ARCT - NASDAQ

Greetings and welcome to the Arcturus Therapeutics Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] 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. You may proceed.

Thank you, operator. Good afternoon and welcome to Arcturus Therapeutics Third Quarter 2023 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. I'm going to begin my remarks with an update on progress regarding our monovalent COVID-19 vaccine, ARCT-154, following favorable clinical results from the Phase 3 pivotal studies, the new drug application is currently under review by Japan's Pharmaceuticals and Medical Devices Agency or the PMDA. The ARCT-154 Japan NDA submission is supported by an active-controlled Phase 3 booster vaccine study, which was conducted in Japan, and a placebo-controlled Phase 3 primary vaccination series efficacy and safety study, which was conducted in Vietnam. The ARCT-154 Phase 3 booster vaccine study achieved its pre-specified primary endpoint, demonstrating the non-inferiority of an immune response against the SARS-CoV-2 ancestral strain as compared to Comirnaty. In addition, the superiority of ARCT-154 in neutralizing antibody response against the SARS-CoV-2 Omicron BA.4/5 variant was also demonstrated as a key secondary endpoint. Updated preliminary Phase 3 booster data was recently presented at the 11th International mRNA Health Conference in Berlin. In a heads-up comparison to an FDA-approved monovalent mRNA vaccine, monovalent ARCT-154 showed multi-fold improvement in durability and multi-fold superior titers of neutralizing antibodies against Omicron BA.4/5 and this was at the six months post-boost mark. These Phase 3 booster results were consistent with the Phase 1/2 booster clinical trial durability data that were collected previously and presented at the 9th ESWI Influenza Conference in Valencia. All of these observed clinical benefits were achieved with the STARR next-generation mRNA technology which is administered at 5 micrograms. This is an 83% to 92% lower dose level compared to approved mRNA vaccines. This lower dose level highlights the potential safety and tolerability benefits of this next-generation mRNA vaccine platform technology. Based on all the clinical data collected to-date, we believe that the next-generation STARR mRNA platform is an effective and differentiated vaccine technology that may offer a longer-lasting immune response, relative to the older conventional mRNA platform technologies. Supported by the ARCT-154 clinical data, Meiji Seika Pharma, the partner of CSL Seqirus submitted our Japan NDA to support ARCT-154, as a primary series and booster vaccine for COVID-19. The review of this application remains underway and is on track for approval in December. We filed a marketing authorization application in Europe. And we are seeking approvals for ARCT-154 in other major markets. We continue to mature the value and scope of the STARR next-generation mRNA vaccine platform by collecting meaningful bivalent vaccine clinical data as well. We're pleased to report today that the planned enrollment target of 850 participants has been reached in the ongoing Phase 3 bivalent COVID vaccine trial comparing immunogenicity to bivalent Comirnaty. The initial top-line results of the study are expected in Q1 of 2024 followed by an unanticipated PMDA approval in Q3 2024. In summary, we are delighted with the rapid progress we have achieved this year with our STARR next-generation mRNA vaccine platform. We believe ARCT-154 provides clear validation of the broader opportunity for Arcturus' mRNA vaccine and therapeutic programs. Our strategic collaboration with CSL which is Arcturus' exclusive global license fee is focused on developing and commercializing next-generation mRNA vaccines and continues to make substantial progress. Our partnered LUNAR-FLU program which is also now known as ARCT-2138 continues to progress with funding and operational support from CSL. LUNAR-FLU utilizes Arcturus' next-generation mRNA platform. And we are intending to initiate a Phase 1 clinical trial, which is expected to begin soon. We'll now move on to ARCT-810, this is our messenger RNA therapeutic candidate for ornithine transcarbamylase or OTC deficiency. This investigational medicine is designed to functionally replace the deficient OTC enzyme in the liver, restoring urea cycle activity and preventing metabolic crises that cause neurological damage. ARCT-810 could reduce the need for ammonia scavengers and ease the rigid dietary protein restrictions that OTC patients face today, thus improving the quality of life for those with the disease. ARCT-810 has received Orphan Drug Designation and Rare Pediatric Disease Designation from the FDA. ARCT-810 is currently being evaluated in two ongoing clinical studies in patients. Our Phase 1b study in adults and a multi-dose Phase 2 study in adolescents and adults with OTC deficiencies. The Phase 1b single ascending dose study is being conducted in the United States and has completed dosing of all planned four cohorts in a total of 16 subjects. We expect the final database lock to occur later in this fourth quarter of 2023. The ARCT-810 Phase 2 study is being conducted in the United Kingdom and Europe and plans to enroll up to 24 adolescents and adults with OTC deficiency. The ongoing study evaluates two dose levels and includes up to six bi-weekly administrations for each participant. We remain committed to the development of ARCT-810 and we are taking various actions to address the continued challenging enrollment rate in Europe, by adding study sites and patient services to improve screening participation. Updated guidance of interim Phase 2 data is expected in H1 for the first half of 2024. Moving now to our ARCT-032 program. ARCT-032 is an inhaled messenger RNA therapeutic candidate for cystic fibrosis, formulated with Arcturus' LUNAR delivery technology, which has been optimized for bronchial epithelial cell delivery. We completed enrollment and dosing in a Phase 1 study in New

Thank you, Joe, and good afternoon everyone. The press release issued earlier today includes financial statements for the third quarter ended September 2023 and provides the summary and analysis of year-over-year financial results. Please also reference our most recent 10-Q for more details on the financial performance. Arcturus recently achieved a $35 million milestone from CSL. The milestone payment will be used to fund development activities for the LUNAR COVID-19 vaccine program with CSL. We are very pleased with the ARCT-154 new drug application, with the PMDA in Japan, and we believe that this product could represent a highly differentiated vaccine option for patients. Furthermore, the development and manufacturing plans supporting ARCT-154 was carried out in a financially disciplined and efficient manner. That leverages multiple external collaborations. The two ARCT-154 Phase 3 Japanese booster study and the product manufacturing related to this collaboration are being funded by Meiji Seika Pharma and the Japanese government. Meiji Seika Pharma has an agreement with CSL Seqirus, whereby Meiji will be responsible for the regulatory approval, marketing distribution, and sales of ARCT-154 in Japan, as well as coordinating the manufacturing of COVID vaccine products with ARCALIS for the Japanese market. ARCALIS located in a strategic biomedical research and development hub in Japan. It's poised to become a key player in the global mRNA drug manufacturing landscape. This CDMO is designed to support the production of mRNA vaccines, as well as our mRNA-based therapeutics, and has already completed the construction of a state-of-the-art mRNA drug substance manufacturing facility. To date, $165 million has been awarded to ARCALIS by the Japanese government. These funds are being used to build mRNA drug substance formulated drug product capabilities and to construct the DNA template manufacturing facility. We expect this facility to become a leading manufacturer of mRNA-based vaccines and therapeutics with the ability to manufacture vaccines within 100 days of an emerging viral strain. We expect this entity to provide meaningful financial dividends to our company over the coming year due to our substantial equity position. We are greatly appreciative of the Japanese government for their financial support. I will now summarize our financial results for the third quarter of 2023. Our primary source of revenues were from license fees, consulting and related technology transfer fees, reservation fees, and collaborative payments received from research and development arrangements with pharmaceutical and biotechnology partners. For the three months ended September 30th, 2023, we reported revenues of $45.1 million compared with $13.4 million for the three months ended September 30th, 2022. Revenues increased by $31.7 million during the three months ended September 30th, 2023, as compared to the prior year period. The increase was primarily attributable to revenue recognized from the collaboration agreement with CSL Seqirus and grant revenue recognized from the agreement with BARDA. Revenue increased by $90.3 million during the nine months ended September 30th, 2023 as compared to the nine months ended September 30th, 2022. The increase was attributable to an increase in revenues of $133 million primarily related to the collaboration agreement with CSL this year. This increase was primarily offset by less revenue in 2023 from other COVID program customers. Total operating expenses for the three months ended September 30th, 2023, was $64.5 million compared with $50.2 million for the three months ended September 30th, 2022. Our research and development expenses consist primarily of external manufacturing costs, in vivo research study, and clinical trials performed by contract research organizations, clinical and regulatory consultants, personnel-related expenses, facility-related expenses, and laboratory supplies related to conducting R&D activities. R&D expenses were $51.1 million for the three months ended September 30th, 2023, compared with $37.7 million in the comparable period last year, primarily reflecting increased clinical research and manufacturing costs and personnel-related expenses. General and administrative expenses primarily consist of salaries and related benefits of our executive, administrative, legal and accounting functions and professional fees for legal and accounting services as well as other general and administrative expenses. G&A expenses were $13.4 million for the three months ended September 30th, 2023, compared with $12.5 million in the comparable period last year. The increase resulted primarily from personnel expenses due to increased headcount and salary, increased travel and consulting expenses as well as an increased rent expense associated with the new headquarters facility. With the three months ended September 30th, 2023, Arcturus reported a net loss of approximately $16.2 million or $0.61 per diluted share compared with a net loss of $35.3 million or $1.33 per diluted share in the three months ended September 30th, 2022. Cash, cash equivalents, and restricted cash were $369.1 million as of September 30th, 2023, and $394 million at December 31st, 2022. We have achieved approximately $365 million in upfront payments and milestones from CSL Seqirus, as of September 30, 2023. We expect to continue to receive future milestone payments from CSL that will support the ongoing development of the COVID and flu program and three additional vaccine programs by CSL. Finally, I'm happy to report, the expected cash runway now extend through the end of 2026 based on the current pipeline and program. In summary, we believe the company remains in a strong financial position and has the resources to achieve multiple near-term value-creating milestones for the vaccine and therapeutic program. Furthermore, with the anticipated 154 product approvals in December in Japan, we look forward to beginning to report potential commercial share in the next few years. I will now pass the call over to Joe.

Thanks, Andy. We've continued to make excellent progress and advanced our proprietary messenger RNA, and LUNAR delivery platform technologies toward later stages in clinical development. And we're excited about the progress toward our first potential product approval in December with ARCT-154. The achievement would definitely mark a critical milestone for the platform and for Arcturus. And so with that, we'd like to turn the time over to the operator for questions.

Thank you. At this time we will conduct a question-and-answer session. [Operator Instructions] First question comes from Yasmeen Rahimi with Piper Sandler. Please proceed.

Good afternoon team. Thank you so much for all the updates. The first question is directed to the upcoming Japan approval. Many clients are asking us if we should be expecting any update in terms of the commitment of Japan, order for vaccines for 2024 at the time of the approval. That's question one. Question two, we would love to hear your thoughts on -- given that the bivalent vaccine enrollment is complete. When we should be expecting data? And in terms of the next steps with the program. And then third is, congrats on the CF program and patient dosing. Are you planning to get to eight patients or is there an opportunity to maybe report data on a small cohort in 2024? And I'll jump back into the queue. And thank you for letting me ask my questions.

Hey, Yas. Thanks. With respect to government orders that maybe associated with the approval of ARCT-154, Meiji is primarily responsible for collecting or soliciting those orders whether that's from the government or from the private sector in Japan. We're unfortunately we do not have insight into that, so I'm unable to address that. But clearly an order cannot happen until the platform or a particular asset is approved. So I won't be able to speak to any detail on that. With respect to the patients being recruited to support the Phase 1b trial for cystic fibrosis, we indicated that the first patient is getting dosed here shortly, but we're more than willing to share interim data if required. The guidance we've provided is in the first half of next year. With respect to the safety and tolerability data those -- the Phase 1b trial for cystic fibrosis. Now you asked a question about when data for another program and this is for the bivalent. And so the -- yeah, the bivalent booster data we've guided that -- the bivalent I'm just looking at my notes to confirm. Yes, enrollment is completing very soon, in fact, later this month. But we are going to be providing data next year. So, top-line data is expected in Q1 and an anticipated approval or PMDA approval in Q3 in '24.

Thank you so much. I'll jump back in the queue.

Thanks, Yas.

The next question comes from Myles Minter with William Blair. Please proceed.

Hey, thanks for the questions. Just relevant to what Meiji has been saying previously which was potential approval to monovalent vaccine in October and you've been more conservative say in fourth quarter. I think that's panned out nicely. But is there anything else going on there from like a regulatory conversations point of view? I know you've shown us, the six-month durability data now to the PMDA requests that because you have it. I'm just wondering why there is an optical delay from October to December. And maybe that's just the fault of Meiji and not if your own, but any clarity there would be great. And I've got a follow-up.

No, just the day 29 data was a prerequisite for the primary endpoint, the six-month data was not. However, this data is aware to the regulatory agency and taken into consideration as they look at regulatory approval going forward. And we've guided again that this that approval is in December.

Okay. And then maybe just, sorry, was there any comment there?

No.

Sorry, maybe just one on the cystic fibrosis program. Do you have to dose those CF patients in a stepwise fashion? So a single patient would receive two administrations be monitored for safety before clearance to dose the next patient or can you get these patients in eight of them at a time and dose them altogether? Thank you.

Yeah. We anticipate, this is Pad in, we anticipate dosing on all the cohort altogether. That's correct.

Okay. Thanks, Pad. Thanks for the question.

The next question comes from Seamus Fernandez with Guggenheim. Please proceed.

Thanks for the question. So, just a couple of quick ones here. In terms of the progression of potential milestones going forward, just hoping that if you guys could help us understand the sort of key steps forward from a milestone perspective, whether it be from the COVID program, the flu program, or potentially other programs. And perhaps just in percentage terms, maybe not without absolute numbers where some of the key, you know, sort of catalyst milestones would really lay out or as a percentage of the terms of CSL what's possible in 2024? Obviously, we know what the runway is now through 2026 with the existing cash, but it seems like that could be drawn out quite significantly in 2024 as more of these programs advance, and as we see more of the COVID 154 applications move through into other jurisdictions more broadly. So just trying to get a better sense of the breakdown of those potential milestones. And then the second question and just -- then I'll jump back in the queue. On OTC, is there a consideration, just given how excruciating frankly the recruitment has been of this patient population? Is there just a view that the demand among patients is just really not there or that they're just too hard to find and this indication might be smaller than what we thought previously? But just sort of begs the question, is it worth it to keep pursuing this indication given the very challenging nature of recruiting the trial? Thanks.

Sure. Thanks, Seamus for the questions. First, I'll walk through some of the near-term milestones as you've asked. So with our internal programs, starting with our OTC deficiency program, we've indicated that the database is being locked relevant to the Phase 1 and Phase 1b data for the OTC program. That database lock is going to occur later this quarter. With respect to Phase 2 interim data, we were guiding the first half of 2024. Now shifting to the CF program.

Hey, Joe, let me answer that question. I think he was referring to the financial milestones. And I think what, is that correct, Seamus? You were referring to the financial -- trying to understand the various programs and obviously with the cash runway going to.

Yeah.

Okay. That's what I thought.

Correct. In terms of the deal with CSL.

Yeah. No, no, that's what I thought the question was pertaining to. So we typically don't guide specifically on the individual milestone because they're frankly very lumpy, right? And we don't know when they're going to start and initiate a certain program and when with the catalyst for that program be achieved, right? So in terms of not disappointing people, I'd rather announce those milestones when we achieve them and more freely be able to articulate how we were able to accomplish that feat. And what's going to be critical here as we go forward is the guidance that we give you with the amount of cash that we have to give you a perspective of kind of what we're burning outside of the CSL and the BARDA relationships, as well as the contribution from the Cystic Fibrosis Foundation. So if you take basically the number of years and divided by our cash, you're going to come close to about $120 million in burn. And our goal will be to bring that down even more. So consequently you know the guidance that's going to be critical to understanding the timing of when these milestones come in. And they're pretty significant obviously those over $1 billion in development milestones that had over three to five programs. So they're pretty meaningful, they're going to have a significant impact on our operations. And as we achieve them, we will certainly be able to explain how we earn them and why we did. And hopefully, that'll provide you enough comfort that we are well funded into at least for the next three years. Without any revenue milestones in our forecast, none, no commercial milestones or revenues are included in our forecast that would be certainly considered you know, supplemental, and we will update the market, assuming we do have revenues in 2024.

And Seamus --

Okay. Thank you very much.

I can give you a little bit more color on the OTC program. As you know, rare disease programs are typically slower to recruit compared to some of the work that we've done with the vaccines. And it's a well-known phenomenon and specifically our OTC trial is being conducted in research centers, which can be slower, of course. So we've taken quite a bit of action to potentially speed that up. There are two key things that we've done, in the near term that's going to help in recruitment and trying to speed this up. We enhance the patient experience and we've added a concierge service so that we can pay for all of the patients’ needs. And then we've also implemented a patient stipend to recognize for -- so a lot of their efforts to be part of this trial. So I think both of these things and in terms and also opening up more sites is going to help in recruitment in the near term.

Right. And I guess, just as a follow-up question to that though, is there any concern around the size of the market opportunity for ARCT for through to, but just trying to get a better sense of -- usually there is also demand for rare conditions where there can be benefits, obviously, there are other treatment options out there. So I'm just wondering if there is an assessment that would make sense. As it relates to this program just because with the CF program advancing is it -- would seem like resources might be better spent to bring for other rare disease opportunities. It's just been many, many years pursuing that. So just trying to get a sense of how you guys are thinking.

That's a great question. And I think Seamus if we did not see the success that Horizon Pharma was having with RAVICTI. I think we would have had a different perspective. But the fact that they were able to generate over $250 million in revenue annually on only 500 patients is a very encouraging opportunity for us. And assuming that, you know, RAVICTI only sequesters ammonia if our mRNA therapeutic succeed, we can prevent these people from generating ammonia, hopefully, right? And so that or at least keeping the ammonia at a baseline level. And hopefully having a normal protein diet, so obviously, the opportunity to have a small in select market share is very lucrative financially for a small company like ours. And certainly we're discouraged by the slow uptake in the patient recruitment. But I believe the steps that we've taken here in the near term should encourage us to accelerate that process here in the first half of next year.

Yeah. We remain committed to the program, and it's not just as a value -- valuable asset, but it also represents the flagship asset for the platform for intravenously dosed or systemically administered mRNA, and there is value taking into consideration for that.

Appreciate it. Thank you, guys.

Thanks, Seamus.

The next question comes from Yigal Nochomovitz with Citi. Please proceed.

Hi. This is Carly on for Yigal. Thanks for taking our questions. We had a couple on the head-to-head bivalent study. First just wanted to clarify was that study requested by regulators in additional geographies outside of Japan? And then second, more generally, I guess, just wondering how you're thinking about the market opportunity in Japan for bivalent versus 154, and how that affects Meiji's commercial launch strategy in Japan? Thank you.

Yeah, thank you for the question. All the regulatory agencies have united in their message for monovalent COVID vaccines. The reason that we're proceeding as a collaboration between Meiji, CSL, and Arcturus here, the reason we're collecting bivalent data is that we don't have to do it in the future. So if there is ever a reason why the regulatory agency changes their view or opinion and bivalency becomes more important, then we will not need to do a trial at that time. We're just taking care of that now. It does strengthen the platform though to have monovalent Phase 3 comparison data and then add to that, the bivalent comparative data with bivalent Comirnaty. But that's the reason we're proceeding with collecting the bivalent data just to strengthen the platform and to prevent us from going back and doing a trial if it's ever requested in the future.

Okay. Got it. That makes sense. And then just one quick follow-up, I think in the past you and Meiji have maybe talked about an XBB specific vaccine candidate. Just curious if there was an update on the status or the strategy for that program.

Sure. Sure. The XBB vaccine update is a monovalent update, some of our partners have started to communicate about this version of the vaccine. It's called ARCT-2303 and again it's a monovalent updated asset. And so all the monovalent ARCT-154 data that we're collecting is very meaningful and relevant to that asset. With respect to updates on activities around that asset, we haven't disclosed those publicly, but there will be an opportunity for us to provide an update on our next call.

Okay, that's very helpful. Thank you.

The next question comes from Yanan

Hello. This is [Quan] (ph) on for Yanan. Thanks for taking our questions. So two questions on COVID. So the first one is on the data that you recently presented at mRNA Healthcare Conference. Can you tell us how the data would translate to differentiation and potentially commercial success? And the second question is after the potential approval in December, can you share with CSL -- sorry, would CSL -- with CSL launch, based on this monovalent regional vaccine or would they -- would they wait for the -- for example, XBB update. Thank you.

Sure. So with respect to the leading commercial or marketing advantages of this platform as we've touched on them already in this call, but I think clearly the buyers here will be very interested in our durability data. They want a more durable vaccine technology. The increased antibodies, of course, has not only an improved immune response but an implied efficacy benefit that would be interesting. And then as we go deeper into the endemic COVID market and as that gets established is going to be an increased emphasis on safety. So I think the meaningfully, the fact that this technology is a much lower dose is going to be emphasized, because of the potential safety benefits associated with dose-related toxicology. So durability increased antibodies and at a much lower dose with potential safety benefits is going to be the initial strategy. Now with respect to the -- you had another question, could you repeat that for us?

Sure. So after the potential approval in December, would CSL launch based on these like original vaccine, or will they potentially wait for the XBB updates and launch that vaccine instead. Thank you.

Well, with respect to what we want to do strategically is position ourselves with the right approvals and the manufacturing slots and timelines to address what the market desires or wants. So if we have an approval of approvals in place then we can proceed to provide an updated monovalent vaccine. If the monovalent 154 gets approved then we'll be in a stronger position to provide an updated monovalent vaccine, if that's what the -- if that's where the orders come.

And hey, this is Pad. And just one other thing to add is, we -- Joe mentioned on his call earlier that we filed for in the EMA approval with our partner, CSL. Once we get the approval, I think, CSL will be looking at what the commercial launch looks like, right? So I think they are in charge of that. But as Joe mentioned, we're currently focused on getting the approvals in the various jurisdictions now.

Got it. Thanks for all the color.

Thank you.

The next question comes from Pete Stavropoulos with Cantor Fitzgerald. Please proceed.

Hi, Joe, Andy, and team. Nice to hear all the updates for the quarter. First question I have for our 154, what are your expectations of when you may hear back from the EMA sort of rough timelines?

Oh, with respect to hearing back from the EMA, this is going to be a considerable process. We haven't provided any type guidance on when approval is expected. I can refer to our partner, CSL, has guided that in 2024, we anticipate approval with the EMA.

All right. And then in terms of ARCALIS, just curious if you could just discuss a little bit, if you can leverage that venture for manufacturing other pipeline candidates. And perhaps you know distribution of drug outside of Japan. And if not already, when do you expect the facility to be operational and what will be the manufacturing capacity?

Yeah, I can answer that question for you, Pete. We've kind of guided that the drug substance facility has been completed. And we've kind of given a timeline for drug product and in-fill finish is probably going to be next year in that timeframe. So in the meantime, we're going to be supplying Japan and any other country through our current CDMO group that we've been working with which includes Catalent, Aldevron, Recipharm in Europe. So until that plant is up and running and able to support not only Japan but any other mRNA product that we may be working on our therapeutics. We certainly would be delighted to have that diversification of manufacturing opportunity in the Far East, like that. So it's going to be a very strategic asset for Meiji, for us, and for CSL. And certainly want to be able to utilize it to the best of the opportunity to address whatever the demand may be on a global basis. So hopefully that will help answer your question.

It does. Thank you very much. And just one last question for 032 for cystic fibrosis. For the Phase 1b patients, I know, we're going to receive two doses. Will you be looking at any pharmacodynamic markers or clinical outcomes, again it's only two doses to sort of gauge 032 activity.

Yes, the primary objective of the Phase 1b study -- just to understand, safety and tolerability and in actual CF patients with two administrations. And to understand further what type of administration regimen will be ideal for a nice proof of concept study. That's to follow assuming success of course. But that's the -- now are we looking at other potential markers of success? Yes. But our expectation at this point and the purpose of the study is just to show safety and tolerability in CF patients. We'd be very excited to see if multiple administrations are well tolerated, because of the recent data that we shared in CF ferret that are very indicative or important data that we bolt-on to the human experience that increases the likelihood of success for this program.

All right. Actually throw one last question, if you don't mind. So this isn't inhaled products. Is there any potential to actually develop some type of inhaled vaccine to respiratory viruses either alone with growth partner CSL.

Well, it's a great segue to the opportunity, the overall platform opportunity for our technologies. If we're showing proof of concept in large vaccine trials and in therapeutics, it does present the opportunity to potentially combine these. We haven't provided any guidance on this, but it does give people some sense of excitement of the platform, in general, that there is so lot of opportunity in the future.

All right. Thank you for taking my questions.

Thanks.

The next question comes from Ed Arce with H.C. Wainwright. Please proceed.

Hi, everyone. This is Thomas Yip asking a couple of questions for Ed. Thank you for taking our questions. Perhaps a first question for pay tenant. In OTC you mentioned the Phase 2 data from the study in Europe are expected in the first half of 2024. Can you discuss what about the Phase 1b single ascending dose study in the US with 60 patients, when should we expect to see some data from that study?

Correct. We've gone through database lock is later this year. Once we've gone through that process will then strategically think at the right time to communicate the data because we need to understand the timing of the interim Phase 2 data, so we may present these at the same time, we may present them separately. But we haven't made that strategic decision yet. But we have informed the market now that the database is getting locked this year for Phase 1 and Phase 1b.

Understood. And then perhaps switching gears both -- 3Q and CF, we see that for Phase 1 studies are ongoing. When should we expect data from these studies?

For the CF study?

Yeah.

Yeah. See the Phase 1b study, we've guided some in-term Phase 1b data in the first half of next year. With respect to the Phase 1 study, we've now informed the market that we intend to provide a presentation at an appropriate conference in the first half of next year as well.

Understood. Just one last question from us. This one is probably for Andy. The 35 million milestone received from CSL, can you discuss what was the trigger events for the milestone?

Yeah. The milestone was related to our COVID in the bivalent program. So hopefully that will help answer that question. And then you -- been able to articulate the progress we're having with the bivalent study in Japan, and we're very encouraged by the speed and success of that trial moving quite rapidly. Thank you.

Understood. Thank you again for taking my questions.

Thank you.

The next question comes from Yale Jen with Laidlaw and Company. Please proceed.

Good evening, and thanks for taking the question. I just switch gears to the flu vaccine that to be started soon. My question is that given CSL is a major player in this space and recently, some of the other messenger RNA flu vaccine has probably had some issues, maybe on the safety or and efficacy. So what -- both you guys and CSL think that how would your messenger of RNA vaccine could potentially to overcome some of those hurdles and actually have a better product.

Yeah. Conventional messenger RNA flu vaccines have potential challenges relating to better dose-related challenges and also durability challenges and that's where self-amplifying mRNA this next-generation technology can prove to be different and good base that we could -- because the dose is much lower. There may be some additional flexibilities there with respect to multivalency and including different antigens. But and also what we've shown in the recent data in our infectious disease vaccine trials is that this next-generation self-amplifying mRNA technology is more durable and that is especially important in the flu shots space or the flu vaccine space. So those would be areas of differentiation.

Okay, great. That's very helpful. And maybe one more question here, which is for the bivalent COVID vaccine. Once they potentially approved in Japan, what is the commercial strategy outside of Japan been contemplated? And was there something also in the United States as well? Thanks.

Right now, all the regulatory is interested in monovalent vaccines, and not necessarily bivalent vaccines. So if that does, we're in a position provide whatever the customer wants, whether that's an updated bivalent technology or monovalent.

Okay, great. Thanks a lot. Appreciate it.

Yeah. Thank you, Yale.

Thank you. At this time, I would like to turn the call back over to Mr. Payne for closing remarks.

Yeah. Thanks everyone for participating on the call. If there is any remaining questions, don't hesitate to reach out the team and we'll get back to you as soon as we can. Thanks to everyone and good night.