Arcutis Biotherapeutics, Inc.

Good day and welcome to the Arcutis Biotherapeutics third quarter 2023 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 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference 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, Abigail. Good morning, everyone, and thank you for joining this morning to discuss our Q3 2023 financial results. The slides for today are available on the investor section of our website. On the call this morning, we have Frank Watanabe, President and CEO, Todd Edwards, our Chief Commercial Officer, Patrick Burnett, Chief Medical Officer, and John Smith, our Chief Financial Officer. I remind everyone that we will be making forward-looking statements during this call. These statements are subject to certain risks and uncertainties, and our actual results may differ. With that, let me hand the call over to Frank.

Thanks, Eric. So I'm on slide five of the deck now. So we're really pleased with the Arceus team and our execution in the quarter. We made remarkable progress since the last time we spoke regarding our Q2 earnings. Starting off with the Zareve launch and psoriasis, that continues to gain momentum. And we now have over 110,000 prescriptions and about 9,000 unique prescribers launched to date as our product delivers positive clinical experience for healthcare providers and their patients. This positive tailwind sets us up to launch our future topical reflomalase formulations as well from a position of strength. We also saw significant gross net improvements in the quarter, averaging in the low 70s for the quarter. Once again, we had swallow execution against our clinical and regulatory milestones with a steady flow of successes this past quarter. Patrick will go into a lot more detail in his remarks, but during the quarter we received FDA approval for an expanded psoriasis indication down to the age of six. We filed a supplemental NDA for atopic dermatitis down to the age of six with an expected approval in early Q3 of 2024. We announced positive PISVOTO phase three data for AD in the two to five year old range And we released some really exciting long-term data in AD that demonstrated efficacy continues and actually improves with treatment with Zarif long-term out to 52 weeks, along with a very favorable long-term safety and dependable disease control. We also strengthened our capital position with a follow-on raise we completed in October, as well as the upfront from the out-licensing deal we executed in Huadong for Greater China and Southeast Asia. And John will go into more details in just a minute. John, we'll also talk about some more positive news around positive revisions in our SLR debt agreement that we've recently concluded. And we expect to, we continue to expand our intellectual property estate with the receipt of a new formulation patent in October, which is already listed in the Orange Book, very importantly. And we have a number of additional pending applications that we expect that we'll issue soon, and which will further build on the breadth and depth of our patent protection. Moving on to slide six, we're also very excited about 2024 as we are on the cusp of a very significant expansion of the opportunity for topical reflumelast in the coming year, which will translate into a substantial acceleration in our revenue trajectory. In the next 12 months, roughly, we will expand the total addressable market for Zareve potentially about tenfold. expanding our patient opportunity in the US from roughly 1.3 million commercial psoriasis patients today to over 13 million patients as we add about 1.2 million patients, commercial patients with seborrheic dermatitis and about 1.4 million commercial patients with atopic dermatitis treated by dermatologists following the anticipated approval for those indications. We could also add another 3 million patients across these same indications who have Medicare or Medicaid coverage and who are also treated by a dermatologist. And then finally, we are actively working towards a strategic partnership that could allow us to expand into the roughly 6 million patients treated by primary care or pediatrics across those indications. We know there have been some questions about the pace of conversion from topical steroids to the new or non-steroidals. We talked about this back in Q1 about other similar markets with established generic standards of care and how those conversions to newer class of drugs occurred over time. And the topical dermatology market is right on track with these earlier prior examples with roughly 5% conversion one year in. We remain optimistic that the topical market will continue to convert and will eventually reach roughly 50% conversion. I'm also delighted to have Todd Edwards on board as our new Chief Commercial Officer, and his leadership and proven credentials in the topical dermatology market will only further enhance our commercial execution. Under Todd's leadership, we have a robust plan to further accelerate Xareeb growth and are investing in our commercial operations to drive that growth. With that, let me turn it over to Todd to provide some further commentary around the Xareeb psoriasis launch.