Self-amplifying RNA Quadrivalent Seasonal Influenza Vaccine(Arcturus Therapeutics)

Kostaive® anticipated to launch in Japan this year ARCT-032 remains on track for Phase 1b interim data in Q2 ARCT-810 remains on track for Phase 2 interim data by the end of Q2 ARCT-2138 (Quadrivalent LUNAR-FLU) Phase 1 study for seasonal influenza vaccine initiated New STARR® vaccine discovery programs initiated for Lyme Disease and Gonorrhea Cash runway extended to Q1 2027 Investor conference call at 4:30 p.m. ET today SAN DIEGO--(BUSINESS WIRE)-- Arcturus Therapeutics Holdings Inc. (the “Company”, “Arcturus”, Nasdaq: ARCT), a global messenger RNA medicines company focused on the development of infectious disease vaccines and opportunities within liver and respiratory rare diseases, today announced its financial results for the fourth quarter ended December 31, 2023, and provided corporate updates. “I am excited about the continued pipeline progress and efforts toward commercialization achieved by Arcturus in 2023,” said Joseph Payne, President & CEO of Arcturus Therapeutics. “Alongside our global vaccine partner CSL Seqirus and their COVID vaccine partner in Japan, Meiji, Kostaive® was granted historic approval as the world’s first self-amplifying mRNA (sa-mRNA) product. Recently released clinical trial data, demonstrated Kostaive® induced a stronger, broader, and more durable immune response compared to an approved conventional mRNA vaccine.” Mr. Payne continued: “We are especially pleased to announce the U.S. FDA and the European Commission recently granted Orphan Drug Designation for ARCT-032, an inhaled mRNA therapeutic candidate for individuals with cystic fibrosis. These regulatory designations will help advance ARCT-032 to become a potential treatment for the segment of the CF population who are not candidates for any of the currently approved drugs for this disease.” Andy Sassine, Chief Financial Officer of Arcturus said, “I am pleased to announce the cash runway was extended to the first quarter 2027 due to disciplined cost management and progression of the CSL collaboration. This is the second sequential quarter our runway was extended without including any contributions from Kostaive® revenues or commercial milestones.” Recent Corporate Highlights In February 2024, the Company announced new COVID-19 sa-mRNA results in collaboration with CSL, demonstrating a longer duration of immunity compared to conventional COVID-19 mRNA vaccine booster. Short communication follows previously published data in The Lancet Infectious Diseases in December 2023. The randomized, double-blind, active-controlled study, conducted at 11 sites in Japan assessed the immunogenicity of Kostaive® and Comirnaty® at one, three- and six-months post-booster. The new analysis extends the time of observation of immune response from 3 months to 6 months post booster dose, demonstrating an advantage in antibody persistence of Kostaive® over Comirnaty against both the original Wuhan strain and the Omicron BA.4/5 variant. The superior immune response of Kostaive® in terms of magnitude and duration of antibody persistence was achieved with one sixth the dose of Comirnaty (5 μg vs 30 μg). In November, Japan's Ministry of Health, Labor and Welfare (MHLW) granted approval for Kostaive®, a self-amplifying mRNA COVID-19 vaccine for primary vaccination and booster for adults 18 years and older. This marks the first marketing approval milestone for CSL and Arcturus since signing the Collaboration and License agreement in November 2022. The approval is based on positive clinical data from several Kostaive® studies, including a 16,000 subject efficacy study performed in Vietnam as well as a Phase 3 COVID-19 booster trial, which achieved higher immunogenicity results and a favorable safety pro to a standard mRNA COVID-19 vaccine comparator. The study results have been published in The Lancet Infectious Diseases. Kostaive® is anticipated to launch in Japan this year. In January 2024, the Company, under its collaboration with CSL, initiated a Phase 1 dose-finding study for ARCT-2138 (Quadrivalent LUNAR-FLU) seasonal influenza vaccine in healthy young and older adults. The Company continues to advance the development of ARCT-810, an mRNA therapeutic candidate for ornithine transcarbamylase (OTC) deficiency. ARCT-810 Phase 1b single ascending dose study in the U.S. has completed enrollment and dosing of all cohorts (N = 16 patients). ARCT-810 Phase 2 study in UK and Europe is enrolling up to 24 adolescents and adults with OTC deficiency. The ongoing study is evaluating two dose levels and includes up to six (6) bi-weekly administrations for each participant. The Company expects to share Phase 2 interim data by the end of Q2. In November 2023, Arcturus received Orphan Drug Designation from the U.S. FDA for ARCT-032, for the treatment of Cystic Fibrosis. In February 2024, Arcturus was granted Orphan Medicinal Product Designation from the European Commission for ARCT-032. ARCT-032 remains on track for Phase 1b interim data in Q2 2024. Based on the clinical and regulatory validation of LUNAR® and STARR® technologies provided by the approval of Kostaive® in Japan, the Company has initiated new vaccine discovery programs for Lyme Disease and Gonorrhea. Financial Results for the Year Ended December 31, 2023 Revenues in conjunction with collaborations and grants: Arcturus’ primary sources of revenues were from license fees, consulting and related technology transfer fees, reservation fees and collaborative payments received from research and development arrangements with pharmaceutical and biotechnology partners. For the year ended December 31, 2023, we reported revenue of $169.9 million compared with $206.0 million for the year ended December 31, 2022. Revenue recognized from CSL in 2023 was $157.4 million which slightly increased by $3.0 million compared to 2022. We made significant progress with the BARDA grant agreement that led to an increase in revenue of $8.8 million. The majority of the annual decrease in revenue was driven by the discontinuation of our collaboration agreements with Vinbiocare and Janssen. For the three months ended December 31, 2023, revenue recognized was $34.0 million compared with $160.3 million for the three months ended December 31, 2022. The $200.0 million up front payment for the execution of the CSL collaboration drove the majority of the revenue recognition during the three months ended December 31, 2022. Operating expenses: Total operating expenses for the year ended December 31, 2023, were $245.0 million compared with $193.8 million for the year ended December 31, 2022. For the three months ended December 31, 2023, operating expenses were $49.1 million compared with $38.8 million for the three months ended December 31, 2022. Research and Development Expenses: Research and development expenses consist primarily of external manufacturing costs, in-vivo research studies and clinical trials performed by contract research organizations, clinical and regulatory consultants, personnel related expenses, facility related expenses and laboratory supplies. Research and development expenses were $192.1 million for the year ended December 31, 2023, compared with $147.8 million for the year ended December 31, 2022. The increase in research and development expenses were primarily driven by the CSL and BARDA programs as well as our internal OTC and Cystic Fibrosis programs. Additionally, we have increased investments in early stage and discovery technologies. The Company initiated preclinical research related to its Lyme Disease and Gonorrhea vaccine discovery programs. Research and development expenses were $36.6 million for the three months ended December 31, 2023, compared with $27.0 million for the three months ended December 31, 2022. This increase was due to higher professional and personnel-related expenses as well as lower contra research and development expense from grants. General and Administrative Expenses: General and administrative expenses primarily consist of salaries and related benefits for our executive, administrative, legal and accounting functions and professional service fees for legal and accounting services as well as other general and administrative expenses. For the year ended December 31, 2023, general and administrative expenses were $52.9 million compared with $46.1 million for the year ended December 31, 2022. The annual increase was primarily due to personnel expenses as a result of increased headcount and salaries, travel and consulting expenses. Additionally, we incurred higher rent expenses associated with the new headquarters facility. General and administrative expenses were $12.5 million for the three months ended December 31, 2023, compared with $11.8 million for the three months ended December 31, 2022. The slight increase was due to personnel-related expenses. Net Loss: For the year ended December 31, 2023, we reported a net loss of approximately $26.6 million, or ($1.00) per diluted share, compared with net income of $9.3 million, or $0.35 per diluted share for the year ended December 31, 2022. For the three months ended December 31, 2023, we reported a net loss of approximately $8.6 million or ($0.32) per diluted share, compared with net income of $117.4 million or $4.33 per diluted share for the three months ended December 31, 2022. Cash Position and Balance Sheet: Cash, cash equivalents and restricted cash were $348.9 million at December 31, 2023, and $394.0 million at December 31, 2022. We have achieved a total of approximately $396.0 million in upfront payments and milestones from CSL as of December 31, 2023. We expect to continue to receive future milestone payments from CSL that will support the ongoing development of the covid and flu programs and three additional vaccine programs by CSL. The expected cash runway extends at least three years based on the current pipeline and programs. Earnings Call: Thursday, March 7, 2024 @ 4:30 pm ET Domestic: 1-877-407-0784 International: 1-201-689-8560 Conference ID: 13744044 Webcast: Link About Arcturus Therapeutics Founded in 2013 and based in San Diego, California, Arcturus Therapeutics Holdings Inc. (Nasdaq: ARCT) is a global mRNA medicines and vaccines company with enabling technologies: (i) LUNAR® lipid-mediated delivery, (ii) STARR® mRNA Technology (sa-mRNA) and (iii) mRNA drug substance along with drug product manufacturing expertise. Arcturus developed the first self-amplifying messenger RNA (sa-mRNA) COVID vaccine (Kostaive®) in the world to be approved. Arcturus has an ongoing global collaboration for innovative mRNA vaccines with CSL Seqirus, and a joint venture in Japan, ARCALIS, focused on the manufacture of mRNA vaccines and therapeutics. Arcturus’ pipeline includes RNA therapeutic candidates to potentially treat ornithine transcarbamylase deficiency and cystic fibrosis, along with its partnered mRNA vaccine programs for SARS-CoV-2 (COVID-19) and influenza. Arcturus’ versatile RNA therapeutics platforms can be applied toward multiple types of nucleic acid medicines including messenger RNA, small interfering RNA, circular RNA, antisense RNA, self-amplifying RNA, DNA, and gene editing therapeutics. Arcturus’ technologies are covered by its extensive patent portfolio (over 400 patents and patent applications in the U.S., Europe, Japan, China, and other countries). For more information, visit . In addition, please connect with us on Twitter and LinkedIn. Forward Looking Statements This press release contains forward-looking statements that involve substantial risks and uncertainties for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact included in this press release, are forward-looking statements, including those regarding strategy, future operations, the likelihood of success of the Company’s pipeline (including ARCT-032 and ARCT-810) and partnered programs (including the COVID-19 and flu programs partnered with CSL Seqirus), the likelihood that preclinical or clinical data will be predictive of future clinical results, including that the results from Kostaive® (or ARCT-154) will be predictive of results for updated versions of the vaccine, the potential commercial launch of Kostaive®, the continued advancement ARCT-032 or its potential as a treatment for any of the CF population, the continued advancement of ARCT-810, the anticipated timing and sharing of clinical data including for the Company’s ARCT810 Phase 2 study and the ARCT-032 Phase 1b study, the continued efforts for our vaccine discovery programs for lyme disease or gonorrhea, the potential of the Company’s platform technology to be meaningfully differentiated from other technologies, the continued progress of the LUNAR-FLU program, the ability to enroll participants in clinical studies including the Company’s ARCT-810 and ARCT-032 programs, the likelihood and timing of commercial activities for the Company’s LUNAR-COVID program, the likelihood that a patent will issue from any patent application, the likelihood or timing of collection of accounts receivables including expected payments from CSL, its current cash position and expected cash burn and runway, and the impact of general business and economic conditions. Arcturus may not actually achieve the plans, carry out the intentions or meet the expectations or projections disclosed in any forward-looking statements such as the foregoing and you should not place undue reliance on such forward-looking statements. These statements are only current predictions or expectations, and are subject to known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements, including those discussed under the heading "Risk Factors" in Arcturus’ most recent Annual Report on Form 10-K, and in subsequent filings with, or submissions to, the SEC, which are available on the SEC’s website at . Except as otherwise required by law, Arcturus disclaims any intention or obligation to update or revise any forward-looking statements, which speak only as of the date they were made, whether as a result of new information, future events or circumstances or otherwise. Trademark Acknowledgements The Arcturus logo and other trademarks of Arcturus appearing in this announcement, including LUNAR® and STARR®, are the property of Arcturus. All other trademarks, services marks, and trade names in this announcement are the property of their respective owners. ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, (in thousands, except par value information) 2023 2022 Assets (unaudited) Current assets: Cash and cash equivalents $ 292,005 $ 391,883 Restricted cash 55,000 — Accounts receivable 32,064 2,764 Prepaid expenses and other current assets 7,521 8,686 Total current assets 386,590 403,333 Property and equipment, net 12,427 12,415 Operating lease right-of-use asset, net 28,500 32,545 Non-current restricted cash 1,885 2,094 Total assets $ 429,402 $ 450,387 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 5,279 $ 7,449 Accrued liabilities 31,881 30,232 Current portion of long-term debt — 60,655 Deferred revenue 41,695 28,648 Total current liabilities 78,855 126,984 Deferred revenue, net of current portion 42,496 20,071 Operating lease liability, net of current portion 25,907 30,216 Other non-current liabilities 497 2,804 Total liabilities 147,755 180,075 Stockholders’ equity: Common stock: $0.001 par value; 60,000 shares authorized; issued and outstanding shares were 26,828 at December 31, 2023 and 26,555 at December 31, 2022 27 27 Additional paid-in capital 646,352 608,426 Accumulated deficit (364,732 ) (338,141 ) Total stockholders’ equity 281,647 270,312 Total liabilities and stockholders’ equity $ 429,402 $ 450,387 ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Year Ended December 31, (in thousands, except per share data) 2023 2022 2021 Revenue: (unaudited) Collaboration revenue $ 160,882 $ 205,755 $ 12,359 Grant revenue 9,051 244 — Total revenue 169,933 205,999 12,359 Operating expenses: Research and development, net 192,133 147,751 173,760 General and administrative 52,871 46,071 41,451 Total operating expenses 245,004 193,822 215,211 (Loss) income from operations (75,071 ) 12,177 (202,852 ) (Loss) gain from equity-method investment — (515 ) 515 (Loss) gain from foreign currency (229 ) (598 ) 584 Finance income (expense), net 16,591 (420 ) (1,921 ) Gain on debt extinguishment 33,953 — — Net (loss) income before income taxes (24,756 ) 10,644 (203,674 ) Provision for income taxes 1,835 1,295 — Net (loss) income $ (26,591 ) $ 9,349 $ (203,674 ) (Loss) earnings per share: Basic $ (1.00 ) $ 0.35 $ (7.74 ) Diluted $ (1.00 ) $ 0.35 $ (7.74 ) Weighted-average shares used in calculation of (loss) earnings per share: Basic 26,628 26,445 26,317 Diluted 26,628 27,093 26,317 Comprehensive (loss) income: Net (loss) income $ (26,591 ) $ 9,349 $ (203,674 ) Comprehensive (loss) income: $ (26,591 ) $ 9,349 $ (203,674 ) ARCTURUS THERAPEUTICS HOLDINGS INC. AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) Three Months Ended December 31, September 30, (in thousands, except per share data) 2023 2022 2023 Revenue: Collaboration revenue $ 28,212 $ 160,049 $ 43,376 Grant revenue 5,777 244 1,764 Total revenue 33,989 160,293 45,140 Operating expenses: Research and development, net 36,620 26,981 51,077 General and administrative 12,507 11,860 13,377 Total operating expenses 49,127 38,841 64,454 Income (loss) from operations (15,138 ) 121,452 (19,314 ) (Loss) gain from foreign currency (54 ) (3,835 ) 4 Finance expense, net 6,881 1,025 3,981 Net (loss) income before income taxes (8,311 ) 118,642 (15,329 ) Provision for income taxes 262 1,295 893 Net (loss) income $ (8,573 ) $ 117,347 $ (16,222 ) (Loss) earnings per share: Basic $ (0.32 ) $ 4.43 $ (0.61 ) Diluted $ (0.32 ) $ 4.33 $ (0.61 ) Weighted-average shares used in calculation of (loss) earnings per share: Basic 26,628 26,508 26,574 Diluted 26,628 27,080 26,574 Comprehensive (loss) income: Net (loss) income $ (8,573 ) $ 117,347 $ (16,222 ) Comprehensive (loss) income $ (8,573 ) $ 117,347 $ (16,222 )

Pfizer suffered its first quarterly revenue dip since its BioNTech-partnered Covid vaccine was authorized in 2020, CEO Albert Bourla revealed on Tuesday. And if that isn’t bad enough, he expects patent expiries to cost the company around $17 billion between 2025 and 2030. Which is why, he emphasized on the Q3 call, “It’s all about what’s next.” Bourla outlined ambitious plans to bring 19 new products or indications to market over the next year and a half. He spies blockbuster potential in more than two-thirds of those, including 15 in-house projects that could earn $20 billion in 2030 alone, he said. Myfembree’s endometriosis indication is on the list, as well as an mRNA flu vaccine expected to launch in 2024, if all goes according to plan. Chief business innovation officer Aamir Malik added that the company is actively scoping out deals and continues to be “agnostic to size.” “We believe we not only can overcome these expected declines, but also can potentially generate strong growth through the end of the decade,” Bourla said on the call. Pfizer’s stock $PFE was up more than 3% on Tuesday afternoon. The news comes as Pfizer posts an 66% drop in Comirnaty sales this quarter, which totaled about $4.4 billion. That decline was expected, the company said, and was partly due to an 86% operational decline in ex-US sales caused by shifts in expected deliveries, including an amendment to the EU’s supply deal that postponed the delivery of all doses anticipated from June through August to the fourth quarter. “The slight decrease compared to last year was in line with our expectations, given the phasing of scheduled deliveries of Comirnaty which we discussed in our earnings call last quarter,” CFO David Denton said on the call. Covid vaccine revenue in the US, on the other hand, was up 83% on the heels of recently launched BA.4/BA.5-specific bivalent boosters, Pfizer reported. Despite slow uptake in the US —  just 7.3% of those 5 years old and up have received a bivalent booster, according to the CDC’s vaccine tracker — Pfizer is upping its full-year Comirnaty guidance by $2 billion, anticipating a total around $34 billion for the year. As for Paxlovid, Pfizer reaffirmed its $22 billion guidance. “Regardless of the guidance, we’re far less enthusiastic about the booster opportunity for the updated Omicron-adapted COVID-19 vaccines,” Third Bridge analyst Lee Brown said in a note to investors on Tuesday. Reports recently emerged that Pfizer plans on roughly quadrupling the price of Comirnaty after government funding dries up, but Brown noted that the “price hike may not be enough to meet revenue forecasts for 2023 and beyond.” As government funding dries up, Pfizer expects to charge private payers $110+ for Covid-19 vaccine Bourla said on the call that pricing the vaccine at a “very, very low price” during the pandemic was the “right thing to do,” but coming out of that period, “we are pricing the vaccine according to the cost effectiveness.” Pfizer said Phase I work is underway on a second-gen oral therapeutic, and its modRNA flu program is now in Phase III. A Phase I is expected to start shortly on a combination vaccine that combines its quadrivalent modRNA candidate with its Omicron-adapted Covid vaccine. “I think all respiratory diseases eventually will have coverage like we have right now like we have in flu,” Bourla said. That includes RSV. Earlier this morning, Pfizer announced that it’s stopping enrollment in its Phase III RSV trial after meeting one of two primary endpoints at an interim analysis, and is prepping for a BLA submission later this year. While RSV infections are typically mild for adults, they can be serious for the elderly and newborns, and Pfizer says its candidate protects newborns when administered to mothers during pregnancy. Pfizer declares 'first-ever' PhIII win for RSV vaccine in infants — and it's steering straight to FDA Prevnar sales saw an 11% boost last quarter, benefiting from an approval of Prevnar 20 for adults last June. Pfizer beat Merck’s 15-valent pneumococcal conjugate vaccine to the punch with Prevnar 20, and chief commercial officer Angela Hwang said on the call that the shot holds a 95% market share. “We’re obviously anticipating the launch of pediatric Prevnar 20, but in the meantime, Prevnar 13 is competing really well,” she added. Meanwhile, Xeljanz sales were down 18% last quarter due to “ongoing shifts in prescribing patterns related to Janus kinase (JAK) class label changes,” Pfizer said. The FDA previously slapped boxed warnings on Xeljanz, Olumiant and Rinvoq after concluding that Pfizer’s drug carried an increased risk of heart conditions such as stroke. The EMA followed suit last week, recommending that a group of JAK inhibitors used for chronic inflammatory disorders is only used in certain at-risk patients if no alternatives are available. EMA limits use of JAK inhibitors for at-risk groups in wake of safety concerns Pfizer also revealed a pipeline cut on Tuesday, including PF-07265803, an LMNA-related dilated cardiomyopathy candidate that was deemed unlikely to meet its primary endpoint in a Phase III study. The decision to discontinue was not based on safety concerns, Pfizer noted.