All right. good afternoon, everyone. Tyler Van Buren here, Senior Biotech Analyst at TD Cowen. Thank you very much for joining TD Cowen's 46th Annual Healthcare Conference. For our next session, I'm very excited to host Arcutis for a hybrid presentation and fireside chat style Q&A. It's my pleasure to introduce Frank Watanabe, the CEO, and Todd Edwards, the Chief Commercial Officer of Arcutis. Frank and Todd, it's a privilege to have you here. Thank you for joining me. I'll go ahead and pass it over to you for the presentation. Always a pleasure. We'll try and keep the presentation part short, so we can talk more. Yeah, standard legal disclaimer. You know, we just had our quarterly earnings call last week, and these slides were all in the slide deck. If anyone's interested, it's on the website. You know, just maybe a couple recaps. We had a very strong Q4, very strong 2025. Printed 127.5 for the fourth quarter, which was about $15 million, I think, over consensus, as I recall. That was $372 for the year, which was a really nice number, I think, from our standpoint. You can see the growth, you know, doubling effectively in our TRXs last year. We have almost 50% of the branded nonsteroidal market share. That's, you know, us and the other branded nonsteroidal topicals on the market. I won't go through all of the list of achievements on the other side, but, you know, I think one of the things that has been a hallmark of this company from the outset has been very strong execution, very strong on-time execution, and the team continued that throughout 2025 with a couple of additional approvals as well. You know, on the Q3 earnings call, we laid out sort of a framework for how we think about sustaining the growth of this company, and we put that into three broad buckets: growing our existing ZORYVE business, expanding our ZORYVE business, and building our pipeline. This is just highlights of some of the concrete actions that we've taken around each one of those dimensions of our strategy in the last quarter or so. On the growth side, you know, we reported very good data from the INTEGUMENT infant trial looking at ZORYVE in 3- 24 month olds. We have said that we plan on filing an NDA for that in the second quarter of this year. We also announced an expansion of our dermatology sales force for about 20%. Todd can go into a little more detail later about the expansion and why we're doing that. Finally, we announced, excuse me, that we were ending our primary care partnership, and we were taking that in-house and building our own primary care and pediatric dedicated sales force, in addition to our derm specialty sales force. Some very nice concrete action on the grow front, and we've got more to come in 2026 as well. On the expand side, you know, we announced that we were going to start looking at additional uses for ZORYVE beyond our currently approved indications. We have ongoing Phase II trials right now in HS and vitiligo. I think the early case reports from both of those diseases are very, very promising. We think we've got a very compelling value proposition for patients with ZORYVE in those indications. We're also currently looking at other indications where clinicians have told us, "Hey, ZORYVE works here," and trying to decide which ones of those would be worth running POC studies on and potentially moving into phase III as well, which is really the point of us doing the POC studies. Lastly, on the build side, you know, we continue to advance ARQ-234, which is our very novel treatment for atopic dermatitis. We will have that in the clinic this quarter, so sometime in the next four weeks by definition. We're really excited to get some data from that. You know, there was another company that was pursuing this target as well, put out some very good data on the target, which led to our excitement about the target. I think with some of the changes in the systemic space in atopic dermatitis, in particular, you know, the developments with the OX40s, I think this could be a very, very compelling new opportunity in the atopic dermatitis space. I think the next one I'm gonna turn over to Todd. Thank you, Frank. Shifting gears to net revenue, you can see we had a very strong fourth quarter with $127.5 million in net revenue. This is 29% quarter-over-quarter growth versus Q3. Within that quarter-over-quarter growth was some robust demand growth of 19%. The important thing about that demand growth is the entire portfolio grew. All products within the portfolio grew Q4 versus Q3. In addition to that, we continued to manage and maintain our gross to net within the 50s. As Frank mentioned, for the full year, it was $372 million. As we roll forward, you know, say, we look at 2026 in Q1, we do expect the typical seasonality. The way I'll frame that is that we see the copay deductible resets. A little bit of the refills are pulled in from Q, Q1 to Q4. We did have a little bit of an impact due to Winter Storm Finn for the Q1. Nonetheless, we expect our gross to net to be stable within the fifties throughout 2026 and looking forward to a very strong year. This is a very important slide here, looking at some of the data relative to the nonsteroidal topical market as well as steroids. On your left, we'll start there. We'll look at the nonsteroidal topical market. You can see in the yellow the robust growth of ZORYVE over several quarters. You look at the gray line, that's the total nonsteroidal topical market, and the bottom, the steroid market. What's important here is to see the acceleration in ZORYVE as we continue to promote and engage in steroid conversions. That's where our opportunity sits, and the market is for our continued growth versus the steroid market being basically flat to declining. Really good, I'm saying, signals relative to steroid conversion and ZORYVE's growth. In addition, the nonsteroidal topical market continues to grow. Moving to the center, there were 24 million topical prescriptions written in dermatology for the three inflammatory skin diseases that ZORYVE is indicated for. It's important to note here the nonsteroidal topical market is now 7%. Last time we showed this a few quarters ago, it was around 4%, so there's good growth in the nonsteroidal topical market. But also importantly, if you look at the 64%, that's of topical steroid prescriptions. A robust opportunity for that steroid conversion. You look at the 19%, that's ketoconazole, which is important to our seborrheic dermatitis indication, and we can continue to transition those patients over to ZORYVE. If you look at the 7% growth there, or the share on the market, if you go to the far right, this is the market share within the nonsteroidal topical market. You can see that ZORYVE has a very leading market share. As we move this steroid conversion, as the nonsteroidal topical market grows, we're getting the lion's share of that growth, that lines up to ZORYVE. Once again, great indicators here relative to the per-performance of ZORYVE in topical steroid conversion. I think that's it. I think that's it. Those are the slides. Uh, go. Fire away Thanks for the presentation. The Q4 results that you elaborated on really surprised people to the upside. People thought you would have pre-announced earlier in the year. You wanted to wait just before a conference, which I appreciate. Can you elaborate on the health of the franchise going into 2026 and which demand drivers you think are most durable as we think about continued growth? Todd, you wanna take that? Yeah, I'll take that. Going into 2026, I think it's important that we have substantial organic growth and momentum as we move into 2026. What I mean by that is in the fourth quarter, we did see a robust NRx growth with ZORYVE, which is very important for our business. In addition to that, we're gonna expand the dermatology sales force by 30 representatives. That will take us to a footprint of 160 representatives within dermatology. The primary reason that we're expanding the dermatology sales force is to be able to have a higher frequency on the mid-decile prescribers. With the prior launches that we've had with ZORYVE, our frequency has really been focused on the high-decile prescribers 'cause that's where you see the early adoption of innovative branded products, and we've had great success there. We wanna be able to have higher frequency on the mid-deciles while not diluting frequency on the high-deciles, therefore, we're gonna expand by 30 representatives for the field sales organization to continue to drive that growth in 2026. I might just add, you know, we just announced a partnership with Max Homa, a PGA golfer, to raise awareness about seborrheic dermatitis specifically and ZORYVE. He's a very satisfied ZORYVE patient. As I mentioned before, we're taking over primary care, so we'll be building out our primary care team, and I think we'll eventually see some significant growth there. I think it's really notable that January 1, we picked up about a third of all Medicare lives now have access to ZORYVE, and we're the only branded topical on the Medicare formulary. You know, I think as time goes on, that will also become a contributor to growth. We've got a lot of catalysts coming up in 2026 on the commercial side. On the R&D side, we expect approval in plaque psoriasis for ages 2-5 in end of June. We will file for atopic dermatitis in 3-24-month-olds in the second quarter. We'll see how quickly FDA reviews that file. You know, I think that will also be an important driver of growth for us going forward. Right. All of that led to your increase in the annual guidance on the back of the Q4 results. You know, you reiterated your confidence in ZORYVE reaching 5%-20% of the 24 million prescriptions written across psoriasis, subderm, and AD. You're currently at 3%-3.5% probably. We all know what that would do to the $500 million or almost $500 million of guided sales. What do you think needs to happen over the next few years for that inflection to occur and for you guys to reach 15% plus of the 24 million prescriptions? Yeah, I mean, look, I think as we look at this market, this slide says it all here, right? The opportunity is conversion of topical steroids, right? That's where most of the patients are. It's what, you know, two-thirds of all the scripts are topical steroid patients. That's a patient that's already in a dermatologist's office, is already receiving prescription topical treatments, but they're on a less than ideal treatment. You know, I think we've seen in the last year or so really, even just since this time last year, a fairly significant shift in discussions in dermatology from, "Steroids are fine. We know what we're doing. We can manage this," to, "We really need to rethink what we're doing with these topical steroids." You know, Todd and I have probably been to four, five medical conferences since 1st January already. Derm's liked early year meetings. You know, it's a consistent drumbeat that you're hearing from the stage over and over and over again, coupled with, I think, a growing level of concern in the general public fed by TikTok and Instagram and things like that about Topical Steroid Withdrawal Syndrome, about all the safety effects with steroids, which is just amplifying the existing steroid phobia in the general public. All of those things, I think, combined really are tailwinds for us in driving the steroid conversion. As Todd said, you know, given our share of the nonsteroidal market, we differentially benefit from that shift as it happens. That's really gonna be the key. You know, you think about it, we're sitting at, as you said, 3.5% today. We go to 15%, it's simple math. We're a multi-billion dollar drug at that point. You've highlighted continued momentum across all SKUs, just maybe elaborate on that. How do you think about portfolio mix evolving over time? You expect incremental growth to come from all SKUs or are some SKUs gonna be bigger than others? Todd, you wanna take that? First, we expect growth from all SKUs as we roll forward. If you look at today relative to the breakdown between the SKUs, first is the foam, which is about 50% of our business today. That's primarily because there's two indications there, seborrheic dermatitis as well as scalp and body psoriasis, and that the foam is a highly differentiated product with the foam formulation. From there, you can take, the zero, ZORYVE cream 0.3% for psoriasis, as well as our two AD products, the ZORYVE 0.15% and 0.5%. Those are about equal. However, we do see the foam continuing to grow and be a leader within the SKUs, but also robust growth from the atopic dermatitis products because that market is so big. Nonetheless, all three SKUs will grow over time. Given the approval in AD potentially later in the year, can you talk about that opportunity relative to the younger patients in psoriasis and how you're thinking about those launches? In psoriasis is actually fairly uncommon in kids. That's one of the challenges with doing the studies, is it's really hard to find the patients. But there isn't anything approved currently for the, that group, right? That's really why the FDA pushed us to study it in such young kids. You know, normally you study it down to 18, maybe 12, and they're like, "No, no, we want you to study it down to two." You know, I feel very confident about the approval. I don't think it's gonna be a major catalyst in and of itself, but I think there's also a halo on the overall business. You know, if it's approved down to two, it, you know, it really must be safe for my patients. I think the more exciting opportunity on the pediatric side is the atopic dermatitis 2-5, which we already have, and we're growing, and then the AD 3-24-month-old. There's hardly anything approved by the FDA in 3-24-month-olds. It's basically just a couple of topical steroids. If you're a parent, that's the last place that you wanna use a steroid, right? Yeah because of all the safety risks of a steroid on a very young kid. Being able to have a very safe, very effective once-a-day, I think equally important or also very important option for the 3 to 24-month kids is going to be a big hit. We know already, just from, you know, the release of our top-line data, the pediatricians and the pediatric dermatologists are just chomping at the bit to get their hands on this drug for their patients. In the AD 2-5, are you seeing existing scripts there? Are those coming from pedes, even though you guys haven't really fully focused on those practices yet with your sales force expansion? Yeah, we do. We see, One, we're very pleased with the, and very encouraged with the growth of the 0.05% for 2- 5year-olds. We do see it primarily driven by dermatologists, but we see scripts within the pediatric sector as well. Got it. As we think about your pede sales force expansion as well as the 20% expansion of the derm sales force, how long do you think it's gonna take to get a meaningful impact on sales from those expansions? Yeah. With dermatology sales force, our goal is to have the dermatology expansion sales force hired, onboarded, and in the field by 1st July. We typically see about three months from the time that sales force is launched to time to impact. With primary care and pedes, we're in the midst of recruiting for that. We likewise wanna have that sales force of 30 sales personnel hired and launched by 1st July, but we expect a longer time to be able to impact that, likely the back half of the year for the PCP and pedes. A little bit more time to get into those offices, establish our shelf, and get the right frequency going. I think it's important, you know, to just remind investors that this initial tranche of 30 or so primary care team is a pilot, right. They're gonna cover-. Yes. 4,000, you said roughly? Yes. A very small chunk of that market. As we work out the kinks and figure out our go-to-market strategy, we will probably scale that into more and more pediatricians and PCPs. You know, by taking this approach, we can scale it in a way that's accretive to us, right, versus, you know, building it all out at once. As that expands, that will also add to the contribution from primary care and pediatrics. I guess we should know if it's accretive probably by the end of the year? I don't have any doubt that it's gonna be accretive, right? The question is gonna be how quickly it becomes accretive and how accretive it is, which is gonna drive then how big the ultimate primary care opportunity is. There's way too many patients in that population for it not to be worthwhile us doing. Yeah. If you think of the total, patient population about across the three inflammatory skin diseases, 50% of it sits in derm, and 50% of it sits in other, and the bulk of that other is within primary care and pediatrics. We're gonna take a very focused, targeted approach to the most highest opportunistic providers with this 30 sales team, personnel team. Got it. The recent Medicare win was a great announcement, not necessarily anticipated by folks. I've been telling you guys all along. You just didn't believe me. You've been setting expectations low, though. I guess on Medicare, when are you guys going to get the next third and the next third after that? You know, how is that going to progress? Obviously, commercial coverage has been great for some time. Is there anything else we should think about on the coverage front as well? As mentioned, commercial coverage, we've had exceptional coverage there with the vast majority of that coverage through a single step through a steroid for the commercial insurance and a lot of that preferred business. Within Medicaid, 1 in 2 patients that are Medicaid beneficiaries have access to ZORYVE through a single step through a steroid. As mentioned, we've just picked up the Medicare one-third of the beneficiaries, so we're very excited about this. We're the only nonsteroidal topical now available on Medicare, which is great success. I lend that to the way we priced ZORYVE in the market from the beginning. We very strategically priced ZORYVE so that we could not only pick up commercial coverage, but likewise Medicaid and Medicare, so that providers don't have to worry about insurance coverage. We have it whether it's government or commercial. As far as picking up the additional, one-third or two-thirds, we have to co-contract with each PBM payer that's a Part D plan. They typically do that annually. We're looking forward to picking up some additional Medicare, 1st January of 2027, with an option to be able to pull that forward into 2026. Great. I wanted to ask you about competitive landscape, just latest thoughts on that. Obviously, you guys have done quite well there to date with the launches. There's also been a recent competitor PDE4 approval. It would be helpful to get your latest understanding there. Well, I would first of all point to the turn right. You know, not take victory lap- Scoreboard You know, I think this has really become a marketplace of two products now. And, you know, I don't expect that will change. This most recent product that was approved, you know, I'm not losing any sleep over it. You know, it's a very weak PDE4 inhibitor. Roflumilast is between 25 and 250 times more potent depending on the PDE4 isoform. I think we saw with Eucrisa that that potency does matter. It's twice a day, whereas we're once a day. It's an ointment versus we're being a water-based cream. It's only approved in atopic dermatitis. It doesn't have a foam formulation. You know, this is a company that doesn't have any presence in dermatology. It's gonna be really interesting to see where they find a niche that they can compete. It looks to me like Eucrisa 2.0, and we all know how well Eucrisa did, so we'll just leave it at that. Yep. Fair enough. IP, what's the latest thoughts on IP? Yeah. You know, obviously. You know, we built a very strong IP portfolio around ZORYVE. We have 27 U.S. issued U.S. patents now covering various aspects of ZORYVE. We actually picked up a new one last year that extended the patent life on the foam for another year. We have patent coverage through 2042 now on the foam, 2037 on the cream, which hasn't changed. I think that, you know, we had an ANDA filer two years ago, just about almost exactly two years from right now. You know, that, Their experience, I think, is indicative of the difficulty of working around our patent portfolio, right? It, it's a very extensive set of patents, which someone will either have to invalidate or design around. If you don't do that, then you're probably not a generic, and you can't get approved. You know, just to update everyone, we did have an ANDA filer. They ran into issue with the FDA, couldn't get approval. They asked us to stay the litigation, and in return for that stay, they're tolling the 30 month Hatch-Waxman exclusivity. Should they restart their program, which I'm not convinced that they will, we will restart our litigation, and we have 17 months then to complete that litigation before they can launch their product, and I'm very confident that we'll prevail in court. Great. profitability. You guys are reaching, you know, profitability, obviously. Can you elaborate on that and cash position, cash runway, especially as you have, lifecycle management and kind of other pipeline opportunities that are emerging, how you're thinking about managing that? I, you know, I think from our standpoint, probably more important than profit is cash flow. We hit cash flow breakeven last quarter. We have said that we will maintain cash flow breakeven on a quarterly basis going forward, and that includes, that guidance includes all of the ZORYVE lifecycle management and the development of 234. We're already gaining operating leverage on the business. I, you know, I think last year top line grew at twice the rate of the expense base, and we expect that to expand as time goes on. We have a lot of resource to invest in the business and invest into the pipeline. Short of us doing some really significant business development, we have infinite cash runway, right? We put $26 million of cash on the balance sheet last quarter. Profitability, we've had profits I think Q3 and Q4 last year, we had small profits. You know, that may fluctuate from quarter to quarter based on non-cash items like bonus payments or an equity payment, excuse me, expensive equity payments and milestones. Again, we've made a commitment to manage our cash so that we can stay cash flow positive. Do you foresee Arcutis doing some really significant business development? If we find something good. You know, I think I've been very consistent. We're always looking, right? We've been looking since the company started. I think I've been pretty consistent in making clear I see business development as a nice to have, not a must-have, right? Given all of the opportunities we have with our existing pipeline and portfolio. You know, we have a great development organization, and we have the resources to do things. If our team finds an asset that we think we can create shareholder value with, absolutely, I would do business development. What I won't do is a dumb deal that ends up wasting shareholder money. What is an asset that could create value if that is something good? Let me think. It goes from zero to $1 billion in No. You know, look, I think, our strategy from the outset has been to focus on targets that have biological validation, right, to reduce the PTRS risk. We focus on large markets. We're not a rare disease company, and we look for differentiated assets, right? I don't think the world needs a bunch of me-too products, or me-less products, as in the case of that new topical you mentioned a minute ago. So, you know, if something checked all three of those boxes, we absolutely would be interested in it. You know, again, I think given... Think about the track record of this company and this team. We have six on-time FDA approvals, four Canadian on-time approvals, no CRLs in the history of the company, nine successful phase IIIs. There aren't many big companies that can claim that, right? And, you know, this is a small but very mighty team that's been able to do this over and over again. You know, an asset, a good asset that's maybe in the hands of someone who can't really bring it forward or optimize it is the ideal kind of asset for us because we can take it over, and we can make us and them and our shareholders a lot of money in the process. That's helpful. Sorry for putting you on the spot there. That's okay. Maybe we'll refocus with. Keep me on my toes. Exactly. To assets in your hands. vitiligo, HS, obviously very meaningful opportunities. Yeah. that could inflect the commercial franchise. Can you elaborate on what you saw in the case reports that makes you all so excited about vitiligo and HS and why you chose those two in particular? Yeah, sure. Dermatologists do two things, right? They write topical steroids, and they use drugs off-label. That's like a joke, that that's all dermatologists really do. It's maybe an exaggeration, but. They got a hold of ZORYVE, and they just started using it everywhere, right? We have case reports or case series now for 43 different diseases that respond to ZORYVE, at least in clinical practice. Now, you know, you don't know the denominator. You don't know, you know, of these five patients who responded, how many didn't respond, and you don't have a good sense of how quickly they responded either. That's what we're really looking at in the POC studies. You know, with vitiligo, you know, there's a case series that was published last year, five recalcitrant pediatric vitiligo patients all on their face. The patients had all failed topical steroids, and they were responding to ZORYVE. One of those patients that we presented in the slide had failed on the topical JAK inhibitor and responded to ZORYVE. That starts getting pretty exciting, right? What we also heard from clinicians is that the response seemed to be pretty quick, which I think has been one of the challenges with vitiligo, is how slowly the drug responds or, sorry, the disease responds to treatment. You know, we could have a really compelling profile for a lot of patients who have vitiligo. HS, PDE4 has been a well-established mechanism of action in HS, especially oral PDE4 inhibitors. We didn't think that our drug would work because of the depth of inflammation in HS, but sure enough, George Washington University published a case series in January, I think it was, of three cases with not only remarkable response, but a very, very rapid response. All three of those patients had responded within 4 weeks. And I think all three of them had no pain and no itch at the end of four weeks. That really got us excited about an indication that we had sort of written off. We're now running two small POC studies to look at HS more in detail, a traditional POC study, and then we're looking at gene expression in another study. You know, you think about the HS market, you know, getting very competitive, but they're all biologics, right? No one's developing something for the mild patients who don't qualify for a biologic. Even the biologics, they don't completely get patients clear, right? If you take someone from a Hurley stage III to Hurley stage I, they still have disease. You can use ZORYVE to clean it up, right? Which is exactly, you know, a lot of the AD people call ZORYVE the touch-up paint, right? You put them on a IL-4/IL-13, they get a lot better, but they still have some disease. You just get out your touch-up paint, and you clean up what's left over, right? I think that same kind of paradigm could work for us in HS, especially because we don't have any limitation on our use concomitantly with a biologic or another systemic therapy like a JAK inhibitor. That's great. We'll get both of those phase II readouts, early phase II readouts by early next year? We'll read out vitiligo probably in the fourth quarter of this year. At that point, we'll also make a decision about whether we're gonna advance into phase three or not. We expect to see results from the second HS study, which is really the key one for us in the first quarter of next year. Same thing, we would expect to make a decision at that point about whether to advance to phase three or not. I would also say we will probably start a couple more POCs this year in other diseases as well. We have a lot of options, right? It's really just a matter of us prioritizing and picking where to place bets. Perfect. Finally, ARQ-234. Just maybe elaborate on why you guys are excited by that target, why the asset is differentiated. Yeah, sure. ARQ-234, what we're doing is we're agonizing an immune checkpoint, right? The opposite of KEYTRUDA, right? Instead of inhibiting a checkpoint in the immune system, we're agonizing a checkpoint. The science would suggest that when you agonize these checkpoints, you reset activated immune cells. CD200 is only expressed on an activated immune cells, nowhere else in the body. We should be able to normalize the immune system without immunosuppressing. What I think got us really excited was there was another company that was also pursuing this target, and they showed that by drugging this target, you could show improvement and then stop the drug, and the improvement lasted while the patient was off the drug. Essentially, you were putting them into remission. That's what really got us excited about it. We think this could be paradigm-changing in autoimmune diseases if it works out. Again, I think particularly with developments with OX40 who just are not living up to their promise, CD200 could be the next big thing in autoimmune disorders. It should be very highly differentiated from the four-thirteens, both in terms of dosing, but also it's a completely different mechanism of action, and so it might work in patients who have inadequate or no response to four-thirteens. We could see a difference in dosing intervals. I think there's a number of opportunities to differentiate. You know, it's such a big market. When you look at the psoriasis market, there's 13 biologics in psoriasis market. They're all doing well, right? There's plenty of room in the AD market, which is a bigger market, I think, for additional mechanisms beyond four-thirteen. Yep. AD could be a $50 billion market, some are estimating. Could be. Yep. Yeah. All right. We're up on time, so maybe in closing, we'll ask you both what aspect of the Arcutis story do you believe is most underappreciated by investors? I would say, I don't think investors have really fully baked in the fact that this is a multi-billion dollar product. You know, we said $2.5 billion-$3.5 billion at peak. I don't think that there's been a lot of work done or attention on the pipeline yet, which, you know, effectively are free options for our investors. I don't know, Todd, is there anything you'd add? Yeah, the only one I would say is relative to the steroid conversion, just continuing to have a greater appreciation for the opportunity that sits there. Great. Frank, Todd, thank you so much for your time. You bet. Great. Thank you. It's good to see you.