Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) Q3 2023 Earnings Call Transcript

Our messaging, which, of course, are known levers that can drive utilization with the dermatology community. In addition to that, if you look at the perceptions of efficacy, they’re very encouraging and the differentiating attributes of ZORYVE are resonating with prescribers. And as mentioned that the long-term data, I think, is extremely meaningful and really differentiates that long-term value of ZORYVE. But dermatologists, they’re well ingrained, they’re creatures of habits, and it takes time to get them to critical mass of patients that foam ZORYVE placed within the treatment paradigm. And by creating depth within our current prescriber base, moving them along the adoption curve, and moving up the average number of ZORYVE patients per prescriber will continue to accelerate the uptake in ZORYVE.

And as mentioned, we’ve hired the representatives to amplify our share of voice. In September, we launched a targeted direct-to-consumer campaign, which we will continue to move forward. And we’re going to have an expansion on the efficacy message to dermatologists to include a broader target patient with a higher BSA. And then I think as mentioned earlier, there’s an exceptional opportunity for expansion within Medicare and Medicaid, and that’s also to mention that expanded pediatric indication down to the age of six will provide us with their expansion opportunity in psoriasis.

Frank Watanabe: Maybe I’ll just add, because Todd is modest. We ran a very extensive search for our new Chief Commercial Officer. And it was very clear to me that Todd was the right person to join this team. I believe that leadership matters, and we chose Todd because look, he has a proven track record. He’s done this before. He successfully launched other topical products in the space very recently, has very effectively driven demand and has also very effectively managed gross to nets. And I have complete confidence in him and his ability to lead our commercial team. We also did announce the promotion of Ayisha Jeter to head both marketing and market access. She had been previously — while she was the interim Chief Commercial Officer and had been running market access. And I think along with Todd, I have real confidence in their ability to launch these additional indications and continue to drive the growth of ZORYVE in psoriasis.

Uy Ear: Can I follow up with just a question on gross to net? So I guess if your target is to reach steady state somewhere sometime in the second half of next year, it sort of implies that the quarterly pace improvement is pretty significant. I was just wondering if you can sort of just talk a bit, perhaps help us quantify what the improvement could be in the fourth quarter, at least?

Frank Watanabe: I’m thinking about it. We tend not to give forward guidance on gross to net. I would say, we saw a very significant improvement in Q3 over Q2. We saw a nice improvement in Q2 over Q1. I think we will see a further improvement in Q4 versus Q3. I won’t commit that it will be of a similar magnitude as what we saw in Q3 because that was a pretty big move. But I think Q4, you may see a little bit of noise in Q1 with the co-pay resets, but we’ll continue to make progress there in Q2 next year as well. I think it’s not a miracle occurs here sort of phenomenon for us to get to our target gross to net, with continued execution against the programs we already have in place and the coverage we have in place.

Operator: [Operator Instructions] Our next question comes from Chris Shibutani with Goldman Sachs. Your line is open.

Chris Shibutani: On the commercialization effort, the increase in the sales footprint that you have, can you give us a sense for how maybe more specifically, the composition of this group might be able to be impactful? And what’s the appropriate way to think about the timing for a potential inflection from that? And then, Frank, I think, historically, you’ve acknowledged how AD as a market is certainly quite vast into market to a primary care type potential market. It would contemplate a partnership for that market specifically. Can you talk about what your latest thinking is there?