Hello, and welcome, everyone, joining today's Arcturus Therapeutics Fourth Quarter and Fiscal Year 2025 Earnings Call. Please note this call is being recorded. And it is now my pleasure to turn the meeting over to Neda Safarzadeh, Vice President, Head of Investor Relations, Public Relations and Marketing. Please go ahead.

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 Dr. Alan Cohen, our Chief Medical Officer. Dr. Pad Shibkula, our CSO and COO, will join them for the Q&A session. Before we begin, I would like to remind everyone that the statements made during this call regarding matters that are not historical facts are forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the statement. Please see the forward-looking statement disclaimer on the company's press release issued earlier today as well as the Risk 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. I will begin today with an update on our ARCT-032 and ARCT-810 programs. These are the messenger RNA therapeutic candidates for cystic fibrosis and ornithine transcarbamylase deficiency, respectively. ARCT-032 Phase II trial is progressing with higher dose testing at 15 milligrams in 4 Class I CF adults, which showed no safety concerns. The upcoming multi-month study will enroll patients in the U.S. and internationally and is designed to evaluate safety as well as look for early signs of clinical benefit, including improvements in lung function and quality of life. We are well on track to initiate dosing for this Phase II 12-week study in the first half of this year and look forward to generating potentially meaningful clinical data for our CF program in 2026. ARCT-810 continues to advance toward pivotal development. We plan to study both adults with late-onset OTC deficiency and young children with the most severe forms. Type C regulatory meetings are scheduled during the first half of 2026 and are intended to provide clarity regarding our next steps in clinical development for our flagship rare liver disease program. I will now provide regulatory updates to our partnered COVID-19 vaccine program, also known as Costave, where in January 2026, the U.K. Medicines and Healthcare Products Regulatory Agency, or MHRA, granted approval for Costave, a self-amplifying mRNA COVID-19 vaccine for use in individuals aged 18 and older. Moving to ARCT-2304. This is our next-generation STAR vaccine candidate for pandemic A/H5N1 influenza. This program is contracted with and funded by BARDA. We completed a Phase I study in 212 young adults and 80 older adults. Recent 8-month follow-up data after the initial vaccination showed that all 3 dose levels, 1.5, 5, and 12 micrograms generated a durable immune response. The results also reinforce the STARR® sa-mRNA platform's ability to drive meaningful cell-mediated immunity. Across all tested doses, the vaccine was well tolerated with no safety concerns reported. The data further validates our STARRs mRNA platform. Also briefly, our lawsuit against AbbVie and Capstone Therapeutics filed on September 23, 2025, remains ongoing. With that, I'll now pass the call to Alan.

Thank you, Joe. It's certainly good to be here with all of you today. I'll begin with an update of our ARCT-032 program. This is our messenger RNA therapeutic candidate for cystic fibrosis or CF pulmonary disease. ARCT-032 utilizes Arcturus' LUNAR lipid-mediated aerosolized platform to deliver CFTR messenger RNA to the lungs. Expression of a functional copy of the CFTR mRNA in the lungs of people with CF has the potential to restore CFTR activity and mitigate the downstream effects responsible for the progressive lung disease and associated morbidity and mortality experienced by people with CF. We remain on track to initiate the dosing phase of our 12-week Phase II clinical study in the first half of 2026. We recently completed once-daily dosing of 15 milligrams of ARCT-032 over 28 days in the third dosing cohort. This cohort included 4 CF adults with Class I MEL mutations. Importantly, we observed no safety or tolerability concerns at this higher dose. Based on these encouraging data, the independent safety review committee permitted us to move forward with a Phase II study that will evaluate ARCT-032 over a 12-week period instead of just 4 weeks. We will include 2 functional pulmonary measures, spirometry as measured by percent predicted FEV1 as well as LCI or lung clearance index as measured by multiple breath washout. We will also include 2 quality of life measures, the CFQRR and the EQ5D5L, as well as serial high-resolution CT testing to examine changes in airway wall thickness, air trapping and mucus plugging scores. The 12-week study intends to enroll up to 20 participants with Class I CF mutations from clinical sites in the U.S. and abroad. The goal of this upcoming 12-week study is to establish a clearer picture of longer-term safety, 12 weeks versus 4 weeks, and begin to more comprehensively explore early signals of clinical efficacy, including how the CF participants feel and function. Now moving on to the ARCT-810 program. This is our messenger RNA therapeutic candidate for ornithine transcarbamylase or OTC deficiency. We look forward to aligning with regulators on our clinical development strategy for the OTC deficiency program. We are moving to broaden our development strategy to serve both adults and late onset disease and young children with the most severe forms of OTC deficiency. These are the patients who typically rely on liver transplantation for survival beyond early childhood. We continue active regulatory engagement to support pivotal trial designs across these 2 distinct populations. Our Type C regulatory meetings with the health authorities, along with their feedback, remain on track for the first half of 2026, and we expect these interactions to help clarify our clinical development strategy for both adult and pediatric indications. Currently, we are very pleased with the momentum across both the CF and OTC deficiency programs and look forward to updating you as we progress throughout the year. I'll now pass the call back to Joe.

Thanks, Alan. We indeed look forward to initiating enrollment in our 12-week CF study and gaining clarity and alignment with regulatory agencies for the next stages of development for ARCT-810. Now with respect to Arcturus' financial position, we issued a press release earlier today, which includes financial statements for the fourth quarter and fiscal year ending December 31, 2025, and provided a summary and analysis of year-over-year performance. Please also refer to our most recent Form 10-K for more details on financial performance. Year-over-year, annual and quarterly revenue decreased $70.3 million and $15.6 million, respectively. These declines were driven by reductions in revenue from our CSL collaboration, reflecting lower supply agreement activity and a reduced number of development-based milestone achievements as Costave was commercialized. Annual and quarterly research and development expenses also decreased year-over-year by $83.0 million and $19.3 million, respectively, which was primarily driven by lower manufacturing and clinical costs related to the LUNAR-COV19 program, reflecting the program's transition from a development program to the commercial phase. Additional decreases relate to lower manufacturing for our LUNAR-CF and LUNAR-FLU programs as well as lower clinical costs for our LUNAR-OTC program as we wrap up clinical activities. Clinical costs for Phase II of our LUNAR-CF program partially offset these reductions as we remain focused on this clinical study. General and administrative expenses decreased annually year-over-year by $6.7 million due to reduced expenses for payroll and benefits as well as share-based compensation. Quarterly general and administrative expenses increased year-over-year by $1.6 million due to an acceleration of employee stock options. Overall, we expect general and administrative expenses to continue to decrease during the next 12 months, driven by lower share-based compensation expense. Cash, cash equivalents, and restricted cash were $232.8 million as of December 31, 2025, and $293.9 million on December 31, 2024. Through disciplined execution and a strategic refocus on existing rare disease clinical programs in fiscal year 2025, Arcturus has extended our cash runway into the second quarter of 2028. In summary, the company remains in a strong financial position and has the cash runway needed to achieve multiple near-term value-creating milestones for both therapeutic programs. With that, let's turn the time over to the operator for questions.

Our first question comes from Yasmeen Rahimi with Piper Sandler.

Would love to understand as you guys are going to be kicking off the 12-week Phase II study, I know you guys spend a lot of time thinking about optimization for the study from dose selection to baseline measurements to patient selection. So maybe help us walk us through some of the optimizations that were included versus the initial study that was conducted in the fall. That would be really helpful to go through. And then also, I know you work with the CF Foundation. Help us understand if you had a chance to work with them to warehouse a number of patients. So as soon as you kick off the study, you could enroll quickly the patients for it. And with that, I'll jump back into the queue.

Yes. Thanks, Yas. I appreciate the questions as always. With respect to how the 12-week study that we're initiating here soon is different from the 4-week study, we have Alan on the line. He'll highlight some of those differences so that the investors out there can understand.

Sure. No problem. Thanks, Joe. Great question. So first things first, one of the main fundamental differences between the study that we've done with dose ranging from Cohorts 1 through 3 is that Cohort 4 is really going to be designed somewhat differently with the intent on it being more reproducible and stable, particularly as it relates to spirometric measures. We're setting parameters. We will not be enrolling a CF patient until they're stable with respect to baseline lung function measures. And this should help us allow us to observe true clinical signals by enhancing the noise to signal ratio. In addition, we are going to be including lung clearance index using MVW, which does not have the variability issues that is sometimes seen in spirometry. That's why LCI has really been used and preferred in children because of its ability to be reproducible and not patient or performance-dependent. In addition, we're going to be looking over a 12-week period instead of just simply 4 weeks with the general thinking that the longer period of time will allow the drug that we're studying to manifest clinical benefits in the airway. Lastly, we are including not just LCI and using MVW and percent predicted FEV1 spirometry, but 2 additional quality of life measures, the CFQRR and the EQ5D5L. So 2 shots on goal for both pulmonary functions and quality of life in addition to the HRCT studies reproducibly that we have used in the past and shown early signals of success. Hopefully, that should be helpful to you.

Yes. We continue to strengthen our relationship with the CF Foundation. They are well aware of the modulator non-responders in their community, both in the U.S. and internationally. We collaborate closely with them, and the TDN allowed our study to proceed after reviewing the initial data from the first three cohorts for this fourth cohort in the 12-week study. They are actively involved and engaged.

We'll move next to Pete Stavropoulos with Cantor Fitzgerald.

Nice to see the progress. So you mentioned LCI for CF. Can you talk a little bit about this test, sort of how sensitive is it? I think you mentioned it's not variable. Do you expect multiple readings at baseline? And importantly, does it correlate with other endpoints you plan to use? And is it reliable at all stages of disease, say, early versus late or equally sensitive? And if so, how will that impact your enrollment criteria for the Phase II?

No, it's a great question, Pete. LCI is definitely another lung function measurement that we're collecting in this 12-week study. It's definitely more sensitive. Alan, perhaps you can discuss the multiple readings and how well it correlates and how reliable it is.

Sure. Of course. And a great question. Thank you for asking about this. LCI, as I mentioned, doesn't have the subject variability issues of spirometry. Although as we all know, spirometry has been a more traditional endpoint measure for most pulmonary drugs that have been approved, both in the United States and abroad. And that's really why LCI historically in CF has been used in children who can't always perform spirometry reproducibly. It's a much more passive maneuver requiring just normal tidal breathing, so comfortable breathing in and out. As a result, it's a more reproducible measure for the most early and subtle changes in the smallest airways. So why we're focusing on LCI in addition to spirometry is not just its ability to be reproducible, but it also is measuring another component of the airway that we believe we can have more discernible benefit for earlier and in a smaller number of subjects. Spirometry measures can change slightly in these larger airways, but it does require a more active engagement to be sufficiently reproducible. That's why I was alluding earlier to the controls that we're putting into this study to make sure that a patient has reproducibility in screening and baseline before going into drug dosing so that we have a more accurate reproducible baseline with which to compare subsequent changes over the 12-week course of the study.

All right. And also just a question on the OTC program. As you're having your discussions with regulatory authorities about a registrational trial, how has their reception been for certain biomarkers and assays like ureogenesis function using the nitrogen 15 isotope or any other biomarkers they may be less familiar with? And what's sort of the base case outcome for a study design?

Well, those are all great questions, and that's currently where we are. We're actively engaged in preparing for these Type C meetings in the next few months. We're going to be in a much better position to answer those with granularity and specificity, but that's exactly what we're currently engaged with the FDA on—the future study approaches, the design, the size, the scope of the study, understanding what they would like to see before we can proceed further into the clinical development. So we'll have that regulatory clarity shortly. That's our intent. That's our aim. And they're all good questions, but we'll be in a better position to answer those in a few months.

Congrats on the quarter and progress.

We'll move next to Seamus Fernandez with Guggenheim Securities.

This is Seamus Fernandez. I have a few questions. I'm looking forward to the start of the 12-week CF study. I wanted to clarify that it seems dosing is moving forward with the 15 mg dose cohort. I'm curious what influenced the decision to proceed with the 15 mg dose instead of the 10 mg dose. Was there any evidence of a dose response related to lung function measures or CT scans? Additionally, regarding the planned enrollment for CF, you've mentioned both U.S. and international recruitment. I would like to know how you're planning to split the recruitment between the U.S. and international locations.

A couple of good questions. First of all, a point of clarification, just so it's not misunderstood. We have achieved safety and tolerability data for the 15-milligram level, but we're actually initiating our fourth cohort at the 10-milligram level. We were fortunate to see early efficacy, some early clinical signals in our smaller cohorts at 10 milligrams. So we're going to continue that and see if we can see improvements as we extend the study in larger numbers. With respect to the plan to enroll in the U.S. and we are enrolling internationally, including Europe and the Middle East.

Sure. Thank you, Joe, and a great question. So the plan right now, we've actually expanded our U.S. sites. So we have additional U.S. sites ready to go for the Cohort 4 study, which we will be initiating shortly and have added, as Joe mentioned, European as well as Middle Eastern sites. The intent there is to really go into parts of the world where there is a higher preponderance of null or type 1 CF genetic mutants so that there is a larger percentage within those populations, and it should yield a greater likelihood of identifying, engaging, and enrolling patients in a much more timely manner over the course of the calendar year.

Just one follow-up for me then, just between the 15 and 10 mg dose because you mentioned improvements at the 10 mg. Were there anything you can share in terms of the responder rate at the 15 mg relative to the 10? Did you see a response on FEV or CT scan there, I guess, in terms of similar benchmark how you presented the earlier data?

No. Yes, we've completed the dosing phase for the third cohort at 15 milligrams, and we've collected sufficient safety and tolerability data to share with the safety review committee to allow us to proceed into the 12-week study. With respect to the other data, that data collection process is ongoing, and that's where we are. But what was significant was to allow us to proceed into the fourth cohort.

We'll move next to Lili Nsongo with Leerink Partners.

So 2 questions for me. The first one on the CF program. So thinking about, again, moving on to the 12-week study, what was the rationale to stop at 15 milligrams given that you haven't seen any safety signal? And would there be enough design flexibility to potentially increase the dosing as you accumulate data? And then I have a follow-up question on the OTC program.

Yes, we definitely have the flexibility to increase dosing, and we're very happy that we already have the ability to increase to 15 milligrams, if necessary. But just to maybe reiterate that 10 milligrams showed early signs of working in the second cohort. So we're simply extending the duration of that treatment in a larger cohort. And we're now pleased that we have the flexibility to increase dosing to 15 milligrams if needed. It's unlikely that we will need to increase dosing even further, but we would have flexibility to do so if needed. We did dose up to 27 milligrams in our early trials in human volunteers. So there is some headroom there to expand further, but we feel confident in the dose that we've selected at 10 to start this fourth cohort.

Okay. Maybe just a follow-up. For the OTC program, do you expect a bifurcated regulatory path for both the pediatric and then the more adult patient population?

Yes. I think that's safe to assume that the younger children will be treated differently than the older stable adult population simply because the need is far more severe in younger children. It's a different population. But anything to add to that, Alan?

Yes. In many respects, our current position with the program is significant. It's important to recognize that there are survivors with an OTC deficiency who continue into adulthood, despite the medical complexities and their reduced need for a liver transplant. So far, we have demonstrated safety and tolerability, along with what we believe to be early indicators of efficacy. In our discussions with the FDA, we are focusing on a younger demographic where survival rates decline after preschool and school age. Our goal is to leverage the recent guidance from the FDA regarding ultra-rare populations facing severe outcomes, as well as their increased flexibility in conducting studies, provided that safety, tolerability, and efficacy standards are met. We remain optimistic about the initial discussions with the agency and will continue to advance these efforts for the benefit of the OTC deficiency community.

We'll move next to Yanan Zhu with Wells Fargo.

Maybe first on the CF program. I think you mentioned one effort in Cohort 4 is to obtain stable baseline. Remind us why that's important? How are you going to go about and do that? And also curious, during the 3-month trial period, could it be possible that patients had a stable baseline, but for some reason, their reading could begin to fluctuate or drift after having had that stable baseline within a 3-month period?

Thanks, Yanan. Yes, Cohort 4 is definitely different with respect to the first 3 cohorts, and that we've designed it with a stronger baseline. Alan, maybe you can comment further there.

Yes. So what we've done here, and it's a great question. As best as we can, one should realize that because of the complexity of the lung disease and the impact that it has in the various segments of the lung at any given time, what we're looking for at baseline with these adult patients with CF is at least enough reproducibility and as small a possible variability within the period of time that we screen to baseline to get them enrolled that we believe that we have as accurate representation of where they are at that moment in time as far as their lung disease is advancing and progressing. It's not unexpected in the course of a 3- or 6-month period that many of these patients may have an acute pulmonary exacerbation or an acute illness. And we're prepared to handle that. But what we wanted to try to mitigate and deal with was the variability that is seen not uncommonly in patients with COPD, cystic fibrosis, asthma, etc., particularly those who are vulnerable and chronically infected with pathogens. So we're really tightening up the enrollment criteria. We're setting parameters. And that's why we believe we're just looking to make sure that it's reproducible and stable at baseline. And we're not going to be enrolling CF patients that may be in the early throes of pulmonary exacerbation or an acute illness. And sometimes just even modest changes can be an early signal for that. We want to enhance the noise to signal ratio. And once again, one more thing to think about, unlike lung clearance index, spirometry really does require a consistent study subject performance. It's not a passive maneuver. So anything that we can do to make sure that a patient coming into our study has a representative baseline is really what we're trying to achieve here.

Great. That's super helpful. Two more questions, if I may. On the OTC deficiency regulatory interaction front, could you lay out for us to you and to the principal investigators, what would be considered an exciting outcome with regard to the alignment? And what—perhaps also what might be the base case scenario for the alignment? And lastly, I wanted to–wondering if you have any update on the COVID-19 vaccine initiatives between you and CSL.

Yes, I can take those questions, Yanan. So we're definitely working with the FDA to establish clarity, right? That's the main objective. So as investors are looking at what are we trying to achieve with these Type C meetings, it's clarity. We want a clear path forward to helping both the children in need with high unmet medical need, more severe disease and the stable adults, right? So we're presenting our case. We're presenting our data and basically looking to have clarity in the path forward. Anything to add there before I comment on CSL, Alan?

No. And obviously, in these patients, the goals and objectives for the children is quite different because of the severity and nature and lay vital nature of the disease in children as opposed to the much more stable adults. Even with current standards of care, the goals and objectives of a pediatric program would be to try to mitigate as best we can the damaging neurological and developmental issues that they contend with and deal with on a daily basis just by having OTC deficiency despite the fact that there are now therapies like ammonia binding agents and abilities to control diet. So success for us would be, as Joe said, a clear path forward with agreed endpoints and goals and objectives that are not only attainable but are also acceptable to the families and patients as well as the caregivers and their current standards of care. Yes, and the details of that, we'll be able to provide that granularity in a couple of months. But I appreciate the question. With respect to your CSL-related question in Costave, yes, we definitely made some progress for the Costave asset and for the platform in the United Kingdom. It was good to see that we advanced Costave to the point of approval and licensure in the United Kingdom. But the present administration here domestically has made it challenging to progress Costave to licensure or approval in the near term here in the U.S. So because of this and understandably, CSL and Arcturus are in active discussions regarding our collaboration, and we're going to be able to provide more color on that in the coming months.

We'll take our next question from Myles Minter with William Blair.

I understand you're deciding between the 10 mg and 15 mg doses for the 032 Phase II trial and are waiting for the efficacy data on the 15 mg. You already have the safety and tolerability information. I'm curious about the considerations for choosing a dose moving forward. If the efficacy data for the 15 mg comes in well, but you have more data for the 10 mg, will you choose one dose, or will you move both doses forward? I'm trying to grasp your reasoning behind this decision.

It’s quite simple that the 10 milligram dose showed early signs of effectiveness in the second group. We are now extending the treatment duration into a larger group and maintaining that duration. We also have the option to increase the dose if necessary. Some experts suggest that effectiveness can be achieved through simply extending the treatment period, and we aim to validate that. Since this is an open-label study, we can adjust the dose if we find it necessary. It’s important to note that manufacturing this product is quite expensive, so keeping costs manageable by maintaining the dose at around 10 milligrams is beneficial. Based on the data indicating progress with the 10 milligrams, we believe extending the duration and size of the study will help us determine its effectiveness in this new phase. We now have the ability to increase the dose if we think it’s needed.

We'll take our next question from Adam Walsh with ROTH Capital.

The first on 032, the CF product. You've talked about the first week in your clinical trials or 2 of being an onboarding phase where the drug is sort of getting through the congested airways. So in a 12-week study, you'd have roughly 10 productive weeks versus maybe 2 or 3 in the 28-day study. How should we think about that from an extra exposure time as it relates to FEV1 and mucus clearance versus what we maybe saw at 28 days?

Yes, Adam, that's a thoughtful question, and you're absolutely right. In our 28-day study, we observed a consistent 1- to 2-week onboarding phase. In reality, there is really only a 2-week healing phase in that 28-day study. As we move to the 12-week study, assuming a similar onboarding rate of 1 to 2 weeks, we will have 10 full weeks of potential healing and efficacy readings. This reflects a difference between 2 and 10 weeks, which is a significant improvement. Overall, we're extending the study from 4 weeks to 12 weeks, marking a threefold difference, which is also notable. Your observation is valid, and we agree that this not only triples the study duration but also enhances the potential for healing and efficacy in the 12-week study.

And then if I could, one on 810 for OTC deficiency. Phase II patients fade on standard of care. So to my knowledge, we haven't seen whether patients can actually reduce scavengers or loosen dietary restrictions on 810. Is that something you plan to build into the pivotal? And how important do you think that kind of functional clinical data will be for the approval conversations versus the biomarker package alone?

That exact question is in the agenda of our Type C meetings this year. So for both the children with early onset and also with the stable adult population. So it's the right question. We'll be able to provide the answer to that question in more detail in a couple of months after our Type C meetings are completed, and we've received their feedback.

We'll take our next question from Whitney Ijem with Canaccord.

This is Angela on for Whitney. Maybe just a follow up on the CF program again. So I understand you're progressing with the 10 milligram for the 12-week study, but are you still looking at efficacy in the 15-milligram cohort? I guess like what efficacy endpoints are you looking at? And will you be sharing that data at some point either in a PR or at a medical conference? And then second part is, would it be possible that you would run another 12-week study using the 15 milligrams? Or when you talk about the optionality to dose up, with that part of the current 10-milligram study?

Yes, it's unlikely that we'll be sharing any more data from the first 3 cohorts. We are focused on the fourth cohort. This is almost like a Phase IIb type study where we believe that our best shot on goal here is in a 12-week duration end of '20 study, and that's where we're focusing on. So I think that's where the investors should also be focused on. But you've asked, are we collecting data for 15 milligrams? Absolutely. Is there a time and a place to share that data? Yes, very likely. But we remain focused on the 12-week study is the short answer to your question.

Got it. And then will you potentially do dosing up to 15 milligrams in the study? Or would that be a separate study?

Only if needed. It's an open-label study. We have the flexibility to do it based upon what's happened in the third cohort, which is great. And we still haven't collected all the data, of course, and that additional data could sway our minds either direction. But right now, we're initiating the fourth cohort at the 10-milligram dose level, and we have the flexibility now to increase it if needed.

And we'll take our next question from Yigal Nochomovitz with Citi.

This is Joohwan Kim on for Yigal. I kind of have a multipart question, but I believe in the Phase Ib, you had also assessed LCI. But can you remind us what you had seen previously on the LCI? And how should we be thinking about the level of improvement expected in the Phase IIb? And as you were headed into the dose-ranging Phase II, did the FDA get a chance to look at the LCI data by any chance?

Yes, you are correct that we examined LCI during the initial Phase I studies. The Phase I trials involved healthy adults, while the Phase Ib included participants with cystic fibrosis, and we confirmed that the safety and tolerability were adequate to move forward. LCI was assessed after either one or two administrations in the Phase Ib trials. I will defer to Alan regarding the specific data from Phase Ib. As for LCI as an endpoint, I'll also refer to Alan, as he can provide insights from the literature on the magnitude of changes in LCI that have led to approval in children previously.

Sure. No problem at all, and it's a great question. I wasn't around historically when the early experience with our study drug in those first few cohorts going from healthy to CF adults was ongoing, but I have had a chance to review the data. The challenge of it is, once again, it was small numbers of patients. In the way we're constructing things now, the plan is to benefit from that prior experience and perhaps do it in a more refined way. Right now, we also have the support of the CF Foundation, who is doing a natural history study. So being able to align with the CF Foundation and the Therapeutic Development Network on their prospective study in patients with no mutations and those who are unable to tolerate current modulators allows us to align a study in a way so that when that natural history study becomes available in the coming months and year, we can have access to that as a comparator group, which was something that was not available just a few years ago. The other piece about this, I think, is that there's increasingly a recognition of not only the sensitivity and the value of LCI measures in adults but an appreciation for what may be the range and magnitude of change one needs to see in order for there to be a significant meaningful change over time. So right now, I think we're doing the study in a manner that should optimize its utility and value, and we're also doing it in an alignment in a way that should be commensurate with current standards and practices, which was certainly done before, but just not done as robustly and as long term. I think in this case, just like with percent predicted FEV1 and spirometry, we will be benefiting from a cohort of upwards to 20 patients and an examination of data not just over a 4-week period but a 12-week period. So both of those elements in addition to having more normative data to compare to in this exact population should make interpretation and value of this data much greater than it was previously appreciated. Hopefully, that's helpful to you.

We'll move next to Tom Shrader with BTIG.

There have been a lot of questions. I assume you've been looking at a lot of pictures of mucus plugs with your data. Do you have a sense of what fraction of patients show a measurable difference? Is it very all over the place, all over the lung? And do you have any patients where it's possible to calculate that in 12 weeks, the mucus plug should be gone? Do you have that level of data? And I have a quick vaccine follow-up.

Well, we saw 4 out of 6 subjects in the second cohort, which was a 10-milligram cohort that showed a reduction of mucus plugs after just 28 days. So that was definitely encouraging. There was one subject that attributed the increase in mucus plugs to humidity and the sensitivity to humidity. Whether that's an outlier or whether that's simply a non-responder, we will learn as we collect more data, especially in this extended study that’s larger. But it seems that a majority of these subjects respond with a reduction in mucus plugs, and we feel that, that's important to mention, and that's an early sign of some clinical activity. With respect to your other question, maybe you could restate it, and we can turn that over.

You would have had some sense of rates of clearance. Do you have confidence that 12 weeks is enough? Or is that more just the next trial you're allowed to do?

That's the big question. Clearly, we saw something in 28 days. So there's reason to be confident that we'll see it in an extended study—a larger study. And it's not just a larger extended study, but we're looking at a better study, a study that's designed more tightly with respect to numbers and baseline steadiness. But anything to add? Alan?

Yes. Yes. So I was going to say the field of using high-resolution CT scanning as a complementary way of assessing the progression of disease has been used for some time. I think the technologies, particularly artificial intelligence and our ability to standardize the reads now is vastly different and in many ways, much better than it was as recently as just a few years ago. So I think the field is emerging. I would be – I just want to make sure that it's understood that the time constant and the damage that occurs in the lungs of people with cystic fibrosis is really quite patchy. What's remarkable is the very patchy nature, both in the upper and lower lobes, and you can have a completely bronchiectatic destroyed segment of lung right next to a completely normal appearing functional segment of a lung. So I believe that a drug that's administered by inhalation over long periods of time will eventually have the ability in large part to reach many, if not all, of the segments that we need to. But I have no delusion as to whether or not there will be a consistent almost vacuuming of the lungs and an ability to remove and diminish mucus plugging. The goal here is to, I think, the long term, it's the totality of what we're able to observe. And the plan is to be able to correlate those improvements with things like lung clearance index, which clearly have—as someone was alluding to in their question earlier—that's one of the measures that we believe since we've already shown improvements in high-resolution CT scan mucus plug burden, it wouldn't be surprising to see and observe changes in lung clearance index commensurate with that since those 2 measures actually go hand in hand. Hopefully, that's helpful to you.

Yes, very similar. And with respect to safety and tolerability, the safety and tolerability profile was similar to other vaccine technologies. We are a lower-dose technology to conventional mRNA. So what we've seen consistently is any dose-related toxicologies will be beneficial to the self-amplifying mRNA tech from Arcturus. But in general, it's simply—it's similar to other vaccine technologies from a safety and tolerability.

We'll move next to I-Eh Jen with Laidlaw & Company.

In terms of the CF next 12-week study and you're looking for more stable baseline, would that increase the time and the size for the screening for the study? And also what sort of—how long duration to define as a stable—more stable baseline before you—the patient will be eligible for the study? And then I have a follow-up.

Yes. We're definitely not enrolling a patient until they are stable with respect to the baseline lung function measures. The duration of that stability time, do you want to comment on that, Alan?

Yes. I mean there's—and this is a great question, and it's not a simple answer. The challenge with CF patients is that there's actively chronically something going on in any given day. And I think the biggest challenge in trying to identify and enroll patients into a study like ours, where you're looking for modest improvements over—in the case of our studies, first 3 cohorts over a 4-week period to now a much larger group of patients over now a 12-week period. We do want to make sure that we're not just identifying the right patients, but we're also patching them at a time in the course of their disease, where they're at least stable enough so that we can introduce our drug and begin the baseline assessment so that when we get to the end, we at least have a comparator that's stable, reasonable and discernible. So right now, it's possible based on the way we've constructed this study, and I've done this in other studies as well, where we may delay the enrollment of a patient by a few weeks or a month just simply because there seems to be something acute going on, whether they're getting acutely ill and we just happen to be catching it during the course of the baseline in the screening or they may be in the late stages of resolving their illness, and we're seeing enough of a difference between 2 measures over a relatively short period of time that it may just speak to the unstable nature of what's going on. We really just are looking to get the best patients at the best period of time so that we have an equivalent baseline with which to work from. And that's really the intention. And it may mean a few weeks or a month longer to enroll a given patient, but it shouldn't add much in terms of the time. I think it's really—the goal here is to really find the best patient at the best time. Hopefully, that helps you.

Absolutely. That's very helpful. Maybe just a quick one on the OTC. I know it's still early a little bit, but was the company intended at least the desire to potentially starting both the adult and pediatric trial relatively concurrently, or there's any priority one before the other?

I think the intent is always to get into the children with high unmet medical need as fast as possible. But we're going to adhere to the advice and feedback from the FDA from these Type C meetings. So we'll be able to answer that with more granularity in a few months.

Okay. Maybe the last question. Does CSL intended to launch Costave in the U.K.? Or did we know that?

I would refer to everyone on the call to see what they've said publicly at their recent investor calls and their filings. We don't anticipate anything soon out of the United Kingdom commercially from Costave, but I refer you to their statements that they're saying publicly. We'll see where we are with the CSL agreement and our discussions with them in the coming months.

And this does conclude the question-and-answer portion of today's program. I would now like to hand the call back to Joe Payne for any additional or closing remarks.

Thank you, operator. I'd just like to thank everyone for attending today's call. If we see you in the bank conference seasons ahead, we look forward to catching up with you there. Have a good afternoon, everybody.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.