What happened

Shares of Aclaris Therapeutics (ACRS -5.41%) were crashing 41.7% lower as of 11:29 a.m. ET on Monday. The huge decline came after the company announced preliminary top-line results from a phase 2a clinical study evaluating zunsemetinib (ATI-450) in treating moderate to severe hidradenitis suppurativa, a painful chronic skin condition.

Aclaris reported that the study didn't meet its primary efficacy endpoint of improvement in inflammatory nodule/abscess count compared to placebo. The study also failed to meet its secondary efficacy endpoints. However, zunsemetinib's overall safety profile and its pharmacokinetics (PK) and pharmacodynamics (PD) were generally consistent with what the company has observed in prior clinical studies.

So what

Zunsemetinib is Aclaris Therapeutics' lead pipeline candidate. It's not surprising that the biotech stock plunged after the announcement of the phase 2a clinical flop.

Aclaris did note that the placebo effect was higher across all efficacy endpoints than what the company has seen in other published studies of zunsemetinib in treating hidradenitis suppurativa. However, that isn't enough to make up for what is unquestionably a major setback for the pipeline candidate.

Now what

The small drugmaker isn't throwing in the towel with zunsemetinib. Aclaris Therapeutics CEO Doug Manion said in a press release that the company "continue[s] to look forward to our next data read out of our phase 2b study of zunsemetinib in patients with moderate to severe rheumatoid arthritis." The experimental therapy is also being evaluated in another phase 2 study targeting psoriatic arthritis.

In addition, Aclaris' pipeline includes two other clinical-stage programs. The company is evaluating ATI-1777 in phase 2 testing as a topical treatment for atopic dermatitis. It's also studying ATI-2138 in an early-stage clinical study targeting T cell-mediated autoimmune diseases.