Arcutis’s Q2 2026 Earnings Call: Gross-to-Net Projections and NBRx Share Trends Clash with Prior Guidance

Date of Call: Aug 5, 2026

Financials Results

• Revenue: $129.9 million, a 59% increase from Q2 2025 and a 23% increase over Q1 2026
• Gross Margin: Gross-to-net rate stable in the 50s

Guidance:

• Full-year 2026 net revenue guidance raised to $525 million to $540 million.
• Expect continued quarter-over-quarter net sales growth driven by patient demand, with gross-to-net improving incrementally toward the low 50s.
• Expect positive cash flow throughout the rest of the year and to continue investing capital back into the business.

Business Commentary:

Revenue Growth and Strategic Expansion:

• Arcutus Biotherapeutics reported net product revenues of $129.9 million for Q2 2026, representing a 59% increase from Q2 2025 and a 23% increase over Q1 2026.
• The growth was driven by increased patient demand and improvements in gross-to-net sales deductions, along with the expansion of Zareve's indications and innovative patient access initiatives.

Product Demand and Market Position:

• Zareve's weekly prescriptions reached a new high watermark with over 280,000 prescriptions in Q2 across all indications and formulations.
• The strong demand is attributed to Zareve's unique profile as a targeted and potent PDE4 inhibitor, its efficacy, safety, and tolerability, and the conversion from topical steroids.

Regulatory Milestones and Pediatric Focus:

• Arcutus received FDA approval for Zareve cream 0.3% for plaque psoriasis in children as young as age 2 and had an supplemental NDA accepted for Zareve cream 0.05% for mild to moderate atopic dermatitis in infants down to three months.
• These milestones address significant treatment gaps and reflect a commitment to delivering meaningful innovation for pediatric patients.

Research and Development Initiatives:

• Enrollment is ongoing in Phase 1A and 1B trials for ARQ234, targeting CD200R for moderate to severe atopic dermatitis, with additional proof-of-concept trials anticipated in late 2026.
• The focus on expanding into new indications is driven by Zareve's broad therapeutic potential and the company's strategy to build a robust pipeline.

Financial Stability and Future Investment:

• The company ended the quarter with cash and marketable securities of $238.9 million, producing positive cash flow from operating activities of $12.6 million for the period.
• Financial stability enables continued investment in innovation and commercial infrastructure to drive sustained growth and inflection in sales in 2027 and beyond.

Sentiment Analysis:

Overall Tone: Positive

• Raised full-year sales guidance; described Q2 as 'another very strong quarter financially' and 'very productive second quarter'; noted 'robust sales performance and demand-driven growth'; expressed confidence in new patient access initiatives and momentum in pipeline progress.

Q&A:

• Question from Seamus Fernandez (Guggenheim): Concerns about the back half growth trajectory, key drivers, and the telehealth opportunity, including potential price points.
  Response: Growth expected across the portfolio driven by demand, with telehealth platform facilitating insurance-covered access similar to in-office care; no incremental gross-net impact expected. Transition to interim CCO is seamless with experienced leader.

• Question from Tyler Van Buren (TD Cohen): Expectation for Q3 sales growth similar to Q2, and details on Vitiligo trial enrollment and data needed to move forward.
  Response: Expect continued quarter-over-quarter net sales growth, but not anchored to current run rate. Vitiligo trial fully enrolled; seeking superiority in speed of onset or other axes to compete with existing non-steroidal option.

• Question from Judah Frommer (Morgan Stanley): Trends in branded topical non-steroidal share and new-to-brand data, and enrollment trends for the ARQ234 trial.
  Response: Zareve holds near 50% market share as the leading non-steroidal brand; new-to-brand data not cited. ARQ234 trial enrollment progressing in atopic dermatitis patients, aided by departure of a competitor and interest in new mechanism.

• Question from Oyer (Mizuho): Clarification on gross-net expectations for Q3/Q4 and details on the PD-L1 study (cutaneous adverse events in cancer patients).
  Response: Gross-net expected to be in the 50s, titrating down to low 50s with moderated improvement. PD-L1 study is a collaborative research initiative to generate data for patient access, not a full development program; results timeline to be shared.

• Question from Matt Barkas (Jefferies): Push-pulls behind revised guidance and any other investigator-sponsored studies (IITs) with Zareve expected to start.
  Response: Second-half growth driven by prescription volume from ongoing momentum and commercial initiatives like sales force expansion and virtual health platform. Likely to start one or more additional proof-of-concept studies this year for new indications.

• Question from Serge Ballinger (Needham): Target patient set for the virtual health platform and whether new patents are Orange Book listable.
  Response: Virtual health platform targets patients without dermatology access due to scheduling or geography, and can be driven by DTC efforts. New patents likely Orange Book listable, strengthening IP portfolio but not changing loss of exclusivity timelines.

• Question from Douglas Sal (HC Wainwright): Conversion rate from telehealth intake to Zareve prescription and patient pathway from topical steroids.
  Response: Still early days; dermatologists can prescribe any therapy. Many patients likely seeking non-steroidal alternatives after prior steroid use, with insurance and fulfillment support streamlined. Some may need to step through another product but likely return for Zareve.

• Question from Kalani Usman (Goldman Sachs): Estimated patient population for PCP/pediatric sales force and market opportunity from potential 0.05% approval in infants (3-24 months).
  Response: Targeting high-volume, early-adopting PCPs/pediatricians (about 25,000 doctors) initially, representing a rich vein of potential. Approval in 3-24 month-olds would address a large market with limited non-steroidal options, expected to drive meaningful uptake.

Contradiction Point 1

Gross-to-Net Trajectory

Contradiction on the expected progression and stability of gross-to-net percentages.

What were Mizuho's Q4 revenue results? - Oyer (Mizuho)

2026Q2: Gross-to-net will improve to the low 50s by year-end but with a moderated improvement. - [Lata Viravan](CFO)

Could you clarify the gross-to-net trajectory for Q3 and Q4 and provide more details on the PD-L1 study, including the timeline and go/no-go criteria related to checkpoint inhibitor side effects? - Andrew Tsai (Jefferies)

2026Q1: While the rate is lower than the prior year, it is expected to remain stable in the 50s throughout 2026... transitioning from the higher 50s to the lower 50s by year-end. - [Todd Edwards](CEO)

Contradiction Point 2

New-to-Brand Prescription (NBRx) Share Trends

Contradiction on the reported performance and trajectory of new-to-brand prescription share.

Judah Frommer (Morgan Stanley) - Judah Frommer (Morgan Stanley)

2026Q2: Zareve maintains a market share just shy of 50%... New-to-brand data was not specified... - [Frank Watanabe](CFO)

What are the trends in share and new-to-brand within the branded topical non-steroidal class, and what are the enrollment trends for the ARQ234 trial? - Judah Frommer (Morgan Stanley)

2026Q1: In Q1, ZORYVE accounted for 48% of new-to-brand prescriptions for branded nonsteroidal topicals... NRX growth has been very impressive in recent weeks of Q2... - [Todd Edwards](CEO)

Contradiction Point 3

Gross-to-Net Trajectory and Seasonality

Contradiction on gross-to-net rate behavior in Q1 2026.

Oyer (Mizuho) - Oyer (Mizuho)

2026Q2: Gross-to-net will improve to the low 50s by year-end but with a moderated improvement. - [Lata Viravan](CFO)

What is the expected gross-to-net trajectory for Q3 and Q4? - Judah Frommer (Morgan Stanley)

20260226-2025 Q4: Gross-to-net will be in the high 50s in Q1 and improve through the year, ending at the lowest rate in Q4. - [L. Edwards](CCO)

Contradiction Point 4

Commercial Team Expansion and Focus

Contradiction on the strategic priority and scale of commercial team expansion.

Matt Barkas (Jefferies) - Matt Barkas (Jefferies)

2026Q2: The primary driver for H2 growth is prescription volume, boosted by commercial initiatives... The company prefers collaborative studies over traditional IITs. - [Frank Watanabe](CEO)

What are the fundamental drivers behind the raised guidance and are there any planned investigator-sponsored studies (IITs) for Zareve, along with their associated opportunities? - Serge Belanger (Needham)

20260226-2025 Q4: A commercial-stage asset is not a high priority currently. The focus is on optimizing the growth of the highest-margin asset, ZORYVE... The priority is on building shareholder value through development-stage assets... - [Todd Watanabe](CEO)

Contradiction Point 5

Growth Expectations for New Sales Initiatives

Contradiction on quantifying the expected impact of new primary care/pediatrics sales efforts.

Kalani Usman (Goldman Sachs) - Kalani Usman (Goldman Sachs)

2026Q2: The initial sales force will focus on a targeted subset (~25,000 high-volume doctors) to maximize impact. - [Frank Watanabe](CEO)

How will the new PCP/pediatric sales team impact the market opportunity for the 3-24 months atopic dermatitis indication, and what pre-launch activities are planned? - Jin Law (Goldman Sachs)

20260226-2025 Q4: It is too early to speculate on the magnitude of primary care contribution. The company is taking a methodical, stepwise approach with a small initial team... The rate of scaling and impact on top-line growth will be determined in due course. - [Todd Watanabe](CEO)