On Thursday, Mizuho reiterated its Outperform rating on shares of Arcutis Biotherapeutics Inc . (NASDAQ:ARQT), with a steady price target of $19.00. The firm's positive outlook is based on the expectation of a strong third-quarter 2024 performance, which is anticipated to be a significant driver for the stock's movement.
Mizuho's analysis, which draws on IQVIA prescription data, has led to an increased third-quarter 2024 revenue estimate from $36.0 million to $39.0 million. This revision reflects raised sales forecasts for Arcutis' products, Zoryve Cream for psoriasis and Zoryve Foam for seborrheic dermatitis, with expected revenues of approximately $19 million each.
The new sales forecast of $39 million aligns with the consensus provided by Arcutis and is higher than the $37 million projected by Bloomberg. Mizuho's outlook suggests there could be further upside potential, citing factors such as better-than-expected gross-to-net performance.
Looking ahead, Mizuho anticipates that the stock will continue to perform positively, with a fourth-quarter 2024 sales forecast of $53 million, compared to a consensus of $50 million, and a 2025 forecast of $255 million versus the consensus of $245 million. The firm attributes this optimism to several factors, including the approaching colder climate, an increase in office visits following the addition of 40 sales representatives, and the recent initiation of detailing by Kowa to primary care physicians and pediatricians, which began approximately 10-14 days ago.
In other recent news, Arcutis Biotherapeutics has seen several significant developments. The U.S. Food and Drug Administration has accepted a Supplemental New Drug Application for ZORYVE foam, a treatment for scalp and body psoriasis, with a target action date set for May 2025. Additionally, clinical trials have shown that ZORYVE foam significantly improved signs and symptoms of psoriasis.
On the financial front, Arcutis reported strong second-quarter results in 2024, with net revenues reaching $30.9 million, marking a 43% increase in net product revenues compared to the first quarter. This growth has been largely driven by the significant prescription growth for its dermatology products, including ZORYVE cream and foam.
Analysts from Mizuho Securities, TD Cowen, and Jefferies have maintained a positive outlook on Arcutis. Jefferies has set a Buy rating on Arcutis shares, citing the company's potential for growth and estimating that ZORYVE could achieve peak sales of $800 million.
Arcutis Biotherapeutics has also announced the publication of results from two Phase 3 studies, INTEGUMENT-1 and INTEGUMENT-2, evaluating the efficacy and safety of ZORYVE cream in treating mild to moderate atopic dermatitis. The company is also initiating the launch of the cream for atopic dermatitis while filing a supplemental New Drug Application for the foam to be used on scalp and body psoriasis. These are the most recent developments for Arcutis Biotherapeutics.
InvestingPro Insights
Arcutis Biotherapeutics Inc. (NASDAQ:ARQT) has shown remarkable financial performance, aligning with Mizuho's optimistic outlook. According to InvestingPro data, the company's revenue growth has been extraordinary, with a 1032.9% increase in the last twelve months as of Q2 2024. This impressive growth rate supports Mizuho's increased revenue estimates for the upcoming quarters.
InvestingPro Tips highlight that analysts anticipate sales growth in the current year, which corroborates Mizuho's positive forecast. Additionally, the company boasts impressive gross profit margins, with InvestingPro data showing a 92.32% gross profit margin in the last twelve months as of Q2 2024. This strong profitability metric could contribute to the company's ability to capitalize on its growing sales.
Despite the positive revenue outlook, it's worth noting that InvestingPro Tips indicate analysts do not anticipate the company will be profitable this year. This aligns with the current focus on growth and market penetration for Arcutis' products, Zoryve Cream and Zoryve Foam.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Arcutis Biotherapeutics, providing a deeper understanding of the company's financial health and market position.
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