Arcutis Biotherapeutics, Inc. Q4 FY2025 earnings call

• In 2025, Arcutus made significant progress in solidifying its position in medical dermatology, with robust net product sales revenue growth, steady prescription growth, and strong market share growth for Zareve across various indications. - The FDA approved Xareve foam 0.3% for psoriasis of the scalp and body in patients 12 years of age and older, and Xareve cream 0.05 for the treatment of atopic dermatitis in children aged two to five years. - Completed enrollment in the Phase 2 Integument Infant Trial for Zareve Cream 0.05 in infants aged 3 to 24 months with atopic dermatitis and reported positive top - line results. - Initiated Phase II proof - of - concept studies with Xareve foam 0.3% in vitiligo and hydradenitis suppurativa (HS). - Submitted an IND application for ARQ234, a novel biologic for atopic dermatitis. - Announced the expansion of the dermatology sales force by approximately 20% and taking over the promotion of Zareve to primary care physicians and pediatricians. - Max Homa joined the Free to Be Me Awareness Campaign, sharing his experience with Zareve Foam.

In 2025, net product revenues reached $372 million, marking a 123% year - on - year increase. In the fourth quarter of 2025, net product revenues were $127.5 million, showing an 84% year - on - year growth and a 29% sequential growth from the third quarter of 2025. Zareve's revenue growth was propelled by a year - on - year doubling in total prescription volume. Zareve holds approximately 45% of the revenue contribution in the branded non - steroidal topical segment. Different SKUs within Zareve experienced growth, with the foam having two indications and other SKUs also demonstrating positive growth trends.

• Raised the 2026 full year net product revenue guidance range from $455 million to $470 million to $480 million to $495 million, driven by the strong momentum of Zareve and investments in the franchise. - Reaffirmed maintaining positive cash flow on a quarterly basis throughout 2026 while continuing to invest in Zareve's growth and pipeline. - Anticipates a typical reduction in net product revenues in the first quarter of 2026 due to seasonality, but remains confident in Zareve's continued growth and momentum in 2026.

• Q: Comment on access dynamics and potential positive changes from recent marketplace updates.

A: There is discussion about the current reimbursement environment. While confident in Zareve's ability to be widely available to patients and generate returns, it's too early to determine the outcome of meaningful insurance system reforms. - Q: Comment on SKU sales growth trends.

A: There is growth across the portfolio of SKUs, with highly differentiated products. Net sales are broken out by SKU in the financial statements. - Q: Confidence to raise full year guide.

A: The strong momentum in the fourth quarter, along with investments in the franchise such as the dermatology sales force expansion and primary care pediatric launch (with impact in the second half of the year), supports the raising of the full - year guide. - Q: Price benefit continuation and Medicare access.

A: The price benefit from patients moving through deductibles is expected to continue. For Medicare, one - third of Part D recipients have access to Zareve, and efforts are ongoing to gain access to the remaining Part D plans. - Q: Primary endpoints for HS and vitiligo Phase III.

A: Focus on the kinetic response of patients, the timing of the response, and the fraction of patients showing meaningful clinical improvement in these studies. - Q: Pediatric opportunity and commercial asset appetite.

A: There is positive willingness to prescribe Zareve cream 0.05% in the pediatric market. Currently, a commercial stage asset is not a high priority, with focus on Zareve promotion and development stage assets. - Q: Primary care opportunity.

A: Moving to in - house promotion of Zareve in primary care and pediatrics due to improved financial position. There is high interest in Zareve in these segments, focusing on the high - value concentrated segment of primary care and pediatricians. - Q: Medicare OOP expense and primary care opportunity with COWA.

A: Medicare OOP expense is capped at $2,100 for total drugs. Moving to in - house primary care promotion is due to improved financial position and the desire to maximize shareholder returns.