Good day and welcome to the Arcturus Therapeutics Second Quarter 2022 Financial Update and Pipeline Progress Call. Today's conference is being recorded. At this time, I would like to turn the conference over to . Please go ahead, sir.

Thank you, Sara. Good afternoon and welcome to Arcturus Therapeutics Second Quarter 2022 Financial Update and Pipeline Progress Call. Thank you all for joining us. Today's call will be led by Joseph Payne, our President and CEO, and Andy Sassine, our CFO. Dr. Pad Chivukula, our CSO and COO, will join in for the Q&A session. Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the statements. Please see the forward-looking statement disclaimer on the company's press release issued earlier today, as well as the risk factors section in our Forms 10-Q and 10-K filed with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made, August 9, 2022. Arcturus specifically disclaims any obligation to update such statements to reflect future information, events or circumstances. With that, I'll now turn the call over to Joe.

Thank you and good afternoon to all. Thank you for joining Arcturus' Q2 quarterly call. My comments today will begin with a brief summary of the business case for our vaccine platform, followed by highlighting our recent progress on our pipeline, including additional details per program before I turn the time over to Andy for financial updates. Business case for our vaccine platform continues to mature and gain momentum. We begin by re-emphasizing our low dose level. A lower dose level of only five micrograms potentially means improved safety benefits and higher manufacturing related profit margins. Our vaccine platform is also devoid of an adjuvant and therefore captures all of the potential safety benefits and manufacturing simplicity associated with that. In addition to the low dose of five micrograms and the simplicity of zero adjuvant, our vaccine platform utilizes Acrturus's lyophilization technology. We've now collected impressive cold chain data showing favorable stability, shipping and storage advantages that our lyophilized vaccines have relative to frozen liquid vaccines. Some of the critical challenges with presently approved COVID vaccines are related to durability and broad spectrum neutralizing antibody activity, especially with respect to the Omicron variants. We believe that broadly acting and the potentially longer lasting self-amplifying mRNA booster vaccinations would further strengthen our business case for this platform. Indeed, the data we shared today in our press release continues to suggest that self-amplifying mRNA vaccines may be a superior next generation mRNA vaccine technology platform. I will get to more details pertaining to that data shortly. This quarter has been highlighted by several key achievements including significant progress, advancing our pipeline of mRNA based vaccines and therapeutics. Let's begin with ARCT-154. This is our self-amplifying mRNA COVID vaccine candidate that has shown impressive activity against SARS-CoV-2 both as a primary vaccine and…

Thank you, Joe, and good afternoon everyone. The press release issued earlier today includes financial statements for the second quarter of 2022 and provides a summary and analysis of year-over-year and sequential financial performance. Please reference our 10-Q for more detail on the financial performance. I will summarize our financials and then some operating metrics as we continue to transition to a late stage clinical company with several assets in our pipeline. I will also provide some details regarding our manufacturing strategy as we prepare for the potential of emergency use authorization in Vietnam. Finally, I will provide some insights regarding our cash position and expected run rate. As you heard Joe mentioned, we remain productive in the second quarter, expanding on the highly encouraging efficacy trials and booster durability results for ARCT-154. As we have previously discussed, we partner to ARCT-154 next generation LUNAR COVID-19 vaccine candidate in Vietnam with Vinbiocare. Vinbiocare is part of the Vingroup, which is one of Vietnam's largest corporation and is sponsoring and funding our Phase 1, 2, 3 study in Vietnam targeting COVID-19. This partnership include the trial and collaboration around building a vaccine manufacturing facility in Hanoi, resulting in significant cost saving for Arcturus. Our technology transfer activities remain on track for the facility to become operational later this year with a potential capacity of over 200 million doses annually. We are also continuing to work with other manufacturing partners to mature our global footprint including Europe, Japan, and the United States of America. Revenues from strategic alliances and collaboration for the second quarter of 2022 with $27.1 million, a significant increase from the previous two quarters. This increase in revenue during the three months ended June 30, 2022 as compared to the three months ended March 31, 2022 was primarily due…

Hey, thanks, Andy. We're pleased to have another productive quarter, advancing our pipeline of mRNA vaccines and therapeutics and all the while judiciously controlling our operating expenses as was just nicely summarized by Andy. We remain highly encouraged about the potential of our clinical pipeline, and from our mRNA vaccine therapeutic platforms. We look forward to providing you with updates on our progress everyone. I'll now turn the call back to the operator to field any questions.

Thank you. . And we'll take our first question from Yasmeen Rahimi with Piper Sandler. My apologies. One moment, please will actually take our first question from Pete Stavropoulos with Cantor Fitzgerald.

Hi, its Pete Stavropoulos. Thank you. Thanks for taking my question. So one question I have is, is there any more details that you can share in terms of the trial designed for the booster? I know that you previously shared that it was going to be about 2,400 patients for one study. But you mentioned you're going to run two smaller studies. Can you provide in color on the size of the studies and possibly key differences? And will one or both studies be conducted perhaps with an Omicron specific strain by bivalent candidates? Any color would be appreciated?

Sure. That's a great question. Thanks, Pete for joining the call. Yes, we did emphasize that we're splitting bifurcating the single trial of 2,400 people into two smaller trials. We haven't communicated the exact number of those trials in the specific countries, but one will be emphasized on comparative immunogenicity and the other will be safety centric.

Okay, and in terms of when you talk to the different agencies, do they want sort of a variation for a comparator arm? If they're asking for a comparative arm, meaning like no RNA base versus now we have protein-based vaccines is that are approved with EUA in the U.S. and Europe?

Pad?

Yes, I mean, we've had those discussions with various health authorities. And we will be using an active comparator rather, but we will provide more details on which vaccine we will be using as comparator at a future time.

Okay, and if you don't mind, just one last question on the OTC program. Can you talk a little bit about that trial design, like know what type of patients you're enrolling? We'll be able to -- will they be on stable background meds? And if so, will you be enrolling control patients, uncontrolled patients both?

Yes, we know that they're adults. It's approximately 24 adults and adolescents as we've communicated. These are patients there. Yes. And they're relatively stable. But other details in that I don't have in front of me at this time. Pad is there other details you want to provide with respect to the patients in Phase 2 trial.

Sure. Yes. And again the Phase 2 trial is a multi-dose trial. And we will be looking at all biomarkers associated with reduction of ammonia. We'll be looking at the enzymatic activity as well as ureagenesis in these patients. And we were, again, some of the things that we've done in our Phase 1 that we've talked about, we will be doing also in our Phase 2 trial. And we are hoping to see some changes in the biomarkers that we're monitoring.

Okay. Thank you very much, and congratulations on all the progress.

Thanks, Pete.

Thank you. And next, we will move on to Yasmeen Rahimi with Piper Sandler.

Hey Yasmine?

Hi, This is Lauren on for Yas. Just a couple questions for the approval in Vietnam. So it's looking like the approval is contingent on the booster data. So could you provide a bit of color? Will you need two booster studies? And if that's so how large will they be? And what is the comparator? And then the second question is for the approval well, you need to have the data from the booster studies in 4Q, 2Q, how confident are you in that? And can you comment on the extent of the data you will generate? Thank you.

Sure, so well the first clarification is we will not, the prerequisite of booster data is required only for full market authorization not for emergency use approval. So just to make that clarification. What was the follow-on question? The size of the trial, we commented on with respect to the size of the trials it's smaller than 2400. So it's more cost efficient and faster to recruit and faster to complete by bifurcating the trial, so we haven't disclosed the exact numbers for each of these trials and the purpose again, one is going to be more immunogenicity focused with a comparator vaccine, and the other is going to be a safety centric.

Okay, fair.

The question against the active comparator again, we mentioned in the previous question that we will be doing an active comparator trial, but we haven't disclosed which one.

Okay, great. Thank you.

Thank you.

Next we'll take our question from Nick Abbott with Wells Fargo.

Hello, good afternoon. Thanks for taking the questions. So the first one Joe is in the prepared comments you say that you will expect six months I think antibody data against BA.5, if I heard that correctly. So, have you seen one month, three month data against BA.5, can you comment on that? And should we be expecting to see this 40, 50 fold boost in NAB levels at three months for BA.5?

Yes, we should hope so. That'd be fantastic. We have not seen -- we have not seen any BA.5 data. We have seen BA.1 and BA.2 data that we've shared today in our press release. And what's notable about it is that it remains to be high, it doesn't have this potency drift that you see from other earlier vaccines. So we remain hopeful that we'll see a high geometric mean fold rise number, this GMFR number with BA.5. But we haven't seen any data. And it is correct that the data we're presently collecting is six months data for all variants, including BA.5, but also BA.1, BA.2, BA.4 and BA.5, okay.

Okay.

And that's coming.

Sorry.

Go ahead.

That sounds like you're promoting a movie, Joe. Just going back to the booster. So I get this right. So one study is going to be inactive, have an active comparator. So obviously, the N is divided by two or maybe it's two to one, I don't know. The other one is going to be safety centric. So that's going to be uncontrolled. That's just going to be whatever it is 1000 patients get the booster, is that the right way to think about it?

Yes, that is the right way to think about it.

And then I think there's a lot of personnel, whether you expect to get the data 4Q, you had a contract with a CRO, is it just a matter of sort of modifying that contract now, you don't have to start from scratch. You can start the studies pretty quickly.

Go ahead.

Yes, no, that's correct. Yes, the CROs that we're using are well familiar with and we worked with them before. So we shouldn't anticipate any delays with the changes.

Okay. And so if you expect full approval early '23, then we should have data considerably before then considering, you'd have to submit that to the regulators in Vietnam, they would have to review those data.

That's correct. And again, just like the other vaccine manufacturers, this is a process that we want to undergo, which is a rolling submission. So we will have various pieces of the regulatory filings and we'll be doing some day.

Okay. And then just last thoughts on for me, you speak to the KOLs because they do when you show them these data, how do they view these data versus the current first-gen vaccines and what one might expect from various specific vaccines?

Right, so it's always a fun and interesting academic challenge to compare data with other vaccines. But when we shared this with KOLs, and experts in the field, they do refer to the third shot vaccine data that that other approved vaccines that I've shared where they've shown titers in the 300s and GMFR of 17 after one month, and we've shown a GMFR of 44 after three months. But there's always nuances to this that people prosecute but the short answer to your question is the KOLs are generally very encouraged by this data no doubt.

Okay, great, terrific. Thanks, Joe.

Thank you.

Thank you. Next we'll move on to Seamus Fernandez of Guggenheim Securities.

Hi guys, this is Evan on for Seamus, I have two on COVID. And then a follow-up on OTC. So wanted to follow-up on the booster trial design. One word, the conversations with regulators and what's left before trial starts for both trials. I believe you mentioned the first trial and starting 4Q. What kind of population will trial enrollment was pulling the adult and elderly? And are there any steps you're taking to accelerate development? And then given that the trials are centered around 154, do you expect the trials and approval to support government sales from U.S. and European governments or would you need to develop a Omicron specific variant and I guess, is there any updates on potential developments there?

Yes, both great questions. First of all, we're working closely with the CRO. And that interaction is going to be key with respect to the exact start date, the initial start date for the booster trial. And we have indicated that there's two separate countries but it's at least presently the same CRO. So we're confident there with respect to whether we're going to be focused on just ARCT-154 or building a bivalent strategy is going to be data based, those sorts of decisions. We've touched on it already on the call today. If ARCT-154 stands alone and it's very strong at generating high GMFR's against BA.5 and we have, we're in a fortunate position where we can continue to progress that as a standalone monovalent vaccine against all variants of concern. If we do see any wavering data against BA.5 or at future variants of BA.10 for example, there may be an appropriate time to bridge in a bivariant strategy. We've been building that consistently throughout this process. We're prepared to move quickly there. And we're working with potential pharmaceutical partners, commercial strategic partners on that.

Thanks. And one question on OTC, you highlighted in the remarks that you've identified thousands of patients. Can you clarify how many would -- or qualify for the trial? And what's next before dosing begins?

Yes, it's well, it's several dozen. I just want to clarify that. So it's many, many. So we've identified a large number of OTC patients in Europe with specific throughput after pre-screening type efforts. So we're in a good, we're in a great position there. So where we are now is in the official screening process and dosing of these patients throughout the second half of this year. And Pad…

And I can just clarify that, we only need a fraction of the patients that we went in for the trial. So we that's all the color we can give.

Yes.

Great, thank you guys.

Yes, thank you.

Thank you. And next we'll move on to Kumar Raja with Brookline Capital Markets.

Thanks for taking my questions. So FTF recommended using a bivalent 4, 5 spike protein as a combination. So how soon do you think that is going to come on board? Will you be comparing bivalent in your planned trials?

Any bivalence strategy, we haven't disclosed because we've been working behind the scenes with our potential pharmaceutical partners, but we are prepared to proceed immediately if needed. The desire I want to reiterate the plan A is to proceed with ARCT-154 as a standalone monovalent that has exceptional broad spectrum activity because of the self-amplifying mRNA technology. There's something special about it at least that's what we're seeing with BA.1 and BA.2 and we hope that continues with BA.4 and 5.

Okay. And with regard to the planned second trial for COVID-19 vaccine. What is the expectation in terms of timing for that?

Timing. Well, we said we're collecting the data presently. So we're in the midst of data collection. So once the data set is completed, we'll be able to see that data and operate accordingly after we view it.

And with regard to the approval in Vietnam, this manufacturing runs, three manufacturing runs that is being done by Vinbiocare?

Yes, it's not. My understanding is that's not a requisite, but that that sure can be the case. We've already completed a portion of those runs already at the facility in Hanoi. I believe it's two of them already. So, but they've requested three, just to establish reproducibility for full approval.

Okay, great. Thanks.

Yes. Thank you.

Thank you. Next, we'll move on to Yale Jen with Laidlaw and Company.

Good afternoon, and thanks for taking the questions. The first question is that, given the Vin the booster study was started in the fourth quarter of this year, and the potential for approval in Vietnam and potentially will be the Vin in 2023. Does the Vietnam full approval need to look at the data from the upcoming boosters study, or they will using some of the studies you already have done as a reference or basis for potential approval?

Yes, the combination of both. We've done some booster studies already. And there's additional booster studies that we're planning. So both of these will be taken into consideration for full market authorization in Vietnam in early next year.

Okay, great. That's helpful. And one more question here is that, as you mentioned about the pharmaceutical company that was supporting subpart of the boosters studies. The question is, have you guys review any details? What this particular company would have? Should the drug get approved? In terms of their benefits or ownership?

No. While we haven't provided any details on the pharmaceutical company that's has provided that support. Other than that, we of course we highly respect them.

Okay, great. Thanks. Appreciate it. And congrats on the progress.

Yes, thank you.

Thank you. And next, we'll move on to Yigal Nochomovitz with Citigroup.

Hi, guys. Thanks a lot for taking the questions. I just want to dig in a little more onto the path to booster approval in the U.S. and Europe. So for these two smaller registrational trials that you've discussed today, can you just clarify what will be the primary vaccine theories? Could it be any of Pfizer Moderna or Novavax? Are you going to restrict it to some of those, or one of those? And then also regarding splitting into the two smaller trials versus the single trial with the 2,400? Was this based on some specific regulatory feedback? Or was this basically an internal decision that you guys took to increase the efficiency? Thank you.

Well, this is based on regulatory feedback and senior management, prioritization of efficiency, both time and cost. So it was everything all encompassing, but yes, it did involve specific regulatory feedback for sure. With respect to the comparator vaccine, there's a list of approved vaccines that we can utilize we've identified which comparator vaccine we're using, but we're not disclosing that for comparative purposes.

Okay, but let the way the trial design is working, you're going to give the competitor vaccine to both arms and then the one of the arms will have your booster. The other arm, I assume will have nothing or some other booster is that the right way to conceptualize this?

No, we're just trying to do on a larger scale what we've already done on Phase 1, 2 scale. So there's going to be a group that's received an approved vaccine as a primary series either two or three shots. And then we're going to be providing a slot third/fourth shot, which we described as a booster. And then we'll be comparing that to a third or fourth shot of the similar vaccine.

Got you. Okay. And then Andy, is there any reason why you are not able to disclose this pharma company at this point that you -- that's helping you with the booster work? And will we learn the identity of that company at a future point or not?

Well, we hope so. But we have a nondisclosure agreement with them. So unfortunately, we won't be able to do that at that point in time.

Okay, and then one question about your early R&D. There's obviously been a lot of talk about another pathogen, the monkey pox. Are you guys doing any early discovery work on that front?

Yes, I think that's a good question for Pad. I want you to address our activities with respect to monkey pox.

Sure. I mean, just like any emerging potential pathogen, I think our preclinical team is always considering. But that's not an actual program currently. But that might change even in future.

Yes.

Got it. Okay. Thank you very much.

Thank you.

Thank you.

Thank you. We'll take our last question from Steve Seedhouse with Raymond James.

Hey, Steve.

Hey, hey, thanks for taking the question. Actually, I have a few. The first one respectfully, I think I have to ask this just we noticed a comment in the 10-Q, that the completion of the clinical trials in Vietnam and the review may be delayed substantially because of a recently exposed scandal involving COVID-19 test kits. So you referenced the reorganization of MOH. But obviously, the 10 key language is a bit more dubious. So I was hoping you could clarify that this is just about price gouging and what we can sort of find online or and that there's no impact to data integrity for instance, for our 154 or your ability to leverage those deal outside of Vietnam. And if you have any exposure whatsoever to what's happening within the agency?

Yes, thankfully, we haven't had any of that exposure. Yes, this is a -- this reorganization is on affiliated with Acrturus and our vaccine. This is something that's available in the public domain. And I feel free to look into that. But it doesn't have any overlap or exposure relation to Arcturus whatsoever.

Okay, and then can you just clarify that. Thanks for that comment. Could you just clarify that the remaining data, whether there are any, frankly, for an e-way in Vietnam, it sounds like the CMC issues were for full authorization. Just wanted to see if there's any data pending or if this is just a timing thing, given the MOH personnel issues?

I think it's an oversimplification to say it's just a timing thing. But that's how I'm going to address it. It is just a timing thing. Once their reorganization is complete, and we can go through the normal processes, they've already provided feedback on the clinical section in the data. So we feel comfort there. And their feedback on the CMC was more relative to the full market authorization. That's correct.

Okay. And then lastly, just given 021 is being suspended in the global entity previously mentioned decided not to proceed. Can you just comment on the level of competence that you'll get forgiveness of the $47 million Singapore loan? Or what needs to happen there?

Yeah, that's a good question. We're in the process of negotiating that as we speak. And we'll certainly have more detail for you shortly. But you are correct. It is a non-recourse loan. That is clearly and uniquely tied to 021. And so we will update the market with that information as soon as possible.

Okay, thank you.

Great. Thank you, Steve.

Thank you. And there are no further questions and I turn the conference back over to your presenters for any additional or closing remarks.

Well, that's it, everybody. Thank you. We'll stay in touch. Be sure to reach out if you have any further questions and bye for now.

And that does conclude today's teleconference. We do appreciate your participation. You may now disconnect.