4th Quarter and Full Year 2025 Financial Results Forward-looking statements are based on our management's beliefs and assumptions and on information currently available to management. Forward-looking statements are subject to known and unknown risks, uncertainties, assumptions, and other factors including, but not limited to, those related to the success, cost and timing of our product candidate development activities and ongoing and planned clinical trials; our plans to develop and commercialize targeted t ...

Core Insights - Arcutis Biotherapeutics Inc. announced positive topline results from its phase 2 study of ZORYVE cream 0.05% for treating atopic dermatitis in infants aged 3 months to less than 24 months [1] Group 1: Study Results - The phase 2 study, named INTEGUMENT-INFANT, involved 101 infants, with 58% of participants achieving a 75% improvement in the Eczema Area and Severity Index (EASI-75) at Week 4 [2] - ZORYVE cream 0.05% was well tolerated, showing a safety profile consistent with previous studies, and no new safety signals were identified during the 4-week treatment period [2] Group 2: Regulatory and Market Information - The company plans to file a supplemental New Drug Application (sNDA) to extend the use of ZORYVE cream 0.05% to the target age group in Q2 2026 [4] - As of January 30, 2026, Arcutis Biotherapeutics Inc. shares closed at $25.37, reflecting a decrease of 1.40% [4]

Financial Data and Key Metrics Changes - In Q4 2024, the company reported revenues of $71 million, with $69 million from the ZORYVE franchise, reflecting a strong sequential revenue growth [9][10] - For the full year 2024, total revenues reached $197 million, with ZORYVE product sales of $167 million, marking a 471% year-over-year growth [10][57] - The company expects gross-to-net percentages to remain in the 50s, despite some quarterly fluctuations [10][32] Business Line Data and Key Metrics Changes - The ZORYVE franchise saw significant growth, with product sales of $167 million for the year, driven by prescription growth across its portfolio [10][21] - Prescription volume for ZORYVE reached a record high of 16,000 weekly scripts in Q4, representing a 334% year-over-year increase [24][25] - The company launched ZORYVE foam for seborrheic dermatitis and ZORYVE foam 0.15% cream for atopic dermatitis, expanding its product offerings [8][10] Market Data and Key Metrics Changes - The company has secured broad access to approximately 4.5 million commercially insured patients treated by dermatologists and is making progress in gaining Medicare and Medicaid coverage [13][31] - The dermatology market treats over 8 million patients across approved indications, with a significant opportunity to convert patients from topical steroids to ZORYVE [12][42] Company Strategy and Development Direction - The company aims to drive a shift away from topical steroids, focusing on expanding the ZORYVE portfolio and increasing prescriber base beyond dermatology [6][8] - Upcoming PDUFA dates for new indications, including scalp and body psoriasis, are expected to enhance ZORYVE's market presence [8][45] - The company is committed to maintaining strong commercial coverage and expanding its reach into primary care and pediatrics [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong foundation established for ZORYVE and the potential for continued growth in 2025 and beyond [7][11] - The management highlighted the importance of educating physicians on the benefits of ZORYVE and the ongoing shift in clinical practice away from steroids [14][48] - The company anticipates reaching cash flow break-even in 2026, which will enhance operational flexibility [62][66] Other Important Information - The company announced a partnership with Odell Beckham Jr. to increase patient awareness of seborrheic dermatitis and promote ZORYVE foam [39][40] - The company has a strong cash position with $228.6 million in cash and marketable securities as of December 31, 2024 [61][62] Q&A Session Summary Question: Clarification on Q4 results delta - Management clarified that the delta between preannounced and actual Q4 results was primarily due to conservative estimates and adjustments for product return reserves [72][73] Question: Confidence in IP protection - Management expressed confidence in the strength of the IP portfolio and the ability to maintain exclusivity for ZORYVE, while also preparing to defend its rights [74] Question: Impact of sales force expansion - The sales force expansion in June significantly enhanced the company's share of voice among dermatologists, contributing to increased prescription growth [83] Question: Refills and tube consumption estimates - Management reported encouraging refill rates of around 40% for ZORYVE cream and foam, with expectations of similar rates for atopic dermatitis as the product matures [91] Question: Medicare and Medicaid coverage - Approximately 1 in 2 Medicaid beneficiaries now have access to ZORYVE, with ongoing negotiations to improve Medicare coverage [102][103] Question: Profitability priorities - While achieving cash break-even is important, the primary focus remains on investing in the growth of ZORYVE and driving revenue growth [105][109]