Arcturus Therapeutics Q2 2026 Earnings Report

Arcturus Therapeutics EPS Results

• Actual EPS: -$0.84
• Consensus EPS: -$1.00
• Beat/Miss: Beat by +$0.16
• One Year Ago EPS: N/A

Arcturus Therapeutics Revenue Results

• Actual Revenue: $2.96 million
• Expected Revenue: $3.11 million
• Beat/Miss: Missed by -$149.00 thousand
• YoY Revenue Growth: N/A

Arcturus Therapeutics Announcement Details

• Quarter: Q2 2026
• Date: 8/6/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 4:30PM ET

Arcturus Therapeutics (NASDAQ:ARCT) is a clinical-stage biotechnology company dedicated to developing messenger RNA (mRNA) medicines that address a range of diseases. The company leverages its proprietary STARR® mRNA platform to enable precise control over mRNA expression, supported by its lipid nanoparticle delivery technology, LUNAR®. Arcturus’s approach is designed to address both therapeutic and prophylactic applications, with an emphasis on vaccines and treatments for rare genetic and infectious diseases.

The company’s pipeline includes ARCT-810, an mRNA therapeutic candidate for phenylketonuria (PKU), and ARCT-021 (also known as LUNAR-COV19), a COVID-19 vaccine candidate developed in collaboration with Duke-NUS Medical School in Singapore. Additional preclinical programs are directed toward addressing other metabolic disorders and infectious diseases. Arcturus’s research and development efforts focus on leveraging mRNA’s capacity for rapid design and production, aiming to reduce development timelines compared with traditional biologics.

Headquartered in San Diego, California, Arcturus maintains research and manufacturing facilities both in the United States and in Singapore, reflecting its commitment to global collaboration and supply chain resilience. The Singapore facility supports the company’s vaccine development programs and provides clinical-scale manufacturing capabilities to meet regulatory requirements in multiple jurisdictions.

Since going public in 2018, Arcturus has been led by Chief Executive Officer Joseph E. Payne, who brings experience from several biotechnology and pharmaceutical roles. Under his leadership, the company has forged partnerships with academic institutions and contract manufacturing organizations to advance its clinical programs. Arcturus continues to explore new applications of its mRNA platform through collaborations and licensing agreements aimed at expanding its pipeline and demonstrating the versatility of mRNA-based therapeutics.

Arcturus Therapeutics Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: ARCT-810 completed Phase II enrollment and dosing in OTC deficiency, with U.S. and European data expected in Q3 2026 alongside FDA-requested supplementary data and an update on the regulatory path for adult and pediatric development.
• Positive Sentiment: ARCT-032’s Phase II cystic fibrosis study remains on schedule, supported by expanded enrollment in Israel and Turkey; Arcturus expects to decide whether to advance to Phase III in Q4 2026, which would trigger substantial manufacturing and development support from Thermo Fisher.
• Positive Sentiment: Arcturus regained global rights to KOSTAIVE and its broader self-amplifying mRNA vaccine portfolio after ending the CSL Seqirus collaboration. The settlement included a $12 million cash payment and release from approximately $16 million in liabilities, while returning strategic control that could enable commercialization and new partnerships.
• Negative Sentiment: Revenue fell sharply to $3 million in Q2 2026 from $28.3 million a year earlier as the CSL collaboration wound down, while cash declined to $191.5 million from $230.8 million at year-end 2025.
• Neutral Sentiment: Management said the company has more than two and a half years of cash runway through year-end 2028, but it will need to balance rare-disease clinical spending with efforts to commercialize or partner the returned vaccine assets.

Presentation

[Neda Safarzadeh, VP, Head of Investor Relations, Public Relations, and Marketing at Arcturus Therapeutics]

Thank you, operator. Good afternoon, welcome to Arcturus Therapeutics quarterly financial update and pipeline progress call. Today's call will be led by Joe Payne, our President and CEO, Dr. Alan Cohen, our Chief Medical Officer, Dennis Mulroy, our Chief Financial Officer. Dr. Pad Chivukula, our CSO and COO, will join them for the Q&A session. Before we begin, I would like to remind everyone that the statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by this statement.

[Neda Safarzadeh, VP, Head of Investor Relations, Public Relations, and Marketing at Arcturus Therapeutics]

Please see the forward-looking statement disclaimer on the company's press release issued earlier today, as well as the Risk Factors section in our most recent Form 10-K, in subsequent filings with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made. Arcturus specifically disclaims any obligation to update such statements. With that, I will now turn the call over to Joe.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Thank you, Neda, it's good to be with you again, everybody. The second quarter of 2026 was marked by continued execution across our rare disease pipeline and important strategic developments for Arcturus' vaccine franchise. Today, I'll provide updates on our rare disease programs, ARCT-032 and ARCT-810, summarize today's good news regarding our vaccine enterprise. I will then turn the call over to Alan for additional clinical updates and to Dennis to review our financial results. Starting with ARCT-032, our inhaled mRNA therapeutic candidate for CF. During the quarter, our phase II study continued to advance on schedule with active screening and enrollment ongoing across sites in the U.S., Israel, and Turkey. These international sites are important for our recruitment strategy, given the higher prevalence of individuals living with Class I CF in Israel and Turkey.

[Joe Payne, President and CEO at Arcturus Therapeutics]

As a reminder, Cohort Four is evaluating 10 mg of ARCT-032 administered daily by inhalation over a 12-week treatment period. The study is monitoring for safety and evidence of early clinical benefit, including pulmonary function measures such as % predicted FEV1 and lung clearance index, or LCI. In addition, quality-of-life measures and high-resolution CT imaging data are being collected. The decision to advance our CF program into phase III is expected in the fourth quarter, or Q4 2026. If Arcturus decides to proceed into a phase III trial, this decision triggers additional and very meaningful contributions from Thermo Fisher, including manufacturing support, clinical research, and related services. Turning to ARCT-810. This is our mRNA therapeutic candidate for ornithine transcarbamylase deficiency, or OTC deficiency. We are pleased to update the market today that we've completed enrollment in our ongoing phase II study, all enrolled subjects have completed study drug dosing.

[Joe Payne, President and CEO at Arcturus Therapeutics]

This represents an important operational milestone for our OTC program. With the dosing phase of the study completed, our team is now evaluating the phase II clinical data along with the supplementary data requested by the FDA in the Type C meeting earlier this year. These data will inform upcoming regulatory discussions across both adult and pediatric development. We expect to communicate the phase II clinical study data later this year in Q3 2026. Concurrent with the data readout, we will provide additional details regarding the regulatory path forward for our OTC deficiency program. On to our vaccine division. Today, we announced the conclusion of our saRNA collaboration with CSL Seqirus. On behalf of Arcturus, I wanted to express sincere gratitude to the outstanding team at CSL.

[Joe Payne, President and CEO at Arcturus Therapeutics]

They've been a great partner to help shepherd this first-in-class, next-generation saRNA technology to where it is today, a validated platform with approvals in over 30 countries. We are pleased to regain global rights to our commercial COVID vaccine product, KOSTAIVE, and to our self-amplifying mRNA platform. Having strategic control of this validated vaccine platform is an exciting opportunity for our company. The Arcturus saRNA platform is validated. It's proven to be efficacious with an immune response that is durable and superior in comparative studies. It's been reviewed by several regulatory agencies to be safe and well-tolerated. The manufacturing process is commercial-ready, scalable, fast, with lower cogs attributed to a significantly lower dose level.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Several global regulatory agencies have reviewed and approved Arcturus' saRNA vaccine platform as represented by KOSTAIVE, which has been approved for licensure in Europe, Japan, and more recently, the United Kingdom, with the regulatory path forward into the United States also clearly understood. The Arcturus vaccine platform is pandemic-ready. The U.S. government is keenly aware of this next-generation saRNA platform. It is likely not a matter of if, but rather a matter of when this platform will be called upon to address future epidemics of infectious disease. Under the agreement, Arcturus regained global rights to KOSTAIVE and the broader infectious disease vaccine portfolio, including seasonal influenza, pandemic influenza, RSV, and EBV vaccine programs. The agreement also resolves the arbitration related to a European regulatory approval milestone payment.

[Joe Payne, President and CEO at Arcturus Therapeutics]

CSL Seqirus wired a one-time cash payment of $12 million to Arcturus, and Arcturus is released from liabilities, including those associated with an R&D credit with an aggregate value of approximately $16 million. With strategic control of the portfolio returned to Arcturus, we are evaluating opportunities to maximize its future value, including further commercialization and partnering pathways. With that, I'll turn the call over to Alan for a more detailed update on our clinical programs.

[Alan Cohen, CMO at Arcturus Therapeutics]

Thank you, Joe, and good afternoon, everyone. From a clinical development perspective, the second quarter represented meaningful progress for both ARCT-032 and ARCT-810. Beginning with our CF program, ARCT-032, our ongoing phase II study continues to enroll people living with cystic fibrosis who have Class I mutations. Enrollment remains on schedule, with active screening and enrollment underway across sites in the U.S., Israel, and Turkey. The study is designed to evaluate daily inhaled dosing of 10 mg over a 12-week treatment period. It continues to assess safety as well as evidence of early clinical benefit, including pulmonary function measures such as changes in % predicted FEV1 and lung clearance index, quality of life measures, and high-resolution CT scan imaging. One important development this quarter was the expansion of screening and enrollment activities beyond the U.S. into the Eastern Mediterranean region.

[Alan Cohen, CMO at Arcturus Therapeutics]

Israel and Turkey are geographies with a high prevalence of individuals with CF Class I or null mutations, which will meaningfully support our recruitment efforts and efficiencies for this study. Unlike the U.S., where up to 10% of people with CF are ineligible for modulators due to null mutations, up to 30%-40% of people with CF have null mutations and are eligible for consideration of enrollment in our ARCT-032 study from Turkey and Israel, respectively. Clinical execution remains on schedule, and we are laser-focused on generating the data needed to support the phase III decision expected in Q4 2026. Turning to our OTC deficiency program, ARCT-810. During the quarter, we completed enrollment of the ongoing phase II study, and all enrolled subjects completed studied drug dosing.

[Alan Cohen, CMO at Arcturus Therapeutics]

This is an important operational milestone and allows us to now focus on evaluating the supplementary data generated from the enrolled study population. We remain grateful for the continuing support, ongoing encouragement, and strong engagement on behalf of our ARCT-810 OTC deficiency study by the patients, their families, and the rare disease care community. Thank you for all your collective help and interest in our development program. Our current efforts are focused on data review, preparation for upcoming regulatory interactions, and planning for an end-of-phase II meeting regarding the path forward across both adult and pediatric development. We expect to communicate both the data and regulatory plan for OTC deficiency program in Q3 2026. Across both our rare disease programs, our focus remains on disciplined clinical execution, high-quality data generation, and productive regulatory engagement to support efficient development decisions. With that, I will turn the call over to Dennis.

[Dennis Mulroy, CFO at Arcturus Therapeutics]

Thanks, Alan, and good afternoon, everyone. Our press release issued earlier today includes financial statements for the three and six months ended June 30, 2026 and provides a summary and analysis of year-over-year performance. Please also reference our Form 10-Q for more details on our financial performance. Cash and cash equivalents were $191.5 million as of June 30, 2026, and $230.8 million on December 31, 2025, for a decrease of $39.3 million over the H1 of 2026. Revenue was $3 million and $5 million for the three and six months ended June 30, 2026, compared to $28.3 million and $57.7 million in the comparable periods last year. Lower revenue was recognized under the CSL collaboration as Arcturus progressed towards termination of the agreement and regaining rights to KOSTAIVE and its broader infectious disease vaccine portfolio.

[Dennis Mulroy, CFO at Arcturus Therapeutics]

Research and development expenses were $17.5 million and $39 million for the three and six months ended June 30, 2026, compared with $29.6 million and $64.5 million for the corresponding periods in 2025. The decreases were primarily driven by lower research and development spending, including reduced salaries, wages, benefits, and facilities cost as the company continues to advance its CF and OTC programs while maintaining its disciplined approach to capital allocation.

[Dennis Mulroy, CFO at Arcturus Therapeutics]

General and administrative expenses were $11 million and $20.5 million for the three and six months ended June 30, 2026, compared with $10.3 million and $21.7 million in the comparable periods last year. Overall, general and administrative expenses remained relatively consistent across periods, with a slight quarter-to-quarter increase due to legal fees, partially offset by reduced spending in salaries, wages, benefits, and facilities costs. We remain focused on disciplined execution and capital allocation as we advance our rare disease programs. The CSL Seqirus termination and settlement agreement strengthens our financial position as we regain control of those assets, and the Thermo Fisher collaboration funds and supports the execution of late-stage development of our CF program.

[Dennis Mulroy, CFO at Arcturus Therapeutics]

We continue to maintain a strong balance sheet and cash runway of over two and a half years through year-end 2028, allowing the company to reach important clinical and regulatory milestones for its rare disease pipeline. With that, I'll pass the call back to Joe.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Thank you, Dennis. Arcturus continues to execute across our rare disease therapeutics portfolio while strengthening the long-term strategic position of the company. With enrollment progressing in our phase II ARCT-032 study and completion of enrollment and dosing of ARCT-810 and the return of strategic control of our vaccine portfolio, we remain focused on advancing important clinical, regulatory, and corporate milestones through the remainder of 2026. With that, let's turn the call over to the operator for questions.

[Operator]

Thank you. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. We'll take our first question from Lili Nsongo with Leerink Partners. Please go ahead. Your line is now open.

[Lili Nsongo, Analyst at Leerink Partners]

Hi. Good afternoon. Thank you for the update on the quarter. Maybe just thinking about the OTC program, could you maybe provide us a little bit of detail and an overview of the data we should expect at the upcoming readouts later this quarter? Would it be solely the U.S. pediatric, or sorry, U.S. adolescent and adult patient, or will we also see a longer-term update from the European patients?

[Joe Payne, President and CEO at Arcturus Therapeutics]

Hi, Lili, thanks for the question. Yeah. With dosing completed, you're right, we are preparing for this data disclosure later this quarter. We're evaluating the phase II clinical data, which includes the U.S. and European dataset. The new data, of course, will be the most recent patients that have added and completed dosing here in the United States. It will also include supplementary data that was requested by the FDA in the Type C meeting earlier this year. We just intend to share a fulsome update on the OTC program that includes not only the phase II data, but the requested Type C data and providing additional detail with respect to the regulatory path forward. I'll leave it at that.

[Lili Nsongo, Analyst at Leerink Partners]

Great. Thank you. Maybe as a follow-up, still staying with OTC, do you view diet liberalization as the bar for success, or should we be looking maybe at the biomarker level?

[Joe Payne, President and CEO at Arcturus Therapeutics]

With respect to biomarker levels? Yes. Well, I know the biomarkers being evaluated and measured are ammonia and glutamine and, of course, urea itself. Maybe, Alan, you can comment or address the rest of the question.

[Alan Cohen, CMO at Arcturus Therapeutics]

Yeah. Great question. I think that the two elements that are going to be most important to are not just the biomarkers. They're certainly important because it speaks to mode of action, but also how these patients feel as well as function. It'll be the totality of the data that we've been able to generate up to this point, not only relating to safety and tolerability, but also biomarkers as Joe just mentioned, most notably ammonia levels and glutamine, but also the additional quality of life and functional measures that we're collecting. It really will be the totality of all the data is what the agency is interested in wanting to see, and which is obviously important to move our program forward.

[Lili Nsongo, Analyst at Leerink Partners]

Thank you.

[Operator]

Thank you. We'll take our next question from Pete Stavropoulos with Cantor Fitzgerald. Please go ahead. Your line is now open.

[Pete Stavropoulos, Analyst at Cantor Fitzgerald]

Thank you very much. Hi, Joe and team. Congrats on the progress. I have a couple questions on the CF program. First one is, how has the cadence of enrollment been? Will you wait for all the patients to complete the study before data disclosure, or is there a possibility of an interim look? Are there plans to adjust the protocol to allow dosing past 12 weeks or three months?

[Joe Payne, President and CEO at Arcturus Therapeutics]

Okay. There's a few questions there. Thanks, Pete, for joining the call. With respect to the cadence of enrollment, we touched on that we've expanded our footprint to ex-U.S. sites in Israel and Turkey that are assisting with that challenge. With all rare disease programs, it's all about the cadence of enrollment. We feel confident. In fact, we've expressed considerable or a high level of confidence with respect to the cadence of enrollment rate now that Israel and Turkey are participating in this trial. With respect to the remainder of the questions, I can turn the time over to Alan.

[Alan Cohen, CMO at Arcturus Therapeutics]

Sure. I think, Pete, the essence of what you're asking is when do we know that we can draw a line and total up the cumulative nature of the data we've generated, and that we're satisfied that it's sufficient to make a decision? I think the data's going to drive that. Certainly, we believe that at the rate we're currently enrolling and the quality and nature of the data that we're generating, particularly now that we've added Israel and Turkey to the mix, which have such a larger preponderance of the patients we're most interested in identifying and enrolling. We believe that the time should be sufficient through balance of Q4 to be able to accumulate the necessary data to make an informed decision on what's best for the program and for these patients moving forward.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Just to add to that, if you notice, our new guidance is focusing on the decision to proceed, rather than a data share or completion of enrollment. This is simply because the next meaningful event for this program is that decision, which is guided for Q4. The decision to proceed triggers significant and meaningful contributions from Thermo in our recent deal that we announced. That's what we're focused on, is getting sufficient data for that decision to proceed in Q4.

[Pete Stavropoulos, Analyst at Cantor Fitzgerald]

All right. Thank you for that. I do have one question on LCI. It's being used for CF, the phase II study. Can you just talk a little bit about this test, sort of how sensitive is it, and how variable is one close reading to another?

[Joe Payne, President and CEO at Arcturus Therapeutics]

Yeah. LCI is definitely a different lung function measurement. Alan, maybe you can comment on some key differences there with sensitivity, et cetera.

[Alan Cohen, CMO at Arcturus Therapeutics]

Yeah, sure. I think the biggest unknown and the biggest challenge for using lung clearance index in adults with CF has been the lack, as you know, of normative data among the population that's of most interest to us. Fortunately, as you're probably aware, the CF Foundation's funding the REACH study. We're going to get an update on that at the upcoming cystic fibrosis meeting in Atlanta in October. The Foundation has been kind enough to offer to make that data available, especially for companies like ours and others that are working in this space, so that we can have access to that data and use it as a natural control. The short answer is that the sicker the patients are performing this test, the more challenging it is.

[Alan Cohen, CMO at Arcturus Therapeutics]

We're focusing in on a mix of patients within a range that we believe we should be able to get highly reproducible, meaningful data that's not only reproducible, but also is giving us a much more sensitive measure of changes in the smallest airways, where the earliest changes of lung disease occur in this population. It's adding additional nuanced information that spirometry and pulmonary function testing traditionally doesn't give us. We think it's actually better for the patient population, it's better for our understanding of the disease itself, and we think it might lead to another pathway forward for showing an ability to stabilize and improve lung function in this very vulnerable patient population.

[Pete Stavropoulos, Analyst at Cantor Fitzgerald]

All right. Thank you very much for that color, and congrats once again on the quarter.

[Alan Cohen, CMO at Arcturus Therapeutics]

Thanks.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Thanks.

[Pete Stavropoulos, Analyst at Cantor Fitzgerald]

Thanks.

[Operator]

Thank you. We'll take our next question from Yanan Zhu with Wells Fargo. Please go ahead, your line is now open.

[Quan On, Analyst at Wells Fargo]

Hi. Thanks for taking our question. This is Quan On for Yanan, and congrats on the quarter. On CF program, can you share by 4Q, what kind of data set do you expect to have collect to help you make a decision? Given that this is an open label study, are you seeing the data in real time? Any safety update you can give us? Thank you.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Yeah. The data we're collecting is FEV and LCI data for pulmonary lung function data, and that's supplemented with high-res CT scan data and validated quality-of-life measures and surveys. That's going to be the collective data that's going to be under consideration when Arcturus makes its decision to proceed. With respect to the open label nature of the study, absolutely. It's an open label study, so Arcturus and the team will have access to data on an ongoing basis.

[Quan On, Analyst at Wells Fargo]

Any safety signal you have observed or any comments on that? Thank you.

[Joe Payne, President and CEO at Arcturus Therapeutics]

With respect to CF safety, ARCT-032 is the name of our CF candidate, this candidate or ARCT-032 has been in over 50 participants to date, ranging from all the way up to 15 mg for 28 days of daily dosing. We've done so without steroid treatment before, during, or after. This whole time being permitted by regulatory agencies to self-administer in their home, not necessarily required for these people to do so in a clinic. We're presently active in a 12-week study. This is, I guess, a longer way of saying that we have a high level of confidence in our safety and tolerability of this platform, given the dose levels and the duration we've collected so far, and we hope that that continues. It is a key differentiator for our program. Thank you for the question.

[Joe Payne, President and CEO at Arcturus Therapeutics]

It's been decades of failures of inhaled therapeutics, and it's always been attributed to failures in toxicology and tolerability. Humans just don't like to inhale foreign substances, so we've overcome those challenges over the last decade of R&D.

[Quan On, Analyst at Wells Fargo]

Got it. A quick question on OTCD. Has the EOP2 meeting with FDA been scheduled, and what are the potential outcomes from the meeting? Thank you.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Yeah. We've already highlighted and guided that we're going to have a fulsome data and regulatory path update later this quarter, and that'll be the opportunity to provide some more details about that EOP2 meeting. That will be the appropriate time to do so.

[Quan On, Analyst at Wells Fargo]

Got it. Thank you for all the colors.

[Alan Cohen, CMO at Arcturus Therapeutics]

Thanks for your questions.

[Operator]

Thank you. We'll take our next question from Yigal Nochomovitz with Citigroup. Please go ahead. Your line is now open.

[Analyst at Citigroup]

Hi, this is Juan came on for Yigal. Thanks so much for taking our questions. Just curious, I'd love to hear a little bit more about the collab with Thermo. Can you tell us a little bit about how that came about, and have they seen any interim phase II data or 15 mg data ahead of you guys making that deal?

[Joe Payne, President and CEO at Arcturus Therapeutics]

Yeah, it's a great question. There was significant interest from multiple large manufacturers in the CF product because it's a very unique product. Unlike our vaccine, our KOSTAIVE vaccine that we just regained rights and control, that vaccine is dosed at 5 micrograms once a year. It's a very infrequent, long-duration acting product. Unlike that product, the CF product is 10,000 micrograms daily. Because it's a significant commercial manufacturing deal, you can understand the level of competitive interest from large manufacturers. As they came together, we put forward a deal that made sense to all parties involved, and Thermo Fisher ultimately became our exclusive partner for commercial manufacturing of the CF product through that path. Did I address your question?

[Analyst at Citigroup]

Yeah. I was just wondering, did they happen to see the interim phase II data?

[Joe Payne, President and CEO at Arcturus Therapeutics]

Yeah, absolutely.

[Analyst at Citigroup]

Okay.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Just like in all major deals, this one was a significant one for us. They went under CDA. They have access to an e-room and all the clinical data. Understanding it's an open-label study. Yes, they had access to all the data.

[Analyst at Citigroup]

Got it. Thanks very much.

[Operator]

Thank you. We'll take our next question from Myles Minter with William Blair. Please go ahead. Your line is now open.

[Analyst at William Blair]

Hi, this is Jake on for Myles. Thanks so much for taking our questions. One on OTC. Just wanted to get a sense of the baseline hyperammonemic crisis rate in the phase II study and how that might compare to other OTC trials to date. One on KOSTAIVE. You mentioned that the regulatory path for KOSTAIVE's approval in the U.S. is clear. Just wanted to maybe get a little bit more color on what that path is. Thanks.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Sure. Do you want to take that question, Alan?

[Alan Cohen, CMO at Arcturus Therapeutics]

Yeah. For our current ongoing OTC program, we're giving five doses over approximately 12-week period of time. The anticipated percent and burden of exacerbations or hyperammonemic episodes occurring during that window and the nature of our inclusion and exclusion criteria are really not looking to capture patients that are unstable enough that we would likely be capturing those events or looking to those events to be helpful and informative during the course of just a simple five-dose regimen. What we're really our goal and objective here was to bring in patients who are on a stable protein intake, who are stable medically and functionally, but who still are burdened with OTC deficiency, and are adults.

[Alan Cohen, CMO at Arcturus Therapeutics]

The goal there being that we want to see if we can have an impact on their baseline periods of ureagenesis as related to measurements of blood ammonia and glutamine levels, as well as other trace minerals. The short answer is that we aren't actively looking for patients who are labile enough for which to capture those events. Obviously, in longer-term studies where we would be treating patients more chronically, and in particular in a pediatric population where the burden is much more problematic and the reason for our programs to want to direct towards newborns and young children who are much more vulnerable and sicker, that would clearly be a greater level of interest and focus for subsequent studies that we hope to be gaining into in the near future. Does that address your question?

[Analyst at William Blair]

Yeah. Then, just wanted to ask about KOSTAIVE and the potential development in the U.S. that you referred to.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Yes. We had very regular interactions with the U.S. FDA for several years since the inception of the pandemic. Under the new administration here in the U.S., there was an abrupt change in view of vaccine policy. Even under that new administration, we received very clear guidance as to what is needed for us to get this approved in the U.S. What I'm communicating is that we have a very clear path of what's required, what's remaining to do to get this approved in the U.S. Thanks, Jake.

[Operator]

Thank you. We'll take our next question from Whitney Ijem with Canaccord Genuity. Please go ahead. Your line is now open.

[Whitney Ijem, Analyst at Canaccord Genuity]

Hey, guys. Just wanted to quickly, on CF, follow up. I appreciate we're not going to necessarily see a data update in the fourth quarter, as you announced whether or not you're moving forward into a phase III, can you help us understand how you're thinking about more quantitatively which endpoints are of importance and what you're looking for? I guess, is there a scenario where maybe you're not seeing an FEV benefit, but you might still move forward based on something you're seeing on LCI, CT, et cetera? Thanks.

[Joe Payne, President and CEO at Arcturus Therapeutics]

I'll begin and then provide Alan some time here, too. Just to refresh, we are collecting FEV, LCI data, high-res CT scan data, and quality of life measures. What is very unique in this process is, as we've engaged the FDA, we have come to realize that our technology and our product and the patients that we're pursuing are very, very unique. We're the first to do this. In terms of what thresholds of success need to be achieved is going to be set and established by us in this process, not by historical or other precedences in the field. What we've heard consistently is anything positive with respect to the data that we're collecting would be very well received and a significant win and exciting for the Class I CF community.

[Joe Payne, President and CEO at Arcturus Therapeutics]

There will be increased emphasis on lung function measurements, of course, like FEV1 and LCI. Alan, anything to add?

[Alan Cohen, CMO at Arcturus Therapeutics]

Yeah, I think Joe got the essence of what I'm thinking and wanted to get across. Just to reframe, remember that this population of Class I mutation patients, particularly those who are adolescent and young adults, are on average experiencing anywhere from 1% to over 2% drops in their percent predicted FEV1 just as a course of surviving annually. Just being around and doing a good job of taking care of themselves, the burden of this disease is remarkable, and it's consistently diminishing their baseline lung function day after day, year after year. The goal here is to see if we can stabilize and improve these patients, and it's probably going to be a measure of not just a single spirometric measure or a single change in LCI. Stabilizing this would clearly be a big step forward for these patients. Also, how they feel and function.

[Alan Cohen, CMO at Arcturus Therapeutics]

Additionally, their quality-of-life measures, how they're able to maintain themselves, and their overall health and wellbeing will all be in the mix of the elements that we're going to be looking at to help inform us on next steps for the program.

[Whitney Ijem, Analyst at Canaccord Genuity]

Got it. That's helpful. Just one follow clarification on KOSTAIVE in Japan, given the change in the CSL relationship, how should we think about impact there? Sorry if I missed it. Thanks.

[Joe Payne, President and CEO at Arcturus Therapeutics]

It's a great question. We were splitting the profit share three ways, now that's no longer. It'll be split two ways. Those conversations are very active right now with Meiji. We have a great relationship with them in Japan. We are definitely preparing for the upcoming fall season. We're supporting them with manufacturing and shipping doses so that they can be prepared to distribute those in the upcoming season. It's a very active collaboration, but the profit share will now be split two ways. In terms of the details there, that's in an active conversation, so there'll be an appropriate time to provide more granularity there.

[Whitney Ijem, Analyst at Canaccord Genuity]

Great. Thank you.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Yeah.

[Operator]

Thank you. We'll take our next-

[Joe Payne, President and CEO at Arcturus Therapeutics]

Thanks.

[Operator]

Question from Adam Dolwood with B. Riley Securities. Please go ahead. Your line is now open.

[Adam Dolwood, Analyst at B. Riley Securities]

Hey, guys, this is Adam on for Mike. Thanks for taking the question. Just curious whether you've given any thought to the fact that since Vertex Pharmaceuticals required, I think it was a four-week bronchodilator and clinic-supervised dosing while ARCT-032 is dosed at home, how are you thinking about that tolerability gap as a durable differentiator, and what do you think could apply for the phase III? Thanks.

[Joe Payne, President and CEO at Arcturus Therapeutics]

No, I appreciate the question. It gives us the opportunity to provide more detail as to why we're observing a more attractive safety and tolerability profile with this platform. The first point of key differentiation is the lipid nanoparticle is different. It's chemically different. Instead of a carbon-based core, it's a thiocarbamate core, which means there's sulfur, oxygen, nitrogen. These heteroatoms provide handles for the body to degrade. It's also chemically different how it interacts with the biology in the body, too. We have a different lipid nanoparticle that's biodegradable, non-accumulating, and that is very important with respect to safety and tolerability. The second point of differentiation is that our manufacturing process to purify the mRNA is different.

[Joe Payne, President and CEO at Arcturus Therapeutics]

We have trade secret and know-how and IP around the process to purify the mRNA molecule itself, and the impurities coming out of the output of this manufacturing process can be very problematic with respect to undesired inflammatory and immune responses. Controlling those is a very important differentiator that uses our technology. The third point of differentiation is our nebulizer. This aerosolization of these particles was proven to be very challenging in the early days of this program. We spent a few years, and we had support from the Cystic Fibrosis Foundation to optimize the nebulizer so that it retains the integrity of the particle through the aerosolization process. You don't want these particles aggregating and forming macroparticles during the inhalation process. We've optimized against that.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Whether it's the lipid nanoparticle or a more pure mRNA or an optimized nebulizer, if you take all that three together, that contributes to the better safety and tolerability profile.

[Adam Dolwood, Analyst at B. Riley Securities]

Okay, great. Yeah, very helpful. Thanks a lot.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Thank you.

[Operator]

Thank you. We'll take our next question from Adam Walsh with ROTH Capital Partners. Please go ahead. Your line is now open.

[Adam Walsh, Analyst at ROTH Capital Partners]

Hi. Thanks for taking my questions. You announced cohort four began dosing in March 2026, and I think by my math, we're about five months out. Joe, you've spoken to the safety and tolerability advantages with 032, and I'm just curious, is kind of the lack of any disclosure on tolerability at this point something that we can read into and continue following or are we getting over our skis with that?

[Joe Payne, President and CEO at Arcturus Therapeutics]

I appreciate the question. It does seem logical. I think it's a safe statement that if there is anything serious or severe that's occurred in our trial or material, we would have to disclose that. With respect to commenting on details with respect to safety and tolerability, we will wait for the appropriate time to do so like we've done with the previous cohorts. Alan, anything to add there?

[Alan Cohen, CMO at Arcturus Therapeutics]

I think we're trying to be thoughtful in terms of our sharing of information and rather than parse through it because we have the position to have the data presenting itself in an open label manner throughout, it's really going to be the cumulative experience with as many exposures as possible, ideally through three months and upwards to 20 patients that's really going to be the determinant as to next steps. We'd rather wait until we have a larger body of data over more patients over a longer period of time to make a point of sharing what we believe is the totality of our experience thus far beyond 28 days, and we look forward to sharing that in the months ahead.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Yeah.

[Adam Walsh, Analyst at ROTH Capital Partners]

That's really helpful color. Thank you.

[Operator]

Thank you. We'll take our next question from Jenny Kim with BTIG. Please go ahead. Your line is now open.

[Jenny Kim, Analyst at BTIG]

Good afternoon. Thank you for taking my question. This is Jenny on for Thomas Shrader. With the global vaccine rights return to you're effectively running a standalone vaccine portfolio on top of two active rare disease programs. How are you thinking about the cost to maintain and monetize KOSTAIVE and the broader infectious disease portfolio, and does retaining these rights change your R&D expense trajectory meaningfully?

[Joe Payne, President and CEO at Arcturus Therapeutics]

Let me restate your question to make sure I get the crux of it. Is it good news that we've regained rights and control? Absolutely. I think your question is like, well, how are you going to pay for all of the exciting applications of this platform? There's two efforts that we're going to be focusing on now that we have control. Number one is commercialization. We'd like to continue to mature the product that's already partnered with Meiji as a distributor in Japan and support them in what we can in Japan. Now we can more proactively with the focused commercial efforts, even as a small company, Arcturus, to see if we can explore opportunities in Europe, especially with the United Kingdom. That's an exciting potential opportunity there.

[Joe Payne, President and CEO at Arcturus Therapeutics]

There's commercial activities that will expand, and if we're successful in any way there, those will pay for the other platform activities. The other potentially more obvious one is we now having control of this validated platform from a business development perspective, that opens pathways to partnership and what that looks like and what opportunities there can be. There's a variety of opportunities. We've talked about KOSTAIVE, but also the vaccine portfolio includes really high-value targets like seasonal flu and pandemic flu. EBV is an interesting target. HMPV, we have RSV. There's a long list of antibacterial vaccine opportunities that can be investigated with this platform, and the list goes on and on. We'll be spending considerable effort in looking at partnering pathways now that we've regained control of the platform.

[Jenny Kim, Analyst at BTIG]

Great. Thank you.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Thank you.

[Operator]

Thank you. We'll take our next question from Yale Jen with Laidlaw & Company. Please go ahead. Your line is now open.

[Yale Jen, Analyst at Laidlaw & Company]

Thanks for taking the questions and congrats on all the progress. I do want to continue the previous question in terms of this vaccine portfolio. Just curious, besides KOSTAIVE, what the clinical stage of other vaccine has been, both of flu as well as RSV and EBV? I have a follow-up.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Most of the data that we've collected has been undisclosed. Many of it has been preclinical. We have completed a phase I trial for seasonal flu influenza and pandemic flu as well. On that note, since you asked the question, I'm going to refer to my notes that I put together here before the call, but the phase I clinical study for the pandemic flu program, ARCT-2304, the phase I clinical study is completed, and the grant with BARDA is fully executed. The manuscript with the results of the study with BARDA and the U.S. government has been accepted by Nature Communications. We look for a publication there shortly. Arcturus is planning to pursue scientific advice with EMA regarding a pathway to licensure later this year, probably in Q4. Those are two more active prominent clinical programs, seasonal flu and pandemic flu.

[Joe Payne, President and CEO at Arcturus Therapeutics]

With respect to the other programs, we didn't do any formal disclosures on that. We will likely do those under CDA with potential interested parties later this year.

[Yale Jen, Analyst at Laidlaw & Company]

Okay, great.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Thanks for your question.

[Yale Jen, Analyst at Laidlaw & Company]

That's helpful. No problem. Maybe just along that line, in terms of Meiji, if they choose to develop COVID vaccine for the next season, not the current season, but potentially next season, would that be something you guys also will get involved? Or how should we see that?

[Joe Payne, President and CEO at Arcturus Therapeutics]

Well, yeah, we're always going to support Meiji in any way that we can. If we have any future strategic relationships that can complement or help them, that would be something that we'd seriously consider. The short answer is yes, we will help Meiji in any way possible, especially on the manufacturing and making sure that we're timely with respect to delivery of any materials that they need, et cetera.

[Yale Jen, Analyst at Laidlaw & Company]

Okay, great. Thanks a lot and congrats on the progress.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Yeah. Thanks, Yale.

[Operator]

Thank you. At this time, we've reached our time for allotted questions. I will now turn the call back over to Joe Payne for closing remarks.

[Joe Payne, President and CEO at Arcturus Therapeutics]

Hey, thanks everyone for participating on the call. Don't hesitate to reach out to our team for any remaining questions, and we'll get back to you as soon as we can. Bye for now.

[Operator]

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Participants

Executives

• Neda Safarzadeh, VP, Head of Investor Relations, Public Relations, and Marketing
• Joe Payne, President and CEO
• Alan Cohen, CMO
• Dennis Mulroy, CFO

Analysts

• Lili Nsongo, Analyst at Leerink Partners
• Pete Stavropoulos, Analyst at Cantor Fitzgerald
• Quan On, Analyst at Wells Fargo
• Analyst at Citigroup
• Analyst at William Blair
• Whitney Ijem, Analyst at Canaccord Genuity
• Adam Dolwood, Analyst at B. Riley Securities
• Adam Walsh, Analyst at ROTH Capital Partners
• Jenny Kim, Analyst at BTIG
• Yale Jen, Analyst at Laidlaw & Company