Arcturus Therapeutics Holdings Inc. (ARCT) on Q2 2021 Results - Earnings Call Transcript
Operator: 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce Neda Safarzadeh, Senior Director and Head of Investor Relations, Public Relations and Marketing. Thank you. You may begin. Neda Safarzadeh: Thank you, operator, and good afternoon, everyone. We are joined today by Joseph Payne, President and CEO; Andy Sassine, CFO; Dr. Pad Chivukula, 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 substantial 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 company's Coronavirus COVID-19 vaccine candidate 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 end-market product candidates, unexpected clinical results and general market conditions that may prevent such achievements or performance. Such statements are based on management's current expectations and involve risks and uncertainties, including those discussed under the heading Risk Factor in Arcturus' most recent annual report on Form 10-K with the SEC and in other filings that Arcturus 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. Joseph Payne: Thank you, Neda. Good afternoon to all. Thank you for joining the Arcturus’ quarterly call today. Arcturus is developing 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 diluted 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 ARCT-021, our lead program. ARCT-021 differentiated single shot COVID-19 mRNA vaccine candidate that clinically exhibits a promising T-cell response profile. And this profile is attributed to the STARR™ 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 authorised mRNA vaccines for emergency use. We have an ongoing fully enrolled ARCT-021 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 the study shows greater than 90% serial conversion for IgD antibodies binding to the full length spike protein at day 28 following a single shot dose of ARCT-021. 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 ARCT-021 to phase three development. We are very pleased to report today that ARCT-021 has been selected by a global entity for inclusion in a phase three vaccine trial against COVID-19. And we expect this study to begin imminently. After the specifics of the phase three 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 three study designed to enroll 10s of 1000s of participants, and we'll evaluate a five microgram dose of ARCT-021 administered as a single injection regimen. Again, this is a differentiating feature of ARCT-021. 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 ARCT-021 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 ARCT-021. We've also made progress providing access to our vaccine technology and in order to broaden the ability of individuals across the world to access COVID-19 vaccines. Earlier this month we announced an agreement within Biocare to establish a manufacturing facility in Vietnam for the manufacturer of our 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 in Biocare, 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, and alarming increases in transmission have been seen in many other countries across the world. Our expectation is that this Delta variant, and additional SAR-COV2 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 ARCT-154 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 ARCT-154 could be an excellent vaccine to protect against the variance of concern including the Delta variant. ARCT-154 utilizes STARR™ 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 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've made with our mRNA therapeutic franchise. Steve? Steve Hughes: Thanks, Joseph. I'll start with a further update on our novel vaccine programs designed to target widely circulating cells COVI-2 variants, including the highly contagious Delta variant that is now prominent across many countries. Arcturus has advanced ARCT-154 and ARCT-165 to next generation STARR™ mRNA vaccine candidates that have been designed to effectively target SARS-CoV-2 variants is concerned. ARCT-154 utilizes an optimized STARR™ mRNA sequence where we have incorporated multiple modifications, including for stability and increased translation, as well as changes made to increase the immunogenicity of the spike protein. Preclinical data demonstrates strong neutralizing immunogenicity and non-human primates to SARS-CoV-2 Alpha, Beta, Gamma and Delta variants and we have provided additional experimental data in the press release issued this morning. Preclinical non human primate data demonstrate that ARCT-154 elicits meaningfully higher neutralizing antibodies than ARCT-021 including neutralizing antibodies against the Delta variant. Also, as we observed with ARCT-021 we have observed robust T-cell responses with ARCT-154. Based on the strong supported frequency data, we have taken steps to rapidly advance these novel vaccine programs towards clinical development in multiple studies. Earlier this month, we announced approval for a clinical trial application from the Singapore Health Sciences authority to enable advancement of ARCT-154 and ARCT-165 into a phase 1/2 clinical trial. This study will evaluate the vaccines both as a primary vaccination series and as a booster following initial vaccination with Comirnaty®. We have been working with our partner Vinbiocare to initiate a pivotal trial with ARCT-154 and CTA approval from the Vietnam Ministry of Health was recently received to advance ARCT-154 into a phase 1/2/3 clinical study. The trial which is being sponsored and funded by Vinbiocare is a randomized observer blind placebo controlled design that will assess the safety immunogenicity and efficacy in up to 21,000 participants with potential for emergency use authorization by the Vietnam Ministry of Health as early as December 2021. I will now turn to ARCT-810, our therapeutic candidate for Ornithine transcarbamylase or OTC deficiency. ARCT-810 utilizes Arcturus LUNAR® lipid-mediated delivery platform to deliver OTC messenger RNA to the liver; the primary target tissue in OTC deficiency. Expression of the normal Ornithine transcarbamylase enzyme in the liver of patients with OTC deficiency has the potential to restore UAS cycle activity preventing neurological damage and the need for liver transplantation. To-date, we have completed a phase one healthy volunteer dose escalation study with a ARCT-810, the study demonstrated that administration of ARCT-810 was associated with favorable tolerability and an attractive pharmacokinetic profile up to the top dose of 0.4 milligrams per kilogram which is within the anticipated therapeutic range based upon data from our preclinical studies. Based upon these encouraging data, we have advanced this program to mid stage development and last month we obtained approval from the UK health research authority to initiate a phase two multiple dose clinical trial for ARCT-810 and we are currently recruiting sites. The ARCT-810 phase two study as a randomized double blind placebo controlled nested single and multiple ascending dose design that includes adolescents and adults with OTC deficiency. ARCT-810 phase two study interim results from a subset of participants are expected in the second half of 2022. Before I close, I will also mention that our collaborator Ultragenyx recently got orphan drug designation and IND allowance for phase 1/2 study to evaluate safety tolerability and efficacy of UX053 in patients with GSD-3, and the study is expected to begin in the second half of 2021. UX053 is an investigational mRNA based therapy encoding full length glycogen debranching enzyme encapsulated in a lipid nanoparticle, and was developed by the Arcturus R&D team. We're very pleased to see this program advanced into clinical development. Furthermore, we believe that the progress made with UX053 represents another example of the broad application that is possible with our mRNA technology platform. I will now pass the call on to Andy our CFO. Andy Sassine: Thank you, Steve and good afternoon everyone. The press release issued earlier today includes financial statement for the second quarter of fiscal year ‘21 and provides a summary and analysis of a year-over-year and sequential performance. In our consolidated balance sheet the second column should be dated as of March 31, 2021 and not March 31, 2020. Please reference our 10-Q for more details on the financial performance. Today, I will elaborate on the major changes impacting our cost and operation as we transition to a later stage clinical company with multiple programs in our pipeline. I will also provide some details regarding our manufacturing strategy as we prepare for the potential of emergency use authorization in multiple vaccine programs. Finally, I will provide some insights regarding our cash position and expected run rate. We are fortunate that a global entity has selected our ARCT-021 vaccine to be included in a global phase three trial, which they will sponsor and fund with participating country. We are also very fortunate to partner ARCT-154 for vaccine program with Vinbiocare who will sponsor and fund our stage phase three clinical trials targeting the Delta variant. Vinbiocare biotechnology the part of the Vin group, one of the Vietnam largest corporations. Partnering these two vaccines will save us well over $300 million in clinical trial expenses. I will now talk about our global manufacturing footprint. We continue to build out our global manufacturing strategy by adding two key partnerships during the quarter and expanding our capabilities with another strategic partner. We have diversified our manufacturing footprint with strategic partners in Asia, Europe and the USA. Last week, we announced the key partnership with the Vin group to produce up to 200 million doses per year in Vietnam starting in 2022. Recently, we signed a joint venture agreement with Axcelead in Japan to form a joint venture Arcalis to produce mRNA drug substance beginning in 2023. Axcelead is a Japanese company that formed a comprehensive collaborative partnership with Hitachi to develop solutions for next generation biopharmaceuticals. We also expanded our relationship with the rest of the Recipharm in Germany to significantly expand drug product capabilities, including fill-finish production of our lyophilized vaccines. We are also fortunate to have continued strong relationship with Aldebaran and in United States and Polymun in Austria. We continue to plan for the potential that one or more of our vaccines could receive emergency use authorization later this year, early next year. Along with our global manufacturing partners, we expect to have the capacity to produce hundreds of millions of doses annually. I want to provide some color on our quarterly expenditures and forecasted cash runway. Our total recurring operating expenses averaged about $55 million in each of the first two quarters of fiscal year ‘21. Approximately $10 million is attributed to G&A and that should increase by $1 million or $2 million for the remainder of 2021. The remaining $45 million in R&D expenses relate to our current pipeline, supporting our OTC cystic fibrosis, LUNAR flu, and COVID vaccine programs, including stockpiling long lead time raw material and vaccines for the EUA. This amount is expected to increase in the second half of 21 as we ramp our production of ARCT-154 vaccines. Our cash balance at the end of the second quarter was $434 million and we received the remaining 30 million for upfront payment for Vinbiocare last week. Based on our current pipeline, the company's cash position is expected to be sufficient to support operation for more than two years. I will now pass the call back to Joe. Joseph Payne: Thanks, Andy. As we can hear from this call already that this has been a very productive quarter, and Arcturus has made substantial progress advancing our mRNA based therapeutic in vaccine platforms. We believe that we have developed a powerful technology with the potential for broad applications across multiple diseases with both mRNA vaccines and mRNA therapeutics. To recap our recent progress number one we advanced ARCT-021 our lead vaccine program and obtained external support and funding by a global entity for inclusion and on multinational placebo controlled phase three vaccine trial. Number two, we identified ARCT-154 as a next generation vaccine, designed to elicit potent neutralizing immunogenicity to widely circulating SAR-CoV-2 variants and obtained CTA approvals in multiple countries to support its clinical development, including phase three study in Vietnam fully funded by Vinbiocare. Third, we have been approved to transition ARCT-810 our lead systemically administered mRNA therapeutic into a multiple dose phase two clinical study. And finally, we've also made considerable progress strengthening our core capabilities and increased our manufacturing capacity. So we expect to have an exciting second half of the year ahead with a number of anticipated milestones with our vaccine and therapeutic candidates and we look forward to keeping you informed of our progress. At this point, we can now go ahead and open the line for questions. Operator, please proceed. Operator: Thank you. We will now be conducting the question and answer session. Our first question comes from the line of Yasmeen Rahimi with Piper Sandler. Please proceed with your questions. Yasmeen Rahimi: Hi, team, thank you so much for all the great updates. I have three questions for you. Maybe the first one is, can you tell us what is the secret sauce behind 154 that drives almost a 15 to 20 fold higher NAB versus 21 and maybe, versus other self amplifying mRNA that we have seen. Second question for you is, did you run convalesce, human convalescence NAB in your sera analyses? And can you provide the ranges in the severity of that? And then I have a follow up question in regards to 21. Joseph Payne: Great questions. Yes. Thanks for joining the call. I'll pass the mic over to Pad to address your question as to why ARCT-154 exhibits high neutralizing antibodies. Pad Chivukula: Thanks Joe. Obviously we learned a lot over the last year in terms of improving immunogenicity of these spike protein based construct. So some of the key optimizations that we've done for the 154 includes the modification and stability of the RNA and increasing the translatability of the of the replicates. So that's a key important change that we've made. And then we've also changed the spike protein to be more immunogenic. Some of the improvements of the spike protein includes we added some key amino acid substitutions to make it more immunogenic. Well, we've also expressed the spike protein in its pre-fusion state and then finally, in activated the site, we found pre-clinically that all of these modifications leads to enhanced stability and immunogenicity of the constructs. Joseph Payne: And then with respect to the human convalescent sera panel, I could refer to maybe Steve. I know clinically we had a number of approximately 147. But -- Steve Hughes: Yes. So the human convalescent sera, we've tested our human clinical samples and we haven't tested the non human primate samples against those yet, but just as a comparison the geometric mean titer from the human convalescent sera that we had, as Joe said, was around about 147 with titers at the low end down to 10 and at the high end up to 1000 or more, but with a mean value of around about 140. So in these essays, we would be considerably above that. But we do still need to follow up with the monkey testing in a comparable convalescent sera samples. Yasmeen Rahimi: Thank you, Steven, then if I may ask a last question. So the phase three for 21 is funded by a global entity. Has this global entities selected other vaccines from other sponsors for running a phase three? And how soon could we be expecting the completion of a large phase three study that is funded by this global entity? And could you get which geographies, could you get emergency authorization? Just a little bit more detail in terms of this very big announcement would be helpful for us. Joseph Payne: No, it's great questions. At this time, we can't comment on any more detail until the details of the phase three are announced. Once they are we'll be able to speak more freely. Yasmeen Rahimi: Only sponsor of which you have been selected for this funding, or are there other sponsors? I just want to, maybe you can comment that. But I would love to hear it. Joseph Payne: We'd love to speak more in detail on this. And there will be an appropriate time to do so in the near future. But at this time, we can't comment any further. Yasmeen Rahimi: Okay, thank you. Thanks Joe. Congrats. Joseph Payne: Yes. thank you. Yes. Thanks for joining the call. Operator: Thank you. Our next question comes from the line of . Please proceed with your questions. Unidentified Analyst: Hi Joe and team. It's great progress. And thanks for taking my question. So maybe related to the trial in Singapore and that we'll look at 154 and 165 as booster. So how should we think about the next step for these two assets beyond the phase 1/2 study? And maybe on a broader level what is your latest view on the booster approach, particularly in the U.S. and the EU market? And I have one follow up. Thank you. Joseph Payne: Speculative questions, but Steve, do you want addressed the booster market? Steve Hughes: Yes. Thanks, let me take the questions in reverse order. So clearly, there is a booster market, the United States is working towards approval for giving booster injections. And more than one country in Europe has announced that they're going to be giving booster injections I think Israel as well. So clearly, there is an evolving booster market. And that booster market is focused around emerging variants of concern. So with respect to 154, and 165, obviously, we got that clearly in our line of sight in terms of addressing the market need. And as we mentioned earlier our platform approach allows us to very quickly pivot to address emerging variants of concerns as well. One thing I would like to add, though, is that what we've seen for in the monkey data is very, very similar responses to all of the variants of concern that we've tested. And so what we're anticipating is that these vaccines will allow us to cover emerging variants as well as the existing variants of concern. Unidentified Analyst: Great, and then maybe on 810 in OTC deficiency can you provide some insights on the dose that you have thought about for the phase two study? And what biomarkers should investors focus on to get a sense of the advocacy in the upcoming phase two study? Thank you for taking my question. Joseph Payne: Okay, yes, great question. Thanks. So if you recall, in our phase One study and healthy volunteers, we tested all the way up to four 0.4 milligrams per kilogram, fairly confusing between the frequency and the top dose was very well tolerated. So within the multiple dose study, we're testing point 0.3 and 0.4 milligrams per kilogram. So we're at the top of our dose range, which sits very, very nicely in the anticipated therapeutic range that come out of our animal studies. Unidentified Analyst: And our biomarkers that are on the – Steve Hughes: Yes. On the biomarker side, really the traditional biomarkers for this disease. and also looking at the 24 hour ammonia profile. So these are two key biomarkers for us, and then also the acid as well. Unidentified Analyst: Great, thank you. Joseph Payne: Thanks, Brian. Operator: Thank you. Our next question is comes from the line of Nick Abbott with Wells Fargo. Please proceed with your question. Nick Abbott: Good afternoon. Thanks for taking the questions. Congratulations on some terrific progress here. So my first question is on 154. And that is, how good is a single dose of 154? I think Joe said in your prepared remarks a single dose would be mandatory in certain geographies. So is there a plan to include a single dose in the phase three? Joseph Payne: No that's a great question. It's something that we're going to be evaluating. But ARCT-021 is our single shot vaccine assset with the clinically promising T-cell response profile, where ARCT-154 that's right now intended to be a two shot vaccine or a one shot booster optimized for high NABs targeting the variants especially delta. So we're viewing this as two separate assets. But having said that, are we going to be looking at blood samples and evaluating biomarkers after a single administration of 154? Yes. Is 154 a self replicating mRNA vaccine? Yes, which implies that it has a promising T-cell profile as well. So we'll be closely monitoring it if that may have feasibility, at some later point. Nick Abbott: Thanks. And then on one just looking at the graph you provide, which is very helpful. I mean, it appears to be around about half a lot less in terms of T-cell response on the LS part. Is there a reason for that do you think? Or is this just sort of noise between different experiments done in different times? Joseph Payne: Yes, it's a fair observation. Steve Hughes: Yes, a fair observation. Joseph Payne: Pad do you want to comment on it? Pad Chivukula: Sure. Thanks Joe. Joseph Payne: Okay. Pad Chivukula: Our T-cell data at least from our perspective, the T-cell data are comparable. As you can see, there's a couple of points that are above the median. But I think from our understanding T-cells are important and we're eliciting T-cells for both drugs, both 154 and 021 Joseph Payne: But nonetheless, it is a fair observation. ARCT-021 does a great job at eliciting T-cell response. So. Nick Abbott: And it brings me to it. Pad Chivukula: Sorry. This is the key thing is if you look at the 021 graph, the data is spread more widely. So there is a couple of on each of the things, there is a couple of animals that scored much higher than the remaining animals. And that pushes the average up, whereas for 154 the data is tighter. So I think it's just variability. And if we tested more animals, that those two sets of graph would have come much closer together. I think a key observation I take away from the glass is the consistency of the responses for both 021 and 154 we are not seeing that is staggeringly better against one and not so good against the others. We're seeing a nice, consistent response across all of the variants. Joseph Payne: Yes. Like you see variability with NABs but not when T-cells and this could be a very important feature of our vaccine franchise. Nick Abbott: And you interpret that as you're targeting a conserved epitopes or epitopes. Joseph Payne: Exactly. Nick Abbott: And then you just, maybe one more for me, just going back to what you said earlier, Joe, will it be a trial of your 154 as a booster 021 and then my last one is what is the rationale and strategy for 165? Thank you. Joseph Payne: So yes, we do have plans to boost 021 with 154, and also 165 for that matter. So we'll make a subsequent disclosure on that, once we have approval for that trial to move forward. 165 I think we're trying to develop a broad vaccine portfolio so that we can have coverage against multiple variants in multiple different countries. We were very fortunate in being able to take two of our assets forward into phase three clinical trials. 165 we're going to really assess how well it performs within the study in Singapore, and whether there is any unique advantages in certain situations of 165 over 154 or over 021 before we decide how move that one forward. We'll be doing neutralizing antibody testing and binding antibody testing and T-cell testing against multiple different variants of concern to profile those vaccines in more detail. Nick Abbott: Great. Thanks for the answer. Joseph Payne: Thanks Nick. Operator: Thank you. Our next questions come from the line of Seamus Fernandez with Guggenheim. Please proceed with your questions. Seamus Fernandez: Oh, great. Thanks. And congrats on all the progress guys. A couple of things just for clarification, just hoping to get maybe a better sense of how you're proceeding in Singapore specifically with 154 and 165 program? Specifically, I'm just wondering if you would happen to incorporate a parallel head to head immunogenicity study versus Pfizer's vaccine in part because you're also doing your testing on top of Comirnaty. So just wanted to get a better sense of if we're going to see head to head data as we saw today versus your historical vaccine, if we might get something similar in the Singapore study from an immunogenicity perspective as a boost program. And then separately, once full approval of Comirnaty has been executed is it possible to run a head to head of 154 against the same exact model so that investors who might be skeptical of the magnitude of change here obviously, it looks quite substantial to me. But for those who might be skeptical that might be one way to approach the comparison. Just wondering if you would consider doing something like that. Joseph Payne: Yes. We're already considering it. We've already received approval to proceed with evaluating 154 as a booster to not only other ARCThrct vaccine or vaccines, but also to Comirnaty. So we're already looking into that, and evaluating that. And considering that data can be compared head to head and understand the value of this particular vaccine. With respect to anything else to add Steve? Steve Hughes: Well, I think that, as you noted, at this point, we can't get Pfizer vaccine to do the comparison. It's not commercially available. So within the study in Singapore, it's actually not possible right now to do a direct head to head comparison. And I think what we'll have is the human data with real antibody levels in humans using well validated essays that we can then compare with the existing Pfizer data. So I'm not sure there will actually be a need. One other important question really is how does the antibody levels, how are they maintained over time. So for the Pfizer vaccinated individuals, we'll know when they were vaccinated. So we'll know from their baseline sample, how far that they often the original vaccination, and as we collect the data from our study over time, we'll be able to compare our antibody levels over time at a similar time point. So for example, if somebody was six months out from their Pfizer vaccine, and they've got a antibody level of X, we can have a look when they're six months out with our vaccine to see what the antibody levels are at that time as well. So we can do some indirect comparisons in that way. And I just think that the data emerging from the study will kind of overtake the need to do a direct head to head comparison. Joseph Payne: Go ahead. Seamus Fernandez: No, no, please. No, go ahead. Joe. Joseph Payne: Okay, no, I was just going to add on to the your question about the primate data and how investors should lay holder be convinced of how important this data is the entire vaccine community has been collecting data in both this past year, and we've now gained considerable confidence and there's convincing evidence that immune responses against SAR-CoV-2 are similar to those reported in humans, and authentically represent COVID-19 observed in the human population. So these primate models serve to be an excellent model and can be relied upon. Seamus Fernandez: Great and then just in terms of the timing of OUS or just the utility of the Vinbiocare clinical trial that's going to be run in Vietnam. Can you just talk about how you can utilize that data to gain approvals in other markets and how far reaching you think those data could actually end up being? Joseph Payne: Yes, thanks. That's a great question as well. So the study has been designed to meet international standards. So it's been designed so that the, based on the way the study is laid out, and the collection of the endpoints and the way that we're analyzing the data, that it would be acceptable in Europe, the United States and other geographies as well. In terms of whether conducting the study in a entirely different foreign population will meet the FDA standards. We plan to have those discussions in the very near future. So conceptually, we're planning to use the data to fall wherever we can to get board acceptance, and make the vaccine broadly available in different geographies. Unidentified Analyst: I guess as just my final question, in terms of gaining early use authorization, whether it be utilizing some of your the antibody titer data, or I guess one question is will you be looking at or be able to do a sub study of antibody titers based on some of the updates that have been provided by the WHO versus different variants as a way to pursue broader authorizations in developed markets, like Europe, or potentially even the U.S.? Joseph Payne: Yes. We've got a substantial immunogenicity subset within the study where we're collecting CRM over time, different time points, so we will be able to do those evaluations against emerging variants of concern. So if an antibody becomes available in Europe, or the United States or somewhere else, then we should be well positioned to take advantage of that. Unidentified Analyst: Great, thanks for the updates. And I'll jump back into queue. Thanks. Joseph Payne: Great, thank you. Operator: Thank you. Our next question comes from the line of with Goldman Sachs. Please proceed with your questions. Unidentified Analyst: Hey, this is Rob on for Madhu. Just two questions. How much of a GAAP do you think there is developmentally between 021 and 154 and if 154 works well would you only pursue commercialization of 154? Would you go after both? And then what kind of data should we expect from our 810 OTC readout later this late in 22? Would it be reasonable to expect scavenger therapy discontinuation and dietary change? Joseph Payne: The latter question I'll have Steve comment on it. With respect to our intent pertaining to our two assets, we want to fully develop and market them. That's the intent. ARCT-021 is a single shot vaccine with clinically promising T-cell response profile and that's needed, especially in certain regions. The single shot nature, for example, while 154 has been optimized for high NABs, targeting delta and the other variants, which is also needed over as a booster or as a two shot vaccine. So I think both of these have a market clearly and we're addressing those in our phase three studies. With respect to the latter question, I don't Steve, do . Steve Hughes: No, great question. So ideally, over longer term therapy, yes scavenger therapy will be reduced and withdrawn. This particular study won't go out long enough to allow us to do that because you need to maintain the level of stability of the ammonia, 24 hour ammonia curve and UA Genesis essay before we start taking people off their meds. As this study moves out that we almost certainly the data is positive at that interim analysis we'll be looking at an open label extension study to roll the participants over into and that's where we would be doing things like we're doing their scavenger therapies or trying to push out the dose interval to longer intervals between each dose. Unidentified Analyst: Okay, thanks. Joseph Payne: Thank you. Operator: Thank you. Our next question is come from the line of Wainwright. Please proceed with your questions. Unidentified Analyst: Hello, everyone, this is Thomas . Congratulations on all the recent progress. First question about the Vinbiocare collaboration in Vietnam. So the goal is potential EUA by the Ministry of Health in December 2021. Can you go over some key colors and timeframe between now to December. Joseph Payne: Steve address some sort of interim data between now and the anticipated emergency approval in December for the Vietnam study. Steve Hughes: So the emergency use authorization will be based on the interim analysis. So, and that will be the first interim analysis of the data. So as it's a pivotal study, so we can't go taking multiple data cuts like we can in an earlier phase clinical trials. So we anticipate having a first interim analysis of the study in the November timeframe to enable emergency use authorization in the December timeframe. Unidentified Analyst: Okay, thanks for clarification and perhaps a question about the collaboration. You mentioned 40 million upfront payment but also in the press release, it says remaining 30 million received subsequent to quarter end. So was 10 million received in first quarter or second quarter? And if so, how is that characterized? Andy Sassine: Yes. The 10 million, this is Andy Sassine, the 10 million was received prior to the end of the quarter as a deposit and consequently was reflected as a current liability, accrued liability on our balance sheet. Obviously, we executed the transaction and signed the deal subsequent to the quarter, and that the remaining $30 million so that accrued liability will disappear from our balance sheet. Hopefully that helped clarify the accounting treatment of that 10 million deposit? Unidentified Analyst: Yes, it does. Thank you. And perhaps one last question from us regarding 165. When should we expect preclinical data from perhaps non human primates study? And go over some similarities and major differences between 165 and 154. Joseph Payne: Yes. Well, if you noticed, we've entered into collaborations or relationships with respect to ARCT-021 and 154. If we do the same thing with 165, because of its specific regional profile, and that would be an appropriate time to disclose more detail around the preclinical data. So whether when we get human data for it, or when we do some sort of deal around it, if we do, that would be an appropriate time to disclose more detail on 165. Unidentified Analyst: Okay. sounds good. Looking forward to that and thank you for taking the questions and looking forward to the unveiling of the phase three study. Joseph Payne: Okay, thank you. Operator: Thank you. Our next question comes from the line of Company. Please proceed with your questions. Unidentified Analyst: Good afternoon and thanks for taking the questions. First of all, regarding 154 besides benign potentially Singapore, do you guys own the global right for the rest of the world including the United States? Joseph Payne: Yes, correct. Yes. Well we have the global rights to ARCT-154. Unidentified Analyst: Okay, the second question is that the press release reveal that the comparison of neutrals and the body of two various variants, you have used a 7.5 mig in 021 and you anticipate to use 5 mig instead for the trials? Was there a reason to use this dose? Was that because there's a fair comparison, or there's other reason behind it? Joseph Payne: No, it's to do with timing of the study. And when we actually set off on the study was earlier on when we were anticipating moving into phase three with a 7.5 microgram dose. As the data rolled out from our phase two study, he showed very clearly that the 5 microgram dose performed as well as the 7.5 microgram dose and was a little bit better tolerated. And so we changed our phase three dose from 7.5 to 5. So it's just a timing legacy issue. But based upon what we know about what we've seen from recent publications about the translation from the studies into humans, and the fact that the five micrograms dose performed, at least as well as probably a little bit better than the 7.5 micrograms we would anticipate that if this had been a 5 microgram dose primate study that it would have looked very similar. Unidentified Analyst: Okay, maybe the last question here was about 165, I understand that you may not really want to review all the information at this point until later. But just in the conceptual wise, was there any sort of general differences between 154 and 165 you sort of described? Pad Chivukula: Yes. This is Pad. Sure, we can tell you that the 165 molecule has a bias towards the beta variant and we will be talking more about that in future time. Unidentified Analyst: Okay, great. Thanks a lot, and congrats for all the progress. Joseph Payne: Thank you. Appreciate it. Operator: Thank you. Our next question comes from the line of Kumar Raja with Brookline Capital Markets. Please proceed with your questions. Kumar Raja: Thanks for taking my questions. So with regard to ARCT-154 how much manufacturing capacity do you have? And when is this 200 million capacity for Vinbiocare guy expected come on board? And is it mostly for use by Vinbiocare? Joseph Payne: Yes. At this point, what we've disclosed is that the Vinbiocare facility will be able to produce up to 200 million doses annually. And we've been guiding that it'll happen in probably the second half of 2022 and so that's about all the information we can give you at this point with respect to that capacity. With respect to the other parts of our manufacturing, relationships and collaboration, we really haven't given any specific detail, except to be able to tell you that we have it the capability of producing hundreds of millions of doses annually with those relationships. As you can see, we've expanded it quite substantially and in preparation for this opportunity with obviously being very capital efficient and working very closely with our partners. So two very-very important attributes that we wanted to execute on. Hopefully, that helps. Kumar Raja: And with regard to this manufacturing, that can be shifted from 021 to 154 or based on whatever the data you're seeing, how seamlessly can that be done? Joseph Payne: Yes, that's correct. One of the advantages of this platform technology is you can modify the payload without very little modifications to the manufacturing process. So it's very streamlined. Kumar Raja: Finally, with regard to the preclinical pipeline what's happening in terms of cystic fibrosis and flu vaccine. Thank you. Joseph Payne: Go head Steve. Steve Hughes: So, the CFO Graham we're anticipating that we'll get a indsubmit for a clinical trial application in the early part of next year. Kumar Raja: Okay, great. Thanks. Joseph Payne: Thank you. Operator: Thank you. That is all the time we have today for questions. I would now like to turn the call back over to Joseph Payne for any closing comments. Joseph Payne: Yes. Thanks, everyone. Looks like our time's up and we're going to be closing the call now. Feel free to reach out to our team. As always, if you have any follow up questions we'll be as efficient as we can in our responses and bye for now and look forward to seeing you again soon. Operator: Thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time. Have a great day.ARCT Ratings Summary
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Arcturus Therapeutics Reports Q4 Earnings, Shares Jump 30%
Arcturus Therapeutics (NASDAQ:ARCT) saw a 30% surge in its share prices yesterday after reporting Q4 results. The company's revenue for the quarter was $160.3 million, a significant increase from $13.4 million in Q4/22. The boost in revenue was primarily due to the $200 million upfront payment from CSL Seqirus as part of their exclusive global collaboration and license agreement for next-generation mRNA vaccines.
Arcturus is eligible for potential development and commercial milestones of up to $4.3 billion, with 40% profit sharing for COVID-19 vaccines and up to low double-digit royalties on influenza vaccine revenues.
Joseph Payne, the President and CEO of Arcturus Therapeutics, reported that the Phase 3 study conducted by Meiji Pharma to evaluate ARCT-154 as a booster vaccine for COVID-19 has been fully enrolled ahead of schedule.
