Arcutis Biotherapeutics' Capital Efficiency Challenges

Core Insights - Arcutis Biotherapeutics, Inc. is facing challenges in capital efficiency, as indicated by its financial metrics, particularly the comparison between its Return on Invested Capital (ROIC) and its Weighted Average Cost of Capital (WACC) [1][2] Financial Metrics - Arcutis has a ROIC of -14.38% and a WACC of 13.83%, resulting in a ROIC to WACC ratio of -1.04, indicating insufficient returns to cover its cost of capital [2][5] - In comparison, Keros Therapeutics, Inc. has a ROIC of 0.03% and a WACC of 8.14%, leading to a ROIC to WACC ratio of 0.0037 [3] - Crinetics Pharmaceuticals, Inc. and Revolution Medicines, Inc. have negative ROICs of -34.46% and -39.71% respectively, with WACCs of 5.23% and 9.58%, resulting in ROIC to WACC ratios of -6.59 and -4.14, indicating even less efficient capital use compared to Arcutis [3] - Phathom Pharmaceuticals, Inc. has a significantly negative ROIC of -149.31% against a WACC of 8.60%, resulting in a ROIC to WACC ratio of -17.37, highlighting severe inefficiency in capital use [4][5] - Black Diamond Therapeutics, Inc. stands out with a positive ROIC of 2.99% and a WACC of 16.85%, achieving a ROIC to WACC ratio of 0.18, indicating the most efficient capital use among peers [4][5]