Financial Data and Key Metrics Changes - The company reported revenues of $63,800,000 for Q1 2025, representing a nearly doubling of revenues year over year, excluding a nonrecurring reduction in reserves for product returns of $4,100,000 from Q4 2024 [9][34] - Cost of sales in Q1 was $8,800,000 compared to $3,300,000 in Q1 2024, primarily due to amortization related to a sales milestone [35] - R&D expenses were $17,500,000, down 24% from $23,100,000 in Q1 2024, while SG&A expenses were $64,000,000, up 17% year over year [36] Business Line Data and Key Metrics Changes - The Zurief portfolio achieved $68,300,000 in net product revenue for Q1, reflecting 196% growth year over year [16] - Prescription demand for Zurief grew by 10% compared to Q4 2024, despite typical seasonal headwinds [9][17] - The company expects to expand Zurief's approved indications in 2025, with anticipated approvals for new formulations [10][11] Market Data and Key Metrics Changes - The topical steroid market has declined by 200 basis points over the past year, with branded topicals, led by Zurief, capturing that share [22] - Zurief captured a 41% share of the branded nonsteroidal topical segment, indicating strong market positioning [24] - Approximately 80% of total Zurief prescriptions are reimbursed, reflecting strong insurance coverage [19] Company Strategy and Development Direction - The company aims to convert a significant portion of the topical steroid market to its nonsteroidal products, particularly Zurief, which is positioned as a leading alternative [6][14] - The management emphasizes the importance of expanding into primary care and pediatric segments to drive future growth [75] - The company is focused on protecting its intellectual property and has made progress in ongoing patent litigation [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth throughout 2025 and beyond, citing multiple upcoming catalysts and expanding markets [6][42] - There is a tangible shift from topical steroids to nonsteroidal treatments, which management believes will accelerate [42] - The company anticipates reaching cash breakeven in 2026, supported by the growth of the Zurief portfolio [37][41] Other Important Information - The company has cash and marketable securities of $198,700,000 as of March 31, 2025, with a cash burn from operations of approximately $30,000,000 for the quarter [39] - The company has total debt of $107,600,000 and the option to withdraw an additional $100,000,000, providing financial flexibility [41] Q&A Session Summary Question: What should be considered regarding the cadence of Zurief performance throughout the year? - Management expects some modest seasonal impact but remains positive about growth drivers such as the upcoming launch of foam for scalp and body psoriasis [47][48] Question: How will the additional scalp and body psoriasis opportunity expand the use of Zurief foam? - Management does not anticipate significant cannibalization of the cream but expects broader utilization of Zurief for psoriasis patients, particularly those with scalp involvement [54][58] Question: What is the current split of psoriasis patients being treated in dermatology versus primary care? - The split is approximately 50/50, with primary care efforts still in early stages but expected to contribute significantly to growth over time [74][75] Question: What are the next steps after the litigation stay? - The stay is indefinite, and the company will provide joint status updates to the court regarding the litigation [81] Question: What are the key learnings from ARQ 255 and the white space in alopecia areata? - ARQ 255 is designed to deliver the drug effectively to the hair follicle, addressing challenges faced by previous formulations [84][87]

Financial Data and Key Metrics Changes - The company reported revenues of $63.8 million for Q1 2025, representing a 196% increase year-over-year, excluding a nonrecurring reduction in reserves for product returns of $4.1 million from Q4 2024 [31][7][14] - Cost of sales for Q1 2025 was $8.8 million, compared to $3.3 million in Q1 2024, primarily due to amortization related to a sales milestone [32] - R&D expenses decreased by 24% year-over-year to $17.5 million, while SG&A expenses increased by 17% to $64 million due to investments in the commercial organization [33] Business Line Data and Key Metrics Changes - The Zurief portfolio achieved net product revenue of $68.3 million in Q1 2025, reflecting a 196% growth year-over-year [14] - Prescription demand for Zurief grew by 10% compared to Q4 2024, with a record high of 17,000 weekly prescriptions on a rolling four-week average [15][9] - The company anticipates further expansion of Zurief's approved indications in 2025, including a new foam formulation for scalp and body psoriasis [9][10] Market Data and Key Metrics Changes - The topical steroid market has declined by 200 basis points over the past year, with branded topicals, led by Zurief, capturing that share [20] - The company has achieved approximately 80% insurance reimbursement for Zurief prescriptions, indicating strong payer access [17] - The total addressable market includes 17 million patients currently treated with topical steroids, presenting a significant growth opportunity for Zurief [11][12] Company Strategy and Development Direction - The company is focused on converting the large topical steroid market to its nonsteroidal treatments, with a strong emphasis on the unique attributes of Zurief [5][6] - The management highlighted the importance of expanding coverage and partnerships to access the entire patient opportunity [12] - The company aims to achieve cash breakeven by 2026, supported by the growth of the Zurief portfolio and improved profitability [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining growth throughout 2025 and beyond, citing multiple upcoming catalysts and expanding markets [5][6] - There is a growing momentum among clinicians shifting away from topical steroids, which is expected to accelerate [27][38] - The company remains optimistic about achieving cash flow breakeven in 2026, supported by a strong balance sheet and revenue growth [39][36] Other Important Information - The company announced a joint stipulation to stay ongoing patent litigation, allowing for a delay in litigation costs and distractions [10] - The company has a total debt of $107.6 million and the option to withdraw $100 million, providing financial flexibility [37] Q&A Session Summary Question: What is the expected cadence of Zurief performance throughout the year? - Management expects some seasonal impact but remains positive about growth drivers, including the upcoming launch of foam for scalp and body psoriasis [43] Question: What are the expectations for the ARQ 255 readout? - The Phase 1b trial focuses on safety and tolerability, with results expected in mid-2025 [44] Question: How will the new scalp and body psoriasis indication impact Zurief foam utilization? - Management anticipates broader utilization of Zurief foam without significant cannibalization of the cream, as it offers unique benefits for scalp involvement [51][52] Question: What is the current split of psoriasis patients treated in dermatology versus primary care? - The split is approximately 50/50, with primary care expected to become a significant contributor to growth over time [71] Question: What are the next steps after the patent litigation stay? - The stay is indefinite, and the company will provide quarterly updates to the court regarding the status of the dispute [78]