Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT), a commercial-stage
biopharmaceutical company focused on developing meaningful
innovations in immuno-dermatology, today reported financial results
for the quarter ended March 31, 2024, and provided a business
update.
“Our strong performance in the first quarter,
with the incredibly well received launch of ZORYVE foam for
seborrheic dermatitis, and continued growth of ZORYVE cream in
psoriasis, reinforces the demand for new and novel steroid-free
treatment options and physician adoption of the ZORYVE portfolio,”
said Frank Watanabe, president and chief executive officer. “The
growth of ZORYVE cream and foam, along with a July 7th PDUFA date
for ZORYVE cream as a potential treatment for atopic dermatitis, as
well as our robust development pipeline, position Arcutis for a
potentially transformative year in 2024.”
Program Updates / Key
Milestones
Roflumilast cream – a
highly potent and selective phosphodiesterase-4 (PDE4) inhibitor in
a once-daily cream formulation, approved in the United States and
Canada for the treatment of plaque psoriasis and under development
for atopic dermatitis
- Demand for ZORYVE cream in plaque
psoriasis continues to grow, with over 208,000 prescriptions filled
to date since launch by close to 12,000 unique prescribers,
reflecting the high levels of patient and physician satisfaction
with the ZORYVE cream clinical profile. ZORYVE cream is covered by
the three largest Pharmacy Benefit Managers and multiple other
commercial insurers, and the Company anticipates beginning to
obtain Medicare and Medicaid coverage during 2024. The Company
experienced another significant GTN improvement in the first
quarter compared to Q4 '23, and anticipates additional GTN
improvement throughout 2024 as GTN for the cream approaches steady
state.
- The Food & Drug Administration
(FDA) has accepted the Company’s supplemental new drug application
(sNDA) for roflumilast cream 0.15% for the treatment of mild to
moderate atopic dermatitis in adults and children down to age 6,
and assigned the application a PDUFA target action date of July 07,
2024. The sNDA is supported by positive results from three Phase 3
studies as well as a Phase 2 dose ranging study, and two Phase 1
pharmacokinetic studies.
Roflumilast foam – a
once-daily foam formulation of topical roflumilast designed to
overcome the challenges of delivering topical drugs in hair-bearing
areas of the body, approved in the United States for the treatment
of seborrheic dermatitis and in development for scalp and body
psoriasis
- The launch in January of ZORYVE
foam in seborrheic dermatitis has been incredibly well received by
healthcare providers and patients, with over 46,000 prescriptions
filled since launch, reflecting the high unmet need in this
disease. ZORYVE foam is also covered by the three largest Pharmacy
Benefit Managers. For the partial first quarter of launch, GTN is
favorable and improving rapidly.
- Based on the positive topline
results from the ARRECTOR pivotal Phase 3 trial for the treatment
of scalp and body psoriasis, the Company anticipates submitting an
sNDA for scalp and body psoriasis to the FDA in the third quarter
of 2024.
ARQ-255 – a topical
suspension formulation of ivarmacitinib, a potent and highly
selective topical Janus kinase type 1 (JAK1) inhibitor, designed to
preferentially deliver the drug deep into the hair follicle, in
order to potentially treat alopecia areata at the site of
inflammation
- In December 2022, Arcutis announced
the enrollment of the first healthy volunteer subject in a Phase 1b
study in alopecia areata. The first subject in the alopecia areata
cohort enrolled in the second quarter of 2023.
ARQ-234 – a fusion
protein that is a potent and highly selective checkpoint agonist of
the CD200 Receptor (CD200R), being developed as a potential
biologic treatment in atopic dermatitis
- The Company continues preclinical
development efforts.
Recent Corporate Highlights
- In February, the Company completed
a public offering raising gross proceeds of $172.5 million
including the underwriters' 30-day option to purchase additional
shares at the public offering price per share, which was fully
exercised.
- In February, the Company announced
a strategic collaboration and licensing agreement for the
development, manufacture, and commercialization of topical
roflumilast in Japan with Sato Pharmaceutical Co., Ltd.
- In April, the Company announced
David Topper has been appointed Chief Financial Officer (CFO)
effective April 10, 2024. He replaced John Smither, who had
rejoined Arcutis as interim CFO in August 2023.
First Quarter 2024 Summary Financial
Results
Product revenues for the
quarter ended March 31, 2024 were $21.6 million compared to
$2.8 million for the corresponding period in 2023. Revenues for the
quarter were $15.0 million for ZORYVE (roflumilast) cream 0.3% and
$6.5 million for ZORYVE (roflumilast) topical foam, 0.3%.
Year-over-year increases were due to strong unit demand as well as
improvements in GTN sales deductions. In addition, the first
quarter of 2024 included Other revenues of $28.0
million related to the upfront and milestone payments in connection
with the Sato Pharmaceutical and Huadong Pharmaceutical
collaboration and licensing agreements.
Cost of sales for the quarter
ended March 31, 2024 were $3.3 million compared to $0.8
million for the corresponding period in 2023.
Research and development (R&D)
expenses for the quarter ended March 31, 2024
were $23.1 million compared to $35.3 million for the corresponding
period in 2023. The year-over-year decrease was due to decreased
clinical development costs related to our topical roflumilast
program.
Selling, general, and administrative
(SG&A) expenses for the quarter ended
March 31, 2024 were $54.8 million compared to $42.9 million
for the corresponding period in 2023. The year-over-year increase
was primarily due to sales and marketing expenses related to the
launches of ZORYVE cream and foam.
Net loss was $35.4
million, or $0.32 per basic and diluted share, for the quarter
ended March 31, 2024 compared to $80.1 million, or $1.31 per
basic and diluted share, for the corresponding period in 2023.
Cash, cash equivalents, restricted cash,
and marketable securities were $404.5 million as of
March 31, 2024, compared to $272.8 million as of
December 31, 2023. Net cash used in operating activities was
$31.6 million during the first quarter.
Conference Call and Webcast
Arcutis management will host a conference call
and webcast today at 4:30 pm ET to discuss the financial results
for the quarter and provide a business update. The webcast for this
conference call may be accessed at the “Events” section of the
Company’s website. The replay of the webcast will be available on
the Arcutis website following the call.
About Arcutis
Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT) is
a commercial-stage medical dermatology company that champions
meaningful innovation to address the urgent needs of individuals
living with immune-mediated dermatological diseases and conditions.
With a commitment to solving the most persistent patient challenges
in dermatology, Arcutis has a growing portfolio including two FDA
approved products that harnesses our unique dermatology development
platform coupled with our dermatology expertise to build
differentiated therapies against biologically validated targets.
Arcutis’ dermatology development platform includes a robust
pipeline with multiple clinical programs for a range of
inflammatory dermatological conditions including scalp and body
psoriasis, atopic dermatitis, and alopecia areata. For more
information, visit https://www.arcutis.com or follow Arcutis
on LinkedIn, Facebook, and X.
Forward Looking Statements
Arcutis cautions you that statements contained
in this press release regarding matters that are not historical
facts are forward-looking statements. These statements are based on
the Company's current beliefs and expectations. Such
forward-looking statements include, but are not limited to,
statements regarding the potential for its topical drugs in
development to address large markets with significant unmet need;
the development, approval and potential commercialization of
Arcutis' product candidates; the potential continued commercial
success and growth of ZORYVE cream in plaque psoriasis and ZORYVE
foam in seborrheic dermatitis, including market access and
reimbursement, product demand growth and continued improvement in
gross to net; and the timing of regulatory filings and potential
approvals for a number of dermatology indications for roflumilast
in the United States and Canada. These statements involve
substantial known and unknown risks, uncertainties and other
factors that may cause our actual results, levels of activity,
performance, or achievements to be materially different from the
information expressed or implied by these forward-looking
statements and you should not place undue reliance on our
forward-looking statements. Risks and uncertainties that may cause
our actual results to differ include risks inherent in the clinical
development process and regulatory approval process, the timing of
regulatory filings, the timing, expenses, and success of our
commercialization efforts, including uncertainty of future
commercial sales and related items that can impact net sales, and
our ability to defend our intellectual property. For a further
description of the risks and uncertainties applicable to our
business, see the “Risk Factors” section of our
Form 10-K filed with U.S. Securities and Exchange
Commission (SEC) on February 27, 2024, as well as any subsequent
filings with the SEC. We undertake no obligation to revise or
update information herein to reflect events or circumstances in the
future, even if new information becomes available.
Contacts:
MediaAmanda Sheldon, Head of
Corporate Communicationsmailto:asheldon@arcutis.com
InvestorsLatha Vairavan, VP
Finance and Head of Investor
Relationsmailto:lvairavan@arcutis.com
Derek Colemailto:derek.cole@iradvisory.com
ARCUTIS BIOTHERAPEUTICS, INC.Condensed Consolidated Balance
Sheets(In thousands) |
|
|
March 31, |
|
December 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(unaudited) |
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
190,097 |
|
|
$ |
88,398 |
|
Restricted cash |
|
|
617 |
|
|
|
925 |
|
Marketable securities |
|
|
213,769 |
|
|
|
183,463 |
|
Trade receivable, net |
|
|
37,154 |
|
|
|
25,807 |
|
Inventories |
|
|
13,247 |
|
|
|
13,134 |
|
Prepaid expenses and other current assets |
|
|
13,178 |
|
|
|
18,704 |
|
Total current assets |
|
|
468,062 |
|
|
|
330,431 |
|
Property and equipment,
net |
|
|
1,369 |
|
|
|
1,539 |
|
Intangible assets, net |
|
|
6,250 |
|
|
|
6,438 |
|
Operating lease right-of-use
asset |
|
|
2,264 |
|
|
|
2,361 |
|
Other assets |
|
|
596 |
|
|
|
596 |
|
Total assets |
|
$ |
478,541 |
|
|
$ |
341,365 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
12,969 |
|
|
$ |
11,992 |
|
Accrued liabilities |
|
|
33,584 |
|
|
|
33,941 |
|
Operating lease liability |
|
|
756 |
|
|
|
735 |
|
Total current liabilities |
|
|
47,309 |
|
|
|
46,668 |
|
Operating lease liability,
noncurrent |
|
|
3,181 |
|
|
|
3,382 |
|
Long-term debt, net |
|
|
202,803 |
|
|
|
201,799 |
|
Other long-term
liabilities |
|
|
306 |
|
|
|
849 |
|
Total liabilities |
|
|
253,599 |
|
|
|
252,698 |
|
Stockholders’ equity: |
|
|
|
|
Common stock |
|
|
12 |
|
|
|
9 |
|
Additional paid-in capital |
|
|
1,242,349 |
|
|
|
1,070,558 |
|
Accumulated other comprehensive loss |
|
|
(133 |
) |
|
|
4 |
|
Accumulated deficit |
|
|
(1,017,286 |
) |
|
|
(981,904 |
) |
Total stockholders’ equity |
|
|
224,942 |
|
|
|
88,667 |
|
Total liabilities and
stockholders’ equity |
|
$ |
478,541 |
|
|
$ |
341,365 |
|
ARCUTIS BIOTHERAPEUTICS, INC.Condensed Consolidated
Statements of Operations(In thousands, except share and per share
data)(unaudited) |
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
|
|
|
Product revenue, net |
|
$ |
21,569 |
|
|
$ |
2,781 |
|
Other revenue |
|
|
28,000 |
|
|
|
— |
|
Total revenues |
|
|
49,569 |
|
|
|
2,781 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
Cost of sales |
|
|
3,256 |
|
|
|
783 |
|
Research and development |
|
|
23,141 |
|
|
|
35,345 |
|
Selling, general, and administrative |
|
|
54,794 |
|
|
|
42,918 |
|
Total operating expenses |
|
|
81,191 |
|
|
|
79,046 |
|
Loss from operations |
|
|
(31,622 |
) |
|
|
(76,265 |
) |
|
|
|
|
|
Other income (expense): |
|
|
|
|
Other income, net |
|
|
4,044 |
|
|
|
3,207 |
|
Interest expense |
|
|
(7,480 |
) |
|
|
(7,042 |
) |
|
|
|
|
|
Loss before income taxes |
|
|
(35,058 |
) |
|
|
(80,100 |
) |
|
|
|
|
|
Provision for income
taxes |
|
$ |
324 |
|
|
$ |
— |
|
|
|
|
|
|
Net loss |
|
$ |
(35,382 |
) |
|
$ |
(80,100 |
) |
|
|
|
|
|
Per share information: |
|
|
|
|
Net loss per share, basic and
diluted |
|
$ |
(0.32 |
) |
|
$ |
(1.31 |
) |
Weighted-average shares used
in computing net loss per share, basic and diluted |
|
|
111,048,525 |
|
|
|
61,169,089 |
|
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