Arcturus Therapeutics Holdings Inc. Q2 FY2024 Earnings Call

Greetings and welcome to Arcturus Therapeutics' Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Neda Safarzadeh, Vice President, Head of Investor Relations, Public Relations and Marketing. Thank you, Neda. You may begin.

Thank you, operator. Good afternoon and welcome to Arcturus Therapeutics quarterly financial update and pipeline progress call. Today's call will be led by Joe Payne, our President and CEO; and Andy Sassine, our CFO. Dr. Pad Chivukula, our CSO and COO, will join them for the Q&A session. Before we begin, I would like to remind everyone that the statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievements to differ materially from those expressed or implied by the 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 most recent Form 10-K and in subsequent filings with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made. Arcturus specifically disclaims any obligation to update such statements. And with that, I will now turn the call over to Joe.

Thank you, Neda. It's good to be with you again, everybody. We look forward to providing our updates today on our quarterly investor call. I will begin my remarks with an update on progress with our vaccine franchise led by Kostaive, our self-amplifying mRNA COVID-19 vaccine. We're happy to report that we remain on track for the Kostaive Q4 commercial launch in Japan. Our manufacturing team is working diligently to deliver commercial batches of Kostaive this quarter. On the regulatory front, our partner Meiji has submitted a partial change application to Japan's PMDA to support the use of the updated Kostaive JN.1 COVID-19 vaccine for the upcoming 2024 and 2025 season. The European Medicine Agency, or EMA, continues to review the Kostaive Marketing Authorization application or MAA. The review is ongoing as planned. In May, we published pivotal Phase 3 efficacy immunogenicity and safety data for Kostaive in Nature Communications. The results demonstrate that the two-dose primary vaccination at the 5 microgram dose level of Kostaive, which is our self-amplifying mRNA vaccine, was well tolerated and immunogenic and provided significant protection against COVID-19 disease. The efficacy of Kostaive against severe COVID-19 was 100% in healthy persons aged 18 to 59, and more than 90% in persons at risk of severe consequences of the disease due to comorbidities or older age. We continue to build a meaningful dataset for our proprietary STARR self-amplifying mRNA platform as a durable and more persistent vaccine technology. The 12-month persistence results from the Kostaive Phase 3 study will be disclosed in September at the 12th OPTIONS Conference in Brisbane, Australia. Bivalent Kostaive, also known as ARCT-2301, continues to demonstrate a broader and more durable immune response compared to the bivalent version of COMIRNATY. The six-month antibody persistence results from the ongoing Bivalent Kostaive Phase 3 study will also be presented at the upcoming OPTIONS Congress. The enrollment for the Phase 3 study of ARCT-2303 is now complete, with interim data available later this year. ARCT-2303 is the XBB.1.5 variant version of Kostaive that's being evaluated in multiple ethnicities in the southern hemisphere. The data from this Phase 3 study is intended to support regulatory filings globally for Kostaive and future products utilizing the STARR self-amplifying mRNA platform. Moving on to the ARCT-2138 program, this is our quadrivalent seasonal influenza program. The participants recruited for this Phase 1 study in both healthy young and older adults received one of four dose levels of the study vaccine or a licensed influenza vaccine. In addition to the flu-specific data, this study will help us learn more about the scope of the self-amplifying mRNA platform, and more specifically, how high of a dose is reasonably tolerated and how low of a dose is suitably immunogenic. This past quarter, there has been elevated concern regarding the highly pathogenic avian influenza, also known as H5N1 bird flu. The World Health Organization has reported for H5N1 bird flu a case fatality rate, or CFR, of 52% as of July 22, 2024. They referred to 889 cases of H5N1 and 463 deaths. Many of the human cases reported in the US have been confirmed as H5N1. Arcturus is on track to start a Phase 1 H5N1 pandemic flu study with support from BARDA in Q4. This vaccine, named ARCT-2304, utilizes our proprietary STARR self-amplifying mRNA and LUNAR delivery platform technologies. The study is to be conducted in the United States and is designed to enroll approximately 200 healthy adults. Now shifting attention to our mRNA therapeutics franchise, let's begin with an update on ARCT-032. ARCT-032 is an inhaled messenger RNA therapeutic candidate for cystic fibrosis formulated with Arcturus' LUNAR delivery technology, and we're pleased to report that we recently submitted an IND application for a Phase 2 multiple ascending dose study to evaluate the safety, tolerability, and efficacy of ARCT-032 in CF patients. I'd like to take a moment to commend our team for working diligently to get this IND submission completed in a timely manner. The IND application for the Phase 2 study is supported by safety and tolerability data collected in a Phase 1 study in 32 healthy volunteers and the two administration Phase 1b study in seven subjects with CF. No serious adverse events have been observed in any clinical trial participants to date. No febrile reactions have been observed within the target dose range of the planned Phase 2 study. The Phase 2 study intends to recruit CF patients who are ineligible for modulator treatment and additional CF subjects who are eligible but are not prescribed modulators. The CF foundation patient registry estimates approximately 8% of CF patients are ineligible for modulator therapy and an additional 10% of the CF population are eligible but are not prescribed modulators. Further details pertaining to the design of this Phase 2 CF study will be provided at an appropriate time later this year. I'll now move on to the ARCT-810 program. This is our messenger RNA therapeutic candidate for ornithine transcarbamylase or OTC deficiency. In July, the Company announced that the double-blind ARCT-810 Phase 2 study in the EU and the United Kingdom completed enrollment of eight participants, including adults and adolescents at the 0.3 milligram per kilogram dose level. We're pleased to report that the dosing phase of this first Phase 2 European cohort of eight is near completion, with interim data to be available in the fourth quarter. The Company is expanding the Phase 2 clinical program of ARCT-810 by enrolling OTC deficiency patients in the United States with more serious disease and to recruit younger patients. Patient screening has been initiated, and the company expects the remainder of the Phase 2 clinical program to be completed here in the US. The ARCT-810 US Phase 2 study has an open-label multiple ascending dose design. It's a study to evaluate the pharmacodynamics and safety of ARCT-810 in adult and adolescent participants with OTC deficiency and includes the option to recruit younger patients. Each participant will receive five doses administered intravenously every two weeks at doses ranging from 0.3 milligrams to 0.7 milligrams per kilogram. The pharmacodynamic or biological effect of ARCT-810 will be assessed by measuring multiple biomarkers that indicate a potential improvement in the activity of the urea cycle. Now before passing the mic to Andy, I'd like to take a moment to recognize the recent appointment of Dr. Moncef Slaoui to our Board of Directors. He was previously the Chief Scientific Advisor for Operation Warp Speed. He advised the US President's Council of Advisors on Science and Technology, was a member of the advisory committee to the Director of the NIH. He built a very respectable career in pharma, leading GSK's global R&D in vaccines, therapeutics, and oncology, which makes him an excellent fit to help Arcturus. We are already implementing his strategic expertise in our product innovation, development, and commercialization strategies. We're fortunate to have him join the Arcturus team as a member of our board. With that, I'll now pass the call to Andy.

Thank you, Joe, and good afternoon, everyone. The press release issued earlier today includes financial statements for the second quarter of 2024 and provides a summary and analysis of year-over-year and sequential financial performance. Please also reference our most recent Form 10-Q for more details on the financial performance. We are very pleased with the progress of Kostaive, our first COVID-19 vaccine, has made in Japan. We believe that this product could represent an improved vaccine option for the Japanese population as well as an important source of revenues for our company. I will now provide a summary of our financial results for the second quarter of 2024. For the three months ended June 30, 2024, we reported revenue of $49.9 million, a significant increase of $39.4 million from the $10.5 million reported in the same period in 2023. The increase was primarily due to the CSL agreement during the second quarter of 2024. This increase in CSL revenue recognized was driven by the recognition of COVID vaccine manufacturing activities and higher milestone achievements compared to the previous year's quarter. Additionally, revenue related to the BARDA agreement increased due to progress in the pandemic flu program. Total operating expenses for the three months ended June 30, 2024, were $71 million compared to $65.9 million for the three months ended June 30, 2023. Total operating expenses for the six months ended June 30, 2024, was $139.4 million compared with $131.4 million for the six months ended June 30, 2023. Research and development expenses were $58.7 million for the three months ended June 30, 2024, compared to $52.7 million for the three months ended June 30, 2023. The increases in research and development expenses were primarily driven by higher clinical-related expenses and manufacturing expenses across all programs in our pipeline. Additionally, investments increased in early-stage and discovery technologies, including the initiation of preclinical research related to Lyme disease and gonorrhea vaccine programs. For the three months ended June 30, 2024, Arcturus reported a net loss of approximately $17.2 million or $0.64 per diluted share compared with a net loss of $52.6 million or $1.98 per diluted share in the three months ended June 30, 2023. Cash, cash equivalents, and restricted cash were $317.2 million as of June 30, 2024, and $348.9 million on December 31, 2023. Arcturus achieved a total of approximately $437.1 million in upfront payments and milestones from CSL as of June 30, 2024. We continue to expect to receive future milestone payments from CSL supporting the ongoing development of the COVID and flu programs and three additional vaccine programs by CSL. I am happy to report the expected cash runway extends through the first quarter of fiscal year 2027 based on the current pipeline and programs. In summary, we believe that the Company remains in a strong financial position and has the resources needed to achieve multiple near-term value-creating milestones for the vaccine and therapeutic programs. Furthermore, with the anticipated launch of Kostaive later this year in Japan, we look forward to beginning to report potential commercial milestones and revenues. I'll now pass the call back to Joe.

Thanks, Andy. We've continued to make excellent progress on our mRNA vaccines and therapeutics pipeline. We are excited about our upcoming launch for Kostaive in Japan, and we are pleased that the aggregate safety data for our mRNA therapeutics platform supports the continued clinical development of both our flagship rare disease therapeutic programs. I will now turn the call to the operator for Q&A.

Our first question comes from the line of Whitney Ijem with Canaccord Genuity. Please proceed with your question.

Hi, this is Joohwan on for Whitney. Congrats on the positive progress this quarter. Maybe just a few questions here. I know you said you would provide the full details on the trial later this year, but is there anything else you can tell us about the CF Phase 2 study? Like how long will the study last or what endpoints do you plan to assess other than FEV1? And then maybe just a quick one on the Phase 1b study. Have you dosed the seventh patient yet? And are there still plans to provide an update on the last three patients later this year?

Hey, thanks, Joohwan. Yeah, both questions pertain to the CF trial. First is on the Phase 2 trial. I think we mentioned that further details pertaining to the design of the Phase 2 CF study will be provided at an appropriate time later this year. We did share in today's call that we intend to recruit CF patients who are ineligible for modulator treatment, and that includes Class 1 patients and also the additional CF subjects who are potentially eligible, but they're not prescribed modulators for a variety of reasons. So that helps people understand the focus and the type of patients we're recruiting, which is the most unmet medical need. With respect to specific dose levels, we've just said that there have been no febrile reactions observed within the target dose range of our planned Phase 2 study based on what we saw in Phase 1 and Phase 1b, so we're not disclosing that at this time, but there will be an appropriate moment to share more details pertaining to the design with respect to dosing and how long each cohort will be receiving doses, et cetera. With respect to the Phase 1b, the dosing has successfully completed. No serious adverse events were observed in any of the clinical participants to date. No febrile reactions again were observed within the target dose range of our planned Phase 2 study. The LCI or the lung clearance index was collected, and while it may be encouraging, it's not a validated assay in adults. So our focus now going forward is just simply on the Phase 2 study, which is going to come fairly quickly now that we filed an IND. So that's where we'll likely be able to collect some very meaningful and statistically significant data.

Great. Thank you.

Thank you. Our next question comes from the line of Yasmeen Rahimi with Piper Sandler. Please proceed with your question.

Good afternoon, team, and thank you for all the great updates. I have a few questions. Joe, you mentioned that the design of the CF study will be announced soon. Are we just waiting for IND clearance before you share the study design? For my second question, could you provide information on the duration of the study? I apologize if I missed that. Lastly, could you help us understand the timing for the COVID vaccine approval in Europe? We were expecting that in the third quarter. How should we consider the eligibility for any orders for 2024 and thoughts regarding 2025 in Europe?

Yeah, well, with respect to orders, I'll defer to Andy, but I can address your question on the COVID vaccine timing in Europe. CSL is going to be providing all commercial guidance in Europe and the US, so we defer to them with respect to guidance in Europe. Having said that, the review is active and ongoing as planned. And we're excited to get the first self-amplifying mRNA product approved in Europe as part of that process. But we defer guidance to CSL on that note. With respect to the design and duration of the Phase 2 trial, we first get approval to proceed as planned, and then we get the sites up and running, and we initiate recruitment of those folks that are ineligible for modulator therapy. And then sometime later this year will be appropriate to provide more details on the Phase 2 design. It may be after we get approval to proceed, assuming success, but we're not going to be sharing any more details on this call today.

Okay, thank you. I'll jump back in the queue.

Andy, you had a question regarding sales, correct? I just wanted to ensure I addressed your question.

No, unfortunately we don't provide guidance with respect to vaccine sales; that will be provided by Meiji and CSL. So please respect the fact that they have the rights to those two vaccines in the various jurisdictions, and they will provide guidance when it's appropriate.

Okay, thank you.

Thanks, Yasmeen.

Thank you. Our next question comes from the line of Evan Wang with Guggenheim Securities. Please proceed with your question.

Thank you for the question. First, regarding OTC, I am curious about what you would consider to be good data from the EU portion of the trial since it seems to be focusing on the 0.3 mcg per kg dose while you are using 0.7 mcg per kg in the US. Additionally, can you provide any updates on how recruitment or patient identification is progressing in the US study? Secondly, could you share any updates regarding the Japanese COVID vaccine market, particularly regarding expectations for shots administered and the potential benefits of having additional batches qualified? Thank you.

Okay. First, regarding the OTC question, we are certainly interested in gathering information on the safety and tolerability of up to six doses from the initial cohort in Europe. It would be encouraging to confirm that it is safe and well tolerated for up to six doses because this is essential for allowing us to access younger, more severely affected patients. Additionally, we aim to enhance our understanding of biomarkers, which is becoming increasingly important for the OTC program. Designing an efficient pivotal trial is critical, and that design will be closely linked with our biomarker strategy. We hope to begin understanding the biomarkers associated with this initial set of data. Now, concerning your second question about recruitment in the US, we have just initiated the Phase 2 expansion or additional Phase 2 trial in the US. That's all we can share at this moment. Later this year, during our quarterly calls, we will provide further updates on how recruitment is progressing. One of the main reasons we are concentrating on OTC in the US is to access younger and more severely ill patients. We look forward to recruiting those individuals, and updates on this will be provided in the next call. Regarding your third question about the Japanese market, could you please restate that for Andy?

Yeah, can you just remind us how you and your partners are thinking about the Japanese COVID vaccination opportunity? And anything you can share on, I guess, maybe timing of the vaccination campaign, pricing would be helpful. Thanks.

Well, with respect to timing and pricing, that's Andy, but go ahead. Yeah, Andy.

Sure. Thank you, Evan. We're pretty excited about the opportunity in Japan and working very closely with our partners Meiji and CSL. On June 11th, just a few months ago, Mr. Kobayashi, the CEO of the Meiji Seika Pharma operation, provided some guidance on how many vaccines they ordered from CSL, which was approximately 4 million doses. And they stated that the Japan market for COVID vaccine was about 20 million doses for the last year. So that hopefully gives you kind of a perspective of where it is. And then they hope to increase orders to about 10 million doses next fiscal year if everything is successful in the current fiscal year with respect to sales. They provided Kostaive pricing guidance about JPY10,000 per dose. Obviously, with the volatility in the Japanese yen, it's going to be a little bit challenging to try to figure out the dollar equivalent. But it is a very reasonable and attractive price for all three parties involved. So we're excited. We're going to be shipping the vaccine as we stated on previous calls to Meiji, probably starting at the beginning of Q4. Hopefully, that gives you the response you were looking for.

Thanks, guys.

Thanks, Evan.

Thank you. Our next question comes from the line of Myles Minter with William Blair. Please proceed with your question.

Hi, everyone. Thanks for taking the questions. The first one's just on OTC and its back-on enrollment. I know you're doing this at a single center in the US. I'm just very curious as to why you picked that single center to work with. And I'm wondering whether you do have a head start of at least some of the nine patients already been identified or whether you're going into this relatively blind and recruiting from scratch. That's the first one. And the second one, maybe for you, Andy, is just any update on the sale of the ARCALIS equity position in Japan? Because I know you've been working on that. Anything to update there? Thanks very much.

The site we are collaborating with is in Washington DC for OTC, and it has strong connections with the broader OTC community. While it operates as a single site, it is well linked with other sites across the United States. We will rely on their support to assist with recruitment. We are optimistic about our ability to continue recruiting in the US and reach younger, sicker patients. We look forward to sharing an update in our next call. Andy, do you have any updates regarding ARCALIS?

Sure, Myles. Thanks for the question. We don't really have an update on the strategic review engagement with J.P. Morgan Investment Bank at this point in time. The process is ongoing, and multiple parties are continuing to conduct due diligence in our data room. We will provide updates when appropriate, and hopefully that will answer your question.

Thank you. Our next question comes from the line of Yanan Zhu with Wells Fargo. Please proceed with your question.

Thank you for taking our questions. Regarding the cystic fibrosis study, could you discuss the characteristics of patients who are eligible for modulators but have not been prescribed them? Additionally, do you anticipate that this group will represent a significant portion of the study's enrollment? On the COVID vaccine, can you update us on the manufacturing progress for the 4 million doses ordered or expected to be ordered by Meiji? Finally, for the quadrivalent flu vaccine Phase 1 study, could you remind us of the timeline for results and what constitutes a successful outcome for this study? What is the benchmark for success compared to conventional flu vaccines? Thank you.

Thank you, Yanan. We are concentrating on modulator ineligibles, which generally refers to patients who lack any CFTR in their lungs, often classified as Class 1 subjects. This group makes up about 8% of the CF community. Additionally, there is another 10% of the CF community that may qualify for modulators but are not currently prescribed them, and there are numerous reasons for this. Detailing these reasons during a call would be challenging, but there is a considerable unmet medical need among these individuals, which means they may participate in this trial. To summarize, there are 8% of modulator ineligibles and 10% of the CF community who are not utilizing modulators for various reasons, making it roughly evenly split. We still need to determine if this will impact recruitment for the Phase 2 trial, so we cannot provide guidance on that at this time. Our focus is on addressing unmet medical need and collaborating with the CF foundation on this, particularly within these two groups for the initial Phase 2 trial. Regarding the manufacturing update, we are on schedule, and I will let Andy provide more details shortly. You also inquired about the flu study, and it’s encouraging to see an increasing number of successful mRNA flu vaccines with good efficacy numbers. However, traditional mRNA vaccines may face challenges regarding persistence and durability, which is where self-amplifying mRNA could offer a solution for a more durable vaccine. That said, we are still assessing commercial strategies for the flu shot. The question remains whether individuals prefer a longer-lasting flu shot or a lower-dose option that is less likely to cause side effects, and that’s a decision for CSL to make. We are positioned to offer both types of products to support those strategies. Regarding guidance, we have strict limitations about discussing their commercial strategy, but that’s where ongoing discussions are focused, presenting us an opportunity to contribute to the flu shot market. Andy, did you want to clarify whether Yanan was asking for an update on manufacturing for the 4 million doses?

Yeah. Any progress on the manufacturing of those 4 million doses? Thanks.

Sure. We do have some good news. ARCALIS has successfully completed two GMP batches and is currently in the process of completing the final batch. Upon completion, of course, ARCALIS and Meiji will petition the PMDA for approval of their manufacturing plant for commercial production. So, as we alluded to on the previous call, the first 4 million doses that were ordered by Meiji through CSL will be provided from our US and European CDMOs. And of course, once ARCALIS is qualified to deliver and produce commercial batches, that will give Meiji hopefully the opportunity to provide additional orders directly made in Japan. So, we're cautiously optimistic at this point in time, but we still await the completion of the third GMP batch, and we'll certainly update the market upon that progress. Hopefully, that answered your question.

Got it. Very helpful. Thank you.

You're welcome.

Thank you. Our next question comes from the line of Yigal Nochomovitz with Citigroup. Please proceed with your question.

Yeah, hi, thanks. Could you give a bit more color on how you plan to recognize the revenue for Kostaive? Is it going to be when it's ordered by CSL or when it's manufactured at ARCALIS or at the CDMO, as you referenced, Andy? Or is it only when it's actually shipped out to the Japanese government to the clinics?

Sure. Thanks for the question. We typically don't provide guidance with respect to sales and how we're going to record them. But I did on the previous call allude to the fact that we would qualify for a commercial milestone with the delivery of the vaccine to Japan in the first sale. So we'll certainly provide more color around that milestone when it is achieved and earned and reported in our financial results. And with respect to the opportunity to record revenue, that's really going to depend on Meiji successfully selling those doses in Japan. And so once they do sell them, they'll report the sales to CSL, and they'll determine the appropriate allocation for CSL, Arcturus, and Meiji with respect to the profit split. And then at that point in time, we'll be able to record the revenues when appropriate. So, we don't really have any color at this point in time. It's going to depend on Meiji's sell-through. But obviously, they're highly motivated and eager to get the process on the road. They're very successful and number one rated in flu vaccines in Japan. So we have the right commercial partner for this strategy. And certainly Meiji has been talking about the opportunity to recognize revenues and sales on their recent conference call, and so we're encouraged. And if appropriate, I think there's a few people from our team that would probably be delighted to fly over to Japan and get our own vaccine as well, if we can qualify. Hopefully, that answers your question.

Okay, thanks, Andy.

Thank you. Our next question comes from the line of Pete Stavropoulos with Cantor Fitzgerald. Please proceed with your question.

Hi, this is Samantha Schaeffer on the line for Pete. Thanks for taking our question. So the 032 data shows that the two doses were well tolerated with no major safety signals. Does this safety profile give you confidence to advance 032 into other indications with an inhaled formulation? And how are you thinking about next potential programs, such as other rare diseases or an inhaled vaccine? And final question, does your partner, CSL, have access to inhaled formulations for vaccine candidates, or do they solely focus on injection-based formulations? Thanks so much.

That's a good question, Samantha. Yes, the Phase 1 and Phase 1b data definitely provides us with a lot of confidence to continue growing and expanding the platform in lung indications. Traditionally, one of the biggest challenges in lung applications is toxicology. By navigating this with two administrations instead of just one, we feel more confident in our ability to grow the lung franchise. However, before we invest significant resources, it would be wise to wait for some short-term efficacy results from the Phase 2 trial. Overall, this does enhance our confidence in the platform. Regarding the use of inhaled mRNA therapeutics or vaccines, it is unlikely that we will apply that to the CSL collaboration, as it is limited to five targets and we have already validated intramuscular administration. Therefore, there are constraints on the number of targets and possibilities. So, it is very unlikely we will pursue an inhaled vaccine with CSL, but we certainly have the flexibility to do so independently at some point in the future.

Thanks so much.

Thank you. Our next question comes from the line of Ed Arce with H.C. Wainwright. Please proceed with your question.

Thank you for addressing my questions and congratulations on the progress. I believe some of my inquiries regarding Kostaive have been clarified. However, I would like to ask about the therapeutics portfolio, starting with 032. There has been much discussion around it, and while this may be a bit early, can you share any potential timeline for preliminary or interim data from that Phase 2? Regarding 810, I understand that the readout expected in the fourth quarter will be interim. Could you provide specifics on the data you anticipate? Additionally, what criteria would you consider as the benchmark for success in that readout as you move forward towards complete results? Thank you.

Sure. Regarding the 032 timeline, we are aiming to move forward as quickly as possible. This therapeutic is strategically crucial for Arcturus and has significant potential if we can establish proof of concept, not just for the asset but for the overall platform. We have not provided specific guidance on when the data will be available, as we need to secure approval to proceed, get the sites ready, and then gauge the recruitment pace. We will offer more detailed updates on the timeline during our quarterly calls. However, it’s important to note that this program is a strategic priority for Arcturus, and we are keen to advance it as quickly as we can. Concerning the 810 interim data, it represents the first complete cohort from Europe, which consists of eight individuals. While we touched on this in a prior question, I want to stress that achieving safety and tolerability for up to six administrations of injectable mRNA is a significant milestone. Completing this allows us to initiate regulatory discussions about younger children, particularly since many of these rare diseases affect pediatric populations. I believe this dataset is quite meaningful, regardless of how it is perceived on Wall Street, as it is essential for gaining access to sicker and younger patients. The biomarker strategy will play a crucial role in the OTC pivotal trial, making it more efficient. By leveraging biomarkers, we can make the trial shorter and faster if we approach it wisely. We are currently measuring various biomarkers within this cohort of eight from Europe, and our goal is to identify which ones to focus on that could effectively influence the design of a pivotal trial. That's what we aim to achieve. Thank you.

Great, thanks, Joe. Actually, following up on that, I meant to ask about those biomarkers, not sure if some or all of those are on clinical trials or not, but any take on what are the ones that you're particularly interested in that would be key to sort of moving forward from an efficacy perspective?

The challenge here is that ammonia is the simplest biomarker to measure. However, in patients with severe disease, they are all using ammonia scavengers, making it difficult to measure ammonia effectively. Therefore, it’s crucial for us to identify a biomarker in individuals who are on these scavengers. We are exploring other amino acids involved in the urea cycle, such as glutamate, and we are also examining OTC itself and the process of urea generation. Since this is a urea cycle disorder, the production of urea can be tracked and measured. We are focusing on ways to do this, and we want to enhance our understanding of these biomarkers. Additionally, we can analyze orotic acid in urine. We plan to collect a significant amount of data and aim to take a more targeted approach, especially as we expand into more severe and younger OTC patients in the US.

Thanks, Joe. That's very helpful.

Thanks.

Thank you. Our next question comes from the line of Yale Jen with Laidlaw & Company. Please proceed with your question.

Thank you for your questions. We have two here. Firstly, regarding the Omicron XBB.23.03 vaccine, you have finished enrollment. When should we expect a top-line readout? Additionally, what are the forthcoming steps for this vaccine? I understand there are intentions for US and global applications, but are there any specific actions you can share at this time?

Yeah, so the 23.03 study has completed enrollment, and the meaningful aspect of that study is the fact that our platform is gaining experience in multiple ethnicities. And this will support regulatory applications globally, not just the US. So that's the primary strategic role of that. So whether we share that data or not is uncertain. Again, this is a licensed program to CSL, and they'll ultimately be deciding what gets shared publicly. But that's the purpose of it, and it's completed, and that data will be coming in throughout the remainder of this year. But it is intended again to support regulatory conversations and regulatory filings and marketing authorization applications, etc., for not only Kostaive but subsequent products that utilize this platform. And then you said you had another question. Go ahead.

Yeah, I have one more question here, which is the Meiji has filed for changing the adjustment for the vaccine to the Japanese regulatory authority. Do we know any timeline or projected timeline in terms of the agency will approve that change to the JN.1 vaccine?

Yeah, the timeline for approval is suitable for us to launch and market this year. And it's in line with the other approved vaccines. So now that we have an approved platform, it's nice that we can piggyback those that are already approved, and they usually funnel all of these together through the same process of approval for the updated JN.1 variant, for example. So very similar timelines or even identical in some cases to the competitors in the space, but it's suitable for us to market it and launch it successfully this year.

Okay, great. Thanks, Joe, and congrats on the progress.

Thank you. There are no further questions at this time. I would like to turn the floor back over to Joe for closing comments.

Hey, thanks for participating in the call. And if there's any remaining questions, please don't hesitate to reach out to the team, and we'll get back to you right away. Thanks, everyone.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.