Arcturus Therapeutics Q3 2025: Contradictions Emerge on Study Dose Levels, CF Enrollment Pacing, and Regulatory Strategy for KOSTAIVE

Date of Call: November 10, 2025

Financials Results

• Revenue: $17.2M (3 months) and $74.8M (9 months), down $24.5M and $54.7M YOY, respectively
• EPS: Net loss of $0.49 per diluted share for the 3 months ended Sept 30, 2025, compared with a $0.26 loss per diluted share in the prior-year quarter

Guidance:

• Initiate 12-week ARCT-032 (CF) study in H1 2026 (up to ~20 participants)
• Hold regulatory alignment meetings in H1 2026 for ARCT-810 pivotal strategy (pediatric and adult)
• Implement additional cost reductions in Q4; runway extended into 2028; more detail at year-end call in March
• Expect continued CSL support to commercialize KOSTAIVE in Asia/Europe; Meiji launched updated 2-dose vial in Japan
• General & administrative expenses expected to decrease slightly in fiscal 2026

Business Commentary:

* ARCT-032 Clinical Progress: - Arcturus announced interim data from its Phase II clinical trial of ARCT-032, showing that treatment with inhaled 10-milligram doses daily over 28 days in six Class I CF adults was generally safe and well tolerated. - - The study revealed reductions in mucus burden in four out of the six participants using FDA 501(k)-cleared AI technology. - 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 its impact on efficacy endpoints.

• Financial Impact of KOSTAIVE BLA Filing Delay:
• Revenues for the 3 and 9 months ended September 30, 2025, were $17.2 million and $74.8 million, respectively, representing decreases of $24.5 million and $54.7 million compared to the same periods in 2024.

• The declines were primarily driven by reduced revenues from the CSL collaboration, reflecting lower supply agreement activity and lower amortization of the upfront payment as KOSTAIVE became a commercial product.

• Cost Reduction and Runway Extension:

• Arcturus reduced additional expenses and extended its cash runway into 2028, with cash, cash equivalents, and restricted cash at $237.3 million as of September 30, 2025.

• The company attributed these actions to the delay in the KOSTAIVE BLA filing and uncertain commercial visibility in the United States, focusing on extending the runway for the cystic fibrosis and OTC programs.

• Regulatory Advancements:

• Arcturus is diligently preparing for meetings with regulatory agencies in the first half of 2026 to discuss pivotal trial strategy for both pediatric and adult populations in the ARCT-810 program for OTC deficiency.
• The company aims to provide more details on these regulatory alignment meetings in the first half of 2026, following a positive interim Phase II data review.
  

  Sentiment Analysis:

  Overall Tone: Neutral

  • Management highlighted encouraging ARCT-032 interim imaging (mucus reduction in 4 of 6 at 10 mg) and planned H1 2026 studies/meetings, but CFO reported revenue declines (Q3 revenues $17.2M, down $24.5M YOY), a widened quarterly net loss ($0.49 vs $0.26 prior year) and an indefinitely delayed U.S. BLA, while noting cost cuts that extend runway into 2028.

Q&A:

• Question from Yasmeen Rahimi (Piper Sandler & Co.): Have you done PK/PD modeling to inform expectations as you start the 15 mg cohort and what do you hope to learn; and for OTC, what are the development optionalities for pediatric vs adult populations?
  Response: 15 mg cohort collects the same PK/PD markers as prior cohorts; the planned 12-week study (up to 20 subjects) extends duration and adds screening to strengthen baseline; OTC will require separate FDA discussions—adults likely use glutamine biomarker, pediatrics will focus on ammonia and may be considered for single‑arm designs.

• Question from Jake Batchelder (William Blair & Company L.L.C.): Do you expect mucus improvements to be bronchiole- or alveolar‑specific as you extend to 12 weeks (and did preclinical ferrets show similar patterns); and any update on KOSTAIVE revenue timing?
  Response: Human inhaled therapy shows early mucus plug reduction in lower lobes/smaller airways with expectation of broader improvement over longer dosing (ferret data not directly comparable), and the company will not provide commercial revenue guidance for KOSTAIVE but noted Meiji ordered ~1.1M doses for Q4 with updates expected at the year‑end/March call.

• Question from Boran Wang (Guggenheim Securities, LLC): For the 15 mg cohort, what metrics drive the go/no‑go (FEV1, CT scan, or both) and what defines success in the 12‑week study; and how do regulators view CT as an endpoint?
  Response: The 15 mg cohort is to assess dose response but most importantly safety/tolerability to select dose for the 12‑week study; success is continued mucus plug reduction with translation to lung function gains; CT is currently seen as a supportive endpoint and meaningful thresholds will be discussed with the FDA.

• Question from Angela Qian (Canaccord Genuity Corp.): When should we expect 15 mg cohort data and what endpoints will be reported for that cohort?
  Response: Top-line data for the 15 mg (third) 28‑day cohort is expected in Q1 next year and will report the same safety and efficacy endpoints as the first two cohorts.

• Question from Angela Qian (Canaccord Genuity Corp.): Will you analyze CT scans for non‑responders separately?
  Response: Yes — the company plans to share the full data package for all three cohorts (5, 10 and 15 mg) at an appropriate presentation/publication time, which will include analyses across responders and non‑responders.

• Question from Kuan‑Hung Lin (Wells Fargo Securities, LLC): Any 15 mg safety data yet and will you evaluate doses higher than 15 mg; additionally, if only mucus reduction but no FEV1 signal emerges, how will that affect program decisions?
  Response: 15 mg is the highest dose planned and a dose choice (10 vs 15 mg) will follow Q1 data; CT/mucus reductions would be supportive but primary regulatory expectations currently center on FEV1, so correlation with lung function will be important though agency discussions may allow CT as co‑primary if convincing.

• Question from Joohwan Kim (Citi): For the extra screening visit in the 12‑week study, will you average multiple pre‑treatment FEV1 measures to strengthen baseline and why not take multiple measurements?
  Response: The design intent is to strengthen baseline with an additional pre‑treatment FEV1 (potentially averaging two values), but final approach will be aligned with the FDA during upcoming discussions.

• Question from Joohwan Kim (Citi): Given CFQ‑R RSS variability, is there a strategy to reduce variability for future interpretation or is EQ‑5D‑5L less variable?
  Response: They will add the EQ‑5D‑5L general health questionnaire alongside the truncated pulmonary CFQ‑R to supplement and potentially reduce variability in the forthcoming 12‑week study and inform measures for Phase III.

• Question from Thomas Shrader (BTIG, LLC): Any thought to enrolling less‑impacted CF patients for easier delivery; and are there ongoing FDA discussions about KOSTAIVE?
  Response: They will not narrow enrollment to less‑impacted patients after observing meaningful responses in both advanced and less‑advanced subjects, and there remains flexibility to discuss KOSTAIVE with regulators despite prior delays.

• Question from Yale Jen (Laidlaw & Company): Any progress with CSL on the other targeted infectious‑disease programs beyond influenza and COVID?
  Response: CSL/Seqirus may pursue a demerger which would concentrate vaccine programs (including flu) under Seqirus; no new program details disclosed and future updates will align with any demerger developments.

• Question from Lili Nsongo (Leerink Partners LLC): How should we think about enrollment pace (you had ~3 patients/quarter historically) for Cohort 3 and will the 12‑week study enroll at a similar rate?
  Response: Cohort 3 was expanded up to six subjects into Q1, and the 12‑week study will add multiple U.S. and international sites to accelerate enrollment for N≈20, so pacing is expected to increase versus early cohorts.

• Question from Lili Nsongo (Leerink Partners LLC): Is global expansion of sites captured in current cash runway guidance?
  Response: Yes — management confirmed the global expansion and related modest costs are included in the runway guidance and additional clinical material costs are de minimis.

• Question from Lili Nsongo (Leerink Partners LLC): For ARCT‑810, what pediatric age range are you targeting and can you go pivotal in pediatrics without an additional bridging study?
  Response: Target pediatric age cutoffs (e.g., 5 or 8 years) will be clarified in Type C meetings with the agency in H1 2026; the company hopes to achieve pivotal pediatric alignment without an extra bridging study but final determination awaits regulator discussions.

Contradiction Point 1

Study Dose Levels in ARCT-032

It involves differences in the description of dose levels being explored in the ARCT-032 study, which could impact expectations for the study's outcomes and the company's clinical development strategy.

Have you conducted PK/PD modeling for the third dose cohort and what insights do you expect to gain? - Yasmeen Rahimi(Piper Sandler)

2025Q3: The third cohort at 15 milligrams is being evaluated similarly to the first two cohorts... - Joseph Payne(CEO)

How does ARCT-032 differ from other mRNA programs, and what dose levels are being explored? - Evan Wang(Guggenheim Securities)

2025Q1: Two dose levels are being evaluated. The study design allows flexibility for a third dose level, but specific details will be disclosed mid-year. - Joe Payne(CEO)

Contradiction Point 2

Enrollment Pace in CF Study

It involves differing statements about the enrollment pace for the CF study, which could impact expectations for the timeline and progress of the clinical trial.

Should we expect three patients per quarter in CF enrollment? - Lili Nsongo(Leerink Partners)

2025Q3: The third cohort has been expanded from three to six patients, extending into Q1 2026. - Joseph Payne(CEO)

For ARCT-032's mid-2025 interim readout, could you detail the cohort size, success criteria, and patient population? - Yasmeen Rahimi(Piper Sandler)

2025Q1: The Phase 2 study has 12 subjects, with data from six to nine subjects expected for interim analysis. - Joe Payne(CEO)

Contradiction Point 3

CF Program Enrollment and Interim Data Timing

It involves the enrollment timeline and expected interim data timing for the cystic fibrosis program, which is crucial for updating investor expectations and clinical trial progress.

Will CF enrollment see three patients per quarter? Is the 12-week study enrollment pace expected to remain consistent? - Lili Nsongo (Leerink Partners LLC)

2025Q3: The third cohort has been expanded from three to six patients, extending into Q1 2026. - Joseph Payne(CEO)

What is the cadence of development milestones in the CSL collaboration? Are there updates on the flu vaccine program and potential combo with COVID flu? - Lili Nsongo (Leerink)

2024Q4: Interim data is expected by the end of Q2. - Joseph Payne(CEO)

Contradiction Point 4

CF Program Dose Rationale and FEV Improvement Expectations

It relates to the rationale behind the dose selection and expectations for the FEV1 improvement in the CF program, which are critical for understanding the program's design and potential efficacy.

Have you observed data from the 15 mg dose, and will you assess higher doses than that? Is a clear correlation between mucus plug reduction and FEV1 required for program advancement? - Kuan-Hung Lin (Wells Fargo Securities)

2025Q3: The 15 milligram is the highest dose being evaluated. Top line data will determine the dose for the 12-week study. - Joseph Payne(CEO)

How should we assess potential differentiation from competitors in the mRNA space? - Lili Nsongo (Leerink)

2024Q4: An FEV lung function improvement of 3% in our Phase II trial would likely justify advancing ARCT-032 further into development. - Joseph Payne(CEO)

Contradiction Point 5

Regulatory Discussions and Alignment for KOSTAIVE

It involves the regulatory strategy for the KOSTAIVE program, which is crucial for market approval and commercialization timelines.

Will the next CF cohort include less impacted patients for easier delivery? Are there ongoing discussions about FDA alignment for KOSTAIVE? - Thomas Shrader (BTIG, LLC, Research Division)

2025Q3: The FDA is open to discussing KOSTAIVE's path forward, and there is room for flexibility. - Joseph Payne(CEO)

What are the success criteria for the ARCT-032 program and what is the ratio of modulator-eligible to noneligible patients in your trial? - Lili Nsongo (Leerink Partners)

2025Q2: The FDA is supportive of the broad claims that we're making around CF and OTC. We feel like we've got a very good understanding of the path forward to Phase III. - Joseph Payne(CEO)