Arcturus Therapeutics Holdings Inc.

Greetings and welcome to the Arcturus Therapeutics second quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Netta Sepharzada, Senior Director and Head of Investor Relations, Public Relations, and Marketing. Thank you. You may begin.

Thank you, operator, and good afternoon, everyone. We are joined today by Joseph Payne, President and CEO, Andy Sassin, CFO, Dr. Pat Shivakula, CSO and COO, and Dr. Steve Hughes, our Chief Medical Officer. Before we begin, I would like to remind everyone that except for statements of historical facts, The statements made by management and any responses to questions on this conference call constitute forward-looking statements that involve potential risks and uncertainties for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Any statements other than the statements of historical facts included in this communication, including those regarding our planned, anticipated, or potential development, manufacturing and commercialization activities or events, including with respect to funding, initiation, design, or completion of clinical trials, the likelihood of success of the company's coronavirus COVID-19 vaccine candidates or other product candidates, the company's manufacturing and other operations, and the company's current and future cash and financial position are forward-looking statements. Actual results and performance could differ materially from those projected in any forward-looking statements as a result of many factors, including without limitation, an inability to develop, and market product candidates, unexpected clinical results, and general market conditions that may prevent such achievements or performance. Such achievements are based on management's current expectations and involve risks and uncertainties, including those discussed under the heading risk factor in ARCTRES' most recent annual report on Form 10-K with the SEC and in other filings that ARCTRES makes with the SEC. Except as otherwise required by law, We disclaim any intention or obligation to update or revise any forward-looking statements which speak only as of the date they were made, whether as a result of new information, future events, or circumstances, or otherwise. Now it is my pleasure to pass the call to Joe Payne, President and CEO. Joe, please go ahead.

Thank you, Netta. Good afternoon to all. Thank you for joining the Arcturus' quarterly call today. Arcturus is developing a powerful new class of mRNA-based vaccines and therapeutics. Over the last decade, our team has developed a differentiated platform technology as well as highly promising pipeline candidates. We believe that our approach has the potential to directly address the underlying molecular basis of many serious diseases and could make a transformative difference to the lives of patients confronting many life-threatening conditions. This quarter has been an exceptionally productive period for Arcturus, where we have made substantial progress with our mRNA-based vaccines, our therapeutic programs, as well as the advancement of our underlying core technologies. In addition, we have also been effective at obtaining non-dilutive financial support to drive our pipeline forward in a very capital efficient manner. I'll begin with a discussion of the progress we've made with our vaccine programs targeting COVID-19 and starting with ARCT021, our lead program. ARCT021 is a differentiated single shot COVID-19 mRNA vaccine candidate that clinically exhibits a promising T cell response profile. And this profile is attributed to the star or self-transcribing and replicating mRNA technology. We believe that our approach may provide meaningful advantages compared to currently available vaccines for COVID-19. We believe this single shot dosing regimen would be highly favored, even required in certain regions of the world compared to the two shot regimens employed with currently authorized mRNA vaccines for emergency use. We have an ongoing fully enrolled ARCT021 phase 2 study. We have previously discussed the encouraging preliminary tolerability and immunogenicity data from this study, as well as from our prior completed phase 1 study. Specifically, immunogenicity data from this study shows greater than 90% seroconversion for IgG antibodies binding to the full-length spike protein at day 28 following a single-shot dose of ARCT021. The full results from the Phase 2 study remain blinded, and we expect to obtain those data later this year. Based on the available supportive data, we've made excellent progress advancing ARCT021 to Phase 3 development. We are very pleased to report today that ARCT021 has been selected by a global entity for inclusion in a Phase 3 vaccine trial against COVID-19, and we expect this study to begin imminently. After the specifics of the Phase III study are announced, we will provide more details with respect to this program. We can disclose that this will be a multinational placebo-controlled Phase III study designed to enroll tens of thousands of participants and will evaluate a five-microgram dose of ARCTO21 administered as a single injection regimen. Again, this is a differentiating feature of ARCTO21. Importantly, This large phase three study upon commencement will be sponsored and funded by the global entity. We are understandably very grateful for their support and we very much look forward to the initiation of the ARCTO21 phase three study as we look to bring this vaccine to communities in need across the world as rapidly as possible. I will also note that outside of Singapore, Vietnam and Israel, Arcturus retains full global economic and distribution rights to ARCTO21. We've also made progress providing access to our vaccine technology in order to broaden the ability of individuals across the world to access COVID-19 vaccines. Earlier this month, we announced an agreement with VinBiocare to establish a manufacturing facility in Vietnam for the manufacture of Arcturus' investigational COVID-19 vaccines. VinBioCare will build out a manufacturing facility in Hanoi, and Arcturus will provide access to our proprietary manufacturing technologies. In exchange, VinBioCare has made a substantial $40 million upfront payment to Arcturus. VinBioCare will also purchase the mRNA drug substance from Arcturus and pay a royalty on the doses manufactured. This is a strategically important transaction for Arcturus, and we believe this is also financially attractive, providing valuable capital to support the manufacturing efforts and continued development of our pipeline. While we have driven forward our lead vaccine candidate, along with our manufacturing capacity, we've also advanced our next generation self-amplifying mRNA vaccines, targeting the highly prevalent SARS-CoV-2 variants that are circulating across our planet. As we all know, cases have been growing at a concerning rate, driven in large part by the highly transmissible Delta variant. Here in the U.S., daily cases again topped 100,000, and alarming increases in transmission have been seen in many other countries across the world. Our expectation is that this Delta variant and additional SARS-CoV-2 variants will remain endemic in the human population for years to come. Fortunately, we at Arcturus can rapidly update our mRNA vaccines as needed to address variants of concern. We identified ARCT154, a next-generation two-shot mRNA vaccine that has been optimized to elicit high levels of neutralizing antibodies against the variants. Preclinical data has shown that our next-generation vaccines result in substantially increased levels of neutralizing antibodies to the variants of concern. If the observed increases of neutralizing antibodies in primates translate to similar fold increases in humans, then ARCT154 could be an excellent vaccine to protect against the variants of concern, including the Delta variant. ARCT154 utilizes STAR technology, that's the self-amplifying mRNA molecule, Therefore, it retains a promising T-cell profile in primates as well. In all of our studies, preclinically and clinically, we observe self-amplifying mRNA to generate better T-cell responses than conventional mRNA. The robust T-cell responses are attributed to the self-amplifying mRNA mechanism of antigen expression. I'll now turn the time over to Dr. Steve Hughes, our Chief Medical Officer here at Arcturus, to discuss our efforts targeting viral variants in more detail, including our clinical development progress, as well as the progress we have made with our mRNA therapeutic franchise.