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Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 4:30 p.m. ET President and Chief Executive Officer - Todd Franklin Watanabe Chief Medical Officer - Patrick Burnett Chief Financial Officer - Latha Vairavan Head of Investor Relations - Brian Schoelkopf Operator: Ladies and gentlemen, thank you for standing by. Welcome to Arcutis Biotherapeutics Inc. Second Quarter 26 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. And to ask a question during this session, you would need to press *11 on your telephone. You will then hear an automated message advising your hand is raised. And to withdraw your question, please press *11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Brian Schoelkopf, Head of Investor Relations. Please go ahead. Brian Schoelkopf: Thank you, Michelle. Good afternoon, everyone, and thank you for joining us today to review our second quarter 26 financial results and business update. Slides for today's call are available on the Investors section of the website. Joining me on the call today are Frank Watanabe, President and CEO of our Arcutis Patrick Burnett, chief medical officer and Latha Vairavan, chief financial officer. I would like to 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 it over to Frank to begin today's call. Todd Franklin Watanabe: Thanks, Brian, and good afternoon, everyone. As always, we appreciate you guys making the time to join us on our quarterly update call. I am going to start this afternoon with a review of our very productive second quarter as we continue to deliver meaningful innovation for patients with chronic inflammatory skin diseases and continue to execute against our grow, expand, build corporate strategy. Todd is not able to join us today. So I will walk you through a commercial update, followed by Patrick for an R&D update, and finally, Latha will review the quarter's financial results. Before we open it up to questions. So I am on slide 5 in the deck. And just as a reminder, our 3 pillar strategy to sustain near and long term growth includes, first, growing our core ZORYVE business in our approved indications second, expanding into additional indications where ZORYVE's unique profile as a targeted and potent PD 4 inhibitor has significant potential to address persistent therapeutic gaps. And third, leveraging our deep clinical expertise and infrastructure to build our pipeline beyond 3. I am happy to report that once again made substantial progress across all 3 pillars during the second quarter. Start with our grow pillar, our in-line read business continues to strengthen and grow as we expand the reach and relevance of this medicine to the tens of millions of individuals with chronic inflammatory skin conditions in the U.S. who need and deserve new innovative therapeutic options to manage their plaque psoriasis seborrheic dermatitis, and atopic dermatitis. As ZORYVE continues to grow, we are now in a position to reinvest the significant capital generated back into the business creating a virtuous cycle of innovation that extends our transformative impact to more patients both with ZORYVE and current and potential future pipeline assets. As we will discuss today, our investment in innovation encompasses a broad range of value creating initiatives across the business that we are advancing in parallel for multiple clinical projects to impactful patient access initiatives. So touching on some of the highlights, at the end of June, we received FDA approval for ZORYVE cream 0.3% for the treatment of plaque psoriasis in children as young as age 2. This marks the seventh FDA approval for ZORYVE in 4 years, a remarkable accomplishment for a small company like Arcutis. And importantly, this milestone enables us to address a significant treatment gap introducing the first once daily steroid free treatment for plaque psoriasis approved down to age 2. In July, the FDA also accepted our supplemental NDA for ZORYVE cream 0.05% for the treatment of mild to moderate atopic dermatitis in infants down to 3 months. With a PDUFA date set for February 23, 2027. And I was just recently at the Society of Pediatric Dermatology and frankly, I was awestruck by the level of anticipation and excitement in the pediatric dermatology community about this potential approval which would address an urgent unmet need for a once daily nonsteroidal in these youngest of AD sufferers. Both of these regulatory milestones demonstrate our commitment to delivering meaningful innovation to both adults and children across all age groups. Including the youngest children impacted by these chronic inflammatory skin diseases and their caregivers. And as you will hear more today, our commitment to meaningful innovation for patients goes beyond bringing new therapies to market. We recognize that managing a chronic inflammatory skin disease like psoriasis, atopic dermatitis, or seborrheic dermatitis can be extremely challenging and burdensome for the individuals and their families. And with that in mind, we are turning our expertise to ways that we can innovate to enhance the patient experience and facilitate seamless access to treatment in order to help ease the burden on the patient and caregiver as well as the health care provider. Todd, we will detail some of our initiatives around patient access that specifically reduce barriers to care and streamline the patient journey. Our new virtual health platform and our strategic partnership with a leading AI enabled patient access support tool are the first steps to emerge from our broader patient access initiative Innovation Workstream. We are really excited about these initiatives, which I will explain in greater detail shortly. Both are great examples of our commitment to delivering meaningful innovation to patients. Turning to expand our second strategic pillar, we continue to make important progress in this quarter in evaluating the potential of Xareve in additional chronic inflammatory skin conditions. Specifically, we have now fully enrolled the phase 2 proof of concept trial of XEREVE in the treatment of vitiligo. And we continue to enroll the phase 2 proof of concept trials of XERED as a treatment for hidradenitis suppurativa. On previous calls, we have shared the extensive and growing list of conditions where clinicians have published case reports or case series showing promising signals of ZORYVE efficacy suggesting that ZORYVE's unique profile as a targeted and potent PD4 inhibitor could offer additional patients an innovative nonsteroidal therapeutic option. We continue to evaluate these other potential indications and anticipate initiating 1 or more additional proof of concept trials this year. And finally, turning to the third pillar, BILD, We continue to make progress advancing our innovative pipeline. Enrollment is ongoing in the phase 1 a, phase 1 b trial of ARQ 34. Our novel biologic targeting CD200R as a potential treatment for moderate to severe atopic dermatitis. By targeting CD200R, which plays a central role in both innate and adaptive immunity, we believe ARQ 34 could not only be an important first line systemic therapy, but also has the potential to address the clear and distinct need for a treatment for patients with atopic dermatitis who have relapsed on or who are refractory to IL 13 drugs. In addition, as we have discussed previously, external innovation will likely pay play a central role in expanding our pipeline. We are seeing a marked increase in deal flow recently, both dermatology and adjacent inflammation areas, and our team remains actively engaged in evaluating a range of external assets as we look to build our pipeline. As Lata will describe, we had another very strong quarter financially, And this level of performance and the cash flow that it generates enables us to continue to invest in innovation staying true to our biotech roots and mission. For the remainder of this year, you should expect a consistent execution against our stated strategy, opportunistic reinvestment in the business, and a steadfast commitment to creating long term value for both patients and shareholders. Based on the strength of our ZORYVE business to date, and in light of the incremental investments we are making to sustain demand for ZORYVE, we are delighted to raise our full-year 2026 sales guidance from the previous range of $480 million to $495 million to a range of $525 million to $540 million. You will recall that we made no changes to our revenue guidance during our Q1 earnings call and we do not anticipate revising it every quarter so this guidance really reflects the momentum that we, the business has seen through the first half of the year. So let me let me delve a little bit more into some of the details on commercial results for the quarter. I am now on slide 7. We continue to see robust sales performance and demand driven growth in the fourth in the second quarter. With net product revenues of $129.9 million, representing a 59% increase From the second quarter of 25 and a 23% increase over Q1. Our consistently strong quarterly revenue underscores the momentum and enduring strength of the of the ZORYVE franchise. As expected, our gross to net rate improved incrementally from the prior quarter and, continue to remain stable in the 50s. So looking ahead to the third quarter, we expect quarter over quarter net sales growth driven by sustained momentum in patient demand. Let me turn to Slide 8. Weekly prescriptions of XEREVE on a rolling 4 week average show sustained growth across the portfolio, and we reached new high watermark for quarterly demand with more than 280 thousand prescriptions in the quarter, across all indications and formulations for ZORYVE. As this chart highlights, XEREVE continues to experience substantial prescription growth. We anticipate this growing demand will continue through the duration of this year and beyond and will be the primary driver of ZORYVE's revenue expansion. The most important driver of ZORYVE's growth will remain the conversion from topical steroids to advanced topical targeted topical therapies like ZORYVE as health care providers and patients' perceptions of the risk of chronic steroid topical steroid use evolves. Let's turn now to slide 9. I want to expand on the patient access initiatives we introduced this quarter. As I highlighted in the opening, improving patient access is an important dimension of meaningful innovation as we aim to deliver to patients with chronic inflammatory skin diseases. Therapeutic innovation is meaningless if patients are unable to access new therapies, So we see it as an imperative to also innovate it in reducing barriers to treatment and care. Importantly, these new patient access initiatives are separate and distinct from but complementary to our payer access efforts. These innovations are focused on enabling seamless fulfillment and an efficient post prescription process helps patient access patients access to read rapidly, reliably, and efficiently. We have applied this holistic patient first approach to innovation since bringing Xareve to market. We are now broadening the scope of our patient access activities with the launch of our virtual health platform. Platform, and investments in AI enabled tools that support efficient prescription fulfillment. 2 distinct initiatives, both with the aim of facilitating more seamless access to ZORYVE. So a little bit more about each of these initiatives starting with the virtual health platform, which we announced in June. We recognize that over the last several years, patients have been rapidly changing how they obtain health care starting with the COVID pandemic and accelerating with the emergence of multiple virtual health offerings like HIMSS or Roe. And many individuals today are seeking more convenient flexible ways to receive care. Our virtual health platform recognizes this evolution and meets patients where they are by helping to address common barriers to dermatology care such as long wait times for dermatology appointments and the absence of specialized dermatology care in some geographies. The platform provides an additional pathway for individuals who might otherwise delay or forego specialized dermatology treatment. Importantly, the platform is designed to complement and not replace traditional in office dermatology care. Our goal is to help more individuals access the therapies that they need while continuing to partner with health care providers across dermatology, primary care, and pediatrics settings. So with model board certified independent dermatologists on the platform, evaluate diagnose, and determine appropriate treatment for each individual based on their clinical judgment. Arcudis does not influence diagnoses, clinical decision making, or prescribing decisions made through the platform. If prescribed, ZORYVE prescriptions are coordinated through a national pharmacy hub designed to support a seamless experience including insurance support and at home delivery. We are especially excited about this new platform because we believe ZORYVE has an ideal flow profile for the virtual health model. Dermatologists can prescribe ZORYVE confidently given its demonstrated efficacy, safety, and tolerability without worrying about a patient applying the drug to an area of the body that they and with the knowledge that the patient can use a reef for any duration. It treats the 3 most common inflammatory diseases, all of which can be diagnosed visually using telehealth tools. And additionally, in individuals suffering from these diseases are motivated to seek an effective therapy due to the burden of their symptoms. We are still in the early days of the rollout of our virtual health platform, but we are already seeing signals of the impact that it will have and are confident that this will have a meaningful benefit in expanding patient access to ZORYVE. Particularly when it is coupled with other demand generation efforts we have like the free to be me campaign. Now in late July, we launched our second patient access innovation partnering with 1 of the leading AI enabled prescription workflow platforms to streamline the post prescription process for ZORYVE in the dermatology office. The process for getting any prescribed therapy to an individual has grown increasingly complex and time intensive over time. But through this partnership, we are helping streamline patient access to ZORYVE after they receive the prescription. The company that we have partnered with is already widely adopted across dermatology offices as well as other therapeutic areas nationwide. And in practices where the tool is implemented, after providers initiate a prescription, the platform helps navigate and systematize that workflow. that follows. In addition, it supports patients with real time visibility into the process from the moment of prescription as well as other critical information and access resources. As part of the collaboration with ArQudis, the platform provides customized prompts and alerts to streamline the steps between a clinical decision and an individual starting ZORYVE. Including prior authorization, financial assessment, and fulfillment routing embedded directly into health care provider workflows. We are skating to the puck. it is our belief that the heart of harnessing innovation and leveraging these types of technology based solutions to help patients and health care providers with the fulfillment process for ZORYVE is where we need to be. These initiatives mark important additional steps in our mission to deliver meaningful innovation across every part of dermatology care. And on slide 10, you know, these patient access initiatives are only the latest example how we are reinvesting the cash flow generated by ZORYVE back into the franchise to drive sustained growth and inflection in sales in 2027 and beyond. Of course, all of our efforts to drive ZORYVE's growth would be meaningless without the solid foundation of ZORYVE's outstanding clinical profile. ZORYVE's rapid and robust efficacy across multiple inflammatory dermatose paired with its exceptional safety and tolerability profile, and its patient friendly formulation, make it a compelling choice for health care providers and patients looking to manage these chronic conditions especially against the backdrop of the growing concern about prolonged use of topical steroids. Our commercial efforts focus on generating awareness of this differentiated therapeutic profile with both clinicians and patients and then enabling efficient patient access to the product when it is identified as the appropriate therapeutic intervention. Building on that foundation are 3 broad categories of demand initiatives. The first is the investments we are making to strengthen our commercial infrastructure through targeted additions to our sales force. Dermatology sales force expansion has been completed, with our new dermatology specialty reps hitting the field as of early May. Since then, they have been gaining familiarity with their customers, And as previously discussed, we anticipate beginning to see the impact on growth from these reps beginning in the third quarter of this year. We have also now completed the build out of the first phase of our primary care and pediatric organization, having recently completed the hiring of this targeted team. We anticipate that this Salesforce will be in the field interacting with primary care providers and pediatricians by the end of this month and expect to begin seeing the impact of this new team by 2027. As a reminder, we are adopting a highly targeted approach with the sales team focusing on high volume, early adopter PTPs and pediatricians who are concentrated in major metropolitan areas. This approach positions our investment in a PCP peds sales team to begin contributing value rapidly. And as we gain more in-depth understanding of this space and how best to partner, with primary care and pediatric providers, we will evaluate further expansions of the team. We believe that some of the same attributes of ZORYVE's profile that have led to its leadership in dermatology and will drive meaningful adoption through the virtual health platform will also drive its success in the primary care setting. Specifically, primary care and pediatricians can prescribe confidently based on its demonstrated efficacy, safety, and tolerability and without worrying where or how long patients use it. The second component of our commercial investment plan is our direct to consumer efforts. We are driving meaningful patient engagement through our free to be me patient awareness campaign featuring Tori Spelling, her daughter Stella McDermott, professional golfer Max Homa. This campaign is helping to drive awareness of treatment options for patients with atopic dermatitis seborrheic dermatitis, and plaque psoriasis and the promise of ZORYVE across these indications. We are seeing these efforts resonate with a broad range of patient demographics, reflecting the broad swaths of the population impacted by these diseases. The effectiveness of this campaign is further bolstered by our virtual health platform enabling us to provide a direct route to a dermatologist for individuals who discover ZORYVE through Free to be Me. We look forward to continued progress of this important direct to consumer effort as we work to capture and reflect patients' lived experiences as they manage their chronic inflammatory skin conditions including using ZORYVE in their treatment regimen. The final component of our commercial investment strategy is facilitating seamless patient access to ZORYVE as we have discussed today. The virtual health platform and AI enabled prescription workflow efforts I just described earlier are the initial efforts that we are making in this vein but there are additional exciting initiatives to come, and we look forward to sharing details with those at a future date. With that, I am going to take a breath and turn the call over to Patrick for an R&D update. Patrick E. Burnett: Thanks, Frank. I am on slide 12. As was highlighted at the head of today's call, Frank highlighted our focus across the grow, expand, and build pillars of our corporate strategy. I would like to provide some additional context for the clinical components of each pillar. But before I detail our various clinical initiatives, I want to emphasize the breadth of our ongoing activities to further bolster the profile of ZORYVE. On this chart, I am showing the range of clinical programs we are pursuing to broaden our patient population, expand into new disease areas where we have early signs of efficacy, and better define the unique aspects of ZORYVE's therapeutic profile. The breadth of approved and potential uses of ZORYVE supported by its pleiotropic mechanism of action and its safety and tolerability profile. Underpin our belief that XEREVE is uniquely well positioned to supplant topical corticosteroids in the management of inflammatory dermatoses. Moving now to key clinical updates for the quarter. As Frank highlighted earlier, in late June, the FDA approved our supplemental NDA to expand the indication for ZORYVE cream zero point 3 percent for the topical treatment of plaque psoriasis including in intertriginous areas, to children down to the age of 2. A practicing dermatologist, I can personally attest that treating young children with plaque psoriasis presents unique challenges. Specifically, while safety and tolerability is always a concern, that concern is amplified in young children who may face decades of treatment and who are particularly susceptible to both local and systemic steroid exposure risks. Like HPA suppression. In our trials in children as low as 2 years of age with plaque psoriasis, ZORYVE zero point 3 percent demonstrated safety, tolerability, and efficacy comparable to that already demonstrated in adults and adolescents. ZORYVE is now the first once daily steroid free treatment for plaque psoriasis approved down to 2. It provides health care providers, parents, and other caregivers with an advanced targeted topical therapy that can be used anywhere on the body for any duration of time addressing a significant treatment gap for this very young and especially vulnerable patient population. In addition, in July, we announced that the FDA accepted our supplemental NDA for ZORYVE Cream 0.05% for the treatment of mild to moderate atopic dermatitis in infants down to 3 months with a PDUFA date set for February 23, 2027. As we mentioned on our first quarter call, we are able to submit this application just 3 months after having read out the top line results from our INTEGUMENT-Infant trial. This remarkable feat reflects the speed with which our team at Arcutis is moving on behalf of patients and a response to the high level of urgency shared by those HCPs who care for these youngest atopic dermatitis patients. This urgency to advance new and more effective therapies is driven by specific challenges in treating this infant patient population. The skin of young children is not fully developed, which can lead to increased systemic absorption of topical treatments like steroids. And these youngest patients also often present with more extensive disease adolescents and adults. During the quarter, we also initiated 2 new trials. 1 in adults to better elucidate ZORYVE's impact on pruritus, or itch. The trial is called INTEGUMENT-itch. And it is based on the compelling data from the INTEGUMENT-Infant trial showing reductions in itch within 10 minutes of first application. And another to evaluate the impact of ZORYVE on nail psoriasis. A notoriously difficult to treat presentation of plaque psoriasis often even failing systemic therapy, where we have seen some really exciting signals of ZORYVE efficacy in case reports. Now turning to potential new indications for XEREVE, we have now completed enrollment in our phase 2 proof of concept trial in vitiligo, and we continue to enroll the hidradenitis suppurativa, or HS, phase 2 proof of concept trials. We remain on track to provide a readout for the vitiligo trial and a decision on whether to advance the program in quarter 4 of this year. And we remain on track for similar readout for our HS program in quarter 1 of 27. Now recall that in our HS program, we have trials evaluating ZORYVE's safety and efficacy in HS as well as a study looking at gene expression following ZORYVE treatment in HS patients. As we advance these phase 2 vitiligo and HS studies, we also continue to evaluate other diseases for similar proof of concept studies. And we anticipate starting 1 or more additional proof of concept studies in the latter half of the year. During quarter 2, we also initiated a trial evaluating the impact of ZORYVE Cream 0.3% on cutaneous adverse events in cancer patients receiving PD-1 or PD L1 checkpoint inhibitor treatment. Such side effects occur in as many as half of patients receiving these lifesaving treatments. And they often lead to interference with cancer therapy. If ZORYVE is able to effectively manage such treatment related dermatoses, as suggested by some case reports, it may help cancer patients to persist with their PD-1 or PD L1 treatment regimen. This trial is another meaningful example of the broad potential applications of ZORYVE across inflammatory skin conditions. Turning lastly to ARQ 34, our novel biologic targeting CD200R and the build pillar of our strategy. As Frank touched on earlier today, by targeting CD200R, which plays a central role in both innate and adaptive immunity, we believe ARQ-34 has the potential to address the significant unmet need for systemic therapy for patients with moderate to severe atopic dermatitis And given the unique mechanism of action, could be a compelling first line therapy option as well as a treatment option for those who are refractory to IL-13 therapies. We have completed enrollment in the last cohort of healthy volunteers in the single ascending dose or SAD portion of the Phase I trial for ARQ-34. We have now begun enrolling atopic dermatitis patients into the final SAD cohorts, and we will begin to enroll AD or atopic dermatitis patients in the multiple ascending dose or MAD portion of the trial. Following the MAD portion, we will complete a small proof of concept portion in atopic dermatitis patients as well. As I explained on our first quarter call, we will not share results from this trial until it is completed, but we will continue to update you as we progress through these different portions of the study. We also continue to evaluate external sources for innovation to further build out our innovative pipeline. And as Frank mentioned earlier, we are encouraged by the increased deal flow in the dermatology and I&I space. So turning now to slide 13. We introduced this slide at our R and D Day last fall. It lays out the multiple characteristics a therapy would need to not only compete with topical steroids in chronic inflammatory skin disease settings, but also to displace them. ZORYVE is arguably comparable to topical corticosteroids in efficacy and rapidity of onset, But as depicted here, it then exceeds the steroid benchmark in mechanism of action breath, safety and tolerability, and duration and location of use. With the degree of differentiation becoming increasingly pronounced across each dimension. ZORYVE's unique profile, coupled with increasing HCP appreciation of risks, associated with sustained topical corticosteroid use as we reviewed in-depth previously, sets the foundation not only for substantial growth in our 3 in-line indications, but also for potential expansion into a number of new indications. And I wanted to review this perspective on ZORYVE's profile today as important context for the broad set of clinical activities that we are pursuing. The breadth and ambition of our clinical pursuits are unmatched in the branded, nonsteroidal topical segment and are enabled by ZORYVE's unique therapeutic profile. And they further demonstrate why ZORYVE is uniquely positioned to displace topical corticosteroids at a moment when there is a growing degree of concern over the deleterious side effects of extended or inappropriate use of these aging drugs. And I will now hand it over to Latha to review the financial results for this quarter. Latha Vairavan: Thank you, Patrick, and good afternoon, everyone. I am on slide 15. In the second quarter, we generated net product revenues of $129.9 million, representing a 59% increase over the second quarter of 25. This year over year increase was driven primarily by increased patient demand as well as improvements in gross to net sales deductions. As anticipated, our gross to net in Q2 remained stable in the 50s. Cost of sales in the second quarter were $10.9 million compared to $7.5 million in the second quarter of 25. Due to increasing ZORYVE sales volume. For the second quarter of 26, our R&D expenses were relatively flat at $20.4 million versus $19.5 million for the corresponding period in 2025 as increased investments in medical affairs initiatives and clinical expense related to ARQ-224 largely offset by reduced clinical costs related to the INTEGUMENT-Infant trial in atopic dermatitis patients aged 3 to 24 months. SG and A expenses were $82.1 million for the second quarter of 26 compared to $69.2 million in the same period last year up 19% driven primarily by personnel costs, including our dermatology sales force expansion. We produced net income of $15 million for the quarter as compared with a net loss of $15.9 million for the same period in 2025 as strong top line growth continued to outpace expenses. While we may continue to generate positive net income in some quarters, our focus as an innovative biotech remains on investing to continue to drive top line growth and advance our pipeline. Moving to slide 16, We ended the quarter with cash and marketable securities of $238.9 million as we produced positive cash flow from operating activities of $12.6 million for the period. We expect to maintain positive cash flow throughout the rest of the year. And as we have stated previously, we intend to continue to invest the capital we generate back into our business to inflect growth in 2027 and beyond. We have total debt of $101.9 million. As Frank announced at the beginning of today's call, we are increasing our full year 2026 net revenue guidance to be between $525 million and $540 million. This updated range contemplates the contribution of the new commercial initiatives Frank detailed today as well as the continued strength of our core ZORYVE business. With that, I will now turn the call back to Frank for some final updates. Todd Franklin Watanabe: Alright. Thanks, Latha. So we are also announcing today that Todd Edwards will resign from his role as chief commercial officer at Arcutis. To pursue other opportunities for personal reasons effective later this month. I wanna thank Todd for his leadership over these last 3 years. he is helped to build the commercial infrastructure that has enabled ZORYVE's success to this point. And that will continue to serve as the basis of Zareep's continued growth. I am also delighted to announce that Rob Lisicki will be stepping in as the interim chief commercial officer while we conduct a national search for a permanent CCO. Rob is a highly experienced biopharma executive with a career spanning 30 years in the industry. Most recently, Rob was the CEO at Zura Bio And prior to that, he was chief commercial officer at Revance Pharmaceuticals until its acquisition by Pfizer in 2022. And before that, he was CCO at Daiichi Sankyo USA. Rob and I have known each other for decades from our time together working on Enbrel, and he brings a wealth of experience in leading best in class commercial teams the inflammation and immunology space. And in driving rapid sales expansion to build blockbuster franchises. Expertise that Rob will contribute to our commercial operation in Arcutis is well timed as we drive towards a period of continued and increasing sales inflection for ZORYVE in the near term. Q2 was yet another quarter of exceptionally strong execution by the Arcudis team. I am incredibly proud of the team and the dedication they demonstrate every day to advancing our mission delivering value for shareholders, and remaining steadfastly committed to the patients we are serving today and aim to serve in the future. In early June, Arcutis celebrated its 10th anniversary. What started out as 3 guys and an idea has blossomed into a powerhouse biotechnology company with 4 FDA-approved products and a pipeline of promising programs and assets. More importantly, over the past decade, we have helped nearly 1 million people manage their chronic inflammatory disease and we are poised to help millions more in the future. As I look back on the past decade, I am humbled by and deeply appreciative of the contributions of our team members, the dermatology clinicians who partnered with us, the patients who agreed to participate in our trials, and the investors who believed in us enough to entrust their money to us. I sincerely thank you. And with that, I will open up the call to Q&A. Operator: Thank you. As a reminder, to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again. The first question will come from Seamus Fernandez with Guggenheim. Seamus Fernandez: Great. Thanks for the questions. So just wanted to start off the guidance raise definitely impressive, Frank. Take your point to not expect updates to the guidance every quarter. But just in terms of the momentum in the back half of the year, where are you seeing the kind of key drivers of growth at this point? Really looks like the foam, is just starting to truly stand out. But even the early sales of the 0.05% are coming on nicely. So I just wanted to get a little bit of a better sense of how you are thinking about the back half of this year's growth trajectory. You know, and where you know, you see incremental opportunities from the access point that you are opening up via telehealth? It seems like the telehealth opportunity could be quite substantial But I guess, we are all probably wondering where the price points are likely to end up on that front. And then just, you know, as it relates to Todd's resignation, I think we saw in the 8 k that he is pursuing another opportunity away from Arcutis But, you know, it seems like the team is extremely well built at this point. The strategy has worked effectively, and you are transitioning, to an interim leader who is got a great background. You know, what is it that you are most focused on during this transition in particular? Todd Franklin Watanabe: Yeah. Hi, Seamus. Thanks for your questions. So let me start with the first 1. Frankly, we continue to see growth across the portfolio. You as you mentioned, the foam is our leading product. It is a really unique highly differentiated asset. it is the only nonsteroidal in a foam. Know, it is effectively the only foam available for doctors. it is very hard to get the topical foams these days. And I think it is been something that doctors and patients have responded to extremely well. But we see growth across the board. As you mentioned, the 0.05, it continues to grow very nicely. I think that speaks to the unmet need for good 0.05 in the in the 3 to 24 month olds if we get the approval in February, as we expect. So we would expect, you continued growth across the portfolio in the second half of the year, primarily driven by demand growth We may see some marginal incremental improvements in gross to net, but I would not expect anything dramatic given the strength of our gross to nets already. At this point in the year. And, you know, I think as the year progresses, we are gonna start seeing the impact of a variety of initiatives that we have been talking about today. Know, the Durham expansion, I think we will see kick in the second half of the year. I think it is probably too early for primary care, but, you know, I think in 2027, we will see that. On the telehealth front, you know, I think the majority of these patients are going to have access to ZORYVE through their insurance coverage. And we have set up, with the platform to allow patients to go that route. So this is not like some of the other offerings out there today where the patient has to pony up the money themselves to pay for the product, like, you know, for example, the GLP ones. Here, the doctor it would be just like if the patient was going in the doctor's office and the doctor is diagnosing the patient. Choosing a therapy, And if they choose Zuriev and they do not have to choose Zuriev, but it is a it is a great choice for all 3 of these diseases. If they choose a reed, then that immediately kicks them into a work stream where we get the PA done, we get the insurance paying for this reap, and then we ship it to the patient. And so the cost of the patient for XEREV is no different than if they went to the dermatologist's office. Let's see. And then lastly, with regard to the transition, yeah, you know, Todd has built a very, very strong commercial leadership team. Know, I think just in the last 6 months, we have we have added Katie Swoss to run primary care effort. She's doing an outstanding job. We brought in, Chris, Clock from, from AbbVie to lead the sales team. So we have a really strong commercial team I am not the least bit worried about them managing our commercial performance through the transition. And, you know, Rob will be starting before Todd's departure so that there is a seamless transition between the 2 of them. And I could not think of a better person to be coming in and helping us only with Zaree, frankly, but with the pipeline as well, given Rob's background. And excited to get to work with him again. Seamus Fernandez: Great. Congrats. I will jump back in the queue. Operator: Thank you. And the next question will come from Tyler Van Buren with D. D. Cohen. Your line is open. Tyler Van Buren: Hey, guys. Thank you, and congrats on the solid quarterly performance. A couple. First, just would it be reasonable to expect a similar quarter over quarter sales growth for the ZORYVE franchise in Q3 over Q2 as compared to Q2 to over Q1 that we just saw. And then on vitiligo, given the upcoming data next quarter, right around the corner, can you talk more about enrollment and the demands you guys have seen at sites of and the demand for a topical option, and specifically, what data you want to see to move forward with this program and invest more. Todd Franklin Watanabe: Sure. Latha, you wanna take the first 1, and then maybe, Patrick, can you take the vitiligo question? Latha Vairavan: Yeah. I will take it. Sorry. I had to unmute myself. Hey, Tyler. Thanks for the question. So we expect continued quarter over quarter growth in our net sales. I would not anchor to you to any of this current quarterly run rate. I think you should anchor to the initiatives that we outlined. And with the guide that we have given and what we expect to happen in the quarter, I think you will be able to your way into what will happen in the second half of the year. I want to kind of give you the answer to the question on the growth rates, but we do expect quarter over quarter net sales growth Q3 versus Q2, and, of course, naturally, Q4 versus Q3. And as Frank alluded to, sort of moderate the gross to net improvement, so everything will be volume and demand based. Patrick E. Burnett: Yeah. And I can pick up the vitiligo study. So, as we mentioned, the vitiligo trial fully enrolled. We were really happy with the enrollment pace for that. Now keeping in mind that was in pediatric patients as well that are oftentimes more difficult to enroll. So I think that bodes well for kind of a future vitiligo program where that to materialize. And your question about what we are looking for. So, you know, I think the Opzelura really, you know, has set a bar for a branded nonsteroidal in vitiligo. But we think that there is a lot of room for us to compete there. Right? there is essentially 1 other drug in this category. We think that we have, in some ways, really a superior product profile. We are talking about once-a-day dosing, eligible for adjunctive use. We anticipate there will be some systemics that are gonna be moving into this space as well, especially for the more severe patients. So that would be something that we think would be advantageous. And then also no black box and then price. So these are a lot of the same features that make us very competitive in AD and our other indications as well. So we really feel like even if we have equivalence on efficacy and rate of onset, that we are going to be very competitive here based on those factors. But what we are really looking for is superiority on either of these 2 axes, especially on speed of onset. And 1 of the reasons we potentially believe that is because, the PD4 mechanism of action being based both on anti inflammatory as well as, potentially working directly on melanocytes. And the fact that the mechanism of action, we have really seen some brisk response based on being able to have such a potent PD4 inhibitor. So, the rate of effect is a place that we are also, optimistic, but we will have to obviously see those results when they come in at the end of the year. With the readout for that. Tyler Van Buren: Thank you. Operator: And the next question is going to come from Judah Frommer with Morgan Stanley. Your line is open. Judah Frommer: Yes. Hi, guys. Congrats on the quarter and thanks for taking the questions. Maybe could you provide a little more color on some trends in share of the branded topical non sterile class, maybe specifically on new to brand trends that you are seeing? And then separately, just curious on enrollment trends for the 4 trial. Obviously, crowded space, but it seems like new mechanisms are in demand. So just curious how enrollment is tracking there. Thanks. Todd Franklin Watanabe: Sure. Thanks, Jay. So with regard to trends in share, you know, ZORYVE continues to be the leading brand in nonsteroidal in the market. We are hovering just shy of 50% market share. And so, you know, ZORYVE is the primary product driving the growth of the class. And, you know, those are, as we talked about before, patients who are coming over from topical steroids. You know, I think we have really just scratched the surface. And if anything, given the discussions in dermatology, that trend is likely to accelerate going forward. You know, and the on the new to brand data, off the top of my head, I do not wanna miss folks to speak, so I do not have those, numbers right at my fingertips. But you know, clearly, ZORYVE is doing very well competitively versus the other brand in nonsteroidos, and we expect that to continue. And then with regard to the enrollment trends, Patrick, again, could you maybe address that? Patrick E. Burnett: Yeah. Absolutely. So just a reminder, for ARQ-34, we are exiting the healthy volunteer section of our single ascending dose. And we have a couple of cohorts that are, of the single dose, that are actually in atopic dermatitis, but otherwise healthy patients who also have atopic dermatitis. And so we are moving into those AD cohorts. And then we are also gonna be initiating recruitment into the first, multiple ascending dose, and those are all in atopic dermatitis patients. So we do not have any experience yet from this trial in enrolling atopic dermatitis patients. But I agree with your point that especially with the departure of OX40 from the kind of pipeline and competitive landscape here for atopic dermatitis patients, that a new mechanism of action is something that is going to be very beneficial for our recruitment And I think that this mechanism in particular, 1 where there is gonna be a lot of interest. So, you know, it is a competitive space. There is a lot that is going on, but I think that we are well positioned to be able to recruit these trials. Judah Frommer: Thanks. Operator: Thank you. And the next question will come from Uy Ear with Mizuho. Your line is open. Uy Ear: Hey guys, yes. Thanks for taking our question. Maybe just help us understand about the change in gross to net a little bit. I just wanna make sure I understood you guys correctly. I just know Wait. Sorry. Could you could you say that 1 more time? I did not catch your question. Yeah. I wanted to see if you can help us understand the change in gross to net a little bit as we go from this quarter to the Q3 and Q4. I, you know, I guess in the first quarter, you were saying to expect gross to net to go to the low fifties by towards the end of the year. Is that still the case, or is it more steady now? And my second question is, could you maybe elaborate a little more on the PD L1s study? Side effect study. Like, when do you expect it to finish? And what is the is that sort of a go-to--is there going to be a go to decision that you move into phase 3, or is it a study where you can publish and use the data to help with adoption? Thanks. Todd Franklin Watanabe: Okay. Alright. Thanks, Uy. Yeah. So, Latha, do you want to maybe take the gross-to-net question on our view on gross-to-net for the rest of the year? And then, Patrick, can you talk a little bit more about the PD-L1 study? Latha Vairavan: Okay. Hi, Uy. So we do expect the gross net to be in the 50s throughout the year and titrate down to the low fifties as we have said. We just think that the level of improvement will moderate. We started from a point that was lower than last year even though it was in the higher fifties. And I am sure your model will show you the improvement that we experienced in Q2. It will be some improvement in Q3 and Q4, not to the degree of last year. But it will come down to the low fifties. Uy Ear: Okay. Thanks. That was helpful. Patrick E. Burnett: Yeah. And then, Uy, just to kinda give a little more context to this study, you know, I think your question really is, is on point with trying to understand, you know, what we are looking for here. So you know, we really see this not as a, you know, necessarily a full development program, but really more of a way to create some data that can be helpful in order to ensure that patients may have access to this because there will be some data that will be published that will be out there. And we will give them another option. A lot of these patients are going into topical steroids as first line, and then they may need to be on them for many years. So I think having additional data really for this you know, patient population to keep them from having to abandon a therapy that is usually working for them. it is really just about publishing, getting access to it, and not necessarily a full development program. And so the timing of the study is 1 that, you know, will obviously keep you posted as we get further into it, but it is just getting started now. Uy Ear: Okay. Thank you. Operator: Thank you. And the next question will come from Andrew Tsai with Jefferies. Your line is open. Matt: Hey, good afternoon, and congrats on the quarter. This is Matt on for Andrew Tsai at Jefferies. And I just wanted to on the revised guidance you fundamentally talk about some of the push pulls behind the continued growth and acceleration? And are you aware of any other investigator sponsored or independent studies with ZORYVE that may be starting out over the next year? And then if so, like, you just talk about the market opportunities there for each of those indications? Todd Franklin Watanabe: Thanks for the question, Matt. So with regard to the first question, I think that in the second half of the year, the primary driver of growth is going to be growth in prescriptions. You know, as Latha just mentioned, we do expect to see some improvement in gross to net in Q3 and Q4. But probably moderated compared to what we saw in Q1 and Q2. and not be the major driver of growth And, you know, that demand growth is, you know, going to likely be a combination of the momentum that we already have generated and then the impact of a number of the commercial demand drivers that rolled out, like the Salesforce expansion, the continued DTC efforts, the virtual health platform that we just announced. You know, all of these things are really synergizing to help us continue to drive, growth of the prescription growth for ZORYVE. And then on your second question with regard to IITs, so we do not actually support a lot of investigator initiated trials at ArQudis. The IIT process is pretty clunky, to be quite honest. And our preference is to do what I refer to as collaborative research studies where the company is able to work with the investigators And a number of the studies that we mentioned, including the vitiligo trial, the HS trial, the nail psoriasis trial, the PD L1 trial that Patrick was just mentioning, those are all collaborative research studies. We, as I mentioned earlier in my comments, you know, we continue to explore other opportunities, other potential indications. And, you know, I think it is likely that we will start at least 1 more of these proof of concept studies this year for another indication. You know, maybe more. We have more options, probably, than we have resources. With, you know, 47 diseases having some efficacy data. And we are not gonna pursue all of them either. But I do think you will probably see 1 or more start this year, and we very well may start some additional studies next year as well. These are really cost and time efficient ways for us to get an evaluation of a potential indication and then enable us to make an informed decision about whether we wanna actually pursue a large registrational study for that indication. Patrick, I do not know. Patrick E. Burnett: Any additional comments that you would wanna add on that part? No. I think that I think that covers it, Frank. Matt: Thanks. I appreciate it. Operator: Thank you. Thank you. And our next question will come from Serge Belanger with Needham. Your line is open. Serge Belanger: Hey. Good afternoon, and congrats on a nice quarter. Couple questions around the virtual health platform effort. Are you trying to target a different set of patients than what you are currently able to access, and will it be able to drive patients to this platform via DTC efforts? And secondly, No. that is alright. Go ahead. I was going to ask, I believe I read that you were granted a couple of new patents -- I hope that was from your press release and not another 1 I read in the last hour. But just curious how they add to the ZORYVE patent portfolio and whether those new patents are eligible for the Orange Book. Todd Franklin Watanabe: Yeah. Okay. So with regards to your first question, yes, I do think of it as a different set of patients. Right? The bulk of the patients that we are picking up today, really almost all of them, right, are patients who have already been seen by a dermatologist and, you know, are coming in for a refill or an annual checkup or in many cases, they are flaring, because of, you know, their existing therapy is not working, and the doctor is looking to do something different for those patients. But that is a patient that is already in the dermatology care system, and, you know, has access to a dermatologist because they have an appointment. Right? You know, the advantage of the virtual health platform is you know, like, where I live, it is a 6-month wait to see a dermatologist. And even if you are in acute situation, I had I had shingles a number of years ago, and it was it was gonna be a month before I could see a dermatologist. When you have an urgent acute problem, you want to see someone, like, that day or the next day. Right? And that is just not practical in many places in The United States. Because of the mismatch between supply and demand of dermatology specialist care. Are also a lot of places in the country that just do not have dermatologists. Right? For example, you know, Patrick and I were in Roswell, New Mexico a couple years ago. there is a dermatologist in 1.95 thousand So, you know, for those patients, they just do not have that option to see a dermatologist. So we think that the virtual health platform is really gonna complement the patients who are already seeing a dermatologist by allowing patients who do not have access to a dermatologist either because of scheduling or geography to see a dermatologist that day. And yes, to your earlier question, absolutely, we think direct to consumer is an important driver here. You know, if you think about it, know, a patient sees an interview with Tori or Max Homa, they have the disease as well, and they think, gee, I wanna look into this more. You know, they can go right to our website. there is a click right on the homepage. You click on it, and it pulls you straight into the platform where the dermatologists sit. And the patient is able to schedule a visit with the dermatologist right then and there. So we think this is an important expansion of the opportunity set for ZORYVE particularly, again, given some of the idiosyncrasies of dermatology in The United States. And then on the new patents. Yeah. So there are 2 new patents, that cover, 1 is the formulation and the other 1 is method of use. I cannot say definitively, but it is likely that they are orange book listable. You know, we have a very, very strong patent position around all of these reformulations. We have, I think, 18 patents listed in the Orange Book at the moment. So, you know, we continue to incrementally strengthen our IP portfolio. You know, these are not dramatically differentiated. They do not change the loss of exclusivity. Timelines of 37 for the cream and 2042 for the foam. But, you know, we are always looking to strengthen that already strong IP portfolio and these 2 patents are just the product of that overall effort. Serge Belanger: Thank you. Operator: Thank you. And the next question is gonna come from Douglas Tsao with H. C. Wainwright. Your line is open. Douglas Tsao: Just following up on telehealth initiative, I am just curious, Frank, what the conversion rate from an initial online intake to a prescription for ZORYVE. Are patients still needing to sort of sometimes maybe do some kind of step edit, or had they typically gone through that already And have you seen evidence of patients sort of maybe going through sort of initial intake, maybe having because of their plan, needing to try a TCS and then coming back to ultimately still get a script for ZORYVE. Todd Franklin Watanabe: Sure. Yeah. Thanks, Doug. Great question. You know, it is still very early days. Right? So, you know, I think we will have to see over time what kinds of patients flow into the system and what happens. You know, I think a couple points. The first 1, again, is when the doctor when the dermatologist is evaluating the patient, the dermatologist can choose any therapy for that patient. It does not have to be ZORYVE, obviously. Right? We think ZORYVE is a great choice. But it does not have to be. And if the patient has something other than 1 of our approved indications, they are obviously gonna get something else. As well. You know, many, many patients are on a steroid or have used a topical steroid before. And I would expect that many of the patients that come in to into the telehealth platform will have been on a prior topical steroid and are looking for a nonsteroidal alternative. You know,, maybe they have heard, again, Max or Stella or Tory talk about their experiences and their frustrations. Maybe they are afraid of topical steroids based on what they have read about topical steroid risks, and they wanna look for something different. So I think that many of the patients coming in are likely to have already been on a topical steroid. And as I mentioned, we have the infrastructure in place to provide the insurance and fulfillment support for these telehealth patients that compares very favorably to what they would see if they went to a dermatologist's office. And so we are really looking at how we streamline this process whether you are seeing a dermatologist in person or you are seeing them online. Yeah. I think it is possible that some of the patients may end up needing step through another product if they are a new onset patient. But you know, even in that scenario with the issues related to topical steroids, those patients are likely to be coming back in the not too distant future to get XEREV after they have met the STEP requirement. Okay. Douglas Tsao: Okay. Great. that is really helpful. Thank you. Operator: And the next question will come from Richard Law with Goldman Sachs. Your line is open. Kehlani Usman: Hi, everyone. This is Kehlani Usman on for Richard Law. Thanks for taking our questions. The first 1 on the commercial front. As you guys think about launching the PCP and pediatric sales team for ZORYVE in the coming months, How many patients do you believe are not adequately referred to dermatologists from the PCPs and Pediatricians? So in other words, about how many patients do you think would be served by that new sales force? Todd Franklin Watanabe: Sure. Yeah. Very good question. So we know that about half of all patients with psoriasis, AD, and sebderm are not seen by a dermatologist. Right? that is very well-established in the data. The majority of those patients are sitting are being seen by either a primary care doctor or a pediatrician. You know, that is leaving aside patients who are not currently being actively treated. We do not really look at those patients because it is always difficult to mobilize patients who are not in the system. But of patients, currently receiving prescription therapy, about half of those patients are seen by non dermatologists, the overwhelming majority being, primary care and pediatricians. You know, with this initial sales force, you know, we are only calling on a fairly small chunk of the primary care and pediatric community. You know, as I mentioned in my prepared remarks earlier, we are focusing on very high volume doctors who have a proclivity to adopt new therapies in some cases, doctors who have actually written ZORYVE already. And we think that is where we are gonna get the fastest initial traction. And then as we evaluate and fine tune our approach, and get a sense of the return on investment from the primary care initiative, we will evaluate how large this primary care sales force should be, how far into primary care and pediatrics we reach. And that may evolve over time just as it did with the dermatology sales team as well. But early on, we will be focusing on a small piece of a very large pie You know, 1 of the statistics that we shared on a prior quarterly call is that you know, there is something like 500 thousand primary care providers in The United States. it is a massive And we are not going after 500 thousand providers, obviously. But it turns out that there are about 5% of those primary care doctors and pediatricians, so about 25 thousand doctors, write A third of all the topical scripts come out of primary care and pediatrics. So there is a very, very rich vein of potential in the primary care and pediatric community of highly concentrated, higher volume doctors and that is really where we are gonna be focusing our efforts initially and as we expand. Kehlani Usman: Okay. Really helpful. Thank you. And then 1 more on atopic specifically. How will the potential approval of ZORYVE in the infant 3 to 24 months, expand that market opportunity? And what types of prelaunch activities, if any, are you guys pursuing to support a strong uptake in that setting? Todd Franklin Watanabe: Yeah. So, we think it is going to be a very important catalyst. You know, there are about 1 million patients in that age group, the 3 to 24 month that have atopic dermatitis. So it is a large market. And, you know, the only things approved right now for 3 to 24 month olds are that 6 of the topical steroids are approved in that age group. And Eucrisa is approved in that age group. And that is it. So doctors are either having to treat patients, these infants off label or they are having to use 1 of those 7 drugs that is approved. And I think that is really why we are seeing so much excitement from the especially the pediatric dermatology community because they do not have very many options. They do not have good options, especially nonsteroidal. And, you know, they have all used ZORYVE already, and they know how good it is, and they are very excited to be able to use it in this very young population. And, you know, and Patrick can speak to this too, but the concerns around steroids, you the there are concerns around steroids for every patient, but they are particularly acute. This 3 to 24 month population. No parent wants to put their kid on steroids. Quite honestly. Right? And if we are able to offer a really effective and very safe and well tolerated non steroidal option to treat those patients, we think we are gonna see very, very meaningful uptake in that population. Patrick, anything that you would add to that? Patrick E. Burnett: Yeah. I mean, I think you are absolutely right. And what that kind of steroid avoidance leads to is some real challenges in you know? And I think the best place to see this is in the pediatric dermatology community. And, Frank, I know you were just at the Society for PDerm meeting. And even going back last year when we were there, there was already tremendous awareness of this study going on even before we had the data and an interest in getting it to their patients because of these very few treatment options. That Frank outlined. So now having the data out there, having it already been presented at the AAD, you know, the activities that we have are really sitting within the medical affairs team and just, you know, kind of, reacting to a lot of the questions and interest in what do our data show, how is this similar or different to what we have with the ages 2 and above particularly in atopic dermatitis, and just really making sure that everybody is getting their questions answered as we kind of prepare and move towards that launch in the beginning of next year. Kehlani Usman: Makes sense. Thank you. Operator: Thank you. I show no further questions in the queue at this time. I will now turn the call back to Frank for closing remarks. Todd Franklin Watanabe: Okay. And before I close, this is real time service here. Serge, I have an answer to your question and a correction. I must state that we have 28 patents. Not 18 patents on ZORYVE. Maas, our general counsel, corrected me. And he did confirm that both of these new patents are also Orange Book listable. So I wanted to clarify that. So, Yeah. Listen, another I another great quarter. Really appreciate everyone taking your time to call in today. I know it is a very, very busy time of the year with everyone doing quarterly results, and we appreciate your time and attention and all the great questions. And we look forward to, talking to everyone again at, the Q3 call. Thanks. Bye. Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Before you buy stock in Arcutis Biotherapeutics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arcutis Biotherapeutics wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Arcutis (ARQT) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Todd Watanabe, president and CEO of Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) sold 4,375 shares on Aug. 3, 2026, according to a recent SEC Form 4 filing. Transaction value based on SEC Form 4 weighted average sale price ($26.12); post-transaction value based on Aug. 3, 2026, market close ($25.94). What was the motivation behind this disposition of shares?The sale was non-discretionary, executed solely to satisfy tax withholding requirements associated with the vesting of Restricted Stock Units. This type of transaction is routine and does not typically signal a shift in management's sentiment regarding the company's valuation or prospects. How is the insider's indirect ownership structured?The ~233,000 shares held indirectly are distributed across multiple vehicles, including The John Franklin Watanabe Trust, The Anderson Prest Watanabe Irrevocable Trust, and The Watanabe 2016 Irrevocable Trust, as well as an entity called Watanabe Ventures, LLC. Todd Watanabe disclaims beneficial ownership of these securities except to the extent of his pecuniary interest. What is the current scale of the insider's alignment with the company?Despite the recent sale, the insider retains a significant interest in Arcutis, holding more than 950,000 total shares. This position was valued at $24.65 million as of the Aug. 3, 2026, market close, and the stock has delivered an 82% return over the 12 months ending on the transaction date. Are there other share classes that impact the ownership profile?Arcutis has not reported other share classes for this insider in the current filing. The reported holdings consist entirely of common stock, providing a clear view of the insider's direct and indirect exposure to the company's equity performance. Arcutis Biotherapeutics develops and commercializes innovative topical biopharmaceutical therapies for dermatological conditions, with its flagship product ARQ-151 (roflumilast cream), approved for treating plaque psoriasis and atopic dermatitis, generating the majority of the company's revenue. The company operates a biopharmaceutical business model focused on the development, regulatory approval, and commercialization of proprietary dermatology therapies, leveraging its expertise in topical formulations and immunomodulatory compounds. Arcutis primarily serves dermatologists and their patients in the United States, targeting individuals with chronic inflammatory skin conditions, including psoriasis, atopic dermatitis, and other related dermatological disorders. Arcutis Biotherapeutics is a specialized biopharmaceutical company with a market capitalization of $3.3 billion, operating with 354 employees and generating $415.62 million in TTM revenue. The company has established a focused pipeline of topical therapies for dermatological indications, with ARQ-151 representing its primary commercial asset. President and CEO Todd Watanabe’s 4,300-share sale was executed to cover tax withholding obligations connected to the vesting of restricted stock units. It’s a good reminder for investors that sometimes company insiders make portfolio moves that don’t necessarily align with their conviction in or knowledge of the company’s future. The biopharmaceutical company released its earnings results for the second quarter of 2026 on Aug. 5. Its leading product, roflumilast, marketed as Zoryve, grew revenue in the quarter by 59% to $129.9 million on strong demand growth, and the company received approval to expand the indication for a version of the product to treat plaque psoriasis in children down to the age of 2. It’s the seventh FDA approval in four years, the company says, an impressive track record in a competitive and difficult-to-navigate regulatory market. The company just recently became profitable, reporting net income of $15 million in the quarter, or $0.11 per share, compared to a net loss of $15.9 million ($0.13 per share) in the year-ago period, and maintained positive operating cash flow for the quarter. Arcutis raised its full-year 2026 net product sales guidance to $525 million to $540 million. Interested investors should continue to monitor the growing indications for Zoryve, including infants, for which the FDA granted a Supplemental New Drug Application, and individuals with vitiligo, which remains in clinical testing. Aructis stock is up nearly 90% year over year, but is down 6% year to date as of Aug. 6. Before you buy stock in Arcutis Biotherapeutics, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Arcutis Biotherapeutics wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $396,758!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,300,820!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 6, 2026. Sarah Sidlow has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Arcutis President and CEO Todd Watanabe Sells 4,375 Shares for $114,275 as Q2 Results Demonstrate Profitability was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Revenue growth of 59% year-over-year was primarily driven by robust patient demand and sustained momentum across the ZORYVE franchise, particularly in the foam formulation. Management attributed the strong performance to the successful conversion of patients from topical steroids to advanced non-steroidal therapies as safety concerns regarding chronic steroid use evolve. The company completed its dermatology sales force expansion in May and expects to see the full impact of these additional representatives beginning in the third quarter of 2026. A new primary care and pediatric sales team has been hired to target high-volume providers, aiming to capture the approximately 50% of patients with inflammatory skin diseases who are not seen by specialists. The launch of a virtual health platform and AI-enabled prescription tools is intended to reduce barriers to care, such as long dermatology wait times and geographic limitations. Gross-to-net (GTN) rates remained stable in the 50s, with management noting that improvements in GTN contributed to the year-over-year revenue increase alongside volume growth. Full-year 2026 sales guidance was raised to $525 million–$540 million, reflecting momentum from the first half and anticipated contributions from new commercial initiatives. Management expects quarter-over-quarter net sales growth to continue through the end of the year, primarily driven by volume rather than dramatic changes in gross-to-net rates. The company anticipates a PDUFA date of February 23, 2027, for ZORYVE cream in infants down to 3 months, which would address a significant treatment gap in the pediatric market. Strategic reinvestment of cash flow into demand generation and pipeline expansion is expected to drive a further sales inflection in 2027 and beyond. Management plans to maintain positive cash flow for the remainder of the year while evaluating external assets to build the pipeline beyond the ZORYVE franchise. Chief Commercial Officer Todd Edwards is resigning for personal reasons; Rob Lisicki, a veteran biopharma executive, will serve as interim CCO during a national search. The company added two new patents to the ZORYVE portfolio, bringing the total to 28, both of which are expected to be Orange Book listable. Net income reached $15 million for the quarter, a significant shift from the $15.9 million loss in the prior year, as top-line growth outpaced expense increases. Arcutis is initiating a trial to evaluate ZORYVE's impact on cutaneous adverse events in cancer patients receiving checkpoint inhibitors, targeting a population where 50% experience skin side effects. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Growth is expected across the entire portfolio, with the foam formulation remaining a leading differentiator as the only non-steroidal foam available. The guidance raise reflects momentum already seen in the first half plus the expected impact of the dermatology sales force expansion hitting in Q3. Management is looking for superiority in speed of onset or efficacy compared to existing branded non-steroidals, leveraging ZORYVE's potent PDE4 inhibition. The Phase 2 trial is fully enrolled, including pediatric patients, with a data readout and 'go/no-go' decision expected in Q4 2026. The platform is designed to complement traditional care by reaching patients who face 6-month wait times or live in areas with no dermatology specialists. Pricing for patients remains consistent with traditional office visits, as the platform utilizes existing insurance coverage and a national pharmacy hub for fulfillment. The company is targeting a 'rich vein' of approximately 25,000 high-volume primary care and pediatric providers who write one-third of all topical prescriptions. This targeted approach is intended to maximize ROI before considering further expansion into the broader 500,000-provider primary care market.

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Arcutis Biotherapeutics Inc (NASDAQ:ARQT) reported strong Q2 2026 net product revenues of $129.9 million, a 59% increase year-over-year and a 23% sequential increase, driven by robust patient demand. The company raised its full-year 2026 sales guidance to $525-$540 million, reflecting strong momentum and confidence in continued growth. Received FDA approval for Zoryve Cream 0.3% in plaque psoriasis for children as young as 2, addressing a significant treatment gap and expanding the addressable patient population. FDA accepted the supplemental NDA for Zoryve Cream 0.05% in atopic dermatitis for infants down to 3 months, with a PDUFA date in February 2027, potentially opening a large new market. The company achieved positive net income of $15 million and positive operating cash flow of $12.6 million, demonstrating financial strength and sustainability. Launched a virtual health platform and AI-enabled prescription workflow partnership to improve patient access and streamline the prescription process, which could drive additional growth. Completed enrollment in the Phase 2 vitiligo trial and continues to advance the pipeline, including ARQ-234, a novel biologic for atopic dermatitis. Expanded commercial infrastructure with a completed dermatology sales force expansion and a new primary care/pediatric sales team, expected to drive growth in 2027. Zoryve maintains a leading market share of nearly 50% in the branded non-steroidal topical class, with strong prescription growth across all indications. The company has a strong patent portfolio with 28 Orange Book-listed patents, providing long-term protection for its products. Gross-to-net rates remain in the 50s, with only modest improvements expected in the second half of the year, limiting potential margin expansion. The company anticipates that the primary care and pediatric sales force will not contribute meaningfully to growth until 2027, delaying potential upside. The resignation of Chief Commercial Officer Todd Edwards introduces leadership transition risk, despite the appointment of an experienced interim CCO. The company faces intense competition in the atopic dermatitis and vitiligo markets, with established players like Opzelura setting high benchmarks. The Phase 2 vitiligo trial results are not expected until Q4 2026, and the HS trial readout is not until Q1 2027, creating uncertainty about pipeline expansion. The company's reliance on external innovation and deal flow for pipeline growth may not materialize as expected, given the competitive landscape. The virtual health platform is still in early stages, and its impact on sales is uncertain, with no clear conversion metrics yet. The company's SG&A expenses increased 19% year-over-year due to sales force expansion, which could pressure profitability if revenue growth slows. The potential approval for the infant indication is not until February 2027, leaving a gap before this market opportunity can be captured. The company's guidance raise may not be sustainable if demand growth moderates, and management has indicated they do not plan to update guidance quarterly, which could lead to disappointment. Warning! GuruFocus has detected 5 Warning Signs with DIOD. Is ARQT fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more color on the key drivers of growth for the back half of 2026, particularly regarding the momentum of the foam and 0.05% cream, the impact of the new telehealth platform, and the transition following Todd Edwards' resignation?A: Frank Watanabe (President and CEO): We expect continued growth across the portfolio, primarily driven by demand. The foam remains our leading, highly differentiated product, and the 0.05% cream is growing nicely, pointing to the unmet need for non-steroidals in younger kids. We anticipate the dermatology sales force expansion to contribute in the second half, while the primary care impact will be more visible in 2027. Regarding telehealth, the majority of patients will access Zoryve through their insurance, with the cost to the patient being no different than a traditional dermatologist visit. On the transition, Todd has built a strong commercial leadership team, and Rob Lisicki will start before Todd's departure to ensure a seamless handoff. Q: Given the upcoming vitiligo data readout, what did you see in terms of enrollment and demand, and what specific data would you need to see to advance the program?A: Patrick Burnett (Chief Medical Officer): The vitiligo trial is fully enrolled, and we were very happy with the enrollment pace, especially considering it included pediatric patients. Opzelura has set a bar, but we believe we have a superior profile with once-daily dosing and no boxed warning. We are looking for superiority on efficacy or, especially, speed of onset, given the PD-4 mechanism's potential to work directly on melanocytes. We will have the readout at the end of the year. Q: Can you elaborate on the trends in market share for the branded topical non-steroidal class, and how is enrollment tracking for the ARQ-234 trial?A: Frank Watanabe (President and CEO) & Patrick Burnett (Chief Medical Officer): Zoryve continues to be the leading branded non-steroidal, hovering just shy of 50% market share, and is the primary driver of class growth, converting patients from topical steroids. For ARQ-234, we are exiting the healthy volunteer portion of the single ascending dose (SAD) and moving into atopic dermatitis patient cohorts, and we will soon initiate the multiple ascending dose (MAD) portion. We believe the unique mechanism of action will be beneficial for recruitment in a competitive space. Q: Can you help us understand the expected change in gross-to-net for Q3 and Q4, and what is the goal of the newly initiated PD-1/PD-L1 checkpoint inhibitor study?A: Lata Vairavan (CFO) & Patrick Burnett (Chief Medical Officer): We expect gross-to-net to remain in the 50s throughout the year, titrating down to the low 50s, but the level of improvement will moderate compared to the first half. Regarding the PD-1/PD-L1 study, we see this not as a full development program but as a way to generate publishable data to help ensure patients have access to Zoryve for managing cutaneous adverse events, potentially helping them persist with their cancer therapy. Q: What are the primary push-pulls behind the revised revenue guidance, and are there any other investigator-sponsored or independent studies with Zoryve that could start over the next year?A: Frank Watanabe (President and CEO): The primary driver of growth in the second half will be prescription growth, fueled by existing momentum and new commercial initiatives like the sales force expansion, DTC efforts, and the virtual health platform. We prefer collaborative research studies over traditional IITs. We have more options than resources, with 47 diseases showing efficacy data, and we anticipate starting at least one or more additional proof-of-concept studies this year for other indications. Q: Is the virtual health platform targeting a different set of patients than you currently access, and can you drive patients to it via DTC efforts? Also, can you comment on the new patents granted?A: Frank Watanabe (President and CEO): Yes, the platform targets patients who are not currently in the dermatology care system, such as those facing long wait times or living in areas without dermatologists. It complements, rather than replaces, in-office care. DTC efforts are a key driver, as patients can click directly from our website to schedule a visit. Regarding the patents, we have two new ones covering formulation and method of use, which are likely Orange Book listable. We have a strong IP portfolio with 28 patents (corrected from 18) on Zoryve, and these don't change the loss of exclusivity timelines (2037 for cream, 2042 for foam). Q: What is the conversion rate from initial online intake to a prescription for Zoryve on the telehealth platform, and are patients needing to step through other therapies?A: Frank Watanabe (President and CEO): It is still very early days. The dermatologists on the platform can choose any therapy, but we believe Zoryve is a great choice. Many patients coming in will have already been on a topical steroid and are seeking a non-steroidal alternative. We have the infrastructure to provide insurance and fulfillment support. Some new-onset patients may need to step through another product, but they are likely to return to Zoryve after meeting the requirement. Q: How many patients are not adequately referred to dermatologists from PCPs and pediatricians, and how will the potential approval of Zoryve in infants (3-24 months) expand the market opportunity?A: Frank Watanabe (President and CEO): About half of all patients with psoriasis, AD, and seborrheic dermatitis are not seen by a dermatologist, with the majority seen by PCPs or pediatricians. We are targeting a small, high-volume group of about 25,000 doctors who write a third of all topical scripts from primary care. For the infant indication, there are about a million patients aged 3-24 months with AD, and currently only topical steroids and Eucrisa are approved. This is a large unmet need, and we expect meaningful uptake given the excitement from the pediatric dermatology community. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Arcutis Biotherapeutics, Inc. (ARQT) came out with quarterly earnings of $0.11 per share, beating the Zacks Consensus Estimate of $0.09 per share. This compares to a loss of $0.13 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +22.22%. A quarter ago, it was expected that this company would post a loss of $0.02 per share when it actually produced a loss of $0.09, delivering a surprise of -350%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Arcutis Biotherapeutics, which belongs to the Zacks Medical - Biomedical and Genetics industry, posted revenues of $129.86 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 6.57%. This compares to year-ago revenues of $81.5 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Arcutis Biotherapeutics shares have lost about 10.4% since the beginning of the year versus the S&P 500's gain of 13%. While Arcutis Biotherapeutics has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Arcutis Biotherapeutics was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.05 on $126.8 million in revenues for the coming quarter and $0.16 on $501.85 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Biomedical and Genetics is currently in the top 44% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Insmed (INSM), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This biopharmaceutical developing inhaled treatments for patients battling rare lung diseases is expected to post quarterly loss of $0.69 per share in its upcoming report, which represents a year-over-year change of +59.4%. The consensus EPS estimate for the quarter has been revised 4.8% lower over the last 30 days to the current level. Insmed's revenues are expected to be $389.72 million, up 262.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arcutis Biotherapeutics, Inc. (ARQT) : Free Stock Analysis Report Insmed, Inc. (INSM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Continued strong ZORYVE® (roflumilast) net product revenue growth, with Q2 revenues of $129.9 million, +59% versus Q2 of 2025, and +23% versus Q1 of 2026, driven primarily by strong demand growth Company raising 2026 full-year net product sales guidance to $525 million–$540 million Received approval to expand the indication for ZORYVE cream 0.3% for the topical treatment of plaque psoriasis to children down to the age of 2, the seventh FDA approval in four years FDA accepted sNDA for ZORYVE cream 0.05% to expand indication to include infants with mild to moderate atopic dermatitis aged 3 to 24 months and set target action date of February 23, 2027 Completed enrollment of the Phase 2 trial of ZORYVE foam 0.3% in individuals with vitiligo with disclosure of topline results and decision on program advancement anticipated in Q4 of 2026 Launched a virtual health platform and a partnership with a leading AI-enabled healthcare platform to help facilitate access to ZORYVE Maintained positive operating cash flow for the quarter WESTLAKE VILLAGE, Calif., Aug. 05, 2026 (GLOBE NEWSWIRE) -- 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 June 30, 2026, and provided a business update. “Our strong second quarter results reflect the continued strength of the ZORYVE franchise, the leading branded non-steroidal therapy across our three indications. With our investment in expanding our dermatology sales force and initiatives designed to simplify patient access, we are well positioned to drive continued growth and momentum through the second half of 2026,” said Frank Watanabe, president and chief executive officer. “During the quarter, we also made significant progress in advancing our pipeline, highlighted by the FDA acceptance of our sNDA for ZORYVE cream 0.05% for infants with atopic dermatitis and completion of enrollment in our Phase 2 vitiligo study.” Second Quarter 2026 Financial Results and Business HighlightsCommercial HighlightsZORYVE — a highly potent and selective phosphodiesterase-4 (PDE4) inhibitor in once-daily cream and foam formulations, approved in the United States and Canada for the treatment of plaque psoriasis, atopic dermatitis, and seborrheic dermatitis. ZORYVE net product sales for the second quarter of 2026 were $129.9 million, reflecting 59% year-over-year growth and a 23% sequential increase versus the first quarter of 2026. The sequential increase was primarily driven by increasing demand across products as well as improved gross-to-net (GTN) pricing. Launched multiple initiatives to improve patient access to ZORYVE. The virtual health platform offers an additional pathway to care for individuals living with chronic inflammatory skin diseases by connecting eligible individuals with independent, board-certified dermatologists through a streamlined digital experience for evaluation and to discuss potential treatment options. The Company also formed a new partnership with a leading AI-enabled healthcare platform to streamline the ZORYVE experience within provider workflows, and to support medication access. Completed hiring of a targeted sales team dedicated to primary care and pediatric healthcare providers with the launch into the field anticipated by the end of August. Clinical and Regulatory Developments The Company received U.S. Food and Drug Administration (FDA) approval of the Supplemental New Drug Application (sNDA) for ZORYVE cream 0.3% for the expanded indication to treat children with plaque psoriasis down to the age of 2 in June 2026, representing the seventh FDA approval for the Company since 2022. The FDA accepted an sNDA for ZORYVE cream 0.05% to expand the indication for the treatment of mild to moderate atopic dermatitis in infants aged 3 to 24 months with a Prescription Drug User Fee Act (PDUFA) target action date of February 23, 2027. The Company completed enrollment of the Phase 2 proof-of-concept study with ZORYVE foam 0.3% for the treatment of vitiligo and continues to enroll patients in the Phase 2 proof-of-concept studies of ZORYVE foam 0.3% for the treatment of hidradenitis suppurativa. The Company expects to report results, as well as decisions on program advancement in these indications, in the fourth quarter of 2026 and first quarter of 2027, respectively. The Company continues to enroll patients in the Phase 1a/1b, first-in-human study to evaluate safety and tolerability of investigational ARQ-234, a fusion protein that is a potent and highly selective checkpoint agonist of the CD200 receptor, in healthy volunteers and adults with moderate to severe atopic dermatitis. Corporate Updates Appointed Chris Peetz, president, CEO, and founder of Mirum Pharmaceuticals, to the Board of Directors in July 2026. Sustained positive cash flow, generating $12.6 million of cash flow from operating activities in the second quarter of 2026. The Company obtained two new U.S. patents in the third quarter of 2026, including a new method of use and a new formulation patent. Second Quarter 2026 Summary Financial ResultsProduct revenues for the quarter ended June 30, 2026 were $129.9 million compared to $81.5 million for the corresponding period in 2025. Revenues for the quarter were $35.3 million for ZORYVE cream 0.3%, $24.2 million for ZORYVE cream 0.15%, $2.9 million for ZORYVE cream 0.05%, and $67.4 million for ZORYVE foam 0.3%. The year-over-year increase was primarily due to increased unit demand as well as improvements in GTN deductions. Cost of sales for the quarter ended June 30, 2026 was $10.9 million compared to $7.5 million for the corresponding period in 2025, due to increasing ZORYVE sales. Research and development (R&D) expenses for the quarter ended June 30, 2026 were $20.4 million compared to $19.5 million for the corresponding period in 2025. Expenses remained consistent year-over-year as increased development costs for ARQ-234 and investment in medical affairs to support medical education were partially offset by decreased development costs for roflumilast in pediatric atopic dermatitis. Selling, general, and administrative (SG&A) expenses for the quarter ended June 30, 2026 were $82.1 million compared to $69.2 million for the corresponding period in 2025. The year-over-year increase was primarily driven by increased personnel costs, including from the dermatology sales force expansion to support our continued commercialization efforts for ZORYVE. Net income was $15.0 million, or $0.11 per basic and diluted share, for the quarter ended June 30, 2026 compared to a net loss of $15.9 million, or $0.13 per basic and diluted share, for the corresponding period in 2025 as continued sales growth exceeded increases in operating expenses. Cash, cash equivalents, restricted cash, and marketable securities were $238.9 million as of June 30, 2026, compared to $221.3 million as of December 31, 2025. Net cash provided by operating activities was $12.6 million during the second quarter. Financial GuidanceThe Company raised net product sales guidance for the full year 2026 from $480 million–$495 million to $525 million–$540 million. Conference Call and WebcastArcutis management will host a conference call and webcast today at 4:30 p.m. 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 Company's website following the call. About Arcutis Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT) is a commercial-stage medical dermatology company delivering meaningful innovation to address the needs of individuals living with chronic inflammatory skin diseases. Over the past decade, Arcutis has successfully developed a robust portfolio of advanced targeted topicals approved to treat three major inflammatory skin diseases, driven by a commitment to solving the most persistent patient challenges in dermatology. Arcutis’ unique dermatology development platform, built on established scientific pathways and coupled with deep clinical dermatology and commercial expertise, enables us to efficiently develop, scale, and deliver our differentiated therapies while advancing a growing pipeline across a range of inflammatory dermatological conditions. For more information, visit www.arcutis.com or follow Arcutis on LinkedIn, Facebook, Instagram, and X. Forward Looking StatementsThis press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. For example, 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 to address large markets with significant unmet need; the development, submission, and potential approval, and potential commercialization of product candidates and expanded indications; the potential commercial success and growth of ZORYVE in plaque psoriasis, atopic dermatitis, and seborrheic dermatitis; improvement of patient access to ZORYVE through multiple commercial initiatives; anticipated net product sales for 2026; the expansion of the Company's dermatology sales force and the success of the Company's efforts in primary care and pediatric healthcare providers; the Company's ability to maintain positive operating cash flow on a quarterly basis; the building and advancement of the Company's pipeline; and the timing of regulatory filings. 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 25, 2026, as well as any subsequent filings with the SEC. Any forward-looking statements that the Company makes in this press release are made pursuant to the Private Securities Litigation Reform Act of 1995, as amended, and speak only as of the date of this press release. Except as required by law, 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 [email protected] InvestorsBrian Schoelkopf, head of Investor [email protected]

Interested in Arcutis Biotherapeutics, Inc.? Here are five stocks we like better. Strong financial performance: Arcutis reported Q2 2026 net product revenue of $129.9 million, up 59% year over year, and swung to $15 million in net income. The company raised its full-year revenue guidance to $525 million–$540 million. ZORYVE demand continues to expand: The treatment generated more than 280,000 prescriptions in the quarter, while expanded dermatology, primary-care and pediatric sales efforts are expected to support future growth. ZORYVE also received FDA approval for plaque psoriasis in children as young as 2, and its infant atopic dermatitis application has a February 2027 action date. Pipeline advances alongside leadership change: Arcutis fully enrolled its Phase 2 vitiligo trial, continued studies in hidradenitis suppurativa and advanced early testing of ARQ-234. Chief Commercial Officer Todd Edwards is departing, with Rob Lisicky serving as interim successor during a national search. 3 Biotech Catalysts Present Major Opportunity Arcutis Biotherapeutics (NASDAQ:ARQT) reported second-quarter 2026 net product revenue of $129.9 million, up 59% from the prior-year period and 23% sequentially, as demand for its ZORYVE topical treatments continued to rise across approved dermatology indications. The company generated net income of $15 million, compared with a net loss of $15.9 million a year earlier. Arcutis ended the quarter with $238.9 million in cash and marketable securities, produced $12.6 million in operating cash flow, and reported total debt of $101.9 million. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Chief Executive Officer Frank Watanabe said the company’s commercial momentum and cash generation allow it to reinvest in ZORYVE demand-generation programs, additional clinical studies and pipeline development. Arcutis raised its full-year 2026 net revenue guidance to $525 million to $540 million, from its prior range of $480 million to $495 million. Arcutis said it recorded more than 280,000 ZORYVE prescriptions during the second quarter across formulations and indications, representing a quarterly high for demand. Watanabe said prescription growth is expected to remain the primary driver of sales expansion, with gross-to-net deductions expected to improve more modestly through the remainder of 2026 and trend toward the low 50% range. → 3 Drone Stocks That Should Soar After the Summer Slump The company said ZORYVE, a topical PDE4 inhibitor, remains the leading branded nonsteroidal topical product, with market share just below 50%, according to management. Watanabe attributed class growth largely to patients shifting from topical corticosteroids to targeted nonsteroidal therapies. Arcutis has completed an expansion of its dermatology sales force, with new specialty representatives in the field since early May. Management expects the impact of that effort to begin appearing in growth during the third quarter. The company also completed hiring for the first phase of a targeted primary-care and pediatric sales organization, which is expected to begin calling on providers by the end of August. Arcutis expects that team’s impact to be more evident in 2027. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure The primary-care effort will initially focus on high-volume and early-adopting providers in metropolitan areas. Watanabe said approximately half of patients receiving prescription treatment for psoriasis, atopic dermatitis and seborrheic dermatitis are not seen by dermatologists, with most of those patients treated by primary-care physicians or pediatricians. During the quarter, the FDA approved ZORYVE cream 0.3% for plaque psoriasis in children as young as 2 years old. Arcutis said the decision represents its seventh FDA approval for ZORYVE in four years and makes the product the first once-daily steroid-free treatment approved for plaque psoriasis in that age group. In July, the FDA accepted the company’s supplemental new drug application for ZORYVE cream 0.05% for mild-to-moderate atopic dermatitis in infants aged 3 months to 24 months. The agency set a Prescription Drug User Fee Act action date of Feb. 23, 2027. Watanabe said there are roughly 1 million atopic dermatitis patients in that age range and limited approved treatment options, particularly nonsteroidal ones. Arcutis also launched a virtual health platform intended to give patients another route to dermatology care, particularly in regions with limited specialist availability or long appointment wait times. Independent board-certified dermatologists on the platform evaluate patients and make prescribing decisions independently, according to the company. If ZORYVE is prescribed, fulfillment is coordinated through a national pharmacy hub that provides insurance support and home delivery. The company also began a partnership with an unnamed AI-enabled prescription workflow platform in late July. The program is designed to help dermatology practices manage prior authorizations, financial assessments and fulfillment routing after a prescription is written. Chief Medical Officer Patrick Burnett said Arcutis fully enrolled its Phase 2 proof-of-concept trial of ZORYVE in vitiligo and expects results, along with a decision on whether to advance the program, in the fourth quarter of 2026. The company continues to enroll Phase 2 studies in hidradenitis suppurativa and expects a comparable program update in the first quarter of 2027. Management said it plans to initiate one or more additional ZORYVE proof-of-concept studies in the second half of 2026. New studies initiated during the second quarter include an adult trial assessing the product’s impact on itch in atopic dermatitis, a study in nail psoriasis, and a trial evaluating cutaneous adverse events among cancer patients treated with PD-1 or PD-L1 checkpoint inhibitors. Burnett said the checkpoint-inhibitor study is primarily intended to generate publishable data that could support patient access, rather than serve as a full registrational development program. For ARQ-234, Arcutis’ investigational CD200R-targeting biologic for moderate-to-severe atopic dermatitis, the company completed enrollment in the final healthy-volunteer cohort of the single-ascending-dose portion of its Phase 1 trial. It has begun enrolling atopic dermatitis patients in the remaining single-ascending-dose cohorts and plans to begin the multiple-ascending-dose portion. Arcutis said it will not disclose results until the trial is complete. Arcutis announced that Chief Commercial Officer Todd Edwards will resign later this month to pursue other opportunities for personal reasons. Watanabe credited Edwards with helping build the commercial infrastructure supporting ZORYVE’s launch and growth. Rob Lisicky will become interim chief commercial officer while Arcutis conducts a national search for a permanent successor. Lisicky most recently served as chief executive officer of Zura Bio and previously held chief commercial officer roles at Arena Pharmaceuticals and Daiichi Sankyo USA. Arcutis Biotherapeutics is a clinical-stage biopharmaceutical company focused on developing and commercializing innovative therapies for immuno-inflammatory skin diseases. The company's research and development efforts center on targeted treatments that address the underlying biology of conditions such as plaque psoriasis, atopic dermatitis, seborrheic dermatitis and vitiligo. Arcutis employs a precision-medicine approach to deliver topical therapies designed to improve efficacy and tolerability compared with existing treatment options. In August 2022, Arcutis received U.S. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Arcutis Biotherapeutics Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Viatris VTRS, a global healthcare company, is scheduled to report second-quarter 2026 results on Aug. 6, before the opening bell. The Zacks Consensus Estimate for second-quarter revenues is pegged at $3.68 billion, while the same for earnings is pinned at 62 cents per share. The company reports under four segments based on geography — Developed Markets, Emerging Markets, Japan, Australia and New Zealand (“JANZ”) and Greater China. Developed Markets sales are expected to rise, though growth in North America may be tempered by the Indore manufacturing facility import alert. Solid growth in EpiPen, Creon and Viatris’ thrombosis portfolio is likely to have enabled it to partially absorb the anticipated competition for Dymista. Incremental revenues from new products, such as iron sucrose, are likely to have boosted the quarterly top line. Following an inspection of Viatris' oral finished dose manufacturing facility in Indore, India, in June 2024, the company received a warning letter and import alert from the FDA in December 2024. The import alert affected 11 actively distributed products, including lenalidomide and everolimus. The Zacks Consensus Estimate for revenues from Developed Markets is pinned at $2.18 billion. Sales from Emerging Markets are expected to have experienced growth, driven by branded business in Turkey, Mexico and certain Asian markets. The generic business is likely to have seen growth due to the stabilization of supply for certain lower-margin ARB products. The Zacks Consensus Estimate for revenues from this geography is pegged at $558.5 million. Viatris shares have surged 41.6% year to date against the industry’s 1.1% decline. Image Source: Zacks Investment Research Sales in JANZ are likely to have been adversely impacted by lower net sales of existing products in Japan and Australia due to government price reductions and additional competition. The Zacks Consensus Estimate for revenues from the JANZ markets is pinned at $285.1 million. Sales in Greater China might have increased due to strong growth across multiple channels, including e-commerce, retail and private hospitals, as a result of higher marketing and selling efforts. The Zacks Consensus Estimate for revenues from this geography is pegged at $631.7 million. Viatris also reports revenues under two divisions (in terms of product category) — brands and generics. The brand business comprises the majority of the company’s portfolio. Brand performance is likely to have benefited from strong performance in Greater China and Emerging Markets, in addition to growth in certain key brands in Developed Markets. However, the generics business is likely to have been negatively impacted by inspection at the Indore facility and competition for Wixela, partially offset by continued growth in Yupelri and Breyna in North America, strong performance across key European markets, and slight volume growth in JANZ. On the profitability front, gross margin is likely to have been stable. Total operating expenses in the second quarter of 2026 are likely to have declined as a result of the planned cost-saving initiatives. Viatris’ earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 10.04%. In the last reported quarter, VTRS beat on earnings by 13.46%. Our proven model does not conclusively predict an earnings beat for VTRS this time around.  The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below. Earnings ESP:Viatris has an Earnings ESP of -0.81% as the Most Accurate Estimate of 61 cents per share is just shy of the Zacks Consensus Estimate of 62 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter. Zacks Rank:VTRS currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here. Viatris Inc. price-consensus-eps-surprise-chart | Viatris Inc. Quote Here are some stocks worth considering from the healthcare space, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle. ACADIA Pharmaceuticals ACAD has an Earnings ESP of +25.00% and a Zacks Rank #2 at present. Shares of ACAD have lost 4.1% year to date. The company’s earnings beat estimates in three of the trailing four quarters and missed on the remaining occasion, delivering an average surprise of 20.83%. Acadia is scheduled to report second-quarter results on Aug. 4, after market close. Arcutis Biotherapeutics ARQT has an Earnings ESP of +52.94% and a Zacks Rank #2 at present. Shares of ARQT have lost 10.7% year to date. The company’s earnings beat estimates in three of the trailing four quarters but missed in the remaining quarter, delivering an average surprise of 42.78%. ARQT is scheduled to report second-quarter results on Aug. 5. BridgeBio Pharma BBIO has an Earnings ESP of +13.69% and a Zacks Rank #3 at present. Shares of BBIO have risen 4.5% year to date. BridgeBio Pharma’s earnings missed estimates in each of the trailing four quarters, delivering an average negative surprise of 18.94%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Viatris Inc. (VTRS) : Free Stock Analysis Report ACADIA Pharmaceuticals Inc. (ACAD) : Free Stock Analysis Report BridgeBio Pharma, Inc. (BBIO) : Free Stock Analysis Report Arcutis Biotherapeutics, Inc. (ARQT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

We expect Outlook Therapeutics OTLK to beat expectations when it reports third-quarter fiscal 2026 results later this month. In the last reported quarter, the company delivered a negative earnings surprise of 33.33%. The Zacks Consensus Estimate for revenues is pegged at $1.20 million, while the same for earnings is pinned at a loss of 9 cents per share. Let us see how things might have shaped up for OTLK in the soon-to-be-reported quarter. Being a single-asset biotechnology company, Outlook Therapeutics’ growth is entirely centered on its sole product, Lytenava, approved for the treatment of patients with wet age-related macular degeneration (wet AMD). The drug has been commercialized across the European Union and the United Kingdom since 2024. The most significant milestone during the quarter was the U.S. approval of Lytenava in late July for the said indication, ahead of schedule. The approval followed the successful resubmission of the biologics license application in June after the company resolved issues raised in the FDA's complete response letter in December 2025. The company expects to launch the product in the United States by the end of this year. Over the past few quarters, Outlook Therapeutics has generated modest revenues from sales of the drug in ex-U.S. markets, with investors expecting stronger commercial momentum ahead of the planned U.S. launch. OTLK is likely to have continued incurring losses in the to-be-reported quarter as it invests in U.S. commercial infrastructure and launch activities. However, investors will be looking for sequential improvement in European product sales, with Lytenava already launched in selected markets, as management previously noted a recovery in unit sales following an initial slowdown. Beyond quarterly financial performance, the earnings call is expected to provide important updates on the timing of the U.S. commercial rollout, inventory availability, reimbursement progress and management's expectations for revenue generation during the remainder of fiscal 2026. Outlook Therapeutics, Inc. price-consensus-chart | Outlook Therapeutics, Inc. Quote Outlook Therapeutics has a dismal history of earnings surprises. The company’s earnings missed estimates in three of the trailing four quarters, while beating the same on the remaining occasion, delivering an average negative surprise of 15.79%. Year to date, shares of Outlook Therapeutics have lost 38.2% against the industry’s 2.7% growth. Image Source: Zacks Investment Research Our proven model predicts an earnings beat for OTLK this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here, as you will see below. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Earnings ESP: Outlook Therapeutics has an Earnings ESP of +42.31% as the Most Accurate Estimate currently stands at a loss of 5 cents and the Zacks Consensus Estimate of loss is pegged at 9 cents. Zacks Rank: Outlook Therapeutics currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. Here are a few other stocks worth considering from the healthcare space, as our model shows that these too have the right combination of elements to beat on earnings this reporting cycle. Harmony Biosciences HRMY has an Earnings ESP of +14.14% and a Zacks Rank #1 at present. Shares of HRMY have lost 5.6% over the past six months. The company’s earnings missed estimates in each of the trailing four quarters, delivering a negative average surprise of 25.16%. ACADIA Pharmaceuticals ACAD has an Earnings ESP of +25.00% and a Zacks Rank #2 at present. Shares of ACAD have risen 6.8% over the past six months. The company’s earnings beat estimates in three of the trailing four quarters but missed in the remaining quarter, delivering an average surprise of 20.83%. Arcutis Biotherapeutics ARQT has an Earnings ESP of +52.94% and a Zacks Rank #2 at present. Shares of ARQT have risen 3% over the past six months. The company’s earnings beat estimates in three of the trailing four quarters but missed in the remaining quarter, delivering an average surprise of 42.78%. ARQT is scheduled to report second-quarter results on Aug. 5. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Outlook Therapeutics, Inc. (OTLK) : Free Stock Analysis Report ACADIA Pharmaceuticals Inc. (ACAD) : Free Stock Analysis Report Arcutis Biotherapeutics, Inc. (ARQT) : Free Stock Analysis Report Harmony Biosciences Holdings, Inc. (HRMY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. Arcutis Biotherapeutics (ARQT) is back in focus as Wall Street looks ahead to its June 2026 quarter earnings report on August 5, with expectations centered on higher earnings and revenue. See our latest analysis for Arcutis Biotherapeutics. At a recent share price of $27.99, Arcutis Biotherapeutics has seen firm momentum in the near term, with a 30 day share price return of 6.75% and a 90 day gain of 19.87%, set against a year to date share price return that is slightly lower and a very strong 1 year total shareholder return of 91.98%. Together, these figures point to improving sentiment as investors weigh the upcoming earnings report and recent bullish revisions to earnings expectations. If this earnings story has your attention, it can be useful to see what else is moving. Take a look at our screener of 41 healthcare AI stocks Arcutis Biotherapeutics has run hard into earnings, yet still trades well below both analyst targets and some intrinsic value estimates. Is that a market mispricing or a reasonable discount given the company’s current profile? On the most followed view, Arcutis Biotherapeutics carries a fair value of $34.63 against a last close of $27.99. This sets up a clear valuation gap investors will compare with the upcoming earnings report. Read the complete narrative. Read the complete narrative. Want to see what is built into that $34.63 fair value for Arcutis Biotherapeutics? The narrative focuses on rapid revenue expansion, rising margins and a richer future earnings multiple, all tied to one core product and its potential new indications. Result: Fair Value of $34.63 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Arcutis Biotherapeutics still leans heavily on the ZORYVE franchise and faces changing payer dynamics, either of which could quickly change how this valuation narrative holds up. Find out about the key risks to this Arcutis Biotherapeutics narrative. Does this upbeat tone around Arcutis Biotherapeutics match your own thinking, or feel a step ahead of the evidence you trust? Take a moment to review the underlying numbers, consider the potential rewards, and pressure test the optimism with the 5 key rewards Do not stop with a single stock story. Use the Simply Wall Street Screener to quickly spot fresh ideas that fit the way you like to invest. Target potential bargains by scanning companies that appear mispriced on quality and value through the 56 high quality undervalued stocks. Prioritise resilience by focusing on businesses that pass strict balance sheet and fundamentals checks using the solid balance sheet and fundamentals stocks screener (46 results). Hunt for lesser known opportunities that still meet high quality standards with the screener containing 20 high quality undiscovered gems. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ARQT. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]