ARQT - Arcutis: Slow Sales Of Zoryve May Be Painting The Wrong Picture

2024-01-31 03:09:25 ET

Summary

• Arcutis is a late-stage biopharmaceutical company focused on developing treatments for immune-mediated dermatological diseases.
• The company has received FDA approval for its topical cream, Zoryve, for the treatment of plaque psoriasis and seborrheic dermatitis.
• Arcutis has struggled to meet revenue and earnings targets, leading to a decline in its share price and concerns about potential debt covenant breaches.
• Zoryve appears to be a strong product as an alternative to oral, injectable dermatology drugs, however, and an approval in AD this year will substantially enlarge the market opportunity.
• The market may have been too quick to judge initially weak Zoryve sales data - while a risky stock to hold, strong sales and narrowing losses could drive significant share price upside in 2024.

Investment Overview

Arcutis (ARQT) IPO'd back in January 2020, raising ~$160m via the issuance of 9.375m shares priced at $17 per share. At the time, the company described itself as follows:

a late-stage biopharmaceutical company focused on developing and commercializing treatments for unmet needs in immune-mediated dermatological diseases and conditions, or immuno-dermatology.

Arcutis is currently developing three novel compounds (ARQ-151, ARQ-154 and ARQ-252) for multiple indications, including psoriasis, atopic dermatitis, seborrheic dermatitis and eczema.

For further details see: