Summary of Arcturus Therapeutics Conference Call Company Overview - **Company**: Arcturus Therapeutics (NasdaqGM:ARCT) - **Event**: 2026 Conference on March 11, 2026 Key Points on Cystic Fibrosis (CF) Program - **Phase 2 Study Progress**: Completed three cohorts with successful dosing at 5 mg, 10 mg, and 15 mg, showing consistent tolerability across all levels [3][4] - **Study Duration**: The initial studies were 28-day trials, with plans to advance to a 12-week study to assess lung function improvements [4][5] - **Clinical Signals**: Early signals of biological proof of concept were observed, including decreases in mucus plugging as seen in high-resolution CT scans [4][5] - **Study Design Learnings**: The design of the upcoming 12-week study will incorporate multiple baseline measurements for lung function to control variability [10][11] - **Patient Selection**: The criteria for patient selection in the 12-week study will be narrowed to focus on subjects with moderate lung function, enhancing the potential for observable improvements [12][13] - **Endpoints**: The study will evaluate multiple endpoints, including FEV, LCI, and quality-of-life measures, alongside imaging data from CT scans [13][14] - **Regulatory Path**: The company anticipates leveraging data from a natural history study conducted by the CF Foundation for potential Phase 3 studies, depending on the outcomes of the 12-week study [35][36] Key Points on OTC Program - **Regulatory Clarity**: The company is seeking clarity from the FDA regarding the regulatory path for treating Ornithine Transcarbamylase deficiency, particularly in pediatric patients [42][43] - **Focus on Pediatric Population**: There is a strong emphasis on addressing the unmet medical needs of children, with plans to prioritize pediatric development [56][59] - **Innovative Assay**: Introduction of a new 15N ureagenesis assay to assess ammonia control in severe pediatric cases, which is a significant concern [50][52] Key Points on Respiratory Vaccine Franchise - **KOSTAIVE Updates**: The vaccine has received approval in the UK and is under arbitration regarding a milestone payment from CSL related to EU approval [65][70] - **Impact of Arbitration**: The outcome of the arbitration could significantly affect the company's cash runway, which currently extends to Q2 2028 without including potential milestone payments [75][76] Additional Insights - **Market Dynamics**: The company is expanding its CF study sites to Europe and the Middle East due to a higher prevalence of Class 1 CF subjects in those regions compared to the U.S. [33][34] - **Future Data Sharing**: The company plans to share data from the 12-week study after a certain number of subjects have been enrolled, although specific timelines have not been provided [39][40] - **Investor Communication**: The company is committed to keeping investors informed about ongoing developments and regulatory interactions, particularly regarding the OTC program and CF studies [72][73]

Financial Data and Key Metrics Changes - Year-over-year annual revenue decreased by $70.3 million, and quarterly revenue decreased by $15.6 million, primarily due to reduced revenue from the CSL collaboration and lower milestone achievements as KOSTAIVE was commercialized [14] - Annual and quarterly research and development expenses decreased by $83.0 million and $19.3 million, respectively, driven by lower manufacturing and clinical costs related to the LUNAR-COV19 program [15] - Cash equivalents and restricted cash were $232.8 million as of December 31, 2025, down from $293.9 million on December 31, 2024, extending the cash runway into the second quarter of 2028 [16] Business Line Data and Key Metrics Changes - The ARCT-032 program for cystic fibrosis is progressing with a phase II trial, with higher dose testing showing no safety concerns [5][10] - The ARCT-810 program for ornithine transcarbamylase deficiency is advancing toward pivotal development, with regulatory meetings scheduled for the first half of 2026 [6][12] - The KOSTAIVE COVID-19 vaccine program received approval from the U.K. Medicines and Healthcare Products Regulatory Agency in January 2026 [7] Market Data and Key Metrics Changes - The company is expanding its clinical trial sites internationally, including Europe and the Middle East, to enroll patients with specific CF genetic mutations [37] - The focus on rare disease clinical programs is expected to yield significant milestones in the near term [16] Company Strategy and Development Direction - The company aims to optimize its clinical studies by enhancing baseline stability and incorporating more sensitive measures like Lung Clearance Index (LCI) [20][21] - There is a strategic focus on both adult and pediatric populations for the OTC deficiency program, with plans to leverage recent FDA guidance for ultra-rare populations [45] - The company is committed to maintaining a strong financial position while pursuing multiple near-term value-creating milestones [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming 12-week CF study, emphasizing the importance of establishing a stable baseline for patient enrollment [50][51] - The company is actively engaging with regulatory authorities to clarify the path forward for both the CF and OTC deficiency programs [56] - Management highlighted the ongoing discussions with CSL regarding the KOSTAIVE collaboration and the challenges faced in progressing the vaccine to licensure in the U.S. [59] Other Important Information - The company is involved in a lawsuit against AbbVie and Capstan Therapeutics, which remains ongoing [8] - The management team includes key figures such as Joseph Payne (President and CEO) and Alan H. Cohen (Chief Medical Officer), who are leading the call and providing updates on various programs [3] Q&A Session Summary Question: What optimizations were included in the 12-week phase II study compared to the initial study? - Management highlighted differences in study design, including a focus on stable baseline lung function measures and the inclusion of LCI to enhance the signal-to-noise ratio [20][21] Question: How sensitive is the LCI test, and how does it correlate with other endpoints? - Management confirmed that LCI is more sensitive than traditional spirometry and is designed to measure early changes in lung function [28][29] Question: What is the rationale for stopping at 15 mg for the ARCT-032 study? - Management indicated that while 15 mg showed safety, the decision to proceed with 10 mg for the 12-week study was based on early efficacy signals observed at that dose [43][44] Question: What are the expected outcomes from the Type C meetings with regulatory authorities? - Management aims for clarity on study design and endpoints for both pediatric and adult populations in the OTC deficiency program [56][58] Question: What progress has been made regarding the KOSTAIVE vaccine? - Management reported that KOSTAIVE received approval in the U.K., but progress in the U.S. has been challenging due to the current administration's stance [59]

Financial Data and Key Metrics Changes - Year-over-year annual revenue decreased by $70.3 million, and quarterly revenue decreased by $15.6 million, primarily due to reduced revenue from the CSL collaboration and lower milestone achievements as KOSTAIVE was commercialized [13][14] - Research and development expenses decreased by $83.0 million annually and $19.3 million quarterly, driven by lower manufacturing and clinical costs related to the LUNAR-COV19 program transitioning to commercial phase [14] - General and administrative expenses decreased by $6.7 million annually but increased by $1.6 million quarterly due to accelerated employee stock options [15] Business Line Data and Key Metrics Changes - The ARCT-032 program for cystic fibrosis is progressing with a phase 2 trial set to initiate in the first half of 2026, focusing on higher dose testing and evaluating safety and early clinical benefits [5][10] - The ARCT-810 program for ornithine transcarbamylase deficiency is advancing towards pivotal development, with regulatory meetings scheduled for the first half of 2026 to clarify clinical development strategies [6][12] Market Data and Key Metrics Changes - The KOSTAIVE COVID-19 vaccine received approval from the UK Medicines and Healthcare Products Regulatory Agency for individuals aged 18 and older, marking a significant milestone for the company [6] Company Strategy and Development Direction - The company is focusing on rare disease clinical programs and has extended its cash runway into the second quarter of 2028, indicating a strong financial position to achieve near-term milestones [16] - The strategy includes optimizing clinical study designs, such as the 12-week study for ARCT-032, to enhance the reliability of results and patient enrollment [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming clinical studies and the potential for meaningful clinical data in 2026, particularly for the cystic fibrosis and OTC deficiency programs [5][12] - The company is actively engaging with regulatory authorities to clarify study designs and endpoints, especially for the pediatric population in the OTC deficiency program [47][60] Other Important Information - The company is involved in ongoing litigation against AbbVie and Capstan Therapeutics, which may impact future operations [7] - The management highlighted the importance of collaboration with the CF Foundation to enhance patient enrollment and study design [24] Q&A Session Summary Question: What optimizations were included in the 12-week phase II study compared to the initial study? - Management highlighted differences in study design, including stable baseline measures and the inclusion of Lung Clearance Index to enhance reproducibility [20][21] Question: How sensitive is the Lung Clearance Index (LCI) test? - LCI is noted to be more sensitive and less variable than traditional spirometry, making it a preferred measure for children and early changes in lung function [28][29] Question: What is the rationale for stopping at 15 milligrams for the CF program? - The company has flexibility to increase dosing if needed, but is currently focused on the 10-milligram dose based on early efficacy signals [45][71] Question: What are the expected outcomes from regulatory discussions for the OTC program? - The goal is to establish a clear path forward with agreed endpoints for both pediatric and adult populations, with a focus on high unmet medical needs [60][61] Question: What updates are there on the COVID-19 vaccine initiatives? - Progress has been made for KOSTAIVE in the UK, but challenges remain for approval in the U.S. due to the current administration's stance [62]

Core Viewpoint - Arcturus Therapeutics is positioned as a high-potential biotech stock under $10, with expectations of a 404% increase by 2026 due to promising clinical data and a clear development pipeline [1]. Company Overview - Arcturus Therapeutics (ARCT) focuses on developing mRNA-based medicines and vaccines, aiming to address root causes of diseases rather than just symptoms [2]. - The company is currently valued at $194.3 million and experienced a 64% decline in stock value last year, contrasting with a 16% gain in the S&P 500 Index, although the stock has risen by 10% this year [2]. Product Development and Pipeline - Arcturus has developed the world's first approved self-amplifying mRNA Covid-19 vaccine, KOSTAIVE, and is collaborating on mRNA vaccines for Covid-19 variants and pandemic influenza [3]. - The company is advancing ARCT-032, an inhaled mRNA therapeutic for cystic fibrosis (CF), with interim Phase 2 data showing safety and reductions in mucus burden in patients [4]. - A 12-week safety and preliminary efficacy study for ARCT-032 is planned for the first half of 2026, with a higher dose cohort being enrolled to refine the dose-response profile [5]. Additional Therapeutic Developments - Arcturus is also developing ARCT-810 for ornithine transcarbamylase (OTC) deficiency, with plans to collaborate with regulatory agencies on trial designs in 2026 [6]. - The company's mRNA platform is validated through its vaccine programs, with significant immune responses and safety profiles observed in ongoing trials for Covid-19 and pandemic influenza candidates [6].

Financial Data and Key Metrics Changes - For the year ended December 31, 2024, the company reported revenues of $152.3 million, a decrease of $14.5 million from $166.8 million in 2023 [27] - For Q4 2024, revenues were $22.8 million, down $8.1 million from $30.9 million in Q4 2023 [27] - The net loss for the year was approximately $80.9 million, or $3 per diluted share, compared to a net loss of $29.7 million, or $1.12 per diluted share in 2023 [31] - Cash and cash equivalents were $293.9 million as of December 31, 2024, down from $348.9 million a year earlier [32] Business Line Data and Key Metrics Changes - The KOSTAIVE vaccine program achieved European Commission approval, with a reported gross profit share of approximately $28 million for Q4 2024 [24] - Research and development expenses for the year were $195.2 million, up from $192.1 million in 2023, driven by higher clinical trial costs [28] - General and administrative expenses remained relatively stable at $52.8 million for the year, compared to $52.9 million in 2023 [30] Market Data and Key Metrics Changes - The company anticipates increased burn rates in the next two years due to ongoing clinical trials for cystic fibrosis (CF) and ornithine transcarbamylase (OTC) programs [33] - The cash runway is expected to extend until the end of Q1 2027, despite the anticipated decline in development milestones from the COVID program [33] Company Strategy and Development Direction - The company is focused on advancing its self-amplifying mRNA platform pipeline, with ongoing studies for ARCT-2304 (influenza) and ARCT-032 (cystic fibrosis) [12][15] - The strategic partnership with CSL Seqirus is crucial for the KOSTAIVE vaccine's development and commercialization [25] - The company aims to differentiate its mRNA therapeutics through proprietary delivery technologies and unique mRNA sequences [42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming year, highlighting the potential for multiple clinical data readouts and continued development of vaccine programs [34] - The approval of KOSTAIVE is seen as a transformative milestone, positioning the company for future growth [35] - Management acknowledged the competitive landscape in cystic fibrosis treatments and emphasized the unique advantages of their mRNA technology [106] Other Important Information - The company appointed Dr. Moncef Slaoui as Chair designate, bringing significant industry experience to the board [20] - The company is preparing for the U.S. BLA filing for KOSTAIVE anticipated later in 2025 [10] Q&A Session Summary Question: What is the cadence of development milestones within the CSL collaboration? - Management indicated that milestones will continue to be received throughout the year, with specific updates expected in the first quarter call [40] Question: How does the CF program differentiate from competitors? - Management highlighted differences in mRNA technology, delivery systems, and manufacturing processes as key competitive advantages [42] Question: What is the expected size of the CF trial cohort? - The Phase II trial is expected to involve approximately 12 participants, with flexibility to increase that number [48] Question: What are the next steps for KOSTAIVE commercialization in Europe? - Management stated that CSL is leading the commercialization process, and specific details will be provided as they become available [78] Question: What safety monitoring parameters are in place for the CF study? - A data and safety monitoring committee is overseeing safety and tolerability, with thresholds for adverse events established [84] Question: What is the expected visibility into orders for KOSTAIVE in 2025? - Management noted that visibility into orders will depend on Meiji's guidance, with expectations for updates as the year progresses [63]