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Arcturus Therapeutics Holdings Inc. (ARCT)·Q3 2019 Earnings Summary

Executive Summary

  • Q3 2019 results reflected a return to normalized collaboration revenue ($3.32M) after a non-recurring Q2 spike, with net loss widening sequentially to ($7.43M) and diluted EPS of ($0.56) as operating spend remained elevated to advance OTC and CF programs .
  • Management reaffirmed ARCT‑810 (OTC) IND timing for Q1 2020 and disclosed completion of GMP drug product and initiation of IND‑enabling tox; the platform expanded with STARR self‑replicating RNA for vaccines .
  • Liquidity strengthened: cash rose to $74.2M at quarter‑end and ~$7M was received post‑quarter (bank facility increase + insurance) supporting runway “through at least the first quarter of 2021”; equity financings in Aug/Sep added ~$23M and ~$9.8M respectively at $11.50/share .
  • Consensus estimates for Q3 2019 from S&P Global were unavailable, limiting beat/miss assessment; management provided no quantitative revenue/EPS guidance .

What Went Well and What Went Wrong

  • What Went Well

    • ARCT‑810 progressed to Q1 2020 IND timing with completed GMP batch and IND‑enabling tox initiated; “our flagship program, ARCT‑810, remains on track… plan to file an IND application during the first quarter of 2020,” said CEO Joseph Payne .
    • Platform expansion: introduction of STARR self‑replicating RNA for human/animal vaccines broadened pipeline optionality .
    • Balance sheet: Q3 cash of $74.2M plus ~$7.0M post‑quarter receipts extended runway to at least Q1 2021; additional equity raises ($23M on Aug 1/2 and $9.8M on Sep 26/30) further reinforced capital position .

  • What Went Wrong

    • Sequential reset in collaboration revenue to $3.32M (from $10.15M in Q2, which included ~$7M non‑recurring) pressured P&L; net loss widened to ($7.43M) and loss from operations to ($7.62M) as R&D remained high .
    • Operating expenses increased year‑over‑year (Q3 2019: $10.93M vs $7.78M in Q3 2018), reflecting higher R&D to advance programs and corporate build‑out .
    • Lack of external transcript/disclosures from the Q3 earnings call limited visibility into near‑term revenue cadence and milestone timing beyond program updates .

Financial Results

MetricQ3 2018Q2 2019Q3 2019Q3 2019 Consensus (S&P Global)
Collaboration Revenue ($USD Millions)$3.423 $10.153 $3.318 Unavailable
Total Operating Expenses ($USD Millions)$7.779 $10.725 $10.934 Unavailable
Operating Income (Loss) ($USD Millions)($4.356) ($0.572) ($7.616) Unavailable
Net Loss ($USD Millions)($4.253) ($0.685) ($7.433) Unavailable
Diluted EPS ($)($0.42) ($0.07) ($0.56) Unavailable
Net Income Margin %(124.2%) (6.8%) (224.1%) Unavailable

Notes: S&P Global consensus estimates were not retrievable for Q3 2019; therefore, beat/miss analysis cannot be provided .

KPIs and Operating Detail

KPIQ3 2018Q2 2019Q3 2019
R&D Expense ($USD Millions)$3.969 $7.269 $7.053
G&A Expense ($USD Millions)$3.810 $3.456 $3.881
Cash and Cash Equivalents ($USD Millions)$36.709 (12/31/2018) $55.840 (6/30/2019) $74.172 (9/30/2019)
Deferred Revenue – Current ($USD Millions)$6.272 (12/31/2018) $9.730 (6/30/2019) $10.999 (9/30/2019)
Deferred Revenue – Non‑Current ($USD Millions)$7.534 (12/31/2018) $17.652 (6/30/2019) $14.551 (9/30/2019)

Segment breakdown: not applicable (single collaboration revenue line; no segment reporting) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Cash RunwayCorporate Liquidity“Sufficient to support operations through end of FY 2020” (post‑Q2 funding adds) “Adequate funding to support programs through at least Q1 2021” (incl. ~$7M post‑quarter) Raised runway (extended)
ARCT‑810 (OTC) IND FilingIND TimingQ1 2020 target (June 2019 corporate deck) On track to file IND in Q1 2020 Maintained
LUNAR‑CF IND FilingIND TimingH2 2020 target (CFF amended agreement press release) IND filing target 2021 (Nov 2019 deck) Lowered (timing pushed)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2 and Q‑1)Current Period (Q3 2019)Trend
R&D execution (OTC)Orphan Drug Designation for ARCT‑810; Q1 2020 IND target reaffirmed (June deck; Q2 PR) GMP batch completed; IND‑enabling tox initiated; Q1 2020 IND reiterated Positive momentum
CF program funding & timelineCFF commitment increased to $15M; IND H2 2020 (Aug 1 PR) Platform expanded; later Nov deck indicates CF IND moved to 2021 Timing slippage
Platform expansion (STARR)RNA programs highlighted in June deck STARR self‑replicating RNA added to enable vaccines Strategic broaden
Capital strategyUltragenyx investment; registered directs outlined in Q2 PR $23M (Aug 1/2) and $9.8M (Sep 26/30) offerings at $11.50/share Strengthened liquidity
Corporate governance—Board expansion: appointment of Dr. Holmes; re‑appointment of CFO Andy Sassine to Board Deepened expertise

Management Commentary

  • “We continue to develop our LUNAR® delivery and mRNA technology platforms… plan to file an IND application during the first quarter of 2020,” said Joseph Payne, President & CEO; “Earlier this morning, we announced the expansion of our technology platform to include self‑replicating RNA (STARR technology) … successfully raised significant capital … to fund our operations into 2021” .
  • Q2 perspective: “We are pleased with the progress… Ultragenyx became our largest shareholder… Cystic Fibrosis Foundation increased its financial support,” said Joseph Payne .
  • Board Chair perspective: “We are honored to have Dr. Edward Holmes join our Board… leveraging his experience as we establish Arcturus as a leading RNA medicines company,” said Dr. Peter Farrell .

Q&A Highlights

  • The Q3 2019 earnings call transcript was not available in the document set; no Q&A highlights or clarifications can be provided beyond the press release disclosures .

Estimates Context

  • S&P Global consensus estimates for Q3 2019 (revenue, EPS) were unavailable via our data interface; accordingly, we cannot provide a beat/miss assessment relative to Street expectations .
  • Management did not issue quantitative guidance for revenue/EPS; modeling likely hinges on collaboration timing and deferred revenue recognition cadence disclosed in the financial statements .

Key Takeaways for Investors

  • Near‑term catalyst: ARCT‑810 IND filing in Q1 2020, supported by completed GMP lot and IND‑enabling tox; clinical initiation should sharpen program valuation and timelines .
  • Liquidity and runway improved (cash $74.2M at 9/30/19, plus ~$7M post‑quarter; equity raises of ~$32.1M in Aug/Sep) supporting platform build and early clinical spend into at least Q1 2021 .
  • Platform optionality expanded with STARR (self‑replicating RNA) enabling vaccine applications; watch for partnering/milestones to monetize vaccine opportunities .
  • CF program timeline extended (to 2021 IND per Nov deck), reducing near‑term CF catalyst intensity; funding support from CFF mitigates timeline shift .
  • Revenue volatility expected given collaboration mix (Q3 normalization to $3.32M from Q2’s non‑recurring uplift); focus on deferred revenue balances and alliance milestones to gauge near‑term topline .
  • With no Street consensus available, trading likely anchors to program milestones (OTC IND, CF IND timing) and capital updates; limited guidance increases sensitivity to news flow .
S&P Global consensus estimates for Q3 2019 were not retrievable; no beat/miss analysis is provided.

Sources: Q3 2019 earnings 8‑K and Exhibit 99.1 press release and financial statements ; Q2 2019 earnings 8‑K and press release ; Aug 1/2 registered direct offerings ; Sep 26/30 registered direct offering ; CF Foundation commitment ; Board appointments ; Corporate decks (Jun/Nov 2019) .