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spk11: Good day and thank you for standing by. Welcome to the Arcutis Biotherapeutics Incorporated Q3 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand over the conference to your first speaker today, Eric McIntyre, Head of Investor Relations. Please go ahead.
spk14: Thank you, Chris. Good afternoon, everyone, and thank you for joining Arcutis' first quarterly earnings call. On today's call, we have Frank Watanabe, President and CEO, Scott Burrows, Chief Financial Officer, Ken Locke, Chief Commercial Officer, and Patrick Burnett, Chief Medical Officer. During this call, we will be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to review the risk factors discussed in our latest SEC filings. We will then go to Q&A after our prepared remarks. With that, I'll hand the call to Frank.
spk03: Thanks, Eric. Yeah, I'll just add my thanks as well for joining us for our very first earnings call. Today we're going to be talking about our third quarter performance as well as providing some general updates to you all on our business and the progress that we've made so far this year. So you should have access to the deck on our investor web page. I'm on slide five to start with. You know, we've been talking all year long about 2022 being a transformational year for Acutis. We've already delivered on a number of very important catalysts, and we've got one very big one coming up just ahead of us. As you look at this slide, I think it's really remarkable everything that our organization has been able to accomplish just in the last three quarters, in the last three months, excuse me, in the last quarter. Obviously, first and foremost was the launch of Zorii's 0.3% cream for plaque psoriasis. This is a massive step forward for us in fulfilling our mission of helping patients and bringing meaningful innovation to dermatology. The launch continues to progress really well, and momentum is building, and we've got the right team. We're confident we have the right strategy, and we certainly know that we've got the right product profile in Zorii's. continue to prove all of that and then to seek out additional reform less indications as we as we've talked about before at seborrheic dermatitis atopic dermatitis and scalp psoriasis and Ken is going to be talking a little bit more about the the launch in in just a few minutes I want to take just a minute to talk about the very exciting access wins that we just announced about an hour ago I think that this is a validation of our responsible pricing strategy and is delivering on the broad high-quality access that we've been talking about, I want to emphasize these are fully executed agreements as well as actual coverage. This is not just a contract being signed, but an actual coverage for our product for a major PVM and for a major health plan. Tim's going to talk a little bit more about that as well in his comments, but this continues to build on our launch momentum with differentiated coverage. that is very high quality and ultimately is going to be less burdensome for prescribers and patients. I think we've made really good progress on building a sustainable and leading medical dermatology company through the continued development of our pipeline. We're going to talk a little bit more about the Ducentis acquisition earlier this quarter in just a minute and why we're excited about that acquisition. And then Patrick is going to also walk us through some very exciting top-line results in more detail from the Erector study in scalpel body psoriasis And I will have to say, I do have to say, I think physicians are phenomenally excited about our foam product for both seborrheic dermatitis as well as for scalp. We think that offers real innovation as well as some competitive insulation for something like the 40% of patients with psoriasis who have scalp involvement as well as the seborrheic dermatitis population. I think as everyone is very well aware, we've completed enrollment in both integument 1 and integument 2 in atopic dermatitis. We're cleaning the data, running the analyses right now, and we look forward to sharing those data with you from both studies before the end of this year. And then Scott's going to talk a little bit more about our financial position, but we're feeling very differentiated in the biotech space right now, given the strength of our balance sheet on the back of the two financings that we accomplished in August, both the equity deal and the debt deal. And that gives us really the requisite funding for both the launch of Xoriv as well as funding our growing pipeline in immunodermatology. Turning to slide six, I think many of you have seen this before. This is just our pipeline slide, and I really just want to touch on this to recognize our continued progress across our various programs and continue to build for the long term by harnessing our unique topical formulation expertise as well as our deep dermatology clinical development expertise And that's both innovations that are coming from our internal engine, and Patrick's going to talk a little bit more about the progress on our preclinical programs, as well as through external innovation, such as the business development deal we did with Ducentis for the CD200R asset. On slide seven, let me talk for just a couple minutes about the Ducentis opportunity. We really see this acquisition as being transformational for us as a company, and really moves us significantly forward in our journey to become the preeminent immunodermatology company. You know, I think most importantly, it's important to emphasize that we are really sticking to our knitting in terms of our stated strategy. It's consistent with our priorities. This is a large market with very large unmet medical needs still. It's a biologically validated target, and this looks like it potentially could be a best-in-class molecule. As we said before, we don't do Me Too products. And, you know, we don't consider ourselves just to be a topical company, never have thought of ourselves that way. Over half of our medical, commercial, and manufacturing organizations already have experience in biologics, and we'll be leveraging that expertise to continue to progress candidates, including Ducentis, through the clinic and into commercialization. And the Ducentis molecule is really complementary in atopic dermatitis to the flumelastic. And it enhances our ability to potentially offer treatment options across the spectrum of disease from mild to moderate on the one hand to severe at the opposite end, the extreme. And then finally, you know, we were able to acquire the asset for a very modest upfront investment and minimal spend in the short term. And so it doesn't have a significant impact on our financial outlook going forward. You know, folks have asked us on the next slide now why we're so excited about this target. Again, as I said, we see a very large unmet need in atopic dermatitis in spite of all the recent progress. It's a very large and rapidly growing market. I think Dupixen is a very good drug, and you've got some newer options coming along as well. But even with those innovations, less than half of patients are able to achieve a 75% improvement in their disease. And so we see a real opportunity to continue to advance the standard of care. Checkpoint agonism is a very exciting emerging strategy in immunodermatology. It's really the opposite of the checkpoint inhibitors that many of you are probably familiar with from the oncology space. If you agonize the checkpoints in the immune system, you reset overactive immune cells. So you're able to modulate overactive immune cells without really immunosuppressing. Earlier this year, we saw some data that was released by a competitor with a monoclonal antibody against CD200R We were very interested in that data. I think it showed some really impressive efficacy in humans. And I think probably one of the most remarkable things was the durable response with up to 12 weeks of efficacy even off drug after treatment had been ended. And that was really what led us to get much more excited and greater conviction around CD200R. And so we launched an effort to find a CD200R asset. We identified Ducentis. and we're able to acquire what we are now referring to as ARQ234, which is a fusion protein against CD200R. And we believe, based on the data we've seen thus far, I think ARQ234 offers us a great opportunity for potential differentiation on efficacy or potentially on a better dosing regimen, so some important points of differentiation. So we look forward to updating you in the coming quarters as we progress that program as well. And with that, I'm going to turn it over to Ken to talk a little bit more about the Zareed launch. All right.
spk12: Thanks, Frank. And thanks for following along at home. We're on slide 10. So thanks, Frank. And, you know, since our approval at the end of July, we've made strong and steady progress in driving the uptake of Zareed and really changing the mindset of what a non-surital topical agent can do for a psoriasis patient. In particular, a next-generation PD4 that can break away from the pack and do what others couldn't. Powerful efficacy in tough-to-treat areas coupled to an incredible vulnerability and safety profile. Firstly, I'd like to note how quickly we were out of the gate with drug and channel post-approval. Credit to the teams in manufacturing and commercial operations for making that happen. I've been pleased with our commercial execution and leading indicators that all continue to point upwards, whether they be talking about awareness from a physician and patient standpoint, intent to prescribe, and overall receptivity to our profile. The feedback from the field continues to be incredibly positive, building goodwill with all the patients we've been able to treat to date, and that's a read that's delivering on its promise, And lastly, we've seen adoption, not just from topical corticosteroids as anticipated, but also other categories and products, which I'll get into shortly. We've now seen over 4,000 prescriptions of Zareve since our mid-August launch, with some very healthy double-digit growth over the last six weeks since our full field team has been out. We're also making positive strides in the payer front, securing our first major commercial payer win with the formulary inclusion on a top PBM plus a large national health plan. This is ultimately the true gating factor in the password meaningful growth inflection and growth standard improvement, and where it can really judge what the longer-term prospects of Zareve can be. Lastly, we continue to march toward a thoughtful and sustainable launch with Zareve that can sustain itself, not simply through these early weeks of the psoriasis launch, but thinking about the three other potential launches of the next 24 to 36 months with the foam and cream formulations. Moving to slide 11, we've seen some very nice week-over-week demand growth. particularly after the full availability of Zareed to the key EMR prescribing systems used in higher volume dermatology settings, as well as the deployment of the full avail team. As you recall, we hired the team in waves, and we're now running on all cylinders. Coming out of the holiday week in early September, we see strong and steady growth fueled by continuing interest in the product and our ability to fully penetrate the dermatology community with our team and tactics. The resultant demands and the shape of the uptake curve reflects a measured approach with respect to growing demand organically without the aid of temporary accelerants such as full buy-downs, vouchers, or other offers, but also should not generate whipsaw or stalling activity as these types of programs are withdrawn from the market and a new behavior has to be established, not to mention the impact on gross demand. We're very confident that our demand trends will continue to accelerate, and the next demand catalysts are the beginnings of commercial coverage, which will allow increasing numbers of patients to experience the benefits of Zareed at the lowest out-of-pocket price of $25. Moving to slide 12, I want to speak a little bit about the source of business for Xerise. So currently, we're seeing a healthy mix. Approximately 55% of our patients are switching over from either a topical corticosteroid or steroid combination product, which is really a confirmatory signal here that we can and will penetrate that marketplace and actualize on the true opportunity in that topical dermis setting. Now that we're about two and a half months in, not expectedly, we're also beginning to see refills take up. Still very early days, but we're very encouraged by this trend. Lastly, there's a very interesting set of switching going on from other agents which I'll dive into. So looking at the approximately, on slide 12, 4 out of 10 patients that are coming from non-steroidal options, we see adoption of Zareed coming from, first and foremost, older non-steroidal agents, such as calcineurin inhibitors and vitamin D analogs. This is expected, as those agents are often irritating, not effective, or both, and represent compromises one has to make post-initial steroid use. We do see a small trickle of psoriasis biologics. Our agent is likely being used in either combination or in lieu of that biologic, given where the patient is in their treatment journey. We've also seen a healthy percentage come from other non-steroidal competitors in the space, which is unsurprising given the order at launch, but also because of some of the challenges experienced there. And lastly, Otuzla, which we don't really see as a direct competitor, given the typical profile of systemic patient, But we are seeing movement to add to either in combination or switch to the topical regimen completely in lieu of an oral treatment. While we don't have great ideas about exactly the severity of patients we're treating, we do anecdotally know that the patients we've treated have been across spectrum, mild, moderate, and severe. So let's move to the next slide, which is slide 13. And of course, you know, the only way to truly access all of these opportunities and patients is really with our pricing and access strategy. I want to reiterate our goals with respect to access and coverage, and that our appropriate pricing philosophy is designed to garner high-quality access with fewer steps or prior authorizations, as well as more rapid formulary adoption. These two will ultimately play hand-in-hand in accelerating uptake and preserving growth to net, as the time we must cover that cost of medication is reduced as that shifts to third-party responsibility. We've been also pleasantly surprised that roughly one in four patients have had open access to Ceres in these early stages of launch, And as we've been messaging, the meaningful jump in that number will come with continued major formulary wins. Remember that these are independent decisions made by health plans to provide that coverage, even in some cases ahead of the parent PBM contracts and results in formularies. Now, we've had some investor's voice concern in the past about a responsible pricing strategy would leave us disadvantaged, frankly, on access versus a higher price, higher rebate slave-up. And I think the announcement of our first major formulary coverage decision is incredibly exciting for Zareve and for patients and also validating to our differential strategy. Now, while the ink is still drying on the most recent formulary wins, we're very much diligently working with our new partners so that we can articulate more details in the near future about future wins. Just some more details on what Frank started on is that we have now fully executed agreements and we have received favorable coverage decisions for the inclusion of Zareve on the formulary of a top benefit pharmacy benefit manager, as well as a large national health plan, with each formulary inclusion effective at the beginning of November. The important distinction here is that these are not merely signed contracts, but true formulary coverage. Given the timing of our earnings call today, we thought it would be very important to share this with you, and we'll be able to communicate more details about the quality of coverage very soon. But I will say we're very happy with the differentiated value attributed to Zareef from payers as it relates to reducing prescriber burdens. On the very next slide then, let's get into some prescriber feedback. So I am now on slide 14. So at this point, you know, it's a little too early of a window to run for the entire field survey. But, you know, in our quick poll surveys, it's just that, you know, the feedback is very good in terms of understanding current and future intent to prescribe. And the patient initiations month over month are nearly doubling in terms of position intent. And the feedback in the field from physicians who have used the read continues to be incredibly positive. What folks are highlighting the most to us often are about the profile are the following. Now, many have been very pleasantly surprised with the rapidity of effect. We saw in our trials only needing eight weeks to get to an endpoint to get to a 40% IgE success motor, but Patrick showed earlier this year that nearly every patient in the DERMS study responded to our product, and nearly three in four patients achieved a clinically meaningful response. This is in contrast to prior experiences with this particular MOA, and it's really opened a lot of eyes as we solicited feedback. We also see examples of race ability to punch above its weight at the more severe end and treat those tough plaques. Again, for us, we weren't that surprised. We saw this in the clinical trials. And we saw when we break out our IgA success by our body surface area, we actually had numerically higher efficacy rates at the higher end of severity of the spectrum of BSA. Now, of course, he coupled us with the unique ability to treat the inner trigeminal areas. And remember that we're the only label topical agent with this in the indication statement. This will continue to be a major innovation point for us in treating patients with this type of disease. Again, we're the only agent here that demonstrates efficacy in addition to tolerability for these patients. Also, itch, you know, early meaningful response to itch. Again, coming from patients, itch has been one of the largest complaints And that relief of itch is often the first sign to the patient that the drug is working, even ahead of plaque clearance. Finally, we know how well-tolerated this drug is from the clinical experience, and we continue to hear consistent reports of this while on the field. This continuous feedback loop will reinforce and really trumpet the safety profile around Zerida. There's more and more physicians trial and gain experience, solidifying a key differentiation point for the product in the psoriasis topical treatment landscape. Moving to slide 15, my last slide here, we talked about back in March some of the critical success factors for launch. And in acknowledgement, obviously, net sales realization would take a little bit more time given the payer coverage decisions. But we have shared some of these metrics already, but we really continue to focus on these three pillars of driving for starter awareness and use, the patient experience, and, of course, the broad high-quality access, which we've spoken to a lot about today. We've seen there are a number of unique riders continue to accelerate here in launch. with well over 1,300 unique writers, and certainly good reach from our sales team, hitting well over 80% of the high-value targets, netting around 9,000 HTPs in total. We are seeing some refills go up for prospective patients and also patient awareness rising. And then lastly, just the piece about, again, the high-quality access that we've spoken about with today's wins. So with that, I'm going to pass it over to Patrick for our clinical update.
spk02: Thanks, Ken. I'm on slide 17, and I'm just going to touch on some accomplishments and upcoming milestones for us. But first, I just want to echo the remarkable list of accomplishments that we have here in the third quarter that Frank mentioned. And I want to give credit to the entire team that was supporting our R&D efforts. And touching on that top milestone, the FDA approval of Zareeb, you know, Ken's already spoken about the progress of our launch. But I think it's also important to note that dermatologists like myself, we've been waiting for this moment of meaningful innovation in the topical space for decades. And there's really a palpable excitement that only continues to grow as patients and physicians garner experience with Dereave. Being out in the field and being at some of the medical meetings and hearing how this is changing dermatology, I think you can feel a real shift in the field, and it's very exciting to be a part of that. So moving on to what we've done in the third quarter, it's been a great quarter for our foam program as well. In the third quarter, we released our top line phase three erector data. In September, I'm going to touch a little bit on giving more data out there than what we had just in the press release. In addition for foam, we had the opportunity to present the Stratum Late Breaker at the European EADV meeting. Stratum is our phase three seb derm study, and Andy Blauvel did a fantastic job of being able to present this for us and got a really nice response and some great awareness for our data in seborrheic dermatitis for the foam product. Moving on to cream, as you know, we've completed enrollment in Integument 1 and Integument 2. These were done in August. And I'll talk a little bit about the progress of these programs moving forward from here. And finally, our dermis data were published in the Journal of the American Medical Association. You know, this reflects the hard work of our team and some of the fantastic investigators that we've worked with. You know, this builds upon the Phase II publication in the New England Journal of Medicine, and now to have our Phase III studies published in JAMA, I think really highlights the importance of these trials to medicine as a whole, given that these are really journals that move outside of dermatology as well as within dermatology. So we're very excited to have seen that. So moving forward into the milestones that are ahead for us, As mentioned, we completed enrollment in Integument 1 and Integument 2. So these are ages 6 and above. We plan to have top line data before the end of 2022, as Frank mentioned. And in addition, another big milestone for us with regard to progressing our pipeline, we have ARQ255. So this is a program where we've developed a unique drug delivery technology that gets our JAK inhibitor topically to the base of the hair follicle. This is where the site of inflammation is located. Right now, patients with alopecia areata really only have access to systemic options, and so having a topical program would really represent an advance for these patients. So we're going to move this into the clinic before the end of the year, and we're hopeful that this will prove out this technology in the clinic. We'll be able to move that program forward beyond that. With regard to the seborrheic dermatitis program, the next step for us is to submit the NDA. Our team is feverishly working to get the NDA approved, And that's planned for quarter one of 2023. And just to remind you that the review time on that will be a 10-month review similar to what we had for Zareve cream in psoriasis. Marking our action date for Health Canada, we expect to hear back from Health Canada for around April 30th of next year. That'll be important for us extending beyond just the U.S. And then coming back to the cream atopic dermatitis program, Our other data coming in ages 2 to 5-year-olds from the Integument Peds trial, we plan to have top-line data in 2023. So as mentioned, this is 2 to 5-year-olds with a 0.05% cream. And then we'll advance off of that top-line data in Integument 1 and Integument 2, and we plan to submit an FNDA for rifumilase cream in ages 6 and above. This is with the 0.15% cream also in 2023. So moving on to slide 18, again, just to give a little bit more data on our erector phase three studies and the results that we saw there. Here we see a schematic of the study design. We enrolled ages 12 and above. Now, we looked at a co-primary endpoint of scalp and body IgA in this trial at week eight. And so we enrolled a population of at least moderate severity on the scalp. That's the scalp IgA. And they had to have a mild severity on their body. That's for the body IGA. And they had to have at least 10% of scalp involvement. We enrolled 432 subjects, randomized them two to one, active versus vehicle. Just a reminder that the foam is a highly related formulation to Zareve cream and also is at the 0.3% dose, which is the same one that's in Zareve cream currently. Not to give the ending away right at the beginning, but we met our primary endpoints, co-primary endpoints of scalp and body IGA, as well as all of our secondary endpoints in this trial. So a really robust data set coming out of these 432 patients. Moving on to slide 19, you can see one of the primary endpoints here of scalp IGA, that's scalp investigator global assessment. We got two-thirds of patients to scalp IGA success by week eight, which was the end of treatment. But kind of looking at the earlier responses and showing the rapidity of response, we see that a third of patients already at week two were IgA success on the scalp and half the patients with just four weeks of treatment. Now, importantly, many of these patients are actually getting all the way to an IgA of clear, which means they have no disease on their scalp. We got 40% of patients to a scalp IgA of clear at week eight, which is a really remarkable success rate. Moving on to slide 20 and the body IGA. So this was the same primary endpoint that we had in DERMIS 1 and DERMIS 2. And in fact, the results that we see now with the foam show that the results are similar to the cream. Even a little bit of an uptick on that week 8 results, we had about 40% of patients from DERMIS 1 and DERMIS 2 with the cream formulation. Here we're just about 47% of patients. And keep in mind that with these co-primary endpoints of scalp and body, we're also treating endotrigenous diseases. This is a treatment that really covers the entire patient from the top of their scalp all the way down to their toes, interterogeneous as well. So this really is the potential to be a simplifying treatment for patients with psoriasis, and that would make it quite a unique product in the market if approved. So moving on to slide 21, you know, Ken highlighted the importance of itch in patients with psoriasis. This is very true of patients with psoriasis and even more so of patients with scalp involvement. We know that scalp itch is incredibly problematic for patients. It's bothersome, but it can also lead to hair loss. And addressing this symptom has a really big impact on quality of life. And so the results of the erector study is just another one showing the benefit of erflumelast in itch. We've demonstrated this previously with psoriasis and also in seborrheic dermatitis. On slide 21, you can see that by the week 8 endpoint, patients on scalp itch, again, focusing just on scalp itch here, we also assessed whole body itch in this trial. We'll show those results later at a full medical meeting. We shot 67% of patients by week 8 to success, meaning they had a four-point improvement, which is what's required by the FDA for labeling of itch endpoints. And about a quarter of patients already at week two showing that same 25% level on that same endpoint of four-point response. So again, rapid response on itch and getting a high proportion, two-thirds of patients, to success by week eight. Turning now to safety on slide 22 for the erector study, what we're seeing with the Rifumilast foam program is a very similar tolerability profile to what we're familiar with from the Zareve cream studies. um you know we see uh overall ae rates were low and consistent with prior studies um you know we had balanced uh subjects with uh with serious adverse events uh with 0.7 percent in both active and vehicle and most importantly and i've represented a lot of results and and you'll always see me coming back to this discontinued study drug due to adverse event i think that this is a really important metric for overall tolerability And here you see this is balanced with only 1.8% on riflumelastin, 1.3% on vehicle. So that demonstrates, again, that patients in our studies are not discontinuing due to adverse events at really significant levels. So that's a very positive sign for overall tolerability. Moving on to slide 23, the safety profile here showing all treatment-emerging adverse events greater than 2% in any group. What you see is that really the only outlier compared to our previous data with psoriasis is COVID-19, which is coming in balanced between reflumelast 2.8% and vehicle at 2.6%. The other three adverse events listed there were all listed as ADRs in our psoriasis program. But interestingly, we had about 3% diarrhea in our psoriasis program with the cream formulation. Here that number is about the same, but the vehicle is now coming in at 2.6%. So that's an interesting observation just between the two of those. Just a little bit more data than with seborrheic dermatitis. These data, as I mentioned, were presented at Milan at the European EADV meeting. Dr. Andy Blauvelt did a fantastic job presenting them. Just wanted to highlight a little bit of them here because it really rounds out what we think is the opportunity for patients with seborrheic dermatitis. You know, this is a disease that has been, had almost no development ongoing in the past 20 or 30 years. And reflumelast foam at the same concentration as we studied for the scalp really showed some remarkable data. So what we see on slide 24 is that 80% of patients achieved IgA success at week eight. And already 40% of patients got to IGA success at week two, kind of echoing the same pattern of an early response, a rapid response in patients, even at earlier time points. But importantly, over 50% of patients achieved IGA of clear at week eight. So that means that these patients had no evidence of seborrheic dermatitis in their scalp at week eight when they completed treatment for the study. Some new data on slide 25 that we added in from that EADV presentation are just really touching on two key signs of the disease. Along with the symptom of itch, they really round out some of the major impact of this on patients. That is erythema as well as scaling. And here we're looking at achieving an erythema or scaling of zero. So again, there's no scaling left on these patients. And again, really good numbers. So over 50% of patients achieved erythema of zero at week eight. with an early response of almost a quarter of patients, and similar results, similar numbers for patients for scaling as well. So I think this really kind of gives an idea of the strength of the data that we have in seborrheic dermatitis. As I mentioned, we're moving forward with this NDA, and we're looking to have that to the FDA in the first quarter of 2023. So just one last slide for me on slide 26. And this is about our upcoming readout for the Entanglement Studies. We know that folks are really eager for the readout of this program and just wanted to touch on a couple of points. As you know, we've completed recruitment. We're very close to a readout here. These were large studies, over 650 subjects in each. And just to remind everybody, this is ages six and above, and this is with the 0.15% cream being applied once daily. And we powered these studies, sized these studies based on really two factors. One is the size of the safety database required to really, you know, provide safety data for our submission. But also we wanted to have very strong statistical power on the primary endpoint. So based on the 650 subjects, we have greater than 95% statistical power to determine the same difference between active and vehicle that we saw in our Phase II trials. And this gives us about 10 times as many patients in the active arm as we had in our phase two study. And this really, I think, puts us in a very good position for this readout, probably overpowered for the primary endpoint, but gives us better power going down into our secondary endpoints, which can be important for us to be able to really get the broad label in mild to moderate atopic dermatitis that we're looking for. So with that, I'm going to turn it over to Scott to cover our financial results.
spk06: Thanks, Patrick. We had a couple of very important and exciting financial milestones in the third quarter. First, with the Zareeb launch in August, the quarter represents our first as a revenue generating company. And second, we were able to bolster our financial strength in the quarter by raising an additional $285 million on the back of the CERISIS approval, leaving us very well positioned to continue investing in support of both the Zareeb launch and the continued progress of our pipeline. Turning to the financial results for Q3 on page 28 of the slide deck, Net product revenues were $725,000 for the quarter. The revenues were driven roughly equally from end customer demand in the quarter, as well as the expected initial wholesaler inventory build. Our gross to net discount rate in the quarter was high as expected, given we are still working to secure payer reimbursement, but our discount rate was materially better than other recent branded topical launches, given our differentiated pricing and access strategy. We expect modest improvement in the gross to net discount rate in the fourth quarter, given the timing of our recently announced formulary coverage, with continued progress on delivering more value per script expected throughout 2023. We also expect continued demand growth as the launch accelerates and more formulary coverage is added for Zareve. Cost of sales was approximately $270,000 in the quarter. We paid a $7.5 million milestone payment to AstraZeneca in the quarter related to the FDA approval of Zareve, This payment was capitalized and will be amortized straight line over 10 years to the cost of sales P&L line. So that amortization charge for Q3 has an overweighted impact on our cost of sales percentage in the quarter, given the modest revenues. We continue to expect our cost of sales margin to be pharma-like in steady state, inclusive of this amortization charge. Research and development expenses were $70 million in the quarter. We incurred a $30 million upfront charge related to our acquisition of Ducentis. which essentially accounts for all of the change in R&D expense on both a year-over-year and quarter-over-quarter basis. Recall that we paid about $16 million in cash for Ducentis and another roughly $13 million in our QDIS shares. Normalizing for the $30 million Ducentis charge, we expect the R&D line to stabilize going forward. The wind-down in costs from our pivotal studies is counterbalanced by the ongoing costs of the pediatric atopic dermatitis study and the long-term extension study, the regulatory and manufacturing activities associated with the upcoming launches and new indications, and the progression of our next set of topical and biologic pipeline opportunities. SG&A expenses were $35 million for the quarter, increasing largely due to the higher commercialization expenses for the Zoriz launch, including the hiring of the full sales force. We expect modest continued growth in SG&A as we continue to invest in the psoriasis launch and the upcoming additional launches. Net loss per share was $1.89 for the quarter versus $1.14 for the corresponding quarter in 2021. The docentage acquisition contributed 51 cents to this quarter's net loss per share. Turning to our final slide on page 29, we provide some key balance sheet and cash flow items. We continue to operate from the position of balance sheet strength with cash of approximately $480 million as of September 30th. Our cash flow used in operations for the quarter was approximately $68 million. This does not include both the one-time cash payment of $16 million for Ducentis and the $7.5 million milestone payment to AstraZeneca, as both of these items were classified as investing cash flows. Average shares outstanding for the quarter were 57 million, which includes the newly issued shares from our August equity offering, as well as the newly issued shares from the Ducentis acquisition. Our quarter ending shares outstanding were approximately 61 million, which may help you in modeling accurate go-forward share count. This concludes the financial update. I will now turn the call back to Frank to wrap up our prepared remarks.
spk03: Okay, Scott. So, thank you for listening to the prepared comments, and I think we're going to now transition to a Q&A session. Back over to you, Eric.
spk14: Chris, can you open the line for questions?
spk11: Yes, sir. Thank you. At this time, we'll conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. Our first question comes from the line of Ken Cacciatore from Cowan. Your line is open.
spk10: Hey, guys, real exciting time. I know big major data coming up, but I wanted to focus on the Zareve launch and some of Ken's comments. You really are taking a different approach here versus your competitor here. And Ken hit on some points. Actually, I wrote one of them down, which was interesting, saying we're doing it without accelerants, which is a new term, but I think very descriptive. But maybe you guys could take some time and Ken review a little bit of why it's so important you're taking the strategy that you're taking, why you are not being a bit more aggressive on sampling and buy downs. And what does that mean in terms of your preservation of long-term value? And I guess a corollary to that is as you approach this strategy, you talk about these nice contract wins. Can you try to contextualize, is it the value that you thought in these first contracts? So is it validation early of that strategy? So just wanted to hear a fuller articulation of your choices versus theirs. Thanks so much.
spk12: Sure, Ken. Great question. So I'll try to break that apart, starting with the accelerant. So I think there are many ways to fuel Rx growth. Obviously, organic demand built on the backs of their clinical profile. But there are many things that one can do to enhance your strip trends. And we've seen that with other products out there where they be, you know, to use your, you know, other buy-down opportunities, you know, very, very low-end pockets, cash offers, things that sort of don't really represent, I think, sort of the long-term sustainable type of demand that you want. And it's been said at some point in time, that will have a material impact to your gross finance. And we've seen, you know, kind of learning from the past, we've seen some companies that have gotten deep into holes and sort of ultimately ceased to exist as an organization based on their inability to claw their way out of these scenarios. So that was kind of the approach we're taking. It is very different. And I think, you know, obviously it remains to be seen, but We're very confident in the sense that even without generating, you know, kind of this massive uptake at the beginning and sort of, you know, the value proposition of our clinical profile was very clear. And in the decision to cover us both at the PBM and plan level, you know, they could see our proposition, our value, our clinical profile, and the approach we were taking. And so I think we were rewarded for that. So we did not necessarily have to take the traditional generate volume at all costs, and then rebate, you know, massively off of a very high price to try to secure access. So it is a different playbook. You know, we're very happy that we're able to report today the output of that. But it really just lessons learned there in terms of you don't necessarily have to take that route. The other thing that we think about is kind of the sustainability of our pipeline. And in order to sort of get to those other milestones or launches, We have to be in a financially stable position. So this is something that we thought about in terms of how do we do this methodically and in a controlled manner without, again, digging ourselves into a hole and putting ourselves kind of behind the eight ball on that front. So these are important factors we think about in terms of future launches and sort of what not to do. I think the last thing is what you will see is with some of these tactics that are used to generate volume early on, whether you're talking about in this category or others, almost universally, they are pulled back. So one of the frustrations, key frustrations of physicians that we heard very loud and clear was, please don't beat and switch us. Please don't put out something and then have to walk that back. And then, you know, ultimately our credibility with patients is on the line. I think that's one of the key learnings that we, you know, really built on of having as many dermatology clinicians in-house as we do is that understanding of, you know, don't put out something that then you have to pull back. And we've seen other products or other companies then sort of have these strange transitions when they're trying to walk back certain things they put out in the market, which then causes disruption and web consensus, like nonlinear growth patterns, right? So this is something that we're very conscious of and we hope to continue to build on the momentum that we have today with respect to the payers and them seeing the value without necessarily adopting that classic high price, high rebate approach.
spk11: Thanks so much.
spk10: Sorry, did I answer your question? I hope I did. It did. You did. It was very comprehensive, and congrats on all the progress. Thank you.
spk11: The next question comes from the line of Seamus Fernandez from Guggenheim Securities. Your line is now open.
spk05: Oh, great. Thanks for the questions, guys. So just two quick questions, just from an expectations perspective. I wanted to just get a sense of, you know, as it relates to the data that have been presented so far in AD and the data that were presented in your own presentation of the FDA's primary endpoint. Just wanted to, you know, clarify as we speak with investors, some are kind of looking at the difference of one and two. one or two point change rather than the one or two point change with the two point differential as the primary endpoint. And just wanted to make sure that that was clarified for investors in terms of what you guys saw in your phase two results and maybe even provide the slide to refer back to from your 2020 presentation. Just because I think it's important that people have the sort of right metrics in place Separately, just also wanted to get a sense of what you guys actually think the AD data means for your potential to perhaps more aggressively promote Zareve cream heading into the potential approval of that product. you know, would you change anything related to your promotional strategy at all with regard to couponing and getting more aggressive with the experience that physicians are gaining with Cereve? Or are you happy with the experience that they're gaining in psoriasis and just looking forward to the new indication? And just the last question was really, you know, congrats on the early formulary win here. Can you just clarify, is the competitor product Vitama also on formulary, or are you guys exclusively the product as the formulary win there? And do you see additional formulary wins in the relative near term that could surprise to the upside? Thanks so much.
spk03: That's a lot of questions, James. Okay, we're going to turn it over to, good talking by the way, we'll turn it over to Patrick to address your first question about the integument.
spk02: Yeah, Shane, happy to kind of make it very clear what the endpoints are there. So the primary endpoint for integument one, integument two, and integument P is IGA success. And so when we're enrolling mild and moderate patients, Those patients need to have a two-point improvement and get to clear or almost clear. So clear or almost clear means a zero or a one. Mild and moderate on the IGA is two, three. And severe, which we're not enrolling into these trials, would be a four. So that means that a patient who comes in at a mild needs to get to clear in order to meet that IGA success criteria. The other endpoint that you had mentioned, which does appear in much more communication around this trial, because it really is the easiest one to communicate to patients, because this two-step improvement, and to doctors, this two-step improvement involved in the IGA success can sometimes be a little bit tricky for people to get their heads around, whereas when you're talking to a patient or physician, you say, listen, we're going to get this patient to clear or almost clear. They know what that means. Clear means they don't have any disease, and almost clear means they're They have very little and, you know, perceptible disease that's remaining on them. So just kind of coming back to our data, we showed about 50% of patients between the 0.05 and the 0.15 in our Phase II study getting to clear or almost clear, and around a 30% vehicle rate on that endpoint. For IgA success, 0.05 and 0.15 were both around 37% to 38%. And so the vehicle also there demonstrated a 22% for IGA success. So it was that 15% difference between on the IGA success that we used to power our phase three studies because our expectation in segment one and segment two is that we'll be able to demonstrate similar efficacy to what we've shown previously. And, you know, just to confirm, our expectation is not to somehow reduce that vehicle rate. We think that's an important intrinsic part of our product. So with that, I'll turn it over to Ken to address the latter part of your questions.
spk12: Yeah, so Seamus, good to talk to you. So I'm going to try to tackle the question regarding kind of more aggressive promotion with respect to atopic dermatitis. So, you know, clearly, you know, we're a learning organization, and I think many things are up for grabs. One thing I'd point you to, though, is obviously, you know, the temporal nature of our launch is AD is a little bit farther out. And we'd have to sort of understand the landscape with respect to coverage. As you know, with add-on indication, sometimes you're able to kind of leverage the decisions made on earlier products in the portfolio. And if that were the case, you could certainly imagine a different approach, owing to the fact that we'd have several quarters under our belt with respect to earnings and be in a different position to maintain kind of sustainability. The shorter answer is, you know, it depends. And I think, you know, we would reserve the right to kind of dial up and dial down the level of sort of the tactics and approaches we would take. And certainly I think the competitive intensity would have something to do with that as well. So I can't tell you that we will or won't other than to say, you know, all things are on the table. But clearly the access picture and kind of where we are as an organization, given, you know, the downstream launches, would play a role in terms of how, quote unquote, aggressively we would play that. Now, with respect to the formulary, I'll only speak to us. I think we're still working with our partners to sort of get to the point where we'll fully disclose the details. But I will say that once that comes out, you'll have a better picture of kind of the situation we're in. Look for those details soon, but right now we're not at the point where we can sort of fully disclose the positions, only that we are covered on the CBM and the National Health Plan.
spk00: Chris, you go to the next question.
spk11: Thank you. Our next question comes from the line of Vikram Purohit from Morgan Stanley. Your line is open.
spk04: Hi, good afternoon. Thanks for taking our questions. So two from our side, both on the Zareve launch. So first, on inventory, what's the typical steady state of inventory you'd expect to have maintained for Zareve in the coming quarters? And then secondly, at this point of the launch, do you feel like you've seen enough kind of patient experiences at this point to understand how many tubes per year might be reasonable for people on Zareve to kind of work through on an annual basis? Thanks.
spk06: Sure. Vikram, hi. Scott, good to hear from you. On your question around the wholesaler inventory piece, it was certainly noticeable. I think I mentioned in my prepared comments about half of the sales in the quarter were related to the build. I think I would just say that we don't expect it to be a meaningful contributor. We expect the pickup in demand-driven scripts to be the main portion of sales going forward. Now, you know, you've probably seen from other companies, wholesaler inventories do fluctuate. It's just hard to predict these things. And so, you know, we'll be sure to call out when wholesaler inventory impacts the sales in a quarter. But again, the proportion we saw in Q3 was driven by the initial build at launch. I'll hand it off to Ken to talk about your second question.
spk12: Hey, Vikram. Yeah, so refill rates, you know, still very early in launch. And so I don't know that we have any confirmatory or, you know, data that suggests that we would back off of our earlier comments regarding the three to four tubes. I think, you know, it's very early days. The vast majority of patients have really only received their first tube. And so in many cases, depending on the body surface area, that tube can last, you know, two to three months. So it'll take some time. What's encouraging is that we aren't seeing refills. And again, that's always confirmatory feedback that the patient's having a positive experience. They're seeing the efficacy they're looking for. And really, those are good signs. And we feel good about our chip guidance at the moment. So probably far too early to change that assumption.
spk11: Fair enough. Thank you. Thank you. Our next question comes from the line of Louise Chen from Cantor. Your line is open.
spk01: Hi. Thanks for taking my questions, and congratulations to all the success this quarter. I had a few questions for you. So first one I had for you was that I know there has been a lot of focus on the initial launch prescriptions, and it's probably too early to draw any conclusions here on peak sales potential. But when do you think you'll actually hit your stride here? And then the second question I had for you is physician feedback on Zeribe. Why do people like it? Why are they prescribing it? What drugs are they switching from? And then last question I had was just on AD, the integument one and two, are you filing with that data or are you going to wait for Pete? Thank you.
spk12: Sure. Hey, Louise, it's Ken. So, you know, I think what we said earlier was we think that, you know, the momentum that we have coupled with the, you know, payer access coming into play will really help be that inflection point. I don't know exactly, you know, I don't know if you're asking me when of hitting stride, what hitting stride means, meaning like peak. But I think that we're hitting an all-time low at this point, and clearly there's still more work to do with respect to the payers. So today is a great marker for us, but we've got many more wins to sort of fully unlock the potential. And really, we really think that the reduction in prescriber burden is really one of the biggest keys to the success and widespread adoption of our product. Until that work is done, it was hard for me to say we hit on all cylinders or we're running at full speed quite yet on that. I think that's really the marker that you should then look to see if we're executing fully. With respect to the feedback on the drug, I think I mentioned earlier, there's been a lot of positive feedback. We've been out in the field quite a bit, listening, learning. I think earlier in my slide deck, I talked about the products from which people are switching from. So I think on slide 12 in the deck, you can see there's a whole host of products in there, again, the majority of which is what we would assume, topical corticosteroids. That's sort of the goal, I think, of all the products, newer topical products are sort of gunning for that same topical corticosteroid market. But you are also seeing Some of the both newer branded products, as well as some of the alternative steroids like vitamin D and calcium inhibitors being displaced as well. So there's a pretty healthy mix. There's no one thing. Again, the overwhelming modality from which people are coming from is topical or are topical steroids. Patrick, anything else to add in terms of the feedback or what else you'd be thinking about using?
spk02: Yeah, I mean, the only thing is I would say just from our kind of discussions with dermatologists and other healthcare providers right now is that we're hearing it not from like a single type of patient. So it's not really, you know, we're not seeing it being niched as like the intratergenous drug or something like that. We're hearing broadly, you know, patients who are being, you know, planned to be put over onto a biologic. They're putting some patients onto this, onto Stariv. We're hearing a lot of patients switching over from topical corticosteroids. And so I think that the breadth of where those patients are coming from is really supportive of the clinical profile that we saw, that it is strong enough to work on knees and elbows, but it also is able to be used on some of the more sensitive areas like the face and inner triginus. And that's something that is very differentiating, especially to the topical steroids because the vast majority of patients are out there. Oh, yeah, Louise, I'll take the third one as well, which is about our AD submission plan. So we're planning on reading out the Integument 1 and Integument 2 studies. As mentioned, those will come before the end of this year. Our plan is to make a supplemental NDA to the cream for ages 6 and above, which will include just the data of those ages. So we will not be including the Integument Peds trial That's at a different dose of 0.05 in ages two to five-year-olds. So we would move through the submission and approval for ages six and above, and then after gaining that initial approval, then we would come back with another supplemental that would take the data from ages two to five and extend the label into that lower age group. That's our plan right now.
spk01: Thank you.
spk11: Thank you.
spk14: We'll go to the next question, Chris.
spk11: Our next question comes from the line of Chris Shibutani from Goldman Sachs. Your line is open.
spk13: Hi. This is Steven on for Chris. Thank you for taking our questions. We have one on Zoriv and then one on the upcoming atopic germ data. On Zoriv, with the recent formulary and PBM win, can you speak to the percent of covered lives on a national basis? And then for the integument studies, The phase three studies are recruiting a slightly younger age than was studied in the phase two. Can you just remind us what went into that decision and how you expect that to affect the ultimate outcome? Thank you.
spk12: Hey, Stephen. This is Ken. So we won't be speaking to covered lives today. Look for a future announcement on that front with all the details once we work through with our partner. So that's not something we're announcing at this moment, but hang tight on that one.
spk02: Yeah, so with regard to the atopic dermatitis, the difference in the ages, in our phase two study, we studied down to ages 12 and above. This submission for integument one and integument two in the upcoming data readout will be ages six and above. So, you know, we don't really see this as a significant risk to the program. When we've looked over other data from both PDE4 inhibition in atopic dermatitis, topical treatments, as well as systemic treatments, we're not really seeing how patients across these different age groups are responding differentially to therapies. And in particular, you know, AD treatment with PD4, there's a lot of history there that really gives us support that, you know, we anticipate the similar kind of effect even going down into those younger age groups. So we're very confident about the consistency of our results. And especially with this next readout, we're only extending the age from 12 and above down to six and above.
spk13: Got it. Thank you.
spk11: Thank you. Our next question comes from the line of Y. Ear from Mizoho Group. Your line is open.
spk08: Hi, guys. Thanks for taking my question. So, I guess my first question is, I think you previously mentioned that depending on how quickly you can analyze the data, you are not committed to reading out enticament one and two at the same time. Just wondering if this is still true. And I guess my second question is, Could you sort of help us understand why you wouldn't or decided not to submit, I guess, the erector data and the stratum data for the foam formulation at the same time? Is it primarily just because of the speed in analysis or is it something else? Because it seems that, you know, waiting a couple of months is probably better than maybe 10 months or... more, I guess. And my third question is, you know, given everything that we know today, particularly with respect to the formulary, when could you sort of help us understand a little bit what you think the gross net could be next year? Thanks.
spk03: So, Patrick, you want to maybe take the first two, and then Scott, you can address the GTN. Thanks for the question, Dewey.
spk02: Anyway, yeah, this is Patrick. So yeah, as you know, we ended recruitment in Integument 1 and Integument 2 about three weeks off from each other in August. And so our expectation is that that differential in the readout will continue through kind of the final data to top line. And so our plan is not to hold the two studies to be read out together, you know, unless something were to happen which would cause them to be closer than the current three-week separation that they had coming into through the recruitment. So that's our plan right now is that if that continues that we would read one out and then read the second one out separately. With regard to the timing of erector and stratum and the kind of foam submissions, You know, our feeling, given the differential in the time between when we read out the seb derm data and scalp psoriasis, you know, especially with seborrheic dermatitis being an indication where there really hadn't been any development going on and patients are very much waiting for this treatment. We hear that when we talk to investigators. We hear that when we talk to patients who are in the trial. We felt that holding that at all really, you know, wasn't best for patients and really wasn't best for us as a company as well. So, you know, we're going to move straight forward with getting the seb derm submission in and then as quickly as possible on the heels of an approval there that we would file a supplemental for the scalp psoriasis.
spk03: I would just maybe, I would add, you know, I think Wall Street still does not appreciate just how big an opportunity seborrheic dermatitis is. I think the level of excitement in the dermatology community about the foam in seborrheic dermatitis is probably the highest of any of our indications. This is a disease that has been almost entirely neglected for 40 years. Patrick and Ken and I were out in the field last week, and we heard consistently that dermatologists are seeing more seb derm patients than psoriasis patients every day. They are, pun intended, foaming at the mouth for the foam. for seborrheic dermatitis. And so, as Patrick said, we didn't think it was right for patients or for the company to hold that submission by a single day. We wanna get it out as quickly as possible so that we can start helping dermatologists treat their seb derm patients. And I think Wall Street will start to realize just how big an opportunity this is for us for 154 in seb derm. Scott, you wanna?
spk06: Yeah, thanks for the question. So, looking at Q, Q3, if you triangulate between the commentary that we made on the inventory build and then the demand, the script demand data that you see week to week, I think you would come to a gross net range in the quarter of about 70% to 80%. So that's for Q3. When we look ahead to Q4, very exciting, the announcements we made today around the formulary coverage. I would say that given the time kind of within the quarter that it occurred, The improvement in gross net for Q4, the expectation there should be relatively modest. But then when we get into 2023, I think we're on a good path. We expect, you know, additional for monetary coverage to take hold over time. And so that would put us on the path to, I think what we've talked about in the past is call it, you know, 40, 50% long-term gross to net discount rate. And that hopefully, you know, I think we've given a base case of maybe 12 to 18 months from launch. Obviously, we're doing everything we can to accelerate it. And the announcement we made today is a good down payment on that. Okay.
spk08: Thank you.
spk11: Thank you.
spk14: Chris, we got a question.
spk11: Our next question comes from the line of Greg Frazier from Truist. Your line is open.
spk09: Good afternoon. Thanks for taking the question. I wanted to ask about the feedback. I'm curious specifically for feedback that you've been hearing from docs that have been prescribing the other new drug in the class, Vitamma. And on the switching, what are the reasons that you've heard for docs switching patients from Vitamma Are the switches happening for efficacy reasons or more about side effects? Any color there would be helpful. Thank you.
spk03: Yeah, so I would just say, you know, we don't have any direct feedback from doctors on why they might switch from one drug to another drug. You know, the switching data we're getting through secondary sources Yeah, I don't know that there's a whole lot more we can say about that at this point in the game.
spk10: What about feedback from doctors?
spk03: Well, I mean, in terms of feedback, I think what we've heard very consistently is that they're impressed with the rapidity of Zariv's effect and the efficacy that they're seeing, particularly on tough-to-treat plaques, And then, you know, the thing that we really never hear about is any tolerability issues with Zareeb. And I think that that is a significant difference from really every other topical on the market. You know, every single topical product they have other than Zareeb is associated with fairly significant local tolerability issues, you know, whether that's steroids or TCIs or vitamin D or vitamin A or any of the other products. And so, you know, I think doctors have been very pleasantly surprised at how well patients tolerate Zoriv, and that's been something that's come up very consistently in our discussions with users.
spk14: Chris, maybe we can go to the one more question, get over a few minutes over.
spk11: Yes, sir. Our next question comes from the line of Serge Belanger from Needham. Your line is open.
spk07: Thanks for squeezing me in. A couple quick questions, I guess, for Ken on the coverage of Zoriv. I know it's only been a couple months since the approval and the launch, but curious if your initial assumptions of being at steady state coverage and growth to net of 40 to 50% within 12 to 18 months are still intact. And then secondly, since Rory is launching and competing directly with another topical product for the same indication, should we expect to see some exclusive formulary wins for either Zoriv or the other product?
spk12: Thanks. Sure. So I'll start with the first question. So I think, you know, Scott said earlier, and, you know, we do expect within the timeframe that we've talked about before, 12 to 18 months, that we would achieve that sort of steady state growth from that. You know, industry-wide, the benchmark is about 50%, which would represent great performance, frankly. And so we're on the way to that path. in terms of achieving that. So I think, you know, the timing has been excellent in this case. You know, I can't really prognosticate as to when those next ones will come, but certainly I think, you know, it's validating in terms of our strategy of trying to accelerate that. It would be perhaps atypical for, you know, a product to come out and receive that kind of coverage that quickly. So we are pleased, but it's certainly, I don't know that you can sort of read that through to consider the next one and the next one quite yet. So I'd say 12 to 18 months is very reasonable. With respect to kind of exclusivity in general, I think payers are typically loath to give exclusive contracts or try to lock out another product early in the life cycles. You tend to see that a little bit more in more mature markets or when there's sort of a clear incentive to do so. So early on, I think fairs are watching kind of the volume uptake, the way in which that volume is generated, and also kind of looking for those dynamics, and then ultimately may toss that out. And we've seen this in other competitive markets in Durham, you know, biologic space in particular, you see a lot of activity, but it's often not right at the beginning. And so again, they also don't necessarily want to pick the wrong horse, so to speak. You typically don't see that, and I think generally companies aren't looking to sort of bid for the next of access either very early in the launch. So I would not expect to see that emerge too quickly.
spk08: Thank you.
spk11: Thank you. I would now like to turn it back to Frank Watanabe, CEO, for closing remarks.
spk03: OK, well, I know we're a little overtime, so keep it brief. I just want to thank everyone who joined us on the call today. Thanks to all the people who had some very probing questions for us. And I also wanted to take just a moment to thank the Arcuda staff. And we started out by talking about everything that we've accomplished in 2022 and in Q3. And, you know, we would not have been able to accomplish any of that without the brilliance and hard work of the entire Arcuda team. Patrick and Ken and I just, you know, we're the the front men, but it's the folks in the trenches who are doing all the work, and so I want to thank all of them for their hard work and their contributions in realizing our mission and bringing these therapies to patients. Thanks a lot for joining us, and we look forward to talking to you all again next quarter.
spk11: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
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