Q4 2023 Arcturus Therapeutics Holdings Inc Earnings Call

[music].

Operator: Greetings and welcome to Arcturus Therapeutics' fourth quarter and full year 2023 conference. At this time, all participants are on a listen only.

Greetings and welcome to Arcturus Therapeutics fourth quarter and full year 2023 conference call. At this time, all participants are in a listen only mode.

Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference... Please hit star zero on your telephone.

A question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please hit Star zero on your telephone keypad. As a reminder, this conference is being recorded.

Operator: As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Neda Safarzadeh.

I would now like to turn the conference over to your host NEDA Sappers Eddie.

Neda Safarzadeh: Vice President, Head of Investor Relations, Public Relations, and Mark. Thank you. You may now go on. Thank you, operator.

Vice President head of Investor Relations public relations and marketing.

You may now begin.

Thank you operator, good afternoon, and it won't come to Arcturus Therapeutics quarterly financial update on pipeline progress call.

Neda Safarzadeh: Good afternoon, and welcome to Arcturus Therapeutics' quarterly financial update and pipeline progress call. Today's call will be led by Joe Payne, our President and CEO, and Andy Sassine, our CFO. Dr. Pat Chivukula, our CSO and COO, will join them for the Q&A session. Before we begin, I would like to remind everyone that the statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by the statement.

Today's call will be led by Joe Payne, our president and CEO and Andy Sassine our CFO.

After a patch or a cooler or C. S. O S. T O will join them for the Q&A session.

Before we begin I would like to remind everyone that the statements made during this call regarding matters that are not historical facts are forward looking statements within the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Forward looking statements are not guarantees of performance.

Involve known and unknown risks uncertainties and assumptions that may cause actual results performance achievements to differ materially from those expressed or implied by the statements.

Neda Safarzadeh: Please see the forward-looking statement disclaimer in the company's press release issued earlier today, as well as the risk factors section in our most recent form, 10-K, and in subsequent filings with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made. And with that, I will now turn the call over to Joe. Thank you, Neda.

Please see the forward looking statement disclaimer on the company's press release issued earlier today as well as the risk factors section in our most recent Form 10-K and in subsequent filings with the SEC.

In addition, any forward looking statements represent our views only as of the date such statements are made.

Terrific, specifically disclaims any obligation to update such statements.

And with that I will now turn the call over to Joe.

Thank you it's good to be with you again everybody.

Joseph E. Payne: It's good to be with you again, everybody. We look forward to providing our updates on our quarterly investor call today. I will begin my remarks with an update on progress regarding our CoStave COVID-19 vaccine program. Following favorable clinical results from several COSTAVE studies, including a 16,000 subject efficacy study performed in Vietnam, as well as a Phase 3 COVID-19 booster trial in Japan, the Japan Ministry of Health, Labor, and Welfare (MHLW), granted approval for COSTAVE, a self-amplifying mRNA COVID This approval marks a historic milestone as the first self-amplifying mRNA product in the world to be registered.

We look forward to providing our updates today on our quarterly investor call I.

I will begin my remarks with an update on progress regarding our post stave COVID-19 vaccine program.

Following favorable clinical results from several co stage studies, including a 16000 subjects efficacy study performed in Vietnam as well as a phase III COVID-19 booster trial in Japan.

Japan's Ministry of Health Labor and welfare MH L. W granted approval for coast, Dave a self amplifying mrna COVID-19 vaccine for primary vaccination and booster for adults 18 years and older.

This approval marks a historic milestone as the first self amplifying mrna product in the world to be registered.

Joseph E. Payne: And we are increasingly confident about the future applications of our now proven Innovative Star self-amplifying messenger RNA vaccine platform. We look forward to expanding our vaccine platform alongside our global exclusive partner, CSL, and CSL's partner in Japan, Meiji Seica Pharma. The Co-State Japan approval is further supported by an active, controlled Phase 3 booster vaccine study conducted in 11 sites in Japan. The study included healthy adults initially immunized with two doses of an mRNA vaccine, whether that was CarbonAti or Spikevax, and then a third dose of CarbonAti.

And we are increasingly confident about the future applications of our now proven innovative star self amplifying messenger RNA vaccine platform.

We look forward to expanding our vaccine platform alongside or a global exclusive partner CSL and see a sales partner in Japan may G sake of pharma.

The coast, Dave Japan approval is further supported by an active controlled phase III booster vaccine study conducted in 11 sites in Japan.

The study included healthy adults initially immunized with two doses of an mrna vaccine whether that was commonality or spike backs and then the third dose of carbon Eddie.

Joseph E. Payne: The study was conducted in partnership with CSL's partner, Meiji Seika Pharma. This is a global health company based in Japan. The new analysis at six months post-vaccination shows that CoSTAV induces a broader and more durable immune response compared to Comirnaty for both the original Wuhan strain and the Omicron BA4 slash 5 variant, and an advantage in antibody persistence.

The study was conducted in partnership with C. S. LS partner Meiji sake of pharma. This is a global health company based in Japan.

The new analysis at six months post vaccination shows that coast, Dave induces a broader and more durable immune response compared to carbon Eddie for both the original Wuhan strain and the Omicron P. A four slash five variant and and an advantage in anti body persistence.

Joseph E. Payne: Co-stayed results were achieved with one-sixth the dose of Carmanab. Based on the totality of clinical data collected to date, Arcturus anticipates that the advantages of self-amplifying mRNA should provide superior protective efficacy against COVID-19 disease caused by future emergent variants of SARS-CoV-2. The CO-STAVE booster study is ongoing and will continue to collect safety data and assess durability of the immune response in participants up to 12 months post-vaccination. We are very pleased to report that CoStave remains on track to launch in Japan this year.

Postpaid results were achieved with one sixth the dose of commonality.

Based on the totality of clinical data collected to date Arcturus anticipates that the advantages of self amplifying mrna should provide superior protective efficacy against COVID-19 disease caused by future merchant variance of Sars Cov two.

The coast a booster study is ongoing and will continue to collect safety data and assess durability of the immune response and participants up to 12 months post vaccination.

We are very pleased to report that coast, Dave remains on track to launch in Japan. This year.

Joseph E. Payne: Meiji Seika Pharma, as the party responsible for distributing the vaccine in Japan, will be providing updates and further detail pertaining to the launch of COSTAVE in an official press release. In April, the WHO is expected to announce the updated COVID variant. In due course, manufacturing runs and the subsequent distribution of COSTAV in Japan will follow. The commercial case for CoStAID is becoming clear, although a significantly stronger and broader immune response is preferred.

Hey, G sake of pharma has the party responsible for distributing the vaccine in Japan will be providing updates and further detail pertaining to the launch of coach days in official press releases.

In April the W. H O is expected to announce the updated Covid theory. It in due course manufacturing runs and the subsequent distribution of coast, Dave in Japan will follow.

The commercial case for coast, Dave is becoming clear.

It can be stronger and broader immune responses preferred.

Joseph E. Payne: The ACIP and other regulatory agencies are presently recommending two boosters each year for the approved conventional mRNA vaccine. Thus, it's very apparent that there is a clear need for a more durable, once-a-year COVID vaccine, and CoStave has the potential to address this important global health need. COVID is here to stay, and the longer-lasting co-stave is also here to stay. So moving on to ARCT2138, the Lunar Flu Program. This is our Quadrivalent Self-Amplifying mRNA Vaccine Candidate for Seasonal Influenza.

D. A C I P and other regulatory agencies are presently recommending two boosters each year for the approved conventional mrna vaccines.

Thus, it's very apparent.

Theres, a clear need for a more durable once a year COVID-19 vaccine and coast, Dave has the potential to address this important global health need Covid.

Covid is here to stay and the longer lasting coast. Dave is also here to stay.

So moving on to a R. C. T 2138 lunar flu program. This is our quadrivalent self amplifying mrna vaccine candidate for seasonal influenza.

Joseph E. Payne: I'm pleased to announce that the company, along with our partner, CSL, initiated a phase one dose finding study in January 2024 with the intention of assessing the dose response of the investigational vaccine and comparing the safety and immunogenicity with the licensed standard of care. Overall, 132 healthy individuals, which includes 84 younger adults and 48 older adults, are planned to be recruited in this Phase I clinical study. I'm now excited to announce that Arcturus has initiated new vaccine discovery programs for Lyme disease and gonorrhea. This decision is supported by the clinical and regulatory validation of lunar and star technologies provided by our first regulatory approval of COSTEC. Our technologies are ideally suited to these infectious disease vaccine opportunities.

I'm pleased to announce that the company along with our partner CSL initiated a phase one dose finding study in January 'twenty 'twenty four with the intention of assessing the dose response of the investigational vaccine and comparing the safety and Immunogenicity with the license to standard of care.

Overall 132 healthy individuals, which includes 84 younger adults and 48 older adults are planned to be recruited in this phase one clinical study.

I'm now excited to announce that Arcturus has initiated new vaccine discovery programs for Lyme disease and gonorrhea.

This decision is supported by the clinical and regulatory validation of lunar and Star technologies provided by our first regulatory approval of coast Dave.

Our technologies are ideally suited for these infectious disease vaccine opportunities.

Joseph E. Payne: Our validated vaccine platform is now being applied to seven global infectious diseases, five with our partner, CSL Seqirus, and two wholly owned vaccine discovery programs, Lyme disease and gonorrhea. The total estimated global market opportunity for these new vaccine discovery programs exceeds $4 billion. I'll now move on to ARCT 810, our messenger RNA therapeutic candidate for ornithine transcarbamylase or OTC deficiency

Our validated vaccine platform is now being applied to seven global infectious diseases, five with our partner CSL secures and two wholly owned vaccine discovery programs Lyme disease and gonorrhea.

The total estimated global market opportunity for these new vaccine discovery programs exceeds $4 billion.

I'll now move on to a R. C T 810.

Our messenger RNA therapeutic candidate for ornithine Trans carb analysts of our OTC deficiency.

Joseph E. Payne: This investigational medicine is designed to functionally replace the deficient or missing OTC enzyme in the liver, restoring urea cycle activity and preventing metabolic crises that cause neurological damage. ARCT 810 could reduce the need for ammonia scavengers and ease the rigid dietary protein restrictions that OTC patients face today, thus improving the quality of life for those with. Our Phase 1b Single Ascending Dose Study in the United States has completed enrollment and dosing of all cohorts with 16 patients. A Phase II study in the United Kingdom and Europe is enrolling up to 24 adolescents and adults with OTC divisions. The ongoing study is evaluating two dose levels and includes up to six bi-weekly administrations for each participant. The company expects to share Phase 2 interim study data by the end of Q2 2024. Moving now to our ARCP 032 program. ARCTO32 is an inhaled messenger RNA therapeutic candidate for cystic fibrosis formulated with Arcturus' lunar delivery technology.

This investigational medicine is designed to functionally replace that deficient or missing OTC enzyme in the liver restoring urea cycle activity in preventing metabolic crises that cause neurological damage a R. C. T H N could reduce the need for ammonia scavengers and ease the rigid dietary protein.

<unk> that OTC patients face today, thus improving the quality of life for those with this disease.

Our phase one b single ascending dose study in the United States has completed enrollment and dosing of all cohorts with 16 patients. The phase two study in the United Kingdom, and Europe is enrolling up to 20 for adolescents and adults with OTC deficiency.

The ongoing study is evaluating two dose levels and includes up to six by weekly administrations for each participant.

Company expects to share phase two interim study data by the end of Q2 'twenty 'twenty four.

Moving now to our a R. C T O 32 program.

A R. C. T O 32 isn't an inhaled messenger RNA therapeutic candidate for cystic fibrosis formulated with Arcturus has lunar delivery technology.

Joseph E. Payne: This investigational medicine is designed to functionally replace the deficient or missing CFTR transporter in the lung, thus restoring the balance of salt and water. We have now completed dosing in a phase one study in New Zealand of 32 healthy subjects across four ascending single-dose cohorts. In addition, we have dosed patients in a Phase 1B clinical study in New Zealand. The Phase 1b study is designed to enroll up to eight adults with cystic fibrosis, with each participant receiving two administrations of ARCT 032. We remain on track to share interim Phase 1b data in Q2 2024. In November 2023, ARCT 032 received orphan drug designation from the FDA. The designation provides significant incentives to promote the development of the drug, including the potential for market exclusivity for seven years upon FDA approval, and eligibility for tax credits for qualified clinical trials.

This investigational medicine is designed to functionally replace that deficient or missing C. F T our transport or in the lungs, and thus restoring the balance of salt and water.

We have now completed dosing in a phase one study in New Zealand up 32 healthy subjects across four ascending single dose cohorts.

In addition, we have dosed patients in a phase one b clinical study in New Zealand.

Phase one B study is designed to enroll up to eight adults with cystic fibrosis with each participant receiving two administrations of a R. C. T. R 32.

We remain on track to share interim phase <unk> data in Q2, 'twenty 'twenty four.

In November 2023, a R. C. T O 32 received orphan drug designation from the F D. A.

The designation provides significant incentives to promote the development of the drug including the potential for market exclusivity for seven years. Upon FDA approval eligibility for tax credits for qualified clinical trials waiver, a prescription drug user fee act or application fee and al.

Joseph E. Payne: Waiver of the Prescription Drug User Fee Act application fee and eligibility to receive Regulatory Guidance from the FDA in the Design of an Overall Drug Development. In February 2024, ARCTO32 received Orphan Medicinal Product Designation from the European Commission, which will give Arcturus access to protocol assistance, centralized authorization process, B-reductions, and 10 years of market exclusivity. And with that, I'll now pass the call to Andrew. Thank you, Joe. And good afternoon, everyone.

What's your ability to receive regulatory guidance from the FDA and the design of an overall drug development plan.

In February 2020 for a R. C. T. O 32 received orphan medicinal product designation from the European Commission, which will give arcturus access to protocol assistance centralized authorization process.

The reductions in 10 years of market exclusivity.

And with that I'll now pass the call to Andy.

Thank you Joe and good afternoon, everyone.

Andrew H. Sassine: The press release issued earlier today includes financial statements for the fourth quarter and fiscal year ending December 31, 2023 and provides a summary and analysis of year-over-year financial results. Please also refer to our Form 10-K, which will be filed early next week, for more details on our financial performance. Before we begin the financial review, I wanted to give you some highlights from our recent trip to Tokyo, where Joe Payne, Pad Chivukula, and I met with the executive teams from Meiji Seika Pharma and Axelede, our JV partner in our Arctalis manufacturing venture. I am happy to report that everyone was very excited about the approval of COSTAVE in Japan and the opportunity to manufacture the world's first self-amplifying All of our partners are working very closely with the Japanese government and local government officials to prepare for the launch of Co-State in the second half of 2024. We are deeply grateful to the Japanese government for their financial support of Co-State and our manufacturing partner, Arcala.

The press release issued earlier today includes financial statements for the fourth quarter and fiscal year ending December 31st 2023.

And provides a summary and analysis of year over year financial results.

Please also reference our Form 10-K, which will be filed early next week for more details on our financial performance.

Before we begin the financial review I wanted to give you some highlights from our recent trip to Tokyo.

Joe Payne pad to be cooler and I met with the executive team a major U K Cup arm up and actually our JV partner and our our Dallas manufacturing venture.

I am happy to report that everyone was very excited about the approval of coke that you're in.

Japan, and the opportunity to manufacture the world birth self amplifying mrna vaccine in Japan under the major you grab.

All of our partners are working very closely with the Japanese and local government officials.

For the launch of coach days in the second half of 'twenty 'twenty four.

We are deeply grateful to the Japanese government financial support of close date at all.

Manufacturing partner are countless.

Andrew H. Sassine: Going forward, officials from Meiji Seika Pharma will provide regular updates on the launch of CoStave and official press releases this year. Now, I will now provide a quick summary of our financial results. We reported revenues of $169.9 million during 2023 compared to revenues of $206 million during 2022. Revenue recognized from CSL in 2023 was $157.4 million, which slightly increased by $3 million compared to 2022. We also made significant progress with the BARDA pandemic flu vaccine agreement that led to an increase in revenue of $8.8 million. The majority of the decrease in FY23 revenues was driven by the discontinuation of our collaboration agreements with VinBioCare and J&J in 2022.

Going forward officials have made us take a farmer will provide regular updates on the launch of Coke.

An official press releases this year.

I will now provide a quick summary of our Prudential adult.

We reported revenues of $169 $9 million during 'twenty twenty-three.

There are two rather than use the $206 million during 'twenty to 'twenty two.

Revenue recognized from C. S. L. In 2023 it was $157 $4 million.

Which slightly increased by $3 million compared to 'twenty to 'twenty two.

We also made significant progress with the BARDA pandemic flu vaccine agreement that led to an increase in revenue of $8.8 million.

The majority of the decrease in FY 'twenty through your revenue was driven by the discontinuation of our collaboration agreement with them bio care and J&J in 'twenty to 'twenty two.

Andrew H. Sassine: In the fourth quarter of 2023, Arcturus achieved $29.2 million in milestones from CSL. The milestone payments will continue to be used to fund development activities for the Lunar COVID-19 vaccine and self-amplifying mRNA flu programs with CSL. Total operating expenses for the year ended December 31st, 2023 were $245 million compared with $193.8 million for the year ended December 31st, 2022. For the three months ended December 31st, 2023, operating expenses were $49.1 million compared with $38.8 million for the three months ended December 31st, 2022.

In the fourth quarter of 'twenty to 'twenty three.

Peru achieved $29 $2 million in milestones from CSL.

Milestone payments, we will continue to be used to fund development activities with the Luna COVID-19 vaccine.

In Belk amplifying mrna flu program would be S. L.

Total operating expenses for the year ended December 31st 2023 with $245 million.

Compared with $193.8 million.

You ended December 31st 2022.

For the three months ended December 31st 2023 operating.

<unk> expenses were $49 $1 million compared with $38 $8 million for the three months ended December 31st.

2022.

Andrew H. Sassine: I want to highlight that total operating expenses declined by $15.4 million sequentially from the third fiscal quarter of 2023 due to lower manufacturing expenses. Our research and development expenses consist primarily of external manufacturing costs, in vivo research studies, and clinical trials performed by contract research organizations. Clinical and Regulatory Consultant, personnel-related expenses, facility-related expenses, and laboratory supplies related to conducting R&D activities. Research and development expenses were $192.1 million for the year ended December 31, 2023, compared to $147.8 million for the year ended December 31, 2022.

I want to highlight that total operating expenses declined by $15 $4 million sequentially.

And the third fiscal quarter of 2023 due to lower manufacturing expenses.

Our research and development expenses consist primarily of external manufacturing cost in vivo research studies and clinical trial performed by contract research organization clinical.

Clinical and regulatory consulting and personnel related expenses and facility related expenses.

Libratory supplies related to conducting R&D activity.

Research and development expenses were $192 $1 million for the year ended December 31st 2023, compared to $147.8 million a year.

I ended December 31st 2022.

Andrew H. Sassine: The increase in research and development expenses is attributable to our continued efforts to progress the CSL and BARDA programs, as well as our internal OTC and Cystic Fibrosis Program. Additionally, we have increased investment in early stage and discovery technologies. The company initiated preclinical research related to its Lyme disease and gonorrhea vaccine discovery program. G&A expenses were $52.9 million in 2023, compared with $46.1 million in 2022. The increase resulted primarily from personnel expenses due to an increased end count in salaries, increased travel and consulting expenses, as well as an increased rent expense associated with the new headquarters facility in San Diego. We anticipate total G&A expenses for 2024 will remain consistent with 2023 total. For the year ended December 31st, 2023, Arcturus reported a net loss of approximately $26.6 million, or $1 per diluted share, compared with net income of $9.3 million to $0.35 per diluted share in the year ended December 31, 2022.

The increase in research and development expenses were attributable to our continued effort to progress the CSL and BARDA program.

Well as our internal OTC and cystic fibrosis program.

Additionally, we have increased investment in early stage and discovery technology.

The company initiated preclinical research related to Lyme disease, and gonorrhea vaccine discovery program.

G&A expenses were $52 $9 million during 'twenty two 'twenty three.

Paired with $46 $1 million.

2022.

The increase resulted primarily from personnel expenses.

To increase headcount and salaries.

Increased travel and consulting expenses as well as an increased rent expense associated with the new headquarters facility in San Diego.

We anticipate total G&A expenses for 'twenty 'twenty four will remain consistent with 20 twenty-three totals.

For the year ended December 31st 2023.

<unk> recorded a net loss of approximately $26.6 million or $1 per diluted share.

Compared with net income of $9 $3 million 35 per diluted share in the year.

You ended December 31st 2022.

Andrew H. Sassine: For the three months ended December 31st, 2023, we reported a net loss of approximately $8.6 million, or $0.32 per diluted share, compared with a net income of $117.4 million, or $4.33 per diluted share, for the three months ended December 31st, 2022. The higher year quarter included a $200 million upfront payment from our CSL collaboration. Cash equivalents and restricted cash were $348.9 million as of December 31st, 2023, and $394 million as of December 31st, 2022. Since the beginning of our deal with CSL in November 2022, we have achieved approximately $396 million in upfront payments and milestones as of December 31st, 2023. We expect to continue to receive future milestone payments from CSL that will support the ongoing development of the COVID and flu programs and three additional vaccine programs by CSL. Finally, I'm happy to report the expected cash runway now extends through the first quarter of 2027, based on the current pipeline and program. I would also like to highlight that total share outstanding on a fully diluted basis has remained relatively consistent for three years in a row at approximately 26.6 million shares.

For the three months ended December 30 for 'twenty two 'twenty three.

We reported a net loss of approximately $8.6 million, but 32 cents per diluted share.

Paired with a net income of $117.4 million.

$4.33 per diluted share.

Three months ended December 31st 2022.

Prior year quarter included a $200 million upfront payment.

E S L collaboration.

Cash cash equivalents and restricted cash were $348 $9 million.

As of December 31st 2023.

$394 million as of December 31st 2022.

Since the beginning of our deal with C. S L and November 2022.

G. The pocket of at least $396 million.

What payment the milestone.

December 30, <unk> or 'twenty 'twenty. Please.

Do you expect to continue to receive future milestone payment E. S L.

The ongoing development of the Covid and flu program.

Additional vaccine programs like yourself.

Finally, I'm happy to report the expected cash runway now extends through the first quarter of 'twenty 'twenty seven they used to.

On the current pipeline and program.

I would also like to highlight that total shares outstanding on a fully diluted basis.

It remained relatively consistent with three years in a row.

The melee 26 6 million shares.

Andrew H. Sassine: This demonstrates management's commitment to continually improving shareholder value as we execute our strategic business plan. In summary, we believe the company remains in a strong financial position and has the resources to achieve multiple near-term value-creating milestones for the vaccine and therapeutic programs. Furthermore, with Co-stay product approval in December in Japan, we look forward to beginning to report potential commercial sales in the next few years. I will now pass the call back to Joe. Hey, thanks, Andy.

This demonstrates management's commitment to continually improving shareholder value as we execute our strategic business plan.

In summary, we believe the company remains in a strong financial position.

Has the resources to achieve multiple near term value, creating milestone for the vaccine and therapeutic program.

Furthermore, with the coast they product approval in December in Japan.

I look forward to beginning to report potential commercial sale in the next few years I will now pass the call back to Joe.

Hey, Thanks, Andy.

Joseph E. Payne: We continue to make excellent progress, and we are incredibly excited about our first product approval with COSTA. This achievement is an important validation of our mRNA technology and delivery platform. And with that, let's turn the time over to the operator for. At this time, we'll be conducting a question and answer. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is busy.

We continue to make excellent progress and we are incredibly excited about our first product approval with coast, Dave, but this achievement as an important validation of our mrna technology and delivery platform.

That lets turn the time over to the operator for questions.

At this time well be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue.

Operator: You may press star 2 if you'd like to remove your question from the... For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. One moment, please, while we poll for questions. Our first question comes from Evan Wang with Guggenheim Security. Please proceed with your question. Great, thanks for taking the questions, guys. Two from me.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the darkies one moment. Please while we poll for questions.

Our first question comes from Evan Wang with Guggenheim Securities. Please proceed with your question.

Great. Thanks for taking my question guys. Two for me first it was encouraging to see the ACI. If your recommendation Henri vaccination of I'll be really last week.

Joseph E. Payne: First, it was encouraging to see the ACIP recommendation on revaccination of the elderly last week. I'm wondering if we've seen similar recommendations internationally and, additionally, what kind of regulatory feedback you've gotten on how a more durable vaccine may be implemented, if you could talk both FDA and internationally in markets like Japan and Europe. And second, looking forward to some updates in 2Q from OTC and CF. As we're getting closer to data, wondering if you can share how many patients we can expect from each trial. Thanks. Hey, thanks, Evan.

I'm wondering if we've seen similar recommendation internationally and Oh.

Additionally, you know what kind of regulatory feedback you've gotten on our more durable vaccine may be implemented if you could talk both FDA and internationally in markets like Japan.

And in Europe.

Second looking forward to some updates in two key from a D. C. N T off as we're getting closer to data I'm wondering if you can share of how many patients we can expect from each trial. Thanks.

Hey, Thanks, Kevin.

Joseph E. Payne: Yes, first, I can address the question about the recent recommendations by ACIP. We're very happy to see that they recommend regular COVID vaccination, especially in the elderly, and the fact that they recommend two boosters annually. We, of course, because we're approved in Japan, wanted to provide some updated and new information to the people on this call that they may not appreciate, but the Japanese government has also now communicated that starting April 2024, routine COVID-19 vaccinations for the elderly will be recommended.

Yes, first I I can address the question about the recent recommendations by ACI P. We're very happy to see that they recommended regular COVID-19 vaccination, especially in the elderly.

And the fact that they've recommended two boosters annually.

We of course because were approved in Japan.

We wanted to provide some updated new information to the people on this call that they may not appreciate but Japan government is also now communicated that starting April 2024 that routine COVID-19 vaccinations for the elderly will be recommended.

Joseph E. Payne: And if you just go to the MHLW website, another new update that they recommend twice-yearly vaccination for the elderly, but also an old quote from the actual Japanese website, that people aged 65 and older, those with underlying medical conditions, and health care workers, so each of these three sets of people will be vaccinated twice a year, while all of the others will be vaccinated once. The vaccinations remain free of charge as well, and that's clearly communicated. So these developments, of course, are very good news for us because we're addressing a need for durability in the field, but also because there's increased support for the elderly and those with underlying medical conditions and healthcare workers in Japan and that their vaccinations remain free of charge, which is, of course, going to be helpful to us commercially. With respect to Europe, there's been no second vaccination recommendation for the elderly there by the European CDC, but those discussions are ongoing, and we'll be looking for those updates shortly. Now, you also asked additional questions about just the enrollment processes for the two therapeutic programs. Correct, Evan?

And if you just go to the M. H L. W website Ah another new update that they recommend twice a year vaccination for the elderly, but also and I'll quote from the App.

Actual website in Japan that people, aged 65 and older those with underlying medical conditions and health care workers. So each of these three sets of people will be vaccinated twice a year, while all of the others will be vaccinated once a year.

Vaccinations remain free of charge as well and that's clearly communicated. So do these developments of course are very good news for us because we're addressing a need of durability for the field, but also that there's elevated support for the for those the elderly and and those with underlying medical conditions and.

Health care workers in Japan, and that their vaccinations remained free of charge, which of course is.

That would be helpful to us commercially.

With respect to Europe, Theres been no second vaccination recommendation for the elderly there by the by the European C. D C.

But that those discussions are ongoing and we'll be looking for those updates shortly.

Now you also asked additional questions.

Just enrollment processes for the the two therapeutic programs correct Devin.

Joseph E. Payne: You know, we remain on track, that's something that we want to clearly communicate, that we're on track to communicate some interim data for Phase 1B in our CF program, and that's recruiting all patients, no placebo in that group, six to eight patients is what we're estimating. We're still guiding interim data to be shared in the second quarter. So that's a relatively near-term milestone. And likewise, we maintain our guidance on the OTC program for the end of Q2. With respect to specific updates and specific numbers, we haven't provided those details. But thank you for your questions.

You know we remain on track, that's that's something that we want to.

Clearly communicate that we're on track to communicate some interim data for phase one b in our CF program and that's recruiting all patients no placebo in that group are six to eight patients is what we're estimating we're still guiding interim data to be shared in the second quarter. So that's a relatively near term milestone.

And likewise, we maintain our guidance on the OTC program for the end of Q2.

With respect to specific updates in specific numbers, we haven't provide those details.

Okay.

But thank you for your questions.

Okay.

Operator: Our next question comes from Yasmeen Rahimi with Piper Sandler. Please proceed with your question. Hey, good afternoon, team.

Our next question comes from Yasmin Rahimi with Piper Sandler. Please proceed with your question.

Hey, good afternoon. This is Jonathan on for young.

Andrew H. Sassine: This is Zhengguan for Yas. Thanks for taking our questions. We have two. First, what would you say is the rate-limiting step for orders in Japan? And for cystic fibrosis in NTC, what types of data should we expect at the top line? And what would you say is the bar?

A question to me is to.

First what would you say is the rate limiting step for orders in Japan and for cystic fibrosis, and then D. C. What types of data should we expect the top line and what did you say like tomorrow.

Andrew H. Sassine: Sure, I can speak to the data for the top line, the top line data for the therapeutic programs. But the first question, I'll turn the time over to Andy with respect to what's the rate limiting for getting orders in Japan, Andy? Yeah, no, I think what we articulated earlier in the call is that, you know, we've had some very positive meetings with all the Meiji Seika Pharma officials and executives. And I think, you know, they're going to be driving the bus here, and they'll be announcing and making press releases, you know, as appropriate. So please stay tuned and be patient.

Sure I can speak to the the data for the top line the topline data for the therapeutic programs, but the first question and I'll turn the time over to Andy with respect to whats the whats rate limiting on getting orders in Japan Andy.

Yeah, No I think we articulated earlier in the call is that you know we've had some very positive meetings with all the majors.

Pharma officials and our executives and then I think you know theyre going to be driving the bus here and there'll be announcing and making press releases you know as the appropriate so please stay tuned and and.

Andrew H. Sassine: That is certainly, you know, the encouragement was kind of articulated by Joe just now that, and this is kind of a recent development, that, you know, the government is going to continue to financially support the population over 65, which is, you know, about 32 to 36 million people, right? That's not including, you know, the people that have compromised immune systems, you know, issues, and so forth or chronic illnesses. So you're looking at, you know, if you multiply that by two, somewhere in the vicinity of 60 plus million potential doses, right? If everyone gets two shots, two boosters, right, of conventional mRNA. So, you know, we're just kind of reiterating what's in the public domain, what's available. And, you know, Meiji will certainly give you more concrete information as soon as they can.

And be patient others are certainly you know.

<unk>.

It was a kind of articulated by Joe just now that and this is kind of a recent development that you know the government is going to continue to financially support you know the.

Population over six five which is you know about 32 to 36 million people like that so not including you know the people that have compromised immune you know issues and so forth. So we're chronic illnesses. So youre looking at you know if you multiply that by two somewhere in the basin.

You know 60 plus million potential.

Potential doses right if everyone gets two shots to boosters right of conventional mrna. So you know we were just kind of reiterating what's in the public domain what's available.

You know made you will we'll certainly give you more concrete information you know as soon as they can so stay tuned.

Andrew H. Sassine: So stay tuned. And then pertaining to the top line data for CF and OTC, you know, for OTC, we're looking for biomarkers to change in these patients, specifically ammonia to be adjusted to at or near normal levels. Many of these patients are on ammonia scavengers, so if that is indeed the case, there are other biomarkers that we can evaluate and measure, including erotic acid in the urine, and glutamate is another amino acid impacted by the urea cycle, and then OTC itself can be measured.

Okay.

And then pertaining to the topline data for for a C F and O T C for OTC, where we were looking for Biomarkers to change and in these patients specifically ammonia to be.

<unk> adjusted to at or near normal levels in many of these patients are on ammonia scavenger. So if if that is indeed the case, there's other biomarkers that we can evaluate and measure including erotic asset in the urine.

And glutamate is another immunoassay impacted by the urea cycle.

And then OTC itself can be measured so plenty of biomarkers to measure in these trials is in terms of topline data.

Joseph E. Payne: So plenty of biomarkers to measure in these trials as in terms of top-line data. With respect to the CF program, we're gonna be looking primarily at safety in Phase I-B. This is the first time that this therapy has been administered as two administrations to actual patients, and so it'll be very meaningful for us to establish some sort of track record of safety and tolerability in a spectrum of CF patients. Anything to add to that, Pad, for either program?

With respect to the CF program.

The you know we're going to be looking primarily at safety for phase one b. A these are the this is the first time that this therapeutic has been administered as two administrations in actual patients and so it'll be very meaningful for us to establish some sort of track record of safety and Tolerability in this.

Spectrum of CF patients anything to add to that pad for either program. Yeah. You know I think for the CF I think what we're gonna be looking at is and you know mainly a safety you you're right. We're also going to be looking at Vassar respiratory functions and making sure.

Padmanabh Chivukula: Yeah, you know, I think for the CF, I think what we're going to be looking at is, you know, mainly safety, you're right, but we're also going to be looking at various respiratory functions and making sure that this dose is well tolerated in a patient population. So I think we will be happy to see some of those results. And then, with regard to OTC, you know, we just obviously want to reiterate that the Phase 1B that we talked about was primarily a safety study, so we will be presenting that data at a conference coming up very soon. Thank you very much for the tea.

That though that there's just doses well tolerated in a in a patient population. So I think we will be happy.

To see some of those results and then with regard to O T C. I mean.

You know, we just obviously want to reiterate that the phase one b that we we talked about was primarily a safety study. So so we will be presenting that data at a conference coming up place. So thanks.

Thank you so much for the detail.

Yeah.

Okay.

Operator: Our next question is from Whitney Gem with Canaccord Genuity. I'm pleased to see you with your question. Hey guys, congrats on all the progress.

Our next question is from Whitney Jam with Canaccord Genuity. Please proceed with your question.

Hey, guys. Congrats on all the progress first one for me is on Covid in Japan, I think he stand to benefit from from orders are kind of on two fronts both from a.

Andrew H. Sassine: The first one from me is on COVID in Japan. I think you stand to benefit from orders. They're kind of on two fronts, both from a revenue sharing perspective, as well as from our cows.

On a revenue sharing perspective as well as our cows. So can you help us understand.

Andrew H. Sassine: So can you help us understand how those two will flow through your P&L or balance sheet when the orders and the manufacturing do start? So, yeah, with respect to revenue sharing and any sort of additional financial elements due to the Arcalis joint venture, Andy, do you want to address those? Yeah, certainly, Whitney.

How those to flow through your P&L or balance sheet, when the orders and the manufacturing starts.

So yeah with respect to revenue sharing and any sort of additional financial elements due to the art catalyst joint venture and each one to address those.

Yeah, certainly Whitney. Thank for the question are we typically have not provided detailed with respect to the revenue sharing you know opportunity, but if you look at the CSL.

Andrew H. Sassine: Thanks for the question. We typically have not provided detail with respect to the revenue sharing, you know, opportunity. But if you look at the CSL and Arcturus, you know, 60-40 gross profit split, you can, you know, try to extrapolate what a three-headed, three musketeer, you know, type of partnership would look like.

Our tourists you know 60 40 brought joy gross profit split.

You can you know try to extrapolate what would have to where you're headed with three musketeers are you know type of partnership look like so it'll obviously be very a significant pool for us.

Andrew H. Sassine: So it'll, you know, obviously be very significant and meaningful for us. And we're excited about, you know, the partnership to be working with all three people in Japan, especially Meiji, since they're the number one flu vaccine company in Japan. And CSL, who's, you know, number two in the world.

Where we're excited about the partnership to be working with all three people in Japan, especially made decent they are the number one flu vaccine company.

Japan and C. S L who you know number two in the world. So.

Andrew H. Sassine: So you're dealing with two very strong commercial powerhouses in their respective categories. So we're kind of fortunate with respect to that, and we're pretty excited. And of course, you know, having it made in Japan is kind of, you know, something that the government and the people of Japan are very proud of.

You're dealing with two very strong commercial powerhouses.

And in their respective categories. So we're kind of fortunate with respect to that and and were pretty excited and of course, you know having it being made in Japan. It is kind of a you know.

Something that the government and the people in Japan are very proud of and it's gonna be under the major brand name. So you know keep in mind that this is gonna be a Japanese vaccine.

Andrew H. Sassine: And it's going to be under the Meiji brand name. So, you know, keep in mind that this is going to be a Japanese vaccine. And that's what I think excites them in the government. And we're very fortunate, you know, that they gave us this opportunity to, you know, you know, compare our vaccine to Pfizer, right? And if we didn't have that opportunity, we would not have this kind of data to share with the world. And the fact that they financially supported, you know, the factory. So, you know, they bet on the right horse.

And that's what I think excites them and the government.

And we're very fortunate.

<unk> gave us the opportunity to.

Two you know you know compare our vaccine to buy them right and we didn't have that opportunity. We would not have this kind of data to share with the world.

The fact that these financially supported you know the factory. So you know the bed on the right horse in and I think it's going to be an exciting future and European approval is coming this year or two so you know we're highly you know excited about that too.

Andrew H. Sassine: And I think it's going to be an exciting future. And European approval is coming this year, too. So, you know, we're highly excited about that, too, and anticipating it as well. So we have a lot on the plate.

Anticipating it as well so.

There's a lot on the plate and hopefully that gives you some perspective, but unfortunately, we can't really go into too. Many details at this point in time, but hopefully soon we'll be able to reveal those.

Joseph E. Payne: And hopefully, that gives you some perspective. But unfortunately, we can't really go into too many details at this point in time, but hopefully, soon, we'll be able to reveal those. Our next question comes from Myles Minter with William Blair. Please proceed with your question. Hey, thanks for taking the questions. How important is it that the strain for your COVID vaccine actually gets adapted to XBB 1.5?

Yeah.

Okay.

Our next question comes from Myles Minter with William Blair. Please proceed with your question.

Hi, Thanks for taking the questions. How important you said that the strain for your Covid vaccine actually gets adapted to X may be 1.5, INR you have and collaboration when I say S. L. Wanting a phase III Immunogenicity trial, and I think there was some guidance that might be we might hear about something in.

Joseph E. Payne: I know you won in a phase three immunogenicity trial, and I think there was some guidance that maybe we might hear about something in the first quarter. So I just want to make sure that that's on track. And is that also a gating factor for the first sale in Japan?

The first quarter. So I just want to make sure that that's on track and is that all sorry a gate.

Our our guiding factor for the first sale in Japan, Thanks, Yeah, well, yeah. Thanks for bringing those programs up and Theres a lot of there's a considerable amount of late stage clinical data that's being collected for this platform.

Joseph E. Payne: Thanks. Well, yeah, thanks for bringing those programs up. There's a lot of, there's a considerable amount of late-stage clinical data that's being collected for this platform. You touched on a couple of these trials. One was the bivalent phase three trial where we're comparing bivalent CoSTAVE to bivalent Comirnaty, and that data is forthcoming soon. So something that will help us be able to communicate how we perform in a multivalent or bivalent setting to other technologies out there.

You touched on a couple of these trials. So that one was the bi valent a phase III trial, where we're comparing bivalent coast, Dave to bivalent commonality and that data is forthcoming soon so that's something that will help us be able to communicate how we perform in a multi valent are a bivalent.

Setting to other technologies out there.

Joseph E. Payne: With respect to the monovalent XBB trial, that one is designed to incorporate the Southern Hemisphere flu season cycle, and we'll be able to share data for that program later this year. So, you did ask whether these programs are prerequisites for certain regulatory discussions. The answer is no for Japan and Europe, and we'll find out for the United States.

With respect to the Monovalent Xb B trial that one is designed to incorporate the southern hemisphere flu season cycle, and we'll be able to share data for that program. Later this year as well. So you did ask whether these programs are.

Prerequisite for certain regulatory discussions are the answer is no for Japan, and Europe, and we'll find out for the United States, but we are collecting it in any case and CSL our partners or our funding. These programs just to strengthen the data.

Joseph E. Payne: But we are collecting it in any case, and CSL, our partners, are funding these programs just to strengthen the data packages for each of these programs and others. Thank you. Correct, yeah, the WHO will be coming out with the updated variant announcement next month in April.

Packages for each of these programs.

And Pat anything to add yeah, just I'll just add one other thing is that you might be aware the current circulating strain that it seems to be a jan one. So so ultimately you know for the fall season, we will be once the platform has been approved we will update it and be ready to supply whatever.

Joseph E. Payne: Subsequent manufacturing runs and distribution will be forthcoming and messaged and guided through official press releases by me. Okay, and then secondly, on the CF program, I know you mentioned you'd be looking at respiratory function data from a safety perspective. I mean, would you obviously look at FEV1 from a safety perspective and then have to report that data anyway? For CF, yeah, we're collecting, you know, standard data. Well, Pat, why don't you address that? Yeah,

And circulating strains is needed correct, yeah. The W. H O will be coming out with the updated variant announcement next month in April.

Subsequent manufacturing runs and in distribution more will be forthcoming and and and message and guided through official press releases by Meiji.

Okay.

Okay, and then secondly, just on the CF program I know you mentioned you'd be looking at respiratory function died off from a safety perspective, I mean would you obviously look at F. A very one from a safety perspective, and then have to report that died or anyway.

Oh for sure for C. F. Yeah, we're collecting stand well pad money you address that yeah. No of course with what we're gonna be collecting a lot of the safety signals and then we're going to be looking at a if either one and in lung clearance index as well.

Padmanabh Chivukula: No, we, of course, we're going to be collecting a lot of safety signals, but then we're going to be looking at FEU1 and lung clearance indexes as well, and, again, just to reiterate, you know, we are going to be recruiting relatively stable patients. There could potentially be no patients involved in the population as well, but this is an all-comer study, so, just so you're aware. Helpful. Thanks very much.

And but but we are again just to reiterate you know.

We are going to be a recruiting.

Relatively a relatively stable patient there there could potentially be the old patients and while it was recorded in the in the population as well, but this is an all comer study. So just so you're aware.

Helpful. Thanks, very much.

Operator: Our next question is from Yanan Hu with Wells Fargo. Please proceed with your question. Oh, great. Thanks for taking our questions. I have a couple for Coach Dave and a couple for the CF program.

Yeah.

Our next question for me on and Hugh with Wells Fargo. Please proceed with your question.

Oh, great. Thanks for taking our questions a couple of for a called coast, Dave and.

A couple of for the CF program I'll close Dave I was wondering how many booster doses were distributed last year.

Joseph E. Payne: Coach Dave, I was wondering how many booster doses were distributed last year and purchased by the Japanese government, and what percentage of that volume is for the three groups of people that you touched upon earlier in the call? And how would you expect that number to change this year? No, it's a good question.

And purchased by the Japan problematic at what percentage of our volume is before the three groups of people that you Pops up earlier on the call. How would you is that that number to change this year.

No. That's a good question first of all I can speak to what's readily available.

Joseph E. Payne: First of all, I can speak to what's readily available. In 2022, over 82 million messenger RNA COVID vaccine boosters were distributed in Japan. That number is not tightly understood for 2023, but it was a significant number, as you can appreciate. For 2024, we now, as we touched on just moments ago, the Japanese government has indicated and communicated the clear recommendation that the elderly get two booster shots a year. And the elderly population is 32 to 36 million in Japan.

In 2020 to over 82 million Messenger RNA Covid vaccine boosters were distributed in Japan.

That number is not tightly understood for 2023.

But it was a significant number as you can appreciate for 'twenty 'twenty four we know as we touched on are.

Just moments ago.

The Japanese government is.

It is indicated and communicated that.

The clear recommendation that the elderly get.

Get to booster shots a year.

And the elderly population is $32 million to $36 million in Japan. So it's a significant number of people and it was very good to hear that.

Joseph E. Payne: So it's a significant number of people, and it was very good to hear that the government of Japan is going to be providing these vaccinations to the elderly free of charge. Speculating how that impacts the market is going to be difficult for me to do; it would be more appropriate for analysts on this call to do that. Thanks for the information. In prior years in Japan, were the average booster doses per person under two? Japan is well known to have a high rate of vaccinations per person. Many would say that they have the highest rate of vaccinations for any country in the world, especially relative to the U.S. and Europe, so they have a high prevalence for getting vaccinated, and the elderly are even higher.

The government of Japan is going to be providing these vaccinations to the elderly frail elderly free of charge.

No.

Speculating what that how that impacts the market as it was going to be difficult for me to do more appropriate for analysts on this call to do that.

Thanks for the information in prior years in Japan.

The average bush too doses per person.

Uncle team.

It Japan is well known to have a high rate of vaccinations per person.

Many would say that they have the highest rate of vaccinations.

For any country in the world.

Especially relative to the U S and Europe. So they have a high prevalence for getting vaccinated in the elderly is even higher so a very high rate of a vaccination, how we project this into 2024.

Joseph E. Payne: So a very high rate of vaccination. How we project this into 2024, I think it's reasonable to expect a very high percentage of these people will fill out these cards that they receive in the mail, and set up times to go to the clinic to get their free vaccination. But what number that is, it would be inappropriate for me to guide you on. Sorry, Joe.

I think it's reasonable to expect a very high percentage of these people will fill out these cards that they receive in the mail setup times to go to the clinic to get their free vaccination, but what number that is a it.

It would be inappropriate for me to guide on.

Sorry go Oh. My question was are the prior recommendation or the default a number boosters are personally get per year is that not twice a year what that once a year.

Joseph E. Payne: My question was, the prior recommendation, or the default number of boosters a person gets per year, is that not twice a year? Or is that once a year? I don't know what the previous recommendation was. All I can comment on is what's clearly communicated on the MHLW website, which is two booster shots annually for everyone over 65. God, okay, thank you. And on the CS program, the Phase 1B portion, those patients, Gob's two administrations of ARCT 032. I was wondering what the interval is between those two administrations.

I don't know what the previous recommendation was all I can comment on is what's clearly communicated on the M. H L. W website, which is <unk> to.

To boosters are annually for everyone over 65 in Japan.

Got it okay. Thank you and all of the T X program. The phase one portion of those patients gods to administration of yeah. He owes me too I was wondering what's the interval between those two kind of integrations and also I think you mentioned on the call.

Joseph E. Payne: And also, I think you mentioned on the call that FEV1 lung clearance measures are being collected, perhaps mostly from a safety standpoint. But the question is, will you be presenting those data at the readout? Thank you.

All of that F. E V. One lock me around these measures are being collected Uh huh.

That's mostly for from a safety standpoint, but the question is will you be presenting those data at the meat out. Thank you.

Joseph E. Payne: Well, the first comment was that the primary purpose of this Phase 1b data is to ascertain safety and tolerability. We will be looking at severe adverse events and also more specifically side effects associated with the lung, as this is a CF program and there's increased sensitivity to lung-related side effects, like coughing, etc. So that's where we're going to be more focused on in terms of externally communicating Phase 1B interim data, severe adverse events and more lung-centric side effects and just summarizing the safety and tolerability across a spectrum, a small spectrum, of a relatively small group of CF patients. The other parameters are secondary or even exploratory in nature.

Well the first comment was the the primary purpose of this phase <unk> data is to ascertain safety and Tolerability.

We will be looking at severe adverse events and also more specifically side effects associated with the lung is this is a C. F program and there's increased sensitivity the lung related side effects.

Coughing et cetera, So that's where we're gonna be more focused on in terms of externally communicating a phase one b interim data as severe adverse events in more long centric side effects and and just summarizing the safety and Tolerability in a spectrum of small spectrum of a relatively small group.

CF patients the other parameters are secondary or even exploratory in nature.

Joseph E. Payne: We're not expecting in a small cohort like this, where many of these people are already on CFTR modulators, that we'll see some efficacy readouts or anything like that. But we definitely will have an opportunity to present that data, the Phase 1B data later this year when we have a better idea of which conference. O'Grady, and the dozing interval.

We're not expecting and in a small cohort like this where many of these people are already on see FTR modulators that we'll see some efficacy readouts or anything like that.

But.

We definitely will have an opportunity to present that data of the phase one data later this year, when we have a better idea which conference.

Yeah.

Oh, great and the dosing interval.

Joseph E. Payne: Thank you. The dosing interval we have not shared publicly because this is a competitive environment. We've made it very clear that these are two administrations. They're inhaled.

Thank you the dosing interval, we have not shared publicly them. This is a competitive environment. We've made it very clear that these are two administrations or inhaled, we haven't disclosed the dose levels. If they're the same or are different and how far apart. They are are.

Joseph E. Payne: We haven't disclosed the dose levels, if they're the same or different, and how far apart they are. We had considerable learnings from the 32 subjects of data and the four cohorts evaluated in phase one. So we wanted to, and we've applied those learnings to the design of this phase 1B trial, and we just wanted to keep those cards close to our chest at this point.

We had considerable learnings from the 32 subjects of data and the four cohorts evaluated in phase one.

So we wanted to and we've applied those learnings to the design of this phase one B trial and we just wanted to keep those cards close to our chest at this time.

Operator: Thank you. Our next question comes from, oh, excuse me. Our next question comes from Yigal Nochomovitz with Citi. Please proceed with your question. Hi, this is Amanan on behalf of Yigal. Thank you for taking our questions. I have two related to cystic fibrosis.

Got it thank you.

Our next question comes from Oh excuse me.

Our next question comes somebody Agal Nacho <unk> with Citi. Please proceed with your question.

Hi, This is on for Yigal. Thank you for taking our questions I have two if I could to cystic fibrosis first on the upcoming C. F Readouts.

Padmanabh Chivukula: First, on the upcoming CF readout. Now, should we expect... if you can clarify, should we expect any data from the Healthy Volunteers there as well? And, except lung capacity and lung function, have you taken bronchiopathy to look at the CFTR expressions there?

She'd be snake, if you can quickly clarify should we expect any data from the healthy volunteers as though and except long capacity out of lung function have you took a high biopsy to look at the E. S. P O expirations yet.

Padmanabh Chivukula: Also, what have you seen so far in the Healthy Volunteers that's suggesting a better tolerability of this drug versus the prior mRNA adversarial? Yes, the CF readout is simply going to be focused on severe adverse events or any sort of... adverse events associated with the lung, like I just mentioned. I don't think we're going to be sharing any outside data from that. With respect to samples being directly taken from the lung pad, do you have a comment there? There's nothing that we're doing, but anything to comment on? No, again, just to reiterate, we haven't seen any SAEs or severe AEs associated with phase 1 or phase 1B to date. Obviously, we're monitoring that closely. In terms of lung biopsies, we are not currently or we're looking at the actual function in patients, so we're not doing that.

Also what have you seen so far in the healthy volunteer that's suggesting that the tolerability of this drug versus the prior year mrna and studies.

Yes.

The yeah. The CF readout is is simply going to be focused on a severe adverse events or any sort of adverse events associated with the long like I. Just mentioned are I don't think we're going to be sharing.

Sharing any outside data from that with respect to <unk>.

Samples being directly taken from the lungs, Pat do you have a comment there there's nothing that we're doing but anything just comments no no again just to reiterate some of the Earth.

We haven't seen any M S ease of CVR as associated with the phase one or phase one b to date and Uh Huh, obviously, we're monitoring that closely.

And in terms of lung biopsies, we yes, we are.

Not currently or we're looking at and the actual function in patients. So we're not doing that.

Joseph E. Payne: With respect to the Phase 1 data, there is a European CF conference in June that we're preparing to present. Okay, got it. That makes sense. And just one quick follow-up on the OTC data that you're going to present soon. What do you need to see there to make a go-no-go decision there?

With respect to the phase one data there is a European CF conference in June that we're preparing to present that.

Okay.

Okay got it that makes sense and just one quick follow up on the OTT you data that youre going to present.

So what do you need to see there to make it go no go no go decision there.

Joseph E. Payne: A go-no-go decision for the Phase 1b readout? For the OTC readout, sorry, yes, we'd like to make sure we maintain safety and tolerability of multiple doses. That's going to be of utmost importance because that's one of the challenges that many... other competitors and people that have tried to do lipid nanoparticle mRNA therapeutics for OTC deficiency have failed in the past due to toxicity, so this is going to be a significant hurdle to jump through, but that would be the primary objective.

A go no go decision for the phase one be read out.

Well the OTC.

Oh for the OTC readout sorry.

Ah, yes, we'd like to make sure we maintain the safety and Tolerability of multiple doses, that's gonna be about most importance because that's one of the challenges that many.

Other competitors in it.

People that have tried to do lipid nanoparticle mrna therapeutics for OTC deficiency have failed in the past due to toxicity. So this is gonna be a significant hurdle to jump through but that would be the primary objective something that we'd be very encouraged by us to show safety and tolerability of multiple.

Joseph E. Payne: Something that we'd be very encouraged by is to show safety and tolerability of multiple treatments in a spectrum of OTC deficient patients. Having said that, do we also want to see some biomarker changes? Absolutely. It is a placebo-controlled trial, so there would be increased confidence in these readouts as long as we have sufficient numbers. We would be looking for that sort of detail as well to give us confidence going to the next trial. Okay.

Treatments in a you know a spectrum of of OTC deficient patients, having said that do we also want to see some biomarker changes absolutely. It is a placebo controlled trial. So there would be increased confidence in these readouts as long as we have sufficient numbers, we would be looking for you know for that sort of detail as well to give.

As confidence going to the next step.

Okay got it great. Thank you very much we're taking our questions.

Operator: Great. Thank you. Our next question comes from Pete Stavropoulos with Cantor Fitzgerald. Please proceed with your question. Hi Joe, Andy.

Thank you.

Our next question comes from Pete <unk> tried to pulse with Cantor Fitzgerald. Please proceed with your question.

Hi, Joe and Andy So it's just a question about a couch can you leverage that facility for other pipeline candidates and perhaps the distribution outside of Japan, and if not already I don't know if you've mentioned it or if I missed it you know when do you expect the facility to be operational and what would be the.

Andrew H. Sassine: So, just a question about Arcalis. Can you leverage that facility for other pipeline candidates and perhaps distribution outside of Japan? And if not already, I don't know if you mentioned it or if I missed it, when do you expect the facility to be operational and what will be the manufacturing process? Andy, do you want to grab that?

Manufacturing capacity.

Yeah.

Andy do you want to grab that.

Andrew H. Sassine: Yeah, sure. Thanks, Pete. Yeah, we, you know, we kind of highlighted the timeline for Arcalis in terms of drug substance. You know, they're currently in production right now and are getting GMP qualified. So that is pretty exciting. And there'll be some news coming out of them to, you know, update you on the status of what they're doing. And, and are they going to be participating, you know, in the orders from Japan, you know, for this year? So those are all the things you want to, you know, listen for carefully. And obviously, the drug product is going to be online probably later this year or early next year. And then the plasma business should be online within a couple years.

Yeah sure. Thanks, Pete Yeah. We you know, we we've kind of highlighted that the timeline for a color in terms of drug substance you know.

They're currently in production right now in and getting GMP qualified so that is pretty exciting and there'll be some news coming out of them too.

The status of what they're doing and are they going to be participating you know it and the.

Orders from Japan, you know for this year. So those are all the things you want to you know listen more carefully and obviously the drug product is gonna be online probably either later on this year early next year and then the plasma business should be on within a couple of years, though within you know two and a half year they should be.

Andrew H. Sassine: So within, you know, two and a half years, they should be vertically completely integrated. But in the meantime, you know, we can certainly fill the void with our global CDMO partners, such as Catalan in the United States and Aldebaran and Reci Farm in Polynesia in Europe. So we have a really strong core of partners to help us fill the void until Arcalis is able to get up to speed. Obviously, if they can make up to a billion doses, CSL and MAGIE have, you know, certainly a lot of opportunity to determine whether it's going to be a chance to export the vaccine to other countries. And so that'll be a decision that will be made by, you know, certainly CSL and MAGIE with respect to Japan. Hopefully, that helps. Yes, it does.

Vertically completely integrated but in the meantime, you know we can certainly fill the void.

With our global partner in terms of catalysts in the United States and Aldebaran and rescue farm in polystyrene in Europe. So we have a really strong core well you know our partners to help us fill the void.

Were you know until our catalog who's able to get up to speed, obviously, if they can make up to 1 billion doses.

P. S. O in May do you have you know certainly a lot of opportunity to you know determine whether you.

You know, it's gonna be a you know a chance or you know exports you know go back seat to other countries. So that'll be a decision that will be made by you know certainly P. S O N.

With respect to Japan, hopefully that helps yes. It does thank you and so a question on the on the CF program. So you have two doses I'm just curious on the on the perspective, you know how much do two doses actually be Derisked I guess from a safety perspective.

Padmanabh Chivukula: Thank you. And so a question on the CF program, you know, so you're having two doses. Just curious on the perspective of, you know, how much do two doses actually de-risk, I guess, from a safety perspective? Drugs, that's one question.

Padmanabh Chivukula: And the other one is, you know, any learnings from the Cystic Fibrosis Program that you can potentially develop an inhaled vaccine for a respiratory virus, either alone or in partnership? Yeah, good follow-on questions there, Pete, with respect to the... Do you want to address those questions? Yeah, sure. In terms of CF, you know, the safety, you know, what we really want to see is even with the single or two doses, we want to make sure that there are no respiratory side effects like, you know, coughing, chest discomfort, et cetera.

Drugs, if that's one question and the other one is you know any learnings from the cystic fibrosis program. You know that you can potentially develop and enhance vaccine due to respiratory virus either alone or in partnership with O C. S. L.

Yeah, Yeah, good follow on questions there Pete it with respect to the Uh Huh.

Do you want to address those questions.

In terms of C. As you know the safety you know what we really want to see is even though it's a single or two doses, we want to make sure that there's no respiratory side effects like Yokohama coughing chest discomfort etcetera, and we also want to look at some you know some secondary safety and clients like fever for examples right. So I think we can tell all of those things.

Padmanabh Chivukula: We also want to look at, you know, some secondary safety endpoints like fever, for example, right? So I think we can tell all of those things from just two doses. So we're looking forward to collecting that data. And the reason why this is significant, too, is that our internal team has been doing inhaled therapeutics for decades. They do have a lot of experience here.

From just two doses. So we're looking forward to collecting that data and the reason why this is significant to US you know our internal team has been doing inhaled therapeutics for decades they.

They do have a lot of experience here and what they've shared with US is that if you do see challenges or problems and toxicology with inhaled therapeutics in the first two administrations. So if we get through this trial successfully the probability of success for this trial is meaningfully moved moved up and so that's why this.

Padmanabh Chivukula: And what they've shared with us is that if you do see challenges or problems in toxicology with inhaled therapeutics, they occur in the first two administrations. So if we get through this trial successfully, the probability of success for this trial is meaningfully increased. And so, you know, that's why this is important. And in the second part of the question, you know, if the data is positive, what will it mean for the platform? I mean, obviously, if the data is positive and we do get proof of concept, you know, we will, you know, potentially expanding the, you know, and thinking about other rare diseases or other diseases that need nebulization. But also, this platform, of course, can be applied as a potential vaccine. Thank you for taking my question. Thanks, Pete.

This is important and it is in the second part of your question you know well if the data is positive what will it mean for the platform I mean, obviously, our if the data is positive and maybe we do get proof of concept you know well, we will expanding potentially the you know I'm thinking about other respiratory or other rare diseases.

Or other diseases.

Nebulous vision.

But also this platform of course can be applied and has potentially a vaccine as well.

Alright, Thank you for taking my questions.

Thanks Pete.

Operator: Our next question is from Ed Arce with H.C. Wainwright. Please proceed with your question. Hi, good afternoon, everyone.

Our next question is from Ed Arce with H C. Wainwright. Please proceed with your question.

Hi, Good afternoon, everyone. This is Thomas Yip asking a couple questions for Ed. Thank you.

Operator: This is Thomas Yip asking a couple of questions for Ed. Thank you for taking our questions. So, first question regarding CodeSafe 0154.

Taking my questions.

So first question regarding costs. They went back for so wasn't approved in Japan, and I believe that Andy mentioned that a regulatory decision.

Joseph E. Payne: So was there proof in Japan, and I believe Andy mentioned that regulatory decisions are expected from Europe this year. Are there any plans by either, you know, from the purists or from CSL or Meiji, any other plans to expand into additional territories? Yes, Europe is, we're intending to get that approved this year and also the United Kingdom shortly thereafter. After that, the next big market, of course, is the United States. CSL will be driving that regulatory effort, and they'll be providing guidance as to when that's going to be filed and approved. But what we can say at this point is we expect first approvals in Europe and then the UK and then the United States. Elizabeth, thank you.

Yeah.

Hum in Europe. This year are there any plans by either.

You know Oh.

Two risks or yeah. So.

And any other plans to expand into additional territories.

Yes, Yeah, Yeah Europe as it is we're intending on getting that approved this year and and also the United Kingdom. Shortly thereafter.

After that the next big market of course is the United States CSL will be driving that those regulatory efforts.

And there'll be providing guidance as to when that's going to be filed and approved but it's what we can say at this point is we expect first approvals in Europe, and then U K and then the United States.

Yeah.

And that's it. Thank you and then and then perhaps one question or.

Joseph E. Payne: And then, and then perhaps one question for: We recall in the past, for the Phase II study in Europe, enrollment was slightly delayed. Can you briefly discuss, you know, how the study is enrolling so far? Yeah, we provided guidance that we remain on track for the end of Q2. And, you know, the status of that program, with respect to some interim data readouts, is at the end of Q2. Okay, got it. And then, and then, perhaps one final question. This one's for Andy.

Oh, yes and OTC.

Right.

You will recall that in the past for the phase two study in Europe.

And Roman what's a slightly delayed can you.

Discuss with me Oh.

The study enrolled so far.

Study.

Yeah. That's yeah, we provided guidance that we remain on track for the end of Q2.

And you know that's the status of that that program.

With respect to some in terms of interim data readout is at the end of Q2.

Okay got it and then and then perhaps one final question this one's for NV, our cash runway.

Andrew H. Sassine: Cache runway. Does it include any projected revenue from ecostate in Japan or now perhaps 154 in Europe as well? No, thanks for asking that question. The guidance for the three-year cash runway, at least, did not include any revenues from CoState and did not include any commercial milestones from CSL.

That's what they're does it include any projected revenue from.

I'll say, it in Japan, or not perhaps what type or in Europe as well.

No. Thanks for asking that question on the guidance.

For the three your cash runway at least.

Not include any revenues from coast days and did not include any commercial milestones from see yourselves. So as soon as you know we're able to discuss those will we'll update the guidance with respect to you know the cash runway and so.

Andrew H. Sassine: So, as soon as we're able to discuss those, we'll update the guidance with respect to the cash runway. And so, hopefully, we will be able to do that soon, but at this point in time, we certainly have a long enough runway to be able to achieve a number of milestones this year, which are very critical to the opportunity to expand the pipeline within the company. So, we're pretty excited and certainly have the resources to be able to address the CF opportunity and the OTC opportunity. And now we're going to be launching two additional vaccines and hopefully be able to see some progress in that in the next few years. So, a pretty exciting year with respect to a number of milestones that are going to be forthcoming and, hopefully, will be able to enhance shareholder value. And that's it.

Hopefully you know, we will it'll be able to.

Do that soon but at this point in time you know we.

Certainly have a long enough runway to be able to achieve a number of milestones. This year, which are very critical to there'll be opportunity to expand the pipeline within the company. So we're pretty excited and certainly have the resources to be able to address to see up opportunity in the OTC opportunity in.

And now we're gonna be launching two additional back.

And hopefully be able to do something.

Progress in that in the next few years, so pretty exciting year with respect to a number of milestones that are all going to be forthcoming.

Hopefully be.

To be able to enhance shareholder value.

Understood.

Operator: Thank you again for the kind of questions. Thank you. Our next question is from Yale Gen with Laidlaw and Company. Please proceed with your question. In terms of Japan's COVID-19 lockdown, is that still mostly government, or is that also whether there's also a commercial aspect to evolve maybe this year or in the, How are you guys? That's a good question.

Again for taking my questions.

Yeah.

Thank you.

Our next question is from Yale Jen with Laidlaw <unk> Company. Please proceed with your question.

Thanks for taking the question.

In terms of Japan Kobe market.

Is that still mostly government or is that what are the commercial aspect.

Two to your ball, maybe in this year or in the future how do you guys see.

Well that's a good question.

Andrew H. Sassine: Okay. Yeah. You know, I mean, the good news, Yale, is that the government has, you know, given kind of guidance for, you know, what they're going to support, right? And so, if you look at just the population of people over 65, that's pretty substantial, 32 to 36 million people, right? And then that doesn't include, you know, people that are, you know, immunocompromised or have, you know, chronic illnesses, right?

Okay. Yeah, Yeah, you know I mean, the good news is that.

You know the government has you know.

Given kind of a guidance for you know what theyre going to support right and so if you look at just the population of the people over 65, that's pretty substantial 32 to 36 million people right and then that doesn't include you know people that are you know you know compromise or what have you know chronic illnesses.

Andrew H. Sassine: That certainly are going to be in a position to want to be vaccinated as well. So, when you look at that, you know, that's a pretty significant part of the population, at least 30 to 40, maybe 50 percent of 125 million people. So, that's quite substantial, right?

But that certainly are going to be in a position to wanna be vaccinated as well. So when you look at that you know that's a pretty significant part of the population at least you know something in the 30 to 40, maybe 50% or 125 million people. So that's quite substantial right and so it's we're very excited.

Andrew H. Sassine: And so, you know, we're very excited about the opportunity, and it's not trivial. And remember, it's going to be a Meiji vaccine made in Japan. So, there's a lot that I think the government is very proud of, and Meiji is very proud of.

Lighted about the opportunity and it is not trivial.

And remember it's gonna be a major vaccine made in Japan. So so there's a lot you know that I think the government is very proud of and that made us very proud of yourselves certainly.

Joseph E. Payne: CSL certainly is, you know, excited to be supporting this program and launching it, you know, globally now. So there's a lot of good news behind it in terms of, you know, what is going to be private pay versus government pay. Maybe we'll make all those announcements when the time is right. But, you know, it's something that we're not really concerned about at this point. Yeah, and the only thing I would add to that is that Meiji has a strong track record of working with the government to help with these subsidized vaccines in the flu space.

You know I'm excited be supporting this program and.

And launching it globally now so.

There's a lot of good news behind it in terms of you know what it's gonna be private pay versus government pay you know made you will make all of those are announced.

Announcements when the time is right.

Right.

Something that where we're not really concerned about at this point.

Yeah, and the only thing I would add to that is that major has a strong track record with working with the government to help with these subsidized vaccines in the flu space. So they've been doing this for years and we're working with the ideal partner that's done this before.

Joseph E. Payne: So they've been doing this for years, and we're working with the ideal partner that has done this before. I would now like to turn the call back over to Joe Payne for closing comments. Yeah, thanks everyone for participating on the call. And if there's any remaining questions, don't hesitate, as always, to reach out to the team. We'll get back to you as soon as we can. All right, thanks everyone. Good night. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Alright, we have we have reached the end of the question and answer session I would now like to turn the call back over to Joe Payne for closing comments.

Yeah, Thanks, everyone for participating on the call and if theres any remaining questions don't hesitate as always to reach out to the team will get back to you as soon as we can alright, thanks, everyone Tonight.

This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.