Dermatology player Arcutis Biotherapeutics set up shop in 2016 but stayed under the radar until early last year. Now, with a trio of clinical-stage programs and more than $160 million in the bank, the company is looking to hit the street with a $100 million IPO.
The Los Angeles area biotech is taking aim at validated targets so it can bring treatments for skin diseases and disorders to market quickly, the company says. Arcutis is led by CEO Frank Watanabe, an industry vet who’s spent time at Eli Lilly and Amgen as well as smaller biotechs.
The IPO haul will push Arcutis’ lead programs through phase 3. Both are topical drugs that target the inflammation-promoting enzyme phosphodiesterase type 4 (PDE4).
Arcutis will test ARQ-151, a cream, in a phase 3 study in psoriasis and a phase 2b study in atopic dermatitis, or eczema, the company said in a securities filing Monday.
The company will also move ARQ-154, a foam formulation of Daliresp (roflumilast)—marketed in pill form by AstraZeneca for patients with chronic obstructive pulmonary disease (COPD)—into phase 3 studies in seborrheic dermatitis, a skin condition that affects the scalp, as well as scalp psoriasis. AstraZeneca markets roflumilast tablets under the name Daliresp for the treatment of COPD. It will also test a midstage asset, JAK1 inhibitor ARQ-252, in hand eczema.
Although new treatments for diseases like psoriasis and eczema have come to market over the years, the “vast majority” of dermatology patients haven’t benefited from them, said Bhaskar Chaudhuri, Ph.D., a co-founder of Arcutris, at the company’s launch.
"[They] continue to be treated by older therapies that offer inadequate efficacy, that do not target specific disease mediators, or that carry with them substantial safety and tolerability issues,” he said.
Arcutis is here to fill that gap: “Dermatologists and patients badly need innovative topical treatments that directly target immunological mediators of inflammatory diseases with high local skin efficacy, low systemic safety risks, the ability to use them chronically, and a good risk/benefit ratio. Arcutis is focused on addressing these important needs,” Watanabe said at the time.
Arcutis counts the likes of OrbiMed, RA Capital Management and Bain Capital Life Sciences among its backers. It raised its latest private round, a $94.5 million series C, in October, adding Goldman Sachs, Pivotal BioVentures, Omega Funds, funds managed by BlackRock, Vivo Capital and HBM Healthcare Investments to the fold. That round was earmarked for the phase 3 program of ARQ-151. Arcutis expects to report top-line data for that study in plaque psoriasis in the first half of 2021, the company said at the time.