Arcturus Therapeutics Holdings Inc.

Good day, ladies and gentlemen, and welcome to the Arcturus Therapeutical's third quarter 2022 earnings call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Kyle Goodstat, Senior Analyst of Investor Public Relations. Please go ahead.

Thank you, Keith. Good afternoon, and welcome to Arcturus Therapeutics' third quarter 2022 financial update and pipeline progress call. Thank you all for joining us. Today's call will be led by Joseph Payne, our president and CEO, and Andy Sassine, our CFO. Dr. Pad Chivakula, our CSO and COO, will join in for the Q&A session. Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are 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 cause actual results, performance, and achievements to differ materially from those expressed or implied by the statement. 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 Forms 10-Q and 10-K filed at the SEC. Any forward-looking statements represent our views only as of the dates such statements are made, November 9th, 2022. Arcturus specifically disclaims any obligation to update such statements to reflect future information, events, or circumstances. And with that, I'll now turn the call over to Joe.

Thank you, and good afternoon to all. Thank you for joining Arcturus' Q3 quarterly call. The recent period has been characterized by remarkable progress we've made both with our pipeline and also in completing transformational business development agreements with CSL and BARDA. I'll begin with our recently announced collaboration with CSL. I want to first express my gratitude to the entire team here at Arcturus that worked tirelessly on this deal, particularly the deal team led by Lance Carotta, our Chief Legal Officer, and Kevin Scull, who leads our business development efforts. They all did an exceptional job. Indeed, there's an extraordinary story behind every extraordinary deal, so thank you to the team, many of which are listening to the call. This collaboration with CSL is designed to develop and commercialize self-amplifying mRNA vaccines targeting COVID-19, influenza, three additional pathogens, and pandemic preparedness. This broad strategic collaboration will drive the development, manufacture, and global commercialization of novel self-amplifying mRNA-based vaccines. This was a transformative deal for Arcturus, both from a financial perspective as well as in positioning our company to become a leader in the development and delivery of mRNA vaccines and therapeutics. CSL Securus is one of the top two companies in the multiple-billion-dollar influenza vaccine market, and they bring profound capabilities, especially related to advanced vaccine manufacturing, development, distribution, and commercialization. The collaboration combines CSL Securus's well-established global vaccine, commercial and manufacturing infrastructure, with Arcturus's manufacturing expertise in innovative STAR self-amplifying mRNA vaccine and lunar delivery platform technologies. Together, we will focus on the development of self-amplifying mRNA vaccines targeting COVID-19, influenza, three additional defined respiratory infectious disease vaccines, and pandemic preparedness, and we look forward to providing continued updates on our plans and progress in the coming months. The agreement will become effective upon the expiration of the Hart-Scott-Rodino waiting period. Andy will provide further details about the collaboration, but I'll briefly mention some highlights. Arcturus will receive $200 million up front, up to $4.3 billion in potential development and commercial milestones. 40% profit sharing for COVID-19 vaccines and up to double digit royalties for influenza and three additional defined respiratory infectious disease vaccines. These are very meaningful figures and we expect this deal to provide meaningful funding to support the development of our pipeline over the coming years. With the CSL partnership in place, we are prioritizing our regulatory and clinical efforts toward larger commercial markets. CSL is responsible for providing guidance and updates pertaining to ARCT 154 and any of its future derivatives. Now onto the BARDA agreement. This is our second recent external agreement with the Biomedical Advanced Research and Development Authority, or BARDA. This transaction provided Arcturus with an award valued at up to $63.2 million over three years. The award will support preclinical, manufacturing, non-clinical safety studies, along with development and regulatory support for Arcturus' self-amplifying mRNA vaccine platform technology for rapid pandemic influenza response through Phase I clinical studies. Our low dose lyophilized vaccines are preferable when stockpiling footprint and pandemic preparedness are taken into consideration. Self-amplifying mRNA vaccines have the potential to provide safe and effective protection against disease with the specific advantage of rapid scale up, lower doses, and easier transport and storage. These are qualities essential to a rapid response against pandemic influenza. and are consistent with strategic objectives of the US government's national strategy for pandemic influenza. We believe that this highly sought after BARDA award provides further validation for our technology and its promise to deliver important new vaccines and medicines. This agreement with BARDA establishes a meaningful contractual relationship with the US government. So when the next pandemic occurs, heaven forbid, Arcturus may have a more streamlined process to accessing pandemic-related government funding. I also want to acknowledge that the CSL collaboration agreement allows for Arcturus to perform its obligations under the BARDA contract. Now moving to ARCT810. This is our therapeutic candidate for ornithine transcarbamylase deficiency or OTC deficiency. Our therapeutic candidate aims to address the deficient OTC enzyme in the liver of individuals living with this disease. ARCT 810 has the potential to restore urea cycle activity, prevent or slow the progression of neurological damage, and potentially expand dietary options and improve on the quality of life for people living with this condition. All subjects in our Phase 1b single ascending dose study have completed dosing, including the cohort dosed at 0.4 mg per kg, without requiring steroid co-treatment. We continue to advance ARCTA10 in a Phase 2 randomized, double-blind, placebo-controlled, nested, single and multiple ascending dose clinical trial, whose design will enroll 24, adolescents and adults living with this disease. The study is being executed in multiple European countries. The participating sites are working with several dozen identified patients through the pre-screening process with dosing beginning this quarter. Next year, the company will strategically share interim ARCT 810 clinical data simultaneously with the announcement of new additional liver therapeutic programs. So we look forward to that. Now moving on to our cystic fibrosis program. Continue to progress the necessary preclinical and non-clinical studies to enable ARCT 032 to move to the clinic. ARCT 032 is our inhaled messenger RNA therapeutic candidate for cystic fibrosis. New preclinical data was presented and well received at the 2022 North American Cystic Fibrosis Conference last week, and we included some of that data in our press release today. The new data slides presented at the NACFC are readily available on our website if you click on the publications tab. These data provide further support for the therapeutic potential of ARCTO32. Three critical steps for an inhaled messenger RNA are required to be successful. Delivery, protein expression, and functional restoration. So the first critical step is delivery, getting that messenger RNA to where it needs to be. And these new preclinical data demonstrated effective delivery of messenger RNA to bronchial and tracheal epithelial cells, even in the presence of CF sputum or mucus. These successful delivery data are attributed to Arcturus' proprietary lunar technology. We have previously shared successful inhaled delivery data in multiple animal models, including healthy mice, rats, ferrets, and primates. These new data, however, were collected utilizing a well-established CF ferret model wherein these animals present mucus that coats the airway epithelial cells in their lungs. The observed effective delivery of messenger RNA in this CF ferret model is noteworthy. On to the second critical step of protein expression. treated human bronchial epithelial cells from CF donors. These cells were treated with ARCTO32 in vitro and demonstrated robust expression of mature CFTR protein at levels comparable to control non-CF or wild-type donors. As for the third critical step of functional restoration, Additional in vitro data demonstrated robust restoration of CFTR transporter activity. Bronchial epithelial cells obtained from human CF donors were treated with ARCTO32, and after the treatment, we observed a significant increase in chloride ion current, up to 70% restoration, compared to control BECs, or bronchial epithelial cells, obtained from non-CF donors. So to summarize, we've observed successful delivery of mRNA to tracheal and bronchial epithelial cells in the presence of mucus in a CF ferret model. We also observed robust in vitro expression of CFTR protein alongside functional restoration of chloride ion current, all comparable to controls. All of these are important milestones for the ARCT 032 program. We believe that this therapeutic candidate, ARCT032, may bring significant benefits to individuals living with cystic fibrosis, including those unaided by currently available treatments. We continue to anticipate submission of a clinical trial application, or CTA, for ARCT032 by year end. I will now pass the call onto Andy Sassine, our CFO, to provide financial updates.