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our plans to develop and commercialize our drug candidates; |
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the timing of our planned clinical trials of A-101 in patients with SK and our other drug candidates; |
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the timing of our NDA filing for A-101 for the treatment of SK; |
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the timing of and our ability to obtain and maintain regulatory approvals for our drug candidates; |
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the clinical utility of our drug candidates; |
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our commercialization, marketing and manufacturing capabilities and strategy; |
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our expectations about the willingness of patients to pay out of pocket for procedures using our drug candidates for the treatment of SK; |
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our expectations about the willingness of dermatologists to use A-101 for the treatment of SK; |
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our intellectual property position; |
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our plans to in-license or acquire additional drug candidates for other dermatological conditions to build a fully integrated dermatology company; and |
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our estimates regarding future revenue, expenses and needs for additional financing. |
You should refer to “Item 1A. Risk Factors” in this Annual Report for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward‑looking statements. As a result of these factors, we cannot assure you that the forward‑looking statements in this Annual Report will prove to be accurate. Furthermore, if our forward‑looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward‑looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. The forward-looking statements in this Annual Report represent our views as of the date of this Annual Report. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we undertake no obligation to publicly update any forward‑looking statements, whether as a result of new information, future events or otherwise, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Annual Report.
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PART I
Item 1. Business
Overview
We are a clinical-stage specialty pharmaceutical company focused on identifying, developing and commercializing innovative and differentiated drugs to address significant unmet needs in dermatology. Our lead drug candidate, A-101 Topical Solution, is a proprietary high-concentration hydrogen peroxide topical solution that we are developing as a prescription treatment for seborrheic keratosis, or SK, a common non-malignant skin tumor. We have completed three Phase 2 clinical trials of A-101 in over 300 patients with SK. In these trials, following one or two applications of A-101, we observed clinically relevant and statistically significant improvements in clearing SK lesions on the face, trunk and extremities of the body. In the first quarter of 2016, we initiated two multi-center, double blind Phase 3 clinical trials and one open label Phase 3 clinical trial of A-101 in patients with SK. If the results of these trials are favorable, we plan to submit a New Drug Application, or NDA, for A-101 for the treatment of SK to the U.S. Food and Drug Administration, or FDA, in the fourth quarter of 2016. We also intend to develop A-101 as a prescription treatment for common warts, also known as verruca vulgaris, and A-102, a proprietary gel dosage form of hydrogen peroxide, as a prescription treatment for SK and common warts. In the fourth quarter of 2015, we initiated a Phase 2 clinical trial to evaluate A-101 for the treatment of common warts. We have also in-licensed the exclusive, worldwide rights to inhibitors of the Janus kinase, or JAK, family of enzymes, for specified dermatological conditions. We plan to develop these JAK inhibitors, A-201 and A-301, as potential treatments for hair loss associated with an autoimmune skin disease known as alopecia areata, or AA, and potentially for other dermatological conditions. We intend to in-license or acquire additional drug candidates and technologies to build a fully integrated dermatology company.
SK lesions are among the most common non-malignant skin tumors and one of the most frequent diagnoses made by dermatologists. SK lesions typically have a waxy, scaly, slightly elevated appearance, and multiple lesions are often present. Though the lesions are non-malignant, patients often elect to have their condition treated by a dermatologist, either because the lesions have become inflamed or because the patient feels they are cosmetically unattractive. SK lesions are usually treated by cryosurgery, electrodesiccation, curettage or excision. Each of these methods may be painful or can result in pigmentary changes or scarring at the treatment site. No drugs have been approved by the FDA for the treatment of SK.
A study published in the Journal of The American Academy of Dermatology in 2006, which we refer to as the AAD study, estimated that SK affects over 83 million people in the United States. Based on a market survey we commissioned in 2014, we estimate that there are 18.5 million patient visits to dermatologists for SK and dermatologists perform approximately 8.3 million procedures to remove SK lesions annually in the United States. We estimate that the cost of these procedures to third-party payors and patients is more than $1.2 billion annually.
In June 2014, we completed our Phase 2 clinical trial of A-101 in 35 patients with four SK lesions on the trunk; in December 2014, we completed our Phase 2 clinical trial of A-101 in 172 patients with four SK lesions on the trunk and extremities; and in March 2015, we completed our Phase 2 clinical trial of A-101 in 119 patients with a single SK lesion on the face. In each of these trials, following one or two applications of the two highest concentrations of A-101, we observed clinically relevant and statistically significant improvements in clearing SK lesions.
In the first quarter of 2016, we initiated three Phase 3 clinical trials of A-101 in patients with SK lesions on the face, trunk and extremities. Two of these trials are being conducted on a double-blind basis, while the third is open label. If the results of these Phase 3 clinical trials are favorable, we intend to submit our NDA for A-101 for the treatment of SK to the FDA in the fourth quarter of 2016 and build a specialty sales force to market the product to dermatologists in the United States. We plan to seek a collaborator to commercialize A-101, if approved, in the European Union. We have the exclusive right to commercialize A-101, if approved, in various countries throughout the world.
We also plan to develop A-101 for the treatment of common warts. Although common warts are generally not harmful and in most cases eventually clear without any medical treatment, they may be painful and aesthetically unattractive and are contagious. On an annual basis, 1.9 million people are diagnosed with common warts. The AAD study estimated that annual direct expenditures for patients seeking treatment for warts of all types in a medical office were $939 million, including the cost of the office visit as well as the treatments. We estimate that approximately one-half of those expenditures were for the treatment of common warts. Common warts can be removed with slow-acting,