Seamus Fernandez

Seamus Fernandez asked about Bristol Myers Squibb's series of Phase III pivotal catalysts in 2026, seeking insights into the areas with the most relative upside, specifically mentioning CELMoDs, Milvexian, and Admilparant, and potential benefits from royalty agreements.

Answer

Chris Boerner, Board Chair and CEO, highlighted strong growth from current products and a slew of data readouts, including over 10 Phase III readouts this year. He emphasized the CELMoD program, Milvexian's potential as best-in-class in secondary stroke prevention and the only Factor XI oral therapy in AFib, and Admilparant. Cristian Massacesi, Executive Vice President, Chief Medical Officer, and Head of Development, provided technical details on hematology (Iberdomide PFS, Mezigdomide, Arlocel), Admilparant in IPF/PPF, Milvexian in stroke and AFib, and the ADC program, expressing high confidence in these transformative regimens.

Seamus Fernandez asked about Bristol Myers Squibb's series of Phase III pivotal catalysts in 2026, seeking insights into the relative upside of key programs like CELMoDs, Milvexian, and Admilparant, and potential benefits from royalty agreements such as Sotatercept and Cadence.

Answer

Chris Boerner (Board Chair and CEO, Bristol Myers Squibb) highlighted strong growth from existing products and a data-rich period with six new product readouts and over 10 Phase III data readouts in 2026. He emphasized the CELMoD program, Admilparant, and Milvexian (potential best-in-class in SSP and only Factor XI oral therapy in AFib). Cristian Massacesi (Executive Vice President, Chief Medical Officer, and Head of Global Drug Development, Bristol Myers Squibb) provided technical details on hematology (Iberdomide PFS, MESI, ArloCell), Admilparant (Phase III, FVC reduction), Milvexian (stroke, AFib), and the ADC program, expressing high confidence in these transformative regimens.

Seamus Fernandez from Guggenheim Securities inquired if previous launch analogs are still relevant for COBENFI's trajectory and asked about the sustainability of current spending levels and operating margins.

Answer

EVP & Chief Commercialization Officer Adam Lenkowsky responded that COBENFI is outperforming all historical launch benchmarks in schizophrenia, making analogs less relevant. EVP & CFO David Elkins addressed margins, stating that while currently pressured by legacy product declines, they are expected to improve long-term, driven by the growing, higher-margin new product portfolio.

Speaking for Seamus Fernandez, Zac Dunn asked how defensible Camzyos's first-in-class position is against potential competition and what the read-through is from the non-obstructive HCM trial failure to the HFpEF development program.

Answer

CCO Adam Lenkowsky expressed confidence in maintaining leadership with Camzyos, citing a strong base, high persistency, and a lack of meaningful clinical differentiation in competitor data. CMO Samit Hirawat explained it's too early to determine the read-through to HFpEF, as the diseases are different and key biomarkers have historically tracked differently in HFpEF studies.

Seamus Fernandez of Guggenheim Securities asked about the early real-world patient experience with Cobenfy, specifically regarding tolerability and dosing, and questioned where novel oral drugs like iberdomide will fit in the multiple myeloma market.

Answer

CCO Adam Lenkowsky reported positive feedback on Cobenfy, noting that tolerability issues like nausea are manageable as physicians are titrating doses more slowly in the real world. CMO Samit Hirawat positioned novel orals like iberdomide as crucial for the community setting, where complex cell therapies are difficult to administer, and can be combined with or replace older standards of care.

Seamus Fernandez asked about the company's enthusiasm for its CD19 asset ahead of ACR data and whether volume benefits are included in the 'net neutral' assumption for the 2025 IRA impact.

Answer

Head of Global Drug Development Samit Hirawat expressed excitement for the CD19 cell therapy data, outlining key metrics to watch. He also contrasted the single-treatment CAR-T approach with repeatable bispecifics. Chief Commercialization Officer Adam Lenkowsky confirmed the IRA impact is seen as net neutral, with favorability for Eliquis being offset by negative impacts on Revlimid and Pomalyst.

Seamus Fernandez from Guggenheim Securities questioned why Eli Lilly couldn't replicate its aggressive investment strategy from obesity into immunology, considering the large market opportunity and potential for earlier, faster development and business development.

Answer

Dan Skovronsky, Chief Scientific and Product Officer, stated that Lilly is indeed prioritizing investment in non-obesity areas like oncology, neuroscience, and immunology, reinvesting obesity proceeds. He expressed high hopes for immunology, citing promising science, earlier disease treatment, ongoing incretin trials in immunology, and other late-stage combination therapies. Mike Czapar, SVP of Investor Relations, directed the question.

Seamus Fernandez inquired why Lilly isn't pursuing immunology with the same aggressive investment strategy as obesity, considering the substantial market opportunity and portfolio generation, asking about potential barriers to internal efforts or more aggressive business development.

Answer

Dr. Dan Skovronsky, Chief Scientific and Product Officer, stated that Lilly is indeed prioritizing investment in non-obesity areas like oncology, neuroscience, and immunology, reinvesting proceeds from obesity. He expressed high hopes for immunology, citing promising science in treating immunologic diseases earlier and ongoing trials for incretins in immunology, along with other combination therapies in late-stage clinical trials.

Seamus Fernandez questioned the evolving competitive landscape in the obesity market, including M&A activity, competitor dynamics, and how Eli Lilly's portfolio (retatrutide, orforglipron, tirzepatide) segments the market and maintains leadership.

Answer

Dan Skovronsky, Chief Scientific Officer and President of Lilly Immunology, affirmed Lilly's strong R&D and portfolio, stating no changes to their competitive view. Dave Ricks, Chair and CEO, added that leadership is built on both innovation and execution, including manufacturing scale-up and market performance.

Seamus Fernandez asked about market behaviors related to M&A and competitor dynamics, seeking Lilly's perspective on how the market is evolving given its segmented portfolio (retatrutide for heavier patients, orforglipron for maintenance/lower end, tirzepatide's strong performance), and if competitor actions are a concern.

Answer

Dan Skovronsky, CSO and President of Lilly Immunology, expressed confidence in Lilly's strong R&D engine and portfolio, believing they have best or first-in-class molecules. Dave Ricks, Chair and CEO, emphasized that Lilly's lead is built on both innovation and execution, including manufacturing and market performance, and they are focused on defending their position by executing their outlined strategy.

Seamus Fernandez from Guggenheim Partners inquired about the future pricing strategy for orforglipron and other assets, particularly in light of growing competition and the ongoing issue of drug compounding.

Answer

David Ricks, Chair and CEO, stated that Lilly will continue to price to value, anticipating single-digit net price erosion typical for chronic medications. He stressed the patient safety risks of compounding and called for stronger regulatory enforcement. Ricks also confirmed Lilly will continue offering consumer-level pricing through channels like LillyDirect to address coverage gaps.

Seamus Fernandez asked how Ebglyss is tracking against Lilly's ambition of a best-in-class launch and whether its peak sales potential could be materially higher than the consensus of $2 billion, questioning if any barriers exist like competitor rebates or label breadth.

Answer

Dr. Dan Skovronsky, Chief Scientific Officer, stated that Lilly has high aspirations for Ebglyss, supported by strong clinical data. He noted good early uptake, with physicians reporting positive results in severe patients and subsequently moving the drug into first-line use. Regarding access, he reiterated earlier comments that coverage is growing and expressed confidence in overcoming any competitive rebate challenges.

Colleen on for Seamus Fernandez of Guggenheim Securities asked about the sustainability of operating margin expansion and whether consensus estimates nearing 50% are realistic.

Answer

An executive stated that while margin expansion is guided for 2025, reaching the high 40s or 50% is not considered a good way to drive sustainable growth, as it would require under-investing in R&D. The low 40s range is seen as the right balance.

Seamus Fernandez from Guggenheim asked how the future availability of an oral small molecule like orforglipron could resolve the compounding issue and whether the FDA would act on a product-by-product basis.

Answer

CEO David Ricks acknowledged the long-term importance of oral drugs for market scale but noted orforglipron's launch is still some time away. He reiterated that compounding is a patient safety issue, not a financial crisis for Lilly, and that the FDA's analysis is product-specific. Since tirzepatide is not in shortage, he argued mass compounding should not be permitted.

Seamus Fernandez asked for Novartis's perspective on the overall food allergy opportunity within its portfolio, including the success of Xolair and the potential for BTK inhibitors and beyond.

Answer

Vasant Narasimhan, CEO of Novartis, highlighted the company's long history in food allergy research and noted that positive phase 2 data for remibrutinib has shifted their perspective, leading to a broad phase 3 program. He sees food allergy as a multi-billion-dollar opportunity, particularly for a safe, oral, high-efficacy option for children, and mentioned evaluating other internal and external pipeline opportunities to bolster the portfolio.

Seamus Fernandez asked for Novartis's perspective on the overall food allergy opportunity within its portfolio, referencing Xolair's success and the potential for BTK inhibitors and beyond.

Answer

Vasant Narasimhan, CEO of Novartis, highlighted the company's long history in food allergy research. He noted that positive phase II data for remibrutinib in food allergy has shifted their perspective, leading to a broad phase III program. He views food allergy as a multi-billion-dollar opportunity, especially for a safe, oral, high-efficacy option for children, and mentioned evaluating other internal and external pipeline opportunities to bolster this portfolio.

Seamus Fernandez of Guggenheim Partners asked about the opportunity for the B-cell therapy inalumab in Sjogren's disease and other conditions, following the update on its development in hidradenitis suppurativa (HS).

Answer

CEO Vasant Narasimhan explained that while the HS hypothesis for inalumab did not prove successful, it does not diminish the company's conviction in the drug's potential in B-cell-driven diseases like Sjogren's and lupus. He emphasized that learnings across multiple platforms (BTK, anti-BAFF, CAR-T) are advancing their overall strategy in B-cell management.

Seamus Fernandez asked about Novartis's focus areas for value-creating bolt-on M&A, specifically inquiring about opportunities for life cycle management within its hypertension and heart failure portfolio ahead of Entresto's loss of exclusivity.

Answer

CEO Vasant Narasimhan responded that the company feels very good about its existing cardiovascular pipeline, which includes Leqvio, pelacarsen, and the recently acquired abMAA. While always evaluating opportunities, he stated there is no particular focus on bolt-on deals in the cardiovascular space at this time.

Seamus Fernandez asked about the opportunity for Ianalumab, specifically where the company is most excited about its potential, highlighting the upcoming Sjogren's syndrome data as a key catalyst.

Answer

CEO Vasant Narasimhan expressed significant excitement for Ianalumab in both immunology and hematology. He highlighted the Sjogren's readout as a foundational catalyst, followed by lupus and ITP. He noted that with six Phase III studies running, the drug has the potential to be a very significant, and likely underappreciated, medicine for the company.

Seamus Fernandez of Guggenheim Securities asked for Novartis's strategic thinking on the obesity market, questioning whether a late entry would make sense and how the company might approach it.

Answer

CEO Vasant Narasimhan stated that Novartis will not pursue a 'fast follower' strategy with GLP-1 type mechanisms, viewing the market as difficult to penetrate late due to the entrenchment of incumbents. Instead, the company's focus is on developing next-generation, differentiated medicines. This includes long-acting agents, new mechanisms for muscle sparing, or centrally acting pathways, reflecting a disciplined approach learned from past experiences like its late entry into PD-1 inhibitors.

Seamus Fernandez inquired about the Kaposi sarcoma case associated with Amlitelimab, specifically whether it was on-mechanism or patient-specific, and if any other cases have been observed. He also asked for clarification on Lunsemig's potential role in atopic dermatitis, particularly regarding TSLP contribution.

Answer

Houman Ashrafian, EVP and Head of Research and Development, confirmed existing data suggesting TSLP's therapeutic benefit in atopic dermatitis and stated that the Kaposi sarcoma case, caused by herpes virus, was anticipated as a theoretical risk with immunomodulators, aligning with the initial benefit-risk assessment, with no significant concern.

Seamus Fernandez asked for details on a Kaposi sarcoma case related to Amlitelimab, specifically if it was on-mechanism or patient-profile specific, and sought confirmation of no other cases. He also requested clarification on comments regarding TSLP's contribution in early atopic dermatitis data for Lunsemig and its potential role.

Answer

Paul Hudson, CEO, and Houman Ashrafian, EVP and Head of Research and Development, confirmed that Kaposi sarcoma, caused by herpes virus, is an anticipated theoretical risk with immunomodulators, potentially on-mechanism for Amlitelimab, but consistent with the molecule's benefit-risk profile. They affirmed existing data suggesting TSLP's therapeutic benefit in atopic dermatitis, and the potential for Lunsemig's TSLP and IL-13 combination to have an additive or synergistic effect, with data expected soon.

Seamus Fernandez requested an update on riliprubart's timing for CIDP readout (clarifying H2 2026) and sought a better understanding of when decisions would be made on programs with 'unfortunate outcomes' or under review, such as oral TNF and itepekimab.

Answer

Houman Ashrafian (Head of R&D) stated that riliprubart's Phase III CIDP studies are 'creeping over the year' due to patient recruitment, with encouraging Phase II results. He noted that data for other assets would be presented at scientific congresses, with itepekimab's advancement subject to regulatory approval and balinatunfib (oral TNF) showing clinically meaningful efficacy in deeper disease control endpoints.

Seamus Fernandez requested an update on the timing for relipiravir's CIDP readout and sought clarity on when decisions would be made regarding the advancement or elimination of pipeline assets like oral TNF and etopicumab, which are undergoing secondary analysis.

Answer

Head of R&D Houman Ashrafian stated that relipiravir's phase 3 CIDP readouts are now expected slightly beyond year-end due to patient recruitment, noting encouraging phase 2 results. He confirmed that etopicumab will move forward subject to regulatory approval with partners, and decisions on other assets like oral TNF and asthma programs will be based on a portfolio review and presented at scientific congresses.

Seamus Fernandez from Guggenheim Partners asked about the Dupixent patent estate, life cycle management with Regeneron, and the potential for using amlotelimab in combination therapies.

Answer

EVP & General Counsel Roy Papatheodorou confirmed the U.S. compound patent for Dupixent expires in 2031 but noted a portfolio of other patents extends well into the 2040s. EVP & Head of R&D Houman Ashrafian stated that while the current focus is on amlotelimab monotherapy, the OX40 ligand mechanism opens future combination possibilities.

Seamus Fernandez of Guggenheim Partners asked CEO Paul Hudson and executive Houman Ashrafian to each name their most exciting pipeline catalysts for 2025, noting investor interest in itepekimab.

Answer

Executive Houman Ashrafian highlighted the Dupixent COPD launch, the potential of itepekimab for former smokers, amlitelimab's progress, and the internally generated bispecific lunsekimig. CEO Paul Hudson expressed excitement for all Phase II programs, specifically mentioning the game-changing potential of itepekimab in COPD and tolebrutinib in primary progressive MS.

Seamus Fernandez asked for color on the expected growth trajectory for Dupixent's upcoming COPD launch and inquired about the most appropriate opportunities for the CD40 ligand asset outside of multiple sclerosis.

Answer

Brian Foard, EVP and Head of Global Hub, Specialty Care GBU, stated that while the Dupixent COPD launch will begin this year, most of the growth is expected in 2025, leveraging their existing relationships with the physician population. Houman Ashrafian, EVP and Head of R&D, identified Type 1 diabetes and transplant rejection as the most obvious biological fits for the CD40 ligand asset beyond MS.

Seamus Fernandez inquired about competitive developments in asthma and COPD treatment, specifically GSK's long-acting agents, and how AstraZeneca's existing portfolio and pipeline pursuits are positioned to defend against these.

Answer

EVP of Biopharmaceuticals Business Unit Ruud Dobber highlighted the strong performance of Fasenra and Tezspire, emphasizing efficacy as the primary driver for physician choice. He also mentioned AstraZeneca's efforts to develop the first inhaled T-slip molecule to broaden patient access for severe uncontrolled asthmatics, with results expected in 2026.

Seamus Fernandez asked about competitive developments in asthma and COPD, specifically GSK's long-acting agents and TSLP program, inquiring about the value of long-acting agents and how AstraZeneca's portfolio is positioned to defend against these.

Answer

EVP of Biopharmaceuticals Business Unit Ruud Dobber emphasized Fasenra and Tezspire's strong performance, with efficacy as a primary driver. He discussed AstraZeneca's inhaled T-slip molecule to broaden patient access and move earlier in treatment, and Fasenra's upcoming China launch.

Seamus Fernandez of Guggenheim Partners asked for details on the path for Enhertu to exceed $10 billion in revenue and inquired about the company's strategy and opportunity in the obesity market.

Answer

EVP of Oncology Business, David Fredrickson, outlined Enhertu's growth path via new indications like DB-09 in the frontline setting, expansion in the ultra-low segment, and future combinations. CEO Pascal Soriot and EVP of BioPharmaceuticals Business Unit, Ruud Dobber, detailed the obesity strategy, focusing on addressing the metabolic syndrome with a differentiated portfolio of oral agents and combinations, targeting central fat and associated risk factors rather than just cosmetic weight loss.

Seamus Fernandez asked for commentary on potential legislative action to align incentives for small and large molecules under the IRA and what the positive DB09 results might predict for Enhertu's success in the adjuvant setting.

Answer

CEO Pascal Soriot responded that aligning small molecule incentives would be a positive development for the industry and for AstraZeneca's pipeline, including camizestrant. EVP, Oncology R&D, Susan Galbraith explained that DB09's success against a strong three-drug regimen demonstrates Enhertu's power, which provides confidence for its potential to improve upon current standards of care in the upcoming adjuvant (DB05) and neoadjuvant (DB11) trial readouts.

Seamus Fernandez asked why Enhertu's growth isn't stronger given its robust data and inquired about AstraZeneca's broader strategic approach to the obesity market.

Answer

EVP, Oncology Business Unit, David Fredrickson, expects more robust sequential growth for Enhertu in H2, citing its 'early innings' status and pending guideline updates. CEO Pascal Soriot detailed a holistic 'cardiac, kidney, metabolism' strategy, segmenting the market into 'weight management' for oral therapies and 'obesity' for titrated combinations, expressing high confidence in the plan.

Evan Wang, on behalf of Seamus Fernandez, asked about the PWS trial amendment (extension to 52 weeks) and any observed dropouts, as well as international launch preparations for HO, particularly in Europe, and dialogues with reimbursement authorities.

Answer

David Meeker, Chairman, CEO and President, declined to provide specific updates on PWS patient numbers or dropouts, reiterating that data would be released in December. Yann Mazabraud, EVP, Head of International, discussed expected European HO launches in 2027, following the BBS sequence, highlighting ongoing payer engagement and plans to add staff for the HO opportunity.

Evan Wang, on behalf of Seamus Fernandez, asked for an update on the Prader-Willi trial amendment (extension to 52 weeks, patient dropouts) and details on international launch preparations for HO in Europe, considering existing BBS approvals and dialogues with reimbursement authorities.

Answer

David Meeker, Chairman, CEO and President, Rhythm Pharmaceuticals, stated that specific patient data and dropouts for the Prader-Willi trial would be disclosed in December. Yann Mazabraud, EVP, Head of International, Rhythm Pharmaceuticals, outlined plans for a 2027 European HO launch, following a similar sequence to BBS. He noted that payers are familiar with setmelanotide and the company, and initial engagements have begun. He also mentioned plans to add staff to cover the larger HO patient population.

Seamus Fernandez of Guggenheim Partners asked about Rhythm's long-term growth opportunity, particularly how management views the potential of the BBS and acquired hypothalamic obesity (AHO) markets and the company's evolution into a more significant specialty player.

Answer

David Meeker, Chairman, President & CEO, expressed high confidence in the long-term, steady growth of BBS, which he sees growing for decades as new global markets are added. He described AHO as a larger opportunity with a potentially steeper ramp due to its specialty-like nature, but still characterized by steady, long-term growth rather than an explosive launch. He believes the AHO epidemiology could ultimately prove to be larger over time.

Seamus Fernandez of Guggenheim Securities inquired about the development timeline and efficacy expectations for bivamelagon, and asked about the potential opportunity for MC4R agents in Prader-Willi syndrome (PWS) given previous trial results.

Answer

David Meeker, CEO, stated his hope is for bivamelagon to show efficacy north of a 10% weight reduction, which would establish it as a viable drug, and that the company would move aggressively into Phase III for HO if data is positive. Regarding PWS, he noted the biology is relevant but the disease is complex. He believes there is a legitimate 50-50 chance of success and that any meaningful weight loss would be significant, as nothing currently helps these patients lose weight.

Seamus Fernandez asked about the expected market uptake for hypothalamic obesity (HO) given its prevalence, and whether a patient's pre-injury obesity 'set point' could affect treatment outcomes.

Answer

CEO David Meeker explained that HO uptake should be faster than for BBS due to a concentrated, diagnosed patient base, though reimbursement remains a factor. He theorized that setmelanotide aims to restore physiology to the pre-injury state, suggesting it would not address pre-existing obesity but would still be a major health restoration.

Seamus Fernandez inquired if the new French hypothalamic obesity (HO) data could accelerate the expansion of early access programs in Europe and asked for a progress update on the next-generation pipeline assets, RM-718 and bivamelagon.

Answer

EVP, Head of International Yann Mazabraud confirmed the local French data will help with uptake in France and Italy and could spur named patient sales in other countries. Chairman, CEO and President David Meeker stated that for RM-718, they plan to submit toxicology data to the FDA and target first patient dosing in Q1 2025. For bivamelagon, enrollment is now over 50% complete, with full enrollment expected in Q1 2025, making a mid-year data readout possible.

Seamus Fernandez of Guggenheim Partners requested clarification on the proton-pump inhibitor (PPI) drug interaction mentioned in past filings and asked about lorunderstat's 24-hour blood pressure profile and expectations for the OSA study.

Answer

CEO Jon Congleton explained the PPI interaction is an exposure issue, not safety, as acidity affects bioavailability, and suggested physicians could monitor and adjust dosage if needed. He affirmed high confidence in the 24-hour blood pressure control, citing robust morning trough measurements from four trials. For the OSA study, he noted the goal is to improve AHI and nighttime blood pressure, with data anticipated in 2026.

Seamus Fernandez of Guggenheim Partners questioned how the company's target of 47,000 physicians intersects with its need for a partner and what the key gating factors are for finalizing and filing the NDA.

Answer

Executive Jon Congleton responded that while the 47,000 physicians represent an efficient initial target, a partner is crucial to maximize lorundrostat's value ex-U.S. and to broaden reach within the U.S. He identified the primary NDA gating factor as the completion of the 52-week open-label extension study for a majority of subjects, with a key pre-NDA meeting with the FDA scheduled for Q4 to gain clarity on submission timing.

Seamus Fernandez of Guggenheim Partners sought confirmation that the upcoming cystic fibrosis data would include the full 28-day results for the 10mg cohort and asked for the company's definition of a clinically meaningful FEV1 improvement.

Answer

President and CEO Joseph Payne confirmed the data will include 28-day results for all nine subjects from the first two cohorts. He stated that while a 3% FEV1 improvement is a reasonable benchmark, the FDA's primary focus for this novel therapy in a severe population is on safety, tolerability, and any positive FEV1 change. CFO Andrew Sassine added that even stabilizing FEV1 would be a remarkable outcome for this patient population, which typically experiences progressive decline.

Seamus Fernandez asked about potential differences between the upcoming End-of-Phase-2 FDA meeting and the previous Type C meeting, what the company hopes to achieve with its BARDA grant proposal, and the potential for BARDA to issue procurement orders for CD388.

Answer

President and CEO Dr. Jeffrey Stein, supplemented by CMO Dr. Nicole Davarpanah, stated they do not expect substantial changes from the Type C meeting but will now discuss the Phase 3 plan in the context of the strong Phase 2b data. Dr. Stein explained the BARDA proposal's base period would fund the onshoring of manufacturing, with options to fund additional clinical studies. He clarified that procurement orders would likely only occur under an Emergency Use Authorization during an outbreak, not as a pre-emptive stocking order.

Seamus Fernandez inquired about the potential market opportunity for CD388, asking if the addressable patient population could be larger than the 20 million previously discussed and if the pricing could exceed the historically modeled $180-$200 range.

Answer

Executive Jeffrey Stein confirmed that the company's view on the market opportunity has expanded. Executive Jim Beitel elaborated that the 20 million figure represents severe cases, but market research shows physician interest in moderate cases as well. Beitel also expressed confidence in achieving pricing 'meaningfully above' the mentioned range, with more details on segmentation and pricing to be provided at the R&D Day.

Seamus Fernandez inquired about the market opportunity for Avexatide, specifically the size of the severe post-bariatric hypoglycemia (PBH) patient population and the pace of enrollment for the Phase III LUCIDITY trial.

Answer

Co-CEO & Co-Founder Josh Cohen addressed the market size, citing Dr. Craig's estimate of 160,000 patients with 'medically important PBH' and a subset of 30,000 with 'critical PBH.' He also reiterated confidence in completing trial enrollment by year-end, with data expected in 2026.

Seamus Fernandez of Guggenheim Partners inquired about the revenue trajectory for Q3 2025, asking whether to expect a decline, flat performance, or moderated growth. He also asked about the company's long-term growth strategy, specifically the balance between pursuing further label expansions for XERIV versus external business development.

Answer

President and CEO Frank Watanabe clarified that Arcutis's business development strategy focuses on leveraging its best-in-class development capabilities for differentiated, development-stage assets, not on acquiring on-market revenue. Chief Commercial Officer Todd Edwards addressed Q3 guidance, stating the company anticipates continued sequential growth, though the rate will be moderated due to typical market seasonality before returning to robust growth in Q4.

Seamus Fernandez from Guggenheim Securities asked how the new scalp and body psoriasis indication could expand ZORYVE foam's utilization, whether it might cannibalize the cream formulation, and if the product was too early in its lifecycle to see significant seasonality effects.

Answer

Todd Edwards, Chief Commercial Officer, stated that he does not anticipate meaningful cannibalization, expecting instead a broader use of the ZORYVE portfolio as clinicians choose the best formulation for the patient's specific needs. He noted that with 80% of psoriasis patients having scalp involvement, foam utilization should increase. He reiterated that while some seasonality is expected, the 'portfolio effect' of prescribers using ZORYVE across indications will continue to drive strong demand. CEO Frank Watanabe added that it's unlikely existing cream patients will switch, but new starts may favor the foam, especially since competitors lack a good scalp formulation.

Seamus Fernandez of Guggenheim Partners inquired about the business momentum in Q4, asking for specifics on refill rates and tubes per patient per year. He also asked for the company's perspective on the 2025 consensus revenue estimates and the sustainability of the strong script trajectory.

Answer

Chief Commercial Officer Todd Edwards provided refill rates of approximately 40% for psoriasis cream and 38% for seborrheic dermatitis foam, with tubes per patient per year expected to be around 2 for cream and 2-3 for foam. Chief Financial Officer David Topper stated the company is 'very comfortable' with the 2025 consensus revenue of $280M-$285M, while cautioning about typical Q1 gross-to-net headwinds from deductible resets.

Seamus Fernandez of Guggenheim Securities asked if there was any channel stocking that contributed to the strong quarterly results and questioned the timing and progression of Medicare coverage in 2025, particularly for seborrheic dermatitis.

Answer

Chief Commercial Officer Todd Edwards confirmed there was no inventory stocking in the quarter. He attributed the strong gross-to-net improvement to a higher percentage of paid prescriptions, efficient prior authorization processes, and lower patient deductibles. Regarding Medicare, he noted that while discussions are positive, the Inflation Reduction Act has slowed PBM operations, delaying 2024 coverage wins, but the company expects to secure coverage in 2025.

Seamus Fernandez from Guggenheim asked about the strategic decision-making between advancing VAX-24 or pivoting directly to VAX-31 in the pediatric setting, and also explored the potential for a post-approval efficacy study for an otitis media claim.

Answer

CEO Grant Pickering explained that both the VAX-24 and VAX-31 infant programs are advancing in parallel, with VAX-24 data arriving first. The ultimate strategy will be informed by the strength of the upcoming VAX-24 data. EVP & COO Jim Wassil highlighted the significant opportunity in otitis media, noting VAX-31's superior serotype coverage (~90% vs. ~40% for PCV20) could make a post-approval efficacy study both feasible and highly compelling.

Asked about expectations for the pediatric 3-dose primary series data and whether Vaxcyte could show a superior profile to Prevnar 20. Also questioned whether the company might be required to conduct a head-to-head trial against Merck's V116 in the adult setting.

Answer

For the pediatric setting, the company noted that fewer doses (like the 2+1 schedule in Europe) put more pressure on immune response, where Prevnar 20 showed 11 misses. If VAX-24 demonstrates higher immune responses, it could have a significant advantage, particularly in Europe. Regarding a trial against V116, they will wait to see the ACIP recommendation; if V116 receives a non-preferential recommendation, Vaxcyte believes it will have the choice of comparator for its Phase III study.

Asked about the financial outlook for Q4 for both DAXXIFY and the RHA filler franchise, as well as DAXXIFY's current market share in the neurotoxin market.

Answer

The company expects Q4 to be a seasonally strong quarter with growth for both DAXXIFY and RHA. They are encouraged by early positive trends from the DAXXIFY price change, such as increased vial sales and reorders. They estimate DAXXIFY's market share is around 2-3% based on smaller data sets but are focused on future growth. The RHA filler franchise is expected to see seasonal growth and continues to gain market share despite broader market softness.