Arcturus Therapeutics Holdings Inc. Q2 FY2020 Earnings Call

Greetings, and welcome to the Arcturus Therapeutics’ Second Quarter 2020 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we'll conduct a question-and-answer session. And as a reminder, this conference is being recorded, Monday, August 10, 2020. I'd now like to turn it over to Neda Safarzadeh, Head of Investor Relations, Public Relations and Marketing. Please go ahead.

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 Development 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 the IND application, the CTA approval, the strategy, future operations, the status of preclinical and clinical development programs, the planned initiation of clinical trials, the likelihood of success of the company’s coronavirus COVID-19 vaccine candidate or other product candidates 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 and 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 Factors in Arcturus’ Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on March 16, 2020 and in subsequent filings with or submission to 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.

Hey. Thank you, Neda. Good afternoon to all, and thank you for joining Arcturus quarterly call today, which today also happens to be Andy Sassine's birthday, our CFO. So, wow, what a quarter it has been. Arcturus has made tremendous corporate progress, highlighted by the advancement of two clinical programs: ARCT-021, which is our COVID-19 STARR mRNA vaccine candidate, and ARCT-810, our OTC deficiency program. The company has matured into a clinical stage company focused on the development of infectious disease vaccines and significant opportunities within liver and respiratory rare diseases. Our corporate progress is highlighted by the advancement of ARCT-021 and ARCT-810 into clinical studies. I'd like to provide an overview highlighting why we're so excited about each of these programs. I'll begin with ARCT-021, also known as LUNAR-COV19. Our COVID-19 vaccine utilizes Arcturus' self-transcribing and replicating mRNA technology, trademarked as STARR, and the STARR mRNA is delivered with Arcturus' lipid-mediated delivery system called LUNAR, which is also a registered trademark. By combining these two technologies, we're developing a potential vaccine product for this extraordinary pandemic with our partner Duke-NUS Medical School. Based on what we have seen in preclinical testing, this combination of technologies may provide an improved safety and efficacy profile in the clinic. This clinical candidate has the potential to be an effective and well-tolerated vaccine, characterized by a very low dose, and a potential single-shot administration. We may observe a lowered incidence of injection site reactions because of the anticipated low dose of ARCT-021. We may also observe improved efficacy and durability of the vaccine since we've seen robust humoral and cellular immune responses in our preclinical studies, particularly with CD8 T cell induction. ARCT-021 is supported by a strong preclinical package, demonstrating robust cell-mediated immune response, including CD8 T cells and a balanced Th1/Th2 response, following a single administration of ARCT-021. We have seen a strong antibody response, resulting in potent virus neutralization at a very low vaccine dose after just a single administration. Further, neutralizing antibody titers continue to increase out to 60 days after dosing. Our vaccine is beautifully simple, completely devoid of viruses—there are no viral vectors, no adjuvants, and no co-adjuvants. The Phase 1/2 study of ARCT-021, which we are conducting in up to 108 healthy volunteer adults in collaboration with Duke-NUS Medical School, has initiated screening, and we anticipate dosing of the first cohort imminently within the next few days. This study will evaluate the safety and immune response of the vaccine in both young and older adults. We continue to advance our COVID vaccine manufacturing activities. We successfully completed the technology transfer processes and are providing sufficient vaccine product to support our clinical studies. Our process has now proven and serves as a foundation to support larger manufacturing campaigns to come. With our manufacturing partners, Arcturus is now well positioned to manufacture millions of doses in 2020, and potentially hundreds of millions of doses annually thereafter. We recently signed a binding term sheet with the Israeli Ministry of Health to supply ARCT-021 and we are pleased with the progress we have made towards the definitive supply agreement, which is expected to be completed shortly. Israel is the second country, in addition to Singapore, to reserve supply of Arcturus' COVID-19 vaccine. Discussions with additional countries for stockpiling and supply agreements continue to progress. Now, moving on to ARCT-810. We continue to advance our Phase 1 ARCT-810 clinical study in healthy volunteers. ARCT-810 is being developed for ornithine transcarbamylase deficiency, a serious disease with limited treatment options. ARCT-810 utilizes Arcturus' LUNAR lipid-mediated delivery platform to deliver OTC messenger RNA to the liver. Expression of the ornithine transcarbamylase enzyme in the liver of patients with OTC deficiency is expected to restore normal urea cycle activity and potentially prevent neurological damage and the need for liver transplantation. I remind all on the call that ARCT-810 is supported by strong preclinical data and OTC deficiency murine models demonstrating that dosing of LUNAR-OTC results in robust ornithine transcarbamylase protein expression and activity, leading to improvements in neurogenesis, plasma ammonia, and increased survival. Our OTC program has now been in the clinic for two months, and no infusion-related reactions have been observed, nor have steroid pre-treatments been required. We are understandably excited about the progress being made for our flagship intravenously dosed mRNA therapeutic. Steve will provide more details about our clinical programs for both ARCT-021 and ARCT-810 later in this call. We've also recently initiated two new programs: LUNAR-flu and LUNAR-CV, targeting influenza and cardiovascular disease respectively. Influenza vaccines and familial hypercholesterolemia are significant commercial opportunities and we believe our technology is ideally suited to address each condition. Driving our R&D engine requires significant resources, and the company has been very successful in raising approximately $280 million in gross proceeds this year to enable us to advance our promising therapeutic programs, and Andy will provide more detail in a few minutes. In addition to the progress we have made in our R&D pipeline, we have strengthened our leadership team and appointed Lance Kurata as our Chief Legal Officer. Lance is a nationally recognized leader in corporate Life Sciences transactions. He joins us from Mintz, where he was a partner in the corporate group and a member of the Life Sciences Practice Group. Lance is recognized across the life sciences legal profession as a leading biotechnology-focused attorney with transactional and intellectual property expertise. I am pleased to welcome him to the company. We have also added Dr. Kelly Lindert, who has agreed to lead our vaccine franchise, including our COVID-19 and influenza vaccine programs. We're thrilled to have her join our team. We expect the remainder of the year to be a very exciting period for Arcturus. We look forward to obtaining initial clinical data from our two development stage programs, ARCT-021 and ARCT-810. I'll now pass the call to Steve to provide more detail on our ongoing clinical programs. Steve, on to you. You might be on mute.

Thanks, Joe. Yeah, I was on mute. I'll start with ARCT-021, our vaccine candidate for COVID-19. Remind you, ARCT-021, we selected a self-replicating mRNA that encodes the full-length unmodified spike protein. After a comprehensive evaluation of multiple candidates expressing different modifications and different domains of the spike protein in a preclinical screening process, as well as assessment of both conventional mRNA and self-replicating mRNA versions, our preclinical data has demonstrated both robust neutralizing antibody responses and cellular immune responses with a single administration at low doses. We have seen 100% seroconversion with a single low 2 microgram dose in our animal studies and robust CD8 and CD4 plus response with a Th1 helper response. These data have enabled accelerated discussions with the Singapore Health Sciences Authority, allowing us to move rapidly into clinical studies. The ongoing Phase 1/2 study is being conducted in close collaboration with Duke-NUS Medical School in Singapore, studying it into two parts. In Phase 1, escalating doses will be administered in a single injection to younger adults aged 21 to 55 years. Then there's a Phase 2 part in which selected doses will be tested in a larger number of younger adults, as well as older adults aged over 55. The study has commenced screening and we anticipate dosing of subjects to commence imminently. We are looking forward to obtaining initial clinical data in the Q4 timeframe, and with favorable data, we plan to rapidly transition to the initiation of late-stage clinical trials. I’m now transitioning to discuss the ARCT-810 program. Our ongoing Phase 1 study is being conducted in 30 healthy volunteers in New Zealand. In this study, we’re evaluating five dose levels of ARCT-810. We’ve completed dosing of the first three cohorts with no significant adverse events, no clinically significant changes in lab values, and no infusion-related reactions, despite the fact that most steroid-free motivation is being given. The fourth cohort will occur this week, and we expect to complete the study by year-end. The Phase 1b study, which is being conducted for OTC deficient patients at multiple sites in the U.S., is on track to start screening the first subjects in September. In this study, we plan to evaluate three dose levels, with the dose levels being therapeutically relevant based on our preclinical data. This study will evaluate multiple biomarkers and other exploratory endpoints, including ureagenesis, plasma OTC activity, plasma ammonia and orotic acid in the urine. Finally, for our Cystic Fibrosis program, we have promising data showing that our LUNAR delivery platform technology is able to effectively deliver messenger RNA to bronchial epithelial cells in rodent and non-human primate models. mRNA is effectively translated into CFTR protein that is expressed on the cell surface. We look forward to collecting development candidates later this year and to filing an IND in 2021. I’ll now pass the call on to Andy.

Thank you, Steve. And good afternoon everyone. I would like to thank our existing shareholders for their support and I would like to welcome all of our new institutional investors to this call. A number of new sophisticated biopharma investment funds have become new shareholders in Arcturus as part of our recent public offerings. On behalf of the management team and the Board, we are grateful for their investment and validation, which helped us raise approximately an additional $200 million last month. Without the support of our existing and new shareholders, we would not have been as successful with our raise. We have obtained a very strong and diversified shareholder base through our recent public offerings, including our April offering. Combined capital raises of approximately $280 million will provide essential resources to enable the company to advance this pipeline and continue driving shareholder value. The press release issued earlier today includes financial statements for the second quarter of fiscal year 2020, which I will briefly summarize. Arcturus’s primary source of revenue is currently from licensing and collaborative payments received from research and development arrangements with our pharmaceutical and biotech partners. For the second quarter of 2020, the company reported revenues of $2.3 million, compared with $10.2 million in the three months ended June 30, 2019. The primary reason for the decline in collaboration revenue relates to a $3.1 million decrease in reimbursement from CureVac associated with the OTC collaboration that ended in the second quarter of 2019. Additionally, in the 2019 quarter we recorded a one-time sub-license revenue of $3.1 million related to our synthetic genomic signature. Total operating expenses for the three months ended June 30, 2020 were $12.4 million, compared with $10.7 million for the same period of 2019. The current quarter operating expenses were partially offset by $3.8 million of funds earned under the Singapore vaccine contract and approximately $1 million in funds awarded by the CF Foundation. Our cash balance totaled $136.1 million as of June 30, 2020, compared to cash and cash equivalents of $71.4 million at December 31, 2019. Subsequent to the end of the quarter, the company added net proceeds of $186.3 million from our successful public offering at $53 per share. Our pro forma cash balance, including the subsequent raise, would have been $322.4 million. Based on our current pipeline, the company's current cash position is expected to be sufficient to support operations for more than two years. We continue to add highly regarded biotech institutional investors to a strong shareholder base from our recent public offering and we are comfortable with our current cash position. We believe the company has the resources needed to drive our pipeline forward to achieve several meaningful value creation milestones. I would like to provide an update on our manufacturing progress for the COVID-19 vaccine ARCT-021. We have previously discussed the importance we have placed on ensuring we have the manufacturing capacity to meet the anticipated demand for our vaccine. In May, we expanded our base by entering into a manufacturing partnership with Catalent, a leading producer of advanced biologic products. We have successfully completed the planned technology transfer to Catalent and plan 30-gram batch of drug substance. Our manufacturing activities have been proceeding to plan, and we continue to expect to have the capacity to produce millions of doses of ARCT-021 this year and hundreds of millions of doses annually thereafter. For more details, please refer to our 10-Q, which will be filed shortly. I'll now pass the call back to Joe.

Sure. Thanks, Andy. It has definitely been a remarkable period of progress for Arcturus. And before we proceed with Q&A, I think we got some feedback that during Steve's portion of the call, it was difficult for him to be heard. So we've been asked by a few investors if he could reread the script that he just went through. So if it's okay, Steve, if you can give it a second, hopefully the connection will be a little clearer this time. All right, Steve, and then we'll proceed with Q&A thereafter.

Okay. No problem. Thanks. Can you hear me better this time?

Yes. Great. Thank you.

Okay. Yes, I unplugged my headphones and put some different ones in, so apologies for just now. So I'll start again. Starting with the ARCT-021 program, our vaccine for COVID-19, with ARCT-021, we selected a self-replicating mRNA that encodes the full-length unmodified spike protein. After a comprehensive evaluation of multiple candidates expressing different modifications and different domains of the spike protein in a preclinical screening process, as well as an assessment of both conventional messenger RNA and self-replicating mRNA versions, our preclinical data has demonstrated both robust neutralizing antibody responses and the cellular immune response with a single administration at low doses. We've seen 100% seroconversion with a single low 2 microgram dose in our animal studies, and our robust CD8+ and CD4+ response for the Th1 biased T-helper response. These data have enabled accelerated discussions with the Singapore Health Sciences authority, allowing us to move rapidly into clinical studies. The ongoing Phase 1/2 study is being conducted in close collaboration with Duke-NUS Medical School in Singapore. The study includes two parts. In Phase 1, escalating doses will be administered as a single injection to younger adults aged 21 to 55 years old, and in the Phase 2 part, selected doses will be tested in a larger number of younger adults as well as in older adults aged over 55 years. The study has commenced screening and we anticipate dosing of subjects imminently. We are looking forward to obtaining initial clinical data in Q3 or early Q4. With favorable data, we plan to rapidly transition to the initiation of our late-stage clinical trials. I’ll now transition to discuss the ARCT-810 program. In the ongoing Phase 1 study, we're enrolling 30 healthy volunteers in New Zealand. In this study, we're evaluating five dose levels of ARCT-810. We have completed dosing of the first three cohorts with no significant adverse events, no clinically significant changes in lab values, and no infusion-related reactions, despite the fact that no steroid pre-medication is being given. Dosing of the fourth cohort will occur this week, and we expect to complete the study by year-end. The Phase 1b study, which is being conducted in 12 OTC-deficient patients at multiple sites in the U.S., is on track to start screening the first subject in September. In this study, we plan to evaluate three dose levels, with all dose levels predicted to be therapeutically relevant based upon our preclinical data. In the study, all subjects will remain on background therapy and dietitians will help guide the subject’s diet. The Phase 1b study will evaluate multiple biomarkers and other exploratory endpoints, including ureagenesis, plasma OTC activity, plasma ammonia, and orotic acid in the urine. Finally, turning to our cystic fibrosis program, we have promising data showing that our LUNAR delivery platform technology is able to effectively deliver messenger RNA to bronchial epithelial cells in rodent and non-human primate models, and that this messenger RNA is effectively translated into CFTR protein that is expressed on the cell surface. We look forward to selecting development candidates later this year and filing an IND in 2021. I’ll now pass the call on to Andy.

Well, it's fine to come back to me. This is Joe. Thanks Steve, and clearly we have exciting milestones ahead in clinical data readouts anticipated later this year. We look forward to continuing to provide you with updates on our progress. And operator, I think now is an appropriate time to open the call for questions.

The first question is from Seamus Fernandez from Guggenheim. Please go ahead.

Great. Thanks for taking the questions, and also thank you for repeating the script. Joe, I guess, for my perspective, if you could just help us understand a couple of things. Number one, I think the prospect of having a single dose is particularly attractive, and it would be helpful to just talk about how your construct could actually achieve that. And then separately, can you help us understand a little bit better—you said that timing will be imminent for dosing. Just hoping to get a little bit of a sense of some brackets around that—it's imminent this week? And then finally, can you give us a general sense of when we see the data, how many patients worth of data should we anticipate seeing— is that towards the end of the third quarter and the beginning or beginning of the fourth quarter, I think is what you guys said. So can you just clarify what you would hope to incorporate into a press release or announcement? And then I had one last question that I'll follow up with.

Sure. Hey, Seamus, thanks for joining the call and for the questions. With respect to the word imminent, I looked it up prior to the call today in the dictionary and it said very, very soon. What does very, very soon mean? I use the vernacular ‘in the next few days.’ So just stay tuned; it’s very soon. So it’s imminent by the true definition of the word with respect to dosing. With respect to timing of the data, what we're messaging is that data will be provided in Q4. You heard the language on the call today from Steve and the team that there may be some preliminary data in Q3, but the substantial data will be Q4. Regarding why this may be a potential first shot, I have Pad with me, but I'll begin to address that question. Our vaccine contains two technologies, a self-replicating mRNA technology and a delivery system called LUNAR. The self-replicating mRNA kinetics express the COVID-19 full-length spike protein over a period of two to three weeks, so that extended duration of expression has shown in our preclinical data that neutralizing antibodies continue to increase for 60 days. You just do not see that data in any other vaccine, especially with our internal experience with conventional messenger RNA vaccines. So that extended durability or duration of action may remove the requirement for a second shot because the kinetics continues to proceed. With respect to the delivery technology, how that delivery technology has been optimized for delivery to dendritic cells may play a role as well.

And just as a follow-up question. I know that you guys are just entering the safety study. Can you give us a little bit of a structure for the trial, the dose escalation, and then where your preclinical studies would predict enough expression to really drive a robust immune response? I know we are seeing very low levels in your preclinical studies, but just wanted to get a little bit of color on that regard regarding what you would characterize as or think is likely to be the effective dose?

Regarding the effective dose, I can comment that the initial dose will be a single microgram or 1 microgram dose to initiate the study, but I'll let Steve address the remainder of your question.

Thanks, Joe. Yes, I'll take that. Starting with a 1 microgram dose and then we're dose escalating from there. The highest dose testing is actually still lower than all of the other messenger RNA vaccines that they have chosen for their Phase 3 dose. So we're escalating within the low single and low double-digit microgram range, which are still very, very low doses. As previously stated on, I think the last earnings call, we're anticipating the therapeutic effects to be somewhere in the 1-to-10 microgram range. And that's a dose that we're hoping to take forward into subsequent clinical trials. But up until now, we've tested the dose range and seen responses in humans stand, and it's difficult to comment further than that. Does that answer your question?

Perfect. Thank you. Yeah. No, that's great. I'll jump back in the queue. Thanks.

Thanks, Seamus.

The next question is from the line of Madhu Kumar with Baird and Company. Please go ahead.

Hey, everyone. Thanks for taking our questions, starting out with ARCT-021. To what extent is a single dose robust versus the idea of doing a prime plus booster, but having a better safety profile than the existing messenger RNA vaccines? Like, how do you think about those two possibilities and the kind of likelihood of one versus another and the potential for your vaccine for one person versus another?

Well, it’s important to realize that both scenarios could happen, right? But based upon the preclinical data that we've collected, the likelihood of each of them is reasonable. What we've seen preclinically is that a single administration was sufficient; that’s what every single bit of data has suggested. But if for whatever reason, there are subpopulations that do not respond as expected or due to some sort of immune suppression in some sort of subpopulation, we want to have a plan to administer a shot plus booster for those individuals, whether it's the elderly or people with comorbidities, etc. So we are collecting single administration data and two-shot administration data in the clinic. Ultimately, which one are we focusing on? I think both would be fantastic scenarios. We'd be happy with either. But the single administration, at least we have to give that our best shot— no pun intended—because that would be very differentiating from all the other vaccines.

Okay. Joe, I don't believe that—I believe the pun was intended. But secondly, based on the data sets we have out there, what do you think is a good, most antibody-like humoral clinical profile and T-cell clinical profiles for a single shot? Like, what is the profile you would need to see to be like yeah, this single shot works for us?

You're seeing, and I would fully expect additional vaccines as they enter the clinic that we're going to see a humoral antibody response— this is what you've been seeing to-date. What we're not seeing from vaccines in the clinic is a strong cellular immune response, especially regarding CD8 induction. Focusing on humoral immunity, how we're different there is—we've shown preclinically that our neutralizing antibody titers continue to increase over 60 days, that's different. Does that mean that we'll see the same thing in humans? We hope so, but we've got to prove that. Will we ultimately have higher neutralizing antibody titers than other vaccines out there? It sure could be, and we've got to prove that out as well. But what is even more differentiating is the robust T-cell response—the CD8 response that we saw in our preclinical animal models and studies because that is something we haven't seen to-date with other vaccines. If we see that, that means that a higher percentage of people will respond to these vaccines, so our efficacy rates go up, and it will also mean that the durability of the vaccine or the duration of protection will extend as well. That will be very interesting to learn as early as we can in this early clinical trial is that CD8 induction data, in addition to the growing and increasing neutralizing antibody data or the humoral immune response.

Okay, great. And then a question for Steve. So thinking of the OTC program, you haven't seen any infusion site reactions, and you haven't seen any need for steroids so far in healthy volunteers. Is there any reason to think that patients with OTC deficiency or the urea cycle disorders could have a different profile in terms of infusion reactions that would require steroid regimen therapy upon treatment?

That's a great question. There’s no reason at all to believe that the patient population is going to react in a different way from the point of view of their immune system or to the infusion. We're confident that the data we're seeing and healthy volunteers in terms of the safety and tolerability of the drug will translate directly to the patient population.

Okay. And then from the healthy volunteer study, what kind of pharmacokinetic or pharmacodynamic assessments are being done? You mentioned in the patient study that you're looking at urea cycle and all that kind of stuff. What is being done in the healthy volunteer study? Is there any data from that that could be interesting to help give people a sense of how ARCT-810 is working ahead of data from the Phase 1b and OTC patients?

Yes. In the healthy volunteer population, obviously, all the factors relating to the urea cycle are normal, so several of the biomarkers such as urinary orotic acid etc. and ammonia levels just aren't applicable; they're tightly regulated and in a normal cycle. We are looking at ureagenesis. It would be great if we did see something moving that would be incredibly informative—and we're hopeful that we do see something move. But in our animal studies, what we found was that the biomarker data improved with successive dosing over four to five doses administered. Even if we don't see anything in the healthy volunteer study, that doesn't ring any alarm bells or anything. Similarly, in patient populations, we're going to expect biomarkers in the multiple dose study to move more substantially than in a single dose study. So it’s quite possible that in single dose studies, we just don’t see enough of a bump to achieve statistical significance on the biomarkers.

But there's no like pharmacokinetic readout that you think would be meaningful from the healthy volunteer study in terms of just how good exposure you're getting kind of over time?

So, we do have pharmacokinetic readouts from a healthy volunteer phase study in both plasma and urine while testing pharmacokinetics. I'm not sure whether anything in the pharmacokinetics is going to give us a really good idea of what the protein expression is like. We are trying to get a handle on that with some of the biomarkers. But that particular biomarker is one that we're working with our vendors to give it enough sensitivity to detect changes in a normal person. That's the critical constraint for the healthy volunteers; everything's normal, so trying to see changes in a tightly regulated system in a normal person is challenging. But as yet, we don't have the biomarker data back. That's taking a little bit longer than the safety data to come out. We'll have to provide you with an update on that during a later call, I think.

Okay, excellent. Thanks so much, everyone.

Thanks, Madhu.

The next question is from the line of Wangzhi Li with Ladenburg. Please go ahead.

Hi. Thanks for taking my question, and I think happy birthday to Andy. My first question is about the COVID-19 vaccine, ARCT-021. I think it's another new name. Whether the data I think that you expect is in Q4 this year, just to clarify, should we expect the dose escalation data or will that also include dose expansion data?

Hey, Wangzhi. Yes, there is definitely a dose escalation phase in this Phase 1/2 study that will then transition to a dose expansion phase, and we encourage everyone on the call to look at ClinicalTrials.gov as we update periodically. To clarify your question about data, we're messaging that Q4, in general, for a substantial data set to be shared. But of course, there's always a scenario where the early doses are exceptional and of material value, and we'd need to share those earlier. For conservative messaging, Q4 is what we expect for sharing the data package.

Got it. And the follow-up on that is, when you compare both the single dose and versus a double dose, is it for the beginning as a dose escalation or is it more at the dose expansion cohort?

The dose escalation is entirely a single dose. As we move into the Phase 2 part of the study, that's where we will evaluate some two-dose cohorts as well. We’re planning to not repeat all of the same doses in the Phase 2 part as it wouldn’t be economical in terms of time or subject numbers and a better plan is to escalate a few doses into the expansion cohort to evaluate those in a greater number of subjects and in more detail.

Got it. Helpful. Now there are high levels in Singapore because you mentioned the trial is in Singapore, and Singapore is a pivotal trial. Where are you going to conduct them? Is it just Singapore or will it include other countries? What's the regulatory path requirement for you to get approval in other countries, for example, Israel or additional countries, if you do a few other trials in those countries?

In terms of regulatory pathways, we are consulting with the Health Sciences Authority. It has been wonderfully collaborative and has granted us considerable flexibility, much more than what you would see normally. For late-stage development, our Phase 3 clinical trial will be conducted in multiple different geographies and jurisdictions, which will primarily be selected closer to the time we initiate because it requires using countries and areas where there's a substantial presence of COVID-19 to enroll the study quickly and achieve the required number of events for prompt registration.

Yeah, that's very helpful. Thank you. And then, maybe lastly on the ARCT-810 – OTC program. Just curious about the pharmacokinetics you mentioned earlier. What exactly do you look at for the pharmacokinetics—the components of the lipid or messenger RNA cells in the blood? What do you look at for the pharmacokinetics?

For the OTC program, we measure both the ionizable lipid that’s part of the nanoparticle and we also measure messenger RNA in urine, although it’s not really possible to measure the messenger RNA in urine, so we’re measuring the lipid.

Got it. And my last question is with the OTC program. When do you expect to start repeat dosing?

That's going to be sometime next year; we would anticipate just because we need to collect the results from the healthy volunteer study, select some doses, and then go to the regulators with the clinical trial protocol.

Got it. Thanks for taking my questions.

And as a reminder, there are only about 10 minutes left for the conference today. The next question is from Steve Seedhouse from Raymond James. Please go ahead.

Hi, this is Ryan Deschner on for Steve.

Hi, Ryan.

My question is about the self-replicating RNA. Is there a higher hurdle from a regulatory standpoint, safety database size or length, relative to conventional RNA? Also, would you benchmark neutralizing data to a complex sera panel in the Phase 1 studies in Singapore?

A good question, I'll answer the first part. The self-replicating messenger RNA concept has been known since the 1990s. Some of the older generations of this technology has been evaluated in the clinic, so agencies that we've talked with are familiar with self-replicating mRNA—ours is just an improved or next generation. With respect to the second component of your question, Steve maybe you can address that.

Yes, as we have published studies, we would intend to do the same thing so that our dataset is interpretable alongside others. Yes, that is our intention.

Okay. Thank you very much, and then one last question. I wanted to take on the safety event thing across these Phase 1 mRNA studies in terms of fever, which wasn’t seen in no protein-based vaccine. In addition, in biotech sort of better safety for their second vaccine candidate going into Phase 3, do you think it's possible to modulate mRNA-based vaccines to reduce safety events? And how would you love doing this?

I can initially respond to that question with respect to expectations around safety. We believe that a substantially improved safety profile will be related directly to the amount of RNA and the amount of lipids that are injected; in other words, the dose level. Because the self-replicating mRNA technology combined with LUNAR has shown to be efficacious at very low doses. If we can repeat that in human clinical trials, then the dose level would be much lower, which means the lipid burden and the RNA burden would be lower, and undesired immune responses would be far less likely because the dose is much less. Additionally, our vaccine is devoid of adjuvants and devoid of viruses and viral vectors as well. So, we have much less to be concerned about with respect to tracking over long periods of time in a clinical trial.

Thank you very much.

Okay. Thanks, Ryan.

The next question is from line of Mayank Mamtani with B. Riley Securities. Please go ahead.

Good afternoon, Joe and team. This is Justin Zelin on for Mayank. Congrats on all the progress here, and thanks for taking the questions. I had two quick questions on ARCT-021. First, could you speak to publication plans for any preclinical data on ARCT-021's potential to generate sterilizing immunity or reduced viral transmission? And secondly, could you provide any color on the Israeli Ministry of Health agreement in terms of the range of doses supplied and what the implications are for discussions with other ex-U.S. countries? Thanks.

With respect to our cadence of data sharing and how we're going to share that data, we can look to what other companies have done with their vaccines. We may share data in the form of a press release initially and then subsequent to that in a peer-reviewed press release as we are collecting additional preclinical data in parallel with our human trials here in Singapore. We intend to share this data in a cadence similar to what you've seen other companies do. Regarding the Israeli Ministry of Health, we have had a great experience with them. After we signed the binding term sheet, they held a press conference clearly communicating to their citizens that the Arcturus deal is significant and a key part of their vaccination strategy that could potentially address a large portion of their population. We view it as a significant deal that it can have considerable potential.

That's great, Joe. I appreciate the color here and congrats once again on the progress. Thanks very much.

Thanks.

We're out of time for today. I'll turn it over to Joe Payne for any closing comments.

Hey, just thanks everyone for listening. At this point, we're going to close the call. Feel free to reach out as always if you have any follow-up questions, and we will respond efficiently. Bye for now.

That does conclude the conference call for today. We thank you for your participation, and you can now disconnect your lines.