Q1 2024 Arcturus Therapeutics Holdings Inc Earnings Call
Okay.
Operator: Good afternoon, ladies and gentlemen, and welcome to the Arcturus Therapeutics first quarter 2024 earnings call. At this time, all lines are in listen-only mode.
Speaker Change: Good afternoon, ladies and gentlemen, and welcome to the Arcturus Therapeutics first quarter 2024 earnings call.
Speaker Change: At this time all lines are in listen only mode. Following the presentation, we will conduct a question and answer session.
Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, May 8, 2024. I would now like to turn the conference over to Neda Safarzadeh, Vice President, Head of Investor Relations, Public Relations, and Marketing, Arcturus Therapeutics. Please go ahead.
If at any time during this call you require to redo the assistance. Please press star zero for the operator. This call is being recorded on Wednesday may eight 2024.
Nevada: I would now like to turn the conference over to Nevada. So first Veda, Vice President head of Investor Relations Public relations and marketing of Arcturus Therapeutics. Please go ahead.
Neda Safarzadeh: Thank you, operator. 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. Pad Chivukula, our CSO and COO, will join them for the Q&A session.
Nevada: Thank you operator, good afternoon, and welcome to Arcturus Therapeutics quarterly financial updates and pipeline progress call too.
Nevada: Today's call will be led by Joe <unk>, our president and CEO and Andy Sassine our CFO.
Neda Safarzadeh: Dr. Apache Nicola our CSO as CFO will join them for the Q&A session.
Neda Safarzadeh: 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.
Veda: 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 $19 95.
Nevada: These 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.
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 Arcturus specifically disclaims any obligation to update such statements.
Nevada: 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.
Nevada: In addition, any forward looking statements represent our views only as of today such statements are made.
Nevada: Specifically disclaims any obligation to update such statements and with that I will now turn the call over to Jeff.
Neda Safarzadeh: And with that, I will now turn the call over to Joe.
Joseph E. Payne: Thank you, Neda. It's good to be with you again, everybody. I will begin my remarks with an update on progress regarding our COVID-19 vaccine program. We are excited to initiate the commercial manufacturing effort for CoStave to support the upcoming fall and winter vaccination seasons in Japan. We're pleased to report that we remain on track to deliver the initial four million doses to Japan in the third quarter of this year. Our partner, MAGIE, intends to then distribute the CO-STAY vaccine throughout the upcoming fall and winter season.
Jeff: Thank you Nader, it's good to be with you again, everybody I will begin my remarks with an update on progress regarding our COVID-19 vaccine program.
Jeff: We are excited to initiate the commercial manufacturing effort for coast, Dave to support the upcoming fall and winter vaccination season in Japan.
Jeff: We're pleased to report that we remain on track to deliver the initial 4 million doses to Japan in the third quarter of this year.
Jeff: Our partner Meiji intends to then distribute the coast day vaccine throughout the upcoming fall and winter season.
Joseph E. Payne: In March, the company, along with our partner, CSL, and their partner, Meiji Seika Pharma, announced that our bivalent COVID-19 vaccine candidate, ARCT2301, met the primary endpoint of non-inferiority in a phase 3 clinical study in Japan with 930 healthy adults who had previously received 3 to 5 doses of the mRNA COVID-19 vaccine. We were pleased to see, yet again, a superior immunogenicity and neutralizing antibody response of bivalent ARCT2301 to a bivalent conventional mRNA comparator and that this was confirmed for both the Omicron BA4-5 and Wuhan strain. There were no causally associated serious adverse events with ARCT-2301.
Jeff: In March the company, along with our partner CSL and their partner Meiji sake of pharma.
Nevada: <unk> to debt are bivalent COVID-19 vaccine candidate <unk> 2301 met the primary endpoint of non inferiority in a phase III clinical study in Japan with 930 healthy adults, who previously received three to five doses of mrna COVID-19 vaccines.
Joseph E. Payne: We were pleased to see yet again, a superior immunogenicity and neutralizing antibody response.
Joseph E. Payne: <unk> <unk> 23012, a bivalent conventional mrna comparator.
Nevada: And that this was confirmed for both the alma crime FBA four slash five and Wuhan strains.
Nevada: There were no causally associated serious adverse events with <unk> 301.
Joseph E. Payne: Arcturus, along with CSL, also initiated a phase 3 study with the monovalent ARCT2303 candidate vaccine containing the Omicron XBB1.5 variant. The purpose of this study is to generate additional immunogenicity and safety data for our platform in multiple ethnicities to support product licensure in the United States. The study will also assess the co-administration of ARCT-2303 with the age-appropriate seasonal influenza vaccine. Approximately 1,680 young and older adults are planned to be recruited in this study in multiple countries in the Southern Hemisphere.
Nevada: Arcturus along with CSL also initiated a phase III study with the model being linked to <unk> 2303 candidate vaccine containing the Omicron X P. B 1.5.
Nevada: <unk> experience.
Nevada: The purpose of this study is to generate.
Nevada: Additional immunogenicity and safety data for our platform in multiple ethnicities to support product licensure in the United States.
Nevada: The study will also assess the co administration of <unk> 2303, with the age appropriate seasonal influenza vaccines.
Nevada: Approximately 1680 young and older adults are planned to be recruited in the study throughout multiple countries in the southern hemisphere.
Joseph E. Payne: Our ongoing Phase 3 vaccine studies showcase the consistent superiority, breadth, and durability of the Arcturus STAR vaccine platform. We continue to make progress in expanding the global CoStave franchise. As reported previously, we filed a marketing authorization application for CoStave with the European Medicines Agency, or EMA. The iterative regulatory process continues to advance, with the European Commission expected to provide an approval decision in the third quarter of this year.
Nevada: Our ongoing phase III vaccine studies showcase the consistent superiority breath and durability of the Arcturus Starr vaccine platform.
Nevada: We continue to make progress in expanding the global co state franchise as reported previously we filed a marketing authorization application for co Steve to the European Medicines Agency.
Nevada: EMA.
Nevada: The iterative regulatory process continues to advance with the European Commission expected to provide an approval decision in the third quarter of this year.
Joseph E. Payne: Moving to ARCT 2138. The ARCT 2138 program, or the Quadrivalent Seasonal Influenza Vaccine Program, through our partner CSL, is progressing well. As of May 1, 2024,
Joseph E. Payne: Moving to <unk> three eight.
Joseph E. Payne: The <unk> three eight program or the quadrivalent seasonal influenza vaccine program through our partner CSL is progressing well as of May one 2024.
Joseph E. Payne: 84 healthy young adults were recruited in the Phase 1 dose-finding and immunogenicity study and received one of four dose levels of the study vaccine or a licensed influenza vaccine. The recruitment of older adults is ongoing, and the company anticipates delivering phase 1 top line immunogenicity and safety data in the third quarter of this year. It is important to emphasize that this flu study will also help us understand how high we can successfully dose self-amplifying mRNA in the multivalent vaccine set. I'll now move on to our ARCT 810 program. This is our messenger RNA therapeutic candidate for ornithine transcarbamylase (OTC) deficiency.
Joseph E. Payne: 84 healthy young adults were recruited in the phase one dose finding an immunogenicity study and received one four dose levels of the study vaccine or a licensed influenza vaccine.
Joseph E. Payne: The recruitment of older adults is ongoing and the company anticipates phase one topline immunogenicity and safety data in the third quarter of this year.
Nevada: It is important to emphasize that this flu study will also help us understand how high we can successfully dose self amplifying mrna in the multi valent vaccine setting.
Joseph E. Payne: In April, the company presented phase one single ascending dose studies for ARCT810 at the Society for Inherited Metabolic Diseases annual conference. The ARCT 810 Phase 1 Single Ascending Dose Study enrolled 30 adults, randomized 2 to 1, to receive 0.1, 0.2, 0.3, or 0.4 mg per kilogram dose or placebo as an intravenous infusion. The Phase 1b SAD Study enrolled 16 adults with mild OTC deficiency, and they were randomized 3 to 1 to receive single doses of 0.2, 0.3, 0.4, or 0.5 mix per kilogram or placebo administered by intravenous infusion.
Joseph E. Payne: I'll now move on to our a RCT a 10 program. This is our messenger RNA therapeutic candidate for ornithine, <unk> or OTC deficiency.
Joseph E. Payne: The results show that ARCT 810 was generally well tolerated, with no serious or severe adverse events occurring in both. The encouraging results from ARCT 810 Phase 1 and Phase 1b studies facilitated the initiation of a Phase 2 multiple ascending dose study in adolescents and adults with OTC deficiency, which is ongoing in the United Kingdom and the European Union. Subjects are randomized in this study to receive six doses every two weeks of ARCT 810 or placebo-randomized 3 to 1.
Nevada: In April the company presented phase one single ascending dose studies for <unk> 10 at the society for inherited metabolic diseases annual conference.
Nevada: The <unk> 10 phase one single ascending dose study enrolled 30 adults randomized two to one to receive 0.1, 0.2, 0.3 or four mix per kilogram dose or placebo as an intravenous <unk>.
Joseph E. Payne: Infusion.
Joseph E. Payne: The phase one B SaaS study enrolled 16 adults with mild OTC deficiency.
Nevada: And that was randomized three to one to receive single doses of 0.2, 0.3, 0.4 or five weeks per kilogram or placebo administered by intravenous infusion the.
Nevada: The results showed that <unk> was generally well tolerated with no serious or severe adverse events in both studies.
Nevada: The encouraging results from <unk> phase, one and phase <unk> studies facilitated the initiation of a phase III multiple ascending dose study in adolescents and adults with OTC deficiency, which is ongoing in the United Kingdom in the European Union.
Nevada: Subjects are randomized in this study to receive six doses every two weeks of <unk> or placebo randomized three to one.
Joseph E. Payne: Moving now to our ARCT032 program. ARCT032 is our flagship inhaled messenger RNA therapeutic candidate for cystic fibrosis and is formulated with Arcturus' lunar delivery technology. The company is presently conducting a Phase 1B clinical study in New Zealand designed to enroll six to eight adults with cystic fibrosis, with each participant receiving two inhaled administrations of ARCT 032. We will be providing an interim data and progress update for both of our flagship mRNA therapeutic programs, that is, ARCT 810 for OTC deficiency and ARCT 032 for cystic fibrosis, on Monday, July 1s And with that, I'll now pass the call to Andy.
Nevada: Moving now to our <unk> 32 program <unk> 32 is our flagship inhaled messenger RNA therapeutic candidate for cystic fibrosis and is formulated with Arcturus has lunar delivery technology the.
Andy: The company is presently conducting a phase <unk> clinical study in New Zealand designed to enroll six to eight adults with cystic fibrosis with each participant receiving two inhaled administrations of <unk> 32.
Nevada: We will be providing an interim data and progress update for both of our flagship mrna therapeutic programs. That's <unk> 10 for OTC deficiency, and <unk> 32 for cystic fibrosis on Monday July 1st.
Nevada: And with that I'll now pass the call to Andy.
Andrew H. Sassine: Thank you, Joe, and good afternoon, everyone. The press release issued earlier today includes financial statements for the first quarter ended March 31st, 2024, and provides a summary and analysis of year-over-year financial results. Please also refer to our most recent Form 10-Q for more details on financial performance. We are very pleased to initiate the commercialization of CoStave this year. And as Joe mentioned, the initial four million doses are planned to be delivered to Japan in the third quarter of this year.
Andrew H. Sassine: Thank you Joe and good afternoon, everyone.
Andrew H. Sassine: <unk> released issued earlier today includes financial statements for the first quarter ended March 31 2024.
Andrew H. Sassine: <unk> provides a summary and analysis of year over year financial results.
Andrew H. Sassine: Please also reference our most recent Form 10-Q for more details on the financial performance.
Andrew H. Sassine: We are very pleased to initiate the commercialization of coast day, this year and as Joe mentioned, the initial 4 million doses is planned to be delivered to Japan in the third quarter of this year.
Andrew H. Sassine: As a reminder, Meiji Seika Pharma has an agreement with CSL Seqirus whereby Meiji will be responsible for the regulatory approval, marketing, distribution, and sales of CoStave in Japan, as well as coordinating the manufacturing of COVID vaccine products with CSL and Arcturus for the Japanese market. The delivery and sales of the vaccine in Japan will trigger our first commercial milestone payment under our CSL collaboration. This is a remarkable achievement since we signed the CSL agreement less than 18 months ago.
Andrew H. Sassine: As a reminder, the GSA pharma has an agreement with CSL peers, whereby <unk> will be responsible for the regulatory approval marketing distribution and the sales of <unk> in Japan.
Andrew H. Sassine: As well as coordinating the manufacturing of Kobe, Covid vaccine product, which CSL and arcturus for the Japanese market.
Andrew H. Sassine: The delivery and sales of the vaccine in Japan will trigger our first commercial milestone payment under our CSL collaboration.
Nevada: This is a remarkable achievement since we signed the CSL agreement less than 18 months ago.
Nevada: We will provide more color on the project initial milestones and the impact from the coast Dave revenues in the fourth quarter of this year.
Andrew H. Sassine: We will provide more color on the project's initial milestone and Impact from Co-State Revenues in the fourth quarter of this year. As a reminder, our projected cash runway does not include any revenues from costate or commercial milestones from DSL collaboration.
Andrew H. Sassine: As a reminder, our projected cash runway does not include any revenues from coast State, we're nowhere commercial milestone from ESL collaboration.
Andrew H. Sassine: I am pleased to announce the engagement of the J.P. Morgan Investment Banking Team to help us monetize our investment in Arcalis, a 38% owned JV in Japan with partner Axelede. At this point in time, Arcturus is strategically focused on working with a global group of established CDMOs to support our manufacturing efforts across all of our wholly owned pipeline programs. Arcalis, located in a strategic biomedical research and development hub in Japan, is poised to become a key player in the global mRNA drug manufacturing landscape.
Nevada: I am pleased to announce the engagement of J P. Morgan investment banking team.
Nevada: To help us monetize our investment in our countless.
Nevada: 38% owned JV in Japan with partner Axa lead.
Nevada: At this point in time, our tours is strategically focused on working with a global group of established C. E. D. M O to support our manufacturing efforts across all of our wholly owned pipeline programs.
Nevada: Our Calais located in a strategic biomedical research and development hub in Japan.
Nevada: Point to become a key player in the global mrna drug manufacturing landscape.
Andrew H. Sassine: The CDMO is designed to support the production of mRNA vaccines as well as our mRNA-based therapeutics and has already completed the construction of a state-of-the-art mRNA drug substance manufacturing facility. To date, $165 million has been awarded to Arcalis by the Japanese government. These funds were used to build mRNA drug substance and formulated drug product capabilities and to construct a DNA template manufacturing facility. We expect this facility to become a leading manufacturer of mRNA vaccines and therapeutics and the only fully integrated self-amplified mRNA facility in the world.
Nevada: The C. D. M. O is designed to support the production of mrna vaccine as well as our mrna based therapeutics and has already completed the construction of the speed of the yard mrna drug substance manufacturing facility.
Nevada: To date $165 million has been awarded to <unk> by the Japanese government.
Nevada: These funds were used to build them on a drug substance formulated drug product capability.
Andrew H. Sassine: And to construct a DNA template manufacturing facility.
Nevada: We expect this facility to become a leading manufacturer of mrna vaccines and therapeutics and the only fully integrated self amplified mrna facility in the world.
Andrew H. Sassine: I will now summarize our financial results for the first quarter of 2024 compared to the fourth quarter ended December 31st, 2023. Please refer to the press release in our 10-Q for a year-over-year financial comparison analysis. Our primary source of revenue was from license fees, consulting, and related technology transfer fees, reservation fees, government grants, and collaborative payments received from research and development agreements with pharmaceutical and biotechnology partners. For the three months ended March 31st, 2024, we reported revenues of $38 million compared with $30.9 million for the three months ended December 31st, 2023. The sequential increase in revenue was primarily driven by increased activities across all of our CFL programs, including preparation for the commercialization of CoState. However, BARDA grant revenues of $5.4 million remain relatively consistent.
Speaker Change: I will now summarize our financial results for the first quarter of 2024 compared to the fourth quarter ended December 31 2023.
Andrew H. Sassine: Please refer to the press release and our 10-Q.
Speaker Change: The year over year financial comparison analysis.
Speaker Change: Our primary source of revenue from license fees consulting and related technology transfer fees.
Speaker Change: Duration fee government grants and collaborative payments received from research and development agreement with pharmaceutical and biotechnology partners.
Speaker Change: For the three months ended March 31, 2024, we reported revenues of $38 million compared with $30 9 million for the three months ended December 31 2023.
Speaker Change: The sequential increase in revenue was primarily driven by increased activities across all of our CSL program, including preparation for the commercialization of <unk>.
Speaker Change: The BARDA grant revenues of $5 4 million remained relatively consistent sequentially.
Andrew H. Sassine: Total operating expenses for the three months ended March 31st, 2024 were 68.4 million compared with 49.1 million for the three months under December 31st, 2023. The sequential increase was primarily related to an increase in R&D expenditure. Research and development expenses were $53.6 million for the three months ended March 31st, 2024, compared to $36.6 million for the December quarter. The increase in research and development expenses was primarily driven by the CSL and BARDA programs as well as our internal OTC and Cystic Fibrosis Program. Additionally, we have increased investments in early stage and discovery technologies. The company initiated preclinical research related to its Lyme disease and gonorrhea vaccine discovery program.
Speaker Change: Total operating expenses for the three months ended March 31 2024.
Speaker Change: $68 4 million compared with $49 1 million for the three months ended December 31 2023.
Speaker Change: The sequential increase was primarily related to the increase in R&D expense.
Andrew H. Sassine: The increase of $17 million in research and development expenses is broken out as follows: $4.3 million for multiple CSL flu programs. $4.7 million for the Meiji commercial production, and $4.7 million for the Next Generation Program. The remaining $3 million was related to increased compensation-related expenses. For the three months ended March 31st, 2024, Arcturus reported a net loss of approximately $26.8 million, or $1 per diluted share, compared with a net loss of $11.7 million, or $0.44 per diluted share, for the three months ended December 31st, 2023.
Speaker Change: Research and development expenses were $53 6 million for the three months ended March 31, 2024, compared to $36 6 million for the December quarter.
Speaker Change: The increase in research and development expenses were primarily driven by the CSL and BARDA program as well as our internal OTC in cystic fibrosis program.
Andrew H. Sassine: Additionally, we have increased investments in early stage and discovery technology.
Speaker Change: The company initiated preclinical research related to its Lyme disease, and gonorrhea vaccine discovery programs.
Speaker Change: The increase of $17 million in research and development expenses are broken out as follows.
Speaker Change: $3 million from multiple CSL flu program.
Speaker Change: $4 7 million for the major commercial production expenses.
Speaker Change: And $4 7 million for the next generation program.
Speaker Change: The remaining $3 million was related to increased compensation related expenses.
Speaker Change: For the three months ended March 31, 2020 for tourists recorded a net loss of approximately $26 8 million or $1 per diluted share.
Speaker Change: Compared with a net loss of $11 7 million or 44 cents per diluted share in the three months ended December 31 2023.
Andrew H. Sassine: Cash, cash equivalents, and restricted cash were $345.3 million as of March 31st, 2024 and $348.9 million on December 31st, 2023. We have achieved a total of approximately $420.1 million in Upfront Payments and Milestones from CSL as of March 31, 2024. We expect to continue to receive future milestone payments from CSL that will support the ongoing development of the COVID and flu programs, as well as three additional vaccine programs by CSL. The expected cash runway extends at least three years based on the current pipeline and programs.
Andrew H. Sassine: Cash cash equivalents and restricted cash.
Speaker Change: $345 3 million as of March 31, 2024 and.
Andrew H. Sassine: $348 9 million on December 31, 2023.
Speaker Change: We have achieved a total of approximately $421 million and up.
Speaker Change: Front payments and milestone from CSL as of March 31, 2024.
Speaker Change: We expect to continue to receive future milestone payment from CSL.
Speaker Change: Will support the ongoing development of the Covid and flu program and.
Speaker Change: Three additional vaccine program by CSL.
Speaker Change: The expected cash runway extends at least three years based on the current pipeline and program.
Andrew H. Sassine: 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 Program. Furthermore, with the anticipated delivery of the COSTA vaccine later this year in Japan. We look forward to beginning to report potential commercial sales in 2024. I will now pass the call back to Joe. Thanks, Andy. We've continued to make excellent progress in our pipeline of mRNA vaccines and therapeutics and advanced our proprietary mRNA and lunar delivery platform technology. We're excited, indeed, about the initiation of our commercialization process for COSI. And with that, we'd like to turn the time over to the operator for questions.
Andrew H. Sassine: In summary, we believe the company remains in a strong financial position.
Joe: And has the resources to achieve multiple near term value creating milestones.
Andrew H. Sassine: For the vaccine and therapeutic program.
Speaker Change: Furthermore, with the anticipated delivery of coast, Dave vaccine later this year in Japan.
Speaker Change: Look forward to beginning to report potential commercial sales in 2024.
Speaker Change: I will now pass the call back to Joe.
Joseph E. Payne: Thanks Andy. We've continued to make excellent progress in our pipeline of mRNA vaccines and therapeutics and advanced our proprietary mRNA and lunar delivery platform technologies. We're excited, indeed, about the initiation of our commercialization process for Costa. And with that, we'd like to turn the time over to the operator for questions.
Joe: Thanks, Andy we've continued to make excellent progress in our pipeline of mrna vaccines and therapeutics and advanced our proprietary mrna and lunar delivery platform technologies.
Joe: Excited indeed about the initiation of our commercialization process for coast Dave.
Joe: And with that I'd like to turn the time over to the operator for questions.
Operator: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the number on your touchtone phone. You will hear a three-tone prompt acknowledging your request. And your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by 2. If you are using a speakerphone, please lift your handset before pressing any keys. One moment, please for your first question. Your first question comes from... Myles, I'm sorry, Evan Wang with Guggenheim Partners. Your line is now open.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone.
Speaker Change: Here are three Tom Paul acknowledging a request.
Boran Wang: And your questions will be pulled in the order. They are received should you wish to decline from the polling process. Please press star followed by the two if you are using a speaker phone. Please lift your handset before pressing any keys one moment. Please for your first question. Your first question comes from.
Operator: Myles I'm, sorry, Evan Wang with Guggenheim Partners. Your line is now.
Boran Wang: Great. Thanks. Two from May. First, with the therapeutics update on July 1st, with the date set now, hoping you can help set some expectations for the number of OTC and CF patients that we'll see and whether you're confident that this will be a sufficient number of patients and time cores to really interpret. Second, you know, can you walk us through the rationale for the Meiji monetization of Arcalis, just given, you know, the strong cash position? Thanks.
Boran Wang: Great. Thanks, two if I may 1st with a therapeutics update on July one.
Boran Wang: The date set now hoping you'd help set some expectations for.
Boran Wang: A number of <unk> patients that we'll see and whether you're confident that this will be sufficient number of patients and time course.
Speaker Change: Yes, it really interpret.
Speaker Change: And second can you walk us through the rationale for the Navy monetization.
Boran Wang: Of our calix, just given the strong cash position.
Joseph E. Payne: Hey, thanks, Evan, for the questions. With respect to the Meiji monetization or the Arcalis monetization question, I'll defer that to Andy, but I can address your first question.
Speaker Change: Hey, Thanks for the questions with respect to the major monetization or the <unk> monetization.
Speaker Change: Monetization question I'll defer that to Andy but I can address your first question.
Joseph E. Payne: You've asked for further detail around the July 1st meeting that we've announced. We're going to be providing an interim data readout for Phase 1b of the ARCT 032 Cystic Fibrosis Program. We anticipate enrollment for this to be completed by July 1st. Additionally, we'll be sharing some Phase 2 data and a progress update for the OTC program, but this will be on a subset of patients, not a complete set, and this will likely be communicated in the form of a press release. Did I address your question on that one before we go to Andy to address the archaeologist question?
Andrew H. Sassine: It's you've asked for further detail around the July 1st meeting that we've announced.
Andrew H. Sassine: We're going to be providing in term.
Speaker Change: Data readout for phase one b for the <unk> 32, cystic fibrosis program, we anticipate this to be the enrollment for this to be completed.
Andrew H. Sassine: By July one.
Andrew H. Sassine: And also we will be sharing.
Andrew H. Sassine: Some phase II data and.
Andrew H. Sassine: A progress update for the OTC program, but this will be on a subset of patients.
Andrew H. Sassine: Fleet set.
Andrew H. Sassine: And this will likely be communicated in the form of a press release.
Speaker Change: Did I address your question on that one before we go to Andy to address the <unk> question.
Joseph E. Payne: Yeah, I just wondered if we would have any data from the additional or the higher dose cohort at that point, or is it still too early to say?
Andrew H. Sassine: Yes.
Speaker Change: You have any data from the additional ore at a higher dose cohort at that point or is it still too early to say.
Andrew H. Sassine: We'll be able to disclose more details on July 1st. And then, Andy, how about if you could address the archaeologists?
Joseph E. Payne: We will be able to disclose more details on July 1st.
Speaker Change: And then Andy how about if you can address the our Calais.
Andrew H. Sassine: Sure, you know, thanks Evan for the question. Obviously, we as a management team and the board made a strategic decision to work very closely with a group of globally established CDMOs to help support our manufacturing efforts across our wholly owned pipeline, you know, program. So, we're kind of in a fortunate position that we were able to attract a lot of very strong investment banks that expressed an interest in helping us monetize this investment.
Andrew H. Sassine: Sure Yeah. Thanks, Evan for the question, obviously, we the management team and the board made a strategic decision to work.
Andrew H. Sassine: Very closely with a group of global establish CGM over to help support our manufacturing efforts across our wholly owned pipeline program. So.
Andrew H. Sassine: We're kind of in a fortunate position that we were able to attract a lot of very strong investment banks that had expressed an interest in.
Andrew H. Sassine: In helping us monetize this investment and we were fortunate to be able to select and work with.
Andrew H. Sassine: And we were fortunate to be able to select and work with a prestigious bank like JP Morgan to help us look at strategic options. And, of course, you can assume that it's a very well-placed asset for a lot of potential players, especially in Japan, with the growth of that market and the approval of the vaccine. And certainly, you know, we're excited about the growth of Arcalis, and we're certainly going to be there to support them in many different ways.
Speaker Change: Prestigious bank like JP Morgan.
Speaker Change: To help us.
Andrew H. Sassine: Oh look at strategic options and of course, you can assume that it's a very well placed.
Speaker Change: Asset.
Speaker Change: For a lot of potential players, especially in Japan with the growth of that market and the approval of the vaccine and certainly we're excited about the growth of our catalysts and we're certainly going to be there to support them in many different facets.
Andrew H. Sassine: But, you know, this was a strategic decision on behalf of our company and management team to, you know, become an asset light and a variable cost operating entity at this point and stage of our development. Did that help answer your question? Yeah, I'll jump back in the queue. Thanks, guys.
Speaker Change: But you know this was a strategic decision.
Speaker Change: On behalf of our company and management team too.
Speaker Change: Become an asset light and.
Andrew H. Sassine: Variable cost the operating entity at this point and stage of our development.
Speaker Change: Development did that help answer your question.
Boran Wang: Yeah, I'll jump back in the queue. Thanks, guys.
Speaker Change: Yes, I'll jump back in queue. Thanks, guys.
Speaker Change: Hey, Thanks Ana.
Speaker Change: Okay.
Operator: Your next question comes from Yasmeen Rahimi with Piper Sandler. Your line is now open.
Speaker Change: Your next question comes from Yasmin Rahimi with Piper Sandler Your line is now open.
Liam Heester: Hi, team. This is Liam Heester on for YAS.
Operator: Hi team. This is Liam Easter on for you guys.
Liam Heester: Just our first question in relation to Arcalis and CoStave. What are your expectations around Japan's order, potentially in 2025? And then, what are the current manufacturing capabilities of Arcalis for producing both COVID and flu vaccines? And how is that expected to change in the future? Further, moving from there, I think, with the OTC and CF programs, do you have any tidbits on potential regulatory path forwards for those two programs? And then also, with the July 1st data readout, any specific biomarkers that you will be reporting on at that point?
Liam Easter: Your first question in relation to like our college.
Speaker Change: And coast, Dave what are your expectations around Japan's order potentially in 2025, and then what are the current manufacturing capabilities of our tally of producing both COVID-19 and flu vaccines and how is that expected to change in the future.
Liam Heester: Further it moving from there I think with the OTC and fee App program.
Speaker Change: Do you have any tidbits on potential regulatory path forward in those two programs and then also with the July 1st data readout and he says to make Biomarkers that you will be reporting on at that point.
Speaker Change: Yes.
Andrew H. Sassine: Sure. Andy, do you want to address the outlook for Arcalis and Coast Daven manufacturing capabilities?
Speaker Change: Sure Andy do you want to address the.
Andrew H. Sassine: The outlook for our.
Speaker Change: Our callison close Dave and manufacturing capabilities.
Andrew H. Sassine: Yeah, I know it's, we're excited about the opportunity for our catalysts to be producing vaccines for the Japanese market soon. They're in the process of getting GMP batches approved for commercialization, and we anticipate that that should occur sometime in the third quarter. And so, assuming that is successful, it'll then be an opportunity for Meiji to order directly from our catalysts in terms of manufactured doses. With respect to guidance on future orders and, you know, potential opportunities, we're going to really have to defer that to our partners, CSL and Meiji.
Andrew H. Sassine: Yes, no it's where we're.
Andrew H. Sassine: Cited about.
Andrew H. Sassine: <unk>.
Dave: Opportunity for a catalyst to be producing vaccine for the Japan market. Soon they are in the process of getting GMP batches approved for commercialization and we anticipate that that should occur sometime in the third quarter.
Andrew H. Sassine: And so.
Andrew H. Sassine: Assuming that that is successful.
Andrew H. Sassine: It'll be then an opportunity for me to order directly from our Calais in terms of the manufactured doses with respect to guiding on.
Andrew H. Sassine: Future orders and potential opportunities, we're going to really have to defer that to our partner CSL and Meiji.
Andrew H. Sassine: They prefer to lead those discussions and those kinds of guidance, and so hopefully, you can respect the request of our partners and, you know, obviously, we're pretty excited about the future opportunity for not only the Japanese market but for our catalysts to be a dominant player.
Andrew H. Sassine: They prefer to lead those discussions and those kind of guidance.
Andrew H. Sassine: So hopefully you can respect.
Andrew H. Sassine: The request of our partner then obviously.
Andrew H. Sassine: We're pretty excited about the future opportunity for not only the Japanese market, but for our talents to be a dominant player.
Joseph E. Payne: And with respect to your second question, Liam, for both our OTC and CF programs, I think it's safe to assume that we're intending to expand into the U.S. With OTC, not only expand into the U.S. at some point, but get access to younger, more advanced OTC deficiency diseases so that we can mature that product and the regulatory advancement of that. On the CF side, phase two is... The Phase II plans are around not only the United States but other countries as well, and we're going to be working closely, and have been, with the CF Foundation on the design and implementation of that trial.
Speaker Change: And with respect to your second question Liam.
Joseph E. Payne: For both our OTC and CF programs I think it's safe to assume that we're intending to expand into the U S.
Liam Heester: Great! Thank you so much.
Andrew H. Sassine: With OTC not only expand into the U S at some point, but.
Andrew H. Sassine: You can't get access to younger more advanced OTC deficiency disease. So that we can mature mature that product and the regulatory advancement of that on the CF side phase two is.
Andrew H. Sassine: Yes.
Liam Heester: The phase two plans are around not only the United States, but other countries as well.
Andrew H. Sassine: We're going to be working closely and have been.
Andrew H. Sassine: With the CF Foundation on the design and implementation of that trial.
Speaker Change: Great. Thank you so much.
Speaker Change: Thank you Liam.
Operator: Your next question comes from Myles Minter with William Blair. Your line is now open.
Speaker Change: Your next question comes from Myles Minter with William Blair. Your line is now open.
Sarah: Hi, you've got Sarah on for Myles. Congratulations on another great quarter.
Myles Robert Minter: Hi, Sarah on for miles congrats on another great quarter.
Sarah: So just a couple of questions from us on the ARC-810 program. Can you confirm switching the ARC-810 dosing format to a three-hour, three-step process and then pre-medicating with acetaminophen and antihistamines in the current Phase II MAD study after observations in Phase Ib, and just kind of walk us through the rationale for that switch, if it was made? And second, how confident are you that we won't see any febrile reactions in the ongoing MAD portion of the study? Yeah, great question. We had the opportunity to share.
Sarah: Just a couple for Mark on the <unk> program can you confirm switching the RJ and dosing format.
Myles Robert Minter: Two or three hour a three step process, and then pre medicating with acetaminophen and anti histamine in there.
Myles Robert Minter: These two Mad study after observation from our phase one b and just kind of walk us through the rationale for that switch if it with me and second how confident are you that we won't see any febrile reactions in the ongoing that portion of the study.
Joseph E. Payne: Yeah, great question. We had the opportunity to share some of the details around our learnings from Phase 1 and Phase 1B and OTC at the recent SIMD conference. We learned a lot. What is very typical, and what I've personally experienced throughout my career and that of others in the field, is you have to understand the rate of these infusion-related reactions early in the trial, and then you ameliorate these or reduce the frequency and address them through adjustments in premedication and the dosing regimen itself.
Speaker Change: Yes, great question, we have the opportunity to share some of the details around our.
Joseph E. Payne: Learnings from phase, one and phase one be in OTC at our recent at the recent <unk> conference.
Joseph E. Payne: We learned a lot.
Joseph E. Payne: Yes.
Joseph E. Payne: What is very typical and what we I personally experiencing throughout my career and those in the field is is you have to understand the rate of these infusion related reactions early in the trial and then you ameliorate these or reduce the frequency and address them through adjustments in cuda medicine pre medication in the dosing regimen itself and we've.
Joseph E. Payne: And we've successfully done that. I believe that we have identified a more effective optimized premedication protocol that involves acetaminophen. It's also... We're happy to utilize a pre-medication process that does not have steroids. So it's steroid-free, which is important to this population. And so that was a nice learning that we captured from our early trials. And also, we modified the regimen, so it's a three-step process for the... It's more conservative and subtle in the infusion process.
Myles Robert Minter: Successfully done that.
Joseph E. Payne: I believe that we've identified a more effective optimize pre medication protocol.
Joseph E. Payne: You also see the medicine.
Joseph E. Payne: It's also.
Myles Robert Minter: We're happy to his team to utilize a pre medication process that does not have steroids. So it's steroid sparing which is important to this population and so that was a nice learning that we captured from our early trials and also we modified the regimen. So it's a three step.
Joseph E. Payne: Yep.
Joseph E. Payne: Process for the it's more conservative than and subtle in the infusion process now this is something that.
Joseph E. Payne: Now this is something that I've, this is very typical, so it's not something we brag about that we've removed infusion-related reactions, or at least reduced them significantly, because this is something that is typical for this type of product. But rest assured, all these learnings that we've learned in the Phase 1 and Phase 1b trials have been applied to the Phase 2 trial, and we'll be able to give an update on that on July 1st.
Myles Robert Minter: This is very typical so it's not something we break about that we've removed these infusion related reaction or at least reduce them significantly because this is something that is typical for this type of product, but rest assured all these learnings that we have.
Joseph E. Payne: Learned in phase, one and phase one b trial have been applied to the phase III trial.
Myles Robert Minter: And we will be able to give an update on that on July one.
Speaker Change: Great. Thanks, so much.
Speaker Change: Thank you.
Operator: Your next question comes from Whitney Legion on behalf of Canaccord Genuity. Your line is now open.
Speaker Change: Your next question comes from Whitney lead Jim with Canaccord Genuity. Your line is now open.
Juan: Hi, thanks for taking the question. This is Juan on for Whitney. A quick two-part question. Assuming you're able to show successful delivery of CFTR to lung cells with your LNP, how are you thinking about expanding the inhaled side of the pipeline, whether it's continuing with the red disease setting or potential vaccine or something else? And then maybe thinking towards phase two, are you thinking about targeting null patients or are you more open to broader mutations at that point?
Operator: Okay.
Speaker Change: Hi, Thanks for taking the question. This is Julian on for Whitney maybe just.
Juan: It's a quick two part question.
Julian: Assuming you're able to show successful delivery of the FTR two lung cells. If youre LNP. How are you thinking about expanding the inhaled side of the pipeline or theres, continuing when rich deep bidding or potential vaccine or something else.
Juan: And then maybe thinking towards the phase two are you thinking about targeting North Asia.
Julian: No patients or are you more open to broader mutations at that point.
Juan: Yeah.
Joseph E. Payne: With respect to targeting different mutations, I can allow Pat to address that in a moment. But yes, we are, you can imagine the energy at Arcturus now that we're coming to the end of the enrollment in Phase 1B and working with the CF Foundation on Phase 2. We're excited about what opportunities we can do outside of CF. And so those discussions are dynamic and very fun here at Arcturus, but we haven't disclosed what our next steps are, our next targets in the lung, but there will be a time and a place to do that.
Speaker Change: With respect to targeting different mutations I can allow pad to address that in a moment, but.
Joseph E. Payne: Yes, we are you can imagine the energy at our tourists now that were coming.
Pat: Two of them.
Joseph E. Payne: Closing of the enrollment phase one be and working with the CF Foundation on phase two we're excited about what opportunities can we do outside of CF.
Pad: And so those discussions are dynamic and very fun here at Arcturus.
Joseph E. Payne: We haven't disclosed what our next steps are next targets in the lung, but there'll be a time and a place to do that but we are also excited about.
Joseph E. Payne: But we are also excited about initiating and getting on to the Phase II trial, of course, assuming Phase I-B is good, and we'll provide an update on that on July 1st. But with respect to, are we going to be going after other mutations? My initial response is we're going to be initially focusing on non-modulator responsive patients. This includes the Class I. Subpatient population of the CF community and also those that do not respond to the presently approved modulators. But in terms of other details of the different types of patients, pad, anything to add there?
Joseph E. Payne: Initiating and getting onto the phase II trial.
Joseph E. Payne: Of course, assuming phase <unk> is good and we'll provide an update on that on July one.
Pad: But.
Speaker Change: With respect to.
Pad: Are we going to be going after other mutations.
Joseph E. Payne: Initial response is we're going to be initially focusing on non modulator responsive patients. This includes the class one.
Joseph E. Payne: Patient population of of the CF community and also those that do not respond to the presently approved.
Joseph E. Payne: Modulators, but in terms of other details of the.
Joseph E. Payne: Different types of patients Pat anything to add there.
Padmanabh Chivukula: No, you know, obviously, I think you've touched the nail on the head, Joe. I mean, obviously, our therapeutic using mRNA is mutation-agnostic, so we can go after a larger subset of patients. But some of the other mutations are well-served, as you well know. So I think the biggest need currently is in the null patient population, and we'll focus on that initially. But we will obviously look at a broader indication in the future as well. So thank you.
Padmanabh Chivukula: No, you know, I would see it, I think.
Joseph E. Payne: No.
Joseph E. Payne: Obviously, I think you've touched on nail on head Joe.
Padmanabh Chivukula: Obviously, our therapeutic using mrna is mutation agnostic social we can go after a larger subset of patients but.
Padmanabh Chivukula: Those are some of the other mutations are well served as you well know also I think the biggest need currently is in the <unk> patient population and we will focus on that initially, but we obviously will look at.
Padmanabh Chivukula: Broader indications in the future as well so thank you.
Operator: Your next question comes from Yanan Zhu with Wells Fargo. The line is now open.
Yanan Zhu: Thanks Joanne. Your next question comes from Yanan, Zhu with Wells Fargo. Your line is now open.
Yanan Zhu: Great. Thank you for taking our questions and congratulations on the progress.
Yanan Zhu: Great. Thanks for taking our questions and congrats on the progress maybe up first of all a question on the Japan order at this 4 million order, our initial order or could there be additional order for this season.
Yanan Zhu: Maybe first a question on the Japan order. Is the 4 million order an initial order, or could there be additional orders for this season? Also, has Meiji set a price, and what is the out-of-pocket if local government subsidy is considered? Thanks.
Yanan Zhu: Also have major set of price.
Yanan Zhu: And what is the out of pocket.
Yanan Zhu: If we if local government subsidy is considered.
Andrew H. Sassine: Alright, that's a good question for Andy.
Yanan Zhu: <unk>.
Yanan Zhu: Alright.
Yanan Zhu: A good question for Andy.
Andrew H. Sassine: Yeah, no, thanks, Yanan. As I mentioned earlier, I think Arcalis is in the process of getting, you know, three GMP batches manufactured and getting it approved so that it can become commercial. And so that time frame is probably going to be in the third quarter. If they're successful, then that certainly opens the door for Arcalis to deliver additional vaccines. And it'll certainly be up to Meiji to make that decision. So that's, I think, a very important kind of catalyst to be looking for. And we're certainly supporting Arcalis in this endeavor, and hopefully, they'll be successful with the timeline.
Andy: Yes, no. Thanks Shannon.
Andy: As I mentioned, a little earlier I think.
Andrew H. Sassine: Our cat losses in the process of getting.
Andrew H. Sassine: Three GMP batches manufactured and getting it approved so that it could become commercial and so that timeframe is probably going to be in the third quarter. So if they're successful then that certainly opens the door.
Andrew H. Sassine: More on countless to deliver additional vaccine and it'll certainly be up to <unk> to make that decision. So that's I think a very important kind of catalyst to be looking for.
Andrew H. Sassine: We're certainly supporting our catalysts in this endeavor.
Andrew H. Sassine: Hopefully they'll be successful with the timeline with respect to the pricing I think.
Andrew H. Sassine: With respect to the pricing, I think, you know, there are a lot of people who have asked that question. And if you look at the Ministry of Health website, there are a few numbers that have been reported as about $100 per dose. And, you know, we've also learned that the market price for Pfizer and Moderna is higher than that. So we're pretty comfortable. And I think Meiji is pretty comfortable with the pricing of the vaccine right now and pretty excited to, you know, start to commercialize CoStav in Japan. With, you know, respect to your second part of the question, I apologize, but could you repeat what it was again?
Andrew H. Sassine: There is a lot of people have asked us that question.
Andrew H. Sassine: And if you look at the Ministry of Health website, there's been a few numbers that have been reported at about $100 per dose.
Andrew H. Sassine: And we have also learned that.
Andrew H. Sassine: The market price for Pfizer and Madonna is higher than that so.
Andrew H. Sassine: We're pretty comfortable and I think <unk> is pretty comfortable with.
Andrew H. Sassine: The pricing of the vaccine right now and are pretty excited to start to commercialize coast, Dave in Japan with respect to.
Andrew H. Sassine: Your second part of the question.
Speaker Change: I apologize, but could you repeat what was again.
Yanan Zhu: Yeah, out-of-pocket costs after the local government subsidy.
Andrew H. Sassine: Yes out of pocket cost after the local government subsidy.
Andrew H. Sassine: Oh, okay, good. Yeah, we have learned from numerous sources in Japan that the local government as well as the national government will subsidize about 80% of the vaccine price. So obviously, very encouraging support from the government. And as you know, this is a strategic investment and position on behalf of the Japanese government for the people to protect them in the future because it is, you know, one of the only state-of-the-art mRNA manufacturing facilities located in Japan.
Speaker Change: Oh, Okay. Good yeah, we have learned through numerous sources in Japan.
Andrew H. Sassine: The local government as well as the National government will subsidize about 80% of the vaccine price so.
Andrew H. Sassine: Obviously, a very encouraging support from the government.
Andrew H. Sassine: And as you know this is the strategic investment.
Andrew H. Sassine: And <unk>.
Andrew H. Sassine: Position on behalf of the Japanese government for the people to protect them in the future because it is.
Andrew H. Sassine: One of the only state of the art mrna manufacturing facility located in Japan.
Andrew H. Sassine: And so Japan and their people will be protected going forward, hopefully, you know, any future pandemics or breakouts. So certainly a very important strategic decision on behalf of the government, and we were very fortunate to be selected by the government in Meiji to be their partner.
Andrew H. Sassine: And so Japan in.
Andrew H. Sassine: There are people will be protected going forward in the event hopefully.
Andrew H. Sassine: <unk>.
Andrew H. Sassine: Any future pandemics or breakout so certainly a very important strategic decision on behalf of the government and we were very fortunate to be selected by the government and Meiji to be their partner.
Yanan Zhu: Great, great. If I may ask a question about the CF program, I was mainly wondering if there are biomarkers that can guide the dose finding, whether it is in the current phase 1b or in the next phase 2. What's the plan to identify a dose? Is it going to be the FEV1, like a functional endpoint, or is there a biomarker that can help in that regard?
Speaker Change: Great Great. If I may ask a question about the CF program.
Yanan Zhu: It was mainly wondering about.
Joseph E. Payne: Yeah.
Yanan Zhu: Is there a biomarker.
Joseph E. Payne: That can guide it's always finding.
Joseph E. Payne: Whether it is in the corn seed Wendy.
Joseph E. Payne: And or next things too.
Joseph E. Payne: What's the plan to.
Joseph E. Payne: Identify a dose is it going to be the SCD, one Michael functional endpoint or is there a biomarker that can help in that regard.
Joseph E. Payne: Yeah, thanks Yanan. Dosing has been guided largely by safety and tolerability measures in our Phase 1 and Phase 1B trials. With respect to a biomarker, there isn't one that's driving these decisions. We, uh, anything else to add there, Pat?
Speaker Change: Yes, yes, thanks, <unk> NAND dosing has been guided largely by safety and Tolerability measures in our phase one and phase <unk> trials.
Pat: With respect to a biomarker there isn't one that's driving these decisions.
Joseph E. Payne: We.
Joseph E. Payne: Anything else to add there Pat.
Padmanabh Chivukula: No, I think, yes, you know, for this program specifically, yes, it's not driven through biomarkers. That's correct. And it's more difficult.
Pat: No I think yes, yes.
Pat: For this program specifically, yes, it is not driven through Biomarkers that's correct.
Pat: It's more a harder endpoint.
Joseph E. Payne: In terms of lung volume and FEVs and lung clearance indices, there will be opportunities to address those questions.
Speaker Change: Yeah in terms of lung volume in Suvs in lung clearance index fees.
Pat: That will be Dolby.
Pat: There'll be opportunities to address those questions.
Yanan Zhu: Got it. Thank you so much.
Speaker Change: Got it thank you so much.
Speaker Change: Thank you.
Operator: Your next question comes from Yigal Notchumovitz with Citigroup. Your line is now open.
Speaker Change: Your next question comes from Yigal <unk> with Citigroup. Your line is now.
Amin: Hi, this is Amin Anfor Yigal. Thank you for taking our questions. We had a couple.
Yigal Notchumovitz: Hi, This is I mean oncor yigal. Thank you for taking our question.
Amin: First, we wanted to know about the mass of this. So basically, $100 per dose, and then $4 million gets us to $400 million, and you have around 30% economics of it. Is that the right way to think about your share of the revenue here? And when will this revenue be booked? Is that going to be all in the third quarter, 24, or is it going to be spread over the next few quarters? Go ahead, Andy.
Yigal Notchumovitz: We had a couple first we wanted to know about the mass of this.
Andy: On the line and how should how we should calculated so basically $100 per dose.
Andy: 4 million gets us to $400 million and you have like 20% around 70% economics of it is that the right way to think about.
Andy: Our share of the revenue here.
Amin: And.
Andy: When will this revenue will be booked is that going to be all in third quarter 'twenty four or is it going to be a spread.
Andy: The next few quarters.
Andy: Yes go ahead I had a follow on.
Andrew H. Sassine: Yeah, no, those are very good questions, and as I said on the call earlier, we will provide more substance and color in the fourth quarter, and hopefully, you can be a little patient with respect to those questions and answers. With respect to the breakout between MAGIE, CSL, and Arcturus, we're really not allowed to comment on that at this point except to say that we're all very, you know, pleased with the economic sharing opportunity and certainly are grateful to be able to work with three distinguished global partners and especially with their commercial, you know, distribution capability.
Andy: Yes, no that was a very good question and as I said.
Andrew H. Sassine: On the call earlier, we will provide more.
Andrew H. Sassine: Subsequent and color in the fourth quarter.
Andrew H. Sassine: And hopefully you can be a little patient with respect to those questions and answers.
Andrew H. Sassine: With respect to the breakout between AG CSL and Arcturus, we're really not allowed to comment on that at this point.
Andrew H. Sassine: Except to say that we're all very pleased with the economic sharing opportunity and certainly are grateful to be able to work with three distinguished Global partners.
Andrew H. Sassine: And especially with the commercial.
Andrew H. Sassine: Distribution capability, not only within Japan, but globally. So.
Andrew H. Sassine: Not only within Japan but globally, so our profit share is 60-40 split with CSL globally on a gross profit basis, so obviously, we can't do that with a third partner, so you'll have to somehow improvise and assume that it'll be split somehow in three ways, and hopefully, that will give you some color that this is a very lucrative opportunity for all three players involved. Thank you.
Andrew H. Sassine: Our profit share a 60 40 split with CSL globally on a gross profit basis. So.
Andrew H. Sassine: Obviously, we can't do that with a third partner so youll have to improvise.
Andrew H. Sassine: Soon it will be split somehow in three matters three ways and hopefully that will give you some color to that.
Andrew H. Sassine: This is a very lucrative opportunity for all three players involved thank you.
Amin: Okay, great. Thanks. And one more on Arcturus. What can you tell us about the... how much your stake at Arcturus is worse, and is there any good comp for what the manufacturing side is worse? Or also, what are the timelines you are working on?
Speaker Change: Okay, great Thanks and.
Speaker Change: One more on <unk>.
Speaker Change: What did you tell us about that.
Speaker Change: How much your stake at our tell US is worse and is there any good comp for what the manufacturing side to that size.
Amin: Morris.
Speaker Change: Or also what are the timelines you are looking at to monetize this opportunity.
Amin: Are you asking? I just want to make sure you got the question in.
Speaker Change: Alright, you asked me I just wanted to see how are you.
Speaker Change: Got the question Andy you understood Okay.
Andrew H. Sassine: Yeah, no, I think we're kind of fortunate that there are a number of publicly traded comps in the United States that should give you a perspective on the valuation of CDMOs that are, you know, participating in the mRNA space. And you can also take a look at what Aldebaran was purchased for from Idanaher recently, and certainly Catalan was acquired as well, and there are a few other publicly traded companies that you can evaluate.
Speaker Change: Yes, no I think you know.
Andrew H. Sassine: We're kind of fortunate that there is a number of publicly traded.
Andrew H. Sassine: Comps in the United States that should give you a perspective on the valuation of CDM modes that are participating in the mrna space.
Andrew H. Sassine: And you can also take a look at what.
Andrew H. Sassine: The elder everyone with <unk> four from by Danaher.
Andrew H. Sassine: Recently in the last few years and certainly cattle.
Andrew H. Sassine: <unk> was acquired as well and.
Andrew H. Sassine: There's a few other publicly traded comps that you can evaluate so.
Andrew H. Sassine: So it's a market that I think is very attractively valued because of the growth potential for this, you know, mRNA therapeutic going forward, and hopefully, the appropriate party that wants to be a part of growing this operation will help, you know, develop it, and that is our goal, to work closely with them.
Andrew H. Sassine: If the market that I think.
Andrew H. Sassine: As a very attractively valued because of the growth potential.
Andrew H. Sassine: All of this.
Andrew H. Sassine: Mrna therapeutic going forward.
Andrew H. Sassine: And hopefully.
Andrew H. Sassine: The appropriate.
Andrew H. Sassine: Party that wants to be a part of growing this operation.
Andrew H. Sassine: Will will help.
Andrew H. Sassine: <unk>.
Andrew H. Sassine: And that is our goal to work closely with them.
Amin: Okay, great. Thank you very much.
Speaker Change: Okay. Thanks for the question listen.
Operator: Your next question comes from Ed Art. Arcee with H.C. Wainwright and Company. Your line is now open.
Amin: Your next question comes from Ed Arce.
Speaker Change: Arce with H C Wainwright and company. Your line is now open.
Antonio Eduardo Arce: Great. Thanks for taking our questions, Joe and Andy, and congratulations on the progress so far this year. A couple of our questions around COSTAVE and ARCALIS and that order coming up later this year have been answered, but I wanted to get back to your therapeutics pipeline, in particular the two programs with an update on July 1st. Um... I was hoping that you could share, you know, some granularity on the data that you expect to present on that Monday, as well as, you know, what are your data thresholds for success in both of those programs? to support, you know, further development.
Speaker Change: Great. Thanks for taking our questions, Joe and Andy and congrats on the progress so far this year.
Antonio Eduardo Arce: Sure.
Antonio Eduardo Arce: A couple of questions around cost, Dave and are calling us and.
Antonio Eduardo Arce: Order coming up later this year.
Antonio Eduardo Arce: I have been answered, but I wanted to get back to your therapeutics pipeline.
Antonio Eduardo Arce: And in particular, the two programs with an update on July one.
Antonio Eduardo Arce:
Antonio Eduardo Arce: I was hoping that you could share.
Antonio Eduardo Arce: Some some granularity on the data that you expect.
Antonio Eduardo Arce: To present on that Monday as well as.
Antonio Eduardo Arce: No.
Antonio Eduardo Arce: What are your data thresholds for success in both of those programs.
Antonio Eduardo Arce: To support further development.
Joseph E. Payne: Yeah, good question. Yeah, it's an important day for us, this July 1st meeting, for sure. So I appreciate the question. The interim data set for the Phase 1b ARCT 032-CF program. You know, primarily focused on safety and tolerability of two administrations of this therapeutic. We may be able to give additional granularity or guidance on the doses and the specific regimen that we are utilizing. And it provides another opportunity to give more details or guidance on the subsequent Phase 2 trial that's getting planned, as you can appreciate.
Speaker Change: Yes. Good question, Yes, it's an important day for US. This July 1st meeting for sure. So I appreciate the question.
Joseph E. Payne: The interim data set for the phase one B <unk> 032 CF program.
Joseph E. Payne: Primarily focused on safety and Tolerability of two administrations of this therapeutic Kuwait, we may be able to give additional granularity or guidance on on the dosing and the specific regimen that lease.
Joseph E. Payne: Are utilizing.
Joseph E. Payne: Sure.
Joseph E. Payne: <unk> is another opportunity to give more details of our guidance on the subsequent phase III trial.
Joseph E. Payne: Getting planned as you can appreciate.
Joseph E. Payne: But, in terms of data, I think the primary objective is to establish safety and tolerability of two inhaled administrations of this product and get people, help people understand the dosing and the regimen that we're pursuing for phase two. And then with respect to ARCT 810, I mentioned it is on a subset of patients, it won't be the complete enrollment, but we're looking for biomarker changes primarily from a data perspective that, unlike the patients in Phase 1 and Phase 1b, these Phase 2 patients are more advanced.
Joseph E. Payne: But that in terms of data I think the primary objective is to establish safety and tolerability of two inhaled and Mr. Administrations of this product.
Joseph E. Payne: Get people.
Joseph E. Payne: How people understand the dosing regimen.
Joseph E. Payne: That we're pursuing for phase two.
Joseph E. Payne: And then with respect to <unk>.
Joseph E. Payne: And it is on a subset of patients who won't be the complete enrollment, but we are looking for.
Joseph E. Payne: Biomarker changes primarily from a data perspective.
Joseph E. Payne: That.
Joseph E. Payne: Unlike the patients in phase, one and phase one b. These phase II patients are more advanced others also adolescence participating in this trial, so theyre younger as well so more variability in biomarkers from the onset so what we'd like to see is some.
Joseph E. Payne: There are also adolescents participating in this trial, so they're younger as well, so there will be more variability in biomarkers from the onset. So what we'd like to see is some biomarker changes there, and there will be more information to provide on July 1st. Was that helpful? Yeah, that's great.
Joseph E. Payne: New biomarker changes there.
Joseph E. Payne: So thats and there is there'll be more information to provide on July one was that helpful.
Antonio Eduardo Arce: Yeah, that's great. Thank you.
Speaker Change: Yeah, that's great. Thank you so much.
Speaker Change: Thank you.
Operator: Your next question comes from Yale Jen with Layla and Company. Your line is now open.
Antonio Eduardo Arce: Your next question comes from Yale Jen with Laidlaw and company. Your line is now open.
Yale Jen: Good afternoon, and thanks for taking my question. Both are related to the Japan part. The first one is that the Japanese government believes in, and funds the ReCalit construction and production. So would that number times your share of the company be a proxy for the potential value of the company? I hope that's it, and then I have a follow-up.
Yale Jen: Good afternoon, and thanks for taking my question.
Yale Jen: Both are related to the Japan.
Yale Jen: The first one is that the Japanese government.
Speaker Change: I believe.
Yale Jen: It would be.
Speaker Change: Got it.
Yale Jen: The.
Yale Jen: Construction and.
Yale Jen: Production.
Yale Jen: Would that number.
Yale Jen: <unk> share of the company will be a proxy for the potential value.
Yale Jen: Of that asset and then have a follow up.
Andrew H. Sassine: Andy, you can assume, yeah, no, good question. Obviously, the money provided by the Japanese government was all in the form of grants. And of course, you know, our partner Axelede has worked very closely to, you know, construct this factory with our, you know, construction partners in Japan. And you can assume that it cost a lot more than $165 million to build this state-of-the-art factory that has, you know, three different facilities located within one premises.
Yale Jen: And Andy you can assume yeah no. Good question, obviously, the money provided by the Japanese government with all in the form of grants.
Speaker Change: Of course.
Andrew H. Sassine: Partner Axa lead.
Andrew H. Sassine: It has worked very closely.
Andrew H. Sassine: To construct this factory with our construction partners in Japan, and you can assume that it's a lot more than $165 million to build the state of the art factories that had three different <unk>.
Andrew H. Sassine: Facility located within one prime.
Andrew H. Sassine: So, it is a part of the investment that was made, but there is, you know, substantially more capital that went in through the investment made by Axelede and with partners who are the co-shareholders and equity partners in this joint venture. So, hopefully, that gives you some perspective of the amount of capital. It is pretty substantial.
Andrew H. Sassine: Premise so.
Andrew H. Sassine: As a part of the investment that was made but there are substantially more capital that had gone in through the investment.
Andrew H. Sassine: By Axa lead.
Andrew H. Sassine: With partners, who are the co shareholders and equity partner than this.
Andrew H. Sassine: And this John or joint venture so hopefully that gives you some perspective.
Andrew H. Sassine: Sure.
Andrew H. Sassine: The amount of capital it is pretty substantial.
Yale Jen: Okay, great. That's very helpful to set up some basis to think about. And maybe the next question or the last question here is that, in terms of formula doses that have the major potential to deliver in the third quarter, what are the targeted COVID strains for that?
Joseph E. Payne: [inaudible]
Speaker Change: Okay, Great. That's very helpful to set up some basis to think and maybe the next question.
Speaker Change: Last question here.
Joseph E. Payne: In terms of 4 million doses did the nature.
Joseph E. Payne: <unk> in the third quarter.
Joseph E. Payne: The talk of the Covid strain of that.
Joseph E. Payne: That does that does that that vaccine.
Joseph E. Payne: Yeah, that's a great question. The WHO came out and announced that the JN1 variant was going to be the variant of concern or focus for the upcoming fall and winter seasons. The PMDA traditionally listens carefully to that recommendation and aligns with it. So I think it's safe to assume that the JN1 variant is likely the one that we're referring to with respect to the 4 million doses. But the formality of that announcement will likely come later.
Speaker Change: Yeah, that's a great question.
Joseph E. Payne: <unk> came out and announced that the Jan one variant.
Joseph E. Payne: I was going to be the variant of concern or focus for this upcoming fall and winter seasons. The P. M. D. A traditionally listened carefully to that recommendation and aligns with it. So I think it's safe to assume that the Jan one variant is likely the one that.
Joseph E. Payne: Referring to with respect to the 4 million doses, but.
Joseph E. Payne: But the formality of that announcement will likely come from AG.
Yale Jen: Okay, great, and maybe just squeezing one more for Andy. Starting for the last two quarters, you have the grant revenue from BARDA, so should we anticipate this figure from modeling purposes to continue quarter over quarter, or that's more long-term? Thanks.
Speaker Change: Okay, Great and then maybe just squeezing one more well Andy.
Yale Jen: Starting for the last.
Yale Jen: <unk> you have the.
Yale Jen: Glen.
Speaker Change: Revenue from base.
Andy: So should we anticipate this.
Yale Jen: For modeling purpose to continue quarter over quarter or that's more lumpy.
Yale Jen: Okay.
Andrew H. Sassine: No, that's a very good question. You know, it is, we don't typically provide guidance with respect to the quarterly type of milestones that we anticipate because they are dependent on, you know, certain variables that need to be achieved and targets that we need to achieve. And sometimes those targets can slip from quarter to quarter. It's not a linear progression model, right?
Yale Jen: No.
Speaker Change: Very good question.
Andrew H. Sassine: We don't provide guidance typically with respect to the quarterly.
Andrew H. Sassine: Type of.
Andrew H. Sassine: Milestones that we anticipate because they are dependent.
Andrew H. Sassine: On <unk>.
Andrew H. Sassine: Certain variables that need to be achieved in targets that we need to achieve and sometimes those targets can slip from quarter to quarter, it's not a linear progression model right. So.
Andrew H. Sassine: So I prefer to avoid, you know, the type of guidance for quarters and prefer to focus on, you know, our three-year projections and the ability to be able to, you know, determine within a reasonable timeframe how much milestone we should achieve within a year or two or three. A lot easier to do that versus quarter to quarter. I hope you can appreciate that. I'd love to give you, you know, more color and maybe in the fourth quarter when we, you know, begin to ship the co-stay revenues and collect the commercial milestones.
Andrew H. Sassine: Prefer to avoid quarter to quarter type of guidance in.
Andrew H. Sassine: Prefer to focus on.
Andrew H. Sassine: Our three year projections and your ability to be able to determine within a reasonable timeframe how much milestone we should earn within a year or two or three a lot easier to do that versus quarter to quarter. I hope you can appreciate that.
Andrew H. Sassine: I'd love to give you more color.
Andrew H. Sassine: And maybe in the fourth quarter when we begin to.
Andrew H. Sassine: Ship.
Andrew H. Sassine: The coast, Dave revenues and collect the commercial milestone.
Andrew H. Sassine: Hopefully, that will enable us to have a little bit more of a quarter-to-quarter type of perspective, but I prefer to remain conservative and guide you when I have a better, you know, assessment of what's going to happen, you know, in the near term. Hopefully, that will help answer your question. Absolutely. And, again, thank you.
Andrew H. Sassine: Ultimately that will enable us to have a little bit more quarter to quarter type of perspective, but I prefer to remain conservative and guide you when I have a better assessment of what's going to happen in the near term hopefully that will help answer your question.
Yale Jen: Absolutely. And again, thanks and congrats on all the progress.
Speaker Change: Absolutely and again, thanks, and congrats on the progress.
Speaker Change: Hey, Thanks Neal.
Joseph E. Payne: There are no further questions at this time. I will now turn the call over to Joe for his closing remarks.
Yale Jen: There are no further questions questions. At this time I will now turn the call over to Joe for closing remarks.
Joseph E. Payne: We appreciate all your participation on the call. If there are remaining questions, please don't hesitate to reach out to our team. We'll get back to you. Okay. Thanks to everyone.
Joe: And we appreciate fully appreciate all the participation on the call. If there are remaining questions. Please don't hesitate to reach out to our team and we'll get back to you. Okay. Thanks to everyone Goodnight.
Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.
Joe: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.
Operator: [music].