Arcturus Therapeutics(ARCT) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenue for Q1 2025 was $29.382 million, a decrease of 22.8% compared to $38.012 million in Q1 2024[16] - Collaboration revenue decreased to $25.477 million in Q1 2025 from $32.598 million in Q1 2024, representing a decline of 21.7%[16] - The net loss for Q1 2025 was $14.076 million, compared to a net loss of $26.817 million in Q1 2024, reflecting a 47.6% improvement[16] - Revenue for the three months ended March 31, 2025, was $29.4 million, a decrease of $8.6 million or 23% compared to $38.0 million in the same period of 2024[100][102] - Operating expenses decreased by 32% to $46.2 million for the three months ended March 31, 2025, down from $68.4 million in the same period of 2024[104] Cash and Assets - Cash and cash equivalents at the end of Q1 2025 were $216.948 million, down from $237.028 million at the end of 2024[14] - Total assets decreased to $331.785 million in Q1 2025 from $344.069 million at the end of 2024[14] - Cash and cash equivalents totaled $216.9 million as of March 31, 2025, down from $288.4 million as of March 31, 2024[54] - Cash and cash equivalents, including restricted cash, totaled $273.8 million as of March 31, 2025[114] Research and Development - Research and development expenses for Q1 2025 were $34.893 million, down 34.9% from $53.573 million in Q1 2024[16] - Total research and development expenses for the three months ended March 31, 2025, were $34.9 million, down from $53.6 million in the same period of 2024, reflecting a reduction of 34.9%[77] - The LUNAR-CF program for cystic fibrosis has progressed to a Phase 2 multiple ascending dose study, with dosing initiated in December 2024[101] - The FDA granted Fast Track Designation for ARCT-2304, recognizing its potential to address unmet medical needs for H5N1 influenza prevention[97] Collaboration and Milestones - The Company received a $200 million upfront payment from CSL Seqirus and is eligible for over $1.3 billion in development milestones and up to $3 billion in commercial milestones[38] - The Company achieved an initial $8 million milestone related to the CSL Collaboration Agreement in Q1 2025, along with a $7 million development milestone[38] - The company achieved approximately $488.1 million in total upfront payments and milestones from CSL Seqirus, including $15.0 million in the current quarter[114] - CSL Seqirus received exclusive global rights to develop mRNA vaccines, with an upfront payment of $200 million and potential milestones exceeding $1.3 billion[116] Financial Position and Liabilities - Total liabilities decreased to $98.026 million in Q1 2025 from $103.091 million at the end of 2024[14] - The company’s accumulated deficit increased to $462.883 million as of March 31, 2025, from $448.807 million at the end of 2024[14] - The remaining available funding from the BARDA grant, net of revenue earned, was $36.1 million as of March 31, 2025[49] - The remaining available funding from the BARDA Contract as of March 31, 2025, was $36.1 million, net of revenue earned[123] Internal Controls and Compliance - A material weakness in internal control over financial reporting was identified, specifically related to IT general controls affecting financial reporting processes[143] - The company plans ongoing remediation efforts to address the identified material weakness and strengthen the overall financial control environment[144] - The company is in the process of implementing remediation activities to strengthen ITGCs and controls related to accounting for collaboration arrangements, expecting completion in fiscal year 2025[146] - Management concluded that there were no changes in internal controls over financial reporting that materially affected the company during the periods covered by the Quarterly Report[147] Legal and Regulatory Matters - The company is subject to various legal proceedings and claims that arise in the ordinary course of business, which are inherently uncertain[150] - There have been no material changes from the risk factors described in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[151] - The company is committed to compliance with the Securities Exchange Act of 1934[164] Shareholder Information - The company reported a weighted-average share count of 27.107 million for Q1 2025, compared to 26.879 million for Q1 2024[16] - As of March 31, 2025, a total of 1,177,945 shares remain available for future issuance under the 2019 Omnibus Equity Incentive Plan[62] - As of March 31, 2025, the Company had 127,419 shares available for future issuance under the 2021 Inducement Equity Incentive Plan, which was reduced from an initial 1,000,000 shares[63] Debt and Financing Activities - The Company received $15 million in proceeds from debt financing during Q1 2025[21] - The Company drew down $15 million from its credit agreement with Wells Fargo in March 2025, which was repaid in April 2025[59] - Net cash provided by financing activities was $15.2 million for Q1 2025, compared to $2.2 million in Q1 2024, mainly due to $15 million in debt proceeds[132] - The company has pledged $55 million in cash as collateral under the Wells Fargo credit agreement[122]