Arcutis Buy Rating: Zoryve’s Strengthened Pediatric Data and Undervalued Long-Term Revenue Potential

In a report released today, Douglas Tsao from H.C. Wainwright reiterated a Buy rating on Arcutis Biotherapeutics, with a price target of $30.00.

Douglas Tsao has given his Buy rating due to a combination of factors related to Zoryve’s clinical profile and Arcutis’s valuation. He views the new Phase 2 data in infants and very young children with mild-to-moderate atopic dermatitis as reinforcing Zoryve cream 0.05%’s strong safety and meaningful efficacy, supporting the likelihood of FDA approval in this underserved age group. Tsao expects that, if approved, Zoryve could be positioned as a first-line, once-daily, non-steroidal treatment at the onset of symptoms, which would address a clear unmet need and expand the drug’s commercial opportunity. He also notes that the trial’s efficacy rates compare favorably with prior results in slightly older children, suggesting consistent performance across pediatric age ranges.
In addition, Tsao highlights that Zoryve’s safety and tolerability appear at least as good as, and potentially better than, the profile seen with Eucrisa, the key precedent therapy in this population, which has faced commercial headwinds partly due to tolerability issues. He believes this advantage could support stronger adoption once the label is expanded. From a valuation standpoint, his $30 price target is grounded in applying a 7x multiple to risk-adjusted 2035 revenue estimates of $521M, discounted to present, with Zoryve’s already-approved uses assigned a 100% probability of success. While he acknowledges competitive dynamics, product concentration on Zoryve, potential shifts toward oral therapies, and clinical development risks for new indications, he concludes that the risk-reward profile justifies a Buy rating.

In another report released today, TipRanks – Google also reiterated a Buy rating on the stock with a $29.00 price target.