Arcturus Therapeutics Q4 2025 Earnings Call - Kicking off a 12-week CF Phase 2 as OTC moves to Type C regulatory clarity

Operator: Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press star zero and a member of our team will be happy to help you. Hello, welcome everyone joining today’s Arcturus Therapeutics fourth quarter and fiscal year 2025 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star one on your telephone keypad. Please note this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Neda Safarzadeh, Vice President, Head of Investor Relations, Public Relations, and Marketing. Please go ahead.

Neda Safarzadeh, Vice President, Head of Investor Relations, Public Relations, and Marketing, Arcturus Therapeutics: Thank you, operator. Good afternoon, welcome to Arcturus Therapeutics quarterly financial update and pipeline progress call. Today’s call will be led by Joe Payne, our President and CEO, and Dr. Alan Cohen, our Chief Medical Officer. Dr. Pad Chivukula, 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. 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 differ materially from those expressed or implied by the statement.

Please see the forward-looking statement disclaimer on the company’s press release issued earlier today, as well as the Risk Factors section in our most recent Form 10-K and in subsequent filings with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made. Arcturus specifically disclaims any obligation to update such statements. With that, I will now turn the call over to Joe.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thank you, Neda. It’s good to be with you again, everybody. I will begin today with an update on our ARCT-032 and ARCT-810 programs. These are the messenger RNA therapeutic candidates for cystic fibrosis and ornithine transcarbamylase deficiency, respectively. ARCT-032 phase 2 trial is progressing with higher dose testing at 15 milligrams in 4 Class 1 CF adults, which showed no safety concerns. The upcoming multi-month study will enroll patients in the U.S. and internationally and is designed to evaluate safety as well as look for early signs of clinical benefit, including improvements in lung function and quality of life. We are well on track to initiate dosing for this phase 2 12-week study in the first half of this year and look forward to generating potentially meaningful clinical data for our CF program in 2026. ARCT-810 continues to advance toward pivotal development.

We plan to study both adults with late-onset OTC deficiency and young children with the most severe forms. Type C regulatory meetings are scheduled during the first half of 2026 and are intended to provide clarity regarding our next steps in clinical development for our flagship rare liver disease program. I will now provide regulatory updates to our partnered COVID-19 vaccine program, also known as KOSTAIVE, where in January 2026, the UK Medicines and Healthcare Products Regulatory Agency, or MHRA, granted approval for KOSTAIVE, a self-amplifying mRNA COVID-19 vaccine for use in individuals aged 18 and older. Moving to ARCT-2304. This is our next generation STARR vaccine candidate for pandemic A/H5N1 influenza. This program is contracted with and funded by BARDA. We completed a phase 1 study in 212 young adults and 80 older adults.

Recent 8-month follow-up data after the initial vaccination showed that all three dose levels, 1.5, and 12 micrograms, generated a durable immune response. The results also reinforced the sa-mRNA platform’s ability to drive meaningful cell-mediated immunity. Across all tested doses, the vaccine was well-tolerated with no safety concerns reported. The data further validates our STARR sa-mRNA platform. Briefly, our lawsuit against AbbVie and Capstan Therapeutics, filed on September 23, 2025, remains ongoing. With that, I’ll now pass the call to Alan.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: Thank you, Joe. It’s certainly good to be here with all of you today. I’ll begin with an update of our ARCT-032 program. This is our mRNA therapeutic candidate for cystic fibrosis or CF pulmonary disease. ARCT-032 utilizes Arcturus’ LUNAR lipid-mediated aerosolized platform to deliver CFTR mRNA 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 responsible for the progressive lung disease and associated morbidity and mortality experienced by people with CF. We remain on track to initiate the dosing phase of our 12-week phase 2 clinical study in the first half of 2026. We recently completed once-daily dosing of 15 milligrams of ARCT-032 over 28 days in the third dosing cohort.

This cohort included four CF adults with Class 1 null mutations, importantly, we observed no safety or tolerability concerns at this higher dose. Based on these encouraging data, the Independent Safety Review Committee permitted us to move forward with a phase 2 study that will evaluate ARCT-032 over a 12-week period instead of just 4 weeks. We will include 2 functional pulmonary measures, spirometry, as measured by % predicted FEV1, as well as LCI, or Lung Clearance Index, as measured by Multiple Breath Washout. We will also include 2 quality-of-life measures, the CFQ-R and the EQ-5D-5L, as well as serial high-resolution CT testing to examine changes in airway wall thickness, air trapping, and mucus plugging scores. The 12-week study intends to enroll up to 20 participants with Class 1 CF mutations from clinical sites in the U.S. and abroad.

The goal of this upcoming 12-week study is to establish a clearer picture of longer-term safety, 12 weeks versus 4 weeks, and begin to more comprehensively explore early signals of clinical efficacy, including how the CF participants feel and function. Moving on to the ARCT-810 program. This is our messenger RNA therapeutic candidate for Ornithine transcarbamylase, or OTC deficiency. We look forward to aligning with regulators on our clinical development strategy for the OTC deficiency program. We are moving to broaden our development strategy to serve both adults in late onset disease and young children with the most severe forms of OTC deficiency. These are the patients who typically rely on liver transplantation for survival beyond early childhood. We continue active regulatory engagement to support pivotal trial designs across these two distinct populations.

Our Type C regulatory meetings with the health authorities, along with their feedback, remain on track for the first half of 2026. We expect these interactions to help clarify our clinical development strategy for both adult and pediatric indications. Currently, we are very pleased with the momentum across both the CF and OTC deficiency programs and look forward to updating you as we progress throughout the year. I’ll now pass the call back to Joe.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thanks, Alan. We indeed look forward to initiating enrollment in our 12-week CF study and gain clarity and alignment with regulatory agencies for the next stages of development for ARCT-810. With respect to Arcturus’ financial position, we issued a press release earlier today which includes financial statements for the fourth quarter and fiscal year ending December 31, 2025, and provided a summary and analysis of year-over-year performance. Please also refer to our most recent Form 10-K for more details on financial performance. Year-over-year, annual and quarterly revenue decreased $70.3 million and $15.6 million, respectively. These declines were driven by reductions in revenue from our CSL collaboration, reflecting lower supply agreement activity and a reduced number of development-based milestone achievements as KOSTAIVE was commercialized.

Annual and quarterly research and development expenses also decreased year over year by $83.0 million and $19.3 million, respectively, which was primarily driven by lower manufacturing and clinical costs related to the LUNAR-COV19 program, reflecting the program’s transition from a development program to the commercial phase. Additional decreases relate to lower manufacturing for our LUNAR-CF and LUNAR-FLU programs, as well as lower clinical costs for our LUNAR-OTC program as we wrap up clinical activities. Clinical costs for phase 2 of our LUNAR-CF program partially offset these reductions as we remain focused on this clinical study. General and administrative expenses decreased annually year over year by $6.7 million due to reduced expenses for payroll and benefits as well as share-based compensation.

Quarterly general and administrative expenses increased year-over-year by $1.6 million due to an acceleration of employee stock options. Overall, we expect general and administrative expenses to continue to decrease during the next 12 months, driven by lower share-based compensation expense. Cash equivalents and restricted cash were $232.8 million as of December 31, 2025, and $293.9 million on December 31, 2024. Through disciplined execution and a strategic refocus on existing rare disease clinical programs in fiscal year 2025, Arcturus has extended our cash runway into the second quarter of 2028. 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. With that, let’s turn the time over to the operator for questions.

Operator: Thank you. If you’d like to ask a question, press STARR one on your keypad. To leave the queue at any time, press STARR two. Once again, that is STARR one to ask a question. Thank you. Our first question comes from Yasmeen Rahimi with Piper Sandler. Your line is open.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics4: Good afternoon, team. Thank you so much for the prepared remarks. Would love to understand, as you guys are gonna be kicking off the 12-week phase II study, I think you guys have spent a lot of time thinking about optimization for the study from dose selection to baseline measurements to patient selection. Maybe help us walk us through some of the optimizations that were included versus the initial study that was conducted in the fall. That would be really helpful to go through. Also, I know you work with the CF Foundation. Help us understand if you had a chance to work with them to warehouse a number of patients so as soon as you kick off the study, you could enroll quickly the patients for it. With that, I’ll jump back into the queue.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah. Thanks, Yas. I appreciate the questions as always. With respect to how the 12-week study that we’re initiating here soon is different from the 4-week study, we have Alan on the line. He’ll highlight some of those differences so that the investors out there can understand.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: Sure. No problem. Thanks, Joe. Great question. First things first, one of the main fundamental differences between the study that we’ve done with dose ranging from cohorts 1 through 3 is that cohort 4 is really going to be designed somewhat differently with the intent on it being more reproducible and stable, particularly as it relates to spirometric measures. We’re setting parameters, we will not be enrolling a CF patient until they’re stable with respect to baseline lung function measures, and this should allow us to observe true clinical signals by enhancing the noise to signal ratio. In addition, we are gonna be including Lung Clearance Index using MBW, which is not subject to variability issues that is sometimes seen in spirometry.

That’s why LCI has really been used and preferred in children because of its ability to be reproducible and not patient or performance dependent. In addition, we’re going to be looking over a 12-week period instead of just simply 4 weeks with the general thinking that the longer period of time will allow the drug that we’re studying to manifest clinical benefits in the airway. Lastly, we are including not just LCI in using MBW and percent predicted FEV1 spirometry, but 2 additional quality of life measures, the CFQ-R and the EQ-5D-5L. 2 shots on goal for both pulmonary functions and quality of life in addition to the HRCT studies reproducibly that we have used in the past and shown early signals of success. Hopefully, that should be helpful to you.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics4: Thank you, Alan.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: We do continue to strengthen our relationship with the CF Foundation. They’re keenly aware of the modulator non-responders in their community, both here in the U.S. and abroad. We work closely with them. In fact, the TDN themselves permitted our study to proceed after reviewing the first 3 cohorts of data into this fourth cohort, into this 12-week study. They’re closely involved and engaged. Thank you.

Operator: We’ll move next to Pete Stavropoulos with Cantor Fitzgerald. Your line is open.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics0: Yeah. Hi, Joe, Alan, and team. Nice to see the progress. You know, you mentioned LCI for CF. Can you know, talk a little bit about this test, you know, sort of how sensitive is it? I think you mentioned it’s not variable. Do you expect multiple readings at baseline? Importantly, you know, does it correlate with other endpoints you plan to use? Is it reliable at all stages of disease, say, early versus late or equally sensitive? If so, you know, how will that impact your enrollment criteria for the phase 2?

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Oh, it’s a great question, Pete. Yeah, LCI is definitely another lung function measurement that we’re data that we’re collecting in this 12-week study. It’s definitely more sensitive. Alan, perhaps you can discuss about the multiple readings and how well it correlates and how reliable it is.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: Sure. Of course. A great question. Thank you for asking about this. LCI, as I mentioned, doesn’t have the subject variability issues of spirometry, although, as we all know, spirometry has been a more traditional endpoint measure for most pulmonary Pulmonary drugs that have been approved both in the United States and abroad. That’s really why LCI historically in CF has been used in children who can’t always perform spirometry reproducible. It’s a much more passive maneuver requiring just normal tidal breathing, so comfortable breathing in and out. As a result, it’s a reproducible measure, for more importantly, the most early and more subtle changes in the smallest airways.

Why we’re focusing on LCI in addition to spirometry is not just its ability to be reproducible, but it also is measuring another component of the airway that we believe we can have more discernible benefit for earlier and in a smaller number of subjects. Spirometry measures can change slightly as well in these larger airways, and these are more central airways, but it does require a more active engagement to be sufficiently reproducible. That’s why I was alluding earlier to the controls that we’re putting into this study as to making sure that a patient has reproducibility in screening and baseline before going into drug dosing so that we have a more accurate, reproducible baseline with which to compare subsequent changes over the 12-week course of the study.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics0: All right. Thank you for that. Also just a question on the OTC program. You know, as you’re having your discussions with regulatory authorities, you know, about a registrational trial, how has their reception been for certain biomarkers and assays, you know, like ureogenesis function using the nitrogen-15 isotope or any other biomarker they may be less familiar with? You know, what’s sort of the base case outcome for a study design?

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Those are all great questions, that’s currently where we are. We’re actively engaged in preparing for these Type C meetings in the next few months. We’re going to be in a much better position to answer those with granularity and specificity. That’s exactly what we’re currently engaged with the FDA on, is the future study approaches, the design, the size, the scope of the study, understanding what they would like to see before we can proceed further into the clinical development. We’ll have that regulatory clarity shortly. That’s our intent. That’s our aim. They’re all good questions, we’ll be in a better position to answer those in a few months.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics0: All right. Thank you very much, and, congrats on the quarter and the progress.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah. Thanks, Pete.

Operator: We’ll move next to Seamus Fernandez with Guggenheim Securities. Your line is open.

Evan Wang, Analyst, Guggenheim Securities: Hi, guys. This is Evan Wang on for Seamus Fernandez. Just a few from us. Looking forward to the start of the 12-week CF study. Just wanted to clarify. It sounds like dosing is proceeding at the 15 mg dose cohort. Just curious what drove the decision to proceed with the 15 mg dose over 10. Was there any evidence of dose response on any of the lung function measures or CT scans? Second, in terms of the planned enrollment for CF, you mentioned both US and international recruitment. Just curious how you’re thinking about maybe the split between US and abroad. Thanks.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: A couple good questions. First of all, a point of clarification, just so it’s not misunderstood. We have achieved safety and tolerability data for the 15-milligram level, but we’re actually initiating our fourth cohort at the 10-milligram level. We were fortunate to see early efficacy, some early clinical, some early clinical signals in our smaller cohorts at 10 milligrams. We’re gonna continue that and see if we can see improvements as we extend the study in larger numbers. With respect to the plan to enroll in the U.S. and we are enrolling internationally, including Europe and the Middle East, but Alan can maybe share some of the strategies as to why we’re expanding our enrollment in other countries.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: Sure. Thank you, Joe, and a great question. The plan right now, we’ve actually expanded our U.S. sites, so we have additional U.S. sites ready to go for the cohort 4 study, which we will be initiating shortly. Have added, as Joe mentioned, European as well as Middle Eastern sites. The intent there is to really go into parts of the world where there is a higher preponderance of null or Type 1 CF genetic mutants, so that there is a larger percentage within those populations. It should yield a greater likelihood of identifying, engaging, and enrolling patients in a much more timely manner over the course of the calendar year.

Evan Wang, Analyst, Guggenheim Securities: One follow-up from me then. Between the 15 and 10 mg dose, because you mentioned improvements at the 10 mg, anything you can share in terms of the responder rate at the 15 mg relative to the 10? Did you see a response on FEV or CT scan there? I guess in terms of similar to the chart how you presented the earlier data. Thanks.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: No. Yes. We’ve completed the dosing phase for the third cohort at 15 milligrams, and we’ve collected sufficient safety and tolerability data to share with the Safety Review Committee to allow us to permit, you know, to permit us to proceed into the 12-week study. With respect to the other data, that data collection process is ongoing, and that’s where we are. What was significant it was to allow us to proceed into the fourth cohort.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: Got it. Thank you.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thanks, Evan.

Operator: We’ll move next to Lili Nsongo with Leerink Partners. Your line is open.

Lili Nsongo, Analyst, Leerink Partners: Hi. Good afternoon. Thank you for taking my question. 2 questions for me. The first one on the CF program. Thinking about, again, moving on to the 12-week study, what was the rationale to stop at 15 milligrams given that you haven’t seen any safety signal? Would there be enough design flexibility to potentially increase the dosing as you accumulate data? I have a follow-up question on the OTC program.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yes, we definitely have the flexibility to increase dosing, and we’re very happy that we already have the ability to increase to 15 milligrams if necessary. Just to maybe reiterate that 10 milligrams showed early signs of working in the second cohort, so we’re simply extending the duration of that treatment in a larger cohort, and we’re now pleased that we have the flexibility to increase dosing to 15 milligrams if needed. It’s unlikely that we will need to increase dosing even further, but we would have flexibility to do so if needed. We did dose up to 27 milligrams in our early trials in human volunteers, so there is some headroom there to expand further, but we feel confident in the dose that we’ve selected at 10 to start this fourth cohort.

Lili Nsongo, Analyst, Leerink Partners: Great. Thank you. Maybe just a follow-up. For the OTC program, do you expect a bifurcated regulatory path for both the pediatric and then the more adult patient population?

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah. I think that’s safe to assume that the younger children will be treated differently than the older, stable adult population simply because the need is far more severe in younger children. It’s a different population. Anything to add to that, Alan?

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: Yeah. I mean, in many ways, I think where we are with the program and important to note that since there are survivors within OTC deficiency into adulthood, even though it’s vastly different in terms of the medical complexity and the ability to be functional without needing a liver transplant, we were able to show up to this point safety tolerability, and we believe early signs and signals of efficacy.

In our discussions with the FDA on looking at a younger population where survival tends to be quite bleak beyond preschool and school age, the intent there is to really see if we can leverage the most recent guidances that the FDA has shared about their willingness to look into ultra-rare populations with severe outcomes and their willingness to give more latitude and flexibility in terms of how one conducts those studies, as long as there’s sufficient safety and tolerability and obviously, efficacy. We’re encouraged by the early conversations that we’re having with the agency right now, and we’ll continue to pursue those to the benefit of the OTC deficiency community.

Lili Nsongo, Analyst, Leerink Partners: Great. Thank you for the added color.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thanks, Lily.

Operator: We’ll move next to Yanan Zhu with Wells Fargo. Your line is open.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics3: Great. Thanks for taking our questions. Maybe first on the CF program. I think you mentioned one effort in cohort 4 is to obtain stable baseline. Remind us why, you know, that’s important. How are you going to go about and do that? Also curious, during the 3-month trial period, could it be possible that patient had a stable baseline, but for some reason, their reading could, you know, begin to fluctuate or drift after having had that stable baseline within a 3-month period? Thank you.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thanks, Yanan. Yeah, cohort four is definitely different with respect to the first three cohorts and that we’ve designed it with a stronger baseline. Alan, maybe you can comment further there.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: Yeah. What we’ve done here, it’s a great question. you know, as best as we can, one should realize that because of the complexity of the lung disease and the impact that it has in the various segments of the lung at any given time, what we’re looking for at baseline with these adult patients with CF is at least enough reproducibility and as small a possible variability within the period of time that we screen to baseline to get them enrolled, that we believe that we have an as accurate a representation of where they are at that moment in time as far as their lung disease is advancing and progressing.

It’s not unexpected in the course of a 3 or 6-month period that many of these patients may have an acute pulmonary exacerbation or an acute illness, and we’re prepared to handle that. What we wanted to try to mitigate and deal with was the variability that is seen not uncommonly in patients with COPD, cystic fibrosis, asthma, et cetera, particularly those who are vulnerable and chronically infected with pathogens. We’re really tightening up the enrollment criteria. We’re setting parameters, and that’s why we believe it... We’re just looking to make sure that it’s reproducible and stable at that baseline. We’re not gonna be enrolling CF patients that may be in the early throes of a pulmonary exacerbation or an acute illness. Sometimes just even modest changes can be an early signal for that.

We want to enhance the noise to signal ratio. Once again, one more thing to think about. Unlike Lung Clearance Index, spirometry really does require a consistent study subject performance. It’s not a passive maneuver. Anything that we can do to make sure that a patient coming into our study has a representative baseline is really what we’re trying to achieve here.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics3: Great. That’s super helpful. Two more questions, if I may. On the OTC deficiency regulatory interaction front, could you lay out for us, to you and to the principal investigators, what would be considered a exciting outcome with regard to the alignment and what perhaps also what might be the base case scenario for the alignment? Lastly, wondering if you have any update on the COVID-19 vaccine initiatives between you and CSL. Thank you.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah, I can take those questions, Yanan. We’re definitely working with the FDA to establish care, clarity, right? That’s the main objective. As investors are, you know, looking at, what are we trying to achieve with these Type C meetings, it’s clarity. We want a clear path forward to helping both the children in need with high unmet medical need, of more severe disease and the stable adults, right? We’re presenting our case. We’re presenting our data and basically looking to have clarity in the path forward. Anything to add there before I comment on CSL, Alan Cohen?

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: No. you know, obviously in these patients, the goals and objectives for the children is quite different because of the severity and nature and labile nature of the disease in children, as opposed to the much more stable adults. Even with current standards of care, you know, the goals and objectives of a pediatric program would be to try to mitigate as best we can the damaging neurological and developmental issues that they contend and deal with on a daily basis just by having OTC deficiency despite the fact that there are now therapies like ammonia-binding agents and abilities to control diet.

Success for us would be, as Joe said, a clear path forward with agreed endpoints and goals and objectives that are not only attainable but are potable and acceptable to the families and patients, as well as the caregivers and their current standards of care.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: The detail. The details of that, we’ll be able to provide that granularity in a couple of months, but appreciate the question. With respect to your CSL related question in KOSTAIVE, yes, we definitely made some progress for the KOSTAIVE asset and for the platform in the United Kingdom. It was good to see that we advanced KOSTAIVE to the point of approval and licensure in the United Kingdom. The present administration here domestically has made it challenging to progress KOSTAIVE to licensure or approval in the near term here in the U.S. Because of this, and understandably, CSL and Arcturus are in active discussions regarding our collaboration, and we’re gonna be able to provide more color on that in the coming months.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics3: Great. Thanks for all the color.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thanks.

Operator: We’ll take our next question from Myles Minter with William Blair. Your line is open.

Myles Minter, Analyst, William Blair: Hey, thanks, guys, for the questions. First one’s just on the fact that I think you’re deciding between the 10 mig and the 15 mig dose for the ARCT-032 phase 2 trial. I think you’re waiting on 15 mig efficacy data. You’ve got the safety and tolerability, obviously.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah.

Myles Minter, Analyst, William Blair: I’m trying to understand what the puts and takes are for selecting dose moving forward. Like, if you did get this efficacy data in for the 15 migs and it looked fine, but you have more data in 10 migs, like which dose or would you take both doses forward? I’m trying to understand your logic.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah.

Myles Minter, Analyst, William Blair: between keeping both.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Sure. It’s relatively straightforward in that 10 milligrams showed early signs of working in the second cohort. We’re simply extending the duration of treatment into a larger cohort and extending that duration. We now have the flexibility to increase the dose. That’s what this means. And only if needed. There’s many that are suggesting that efficacy is achieved through simple duration by extending the treatment, and we’re gonna prove that. At some point, because it’s an open label study, if we feel we need to increase the dose, we can. I also remind folks that it’s a fairly pricey product to manufacture. If we can keep cost of goods down, that’s also a good benefit by keeping the dose down around 10 milligrams as well.

It’s simply based on data that at 10 milligrams we saw progress. We think we’re gonna extend the duration and the size of the study to see if it works in that context, in the fourth cohort. We now have the flexibility to increase the dose if needed.

Myles Minter, Analyst, William Blair: Cool. Thanks.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thanks, Myles.

Operator: We’ll take our next question from Adam Walsh with Roth Capital. Your line is open.

Adam Walsh, Analyst, Roth Capital: Hi, good afternoon. Thanks for taking my questions. The first on 032, the CF product. You’ve talked about the first week in your clinical trials or two of being an onboarding phase where the drug is sort of getting through the congested airways. In a 12-week study, you’d have roughly 10 productive weeks versus maybe two or three in the 28-day study. How should we think about that from an extra exposure time, as it relates to FEV1 and mucus clearance versus what we maybe saw at 28 days? Thank you.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah. Adam, that’s a thoughtful question, and you’re absolutely right. We view that in our 28-day study, we observed consistently that there was a 1-2-week onboarding phase. In reality there’s really only a 2-week healing phase for that 28-day study. As we go to the 12 weeks study, assuming a similar onboarding rate of 1-2 weeks, you have 10 full weeks of potential healing and efficacy reads. It’s a difference between 2 and 10 weeks. From that perspective it is a significant improvement. If you look at the study as a whole, we’re going from 4 weeks to 12 weeks, it’s a 3-fold difference. That’s also a significant bump.

Your observation is sound, and we agree with you that, it’s not only 3-folding the time of the study, but increasing the duration of potential healing and efficacy with this 12-week study.

Adam Walsh, Analyst, Roth Capital: Thanks. If I could, one on ARCT-810 for OTC deficiency. phase 2 patients stayed on standard of care. To my knowledge, we haven’t seen whether patients can actually reduce scavengers or loosen dietary restrictions on ARCT-810. Is that something you plan to build into the pivotal? How important do you think, that kind of functional clinical data will be for the approval conversations versus, the biomarker package alone? Thank you.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Hey, that exact question is in the agenda of our Type C meetings this year. For both the children early onset and also with the stable adult population. It’s the right question. We’ll be able to provide the answer to that question in more detail in a couple of months after our Type C meetings are completed and we’ve received their feedback.

Adam Walsh, Analyst, Roth Capital: Thank you.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thanks, Adam.

Operator: We’ll take our next question from Whitney Ijem with Canaccord. Your line is open.

Angela, Analyst, Canaccord: Hi guys. Thank you for taking our questions. This is Angela on for Whitney. Maybe just to follow up on the CF program again. Understand you’re progressing with the 10 milligrams for the 12-week study, but are you still looking at efficacy in the 15 milligrams cohort? I guess like what efficacy endpoints are you looking at? Will you be sharing that data at some point, either in a PR or at a medical conference? The second part is, would it be possible that you would run another 12-week study using the 15 milligrams? Or when you talk about the optionality to dose up, was that part of the current 10 milligram study? If you could clarify. Thank you.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah. It’s unlikely that we’ll be sharing any more data from the first 3 cohorts. We are focused on the fourth cohort. This almost like a phase 2B type study, where we believe that our best shot on goal here is in a 12-week duration, N of 20 study, and that’s where we’re focusing on. I think that’s where the investors should also be focused on. You’ve asked, are we collecting data for 15 milligrams? Absolutely. Is there a time and a place to share that data? Yeah, very likely. We remain focused on the 12-week study is the short answer to your question.

Angela, Analyst, Canaccord: Got it. Then will you potentially be dosing up to 15 milligrams in the 12-week study, or would that be a separate study?

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Only if needed. It’s an open label study. We have the flexibility to do it based upon what’s happened in the third cohort, which is great. We still haven’t collected all the data, of course, and that additional data could sway our minds either direction. Right now, we’re initiating the fourth cohort at the 10 milligram dose level, and we have the flexibility now to increase it if needed.

Angela, Analyst, Canaccord: Great. Thank you.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thank you, Angela.

Operator: We’ll take our next question from Yigal Nochomovitz with Citi. Your line is open.

Jiwon Kim, Analyst, Citi: Hey, guys. This is Jiwon Kim on for Yigal Nochomovitz. Thanks so much for taking our question. I kind of have a multi-part question. I believe in the phase 1B, you had also assessed LCI. Can you remind us what you had seen previously on the LCI? How should we be thinking about the level of improvement expected in the phase 2B? As you were headed into the dose ranging phase 2, did the FDA get a chance to look at the LCI data by any chance?

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah. You’re correct that we did look at LCI in the early phase 1 studies. Those phase 1 was in healthy adults. Phase 1B was in CF participants, and we established safety and tolerability that was sufficient to advance it. LCI was only after a single administration or 2 administrations in phase 1B. I’ll defer to Alan in terms of that data from phase 1B. With respect to LCI as an endpoint, I think I’ll also defer to Alan. He can talk about what the literature shows or the magnitudes of changes in LCI to get approval previously in children, et cetera. Go ahead, Alan.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: Sure. No, no problem at all. It’s a great question. I wasn’t around historically when the early experience with our study drug in those first few cohorts going from healthy to CF adults were ongoing, but I have had a chance to review the data. You know, the challenge of it is, once again, it was small numbers of patients. In the way we’re constructing things now, the plan is to benefit from that prior experience and perhaps do it in a more refined way. Right now, we also have the support of the CF Foundation, who is doing a natural history study.

Being able to align with the CF Foundation and the Therapeutics Development Network on their prospective study that they’re doing right now in patients with no mutations and those who are unable to tolerate current modulators allows us to align a study in a way so that when that natural history study becomes available in the coming months and year, that we can have access to that as a comparator group, which was something that was not available just a few years ago. The other piece about this, I think, is that there’s increasingly a recognition of not only the sensitivity and the value of LCI measures in adults, but an appreciation for what may be the range and magnitude of change one needs to see in order for there to be an appreciation for a significant, meaningful change over time.

Right now, I think we’re doing the study in a manner that should optimize its utility and value, and we’re also doing it in an alignment and way that should be commensurate with current standards and practices, which was certainly done before, but just not done as robustly and as long-term. Really, I think in this case, just like with percent-predicted FEV1 in spirometry, we will be benefiting from a cohort of upwards to 20 patients and an examination of data not just over a four-week period, but a 12-week period. Both of those elements, in addition to having more normative data to compare to in this exact population, should make interpretation and value of this data much greater than it was previously appreciated. Hopefully, that’s helpful to you.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yes. Thank you very much. Appreciate it.

Operator: We’ll move next to Thomas Shrader with BTIG. Your line is open.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics1: Good afternoon. Thanks for all the updates. There’s been a lot of questions. I assume you’ve been looking at a lot of pictures of mucus plugs with your data. Do you have a sense of what fraction of patients show a measurable difference? Is it very all over the place, all over the lung? Do you have any patients where it’s possible to calculate that in 12 weeks, the mucus plug should be gone? Do you have that level of data? I have a quick vaccine follow-up.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Well, we saw four out of six subjects in the second cohort, that was a 10-milligram cohort that showed a reduction of mucus plugs after just 28 days. So that was definitely encouraging. There was one subject that attributed the increase in mucus plugs to humidity and a sensitivity to humidity. Whether that’s an outlier or whether that’s simply a non-responder, we will learn as we collect more data, especially in this extended study that’s larger. It seems that a majority of these subjects respond with a reduction in mucus plugs, and we feel that that’s important to mention, and that’s an early sign of, you know, some clinical activity. With respect to your other question, maybe you could restate it and we can turn that over to Alan.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics1: Just a sense. You would have had some sense of rates of clearance. Do you have confidence that 12 weeks is enough, or is that more just the next trial you’re allowed to do?

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: That’s, that’s the big question. Clearly, we saw something in 28 days, so there’s reason to be confident that we’ll see it in an extended study, larger study. It’s not just a larger extended study, but, you know, we’re looking at a better study, a study that’s designed more tightly with respect to numbers and baseline steadiness. Anything to add, Alan?

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: Yeah. Yeah. I was gonna say, you know, the field of using high-resolution CT as a complementary way of assessing progression of disease has been used for some time. I think the technologies, particularly artificial intelligence and an ability to standardize the reads now is vastly different and in many ways, much better than it was as recently as just a few years ago. I think the field is emerging. I would be, I just wanna make sure that it’s understood that, you know, the time constants and the damage that occurs in the lungs of people with cystic fibrosis is really quite patchy.

What’s remarkable, I’m a former lung transplant physician from Washington University, and I’m one of the few people that has had the chance to actually examine the lungs of people who underwent a lung transplant and sustained significant bronchiectasis damage to the point of needing a lung transplant to survive. What’s impressive about the disease is the very patchy nature, both in the upper and lower lobes. You could have a completely bronchiectasis destroyed segment of lung right next to a completely normal-appearing functional segment of a lung. I believe that a drug that’s administered by inhalation over long periods of time will eventually have the ability, in large part, to reach many, if not all, of the segments that we need to.

I have no delusion as to whether or not there will be a consistent, almost a vacuuming of the lungs and an ability to remove and diminish mucus plugging. I think the time constants, the ventilation perfusion matching, and just the nature of what’s going on actively day-to-day with infections, will really always make this challenging. Even mucolytic drugs like Pulmozyme, even in patients who are using those drugs one or more times a day, will still be found to have significant mucus plugging in certain segments of the lung in any given time, and it will change from period to period, from X-ray to X-ray. The goal here is, I think, the long term.

It’s the totality of what we’re able to observe. The plan is to be able to correlate those improvements with things like Lung Clearance Index, which clearly have, and someone was alluding to this in their question earlier, that’s one of the measures that we believe since we’ve already shown improvements in high-resolution CT scan mucus plug burden, it wouldn’t be surprising to see and observe changes in Lung Clearance Index commensurate with that, since those two measures actually go hand in hand. Hopefully that’s helpful to you.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics1: No, that’s great, very useful. Just a quick follow-up. On your pandemic flu vaccines, you haven’t said a lot, but is your safety just qualitatively in line with a protein vaccine, or does it look more like an MR-mRNA vaccine? Do you have any sense of-

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah, very similar.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics1: How safe things are gonna look?

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Very similar. With respect to safety and tolerability, the safety and tolerability profile was similar to other vaccine technologies. We are a lower dose technology to conventional mRNA. What we’ve seen consistently is any dose-related toxicologies will be beneficial to the self-amplifying mRNA tech from Arcturus. In general, it’s simply similar to other vaccine technologies from a safety and tolerability.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics1: Okay, thanks.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah.

Operator: We’ll move next to Yale Jen with Laidlaw & Company. Your line is open.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics2: Good afternoon, and thanks for taking the questions. In terms of the CF, next, 12-week study, you’re looking for a more stable baseline, would that increase the time and the size for the screening for the study? How long duration to define as a more stable baseline before you treat it before the patient will be eligible for the study? Then I have a follow-up.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Yeah, we’re definitely not enrolling a patient until they are stable with respect to the baseline lung function measures. The duration of that stability time, do you wanna comment on that, Alan?

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics: Yeah, I mean, it, you know, there’s. This is a great question, and it’s not a simple answer, so let me see if I can give as appropriate an answer as possible. The challenge with CF patients is that there’s actively chronically something going on in any given day.

I think the biggest challenge in trying to identify and enroll patients into a study like ours, where, you know, you’re looking for modest improvements over, in the case of our study’s first 3 cohorts, over a 4-week period, to now a much larger group of patients over now a 12-week period, we do wanna make sure that we’re not just identifying the right patients, but we’re also catching them at a time in the course of their disease where they’re at least stable enough so that we can introduce our drug and begin the baseline assessment, so that when we get to the end, we at least have a comparator that’s stable, reasonable, and discernible.

Right now, it’s possible, based on the way we’ve constructed this study, and I’ve done this in other studies as well, where we may delay the enrollment of a patient by a few weeks or a month, just simply because there seems to be something acute going on, whether they’re getting acutely ill and we just happen to be catching it during the course of the baseline and the screening. They may be in the, in the late stages of resolving their illness, and we’re seeing enough of a difference between two measures over a relatively short period of time that it may just speak to the unstable nature of what’s going on. We really just are looking to get the best patients at the best period of time so that we have a equivalent baseline with which to work from.

That’s really the intention, and it may mean a few weeks or a month longer to enroll a given patient, but it shouldn’t add much in terms of the time. The goal here is to really find the best patient at the best time. Hopefully that helps you.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics2: Absolutely. That’s very helpful. Maybe just a quick one on the OTC. I know it’s still early a little bit, but was the company intended at least the desire to potentially starting both the adult and the pediatric trial relatively concurrently, or there’s any priority one on the before the other?

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: I think the intent is always to get into the children with high end medical need as fast as possible. We’re gonna adhere to the advice and feedback from the FDA from these Type C meetings. We’ll be able to answer that with more granularity in a few months.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics2: Okay, maybe the last question. Does CSL intended to launch the KOSTAIVE in UK, or do we know that? Thanks.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: I would refer to everyone on the call to see what they’ve said publicly at their recent investor calls and their filings. We don’t anticipate anything soon out of the United Kingdom commercially from KOSTAIVE. I refer you to their statements that they’re saying publicly. We’ll see where we are with the CSL agreement and our discussions with them in the coming months.

Dr. Alan Cohen, Chief Medical Officer, Arcturus Therapeutics2: Okay, great. Thanks a lot, and congrats on the progress.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thanks, Yale.

Operator: This does conclude the question and answer portion of today’s program. I would now like to hand the call back to Joseph Payne for any additional or closing remarks.

Joe Payne, President and Chief Executive Officer, Arcturus Therapeutics: Thank you, operator. I’d just like to thank everyone for attending today’s call. If we see you in the bank conference seasons ahead, we look forward to catching up with you there. Have a good afternoon, everybody.

Operator: Thank you. This brings us to the end of today’s meeting. We appreciate your time and participation. You may now disconnect.