By Jorge Mercado Friday, December 22nd, 2023

Westlake Village-based Arcutis Biotherapeutics announced that its main treatment option, Zoryve, received approval from the U.S. Drug and Food Administration for treating a skin condition called seborrheic dermatitis, the company announced on Dec. 15

It is the second FDA approval received by Arcutis’ Zoryve, being approved to be used in individuals nine years of age and older.

Seborrheic dermatitis, a common, chronic and recurrent inflammatory skin disease, affects more than 10 million people in the U.S., the company said in a press release.

With the additional approval, the Zoryve treatment becomes the first topical drug for treating moderate to severe seborrheic dermatitis with a new mechanism of action in over two decades.

“Friday’s approval of Zoryve foam is the latest step in our process of laying groundwork for long term growth for Arcutis,” Frank Watanabe, CEO of Arcutis, said during a company call on Dec. 18.

“Zoryve foam is really very well positioned for success in the seborrheic dermatitis market… In our studies we have shown, I would say, unparalleled efficacy in the treatment of seborrheic dermatitis particularly. Our product being monotherapy and once a day dramatically simplifies the treatment regimen as well.”

The foam version of the company’s Zoryve is a once-daily steroid-free foam for use on all affected areas of the body, including hair-bearing areas, with no limitations on duration of use, according to a company press release.

Arcutis’ treatment proved in its late stage trial that the foam provides rapid disease clearance and significant reduction in itch, one of the most burdensome symptoms of seborrheic dermatitis.

Arcutis intends to make Zoryve foam widely available via key wholesaler and dermatology pharmacy channels as a new treatment option by the end of January 2024. 

“With the Christmas holidays coming up, we didn’t feel like late December, early January was the optimal time to launch a product,” Watanabe said.

But it is clear Arcutis is seeing a lot of positive momentum as it is the company’s second product to receive FDA approval in the last 18 months.

Arcutis first product approval was a cream-based formulation of Zoryve, approved in the U.S. in 2022  as a topical treatment of plaque psoriasis in patients 6 years of age and older.

In the company’s latest earnings, Arcutis achieved total revenues of $38.1 million in the third quarter of 2023, including $8.1 million from its Zoryve cream, a 70% increase compared to the second quarter of 2023.

Through the first nine months of 2023, Arcutis has earned $15.6 million from the sale of the drug.

“With regard to Zoryve cream, we see continued momentum behind the plaque psoriasis launch. In the last couple of weeks, it’s been a very nice upward trend and we continue to have confidence in the growth momentum of that launch,” Watanabe said.

“Given the similarities of the two products in the labels, there’s going to be some positive interactions between those two products.”

In fact, Watanabe said the company expects over the next year a roughly “10-fold expansion in patients using Zoryve in its various indications and formulations, which we believe will drive significant revenue growth.”

According to Reuters, Guggenheim analyst Seamus Fernandez has estimated 2024 revenue of Zoryve foam for seborrheic dermatitis to be about $30.8 million while 2025 revenue could be as high as $94 million. 

“We expect a very high quality coverage for Zoryve foam launch and we anticipate that we will have profitable prescription growth right out of the gates,” Watanabe said.

Aructis shares jumped 20% in after-hours trading on Dec. 15, reaching $2.94 a share. The stock closed at $2.56 on Dec. 19, which is up 23% in the past month.

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