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spk15: Greetings and welcome to Arcturus Therapeutics fourth quarter and full year 2023 conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please hit star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Netta Saperzadeh, Vice President, Head of Investor Relations, Public Relations, and Marketing. Thank you. You may now begin.
spk09: Thank you, Operator. Good afternoon and welcome to Arcturus Therapeutics Quarterly Financial Update and Pipeline Progress Call. Today's call will be led by Joe Payne, our President and CEO, and Andy Sassine, our CFO. Dr. Pat Chivakula, our CSO and COO, will join them for the Q&A session. Before we begin, I would like to remind everyone that the 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 most recent Form 10-K and in subsequent filings with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made. Our service specifically disclaims any obligation to update such statements. And with that, I will now turn the call over to Joe.
spk13: Thank you, Neda. It's good to be with you again, everybody. We look forward to providing our updates today on our quarterly investor call. I will begin my remarks with an update on progress regarding our CoStave COVID-19 vaccine program. Following favorable clinical results from several CoStave studies, including a 16,000 subject efficacy study performed in Vietnam, as well as a phase three COVID-19 booster trial in Japan, The Japan's Ministry of Health, Labour and Welfare granted approval for COSTAVE, a self-amplifying mRNA COVID-19 vaccine for primary vaccination and booster for adults 18 years and older. This approval marks a historic milestone as the first self-amplifying mRNA product in the world to be registered. and we are increasingly confident about the future applications of our now proven innovative STAR self-amplifying messenger RNA vaccine platform. We look forward to expanding our vaccine platform alongside our global exclusive partner, CSL, and CSL's partner in Japan, Meiji Seika Pharma. The CoastAid Japan approval is further supported by an active controlled Phase 3 booster vaccine study conducted in 11 sites in Japan. The study included healthy adults initially immunized with two doses of an mRNA vaccine, whether that was Comirnaty or Spikevax, and then a third dose of Comirnaty. The study was conducted in partnership with CSL's partner, Meiji Seika Pharma. This is a global health company based in Japan. The new analysis at six months post-vaccination shows that CoStave induces a broader and more durable immune response compared to Comirnaty for both the original Wuhan strain and the Omicron BA4-5 variant and an advantage in antibody persistence. CoStave results were achieved with one-sixth the dose of Comirnaty. Based on the totality of clinical data collected to date, Arcturus anticipates that the advantages of self-amplifying mRNA should provide superior protective efficacy against COVID-19 disease caused by future emergent variants of SARS-CoV-2. The CoStA booster study is ongoing and will continue to collect safety data and assess durability of the immune response in participants up to 12 months post-vaccination. We are very pleased to report that CoStave remains on track to launch in Japan this year. Meiji Seika Pharma, as the party responsible for distributing the vaccine in Japan, will be providing updates and further detail pertaining to the launch of CoStave in official press releases. In April, the WHO is expected to announce the updated COVID variant. In due course, manufacturing runs and the subsequent distribution of CoStave in Japan will follow. The commercial case for CoStave is becoming clear. A significantly stronger and broader immune response is preferred. The ACIP and other regulatory agencies are presently recommending two boosters each year for the approved conventional mRNA vaccines. Thus, it's very apparent that there's a clear need for a more durable once a year COVID vaccine and CoStave has the potential to address this important global health need. COVID is here to stay and the longer lasting CoStave is also here to stay. So moving on to ARCT2138 Lunar Flu Program. This is our quadrivalent self-amplifying mRNA vaccine candidate for seasonal influenza. I'm pleased to announce that the company, along with our partner CSL, initiated a phase one dose finding study in January 2024 with the intention of assessing the dose response of the investigational vaccine and comparing the safety and immunogenicity with the licensed standard of care. Overall, 132 healthy individuals, which includes 84 younger adults and 48 older adults, are planned to be recruited in this phase one clinical study. I'm now excited to announce that Arcturus has initiated new vaccine discovery programs for Lyme disease and gonorrhea. This decision is supported by the clinical and regulatory validation of lunar and star technologies provided by our first regulatory approval of CoStave. Our technologies are ideally suited for these infectious disease vaccine opportunities. Our validated vaccine platform is now being applied to seven global infectious diseases, five with our partner, CSL Securus, and two wholly owned vaccine discovery programs, Lyme disease and gonorrhea. The total estimated global market opportunity for these new vaccine discovery programs exceeds $4 billion. I'll now move on to ARCT 810. our messenger RNA therapeutic candidate for Ornithine Transcarbanylase or OTC deficiency. This investigational medicine is designed to functionally replace the deficient or missing OTC enzyme in the liver, restoring urea cycle activity and preventing metabolic crises that cause neurological damage. ARCT 810 could reduce the need for ammonia scavengers and ease with the rigid dietary protein restrictions that OTC patients face today, thus improving the quality of life for those with this disease. Our Phase 1b single ascending dose study in the United States has completed enrollment and dosing of all cohorts with 16 patients. The Phase 2 study in the United Kingdom and Europe is enrolling up to 24 adolescents and adults with OTC divisions. The ongoing study is evaluating two dose levels, and includes up to six bi-weekly administrations for each participant. The company expects to share phase two interim study data by the end of Q2 2024. Moving now to our ARCT032 program. ARCT032 is an inhaled messenger RNA therapeutic candidate for cystic fibrosis formulated with Arcturus's lunar delivery technology. This investigational medicine is designed to functionally replace the deficient or missing CFTR transporter in the lung, and thus restoring the balance of salt and water. We have now completed dosing in a Phase 1 study in New Zealand of 32 healthy subjects across four ascending single dose cohorts. In addition, we have dosed patients in a Phase 1B clinical study in New Zealand. The Phase 1b study is designed to enroll up to eight adults with cystic fibrosis, with each participant receiving two administrations of ARCT032. We remain on track to share interim Phase 1b data in Q2 2024. In November 2023, ARCT032 received orphan drug designation from the FDA. The designation provides significant incentives to promote the development of the drug, including the potential for market exclusivity for seven years upon FDA approval, eligibility for tax credits for qualified clinical trials, waiver of Prescription Drug User Fee Act application fee, and eligibility to receive regulatory guidance from the FDA in the design of an overall drug development plan. In February 2024, ARCT 032 received orphan medicinal product designation from the European Commission, which will give Arcturus access to protocol assistance, centralized authorization process, fee reductions, and 10 years of market exclusivity. And with that, I'll now pass the call to Andy.
spk04: Thank you, Joe, and good afternoon, everyone. The press release issued earlier today includes financial statements for the fourth quarter and fiscal year ending December 31, 2023, and provides a summary and analysis of year-over-year financial results. Please also reference our Form 10-K, which will be filed early next week for more details on the financial performance. Before we begin the financial review, I wanted to give you some highlights from our recent trip to Tokyo, where Joe Payne, and I met with the executive teams from Meiji Seika Pharma and Axolid, our JV partner in our manufacturing venture. I am happy to report that everyone was very excited about the approval of CoastSafe in Japan and the opportunity to manufacture the world's first self-amplifying mRNA vaccine in Japan under the Meiji brand. All of our partners are working very closely with the Japanese and local government officials to prepare for the launch of CoastAid in the second half of 2024. We are deeply grateful to the Japanese government for their financial support of CoastAid and our manufacturing partner, Arcalis. Going forward, officials from Meiji Seika Pharma will provide regular updates on the launch of CoastAid in official press releases this year. I will now provide a quick summary of our financial results. We reported revenues of $169.9 million during 2023 compared to revenues of $206 million during 2022. Revenue recognized from CSL in 2023 was $157.4 million, which slightly increased by $3 million compared to 2022. We also made significant progress with the BARDA pandemic flu vaccine agreement that led to an increase in revenue of $8.8 million. The majority of the decrease in FY23 revenues were driven by the discontinuation of our collaboration agreements within BioCare and J&J in 2022. In the fourth quarter of 2023, our tourists achieved $29.2 million in milestones from CSL. The milestone payments will continue to be used to fund development activities for the Lunar COVID-19 vaccine in self-amplifying mRNA flu programs with CSL. Total operating expenses for the year ended December 31, 2023, for $245 million, compared with $193.8 million for the year ended December 31, 2022. For the three months ended December 31, 2023, operating expenses were $49.1 million compared with $38.8 million for the three months ended December 31st, 2022. I want to highlight that total operating expenses declined by $15.4 million sequentially from the third fiscal quarter of 2023 due to lower manufacturing expenses. Our research and development expenses consist primarily of external manufacturing costs, in vivo research studies, and clinical trials performed by contract research organizations, clinical and regulatory consultants, personnel related expenses, facility related expenses, and laboratory supplies related to conducting R&D activities. Research and development expenses were $192.1 million for the year ended December 31st, 2023, compared to $147.8 million for the year ended December 31st, 2022. The increase in research and development expenses were attributable to our continued effort to progress the CSL and BARDA programs, as well as our internal OTC and cystic fibrosis programs. Additionally, we have increased investments in early stage and discovery technologies. The company initiated preclinical research related to its Lyme disease and gonorrhea vaccine discovery program. GNA expenses were $52.9 million during 2023, compared with $46.1 million in 2022. The increase resulted primarily from personnel expenses due to increased pen count and salaries, increased travel and consulting expenses, as well as an increased rent expense associated with the new headquarters facility in San Diego. We anticipate total G&A expenses for 2024 will remain consistent with 2023 totals. For the year ended December 31st, 2023, Arcturus reported a net loss of approximately $26.6 million for $1 per diluted share. Compared with net income of $9.3 million, the 35 cents per diluted share in the year ended December 31st, 2022. For the three months ended December 31st, 2023, we reported a net loss of approximately $8.6 million but 32 cents per diluted share, compared with a net income of $117.4 million, or $4.33 per diluted share for the three months ended December 31st, 2022. Higher year quarter included a $200 million upfront payment from our CSL collaboration. Cash equivalents and restricted cash were $348.9 million as of December 31st, 2023, and $394 million as of December 31st, 2022. Since the beginning of our deal with CSL in November 2022, we have achieved approximately $396 million in upfront payments and milestones. as of December 31, 2023. We expect to continue to receive future milestone payments from CSL that will support the ongoing development of the COVID and flu programs and three additional vaccine programs by CSL. Finally, I'm happy to report the expected cash runway now extends through the first quarter of 2027 based on the current pipeline and program. I would also like to highlight that total shares outstanding on a fully diluted basis have remained relatively consistent for three years in a row at approximately 26.6 million shares. This demonstrates management commitment to continually improving shareholder value as we execute our strategic business plan. In summary, we believe the company remains in a strong financial position and has the resources to achieve multiple near-term value-creating milestones for the vaccine and therapeutic program. Furthermore, with the Coast Day product approval in December in Japan, we look forward to beginning to report potential commercial sales in the next few years. I will now pass the call back to Joe.
spk13: Hey, thanks, Andy. We continue to make excellent progress and we are incredibly excited about our first product approval with CoStave. This achievement is an important validation of our mRNA technology and delivery platform.
spk05: With that, let's turn the time over to the operator for questions.
spk15: At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Evan Wang with Guggenheim Security. Please proceed with your question.
spk00: Great. Thanks for taking the question, guys. Two from me. First, it was encouraging to see the ACIP recommendation on revaccination of the elderly last week. I'm wondering if we've seen similar recommendations internationally. And additionally, you know, what kind of regulatory feedback you've gotten on how a more durable vaccine may be implemented, if you could talk both FDA and internationally in markets like Japan and Europe? And second, looking forward to some updates in 2Q from OTCNCF. As we're getting closer to data, wondering if you can share how many patients we can expect from each trial. Thanks.
spk13: Hey, thanks, Evan. Yes, first, I can address the question about the recent recommendations by ACIP. We're very happy to see that they recommended regular COVID vaccination, especially in the elderly. and the fact that they've recommended two boosters annually. We of course because we're approved in Japan we wanted to provide some updated new information to the people on this call that they may not appreciate. But Japan government has also now communicated that starting April 2024 that routine COVID-19 vaccinations for the elderly will be recommended. And if you just go to the MHLW website, another new update that they recommend twice a year vaccination for the elderly, but also, and I'll quote from the actual website in Japan, that people aged 65 and older, those with underlying medical conditions and healthcare workers, so each of these three sets of people will be vaccinated twice a year, while all of the others will be vaccinated once a year. the vaccinations remain free of charge as well and that's clearly communicated. So these developments of course are very good news for us because we're addressing a need of durability for the field but also that there's elevated support for the for those the elderly and and those with underlying medical conditions and health care workers in Japan and that their vaccinations remain free of charge which of course is going to be helpful to us commercially. With respect to Europe, there's been no second vaccination recommendation for the elderly there by the European CDC, but those discussions are ongoing and we'll be looking for those updates shortly. Now, you also asked additional questions about just enrollment processes for the two therapeutic programs, correct, Evan? You know, we remain on track. That's something that we want to clearly communicate that we're on track to communicate some interim data for phase 1B in our CF program, and that's recruiting all patients, no placebo in that group. Six to eight patients is what we're estimating, and we're still guiding interim data to be shared in the second quarter. So that's a relatively near-term milestone. And likewise, we maintain our guidance on the OTC program for the end of Q2. With respect to specific updates and specific numbers, We haven't provided those details.
spk05: Thank you for your questions.
spk15: Our next question comes from Yasmeen Rahimi with Piper Sandler. Please proceed with your question.
spk10: Hey, good afternoon, team. This is for Yas. Thanks for taking our questions. We have two. First, what would you say is the rate-limiting step for orders in Japan? And for cystic fibrosis and NGC, what types of data should we expect at the top line? And what would you say is the bar for success?
spk13: Sure. I can speak to the top-line data for the therapeutic programs. But the first question, I'll turn the time over to Andy with respect to what's rate-limiting on getting orders in Japan. Andy?
spk04: Yeah, no, I think what we articulated earlier in the call is that, you know, we've had some very positive meetings with all the MAGIE take-up pharma officials and executives, and I think, you know, they're going to be driving the bus here, and they'll be announcing and making press releases, you know, as appropriate. So please stay tuned and be And be patient. Certainly, you know, the encouragement was kind of articulated by Joe just now that, and this is kind of a recent development, that, you know, the government is going to continue to financially support, you know, this population over 65, which is, you know, about 32 to 36 million people, right? That's not including, you know, the people that have compromised immune issues and so forth, or chronic illnesses. So you're looking at, if you multiply that by two, somewhere in the vicinity of 60 plus million potential doses, right, if everyone gets two shots, two boosters, right, of conventional mRNA. So we're just kind of reiterating what's in the public domain, what's available, and MEG will certainly give you more concrete information as soon as they can. So stay tuned.
spk13: And then pertaining to the top line data for CF and OTC, for OTC we're looking for biomarkers to change in these patients, specifically ammonia to be adjusted to at or near normal levels. Many of these patients are on ammonia scavengers, so if that is indeed the case, there's other biomarkers that we can evaluate and measure, including erotic acid in the urine, and glutamate is another amino acid impacted by the urea cycle. And then OTC itself can be measured. So plenty of biomarkers to measure in these trials in terms of top-line data. With respect to the CF program, We're going to be looking primarily at safety for Phase 1B. This is the first time that this therapeutic has been administered as two administrations and actual patients. And so it'll be very meaningful for us to establish some sort of track record of safety and tolerability in a spectrum of CF patients. Anything to add to that pad for either program?
spk12: Yeah, you know, I think for the CF, I think what we're going to be looking at is, you know, mainly safety, you're right, but we're also going to be looking at various respiratory functions and making sure that this dose is well tolerated in a patient population. So I think we would be happy to see some of those results. And then with regard to OTC, you know, we just obviously want to reiterate the Phase 1B that we we talked about was primarily a safety study. So we will be presenting that data at a conference coming up very soon. So thanks.
spk05: Thank you so much for the details.
spk15: Our next question is from Whitney Jem with Canaccord Genuity. Please proceed with your question.
spk08: Hey, guys. Congrats on all the progress. First one from me is on COVID in Japan. I think you stand to benefit from orders there kind of on two fronts, both from a revenue sharing perspective as well as Arcalis. So can you help us understand how those two will flow through your P&L or balance sheet when the orders and the manufacturing do start?
spk13: So, yeah, with respect to revenue sharing and any sort of additional financial elements due to the Arcalis joint venture and each one to address those,
spk04: Yeah, certainly, Whitney. Thanks for the question. We typically have not provided details with respect to the revenue sharing opportunity, but if you look at the CSL and our TIRS 60-40 gross profit split, you can try to extrapolate what would a three-headed or a three-musketeer type of partnership look like. It'll obviously be very significant and meaningful for us, and we're excited about the partnership to be working with all three people in Japan, especially Meiji, since they're the number one flu vaccine company in Japan, and CSL, who's number two in the world. So you're dealing with two very strong commercial powerhouses in their respective categories. So we're kind of fortunate with respect to that, and we're pretty excited. And of course, you know, having it being made in Japan is kind of, you know, something that the government and the people of Japan are very proud of. And it's going to be under the Meiji brand name. So, you know, keep in mind that this is going to be a Japanese vaccine. And that's what I think excites them. And the government, and we're very fortunate, you know, that they gave us this opportunity to, you know, compare our vaccine to Pfizer, right? And And if we didn't have that opportunity, we would not have this kind of data to share with the world. And the fact that they financially supported, you know, the factory. So, you know, they bet on the right horse. And I think it's going to be an exciting future. And European approval is coming this year, too. So, you know, we're highly, you know, excited about that, too, and anticipating it as well. So there's a lot on the plate. And hopefully that gives you some perspective. But unfortunately, we Can't really go into too many details at this point in time, but hopefully soon we'll be able to reveal those.
spk15: Our next question comes from Miles Minter with William Blair. Please proceed with your question.
spk01: Hey, thanks for taking the questions. How important is it that the strain for your COVID vaccine actually gets adapted to XBB1.5? I know you have, in collaboration with CSL, one in a phase three immunogenicity trial, and I think there was some guidance that maybe we might hear about something in the first quarter. So just want to make sure that that's on track. And is that also a gateway or a guiding factor for the first sale in Japan. Thanks.
spk13: Well, yeah, thanks for bringing those programs up. There's a considerable amount of late stage clinical data that's being collected for this platform. You touched on a couple of these trials. One was the bivalent phase three trial where we're comparing bivalent CoStave to bivalent Comirnaty, and that data is forthcoming soon. So something that will help us be able to communicate how we perform in a multivalent or a bivalent setting to other technologies out there. With respect to the monovalent XBB trial, that one is designed to incorporate the southern hemisphere flu season cycle, and we'll be able to share data for that program later this year. as well. So you did ask whether these programs are prerequisite for certain regulatory discussions. The answer is no for Japan and Europe, and we'll find out for the United States. But we are collecting it in any case, and CSL, our partners, are funding these programs just to strengthen the data packages for each of these programs. And Pat, anything to add?
spk12: Yeah, I'll just add one other thing is that you might be aware the current circulating strain, it seems to be JN1. So ultimately, you know, for the fall season, you know, we will be, once the platform has been approved, we will update it and be ready to supply whatever circulating strain is needed.
spk13: Correct, yeah. The WHO will be coming out with the updated variant announcement next month in April. you know, subsequent manufacturing runs and distribution will be forthcoming and messaged and guided through official press releases by MAGIE.
spk01: Okay, and then secondly, just on the CF program, I know you mentioned you'd be looking at respiratory function data from a safety perspective. I mean, would you obviously look at FEV1 from a safety perspective and then have to report that data anyway?
spk13: For CF, yeah, we're collecting, you know, standard. Well, Pat, why don't you address that?
spk12: Yeah, no, of course, we're going to be collecting a lot of the safety signals, but then we're going to be looking at FUE1 and lung clearance indexes as well. But we, again, just to reiterate, you know, we are going to be recruiting relatively stable patients. There could potentially be no patients recruited in the population as well, but this is an all-comer study, just so you're aware.
spk05: Helpful. Thanks very much.
spk15: Our next question is from Yannan Hu with Wells Fargo. Please proceed with your question.
spk14: Oh, great. Thanks for taking our questions. I have a couple for Coach Dave and a couple for the CF program. Coach Dave was wondering how many booster doses were distributed last year and purchased by the Japan government and what percentage of that volume is for the three groups of people that you touched upon earlier on the call? And how would you expect that number to change this year?
spk13: No, that's a good question. First of all, I can speak to what's readily available. In 2022, over 82 million messenger RNA COVID vaccine boosters were distributed in Japan. That number is not tightly understood for 2023. But it was a significant number, as you can appreciate. For 2024, we now, as we touched on just moments ago, the Japanese government has indicated and communicated the clear recommendation that the elderly get two booster shots a year. And the elderly population is 32 to 36 million. in Japan. So it's a significant number of people. And it was very good to hear that the government of Japan is going to be providing these vaccinations to the elderly free of charge. So speculating how that impacts the market is going to be difficult for me to do, more appropriate for analysts on this call to do that.
spk14: Thanks for the information. In prior years in Japan, were the average booster doses per person under two?
spk13: Japan is well known to have a high rate of vaccinations per person. Many would say that they have the highest rate of vaccinations for any country in the world. especially relative to U.S. and Europe. So they have a high prevalence for getting vaccinated and the elderly is even higher. So a very high rate of vaccination. How we project this into 2024, I think it's reasonable to expect a very high percentage of these people will fill out these cards that they receive in the mail, set up times to go to the clinic to get their free vaccination. But what number that is, it would be inappropriate for me to guide on.
spk14: Sorry, Joe. My question was the prior recommendation or the default number of boosters a person gets per year, is that not twice a year? Was that once a year?
spk13: I don't know what the previous recommendation was. All I can comment on is what's clearly communicated on the MHLW website, which is two boosters. annually for everyone over 65 in Japan.
spk14: Got it. Okay, thank you. And on the CS program, the Phase 1B portion, those patients got two administrations of ARCT 032. I was wondering what's the interval between those two administrations, and also I think you mentioned on the call that FEV1, long clearance, these measures are being collected, perhaps mostly from a safety standpoint. But the question is, will you be preventing those data at the readout? Thank you.
spk13: Well, the first comment was the primary purpose of this Phase 1b data is to ascertain safety and tolerability. We will be looking at severe adverse events. and also more specifically side effects associated with the lung, as this is a CF program and there's increased sensitivity to lung-related side effects like coughing, et cetera. So that's where we're going to be more focused on in terms of externally communicating Phase 1B interim data, is severe adverse events and more lung-centric side effects. And just summarizing the safety and tolerability in a spectrum, a small spectrum, of a relatively small group of CF patients. The other parameters are secondary or even exploratory in nature. We're not expecting in a small cohort like this where many of these people are already on CFTR modulators that we'll see some efficacy readouts or anything like that. But we definitely will have an opportunity to present that data, the phase 1b data later this year when we have a better idea which conference.
spk14: and the dosing interval?
spk13: Thank you. The dosing interval we have not shared publicly. This is a competitive environment. We've made it very clear that these are two administrations. They're inhaled. We haven't disclosed the dose levels, if they're the same or different, and how far apart they are. We had considerable learnings from the 32 subjects of data and the four cohorts evaluated in phase one. So we wanted to And we've applied those learnings to the design of this Phase 1B trial, and we just wanted to keep those cards close to our chest at this time.
spk05: Got it. Thank you.
spk15: Our next question comes from, oh, excuse me. Our next question comes from Yagal Nachamovitz with Citi. Please proceed with your question.
spk14: Hi. This is Amin on for Yagal. Thank you for taking our questions. I have two related to cystic fibrosis. First, on the upcoming CF readout, should we expect, if you can clarify, should we expect any data from the healthy volunteers there as well? And except lung capacity and lung function, have you took bronchi biopsy to look at the CFTR expressions there? Also, what have you seen so far in the Healthy Volunteer that's suggesting a better tolerability of fistula versus the prior mRNA studies?
spk13: Yes, the CF readout is simply going to be focused on severe adverse events or any sort of adverse events associated with the lung like I just mentioned. I don't think we're going to be sharing any outside data from that with respect to samples being directly taken from the lung? Pad, do you have a comment there? There's nothing that we're doing, but anything to comment?
spk12: No. Again, just to reiterate some of the earlier, you know, we haven't seen any SAEs or severe AEs associated with the Phase I or, you know, Phase Ib to date. And obviously, we're monitoring that closely. And in terms of lung biopsies, we are not currently or we're looking at the actual function in patients, so we're not doing that.
spk13: With respect to the phase one data, there is a European CF conference in June that we're preparing to present at.
spk14: Okay, got it. That makes sense. And just one quick follow-up on the OTCD data that you're going to present soon. What do you need to see there to make a go-no-go decision there?
spk13: A go-no-go decision for the Phase 1b readout?
spk14: For the OTCD data.
spk13: Oh, for the OTC readout, sorry. Yes, we'd like to make sure we maintain a safety and tolerability of multiple doses. That's going to be about most importance because that's one of the challenges that many other competitors and people that have tried to do lipid nanoparticle mRNA therapeutics for OTC deficiency have failed in the past due to toxicity. So this is going to be a significant hurdle to overcome. to jump through, but that would be the primary objective. Something that we'd be very encouraged by is to show safety and tolerability of multiple treatments in a spectrum of OTC deficient patients. Having said that, do we also want to see some biomarker changes? Absolutely. It is a placebo-controlled trial, so there would be increased confidence in these readouts as long as we have sufficient numbers. we would be looking for that sort of detail as well to give us confidence going to the next step.
spk14: Okay, got it. Great. Thank you very much for taking our questions.
spk05: Thank you.
spk15: Our next question comes from Pete Stratopoulos with Cantor Fitzgerald. Please proceed with your question.
spk11: Hi, Joe, Andy. Hi, Andy. So just a question about Arcalis. You know, can you leverage that facility for other pipeline candidates and perhaps distribution outside of Japan? And if not already, I don't know if you mentioned it or if I missed it, you know, when do you expect the facility to be operational and what will be the manufacturing capacity?
spk13: Andy, do you want to grab that?
spk04: Yeah, sure. Thanks, Pete. Yeah, we, you know, we've kind of highlighted the timeline for Arcalis in terms of drug substance. You know, they're currently in production right now in getting GMP qualified. So that is pretty exciting. And there'll be some news coming out of them to, you know, update, you know, the status of what they're doing and are they going to be participating, you know, in the orders from Japan, you know, for this year. So, Those are all the things you want to listen for carefully. And obviously the drug product is going to be online probably either later on this year or early next year. And then the plasma business should be on within a couple years. So within two and a half years, they should be vertically completely integrated. But in the meantime, we can certainly fill the void. with our global, you know, CDMO partners in terms of cattle in the United States and Aldebaran and Ressie Farm in Polymun in Europe. So we have a really strong core of, you know, partners to help us fill the void where, you know, until our callus is able to get up to speed. Obviously, if they can make up to a billion doses, they, you know, CFL and MAGIE have, you know, certainly a lot of opportunity to, you know, determine whether you know, it's going to be, you know, a chance to, you know, export, you know, the vaccine to other countries. And so, that'll be a decision that will be made by, you know, certainly CSL and maybe with respect to Japan. Hopefully, that helps.
spk11: Yes, it does. Thank you. And so, a question on the CF program. You know, so you're having two doses. Just curious on the perspective of, you know, how much do two doses actually de-risk, I guess, from a safety perspective? that's one question, and the other one is, you know, any learnings from the cystic fibrosis program, you know, that you can potentially develop an inhaled vaccine to a respiratory virus, either alone or in partnership with a CSO?
spk13: Yeah, good follow-on questions there, Pete, with respect to the, do you want to address those questions?
spk12: Yeah, sure. You know, in terms of CF, you know, the safety, You know, what we really want to see is even with the single or two doses, we want to make sure that there's no respiratory side effects like, you know, coughing, chest discomfort, et cetera. We also want to look at, you know, some secondary safety endpoints like fever, for example, right? So I think we can tell all those things from just two doses. So we're looking forward to collecting that data.
spk13: And the reason why this is significant, too, is, you know, our internal team has been doing inhaled therapeutics for decades. They do have a lot of experience here. And what they've shared with us is that if you do see challenges or problems in toxicology with inhaled therapeutics, it's in the first two administrations. So if we get through this trial successfully, the probability of success for this trial is meaningfully moved up. And so, you know, that's why this is important.
spk12: And in the second part of the question, you know, if the data is positive, what will it mean for the platform? If the data is positive and we do get proof of concept, you know, we will, you know, expanding potentially the, you know, and thinking about other rare diseases or other diseases that need nebulization. But also this platform, of course, can be applied as potentially a vaccine as well.
spk11: Great. Thank you for taking my questions. Thanks, Pete.
spk15: Our next question is from Ed Arcee with H.C. Wainwright. Please proceed with your question.
spk02: Hi. Good afternoon, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you for taking our questions. So first question regarding co-state 0154. So was it approved in Japan? And I believe Andy mentioned that a regulatory decision is expected. from Europe this year. Are there any plans by either, you know, from the tourists or from CSL or Meiji, any other plans to expand into additional territories?
spk13: Yes. Yeah. Europe is, we're intending on getting that approved this year and also the United Kingdom shortly thereafter. Yeah. After that, the next big market, of course, is the United States. CSL will be driving those regulatory efforts, and they'll be providing guidance as to when that's going to be filed and approved. But what we can say at this point is we expect first approvals in Europe and then UK and then the United States.
spk03: Understood. Thank you.
spk02: And then perhaps one question for AICP 810 and OTC. We recall in the past for the Phase II study in Europe, enrollment was slightly delayed. Can you discuss briefly how the study is rolling so far with the Phase II study?
spk13: Yeah, we provided guidance that we remain on track for the end of Q2, and that's the status of that program with respect to some interim data readout is the end of Q2.
spk02: Okay, got it. And then perhaps one final question. This one's for Andy. Cash runway, does this one there, does it include any projected revenue from CoastAid in Japan or now perhaps 154 in Europe as well?
spk04: No, thanks for asking that question. The guidance for the three-year of cash runway at least did not include any revenues from CoastAid and did not include any commercial milestones from CSL. So as soon as we're able to discuss those, we'll will update the guidance with respect to, you know, the cash runway. And so hopefully, you know, we will, you know, be able to do that soon. But at this point in time, you know, we certainly have a long enough runway to be able to achieve a number of milestones this year, which are very critical, you know, to, you know, the opportunity to expand the pipeline within the company. So we're pretty excited and certainly have the resources to be able to address the CF opportunity and the OTC opportunity. And now we're going to be launching two additional vaccines and hopefully be able to see some progress in that in the next few years. So a pretty exciting year with respect to a number of milestones that are going to be forthcoming and hopefully be able to enhance shareholder value.
spk03: I missed it. Thank you again for the kind of questions.
spk05: Thank you.
spk15: Our next question is from Yale Jen with Laidlaw & Company. Please proceed with your question.
spk06: Thanks for taking the question. In terms of Japan's COVID market, is that still mostly government, or is that whether there's also a commercial aspect to evolve maybe in this year or in the future? How do you guys see that? That's a good question. Okay.
spk04: Yeah. Yeah. You know, I mean, the good news, Yale, is that, you know, the government has, you know, given kind of a guidance for, you know, what they're going to support. Right. And so if you look at just the population of the people over 65, that's pretty substantial, 32 to 36 million people. Right. And then that doesn't include, you know, people that are, you know, you know, compromised or, or have, you know, chronic illnesses, right, that certainly are going to be in a position to want to be vaccinated as well. So when you look at that, you know, that's a pretty significant part of the population, at least, you know, something in the 30 to 40, maybe 50% of 125 million people. So that's quite substantial, right? And so it, you know, we're very excited about the opportunity and it's not trivial. And remember, it's going to be a Meiji vaccine made in Japan. So there's a lot, you know, that I think the government is very proud of and Meiji is very proud of. CSL certainly is, you know, excited to be supporting this program and launching it, you know, globally now. So there's a lot of good news behind it in terms of, you know, what is going to be a private pay versus government pay. You know, Meiji will make all those, you know, announcements when the time is right. But, you know, it's something that we're not really concerned about at this point.
spk13: Yeah, and the only thing I would add to that is that Meiji has a strong track record with working with the government to help with these subsidized vaccines in the flu space. So they've been doing this for years, and we're working with the ideal partner that's done this before.
spk15: All right. We have reached the end of the question and answer session. I would now like to turn the call back over to Joe Payne for closing comments.
spk13: Yeah. Thanks, everyone, for participating on the call. And if there's any remaining questions, don't hesitate, as always, to reach out to the team. We'll get back to you as soon as we can. All right. Thanks, everyone. Good night.
spk15: This concludes today's conference. You may disconnect your lines at this time. And we thank you for your participation.
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