Arcturus Therapeutics Holdings Inc. — Form 8-K Summary
Business Context and Reporting Period
Arcturus Therapeutics Holdings Inc. reported the entry, on August 17, 2020, by a wholly owned subsidiary into a definitive Supply Agreement with the Israeli Ministry of Health (MOH) for the company’s LUNAR-COV19 COVID-19 vaccine candidate. The report was signed and dated August 18, 2020. This is a material agreement disclosure rather than a periodic financial report.
Material Agreement and Key Financial Terms
- The agreement provides for an initial reserve of up to one million doses, subject to a potential 50% reduction by the MOH before December 1, 2020.
- The initial reserve may be increased if the approved dosage is below a specified microgram amount per dose.
- The MOH may elect to purchase additional reserve doses and stockpiling doses under specified notice deadlines and purchase prices.
- If the MOH purchases the maximum number of currently specified total doses, the aggregate purchase price is expected to range from $250 million to $275 million, with the exact amount tied to the timing of required regulatory approvals.
- Down payments are expected to range from 12.5% to 20% of the purchase price for purchased doses. Final payment is to be released from escrow after delivery of applicable doses and receipt of required regulatory approvals.
- An initial deposit equal to 12.5% of the purchase price for the initial reserve doses is due after expiration of the MOH’s one-time termination right.
Material Changes, Outlook, Risks and Contingencies
- The MOH has a limited right to terminate without further obligation during a 10-day period beginning after the company starts dosing the first expansion cohort of its ongoing Phase 1/2 LUNAR-COV19 trial in Singapore.
- The company must use commercially reasonable efforts to obtain specified Israeli regulatory approvals. The MOH may terminate if those approvals are not obtained by December 31, 2021.
- The agreement is contingent on clinical development, regulatory approval, dosage requirements, manufacturing and delivery, and the MOH’s exercise of its purchase rights.
- The MOH received priority rights to the maximum number of currently specified total doses before any third party other than Singapore, subject to the agreement’s terms and conditions.
- The filing does not provide recognized revenue, profit, cash flow, margin, debt, liquidity, or other reported financial-statement metrics associated with the agreement.
Important Facts for Investors to Verify
- Whether the MOH exercises its rights for the additional reserve and stockpiling doses.
- Whether the MOH exercises its limited termination right after commencement of the first expansion cohort.
- Progress and results of the Phase 1/2 LUNAR-COV19 trial.
- Receipt of Israeli and other required regulatory approvals by the applicable deadlines.
- Actual dose quantity, approved dosing regimen, purchase price, deposits received, delivery timing, and whether any revenue is recognized.
- The complete Supply Agreement, which the company stated would be filed as an exhibit to its Form 10-Q for the quarter ended September 30, 2020.