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CORRECTION – Arcutis Announces Second Quarter 2024 Financial Results and Provides Business Update

WESTLAKE VILLAGE, Calif., Aug. 14, 2024 (GLOBE NEWSWIRE) — In a release issued under the same headline earlier today by Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT), please note that in the section of Recent Corporate Highlights, in the third bullet point, the date for the extended maturity should be August 2029, not June 2029. The corrected release follows:

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, 2024, and provided a business update.

“In the second quarter, sales grew by a robust 43% sequentially, highlighting the strength of physician demand for ZORYVE across multiple approved indications, and our ability to continue to improve our GTN. Following the recent launch of ZORYVE cream for atopic dermatitis, we are well-positioned to drive further growth,” said Frank Watanabe, president and chief executive officer. “Our ZORYVE franchise co-promotion agreement with Kowa will further expand our total addressable market, allowing us to address millions of patients treated outside of a dermatology office. In addition, we continue to advance ZORYVE’s late-stage development, with the filing of the supplemental new drug application for ZORYVE foam in scalp and body psoriasis, which will enable us to drive greater preference share, once approved. Finally, we amended our existing debt agreement favorably, providing us with additional financial flexibility and improved liquidity to enhance our business going forward.”

“We are pleased that we continued to grow sales while prudently managing operating expenses in the second quarter. These solid financial results together with our amended existing debt agreement, which provides an extended maturity, a lower interest rate and the flexibility to repay a portion and re-draw it later, give us additional financial and strategic flexibility to continue investing in our growth, especially supporting our three commercial launches and advancing our pipeline,” said David Topper, chief financial officer.

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 for the treatment of plaque psoriasis and 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 of seborrheic dermatitis, and under FDA review 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 

Second Quarter 2024 Summary Financial Results

Product revenues for the quarter ended June 30, 2024 were $30.9 million compared to $4.8 million for the corresponding period in 2023. Revenues for the quarter were $17.3 million for ZORYVE cream 0.3% and $13.6 million for ZORYVE topical foam, 0.3%. Year-over-year and quarter-over-quarter increases were due to strong unit demand as well as GTN improvements. Across ZORYVE cream and ZORYVE foam, blended GTN is now in the high 50s, driven by the high percentage of prescriptions being reimbursed.

Cost of sales for the quarter ended June 30, 2024 were $3.5 million compared to $0.8 million for the corresponding period in 2023.

Research and development (R&D) expenses for the quarter ended June 30, 2024 were $19.3 million compared to $25.2 million for the corresponding period in 2023. The year-over-year decrease was due to decreased clinical development costs related to our topical roflumilast program.

Selling, general, and administrative (SG&A) expenses for the quarter ended June 30, 2024 were $58.2 million compared to $46.0 million for the corresponding period in 2023. The year-over-year increase was primarily due to sales and marketing expenses related to the launches of ZORYVE cream and foam.

Net loss was $52.3 million, or $0.42 per basic and diluted share, for the quarter ended June 30, 2024 compared to $71.0 million, or $1.16 per basic and diluted share, for the corresponding period in 2023.

Cash, cash equivalents, restricted cash, and marketable securities were $363.1 million as of June 30, 2024, compared to $272.8 million as of December 31, 2023. Net cash used in operating activities was $45.2 million during the second quarter.

Conference Call and Webcast

Arcutis management will host a conference call and webcast today at 4:30 pm ET to discuss the financial results for the quarter and provide a business update. The webcast for this conference call may be accessed at the “Events” section of the Company’s website. The replay of the webcast will be available on the Arcutis website following the call.

About Arcutis

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

Forward Looking Statements

Arcutis cautions you that statements contained in this press release regarding matters that are not historical facts are forward-looking statements. These statements are based on the Company’s current beliefs and expectations. Such forward-looking statements include, but are not limited to, statements regarding the potential for its topical drugs in development to address large markets with significant unmet need; the development, approval and potential commercialization of Arcutis’ product candidates; the potential continued commercial success and growth of ZORYVE cream 0.3% in plaque psoriasis, ZORYVE cream 0.15% in atopic dermatitis and ZORYVE foam in seborrheic dermatitis, including market access and reimbursement, product demand growth and continued improvement in GTN; 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
media@arcutis.com

Investors
Latha Vairavan, VP Finance and Head of Investor Relations
ir@arcutis.com

ARCUTIS BIOTHERAPEUTICS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
 
  June 30,   December 31,
  2024   2023
  (unaudited)    
ASSETS      
Current assets:      
Cash and cash equivalents $ 84,270     $ 88,398  
Restricted cash   617       925  
Marketable securities   278,167       183,463  
Trade receivable, net   43,411       25,807  
Inventories   13,880       13,134  
Prepaid expenses and other current assets   14,246       18,704  
Total current assets   434,591       330,431  
Property and equipment, net   1,347       1,539  
Intangible assets, net   6,063       6,438  
Operating lease right-of-use asset   2,163       2,361  
Other assets   595       596  
Total assets $ 444,759     $ 341,365  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 7,943     $ 11,992  
Accrued liabilities   42,632       33,941  
Operating lease liability   777       735  
Total current liabilities   51,352       46,668  
Operating lease liability, noncurrent   2,978       3,382  
Long-term debt, net   203,808       201,799  
Other long-term liabilities   194       849  
Total liabilities   258,332       252,698  
Stockholders’ equity:      
Common stock   12       9  
Additional paid-in capital   1,256,327       1,070,558  
Accumulated other comprehensive loss   (294 )     4  
Accumulated deficit   (1,069,618 )     (981,904 )
Total stockholders’ equity   186,427       88,667  
Total liabilities and stockholders’ equity $ 444,759     $ 341,365  
ARCUTIS BIOTHERAPEUTICS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
 
  Three Months Ended June 30,   Six Months Ended June 30,
  2024   2023   2024   2023
Revenues:              
Product revenue, net $ 30,858     $ 4,770     $ 52,427     $ 7,551  
Other revenue         420       28,000       420  
Total revenues   30,858       5,190       80,427       7,971  
               
Operating expenses:              
Cost of sales   3,464       776       6,720       1,559  
Research and development   19,298       25,219       42,439       60,564  
Selling, general, and administrative   58,173       45,958       112,967       88,876  
Total operating expenses   80,935       71,953       162,126       150,999  
Loss from operations   (50,077 )     (66,763 )     (81,699 )     (143,028 )
               
Other income (expense):              
Other income, net   5,229       3,121       9,273       6,328  
Interest expense   (7,484 )     (7,349 )     (14,964 )     (14,391 )
               
Loss before income taxes   (52,332 )     (70,991 )     (87,390 )     (151,091 )
               
Provision for income taxes $     $     $ 324     $  
               
Net loss $ (52,332 )   $ (70,991 )   $ (87,714 )   $ (151,091 )
               
Per share information:              
Net loss per share, basic and diluted $ (0.42 )   $ (1.16 )   $ (0.75 )   $ (2.46 )
Weighted-average shares used in computing net loss per share, basic and diluted   123,480,849       61,430,620       117,264,687       61,300,577  


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