On Monday, Needham maintained its Buy rating on Arcutis Biotherapeutics Inc . (NASDAQ:ARQT) shares and increased the price target to $20.00 from the previous $18.00. According to InvestingPro data, analyst targets range from $12 to $29, suggesting potential upside from current levels. The adjustment follows Arcutis' preliminary fourth quarter 2024 sales report for its Zoryve franchise, which surpassed expectations.
Arcutis reported that the Zoryve franchise achieved sales of $63 million in the fourth quarter of 2024, exceeding the anticipated $55 million. The total sales for the year reached $160 million. The growth in the fourth quarter was attributed to prescription volumes, with a total of 184,693 Zoryve prescriptions filled, marking a 41% increase from the previous quarter and a 318% rise year-over-year. InvestingPro analysis reveals an impressive gross profit margin of 89.57%, indicating strong pricing power for the Zoryve franchise.
The company's momentum is expected to continue into 2025, bolstered by the ongoing launch of the 0.15% cream for atopic dermatitis, broader Medicaid and Medicare coverage, and a promotional partnership with Kowa aimed at primary care physicians. Needham's sales projection for Zoryve in 2025 is $298 million, notably higher than the consensus estimate of approximately $269 million.
Arcutis finished the year 2024 with approximately $229 million in cash and the option to access an additional $100 million. InvestingPro analysis shows the company maintains a healthy current ratio of 2.46, with liquid assets exceeding short-term obligations. This financial position is anticipated to sustain the company's operations until it reaches breakeven in 2026. The revised price target reflects a forward-looking valuation as Needham's analysis transitions into the new year. Discover more insights and 8 additional ProTips with an InvestingPro subscription.
In other recent news, Arcutis Biotherapeutics has seen significant developments. Mizuho (NYSE:MFG) Securities upgraded Arcutis' stock price target to $20 and maintained its Outperform rating, reflecting confidence in the biopharmaceutical company's performance. The financial firm's optimism is backed by Arcutis' impressive revenue growth of 183% over the past year, and sales estimates for the company's Zoryve franchise have been raised for the fourth quarter of 2024 and the full year 2025.
H.C. Wainwright has also initiated a Buy rating on Arcutis, highlighting the potential of the Zoryve products for treating psoriasis and atopic dermatitis. The firm anticipates that Zoryve could achieve $1 billion in sales across all indications by 2033. Furthermore, Arcutis has announced several key executive promotions, including Patrick Burnett to Executive Vice President, Chief Medical (TASE:PMCN) Officer, and L. Todd Edwards to Executive Vice President, Chief Commercial Officer.
Arcutis reported a 452% year-over-year increase in net product revenues for its ZORYVE portfolio, totaling approximately $45 million. The company also plans to expand ZORYVE's label, with approvals for additional indications expected by mid-2025. Despite potential delays, Arcutis is confident in securing Medicare Part D coverage for ZORYVE by 2025 and aims to reach financial breakeven by 2026.
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