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Thank you, operator. Good afternoon, welcome to Arcturus Therapeutics quarterly financial update and pipeline progress call. Today's call will be led by Joe Payne, our President and CEO, Dr. Alan Cohen, our Chief Medical Officer, Dennis Mulroy, our Chief Financial Officer. 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 this statement.

Please see the forward-looking statement disclaimer on the company's press release issued earlier today, as well as the Risk Factors section in our most recent Form 10-K, 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. With that, I will now turn the call over to Joe.

Thank you, Neda, it's good to be with you again, everybody. The second quarter of 2026 was marked by continued execution across our rare disease pipeline and important strategic developments for Arcturus' vaccine franchise. Today, I'll provide updates on our rare disease programs, ARCT-032 and ARCT-810, summarize today's good news regarding our vaccine enterprise. I will then turn the call over to Alan for additional clinical updates and to Dennis to review our financial results. Starting with ARCT-032, our inhaled mRNA therapeutic candidate for CF. During the quarter, our phase II study continued to advance on schedule with active screening and enrollment ongoing across sites in the U.S., Israel, and Turkey. These international sites are important for our recruitment strategy, given the higher prevalence of individuals living with Class I CF in Israel and Turkey.

As a reminder, Cohort Four is evaluating 10 mg of ARCT-032 administered daily by inhalation over a 12-week treatment period. The study is monitoring for safety and evidence of early clinical benefit, including pulmonary function measures such as % predicted FEV1 and lung clearance index, or LCI. In addition, quality-of-life measures and high-resolution CT imaging data are being collected. The decision to advance our CF program into phase III is expected in the fourth quarter, or Q4 2026. If Arcturus decides to proceed into a phase III trial, this decision triggers additional and very meaningful contributions from Thermo Fisher, including manufacturing support, clinical research, and related services. Turning to ARCT-810. This is our mRNA therapeutic candidate for ornithine transcarbamylase deficiency, or OTC deficiency. We are pleased to update the market today that we've completed enrollment in our ongoing phase II study, all enrolled subjects have completed study drug dosing.

This represents an important operational milestone for our OTC program. With the dosing phase of the study completed, our team is now evaluating the phase II clinical data along with the supplementary data requested by the FDA in the Type C meeting earlier this year. These data will inform upcoming regulatory discussions across both adult and pediatric development. We expect to communicate the phase II clinical study data later this year in Q3 2026. Concurrent with the data readout, we will provide additional details regarding the regulatory path forward for our OTC deficiency program. On to our vaccine division. Today, we announced the conclusion of our saRNA collaboration with CSL Seqirus. On behalf of Arcturus, I wanted to express sincere gratitude to the outstanding team at CSL.

They've been a great partner to help shepherd this first-in-class, next-generation saRNA technology to where it is today, a validated platform with approvals in over 30 countries. We are pleased to regain global rights to our commercial COVID vaccine product, KOSTAIVE, and to our self-amplifying mRNA platform. Having strategic control of this validated vaccine platform is an exciting opportunity for our company. The Arcturus saRNA platform is validated. It's proven to be efficacious with an immune response that is durable and superior in comparative studies. It's been reviewed by several regulatory agencies to be safe and well-tolerated. The manufacturing process is commercial-ready, scalable, fast, with lower cogs attributed to a significantly lower dose level.

Several global regulatory agencies have reviewed and approved Arcturus' saRNA vaccine platform as represented by KOSTAIVE, which has been approved for licensure in Europe, Japan, and more recently, the United Kingdom, with the regulatory path forward into the United States also clearly understood. The Arcturus vaccine platform is pandemic-ready. The U.S. government is keenly aware of this next-generation saRNA platform. It is likely not a matter of if, but rather a matter of when this platform will be called upon to address future epidemics of infectious disease. Under the agreement, Arcturus regained global rights to KOSTAIVE and the broader infectious disease vaccine portfolio, including seasonal influenza, pandemic influenza, RSV, and EBV vaccine programs. The agreement also resolves the arbitration related to a European regulatory approval milestone payment.

CSL Seqirus wired a one-time cash payment of $12 million to Arcturus, and Arcturus is released from liabilities, including those associated with an R&D credit with an aggregate value of approximately $16 million. With strategic control of the portfolio returned to Arcturus, we are evaluating opportunities to maximize its future value, including further commercialization and partnering pathways. With that, I'll turn the call over to Alan for a more detailed update on our clinical programs.

Thank you, Joe, and good afternoon, everyone. From a clinical development perspective, the second quarter represented meaningful progress for both ARCT-032 and ARCT-810. Beginning with our CF program, ARCT-032, our ongoing phase II study continues to enroll people living with cystic fibrosis who have Class I mutations. Enrollment remains on schedule, with active screening and enrollment underway across sites in the U.S., Israel, and Turkey. The study is designed to evaluate daily inhaled dosing of 10 mg over a 12-week treatment period. It continues to assess safety as well as evidence of early clinical benefit, including pulmonary function measures such as changes in % predicted FEV1 and lung clearance index, quality of life measures, and high-resolution CT scan imaging. One important development this quarter was the expansion of screening and enrollment activities beyond the U.S. into the Eastern Mediterranean region.

Israel and Turkey are geographies with a high prevalence of individuals with CF Class I or null mutations, which will meaningfully support our recruitment efforts and efficiencies for this study. Unlike the U.S., where up to 10% of people with CF are ineligible for modulators due to null mutations, up to 30%-40% of people with CF have null mutations and are eligible for consideration of enrollment in our ARCT-032 study from Turkey and Israel, respectively. Clinical execution remains on schedule, and we are laser-focused on generating the data needed to support the phase III decision expected in Q4 2026. Turning to our OTC deficiency program, ARCT-810. During the quarter, we completed enrollment of the ongoing phase II study, and all enrolled subjects completed studied drug dosing.

This is an important operational milestone and allows us to now focus on evaluating the supplementary data generated from the enrolled study population. We remain grateful for the continuing support, ongoing encouragement, and strong engagement on behalf of our ARCT-810 OTC deficiency study by the patients, their families, and the rare disease care community. Thank you for all your collective help and interest in our development program. Our current efforts are focused on data review, preparation for upcoming regulatory interactions, and planning for an end-of-phase II meeting regarding the path forward across both adult and pediatric development. We expect to communicate both the data and regulatory plan for OTC deficiency program in Q3 2026. Across both our rare disease programs, our focus remains on disciplined clinical execution, high-quality data generation, and productive regulatory engagement to support efficient development decisions. With that, I will turn the call over to Dennis.

Thanks, Alan, and good afternoon, everyone. Our press release issued earlier today includes financial statements for the three and six months ended June 30, 2026 and provides a summary and analysis of year-over-year performance. Please also reference our Form 10-Q for more details on our financial performance. Cash and cash equivalents were $191.5 million as of June 30, 2026, and $230.8 million on December 31, 2025, for a decrease of $39.3 million over the H1 of 2026. Revenue was $3 million and $5 million for the three and six months ended June 30, 2026, compared to $28.3 million and $57.7 million in the comparable periods last year. Lower revenue was recognized under the CSL collaboration as Arcturus progressed towards termination of the agreement and regaining rights to KOSTAIVE and its broader infectious disease vaccine portfolio.

Research and development expenses were $17.5 million and $39 million for the three and six months ended June 30, 2026, compared with $29.6 million and $64.5 million for the corresponding periods in 2025. The decreases were primarily driven by lower research and development spending, including reduced salaries, wages, benefits, and facilities cost as the company continues to advance its CF and OTC programs while maintaining its disciplined approach to capital allocation.

General and administrative expenses were $11 million and $20.5 million for the three and six months ended June 30, 2026, compared with $10.3 million and $21.7 million in the comparable periods last year. Overall, general and administrative expenses remained relatively consistent across periods, with a slight quarter-to-quarter increase due to legal fees, partially offset by reduced spending in salaries, wages, benefits, and facilities costs. We remain focused on disciplined execution and capital allocation as we advance our rare disease programs. The CSL Seqirus termination and settlement agreement strengthens our financial position as we regain control of those assets, and the Thermo Fisher collaboration funds and supports the execution of late-stage development of our CF program.

We continue to maintain a strong balance sheet and cash runway of over two and a half years through year-end 2028, allowing the company to reach important clinical and regulatory milestones for its rare disease pipeline. With that, I'll pass the call back to Joe.

Thank you, Dennis. Arcturus continues to execute across our rare disease therapeutics portfolio while strengthening the long-term strategic position of the company. With enrollment progressing in our phase II ARCT-032 study and completion of enrollment and dosing of ARCT-010 and the return of strategic control of our vaccine portfolio, we remain focused on advancing important clinical, regulatory, and corporate milestones through the remainder of 2026. With that, let's turn the call over to the operator for questions.

Thank you. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. We'll take our first question from Lili Nsongo with Leerink Partners. Please go ahead. Your line is now open.

Hi. Good afternoon. Thank you for the update on the quarter. Maybe just thinking about the OTC program, could you maybe provide us a little bit of detail and an overview of the data we should expect at the upcoming readouts later this quarter? Would it be solely the U.S. pediatric, or sorry, U.S. adolescent and adult patient, or will we also see a longer-term update from the European patients?

Hi, Lili, thanks for the question. Yeah. With dosing completed, you're right, we are preparing for this data disclosure later this quarter. We're evaluating the phase II clinical data, which includes the U.S. and European dataset. The new data, of course, will be the most recent patients that have added and completed dosing here in the United States. It will also include supplementary data that was requested by the FDA in the Type C meeting earlier this year. We just intend to share a fulsome update on the OTC program that includes not only the phase II data, but the requested Type C data and providing additional detail with respect to the regulatory path forward. I'll leave it at that.

Great. Thank you. Maybe as a follow-up, still staying with OTC, do you view diet liberalization as the bar for success, or should we be looking maybe at the biomarker level?

With respect to biomarker levels? Yes. Well, I know the biomarkers being evaluated and measured are ammonia and glutamine and, of course, urea itself. Maybe, Alan, you can comment or address the rest of the question.

Yeah. Great question. I think that the two elements that are going to be most important to are not just the biomarkers. They're certainly important because it speaks to mode of action, but also how these patients feel as well as function. It'll be the totality of the data that we've been able to generate up to this point, not only relating to safety and tolerability, but also biomarkers as Joe just mentioned, most notably ammonia levels and glutamine, but also the additional quality of life and functional measures that we're collecting. It really will be the totality of all the data is what the agency is interested in wanting to see, and which is obviously important to move our program forward.

Thank you.

Thank you. We'll take our next question from Pete Stavropoulos with Cantor Fitzgerald. Please go ahead. Your line is now open.

Thank you very much. Hi, Joe and team. Congrats on the progress. I have a couple questions on the CF program. First one is, how has the cadence of enrollment been? Will you wait for all the patients to complete the study before data disclosure, or is there a possibility of an interim look? Are there plans to adjust the protocol to allow dosing past 12 weeks or three months?

Okay. There's a few questions there. Thanks, Pete, for joining the call. With respect to the cadence of enrollment, we touched on that we've expanded our footprint to ex-U.S. sites in Israel and Turkey that are assisting with that challenge. With all rare disease programs, it's all about the cadence of enrollment. We feel confident. In fact, we've expressed considerable or a high level of confidence with respect to the cadence of enrollment rate now that Israel and Turkey are participating in this trial. With respect to the remainder of the questions, I can turn the time over to Alan.

Sure. I think, Pete, the essence of what you're asking is when do we know that we can draw a line and total up the cumulative nature of the data we've generated, and that we're satisfied that it's sufficient to make a decision? I think the data's going to drive that. Certainly, we believe that at the rate we're currently enrolling and the quality and nature of the data that we're generating, particularly now that we've added Israel and Turkey to the mix, which have such a larger preponderance of the patients we're most interested in identifying and enrolling. We believe that the time should be sufficient through balance of Q4 to be able to accumulate the necessary data to make an informed decision on what's best for the program and for these patients moving forward.

Just to add to that, if you notice, our new guidance is focusing on the decision to proceed, rather than a data share or completion of enrollment. This is simply because the next meaningful event for this program is that decision, which is guided for Q4. The decision to proceed triggers significant and meaningful contributions from Thermo in our recent deal that we announced. That's what we're focused on, is getting sufficient data for that decision to proceed in Q4.

All right. Thank you for that. I do have one question on LCI. It's being used for CF, the phase II study. Can you just talk a little bit about this test, sort of how sensitive is it, and how variable is one close reading to another?

Yeah. LCI is definitely a different lung function measurement. Alan, maybe you can comment on some key differences there with sensitivity, et cetera.

Yeah, sure. I think the biggest unknown and the biggest challenge for using lung clearance index in adults with CF has been the lack, as you know, of normative data among the population that's of most interest to us. Fortunately, as you're probably aware, the CF Foundation's funding the REACH study. We're going to get an update on that at the upcoming cystic fibrosis meeting in Atlanta in October. The Foundation has been kind enough to offer to make that data available, especially for companies like ours and others that are working in this space, so that we can have access to that data and use it as a natural control. The short answer is that the sicker the patients are performing this test, the more challenging it is.

We're focusing in on a mix of patients within a range that we believe we should be able to get highly reproducible, meaningful data that's not only reproducible, but also is giving us a much more sensitive measure of changes in the smallest airways, where the earliest changes of lung disease occur in this population. It's adding additional nuanced information that spirometry and pulmonary function testing traditionally doesn't give us. We think it's actually better for the patient population, it's better for our understanding of the disease itself, and we think it might lead to another pathway forward for showing an ability to stabilize and improve lung function in this very vulnerable patient population.

All right. Thank you very much for that color, and congrats once again on the quarter.

Thanks.

Thanks.

Thanks.

Thank you. We'll take our next question from Yanan Zhu with Wells Fargo. Please go ahead, your line is now open.

Hi. Thanks for taking our question. This is Quan On for Yanan, and congrats on the quarter. On CF program, can you share by 4Q, what kind of data set do you expect to have collect to help you make a decision? Given that this is an open label study, are you seeing the data in real time? Any safety update you can give us? Thank you.

Yeah. The data we're collecting is FEV and LCI data for pulmonary lung function data, and that's supplemented with high-res CT scan data and validated quality-of-life measures and surveys. That's going to be the collective data that's going to be under consideration when Arcturus makes its decision to proceed. With respect to the open label nature of the study, absolutely. It's an open label study, so Arcturus and the team will have access to data on an ongoing basis.

Any safety signal you have observed or any comments on that? Thank you.

With respect to CF safety, ARCT-032 is the name of our CF candidate, this candidate or ARCT-032 has been in over 50 participants to date, ranging from all the way up to 15 mg for 28 days of daily dosing. We've done so without steroid treatment before, during, or after. This whole time being permitted by regulatory agencies to self-administer in their home, not necessarily required for these people to do so in a clinic. We're presently active in a 12-week study. This is, I guess, a longer way of saying that we have a high level of confidence in our safety and tolerability of this platform, given the dose levels and the duration we've collected so far, and we hope that that continues. It is a key differentiator for our program. Thank you for the question.

It's been decades of failures of inhaled therapeutics, and it's always been attributed to failures in toxicology and tolerability. Humans just don't like to inhale foreign substances, so we've overcome those challenges over the last decade of R&D.

Got it. A quick question on OTCD. Has the EOP2 meeting with FDA been scheduled, and what are the potential outcomes from the meeting? Thank you.

Yeah. We've already highlighted and guided that we're going to have a fulsome data and regulatory path update later this quarter, and that'll be the opportunity to provide some more details about that EOP2 meeting. That will be the appropriate time to do so.

Got it. Thank you for all the colors.

Thanks for your questions.

Thank you. We'll take our next question from Yigal Nochomovitz with Citigroup. Please go ahead. Your line is now open.

Hi, this is Juan came on for Yigal. Thanks so much for taking our questions. Just curious, I'd love to hear a little bit more about the collab with Thermo. Can you tell us a little bit about how that came about, and have they seen any interim phase II data or 15 mg data ahead of you guys making that deal?

Yeah, it's a great question. There was significant interest from multiple large manufacturers in the CF product because it's a very unique product. Unlike our vaccine, our KOSTAIVE vaccine that we just regained rights and control, that vaccine is dosed at 5 micrograms once a year. It's a very infrequent, long-duration acting product. Unlike that product, the CF product is 10,000 micrograms daily. Because it's a significant commercial manufacturing deal, you can understand the level of competitive interest from large manufacturers. As they came together, we put forward a deal that made sense to all parties involved, and Thermo Fisher ultimately became our exclusive partner for commercial manufacturing of the CF product through that path. Did I address your question?

Yeah. I was just wondering, did they happen to see the interim phase II data?

Yeah, absolutely.

Okay.

Just like in all major deals, this one was a significant one for us. They went under CDA. They have access to an e-room and all the clinical data. Understanding it's an open-label study. Yes, they had access to all the data.

Got it. Thanks very much.

Thank you. We'll take our next question from Myles Minter with William Blair. Please go ahead. Your line is now open.

Hi, this is Jake on for Myles. Thanks so much for taking our questions. One on OTC. Just wanted to get a sense of the baseline hyperammonemic crisis rate in the phase II study and how that might compare to other OTC trials to date. One on KOSTAIVE. You mentioned that the regulatory path for KOSTAIVE's approval in the U.S. is clear. Just wanted to maybe get a little bit more color on what that path is. Thanks.

Sure. Do you want to take that question, Alan?

Yeah. For our current ongoing OTC program, we're giving five doses over approximately 12-week period of time. The anticipated percent and burden of exacerbations or hyperammonemic episodes occurring during that window and the nature of our inclusion and exclusion criteria are really not looking to capture patients that are unstable enough that we would likely be capturing those events or looking to those events to be helpful and informative during the course of just a simple five-dose regimen. What we're really our goal and objective here was to bring in patients who are on a stable protein intake, who are stable medically and functionally, but who still are burdened with OTC deficiency, and are adults.

The goal there being that we want to see if we can have an impact on their baseline periods of ureagenesis as related to measurements of blood ammonia and glutamine levels, as well as other trace minerals. The short answer is that we aren't actively looking for patients who are labile enough for which to capture those events. Obviously, in longer-term studies where we would be treating patients more chronically, and in particular in a pediatric population where the burden is much more problematic and the reason for our programs to want to direct towards newborns and young children who are much more vulnerable and sicker, that would clearly be a greater level of interest and focus for subsequent studies that we hope to be gaining into in the near future. Does that address your question?

Yeah. Then, just wanted to ask about KOSTAIVE and the potential development in the U.S. that you referred to.

Yes. We had very regular interactions with the U.S. FDA for several years since the inception of the pandemic. Under the new administration here in the U.S., there was an abrupt change in view of vaccine policy. Even under that new administration, we received very clear guidance as to what is needed for us to get this approved in the U.S. What I'm communicating is that we have a very clear path of what's required, what's remaining to do to get this approved in the U.S. Thanks, Jake.

Thank you. We'll take our next question from Whitney Ijem with Canaccord Genuity. Please go ahead. Your line is now open.

Hey, guys. Just wanted to quickly, on CF, follow up. I appreciate we're not going to necessarily see a data update in the fourth quarter, as you announced whether or not you're moving forward into a phase III, can you help us understand how you're thinking about more quantitatively which endpoints are of importance and what you're looking for? I guess, is there a scenario where maybe you're not seeing an FEV benefit, but you might still move forward based on something you're seeing on LCI, CT, et cetera? Thanks.

I'll begin and then provide Alan some time here, too. Just to refresh, we are collecting FEV, LCI data, high-res CT scan data, and quality of life measures. What is very unique in this process is, as we've engaged the FDA, we have come to realize that our technology and our product and the patients that we're pursuing are very, very unique. We're the first to do this. In terms of what thresholds of success need to be achieved is going to be set and established by us in this process, not by historical or other precedences in the field. What we've heard consistently is anything positive with respect to the data that we're collecting would be very well received and a significant win and exciting for the Class I CF community.

There will be increased emphasis on lung function measurements, of course, like FEV1 and LCI. Alan, anything to add?

Yeah, I think Joe got the essence of what I'm thinking and wanted to get across. Just to reframe, remember that this population of Class I mutation patients, particularly those who are adolescent and young adults, are on average experiencing anywhere from 1% to over 2% drops in their percent predicted FEV1 just as a course of surviving annually. Just being around and doing a good job of taking care of themselves, the burden of this disease is remarkable, and it's consistently diminishing their baseline lung function day after day, year after year. The goal here is to see if we can stabilize and improve these patients, and it's probably going to be a measure of not just a single spirometric measure or a single change in LCI. Stabilizing this would clearly be a big step forward for these patients. Also, how they feel and function.

Additionally, their quality-of-life measures, how they're able to maintain themselves, and their overall health and wellbeing will all be in the mix of the elements that we're going to be looking at to help inform us on next steps for the program.

Got it. That's helpful. Just one follow clarification on KOSTAIVE in Japan, given the change in the CSL relationship, how should we think about impact there? Sorry if I missed it. Thanks.

It's a great question. We were splitting the profit share three ways, now that's no longer. It'll be split two ways. Those conversations are very active right now with Meiji. We have a great relationship with them in Japan. We are definitely preparing for the upcoming fall season. We're supporting them with manufacturing and shipping doses so that they can be prepared to distribute those in the upcoming season. It's a very active collaboration, but the profit share will now be split two ways. In terms of the details there, that's in an active conversation, so there'll be an appropriate time to provide more granularity there.

Great. Thank you.

Yeah.

Thank you. We'll take our next-

Thanks.

Question from Adam Dolwood with B. Riley Securities. Please go ahead. Your line is now open.

Hey, guys, this is Adam on for Mike. Thanks for taking the question. Just curious whether you've given any thought to the fact that since Vertex Pharmaceuticals required, I think it was a four-week bronchodilator and clinic-supervised dosing while ARCT-032 is dosed at home, how are you thinking about that tolerability gap as a durable differentiator, and what do you think could apply for the phase III? Thanks.

No, I appreciate the question. It gives us the opportunity to provide more detail as to why we're observing a more attractive safety and tolerability profile with this platform. The first point of key differentiation is the lipid nanoparticle is different. It's chemically different. Instead of a carbon-based core, it's a thiocarbamate core, which means there's sulfur, oxygen, nitrogen. These heteroatoms provide handles for the body to degrade. It's also chemically different how it interacts with the biology in the body, too. We have a different lipid nanoparticle that's biodegradable, non-accumulating, and that is very important with respect to safety and tolerability. The second point of differentiation is that our manufacturing process to purify the mRNA is different.

We have trade secret and know-how and IP around the process to purify the mRNA molecule itself, and the impurities coming out of the output of this manufacturing process can be very problematic with respect to undesired inflammatory and immune responses. Controlling those is a very important differentiator that uses our technology. The third point of differentiation is our nebulizer. This aerosolization of these particles was proven to be very challenging in the early days of this program. We spent a few years, and we had support from the Cystic Fibrosis Foundation to optimize the nebulizer so that it retains the integrity of the particle through the aerosolization process. You don't want these particles aggregating and forming macroparticles during the inhalation process. We've optimized against that.

Whether it's the lipid nanoparticle or a more pure mRNA or an optimized nebulizer, if you take all that three together, that contributes to the better safety and tolerability profile.

Okay, great. Yeah, very helpful. Thanks a lot.

Thank you.

Thank you. We'll take our next question from Adam Walsh with ROTH Capital Partners. Please go ahead. Your line is now open.

Hi. Thanks for taking my questions. You announced cohort four began dosing in March 2026, and I think by my math, we're about five months out. Joe, you've spoken to the safety and tolerability advantages with 032, and I'm just curious, is kind of the lack of any disclosure on tolerability at this point something that we can read into and continue following or are we getting over our skis with that?

I appreciate the question. It does seem logical. I think it's a safe statement that if there is anything serious or severe that's occurred in our trial or material, we would have to disclose that. With respect to commenting on details with respect to safety and tolerability, we will wait for the appropriate time to do so like we've done with the previous cohorts. Alan, anything to add there?

I think we're trying to be thoughtful in terms of our sharing of information and rather than parse through it because we have the position to have the data presenting itself in an open label manner throughout, it's really going to be the cumulative experience with as many exposures as possible, ideally through three months and upwards to 20 patients that's really going to be the determinant as to next steps. We'd rather wait until we have a larger body of data over more patients over a longer period of time to make a point of sharing what we believe is the totality of our experience thus far beyond 28 days, and we look forward to sharing that in the months ahead.

Yeah.

That's really helpful color. Thank you.

Thank you. We'll take our next question from Jenny Kim with BTIG. Please go ahead. Your line is now open.

Good afternoon. Thank you for taking my question. This is Jenny on for Thomas Shrader. With the global vaccine rights return to you're effectively running a standalone vaccine portfolio on top of two active rare disease programs. How are you thinking about the cost to maintain and monetize KOSTAIVE and the broader infectious disease portfolio, and does retaining these rights change your R&D expense trajectory meaningfully?

Let me restate your question to make sure I get the crux of it. Is it good news that we've regained rights and control? Absolutely. I think your question is like, well, how are you going to pay for all of the exciting applications of this platform? There's two efforts that we're going to be focusing on now that we have control. Number one is commercialization. We'd like to continue to mature the product that's already partnered with Meiji as a distributor in Japan and support them in what we can in Japan. Now we can more proactively with the focused commercial efforts, even as a small company, Arcturus, to see if we can explore opportunities in Europe, especially with the United Kingdom. That's an exciting potential opportunity there.

There's commercial activities that will expand, and if we're successful in any way there, those will pay for the other platform activities. The other potentially more obvious one is we now having control of this validated platform from a business development perspective, that opens pathways to partnership and what that looks like and what opportunities there can be. There's a variety of opportunities. We've talked about KOSTAIVE, but also the vaccine portfolio includes really high-value targets like seasonal flu and pandemic flu. EBV is an interesting target. HMPV, we have RSV. There's a long list of antibacterial vaccine opportunities that can be investigated with this platform, and the list goes on and on. We'll be spending considerable effort in looking at partnering pathways now that we've regained control of the platform.

Great. Thank you.

Thank you.

Thank you. We'll take our next question from Yale Jen with Laidlaw & Company. Please go ahead. Your line is now open.

Thanks for taking the questions and congrats on all the progress. I do want to continue the previous question in terms of this vaccine portfolio. Just curious, besides KOSTAIVE, what the clinical stage of other vaccine has been, both of flu as well as RSV and EBV? I have a follow-up.

Most of the data that we've collected has been undisclosed. Many of it has been preclinical. We have completed a phase I trial for seasonal flu influenza and pandemic flu as well. On that note, since you asked the question, I'm going to refer to my notes that I put together here before the call, but the phase I clinical study for the pandemic flu program, ARCT-2304, the phase I clinical study is completed, and the grant with BARDA is fully executed. The manuscript with the results of the study with BARDA and the U.S. government has been accepted by Nature Communications. We look for a publication there shortly. Arcturus is planning to pursue scientific advice with EMA regarding a pathway to licensure later this year, probably in Q4. Those are two more active prominent clinical programs, seasonal flu and pandemic flu.

With respect to the other programs, we didn't do any formal disclosures on that. We will likely do those under CDA with potential interested parties later this year.

Okay, great.

Thanks for your question.

That's helpful. No problem. Maybe just along that line, in terms of Meiji, if they choose to develop COVID vaccine for the next season, not the current season, but potentially next season, would that be something you guys also will get involved? Or how should we see that?

Well, yeah, we're always going to support Meiji in any way that we can. If we have any future strategic relationships that can complement or help them, that would be something that we'd seriously consider. The short answer is yes, we will help Meiji in any way possible, especially on the manufacturing and making sure that we're timely with respect to delivery of any materials that they need, et cetera.

Okay, great. Thanks a lot and congrats on the progress.

Yeah. Thanks, Yale.

Thank you. At this time, we've reached our time for allotted questions. I will now turn the call back over to Joe Payne for closing remarks.

Hey, thanks everyone for participating on the call. Don't hesitate to reach out to our team for any remaining questions, and we'll get back to you as soon as we can. Bye for now.

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

Hello, and welcome everyone joining today's Arcturus Therapeutics first quarter 2026 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. Please note, this call is being recorded. It is now my pleasure to turn the meeting over to Neda Safarzadeh, Vice President, Head of Investor Relations, Public Relations and Marketing. Please go ahead.

Thank you, operator. Good afternoon. Welcome to Arcturus Therapeutics' quarterly financial update and pipeline progress call. Today's call will be led by Joe Payne, our President and Chief Executive Officer, Dr. Alan Cohen, our Chief Medical Officer, and Dennis Mulroy, our Chief Financial Officer. Dr. Pad Chivukula, our Chief Scientific Officer and Chief Operating Officer, 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 a statement.

Please see the forward-looking statement disclaimer on the company's press release issued earlier today, as well as the Risk Factors section in our most recent Form 10-K and in subsequent filings with the SEC. In addition, any forward-looking statements represent our views only as of the date such statements are made. Arcturus specifically disclaims any obligation to update such statements. With that, I will now turn the call over to Joe.

Thank you, Neda. It's good to be with you again, everybody. The first quarter of 2026 was a period of solid execution for Arcturus as we continue to advance our rare disease pipeline and strengthen our leadership team. I'm very pleased to report that our CF program is now in new uncharted territory. Our 12-week phase II study began enrollment in Q1. We are already well beyond one month of dosing. Continuous dosing beyond a month has never been successfully tolerated in the history of inhaled mRNA therapeutics. This is a big deal. Now, why is that? Because Class I CF is a serious disease with serious unmet medical need, and we believe that the nested pulmonary congestion observed in Class I CF disease requires consistent chronic dosing that is reasonably well-tolerated to be successful.

There are specific reasons why Arcturus has been able to achieve tolerable dosing beyond one month. Firstly, our inhaled LUNAR particle technology includes key delivery lipids that are chemically different from all other technologies competing in this space. Secondly, our messenger RNA manufacturing process to remove undesired impurities is unique, proprietary, and trade secreted. ARCT-032, this is our inhaled mRNA CF therapeutic candidate, continues to showcase these differences in its growing safety and tolerability profile. The CF community is aware of our safety and tolerability profile, which has contributed to the reason why we were able to initiate enrollment of our 12-week open label phase II study earlier than originally anticipated. This study is enrolling Class I CF participants and monitors lung function measures, including percent predicted FEV1 and lung clearance index or LCI.

We believe there is increasing recognition across the field of both the significant unmet medical need in Class I CF and the importance of achieving a well-tolerated repeat dose therapeutic approach to enable durable clinical benefit. Our program is designed with these principles in mind, and we are encouraged by the opportunity to generate meaningful clinical data in a patient population that continues to have no effective treatment options. We look forward to collecting this clinical data, including lung function measures during and throughout this open label phase II study. Arcturus remains committed to advancing our inhaled mRNA therapy for people living with CF Class I mutations who continue to face significant unmet medical needs. Now moving on to our flagship liver program, ARCT-810. This is our mRNA therapeutic candidate to treat ornithine transcarbamylase or OTC deficiency.

We met with the FDA to discuss the pediatric clinical development strategy for ARCT-810. Following this Type C meeting, we were pleased to receive clear regulatory direction on a path toward a pivotal pediatric study.

In line with that direction, we are collecting additional exploratory data and look forward to further alignment with the FDA at the end of phase II meeting planned for the second half of 2026. Beyond our clinical rare disease programs, our partner Meiji in Japan is actively manufacturing KOSTAIVE. This is our self-amplifying mRNA COVID vaccine for the upcoming 2026/2027 season using a two-dose file presentation. All commercial guidance for KOSTAIVE in Japan will be provided by Meiji. We also expanded our executive leadership team with the appointments of Dennis Mulroy as Chief Financial Officer and Dr. Alan Cohen as Chief Medical Officer. I'm pleased that they are both on the call with us today, and we will get to hear from them shortly. Both bring extensive and relevant experience that will play important roles as we continue executing across clinical, regulatory, and corporate priorities.

Many of you will have the opportunity to meet with these gentlemen. I encourage you to do so. Overall, we believe Arcturus is well-positioned to advance our pipeline toward meaningful clinical and regulatory milestones for patients and for our shareholders. With that, I'll now turn the time over to our Chief Medical Officer, Dr. Cohen.

Thank you, Joe, and good afternoon, everyone. From a clinical development perspective, the 1st quarter reflected meaningful progress across our key programs. Starting with cystic fibrosis, ARCT-032 is currently enrolling people with CF with Class I mutations in a larger and longer open label phase II study over a 12-week period. The study is designed to monitor safety, tolerability, and assess evidence of early clinical benefit, including two pulmonary functional measures, including changes in percent predicted FEV1 and lung clearance index. We've intentionally designed this study to generate a more comprehensive understanding of safety and tolerability, along with early signs of clinical efficacy, which are critical to advancing inhaled messenger RNA therapies in the lung. We are also evaluating two validated quality-of-life outcome measures along with changes in high-resolution CT imaging to support a comprehensive assessment of potential clinical effects.

Taken together, these endpoints are intended to provide a robust data package to inform both the therapeutic potential and the feasibility of repeat dosing. Our goal is to establish not only early evidence of activity, but also the feasibility of repeated dosing, which is fundamental to unlocking durable benefit in this patient population. Turning to OTC deficiency, our ARCT-810 program continues to broaden its development strategy to address the unmet medical needs of newborns and young children affected by the most severe forms of the disease. Following our recent Type C meeting, the FDA provided clear direction toward a pivotal pediatric development path. We are actively collecting additional exploratory data to help establish the optimal dose and therapeutic effect as we prepare for the end of phase II meeting planned later this year.

Across both programs, our focus remains on generating high-quality clinical and regulatory data to support thoughtful decision-making and efficient advancement through development. We believe this disciplined approach is particularly important in emerging modalities where careful characterization of safety, tolerability, delivery, and clinical effect is essential to long-term success. I'm excited to be part of the Arcturus team. Look forward to working closely with our investigators, regulatory partners, and internal team members as we continue moving these important programs forward. With that, I'll now pass the call to Dennis.

Thanks, Alan, good afternoon everybody? Our press release issued earlier today includes financial statements for the first quarter ending March 31, 2026, and provides a summary and analysis of our year-over-year performance. Please also reference our most recent Form 10-Q for more details on our financial performance. Cash, cash equivalents and restricted cash totaled $213.4 million on March 31, 2026, and $232.8 million on December 31, 2025. Year-over-year quarterly revenue decreased by $27.3 million. The decline was driven by reductions in revenue from our CSL collaboration as Arcturus refocuses on our rare disease clinical programs.

Quarterly research and development expenses decreased year-over-year by $13.4 million, which was driven primarily by lower manufacturing costs related to LUNAR-COV19 and BARDA, as well as reduced clinical trial costs associated with the LUNAR-COV19 program. Additional decreases were attributable to lower payroll and benefit costs associated with lower stock-based compensation expense and a reduction in headcount. Overall reductions were partially offset by higher manufacturing costs related to LUNAR-OTC. General and administrative expenses decreased year-over-year by $1.8 million due to reduced share-based compensation expense, as well as payroll and benefits associated with reductions in headcount. Through continued execution and strategic refocusing on our existing rare disease clinical programs and therapeutic platform in the first quarter of 2026, Arcturus has maintained a cash runway extending beyond the second quarter of 2028.

The company remains in a strong financial position and has cash runway needed to achieve multiple near-term value-creating milestones in both therapeutic programs. With that, I'll now pass the call back to Joe.

Thanks, Dennis. Arcturus continues to make steady progress across our rare disease mRNA therapeutic programs while strengthening the foundation of the company. With enrollment now underway in our 12-week open label phase II study of ARCT-032 in cystic fibrosis and clear regulatory direction from the FDA on the pediatric development strategy for ARCT-810 in OTC deficiency, we remain focused on advancing toward important clinical and regulatory milestones throughout 2026. Supported by a strong balance sheet and an expanded experienced leadership team, we believe Arcturus is well-positioned to execute on our priorities. With that, let's turn the call over to the operator for questions.

Thank you. If you would like to ask a question, please press star one on your keypad. To leave the queue at any time, press star two. Once again, to ask a question, please press star and one on your telephone keypad. We will pause a moment to allow everyone a chance to join the queue. I will take our first question from Seamus Fernandez with Guggenheim. Please go ahead, your line is open.

Hey, guys. Thanks for taking the question. This is Evan laying on for Seamus. Two for me, one on OTC deficiencies and one on cystic fibrosis. First on OTC deficiency, can you share specific FDA feedback on the glutamine and ureagenesis assay specifically? Curious also the discussion between infants and adults since I don't know if I saw you mention a path forward in the adult setting. Second, on cystic fibrosis, just curious, anything you can share in terms of patient enrollment and progress there and, you know, what's the potential for a potential interim there? Thanks.

Hey, thanks, Evan. I can turn the time over to Alan to address some of the FDA feedback questions pertaining to infants and adults on and the biomarker question to him, and then I can we'll go to that point. I can address the CF question.

Right. Thanks, Joe. We've successfully, as you mentioned, completed the first of two type C meetings with the FDA, and it's clear that we have greater clarity now as to what we need moving forward. As you mentioned, the utility of the biomarkers, most notably ammonia and glutamine in particular, have been historically highlighted and were identified as areas of greater focus and attention for us moving forward. Greater clarity on which biomarkers to use. Ureagenesis is still a biomarker in development, and we're continuing to advance that. It's our dependence upon it, I think, will depend on the additional data that we're currently in the process of generating.

Then with respect to your CF questions and the cadence of enrollment, I think the cadence of enrollment is being determined in the upcoming weeks. You know, we just started this study in the first quarter, but we'll be able to give a more accurate enrollment completion timing later this year. We do remind people that we enrolled approximately 13 subjects in 2025 over sequential three cohorts, you know, the first, second and third cohort, and that was limited to the United States. We are expanding enrollment in not just in the U.S. but also outside the U.S. or abroad.

Thank you.

Thanks, Evan.

Our next question comes from Lili Nsongo with Leerink Partners, please go ahead.

Hi. Good afternoon. Thank you for taking our question. Maybe just a quick question regarding the OTC program. Could you tell us what is the type of exploratory data that the FDA is looking for and also whether it would require for you to initiate studies in the pediatric population? Thank you.

Go ahead, Alan.

Sure. Great question, and thank you for asking. The first Type C meeting that we had, as you alluded to, focused exclusively on what will it take for us to be able to take the adult data that we're still in the process of generating in our current open phase II study into pediatrics. The results of that meeting suggested that we have a clear path forward. We're continuing to collect additional enrollment data for the 0.3 mg/kg and the 0.5 mg/kg dosing groups. Our plan is to then have an end of phase II meeting with the FDA. The intent there is to do the sort of the usual necessary tasks, which is to reaffirm and continue to show safety and tolerability.

Of course, if you're gonna go into young children and newborns, the goal would be to also show enough evidence of clinical efficacy to justify going into such a young, vulnerable population. We have greater clarity now as a result of that meeting. We're in the process of completing that data set, and we should have sufficient data later this year to take that total data set, bring it forward to the FDA and continue our conversations and hopefully get into a pediatric study sometime in the months and years ahead.

Thank you.

Thank you. We will move next with Yanan Xu with Wells Fargo, please go ahead.

Hi. Thanks for taking our question. This is Kwan Ng for Yanan. Our question is around cystic fibrosis. Since there is no placebo control for the 12-week study, can you talk about the variability of FEV1 and LCI, and how should we prepare to interpret the data without placebo control? Thank you.

Yeah, that's correct. There is no placebo arm in the present study. Maybe Alan can comment on the Reach study and placebo strategy going forward. With respect to variability of FEV, that's well understood. We are collecting two lung function parameters, FEV and LCI, and then maybe Alan can comment on the value of doing that.

Sure. Great question, an important question. As you know, the requirements for percentage predicted FEV1 and spirometry is active performance characteristics and reproducibility with the person performing the test. The good news about cystic fibrosis patients is that they've been accustomed, unfortunately, to doing spirometry since they're in school. Since most of the adults that we're enrolling are well into their twenties and beyond, they have decades of experience performing spirometry almost daily. We have set in this cohort 4 study parameters from screening and baseline to allow for a small variation from the two measures, not an excessive amount, that there's enough consistency between screening and baseline that we feel confident that an individual is producing reproducible, reliable tests throughout the course of the study. That was something we didn't have in place before.

I think it's necessary. I believe that it's going to mitigate any concerns that we may have moving forward. In terms of LCI, the challenge with LCI in adults is that there just simply has not been a very large natural history database of people with cystic fibrosis. The good news is that the Cystic Fibrosis Foundation, recognizing the sensitivity of that tool, in particular for measuring changes in small airways, which is likely to be the place where early demonstration of clinical efficacy is most likely to be observed. They are currently completing a large prospective open label study in exactly the same population that we're targeting for our cohort 4 and subsequent studies. That data should be shared later this year, going into 2027 by the CF Foundation at the upcoming NACFC meeting.

We're looking forward to seeing that data starting to be presented, and they have assured all sponsors, including us, that we'll have access to that data moving forward. We'll have a normative dataset, which we hope to use as we bring forward the data we'll be generating on our study drug in the months and years ahead as well.

The only thing I would add is that I just wanna remind everyone on the call that the FDA has not defined a threshold of success for FEV or LCI, at least for our program. In the modulator space, they have, for a new modality like inhaled mRNA for Class I CF, there's no minimum threshold that we must observe. Anything positive would be viewed seriously. Like what Alan mentioned, the Reach Study will be very likely to be very helpful as well. Anyway, thanks for the question.

All right. Thank you for all the callers.

Thank you. We will move next with Myles Minter with William Blair, please go ahead.

Hi, this is Jake on for Myles. Thanks for taking our question. One of your competitors recently discontinued its inhaled CFTR mRNA trial. We were just wondering if you've seen any of the manifestations that were described there and led to the discontinuation, and whether you've had any discussions with the CF Foundation or regulators regarding patient enrollment of this new cohort now that that trial has been discontinued. Thank you.

Yeah. The short answer is no. There's significant differences between the technology that we use to deliver the RNA molecule then versus our competitors, and we touched that on in the script earlier on today's call. I would like to also highlight that we have utilized no steroids as a co-treatment before, during, or after the dosing period. That's a point of differentiation, and there's reasons for that are safety and tolerability related. Also we've been approved by regulators to for unsupervised dosing at home, and that's not been the case for some of the other companies in this field. That's another point of differentiation. The reason behind that, again, is all because we're using a different technology.

It's a different chemistry, it also includes a different manufacturing process to purify the mRNA molecule, which could be a contributor to remove the impurities that cause those undesired immunogenicities and immune responses. Anything else to add, Alan, or?

No, I think Joe covered the majority of it. The only thing I would add is that, you know, it's worth pointing out that at the completion of our cohort 3 study, which went up from 5 mg to 10 mg to 15 mg daily for 28 days, that we were given the ability to move forward with a longer study allowing for either 10 mg or 15 mg daily in cohort 4. Our safety monitoring committee saw nothing clinically worrisome and have allowed us to not only go up to 15 mg if we choose to daily, but we also have the freedom and ability to take those patients out to 12 weeks, which we are currently embarking on right now, initiating at a 10-mg dose once daily.

Thank you. We will move next with Mayank Mantani with B. Riley Securities, please go ahead.

Yes, good afternoon, team. Thanks for taking our questions, and good to hear 032 study is progressing ahead of plan. Did I hear that you've had certain patients move past the one-month exposure window? Just curious if, you know, like the Vertex study, there are any go, no-go decisions intra-study on duration of treatment, 'cause those studies were kind of, you know, comparable on timelines and how further along they were. There, you know, mechanisms built in your study that informs continuation based primarily on tolerability reasons but also obviously efficacy reasons also. Then I have a follow-up.

Yeah, it's a good question. With respect to the first, we have initiated the 12-week study in the first quarter, that means that we are well beyond a month of dosing already in the study. We are continuing to enroll at a pace that's gonna be understood in the coming weeks. Yes, we're well beyond that one-month study. With respect to intermediate go, no-go opportunities and decisions that are built into the protocol, I'll have Alan comment on that.

Yeah, I mean, the good news about an open-label clinical trial is that we're gonna be able to, in an active way, monitor patient progress and look for safety signals as well as early signs of efficacy. It's our impression that by the before the end of this calendar year, we should have enrolled and have sufficient enough data in hand that we will be able to speak a little bit more clearly to the future longevity of the program as well as the direction of the program moving forward.

Understood. Thank you. Then on the Reach data that you're looking to learn at NACFC, was just curious, you know, on the LCI, what according to you sort of good looks like and what correlations that, you know, you're curious about.

Yeah. Yeah.

To see one.

There's several reasons why we've included lung clearance index into this new protocol for the fourth cohort. The first, of course, is to add an additional measure of lung function that is respected, understood, and can be a potential endpoint for us in the study. With respect to the correlation of LCI to other parameters, maybe you can comment on that.

Yeah, I mean, the interesting thing about LCI is that I mentioned earlier at one of the questions that we got earlier was talking about the variability of the performance characteristics of spirometry. The nice thing about lung clearance index and why it was used almost exclusively in young children who can't perform spirometry is that it's a passive maneuver. It doesn't require active involvement of the patient itself to perform it. It's actually very reproducible and highly reliable. All you really have to do is form a seal around the mouthpiece, and then the equipment does the rest. Right now, the only outstanding information we have is what the CF Foundation is generating right now with the Reach Study, which is what's the normal rate of decline of lung clearance index within the population that we're studying. We have a comparative group.

Really right now, it's not only a more sensitive measure. By the way, it's also, as you may know, been an approvable endpoint for some of the modulators, in particular in Europe and rest of world. We know it's reliable. We know it's reproducible. It has really not been used in adults just simply because it wasn't perceived as necessary. I think increasingly it's being appreciated for the sensitive way with which it measures a more distinct, more peripheral, more acutely portion of the airway that may prove to be much more useful for purposes of a study like this in these patients moving forward.

LCI also has a correlation between mucus plug reduction, and insomuch that that's the, you know, the encouraging data we saw in our second cohort that we've shared. You know, we'd like to see that correlate with a lung function measure. Lung clearance index has a nice correlation to these reductions of mucus plugs in others' studies.

Got it. Lastly, any insight on your plans for combining with a modulator for maybe your non-responder population? Is there anything you could do in the ongoing protocol? Thanks for taking my questions.

Did you understand the question, Alan?

Yeah, I think I did. If I didn't, please correct me. I guess the question as I understood it was obviously the highest unmet medical need population are those with null mutations and those who are unable to tolerate or are unable to get access to modulators. That's obviously the patient population that we're focused on now. Is our therapeutic potentially beneficial to a broader population of patients who may be on modulators? Yes. The answer is yes. That would obviously be the next place we'd wanna go. Obviously, we're gonna need to generate sufficient data to make that justifiable, and we look forward to hopefully getting that data in the years ahead.

Thank you.

Thanks, Mayank.

Thank you. We will move next with Adam Walsh with Roth Capital Partners, please go ahead.

Hi, good afternoon, and thanks for taking my questions. On the adult Type C meeting timing, when would we expect to hear about that outcome?

Sure. We've shared previously that the both of these Type C meetings would be completed in the first half of this year, and we're well on track for that. The second would be sometime this quarter. That's a near term.

Okay.

-horizon here very, very soon.

Wonderful. Then how is the team segmenting pediatric versus adolescent versus adult for OTC? What is a realistic enrolled patient number for the pediatric pivotal given the targeted severity?

Sure. Great, great questions. I'll take this one. This is Alan. The population that we believe has the highest unmet need are those who tend to be under the age of six, so preschool age up to early school age. By the time, unfortunately, most of these kids with OTC deficiency who manifested in the birth period, by the time they get to school age, they're either unfortunately having a liver transplant or if they're unable to be stable enough for that, they die. The segmentation for the pediatric population would almost exclusively be focused on that exact population, children in the first weeks and months of life up through probably age six.

Excellent. One more, if I may, just on ARCT-032 and CF. How's the team approaching interim versus full disclosure given the open-label design? I know this was touched upon on the last call, and you may not be advanced enough to comment on it, will you be anticipating any disclosure on interim, given the open-label study?

Yeah. The language we've used on this call today, Adam, is that you're right, it's an open-label study. It's already started, and we're expressing confidence on today's call that later this year we should have sufficient enrollment and data to inform our next steps. I think we're gonna be in a really good place to understand where we are with this program later this year.

That's great. Thank you.

Thank you. We will move next with Whitney Ijem with Canaccord, please go ahead.

Hi. Thank you for taking our questions. This is Angela Qian on for Whitney Ijem. Can you remind us what preclinical data you have of LUNAR-CF to penetrate the mucus and any data around endosomal escape or production of functional protein? Can you also remind us what cells are you reaching within the lung?

Sure. Sure. We have Pad here with us. He can comment on, you know, the ferret data, et cetera.

Well, first of all, you know, we worked for many years with the CF Foundation to develop our preclinical package. And we've done quite a bit of work on looking at LNP stability in sputum. And then we've also done a lot of work preclinically in mouse rodents and ferrets as well as non-human primates. And what we see is in the CF mouse model, for example, that we can get to various bronchial epithelial cells. Yeah, we have a pretty broad distribution, and some of this data was recently published with some of our collaborators, and I think that's available. And we can provide that to you.

Did we address your question?

Great. Yeah. If you could send that would be great. Maybe a follow-up is on dosing currently, are you doing anything to address kind of the distribution of drug into the lower lobes? Like, is there a way you can try to impact the distribution of drugs?

Right now our anticipation is we won't have to modify the position of the patient or anything like that to access different lobes or parts of the lung. That's not our anticipation.

I can also. This is Pad again. We can also, when we did our initial preclinical evaluation of the nebulizer that we were going to use, we've optimized the particle size of the nebulizer so that it does get distributed throughout the lung.

Yeah. This is Alan. Just to add one more piece to that. I think your question is probably coming from the high-resolution CT data that we shared and generated in our last cohort, which showed a preponderance of effect mostly in the lower segments of the thoracic cage and within the lower segments of the lung. We know that ventilation perfusion and ventilation in general differs with aerosols, in particular in the lower and upper segments of the lung. One of the things that we're hoping to achieve if we're going now from a four-week dosing strategy to 12-week strategy is a much more thorough application of our therapy throughout the lung. We hope to see that manifest as the four-week period. We think this is more so a byproduct of time and not necessarily dose.

Got it. Thank you so much.

Thank you. We will move next with Yigal Nochomovitz with Citigroup, please go ahead.

Hi, this is Juwon Kim on for Yigal. Thanks for taking our questions. Maybe two quick ones from us. Just to confirm firstly, do you need to enroll more patients at the 0.3 mg/kg or 0.4 mg/kg, 0.5 mg/kg dose for the exploratory data that needs to be generated, or is that just from longer follow-up?

The short answer is we just need to complete the scheduled study as dictated and communicated at the Type C meeting, so there's nothing too extraordinary. We just need to complete that data set and also analyze it and then present it in a way that they requested. It was just a re-analysis of the data that they wanted to appreciate, and we said that we'd provide that to them at the EOP 2 meeting.

Gotcha. Also on CF, I believe that you noted that you're planning on conducting the HRCT scans in the 12-week study. Can you provide additional detail on how frequently that assessment as well as LCI and FEV1 measurements might be conducted? Are you seeking to enroll a certain number of patients ex U.S.? Thank you very much.

With respect to high-res CT scan, it's before and after. We typically do not propose to take several of these high-res CT scans during a study. It's typically before and after. With respect to the other lung function measurements and the cadence of that throughout the 12-week study, maybe, Alan, you can comment on that, what you're comfortable sharing.

Yeah. We haven't really shared that kind of level of granularity, but I think it's appropriate to just consider that every time a patient comes back to a clinic to get evaluated and to get another scheduled amount of drug, that's a perfect time, particularly at a CF center, to repeat testing in a controlled setting. We are not using home monitoring nor home spirometry or lung clearance index equipment in the household or in the home. We want consistent measures being performed in an appropriate skilled center so that we can have reliable data. We're collecting that data at every time point that the patient's coming back, so it's at a regular cadence over the course of 12 weeks.

Got it. Thank you. Are you looking to enroll a certain number of patients ex U.S.?

Yeah. For 20 subjects. Up to 20 subjects is what we're, what's presently in the protocol. For CF, For CF. Were you asking about OTC?

Oh, no, I just meant, amongst those 20 patients, is there a specific number that you're looking to get ex-U.S. versus U.S.?

Oh, go ahead. Comment on.

Yeah. No. Another great question. we added ex-U.S. sites in large part because there are jurisdictions in the world that happen to have higher preponderances of people with no mutations. we're trying to take advantage of the fact that there are high unmet medical needs in parts of the world where the level of care, the nature of care, and the clinical course of the disease is commensurate and consistent with what we observe here in the U.S., Canada, and other parts of the world. we haven't set a high or low bar in terms of the number of patients to be enrolled in the United States and outside of the United States.

It's in our anticipation that it's gonna be, you know, perhaps an equal mix, but it, it really shouldn't matter at this point.

Great. Thank you very much. Appreciate the color.

Thank you.

Thank you. We will move next with Thomas Shrader with BTIG, please go ahead.

Hi. Good afternoon? This is Jenny on for Tom Shrader. Thank you for taking our questions, and thank you for all the updates. I had a couple questions on the OTC program. For OTC, you're now pursuing late-onset adult and severe pediatric populations, which is a meaningful broadening. Could you help us understand how you're thinking about resource and capital allocation between these two tracks? Is there a scenario where the adult program generates registrational data first and helps de-risk the pediatric program, or do you view these as truly independent developmental paths that need to run in parallel? As you think about your end of phase II meeting in second half of the year, could you walk us through your best case versus base case outcome and what that looks like from that interaction? Thank you.

Okay. A lot there. I think Alan got it. With respect to pediatric and adult regulatory paths, we can comment on that. Expectations for the EOP 2 meeting, go ahead. Just the path for, you know, what percentage of the budget is allocated or energies and resources to the pediatric path versus the adult path? Is there more prioritization to the pediatrics?

Yeah. Okay, understood. Rather than getting into granularity on the budgetary likelihood of expenditure, right now our pediatric program is predicated on the successful completion, sufficient end of phase II data, and a general agreement that we've generated sufficient safety tolerability and clinical efficacy data to be able to then go into children. Our expectation and hope is that the pediatric opportunity and unmet medical need is the greatest and the one that we feel we need to be spending our greatest attention to once we're given the opportunity to do so. Our adult program is almost completed. Right now we're just finishing up enrollment on a small number of patients to complete the grid that Joe was just referring to a moment ago. It's five doses.

Once we complete five doses and have time to analyze the totality of that data and prepare it for our end of phase II meeting, our hope is that we're given the green light to move forward with a pediatric program, and that would be in large part our focus moving forward.

Great. Thank you.

Thank you. Once again, that is star and one on your telephone keypad if you would like to join the queue. We will move next with Yale Jen with Laidlaw & Company, please go ahead.

Good afternoon? thanks for taking the questions. In terms of the pediatric OTC programs, you mentioned most of those patients need transplantation as the ultimate treatment. I just wonder whether you're thinking the The drug currently you're developing was mainly for a stopgap for those patients before they can ultimately get transplantation or this is potentially disease modifying. The patient can be treated for a long time without the need for transplantations.

Well, first a comment is that OTC deficiency is definitely a pediatric-centric disease. That's usually when it's diagnosed. There is a significant unmet need to prevent the undesired liver transplantation that occurs in these young children. Engaging them prior to the severity getting to that point is the timing we're talking about. Is there any other comments from-

Yeah, no. I think your question is actually a really good one. Our hope and expectation would be that we're not only forestalling the need for a liver transplant, but we should hopefully be able to keep these children from requiring not lung, liver transplants lifelong if we intervene and do so in as pronounced a way as we hope and expect to do as early as possible in the course of their disease.

Okay, great. This is very helpful, and congrats on the progress.

Great. Thank you. Great question.

Thanks, Yale.

Thank you. At this time, there are no further questions in queue. I will now turn the call back to Joe Payne for closing comments.

Just thanks everyone for participating on the call. We appreciate everyone's time. Please don't hesitate to reach out to our team for any remaining questions. We will always get back to you as soon as we can. Thanks again.

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