Arcturus Therapeutics Eyes Phase III CF Call, OTC Data as Vaccine Funds Pipeline

Key Points

• ARCT-032 cystic fibrosis program: Arcturus expects to decide in the fourth quarter whether to advance its inhaled mRNA therapy into Phase III, based on data from an ongoing Phase II cohort targeting patients with Class I “null” CFTR mutations. Thermo Fisher could contribute up to $40 million if the company proceeds.
• ARCT-810 OTC deficiency data: The company expects to report Phase II results and provide a regulatory update before Sept. 30, tracking ammonia, glutamine and urea biomarkers in patients with ornithine transcarbamylase deficiency.
• Funding strategy: Arcturus says it has more than $200 million in cash and a runway through 2028, while using its KOSTAIVE COVID-19 vaccine business—approved in 32 countries—to help fund its rare-disease pipeline. The company may seek a partner for ARCT-810 if both programs advance to Phase III.

Arcturus Therapeutics NASDAQ: ARCT is positioning its mRNA platform around two rare-disease programs targeting cystic fibrosis and ornithine transcarbamylase deficiency, while its vaccine business is intended to help support therapeutic development, President and CEO Joseph Payne said during a Canaccord discussion.

Payne said the San Diego-based company develops mRNA medicines using its LUNAR delivery technology, including inhaled delivery to the lung and injectable delivery to the liver. The company also has an approved COVID-19 vaccine, KOSTAIVE, in 32 countries and has regained strategic control of that vaccine enterprise.

“We utilize our vaccine enterprise to fund the therapeutics franchise,” Payne said, highlighting the company’s flagship cystic fibrosis and liver-disease programs.

Cystic Fibrosis Program Targets Patients Without CFTR Function

Arcturus’ ARCT-032 is an inhaled mRNA treatment candidate for cystic fibrosis, designed to produce a new cystic fibrosis transmembrane conductance regulator, or CFTR, protein in the lung. The treatment uses the company’s LUNAR lipid nanoparticle technology and is administered through a nebulizer, with the goal of delivering mRNA into bronchial epithelial cells.

Payne contrasted the program with existing cystic fibrosis therapies that modulate dysfunctional CFTR proteins. ARCT-032 is initially aimed at patients with Class I disease, also called “null” mutations, who do not have CFTR protein available for modulation.

“We are not modulating a broken or dysfunctional transporter,” Payne said. “We are building a new one.”

He said the company expects to make a decision in the fourth quarter on whether to advance ARCT-032 into Phase III development. The decision will be based on data from the fourth cohort of the ongoing Phase II study, which is enrolling up to 20 patients in the U.S., Turkey and Israel.

Arcturus is collecting multiple categories of data in that cohort, including:

• Forced expiratory volume, or FEV, a measure of lung function;
• Lung clearance index, or LCI, another lung-function measure;
• Two validated quality-of-life surveys; and
• High-resolution CT scans intended to assess changes such as mucus and mucus plugs.

Payne said there is no established efficacy threshold for an inhaled mRNA treatment in Class I cystic fibrosis because Arcturus is a first mover in the area. The company also expects to compare its treatment data with a normative, natural-history-like study being conducted by the Cystic Fibrosis Foundation in Class I patients.

The company has not provided timing for release of the underlying clinical data, though Payne said it expects to share the data after making its Phase III decision.

Thermo Fisher Agreement Could Support Phase III Costs

Payne said Arcturus recently selected Thermo Fisher as a commercial manufacturing partner for ARCT-032 after engaging multiple large manufacturers. He characterized the arrangement as support for the Phase III program in exchange for commercial manufacturing rights, rather than an equity financing or royalty transaction.

Under terms disclosed in an SEC filing, Thermo Fisher would contribute up to $40 million if Arcturus decides to proceed into Phase III, Payne said. He added that Thermo Fisher had access to the company’s data before entering into the agreement, though its precise financial commitment prior to a Phase III decision was not disclosed.

Payne emphasized the potential manufacturing scale of the product, contrasting KOSTAIVE’s annual 5-microgram dose with the ARCT-032 program’s planned daily 10,000-microgram dose.

OTC Deficiency Data and Regulatory Update Expected This Quarter

Arcturus’ second key therapeutic candidate, ARCT-810, is an injectable mRNA therapy for ornithine transcarbamylase deficiency, or OTC deficiency. The therapy is intended to deliver mRNA to liver cells to produce a functioning OTC enzyme and restore urea-cycle activity.

OTC deficiency can lead to elevated ammonia levels in the blood, which Payne said can cross the blood-brain barrier. Arcturus has completed enrollment and dosing in its Phase II trial in Europe and the U.S. and expects to report data before Sept. 30.

Alongside the data release, the company expects to provide additional detail on its regulatory path following what Payne described as productive Type C meetings with regulators.

The company is tracking three principal biomarkers in the study: ammonia, glutamine and urea output. Payne said ammonia reduction and normalization may be particularly important in pediatric patients, while glutamine is also relevant because patients may continue to experience elevated levels despite treatment with ammonia scavengers.

Payne said the commercial opportunity in OTC deficiency is concentrated in pediatric patients and X-linked male patients, where the disease can be fatal. He said Arcturus is the only remaining injectable mRNA developer in the indication, according to his assessment.

Cash Runway Extends Through 2028, Payne Says

Arcturus reported $191 million in cash, plus a $12 million cash infusion from a partner, giving the company more than $200 million and a runway through 2028, Payne said.

He said the company’s existing capital would not realistically fund two independent Phase III programs. If both rare-disease programs progress successfully, Arcturus has previously indicated it would likely seek a partner for the OTC program to help finance the cystic fibrosis program.

Payne also said the company plans to explore partnerships and commercial expansion for KOSTAIVE after regaining full control of its vaccine business. The vaccine is approved in 32 countries, and Arcturus has a partner distributing it in Japan during the current season.

About Arcturus Therapeutics (NASDAQ:ARCT)

Arcturus Therapeutics Holdings Inc 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.

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