Arcutis Biotherapeutics, Inc. (NASDAQ:ARQT) Q3 2023 Earnings Call Transcript

Frank Watanabe: Yes, sure. Maybe I’ll take the second question first, and then I’ll ask Todd to talk about the sales force. Yes, Shibu you are absolutely correct. You recall correctly our previous comments, about half of the atopic dermatitis market and also about half of the seborrheic dermatitis market exist out of dermatology. A lesser portion of the psoriasis market, there’s not insignificant number of psoriasis patients also treated outside of dermatology. The challenge for the primary care and pediatrics markets, which is where most of those patients sit, is just the breadth of the prescriber base, you’re talking 250,000 prescribers versus 13,000 prescribers, it’s not economically viable for a company like ours to build a primary care sales force.

And so, we have been saying all along, our intention was to find a partner that had an existing primary care sales force that could do a co-promote for us in those markets. That continues to be our plan. And I would just say at this point that we’re in active discussions with potential partners to try and strike an agreement. We also have said in the past that from a timing standpoint, ideally, we want to have that partnership in place sometime around the atopic dermatitis approval. And I say around because the PCPs are going to be looking to the dermatologist for guidance. And so we have to win with the dermatologist first. I don’t think we need to have that PCP partnership in place at launch, but you would want to have it sometime shortly after that launch or there wouldn’t be any downside to having it before either, right?

So, I think you should really be thinking about us hoping to have that in place in the second half of 2022 — 2024, excuse me. And then, Todd, do you want to talk a little bit about the sales force expansion?

Todd Edwards: Yes, relative to the sales force expansion, the 15% increase in share of voice, so that 15%, we took that 15% and we overlaid the current sales force. What we did is look at the high-prescribing geographies to make certain that we can continue to obtain the desired frequency and reach and engagement with those high-prescribing physicians. So, we overlaid that 15% into those geographies. In addition to that, as we move through 2024 and we — in the atopic dermatitis launch will at that time, give consideration to potentially another expansion to make certain that we have the share of voice required to be able to engage across the three indications. And don’t forget, 2023, Arcutis aligned a group called the Pharmacy Access Managers within the field.

This team engages directly with the independent pharmacies as well as the staff with the dermatology offices to ensure that we’re getting appropriate prescription fulfillment. So, I feel that the organization is at a very good place right now to have the appropriate share of voice that we need to be able to continue the acceleration of ZORYVE psoriasis and make certain that we start from a position of strength and a quick start to the Sub Derm launch.

Frank Watanabe: And that expansion, we completed October 1. So I mean, I think we’ll see some impact even in the fourth quarter, and that will continue on into ’24.

Todd Edwards: Yes, absolutely.

Chris Shibutani: Great. Look forward to momentum from that new sales force.

Operator: [Operator Instructions] Our next question comes from Sean Kim with JonesTrading. Your line is open.

Sean Kim: Congratulations on the quarter. I guess just a few quick questions on my end. The first question is as you look to moving to government, Medicare, Medicaid patient populations, can you comment on the potential additional operational efforts and maybe financial burden that will be required to tap into that market and maybe potential sales opportunities there? And my second question is about the sales force expansion as you look to launch Seb Derm and also atopic dermatitis. I believe you mentioned about 9,000 unique prescribers that have prescribed ZORYVE so far. So I just wanted to hear your thoughts on the additions of sales force. Looks like about a little over 10 prescriptions per prescriber. So I’m just wondering if there is opportunities to expand the number of prescriptions per prescriber and also the potential expansion to reach the 13,000 target that you mentioned last time around?