ $ ( 972 ) ​ $ ( 614,196 ) ​ $ 180,199 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Additional ​ Other ​ ​ ​ Total ​ ​ ​ ​ Par ​ Paid ‑ in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ Shares Value Capital Income (Loss) Deficit Equity Balance at December 31, 2020 ​ 45,109,314 ​ $ — ​ $ 542,286 ​ $ ( 94 ) ​ $ ( 504,542 ) ​ $ 37,650 Issuance of common stock in connection with exercise of stock options and warrants and vesting of restricted stock units ​ 666,144 ​ ​ — ​ ​ ( 2,579 ) ​ ​ — ​ ​ — ​ ​ ( 2,579 ) Issuance of common stock in connection with public offering, net of offering costs of $ 7,011 ​ 6,306,271 ​ ​ — ​ ​ 103,348 ​ ​ — ​ ​ — ​ ​ 103,348 Unrealized loss on marketable securities ​ — ​ ​ — ​ ​ — ​ ​ ( 35 ) ​ ​ — ​ ​ ( 35 ) Foreign currency translation adjustment ​ — ​ ​ — ​ ​ — ​ ​ ( 11 ) ​ ​ — ​ ​ ( 11 ) Stock-based compensation expense ​ — ​ ​ — ​ ​ 2,675 ​ ​ — ​ ​ — ​ ​ 2,675 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 28,754 ) ​ ​ ( 28,754 ) Balance at March 31, 2021 ​ 52,081,729 ​ $ — ​ $ 645,730 ​ $ ( 140 ) ​ $ ( 533,296 ) ​ $ 112,294 ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 4 Table of Contents ACLARIS THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ 2022 2021 Cash flows from operating activities : ​ ​ ​ Net loss ​ $ ( 18,789 ) ​ $ ( 28,754 ) ​ Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 208 ​ 288 ​ Stock-based compensation expense ​ 2,346 ​ 2,675 ​ Revaluation of contingent consideration ​ ​ ( 1,200 ) ​ ​ 16,439 ​ Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ ( 10 ) ​ ​ ( 45 ) ​ Prepaid expenses and other assets ​ 188 ​ ( 2,250 ) ​ Accounts payable ​ ( 1,865 ) ​ 1,842 ​ Accrued expenses ​ ( 1,847 ) ​ ( 2,427 ) ​ Net cash used in operating activities ​ ( 20,969 ) ​ ( 12,232 ) ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ Purchases of property and equipment ​ ( 164 ) ​ — ​ Purchases of marketable securities ​ ( 14,558 ) ​ ( 85,814 ) ​ Proceeds from sales and maturities of marketable securities ​ 44,654 ​ 10,500 ​ Net cash provided by (used in) investing activities ​ 29,932 ​ ( 75,314 ) ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ Proceeds from issuance of common stock in connection with public offerings, net of issuance costs ​ ​ — ​ ​ 103,348 ​ Restricted stock unit employee tax withholdings ​ ​ ( 7 ) ​ ​ ( 3,014 ) ​ Proceeds from exercise of employee stock options and the issuance of stock ​ ​ 37 ​ ​ 416 ​ Net cash provided by financing activities ​ 30 ​ 100,750 ​ Net increase in cash and cash equivalents ​ 8,993 ​ 13,204 ​ Cash and cash equivalents at beginning of period ​ 27,349 ​ 22,063 ​ Cash and cash equivalents at end of period ​ $ 36,342 ​ $ 35,267 ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ Additions to property and equipment included in accounts payable ​ $ 111 ​ $ — ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 5 Table of Contents ACLARIS THERAPEUTICS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ​ ​ 1. Organization and Nature of Business ​ Overview ​ Aclaris Therapeutics, Inc. was incorporated under the laws of the State of Delaware in 2012. In July 2015, Aclaris Therapeutics International Limited (“ATIL”) was established under the laws of the United Kingdom as a wholly-owned subsidiary of Aclaris Therapeutics, Inc. In August 2017, Confluence Life Sciences, Inc. (now known as Aclaris Life Sciences, Inc.) (“Confluence”) was acquired by Aclaris Therapeutics, Inc. and became a wholly-owned subsidiary thereof. Aclaris Therapeutics, Inc., ATIL and Confluence are referred to collectively as the “Company.” The Company is a clinical-stage biopharmaceutical company focused on developing novel drug candidates for immuno-inflammatory diseases. In addition to developing its novel drug candidates, the Company is pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize its novel drug candidates. ​ Liquidity ​ The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. As of March 31, 2022, the Company had cash, cash equivalents and marketable securities of $ 203.6 million and an accumulated deficit of $ 614.2 million. Since inception, the Company has incurred net losses and negative cash flows from its operations. Prior to the acquisition of Confluence in August 2017, the Company had never generated revenue. There can be no assurance that profitable operations will ever be achieved, and, if achieved, will be sustained on a continuing basis. In addition, development activities, including clinical and preclinical testing of the Company’s drug candidates, will require significant additional financing. The future viability of the Company is dependent on its ability to successfully develop its drug candidates and to generate revenue from identifying and consummating transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize its development assets or to raise additional capital to finance its operations. The Company will require additional capital to complete the clinical development of zunsemetinib (ATI-450), ATI-1777 and ATI-2138, to develop its preclinical compounds, and to support its discovery efforts. ​ Additional funds may not be available on a timely basis, on commercially acceptable terms, or at all, and such funds, if raised, may not be sufficient to enable the Company to continue to implement its long-term business strategy. The Company’s ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19 pandemic. If the Company is unable to raise sufficient additional capital or generate revenue from transactions with potential third-party partners for the development and/or commercialization of its drug candidates, it may need to substantially curtail planned operations. The Company’s failure to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. ​ In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that its condensed consolidated financial statements are issued. As of the report date, the Company does not believe that substantial doubt exists about its ability to continue as a going concern. The Company believes its existing cash, cash equivalents and marketable securities are sufficient to fund its operating and capital expenditure requirements for a period greater than 12 months from the date of issuance of these condensed consolidated financial statements. ​ 6 Table of Contents ​ 2. Summary of Significant Accounting Policies ​ Unaudited Interim Financial Information ​ The accompanying condensed consolidated balance sheet as of March 31, 2022, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 and 2021, the condensed consolidated statement of stockholders’ equity for the three months ended March 31, 2022 and 2021, and the condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 24, 2022 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of March 31, 2022, the results of its operations and comprehensive loss for the three months ended March 31, 2022 and 2021, its changes in stockholders’ equity for the three months ended March 31, 2022 and 2021 and its cash flows for the three months ended March 31, 2022 and 2021. The condensed consolidated balance sheet data as of December 31, 2021 was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles in the United States (“GAAP”). The financial data and other information disclosed in these notes related to the three months ended March 31, 2022 and 2021 are unaudited. The results for the three months ended March 31, 2022 are not necessarily indicative of results to be expected for the year ending December 31, 2022, any other interim periods, or any future year or period. The unaudited interim financial statements of the Company included herein have been prepared, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2022. ​ Basis of Presentation ​ The accompanying condensed consolidated financial statements have been prepared in conformity with GAAP. The condensed consolidated financial statements of the Company include the accounts of the operating parent company, Aclaris Therapeutics, Inc., and its wholly-owned subsidiaries, ATIL and Confluence. All intercompany transactions have been eliminated. Based upon the Company’s revenue, the Company believes that gross profit does not provide a meaningful measure of profitability and, therefore, has not included a line item for gross profit on the condensed consolidated statement of operations. ​ Use of Estimates ​ The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, contingent consideration and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. The COVID-19 pandemic has resulted in a global slowdown in economic activity. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require an update to its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. Actual results could differ from the Company’s estimates. ​ Reclassifications ​ Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. ​ 7 Table of Contents Significant Accounting Policies ​ The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on February 24, 2022. Except as set forth below, there have been no changes to the Company’s significant accounting policies from those disclosed in the annual report. ​ Contingent Consideration ​ The Company initially recorded a contingent consideration liability at fair value on the date of acquisition related to future potential payments resulting from the acquisition of Confluence based upon significant unobservable inputs including the achievement of development, regulatory and commercial milestones, as well as estimated future sales levels and the discount rates applied to calculate the present value of the potential payments. Significant judgement was involved in determining the appropriateness of these assumptions. These assumptions are considered Level 3 inputs. Revaluation of the contingent consideration liability can result from changes to one or more of these assumptions. The Company evaluates the fair value estimate of the contingent consideration liability on a quarterly basis with changes, if any, recorded as income or expense in the condensed consolidated statement of operations. ​ The fair value of contingent consideration is estimated using a probability-weighted expected payment model for regulatory milestone payments and a Monte Carlo simulation model for commercial milestone and royalty payments and then applying a risk-adjusted discount rate to calculate the present value of the potential payments. Significant assumptions used in the Company’s estimates include the probability of achieving regulatory milestones and commencing commercialization, which are based on an asset’s current stage of development and a review of existing clinical data. Probability of success assumptions ranged between 10 % and 40 % at March 31, 2022. Additionally, estimated future sales levels and the risk-adjusted discount rate applied to the potential payments are also significant assumptions used in calculating the fair value. The discount rate ranged between 7.7 % and 9.0 % depending on the year of each potential payment . ​ ​ 3. Fair Value of Financial Assets and Liabilities ​ The following tables present information about the fair value measurements of the Company’s financial assets and liabilities which are measured at fair value on a recurring and non-recurring basis, and indicate the level of the fair value hierarchy utilized to determine such fair values: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2022 (In thousands) Level 1 Level 2 Level 3 Total Assets: ​ ​ ​ ​ ​ Cash equivalents ​ $ 29,590 ​ $ — ​ $ — ​ $ 29,590 ​ Marketable securities ​ — ​ ​ 167,235 ​ ​ — ​ ​ 167,235 ​ Total assets ​ $ 29,590 ​ $ 167,235 ​ $ — ​ $ 196,825 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ — ​ $ — ​ $ 27,200 ​ $ 27,200 ​ Total liabilities ​ $ — ​ $ — ​ $ 27,200 ​ $ 27,200 ​ ​ 8 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 (In thousands) Level 1 Level 2 Level 3 Total Assets: ​ ​ ​ ​ ​ Cash equivalents ​ $ 21,678 ​ $ — ​ $ — ​ $ 21,678 ​ Marketable securities ​ — ​ ​ 198,307 ​ ​ — ​ ​ 198,307 ​ Total assets ​ $ 21,678 ​ $ 198,307 ​ $ — ​ $ 219,985 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ — ​ $ — ​ $ 28,400 ​ $ 28,400 ​ Total liabilities ​ $ — ​ $ — ​ $ 28,400 ​ $ 28,400 ​ ​ As of March 31, 2022 and December 31, 2021, the Company’s cash equivalents consisted of a money market fund, which was valued based upon Level 1 inputs. The Company’s marketable securities as of March 31, 2022 and December 31, 2021 consisted of commercial paper and corporate, asset-backed, foreign government agency and U.S. government agency debt securities, which were all valued based upon Level 2 inputs. ​ In determining the fair value of its Level 2 investments, the Company relied on quoted prices for identical securities in markets that are not active. These quoted prices were obtained by the Company with the assistance of a third-party pricing service based on available trade, bid and other observable market data for identical securities. Quarterly, the Company compares the quoted prices obtained from the third-party pricing service to other available independent pricing information to validate the reasonableness of the quoted prices provided. The Company evaluates whether adjustments to third-party pricing are necessary and, historically, the Company has not made adjustments to quoted prices obtained from the third-party pricing service. During the three months ended March 31, 2022 and 2021, there were no transfers into or out of Level 3. ​ The decrease in contingent consideration of $ 1.2 million during the three months ended March 31, 2022 was mainly due to higher discount rates, resulting from higher risk-free rates and wider credit spreads, being applied to potential payments relative to prior periods. The overall decrease in contingent consideration was partially offset by the impact of the passage of time. ​ As of March 31, 2022 and December 31, 2021, the fair value of the Company’s available-for-sale marketable securities by type of security was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2022 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair (In thousands) ​ Cost ​ Gain ​ Loss ​ Value Marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate debt securities (1) ​ $ 37,550 ​ $ — ​ $ ( 269 ) ​ $ 37,281 ​ Commercial paper ​ ​ 60,919 ​ ​ — ​ ​ — ​ ​ 60,919 ​ Asset-backed debt securities ​ ​ 20,262 ​ ​ — ​ ​ ( 116 ) ​ ​ 20,146 ​ Foreign government agency debt securities ​ ​ 4,075 ​ ​ — ​ ​ ( 38 ) ​ ​ 4,037 ​ U.S. government agency debt securities (2) ​ ​ 45,404 ​ ​ — ​ ​ ( 552 ) ​ ​ 44,852 ​ Total marketable securities ​ $ 168,210 ​ $ — ​ $ ( 975 ) ​ $ 167,235 ​ (1) Included in Corporate debt securities is $ 9.1 million with maturity dates between one and five years. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2) Included in US government agency debt securities is $ 14.9 million with maturity dates between one and five years. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized ​ Unrealized ​ Unrealized ​ Fair (In thousands) ​ Cost ​ Gain ​ Loss ​ Value Marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate debt securities (1) ​ $ 40,993 ​ $ 6 ​ $ ( 50 ) ​ $ 40,949 ​ Commercial paper ​ ​ 71,837 ​ ​ — ​ ​ — ​ ​ 71,837 ​ Asset-backed debt securities ​ ​ 36,166 ​ ​ — ​ ​ ( 43 ) ​ ​ 36,123 ​ Foreign government agency debt securities ​ ​ 4,073 ​ ​ — ​ ​ ( 13 ) ​ ​ 4,060 ​ U.S. government agency debt securities (2) ​ ​ 45,465 ​ ​ — ​ ​ ( 127 ) ​ ​ 45,338 ​ Total marketable securities ​ $ 198,534 ​ $ 6 ​ $ ( 233 ) ​ $ 198,307 ​ (1) Included in Corporate debt securities is $ 9.2 million with maturity dates between one and five years. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (2) Included in US government agency debt securities is $ 25.0 million with maturity dates between one and five years. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4. Property and Equipment, Net ​ Property and equipment, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ December 31, ​ (In thousands) ​ 2022 ​ 2021 Computer equipment $ 1,373 $ 1,380 ​ Lab equipment ​ ​ 1,700 ​ ​ 1,605 ​ Furniture and fixtures ​ ​ 620 ​ ​ 620 ​ Leasehold improvements ​ ​ 1,123 ​ ​ 1,123 ​ Property and equipment, gross ​ 4,816 ​ 4,728 ​ Accumulated depreciation ​ ( 3,539 ) ​ ( 3,393 ) ​ Property and equipment, net ​ $ 1,277 ​ $ 1,335 ​ ​ Depreciation expense was $ 0.2 million for each of the three months ended March 31, 2022 and 2021. ​ ​ 5. Intangible Assets ​ Intangible assets consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Cost ​ Accumulated Amortization ​ ​ ​ Remaining ​ ​ March 31, ​ ​ December 31, ​ ​ March 31, ​ ​ December 31, (In thousands, except years) ​ Life (years) 2022 2021 2022 2021 Other intangible assets ​ ​ 5.3 ​ $ 751 ​ $ 751 ​ $ 350 ​ $ 332 In-process research and development ​ ​ n/a ​ ​ 6,629 ​ ​ 6,629 ​ ​ — ​ ​ — Total intangible assets ​ ​ ​ ​ $ 7,380 ​ $ 7,380 ​ $ 350 ​ $ 332 ​ Amortization expense was $ 19 thousand for each of the three months ended March 31, 2022 and 2021. ​ 10 Table of Contents As of March 31, 2022, estimated future amortization expense was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ending ​ (In thousands) ​ December 31, ​ 2022 ​ $ 57 ​ 2023 ​ 75 ​ 2024 ​ 75 ​ 2025 ​ ​ 75 ​ 2026 ​ ​ 75 ​ Thereafter ​ ​ 44 ​ Total ​ $ 401 ​ ​ ​ ​ 6. Accrued Expenses ​ Accrued expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ (In thousands) 2022 2021 Employee compensation expenses ​ $ 2,184 ​ $ 4,389 ​ Research and development expenses ​ ​ 1,824 ​ ​ 1,278 ​ Litigation settlements (see Note 16) ​ ​ — ​ ​ 2,650 ​ Other ​ 1,679 ​ 1,734 ​ Total accrued expenses ​ $ 5,687 ​ $ 10,051 ​ ​ ​ ​ 7. Debt ​ Loan and Security Agreement – Silicon Valley Bank ​ In March 2020, the Company entered into a Loan and Security Agreement with Silicon Valley Bank (“SVB”). The Loan and Security Agreement provided for $ 11.0 million in term loans, of which the Company borrowed the entire amount on March 30, 2020. In connection with the Loan and Security Agreement, the Company issued to SVB a warrant to purchase up to 460,251 shares of common stock (the “Warrant”) (see Note 8). The proceeds of the Loan and Security Agreement were allocated to the term loan and Warrant using a relative fair value approach. ​ In July 2021, the Company repaid in full the $ 11.0 million that was outstanding under the Loan and Security Agreement, together with all accrued and unpaid interest and fees as of the payoff date, for a total payment of $ 11.7 million. Following this repayment, all of the Company’s obligations under the Loan and Security Agreement are deemed to be terminated, except as set forth in the agreement. ​ ​ 8. Stockholders’ Equity ​ Preferred Stock ​ As of March 31, 2022 and December 31, 2021, the Company’s amended and restated certificate of incorporation authorized the Company to issue 10,000,000 shares of undesignated preferred stock. There were no shares of preferred stock outstanding as of March 31, 2022 or December 31, 2021. ​ 11 Table of Contents Common Stock ​ As of March 31, 2022 and December 31, 2021, the Company’s amended and restated certificate of incorporation authorized the Company to issue 100,000,000 shares of $ 0.00001 par value common stock. There were 61,737,483 and 61,228,446 shares of common stock issued and outstanding as of March 31, 2022 and December 31, 2021, respectively. ​ Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to any preferential dividend rights of any series of preferred stock that may be outstanding. No dividends have been declared through March 31, 2022. ​ Warrants ​ The Warrant issued to SVB in March 2020 had an initial exercise price of $ 0.956 per share, subject to adjustment as provided in the Warrant. The Warrant became immediately exercisable in full upon the funding of the term loan facility. The Company assigned a fair value of $ 0.4 million to the Warrant using a Black-Scholes valuation methodology, and also concluded that the Warrant was indexed to its own stock and therefore classified the Warrant as an equity instrument. In January 2021, SVB net exercised the Warrant in full, and the Company issued to SVB 388,119 shares of common stock. ​ January 2021 Public Offering ​ In January 2021, the Company closed a public offering in which it sold 6,306,271 shares of common stock at a price to the public of $ 17.50 per share, for aggregate gross proceeds of $ 110.4 million. The Company paid underwriting discounts and commissions of $ 6.6 million, and also incurred expenses of $ 0.4 million in connection with the offering. As a result, the net offering proceeds received by the Company, after deducting underwriting discounts, commissions and offering expenses, were $ 103.3 million. ​ ​ 9. Stock-Based Awards ​ 2015 Equity Incentive Plan ​ In September 2015, the Company’s board of directors adopted the 2015 Equity Incentive Plan (the “2015 Plan”), and the Company’s stockholders approved the 2015 Plan. The 2015 Plan became effective in connection with the Company’s initial public offering in October 2015. Beginning at the time the 2015 Plan became effective, no further grants may be made under the Company’s 2012 Equity Compensation Plan, as amended and restated (the “2012 Plan”). The 2015 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock unit (“RSU”) awards, performance stock awards, cash-based awards and other stock-based awards. The number of shares initially reserved for issuance under the 2015 Plan was 1,643,872 shares of common stock. The number of shares of common stock that may be issued under the 2015 Plan will automatically increase on January 1 of each year ending on January 1, 2025, in an amount equal to the lesser of (i) 4.0 % of the shares of the Company’s common stock outstanding on December 31st of the preceding calendar year or (ii) an amount determined by the Company’s board of directors. The shares of common stock underlying any awards that expire, are otherwise terminated, settled in cash or repurchased by the Company under the 2015 Plan and the 2012 Plan will be added back to the shares of common stock available for issuance under the 2015 Plan. As of January 1, 2022, the number of shares of common stock that may be issued under the 2015 Plan was automatically increased by 2,449,137 shares. As of March 31, 2022, 3,685,011 shares remained available for grant under the 2015 Plan. The Company had 3,957,556 stock options and 1,394,476 RSUs outstanding as of March 31, 2022 under the 2015 Plan. ​ 2017 Inducement Plan ​ In July 2017, the Company’s board of directors adopted the 2017 Inducement Plan (the “2017 Inducement Plan”). The 2017 Inducement Plan is a non-stockholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq listing rules. The Company had 410,600 stock options and 5,575 RSUs outstanding as of March 12 Table of Contents 31, 2022 under the 2017 Inducement Plan. All shares of common stock that were eligible for issuance under the 2017 Inducement Plan after October 1, 2018, including any shares underlying any awards that expire or are otherwise terminated, reacquired to satisfy tax withholding obligations, settled in cash or repurchased by the Company in the future that would have been eligible for re-issuance under the 2017 Inducement Plan, were retired. ​ 2012 Equity Compensation Plan ​ Upon the 2015 Plan becoming effective, no further grants can be made under the 2012 Plan. The Company granted stock options to purchase a total of 1,140,524 shares under the 2012 Plan, of which 484,145 were outstanding as of March 31, 2022. Stock options granted under the 2012 Plan expire after ten years . ​ Stock Option Valuation ​ The weighted average assumptions the Company used to estimate the fair value of stock options granted during the three months ended March 31, 2022 and 2021 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ ​ 2022 ​ ​ 2021 ​ Risk-free interest rate 1.60 % ​ 0.90 % ​ Expected term (in years) 6.3 ​ ​ 6.3 ​ ​ Expected volatility 77.95 % ​ 76.60 % ​ Expected dividend yield 0 % ​ 0 % ​ ​ The Company recognizes compensation expense for awards over their vesting period. Compensation expense for awards includes the impact of forfeitures in the period when they occur. ​ Stock Options ​ The following table summarizes stock option activity for the three months ended March 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ Number ​ Exercise ​ Contractual ​ Intrinsic (In thousands, except share and per share data and years) ​ of Shares ​ Price ​ Term ​ Value ​ ​ ​ ​ ​ ​ ​ (in years) ​ ​ ​ Outstanding as of December 31, 2021 3,792,450 ​ $ 17.50 6.8 ​ $ 13,710 ​ Granted 1,459,600 ​ ​ 14.53 ​ ​ ​ ​ ​ ​ Exercised ( 29,040 ) ​ ​ 1.26 ​ ​ ​ ​ 476 ​ Forfeited and cancelled ( 370,709 ) ​ ​ 14.41 ​ ​ ​ ​ ​ ​ Outstanding as of March 31, 2022 4,852,301 ​ $ 16.94 7.0 ​ $ 18,355 ​ Options vested and expected to vest as of March 31, 2022 4,852,301 ​ $ 16.94 7.0 ​ $ 18,355 ​ Options exercisable as of March 31, 2022 2,600,651 ​ $ 17.92 4.9 ​ $ 11,400 ​ The weighted average grant date fair value of stock options granted during the three months ended March 31, 2022 was $ 9.97 per share. ​ 13 Table of Contents Restricted Stock Units ​ The following table summarizes RSU activity for the three months ended March 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Grant Date ​ Aggregate ​ ​ ​ Number ​ Fair Value ​ Intrinsic ​ (In thousands, except share and per share data) ​ of Shares ​ Per Share ​ Value ​ Outstanding as of December 31, 2021 ​ 1,496,946 ​ $ 12.75 ​ ​ ​ ​ Granted ​ 552,900 ​ ​ 14.56 ​ ​ ​ ​ Vested ​ ( 479,232 ) ​ ​ 10.84 ​ $ 7,128 ​ Forfeited and cancelled ​ ( 170,563 ) ​ ​ 12.10 ​ ​ ​ ​ Outstanding as of March 31, 2022 ​ 1,400,051 ​ $ 14.20 ​ ​ ​ ​ ​ Stock-Based Compensation ​ Stock-based compensation expense included in total costs and expenses on the condensed consolidated statement of operations included the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, (In thousands) 2022 2021 Cost of revenue $ 228 $ 247 ​ Research and development ​ ​ ( 113 ) ​ ​ 876 ​ General and administrative ​ 2,231 ​ 1,552 ​ Total stock-based compensation expense ​ $ 2,346 ​ $ 2,675 ​ ​ As of March 31, 2022, the Company had unrecognized stock-based compensation expense for stock options and RSUs of $ 23.2 million and $ 18.6 million, respectively, which is expected to be recognized over weighted average periods of 3.5 years and 3.2 years, respectively. ​ ​ 10. Net Loss per Share ​ Basic and diluted net loss per share is summarized in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, (In thousands, except for share and per share data) 2022 2021 ​ Numerator: ​ ​ ​ ​ Net loss ​ $ ( 18,789 ) ​ $ ( 28,754 ) ​ Denominator: ​ ​ ​ ​ ​ ​ ​ Weighted average shares of common stock outstanding, basic and diluted ​ 61,431,026 ​ 50,337,807 ​ Net loss per share, basic and diluted ​ $ ( 0.31 ) ​ $ ( 0.57 ) ​ ​ The Company’s potentially dilutive securities, which included stock options and RSUs, have been excluded from the computation of diluted net loss per share since the effect would be to reduce the net loss per share. Therefore, the weighted average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share is the same. The following table presents potential shares of common stock excluded from the calculation of diluted 14 Table of Contents net loss per share for the three months ended March 31, 2022 and 2021. All share amounts presented in the table below represent the total number outstanding as of March 31, 2022 and 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ 2022 ​ 2021 Options to purchase common stock ​ 4,852,301 ​ 3,714,466 ​ Restricted stock unit awards ​ 1,400,051 ​ 2,411,611 ​ Total potential shares of common stock ​ 6,252,352 ​ 6,126,077 ​ ​ ​ ​ 11. Leases ​ Operating Leases ​ Agreements for Office and Laboratory Space ​ The Company has a sublease agreement with Auxilium Pharmaceuticals, LLC (the “Sublandlord”) pursuant to which it subleases 33,019 square feet of office space for its headquarters in Wayne, Pennsylvania. The sublease has a term that runs through October 2023. If for any reason the lease between Chesterbrook Partners, LP (“Landlord”) and Sublandlord is terminated or expires prior to October 2023, the Company’s sublease will automatically terminate. In December 2020, the Company entered into a sub-sublease agreement under which it sub-subleased 8,115 square feet to a third party. The sub-sublease term runs concurrently with the original sublease agreement. ​ In February 2019, the Company entered into a sublease agreement with a third party for 20,433 square feet of office and laboratory space in St. Louis, Missouri. The lease commenced in June 2019 and has a term that runs through June 2029. ​ Supplemental balance sheet information related to operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ December 31, (In thousands) ​ 2022 ​ 2021 Operating Leases: ​ ​ ​ ​ ​ ​ Gross cost ​ $ 5,240 ​ $ 5,240 Accumulated amortization ​ ​ ( 1,986 ) ​ ​ ( 1,803 ) Other assets ​ $ 3,254 ​ $ 3,437 ​ ​ ​ ​ ​ ​ ​ Current portion of lease liabilities ​ $ 716 ​ $ 693 Other liabilities ​ ​ 2,015 ​ ​ 2,201 Total operating lease liabilities ​ $ 2,731 ​ $ 2,894 ​ Amortization expense related to operating lease right-of-use assets and accretion of operating lease liabilities totaled $ 0.3 million for each of the three months ended March 31, 2022 and 2021. ​ ​ 12. Agreements Related to Intellectual Property ​ Asset Purchase Agreement – EPI Health, LLC ​ In October 2019, the Company sold RHOFADE (oxymetazoline hydrochloride) cream, 1 % (“RHOFADE”) to EPI Health, LLC (“EPI Health”) pursuant to an asset purchase agreement. EPI Health agreed to pay the Company a high single-digit royalty calculated as a percentage of net sales on a country-by-country basis until the date that the patent rights related to RHOFADE have expired or, if later, ten years from the date of the first commercial sale of RHOFADE in such country. The Company recorded royalty income under the asset purchase agreement of $ 0.2 million during each of the 15 Table of Contents three months ended March 31, 2022 and 2021. Royalty income is included in other revenue on the condensed consolidated statements of operations and comprehensive loss. EPI Health has also agreed to pay the Company potential sales milestone payments of up to $ 20.0 million in the aggregate upon the achievement of specified levels of net sales of products covered by the asset purchase agreement, and 25 % of any upfront, license, milestone, maintenance or fixed payment received by EPI Health in connection with any license or sublicense of the assets transferred in the disposition in any territory outside of the United States, subject to specified exceptions. ​ Agreement and Plan of Merger – Confluence ​ In August 2017, the Company entered into an Agreement and Plan of Merger, pursuant to which it acquired Confluence (the “Confluence Agreement”). Under the Confluence Agreement, the Company agreed to pay the former Confluence equity holders aggregate remaining contingent consideration of up to $ 75.0 million based upon the achievement of specified regulatory and commercial milestones set forth in the Confluence Agreement. In addition, the Company agreed to pay the former Confluence equity holders future royalty payments calculated as a low single-digit percentage of annual net sales, subject to specified reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale of such product. In addition to the payments described above, if the Company sells, licenses or transfers any of the intellectual property acquired from Confluence pursuant to the Confluence Agreement to a third party, the Company will be obligated to pay the former Confluence equity holders a portion of any consideration received from such sale, license or transfer in specified circumstances. ​ As of March 31, 2022 and December 31, 2021, the balance of the Company’s contingent consideration liability was $ 27.2 million and $ 28.4 million, respectively (see Note 3). ​ ​ 13. Income Taxes ​ The Company did not record a federal or state income tax benefit for losses incurred during the three months ended March 31, 2022 and 2021. The Company concluded that it is more likely than not that its deferred tax assets will not be realized which resulted in recording a full valuation allowance during those periods. ​ ​ 14. Discontinued Operations ​ The following table presents information related to liabilities reported as discontinued operations in the Company’s condensed consolidated balance sheet: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, (In thousands) 2022 2021 Accrued expenses $ 2,202 ​ $ 2,202 Discontinued operations - current liabilities ​ $ 2,202 ​ $ 2,202 ​ ​ 15. Segment Information ​ The Company has two reportable segments, therapeutics and contract research. The therapeutics segment is focused on identifying and developing innovative therapies to address significant unmet needs for immuno-inflammatory diseases. The contract research segment earns revenue from the provision of laboratory services. Contract research revenue is generally evidenced by contracts with clients which are on an agreed upon fixed-price, fee-for-service basis. Corporate and other includes general and administrative expenses as well as eliminations of intercompany transactions. The Company does not report balance sheet information by segment since it is not reviewed by the chief operating decision maker, and all of the Company’s tangible assets are held in the United States. ​ 16 Table of Contents The Company’s results of operations by segment for the three months ended March 31, 2022 and 2021 are summarized in the tables below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ Contract ​ Corporate ​ Total Three Months Ended March 31, 2022 ​ Therapeutics ​ Research ​ and Other ​ Company Total revenue ​ $ 231 ​ $ 4,096 ​ $ ( 2,874 ) ​ $ 1,453 Cost of revenue ​ ​ — ​ ​ 3,854 ​ ​ ( 2,699 ) ​ ​ 1,155 Research and development ​ ​ 14,481 ​ ​ — ​ ​ ( 175 ) ​ ​ 14,306 General and administrative ​ ​ — ​ ​ 840 ​ ​ 5,259 ​ ​ 6,099 Revaluation of contingent consideration ​ ​ ( 1,200 ) ​ ​ — ​ ​ — ​ ​ ( 1,200 ) Loss from operations ​ $ ( 13,050 ) ​ $ ( 598 ) ​ $ ( 5,259 ) ​ $ ( 18,907 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ Contract ​ Corporate ​ Total Three Months Ended March 31, 2021 ​ Therapeutics ​ Research ​ and Other ​ Company Total revenue ​ $ 242 ​ $ 3,200 ​ $ ( 1,665 ) ​ $ 1,777 Cost of revenue ​ ​ — ​ ​ 2,769 ​ ​ ( 1,567 ) ​ ​ 1,202 Research and development ​ ​ 7,936 ​ ​ — ​ ​ ( 98 ) ​ ​ 7,838 General and administrative ​ ​ — ​ ​ 629 ​ ​ 4,198 ​ ​ 4,827 Revaluation of contingent consideration ​ ​ 16,439 ​ ​ — ​ ​ — ​ ​ 16,439 Loss from operations ​ $ ( 24,133 ) ​ $ ( 198 ) ​ $ ( 4,198 ) ​ $ ( 28,529 ) ​ Intersegment Revenue ​ Revenue for the contract research segment included $ 2.9 million and $ 1.7 million for services performed on behalf of the therapeutics segment for the three months ended March 31, 2022 and 2021, respectively. All intersegment revenue has been eliminated in the Company’s condensed consolidated statement of operations. ​ ​ 16. Legal Proceedings ​ Securities Class Action ​ On July 30, 2019, plaintiff Linda Rosi (“Rosi”) filed a putative class action complaint captioned Rosi v. Aclaris Therapeutics, Inc., et al. in the U.S. District Court for the Southern District of New York against the Company and certain of its executive officers. The complaint alleged that the defendants violated federal securities laws by, among other things, failing to disclose an alleged likelihood that regulators would scrutinize advertising materials related to ESKATA (hydrogen peroxide) topical solution, 40% (w/w) (“ESKATA”) and find that the materials minimized the risks or overstated the efficacy of the product. The complaint sought unspecified compensatory damages on behalf of Rosi and all other persons and entities that purchased or otherwise acquired the Company’s securities between May 8, 2018 and June 20, 2019. ​ On September 5, 2019, an additional plaintiff, Robert Fulcher (“Fulcher”), filed a substantially identical putative class action complaint captioned Fulcher v. Aclaris Therapeutics, Inc., et al. in the same court against the same defendants. ​ On November 6, 2019, the court consolidated the Rosi and Fulcher actions (together, the “Consolidated Securities Action”) and appointed Fulcher “lead plaintiff” for the putative class. ​ On January 24, 2020, Fulcher filed a consolidated amended complaint in the Consolidated Securities Action, naming two additional executive officers as defendants, extending the putative class period to August 12, 2019, and adding allegations concerning, among other things, alleged statements and omissions throughout the putative class period concerning ESKATA’s risks, tolerability and effectiveness. The defendants filed a motion to dismiss the consolidated amended complaint on April 17, 2020. Following briefing and oral argument on February 25, 2021, the motion was granted in part and denied in part on March 29, 2021, and the issues in dispute significantly narrowed. The defendants filed an answer to the remaining aspects of the consolidated amended complaint on April 19, 2021. ​ In June 2021, the defendants and the plaintiffs agreed to settle the Consolidated Securities Action. The parties signed and filed a settlement agreement in July 2021. On August 18, 2021, the court preliminarily approved the proposed 17 Table of Contents settlement, directed that notice be given to the putative class and scheduled the final approval settlement hearing for November 30, 2021. Notice was subsequently given to the putative class. The court granted final approval of the settlement on December 9, 2021. ​ The Company’s financial obligation under the settlement was $ 2.7 million which was within the limits of its insurance coverage. ​ ​ 17. Subsequent Event ​ Sales of Common Stock Pursuant to At-The-Market Facility ​ In April 2022, the Company sold 4,838,709 shares of its common stock at a weighted average price per share of $ 15.50 , for aggregate gross proceeds of $ 75.0 million, pursuant to a sales agreement with SVB Securities LLC and Cantor Fitzgerald & Co., as sales agents, dated May 20, 2021. The Company paid selling commissions of $ 2.2 million in connection with the sale. ​ 18 Table of Contents