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Saturday, Feb 4, 2023

Arcutis Shares Head Up After IPO

Since its debut on the Nasdaq on Jan. 31, shares of Westlake Village-based Arcutis Biotherapeutics have jumped up more than 67 percent through Feb. 26. The late-stage biopharmaceutical company, specializing in topical treatments for psoriasis and atopic dermatitis, priced 9.4 million shares of its common stock at $17 per share. Shares gained more than 28 percent on its first day of trading. The offer closed on Feb. 4 at $25.64. Shares trading under the ticker symbol ARQT closed Feb. 26 at $28.54. “We had a very strong investor base prior to the IPO, especially coming out of that Series C round, and we were able to crack some very high quality investors in the IPO as well,” said Frank Watanabe, chief executive of Arcutis. “We ended up raising 150 percent of what we were planning on raising at a very attractive price and very attractive valuation. I’m delighted by how it went and I don’t think I would change anything.” In October, the company announced it raised $94.5 million in Series C funding. It raised more than $160 million in private investment capital since its founding in 2016. Looking ahead, the company plans to expand its employee base, infrastructure and drug pipeline. “We’re growing pretty rapidly; we’ll end the month with about 40 people. We’re busting at the seams at our current office right now. We’re evaluating options for new office space,” said Watanabe, who added that the plan is to stay in the area. More than a year ago, Arcutis had about 15 employees; Watanabe expects that number to grow by another 15 staff members by the end of this year. “We’re looking at a number of different options in the area,” Watanabe continued. “The majority of our staff lives within 10 minutes of the office and given this is L.A., no one wants to commute a long distance. … “That’s been part of our overall success, in terms of recruiting an outstanding team, is we put the office in a location that is very desirable and we were able to recruit some great talent.” In the next year and a half, the company plans to file its lead drug, a topical cream to treat plaque psoriasis, for FDA approval. Three other topicals for atopic dermatitis, scalp psoriasis and seborrheic dermatitis are currently in Phase 2 clinical trials. The company also has a treatment for hand eczema in its first phase of clinical trials. “This cash gives us the wherewithal to continue to execute on our existing programs so we’re very much focused, heads down, on flawless execution for the remainder of this year,” added Watanabe.

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