Arcutis Biotherapeutics, Inc. Q3 FY2025 earnings call

• Arcutis founded in 2016 to address innovation gap in immunodermatology. Three strategic pillars: grow core ZORYVE business, expand ZORYVE franchise via life cycle management, build pipeline of innovative medicines.
• ZORYVE's unique profile includes pleotropic mechanism of action, rapid/robust efficacy, and safety/tolerability enabling use anywhere on the body. Steroid conversion trend is a key driver, with growing awareness of systemic adverse effects of topical steroids.
• Clinical efforts include label expansions for ZORYVE in pediatric atopic dermatitis and plaque psoriasis, and incremental data generation for subpopulations like palmoplantar psoriasis and scarring alopecia.
• Pipeline includes ARQ-234, a novel biologic for atopic dermatitis targeting CD200R, with Phase I trial planned.

In the third quarter of 2025, Arcutis generated net product revenues of $99.2 million, reflecting 22% sequential growth and a 122% increase compared to Q3 2024. Total prescriptions for ZORYVE increased by 13% compared to Q2 and by 92% versus Q3 2024. Weekly prescriptions on a rolling 4-week average basis reached a new record high with over 17,000 scripts. Cost of sales were $8.7 million, R&D expenses were $19.6 million, SG&A expenses were $62.4 million, and net income was $7.4 million. ZORYVE's growth was driven by sustained demand across all strengths and indications, with the foam product seeing over 25% QoQ revenue increase after the FDA approval for plaque psoriasis, scalp, and body.

• Anticipate full-year 2026 net product revenues in the range of $455 million to $470 million.
• Expect cash flow breakeven in Q4 2025 due to ZORYVE's net sales growth and expense discipline.
• Continued strong net sales growth in Q4 2025 driven by increased patient demand, though gross to net rate improvement expected to be limited.

Q: What is the stage of development and type of assets Arcutis is interested in for external innovation?

A: Arcutis is opportunistic, looking for assets that fit unmet needs, preferably in dermatology or adjacent inflammation areas, at a stage where its clinical and commercial expertise can create value, and prioritizing differentiated products addressing significant medical needs.