Arcturus Therapeutics Holdings Inc. Annual Report Summary (Fiscal Year Ended December 31, 2025)

Business Overview

Arcturus Therapeutics is a cutting-edge biotechnology company focused on developing new medicines. We leverage our unique STARR® mRNA technology, which uses self-amplifying messenger RNA to produce more therapeutic protein from smaller doses, and our LUNAR® lipid delivery system, which ensures these medicines reach their targets effectively.

In fiscal year 2025, Arcturus significantly advanced its pipeline of potential new drugs. Lead therapeutic candidates include:

• ARCT-810: An mRNA therapy candidate for Ornithine Transcarbamylase (OTC) Deficiency, which progressed into Phase 2 clinical trials.
• ARCT-032: An inhaled mRNA therapy candidate targeting Cystic Fibrosis (CF), which advanced through Phase 1b clinical trials.

We also strengthened our infectious disease programs through a multi-year partnership with CSL Seqirus. This collaboration focuses on developing next-generation mRNA vaccines for LUNAR-COV19 (COVID-19) and LUNAR-FLU (influenza). Furthermore, Arcturus explores its technology's potential to improve existing products, such as KOSTAIVE®, and maintains ongoing agreements with government entities like the Biomedical Advanced Research and Development Authority (BARDA) and the Department of Defense.

Financial Performance

Arcturus's financial results for fiscal year 2025 reflect significant investment in its future. We reported total revenue of $75 million, primarily from collaboration agreements, including initial payments and achieving development milestones. The company recorded a net loss of $180 million, driven by substantial investment in research and development (R&D). R&D expenses totaled $150 million, while general and administrative expenses were approximately $40 million. Our financial path typically involves significant R&D spending and revenue growth tied to collaboration milestones. As of December 31, 2025, Arcturus's market capitalization was approximately $323.5 million, with about 28.4 million shares of voting common stock outstanding as of February 27, 2026.

Risk Factors

Investing in Arcturus, like any clinical-stage biotechnology company, involves substantial risks. Investors should carefully consider the following key factors:

• Clinical Trial Failure: Our primary risk is that pipeline candidates (e.g., ARCT-810, ARCT-032) may fail to show sufficient safety or efficacy in clinical trials, or may not meet regulatory endpoints, leading to delays or discontinuation.
• Regulatory Approval Uncertainty: Securing regulatory approval from agencies like the FDA or EMA is a long, complex, and uncertain process. Delays, rejections, or unexpected requirements could severely impact commercialization timelines.
• Partnership Dependence & Termination: We rely heavily on collaborations for funding and development. Disagreements with partners (e.g., CSL Seqirus) or the termination of government contracts (e.g., BARDA, DoD) could significantly disrupt our financial stability and pipeline progress.
• Intense Competition: The mRNA and rare disease therapeutic spaces are highly competitive. Competitors, including larger pharmaceutical companies, may develop superior or more cost-effective treatments, or achieve market entry sooner.
• Intellectual Property (IP) Protection: Our success depends on protecting our STARR® mRNA and LUNAR® delivery technologies through patents. Challenges to our intellectual property or our inability to secure new patents could allow competitors to replicate our innovations.
• Manufacturing & Supply Chain Issues: Scaling up manufacturing for clinical trials and commercialization presents complex challenges. We rely on third-party contract manufacturing organizations (CMOs), which introduces risks related to quality control, capacity, and supply chain disruptions.
• Financing Risk: Given our current net losses, we may need to raise additional capital in the future, potentially through equity offerings that could dilute existing shareholders.

Management Discussion (MD&A highlights)

In fiscal year 2025, we achieved significant operational milestones while also navigating ongoing challenges.

Major Wins:

• Significant Pipeline Advancement: We successfully advanced ARCT-810 into Phase 2 and ARCT-032 through Phase 1b, achieving crucial clinical milestones.
• Strengthened Strategic Partnerships: Our expanded collaboration with CSL Seqirus provides substantial non-dilutive funding, shares development costs, and leverages CSL's global commercialization expertise.
• Continued Government Funding: We secured additional funding tranches from BARDA and the Department of Defense, validating our technology's potential.
• Technology Validation: Positive early clinical trial data further validates the potential of our STARR® mRNA and LUNAR® delivery platforms.

Challenges Faced:

• High Burn Rate: Our significant net loss and R&D spending underscore the substantial capital needed to advance multiple drug candidates, requiring careful cash management and potential future fundraising.
• Reliance on Collaborations: While beneficial, a significant portion of our revenue and development funding comes from collaboration agreements, some of which partners can terminate "for convenience," posing a risk.
• Clinical Trial Execution Risks: Delays in patient enrollment, unexpected safety signals, or insufficient efficacy data could significantly impact timelines and investor confidence.
• Regulatory Compliance: Maintaining strict compliance with complex regulatory requirements for clinical trials and manufacturing demands significant resources.

Leadership and Strategy: The 2025 annual report showed no major changes in our executive leadership team or a significant shift in our core strategic direction. We remain focused on advancing our proprietary mRNA technology platform and pipeline candidates.

Market Trends and Regulatory Environment: Our operations are heavily influenced by the evolving regulatory landscape for novel genetic medicines and vaccines. The post-COVID era has boosted acceptance and investment in mRNA technology, potentially streamlining regulatory pathways for infectious disease programs. However, the regulatory bar for rare disease therapies remains high. Broader market trends, such as increasing demand for personalized medicine and next-generation vaccines, present opportunities. Conversely, shifts in healthcare policy, drug pricing pressures, or increased scrutiny of novel technologies could impact our commercial prospects.

Financial Health

As of December 31, 2025, Arcturus reported $220 million in cash, cash equivalents, and marketable securities. This provides operational liquidity, but given our significant R&D expenditures, cash burn remains a key metric for investors to monitor. We had minimal long-term debt of $10 million, indicating a relatively healthy balance sheet with low leverage. As an "accelerated filer," Arcturus is subject to more stringent reporting requirements and shorter deadlines for SEC filings. Our ability to secure upfront and milestone payments from collaborations is crucial for maintaining liquidity and funding ongoing operations without excessive reliance on equity financing.

Future Outlook

Looking ahead, Arcturus has a clear strategic roadmap focused on these key priorities:

• Advance Key Clinical Programs: We will primarily focus on successfully completing Phase 2 trials for ARCT-810 and initiating Phase 2/3 studies for ARCT-032, aiming for pivotal data.
• Expand Infectious Disease Pipeline: Leverage the CSL Seqirus partnership to advance LUNAR-COV19 and LUNAR-FLU vaccine candidates.
• Regulatory Milestones: Prepare for and conduct regulatory interactions, such as pre-IND and end-of-Phase 2 meetings, to define clear paths to approval.
• Platform Expansion: Explore new therapeutic areas and indications where our STARR® mRNA and LUNAR® technologies can address unmet medical needs.
• Talent Acquisition & Retention: Attract and retain top scientific, clinical, and management professionals.
• Financial Prudence: Manage cash burn effectively while strategically investing in R&D and exploring non-dilutive funding opportunities.

This outlined strategic roadmap serves as our operational guidance for advancing our pipeline and platform.

Competitive Position

Arcturus navigates a highly dynamic and competitive landscape, especially within the mRNA therapeutic and vaccine sectors. Our key differentiators are our STARR® self-amplifying mRNA technology and our LUNAR® lipid nanoparticle delivery system. We compete with established pharmaceutical companies and other biotech firms developing mRNA-based therapies (e.g., Moderna, BioNTech, CureVac), as well as those using traditional vaccine technologies. Our success will depend on demonstrating superior efficacy, safety, and manufacturing advantages for our specific product candidates, particularly for rare diseases like OTC Deficiency and Cystic Fibrosis, where unmet needs are high.