BTIG Reiterates Buy Rating on Arcturus Therapeutics (ARCT)

BTIG analyst Thomas Shrader reiterated a Buy rating and $48.00 price target on Arcturus Therapeutics (NASDAQ: ARCT).

The analyst comments ": As we reviewed in our PT increase (HERE), mRNA vaccines for influenza are already more powerful than the current high-efficacy protein vaccines (Fluzone HD, which is not adjuvanted... yet). However, the conventional mRNA vaccines like mRNA-1010 also see Gr3 adverse events — which are very rare for Fluzone HD (Exhibit 1). Arcturus saw Gr3 adverse events in its KOSTAIVE trials, but those rates may be COVID-specific. For example, in the big-placebo controlled run-in trial published in Nature, the rates of AEs involving physician intervention (termed medically attended) were HIGHER in the placebo group. As a result, we see the upcoming pandemic flu readout for Arcturus' SAM-vaccine to be very telling. If seroconversion is high and Gr3 AEs are not, it supports the idea that the Arcturus' flu program (partnered with CSL (CSLLY, Not Rated)) could be the final winner in the better influenza race. We still see adjuvanted flu vaccines like those of Novavax (NVAX, Buy, $19 PT) and its Matrix-M adjuvant as important to watch, but we expect one of these approaches to eventually take over the high-efficacy flu market (the only market that counts, commercially). For CF, we expect several patients to have completed dosing in the second cohort and possibly beyond. We would also expect that, like many gene therapy trials, the FDA will have required dosing to start at doses that could, based on the terrific animal data (Exhibit 2), help patients. Management commented on the call that the ARCT-032 formulation was developed with an expectation that many of the treated patients will have lungs that are a mess - full of mucus and highly inflamed. As a result, the first doses may help clean up the lung leading to building efficacy as the healthier lung allows more CFTR to reach target cells. This building of efficacy in responders might provide a reassuring look at "responder" patients in a trial that might be noisy. Other useful comments included the comment that the true Type 1 patients aren't outliers in this trial population and that most patients have very low CFTR activity - albeit for different genetic and tolerability reasons. Also useful was the comment that the company would have disclosed the observation that a month of daily dosing was causing problems in a patient - and they have not. For background, the CF program involves delivering high levels of CFTR mRNA and LUNAR-lipid to patients with fragile lungs. The Arcturus platform uses a degradable lipid to avoid toxic buildup - which may be helping in this demanding application. Overall, we see this no news as good news and possibly difficult for other companies to replicate. For OTC, the key comment was that they are now treating very sick patients. As this trial is designed to identify biomarkers worth discussing with the FDA (without alerting competitors), we think this readout could be the least detailed for competitive reasons."

For an analyst ratings summary and ratings history on Arcturus Therapeutics click here. For more ratings news on Arcturus Therapeutics click here.

Shares of Arcturus Therapeutics closed at $14.55 yesterday.

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