Arcutis Biotherapeutics has topped up its bank balance ahead of a critical year. With 2022 bringing a trio of pivotal clinical trial readouts and potentially a FDA approval, the topical drug delivery specialist has turned to SLR Capital Partners for a $225 million loan facility.
Last year, Arcutis filed for approval of a topical formulation of the PDE4 inhibitor found in AstraZeneca’s oral chronic obstructive pulmonary disease treatment Daliresp. The filing moved Arcutis a step closer to challenging Amgen’s blockbuster Otezla for the plaque psoriasis space. But with Dermavant seeking FDA approval for another topical drug and Bristol Myers Squibb’s oral prospect deucravacitinib following close behind, Arcutis faces a potential scrap for market share if it gets to market.
Arcutis has secured money to fund the fight. The loan facility gave Arcutis $75 million at closing, with a further $125 million becoming available if the FDA approves Arcutis’ roflumilast. Arcutis will gain access to the final $25 million if it hits certain revenue milestones.
“This additional financing further strengthens our balance sheet at an attractive cost of capital and provides us with enhanced financial flexibility as we prepare for the potential launch of roflumilast cream in 2022, while simultaneously advancing our product candidates through multiple late-stage clinical trials,” Arcutis CEO Frank Watanabe said in a statement.
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The loan extends the cash runway of Arcutis, which ended September with $370 million, out into 2024. By then, Arcutis could have a better idea of whether its attempt to build a leading immuno-dermatology business on a topical product development platform has paid off.
This year, Arcutis will learn whether the FDA will approve roflumilast. The PDUFA date is set for July 29. Arcutis is also closing in on readouts from pivotal clinical trials that are testing topical cream and foam formulations of roflumilast in three other dermatological indications: atopic dermatitis, seborrheic dermatitis and scalp psoriasis.