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Arcturus Therapeutics Announces Fourth Quarter and Fiscal Year 2023 Financial Update and Pipeline Progress

BusinessWire

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)–$ARCT #ClinicalTrial–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

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

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 www.ArcturusRx.com. 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 www.sec.gov. 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

)

 

Contacts

IR and Media Contacts
Arcturus Therapeutics

Neda Safarzadeh

VP, Head of IR/PR/Marketing

(858) 900-2682

IR@ArcturusRx.com

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