Arcturus Therapeutics Holdings Inc. (ARCT)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following is a discussion of the financial condition and results of operations of Arcturus Therapeutics Holdings Inc. for the three and six months ended June 30, 2026. Unless otherwise specified herein, references to the “Company,” “Arcturus,” “we,” “our” and “us” mean Arcturus Therapeutics Holdings Inc. and its consolidated subsidiaries. You should read the following discussion and analysis together with the interim condensed consolidated financial statements and related notes included elsewhere herein. For additional information relating to our management’s discussion and analysis of financial conditions and results of operations, please see our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”), which was filed with the U.S. Securities and Exchange Commission (the “Commission”) on March 3, 2026. Unless otherwise defined herein, capitalized words and expressions used herein shall have the same meanings ascribed to them in the 2025 Annual Report.

This report includes forward-looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those currently anticipated and expressed or implied by such forward-looking statements. This report also includes certain statements based solely on information, reports and studies provided by or conducted by Seqirus, Inc. and Meiji Holdings Co., Ltd or their respective affiliates.

You should read this report and the documents that we reference in this report and have filed as exhibits to this report completely and with the understanding that our actual future results may be materially different from what we expect. You should also review the factors and risks we describe in the reports we will file or submit from time to time with the Commission after the date of this report.

Overview

We are a messenger RNA medicines company focused on the development of liver and respiratory rare disease therapeutics. We have ongoing Phase 2 clinical studies for our RNA therapeutic candidates to potentially treat ornithine transcarbamylase (OTC) deficiency and cystic fibrosis (CF).

We developed the world’s first approved self-amplifying messenger RNA (sa-mRNA) vaccine, KOSTAIVE® (“KOSTAIVE”). KOSTAIVE has achieved approval in Japan, the European Union and the United Kingdom as a vaccine against COVID-19, and sales of KOSTAIVE began in Japan in October 2024.

We have several key platform technologies that we leverage to develop and advance a pipeline of mRNA-based therapeutics for rare genetic disorders with significant unmet medical needs and vaccines for infectious diseases. Current mRNA medicines have two critical components: the messenger RNA (“mRNA”) constructs and the lipid nanoparticles (“LNP”) which help deliver the mRNA to disease-relevant target tissues. We have extensive expertise in the design and optimization of mRNA constructs, including with respect to a type of mRNA technology known as self-amplifying mRNA (sa-mRNA). Our proprietary self-amplifying mRNA technology platform, or STARR® (“STARR”), has been demonstrated to induce a robust, longer-lasting and broader humoral immune response at lower dose levels than conventional mRNA-based vaccines. Our proprietary LNP delivery system, LUNAR® (“LUNAR”), is intended to address the major hurdle in RNA drug development, namely the effective and safe delivery of RNA to disease-relevant target tissues. LUNAR may enable multiple nucleic acid medicines. We also have significant expertise and valuable know-how in the development and scalability of complex and robust manufacturing processes required to deliver the next generation of nucleic acid medicines.

Our internal pipeline includes RNA therapeutic candidates to potentially treat ornithine transcarbamylase (OTC) deficiency and cystic fibrosis (CF), both rare diseases. In our vaccine program, following termination of the CSL Collaboration Agreement, we regained strategic control of KOSTAIVE® and our broader vaccine portfolio, subject to ongoing arrangements with Meiji in Japan for the Northern Hemisphere 2026-2027 season.

Business Updates

Key Updates on Arcturus-Owned mRNA Therapeutic Development Candidates

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LUNAR-CF/ARCT-032. LUNAR-CF (ARCT-032) is our mRNA therapeutic candidate for CF and it continues to progress in the clinic.

The ongoing Phase 2 clinical trial (NCT06747858) is an open-label, multiple ascending dose study to assess safety and efficacy of ARCT-032 in CF adults who do not benefit from current CFTR modulators, including those with Class I null mutations. The study initiated dosing in the U.S. in December 2024 and enrollment and dosing have completed for the initial three cohorts. Each participant received daily inhaled treatments of ARCT-032 at doses of 5 mg, 10 mg, or 15 mg for 28 days.

The treatment was generally safe and well tolerated. Bronchospasm was not reported in these participants, either with or without pretreatment with a bronchodilator. Treatment-related AEs that were identified in the single-dose Phase 1 study were also observed in some participants for the first few doses but ceased with continued dosing. Two subjects experienced SAEs after the dosing period that were unrelated to ARCT-032, and the safety review committee approved the study to proceed. After amending the protocol, a fourth cohort of up to 20 subjects began enrolling in March 2026 and continues to advance with active screening and enrollment in the United States and Israel. The fourth cohort was initiated with 10 mg administered once daily via inhalation over a 12-week period to better assess longer term safety, tolerability and early evidence of clinical efficacy.

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LUNAR-OTC/ARCT-810. The LUNAR-OTC development program addresses ornithine transcarbamylase (OTC) deficiency, a rare, life-threatening, genetic disease caused by mutations in the OTC gene that lead to dysfunctional or deficient OTC.

We have completed enrollment in the open-label multiple ascending dose Phase 2 study of ARCT-810 and all enrolled subjects have completed study drug dosing. The study evaluates safety and pharmacodynamics in adult and adolescent patients requiring clinical management for OTC deficiency. We continue to evaluate supplementary data to inform regulatory discussions and preparation for an End-of-Phase 2 meeting regarding the potential path forward across adult and pediatric development.

Thermo Fisher Agreement

On June 26, 2026, we entered into a series of agreements with Thermo Fisher Scientific Inc. (“Thermo Fisher”) and certain of Thermo Fisher’s affiliates to establish a strategic collaboration for the provision of contract development and manufacturing organization (“CDMO”) and contract research organization (“CRO”) services in connection with the development of ARCT-032, our investigational mRNA therapeutic for cystic fibrosis (“CF”). The collaboration is structured through (i) a Master Services Agreement (the “Thermo Fisher MSA”) between Thermo Fisher and Arcturus and (ii) a Project Addendum for Development Services between Patheon UK Limited, a Thermo Fisher affiliate (“Patheon”), and Arcturus (the “Project Agreement”).

Master Services Agreement

The Thermo Fisher MSA establishes the framework under which Thermo Fisher and its affiliates will provide CRO and CDMO services to Arcturus from time to time pursuant to the Project Agreement and any additional individual project addendums. CRO services will be provided through PPD, Inc., Thermo Fisher’s affiliated contract research organization (“PPD”), and CDMO services will be provided through Thermo Fisher’s Pharma Services division. Under the Thermo Fisher MSA, Thermo Fisher will contribute up to $40 million of clinical manufacturing services for ARCT-032, and Arcturus will engage PPD for up to $40 million in CRO services. Upon regulatory approval of ARCT-032, Thermo Fisher would receive exclusive commercial manufacturing rights for the product for a specified duration, on terms to be set forth in a definitive commercial supply agreement to be negotiated in good faith by the parties. Arcturus may engage an alternative manufacturer only if Thermo Fisher is unable to supply, limited solely to the quantities and duration necessary to address the supply shortfall. The Thermo Fisher MSA has an initial term of five years from the effective date and automatically renews for successive one-year periods unless either party provides at least 90 days’ prior written notice of non-renewal.

Project Agreement

Under the Project Agreement, the services to be provided include technical transfer, engineering batches, manufacture of clinical trial materials, manufacture of process performance qualification batches, open-label extension batches, drug product fill and finish, product release, and stability studies. The Project Agreement remains in effect from its effective date until the completion of all services or earlier termination under the Thermo Fisher MSA.

Termination of Vaccine Collaboration with CSL Seqirus

On August 3, 2026, the Company entered into the Termination Agreement with CSL Seqirus pursuant to which the Company and CSL Seqirus mutually terminated the CSL Collaboration Agreement, effective as of such date. Under the Termination Agreement, the Company received a one-time cash payment of $12.0 million from CSL Seqirus. In addition, the Company was released from a liability and from repayment of an R&D credit with an aggregate value of approximately $16.0 million.

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

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expected to end on or around June 30, 2027. Beginning with the Northern Hemisphere 2027–2028 season, the Company expects to work directly with Meiji for KOSTAIVE® activities in Japan.

We are obligated to pay CSL Seqirus single-digit royalties and revenue-sharing payments on our future commercialization of vaccine products formerly licensed under the CSL Collaboration Agreement and successor products, where certain CSL Seqirus intellectual property is incorporated into such products, subject to agreed terms and conditions and applicable time limitations. With respect to certain of the vaccine products, we are obligated to pay a percentage of upfront payments received from future licensees up to pre-agreed amounts.

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

KOSTAIVE® for Japan

Meiji launched in Japan the two-dose vial of KOSTAIVE updated for the JN.1 variant XEC in August 2025. In June 2026, Meiji filed a Partial Change Application for KOSTAIVE updated for the NB.1.8.1 variant in a two-dose vial with Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) to support commercialization for the 2026-2027 season in Japan.

Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Report and our audited financial statements and related notes for the year ended December 31, 2025. Our historical results of operations and the year-to-year comparisons of our results of operations that follow are not necessarily indicative of future results.

Revenue

We enter into arrangements with pharmaceutical and biotechnolog

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis together with the consolidated financial statements and related notes included elsewhere herein.

This report includes forward-looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those currently anticipated and expressed or implied by such forward-looking statements.

Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found within Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024.

Overview

We are a messenger RNA medicines company focused on the development of liver and respiratory rare disease therapeutics. We have ongoing Phase 2 clinical studies for our RNA therapeutic candidates to potentially treat ornithine transcarbamylase (OTC) deficiency and cystic fibrosis (CF).

We developed the world’s first approved self-amplifying messenger RNA (sa-mRNA) vaccine, KOSTAIVE® (“KOSTAIVE”), which we have partnered with Seqirus, Inc. (“CSL Seqirus”), a part of CSL Limited. KOSTAIVE has achieved approval in Japan, the European Union and the United Kingdom as a vaccine against COVID-19, and sales of KOSTAIVE began in Japan in October 2024.

We have several key platform technologies that we leverage to develop and advance a pipeline of mRNA-based therapeutics for rare genetic disorders with significant unmet medical needs and vaccines for infectious diseases. Current mRNA medicines have two critical components: the messenger RNA (“mRNA”) constructs and the lipid nanoparticles (“LNP”) which help deliver the mRNA to disease-relevant target tissues. We have extensive expertise in the design and optimization of mRNA constructs, including with respect to a type of mRNA technology known as self-amplifying mRNA (sa-mRNA). Our proprietary self-amplifying mRNA technology platform, or STARR® (“STARR”), has been demonstrated to induce a robust, longer-lasting and broader humoral immune response at lower dose levels than conventional mRNA-based vaccines. Our proprietary LNP delivery system, LUNAR® (“LUNAR”), is intended to address the major hurdle in RNA drug development, namely the effective and safe delivery of RNA to disease-relevant target tissues. LUNAR may enable multiple nucleic acid medicines. We also have significant expertise and valuable know-how in the development and scalability of complex and robust manufacturing processes required to deliver the next generation of nucleic acid medicines.

Our internal pipeline includes RNA therapeutic candidates to potentially treat ornithine transcarbamylase (OTC) deficiency and cystic fibrosis (CF), both rare diseases. In our vaccine program, we have partnered with CSL Seqirus, one of the world’s leading influenza vaccine providers, on the development and commercialization of mRNA vaccines for COVID-19, influenza and three other infectious diseases. In CSL Limited’s half-year results presented on February 11, 2026, CSL Limited reported an accounting write-down of approximately $430 million attributable to our collaboration agreement with CSL Seqirus, citing declining COVID-19 disease burden and more onerous U.S. regulatory requirements.

In our CF program, we enrolled and completed dosing in the three initially planned cohorts of our Phase 2 multiple ascending dose study of ARCT-032, confirming the safety and tolerability of ARCT-032 dosed daily for four weeks. This study was initiated in December 2024 and was designed to identify a safe and effective dose regimen in those with Class I (null) CFTR mutations and people with CF who do not benefit from CFTR modulators. In the study, six CF adults with Class I CFTR mutations inhaled 10 mg doses of ARCT-032 daily over 28 days. Interim results released in October 2025 demonstrated that the treatment was generally safe and well tolerated. Treatment-related adverse events (AEs) that were identified in the single-dose Phase 1 study were also observed in some participants for the first few doses but ceased with continued dosing. Bronchospasm has not been reported in this study thus far, neither with nor without albuterol pretreatment. One serious adverse event (SAE) occurred in a participant after the end of the dosing period. The safety review committee found no convincing evidence that the SAE is related to ARCT-032 and approved the study to proceed. We intend to initiate a 12-week safety and preliminary efficacy study in up to 20 CF participants in the first half of 2026, after the third cohort completes treatment. ARCT-032 has received Orphan Drug Designation by the U.S. Food and Drug Administration (the “FDA”) and Orphan Medicinal Product Designation by the European Medicines Agency (the “EMA”) for the treatment of CF, and Rare Pediatric Disease Designation from the FDA.

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KOSTAIVE is the brand name approved in Japan and Europe for ARCT-154, which is the version of the sa-mRNA COVID vaccine encoding the ancestral strain of SARS-CoV-2, and also for updated variant-specific versions of this vaccine. We may use KOSTAIVE or the specific internally generated name, such as ARCT-154, ARCT-2301 and ARCT-2303, to identify a version of the vaccine.

In our OTC program, we have continued to conduct a Phase 2 double-blind multiple-dose study of ARCT-810. Five patients with OTC deficiency have now completed dosing, and a sixth patient has initiated dosing. A type C meeting with the FDA to discuss our plans for a proposed future pediatric study under the RDEP (Rare Disease Evidence Principles) is scheduled for the first half of 2026. ARCT-810 has received Orphan Drug Designation from the FDA and Orphan Medicinal Product Designation from the EMA for treatment of OTC deficiency, as well as Fast Track Designation and Rare Pediatric Disease Designation from the FDA.

Commercial sales of KOSTAIVE began in October 2024 in Japan by Meiji Seika Pharma, Ltd. (“Meiji”), CSL Seqirus’ exclusive partner in Japan, marking the first commercial sales of an Arcturus-developed product. In September 2025, Meiji launched a new presentation of KOSTAIVE in Japan. The product is a 2-dose vial lyophilized presentation incorporating the updated XEC variant strain. Approval for offshore manufacturing of the 2-dose vial lyophilized presentation was granted by Japan in August 2025, followed by approval for onshore manufacturing in January 2026. KOSTAIVE was approved by the European Commission (EC) in February 2025 and by the United Kingdom in January 2026, providing further validation of our platform by additional significant regulatory authorities.

In December 2024, we initiated dosing of an sa-mRNA vaccine candidate against pandemic avian influenza (bird flu) in a Phase 1 trial funded by the Biomedical Advanced Research and Development Authority (“BARDA”). The study results were received in the second half of 2025, indicating a favorable tolerability and safety profile and the ability to induce a robust and durable humoral immune response in young and older adults.

We also improved our platform technologies and advanced our early-stage research activities and manufacturing process development and operations. We conducted exploratory platform development activities, including the evaluation of genome editing, and new targeting approaches, where our LUNAR and STARR platforms could be useful for identification and development of additional products for our portfolio.

Our activities since inception have consisted principally of performing research and development activities, clinical research activities, general and administrative activities and raising capital to fund those efforts. Our activities are subject to significant risks and uncertainties, including failing to secure additional funding before we achieve sustainable revenues and profit from operations. As of December 31, 2025, we had an accumulated deficit of $514.6 million.

Liquidity and Capital Resources

From the Company’s inception through the year ended December 31, 2025, the Company has funded its operations principally with the proceeds from revenues earned through collaboration agreements and government contracts, the sale of capital stock and long-term debt. During fiscal year 2025, we received milestone payments totaling $39.1 million from CSL Seqirus. At December 31, 2025, the Company’s balance of cash and cash equivalents, including restricted cash, was $232.8 million.

CSL Seqirus, Inc. Collaboration and License Agreement

In November 2022, we entered into the CSL Collaboration Agreement with CSL Seqirus for the global exclusive rights to research, develop, manufacture and commercialize self-amplifying mRNA vaccines. The CSL Collaboration Agreement became effective on December 8, 2022, following clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

Under the CSL Collaboration Agreement, CSL Seqirus receives global exclusive rights to our technology for vaccines against SARS-CoV-2 (COVID-19), influenza and three other infectious diseases. Specifically, the collaboration agreement grants CSL Seqirus a license to our STARR mRNA technology and LUNAR lipid-mediated delivery, as well as mRNA drug substance and drug product manufacturing expertise. CSL has also been granted global non-exclusive rights in the field of pandemic preparedness (i.e., pathogens identified as priority diseases by the WHO), with the right to convert to an exclusive license.

The CSL Collaboration Agreement sets forth how the parties will collaborate to research and develop vaccine candidates. In the COVID-19 field, we undertake activities for certain regulatory filings for our leading

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self-amplifying mRNA vaccine candidate in COVID-19, ARCT-154, in the United States and Europe and for research and development activities of a next-generation COVID vaccine candidate. CSL Seqirus leads and is responsible for all other research and development in COVID-19, influenza and the other fields.

We received an up-front payment of $200.0 million, with the potential to receive development milestones totaling more than $1.3 billion if all products are registered in the licensed fields. We also are entitled to potentially receive up to $3.0 billion in commercial milestones based on “net sales” of vaccines in the various fields. In addition, we are entitled to receive a 40% share of net profits from COVID-19 vaccine sales and up to low double-digit royalties of annual net sales for vaccines against influenza, pandemic preparedness and three additional infectious diseases. Entitlement to all such payments is subject to the strict conditions, requirements, royalty reduction provisions and other limitations set forth in the CSL Collaboration Agreement.

Either party may terminate the CSL Collaboration Agreement on a field-by-field basis for material breach by the other party, following notice and opportunity to cure. CSL Seqirus may also terminate the collaboration agreement in its entirety or on a field-by-field basis for any reason or no reason whatsoever, with certain limitations. The CSL Collaboration Agreement may also be terminated by CSL Seqirus for safety reasons, clinical data nonviability, commercial nonviability and other specified reasons.

In March 2024, we entered into Amendment Number Two to the CSL Collaboration Agreement to reflect updates to the development program and other adjustments consistent with our prior disclosures regarding the Collaboration and License Agreement (“Amendment Number Two”). Amendment Number Two, among other things, adjusts (i) the development plans for certain product candidates, (ii) various development milestones related to such product candidates, (iii) provisions of the CSL Collabora

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