On Thursday, TD Cowen maintained a positive outlook on shares of Arcutis Biotherapeutics Inc . (NASDAQ: NASDAQ:ARQT), reiterating a Buy rating and a $20.00 price target for the stock. The firm's stance comes in light of the company's recent sales performance, particularly with its product Zoryve, which has shown impressive sales figures and market growth.
Zoryve, which comes in both cream and foam forms, has outperformed expectations with total sales reaching $31 million—$17 million from the cream and $14 million from the foam. This performance indicates a robust volume growth and a significant quarter-over-quarter improvement in gross-to-net (GTN) to the high 50 percent range. The strong sales figures suggest that Arcutis is gaining solid ground in the market with its offerings.
The company is currently initiating the launch of the cream for atopic dermatitis (AD), while the supplemental New Drug Application (sNDA) for the foam has been filed for use on scalp and body psoriasis (PsO). These steps are expected to further bolster the company's market presence and expand the potential uses of Zoryve.
Moreover, improvements in GTN and Medicare coverage are anticipated to continue by the end of the year. These developments, alongside consistent execution and the partnership with Kowa, are projected to drive volume growth for Arcutis. The company seems to be on a positive trajectory, with strategic moves that could enhance its market performance and benefit its stock value in the near future.
Despite these positive developments, the company has not provided specific financial guidance for the upcoming quarters or committed to a direct-to-consumer campaign for ZORYVE. Lastly, analysts from Goldman Sachs (NYSE:GS) have inquired about the path to positive EBITDA and pipeline updates, indicating a keen interest in the company's future prospects.
InvestingPro Insights
As Arcutis Biotherapeutics Inc. (NASDAQ: ARQT) continues to show promising sales performance with its product Zoryve, a closer look at the company's financial health and market position through InvestingPro data reveals additional insights. With a market capitalization of approximately $989.78 million and a striking revenue growth of over 1545% in the last twelve months as of Q1 2024, Arcutis is demonstrating a rapid expansion in its market reach. This is underscored by a gross profit margin of nearly 93%, highlighting the company's ability to maintain profitability on its sales.
Two InvestingPro Tips that complement this outlook are the analysts' anticipation of sales growth in the current year and the company's impressive gross profit margins. These factors align with the positive momentum noted by TD Cowen and suggest that Arcutis is not just growing its top line but doing so efficiently. However, it is worth noting that analysts do not expect the company to be profitable this year, and the firm is quickly burning through cash. This indicates that while the sales trajectory is encouraging, investors should be mindful of the company's broader financial context.
For those seeking a deeper dive into Arcutis's potential, InvestingPro offers additional tips that could guide investment decisions. In total, there are 9 InvestingPro Tips available, which provide a comprehensive analysis of the company's financials, market potential, and projected performance. These tips can be accessed for further detail and could be instrumental in forming a well-rounded view of Arcutis's prospects.
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