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Arcutis Announces Fourth Quarter and Full Year 2023 Financial Results and Provides Business Update

WESTLAKE VILLAGE, Calif., Feb. 27, 2024 (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 and year ended December 31, 2023, and provided a business update.

“2023 was a year of successful execution and builds a strong foundation for 2024. We are very encouraged by the strong revenue growth trend we are seeing, reinforcing the demand for new treatment options and physician adoption of ZORYVE,” said Frank Watanabe, president and chief executive officer. “With two FDA-approved products in the midst of their commercial launches and the mid-year PDUFA action date for roflumilast cream for atopic dermatitis, 2024 has the potential to be a transformational year for Arcutis. Our expanding product portfolio, combined with our robust development pipeline, seek to address unmet patient needs across multiple dermatology indications, and position Arcutis to accomplish our patient-centric mission of addressing unmet needs and the lack of innovation in medical dermatology.”

Program Updates / Key Milestones

ZORYVE cream – a highly potent and selective phosphodiesterase-4 (PDE4) inhibitor in a once-daily cream formulation, approved in the United States and Canada for the treatment of plaque psoriasis and under development for atopic dermatitis

ZORYVE foam – a once-daily foam formulation of topical roflumilast designed to overcome the challenges of delivering topical drugs in hair-bearing areas of the body, approved in the United States for the treatment for seborrheic dermatitis and in development for scalp and body psoriasis

ARQ-255 – a topical suspension formulation of ivarmacitinib, a potent and highly selective topical Janus kinase type 1 (JAK1) inhibitor, designed to preferentially deliver the drug deep into the hair follicle, in order to potentially treat alopecia areata at the site of inflammation

ARQ-234 – a fusion protein that is a potent and highly selective checkpoint agonist of the CD200 Receptor (CD200R), being developed as a potential biologic treatment in atopic dermatitis

Recent Corporate Highlights 

Fourth Quarter and Full Year 2023 Summary Financial Results

Total revenues for the quarter ended December 31, 2023 were $13.5 million compared to $3.0 million for the corresponding period in 2022. Total revenues for the year ended December 31, 2023 were $59.6 million compared to $3.7 million for the corresponding period in 2022. These year-over-year increases were due to strong unit demand growth as well as improvements in gross-to-net sales deductions. In addition, the third quarter of 2023 included Other revenues of $30.4 million related to the upfront payment in connection with the Huadong collaboration and licensing agreement.

Cost of sales for the quarter ended December 31, 2023 were $2.2 million compared to $0.5 million for the corresponding period in 2022. Cost of sales for the year ended December 31, 2023 were $5.0 million compared to $0.8 million for the corresponding period in 2022.

Research and development (R&D) expenses for the quarter ended December 31, 2023 were $23.8 million compared to $33.9 million for the corresponding period in 2022. R&D expenses for the year ended December 31, 2023 were $110.6 million compared to $182.4 million for the corresponding period in 2022. These year-over-year decreases were due to decreased clinical development costs related to our topical roflumilast. In addition, R&D expenses for the third quarter of 2022 included approximately $30 million upfront expense for the Ducentis acquisition.

Selling, general, and administrative (SG&A) expenses for the quarter ended December 31, 2023 were $48.7 million compared to $37.0 million for the corresponding period in 2022. SG&A expenses for the year ended December 31, 2023 were $185.1 million compared to $122.1 million for the corresponding period in 2022. These year-over-year increases were primarily due to higher headcount and sales and marketing expenses related to the launch of ZORYVE.

Net loss was $66.3 million, or $0.72 per basic and diluted share, for the quarter ended December 31, 2023 compared to $72.0 million, or $1.18 per basic and diluted share, for the corresponding period in 2022. Net loss was $262.1 million, or $3.78 per basic and diluted share, for the year ended December 31, 2023 compared to $311.5 million, or $5.66 per basic and diluted share, for the corresponding period in 2022.

Cash, cash equivalents, restricted cash, and marketable securities were $272.8 million as of December 31, 2023, compared to $410.8 million as of December 31, 2022. Net cash used in operating activities was $56.2 during the fourth quarter and $247.1 million during the full year 2023.

Conference Call and Webcast

Arcutis management will host a conference call and webcast today at 8:30 am ET to discuss the financial results for the quarter and year and provide a business update. The webcast for this conference call may be accessed at the “Events” section of the Company’s website. The replay of the webcast will be available on the Arcutis website following the call.

About Arcutis

Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT) is a commercial-stage medical dermatology company that champions meaningful innovation to address the urgent needs of individuals living with immune-mediated dermatological diseases and conditions. With a commitment to solving the most persistent patient challenges in dermatology, Arcutis has a growing portfolio including two FDA approved products that harness our unique dermatology development platform coupled with our dermatology expertise to build differentiated therapies against biologically validated targets. Arcutis’ dermatology development platform includes a differentiated pipeline with multiple clinical programs for a range of inflammatory dermatological conditions including scalp and body psoriasis, atopic dermatitis, and alopecia areata. For more information, visit www.arcutis.com or follow Arcutis on LinkedIn, Facebook, and X.

Forward Looking Statements

Arcutis cautions you that statements contained in this press release regarding matters that are not historical facts are forward-looking statements. These statements are based on the Company’s current beliefs and expectations. Such forward-looking statements include, but are not limited to, statements regarding the potential for its topical drugs in development to address large markets with significant unmet need; the development, approval and potential commercialization of Arcutis’ product candidates; the potential commercial success and growth of ZORYVE in plaque psoriasis and seborrheic dermatitis, including market access and reimbursement, product demand growth and continued improvement in gross to net; and the timing of regulatory filings and potential approvals for a number of dermatology indications for roflumilast in the United States and Canada. These statements involve substantial known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements and you should not place undue reliance on our forward-looking statements. Risks and uncertainties that may cause our actual results to differ include risks inherent in the clinical development process and regulatory approval process, the timing of regulatory filings, the timing, expenses, and success of our commercialization efforts, including uncertainty of future commercial sales and related items that can impact net sales, and our ability to defend our intellectual property. For a further description of the risks and uncertainties applicable to our business, see the “Risk Factors” section of our Form 10-K filed with U.S. Securities and Exchange Commission (SEC) on February 27, 2024, as well as any subsequent filings with the SEC. We undertake no obligation to revise or update information herein to reflect events or circumstances in the future, even if new information becomes available.

Contacts:

Media
Amanda Sheldon, Head of Corporate Communications
asheldon@arcutis.com

Investors
Latha Vairavan, VP Finance and Investor Relations
lvairavan@arcutis.com

Derek Cole
Investor Relations Advisory Solutions
derek.cole@iradvisory.com

 
ARCUTIS BIOTHERAPEUTICS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
 
  December 31,   December 31,
    2023       2022  
       
ASSETS      
Current assets:      
Cash and cash equivalents $ 88,398     $ 53,641  
Restricted cash   925       1,234  
Marketable securities   183,463       355,948  
Trade receivable, net   25,807       8,458  
Inventories   13,134       7,514  
Prepaid expenses and other current assets   18,704       10,611  
Total current assets   330,431       437,406  
Property and equipment, net   1,539       1,881  
Intangible assets, net   6,438       7,188  
Operating lease right-of-use asset   2,361       2,721  
Other assets   596       78  
Total assets $ 341,365     $ 449,274  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 11,992     $ 8,827  
Accrued liabilities   33,941       28,323  
Operating lease liability   735       657  
Total current liabilities   46,668       37,807  
Operating lease liability, noncurrent   3,382       4,117  
Long-term debt, net   201,799       197,769  
Other long-term liabilities   849        
Total liabilities   252,698       239,693  
Stockholders’ equity:      
Common stock   9       6  
Additional paid-in capital   1,070,558       930,425  
Accumulated other comprehensive loss   4       (1,086 )
Accumulated deficit   (981,904 )     (719,764 )
Total stockholders’ equity   88,667       209,581  
Total liabilities and stockholders’ equity $ 341,365     $ 449,274  
ARCUTIS BIOTHERAPEUTICS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
 
  Three Months Ended December 31,   Year Ended December 31,
    2023       2022       2023       2022  
  (unaudited)        
Revenues:              
Product revenue, net $ 13,526     $ 2,961     $ 29,186     $ 3,686  
Other revenue               30,420        
Total revenues   13,526       2,961       59,606       3,686  
               
Operating expenses:              
Cost of sales   2,246       485       4,987       754  
Research and development   23,775       33,877       110,575       182,435  
Selling, general, and administrative   48,674       37,023       185,145       122,124  
Total operating expenses   74,695       71,385       300,707       305,313  
Loss from operations   (61,169 )     (68,424 )     (241,101 )     (301,627 )
               
Other income (expense):              
Other income, net   2,672       3,320       11,786       5,821  
Interest expense   (7,762 )     (6,915 )     (29,712 )     (15,652 )
               
Loss before income taxes   (66,259 )     (72,019 )     (259,027 )     (311,458 )
               
Provision for income taxes $ 25     $     $ 3,113     $  
               
Net loss $ (66,284 )   $ (72,019 )   $ (262,140 )   $ (311,458 )
               
Per share information:              
Net loss per share, basic and diluted $ (0.72 )   $ (1.18 )   $ (3.78 )   $ (5.66 )
Weighted-average shares used in computing net loss per share, basic and diluted   92,580,106       60,959,523       69,305,487       55,032,265  


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