Aclaris Therapeutics said its modzatinib as a treatment for lichen planus received fast-track designation from the Food and Drug Administration.

Lichen planus is an autoimmune disorder that can cause rash on the skin and inside the mouth. The drug is designed as a treatment for moderate to severe lichen planus, including oral erosive LP, cutaneous LP, and lichen planopilaris, the company said. Aclaris added it expects to initiate a phased multi-part Phase 2b trial of the treatment in the fourth quarter.

The fast-track designation is given to expedite the review of new drugs that target serious conditions and fill an unmet need, according to the FDA.

The company's shares closed the day's regular trading session with a 4.25% loss, at $6.09. After the bell, following news of the fast-track designation, shares spiked to around $6.47 before giving up ground and returning to flat about an hour into the late trading session.