NESS ZIONA - Sol-Gel Technologies Ltd. (NASDAQ: NASDAQ:SLGL), an Israel-based dermatology company, announced today that its partner, Padagis Israel Pharmaceuticals Ltd., has submitted an Abbreviated New Drug Application (ANDA) to the U.S. Food and Drug Administration for a generic version of Zoryve Cream, used to treat plaque psoriasis. The submission has sparked a patent infringement lawsuit from Arcutis Biotherapeutics, Inc. (Nasdaq: NASDAQ:ARQT), which initiated legal action on Sunday.
The contested product, Roflumilast Cream, 0.3%, is a generic equivalent to Zoryve Cream, which reported approximately $95 million in sales for the 12 months ending January 2024, according to data from IQVIA. If the ANDA gains approval, Padagis may receive 180 days of market exclusivity for its generic cream. Sol-Gel and Padagis have agreed to share gross profits from potential sales, after accounting for certain development costs.
Sol-Gel, known for its FDA-approved dermatology products TWYNEO and EPSOLAY, retains a stake in the Roflumilast Cream project, having divested the majority of its generic portfolio in a deal on November 4, 2021. The company's Executive Chairman, Mr. Mori Arkin, highlighted the market potential of the ANDA product and mentioned that Sol-Gel is considering all options to maximize the opportunity's value.
Arcutis reported that Q4/2023 revenues for Zoryve Cream reached $13.5 million, marking significant growth from both the previous quarter and the same quarter in the prior year. Analysts forecast that Zoryve Cream could generate over $500 million in net revenue by the end of 2030.
Sol-Gel continues to develop its pipeline, including a Phase 3 clinical trial for SGT-610 for Gorlin syndrome and SGT-210 for rare hyperkeratinization disorders.
The news of the ANDA submission and the subsequent patent challenge comes as part of the competitive landscape in the dermatology pharmaceutical market, where companies are vying for market share in lucrative treatment areas. The outcome of the patent litigation and the FDA's decision on the ANDA will be closely watched by industry participants and investors.
This report is based on a press release statement from Sol-Gel Technologies Ltd.
InvestingPro Insights
The recent developments at Sol-Gel Technologies Ltd. (NASDAQ: SLGL) have put a spotlight on the company's financial health and market performance. According to InvestingPro data, Sol-Gel's market capitalization stands at a modest $27.3 million, reflecting the scale of the company within the pharmaceutical industry. Despite the challenges, Sol-Gel's balance sheet holds more cash than debt, which is a positive sign for financial stability. This is particularly important as the company navigates the complexities of patent litigation and seeks FDA approval for its generic version of Zoryve Cream.
However, the company's financial metrics indicate significant headwinds. With a negative P/E ratio of -0.97, and an adjusted P/E ratio for the last twelve months as of Q4 2023 at -1.02, the market's expectations of profitability are low. This aligns with an InvestingPro Tip that analysts do not anticipate the company will be profitable this year. Additionally, a severe decline in revenue growth by -59.98% over the last twelve months signals operational challenges, although there was a substantial quarterly revenue growth of 347.0% in Q4 2023, suggesting some potential for recovery.
InvestingPro Tips also highlight that Sol-Gel is quickly burning through cash and suffers from weak gross profit margins, which are critical factors for investors to consider. The company's gross profit margin stands at an alarming -1414.86%, and its operating income margin is -1885.78%, indicating costs far exceed revenues. Moreover, the stock price has fallen significantly over the last year, with a one-year price total return of -74.74%, which could concern investors looking for stable investments.
For those interested in a deeper dive into Sol-Gel's financials and future prospects, InvestingPro offers additional insights and tips. There are currently 7 more InvestingPro Tips available for Sol-Gel, which can be accessed through the platform. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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