Arcutis Biotherapeutics raised about $159 million from its IPO, offering 1.6 million more shares than anticipated and pricing at the high end of its planned range.
The Westlake Village, CA-based biotech sold about 9.4 million of its shares at $17 apiece.
Arcutis (NASDAQ: ARQT) shares began trading Friday. The stock price closed at $21.80, up 28 percent.
The company joins the public markets with four product candidates in its pipeline, all topical non-steroidal treatments being developed for seven dermatological indications. Arcutis’s IPO cash will go to advance clinical development of its experimental dermatological products.
In July 2018, the company licensed the worldwide rights to roflumilast as a topical product in people with dermatological conditions from AstraZeneca (NYSE: AZN).
Roflumilast is the active ingredient in the biotech’s lead drug candidate, ARQ-151, a cream being developed for plaque psoriasis and atopic dermatitis. The company says roflumilast is more potent than the active ingredients in two drugs already on the market to treat such conditions, crisaborole (Eucrisa) and apremilast (Otezla).
The company has completed a Phase 2b study of ARQ-151 in plaque psoriasis and started two Phase 3 clinical trials. It also completed a Phase 2 proof-of-concept study of ARQ-151 in atopic dermatitis, and plan to kick off a Phase 2b study in the second half of 2020.
Roflumilast is also the active ingredient in ARQ-154, a foam formulation of ARQ-151 for the treatment of scalp psoriasis and seborrheic dermatitis. The biotech is testing ARQ-154 in a Phase 2 proof-of-concept study in patients with seborrheic dermatitis and a Phase 2b study in patients with scalp psoriasis.
The company’s earlier-stage product candidates, ARQ-252 and ARQ-255, are formulations of an investigational drug the company licensed from Jiangsu Hengrui Medicine in January 2018 to develop topical formulations for the treatment of skin issues. The company aims to start clinical development of ARQ-252 this year in hand eczema and vitiligo, and ARQ-255 in alopecia areata.
The company, which has 29 full-time employees as of Dec. 31, raised more than $160 million prior to its IPO. Following the offering, the company’s largest outside shareholder remained Frazier Life Sciences, which now owns 28.6 percent of its stock. OrbiMed and Bain Capital Life Sciences now own 11.7 percent and 10.5 percent, respectively, according to its prospectus.