Arcutis Biotherapeutics, Inc.

Good day, and welcome to the Arcutis Biotherapeutics 2023 Fourth Quarter and Full Year Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker 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 that your hand has been 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 call over to Derek Cole, Arcutis Investor Relations. Please go ahead.

Thank you, Andrew. Good morning, everyone, and thank you for joining us today to review 2023 financial results and a business update. Slides for today's call are available on the Investor section of the Arcutis website. On the call today, we have Frank Watanabe, President and CEO, Patrick Burnett, Chief Medical Officer, Todd Edwards, Chief Commercial Officer, and John Smither, Chief Financial Officer. I'd 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. We encourage you to review all the company's filings with the Securities and Exchange Commission, including descriptions of our business and risk factors. With that, let me hand the call over to Frank.

Thanks, Derek. I'm now on slide five of the deck. We've had a lot of really exciting progress since we last spoke for our Q3 earnings call, and I couldn't be more pleased with the Arcutis team and our execution in the quarter, nor more excited about the foundation these results lay down for progress in 2024. We continue to see growing momentum in the Zareve cream launch and psoriasis as healthcare providers and their patients see how it addresses real needs in their treatment of psoriasis. We've now generated Over 165,000 prescriptions and over 10,700 unique prescribers to launch to date as our product delivers positive clinical experience for HCPs and their patients. We continue to make significant progress on our gross to net each quarter with improvement in Q4 over Q3 of a similar magnitude as seen Q3 over Q2, taking us to an average in the mid-60s for the fourth quarter. The solid growth in prescriptions coupled with continued gross net improvements, drove strong revenue growth in Q4, both versus Q3 and year over year, with fourth quarter net revenue of $13.5 million. Coming on top of our progress with Zareve cream and psoriasis, we also received approval for Zareve foam for seborrheic dermatitis in December and launched in late January. I don't think I've ever seen comparable levels of excitement amongst patients and dermatologists as what we're hearing about Xaree Foam. We also continue to execute against our clinical and regulatory milestones with a steady flow of successes this past quarter. Patrick will go into a little more details in a minute, but during the quarter, the FDA accepted our supplemental NDA for atopic dermatitis down to the age of six and assigned a target date of July 7th, 2024, potentially expanding our portfolio even further. We also released very exciting interim long-term data from our open-label study in AD that demonstrated efficacy continues to improve with long-term use out to 52 weeks, along with favorable long-term safety and dependable disease control. We've seen robust, consistent, and predictable efficacy across all targeted indications, including psoriasis, seb derm, and atopic dermatitis in each of their respective pivotal trials. In addition, in October 2023, the U.S. Patent and Trademark Office awarded the company a new formulation patent that covers a means for inhibiting reflumilase crystal growth that is not limited to hexylene glycol. And in November 2023, the company was also awarded a new method of treatment patent covering a topical reflumilase formulation with an extended half-life. Both patents do not expire until 2037. And in October, we completed a secondary offering that raised $102 million, putting us in a strong financial position to continue investing in the ongoing launches in PlaxRice and CebDerm, as well as the potential atopic dermatitis launch later this year, while continuing the development of our pipeline. Moving on to slide six, a major reason why we're so excited for this year is that we are in the midst of a very significant expansion of the opportunity for topical reflumelast, which we expect will translate into a substantial acceleration of our revenue trajectory. You've seen this before, but from the initial approval for psoriasis, the total addressable market for Zarif could grow around tenfold this year alone to over 15 million patients in the United States. We have the right commercial team in place for success, and we have an excellent plan to execute against these opportunities. With that, let me turn it over to Todd to provide some further commentary around the Zarif cream launch and psoriasis and update you on how the foam is progressing in seb derm.