Thanks for joining us here today. I'm Seamus Fernandez, one of the senior biopharma analysts here at Guggenheim Securities, and I'm really pleased to have Arcutis Biotherapeutics with us here today. And with me on my left is Patrick Burnett, the Chief Medical Officer. So Patrick, thanks so much for joining us. I know we've got a lot to cover, but maybe just a very kind of brief overview of what Arcutis is. I think the exciting part is that you are a commercial biopharma company at its core, and so we're definitely going to cover a lot of that today. But maybe just to introduce folks to the Arcutis story. Yeah, absolutely. And thanks for having me here today, Seamus. Yeah, this is a really exciting time for us at Arcutis. As you mentioned, we're a commercial stage company. We are completely focused on bringing innovation in dermatology. And as a dermatologist myself, you know, we're at a very exciting stage. We have now just launched our second product for seborrheic dermatitis. We've been commercially active since 2022, where we got approval for ZORYVE cream for psoriasis. And we've just had a lot of activity of development that you oftentimes don't see for a company of this size. We've had nine successful phase III studies that have been conducted, and we're kind of in the process now of working all of those through FDA approvals. We have a Canadian team as well, and really building a portfolio that expands on psoriasis cream into now a foam for seborrheic dermatitis. Eventually, we'll have scalp psoriasis there as well. You know, it's really exciting to have the opportunity to be working in a disease state in seborrheic dermatitis with this current launch, where there really hasn't been anything for about 20 years. Yeah. Great. You know, I know there's a lot of treatments available in psoriasis for moderate to severe disease, but maybe you can kind of level set the playing field, as it relates to ZORYVE, and its approval for psoriasis and where it's being used by physicians right now, in psoriasis. Yeah, absolutely. There's been a lot of innovation in the treatment of psoriasis at the level of systemic treatment. So that incorporates biologics as well as oral therapies that have now come online. But the fact is still that about 90% of patients who have psoriasis are using a topical therapy. Now, if they're in the mild to moderate range, typically they would be using that exclusively topical. And this is a lifelong condition. So, you know, historically, topical therapy has equated to topical corticosteroids, and data have emerged that in psoriasis patients specifically, that the cumulative kind of use of topical corticosteroids of high potency leads to a lot of the same side effects that you get with oral treatment, systemic treatment. So that's bone demineralization. They have a higher risk of bone fracture, and then you also have the local side effects. So I think that population, it's very easy to say, you know, a lifelong use of topical corticosteroids because the potency has to be so high, and we know you get systemic absorption from that, creates this need to eventually move patients in a different direction. And now we're in a situation, you know, when we launched in psoriasis, there hadn't really been a new topical mechanism of action. It was all formulating for decades, like reformulating of topical corticosteroids in combination. And when we launched in psoriasis, you know, we came with a nonsteroidal once-daily treatment that had the potency of a high-potency topical corticosteroid co-formulated with a vitamin D agonist, which is kind of where the peak of efficacy was for topicals. And this meant that now patients had the opportunity to be able to be treated without topical corticosteroids, regardless of where the severity of their disease was. Great. You know, just in terms of the launch trajectory and kind of the competitive landscape, maybe you can talk a little bit how the psoriasis launch, you know, what challenges you've seen with the psoriasis launch, but also, you know, now in terms of where ZORYVE is today and where it can go with your current coverage. Maybe you can just kind of walk us through how, you know, you see that launch kind of progressing from here. Yeah, no, absolutely. So when we launched, we were the second nonsteroidal to be launched in that year. In May of 2022, tapinarof, which is another nonsteroidal treatment for psoriasis, had launched. One of the biggest challenges with topical treatment of psoriasis, or really topical treatment across the board, really has to do with, you know, if you can get the efficacy, what is the local tolerability and the side effect profile for that? And I think that's one area where we're very well differentiated versus other treatments, including tapinarof, is we have a very strong local tolerability profile. So we don't have stinging and burning, we're not associated with folliculitis or contact dermatitis. And what that means is if a patient is getting the efficacy that they need from the treatment, they can continue to use that. And we have long-term studies that support it. So I think that puts us in a very strong position, and we saw at the launch, you know, coming second is tough. You're launching into a market that where a lot of those patients may have already been put onto a therapy, and we definitely saw that. I think the other key learning for us was that it's our primary competition is really topical corticosteroids, and that is just as true now as it was on the day that we launched. Because despite everything that's going on, when you look at where are the scripts, the scripts are sitting in topical corticosteroids. You know, never getting more than 5%-6% of patients right now that are being converted onto nonsteroidal treatments. And so what that becomes is really an access question, right? How can we make the access to ZORYVE be just as easy as it is for a dermatologist or an HCP dermatology clinician to write that prescription? Because these are very, very busy practices where they're moving, you know, 70-80 patients through in a day for each HCP. And that means that it has to be very smooth access, and that's really where we've put our focus. And that's one of the things I think that we are benefiting from now in, in, you know... Well, later, we'll talk about the launch for seborrheic dermatitis. I think that's one area where we're benefiting is from, you know, the improvements in the understanding that we've made with regard to contracting and access, being able to put that in place right away from the very beginning. Right. And it's a battle to kind of get your sort of gross- to- net improving over time. I think we all know that. In terms of where we sit today, you know, where would you kind of anticipate or is the company kind of predicting the gross- to- net dynamic is likely to settle out in 2024? But maybe incremental to that, you know, how does that set up ZORYVE foam in sebderm, you know, as you launch the product? Yeah. So our gross- to- net in Q3 was in the low 70s, and, you know, we're going to have our earnings call shortly, but we have already signaled that our Q4 gross- to- net is going to be improved compared to that. So, you know, we feel like that we're doing very well with regard to volume and also keeping an eye to make sure that the gross- to- net is headed in the right direction. And we still feel confident. We've given guidance that we anticipate being able to get to the 50s, you know, around 50% by the end of the year, and we feel confident that we'll still be able to get there. Great. I think, you know, your question is, okay, how does that set us up for the foam? And, you know, we have contracts in place with all three PBMs, as you know, and it's a line extension for the foam in that. So that puts us in a situation where we have 130 million commercial lives covered. That's 8 out of 10 of all the commercially covered patients in the U.S. And so for us to be in a position from launch, where now we're working through pulling that into each of these plans and getting the formulary access that we need, that gives us a very nice jump on the launch relative to where we were with regard to psoriasis. You know, I think that's one of the advantages of being a company that is now building a portfolio across four different indications rather than... And that's an unusual place for a company of this size and of this age, as opposed to, you know, the majority of companies that are where we are; they have a single product, and there isn't really much that's coming behind. Right. And so that's one of the things, Seamus, I think I'm most excited about, is seeing how it is that this product, across both the cream and the foam and the different concentrations, really has the opportunity to... Because the safety and efficacy profile is very appropriate for first-line therapy. So I think we really are very well suited to be able to, like, meet topical corticosteroids head-on. But the access has to be there in order for it to be very easy for... And docs need to understand what it is they need to do in order to get that access, and that's been a huge focus for us. So yeah, we have a patient access manager team in place- Yeah out there, watching what's going on with regard to making sure that scripts are covered and being pulled through appropriately. I think that's something that we are gonna always have to keep an eye on. Because that gets back to your question about, you know, maintaining our gross-to-net where it needs to be. We were joking about the different locations of the various dermatology meetings- Right ... prior to— Right ... the initiation of our webcast here, and... But the reality is, there have been a ton of meetings- Yeah ... already so far, and it's been an opportunity to really capture the physicians' enthusiasm for the new seborrheic dermatitis opportunity and the opportunity to treat. Can you maybe just give us a little bit of a, you know, sort of lay of the land of your conversations with your colleagues and the dermatologists and, you know, in fact, other physicians who may want to gain access to seborrheic dermatitis or ZORYVE foam? It is funny 'cause we, you know, as the Chief Medical Officer, I'm in charge of the regulatory submissions, and I would love to say that I planned it like this, that, that our approvals come in December, and then we launch in January, right into the Hawaii meetings, the meetings in Aruba, and then, you know, we were just joking that, like, Puerto Rico is like the masterclass, is, like, next in, like, a couple of weeks. And then the, and then the atopic dermatitis approval is coming in July, and then that, that kind of launch puts us into the next, like, you know, the post-summer, 'cause it quiets for the summer, and it quiets for the holidays around December. We didn't time it like that. Like, it's, it really is just serendipity that, like, the timing of these really sets us up nicely to capture these meetings. 'Cause this is when dermatologists are out looking for education. This is when the key opinion leaders are looking for something to talk about from the podium. If you stand up in front of me, you're giving an update on psoriasis or inflammatory diseases, and there's nothing new happening, like, that's not a very enviable place to be for them. So they're very excited to have us out there with this. And, you know, it's just, it's a disease where there really hasn't been any activity. And so, you know, the patients are excited that we've received very, very positive feedback from HCPs where, you know, where they were, you know, they had their patients ready. The patients, some of them were coming in and saying, "You know, I've seen this on..." whatever social media stream that they, like, get tips and tricks from other sebderm patients. Yeah. ... And, and so there, you know, the level of product awareness, I think, is surprisingly high. Usually we're struggling to get, you know, in any launch, not just, you know, at Arcutis, but, you know, across my entire career, you're struggling to be able to get people to, like, be aware that this product is now out there, and we're in a very different situation now with seborrheic dermatitis. It's nice. Great. You know, maybe you can just segment the population for us a little bit. You know, I know that there's an opportunity for sebderm to actually be an important treatment, as well as psoriasis, in the elderly population. So as we kind of move into Medicare- Mm-hmm. What's the opportunity in Medicare, in particular, that you see just from a patient need perspective? Yeah, I think seborrheic dermatitis is a good example of that. Seborrheic dermatitis is a disease that you really see the first onset, Our approval is down to the age of nine. You see the first onset in a group of patients around puberty, and that's how we ended up at nine in discussions with the FDA. They said, "You know, in the U.S., puberty is now nine years old." That's something that changes over time. Mm-hmm. People oftentimes aren't aware of that. Now it's at 9, so we're really covering the entirety of the seborrheic dermatitis- Got it ... disease state. It's a very broad label. Like, mild, moderate, severe, everything's in for the label that we have. But the second kind of wave of patients you see is in later adulthood, so patients in their, you know, forties and fifties. And once you have the disease, it's a chronic condition. So for psoriasis, I think it's like, Medicare was less of an important point for us, but for patients with seborrheic dermatitis, we've heard that very clearly, and it fits with the demographics. So, you know, I think the timing as well, you know, there's a lot more interest on the Medicare side because of this population dynamic for seborrheic dermatitis, and so our hope is that there will be some potential ability, you know, to be able to pull that in sooner than maybe what the typical timelines are, and that's been a focus for us as well. Got it. Okay, great. And, you know, in terms of the next kind of opportunities for foam, just talk a little bit about why the foam is important itself. Yeah. And you know, how you sort of cross locations on the body more than anything. Yeah. You're not supposed to say, "That's a great question," but Seamus, honestly, like, for us to be sitting here talking about the importance of foam and not say that, I it really would be remiss because, you know, if you haven't spent a lot of time in dermatology, the idea of like, why is a foam important, I think is one that does not intuitively come to mind. But really, the idea here is that with a cream, you can't, you can't really put a cream in areas where you have hair-bearing skin, so the scalp, the beard. Right ... seborrheic dermatitis, that's where this disease occurs predominantly. We had over 90% of patients who had scalp involvement in our seborrheic dermatitis trial, and we didn't demand that they had scalp involvement. But also, the other place where you see it very, very commonly is in men who have a beard. Some men will-- they grow a beard, and as soon as they grow a beard, now their sebderm gets flared up in their face- Mm-hmm ... and then it starts to move back up into their, into their scalp. So the idea behind a foam is—it's not that you can only treat areas that are hair-bearing, like scalp and the face, but you can treat really anywhere that the disease takes place. And that's one of the key aspects of this treatment. You know, our first indication is seborrheic dermatitis. The second one is scalp psoriasis. The idea there is you can treat the disease wherever it occurs. So when we did our trials for scalp psoriasis, a perfect example of that is that we treated the scalp as well as knees, elbows, any place. It's really the idea of one treatment that can be used anywhere the disease appears, and, you know, they don't have to have multiple strength prescriptions for the face, the scalp, the body, which is typically what you would have to do if you were managing with topical corticosteroids. Yeah. And there's, you know, I think there's an important question here because the treatments are challenging, to say the least, in sebderm. So, there's a measure of improved efficacy. So, you know, how much improved is the efficacy to really kind of compel physicians and patients to use it? And then, you know, as a second question, how do you think about the patient's ability to experience cost avoidance, you know, let alone the challenges, the psychological challenges of having the disease? Yeah, absolutely. The efficacy that we saw when we read out the phase III trial was almost hard to believe. I mean, so we saw 80% of patients getting to IGA success, that's Investigator Global Assessment Success. And that's a very high number. But I think, for me, what was most impactful and what I think is really going to be very effective for HCPs in their office talking to patients is 50% of patients getting to clear. So that means that they came in as moderate to severe patients in the study at baseline, and we were able to get half of them to where clear means no evidence of disease, so that means they didn't, couldn't even have a single papule, they couldn't have any scale anywhere on their body. So the seborrheic dermatitis was essentially completely gone for them. I think the more subtle part of our efficacy that patients with sebderm will talk about if you ask them is the fact that even when they are able to get themselves clear with some of the other treatments, and typically we're using antifungals and topical corticosteroids, is that after about 4-6 weeks, then they... This is common also with acne, is that the disease starts to come back, and they're like: "I'm using something that worked before, and now it's not working so well anymore." We showed in a trial that took patients all the way out to 52 weeks that our efficacy is sustained over that period of time. So it's a simplifying treatment, treat anywhere in the body. There's no limitation on severity, no limitation on duration of use, and we don't see a fall-off in efficacy over time. That it really is something that I can, without any hesitation, say has never been seen before in seborrheic dermatitis. I think as we move on to the next indication with scalp psoriasis, I think those, all those same principles are going to have a big impact on how the product is received in that population as well. And then, you know, just from a commercial perspective, I've kind of thought about this and tried to kind of metric what the launch could look like. You know, the way that I think about it is you have a similar size patient population, you know, in seborrheic dermatitis to psoriasis. And then beyond that, the opportunity is you really don't have any competition. Yeah. So the complete absence of competition would suggest to me that at a minimum, performance could look very similar to the combination of the VTAMA launch and the ZORYVE launch because you don't have any competition. Mm-hmm. What are the things that you would say, "Okay, you know what? You might wanna temper that a little bit?" Or you would say, "Hey, and by the way, some of the other headwinds were actually the gross- to- net and the actual- Mm-hmm ... you know, physical prescription writing process that also was a limitation to that launch. Yeah. No, I see your point. So, you know, we're—with psoriasis, we were looking at 1.3 million patients in derm offices being treated. You know, as we move to seborrheic dermatitis, you know, that number bumps up to 2.2 million patients. You know, I think one of the uncertainties that we've heard from people with regard to seborrheic dermatitis is, yeah, that's a lot of patients, and you always have to gut check that number. So when I talk to doctors, I said, like, "How frequently are you seeing this? Are you seeing this as many as you are atopic dermatitis patients, 'cause we know that number is bigger? Or are you seeing it more, you know, like, like psoriasis patients? And they're saying it's about the same number as the psoriasis patients, you know, maybe a little bit higher. So that really fits with what we're seeing in the data. You know, I think the thing that we need to prove to everybody is that there is an interest in being treated and a willingness to engage patients on seborrheic dermatitis for treatment. And that's why we've really focused on those patients who are in doctors' offices already on treatment. Yeah. Because we know that this is a... You know, just walking around as a dermatologist, I see this disease all day long in people that I'm in meetings with or whatever. But you really want to focus on that population that is interested in getting treated, and so that's where we've really kind of, like, looked at our numbers to try and offset this concern that may be voiced, which is that, well, yeah, there's a lot of seborrheic dermatitis, but how many of those patients want to be treated? Right. You know, our understanding so far, just from, you know, from talking to doctors is, you know, is that I have these patients in my office, and they're looking for something new. As a treating physician, it's not very reassuring when I have nothing to offer them, and they've been coming to me for 20 years. Yeah. Right? That's not a great place to be. So let's talk about your next indication, atopic dermatitis, your NDA submitted. Maybe just remind us kind of the timing of, you know, when you would hope for or anticipate approval. You know, how do you see any challenges to that? And then more so, you know, what do you think is the incremental opportunity for ZORYVE cream, I guess, but also, you know, to some degree, foam as well, should physicians choose to use it? Yeah. So as we move into atopic dermatitis, our PDUFA date there is sitting just after the Fourth of July. So, you know, we're... The PDUFA is on the seventh, which is a Sunday, so we're talking about the eighth, right? Like, we're really looking at the dates quite closely. Yeah. Very excited about the atopic dermatitis, pending approval there. You know, that's a larger population, right. So here we're talking about 2.5 million patients that are actually in dermatologists' offices. Because this is a patient population that's primarily pediatric, I wouldn't say primarily, but has a very large pediatric component, there's a lot more steroid avoidance that's in place there than what you might see in psoriasis, for instance. So I think that this represents a very good opportunity for us with, again, the nonsteroidal cream, right, once daily treatment. You know, in our open- label study, we really tried to look at how is it that topical steroids are being used and how is it that we can kind of provide exactly those same data with a nonsteroidal treatment so that it's really just a take one out and put the other one in. Again, I feel like this is a very good fit for first-line therapy. In AD, parents do not want their kids to be- Right ... started on a topical corticosteroid. So for us to be able to show that we're getting 40% of patients to EASI 75 right out of the gate, and then during our open- label extension, that number for both IGA success and EASI 75 continued to float up about 20 percentage points, even though we were taking all the patients who got the clear and switching them over to a twice weekly maintenance, which is kind of the way that patients are treated in the real world- Mm-hmm ... but hadn't really been studied, you know, systematically in a clinical trial for a topical. So, you know, I, I'm really excited about the, the opportunity there. Just to, you know, kind of remind that we're looking at two other doses. So 0.3% cream is for psoriasis. We're looking at 0.15% and 0.05%, for the two different age groups as we move into atopic dermatitis. These are very high body surface area patients. So typically also the usage, tube usage and everything is higher as we move into atopic dermatitis. Got it. And hence why a potential partner may be necessary, as you reach into a, a, a- Yeah ... pediatric, both pediatric and potential primary care. Right. I mean, I think everyone can tell from the focus of our conversation, we are very focused on dermatology and dermatologist offices. And yes, there are 2.5 million patients sitting in derm offices with atopic dermatitis, but there's another 4 million in primary care physicians and in pediatricians' offices, and we have no intention ourselves of having a sales force that's able to reach those. So this primary care partnership is something that we've really put a lot of effort into. We're already meeting with partners, and we intend to have that in place, you know, not necessarily at the time of the atopic dermatitis launch, because there is a component of, like, educating and pushing the use of this and how it's used from the dermatology community out into the primary care community. But definitely, you know, in the second half, as we move towards the end of the year, we're gonna wanna have that in place, and that's why we're already putting effort to make sure that we have that. Great. And then just a final question in terms of the expense to launch these products. It's a little unfair to ask the Chief Medical Officer to talk about the financials, but we're just gonna wrap up here on this final statement. But I'm not gonna really significantly hold you to it, Patrick. We'll call John after. Thank you. I, I appreciate it. That's very kind. As you know, you're right, we're not giving any guidance right now on, you know, the timing for, potential profitability, but we do feel that we're in a very good position, right? We had the raise back in October, that put us with a very strong balance sheet, in addition to the upfront that we got from the China and Southeast Asia out- licensing with Huadong. So, you know, we're also focusing really on two, two aspects that we can control: commercial execution, as well as, controlling our expenditures and making sure that we're making really good choices, you know, with the, you know, with the cash position that we have. So I think that puts us in a strong position to be able to, launch... To properly fund the launch and, you know, like, we have the current sebderm launch, and then we're launching again in July into atopic dermatitis. So we need to be able to fund those appropriately. And then, you know, with regard to, you know, potential future capital raises, I think it's opportunistic. When you're sitting in a position where you have a strong balance sheet, you know, you can have that luxury, and that's where I feel we are. Great. Excellent. Thank you so much, Patrick. Well, I'll encourage everybody to give John a call for more information on the financials and, you know, thanks for doing such a great job covering all the commercial questions that we covered today. Thanks, Seamus. Appreciate it. Take care. Bye.