Arcutis Biotherapeutics, Inc. (ARQT) Earnings Call Transcript & Summary

All right. Good afternoon, and we're going to kick off the next session. It is my pleasure to introduce Frank, CEO and President of Arcutis; and also Latha, the CFO. Frank and Latha, welcome.

Thank you.

It's my first time to host you. I think you've been here before.

We have. Yes.

So it's my first time to host you at Goldman Sachs conference. So before we kick off with the Q&A, I'll turn over to you guys for a brief introduction of the company and also any opening remarks about the status and where things are.

Sure. Yes. So Arcutis is an emerging growth, I guess, now company. We're not a start-up anymore. We've been in business just over 9 years. We just had our ninth anniversary a couple of weeks ago. We have now 5 approved indications. The FDA -- all variations on a very potent topical PDE4 inhibitor. So we're approved for plaque psoriasis, seborrheic dermatitis and atopic dermatitis. Our most recent approval was just about 3 weeks ago. We had our foam approved for the treatment of scalp and body psoriasis. The [ product ], very effective, nonsteroidal. It's essentially comparable to a high-potency steroid in terms of efficacy. But unlike a steroid, it's safe to be used indefinitely for any amount and for any location on the body. So it really solves the problem that dermatologists and patients have historically struggled with, which was that steroids were very effective but weren't safe for long-term use. The nonsteroidals weren't terribly effective and had some tolerability issues. So patients were constantly having to switch back and forth, trading off between efficacy and safety. We had our first launch in plaque psoriasis in August of '22 and had a series of approvals since then. Product is going very nicely. We printed almost 65 million in the first quarter, which was volume growth about 10%. And Q2 quarter-to-date continues to grow very nicely, and we expect to see continued growth. And really, the drivers of growth for the company really -- for the product, excuse me, really fall into 4 broad categories. The first one is continued expansion of the label, i.e., the scalp and body approval, a couple of weeks ago. We have another approval coming up in October. And we just announced this morning that we've enrolled the first patient in a trial studying our drug for atopic dermatitis in patients aged 3 to 24 months. So label expansion. Secondly is expanding coverage. We have very good commercial coverage right now for the drug. We're rapidly expanding into the Medicaid population. We reported at the Q1 earnings call that we had a little over half of the lives in Medicaid have access to ZORYVE with a single step or better coverage. And we expect that to continue to expand. And then we continue to believe that we will also be successful in gaining Medicare coverage, although, frankly, that's been a little bit delayed because of the disruptions to the Part D program due to the Inflation Reduction Act. And then we signed a deal late last year with a partner to expand into primary care and pediatrics. That's still very early days, but we think that will be an important contributor of growth going forward for the brand. And then lastly and probably most importantly is the shift from topical steroids to the advanced nonsteroidals. We think -- we see evidence that that momentum is really picking up, and we have a long way to go. Last year, dermatologists wrote about 16x as many topical steroids as they did branded nonsteroidals. You can see there's a long way to go and a lot of growth opportunity ahead of us as that shift takes place.

I see. Got it. So before we dive into the product, why don't we talk a little bit about just the market and how that has been evolved because this is still a relatively newer type of nonsteroidal topicals in psoriasis, atopic dermatitis. And so how has sort of that -- the perception from physicians on the nonsteroidal topicals as a class been evolving over time?

Sure. So I...

And how do you see that going forward?

If you think back to prior to 2021, they didn't really have a lot of good options for drugs other than topicals other than steroids, right? Beyond steroids, for psoriasis, you could use a vitamin D analog like calcipotriene, not very effective and not very well tolerated. In atopic dermatitis, you could use a topical calcineurin inhibitor, okay tolerability, some burning and stinging, not as effective as a steroid, and they have boxed warnings for cancer, which scared a lot of patients off. And then in -- starting in 2017, you had Eucrisa, which wasn't very effective, and it wasn't very well tolerated. It never did very well, and it burned like heck when you put it on. So that's why doctors continue to rely on topical steroids because they just didn't have good alternatives. Starting in 2021, you saw the emergence of 3 new advanced topical therapies, beginning with Incyte's product. And then right about the same point in time a year later, our product and the Organon product launched. These drugs are, in general, very effective, again, in the range of a topical steroid. In general, they're well tolerated. There are some tolerability issues with some of the other products. But that has really driven this change in thinking in dermatology that we're seeing where dermatologists themselves are saying, we really need to rethink how we use topical steroids, right? These are short-term treatments for a chronic disease. We need to really think about introducing these advanced topical therapies into the treatment paradigm. And I think the momentum behind that conversion is only growing. Just since the beginning of the year, we've seen a number of articles and presentations at medical meetings talking about the need to reduce topical steroids and move patients towards the advanced topical therapies.

So you guys launched ZORYVE as a cream back in 2022 in psoriasis. And then recently, you guys have a foam product and -- that launched in 2024. So maybe talk about like the interplay between these 2 different formulation.

Sure.

Why do you need both?

Yes. So if you think sequentially, right, that we had the approval for the cream in plaque psoriasis in '22, as you mentioned, we -- then we had the foam approved in early '24 for seborrheic dermatitis, completely different inflammatory disease and a disease that there hadn't been a new therapy in decades literally for that disease. And then in July of last year, we had a different version of our cream approved for eczema. And then most recently, the foam was also approved for the treatment of psoriasis, plaque psoriasis. The reason for the 2 different formulations in plaque psoriasis and the reason that we have the foam in seborrheic dermatitis is that if you think about you have a good head of hair, right? You don't want to put creams or ointments in your hair, right? It's going to make them greasy. It's going to mess up your hairstyle. So we developed the foam for treating hair-bearing areas of the body like scalp psoriasis or seborrheic dermatitis, which always occur on the scalp. Now you can use the foam to treat the body, too, which really simplifies management for the patient, but it was really the treatment of hair-bearing areas like the scalp that we developed the foam for.

I see. Great. And then how is the -- in terms of the launch performance compared to your initial expectation for both formulation, how has that been tracking?

Yes. So I would say the initial psoriasis launch got off a little bit to a slow start. It was our first drug. We were new to dermatology. The company was new to dermatology, but the people weren't. But -- and we had some kinks to work out in the launch, but that eventually -- we got that sorted out, and it has grown nicely. The foam launch -- the initial foam launch in seb derm wildly exceeded, I think, everyone's expectations, including ours, because of the degree of unmet need. And then atopic dermatitis, I think, has gone pretty much in line with our expectations. The uptake has been very nice. We literally just launched the scalp indication yesterday. So it's still too early to tell, but we expect that's going to go very well as well. There's a lot of excitement about the product. Doctors are very familiar with the drug at this point. They know their patients like the foam. So we expect that to go very well.

I see. Okay. Then what's the driver for growth going from here? Is it going to be continuing looking for new indications? Is there -- is the market growing in terms of how people are looking at this class of drugs? And also maybe talk about the reimbursement and any changes there that you guys are expecting.

Yes. So maybe I'll start with your middle point. The overall topical market is not growing, but where we see the growth is in the branded nonsteroidal market, which is mostly being driven by us, but also the other advanced topical therapies are driving some of that growth. That market grew about 50% last year year-over-year. So a nice growth trend. It's a low base, but a nice trajectory and a very, very large market that can convert to advanced topical therapies, and we expect that to continue. We do expect to see growth from continued expansion of coverage, especially in the government sector. We've got very good commercial coverage already. And then we have several more line extensions or label expansions coming. And we are now starting to think about what might be the next leg of the ZORYVE story. No firm plans at this point. But, for example, dermatologists have now published data on about 40 different diseases that respond to ZORYVE, all things off-label. Some of those might be worth pursuing for an indication. I think we're still early in the stages of evaluating that, but we have a very safe, very effective drug that seems to do a lot of things. And so -- and if you think about Humira or Dupixent, the keys to both of those drugs was the steady expansion of their label. And I think there's an opportunity for us to do a similar thing with ZORYVE.

I see. Got it. And then you have a PDUFA date in October, right?

Yes.

And that's to expand the use of the cream to atopic dermatitis patients who's younger, on the 2- to 5-year of age. And how important is that segment? That -- it seemed like a very small -- I mean what [indiscernible]?

It actually -- it's a pretty large segment actually. About half of all atopic dermatitis patients are under the age of 18. So there's a lot in that 6 to 18 range. But the peak onset of atopic dermatitis is actually between the ages of 1 and 6. That's where most patients first develop atopic dermatitis. So having that ability to capture those patients at their first onset of the disease and keeping them for their lifetime is an important opportunity. And there's a real unmet need in that space, right, because most of the drugs are not approved for that age segment. There's also a halo on the broader business, right, when you're approved in those younger kids. And then even beyond that, as I mentioned earlier, we just started enrolling a 3- to 24-month study as well, which, again, both is inherently valuable in and of itself, but also has a really valuable halo for the rest of the business if you're approved all the way down to age 3 -- 3 months.

I see. And have you guided in terms of what -- how much that would contribute to future revenues and...

We haven't -- we're not issuing guidance at this point, and we don't necessarily break it out by cohort. But I think that both 2 to 5 and 3- to 24-month will be -- long term will be important contributors to the growth of the atopic dermatitis franchise within the broader ZORYVE franchise.

I see. Got it. So -- and then have you guys done any market research study in terms of parents willing to put their infants on drug or on sort of medication?

Sure. Yes. Yes. In fact, the way I would think about it is -- what the research shows is a real reluctance on the part of parents to put their kids on steroids, right, and a reluctance to put their kids on drugs that have boxed warnings. We have 8 dermatology clinicians at the company, and every one of them has lived through the argument with mom about putting their kid on a topical calcineurin inhibitor, right? There isn't a dermatologist in this country that thinks TCIs cause cancer. But when mom sees that there's a boxed warning or they go to fill the script and the pharmacist says, you know that drug causes cancer, right? This is my baby. I'm not going to put it on. It becomes a lot of friction. So to have a really safe and effective nonsteroidal is a great option, especially in the younger kids.

I see. Okay. And how do you think about the interplay between the foam and the cream? Is there more -- I mean do you see people who like to use a foam like want to switch from the cream to the foam? And would that cannibalize some of the -- or do you see more of a synergistic effect where you could expand the market totally or more or less move one patient from one product to another product?

So today, a patient who's stable on the cream, we think it's unlikely that they're going to be switch to the foam, right, if they're doing well on the cream. If they have scalp psoriasis, they might add the foam on, and there's no reason why you can't use both. Going forward, if a patient comes in and they have scalp psoriasis, they're probably going to get the foam, right? That's the thing that makes the most sense. And they might use the foam everywhere in their body that were actually approved for scalp and body psoriasis with the foam. If the patient wants the foam and the cream, the doctor could do that as well. If they don't have scalp psoriasis, then it's really a choice of the patient, and the doctor [indiscernible] the patient with the foam or the cream. Some men have more body hair, right? You and I are Asian. We don't have a lot of body hair. So it's not so much a big deal, but maybe some of our Greek or Italian friends, right, they might prefer the foam. So -- and the cost of goods, our profitability is the same across SKUs. So we don't really care as long as overall ZORYVE is growing.

I see it. Got it. And then -- so you guys have a co-commercialization partnership with Kowa. And they -- they're basically marketing ZORYVE to the primary care physicians. Can you remind us of like how is that partnership going, maybe just a structure, and why do you set up that partnership?

Sure. So I'll start with your last question maybe and work backwards. The reason we did the partnership is because it's really, really expensive to have a primary care sales force, and it's really hard to have a single product, right? For a small company like ours, to hire 200-plus sales reps for primary care, it becomes economically very challenging. And I didn't, frankly, want to get in the business of going out and licensing in a bunch of other primary care drugs to subsidize the cost of the sales force. So it made more sense to partner with a company that had an existing primary care sales force who could economically reach the primary care segment. And I think it's important for investors to understand that about half of these patients that we're targeting across our 3 indications are outside of dermatology, right? So there's a very, very large number of patients being managed, especially in pediatrics and primary care. The way that the deal is set up is that we book all sales at Arcutis, and then we pay a commission to the partner, which is a percentage of -- I think that might be my phone, apologies -- a percentage of sales to them. So they eat what they kill. If they don't sell anything, we don't pay them anything. And so we're not using our resources to promote primary care.

Got it. And then maybe a little bit on treatment guidelines.

Yes. So the AAD treatment guidelines are badly out of date. I want to say it's been, I think, 7 years since they updated the topical treatment guidelines. So they don't make reference to any of the new therapies. We have heard from the academy that they're in the midst of updating those guidelines now. In the interim, doctors aren't following them, right? The dermatology community does not rely on the AAD treatment guidelines because they are so out of date. And we have seen some -- recently some publications from the thought leaders in dermatology saying, here's how you should use topical therapies, right? I think I made reference to that. Payers do rely on them. That's one of the excuses they use for not covering drugs, right, is the treatment guidelines. But I think that the treatment guidelines will catch up in the not-too-distant future based on what we're hearing from the academy.

I see. And do you expect a boost in terms of the awareness or use if the treatment guidelines are updated, and so...

No. At this point in the game, pretty much every dermatologist knows and has used ZORYVE. So I don't see the treatment guidelines having a major impact on prescribing. Where I do think they might have some impact is on the insurance companies.

I see. Okay. Got it.

In a favorable way.

Right, right. And I think you mentioned before that there's -- 80% of the prescriptions are currently reimbursed. So -- and then where you can grow the coverage is in the Medicare and the Medicaid setting?

That's where the main growth opportunity is for expanded government coverage, yes. So in the commercial setting, we have about 80% of commercial lives have access to ZORYVE, and it's generally very high-quality coverage as well. It's not very difficult to get the drug. That remaining 20%, it's probably not economically attractive to contract with that remaining 20%, right? It's the old 80-20 rule. But there's a lot of opportunity as we expand. Medicaid out to ideally all 50 states and also to expand into the Medicare population, again, given that so many of these patients are on Medicare and Medicaid. It's almost half of the patient population.

I see. So what type of efforts are you guys putting in as a company to get that?

Well -- so Medicaid is well underway. We reported at the Q1 earnings call that we had over half of lives having access to ZORYVE through Medicaid and with a single step or better. And I say better because like, for example, in California, there is no step. You use ZORYVE first line for Medicaid, which is actually better than most of our commercial coverage. In New York, there's no step for the foam. You can go straight to ZORYVE, right? So it's very high-quality coverage. And we just need to pick off the individual states, the remaining states. Medicaid is managed at the state level, so you have to get all 50 states, right, to get coverage. Medicare, we continue to work with the Part D plans. The Inflation Reduction Act dramatically changed Part D as of January 1 of this year, and that's created a lot of churn in the Part D space, I would say. And it has been difficult to get coverage for new drugs at the moment in Part D. I think that will settle out as time goes on and they sort of figure out how they can reconfigure their business. But that's probably delayed us a little bit on our Medicare coverage.

I see. And what about outside the U.S., the opportunity outside the U.S.? This is only in the U.S. Like what options have you considered outside the U.S. or -- and what have you -- what efforts have you tried to put in?

So we have our own operation in Canada, and we have cream and foam approved on the market in Canada. Canada is doing very well. It's contributing more than its relative population to our business. We out-licensed rights in Japan to a Japanese drug company, Sato. And then we out-licensed our rights to China and some other parts of Asia to one of the big Japanese -- or Chinese drug companies, excuse me, Huadong. We've looked at Europe. Reimbursement for topicals in Europe is very challenging. And I think with the threat of MFN pricing in the United States, I think the risk-benefit is probably not there right now for us. So I don't anticipate probably Europe in the foreseeable future just given particularly the MFN risk.

I see. So like a cash business that would not be feasible or not economic.

No. Europeans don't like paying for drugs out of pocket. We have a European colleague that can attest to that.

Right. I think they pay for some obesity drugs.

Obesity, you can get almost anyone to pay for it, right? So...

So there's -- okay, let's switch gears to some of the IP. There's an ongoing litigation, and I think that litigation is now on pause. Maybe just give us a quick update on like what's going on there, what's the chance of this litigation continuing back on track and what's -- how you guys think about this overall.

Sure. So maybe a little bit of background. So there's a company called Padagis that makes generic topicals, they filed an ANDA in February of '24. And we immediately filed a lawsuit asserting our patents against them. And we were starting the process of the litigation. When we filed that lawsuit, that triggered a 30-month stay under the Hatch-Waxman Act, which prevented the FDA from approving the drug during those 30 months so we could litigate. In February of this year, the other party, Padagis, came to us and asked us to stay that litigation because they had some major issue. I don't know the exact nature of the issue, but it was a big-enough issue that they didn't get conditional approval from the FDA at the time that they should have. So it was -- it's pretty bad. And in return for us agreeing to stay that litigation, they agreed that the 17 months that were remaining in Hatch-Waxman stay, we retained. So if at some point, the litigation restarts, we have 17 months to litigate before they can launch, which is plenty of time for us to prosecute our patents. We remain very confident about our intellectual property position. I think we'll be successful in maintaining exclusivity on the cream at least through 2037 when the first patents expire. And for the foam, we have patent coverage through 2041. And we intend to enforce our intellectual property rates vigorously against any potential ANDA filers.

I see. Got it. And then let's turn -- we have a couple of more minutes left. Let's turn to your pipeline. You guys have 2 assets there. One is 255, which is a topical JAK inhibitor. Maybe do the rationale for topical JAK, and then how do you see this differentiate? And what's the overall goal for this program?

Sure. Yes. So ARQ-255, as you said, is a topical JAK, but it's an unusual topical JAK, right? So oral JAKs work very well in AA, right? They're the only FDA-approved treatments for AA. There have been multiple topicals that have failed in the treatment of alopecia areata. And that's because they were just applying a cream to the surface of the skin like ZORYVE, different MOA, but similar formulation. And it's very difficult to get a topical to penetrate deep enough in the skin to get to where the inflammation is in AA, which is at the base of the hair follicle. The bloodstream tends to take the drug away before you get that deep. So our former Chief Technical Officer, who's retired now but still works with us, invented a technology that allows us to use the hair follicle to deliver the drug down to the base of the hair follicle, and that's the basis of ARQ-255. So it's not like any other topical that's ever been invented. And in fact, the technology that we use for follicular delivery is patented. We still need to see if it works, right? That's the key. That's why you're running the experiment. But you know if you get a JAK to where it's supposed to be, it's going to work in AA, right? And the challenge with topicals has just been a drug delivery issue. So 255 was designed to address that delivery issue in alopecia areata as opposed to psoriasis or seb derm or AD, which is very superficial, and you can treat that fairly easily with a cream.

I see. Got it. And what's the development timeline, the catalyst for that?

Well -- so we wrapped up the Phase I study, and we're just waiting for results from the Phase I study. And depending on those results, then the next phase would be to go into a traditional Phase II dose-finding study.

And what's the timeline for seeing that data?

Well -- so we said around the middle of the year. So it should be fairly soon when we see the data.

I see. Got it. And then your other asset, the ARQ-234, maybe just a little bit about that. That's another interesting asset, is systemic novel immune checkpoint agonist for CD200. Maybe just walk through the rationale of that strategy.

Yes. So I'm sure investors are familiar with checkpoint inhibitors in oncology. When you inhibit the immune checkpoints, it revs the immune system up, right? And the immune system attacks your cancer cells. Checkpoint agonists do the opposite thing. If you agonize the immune checkpoints, the effect is to essentially reset the immune system, and these autoimmune disorders are overactive immune system or caused by an overactive immune system. And so this is, I think, one of the newer routes of treating autoimmune disorders. There was another company that was developing an asset against the same target and published some very compelling data that the target works, and that by treating this target, you could actually induce a state of remission where the patient would do very well for long periods off of drug as well. And that was what really got us excited. We went and found a company in the U.K. that had an even better agonist for this checkpoint, and we acquired that company, Ducentis, and we've been developing the drug since then. We expect to open up an IND for 234 later this year and look forward to putting that into the clinic as well and evaluating both the safety and tolerability and the efficacy of the pathway and the drug.

Got it. And then can you remind us about the cash balance and how much -- and also the run rate guidance, what that includes or not include, including these pipeline assets?

I will ask my CFO to answer that.

I thought I was just sitting here. I'm glad I got a question. So at the end of March, we had about $200 million of cash. We have a debt facility where we have $100 million of debt on our balance sheet and the ability to draw another $100 million by -- in whole or in part, by mid of 2026. And I think -- I didn't hear the full second...

Cash runway.

Cash runway. So we basically said we're very comfortable with our current cash balance and the ability to draw the debt, and we don't expect to go back to the equity markets under the status quo of our business with the ZORYVE trajectory. We've also alluded to that we will be cash flow breakeven sometime in 2026.

I see. Got it. And that guidance includes the 2 pipeline kicking off...

Yes, it does. That's...

The IND, the...

Yes, it does.

Potential pivotal studies of that. Okay. Fantastic. And what's the -- in terms of looking here, what's the long-term aspiration for the company? You guys have a pipeline going before with just the topicals and the creams. And now you're getting into more traditional type of therapy.

Right. I'd say after the last couple of years, I love having this question, right? I'm back to being a biotech company. We founded this company 9 years ago really at a recognition that there were not a lot of companies investing in innovative dermatology assets, right? That's improved somewhat over the last 9 years, but we think there's still immense opportunities in dermatology for novel assets. And I think we have shown that we have built one of the best teams in dermatology, both development-wise, but also now we've shown with commercialization as well that we have a very effective team. So our vision is to become one of the leading companies in dermatology. I think ZORYVE gives us a very strong foundation. And then if you think about other opportunities, I think first, as you mentioned, we have ARQ-234 and ARQ-255. Secondly, we're at a point now where we've completed all of the registrational studies with ZORYVE, and we're starting to think about, is there another leg to the ZORYVE story, right? I think I made reference earlier to about 40 different case reports or case series of ZORYVE treating different diseases than what we're already approved for. Some of them aren't worth pursuing, but some of them might be, right? And so we're evaluating that and trying to decide, do we start some registrational programs in other indications as well? And then thirdly, we've always been active in business development. 234 was acquired. Our JAK inhibitor was acquired from outside. I think it's a very high bar. We are in the, I think, enviable position of not having to do business development, but we're also in the enviable position that if we find something that's really attractive, I think we have the team and can get the resources to in-license and add something to the pipeline. So I think across those 3 dimensions, the focus really will be on rejuvenating our pipeline and continuing to grow ZORYVE that'll generate the resources to pay for all of this.

I see. Got it. And where is the biggest pushback from investors? Is it in terms of...

I don't know that I would say pushback -- the #1 question we've been getting is the one that you just asked about, okay, what's next, right? What's the next leg of the story? I think that in the past, one of the pushbacks that we got was, well, topicals are just never that big, right? And that historically, I think, has been true. It's been 20 years since there was a really big topical in the market. But if you just look at your own models, right, we're well on our way to disproving that hypothesis that topicals can't be big. And I think particularly as we continue to execute and expand coverage and expand indications, and this conversion happens, we are going to prove out that this is a $1 billion-plus product.

I see. And I mean would there be a point where patient are just no longer responding to topicals and need that more potent systemic therapy and they get off the cream control?

Sure. So thus far, there's no evidence of tachyphylaxis with PDE4 inhibition. What I will say, though, is I think certainly in seborrheic dermatitis -- sorry, excuse me, in psoriasis and in atopic dermatitis, more severe patients are probably going to go on systemic therapies, right? And there are excellent systemic therapies for both diseases. As good as those systemic therapies are, they're not curative. And you take a drug like risankizumab or bimekizumab, you're getting half, maybe 60% of patients completely clear, which is unreal. That's a phenomenal result. That means almost half the patients aren't clear, right? And dermatologists will typically prescribe a topical adjunctively to treat those residual symptoms. And even the patients that do get clear sometimes will flare in the future, and they'll use a topical in that situation, too. That's even more true in atopic dermatitis when [ 4 13s ] are maybe getting 40% of your patients, 75% clear. That's a lot of residual symptoms, right? And so ZORYVE is being used adjunctively there as well. ZORYVE is really an ideal adjunct treatment with systemic therapies. The patient can't hurt themselves. It doesn't matter where they use it, how much they use it, how long they use it. The doctor can confidently prescribe it and just say, use it when you need it, and they don't have to worry about it, right, which is not true of topical steroids. They have to monitor the patient's topical steroid use for [indiscernible].

I see. Interesting. Yes, because when we look at Otezla, Otezla is a similar mechanism, and it works -- and I think majority of patients after 1 year don't respond to Otezla.

Yes. So remember, Otezla -- or you might not know this, but Otezla is a much, much weaker PDE4 inhibitor than roflumilast is. And it's associated with pretty significant side effects as well. So if you look at our long-term studies, we don't see any decrease in efficacy. And in fact, in the atopic dermatitis long-term study, which was recently published, what you actually saw was the longer patients were on it, the better they did, right? At 4 weeks, we had about a 42% EASI-75. It's pretty good. It's on par with maybe Dupixent. At a year, 2 out of 3 patients had an EASI-75. So that's a 50% increase in efficacy over a year as patients stay on ZORYVE. And one of the other things that we've seen in all of our long-term studies is that retention adherence to the therapy is very good even for long -- during long-term treatment.

Got it. So before I turn it to you for final remarks, why do you think this is the right time for investors to get excited about the stock?

Well, for starters, I think it's really undervalued, the bargain. We're trading at 5x our current year revenues, right? I mean that's hard to find. We're kind of a unique asset, right? We're a revenue-generating biotech, rapidly coming up on cash breakeven. We don't need to raise capital again. We have lots of runway in terms of our IP, a lot of levers for growth. And the stock...

You have a pipeline.

We have a pipeline, and the stock has, I think, immense upside. So I think it's a great buying opportunity. And I don't know that I have a whole lot more to say than that.

Well, Frank and Latha, thank you so much for being here. It was great to host you, at least for me, the first time at Goldman Sachs.

It was a pleasure. Thanks for having us. Appreciate it, Rich.

Yes. Nice to meet you. Thank you.