What happened
Shares of Arcutis Biotherapeutics (ARQT -1.40%) were down 15.7% for the week as of 2:45 p.m. on Thursday, according to data provided by S&P Global Market Intelligence. The healthcare company's stock closed last week at $8.96 a share and fell to as low as $7.47 on Thursday after Arcutis reported trial data regarding a prospective atopic dermatitis therapy. The stock is down more than 49% so far this year.
So what
The company focuses on therapies to treat immune-mediated dermatological diseases and conditions. On Thursday, Arcutis reported interim results from its study of Zoryve (roflumilast) cream for patients six years and older with atopic dermatitis. The therapy's safety profile appeared solid, and the company said that efficacy improved over time in participants who came over from earlier studies of the therapy. Based on the results, the company said it planned to submit a new drug application (NDA) to the Food and Drug Administration (FDA) by late in the third quarter.
While all that appeared positive, the results were apparently not enough to sway investors, while others took the opportunity to sell the stock and cut their losses. The big concern for investors is the company's relatively weak cash position. As of the second quarter, it reported it had cash of $269.6 million, enough based on its burn rate to fund operations for another year.
Now what
It's important to note that roflumilast cream has already been approved to treat plaque psoriasis, and its sales are faring well since its launch in August 2022. In the second quarter, Arcutis reported revenue of $5.2 million, compared to none in the same quarter a year ago. The company lost $1.16 in earnings per share (EPS) compared to an EPS loss of $1.31 in the second quarter of 2022. The stock's move downward seems to be a bit drastic considering the company has one approval for roflumilast and the likelihood to add others, plus three other therapies in its pipeline.
