Right. Hello, welcome to the 42nd Annual JP Morgan Healthcare Conference. My name is Edwin Zhang. I'm a member of the JP Morgan Healthcare team. Today, I would like to introduce you to the team from Arcturus Therapeutics. Please join me in welcoming our presenter, Joe Payne, who is the President and CEO of Arcturus.
All right, thank you. Another year has gone by, everyone. It was an exciting one for Arcturus. I'll be happy to summarize some of the progress we've made this year, which has been extraordinary. Very, very pleased with our team and what we've done. It's exciting to be with you, and we have a lot of friends and colleagues here as well that we work with, so I'm glad we could share this together. Arcturus is a messenger RNA medicines and vaccines company. We're based in San Diego. We have next-generation technologies, so don't kid yourself, we are different with respect to our science. We are now global. We're a late-stage clinical company, for sure. We have an approved product. We'll be touching on that shortly.
We have about 170 employees at three sites on Science Center Drive in San Diego. If you're familiar with La Jolla biotech, that's one of our buildings there. We're more than happy to welcome you visit our site if you're ever in San Diego. And we're building a nice and exciting pipeline of messenger RNA medicines with some key clinical endpoints this year. We have multiple strategic partners that are summarized below. CSL has partnered our some of our key vaccine programs. Just an outstanding partner, and we're very excited about the future partnership or collaboration with them as we distribute our COVID and flu vaccines together. Ultragenyx is our one of our partners in rare liver diseases.
The CF Foundation supports our CF program, and BARDA is also helping us develop our vaccine enterprise in pandemic flu, so... We have proprietary mRNA technologies that set us apart. First of all, we have a novel self-amplifying mRNA technology that's trademarked or registered trademark STARR, self-transcribing and replicating RNA. This is a next-generation technology that we're really excited about in the vaccine space. We're also known for our LUNAR delivery technology. This is a lipid nanoparticle that's different from others. It's a thiocarbamate-based lipid technology that's biodegradable and highly optimized, and you can see that we can utilize it for intravenous, intramuscular, and inhaled delivery of mRNA. Our manufacturing know-how is maturing, especially accelerated by the pandemic, making millions and millions of doses now. This is very important in messenger RNA.
Sometimes it's a boring part of the story, but rest assured, a very important one. These very large RNA molecules are only getting larger and more complicated, and the larger they are, the more difficult they are to make, purify, and formulate, and this is something that we do very well, and so it's a point of differentiation just to emphasize. The two Arcturus-owned mRNA therapeutic candidates are summarized here. Just to cut right to the chase, if you look to the upcoming milestones on the far right, you'll see that we have meaningful clinical data forthcoming this year, in the first half of this year, for both our rare liver disease, ornithine transcarbamylase deficiency program, and for cystic fibrosis, which is our flagship asset that represents our lung delivery or our lung therapeutic franchise.
The OTC deficiency program is phase I proof-of-concept data that we're anticipating to be sharing some interim data on a subset of the patients in this trial in the first half, and likewise, for CF, it's a phase Ib trial being conducted in patients. Both of these are very exciting commercial opportunities for a company of our size. OTC deficiency is the number one urea cycle disorder, if you're not familiar with it, so it has some attractive financial outlook to it. Likewise, CF is a more well-known rare disease, but well known to be the number one most commercially attractive rare lung disease. In our pipeline of partnered vaccines, I mentioned in the introduction that we entered into a significant partnership with CSL, which is based in Australia.
You can now see that we have an approved monovalent COVID vaccine now in Japan. We achieved that significant milestone, and we've also filed for an MAA in Europe for that platform. We're following it with. We're collecting bivalent data to mature the scope of the platform. So we're collecting bivalent clinical data that's in phase III right now, so that's some new data that we're expecting here shortly. And then, we've also updated the monovalent platform with XBB, and we're collecting data on that. And likewise, with the flu shot, we're excited to look at multivalent or quadrivalent vaccines using our self-amplifying RNA technology and our LUNAR delivery technology that's also being evaluated clinically.
So moving on, then I mentioned that we have a LUNAR flu pandemic partnership with BARDA. So CSL, I think it's important just to take a moment to just help people appreciate who CSL is. We were extraordinarily impressed with this group when we went through the evaluation process of who to partner this extraordinary technology with. We went through a lot of conversations, and we were frankly blown away at CSL's capability. If you just look at some of the bullet points here, they're a very significant company. They are based in Australia, but trust me, they are global and very good at what they do. I consider them a world leader, myself, the world leader in flu vaccines. You know, having over $2 billion revenues for the flu shot.
To summarize the vaccine partnership with them, it was a $4.5 billion deal. We had a couple hundred million dollars up front. That was very important pre-recession. It wasn't too long ago. It was very well timed for a company of ours at that time to extend our runway, so it was a good fit. And we also have $1.3 billion in milestones, development milestones associated with these programs, and $3 billion of commercial milestones. We have 40% profit sharing, financials on the back end for the COVID enterprise, and then also double-digit royalties for the remaining targets or in infectious diseases that we're working on with them, which includes flu and three other respiratory infectious disease vaccines. We also have a partnership with Meiji Seika Pharma in Japan.
An extraordinary company, a well-trusted brand in Japan. For those that have been to Japan recently, Meiji is very well known and well trusted there. But again, a very successful company, and they are the number one flu shot company in Japan. So we've taken this technology, and we've partnered it with someone who's very strong in U.S. and Europe, but also very strong commercially and with respect to distribution in Japan. So we really have ideal partners that are helping us, and we're excited to work with them in no longer just approving this, which we've completed, but getting this distributed commercially in Japan. I think it's helpful to highlight that we have a manufacturing presence in Japan as well, that's maturing.
We have a joint venture mRNA manufacturing partner called ARCALIS, and Arcturus and Axcelead are the major equity owners in this CDMO. And we... You can imagine this, as you see the image in the pictures, that we've completed a drug substance manufacturing facility, 78,000 sq ft, many floors, just opened, you know, in the middle of last year, and it's expanding, and it's funded by the Japanese government. And the question is, why? Why is all this attention and to ARCALIS and Meiji out of Japan? Well, it's because they would like independence. Japan wants to... They learned from the pandemic, like many other countries did, that next time they want to be in a better place.
And now, with this, manufacturing facility in place, they will be completely independent for the next pandemic and be in a position to not only make the drug substance but formulate it. And the starting material, even the DNA, drug product manufacturing expansion is ongoing. A total of $165 million of commitment from the Japanese government to support that. The phase III clinical study update is here. I highlighted in red at the very bottom to get to the... We recently published this phase III study in The Lancet. We're very proud of this peer-reviewed publication. But as we walk through this slide, you can see that this study was fully funded by Meiji Seika Pharma, and it was very successful.
In the recruitment phase, we achieved our primary endpoint of non-inferiority. It was so successful that we decided to look more closely at a more relevant variant of Omicron and did a statistical analysis on that and found it to be superior to Comirnaty as a booster with respect to neutralizing antibody response and increased immunity. And so we're very happy with that, of course. That's such a successful pandemic product and story from Pfizer, and to come in and provide a next generation improvement on that is exciting for a company of our size. So we filed the NDA for both the primary immunization and the booster, and it was recently approved. So just to emphasize the significance of this approval, it was described as historic by our partners.
You know, you don't use that word very lightly. Nature described it as a pivotal advance. A Nobel laureate said, "This is the next generation mRNA technology." So it was very. There's a lot of pride associated with all the work that we put into this to get recognition from folks that we respect. But it's the first approval. Just to tell the story a little bit, it took us four years. Self-amplifying mRNA hasn't been around that long. In fact, this is the very first self-amplifying mRNA product to get approved, but it was created, optimized, clinically developed, and approved all under four years. This will never happen again in our career, but it's just a fun part of the story. It's an enduring vaccine with strong clinical data. We're approaching 20,000 subjects.
Meiji did such an extraordinary job in the phase III development that, they advanced this all the way to approval. The MHLW is the Ministry of Health, Labour and Welfare in Japan, and they're going to be the exclusive distributor of our self-amplifying mRNA vaccine in Japan. The next regulatory milestone, that's just a note for me to make sure I don't forget, that we have filed with the EMA as well, the marketing authorization application, and that's in process. So this is, the next cadence. The next slide I wanna take a couple minutes on, so if I'm rushed, this is why. I wanna walk through this one. This is, the most recent data from our phase III trial. This is now going out to six months. As you see, the red line is, the Arcturus' vaccine.
The blue line is the approved mRNA vaccine, also known as COMIRNATY. For those that are unaware of the dose levels, COMIRNATY is dosed at 30 micrograms, and ours is dosed at 5 micrograms, a 6-fold reduction in dose, and which has, of course, some potential dose-related toxicology and safety benefits. But even at that lower dose, you see multifold higher antibodies and a multifold extension of durability. As you walk through, no matter which time you point, look at... This is at 1 month. Look at ours is where we are at 6 months, and likewise here. You know, at 3 months, you go out 6 months, with Omicron. So this is a clear improvement, and we're really excited. We saw when we were preclinically evaluating self-amplifying RNA, we saw that it was about 30-fold better than conventional mRNA in our preclinical models.
How did that 30-fold translate into human beings? Well, you take that 30-fold number, and you lower the dose sixfold. You then increase the antibodies a couplefold, and then you extend the durability a fewfold, and all those folds multiply together to be 30-fold. So it was really nice to see the whole story unfold from preclinical and translate very cleanly and effectively to produce a really strong vaccine technology product in phase III data. So we look forward to publishing on this, and hopefully again in a quality peer-reviewed journal, and so you can look for that shortly. Now, moving on to ARCT-810. This is our rare liver disease program. Ornithine transcarbamylase deficiency is the indication we're pursuing. What sets us apart from the field in therapeutics is our delivery technology. This is important in vaccines as well.
We emphasize, and perhaps overemphasize, self-amplifying mRNA. Part of our success is attributed to the LUNAR technology, but in therapeutics, it's extra important. It's important that this technology degrades. The last thing you want is, I guess, accumulating lipids in your liver or your lung upon chronic dosing. It's very important that these man-made lipids do their job, but then clear. They break down and get out of the body, and we've shown in multiple clinical trials now that our lipids clear rapidly, in 48 hours, and that's very important. If you don't do that, then you can have challenges with regulatory agencies, as they... You know, it's hard to do a multiple-dose trial if you have lipids hanging around. It's so it's not only biodegradable, but it's also optimized for each cell type.
One of the interesting parts of the Arcturus story is we- it was, it was just Pad and I, a couple scientists that started the company. We didn't have the luxury of copious amounts of cash when we started this company. We were jealous of others in the space, you know who they are, that were raising lots of money. So we didn't have that luxury, but we- but, so we had to innovate and optimize each of our technologies for cell types. And you'll see as we walk through this, one of the reasons we've got outstanding preclinical and now a growing clinical data set is because our delivery technology is optimized for each cell type, and I'll explain further about that as we walk through these. First of all, OTC deficiency, this I mentioned, it's the number one urea cycle disorder.
It impacts about 10,000 people worldwide, a couple thousand here in the U.S. and Europe, and also in Japan and globally. But, it's an unmet medical need because the present standard of care is typically ammonia scavengers. If your ornithine, if your urea cycle is dysfunctional, ammonia levels rise in your blood. Ammonia is Windex, for those that are not chemists. That crosses the blood-brain barrier, and that's not good. It's a serious problem, so you need to control the levels of ammonia, so people take a lot of these pills and drink a lot of water, and they urinate 10 times a day, and it's a challenge, and they have to be very, very cautious of what they eat.
So rather than scavenging the ammonia, what we're proposing is we make a messenger RNA molecule that goes to the liver and makes or replaces the missing or dysfunctional ornithine transcarbamylase, this enzyme that is, that is needed to establish normal ammonia levels. So how did it look? You can genetically engineer animals with OTC deficiency. We've done this with, in mice, and what we've observed in humans is that if you have approximately 5% functional OTC, if you have 5% normal enzyme, you don't even know you have the disease. So, that's now been published on and understood. So we don't need a lot of this ornithine transcarbamylase to actually save or potentially and very disruptively impact their, their life.
So 5% is the threshold that's shown there, and then you see that at all doses evaluated preclinically, that we have very strong proof-of-concept data in OTC-deficient mice. If they were not on drug, and you feed them protein, all these animals die. But those that are on drug, they're all happy and spinning in the wheel, and the only explanation for that is that this is working very well. So we want to replicate this in humans, of course. So where are we with our clinical update? We successfully completed a phase I trial, up to 0.4 mg/kg in 24 subjects. This was a big deal because we showed that the lipids were clearing. That's a crucial, not just a nicety, that's crucial. It's very important that we show those lipids clear.
We also showed that we did not necessarily require steroids to elevate the dose, and this is an important differentiator, potentially. We went on to phase Ib in the United States in patients, and enrolled an additional 16 folks in 4 cohorts, all the way up to 0.5 mg/kg, and no serious or serious adverse events in patients, so this was very encouraging. That brings us to today, where we're in phase II in the U.K. and Europe, in a single and multiple ascending dose that's placebo-controlled, and it's also including adolescents and adults. One of the attractive aspects to messenger RNA therapeutics using lipid nanoparticles is it's not DNA, it's not a viral vector, so it has a more simpler path into adolescents and children.
Most of these rare diseases are diagnosed as children, so it's nice to have a modality, a type of drug that's amenable to treat children. We don't have the same challenges as other gene therapies, for example, or DNA medicines. So we're adding adolescents to this study. We're enrolling up to 24 subjects, and we're targeting to share interim phase II data in H1, the first half of this year. So that, again, that's a relatively near-term objective for the company with meaningful clinical data. We're looking at safety and tolerability, but also PK, or pharmacokinetic and pharmacodynamic readouts. Biomarkers is what we're looking for. We want to restore ammonia. Ammonia levels in these patients are all over the place, depending on diet and whether they're on ammonia scavengers or not.
So we just want to restore ammonia levels to where they need to be, and then that will be the primary, another important endpoint or objective of this study. Exploratory endpoints are other plasma amino acids like glutamate, OTC enzyme activity, and orotic acid in the urine. So if it's hard to determine improvements in ammonia, we have other mechanisms, other biomarkers to look at. So on to ARCT-032. This is the CF program. This is our inhaled messenger RNA therapeutic candidate for cystic fibrosis. There's about 100,000 CF patients worldwide. This disease is implicated or involves the transporter in your lungs called CFTR.
If you do not have CFTR in your bronchial or in your lung cells, then the salt balance in your lungs becomes imbalanced, and then the result of that is phlegm and undesired swelling and inflammation, scarring, fibrotic disease, cirrhotic disease, and eventually you can no longer breathe properly, and you pass. So it's a very serious lung-centric disease all around this transporter called CFTR. So the world, the pharmaceutical community, is all about modulating the transporter, fixing it, like an old car, just going in there and fixing that car up, trying to get it functional again. We're in the business of providing a brand-new CFTR, something that's just like you and I, a normal CFTR, and it's the complete CFTR construct. Arcturus is now skilled in the art of these very large RNA molecules, thanks again to self-amplifying mRNA.
So we can build in these very large mRNAs to make a very large protein, for CFTR. And if we can do this, this should be very exciting. So what have we done in the clinic? A phase I study was completed this year in 2023 in New Zealand, a very successful phase I study. It recruited 32 subjects, evaluating 4 dose levels. And when we mean a dose level, I want you to imagine time and chair. It's not like 1 pill or 4 pills. It's how long is the person sitting in a chair and inhaling a messenger RNA therapeutic? So to help you understand what this is like, remember, you're not just inhaling messenger RNA, you're inhaling a lipid nanoparticle encapsulating the mRNA. And for you that are, "What is a lipid?" Butter is a lipid.
So this experience is like a steam. It's nebulized steam. You're sitting there, and as you inhale this, you're inhaling, a buttery steam. Okay? Does that, does that give you an idea or a sense of what this experience is like? So the four dose levels that we evaluated were, how long are you sitting in that chair? We were happy to see that it was safe and well-tolerated at all doses, including the highest dose level, and we moved in transition to a phase Ib in patients. We initiated that process, and in our last quarterly call, we announced, we've dosed our first patient. We're well on track to provide phase Ib interim data in the first half of this year. This is a two-administration study, and there's no placebo involved. Why is this important, is...
We have an excellent CMO at Arcturus. His name is Jürgen Froehlich . He has a lot of experience in CF and inhaled lung therapeutics. In his experience, he's learned that if you see any toxicology with inhaled RNA or messenger RNA or inhaled drugs, it's usually in the first inhalation or the second inhalation. So by having two administrations in patients, we check that box of reducing concerns associated with first dose or second administration toxicology. So this is a two-administration trial. We haven't disclosed the specific dose level or the regimen. We're keeping that trade secret close, those cards close to our chest for now, 'cause we've learned a lot in our 32 subjects that have already received our therapeutic.
But, we're very pleased with the design of the study, and we look forward to sharing some of that, interim data in the first half of next year. CF Foundation is, increased their commitment after they saw the phase I results. They increased their commitment to $25 million to advance this therapeutic. That's a good number, right? $25 million is helpful. We're very appreciative of it, but we, we also recognize that the CF Foundation is, is a very important partner to help us, in designing our phase II proof of concept trial, ultimately, if we're successful, and if, and if we can do this with, with efficiency.
The CF Foundation, of course, has very strong relationships with the dozens and dozens of clinical sites in the United States and all the principal investigators, and they know they have the intimate understanding of all these trials. So we're fortunate to have them as a partner to help us recruit patients. So let's share one of the differentiating aspects of this therapeutic, as we've already received a rare pediatric disease designation, an orphan drug designation. This gives us some advantages from a commercial perspective. It also gives us potential access to a priority review voucher, just like what we did previously with the OTC deficiency. And another differentiating feature of this therapeutic is our preclinical data set. We have showed functional delivery of mRNA in mice, rats, primates, and ferrets, and I'm gonna emphasize the ferret model.
The ferret model is the most difficult model to show success in. If you genetically engineer a mouse or a rat with cystic fibrosis, they do not get sick. They do not die. They do not get a lot of phlegm in their lungs, definitely not right away. So, it's relatively easy to show proof of concept in these animals 'cause there's no phlegm destroying the particles and preventing distribution of your drug after inhalation. But when you genetically engineer a ferret with cystic fibrosis, they generate a lot of phlegm in their lungs, very representative of the human condition. This is very important and so... And differentiating, 'cause, we're very proud of this data, but we showed that functional delivery of messenger RNA in the upper and lower, the trachea and the bronchus, respiratory tract.
We showed not only functional delivery of the mRNA in an imaging study, but also in a mucociliary clearance was also improved after a single administration. So functional readout of this therapeutic in a very, very difficult model. If you look at the top line there, the green line, that's Arcturus's drug. The blue line is a multi-billion dollar, very successful KALYDECO. And to show that after a single administration, we're very happy with this data. We believe that it could have some, you know, it has the opportunity to help a lot of people. We've shown that in actual human cells. We've ex vivo, we've looked at high expression levels of CFTR protein and restored chloride activity as well. And so, so CFTR expression and function have been established.
Finally, in 2023, we added a new board member, John Markels, and also Jane Moran, are our two most recent board members. So for those that know them, you should be familiar with them. Great, great additions to our board. Very fortunate to have them. final slide, and then I'll take some questions. It's just a 2024 outlook slide, 'cause I, I covered a lot in the last 20 minutes. But, in 2024, people are gonna be looking at our friends, Meiji, and to see, how well they can commercially launch our self-amplifying mRNA in Japan, and we will be as well. That'll be meaningful to us, and we'll be excited to watch them do what they do well. We're also collecting very meaningful clinical data. In the bivalent COVID vaccine, there's phase III data there.
The quadrivalent flu vaccine, phase I interim data set. And then mRNA therapeutics, we talked about the phase Ib interim data for cystic fibrosis and the phase II interim data for OTC deficiency. Intermingled there is our, you know, as we advance the regulatory process, we're gonna be... Of course, there's filings and/or approvals associated with the cadence that's already been communicated by our partners. Starting in Japan, we'd like to go to Europe, U.K., and U.S. as we look at the commercial launch schedule for our COVID vaccine. So with that, I'd like to give significant time for some Q&A, and I will sit down now, Edwin, right?
Yes.
Let's do it.
Much appreciated for that, Joe. I would like to sort of kick off the Q&A with the first question. So this is regarding, you know, now that you've proven self-amplifying mRNA is superior to conventional mRNA in the COVID vaccine space, what other implications does self-amplifying mRNA have as a technology in terms of future potential for as a therapeutic? What other areas do you see here?
... I'm just doing a sound check. This sounds okay? Okay. Yeah, so what now that we've proven out the first self-amplifying mRNA product, what else can it do? That's a great question. We've established very strong proof of concept in infectious diseases. That's what COVID represented for us, and that's why CSL is excited about flu and other respiratory infectious diseases. But there's only five infectious disease vaccines that we've partnered with CSL. There's many, many infectious diseases, as we well understand, that self-amplifying mRNA could be meaningful. You can also look at the cancer vaccine space.
If self-amplifying mRNA was considerably better than conventional mRNA in the infectious disease space, you can only imagine what it could potentially do in cancer, because self-amplifying mRNA is well known and documented and published to invoke T-cell responses, and that's even more meaningful and more important in the cancer vaccine space. So, that opens up the door of opportunity there, too. I'll pause there 'cause there's actually quite a list of opportunity, but that's where-
Thank you so much.
I think the most meaningful opportunities are.
Yeah. Hi, Stephen Eck from MacroGenics.
Yeah.
Really nice presentation. With respect to your drug versus KALYDECO, could you comment on how they differ with respect to function in non-respiratory tract, which is also affected by CF?
In the non-respiratory tract?
Such as pancreas or GI.
Oh, yeah. Well, first of all, when we've dosed through inhalation, we find that the biological activity is limited to the lung. It's a topical administration, so it doesn't necessarily access the systemic administration. We have utilized this therapeutic through injecting it intravenously. And of course, there's potential opportunity to, I guess, build CFTR in the liver. This is also a challenge for some, a subset of CF patients and also pancreas. But those efforts are early in terms of delivering mRNA to other cell types outside of the liver and the muscle and the lung.
We do have very early efforts looking at the pancreas and the outer tissues of the lung after accessing the body through an intravenous administration, but it's very early at this point for pancreas. Did I address your question, Steve? Yeah.
I'm happy to ask another question.
Sure.
This is regarding ARCT-154. Could you sort of talk about the potential for commercialization and opportunity in Japan, now that you have, now that you have approval, what's some of the implication of this platform?
Well, it's a great question. Meiji is gonna be the best one to address that question. Our partners, of course, have seasoned experience in commercializing and distributing vaccines, especially the flu vaccine in Japan. So we'll be leaning on them to provide guidance there. But we are excited. We understand that, and I think most people here appreciate, that the older you are, the more sensitive and more likely you are to get a COVID vaccine, and there's 65 million elderly folks in Japan. They have a high elderly population. They have an attractive rate of vaccination, and so we think that that is reasons for optimism as we look forward and Meiji launches this later this year and builds the franchise out in Japan.
But with respect to giving specific guidance, we'd definitely encourage people to reach out to Meiji, and we'll allow them to answer the question. It would be more appropriate for them to do so.
Great talk. Thanks very much, and great achievements. One question regarding the inhaled CFTR therapy. What inhalation times should one expect for the different for the patients, basically, in the end-
Yeah.
- of this buttery steam?
Yeah, that's a, that's a great question. We're being coy with specifics on, on, on time and chair, or how long they have to inhale for, because we're in a competitive environment. We have shared, however, that we have a customized nebulization process. We have equipment that is customized, it's not standard, that we've shown a sixfold improvement in inhalation times. So that's a big difference between 3 hours and 30 minutes, for example. So, so that's one thing I can comment on.
I'm happy to ask another question. So could you sort of talk about cash runway of the company as a whole, and how comfortable you are with the current levels?
Yeah, we disclose our cash and cash runway at every quarterly call. We have sufficient resources to take the company into the end of 2026. So, a three-year cash runway is, I think, a significant or even a differentiating number in the biotech space right now. So, this does not include commercial milestones. It does not include any sales revenues. So if we're successful or our partners are successful at commercializing this, then that, of course, will put us in a new place.
... Hi, Joe.
Hey.
How are you?
Good.
Can you comment a little bit on plans to develop the vaccine outside of Japan?
Yeah. Yeah. Well, CSL is gonna be the best group to address that question. But what they've communicated already externally is their commercial launch cadence will begin in Japan in 2024 with our exclusive partners, Meiji. Beyond that, it's Europe, then the United Kingdom, and then the United States, in that order. And all they've indicated is it'll be 2 to 3 years to go through that process. Any further detail, we'll have to refer you to them to give them that specific question, but we look forward to them going through that process.
Maybe one more question from my side. In regards to your cystic fibrosis treatment, so how does your approach differ from some of the other players currently in the industry at the moment?
Yeah, it's a good question. It is a competitive space, I just mentioned that, and it should be. It's a very attractive commercial opportunity, and it's a serious disease where there's some unmet medical need, especially with Class I CF. One thing I neglected to mention is Class I CF is the portion of the patients that are null for the transporter. They have no standard of care that's meaningful, and so they are in a real, real need for a solution, and we could be that ideal fit for them to build them a new CFTR. But in terms of how we differentiate competitively, first of all, I want to focus on that ferret data.
We've shared this very meaningful preclinical data set that's unique to Arcturus, and the reason for that is attributed to our different delivery technology. The lipids in our delivery technology are not glycerol-based or carbon-based, they're thiocarbamate-based, which is a sulfur, an oxygen, and a nitrogen. They're hydrolyzable. These heteroatoms provide handles for the body to grab onto and break down these lipids, and this is an important differentiator. But I think more meaningful in the lung space is that we've highly optimized this delivery technology for bronchial epithelial cell delivery. I can't underemphasize this. The bronchial epithelial cell is different than the hepatocyte.
How a particle interacts with the hepatocyte, how it's drawn into a hepatocyte, and how it breaks out of the endosome and delivers the mRNA, is completely different than bronchial epithelial cells. We had to go through a lot of learnings about this. We screened our entire deck of proprietary biodegradable lipids to identify our lead candidates. You need to design these particles to survive the aerosolization process. Nebulization destroys particles. It's very physical. It just shakes the snot out of these things and breaks them up. So you have to survive that. We did that learning curve. Then you have to optimize it for sputum stability. The very first time we looked at this, the mRNA got destroyed very quickly by the sputum, by design. Nature's phlegm is really good at chewing up stuff, including lipid nanoparticles.
So we made a 10,000-fold improvement in our optimization process there, and we showed stability in sputum. That's a significant effort. Then you have to show this endosomolytic disruptibility. Now, that's a mouthful, but what I mean is once these particles enter a cell, they get trapped. People do not know this, but most of RNA lipid nanoparticles, 99% of the RNA is destroyed by the endosome, completely useless. That doesn't sound like an optimal product. We've optimized our product to break out of the endosome at a higher rate of endosomolytic disruption. So this gives- So if you add that all together, that's a lot of optimizability. And so the LUNAR... In a one sentence, the LUNAR technology is different from what other people are using.
Another asterisk is we have proprietary purification capabilities that may be deemed important and may be differentiating. We, we don't have the data to confirm this, but we know how to make and purify large RNA. Rest assured, that is the most important part of the process. If you have small, single-stranded RNA molecules, the body thinks that's a virus. By definition, small RNA, virus, freaks out. Small, double-stranded DNA, again, will think it's foreign and freak out. So by removing these particulate matters, and we have proprietary purification processes that differentiate us from the field. Go ahead.
Thank you very much. I think,
We're almost up.
Yeah. I think that's about all the time we have here, but thank you so much, Joe, for joining us.
Thank you.