Thanks to everyone for joining us today. Appreciate taking the time out. My name is Myles Minter. I'm a senior biotech analyst here at William Blair. Cover the neurosciences and genetic medicines, the latter of which we'll be talking about today with the management of Arcturus Therapeutics, which I have on the call. Before we do get started today with the fireside chat, I do have to point you to important disclosures that are available at williamblair.com. If you do have any questions throughout the chat, I will try and work them in to the best of my ability. You can actually put them in the chat box available at the bottom of the Zoom screen, or alternatively, you can email them to me at mminter@williamblair.com. With all that preamble out of the way, my pleasure to introduce Joe Payne, the Chief Executive Officer; Andy Sassine, Chief Financial Officer; and Juergen Froehlich, the Chief Medical Officer of Arcturus Therapeutics. Thanks very much for taking the time out to have a chat with me today. Joe, just really wanted to start the conversation. Obviously, I know the Arcturus story well, but for any investors that are listening right now that are maybe new to the story, maybe you can just provide a really quick overview of the company, talk a little bit about the STARR and LUNAR platforms that you have that have been commercialized as KOSTAIVE, but also some key therapeutic assets in clinical development that we'll talk about today. Great. Thanks, Myles. It's good to be with you. To begin, Arcturus is a messenger RNA therapeutics and vaccines company. We have very unique proprietary and differentiating technologies that enable these platforms. On the vaccine side, we utilize a next-generation mRNA technology called self-amplifying mRNA. The registered trademark name for this technology is STARR, or S-T-A-R-R. Self-amplifying mRNA is different from a conventional mRNA in that it expresses protein for an extended period of time. That means in the vaccine arena, you have elevated neutralizing antibodies that are generated with this technology for an extended period of time or a longer-lasting vaccine. We do so at a much lower dose level. It's a differentiating next-generation mRNA technology. On the therapeutic side, it's key to focus in on our delivery technology that's different from others. Our lipid nanoparticle is called LUNAR, or L-U-N-A-R, as the registered trademark for that technology. It is different. It is chemically different. It is known to be and proven to be biodegradable. In multiple clinical trials, we have shown that these lipid components, these lipid ingredients of the nanoparticle technology, degrade and clear from the body within 48 hours after systemic administration, for example. We have also spent a lot of money and a lot of time investing in optimizing this LUNAR technology for specific cell types, whether that is myocytes in the arm after an intramuscular injection or accessing bronchial epithelial cells after inhaled mRNA delivery. Likewise, after systemically administered administration through an IV administration, we can access the periportal hepatocytes, which is important for urea cycle disorders. We have flagship assets in each of these areas. We have an approved vaccine, a COVID vaccine called KOSTAIVE. It's approved in 31 countries and continues to expand. We'll be able to maybe touch on that a little bit on this call. We have a flagship asset in our lung franchise for inhaled mRNA for cystic fibrosis. We have a flagship asset in the liver franchise after a systemic administration of mRNA for ornithine transcarbamylase deficiency. Each of these flagships are very exciting assets, but they represent the first of its kind within the platform. If they work and as they work and as they succeed, it means that there's other opportunities behind them. I'll turn the time back over to you, Myles. Nice. Thanks, Joe. I did want to keep the conversation today pretty CF-focused, but we will get some time later to ask about the rest of the franchise. We did host the head of the Northwell Health CF Center in New York there, Dr. Joan DeCelie-Germana, for an investor lunch last week. Part of the takeaways was, where is the unmet need in CF, and where are these inhaled mRNA lipid nanoparticle therapies going to be used? One of the things that she said in her center's experience was up to a third of her patients might not even be CFTR modulator amenable, and it is about 40% that combine into that non-responder category. That one side seemed pretty high to me. I think the common number thrown around is 10%. Maybe just in your terms, can you sort of describe where you would potentially use ARCT-032 or LUNAR CF? What is the target population here, and how prevalent is that? The number that we utilize is 18% of the CF community does not respond or benefit from modulators, and that's a significant percentage. Juergen, anything to add to that? Yeah, let me add that any of the currently available CFTR modulator combinations will not provide a complete CFTR function. They are not restoring it completely. There are patients who have a genetic makeup that does not allow them to produce CFTR, and then CFTR modulators by definition do not work. There is also a significant number of patients who either did not benefit from CFTR, although they were eligible, or they do not tolerate CFTR modulators. The total of these in the CF, according to the U.S. CF registry, is about 18% with the last update. I understand that Dr. Joan DeCelie-Germana may have a more severe patient population, so it is more on the severe side of the spectrum, but there are plenty of patients who do need a different therapy in addition or outside of CFTR modulators. I'd like to interject here that modulators are in the business of modulating or fixing a broken transporter. That's not what we do. We're in the business of replacing, building a brand new CFTR. In this initial push, we're initially focused on the 18% of the community that doesn't respond to modulators. Of course, after we establish some proof of concept there, ours is a topical administration that can be complementary to the modulators. We're not in the business of replacing them. We could ultimately complement that therapy and expand beyond there. There's extraordinary growth opportunity in the TAM. Yeah. Makes sense. Let's start with that 18% of patients that are either non-amenable or not well responding or not tolerating CFTR modulators, and there's clear unmet need. What is the prognosis for those patients? We obviously hear about the responders to Trikafta that are having great responses, and it's life-changing. For those patients that can't actually get that or don't get a response there, I'd love to hear your version of what the outlook is for those patients. Again, Dr. DeCelie-Germana was talking about that sort of patient population showing a 2% FEV1 decline per year. They're talking about twice-daily sort of lung clearance mechanisms. Maybe you can kind of explain what the current outlook is for those patients. Yeah. I'm happy to start. Yeah. You You expect those patients to be in a state of lung function roughly before Trikafta was approved. Trikafta was approved in 2018, Ivacaftor approved in 2012. In the 10 years after approval of Ivacaftor plus adding on Trikafta, the mortality in patients, the yearly mortality, decreased from 1.5% to 0.7% in 10 years. The currently expected survival of a newborn with CF changed from 39 years to 61 years. This gives you an idea. Those patients who cannot take Trikafta or Ivacaftor, they still have worse lung function. They have more rapid decline of lung function, but they also have an increased number of these pulmonary exacerbations that make them worse several times a year. They further contribute to decreases in lung function. Okay. Maybe you can talk a little bit about the persistency or how frequent these patients are using lung clearance techniques like CPAP mask, breathing in Pulmozyme, salbutamol, like massaging, basically trying to clear that mucus. They're doing that on a daily basis or twice-daily basis. I'm asking this from a perspective of when we think about inhaled mRNA therapeutics, which we'll talk about, and the frequency at which they dose that. Is that sort of treatment paradigm compatible with the current standard of care that they're currently managing their CF with? Yeah. I can take this there. Typical patients have their morning routine of different clearance techniques. They also use a vibrating vest. It shakes them up and shakes the mucus loose. They do this regularly first thing in the morning and then start with the other therapies, including Pulmozyme or inhaled antibiotics. Our drug perfectly fits into this routine. This is just another five minutes of administration with another inhalator. This is not an extra; it's not an additional treatment burden, I would say. Okay. Makes sense. Let's talk a little bit about safety and then want to go on to sort of efficacy expectations and what we're trying to aim for here. A lot of the safety, obviously, components here. One is the lipid nanoparticle. The other is the mRNA cargo that you're delivering. Maybe on the lipid nanoparticle side, can you talk about differentiation that you may have with your LUNAR platform here versus peers that are also in the space like Vertex and Moderna and ReCode also has a program there? Historically, companies like Translate Bio and now at Sanofi that have tried this before. Maybe you can talk a little bit about that LNP differentiation you have. I'll address this one, Juergen. Our LUNAR delivery technology isn't just a different trademark name. It is a different chemistry. I want to emphasize the importance of this. We've showcased the differences here in preclinical animal models, and we hope that that replicates in the human clinical trials that are ongoing right now. The key difference is the chemistry of the lipids is different, meaning the cores of our lipid ingredients are thiocarbamate cores, which means there's oxygen, nitrogen, and sulfur that provide handles for the body to hydrolyze, break up these lipids, and prevent them from accumulating. You do not want accumulating lipids in your liver after systemic administration, in your arm after vaccine administration, or, of course, in your lungs after frequent inhaled administrations. That element of biodegradability is important. We've also optimized our delivery technology to survive the nebulization process. That was a multi-year optimization process. After it's nebulized and enters the lung, it needs to survive and deal with the sputum and the phlegm in the lungs. We went through a 10,000-fold optimization process to improve the stability of these particles in actual CF patient sputum that was provided and donated by the CF Foundation to us to do these studies. We went through that process. That's just half the battle. You now need to design these nanoparticles and these lipids to stick to and transfect and enter bronchial epithelial cells. These are a completely different cell type. This is not hepatocytes in the liver. This isn't like myocytes in the arm. They're completely different on the surface. We had to go through a considerable multi-year process to optimize the transfection getting into these cells. Breaking out of the endosome, again, once it's inside the cell of a bronchial epithelial cell, you need to optimize these lipid nanoparticles to break out of the endosome. That biochemical process of an aging endosome and activating the particle to break out of that endosome is different in a bronchial epithelial cell. It's not the same as hepatocytes or myocytes. We had to go through a multi-year process there. It's been over a decade, and that's brought us to this point today. Our team has done extraordinary work addressing these challenges along the way. When we say it's different, it's not just chemically different, but it's been highly optimized for each of these challenges that can encumber other technologies. Makes sense. Maybe you can talk a little bit about that biodegradability and the timelines at which you expect that to occur. Obviously, I think there's a decent hypothesis out there that Translate Bio may have accumulated LNP in the lungs, and that's what led to febrile reactions. What is the preclinical data that you point to to say, "Hey, we're clearing out this lipid nanoparticle completely from systemic circulation in a given amount of time? We have got plenty of preclinical data, but we also have human clinical data. After a systemic administration, that is even more invasive. Imagine injecting lipid nanoparticles throughout your whole body. We have shown in that setting multiple times in multiple clinical trials that the lipids clear within 48 hours. They are no longer measurable. It used to be a very clear differentiator for us. I think the field has caught up and is trying to develop biodegradable technologies now. That is something we established years ago with our platform in terms of biodegradability and clearance. Okay. We have seen some phase one data of this product both in healthy volunteers and then two administrations in CF patients as well. That was presented at the ECFS. There have been some on-call presentations as well. A couple of questions we get is pretty interesting efficacy signal originally here in those CF patients. There were some questions over safety signals that have popped up in the phase one healthy volunteer portion. I think there were some transient mild respiratory symptoms. There was a cohort that added some salbutamol in the administration, and it appeared to alleviate those. I just wanted to get your thoughts on those transient respiratory symptoms, something of concern as you're moving through development here. Are you worried about headache, chills, myalgia, and potential febrile reactions there, or you think you've got a suitable safety profile? I'll pass this over to Juergen shortly. Just to summarize the dataset, we have 32 subjects that participated in a phase one trial, an additional seven CF patients that went through a two-administration phase one B trial. That collective data was more than sufficient. We were very happy with it to allow us to transition to phase two. To deal with the nuance and the particulars, I think that's helpful for investors to hear. Juergen, I'll turn it over to you to comment on some of these questions. Thank you, Joe. In our healthy volunteer study, it was the first part of our phase one study. We enrolled four dose groups from 3 milligrams up to 27 milligrams. 27 is a very high dose group. Healthy volunteers, who never had any inhalation therapies before, usually are more sensitive to irritabilities. Any inhaled drug is an irritant one way or the other. What we did see, we saw with increasing doses, slight increase in those airway irritative events. This could be a little bit of chest pain or a little bit of shortness of breath. They were only mild of nature. In our second highest dose group of 18 milligrams, after half of them were enrolled, our safety committee discussed it with us and suggested that for the subsequent participants in this healthy volunteer study, we administer salbutamol in low dose just 30 minutes before the administration. We did this, and this mitigated all these events. We did not see any lung function decreases anymore. They did not report any symptoms anymore. In our CF patients, and CF patients are used to take inhaled drugs. We expected, and we did see that they did not have many of these events. If there were few, they were only mild. They were completely mitigated by albuterol. What is albuterol? Albuterol is basically just treating against potential spasm in the airways. It is an inhaled, a short-acting drug that is given very frequently. We administer it about 30 minutes before. The maximum effect is 30-60 minutes, but then quickly weans off. When we do our lung function measurements as an effect of our trials, we usually do it before albuterol. This does not affect at all our lung function assessments in the trials. That's helpful. Just to clarify, the CF patients had two administrations as well. You've treated them twice. If you were going to see potential increased reactogenicity, you probably would have seen it with the second dose. Okay. We would have seen this. On purpose, we took the highest dose regimen and split it in a smaller dose at the beginning and two days later, the higher dose. Yep. Yep. Okay. Final one on safety. I want to move on to efficacy in the time we have left. It's inhaled mRNA, LNPs. Any quantifiable systemic exposure? Did you take blood draws from those patients? Can you find drug in the systemic compartment? Go ahead. Yeah. I can address this. As we inhale our mRNA product, and we don't expect any systemic concentrations. If we did not see any systemic mRNA concentration, they were all below level of detection. On the lipid side, at the higher doses, very sporadically, we saw very, very low concentrations that were just above the lower level of detection. I think we confidently can say we don't see any systemic absorption of it. Okay. Cool. Maybe just on the efficacy considerations, an open-ended question to start with. You've got interim data from the phase two trial coming up sometime here in the second quarter. Maybe you can just talk about the types of patients you've enrolled, what sort of data that you intend on disclosing, anything you can tell us about the number of patients and characteristics you'll be reporting on. Yeah. There are 12 subjects that are involved in this trial. That was negotiated and agreed upon by the FDA. If we establish POC with respect to FEV1 and safe and well-tolerated and lung function improvements, that will be sufficient to advance this further into development. That was very clear. When we say interim, that means it is going to be a subset of that 12. Other than that, Juergen, anything else to add? Yeah. We are measuring lung function. Every% predicted FEV1 is a surrogate endpoint for these types of trials. We will measure this several times during the study. We are also measuring the CFQR, which is the Cystic Fibrosis Questionnaire-Revised, particular for the pulmonary domain. This is an established, validated, patient-oriented outcome instrument. CFTR modulators have shown that you see an improvement within four weeks of treatment. We are measuring this as a secondary endpoint. We are also doing high-resolution CT scans at baseline. We are offering this on an optional basis to the patients as a repeat test after four weeks of treatment. We will be doing functional assessments with special technologies to look at the thickness of the airways, any airway trapping, or any mucus closure of airways. Okay. We also negotiated with the FDA that many of these treatments can be done at home. That was viewed positively. Why would the FDA allow us to do this? Simply because we had 39 subjects of data in phase I and phase IB that gave them comfort on the safety profile of ARCT-032. A larger percentage of our treatments are done at home. There are fewer study visits, for example, that make this a more convenient trial to participate in. Makes sense. You have commented that if you saw something in the realm of a 3% point improvement or potentially greater in absolute FEV1, that would be an efficacy signal. If the safety looked good, we'll take that forward. Maybe you can just explain where that assumption came from. Sure. Sure. There is strong historical precedent in the Vertex modulator community and all the other modulator trials out there that if you establish 3% FEV1 or improvement in lung function, that will be sufficient to advance a program into a pivotal study or a phase three study. There is a lot of historical precedent. That number, 3%, is really driven by mathematics and statistics. If you want to power the phase three study sufficiently to be successful, you need to have 3% FEV1. The higher that number, of course, it means the smaller the numbers in phase three, so a more efficient, less expensive trial. Of course, we view that 3% as a low bar. That is the bar, and that is driven by just historical precedence. We are not the only folks communicating that. Of course, we'd like to get higher, and we view it as a relatively low bar. Yep. Maybe going back to the phase one data in the CF patients that we did see at ECFS, I think it was four patients that was originally presented on 4% predicted FEV1 increase there. I guess just your comments on how reproducible you think that result is from the four patients. Is that we're looking to replicate that in this phase two? Is that the goal here? The numbers you're referring to came out of the safety study. We were looking at FEV simply to look for deficits in toxicology. We were surprised that after only two administrations, we saw elevations already. We viewed that positively. It was a small dataset. It was not statistically significant, although it is promising and, of course, positive. Do we anticipate that phase two repeats that? That is what the data suggests. We will be able to update the market with the specific phase two data later. Yep. Okay. Have you disclosed the doses that you're investigating in the phase two study? I think in the phase one healthy volunteers, we saw 3, 9, 18, 27 mg. Anything on the predicted dose ranges that you're evaluating? We made it clear it's not the low dose or the high dose. We are looking at intermediate dosing. We did in phase one B already. We are evaluating a multiple ascending dose in our phase two trial right now. None of the doses we're evaluating in phase two are wasted doses in our view, based upon our historical preclinical data and, of course, our clinical data. They are not wasted doses. We feel very comfortable about the safety profile. Obviously, so does the regulatory agency to allow us to dose patients at home. Any other comments here again with respect to how frequently we meet with safety review committees too. Yeah. We are using a DMC of the Cystic Fibrosis Therapeutics Development Network. We have regular safety reviews included. We will organize this that it doesn't really affect enrollment too much. We have to have these safety reviews done at certain periods of time. Okay. I did actually get a question on the chat, and I kind of had the same one myself. It's referring to kind of what cell types and the distribution that you need for the transfection of this product to actually work. The question is, do you actually need to transfect pulmonary ionocytes, or is it all bronchial epithelial cells? Maybe you can talk about any sort of preclinical and/or clinical studies that you can talk to the distribution of transfection that you get with ARCT-032. The short answer is bronchial epithelial cells are sufficient. Ionocytes would be potentially helpful. What we saw in our preclinical animal models in multiple in mice and rats and primates and ferrets is that if you transfect the bronchial epithelial cells, you get a desired result. We expect that to be similar in human beings. I don't know if there's anything to add. Juergen, go ahead. That's it. Yeah. Let me add. We have done one study. It's a transduction with our LUNAR technology. And we looked at different epithelial cell types. In principle, all cell types, including ionocytes, are similarly transducted with our LUNAR delivery technology. Ionocytes are included, but we believe that if we actually hit most of the other epithelial cells, it's a better way to actually see the efficacy of CFTR. Makes sense. I know we're kind of pushing up on time here, but there's also another question. Oh, it's an interesting one. Just in terms of the CFTR modulators, you can look at surrogate endpoints like sweat chloride and things because they're systemically administered, right? Maybe not so much with this product. Is there anything outside of FEV1, maybe some of those other endpoints that you talked about that you capture in the study that you can look at to kind of corroborate any potential efficacy that you've seen on FEV1 to make sure that it is a real signal? Yeah. Juergen's got a great response to this. Just to set the stage, the FDA, all they would like to see is an FEV1 improvement. That's the bar to advance this. Of course, we're collecting additional data to support and strengthen our data package. Juergen, maybe you can comment on some of the things we're doing in phase two. Sure. As I mentioned already, we are using the CFQR as a secondary endpoint. This is an endpoint tested in all the CFTR modulator studies and ended up in the label as secondary endpoints. That shows improvement of benefit, quality of life benefits, for instance. This is a secondary endpoint in our current phase two study, but will also be an important key secondary endpoint in our phase three. Okay. Okay. Focus on CFQR as well. Okay. Point taken. Yeah. The questionnaire. Yep. Okay. Yeah. Last one on CF is just pretty much how this product sits in the competitive landscape. Obviously, you have the modulators. You have your inhaled mRNA, lipid nanoparticle therapeutics here. You even have some gene therapies and some that are talking about going into gene editing. Maybe just your view of the emerging landscape as you see it now. No. You've already touched on the lipid nanoparticle mRNA competitors out there. You're right. There's DNA therapeutics, these gene therapeutics that are in development. However, they're all using viral vectors as delivery systems, whether that's AAVs or HSVs or lentivirus or next-generation AAV technologies, and our approach is just different. We strongly believe that a transient mRNA therapeutic is ideal for a more transient regenerating organ like the lung. There are many, many, many different types and mutations of CF. It's very important that you have a transient, flexible, attenuable, multi-dosable therapeutic to treat the spectrum of the CF community and to do it in a controlled and safe manner. That's, I think, the ideal approach. We have very strong views that the transient mRNA lipid nanoparticle system is the way to do this. Having said that, we're well aware that there's gene therapy mechanisms that are being investigated in the clinic. We feel that our approach is the ideal one. Great. Before we wrap up on just what the key catalysts are for the company and what investors should be focused on, Andy, I did want to ask you just a question on the cash runway for the company and maybe your view that if you do see interesting data here, what sort of capital is it going to take to follow through on a clinical development and a regulatory path here for ARCT-032? Yeah. We've actually forecasted that cash runway is substantial enough to get through the first quarter of 2027. We've taken into account a successful progression into phase three for both OTC and CF. I think those factors have been incorporated. From a unique standpoint, we haven't included any revenues from our KOSTAIVE opportunities, especially from Japan and Europe. We anticipate that CSL and Meiji are working hard to develop the two-dose LUNAR format for Japan and certainly for other countries. That would be kind of a wild card, which would certainly enhance and increase the runway. Makes sense. Joe, maybe just wrap up with you. We talked a lot about CF, and data's definitely coming in the second quarter here. Lots of eyes on that. Maybe just outline the key events for the company in the near term. Yeah. There's a lot going on. We have not only advancing additional approvals for the KOSTAIVE franchise. We're going to be looking at increasing sales, like Andy mentioned, in Japan. So our KOSTAIVE, our COVID vaccine is approved in 31 countries. The next country on the list is the United Kingdom. We'd like to get that over the finish line. That's a big market. Of course, file a BLA for the United States of America. I know that the vaccine industry is under watchful eye right now with this new administration. We'd like to just mention casually that we recently got a fast-track designation for our bird flu vaccine with the FDA right here in the United States. They're accelerating this program for us. We have a great relationship with BARDA that's funding our bird flu vaccine that's in 200 human beings right now and collecting data. We will be able to share that in the second half of this year. Moving on to the therapeutic franchise, we've talked in depth with CF today. It's a very exciting program for us. No doubt, inhaled mRNA is a big deal. On the injectable or systemically administered mRNA platform, our flagship is ornithine transcarbamylase deficiency. That's the indication that we're addressing there. That's presently in phase two. We fully intend to share some interim data there as well later this year. There is a lot going on in the next two, three quarters. As we look beyond that, of course, we're excited to learn from Meiji and CSL with respect to sales of KOSTAIVE that will help us fund our now late-stage programs on the therapeutic side. Certainly a lot going on and far too much that can fit into a 30-minute chat that has now turned into 41 minutes. I appreciate you spending some additional time with me and running through the CF program. I think we're incredibly excited and anticipating the data coming up in the second quarter. Thanks again for spending the time with us. We'll chat soon. Thank you. Thanks, Myles. Good to be with you, everybody. We'll see you soon.