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Item 1. Business

2022-03-01 compared with 2021-03-01 · 451 added, 472 removed, 290 unchanged (76% of the section changed)

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

In addition to our messenger RNA (“mRNA”) platform, our proprietary lipid nanoparticle (“LNP”) delivery system, LUNAR, has the potential to enable multiple nucleic acid medicines, and our proprietary Self-Transcribing and Replicating RNA (“STARR”) technology has the potential to provide longer-lasting RNA and sustained protein expression.

We are leveraging our proprietary platform relating to LUNAR and our nucleic acid technologies to develop and advance a pipeline of mRNA-based vaccines and therapeutics for infectious diseases and rare genetic disorders with significant unmet medical needs.

Our key proprietary technology has the potential to address the major hurdles in RNA development, namely the effective and safe delivery of RNA therapeutics to disease-relevant target tissues.

We believe the versatility of our platform to target multiple tissues, its compatibility with various nucleic acid therapeutics, and our expertise in developing scalable manufacturing processes puts us in a leading position to deliver on the next generation of nucleic acid medicines.

We are a clinical stage company with the commencement of clinical trials in two of our programs and further expanded our pipeline with the initiation of our COVID-19 and flu vaccine programs.

We continued to progress our existing pipeline and collaborations, and have, with our manufacturing partners, manufactured current good manufacturing practice (“cGMP”) batches yielding significant quantities of clinical trial materials for ARCT-810 (LUNAR-OTC) and ARCT-021 (LUNAR-COV19 Vaccine), which includes lyophilized vaccine.

We intend to advance ARCT-021(LUNAR-COV19 Vaccine) into Phase 3 and to request Emergency Use Authorization (“EUA”), commence a Phase 2 multiple-dose study of ARCT-810 in OTC-deficient patients in mid-2021, file an Investigational New Drug (“IND”) or Clinical Trial Application (“CTA”) for a first in human study in Q4 2021 for ARCT-032 (LUNAR-CF), and evaluate in preclinical studies the efficacy and safety of a seasonal influenza vaccine.

We are focused on expanding our portfolio of internally-owned and partnered programs to advance our clinical and preclinical candidates in a timely and cost-effective manner.

We are a late-stage global clinical messenger RNA medicines company focused on the development of infectious disease vaccines and significant opportunities within liver and respiratory rare diseases.

In addition to our messenger RNA (“mRNA”) platform, our proprietary lipid nanoparticle (“LNP”) delivery system, LUNAR®, has the potential to enable multiple nucleic acid medicines, and our proprietary self-amplifying mRNA technology (Self-Transcribing and Replicating RNA, or STARR™, technology) has the potential to provide longer-lasting RNA and sustained protein expression at lower dose levels.

We are leveraging our proprietary LUNAR platform and our nucleic acid technologies to develop and advance a pipeline of mRNA-based vaccines and therapeutics for infectious diseases and rare genetic disorders with significant unmet medical needs.

We continue to expand this platform by adding new innovative delivery solutions that allow us to expand our discovery efforts.

Our proprietary LUNAR technology is intended to address the major hurdles in RNA drug development, namely the effective and safe delivery of RNA therapeutics to disease-relevant target tissues.

We believe the versatility of our platform to target multiple tissues, its compatibility with various nucleic acid therapeutics, and our expertise in developing scalable manufacturing processes can allow us to deliver on the next generation of nucleic acid medicines.

We were a preclinical company until June 2020, when we initiated our first Phase 1 study for our mRNA-based therapeutic candidate for ornithine transcarbamylase (“OTC”).

With the launch of our COVID-19 vaccine program in March of 2020 and the subsequent initiation by our collaborator in September 2021 of the Phase 3 arm of the Phase 1/2/3 study for our COVID-19 vaccine in Vietnam, we progressed to a late-stage clinical company.

In addition, we continued to progress our therapeutic pipeline and collaborations, and to expand and improve our platform technologies.

We continue to focus our development efforts on our distinct, proprietary self-amplifying mRNA technology, which is a significant component of most of our product candidates, including our lead COVID 19 vaccine candidates.

During 2021, we entered into a significant collaboration with Vinbiocare Biotechnology Joint Stock Company (Vinbiocare), a member company of the Vingroup Joint Stock Company (Vingroup) group of companies, whereby we provide technical expertise and support services to Vinbiocare to assist in the build out of a manufacturing facility in Vietnam.

Together with Vinbiocare, we advanced ARCT-154, our investigational next generation, self-amplifying mRNA-based vaccine for COVID-19, into a Phase 1/2/3 study in Vietnam, which is being funded and sponsored by Vinbiocare.

To date, over 18,000 subjects have been dosed in the Phase 1/2/3 study.

With Vinbiocare, we have completed submission to the Ministry of Health in Vietnam with respect to an application for an Emergency Use Authorization for ARCT-154 (LUNAR-COV19).

We are also continuing to engage with major health authorities to identify pathways to have our products approved for the COVID-19 booster market.

We expect to receive in the near term significant data from studies of our COVID-19 vaccine and regulatory guidance which will determine our course of action with respect to the development and commercialization of our vaccine candidate.

Commercialization of ARCT-154 will require significant additional funds.

We are considering additional partnering opportunities to assist in these efforts.

We cannot be certain that we will identify a partner or enter into an acceptable arrangement.

We will continue to evaluate our business opportunities in a surgical manner to maximize our ability to develop approved products while making most efficient use of our available resources.

In addition to progressing our self-amplifying mRNA-based vaccine candidates for COVID-19, we continued to advance our pipeline and collaborations, and to expand and improve our platform technologies.

As part of our vaccine franchise we are evaluating in preclinical studies the efficacy and safety of a seasonal influenza vaccine (our LUNAR-FLU mRNA vaccine candidate) and plan to select a STARR candidate in 2022.

Our rare disease programs have also continued to advance.

In our ornithine transcarbamylase (OTC) deficiency program, with the overall gradual return to near-normal for clinical trials in the COVID-19 era, sites are finding more opportunities to screen potential participants for the Phase 1b study of ARCT-810 (LUNAR-OTC) and health authorities in the UK, Spain and Belgium have approved a Phase 2 multiple-dose study of ARCT-810 in OTC-deficient patients.

We anticipate completion of dosing of the first cohort of the Phase 1b study by the first half of 2022.

We anticipate screening to commence in our Phase 2 study in the second quarter of 2022 and to receive interim data in the second half of 2022.

For the cystic fibrosis program, results from a series of nonclinical and preclinical studies have led us to an optimized formulation and nebulizer system that is being advanced into the

We expect to file an application for a First-in-Human study for ARCT-032 (LUNAR-CF), our mRNA therapeutic candidate for cystic fibrosis, in the third quarter of 2022.

We also continue to make significant progress with our manufacturing processes and operations.

We have, with our manufacturing partners, manufactured current good manufacturing practice (“CGMP”) batches yielding significant quantities of clinical trial materials for ARCT-810 (LUNAR-OTC) and ARCT-021, ARCT-154, and ARCT-165 (our LUNAR-COV19 vaccine candidates).

We continue to make progress towards completion of a manufacturing facility in Hanoi, Vietnam, with our collaboration partner Vinbiocare, capable of producing 200 million doses per year, and technology transfer for commercial manufacturing is in process.

The Company was founded in 2013 as Arcturus Therapeutics, Inc., and we have maintained our principal executive offices in San Diego, California since that time.

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(“Arcturus Israel”), and commenced trading on Nasdaq under the symbol “ARCT.” On June 17, 2019, we redomiciled to the United States (the “Redomiciliation”) and changed our name to Arcturus Therapeutics Holdings Inc.

Recent Business Development Activities

In March 2020, we partnered with Duke-NUS Medical School to develop a COVID-19 vaccine for the Singapore Economic Development Board (“EDB”) based on the Company’s STARR Technology and designated the vaccine candidate LUNAR-COV19 (ARCT-021).

Duke-NUS Medical School is a graduate entry medical school in Singapore, established in 2005 through a partnership between Duke University School of Medicine and the National University of Singapore (“NUS”).

On March 4, 2020, we were awarded a grant of S$14.0 million (approximately US$10.0 million using the exchange rate at the time the grant contract was entered into) from the EDB to support the co-development of ARCT-021 with Duke-NUS Medical School.

In exchange for the grant, we agreed to supply ARCT-021 to the EDB for use within Singapore and we retained the right to sell and market ARCT-021 outside of Singapore.

We have agreed to pay Duke-NUS Medical School a low single digit royalty based on annual net sales of the vaccine in markets or jurisdictions outside of Singapore.

On August 17, 2020, we entered into a definitive Supply Agreement (the “Supply Agreement”) with the Israeli Ministry of Health (“MOH”) which provides for the supply of ARCT-021 to the MOH.

The MOH has elected to reserve delivery by us of doses of ARCT-021 for an initial 500,000 vaccinations (the “Initial Reserve Doses”).

The Supply Agreement also provides the MOH with the right to elect, in its discretion, to purchase additional doses of ARCT-021 upon notice to us prior to specified dates at specified purchase prices.

On October 14, 2020, we received a non-refundable first reserve payment of $12.5 million from the MOH.

This payment serves as partial

payment for the Initial Reserve Doses.

The Supply Agreement is described more fully below in the section titled “Other Material Agreements.”

On October 2, 2020, we were awarded a grant from the EDB to support the further development of our LUNAR-COV19 vaccine candidate.

The grant provides for up to S$9.3 million (approximately US$6.7 million) to support the development of the vaccine candidate.

The grant is payable in two installments upon the achievement of certain milestones related to the progress of the development of the vaccine candidate.

The Company received the first installment of approximately $3.6 million in the fourth quarter of 2020.

In November 2020, we announced a manufacturing support agreement with the EDB that includes a limited recourse loan of up to S$62.1 million, which was subsequently borrowed in full during January 2021 in an amount equivalent to $46.6 million.

The manufacturing support agreement is described more fully below in the section titled “Other Material Agreements.”

In February 2021, we entered into an exclusive license agreement with Alexion Pharmaceuticals, Inc.

(“Alexion”) pursuant to which Alexion granted to us an exclusive, worldwide license to exploit certain specified Alexion patents.

The exclusive license agreement is described more fully below in the section titled “Other Material Agreements.”

Nucleic Acid Medicines and an Introduction to Arcturus’ Platform Technologies

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Nucleic acid therapeutics represent a significant advancement in targeted medicines and several of this class of therapeutics are being developed by public and private companies.

These therapies have three general objectives:

to reduce the amount of a target protein in a patient by binding to and destroying the associated target mRNA (antisense and small interfering RNA (“siRNA”));

The general objectives of these therapies include:

to increase the amount of a functioning target protein by introducing a functional gene or mRNA that encodes for a protein that replaces a malfunctioning protein (mRNA therapy, CRISPR, gene therapy, replicon);

to restore a functional protein by correcting its encoding mRNA sequence;

to reduce the amount of a target protein in a patient by binding to and destroying the associated target mRNA (antisense and small interfering RNA (“siRNA”));

to introduce proteins from viruses or malfunctioning proteins in certain cancers to train the immune system to recognize and clear these proteins (nucleic acid vaccines).

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Lipids are molecules that contain hydrocarbons and make up the building blocks of the structure and function of living cells.

Examples of lipids include fats, oils, waxes, certain vitamins (such as A, D, E and K), hormones and most of the cell membrane that is not made up of protein.

Examples of lipids include fats, oils, waxes, certain hormones and most of the cell membrane that is not made up of protein.

LUNAR is designed to address technical challenges facing the delivery of nucleic acid medicines into cells.

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Our LUNAR platform is described in more detail below.

Our STARR technology platform combines self-replicating RNA with our lipid-mediated delivery system, LUNAR, into a single solution to produce proteins inside the human body.

The STARR technology has the potential to generate a protective immune response or drive therapeutic protein expression to potentially prevent against or

treat a variety of diseases.

S elf-replicating RNA-based prophylactic vaccine s developed with STARR have the potential to trigger rapid and prolonged antigen expression within host cells resulting in protective immunity against infectious pathogens.

We believe t his combination of LUNAR and STARR technology may provide lower dose requirements due to superior immune response, sustained protein expression compared to non-self-replicating RNA-based vaccines and potentially enabl e us to produce vaccines more quickly and simpl y.

Our STARR technology is our proprietary self-amplifying mRNA (or saRNA) technology platform.

When combined with a delivery system, such as our lipid-mediated delivery system LUNAR, the STARR technology has the potential to generate a protective immune response or drive therapeutic protein expression to prevent against or treat a variety of diseases.

Self-amplifying RNA-based prophylactic vaccines developed with STARR may trigger

rapid and prolonged antigen expression within host cells affording patients protective immunity against infectious pathogens.

We believe the combination of LUNAR and STARR technology may result in lower dose requirements (accompanied by fewer side effects) due to superior immune response and sustained protein expression compared to non-self-amplifying RNA-based vaccines and will likely enable us to produce greater volumes of vaccine doses more quickly.

With the full enrollment of the pivotal Phase 1/2/3 study in Vietnam of ARCT-154, our next generation, self-amplifying mRNA-based vaccine for COVID-19, we are a global leader in the clinical development of self-amplifying RNA-based vaccines.

Our STARR platform is described in more detail below.

Arcturus’ Target ID and Discovery Paradigm

Our Development Programs

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Vaccines to Prevent Infectious Disease

According to the National Foundation for Infectious Diseases in a typical year, over 50,000 people die each year due to vaccine-preventable diseases in the United States alone.

According to the National Foundation for Infectious Diseases, over 50,000 people die each year due to vaccine-preventable diseases in the United States alone.

According to the Centers for Disease Control and Prevention, influenza and pneumonia cases alone approach this number of deaths each year.

With the SARS-CoV-2 pandemic, more than 500,000 US citizens have died of COVID alone.

With the SARS-CoV-2 pandemic, more than 900,000 individuals in the US have died of COVID.

Outbreaks of new infectious diseases, and the rise of variants to existing viruses, create demand for new and novel approaches to producing vaccines in a more cost effective and quicker manner.

The current pandemic has highlighted the efficacy, safety, and rapidity in which nucleic acid medicines can be used to vaccinate vulnerable populations.

We are a leader in self-amplifying mRNA vaccine development.

In 2020, we progressed the rapid development of a self-amplifying mRNA vaccine to the Coronavirus that showed favorable safety and immunogenicity in Phase 1/2 trials after a single dose and have begun dosing in a Phase 2 trial.

Other pharmaceutical companies are clinically investigating self-amplifying mRNA SARS-CoV-2 vaccines as well, including GSK (Phase 1), and Pfizer (Phase 1).

We have also expanded our vaccine program to include seasonal influenza with a goal of beginning safety and immunogenicity trials in humans during the 2021/2022 influenza season.

Out internal programs include our LUNAR-COV19 and LUNAR-FLU vaccine programs as further described below.

In 2020, we initiated the development of our first self-amplifying mRNA vaccine candidate, ARCT-021, to protect against COVID-19.

We commenced a Phase 1/2 trial in 2020 and two Phase 2 trials in 2021, and we have completed dosing of ARCT-021 in the trials.

In 2021, we began development of two next generation vaccine candidates designed to elicit an improved neutralizing antibody response to circulating strains of SARS-CoV-2.

We have completed enrollment for the trial of one of these vaccines, ARCT-154, in a Phase 1/2/3 trial in Vietnam.

We have also expanded our vaccine program to include seasonal influenza and plan to submit an application in 2023 to initiate a Phase 1 human clinical trial.

Our internal vaccine programs include our LUNAR-COV19 and LUNAR-FLU as further described below.

The recent coronavirus pandemic has proven that mRNA vaccines can be highly efficacious and nimble, allowing for adjustments in antigenic sequences in record time.

ARCT-021 (LUNAR-COV19 Vaccine)

Coronaviruses are a family of viruses that can lead to respiratory illness, including Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV).

Coronaviruses are transmitted between animals and people and can evolve into strains not previously identified in humans.

Coronaviruses are transmitted

between animals and people and can evolve into strains not previously identified in humans.

On January 7, 2020, a novel coronavirus was identified as the cause of pneumonia cases in Wuhan City, Hubei Province of China.

On February 11, 2020, the World Health Organization announced the official name for the disease caused by SARS-CoV-2 virus (2019 novel coronavirus outbreak) as coronavirus disease 2019, commonly abbreviated as COVID-19.

The spread of COVID-19 has resulted in more than two million disease-related deaths across the globe.

S wift alert by health authorities and broad measures to contain the virus have not been entirely successful .

The development of effective vaccines and swift implementation of vaccination s will be key in stopping the spread of the COVID-19 pandemic .

Recent EUAs for COVID-19 vaccines from other companies have been backed by data from clinical trials supporting vaccine efficacy.

D urability of COVID-19 vaccines, including capability to prevent disease covered by SARS-CoV-2 variants, is an important consideration .

We expect both humoral and cellular immunogenicity to play a key role in providing durable and broad protection against COVID-19 and its variants.

Our COVID-19 vaccine candidate, ARCT-021, developed in conjunction with Duke-NUS Medical School, is based on our STARR technology platform.

The vaccine is designed to promote immune responses to the spike protein of the SARS-CoV-2 virus, which is the critical part of the virus that allows infection to occur.

We have commenced dosing with the ARCT-021 candidate in three clinical trials:

one first-in-human Phase 1/2 study (ARCT-021-01), one open label extension study to the same study (ARCT-021-02), and a Phase 2 study (ARCT-021-04).

The first of these studies (ARCT-021-01) was a randomized, blinded, placebo-controlled study exploring single and two-dose regimens of ARCT-021 (dose range:

1 to 10 µg ARCT-021 single dose, 3 to 5 µg ARCT-021 two dose) in younger and older healthy adults.

This study enrolled participants in a series of cohorts based on participant age, intended ARCT-021 dose for study, and based on one or two-dose administrations.

The study has completed enrollment of 106 participants, and some of these participants have transitioned to the ARCT-021-02 study, which is actively enrolling and is expected to complete in 2022.

An interim analysis was perfomed based on unaudited data from the single dose cohorts and the 5µg two-dose older and younger adult cohorts.

At the time of the analysis all included participants had completed at least 28 days after their last dose of study vaccine.

The interim analysis data from the ARCT-021-01 study were submitted to the Singaporean Health Science Authority (“HSA”) and the US FDA prior to approval to initiate enrollment in the Phase 2 study (ARCT-021-04).

Key findings from the ARCT-021-01 interim analysis include:

primarily mild-to-moderate adverse events following vaccination in younger and older adults, no vaccine-related serious adverse events, dose-related increases in binding antibody responses after single dose administration in younger and older adults at all doses evaluated, demonstration of neutralizing antibody responses after single dose administration in younger and older adults that fell within the range of titers from COVID-19 convalescent antibody responses measured on the same assay (PRNT50), and Th1- biased T cell activation following single dose administration in younger and older adults.

The Phase 2 study (ARCT-021-04) is a randomized, placebo-controlled study designed to evaluate the safety and immunogenicity of three different dosing schedules in a broader population of healthy younger and older adults.

The doses and schedules for additional exploration include:

5 µg ARCT-021, two dose regimen and 7.5 µg ARCT-021, as one- and two-dose regimens.

We have dosed over 500 participants across the United States and Singapore.

The next planned clinical study is the Phase 3, placebo-controlled efficacy study of ARCT-021 (ARCT-021-05).

We are presently preparing to advance with a 5 µg single dose regimen, to be confirmed based on pending Phase 2 data.

We expect that this study will initiate enrollment in Q2 2021 and will be executed in several countries with significant SARS-CoV-2 outbreaks.

Based on study recruitment and occurrence of COVID-19 cases in enrolled participants, we expect data establishing vaccine efficacy to prevent COVID-19 to be available in the latter part of 2021 and expect to analyze and submit an application seeking an EUA in one or more jurisdictions based on this data.

We plan for the study to continue execution into 2022, at which point we expect to use the data to seek full licensure of the ARCT-021 study.

Preclinical Challenge Studies

ARCT-021 Significantly Effective in Challenge Models

ARCT-021 was shown to be significantly effective in a virus challenge study in the human ACE2 transgenic mouse model.

The single dose provided complete protection from SARS-CoV-2 infection and death, compared to control mice which experienced 100% mortality.

Transgenic mice expressing a human ACE2 receptor received a single vaccination of either 2 µg or 10 µg of ARCT-021 RNA.

Mice were challenged with a lethal dose of SARS-CoV-2 clinical isolate 28 days after vaccination.

100% of vaccinated by at both doses survived for at least 14 days after challenge whereas unvaccinated mice died by day 7.

The vaccinated mice showed absolutely no clinical signs up to day 14 post challenge which was the study termination date.

In September 2020, a rhesus macaque immunogenicity and a SARS-CoV-2 virus challenge study sponsored by the National Institutes of Health (“ NIH ”) and the National Institute of Allergy and Infectious Diseases was initiated.

Non-human primates were immunized with either a single injection of 20 µg or 40 µg RNA dose, or two injections of a 5 µg or 20 µg RNA dose administered 28 days apart, and challenged with SARS-CoV-2 virus 42 days post single vaccination and 14 days post boost vaccination.

A single vaccination of 20 µg RNA dose yielded a >1,000 fold reduction in virus in the lungs.

Two injections of 5 µg reduced virus infection by >5,000 fold and virus was unde te ctable in non-human primates after two injection s of 20 µg RNA.

The amount of virus in the lungs from bronchioalveolar lavage vs.

RNA dose is shown in the figure below.

The results showed that a single administration of ARCT-021 was significantly effective in the primate model (macaque);

vaccinated macaques show substantial (3.30 log lower) reduction in median lung viral titers.

T Lymphocyte Mediated Immunity Is the Major Contributor to Protective Immunity Against Virus Challenge in Transgenic Mouse Model

Human ACE2 receptor transgenic mice were vaccinated with a single 1 µg dose and challenged with sublethal virus load 21 days post vaccination.

In one treatment group, B lymphocytes, responsible for producing virus neutralizing antibodies, were depleted three days prior to vaccination.

In a second group, T lymphocytes, responsible for killing cells infected with virus, were depleted three days prior to virus challenge.

In a third group, B cells were depleted 3 days prior to vaccination and T cells were depleted three days prior to virus challenge.

The above figure show s that no virus was detected in the lungs of mice depeted of B cells, marked as 100%, whereas mice depleted of T cells had an equivalent amount of virus as mice with depleted B cells and T cells, demonstrating that ARCT-021 induced cell mediated immunity plays a major role in conveying protective immunity against SARS-CoV-2 infection.

Studies have shown T cells to be more durable (approximately six times longer-lasting) than antibodies (Bert, et al.

Nature , 2020).

In another study performed by Public Health England, T cell counts of thousands of frontline workers were monitored for four months.

High T cell activities significantly correlated ( p =0.0006) with protection from COVID-19 infection even when no antibodies against SARS-CoV-2 could be detected.

mRNA platforms have the advantage of being able to more nimbly adapt to new viral strains.

We are closely evaluating COVID-19 variants, especially those strains that appear to evade the neutralizing antibodies to the original Wuhan strain such as the South African variant (B.1.351).

A study in non-human primates conducted by Dan Barouch (et al) of Harvard Medical School found that T-cell responses are important for COVID-19 vaccines, and in particular for strains that evade the neutralizing antibodies to the original Wuhan strain.

As shown above, ARCT-021 has shown robust cellular immunity, and we will gain a better understanding of ARCT-021’s coverage of COVID-19 variants as we continue to collect clinical data.

After the first cases of COVID-19 were identified, SARS-CoV-2 spread rapidly to all parts of the globe resulting in surges of infections as protective health measures have waxed and waned in a region-specific manner.

The result of uncontrolled viral spread from approximately 400 million cases worldwide has led to the selection and spread of viral variants that are more contagious, pathogenic, or both.

The WHO has announced a naming system for variants of the coronavirus that uses letters of the Greek alphabet.

Under the new scheme, the B.1.1.7 variant first identified in the UK, commonly referred to as the Kent variant, is labelled “Alpha”.

The B.1.351 variant identified in South Africa is “Beta”, the P.1 variant that originated in Brazil is “Gamma”, the B.1.617.2 variant first detected in India is “Delta”, and B.1.1.529 also first identified in South Africa is “Omicron”.

These Greek letter labels will only be given to “variants of concern” and “variants of interest” as defined by the WHO.

The current variants of concern (VOCs), specifically Delta and Omicron, have rapidly displaced previous circulating strains, spread more efficiently than previous strains, and are associated with increased risk of breakthrough infection among the vaccinated.

Despite the expeditious EUA and rollout of vaccines in many counties, vaccine efficacy rates vary widely to currently circulating VOCs and relatively low percentages of people worldwide have received a booster dose important for protection against the currently dominant variant, Omicron.

Although current vaccines have been shown to protect against severe morbidity and mortality caused by current VOCs, breakthrough infections have been documented, nearly all from VOCs.

As immunity wanes and booster doses become necessary, there is a critical need to enhance protection against VOCs to reduce the infection and disease burden for both the public and the health care systems across the globe.

As such, Arcturus has developed the next generation of mRNA vaccines, which have demonstrated encouraging antibody data, including neutralizing antibodies against several variants of concern, including Omicron, boosting pre-existing immunity to SARS-CoV-2.

Our initial COVID-19 vaccine candidate, ARCT-021, developed in conjunction with Duke-NUS Medical School, is based on our STARR technology platform and has demonstrated antibody and cell-mediated immunogenicity and an excellent safety profile and through Phase 2 clinical trials.

This vaccine was designed to promote immune responses to the spike protein of the SARS-CoV-2 virus, the critical part of the virus that allows infection to occur.

In 2021, ARCT-021 was selected by a global entity for inclusion in a multinational Phase 3 vaccine trial.

However, that trial has taken longer than anticipated to proceed with ARCT-021 and might not ever proceed with ARCT-021.

Our clinical studies involving ARCT-021 have concluded dosing and we do not have current plans to sponsor additional development studies of ARCT-021 unless and until the global entity determines to proceed with ARCT-021 in the multinational Phase 3 vaccine trial.

Our two next generation vaccine candidates currently under development, ARCT-154 and ARCT-165, are based on the same platform as ARCT-021.

We have modified the coding region to stabilize the spike protein and increase immune recognition to the receptor binding domain to improve neutralizing antibody titers and cross-protection to VOCs.

ARCT-154 is currently undergoing a fully enrolled pivotal Phase 1/2/3 study in Vietnam, sponsored and funded by Arcturus’ collaborator Vinbiocare.

This vaccine is being evaluated as a primary vaccine administered in two 5-µg doses spaced 28 days apart.

Evaluations include immunogenicity, efficacy and safety endpoints.

A subset of participants is also receiving a third (booster) dose of ARCT-154.

We have completed submission of regulatory documents for an emergency use authorization application in Vietnam.

As the global market moves closer to booster administrations, Arcturus’ current next-generation vaccine candidates to COVID-19 are in trials as a booster dose of 5 µg dose, which is 6 to 10 times lower than currently-approved mRNA vaccine boosters.

The purpose of a booster dose is two-fold:

1) to increase the durability of protective immunity to currently circulating strains of SARS-CoV-2 and 2) to protect against emerging VOCs that could cause breakthrough infections with currently authorized vaccines.

Two current clinical studies are exploring these next generation COVID-19 vaccines as a booster vaccination series.

One of our Phase 2 studies of ARCT-021 (ARCT-021-04) has been modified to include booster vaccination with either our original or next generation COVID-19 vaccines six months after the second dose of the primary vaccine series with ARCT-021.

ARCT-021-dosed participants were randomized 1:1:1:1 to receive 5 µg of one of

three Arcturus COVID-19 vaccine candidates or placebo.

Participants originally receiving placebo were re-enrolled and randomized to one of three dosage groups receiving ARCT-021 as the primary vaccine series.

A second study, ARCT-165-01, evaluates ARCT-154 and ARCT-165 as boosters five months after a Comirnaty® primary vaccination series in a total of 24 subjects <60 years of age.

We announced initial results from this study:

increases in geometric mean neutralizing antibody concentrations of up to 30x pre-dose levels were sustained at 28 days post-boost, the last time point at which measurements were made in this ongoing study as of the announcement.

Pseudovirus (D614G variant) Microneutralization (MNT) Assay Results

Virus neutralization concentrations (arbitrary units per milliliter, AU/mL) for participants at Day 1 (prior to boosting), and Days 15 and 29 after boosting with ARCT-154 (left;

n = first 8 out of 12 participants dosed) and ARCT-165 (right;

n = first 9 out of 12 participants dosed).

Within each panel, the left graphic shows values from individuals, and the right graphic shows the geometric means of neutralization concentrations with 95% confidence intervals.

The multiples are geometric mean-fold rises (GMFR) of neutralization concentrations on Day 15 over Day 1 values.

Geometric mean for Day 29 is not shown here, as data from only 4 participants are available for this time point.

In addition, responses against a wide panel of VOC and “variants of interest” (as defined by WHO) were measured using an experimental surrogate virus neutralization assay.

We found robust responses after a single booster dose across all variants tested.

The different spike variants encoded by ARCT-154 and ARCT-165 may allow for broad coverage of current and emerging variants of concern and interest.

Surrogate Neutralization Assay to Variants of Concern and Interest

Top panels show geometric mean concentrations and 95% confidence intervals on Day 1 (prior to boosting), Day 15 and day 29 post-boost administration with ARCT-154 (left;

n = 12 participants dosed).

Line graphs on right show that responses are maintained through at least Day 29 for two variants, beta and delta.

The bottom panels show the results for individual participants for the Beta and Delta variants on Day 1 (prior to boosting), and Days 15 and 29 post-boost administration with ARCT-165.

Line graph on the right shows responses for each participant through Day 29.

Abbreviations:

VOC, variant of concern;

VOI, variant of interest;

ULOQ, upper limit of quantification;

LLOQ, lower limit of quantification.

In a collaboration with Penny Moore, an expert in virology and immunology from the University of the Witwatersrand in Johannesburg, South Africa, we have assessed neutralizing antibody responses to Omicron, the latest WHO VOC that has displaced previous SARS-CoV-2 variants globally, using a lentiviral pseudovirus assay.

We observed 54 and 47 fold increases in neutralizing titers after a single boost with ARCT-154 or ARCT-165, respectively.

Pseudovirus (Omicron variant, research use) MNT assay results.

Antibody titers corresponding to 50% viral inhibition (ID50) in trial participants at Day 1 (prior to boosting) and Day 29 after boosting with ARCT-154 (left;

n = 12/12) and ARCT-165 (right;

The bar graphs show the geometric means of neutralization titers, with 95% confidence intervals.

Importantly, as this assay was performed at a different laboratory than our D614G assay and the readouts of this lentivurus based assay are different (ID50 vs AU/mL), the results from these two assays cannot be directly compared.

The multiples are fold rises of neutralizing antibody titers on Day 29 over Day 1 values.

half-maximal inhibitory dose;

lower limit of quantitation.

Influenza is estimated to cause one billion infections globally every year and hundreds of thousands of deaths, especially in the elderly and individuals with underlying medical conditions.

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We believe the ability of mRNA platforms to nimbly adapt to new viral strains should help improve efficacy.

Also, mRNA vaccines do not face the challenge from mutations common to egg-grown vaccines.

LUNAR-FLU candidates will be evaluated preclinically in 2021 to support the goal of IND/CTA submission in the first half of 2022.

In addition, mRNA vaccines should not face the challenge from mutations common to egg-grown vaccines.

LUNAR-FLU is being designed to take advantage of our expertise in both LUNAR® lipid delivery systems, and mRNA technology to optimize the balance of acceptable reactogenicity and enhanced expression and immunogenicity of influenza antigens with the aspiration of creating a highly effective influenza vaccine for use in general and high risk populations.

Preliminary Data for Influenza

Murine Studies:

An early version of our STARR platform encoding the hemagglutinin (HA) from a highly pathogenic strain of pandemic influenza (H5N1 A/Vietnam/1203/2004) formulated with several LUNAR lipids was

evaluated in mice.

(HA is a glycoprotein that causes red blood cells to agglutinate or clump.) Mice primed, then boosted three weeks later, with this vaccine resulted in hemagglutinin inhibition (HAI) titers >40 two weeks after boost for two of our formulations.

Large Animal Efficacy and Immunogenicity Studies:

Experiments with a self-amplifying RNA (saRNA) encoding HA from H1N1 (A/California/07/2009) showed protection against challenge in pigs at even the 1µg dose.

This protection was comparable to that elicited from an inactivated vaccine.

Pigs primed, then boosted 28 days later, with our vaccine showed reduced lung lesions compared to protective responses from commercial vaccines (top).

This same dose used in a small non-human primate study resulted in HAI >40 and the induction of robust polyfunctional CD8+ T cell responses (bottom).

Mice vaccinated with a previous version of STARR saRNA (in collaboration with SGI) resulted in HAI end titers >40 with several formulations of Arcturus’s LNPs.

Doses used are at 200-2000 times below the tolerable dose in mice.

Efficacy studies performed in pigs challenged with H1N1 resulted in lung lesion scores comparable to those from a commercial inactivated vaccine.

NHPs vaccinated with saRNA encoding HA were resulted in protective HAI end titers (left) and robust polyfunctional T cell responses (middle, right)

Efficacy studies performed in pigs challenged with H1N1 resulted in lung lesion scores comparable to those from a commercial inactivated vaccine.

NHPs vaccinated with samRNA encoding HA were resulted in protective HAI end titers (left) and robust polyfunctional T cell responses (middle, right)

Current studies use a next generation drug substance and formulation to elicit optimal influenza-specific immune responses and increase tolerability.

The figure below shows that a monovalent LUNAR-FLU elicits robust HAI titers over time after a single intramuscular injection in mice.

Additionally, a quadrivalent influenza vaccine also elicits robust HA-specific antibodies to all four strains present in the vaccine.

Preclinical work is currently under way to optimize tolerability and immunogenicity to all four seasonal strains recommended by health authorities.

Left graph shows an increase of HAI titers after immunization of mice with monovalent LUNAR-FLU vaccine indicating robust titers maintained for at least three months post vaccination.

Right graph shows robust increase in HA-binding IgG antibodies to all four seasonal influenza strains encoded by a quadrivalent LUNAR-FLU.

HAI end titers over time are currently being assessed for this experiment.

We plan to continue preclinical evaluations of LUNAR-FLU candidates in 2022 and to select a STARR candidate in 2022.

Rare Disease Medicines in Development

The Orphan Drug Act defines a rare disease as a disease or condition affecting fewer than 200,000 individuals in the United States.

According to the NIH, there are approximately 7,000 such diseases, that together affect nearly 30 million people in the United States.

According to the National Institutes of Health (NIH), there are approximately 7,000 such diseases that, together, affect nearly 30 million people in the United States.

The European Union defines a rare disease as having a prevalence of fewer than 5 in 10,000 people.

Collectively, these disorders affect between six and seven percent of the population in the developed world.

There is a pressing need for new medicines for rare diseases as few of the 7,000 rare diseases have approved treatments.

Collectively, these disorders affect between 6% and 7% of the population in the developed world.

There is a pressing need for new medicines for rare diseases as few of the 7,000 known rare diseases have approved treatments.

Biopharmaceutical industry researchers are making great progress in the fight against rare diseases as innovative science has opened new opportunities.

There have been incredible advances in the development of medicines to treat patients with rare diseases as researchers uncover the molecular and genomic drivers of many conditions.

More than 770 medicines have been approved by the FDA since the enactment of the Orphan Drug Act in 1983 and more than 800 medicines are currently in clinical development.

Despite recent progress, there is still much more work to be done.

Developing medicines to treat rare diseases presents scientific and operational challenges .

We believe our technology provides an excellent platform to address genetically inherited rare diseases, and we are focusing o n development of medicines to treat people with rare respiratory and liver diseases who currently have limited or no treatment options.

Despite recent progress, there is still much more work to be done to overcome the scientific and operational challenges that arise.

We believe our technology provides an excellent platform to address genetically inherited rare diseases.

Specifically, we are focusing on developing medicines to treat people with rare respiratory and liver diseases who currently have limited or no treatment options.

ARCT-810 (LUNAR-OTC)

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

OTC deficiency causes the body to accumulate ammonia, which is neurotoxic and harmful to the liver.

OTC deficiency is the most common of the urea cycle disorders, a group of inherited metabolic disorders that make it difficult for affected patients to remove toxic waste products as proteins are broken down.

OTC deficiency is a life-threatening genetic disease.

OTC is a critical enzyme in the urea cycle, which takes place in liver cells, and converts ammonia to urea.

This conversion does not occur properly in patients with OTC deficiency and ammonia accumulates in their blood, acting as a neurotoxin and liver toxin.

High ammonia levels in the blood can cause severe symptoms including vomiting, headaches, coma and death.

OTC deficiency is an inherited disease that can cause developmental problems, seizures and death in newborn babies.

It is an X-linked disorder, and consequently more common in males.

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.

OTC deficiency is the most common of the urea cycle disorders, a group of inherited metabolic disorders that are associated with reduced ability to eliminate ammonia from the body.

Ammonia is a toxic waste product produced from the breakdown of protein.

OTC is a critical enzyme in the urea cycle, which takes place in liver cells and converts toxic ammonia to urea which is eliminated in the urine.

In patients with OTC deficiency, ammonia accumulates in the blood and is toxic to the brain and liver.

Symptoms of high ammonia levels include vomiting, headaches, coma and death.

OTC deficiency can cause developmental problems, seizures and death in newborn babies.

As an X-linked disorder, OTC deficiency tends to be more severe in males, though female carriers are often affected.

Patients with less severe symptoms may present later in life, as adults.

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however, this treatment comes with significant risk of complications such as organ rejection, and transplant recipients must take immunosuppressant drugs for the rest of their lives.

Current standard of care for OTC patients is a low-protein diet, dietary supplements and ammonia scavengers to try and prevent accumulation of ammonia.

Current standard of care for OTC deficiency is a low-protein diet, dietary supplements, and ammonia scavengers to try to prevent accumulation of ammonia.

Life-threatening episodes of high ammonia levels can occur, requiring treatment with dialysis or hemofiltration.

These treatments do not address the underlying cause of disease and there remains a high unmet need for an effective treatment.

Our LUNAR-OTC development candidate, ARCT-810, uses our LUNAR platform to deliver normal OTC mRNA into liver cells, where OTC is produced and functions, to produce normal functioning OTC with possible disease-modifying effects.

Our LUNAR-OTC development candidate, ARCT-810, uses our LUNAR platform to deliver normal OTC mRNA into liver cells which then produce normal functioning OTC with possible disease-modifying effects.

Our LUNAR-OTC approach has the potential to treat the underlying defect that causes the debilitating symptoms of OTC deficiency, rather than mitigating symptoms by sequestering ammonia.

LUNAR-OTC has received orphan drug designation from the FDA for treatment of OTC deficiency.

Worldwide development and commercialization rights to ARCT-810 are entirely held by Arcturus.

Preclinical data in OTC deficiency murine models has demonstrated that dosing of LUNAR-OTC results in robust OTC protein expression and activity, thereby improving ureagenesis, reducing plasma ammonia and increasing survival.

We submitted an IND application to the FDA for a Phase 1b study in patients with OTC deficiency, and an additional CTA for a Phase 1 study in healthy volunteers was approved by the New Zealand Medicines and Medical Devices Safety Authority.

In April 2020, we announced that we were deemed allowed to proceed with the studies.

In November 2020, the last dose cohort completed the Phase 1, double-blind, placebo-controlled, single-dose, dose-escalation study of ARCT-810 in healthy volunteers.

In this study, ARCT-810 demonstrated favorable safety, tolerability and PK profiles.

A Phase 1b study in OTC-deficient patients in the United States opened for enrollment, with dosing initiated in the first subject in December 2020.

The trial will enroll approximately 12 patients and is designed to assess safety, tolerability and pharmacokinetics, as well as various exploratory biomarkers of drug activity.

The trial currently consists of nine sites in the United States.

We have received approval from Health Canada to conduct the trial in Canada and are working with sites in Canada in preparation for enrollment.

We intend to commence a Phase 2 multiple-dose study of ARCT-810 in OTC-deficient patients in mid-2021.

Worldwide development and commercialization rights to ARCT-810 are held entirely by Arcturus.

Preclinical data in OTC-deficient murine models have demonstrated that dosing of LUNAR-OTC results in robust OTC protein expression and activity, thereby improving ureagenesis, reducing plasma ammonia, and increasing survival.

The Phase 1, double-blind, placebo-controlled, single-dose, dose-escalation study of ARCT-810 in healthy volunteers, completed in November 2020, demonstrated favorable safety, tolerability and PK profiles.

A Phase 1b study in stable OTC-deficient patients is being conducted in the United States and Canada, and has commenced dosing.

The trial plans to enroll approximately 12 patients and is designed to assess safety, tolerability and pharmacokinetics, as well as various exploratory biomarkers of drug activity.

The COVID-19 pandemic has imposed numerous widespread challenges for the conduct of non-COVID clinical trials, including this study.

These barriers include prolonged site closures, loss of key study personnel, prioritization of clinical care over research, and reluctance of patients to attend clinic visits.

The pandemic has adversely affected startup activities for some sites and enrollment capabilities for others.

Having worked closely with the investigators, the CRO and patient groups through this difficult period, we are now seeing a significant increase in patient identification and screening, such that completion of dosing of the first cohort is anticipated by the first half of 2022.

Onboarding of new sites in addition to the current seven active sites in the United States is also expected to accelerate enrollment.

A Phase 2 multiple-dose study of ARCT-810 in OTC-deficient patients is approved to proceed by the regulatory authorities in the UK, Belgium and Spain and clinical trial authorization applications are currently being prepared for other European countries.

We anticipate that screening patients will begin in this study in the second quarter of 2022 and that we will have interim data from a subset of participants in the second half of 2022.

ARCT-032 (LUNAR-CF)

The LUNAR-CF program addresses cystic fibrosis lung disease, a progressive lung disease caused by mutations in the cystic fibrosis transmembrane conductance regulator (“CFTR”) gene.

In December 2020, we announced the selection and advancement of ARCT-032 as a development candidate for treatment of cystic fibrosis.

ARCT-032 uses our LUNAR platform to deliver codon-optimized CFTR mRNA into airway epithelial cells.

This allows airway cells to produce functional CFTR protein using their native translational machinery and protein trafficking pathways.

This approach has the potential to treat the underlying defect that causes CF lung disease,

regardless of what mutation type a patient has.

The Cystic Fibrosis Foundation ( “ CFF ” ) has recognized the potential of the LUNAR- CF program and has partnered with us to develop this important therapy.

ARCT-032 represents the first LUNAR-based mRNA therapeutic that will be delivered by the inhaled route, offering direct delivery to the affected airways with the potential to restore functional CFTR.

We received encouraging pre-IND feedback on our proposed non-clinical and clinical development program in January 2021.

We anticipate filing a CTA for a first in human study in Q4 2021 .

In 2020, we announced the selection and advancement of ARCT-032 as a development candidate for treatment of cystic fibrosis.

ARCT-032 uses our LUNAR platform to deliver a codon-optimized human CFTR mRNA into airway epithelial cells.

allows airway cells to produce functional human CFTR protein using their native translational machinery and protein trafficking pathways which could result in the treatment of the underlying defect that causes CF lung disease, regardless of patient’s specific mutation.

The Cystic Fibrosis Foundation (“CFF”) has partnered with us to develop this therapy.

ARCT-032 represents the first LUNAR-based mRNA therapeutic that will be delivered by the inhaled route, offering direct delivery to the affected airways with the possibility of restoring functional CFTR.

According to the NIH, cystic fibrosis is the most common rare disease in the world, with an estimated 30,000 diagnosed cases in the United States and 85,000 worldwide.

Approximately 1,000 people are newly-diagnosed with cystic fibrosis each year.

Cystic fibrosis is caused by one of 2,000 known mutations in the CFTR gene, which have been grouped into several different classes based on the mechanism of how they cause reduction in the production and/or function of the CFTR protein.

The CFTR protein is a cAMP-activated transmembrane protein that controls chloride and bicarbonate flow and is critical for lung homeostasis.

When CFTR is not present in the membrane or does not function properly, there is a deficit in the release of chloride and bicarbonate anions into the airways, and an associated increase of sodium uptake by the cells, thus dehydrating the airway surfaces and causing accumulation of a thick mucus layer.

This mucus causes clogging of the airways, a negative impact on breathing quality, and decreases the clearance of pathogens which accumulate in the airways, causing chronic infections, exaggerated inflammation, structural airway damage, and other serious complications not only related to the lung but to other organs such as pancreas and liver.

The median lifespan of CF patients in the United States is <40 years, and the cause of death is usually lung-related.

The daily standard-of-care for CF lung disease includes palliative treatments meant to treat existing lung disease and prevent the progression of the disease.

Cystic fibrosis is caused by one of more than 2,000 known mutations in the CFTR gene.

These mutations have been grouped into several different classes based on the mechanism by which they cause reduction in the production and/or function of the CFTR protein.

When CFTR is absent or defective, the airway surfaces become dehydrated and coated with a layer of thick mucus that clogs the airways, causing difficulty breathing and often resulting in chronic infections, exaggerated inflammation, structural airway damage, and other serious complications in lungs as well as in the pancreas and live.

The median lifespan of CF patients in the United States is approximately 50 years, and the cause of death is usually lung-related.

Current therapies for CF lung disease are, in effect, daily palliative treatments meant to treat existing lung disease and prevent the progression of the disease.

These treatments include aerosolized mucolytics, antibiotics, and airway clearance techniques that are time-consuming and represent a significant treatment burden for people with CF.

Many CF patients ultimately suffer from a critical decline in lung function and require lung transplants.

The FDA has approved several CFTR modulator therapies (Kalydeco, Orkambi, Symdeko, and Trikafta) that assist the mutant CFTR protein to reach the cell membrane and/or increase functional ion channel activity.

The CFTR modulators, while effective in some patients, are mutation-specific and therefore are not effective in all people with CF.

The FDA has approved several CFTR modulator therapies (Kalydeco®, Orkambi®, Symdeko®, and Trikafta®) that assist certain classes of mutant CFTR protein to reach the cell membrane and/or increase functional ion channel activity.

The CFTR modulators, while effective in many patients, are mutation-specific and therefore are not effective in all persons with CF.

Other treatments are required to target Class I mutations (no CFTR produced;

approximately 10% of CF cases worldwide), and people who are intolerant or have poor response to CFTR modulator therapies.

We are focusing our LUNAR-CF program on these groups of patients, as they currently have the highest unmet need for CF therapies.

We presented data that demonstrated the significant potential for LUNAR-CF as a disease-modifying treatment at The American Society for Gene and Cell Therapy Conference in May 2020, and the North American Cystic Fibrosis Conference in October 2020.

The data presented demonstrated that (i) aerosolized LUNAR-mRNA formulation properties are optimal for lung therapeutics, (ii) codon optimized mRNAs produce a functional protein that can generate chloride channel activity in FRT cells, and can also restore chloride channel activity (measured by nasal potential difference) in a Class I CFTR-knockout mouse model, and (iii) aerosolized LUNAR can efficiently deliver mRNA to epithelial airways across species, including rodents and non-rodents (ferrets, non-human primates).

Taken together, these data demonstrate the proof of principle to validate LUNAR-CF, as we continue investigating various aspects of LUNAR-CF in several disease models of CF.

LUNAR construct with mRNA of CRE protein efficiently transduce s epithelial airways in a non-rodent model (Ferret)

In ferret, a 0.6 mg/ml dose of a LUNAR construct loaded with mRNA of the CRE protein was delivered to the airways of the ROSA26TG model.

Upon CRE-recombination, a robust conversion of the TdTomato (red) into EGFP (green) was observed by immunohistochemistry analysis of the ferret lungs.

Panels A and B show large and small airways, respectively.

Boxed area in EGFP (green) images show high magnification of the highly efficient delivery into ferret airways.

DAPI is shown as counterstaining.

Aerosolized LUNAR construct with Tdtomato mRNA efficiently delivers to epithelial airways in Non-human Primates (NPHs)

In NHP, a 1 mg/ml dose of a LUNAR construct loaded with TdTomato mRNA was aerosolized using a face mask exposure system.

A robust expression of TdTomato protein was observed by immunohistochemistry analysis of the NHP lungs.

The panel shows detailed TdTomato staining in bronchial epithelial cells across different lung levels.

We are focusing ARCT-032 on these groups of patients, as they currently have the highest unmet needs for CF therapies.

An extensive portfolio of nonclinical and preclinical studies have been performed to support the advancement of ARCT-032 towards the clinic.

We presented comprehensive data that showcased the potential for ARCT-032 as a disease-modifying treatment at the North American Cystic Fibrosis Conferences in November 2021.

The data presented demonstrated that (i) ARCT-032 remains stable after nebulization and retains functional activity, (ii) LUNAR protects mRNA in sputum isolated from CF patients, (iii) aerosolized LUNAR-mRNA delivers mRNA to airway epithelium across species, including rodents and non-rodents (ferrets, non-human primates), (iv) LUNAR-mRNA transduced several epithelial cell types (secretory, ionocytes, basal, ciliated) in ferret and human bronchial epithelial cells, and (v) ARCT-032 transduction demonstrated concentration-dependent expression of mature CFTR and restored chloride transport in CF human bronchial epithelial cells.

In addition, we previously demonstrated restoration of CFTR activity in vivo (measured by nasal potential difference) in a CF mouse model with a Class I mutation.

Cumulatively, these robust data demonstrate the proof of concept to validate ARCT-032 as a potential therapy to target the root cause of CF lung disease.

We continue to work closely with the CFF, which recently agreed to support studies with ARCT-032 in a CF ferret model to evaluate epithelial targeting and functional outcomes.

These studies will be conducted in collaboration with investigators at the University of Iowa and the University of Alabama at Birmingham.

We have also done several studies with the nebulizer system to optimize performance, which is important to ultimately reduce the burden on patients.

ARCT-032 generated high levels of mature (C-band) CFTR in CF human bronchial epithelial cells

Ferret bronchial epithelial cells derived from a G551D CF ferret model were transfected in vitro with ARCT-032 (LUNARhCFTR).

A dose dependent increase in chloride current was observed at the highest doses tested, comparable to the positive control VX770.

The negative controls (LUNAR buffer and LUNAR-TdTomato) did not have any impact on chloride changes.

Human bronchial epithelial cells from a CF patient homozygous for F508del mutation were transfected in vitro with ARCT-032, resulting in dose-related increase in mature CFTR protein as seen in this Western blot as measured 72 hours after transfection.

The increase in protein levels is specific to ARCT-032 treated samples and not present in the LUNAR buffer control.

LUNAR-CF restored CFTR activity in HBE cells carrying the F508del mutation

The figure below demonstrates that ARCT-032 applied to human bronchial epithelial cells resulted in restored chloride transport.

Human bronchial epithelial cells from a CF patient homozygous for F508del mutation were transfected in vitro with ARCT-032.

Chloride activity was significantly restored in a dose-like dependent manner at all doses tested (*, p<0.05).

Significant progress on the LUNAR-CF program was made in 2021, with identification of the development candidate that is now being evaluated in GLP toxicology studies.

We anticipate filing a CTA for a first in human study in Q3 2022.

LUNAR Platform Program – Genome editing

Genome editing therapies are based on the ability to modify a specific DNA sequence in the human genome.

All genome editing molecular tools can be programmed to target a DNA sequence of interest.

Although the diversity of programmable gene editing tools is increasing, all of them are based on a DNA binding component (either a protein or, as in the case of CRISPR-clustered regularly interspaced short palindromic repeats, an RNA sequence) plus a DNA modifier component (a protein that can either make double strand breaks on the DNA (nuclease), single strand breaks (nickase), or make chemical modification in the DNA (base editors)).

One of the main roadblocks to applying genome editing as a therapy to treat human disease is the delivery of the genome editing tool components into the cells either ex-vivo or in vivo, applying them directly into the human body and targeting the right organ.

The LUNAR-Genome editing program aims to leverage the ability of our LUNAR-mRNA technology to deliver any type of genome editing tools into target cells.

Some of the genome editing tools are based on protein components working in pairs (TALEN-Transcriptional Activator-Like Effector Nuclease, ZFN-Zinc Finger Nuclease) or as a single protein (meganuclease), while other tools could have a combination of RNA and protein component (CRISPR).

We have tested and found that we can deliver mRNAs coding for genome-editing proteins (TALEN) encapsulated in our LUNAR formulations, and also CRISPR technology, with the guide RNA together with the nuclease as an mRNA.

Those mRNAs are translated into the proteins of interest that edit the targeted DNA sequence.

To test the efficacy of the different genome editing strategies as a proof of concept, we utilized target genes that encode proteins that are well known and can be detected in the plasma, which facilitated the readout of the experiments.

For evaluation of the LUNAR TALEN mRNA strategy, we designed a TALEN pair targeting the mouse Pcsk9 gene which is involved in lipid metabolism.

The Pcsk9 gene is expressed only in the mouse liver, and the PCSK9 protein is then secreted into the blood circulation PCSK9 protein binds and downregulates the LDL

receptors present in the hepatocytes cell membrane.

Reduction of PSK9 protein levels, increases LDLR levels and its availability to take and reduce LDL-Cholesterol from the blood (Figure 1.

Top drawing).

A single intravenous dose of LUNAR-TALEN PCSK9 mRNA into wildtype mice lead to the production of the TALEN proteins in the mouse liver and to deletions in the targeted PCSK9 genomic DNA.

Deletions in the PCSK9 genome sequence inactivated the PCSK9 gene and, consequently, there was a reduction of PCSK9 protein levels in the mouse plasma of the treated mice (Figure 1.

Bottom Left).

Examination of the PCSK9 targeted DNA sequence extracted from different organs did not show any DNA modifications except for the liver, which is explained by the liver specificity of this LUNAR formulation (Figure 1.Bottom Right).

PCSK9 involvement in LDL-Cholesterol metabolism.

PCSK inhibits LDL-Receptor activity and increases LDL-Cholesterol in circulation.

Elimination of PCSK9 protein after editing the Pcsk9 target gene incrLeft:

LUNAR-PCSK9 TALEN mRNA dosing of mice at time Day 0 irreversibly reduces levels of PCSK9 in circulation.

Genome editing evaluation by sequencing shows INDEL (insertion/deletions) only in DNA extracted from the liver but not from other tissues.

To test the ability to deliver CRISPR technology into the liver, we use a single guide RNA known to target the mouse Ttr gene.

The transthyretin (TTR) protein is expressed only in the liver and is secreted into the blood circulation.

In humans, mutations in the TTR gene can cause transthyretin amyloidosis.

Mutations on the Ttr gene can alter the structure of the transthyretin protein impairing its normal function and leading to abnormal deposits of the TTR protein in different organs and tissues of the body, mainly in the nervous system and the heart.

Reduction of the TTR production could stop the progression of the disease (Fig.

LUNAR formulations containing a mouse TTR-specific single guide RNA (sgRNA) together with the Cas9 nuclease mRNA were injected intravenously into wildtype mice.

After a single dose, there was a reduction in the amount of TTR protein detected in the mouse serum (Fig.2, Bottom left).

This reduction of TTR protein correlated with the deletions detected in the

targeted TTR genomic DNA extracted from the liver of the LUNAR TTR-CRISPR mRNA treated mice (Fig.2, Bottom right) .

TTR protein containing mutations aggregates and deposits forming amyloid fibers in different organs causing cardiomyopathies or neuropathies.

TTT levels in the serum was reduced in mice treated LUNAR-CRISPR Cas9 and sgRNA TTR mRNA but not in mice treated with LUNAR Cas9 mRNA.

Genome editing evaluation by sequencing shows INDEL (insertion/deletions) only in the livers of the group of mice treated with LUNAR CRISPR Cas9 sgRNA TTR.

We are expanding our capabilities in the genome editing field by exploring the efficacy of LUNAR formulations carrying different genome editing tools in different organs in genomic DNA regions that could be of interest for potential therapies.

LUNAR Platform Program – Cancer vaccine (Immuno-oncology)

Our LUNAR Cancer Vaccine Program aims to develop an immunotherapy against a tumor via activated T-cells.

The vaccine would encode an antigen that would be specifically presented by (or associated with) a tumor, such that the vaccination would elicit T cell responses that recognize and attack the tumor.

We have applied our learnings from our more-advanced LUNAR-COVID-19 program to establish both STARR (self-amplifying) and conventional mRNA platforms for immuno-oncology therapy.

In a preclinical study, our proof of concept (POC) vaccine encoding AH1 antigen has demonstrated clear effectiveness in a syngeneic mouse model of a colorectal CT26 cell line.

With intramuscular administration of the STARR vaccine (two doses of 10 ug), treatment with a checkpoint inhibitor (CPI), anti-PD1/PDL1, led to a drastic reduction of tumor growth in comparison to the CPI treatment by itself (Panel A).

Moreover, the same level of efficacy was achieved with a single administration of a 0.2-ug dose of the STARR vaccine.

With various LUNAR® formulations, conventional mRNA vaccine expressing the AH1 antigen also demonstrated a robust T cell response (Panel B) and reduction of tumor growth with anti-PD1/PDL1 treatment in the syngeneic mouse model.

We believe that these POC results from the two platforms premise the application to various cancer with flexibility in dosing regimens.

Our current effort focuses on the selection of neoantigens and other tumor-specific antigens encoded in the cancer vaccines.

These antigens can be shared among patients, and therefore have more target patient populations.

Additional advancements of LUNAR Cancer Vaccine program include the improvement of antigen cassette designs, STARR RNA elements, and immune modulator molecules, all of which significantly enhanced T cell responses.

Antitumor activity and T cell response by Arcturus cancer vaccines.

STARR vaccine expressing a tumor antigen led to a significant reduction of the tumor growth rate of a colorectal cancer cell line, CT26.

T responses elicited by conventional mRNA cancer vaccine by various LUNAR® formulations.

Platform Technology Overview

Current Technologies and Limitations

mRNA therapeutics offer an attractive promise that other RNA medicines cannot provide – to increase the production of a protein in the body that is either defective or expressed at low levels to improve symptoms of a genetic disease without interacting with the patient’s genetic code.

The promise of mRNA therapies is only beginning to be realized with the approval of the first two mRNA vaccine therapies in 2020.

Developers of mRNA therapies should strive to improve ways to address the following hurdles:

delivery of an intact mRNA, which is much larger than other RNA drugs (e.g., small interfering RNA, siRNA) to the target organ and cell type needed for a therapeutic effect;

inefficient translation into the therapeutic protein;

short duration of effect of the mRNA medicine;

tolerability issues associated with therapeutic RNAs.

The first-generation lipid nanoparticle technology used to deliver mRNA therapeutics is also limited by their propensity to cause immune responses.

This decreases the tolerability of the medicine.

Many of these delivery systems biodegrade slowly, which causes accumulation of these lipids in cells upon repeat dosing.

Each of these aspects of current lipid nanoparticle delivery systems is expected to ultimately limit the utility and therapeutic reach of the RNA therapies they deliver.

Arcturus aims to mitigate the immune response and tolerability issues associated with the LNP mRNA delivery with the development of both less immunogenic mRNAs and more rapidly biodegradable lipids.

The Company has developed processes for the scale up of LNP-mRNA therapeutics to support clinical development.

As described below, Arcturus’ lipid-mediated delivery platform is designed to address many of the technical issues encountered to date for this very promising area of RNA medicines.

Our Delivery Solutions

Our LUNAR lipid-mediated delivery technology includes a diverse, growing library of over 200 proprietary lipids that we are rationally designing to be versatile, maximizing potential efficacy and improving tolerability of a diverse selection of nucleic acids, target cell types and routes of administration.

Our LUNAR lipid-mediated delivery technology includes a diverse, growing library of over 250 proprietary lipids that we are rationally designing to be versatile, while maximizing efficacy and improving tolerability of a diverse selection of nucleic acids, refining the LPNs to target specific cell types, and determining the most favorable routes of administration.

A key feature of our LUNAR lipids is their biodegradability, decreasing the undesired effects caused by lipid accumulation that are associated with tolerability issues present in other lipid-mediated RNA medicine delivery platforms.

Our experienced team continues to innovate in the area of producing LUNAR lipid formulated nucleic acid product candidates in a scalable and highly reproducible manner, reducing the costs of goods for the therapies in our pipeline.

Our team continues to advance in the area of producing LUNAR lipid formulated nucleic acid product candidates in a scalable and highly reproducible manner, reducing the costs of goods for the therapies in our pipeline.

In addition to our LUNAR lipid-mediated delivery technology, we believe we have created innovative, proprietary advancements in producing mRNA medicines, including improvements that increase purity, scalability, efficiency in production times, and adaptability to different mRNA modification strategies.

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We continue to invest in our LUNAR lipid-mediated delivery of mRNA (encoding CRISPR, TALEN, zinc finger proteins, and meganucleases), siRNA, DNA, microRNA, and antisense oligonucleotide technology platforms to improve their efficacy and safety profile, further expanding their applications.

This investment has led to key innovations ensuring optimal characteristics of our LUNAR formulated drug product candidates are attained, which we believe sets us apart from other nucleic acid therapeutics and lipid-mediated delivery platforms.

As such, we consider ourselves a leader in systemically administered mRNA therapeutics.

This investment has led to key innovations ensuring that our LUNAR formulated drug product candidates have optimal characteristics for therapeutic use, which we believe sets us apart from other nucleic acid therapeutics and lipid-mediated delivery platforms.

As such, we consider ourselves a leader in the research and development of systemically administered mRNA therapeutics.

Key Attributes of Our LUNAR Lipid-Mediated Delivery Technology

We have designed our LUNAR lipid-mediated delivery platform to address major challenges with nucleic acid medicine delivery, including transfection efficiency, adverse immune reactions and liver damage.

See below for a graphic representation of our LUNAR formulation, where blue spheres represent polyethylene glycol lipids and the orange, darker orange, and yellow spheres represent the proprietary “ATX” lipid excipient and other structural components (phospholipid and cholesterol).

Graphic of LUNAR

LUNAR formulations are a multi-component, lipid-mediated drug delivery system that utilizes our proprietary lipids, called ATX lipids.

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The amino head group is a key chemical component of the ATX lipid, making it pH-sensitive and providing it distinct advantages as a component of our LUNAR formulation.

At acidic pH, ATX lipids are positively charged, facilitating interaction with the negatively charged nucleic acid, thereby enabling LUNAR particle formation.

At acidic pH, ATX lipids are positively charged,

facilitating interaction with the negatively charged nucleic acid, thereby enabling LUNAR particle formation.

At physiological pH (e.g., pH 7.4), LUNAR formulations are neutrally charged, reducing the toxicity often seen with permanently positively-charged lipid-mediated delivery technology.

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LUNAR-platform development

The Company’s development of its LUNAR platform is focused on continuous innovation and advancement in the following areas:

The development of our LUNAR platform is focused on continuous innovation and advancement in the following areas:

Design and incorporate novel ATX lipids and formulations to enrich our library of proprietary ATX lipids for target cell/tissue specificity, improved tolerability and translatability to larger species;

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Develop stabilization strategies (e.g.

lyophilized presentation) for LUNAR formulation to mitigate frozen storage;

lyophilized presentation) for LUNAR formulations to mitigate frozen storage;

Continually assess and improvise LUNAR screening funnel to enable rigorous selection of ATX lipids for various programs.

Through the above efforts, our versatile LUNAR platform continues to drive internal and partner programs.

LUNAR compatibility with nucleic acids of various size

We have generated a growing library of over 200 proprietary ATX lipids.

ATX lipids are rationally designed to fit the application and vary depending on the target cell type and route of administration.

We perform extensive formulation screening for each nucleic acid therapeutic candidate to determine the optimal ATX lipid and LUNAR composition for the particular nucleic acid therapeutic candidate, the desired route of administration and target cell type.

We have demonstrated high encapsulating efficiency when formulating a wide range of nucleic acid sizes, 20 to 12,000 nucleotides in length (figure below, left), and particle size was within the acceptable range to maximize targeting and efficacy (figure below, right).

LUNAR Biodegradability

Although all ATX lipids are designed with biodegradable ester bonds in their backbone, one of the key platform learnings is the understanding of the relationship between positioning of these ester bonds and their clearance profile in vivo .

In vitro and in vivo screening assays are utilized in our LUNAR screening cascade to enable ranking of ATX lipids based on their esterase susceptibility.

These new assays have enabled a more rigorous selection of ATX lipids.

New ATX lipids with optimal biodegradability and potency continue to be identified and further characterized for potential application to upcoming therapeutic and vaccines programs.

LUNAR Scalability and Reproducibility

We have demonstrated scalability and reproducibility of LUNAR.

Multiple non-GMP and GMP batches of mRNA drug substance have been successfully produced from 0.5 to 30 gram scales with equivalent yield and purity.

Additionally, we have demonstrated scalability of our LUNAR-mRNA platform from milligram to multigram scales.

LUNAR-mRNA batches have been successfully produced at scales from 0.1 to 15 grams while retaining key physicochemical attributes of particles.

Lyophilization Process Advantages Over Conventional Frozen Liquid

We have engaged in focused efforts to develop lyophilized LUNAR formulations, in order to mitigate challenges associated with cold chain logistics of a -70°C frozen product.

A lyophilized product allows for simpler handling, such as no dry ice at point of care and lower risk of degradation from uncontrolled temperature fluctuations.

The results of these efforts have yielded a lyophilized version of ARCT-021 that maintains key quality attributes of the frozen liquid equivalent.

We are collecting stability data at -20°C, 2-8°C, and room temperature.

Targeting Capabilities

As proof of concept for augmenting LUNAR targeting capabilities for specific tissues and even cell types within those tissues, we are developing LUNAR formulations containing a propriety hepatocyte targeting agent.

Traditional lipid nanoparticle mediated delivery to hepatocytes occurs via uptake via the low-density lipoprotein receptor (“LDLR”).

To evaluate this targeting agent, we ran studies in a mouse model that is LDLR deficient.

Only the LUNAR formulations with this targeting agent were able to deliver mRNA to the hepatocytes, as compared to LUNAR formulations that did not contain the targeting agent.

Based on this promising data, we are expanding these platform development efforts.

As mentioned above, we have generated a growing library of more than 250 proprietary ATX lipids.

ATX lipids are rationally designed to fit their respective applications and vary depending on the target cell type and route of administration.

Aerosol capabilities have been developed for the Cystic Fibrosis program using Arcturus’ proprietary lipid nanoparticle delivery platform, LUNAR®.

Characterization and optimization of the aerosolized LUNAR® formulations in targeting airway epithelium have been achieved in rodent (mice, rat) and nonrodent models (ferret, NHP) as depicted in the image using a reporter mRNA encapsulated in LUNAR®.

The validation attained for the inhaled LUNAR® platform in the Cystic Fibrosis program will serve as a “plug and play” approach to support other respiratory approaches where targeting airway epithelium is needed.

LUNAR® delivery to airways epithelium demonstrated in vivo across species (rodents, ferrets, NHPs)

As proof of concept for augmenting LUNAR liver-targeting capabilities, we are developing LUNAR formulations containing a propriety hepatocyte_targeting agent.

Traditional lipid nanoparticle-mediated delivery to hepatocytes occurs via uptake by the low-density lipoprotein receptor (LDLR).

We evaluated this targeting agent in an LDLR-deficient mouse model and found that only the LUNAR formulations with this targeting agent were able to deliver mRNA to the hepatocytes compared to LUNAR formulations that did not contain the targeting agent.

Based on these promising data, we are expanding these platform development efforts.

LUNAR Safety (i.v.

administration)

ARCT-810 Nonclinical Safety Profile

Arcturus has instituted a robust ATX lipid screening paradigm to ensure that we identify formulations with suitable properties for the intended drug’s target product profile, whether is it a protein replacement therapy, a gene editing treatment, or a vaccine.

Drug product safety is a key feature in that profile.

An example of the outcome of these efforts is the safety profile that was obtained with ARCT-810, intended as a life-long treatment for OTC.

To support chronic administration of LUNAR-OTC (ARCT-810) in patients, nonclinical safety studies were conducted in nonhuman primates (NHPs).

The findings of this study demonstrated that the nonclinical safety profile for ARCT-810 did not change from short-term dosing (3 bi-weekly infusions) to chronic administration (bi-weekly infusions for 9-months).

ARCT-810 was well tolerated with no adverse findings at the highest dose administered, i.e., 1 mg/kg in the 9-month study.

9 month (Chronic) study

No Observed Adverse Effect Level (NOAEL)

Complement activation

Transient non-adverse elevations

Transient non-adverse elevations, no change with chronic dosing

Cytokine activation

Transient non-adverse elevations

Transient non-adverse elevations, no change with chronic dosing

Liver enzyme function

Transient non-adverse elevations

Transient non-adverse elevations, no change with chronic dosing

With these promising results, and the advancement of ARCT-810 further into clinical development, additional nonclinical studies were performed to evaluate the safety profile to support dosing in pregnant patients.

Pregnant mice were treated with ARCT-810 on gestation days 6 and 13 (a critical time for fetal development).

No maternal toxicity or negative effects on the development for the fetus were observed.

Both the maternal and fetal development NOAEL in this study was the highest dose tested, 5 mg/kg.

The completed non-clinical safety studies support the continued clinical development of ARCT-810.

Our Proprietary mRNA and Protein Design Technology

The mRNA programs in our pipeline are benefited by our in-house expertise in protein and mRNA design, which helps us address many of the known challenges that face the viability of mRNA therapeutics today.

We have identified several design elements of mRNA compounds that provide improved translation (conversion from mRNA to protein) of our mRNA therapeutics, including untranslated regions derived from species that have not previously been combined with human mRNA sequences.

We have identified several design elements of mRNA compounds that provide improved translation (the process of making protein based on the instructions/codes in the mRNA) of our mRNA therapeutics, including untranslated regions derived from species that have not previously been combined with human mRNA sequences.

This platform technology is applicable to many different human mRNA sequences that we are currently approaching in our discovery efforts.

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In addition to these platform technologies, we have developed a proprietary tool to aid our team in the efficient design and development of new mRNA drug candidates.

Our mRNA Design Suite is a cloud-based software suite with a collection of proprietary bioinformatic algorithms aimed at achieving highly improved potency

of a drug substance through optimization of mRNA sequences.

Our mRNA Design Suite is a cloud-based software suite with a collection of proprietary bioinformatic algorithms aimed at achieving highly improved potency of a drug substance through optimization of mRNA sequences.

The algorithms were developed in house through the integration of experimentally validated optimization processes.

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Our STARR mRNA Technology

STARR is designed to increase the amount and duration of protein antigen expression compared to conventional mRNA.

This is achieved by constructing an RNA that encodes for a replicon and a pathogenic protein antigen.

The replicon segment encodes for genes derived from an alpha-virus, specifically Venezuela Equine Encephalitis Virus, that is responsible for amplifying the production of the pathogenic protein antigen mRNA.

These are non-structural viral proteins, meaning they are not included in any virus particle and are completely incapable of producing any virus.

However, upon translation they produce multiple copies of the pathogenic protein antigen which increases production of the protein.

In addition, during the course of protein antigen mRNA replication, a short-lived double-stranded RNA intermediate is produced which activates the innate immune system.

This activation transitions to an adaptive immune response resulting in the specific programming of the immune system, both neutralizing antibody production and T lymphocyte activation, which are important in preventing pathogen infection.

The activation of the innate immune system by the double-stranded RNA intermediate serves as a self-adjuvanting feature, thus eliminating the need for the addition of an adjuvant to the vaccine.

An example of generating a protected immune response is shown in the graphic below.

The self-replicating RNA-based therapeutic vaccine triggers rapid and prolonged antigen expression within host cells resulting in protective immunity against infectious pathogens.

We believe the combination of LUNAR and STARR technology could provide lower dose requirements due to superior immune response and sustained protein expression as compared to non-self-replicating RNA-based vaccines.

Our vaccine platform is based on (1) our distinct and proprietary self-amplifying RNA (saRNA)platform (STARR) and (2) the LUNAR lipids that deliver the saRNA to cells.

Our STARR platform includes proprietary algorithms that inform the design and optimization of saRNA to enhance expression of the applicable antigen while minimizing structures that might inhibit expression.

The replicase, an RNA-dependent RNA polymerase, is encoded upstream of the antigen of interest and functions to amplify transcripts and increase the duration of antigen

expression compared to non-self-amplifying (conventional) mRNA.

The enhanced expression leads to higher immunogenicity at lower doses than conventional mRNA vaccines in preclinical studies (Figure x).

We believe this may enable us to simplify and increase the speed of vaccine production.

Our Unlocked Nucleic Acid (UNA) Oligomer Chemistry

UNAs are RNA analogues in which the C2’-C3’ bond of the ribose ring is absent (figure below).

UNA chemistry technology can potentially be applied to multiple types of RNA medicines including mRNA, siRNA, microRNA and guide RNAs for gene editing.

One or more UNAs can be positioned strategically along a nucleic acid strand to manipulate the chemical properties of the molecule.

RNA structure compared with UNA structure

UNAs can potentially improve the efficiency and specificity of siRNA-mediated protein suppression.

siRNAs are short double-stranded RNA molecules.

Once inside the cell, they become part of the RNA-induced silencing complex (“RISC”) and are split into two single siRNA strands.

One of these strands stays with RISC and binds to any mRNA with a complementary sequence.

If the wrong siRNA strand stays with RISC, it can bind to different mRNAs than the target mRNA and therefore inhibit translation of other proteins.

This is an undesired off-target effect and is one of the major barriers to developing effective siRNA medicines.

Incorporating a single UNA into siRNA molecules can make one of the strands preferentially bind to RISC, which improves specificity.

Additionally, incorporation of UNA modifications can reduce susceptibility of the siRNA to nuclease degradation, which improves the efficiency of siRNA-mediated protein suppression.

We own a comprehensive suite of UNA technology patents for therapeutic and reagent use, enabling us to operate freely and to independently pursue nucleic acid therapeutic candidates incorporating this technology.

We are also actively pursuing other novel chemistry technologies with the aim of overcoming the development and therapeutic challenges of nucleic acid medicines.

Our goal is to expand our nucleic acid technology portfolio and strengthen our ability to develop safer and more effective nucleic acid therapeutic candidates.

Supply and Manufacturing

We have built out robust manufacturing capabilities designed to meet global supply needs for clinical trials and future commercialization, with a network of established contract manufacturing organizations (“CMOs”) for producing critical raw materials, drug substance, and finished and packaged drug product.

We have developed, and continue to dedicate resources to advance, our sophisticated manufacturing know-how, including with respect to formulation of lipid nanoparticles, which improves manufacturing efficiency and capacity.

We are strategically exploring options to build our internal manufacturing capabilities for drug substance and finished drug product.

To date, we have manufactured and supplied gram quantities of drug substance, scaled up finished drug products through our CMOs for preclinical and clinical studies.

Our supply and manufacturing strategy is focused on addressing the following considerations:

a) multiple clinical pipeline candidates, b) commercial scale COVID vaccine products, c) regional and global product demand.

We have built a robust global manufacturing footprint with our partners, including Aldevron®, Catalent®, Recipharm, Polymun, Vingroup and ARCALIS.

With such collaborations we have established an Integrated Global Supply Chain Network with our primary and secondary sourcing contract manufacturing organizations (CMOs) based in the USA, EU and Asia for producing critical raw materials, drug substance, and finished and packaged drug product.

We expect our current manufacturing capabilities and completed, ongoing and planned global technology transfers to enable, by the end of 2022, a forecasted capacity of 200M doses per year of finished product for EUA, stockpiling and commercialization of COVID vaccine.

To date, we have manufactured and supplied gram quantities of drug substance, and scaled-up and validated our finished drug products (COVID Vaccine) through our CMOs for clinical studies, EUA, stockpiling and commercial readiness.

We have developed, and continue to dedicate, resources to advance our sophisticated manufacturing know-how, including formulation of lipid nanoparticles, which improves manufacturing efficiency and capacity.

Additionally, we are strategically exploring options to build our internal USA-based manufacturing capabilities for drug substance and finished drug product.

For the near future, we expect to continue to rely on third-party CMOs for the supply of drug substance and finished drug product for our current product candidates, including to support the launch of our first commercial products.

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Additionally, we continue to evaluate relationships with additional suppliers to increase overall capacity and diversify our supply chain.

Collaboration Arrangements

In addition to our internal development programs, we have a number of development partnerships structured where we work to discover mRNA or siRNA therapeutic candidates formulated for our LUNAR lipid-mediated delivery system.

Among other collaboration agreements,

we are partnering with Janssen to develop nucleic acid-based therapeutic candidates for the treatment of HBV, and potentially for other infectious or respiratory diseases;

we are partnering with Takeda to develop nucleic acid-based therapeutic candidates, primarily for the treatment of nonalcoholic steatohepatitis (“NASH”), as well as other gastrointestinal disorders;

Revenue and Collaboration Arrangements and Other Material Agreements

In addition to our internal programs, we have a number of strategic alliances where we collaborate with other parties on discovery, development, manufacturing or other efforts based on our LUNAR lipid-mediated delivery system and our proprietary mRNA and protein design technologies.

Among other collaboration arrangements,

we are partnering with Vinbiocare, a Vingroup company, regarding a collaboration to establish a manufacturing facility in Vietnam for the manufacture of our COVID-19 vaccines, for sale and use in Vietnam;

we are partnering with Janssen to develop nucleic acid-based therapeutic candidates for the treatment of Hepatitis B Virus (HBV);

we are partnering with Ultragenyx to develop mRNA therapeutic candidates for rare disease targets;

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we have received funding from the CFF to support our LUNAR-CF development program;

we are partnering with the Singapore Economic Development Board and Duke-NUS Medical School to develop a potential vaccine for the Coronavirus outbreak.

Janssen Agreement

we are partnering with the Singapore Economic Development Board and Duke-NUS Medical School to develop a vaccine for the Coronavirus outbreak.

Beginning on July 29, 2021, we entered into a series of agreements with Vinbiocare, a member of Vingroup Joint Stock Company (collectively the “Vinbiocare Agreement”) , whereby we will provide technical expertise and support services to Vinbiocare to assist in the build out of a manufacturing facility in Vietnam for the manufacture

of our investigational COVID-19 vaccines, for sale and use within Vietnam.

The Technology License and Technical Support Agreement and Framework Drug Substance Supply Agreement became effective on July 30, 2021.

License Agreement

Within the Vinbiocare Agreement, we entered into a Technology License and Technical Support Agreement (the “License Agreement”).

Pursuant to the terms of the License Agreement, Vinbiocare is, in consultation with us, building a manufacturing facility in Vietnam (the “Facility”), and we are providing to Vinbiocare access to proprietary technologies and processes for the manufacture of our investigational COVID-19 vaccines.

We have granted to Vinbiocare an exclusive license to manufacture the vaccines in Vietnam at the Facility solely for distribution in Vietnam.

The license and technology transfer applies to the manufacture of the final drug product of the vaccines, but not to the manufacture of mRNA drug substance or to the manufacture of our proprietary lipids used in our LUNAR ® delivery platform.

Vinbiocare paid us a non-refundable upfront payment and is responsible for costs associated with the technology transfer.

Vinbiocare is also required to pay us a royalty on each dose of the vaccines produced at the Facility.

Other than the mRNA drug substance and our proprietary lipids, which will be sold by us to Vinbiocare, Vinbiocare is responsible for procuring all other raw materials and other inputs for the final vaccine drug product.

Vinbiocare will be responsible for commercialization activities for the vaccines manufactured at the Facility for distribution within Vietnam.

Under the terms of the License Agreement, Vinbiocare is paying for our ongoing Phase 3 trial of ARCT-154 being conducted in Vietnam.

Unless earlier terminated, the License Agreement will expire on December 31, 2032.

We have the right to terminate the License Agreement upon certain events, including if the Supply Agreement terminates, if Vinbiocare does not, on or prior to December 31, 2023, make a commercial dose of the vaccine in Vietnam following regulatory approval, and if we determine to cease manufacturing, development, or commercialization of the vaccines globally.

Vinbiocare may terminate the License Agreement for convenience.

Either party may terminate the License Agreement for uncured material breach of the other party.

Vinbiocare’s obligations under the License Agreement have been guaranteed by its parent company.

Supply Agreement

Within the Vinbiocare Agreement, we entered into a Framework Drug Substance Supply Agreement (the “Supply Agreement”), and pursuant to the terms of the Supply Agreement, we will supply, and Vinbiocare will pay for, mRNA drug substance for the manufacture of the vaccines under the License Agreement.

The Supply Agreement will terminate contemporaneously with the License Agreement.

In addition, each party may terminate the Supply Agreement for uncured material breach of the other party.

Vinbiocare’s obligations under the Supply Agreement have been guaranteed by its parent company.

On October 18, 2017, we entered into a Research Collaboration and License Agreement with Janssen (the “Janssen Agreement”) to collaborate on developing candidates for treating HBV with RNA therapeutics.

Under the Janssen Agreement, Janssen and the Company will carry out their respective research obligations pursuant to agreed-upon joint research plans, and we may not engage in HBV-related research independent of the Janssen Agreement.

Under the Janssen Agreement, Janssen and Arcturus will carry out their respective research obligations pursuant to agreed-upon joint research plans, and we may not engage in HBV-related research independent of the Janssen Agreement.

The Janssen Agreement provides that Janssen will develop the candidates licensed pursuant to the agreement, obtain certain regulatory approvals, and commercialize products containing the development candidates.

Under the Janssen Agreement, both parties granted each other certain non-exclusive, royalty-free licenses to conduct the research covered by the agreement.

Under the Janssen Agreement, Janssen paid us an upfront fee of $7.7 million.

On a development candidate-by-development candidate basis, Janssen will pay us certain development milestone payments of up to $56.5 million for each of the first two products to treat HBV and in each indication for which Janssen exercises its option to license certain therapeutics from us.

In addition, on a research program-by-research program basis, Janssen will pay us between $20 million and $40 million in multiple sales milestone payments if they achieve certain annual net sales milestones in the first calendar year in which such milestones are achieved.

Janssen will also pay between $1 million and $5 million in option exercise fees, with the precise amount depending on when Janssen exercises its license option.

Under the Janssen Agreement, Janssen paid us an upfront fee and on a development candidate-by-development candidate basis, Janssen will pay us certain development milestone payments for each of the first two products to treat HBV as well as in each indication for which Janssen exercises its option to license certain therapeutics from us.

In addition, on a research program-by-research program basis, Janssen will pay us sales milestone payments if they achieve certain annual net sales milestones in the first calendar year in which such milestones are achieved.

Janssen will also pay option exercise fees within a certain range, with the precise amount depending on when Janssen exercises its license option.

In addition, Janssen will pay royalties on annual net sales of licensed products up to a mid-single digit percentage, subject to (i) reduction on a country-by-country and licensed-product-by-licensed-product basis and (ii) certain events, such as expiration of program patents.

In Q4 2021, Janssen

formally acknowledged that we had achieved the first milestone of showing “In Vivo Efficacy and Safety” of a nucleic acid therapeutic under investigation, and Janssen paid the corresponding m ilestone p ayment to us .

The Janssen Agreement will terminate when no further royalty payments on any licensed products are payable.

Janssen may terminate the Janssen Agreement at any time on a licensed product-by-licensed product and country-by-country basis, or in its entirety, in each case upon 60 days’ written notice.

Ultragenyx Agreement

On October 26, 2015, we entered into a Research Collaboration and License Agreement with Ultragenyx, which was later amended on October 17, 2017 and April 20, 2018 (as amended, the “Ultragenyx Agreement”).

Ultragenyx initially selected two development targets, including Glycogen Storage Disease Type III, and the parties initially agreed to a list of eight additional reserved rare disease targets which Ultragenyx has an exclusive option to

select for collaborative development.

The Ultragenyx Agreement provides for an exclusivity period, during which Ultragenyx may substitute a reserved target for a selected target, in which case such reserved target will be deemed an additional target and will preclude an additional reserved target in place of the newly reserved target.

Further, during the exclusivity period, Ultragenyx may replace a reserved target with a proposed new target, subject to certain conditions, including whether we have the ability to partner with respect to such new target.

Under the Ultragenyx Agreement, we have granted Ultragenyx exclusivity (i) with respect to development targets, to the development and commercialization of products containing nucleic acid technology, and (ii) with respect to reserved targets and subject to the right of first negotiation described below, the development and commercialization of any product containing nucleic acid products or utilizing LUNAR lipid-mediated delivery technology.

During the reserved target exclusivity period and with respect to reserved targets, Ultragenyx has a right of first negotiation for any nucleic acid product utilizing LUNAR lipid-delivery technology with respect to such reserved targets.

These restrictions terminate upon expiration of the reserved target exclusivity period for each target, which may be extended on a reserved target-by-reserved target basis upon payment of an exclusivity extension fee.

Following the reserved target exclusivity period and on a reserved target-by-reserved target basis, Ultragenyx has an exclusive right of first negotiation to obtain an exclusive license to exploit RNA products with respect to such reserved target.

If we have not entered into an agreement with Ultragenyx by the time its exclusive right of first negotiation expires, its rights with respect to such reserved target terminate and we may grant a license or enter into an arrangement with a third-party with respect to such reserved target.

On October 26, 2015, we entered into a Research Collaboration and License Agreement with Ultragenyx, which was later amended in 2017, 2018 and during the second quarter of 2019 (as amended, the “Ultragenyx Agreement”).

Under the Ultragenyx Agreement, we have granted Ultragenyx exclusivity (i) with respect to development targets, to the development and commercialization of products containing nucleic acid technology, and (ii) with respect to reserved targets, the development and commercialization of any product containing nucleic acid products or utilizing LUNAR lipid-mediated delivery technology.

Under the Ultragenyx Agreement, we have granted Ultragenyx a co-exclusive, royalty-free, sublicensable license of our technology for conducting collaborative development of development targets, compounds and products.

The license remains in effect for a specified option period based upon achievement of milestones with respect to development targets and reserved targets, and development of compounds and products with respect to such development targets and reserved targets.

If Ultragenyx exercises its option with respect to a development target and we enter into a license with them, it will receive an exclusive, royalty bearing, sublicensable (subject to certain limitations) license to our technology to exploit compounds and products with respect to such development target.

For development targets and reserved targets that revert to us (“Discontinued Targets”), Ultragenyx will grant us an exclusive, worldwide, perpetual license to all technology developed pursuant to the Ultragenyx Agreement with respect to such Discontinued Targets.

We will pay Ultragenyx royalties on net sales related to Discontinued Targets on a country-by-country basis until the expiration of the last valid claim, product-specific patents or patent rights covering such Discontinued Targets that we have licensed from Ultragenyx.

The amount of any such royalties will depend on the state of development of the subject Discontinued Target and will be a low-single digit percentage.

In connection with the execution of the Ultragenyx Agreement, Ultragenyx paid us an upfront fee of $10 million.

We are entitled to certain additional payments (i) for costs we incur in connection with our activities under agreed-upon collaborative development plans, and (ii) if Ultragenyx exercises its option to select additional reserved rare disease targets for collaborative development.

For each development target for which Ultragenyx exercises this option, it will pay us a one-time option exercise fee, which will vary depending on the total number of development targets for which it has exercised such option.

The option exercise fee is subject to reduction if a development target does not utilize certain of our patented RNA-delivery technology or nucleic acid chemistry technology.

Ultragenyx will also pay us certain milestone payments with respect to clinical/regulatory development (not to exceed $49 million per development target), and commercialization (not to exceed $90 million per development target), in each case subject to reduction if the relevant development program does not utilize technology covered by certain of our patents.

During the applicable royalty term, Ultragenyx will also pay royalties as a percentage of net sales (not to exceed 10%) on a product-by-product and country-by-country basis.

The Ultragenyx Agreement provides that each party owns any intellectual property that it develops independently, and that any intellectual property developed jointly on behalf of both parties will be owned jointly, provided that (i) Ultragenyx will own all collaboration technology that specifically relates to (i) the composition or

formulation of a particular compound or product, or (ii) any method of using, making or administering a particular compound or product, and (ii) we will own all improvements to LUNAR lipid-mediated delivery technology and/or UNA oligomer chemistry.

Unless terminated earlier, the Ultragenyx Agreement expires upon the expiration of the last-to-expire royalty term for any product, on a development target-by-development target basis.

Upon expiration with respect to a particular development target, our license of technology to Ultragenyx to exploit products with respect to the relevant development target will become fully paid-up, irrevocable and exclusive.

On a target-by-target basis, Ultragenyx has the right to terminate for convenience upon 60 days’ written notice.

In connection with the execution of the Ultragenyx Agreement, Ultragenyx paid us an upfront fee and we are entitled to certain additional payments (i) for costs we incur in connection with our activities under agreed-upon collaborative development plans, and (ii) if Ultragenyx exercises its option to select additional reserved targets for collaborative development.

For each development target for which Ultragenyx exercises this option, they will pay us a one-time option exercise fee, which will vary depending on the total number of development targets for which it has exercised such option.

Ultragenyx will also pay us certain milestone payments with respect to clinical/regulatory development and commercialization, and will pay royalties as a percentage of net sales on a product-by-product and country-by-country basis.

On June 18, 2019, we expanded our collaboration with Ultragenyx and entered into a third amendment (the “Third Amendment”) to the Ultragenyx Agreement.

Pursuant to the Third Amendment, the total number of targets was increased from 10 to 12, and we granted Ultragenyx exclusivity to development targets for four years at no additional cost.

In connection with the Third Amendment, Ultragenyx purchased 2.4 million shares of our common stock for $24.0 million and made a one-time upfront payment of $6.0 million.

Ultragenyx also received a two-year option to purchase an additional 600,000 shares of our common stock at a price of $16.00 per share.

Additionally, until the later of (i) the first anniversary of the closing date or (ii) the date on which Ultragenyx beneficially owns less than 8.0% of the total voting power of the Company, at each annual shareholders’ meeting or any shareholders’ meeting at which board members are to be elected, we must nominate one director designated by Ultragenyx (the “Ultragenyx Designee”).

Additionally, the Ultragenyx Designee is required to be appointed to all board committees (subject to applicable Nasdaq rules).

Ultragenyx also has the right to have its designee attend board meetings as a non-voting observer.

Karah Parschauer, the Executive Vice President and Corporate Counsel of Ultragenyx, joined the board in June 2019 as the Ultragenyx Designee.

On June 18, 2019, we entered into an Equity Purchase Agreement with Ultragenyx.

Pursuant to this agreement, we granted Ultragenyx a two-year option to purchase up to 600,000 additional shares of our common stock at a price of $16.00 per share.

On May 20, 2020, Ultragenyx completed the exercise of this option to purchase an additional 600,000 shares of common stock in accordance with the terms of the agreement.

The issuance of the additional 600,000 shares closed on May 20, 2020.

CureVac Agreement

In connection with the Third Amendment, Ultragenyx purchased shares of our common stock and made a one-time upfront payment.

Ultragenyx also received a two-year option to purchase additional shares of our common stock which they exercised in May of 2020.

On December 1, 2021, Ultragenyx announced that the first patient had been dosed in its Phase 1/2 study of UX053, an investigational messenger RNA therapy in development under the collaboration for the treatment of Glycogen Storage Disease Type III, and thus the first milestone under the collaboration agreement had been met.

On January 1, 2018, we entered into a Development and Option Agreement with CureVac, which was amended on May 3, 2018 and later restated on September 28, 2018 (as amended and restated, the “Development and Option Agreement”).

Under the terms of the Development and Option Agreement, CureVac and Arcturus agreed to conduct joint preclinical development programs and we granted CureVac a license to develop and commercialize certain products incorporating certain of our technology (the “Arcturus LMD Technology”) and CureVac technology.

The products subject to the Development and Option Agreement relate to certain targets to be identified during the term of the agreement.

The products subject to the Development and Option Agreement relate to certain targets to be identified during the eight year term of the agreement.

In consideration for the rights granted under the Development and Option Agreement, we received an upfront fee from CureVac.

In connection with the Development and Option Agreement, we granted CureVac a worldwide, non-exclusive, sublicensable license to use the Arcturus LMD Technology for the purpose of conducting research and preclinical development activities, subject to certain limitations.

In addition, CureVac granted to us a worldwide, non-exclusive license to its mRNA technology to the extent necessary for us to execute the activities contemplated by the Development and Option Agreement.

Subject to certain restrictions, the Company and CureVac each have an undivided one-half interest in the patents and know-how developed jointly during the course of the Development and Option Agreement.

The amended and restatement of the Development and Option Agreement provided for (i) an increase in the number of targets available to CureVac and (ii) agreed-upon license forms to be executed upon selection of targets by CureVac.

Subject to certain limitations, CureVac may designate certain targets as reserved targets.

To the extent a reserved target is only available on a non-exclusive basis, CureVac may elect to enter into a non-exclusive license agreement on a pre-negotiated form to be executed upon identification of the relevant target.

CureVac is required to pay us a fee for any license (exclusive or non-exclusive), the amount of which depends on whether the target involves a rare or non-rare disease.

Each development program with CureVac is subject to the terms of a work plan, pursuant to which the Company and CureVac will work to develop certain products.

Pursuant to the form of license agreement, if CureVac achieves all development and commercialization milestones with respect to the licensed product developed for an identified target, it is required to (i) pay certain development and regulatory approval milestones, the amount of which depends on whether the target involves a rare or non-rare disease, and (ii) royalties in a low-single digit percentage on the net sales of each product subject to a license agreement on a country-by-country and product-by-product basis.

Such royalties are subject to reduction for third-party payments with respect to licensed products or if there is no valid claim under the licensed patents, but may not fall below a specified percentage if the licensed product during the royalty term is not covered by a licensed patent.

Further, if within 24 months after the license agreement effective date, CureVac grants a sublicense to a third party for the development and commercialization of the licensed products, then CureVac will pay us a single-digit percentage of the total sublicense income that it receives to the extent that such income exceeds (i) the fee paid by CureVac under the Development and Option Agreement to identify a target for such license agreement and (ii) the milestone payments paid by CureVac under such license agreement.

The fees, milestones and royalty payments for a non-exclusive license are 50% of the corresponding payments for an exclusive license.

The Development and Option Agreement had an initial term of eight years, unless earlier terminated or extended in accordance with its terms.

Within 60 days prior to the expiration of the initial term, CureVac has the option to extend the initial term of the agreement on an annual basis for up to a total of three successive years upon payment of an annual non-refundable extension fee.

CureVac has the right to terminate the agreement in full or on a program-by-program basis (i) upon a material breach by us that is not cured within a certain period, (ii) upon a change in control of Arcturus, or (iii) without cause upon 60 days’ notice to us.

We have the right to terminate the agreement upon material breach by CureVac that is not cured within a certain period.

Upon termination, all licenses granted under the Development and Option Agreement will terminate, but any license agreement entered into pursuant upon the identification of a target will remain in effect.

On February 11, 2019, we announced the termination of our obligations to CureVac for the preclinical development of ARCT-810, effective August 4, 2019, and the re-assumption of our worldwide rights thereto.

On July 24, 2019, the Company and CureVac entered into an amendment to the Development and Option Agreement, pursuant to which we agreed to (i) shorten the time period during which CureVac may select potential targets to be licensed from the Company from eight years to four years, and (ii) reduce the overall number of maximum targets to be reserved and licensed to 10 targets.

Additionally, we canceled our related Co-Development and Co-Commercialization agreement for developing and commercializing ARCT-810.

Other Collaboration Agreements

On December 6, 2016, we entered into a Research Agreement (as amended, the “Takeda Agreement”) with Takeda.

Under the Takeda Agreement, we conducted a joint research program (the “Research Program”) with Takeda to discover siRNA medicines for the treatment of NASH.

The program involved development of siRNA compounds formulated in LUNAR lipid-mediated delivery technology for in vivo studies.

Pursuant to the Takeda Agreement, Takeda had a non-exclusive, worldwide sublicensable license to our technology until December 20, 2018 (the “Research Term”) for the purpose of conducting the Research Program.

We also agreed not to engage in any research or development activities involving LUNAR and UNA oligomers for any NASH targets involved in the Research Program for two years after the Research Term.

On March 8, 2019, we entered into a subsequent Research Agreement with Takeda, which was subsequently amended on June 3, 2019 (as amended, the “New Takeda Agreement”).

Under the New Takeda Agreement, Takeda received a non-exclusive, worldwide, sublicensable license to certain of our technology, including mRNA compounds formulated for LUNAR lipid-mediated delivery technology, for the purpose of conducting a joint research program on additional targets in in vitro and in vivo models of liver diseases (including NASH).

Both Arcturus and Takeda have agreed not to participate in other research, internally or with a third party, on therapeutic mRNA molecules designed to express the selected targets.

We also granted Takeda an exclusive option to negotiate a license to the product candidates determined to be of potential relevance as a result of the joint research program.

The option lasts for a certain period of time following the delivery of the results of the research program.

Funds remaining from the Takeda Agreement will be transferred to cover our activities under the New Takeda Agreement.

If any remaining funds are unspent or uncommitted for expenditure upon completion of the current research program, then we will retain such funds.

We have a Research Collaboration and License Agreement with Providence Therapeutics Inc.

(the “Providence Agreement”).

The Providence Agreement provides for collaborative efforts to identify and optimize microRNA modulators or mimetics for the treatment of neoplastic diseases.

In April 2017, the Providence

Agreement was amended to include mRNA for the treatment of neoplastic disease.

In July 2018, the Providence Agreement was amended and restated to cover brain neoplasms, breast neoplasms and ovarian neoplasms.

Additionally, we have a Research and Nonexclusive License Agreement with Synthetic Genomics, Inc.

(“Synthetic Genomics”), pursuant to which we granted Synthetic Genomics a nonexclusive, worldwide license to use our LUNAR lipid-mediated delivery to research, develop, manufacture and commercialize vaccines, but expressly excluding diagnosis, prophylaxis and treatment of respiratory disease viruses other than influenza.

During 2019 Synthetic Genomics exercised its right to sublicence the LUNAR technology subject to the license to certain third parties.

Other Material Agreements

Protiva Agreement

On August 9, 2013, we entered into a Patent Assignment and License Agreement with Marina Biotech, Inc.

(“Marina”), pursuant to which Marina assigned to us certain intellectual property, including patents, inventions and information related to UNA oligonucleotide therapeutics, as well as Marina’s rights and obligations under a License Agreement (the “Protiva Agreement”) with Protiva Biotherapeutics Inc.

(“Protiva”), a wholly-owned subsidiary of Arbutus Biopharma Corporation.

The intellectual property licensed from Marina is a significant component of our UNA oligomer chemistry platform.

As partial consideration for the assignment from Marina, we granted Marina a royalty-free, fully-paid, irrevocable, worldwide, non-exclusive license to use the inventions, ideas and information embodied in the assigned patents to develop, make, use and sell chemical compounds intended for human and animal therapeutic uses (including certain rights to sublicense in connection with continuing research, development and/or commercialization).

We also paid an upfront fee to Marina and agreed to maintain the assigned patents in certain countries.

Under the assigned Protiva Agreement, we granted Protiva a non-exclusive, irrevocable, perpetual, worldwide license with certain rights to sublicense (in connection with continuing research, development and/or commercialization) to exploit our patents, know-how and inventions relating to our technology for purposes of the development of human therapeutics.

Upon achievement of certain development milestones with respect to each Protiva product directed to a specific gene target, Protiva will pay us milestone payments with an aggregate value of up to $3.25 million for each such product and target.

If Protiva instead sublicenses the commercialization rights for a Protiva product, then it will pay us a percentage of sublicense revenues it receives from sublicensees, the amount of which payment depends on the development stage of such Protiva product at the time of sublicense.

In addition, Protiva will pay us royalties on net sales of Protiva products during the royalty term.

The royalties depend on the type of product and are on a country-by-country basis.

For licensed Protiva products, royalties will be paid in a low single digit percentage on net sales for such product, subject to reduction on net sales in the event there is no patent coverage or generic products are introduced with respect to such product.

A royalty reduction will apply if Protiva is required to license third party intellectual property to commercialize such product, subject to a cap on such reductions.

The Protiva Agreement for a particular Protiva product in a particular country will expire on a country-by-country basis upon the earlier of (i) the expiration of the royalty term for such product in such country, or (ii) the end of the calendar quarter in which sales in such country of generic products exceed sales of Protiva products in such country by a certain amount.

Unless earlier terminated by its terms, the Protiva Agreement will expire in its entirety upon expiration of the last royalty term for any of our patents with respect to which Protiva has a license under the agreement.

Protiva may terminate the Protiva Agreement for convenience in its entirety, or for a particular country or countries, upon ninety days’ prior written notice to us.

Alexion License Agreement

On February 17, 2021, we entered into an exclusive license agreement with Alexion Pharmaceuticals, Inc.

(“Alexion”) pursuant to which Alexion granted to Arcturus Therapeutics, Inc.

an exclusive, worldwide license to exploit certain specified Alexion patents.

In accordance with the terms of the license agreement, and in exchange for the license, we issued 74,713 shares of our common stock to Alexion on February 19, 2021, which number of shares was based on a price of $66.92 per share.

The price was determined based on the volume weighted average closing price of the Company’s common stock on The NASDAQ Global Market for the thirty trading days ending on February 17, 2021.

Prior to expiration of the initial term of eight years (which was subsequently amended, as discussed below), the Development and Option Agreement also includes an option to extend the term on an annual basis for up to three years, subject to payment by CureVac to Arcturus of a non-refundable annual extension fee.

The Development and Option Agreement includes potential milestone payments from CureVac for selected targets.

Additionally, CureVac will pay royalties as a percentage of net sales on a product-by-product and country-by-country basis during the applicable royalty term in the low single-digit range.

On July 26, 2019, we entered into an amendment (“CureVac Amendment”) to the Development and Option Agreement, pursuant to which the parties have agreed to shorten the time period during which CureVac may select potential targets to be licensed from eight years to four years, and to reduce the overall number of maximum targets that may be reserved and licensed.

Cystic Fibrosis Foundation Agreement

On May 16, 2017, pursuant to a Development Program Letter Agreement (the “CFF Agreement”), CFF awarded us approximately $3.1 million to fund a development program to identify lead CFTR mRNA sequences and LUNAR formulations, demonstrate tolerability of LUNAR CFTR mRNA, and demonstrate translatability of aerosolized LUNAR (the “CFF Agreement”).

The award will be received according to a milestone schedule and unused funds will be retained by CFF.

We will use commercially reasonable efforts to conduct the development program and develop the product thereafter.

On May 16, 2017, pursuant to a Development Program Letter Agreement (the “CFF Agreement”), CFF agreed to award us funding for a development program to identify lead CFTR mRNA sequences and LUNAR formulations, demonstrate tolerability of LUNAR CFTR mRNA, and demonstrate translatability of aerosolized LUNAR (the “CFF Agreement”).

The award includes a grant of rights to CFF know-how to assist us to research, develop, commercialize, make or otherwise exploit a product.

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Further, in the event of a license, sale or other transfer of the product or our development program technology (including a change of control transaction), we will pay CFF a percentage of such license, sale of transfer payments actually received by us or our shareholders (subject to a royalty cap).

Pursuant to CFF’s interruption license right under the CFF Agreement, if we fail to use commercially reasonable efforts to develop a product for a certain time period before the first commercial sale of such product, CFF may, upon written notice and our failure to effectively deny or cure such interruption (as set forth in the CFF Agreement), exercise certain rights pursuant to procedures set forth in the CFF Agreement.

CFF’s rights include, in certain cases, payments from us to CFF, or the grant of an exclusive (even as to us), worldwide license to CFF under our development program technology solely to the extent necessary to manufacture, have manufactured, license, use, sell, offer to sell, and support the product in the field of treatment of cystic fibrosis and other pulmonary diseases.

All inventions, data, know-how, information, results, analyses and other intellectual property rights resulting from the development program will be owned by us, and subject to certain exceptions, CFF has assigned and transferred to us all of its right, title, and interest in and to all inventions and other intellectual property resulting from the development program.

Either party may terminate the CFF Agreement for cause (e.g., material breach by the other party of its covenants or obligations).

On August 1, 2019, the Company and CFF amended the CFF Agreement.

Pursuant to the amendment, (i) CFF will increase the amount it will award to advance LUNAR-CF to $15.0 million from approximately $3.2 million, (ii) the Company will provide $5.0 million in matching funds for remaining budgeted costs, (iii) the related disbursement schedule from CFF to us will be modified such that (a) $4.0 million was disbursed upon execution of the amendment, (b) $2.0 million will be disbursed within 30 days of the first day of each of January, April, July and October 2020 upon us invoicing CFF to meet project goals, and (c) the last payment of $3.0 million less the prior award previously paid out (approximately $2.3 million) will be disbursed upon us invoicing CFF to meet good manufacturing practices and submitting an IND application.

The funds received from CFF will be recognized as contra research and development expense in proportion to the percentage covered by CFF of the overall budget.

On August 1, 2019, we amended the CFF Agreement.

Pursuant to the amendment, (i) CFF will increase the amount it will award to advance LUNAR-CF, (ii) we will provide a certain amount of matching funds for remaining budgeted costs, (iii) the related disbursement schedule from CFF to us will be modified such that (a) a disbursement was made upon execution of the amendment, (b) an agreed upon amount will be disbursed to us within 30 days of the first day of each of January, April, July and October 2020, and (c) the last payment will be disbursed upon us invoicing CFF to meet good manufacturing practices and submitting an IND application.

In January 2022, the parties signed an amendment for CFF to fund the development of a CF ferret model for application in the development of ARCT-032, our LUNAR-CF candidate.

Singapore Economic Development Board

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We have agreed to pay Duke-NUS Medical School a low single digit royalty based on annual net sales of the vaccine in markets or jurisdictions outside of Singapore.

On October 2, 2020, we were awarded a grant from the EDB to support the further development of our LUNAR-COV19 vaccine candidate.

The Grant provides for up to S$9.3 million (approximately US$6.7 million) to support the development of the vaccine candidate.

The Grant is payable in two installments upon the achievement of certain milestones related to the progress of the development of the vaccine candidate.

We received the first installment of approximately $3.6 million in the fourth quarter of 2020.

On November 7, 2020, we entered into a Manufacturing Support Agreement (the “Support Agreement”) with the EDB pursuant to which they agreed to make a term loan of up to S$62.1 million (subject to adjustment based on exchange rates) to the Company, subject to the satisfaction of customary deliveries, to support the development of

the LUNAR-COV19 vaccine candidate (the “Singapore Loan”).

We elected to borrow the full amount available under the Support Agreement of S$6 2 .1 million , or $46.

6 million as a result of applicable exchange rates , on January 29, 2021.

On October 2, 2020, we were awarded an additional grant from the EDB to support the further development of ARCT-021.

On November 7, 2020, we entered into a Manufacturing Support Agreement (the “Support Agreement”) with the EDB pursuant to which they agreed to make a term loan to us, subject to the satisfaction of customary deliveries, to further support the development of the LUNAR-COV19 vaccine candidate.

On January 29, 2021, we elected to borrow the full amount available under the Support Agreement.

Subject to certain exceptions, the Singapore Loan is a limited recourse loan that is intended to be repaid solely through a royalty payment on sales of the LUNAR-COV19 vaccine candidate, with a portion of the proceeds on all such vaccine sales being applied on a quarterly basis to prepay outstanding principal and interest under the Singapore Loan.

However, all unpaid principal and interest under the Singapore Loan will be due and payable five years after draw date, if net sales of the LUNAR-COV19 vaccine exceed a certain minimum threshold during this five year period or the Company obtains clearance to sell the vaccine in specified jurisdictions.

However, all unpaid principal and interest under the Singapore Loan will be due and payable five years after draw date, if net sales of the LUNAR-COV19 vaccine exceed a certain minimum threshold during this five year period or we obtain clearance to sell the vaccine in specified jurisdictions.

Unpaid principal and interest under the Singapore Loan will also become due and payable upon an event of default under the Support Agreement.

If any portion of the Singapore Loan is required to be forgiven pursuant to the terms of the Support Agreement, the EDB has the right to take ownership of certain raw materials and equipment that were purchased by the Company with proceeds of the Singapore Loan (the “Specified Assets”) and entered into a security agreement for the benefit of the EDB to provide that repayment of the Singapore Loan and related obligations are secured by a lien on the Specified Assets.

Other Collaboration Arrangements

On December 6, 2016, we entered into a research agreement with Millennium Pharmaceuticals, Inc., a wholly owned subsidiary of Takeda Pharmaceutical Company Limited (“Takeda”) .

Under the agreement, we conducted a joint research program with Takeda to discover siRNA medicines for the treatment of NASH.

The program involved development of siRNA compounds formulated in LUNAR lipid-mediated delivery technology for in vivo studies.

On March 8, 2019, we entered into a subsequent research agreement with Takeda, which was subsequently amended on June 3, 2019.

Under this amended agreement, Takeda received a non-exclusive, worldwide, sublicensable license to certain of our technology, including mRNA compounds formulated for LUNAR lipid-mediated delivery technology, for the purpose of conducting a joint research program on additional targets in in-vitro and in-vivo models of liver diseases.

On August 20, 2021, we received notice from Providence Therapeutics, Inc.

to terminate the Amended and Restated Joint Venture, Research Collaboration and License Agreement, dated as of July 15, 2018.

No termination penalties were incurred by Providence or Arcturus in connection therewith.

Other Material Agreements

Alexion License Agreement

On February 17, 2021, we entered into an exclusive license agreement with Alexion Pharmaceuticals, Inc.

(“Alexion”) pursuant to which Alexion granted to Arcturus Therapeutics, Inc.

an exclusive, worldwide license to exploit certain specified Alexion patents.

In accordance with the terms of the license agreement, and in exchange for the license, we issued shares of our common stock to Alexion.

The per share price was determined based on the volume weighted average closing price of our common stock on The NASDAQ Global Market for the thirty trading days ending on February 17, 2021.

Israel Supply Agreement

On August 17, 2020, our wholly owned subsidiary entered into a definitive Supply Agreement (the “Supply Agreement”) with the Israeli MOH which provides for the supply of LUNAR-COV19 to the MOH.

The MOH has elected to reserve delivery by us of doses of LUNAR-COV19 for an initial 500,000 vaccinations (the “Initial Reserve Doses”).

The Supply Agreement also provides the MOH with the right to elect, in its discretion, to purchase additional doses of LUNAR-COV19 upon notice to us prior to specified dates at specified purchase prices.

On October 14, 2020, we received a non-refundable first reserve payment of $12.5 million from the MOH.

The MOH has elected to reserve an initial 500,000 doses of LUNAR-COV19 vaccinations.

On October 14, 2020, we received a non-refundable first reserve payment from the MOH.

This first reserve payment is associated with a specified clinical trial milestone and was provided after a data review process during which the MOH had access to material preclinical and clinical data for our LUNAR-COV19 vaccine candidate.

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Our Patent Portfolio

As of March 1, 2021, we are the sole owner of over 209 patents and pending patent applications including 33 U.S.

As of February 22, 2022, we own over 253 patents and pending patent applications including 38 U.S.

patents, 33 pending U.S.

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Our patent portfolio includes the following patents and pending patent applications for LUNAR, UNA and the use of LNA in certain RNA medicines:

LUNAR – As of March 1, 2021, we own 16 U.S.

LUNAR – As of February 28, 2022, we own 18 U.S.

patents, 8 U.S.

pending patent applications, 1 international patent application (“PCT”), 18 foreign granted patents, and 33 foreign pending patent applications covering the composition of matter, manufacture of lipid nanoparticles (including lyophilization), and use of our LUNAR technology for nucleic acid delivery and drug delivery.

UNA, mRNA and LNA – As of March 1, 2021, we own 147 U.S.

UNA, mRNA and LNA – As of February 28, 2022, we own 19 U.S.

patents, 10 U.S.

pending patent applications, 3 PCT applications, 57 foreign patents and 32 foreign pending patent applications covering methods and uses of LNA, UNA oligomer and mRNA therapeutics, and compositions of UNA oligomers or mRNA to treat specific target diseases.

STARR – In 2019, we began to develop our STARR platform which combines our proprietary LUNAR delivery systems with technologies that enable self-transcribing and self-replicating RNA.

pending patent applications, 3 PCT applications, 63 foreign patents and 26 foreign pending patent applications

covering methods and uses of LNA, UNA oligomer and mRNA therapeutics, and compositions of UNA oligomers or mRNA to treat specific target diseases.

STARR – In 2019, we began to develop our STARR platform which combines our proprietary LUNAR delivery systems with technologies that enable self-transcribing and self-amplifying RNA.

As noted above, our robust LUNAR portfolio of over 60 patents and patent applications, provides protection for delivery vehicles that can enable specific and effective delivery of STARR drug substances.

In particular, we own one pending U.S.

patent application directed to the manufacture of compositions that can comprise STARR RNA in a lipid delivery vehicle.

In addition, we have begun to develop our STARR patent portfolio, and as of March 1, 2021, we own one pending U.S.

patent application directed to specially designed RNA constructs, specific nucleotide and amino acid sequences, and lipid formulations comprising the same under the STARR technology.

We anticipate that patents covering these developments in our STARR platform will last until 2041, not including any patent term extensions.

In particular, we own two pending U.S.

nonprovisional patent applications and one pending PCT application directed to the manufacture of compositions that can comprise STARR RNA in a lipid delivery vehicle.

In addition, we have begun to develop our STARR patent portfolio, and as of February 28, 2022, we own one pending U.S.

provisional patent application, one pending U.S.

nonprovisional application, and one pending PCT application directed to specially designed RNA constructs, specific nucleotide and amino acid sequences, and lipid formulations comprising the same under the STARR technology.

We anticipate that further patents will be filed as we continue to innovate with respect to our STARR platform and that current applications covering these developments in our STARR platform, if granted, will last until 2041, not including any patent term extensions.

The term of individual patents depends on the countries in which they are obtained.

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Government authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products such as those we are developing.

Any product candidate that we develop must be approved by the FDA before it may be legally marketed in the United States and by the appropriate foreign regulatory agency before it may be legally marketed in foreign countries.

Any product candidate that we develop must be authorized or approved by the FDA before it may be legally marketed in the United States and by the appropriate foreign regulatory agency before it may be legally marketed in foreign countries.

Drug Development Process

In the United States, the development, manufacturing, and marketing of human drugs and vaccines are subject to extensive regulation.

The FDA regulates drugs under the Federal Food, Drug and Cosmetic Act (“FDCA”) and implementing regulations, and biological products, including vaccines, under provisions of the FDCA and the Public Health Service Act.

Drugs and vaccines are also subject to other federal, state and local statutes and regulations.

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performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as current good clinical practices (“GCPs”) to establish the safety and efficacy of the proposed drug for its intended use;

submission to the FDA of a new drug application (“NDA”) or biologics license application (“BLA”) for a new drug;

satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the drug is produced to assess compliance with the FDA’s current good manufacturing practice standards (“cGMP”), to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

submission to the FDA of a new drug application (“NDA”) or biologics license application (“BLA”) for a new drug or biologics;

satisfactory completion of FDA inspections of the manufacturing facility or facilities where the drug is produced to ensure compliance with the FDA’s current good manufacturing practice standards (“cGMP”), to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

potential FDA audit of the nonclinical and clinical trial sites that generated the data in support of the NDA or BLA;

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Before testing any compounds with potential therapeutic value in humans, the drug candidate enters the preclinical study stage.

Preclinical tests, also referred to as nonclinical studies, include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the drug candidate.

The conduct of the preclinical tests must comply with federal regulations and requirements including GLP.

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The FDA may also impose clinical holds on a drug candidate at any time before or during clinical trials due to safety concerns or non-compliance.

Accordingly, we

cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that suspend or terminate such trial.

Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that suspend or terminate such trial.

Clinical trials involve the administration of the drug candidate to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s direct control.

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An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits.

The IRB also approves the form and content of the informed consent that must be signed by each clinical trial subject or his or her legal representative and provide oversight for the clinical trial until completed.

The IRB also approves the form and content of the informed consent that must be signed by each clinical trial subject or his or her legal representative and provides oversight for the clinical trial until completed.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

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The results of product development, nonclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA or BLA requesting approval to market the product.

The submission of an NDA or BLA is subject to the payment of substantial user fees;

submission of an NDA or BLA is subject to the payment of substantial user fees;

a waiver of such fees may be obtained under certain limited circumstances.

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The NDA or BLA review and approval process is lengthy and difficult and the FDA may refuse to approve an NDA or BLA if the applicable regulatory criteria are not satisfied or may require additional clinical data or other data and information.

Even if such data and information is submitted, the FDA may ultimately decide that the NDA or BLA does not satisfy the criteria for approval.

Even if such data and information are submitted, the FDA may ultimately decide that the NDA or BLA does not satisfy the criteria for approval.

Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data.

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If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product.

Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling.

In addition, the FDA may require post marketing clinical trials, sometimes referred to as Phase 4

clinical trials, which are designed to further assess a product’s safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized.

Further, the FDA may require that certain contraindications, warnings or precautions be included in the

product labeling.

In addition, the FDA may require post marketing clinical trials, sometimes referred to as Phase 4 clinical trials, which are designed to further assess a product’s safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized.

Emergency Use Authorization (“EUA”)

The Commissioner of the FDA, under delegated authority from the Secretary of the U.S.

Department of Health and Human Services (“DHHS”) may, under certain circumstances, issue an EUA that would permit the use of an unapproved drug product or unapproved use of an approved drug product.

Before an EUA may be issued, the Secretary must declare an emergency based on one of the following grounds:

a determination by the Secretary of the Department of Homeland Security that there is a domestic emergency, or a significant potential for a domestic emergency, involving a heightened risk of attack with a specified biological, chemical, radiological, or nuclear agent or agents;

Department of Health and Human Services (“DHHS”) may, under certain circumstances, issue an authorization in the form of an EUA that would permit, for the duration of the declaration by the DHHS described below or until revocation of the EUA, the distribution and use of a drug or biological product that is not approved or licensed.

Before an EUA may be issued, the Secretary must make a declaration that circumstances exist to justify the authorization based on one of the following grounds:

a determination by the Secretary of the Department of Homeland Security that there is a domestic emergency, or a significant potential for a domestic emergency, involving a heightened risk of attack with a biological, chemical, radiological, or nuclear agent or agents;

a determination by the Secretary of the Department of Defense that there is a military emergency, or a significant potential for a military emergency, involving a heightened risk to U.S.

military forces of attack with a specified biological, chemical, radiological, or nuclear agent or agents;

a determination by the Secretary of the DHHS that a public health emergency that affects, or has the significant potential to affect, national security and that involves a specified biological, chemical, radiological, or nuclear agent or agents, or a specified disease or condition that may be attributable to such agent or agent.

military forces of attack with a specified biological, chemical, radiological, or nuclear agent or agents or other agent or agents that may cause, or are otherwise associated with, an imminently life-threatening and specific risk to U.S.

military forces;

a determination by the Secretary of the DHHS that there is a public health emergency, or significant potential for such, that affects, or has the significant potential to affect, national security or the health and security of U.S.

citizens living abroad, and that involves a biological, chemical, radiological, or nuclear agent or agents, or a disease or condition that may be attributable to such agent or agent;

the identification of a material threat pursuant to Section 319F-2 of the Public Health Service Act, authorizing the creation of the Strategic National Stockpile and security countermeasure procurements, sufficient to affect the national security or the health and security of United States citizens living abroad.

In order to be the subject of an EUA, the FDA Commissioner must conclude that, based on the totality of scientific evidence available, it is reasonable to believe that the product may be effective in diagnosing, treating or preventing a disease attributable to the agents described above, that the product’s potential benefits outweigh its potential risks and that there is no adequate approved alternative to the product.

Although an EUA cannot be issued until after an emergency has been declared by the Secretary of DHHS, the FDA strongly encourages an entity with a possible candidate product, particularly one at an advanced stage of development, to contact the FDA center responsible for the candidate product before a determination of actual or potential emergency.

Such an entity may submit a request for consideration that includes data to demonstrate that, based on the totality of scientific evidence available, it is reasonable to believe that the product may be effective in diagnosing, treating, or preventing the serious or life-threatening disease or condition.

This is called a pre-EUA submission and its purpose is to allow FDA review considering that during an emergency, the time available for the submission and review of an EUA request may be severely limited.

The FDA has issued EUAs to companies for products intended for the prevention and treatment of COVID-19.

The FDA expects EUA holders to work toward submission of an NDA, BLA, or other applicable approval.

In addition to the United States, other countries such as UK and Vietnam have a similar mechanism to facilitate the availability and use of medical countermeasures, including vaccines, during public health emergencies.

Post-approval requirements

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Following approval, the FDA continues to monitor vaccine quality through real-time monitoring of lots by requiring manufacturers to submit certain information for each vaccine lot.

Vaccine manufacturers may only distribute a lot following release by the FDA.

Vaccine manufacturers may only distribute a lot

following release by the FDA.

Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws.

Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain cGMP compliance.

Discovery of problems with a product after approval may result in

restrictions on a product, manufacturer, or holder of an approved NDA or BLA, including withdrawal of the product from the market.

In addition, changes to the manufacturing process generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.

Discovery of problems with a product after approval may result in restrictions on a product, manufacturer, or holder of an approved NDA or BLA, including withdrawal of the product from the market.

In addition, changes to the manufacturing process require notice to or prior approval from the FDA before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.

Regulation in Europe and Other Regions

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Certain countries outside of the United States have a similar process that requires the submission of a clinical trial application much like the IND prior to the commencement of human clinical trials.

In the European Union, for example, a CTA must be submitted to each country’s national health authority and an independent ethics committee, much like the FDA and IRB, respectively.

Once the CTA is approved in accordance with a country’s requirements, clinical trial development may proceed.

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Below we have included what we believe to be the competitive landscape for certain of the medicines that we currently have in development.

ARCT-021 (LUNAR-COV19 Vaccine)

We consider the following medicines as competitors or future competitors to ARCT-021.

Drug Description

Administration/Dosing

Number of Doses

Comirnaty (BNT162b2)

Pfizer, BioNTech, Fosun Pharma

mRNA-based Vaccine

Phase 3 and EUA

mRNA-based Vaccine

Phase 3 and EUA

Covishield (AZD1222)

Non-replicating Chimpanzee Adenovirus vaccine

Phase 3 and EUA

JNJ-78436735 or Ad26.COV2.S

Non-replicating Adenoviral vector-Ad26

Sputnik V (Gam-COVID-Vac)

Russian (Gamaleya National Research Centre for Epidemiology and Microbiology)

Heterologous non-replicating adeno viral vectors Ad26 prime/Ad5 boost

Phase 3 and EU

Inactivated vaccine (formalin with alum adjuvant)

Approved in China, Phase 3, EUA

Recombinant nanoparticle technology

(1) Comirnaty (Pfizer, BioNTech, Fosun Pharma) is a two-dose regimen at 30 µg per dose.

mRNA-1273 (Moderna) is a two-dose regimen at 100 µg per dose.

In our current Phase 2 trial for ARCT-021, we are exploring the following doses and regimens:

5 µg ARCT-021, two dose regimen and 7.5 µg ARCT-021, as one- and two-dose regimens.

Despite the receipt of emergency use approval (EUA) by several of our competitors for their COVID-19 vaccine, we believe there are significant commercial opportunities globally.

ARCT-810 (LUNAR-OTC)

We consider the following medicines as competitors or future competitors to ARCT-810.

Drug Description

Administration/Dosing

Ultragenyx Pharmaceuticals

OTC gene in AAV8 vector

IV, single dose

Vaccine Franchise

LUNAR-COV19 Vaccines (ARCT-021, ARCT-154, ARCT-165)

Our vaccine franchise is based on our self-amplifying and self-replicating STARR® technology platform and our lipid nanoparticle delivery platform called LUNAR ® .

This franchise has advanced into late stage clinical development including ARCT-154 in Phase 3 clinical development and ARCT-165 and ARCT-021 in phase 2 clinical development.

We consider the following companies with approved or late stage clinical development vaccines as some of our competitors or future competitors to Arcturus’ COVID-19 vaccine franchise:

Pfizer, BioNTech, Moderna, Janssen, AstraZeneca, Novavax, Sinovac and the Russian Gamaleya National Research Centre for Epidemiology and Microbiology.

Dozens of other companies are also developing COVID-19 vaccines.

These companies generally use conventional mRNA (not self-amplifying) and egg-based vaccine technology as the basis for their COVID-19 vaccines, and we are not aware of any saRNA COVID-19 pipeline that has advanced in clinical studies as far as ours.

LUNAR-FLU Vaccine

We consider the following companies as some of the competitors or future competitors to LUNAR-Flu:

Pfizer, BioNTech, Moderna, Sanofi, and Seqirus.

The flu industry is shifting to using mRNA based platforms in addition to traditional (egg-based) technologies.

Liver Franchise ARCT-810 (LUNAR-OTC)

Our liver franchise has advanced into mid-stage clinical development with ARCT-810 in phase 2 clincial development.

Potential competitors include, but are not limited to, Ultragenyx which is advancing a gene therapy program for OTC in clinical development.

Lung Franchise:

ARCT-032 (LUNAR-CF)

We consider the following medicines as competitors or future competitors to ARCT-032.

Drug Description

Administration/Dosing

Translate Bio

CFTR-encoded mRNA

Weekly or daily inhalation

Eloxx Pharmaceuticals

Readthrough agent for premature stop codons

Phase 2, G542X mutation

The lead candidate of our lung franchise is ARCT-032, which is an mRNA therapeutic candidate for cystic fibrosis based on our proprietary drug substance mRNA technology platform and our LUNAR lipid nanoparticle delivery platform.

We are aware of product candidates of the following companies that we consider as competitors or future competitors to ARCT-032:

Translate Bio, Eloxx Pharmaceuticals, Recode, 4DMT and Splisense.

As of December 31, 2021, we had 177 employees, all of which were full-time.

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