ARCT - Earnings call transcript Q2 2019 | Arcturus Therapeutics Holdings Inc.

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Operator

Greetings and welcome to the Arcturus Therapeutics Holdings Second Quarter 2019 Earnings Results Conference Call. At this time, all participants are in a listen only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded.

I would now like to turn the conference over to your host, Neda Safarzadeh, Head of Investor Relations. you. Thank

begin. may You

Neda Safarzadeh

and conference everyone. call. operator, joining you Arcturus’ earnings good you, Thank afternoon, for Thank

We discuss XXXX Arcturus’ excited second are for quarter operating this results. opportunity to

Executive Payne, We be Officers. Financial available and during is Chivukula, and questions President are also by Scientific Pad Andy the Joseph to Chief Operating joined and our address today Dr. Chief Q&A will Chief Officer; our Chief on and Sassine, line our session. Officer the

level most off overview the important kick Joe announcements development the clinical opportunity will a high activities. and our Arcturus’ call and of will strategic then with market review recent review He roadmap. for the milestones Company's partnership

balance quarter results the Next, Andy recent discussing will and financial be sheet. the developments second Company's recap towards strengthening

call questions. your will Finally, the we open for

begin, conference risks involve Reform statements management made statements provided to that remind Act Before would Safe Securities the to constitute by this of by that for call like forward-looking the the Harbor everyone Litigation substantial questions of Private facts, we and except I uncertainties on purposes historical of responses XXXX. and any for statements

including projected filings are for disclosed general expectations management's fiscal candidates, forward-looking factors, statements. in an develop forward-looking December market limitation any August Arcturus' and in those including status statements, in with programs, preclinical Company’s uncertainties to involve the as statements with clinical XXXX, statements other fact, may Annual the differ historical SEC and in Risk with and report Form statements result prevent unexpected and communication and that financial such programs, SEC. March cash Any conditions future regarding heading performance XX, from and the of risks operations, Such XX-K or on future performance. Actual clinical on Report and the and XXXX, and the XX, many without under of this XX-Q quarterly development results XXXX ended clinical Form or filed inability Arcturus' success materially the Factors the strategy, subsequent are the submissions potential on included results development than a XX, on SEC of could product based of current on and position filed year achievements those to

otherwise as disclaims Except or the any or speak only forward-looking law, of otherwise. which or required to revise of intention by future date whether update made, Arcturus they a circumstances, statements, obligation information, a new were result as as any

turn I will to now the Joe. call over

Joseph Payne

you, Thank Neda.

second thank and programs. our this our about us with results tell quarterly you conference our and are we is you our Arcturus’ patients life-saving to our on an provide to opportunity call. joining call. update therapies for quarter for mission for earnings pleased This afternoon very ever Good conference And develop story to first

and have a redomiciling productive the few We the received, being Ultragenyx received from the raising resulting Genomics, after monies had increased present to in $XX million. Foundation in expanded million and capital we CF in CureVac months, Company $XX and million in July. substantial million from collaboration, to We from operations fund including our amended has $X.X commitment June its Synthetic our $X U.S.,

call. detailed institutional recently million we Andy, in financial $XX broadened more provide investor offerings. base, will approximately our a later this, course, review, of top bringing from of the On And in

platform medicine, and delivery believe it be, lung, but have needs also infectious areas and Messenger messenger molecules That RNA to Well, will life. pharmaceutical Arcturus, and achievement our are to getting will we primary significant not go disease, the where RNA it a a indeed build inside is including will do. what proteins liver, that multiple us they being human and seeing the RNA on only building objective. progress ophthalmology, safely system messenger a And a molecule therapeutics. at the create allow vaccines. life-changing we in scientific And impact effectively with transformational after be is industry. is LUNAR And a to creating targets technology in

make INDs first our is Arcturus on program corner. technology proprietary is in our XXXX And the We the a to a continue And of are pipeline progress IND we to for in anticipated partnered in our XXXX. late to potential file there Ultragenyx, XXXX. be with based we when on with aiming total around just three IND filed include QX that second

candidate me our It's the let first now, wholly-owned ARCT-XXX, pipeline. application. from as LUNAR-OTC, which known So, about clinical talk will our IND clinical also our advanced be of most is which subject

elevated as We can to be neurological most can excreted blood developing in to XXX which we where urea refer urea the you death. OTCD neurotoxic And converted soluble OTC ammonia also deficiency, lead is to being which damage, OTC coma, urine. to are and that causes treat common have the and cycle ammonia, deficiency. water deficiency transcarbamylase And disorder ornithine the

present of not phenylbutyrate. standard however. does like effectively of involves The a diet It and ammonia spikes intake, prevent high-fluid strict scavengers sodium plus care ammonia, low-protein of

are many for liver sadly, patients typically So, transplants. referred deficiency OTC

believe cycle LUNAR-OTC potential our annual program which prevent the represents we liver for and potential activity, OTC damage there's remove detoxify $XXX restore the function Now, in need to patients, XX,XXX to liver normal aims the enzyme neurological the the restore worldwide And sales market. a with transplantation. the urea ammonia, million

Orphan late Drug Importantly, June. U.S. the from received FDA Designation in recently Arcturus

and have proprietary substance We drug of our drug the product using processes. completed manufacturing

We And studies IND-enabling the now drug is support clinical batches inventory XX multiple have to sufficient early development. of each. believe and LUNAR-formulated mRNA OTC current completed product at we grams

GLP GMP two we complete can in to have first trials. studies year-end. initiated to in in batches we We before expect species And use parallel, the tox drug have we that that also manufacture products scheduled clinical of

Moving on to CF program. our

and that or novel a amended advance cystic LUNAR therapeutics delivery Cystic messenger We the fibrosis. was million, application which program IND technology. to an $XX and goal is on methods Fibrosis in announce this therapeutic to deliver an people excited to very lung, LUNAR-CF, of formulated file Foundation Xst, Arcturus’ conjunction develop commitment are -- RNA its with We increased for is mRNA were to with August has very into agreement treat want candidate. multiyear cells The create RNA a with therapies to the of to to the

development to that This to with we XXXX. then was expect in together this nomination XXXX. a sufficiently can now collaboration, file submission. we And are collaboration the late in the And began funded first of And LUNAR-CF IND CF advance quarter IND a we in Foundation, to expect XXXX. candidate expanded the with program an

a caused is about XX,XXX patients. in that of genetic CF the airways. mutations in cystic gene reminder, has buildup worldwide fibrosis a mucus prevalence lung by As CFTR

potential a So, CFTR new to a fresh genotype. into the lungs CF of any transporter therapy RNA of the copy messenger of replacement patients, these deliver has independent

sales. is Class forward as of So, CF we advances. annual And market potential providing X $XXX to future updates million the we estimate look this program

Arcturus XX agreement license and and agreement, develop candidates Arcturus Company's rare And and therapeutic messenger disease shareholder Board, observer disease and Ultragenyx XXXX shares RNA Arcturus' up on an a DNA siRNA X.X Ultragenyx to for RNA, therapeutics expanded $XX discover and terms we share. expanded targets. a addition develop rare in originally the signed stock for at $X Ultragenyx role. collaboration this certain messenger announced June, is to common to targets. million an has seat cash of largest paid in purchased the per of Under million to the in to now, past

mRNA XXXX. for X. filed first this an disease in storage The therapeutic program, is the UXXXX be as type collaboration under IND And expected indication disclosed application is also known glycogen to

indeed together our diseases. We rare excited to transformative partnership with are to Ultragenyx as solutions we expand find for work

emphasize the that the they recently our I biochemical very, LUNAR relevant well technology on more safety to on as specifically are lipids. believe our presented want properties these some a and now our very take moment technology, on competitive profile as on our reflect of strong of as well positioning. data Arcturus We data to

lipid that life is we major of hours. the of that data makes biodegraded up technology with half the presented key the Arcturus portion XX quickly the that LUNAR The demonstrates

perspective, that for XX mg/kg shown total months. can RNA of we mg/kg. non-coding can every X once And the to approved safely lipid we doses administer weekly be a at X FDA existing for over for two dose X.X is do dosing. gold only in considered clinical what this of primates mg/kg, standard in have is We weeks the X put nanoparticle To LUNAR-formulated RNA this delivery

more have in the the plan mRNA there. Society provide numerous Conference scientific also October, Oligonucleotide with As conference And of we that’s including when the, all update second in you OTS think will Berlin. participate to half the of Health an about the International held conferences, year, the this XXXX, we remainder and Therapeutics we or in we details

to have provide able collaborations fund with to in $X validate for signed and Arcturus. resulting our potential our increase additional payments agreements in well aggregate We've multiple and records expanding the as and Arcturus billion Foundation royalties partnership committed upon than to track milestones CF with technology the an backing more both Ultragenyx, in XXXX, build resources our programs The as both research. these to covered. of and We in that been agreements contains financial

to Our our activities high business development be platform a continue toward growing priority.

replicon large especially RNA, with We to promising mature. to therapeutics. our updates development we nucleic consider have DNA these you and and as potential activities evaluations data as ongoing medicines. editing gene collect technology technologies, RNA, will This generation new provide our acid course partners enable of includes And continue several licensing we business next LUNAR

Sassine over for I will Andy? call financial Andy now turn review. to the a

Andy Sassine

afternoon, everyone. Thank you, good and Joe,

earlier update that which June I briefly quarter issued summarize. XXXX, today We release the included financial ended press XX, second a will a on

Collaboration in million compared during $X.X ended $XX.X one-time nonrecurring Approximately $X quarter revenue is to from million June period revenue comparable XX, three million XXXX the the events. in XXXX. was

Agreement million to as approximately First, CureVac from recognized million multiple recognized second, connection with Termination program; related from we from from agreement OTC partner the sublicense Ultragenyx our we Genomics revenues. nonrecurring agreement $X finally, recognized revenues our related $X.X in to $X we the million parties; Synthetic

Operating XXXX. the compared million million last expenses The June June million in XXXX expenses to June year. the quarter XX, were $XX.X in approximately ended ended $XX.X $X XX, quarter quarter XXXX in the proxy included to event related

$XX compared in million ended of $X.XX diluted XXXX. or approximately basic $XXX,XXX, quarter in weighted a June the net period was for per XXXX loss XX, outstanding, the per or Net share average $X.XX comparable loss shares with and

$XX.X $XX.X XX, million share million to Ultragenyx in a with $XX collaboration $XX of and The comprised due XXXX. June agreement, payment. June. Pharmaceuticals equity cash to at $XX Arcturus million XXXX, the per increase was the of in compared announced from XX, had majority million December Ultragenyx equivalents cash a At we upfront totaling $X at million, We received expanded investments

further which transactions, the of our end improved quarter, we to announced significant Subsequent fiscal liquidity. the three

million in First, we of connection $X the OTC the of deficiency. ARCT-XXX Termination with a for Agreement July end CureVac received co-development a at payment therapy as the from for

direct of net to Second, investors the share million. we offerings two and aggregate of the by $XX.XX of stock. grateful $XX.X common for This strong of per our we shares registered common that and stock and announced an shareholders. for were X,XXX,XXX raised two from certain in The was offerings institutional are existing offering Arcturus, our institutional completed support aggregate first new the proceeds

Cystic Foundation to cash program in end end resources an payment added million anticipate increased quarter, the fiscal August. end XXXX. by first our total, LUNAR-CF $XX million should We to the operations through support of to we through their our commitment the Finally, the $XX cash of receiving the Fibrosis $X year of since In and fund of we additional the up sufficient believe be million IND.

three shares shares, our into approximately. take transactions, common the aforementioned million outstanding would we XX.X If be account,

financials, our SEC, ended For further Form our results refer most to period XXXX, XX, filed including XX-Q yesterday. the with details June our on six-month please recent for the

our Joe up will now and analysts. from questions answer presentation back the to turn I call to wrap

Joseph Payne

development making position Andy, Thanks, that is a in thank Arcturus. we our and with and all Arcturus. will pipeline, at financial believe Pad and broader the medicines. you the are the as our on success to reinforce a business for and This serve our activities, progress We Neda, of RNA combined very team to time exciting leader

Company We and the activity, forward XXXX. the meaningful are platform. as the And second we and year our in look all half and around energized a delivery by productive can you to understand further news the all of flow happening progress

open now your Operator? questions. We will call the to

Operator

with Arce Thank proceed comes [Operator first Instructions] H.C. the Ed you. questions. question from Our of with Please Wainwright. line your

Ed Arce

and team, and collaborations. the Hi, recent Couple all congrats progress, on Joe questions of for new the especially me.

the to in like lipids. would again you your I review First, proprietary particular if delivery the could of data,

quite and relative broader the perhaps bit, but mentioned, to key not especially you that is space. that of standard just to the upon could review I overall think you care only if platform. a And Thanks. expand a

Joseph Payne

question. Hi, Ed. the for Thanks

more with advancements Just to feel think lipid our multiple because And reiterate, some to our want respect free I'll technology. sounds on first recently very biodegradability course, delivery. be shared to accumulation and I the of first dosing, data But, can foremost, And of And it the lipids, the this in. our Pad, to that. chime toxicology. like significant with give concern -- color you important pertaining we've crack made we LUNAR to our after in of a respect is, of

on half days. And color mediated that does prevents have XX lipid rapidly this that delivery system that, we've from a life. job And XX-hour So, and to accumulation occurring. put not it's to ideal degrades a some then its is and reported

imagine, to concern So, that it three you half that be confirm weekly after recently data or hours. dosed would that you're a is a we've shared So, perhaps still your being right? if and around significant a XX our life design is lipid biweekly can just that's trying evaluated that to weeks, lipid therapeutic if

that to respect more dosing and of timing dosing. the just with flexibility gives And so, us

there any Other Pad, than is additional…? that, other

Dr. Pad Chivukula

the non-human No. hepatocytes, that provided administration, ARCT substantial and deck we've we I Thanks, in other previously that primates. species data add IV is liver our therapy delivered we our into only would OTC -- by Joe. and for do The gave uptake both is rodent thing

Joseph Payne

in is the we liver, important includes very portion uptake it's where of portion -- responsible cycle And transcarbamylase that's disorders, including the periportal periportal deficiency. a this liver the urea the of Right. the feel for ornithine

Ed Arce

helpful. That's Great.

of year. I your I around for just you now the question other the between next then, had, left to any is what to completed if that's work could be you that go and specifically gating to a and Wondering first program, on quarter IND, the if now there's lead quarter left over progress guess, sort what's that, the are working first you OTC of So, completed? have be factors

Joseph Payne

Pad, question, color provide some Ed. there? why Great don’t you

Dr. Pad Chivukula

Thanks, Joe. Yes.

the efficiently IND is our on to writers made various regulatory working vendors consultants diligently with and medical and key first first-in-human our and We’ll assemble We success brought studies experienced great and So, obviously in forward LUNAR as the we quarter, in to last look filing first the position XXXX. approach team filing. strategically us putting over hires outside some our our and quarter program. with actually our folks of reporting IND

Joseph Payne

And our on timeline then, product efforts with drug -- did highlight there status as substance drug respect to studies the well. manufacturing call tox the GLP our and I of and and

Operator

Please from Capital. [Operator Kumar of Instructions] someone next proceed question your with with Our Brookline Raja question.

Kumar Raja

your hold. but are setback competitors, year, do had dose. on a maybe lifted, they a a So, they obviously ARCT-XXX, allowed of single clinical Translate, ascending had one it earlier was to they this Then,

like, clinic are very is of in that so terms in you’re escalate? as move as dose a preclinical studies to So, able able here smoothly you what sense what I’m to the get doing to well trying guys

Dr. Pad Chivukula

the we specifics are we non-clinical know we're Hi, answer understand and Pad, the there prepared What our for non-clinical Kumar. non-clinical LUNAR put hold non-clinical But strategy our thorough ARCT-XXX our But us to we’ve connecting of regards position to is This that is Obviously, related non-clinical I'll in safety FDA clinic and in We believe currently. were for very that with designed well, don't ARCT-XXX, for discuss approaches clinical both for in question. issues. [indiscernible] and characterization Translate. a studies clinical portions not clinical plan we any OTC the into feedback to to first-in-human our great conduct and patients. clinical incorporated first-in-human studies. our our We the incident. had from into that without support should studies the platform the profile

Kumar Raja

in some what to as How are see in the compared And there. there? to get we how you nebulization can are also, patients, What in mucus you guys of a studies, of delivery do there? ferret you see your effectively the that does in trying terms humans? LUNAR-CF, expectation of we think vehicle obviously, reflect a model drug excess CF And terms

Joseph Payne

you that? Sure. address Pad, why don’t

Dr. Pad Chivukula

Sure.

far of on stability of the patients. our the shown And mRNAs what we've shared serum we in So, formulation so data collected we've observed of with the course, the is and of greatly CF LUNAR platform. disability improved

So, of does presented? we that -- data that have address some you seen our

Kumar Raja

I Yes. have.

Dr. Pad Chivukula

mucus a address have we think we can that, the that technology of Because platform question. great

Kumar Raja

talked about You little call. have guys a the the earlier degradation bit lipid in

You in guys are progress some ophthalmology also. making

the different terms get lipid cells And wanted the a epithelial in eye, liver in to So, of what is or like sense lungs? how in is degradation/accumulation expectation it the from your think are be think with intravitreal formulation ophthalmology you also, expectations? indications? topical you you Do a able -- will what will or are injection you come to up you need for I

Joseph Payne

to collected But, inhaled LUNAR Hey. injected degradation to so that or half-life data or we or been the shared we've respect topical with technology, have concept of completed intravenous least for the vivo presented intravenously for data injections, our has XX-hour delivery the studies lipid half-life achieved injections. not of dosed our intravitreal Kumar. LUNAR intravitreal eye, not Thanks, proof internally and reported data the at lipid degradation degradation in lipid LUNAR and have that formulations. formulations, we lipid. ATX for we With

we've by to from are our encouraged data that shared. intravenous we the biodegradable. And designed be have we very only Although, lipids onset that believe the we not

Kumar Raja

again. once great. Okay, Thank Congratulations, you.

Joseph Payne

Thanks, Kumar.

Operator

Our Li Please with of Ladenburg next question proceed your with question. Thalmann. line from Wangzhi comes

Wangzhi Li

key lipid the other periods nanoparticle platform Hi. to my of on [ph] up quarter. congratulations question the and question technology. for also LUNAR the taking the because your on follow differentiation Thanks on want I

give preference or hours, for hold optimal Bio’s guidance IND what of timeframe Translate kind use? me mentioned or half-life this is context, in FDA in the context what half-life the in period of as So, of of more you terms of maybe or lipid XX of desired kind

Joseph Payne

Sure.

it'll people So, the -- the first help of or help itself. of OTC I all, understand half-life think, clarify to

in in of a So, ornithine days, days. transcarbamylase a enzyme, build It XX resides liver. is this make hepatocytes the long it lasts approximately and once half-life XX this that time. has enzyme And create you over or

before it's needs attractive the half-life our for clear So, the enzyme And lipid as hours. it’s that then, long, because additional other your see but once injected delivery I weeks. look And and injection, lasts technology helpful XX to delivery system to color, from think to there's to. technology itself lipid theoretically theoretically, the and to understand next so just lipids three for put the ornithine to the MCX remove only transcarbamylase that degrade can that well, is to that have -- standard every some as a like you that's compare data that

Okay?

Wangzhi Li

Phase a trial any maybe bit you many little the X, design try? by frequency on program So, moment at to OTC [indiscernible] terms of in going dose color the early dose how the are or

Joseph Payne

trial answer respect the why Pad clinical design, you to that? With don't

Dr. Pad Chivukula

Wangzhi, this Pad. Sure. Yes. is

granularity give of too to our that clinical it's think, you around early I sort design. trial

you studies, our As soon. we’ll progressing completing top be tox filing rapidly and know, in we're GLP IND

sooner will is the it that premature be sort to of provide definitely granularity. market But, but So, we about that. updating

Joseph Payne

Yes.

time. details, detail multiple clinical mentioned. directly do pertaining that into disclosed, on plan. to our a both have to more of provide for those to patients. haven't We some feedback with aspects plan agencies plan, And respect received we Pad We clinical continents But, additional and their at as guidance can later go as regulatory been and with met

Wangzhi Li

on IND that what to done Foundation shift the million Maybe, more remains LUNAR-CF then, what next really CF triggers can you for before if and gears file a provide commitment be you year? program, And late to to R&D. to color the committed $XX

Joseph Payne

Sure.

year-end in that again have nominate we messaged plan a at We quarter the XXXX to first of development an XXXX. candidate IND and of

to that those of details. the haven't the program, timing accordingly. sure of But, for program markets update that I as aspects will assume As we ages, disclosed be we the other

Wangzhi Li

the I so And foundation a this know it I what while $XX ago, the -- investment? started really collaboration guess million triggers triggers what for commitment you from

Dr. Pad Chivukula

Yes.

this And and few the grant, of day collaboration to on the making clinic. the the in and first by And want into obviously been they seen. support impressed to develop has think, a the for -- that that I half us because data going this years. they're they’ve one of program progress to we're

Joseph Payne

cells. itself most getting Yes. the molecules is out functional This of messenger -- that is and we're that of cells, them or only technology inside in of only RNA our delivery not delivery data to to RNA but getting impressive mice. interesting types several collected epithelial breaking messenger these The and of different delivering we've endosome not means the bronchial

Wangzhi Li

the Right? Got question is for you it. Last nebulizer. going CF are program, to

Joseph Payne

now, That not device, which we’re is with yet. one plan but to that At specific correct. have respect which Yes. that have some disclosed yet. inhalation We -- medical going disclosed we with we to point, proceed not to

Operator

Payne I and Ladies Mr. call remarks. we the And our session. like reached gentlemen, of question-and-answer the Joe closing back to any to over end have would for turn

Joseph Payne

time It the have you like in to first We next time participating Thank listen, all all forward and Arcturus' now. Bye that's today. to for the conference. our we quarterly taken you've Okay. look sounds call. appreciate for we

Operator

teleconference. This concludes today's

this Thank And time. a have wonderful You participation. now at lines disconnect for your you your may day.

Arcturus Therapeutics (ARCT) 15 Aug 192019 Q2 Earnings call transcript