Review of Arcutis Biotherapeutics: to keep the skin clean

Обзор Arcutis Biotherapeutics: чтобы кожа была чистой

Arcutis Biotherapeutics (NASDAQ: ARQT) — a young biotechnology company from California. Founded in 2016 and is engaged in the development of medical solutions in the form of creams, foams and suspensions for use in dermatology in the treatment of skin diseases. Business went public after IPO 31 January 2020.

Обзор Arcutis Biotherapeutics: чтобы кожа была чистой

Where does the money come from

The company develops drugs for the treatment of psoriasis, Dermatitis, eczema and other skin diseases.

Business model involves the development of innovative drugs, which will most effectively and safely cover the needs of patients in the treatment and relief of symptoms of their diseases. Commercialization of major medical products is focused on a wide world market.

Portfolio of drugs under development. Arcutis Biotherapeutics has several developments:

  1. ARQ-151: flagship drug for the treatment of plaque psoriasis and atopic dermatitis. Planned for sale worldwide.
  2. ARQ-154: foam for the treatment of seborrheic dermatitis and scalp psoriasis. Planned for sale worldwide.
  3. ARQ-252: anti-eczema cream on the skin of the hands and vitiligo disease. Development is at the preclinical stage and is planned for commercialization in the United States., ES, Japan and Canada.
  4. ARQ-255: suspension for the treatment of alopecia. Also in the early stages of development and is planned for commercialization in the US., ES, Japan and Canada.

Обзор Arcutis Biotherapeutics: чтобы кожа была чистой

What's wrong

Pharmaceutical company without revenue. The situation is familiar for the biotechnology sector – however, this does not allow us to forget about the risks of investment. All positive scenarios for business here are associated with the approval of its developments and their commercialization in the wide market.. But not always the competent authorities give the green light to new drugs., and pay taxes, companies have to constantly service debt and spend a lot of money on a research asset.

The Trouble with EBITDA. Profit is still regularly below the zero mark and every year it is moving away from it more and more. Now the company has enough assets, and investors can not be afraid of its bankruptcy in the next couple of years, but without the successful launch of its drugs on the market, this phantom threat to Arcutis Biotherapeutics will become very real..

Doubts about attractiveness. Many investors choose biotech and pin their hopes on the rapid growth of selected pharmaceutical companies in a short period of time.. But if you take as a starting point benchmark in the form of iShares Biotechnology ETF, which includes all U.S. biotech companies with a listing on nasdaq, then it becomes clear, that the prospects for "rockets" and explosive growth are not so obvious. The index recently updated the historical maximum and only slightly corrected down..

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Обзор Arcutis Biotherapeutics: чтобы кожа была чистой

Обзор Arcutis Biotherapeutics: чтобы кожа была чистой

What good

Proximity to the approval of the first drug. 4 October 2021 The company has filed an application with the Food and Drug Administration (FDA) for registration of its non-steroidal drug ARQ-151 for the treatment of plaque psoriasis in adults.

Wide market with a large number of easily accessible customers. In the US alone, the company estimates a potential audience of 6 million people., who are now registered with dermatologists and receive prescription drugs. Many patients use short courses of steroid drugs, which creates the need for subsequent non-steroidal therapy, to meet the needs of which the main developments of Arcutis Biotherapeutics are aimed at.

Assets are increasing, liabilities are decreasing. The 2020 IPO benefited the company and helped improve its financial position: equity has moved from negative to positive and continues to grow year-on-year, and the financial dependence ratio has gone down from a frightening value. 1,6 to modest 0,04.

Обзор Arcutis Biotherapeutics: чтобы кожа была чистой

Обзор Arcutis Biotherapeutics: чтобы кожа была чистой

What is the bottom line

Arcutis Biotherapeutics successfully went public in 2020 and attracted vital investments in its business in time. The company's developments look promising and, if successfully approved, should make life easier for millions of people with skin diseases in the United States and around the world.. In the same time, if all goes wrong and the commercialization of drugs is delayed or delayed, the company's shares can lose a lot in price and bring investors significant losses.

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