Arcutis Biotherapeutics (ARQT) Morgan Stanley 22nd Annual Global Healthcare Conference summary

Product performance and market trends

• Initial psoriasis launch was slower than expected, but subsequent launches for seborrheic dermatitis (seb derm) and atopic dermatitis (AD) have shown stronger uptake due to applied learnings and a more experienced commercial team.

• Demand is growing across all three products, with improvements in gross-to-net and payer coverage, including progress with government payers.

• Dermatologists are gradually shifting away from habitual topical steroid use toward non-steroidal options, with a linear adoption expected over several years.

• ZORYVE foam is seen as a paradigm-changing treatment for seb derm, offering convenience and efficacy that is expanding the market.

• Atopic dermatitis launch is tracking closer to the strong seb derm launch, with positive early uptake and rapid payer progress.

Reimbursement, gross-to-net, and sales dynamics

• Blended gross-to-net is in the high fifties, with psoriasis at a steady mid-50s% and foam expected to reach similar levels by year-end.

• Atopic dermatitis is expected to reach gross-to-net steady state by mid-next year, following a similar ramp as foam.

• Rapid formulary coverage and established reimbursement processes are key drivers for improved gross-to-net and script growth.

• Recent psoriasis script growth is attributed to the halo effect from seb derm, sales force expansion, and seasonal factors.

• Refill rates are strong: 40% for psoriasis and 33% for seb derm, with average annual utilization of two to three units per patient.

Competitive landscape and clinical feedback

• Main competition remains topical steroids, though branded competitors exist in both psoriasis and AD; tolerability and gross-to-net challenges affect some rivals.

• ZORYVE is praised for reliability, minimal side effects, and ease of coverage, contributing to steady growth.

• In seb derm, ZORYVE foam is enabling treatment of more patients due to its simplicity and effectiveness.

• Atopic dermatitis market is large, and ZORYVE’s once-daily dosing and clean label are competitive advantages.

• Little cross-indication use is seen due to payer requirements, though anecdotal off-label use occurs.