Thanks, everyone, for coming. My name is Yanan Zhu. I'm one of the biotech analysts here at Wells Fargo. We're privileged to have Arcturus Therapeutics' management team with us for this fireside chat. With me are Joe Payne, President and CEO, and Andy Sassine, Chief Financial Officer. Joe and Andy, thank you for joining us. Yanan, thank you for the invitation. It's good to be with you. Great. First of all, congrats on the EU acceptance of filing, as announced two days ago. I'm sure, you know, we'll talk a lot about that, but maybe just to get this question out of the way, what is the value proposition for ARCT-154 as a COVID-19 mRNA vaccine? How is it relevant in this post-pandemic era that we're in? Sure, sure. So, ARCT-154 is a self-amplifying messenger RNA vaccine, so this is a next-generation technology, and it brings with it differentiating benefits, relative to conventional mRNA vaccines that everyone here is very familiar with, if not all of us have been injected with. So, what we have shown in clinical trials is that this next-generation technology is a longer-lasting, more durable vaccine. We've shown that it's less reactogenic because it's a much lower dose technology. So we're injecting 83%-90% lower material relative to conventional messenger RNA, and that brings with it certain benefits with respect to safety and reactogenicity, less pain, swelling, redness in the arm, which is a benefit that's attractive. And also it has higher antibodies, and everyone here likes more antibodies, more protection. Another unique benefit to self-amplifying mRNA is it's not just a higher amount of antibodies, but a broader spectrum of antibodies. So it's a technology that may not need to be updated as frequently as conventional messenger RNA, because of this. Got it. That's very helpful. Then, let's perhaps talk about the EU, EU filing. I think a lot of investors were surprised with the EU filing. What is the background? How does this come about? Is this you know always been a strategy, or is this something that's informed by what you saw in the Japan study, for example- Right as you recently reported? Let's start from there. Yeah, well, early in the regulatory pathway with, for ARCT-154, this vaccine, we initially started to evaluate it in the United States, but we quickly shifted to Singapore, and then subsequent to that, Vietnam and Japan. So the bulk of our clinical development was in Asia or Southeast Asia, and because of that, we got traction with Japan very early. And so that explains why we are initially did our phase III trials in Vietnam and Japan. But of course, we've partnered this vaccine with CSL, and CSL has ambition to develop this outside of just Japan. And I think we surprised people because I think there was perhaps a naive assumption that there may be additional trials that are needed in order to get this platform approved in other countries. And what we've shown with this communication in this press release is that's not the case. At least in Europe, these 27 additional countries are at least our initial expectation here is that no additional trials are needed to gain market authorization in Europe. And so that was very encouraging. But the impetus or energy behind it is our partner, CSL, has global rights to U.S. and Europe and other premier markets. And so they, of course, you know, are providing positive energy to getting this developed outside of Japan. Got it. Got it. And what's the read-through to the acceptance of filing? Does that have any indication that the data was appealing, for example, to the EU regulators? Yeah, yeah. So you have these pre-meetings with these... Every one of these regulatory agencies, you have either a Pre-IND, for example, in the U.S., you have a pre-EMA meeting with the EMA, and you get alignment on what sort of data is required for an MAA or a Market Authorization Application. And we got alignment with that, and it does help clarify that, reiterating what I said earlier, is that we do not need to do an additional trial, that the trials we've completed in U.S., Singapore, Vietnam, and Japan are sufficient for market authorization. They still need to go through the evaluation and review process, of course, but we're very encouraged by this development. Got it. Got it. When could we expect a decision from EU? Is this in line with a typical therapeutics, or is vaccine on a different track? Well, yeah, typically it's a few quarters to get through this process. But what we've guided is 2024. We just conservatively guided 2024. As soon as possible next year, we hope to get approval in the EU. Got it. Got it. And what about the U.S.? Can the same package be used to support a U.S. filing? That is a great question, and it's the right question. CSL will be guiding on that, our partner. You know, having said that, I think it's safe to assume, based upon CSL's communications, that they're very ambitious with this platform and with respect to COVID and flu. I think it's safe to say they don't intend to stop with the European Union. There's the United Kingdom and U.S. that I'm sure are on the horizon for sure. Got it. Right. I think in the past, you also talked about Japan. If it's approved in Japan, some other geographies will have also more kind of expedited review or some kind of a benefit in other geographies. Yeah. Could you remind us about that? Yeah. The PMDA, the regulatory agency in Japan, is very rigorous, especially with respect to safety. They're well-respected, well-known globally, and because of that, they have direct and an immediate influence in Southeast Asia, but also other countries throughout, you know, throughout the world. So, you know, we view the European Union as an exciting opportunity of 27 countries, but a Japan approval would immediately provide impact in Southeast Asia and pockets throughout the world that are also very interesting. Right. So maybe let's talk about Japan approval. Can you give us, you know, an update on the regulatory process in Japan, and when do you expect the decision? Yeah. Nothing out of the ordinary in this update. We've gone through a few iterations and review cycles. You can appreciate that there's audits that have been ongoing by the PMDA. You know, we conducted our trials in not only Vietnam, but Japan, and so some audits have been completed, and so that's good to report on successfully. But nothing out of the ordinary. I think we're well on track for an approval later this year. Right. Right. I thought your partner, Meiji, had a slide, one slide dedicated with some timeline drawn, with... I don't know, maybe there's a, the end of the bar. A t, I forgot whether it's November or something. Yeah, the end of October is what they drew on a slide that they presented to their investors. Mm-hmm. Arcturus is conservatively communicating Q4, but Meiji did also. They're a publicly traded company, and they presented their to their investors approximately the end of October. Got it. Got it. And then, of course, a big question is, once this is approved, would you, Meiji, CSL, decide to supply the Japan market with the vaccine in its current iteration, or would you probably pursue a newer version? The short answer to that is whatever the customer wants and at that time. So one of the wonderful benefits of mRNA vaccines is clock speed, and we can immediately interject a variant of interest or a variant concern at that time of approval. So once it's approved, we can provide them either a variant of times past or relatively aged, or we can provide a vaccine that can be efficiently updated with the new variant of concern. You may remember, Yanan, on our conference call, we announced that Meiji and, you know, CSL gave us $24 million to start building inventory. So, obviously, we were encouraged by, you know, that commitment and, you know, if they believe that, you know, the vaccine is relevant, then we'll be ready to supply it this year. So that's something that, you know, we're gonna be prepared for, and they are supporting that. Has that inventory been manufactured or is that a prepayment? Correct. That's ready made. Ready to distribute if needed. Correct. Got it. Interesting. Joe, you mentioned whatever the customer want. Who is the customer? Yeah. Is that the- Well, Just- In Japan, there's one customer. It's the government of Japan. They, they have communicated that that will continue until the end of the fiscal year, which is the end of Q1, approximately, of 2024. They may extend that. Some countries have chosen to do that. They may transition it to the private market at that time, but we're prepared in either case because our partner is Meiji. For those unfamiliar with Meiji, they're the number one flu shot company in Japan. And so whether we're dealing with the government as a customer or with the local pharmacies in Japan, in the private sector, it should be a smooth transition in either case, as long as Meiji is our partner. So we're prepared in either scenario throughout 2024. But in the early stages... the late stages of 2023 and the early stages of 2024, it's, we're expecting just a single customer, and that would be the government of Japan. Got it. Got it. Maybe a couple, maybe one more question on this topic, because Daiichi got its vaccine approved recently and made a somewhat unexpected announcement that it's not going to supply the market with that version of the vaccine, which is based on, I guess, the original virus. Correct. Right? So that leads to some people to speculate or infer that maybe the same thing will or is going to happen with this another entrant, which will be you, Meiji, right? I understand the speculative question because of the Daiichi precedent, but I remind people that Daiichi is a conventional messenger RNA vaccine. It is not a self-amplifying messenger RNA vaccine, so it's gonna have a different variant durability profile. So conventional mRNA serves its role, serves its purpose. It needs to be updated frequently as being a conventional messenger RNA, and Daiichi is in that bin. Ours is a self-amplifying messenger RNA or a longer-lasting mRNA vaccine, likely. So they may be treated differently. Having said that, they may request us to update the vaccine as well, so we're prepared to provide a vaccine as is, ARCT-154. That may be sufficient for the variant of interest or variant of concern at the time, or we're prepared to update it efficiently if needed. Okay. I guess the key thing here is that we don't know whether Daiichi's decision was based on their own volition or based on what they were told, if- Correct. Right? Correct. Got it. Can you tell us anything about the next vaccine that is in the works? I think in your partner, Meiji's, again, investor presentation, they do have a next gen. They have an XBB in there, correct? Right. Yeah. Presumably that's your next gen. Who, which party is working on that, and how quickly can it be developed, brought to market? I do think Meiji does... Again, the bar stops somewhere. You know, they did give us some timeline. Could you comment on that, mix of questions? Well, a couple comments. First of all, the regulatory agencies and the you know, the academics and the WHO have all unified on monovalency. There used to be some confusion and debate whether we should do a bivalent vaccine going forward or monovalent vaccine, and thankfully, all of them have unified with monovalency going forward. Now, as to how often we update it and with which variant of concern we update it with, that's also under discussion. Thankfully, in the messenger RNA space, we can quickly make each of these, or at least design them and have them queued up, ready to implement right into the manufacturing process. And this isn't different for Arcturus. I'm fully aware, and also, I'm pretty much certain that Moderna and Pfizer and other conventional mRNA companies are updating their vaccine just in a similar manner as Arcturus. So we're all equally in a position to move with any variant of concern, if it's needed, and it doesn't take a lot of money to be prepared to do that. I see. Could we kind of rely on Meiji's diagram to have a sense of when the next vaccine can be brought to market? Loosely, yes. However, I think it's better to look at the clock speed of other mRNA companies in general. I think that would serve as a good guide to how efficiently we can update our vaccine. Not just a graph with Meiji, but how quickly other mRNA vaccines can update and manufacture and distribute the vaccine. Okay. Got it. Got it. And any comment on potential pricing if this is approved in Japan and launched? Pricing hasn't been disclosed in Japan, so- I mean, I think you probably have to look at Japan a little differently because the government has committed and given us $115 million in grants to build our factory called Arcalis. And so it's a little bit different endeavor and strategic, you know, objective of the Japanese government to become self-sufficient in future pandemics and to be able to not have to rely on foreign sources. And so I think whatever price they give us is gonna be certainly reasonable because that money is going back into the Japan economy, right? They're gonna be hiring Japanese workers who are gonna be, you know, making the vaccine, so it's gonna be a direct impact on their economy as well as the indirect impact, you know, in terms of the, you know, services and supplies that will be surrounding the distribution of that vaccine in Japan. It's a national interest, you know, movement as well, so I think that's something to take into account, Yanan, as a very, you know, important factor in the Japan decision in terms of, you know, what's an equitable value for the vaccine. Got it. And, I know it's hard to predict demand, but any number you can provide to help investors estimate? Sure. Well, 75 million flu shots are administered in Japan on an annual basis. In Japan, the COVID shot has not been politicized like we've maybe familiarized ourselves here in the United States. They do not have that conflicting issue in Japan. So they, you know, it's been reported that approximately 82 million COVID shots were administered in the last wave of boosters. So it's roughly equivalent in Japan, but I think the best reference, at least right now, would be the, you know, how many flu shots are distributed annually in Japan, and that's around 75 million. But whether, you know, it's a factor of two below that or higher than that, I think that's a reasonable range. The Japanese population is among the highest in the world in terms of the number of COVID shots per person. It's roughly 3.9, so that's very encouraging for us, you know, as a, as a potential, you know, partnership and supplier into that market, that it should be pretty robust, especially with a partner like Meiji. Got it. Got it. Remind us of the economics of your collaboration with CSL, in terms of profit share, and how does the addition of the third partner, Meiji, affects the economics? Well, the way we've communicated it is that it's a 60/40% profit, you know, share with CSL on a global basis. However, in Japan, it's kind of like a three-way partnership, so you can assume roughly, you know, a third of the economics to each partner, you know, just to be on the safe side. Which is very generous because, you know, we did not have to invest any money in Japan. So that was undertaken by Meiji and the government, and so consequently, we'd be a direct beneficiary of the economics of any vaccine sold in Japan. Great. Great. Then lastly, on the vaccine topic, I was wondering about when we might see additional durability data from the phase III Japan study? What is the expected durability of the Pfizer booster arm, and what is your expectation for the durability of the ARCT-154 arm? Well, based on our phase I/II data that we've collected in the United States and Singapore, we saw 1 year durability with ARCT-154 against all the variants of concern that were tested. So we view that as very promising, and I think it helps us predict what, you know, may come out of this phase III study. As for the timing of the phase III data set. Now, again, this is a data set where it's directly comparing ARCT-154 to Comirnaty or the Pfizer vaccine. So, you know, and the durability of that. That data set is likely gonna come out later this year. It's difficult to give specific guidance because there's more than just Arcturus involved here. There's Meiji and CSL, both publicly traded companies, and we usually get together and harmonize our external messaging and communication strategy before we specifically guide the timing of such data sets. But I think it's fair to say, later this year, we'll be able to provide that. Got it. I look forward to that. Yeah. You also have two data readouts from your pipeline. I have to... Hopefully, we can have a good discussion on those as well. Thanks for all the color with the COVID vaccine. That's very helpful. For OTC deficiency program, when can we expect the interim data? Will it be presented at a medical meeting or press release? Will the data be phase II only, or could we also see the phase I-B data, phase I-B cohort in there? It's a great question. The phase I-B has completed dosing, so the timing of that data, I think, is reasonable to expect later this year. With respect to the phase II multiple dose data, we've shared consistently that we would like to, whenever we have material data that's ready to present, that we will share that. The mechanism of how we've shared that, we haven't provided that level of detail, whether that's in a press release or at a suitable conference. You've asked an interesting question: would we couple the phase I-B data with that data, the phase II, material data? That's a good question. I think it's likely that we would use that as an opportunity to share both those data sets together, but we haven't really promised or guided that, but I think that that's reasonable to expect that. Got it. Perhaps can you review the design of the phase II? How many doses? Is it blinded? What are the endpoints? What would be the bar for success on these endpoints? Yeah. The phase II trial is a multiple dose trial. It's conducted in several countries in Europe. There's two dose cohorts, so there's a lower dose and a higher dose, and within each cohort, there's six administrations. The size of each cohort is 12, so 12 participants in each. It is placebo-controlled, three to one, so nine people will be receiving drug, three people will be receiving placebo, and at a lower dose and a higher dose, and again, six administrations. This is a multiple dose trial, and each administration is two weeks apart. And once we have any material data to share, we'll use that opportunity to do so. Got it. In terms of endpoints, any- Yeah, I think the key endpoint here is biomarker-related ammonia. So, this is a urea cycle disorder, and OTC deficient patients have high levels of ammonia, and so this can be readily measured, and it, you know, we'll be tracking that before, during, and after treatment. But there's other biomarkers, other amino acid, like glutamate, and we're looking at OTC itself. But the central key biomarker here is ammonia that we'll be looking at. Would the patients be on ammonia scavengers on trial? Some may be. A lot of these patients could be stable adults that are just monitoring their disease or managing their disease with diet. So some are on Ravicti or ammonia scavengers. So if they are not on ammonia scavengers, we can readily look at their ammonia levels. If they are on ammonia scavengers, then we can look at other biomarkers that we've mentioned, like glutamate and OTC. And together, that data set can be, you know, we can triangulate and compile that data, and hopefully we'll have a convincing set of data to communicate externally and to communicate to regulators and to subsequent patients to recruit for subsequent trials and a pivotal trial down the road, hopefully. Got it. Any color on ARCT-032 on these on ammonia, for example? Is there a kind of a number that doctors would think that's clinically meaningful? It's not a number that's... You know, whether they're starting the trial at very high or high or moderate levels, what we're looking to see is normalization of the ammonia levels to the, what would be considered the normal range. So, you know, that's what we're looking to find or hope to see, is normalization of ammonia. Great. Any clinical endpoint, or perhaps this too short of a duration to be contemplating a clinical endpoint? No, yeah, we're just looking at biomarkers. Of course, we'll be collecting anecdotal data from the patient experience. Remember, there's two different dose levels in phase II. So, you know, in concept, we can build the OTC in their liver quickly, or we can build it moderately quick, and that experience could be the same experience or it could be different, and we want to collect that sort of data from the patients and just gauge their experience at a higher dose or a lower dose. But the primary objective here is biological proof of concept and looking at normalization of ammonia. Got it. Got it. If the data is successful, what are the next steps for this program? A pivotal trial, with the consideration that the children are the most seriously impacted, especially young males, it's an X-linked disorder. How we branch those studies in to a pivotal trial will add a, you know, a layer of extra detail. We want to advance this into a pivotal trial, that a registrational type trial is our next step for this program. Great. How is your compound differentiated from competitors such as Moderna? Well, we have... We differentiate on with respect to a timeline. I think we have a significant head start. We initiated our clinical trials a couple of years ago. But we also have orphan drug designation here in the United States and Europe for lipid nanoparticle mRNA product for OTC, so that adds a layer of exclusivity provisions and commercial exclusivity. But from a scientific perspective, we differentiate with our delivery technology. This is very important for systemic administrations of messenger RNA. The delivery technology has to be highly optimized for periportal hepatocytes, and it has to be optimized for biodegradable clearance. These lipids need to do their job and then get out of the body, or at least clear rapidly. And we've, our technology is proprietary to Arcturus, and it's called LUNAR. This LUNAR lipid nanoparticle delivery technology is definitely different, multiple degrees of separation from any other, company doing systemic delivery of messenger RNA. So that's a key differentiator. Another one is our proprietary purification process. When you're administering high doses of messenger RNA systemically, you can imagine it's very important to have a high quality, highly pure messenger RNA because there's sometimes, if you do not purify the messenger RNA sufficiently, you could have, these double-stranded impurities that could provide to toxicology that's unwanted. So we at Arcturus have applied a proprietary purification process to the messenger RNA that's unique.... So between the purification IP and the delivery IP, I think those would be a scientific degree or level of differentiation from others in the space. Great. Thanks for that overview. Maybe let's talk about the cystic fibrosis program and its progress. I think you have guided for interim data from the healthy volunteer study for the cystic fibrosis product candidate. Will that, you know, guided for this year, will that be at a medical conference or a press release? We haven't chosen which conference to present this, but yes, we would like to present that data later this year. It was very important to us. You can appreciate that no one on this planet has ever inhaled our LUNAR delivery technology until earlier this year, and we had 32 subjects that volunteered at four different dose levels, and they've all inhaled our technology now, and we're very appreciative of that. We got great data from this, and we look forward to sharing it later this year. It'll give the scientific community an opportunity to compare the results of that phase I study to other lipid nanoparticles from times past. From generations ago to very recently, people have tried to inhale RNA therapeutics through lipid nanoparticle delivery and, you know, those historical phase I toxicology data sets can be therefore compared to LUNAR, and I think that could be a meaningful process. So we look forward to that later this year. Got it. And so the focus is on safety for that? Yeah. Yes, for especially in cystic fibrosis patients, they have compromised lungs. The last thing you want to do is introduce a therapeutic into the lungs of CF patients that would result in undesired inflammation or immune responses, right? So it's very important that we have a relatively benign delivery system, and that's very important to us. I see. I see. Is it possible to point us to some of the potential endpoints, like a lung lavage, and look for inflammatory markers, something like that? But what the readout here? No, there, there's gonna be nothing out of the ordinary. These sorts of trials are well precedented, the inhalation of lipid nanoparticles and mRNA therapeutics. So, you know, there were certain characteristics, certain, you know, data that was collected. We haven't explained that in detail. There'll be a time to do so, but there's nothing out of the ordinary there that we did. Got it. Have you initiated the phase I-B study in cystic fibrosis patients in New Zealand? The next update with respect to our patient recruitment activities for our Phase 1b study is probably going to be at our quarterly call in November. We announced recently at our quarterly call that we received approval to proceed into patients, and that was an exciting milestone. We're going to recruit six to eight patients in New Zealand and evaluate our technology for safety and tolerability, and we're also looking at lung clearance index as well. So LCI, it's called, and this is a very sensitive lung inhalation test, and we can track the breathing of these patients before, during, and after a two-dose treatment of our therapeutic to CF patients. So we're excited to see the, you know, you know, we may have some additional data to share. The primary purpose of this study, of course, is safety and tolerability. It is a Phase 1b study in CF patients. Got it. I hope, if you could, if we could end this discussion with an overview of the differentiation of your cystic fibrosis program with Moderna's and program. Yeah. Our CF product is very different from others. First of all, we properly modify the messenger RNA. Previous attempts of inhaling messenger RNA were done on unmodified messenger RNA. When you properly modify the messenger RNA to suppress undesired immune responses, it means you can dose higher, and we've done that. Another big difference is that we've purified the messenger RNA with a proprietary process that Arcturus owns, and by purifying the mRNA, again, it's cleaner, devoid of double-stranded impurities, and that again allows us to dose it higher, have a broader therapeutic index, and that's a key difference and the most important difference, however, is the delivery technology. When people embark on the process of inhaling messenger RNA, they will use an off-the-shelf delivery technology or a delivery technology that was used for siRNA or a delivery technology that was used for the liver or other applications. The delivery technology that we use at Arcturus has been highly optimized over the last 10 years for bronchial epithelial cell delivery. Our delivery technology survives the nebulization process, survives the patient's sputum, actual CF patient's sputum, and allows the technology to biodistribute and transfect and enter bronchial epithelial cells and break out of the endosome. Each of those stages required a lot of learning curve and a lot of resources and time and innovation. And so this is a key differentiator for previous attempts, is our LUNAR delivery technology, the biodegradable, highly optimized platform to deliver large RNA molecules to bronchial epithelial cells. So if you combine those three changes together, those are all three big changes. We think we have a very reasonable shot on goal. The last differentiator, just to point out, is we have shown our CF product works very well in CF ferrets. These are ferrets that have been genetically engineered with Cystic Fibrosis. Their lungs are filled with phlegm, and they're very predictive and representative of the human condition. And so we believe that that's really not just key data, but data that we haven't seen other companies or competitors show. So that's a point of differentiation as well. Great. Great. Thank you for all the helpful updates. Looks like our time is up for this session. Again, I appreciate your time. Thanks, Yanan, and thanks, everybody.