ARQT Soars 25.7% on Earnings Surge and FDA Approval: A Game-Changer in Dermatology?

Summary
• Arcutis (ARQT) surges 25.7% intraday, trading at $24.695 after a $19.64 open.
• Q3 revenue jumps 122% to $99.2M, driven by ZORYVE’s pediatric atopic dermatitis FDA approval.
• Net income turns positive at $7.4M, reversing a $41.5M loss YoY.

Today’s explosive move in Arcutis Biotherapeutics (ARQT) has sent shares soaring to a 52-week high of $25.5377, fueled by a blockbuster Q3 earnings report and regulatory milestones. The stock’s 25.7% intraday gain reflects a dramatic shift in market sentiment, with ZORYVE’s pediatric approval and revenue acceleration positioning the biotech for a pivotal inflection point.

Earnings Beat and Pediatric Approval Ignite Momentum
Arcutis’ 25.7% intraday surge stems from a trifecta of catalysts: a 122% YoY revenue jump to $99.2M, a $7.4M net profit (vs. $41.5M loss), and FDA approval for ZORYVE cream 0.05% in pediatric atopic dermatitis. The pediatric expansion alone adds 2M+ potential patients, while sequential revenue growth of 22% underscores ZORYVE’s market penetration. Management’s 2026 guidance of $455–$470M further solidifies confidence in the franchise’s scalability.

Pharma Sector Volatile as J&J Slides
Options Playbook: Leverage ARQT’s Bullish Catalysts
• 200-day average: 15.189 (well below current price)
• RSI: 42.97 (oversold territory)
• MACD: 0.561 (bullish divergence)
• Bollinger Bands: 19.04–21.74 (price at 24.695, above upper band)

ARQT’s technicals scream continuation. The RSI at 42.97 suggests oversold conditions, while the MACD’s 0.561 signal line divergence hints at upward momentum. Bollinger Bands show price at 24.695, far above the 21.74 upper band, indicating a breakout scenario. Two options stand out:

ARQT20251121C22.5
• Type: Call
• Strike: $22.5
• Expiration: 2025-11-21
• IV: 60.67% (moderate)
• Leverage: 8.17%
• Delta: 0.77 (high sensitivity)
• Theta: -0.05 (rapid time decay)
• Turnover: $29,418
• Gamma: 0.077 (responsive to price swings)
• Payoff at 5% up: $1.23/share (24.695 → 25.93).
• Why it works: High delta ensures participation in the current rally, while moderate IV and high turnover ensure liquidity. Theta’s -0.05 means time decay is manageable for a Nov 21 expiration.

ARQT20251121C25
• Type: Call
• Strike: $25
• Expiration: 2025-11-21
• IV: 71.51% (elevated)
• Leverage: 13.47%
• Delta: 0.536 (balanced)
• Theta: -0.055 (aggressive decay)
• Turnover: $185,537
• Gamma: 0.085 (high sensitivity)
• Payoff at 5% up: $0.93/share (24.695 → 25.93).
• Why it works: The 25 strike balances cost and reward. High gamma ensures responsiveness to price swings, while turnover of $185K confirms liquidity. IV at 71.51% reflects market anticipation of volatility.

Action: Aggressive bulls should target ARQT20251121C22.5 for a high-delta play on the breakout. Conservative traders may prefer ARQT20251121C25 for a balanced risk-reward profile. Both contracts benefit from ARQT’s 52W high at 25.5377, with a 5% upside target of 25.93.

Backtest Arcutis Stock Performance
I have completed the entire back-test workflow and prepared an interactive report for you to review.Key implementation notes 1. Trigger definition – “26 % intraday surge” was operationalised as a ≥ 26 % single-day close-to-close return (most conservative definition given intraday data are not universally available for the full sample). 2. Risk control – In the absence of explicit instructions, I adopted a common short-term event-study setting: • Max holding period = 5 trading days • Take-profit = +20 % from entry • Stop-loss = -10 % from entry (Feel free to ask if you would like to change any of these assumptions.)Open the module below to view full statistics (CAGR, hit ratio, average P&L, Max DD, equity curve, trade list, etc.):Let me know if you’d like to adjust the entry rule (e.g., use true intraday high/low data), modify risk parameters, or extend the evaluation period.

ARQT’s 25.7% Rally: A New Era for ZORYVE or a Volatility Play?
Arcutis’ 25.7% surge is a watershed moment, driven by ZORYVE’s pediatric approval and a $99.2M revenue milestone. The stock’s 52W high at 25.5377 and 2026 guidance of $455–$470M suggest this is no short-term spike. However, watch for liquidity strains (trade receivables up 57.5% to $115M) and sector headwinds (J&J down 1.64%). For now, the 22.5–25 call options offer a leveraged path to capitalize on the breakout. Act now: Buy ARQT20251121C22.5 to ride the momentum, or short-term traders can scalp the 25.5377 52W high with tight stops.