In a report released today, Douglas Tsao from H.C. Wainwright reiterated a Buy rating on Arcutis Biotherapeutics (ARQT – Research Report), with a price target of $19.00.
Douglas Tsao’s rating is based on several strategic and financial considerations. The recent agreement between Arcutis Biotherapeutics and Padagis regarding ongoing patent litigation is seen as a significant advantage for Arcutis. This agreement extends the regulatory exclusivity period, which strengthens Arcutis’s market position and diminishes the threat from generic competition. Furthermore, the requirement for Padagis to report any FDA correspondence about its generic alternative to Arcutis provides the latter with valuable insights, suggesting Padagis’s lack of confidence in their approval prospects.
Additionally, Tsao’s valuation of Arcutis is supported by a risk-adjusted revenue estimate and a consistent multiple with industry standards. The Buy rating reflects confidence in Zoryve’s commercial performance and the strategic value of Arcutis shares, given the extended exclusivity period. However, Tsao also acknowledges risks such as the competitive dermatology market, product concentration, and potential impacts from new therapies, which are factors investors should consider.
In another report released yesterday, Mizuho Securities also maintained a Buy rating on the stock with a $21.00 price target.
Based on the recent corporate insider activity of 72 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ARQT in relation to earlier this year.