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Arcturus Therapeutics Holdings Inc.

ARCT
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Business Summary

Arcturus Therapeutics Holdings Inc. is a messenger RNA (mRNA) medicines company focused on developing therapeutics for liver and respiratory rare diseases, as well as vaccines for infectious diseases. The company leverages its proprietary STARR® self-amplifying mRNA technology platform and LUNAR® lipid nanoparticle (LNP) delivery system. STARR® is designed to induce robust, longer-lasting, and broader immune responses at lower doses than conventional mRNA vaccines, while LUNAR® aims to enable effective and safe delivery of RNA to target tissues . The company's core business model involves generating revenue through collaboration agreements and government contracts, including upfront payments, license fees, research and development funding, milestone payments, and potential royalties on future sales . Primary customer segments include pharmaceutical and biotechnology partners and government agencies .

The company's internal pipeline includes two RNA therapeutic candidates in Phase 2 clinical studies: ARCT-032 for ornithine transcarbamylase (OTC) deficiency and ARCT-810 for cystic fibrosis (CF) . ARCT-032, for CF, uses the LUNAR platform to deliver codon-optimized CFTR mRNA to airway epithelial cells, aiming to restore functional CFTR protein regardless of mutation type . It has received Orphan Drug Designation from the FDA and EMA, and Rare Pediatric Disease Designation from the FDA . In October 2025, interim Phase 2 results for ARCT-032 in Class I CF adults showed the treatment was generally safe and well tolerated, with reductions in mucus burden observed in four of six participants . ARCT-810, for OTC deficiency, uses the LUNAR platform to deliver normal OTC mRNA to liver cells, with the potential for disease-modifying effects . It has received Orphan Drug Designation from the FDA and EMA, and Fast Track and Rare Pediatric Disease Designations from the FDA . Positive multiple dosing data from two Phase 2 studies for ARCT-810 were announced on June 30, 2025, showing significant decreases in glutamine levels and increases in relative ureagenesis function .

In its vaccine program, Arcturus has partnered with CSL Seqirus for the development and commercialization of mRNA vaccines for COVID-19, influenza, and three other infectious diseases . KOSTAIVE® (ARCT-154), the world's first approved self-amplifying mRNA vaccine, received marketing authorization in Japan in November 2023, the European Commission in February 2025, and the United Kingdom in January 2026 . Commercial sales of KOSTAIVE began in Japan in October 2024 through Meiji Seika Pharma, Ltd. . An updated 2-dose vial lyophilized presentation of KOSTAIVE for the XEC variant strain was launched in Japan in September 2025 . The company also initiated a Phase 1 trial in December 2024 for an sa-mRNA vaccine candidate against pandemic avian influenza (bird flu), funded by BARDA, with results received in the second half of 2025 indicating a favorable safety profile and robust immune response .

For the fiscal year ended December 31, 2025, total revenue was $82.031 million , a decrease of $70.279 million or 46% from $152.310 million in 2024 . Collaboration revenue decreased by $71.168 million to $67.221 million , primarily due to a $33.1 million decrease in milestone achievements and a $15.8 million decrease in revenue related to CSL commercial supply agreements, along with reduced amortization from deferred revenue . Grant revenue increased by $0.889 million to $14.810 million . Total operating expenses decreased by $89.688 million, or 36%, to $158.291 million . Research and development expenses, net, decreased by $82.944 million, or 43%, to $112.212 million , mainly due to lower manufacturing and clinical costs for the LUNAR-COVID program as it transitioned to commercial phase, and lower manufacturing costs for LUNAR-CF and LUNAR-FLU, partially offset by higher clinical costs for Phase 2 of LUNAR-CF . General and administrative expenses decreased by $6.744 million, or 13%, to $46.079 million . The net loss for the year was $65.783 million , resulting in a basic and diluted net loss per share of $(2.40) . Net cash used in operating activities was $74.271 million . As of December 31, 2025, cash and cash equivalents were $230.909 million , with no current restricted cash after the termination of the Wells Fargo credit agreement . The accumulated deficit stood at $514.590 million .

During 2025, the company received milestone payments totaling $39.1 million from CSL Seqirus . In December 2025, the company terminated its $50.0 million revolving credit agreement with Wells Fargo, releasing $55.0 million in previously pledged cash collateral . A lawsuit was filed on September 23, 2025, against AbbVie Inc., Capstan Therapeutics, Inc., and other defendants, alleging trade secret misappropriation and breach of contract . An arbitration was initiated against CSL Seqirus on May 30, 2025, seeking payment of a milestone related to the European Commission's marketing authorization of KOSTAIVE® . CSL Limited reported an accounting write-down of approximately $430 million attributable to the collaboration agreement with CSL Seqirus in February 2026, citing declining COVID-19 disease burden and more onerous U.S. regulatory requirements . The company also vacated an office space in December 2025, recording an impairment loss of $1.9 million .

Business Outlook

Management anticipates continued significant losses for the foreseeable future as the company expands its development activities and advances its programs . The ability to generate revenue and achieve profitability is dependent on successfully completing development, obtaining regulatory approvals, and commercializing product candidates, either alone or with strategic alliance partners . The company expects its research and development expenses to substantially increase as it advances product candidates through clinical trials .

A key growth area is the advancement of the LUNAR-CF program, with plans to initiate a 12-week safety and preliminary efficacy study in up to 20 CF participants in the first half of 2026, following the completion of the third cohort in the ongoing Phase 2 multiple ascending dose study of ARCT-032 . For the LUNAR-OTC program, a type C meeting with the FDA is scheduled for the first half of 2026 to discuss plans for a proposed future pediatric study under the Rare Disease Evidence Principles (RDEP) . These programs target rare diseases with significant unmet medical needs, leveraging the company's LUNAR platform to deliver mRNA for functional protein replacement .

In the vaccine segment, the company continues to progress its collaboration with CSL Seqirus for mRNA vaccines against COVID-19, influenza, and three other infectious diseases . The approval and commercialization of KOSTAIVE® in Japan, Europe, and the UK provide validation for the STARR® and LUNAR® platforms . The BARDA-funded Phase 1 trial for the H5N1 pandemic flu candidate, ARCT-2304, showed a favorable tolerability and safety profile and induced a robust and durable humoral immune response in young and older adults, with Fast Track Designation granted by the FDA in April 2025 . The company is working diligently with BARDA and CSL Seqirus to clinically validate its low-dose STARR mRNA technology for H5N1 towards pandemic preparedness .

Operationally, the company expects payroll and benefits costs not to increase over the next twelve months . Expenses for early-stage programs and discovery technologies are expected to decrease as the focus shifts to later-stage programs . The company continues to invest in and improve its LUNAR lipid-mediated delivery of mRNA with continuous improvements in its mRNA and sa-mRNA platforms, alongside advancements in next-generation proprietary lipids to enhance targeting, efficacy, and safety profiles for both vaccine and therapeutic protein platforms . This includes exploratory platform development activities such as genome editing and new targeting approaches .

Planned capital allocation includes continued funding for the LUNAR-CF program in clinical trials, the ongoing Phase 2 trial of ARCT-810, and expenses incurred prior to customer payments under the CSL Collaboration Agreement and BARDA agreement . The company also plans for continued exploratory activities related to its platform and other general administrative activities . As of December 31, 2025, the company had unrestricted cash and cash equivalents of $230.9 million, which is expected to be sufficient to fund currently planned operations for at least the next 12 months, assuming no significant unforeseen expenses and continued funding from partners at anticipated levels . However, additional capital will be required to support long-term plans, obtain regulatory approval, and commercialize future product candidates .

Structural headwinds include the significant accounting write-down of approximately $430 million reported by CSL Limited in February 2026, attributable to the collaboration agreement with CSL Seqirus, citing declining COVID-19 disease burden and more onerous U.S. regulatory requirements . This indicates that CSL Seqirus no longer believes the collaboration assets will generate sufficiently probable, risk-adjusted economic benefits, potentially impacting the development and commercialization of licensed assets . The FDA's sudden changes to regulatory requirements for COVID-19 vaccines, requiring additional clinical endpoint efficacy study data, have indefinitely delayed the U.S. Biologics License Application (BLA) filing for KOSTAIVE® . This could substantially lower the overall commercial market for KOSTAIVE® in the U.S., the largest market for vaccines .

Risk Factors

The company faces material risks including its limited operating history and accumulated deficit of $514.6 million , with no revenue from product sales and only limited collaboration and grant revenue since inception . There is a high dependency on collaboration partners, particularly CSL Seqirus, whose recent $430 million accounting write-down related to the collaboration agreement signals potential adverse impacts on development and commercialization activities due to declining COVID-119 market and more onerous U.S. regulatory requirements . KOSTAIVE® may not have a profitable commercial market due to declining COVID-19 prevalence, increased competition, and regulatory hurdles, and despite approvals in Japan and Europe, meaningful sales in Japan have been weak and commercialization in Europe may never be achieved . The FDA's recent change in regulatory requirements for COVID-19 vaccines, demanding additional clinical endpoint efficacy study data, has indefinitely delayed the U.S. BLA filing for KOSTAIVE®, potentially limiting its market opportunity . The company operates in a highly competitive biotechnology and pharmaceutical industry, with many competitors possessing greater financial and scientific resources . There is a risk that preclinical and clinical studies of product candidates may not generate successful results or may experience significant delays, and the focus on relatively new nucleic acid and mRNA technologies carries inherent risks, where adverse industry-wide results could significantly impact the company's ability to commercialize products . Changes to drug product format, such as lyophilization, could add cost and delay approvals . Identifying and enrolling patients for rare disease clinical studies, such as OTC deficiency with an estimated 8,000 patients in the developed world, is challenging and could delay or prevent studies . Undesirable side effects from product candidates could halt clinical trials or lead to restrictive labeling or denial of regulatory approval . The company is subject to extensive and ongoing regulatory requirements post-approval, and failure to comply could result in severe penalties . Manufacturing issues, including impurities or scale-up challenges, could increase costs or delay commercialization . Market acceptance of any approved products is uncertain and depends on factors like clinical safety and efficacy, convenience, pricing, and payor reimbursement, which is particularly challenging for rare disease candidates requiring high-quantity dosing . The company relies on outside contractors for research, manufacturing, and clinical trials, and their unsatisfactory performance or delays could hinder product development . Intellectual property protection is critical, and the company faces risks of failing to obtain or maintain patents, claims of infringement from others in the crowded mRNA patent field, and potential loss of rights if license obligations are not met . Ongoing litigation, including a lawsuit alleging trade secret misappropriation and breach of contract, could result in substantial expenses, diversion of management attention, and adverse rulings . The company's U.S. Government contracts, such as with BARDA, are subject to termination for convenience, audits, and potential claims to intellectual property, which could adversely affect the business . Cybersecurity risks, including potential data breaches or system disruptions, could lead to fines, litigation, and loss of trade secrets . The use of artificial intelligence technologies may expose the company to operational, cybersecurity, legal, and reputational risks due to potential inaccuracies or unauthorized data input . Business interruptions from natural disasters or other events could delay product development . A prolonged U.S. federal government shutdown could materially and adversely affect business operations and legal proceedings by delaying regulatory reviews and court activities .

Management Priorities

Management emphasizes the company's position as a messenger RNA medicines company focused on rare disease therapeutics and infectious disease vaccines, leveraging its STARR® and LUNAR® platforms. They highlight the achievement of KOSTAIVE® as the world's first approved self-amplifying mRNA vaccine, with commercial sales initiated in Japan in October 2024 . A key strategic priority is the continued advancement of the internal pipeline, including the Phase 2 clinical studies for ARCT-032 in cystic fibrosis and ARCT-810 in ornithine transcarbamylase deficiency, with plans to initiate a 12-week safety and preliminary efficacy study for ARCT-032 in the first half of 2026 and a type C meeting with the FDA for ARCT-810 in the first half of 2026 . Management also underscores the ongoing collaboration with CSL Seqirus for mRNA vaccines and the progress of the BARDA-funded Phase 1 trial for the H5N1 pandemic flu candidate . Despite an accumulated deficit of $514.6 million and a reported $430 million accounting write-down by CSL Limited related to the collaboration , management believes current cash and cash equivalents of $230.9 million should be sufficient to fund planned operations for at least the next 12 months, assuming no significant unforeseen expenses and continued partner funding . However, they acknowledge the need for additional capital to support long-term plans and commercialization efforts .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 7, MD&A — Revenues
  3. [3] Item 7, MD&A — Revenues
  4. [4] Item 1, Business — Overview
  5. [5] Item 1, Business — Rare Disease Program - LUNAR-CF (Cystic Fibrosis)
  6. [6] Item 1, Business — Rare Disease Program - LUNAR-CF (Cystic Fibrosis)
  7. [7] Item 1, Business — Rare Disease Program - LUNAR-CF (Cystic Fibrosis)
  8. [8] Item 1, Business — Rare Disease Program – ARCT-810 (LUNAR-OTC)
  9. [9] Item 1, Business — Rare Disease Program – ARCT-810 (LUNAR-OTC)
  10. [10] Item 1, Business — Rare Disease Program – ARCT-810 (LUNAR-OTC)
  11. [11] Item 1, Business — Overview
  12. [12] Item 1, Business — Overview
  13. [13] Item 1, Business — Overview
  14. [14] Item 1, Business — Commercialization of KOSTAIVE in Japan
  15. [15] Item 1, Business — Overview
  16. [16] Item 7, MD&A — Revenues
  17. [17] Item 7, MD&A — Revenues
  18. [18] Item 7, MD&A — Revenues
  19. [19] Item 7, MD&A — Revenues
  20. [20] Item 7, MD&A — Revenues
  21. [21] Item 7, MD&A — Operating Expenses
  22. [22] Item 7, MD&A — Operating Expenses
  23. [23] Item 7, MD&A — Operating Expenses
  24. [24] Item 7, MD&A — General and Administrative Expenses
  25. [25] Item 8, Consolidated Statements of Operations and Comprehensive Loss
  26. [26] Item 8, Consolidated Statements of Operations and Comprehensive Loss
  27. [27] Item 7, MD&A — Operating Activities
  28. [28] Item 8, Consolidated Balance Sheets
  29. [29] Item 7, MD&A — Wells Fargo Credit Agreement
  30. [30] Item 8, Consolidated Balance Sheets
  31. [31] Item 7, MD&A — Liquidity and Capital Resources
  32. [32] Item 7, MD&A — Wells Fargo Credit Agreement
  33. [33] Item 3, Legal Proceedings
  34. [34] Item 3, Legal Proceedings
  35. [35] Item 7, MD&A — CSL Seqirus, Inc. Collaboration and License Agreement
  36. [36] Item 7, MD&A — Facilities and equipment
  37. [37] Item 1A, Risk Factors — RISKS RELATED TO OUR FINANCIAL CONDITION AND NEED FOR ADDITIONAL CAPITAL
  38. [38] Item 1A, Risk Factors — We have not generated any revenue from product sales, have generated only limited collaboration and grant revenue since inception, and may never be profitable in the long term.
  39. [39] Item 1A, Risk Factors — We expect that we will need to raise additional capital in the future, which may not be available on acceptable terms, or at all.
  40. [40] Item 1, Business — Rare Disease Program - LUNAR-CF (Cystic Fibrosis)
  41. [41] Item 1, Business — Rare Disease Program – ARCT-810 (LUNAR-OTC)
  42. [42] Item 1, Business — Rare Disease Program
  43. [43] Item 1, Business — Vaccine Programs
  44. [44] Item 1, Business — KOSTAIVE ® and COVID-19 Vaccine Program
  45. [45] Item 1, Business — Pandemic Avian Influenza Program (H5N1 Influenza)
  46. [46] Item 1, Business — Pandemic Avian Influenza Program (H5N1 Influenza)
  47. [47] Item 7, MD&A — Research and Development Expenses, net
  48. [48] Item 7, MD&A — Research and Development Expenses, net
  49. [49] Item 1, Business — LUNAR (Lipid-Mediated Delivery) Platform
  50. [50] Item 1, Business — LUNAR (Lipid-Mediated Delivery) Platform
  51. [51] Item 7, MD&A — General Financial Resources
  52. [52] Item 7, MD&A — General Financial Resources
  53. [53] Item 7, MD&A — Funding Requirements
  54. [54] Item 7, MD&A — Funding Requirements
  55. [55] Item 1, Business — Overview
  56. [56] Item 1A, Risk Factors — We are highly dependent upon our relationship with CSL Seqirus to further research, manufacture and commercialize self-amplifying mRNA vaccines against COVID-19, influenza and three other infectious diseases; CSL Seqirus has announced a significant write-down of the licensed collaboration programs.
  57. [57] Item 1, Business — KOSTAIVE BLA Submission
  58. [58] Item 1A, Risk Factors — KOSTAIVE only has marketing approval in Japan and Europe and may never achieve marketing approval in any other countries.
  59. [59] Item 1A, Risk Factors — We have a limited operating history, have incurred significant losses since our inception (with the exception of fiscal year 2022) and anticipate that we will continue to incur significant losses for the foreseeable future.
  60. [60] Item 1A, Risk Factors — We have not generated any revenue from product sales, have generated only limited collaboration and grant revenue since inception, and may never be profitable in the long term.
  61. [61] Item 1A, Risk Factors — We are highly dependent upon our relationship with CSL Seqirus to further research, manufacture and commercialize self-amplifying mRNA vaccines against COVID-19, influenza and three other infectious diseases; CSL Seqirus has announced a significant write-down of the licensed collaboration programs.
  62. [62] Item 1A, Risk Factors — KOSTAIVE might not have a profitable commercial market.
  63. [63] Item 1A, Risk Factors — KOSTAIVE only has marketing approval in Japan and Europe and may never achieve marketing approval in any other countries.
  64. [64] Item 1A, Risk Factors — We face significant competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively.
  65. [65] Item 1A, Risk Factors — If we are unable to generate successful results from preclinical and clinical studies of our product candidates, or experience significant delays in doing so, our business may be materially harmed.
  66. [66] Item 1A, Risk Factors — Changes to our drug product format could significantly impact our timeline to commercialize our products.
  67. [67] Item 1A, Risk Factors — We may find it difficult to identify and enroll patients in our clinical studies, and the limited number of patients who have the diseases for which certain of our product candidates are being studied could delay or prevent clinical studies of certain of our product candidates.
  68. [68] Item 1A, Risk Factors — If any of our product candidates cause undesirable side effects or have other properties impacting safety, approvals to proceed with further clinical trials may be denied or delayed and regulatory approval could be prevented, delayed or limited.
  69. [69] Item 1A, Risk Factors — Even if we obtain regulatory approval for a product candidate, we will still face extensive regulatory requirements and our products may face future development and regulatory difficulties.
  70. [70] Item 1A, Risk Factors — Manufacturing issues may arise that could increase product and regulatory approval costs or delay or hinder commercialization.
  71. [71] Item 1A, Risk Factors — The commercial success of our product candidates will depend in part upon the acceptance of our product candidates by the medical community, including physicians, patients and healthcare payors.
  72. [72] Item 1A, Risk Factors — If the outside contractors we rely on to conduct some aspects of our compound formulation, research and studies do not perform satisfactorily and meet deadlines, development of our product candidates could be delayed or precluded.
  73. [73] Item 1A, Risk Factors — If we are unable to obtain or protect intellectual property rights related to our products and product candidates, we may not be able to compete effectively in our markets.
  74. [74] Item 1A, Risk Factors — We have filed a lawsuit alleging trade secret misappropriation and breach of contract, and any unfavorable outcome or related proceedings could materially and adversely affect our business, financial condition, results of operations, and reputation.
  75. [75] Item 1A, Risk Factors — U.S. Government agencies have special contracting authority that gives them the ability to terminate and/or modify their contracts with us.
  76. [76] Item 1A, Risk Factors — Cyber security risks and the failure to maintain the confidentiality, integrity, and availability of our computer hardware, software, and Internet applications and related tools and functions could result in damage to our reputation and/or subject us to costs, fines or lawsuits.
  77. [77] Item 1A, Risk Factors — Our use of artificial intelligence technologies may expose us to operational, cybersecurity, legal and reputational risks.
  78. [78] Item 1A, Risk Factors — Business interruptions could delay us in the process of developing our future products.
  79. [79] Item 1A, Risk Factors — A prolonged U.S. federal government shutdown could materially and adversely affect our business, operations, and legal proceedings.
  80. [80] Item 7, MD&A — Overview
  81. [81] Item 7, MD&A — Overview
  82. [82] Item 7, MD&A — Overview
  83. [83] Item 7, MD&A — Overview
  84. [84] Item 7, MD&A — Overview
  85. [85] Item 7, MD&A — Liquidity and Capital Resources
  86. [86] Item 7, MD&A — Funding Requirements
  87. [87] Item 7, MD&A — Funding Requirements

Analysis on 5/22/2026