On Tuesday, Mizuho Securities maintained its Outperform rating on Arcutis Biotherapeutics Inc . (NASDAQ: NASDAQ:ARQT) stock and increased the price target to $19.00 from the previous $18.00 for the shares.
The adjustment reflects the firm's positive outlook on the company's Zoryve product sales, which are anticipated to exceed market expectations for the second quarter of 2024.
Arcutis Biotherapeutics is expected to report approximately $31 million in sales for its Zoryve franchise for the second quarter, surpassing the consensus forecast of around $28 million. This projection is based on prescription data from IQVIA, a provider of advanced analytics, technology solutions, and contract research services to the life sciences industry.
The company's management has indicated that they expect a modest quarter-over-quarter improvement in gross-to-net (GTN) figures. This anticipated improvement in GTN, a measure of the actual sales revenue remaining after accounting for customer and distributor discounts, rebates, and other allowances, is likely to be a focal point during the company's earnings call for the second quarter.
Mizuho's continued Outperform rating suggests confidence in the long-term potential of the Zoryve franchise, which the firm believes is currently undervalued by the market. Following a review and update of their financial model for Arcutis, Mizuho has revised its price target upward to reflect these expectations.
The Zoryve franchise's performance and the company's financial outlook will be closely monitored by investors as Arcutis approaches its second-quarter earnings release, with particular attention to the GTN improvements guided by the management for the remainder of 2024.
In other recent news, Arcutis Biotherapeutics has reported significant growth in the first quarter of 2024, with net revenues reaching $21.6 million, a 59% increase from the previous quarter. This financial performance is primarily attributed to the success of the company's ZORYVE product lineup, which includes cream and foam variants that generated over 255,000 prescriptions from more than 12,500 unique prescribers. Additionally, Arcutis has raised $172 million in a secondary offering and entered into a licensing agreement with Sato Pharmaceutical.
In the realm of product development, Arcutis is currently awaiting the FDA's final decision on its supplemental New Drug Application (sNDA) for roflumilast cream 0.15% intended for the treatment of atopic dermatitis. Mizuho Securities has reiterated its Outperform rating on the company's stock, expressing optimism about the FDA approval of the sNDA.
Furthermore, Arcutis has received positive feedback for its ZORYVE foam for seborrheic dermatitis and has plans to expand indications for scalp and body psoriasis. Despite a competitive market for the ZORYVE cream in atopic dermatitis, the company maintains confidence in its growth throughout 2024. These recent developments underscore Arcutis Biotherapeutics' strong position in the dermatology treatments market.
InvestingPro Insights
As Mizuho Securities updates its price target for Arcutis Biotherapeutics Inc. (NASDAQ: ARQT), investors may find additional value in considering the recent performance and financial health of the company. According to InvestingPro data, Arcutis has a market capitalization of approximately $1.14 billion, underscoring its status in the biotech industry. With a remarkable gross profit margin of 92.99% in the last twelve months as of Q1 2024, the company's ability to manage production costs relative to its sales stands out. However, it's also important to note that the company's price-to-earnings (P/E) ratio stands at -3.76, reflecting that it is not currently profitable.
InvestingPro Tips highlight that Arcutis holds more cash than debt, suggesting a solid balance sheet, and analysts are anticipating sales growth in the current year. Additionally, the company's liquid assets exceed its short-term obligations, providing financial flexibility. While analysts do not expect the company to be profitable this year, and it's quickly burning through cash, the stock has experienced a significant price uptick over the last six months, with a 135.08% return. Investors interested in deeper analysis and more tips like these can explore further with InvestingPro, and by using the coupon code PRONEWS24, they can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. There are 11 additional InvestingPro Tips available for Arcutis, which could provide investors with a more comprehensive understanding of the company's future prospects.
The positive outlook from Mizuho Securities on the Zoryve product sales aligns with the anticipated sales growth and the strong recent return over the last month. These insights could be particularly useful for investors as they review the company's upcoming earnings call and assess its long-term potential.
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