Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) shares sank 50% on Wednesday after the company reported interim Phase 2 results for its cystic fibrosis treatment that failed to deliver significant improvement in lung function.
The San Diego-based mRNA drug developer said its inhaled investigational therapy, ARCT-032, was generally safe and well-tolerated in the second cohort of its ongoing Phase 2 trial. Six adults with Class I cystic fibrosis received daily 10 mg doses over a 28-day period.
The primary analysis comparing FEV₁ (forced expiratory volume) from Day 1 to Day 28 showed no meaningful improvement in lung function. However, high-resolution CT scans revealed encouraging reductions in mucus burden in four of the six participants, a signal the company highlighted as potentially clinically relevant.
A post hoc exploratory analysis indicated modest lung function improvements in four patients, with an average absolute increase of 3.8% and a relative increase of 5.1% in percent predicted FEV₁ between pre-treatment and Day 42 measurements. The company noted these changes are within the natural variability of FEV₁ readings, meaning they may not represent a true treatment effect.
One participant experienced a serious adverse event after the dosing period, but the Data Monitoring Committee concluded there was no convincing evidence linking it to ARCT-032 and allowed the trial to proceed.
Arcturus is now enrolling up to six additional participants in a third cohort to test a higher 15 mg dose. The company also plans to launch a 12-week safety and preliminary efficacy study involving up to 20 participants in the first half of 2026.
The market reaction reflected investor disappointment over the lack of clear lung function improvement in the main analysis, despite the company’s emphasis on mucus reduction trends.