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Table of Contents

7

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                      

Commission File Number 001-37581

Aclaris Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization)

46-0571712
(I.R.S. Employer
Identification No.)

640 Lee Road, Suite 200
Wayne, PA
(Address of principal executive offices)

19087
(Zip Code)

Registrant’s telephone number, including area code: (484324-7933

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:

 

Trading Symbol(s)

Name of Each Exchange on which Registered

Common Stock, $0.00001 par value

 

ACRS

The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934:

Large accelerated filer  

Accelerated filer  

Non-accelerated filer  

Smaller reporting company  

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).   Yes  No 

The number of outstanding shares of the registrant’s common stock, par value $0.00001 per share, as of the close of business on October 29, 2021 was 61,227,333.

Table of Contents

ACLARIS THERAPEUTICS, INC.

INDEX TO FORM 10-Q

    

PAGE

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

2

Unaudited Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020

2

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021 and 2020

3

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2021 and 2020

4

Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020

5

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

20

Item 3. Quantitative and Qualitative Disclosures about Market Risk

35

Item 4. Controls and Procedures

35

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

36

Item 1A. Risk Factors

37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

37

Item 6. Exhibits

37

Signatures

39

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

ACLARIS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data)

    

September 30, 

December 31, 

 

    

2021

    

2020

 

 

Assets

Current assets:

Cash and cash equivalents

$

53,602

$

22,063

Short-term marketable securities

 

144,280

 

32,068

Accounts receivable, net

811

772

Prepaid expenses and other current assets

 

7,089

 

2,590

Total current assets

 

205,782

 

57,493

Marketable securities

 

45,735

 

Property and equipment, net

 

1,170

 

1,654

Intangible assets

7,067

7,123

Other assets

 

3,740

 

4,514

Total assets

$

263,494

$

70,784

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

7,564

$

5,254

Accrued expenses

 

7,408

 

5,906

Current portion of lease liabilities

669

603

Discontinued operations - current liabilities

2,198

3,111

Total current liabilities

 

17,839

 

14,874

Other liabilities

2,507

 

3,179

Long-term debt, net

10,653

Contingent consideration

26,200

4,061

Deferred tax liability

 

367

 

367

Total liabilities

 

46,913

 

33,134

Commitments and contingencies (Note 17)

Stockholders’ Equity:

Preferred stock, $0.00001 par value; 10,000,000 shares authorized and no shares issued or outstanding at September 30, 2021 and December 31, 2020

Common stock, $0.00001 par value; 100,000,000 shares authorized at September 30, 2021 and December 31, 2020; 61,226,750 and 45,109,314 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

 

1

 

Additional paid‑in capital

 

789,186

 

542,286

Accumulated other comprehensive loss

 

(3)

 

(94)

Accumulated deficit

 

(572,603)

 

(504,542)

Total stockholders’ equity

 

216,581

 

37,650

Total liabilities and stockholders’ equity

$

263,494

$

70,784

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

Nine Months Ended

September 30, 

September 30, 

    

2021

    

2020

    

2021

    

2020

Revenues:

Contract research

$

1,415

$

1,331

$

4,556

$

4,373

Other revenue

244

118

704

529

Total revenue

1,659

1,449

5,260

4,902

Costs and expenses:

Cost of revenue

1,099

1,189

3,564

3,847

Research and development

 

13,976

6,240

 

29,711

 

20,382

General and administrative

 

5,979

3,859

 

16,676

 

15,632

Revaluation of contingent consideration

900

626

22,139

2,393

Total costs and expenses

 

21,954

 

11,914

 

72,090

 

42,254

Loss from operations

 

(20,295)

 

(10,465)

 

(66,830)

 

(37,352)

Other expense, net

 

(851)

 

(194)

 

(1,231)

 

(205)

Loss from continuing operations

(21,146)

(10,659)

(68,061)

(37,557)

Loss from discontinued operations

(285)

Net loss

$

(21,146)

$

(10,659)

$

(68,061)

$

(37,842)

Net loss per share, basic and diluted

$

(0.35)

$

(0.25)

$

(1.23)

$

(0.90)

Weighted average common shares outstanding, basic and diluted

 

61,219,321

 

42,802,582

 

55,215,037

 

42,187,140

Other comprehensive income (loss):

Unrealized gain (loss) on marketable securities, net of tax of $0

$

5

$

(24)

$

(5)

$

(1)

Foreign currency translation adjustment

176

(36)

96

22

Total other comprehensive income (loss)

 

181

 

(60)

 

91

 

21

Comprehensive loss

$

(20,965)

$

(10,719)

$

(67,970)

$

(37,821)

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

Paidin

Comprehensive

Accumulated

Stockholders’

 

  

  Shares 

  

Value

  

Capital

  

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

Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units

1,024,666

1,041

1,041

Issuance of common stock in connection with public offering, net of offering costs of $8,899

8,098,592

1

134,851

134,852

Unrealized gain on marketable securities

25

25

Foreign currency translation adjustment

(69)

(69)

Stock-based compensation expense

3,833

3,833

Net loss

(18,161)

(18,161)

Balance at June 30, 2021

61,204,987

$

1

$

785,455

$

(184)

$

(551,457)

$

233,815

Issuance of common stock in connection with vesting of restricted stock units

21,763

29

29

Unrealized gain on marketable securities

5

5

Foreign currency translation adjustment

176

176

Stock-based compensation expense

3,702

3,702

Net loss

(21,146)

(21,146)

Balance at September 30, 2021

61,226,750

$

1

$

789,186

$

(3)

$

(572,603)

$

216,581

Accumulated

Common Stock

Additional

Other

Total

Par

Paidin

Comprehensive

Accumulated

Stockholders’

  

  Shares 

  

Value

  

Capital

  

Income (Loss)

  

Deficit

  

Equity

Balance at December 31, 2019

41,485,638

$

$

523,505

$

(66)

$

(453,527)

$

69,912

Issuance of common stock in connection with vesting of restricted stock units

346,582

(121)

(121)

Fair value of warrants issued

378

378

Unrealized gain on marketable securities

60

60

Foreign currency translation adjustment

53

53

Stock-based compensation expense

3,453

3,453

Net loss

(15,586)

(15,586)

Balance at March 31, 2020

41,832,220

$

$

527,215

$

47

$

(469,113)

$

58,149

Issuance of common stock in connection with vesting of restricted stock units

858,894

(463)

(463)

Unrealized loss on marketable securities

(37)

(37)

Foreign currency translation adjustment

5

5

Stock-based compensation expense

3,309

3,309

Net loss

(11,597)

(11,597)

Balance at June 30, 2020

42,691,114

$

$

530,061

$

15

$

(480,710)

$

49,366

Issuance of common stock in connection with vesting of restricted stock units

103,689

(95)

(95)

Issuance of common stock in connection with equity purchase agreement

121,584

263

263

Unrealized loss on marketable securities

(24)

(24)

Foreign currency translation adjustment

(35)

(35)

Stock-based compensation expense

1,941

1,941

Net loss

(10,659)

(10,659)

Balance at September 30, 2020

42,916,387

$

$

532,170

$

(44)

$

(491,369)

$

40,757

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ACLARIS THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Nine Months Ended

 

September 30, 

    

2021

    

2020

 

Cash flows from operating activities:

    

    

    

    

Net loss

$

(68,061)

$

(37,842)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

 

726

 

1,773

Stock-based compensation expense

 

10,209

 

8,703

Revaluation of contingent consideration

22,139

2,393

Loss on extinguishment of debt

752

Changes in operating assets and liabilities:

Accounts receivable

(39)

4,783

Prepaid expenses and other assets

 

(8)

 

1,303

Accounts payable

 

1,293

 

(5,448)

Accrued expenses

 

(2,070)

 

(5,441)

Net cash used in operating activities

 

(35,059)

 

(29,776)

Cash flows from investing activities:

Purchases of property and equipment

 

(108)

 

(445)

Purchases of marketable securities

 

(199,862)

 

(39,898)

Proceeds from sales and maturities of marketable securities

 

41,514

 

49,035

Net cash provided by (used in) investing activities

 

(158,456)

 

8,692

Cash flows from financing activities:

Proceeds from issuance of common stock in connection with public offerings, net of issuance costs

238,200

Proceeds from debt financing (including warrants), net of issuance costs

10,913

Repayment of debt

(11,483)

Restricted stock unit employee tax withholdings

(3,122)

Finance lease payments

(128)

Deferred issuance costs

(242)

Proceeds from exercise of employee stock options and the issuance of stock

1,459

Net cash provided by financing activities

 

225,054

 

10,543

Net increase (decrease) in cash, cash equivalents and restricted cash

 

31,539

 

(10,541)

Cash, cash equivalents and restricted cash at beginning of period

 

22,063

 

35,937

Cash, cash equivalents and restricted cash at end of period

$

53,602

$

25,396

Supplemental disclosure of non-cash investing and financing activities:

Fair value of warrants issued in connection with debt financing

$

$

378

Fair value of common stock issued in connection with an equity purchase agreement

$

$

263

The accompanying notes are an integral part of these condensed consolidated financial statements.

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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 September 30, 2021, the Company had cash, cash equivalents and marketable securities of $243.6 million and an accumulated deficit of $572.6 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) and ATI-1777, 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.

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2. Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The accompanying condensed consolidated balance sheet as of September 30, 2021, the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020, the condensed consolidated statement of stockholders’ equity for the three and nine months ended September 30, 2021 and 2020, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 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 25, 2021 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 September 30, 2021, the results of its operations and comprehensive loss for the three and nine months ended September 30, 2021 and 2020, its changes in stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 and its cash flows for the nine months ended September 30, 2021 and 2020.  The condensed consolidated balance sheet data as of December 31, 2020 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 and nine months ended September 30, 2021 and 2020 are unaudited. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021, 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, 2020 included in the Company’s annual report on Form 10-K filed with the SEC on February 25, 2021.  

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, research and development expenses, 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.

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Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2020 included in the Company’s annual report on Form 10-K filed with the SEC on February 25, 2021.  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 4% and 40%.  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 5.9% and 7.8% 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:

September 30, 2021

 

(In thousands)

    

Level 1

    

Level 2

    

Level 3

    

Total

 

Assets:

   

    

    

    

    

    

    

    

Cash equivalents

$

50,631

$

$

$

50,631

Marketable securities

 

190,015

190,015

Total assets

$

50,631

$

190,015

$

$

240,646

Liabilities:

Contingent consideration

$

$

$

26,200

$

26,200

Total liabilities

$

$

$

26,200

$

26,200

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December 31, 2020

 

(In thousands)

    

Level 1

    

Level 2

    

Level 3

    

Total

 

Assets:

    

    

    

    

    

    

    

    

Cash equivalents

$

14,955

$

1,500

$

$

16,455

Marketable securities

 

32,068

32,068

Total assets

$

14,955

$

33,568

$

$

48,523

Liabilities:

Contingent consideration

$

$

$

4,061

$

4,061

Total liabilities

$

$

$

4,061

$

4,061

As of September 30, 2021 and December 31, 2020, the Company’s cash equivalents consisted of a money market fund, which was valued based upon Level 1 inputs.  The Company’s cash equivalents as of December 31, 2020 also included commercial paper, which was valued based upon Level 2 inputs.  The Company’s marketable securities as of September 30, 2021 and December 31, 2020 consisted of commercial paper and asset-backed and U.S. government agency debt securities, which were valued based upon Level 2 inputs.  The Company’s marketable securities as of September 30, 2021 also included corporate debt securities and foreign government agency debt securities, which were 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 nine months ended September 30, 2021 and 2020, there were no transfers between Level 1, Level 2 and Level 3.

The increase in contingent consideration of $22.1 million during the nine months ended September 30, 2021 resulted from updates to the Company’s probability of achieving regulatory milestones and commencing commercialization and estimated future sales level assumptions as a result of the completion of a Phase 2a clinical trial of zunsemetinib in subjects with moderate to severe rheumatoid arthritis and the inclusion of estimated future sales of zunsemetinib for the potential treatment of psoriatic arthritis and moderate to severe hidradenitis suppurativa, which are additional planned indications for zunsemetinib, as well as a result of the completion of a Phase 2a clinical trial of ATI-1777 in subjects with moderate to severe atopic dermatitis.

As of September 30, 2021 and December 31, 2020, the fair value of the Company’s available for sale marketable securities by type of security was as follows:

September 30, 2021

 

Gross

Gross

 

Amortized

Unrealized

Unrealized

Fair

 

(In thousands)

Cost

Gain

Loss

Value

 

Marketable securities:

Corporate debt securities

$

36,725

$

3

(10)

$

36,718

Commercial paper

81,828

81,828

Asset-backed debt securities

37,229

3

(7)

37,225

Foreign government agency debt securities

4,112

(2)

4,110

U.S. government agency debt securities

30,124

10

30,134

Total marketable securities

$

190,018

$

16

$

(19)

$

190,015

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December 31, 2020

 

Gross

Gross

 

Amortized

Unrealized

Unrealized

Fair

 

(In thousands)

Cost

Gain

Loss

Value

 

Marketable securities:

Commercial paper

$

20,483

$

$

$

20,483

Asset-backed debt securities

4,036

1

4,037

U.S. government agency debt securities

7,547

1

7,548

Total marketable securities

$

32,066

$

2

$

$

32,068

4. Property and Equipment, Net

Property and equipment, net consisted of the following:

September 30, 

December 31, 

(In thousands)

2021

2020

 

Computer equipment

    

$

1,253

    

$

1,197

Lab equipment

1,389

1,340

Furniture and fixtures

620

617

Leasehold improvements

1,123

1,123

Property and equipment, gross

 

4,385

 

4,277

Accumulated depreciation

 

(3,215)

 

(2,623)

Property and equipment, net

$

1,170

$

1,654

Depreciation expense was $0.2 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $0.6 million and $0.9 million for the nine months ended September 30, 2021 and 2020, respectively.