Kowa's 2025 Q2 Earnings Call: Unpacking Contradictions in Gross to Net Dynamics, Seasonality, and Medicare Coverage

Strong Revenue and Sales Growth:
- Arcutis Biotherapeutics reported net product revenues of $81.5 million in Q2 2025, representing 28% quarter-over-quarter growth and 164% growth compared to the same quarter in 2024.
- The growth was driven by increasing demand for ZORYVE across its approved indications, particularly with TRx volume increasing for all products.

Expansion of ZORYVE Indications:
- The company received FDA approval for ZORYVE foam 0.3% for treating plaque psoriasis of the scalp and body, marking the fifth approval for ZORYVE in three years.
- This new indication is expected to drive incremental demand for ZORYVE, offering a single product solution for patients with scalp involvement in psoriasis.

Operational Efficiency and Cash Flow:
- Arcutis reported a significant reduction in net loss compared to the same period last year, with a positive net cash flow from operating activities of $325,000 for the quarter.
- This improvement was due to increased gross profits driven by top-line revenue growth and efficient management of cash flow from operations.

Pipeline and Strategic Focus:
- Arcutis is pursuing additional pipeline opportunities, including label expansions for pediatric atopic dermatitis and development efforts for infant AD.
- The company's strategy is to leverage its development and commercialization capabilities to address unmet needs in immune-mediated dermatologic diseases, focusing on data-driven decision-making in clinical development.