Q4 2023 Arcutis Biotherapeutics Inc Earnings Call

February 27, 2024

[music].

Operator: Good day, and welcome to the Arcutis Biotherapeutics 2023 fourth quarter and full year financial results conference call. At this time, all participants are in a listen-only mode.

Good day and welcome to the <unk> Biotherapeutics 2023 fourth quarter and full year financial results Conference call.

At this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone.

Operator: After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press Star 1-1 on your telephone. You will then hear an automated message advising that your hand has been raised. To ask your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the call over to Derek Cole, Arcutis Investor Relations. Please go ahead.

Didn't hear an automated message advising that your hand has been raised.

Draw. Your question. Please press Star one one again please.

Please be advised that today's conference is being recorded I would now like to hand, the call over to Derek coal are curious Investor Relations. Please go ahead.

Derek Cole: Thank you, Andrew. Good morning, everyone, and thank you for joining us today to review our 2023 financial results and a business update. Slides for today's call are available in the investor section of the Arcutis website. On the call today, we have Frank Watanabe, President and CEO, Patrick Burnett, Chief Medical Officer, Todd Edwards, Chief Commercial Officer, and John Smither, Chief Financial Officer. I'd remind everyone that we will be making forward-looking statements during this call. These statements are subject to certain risks and uncertainties, and our actual results may differ. We encourage you to review all the company's filings with the Securities and Exchange Commission, including descriptions of our business and respect. With that, let me hand the call over to Frank. Thanks, Derek. I'm now on slide five of the deck.

Thank you Andrew Good morning, everyone and thank you for joining us today to review 2023 financial results and a business update.

Slides for today's call are available on the investors section of the Arcadis website on the call today, we have Frank Watanabe, President and CEO, Patrick Burnett, Chief Medical Officer, Todd Edwards, Chief Commercial Officer, and John Smith, Our Chief Financial Officer.

I'd remind everyone that we will be making forward looking statements. During this call. These statements are subject to certain risks and uncertainties and our actual results may differ we encourage you to review all the company's filings with the Securities and Exchange Commission, including descriptions of our business risk factors with that let me hand, the call over to Frank.

Thanks, Derek I'm now on slide five of the deck.

Frank Watanabe: We've had a lot of really exciting progress since we last spoke on our Q3 earnings call, and I couldn't be more pleased with the Arcutis team and our execution in the quarter, nor more excited about the foundation these results lay down for progress in 2024. We continue to see growing momentum in the Zarev Cream launch for psoriasis as healthcare providers and their patients see how it addresses real needs in their treatment of psoriasis. We've now generated over 165,000 prescriptions and over 10,700 unique prescribers to date as our product delivers a positive clinical experience for HCPs and their patients. We continue to make significant progress on our growth to net each quarter, with improvement in Q4 over Q3 of a similar magnitude as seen in Q3 over Q2, taking us to an average in the mid-60s for the fourth quarter. The solid growth in prescriptions, coupled with continued gross net improvements, drove strong revenue growth in Q4, both versus Q3 and year over year, with fourth quarter net revenue of $13.5 million, coming on top of our progress with Zareve Cream and Psoriasis.

We've had a lot of really exciting progress since we last spoke for our Q3 earnings call and I couldnt be more pleased with the <unk> team and our execution in the quarter nor more excited about the foundation. These results lay down for progress in 2024.

We're continuing to see growing momentum in Missouri of cream launch in psoriasis as health care providers and their patients see how it addresses real needs in their treatment of psoriasis, we've now generated over.

<unk> hundred 65000 prescriptions and over 10700 unique prescribers to launch to date as our product delivers positive clinical experience for <unk> and their patients.

We continue to make significant progress on our gross to net each quarter with improvement in Q4 over Q3 of a similar magnitude as seen in Q3 over Q2, taking us to an average in the mid <unk> for the fourth quarter.

The solid per script growth in prescriptions, coupled with continued gross net improvements drove strong revenue growth in Q4, both versus Q3 and year over year with fourth quarter net revenue of $13 $5 million.

Coming on top of our progress progress with.

<unk> cream in psoriasis. We also received approval for is there a film four separate dermatitis in December and launched in late January.

I don't think I've ever seen comparable levels of excitement amongst patients and dermatologists as what we're hearing about <unk> film.

We also continue to execute against our clinical and regulatory milestones with a steady flow of successes. This past quarter, Patrick I'll go into little more details in a minute, but during the quarter. The FDA accepted our supplemental NDA for atopic dermatitis down to the age of six and assigned a target date of July seven 2020 for potentially expanding.

Frank Watanabe: We also received approval for Zareve Foam for seborrheic dermatitis in December and launched it in late January. I don't think I've ever seen comparable levels of excitement amongst patients and dermatologists as what we're hearing about Zerifoam. We also continue to execute against our clinical and regulatory milestones with a steady flow of successes this past quarter. Patrick will go into a little more detail in a minute, but during the quarter, the FDA accepted our supplemental NDA for atopic dermatitis down to the age of six and assigned a target date of July 7th, 2024, potentially expanding our portfolio even further.

Our portfolio even further.

We also released very exciting interim long term data from our open label study that demonstrated efficacy continues to improve with long term use out to 52 weeks along with favorable long term safety independent bone disease control.

We've seen robust consistent and predictable efficacy across all targeted indications, including psoriasis SAB derma in atopic dermatitis in each of their respective pivotal trials.

In addition in October 2023, the U S patent and trademark office or to the company a new formulation patent that covers it means for inhibiting or formalized crystal growth that is not limited to excellent glycol.

And in November 2023 of the company was also awarded a new method of treatment patent covering a topical reform last formulation with an extended half life.

Both patents do not expire until 2037.

And in October we completed a secondary offering that raised $102 million, putting us in a strong financial position to continue investing in the ongoing launches in <unk> and <unk> as well as the potential atopic dermatitis launch later this year, while continuing to development the development of our pipeline.

Frank Watanabe: We also released very exciting interim long-term data from our open label study in A.D. that demonstrated efficacy continues to improve with long-term use out to 52 weeks, along with favorable long-term safety and dependable disease control. We've seen robust, consistent, and predictable efficacy across all targeted indications, including psoriasis, seb derm, and atopic dermatitis in each of their respective pivotal trials. In addition, in October 2023, the U.S. Patent and Trademark Office awarded the company a new formulation patent that covers a means for inhibiting reflumilase crystal growth that is not limited to hexylene glycol. And in November 2023, the company was also awarded a new method of treatment patent covering a topical reflumilase formulation with an extended half-life. Both patents do not expire until 2037,

Moving on to slide six.

The reason why we're so excited for this year is that we are in the midst of a very significant expansion of the opportunity for topical <unk>, which we expect will translate into a substantial acceleration of our revenue trajectory.

You've seen this before but from the initial approval for psoriasis. The total addressable market for us the Reed could grow around 10 fold.

This year alone to over 15 million patients in the United States.

We have the right commercial team in place for success and we have an excellent plan to execute against these opportunities.

With that let me turn it over to Todd to provide some further commentary around Missouri, a cream launch in psoriasis and update you on how the firm is progressing in scepter.

Thank you Frank and I am very enthusiastic about our growing commercial portfolio recent progress and the tremendous opportunity I see ahead.

Moving to slide eight.

Psoriasis launch is accelerating and our execution strategies for showing signals that we are able to push the launch trajectory and psoriasis.

Efforts also lay a solid foundation for sustained growth in <unk> and <unk>.

Potential further growth in new indications upon approval.

The interaction to your ex prescription volume is growing every quarter <unk> has over 165000 <unk> launch to date.

Quarter, 2023, <unk> were up 26% compared to Q3, 2023 and over 290% compared to the fourth quarter of 2022.

Frank Watanabe: And in October, we completed a secondary offering that raised $102 million, putting us in a strong financial position to continue investing in the ongoing launches of Plaxiris and Sebderm, as well as the potential atopic dermatitis launch later this year, while continuing to develop the development of our pipeline. Moving on to slide six, a major reason why we're so excited about this year is that we are in the midst of a very significant expansion of the opportunity for topical reflomolast, which we expect will translate into a substantial acceleration of our revenue trajectory. You've seen this before, but from the initial approval for psoriasis, the total addressable market for Xeris could grow around tenfold this year alone to over 15 million patients in the United States.

We're starting to see a preference for <unk> relative to the non stroller competitor as evidenced by our city gains in market share and $8 tends to reap riders are increasing their utilization of Missouri.

The new pediatric label expansion down to six years of age incrementally expands our opportunity for growth and further strengthens zuhri safety and Tolerability profile.

Refills continue to be an important driver of long term growth the number of refills in the fourth quarter increased by around 39% versus the third quarter.

And now constitute more than one in three prescriptions, which is in line with what we want and expect to see given the positive experience patients have with zuri.

I am now on slide nine.

There are multiple important dermatology conferences in January.

After spending time with dermatologist Mp's NPA is currently using Siri dream. The feedback I received about the product is exceptional.

These prescribers spoke to me about their patients being delighted by the results achieved with <unk>.

The prescriber feedback is clear that there are some distinct attributes of <unk> that make it attractive.

The ability to be used anywhere.

Once daily dosing.

Frank Watanabe: We have the right commercial team in place for success, and we have an excellent plan to execute against these opportunities. With that, let me turn it over to Todd to provide some further commentary around the Zerif cream launch in Sriyasas and update you on how the foam is progressing in Seb Dirk. Thank you, Frank. And I'm very enthusiastic about our growing commercial portfolio, recent progress, and the tremendous opportunity I see ahead. Moving to slide 8.

Compelling efficacy data.

Favorable tolerability profile safety and appropriateness for any psoriasis patients.

In these attributes make Zurich cream and attracted treatment for patients with different types of needs.

The patient who is concerned about steroids.

The patient who has been cycling through various topical.

Are ones that are exploring different treatments to fine that works for them long term or to manage flares.

No the psoriasis patients have differing needs depending on where they are in their journey and.

And see that as a REIT cream can really be a solution for most of these patients.

I'm now on slide 10.

The team has been focused on three pillars of commercial success for sustaining to re prime growth in psoriasis.

Firstly, driving ACP awareness and use it.

Todd Edwards: The Zarese-Psoriasis launch is accelerating, and our execution strategies are showing signals that we are able to push the launch trajectory in Psoriasis. These efforts also lay a solid foundation for sustained growth in Stabderm and potential further growth in new indications upon approval. The NRX and TRX prescription volume is growing every quarter, and Zareeb has over 165,000 TRXs launched today. In the fourth quarter of 2023, TRX prescriptions were up 26% compared to Q3 2023 and over 290% compared to the fourth quarter of 2022. We're starting to see a preference for Zareve relative to the non-steroidal competitor, as evidenced by our steady gains in market share, and 8 in 10 Zareve riders are increasing their utilization of Zareve. The new pediatric label expansion down to six years of age incrementally expands our opportunity for growth and further strengthens Zareve's safety and tolerability profile.

The prescriber base is growing steadily with now over 10700 unique prescribers since launch.

Our experienced field sales team is focused on high volume geographies.

<unk> team continues to deliver broad efficacy messaging to.

To move physicians, along the adoption curve from initial trial in specific regions of the body to expanded use for patients. So psoriasis plax across a large body surface area.

Secondly, patient engagement and positive use experience.

Retail volume has increased to 38% of total volume as the REIT patient awareness continues to improve.

And finally, the broad high quality access in commercial and anticipated Medicare and Medicaid coverage creates the opportunity for more patients to experience.

So really differentiated pricing and access strategy continues to resonate with payers with over 132 million commercial lives, having access to the REIT cream.

There are cute his team successfully secured coverage for <unk> with all three large pbms in the U S. Within 12 months of the launch and we anticipate further improvements commercial coverage throughout 2024.

And the step edits are typical for branded products in dermatology and for <unk>. This process is now well understood by pharmacies and dermatology offices.

We are seeing very encouraging trends.

Percentage of three prescriptions being covered by insurers.

With a clear opportunity to expand on this from 14 with contracted pharmacy partners.

From my experience I am confident in our ability to continue to improve our gross to net.

Todd Edwards: Refills continue to be an important driver of long-term growth. The number of refills in the fourth quarter increased by around 39% versus the third quarter and now constitutes more than one in three prescriptions, which is in line with what we want and expect to see, given the positive experience patients have with Xeridi. I am now on slide 9.

We saw very good improvements in gross to net during Q4.

And expect that progress to continue in subsequent quarters with us approaching our target gross to net in the fifties.

For the psoriasis indication for the second half of 2024.

One very large incremental opportunity to accelerate prescription growth is expansion into Medicaid and Medicare, which we expect to begin as early as 2024.

Roughly a third of psoriasis patients and nearly half of scepter in atopic dermatitis patients are on Medicare or Medicaid. So this is a very important opportunity for us.

Todd Edwards: There are multiple important dermatology conferences in January. After spending time with dermatologists, MPs, and PAs currently using Zerif cream, the feedback I received about the product is exceptional. These prescribers spoke to me about their patients being delighted by the results achieved with CERES. The prescriber feedback is clear that there are some distinct attributes of Zurique cream that make it attractive, the ability to be used anywhere, and once daily dose. Compelling Efficacy Data, favorable tolerability profile, safety, and appropriateness for any psoriasis patient. And these attributes make Zaref cream an attractive treatment for patients with different types of needs, a patient who is concerned about steroids, or one who has been cycling through various top are ones that are exploring different treatments to find one that works for them long-term or to manage flares. We know that psoriasis patients have differing needs depending on where they are in their journey, and we see that Xerif cream can really be a solution for most of these patients. I'm now on slide 10.

<unk> pricing falls below the CMS specialty thresholds here.

Other branded topical.

So we are well positioned to access these segments now.

Now moving on to slide 11.

We are seeing a tremendous early response to the launches of reform. The first drug approved for several dermatitis with a new mechanism of action in over two decades.

As you have likely seen in ICU via data.

We have a strong start to the launch with a very positive launch trajectory.

The first approved treatment unconstrained by severity duration and location.

<unk> is different than anything else in terms of patients have seen.

For this disease.

With treatment success at eight and 10 patients in a pivotal trial with over half of these patients completely clear in just eight weeks.

Significant impact on itch, most bothersome symptoms of this disease with improvements seen as early as 48 hours simple once daily <unk> application, it's much more convenient than any other option.

And taken together, we believe is the reform can be the new standard of care and managing each center.

I'm now on slide 12.

With the product profile offering rapid dramatic disease clearance and significant reduction in itch with a simple single treatment.

<unk> patients are very enthusiastic about the availability of the reform.

Todd Edwards: The team has been focused on three pillars of commercial success for sustaining serif cream growth in psoriasis, firstly driving HCP awareness and use. The prescriber base is growing steadily, with now over 10,700 unique prescribers since launch. Our experienced field sales team is focused on high-volume geography.

81% of survey prescribers view this refund profile is very compelling or compelling.

They also recognize the attributes of applicability to any part of the body.

The uniqueness of the vehicle and critical efficacy needs for this patient type rapid response at ish in Hiroshima.

Which then helps to reduce the number of treatments in the regimen and potentially leads to improved compliance.

Todd Edwards: The Phil team continues to deliver broad efficacy messaging to move physicians along the adoption curve from initial trial in specific regions of the body to expanded use for patients who have psoriasis plaques across a large body surface area. Secondly, patient engagement and positive use experience. Refill volume has increased to 38% of total volume as patient awareness continues to improve.

On slide 13 as mentioned previously we have secured access with the three national Pbms, who recognize the refund is a line extension under his re prime contracts.

This has translated into an increased volume of Harvard prescriptions early in the launch period.

We've covered per scripts already near 50% of total volume.

We continue to work with the downstream health plans mean them onboard and this accelerated coverage, which translate into a more rapid improvement in gross to net compared to what we saw with the cream launch.

What is your new derm products.

Finally, all the key <unk> already has the reform available for electronic prescribing <unk>.

Todd Edwards: And finally, broad, high-quality access to Cerise in commercial and anticipated Medicare and Medicaid coverage creates the opportunity for more patients to experience Cerise. Cerise's differentiated pricing and access strategy continues to resonate with payers, with over 132 million commercial lives having access to Zurique cream. The Arcutis team successfully secured coverage for Zareep Kareem with all three large PBMs in the U.S. within 12 months of the law.

Moving to slide 14 Bill.

Building on the strength label and product profile. We are confident that we have the ingredients in place for successful launch is the refund instead derm.

With relationships already built with dermatologists.

Phil team trained on the value proposition and ready to promote and educate contracted pharmacies in place familiarity with the copay card and processes that go with the product and access with Pbms to sure patients get the drug.

I look forward to updating you further on our commercial progress throughout the year.

We're also looking forward to upcoming launches and new indications.

And so I will hand, it over to Patrick to cover that.

Thanks Todd.

I am extremely proud of the team's performance in delivering on the promise of topical whom last in the dermatology community and hitting all our timelines with regard to our regulatory milestones on slide 16, I'm going to cover these according to indication with psoriasis first here, we have approval down to the ASX. After we had expanded the indication and the opportunity in pediatrics.

Todd Edwards: And we anticipate further improvements in Zarif commercial coverage throughout 2024. Additionally, PAs and step edits are typical for Brennan products and dermatology. And for Zareed, this process is now well understood by pharmacies and dermatology. We are seeing very encouraging trends in the percentage of cream prescriptions being covered by insurers, with a clear opportunity to expand on this by working with contracted pharmacy partners. From my experience, I am confident in our ability to continue to improve our Crowston equity.

To reach the two to five year olds will be the subject of a future FDA review.

<unk> with our approval in December and the recent launch physician excitement is palpable and the feedback at medical Congresses has been very positive profile here at unprecedented efficacy with a once a day and our market is biggest psoriasis with no innovation in decades and no branded competition.

Moving on to atopic dermatitis as Frank mentioned, the FDA accepted our supplemental NDA for <unk> cream as a potential treatment for atopic dermatitis for patients down to the age of six and they assigned <unk> action date of July seven over this year and.

And finally, we're also expecting to submit another S. NDA with the FDA for as a result, and scalp and body psoriasis in the second half of 2024.

Todd Edwards: We saw very good improvements in gross to net during Q4 and expect that progress to continue in subsequent quarters, with us approaching our target Boston net in the 50s for the psoriasis indication by the second half of 2024. One very large incremental opportunity to accelerate prescription growth is expansion into Medicaid and Medicare, which we expect to begin as early as 2024. Roughly a third of psoriasis patients and nearly half of sub-derm and atopic dermatitis patients are on Medicare or Medicaid.

On slide 17, I want to highlight some recently released pool data from our phase III <unk> studies, and taking that one and two and it is quite notable in highly unusual that over 90% of patients saw improvement in their symptoms in just four weeks and nearly 70% seeing at least a 50% improvement looking at the more demanding EZ 75 hurdle.

45% of patients achieved this margin improvement at week, four and encouragingly in the long term study, which we've released but aren't showing here at the end of 56 weeks two out of three patients had achieved a 75% improvement it's really exciting to see where we have a high proportion of patients responding early and then.

Seeing an increased benefit over time with long term treatment and in that long term study. We also looked for the first time and our ability to control the disease, but less frequent maintenance regimen, where patients were switched the twice weekly treatment. If they reach complete clearance, we're really happy about the response there this regimen fits nicely with the current clinical practice.

And these data have really resonated with dermatologists.

Cited about the reform ice cream clinical profile for <unk> and the significant opportunity in this large and growing market does IMAX here at ADR favorable towards rapid adoption and share some of the positive tailwind as sub term.

Todd Edwards: So this is a very important opportunity for us. Zuri's pricing falls below the CMS specialty threshold tier, and like other Reddit pop-ups, we are well-positioned to access these segments. Now moving on to slide 11.

Pediatric patients, especially here in <unk>, there is a propensity to adopt nonsteroidal, it's higher than the psoriasis patient population and that's largely driven by parents avoidance of steroids.

Todd Edwards: We are seeing a tremendous early response to the launches of refoam, the first drug approved for seborrheic dermatitis with a new mechanism of action in over two decades, as you have likely seen in IQVIA data. We have a strong start to the launch with a very positive launch trajectory. The first approved treatment, unconstrained by severity, duration, and location.

So moving on to slide 18, I want to highlight the itch response across our portfolio of products. So here, we're showing Wi at Rs worst itch numeric rating scale results of our phase III studies. These are pooled results for psoriasis dermis and the EDI Integument studies and these are individual study results for stratum a director.

It's just the primary symptom for these conditions and a key driver of our quality of life impact.

<unk> cream and foam at <unk>, 3% and topical rux little Alaska, 0.15% cream for provide.

Provided consistent and rapid improvements in niche across psoriasis sub derm and <unk>, respectively with improvements as early as 24 to 48 hours as compared with vehicle treated patients. This.

Todd Edwards: Zerifoam is different than anything else derms or patients have seen for this disease. With treatment success of 8 in 10 patients in our pivotal trial, with over half of these patients completely clear in just eight weeks, and significant impact on it, the most bothersome symptom of this disease, with improvements seen as early as 48 hours. A simple once daily leave-in application that's much more convenient than any other option.

This includes scalp psoriasis in the retro study, which is particularly difficult to control and only four weeks of treatment and the integument studies across indications, we have a significant proportion of patients achieving an itch free state.

With that I'll pass it over to John.

Ladies and gentlemen, please standby.

Operator can you hear me. This is Frank Yes, I can hear you now.

John I'll take a reformed for just a minute.

So if you're listening so I'm on slide 20.

So we achieved a $29 2 million in net product revenue for <unk> for the full year 2023, with $13 5 million of that in Q4, reflecting a 67% growth from Q3 to Q4, which comes on top of the approximately 70% sequential growth. We saw from Q2 to Q3. This.

Todd Edwards: And taken together, we believe the reform can be the new standard of care in managing sed dermatitis. I'm now on slide 12. With a product profile offering rapid, dramatic disease clearance and significant reduction in itch with a simple, single treatment, HCPs and patients are very enthusiastic about the availability of Xerifoam. Eighty-one percent of survey prescribers view this refoam profile as very compelling or compelling. They also recognize the attributes of applicability to any part of the body, the uniqueness of the vehicle, and critical efficacy needs for this patient type, as well as the rapid response to itch and erythema, which then helps to reduce the number of treatments in the regimen and potentially leads to improved compliance.

Was driven by substantial growth.

Gross next use me a percentage improvement down in the mid Sixty's and the team's success in palm to recover prescriptions.

We also saw a healthy prescription growth in the quarter.

So looking forward to 2024, we expect continued prescription growth in gross net improvements for as reoccurring psoriasis and continued prescription momentum in G 10 improvements <unk> foam.

Although there will likely be a temporary erosion in psoriasis <unk> improvements in Q1 24 versus Q4 'twenty three due to the typical deductible resets and patients changing their coverage that always occurs at the beginning of the year.

Turning to slide 21.

You can see the strong performance in the fourth quarter with net product revenues for the quarter of $13 5 million up over $10 million from Q4 of 'twenty two R&D expenses for the fourth quarter were $23 8 million, which is down significantly from Q4 'twenty two due to continued decrease of development costs on topical form less programs.

Todd Edwards: On slide 13, as mentioned previously, we have secured access with the three national PBMs who recognize Zerif Foam as a line extension under the Zerif Dream Contract. This has translated into an increased volume of covered prescriptions early in the launch period, with current prescriptions already near 50% of total volume. We continue to work with the downstream health plans, bringing them on board, and this accelerated coverage will translate into more rapid improvement and growth than that, compared to what we saw with the CREAM launch or with the new DERM product. Finally, all the key EMRs already have the refilm available for electronic prescribing. Moving to slide 14.

And recall that our R&D expense includes research operations and medical affairs spending.

On slide 22.

Looking at full year full year total revenues of $60 million with $29 2 million in net product revenues and $30 million in other revenues related to the upfront payment in connection with the quad on collaboration and licensing agreement we received in Q3.

R&D expenses for full year were $111 million, which is down $70 million approximately due to the onetime $30 million fee associated with the <unk> acquisition in 2022, the winding down of our major a formalized phase III studies and lower pre commercial production.

We expect full year 2020 for R&D expense to decline meaningfully versus full year 'twenty three as we continue completing the few remaining phase III studies continue with regulatory filings reduce our prelaunch production costs and maintain our medical affairs activities support the launches.

Todd Edwards: Building on the strength of the label and product profile, we are confident that we have the ingredients in place for a successful launch of Xerifoam instead of DERM, with relationships already built with dermatology, a field team trained on a value proposition and ready to promote and educate, contracted pharmacies employed, familiarity with the copay card and processes that go with the product, and access with PBMs to ensure patients get the drug. I look forward to updating you further on our commercial progress throughout the year. We're also looking forward to upcoming launches and new indications. And so I will hand it over to Patrick to cover. Thanks, Todd.

SG&A expenses for the year were $185 million, primarily due to higher commercialization expenses year over year, driven by continued investments in Missouri of cream and preparing for the ongoing launches of reform and the potential upcoming launch in atopic dermatitis that's approved.

As we head into 2024, we expect SG&A to increase over 2023, which aligns with the investment behind our <unk> launch and preparations for the atopic dermatitis launch, including our previously announced incremental expansion sales force.

We will continue to focus on appropriate investments to support our commercial activities launching drugs properly require substantial investments in staff and promotional investment and having multiple launches in a short period of time it really magnifies these resource demands.

It's important to note that we have made concerted efforts to adjust our operating expenses to reflect our transition from being exclusively a pre commercial company to a commercial enterprise and ensuring we invest appropriately in current launches and if approved and sharing the same for our future launches.

Patrick Burnett: I'm extremely proud of the team's performance in delivering on the promise of topical flumelast in the dermatology community and hitting all our timelines with regard to our regulatory milestones. On slide 16, I'm going to cover these according to indication, with psoriasis first. Here we have approval down to the age of six after we've expanded the indication, and the opportunity in pediatrics to reach two to five-year-olds will be the subject of a future FDA review.

We don't want to be in a position of under investing in harming the trajectory for the ongoing launches in psoriasis <unk> or future launches if approved.

Earlier in the year, we undertook a reorganization and re prioritization of noncommercial efforts to align with our commercial execution focus in 2024, which will result in the aggregate approximately $50 million of reduced expenses over the next two years as compared to previous internal forecasts.

You can expect us to continue to focus on cash burn as we look for opportunities to maximize our opex, while making continued progress on maximizing missouri of opportunity across multiple unique indications.

Patrick Burnett: Next, for Sebderm, with our approval in December and the recent launch, physician excitement is palpable, and the feedback at medical congresses has been very positive. The profile here is unprecedented efficacy with a once-a-day foam in a market as big as psoriasis, with no innovation in decades and no branded competition. So moving on to atopic dermatitis, as Frank mentioned, the FDA accepted our Supplemental NDA for Rifumolase cream as a potential treatment for atopic dermatitis for patients down to the age of six, and they assigned a PDUFA action date of July 7th this year.

A top priority for our team as being good stewards of Investor capital entrusted to us and we believe we have demonstrated an excellent track record. Thus far we have made appropriate levels of investment that established our pipeline achieved nine positive phase III clinical trials and now two FDA approvals or the third potentially coming mid year.

Well launching two products to date and if approved another in the second half of 'twenty four and a fourth in 2025.

On slide 23.

Our final slide on the balance sheet, we had cash and marketable securities of $272 8 million as of December 31.

As I mentioned on a previous slide our current capital enables us to continue to invest appropriately and commercial initiatives.

We also remain confident about concluding an out licensing deal in Japan to bring in additional non dilutive capital, which would further extend runway and largely address the capital requirement covenant with SLR.

Patrick Burnett: And finally, we're also expecting to submit another SNDA with the FDA for Zarif foam in scalp and body psoriasis in the second half of 2024. On slide 17, I want to highlight some recently released pooled data from our phase 3 AD studies in tegument 1 and 2. It's quite notable and highly unusual that over 90% of patients saw improvement in their symptoms in just four weeks, with nearly 70% seeing at least a 50% improvement.

Additionally, we are actively pursuing a primary care partnership and are seeking and seeing early interest from our efforts here.

So that's it for our comments today, if I step back for a minute we founded our curious with the vision of bringing meaningful innovation to the medical dermatology space, especially in the topical space.

And with our second launch in less than 18 months I'm proud that our team is making that vision a reality and in the process is helping a growing number of people suffering from dermatologic conditions.

As we continue to execute on the psoriasis and <unk> launches and hopefully, adding atopic dermatitis launch later this year, we look forward to helping millions of people, allowing us to create additional shareholder value.

Patrick Burnett: Looking at the more demanding EZ75 hurdle, almost 45% of patients achieved this large improvement at week 4. And, encouragingly, in the long-term study, which we've released Benart here, at the end of 56 weeks, 2 out of 3 patients had achieved a 75% improvement. It's really exciting to see where we have a high proportion of patients responding early and then seeing an increased benefit over time with long-term treatment. And in that long-term study, we also looked, for the first time, at our ability to control the disease with a less frequent maintenance regimen, where patients were switched to twice-weekly treatment if they reached complete clearance.

We are confident that 2024 will be a transformational year for our Tunis and with that we will open it up for Q&A.

Thank you as a reminder to ask a question. Please press star one one on your telephone.

And wait for your name to be announced to withdraw your question Press Star One one again one moment please.

And our first question comes Ryan I think we're back on Tyler Okay, great. Thanks, Lynn TD Cowen Your line is now open.

Alright, I think Thats me good morning, guys. Thanks for taking the question so.

So the sub derm prescriptions for reform of God vertical very early in the launch and have reached levels that theory of cream and vitol took significant longer significant longer to reach so I understand that having coverage from day, one as a huge benefit and there is not a direct competitor but.

What else would you attribute the success to early on and do you think the reform could ultimately end up being significantly larger than the cream.

Yes, I think maybe Todd if you could take that and then Patrick if you have any additional comments after todd's comment from a commercial standpoint.

Patrick Burnett: We're really happy about the response there. This regimen fits nicely with current clinical practice, and these data have really resonated with dermatologists. We're excited about the Rifumus cream clinical profile for AD and the significant opportunity in this large and growing market. The dynamics here at AD are favorable towards rapid adoption and share some of the positive tailwinds as seb derm. In pediatric patients, especially here in AD, there's a propensity to adopt non-steroidals higher than in the psoriasis patient population, and that's largely driven by parents' avoidance of steroids.

Yes, Thank you Frank and yes as mentioned, we're very pleased with the uptake is the reform and.

With the weekly demand trends.

I'd say, it's too early to comment on how much of that is coming from a warehouse of patients but.

But I would say that one big driver of this initial uptake is just that that there's a it's a ready pool of patients.

That are out there and.

Patients have been waiting for is reform.

Waiting for a more convenient more effective.

Treatment and so I think that that's been driving this but.

You know.

We expect continued strong growth of the product, but I just caution that a linear progression based on that retrans is probably overly optimistic.

But but I think that there's there's a long runway for us to reform and we're looking forward to continuing to do to grow this product.

Patrick Burnett: Moving on to slide 18, I want to highlight the itch response across our portfolio of products. So here we're showing the WINRS, or worst itch numeric rating scale, results of our phase 3 studies. These are pooled results for psoriasis dermis and the AD integument studies, and these are individual study results for stratum and erector. Itch is a primary symptom for these conditions and a key driver of our quality of life impact, says Reeve Cream and Foam at 0.3% and Topical or Fluid and Elast 0.15% Cream for AD provided consistent and rapid improvements in itch across p This includes scalp psoriasis in the erector study, which is particularly difficult to control, and only four weeks of treatment in the integument study. Across indications, we have a significant proportion of patients achieving an itch-free state. And with that, I'll pass it over to John. Ladies and gentlemen, please stand by. Operator, can you hear me? This is Frank.

Yes.

Medical thoughts yeah, Yeah, Yeah, I think just kind of adding that the perspective.

Perspective of how that might fit into practice more dermatologists.

February dermatitis patients.

Can be a challenging patient type in in the dermatology practice, just because you had them in your practice for 10 15 years. Some time, yeah, we know that there's a very long runway for patient.

Before they actually get to a diagnosis and.

Oftentimes they've they've tried everything that's out there in this space, where we haven't really had any innovation.

For 10 20 years remember this is the first new mechanism of action for a prescription topical in over two decades.

There really is a lot of interest in having a new therapy and that translates into a level of frustration for the dermatologists that was kind of pent up higher debates because when a patient would come back and they just had nothing to offer them that wasn't a topical antifungal or topical corticosteroid.

So I think that this is simply a component of solving unmet need where there are patients who are dissatisfied with the treatment.

And health care providers, who haven't really have anything new to offer and we've heard that in anticipation of the approval and launch for the two or three years, while we were running our phase III study looking for the FDA to approve the drug that there was a high level of anticipation for this for those reasons.

Thank you.

One moment please for our next question.

And our next question comes from the line of Boy ear with Mizuho.

Hey, guys yeah. Thanks for taking my question so just.

On the.

The launch.

Frank Watanabe: Yes, I can hear you now. While we're working on John, I'll take over for him for just a minute. So, if you're listening, I'm on slide 20. We achieved $29.2 million in net product revenue for Zuri for the full year 2023, with $13.5 million of that in Q4, reflecting a 67% growth from Q3 to Q4, which comes on top of the approximately 70% sequential growth we saw from Q2 to Q3. This was driven by substantial growth, gross net, excuse me, percentage improvement down to the mid-60s and the team's success in pulling through cover. We also saw healthy prescription growth in the quarter. So looking forward to 2024, we expect continued prescription growth and gross net improvements for Zareb cream and psoriasis, and continued prescription momentum and GTN improvements for Zareb foam.

<unk> launch.

Could you you speak of warehousing effect.

Are you sort.

Suggesting primarily that these are kind of patients who have limited options and I guess are you seeing.

Like what kind of patients are you seeing generally are they do they tend to be more on the severe side or the mild side and could you sort of just maybe provide some of the demographics a little bad if you have such data.

Yes. So that's my first question my follow up with a second question.

Oh, yes, I think that the point, we're trying to make is think about it it's been over 20 years. Since there was a truly new drugs for separate dermatitis and so there is a very large pool of patients.

Patrick Todd mentioned excuse me, who are have been eagerly awaiting.

Zuhri films availability and I think some of the very early demand is probably these these patients who have been as Patrick mentioned have been cycling for for years and had been just sitting in the office and now all of a sudden the doctor.

Has new option and theyre going to put them on <unk>.

Hi.

So.

We don't we think that there is this pool of readymade patient that is helping the early launch, but we wanted to make sure that folks don't take that.

Frank Watanabe: Although there will likely be a temporary erosion in psoriasis, gross net improvements in Q1, 24 versus Q4, 23, due to the typical deductible resets and patients changing their coverage that always occur at the beginning of the year. Turning to slide 21, you can see the strong performance in the fourth quarter with net product revenues for the quarter of $13.5 million, up over $10 million from Q4. Our Indian expenses for the fourth quarter were $23.8 million, which is down significantly from Q4 22 due to the continued decrease in development costs on topical reform last program.

That pool will exist forever with this.

This constant stream of relapsed patients having said that.

Our research suggests that dermatologists see about 75 <unk> patients a month. So it's a very large population of patients, which should sustain long term growth for us in terms of your question around the demographics I think it's really too early for us to have any data on that we'll be looking at.

Adoption and where doctors are using it as we get farther into the launch and we will be able to share some of those data in the future, but at this point in the game, we don't have any data on that yet.

Okay, and then maybe even it may help us understand a little bit so that you.

During the earlier call. The launch call you indicated that Huawei squirt, some that were waiting at the pharmacies.

Frank Watanabe: And recall that our R&D expense includes research, operations, and medical affairs. On slide 22, we look at full-year total revenues of $60 million, with $29.2 million in net product revenues and $30 million in other revenues related to the up-front payment in connection with the Hwadong Collaboration and Licensing Agreement we received in Q3. R&D expenses for the full year were $111 million, which is down $70 million approximately due to the one-time $30 million fee associated with the Ducentis acquisition in 2022, the winding down of our major reform last phase three studies, and lower pre-commercial production.

Are you still seeing significant number of scripts that have not been have not been filled a ship to consumers or at this point.

The scripts.

They come in and they are I guess will gradually shift just wondering if there is a large delta.

And maybe.

Along that line can you kind of and also help us understand end user.

Direct program is there any differences between the cream and the phone and then in terms of getting it process and if there's any yeah, just wanting a little more clarity on that thanks.

Yeah sure Todd can you take those two yes, absolutely as mentioned.

Prior to the commercial launch there was a number of prescriptions that were sitting at the pharmacy, but those prescriptions have all been filled and distributed to the patient. So we don't see what I'll call a warehouse a prescription sitting currently at the at the pharmacy today.

And then relative to our <unk>.

The <unk> direct program and I think this is a big strategic advantage for US is that the programs identical as the same program for <unk> cream in psoriasis, <unk> foam and separate dermatitis and that creates a great efficiency for the dermatology offices, given that two unique products for two distinct patient populations.

Frank Watanabe: We expect full-year 2024 R&D expense to decline meaningfully versus full-year 2023 as we continue completing the few remaining Phase 3 studies, continue with regulatory filings, reduce our pre-launch production costs, and maintain our medical affairs activities and support the workforce. ST&A expenses for the year were $185 million, primarily due to higher commercialization expenses year-over-year driven by continuing investments in Zerif cream and preparing for the ongoing launch of Zerif foam and the potential upcoming launch in atopic dermatitis. As we head into 2024, we expect SG&A to increase over 2023, which aligns with the investment behind our sednerm launch and preparations for the atopic dermatitis launch, including our previously announced incremental expansion in sales. We will continue to focus on appropriate investments to support our commercial activities.

<unk> receptor, but one process and fulfilling that prescription.

And so that is a common process across across both products.

Okay. Thank you.

Thank you one moment please for our next question.

Yes.

And our next question comes from the line of Chris <unk> with Goldman Sachs.

Hi, Thanks for taking my question. This is Steven on for Chris.

One on the sub dermal launch curious if we should expect any inventory or channel stocking effects in the first quarter and then as far as the commercial team goes do you believe the team is currently right size for the psoriasis and sub derm opportunities and if we should anticipate any changes ahead of atopic derm. Thank you.

Yeah, John do you want to maybe take the channel question and Todd could you address the team.

Okay.

With respect to Q1, no we're not anticipating any.

Channel buildup with respect to Q1.

Yes, and then a question relative to being right sized.

<unk> for the potential atopic dermatitis launch.

In anticipation of that launch we will expand our field sales organization.

Today, roughly we have around 100.

Fuel cells individuals' within the team.

Frank Watanabe: Launching drugs properly requires substantial investments in staff and promotional investment, and having multiple launches in a short period of time really magnifies these resource demands. It's important to note that we have made concerted efforts to adjust our operating expenses to reflect our transition from being exclusively a pre-commercial company to a commercial enterprise and ensure that we invest appropriately in current launches and, if approved, ensure the same for our future launches. We don't want to be in a position of under-investing and harming the trajectory for the ongoing launches in Psoriasis and Sebderm or future launches. Earlier in the year, we undertook a reorganization and reprioritization of non-commercial efforts to align with our commercial execution focus in 2024, which will result in an aggregate of approximately $50 million of reduced expenses over the next two years as compared to previous internal forecasts.

And we will likely expand that by approximately another 50 sales representatives to make certain that.

We can get the breadth and depth of prescribing across.

Two products that are approved today and potentially the atopic dermatitis products. So we will be expanding and that will be initiated shortly.

Okay. Thank you very much.

Thank you one moment please for our next question.

Yes.

And our next question comes from the line of Seamus Fernandez with Guggenheim Securities.

Hi, this is calling on for Seamus. Thanks for taking my question and congrats on the quarter.

Sure thing around 6000 scripts a week for three of over the past few weeks so as a conservative estimate if we annualize the 6000 scripts for 48 weeks.

60% growth by our math that gives us a little under $100 million preserving so are.

Are we thinking about this the right way for our conservative minimum for 2024, which also isn't taking the atopic dermatitis launch into account or.

Or are there other factors, we should be considering for the year. Thanks.

Yeah, I think I'll, let John answer that one.

Thanks, Greg.

Specifically, we know we're not giving revenue guidance.

And the 6000 number I believe you quoted as both prime and foam.

As Todd had mentioned, we're seeing early signs of strong SAB derm, we're seeing improvement around psoriasis.

We're in the early part of the launch.

I think were standing back and thoughtfully and looking at how that launch is going well, we're quite enthusiastic about how the year will turn out, but we're not giving specific guidance on revenue.

Frank Watanabe: You can expect us to continue to focus on cash burn as we look for opportunities to maximize our OPEX while making continued progress on maximizing the ZARIV opportunity across multiple unique indicators. A top priority for our team is being good stewards of the investor capital entrusted to us, and we believe we have demonstrated an excellent track record thus far. We have made appropriate levels of investment that established our pipeline, achieved nine positive phase three clinical trials, and now two FDA approvals with a third potentially coming mid-year, while launching two products to date and, if approved, another in the second half of 2024 and a fourth in 2025. On slide 23, our final slide on the balance sheet, we had cash and marketable securities of $272.8 million as of December 31.

As it relates to gross to net just as a reminder.

We exited 2023 essentially.

In the mid sixties.

And there is a reset that happens in Q1 as a result of folks deductible reset and his folks also changed their medical plans. So youll youll see that probably tick up for psoriasis since at derm, but we're confident as the year progresses that gross to net will continue to improve towards the end of 2024 and I believe in our <unk>.

We mentioned our target is in the fifties.

Okay.

Thank you one moment please for our next question.

And our next question comes from the line of Serge Belanger with Needham.

Hi, good morning, Thanks for taking my questions and congrats on the progress.

I guess a question for Todd related to gross to nets. Thank you reiterated your target to be in the mid fifties by the end of the year for <unk>.

I believe it was <unk> cream and psoriasis.

Just curious how we should think about the other products.

Specialty is a reform and what will happen to overall gross to nets.

Once the AED.

Indication comes onboard and in the managed care component also expense. Thanks.

Frank Watanabe: As I mentioned in a previous slide, our current capital enables us to continue to invest appropriately in commercial initiatives. We also remain confident about concluding an out-licensing deal in Japan to bring in additional non-dilutive capital, which would further extend runway and largely address the capital requirement covenant with SLR. Additionally, we are actively pursuing a primary care partnership and are seeking and seeing early interest from our efforts. So that's it for our comments today. You know, if I step back for a minute, we founded Arcutis with a vision of bringing meaningful innovation to the medical dermatology space, especially the topical space. With our second launch in less than 18 months, I'm proud that our team is making that vision a reality and, in the process, helping a growing number of people suffering from dermatologic conditions. As we continue to execute on the psoriasis and subderm launches and hopefully add the atopic dermatitis launch later this year, we look forward to helping millions of people, allowing us to create additional shareholder value. We are confident that 2024 will be a transformational year for Arcutis.

Yeah. Thank you yeah as.

As mentioned by John earlier that.

We're anticipating second half of the year to achieve that $50 for the gross to net that is for the indication of psoriasis.

That's too early to comment on.

Zuhri film for separate dermatitis, I think bill wants signal that I mentioned earlier was relative to the coverage groups approaching 50% now of the total volume.

And then relative to.

Atopic dermatitis.

And just as a reminder, these are three unique and distinct products have separate MDC. So therefore, they'll have a separate unique gross to nets.

But relative to the launch potential launch in atopic dermatitis.

The Pbms are similar to what happened with the reform, which reached the <unk> launch as a line extension.

Which will be able to support rapid uptake of <unk> prescriptions.

At launch for the atopic dermatitis product.

Yeah.

Thank you.

One moment please for our next question.

Our next question comes from the line of Vikram <unk> with Morgan Stanley.

Hi, Good morning, Thank you for taking our questions. We had two one on scepter him and one on <unk>.

So for <unk> could you remind us how many cans of product do you expect patients on the film to work through annually.

Understanding it's still pretty early in the launch and are there any interesting observations you are picking up from the initial phase of this law John.

Which areas of the body patients are using the product and how much they are using.

Whether they are using it either as monotherapy or as a combination agent and then on <unk>.

Frank Watanabe: And with that, we will open it up for Q&A. Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone, and wait for your name to be announced. Enjoy your question, press star one one again for one moment. And our first question comes from Frank, I think we're back on. Tyler...

Would just be curious what your latest thinking is on where's the reef cream could fit and if approved versus other branded topical that are or maybe on the market by the time three of largest thanks.

Sure Todd you want to maybe take your first question.

Yes for the first question relative to the anticipated number of units. So we're anticipating that.

Per patient on average per year.

Would you use one to two served or <unk> units and then relative to it.

Operator: Okay, great. Thanks. And here it is with T.D.

It's a little bit early to be able to tell where patients are using this on the body. It will.

Operator: Cowan. All right. I think that's me. Good morning, guys. Thanks for taking the question. So the subderm prescriptions for Zerifoam have gone vertical very early in the launch and have reached levels that Zerif, CREAM, and Botama took significantly longer to reach. So I understand that having coverage from day one is a huge benefit, and there's not a direct competitor, but what else would you attribute the success to early on? And do you think Zerifoam could ultimately end up being significantly larger than CREAM? Yeah, I think maybe Todd, if you could take that, and then Patrick, see if you have any additional comments after Todd's comment from the commercial.

Our label is very open relative to anywhere in the body of scout.

And then relative to <unk>.

Our mono therapy or not once again it is too early to tell specifically, how dermatologists will likely be using this product, although I will mentioned.

That there has been a lot of feedback from dermatologists relative to the convenience of this product being a monotherapy.

I think that leads back to patients really yearning for something thats more convenient and not having to use six products on average per week.

And so I think that.

This is one significant differentiator of the product to be able to use as a monotherapy highly effective product anywhere on body and scale.

Yeah.

Thank you one moment please for our next question.

And our next question comes from the line of Sean Kim with Jones trading.

Yes.

Yes, hi, congratulations and thank you for taking my questions I guess, the one question on Medicaid and Medicare expansion opportunity. So just curious what are some of the remaining gating steps are.

Todd Edwards: Yeah, thank you, Frank. And, yeah, as mentioned, we're very pleased with the uptake of Zerifoam. And I mean, you know, with the weekly demand trends, I'd say it's too early to comment on how much of that is coming from a warehouse of patients. But I would say that one big driver of this initial uptake is just that, that there is a ready pool of patients that are out there. And these patients have been waiting for Zerifoam. You know, they've been waiting for a more convenient, more effective treatment. And so I think that that's been driving this.

To realize that expansion opportunity into managed care.

And my second question is about the patient awareness as you mentioned.

70 per second 10%.

All my patients are over.

Fran.

<unk>.

Just curious to hear where there's a demand for your products has been.

More on the doctors are recommending products to patients are or vice versa pensions conquesting.

The product and then your expectations going forward, whether that awareness will further increase thank you.

Sure.

Sorry, but I think that was probably both are to you too.

Yes, Thank you and just a clarification. The first question that was relative to the Medicaid expansion opportunity.

Todd Edwards: But, you know, we expect continued strong growth of the product, but I just caution that a linear progression based on the rate trend is probably overly optimistic. But I think that there's a long runway for Zerifoam, and we're looking forward to continuing to grow this product. Yeah, I think just kind of adding the perspective of how this might fit into practice for dermatologists, you know, seborrheic dermatitis patients can be a challenging patient type in the dermatology practice just because you've had them in your practice for 10, 15 years sometimes. We know that there's a very long runway for patients before they actually get to a diagnosis. And oftentimes, they've tried everything that's out there.

Alright, Medicaid and Medicare, both Medicaid and Medicare born fantastic relative to Medicare.

We are currently.

In negotiations with a couple of the the part D. Medicare plans and we're anticipating met.

Medicare coverage of some of those part D plans to be initiated in the second half of 2024.

And then relative to Medicaid very similar timeframe.

We're also actively talking and working with some of the state Medicaid plans.

And we anticipate that those plants will come online.

Nir.

The middle of the year to the second half of the year for the Medicaid plans.

And then on the other relative to patient awareness.

Also whether its a physician or doctor driven.

I think right now it's primarily for the most part Doctor driven given just the new product to market.

Patrick Burnett: And in this space where we haven't really had any innovation for 10, 20 years, remember, this is the first new mechanism of action for a prescription topical in over two decades. I think there really is a lot of interest in having a new therapy. And that translates into a level of frustration for the dermatologist who was kind of pent up prior to this because when a patient would come back in, they just had nothing to offer them that wasn't a topical antifungal or a topical corticosteroid.

There has not been any new innovation within this space two decades and enthusiasm I providers around this product. So I think theres, a tremendous pushback because physicians to their patients to two.

To take this product however, I think over time that paradigm will shift.

To the patient as we continue to engage more directly with patients create awareness.

To patients through a different mode of engagement.

<unk>.

And Sean maybe just to clarify for for you and the other analyst.

Neither Medicare nor Medicaid are binary coverage decisions right. So in Medicare the majority of patients are covered by <unk>.

These part D plans that are run by various.

Patrick Burnett: So I think that this is simply a component of solving an unmet need where there are patients who are dissatisfied with their treatment and healthcare providers who haven't really had anything new to offer. And we've heard that in anticipation of the approval and launch for the two or three years while we were running our phase three studies, looking for the FDA to approve the drug, there was a high level of anticipation for this for those reasons. Thank you. One moment, please, for our next question. And our next question comes from the line of Oye, and Mr.

Pbms are insurance companies and so we will get coverage with individual Medicare providers, just as we have with commercial it won't all come at once will get a little bit here, a little bit there a little bit the other place and then in the case of Medicaid that's administered as a state program through block grants from the federal government and so you have to negotiate with individual states for Medicaid cut.

And so again that will be kind of a piecemeal coverage process in fact, even more fragmented since youre dealing with such a large number of states.

Okay. That's fair. Thank you for the clarification.

Thank you there are no further questions. Thank you for joining our Q today. This does conclude the call and you may now disconnect.

Operator: Hey guys, um, yeah, thanks for taking my question. So, just on the launch, the septum launch. Could you, you know, you speak of the warehousing effect?

Okay.

[music].

Okay.

[music].

Operator: Are you sort of suggesting primarily that these are the kind of patients who, you know, have limited options? And I guess, what kind of patients are you seeing, generally? Are they, do they tend to be more on the severe side or the mild side?

Yeah.

[music].

Frank Watanabe: And could you sort of just maybe provide some of the demographics a little bit, if you have such data? Yeah, so that's my first question. I'll follow up. Yeah, you know, I think that the point we're trying to make is, you know, think about it. It's been over 20 years since there was a truly new drug for seborrheic dermatitis. And so, you know, there is a very large pool of patients, as Patrick or Todd mentioned, who, you know, have been eagerly awaiting Xerifilm's availability. And, you know, I think some of the very early demand is probably these patients who have been, as Patrick mentioned, you know, been cycling for three years, and they've just been sitting in the office.

Hum.

[music].

Yes.

[music].

Okay.

Yes.

[music].

Yes.

[music].

Yeah.

[music].

Frank Watanabe: And now, all of a sudden, the doctor has a new option, and they're going to put them on Xerifilm. So we think that there is this pool of ready-made patients that is helping the early launch, but we want to make sure that folks don't think that that pool will exist forever with this constant stream of very large patients. Having said that, our research suggests that dermatologists see about 75 seb derm patients a month. So it's a very large population of patients, which should sustain long-term growth for us. In terms of your question around demographics, I think it's really too early for us to have any data on that.

Okay.

Hum.

[music].

Okay.

Sure.

[music].

Frank Watanabe: We'll be looking at adoption and where doctors are using it as we get farther into the launch, and we'll be able to share some of that data in the future. But at this point in the game, we don't have any data on that, and maybe it may help us understand a little bit. So you, during the earlier call, the launch call, you indicated there were scripts that were waiting at the pharmacies. Are you still seeing a significant number of scripts that have not been filled or shipped to consumers? Or at this point, these scripts, you know, they come in, and they are, I guess, readily shipped. I'm just wondering if there's a large delta.

Yeah.

[music].

Yes.

Hum.

[music].

Okay.

[music].

Okay.

[music].

Yes.

[music].

Frank Watanabe: And maybe along that line, could you kind of also help us understand in your Zareeb direct program whether there are any differences between the cream and the foam in terms of getting it processed? And if there are, yeah, just wanting a little more clarity. Sure, yeah, sure. Todd, can you take those, too?

So.

Hum.

[music].

Todd Edwards: Yeah, absolutely. As mentioned, prior to the commercial launch, there were a number of prescriptions that were sitting at the pharmacy, but those prescriptions have all been filled and distributed to the patient. So we don't see what I'll call a warehouse of prescriptions sitting in the pharmacy today. And relative to our Zareve direct program, I think this is a big strategic advantage for us because the program's identical. It's the same program for Zareve cream and psoriasis or for Zareve foam and seborrheic dermatitis. And that creates great efficiency for the dermatology offices, given that there are two unique products for two distinct patient populations, psoriasis and seb derm, but one process in fulfilling that prescription. And so that is a common process across both. Okay, thank you.

Okay.

Yes.

[music].

Okay.

[music].

Okay.

[music].

Yes.

[music].

Todd Edwards: Thank you. One moment, please, for our next question. And our next question comes from the line of... Shibutani with Goldman Sachs. Hi, thanks for taking our question. This is Steven on behalf of Chris.

So.

Dan.

[music].

Yes.

[music].

Operator: One on the subderm launch, curious if we should expect any inventory or channel stocking effects in the first quarter? And then, as far as the commercial team goes, do you believe the team is currently the right size for the psoriasis and subderm opportunities? And if we should anticipate any changes ahead of atopic derm? Thank you. John, do you want to maybe take the channel question and then Todd, could you address it

Yes.

Okay.

[music].

Okay.

Yes.

[music].

Okay.

[music].

John Smither: With respect to Q1, no, we're not anticipating any channel buildup with respect to Q1. Yeah, and then a question relative to being right-sized, especially for the potential atypic dermatitis launch. In anticipation of that launch, we will expand our field sales organization. Today, roughly, we have around 100 field cell individuals within the team, and we'll likely expand that by approximately another 50 field cell representatives to make certain that we can get the breadth and depth of prescribing across the two products that are approved today and potentially the atopic dermatitis products. So we will be expanding, and that will be initiated shortly. Okay, thank you very much.

Yes.

[music].

Yes.

Hum.

[music].

Okay.

Yes.

Todd Edwards: Thank you. One moment, please, for our next question. And our next question comes from the line of Seamus Fernandez and Heinz. Hi, this is Colleen on behalf of Seamus.

Okay.

[music].

Okay.

[music].

Okay.

[music].

Okay.

[music].

Yes.

Operator: Thanks for taking our question and congrats on the quarter. So we're seeing around 6,000 scripts per week for Zareve over the past few weeks. So as a conservative estimate, if we analyze those 6,000 scripts for 48 weeks and assume a 60 percent growth SNF, by our math, that gives us a little under 100 million for Zareve sales. But are we thinking about this the right way for a conservative minimum for 2024, which also isn't taking the atopic dermatitis launch into account? Or are there other factors we should be considering for the year?

[music].

Okay.

[music].

Yes.

Hum.

[music].

Okay.

[music].

Yes.

[music].

Okay.

Yes.

John Smither: Thanks. Yeah, I think I'll let John answer that one. Thanks, Frank. Specifically, we're not giving revenue guidance, and the 6,000 number I believe you quoted is both cream and foam. As Todd mentioned, we're seeing early signs of a strong seb derm, and we're seeing improvement around psoriasis. You know, we're in the early part of the launch, so I think we're standing back and thoughtfully and looking at how that launch is going. We're quite enthusiastic about how the year will turn out, but we're not giving specific guidance on revenue.

[music].

Okay.

[music].

Yes.

Okay.

[music].

John Smither: As it relates to gross to net, just as a reminder, you know, we exited 2023 essentially in the mid-60s, and there is a reset that happens in Q1 as a result of folks having a deductible reset, and as folks also change their medical plans. So you'll probably see that probably tick up for psoriasis and seb derm, but we're confident as the year progresses that gross to net will continue to improve toward the end of 2024, and I believe in our script, we mentioned our target is in the 50s. Great

Yes.

Hum.

[music].

Yes.

[music].

Operator: Thank you. One moment, please, for our next question. And our next question comes from the line of Serge Ballinger: Hi, good morning.

Okay.

[music].

Operator: Thanks for taking our questions and congratulations on the progress. I guess a question for Todd related to growth to net. If you reiterated your target to be the mid-50s by the end of the year for, I believe it was Zoriive Cream for psoriasis. Just curious about the other products, especially Zoriive Foam, and what will happen to overall growth in that once the AD indication comes on board and the managed care component also expands. Thanks. Yeah, yeah, thank you.

Okay.

[music].

Yes.

[music].

Okay.

Hi.

[music].

Todd Edwards: As mentioned by John earlier, we're anticipating the second half of the year to achieve the 50s for the gross net. That is for the indication of psoriasis. It's too early to comment on xerifilm for seborrheic dermatitis.

Yes.

Todd Edwards: I think the one signal that I mentioned earlier was relative to the coverage scripts approaching 50% of the total volume. And then relative to atopic dermatitis, just as a reminder, these are three unique and distinct products, have separate NDCs, and therefore, they'll have separate unique gross margins.

Hum.

[music].

Todd Edwards: But relative to the potential launch in atopic dermatitis, the PVMs, similar to what happened with Zerifoam, will treat the AD launch as a line extension, which will be able to support rapid uptake of covered prescriptions at launch for the atopy dermatitis product. Thank you. One moment, please, for our next question- Our next question comes from the line of Vikram Parohit with Morgan Stanley. Hi, good morning. Thank you for taking our questions. We had two, one on Sebderm and one on AD.

Okay.

Yes.

[music].

Okay.

[music].

Okay.

[music].

Yes.

[music].

Operator: So for Sebderm, could you remind us how many cans of product you expect patients on the phone to work through annually, understanding it's still pretty early in the launch? And are there any interesting observations you're picking up from the initial phase of this launch on which areas of the body patients are using the product and how much they're using and whether they're using it either as monotherapy or as a combination agent and then on A.D. We'd just be curious what your latest thinking is on where the Reeve cream could fit in if approved versus other brands of topicals that are or may be on the market by Sure, yeah. Todd, would you maybe take the first question?

Okay.

Dan.

[music].

Okay.

[music].

Okay.

[music].

Todd Edwards: Yeah, for the first question, relative to the anticipated number of units, so we're anticipating that per patient, on average per year, a patient would use one to two serb derm, serbo derm units. And then, it's a little bit early to be able to tell where patients are using this on the body, but our labels are very open relative to anywhere on the body or scalp. And then, relative to monotherapy or not, once again, it's too early to tell specifically how dermatologists will likely be using this product. Although I will mention that there has been a lot of feedback from dermatologists relative to the convenience of this product being a monotherapy. And I think that leads back to patients really yearning for something that's more convenient and not having to use six products on average per week. And so I think that, you know, this is one significant differentiator of the product to be able to use it as a monotherapy, highly effective product anywhere on the body and scalp.

Okay.

[music].

Okay.

Sure.

[music].

Yeah.

Yes.

Okay.

Dan.

[music].

Okay.

[music].

Yes.

Okay.

[music].

Okay.

[music].

Okay.

[music].

Yes.

Operator: Thank you. One moment, please, for our next question. And our next question comes from the line of Sean Kim with Jones Street. Yeah, hi, congratulations, and thank you for taking my questions. I guess one question on Medicaid and Medicare, an expansion opportunity. So just curious, what are some of the remaining gating steps?

Okay.

[music].

Yes.

[music].

So.

Dan.

Operator: to realize the expansion opportunity in managed care. And my second question is about patient awareness. You mentioned about 17% among patients aware of your brand product. I'm just curious to hear whether the demand for your product has been more from doctors recommending the products to patients or vice versa, patients kind of requesting them, and your expectations going forward, whether that awareness will further increase. Thank you. I'm sorry, but I think those are probably both to you too.

[music].

Okay.

[music].

Yes.

[music].

Okay.

[music].

Okay.

Yes.

Okay.

[music].

Okay.

Todd Edwards: Yeah, no, thank you. And just a clarification, the first question that was related to the Medicaid expansion opportunity. Right. Medicaid and Medicare both.

[music].

Yes.

[music].

Todd Edwards: Fantastic. Yeah. Relative to Medicare, we are currently in negotiations with a couple of the Part D Medicare plans, and we're anticipating Medicare coverage at some of those Part D plans to be initiated in the second half of 2024. And relative to Medicaid, a very similar timeframe. We're also actively talking and working with some of the state Medicaid plans, and we anticipate that those plans will come online near the middle of the year to the second half of the year for the Medicaid plan. And then, on the other hand, relative to patient awareness and also whether it's physician- or doctor-driven, I think right now it's primarily, for the most part, doctor-driven, given just a new product to market. There has not been any new innovation within this space in two decades, and the enthusiasm by providers around this product is lacking.

Okay.

[music].

So.

Dan.

[music].

Okay.

[music].

Okay.

[music].

Okay.

Yes.

Okay.

[music].

Yes.

Thank you.

[music].

Yes.

[music].

Okay.

Yes.

[music].

Todd Edwards: So I think there's a tremendous push from physicians to their patients to take this product. However, I think over time, that paradigm will shift to the patient as we continue to engage more directly with patients and create awareness for patients through a different mode of engagement opportunities. You know, Sean, maybe just to clarify for you and the other animals, you know, neither Medicare nor Medicaid are binary coverage decisions, right? So, you know, in Medicare, the majority of patients are covered by, you know, these Part D plans that are run by various PBMs or insurance companies.

So.

Hum.

[music].

Okay.

[music].

Okay.

[music].

Frank Watanabe: And so, you know, we'll get coverage with individual Medicare providers, just as we have with commercial insurance. It won't all come at once. We'll get a little bit here, a little bit there, a little bit somewhere else. And then, in the case of Medicaid, you know, that's administered as a state program through block grants from the federal government.

Yes.

[music].

Okay.

[music].

Frank Watanabe: And so you have to negotiate with individual states for Medicaid coverage. And so, again, that will be, you know, kind of a piecemeal coverage process, in fact, even more fragmented since you're dealing with such a large number of states. Okay, that's very helpful.

Okay.

[music].

Yes.

[music].

Okay.

Yes.

Operator: Thank you for the clarification. Thank you. There are no further questions.

[music].

Operator: Thank you for joining Arcutis today. This does conclude the call and you may now disconnect, direction, animation, music, photographic effect, animation, animation director, music, chart, animation, sound, photos, commissioned by, Thanks for watching. Prakhar Agrawal, Arcutis, Ken Cacciatore, Prakhar Agrawal, Arcutis, Ken Cacciatore, Prakhar Agrawal, Arcutis, Ken Cacciatore, Prakhar Agrawal, Arcutis, Ken Cacciatore, Prakhar Agrawal, Arcutis, Ken Cacciatore, Prakhar Agrawal, Arcutis, Ken Cacciatore, Prakhar, In the name of the Father, and of the Son, and of the Holy Spirit.

Yeah.

So.

Hum.

Yes.

[music].

Okay.

Yes.

Okay.

[music].

Okay.

[music].

Operator: Amen. In the name of the Father, and of the Son, and of the Holy Spirit. Amen. In the name of the Father, and of the Son, and of the Holy Spirit.

Okay.

Yes.

[music].

Operator: Amen. Amen. Do your part. www.frankincense.com. Thank you for watching. Thank you for watching this video. If you enjoy this video, please hit the like button and comment. Don't forget to share the video.

Okay.

[music].

Yes.

Okay.

[music].

Okay.

Operator: Crossing out the positive and blessings of Vandomen. God bless. Until next time, Seawant.

[music].

Operator: ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Woodwinds ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Thanks for watching! ? ? ? ? ? ? ? ? ? ? ? ? ? ? This is a video that I made for the first time, and it was a bit of a mess, so I decided to make a new one. This is a video that I made for the first time, and it was a bit of a mess, so I decided to make a new one. This is a video that I made for the first time, and it was a bit of a mess, so I decided to make a new one. This is a video that I made for the first time, and it was a bit of a mess, so I decided to make a new one. This is a video that I made for the first time, and it was a bit of a mess, so I decided to make a new one.

Okay.

[music].

Okay.

Dan.

[music].

Okay.

[music].

Okay.

[music].

Operator: Thank you very much. In the name of the Father, and of the Son, and of the Holy Spirit. Amen. In the name of the Father, and of the Son, and of the Holy Spirit. Amen. In the name of the Father, and of the Son, and of the Holy Spirit.

Okay.

[music].

Operator: Amen. Amen. In the name of the Father, and of the Son, and of the Holy Spirit. Amen. In the name of the Father, and of the Son, and of the Holy Spirit. Amen. In the name of the Father, and of the Son, and of the Holy Spirit. Amen. In the name of the Father and of the Holy Spirit.

Okay.

[music].

Yes.

[music].

Okay.

[music].

Operator: Amen. We've come a long way, kiddo We come a long way, ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A, ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Good day and welcome to the Arcutis Biotherapeutics 2023 fourth quarter and full year financial results conference call. At this time, all participants are in a listen-only mode.

Yeah.

Okay.

Dan.

Yes.

[music].

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press Star 1-1 on your telephone. You will then hear an automated message advising that your hand has been raised.

Okay.

[music].

Okay.

Yes.

Okay.

[music].

Operator: To withdraw your question, please press star 1 1 again. We advise that today's conference is being recorded. I would now like to hand the call over to Derek Cole, Arcutis Investor Relations. Please go ahead.

Okay.

[music].

Derek Cole: Thank you, Andrew. Good morning, everyone, and thank you for joining us today to review our 2023 financial results and a business update. Slides for today's call are available in the investor section of the Arcutis website. On the call today, we have Frank Watanabe, President and CEO, Patrick Burnett, Chief Medical Officer, Todd Edwards, Chief Commercial Officer, and John Smither, Chief Financial Officer. I'd remind everyone that we will be making forward-looking statements during this call. These statements are subject to certain risks and uncertainties, and our actual results may differ. We encourage you to review all the company's filings with the Securities and Exchange Commission, including descriptions of our business and risk factors. With that, I will hand the call over to Frank. Thanks, Derek. I'm now on slide five of the deck.

Okay.

[music].

Okay.

[music].

So.

Dan.

[music].

Okay.

[music].

Okay.

[music].

Okay.

Frank Watanabe: We've had a lot of really exciting progress since we last spoke on our Q3 earnings call, and I couldn't be more pleased with the Arcutis team and our execution in the quarter, nor more excited about the foundation these results lay down for progress in 2024. We continue to see growing momentum in the Zarev Cream launch for psoriasis as healthcare providers and their patients see how it addresses real needs in their treatment of psoriasis. We've now generated over 165,000 prescriptions and over 10,700 unique prescribers to date as our product delivers a positive clinical experience for HCPs and their patients. We continue to make significant progress on our gross to net each quarter, with improvement in Q4 over Q3 of a similar magnitude as seen in Q3 over Q2, taking us to an average in the mid-60s for the fourth quarter.

Okay.

[music].

Okay.

[music].

Yes.

Okay.

[music].

Sure.

[music].

Yeah.

Okay.

Dan.

[music].

Okay.

[music].

Okay.

[music].

Frank Watanabe: The solid growth in prescriptions, coupled with continued gross net improvements, drove strong revenue growth in Q4, both versus Q3 and year-over-year, with fourth-quarter net revenue of $13.5 million, coming on top of our progress with Zareve Cream and Psoriasis. We also received approval for Zareve Foam for seborrheic dermatitis in December and launched it in late January. I don't think I've ever seen comparable levels of excitement among patients and dermatologists as what we're hearing about Zerifoam. We also continue to execute against our clinical and regulatory milestones with a steady flow of successes this past quarter. Patrick will go into a little more detail in a minute, but during the quarter, the FDA accepted our supplemental NDA for atopic dermatitis down to the age of six and assigned a target date of July 7th, 2024, potentially expanding our portfolio even further.

Okay.

[music].

Okay.

[music].

Okay.

[music].

Sure.

[music].

Yeah.

So.

Dan.

Yes.

[music].

Yes.

Okay.

[music].

Okay.

[music].

Yes.

[music].

Frank Watanabe: We also released very exciting interim long-term data from our open label study in A.D. that demonstrated efficacy continues to improve with long-term use out to 52 weeks, along with favorable long-term safety and dependable disease control. We've seen robust, consistent, and predictable efficacy across all targeted indications, including psoriasis, seb derm, and atopic dermatitis in each of their respective pivotal trials. In addition, in October 2023, the U.S. Patent and Trademark Office awarded the company a new formulation patent that covers a means of inhibiting riflimylase crystal growth that is not limited to hexylene glycol. And in November 2023, the company was also awarded a new method of treatment patent covering a topical riflimylase formulation with an extended half-life. Both patents do not expire until 2037,

Okay.

Yes.

[music].

Thank you.

[music].

Yes.

[music].

Yes.

[music].

So.

Dan.

[music].

Frank Watanabe: And in October, we completed a secondary offering that raised $102 million, putting us in a strong financial position to continue investing in the ongoing launches of Plaxiris and Sebderm, as well as the potential atopic dermatitis launch later this year, while continuing to develop the development of our pipeline. Moving on to slide six, a major reason why we're so excited about this year is that we are in the midst of a very significant expansion of the opportunity for topical reflomolast, which we expect will translate into a substantial acceleration of our revenue trajectory. You've seen this before, but from the initial approval for psoriasis, the total addressable market for Zarede could grow around tenfold this year alone to over 15 million patients in the United States.

Okay.

[music].

Okay.

[music].

Okay.

Yes.

[music].

Okay.

[music].

Okay.

[music].

Yes.

[music].

Yes.

[music].

Yeah.

No.

Dan.

Yes.

[music].

Okay.

[music].

Sure.

Yes.

[music].

Okay.

[music].

Okay.

[music].

Yes.

Okay.

[music].

Okay.

Sure.

[music].

Todd Edwards: There's a reason why this launch is accelerating, and our execution strategies are showing signals that we are able to push the launch trajectory in psoriasis. These efforts also lay a solid foundation for sustained growth in STEP DERM and potential further growth in new indications upon approval. The NRX and TRX prescription volume is growing every quarter, and Zareeb has over 165,000 TRXs launched today. In the fourth quarter of 2023, TRX prescriptions were up 26% compared to Q3 2023 and over 290% compared to the fourth quarter of 2022. We're starting to see a preference for Zareve relative to the non-steroidal competitor, as evidenced by our steady gains in market share, and 8 in 10 Zareve riders are increasing their utilization of Zareve. The new pediatric label expansion down to six years of age incrementally expands our opportunity for growth and further strengthens Zaree's safety and tolerability profile. Refills continue to be an important driver of long-term growth. The number of refills in the fourth quarter increased by around 39 percent versus the third quarter and now constitute more than one in three prescriptions, which is in line with what we want and expect to see, given the positive experience patients have with Xeridi.

Okay.

Hi.

Yes.

[music].

Okay.

[music].

Yes.

[music].

Okay.

Dan.

[music].

Okay.

[music].

Yes.

Okay.

[music].

Sure.

Yes.

[music].

No.

[music].

Okay.

[music].

Yes.

Thanks.

Yes.

[music].

Yes.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

[music].

Yes.

Okay.

[music].

Todd Edwards: There are multiple important dermatology conferences in January. After spending time with dermatologists, MPs, and PAs currently using Zerif Dream, the feedback I received about the product is exceptional. These prescribers spoke to me about their patients being delighted by the results achieved with CERES. The prescriber feedback is clear that there are some distinct attributes of Zurique cream that make it attractive, the ability to be used anywhere, and once daily dose.

Okay.

[music].

Sure.

Okay.

[music].

Todd Edwards: Compelling Efficacy Data, favorable tolerability profile, safety, and appropriateness for any psoriasis patient. And these attributes make Zaref cream an attractive treatment for patients with different types of needs, especially a patient who is concerned about steroids. The patient who has been cycling through various tops is one that is exploring different treatments to find one that works for them long-term or to manage flares. We know that psoriasis patients have differing needs depending on where they are in their journey, and we see that xerif cream can really be a solution for most of these patients. I'm now on slide 10.

Hum.

Okay.

[music].

Yes.

[music].

Yes.

Sure.

[music].

Todd Edwards: The team has been focused on three pillars of commercial success for sustaining serif cream growth in psoriasis. Firstly, driving HCP awareness and use. The prescriber base is growing steadily with now over 10,700 unique prescribers since launch. Our experienced field sales team is focused on high-volume geography.

Okay.

[music].

Okay.

Yes.

Okay.

Thanks.

[music].

Yes.

Thanks.

Okay.

Yes.

[music].

Todd Edwards: And finally, broad, high-quality access to Zareed Kareem in commercial and anticipated Medicare and Medicaid coverage creates the opportunity for more patients to experience Cerita's differentiated pricing and access strategy continues to resonate with payers, with over 132 million commercial lives having access to Zareed Kareem. The Arcutis team successfully secured coverage for Zareep Kareem with all three large PBMs in the U.S. within 12 months of going on, and we anticipate further improvements in Zarif commercial coverage throughout 2024. And PAs and step edits are typical for Brennan products and dermatology. And for Zareeb, this process is now well understood by pharmacies and dermatology offices. We are seeing very encouraging trends in the percentage of cream prescriptions being covered by insurers, with a clear opportunity to expand on this by working with contracted pharmacy partners. From my experience, I am confident in our ability to continue to improve our coast to neck.

Okay.

Yes.

Okay.

[music].

Okay.

[music].

Okay.

Yeah.

Sure.

Okay.

Thanks.

[music].

Yes.

Okay.

Yes.

[music].

Okay.

Todd Edwards: We saw very good improvements in gross to net during Q4 and expect that progress to continue in subsequent quarters, with us approaching our target Boston net in the 50s for the psoriasis indication by the second half of 2024. One very large economic opportunity to accelerate prescription growth is expansion into Medicaid and Medicare, which we expect to begin as early as 2024. Roughly a third of psoriasis patients and nearly half of subderm and atopic dermatitis patients are on Medicare or Medicaid. So this is a very important opportunity for us. Zuri's pricing falls below the CMS specialty threshold tier and my other Reddit topics, so we are well-positioned to access these segments. Now moving on to slide 11.

Okay.

[music].

Okay.

Todd Edwards: We are seeing a tremendous early response to the launches of refoam, the first drug approved for seborrheic dermatitis, with a new mechanism of action in over two decades, as you have likely seen in IQVIA data. We have a strong start to the launch with a very positive launch trajectory. The first approved treatment unconstrained by severity, duration, and location.

[music].

Okay.

Todd Edwards: Xerifoam is different than anything else derms or patients have seen for this disease. With treatment success of 8 in 10 patients in our Pivotal Trial, with over half of these patients completely clear in just 8 weeks, Xerifoam has a significant impact on it, the most bothersome symptom of this disease, with improvements seen as early as 48 hours. Simple once daily leave-in application that's much more convenient than any other option. And taken together, we believe Zerifone can be the new standard of care in managing sedentary. I'm now on slide 12.

[music].

Okay.

Thanks.

Okay.

Todd Edwards: With a product profile offering rapid, dramatic disease clearance and significant reduction in itch with a simple, single treatment, HCPs and patients are very enthusiastic about the availability of Xerifoam. Eighty-one percent of survey prescribers view the Zerifoam profile as very compelling or compelling. They also recognize the attributes of applicability to any part of the body, the uniqueness of the vehicle, and critical efficacy needs for this patient type, as well as the rapid response to itch and erythema, which then helps to reduce the number of treatments in the regimen and potentially leads to improved compliance.

Okay.

[music].

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

[music].

Yes.

Thanks.

Thank you.

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

Sure.

Yes.

[music].

Thanks.

Okay.

Sure.

Okay.

Thanks.

Sure.

Okay.

Thank you.

Okay.

Thank you.

Okay.

Yes.

Okay.

Thank you.

[music].

Okay.

[music].

Okay.

Yes.

Okay.

Thanks.

Sure.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

Okay.

Yes.

Okay.

Yes.

Thanks.

Okay.

[music].

Okay.

Sure.

Okay.

Sure.

Okay.

Yes.

Okay.

[music].

Okay.

Yes.

Thanks.

Okay.

[music].

Yes.

Okay.

Todd Edwards: On slide 13, as mentioned previously, we have secured access with the three national PBMs who recognize Zerif foam as a line extension under the Zerif cream contract. This has translated into an increased volume of covered prescriptions early in the launch period, with covered prescriptions already near 50% of total volume. We continue to work with the downstream health plans, getting them on board, and this accelerated coverage will translate into more rapid improvement and growth than we saw with the CREAM launch or with the new DERM product. Finally, all the key EMRs already have the refilm available for electronic prescribing. Moving to slide 14.

Okay.

Yes.

Okay.

Yes.

Okay.

Sure.

Yes.

Okay.

[music].

Okay.

[music].

Okay.

Right.

Yes.

Thanks.

[music].

Okay.

Yes.

Great.

Okay.

Todd Edwards: Building on the strength, label, and product profile, we are confident that we have the ingredients in place for a successful launch of Zerifoam and SebDerm, with relationships already built with dermatology, a field team trained on a value proposition and ready to promote and educate. Contracted Pharmacy is in place, familiarity with the copay card and processes that go with the product, and access to the PBMs to ensure patients get the drug. I look forward to updating you further on our commercial progress throughout the year. We're also looking forward to upcoming launches and new indications. And so I will hand it over to Patrick to cover. Thanks, Todd.

Okay.

Hi.

Okay.

[music].

Okay.

[music].

Okay.

Hi.

Yes.

Thanks.

Okay.

Right.

Okay.

Yeah.

Right.

Okay.

Yes.

[music].

Patrick Burnett: I'm extremely proud of the team's performance in delivering on the promise of topical flumelast in the dermatology community and hitting all our timelines with regard to our regulatory milestones. On slide 16, I'm going to cover these according to indication, with psoriasis first. Here we have approval down to the age of six after we've expanded the indication, and the opportunity in pediatrics to reach the two to five-year-olds will be the subject of a future FDA review.

Yes.

Okay.

Yes.

[music].

Okay.

Tom.

Yes.

Okay.

Sure.

Yes.

[music].

Patrick Burnett: Next, for Seb Durham, with our approval in December and the recent launch, physician excitement is palpable, and the feedback at medical congresses has been very positive. The profile here is unprecedented efficacy with a once a day foam in a market as big as psoriasis, with no innovation in decades and no branded competition. So moving on to atopic dermatitis, as Frank mentioned, the FDA accepted our Supplemental NDA for Rafumilaz cream as a potential treatment for atopic dermatitis for patients down to the age of six, and they assigned a PDUFA action date of July 7th this year.

Okay.

Good day and welcome to the <unk> Biotherapeutics 2023 fourth quarter and full year financial results Conference call.

At this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session to ask a question. During this session you will need to press star one one on your telephone you will then hear an automated message advising Mr. Han has been raised.

Withdraw your question. Please press star one again.

Please be advised that today's conference is being recorded I would now like to hand, the call over to Derek Cole <unk> Investor Relations. Please go ahead.

Patrick Burnett: And finally, we're also expecting to submit another SNDA with the FDA for Zarif foam in scalp and body psoriasis in the second half of 2024. On slide 17, I want to highlight some recently released pooled data from our phase 3 AD studies in tegument 1 and 2. And it's quite notable and highly unusual that over 90% of patients saw improvement in their symptoms in just four weeks, and nearly 70% saw at least a 50% improvement. But look at the more demanding EZ75 hurdle.

Thank you Andrew Good morning, everyone and thank you for joining us today to review 2023 financial results and business update.

Slides for today's call are available on the investors section of the Arcadis website on the call today, we have Frank <unk>, President and CEO, Patrick Burnett, Chief Medical Officer, Todd Edwards, Chief Commercial Officer, and John Smith, Chief Financial Officer.

Remind everyone that we will be making forward looking statements. During this call. These statements are subject to certain risks and uncertainties and our actual results may differ we encourage you to review all the company's filings with the Securities and Exchange Commission, including descriptions of our business on risk factors.

Let me hand, the call over to Frank.

Thanks Derek.

Now on slide five of the deck.

We've had a lot of really exciting progress since we last spoke for our Q3 earnings call and I couldnt be more pleased with the <unk> team and our execution in the quarter.

Patrick Burnett: Almost 45% of patients achieved this large improvement at week 4. And, encouragingly, in the long-term study, which we've released but aren't showing here, at the end of 56 weeks, two out of three patients had achieved a 75% improvement. It's really exciting to see where we have a high proportion of patients responding early and then seeing an increased benefit over time with long-term treatment. And in that long-term study, we also looked, for the first time, at our ability to control the disease with a less frequent maintenance regimen, where patients were switched to twice-weekly treatment if they reached complete clearance.

We're more excited about the foundation these results lay down for progress in 2024.

We continue to see growing momentum in Missouri of cream launch in psoriasis as health care providers and their patients see how it addresses real needs in their treatment of psoriasis, we've now generated.

<unk> hundred 65000 prescriptions and over 10700 unique prescribers to launch to date as our product delivers positive clinical experience for <unk> and their patients.

Patrick Burnett: We're really happy about the response there. This regimen fits nicely with current clinical practice, and these data have really resonated with dermatology. We're excited about the Rifumus cream clinical profile for AD and the significant opportunity in this large and growing market. The dynamics here at AD are favorable towards rapid adoption and share some of the positive tailwinds as seb derm. In pediatric patients, especially here in AD, there's a propensity to adopt non-steroidals higher than in the psoriasis patient population, and that's largely driven by parents' avoidance of steroids.

Coming on top of our progress.

<unk> with Citi.

<unk> cream in psoriasis. We also received approval for is there a film four separate dermatitis in December and launched in late January.

Don't think I've ever seen comparable levels of excitement amongst patients and dermatologists as what we're hearing about three film.

We also continued to execute against our clinical and regulatory milestones with a steady flow of successes. This past quarter, Patrick I'll go into little more details in a minute, but during the quarter. The FDA accepted our supplemental NDA for atopic dermatitis down to the age of six and assigned a target date of July seven 2024 potentially.

Expanding our portfolio even further.

Patrick Burnett: Moving on to slide 18, I want to highlight the itch response across our portfolio of products. So here we're showing the WINRS, or worst itch numeric rating scale, results of our phase 3 studies. These are pooled results for psoriasis dermis and the AD integument studies, and these are individual study results for stratum and erector. Itch is a primary symptom for these conditions and a key driver of our quality of life impact. So Reeve Cream and Foam at 0.3% and Topical or Fulminolab 0.15% cream for AD provided consistent and rapid improvements in itch across psoriasis, sebderm, and AD, respectively, with improvements as early as 24 to 48 hours as compared with vehicle-treated patients. This includes scalp psoriasis in the erector study, which is particularly difficult to control and only four weeks of treatment With that, I'll pass it over to John. Operator, can you hear me? This is Frank.

We've seen robust consistent and predictable efficacy across all targeted indications, including psoriasis <unk> in atopic dermatitis in each of their respective pivotal trials.

In addition in October 2023, the U S patent and trademark office or to the company a new formulation patent that covers it means for inhibiting reform last crystal growth that is not limited in excellent glycol and.

And in November 2023. The company was also awarded a new method of treatment patents covering a topical reform last formulation with an extended half life.

Both patents do not expire until 2037.

And in October we completed a secondary offering that raised $102 million, putting us in a strong financial position to continue investing in the ongoing launches in plaque psoriasis and <unk> as well as the potential atopic dermatitis launch later this year, while continuing to development the development of our pipeline.

Moving on to slide six.

The reason why we're so excited for this year is that we are in the midst of a very significant expansion of the opportunity for topical reform last which we expect will translate into a substantial acceleration of our revenue trajectory.

You've seen this before but from the initial approval for psoriasis. The total addressable market for us the Reed could grow around 10 fold.

Frank Watanabe: Yes, I can hear you now. While we're working on John, I'll take over for him for just a minute. So, if you're listening, I'm on slide 20. We achieved $29.2 million in net product revenue for Zuri for the full year 2023, with $13.5 million of that in Q4, reflecting a 67% growth from Q3 to Q4, which comes on top of the approximately 70% sequential growth we saw from Q2 to Q3. This was driven by substantial growth, gross net, excuse me, percentage improvement down to the mid-60s and the team's success in pulling through a covered. We also saw healthy prescription growth in the quarter. So looking forward to 2024, we expect continued prescription growth and gross net improvements for Zareve cream and psoriasis and continued prescription momentum and GTN improvements for Zareve foam.

This year alone to over 15 million patients in the United States.

We have the right commercial team in place for success and we have an excellent plan to execute against these opportunities.

With that let me turn it over to Todd to provide some further commentary around Missouri cream launch in psoriasis and update you on how the firm is progressing its edgar.

Thank you Frank and I am very enthusiastic about our growing commercial portfolio recent progress and a tremendous opportunity I see ahead.

Moving to slide eight.

<unk> psoriasis launch is accelerating and our execution strategies are showing signals that we are able to push the launch trajectory in psoriasis.

These efforts also lay a solid foundation for sustained growth in <unk> and potential further growth in new indications upon approval.

The <unk> prescription volume is growing every quarter <unk> has over 165000 <unk> launch to date.

Fourth quarter 2023, <unk> were up 26% compared to Q3, 2023 and over 290% compared to the fourth quarter of 2022.

We are starting to see a preference for <unk> relative to the non stroller competitor as evidenced by our city gains in market share and $8 tends to reap riders are increasing their utilization of the re.

The new pediatric label expansion down to six years of age incrementally expands our opportunity for growth.

Further strengthens zuhri safety and Tolerability profile.

Refills continue to be an important driver of long term growth the number of refills in the fourth quarter increased by around 39% versus the third quarter.

Frank Watanabe: Although there will likely be a temporary erosion in psoriasis, gross net improvements in Q1-24 versus Q4-23 due to the typical deductible resets and patients changing their coverage that always occur at the beginning of the year. Turning to slide 21, you can see the strong performance in the fourth quarter with net product revenues for the quarter of $13.5 million, up over $10 million from Q4 of 22. Our annual expenses for the fourth quarter were $23.8 million, which is down significantly from Q4 of 22 due to the continued decrease in development costs on topical reform last programs.

And now constitute more than one in three prescriptions, which is in line with what we want and expect to see.

The positive experience patients have with zuri.

Now on slide nine.

There are multiple important dermatology conferences in January.

After spending time with dermatologist MPS and Tas currently using Siri dream the feedback I received about the product is exceptional.

These prescribers spoke to me about their patients being delighted by the results achieved with <unk>.

The prescriber feedback is clear that there are some distinct attributes as the retreat that make it attractive.

The ability to be used anywhere.

Once daily dosing.

Compelling efficacy data.

Favorable tolerability profile safety and appropriateness for any psoriasis patients.

And these attributes make zurich cream and attracted treatment for patients with different types of needs.

The patient who is concerned about steroids.

The patient who has been cycling through various topical.

Frank Watanabe: And recall that our R&D expense includes research, operations, and medical jurisdiction. On slide 22, looking at full year total revenues of $60 million, with $29.2 million in net product revenues and $30 million in other revenues related to the upfront payment in connection with the Huadong Collaboration and Licensing Agreement we received in Q3. R&D expenses for a full year were $111 million, which is down $70 million approximately due to the one-time $30 million fee associated with the Ducentis acquisition in 2022, the winding down of our major reform last phase three studies and lower pre-commercial production. We expect full year 2024 R&D expenses to decline meaningfully versus full year 2023 as we continue completing the few remaining phase 3 studies, continue with regulatory filings, reduce our SG&A expenses for the year were $185 million, primarily due to higher commercialization expenses year over year driven by continuing investments in Zerif cream and preparing for the ongoing launch of Zerif foam and the potential upcoming launch in atopic dermatitis.

Are ones that are exploring different treatments to fine that works for them long term or to manage flares.

No the psoriasis patients have different needs, depending on where they are in their journey.

And see that as the REIT cream can really be a solution for most of these patients.

I'm now on slide 10.

The team has been focused on three pillars of commercial success for sustaining Surrey prime growth in psoriasis.

Firstly, driving ACP awareness and use the.

Subscriber base is growing steadily but now over 10700 unique prescribers since launch.

Our experienced field sales team is focused on high volume geographies.

Phil team continues to deliver broad efficacy messaging to.

To move physicians, along the adoption curve from initial trial in specific regions of the body to.

The expanded use for patients psoriasis plax across a large body surface area.

Secondly, patient engagement and positive use experience.

Retail volume has increased to 38% of total volume as the re patient awareness continues to improve.

And finally, the broad high quality access in commercial and anticipated Medicare and Medicaid coverage creates the opportunity for more patients to experience here.

So really differentiated pricing and access strategy continues to resonate with payers with over 132 million commercial lives, having access to as a REIT cream.

There are cute his team successfully secured coverage for <unk> with all three large pbms in the U S. Within 12 months of the launch and we anticipate further improvements as the REIT commercial coverage throughout 2024.

And the step edits are typical for branded products in dermatology and for us to read. This process is now well understood by pharmacies and dermatology offices, we are seeing very encouraging trends.

Percentage of cream prescriptions being covered by insurers.

A clear opportunity to expand on this by working with contract with pharmacy partners.

From my experience I am confident in our.

Our ability to continue to improve our gross to net.

We saw very good improvements in gross to net during Q4.

Spect that progress to continue in subsequent quarters.

Frank Watanabe: As we head into 2024, we expect SG&A to increase over 2023, which aligns with the investment behind our sednerm launch and preparations for the atopic dermatitis launch, including our previously announced incremental expansion in sales. We will continue to focus on appropriate investments to support our commercial activities. Launching drugs properly requires substantial investments in staff and promotional investment, and having multiple launches in a short period of time really magnifies these resource demands. It's important to note that we have made concerted efforts to adjust our operating expenses to reflect our transition from being exclusively a pre-commercial company to a commercial enterprise, and ensuring we invest appropriately in current launches, and, if approved, ensure the same for our future launches. We don't want to be in a position of underinvesting and harming the trajectory for the ongoing launches in Psoriasis and Sebderm or future launches.

With us approaching our target gross to net in the fifties.

For the psoriasis indication for the second half of 2024.

One very large incremental opportunity to accelerate prescription growth is expansion into Medicaid and Medicare, which we expect to begin as early as 2024.

Roughly a third of psoriasis patients and nearly half of scepter in atopic dermatitis patients are on Medicare or Medicaid. So this is a very important opportunity for us.

There is pricing falls below the CMS specialty thresholds here.

Other branded topical.

So we are well positioned to access these segments now.

Now moving on to slide 11.

We are seeing a tremendous early response to the launches of reform. The first drug approved for several dermatitis with a new mechanism of action in over two decades.

As you have likely seen in ICU via data.

We have a strong start to the launch with a very positive launch trajectory.

The first approved treatment unconstrained by severity duration and location.

<unk> is different than anything else in terms of patients have seen.

For this disease.

With treatment success, eight and 10 patients in a pivotal trial with over half of these patients completely clear in just eight weeks.

Significant impact on itch, most bothersome symptoms of this disease with improvements seen as early as 48 hours simple once daily leave in application, it's much more convenient than any other option.

Frank Watanabe: Earlier in the year, we undertook a reorganization and reprioritization of non-commercial efforts to align with our commercial execution focus in 2024, which will result in an aggregate of approximately $50 million of reduced expenses over the next two years as compared to previous internal forecasts. You can expect us to continue to focus on cash burn as we look for opportunities to maximize our OPEX while making continued progress on maximizing the ZARIV opportunity across multiple unique indicators. A top priority for our team is being good stewards of the investor capital entrusted to us, and we believe we have demonstrated an excellent track record thus far. We have made appropriate levels of investment that established our pipeline, achieved nine positive phase three clinical trials, and now two FDA approvals, with a third potentially coming mid-year, while launching two products to date. We have approved another in the second half of 2024 and a fourth in 2025. On slide 23, our final slide on the balance sheet, we had cash and marketable securities of $272.8 million as of December 31.

And taken together, we believe is the reform can be the new standard of care and managing each center.

I'm now on slide 12.

With a product profile offering rapid dramatic disease clearance and significant reduction in itch with a simple single treatment.

<unk> patients are very enthusiastic about the availability of the reform.

81% of survey prescribers view this refund profile is very compelling for compelling.

They also recognize the attributes of applicability to any part of the body.

The uniqueness of the vehicle and critical efficacy needs for this patient type rapid response at ish and you're a FEMA.

Which then helps to reduce the number of treatments in the regimen.

And potentially leads to improved compliance.

On slide 13 as mentioned previously we have secured access with the three national Pbms, who recognize the refund is a line extension under his re prime contracts.

This is translated into an increased volume of covered prescriptions early in the launch period with covered for scripts already near 50% of total volume.

Continue to work with the downstream health claims being them onboard and this accelerated coverage would translate into a more rapid improvement in gross to net compared to what we saw with the cream launch.

Or what is your new derm products.

Finally, all the key <unk> already has the reform available for electronic prescribing.

Moving to slide 14.

Building on our strength label and product profile. We are confident that we have the ingredients in place for successful launch is the refund is that derm.

With relationships already built with dermatologists.

I look forward to updating you further on our commercial progress throughout the year.

Frank Watanabe: As I mentioned in a previous slide, our current capital enables us to continue to invest appropriately in commercial initiatives. We also remain confident about concluding an outlicensing deal in Japan to bring in additional non-dilutive capital, which would further extend runway and largely address the capital requirement covenant with SLR. Additionally, we are actively pursuing a primary care partnership and are seeking and seeing early interest from our efforts. So that's it for our comments today. If I step back for a minute, we founded Arcutis with a vision of bringing meaningful innovation to the medical dermatology space, especially the topical space. With our second launch in less than 18 months, I'm proud that our team is making that vision a reality and, in the process, helping a growing number of people suffering from dermatologic conditions. As we continue to execute on the psoriasis and subderm launches and hopefully add the atopic dermatitis launch later this year, we look forward to helping millions of people, allowing us to create additional shareholder value. We are confident that 2024 will be a transformational year for Arcutis.

We are also looking forward to upcoming launches in new indications and so I will hand, it over to Patrick to cover that.

Thanks Todd.

I'm extremely proud of the team's performance in delivering on the promise of topical whom last in the dermatology community and hitting all our timelines with regard to our regulatory milestones on slide 16, I'm going to cover these according to indication with psoriasis first here, we have approval down to the age of fixed after we had expanded the indication and the opportunity in pediatrics.

To reach the 2% to five year olds will be the subject of a future FDA review.

An extra step with our approval in December and the recent launch of <unk>.

The excitement is palpable and feedback at medical Congresses has been very positive profile here is unprecedented efficacy with a once a day and the market is biggest psoriasis with no innovation in decades and no branded competition.

Moving on to atopic dermatitis as Frank mentioned, the FDA accepted our supplemental NDA for <unk> cream as a potential treatment for atopic dermatitis for patients down to the age of six and they assigned a <unk> action date of July seven over this year and finally, we're also expecting to submit another S. NDA with the FDA for the reform.

<unk> body psoriasis in the second half of 2024.

On slide 17, I want to highlight some recently released pool data from our phase III <unk> studies and taking it one and two and it is quite notable in highly unusual that over 90% of patients saw improvement in their symptoms in just four weeks and nearly 70% seeing at least a 50% improvement looking at the more demanding EZ 75 hurdle.

Almost 45% of patients achieve this march improvement at week, four and encouragingly in the long term study, which we've released but aren't showing here at the end of 56 weeks two out of three patients had achieved a 75% improvement so really exciting to see where we have a high proportion of patients responding earlier.

And then seeing an increased benefit overtime with long term treatment and in that long term study. We also looked for the first time and our ability to control the disease with less frequent maintenance regimen, where patients were switched the twice weekly treatment. If they reach complete clearance, we're really happy about the response there this regimen fits nicely with the current clinical practice.

Frank Watanabe: And with that, we will open it up for Q&A. Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To submit your question, press star one one again for one moment. And our first question comes from Tyler Van Furen with TD Cowen. All right. I think that's me.

And these data have really resonated with dermatologists.

We're excited about the <unk> cream clinical profile for <unk> and the significant opportunity in this large and growing market does IMAX here at ADR favorable towards rapid adoption and share some of the positive tailwind as sub term in pediatric patients, especially here in <unk>. There is a propensity to adopt nonsteroidal, it's higher than psoriasis.

Operator: Good morning, guys. Thanks for taking the time to answer the question. So the subderm prescriptions for Zerifoam have gone vertical very early in the launch and have reached levels that Zerif, Cream, and Botama took significantly longer to reach. So I understand that having coverage from day one is a huge benefit, and there's not a direct competitor, but what else would you attribute the success to early on? And do you think Zerifoam could ultimately end up being significantly larger than the Cream? Yeah, I think maybe Todd, if you could take that and then Patrick, see if you have any additional comments after Todd's comment in the commercial.

Patient population and that's largely driven by parents avoidance of steroids.

So moving on to slide 18, I want to highlight the itch response across our portfolio of products. So here, we're showing Wi at Rs worst itch numeric rating scale. The results of our phase III studies. These are pooled results for psoriasis dermis and the EDI Integument studies and these are individuals study results for stratum a director.

It's just the primary symptom for these conditions and a key driver of our quality of life impact <unk> cream and follow them at 3% and topical rux, Alaska, 0.15% cream for.

Provided consistent and rapid improvements in niche across psoriasis, SAB derm and <unk>, respectively with improvements as early as 24 to 48 hours as compared with vehicle treated patients.

With that I'll pass it over to John.

Operator can you hear me. This is Frank Yes, I can hear you now.

John I'll take a reform for just a minute.

So if you're listening so I'm on slide 20.

So we achieved $29 2 million in net product revenues for <unk> for the full year 2023, with $13 $5 million of that in Q4, reflecting a 67% growth from Q3 to Q4, which comes on top of the approximately 70% sequential growth we saw from Q2 to Q3.

This was driven by substantial growth.

Gross net excuse me a percentage improvement down in the mid <unk> and the team's success in palm to recover prescriptions.

We also saw healthy prescription growth in the quarter. So looking forward to 2024, we expect continued prescription growth in gross net improvements for as reoccurring psoriasis and continued prescription momentum in GTA and improvements further reform, although there will likely be a temporary erosion in <unk> gross to net improvements in Q1 four versus Q4.

23, due to the typical deductible resets and patients changing their coverage that always occurs at the beginning of the year.

Turning to slide 21.

You can see the strong performance in the fourth quarter with net product revenues for the quarter of $13 5 million up over $10 million from Q4 of 'twenty two.

R&D expenses for the fourth quarter were $23 8 million, which is down significantly from Q4 'twenty two due to continued decrease in development costs on topical form last programs and recall that our R&D expense includes research operations and medical affairs spend.

On slide 22.

Looking at full year full year total revenues of $60 million with $29 2 million in net product revenues and $30 million in other revenues related to the upfront payment in connection with the quite on collaboration and licensing agreement we received in Q3.

Patrick Burnett: And in this space where we haven't really had any innovation for 10, 20 years, remember, this is the first new mechanism of action for a prescription topical in over two decades. Yeah, I think there is really a lot of interest in having a new therapy. And that translates into a level of frustration for the dermatologist who was kind of pent up prior to this because when a patient would come back in, they just had nothing to offer them that wasn't a topical antifungal or a topical corticosteroid. So I think that this is simply a component of solving an unmet need where there are patients who are dissatisfied with their treatment and healthcare providers who haven't really had anything new to offer.

R&D expenses for full year were $111 million, which is down $70 million approximately due to the onetime $30 million fee associated with the <unk> acquisition in 2020 to winding down of our major reform last phase III studies and lower pre commercial production.

SG&A expenses for the year were $185 million, primarily due to higher commercialization expenses year over year, driven by continued investments in <unk> cream and preparing for the ongoing launches of reform and the potential upcoming launch in atopic dermatitis that's approved.

Patrick Burnett: And we've heard that in anticipation of the approval and launch for the two or three years while we were running our phase three studies, looking for the FDA to approve the drug, there was a high level of anticipation for this for those reasons. Thank you. One moment, please, for our next question. And our next question comes from the line, "Oye." Missouri.

It is important to note that we have made concerted efforts to adjust our operating expenses to reflect our transition from being exclusively a pre commercial company to a commercial enterprise and ensuring we invest appropriately in current launches and if approved and sharing the same for our future launches.

We don't want to be in a position of under investing in harming the trajectory for the ongoing launches in psoriasis <unk> or future launches that's approved.

Earlier in the year, we undertook a reorganization and re prioritization of noncommercial efforts to align with our commercial execution focus in 2024.

Operator: Thank you all for joining us. We appreciate it. Hey, guys. Um, yeah, thanks for taking my question. So just on the launch, the septum launch.

Which will result in the aggregate approximately $50 million of reduced expenses over the next two years as compared to previous internal forecasts.

Frank Watanabe: Could you, you know, speak of warehousing effects? Are you sort of suggesting primarily that these are the kind of patients who, you know, have limited options? And I guess, what kind of patients are you seeing generally? Are they, do they tend to be more on the severe side or the mild side?

Can expect us to continue to focus on cash burn as we look for opportunities to maximize our opex, while making continued progress on maximizing this opportunity across multiple unique indications.

Frank Watanabe: And could you sort of just maybe provide some of the demographics a little bit, if you have such data? Yeah, so that's my first question. I'll follow up. Yeah, you know, I think that the point we're trying to make is, you know, think about it. It's been over 20 years since there was a truly new drug for seborrheic dermatitis. And so, you know, there is a very large pool of patients, as Patrick or Todd mentioned, who, you know, have been eagerly awaiting Xerifilm's availability. And, you know, I think some of the very early demand is probably these patients who have been, as Patrick mentioned, been cycling for three years and have been just sitting in the office, and now all of a sudden, the doctor has a new option, and they're going to put them on Xerifilm.

Well launching two products to date and if approved another in the second half of 'twenty four and a fourth in 2025.

On slide 23.

Final slide on the balance sheet, we had cash and marketable securities of $272 8 million as of December 31.

As I mentioned in a previous slide our current capital enables us to continue to invest appropriately and commercial initiatives.

Additionally, we are actively pursuing a primary care partnership and are seeking and seeing early interest from our efforts there.

So.

Four our comments today, if I step back for a minute we founded our curious with the vision of bringing meaningful innovation to the medical dermatology space, especially in the topical space.

And with our second launch in less than 18 months I'm proud that our team is making that vision a reality and then the process is helping a growing number of people suffering from dermatologic conditions.

As we continue to execute on the <unk> and <unk> launches and hopefully, adding atopic dermatitis launch later this year, we look forward to helping millions of people, allowing us to create additional shareholder value.

Frank Watanabe: So we think that there is this pool of ready-made patients that is helping the early launch, but we wanna make sure that folks don't think that that pool will exist forever with this constant stream of very large patients. Having said that, our research suggests that dermatologists see about 75 subderm patients a month. So it's a very large population of patients, which should sustain long-term growth for us. In terms of your question around the demographics, I think it's really too early for us to have any data on that.

We're confident that 2024 will be a transformational year for <unk> and with that we will open it up for Q&A.

Thank you as a reminder to ask a question. Please press star one one on your telephone.

And wait for your name to be announced to withdraw your question.

Press Star one again, one moment please.

And our first question comes Brian I think we're back on Tyler Okay, great. Thanks, Lynn TD Cowen Your line is now open.

Alright, I think Thats me good morning, guys. Thanks for taking the question.

So the sub derm prescriptions for reform of God vertical very early in the launch and have reached levels that theory of cream and at the time it took significant longer significant longer to reach so I understand that having coverage from day one of the huge benefit and there is not a direct competitor but.

Todd Edwards: We'll be looking at adoption and where doctors are using it as we get farther into the launch, and we'll be able to share some of that data in the future. But at this point in the game, we don't have any data on that, and maybe even it may help us understand a little bit. So you, during the earlier call, the launch call, you indicated there were scripts, some that were waiting at the pharmacies. Are you still seeing a significant number of scripts that have not been filled or shipped to consumers? Or at this point, these scripts, you know, they come in, and they are, I guess, readily shipped. I'm just wondering if there is a large delta.

What else would you attribute the success to early on do you think is the reform could ultimately end up being significantly larger than the cream.

Yes, I think maybe Todd if you could take that and then Patrick if you have any additional comments after todd's comment from a commercial standpoint.

Yes, Thank you Frank and yes as mentioned, we're very pleased with the uptake is the reform and.

I mean with the weekly demand trends.

I'd say, it's too early to comment on how much of that is coming from warehouse of patients but what.

I would say that one big driver of this initial uptake is just that that there is a it's a ready pool of patients.

That are out there.

And.

These patients have been waiting for <unk> foam.

Waiting for a more convenient more effective.

Treatment and so I think that that's been driving this but.

Todd Edwards: And maybe along that line, could you kind of also help us understand in your Zareve direct program whether there are any differences between the cream and the foam in terms of getting it processed? And if there are any, yeah, just wanting a little more clarity. Sure, yeah, sure. Todd, can you take those, too?

We expect continued strong growth of the product, but I just caution that a linear progression based on retrans is probably overly optimistic.

But.

But I think that there's a long runway for us to reform and we're looking forward to continuing to grow this product.

Yes.

Medical Thats, yes, yes, yes, I think just kind of adding that.

Perspective of how that might fit into practice more dermatologists.

Todd Edwards: Yeah, absolutely. As mentioned, prior to the commercial launch, there were a number of prescriptions that were sitting at the pharmacy, but those prescriptions have all been filled and distributed to the patient, so we don't see what I'll call a warehouse of prescriptions sitting at the pharmacy today. And then relative to our Zareve direct program, I think this is a big strategic advantage for us, because the program's identical. It's the same program for Zareve cream and psoriasis or for Zareve foam and seborrheic dermatitis. And that creates great efficiency for the dermatology offices, given that they have two unique products for two distinct patient populations, psoriasis and sedderm, but one process in fulfilling that prescription. And so that is a common process across both.

Separate dermatitis patients.

Can be a challenging patient type in the dermatology practice just because.

<unk> had them in your practice for 10 15 years some time, yes.

That is a very long runway for patient.

Before they actually get to a diagnosis.

Oftentimes they've they've tried everything thats out there in this space, where we haven't really had any innovation for 10 20 years I remember this is the first new mechanism of action for a prescription topical in over two decades.

Yes, I think there really is a lot of interest in having a new therapy and that translates into a level of frustration for the dermatologists that was kind of pent up prior to that because when a patient would come back and they just had nothing to offer them that wasn't a topical antifungal or topical corticosteroid. So I think that this is simply.

A component of solving unmet need where there are patients who are dissatisfied with the treatment and health.

Health care providers, who haven't really have anything new to offer.

And we've heard that in <unk>.

The patient of the approval and launch for the two or three years, while we were running our phase III study is looking for the FDA to approve the drug that there was a high level of anticipation for this for those reasons.

Operator: Okay, thank you. Thank you. One moment, please, for our next question. And our next question comes from the line of... Shibutani with Goldman Sachs. Hi, thanks for taking our question. This is Steven on behalf of Chris.

Thank you.

One moment please for our next question.

And our next question comes from the line of Boy ear with Mizuho.

Hey, guys yeah. Thanks.

Thanks for taking my question so just.

On the.

The launch process.

<unk> launch.

Could you.

You speak of warehousing effect.

Are you sort.

Suggesting primarily that these are kind of patients who have limited options and I guess are you seeing.

What kind of patients are you seeing generally are they do they tend to be more on the severe.

Severe side or the mild side and could you sort of just maybe applied some of the demographics a little back if you have such data.

Yes. So that's my first question I'll follow up with a second question.

Oh, yes, I think that the.

The point, we're trying to make is think about it it's been over 20 years since there was a truly new drugs for separate dermatitis.

So there is a very large pool of patients.

Patrick Alright, Todd mentioned excuse me, who are have been eagerly awaiting.

Zuhri films availability and I think some of the very early demand is probably these these patients who have been as Patrick mentioned have been cycling for three years and they've been just sitting in the office and now all of a sudden the doctor has new option and theyre going to put them on <unk>.

So.

We don't we think that there is this pool of ready made patients that is helping the early launch, but we wanted to make sure that folks don't take that.

That pool will exist forever with this.

This constant stream of relapsed patients having said that.

Our research suggests that dermatologists see about 75 sub burn patients a month. So it's a very large population of patients, which should sustain long term growth for us in terms of your question around the demographics I think it's really too early for us to have any data on that we'll be looking at adoption.

Adoption and where doctors are using it as we get farther into the launch and we'll be able to share some of those data in the future, but at this point in the game, we don't have any data on that yet.

Okay and.

Well, maybe you may help us understand a little bit so.

<unk>.

During the earlier call. The launch call you indicated that water a squirt some that were waiting at the pharmacies.

Are you still seeing significant number of scripts that have not been have not been filled a ship to consumers or at this point.

Todd Edwards: Thank you. One moment, please, for our next question. And our next question comes from the line of Seamus Fernandez and Hines. Hi, this is Colleen on behalf of Seamus.

The scripts there.

Come in and they are I guess gradually shift just wondering if theres a large delta.

And maybe.

Along that line could you kind of also help us understand the end user.

Correct program is there any differences between the cream and the foam and in terms of getting it process and if there is any yes.

Operator: Thanks for taking our question and congrats on the quarter. So we're seeing around 6,000 scripts per week for Zareve over the past few weeks. So as a conservative estimate, if we analyze those 6,000 scripts for 48 weeks and assume a 60% growth SNF, by our math, that gives us a little under $100 million for Zareve sales. Are we thinking about this the right way for a conservative minimum for 2024, which also isn't taking the atopic dermatitis launch into account? Or are there other factors we should be considering for the year?

Yes.

Wondering a little more clarity on that thanks sure Yes, sure Todd can you take those two yes, absolutely as mentioned.

Prior to the commercial launch there was a number of prescriptions that were sitting at the pharmacy, but those prescriptions have all been filled and distributed to the patient.

So we don't see what I'll call. It warehouse prescriptions sitting currently at the at the pharmacy today.

And then relative to our.

<unk> direct program and I think this is a big strategic advantage for US is that the programs identical as the same program for <unk> cream in psoriasis, <unk> foam and separate dermatitis and that creates a great efficiency for the dermatology offices, given that two unique products for two distinct patient populations.

<unk> as we said there, but one process and fulfilling that prescription.

And so it is a common process across across both products.

John Smither: Thanks. Yeah, I think I'll let John answer that one. Thanks, Frank.

Okay. Thank you.

Thank you.

A moment please for our next question.

And our next question comes from the line of Chris <unk> with Goldman Sachs.

John Smither: Specifically, we're not giving revenue guidance, and the 6,000 number I believe you quoted is both cream and foam. As Todd mentioned, we're seeing early signs of strong seb derm. We're seeing improvement around psoriasis. We're in the early part of the launch, so I think we're standing back and thoughtfully looking at how that launch is going. We're quite enthusiastic about how the year will turn out, but we're not giving specific guidance on revenue.

Alright, Thanks for taking my question. This is Steven on for Chris.

Yes, John do you want to maybe take the channel question Todd could you address the team.

Okay.

With respect to Q1, no we're not anticipating any.

Channel buildup with respect to Q1.

Yeah, and then a question relative to being right sized.

As you've heard the potential atopic dermatitis launch.

In anticipation of that launch we will expand our field sales organization.

Today, roughly we have around 100.

Fuel cells individuals within the team.

We will likely expand that by approximately another 50 sales representatives to make certain that.

We can get the breadth and depth of prescribing across to.

Two products that are approved today and potentially the atopic dermatitis products. So we will be expanding and that will be initiated shortly.

Operator: Thank you. One moment, please, for our next question. And our next question comes from the line of Serge Ballinger. Wouldn't he say... Hi, good morning.

Okay. Thank you very much.

Thank you one moment please for our next question.

Yes.

And our next question comes from the line of Seamus Fernandez with Guggenheim Securities.

Hi, this is calling on for Seamus. Thanks for taking my question and congrats on the quarter.

Operator: Thanks for taking our questions and congratulations on the progress. I guess the question for Todd related to growth to net, if you reiterated your target to be the mid-50s by the end of the year for... I believe it was Zoriib Cream in psoriasis. Just curious how we should think about the other products, especially Zoriib Foam, and what will happen to overall growth in that once the AD indication comes on board and the managed care component also expands. Yeah, thank you. As mentioned by John earlier, we're anticipating the second half of the year to achieve the 50s for the gross net, that is, for the indication of psoriasis. It's too early to comment on xerifilm for seborrheic dermatitis.

So we're seeing around 6000 scripts per week for three of over the past few weeks as a conservative estimate if we annualize the 6000 scripts for 48 weeks.

60% growth by our math that gives us a little under $100 million presume yourself or.

Are we thinking about this the right way for conservative minimum for 2024, which also isn't taking atopic dermatitis launch into account or.

Or are there other factors, we should be considering for the year. Thanks.

Yes, I think I'll, let John answer that one.

Thanks, Craig.

Specifically, we're not giving revenue guidance.

And the 6000 number I believe you quoted as both prime and foam.

As Todd had mentioned, we're seeing early signs of strong SAP derm, we're seeing improvement around psoriasis.

Todd Edwards: I think the one signal that I mentioned earlier was relative to the coverage scripts, approaching 50% of the total volume. And then, relative to atopic dermatitis, just as a reminder, these are three unique and distinct products, have separate NDCs, so therefore they'll have separate unique growth synapses. But relative to the potential launch in atopic dermatitis, the PVMs, similar to what happened with serif foam, will treat the AD launch as a line extension, which will be able to support rapid uptake of cover prescriptions at launch for the atopy dermatitis product. Thank you. One moment, please, for our next question- Our next question comes from the line of Vikram Parohit with Morgan Stanley. Hi, good morning. Thank you for taking our questions. We had two, one on Sebderm and one on AD.

We're in the early part of the large.

I think were standing back and thoughtfully and looking at how that launch is going we're quite enthusiastic about how the year will turn out, but we're not giving specific guidance on revenue.

As it relates to gross to net just as a reminder.

We exited 2023 essentially.

In the mid sixties.

And there is a reset that happens in Q1 as a result of folks deductible reset and his folks also changed their medical plans. So youll see youll see that probably tick up for psoriasis since that derm, but we're confident as the year progresses that gross to net will continue to improve towards the end of 2024 and I believe in our <unk>.

We mentioned our target is in the <unk>.

Okay.

Thank you one moment please for our next question.

And our next question comes from the line of Serge Belanger with Needham.

Hi, good morning, Thanks for taking my questions and congrats on the progress.

I guess a question for Todd related to gross to nets. Thank you reiterated your target to be in the mid fifties by the end of the year for <unk>.

I believe it was already a cream and psoriasis.

Just curious how we should think about the other products.

Actually it's a reform and what will happen to overall gross to nets.

Once the AED.

Indication comes onboard.

Todd Edwards: So for Sebderm, could you remind us how many cans of product you expect patients on the phone to work through annually? Understanding it's still pretty early in the launch. And are there any interesting observations you're picking up from the initial phase of this launch?

In the managed care component also expense thanks.

Yes. Thank you, yes as.

As mentioned by John earlier that.

We are anticipating the second half of the year to achieve that $50 for the gross to net is for the indication of psoriasis.

That's too early to comment on.

As the refund for separate dermatitis, I think bill wants signal that I mentioned earlier was relative to the coverage strips approaching 50% now of the total volume.

Todd Edwards: you know which areas of the body patients are using the product and how much they're using and whether they're using it either as monotherapy or as a combination agent, and then on AD, we'd just be curious what your latest thinking is on where Zareve cream could fit in if approved versus other brands of topicals that are or may be on the market by the time Zareve launches. Thanks. Sure. Yeah, Todd. Would you maybe take this question?

And then relative to.

Atopic dermatitis.

And just as a reminder, these are three unique and distinct products have separate MDC. So therefore, they'll have separate unique gross to nets.

But relative to the launch potential launch in atopic dermatitis.

The Pbms are similar to what happened with the reform will treat the <unk> launch as a line extension.

Which will be able to support rapid uptake of <unk> prescriptions.

At launch for the atopic dermatitis product.

Okay.

Thank you.

One moment please for our next question.

Our next question comes from the line of Vikram <unk> with Morgan Stanley.

Hi, Good morning, Thank you for taking our questions. We had two one on <unk> and one on <unk>.

<unk> could you remind us how many cans of product do you expect patients on the film to work through annually.

Understanding it's still pretty early in the launch and are there any interesting observations you are picking up from the initial phase of this law John.

Which areas of the body patients are using the product and how much they are using and whether they are using it either as monotherapy or as a combination agent and then on <unk>.

Would just be curious what your latest thinking is on whereas the reef cream could fit and if approved versus other branded topical that are or maybe on the market by the time <unk> largest thanks.

Todd Edwards: And then, relative to monotherapy or not, once again, it's too early to tell specifically how dermatologists will likely be using this product. Although I will mention that there has been a lot of feedback from dermatologists relative to the convenience of this product being a monotherapy. And I think that leads back to patients really yearning for something that's more convenient and not having to use, you know, six products on average per week. And so I think that, you know, this is one significant differentiator of the product to be able to use it as a monotherapy, highly effective product anywhere on the body and scalp.

Sure Yes.

Todd.

Maybe to take your questions.

Yes for the first question relative to.

Anticipated number of units so we're anticipating that.

Per patient on average per year, a patient would you use one to two <unk> units.

And then relative to.

It's a little bit early to be able to tell where patients are using this on the body. It will.

Our label is very open relative to anywhere in the body of scout.

And then relative to <unk>.

Mono therapy or not once again, it's too early to tell specifically, how dermatologists will likely be using this product, although I will mention.

There has been a lot of feedback from dermatologists relative to the convenience of this product being a mono therapy.

Think that links back to patients really yearning for something thats more convenient and not having to use six products on average per week and.

So I think that.

This is one significant differentiator of the product to be able to use as a monotherapy highly effective product anywhere on body and scale.

Okay.

Thank you.

One moment please for our next question.

And our next question comes from the line of Sean Kim with Jones trading.

Yes.

Yes, hi, congratulations and thank you for taking my questions I guess, the one question on Medicaid and Medicare expansion opportunity. So just curious what are some of the remaining gating steps.

Operator: to realize the expansion opportunity in managed care. And my second question is about patient awareness. You mentioned about 17% among patients aware of your brand and product. I'm just curious to hear whether the demand for your products has been more from doctors recommending the products to patients or vice versa, patients kind of requesting them, and your expectations going forward, whether that awareness will further increase. Thank you. I'm sorry, but I think those are probably both to you too.

To realize this expansion opportunity in the managed care.

And my second question is about the patient awareness as you mentioned.

Approximately 70 per 17%.

Ah patients.

Fran.

<unk>.

Just curious to hear where there's a demand for your products has been.

More on the doctors recommend take their products to patients.

Or vice versa patients are requesting.

The products and then your expectations going forward with it.

And this will further increase thank you.

Sure Todd.

Sorry, but I think thats, probably both are to you too.

Todd Edwards: Yeah, thank you. And just a clarification on the first question, that was relative to the Medicaid expansion opportunity. Right. Medicaid and Medicare both. Fantastic.

Yes, Thank you and just a clarification on the first question that was relative to the Medicaid expansion opportunity right.

Alright, Medicaid and Medicare, both Medicaid and Medicare born fantastic relative to Medicare.

Todd Edwards: Relative to Medicare, we are currently in negotiations with a couple of the Part D Medicare plans, and we're anticipating Medicare coverage at some of those Part D plans to be initiated in the second half of 2024. And relative to Medicaid, a very similar timeframe. We're also actively talking and working with some of the state Medicaid plans, and we anticipate that those plans will come online near the middle of the year to the second half of the year for the Medicaid plan. And then, on the other hand, relative to patient awareness and also whether it's physician- or doctor-driven, I think right now it's primarily, for the most part, doctor-driven, given just a new product to market. There has not been any new innovation within this space in two decades, and the enthusiasm by providers around this product is lacking.

We are currently.

In negotiations with a couple of the part D Medicare plans and we're anticipating.

Medicare coverage at some of those part D plans to be initiated in the second half of 2024.

And then relative to Medicaid very similar timeframe.

We're also actively talking and working with some of the state Medicaid plans and we anticipate that those plants will come online.

Near.

The middle of the year to the second half of the year for the Medicaid plans.

And then on the other relative to patient awareness.

So whether its a physician or doctor driven.

I think right now it's primarily for the most part Doctor driven given just the new product to market.

There has not been any new innovation within this space in two decades and enthusiasm I providers around this product. So I think theres, a tremendous pushback because physicians to their patients to two.

Todd Edwards: So I think there's a tremendous push for patients to take this product. However, I think over time, that paradigm will shift to the patient as we continue to engage more directly with patients and create awareness for patients through a different mode of engagement opportunities. Sean, maybe just to clarify for you and the other animals, neither Medicare nor Medicaid are binary coverage decisions, right? So in Medicare, the majority of patients are covered by these Part D plans that are run by various PBMs or insurance companies. And so we'll get coverage with individual Medicare providers just as we have with commercial insurance. It won't all come at once, though. We'll get a little bit here, a little bit there, a little bit somewhere else.

To take this product however, I think over time that paradigm will shift.

To the patients as we continue to engage more directly with patients create awareness.

To patients through a different mode of <unk>.

<unk> opportunities.

Sean maybe just to clarify for you and the other analyst, neither Medicare or Medicaid or binary coverage decisions right. So in Medicare the majority of patients are covered by <unk>.

These part D plans that are run by various.

Pbms are insurance companies and so we will get coverage with individual Medicare providers, just as we have with commercial it won't all come at once will get a little bit here, a little bit there a little bit you had a place and then in the case of Medicaid that's administered as a state program through block grants from the federal government and so you have to negotiate with individual states for Medicaid cut.

Frank Watanabe: And then, in the case of Medicaid, that's administered as a state program through block grants from the federal government. And so you have to negotiate with individual states for Medicaid coverage. And so, again, that will be kind of a piecemeal coverage process, in fact, even more fragmented since you're dealing with such a large number of states. Okay, that's very helpful. Thank you for the clarification. Thank you. There are no further questions. Thank you for joining Arcutis today. This does conclude the call, and you may now disconnect.

And so again that will be kind of a piecemeal coverage process in fact, even more fragmented since youre dealing with such a large number of states.

Okay. That's very helpful. Thank you for the clarification.

Thank you.

No further questions. Thank you for joining US today. This does conclude the call and you may now disconnect.

Q4 2023 Arcutis Biotherapeutics Inc Earnings Call

Request a DemoDemo

ARQT

Arcutis Biotherapeutics

Earnings