Study of ATI-1777 in Adult Patients With Moderate or Severe Atopic Dermatitis

Inclusion Criteria:

1. Able to comprehend and willing to sign the IRB approved informed consent form (ICF)prior to administration of study-related procedures.
2. Male patients or non-pregnant, non-nursing female patients 18 to 65 years old,inclusive, at the time of informed consent.
3. Pregnancy and Contraception:

• Women of childbearing potential (WOCBP), must have a negative serum pregnancytest at the Screening Visit, a negative urine pregnancy test immediately prior tothe first application of study medication on Day 1, and a negative urinepregnancy test at each study visit thereafter.
• WOCBP must agree to use 2 forms of highly effective contraception, including 1physical barrier (condom or diaphragm) plus another highly effective method, suchas adequate hormonal method (e.g., contraceptive implants, injectables, oralcontraceptives) or nonhormonal methods (e.g., intrauterine device, spermicidals)throughout the Screening Period and until 30 days after the last administrationof study medication.
• Male patients with partners of childbearing potential may be enrolled if theyare:
• Documented to be surgically sterile (vasectomy), or
• Using 2 adequate forms of highly effective contraception, 1 of which shouldbe a physical barrier until 90 days after the last administration of studymedication.

4. Have a diagnosis of AD fulfilling the specified diagnostic criteria of Hanifin andRajka (Hanifin and Rajka 1980).
5. Have at least a 6-month history of AD prior to the Screening Visit, and no significantAD flares for the 4 weeks prior to the Screening Visit.
6. Have at least 1 lesion that measures at least 3 cm2 at the Screening Visit and on Day 1 prior to the first dose of study medication. This lesion must be representative ofthe patient's disease state, but not located on the hands, feet, or genitalia.
7. Have a stable diagnosis of moderate or severe (IGA score 3 or 4) AD at the ScreeningVisit.
8. Have AD affecting 3% to 20% BSA (not including scalp, face, palms of hands, soles offeet, groin, and genitalia) at the Screening Visit.
9. Willing to refrain from washing area of treatment or swimming for 6 hours after eachstudy medication application.
10. Willing to refrain from excessive sun exposure (e.g., sunbathing and/or tanning salonvisits) and to minimize sun exposure (e.g., wear sun protective clothing, hat) as muchas possible.
11. Willing to refrain from use of moisturizers, emollients, and sunscreen on AD studytreatment areas for duration of protocol therapy.
12. Willing to refrain from participating in strenuous exercise that would cause profusesweating for a period of 6 hours after each study medication application.
13. Willing to return to the clinic, follow all study instructions, attend all studyvisits, and complete study procedures.
14. In good general health and free of any known disease state or physical condition that,in the investigator's opinion, might impair evaluation of the patient or that mightexpose the patient to an unacceptable risk by study participation.
15. Willing and capable of taking appropriate coronavirus disease 2019 (COVID-19) riskmitigation precautions (e.g., wearing a mask in public, adhering to social distancing,etc.) as recommended or required by local, state, or federal guidelines duringparticipation in the study.

Exclusion Criteria:

1. Unstable course of AD (spontaneously improving or rapidly deteriorating) based on thepatient history or as determined by the investigator during the Screening Period.
2. Refractory AD (i.e., AD that required frequent hospitalizations and/or frequentintravenous treatment for skin infections within the year before the Screening Visit).
3. AD of a severity (EASI >48) that the patient is not a candidate for avehicle-controlled study.
4. Any signs or symptoms associated with AD therapy (e.g., history of anaphylaxis,hypersensitivity reactions, skin atrophy, striae, pigmentary changes) that, in theinvestigator's opinion, might impair evaluation of the AD or which exposes the patientto unacceptable risk by study participation.
5. Concomitant skin disease or clinically infected AD or presence of other skin diseasein the area to be dosed that may interfere with study assessments.
6. Use of any of the following treatments within the indicated washout period prior toDay 1:

• Phototherapy (ultraviolet A, ultraviolet B, or psoralen and ultraviolet Atherapy) within 4 weeks prior to Day 1.
• Systemic biologic immunosuppressant or immunomodulatory therapy (e.g.,etanercept, alefacept, infliximab, dupilumab) within 12 weeks (or 5 half-lives ofthe product, whichever is longer) prior to Day 1.
• Non-biologic immunosuppressants (e.g., methotrexate, retinoids, calcineurininhibitors, cyclosporine, hydroxycarbamide [hydroxyurea], azathioprine) within 4weeks prior to Day 1.
• Janus kinase (JAK) inhibitors (systemic and topical) within 4 weeks prior to Day

• Systemic corticosteroids within 2 weeks prior to Day 1 (intranasal, inhaled, andtopical ocular corticosteroids are allowed).
• Cytostatic agents within 4 weeks prior to Day 1.
• Crisaborole within 2 weeks prior to Day 1.
• Systemic antibiotics within 30 days prior to Day 1.
• Topical treatments for AD (corticosteroids, calcineurin inhibitors, topical H1and H2 antihistamines, topical antimicrobials, and other medicated topicalagents) within 2 weeks prior to Day 1.
• Live attenuated vaccine treatment within 12 weeks prior to Day 1.
• Other investigational product within 30 days or 5 half-lives (whichever islonger) prior to Day 1.

7. Previous failure to respond to prior therapy with JAK inhibitors (systemic ortopical), as determined by the investigator.
8. Current use of an oral H1 antihistamine (e.g., diphenhydramine, terfenadine) unlessthe patient is on a stable dose for at least 14 days prior to the Screening Visit.
9. Medical marijuana unless the patient is on a stable dose for at least 14 days prior tothe Screening Visit.
10. Clinically significant laboratory abnormalities at the Screening Visit that, in theopinion of the investigator, could affect interpretation of study data or the safetyof the patient's participation in the study.
11. Clinical laboratory values:

• White blood cell count <2×109/L
• Absolute neutrophil count (ANC) <1800/mL
• Platelet count <130,000/mL
• Hemoglobin <8g/dL
• Aspartate aminotransferase (AST) or alanine aminotransferase (ALT) >2× the upperlimit of normal
• Lymphocyte count <0.5×109/L

12. Investigator-assessed history of, or current physical findings of, severe,progressive, or uncontrolled immunologic, hepatic, gastrointestinal, pulmonary,cardiovascular, genitourinary (renal), hematological, neurologic or cerebraldisorders, infectious disease or coagulation disorders that, as determined by theinvestigator, could affect the safety of the patient's participation in the study orwould preclude participation in and completion of study assessments.
13. History of, current, or suspected systemic or cutaneous malignancy and/orlymphoproliferative disease within the last 5 years, other than patients with ahistory of adequately treated and well healed and completely cleared nonmelanoma skincancers (i.e., basal or squamous cell carcinoma) or cervical carcinoma in situ treatedsuccessfully at least 1 year prior to the Screening Visit 1 with no evidence ofdisease.
14. Evidence of active, chronic, or latent infections at the time of enrollment or asystemic infection including but not limited to a history of treated infection (e.g.,pneumonia, septicemia) within 3 months prior to Day 1.
15. Patient has a known active or history of incompletely treated or untreated activetuberculosis. Patients with a history of active tuberculosis must have documentedadequate treatment verified by the investigator. Patients who demonstrate evidence oflatent tuberculosis infection (positive QuantiFERON® Tuberculosis Gold Test) will onlybe allowed to participate in the study if there is documented evidence of a completedadequate treatment course for latent tuberculosis and if active tuberculosis isexcluded per the investigator's judgment.
16. History of a serious local skin infection (e.g., cellulitis, abscess) within 5 yearsof the Screening Visit.
17. Positive serological test for human immunodeficiency virus (HIV) (antibody), hepatitisC virus (antibody), hepatitis B surface antigen, or hepatitis B core antigen antibody.
18. Known significant exposure (close contact [<6 feet] for ≥15 minutes) to an individualwith a confirmed diagnosis of coronavirus disease 2019 (COVID-19) at any time duringthe Screening Period.
19. Herpes zoster or cytomegalovirus infection that resolved less than 2 months prior tothe Screening Visit. Patients with a history of frequent outbreaks of herpes simplexvirus (defined as 4 or more outbreaks a year).
20. Clinically significant electrocardiogram (ECG) findings such as, but not limited to,baseline mean QTcF >450 msec for males or >470 msec for females (use of the ECGalgorithm is acceptable for this purpose).
21. Known allergy to any of the inactive ingredients in the study drug.
22. Female patients who are pregnant, nursing, or planning to become pregnant during thestudy.
23. Legal incapacity or limited legal capacity.
24. Major surgery within 3 months of the Screening Visit.
25. Any other condition that precludes adequate understanding, cooperation, and compliancewith study procedures or any condition that could pose a risk to the patient's safety,as per the investigator's judgment.