Cantor Global Healthcare Conference. I'm Pete Stavropoulos, a biotech analyst with Cantor. With us, we have Arcturus Therapeutics, a company I cover, and pleased to have with us Joseph Payne, or Joe Payne, Chief Executive Officer. Let's start off with an intro of yourself, provide a snapshot of the company, and touch on the key milestones that will shape the company over the next 6 - 12 months, sorry. Hey. Oh, thanks. Yeah, it's good to be with you, Pete. Thanks for the time, and Arcturus Therapeutics, it's a messenger RNA medicines company. We utilize next-generation technology, so our technologies are differentiated and often in a compelling way. We utilize different technologies. We're building a therapeutics pipeline. We have a pair of programs that are deep in phase II clinical trials. We have a flagship liver program called ornithine transcarbamylase deficiency that's an intravenously dosed messenger RNA therapeutic that has a readout later this month. We'll have a concurrent. We'll be providing clarity on the regulatory path as well, and providing an update on the platform in general, so we have a meaningful update there later this month. With respect to our lung franchise, we also have an inhaled messenger RNA platform, and the flagship indication there is for cystic fibrosis. We have a key decision that's coming forward in Q4 pertaining to that program that will trigger some good things to help fund that program, too. On the vaccine side, we also have self-amplifying mRNA technology. We have an approved product utilizing this technology in 32 countries in the vaccine space. We have a COVID vaccine called KOSTAIVE that's, like I mentioned, approved in Europe, in the U.K., and Japan. We have a partner called Meiji that's helping us distribute that product in Japan. The application of self-amplifying mRNA has come under additional interest because of recent data in the messenger RNA community outside of infectious disease and into oncology. So there's some interesting applications of that technology there. We view the self-amplifying mRNA platform as a mechanism to capture non-dilutive monies and cash, basically to fund the value-creating therapeutic programs for the liver and the lung. That summarizes the company, and look forward to today's discussion. Let's start off with ARCT-810 being developed for ornithine transcarbamylase deficiency. We expect data and regulatory updates later this month. Can you just give a brief description of OTC deficiency what's the standard of care and the unmet need? Yeah. Okay. Ornithine transcarbamylase deficiency, or OTC deficiency, is the number one urea cycle disorder. It's when the urea cycle is dysfunctional, ammonia levels rise in the blood, and ammonia crosses the blood-brain barrier and causes neurological challenges, problems. This is a very severe, serious disease, and we need to be able to control that ammonia. The body's natural way to do it is the urea cycle. This urea cycle, this biochemistry happens in the periportal portion of the liver, and Arcturus has an exceptional technology that can safely and effectively deliver mRNA to the periportal portion of the liver and to these hepatocytes to address this disease. The present standard of care for ammonia diseases is ammonia scavengers. People take all these pills, drink a lot of water, and urinate 10 times a day and throughout the night to expel the ammonia. Unfortunately, the body, whenever it sees excess ammonia, it converts that to glutamine prior to the ammonia being scavenged. This is an important point, in that this glutamine crosses the blood-brain barrier and then releases the ammonia biochemically that way. It's just a really challenging disease. Instead of scavenging the ammonia, we're in the business of replacing what's missing or broken. In this example, you have a dysfunctional ornithine transcarbamylase enzyme. We're in the business of building a brand-new one in those hepatocytes, and this could be, therefore, functionally curing the disease and controlling ammonia, and then people can eat whatever they want. These elevations of ammonia are caused by ingesting or eating proteins. You can imagine the folks suffering with this disease have a very strict diet as well, and that can be, of course, very problematic. We're in the business of functionally curing the disease, replacing what's missing, allowing these people to eat whatever they want, frankly, and alleviate their requirement or need to be on ammonia scavengers. Controlling that glutamine level, that's also problematic. That's also important for us, too. You replace it via RNA technology? Correct. The messenger RNA goes inside these cells and expresses, makes a brand-new ornithine transcarbamylase enzyme. We've successfully navigated our way through phase I and phase I-B. We've done some dose range finding in early phase II studies, and we've now completed enrollment in both in Europe and U.K. and now in the U.S., and we're collecting this data, compiling it, and we're going to be sharing that data. That data readout is later this month. We've also had a pair of Type C meetings this year for this program, so we're regularly communicating updates to the FDA and the regulatory agency. We've received some positive and productive feedback in these meetings. We intend to provide some more granularity there. In addition to the data, we want to provide a regulatory path and explain a little bit more detail what those Type C meetings provided and provide clarity to Wall Street there. All right. So market opportunity. What's the prevalence in the U.S. and E.U., and where does this sort of fit in among the competitive landscape? Among the, yeah, that's a great question. What's published is there's approximately 10,000 people with OTC deficiency in the United States and Europe and U.K. That's a significant opportunity if you look at the pricing for this space. The present standard of care I mentioned is ammonia scavengers. They can be hundreds of thousands of dollars, even exceeding $1 million in treatment. So, it's an expensive disease to treat presently. There's also a recently approved gene therapy that is going to be potentially treating a portion of the stable adults in the population. Our therapy is ideally suited for the unmet need, which is children and those that are in pediatrics. It's much more severe at those stages. It's an X-linked disorder, so young males tend to have severe disease and can pass before they reach school age. Our intent here is to address the highest unmet need, the largest commercial opportunity in the space. There's also some gene editing data that's been shared for urea cycle disorders. Unfortunately, they've had some challenges with hyperammonemic attacks and lack of response. It's just us, is what I'm trying to get at. It really is. There's a lot of pressure on the organization and the urea cycle disorder community for us to succeed here. We used to have a lot of competitors, but we don't. This data readout that's coming later this month, hopefully it'll provide some hope and optimism for the community as well. All right. You did do two phase II studies, one conducted in the U.K. and E.U., and the other one in the U.S. Just sort of walk us through the design of each of those and especially point out the key differences. Yes. The first phase II study was in the U.K. and Europe. There was approximately eight subjects. Multiple doses were evaluated. We dosed it six times biweekly. It was more stable people. It was less severe disease, older. Once we transitioned to the U.S., we went to younger, more severe subjects. Adolescents as well were included, and we shortened the trial to just five administrations. We believed that we could get proof of concept in a shorter period of time. We narrowed the dose selection to 0.3 and 0.5 mg per kg. Again, it's approximately eight people, and we have completed enrollment, and we are going to be sharing the outcomes of that data. In terms of the data, there's multiple biomarkers with this disease. Just let me stop you. That's the U.S. that you're going to share additional data or both? Well, it's a good question. Primarily, it's the new data from the United States in terms of patient participation. However, in the Type C meetings that I mentioned earlier, the FDA was really helpful. They're not just encouraging, they're trying to help us get this drug across the finish line, right? And they offered some concepts with respect to how we look at the data, how we present the data, and additional data that we could go back retroactively and dig up and provide. Without giving too much details, that data will be provided later this month. But the new patients were U.S.-based, but the retroactive data that the FDA recommended that we collect at the Type C meetings will also be collected from not just the U.S., but the U.K. and Europe participants. Those are two dosing levels, 0.3, 0.5, and you were able to go to 0.7. Did you go to 0.7? We haven't disclosed where we maxed out at. That'll be disclosed as part of the data. Okay. That's being shared. All right. Biomarkers. Glutamine. Yeah. Biomarkers. We touched on ammonia's a clear bio. Ammonia's Windex, guys, right? You don't want ammonia swimming around the body, right? Systemically and crossing the blood-brain barrier. This is well understood, and it's a bad actor, and it's a surrogate biomarker. Yes, we're in the business of controlling ammonia levels. That's very important. Glutamine, I touched on earlier in today's discussion, this is also a problem. Even if people are on ammonia scavengers, they have high glutamine. Controlling these is important. What we're learning from the FDA is that there's an increased emphasis on ammonia in severe disease in kids, and there's an increased emphasis on glutamine in stable adults, understandably, because it's two different patient populations. In addition to ammonia and glutamine, we can measure urea itself because this is a urea cycle disorder. There are clever and new ways to measure urea. We have an N-15 ureagenesis assay. This is all going to be supportive data. It is new. It is not necessarily validated, but definitely interesting, and we will be including that. There are other biomarkers that are associated and other amino acids. We do not have a shortage of biomarkers for urea cycle disorders, but the primary two that we like to keep people focused on is ammonia and glutamine, with increased emphasis on ammonia for the kids, and more increased emphasis on glutamine for stable adults. We got some really productive feedback from the FDA in Type C meetings on how we are going to look at this going forward, and we will be communicating that with more granularity later this month. All right. Can you actually touch on the ureagenesis assay, the one that uses the isotope for nitrogen? Yeah. There is a cool new assay that was not available a few years ago where you can ingest radiolabeled vinegar. Okay? So acetic acid. You can radiolabel it with an N-15, which it can be tracked throughout the body. As this is ingested, it gets incorporated into the urea cycle and becomes urea. If the urea cycle is not functioning, then you do not see any N-15 urea, and if the urea cycle is elevated in function, you see more N-15 urea. It is a real cool assay. Because it is not validated, we will look at it as supportive data, but nonetheless, it is interesting. Yeah. All right. Observations from the phase II for these various measures and what was your interpretation of the data? Well, so far we were very pleased with the safety and tolerability profile. This has been a significant challenge for the field. We used to have over six competitors, unfortunately, it is difficult to safely and effectively deliver mRNA to the liver. If you have repeated dosing, you can have accumulating lipids. There is a delivery technology that is associated with these types of therapeutics that is lipid based, these lipids can accumulate in the liver over time as you continue dosing. That is not good. Thankfully, we have a differentiated technology that is biodegradable and non-accumulating, we have proven that in multiple trials. I think that was very meaningful data that has come out so far. Also we have had some early indications of biomarker normalization and reduction. We have shared that previously, I think that that was encouraging. We will see where we are and how the market perceives this new data update that we will be providing later this month. All right. Safety, anything to highlight there on that front? First of all, highlighting the dose levels, what we have shared already is some biomarker normalization and reduction, even as low as 0.3 mg per kg. This is a relatively low dose level. This is in the siRNA space for those that track not just messenger RNA, but other RNA. There has been some great successes in delivering siRNA, for example, great companies that are very successful. They did that through lipid nanoparticles as well. But it took them a while to get to 0.3 mg per kg. So it took us a while to get to that point, that level, or that certain area. So we view that dose level as promising because it helps ameliorate any concerns or adverse events for lipid nanoparticle therapeutics that are typical in terms of liver enzyme elevations and these kind of things. I am liking where the dose level is, and of course, we are really appreciating the biodegradability, which we are really the first in the field to show nice biodegradable non-accumulating lipids. All right. All right, anything else to touch on that program? No, no. W e can proceed to talk about others. We will touch base after the data readout, the regulatory clarity, the platform update too. It will be a fulsome update, and we look forward to reconnecting with investors after that. All right. Very near-term milestone for us. Looking forward to it. ARCT-032, or LunairCF, what is it, and how is your approach differentiated from other cystic fibrosis programs? Yeah. So we have an inhaled messenger RNA platform that, of course, is extraordinarily valuable because the lung is an extraordinarily valuable part of our body. It is a trillion-dollar organ. For almost three decades, people have been trying to get RNA into the lungs. Not years, decades. Why have we been trying for so long? Because it is such a valuable, important part of our body. This organ is very important. But they have failed. Three decades of failures. siRNA and antisense oligonucleotides, circular RNA, gene editing RNA, messenger RNA. The list is long, guys. A lot of failures. But why? It is because humans do not like inhaling stuff. We do not like to inhale lipids. We do not like to inhale RNA. We just do not like it. So why is that? What is different now? You fast-forward to three years later, one of the key issues is the delivery technology. We need a benign technology that is not abrasive, inflammatory, is zing the immune system. We have done that. We have a technology that has now been dosed successfully up to 15 mg daily for 28 days. So we feel very good about the safety profile of our lipid nanoparticle. It is biodegradable, and that is a key differentiator. The purity of the mRNA is key. Even though these RNA molecules are perfect drugs, they are beautifully perfect, unfortunately, when you manufacture them, you have some impurities, and those impurities can be dastardly and cause not so good side effects, inflammation and immune responses. So it is important that you have a purification process that is significantly improved over previous attempts, and we have done that. So we are logarithmically better on purification of the RNA. Finally, nebulizing the particles. Instead of using an off-the-shelf nebulizer, we have had to customize it over years. We had help from the CF Foundation here to create a nebulizer that can be more efficient, and it does not cause aggregation of the particles or discombobulate the particles, maintaining the integrity of the particles. So improvements in the nebulizer have been dramatic. Improvements in purification have been significant. Of course, improvement in the delivery technology, making it more biodegradable and benign. You put all three of those together, that is what Arcturus' platform is. That is why we are in a logarithmically different place. Most of the challenges in my career over the several decades trying to do this, we always had problems in the 1 milligram level. We could not even dose weekly at that level. But we can dose in double-digit milligrams daily. That big difference in safety and tolerability is going to make a potential impact on cystic fibrosis, because cystic fibrosis is a nested disease. If you are familiar with this disease, imagine a gunky nest of gunk in your lungs, and it is a beast. It is not like a trivial disease. You have to hit it, and you have to hit it constantly. You have to hit it again and again and again and again and again. By doing that, then you can ameliorate the disease, is the objective here. Once it is resolved, then it opens up the opportunity to other types of therapeutics, whether it is gene therapy or gene editing, for example. In our view, we need to have a healed lung that is available to be treated. This is something that we can do. This is our objective with transient mRNA therapy, with this regenerating nested disease. We just hit it daily. The reason you have had so many years of failures, again, is because of toxicity and tolerability. I think we have breached that threshold, and we are now in a three-month study. We have extended it from four weeks to 12 weeks now daily. We started that study in March, and here we are in September. Thankfully, we have not announced anything with respect to safety and tolerability in that period of time. That, of course, is very exciting. Wall Street is waiting for the data, so you probably have questions on that. Yeah. You will have a decision in Q4. Tell us about it. Yeah. The decision. First of all, yeah, we have a decision that we are guiding for. Usually, a Chief Executive Officer is guiding data or we are guiding a completion of enrollment. Why are we guiding a decision? It is because back in July, we signed an agreement with Thermo Fisher, and part of that agreement is if we make the decision to proceed into phase III, that that unleashes up to $40 million of contribution to our phase III budget. That is a lot of money for a company of our size. That decision is the guidance because it triggers an up to $40 million contribution from our Thermo Fisher partner. Now it is an open label study, so you can imagine the senior management team and the board ultimately will get together and be evaluating the study as the data comes in. At some point in Q4, we feel confident that that is the timing, that we will be able to have enough data, sufficient data to make a go/no go decision for that program. After that decision is made, whether it is a day, a week, a quarter, the data will ultimately be communicated at the appropriate conference or in an appropriate manner. We have not guided that. All we have guided is the decision to proceed. That decision, the follow-up question is usually, "Well, what is your threshold? How do you gauge success?" This is something that is very important to understand is two years ago, there was a lot of competitors and there was a lot of guidance provided on what threshold is needed to be attained. Now it is a completely different environment. It is just us. It is just Arcturus for the Class I CF community. We feel the increased pressure to provide a successful product for them, but there is no threshold. What Arcturus is in the business of doing is establishing what that threshold is. We are collecting a suite of data, not just a single data point, but a whole collection of data that we will be providing the regulatory agency. This includes not just FEV lung function, but lung clearance index lung function is a completely different passive lung function study data that we will be providing. We have two, not just one, but two quality of life measures, these surveys that are validated and understood by the FDA. We are taking beautiful pictures before and after with High-Resolution CT scans to show mucus plug reduction, mucus reduction, healing of the lungs, potentially, and we have just got to see the pictures before and after. Then we get to compare all this data, indirectly or directly, to the REACH study. There is this normative study that is being collected by the CF Foundation. They are collecting LCI and FEV in hundreds of Class I subjects over years, and we will be able to compare that. Now, why am I emphasizing all of this data? Because 20 years ago, there was a great company called Vertex Pharmaceuticals that got the first drug approved. A modulator approved, and they did it with just FEV. They had, like, two-point-something percent improvement in FEV. They did not have LCI. They did not have quality of life measures. They did not have High-Resolution CT scans. They did not have a normative study. What they did was incredible. They had this heroic opportunity to get something approved with just FEV. Arcturus does not have to be heroic. We are establishing the threshold. What does success look like? We are going to collect it, and it is going to be FEV, LCI, quality of life measures, high-res CT scan, and we will be able to compare it to a normative study. That is the objective. If we are successful, if it is positive, then this is going to be an extraordinary product and opening up a new opportunity for Class I CF. This is undruggable for the Vertex drugs, by the way. Alan, where is he spending most of his time focusing on, out of all those markers? Oh, yes. So, he referred to Alan, who is present here. He is our Chief Medical Officer. He is fantastic, by the way. Please get to know him if you get the opportunity to meet him later. But yes, we are focused on the lung function measures. There is an elevated attention towards, because those are usually considered primary endpoints and approvable endpoints. So the FEV and LCI are probably the most important data within that set of data that we are collecting. Also because the normative study by the Cystic Fibrosis Foundation is collecting LCI and FEV as well, so it will add weight to that data set. So yeah, there is an increased attention to those. But don't forget that there is other data that is supportive, that tells the story as we establish this threshold of success as the objective. Okay. Well, running out of time. Yeah. Key milestones for the next 12 months or so. Well, key milestones is, this month we have got the liver program update, the platform represented by OTC deficiency. Please stay tuned for that. I encourage you to participate. Then in Q4, we have a decision for CF. Don't forget that we have the self-amplifying mRNA platform. As a Chief Executive Officer, I love value creation, right? That is what investors love, value creation, but it is important to me to get cash in the bank. So, pay attention to our self-amplifying mRNA opportunities in infectious disease partnering, in sales of KOSTAIVE. The next opportunity will be in the spring of next year to sell. We have an approved product in 32 countries. On cancer, there is elevated attention in mRNA in cancer. Self-amplifying mRNA, it expresses 30 times the protein. It logarithmically engages much better engagement of T cells. We have a delivery technology that we brag about at Arcturus that we believe is superior. You combine expression rates and delivery and T cell engagement into one platform, we are sitting on a technology that is fantastic. We are not an oncology company, but that could be a possible way to do business development activities. Partner out. P artner out and stuff like that, and generate monies for the value-creating therapeutics. In addition to those milestones, we have a self-amplifying mRNA franchise that is monetizable, and I just want people to be aware of that. All right. Well, Joe, ran out of time. I want to thank you very much for participating in the Cantor Healthcare Conference. Yeah. Thank you. I look forward to watching the outcomes for both OTC and CF. Yes. Thank you very much for your time, guys. Thanks.