Arcturus outlines 12-week cystic fibrosis study launch in 2026 amid cost controls and delayed KOSTAIVE BLA

Earnings Call Insights: Arcturus Therapeutics Holdings Inc. (ARCT) Q3 2025

MANAGEMENT VIEW

* CEO Joseph Payne reported that interim Phase II data for ARCT-032, the company’s mRNA therapeutic candidate for cystic fibrosis (CF), showed "treatment with inhaled 10-milligram doses daily over 28 days in 6 Class I CF adults was generally safe and well tolerated." He highlighted that AI-analyzed HRCT scans showed "reductions in mucus burden in four of the six Class I CF participants in our second cohort." Payne stated, "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 the impact on the efficacy endpoints," with a 12-week study planned for up to 20 participants in the first half of 2026.
* Payne described positive interim Phase II data for ARCT-810, the company’s candidate for ornithine transcarbamylase (OTC) deficiency, and said Arcturus is "preparing for meetings with regulatory agencies in the first half of 2026 to discuss pivotal trial strategy for both pediatric and adult populations."
* The CEO noted the commercial launch of the KOSTAIVE COVID-19 vaccine in Japan through partner Meiji Seika Pharma and shared that the program’s US BLA filing "had been delayed indefinitely due to the sudden regulatory changes by the FDA, combined with uncertain commercial visibility of KOSTAIVE in the United States."
* CFO Andrew Sassine stated, "revenues for the 3 and 9 months ended September 30, 2025, was $17.2 million and $74.8 million, respectively, representing a decrease of $24.5 million and $54.7 million compared to the same periods in 2024." He further explained, "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."
* Sassine reported, "total operating expenses for the 3 months ended September 30, 2025, were $33.7 million compared with $52.4 million for the 3 months ended September 30, 2024," and "cash, cash equivalents and restricted cash were $237.3 million as of September 30, 2025."

OUTLOOK

* Payne indicated that the company intends to "evaluate daily dosing of ARCT-032 over a 12-week duration in up to 20 CF participants," with this study planned to begin in the first half of 2026. He stated, "safety and preliminary efficacy data will be collected in this study."
* For ARCT-810, Payne said, "the company 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."
* Sassine noted that "the cash runway remains extended into 2028" due to additional cost reductions and the delay in the Phase III cystic fibrosis clinical trial commencement.

FINANCIAL RESULTS

* Sassine reported, "net loss of approximately $13.5 million or $0.49 per diluted share compared with a net loss of $6.9 million or $0.26 per diluted share in the 3 months ended September 30, 2024."
* R&D expenses for the quarter were $23.3 million, attributed to "lower manufacturing costs for the COVID, flu and CF programs as well as reduced clinical trial expenses for COVID and cystic fibrosis."
* G&A expenses were $10.4 million for the quarter, with expectations that "general and administrative expenses to continue to decrease slightly in fiscal year '26."
* Sassine emphasized, "the company remains in a strong financial position and has the cash runway needed to achieve multiple near-term value-creating milestone for both therapeutic programs."

Q&A

* Yasmeen Rahimi, Piper Sandler: Asked about PK/PD modeling for the third dose cohort and pivotal study planning for OTC. Payne answered that "all of the activities with respect to data collection are going to be in line with the first two cohorts" and that pivotal trial strategies for OTC will involve "two separate conversations with regulatory agencies to gain alignment on a pivotal study" for adults and children.
* Jake Batchelder, William Blair: Queried about whether mucus reductions will be bronchiole or alveolar specific and updates on KOSTAIVE revenue guidance. Payne responded that "in the lower register, the lower lobes... are first to resolve and show a reduction of mucus plugs" due to the inhaled therapeutic, and Sassine reiterated no specific guidance on KOSTAIVE commercial revenues, noting recent delivery of "about 1.1 million doses for the fourth quarter" to Meiji in Japan.
* Boran Wang, Guggenheim: Asked about metrics for go/no-go decisions for the 15 mg cohort and endpoints for the 12-week study. Payne stated, "the most important data set... is really safety and tolerability" and that dose selection for the 12-week study will depend on these results, with success defined as "continued or further reduction of mucus plugs" and improvements in lung function.
* Angela Qian, Canaccord: Inquired about timing for 15 mg data and endpoints. Payne indicated data is expected in "the first quarter of next year" with endpoints identical to prior cohorts.
* Kuan-Hung Lin, Wells Fargo: Asked if a clear correlation between mucus reduction and FEV1 is needed. Payne said, "the FDA may not yet consider CT imaging as a surrogate endpoint at this time... it will be a supportive endpoint."
* Lili Nsongo, Leerink Partners: Asked about enrollment pace and global expansion for the 12-week study. Payne said, "we anticipate enrollment rate to increase with these additional sites and additional access to Class I and modulator nonresponders," and Sassine confirmed this is "captured in the runway guidance."

SENTIMENT ANALYSIS

* Analysts focused on the timing of key data releases, go/no-go decision-making, and endpoints for regulatory alignment, with a generally neutral tone and a desire for clarity on trial designs and data interpretation.
* Management maintained a confident and detailed tone during prepared remarks but frequently referenced the need for further data and regulatory conversations, using language such as "if the data is convincing" and "we intend to add additional general health questions."
* Compared to the previous quarter, management’s tone shifted from highlighting imminent data releases to emphasizing cost control, program pacing, and regulatory strategy, while analyst tone remained focused on clinical and regulatory milestones.

QUARTER-OVER-QUARTER COMPARISON

* Guidance timing for the pivotal ARCT-032 12-week study moved from an expected data release in 2025 to a planned study start in the first half of 2026.
* KOSTAIVE’s US BLA filing, previously expected in September, is now delayed indefinitely, with commercial revenue focus shifting to Asia and Europe.
* Management continues to stress program advancement for both CF and OTC platforms, but the current quarter shows a greater emphasis on expense reduction and extending cash runway.
* Analyst questions in both quarters centered on CF clinical endpoints, regulatory engagement, and program timelines, though this quarter saw more explicit discussions on dose selection and global site expansion.

RISKS AND CONCERNS

* The CEO cited "sudden regulatory changes by the FDA" as the reason for the indefinite delay of the KOSTAIVE BLA in the US, tying this to "uncertain commercial visibility."
* Revenue declines were attributed to "reduced revenues from the CSL collaboration, reflecting lower supply agreement activity and lower amortization of the upfront payment as KOSTAIVE became a commercial product."
* Management acknowledged the need for further regulatory alignment for both CF and OTC programs, with pivotal trial details and potential age cutoffs for pediatric enrollment still to be finalized.

FINAL TAKEAWAY

Arcturus Therapeutics signaled continued advancement of its mRNA-based pipeline, particularly with a planned 12-week CF study in 2026 and regulatory engagement for its OTC program. The company responded to regulatory setbacks and commercial uncertainty for KOSTAIVE in the US by tightening cost controls and focusing resources on its lead therapeutic programs, aiming to maintain a strong financial runway into 2028 while seeking additional clinical and regulatory milestones in the coming year.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/arct/earnings/transcripts]

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