With recent top-and-bottom-line beats, biotech Arcutis Biotherapeutics (ARQT) continues to grab attention as demand for its recently approved treatment for plaque psoriasis, ZORYVE cream, continues to grow. The stock is up 226% year-to-date, and with promising progress on other treatments in the pipeline, it could keep climbing. It is a compelling option for investors interested in early-stage commercialization opportunities in biotechnology.
Arcutis’ Building on Its Successes
Arcutis Biotherapeutics is a biotechnology company concentrating on immune-mediated dermatological diseases and conditions; Arcutis boasts an extensive portfolio that harnesses the company’s dermatology development platform and expertise to create differentiated therapies, with multiple clinical programs for inflammatory skin conditions such as psoriasis atopic dermatitis, seborrheic dermatitis, and alopecia areata.
Recent key milestones include the U.S. FDA approval of ZORYVE cream for treating plaque psoriasis and atopic dermatitis, with over 252,000 prescriptions filled to date, reflecting high patient and physician satisfaction. The company’s ZORYVE foam, approved for seborrheic dermatitis and under FDA review for scalp and body psoriasis, has filled over 98,000 prescriptions since its launch. Arcutis also recently announced the enrollment of the first healthy volunteer subject in a Phase 1b study in alopecia areata for ARQ-255, a topical suspension formulation.
Building on its successes, Arcutis secured five new U.S. patents related to ZORYVE, covering its formulation and therapeutic benefits. The company also recently entered into a co-promotion agreement with Kowa Pharmaceuticals to market and promote ZORYVE cream and ZORYVE foam. It successfully amended a $200 million term loan with SLR Investment Corp (SLRC).
Analysis of Arcutis’ Recent Financial Results
The company recently reported results for Q2 of 2024. Revenue was $30.86 million, beating analysts’ expectations of $27.12 million and marking a significant surge from $4.8 million during the same period in 2023. This rise was driven by the increased demand for ZORYVE cream and ZORYVE foam and enhanced GTN. However, the company’s expenses also increased, with the cost of sales at $3.5 million, R&D expenses at $19.3 million, and SG&A at $58.2 million. Nonetheless, the net loss decreased to $52.3 million from $71.0 million in Q2 2023. Earnings per share of -$0.42 surpassed consensus estimates of -$0.57.
As of the end of the quarter, the company’s cash and cash equivalents stood at $363.1 million, a significant increase from $272.8 million as of December 31, 2023.
What Is the Price Target for ARQT Stock?
The stock has been on an upward trend, climbing roughly 32% over the past year. It trades at the high end of its 52-week price range of $1.76 – $13.17 and shows positive price momentum, trading above its 20-day (9.27) and 50-day (9.31) moving averages. Not everyone is a true believer, as the stock sports a short interest of 18.96% of the shares outstanding, though if the price continues to rise, the shorts could add fuel to the fire as they close out their positions.
Analysts following the company have been bullish on the stock. For instance, Mizuho analyst Uy Ear reiterates a Buy rating on the shares, noting the ZORYVE franchise has had “robust” week-over-week script growth.
Arcutis Biotherapeutics is rated a Strong Buy based on the five analysts’ recent recommendations and price targets. The average price target for ARQT stock is $17.25, representing a potential 63.82% upside from current levels.
Final Analysis on ARQT
Arcutis has recently been making waves, reflected by the surging stock price. High demand for its ZORYVE cream and the ongoing development of other promising treatments point to ongoing upside growth potential. The company’s increasing market presence and positive price momentum underline ARQT’s potential as an investment option worth exploring for those looking to invest in a thriving biotech enterprise.
