2nd Quarter 2024 Financial Results & Business Update August 14, 2024 Legal Disclaimers This presentation and the accompanying oral presentation contain "forward-looking" statements that are based on our management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements other than statements of historical fact contained in this presentation, including information concerning our current and future financial performance, business plans a ...

Company Performance - Arcutis Biotherapeutics reported a quarterly loss of $0.42 per share, better than the Zacks Consensus Estimate of a loss of $0.48, and an improvement from a loss of $1.16 per share a year ago, indicating a 63.79% year-over-year improvement [1] - The company achieved an earnings surprise of 12.50% and has surpassed consensus EPS estimates three times over the last four quarters [1] - Revenues for the quarter ended June 2024 were $30.86 million, slightly missing the Zacks Consensus Estimate by 0.46%, but significantly up from $5.19 million in the same quarter last year [1] Stock Performance - Arcutis Biotherapeutics shares have increased approximately 208.1% since the beginning of the year, outperforming the S&P 500's gain of 13.9% [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.41 on revenues of $43.3 million, and for the current fiscal year, it is -$1.60 on revenues of $182.47 million [4] - The estimate revisions trend for Arcutis Biotherapeutics is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [4] Industry Context - The Medical - Biomedical and Genetics industry, to which Arcutis Biotherapeutics belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [5] - Another company in the same industry, TFF Pharmaceuticals, is expected to report a quarterly loss of $1.70 per share, reflecting a year-over-year change of +51.4%, with revenues projected at $0.15 million, down 54.6% from the previous year [5]

Financial Performance - The company reported net losses of $87.7 million and $151.1 million for the six months ended June 30, 2024 and 2023, respectively, with an accumulated deficit of $1,069.6 million as of June 30, 2024[113]. - Product revenue, net for the three months ended June 30, 2024, was $30.858 million, a 547% increase compared to $4.770 million for the same period in 2023[128]. - Total revenues for the six months ended June 30, 2024, reached $80.427 million, a 909% increase from $7.971 million in the same period of 2023[139]. - Net loss for the three months ended June 30, 2024, was $52.332 million, a 26% improvement from a net loss of $70.991 million in the same period of 2023[128]. - Other income, net increased by $2.108 million, or 68%, for the three months ended June 30, 2024, primarily due to higher interest rates and a larger marketable securities balance[137]. - Other income, net increased by $2.9 million for the six months ended June 30, 2024, primarily due to higher interest rates and a higher marketable securities balance[148]. Research and Development - The company has incurred research and development expenses focused on ZORYVE and its pipeline candidates, with ongoing Phase 1 studies and plans for future submissions[120]. - The company is developing ARQ-255, a topical JAK1 inhibitor for alopecia areata, with the first subject enrolled in a Phase 1b study in December 2022[111]. - Research and development expenses decreased by $5.921 million, or 23%, for the three months ended June 30, 2024, primarily due to the completion of Phase 3 studies of roflumilast cream[134]. - Research and development expenses decreased by $18.1 million, or 30%, for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to the completion of Phase 3 studies of roflumilast cream[146]. Commercialization and Product Launches - The company launched ZORYVE cream 0.3% in August 2022 and received FDA approval for an expanded indication down to 6 years of age in October 2023, with ongoing efforts to expand this indication down to 2 years of age[107]. - ZORYVE foam received FDA approval in December 2023 for the treatment of seborrheic dermatitis, showing an 80% success rate in achieving primary efficacy endpoints in clinical trials[108]. - The company expects to incur significant commercialization expenses related to ZORYVE products while focusing clinical development on ARQ-234 and ARQ-255[114]. - The company entered into a co-promotion agreement with Kowa Pharmaceuticals in July 2024 to market ZORYVE cream and foam, recognizing all revenue while Kowa receives a commission[110]. - ZORYVE cream 0.3% contributed $17.258 million to product revenue, a 262% increase from $4.770 million year-over-year, while ZORYVE foam generated $13.600 million in revenue following its launch in January 2024[130][131]. Expenses and Cash Flow - Selling, general and administrative expenses are expected to increase as the company continues to commercialize ZORYVE and support operations, including legal and regulatory compliance[123]. - Selling, general, and administrative expenses increased by $12.215 million, or 27%, for the three months ended June 30, 2024, driven by higher compensation and marketing expenses[136]. - Selling, general, and administrative expenses increased by $24.1 million, or 27%, for the six months ended June 30, 2024, driven by higher compensation and personnel-related expenses and increased sales and marketing expenses[147]. - Total operating expenses for the three months ended June 30, 2024, were $80.935 million, a 12% increase from $71.953 million year-over-year[128]. - Net cash used in operating activities was $76.7 million, compared to $146.8 million for the same period in 2023, indicating a 47.8% improvement[163][166]. - Net cash used in investing activities for the six months ended June 30, 2024, was $90.8 million, a significant decrease from a net cash provided of $196.9 million in 2023[164][167]. - Net cash provided by financing activities was $163.2 million for the six months ended June 30, 2024, primarily due to $161.7 million from a public stock offering, compared to only $1.2 million in 2023[168]. Financial Position and Debt - As of June 30, 2024, the company had cash, cash equivalents, restricted cash, and marketable securities totaling $363.1 million, with $200.0 million outstanding under a Loan Agreement[113]. - The company completed a public offering in March 2024, raising $161.7 million in net proceeds[151]. - The company has $200.0 million outstanding under its Loan Agreement as of June 30, 2024[151]. - The applicable interest rate for the Term Loans was 12.88% as of June 30, 2024, with terms allowing for a potential reduction if certain conditions are met[158]. - The Loan Agreement includes a financial covenant requiring the company to generate minimum net product revenue equal to 75% of projected revenue[160]. - The company may need to seek additional funding through equity sales, debt, or collaboration agreements if capital resources are insufficient[152]. - The company was in compliance with all covenants under the Loan Agreement as of June 30, 2024[164]. Interest and Currency Risks - Interest expense increased by $0.6 million for the six months ended June 30, 2024, due to the impact of higher interest rates[149]. - A 100 basis point increase in interest rates would result in approximately $2.0 million of additional annual interest expense based on the outstanding amount under the Loan Agreement[172]. - The company is exposed to foreign currency exchange risk, with cash balances of $4.2 million denominated in Canadian dollars as of June 30, 2024[173]. - The company does not currently hedge any foreign currency exposure, and a hypothetical 10% change in foreign exchange rates would not have a material impact on its financial statements[173]. Non-Cash Charges - The net non-cash charges for the six months ended June 30, 2024, were $20.7 million, primarily related to stock-based compensation expense of $22.6 million[166].

Arcutis Announces Second Quarter 2024 Financial Results and Provides Business Update • Second quarter net product revenues for ZORYVE® franchise of $30.9M, with $17.3M for ZORYVE (roflumilast) cream 0.3%, and $13.6M for ZORYVE (roflumilast) topical foam, 0.3%; sales growth of 547% vs. Q2 '23 and 43% vs. Q1 '24 • Continued gross-to-net (GTN) improvement with blended GTN across products now in the high 50 percent range, improving from the low 60 percent range last quarter • Sustained growth in prescriptions f ...

The market expects Arcutis Biotherapeutics, Inc. (ARQT) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on August 14, 2024, might help the stock move higher if these ...

Over 200-person sales force to promote ZORYVE (roflumilast) in primary care and pediatric practicesProvides access to a large portion of the 7.4 million individuals treated for plaque psoriasis, seborrheic dermatitis, and atopic dermatitis outside of dermatology officesZORYVE will be promoted in the primary position to maximize prescriber education WESTLAKE VILLAGE, Calif. and MONTGOMERY, Ala., July 29, 2024 (GLOBE NEWSWIRE) -- Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT), a commercial-stage biopharmaceutica ...

Over 200-person sales force to promote ZORYVE (roflumilast) in primary care and pediatric practicesProvides access to a large portion of the 7.4 million individuals treated for plaque psoriasis, seborrheic dermatitis, and atopic dermatitis outside of dermatology officesZORYVE will be promoted in the primary position to maximize prescriber education WESTLAKE VILLAGE, Calif. and MONTGOMERY, Ala., July 29, 2024 (GLOBE NEWSWIRE) -- Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT), a commercial-stage biopharmaceutic ...

Once-daily, effective, safe, and well-tolerated ZORYVE cream now commercially availableProvides rapid clearance of atopic dermatitis signs and symptoms and significant reduction in itch, and can be used anywhere on the body for any duration to maintain clear skinAtopic dermatitis is the most common type of eczema, affecting approximately 9.6 million children and 16.5 million adults in the United StatesManagement will host an investor event with a key opinion leader on Monday, July 29 at 8:30 am EDT/5:30 am ...

Once-daily, effective, safe, and well-tolerated ZORYVE cream now commercially availableProvides rapid clearance of atopic dermatitis signs and symptoms and significant reduction in itch, and can be used anywhere on the body for any duration to maintain clear skinAtopic dermatitis is the most common type of eczema, affecting approximately 9.6 million children and 16.5 million adults in the United StatesManagement will host an investor event with a key opinion leader on Monday, July 29 at 8:30 am EDT/5:30 am ...

Approximately 40% of the 9 million individuals in the United States with plaque psoriasis experience involvement of the scalpOnce-daily ZORYVE foam significantly improved both scalp and body psoriasis in a Phase 2b and a pivotal Phase 3 trialData also show rapid reduction in scalp itch as soon as 24 hours after first applicationZORYVE foam demonstrated a favorable safety and tolerability profile WESTLAKE VILLAGE, Calif., July 23, 2024 (GLOBE NEWSWIRE) -- Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT), a commer ...