This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk15: Good afternoon, ladies and gentlemen, and welcome to the Arcturus Therapeutics first quarter 2024 earnings call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, May 8, 2024. I would now like to turn the conference over to Netta Safarzadeh, Vice President, Head of Investor Relations, Public Relations, and Marketing, of Arcturus Therapeutics. Please go ahead.
spk01: 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 Shibukula, 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 factor 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 trust specifically disclaims any obligation to update such statements. And with that, I will now turn the call over to Joe.
spk13: Thank you, Netta.
spk11: It's good to be with you again, everybody. I will begin my remarks with an update on progress regarding our COVID-19 vaccine program. We are excited to initiate the commercial manufacturing effort for CoStave to support the upcoming fall and winter vaccination season in Japan. We're pleased to report that we remain on track to deliver the initial 4 million doses to Japan in the third quarter of this year. Our partner Meiji intends to then distribute the CoStave vaccine throughout the upcoming fall and winter season. In March, The company, along with our partner, CSL, and their partner, Meiji Seika Pharma, announced that our bivalent COVID-19 vaccine candidate, ARCT2301, met the primary endpoint of non-inferiority in a phase three clinical study in Japan with 930 healthy adults who previously received three to five doses of mRNA COVID-19 vaccines. We were pleased to see Yet again, a superior immunogenicity and neutralizing antibody response of bivalent ARCT2301 to a bivalent conventional mRNA comparator. And that this was confirmed for both the Omicron BA4-5 and Wuhan strains. There were no causally associated serious adverse events with ARCT2301. Arcturus, along with CSL, also initiated a phase three study with the monovalent ARCT2303 candidate vaccine containing the Omicron XBB1.5 variant. The purpose of this study is to generate additional immunogenicity and safety data for our platform in multiple ethnicities to support product licensure in the United States. The study will also assess the co-administration of ARCT2303 with the age-appropriate seasonal influenza vaccines. Approximately 1,680 young and older adults are planned to be recruited in this study throughout multiple countries in the southern hemisphere. Our ongoing phase three vaccine studies showcase the consistent superiority breadth and durability of the Arctura Star vaccine platform. We continue to make progress in expanding the global CoStave franchise. As reported previously, we filed a marketing authorization application for CoStave to the European Medicines Agency or EMA. The iterative regulatory process continues to advance. with the European Commission expected to provide an approval decision in the third quarter of this year. Moving to ARCT2138, the ARCT2138 program or the quadrivalent seasonal influenza vaccine program through our partner CSL is progressing well. As of May 1, 2024, 84 healthy young adults were recruited in the phase one dose finding and immunogenicity study and received one of four dose levels of the study vaccine or a licensed influenza vaccine. The recruitment of older adults is ongoing and the company anticipates phase one top line immunogenicity and safety data in the third quarter of this year. It is important to emphasize that this flu study will also help us understand how high we can successfully dose self-amplifying mRNA in the multivalent vaccine setting. I'll now move on to our ARCT810 program. This is our messenger RNA therapeutic candidate for ornithine transcarbanolase or OTC deficiency. In April, the company presented phase one single ascending dose studies for ARCT 810 at the Society for Inherited Metabolic Diseases annual conference. The ARCT 810 phase one single ascending dose study enrolled 30 adults randomized two to one to receive 0.1, 0.2, 0.3, or 0.4 mgs per kilogram dose or placebo as an intravenous infusion. The Phase 1b SAD study enrolled 16 adults with mild OTC deficiency. And that was randomized 3 to 1 to receive single doses of 0.2, 0.3, 0.4, or 0.5 mgs per kilogram or placebo administered by intravenous infusion. The results showed that ARCT 810 was generally well tolerated with no serious or severe adverse events in both studies. The encouraging results from ARCT 810 phase 1 and phase 1B studies facilitated the initiation of a phase 2 multiple ascending dose study in adolescents and adults with OTC deficiency, which is ongoing in the United Kingdom and the European Union. Subjects are randomized in this study to receive six doses every two weeks of ARCT 810 or placebo randomized three to one. Moving now to our ARCTO32 program. ARCTO32 is our flagship inhaled messenger RNA therapeutic candidate for cystic fibrosis and is formulated with Arcturus's Lunar Delivery Technology. The company is presently conducting a Phase 1B clinical study in New Zealand designed to enroll six to eight adults with cystic fibrosis, with each participant receiving two inhaled administrations of ARCTO32. We will be providing an interim data and progress update for both of our flagship mRNA therapeutic programs. That's ARCT810 for OTC deficiency and ARCT032 for cystic fibrosis on Monday, July 1st. And with that, I'll now pass the call to Andy.
spk07: Thank you, Joe.
spk06: And good afternoon, everyone. The press release issued earlier today includes financial statements for the first quarter ended March 31st, 2024, and provides a summary and analysis of year-over-year financial results. Please also reference our most recent Form 10-Q for more details on the financial performance. We are very pleased to initiate the commercialization of Coast Dave this year, and as Joe mentioned, The initial 4 million doses is planned to be delivered to Japan in the third quarter of this year. As a reminder, Meiji Seika Pharma has an agreement with CSL, where Meiji will be responsible for the regulatory approval, marketing, distribution, and sales of COSTAVE in Japan, as well as coordinating the manufacturing of COVID vaccine products with CSL, and our tourists for the Japanese market. The delivery and sales of the vaccine in Japan will trigger our first commercial milestone payment under our CSL collaboration. This is a remarkable achievement since we signed the CSL agreement less than 18 months ago. We will provide more color on the project initial milestones and impact from the co-stave revenues in the fourth quarter of this year. As a reminder, our projected cash runway does not include any revenues from co-stave or nor commercial milestones from the CSL collaboration. I am pleased to announce the engagement of J.P. Morgan Investment Banking Team to help us monetize our investment in our callous. a 38% owned JV in Japan with partner Axolid. At this point in time, Arcturus is strategically focused on working with a global group of established CDMOs to support our manufacturing efforts across all of our wholly owned pipeline programs. Arcalis, located in a strategic biomedical research and development hub in Japan, is poised to become a key player in the global mRNA drug manufacturing landscape. The CDMO is designed to support the production of mRNA vaccines, as well as our mRNA-based therapeutics, and has already completed the construction of a state-of-the-art mRNA drug substance manufacturing facility. To date, $165 million has been awarded to Arcalis by the Japanese government. These funds were used to build mRNA drug substance formulated drug product capabilities and to construct a DNA template manufacturing facility. We expect this facility to become a leading manufacturer of mRNA vaccines and therapeutics and the only fully integrated self-amplified mRNA facility in the world. I will now summarize our financial results for the first quarter of 2024 compared to the fourth quarter ended December 31st, 2023. Please refer to the press release in our 10Q for year-over-year financial comparison analysis. Our primary source of revenue was from license fees, consulting and related technology transfer fees, reservation fees, government grants, and collaborative payments received from research and development agreements with pharmaceutical and biotechnology partners. For the three months ended March 31st, 2024, we reported revenues of $38 million compared with $30.9 million for the three months ended December 31st, 2023. The sequential increase in revenue was primarily driven by increased activities across all of our CFL programs, including preparation for the commercialization of CoastAid. The BARDA grant revenues of 5.4 million remained relatively consistent sequentially. Total operating expenses for the three months ended March 31st, 2024, was 68.4 million compared with 49.1 million for the three months ended December 31st, 2023. The sequential increase was primarily related to the increase in R&D expenses. Research and development expenses were 53.6 million for the three months ended March 31st, 2024, compared to 36.6 million for the December quarter. The increase in research and development expenses were primarily driven by the CSL and BARDA program, as well as our internal OTC and cystic fibrosis program. Additionally, we have increased investments in early stage and discovery technology. The company initiated preclinical research related to its Lyme disease and gonorrhea vaccine discovery programs. The increase of 17 million in research and development expenses are broken out as follows. $4.3 million for multiple CSL flu programs, $4.7 million for the Meiji commercial production expenses, and $4.7 million for the next-generation programs. The remaining $3 million was related to increased compensation-related expenses. For the three months ended March 31, 2024, Arcturus reported a net loss of approximately $26.8 million or $1 per diluted share, compared with a net loss of $11.7 million or $0.44 per diluted share in the three months ended December 31, 2023. Cash equivalents and restricted cash were $345.3 million as of March 31, 2024, and $348.9 million on December 31, 2023. We have achieved a total of approximately 420.1 million in upfront payments and milestones from CSL as of March 31st, 2024. We expect to continue to receive future milestone payments from CSL that will support the ongoing development of the COVID and flu program and three additional vaccine programs by CSL. The expected cash runway extends at least three years based on the current pipeline and program. 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 anticipated delivery of CoStave vaccine later this year in Japan, We look forward to beginning to report potential commercial sales in 2024. I will now pass the call back to Joe.
spk11: Thanks, Andy. We've continued to make excellent progress in our pipeline of mRNA vaccines and therapeutics and advanced our proprietary mRNA and lunar delivery platform technologies. We're excited, indeed, about the initiation of our commercialization process for CoStave. And with that, we'd like to turn the time over to the operator for questions.
spk15: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the pulling process, please press star followed by the two. If you are using a speakerphone, please lift your handset before pressing any keys. One moment, please, for your first question. Your first question comes from Miles, I'm sorry, Evan Wang with Guggenheim Partners. Your line is now open.
spk09: Great, thanks. Two from me. First, with the therapeutics update on July 1st, with the date set now, hoping you can help set some expectations for, you know, a number of OTC and CF patients that we'll see and whether you're confident that this will be a sufficient number of patients in time course to, you know, really interpret. Second, can you walk us through the rationale for the Meiji monetization of Arcalis, just given the strong cash position? Thanks.
spk11: Hey, thanks, Evan, for the questions. With respect to the Meiji monetization or the Arcalis monetization question, I'll defer that to Andy, but I can address your first question. You've asked for further detail around the July 1st meeting that we've announced. We're going to be providing an interim report data readout for phase 1b for the ARCT 032 cystic fibrosis program. We anticipate this to be the enrollment for this to be completed by July 1st and also we'll be sharing some phase 2 data and a progress update for the OTC program, but this will be on a subset of patients, not a complete set. And this will likely be communicated in the form of a press release. Did I address your question on that one before we go to Andy to address the Arcalis question?
spk09: Yeah. Will we have any data from the additional or the higher-dose cohort at that point, or is it still too early to say?
spk12: We'll be able to disclose more details on July 1st. And then, Andy, how about if you can address the Arcalis?
spk06: Sure. You know, thanks, Evan, for the question. Obviously, we as a management team and the board made a strategic decision, you know, to work very closely with a group of global established CDMOs to help support our manufacturing efforts across our wholly owned pipeline, you know, program. So we're kind of in a fortunate position that we've were able to attract a lot of very strong investment banks that had expressed an interest in helping us monetize this investment. And we were fortunate to be able to select and work with a prestigious bank like J.P. Morgan, you know, to help us look at strategic options. And, of course, you can assume that it's a very well, you know, placed position. asset for, you know, a lot of potential players, especially in Japan with the growth of that market and the approval of the vaccine. And certainly, you know, we're excited about the growth of our Calis and we're certainly going to be there to support them in many different facets. But, you know, this was a strategic decision. on behalf of our company and management team to, you know, become an asset light and a variable cost operating entity at this point and stage of our development. Does that help answer your question?
spk12: Yeah, I'll jump back in the queue. Thanks, guys. Okay, thanks, Evan. Your next question comes from Yasmin Rahimi with Piper Sandler.
spk15: Your line is now open.
spk05: Hi, team. This is Liam Hester on for Yaz. Just our first question in relation to, like, our callus and co-stave. What are your expectations around Japan's order potentially in 2025? And then what are the current manufacturing capabilities of our callus? of producing both COVID and flu vaccines and how is that expected to change in the future? Further moving from there, I think with the OTC and CF programs, do you have any tidbits on potential regulatory path forwards in those two programs? And then also with the July 1st data readout, any specific biomarkers that you will be reporting on at that point? Thank you.
spk13: Sure.
spk11: Andy, do you want to address the the outlook for Arcalis and Coast Haven manufacturing capabilities?
spk06: Yeah, no, it's, we're excited about, you know, the opportunity for Arcalis to be producing vaccine for the Japan market soon. They're in the process of getting GMP batches approved for commercialization, and we anticipate that that should occur sometime in the third quarter. And so, assuming that is successful, it'll be then an opportunity for MAGIE to order directly from our callus in terms of manufactured doses. With respect to guiding on, you know, future orders and, you know, potential opportunities, we're going to really have to defer that to our partners, CSL and MAGIE. They prefer to lead those discussions and those kind of guidance. And so hopefully you can respect the request of our partners. And, you know, obviously we're pretty excited about the future opportunity for not only the Japanese market, but for Arcalis to be a dominant player.
spk11: And with respect to your second question, Liam, For both our OTC and CF programs, I think it's safe to assume that we're intending to expand into the U.S. with OTC, not only expand into the U.S. at some point, but get access to younger, more advanced OTC deficiency disease so that we can mature that product and the regulatory advancement of that. On the CF side, phase two is The Phase 2 plans are around not only the United States, but other countries as well. And we're going to be working closely and have been with the CF Foundation on the design and implementation of that trial.
spk12: Great, thank you so much. Yeah, thank you, Liam.
spk15: Your next question comes from Miles Minter with William Blair. Your line is now open.
spk00: Hi, you've got Sarah on for Miles. Congrats on another great quarter. So just a couple from us on the 810 program. Can you confirm switching the ARCDA 810 dosing format to a three-hour, three-step process and then pre-medicating with acetaminophen and antihistamines in the current Phase II MADS study after observations in the Phase Ib? And just kind of walk us through the rationale for that switch if it was made. And second, how confident are you that we won't see any febrile reactions in the ongoing med portion of the study?
spk11: Yeah, great question. We had the opportunity to share some of the details around our learnings from Phase I and Phase IB and OTC at the recent SIMD conference. We learned a lot. What is very typical and what I've personally experienced throughout my career and those in the field is is you have to understand the rate of these infusion-related reactions early in the trial, and then you ameliorate these or reduce the frequency and address them through adjustments in premedication and the dosing regimen itself. And we've successfully done that. I believe that we've identified a more effective, optimized premedication protocol that involves acetaminophen. It's also... We're happy to utilize a pre-medication process that does not have steroids. So it's steroid sparing, which is important to this population. And so that was a nice learning that we captured from our early trials. And also we modified the regimen. So it's a three-step process for the, it's more conservative and subtle in the infusion process. Now, this is something that this is very typical. So it's not something we brag about that we've removed these infusion related reaction or at least reduce them significantly because this is something that is typical for this type of product. But rest assured, all these learnings that we've learned in the phase one and phase one B trial have been applied to the phase two trial. And we'll be able to give an update on that on July 1st.
spk12: Great, thanks so much. Thank you.
spk15: Your next question comes from Whitney Legion with Canaccord Genuity. Your line is now open.
spk14: Hi, thanks for taking the question. This is Juan on for Whitney. Maybe just a quick two-part question. Assuming you're able to show successful delivery of CFTR to lung cells with your LNP, How are you thinking about expanding the inhaled side of the pipeline, whether it's continuing with a rare disease setting or potential vaccine or something else? And then maybe thinking towards the phase two, are you thinking about targeting null patients or are you more open to broader mutations at that point?
spk11: Thank you. With respect to targeting different mutations, I can allow Pat to address that in a moment. But yes, you can imagine the energy at Arcturus now that we're coming to a closing of the enrollment of Phase 1B and working with the CF Foundation on Phase 2. We're excited about what opportunities can we do outside of CF. And so those discussions are dynamic and very fun here at Arcturus. But we haven't disclosed what our next steps are, our next targets in the long, but there will be a time and a place to do that. But we are also excited about initiating and getting on to the Phase 2 trial. Of course, assuming Phase 1B is good, and we'll provide an update on that on July 1st. But with respect to are we going to be going after other mutations, my initial response is we're going to be initially focusing on non-modulator responsive patients. This includes the Class 1. sub-patient population of the CF community, and also those that do not respond to the presently approved modulators. But in terms of other details of the different types of patients, Pat, anything to add there?
spk02: No, you know, obviously, I think you've touched on that, Joe. I mean, you know, obviously, our therapeutic using mRNA is mutation agnostic, so we can go after a larger subset of patients. But Some of the other mutations are well served, as you well know, so I think the biggest need currently is in the null patient population, and we'll focus on that initially, but we obviously will look at a broader indication in the future as well.
spk12: So, thank you. Thanks, Johan.
spk15: Your next question comes from Yanan Zhu with Wells Fargo. The line is now open.
spk04: Great. Thanks for taking our questions, and congrats on the progress. Maybe first a question on the Japan order. Is the $4 million order an initial order, or could there be additional order for this season? Also, have Meiji set a price, and what is the out-of-pocket if local government subsidy is considered? Thanks.
spk12: All right. That's a good question for Andy.
spk07: Yeah, no, thank you.
spk06: And as I mentioned, you know, a little earlier, I think, you know, our callus is in the process of getting, you know, three GMP batches manufactured and getting it approved so that it could become commercial. And so that timeframe is probably going to be in the third quarter. So if they're successful, then that certainly opened the door. for our catalyst to deliver additional vaccines. And it'll certainly be up to Meiji to make that decision. So that's, I think, a very important kind of catalyst to be looking for. And we're certainly supporting our catalyst in this endeavor. And hopefully they'll be successful with the timeline. With respect to the pricing, I think, you know, There are a lot of people have asked that question. And if you look at the Ministry of Health website, there's been a few numbers that have been reported as about $100 per dose. And, you know, we've also learned that the market price for Pfizer and Moderna is higher than that. So we're pretty comfortable. And I think Meiji is pretty comfortable with the pricing, you know, of the vaccine right now. and pretty excited to start to commercialize CoastAid in Japan. With respect to your second part of the question, I apologize, but could you repeat what it was again?
spk04: Yeah, out-of-pocket cost after the local government subsidy.
spk06: Oh, okay, good. Yeah, we have learned through numerous sources in Japan that the local government as well as the national government will subsidize about 80% of the vaccine, you know, price. So obviously a very encouraging support from the government. And as you know, this is a strategic, you know, investment and, you know, position on behalf of the Japanese government for the people to protect them in the future because it is, you know, one of the only state-of-the-art mRNA manufacturing facility located in Japan. And so Japan and their people will be protected going forward in the event, hopefully, you know, any future, you know, pandemics or breakouts. So certainly a very important strategic decision on behalf of the government, and we were very fortunate to be selected. by the government in Meiji, you know, to be their partner. Great, great.
spk04: If I may ask a question about the CF program. I was mainly wondering about if there are biomarkers that can guide those findings, whether it is in the current Phase 1b or in the next Phase 2. What's the plan to to identify a dose, is it going to be the FEV1, like a functional endpoint, or is there a biomarker that can help in that regard? Thanks.
spk11: Yeah, thanks, Yunnan. Dosing has been guided largely by safety and tolerability measures in our Phase I and Phase IB trials. With respect to a biomarker, there isn't one that's driving these decisions. Anything else to add there, Pat?
spk02: No, I think yes. For this program specifically, yes. It's not driven through biomarkers. That's correct. And it's more on harder endpoints.
spk11: Yeah. In terms of lung volume and FEVs and lung clearance indices, there will be opportunities to address those questions.
spk12: Got it. Thank you so much. Thank you.
spk15: Your next question comes from Miguel Nochemovitz. With Citigroup, your line is now open.
spk03: Hi, this is Amin on for you all. Thank you for taking our questions. We had a couple. First, we wanted to know about the mass of this $4 million and how we should calculate it. So basically $100 per dose and then $4 million gets us to $400 million and you have around 30% economics of it. Is that the right way to think about your share of the revenue here? And when will this revenue be booked? Is that going to be all in third quarter 24, or is it going to be spread in the next few quarters? Yeah, go ahead, Eddie.
spk07: Yeah, no, those are very good questions.
spk06: And as I said on the call earlier, we will provide more substance and color in the fourth quarter. and hopefully you can be a little patient with respect to those questions and answers. With respect to the breakout between MAGIE, CSL, and Arcturus, we're really not allowed to comment on that at this point, except to say that we're all very pleased with the economic sharing opportunity and certainly are grateful to be able to work with three distinguished global partners. and especially, you know, with their commercial, you know, distribution capability, not only within Japan but globally. So our profit share is 60-40 split with CSL globally on a gross profit basis. So obviously we can't do that with a third partner, so you'll have to somehow improvise and assume that it'll be split somehow in three manners, three ways. And hopefully that will give you some color to that conversation. And this is a very lucrative opportunity for all three players involved. Thank you.
spk03: Okay, great. Thanks. And one more on Arkells. What can you tell us about how much your stake at Arkells is worse? And is there any good comp for what the manufacturing side, that side is worse? Or also, what are the timelines you are looking at to monetize this opportunity?
spk11: Are you asking? Oh, you got the question, Andy. You understood. Okay. Go ahead.
spk06: Yeah, no, I think, you know, we're kind of fortunate that there's a number of publicly traded, you know, comps in the United States that should give you a perspective on the valuation of CDMOs that are, you know, participating in the mRNA space. And you can also take a look at what, you know, Aldebaran was purchased for from by Danaher recently in the last few years, and certainly Catalan was acquired as well. And there's a few other publicly traded comps that you can evaluate. So it's a market that I think is very attractively valued because of the growth potential for this, you know, mRNA therapeutic going forward. And hopefully, you know, the appropriate, you know, party that wants to be a part of growing this operation, you know, will help, you know, develop it. And that is our goal, to work closely with them.
spk12: Okay, thank you very much.
spk15: Your next question comes from Ed Arcee with HC Wainwright and Company. Your line is now open.
spk08: Great. Thanks for taking our questions, Joe and Andy, and congrats on the progress so far this year. A couple of our questions around Costave and Arcalis and that order coming up later this year. have been answered. But I wanted to get back to your therapeutics pipeline, in particular the two programs with an update on July 1st. I was hoping that you could share some granularity on the data that you expect to present on that Monday, as well as What are your data thresholds for success in both of those programs to support, you know, further development? Thank you.
spk11: Yeah, good question. Yeah, it's an important day for us, this July 1st meeting, for sure. So I appreciate the question. The interim data set for the Phase 1b ARCT 032 CF program, you know, primarily focused on safety and tolerability of two administrations, of this therapeutic. We may be able to give additional granularity or guidance on the dosing and the specific regimen that we are utilizing. And it provides another opportunity to give more details or guidance on the subsequent phase two trial that's getting planned as you can appreciate. But in terms of data, I think the primary objective is to establish safety and tolerability of two inhaled administrations of this product and help people understand the dosing and the regimen that we're pursuing for phase two. And then with respect to ARCT810, I mentioned it is on a subset of patients. It won't be the complete enrollment, but we're looking for patients biomarker changes primarily from a data perspective that unlike the patients in Phase 1 and Phase 1B, these Phase 2 patients are more advanced. There's also adolescents participating in this trial, so they're younger as well. So more variability in biomarkers from the onset. So what we'd like to see is some biomarker changes there. And so that's And there'll be more information to provide on July 1st. Was that helpful, Ed?
spk12: Yeah, that's great. Thank you so much. Thank you.
spk15: Your next question comes from Yael Jen with Laylaw and Company. Your line is now open.
spk10: Good afternoon, and thanks for taking my question. Both are related to the Japan part. The first one is that the Japanese government has, I believe, funded the construction and production. So, would that number times your share of the company will be a proxy for the potential value of that asset, and then have a follow-up?
spk06: Andy? You can assume. Yeah, no, good question. Obviously, the money provided by the Japanese government was all in the form of grants. And of course, you know, our partner Axolid has worked very closely to, you know, construct this factory with our, you know, construction partners in Japan. And you can assume that it's a lot more than $165 million to build a state-of-the-art factory that has, you know, three different facilities, you know, located within one premise. So it is a part of the investment that was made, but there are, you know, substantially more capital that had gone in through the investment made by Axolid and with partners who are the co-shareholders and equity partners in this industry. in this joint venture. So hopefully that gives you some perspective of, you know, the amount of capital. It is pretty substantial.
spk10: Okay, great. That's very helpful to set up some basis to think. And maybe the next question or the last question here is that in terms of 4 million doses that the major potential to deliver in the third quarter, what are the target of COVID strain of that vaccine?
spk11: Yeah, that's a great question. The WHO came out and announced that the JN1 variant was going to be the variant of concern or focus for the upcoming fall and winter seasons. The PMDA traditionally listens carefully to that recommendation and aligns with it. So I think it's safe to assume that the JN1 variant
spk10: is likely uh the one that uh we're referring to with respect to the four million doses but the formality of that announcement will likely come from meiji okay great and maybe just squeezing one more for andy that starting for the last two quarters you have the uh grand uh revenue in from bada so should we anticipate this figure from modeling purpose to continue quarter over quarter or that's more lumpy? And thanks.
spk06: No, that's a very good question. You know, it is, we don't provide guidance typically with respect to the quarterly type of milestones that we anticipate because they are dependent on, you know, certain variables that need to be achieved and targets that we need to achieve. Sometimes those targets can slip from quarter to quarter. It's not a linear progression model, right? So I prefer to avoid, you know, quarter to quarter type of guidance and prefer to focus on, you know, our three-year projections and the ability to be able to, you know, determine within a reasonable timeframe how much milestone we should earn within a year or two or three. a lot easier to do that versus quarter to quarter. I hope you can appreciate that. I'd love to give you, you know, more color. And maybe in the fourth quarter when we, you know, begin to, you know, ship the Coast Dave revenues and collect the commercial milestones, hopefully that will enable us to have a little bit more quarter-to-quarter type of perspective, but I prefer to remain conservative and guide you when I have a better, you know, assessment of what's going to happen, you know, in the near term. Hopefully, that will help answer your question.
spk10: Absolutely.
spk12: And again, thanks and congrats on the progress. Hey, thanks, Gil.
spk15: There are no further questions at this time. I will now turn the call over to Gil for closing remarks.
spk11: Hey, we appreciate all the participation on the call. If there are remaining questions, please don't hesitate to reach out to our team, and we'll get back to you. Okay, thanks to everyone. Good night.
spk15: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
Disclaimer