Arcutis Biotherapeutics, Inc.

Good day, and thank you for standing by. Welcome to the Arcutis Biotherapeutics second quarter 2023 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 that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your speaker today, Eric McIntyre, Head of Investor Relations. Please go ahead.

Thank you, Corey. Good afternoon, everyone, and thank you for joining our QDSIS second quarter earnings call. Slides for today are available on the investor section of our website. On the call today, we have Frank Watanabe, President and CEO, Ayesha Jeter, our Interim Chief Commercial Officer, Patrick Burnett, Chief Medical Officer, and Scott Burrows, Chief Financial Officer. I'd remind everyone that we'll be making forward-looking statements during this call. These statements are subject to certain risks and uncertainties, and actual results may differ materially. We encourage you to review the information disclosed in our latest SEC filings. With that intro, I'll hand the call over to Frank.

Thanks, Eric. And I'm going to make some brief introductory comments, and then I'll turn it over to the experts here. So I'm on slide five of the slide deck. I'm really proud that our team is effectively executing on our strategy. to build the leading innovation-driven dermatology company. The Zareve launch is strengthening on all fronts, laying a solid foundation for sustained long-term growth. Physician and patient feedback remains exceedingly positive, and the launch is building momentum. We're really encouraged by our script growth as clinicians gain positive real-world experience with Zareve, and in Q2, we saw around 40% growth in TRXs versus Q1, and we've seen even further growth so far in Q3. And remember, we're just scratching the surface here on the broader topical steroid opportunity, which is still roughly 20 times the size of the current non-steroidal market. One key element to unlocking the long-term conversion from topical steroids is our success in obtaining broad, high-quality access, and we're thrilled to have announced the CVS coverage decision in early July. In less than 12 months from launch, we've now secured coverage at all three of the large national PBMs, as well as other large downstream health plans, which is unusually fast for any launch, and we think is validation of our pricing and access strategy. Currently, more than 130 million commercially insured patients have access to Zareve, and over 90% of those patients have access without any prior authorization, which meets our goals for high-quality access. I'm also pleased to report that gross to net has improved in the second quarter, as we had previously indicated. And so far in Q3, we are seeing additional improvement, in part due to the expanded coverage, as well as our focused execution, with a percentage of scripts being covered reaching all-time highs, and we expect further gross net improvement in Q3 and additional improvement in Q4. Beyond the Zareve US launch, we're also executing to build for the future. In June, we launched Zareve in Canada, and thus far we've had an excellent reception from physicians and patients, as well as rapid progress in building the same high-quality access that we've achieved in the U.S. It's still early days, but the script growth has been healthy, and we've already secured coverage for Zarev with the top three private payers, representing more than half of the Canadian private market. We also strengthened our overall patent estate with the recent issuance of a new patent covering methods of treatment of seborrheic dermatitis with reflumilase foam, and that's a U.S. patent, by the way. We already enjoyed very strong IP protection on topical reflumelast foam and cream through 2037, and this new patent extends protection for the foam in seborrheic dermatitis through 2041, which we're obviously delighted with. So, turning now to slide six, you know, we've shown this slide previously, but I think it's a good reminder of the true opportunity for topical reflumelast and also what makes it a very unique molecule with potentially four products in one as we execute multiple launches in the quarters ahead. With Zareve today, we're competing in a market of about 2 million patients topically treated for their psoriasis in U.S. dermatology offices. Then we have potential upcoming launches every two to three quarters with Cevderm at the beginning of 24, AD in the second half of 24, and then scalp and body psoriasis in 2025. We also have a very large opportunity outside of the dermatology office, particularly with the expected approvals in atopic dermatitis and seborrheic dermatitis, both of which are frequently treated in a primary care setting. As we've indicated before, we do not intend to build our own primary care sales force, but we'll look for a partnership to help us access this market in a cost-effective way. So when you factor in all those opportunities we're pursuing, both inside dermatology and out, that's a 13 million patient addressable market and more than a six-fold increase over the current psoriasis market we're competing in. Now I want to turn the call over to Ayesha Jeter, our interim chief commercial officer, to provide more details on the Zareve launch. But before I do, I want to comment on how impressed I've been with her performance as our interim CCO over the past few months. I had no doubt about Ayesha's ability to fill in as an interim CCO when we appointed her to that role, and she's done incredibly well filling in while we search for a permanent chief commercial officer. She's providing strong leadership, and our commercial team has not missed a beat, as you can see in our recent sales performance. And with that, Aisha, go ahead.