Key Takeaways From Arcturus Therapeutics’ Management Presentation Today

Like so many things these days, the latest LD Micro conference has gone virtual.  Chris Lahiji and his team at LD put on the most informative and useful conference several times a year in Los Angeles, and now all sessions are open to all investors.  Sometimes a microcap idea works and the company graduates from that status, and Arcturus Therapeutics is certainly in that category.  Based on excitement over its Covid-19 vaccine candidate, LUNAR-COV19 (also known as ARCT-021,) Arcturus today sports a market capitalization of an even $1 billion.  Even after a recent pullback, the shares have risen more than 300% this year.  

So, now it’s time to execute.  

Arcturus CEO Joe Payne described Arcturus’ current status at his presentation at LD today.  I started on Wall Street so long ago that I remember a mentor used to earn plaudits (and client votes) by faxing handwritten notes from company meetings.  Technology has advanced slightly since then, but here are the key points from Mr. Payne’s virtual presentation this afternoon.  These are my takeaways from the presentation; the official version is here.  My firm, Excelsior Capital Partners, owns Arcturus shares.  

The key differentiator for Arcturus is its drug development delivery platform, trademarked as STARR (Self-Transcribing and Replicating RNA) and its delivery system, LUNAR (Lipid-enabled and Unlocked Nucleomonomer agent).  That platform is being tested on several diseases including Cystic Fibrosis and OTC deficiency, but obviously the interest (and all the investor-submitted questions for today’s presentation) dealt with Arcturus’ Covid-19 vaccine candidate, LUNAR-COV19

So, Mr. Payne noted:

The trials of ARCT-021 with Duke-NUS hospital in Singapore (Phase 1/2) are undergoing.  Healthy volunteers are being subjected to dose escalation and dose expansion, and the data will be collected in the coming weeks. Mr. Payne still expects that data to be shared with the market in the fourth quarter.  

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Arcturus has also signed a supply agreement  for ARCT-021 with the Israeli Ministry of Health.  

Mr. Payne was asked to contrast Arcturus’s ARCT-021 with Moderna’s Covid-19 vaccine candidate,  MRNA-1273, and he was quite happy to do so.  ARCT-021 has been administered in much lower dose than MRNA-1273—between 1 and 10 micrograms versus 100 micrograms for MRNA-1273—and, in a key differentiator, Arcturus’ candidate is given in single-shots, while MRNA-1273 requires two doses.  

Also, Mr. Payne noted that ARCT-021 is delivered in a lyophilized manner, so it is essentially packaged freeze-dried and does not require the super-cooling that other Covid-19 vaccines will.  

Thus, according to Mr. Payne, ARCT-021 can represent a better value proposition for government buyers.  Only a single doing is needed and without super-cooling, so ARCT-021 might fit global treasury budgets better than other alternative treatments.  Governments would seem to be the main demand for any Covid-19 vaccine.

Mr. Payne noted that ARCT-021 has produced very robust seroconversion in animals.  He noted encouraging test results in mice, rabbits and pigs and mentioned that Arcturus will publish those results in a top-tier scientific publication “soon.”

So, is this the winner?  Of course no one could possibly tell that with any certainty today, but Mr. Payne added his insight.  Off the ~250 vaccine candidates being tracked by the WHO, Mr. Payne noted that about 10 should be considered “front-runners’ including, of course, ARCT-021.

He is very proud of the high titers of neutralizing antibodies, as well as t-cell production, by ARCT-021 in early trials with a dosage of only 2 micrograms.  Titer counts also increased consistently over a 60-day period, which Mr. Payne attributed to the self-replicating nature of Arcturus’ STARR mRNA technology.

So, as I mentioned in this Forbes article, Arcturus is in the game.  The company has raised $280 million in two separate public offerings this year, and clearly has the financial resources necessary to produce a Covid-19 vaccine.  

The company is partnered with production giant Catalent CTLT .  Mass-manufacturing at Catalent’s facility in Madison, Wisconsin, could presumably begin after Phase 3 trials of LUNAR-COV19 are completed.  First we have to results from the Phase 1/2 testing that is currently underway in Singapore.  Obviously, though, the pace and urgency of the development of a vaccine for Covid-19 is like nothing ever seen before.  In addition to Moderna, Catalent has also readied production capacity for Johnson & Johnson JNJ and AstraZeneca among others along with its dedicated capacity for Arcturus.  

This disease has produced a global political reaction that is truly unprecedented, but in terms of the race for a Covid-19 vaccine, refreshingly, it’s all about the science now.  So, I will continue to hold ARCT shares for my firm and continue to await results from clinical trials of ARCT-021.

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