HCW starts Arcturus Therapeutics at buy; PT $15

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H.C. Wainwright launched coverage of Arcturus Therapeutics (NASDAQ:ARCT) with a “buy” rating and $15 price target. The stock closed at $7.91 on April 4.

Arcturus is focused on the development of novel messenger RNA (mRNA) therapies for rare genetic diseases.

“By the first quarter of 2020, we believe Arcturus may initiate the first ever trial of an mRNA therapeutic dosed chronically via intravenous injection,” writes analyst Ed Arce.

While RNAi is deployed to knockdown or silence mutated genes from being translated into defective proteins that cause disease, the therapeutic application of mRNA works in an opposite manner: increasing the production of defective or insufficient protein.

“We believe Arcturus' proprietary enabling technologies - UNA chemistry and LUNAR delivery - may successfully address the key technical issues that have so far limited the promise of mRNA therapies: targeted delivery, translational efficacy, duration of action, and tolerability (immunogenicity),” Mr. Arce said.

The company has a pipeline of seven preclinical programs: five pharma-partnered and two wholly-owned assets. “Our primary focus is lead asset, intravenous ARCT-810, targeting periportal hepatocytes to treat ornithine transcarbamylase (OTC) deficiency; and LUNAR- CF, a nebulized aerosol targeting bronchial epithelial cells to treat cystic fibrosis (CF).

Mr. Arce said that in an OTC-deficient mouse model, all animals on a weekly dose of ARCT-810 survived through day 56, while all animals on placebo died by day 28.

He said the key near-term stock catalyst is an anticipated IND filing in the fourth quarter of 2019 and subsequent Phase 1 initiation of ARCT-810. “Overall, we view Arcturus' broad RNA platform as highly competitive and differentiated, and believe both the OTC and CF programs could be disease modifying.”

Stephen Kilmer