Arcturus Therapeutics Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 14, 2023

There are 13 speakers on the call.

Operator

Greetings, and welcome to the Opturys Therapeutics Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Neda Serhazadeh, Vice President, Head of Investor Relations, Public Relations and Marketing.

Operator

Thank you. You may proceed.

Speaker 1

Thank

Speaker 2

you, operator. Good afternoon, and welcome to ArcTrust Therapeutics' 3rd Quarter 2023 Financial Update and Pipeline Progress Call. Today's call will be led by Joe Paine, our President and CEO and Andy Sassine, our CFO. Doctor. Pat Ciebakula, our CSO and COO, will join them for the Q and A session.

Speaker 2

Before we begin, I would like to remind everyone that the statements made during this call regarding matters that are not historical facts or 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 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 ks 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. Arcturus specifically disclaims any obligation to update such statements.

Speaker 2

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

Speaker 3

Thank you, Neda. It's good to be with you again, everybody. I'm going to begin my remarks with an update on progress regarding our monovalent COVID-nineteen vaccine, ARCT-one hundred and fifty four. Following favorable clinical results from the Phase 3 pivotal studies, the new drug application is currently under review by Japan's The ARCT-one hundred and fifty four Japan NDA submission It's supported by an active controlled Phase 3 booster vaccine study, which was conducted in Japan and a placebo controlled Phase 3 primary The CT154 Phase 3 booster vaccine study achieved its pre specified primary endpoint, demonstrating the non inferiority of an immune response against the SARS CoV-two ancestral strain as compared to Comirnaty. In addition, the superiority of ARCT-one hundred and fifty four and neutralizing antibody response against the SARS CoV-two Omicron BA.

Speaker 3

Fourfive variant was also demonstrated as a key secondary endpoint. Updated preliminary Phase 3 booster data was recently presented at the 11th International mRNA Health Conference in Berlin. In a heads up comparison to an FDA approved monovalent mRNA vaccine, monovalent ARCT-one hundred and fifty four Showed multifold improvement in durability and multifold superior titers of neutralizing antibodies against results were consistent with the Phase onetwo booster clinical trial durability data that were collected previously and presented at the 9th ESWI Influenza Conference in Valencia. All of these observed clinical benefits were achieved with the STAR next generation mRNA technology, which is administered at 5 micrograms. This lower dose level highlights the potential safety and tolerability benefits of this next generation mRNA vaccine platform technology.

Speaker 3

Based on all the clinical data collected to date, we believe that the next generation STAR mRNA platform It's an effective and differentiated vaccine technology that may offer a longer lasting immune response relative to the older conventional mRNA The partner of CSL Securus submitted a Japan NDA to support ARCT-one hundred and fifty four as a primary series and booster vaccine for COVID-nineteen. The review of this application remains underway and is on track for approval in We filed a marketing authorization application in Europe, and we are seeking approvals for ARCT-one hundred and fifty four in other major We continue to mature the value and scope of the STAR next generation mRNA vaccine platform by collecting meaningful bivalent vaccine clinical data as well. We're pleased to report today that the planned enrollment target 8 50 participants has been reached in the ongoing Phase 3 bivalent COVID vaccine trial comparing immunogenicity to bivalent komirnativ. The initial top line results of this study are expected in Q1 of 2024, followed by an anticipated PMDA approval in Q3 2024. In summary, we are delighted with the rapid progress we have achieved this year with our STAR next generation mRNA vaccine platform.

Speaker 3

We believe ARCT-one hundred and fifty four provides clear validation of the broader opportunity for Arcturus' mRNA vaccine and therapeutic programs. Our strategic collaboration with CSL, which is Arcturus' exclusive global licensee, Is focused on developing and commercializing next generation mRNA vaccines and continues to make substantial progress. Our partnered Lunar Flu Program, which is also now known as ARCT-two thousand one hundred and thirty eight, Continues to progress with funding and operational support from CSL. LunarFlu utilizes Arcturus' next generation mRNA platform, and we are intending to initiate a Phase 1 clinical trial, which is expected to begin soon. I'll now move on to ARCT810.

Speaker 3

This is our messenger RNA therapeutic candidate for ornithine trans Carbamylase or OTC deficiency. This investigational medicine is designed to functionally replace the deficient OTC enzyme in the liver, restoring urea cycle activity and preventing metabolic crises that cause neurological damage. ARCT810 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 the disease. ARCT810 has received orphan drug designation and rare pediatric disease designation from the FDA. ARCT810 is currently being evaluated in 2 ongoing clinical studies in A Phase 1b study in adults and a multi dose Phase 2 study in adolescents and adults with OTC deficiencies.

Speaker 3

A Phase 1b single ascending dose study is being conducted in the United States and has completed dosing of all planned 4 cohorts in a total of 16 subjects. We expect the final database lock to occur later in this Q4 of 2023. The ARCT810 Phase 2 study is being conducted in the United Kingdom and Europe and plans to enroll up 24 adolescents and adults with OTC deficiency. The ongoing study evaluates 2 dose levels and includes up to 6 biweekly administrations for each participant. We remain committed to the development of ARCT810 and we are taking various actions to address the continued challenging enrollment rate in Europe by adding study sites and patient services to improve screening participation.

Speaker 3

Updated guidance of interim Phase 2 data is expected in H1 for the first half of twenty twenty four. Moving now to our ARCT-thirty two program. ARCT-thirty two is an inhaled messenger RNA therapeutic candidate for cystic fibrosis formulated with Arcturus' LUNAR delivery technology, which has been optimized for bronchial epithelial cell delivery. We completed enrollment and dosing in a Phase 1 study in New Zealand of 32 healthy subjects across 4 ascending single dose cohorts. We look forward to presenting safety and tolerability study results of this Phase 1 study at an appropriate conference in the first half of twenty twenty four.

Speaker 3

We're pleased to report that we have initiated enrollment and scheduled dosing of the first patient in a Phase 1b clinical study in New Zealand, which is designed to enroll up to 8 adults with cystic fibrosis, with each participant receiving 2 administrations of ARCT-thirty two. We are presently guiding interim data in H1 2024. Arcturus is sincerely grateful for the continued support of the CF Foundation. In September, the organization agreed to increase its financial commitment to $25,000,000 to advance ARCT-thirty 2. In October 2023, ARCT-thirty two received rare pediatric disease designation from the FDA.

Speaker 3

As such, if ARCT-thirty two achieves FDA approval for a pediatric indication, Arcturus is eligible to receive a Priority review voucher of a subsequent marketing application for a different product. New data was presented at the North American Cystic Fibrosis Conference or the NACFC in November. This new proof of activity in vivo data was collected With a CF ferret model, also known as G551D. The ferrets in the study require continuous treatment with the CFTR modulator KALYDECO to prevent disease progression. A single administration of ARCT-thirty two Showed successful transfection of airway epithelial cells and restoration of mucociliary clearance above the level maintained with KALYDECO.

Speaker 3

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

Speaker 4

Thank you, Joe, and good afternoon, everyone. The press release issued earlier today includes financial statements for the Q3 ended September 2023 and provide the summary and analysis of year over year financial results. Please also reference our most recent 10 for more details on the financial performance. Arcturus recently achieved a $35,000,000 milestone from CSL. So the milestone payment will be used to fund development activities for the LUNAR COVID-nineteen vaccine program with CSL.

Speaker 4

We are very pleased with the ARCT-one hundred and fifty four new drug application to the PMDA in Japan, and we believe that this product Could represent a highly differentiated vaccine option for patients. Furthermore, the development and manufacturing plan Supporting ARCT-one hundred and fifty four was carried out in a financially disciplined and efficient manner that leverages multiple external collaboration. The 2 ARCT-one hundred and fifty four Phase 3 Japanese booster study and the product manufacturing related to this collaboration are being funded by Meiji Seika Pharma and the Japanese government. Meiji Seika Pharma has an agreement with CSL Securus, whereby Meiji will be responsible for the regulatory approval, Marketing, distribution and sale of ARCT-one hundred and fifty four in Japan, as well as coordinating the manufacturing of COVID vaccine products with our Callus for the Japanese market. Our Callus located in a strategic biomedical research and development hub in Japan We're poised to become a key player in the global mRNA drug manufacturing landscape.

Speaker 4

This 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, dollars 165,000,000 has been awarded to our Catalyst by the Japanese government. These funds are being used to build mRNA drug substance, formulated drug product capability and to construct a DNA template manufacturing facility. We expect this facility to become a leading manufacturer of mRNA based vaccines and therapeutics with the ability to manufacture vaccine within 100 days of an emerging viral strain. We expect this entity to provide meaningful financial dividend to our company over the coming years due to our substantial equity position.

Speaker 4

We are greatly appreciative of the Japanese government for their financial support. I will now summarize our financial results for the Q3 of 2023. Our primary source of revenue was from license fees, consulting and related technology transfer fees, Reservation fees and collaborative payments received from research and development arrangements with pharmaceutical and biotechnology partners. For the 3 months ended September 30, 2023, we reported revenues of $45,100,000 compared with $13,400,000 for the 3 months ended September 30, 2022. Revenues increased by $31,700,000 during the 3 months ended September 30, 2023, as compared to the prior year period.

Speaker 4

The increase was primarily attributable to revenue recognized from the collaboration agreement With CSL, Securus and grant revenue recognized from the agreement with BARDA, Revenue increased by $90,300,000 during the 9 months ended September 30, 2023, as compared to the 9 months ended September 30, 2022. The increase was attributable to an increase in revenues of 1 This increase was primarily offset by less revenue in 2023 from other COVID program customers. Total operating expenses for the 3 months ended September 30, 2023 was $64,500,000 compared with $50,200,000 for the 3 months ended September 30, 2022. Our research and development expense consists primarily of external manufacturing costs, in vivo research study In clinical trial performed by contract research organization, clinical and regulatory consultants, Personnel related expenses, facility related expenses and laboratory supplies related to conducting R and D activity. R and D expenses were $51,100,000 for the 3 months ended September 30, 2023, compared with $37,700,000 in the comparable period last year, primarily reflecting increased clinical research Manufacturing costs and personnel related expenses.

Speaker 4

General and administrative expenses primarily consist of Salaries and related benefits of our executive, administrative, legal and accounting functions and professional fees for legal and accounting services as well as other general and administrative expenses. G and A expenses were $13,400,000 for the 3 months ended September 30, 2023 compared with $12,500,000 in the comparable period last year. The increase resulted primarily from personnel expenses due to increased headcount and salary, increased travel and expenses as well as an increased rent expense associated with the new headquarters facility. For the 3 months ended September 30, 2023, Arcturus reported a net loss of approximately $15,200,000 or $0.61 per diluted share compared with a net loss of $35,300,000 or 1.33 percent per diluted share in the 3 months ended September 30, 2022. Cash, cash equivalents and restricted cash were $369,100,000 As of September 30, 2023, $394,000,000 at December 31, 2022, We have achieved approximately $365,000,000 in upfront payments and milestones from CSL Securities as of September 30, 2023.

Speaker 4

We expect to continue to receive future milestone payments from CSL that will support the ongoing development of the COVID and flu program and 3 additional vaccine programs by CSL. Finally, I'm happy to report the expected cash runway now extends through the end of 2026 based on the current pipeline and program. In summary, we believe the company remains in a strong financial position and have the resources to achieve multiple near term value creating milestones for the vaccine and therapeutic program. Furthermore, with the anticipated 154 product approval in December in Japan, we look forward to beginning to report potential commercial in the next few years. And we'll now pass the

Speaker 3

call over to Mr. President. Thanks, Andy. We've continued to make excellent progress and advance our proprietary RNA and LUNAR delivery platform technologies toward later stages in clinical development, and we're excited about the progress toward our first potential product approval in December with ARCT-one hundred and fifty four. The achievement would definitely mark a critical milestone for the platform and for Arcturus.

Speaker 3

And so with that, we'd like to turn the time over to the operator for questions.

Operator

Thank you. At this time, we will conduct a question and answer session. A confirmation tone will indicate your line is in the question The first question comes from Yasmeen Rahimi with Piper Sandler. Please proceed.

Speaker 5

Good afternoon, team. Thank you so much for all the updates. The first question is directed to the upcoming Japan approval. Many clients are asking us if we should be expecting any update in terms of the commitment of Japan's Order for vaccines for 2024 at the time of the approval? That's question 1.

Speaker 5

Question 2, would love to hear your thoughts Given that the bivalent vaccine enrollment is complete, when we should be expecting data and in terms of the next steps with the program? And then 3rd is, congrats on the CF program and patient dosing. Are you planning to get to 8 patients? Is there an opportunity to maybe report data on a small cohort in 2024? And I'll jump back into the queue.

Speaker 5

Thank you for letting me ask my question.

Speaker 6

Hey, Yaz. Thanks. With respect 2 government orders that may be associated with the approval of ARCT-one hundred and fifty four. MAGE is primarily responsible for Collecting or soliciting those orders, whether that's from the government or from the private sector in Japan. We're unfortunately, we do not have insight into that.

Speaker 6

So

Speaker 1

So I'm unable to

Speaker 6

address that. But clearly, an order cannot happen until the platform or a particular asset is approved. So I won't be able to speak to any detail on that. With respect to the patients being Recruited to support the Phase 1b trial for cystic fibrosis, we indicated that the first patient is getting dosed here shortly, But we're more than willing to share interim data if required. The guidance we've provided is in the first half of next year.

Speaker 6

With respect to the safety and tolerability data of those of the Phase 1b trial for cystic fibrosis. Now you asked a question about when data Another program, and this is for the bivalent. And so the yes, the bivalent booster data, We've guided that the bivalent, I'm just looking at my notes Confirm, yes, enrollment is completing very soon, in fact, later this month. But We are going to be providing data next year. So top line data is expected in Q1 and an anticipated approval or PMDA approval in Q3 of 2024.

Speaker 5

Thank you so much. I'll jump back in the queue.

Speaker 7

Thanks, Yes.

Operator

The next question comes from Myles Mentor with William Blair. Please proceed.

Speaker 8

Hi. Thanks for the questions. Just Relevant to what Meiji has been saying previously, which was potential approval for monovalent vaccine in October And you've been more conservative saying Q4. I think that's panned out nicely. But is there anything else going on there Like a regulatory conversations point of view, I know you've shown us the 6 month durability data now.

Speaker 8

Did the PMDA Quest that because you have it. I'm just wondering why there's an optical delay from October to December. And maybe that's just the fault of Meiji and not of your own, but Any clarity there would be great. And I've got a follow-up.

Speaker 6

No, just the day 29 data was a prerequisite for the primary endpoint. The 6 month data was not. However, this data is aware to the regulatory agency and taken into consideration as they Look at regulatory approval going forward. And we've guided again that approval is in December.

Speaker 8

And then maybe just sorry, was there a comment there? Sorry, maybe just one on the cystic fibrosis program. Do you have to dose those CF patients in a stepwise fashion, so a single patient would receive 2 administrations be monitored for safety before clearance to dose the next patient Or can you get these patients in 8 of them at a time and dose them altogether? Thank you.

Speaker 9

Yes. We anticipate this is And we anticipate dosing all the cohort altogether. That's correct.

Speaker 7

Okay. Thanks, Pat. Thanks for the question.

Operator

The next question comes from Simus Fernandez with Guggenheim. Please proceed.

Speaker 9

Thanks for

Speaker 10

the question. So, just a couple of quick ones here. In terms of The progression of potential milestones going forward, just hoping that if you guys could help us understand The sort of key steps forward from a milestone perspective, whether it be from the COVID program, The flu program or potentially other programs, and perhaps just In percentage terms, maybe not without absolute numbers, where some of the key Sort of catalyst milestones would really lay out or as a percentage of the terms of CSL, what's possible in 2024. Obviously, we know what the runway is now through 2026 with the existing cash, But it seems like that could be drawn out quite significantly in 2024 As more of these programs advance and as we see more of the COVID-one hundred and fifty four applications move through into other jurisdictions more broadly. So just trying to get a better sense of the breakdown Of those potential milestones?

Speaker 10

And then the second question just and then I'll jump back in the queue. On OTC, is there a consideration just given how excruciating frankly the recruitment has been of this patient population? Is there just a view that the demand among patients is just really not There or that they're just too hard to find and this indication might be smaller than what we thought previously. It just sort of begs the question, is it worth it to keep pursuing this indication, given The very challenging nature of recruiting the trial. Thanks.

Speaker 6

Sure. Thanks Seamus for the questions. First, I'll walk through some of The near term milestones, as you've asked. So with our internal programs, starting with our OTC deficiency program, we've indicated that the database is being locked relevant to the Phase 1 and Phase 1b data for the OTC program. That database lock is going to occur later this quarter.

Speaker 6

With respect to Phase 2 interim data, we're guiding the first half of twenty twenty four. Now shifting to the CF program.

Speaker 1

Hey, Joe, let me answer that question. I think he was referring to the financial milestones. And I think what is that correct, Seamus? You were referring to the financial, trying to understand the various programs And obviously with the cash runway going to okay, that's what I thought.

Speaker 10

Correct. Yes, we For the bank, the deal with CSL.

Speaker 1

Yes. No, no, that's what I thought the question was pertaining to. So we typically don't guide specifically The individual milestone because, they're frankly very lumpy, right? And we don't know when They're going to start and initiate a certain program and when would the catalyst for that program be achieved, right? So And in terms of not disappointing people, I'd rather announce those milestones when we achieve them and more freely Be able to articulate how we were able to accomplish that feat.

Speaker 1

And what's going to be critical here as we go forward is the guidance That we give you with the amount of cash that we have to give you a perspective of kind of what we're burning outside of the CFO And the BARDA relationships as well as the contribution from the Cystic Fibrosis Foundation. So if you take basically the number of years Divided by our cash, you're going to come close to about $120,000,000 in burn. And our goal will be to bring that down even more. So Consequently, it's the guidance that's going to be critical to understanding the timing When these milestones come in and they're pretty significant, obviously, there's over $1,000,000,000 in development milestones spread out over 3 The 5 programs. So, they're pretty meaningful.

Speaker 1

They're going to have significant impact on our operations. And as we achieve them, We will certainly be able to explain how we earned them and why we did. And hopefully, that will provide you Enough comfort that we are well funded into at least for the next 3 years without any revenue Milestones in our forecast, no commercial milestones or revenues are included in our forecast that would be Certainly considered supplemental and we will update the market assuming we do have revenues in 2024.

Speaker 9

And Seamus, I can give you a little bit more color on the OTC program. As you know, rare disease programs Are typically slower to recruit compared to some of the work that we've done with the vaccines. And it's a well known phenomenon. And Specifically, our OTC trial has been conducted in research centers, which can be slower, of course. So we've taken Quite a bit of action to potentially speed that up.

Speaker 9

There are 2 key things that we've done in the near term that's going Help in recruitment and try to speed this up is, we've enhanced the patient experience and we've added a concierge service So that we can pay for all of their all of the patients' needs. And then we've also implemented a Patient stipend to recognize for so a lot of their efforts to be part of these trials. So I think Both of these things and in terms and also opening up more sites is going to help in recruitment in the near term.

Speaker 10

Great. And I guess just as a follow-up question to that though, is there any concern around the Size of the market opportunity for ARCT, for 30 2, but just trying to get a better sense of Usually, there's also demand for rare conditions where there can be benefits. Obviously, there are other treatment options out there. So I'm just wondering if there's an assessment that would make sense as it relates to this program, just because with The CF program advancing as it is, it would seem like resources might be better spent to bring forth other rare disease opportunities. It's just been many, many years pursuing this.

Speaker 10

So just trying to get a better sense of how you guys are thinking.

Speaker 1

That's a great question. And I think, Seamus, if we did not see the success that Horizon Pharma was having with RAVICTI, I think we would have

Speaker 4

had a different perspective. But the fact

Speaker 1

that they're able to generate over 2 $50,000,000 in revenues annually on only 500 patients is a very encouraging opportunity for us. And Assuming that RAVICTI only sequesters ammonia, if our mRNA therapeutics succeed, we can prevent these people from Generating ammonia hopefully, right? And so that or at least keeping the ammonia at a baseline level and hopefully having a normal protein diet. So Obviously, the opportunity to have a small and select Market share is very lucrative financially for a small company like ours. And certainly, we're discouraged by the Slow uptake in the patients and recruitment, but I believe the steps that we take in here And the near term should encourage us to accelerate that process here in the first half of next year?

Speaker 3

Yes, we remain committed to

Speaker 6

the program and it's not just as a valuable asset, but it also represents the Flagship asset for the platform for intravenously dosed or systemically administered mRNA and there's value taken into consideration for that.

Speaker 10

Appreciate it. Thank you, guys.

Speaker 6

Thanks, Seamus.

Operator

The next question comes from Yigal Nochomovitz with Citi. Please proceed.

Speaker 11

Hi, this is Carly on for Yigal. Thanks for taking our questions. We had a couple on the head to head bivalent study. First, just wanted to clarify, Was that study requested by regulators in additional geographies outside of Japan? And then 2nd, more generally, I guess, just wondering how you're thinking about the market opportunity in Japan for Bivalent versus 154 and how that affects Meiji's commercial launch strategy in Japan?

Speaker 11

Thank you.

Speaker 6

Yes. Thank you for the question. All the regulatory agencies have united in their message for monovalent COVID The reason that we're proceeding as a collaboration between Meiji CSL and Arcturus here, the reason We're collecting bivalent data so that we don't have to do it in the future. So if there's ever a reason why If the regulatory agency changes their view or opinion and bivalency becomes more important, Then we will not need to do a trial at that time. We're just taking care of that now.

Speaker 6

It does strengthen the platform though To have monovalent Phase 3 comparison data and then add to that the bivalent comparative data With bivalent comradati. But that's the reason we're proceeding With collecting the bivalent data, just to strengthen the platform and to prevent us from going back and doing a trial if it's ever requested in the future.

Speaker 11

Okay, got it. That makes sense. And then just as one quick follow-up, I think in the past, you and Meiji have maybe talked about an ex Maybe specific vaccine candidate. Just curious if there was an update on the status or the strategy for that program.

Speaker 6

Sure, sure. The XBB vaccine update is a monovalent update. Some of our Partners have started to communicate about this version of the vaccine. It's called ARCT-two thousand three hundred and three. Again, it's a monovalent updated asset.

Speaker 6

And so all the monovalent ARCT 154 data that we're collecting is very meaningful and relevant to that asset. With respect to updates on activities around that asset, we haven't Disclosed those publicly, but there will be an opportunity for us to provide an update on our next call.

Speaker 11

Okay. That's very helpful. Thank you.

Operator

The next question comes from Yanan Zhu with Wells Fargo. Please proceed.

Speaker 7

Hello. This is Kwan on for Yana. Thanks for taking our questions. So two questions on COVID. So the first one is on the data you recently presented at mRNA Healthcare Conference, can you tell us how the data would translate to differentiation and potentially commercial success?

Speaker 7

And the second question is, after the potential approval in December, can you share with CSO So would CSL launch based on this monovalent regional vaccine or Would they wait for the for example, XBB update? Thank you.

Speaker 6

Sure. So with respect to The leading commercial or marketing advantages of this platform, as we've touched on them already in this call, but I think clearly, the buyers here will be very interested in our durability data. They want a more durable vaccine technology. The increased antibodies, of course, has not only an improved immune response, but an implied efficacy benefit That would be interesting. And then as we go deeper into the endemic COVID market and as that gets Established, there's going to be an increased emphasis on safety.

Speaker 6

So I think the meaningfully the fact that this technology is a much lower dose It's going to be emphasized because of the potential safety benefits associated with dose related toxicology. So durability, Increased antibodies and a much lower dose with potential safety benefits is going to be the initial strategy. Now with respect to the you had another question. Could you repeat that for us?

Speaker 7

Sure. So after the potential approval in December, would CSL launch based on this like original vaccine or Will they potentially wait for the XBB update and launch that vaccine in state? Thank you.

Speaker 6

Well, with respect to what we want to do strategically is position ourselves with The right approvals and the manufacturing slots and time lines to address what the market desires or wants. So if we have an approval or approvals in place, then we can proceed to provide an updated monovalent vaccine. If the monovalent If one hundred and fifty four gets approved, then we'll be in a stronger position to provide an updated monovalent vaccine, if that's what If that's where the orders come.

Speaker 9

And hey, this is Pat. And just one other thing to add is, We've as Joe mentioned on his call earlier that we filed for an EMA approval with our partner CSL. Once we get the approval, I think CSL will be looking at what the commercial launch looks like, right? So I think they're in charge of that. But as Joe mentioned, we're currently focused on getting the approvals in the various jurisdictions now.

Speaker 7

Got it. Thanks for all the colors.

Speaker 3

Thank you.

Operator

The next question comes from Pete Sarupolous with Cantor Fitzgerald. Please proceed.

Speaker 12

Hi, Joe, Andy and team. Nice to hear all the updates for the quarter. First question I have for 154, what are your expectations of when you may hear back from the EMA, sort of rough timelines?

Speaker 6

With respect to hearing back from the EMA, this is going to be a considerable process. We haven't provided any tight guidance on when approval is expected. I can refer to Our partner CSL has guided that in 2024, we anticipate approval with EMA.

Speaker 12

All right. And then in terms of, Arcalis, just curious if you could just discuss a little bit, if you can leverage That venture for manufacturing other pipeline candidates and perhaps distribution of drug outside of Japan. And if not already, when do you expect the facilities to be operational? And what will be the manufacturing capacity?

Speaker 1

Yes, I can answer that question for you, Pete. We've kind of guided that the drug substance facility It has been completed. And we've kind of given a timeline for drug product and fill finish. It's probably going to be next year in that Timeframe. So in the meantime, we're going to be supplying Japan and any other country through our current CDMO Group that we've been working with, which includes Catalent, Aldebron, ResiPharm in Europe.

Speaker 1

So until that plant is up and running Up and running and able to support not only Japan, but any other mRNA product And we may be working on our therapeutics. We certainly would be delighted to have that diversification of manufacturing opportunity in the Far East like that. So it's going to be a very strategic asset For MAGI, for us and for CSL and certainly want to be able to utilize it to the best of The opportunity to address whatever the demand may be on a global basis. Is that hopefully that will help

Speaker 12

It does. Thank you very much. And just one last question for 32 for cystic fibrosis. For the Phase 1b patients I know are going to receive 2 doses, will you be looking at any pharmacodynamic markers or clinical outcomes? Again, it's only 2 doses to sort of gauge 32 activity?

Speaker 6

Yes. The primary objective Of the Phase 1b study and just to understand safety and tolerability in actual CF patients with 2 administrations And to understand further what type of administration regimen will be ideal for a nice proof of concept study that's to follow, Assuming success, of course. But that's the now are we looking at other potential markers of success? Yes. But our expectation at this point and the purpose of the study is just to show safety and tolerability in CF patients.

Speaker 6

We'd be very excited To see if multiple administrations are well tolerated because of the recent data that we shared in CF variants that are very Indicative or important data that we bolt on to the human experience that increases the likelihood of success for this program.

Speaker 12

All right. Actually, I'll throw in one last question, if you don't mind. So this isn't an inhaled product. Is there any potential to actually Develop some type of inhaled vaccine to respiratory viruses, either alone or with partner CSL?

Speaker 6

Well, it's a great segue to the opportunity, the overall platform opportunity for our If we're showing proof of concept in large vaccine trials and in therapeutics, it does present the opportunity to potentially combine these. We haven't provided any guidance on this, but it does give people some sense of excitement of the platform in general That there's a lot of opportunity in the future.

Speaker 12

All right. Thank you for taking my questions.

Operator

The next question comes from Ed Arce with H. C. Wainwright. Please proceed.

Speaker 1

Hi, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you for taking our questions. Perhaps First question for ATN and OTC. You mentioned that Phase 2 data from the study in Europe are expected First half of twenty twenty four, can you discuss what about the Phase 1b single ascending dose study in the U.

Speaker 1

S. With 16 patients? When should we Back to some data from that study.

Speaker 6

Correct. The database lock is later this year. Once we've gone through that process, we'll then strategically think of the right time to communicate the data because we need to understand the Timing of the interim Phase 2 data. So we may present these at the same time. We may present them separately, but we haven't made that strategic decision yet.

Speaker 6

But we have informed the market now that the database is getting locked this year for Phase 1 and Phase 1b.

Speaker 1

Understood. And then perhaps switching gears to 32 in CF, We see that both Phase 1 studies are ongoing. When should we expect data from these studies then?

Speaker 6

For the CF study? Yes. Yes, the Phase 1b study. Yes, we've guided some interim Phase 1b data in the first half of next year. With respect to the Phase 1 study, we've now informed the market That we intend to provide a presentation at an appropriate conference in the first half of next year as well.

Speaker 1

Understood. Just one last question from us. This one is probably for Andy. The $35,000,000 milestone received from CSL, can you discuss what's the trigger events for the milestone? Yes, the milestone was related to our COVID in the bivalent program.

Speaker 1

So Hopefully, that will help answer that question. And then we've been able to articulate the progress we're having With the bivalent study in Japan and we're very encouraged by the speed and success of That trial moving quite rapidly. Thank you. Understood. Thank you again for taking my questions.

Speaker 1

Thank you.

Operator

The next question comes from Yale Jen with Laidlaw and Company. Please proceed.

Speaker 7

Good evening and thanks for taking the question. I'm just going to switch gears to the flu vaccine that To be started soon. My question is that given CSL is a major player in this space and Recently, some of the other messenger RNA vaccine, flu vaccine has probably had some issues maybe on the safety or efficacy. So what both you guys and CSL think that how would Your messenger RNA vaccine could potentially overcome some of those hurdles and potentially have a better product.

Speaker 3

Yes, conventional

Speaker 6

messenger RNA flu vaccines have potential challenges relating 2 that are dose related challenges and also durability challenges. And that's where self amplifying mRNA, this next generation technology, Can prove to be different and in good ways that we could because the dose is much lower, there may be some additional flexibilities there With respect to multivalency and including different antigens, but and also what we've shown in the recent data In our infectious disease vaccine trials is that this next generation self amplifying mRNA technology is more durable. And that is especially important in the flu shot space or the flu vaccine space. So those would be areas of differentiation.

Speaker 7

Okay, great. That's very helpful. And then maybe one more question here, which is for the bivalent COVID vaccine. Once they potentially approve in Japan, what is the commercial strategy outside of Japan Was being contemplated and was that something also in the United States as well?

Speaker 6

Well, Right now, all the regulatory interested in monovalent vaccines and not necessarily by the fact that change. So if that does, we're in a position to provide whatever the customer wants, whether that's an updated bivalent technology or monovalent.

Operator

Thank you. At this time, I would like to turn the call back over to Mr. Payne for closing remarks.

Speaker 6

Yes. Thanks, everyone, for participating on Call, if there's any remaining questions, don't hesitate to reach out to the team and we'll get back to you as soon as we can. Thanks to everyone and good night.

Operator

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great

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Earnings Conference Call
Arcturus Therapeutics Q3 2023
00:00 / 00:00
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