Arcturus Therapeutics(US:ARCT)2021-05-09 16:00Financial Performance - Total assets increased to $481.5 million as of March 31, 2021, compared to $476.5 million at December 31, 2020, reflecting a growth of 1.9%[12] - Collaboration revenue for Q1 2021 was $2.1 million, down from $2.6 million in Q1 2020, representing a decrease of 19.6%[14] - Operating expenses surged to $59.8 million in Q1 2021, compared to $12.1 million in Q1 2020, marking an increase of 393%[14] - Net loss for Q1 2021 was $56.3 million, significantly higher than the net loss of $9.8 million in Q1 2020, indicating a year-over-year increase of 475%[14] - The company reported a basic and diluted net loss per share of $2.15 for Q1 2021, compared to $0.67 for Q1 2020[14] - Accumulated deficit reached $200.2 million as of March 31, 2021, up from $143.8 million at December 31, 2020, reflecting an increase of 39%[27] - Cash and cash equivalents at the end of Q1 2021 were $466.9 million, slightly up from $463.0 million at the beginning of the period[21] - Net cash used in operating activities was $(42.9 million) with a net loss of $(56.3 million) for the three months ended March 31, 2021, compared to $(11.9 million) in cash used and a net loss of $(9.8 million) in the prior year[104] - Net cash provided by financing activities was $47.0 million for the three months ended March 31, 2021, primarily from the Singapore Loan of $46.6 million[106] Research and Development - Research and development expenses for Q1 2021 were $50.1 million, a significant increase from $7.9 million in Q1 2020, representing a rise of 532%[14] - LUNAR-COV19 program expenses increased to $29.3 million for the three months ended March 31, 2021, from $0.1 million in the same period in 2020, reflecting the program's advancement into clinical trials[91] - The company recognizes revenue from milestone payments only when the uncertainty associated with these payments is resolved[29] - Research and development costs are fully expensed as incurred, including salaries and clinical trial costs[31] - The company has commenced a Phase 2 trial of ARCT-021, with the expectation that the Phase 3 trial will continue through 2021 and into 2022[117] Collaborations and Agreements - The company operates in a single segment focused on research and development of medical applications for nucleic acid technology[28] - The company secured a term loan of approximately $46.6 million to support the manufacture of the LUNAR-COV19 vaccine candidate[27] - The Company has a Development and Option Agreement with CureVac AG, which includes potential milestone payments of $14.0 million for rare disease targets and $23.0 million for non-rare disease targets as of March 31, 2021[50] - The Company received an upfront payment of $7.7 million from Janssen and may receive up to $56.5 million in milestone payments[43] - The Company entered into a Manufacturing Support Agreement with the Economic Development Board of Singapore, securing a term loan of S$62.1 million to support the manufacture of the LUNAR-COV19 vaccine candidate[58] - The company has entered into multiple research collaboration and license agreements, indicating a strategy to enhance its research capabilities and product pipeline[10.6][10.7][10.9] - The ongoing collaboration with CureVac AG suggests a focus on innovative therapeutic solutions and potential market expansion[10.5] - The company’s strategic partnerships with Janssen Pharmaceuticals and Ultragenyx Pharmaceutical Inc. highlight its efforts to leverage external expertise and resources[10.6][10.9] Operational and Administrative Expenses - General and administrative expenses rose to $9.7 million for the three months ended March 31, 2021, up from $4.2 million in the same period in 2020, primarily due to increased personnel costs[92] - Personnel-related expenses increased by $4.7 million for the three months ended March 31, 2021, compared to the same period in 2020, driven by increased headcount and share-based compensation[91] - The total accrued liabilities as of March 31, 2021, amounted to $29.8 million, an increase from $20.6 million as of December 31, 2020[56] Future Outlook and Risks - The company expects to continue incurring losses and will need to raise additional financing to fund development and operations[101] - The company anticipates continued annual net losses for the foreseeable future and will require additional capital to fund operations and support long-term plans[107] - The company faces significant competition from other vaccine manufacturers, which have already commercialized their COVID-19 vaccines and vaccinated hundreds of millions of people[116] - The company may experience delays in clinical trials due to the rollout of competing vaccines and regulatory challenges, impacting the timeline for ARCT-021[117] - The company has identified various factors that will influence future funding requirements, including the demonstration of safety and efficacy of product candidates[107] Legal and Compliance - The company settled a legal proceeding with a former employee, which is not expected to result in any material liability[114] - The company has filed certifications by its principal executive and financial officers, ensuring compliance with regulatory requirements[10.24] - The company is committed to transparency and accountability, as evidenced by its adherence to the Sarbanes-Oxley Act of 2002[10.24] Market and Economic Conditions - The company believes it is not currently subject to any material market risk exposure related to interest income and foreign currency exchange rates[110] - The company may face adverse effects on its business if governments implement waivers on patents for COVID-19 vaccines, potentially limiting the value of its intellectual property[118]