Q3 2025 Arcturus Therapeutics Holdings Inc Earnings Call
Speaker #1: Later, you will have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing star one on your telephone.
Speaker #1: Also, today's call is being recorded. If you should need any operator assistance during the call today, please press star zero at any time.
Speaker #1: Now, at this time, I'd like to turn things over to Neda Safarzadeh, Vice President, Head of Investor Relations, Public Relations, and Marketing. Please go ahead, ma'am.
Speaker #2: Thank you, Operator. Good afternoon, and welcome to Arcturus Therapeutics' quarterly financial update and pipeline progress call. Today's call will be led by Joe Payne, our President and CEO.
Speaker #2: And Andrew Sassine, our CFO, Dr. Patrick Vekula, 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.
Speaker #2: 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 defer materially from those expressed or implied by the statement.
Speaker #2: Please see the forward-looking statement disclaimer on the company's press release issued earlier today. As well as the risk factor section in our most recent form 10-K and in subsequent filings with the SEC.
Speaker #2: In addition, any forward-looking statements represent or reuse only as of the date such as statements are made. Arcturus specifically disclaims any obligation to update such a statement.
Speaker #2: And with that, I will now turn the call over to Joe.
Speaker #3: Thank you, Neda. It's good to be with you again, everybody. I will begin today with an update on our ARCT-032 program. This is our messenger RNA therapeutic candidate for cystic fibrosis or CF.
Speaker #3: ARCT-032 utilizes Arcturus' lunar lipid-mediated aerosolized platform to deliver CFTR messenger RNA to the lungs. Expression of a functional copy of the CFTR mRNA in the lungs of people with CF has the potential to restore CFTR activity and mitigate the downstream effects that cause progressive lung disease.
Speaker #3: company announced interim data from its ongoing phase two clinical trial of ARCT-032. Treatment with inhaled 10 milligram doses daily In October, the over 28 days in six class one CF adults was generally safe and well tolerated.
Speaker #3: protocol pre-specified analysis of high-resolution computed tomography lung scans or HRCT lung scans using FDA 501(k) cleared AI technology revealed reductions in mucus burden in four of the six class one A CF participants in our second cohort.
Speaker #3: The ongoing third cohort is enrolling up to six subjects to assess the safety and tolerability of the 15 milligram dose daily over 28 days and the impact on the efficacy endpoints.
Speaker #3: The company intends to evaluate daily dosing of ARCT-032 over a 12-week duration in up to 20 CF participants. Safety and preliminary efficacy data will be collected in this study, which is planned to begin in the first half of 2026 after the third cohort top line data is understood.
Speaker #3: Two weeks ago, I, along with our team, had the privilege of attending the North American Cystic Fibrosis Conference in Seattle. It was great to meet with the CF Foundation leadership team and share our enthusiasm for the class one population based on our encouraging data.
Speaker #3: I met with the physicians and principal investigators involved in our ongoing clinical trials and was very pleased to hear their anecdotes, positivity, and encouragement.
Speaker #3: I enjoyed meeting with multiple CT scan experts and felt their passion as they described the present and future importance of HRCT imaging data in lung disease trials.
Speaker #3: I affirmed my appreciation of the significant unmet medical need represented by class one CF and other CFTR modulator non-responders here in the United States.
Speaker #3: There is an even higher prevalence of people with class one CF in countries outside the US, especially in Europe, India, the Middle East, and Israel.
Speaker #3: All in all, the conversations with the CF Foundation, people with Class One CF, their physicians, investigators, CT scan experts, and global CF representatives—this all reinforced Arcturus' commitment to advance ARCT-032 further into development.
R&D expenses were 23.3 million for the 3 months, ended September 30th 2025 compared with 39.1 million in the prior year.
The decrease was primarily driven by lower manufacturing costs for the co-flu and CF programs, as well as reduced clinical trial expenses for COVID and cystic fibrosis.
Lower payroll and employee benefits. Further contributed to the decrease.
R&D expenses were $87.7 million for the 9 months ending September 30, 2025, compared with $151.4 million in the prior year.
The decrease was primarily driven by lower manufacturing and clinical costs related to the COVID program, reflecting the program's transition from the development phase to the commercial phase.
Additional decreases were attributable, attributable to lower manufacturing costs for the cystic fibrosis and flu programs.
These reductions were partially offset by higher clinical costs for Phase 2 of the cystic fibrosis program.
A role in benefits expenses. Also decreased primarily due to lower stock based compensation expense.
DNA expenses were 10.4 in 32.1 million for the 3 and 9 months. Ended September 30th 2025 compared with 13.3 and 40.4 million in the comparable period last year.
The decreases in both periods were primarily due to reduced share based compensation expense, as well as reduced payroll and benefits.
For the 3 months, ended September 30th 2025. Our tourists reported a net loss of approximately 13.5 million for 49 cents per diluted shares. Compared with a net loss of 6.9 million or 26 cents per diluted share in the 3 months, ended September 30th 2024
Cash, Cash equivalents and restricted cash, were 237.3 million as of September 30th 2025.
And 2933.9 million on December 31st 2024.
Remained extended into 2028.
More details regarding our cost reduction and runway will be provided on our year-end call in March.
In summary, the company remains in a strong financial position and has the cash Runway needed to achieve multiple near-term value. Creating milestones for both therapeutic programs.
I will now pass the call back to Joe.
Thanks, Andy. Our team continues to make progress with our mRNA therapeutics and vaccines pipeline. We look forward to initiating the planned 12-week CF study for ARCT-032 in the first half of 2026.
And engaging Regulatory Agencies regarding the pivotal trial designs for arct 810.
With that, let's turn the time over to the operator for questions.
Thank you Mr. Payne, ladies and gentlemen, at this time, if you do have any questions, please press star 1. And if you find your question has been addressed. You can always remove yourself from the queue by pressing star 2. Again star 1 for questions we'll go first this afternoon to Yasmine rahee of Piper Sandler.
Good afternoon team, thank you for the update. I guess, the first question is given this data. Have you been able to do some pkpd modeling to help us understand sort of expectations as you are initiating, the third dose cohort and what do you hope to gain and how we should be thinking about that?
Um, that sort of question. And then question 2 is.
As you are preparing for the meeting with the agency, uh, discuss your OTC pivotal programs.
What are sort of some of the options of sort of base case, best case both in development for the Pediatric population as well as development in the adult population. And thank you so much and I'll jump back in the queue.
Evaluated at a dose level.
15 milligrams.
being conducted in a very
similar manner to the first 2 cohorts at,
all of the activities with respect to data collection, are going to be in line with the first 2 cohorts,
With respect to the fourth cohort.
Or I guess you would say this uh planned 12 week safety and preliminary.
Commanded stud.
so,
Extending the duration of the study from 4 weeks to 12 weeks.
We're also increasing the population of
but uh,
a large amount of the
The data that's being.
Collected is very similar to what we're doing in the first three cohorts.
there is some noted differences that were intended to
first of all,
uh,
Adding an extra screening visit which to establish a more stable fev1 Baseline.
Uh, we're also going to be looking at.
um,
Q-5 d5l.
Depression.
We're going to be adding.
This General.
question there to the standard validated cfq,
are familiar with with
CF.
but with respect to PE and the PK,
3 cohorts.
With respect to your second question, you were asking about OTC.
Um,
We're looking at two separate populations: the adult population.
and then,
the more severe disease in children and these will likely
the adults, uh,
Involving.
Glutamine as a biomarker.
That's where we captured success already. And we
Learned.
we've collected some positive data already in our trials, to date with respect to glutamine and
With respect to children that are suffering more.
The focus will be more on ammonia itself.
And getting alignment with the FDA on that.
We do a single-arm study, for example.
To capture a.
But these sorts of, uh, conversations are separate and distinct enough to have separate meetings to address them as our expectation.
Uh, the best case scenario, of course,
We gain alignment with both adults and Pediatrics.
And that would be very exciting.
program to have line of sight in, uh,
You know, a broader population.
Disapproved as soon as possible.
Hi, this is Jake on for Miles. Thanks for taking my question. Um, just reflecting back on the Imaging data. You showed for CF, um, do you expect that the improvements you see in mucus, over time, especially in that 20 week study, will be bronchial or Alvar specific as you sort of showed and that initial data set and is is that what you saw in the mucus burden from the the ferret model pre-clinical and then just wanted to also check in on cost Dave and see if you've updated your guidance.
So, when you're going to start realizing revenue from that program, thanks.
okay, so first, the first question is
With respect to mucus plug reduction.
observed, and
Is familiar with the field is mucus plugs form in the smaller Airways, right? So as you resolve that you measure smaller changes and
Airway improvement, uh, FeV. On the other hand, it is mainly a measure of larger airways. So they're complementary, but they do not measure the same thing. Given enough time, we believe that both of these will improve.
so, that's 1 of the purposes of
Study.
Uh, before I move on to the co-state commercial question, did I address your question, Jake?
I guess I wanted to know whether you expect those mucus reductions to occur across the entirety of the lung or whether um a specific bronchial or specific Alvi are going to be resolved given that's you sort of boxed specific bronchioles and and your presentation. Yeah. Um denoting that because potentially lnps are directed There. Primarily that? That's where you're going to see an effect. I just wanted to know that and and whether you also saw sort of bronchial specific reductions in the lungs of the ferrets when you, when you dose those
No great question. So first of all, with respect to the data that we collected in the images, you do see in the lower register, the lower lobes that they are first to resolve and show a reduction of mucus plugs, and that is simply because this is an inhaled therapy.
we've talked to now, several pulmonologists that
View this as a confirmation that.
We?
see first the lower register, the lower lows being addressed simply because this is
Not therapeutic. We expect over time, that, that
The effect will.
Continue to.
Improve.
and that's what uh 1 of the primary purposes of the 12-week study is through an extended duration that will continue to address, not only the lower lows but the upper
As well.
Uh, with respect to your question about ferrets, this is a different lung type entirely. Uh, they're not a vertical animal, so gravity is not...
Injected processed, this wasn't a traditional inhaled therapeutic. Very like the, the humans experience. So we didn't expect to see a similar
Data set and we didn't do CT scans in in these ferrets as well. We we analyzed the data separately through mucociliary clearance.
Now, with respect to the second question on co-state guidance, uh, Andy, do you want to provide a, you know, maybe an answer there?
So, they're in the process of, uh, selling those doses in Japan. We don't really have an update, uh, subsequent to that. But, uh, probably look for an update sometime at the end of the year, call in, uh, next march. Hope that helps
thank you very much.
Thanks, Jake.
We'll go next now to Sheamus Fernandez with Guggenheim.
Hi guys. Thanks for the question. Uh, this is Evan Wong on for Seamus. I have just two questions on specific fibrosis with the upcoming $15 million. Can you just talk to me about the metrics that will drive the go/no-go decision, such as the 10 or 15 mg in the subsequent Phase 2, whether it's SEV1, CT scan, or both, and what specifically you may be looking for?
Um and then with the subsequent 12 week, study curious, what you define a success then with uh longer treatment in terms of either fv1 or high-res CT, as we think about data relative to the, in terms of that we've shown so far. Thanks,
Yeah, thanks Evan.
For the Graham cohort, we want to gain additional confidence in the dose response. If we did not see any mucus plug reduction at 5 milligrams, yet we saw 4 out of 6 in the second cohort at 10 milligrams exhibit mucus plug reduction. So, one of the things we're looking for at 15 milligrams is whether there is a continued or elevated response and if that indicates a dose response.
Uh, but the most important um data set that we're collecting from this third cohort is really safety and tolerability if it's well tolerated then I think we have our dose that we will select for this uh 12 week study coming up in the first half of next year. Uh with respect to uh what we would Define a success is is is if we see continued
Further reduction of mucus plugs translates into a...
benefits.
Either image or or experienced in terms of lung function improvements, and that would be fantastic. Uh,
given that this is a first in line therapy for
for an a a considerable unmet medical need in class 1, subjects and modulator non-responders. So anything uh positive for fev would be viewed positively uh if we see an improvement.
With the extended duration or elevated dosing.
Study with respect to the mucus, plug reduction in mucus burden being.
Decreased. That would be also very uh, promising to encourage the board and our company from to advance this into a, a phase 3 trial.
Thanks. And if I could ask 1 follow-up, just curious in terms of the CT scan and you get plugs what conditions you as clinically meaningful and what?
In terms of some of the regulatory discussions we've had, especially as an approach to include CT scans as an exploratory endpoint, what they might view as a potential data approval point, or whether the focus would be on... Thanks. Well, we will be the first company in CF to establish that. That's one of the key tasks at hand here. As a group, as we share this data with the FDA, we need to determine what's clinically meaningful. What do we know now? Is that the more optimized, mature modulators out there, after a year of treatment, you can see near complete resolution of mucus plugs. At an interim time point, you'll see...
uh,
not a complete resolution of mucus plugs.
Unfortunately, we're the first. Well, unfortunately, we're the first, uh, company and therapeutic to evaluate.
Uh, CT scan measurements after only 28 days of treatment.
You know, some of these subjects are responding with a 30% to 40% mucus reduction after just 28 days, which is encouraging. But the question you asked is, what is meaningful? I think, uh, we're already in that phase of a meaningful reduction. We just now need to extend treatment to see if that translates into other benefits in lung.
But, uh, the specific number we're not prepared to share right now. No. 1 is that that is something that we can discuss at a later time with the...
great. Thank you.
Hey, Whitney.
Fifth, bring to the third cohort, that's the 28-day study. Uh, it's the same data being collected under the same protocol for the first 2 cohorts.
and that data is expected likely in the first
last year, and
as soon as that Top Line data is understood, we will be able to quickly then
transition to the,
um,
their, uh, but the parameters and the efficacy, endpoints and safety. And tolerability investigations are all, um, identical to what we did for the first 2 cohorts for 15 for the 15th.
And third cohort.
Did I? Did I address. Oh, thanks Angel. Yes. Yeah. Maybe just 1 quick follow-up. Um, any chance you would show the um, analyses of the CT scans for patients, who might not have responded and seen the decrease in mucus plugs, or do you expect it to be similar?
Well, there's going to be a time for us to share the, um, the complete data package for the, you know, the first 3 cohorts, right? It did, we do have a 5 10 and 15 milligram cohort. I'm sure that'll be a nice presentation, or, or publication at some point. Uh, we haven't determined exactly when but that would be an appropriate time to to, you know, to to just share all the data we've collected um to determine if there's a dose response and um, and provide those details, I I've already shared on this call already that that 5 milligrams. Uh, we did not see any mucus plug reduction.
Of that recapitulates or gets better. And we'll have the opportunity to see if there's a dose response.
Great. Thank you guys.
We'll go next. Now to you non zoo with Wells Fargo.
Hi. Thanks for taking our question. This is Juan on forana. So, our question is also around CF. We are wondering, uh, have you seen any data from 15 Mig and if so any updates on the safety? And, uh, will you be planning to evaluate any dose higher than that? And I have a quick follow-up. Thank you. Yeah. Uh, 15 milligram will be the highest dose that we're evaluating. Uh,
tend to choose either 10 or 15 milligrams or something in between, perhaps for the
for the 12 week study and next year,
When the 15 million.
Guided. Uh, we will first collect it and then make a determination how and when to share it.
Uh, did I address your question?
Uh, yes, uh, thank you for that. Yeah. And uh, uh, well wondering, uh, do you need to show a clear correlation between, uh, mucus or plaque, reduction, and the fv1? I'm wondering hypothetically if only
For example, only, uh, mucus or plaque reduction data is positive and if we would be 1 is not. Would that affect uh, how you view the program and
how you make the go? See I I had great conversations with a lot of the experts, uh, here at the
Nacfc in Seattle last month.
Um, and yes, CT imaging has been a primary endpoint.
That previously. However, that's not our present expectation of the FDA. They may not yet consider CT imaging as a surrogate endpoint at this time, but I think it's safe to assume that it will be a supportive endpoint for a Phase 3 or pivotal trial. We first have to collect the data from the 12-week study and then share it with the FDA and have that conversation.
You know, it is important if the data is convincing. Yes, we'll look at.
You know.
primary or or a co-primary endpoint that involves CT scan but but the present expectation is that CT Imaging will be a supportive endpoint very similar to what
can be had to go through.
As the first module.
Or one of the early modulators.
Got it. Thank you so much.
yeah, thank
thank you. We'll go next now to your goal and the choitz of City.
Hi, this is Joan Kim on for your goal. Thanks for taking our question, uh, regarding the extra screening, visit that you had mentioned for the 12th week study. Can you just provide additional Clarity on whether you're planning on averaging the screening visits together to get more reliable Baseline. And also be planning on just doing the 1 extra measurement and I guess why not, uh, multiple
And why not do multiple.
It's a great question. Uh,
uh, we haven't had
Is not only in.
Duration from 4.
20.
But it's also strengthening the baseline, and whether that's an additional FEV pre-visit or...
A second one, and do we average screening and to FEV, uh, pre-treatment or not? That conversation will be one of the key questions that I will have with the FDA.
once we have aligned on that, I can,
put for clarity, but
The presentation is just an additional.
Pre-treatment value, that can be averaged and strengthening the Baseline. 2-fold
All right, thank you. And if I could just solve the phone more, uh, I believe you had mentioned previously that the quality of life assessment for the, for the phase 2. For the, the cfq RSS was also variable. Um, and so you had decided not to share that, but I guess is there a strategy in mind to reduce the variability there? So you can better interpret, its meaning and apply it to the future or is the eq5d 5l questionnaire just less subject to variability?
Yeah. So
Just to catch everybody up.
the validated questionnaire that
Is is well validated.
Quite comprehensive and IT addresses multiple organs in the body.
Uh, RCF QR is truncated and focused on just the lungs.
Fields therapeutic. So there's questions in the pulmonary section, and because of that, uh, and for other reasons and because the smallness of the nature of our, our these nf6 cohorts, the variability is just uh it, you know, these questions are more powerful and larger phase 3 studies but it's still variable to address that.
Uh in our in our upcoming 12 week study, we do intend to add additional General Health questionnaire questions questions. What's called an eq5d?
And I touched on this earlier but but when we look at mobility and self-care and pain, discomfort anxiety depression and this General Health questionnaire will be coupled with this truncated CF QR that's more validated just to add weight to the questionnaire and we'll and we'll see what we can glean from that and to what extent we modify it or keep it for the phase 3 trial. We'll also be helpful.
Got it. Thank you very much. Appreciate it.
Yes, thanks. S.
Thank you. We'll go next now to Tom Shrader with btig.
Hi, good afternoon. Thanks for taking the questions. I'm wondering in the next CF cohort. If there's any interest or thoughts about adding slightly less impacted patients or the lungs, might be a little cleaner and delivery might be easier and then I appreciate you're at arms length on uh co-state. But can you comment are there ongoing discussions or has the FDA kind of made a statement? And there's, there's no room to discuss anything. Thanks for the answers. Yeah. Well, there's definitely room to discuss.
Their, of course, there are interested in this.
first in line therapy for
you've done met.
Space. So,
There is still flexibility to discuss, uh, with respect to your first question about less impacted individuals. Um, we did it.
We labeled a cohort, patient, 5 cohorts. This is someone who had more advanced disease and much more numerous plugs and even larger plugs and we
You know, considerable positive feedback from this subject even though they're uh mucus, plug reduction was only 9%. And because the mucus, the the size of the plugs that were reduced were
So we found uh, we had just, you know, success. I would call it with uh 1 particular more. Uh,
Advanced subject. So the the
question is no, we're not.
We're not refining the
the list of who’s going to be getting the drug for this upcoming 12-week study because we found success in less advanced and more advanced disease.
Okay, great. Thank you.
Thank you. We'll go next now to Yale kin with laid long company.
So I wonder any progress on those 2 other than the influenza and, uh, Co any comments on that and thanks.
Yeah, it's a great question. Um, CSL and Securus are considering a deeming process and they've publicly disclosed that the timing of that is. It remains uncertain, but if CSL and Securus demerge then secure us will uh be
Focused on the vaccine Enterprise going forward, especially the flu Enterprise. Uh, so
The.
With respect to the future of the program and the collaboration will come through that, uh, arm of of the company as of right now, uh, you know, Co is, of course still very active. Uh, any guidance on the flu program will come from them going forward and likely the securest Branch. If they demerge uh with respect to any new programs, we have uh communicated in the past that those are being
considered or active in certain degrees, but we haven't disclosed any of those details that
there will be the right time and
Uh, coinciding with any updates, we hear from a CSL secure a steamer.
Hi.
Yeah, we've expanded the third cohort from 3, at our last quarterly, call we indicated that we were estimated that we would have 3 subjects in our third, third cohort, we've now uh, communicated that that could be expanded up to 6. And that would take us into the first quarter of next year, uh, with respect to
Uh, I did. I address that question first.
Uh, I mean, this wasn't the question, but based on that pattern of having about 3 patients enrolled per quarter, should we also think about the pace of enrollment for the 20 patients that need to be similar?
Uh, for this uh, 12 week study. Um, I I alluded to this previously, but when we were at the Seattle conference, uh, or at the nacfc, we got to meet with.
Variety of investigators globally, not just limited to the US. So uh the the percentage and prevalence of class 1 and modulator non-responders in other countries is is extraordinary and untapped
so, in addition to the
dozen or so sites that we have,
Here in the US.
Outside of the U.S., and that will, uh, is intended to accelerate the enrollment pace to support the end of Q3 2025 rather than the end of Q6.
Uh, for this upcoming 12 weeks.
The short answer to your question is that we anticipate enrollment rate to increase with these additional sites and additional access to class 1 and modulator non-responders to what extent.
We?
And is that Global expansion? And the additional sites is that captured in the current cache. When we guidance
Yep. That is all captured in the runway guidance. And the good news is that we had produced additional material uh, for the CF um, uh, clinical trials and, and consequently the uh, additional cost of of expanding the trial is, is pretty much diminished, so we're in very good shape there financially. Thank you.
Chris second question regarding the OTC program. So, can you, um, give us an age range in terms of what your pediatric population Target would be because uh, the data we've seen so far is in in 12 and older and I was wondering what would it take? Um, to go to the younger patient, or would you solely focus on pediatric patient that are 12 to, you know, the 12th waiting.
Expect for these types. C type meetings with the regulatory agency, with pertaining to Pediatrics is what the cutoff age is it. Whether it's 5 years old or 8 years old is going to be determined um and finalized as part of that meeting. Uh and then adults uh as as well, is it going to be 12 and above or 16 and above are? Uh that'll be that's 1 of the purposes of these media.
In mind with the pivotal trial protocol.
Uh, and that clarity will be provided in the first half of next year.
So you expect to be able to go into pivotal in pediatric patients without an additional study needed to bridge between the data Within.
Well, if we can accomplish that, that, that would be fantastic.
But yes, that's the intent. Uh,
the extent, we can accomplish that, we'll find out.
and uh,
that all I know is there's much more considerable unmet Medical
Especially Excel.
Males or boys.
Uh and the younger, they are the more severe the disease and the less they're requisite.
Requirement that we have.
To track uh, glutamine as a primary driver. Like it is in the adults adults. Uh, is likely going to be more closely associated with glutamine as a biomarker. So they're 2 separate discussions.
Thank you.
Thank you.
Thank you, and Mr. Pain. It appears, we have no further questions. This afternoon sir. I'd like to turn the conference back to you for any closing comments.
Hey, thanks everyone for participating on the call. And if there are remaining questions or those that were able to pose them, don't hesitate to reach out to our team and we'll get back to you as soon as we can. Thanks again.