Arcutis Announces ZORYVE® U.S. Co-promote Agreement with Kowa Pharmaceuticals America, Inc.

Rhea-AI Summary

Arcutis Biotherapeutics (Nasdaq: ARQT) has announced a co-promotion agreement with Kowa Pharmaceuticals America for ZORYVE® (roflumilast). This partnership will leverage Kowa's 200-person primary care sales force to promote ZORYVE cream and foam to primary care practitioners and pediatricians for all FDA-approved indications. The agreement aims to expand ZORYVE's total addressable market, providing access to a significant portion of the 7.4 million patients treated outside dermatology offices.

Key points of the agreement include:

• 5-year term with Kowa promoting ZORYVE in priority position
• Arcutis retains responsibility for manufacturing and dermatology sales
• Arcutis will recognize all revenue and pay Kowa a commission on sales
• Expected to drive incremental revenue while maintaining Arcutis' focus on dermatology

Positive

• Expansion of ZORYVE's market reach to primary care and pediatric practices
• Access to a large portion of 7.4 million patients treated outside dermatology offices
• Potential for increased revenue through expanded market access
• Arcutis retains control over manufacturing and dermatology sales
• ZORYVE will be promoted in primary position by Kowa's sales force

Negative

• Arcutis will pay commissions to Kowa, potentially impacting profit margins
• Increased competition in primary care market may require additional marketing efforts

Insights

Pharmaceutical Industry Analyst

The co-promotion agreement between Arcutis Biotherapeutics and Kowa Pharmaceuticals America is a strategic move that could significantly impact Arcutis' market penetration for ZORYVE. This partnership leverages Kowa's extensive primary care sales force, potentially reaching a large portion of the 7.4 million patients treated outside dermatology offices.

Key points to consider:

• Market Expansion: The deal opens up new channels in primary care and pediatrics, which could drive substantial revenue growth for ZORYVE.
• Resource Optimization: Arcutis can maintain focus on dermatology while Kowa targets primary care, potentially leading to more efficient resource allocation.
• Revenue Recognition: Arcutis will recognize all revenue, which is positive for their financial statements. However, the undisclosed commission structure for Kowa will be important in determining the net financial benefit.
• Long-term Commitment: The 5-year agreement term suggests a strong mutual confidence in the partnership's potential.

While this deal appears promising, investors should monitor the execution and resulting sales growth to gauge its true impact on Arcutis' bottom line and market share in the competitive dermatology space.

Market Research Analyst

This co-promotion agreement represents a significant market expansion opportunity for Arcutis' ZORYVE. Here's why this matters:

• Addressable Market: The partnership taps into a vast patient pool of 7.4 million individuals treated outside dermatology offices, potentially doubling or tripling ZORYVE's reach.
• Competitive Advantage: By positioning ZORYVE as a once-daily, steroid-free treatment, Arcutis differentiates its product in the primary care setting where simplicity and safety are key concerns.
• Brand Positioning: ZORYVE will be promoted in the primary position by Kowa's sales force, ensuring maximum visibility and education among prescribers.
• Market Synergy: The partnership allows Arcutis to maintain its dermatology focus while expanding into primary care, creating a two-pronged market approach.

This strategy could accelerate ZORYVE's market penetration, potentially leading to faster revenue growth and increased market share in the competitive dermatology therapeutics landscape. However, success will depend on effective coordination between both companies and the product's performance in these new clinical settings.

• Over 200-person sales force to promote ZORYVE (roflumilast) in primary care and pediatric practices
  
• Provides access to a large portion of the 7.4 million individuals treated for plaque psoriasis, seborrheic dermatitis, and atopic dermatitis outside of dermatology offices
• ZORYVE will be promoted in the primary position to maximize prescriber education
  

WESTLAKE VILLAGE, Calif. and MONTGOMERY, Ala., July 29, 2024 (GLOBE NEWSWIRE) -- Arcutis Biotherapeutics, Inc. (Nasdaq: ARQT), a commercial-stage biopharmaceutical company focused on developing meaningful innovations in immuno-dermatology, today announced the signing of a co-promotion agreement with Kowa Pharmaceuticals America, Inc., a company committed to the development and commercialization of safe and effective healthcare solutions. Under the agreement, Kowa will leverage its primary care sales force to market and promote ZORYVE (roflumilast) cream and ZORYVE (roflumilast) foam to primary care practitioners and pediatricians for all FDA approved indications. Arcutis will maintain responsibility for the marketing and sales of ZORYVE to dermatologists, other dermatology clinicians, and related specialists. This partnership is expected to expand the total addressable market for ZORYVE, providing access to a large portion of the 7.4 million patients treated outside of dermatology offices.

“This partnership is aligned with our strategy and significantly extends the reach of ZORYVE to primary care practitioners and pediatricians who treat millions of individuals each year suffering from atopic dermatitis, seborrheic dermatitis, and plaque psoriasis. ZORYVE is well-suited to fit into the daily practice of these offices, as it simplifies disease management with a once-daily, steroid-free treatment option,” said Frank Watanabe, president and CEO of Arcutis. “Sales of ZORYVE continue to grow because it provides reliable efficacy and a safe and well-tolerated product profile, as well as Arcutis’ broad market access. With the new expansion into primary care and pediatrics through this partnership with Kowa, we will drive incremental revenue, while maintaining the focus of Arcutis’ sales force and its marketing efforts on dermatology clinicians and driving patient demand in the dermatology offices. Importantly, Kowa has established relationships in primary care and will promote ZORYVE as a core product throughout the term of the agreement.”

“Kowa Pharmaceuticals America, Inc. has a long history of successfully co-promoting products within primary care, and this new partnership with Arcutis aligns closely with our focus and expertise in the primary care setting,” said Ben Stakely, chairman, CEO, and president of Kowa Pharmaceuticals America, Inc. “We remain committed to patients and healthcare professionals and to providing therapies that help address unmet needs. Adding ZORYVE to our product portfolio expands our offering and will enhance our ability to support patients.”

Arcutis will recognize all revenue and will have sole responsibility for the manufacturing of ZORYVE during the 5-year term of the partnership. Kowa will have an exclusive agreement to promote ZORYVE in all approved formulations and dosage forms as commercialized by Arcutis to primary care clinicians, pediatricians, and certain collocated healthcare providers in the United States throughout the term of the agreement. Kowa will promote ZORYVE in priority position throughout the term of the partnership, and receive a commission on their sales. Financial terms of the agreement were not disclosed.

INDICATIONS
ZORYVE cream, 0.3%, is indicated for topical treatment of plaque psoriasis, including intertriginous areas, in adult and pediatric patients 6 years of age and older.

ZORYVE cream, 0.15%, is indicated for topical treatment of mild to moderate atopic dermatitis in adult and pediatric patients 6 years of age and older.

ZORYVE foam, 0.3%, is indicated for the treatment of seborrheic dermatitis in adult and pediatric patients 9 years of age and older.

IMPORTANT SAFETY INFORMATION
ZORYVE is contraindicated in patients with moderate to severe liver impairment (Child-Pugh B or C).

Flammability: The propellants in ZORYVE foam are flammable. Avoid fire, flame, and smoking during and immediately following application.

The most common adverse reactions (≥1%) for ZORYVE cream 0.3% for plaque psoriasis include diarrhea (3.1%), headache (2.4%), insomnia (1.4%), nausea (1.2%), application site pain (1.0%), upper respiratory tract infection (1.0%), and urinary tract infection (1.0%).

The most common adverse reactions (≥1%) for ZORYVE cream 0.15% for atopic dermatitis include headache (2.9%), nausea (1.9%), application site pain (1.5%), diarrhea (1.5%), and vomiting (1.5%).

The most common adverse reactions (≥1%) for ZORYVE foam 0.3% for seborrheic dermatitis include nasopharyngitis (1.5%), nausea (1.3%), and headache (1.1%).

Please see full Prescribing Information for ZORYVE foam and full Prescribing Information for ZORYVE cream.

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 harness 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 www.arcutis.com or follow Arcutis on LinkedIn, Facebook, Instagram and X.

About Kowa Company, Ltd.

Kowa Company, Ltd. (Kowa) is a privately held, multinational company headquartered in Nagoya, Japan. Established in 1894, Kowa is actively engaged in various business fields, including the trading of textiles, machinery, and construction materials, in addition to the manufacturing and sales of pharmaceuticals, medical devices, vison units, energy-saving and energy-creating products. Kowa's pharmaceutical business is focused on research and development for three main activities in lifestyle-related diseases (dyslipidemia, type 2 diabetes, and atherosclerosis), ophthalmology, and anti-inflammatory agents. For more information, please see https://www.kowa.co.jp/eng/.

About Kowa Pharmaceuticals America, Inc.
Kowa Pharmaceuticals America, Inc., headquartered in Montgomery, AL, is focused primarily in the area of primary care diseases. Established in September 2008, Kowa Pharmaceuticals America, Inc. focuses its efforts on the successful commercialization of its current and near-term portfolio of pharmaceutical products, and business development activities. For more information about Kowa Pharmaceuticals America, visit https://www.kowapharma.com/.

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 ZORYVE to simplify disease management for care of plaque psoriasis, atopic dermatitis and seborrheic dermatitis; the potential of real-world use results of roflumilast cream, the potential success of the co-promotion agreement with Kowa, the potential for and general ability to access patients treated outside of dermatology offices, as well as the commercial strategy and launches of ZORYVE. These statements are subject to 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. Risks and uncertainties that may cause our actual results to differ include risks inherent in our business, reimbursement and access to our products, and the impact of competition and other important factors discussed in the “Risk Factors” section of our Form 10-K filed with the U.S. Securities and Exchange Commission (SEC) on February 27, 2024, as well as any subsequent filings with the SEC. You should not place undue reliance on any forward-looking statements in this press release. We undertake no obligation to revise or update information herein to reflect events or circumstances in the future, even if new information becomes available. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Contacts:
Media
Amanda Sheldon, Head of Corporate Communications
media@arcutis.com

Investors
Latha Vairavan, Vice President, Finance and Investor Relations
ir@arcutis.com

FAQ

What is the new co-promotion agreement for ZORYVE announced by Arcutis (ARQT)?

Arcutis (ARQT) has signed a co-promotion agreement with Kowa Pharmaceuticals America for ZORYVE (roflumilast) cream and foam. Kowa will market ZORYVE to primary care practitioners and pediatricians using their 200-person sales force.

How will the ZORYVE co-promotion agreement affect Arcutis' (ARQT) market reach?

The agreement is expected to expand ZORYVE's total addressable market, providing access to a large portion of the 7.4 million patients treated for plaque psoriasis, seborrheic dermatitis, and atopic dermatitis outside of dermatology offices.

What are the financial terms of the ZORYVE co-promotion agreement for Arcutis (ARQT)?

While specific financial terms were not disclosed, Arcutis (ARQT) will recognize all revenue from ZORYVE sales and pay Kowa a commission on their sales. Arcutis retains responsibility for manufacturing throughout the 5-year agreement term.

How long will the ZORYVE co-promotion agreement between Arcutis (ARQT) and Kowa last?

The co-promotion agreement between Arcutis (ARQT) and Kowa Pharmaceuticals America for ZORYVE has a 5-year term.