Chief Executive Officer, Arcutis Biotherapeutics
When Arcutis Biotherapeutics was founded in 2016, the calculus looked straightforward from the outside: pediatric dermatology was a small, fragmented, commercially unattractive market, and larger companies had largely abandoned it. Arcutis’ leaders saw something different. With a founding team anchored by practicing dermatologists, Arcutis built its entire thesis around a clinical insight that commercial models tend to miss: the patients hardest to treat are often the ones most underserved by existing science. That insight has driven ZORYVE (roflumilast) through an unusually disciplined age-extension program, from adults down to adolescents, then to toddlers, and now to infants as young as three months old, with an FDA PDUFA date set for February 2027. What makes the Arcutis story worth studying is not just the science. It is how the company navigated the FDA as a genuine collaborative partner, priced its way into Medicaid formularies, and is now providing telehealth access to reach patients in counties where the nearest dermatologist is 250 miles away.
Moe: Why did Arcutis focus on pediatric dermatology when larger companies had already passed on it?
Frank Watanabe: I don’t know that we thought about it as them being wrong, exactly. One of the hallmarks of Arcutis is the very strong involvement of dermatology clinicians at the company. One of our founders was a board-certified dermatologist, and he now sits on our board. Our chief medical officer is also a dermatologist. That really helps us understand the pain points for dermatologists and their patients. Pediatrics was clearly an area that had been neglected in a lot of research, and that was a major problem for clinicians.
We’ve recently filed with the FDA for approval of ZORYVE for three- to 24-month-old infants with atopic dermatitis. There are only seven FDA-approved products for that patient group, and only one of them is a non-steroid. There really aren’t very many options, and it’s very difficult for physicians to treat those patients and very challenging for the families.
Our mantra is meaningful innovation. When people ask me what that means, I tell them meaningful innovation is innovation that somebody cares about. It solves a real problem. Our recent approval in psoriasis for two- to five-year-olds is a good example. There is no other product approved in that population. No one had ever studied pediatric psoriasis patients before. It’s fairly rare, but that makes it really difficult for doctors to manage those patients. We knew that, and so we decided to pursue that indication.
Moe: How did the stepwise age-extension strategy for ZORYVE develop?
Frank: Historically, the FDA has wanted you to get a drug approved in adults first, then typically in adolescents 12 and above, then down to kids as young as two, and then a handful of companies would go on to study infants in the three- to 24-month range.
When we went to our end-of-Phase 2 meeting with the FDA for psoriasis, which was our first indication, we told them we planned to study down to age 12. They actually asked us to study it down to age two. We ran our Phase 3 trials as all-comers and didn’t enroll enough of the two- to 11-year-olds to satisfy the FDA, so they asked us to run another study in the younger kids. We ended up running two: one in six- to 11-year-olds, which recruited fairly quickly and got approved a couple of years ago, and one in two- to five-year-olds, which was very difficult to recruit and took a long time because there are so few patients in this age group with psoriasis.
With seborrheic dermatitis, the FDA again asked us to study down to age nine instead of 12. They explained that puberty is occurring earlier in kids now, and seborrheic dermatitis is associated with the onset of puberty, so they wanted us to study it in that younger population. We did, and we got the indication.
Atopic dermatitis was a little different, because we decided to use two different strengths depending on age. ZORYVE is approved at 0.15% for patients six and above. We studied a lower concentration, 0.05%, in two- to five-year-olds and then subsequently in three- to 24-month-olds. The reasoning is clinical. Atopic dermatitis is a skin barrier defect, so drugs penetrate more easily in AD patients than in psoriasis or healthy skin. In young children, the skin hasn’t fully developed, so even more drug gets in. The body surface to body volume ratio is also different in little kids than in adolescents and adults. They have a higher ratio, which means potentially greater systemic exposure, even for a topical. And obviously, in very little kids, safety is especially important. We knew this lower dose was as effective as the mid-strength concentration, so it made sense to go that route.
So the strategy was partly regulatory, and partly clinically driven.
“When the system’s working well and the company engages the FDA early, it really is a conversation between the two parties. We’ve seen any number of instances where the FDA tells the company something, the company ignores it, and that comes back and bites them in the review process.”
Moe: How did you approach the FDA relationship on the infant filing?
Frank: When the system is working well and the company engages the FDA early, it really is a conversation between the two parties. The FDA expects you to demonstrate safety and efficacy. The company wants to achieve a certain label. There is a back and forth. I had a very similar experience when I was co-leading the development of Repatha at Amgen. There was a lot of conversation back and forth about what we wanted, what they would need for approval, and what the regulatory pathway would look like.
The key is that the sponsor listens closely to what the FDA says. We’ve seen instances where the company meets with the FDA, the FDA tells them something, the company ignores it, and it comes back and bites them during the review process. The FDA is also sometimes guilty of moving the goalposts. But in general, when you have an ongoing constructive dialogue, which I think we’ve had with ZORYVE since very early on, it helps both sides achieve what everyone is ultimately trying to achieve, which is helping patients.
Moe: How did you build the evidentiary case for the infant filing specifically?
Frank: It depends on the circumstances: the product, the indication, the patient population. In this case, the FDA has now approved ZORYVE seven times across various indications and age groups. They have seen a mountain of clinical data on this molecule already.
When we talked with them about the three- to 24-month study, both sides understood that enrolling infants is extremely difficult. They are the most vulnerable patients. They can’t speak for themselves, and their parents are understandably very reluctant to put them in trials. So the FDA is typically looking for a relatively small study that can demonstrate the data from older kids can be extrapolated to infants and that there isn’t a meaningful safety difference.
In our case, they wanted PK data to show that drug exposure in infants was not substantially different from what was seen in two- to five-year-olds. We demonstrated that. They also wanted open-label data showing that efficacy and tolerability would be similar. The 100-patient open-label study is a small size, but it’s achievable. The open-label design helps too, because no parent wants to put their infant on vehicle. That’s difficult even with older kids, but especially with infants. That’s why these studies are typically run open label.
The data, as we have publicly disclosed, is very comparable, and in some respects slightly better than what we’ve seen in older kids and adults. We are very hopeful that the FDA will grant the approval, and we’ve announced that the PDUFA date will be in February 2027.
Moe: Why does ZORYVE’s differentiation hold up against competing non-steroidals?
Frank: In the three- to 24-month space specifically, there is almost no competition in the non-steroidal category. Even across the steroid market, only six topical steroids are approved in infants, out of hundreds on the market.
The only other non-steroidal approved in this population is Pfizer’s Eucrisa, which is also a topical PDE4 inhibitor. It has been on the market since around 2017, but has had limited uptake with clinicians due to its clinical profile.
What sets us apart is that we are a once-daily cream that is well tolerated and has little to no stinging and burning. We were intentional about our formulation, which does not include sensitizers and known irritants, and along with our efficacy profile we think that gives us a substantial advantage.
On the steroid side, there is a large and growing concern, both in the general population and in dermatology, about the safety implications of long-term steroid use. In young children specifically, there is a risk of growth retardation from HPA suppression. The skin isn’t fully developed, and we have to worry about local side effects like skin thinning and stretch marks. There are also other risks, including ocular issues and hyperglycemia. So having a non-steroidal option for these patients should be compelling.
On payer coverage, we already have strong access. About 80% of commercial lives have access to ZORYVE. Over half of Medicaid lives also have access, which matters because a lot of children are on Medicaid. In most cases, it is a fairly straightforward single step through a generic product before the patient can access ZORYVE. In some cases, like California Medicaid, there is no step at all. ZORYVE is first-line therapy there. Part of that reflects the clinical value proposition, and part of it reflects how we priced the product when we launched. Payers have responded positively to our pricing compared to some of the other branded topicals on the market.
Moe: Why do utilization management criteria represent such a specific risk for infant patients?
Frank: Utilization management is ostensibly a cost-control measure, but what it does in practice is have the insurance company dictate to the doctor how to practice medicine. You must use this product first before that product. In some cases, the insurance companies are requiring the doctor to use a drug for a non-FDA-approved purpose before the doctor can use the FDA-approved product. I personally find that absolutely outrageous. The insurance companies bear no liability for potential medical malpractice when issues arise from those decisions.
In infants, where many drugs aren’t approved, this becomes a major problem. We hear from pediatric dermatologists all the time that the insurance companies are asking them to do things in infants that they are just not clinically comfortable doing. The doctor and the insurance company get into a battle over it, because there is a baby caught in the middle. The insurance company says to use methotrexate, and the doctor says there is no way they are giving this baby methotrexate.
Rural access is the other persistent issue, and one I know Congress is very focused on. It is harder to find a specialist in a rural area than a primary care physician. The economics push physicians toward cities. We recently launched a telehealth offering that I think will be particularly relevant for people in rural areas where specialty care is not accessible. I was in Roswell, New Mexico a number of years ago, meeting with a clinician who is not a dermatologist but practices dermatology because there is no dermatologist within 250 miles. He figured out he had to do it for the patients. Being able to connect those patients with a trained dermatologist through telehealth could be very significant. One positive thing that came out of COVID was that everyone became a lot more comfortable with that model.
“Within four weeks, roughly half of patients saw a 75% improvement in their overall eczema signs and symptoms.”
Moe: How quickly do infants and their families see a real difference after starting treatment?
Frank: The hallmark symptom in atopic dermatitis is itch. Eczema is actually referred to as “the itch that rashes.” The patient itches, scratches, and gets a rash. It is not the other way around.
In our data, roughly two-thirds of patients had improved within four hours of the first application. Within the first 24 to 48 hours, many patients see improvement. And now, in the infant studies, we are showing improvement in itch as quickly as ten minutes after the first application.
The parent can see that because a baby with AD is going to be very fidgety and will actually scratch themselves. When that settles down, the parent can tell the infant is less itchy. You can ask an adult whether they are itchy. With a baby, you have to read the signs.
As the itch improves and the patient stops scratching, the rash improves. You get scabs from where the scratching occurred, and those will disappear. In our larger Phase 3 studies, within four weeks, roughly half of patients saw a 75% improvement in their overall eczema signs and symptoms. That was accomplished with a generally very safe tolerability profile. PDE4 inhibitors are associated with things like headache, nausea, diarrhea, and vomiting. We do see very low single-digit rates of those in our trials, higher than vehicle, so we do believe it is drug-related. But this is a generally safe and effective pathway.
For more information about ZORYVE including the Prescribing Information, visit zoryve.com.
Frank Watanabe is Chief Executive Officer of Arcutis Biotherapeutics, which he co-founded in 2016. Prior to Arcutis, he held senior development roles at Amgen, where he co-led the development of Repatha.
Moe Alsumidaie is Chief Editor of The Clinical Trial Vanguard. Moe holds decades of experience in the clinical trials industry. Moe also serves as Head of Research at CliniBiz and Chief Data Scientist at Annex Clinical Corporation.
