What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-11 compared with 2025-05-12 · 124 added, 73 removed, 190 unchanged (51% of the section changed)

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The following is a discussion of the financial condition and results of operations of Arcturus Therapeutics Holdings Inc.

for the three-month period ended March 31, 2025.

for the three- and six-month periods ended June 30, 2025.

Unless otherwise specified herein, references to the “Company,” “Arcturus,” “we,” “our” and “us” mean Arcturus Therapeutics Holdings Inc.

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You should also review the factors and risks we describe in the reports we will file or submit from time to time with the Commission after the date of this report.

We are a messenger RNA medicines company focused on the development of infectious disease vaccines and opportunities within liver and respiratory rare diseases.

We are a commercial messenger RNA medicines company focused on the development of liver and respiratory rare disease therapeutics and infectious disease vaccines.

We developed the world’s first approved self-amplifying messenger RNA (sa-mRNA) vaccine, KOSTAIVE ® (“KOSTAIVE”).

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Our internal pipeline includes RNA therapeutic candidates to potentially treat ornithine transcarbamylase (OTC) deficiency and cystic fibrosis (CF), both rare diseases.

Given current market conditions, we have made a strategic decision to streamline resources to focus on our mRNA therapeutics pipeline.

In our vaccine program, we have partnered with Seqirus, Inc.

(“CSL Seqirus”), a part of CSL Limited and one of the world’s leading influenza vaccine providers, on the development and commercialization of mRNA vaccines for COVID-19, influenza and certain other infectious diseases.

Business Updates

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The approval of KOSTAIVE in Europe, as well as the approval in Japan, are significant milestones, which further validate our LUNAR and STARR platforms, as well as sa-mRNA more generally as a meaningful modality.

Marketing Authorization Application filing of KOSTAIVE in United Kingdom

In June 2025, CSL Seqirus submitted a marketing authorization application (“MAA”) to the UK Medicines and Healthcare Products Regulatory Agency (MHRA) for KOSTAIVE.

Clinical Studies of KOSTAIVE (COVID-19 vaccine)

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In April 2025, we published a comprehensive analysis of safety data for KOSTAIVE ® , with a 12-month follow-up from the pivotal clinical study in Vietnam (NCT05012943), which had 17,582 participants who received at least one dose of the study vaccine (https://doi.org/10.1080/14760584.2025.2487542).

The study confirmed the favorable reactogenicity profile.

Acceptable tolerability of ARCT-154 was also observed in older participants and in those liable to severe consequences of COVID-19 due to underlying medical conditions.

ARCT-154 is the version of KOSTAIVE encoding the ancestral strain of the COVID-19 virus.

The study confirmed the favorable reactogenicity profile of the vaccine.

Acceptable tolerability of KOSTAIVE (ARCT-154) was also observed in older participants and individuals who are at risk of severe consequences of COVID-19 due to underlying medical conditions.

Long-term follow-up has not revealed any safety concerns, with no reports of myocarditis or pericarditis.

No serious consequences occurred in several pregnancies reported after vaccination.

Long-term data from this large trial suggest that the sa-mRNA COVID-19 vaccine (ARCT-154;

KOSTAIVE) is safe and well-tolerated.

In April 2025, our Japanese partner, Meiji, published an analysis characterizing the distribution and clearance of ARCT-154 encoded spike protein and non-structural proteins nsP1, nsP2, nsP3 and nsP4 in the lymph nodes and injection-site muscle in mice following a single vaccination.

Long-term data from this large trial suggest that the KOSTAIVE is safe and well-tolerated.

In April 2025, our Japanese partner, Meiji, published an analysis characterizing the distribution and clearance of KOSTAIVE (ARCT-154) encoded spike protein and non-structural proteins nsP1, nsP2, nsP3 and nsP4 in the lymph nodes and injection-site muscle in mice following a single vaccination.

The study showed the encoded spike protein reached its highest level approximately three days after vaccination and quickly disappeared from the injection site muscle.

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The study also confirmed that the self-replication is limited over time.

In July 2025, we published the manuscript ‘Immunogenicity of ARCT-154, a self-amplifying mRNA COVID-19 vaccine, in different booster settings’ ( https://doi.org/10.1016/j.jvacx.2025.100693 ) where we summarized extensive clinical data and concluded that KOSTAIVE (ARCT-154), administered as a homologous or heterologous booster after previous COVID-19 vaccination or natural exposure, provides robust, broad and durable immune responses against SARS-CoV-2 viruses.

In July 2025, a researcher from Tokyo University, Japan, published the manuscript ‘A second-generation, self-amplifying COVID-19 Vaccine:

World’s first approval and distribution in the Japanese market with vaccine hesitancy’ ( https://doi.org/10.1080/21645515.2025.2530291 ).

The manuscript positions KOSTAIVE as a second-generation mRNA vaccine, differentiating it based on effective dose, durability, and breadth of immune response, and summarizes experience from the first year of routine use of the vaccine in Japan.

In August 2025, the manuscript ‘Immunogenicity and Safety of Self-Amplifying mRNA COVID-19 Vaccine (ARCT-2303), With or Without Co-Administration of Seasonal Inactivated Influenza Vaccine in Adults:

a Phase 3, Randomised, Controlled, Observer-blind, Multicentre Study’ was accepted by eClinicalMedicine.

The manuscript includes the results of the recent pivotal Phase 3 clinical study and concludes that KOSTAIVE (ARCT-2303;

XBB.1.5 strain) induces a robust immune response against the vaccine variant of SARS-CoV-2 and can be co-administered with licensed influenza vaccines in adults with no impact on the safety or immunogenicity of either vaccine.

Seasonal Influenza Program Updates

A Phase 1 dose-finding safety and immunogenicity study was initiated in January 2024 in Australia and completed recruitment of 132 young and older participants.

The immunological testing and assessment of the study results are ongoing.

Under our collaboration with CSL Seqirus, we conducted a Phase 1 study of ARCT-2138, a sa-mRNA seasonal influenza vaccine candidate encoding haemagglutinin (HA) and neuraminidase (NA) of four seasonal influenza strains as recommended by the World Health Organization (WHO).

The study objectives were to evaluate the safety and tolerability and to describe the immune response of different dose levels of the vaccine in 100 young adults (18-49 years of age) and 35 older adults (≥65 years of age).

All tested dose levels of ARCT-2138 were immunogenic as measured by hemagglutinin-inhibition assay in both age groups, demonstrating a modest dose-response (≤2.1-fold) within the range of the tested doses (2-20 μg).

ARCT-2138 also induced NA-specific antibody response against all four influenza strains in all tested dose levels in both age groups.

In both age categories, HA- and NA-specific antibodies demonstrated a good persistence profile within 6 months post-vaccination.

In younger and older adults, the higher dose levels (12 μg and 20 μg) of ARCT-2138 tended to be more reactogenic than the comparator licensed influenza vaccines.

Most solicited adverse events were reported within 24 hours after vaccination and resolved within 2-4 days.

The frequencies of unsolicited adverse events and medically attended adverse events appeared to be comparable between ARCT-2138 and comparator vaccines.

No major safety concerns were raised from the study results.

Overall, the study showed the potential of a self-amplifying mRNA vaccine, encoding eight antigens, to induce an immune response in both young and older adults with a dose as low as 2 μg, and was tolerable across a dose range of 2 to 20 μg.

Pandemic Avian Influenza Program (H5N1 Influenza) Updates

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Fast Track Designation from the FDA is granted to vaccines intended to prevent serious conditions caused by infectious diseases.

The designation is designed to expedite the

development and review process, providing several benefits, including enhanced communication with the FDA, eligibility for priority review, and the possibility of a rolling review.

The designation is designed to expedite the development and review process, providing several benefits, including enhanced communication with the FDA, eligibility for priority review, and the possibility of a rolling review.

Key Updates on Arcturus-Owned mRNA Therapeutic Development Candidates

• LUNAR-CF/ARCT-032 .

Our program for cystic fibrosis is being supported in part by the Cystic Fibrosis Foundation (“CFF”).

In 2023, we initiated and successfully completed a safety and tolerability Phase 1 single ascending dose study of ARCT-032 (LUNAR-CF), our mRNA therapeutic candidate for cystic fibrosis (CF).

Thirty-two healthy participants (eight subjects in each of four dose cohorts) received a single inhaled dose of ARCT-032.

A subsequent protocol amendment to transition to a safety and tolerability Phase 1b clinical study of ARCT-032 in adults with CF received regulatory approval in August 2023 and completed dosing and follow-up visits for seven CF participants in August 2024, with each CF participant having received two administrations of ARCT-032 separated by two days.

o We are advancing enrollment in our ARCT-032 Phase 2 multiple ascending dose study to identify a safe and effective dose in Class I (null) and other CF participants who do not benefit from CFTR modulators.

IND including Phase 2 protocol was allowed to proceed in August 2024.

We initiated dosing in the study in US in December 2024.

This study is supported by safety and tolerability data collected in healthy volunteers (N = 32) and the two-administration Phase 1b study in CF adults.

Each participant in the Phase 2 CF study (NCT06747858) is expected to receive daily treatments of ARCT-032 over a period of 28 days.

LUNAR-CF (ARCT-032) is our mRNA therapeutic candidate for CF and it continues to progress in the clinic.

The initial nonclinical and clinical Phase 1 studies for CF were supported in part by the Cystic Fibrosis Foundation (“CFF”).

In 2023, we successfully completed a safety and tolerability Phase 1 single ascending dose study of ARCT-032.

Thirty-two healthy participants (eight subjects in each of four dose cohorts) received a single inhaled dose of ARCT-032 or placebo.

We then amended the protocol to conduct a safety and tolerability Phase 1b clinical study of ARCT-032 in adults with CF and

completed dosing and follow-up visits for seven CF participants in August 2024, with each participant having received two administrations of ARCT-032 separated by two days.

IND including the ongoing Phase 2 protocol was allowed to proceed in August 2024.

The Phase 2 study is an open-label, multiple ascending dose study to assess safety and efficacy of ARCT-032 in CF adults who do not benefit from current CFTR modulators, including those with Class I null mutations.

We initiated dosing in the study in the U.S.

in December 2024 and enrollment is ongoing.

Each participant in the Phase 2 CF study (NCT06747858) receives daily inhaled treatments of ARCT-032 for 28 days, with dose escalation expected to occur following safety reviews of the data.

• LUNAR-OTC/ARCT-810 .

The LUNAR-OTC development program addresses ornithine transcarbamylase (OTC) deficiency, a rare, life-threatening, genetic disease caused by mutations in the OTC gene that lead to dysfunctional or deficient OTC.

o In June 2024, we expanded the Phase 2 clinical program of ARCT-810 to the U.S.

with an open-label, multiple-dose study to evaluate pharmacodynamics and safety in adult and adolescent patients requiring clinical management for OTC-deficiency.

The first OTC deficient participant receiving 0.5mg/kg of ARCT-810 initiated dosing in December 2024.

We continue to enroll participants in the study.

Each participant is expected to receive five intravenous infusions administered over two months.

We previously completed the dosing phase (N=8;

0.3 mg/kg) of a placebo-controlled European Phase 2 double-blind study enrolling OTC deficient individuals.

On June 30, 2025, we announced positive multiple dosing data of ARCT-810 from two Phase 2 studies:

(i) a completed placebo-controlled study in Europe that randomized eight participants to ARCT-810 0.3 mg/kg or placebo;

and (ii) an open-label multiple ascending dose study in the U.S., with interim data from the initial three completed participants.

Both studies evaluate safety and pharmacodynamics in adult and adolescent patients requiring clinical management for OTC-deficiency.

We continue to enroll participants in the U.S.

Each participant in the U.S.

study is expected to receive five intravenous infusions administered over two months.

A Linear Mixed-Effects Model (LMM) was applied as an exploratory analysis to the Phase 2 glutamine and ureagenesis data.

LMM is suitable for small-N analyses, i.e.

rare disease trial datasets.

In the Phase 2 randomized European study, glutamine levels in patients who received multiple doses of ARCT-810 significantly (p-value = 0.016;

LMM) decreased during the dosing period.

In the Phase 2 open-label U.S.

study, all three participants had a sustained and significant (p-value = 0.004;

LMM) decrease in glutamine from baseline reaching normal levels after the first three doses.

In the combined analysis of both Phase 2 studies, significantly (p-value = 0.0055;

LMM) decreased glutamine levels were observed.

The ongoing U.S.

Phase 2 open-label study uses a modified and improved 15N-ureagenesis assay (Allegri et al., 2025).

The assay measures relative ureagenesis function (RUF) against a normal range established from healthy controls.

The assay is not impacted by ammonia scavengers, has low intraindividual variability, and can distinguish between symptomatic and asymptomatic OTC deficient patients.

In the first three participants in the ongoing Phase 2 open-label study, RUF statistically (p-value = 0.026, LMM) increased at all post treatment evaluations from a baseline of 29.0% (SD;

9.1%) to 43.7% (SD;

21.7%) at 28 days post-fifth dose.

These results suggest a progressive increase of functional OTC enzyme in the liver with continued administrations.

Two of the three participants achieved RUF > 50% indicating a clinically meaningful improvement in urea cycle flux.

ARCT-810 was generally safe and well tolerated in single dose Phase 1/1b and multi-dose Phase 2 studies, comprising 40 participants to date, including 20 OTC deficient participants.

The early studies enabled us to improve the tolerability of the infusion regime without using corticosteroid pre-treatment.

To date, no serious infusion-related reactions (“IRRs”) have been observed using the improved 3-hour IV regimen (N = 8;

up to 6 infusions) in the Phase 2 protocols.

Results of Operations

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The following table summarizes our total revenues for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30,

Change 2025 vs 2024

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Revenue decreased by $8.6 million during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

The decrease during the three months ended March 31, 2025 primarily relates to a $6.9 million decrease in revenue related to the CSL Collaboration Agreement, primarily caused by smaller milestone achievements and less amortization as KOSTAIVE transitions from a development program to the commercial phase.

The remaining decrease is due to a $1.7 million decrease in revenue related to the BARDA Contract as well other revenue agreements.

Revenue decreased by $21.6 million during the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

The decrease was due to reduced revenue related to the CSL collaboration, caused by less revenue from supply agreements and less amortization as KOSTAIVE transitions from a development program to the commercial phase.

Six Months Ended June 30,

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Revenue decreased by $30.2 million during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024.

The decrease was primarily attributable to a $28.4 million reduction in revenue related to the CSL collaboration during the current period, caused by less revenue from supply agreements and less amortization as KOSTAIVE transitions from a development program to the commercial phase.

Operating Expense

Our operating expenses consist of research and development and general and administrative expenses.

Three Months Ended March 31,

Three Months Ended June 30,

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The following table presents our total research and development expenses by category:

Three Months Ended March 31,

Three Months Ended June 30,

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Our 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 related to conducting research and development activities.

Research and development expenses were $34.9 million for the three months ended March 31, 2025, compared with $53.6 million for the three months ended March 31, 2024, primarily reflecting a decrease in manufacturing costs related to the LUNAR-COVID and LUNAR-FLU programs, offset by an increase in clinical and manufacturing costs related to the LUNAR-CF and LUNAR-OTC programs as we have shifted our focus to our clinical stage programs.

The remaining decrease is primarily attributable to a decrease in payroll and benefits costs and a decrease in facilities and equipment costs.

We expect that our research and development efforts and associated costs will continue to be substantial over the next several years as our pipeline progresses.

Research and development expenses were $29.6 million for the three months ended June 30, 2025, compared with $58.7 million for the three months ended June 30, 2024.

The decrease was primarily driven by lower manufacturing costs related to the LUNAR-COVID, LUNAR-FLU, and LUNAR-CF programs, as well as reduced clinical trial expenses associated with the LUNAR-COVID and LUNAR-OTC programs.

Additional decreases were attributable to lower payroll and benefits costs.

These reductions were partially offset by increased clinical costs related to the LUNAR-CF program as we began Phase II clinical trials in fiscal year 2025.

Research and development expenses were $64.5 million for the six months ended June 30, 2025, compared with $112.2 million for the six months ended June 30, 2024.

The decrease was primarily driven by lower manufacturing and clinical costs related to the LUNAR-COVID program, reflecting the program’s transition from a development program to the commercial phase.

decreases were attributable to lower payroll and benefits expenses, as well as reduced facilities and equipment costs as we downsized from three to two facilities.

These reductions were partially offset by increased clinical costs related to the LUNAR-CF program.

Early-stage programs represent programs that are in the pre-clinical or Phase 1 clinical stage and may be partnered or unpartnered, and primarily includes the LUNAR-FLU program which is partnered with CSL Seqirus.

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Facilities and equipment expenses include rent, common area maintenance (“CAM”) costs, depreciation, shipping costs and various other costs related to the operation of our two office and laboratory locations.

These costs decreased during the first quarter of 2025 as compared to the first quarter of 2024, as we downsized from three to two facilities.

These costs decreased during the first six months of 2025 as compared to the first six months of 2024, as we downsized from three to two facilities.

Facilities and equipment expenses are not expected to increase during the next twelve months.

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General and administrative expenses consist primarily of salaries and related benefits for our executive, administrative and accounting functions and professional service fees for legal and accounting services as well as other general and administrative expenses.

General and administrative expenses were $11.3 million for the three months ended March 31, 2025, compared with $14.9 million for the three months ended March 31, 2024.

The decrease in general and administrative expenses was primarily attributable to reduced share-based compensation costs.

Finance income (expense), net

Three Months Ended March 31,

General and administrative expenses were $10.3 million for the three months ended June 30, 2025, compared with $12.3 million for the three months ended June 30, 2024.

General and administrative expenses were $21.7 million for the six months ended June 30, 2025, compared with $27.2 million for the six months ended June 30, 2024.

The decreases in both periods were primarily due to reduced share-based compensation expense as well as reduced payroll and benefits.

Finance income, net

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Interest income

Interest income is generated on cash and cash equivalents.

The decrease in interest income for the three months ended March 31, 2025 as compared to the comparable period last year was primarily the result of lower interest rates and a decrease in cash and cash equivalents during the three months ended March 31, 2025.

Interest income is generated on the Company’s cash and cash equivalents.

The decrease in interest income for the three and six months ended June 30, 2025, compared to the same periods in 2024, was primarily due to lower interest rates and a reduced cash balance.

Off-balance sheet arrangements

Through March 31, 2025, we have not entered into and did not have any relationships with unconsolidated entities or financial collaborations, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Through June 30, 2025, we have not entered into and did not have any relationships with unconsolidated entities or financial collaborations, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Liquidity and Capital Resources

From the Company’s inception through the quarter ended March 31, 2025, the Company has funded its operations principally with the proceeds from revenues earned through collaboration agreements and government contracts, the sale of capital stock and long-term debt.

Through the first quarter of 2025, we have achieved a total of approximately $488.1 million in upfront payments and milestones from CSL Seqirus, including milestones of $15.0 million achieved in the current quarter.

From the Company’s inception through the quarter ended June 30, 2025, the Company has funded its operations principally with the proceeds from revenues earned through collaboration agreements and government contracts, the sale of capital stock and long-term debt.

Through the second quarter of 2025, we have achieved a total of approximately $509.7 million in upfront payments and milestones from CSL Seqirus, including milestones of $20.0 million achieved in the current quarter.

We expect to receive future payments from CSL Seqirus primarily by meeting future milestones related to the CSL Collaboration Agreement.

As of March 31, 2025, the Company’s balance of cash and cash equivalents, including restricted cash, was $273.8 million.

As of June 30, 2025, the Company’s balance of cash and cash equivalents, including restricted cash, was $253.4 million.

CSL Seqirus, Inc.

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We received an up-front payment of $200.0 million during the fourth quarter of 2022.

We will be eligible to receive development milestones totaling more than $1.3 billion if all products are registered in the licensed fields.

We will be eligible to receive development milestones totaling more than $1.3 billion if all products

are registered in the licensed fields.

We will also be entitled to receive up to $3.0 billion in commercial milestones based on “net sales” of vaccines in the various fields.

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Wells Fargo Credit Agreement

On April 21, 2023, the Company’s wholly-owned subsidiary, Arcturus Therapeutics, Inc.

entered into a credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”) whereby Wells Fargo agreed to make a $50.0 million revolving credit line available to the Company (as amended, the “Wells Fargo Loan”) with each Wells Fargo Loan evidenced by a revolving line of credit note (each, a “Note”).

On April 21, 2023, our wholly-owned subsidiary, Arcturus Therapeutics, Inc.

entered into a credit agreement with Wells Fargo Bank, National Association (“Wells Fargo”) whereby Wells Fargo agreed to make a $50.0 million revolving credit line available to us (as amended, the “Wells Fargo Loan”) with each Wells Fargo Loan evidenced by a revolving line of credit note (each, a “Note”).

On June 26, 2024, the parties entered into Amendment No.

1 to the Wells Fargo Loan, whereby the term was

extended by one year to April 2026.

During the three months ended March 31, 2025, we drew down $15.0 million which was subsequently repaid in April 2025.

1 to the Wells Fargo Loan, whereby the term was extended by one year to April 2026.

Borrowings under the agreement will bear interest at a rate of 1.00% above either the Daily Simple SOFR or Term SOFR (as such terms are defined in the Wells Fargo Loan), with “SOFR” being the rate per annum equal to the secured overnight financing rate as administered by the Federal Reserve Bank of New York.

If an Event of Default (as defined in the credit agreement) occurs, then all Wells Fargo Loans shall bear interest at a rate equal to 2.00% above the interest rate applicable immediately prior to the occurrence of the Event of Default.

The original term of the agreement is two years, with an option for one-year renewals subject to Wells Fargo approval and the Company furnishing to Wells Fargo a non-refundable commitment fee equal to 0.25% of the Wells Fargo Loan amount for each such renewal.

The original term of the agreement is two years, with an option for one-year renewals subject to Wells Fargo approval and we furnishing to Wells Fargo a non-refundable commitment fee equal to 0.25% of the Wells Fargo Loan amount for each such renewal.

There is no penalty for terminating the agreement.

There is no penalty for terminating the facility prior to the maturity date of the Wells Fargo Loan.

As collateral, the Company has agreed to pledge $55.0 million in cash to be held at the Company’s securities accounts with Wells Fargo Securities, LLC, an affiliate of Wells Fargo, pursuant to a security agreement.

As collateral, the Company has agreed to pledge $55.0 million in cash to be held at our securities accounts with Wells Fargo Securities, LLC, an affiliate of Wells Fargo, pursuant to a security agreement.

Grant from the Biomedical Advanced Research and Development Authority

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It provides for reimbursement by BARDA of our permitted costs up to $63.2 million.

As of March 31, 2025, the remaining available funding net of revenue earned was $36.1 million.

As of June 30, 2025, the remaining available funding net of revenue earned was $32.2 million.

Vinbiocare Agreement

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In October 2022, in association with the termination of the Vinbiocare License and Supply Agreements, we signed the Vinbiocare Support Agreement with Vinbiocare which continues Vinbiocare’s clinical obligations and reserved a portion of the original $40.0 million upfront payment received from the License and Supply Agreements to be paid over the future periods.

The Vinbiocare Support Agreement requires us to pay to Vinbiocare certain limited payments, including upon the occurrence of specified events through the first quarter of 2025.

The Vinbiocare Support Agreement required us to pay to Vinbiocare certain limited payments, including upon the occurrence of specified events through the first quarter of 2025.

Vinbiocare is also eligible to receive a single digit percentage of amounts received by Arcturus on net sales, if any, of ARCT-154 (or next-generation COVID vaccine) up to a capped amount.

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Our future capital requirements are difficult to forecast and will depend on many factors that are out of our control.

If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and adversely affected.

If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and

adversely affected.

There can be no assurance that we will be able to obtain additional needed financing on acceptable terms or at all.

Additionally, equity or debt financings may have a dilutive effect on the holdings of our existing shareholders.

We expect to continue to incur additional losses in the long term, and we will need to execute on milestones within the CSL Collaboration Agreement, raise additional debt or equity financing or enter into additional partnerships to fund development.

We expect to continue to incur additional losses in the long term, and we will need to execute on the remaining milestones within the CSL Collaboration Agreement, raise additional debt or equity financing or enter into additional partnerships to fund development.

Our ability to transition to profitability is dependent on regulatory approvals and subsequent sales of KOSTAIVE, executing on milestones within the CSL Collaboration Agreement and identifying and developing other successful mRNA drug and vaccine candidates.

If we are not able to achieve planned milestones or incur costs in excess of our forecasts, we will need to reduce discretionary spending, discontinue the development of some or all of our programs, which will delay part of our development programs, all of which will have a material adverse effect on our ability to achieve our intended business objectives.

The following table shows a summary of our cash flows for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table shows a summary of our cash flows for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

(in thousands)

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Operating Activities

Net cash used in operating activities was $35.1 million for the three months ended March 31, 2025, compared to a $5.6 million for the three months ended March 31, 2024.

The increase was primarily driven by a $15.6 million use of cash in accounts receivable due to the timing of invoicing and collections.

It was also impacted by a $15.5 million unfavorable change in both accrued liabilities and accounts payable related to payment timing, and a $5.8 million use of cash in deferred revenue, reflecting the recognition of amounts received under CSL supply agreements.

Additionally, a $3.4 million reduction in non-cash share-based compensation contributed to the higher cash usage.

These factors were partially offset by an $12.7 million improvement in net loss.

Net cash used in operating activities was $40.9 million for the six months ended June 30, 2025, compared to $35.7 million for the six months ended June 30, 2024.

The increase in cash outflows was primarily driven by working capital changes, including a total decrease of $22.1 million in accrued liabilities and accounts payable due to increased vendor payments during the period.

These impacts were partially offset by a $14.1 million improvement in net loss after non-cash adjustments and a $4.2 million cash inflow related to changes in prepaid and other current assets.

Investing Activities

Net cash used in investing activities of $0.1 million for the three months ended March 31, 2025, and $0.2 million for the three months ended March 31, 2024, reflected the acquisition of property and equipment.

Net cash used in investing activities of $0.1 million for the six months ended June 30, 2025, and $0.6 million for the six months ended June 30, 2024, reflected the acquisition of property and equipment.

Financing Activities

Net cash provided by financing activities was $15.2 million for the three months ended March 31, 2025, compared to a $2.2 million for the three months ended March 31, 2024.

The increase was primarily due to the receipt of $15.0 million in debt proceeds during the current quarter.

Net cash provided by financing activities was $0.5 million for the six months ended June 30, 2025, compared to $4.6 million for the six months ended June 30, 2024.

The decrease was primarily driven by reduced stock option exercise activity in 2025.

Funding Requirements

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• maintaining and/or expanding our manufacturing network and capabilities;

• the terms and timing of any other strategic alliance, licensing and other arrangements that we may establish, including those with CSL Seqirus and CSL Seqirus’ arrangement with Meiji, and any related payments thereunder, including payments related to completion of milestones under our arrangements with any of these parties;

• the initiation, progress, timing and completion of preclinical studies and clinical trials for our product candidates;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis