Arcturus Therapeutics Holdings Inc. (ARCT) Earnings Call Transcript & Summary

Hello, and good morning, everyone. Thanks for joining us for B. Riley Research Hosted Liver Disease Therapeutics Day, where we have exciting 5 panel discussions comprising of over 15 companies lined up to review the exciting therapeutics innovation across a number of orphan and large prevalence disease. [Operator Instructions] If you have any questions feel free to send them to our host, Mayank Mamtani, at [email protected]. With that, Mayank, the floor is all yours.

Thank you, Kevin. Good morning, everyone. We welcome you to our Virtual Liver Disease Therapeutics Day 2020. I hope everyone is doing well and staying safe. We have an exciting new -- exciting few hours of panel discussions featuring some of the most exciting R&D work happening at a number of innovative biotech companies across a number of liver diseases that we'll speak to. I'm grateful to management team for making time, Dr. Stephen Harrison in particular for joining the 2 NASH panels. We have between noon to 2:00 p.m., and obviously, folks on the line making time during a very busy earnings season. So really appreciate you joining us. Before we get started, I have to make the following disclosures. In the normal course of its business, B. Riley Securities seeks to perform investment banking and other services for companies and to receive compensation in connection for such services. In addition, B. Riley makes a market in most covered companies. Please contact your B. Riley Securities representative for specific disclosures. We appreciate our speakers spending time with us today. Their opinions are their own and do not necessarily reflect those of B. Riley Securities. And we ask them to avoid any disclosure of confidential nonpublic information. With that out of the way, I would love to start the day with our first panel titled, "Delivery Platforms Cracking the Code on Multiple Liver Diseases." So we have with us 2 companies really pioneering the innovation on the RNA therapeutics. On the RNA interference side, we have Arrowhead Pharmaceuticals. And I have with me, Christopher Anzalone, President and CEO. And then we also have from Arcturus Therapeutics, who's pioneering innovation on the mRNA side, messenger RNA side. And we have with us Joe Payne -- we have with us Joe Payne and also -- Joe Payne, President and CEO; Pad Chivukula, Chief Scientific Officer; and Steve Hughes, Chief Development Officer. Sorry about that. So we'll maybe get started with Chris. Again, thanks so much for joining us. We'll do a quick high-level overview of the company and the pipeline from both Chris and then also from Joe for Arcturus. And then we'll dive into the specific questions around the platform and the pipeline. Chris?

Sure. Thanks very much for having me today, Mayank. It's a pleasure to be here, and I feel naked. Joe has brought more ammunition than me. It's just me here. So we'll see how that goes. So we're an RNAi company. We have 9 clinical programs right now, 3 of them are partnered, 6 are wholly owned. We are going after diverse therapeutic areas from both orphan indications all the way up through large disease areas. We have been the first company to bring RNA interference outside the liver, and we think that's an important part of our value proposition. We believe that we can get into a new cell type every 12 to 24 months. Right now, we are able to address hepatocytes, the lung, solid tumors. And next year, we believe we'll be in the skeletal muscle. We also have, I think, extraordinarily rapid development cycle where we expect to bring around 3 new CTAs every year. So we believe that we can rapidly expand this pipeline, again, with maybe 3 new clinical programs every year. I think that's the broad strokes, and we look forward to getting into some more detailed questions.

Sounds great. Joe, maybe you can go next at the highest level about the pipeline and the company.

Sure, sure. So Arcturus is in the business of large RNA molecules, particularly messenger RNA. So we're a clinical-stage messenger RNA vaccines and medicines company. We're headquartered in San Diego, California. We have a variety of promising therapeutic candidates in our pipeline. We have 3 franchises. Our vaccine franchise is led by our COVID-19 vaccine candidate that's presently in the clinic. We have a rare liver disease for ornithine transcarbamylase deficiency, which brings us here or that will be the focus of today's panel. But that's an intravenously dosed messenger RNA therapeutic. And then we have a cystic fibrosis program for -- a lung program because we have expertise in inhaled delivery of messenger RNA as well. So 3 flagship assets representing 3 franchises. And one of our more exciting programs is our liver program, and we look forward to talking about that program today in more detail.

Great, Joe. And yes, today's focus is going to be liver. And really, I think liver is where -- we learned from other platforms also that's kind of the first place to go and for a variety of reasons, the diseases that are available to target and the receptor. So maybe, Chris, you've had a little bit of journey to travel here on the RNAi side. Could you maybe just give us a synopsis of, over the past decade, what you've learned from a linker chemistry standpoint, the triggers that you have and some of the bioinformatics that is underlying to all of that, basically getting at how you've cracked the code on the liver side? But we understand that's only the first step. And for a future conversation, we can talk about other organ types. But maybe we can learn a little bit from you, the journey on the RNAi side on the liver specific targets you have.

Sure. I appreciate that. So look, our ability to target hepatocytes is a large part of our business. And it's, at the very least, also a good test case for how we employ RNA interference. And so it's a good place to start. So gosh, we've learned a lot over the last decade. 10 years ago, many people thought that RNAi was not going to be a usable modality in pharmaceuticals primarily because of this delivery issue. And between then and now, to use your words, I really think we and the rest of the field have cracked the code. The field has gone generally from these large sort of [ kludgy ] molecules that are -- that involve encapsulation. Many people are using lipid nanoparticles to deliver RNAi triggers. And that was always conferring toxicity on the modality. We know that small RNA molecules are in themselves -- of themselves inert. And so the less you can put on these things, the better chance you've got of them staying well tolerated. So fast forward to now, we're at a point where we've done an awful lot of work on targeting ligands. This has been a core philosophy of ours from the get-go and not only for hepatocytes, but of course, for other cell types in this devotion to finding good targeting ligands to preferentially bring these constructs into a certain cell type for hepatocytes that use GalNAc. There are various ways that you can employ that. Some people use a multivalent GalNAc. Some people can use a single GalNAc. We use a trimer. You can also put it on either end of the RNAi molecule, so there are differences there. And then you got to link it to the construct somehow, to the RNAi backbone somehow. We've got a -- we've been developing a linker chemistry library that we can employ not only for hepatocytes but for cells outside the liver. And so that takes an awful lot of work to understand the optimization of that linker -- those linker chemistries. And then the stabilization chemistries up and down the backbone of the RNAi molecule. It's taken us in the field a while to understand how to do that well and to do it in a nontoxic way. We've got the advantage of being a double-stranded piece of RNA. And so there is some stability conferred on the molecule based on that. We have learned how to stabilize these triggers to such an extent that they can withstand metabolism in the endosomes because we know that these [ traffic ] in the endosomes. That's been a big part of making this an acceptable modality. And then finally and maybe most importantly, we have done an awful lot of work on understanding how to design very potent triggers. That's important for hepatocytes, even though we know we can get a relatively large amount of material into hepatocytes, but it's absolutely critical if we're looking to bring RNA interference outside the liver because we know that we'll get advantage in the small amount of material into nonhepatocyte cell types. But within hepatocytes, it's important as well because, look, the more possible sequences that we have at our disposable -- at our disposal, we can be increasingly stringent on our bioinformatics. And we can screen out those sequences that may knock down other genes or that may act as microRNAs. And so I think that that's a -- while sounding a bit esoteric, the ability to design these very potent triggers is an important part of the whole RNAi development time line.

And Chris, maybe just a quick follow-up, and then I do want to go to Joe also on that because he's tackling the code on the large molecule side of RNA. But in terms of speed and your philosophy on being able to have so many high-value targets very quickly from -- once the target is identified to get to lead optimization and candidate selection and IND. Can you just elucidate your secret sauce there?

Sure. So part of the secret sauce is just culture. It's in our DNA. People at Arrowhead know that speed is critical. And so we're always looking for ways to shave days and certainly weeks or months off development time lines. So that's sort of the fluffy part. Second, we are okay taking financial risk. We don't take patient risk. We don't take science risk. But we're okay taking financial risk. And what I mean by that is that we do things in parallel more often than we do them sequentially. The good news is you can shave time off development schedules. The challenge though is that if something fails, then you may have wasted money on steps 1, 2, 3 when step #4 fails. We're okay, again, taking that financial risk because we think the advantage of pushing high-value targets into the clinic quickly is extraordinarily important. And then finally, we work on validated targets. We should not be in the business of coming up with new targets. If we're doing our job right, we are expanding RNA interference into a broad enough number of cell types where there are a number of validated targets that we can go after. So we don't have to redo physiology experience and such. If you go down our pipeline with a possible exception of hepatitis B, if you go down our pipeline, every single one of those targets there is good, but there's good consensus among KOLs that if you can knock down that gene product, a positive phenotype will occur in at least some patient populations. So that allows us to move quickly and I think move efficiently, right, because we don't have to invent biology. We don't have to take biology risk as it relates to targets.

Right, right. So go broad, fail early and then not take too much biology risk early on. So your funnel stays pretty flat. And if it has to condense, it will condense early on. Maybe, Joe, highlight to us how you do things at the mRNA side of stuff. And also maybe touch on your pipeline. For a 7-year-old company, looks pretty impressive given how much stuff you have now entering the clinic. And obviously, OTC is your first clinical stage, even though your vaccine candidate is moving pretty fast also. But it seems like the human proof of concept there is also in parallel moving along. But taking a step, your choice of doing OTC, like you said, CF before, again, different organs. But just kind of highlight your R&D philosophy for us.

Sure. So I think the important sort of the foundation of the company is based on innovation and science and addressing difficult challenges of delivery. There's a lot of parallels to the Arrowhead story for Arcturus. Arrowhead addressed some key challenges of delivery of small molecules to hepatocytes through receptor-mediated ligands like GalNAc. But for large RNA molecules, it requires a lipid-mediated delivery system or a lipid nanoparticle delivery system. And early in the company's history, we addressed some of these significant challenges of safely and effectively delivering large RNA molecules through these lipid nanoparticles. Our LNP technology is called LUNAR, or L-U-N-A-R, and this is -- this delivery technology is different from the others in that the lipids involved in the LUNAR delivery system are not carbon-based or glycerol core -- or glycerol-based lipids. We infuse heteroatoms into the cores of our lipids like oxygen and nitrogen and sulfur. And the chemistry of these lipids is designed such that these lipids degrade rapidly. And this is an important differentiator. To have biodegradable lipid-mediated delivery technology means that we could have increased probability of success with respect to intravenous delivery of messenger RNA and multi-administration. The last thing that anybody wants is accumulating lipids in your organs and tissues through multiple injections, right? And I think everybody understands that. But at Arcturus, we believe we've solved that, and we now have some initial clinical data that -- and that shows that even after a generous dose of messenger RNA with this lipid nanoparticle, this LUNAR technology that after 2 days, we could not -- we can no longer measure lipids in the plasma. So it appears that in our early clinical testing that the LUNAR delivery technology is doing its job and also degrading. And we believe that that's a key difference. The other aspect of innovation, and it kind of draws parallel with what Arrowhead has been doing, is we have the first targeted messenger RNA therapeutic. So not just standard -- like a standard lipid nanoparticle when it is injected intravenously, it ends up in the liver. Just by design of the size and morphology and the surface charge of the delivery system, we can -- it just naturally goes to the liver. But once it gets to the liver, there's LDL receptors on the surface of the hepatocytes that pull the lipid nanoparticle into the cell. But what if someone does not have an LDL receptor or they have less LDL receptors than others? So we -- that presented a challenge for our scientists, and we've discovered a way to find another route of entry into hepatocytes. So we have another program in our pipeline that goes to the liver called LUNAR-CV, where we utilize a different targeting mechanism of getting into these cells. So that was a long way of saying, Mayank, that we have a -- we're built on a culture of innovation of solid science. And we address these challenges of delivery. We take them seriously not only for the liver but also for targeted nanoparticle delivery of large RNA molecules and for inhaled messenger RNA and for intramuscularly dosed to other cell types for vaccine applications.

That's helpful, Joe. And maybe also touch on your STARR technology, just how that came about. And obviously, it has application to vaccine, but is there any broader utility? How do you think about that?

That's an exciting question. We launched our STARR technology. This is S-T-A-R-R. That's the trademark name that you're referring to. It stands for Self-Transcribing And Replicating RNA, and this has initial applications in -- for vaccines. It just means that unlike a standard or a conventional mRNA, when that -- when a standard messenger RNA enters a cell, it expresses and print offs some protein for a couple of days. And then by design, the messenger RNA molecule will degrade. What's different with the STARR technology is that it continues -- it not only expresses the protein, but it involves an RNA-dependent RNA polymerase mechanism that enables a self-replicating and self-transcribing mechanism. It means that instead of expressing the protein for 2 to 3 days, it continues to express the protein for 2 to 3 weeks. So this extended time course, this extended duration of expressing a protein has exciting applications in vaccines, of course, so that you can express 30-fold more protein over an extended period of time. And it has exciting applications there as well. But what you've asked is how can we use the STARR technology, this type of RNA that expresses more protein over an extended period of time. Does this have -- does this open opportunities for other indications? And the short answer is yes. Our scientists are always looking at different ways to apply this new exciting technology.

Right. And one thing that -- at least so far, if you look at from a layman standpoint, the case use of RNA, maybe RNAi or RNA interference, that durability, for example, with inclisiran, that was one of the very attractive features, once every 6 months dosing for the knockdown of PCSK9 in that case. So maybe, Chris, coming back to you. I think it would be good to focus on specific programs. Maybe -- I think you touched on hep B. That could be a good start. And I understand your partner there is J&J and driving a lot of that. But could you just give us an update on where we are? And really about the off-treatment follow-up, that is important to understand functional cure there. Just would be helpful to hear your thoughts. And then we can get into AATD as, obviously, the next exciting program that has had data recently and will have relevance at AASLD.

Sure. So as you mentioned, our HBV program has been partnered with J&J. And I think the take-home message with what we saw there is that we were able to study the drug candidate after just 3 doses. At the time of the partnership, we didn't have tox coverage to go beyond 3 doses. Of course, we and J&J do now, but we were just able to integrate 3 doses -- 3 monthly doses. And what we saw, I think, was stunning. Everything that we were able to measure was substantially decreased. The drug candidate was designed to knock down all of the HBV transcripts. We thought that was important from a life cycle standpoint, to disrupt the life cycle of the virus but also, of course, to hopefully initiate this immune reconstitution and enable the body to control the virus. That was the idea. And those early data sure looked promising. For instance, people talk about s-antigen a lot with respect to HBV. And again, I'll talk about s-antigen right now, but we were knocking down everything that we could measure. With s-antigen, as I recall, 100% of the patients that we treated had over a log of reduction of s-antigen after just 3 doses. What's important about that also is that there's no evidence that we are done seeing knockdown. So had we been able to give dose 4, 5, 6, 7 and on, there's no evidence that we had started to plateau on that knockdown. So it's going to be really interesting to see J&J's data over time to see how deeply they are able to knock down the transcripts. So that's important. Second, and really sort of the flip side of that coin is if you look at s-antigen, people think that there is something important about this level of 100 IU of circulating s-antigen. There have been really interesting studies done on stopping NUC therapy when patients get below 100 IU of s-antigen. And it appears that they have a better chance of reaching a functional cure if they can get s below 100 and stop therapy. As I recall, something -- over 80% of the patients that we treated had s-antigen below 100 IU after just 3 doses. And again, I don't know what that percentage would have been if we could have given 6 or 12 doses. I think it would have been substantially higher even. So that's really exciting. So what J&J is doing and why they are the perfect partner, I think, for hepatitis B is that they've gone out and started a series of combination studies. And they've moved very aggressively. They started off with REEF-1 and REEF-2. REEF-1, I believe, is about 450 patients. REEF-2 is, I think, 120-or-so patients. That is a triple combo therapy of NUCs plus RNAi plus one of their capsid inhibitors. They have also expanded that then to go into a delta virus study as well as a quad study that includes peginterferon. And so it's going to be fascinating to see how those data roll out. Again, we've been really happy with J&J's commitment, with J&J's speed. They moved so rapidly into these very large studies internationally. We think that we were the first RNAi company in HBV, and I think that they have just expanded that lead given what they've done. I don't expect -- I can't, of course, give any guidance on when they're going to disclose any of these data. I don't expect any data this year. These are large studies. We'll see going forward when they can release some of these data, but we're certainly looking forward to seeing them.

Right. And on design, it's a 48-week treatment, and then I believe the first follow-up is 48 weeks or 96 weeks. Is that like from a functional cure sense?

Right, right. So it will be a year of therapy and then 6 months of follow-up, although REEF-2 has stopping criteria where when certain parameters are met, patients come off drug or all drugs. That's going to be really interesting to watch. And that rips on some of the interesting data coming out of Europe on these Nuc-Stop studies.

Great. Then on -- let's talk about the most exciting thing, at least from a recent news flow standpoint, the data that you have from 4 subjects, alpha-1 antitrypsin, the liver disease. So what did we learn? Obviously, on the heels of that, you have the Takeda partnership of $1 billion announced. And then we also saw some competitor development in the meanwhile after that deal. So just can you walk us through that activity and also importantly, what we will see incrementally at AASLD in a couple of weeks?

Sure. So let me see if I can be brief on this. So let's start with the biology of the disease. So this is alpha-1 antitrypsin deficiency. It involves the misfolding of the alpha-1 antitrypsin protein such that it's not properly exported from hepatocytes in these patients. We think that there's 120-or-so thousand of these patients in the U.S., probably a bit more in Europe. But it leads to really 2 diseases. The first one is pulmonary and people have known about this for quite some time. Because the protein is misfolded and it's not properly exported, you see a deficiency in the circulation, and therefore, lungs are susceptible to inflation. And so people can have COPD. That can be treated with enzyme replacement therapy and also, frankly, can be treated with the change of behavior. As people are smoking less and as people are limiting their exposure to environmental pollutants, you're starting to see far less lung disease. And frankly, I think it's going to tip the scales. And I think that increasingly, people will view this as primarily a liver disease and secondarily a lung disease. So it leads to liver disease. Again, I mentioned that the protein is misfolded and not properly exported, and so then it becomes a storage disease in the liver. Alpha-1 antitrypsin is the second most abundant protein in the body. The liver makes about 2 grams a day. So you can imagine. The hepatocytes are making a huge amount of protein. And it's not getting out of hepatocytes properly, and so that can be inflammatory over time. And again, as people are living longer because they're not smoking and the like, people are now living long enough to start to die of liver disease. And so that's becoming an increasing focus area for patient advocacy groups. So we view that as a no-brainer. We're good at knocking down proteins that are produced in the liver. And the biology here is crystal clear. The overproduction of this disease-causing protein is an important part of the disease. And so we did a number of animal studies in disease models where we showed that we can turn off that protein and that it has benefits, whether you start therapy early in life of these animals, these transgenic animals, in the middle of the life of these animals or towards the end of like these animals. It was helpful at all levels. And so that gave us good confidence and made us quite excited to get into clinic. So we've gotten into the clinic. We're right now on the second generation of our candidates. And our Phase I/II data were quite good. We saw really good reduction in production of the protein, in fact, below the level of quantitation for most patients. We then went into a Phase II/III study that is still blinded as well as an open-label Phase II study where we are looking at patients, and we are taking paired biopsies at various time points, right? We take a biopsy before treatment and then biopsy after 6 months, 12 months, 18 months and 24 months. The -- we have just started to see some of the data from the 6-month cohort. And it stunned us. It absolutely stunned us. We expected to see good reduction of monomer, so-called monomer. This is the protein that's produced in the liver. But we know that over time, that protein polymerizes to form these large globules, and that becomes the disease-causing structure. That becomes inflammatory over time. So we expected to see good reduction in monomer. We did not expect to see probably any reduction in polymer because it wasn't clear how that's metabolized. And we thought the liver could take certainly more than 6 months to start to metabolize that. It turns out we were wrong. After just 6 months, we saw a substantial reduction in polymer. We saw substantial reduction in overall AAT burden. We saw substantial improvement in LFTs in patients. And also, we saw improvement in FibroScan. This is -- we take that to suggest that we are seeing improvement in fibrosis on a global scale, if you will, throughout the entire liver rather than relying on a single -- on a biopsy point, which we know can be noisy given the heterogeneity of fibrosis. So we took all those to be very positive signals. And it caused us to have even more confidence in this program and got us thinking that this -- that we could potentially shorten our regulatory pathway and maybe even simplify it to look at different approvable endpoints. And so that's where we are right now. AASLD, we will have a full data set on those 4 patients. And so you can see what happened on a patient-by-patient basis. We just top line some of those data in a press release recently. And so the story will not change, but you'll have more information to better understand what we were seeing at AASLD.

And you learned about this grading score, right, like how you're assessing, which is kind of like a NASH CRN score but slightly different, right, of how fibrosis [ is worsening ]? And you're saying you'll see that at the patient level. Is that right?

So we will not have -- so that scoring system is still in development in concert with the FDA. And so we won't be reporting on any of those changes per se. We will be reporting on other endpoints, although that's an important point to bring up. What we discussed with the FDA a couple of years ago was developing this 10-point grading scale, as you say, analogous to the NASH grading scale, and then look at the histological changes during treatment. We are now rethinking that as an endpoint. And we will have discussions with the FDA about potentially using surrogate endpoints. We think that, that will be a cleaner study...

Yes. Because the effect size is just dramatical here. So why bother doing such a -- something that is not validated and take forever when you're seeing so many disease markers moving in the right direction in a profound way and with the effect size we're talking about here? Okay. That's great. So maybe on the other side, Joe, with your OTC program, obviously, you are trying to express that protein that is not working properly. So can you talk -- can you switch gears and talk about the -- how you -- what are your understanding from preclinical studies about the OTC program and then about the disease a little bit and then how far along we are with the program and what should we see next?

Sure. Sure. Thanks. Before I jump into OTC, I just want to provide an additional comment with respect to our J&J collaboration as well. We work with the same infectious disease. And they speak very -- they do speak very highly of your program. So I just wanted to give you that feedback.

Appreciate that.

But how they work with us is in large RNA. And what Chris also understands is that hepatitis B is a complex disease, and there are definitely going to be combination treatments evaluated for both small RNA approaches, small molecule approaches and large RNA approaches, including gene editing RNA. So if there's a gene editing RNA program for hepatitis B, we'll likely be intimately involved in that, and we've got a great relationship with them as well. So I just wanted to touch on that. Now shifting gears to OTC deficiency. Just this audience is a rare liver disease audience, so I won't go into much detail here. But ornithine transcarbamylase deficiency is a urea cycle disorder. Ornithine transcarbamylase is an enzyme in that urea cycle. And if you're missing this enzyme or it's dysfunctional in any way, it leads to elevated ammonia in the blood. And the ammonia crosses the blood brain barrier, and that's not good. That's a very serious disease. And all these patients, they want the same thing. They all want a healthy, normal, functional ornithine transcarbamylase in their urea cycle. And so a simple solution is to get a messenger RNA into the liver and have it printed off and express a healthy normal OTC enzyme. Now the urea cycle's in the periportal portion of the liver however. And that's been a unique challenge for different types of delivery technologies. And the LUNAR delivery technology generously delivers messenger RNA to periportal hepatocytes, and we've shown that preclinically. So that's exciting. And our preclinical data has been very convincing that we can genetically engineer animals without ornithine transcarbamylase, without this enzyme. And then we subject them to a high protein diet. And unfortunately, these genetically engineered diseased animals will all die in these studies. But when they're treated with our LUNAR-OTC program, we simply replace what's missing, and these animals are happy and spinning in a wheel and completely normal. And so we're hoping to replicate this preclinical data in our clinical studies that are ongoing. With respect to our clinical studies, we initiated a clinical trial in New Zealand in June. And this is a double-blind, randomized, placebo-controlled trial with healthy adult volunteers. And it's been ongoing now for several months, and we've since dose-escalated. We've recently reported that we've completed a 0.3 milligram per kilogram dose. That's a generous amount of messenger RNA with our LUNAR delivery technology, and all of the adverse events were mild or moderate. So no issues there. And our favorite -- I mean our PK profile was also very promising. I touched on this earlier. But there was no detectable lipids after 48 hours following the drug administration. And there was no steroid premedication that you've seen with other lipid nanoparticle treatments of RNA. And this is significant because, of course, this is a multi-dose therapeutic, meaning this will be chronically dosed and accumulating lipids have been a concern for this field, and we believe we've solved that. So we're excited to live into that data as it continues to mature. The final cohort of 0.4 mg per kg is to be completed this quarter, and we plan to be reporting on that here shortly. And then with respect to...

And...

Yes, go ahead.

Go ahead. I was just going to say, so can you talk through the pivot from healthy -- maybe you're going there, between healthy subjects now to the stable OTC patients in the U.S. study.

Yes. So this quarter, we plan to begin -- and we had a -- some COVID restrictions earlier this year, but we think that we've worked our way through that. And now we'll be able to initiate 12 -- or initiate an OTC-deficient patient study, up to 3 dose levels there, and we want to begin that this quarter. And we're on track there as well to initiate dosing here in the United States in a Phase Ib clinical trial. Again, the primary goal of this is just to identify the safest doses to take forward into multi-dose clinical trials. We want to -- the primary endpoints are just safety and tolerability, and the secondary endpoints are pharmacokinetic related. And the biomarkers for this disease, there's plenty of them. Sometimes it's challenging in rare diseases when there isn't a biomarker. But for OTC deficiency, of course, we can measure not only urea itself because it's a urea cycle disorder but also plasma ammonia levels and uronic acid in the urine is an efficient biomarker as well in addition to just plasma OTC enzyme activity. So there's plenty of biomarkers for us to measure. So we hope to achieve some strong biological proof of concept in the coming months and quarters.

Right. Including to some extent, not so much from the healthy subjects but from the stable OTC subjects, we can definitely have this biomarker data, right?

The stability of -- could you restate the question?

Sorry. From the healthy volunteer study, probably there's not a whole lot of biomarker data we'll get from that. You'll probably have to wait for the patient data, right? Even -- I mean these are stable OTC patients. So...

That is correct, yes.

What are the sort of biomarkers you're thinking about that we can -- can we learn earlier -- like for example, in case of RNAi, you've seen this profound effect size. With the mRNA, I know we are going on the opposite direction. So I'm just curious if any of the biomarkers you expect to be more prospectively telling you of the drug working in a pronounced way.

Of course. With the healthy volunteers, they have a healthy urea cycle. So by having additional ornithine transcarbamylase to an already functional normal, healthy urea cycle, we don't anticipate any differences there. However, we are measuring for it. But it's not anticipated. I think where we'll see some more exciting data is with respect to -- biomarker-related data will be in patients, of course. That's where we can find the ammonia levels and measure for those. And also uronic acid in the urine, I think, will be very helpful to prove out the concept and cleanly. So it's an exciting quarter for us. And I just want to acknowledge that our scientists are -- this is an exciting program because the liver is a huge opportunity for messenger RNA therapeutics. And it's been a significant challenge for decades for messenger RNA because safely and effectively delivering these large RNA molecules to hepatocytes has just been an extraordinary challenge, and I think we've solved it. So we look forward to the data.

And Joe, correct me if I'm wrong. You do have your partnerships. You talked about the J&J one for hep B, but you also have the Takeda one for NASH. So you're definitely also thinking about those larger prevalence diseases but maybe taking a more conservative or a partnership route. Is that fair?

Yes. The large patient population diseases are -- we've been partnering those with J&J for hepatitis B, as we talked recently, and NASH for -- with Takeda. And they have much larger resources and capabilities around developing these compounds, of course, commercializing them. But with respect to rare diseases, we've been keeping those internally, generally speaking. So it's just a...

But I think you've touched on the LDL receptor. I think the earlier-stage LUNAR-CV program, which -- again, earlier stage. But I think that's another kind of area where I can go back to Chris, where he's developing 2 exciting targets, ANGPTL3 and APOC3. So Chris, maybe give us an update on -- both of those have huge potential, but the path to getting to market could be different depending on which population you decide to prosecute first and then the larger indication may be later. And also touch on -- I think you have some multi-dose data, but you may have some more data at AHA. So curious if you can give us an update on your 2 programs, ANGPTL3 and APOC3, that would be great.

Sure. I'll try to be quick. I know we only have a few more minutes. We're excited about both those programs. Look, what we have shown in both healthy volunteers and we also top lined some data in patients, we showed that ARO-APOC3 is capable of substantial reduction of circulating triglycerides as well as substantial increases in HDL. But we're excited about both those things. ARO-ANG3 is a broader drug, I think, what we've shown in both healthy volunteers and in some patient populations. We see lowering of triglycerides as well as lowering of LDL. And importantly, we're lowering LDL in a non-LDL receptor-mediated fashion. And so we could get additional reductions of LDL on top of statins, even on top of PCSK9 inhibitors. So then the question is there is clear overlap here, how do we position both these drugs or drug candidates. And we believe that APOC3 is -- it could be a very powerful drug for severe hypertriglyceridemics. And so these are the patients with triglycerides above 500. We think there's around 4 million of those in the U.S., probably a similar number in Europe. And we think we have something that is just unmatched in its ability to lower triglycerides. We think the approval endpoints there are not a cardiovascular outcome trial but rather simply lowering triglycerides. If history is a guide, we think that's the case. So we have this interesting possibility of a relatively speaking, short and direct regulatory pathway to a fairly large market. ARO-ANG3 is a bit different. That will be focused on mixed dyslipidemia patients. And so these are folks with LDL not at goal and elevated triglycerides. And so these will be patients with maybe above 150 triglycerides, above 70 or 100 LDL. It's a broad population. We think maybe there's 40 million of those in the United States. The challenge here is that, that will require, we believe, a cardiovascular outcome trial. We are having to do it however. We think at the end of that study, we have a real drug. And it's differentiated compared to others. And so we're excited about both these programs. We're moving as quickly as we can on them. I expect to be in 2 large-ish Phase IIb studies in the first half of next year as well as a pivotal study for ARO-APOC3 in the first half of next year against a small orphan population.

Excellent. And would you comment on what data set would inform you that might be coming? Or do you think it's really now a strategic choice, which population, getting the regulatory guidance by the end of the year and then get those studies started? Is that basically what's going on? Or is there any data that's in flow?

Yes. So there'll be more data at AHA. Those data will not change the story. The story is that both of these -- both these drug candidates appear to be consistent reducers of their respective targets. So that's all good news. We'll have some more data across different patient populations. And so that's helpful. But the basic story is -- should be unchanged. And so we're ready to go. We need to understand better what the right dose and what the right dosing schedule is going to be for APOC3. It could be as infrequent as once every 6 months. For ANG3, it could be that infrequent, but it feels probably more like every 3 to 4 months, I think. But we'll find that out next year. It will also be interesting to see how this -- how both of these might affect liver fat in various populations, maybe even some metabolic measures, maybe insulin sensitivity in some patient populations. And so we'll learn that next year, but that's not slowing us down. Again, we're moving as quickly as we can into pivotal studies because we think these are important drugs. And we are the only RNAi player in both these spaces, and I think that's important.

Right. And for the ANG3, you're doing both, right, triglycerides and LDL. And LDL is -- I think in the last update, it was north of [ 50% ]. Have you -- in your updated data, would you be able to give some color around how many subjects may have been on background PCSK9 therapy or any of that kind of information from a patient level standpoint?

Yes, yes. So I'm [ flat a little bit ] here. We have those data. I believe that those will -- that at least some of those data will make it into the AHA data. We see good reduction in LDL and triglycerides for ANG3 in healthy volunteers. We see even better reduction in those patients with elevated LDL and triglycerides. And so we're excited about those data. There's a number of questions that still exist about where we position ANG3. Is it primary prevention or secondary prevention? Is it upstream or downstream with PCSK9 inhibitors? We'll find that out as we -- we'll suss that out as we generate more data. But I think whatever the answer is just -- it really feels like to us at the end of regulatory pathway, we've got a real drug.

So that's the key objective of the Phase IIb and maybe testing a couple of doses and frequency of those doses, things like that. That's the key objective you're trying to address in the Phase IIb study next year. Is that fair?

Yes, that's correct. And also just to beef up the safety database, we've been in, I don't know, over 100 patients or human subjects for ANG3. And so that will probably be a few hundred patients in Phase IIb study to help to bulk that up a bit also.

Excellent. One last thing. I know we're out of time. Joe, just quickly -- I think, Chris, we covered your catalyst profile, and maybe we'll have to do a lung specific event later when we talk about the CF program that you have, Chris. And then, Joe, also you have the other approach. But particularly, Joe, for you, the catalyst profile, how does that look like in this quarter and next quarter? And maybe just touch on the vaccine program because that's been the most near term.

Yes. Sure. So we're going to be sharing clinical data this quarter for our COVID-19 vaccine, and that's highly anticipated. In addition to that, we're going to be sharing additional clinical data pertaining to our OTC program or ornithine transcarbamylase deficiency program. We have a development candidate selection process ongoing for our CF program that we would like to update the markets about as well. So those would be from a data perspective. Of course, we're in conversations with different groups, entities and government agencies and countries with respect to our COVID-19 vaccine and the present pandemic. So there's always opportunities for announcements there.

Yes. Awesome. Awesome. We are out of time. Again, there's so much more we could cover. But let's save it for the next conversation. Chris, Joe, really appreciate you joining us. And sorry, Pad, I know Pad and Steven are also on the call. But next time we'll get to them also. But thank you, everyone, for doing this, and good luck with all the updates that are coming up.

Yes. Thanks.

Thanks very much.