What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 102 added, 79 removed, 128 unchanged (59% 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, 2026.

for the three and six months ended June 30, 2026.

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

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We have ongoing Phase 2 clinical studies for our RNA therapeutic candidates to potentially treat ornithine transcarbamylase (OTC) deficiency and cystic fibrosis (CF).

We developed the world’s first approved self-amplifying messenger RNA (sa-mRNA) vaccine, KOSTAIVE ® (“KOSTAIVE”), which we have partnered with Seqirus, Inc.

(“CSL Seqirus”), a part of CSL Limited.

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

KOSTAIVE has achieved approval in Japan, the European Union and the United Kingdom as a vaccine against COVID-19, and sales of KOSTAIVE began in Japan in October 2024.

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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.

In our vaccine program, we have partnered with CSL Seqirus, one of the world’s leading influenza vaccine providers, on the development and commercialization of mRNA vaccines for COVID-19, influenza and other infectious diseases.

In CSL Limited’s half-year results presented on February 11, 2026, CSL Limited reported an accounting write-down of approximately $430 million attributable to our collaboration agreement with CSL Seqirus, citing declining COVID-19 disease burden and more onerous U.S.

regulatory requirements.

In our vaccine program, following termination of the CSL Collaboration Agreement, we regained strategic control of KOSTAIVE ® and our broader vaccine portfolio, subject to ongoing arrangements with Meiji in Japan for the Northern Hemisphere 2026-2027 season.

Business Updates

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Two subjects experienced SAEs after the dosing period that were unrelated to ARCT-032, and the safety review committee approved the study to proceed.

After amending the protocol, a fourth cohort of up to 20 subjects began enrolling in March 2026.

The fourth cohort will monitor 10 mg daily dosing over 12 weeks for safety and evidence of early clinical benefits.

After amending the protocol, a fourth cohort of up to 20 subjects began enrolling in March 2026 and continues to advance with active screening and enrollment in the United States and Israel.

The fourth cohort was initiated with 10 mg administered once daily via inhalation over a 12-week period to better assess longer term safety, tolerability and early evidence of clinical efficacy.

• 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.

We continue to enroll participants in the open-label multiple ascending dose Phase 2 study of ARCT-810.

We have completed enrollment in the open-label multiple ascending dose Phase 2 study of ARCT-810 and all enrolled subjects have completed study drug dosing .

The study evaluates safety and pharmacodynamics in adult and adolescent patients requiring clinical management for OTC deficiency.

In March 2026, we held a type C meeting with the FDA to discuss our plans for a proposed future pediatric study.

The FDA provided a path forward toward a pivotal pediatric study that would require us to collect additional exploratory data to establish the optimal dose and therapeutic effect.

The FDA also advised scheduling an End-of-Phase 2 (EOP2) meeting to discuss the pivotal study design, including the use of biomarkers.

Vaccine Collaboration with CSL Seqirus

In November 2022, we entered into a Collaboration and License Agreement (as amended, the “CSL Collaboration Agreement”) with Seqirus, Inc.

(“CSL Seqirus”), a part of CSL Limited, and one of the world’s leading influenza vaccine providers, for global exclusive rights to research, develop, manufacture and commercialize self-amplifying mRNA vaccines against COVID-19, influenza and other infectious diseases and global non-exclusive rights to pandemic pathogens.

Meiji has launched in Japan the two-dose vial of KOSTAIVE updated for the JN.1 variant XEC in August 2025, following approval from Japan’s Pharmaceuticals and Medical Devices Agency (PMDA).

Marketing Authorization Application filing of KOSTAIVE in United Kingdom

In January 2026, the UK Medicines and Healthcare products Regulatory Agency (MHRA) under the International Recognition Procedure (IRP) granted marketing authorization for KOSTAIVE for individuals 18 years and older.

regulatory requirements.

We continue to evaluate supplementary data to inform regulatory discussions and preparation for an End-of-Phase 2 meeting regarding the potential path forward across adult and pediatric development.

Thermo Fisher Agreement

On June 26, 2026, we entered into a series of agreements with Thermo Fisher Scientific Inc.

(“Thermo Fisher”) and certain of Thermo Fisher’s affiliates to establish a strategic collaboration for the provision of contract development and manufacturing organization (“CDMO”) and contract research organization (“CRO”) services in connection with the development of ARCT-032, our investigational mRNA therapeutic for cystic fibrosis (“CF”).

The collaboration is structured through (i) a Master Services Agreement (the “Thermo Fisher MSA”) between Thermo Fisher and Arcturus and (ii) a Project Addendum for Development Services between Patheon UK Limited, a Thermo Fisher affiliate (“Patheon”), and Arcturus (the “Project Agreement”).

Master Services Agreement

The Thermo Fisher MSA establishes the framework under which Thermo Fisher and its affiliates will provide CRO and CDMO services to Arcturus from time to time pursuant to the Project Agreement and any additional individual project addendums.

CRO services will be provided through PPD, Inc., Thermo Fisher’s affiliated contract research organization (“PPD”), and CDMO services will be provided through Thermo Fisher’s Pharma Services division.

Under the Thermo Fisher MSA, Thermo Fisher will contribute up to $40 million of clinical manufacturing services for ARCT-032, and Arcturus will engage PPD for up to $40 million in CRO services.

Upon regulatory approval of ARCT-032, Thermo Fisher would receive exclusive commercial manufacturing rights for the product for a specified duration, on terms to be set forth in a definitive commercial supply agreement to be negotiated in good faith by the parties.

Arcturus may engage an alternative manufacturer only if Thermo Fisher is unable to supply, limited solely to the quantities and duration necessary to address the supply shortfall.

The Thermo Fisher MSA has an initial term of five years from the effective date and automatically renews for successive one-year periods unless either party provides at least 90 days’ prior written notice of non-renewal.

Project Agreement

Under the Project Agreement, the services to be provided include technical transfer, engineering batches, manufacture of clinical trial materials, manufacture of process performance qualification batches, open-label extension batches, drug product fill and finish, product release, and stability studies.

The Project Agreement remains in effect from its effective date until the completion of all services or earlier termination under the Thermo Fisher MSA.

Termination of Vaccine Collaboration with CSL Seqirus

On August 3, 2026, the Company entered into the Termination Agreement with CSL Seqirus pursuant to which the Company and CSL Seqirus mutually terminated the CSL Collaboration Agreement, effective as of such date.

Under the Termination Agreement, the Company received a one-time cash payment of $12.0 million from CSL Seqirus.

In addition, the Company was released from a liability and from repayment of an R&D credit with an aggregate value of approximately $16.0 million.

As a result of the termination, the Company regained strategic control of its vaccine portfolio, including KOSTAIVE ® and its vaccine programs for seasonal influenza, pandemic influenza, respiratory syncytial virus (“RSV”) and Epstein-Barr virus (“EBV”), subject to ongoing arrangements with Meiji Seika Pharma (“Meiji”) for the Northern Hemisphere 2026-2027 season, which is

expected to end on or around June 30, 2027.

Beginning with the Northern Hemisphere 2027–2028 season, the Company expects to work directly with Meiji for KOSTAIVE ® activities in Japan.

We are obligated to pay CSL Seqirus single-digit royalties and revenue-sharing payments on our future commercialization of vaccine products formerly licensed under the CSL Collaboration Agreement and successor products, where certain CSL Seqirus intellectual property is incorporated into such products, subject to agreed terms and conditions and applicable time limitations.

With respect to certain of the vaccine products, we are obligated to pay a percentage of upfront payments received from future licensees up to pre-agreed amounts.

As a result of the termination, we expect deferred revenue from CSL Seqirus of approximately $5.2 million associated with remaining performance obligations under the CSL Collaboration Agreement to be recognized during the third quarter of 2026.

KOSTAIVE ® for Japan

Meiji launched in Japan the two-dose vial of KOSTAIVE updated for the JN.1 variant XEC in August 2025.

In June 2026, Meiji filed a Partial Change Application for KOSTAIVE updated for the NB.1.8.1 variant in a two-dose vial with Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) to support commercialization for the 2026-2027 season in Japan.

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,

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Grant revenue

Revenue decreased by $27.3 million during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Revenue decreased by $25.3 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025.

The decline was primarily driven by lower revenue recognized under the CSL collaboration, reflecting reduced supply agreement revenue and decreased amortization of deferred revenue as KOSTAIVE transitions from development to the commercial phase.

Revenue also decreased due to lower grant revenue, primarily related to our agreement with BARDA, partially offset by increased grant revenue from the Gates Foundation.

Grant revenue also decreased primarily related to our agreement with BARDA, partially offset by increased grant revenue from the Gates Foundation.

Six Months Ended June 30,

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Collaboration revenue

Grant revenue

Revenue decreased by $52.7 million during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025.

Grant revenue also decreased primarily related to our agreement with BARDA, partially offset by increased grant revenue from the Gates Foundation.

Operating Expenses

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

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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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Six Months Ended June 30,

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Total research and development expenses, net

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 $21.5 million for the three months ended March 31, 2026, compared with $34.9 million for the three months ended March 31, 2025.

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

Additional decreases were attributable to lower payroll and benefits costs associated with lower stock‑based compensation expense and a reduction in headcount.

These reductions were partially offset by higher manufacturing costs related to LUNAR-OTC.

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.

Discovery technologies represent our efforts to expand our product pipeline and are primarily related to pre-partnered studies and new capabilities assessment.

A few of our programs are part of our collaborative relationships.

Research and development expenses were $17.5 million for the three months ended June 30, 2026, compared with $29.6 million for the three months ended June 30, 2025.

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

Additional decreases were attributable to lower payroll and benefits costs associated with lower share-based compensation expense and a reduction in headcount.

Research and development expenses were $39.0 million for the six months ended June 30, 2026, compared with $64.5 million for the six months ended June 30, 2025.

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

Additional decreases were attributable to lower payroll and benefits costs associated with lower share-based compensation expense and a reduction in headcount, as well as lower facilities costs.

Early-stage programs represent programs that are in the preclinical or Phase 1 clinical stage and may be partnered or unpartnered.

Early-stage programs include our Phase 1 clinical stage LUNAR-FLU program which was formerly partnered with CSL Seqirus.

Discovery technologies represent our efforts to expand our product pipeline and are primarily related to pre-partnered studies and new capabilities.

The related expenses may be partially offset with funds that have been reimbursed or awarded to us and consist of external manufacturing costs, lab supplies, equipment, and consulting and professional fees.

Expenses for both early-stage programs and discovery technologies are expected to decrease as we shift our focus to later-stage programs.

Payroll and benefits primarily consists of employee salaries and benefits, share-based compensation and consultant costs.

We expect that payroll and benefits costs will not increase over the next twelve months.

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.

We expect that facilities and equipment expenses will not increase over the next twelve months.

Expenses for both early-stage programs and discovery technologies are expected to increase slightly over the next twelve months as we continue to advance both our early- and later-stage programs.

General and Administrative Expenses

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 $9.5 million for the three months ended March 31, 2026, compared with $11.3 million for the three months ended March 31, 2025.

The decrease was primarily due to reduced share-based compensation expense as well as reduced payroll and benefits associated with reductions in headcount.

General and administrative expenses were $11.0 million for the three months ended June 30, 2026, compared with $10.3 million for the three months ended June 30, 2025.

The slight increase was related to legal and professional fees offset by reduced share-based compensation.

General and administrative expenses were $20.5 million for the six months ended June 30, 2026, compared with $21.7 million for the six months ended June 30, 2025.

The decrease was primarily due to lower share-based compensation expense, reduced payroll and benefits costs resulting from lower headcount, and lower facilities costs.

Finance income, net

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Interest income

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

The decrease in interest income for the three months ended March 31, 2026, compared to the same period in 2025, was primarily due to lower interest rates and a reduced cash balance.

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

The decrease in interest income for the three and six months ended June 30, 2026, compared to the same period in 2025, was primarily due to lower interest rates and a reduced cash balance.

Off-balance sheet arrangements

Through March 31, 2026, 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, 2026, 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, 2026, 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 2026, we have achieved a total of approximately $514.1 million in upfront payments and milestones from CSL Seqirus.

As of March 31, 2026, the Company’s balance of cash and cash equivalents, including restricted cash, was $213.4 million.

From the Company’s inception through the quarter ended June 30, 2026, 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 2026, we have received a total of approximately $514.3 million in upfront payments and milestones from CSL Seqirus.

As of June 30, 2026, the Company’s balance of cash and cash equivalents was $191.5 million.

CSL Seqirus, Inc.

Collaboration and License Agreement

In 2022, we entered into the CSL Collaboration Agreement with CSL Seqirus, a part of CSL Limited, one of the world’s leading influenza vaccine providers, for the global exclusive rights to research, develop, manufacture and commercialize mRNA vaccines.

CSL Seqirus received exclusive global rights to our technology for vaccines against SARS-CoV-2 (COVID-19), influenza and other infectious diseases with non-exclusive rights to pandemic pathogens.

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

In addition, we are entitled to receive a 40% share of net profits from COVID-19 vaccine sales and up to low double-digit royalties of annual net sales for vaccines against influenza and the other three specified infectious disease pathogens, as well as royalties on revenues from vaccines that may be developed for pandemic preparedness.

The CSL Collaboration Agreement sets forth how CSL Seqirus and we shall collaborate to research and develop vaccine candidates.

In the COVID-19 field, we will lead activities for certain regulatory filings for ARCT-154 in the US and Europe and for research and development activities of a next-generation COVID vaccine candidate.

CSL Seqirus will lead and be responsible for all other research and development in COVID-19, influenza and the other fields.

On May 30, 2025, we initiated an arbitration against CSL Seqirus before the International Chamber of Commerce, seeking payment of a milestone under the CSL Collaboration Agreement based on the European Commission’s grant of marketing authorization for a presentation of KOSTAIVE ® in the European Union.

In November 2022, we entered into the CSL Collaboration Agreement with CSL Seqirus, a part of CSL Limited, one of the world’s leading influenza vaccine providers, for global exclusive rights to research, develop, manufacture and commercialize mRNA vaccines.

Following the end of the second quarter of 2026, we entered into the Termination Agreement with CSL Seqirus, pursuant to which we mutually terminated the CSL Collaboration Agreement effective as of August 3, 2026.

Under the Termination Agreement, we received a one-time cash payment of $12.0 million from CSL Seqirus.

In addition, we were released from a liability and from repayment of an R&D credit with an aggregate value of approximately $16.0 million.

We also regained strategic control of our vaccine portfolio, including KOSTAIVE ® and our vaccine programs for seasonal influenza, pandemic influenza, RSV and EBV, subject to ongoing arrangements with Meiji for the Northern Hemisphere 2026-2027 season.

With respect to certain of the vaccine products, we are obligated to pay a percentage of upfront payments received from future licensees up to pre-agreed amounts.

In connection with the termination, the parties agreed to dismiss the arbitration and exchanged mutual releases of claims.

Thermo Fisher Agreement

On June 26, 2026, we entered into a series of agreements with Thermo Fisher in support of the clinical development of ARCT-032.

Under the agreement, Thermo Fisher has agreed to provide up to $40.0 million of qualifying clinical manufacturing services.

We believe the agreement may reduce our future cash requirements associated with the clinical development of ARCT-032 by funding a portion of those development activities, subject to the terms of the agreement.

See Note 8 to the condensed consolidated financial statements for additional information regarding the 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, 2026, the remaining available funding net of revenue earned was $25.8 million.

Wells Fargo Credit Agreement

In December 2025, the Company terminated its revolving credit agreement with Wells Fargo.

No amounts were outstanding at termination.

Accordingly, the Company had no debt outstanding as of March 31, 2026, and cash previously pledged as collateral is no longer classified as restricted cash.

As of June 30, 2026, the remaining available funding net of revenue earned was $24.6 million.

General Financial Resources

A portion of our current cash balance is expected to be utilized during fiscal year 2026 to fund (i) advances to our LUNAR-CF program in clinical trials, (ii) the continued Phase 2 trial of ARCT-810, our LUNAR-OTC candidate, (iii) expenses incurred prior to customer payments under the CSL Collaboration Agreement and BARDA agreement and (iv) continued exploratory activities related to our platform and other general administrative activities.

A portion of our current cash balance is expected to be utilized during fiscal year 2026 to fund (i) advances to our LUNAR-CF program in clinical trials, (ii) the continued Phase 2 trial of ARCT-810, our LUNAR-OTC candidate, (iii) expenses incurred prior to customer payments under the BARDA agreement and any transition or settlement-related activities following termination of the CSL Collaboration Agreement and (iv) continued exploratory activities related to our platform and other general administrative activities.

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

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The following table shows a summary of our cash flows:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

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Financing activities

Net decrease in cash and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Operating Activities

Net cash used in operating activities was $19.4 million for the three months ended March 31, 2026, compared to $35.1 million for the three months ended March 31, 2025.

The decrease in cash outflows was primarily driven by improved collections in accounts receivable.

It was also impacted by more favorable changes in deferred revenue.

These factors were partially offset by a higher net loss and a reduction in non-cash stock-based compensation.

Net cash used in operating activities was $39.4 million for the six months ended June 30, 2026, compared to $40.9 million for the six months ended June 30, 2025.

The decrease in cash outflows was primarily driven by improved collections in accounts receivable and more favorable changes in accrued liabilities and deferred revenue.

These factors were partially offset by less favorable changes in accounts payable and prepaid expenses.

Investing Activities

Net cash provided by investing activities was nominal for the three months ended March 31, 2026, compared with net cash used of $0.1 million for the three months ended March 31, 2025.

Activity in both periods primarily reflected the purchase and sale of property and equipment.

Net cash provided by investing activities was $0.1 million for the six months ended June 30, 2026, compared with net cash used of $0.1 million for the six months ended June 30, 2025.

The increase in cash provided by investing activities was primarily driven by the absence of property and equipment purchases during the current year period.

Financing Activities

Net cash provided by financing activities was nominal for the three months ended March 31, 2026, compared to $15.2 million for the three months ended March 31, 2025.

The decrease in cash inflows was primarily driven by borrowings under the Company’s line of credit in the prior year period, with no comparable activity in the current year period.

Net cash provided by financing activities was nominal for the six months ended June 30, 2026, compared to $0.5 million for the six months ended June 30, 2025.

The decrease in cash provided by financing activities was primarily driven by lower proceeds from employee stock option exercises.

Funding Requirements

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As a result, we will require additional capital to fund our operations in order to support our long-term plans.

We believe that our current cash position will be sufficient to meet our anticipated cash requirements through at least the next twelve months, assuming, among other things, no significant unforeseen expenses and continued funding from partners at anticipated levels.

We intend to seek additional capital through equity and/or debt financings, collaborative or other funding arrangements with partners or through other sources of financing when and as needed.

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Our future funding requirements are difficult to forecast and will depend on many factors, including the following:

• the development of our LUNAR-COV19 and LUNAR-FLU vaccine candidates;

• the achievement of milestones under our strategic alliance agreements;

• the development of our cystic fibrosis and OTC deficiency therapeutic candidates;

• 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 terms and timing of any other strategic alliance, licensing and other arrangements that we may establish, including transition arrangements with CSL Seqirus, arrangements with Meiji and any new collaboration arrangements, and any related payments thereunder;

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

• the maintenance and deployment of vaccine assets that we regained as a result of the Termination Agreement with CSL Seqirus;

• the number and characteristics of product candidates that we pursue;

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• delays that may be caused by changing regulatory requirements;

• the cost and timing of hiring new employees to support our continued growth;

• the cost and timing of hiring new employees to support growth;

• the costs involved in filing and prosecuting patent applications and enforcing and defending patent claims;

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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