Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) Q4 2022 Earnings Call Transcript

A €“ Scott Burrows: So then pivoting back to your question regarding SebDerm Seamus. So I think a couple of things in play here. So recognizing that the population of patients sort of skews older, it invokes a slightly different insurance mix, right? So we’re thinking about a little bit more government-pay patients, a little bit less commercial pay patients. So first and foremost, we need to be thinking about that and sort of our aspirations for government pay insurance types. I think the second thing is that, as I mentioned to Vikram, we should assume that there will be some carryover or transposition of some of our coverage, so to speak, into sub-derm. However, just as we think about government pay and securing things like Medicare coverage, in general, the rebate expectations are higher than that of commercial pay.

So, I’m not 100% sure quite yet how that will play out. It’s obviously going to be a mix in terms of overall gross to net. But the price to pay, so to speak, for the government payers is typically higher than that of a commercial pay. However, in sub-derm, overall, from a net perspective — I’m sorry, from a total competition standpoint, it’s still majority commercial, but the percentage of government pay is about, let’s call it, 45% versus what we see in something like a psoriasis, which is about a third. Okay, Olivia, can we go to the next one?

Operator: Our next question coming from the line of Ken Cacciatore with Cowen. Your line is open.

Ken Cacciatore: Hey team. Congratulations on all the progress. I know just Frank and Ken, stepping back, there’s many ways to launch a drug and I know there’s multiple ways to be successful in it. But can you talk about some of the differences from your perspective on how you’re approaching this? And you’re giving very detailed, but maybe you could juxtapose that against your competitor because unfortunately, on Wall Street, especially when we’re nearly simultaneously launching products, you get compared in terms of the Rx and the trajectory of your launch and their launch. But maybe you could bring out some of the subtle nuances to your approach and why we seem to be sticking with it and ultimately, why we’re going to be successful?

And I’ll say one thing before you answer. We have done a lot of doc checks, and I just need to say exactly mirroring what you’re hearing. They definitely giving us great feedback on the product. But with that, I’ll let you answer that question. Thank you.

Frank Watanabe: Sure Ken. I’ll take a stab at that. So, thanks for teeing it up. Obviously, to the naked eye, I think the trajectories look very different. And I think we’ve said in the past that we’re comfortable with the sort of a steady progression that’s focused on disciplined financials. We aren’t sub-juicing, if you will, any of the of the prescriptions by sort of putting out temporary offers or buy-downs, which then kind of — I think I read recently, there was a comment about when the honeymoon period ends, right? So, when companies start pulling back their introductory offers and some of the reality set in. So, we’ve typically — we’ve generally refrained from kind of going out with offers that are too good to believe, or too good to be true.