On Wednesday, Needham raised the price target for Arcutis Biotherapeutics Inc . (NASDAQ: NASDAQ:ARQT), a biopharmaceutical company, to $18.00, up from the previous $16.00, while retaining a Buy rating on the shares.
This adjustment comes following the company's reported earnings, which included total Zoryve sales of $21.6 million, a figure that represents a 60% increase from the previous quarter and significantly surpasses the anticipated $15.2 million by analysts.
The substantial growth in Zoryve sales was attributed to continuous improvements in gross-to-net (GTN) percentages, which have now reached the low 60s. Additionally, the recent launch of Zoryve foam contributed to a roughly 70% quarterly increase in prescriptions.
The Zoryve franchise is expected to continue its sales momentum through prescription volume expansion, which saw a 112% increase in the first five weeks of the second quarter of 2024, and further improvements in GTN percentages.
Arcutis is also anticipating a label expansion for Zoryve cream to include treatment for atopic dermatitis (AD), with a Prescription Drug User Fee Act (PDUFA) date set for July 7, 2024. Moreover, the company is exploring a partnership to market the Zoryve franchise to primary care physicians (PCPs).
The firm's decision to adjust the price target to $18 reflects the robust sales growth trend and an upward revision of Zoryve sales estimates for the treatment of psoriasis and seborrheic dermatitis.
InvestingPro Insights
Following the upbeat sales report from Arcutis Biotherapeutics Inc. (NASDAQ: ARQT), the company's financial health and market performance offer additional insights. Analysts have revised their earnings upwards for the upcoming period, indicating a positive outlook on the company's profitability potential. The InvestingPro Data underscores a remarkable revenue growth of 1517.09% over the last twelve months as of Q1 2023, with a gross profit margin of 91.63%, reflecting the company's ability to maintain high operational efficiency despite its rapid scaling.
However, it's important to note that the company is not expected to be profitable this year, and it has been quickly burning through cash, which could be a concern for long-term sustainability. Despite a significant price uptick over the last six months, the stock has fared poorly over the last month, with a 19.43% decrease. This volatility underscores the need for investors to keep a close eye on the company's financials and market movements. As of now, Arcutis trades at a high Price/Book multiple of 10.59, which may suggest that the stock is priced optimistically relative to its book value.
For those considering an investment in Arcutis, leveraging the comprehensive analysis available through InvestingPro could be advantageous. There are 11 additional InvestingPro Tips for ARQT, which can provide deeper insights into the company's financial health and market performance. Interested investors can use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription for more in-depth analysis and data. The upcoming earnings date on May 14, 2024, could also be a pivotal moment for the company and its stakeholders.
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