000178730612-312024Q3Falsexbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:pure00017873062024-01-012024-09-3000017873062024-11-0100017873062024-09-3000017873062023-12-3100017873062024-07-012024-09-3000017873062023-07-012023-09-3000017873062023-01-012023-09-300001787306us-gaap:CommonStockMember2023-12-310001787306us-gaap:AdditionalPaidInCapitalMember2023-12-310001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001787306us-gaap:RetainedEarningsMember2023-12-3100017873062024-01-012024-03-310001787306us-gaap:CommonStockMember2024-01-012024-03-310001787306us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001787306us-gaap:RetainedEarningsMember2024-01-012024-03-310001787306us-gaap:CommonStockMember2024-03-310001787306us-gaap:AdditionalPaidInCapitalMember2024-03-310001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001787306us-gaap:RetainedEarningsMember2024-03-3100017873062024-03-310001787306us-gaap:CommonStockMember2024-04-012024-06-300001787306us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-3000017873062024-04-012024-06-300001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-300001787306us-gaap:RetainedEarningsMember2024-04-012024-06-300001787306us-gaap:CommonStockMember2024-06-300001787306us-gaap:AdditionalPaidInCapitalMember2024-06-300001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001787306us-gaap:RetainedEarningsMember2024-06-3000017873062024-06-300001787306us-gaap:CommonStockMember2024-07-012024-09-300001787306us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300001787306us-gaap:RetainedEarningsMember2024-07-012024-09-300001787306us-gaap:CommonStockMember2024-09-300001787306us-gaap:AdditionalPaidInCapitalMember2024-09-300001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001787306us-gaap:RetainedEarningsMember2024-09-300001787306us-gaap:CommonStockMember2022-12-310001787306us-gaap:AdditionalPaidInCapitalMember2022-12-310001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001787306us-gaap:RetainedEarningsMember2022-12-3100017873062022-12-310001787306us-gaap:CommonStockMember2023-01-012023-03-310001787306us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-3100017873062023-01-012023-03-310001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001787306us-gaap:RetainedEarningsMember2023-01-012023-03-310001787306us-gaap:CommonStockMember2023-03-310001787306us-gaap:AdditionalPaidInCapitalMember2023-03-310001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001787306us-gaap:RetainedEarningsMember2023-03-3100017873062023-03-310001787306us-gaap:CommonStockMember2023-04-012023-06-300001787306us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-3000017873062023-04-012023-06-300001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001787306us-gaap:RetainedEarningsMember2023-04-012023-06-300001787306us-gaap:CommonStockMember2023-06-300001787306us-gaap:AdditionalPaidInCapitalMember2023-06-300001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001787306us-gaap:RetainedEarningsMember2023-06-3000017873062023-06-300001787306us-gaap:CommonStockMember2023-07-012023-09-300001787306us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001787306us-gaap:RetainedEarningsMember2023-07-012023-09-300001787306us-gaap:CommonStockMember2023-09-300001787306us-gaap:AdditionalPaidInCapitalMember2023-09-300001787306us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001787306us-gaap:RetainedEarningsMember2023-09-3000017873062023-09-300001787306us-gaap:IPOMember2020-02-042020-02-040001787306arqt:SecondaryEquityPublicOfferingMember2020-10-012020-10-310001787306arqt:ThirdEquityPublicOfferingMember2021-02-012021-02-280001787306arqt:FourthEquityPublicOfferingMember2022-08-012022-08-310001787306arqt:FifthEquityPublicOfferingMember2023-10-012023-10-310001787306arqt:PrefundedWarrantMember2023-10-3100017873062024-02-282024-02-2800017873062024-02-280001787306us-gaap:OverAllotmentOptionMember2024-02-282024-02-280001787306us-gaap:OverAllotmentOptionMember2024-02-280001787306us-gaap:CommonStockMemberarqt:AtTheMarketMemberarqt:CowenAndCompanyLLCMember2021-05-062021-05-060001787306us-gaap:CommonStockMemberarqt:AtTheMarketMemberarqt:CowenAndCompanyLLCMember2021-05-060001787306us-gaap:CommonStockMemberarqt:AtTheMarketMemberarqt:CowenAndCompanyLLCMember2022-03-012022-03-310001787306us-gaap:CommonStockMemberarqt:AtTheMarketMemberarqt:CowenAndCompanyLLCMember2022-03-310001787306us-gaap:CommonStockMemberarqt:AtTheMarketMemberarqt:CowenAndCompanyLLCMember2023-12-012023-12-310001787306us-gaap:CommonStockMemberarqt:AtTheMarketMemberarqt:CowenAndCompanyLLCMember2023-12-310001787306us-gaap:CommonStockMemberarqt:AtTheMarketMemberarqt:CowenAndCompanyLLCMember2024-01-012024-01-310001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMember2024-09-300001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMemberus-gaap:SubsequentEventMember2024-10-082024-10-080001787306arqt:ZORYVECream0.3Member2024-07-012024-09-300001787306arqt:ZORYVECream0.3Member2023-07-012023-09-300001787306arqt:ZORYVECream0.3Member2024-01-012024-09-300001787306arqt:ZORYVECream0.3Member2023-01-012023-09-300001787306arqt:ZORYVEFoamMember2024-07-012024-09-300001787306arqt:ZORYVEFoamMember2023-07-012023-09-300001787306arqt:ZORYVEFoamMember2024-01-012024-09-300001787306arqt:ZORYVEFoamMember2023-01-012023-09-300001787306arqt:ZORYVECream0.15Member2024-07-012024-09-300001787306arqt:ZORYVECream0.15Member2023-07-012023-09-300001787306arqt:ZORYVECream0.15Member2024-01-012024-09-300001787306arqt:ZORYVECream0.15Member2023-01-012023-09-300001787306us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2024-09-300001787306us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2024-09-300001787306us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2024-09-300001787306us-gaap:MoneyMarketFundsMember2024-09-300001787306us-gaap:FairValueInputsLevel1Memberus-gaap:CertificatesOfDepositMember2024-09-300001787306us-gaap:FairValueInputsLevel2Memberus-gaap:CertificatesOfDepositMember2024-09-300001787306us-gaap:FairValueInputsLevel3Memberus-gaap:CertificatesOfDepositMember2024-09-300001787306us-gaap:CertificatesOfDepositMember2024-09-300001787306us-gaap:FairValueInputsLevel1Memberus-gaap:CorporateDebtSecuritiesMember2024-09-300001787306us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2024-09-300001787306us-gaap:FairValueInputsLevel3Memberus-gaap:CorporateDebtSecuritiesMember2024-09-300001787306us-gaap:CorporateDebtSecuritiesMember2024-09-300001787306us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2024-09-300001787306us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2024-09-300001787306us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMember2024-09-300001787306us-gaap:USTreasurySecuritiesMember2024-09-300001787306us-gaap:FairValueInputsLevel1Member2024-09-300001787306us-gaap:FairValueInputsLevel2Member2024-09-300001787306us-gaap:FairValueInputsLevel3Member2024-09-300001787306us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2023-12-310001787306us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2023-12-310001787306us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel3Member2023-12-310001787306us-gaap:MoneyMarketFundsMember2023-12-310001787306us-gaap:FairValueInputsLevel1Memberus-gaap:CommercialPaperMember2023-12-310001787306us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2023-12-310001787306us-gaap:FairValueInputsLevel3Memberus-gaap:CommercialPaperMember2023-12-310001787306us-gaap:CommercialPaperMember2023-12-310001787306us-gaap:FairValueInputsLevel1Memberus-gaap:CorporateDebtSecuritiesMember2023-12-310001787306us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2023-12-310001787306us-gaap:FairValueInputsLevel3Memberus-gaap:CorporateDebtSecuritiesMember2023-12-310001787306us-gaap:CorporateDebtSecuritiesMember2023-12-310001787306us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2023-12-310001787306us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2023-12-310001787306us-gaap:FairValueInputsLevel3Memberus-gaap:USTreasurySecuritiesMember2023-12-310001787306us-gaap:USTreasurySecuritiesMember2023-12-310001787306us-gaap:FairValueInputsLevel1Member2023-12-310001787306us-gaap:FairValueInputsLevel2Member2023-12-310001787306us-gaap:FairValueInputsLevel3Member2023-12-310001787306us-gaap:CorporateDebtSecuritiesMember2023-12-310001787306arqt:SatoMember2024-02-272024-02-270001787306arqt:SatoMember2024-09-300001787306arqt:SatoMember2024-07-012024-09-300001787306arqt:SatoMember2024-01-012024-09-300001787306arqt:HuadongMember2023-09-012023-09-300001787306arqt:HuadongMember2024-03-012024-03-310001787306arqt:HuadongMember2024-09-300001787306arqt:HuadongMember2023-08-012023-08-310001787306arqt:HuadongMember2024-07-012024-09-300001787306arqt:HuadongMember2024-01-012024-09-300001787306arqt:HuadongMember2023-01-012023-09-300001787306arqt:HuadongMember2023-07-012023-09-300001787306arqt:AstraZenecaMember2018-07-012018-07-310001787306us-gaap:SeriesBPreferredStockMemberarqt:AstraZenecaMember2018-07-012018-07-310001787306arqt:AstraZenecaMember2019-08-012019-08-310001787306arqt:AstraZenecaMember2022-07-012022-09-300001787306arqt:AstraZenecaMember2024-07-012024-09-300001787306arqt:AstraZenecaMember2022-09-300001787306arqt:AstraZenecaMember2024-01-012024-09-300001787306arqt:AstraZenecaMember2023-07-012023-09-300001787306arqt:AstraZenecaMember2023-01-012023-09-300001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMemberus-gaap:SubsequentEventMember2024-10-070001787306arqt:LoanAgreementMemberarqt:TrancheATermLoanMemberus-gaap:SecuredDebtMember2021-12-220001787306arqt:LoanAgreementMemberarqt:TrancheB1TermLoanMemberus-gaap:SecuredDebtMember2021-12-220001787306arqt:LoanAgreementMemberarqt:TrancheB2TermLoanMemberus-gaap:SecuredDebtMember2021-12-220001787306arqt:LoanAgreementMemberarqt:LoanAgreementTrancheC1ExpiringMarch312026Memberus-gaap:SecuredDebtMemberus-gaap:SubsequentEventMember2024-10-080001787306arqt:LoanAgreementMemberarqt:LoanAgreementTrancheC2ExpiringJune302026Memberus-gaap:SecuredDebtMemberus-gaap:SubsequentEventMember2024-10-080001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMember2023-12-310001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMemberus-gaap:SubsequentEventMember2024-10-080001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMembersrt:ScenarioForecastMember2026-06-302026-06-300001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMembersrt:ScenarioForecastMember2027-01-012027-01-010001787306arqt:LoanAgreementMemberarqt:TrancheCTermLoanMemberus-gaap:SecuredDebtMemberus-gaap:SubsequentEventMember2024-10-082024-10-080001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMemberus-gaap:DebtInstrumentRedemptionPeriodOneMemberus-gaap:SubsequentEventMember2024-10-080001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMemberus-gaap:DebtInstrumentRedemptionPeriodTwoMemberus-gaap:SubsequentEventMember2024-10-080001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMemberus-gaap:DebtInstrumentRedemptionPeriodThreeMemberus-gaap:SubsequentEventMember2024-10-080001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMember2021-12-220001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMember2021-12-222021-12-220001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMember2023-11-010001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMember2024-07-012024-09-300001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMember2024-01-012024-09-300001787306arqt:LoanAgreementMemberarqt:TrancheCTermLoanMemberus-gaap:SecuredDebtMember2021-12-220001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMember2023-07-012023-09-300001787306arqt:LoanAgreementMemberus-gaap:SecuredDebtMember2023-01-012023-09-300001787306arqt:StockOptionExchangeMemberus-gaap:EmployeeStockOptionMemberus-gaap:CommonStockMember2024-01-162024-01-160001787306us-gaap:EmployeeStockOptionMemberarqt:StockOptionExchangeMember2024-01-160001787306arqt:StockOptionExchangeMemberus-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonStockMember2024-02-132024-02-130001787306arqt:StockOptionExchangeMemberus-gaap:RestrictedStockUnitsRSUMemberarqt:FirstGrantDateMember2024-02-132024-02-130001787306arqt:StockOptionExchangeMemberus-gaap:RestrictedStockUnitsRSUMemberarqt:SecondGrantDateMember2024-02-132024-02-130001787306arqt:StockOptionExchangeMemberus-gaap:RestrictedStockUnitsRSUMemberarqt:ThirdGrantDateMember2024-02-132024-02-130001787306us-gaap:RestrictedStockUnitsRSUMemberarqt:StockOptionExchangeMember2024-01-012024-09-300001787306arqt:StockOptionExchangeMemberus-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2024-01-012024-09-300001787306arqt:StockOptionExchangeMemberus-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMember2024-01-012024-09-3000017873062023-01-012023-12-310001787306us-gaap:RestrictedStockUnitsRSUMember2023-12-310001787306us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001787306us-gaap:RestrictedStockUnitsRSUMember2024-09-300001787306us-gaap:ResearchAndDevelopmentExpenseMember2024-07-012024-09-300001787306us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-300001787306us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-09-300001787306us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-300001787306us-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-300001787306us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001787306us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-09-300001787306us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300001787306us-gaap:EmployeeStockOptionMember2024-09-300001787306us-gaap:EmployeeStockOptionMember2024-01-012024-09-300001787306us-gaap:EmployeeStockOptionMembersrt:MinimumMember2024-01-012024-09-300001787306us-gaap:EmployeeStockOptionMembersrt:MaximumMember2024-01-012024-09-300001787306us-gaap:EmployeeStockOptionMembersrt:MinimumMember2023-01-012023-12-310001787306us-gaap:EmployeeStockOptionMembersrt:MaximumMember2023-01-012023-12-310001787306us-gaap:EmployeeStockOptionMember2023-01-012023-12-310001787306arqt:PrefundedWarrantMember2024-09-300001787306us-gaap:EmployeeStockOptionMember2024-01-012024-09-300001787306us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001787306arqt:EarlyExercisedOptionsMember2024-01-012024-09-300001787306arqt:EarlyExercisedOptionsMember2023-01-012023-09-300001787306us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001787306us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001787306us-gaap:EmployeeStockMember2024-01-012024-09-300001787306us-gaap:EmployeeStockMember2023-01-012023-09-300001787306us-gaap:SubsequentEventMember2024-10-08

UNITED STATES
証券取引委員会
ワシントンDC20549
フォーム10-Q
（表1）
☒ 証券取引法第13条または15(d)条に基づく四半期報告書

報告期間が終了した2023年6月30日をもって2024年9月30日
OR
☐ 移行期間：             から             まで
遷移期間用 売上高 調整後 EBITDA の
報告書番号：001-39186
アーキューティス・バイオセラピューティクス、インク。
（会社設立時の指定名）
デラウェア
(登記上)所在地の州またはその他の管轄区域
81-2974255
(内国歳入庁雇用者識別番号)
3027 タウンズゲート・ロード スイート300
Westlake Village, カリフォルニア
（本社所在地）
91361
（郵便番号）
(805) 418-5006
（登録者の電話番号、市外局番を含む）

（法人格の設立または組織の州またはその他の管轄区域）
（前回の報告以来変更された場合の前名称、前住所、および前決算期）

法第12条（b）に基づく登録証券
各クラスの名称取引シンボル登録されている各取引所の名称
普通株式、1株当たりの額面は$0.0001 ARQTナスダックグローバルセレクトマーケット

私たちは、事業年度前12か月間（または登録者がそのような報告書を提出する必要があったより短い期間）に証券取引法第13条または15条（d）によって提出する必要のあるすべての報告書を提出したか（1）および過去90日間にわたってそのような提出要件による影響を受けていたか（ 2）は、チェックマークで示してください。はい ☒✓印を付しませんでした場合、登録者の内部統制に関するマネジメント評価を報告するよう求められたことを意味します。☐
証券取引委員会規則405条（この章の§232.405に基づき提出が必要なすべてのインタラクティブデータファイルを前の12か月間（または前記要件の提出が必要であったよりも短い期間）に電子提出したかどうかを、チェックマークで示してください。はい ☒✓印を付しませんでした場合、登録者の内部統制に関するマネジメント評価を報告するよう求められたことを意味します。☐
記録者が大幅な加速ファイラー、加速ファイラー、非加速ファイラー、小規模報告会社、または新興成長企業であるかをチェックマークで示してください。ExchangeのRule 120億2における「大幅な加速ファイラー」、「加速ファイラー」、「小規模報告会社」、「新興成長企業」の定義をご覧ください。 法令。
大型加速ファイラー☐加速ファイラー☐
非加速ファイラー☒レポート義務のある中小企業☒
新興成長企業☐
新興成長企業の場合は、証券取引法第13条（a）に基づく新しいまたは改訂された財務会計基準の遵守に対する延長移行期間を使用しないことを選択したかどうかにチェックマークをつけてください。 ☐
規則12b-2及び13a-3により、登録者は、登録報告書を提出するために必要な諸条件を備えていた場合を除き、B会社であるかどうかを判断しなければならない。登録者はB会社である。☐✓印を付しませんでした場合、登録者の内部統制に関するマネジメント評価を報告するよう求められたことを意味します。☒
発行会社の普通株式の発行済株式数は2024年11月1日時点で 117,044,591.



未来に関する声明：

この「第10-Qフォームに関する四半期報告書」には将来を見据えた声明が含まれています。私たちは、これらの将来を見据えた声明を、改正された1933年証券法（または証券法）第27A条と1934年証券取引法（または取引法）第21E条に含まれる将来を見据えた声明に関する安全港条項の対象とする意図です。この四半期報告書に含まれる歴史的事実以外のすべての声明は将来を見据えた声明となる可能性があります。場合によっては、「可能性がある」「するだろう」「すべきである」「予想される」「計画する」「予期する」「できるだろう」「意図する」「目標を定める」「プロジェクト」「検討する」「信じる」「見積もる」「予測する」「潜在的」「継続する」またはこれらの否定形、またはその他類似の表現によって将来を見据えた声明を特定することができます。この「第10-Qフォームに関する四半期報告書」に含まれる将来を見据えた声明には、今後の事業の業績と財務状況、業種およびビジネスのトレンド、株式報酬、ビジネス戦略、計画、市場成長、承認製品の商品化、および将来の運営目標に関する声明などが含まれます。

この四半期報告書10-Qの先行きに関する声明は、単なる予測にすぎません。これらの先行きに関する声明は、主に現在の期待値と将来の出来事や財務トレンドについての予測に基づいており、これらが当ビジネス、財務条件、および業績に影響を与えると考えられるものです。先行きに関する声明には、実際の結果、業績、あるいは達成物が、先行きに関する声明で示唆されるものと著しく異なる可能性がある、既知のリスク、不確実性、およびその他の重要な要素が含まれます。これには、2024年9月30日が終了した四半期の10-Qこの四半期報告書の「リスクファクター」で議論された重要な要素が含まれます。この四半期報告書10-Qの先行きに関する声明は、この四半期報告書10-Qの日付までに当社が入手可能な情報に基づいていますが、これらの情報が合理的な声明の根拠を提供していると信じていても、その情報が制限されたり不完全であったりする可能性があり、当該声明が、種類を問わず一部またはすべての関連情報が入手可能かつ有用に調査されたことを示しているわけではありません。これらの声明は根本的に不確実であり、投資家に対してこれらの声明に過度に依存しないよう警告されています。
全セクターは、この10-Qフォームの四半期報告書とこの10-Qフォームの四半期報告書で言及している文書を読んでください。また、この10-Qフォームの四半期報告書の付随書類としてファイルされている文書も読んでください。私たちの実際の将来の結果、活動レベル、パフォーマンス、および達成が私たちの期待と大きく異なる可能性があることを理解してください。私たちのすべての将来を見据える発言は、これらの警告文によって修飾されています。これらの将来を見据える発言は、この10-Qフォームの四半期報告書の日付をもってのみ有効です。適用法によって義務付けられる場合を除き、私たちはこの10-Qフォームの四半期報告書に含まれる将来を見据える発言を、新しい情報、将来の出来事、またはその他の理由によるものであっても、公開的に更新または修正する予定はありません。




インデックス
ページ



第I部 財務情報
アイテム1。財務諸表
アーキューティス・バイオセラピューティクス、インク。
簡易合算貸借対照表
（株価や割賦価格を除く、千単位で）
9月30日、12月31日
20242023
(未監査)
資産
流動資産:
現金及び現金同等物$134,851 $88,398 
制限付き現金617 925 
売買可能有価証券195,710 183,463 
手形および売掛金60,119 25,807 
在庫 14,015 13,134 
前払費用およびその他の流動資産18,408 18,704 
流動資産合計423,720 330,431 
固定資産、施設及び設備、純額1,186 1,539 
無形資産、純額9,792 6,438 
オペレーティング賃貸権利資産2,060 2,361 
その他の資産596 596 
総資産$437,354 $341,365 
負債及び純資産
流動負債：
支払調整$19,325 $11,992 
未払費用52,790 33,941 
長期借入金の流動割
99,513 — 
稼働リース負債798 735 
流動負債合計172,426 46,668 
営業賃貸借債務（長期）2,772 3,382 
長期借入金（純額）105,095 201,799 
その他の長期負債
420 849 
負債合計280,713 252,698 
コミットメント及び事態に関する注記
株主資本:
优先股,每股面值为0.001美元;授权5,000,000股;未发行或未流通股份0.0001の帳簿価額； 10,000,000株式を承認済み; なし 
— — 
普通株式、1株当たり0.001ドルの割額株式、承認済み株式総数900,000,000株、発行済み株式577,806,659株、2023年12月31日時点での流通株式540,387,949株、発行済み株式577,805,623株、2023年3月31日時点での流通株式545,459,814株、追加資本金0.0001の帳簿価額； 300,000,000株式を承認済み; 116,998,829 そして 96,787,343 2024年9月30日および2023年12月31日時点で発行済みおよび未払いの株式
12 9 
追加の資本金1,267,251 1,070,558 
累積その他の包括利益
533 4 
累積欠損(1,111,155)(981,904)
純資産合計156,641 88,667 
負債および純資産合計$437,354 $341,365 
添付の注記は、これらの未監査の簡約連結財務諸表の統合一体の部分です。
1
目次



アーキューティス・バイオセラピューティクス、インク。
総合損益計算書及び包括損益計算書の概要
（千ドル、株および株当たりデータを除く）
(未監査)
9月30日に終了した3か月間9月30日に終了した9か月間
2024202320242023
収益:
製品収益、純額$44,755 $8,109 $97,182 $15,660 
その他の収入— 30,000 28,000 30,420 
総収入44,755 38,109 125,182 46,080 
営業経費:
売上原価5,503 1,182 12,223 2,741 
研究開発19,501 26,236 61,940 86,800 
販売、一般、管理58,817 47,595 171,784 136,471 
営業費用の合計83,821 75,013 245,947 226,012 
事業による損失(39,066)(36,904)(120,765)(179,932)
その他の収入 (費用):
その他の収益、純額4,182 2,721 13,455 9,114 
支払利息(6,653)(7,559)(21,617)(21,950)
税引前損失
(41,537)(41,742)(128,927)(192,768)
所得税の引当金
— 3,023 324 3,088 
純損失$(41,537)$(44,765)$(129,251)$(195,856)
その他の包括利益（損失）：
有価証券の含み益について
771 165 528 1,017 
外貨換算調整56 (57)1 (115)
その他の包括利益の合計
827 108 529 902 
包括的な損失$(40,710)$(44,657)$(128,722)$(194,954)
1株あたりの情報:
1株当たり純損失（基本および希薄化後）$(0.33)$(0.73)$(1.08)$(3.19)
1株当たりの純損失の計算に使用される加重平均株式（基本株式、希薄化後）124,302,317 61,727,278 119,627,687 61,462,025 
添付の注記は、これらの未監査の簡約連結財務諸表の統合一体の部分です。
2
目次



アーキューティス・バイオセラピューティクス、インク。
株主資本の構成に関する連結会計報告書
（千ドル単位、株式データを除く）
(未監査)
普通株式追加
出資済み
2002年に設立されたKingSett Capitalは、機関投資家と超高純資産のクライアントとの共同投資で、持続可能でプレミアムなリスク加重リターンを提供する、カナダをリードするプライベートエクイティ不動産会社です。KingSettは、グローバル不動産サステナビリティベンチマーク（GRESB）調査において、リストに掲載されていない同業種の純財産部門で第1位、北アメリカの多様化したオフィス/リストに掲載されていない純財産部門で第2位にランクインし、持続可能性への取り組みが評価されました。業界のリーダーとして、KingSettは不動産セクターを前進させ、様々な不動産物件、開発、共同事業、住宅ローンの新しい投資機会を探し続けることに専念しています。		その他包括利益（損失）の繰延欄累積
赤字		株主資本合計
株式数量
12月31日の残高96,787,349 $9 $1,070,558 $4 $(981,904)$88,667 
普通株式のシェアの発行、割引と発行コストを差し引いた額$10,820
18,157,895 3 161,679 — — 161,682 
オプションの行使に伴う普通株式の発行21,863 — 82 — — 82 
制限株付与に伴う普通株式の発行538,330 — — — — — 
株式報酬費用 — — 10,030 — — 10,030 
有価証券の未実現損失— — — (116)— (116)
外国通貨の為替調整— — — (21)— (21)
最終損失— — — — (35,382)(35,382)
残高－2024年3月31日115,505,437 12 1,242,349 (133)(1,017,286)224,942 
オプションの行使に伴う普通株式の発行147,490 — 806 — — 806 
制限株式ユニットのベスティングに伴う普通株式の発行443,365 — — — — — 
従業員株式購入計画に基づく発行株383,975 — 649 — — 649 
株式報酬費用 — — 12,523 — — 12,523 
有価証券の未実現損失
— — — (127)— (127)
外国通貨の為替調整— — — (34)— (34)
最終損失— — — — (52,332)(52,332)
2024年6月30日の残高116,480,267 12 1,256,327 (294)(1,069,618)186,427 
オプションの行使に伴う普通株式の発行138,566 — 394 — — 394 
制限株式ユニットの解禁に伴う普通株式の発行379,996 — — — — — 
株式報酬費用 — — 10,530 — — 10,530 
市場性証券に対する未実現利益
— — — 771 — 771 
外国通貨の為替調整— — — 56 — 56 
最終損失— — — — (41,537)(41,537)
バランス―2024年9月30日116,998,829 $12 $1,267,251 $533 $(1,111,155)$156,641 
添付の注記は、これらの未監査の簡約連結財務諸表の統合一体の部分です。
3
目次



アーキューティス・バイオセラピューティクス、インク。
株主資本の構成に関する連結会計報告書
（千ドル単位、株式データを除く）
(未監査)
普通株式追加
出資済み
2002年に設立されたKingSett Capitalは、機関投資家と超高純資産のクライアントとの共同投資で、持続可能でプレミアムなリスク加重リターンを提供する、カナダをリードするプライベートエクイティ不動産会社です。KingSettは、グローバル不動産サステナビリティベンチマーク（GRESB）調査において、リストに掲載されていない同業種の純財産部門で第1位、北アメリカの多様化したオフィス/リストに掲載されていない純財産部門で第2位にランクインし、持続可能性への取り組みが評価されました。業界のリーダーとして、KingSettは不動産セクターを前進させ、様々な不動産物件、開発、共同事業、住宅ローンの新しい投資機会を探し続けることに専念しています。		その他包括利益（損失）の繰延欄累積
赤字		株主資本合計
株式数量
バランス-2022年12月31日61,037,403 $6 $930,425 $(1,086)$(719,764)$209,581 
オプションの行使に伴う普通株式の発行31,497 — 100 — — 100 
制限株式ユニットの解禁に伴う普通株式の発行285,314 — — — — — 
早期行使に基づき発行された普通株式に関連する買戻し権の失効3,718 — — — — — 
株式報酬費用 — — 9,479 — — 9,479 
有価証券の未実現損失— — — 724 — 724 
外国通貨の為替調整— — — (52)— (52)
最終損失— — — — (80,100)(80,100)
2023年3月31日の残高61,357,932 6 940,004 (414)(799,864)139,732 
オプションの行使に伴う普通株式の発行35,700 — 74 — — 74 
制限株式ユニットの解禁に伴う普通株式の発行77,221 — — — — — 
普通株式発行に伴う前倒し行使に関連する買戻し権の失効3,719 — — — — — 
従業員株式購入計画に基づく発行株155,446 — 993 — — 993 
株式報酬費用 — — 10,578 — — 10,578 
市場性証券に対する未実現利益— — — 128 — 128 
外国通貨の為替調整— — — (6)— (6)
最終損失— — — — (70,991)(70,991)
バランス-2023年6月30日61,630,018 6 951,649 (292)(870,855)80,508 
オプションの行使に伴う普通株式の発行172,320 — 867 — — 867 
制限株式ユニットの解禁に伴う普通株式の発行51,988 — — — — — 
普通株式に関連する再購入権の失効（早期行使に基づく発行済株）3,718 — — — — — 
株式報酬費用 — — 9,999 — — 9,999 
市場性証券に対する未実現利益— — — 165 — 165 
外国通貨の為替調整— — — (57)— (57)
最終損失— — — — (44,765)(44,765)
残高―2023年9月30日61,858,044 $6 $962,515 $(184)$(915,620)$46,717 
添付の注記は、これらの未監査の簡約連結財務諸表の統合一体の部分です。
4
目次

アーキューティス・バイオセラピューティクス、インク。
簡易連結キャッシュフロー計算書
営業活動によるキャッシュフロー：
(未監査)
9月30日までの9ヶ月間
20242023
営業活動からのキャッシュ・フロー:
最終損失$(129,251)$(195,856)
営業活動からの純キャッシュ流入に調整するための調整：
減価償却費用495 573 
キャッシュレスリース料301 266 
無形資産の摘早償却1,646 563 
売買可能証券の純増価額
(5,805)(5,517)
無形利息費用2,809 3,014 
株式報酬費用 32,337 30,056 
内包デリバティブ取引の公正価値変動
(429)— 
営業資産および負債の変動:
売掛金の純額(33,133)(10,959)
在庫 (135)(6,399)
前払費用およびその他の流動資産(882)(10,087)
支払調整2,334 4,345 
未払費用18,850 (323)
オペレーティングリース債務(547)(489)
営業によるキャッシュフローの純流出(111,410)(190,813)
投資活動からのキャッシュフロー:
売買可能有価証券の購入(237,421)(107,660)
流動有価証券償還による受取金額231,507 350,500 
設備資産の購入(143)(422)
投資活動による純現金流出入
(6,057)242,418 
財務活動からのキャッシュフロー:
ストックオプションの行使による普通株式の発行収益1,282 1,041 
従業員株式購入計画に基づく普通株式の発行による収益
649 993 
普通株式の発行による受取高（発行費用相殺済み）161,682 — 
財務活動による純現金流入額163,613 2,034 
為替レート変化のキャッシュへの影響(1)(118)
現金、現金同等物、制限付き現金の純増加
46,145 53,521 
期初時の現金、現金同等物及び制限付き現金89,323 54,875 
期末時の現金、現金同等物及び制限付き現金$135,468 $108,396 
資金による支払いがまだ行われていない無形資産のマイルストーン
NON-CASH INVESTING および FINANCING INFORMATION の補足的開示:
$5,000 $— 
キャッシュフローに関する補足情報：
現金で支払われる利息費用$19,253 $18,862 
添付の注記は、これらの未監査の簡約連結財務諸表の統合一体の部分です。
5
目次
アーキューティス・バイオセラピューティクス、インク。
総合財務諸表の注釈
(未監査)

1. ビジネスの概要と説明
Arcutis Biotherapeutics, Inc.、または会社は、未満たされた医療関連ニーズの高い皮膚疾患の治療薬の開発と商品化に焦点を当てた商業段階のバイオ製薬会社です。 会社の戦略は検証済みの生物学的ターゲットに焦点を当て、その薬剤開発プラットフォームと深い皮膚科学の専門知識を活用して、既存の治療法の主な欠点を解消する可能性のある差別化製品を開発することです。
会社は、初の製品であるZORYVE（ロフルミラスト）クリーム0.3%（「ZORYVEクリーム0.3%」）について、2022年7月29日に米国食品医薬品局（「FDA」）から承認を受けました。® （間質性乾癬を含む）12歳以上の対象者におけるプラーク乾癬の治療用として、2022年8月に米国での商業展開を開始しました。 会社はまた、2023年4月28日にカナダでプラーク乾癬に対するZORYVEクリーム0.3%の承認を受け、2023年6月にカナダでの商業展開を開始しました。® 会社は、セボルリア皮膚炎の治療用として、2013年12月15日に、9歳以上の対象者にZORYVE（ロフルミラスト）トピカルフォーム0.3%（「ZORYVEフォーム」）のFDA承認を受け、2024年1月下旬に米国での商業展開を開始しました。® 会社は、6歳以上の成人および小児患者を対象とした軽度から中等度のアトピー性皮膚炎の治療用として、2024年7月下旬に米国での商業展開を開始したZORYVE（ロフルミラスト）クリーム0.15%（「ZORYVEクリーム0.15%」）のFDA承認を取得しました。 会社は、2024年10月にはカナダでZORYVEフォームの承認を受けました。
株式公開およびフォローオン融資
2020年2月4日、会社は初の公開株式発行（「IPO」）を終了し、普通株式の株式を発行し売却して約$の純収益を受け取りました。167.2発行後、会社は2020年10月、2021年2月、2022年8月、2023年10月に続く公開販売を完了し、$の純収益を受け取りました。93.4 百万、$207.5百万ドル161.6$百万の売上高を認識しました95.8百万ドルを超えるナンバーで、それぞれ2024年6月30日、2024年3月31日の時点で、出資法投資のNAVで計測された公正価値オプションの帳簿価額である。
普通株式の売却に加えて、2023年10月に完了した公開では、シェアの普通株式を$1株当たりの価格で購入するための事前資金が付与されました。 7,500,000 1株当たりの価格で会社の普通株式を購入するためのシェアが終了したオファリング入札を含め、2.4999 事前資金が付与されたワラントの行使価格は1株当たりの$1であり、0.0001 ワラントの行使価格は1株当たりの$1です。事前資金が付与されたワラントは元の発行後にいつでも行使可能であり、2024年9月30日時点で行使されていません。
2024年2月28日、会社は株単位でのオファリングを完了しました。 15,789,474 1株当たりの価格で会社の普通株式を購入するためのシェアが終了したオファリング入札を含め、9.50 株あたり単位。会社はまた、アンダーライターに対して1株あたりさらに購入するオプションを付与しました。 2,368,421株式の価格がそれぞれ2024年3月31日および2023年12月31日の償還価値$である株式9.50 株あたり株。アンダーライターはこのオプションを2024年2月29日に全額行使しました。161.7会社への純利益は、アンダーライティングディスカウント、手数料、および会社が負担する見込みのオファリング費用を差し引いた後、総額ドルでした。
市場価格での公開（"ATM"）オファリング
2021年5月6日、当社はCowen and Company, LLC（「Cowen」）と売買契約（「売買契約」）を締結しました。この契約に基づき、当社は随時、総募集価格が最大$の普通株式の募集および売却を行うことができました100.0 百万。Cowenは会社のAtMプログラムの販売代理店を務めており、そのサービスに対して次のような報酬を受け取る権利があります。 3AtMプログラムに基づいて売却された普通株式の総収入の割合。2022年3月、同社は売却しました 882,353 AtMプログラムの株式（$）17.00 一株当たり、受け取った金額 $14.5 純収入は百万です。2023年12月、同社は売却しました 1,250,000 AtMプログラムの株式（$）2.60 一株当たり、受け取った金額 $3.1純収入は百万です。
2024年1月、会社はCowenとの販売契約を変更および再締結し、ATmプログラムをリセットして、最大総額$の普通株式のオファーおよび販売を提供するようにしました。100.0その他の条件は、変更および再締結された販売契約が元の販売契約と実質的に同じであることを除き、全セクターその他の条件は変更されていません。会社は、変更および再締結された販売契約のもとでまだ普通株式を発行または売却していません。
6
目次
アーキュティス・バイオセラピューティクス株式会社
要約連結財務諸表の注記
(未監査)
流動性
同社は創業以来、事業から多額の損失とマイナスのキャッシュフローを被っており、累積赤字はドルでした1,111.2百万と $981.92024年9月30日および2023年12月31日現在、それぞれ百万です。経営陣は引き続き営業損失を被ると予想しています。会社には、現金、現金同等物、制限付現金、および$の有価証券がありました331.2 百万と $272.8 2024年9月30日および2023年12月31日現在、それぞれ百万です。会社は$を持っていました200.0 2024年9月30日現在のローン契約に基づく未払いの残高は100万です。注 7を参照してください。2024年10月8日、会社はドルを支払いました100現金でのローン契約に基づく元本の100万ドル。注 10を参照してください。
会社は、既存の資本リソースが、財務諸表発行日から少なくとも12か月間の予定された運営要件を満たすのに十分であると考えています。 会社の利用可能な現金、現金同等物、流動価格証券、および業務から予想される将来の現金フローが、流動性要件を満たすのに不十分である場合、会社は運営資金調達のために追加の資本を調達する必要があるかもしれません。 追加の必要資金が会社にとって受け入れ可能な条件で利用可能であるかどうか、あるいは全く利用可能かどうかについては、何ら保証することはできません。 必要な時に受け入れ可能な条件で十分な資金が利用できない場合、会社は一部の計画された活動を制限する必要があるかもしれません。 判断力のある支出管理や必要に応じて追加の資金を調達することに失敗すると、会社の意図したビジネス目標を達成する能力に悪影響を及ぼし、業績および将来の展望に悪影響を及ぼす可能性があります。
2.  
「Performance-Based Awards（成果に基づく受賞）」は、第7.7条に基づき、委員会によって設定されたパフォーマンス目標や他の事業目標の達成に依存して現金、株式またはその他の受賞を受け取るための受賞です。
会社の要約連結された財務諸表 会社の要約連結された財務諸表は、米国一般会計原則（"U.S. GAAP"）に従って作成されています。要約された連結された財務諸表には、会社の完全所有子会社が含まれています。全ての重要な関連会社間の残高と取引は、除去されています。
見積もりの使用
米国会計基準（U.S. GAAP）に準拠して収束化された連結財務諸表の作成には、経営陣が財務諸表および添付注釈に報告される金額に影響を与える見積りや仮定を行う必要があります。経営陣は継続的に、このような見積りや仮定を合理性を保つために評価しています。特に、経営陣は売上認識、研究開発活動に対する涵充金、デリバティブ負債の公正価値、株式ベースの報酬費用、および法人税に関する見積りを行っています。使用された見積もりに対する適切な調整は、定期的な評価に基づいて将来的に行われます。実績はこれらの見積りと異なる場合があります。
$ millionまでの総元本額のローンに関する施設契約
2024年9月30日現在の中間の要約連結貸借対照表、2024年9月30日および2023年9月30日に終了した3か月および9か月の中間の要約連結損益計算書と包括損益計算書、2024年9月30日および2023年9月30日時点の株主資本の変動の要約連結貸借対照表、2024年9月30日および2023年9月30日に終了した9か月の中間の要約連結キャッシュ・フロー計算書は未監査です。これらの未監査の中間の要約連結財務諸表は、会社の監査を受けた年次財務諸表と同じ基準で作成されており、経営陣の見解では、会社の財務情報を公正に表示するには必要なすべての調整（通常の繰り返し調整だけで構成）を反映しています。 3か月および9か月に関連する中間の中間の要約連結財務諸表に開示された財務データおよびその他の財務情報も未監査です。 2024年9月30日に終了した3か月および9か月の要約連結業績は、2024年12月31日または将来の年次または中間期間に期待される結果を必ずしも示すものではありません。 2023年12月31日時点の要約連結貸借対照表は、当該日付の監査された財務諸表から派生しています。 米国公認会計士協会の基準に従って作成された年次財務諸表に通常含まれる一部の情報や脚注開示が簡略化されたり省略されているため、これらの未監査の中間の要約連結財務諸表は2023年12月31日までの年次報告書に掲載されている会社の監査済み財務諸表と併せて読むべきです。 3か月および9か月の期間に関連する要約連結財務諸表に関連する財務データも未監査です。 2024年9月30日に終了した3か月および9か月の要約連結業績は、2024年12月31日に期待される結果を必ずしも示しているわけではなく、将来の年次または中間期間に期待される結果を示しているわけではありません。 2023年12月31日時点の要約連結貸借対照表は、当該日付の監査された財務諸表から派生しています。 米国公認会計士協会の基準に従って作成された年次財務諸表に通常含まれる一部の情報や脚注開示が簡略化されたり省略されているため、これらの未監査の中間の要約連結財務諸表は2023年12月31日までの年次報告書に掲載されている会社の監査済み財務諸表と併せて読むべきです。
7
目次
アーキューティス・バイオセラピューティクス、インク。
総合財務諸表の注釈
(未監査)
制限付きの現金
2024年9月30日および2023年12月31日時点で、会社はそれぞれ制限付き現金を保有していました。0.6百万ドルと$0.9 会社の改訂されたオフィススペースの賃貸借契約に関連する信用状の担保として、それぞれの資金があります。
クレジットリスクの集中とその他のリスクと不確実性
重要な信用リスクの集中度を持つ可能性のあるファイナンシャルインスティテューションズは、主に現金、現金同等物、売り手証券、および売掛金です。企業は、連邦で保険がかけられたファイナンシャルインスティテューションズに連邦で保険がかけられた上限を超える預金を保有しています。企業は、現金を保有するファイナンシャルインスティテューションズ、または取引先が負っている売掛金に関して記録された範囲で賠償すべき場合、信用リスクにさらされています。 貸借対照表。売掛金の信用リスクを管理するために、企業は顧客の信用力と潜在的な信用損失のための引当金の必要性を評価しています。
公正価値計測
会社の金融商品は、Note 4に記載されているものに加えて、現金同等物、売掛金、買掛金、未払金および長期債務を含んでいます。売掛金、買掛金、未払金の帳簿価額は、それらの短期満期により公正価値にほぼ等しいと考えられます。一方、長期債務は定期的にリセットされる市場金利に基づく変数金利に応じていますので、会社では長期債務の帳簿価額が公正価値にほぼ等しいと考えています。
資産と負債は、継続的な基盤上で公正価値に記録されており、バランスシートでは、それらの公正価値を測定するために使用される入力に関連する判断のレベルに基づいて分類されています。公正価値とは、資産の受領価格または負債を譲渡するために支払われる脱退価格であり、資産または負債が計測される日の主要または最も有利な市場での市場参加者間の秩序だった取引であると定義されています。公正価値を測定するために使用される評価手法は、観察可能な入力の使用を最大化し、観察不可能な入力の使用を最小限に抑える必要があります。公正価値に関する権威あるガイダンスは、公平価値測定のための3段階の公正価値階層を開示するための基準を次のように定めています。 資産と負債は、開示目的のために公正価値階層に分類されたバランスシートに記録され、その公正価値を測定するのに使用される入力に関連する判断のレベルに基づいてカテゴリ分類されます。公正価値は、資産の受領価格または負債を転送するために支払われる脱退価格と定義されています。公正価値は、資産または負債についての計測日において、資産または負債に関して最も主要または有利な市場において取引の秩序ある状態で市場参加者間の取引で得られる交換価格です。公正価値を測定するために使用される評価技術は、観測可能な入力の活用を最大限にすることと、観察不可能な入力の使用を最小限にする必要があります。公平価値測定に関する権威あるガイダンスは、公平価値測定の開示のために3段階の公正価値階層を確立しています。
資産や負債の計測日における同一の資産や負債についての調整されていない有効な市場での価格として引用される水準1の観測可能な入力
2 レベル - 引用された価格を除く入力（資産または負債のために直接または間接的に観察可能なもの）は、活発な市場の類似の資産や負債に対する引用された価格、および非活動的な市場における同一または類似の資産や負債に対する引用された価格が含まれます;
レベル3-市場活動が少ないか全くなく、資産や負債の公正価値に重要な影響を与える観測不能な入力
共同プロモーション契約
I2024年7月、会社はKowa Pharmaceuticals America, Inc.（"Kowa"）との共同推進契約を締結し、Kowaの主治医向けセールスフォースを活用して、2029年7月までのすべてのFDA承認適応に関して、プライマリケア医師や小児科医にZORYVEを独占的に販売、推進することとなりました。 会社はKowaに帰属する純売上高全てを認識し、KowaはKowaに帰属する純売上高に対して手数料を受け取りますが、これは販売、一般管理費用に反映されています。 2024年9月30日までの3か月間および9か月間の売上高にKowaに帰属する売上高は無視できるほどでした。
最近発行された会計基準
8
目次
アーキューティス・バイオセラピューティクス、インク。
総合財務諸表の注釈
(未監査)
2023年11月、財務会計基準委員会（"FASB"）が会計基準更新（"ASU"）2023-07を発行しました。セグメント報告（Topic 280）:報告セグメントの開示の改善公開企業は、報告セグメントの重要な費用やその他のセグメント項目に関する情報を四半期および年次で開示することが求められます。単一の報告セグメントを持つ公開企業は、ASU 2023-07における開示要件と、四半期および年次での会計基準コーディフィケーション（"ASC"）280におけるすべての既存のセグメント開示と調整要件を適用する必要があります。ASU 2023-07は、2024年12月31日に終了する年のForm 10-kで会社が採用する予定です。当社は現在、ASU 2023-07の適用の影響を評価しています。
3. 売上高
売上高はASC 606に基づいて認識されます。 契約に基づく収益. 以下の表は、提示された期間の会社の分割売上高を示しています（千）。
9月30日までの3か月間
9月30日までの9ヶ月間
2024202320242023
ZORYVEクリーム0.3％
$22,041 $8,109 $54,325 $15,660 
ZORYVEフォーム
20,262 — 40,405 — 
ZORYVEクリーム0.15％
2,452 — 2,452 — 
製品売上高合計(正味)
44,755 8,109 97,182 15,660 
その他の収入
— 30,000 28,000 30,420 
収益合計
$44,755 $38,109 $125,182 $46,080 
その他の売上高は主に佐藤および華東のライセンス契約に関連しています。ノート6を参照してください。

9
目次
アーキューティス・バイオセラピューティクス、インク。
総合財務諸表の注釈
(未監査)
4. 公正価値測定
次の表は、会社の財務資産を示し、フェアバリュー・ヒエラルキー内のレベル別に再発生的に評価されたものです（千単位で）:
2024年9月30日
派生負債 - 先物買付契約レベル2レベル3総計
資産:
すべて投信(1)
$134,851 $— $— $134,851 
預金証書
— 4,995 — 4,995 
企業債務証券— 99,222 — 99,222 
1. 私はApplied Materials, Inc.のこの第10-Qフォームの四半期報告書を確認しました；
91,493 — — 91,493 
総資産$226,344 $104,217 $— $330,561 
______________
(1)この残高には、毎晩の決済に必要な現金が含まれています。
2023年12月31日
レベル 1
レベル 2
レベル 3
合計
資産:
マネー・マーケット・ファンド(1)
$73,544$—$— $73,544 
コマーシャル・ペーパー— 11,806— 11,806 
企業債務証券— 59,954— 59,954 
米国財務省証券126,557—— 126,557 
総資産$200,101$71,760$— $271,861 
______________
(1)この残高には、毎晩の決済に必要な現金が含まれています。
マネーマーケットファンドと米国債および機関債は、活発な市場での引用市場価格に基づいて評価されます。
コマーシャル・ペーパー、預金証書、企業債務証券は、第三者の価格付けサービスから得られた価格付けを考慮して評価されます。 価格付けサービスは、業界標準の評価モデルを利用し、収益および市場ベースのアプローチの両方を含む、すべての重要な入力値が観測可能であるかどうか直接的または間接的に見積もる公正な価値に対応しています。 これらの入力には、同じまたは類似の証券に関する報告された取引やブローカー/ディーラーの見積もり、発行者の信用スプレッド、基準証券、ヒストリカルデータに基づいた早期償還/デフォルトの予測、およびその他の観測可能な入力が含まれます。
10
目次
アーキューティス・バイオセラピューティクス、インク。
総合財務諸表の注釈
(未監査)
以下の表は、会社の現金、現金及び現金同等物、売買可能有価証券の概算価値、および未実現の保有利益と損失（千ドル単位）を要約したものです。
2024年9月30日
償却費用
費用		未実現
ヘッジによる未実現純利益(損失)		未実現
粗利益がマイナス		推定
公正価値
現金及び現金同等物：
すべて投信(1)
$134,851 $— $— $134,851 
現金及び現金同等物の総計$134,851 $— $— $134,851 
売買可能証券：
預金証書
4,995 — — 4,995 
企業債務証券98,981 241 — 99,222 
1. 私はApplied Materials, Inc.のこの第10-Qフォームの四半期報告書を確認しました；
91,106 388 (1)91,493 
全セクターの売却可能証券$195,082 $629 $(1)$195,710 
______________
(1)この残高には、毎晩の決済に必要な現金が含まれています。
2023年12月31日
償却済み
コスト		未実現
利益		未実現
損失		推定
公正価値
現金および現金同等物:
マネー・マーケット・ファンド(1)
$73,544 $— $— $73,544 
企業債務証券14,851 3 — 14,854 
現金および現金同等物の合計$88,395 $3 $— $88,398 
市場性のある証券:
コマーシャル・ペーパー$11,817 $1 $(12)$11,806 
企業債務証券45,056 45 (1)45,100 
米国財務省証券126,492 82 (17)126,557 
市場性のある有価証券の合計$183,365 $128 $(30)$183,463 
______________
(1)この残高には、毎晩の決済に必要な現金が含まれています。

2024年9月30日、2023年および2024年の三ヶ月または九ヶ月時点における投資の実現した利益または損失は、 なし重要性がない。2024年9月30日時点において、信用損失は存在しないと判断されたが、それはこれらの証券の時点での購入以降の市場金利の変動によるものであり、発行者の信用力の悪化によるものではない。2024年9月30日および2023年12月31日時点で、全証券は短期（[NUM]ヶ月）とし、全証券の未実現損失が連続して1年未満の間、損失を被っている。会社は一般的に、売却時期まで売却予定ではなく、また、未実現損失のポジションにある投資を元本償還の回復がされるまで売却する必要もない。 18 全証券は概ね満期まで保有し、元本償還の回復がされるまで、未実現損失のポジションにある投資を売却するつもりはなく、また売却する必要もない。
11
目次
アーキューティス・バイオセラピューティクス、インク。
総合財務諸表の注釈
(未監査)
以下の表は、2024年9月30日までの9か月間における埋め込み派生金融商品の公正価値の変化を要約したものです（千単位）。 なし 2023年9月30日までの9か月間には活動がありました。
9月30日、
2024
前日残高
$849
公正価値変動利益
(429)
終了残高
$420
会社の埋め込み派生商品の公正価値は市場で観察されない重要な要素に基づいており、したがってレベル3の測定を表しています。埋め込み派生商品に関するさらなる議論については、ノート7を参照してください。
5. 貸借対照表の構成要素
在庫
在庫の部品は次のようにまとめられます（千単位で）：
2024年9月30日2023年12月31日
原材料$4,089 $9,951 
作業中1,782 486 
製品8,144 2,697 
在庫総額$14,015 $13,134 
前払費用およびその他の流動資産
前払いおよびその他の流動資産の詳細は以下の通りです（単位：千ドル）:
2024年9月30日2023年12月31日
プリペイド共同支援プログラムとリベート
$8,935 $8,608 
前払い保険739 864 
支払済みのクリニカルトライアル費用— 1,024 
その他の前払い費用および流動資産8,734 8,208 
前払費用およびその他の流動資産合計$18,408 $18,704 
未払費用
未払い負債は以下の通りです（千ドル単位）：
2024年9月30日2023年12月31日
販売控除の発生$30,029 $11,578 
未払いの報酬15,636 14,872 
臨床試験の積立292 4,192 
発生利息およびその他流動負債6,833 3,299 
未払費用の合計$52,790 $33,941 
6. ライセンス、共同研究、共同販売契約
佐藤ライセンス契約
2024年2月27日、会社は佐藤製薬株式会社（以下「佐藤」）とライセンス契約を締結しました。ライセンス契約の条件に従い、会社は佐藤に対して独占的でサブライセンス可能な権利を付与します。
12
目次
アーキューティス・バイオセラピューティクス、インク。
総合財務諸表の注釈
(未監査)
（特定の状況下で）モノが発展するために, 会社が管理している特許権およびノウハウに基づくライセンスを佐藤氏に付与し、ロフルミラスト製剤（「ライセンス製品」という）を全セクターの特定の皮膚疾患適応症のためのすべての治療用途で日本のフィールドで製造し、市販し、その他の利用をする活動を行うための医療事務活動。」
ライセンス契約には、各当事者がライセンス製品の開発、医療業務活動、製造および供給、商品化に関する各自の義務が規定されています。ライセンス契約の条件に基づき、佐藤は、自費で日本の分野におけるライセンス製品に関連する開発、規制承認の取得、商品化、および医療業務活動を行い、一部の会社の承認および監督権利に従います。
ライセンス契約の条件に基づき、会社は前払い金$を受け取り、追加の支払いを受け取る可能性があります。25.0特定の規制上のマイルストーンの達成に伴い、最大合計$に達するまで、追加支払いがあります。10.0特定の販売上のマイルストーンの達成に伴い、最大合計$に達するまで、追加支払いがあります。30.0また、日本において特許ライセンス契約に基づくSatoによる許諾製品の商業販売開始から、(i)会社がSatoにライセンス契約に基づき日本の該当許諾製品に関して許諾した知的財産権の最終有効請求の有効期限切れ、(ii)該当許諾製品に対する日本における規制独占権の有効期限切れ、または(iii)該当許諾製品の日本における商業販売開始後、最新の時点まで、ライセンスされた製品ごとに会社は、Sato、その関連会社および許諾者による全てのライセンス製品の年間純売上高に対して低二桁から中二桁の割合のロイヤルティを受け取ります。 10年 特定のロイヤルティ削減に従う全ライセンス製品のSato、その関連会社および許諾者による純売上高に低二桁から中二桁の割合のロイヤルティを、日本において特許ライセンス契約に基づき、許諾された最初の商業販売後の末尾まで受け取ります。
ライセンス契約の期間は、ライセンス製品ごとにロイヤルティー期間が満了するまで継続します。当事者のいずれかが重大な違反を行った場合、救済期間を設けるか、もしくはもう一方が破産した場合、ライセンス契約はいずれかの当事者が全面的に解約することができます。サトは、書面による通知をもって、いつでも全面的にライセンス契約を解除することができます。 90 当該法下で取り消し可能性がない限り、会社は、サト、その関連会社またはサブライセンシーが、会社からサトにライセンスされた特許または特許出願の範囲、有効性、執行可能性について争うか、第三者を支援する場合、ライセンス契約を全面的に解約することがあります。会社はまた、サトまたはその役員、役員、従業員、代理人、関連会社、サブライセンシー、またはサブコントラクターが、汚職、マネーロンダリング防止、制裁措置、輸出入制御法令のいずれかに違反した場合、またはライセンス契約の条件に基づき、サト、その関連会社およびサブライセンシーが一定期間内に日本でライセンス製品の実質的な開発または商業化活動を行わない場合、ライセンス契約を解約することがあります。
佐藤契約に基づくその他の売上高は、 なしと $25.0それぞれ2024年9月30日までの3か月と9か月で、それぞれ〇〇百万ドルでした。
華東ライセンス及び協力契約
2023年8月、会社は杭州中美華東製薬有限公司（以下「華東」という）の完全子会社である華東医薬品股份有限公司とのライセンス及び共同開発契約を締結しました。契約の条件に基づき、会社は華東に、一部の特許権および同社の管理下にあるノウハウに関して、クリームおよびフォーム剤のロフルミラストのヒト皮膚病変治療用途に関して、グレーターチャイナ（中国本土、香港、マカオ、台湾）および東南アジア（インドネシア、シンガポール、フィリピン、タイ、ミャンマー、ブルネイ、カンボジア、ラオス、マレーシア、ベトナム）での販売、その他の製造、開発、医療関連活動実施などの独占的かつサブライセンス可能な（一部の条件の下で）ライセンスを与えました（以下、「華東ライセンス製品」という）。
華東は費用をかけて、華東ライセンス製品の開発、規制承認の取得、商品化、および医療関連業務を行うこととし、一部の会社の承認および監督権限の対象となります。会社は、華東地域外のロフルミラストの局所製剤の開発、製造、および商品化の独占権利を保持します。
華東契約に基づいて付与された権利の対価として、華東は2023年9月の契約締結時に、契約条件に従って返金不可の前払い金を会社に支払いました。会社は$の純支払いを受け取りました27.0百万、これは$で構成されていました30.0100万ドルの前払い金から、中国で適用される源泉徴収義務の$を差し引いたものです3.0百万。さらに、会社は$の支払いを受け取りました3.02024年3月には、開発と規制上のマイルストーンの達成に関連して100万件になりました。会社はまた潜在的に
13
目次
アーキューティス・バイオセラピューティクス、インク。
総合財務諸表の注釈
(未監査)
特定の開発および規制上のマイルストーンの達成に応じて、最大総額$◯百万までの追加支払いを受け取ります21.0特定の販売上のマイルストーンの達成に応じて、最大総額$◯百万までの追加支払いを受け取ります40.3そして、華東ライセンス製品の純売上高に対する低二桁から高二桁の段階的パーセンテージの印税を受け取ります
華東協定の条件は、ライセンス製品ごとに、国または地域ごとに、ロイヤルティ期間の満了まで継続されます。ロイヤルティ期間の満了は次のとおりです。 (i) 華東ライセンス製品に関連する最後の有効特許請求の有効期限日、(ii) 華東ライセンス製品の初の商業販売後、および(iii) 華東ライセンス製品に対する規制独占権の満了後です。ライセンス契約は、特定の事情の下で両当事者によって終了される可能性があります。 10年 華東ライセンス製品の最初の商業販売後、および華東ライセンス製品に関連する最後の有効特許請求の有効期限日、および華東ライセンス製品に対する規制独占権の満期後、Huadong協定の期間は、ライセンス製品ごとに、国または地域ごとに、ロイヤリティ期間の満了まで続きます。両当事者によって特定の事情の下でライセンス契約を終了させることができます。
2024年9月30日終了の3か月および9か月について、会社は売上高としてそれぞれ〇〇百万ドルを認識しました。 なしと $3.02024年9月30日終了の3か月および9か月について、会社は開発および規制上のマイルストーンの達成に関連するその他の売上高とそれぞれ△△百万ドルの所得税費用を認識しました。 なしと $0.32023年9月30日終了の3か月および9か月について、会社はその他の売上高として□□百万ドル、所得税費用として$30.0□□百万ドルを認識しました。3.0契約に基づき、前払金に関連する所得税費用は1000万ドルです。
アストラゼネカのライセンス契約
2018年7月、会社はアストラゼネカAb（「アストラゼネカ」という）との排他的なライセンス契約、またはアストラゼネカライセンス契約に署名した。この契約により、会社はアストラゼネカが管理する特許権、ノウハウ、規制文書の一部において、ロフルミラストを含む製品の研究、開発、製造、商業化、およびその他の利用について、世界的な排他的なライセンス及び引き続き再許可する権利を付与されました。ビー・オブを含む外用製剤、およびロフルミラストの投与に使用または販売されるデリバリーシステム、または総称してAZ-Licensed Products、について、ヒトの皮膚疾患の診断、予防および治療用途全般、または皮膚科領域に利用するための。この契約に基づき、会社はアストラゼネカライセンス製品の皮膚科領域における開発、規制、商業化活動の唯一の責任を負い、商業化のために商業的に合理的な努力を行い、アストラゼネカライセンス製品の取得およびメンテナンスのための規制承認を取得し、またイギリス、フランス、中国、日本の各地域において、アストラゼネカライセンス製品の皮膚科領域における商業化についての独占的な権利を有します。アメリカ、イタリア、スペイン、ドイツ、イギリス、フランス、中国、そして日本全セクターでの診断、予防、治療用途におけるAZ-Licensed Productsを開発、規制承認取得、および商業化するために商業的に合理的な努力を尽くします。
会社はアストラゼネカに$の前払い（返金不可）の現金支払いを行いました。1.0100万件発行済み 484,388 ドル相当のシリーズb転換優先株の株式3.0アストラゼネカライセンス契約の日付には100万ドル。これらは両方とも研究開発費に計上されました。その後、会社はアストラゼネカに最初のマイルストーン現金での支払いとして$を支払いました2.02019年8月にAZライセンス製品の第2相陽性データを達成するための尋常性乾癬に対するZORYVEクリームの第20相試験が完了すると、100万円が研究開発費に計上されました。2022年の第3四半期に、会社はドルを支払いました7.5無形資産として記録されたZORYVEクリーム 0.3% の承認により、アストラゼネカに100万円が寄付されました。2024年の第3四半期には、$5.0100万ドルに達すると、会社がアストラゼネカに支払うようになりました100.0全世界の純売上高は100万件で、無形資産の帳簿価額の累積キャッチアップ調整として記録されました。会社は無形資産を耐用年数にわたって売上原価に償却しています 10 最初の商用販売日から数年です。これは、関連するライセンス契約が有効になる最低期間です。償却費用は $でした1.2百万と $1.62024年9月30日に終了した3か月と9か月間のそれぞれ100万ドル。これには、最初の商業売却日から耐用年数にわたって第3四半期に達成されたマイルストーンに関連する償却費の累積キャッチアップが含まれます。償却費用は $でした0.2百万と $0.62023年9月30日に終了した3か月と9か月でそれぞれ100万です。
当社は、アストラゼネカに$の追加現金支払いを行うことに同意しました5.0AZライセンス製品に関する特定の規制当局の承認マイルストーンを達成し、$を支払うと100万ドル10.0会社が$を達成したら百万250.0全世界の純売上高は百万です。当社がアストラゼネカライセンス契約に基づいて商品化するすべてのAZライセンス製品に関しては、当社、その関連会社、およびそのサブライセンス対象者の当該AZライセンス製品の純売上高に対して、特定の減額を条件として、低額から高額の1桁の割合のロイヤルティレートをアストラゼネカに支払います。ただし、AZライセンス製品ごとおよび国ごとに決定されるまで、特定の減額が適用されます。国単位で、その国で有効な請求を含む、その国で有効な請求権を含むアストラゼネカライセンス特許権の有効期限が切れる日と、最初の特許権からのいずれか遅い方そのような国でのそのようなAZライセンス製品の商業販売。2022年8月にZORYVEクリーム 0.3% が商品化された結果、当社はアストラゼネカに支払うロイヤリティの計上を開始しました。ロイヤリティは売上原価と未払負債に記録されます。ロイヤリティ
14
目次
アーキューティス・バイオセラピューティクス、インク。
総合財務諸表の注釈
(未監査)
expense was $1.4 million and $3.0 million during the three and nine months ended September 30, 2024, respectively. Royalty expense during the three and nine months ended September 30, 2023 were not material.
For the three and nine months ended September 30, 2024, a $5.0 million milestone payment became payable by the Company to AstraZeneca upon achievement of $100.0 million in worldwide net sales, which was paid in October 2024. There were no milestone payments made or payable in connection with AZ-Licensed Products for the three and nine months ended September 30, 2023.
7. Long-term Debt
On December 22, 2021, the Company entered into a loan and security agreement (the "Prior Loan Agreement") with SLR Investment Corp. ("SLR") and the lenders party thereto. The Prior Loan Agreement was amended and restated on January 10, 2023 (the "AR Loan Agreement") to include Arcutis Canada, Inc. as a borrower and party. On November 1, 2023, the Company entered into an amendment to the AR Loan Agreement to, among others, (i) modify the financial covenant relating to minimum net product revenue, and (ii) include an additional minimum financing covenant. On August 9, 2024, the Company entered into a second amendment to the AR Loan Agreement (the AR Loan Agreement, as amended by the first and second amendments, the "Loan Agreement"), which it determined be a modification, to, among others, (i) permit, during the period commencing on October 7, 2024 and ending on December 15, 2024, an optional partial prepayment of term loans outstanding, subject to a 1.0% prepayment penalty (the “2024 Partial Prepayment”), (ii) add the tranche C-1 and tranche C-2 term loans, and (iii) facilitate certain other changes, including with respect to the applicable interest rate and maturity date in the event of a 2024 Partial Prepayment. As security for the obligations under the Loan Agreement, the Company granted SLR, for the benefit of the lenders, a continuing security interest in substantially all of the Company's assets, including its intellectual property, subject to certain exceptions. The term loan facility is comprised of (i) a tranche A term loan of $75.0 million, (ii) a tranche B-1 term loan of $50.0 million, (iii) a tranche B-2 term loan of up to $75.0 million, (iv) a tranche C-1 term loan of up to $50.0 million, and (v) a tranche C-2 term loan of up to $50.0 million (collectively, the "Term Loans"). The tranche A term loan was funded on December 22, 2021. With the approval of ZORYVE cream 0.3% on July 29, 2022, the tranche B term loans were funded on August 2, 2022. As of each of December 31, 2023 and September 30, 2024, the aggregate principal amount outstanding under the Loan Agreement was $200.0 million.
On October 8, 2024, the Company made a 2024 Partial Prepayment of $100.0 million, which reduced the aggregate principal amount outstanding under the Loan Agreement to $100.0 million. See Note 10. Since this payment was reasonably expected to be made as of September 30, 2024 and it would require the use of current assets, the Company reclassified $99.5 million, the payment net of the short-term portion of debt issuance costs, from long term liabilities to current liabilities as of September 30, 2024. In connection with the 2024 Partial Prepayment, the Company is obligated to pay a prepayment penalty of $1.0 million by June 30, 2026 and a final fee of $6.95 million, representing the final fee applicable to the amount of the 2024 Partial Prepayment, on January 1, 2027.
As a result of such 2024 Partial Prepayment, subject to the Company generating a minimum net product revenue for the trailing six (6) month period ending as of the month prior to the borrowing date equal to 80% of the Company’s projected net product revenue as set forth in its annual plan for the respective period, the Company will be able to draw down the tranche C-1 and tranche C-2 term loans. The tranche C-1 term loan availability will expire on March 31, 2026 and the tranche C-2 term loan availability will expire on June 30, 2026. In addition, as a result of the 2024 Partial Prepayment, (i) the maturity date of the Loan Agreement is August 1, 2029, (ii) the applicable per annum interest rate is equal to 5.95% plus the greater of (a) 2.50% per annum and (b) the one-month Secured Overnight Financing Rate ("SOFR"), (iii) the Company is no longer subject to certain cost and purchase price restrictions regarding acquisitions, and (iv) the Company may prepay principal amounts outstanding under the Term Loans in minimum increments of $25.0 million, subject to a prepayment premium of (a) 3.0% for any prepayment made prior to the first anniversary of the second amendment, (b) 2.0% for any prepayment made prior after the first anniversary of the second amendment and prior to the second anniversary of the second amendment, or (c) 1.0% for any prepayment made prior after the second anniversary of the second amendment and prior to the maturity date.
15
Table of Contents
ARCUTIS BIOTHERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Principal amounts outstanding under the Term Loans will accrue interest at a floating rate equal to the applicable rate in effect from time to time, as determined by SLR on the third business day prior to the funding date of the applicable Term Loan and on the first business day of the month prior to each payment date of each Term Loan. Prior to the 2024 Partial Prepayment, the applicable rate was a per annum interest rate equal to 7.45% plus the greater of (a) 0.10% and (b) the one-month SOFR. On September 30, 2024, the rate was 11.12%. As a result of such 2024 Partial Prepayment, the applicable interest rate will be a per annum interest rate equal to 5.95% plus the greater of (a) 2.50% and (b) the one-month SOFR. The benchmark SOFR is subject to change in the event of certain events with respect to the benchmark rate. Interest payments are payable monthly following the funding of any Term Loan.
If the Term Loans are accelerated due to, among others, the occurrence of a bankruptcy or insolvency event, the Company is required to make mandatory prepayments of (i) all principal amounts outstanding under the Term Loans, plus accrued and unpaid interest thereon through the prepayment date, (ii) any fees applicable by reason of such prepayment, (iii) the prepayment premiums set forth in the paragraph above, plus (iv) all other obligations that are due and payable, including expenses and interest at the Default Rate (as defined below) with respect to any past due amounts.
The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among others, requirements as to financial reporting and insurance and restrictions on the Company’s ability to dispose of its business or property, to change its line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on its property, to pay any dividends or other distributions on capital stock other than dividends payable solely in capital stock or to redeem capital stock. The Company also agreed to a financial covenant whereby the Company must generate a minimum net product revenue equal to 75% of its projected net product revenue as set forth in the Company's annual plan for the respective period, tested on a trailing six-month basis, as of the end of each month. Each annual plan shall be approved by the Company’s board of directors and SLR, in its capacity as collateral agent, in its reasonable discretion. Any failure by the Company to deliver such annual plan on or before December 15 of the prior year shall be an immediate event of default. The Company was in compliance with all covenants under the Loan Agreement as of September 30, 2024.
In addition, the Loan Agreement contains customary events of default that entitle the lenders to cause any indebtedness under the Loan Agreement to become immediately due and payable, and to exercise remedies against the Company and the collateral securing the Term Loans. Under the Loan Agreement, an event of default will occur if, among other things, the Company fails to make payments under the Loan Agreement, the Company breaches any of the covenants under the Loan Agreement, subject to specified cure periods with respect to certain breaches, the lenders determine that a material adverse change has occurred, or the Company or the Company's assets become subject to certain legal proceedings, such as bankruptcy proceedings. Upon the occurrence and for the duration of an event of default, an additional default interest rate, or the Default Rate, equal to 4.0% per annum will apply to all obligations owed under the Loan Agreement. The prepayment upon default and other potential additional interest provisions under the Loan Agreement were determined to be a compound embedded derivative instrument to be bifurcated from the loan and accounted for as a separate liability for accounting purposes under the guidance in ASC 815, Derivatives and Hedging. At the inception of the Loan Agreement, the fair value of the embedded derivative was determined to be immaterial. The embedded derivative instrument is remeasured at fair value each reporting period with any future changes in fair value reported in Other income, net in the condensed consolidated statement of operations and comprehensive loss. During the three and nine months ended September 30, 2024, the Company recognized a $0.2 million loss and $0.4 million gain in Other income, net, respectively, related to the change in fair value of the embedded derivative instrument. The fair value of the embedded derivative instrument as of September 30, 2024 and December 31, 2023 was a liability of $0.4 million and $0.8 million, respectively, and is included in Other long-term liabilities in the accompanying condensed consolidated balance sheets. See Note 4.
In connection with the Loan Agreement, the Company is obligated to pay (i) a final fee equal to 6.95% of the aggregate original principal amount of the Term Loans outstanding as of the date of the second amendment (x) with respect to any 2024 Partial Prepayment, upon the earliest to occur of (a) January 1, 2027, (b) the acceleration of all outstanding Term Loans and (c) the prepayment, or refinancing, substitution or replacement of all outstanding Term Loans, and (y) with respect to the Term Loans outstanding as of the date of the second amendment (other than the 2024 Partial Prepayment), upon the earliest to occur of (a) the maturity date, (b) the acceleration of all outstanding Term Loans and (c) the prepayment, or refinancing, substitution or replacement of all outstanding Term Loans, (ii) a
16
Table of Contents
ARCUTIS BIOTHERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
2.00% fee with respect to tranche C term loans, due and payable on the earliest to occur of (a) the maturity date, (b) the acceleration of all outstanding Term Loans and (c) the prepayment, or refinancing, substitution or replacement of all outstanding Term Loans, (iii) a 2.00% extension fee with respect to tranche C term loans which remain unfunded after December 31, 2025, which shall accrue during the period commencing January 1, 2026, and ending on the earliest to occur of (a) the expiration of the tranche C term loan availability, and (b) the date on which tranche C term loan is fully drawn, and (iv) a certain amount of lenders’ expenses incurred in connection with the execution of the Loan Agreement. Additionally, in connection with the original Prior Loan Agreement, the Company previously had entered into an Exit Fee Agreement, whereby the Company agreed to pay an exit fee in the amount of 3.0% of each Term Loan funded upon (i) any change of control transaction or (ii) a revenue milestone, calculated on a trailing six-month basis. Notwithstanding the prepayment or termination of the Term Loan, the exit fee will expire 10 years from the date of the Loan Agreement.
The debt issuance costs have been recorded as a debt discount which are being accreted to interest expense through the maturity date of the term loan. Interest expense is calculated using the effective interest method, and is inclusive of non-cash amortization of debt issuance costs. The final maturity payment of $13.9 million is recognized over the life of the term loan through interest expense. At September 30, 2024 and December 31, 2023, the effective interest rate was 12.40% and 14.81%, respectively. Interest expense relating to the term loan for the three and nine months ended September 30, 2024 was $6.6 million and $21.6 million, respectively, and $7.6 million and $22.0 million for three and nine months ended September 30, 2023.
The following summarizes additional information related to the Company's long-term debt (in thousands):
September 30, 2024December 31, 2023
Long-term debt, gross
$200,000 $200,000 
Accrued final fee6,970 4,876 
Unamortized debt issuance costs(2,362)(3,077)
Total carrying value of debt
204,608 201,799 
Less current portion
(99,513)— 
Total long-term debt, net
$105,095 $201,799 
Based on the Company's long-term debt outstanding at September 30, 2024, a payment of principal and final fees of $213.9 million would be due on January 1, 2027, the contractual maturity of the long-term debt as of September 30, 2024. This amount decreased and the contractual maturity date was extended following the 2024 Partial Prepayment in October 2024. See Note 10.
8. Stock-Based Compensation
Stock Option Exchange Program
On January 16, 2024, the Company commenced an offer to certain eligible employees and consultants to exchange certain outstanding eligible options to purchase shares of the Company’s common stock for a lesser number of restricted stock unit ("RSU") awards pursuant to an option exchange program (the “Option Exchange”). The Option Exchange expired on February 12, 2024. Pursuant to the Option Exchange, eligible option holders elected to exchange, and the Company accepted for cancellation, eligible options to purchase an aggregate of 5,059,129 shares of the Company’s common stock, representing approximately 98% of the total shares of common stock underlying the eligible options. On February 13, 2024, immediately following the expiration of the Option Exchange, the Company granted 2,129,594 shares of Replacement RSU Awards, pursuant to the terms of the Option Exchange. The Replacement RSU Awards will vest based on continued service with the Company over a period of either 1, 2 or 3 years, depending on the grant date of the exchanged options.
The exchange of stock options was treated as a modification for accounting purposes, which requires an incremental expense of $8.6 million to be recognized for the Replacement RSU Awards over their new service
17
Table of Contents
ARCUTIS BIOTHERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
periods (1 - 3 years). In addition, any unamortized expense remaining on the exchanged options as of the modification will be recognized over their original remaining service period.
Stock Option Activity
The following summarizes option activity:
Number of
Options
Weighted-
Average
Exercise
Price
Remaining
Contractual
Term
(Years)
Aggregate
Intrinsic
Value ($, in thousands)
Balance—December 31, 20237,919,699 $18.52 7.35$1,435 
Granted3,677,916 5.18 
Exercised(307,919)4.17 
Forfeited(1)
(5,346,477)22.49 
Expired(308,725)24.44 
Balance—September 30, 20245,634,494 $6.51 8.04$23,561 
Exercisable—September 30, 2024
2,120,880 $8.16 6.14$8,715 
______________
(1)The number of stock options forfeited includes those exchanged in the Option Exchange as described above.
The aggregate intrinsic value is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock as of September 30, 2024. The intrinsic value of options exercised for the nine months ended September 30, 2024 and 2023 was $1.7 million and $1.2 million, respectively.
The total grant-date fair value of the options vested during the nine months ended September 30, 2024 and 2023 was $3.1 million and $22.1 million, respectively. The weighted-average grant-date fair value of employee options granted during the nine months ended September 30, 2024 and 2023 was $3.64 and $8.76, respectively.
Restricted Stock Unit Activity
The following table summarizes information regarding the Company's RSUs:
Number of UnitsWeighted-Average
Grant Date Fair Value
Balance—December 31, 20232,929,602 $15.24 
Granted(1)
5,760,872 5.03 
Vested(1,363,491)11.40 
Forfeited(839,143)8.67 
Unvested Balance—September 30, 20246,487,840 $7.83 
______________
(1)The number of RSU's granted includes those in association with the Option Exchange as described above.
The grant date fair value of an RSU equals the closing price of the Company's common stock on the grant date. RSUs generally vest equally over four years, except those issued in connection with the Option Exchange as described above.
18
Table of Contents
ARCUTIS BIOTHERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Stock-Based Compensation Expense
Stock-based compensation expense included in the condensed consolidated statements of operations and comprehensive loss was as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Research and development
$3,342 $4,058 $10,341 $11,966 
Selling, general, and administrative6,899 5,941 21,996 18,090 
Total stock-based compensation expense
$10,241 $9,999 $32,337 $30,056 
As of September 30, 2024, there was $28.7 million of total unrecognized compensation cost related to unvested options that are expected to vest, which is expected to be recognized over a weighted-average period of 2.2 years. As of September 30, 2024, there was $40.4 million of total unrecognized compensation cost related to RSUs that is expected to vest, which is expected to be recognized over a weighted-average period of 2.5 years.
In April 2024, in connection with the retirement of the former Chief Financial Officer, the Company modified the terms of this individual's historical stock awards. As a result of the modifications, the Company recognized $1.7 million of incremental stock compensation expense during the nine months ended September 30, 2024, which is included in selling, general and administrative expenses.
The fair value of stock option awards granted was estimated at the date of grant using a Black-Scholes option-pricing model with the following assumptions:
Nine Months Ended September 30, 2024Year Ended
December 31, 2023
Expected term (in years)
1.8 – 6.1
5.0 – 6.1
Expected volatility
79.1 – 83.2%
75.2 – 78.4%
Risk-free interest rate
3.9 – 5.0%
3.5 – 4.7%
Dividend yield
—%—%
9. Net Loss Per Share
Basic net loss per share is calculated by dividing the net loss by the weighted-average common shares outstanding. Pre-funded warrants to purchase 7,500,000 shares of the Company's stock were included in the weighted-average common shares outstanding used in calculating net loss per share for the three and nine months ended September 30, 2024.
The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect:
As of September 30,
20242023
Stock options to purchase common stock5,634,494 8,228,270 
Early exercised options subject to future vesting— 3,698 
RSUs subject to future vesting6,487,840 2,924,356 
ESPP shares subject to future issuance115,926 73,252 
Total12,238,260 11,229,576 

19
Table of Contents
ARCUTIS BIOTHERAPEUTICS, INC.
Notes to Condensed Consolidated Financial Statements
(unaudited)
10. Subsequent Events

On October 8, 2024, the Company made a 2024 Partial Prepayment of $100.0 million under the Loan Agreement. After the 2024 Partial Prepayment, based on the Company's long-term debt outstanding immediately following the 2024 Partial Prepayment, a payment of principal and final fees of $106.95 million would be due on August 1, 2029, the contractual maturity of the long-term debt following the 2024 Partial Prepayment. See Note 7.


20
Table of Contents
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto as of and for the year ended December 31, 2023 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the year ended December 31, 2023, which has been filed with the Securities and Exchange Commission ("SEC"). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans, objectives, expectations, projections, and strategy for our business, includes forward-looking statements that involve risks and uncertainties. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “should,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. As a result of many factors, including those factors identified below and those set forth in the “Risk Factors” section of our Annual Report on Form 10-K, our actual results and the timing of selected events could differ materially from the forward-looking statements contained in the following discussion and analysis.
Overview
We are a commercial-stage biopharmaceutical company focused on developing and commercializing treatments for dermatological diseases with high unmet medical needs. Our current portfolio is comprised of highly differentiated topical and systemic treatments with significant potential to treat immune-mediated dermatological diseases and conditions. We believe we have built the industry's leading platform for dermatologic product development and commercialization. Our strategy is to focus on validated biological targets, and to use our drug development platform and deep dermatology expertise to develop and commercialize differentiated products that have the potential to address the major shortcomings of existing therapies in our targeted indications. We believe this strategy uniquely positions us to rapidly advance our goal of bridging the treatment innovation gap in dermatology, while maximizing our probability of technical success and financial resources.
We launched our lead product, ZORYVE® (roflumilast) cream 0.3% ("ZORYVE cream 0.3%"), in August 2022 after obtaining our initial U.S. Food and Drug Administration ("FDA") approval for the treatment of plaque psoriasis, including psoriasis in the intertriginous areas (e.g. groin or axillae), in individuals 12 years of age or older. ZORYVE cream 0.3% is approved for once-daily treatment of mild, moderate, and severe plaque psoriasis with no limitations on location or duration of use. In October 2023, we received FDA approval for an expanded indication in plaque psoriasis down to 6 years of age. We are currently working with the FDA to potentially further expand this indication in plaque psoriasis down to 2 years of age following the generation of additional clinical data. In April 2023, we had our first commercial launch outside of the United States following Health Canada approval of ZORYVE cream 0.3% for the treatment of plaque psoriasis in individuals 12 years or age or older. ZORYVE cream 0.3% is a once-daily topical formulation of roflumilast, a highly potent and selective phosphodiesterase-4 ("PDE4") inhibitor. PDE4 is an established biological target in dermatology, with multiple PDE4 inhibitors approved by the FDA for the treatment of dermatological conditions.

In December 2023, we received FDA approval for ZORYVE® (roflumilast) topical foam 0.3% ("ZORYVE foam") for the treatment of seborrheic dermatitis in individuals aged 9 years and older, with no limitation on severity, location, or duration of use. ZORYVE foam has been shown to provide rapid disease clearance and significant reduction in itch in clinical trials. In a pivotal Phase 3 study, 80% of individuals treated with ZORYVE foam achieved the primary efficacy endpoint of IGA Success, defined as an IGA score of “clear” or “almost clear” plus a 2-point improvement at Week 8, and just over 50% of individuals achieved an IGA score of clear at Week 8. In addition, individuals treated with ZORYVE foam reported reductions in itch from baseline within 48 hours of first application. ZORYVE foam is a once-daily steroid-free foam and, as a PDE4 inhibitor, is the first drug approved for the treatment of seborrheic dermatitis with a new mechanism of action in over two decades. ZORYVE foam became commercially available in the United States in late January 2024, and announced Health Canada approval on October 18, 2024 and will become commercially available in Canada by the end of 2024. Seborrheic dermatitis is estimated to occur in as many as 10 million people in the United States, and is associated with a substantial psychosocial burden for those suffering from the disease.

21
Table of Contents


In addition to the approval of ZORYVE cream 0.3% for plaque psoriasis and ZORYVE foam for seborrheic dermatitis, we also received FDA approval for and commercially launched ZORYVE (roflumilast) cream 0.15% ("ZORYVE cream 0.15%"), (collectively, "ZORYVE") in July 2024 for the treatment of mild to moderate atopic dermatitis in adults and pediatric patients 6 years of age and older, with no limitation on location, body surface area treated, concomitant use, or duration of use. ZORYVE cream 0.15% is a once-daily, steroid-free cream that provides rapid disease clearance and significant reduction in itch and has been specifically developed to be a treatment option for long-term disease control. We have also completed a Phase 3 trial of ZORYVE cream 0.05% in pediatric patients 2 to 5 years of age with mild to moderate atopic dermatitis (INTEGUMENT-PED). Based on the positive results from the INTEGUMENT-PED study, and given our recent approval of ZORYVE cream 0.15% for the treatment of mild to moderate atopic dermatitis in individuals 6 years of age or older, we expect to submit a supplemental new drug application ("sNDA") for topical ZORYVE cream 0.05% for children 2 to 5 years of age in the first quarter of 2025. We conducted INTEGUMENT-OLE, an open label extension study of the long-term safety of ZORYVE cream 0.15% in subjects 6 years of age or older and ZORYVE cream 0.05% in subjects between the ages 2 and 5 years, for which we reported positive results in August 2024.
Beyond seborrheic dermatitis, we are also developing ZORYVE foam for scalp and body psoriasis and have successfully completed our Phase2b and pivotal Phase 3 clinical trials. We announced positive topline data in September 2022, and we submitted an sNDA to the FDA for a label expansion to include scalp and body psoriasis in adults and adolescents ages 12 and over, which was recently accepted by the FDA with a Prescription Drug User Fee Act ("PDUFA") target action date in May 2025.

Based on market research and our internal estimates, we estimate there is an overall patient market of approximately 15.2 million patients in the United States that are treated with topical therapies for plaque psoriasis, seborrheic dermatitis, and atopic dermatitis in dermatology offices (approximately 7.8 million) and outside dermatology (approximately 7.4 million). Of the patients that are treated in dermatology offices, we estimate that approximately 3.3 million of these patients are addressable or accessible with Medicare and Medicaid coverage and that approximately 4.4 million patients across plaque psoriasis, seborrheic dermatitis, and atopic dermatitis are covered by commercial insurance. Patients that are treated outside of dermatology offices are primarily addressable through primary care physicians and pediatricians.

In July 2024, we entered into a co-promotion agreement with Kowa Pharmaceuticals, Inc. to leverage Kowa's primary care sales force to exclusively market and promote ZORYVE in the United States to primary care practitioners and pediatricians for all FDA-approved indications until at least July 2029. Under the terms of the agreement, Kowa will receive a commission from net sales attributed to Kowa. Promotion of ZORYVE in primary care and pediatrics under the Kowa agreement began in late September.
In addition to ZORYVE, we are developing ARQ-255, a deep-penetrating topical formulation of ivarmacitinib, a potent and highly selective topical Janus kinase type 1 ("JAK1") inhibitor, designed to preferentially deliver the drug deep into the hair follicle, the site of inflammation in alopecia areata, in order to potentially develop the first topical treatment for this disease. We recently completed enrollment in a Phase 1b study evaluating ARQ-255 for the treatment of alopecia areata and expect data in the first half of 2025.
In September 2022, we acquired Ducentis BioTherapeutics LTD ("Ducentis") and its lead asset, DS-234 (now ARQ-234), a fusion protein that is a potent and highly selective checkpoint agonist of the CD200 Receptor (CD200R). Currently in the preclinical stage, we plan to develop ARQ-234 in atopic dermatitis, where we believe it could be a potentially highly complementary biologic treatment option to ZORYVE cream in that indication, if approved. ARQ-234 could potentially be used to treat other inflammatory conditions as well. We are working towards submitting an IND during 2025.
We have incurred net losses in each year since inception, including net losses of $129.3 million and $195.9 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, we had an accumulated deficit of $1,111.2 million and cash, cash equivalents, restricted cash, and marketable securities of $331.2 million. As of September 30, 2024, we had $200.0 million outstanding under the Loan Agreement, of which we paid down $100.0 million of principal from our available cash on October 8, 2024, with the right to re-draw that principal for a defined period. See Note 10 to the condensed consolidated financial statements for additional information.
We expect to continue to incur losses and significant expenses as we commercialize ZORYVE, and as we advance our product candidates and label extensions through clinical trials, regulatory submissions, and
22
Table of Contents
commercialization. We expect to incur significant and prioritized commercialization expenses related to the sales, marketing, manufacturing, and distribution of ZORYVE, while we focus our clinical development spend on ARQ-234, ARQ-255, and ZORYVE label extensions, if we obtain regulatory approval for them. If our available cash and marketable securities balances, amounts available under the Loan Agreement, and anticipated future cash flows from operations are insufficient to cover these expenses, we may need to fund our operations through equity or debt financings or other sources, such as future potential collaboration agreements. Adequate funding may not be available to us on acceptable terms, or at all. Any failure to obtain sufficient funds on acceptable terms as and when needed could have a material adverse effect on our business, results of operations, and financial condition. See “Liquidity, Capital Resources, and Requirements” below and Note 1 to the condensed consolidated financial statements for additional information.
We rely on third parties to conduct our nonclinical studies and clinical trials and for manufacturing and supply of our product candidates. We have no internal manufacturing capabilities, and we will continue to rely on third parties, many of whom are single source suppliers, for our nonclinical and clinical trial materials, as well as the commercial supply of our products.
23
Table of Contents
Components of Our Results of Operations
Revenue
Product Revenue, Net
In August 2022, in conjunction with the launch of our first FDA approved product, ZORYVE cream 0.3%, we began to recognize revenue from product sales, net of rebates, chargebacks, discounts, and other adjustments. Additionally, in June 2023, we began recognizing revenue net of deductions for ZORYVE cream 0.3% in Canada and, in January 2024, for ZORYVE foam. We received FDA approval of ZORYVE cream 0.15% for atopic dermatitis and began recognizing related revenues in July 2024. We will continue to evaluate trends related to revenue for ZORYVE. Additionally, if our development efforts for our other product candidates and ZORYVE label extensions are successful and result in regulatory approval, we may generate additional revenue in the future from product sales.
Other Revenue
Other revenue relates to our license agreements, primarily the Sato License Agreement and the Huadong License and Collaboration Agreement. See Note 6 to the condensed consolidated financial statements for additional information.
Cost of Sales
Cost of sales includes direct and indirect costs related to the manufacturing and distribution of ZORYVE, including raw materials, third-party manufacturing costs, packaging services, and freight-in, as well as third-party royalties payable on our net product sales and amortization of intangible assets associated with ZORYVE.
Our cost of sales will reflect a lower average per unit cost of materials until inventory that was previously expensed is sold, which is expected to occur over the next seven months. As of September 30, 2024 and December 31, 2023, the value of this inventory, mostly at the raw materials stage, was approximately $3.4 million and $8.7 million, respectively.
Operating Expenses
Research and Development Expenses
Since our inception, we have focused significant resources on our research and development activities, including conducting nonclinical studies and clinical trials, manufacturing development efforts, and activities related to regulatory filings for our product candidates. Research and development costs are expensed as incurred. These costs include direct program expenses, which are payments made to third parties that specifically relate to our research and development, such as payments to clinical research organizations, clinical investigators, manufacturing of clinical material, nonclinical testing, and consultants. In addition, employee costs, including salaries, payroll taxes, benefits, stock-based compensation, and travel for employees contributing to research and development activities are classified as research and development costs. We allocate direct external costs on a program specific basis (topical roflumilast program, topical JAK inhibitor program, and early-stage programs). Our internal costs are primarily related to personnel or professional services and apply across programs, and thus are not allocable on a program specific basis.
We expect to continue to incur research and development expenses in the future as we develop our product candidates. In particular, we expect to incur research and development expenses for the phase 1 ARQ-255 study for alopecia areata and early development of ARQ-234 for atopic dermatitis.
We have entered, and may continue to enter, into license agreements to access and utilize certain molecules for the treatment of dermatological diseases and disorders. We evaluate if the license agreement is an acquisition of an asset or a business. To date, none of our license agreements have been considered to be an acquisition of a business. For asset acquisitions, the upfront payments, as well as any future milestone payments made before product approval, are immediately recognized as research and development expense when due, provided there is no alternative future use of the rights in other research and development projects.
The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing, or costs required to complete the remaining development of ZORYVE cream 0.3%, ZORYVE cream 0.15%, ZORYVE foam, ARQ-255, and ARQ-234 or any other product candidates. This is due
24
Table of Contents
to the numerous risks and uncertainties associated with the development of product candidates. See “Risk Factors” for a discussion of the risks and uncertainties associated with the development of our product candidates.
Selling, General and Administrative Expenses
Our selling, general and administrative expenses consist primarily of salaries and related costs, including payroll taxes, benefits, stock-based compensation, and travel, and costs related to sales and marketing of ZORYVE. Other selling, general and administrative expenses include legal costs of pursuing patent protection of our intellectual property, insurance, and professional services fees for auditing, tax, and general legal services. The commission paid to Kowa under our co-promotion agreement will also be recorded as a selling expense. We expect our selling, general and administrative expenses to continue to increase in the future as we continue to commercialize ZORYVE and potentially other product candidates and support our operations, including increased expenses related to legal, accounting, insurance, regulatory, and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, directors and officers liability insurance premiums, and investor relations activities.
Other Income, Net
Other income, net primarily consists of interest income earned on our cash, cash equivalents, and marketable securities, as well as changes in the fair value of the derivative related to our debt. See Note 7 to the condensed consolidated financial statements for additional information.
Interest Expense
Interest expense is related to interest incurred on our long-term debt.
Provision for Income Taxes
Provision for income taxes is related to the Huadong License and Collaboration Agreement. See Note 6 to the condensed consolidated financial statements for additional information.

25
Table of Contents
Results of Operations
Comparison of the Three Months Ended September 30, 2024 and 2023
The following table sets forth our results of operations for the periods indicated:
Three Months Ended September 30,Change
20242023$%
(in thousands)
Revenues:
Product revenue, net$44,755 $8,109 $36,646 452 %
Other revenue— 30,000 (30,000)(100)%
Total revenues44,755 38,109 6,646 17 %
Operating expenses:
Cost of sales5,503 1,182 4,321 366 %
Research and development19,501 26,236 (6,735)(26)%
Selling, general, and administrative58,817 47,595 11,222 24 %
Total operating expenses83,821 75,013 8,808 12 %
Loss from operations(39,066)(36,904)(2,162)6 %
Other income (expense):
Other income, net4,182 2,721 1,461 54 %
Interest expense(6,653)(7,559)906 (12)%
Loss before income taxes
(41,537)(41,742)205 — %
Provision for income taxes
— 3,023 (3,023)(100)%
Net loss$(41,537)$(44,765)$3,228 (7)%
______________
*Not applicable
Product Revenue, Net
We began recording U.S. product revenue in the third quarter of 2022 following the FDA approval and subsequent commercial launch of ZORYVE cream 0.3% in August 2022, and Canada product revenue in the second quarter of 2023 following the Health Canada approval and subsequent commercial launch of ZORYVE cream 0.3% in June 2023. We since recorded U.S. revenue in the first quarter of 2024 following the FDA approval and subsequent commercial launch of ZORYVE foam in January 2024. In the third quarter of 2024, we recorded U.S. product revenue following the FDA approval and subsequent commercial launch of ZORYVE cream 0.15% in July 2024.
Three Months Ended September 30,Change
20242023$%
(in thousands)
Product revenue, net
ZORYVE cream 0.3%
$22,041 $8,109 $13,932 172 %
ZORYVE foam
20,262 — 20,262 *
ZORYVE cream 0.15%
2,452 — 2,452 *
Total product revenue, net
$44,755 $8,109 $36,646 452 %
______________
26
Table of Contents
*Not applicable
Product revenue, net, for ZORYVE cream 0.3% increased by $13.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily driven by higher end customer demand and improving gross-to-net discounts for ZORYVE cream 0.3% in the United States.
Product revenue, net, for ZORYVE foam increased by $20.3 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, driven by its commercial launch in January 2024.
Product revenue, net, for ZORYVE cream 0.15% were $2.5 million for the three months ended September 30, 2024 compared to no sales in the three months ended September 30, 2023, driven by its commercial launch in July 2024.
Other Revenue
Other revenue for the three months ended September 30, 2023 were the result of license revenues received in connection with the Huadong Agreement. See Note 6 to the condensed consolidated financial statements for additional information.
Cost of Sales
Cost of sales increased by $4.3 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase is related primarily to an increase in customer demand for ZORYVE cream 0.3% and foam. Prior to the dates on which the initial regulatory approvals were received for each product, costs of raw materials were recorded as research and development expense. Therefore, cost of sales will reflect a lower average per unit cost until the related inventory is sold, which is expected to occur over the next seven months. See Note 5 to the condensed consolidated financial statements for additional information.
Research and Development Expenses
Three Months Ended September 30,Change
20242023$%
(in thousands)
Direct external costs:
Topical roflumilast program$1,320 $6,020 $(4,700)(78)%
Topical JAK inhibitor program1,089 978 111 11 %
Other early-stage programs
2,910 2,026 884 44 %
Indirect costs:
Compensation and personnel-related9,834 12,289 (2,455)(20)%
Other4,348 4,923 (575)(12)%
Total research and development expense$19,501 $26,236 $(6,735)(26)%
Research and development expenses decreased by $6.7 million, or 26%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was primarily due to the completion of Phase 3 studies of roflumilast cream in atopic dermatitis, coupled with a decrease in compensation and personnel-related expenses.
27
Table of Contents
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased by $11.2 million, or 24%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily due to an increase in compensation and personnel-related expenses of $7.6 million and an increase in sales and marketing expenses of $3.2 million. These increases were primarily due to our continued commercialization efforts for ZORYVE.
Other Income, Net
Other income, net increased by $1.5 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to the impact of higher interest rates, coupled with a higher marketable securities balance.
Interest Expense
Interest expense decreased by $0.9 million for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, due to the impact of lower interest rates. See Note 7 to the condensed consolidated financial statements for additional information.
Provision for Income Taxes
Income tax expense of $3.0 million for the three months ended September 30, 2023 was primarily due to income tax expense related to withholding tax on the Huadong License and Collaboration Agreement. See Note 6 to the condensed consolidated financial statements for additional information.

Comparison of the Nine Months Ended September 30, 2024 and 2023
The following table sets forth our results of operations for the periods indicated:
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Revenues:
Product revenue, net$97,182 $15,660 $81,522 521 %
Other revenue28,000 30,420 (2,420)(8)%
Total revenues125,182 46,080 79,102 172 %
Operating expenses:
Cost of sales12,223 2,741 9,482 346 %
Research and development61,940 86,800 (24,860)(29)%
Selling, general, and administrative171,784 136,471 35,313 26 %
Total operating expenses245,947 226,012 19,935 9 %
Loss from operations(120,765)(179,932)59,167 (33)%
Other income (expense):
Other income, net13,455 9,114 4,341 48 %
Interest expense(21,617)(21,950)333 (2)%
Loss before income taxes
(128,927)(192,768)63,841 (33)%
Provision for income taxes
324 3,088 (2,764)(90)%
Net loss$(129,251)$(195,856)$66,605 (34)%
______________
28
Table of Contents
*Not applicable
Product Revenue, Net
We began recording U.S. product revenue in the third quarter of 2022 following the FDA approval and subsequent commercial launch of ZORYVE cream 0.3% in August 2022, and Canada product revenue in the second quarter of 2023 following the Health Canada approval and subsequent commercial launch of ZORYVE cream 0.3% in June 2023. We since recorded U.S. revenue in the first quarter of 2024 following the FDA approval and subsequent commercial launch of ZORYVE foam in January 2024. In the third quarter of 2024, we recorded U.S. product revenue following the FDA approval and subsequent commercial launch of ZORYVE cream 0.15% in July 2024.
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Product revenue, net
ZORYVE cream 0.3%
$54,325 $15,660 $38,665 247 %
ZORYVE foam
40,405 — 40,405 *
ZORYVE cream 0.15%
2,452 — 2,452 *
Total product revenue, net
$97,182 $15,660 $81,522 521 %
______________
*Not applicable
Product revenue, net, for ZORYVE cream 0.3% increased by $38.7 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by higher end customer demand and improvements in gross-to-net discounts for ZORYVE cream 0.3% in the United States and the commercial launch of ZORYVE cream 0.3% in Canada in June 2023.
Product revenue, net, for ZORYVE foam increased by $40.4 million for the nine months ended September 30, 2024 compared to no sales in the nine months ended September 30, 2023, driven by its commercial launch in January 2024.
Product revenue, net, for ZORYVE cream 0.15% were $2.5 million for the nine months ended September 30, 2024 compared to no sales in the nine months ended September 30, 2023, driven by its commercial launch in July 2024.
Other Revenue
Other revenue in the nine months ended September 30, 2024 includes $25.0 million received as an upfront payment in connection with the Sato Agreement and a $3.0 milestone payment received in connection with the Huadong Agreement. Other revenue in the nine months ended September 30, 2023 primarily includes license revenues received in connection with the Huadong Agreement. See Note 6 to the condensed consolidated financial statements for additional information.
Cost of Sales
Cost of sales increased by $9.5 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase is related primarily to an increase in customer demand for ZORYVE cream 0.3% and foam. Prior to the dates on which the initial regulatory approvals were received for each product, costs of raw materials were recorded as research and development expense. Therefore, cost of sales will reflect a lower average per unit cost until the related inventory is sold, which is expected to occur over the next seven months. See Note 5 to the condensed consolidated financial statements for additional information.
29
Table of Contents
Research and Development Expenses
Nine Months Ended September 30,Change
20242023$%
(in thousands)
Direct external costs:
Topical roflumilast program$7,839 $28,974 $(21,135)(73)%
Topical JAK inhibitor program2,351 2,832 (481)(17)%
Other early-stage programs
8,878 3,869 5,009 129 %
Indirect costs:
Compensation and personnel-related29,574 34,784 (5,210)(15)%
Other13,298 16,341 (3,043)(19)%
Total research and development expense$61,940 $86,800 $(24,860)(29)%
Research and development expenses decreased by $24.9 million, or 29%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily due to the completion of Phase 3 studies of roflumilast cream in atopic dermatitis, coupled with decreases in compensation and personnel-related expenses and consulting costs, partially offset by manufacturing and preclinical costs incurred related to the development of early-stage programs.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased by $35.3 million, or 26%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily due to an increase in compensation and personnel-related expenses of $19.1 million and an increase in sales and marketing expenses of $14.7 million. These increases were primarily due to our continued commercialization efforts for ZORYVE.
Other Income, Net
Other income, net increased by $4.3 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to the impact of higher interest rates and higher marketable securities balance.
Interest Expense
Interest expense decreased by $0.3 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, due to the impact of lower interest rates. See Note 7 to the condensed consolidated financial statements for additional information.
Provision for Income Taxes
Income tax expense of $0.3 million and $3.0 million for the nine months ended September 30, 2024 and 2023, respectively, were primarily due to withholding tax on the Huadong License and Collaboration Agreement. See Note 6 to the condensed consolidated financial statements for additional information.
30
Table of Contents
Liquidity, Capital Resources, and Requirements
Sources of Liquidity
Our primary sources of capital to date have been private placements of preferred stock, our IPO completed in January 2020, our follow-on financings in October 2020, February 2021, August 2022, October 2023, and March 2024, our Loan Agreement, our ATM program, and revenue from the sale of ZORYVE. We have incurred operating losses since our inception and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our products and product candidates, including conducting nonclinical and clinical trials and providing selling, general and administrative support for these operations. As of September 30, 2024, we had cash, cash equivalents, restricted cash, and marketable securities of $331.2 million, and an accumulated deficit of $1,111.2 million. We maintain cash balances with financial institutions in excess of insured limits. As of September 30, 2024, we had $200.0 million outstanding under the Loan Agreement, of which we paid down $100.0 million of principal from available cash on October 8, 2024, with the right to re-draw that principal for a defined period. See Note 10 to the condensed consolidated financial statements for additional information.
If our capital resources are insufficient to satisfy our requirements, we may need to fund our operations through the sale of our equity securities, accessing or incurring additional debt, entering into licensing or collaboration agreements with partners, grants, or other sources of financing. There can be no assurance that sufficient funds will be available to us at all or on attractive terms when needed from these sources. If we are unable to obtain additional funding from these or other sources when needed it may be necessary to significantly reduce our current rate of spending through, among other things, reductions in staff and delaying, scaling back, or stopping certain research and development programs, nonclinical studies, clinical trials or other development activities, and commercialization efforts. Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. In addition, market conditions impacting financial institutions could impact our ability to access some or all of our cash, cash equivalents and marketable securities, and we may be unable to obtain alternative funding when and as needed on acceptable terms, if at all.
We have based our projected operating requirements on assumptions that may prove to be incorrect and we may use all our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development, and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Any future funding requirements will depend on many factors, including, but not limited to:
•the timing, receipt, and amount of sales of any current and future products;
•the scope, progress, results, and costs of researching and developing our lead product candidates or any future product candidates, and conducting nonclinical studies and clinical trials, in particular our planned or ongoing development activities and our formulation and nonclinical efforts;
•suspensions or delays in the enrollment or changes to the number of subjects we decide to enroll in our ongoing clinical trials;
•the number and scope of clinical programs we decide to pursue, and the number and characteristics of any product candidates we develop or acquire;
•the timing of, and the costs involved in, obtaining regulatory approvals for any future product candidates;
•the number and characteristics of any additional product candidates we develop or acquire;
•the cost of manufacturing ZORYVE or any future product candidates and any products we successfully commercialize, including costs associated with building out our supply chain;
•the cost of commercialization activities for ZORYVE or any future product candidates that are approved for sale, including marketing, sales and distribution costs, and any discounts or rebates to obtain access;
•our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such agreements that we may enter into;
•the costs related to milestone payments to AstraZeneca, Hengrui or any future collaborator or licensing partner, upon the achievement of predetermined milestones;
•any product liability or other lawsuits related to our products;
31
Table of Contents
•the expenses needed to attract and retain skilled personnel;
•the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing our intellectual property portfolio; and
•costs associated with any adverse market conditions or other macroeconomic factors.
Indebtedness
On December 22, 2021, we entered into a loan and security agreement (the “Prior Loan Agreement”) with SLR Investment Corp ("SLR") and the lenders party thereto. The Prior Loan Agreement was amended and restated on January 10, 2023 (the "AR Loan Agreement") to include Arcutis Canada, Inc., a corporation incorporated under the laws of the Province of Ontario, as a borrower and party. On November 1, 2023, we entered into an amendment to the AR Loan Agreement to, among others, (i) modify the financial covenant relating to minimum net product revenue, and (ii) include an additional minimum financing covenant. On August 9, 2024, we entered into a second amendment to the AR Loan Agreement (the AR Loan Agreement, as amended by the first and second amendments, the "Loan Agreement") to, among others, (i) permit, during the period commencing on October 7, 2024 and ending on December 15, 2024, an optional partial prepayment of term loans outstanding, subject to a 1.0% prepayment penalty (the “2024 Partial Prepayment”), (ii) add the tranche C-1 and tranche C-2 term loans, and (iii) facilitate certain other changes, including with respect to the applicable interest rate and maturity date in the event of a 2024 Partial Prepayment. The term loan facility is comprised of (i) a tranche A term loan of $75.0 million, (ii) a tranche B-1 term loan of $50.0 million, (iii) a tranche B-2 term loan of up to $75.0 million, (iv) a tranche C-1 term loan of up to $50.0 million, and (v) a tranche C-2 term loan of up to $50.0 million (collectively, the "Term Loans"). The tranche A term loan was funded in December 2021. With the approval of ZORYVE cream 0.3% on July 29, 2022, the tranche B term loans were funded in August 2022. As of each of December 31, 2023 and September 30, 2024, the aggregate principal amount outstanding under the Loan Agreement was $200.0 million.
In October 2024, we made a 2024 Partial Prepayment of $100.0 million, which reduced the aggregate principal amount outstanding under the Loan Agreement to $100.0 million. In connection with the 2024 Partial Prepayment, we are obligated to pay a prepayment penalty of $1.0 million by June 30, 2026 and a final fee of $6.95 million, representing the final fee applicable to the amount of the 2024 Partial Prepayment, on January 1, 2027. As a result of such 2024 Partial Prepayment, subject us generating a minimum net product revenue for the trailing six (6) month period ending as of the month prior to the borrowing date equal to 80% of our projected net product revenue as set forth in its annual plan for the respective period, we will be able to draw down the tranche C-1 and tranche C-2 term loans. The tranche C-1 term loan availability will expire on March 31, 2026 and the tranche C-2 term loan availability will expire on June 30, 2026. In addition, as a result of the 2024 Partial Prepayment, (i) the maturity date of the Loan Agreement is August 1, 2029 (such date, the “Maturity Date”), (ii) the applicable per annum interest rate is equal to 5.95% plus the greater of (a) 2.50% per annum and (b) the one-month Secured Overnight Financing Rate ("SOFR"), (iii) we are no longer subject to certain cost and purchase price restrictions regarding acquisitions, and (iv) we may prepay principal amounts outstanding under the Term Loans in minimum increments of $25.0 million, subject to a prepayment premium of (a) 3.0% for any prepayment made prior to the first anniversary of the second amendment, (b) 2.0% for any prepayment made prior after the first anniversary of the second amendment and prior to the second anniversary of the second amendment, or (c) 1.0% for any prepayment made prior after the second anniversary of the second amendment and prior to the Maturity Date.
Principal amounts outstanding under the Term Loans will generally accrue interest at a floating rate equal to the applicable rate in effect from time to time, as determined by SLR on the third business day prior to the funding date of the applicable Term Loan and on the first business day of the month prior to each payment date of each Term Loan. Prior to the 2024 Partial Prepayment, the applicable rate was a per annum interest rate equal to 7.45% plus the greater of (a) 0.10% and (b) the one-month SOFR. On September 30, 2024, the rate was 11.12%. As a result of such 2024 Partial Prepayment, the applicable interest rate will be a per annum interest rate equal to 5.95% plus the greater of (a) 2.50% and (b) the one-month SOFR. The benchmark SOFR is subject to change in the event of certain events with respect to the benchmark rate. Interest payments are payable monthly following the funding of any Term Loan. Any principal amounts outstanding under the Term Loans, if not repaid or prepaid, are due and payable on August 1, 2029.
As security for the obligations under the Loan Agreement, we granted SLR, for the benefit of the lenders, a continuing security interest in substantially all of our assets, including our intellectual property, subject to certain exceptions.
32
Table of Contents
If the Term Loans are accelerated due to, among others, the occurrence of a bankruptcy or insolvency event, we are required to make certain mandatory prepayments of (i) all principal amounts outstanding under the Term Loans, plus accrued and unpaid interest thereon through the prepayment date, (ii) any fees applicable by reason of such prepayment, (iii) the prepayment premiums set forth in the paragraph above, plus (iv) all other obligations that are due and payable, including expenses and interest at the Default Rate (as defined below) with respect to any past due amounts.
The Loan Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among others, requirements as to financial reporting and insurance and restrictions on our ability to dispose of our business or property, to change our line of business, to liquidate or dissolve, to enter into any change in control transaction, to merge or consolidate with any other entity or to acquire all or substantially all the capital stock or property of another entity, to incur additional indebtedness, to incur liens on our property, to pay any dividends or other distributions on capital stock other than dividends payable solely in capital stock or to redeem capital stock. We also agreed to a financial covenant whereby we must generate a minimum net product revenue equal to 75% of our projected net product revenue as set forth in our annual plan for the respective period, tested on a trailing six-month basis as of the end of each month. Each annual plan shall be approved by our board of directors and SLR, in its capacity as collateral agent, in its reasonable discretion. Any failure by us to deliver such annual plan on or before December 15 of the prior year shall be an immediate event of default.
In addition, the Loan Agreement contains customary events of default that entitle the lenders to cause any indebtedness under the Loan Agreement to become immediately due and payable, and to exercise remedies against us and the collateral securing the Term Loans. Upon the occurrence and for the duration of an event of default, an additional default interest rate (the "Default Rate") equal to 4.0% per annum will apply to all obligations owed under the Loan Agreement.
In connection with the Loan Agreement, we are obligated to pay (i) a final fee equal to 6.95% of the aggregate original principal amount of the Term Loans outstanding as of the date of the second amendment, (x) with respect to any 2024 Partial Prepayment, upon the earliest to occur of (A) January 1, 2027, (B) the acceleration of all outstanding Term Loans and (C) the prepayment, or refinancing, substitution or replacement of all outstanding Term Loans, and (y) with respect to the Term Loans outstanding as of the date of the second amendment (other than 2024 Partial Prepayment), upon the earliest to occur of (A) the Maturity Date, (B) the acceleration of all outstanding Term Loans and (C) the prepayment, or refinancing, substitution or replacement of all outstanding Term Loans, (ii) a 2.00% fee with respect to tranche C term loans, due and payable on the earliest to occur of (A) the Maturity Date, (B) the acceleration of all outstanding Term Loans and (C) the prepayment, or refinancing, substitution or replacement of all outstanding Term Loans, (iii) a 2.00% extension fee with respect to tranche C term loans which remain unfunded after December 31, 2025, which shall accrue during the period commencing January 1, 2026, and ending on the earliest to occur of (A) the expiration of the tranche C term loan availability, and (B) the date on which tranche C term loan is fully drawn, and (iv) a certain amount of lenders’ expenses incurred in connection with the execution of the Loan Agreement. Additionally, in connection with the original Prior Loan Agreement, we previously had entered into an Exit Fee Agreement, whereby we agreed to pay an exit fee in the amount of 3.0% of each Term Loan funded upon (i) any change of control transaction or (ii) a revenue milestone, calculated on a trailing six-month basis. Notwithstanding the prepayment or termination of the Term Loan, the exit fee will expire 10 years from the date of the Loan Agreement.
We were in compliance with all covenants under the Loan Agreement as of September 30, 2024.
33
Table of Contents
Cash Flows
The following table sets forth our cash flows for the periods indicated:
Nine Months Ended September 30,
20242023
(in thousands)
Cash used in operating activities$(111,410)$(190,813)
Cash (used in) provided by investing activities
(6,057)242,418 
Cash provided by financing activities163,613 2,034 
Effect of exchange rate changes on cash(1)(118)
Net increase in cash, cash equivalents, and restricted cash
$46,145 $53,521 
Net Cash Used in Operating Activities
During the nine months ended September 30, 2024, net cash used in operating activities was $111.4 million, which consisted of a net loss of $129.3 million and a change in net operating assets and liabilities of $13.5 million, partially offset by net non-cash charges of $31.4 million. The net non-cash charges were primarily related to stock-based compensation expense of $32.3 million.
During the nine months ended September 30, 2023, net cash used in operating activities was $190.8 million, which consisted of a net loss of $195.9 million and a change in net operating assets and liabilities of $23.9 million, partially offset by net non-cash charges of $29.0 million. The net non-cash charges were primarily related to stock-based compensation expense of $30.1 million.
Net Cash (Used in) Provided by Investing Activities
During the nine months ended September 30, 2024, net cash used in investing activities was $6.1 million, which was comprised primarily of purchases of marketable securities of $237.4 million, offset by proceeds from the maturities of marketable securities of $231.5 million.
During the nine months ended September 30, 2023, net cash provided by investing activities was $242.4 million, which was comprised primarily of proceeds from the maturities of marketable securities of $350.5 million, partially offset by purchases of marketable securities of $107.7 million.
Net Cash Provided by Financing Activities
During the nine months ended September 30, 2024, net cash provided by financing activities was $163.6 million, which was comprised primarily of $161.7 million of net proceeds from our February 2024 public stock offering.
During the nine months ended September 30, 2023, net cash provided by financing activities was $2.0 million, which was comprised of $1.0 million in proceeds from the issuance of common stock upon the exercise of stock options and $1.0 million in proceeds from the issuance of common stock as part of our ESPP.
Contractual Obligations and Contingent Liabilities
Except as set forth in Note 7, Long-term Debt, and Note 10, Subsequent Events, of the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, there have been no material changes outside the ordinary course of business to our contractual obligations and commitments as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Smaller Reporting Company Status
As of June 30, 2024, the market value of our ordinary shares held by non-affiliates exceeded $700.0 million. As a result, we will be a large accelerated filer. Additionally, we will no longer qualify as a smaller reporting company beginning with our first Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2025. As a result of this transition, we will be subject to certain disclosure and compliance requirements that apply to other public companies but did not previously apply to us and we will also not be able to take advantage of certain scaled disclosures available to smaller reporting companies.
34
Table of Contents
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities. As of September 30, 2024, we had cash and cash equivalents of $134.9 million, restricted cash of $0.6 million, and marketable securities of $195.7 million; which from time to time consist of bank deposits, money market funds, commercial paper, government securities, and corporate debt securities. The primary objective of our investment activities is to preserve capital to fund our operations. We also seek to maximize income from our investments without assuming significant risk. Because our investments are primarily short-term in duration, we believe that our exposure to interest rate risk is not significant, and a 1% movement in market interest rates would not have a significant impact on the total value of our portfolio.
In addition, as of September 30, 2024, we had $200.0 million outstanding under our Loan Agreement. On October 8, 2024, the Company made a 2024 Partial Prepayment of $100.0 million, which reduced the principal amount outstanding to $100.0 million. Amounts outstanding under our Loan Agreement bear interest at a floating rate equal a per annum interest rate equal to 5.95% plus the greater of (a) 2.50% and (b) the one-month Secured Overnight Financing Rate ("SOFR") as the current benchmark rate. As a result, we are exposed to risks related to our indebtedness from changes in interest rates. Based on the amount outstanding under our Loan Agreement after the prepayment, for every 100 basis point increase in the interest rates, we would incur approximately $1.0 million of additional annual interest expense. We do not currently engage in hedging transactions to manage our exposure to interest rate risk, but higher interest expense would be offset in part by higher earnings on our cash and marketable securities. We may in the future use swaps, caps, collars, structured collars or other common derivative financial instruments to reduce interest rate risk. It is difficult to predict the effect that future hedging activities would have on our operating results.
We are exposed to foreign currency exchange risk as our Canadian subsidiary operates with the Canadian dollar as its functional currency. The majority of our transactions occur in U.S. dollars. The fluctuation in the value of the U.S. dollar against the Canadian dollar affects the reported amounts of expenses, assets and liabilities. If we expand our international operations our exposure to exchange rate fluctuations will increase. At September 30, 2024 we had cash balances denominated in Canadian dollars of $4.5 million. We currently do not hedge any foreign currency exposure. A hypothetical 10% change in foreign exchange rates during any of the periods presented would not have a material impact on our condensed consolidated financial statements.

Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such required information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls and Procedures
Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Our internal control over financial reporting includes those policies and procedures that:
35
Table of Contents
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.


36
Table of Contents
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Arcutis Biotherapeutics, Inc. filed a lawsuit against Padagis Israel Pharmaceuticals Ltd., Padagis US LLC, and Padagis LLC (collectively, Padagis) in the U.S. District Court for the District of Delaware on March 27, 2024, based on the submission to the FDA of an ANDA seeking approval to market and sell a generic version of Arcutis’s ZORYVE® 0.3% cream for the treatment of plaque psoriasis. The Company asserts infringement of the following eleven patents, which are listed in the FDA’s Orange Book for Arcutis’ ZORYVE® 0.3% cream: 9,884,050; 9,907,788; 10,940,142; 11,129,818; 11,793,796;11,819,496; 11,992,480; 12,005,051; 12,005,052; 12,011,437; and 12,016,848 (collectively, Asserted Patents). Arcutis seeks a judgment that Padagis has infringed or will infringe one or more claims of each of the Asserted Patents and based on that judgment, a permanent injunction prohibiting the commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of Padagis’s proposed generic product before expiration of each of the Asserted Patents found to infringe.
On July 19, 2024, Arcutis filed its first amended complaint that added the last five of the above listed patents to its infringement allegations. These patents were issued by the U.S. Patent and Trademark Office and listed in FDA’s Orange Book for Arcutis’s ZORYVE® 0.3% cream after the filing of the original complaint. On August 2, 2024, Padagis responded to the first amended complaint, denying infringement and asserting counterclaims seeking a declaratory judgement that the asserted patents are not infringed, invalid and/or unenforceable. The court issued a scheduling order on June 10, 2024, which sets trial at the court’s convenience, or around April 13-17, 2026. The automatic 30-month stay of FDA approval of Padagis’s ANDA seeking approval for Arcutis’s ZORYVE® 0.3% cream is set to expire on August 14, 2026.
We may from time to time be involved in various legal proceedings of a character normally incident to the ordinary course of our business. We are not currently a party to any material litigation or other material legal proceedings.
Item 1A. RISK FACTORS
For a discussion of our potential risks and uncertainties, see the information in Part I, "Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. Other than the risk factors set forth below, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.
We expect to be a large accelerated filer and will no longer qualify as a “smaller reporting company” which will require additional compliance initiatives and heightened disclosure and reporting requirements.
Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to furnish a report by our senior management on our internal control over financial reporting. However, during any period in which we qualify as a smaller reporting company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. As of June 30, 2024, the market value of our ordinary shares held by non-affiliates exceeded $700.0 million. As a result, we will be a large accelerated filer effective December 31, 2024. Additionally, we will no longer qualify as a "smaller reporting company," as defined in the Exchange Act, beginning with our first Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2025. As a result of this transition, we will be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm with our Annual Report on Form 10-K for the fiscal year ending December 31, 2024. To prepare for compliance with Section 404, we have engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we have dedicated internal resources, engaged outside consultants and adopted a detailed work plan to assess and document the adequacy of internal control over financial reporting. We have continued steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts to date and continued efforts, there is a risk that we will not be able to conclude, within the prescribed time frame or at all, that our internal control over financial reporting is effective as required by Section 404. As a result of this transition, we will be subject to certain disclosure and compliance requirements that apply to other public companies but did not previously apply to us during the period in which we qualified as a smaller reporting company, and we will also not be able to take advantage of certain scaled disclosures available to smaller reporting companies. Any failure to comply with the increased disclosure and reporting requirements could have an adverse effect on our business, financial condition and results of operations.
37
Table of Contents
Our current and future collaboration arrangements may not be successful, which could adversely affect our ability to develop and commercialize future product candidates.
We have entered into a strategic collaboration and licensing agreement for topical roflumilast in Greater China and Southeast Asia with Hangzhou Zhongmei Huadong Pharmaceutical Co., a wholly owned subsidiary of Huadong Medicine Co., Ltd., a strategic collaboration and licensing agreement for topical roflumilast in Japan with Sato Pharmaceutical Co., Ltd., and a co-promotion agreement with Kowa Pharmaceuticals America, Inc. to exclusively market and promote ZORYVE to primary care practitioners and pediatricians for all FDA approved indications in the United States. In the future, we may seek additional collaboration arrangements for the commercialization, or potentially for the development, of certain of our product candidates depending on the merits of retaining commercialization rights for ourselves as compared to entering into collaboration arrangements. We will face, to the extent that we decide to enter into future collaboration agreements, significant competition in seeking appropriate collaborators. Moreover, collaboration arrangements are complex and time-consuming to negotiate, document, implement, and maintain. We may not be successful in our efforts to establish and implement collaborations or other alternative arrangements. The terms of any collaborations or other arrangements that we may establish may not be favorable to us. Our current and future collaborations may not be successful. The success of our collaboration arrangements will depend heavily on the efforts and activities of our collaborators. Collaborations are subject to numerous risks, which may include risks that:
•collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations;
•collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of competitive products or their internal development of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;
•collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing;
•collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates; a collaborator with sales, marketing, manufacturing, and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities, including with respect to accessing primary care and pediatric practices; collaborators are or may in the future be entitled to fees, royalties, profit sharing, and other consideration, which may limit or otherwise negatively impact our profit and financial performance;
•we have and could in the future grant exclusive rights to our collaborators that prevent us from collaborating with others;
•collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;
•disputes may arise between us and a collaborator that causes the delay or termination of the research, development, or commercialization of our current or future product candidates or that results in costly litigation or arbitration that diverts management attention and resources;
•collaborations may be terminated, and, if terminated, this may result in a need for additional capital to pursue further development or commercialization of the applicable current or future product candidates;
•collaborators may own or co-own intellectual property covering products that result from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property;
•disputes may arise with respect to the ownership of any intellectual property developed pursuant to our collaborations; and
•a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.
38
Table of Contents
Furthermore, we cannot assure you that any collaboration, or other strategic transaction, will achieve the expected synergies. For example, such transactions may require us to incur non-recurring or other charges, increase our near- and long-term expenditures, and pose significant integration or implementation challenges or disrupt our management or business. These transactions entail numerous operational and financial risks, including exposure to unknown liabilities, dependence upon the performance and discretion of counterparties that we do not control and that may underperform or fail, disruption of our business, and diversion of our management’s time and attention in order to manage a collaboration or develop acquired products, product candidates or technologies, incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses, difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business, impairment of relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership and the inability to retain key employees of any acquired business.
The terms of our loan and security agreement require us to meet certain operating and financial covenants, including a minimum financing covenant, and place restrictions on our operating and financial flexibility. If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.

As of September 30, 2024, we had $200.0 million outstanding under our Loan Agreement. On August 9, we entered into a second amendment to the Loan Agreement, pursuant to which the terms were revised to, among others, permit an optional partial prepayment of term loans outstanding during the period commencing on October 7, 2024 and ending on December 15, 2024, subject to a 1.0% prepayment penalty (the “2024 Partial Prepayment”). On October 8, 2024, we made a 2024 Partial Prepayment of $100.0 million, which reduced the aggregate principal amount outstanding under the Loan Agreement to $100.0 million. In connection with the 2024 Partial Prepayment, we are obligated to pay a prepayment penalty of $1.0 million by June 30, 2026 and a final fee of $6.95 million, representing the final fee applicable to the amount of the 2024 Partial Prepayment, on January 1, 2027. As a result of such 2024 Partial Prepayment, subject us generating a minimum net product revenue for the trailing six (6) month period ending as of the month prior to the borrowing date equal to 80% of our projected net product revenue as set forth in our annual plan for the respective period, we will be able to draw down a tranche C-1 term loan of up to $50.0 million and a tranche C-2 term loan of up to $50.0 million. The tranche C-1 term loan availability will expire on March 31, 2026 and the tranche C-2 term loan availability will expire on June 30, 2026. As security for the obligations under the Loan Agreement, we granted SLR, for the benefit of the lenders, a continuing security interest in substantially all of our assets, including our intellectual property, subject to certain exceptions.

The Loan Agreement contains a number of representations and warranties and affirmative and restrictive covenants, including financial covenants, and the terms may restrict our current and future operations, particularly our ability to respond to certain changes in our business or industry, or take future actions. The Loan Agreement includes a financial covenant whereby we must generate minimum net product revenue equal to 75% of our projected net product revenue as set forth in our annual plan for the respective period, tested on a trailing six-month basis as of the end of each month. Each annual plan shall be approved by our board of directors and SLR, in its capacity as collateral agent, in its reasonable discretion. Any failure by us to deliver such annual plan on or before December 15 of the prior year shall be an immediate event of default.

If the debt under the Loan Agreement were accelerated due to an event of default or otherwise, we may not have sufficient cash or be able to sell sufficient assets to repay this debt, which would harm our business and financial condition. If we do not have or are unable to generate sufficient cash to repay our debt obligations when they become due and payable, either upon maturity or in the event of a default, our assets could be foreclosed upon and we may not be able to obtain additional debt or equity financing on favorable terms, if at all, which may negatively impact our ability to operate and continue our business as a going concern. Moreover, regardless of a potential event of default, the debt under the Loan Agreement matures and is due on August 1, 2029. As a result, we may need to refinance or secure separate financing in order to repay amounts outstanding when due, however, no assurance can be given that an extension will be granted, that we will be able to renegotiate the terms of the agreement with the lender, or that we will be able to secure separate debt or equity financing on favorable terms, if at all.

In order to service our indebtedness, we need to generate cash from our operating activities or additional equity or debt financings. Our ability to generate cash is subject, in part, to our ability to successfully execute our business strategy, as well as general economic, financial, competitive, regulatory and other factors beyond our control. We cannot assure you that our business will be able to generate sufficient cash flow from operations or that future borrowings or other financings will be available to us in an amount sufficient to enable us to service our indebtedness and fund our other liquidity needs. To the extent we are required to use cash from operations or the
39
Table of Contents
proceeds of any future financing to service our indebtedness instead of funding working capital, capital expenditures or other general corporate purposes, we will be less able to plan for, or react to, changes in our business, industry, and in the economy generally. This may place us at a competitive disadvantage compared to our competitors that have less indebtedness.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
Issuer Purchases of Equity Securities
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
Not applicable.
Item 5. OTHER INFORMATION
Trading Plans
During the three months ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Chair of the Board
The Company’s board of directors (the “Board”) elected Keith Leonard to serve as Chair of the Board, effective 4 November 2024. Mr. Leonard has served as a member of the Board since September 2021. Over his more than 30 years in the biopharmaceutical industry, he has had a wide variety of roles and brings deep expertise in pharmaceutical commercialization. He currently chairs the board of Unity Biotechnology, serves on the board of Intuitive Surgical, and was previously chair of the boards of Kythera Biopharmaceuticals and Sienna Biopharmaceuticals, and served on the boards of Sanifit SA, Anacor Pharmaceuticals, Affymax, and ARYx Therapeutics. He was also previously chief executive officer of Unity Biotherapeutics and Kythera Biopharmaceuticals. Mr. Leonard succeeds Patrick Heron. Mr. Heron, who has served as a member of the Board since its formation and as Chair of the Board since 2019, will continue to serve as an independent director.
40
Table of Contents
ITEM 6. EXHIBITS
Exhibit
Number		Description of DocumentIncorporated by Reference FormDateNumberFiled/Furnished Herewith
3.110-Q5/12/203.1
3.210-Q5/12/203.2
4.1S-1/A1/21/204.1
4.2^
S-1/A1/21/204.2
31.1X
31.2X
32.1*X
101.INSInline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.X
101.SCHInline XBRL Taxonomy Extension Schema Document.X
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.X
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.X
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.X
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.X
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).X
______________
^    Registrant has omitted schedules and exhibits pursuant to Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of the omitted schedules and exhibits to the SEC upon request.
*    The certifications attached as Exhibit 32.1 that accompany this Quarterly Report on Form 10-Q are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Arcutis Biotherapeutics, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.


41

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
ARCUTIS BIOTHERAPEUTICS, INC.
Date:November 06, 2024By:/s/ Todd Franklin Watanabe
Todd Franklin Watanabe
President, Chief Executive Officer and Director
(Principal Executive Officer)

Date:November 06, 2024By:
/s/ David Topper
David Topper
Chief Financial Officer
(Principal Financial and Accounting Officer)