Investors seeking a biotech stock with significant upside potential to add to their portfolio may want to consider Arcutis Biotherapeutics (ARQT +0.11%). The stock price is already up 112% in 2025, as I write, but there could be more to come in the next few years. Here's why.
Arcutis has a bright future
The company's primary product is Zoryve, a non-steroidal topical medication available in cream and foam formulations, which treats a variety of inflammatory skin diseases, including plaque psoriasis, atopic dermatitis (also known as eczema), and seborrheic dermatitis. It contains the active ingredient roflumilast, a PDE4 inhibitor that reduces the skin's inflammatory response.
NASDAQ: ARQT
Key Data Points
Arcutis has already received approval across a range of applications and indications, with the next approval likely to be for Zoryve cream in children aged two to five years old. Arcutis also has Zoryve in phase 2 trials for three other indications/concentrations.
Sales are growing strongly this year, with third-quarter net product revenue of $99.2 million, up 122% compared to the same period last year and 22% compared to the second quarter of 2025. Wall Street expects $358 million in sales for 2025 and then $467 million in 2026.
Image source: Getty Images.
Peak sales
CEO Frank Watanabe believes peak roflumilast/Zoryve sales could be $2.6 billion to $3.5 billion, and considering the current market cap is $3.6 billion. Wall Street analysts believe Arcutis could have net income profit margins of 30%. The stock appears to be a great value if Watanabe is right, and Arcutis can come anywhere near his peak sales projection. Meanwhile, the company has another drug, ARQ-23, which is aimed at reducing inflammatory immune responses and is in early-stage development.
With a relatively low-risk approval process on track and good upside potential from maintaining its sales momentum, Arcutis is an attractive stock for growth-oriented investors.
