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Investing.com - Morgan Stanley (NYSE:MS) has assumed coverage of Arcutis Biotherapeutics Inc . (NASDAQ:ARQT) with an Overweight rating and a price target of $20.00. According to InvestingPro data, analysts maintain a Strong Buy consensus with targets ranging from $19 to $29, while the stock currently trades at $13.60. The company appears undervalued based on InvestingPro’s Fair Value analysis.
The research firm’s coverage focuses on Zoryve commercial execution and its market share gains within the branded, non-steroidal topical dermatology products segment.
Morgan Stanley estimates peak sales for Zoryve cream in plaque psoriasis (PsO) and atopic dermatitis (AD) of $266 million and $189 million, respectively, while projecting peak sales for Zoryve foam in seborrheic dermatitis and scalp psoriasis of $267 million and $77 million.
The firm noted that prescription share progress within branded, non-steroidal topical dermatology products and management commentary on gross-to-net (GTN) have been encouraging recently, as they look toward additional information on the Zoryve foam launch in plaque psoriasis.
Morgan Stanley also highlighted upcoming Phase 1b data for ARQ-255 in alopecia as potentially shifting investor focus beyond the Zoryve product line.
In other recent news, Arcutis Biotherapeutics Inc. reported first-quarter revenues for its Zoryve product at $63.8 million, surpassing the consensus estimate of $62.2 million. Despite a slight 2% decrease from the previous quarter due to changes in commercial insurance and deductible resets, second-quarter prescriptions are showing improvement. The recent FDA approval of Zoryve foam 0.3% for treating plaque psoriasis on the scalp and body in patients aged 12 and older marks the fifth approval for Zoryve in under three years, expanding treatment options for millions of Americans. H.C. Wainwright reaffirmed its Buy rating and $19 price target on Arcutis stock, citing the strength of Zoryve’s clinical data and its potential for label expansion. Jefferies also maintained a Buy rating and increased their price target to $20, following strong sales figures. The ARRECTOR study, published in JAMA Dermatology, showed significant improvements in psoriasis symptoms with Zoryve foam, with over 66% of participants achieving Scalp-Investigator Global Assessment success. Safety assessments indicated the foam was well-tolerated, with common adverse events such as headache and nausea being mild to moderate. Arcutis is also extending existing contracts with pharmacy benefit managers for seborrheic dermatitis to include psoriasis, anticipating coverage to begin soon.
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