Aclaris Therapeutics Inc. (NASDAQ: ACRS) expects to raise $75 million in its upcoming IPO. Based in Malvern, Pennsylvania, Aclaris Therapeutics is a clinical-stage specialty pharmaceutical that develops and markets topical treatments to address various dermatological conditions.

ACRS will offer 5 million shares at an expected price range of $14 to $16. If the underwriters price the IPO at the midpoint of that range, ACRS will have a market capitalization of $291 million.

ACRS filed for the IPO on August 17, 2015.

Lead Underwriters: Citigroup Global Markets and Jeffries LLC

Underwriters: William Blair & Co.

Business Summary: Specialty Pharmaceutical Company Developing Dermatological Treatments

Aclaris Therapeutics is a clinical-stage specialty pharmaceutical company that focuses on identifying, developing and marketing topical treatments that address a variety of skin conditions. Its primary drug candidate is A-101, a hydrogen peroxide topical solution that has completed Phase II clinical trials for the treatment of seborrheic keratosis (SK), a relatively common benign skin tumor. A-101 is also being considered as a prescription treatment for common warts, and it is in Phase I trials for this application. In addition, Aclaris Therapeutics is developing A-102, a proprietary topical gel form of hydrogen peroxide for the treatment of SK and common warts.

Aclaris Therapeutics intends to initiate Phase III clinical trials of A-101 for the treatment of SK in the first quarter of 2016. If those trials are successful, the company expects to submit a New Drug Application (NDA) to the FDA in the fourth quarter of 2016. In addition, the company recently in-licensed the exclusive, global rights to the Janus kinase (JAK) family of enzymes, which treat certain dermatological conditions. Aclaris Therapeutics intends to develop the JAK inhibitors to treat hair loss due to the autoimmune skin disease, alopecia areata.

See the full pipeline here.

The company expects to use the proceeds of the IPO to continue funding future clinical trials of A-101 and research and development associated with its other drug candidates.

Executive Management Overview

President, CEO, Director and Co-founder Neal Walker has served in his positions since the inception of the company in July 2012. He is also a co-founder of NeXeption LLC. His previous experience includes co-founding a number of life science companies including at Vicept Therapeutics, Octagon Research Solutions, Trigenesis Therapeutics and Cutix. In addition, he began his career at Johnson & Johnson. Dr. Walker received his M.B.A. degree from The Wharton School, University of Pennsylvania, his Doctor of Osteopathic Medicine degree from the Philadelphia College of Osteopathic Medicine and a B.A. degree in Biology from Lehigh University.

COO and Co-founder Christopher Powala has served in his capacity since the launch of Aclaris in 2012. In addition, he is a co-founder of Vicept Therapeutics. His previous experience includes positions at Vital Therapies, CollaGenex Pharmaceuticals and Wyeth Laboratories. Mr. Powala received his bachelor's degree in Biology from State University of New York-Regents College.

Potential Competition: Skincentral Sciences, Nielsen BioSciences and BioLineRx Ltd.

Currently, Aclaris Therapeutics knows of only one other biopharmaceutical company developing a treatment for SK. That company is BioLineRX Ltd. In addition, Skincentral Sciences makes a line of cosmetic products that target certain skin conditions including SK. However, neither product has received FDA approval for sale in the United States. For the treatment of common warts, Nielsen BioSciences is working on a prescription treatment, and G&E Herbal Biotechnology expects to initiate Phase II clinical trials for a topical prescription treatment.

Financial Highlights: Early Stage Losses

Aclaris Therapeutics provided the following figures from its financial documents for the six months ended June 30:

As of June 30, 2015:

Conclusion: Hold Off

We like ACRS' dermatology focus; however are concerned about the firm's early stage and reliance on a single drug candidate. Lack of revenues and consistent losses are typical of a pre-commercial biopharma firm; at the same time, it makes it difficult to predict the firm's viability as an investment.

A relatively small syndicate also gives us pause. We suggest investors hold off.