Shares of small biotech Arcutis Biotherapeutics ARQT have surged nearly three times in market value in the past year.

The upside has been primarily driven by the positive regulatory updates regarding the company’s efforts to expand the label of its only marketed product, Zoryve.

This drug is currently approved for use in different formulations – as foam and cream – across different indications.

ARQT Stock Performance

In the past year, Arcutis’ stock has skyrocketed over 272% against the industry’s 14.1% fall.

Image Source: Zacks Investment Research

Zoryve – A Key Top-Line Driver for Arcutis

Since its launch, Zoryve has witnessed a strong uptake fueled by the continued growth of unit demand. In the first nine months of 2024, Arcutis recorded product revenues of $97 million, up more than 500% from the year-ago quarter figure. This has also likely contributed to the stock price soaring.

A 0.3% formulation of Zoryve cream is approved for treating plaque psoriasis in patients six years and older and for seborrheic dermatitis in patients nine years and above. In July, the FDA approved a 0.15% formulation of the cream to treat mild to moderate atopic dermatitis (AD) in adult and pediatric patients six years and older.

A 0.15% formulation of Zoryve foam is approved to treat seborrheic dermatitis in individuals aged nine years and older.

Last month, Arcutis submitted an sNDA to the FDA for Zoryve cream 0.05% to treat mild to moderate AD in children two to five years old. An sNDA is already under the agency’s review seeking approval for Zoryve foam 0.3% to treat scalp and body psoriasis, with a final decision expected in May 2025. Potential approvals for these indications will further boost revenues in 2025.

ARQT’s Zacks Rank

Arcutis currently carries a Zacks Rank #3 (Hold).

Arcutis Biotherapeutics, Inc. Price

Arcutis Biotherapeutics, Inc. price | Arcutis Biotherapeutics, Inc. Quote

Key Picks Among Biotech Stocks

Some better-ranked stocks from the sector are Castle Biosciences CSTL, Spero Therapeutics SPRO and CytomX Therapeutics CTMX. While CSTL and SPRO sport a Zacks Rank #1 (Strong Buy) at present, CTMX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bottom-line estimates for Castle Biosciences have improved from a loss of 59 cents per share to earnings of 34 cents for 2024 in the past 60 days. During the same timeframe, loss per share estimates for 2025 have narrowed from $2.15 to $1.84. In the past year, shares of Castle Biosciences have surged 34.9%.

CSTL’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 172.72%.

In the past 60 days, estimates for Spero Therapeutics’ 2024 loss per share have narrowed from $1.59 to $1.29. Estimates for 2025 loss per share have narrowed from $1.54 to 79 cents during the same timeframe. In the past year, Spero’s shares have lost 26.5%.

SPRO’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 94.42%.

In the past 60 days, estimates for CytomX Therapeutics’ 2024 loss per share have narrowed from 29 cents to 5 cents. Estimates for 2025 loss per share have narrowed from 56 cents to 35 cents during the same timeframe. CTMX’s shares have lost 34.9% in the past year.

CytomX’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 115.70%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CytomX Therapeutics, Inc. (CTMX) : Free Stock Analysis Report

Spero Therapeutics, Inc. (SPRO) : Free Stock Analysis Report

Castle Biosciences, Inc. (CSTL) : Free Stock Analysis Report

Arcutis Biotherapeutics, Inc. (ARQT) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research