Q4 2023 Arcturus Therapeutics Holdings Inc Earnings Call
Participants
Neda Safarzadeh; VP of IR, Public Relations, and Marketing; Arcturus Therapeutics Holdings, Inc.
Joe Payne; President and CEO; Arcturus Therapeutics Holdings, Inc.
Andrew Sassine; CFO; Arcturus Therapeutics Holdings, Inc.
Padmanabh Chivukula; Chief Operating Officer, Chief Scientific Officer; Arcturus Therapeutics Holdings Inc
Evan Wang; Analyst; Guggenheim Securities, LLC
Whitney Ijem; Analyst; Canaccord Genuity LLC
Myles Minter; Analyst; William Blair & Company
Yanan Zhu; Analyst; Wells Fargo Securities, LLC
Yigal Nochomovitz; Analyst; Citi Group, Inc.
Pete Stavropoulos; Analyst; Cantor Fitzgerald LP
Thomas Yip; Analyst; H.C. Wainwright & Co., LLC
Yale Jen; Analyst; Laidlaw & Company
Presentation
Operator
Greetings, and welcome to Arcturus Therapeutics Fourth Quarter and Full Year 2023 conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Neda Safarzadeh, Vice President, Head of Investor Relations, Public Relations and Marketing. Thank you. You may now begin.
Neda Safarzadeh
Thank you, operator. Good afternoon, and welcome to Arcturus Therapeutics quarterly financial update and pipeline progress call. today's call will be led by Joe Payne, our President and CEO; and Andrew Sassine, our CFO, Padmanabh 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 and involve known and unknown risks, uncertainties and assumptions that may cause actual results, performance and achievements to differ materially from those expressed or implied by the 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. I'm curious specifically disclaims any obligation to update such statements and with that. I will now turn the call over to Joe Payne.
Joe Payne
It's good to be with you again, everybody, and we look forward to providing our updates today on our quarterly investor call. I will begin my remarks with an update on progress regarding our co state COVID-19 vaccine program following favorable clinical results from several coastal studies, including a 16,000 subject efficacy study performed in Vietnam as well as a Phase three COVID-19 booster trial in Japan, Japan's Ministry of Health, Labor and Welfare MHLW granted approval for Costa. Dave, a self-amplifying mRNA COVID-19 vaccine for primary vaccination and booster for adults 18 years and older. This approval marks a historic milestone as the first self-amplifying mRNA product in the world to be registered and we are increasingly confident about the future applications of our now proven innovative STARR self-amplifying messenger RNA vaccine platform.
We look forward to expanding our vaccine platform alongside our global exclusive partner CSL and CSL's partner in Japan, Meiji Seika Pharma, Costain Japan approval is further supported by an active controlled Phase three boosters vaccine study conducted in 11 sites in Japan. The study included healthy adults initially immunized with two doses of an mRNA vaccine, whether that was commonality or spike backs and then a third dose of commonality. The study was conducted in partnership with CSL's partner, Meiji Seika Pharma. This is a global health company based in Japan. New analysis at six months post vaccination shows that cause Steve induces a broader and more durable immune response compared to common equity for both the original Wuhan strain and the ARM Akron PA four slash five variant and and an advantage in antibody persistence posting results were achieved with one six.
The dose of commonality based on the totality of clinical data collected to date, Arcturus anticipates that the advantages of self-amplifying mRNA should provide superior protective efficacy against COVID-19 disease caused by future emerging variants of Star COV to the coast. A booster study is ongoing and will continue to collect safety data and assess durability of the immune response and participants up to 12 months post vaccination. We are very pleased to report that Costain remains on track to launch in Japan this year, Meiji Seika Pharma as the party responsible for distributing the vaccine in Japan will be providing updates and further details pertaining to the launch of Dave in official press releases in April, the WHO is expected to announce the updated COVID variant in due course, manufacturing runs and the subsequent distribution of coast. Dave in Japan will follow.
The commercial case for Costain is becoming clear, a significantly stronger and broader immune responses. Preferred DACIPE. and other regulatory agencies are presently recommending to boosters each year for the approved conventional mRNA vaccines. Thus, it's very apparent that there's a clear need for a more durable once a year. Covid vaccine and Costain has the potential to address this important global health need. Covid is here to stay and the longer lasting cause Dave is also here to stay.
So moving on to ARCT. two one three 8 million or flu program. This is our quadrivalent self-amplifying mRNA vaccine candidate for seasonal influenza. I'm pleased to announce that the Company, along with our partner, CSL, initiated a Phase one dose finding study in January 2024, with the intention of assessing the dose response of the investigational vaccine and comparing the safety and immunogenicity with the licensed standard of care. Overall, 132 healthy individuals, which includes 84 younger adults and 48 older adults are planned to be recruited in this Phase one clinical study.
I'm now excited to announce that Arcturus has initiated new vaccine discovery programs for Lyme disease and gonorrhea. This decision is supported by the clinical and regulatory validation of LUNAR and Star technologies provided by our first regulatory approval. Of course, Dave, our technologies are ideally suited for these infectious disease vaccine opportunities. Our validated vaccine platform is now being applied to seven global infectious diseases, five with our partner, CSL secures and two wholly owned vaccine discovery programs, Lyme disease and gonorrhea. The total estimated global market opportunity for these new vaccine discovery programs exceeds 4 billion.
I'll now move on to ARCT. eight 10. Our messenger RNA therapeutic candidate for ornithine transcarbamylase or OTC deficiency. This investigational medicine is designed to functionally replace the deficient or missing OTC. enzyme in the liver, restoring urea cycle activity and preventing metabolic crises that cause neurological damage ARCT. eight 10 could reduce the need for ammonia scavengers and ease for the rigid dietary protein restrictions that OTC patients face today, thus improving the quality of life for those with this disease, our Phase 1b single ascending dose study in the United States has completed enrollment and dosing of all cohorts with 16 patients.
The Phase two study in the United Kingdom and Europe is enrolling up to 24 adolescents and adults with OTC deficiency. The ongoing study is evaluating two dose levels and includes up to six biweekly administrations for each participant. The Company expects to share Phase two interim study data by the end of Q2 2024. Moving now to our ARCTO. 32 program ARCTO. 32 is in an inhaled messenger RNA therapeutic candidate for cystic fibrosis. Formulated with Arcturus is LUNAR delivery technology. This investigational medicine is designed to functionally replace the deficient or missing CFTR transporter in the lung and thus restoring the balance of salt and water.
We have now completed dosing in a Phase one study in New Zealand of 32 healthy subjects across four ascending single dose cohorts. In addition, we have dosed patients in a Phase Ib clinical study in New Zealand. The Phase 1b study is designed to enroll up to eight adults with cystic fibrosis with each participant receiving two administrations of ARCT. or 32. We remain on track to share interim Phase Ib data in Q2 2024. In November 2023 ARCTO. 32 received orphan drug designation from the FDA. That designation provides significant incentives to promote the development of the drug, including the potential for market exclusivity for seven years upon FDA approval, eligibility for tax credits for qualified clinical trials, waiver of Prescription Drug User Fee Act.
Application fee and eligibility to receive regulatory guidance from the FDA and the design of an overall drug development plan in February 2020 for ARCTO. 32 received orphan medicinal product designation from the European Commission, which will give Arcturus access to protocol assistance, centralized authorization process fee reductions and 10 years of market exclusivity. And with that, I'll now pass the call to Andrew.
Andrew Sassine
Thank you, Joe, and good afternoon, everyone. The press release issued earlier today includes financial statements for the fourth quarter and fiscal year ending December 31st, 2023, and provides a summary and analysis of year over year financial results. Please also reference our Form 10 K, which will be filed early next week for more details on the financial performance.
Before we begin the financial review, I wanted to give you some highlights from our recent trip to Tokyo where Joe pain patch. You have a cooler and I met with the executive teams from Meiji Seika Pharma and actually our JV partner in our catalyst manufacturing venture. I am happy to report that everyone was very excited about the approval of Costa in Japan and the opportunity to manufacture the world's first self-amplifying mRNA vaccine in Japan under the MAG. brand. All of our partners are working very closely with the Japanese and local government officials to prepare for the launch of Costain in the second half of 2024. We are deeply grateful to the Japanese government for their financial support of Costain and our manufacturing partner R-CALIF.
Going forward, official from Meiji Seika Pharma will provide regular updates on the launch of Costain in official press releases this year. I will now provide a quick summary of our financial results. We reported revenues of $169.9 million during 2023 compared to revenues of $206 million during 2022. Revenue recognized from CSL in 2023 was $157.4 million, which slightly increased by $3 million compared to 2022. We also made significant progress with the Barda pandemic flu vaccine agreement that led to an increase in revenue of $8.8 million. The majority of the decrease in FY 23 revenue were driven by the discontinuation of our collaboration agreements with them Biocare and J&J and 2022.
In the fourth quarter of 2023, Arcturus achieved $29.2 million in milestones from CSL milestone payments will continue to be used to fund development activity for the LUNAR COVID-19 vaccine and self-amplifying mRNA flu programs with CSL. Total operating expenses for the year ended December 31st, 2023, with $245 million compared with $193.8 million for the year ended December 31st, 2022. For the three months ended December 31st, 2023, operating expenses were $49.1 million compared with $38.8 million for the three months ended December 31st, 2022. I want to highlight that total operating expenses declined by $15.4 million sequentially for the third fiscal quarter of 2023 due to lower manufacturing expenses.
Our research and development expenses consist primarily of external manufacturing costs in vivo research studies and clinical trial performed by contract research organization, clinical and regulatory consultants, personnel related expenses, facility related expenses and laboratory supplies related to conducting R&D activities research and development expenses were $192.1 million for the year ended December 31st, 2023, compared to $147.8 million for the year ended December 31st, 2022. The increase in research and development expenses were attributable to our continued efforts to progress the CSL and barter programs as well as our internal OTC and cystic fibrosis program. Additionally, we have increased investments in early-stage and discovery technologies.
The company initiated pre-clinical research related to its Lyme disease and gonorrhea vaccine discovery program. Gna expenses were $52.9 million during 2023 compared with $46.1 million in 2022. The increase resulted primarily from personnel expenses due to increased headcount and salaries, increased travel and consulting expenses as well as an increased rent expense associated with the new headquarters facility in San Diego. We anticipate total G&A expenses for 2024, we'll remain consistent with 2023 totals. For the year ended December 31st, 2023, Arcturus reported a net loss of approximately $26.6 million or $1 per diluted share compared with net income of $9.3 million $0.35 per diluted share for the year ended December 31st, 2022.
For the three months ended December 31st, 2023, we reported a net loss of approximately $8.6 million or $0.32 per diluted share compared with a net income of $117.4 million or $4.33 per diluted share for the three months ended December 31st, 2022, prior year quarter included a $200 million upfront payment from our CSL collaboration, cash, cash equivalents and restricted cash were $348.9 million as of December 31st, 2023 and $394 million as of December 31st, 2022. Since the beginning of our deal with CSL in November 2022, we have achieved approximately $396 million in upfront payments and milestones as of December 31st, 2023.
We expect to continue to receive future milestone payments from CSL that will support the ongoing development of the COVID and flu programs and three additional vaccine programs by CSL. Finally, I'm happy to report the expected cash runway now extends through the first quarter of 2027 based on the current pipeline and program. I would also like to highlight that total shares outstanding on a fully diluted basis have remained relatively consistent for three years in a row at approximately 26.6 million shares. This demonstrates management's commitment to continually improving shareholder value as we execute our strategic business plan.
In summary, we believe the Company remains in a strong financial position. It has the resources to achieve multiple near-term value-creating milestones for the vaccine and therapeutic program. Furthermore, with the Costain product approval in December in Japan. We look forward to beginning to report potential commercial sales in the next few years. I will now pass the call back to Joe.
Joe Payne
Thanks, Andrew. We continue to make excellent progress, and we are incredibly excited about our first product approval with Costain. This achievement is an important validation of our mRNA technology and delivery platform. With that, let's turn the time over to the operator for questions.
Question and Answer Session
Operator
(Operator Instructions) Evan Wang, Guggenheim Securities, LLC.
Evan Wang
Great. Thanks for taking the question guys, too for me first, it was encouraging to see the ACA fee recognition on revaccination of elderly last week. I'm wondering if we've seen similar recommendations internationally and additionally, what kind of regulatory feedback you've gotten on, how a much more durable vaccine may be implemented if you could talk both FDA internationally and markets like Japan in Europe and second, and looking forward to some updates in 2Q from OTC and CF as we're getting closer to data. Wondering if you can share how many patients we can expect from each trial? Thanks.
Joe Payne
It's a seventh of Yes, first time I can address the question about the recent recommendations by ECIP. We're very happy to see that they recommended regular COVID vaccination, especially in the elderly and the fact that they've recommended two boosters annually. We, of course, because we're approved in Japan, we wanted to provide some updated new information to the people on this call that they may not appreciate, but Japan government has also now communicated that starting April 2024, that routine COVID-19 vaccinations for the elderly will be recommended.
And if you just go to the MHLW. website, another new update that they recommend twice a year vaccination for the elderly, but also and I'll quote from the at the actual website in Japan that people age 65 and older, those with underlying medical conditions and health care workers. So each of these three sets of people will be vaccinated twice a year. While all of the others will be vaccinated once a year, the vaccinations remain free of charge as well, and that's clearly communicated.
So these developments, of course, are very good news for us because we're addressing a need of durability for the field. But also that there's elevated support for the for those the elderly and those with underlying medical conditions and health care workers in Japan and that their vaccinations remain free of charge, which of course, is going to be helpful to us commercially. With respect to Europe, there's been no second vaccination recommendation for the elderly there by the by the European CDC, but that those discussions are ongoing, and we'll be looking for those updates shortly.
And now you also asked additional questions about just enrollment processes for the the two therapeutic programs corrective and we remain on track. That's that's something that we want to. We clearly communicate that we're on track to communicate some interim data for Phase Ib in our CF program, and that's recruiting all patients, no placebo in that group, six to eight patients is what we're estimating. And we're still guiding interim data to be shared in the second quarter. So that's a relatively near term milestone. And likewise, we maintain our guidance on the OTC. program for the end of Q2. With respect to specific updates and specific numbers, we haven't provided those details. Thank you for your questions.
Operator
[Joe], Piper Sandler.
And good afternoon, team. This is Joe on for Yas contract. Taking our questions we have to first would you say is the rate-limiting step for orders in Japan and for cystic fibrosis and RGC? What type of data should we expect the top line and what would you say like the bar for success?
Joe Payne
Sure. I can speak to the data for the top line, the top line data for the therapeutic programs, but the first question, I'll turn the time over to Andy with respect to what's the what's rate limiting on getting orders in Japan, Andy, and I think we articulated earlier in the call that, you know, we had some very positive meeting with all the majors, take a pharma official and executives.
And then I think, you know, they're going to be driving the bus here and we'll be announcing in making press releases, you know, as appropriate. So please stay tuned and come in and be patient. That is certainly, you know, the encouragement was kind of articulated by Joe, just now that and this is kind of a recent development that the government is going to continue to financially support from the population over 65 which is about 32 to 36 million people, right?
And that's not including the people that have compromised immune issues and so forth, so or chronic illnesses. So you're looking at, you know that you multiply that by two, somewhere in the vicinity of, you know, 60 plus million dollars potential doses, right? If everyone gets two shots to boosters, right of conventional mRNA. So we're just kind of reiterating what's in the public domain, what's available in MEG. We'll certainly give you more concrete information as soon as they can.
Joe Payne
So stay tuned and then pertaining to the top-line data for CF and OTC. for OTC. We're looking for biomarkers to change in these patients, specifically ammonia to be adjusted to at or near normal levels. Many of these patients are on ammonia scavengers. So if that is indeed the case, there's other biomarkers that we can evaluate and measure, including erratic acid in urine and glutamate has another amino acid impacted by the urea cycle. And then OTC. itself can be measured.
So plenty of biomarkers to measure in these trials in terms of top line data with respect to the CF program that we're going to be looking primarily at safety for Phase Ib. These are the first time that this therapeutic has been administered as two administrations in actual patients. And so it will be very meaningful for us to establish some sort of track record of safety and tolerability in a spectrum of CF patients anything to add to that pad for other program?
You know, I think for the CF, I think what we're going to be looking at is mainly as a safety of your rights?
Joe Payne
Well, it's going to be looking at various respiratory function to making sure that those that this dose is well tolerated in a patient population. So I think we will be happy to see some of those results. And then with regard to OTC. We just obviously want to reiterate that the Phase Ib that we we talked about was primarily a safety study. So we will be presenting that data at a conference coming up also. So thanks.
Thank you so much for the detail.
Operator
Whitney Ijem, Canaccord Genuity.
Whitney Ijem
Hey, guys. Congrats on all the progress. First one from me is on COVID in Japan. I think you stand to benefit from from orders there kind of on two fronts, both from a our revenue sharing perspective as well as our catalyst. So can you help us understand and how those two will flow through your P&L or balance sheet when the orders and the manufacturing do start? So yes, with respect to revenue sharing and any sort of additional financial elements due to the our catalyst joint venture. And Andy, do you want to address those?
Joe Payne
Yes. Certainly, Whitney, thanks for the question. We typically have not provided detailed with respect to revenue sharing opportunity, but if you look at the CSL and Arcturus, you know, 60 40 joint gross profit split and you can tried to extrapolate what would a three headed or three Musketeers type of partnership. Look like. So it'll obviously be very significant and meaningful for us. And we're excited about the partnership to be working with all three people in Japan, especially may decent. They're the number one flu vaccine company in Japan and CSL, who you know, number two in the world. So you're dealing with two very strong commercial powerhouses in their respective categories. So we're kind of fortunate with respect to that end.
And we're pretty excited. Of course, having it being made in Japan is kind of something that the government and the people in Japan are very proud of and it's going to be under the major brand name. So keep in mind that this is going to be a Japanese vaccine, and that's what I think excites and then the government. And we're very fortunate that they gave us this opportunity and to compare our vaccine to Pfizer night.
And if we didn't have that opportunity, we would not have this kind of data to share with the world and the fact that they financially supported the factory. So the bet on the right horse, and I think it's going to be an exciting future, and European approval is coming this year, too. So we're highly excited about that too and anticipating it as well.
So there's a lot on the plate and hopefully that gives you some perspective. But unfortunately, we can't really go into too many details at this point in time, but hopefully soon we'll be able to reveal those.
Operator
Myles Minter, William Blair.
Myles Minter
Hi. Thanks for taking the questions. And how important is that the strain for your COVID vaccine actually gets adapted to expedite a 1.5. I know you have in collaboration with CSL one in a Phase three immunogenicity trial. And I think there was some guidance that maybe we might hear about something in the first quarter. So just want to make sure that that's on track and is that also a gain our guiding factor for the first sale in Japan. Thanks.
Joe Payne
Yes, thanks for bringing those programs up. There's a lot of there's a considerable amount of late-stage clinical data that's being collected for this platform. I know you touched on a couple of these trials. That one was the Biovail it Phase three trial where we're comparing Biovail and Coast, Dave to Biovail and commonality. And that data is forthcoming soon. So that something that will help us be able to communicate how we perform in a multivalent or by Valence setting to other technologies out there.
With respect to the monovalent XPB. trial. That one is designed to incorporate the southern hemisphere flu season cycle, and we'll be able to share data for that program later this year as well. So you did ask whether these programs are prerequisite for certain regulatory discussions. The answer is no for Japan and Europe, and we'll find out for the United States, but we are collecting it in any case. And CSL, our partners are are funding these programs just to strengthen the data packages for each of these programs. And Pad, anything to add?
Padmanabh Chivukula
Yes, just I'll just add one other thing is that you might be aware the current circulating strain, the it seems to be a Gen one. So So ultimately for the fall fall season, we will be once the platform has been approved, we will update it and be ready to supply whatever circulating strain is needed, correct. The WHO will be coming out with the updated variant announcement next month in April. And subsequent manufacturing runs and distribution work will be forthcoming and messaging guided through official press releases by Meiji.
Myles Minter
Okay. And then secondly, just on the CF program, I know you mentioned you'd be looking at respiratory function data from a safety perspective. I mean, would you obviously look at FA one from a safety perspective and then have to report that data anyway offers for CF. We are we're collecting on standard eight-well pad money. You address that.
Padmanabh Chivukula
Yes, no, we of course, we will we're going to be cutting a lot of the safety signals, then we're going to be looking at a few one in lung clearance index as well. But we again, just to reiterate, you are going to be recruiting relatively relatively stable patients. And there was there could potentially be no patients in volume recorded in the population as well. But this is an all-comers study. So just so you're aware.
Myles Minter
Helpful. Thanks very much.
Operator
Yanan Zhu, Wells Fargo.
Yanan Zhu
Well, great. Thanks for taking our questions. I have a couple for Costain and a couple of for the CF program until Steve was wondering how many booster doses were distributed last year and purchased by the Japan government, what percentage of that volume is for the three groups of people that you touched upon earlier on the call? And how would you expect that number to change this year?
Joe Payne
No, it's a good question. First, of all I can speak to what is readily available in 2020 to over 82 million messenger RNA COVID vaccine boosters were distributed in Japan that number's not tightly understood for 2023, but it was a significant number as you can appreciate for 2024. We now as we touched on just moments ago that the Japanese government is has indicated and communicated to the clear recommendation that the elderly care you get to booster shots a year and the elderly population is 32 to $36 million in Japan. So it's a significant number of people and it was very good to hear that the government of Japan is going to be on providing these vaccinations to the elderly for elderly free of charge.
So that speculating what that how that impacts the market is going to be difficult for me to do more appropriate for and analysts on this call to do that, thanks for the information in prior years in Japan were the average booster doses per person under two and in Japan as well known to have a high rate of vaccinations per person, many would say that they have the highest rate of vaccinations for any country in the world, especially relative to US and Europe. So they have a high prevalence for getting vaccinated and the elderly is even higher. So a very high rate of vaccination.
How we project this into 2024, I think it's reasonable to expect a very high percentage of these people will fill out these cards that they receive in the mail setup times to go to the clinic to get their free vaccination. But what number that is I mean it would be inappropriate for me to guide.
Yanan Zhu
Sorry, I go My question was the prior recommendation or the default number boosters, a person get per year.
Joe Payne
Is that and not twice a year with that once last year, doctors don't know what the previous recommendation was. All I can comment on is what's clearly communicated on the MHLW website, which is two boosters annually for everyone over 65 in Japan gone.
Yanan Zhu
Okay, thank you. And on the CF program, the Phase 1b portion on those patients caught two administrations of ARCTOC. two was wondering what's the interval between those two demonstrations? And also, I think you mentioned on a call that FEV. one lung clearance, these measures will are being collected perhaps mostly for from a safety standpoint. But the question is will you be presenting those data at the readout? Thank you.
Joe Payne
Well, first comment was the the primary purpose of this Phase Ib data is to ascertain safety and tolerability. We will be looking at severe adverse events and also more specifically side effects associated with the lung as this is a CF program, and there's increased sensitivity to lung related side effects and coughing, et cetera. So that's where we're going to be much more focused on in terms of externally communicating our Phase Ib interim data is severe adverse events and more lung centric side effects. And just summarizing the safety and tolerability in a spectrum, a small spectrum of a relatively small group of CF patients.
The other parameters are secondary or even exploratory in nature. We're not expecting in a small cohort like this, where many of these people are already on CFTR modulators that will see some efficacy readouts or anything like that. But we definitely will have an opportunity to present that data of the Phase Ib data later this year when we have a better idea which conference of great and the dosing interval that takes the dosing interval, we have not shared publicly.
This is a competitive environment. We've made it very clear that these are two administrations, their inhaled. We haven't disclosed the dose levels if they're the same are on are different. And how far apart they are. We had considerable learnings from the 32 subjects of data in the four cohorts evaluated in Phase one. So we wanted to and we've applied those learnings to the design of this Phase Ib trial, and we just wanted to keep those cards close to our chest at this time.
Yanan Zhu
Got it. Thank you.
Operator
Yigal Nochomovitz, Citi.
Yigal Nochomovitz
Hi, this is Alan on for Yigal. Thank you for taking our questions. I have two related to cystic fibrosis. First and the upcoming CF readout? And should we expect a significant further clarify, should we expect any data from the healthy volunteers as though and except long capacity or lung function have you took and by high biopsy to look at the CFTR expression there?
And also what have you seen so far in the healthy volunteer that's suggesting a better tolerability of this drug versus the prior MRNA studies aside from the yes, the CF readout outcome is simply going to be focused on severe adverse events or any sort of on adverse events associated with the lung, like I just mentioned, I don't think we're going to be sharing any outside data from that with respect to samples being directly taken from the lung pad. You have a comment there.
Joe Payne
There's nothing that we're doing, but anything to comment now, again, just to reiterate some of the early, we haven't seen any SAEs or severe AEs associated with Phase one of our Phase Ib to date, and obviously, we're monitoring that closely. And in terms of lung biopsies, we are not currently or we're looking at the actual function in patients. So we're not done with respect to the Phase one data. There is a European CF Conference in June that we're preparing to present.
Yigal Nochomovitz
Okay. Got it. That makes sense. And just one quick follow-up on the OTCD. data that you're going to present and what do you need to see there to make it go?
Padmanabh Chivukula
No-go, go no-go decision there a go no-go decision for the Phase Ib readout for the OTCD. or into both for the OTC. readout? Sorry. Yes, we'd like to make sure we maintain a safety and tolerability of multiple doses that's going to be of utmost importance because that's one of the challenges that many a bunch of other competitors and people that have tried to do lipid nanoparticle mRNA therapeutics for OTC deficiency have failed in the past due to toxicity. So this is going to be a significant hurdle too, to jump through but that would be the primary objective.
Something that we'd be very encouraged by is to show safety and tolerability of multiple treatments in a spectrum of OTC deficient patients. Having said that do we also want to see some biomarker changes? Absolutely. It is a placebo-controlled trial. So there would be increased confidence in these readouts as long as we have sufficient numbers we would be looking for for that sort of detail as well to give us confidence going to the next step.
Yigal Nochomovitz
Okay, got it. Great. Thank you very much for taking our questions. Thank you.
Operator
Pete Stavropoulos, Cantor Fitzgerald.
Pete Stavropoulos
Hi, Joe and Andy. On. So just had a question about catalysts on can you leverage that facility for other pipeline candidates and perhaps a distribution outside of Japan? And if not already, I don't know if you mentioned it or if I missed it when do you expect the facility to be operational and what will be the manufacturing capacity and if you want to grab that?
Joe Payne
Yes, sure.nThanks, Pete. Yes, we do know we've kind of highlighted the time line for our catalysts in terms of drug substance, you know, they're currently in production right now in getting GMP qualified. So that is pretty exciting and there will be some news coming out of them to update the status of what they're doing.And are they going to be participating, you know, in the orders from Japan you know, for this year. So those all the things you want to listen for carefully and obviously the drug product is going to be online probably either later on this year. Early next year.
And then the plasma business should be on within a couple of years. So within 2.5 year, they should be vertically completely integrated. But in the meantime, we can certainly fill the void with our global CDMO partner in terms of Scotland in the United States and Albuferon and rescue farm in Paulinia and in Europe. So we have a really strong core of partners to help us fill the void where you know, until locality is able to get up to speed. Obviously, if they can make up to 1 billion doses.
They CSL and Meiji have certainly a lot of opportunity to determine whether it's going to be and I have a chance to export, you know, the vaccine to other countries. And so that will be a decision that will be made by certainly CSL in major with respect to Japan. Hopefully, that helps if it does.
Pete Stavropoulos
Thank you. And so a question on the CF program. So you're having two doses. Just curious on the perspective of how much do those is actually be derisked. And I guess from a safety perspective, the drug. That's one question. And the other one is any learnings from the cystic fibrosis program that you can potentially develop an inhaled vaccine to a respiratory virus, either alone or in partnership with OCSL.
Joe Payne
Yes, good follow-on questions there. Pete, with respect to the the you want to address those questions later that, you know, in terms of CF in the safety, what we really want to see is even with the single or two doses, we want to make sure that there is no respiratory side effects like Iraq, coughing, chest discomfort, et cetera, and we also want to look at some secondary safety endpoints like fever for examples, right? So I think we can tell of all those things from just two doses. So we're looking forward to cost cutting that data.
And the reason why this is significant to us in our internal team has been doing inhaled therapeutics for decades. They do have a lot of experience here. And what they've shared with us is that if you do see challenges or problems in toxicology with inhaled therapeutics, it's in the first two administrations. So if we get through this trial successfully, the probability of success for this trial has meaningfully moved, moved up. And so that's why this is important.
And in the second part of your question, you know what the data is positive, what will it mean for the platform? I mean, obviously, if the data is positive and we do get proof-of-concept, we will expanding potentially the I'm thinking about other respiratory or other rare diseases or other diseases that need nebulization. But also this platform, of course, can be applied as potentially a vaccine as well.
Pete Stavropoulos
Great, thank you for taking my questions.
Joe Payne
Thanks, Pete.
Operator
[Thomas Yip] , H.C. Wainwright.
Thomas Yip
Hi, good afternoon, everyone. This is Thomas Yip asking a couple of questions for asked. Thank you for taking the question. So first question regarding coal staple and buy forward. So with the proven Japan and I believe Andy mentioned that have regulatory decisions expected. And from Europe this year, are there any plans by either some, you know, a book from the tourists or from CSL from Asia and the other plans to expand into additional territories?
Joe Payne
Yes, yes. Yes, Europe is we're intending on getting that approved this year and also the United Kingdom shortly thereafter after that, the next big market, of course, is the United States. Csl will be driving that those regulatory efforts, and they'll be providing guidance as to when that's going to be filed and approved. But what we can say at this point is we expect first approvals in Europe and then UK and then the United States.
Thomas Yip
And is that. Thank you. And then and then perhaps one question or actually two a 10 in OTC. And as we recall in the past, the Phase two study in Europe enrollment was slightly delayed. Can you discussed briefly, you know, how is the study enrolling so far in the Phase two study.
Joe Payne
But yes, how that survey and we provided guidance that we remain on track for the end of Q2, and that's the status of that program with respect to some interim interim data readout is at the end of Q2.
Thomas Yip
Okay. Got it. And then and then perhaps one final question. This one's for Andy on cash runway. And just was there a does it include any projected revenue from a coal state in Japan or now perhaps 1.4 and Europe as well?
Joe Payne
Thanks, for asking that question of the guidance for the three year of cash runway at least did not include any revenues from Costain and did not include any commercial milestones from CSL So as soon as you know, we're able to discuss those as well. We'll update the guidance with respect to the cash runway. And so hopefully we will be able to do that soon. But at this point in time, we certainly have a long enough runway to be able to achieve a number of milestones this year, which are very critical to the opportunity to expand the pipeline within the company.
So we're pretty excited and certainly have the resources to be able to address the CDF opportunity in the OTC opportunity. And now we're going to be launching two additional vaccines and hopefully be able to see some progress in that in the next few years. So pretty exciting year with respect to a number of milestones that are going to be forthcoming and hopefully we'll be able to it enhance shareholder value.
Thomas Yip
Thank you again for taking my questions.
Joe Payne
Thank you.
Operator
Yale Jen, Laidlaw & Company.
Yale Jen
Thanks for taking the question. In terms of Japan, our COVID market, is that still mostly government or is that also what it is also a commercial aspect to evolve maybe in this year or in the future? Are you guys seeing, but it's a good question.
Joe Payne
Yes, I mean, the good news is that the government has, you know, given kind of the guidance for what they're going to support, right? And so if you look at just the population of the people over 65, that's pretty substantial, 32 to 36 million people, right. And then that doesn't include people that are immunocompromised or would have chronic illnesses right, that certainly are going to be in a position to want to be vaccinated as well.
So when you look at that, you know, that's a pretty significant part of the population at least something in the 30 to 40, maybe 50% of 125 million people. So that's quite substantial, right? And so it we're very excited about the opportunity and it's not trivial in remember, it's going to be a major vaccine made in Japan. So there's a lot you know that I think the government is very proud of and Meiji, very proud of CSL. Certainly, we are excited to be supporting this program and in launching it globally now also. So there's a lot of good news behind it.
Yale Jen
In terms of what it's going to be a private pay versus government pay in a major will make all those announcements when the time is right. But, you know, it's something that we're we're not really concerned about at this point.
Joe Payne
And only thing I would add to that is that Meiji has a strong track record with working with the government to help with the subsidized vaccines in the flu space. So they've been doing this for years, and we're working with the ideal partner. I've done this before.
All right.
Operator
We've reached the end of the question-and-answer session. I would now like to turn the call back over to Joe Payne for closing comments.
Joe Payne
Yes. Thanks, everyone, for participating on the call. And if there's any remaining questions, don't hesitate as always to reach out to the team. We'll get back to you as soon as we can. All right.
Andrew Sassine
Thanks, everyone.
Operator
This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.
