It's still morning, so good morning. I'm Seamus Fernandez, one of the BioPharm analysts here at Guggenheim Securities. You know, really pleased to have Arcutis Biotherapeutics here with us again this year at our Emerging Outlook Biotech Conference, which we host annually. To my immediate left is Patrick Burnett, the Chief Medical Officer. And then to his left is Latha Vairavan, CFO of Arcutis. So, you know, maybe just as a quick kind of background, you know, Latha, you can maybe kick us off with your views on, you know, where Arcutis is headed today and, you know, just from a, you know, commercial perspective, the directionality that you see going forward for the ZORYVE franchise. Absolutely. So we're glad to be here, Seamus. I think we started the groundwork for this on our investor day last year with our earnings call in Q3 and highlighted the outlook for ZORYVE and Arcutis which focuses on I would say three pillars. One is to grow and expand ZORYVE and second is to build out our pipeline. I'll focus on the first two based on your question. Then we started with this launch in 2022 and adding launches to this pipeline and a product that we have with ZORYVE to treat psoriasis, atopic dermatitis, seborrheic dermatitis. And now our focus is growing that franchise in all three of those indications and the various strengths and formulations we have to treat patients of all ages. So in order to grow ZORYVE we're making our commercial investments working through our access and focusing on marketing our product. Second is to also think of label expansions and Patrick talked about that investor day in nail psoriasis and scarring alopecia. Then is to expand ZORYVE and we have life cycle management initiatives and Patrick can elaborate on those is to look at collaborative research studies to expand the label for ZORYVE we're starting with focusing on vitiligo and HS. And the outlook for 2026 we're really excited based on how we're trended in 2025 and what we're the trajectory we have. We put out guidance for the first time. We said we will be cash flow break even starting in Q4 which has passed so yes we are cash flow break even and we will stay sustainably so throughout 2026. So we're excited about the growth and where we've come from the launches to where we're headed in 2026. Great. You know, Patrick, one of the characteristics that I think is unique to ZORYVE but not necessarily unique to dermatology is this opportunity to convert topical corticosteroids. But there's also been, I think, a little bit of a change in the mentality of the dermatology organizations around the utilization. Can you talk a little bit about that and the impact that you think that's having and kinda likely to have going forward for the use of ZORYVE? Yeah, I think that's probably one of the most exciting things for me as I've seen this play out over the last 4 or 5 years is that you know early on in my career when we had the topical calcineurin inhibitors that were approved there was this kind of like groundswell of excitement. Could we be managing patients without a topical corticosteroid? Then that kind of wasn't able to be delivered I think partially because it was just focused on atopic dermatitis and dermatologists are treating steroids across AD seb derm psoriasis. Yep. So, you so I think where we're different now and why I'm really excited about this kind of change in the mentality is that we also have data that shows that patients who've been on long-term topical corticosteroid use start to get some of the same systemic effects as we know from repeated oral use kind of just from continuous you know use over many many decades. So now that there are options that are out there we're hearing a lot from the podium as KOLs as people who are kind of thought leaders in this space are really describing an opportunity for patients to be treated across their lifetime without a topical corticosteroid. That's really I think a combination of like really outstanding systemic therapies that we have and this new class of which ZORYVE is a prominent member allowing treatment of patients across the key topical inflammatory skin diseases. It really is a very unique time in history and we're seeing a tremendous shift in just the you know optimism that patients and healthcare providers have to be able to manage patients without steroids. How are the guidelines changing at this point? Or is there a real kind of evolution to lean away proactively from topical steroids such that you know we could see that that utilization change accelerate? Yeah, absolutely. At the guidelines, there's always a lag in guidelines being produced when they're coming from large organizations. And for us, the key is the American Academy of Dermatology, and understandably, right, because they're really kind of integrating across time. Right. So what you oftentimes see is a shift or a change in the mood and the experience and the communication that's coming even at the American Academy of Dermatology meeting from speakers. And then you start to see that reflected in the guidelines. And we've already seen in the topical treatment guidelines that there's a push especially in atopic dermatitis where I think the concern is the strongest just because of the demographics those being really young children. Mm-hmm. A very strong push and a reflection of drugs like ZORYVE being an opportunity to be able to manage especially chronic long-term therapy and keep patients from getting to flare. That's gonna be better if the parents have no hesitation about putting the drug on every single day. Whereas if they're trying to make a decision do they need it or not does my child need it or not because I'm worried about putting a steroid on that that's a very different kind of proposition for that family. So I think the guidelines are shifting. We've already seen that start to happen and it's reflecting the mood in this specialty. Can you talk a little bit about the opportunity that you see in the pediatric setting and how that's expanding with your recent data all the way down to six months? Yeah, you know, atopic dermatitis again being a pediatric condition. And as you go earlier, you know, children are born, right, like with this disease very early. And it's a struggle to manage them at that early stage. So we're approved right now down to the age of 2, right, 2- to 5-year-olds for atopic dermatitis. As you look into the 3- to 24-month-olds and we released our data for atopic dermatitis and showed that we got 58% of patients doing EASI-75. Right now as patients come in to their healthcare provider, you're talking about a couple of steroids that are approved and then Eucrisa and there's really nothing else. These are also the patients who have the highest level of concern the families about taking a 3-month-old and putting them onto a topical corticosteroid. So you know I think as you get into that pediatric range and it's a substantial population we were talking about almost 1 million patients that are being treated right now with AD in that 3- to 24-month-old range. I think for us it's a really beautiful fit for the profile right. We have a good tolerability profile. The efficacy I described is really strong. You know the safety is well understood by the healthcare providers that are already using it as kids transition into that 2-8 ages 2 and above where we're approved. Right. Thank you for correcting my 6 months to 3 months. That's an important point. For those kids it is important, right. Yeah. 'Cause otherwise they're sitting around waiting to grow for three months to pass before they can get access. Right. To the medication. For sure. Yeah, definitely makes sense. You know, let's talk a little bit about the—you know, again, that—that this kind of peak sales opportunity that you see going forward. You know, this $2.6 billion-$3.5 billion. I mean, I can tell you—you know, two years ago when we were talking about a $1.5 billion opportunity or a $2 billion opportunity, investors kept telling us this will never sell more than $400 million. Well, thank you for making me correct—at least that it would be beyond that threshold. But in terms of getting up to that next. It's a tool for gonna make ourselves correct. Yeah, exactly. The next leg of the growth opportunity, can you talk a little bit about that as well? Yeah, so the peak sales that we put out, the $2.6 billion-$3.5 billion, includes $300 million-$500 million coming from one of the indications of life cycle management expansion, either HS or vitiligo or any any of them. So if you pull that aside, then you're about $2.3 billion-$3 billion. And the way that we thought about that is taking a share from steroids, which is what we were just talking about. So we have about a 3% share in the whole space. In the non-steroidal topicals, we hold the leading share amongst those products. And then in the total space, we have about 3%. This peak sales forecast assumes we get a range of 15%-20% of that share. If you look at it the investor day we put out analogs of products in spaces where there was an entrenched incumbent in a you know in a in a in the space and then how a new entrant came and how long it took and how much share they got. So this isn't a number that is unattainable or insurmountable. We can get 15%-20% share if not more. So we were modeling a 15%-20% share clip to get to that $2 billion-$3 billion number that you see. That includes two pathways our primary focus of derm a majority of it comes from the dermatology space. Then a secondary view along with the indications that we have for pediatrics is to look at pediatric and PCP. We looked at both clinician avenues and that achieving that share to get to that $2 billion-$3 billion. Got it. Okay. And accessing the physician populations over time you know can you just talk about how far the reach is with the dermatologists with your existing sales presence and then you know what's the next sort of leg for that outreach kind of growing especially as you kinda move down into three months of age? So our existing reach is we announced at the early beginning of this year that we're adding 30 more reps to our field force. We have about 160 field-facing representatives. We have great depth breadth of coverage across the top decile physicians in the top tier and also in the second tier. We've had over 18,000 unique prescribers. Really now the focus is on depth of prescribing and so to reach more to kinda reach more and write more. We also put out that if you write for 1 indication it's not a linear growth. If you write for 2 indications it's exponential tenfold. So we want to take Break the habit of the steroids and reach that exponential growth to write more for all our indications. When you think of any skin-related disease that we treat you wanna think ZORYVE. So the buildup of the 160+ folks is to focus on the depth and we have great breadth of penetration. The next in terms of is we had a partnership that we terminated late January with to focus and promote in PCP and pediatric. And we've decided to create a targeted team of about 25-30 folks to re PCP team to focus on the PCPs in pediatric. Mm-hmm. They will be distinct from our dermatology practice. Well, that's our bread and butter. We've established it. We've honed it so we're gonna keep that very distinct from this PCP world. It's not a matter of if we're gonna do it or we're not dabbling in the PCP world; it's really how we're gonna do it. So this is for us to take the skill set we have in dermatology apply it to PCP focus on the top prescribing PCP and pediatricians to take now all the approvals we have in pediatrics and with the indications we have to be able to then as we build leverage to scale up and focus in pediatrics and PCP. Okay. So basically a very kind of methodical stepwise process. Yeah, stepwise process. To the ad space. Yes exactly. Great. You know, let's talk about the new potential indications and what are the I guess the hints and suggestions that you've seen in data so far? What's taking you to HS? What's taking you to Vitiligo? What's taking you to these new indications? And maybe you can just help us understand that a little bit better, Patrick. Yeah, I mean one of the things that we do as a company is kind of monitor what it is that healthcare providers are doing on their own. And there's always the opportunity for, if a, you know, particularly difficult to manage patient, that some healthcare providers will use off-label. And then we track. We look at those as when they're publications we're out at meetings talking to and learning what that experience has been. Obviously it's not something that we're promoting, but through our medical team we really do track that. And we heard some really exciting information about vitiligo and HS in particular. I mean we've tracked 40+ indications where people have used ZORYVE to try and manage these patients that don't really have other options. But what we were hearing about ZORYVE in vitiligo for instance is they were seeing a somewhat rapid onset of efficacy that was surprising to the healthcare providers given their experience with like topical steroids and other products. So we decided to initiate a study there so that we kinda more formally understand that and help us with our decision-making process. Similarly in hidradenitis suppurativa which is always a disease that I thought would be very challenging to approach topically because you have to really be able to address deep inflammation there. And I think seeing pictures images talking to healthcare providers there was just a recent publication that came out looking at hidradenitis suppurativa patients being treated topically with ZORYVE really kind of gave me more confidence that we're getting the drug. I think what it's aided by is a really strong formulation and then a very potent molecule. So you don't really need to deliver much of the molecule deep enough in order to fully inhibit the PDE4 pathway. We know that we overlap with the pathways particularly for hidradenitis suppurativa which is an IL-17 right that's driving seb derm that's driving psoriasis. Yep. So we know that we have that that pathway. And so these studies that we're conducting now they're relatively small you know like usually 10-20 patients topical treatment open label and really just trying to understand kinda what is the speed and what does that efficacy look like in those patients to help us come to a go no go decision on whether or not we wanna wanna run a full development program. So we've committed to being able to do that for Vitiligo in the fourth quarter of this year and then for Hidradenitis suppurativa in the first quarter of next year. So these things aren't too far off. And we're still have our ear to the ground kinda listening to hear what people's experience are. But I'm excited to see how those come out. Would you say that incremental $300 million-$500 million is pretty heavily risk adjusted from that perspective? Because these are very big markets. Yes it is. But they're. It is a risk adjusted number. Yeah. Okay. Yes. If we see exciting Vitiligo data we should get maybe a little bit more excited. Absolutely. Okay. Got it. Since we just initiated the collaboration studies, we heavily, to your point, risk-adjusted the number. Yeah. Okay. Great. You know, let's talk about ARQ-234, the CD200R. You know, maybe just help us understand the approach that you're taking, the mechanism of action. You know, the and you know, beyond just the biological rationale, we have other data sets. What is it that differentiates your approach from other data sets? Yeah, so ARQ-234 is a CD200R agonist, and so this is modulating a checkpoint in the immune system. One of the things that we're excited about, we think about it more as kind of resetting the thermostat on the immune system rather than causing immune suppression. So if you kinda look across a lot of the systemic interventions in inflammatory diseases, what you're trying to do is really kinda suppress one component of the immune system. Obviously some of the things are a little bit more broad like JAK inhibitors are a little bit more broad. That tends to be reflected in the safety profile as well. You think about IL-4/IL-13, IL-17; these are obviously very tightly targeted but then they're only working in a relatively narrow set of diseases. As we think about CD200R as not causing immune suppression but kind of taking those pathways that may be activated pathologically and then returning them into a more functional level. One of the things that's been seen in some of the earlier studies and it reflected in some of the preclinical studies as well is a more durable impact from that. So that once you reset that it takes time and additional kind of pushing from whatever it is that's the underlying disease pathway to kinda get that pathway back into a dysfunctional level. And so we look at this as really exciting from the idea of being able to take an adjustment and have a more durable impact that may not require the same level of frequency of dosing not just from a PK perspective but also from a pharmacodynamic pathway-based effect. And this is something that we heard a lot about as well about OX40 and obviously that I think didn't pan out as well just because it's a distinct and separate pathway. But I think the concept still holds. I mean we know about it from IL-23 inhibitors where there's a it's not just a PK it's a pharmacodynamic effect that gives you that durability of the impact. And so what we're interested in being able to do is have a distinct pathway from those that are approved right now in atopic dermatitis and be able to have what we think is a more patient-friendly dosing that might be able to even capture some of the patients that aren't really well satisfied by IL-4/IL-13 inhibition. When we look at sort of the mechanism itself, which aspect of the pathway, you know, or the disease types, right? We're typed as TH1 versus TH2. But there's also this argument that there's a TH2 component that makes up part of the atopic dermatitis disease state, but there's also tons of other skin disorders that. Right. Could come into play here as well. Yeah. So help me help us understand where CD200R fits beyond just kind of a maintenance type setting. Are there characteristics where you could say this actually would make sense over in this disease state as well? So, I think to a certain extent some of that will need to be learned, especially as we see patients responding, trying to understand from a pathway basis like what is it that's driving that. But I think also we can learn from GWAS studies where there was a really strong hit on atopic dermatitis but there was also a strong data for asthma. And understanding kind of how it is that genetic underlying component can be included in our patient selection aspect as well as we start to look at what would a patient population of label look like. But as we look at other indications because it isn't so tightly targeted, you know, I think alopecia areata could be an interesting one. We've also seen rheumatological disorders that we're looking into now could be additional follow-on indications. I think that it could be pretty broad outside of just thinking about atopic dermatitis and asthma. But certainly there's additional work to be done there to better understand that. Okay. I guess more TH2 oriented from a pathway perspective. Absolutely. Than any than than. Absolutely just based on what we understand from the genetics that seems to be the predominant patients that we would be targeting. But I think there's opportunity even beyond that. Okay. Perfect. You know, the this sort of broader opportunity as you sort of, as you look forward to business development, how are you guys thinking about business development in aggregate? You know, you're currently a dermatology company, but you just talked about asthma. Mm-hmm. Help us understand a little bit of what the type of asset that you'd like to see come into your development team's hands. Yeah, I think the ideal asset for us would be in dermatology just given I mean lots of really well described kind of you know the team that we have. And it goes all the way from our development team all the way through to an outstanding commercial team that's like delivering on ZORYVE right now. So that's where a lot of our focus has been. But we're looking outside of dermatology as well into adjacent areas you know and so you know asthma interested in ophthalmology rheumatological conditions. 'Cause we think there's a lot of overlap especially on the development side between those types of programs between patients between dermatology and some of the adjacencies. So we're not as limited as we may have been earlier in our search. What we're really looking for is kind of sticking to our original principles of validated targets, trying to find assets that are really working in areas where there may be an unappreciated unmet need. But also with an eye towards ensuring that these have a smooth flow through development process and into commercialization. So I think that we have a great team in place to be able to take advantage of them. And we're just broadening our scope a little bit to make sure that we get the right asset and we don't feel compelled to really do anything under any particular timeline. It really is just making sure that we're finding something that's a good fit for the company. Okay. Maybe just to expand on that a little bit. When I think about efficiency of development, where does that kinda come into sort of target selection? You know, I could, you know, in skin disorders we tend to get answers relatively quickly. Right. In terms of whether something's working or not. In rheumatology sometimes we get answers relatively quickly but the patients are actually a lot more complicated. Mm-hmm. Just trying to understand, you know, is there kind of a good fit for, you know, sort of a development type of disease what reveals itself. Obviously dermatology great. Feels like food allergy is starting to get a lot more attention, areas like that targeting the mast cells. But I'm not, you know, maybe I'm just fishing right now but. Yeah, no, I agree with you. That is an aspect that as we're assessing something we really are looking very closely at that. You know, details as small as you know how challenging are these patients to find from an enrollment perspective. You know how much code development is going on outside of this asset to try and understand access to investigators. And I think those are also really critical questions that kinda have to be layered on as you get further down. So once you find something that you think is a good fit, just making sure that it does have a smooth path through development. And obviously, you know, the faster that you are able to do that. I think that's one of the things that the development team at Arcutis has really been able to do well: kind of development of multiple indications at the same time, and being able to execute those programs very successfully, and really, I think, against very challenging timelines and shorter than many of our competitors were able to do. So the team is really excited to find something. We're still out there looking to make sure it's the right thing. Okay. Great. And Latha, maybe just to wrap us up. As we think about the sort of trajectory of prescriptions this year and kind of opportunistically, it's interesting if we just look at our charts of scripts like each year it just sort of stacks on top of each other really nicely. Are there opportunities this year from your perspective to see that accelerate? From a prescription perspective, is adding the reps an opportunity for incremental growth beyond the sort of steady state of growth that we continue to see? Yes, so the choice words of cash flow break even were designed to take the leverage and put it invest back into our business. So we are focused in 2026 to invest in the commercial space starting with the reps. We also have a lot of marketing efforts and initiatives in play. We talked about adding Tori Spelling to influence and market for our product. So you'll continue to see those investments and you'll see that play out and see that growth stack and inflect as the year progresses. Great. Well, looks like you guys are on a great path for the start of 2026. Excited to hear how I didn't press you for fourth quarter results, but is there. There's a few weeks to go. How the next couple weeks goes and as we look forward to you know the next leg of growth for the company. Thanks again. Thank you. Yeah, thanks Seamus.