Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) Q4 2022 Earnings Call Transcript

Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) Q4 2022 Earnings Call Transcript March 28, 2023

Operator: Greetings, and welcome to the Arcturus Therapeutics Fourth Quarter 2022 Financial Update and Pipeline Progress Call. At this time, all participants are in a listen-only mode. A 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. You may begin.

Neda Safarzadeh: Thank you, operator. Good afternoon, and welcome to Arcturus Therapeutics’ fourth quarter 2022 financial update and pipeline progress call. Today’s call will be led by Joseph Payne, our President and CEO; and Andy Sassine, our CFO. Dr. Pad Chivukula, our CSO and COO, will join in for the Q&A session as well. Before we begin, I would like to remind everyone that statements made during this call regarding matters that are not historical facts are forward-looking statements within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the statements.

Please see the forward-looking statement disclaimer on the company’s press release issued earlier today, as well as the risk factors section in our Form 10-K filed 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 to reflect future information, events or circumstances. And with that, I’ll now turn the call over to Joe.

Joseph Payne: Hey. Thank you, Neda, and good afternoon to all. Thank you for joining us for today’s call. The recent period has been characterized by substantial operational and pipeline progress here at Arcturus. We will be highlighting four areas on today’s update call. First, we closed our strategic vaccine collaboration agreement with CSL Seqirus at the end of last year. We have received the $200 million upfront payment and invoiced $90 million in additional milestones. Demonstrating the positive progress that the companies have made on our partnered COVID and seasonal flu vaccine programs. Second, we’ve entered into an agreement with Meiji Pharma to evaluate ARCT-154 as a booster vaccine for SARS-CoV-2 also known as COVID-19.

And we’re very happy to report significant operational progress in the ongoing Phase 3 study in Japan and we’ll be providing an update there. Third, we have continued to advance our RNA platform technology and our earlier stage clinical programs, and we will provide an update on recent progress there. Fourth, we have strengthened our management team by the addition of Dr. Juergen Froehlich as our Chief Medical Officer, overseeing mRNA therapeutics and Dr. Igor Smolenov, as our Chief Development Officer, overseeing clinical development of our vaccine franchise. I’ll begin with our recently announced strategic collaboration with CSL. We are in the initial phase of our now four-month-old collaboration and very pleased with how the teams are working together.

Arcturus has achieved substantial milestones this month associated with nominating next-generation candidates for COVID and seasonal flu programs. Mutual respect is evident between the working groups of both companies. There is a clear passion and solid work ethic behind the competent execution that has led to these important and early milestones being achieved. We remain eligible for additional development and commercial milestones as covered pipeline programs advance. Our collaboration with CSL is focused on the development and commercialization of next generation mRNA vaccines targeting COVID, Influenza, three additional pathogens as well as pandemic preparedness. Our collaboration combines CSL’s well established global vaccine, commercial and manufacturing infrastructure with Arcturus’ mRNA manufacturing expertise and the innovative STAR mRNA vaccine and LUNAR delivery platform technologies.

We expect this collaboration to drive the development, manufacture and global commercialization of next generation self-amplifying mRNA vaccines over the coming years. The impact of this collaboration to our balance sheet and runway continues to be meaningful and Andy will be speaking to that shortly. Now on to our agreement with Meiji Pharma to advance ARCT-154 development in Japan. Our contracted relationship with Meiji is focused on developing ARCT-154. This is our next generation self-amplifying mRNA booster vaccine for COVID-19. You may already appreciate that Japan has one of the world’s highest rates of COVID booster vaccination. Given the Japanese government’s focus on public health and infectious disease prevention, we fully expect high levels of COVID booster utilization for many years to come.

In addition, the Japanese government has been clear about their interest in establishing independence in mRNA vaccines and we’re very pleased to be part of this effort with Meiji. Meiji Group received a significant subsidy from the Japanese government in the fourth quarter of 2022 to support this effort and Meiji is responsible for all development costs related to ARCT-154 in Japan. In December 2022, we announced that Meiji had initiated a Phase 3 booster study in Japan designed to compare ARCT-154 to Comirnaty and targeting 780 adult participants based on non-inferiority immunogenicity. Meiji moved quickly with the enrollment process, very impressed and appreciative with the productivity and progress we’ve seen there. I’m very pleased to report today that the study is now fully enrolled with over 800 participants, exceeding our target enrollment and ahead of schedule.

In addition, the one month follow-up visits and the one month blood draws have also been completed. This timely execution allows us to immediately collect the pre-requisite immunogenicity data and be in a position to potentially file our first NDA in Japan. Now moving to our earlier stage programs and I’ll begin with ARCT-810. This is our therapeutic candidate for ornithine transcarbamylase deficiency or OTC deficiency. This investigational therapeutic aims to address the deficient OTC enzyme in the livers of individuals with this disease. ARCT-810 has the potential to restore urea cycle activity and prevent metabolic crises that cause neurological damage and potentially liberalize strict dietary protein restrictions and improve the quality of life for people living with this condition.

The program utilizes our proprietary LUNAR delivery technology and one important attribute of this technology is that the lipids administered are rapidly degraded, which we expect will contribute to a favorable safety profile. We are evaluating ARCT-810 in two ongoing clinical studies, a Phase 1b study in adults and a multi-dose Phase 2 study in adolescents and adults with OTC deficiency These studies build upon a completed Phase 1 study that demonstrated a favorable safety profile when dosed up to 0.4 megs per kilogram, the highest dose evaluated in that study. We continue to advance ARCT-810 in the Phase 2 study. The study will enroll up to 24 adolescents and adults living with OTC deficiency distributed across two dose cohorts. The study has enrolled multiple subjects.

We remain on track to report ARCT-810 Phase 2 interim clinical data later this year. Now moving on to ARCT-032, this is our inhaled messenger RNA therapeutic candidate for cystic fibrosis. With this drug, we are aiming to express fully functional CFTR protein in the lungs of individuals with cystic fibrosis. Our approach is agnostic to the underlying mutations associated with the disease and we believe that ARCT-032 could provide benefit across a very wide range of those living with CF, especially Type 1 CF and for individuals who are not well served by CFTR modulator therapies. We’re grateful to have obtained support from the CF Foundation for the advancement of this promising investigational medicine. We also benefit from invaluable scientific collaboration with the experts at the CF Foundation.

Previously, we reported encouraging preclinical data demonstrating successful delivery to the lung in four different animal species: mice, rats, ferrets and primates. Notably, our data have shown the ability to deliver mRNA to airway epithelium in the CF variant. This is a disease model that produces significant mucus in the airways, similar to patients with CF. Finally, in-vitro treatment of bronchial epithelial cells from CF donors with ARCT-032 has demonstrated robust expression of CFTR protein and restoration of chloride current. Supported by these encouraging data, we are now evaluating ARCT-032 at four different dose levels in a Phase I study being conducted in New Zealand. We have successfully completed the enrollment of the first two cohorts with expectation to complete enrollment of the entire 32 subject study in the second quarter of this year and plan to report study results later this year.

Arcturus is excited to share our LUNAR-HBV data next month. We have been optimizing our in-vivo intravenously dosed gene editing platform for years. Our preclinical gene editing mRNA platform data for hepatitis B virus will be presented on April 27 at the 18th Annual Global Hepatitis Summit Conference in Paris, France. This will be the first opportunity for the scientific community to evaluate the benefits of Arcturus’ LUNAR delivery of systemically administered mRNA or gene editing applications. In this past quarter, we have strengthened our management team. We have brought on Dr. Juergen Froehlich, to be our CMO, our Chief Medical Officer to provide seasoned leadership over our mRNA therapeutics pipeline and also have brought on board Dr. Igor Smirnoff to be our Chief Development Officer, who will lead our Arcturus’ clinical development efforts for our promising COVID and seasonal flu self-amplifying mRNA vaccines.

Now Dr. Froehlich has broad and successful experience in the field of rare diseases, including OTC deficiency and cystic fibrosis. He will assuredly increase our likelihood of success as Arcturus initiates and navigates through late-stage clinical trials for our rare disease therapeutic programs. He has three decades of broad and late-stage therapeutic clinical development experience at Genentech, Quintiles, BMS, Ipsen, Vertex and Genevant. Juergen completed Medical School at the University of Wartburg in Germany, he is a Diplomat of the American Board of Clinical Pharmacology and holds a dual executive MBA from Zurich, Switzerland and the State University of New York at Albany. Jurgen has been directly involved in successful global marketing authorizations of drugs in the U.S., Canada, the European Union, Switzerland and Australia.

Since 2011, he’s been involved in early and late-stage development of CF therapeutics, including the approval of KALYDECO and clinical development planning for other CFTR modulators. He has seasoned experience in Phase 1, 2 and 3 trials with inhaled therapeutics in patients with CF to treat chronic lung infection. We are fortunate to have Dr. Juergen Froehlich, join our management team as our Chief Medical Officer. Now moving on to introduce our Chief Development Officer of Vaccines, Dr. Igor Smolenov has a strong record of successfully developing vaccines all the way through approval. He will help our vaccine team and our partnership with CSL, get our COVID and flu programs to this next level, and we’re excited about that. Dr. Smolenov is a recognized leader in clinical development with a proven record of accomplishment in biotech and large pharmaceutical companies.

He contributed to the successful development and licensure of several innovative vaccines. Before joining Arcturus, Dr. Smolenov was the Executive Vice President at Clover Pharmaceuticals. That’s where he built a strong team that was able to rapidly generate pivotal clinical data, leading to a COVID-19 vaccine authorization and product launch there. Before that, Dr. Smolenov served as a therapeutic area head, leading the development of several seasonal flu vaccines at CSL Seqirus. Igor was the Head of Clinical Development at Moderna, managing the initiation of the first clinical trials of messenger RNA vaccines in humans. At Novartis Vaccines, Dr. Smolenov contributed to the development and global licensure of multiple vaccines there as well.

Igor graduated from Volgograd State Medical University in Russia, where he holds an MD, a PhD and a Doctor of Science degrees from this university. He’s the author of more than 50 publications in peer-reviewed journals in clinical pharmacology, infectious disease and vaccine development. We are indeed fortunate to have Dr. Igor Smolenov join our team here at Arcturus as our CDI overseeing our vaccine franchise. I will now pass the call on to Andy Sassine, our CFO, to provide financial updates.

Photo by National Cancer Institute on Unsplash

Andrew Sassine: Thank you, Joe, and good afternoon, everyone. The press release issued earlier today includes financial statements for the fourth quarter and fiscal year 2022 and provides a summary and analysis of year-over-year and sequential financial performance. Please also reference our Form 10-K for more details on the financial performance. I’ll begin with the CSL agreement. Arcturus received a $200 million upfront payment that was received in the fourth quarter of 2022. Additionally, in March 2023, our first achieved development milestones primarily associated with nominating next-generation candidate for COVID-19 and seasonal flu programs, resulting in $90 million invoiced to CSL. We are excited to continue working on these programs under the guidance and leadership of our partner CSL.

Our CSL collaboration is a 40-60 profit sharing agreement related to COVID-19 vaccine product. With respect to program costs related to the bivalent COVID-19 vaccine, we expect that future anticipated milestones will cover all related expenses going forward. Additionally, the program cost for the seasonal flu candidate will be reimbursed in full on an ongoing basis. CSL can apply a $37.5 million R&D credit to be used within the next five years against cost incurred on the flu and three other respiratory disease vaccines. As you heard earlier, we are excited that Meiji completed enrollment during the first quarter of 2023 for the Phase 3 COVID-19 booster trial of ARCT-154 in Japan. Meiji is responsible for all related clinical, regulatory, development and manufacturing expenses for the ARCT-154 booster vaccine.

Our manufacturing loan with the Singapore government, which had a principal and interest balance of $50.4 million as of December 31, 2022 was renegotiated in March 2023, which resulted in Arcturus paying back $17.1 million and the remaining $33.3 million being forgiven. As a result, Arcturus has no further loan obligation payable to Singapore. On the treasury side, in March 2023, we paid off the remaining loan with Western Alliance Bank which had a balance of $10 million as of December 31, 2022, and we entered into a new banking relationship with Wells Fargo. Based on the substantial funding provided by the CSL collaboration, we expect Arcturus to be in a very strong financial position in the next few years. Our cash runway now extends to the beginning of 2026 based on our current pipeline and assuming no milestones or revenues from any commercial product sales.

I will now provide a quick summary of our financial results for the fourth quarter of 2022. We reported revenues of $160.3 million for the fourth quarter compared to revenues of $5.8 million in the fourth quarter of 2021. The increase in revenue was predominantly driven by the license portion of the upfront payment from the CSL transaction. We reported total operating expenses of $38.8 million during the fourth quarter of 2022 compared to operating expenses of $43.4 million in the fourth quarter of ’21. The decline in operating expenses was primarily due to lower COVID-19-related manufacturing and clinical-related expenses. Finally, we reported a net income of approximately $117.3 million, or $4.43 per diluted share during the fourth quarter of 2022 compared to a net loss of $38.7 million, or $1.47 per diluted share during the fourth quarter of 2021.

I am happy to report for the first time in the history of the company, we reported net income of $9.3 million for the fiscal year ended 2022. In summary, we believe that the company is in a strong financial position and has the resources needed to achieve multiple near-term value-creating milestones for the vaccine and therapeutic programs over the next 12 months. I will now pass the call back to Joe.

Joseph Payne: Hey. Thanks, Andy. It’s been a productive quarter. We hit the ground running with CSL, as indicated by meaningful early milestones being achieved in the partnership. We made measurable progress in each of our clinical programs, which has put us in a position to potentially file our first NDA in Japan and collect meaningful clinical data in 2023 for each one of our pipeline programs. This will showcase the intramuscular, intravenous and inhaled applications of our proprietary mRNA and delivery technologies. And we’ve also strengthened our management team and look forward to many of you meeting them over the next — the remainder of the year. So with that, we would like to turn the time over to the operator for questions.

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Q&A Session

Operator: Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. First question comes from the line of Seamus Fernandez with Guggenheim. Please proceed with your question

Seamus Fernandez: Thanks for the question. So, my first question is actually on the Meiji trial. It sounds like the team there has made a lot of progress enrolling patients and we’re almost on the cusp of actually getting the clinical data. I was just hoping that the team could comment on what your hope or expectations are for those data relative to Comirnaty? And if there will be follow-up data because I believe there has been in the past some suggestion of greater durability with the self-amplifying RNA as a potential advantage over just a standard modified mRNA. And then the second question, just really wanted to get a better sense if you are willing to share the dosing regimen in a little bit more detail and the number of patients that have been dosed so far in the OTC study? Thanks so much.

Joseph Payne: Okay. Thanks, Seamus. Well, with respect to your first question, the primary objective of that trial is to establish non-inferiority with respect to the immunogenicity data. One of the key sets of immunogenicity data is that one-month blood data that’s been drawn already. So you’re correct in your assessment that we’re collecting data as we speak, that’s very relevant to the upcoming potential new drug application in Japan. So, we want to make sure that, that immunogenicity data is included in that application. With respect to your durability in CSL, yes, no doubt, we will be tracking that in parallel. But that durability data is not a pre-requisite to establishing approval with the PMDA approval in Japan. It will be an add-on and just strengthen our commercial business case, if we’re fortunate to get commercialized this year.

Yeah. And then, the — with respect to the second question, all we’ve indicated and guided there with respect to OTC is that we — for the first time, we’ve informed, we’ve communicated externally that we have now enrolled multiple patients. We cannot give any more specifics than that. And then with respect to guidance, we want to be clear that we’re still on track for sharing Phase 2 data later this year.

Seamus Fernandez: Joe, if you don’t mind, can I just clarify enrolled patients? Or have you started dosing patients officially?

Joseph Payne: Yes, enrolled means that I define as dosing, correct. So whenever I mentioned the word enrollment in this context, it’s past screening, they have been dosed, correct.

Seamus Fernandez: Okay. Great. Thank you.

Padmanabh Chivukula: Hey, Seamus. Just one other point is that even in the early, the first dosing, we are expecting some pharmacological activity because it is a dose level where we’ve seen pharmacological effect in preclinical models.

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

Yanan Zhu: Great. Thanks for taking the questions and congrats on the progress. A few questions, on the Japan COVID study, could you talk about the — what might be the non-inferiority margin for the primary analysis? And have you talked about the potential economics from a Japanese regulatory approval? Thanks.

Joseph Payne: Well, I want to make sure I understand your question. With respect to the Phase 3 trial in Japan, I know that it’s been properly powered to achieve statistical relevance with respect to a non-inferior endpoint. So, there’s no concerns there with respect to the margins required. Numerical superiority will obviously be observed, but statistical superiority, we’ll have to collect the data to understand that. With respect to your second question, which was on — I can pass it along to Andy.

Andrew Sassine: Yeah. No, thank you for the question. Unfortunately, we don’t provide guidance with respect to economics. And when we do have that available, we will share with the market what the economics are for CSL, and Meiji and ourselves going forward. So, thanks for the question.

Yanan Zhu: Got it. And then a couple of questions on OTC deficiency. In terms of data later this year, you mentioned a subset of patients. Would we see one or both cohorts of data and also what would define success for that readout?

Joseph Payne: Sure. So, the success is biological proof-of-concept, and that’s being defined by biomarker changes being observed in this patient population. So the biomarkers include ammonia and orotic acid in urea, ammonia in the blood, orotic acid in the urine. Urea genesis will be measured. Other amino assets will be also measured for and the OTC enzyme itself will be measured in the blood through unvalidated assay. So, our several biomarkers will be measured. And so, when we indicate biological proof-of-concept, we mean being able to measure or determine changes in those biomarkers because of the therapeutic. With respect, what was the other question?

Yanan Zhu: Would we see one or both cohorts of patients?

Joseph Payne: That depends on the rate of enrollment. We’re recruiting up to 24 subjects in this trial and 12 of them are at one particular dose and 12 were at another dose. And this is placebo controlled. So it’s a 9:3, 3:1 ratio at each of those cohorts. So, if the rate of enrollment exceeds 12, then yes, we’ll be able to provide those observations.

Yanan Zhu: Great. Lastly, on the cystic fibrosis program with data later this year. Just wondering what — for this healthy volunteer study, what would be the most meaningful readout that we should watch out for? And how do you determine the dose to be used in cystic fibrosis patients afterwards? Thank you.

Joseph Payne: Right. So, this is the most meaningful exercise here with these four doses being evaluated in these early subjects in Phase 1. It’s just ascertaining safety and tolerability of the dosing regimen itself. This is an inhaled therapeutic. So, we’re going to be able to quickly evaluate the maximum tolerated dosing for example. The — how long can a person enable this therapeutic for. And so that will be the most interesting data that could come out of.

Padmanabh Chivukula: Yeah. This is Pad. And based on our Phase 1 data, obviously, we’ll be looking at the lowest dose and the top dose. And when we decide to — when we go into Phase 2, we can probably eliminate some of the lower doses, and we’ll pick a dose where we feel comfortable with, that has a good safety margin to start with.

Yanan Zhu: Great. Very helpful. Thank you.

Joseph Payne: Thanks, Yanan.

Operator: Our next question comes from the line of Yigal Nochomovitz with Citi. Please proceed with your question

Ashiq Mubarack: Hi, team. This is Ashiq Mubarack on for Yigal. Thanks for taking my questions. On the OTC program, you had some earlier comments on enrollment and how that’s going. Can you comment at all on the rate of enrollment, in particular, site activation and if there are still outstanding challenges there or if was more or less an solved? And in terms of the OTC data itself, you’re planning on sharing. Can you comment at all on your expectations for kinetics of response, meaning as in how long do you need to dose and follow these patients before accumulating enough response data that would be meaningful enough to share? Thanks.

Joseph Payne: Sure. So, I can update the market that we have now onboarded nine active sites for OTC deficiency. The bulk of that effort was last year. This is the year where we’ve initiated enrollment officially. So, with respect to the pace of enrollment, it’s nothing that is out of the ordinary for a rare liver disease in Europe. So that’s the only comment I can provide there. All we’ve disclosed is multiple patients being enrolled so far. With respect to the kinetics, it’s helpful to understand that this is a six-administration trial. So these doses are separated by two weeks. So there’s six administrations. And what we’ve seen preclinically is that OTC is additive in our preclinical animal studies. So we may see this in humans as well. So that with respect to kinetics, we are collecting blood draws after each administration over these half a dozen doses.

Padmanabh Chivukula: Yeah. Again, this is Pad. Just to point out that, we’re the first protein replacement therapeutic that’s going after this indication and specifically for protein replacement using mRNA. So there’s a lot of unpaved road that we’re trying to tackle. What we envision, of course, that we could see something in the first few doses. And if we do — because of that, we are measuring a handful of biomarkers. So, we hope that we see something very soon, and we’ll report on that.

Ashiq Mubarack: Got it. That’s very helpful. And if I could ask one more on the cystic fibrosis program. Do you think it’s possible we could get some initial healthy volunteer data this calendar year or is that you think that’s more likely to be a 2024 event? Maybe once you have that data in hand, how do you think you can pivot into treating actual cystic fibrosis patients? Thanks.

Joseph Payne: Yeah. The study is being conducted in New Zealand, the Phase 1 study for CF because we’ve already dosed a pair of cohorts, there may be some initial feedback from, and we haven’t had any serious or severe adverse events, right? We have to report on that. So after the first survey after the first couple of cohorts, it does present the potential opportunity to end Phase 1 to add CF patients. But whether we add CF patients to the Phase 1 trial itself or quickly pivot to a more traditional Phase 2 regulatory process is yet to be determined and communicated.

Ashiq Mubarack: Very helpful. Thanks very much.

Joseph Payne: Thanks.

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

Pete Stavropoulos: Hello, Joe, Andy and team. Thank you for taking my questions. So I have one on 810, the OTC deficiency program. What type of patients are you enrolling? Can you speak to their baseline characteristics? Are you kind of enrolled patients are stable on stable background meds? And are they controlled uncontrolled? And can you speculate in which type of patients you may be able to see the most pronounced effects in?

Joseph Payne: Yeah. These are stable adult and adolescent subjects. That will be the initial focus. So, both adults and adolescents in the European Phase 2 multiple ascending dose trial. So I can comment on that. With respect to the other, and what was the other aspect of your question?

Pete Stavropoulos: Can you lay on which type of patients you may actually see the most pronounced effect?

Joseph Payne: Okay. Well, I think this therapeutic has the opportunity to have a biological impact on every patient injected. However, if they are already on ammonia scavengers, for example, the other biomarkers will be more meaningful, like, urea genesis and OTC itself. But if they are not on ammonia scavengers then, of course, ammonia will be looked at erotic acid and other amino acids are going to be investigated on, so the collective body of data should be sufficient to negotiate the regulatory path efficiently with regulatory agencies.

Pete Stavropoulos: Okay. Sorry go ahead.

Joseph Payne: No. That’s it.

Pete Stavropoulos: Yeah. I have a couple of questions. So if you can give a sense of how many subjects have gone through the full dosing cycle in the Phase 2 MAD study? And are you — is there like a safety look built in by, let’s say, the SMD (ph)?

Joseph Payne: Yeah. There’s always safety checkpoints, but we’ve already got approval to proceed in a multiple ascending dose for six administrations, right? Always communicated as multiple subjects. But if every two weeks, there’s another administration. So, you can make your assumptions based on that, that there’s enrolled subjects that if they continued on in the study, of course, they would have multiple administrations so far.

Pete Stavropoulos: Okay. And moving on to 032. So congratulations on that. The enrollment seems to be going well. But just have — I know you briefly mentioned preclinical data in your prepared remarks. But if you can go into a little bit more detail, perhaps, Pad, what from the preclinical data sort of enhance our conviction to move into the human studies? And specifically, can you discuss the predictive value of the model? And how phenotypically similar? Is it to see patients, recapitulate human disease in the lungs? And has it been validated through other therapeutic agents?

Joseph Payne: Yeah. The CF ferret model is relatively new. It’s an exciting model that the CF Foundation and many others are recommending companies to utilize because it’s very likely more representative of the human condition because of the mucus that’s generated in the lungs and the CF ferret model. The key — so it’s difficult to speculate or confirm that this is a validated predictive model, but I think it’s very logic or to suggest that it’s more representative of the human condition because of the additional mucus in the lungs, I think that is a safe assumption. I would like to just point out that our approach has been different from previous approaches that we properly modify and also purify our messenger RNA molecule utilizing the Arcturus proprietary technology.

This is the first time an inhaled messenger RNA therapeutic for CF has entered the clinic utilizing the LUNAR technology. This technology has been highly optimized for bronchial epithelial cell delivery and been optimized to survive the mucus environment and optimized for inhalation and aerosolization processes. And then finally, we also note that this has also been uniquely optimized. The CFTR construct itself to increase functional activity. So, there’s a lot of differences in this therapeutic than what’s been tried before. So, we look at the CF ferret model as indicative, very meaningful because we just don’t see a lot of folks or companies or therapeutics being showcased in the specific model. So I think it could potentially be very meaningful.

Pete Stavropoulos: All right. Thank you for taking my questions.

Joseph Payne: Yes. Thank you, Pete.

Operator: That is all the time we have for questions, at this time. I’d like to hand the call back to Joseph Payne for closing remarks.

Joseph Payne: Hey, thanks. Thanks to everybody. So let me — thanks for participating on the call. If there’s any remaining questions, please reach out to the team, and we’ll get back to you right away and bye for now.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.