Dicerna Pharmaceuticals, Inc.
Q1 2020 Earnings Call Transcript

Published: 11 May 2020

[Operator:]

Good afternoon, ladies and gentlemen, and welcome to the Dicerna Pharmaceuticals First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded at the company's request.I will now turn the call over to your host, Lauren Stival representing Dicerna Pharmaceuticals. Please go ahead.

[Lauren Stival:]

Thank you, operator. Good afternoon, everyone. And thank you for joining us to review Dicerna's first quarter 2020 financial results and operational highlights.Anyone who hasn't yet had a chance to review our results, we issued a press release after the close of trading today, which is available under the Investors & Media tab on our website at dicerna.com. You may also listen to this conference call via webcast on our website, which will be archived for 30 days, beginning approximately two hours after this call is completed.Speaking on today's call will be Dicerna's President and Chief Executive Officer, Doug Fambrough, who will discuss our corporate progress and key milestones and provide an update on clinical development and collaboration activities. Our Chief Financial Officer, Jack Green, will then review our first quarter financial results. We also have Jim Weissman, our Chief Operating Officer, and Ralf Rosskamp, our Chief Medical Officer, available today to answer questions during Q&A.Following our remarks, we will open the line up for your questions. I'd like to remind listeners that, as noted in today's press release, management will be making forward-looking statements on today's call, including, for example, the clinical development, therapeutic and commercial potential of nedosiran and other development programs; research and development plans and timelines; the potential for Dicerna to continue to add programs and extend the reach of our technology to additional tissues in our internal discovery research and in our collaborative programs; expectations related to our collaborations with Novo Nordisk, Roche, Lilly, Alexion, Boehringer Ingelheim and Alnylam and the potential for future collaborations; and Dicerna's financial position, expectations about current or future clinical data and timelines, collaboration funding, expenses and cash usage.Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of Dicerna's latest Forms 10-Q and 10-K filed with the SEC.While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so if our views change.Now, I'd like to turn the call over to Doug Fambrough, Dicerna's President and CEO. Doug?

[Douglas Fambrough:]

Thank you, Lauren. Good afternoon, everyone. And thank you for joining us. When I set forth our vision for 2020 in our last quarterly call in February, I said that we were starting the year with substantial momentum and the plan and expectation to accelerate that forward progress over the course of the year with multiple important milestones across our clinical development programs, organizational growth and maturation and continued progress with our collaborative alliances.With the very rapid spread of COVID-19, it became evident in the weeks thereafter that this public health emergency would impact nearly every aspect of life on a global scale, including drug development and including Dicerna.While we have made adjustments to our clinical development expectation and our day-to-day work processes, like most in the industry, I am very proud of the incredible work that our dedicated employees have been able to accomplish during this highly uncertain and challenging time, work that has enabled us to continue to deliver on nearly every aspect of our business within our immediate control and to plan, prepare and put in place measures that we think should enable us to rapidly move ahead on all fronts once current restrictions are lifted in the various territories across the country and around the world in which we conduct clinical trials, source materials and otherwise conduct our business.With key IT infrastructure and support systems already in place, the company-wide transition to remote work from mid-March was a smooth one, and we've been successful in implementing staggered work schedules and appropriate social distancing for lab personnel and other staff whose presence has been required for critical on-site work.The entirety of this experience has brought a finer appreciation for the quality of the individuals who make up Dicerna. They are some of the best in the business, and I am inspired by and proud of this team's dedication and ability to adjust to the uncertainties that this pandemic has presented.Despite the challenges that we are undoubtedly still to face from the virus on a macro level, our strong cash position, business model and our people position us well to keep advancing and building upon our recent accomplishments.The most recent of these was the announcement of two new agreements with Alnylam in early April, adding to our portfolio of collaborative arrangements with some of the world's leading biopharmaceutical companies.With these agreements, Alnylam and Dicerna have reached common ground that will enhance and accelerate our ability to bring new orphan product candidates to market, a great outcome for both companies, but above all, a great outcome for patients.The first of these agreements pertains to nedosiran, our lead clinical candidate for the treatment of primary hyperoxaluria, or PH, an ultra-rare, life-threatening genetic disorder that initially manifests as complications in the kidneys.Our agreement with Alnylam for PH is a straightforward, non-exclusive, cross-licensing arrangement that relates to both our and Alnylam's intellectual property. In simple terms, this agreement ensures that each party has full freedom with respect to each company's patent portfolios to develop and commercialize our respective investigational RNAi therapies for PH.In our case, nedosiran targeting the LDHA gene for PH types 1, 2 and 3; and in Alnylam's case, lumasiran, which targets the HAO1 gene for PH type 1. As a result of this cross-license, Alnylam will be obligated to pay us mid to high single-digit royalties on worldwide sales of lumasiran from launch, and we will be obligated to pay Alnylam low single-digit royalties on sales of nedosiran.We are very pleased with the outcome of this agreement and are gratified to be in a position to benefit financially and at a respectable rate from sales of Alnylam's candidate, while at the same time, advancing our differentiated product candidate intended to benefit all patients with PH, regardless of mutation or type.The second agreement with Alnylam relates to A1AT and is a global development and commercialization collaboration that underscores our commitment to this underserved patient population and our conviction in RNAi as the optimal modality to treat patients with the liver manifestations of the disease.A1AT deficiency is a genetic disorder that causes accumulation of misfolded A1AT protein in the liver, which can lead to serious liver disease and jaundice, liver fibrosis and cirrhosis. There are currently no approved therapies to treat liver manifestations of A1AT, and management involves lifestyle modifications and supportive care. Patients with advanced disease may require a liver transplant.Under our agreement with Alnylam, we are taking responsibility for their candidate molecule, ALN-AAT02, which, like our own, is in a Phase I/II clinical trial for the treatment of A1AT deficiency-associated liver disease.Per the agreement, we intend to take forward the best candidate for these patients based on our evaluation of the potency, safety and development timeline of the two drug candidates.Dicerna will lead development and US commercialization of the selected candidate, and Alnylam has the post pivotal opportunity to opt-in for commercialization, ex US. If Alnylam exercises its opt-in right, we will pay each other tiered royalties on net product sales generated in our territories at rates dependent on what candidate is ultimately commercialized.This means that, first, Alnylam would pay Dicerna low double-digit to high-teens royalties and we would pay Alnylam low single-digit to high single-digit royalties.If Alnylam does not opt-in to its commercialization right, we would retain worldwide commercialization rights in exchange for milestones and royalties, also at a rate dependent on which candidate we move forward. And we would have the ability to partner with another company on ex US commercialization.We are very pleased to now have these two agreements in place, enhancing and accelerating our ability to bring these orphan product candidates to market. And in the case of the cross-license, putting to rest the potential for costly litigation related to our respective IP for our PH candidates.Turning to our pipeline. In late March, we provided an update on our response to the pandemic and its projected impact on some of the trials supporting our core clinical programs. While there are some new updates to share today, they are incremental as the coronavirus' impacts and government's responses around the world vary in terms of timing and execution.For nedosiran, our PHYOX2 pivotal trial continues, albeit at a slower pace than at the outset of the year. Underway in multiple countries around the globe, trial enrollment for PHYOX2 has been subject to government responses to the realities of the virus' impact at a local level, with clinics' responses and actions varying from location to location and over time. As of March, we gauged the then-current expectations around the pace of enrollment at each of the sites and, as a result, withdrew our previous expectation for enrollment completion in the first half.The clinical team at Dicerna, led by Ralf Rosskamp, has done a remarkable job of staying on top of the situation at each trial site and has been working with investigators, local institutional review boards and regulators in an effort to maintain continuity of care for patients currently enrolled in our PHYOX2 pivotal study.We have been implementing emergency protocol amendments to allow patients to continue this study with nurse-administered, home-based dosing and telehealth safety follow-ups with investigators, which began in April. As a result of these efforts, all previously enrolled patients have remained in the trial.Full resumption of enrollment will be on a site-by-site basis as some areas will open up sooner than others. As of today, we have begun to see certain sites impacted earlier in the virus' spread starting to take steps to continue sourcing and screening possible PH patients. As of now, we believe certain key European and US locations could be back online and enrolling within the next few weeks.That said, it is too soon yet to provide a revised timeline estimate for completion of PHYOX2 enrollment or to ascertain the impact to our NDA submission timing. So, we will continue to closely monitor the situation and provide an update when we have greater clarity.Also impacted by COVID-19 is initiation of our planned supplemental PHYOX trials, namely PHYOX4 and PHYOX7, which were expected to begin in the first half; and PHYOX8, which we had planned to initiate in the second half of this year, each subject to regulatory approvals. At this time, we do not expect PHYOX4 and PHYOX7 will be able to initiate as originally planned and we are gauging our options for PHYOX8 initiation.At the current time, we believe that data from these studies will be available for inclusion in the NDA. However, none of these studies are required for NDA submission, but they are nonetheless studies helpful to characterizing nedosiran and are of continued interest to us as they may bear on the potential drug label.For all, it is too early to give reliable expectation for study starts. So, as with PHYOX2, we'll continue to monitor the situation, do what we can to prepare to initiate when feasible and provide an update when we have a clearer line of sight on timing.Our PHYOX3 multi-dose, long-term safety trial continues to progress with nearly all patients who required an alternate dosing arrangement due to site restrictions now having transitioned to home-based dose administration and telehealth follow-up by investigators for most future visits.As of May 4, we had 17 patients enrolled in PHYOX3, up from 14 patients that were included in our March interim results analysis.As a rollover, open-label, multi-dose study, greater visibility into nedosiran safety and efficacy with long-term, once-monthly administration will only expand as more time elapses in the PHYOX3 trial, but we are nonetheless very encouraged by the results we saw from the first interim analysis in March.Of the four patients who had been dosed for at least three months, three of which are type 1 patients and one a type 2 patient. All four had normal or near-normal urinary oxalate levels on at least two visits and nedosiran appear generally well tolerated with no injection site reactions and no drug-related severe adverse events. At that time, total patient exposure had reached nearly two years in the PHYOX3 trial.The medical conference, OxalEurope, originally planned for the first half this year, will now be taking place in December. So, instead of that venue, we plan to move forward and present data from PHYOX3 on our own as part of our R&D Day planned for August, the timing of which should provide us with a much more mature and robust data set to present relative to our preliminary interim results in March.From a commercial preparation standpoint, we continue to put in place and roll out key infrastructure that we will need for the planned launch of nedosiran and are continuing to selectively hire for key roles.Clearly, visibility on timing around the PHYOX2 trial and to what extent the slower pace of enrollment will have an impact on timing of our NDA submission are in mind as we move forward with hiring plans, but we are continuing to add people to the team at appropriate times, so that we will be ready to move ahead once we have greater clarity on key milestones.Turning now to alpha-1 antitrypsin or A1AT deficiency-associated liver disease program. With the antitrust analysis completed as of mid-April and the agreement with Alnylam now effective, we have already begun a deeper dive on the data and profile of ALN-AAT02, which will help inform our next steps in evaluating both ALN-AAT02 and our own A1AT Phase I/II candidate, DCR-A1AT, which received orphan drug designation from the FDA in March.We plan to conduct certain non-clinical studies of ALN-AAT02 in the near term to better inform our selection between ALN-AAT02 and DCR-A1AT for further clinical development. We expect to make a selection prior to the initiation of the patient cohorts of the Phase I/II clinical trial program and to advance only one candidate into patient testing.As we have previously stated, we believe our Phase I/II trial will be sufficient for subsequent advancement to pivotal clinical development. There are currently no approved therapies specifically designed to treat the liver manifestations of this condition, and we strongly believe that with this collaboration for A1AT, we are better positioned to advance the candidate best suited to treat patients with this disease.Following our business update in March, enrollment in the healthy volunteers portion of our ongoing Phase I/II study of DCR-A1AT was functionally paused as a result of site restrictions arising from COVID-19 with follow-up continuing for the current dosing cohort.About a week ago, we received very encouraging news that certain sites will be in a position to begin enrolling healthy volunteers in the next dosing cohort in the next few weeks. The net effect for us is that, assuming there are no new developments with COVID to change the plan, dosing in the next cohort should be gated only by the pace of participant screening and enrollment.While pleased that we are gaining some clarity on trial continuation for DCR-A1AT, safety for those participating in our trial remains paramount and we are taking additional precautions in an effort to safeguard their health. As the trial moves forward, any participants presenting with COVID-like symptoms will be tested. And in the event a participant is diagnosed with COVID-19 post dosing, they can receive augmentation therapy if their A1AT levels are low.Despite this positive news, for now, we are unable to give guidance on completion of the healthy volunteers portion of the DCR-A1AT trial or the initiation of patient dosing with either ALN-AAT02 or DCR-A1AT, but we'll continue to monitor the situation, gauge our progress and plan to provide updated program timelines at a later date.Now turning to RG6346, our third core development program that we are developing in collaboration with Roche. RG6346 is a GalXC-based investigational treatment for chronic hepatitis B virus infection, a serious liver infection that can result in advanced liver disease or liver cancer if not treated effectively, and which claims more than 887,000 lives annually.We are currently conducting a Phase I proof-of-concept study in patients with HBV. As I summarized on our last call, this trial comprises three groups

[Jack Green:]

Thank you, Doug. It's also been a pleasure to work with you, and I wish you and all of our colleagues here at Dicerna all the best in the future.I'd like to briefly walk through the key financial results and direct you to our financial results press release and quarterly report on Form 10-Q issued earlier today for additional details.Net loss for the first quarter ended March 31, 2020, was $22.5 million or $0.31 per share compared to $26.2 million or $0.38 per share for the same period in 2019. The decrease in net loss was primarily driven by an increase of approximately $30.9 million in revenue related to our collaboration programs period over period, which was partially offset by increases in R&D and G&A expense during the quarter, tied to increased spending across our clinical programs, increased spending related to commercialization preparation activities and headcount increases in R&D and G&A.R&D expenses were $43.2 million for the first quarter compared to $21.6 million for the same period in 2019. The $21.6 million increase year-over-year was primarily due to increased manufacturing costs, clinical study costs and employee-related expenses due to an increase in headcount to support our growth.We expect overall research and development expenses to increase in 2020 and for the foreseeable future as we ramp our clinical manufacturing activities, continue clinical activities associated with our core product candidates, continue activities under the Novo, Roche, Lilly, Alexion and BI agreements, and undertake additional non-clinical work to evaluate ALN-AAT02 under our agreement with Alnylam.As it relates to the balance of 2020, we expect to see an increase from Q1 to Q2 of at least the same magnitude as was seen between Q4 and Q1 2020, with a continued, but smaller increase in subsequent quarters.General and administrative expenses were $16 million for the first quarter 2020 compared to $9.7 million for the first quarter 2019. The increase was primarily due to employee-related expenses related to the increased headcount to support our growth. We expect G&A expenses to gradually increase in 2020 as compared to 2019, largely due to investments in staffing and market-readiness activities.During the first quarter 2020, we recognized $34 million in revenue from our collaborative agreements with Novo, Roche, Lilly, Alexion and BI compared to $3.1 million from our Lilly, Alexion and BI collaborations in the first quarter of 2019.As of March 31, 2020, we had approximately $551.1 million of deferred revenue on our balance sheet, representing the aggregate transaction price allocable to future performance under our company's collaborations. Of that amount, approximately $223.6 million was current deferred revenue expected to be recognized as revenue over the next four quarters, and approximately $327.5 million was non-current deferred revenue, expected to be recognized as revenue in future periods.As a note regarding the $223.6 million that we expect to recognize over the next four quarters, this is not a straight-line recognition, but ramps substantially next quarter and more or less levels off over the next three quarters.Let me take a minute to walk through the components of deferred revenue by collaboration. With the Alexion collaboration, deferred revenue totaled approximately $65.2 million, with $36.8 million classified as current and the remaining $28.4 million classified as long term.We expect the majority of the deferred revenue to be recognized through the second quarter of 2022. Deferred revenue at March 31, 2020, includes $15 million in research milestones achieved or likely to be achieved.For the Lilly collaboration, deferred revenue totaled approximately $126 million, with $45.5 million classified as current and the remaining $80.5 million classified as long term. We expect the majority of the deferred revenue to be recognized through the fourth quarter of 2022.For the Roche collaboration, $180.7 million was recorded as deferred revenue as of March 31, 2020. Of that amount, $106.6 million is classified as current and expected to be recognized as revenue within the next 12 months, primarily associated with the completion of our Phase I study of RG6346. We expect the balance to be recognized as revenue during the remainder of the three-year research term, which is extendable by an additional two years up to two years.For the Novo collaboration, $177.6 million was recorded as deferred revenue at March 31, 2020. Of that amount, $33.1 million is classified as current and expected to be recognized as revenue within the next 12 months, with $144.5 million expected to be recognized over the remaining portion of the five-year research term, which is extendable by up to two years.And finally, for the BI collaboration, deferred revenue totaled $1.6 million, all classified as current.As of March 31, 2020, we had $706.9 million in cash, cash equivalents and held-to-maturity investments compared to $348.9 million as of December 31, 2019. We believe that our cash, cash equivalents and held-to-maturity investments and expected revenue from our existing collaborative agreements will be sufficient to fund our operating plan into 2023.This plan includes our expectations to advance nedosiran through pivotal development, regulatory filing and potential commercial launch, completing the proof-of-concept study of RG6346 in participants with HBV infection, conducting non-clinical studies of ALN-AAT02 and advancing either ALN-AAT02 or DCI-A1AT through Phase I/II trial, and initiating and conducting research and development programs with our collaborative partners.Finally, as we noted in our press release this afternoon, we believe our supply of investigational medicines is sufficient to support ongoing clinical trials and that our supply chain to date is fulfilling our requirements across all programs.We have also taken steps to mitigate potential future impacts to the supply chain by purchasing critical materials and drug substance ahead of near-term requirements and by engaging alternative suppliers. As a result, we have been able to increase our stock of key materials required to meet the needs of the company and our collaborative partners through mid-2021.With that, I would like to turn the call back over to Doug.

[Douglas Fambrough:]

Thank you, Jack. While we and the world continue to face uncertainties brought about by the COVID-19 pandemic, there are steps that we have and will continue to take as a society and here at Dicerna to prepare for the future.We have grown substantially over the past year, yet we remain a nimble company with an entrepreneurial mindset and the flexibility to adapt quickly to changing circumstances. This, coupled with our business model that marries together risk mitigation, diversification and significant growth potential, as well as our strong cash position, all provide Dicerna with a solid foundation to not only face what lies ahead, but to enable us to thrive and succeed.With multiple data presentations at our upcoming R&D Day in August, and hopefully, more clarity on timing for important milestones from our ongoing clinical trials, the next half of 2020 looks like it will be eventful, and I look forward to updating you on our progress.Before I open the call to questions, I want to take a moment to thank all of the first responders and those on the front lines of this pandemic, from healthcare workers, to cleaning crews, to staff at our local stores. Whether your background is in medicine or something altogether different, you have become a de facto part of the healthcare community, making it possible for scientists and others within our industry to continue the work necessary to create and provide new medicines here in Massachusetts and beyond. We applaud you and thank you for your sacrifices and selflessness.I would like to now open the call to questions.

[Operator:]

[Operator Instructions]. And you have a question from Ed Arce of H.C. Wainwright.

[Ed Arce:]

Hi. Good afternoon, everyone. Thanks for taking my questions. And congrats on a long series of continued progress through your pipeline.

[Douglas Fambrough:]

Thanks, Ed.

[Ed Arce:]

So, first of all, I know you went into some length in your prepared remarks, Doug, around the data readouts and the R&D path in general, now that you have both candidates for A1AT. But I was hoping you could just further clarify how you see that rolling out to the point where you have a decision now to make to go with one or the other.

[Douglas Fambrough:]

So, Ed, I'm not sure I can give a lot more insight into our selection process at this point because we're very early in the process. As you could appreciate, until we completed the antitrust analysis, there had been limited data sharing, reflecting the potential for us to remain competitors in that space. And so, we are only now doing a deep dive on ALN-AAT02.But I expect that it is going to be some number of months, so not weeks and not years, during which we'll make the decision. And with one's thinking about critical path timeline, we are hoping that in the event we choose DCR-A1AT, there is no divergence from our critical minimal time path.So, I think that sets us up for a decision later this year, as I mentioned in the prepared remarks, based on the safety, the potency and the timelines associated with the respective development paths for both compounds.

[Ed Arce:]

Okay, great. A couple more for me, if I could. The number of patients that you mentioned out of groups B and C with the Roche HBV program that went into the extended follow-up, I think I missed those numbers. Could you repeat those again?

[Douglas Fambrough:]

Sure. We gave numbers for the first two of three cohorts in group C, 1.5 milligrams per kilogram, where three of six participants went into extended observation, and the 3.0 milligrams per kilogram cohort where four of six went into extended follow-up. And noting that only four of six patients in any given cohort receive active drug and there are two on placebo.

[Ed Arce:]

Excellent. And then, the announcement today that Roche has decided to select their first GalXC target. I just wanted to make sure, I believe from the terms of their agreement, there were up to two candidates that could be selected. Is that right?

[Douglas Fambrough:]

Well, we've got the architect of the deal here. So, Jim?

[James Weissman:]

Hey, Ed. Good to talk to you. It's Jim Weissman.

[Ed Arce:]

Hi, Jim.

[James Weissman:]

Actually, they can select up to five and move three forward. That's the general structure. It's pretty simple.

[Ed Arce:]

Okay. And then lastly, just a quick question. On your R&D Day in August, I know that you're still waiting to figure out whether that will ultimately be in person in New York or virtually. Can you say that that would be sometime in sort of second half of the month?

[Douglas Fambrough:]

No. I think it will probably be toward the beginning. We have – I think it's sort of fair to say, we're tentatively targeting the 6th, but that could change. However, it's very concrete that we will be doing an R&D Day. But, yeah, it's targeted for the earlier part of August.

[Ed Arce:]

Great, thanks so much.

[Operator:]

Your next question is from Umer Raffat of Evercore.

[Umer Raffat:]

Hi, thanks so much for taking our questions. Doug, I know there's so much debate on what part of the gene is targeted for the HBV program and even various companies fall out very differently on this debate, and that's fine.I guess, from our perspective, it will be very helpful to hear you set the expectations appropriately heading into the R&D Day.And I had a three part question, if I may. It's all about the same thing. So, you gave very helpful numbers, obviously, on the each of the cohorts. And one thing I am wondering is, if you do have data on some patients up to seven months out, can you speak to whether the surface antigen log curve rebounds or it's more or less durable of at least two log reduction after you take the last dose, first?Second, your expectations for the depth of reduction. Do you think you can hit three log reduction plus consistently in multiple patients because you probably have that on a blinded basis?And finally, just very quickly, if you could remind us if you have both e-antigen-positive as well as e-antigen-negative patients? Thank you very much.

[Douglas Fambrough:]

Sure. And thanks for being on the call, Umer. I can't answer all of your questions, but...

[Umer Raffat:]

Just answer the first two.

[Douglas Fambrough:]

So, in three out of four. So, as you are aware, we chose to target the virus in a different place that leaves the X gene unsilenced, and we did that based on what we believe is the highest fidelity mouse model. Now, bear in mind, it's a mouse model. Whether it's going to translate into humans is, of course, an experimental question in the clinic, right? And we're going to find that out.But we are targeting every transcript that makes S, and so I've always had a lot of confidence that it was very unlikely that we would do more poorly than another program that targeted, in addition, an additional transcript targeting a different protein. So, I think that the first expectation I'd set is, which is do no worse than anybody else, even though we are doing one less gene.Now, when you look at the behavior in that model, we see a marginally higher suppression of S, and we see extended duration before there is a rebound. Of the two, particularly when looking at a small N, I would say it's going to be easier to observe if translation of duration of effect comes through than a marginal difference in increased S reduction, particularly given the variability of the disease and the small N. So, personally, that's what I'm sort of looking for the most.What we've seen with other programs is a knockdown with a nadir of 1.5 to 2 logs. And so, I think it would be optimistic – overly optimistic for us to set an expectation of knockdown that's in addition to that. But it would be very nice if that was to be seen. 3 logs would be extraordinary. We can always keep our fingers crossed, but I think that is particularly aggressively optimistic.And on the final question, e-positive and e-negative, we do have both in the trial, but we don't have a fixed ratio between them. It's just noted when patients enroll.

[Umer Raffat:]

That's really, really helpful, Doug. Thank you so much.

[Operator:]

Your next question is from Yaron Werber.

[Brendan Smith:]

This is Brendan on for Yaron. Thanks very much for takin the question. And congrats. I actually just wanted to ask two really quick ones. First, just about the R&D Day later in the year and the look at the PHYOX3 data. Can you just kind of give us a quick sense of what kind of data we might expect and how many patient numbers and kind of like the readout you're thinking we might have by then?And then, my other question is, actually, I think you mentioned how you've been able to kind of keep all your currently enrolled patients maintaining their treatment, ongoing PHYOX trial, and that seems pretty exciting. Is this something you guys are kind of considering exploring a little bit more moving forward that you would maybe consider taking into a package at some point? So, I'm just hoping to get your thoughts on that. Thanks very much.

[Douglas Fambrough:]

Sure thing. And thanks for dialing in, Brendan. Let me pass to my colleague, Ralf Rosskamp, to address PHYOX3 data at R&D Day and maintaining patients on treatment.

[Ralf Rosskamp:]

Yes. Thank you for the question. As you heard, we currently have 17 patients enrolled into the PHYOX3 study. And we just look at the data, what to expect. In August, I would expect the majority of patients, of course, to have more than three dosages received for nedosiran. And we had our first dosing in October of last year, so we expect also a good amount of those patients to have reached the six – at least six month endpoint, which will give us a good read how that would look like in the 201 study. So, I think it will be much substantial than what we said end of March, where we only reported from four patients who had at least three-month data. So, we will have a more substantial patient and data at this time.The second part of the question, why we haven't lost any patients, we were kind of in a lucky situation that we had already a home nurse assigned to each of our patients, because we have those home nurses coming to the patient's home at the day when they collect their 24-hour urine. So, they went through with them through the training, what to do, what not to do, and they came back next day to actually collect the 24-hour urine and ship the urine. So, we're in a very fortunate situation that we had already this home nurse element in our trial. So, what we needed to do is, with home nurses, after we made these protocol amendments allowing dosing by home nurses and taking blood samples by home nurses, to adequately train the nurses. But since they were already assigned, some of them, they knew the patients already, it made it much easier for us than other companies who didn't have that element in their trial. Does that answer your question?

[Brendan Smith:]

Yes. I guess I was just kind of curious if this idea of at-home administration, maybe on a more commercial basis, is something you're looking to explore moving forward or if that's not really a priority right now?

[Ralf Rosskamp:]

Well, we always have the plan after the initial six-month treatment in our double-blind, placebo-controlled trial, when patients were rolled over in our long-term trial, let patients administer at home because we have this – right now, this easy, fixed-dose regimen. And it makes it easy for patients. So, the plan always was to have home administration in the rollover 301 study.

[Brendan Smith:]

Okay, great. Thanks so much.

[Operator:]

Your next question is from Stephen Willey of Stifel.

[Stephen Willey:]

Yeah. Thanks for taking the questions. Just a couple of quick ones for me. So, with respect to the additional targets that Roche can select and move forward, have you indicated as to whether or not those are all viral targets per se or is Roche also potentially interested in some host targets as well?

[Douglas Fambrough:]

The discovery collaboration is primarily focused on host targets.

[Stephen Willey:]

Okay. And just with respect to the – I guess the one undisclosed liver program that you guys still have earmarked in the pipeline, when might we hear a little bit more about what that program is and what the plans are?

[Douglas Fambrough:]

I think it's going to be next year. And I realize it may be a little bit frustrating. One thing about that program that I think is important strategically for people to understand is that it's not a rare disease program. And by putting it on the pipeline, even though undisclosed, we are signaling that Dicerna is going to be going after both rare and non-rare indications that meet our criteria, which include what we believe is an unusually high probability of success in the clinic and an innovative approach to a high unmet medical need. So, it's going to stick there as undisclosed for a few more quarters and it will be 2021 before we disclose it.

[Stephen Willey:]

Got it. Thanks for taking the questions.

[Operator:]

And your next question is from Mani Foroohar of SVB Leerink.

[Aravinda Kuntimaddi:]

Good afternoon, everyone. This is Aravinda on for Mani. Just two quick ones on our end. We were wondering if we can get further details on the Lilly collaboration target. Broadly, how should we think about the timing of trial initiation, the scale of potential economic milestones?And second question is for the A1AT program. Since you guys will be carrying the expense side of the collaboration, how should we think about the scale of the expense moving forward?

[James Weissman:]

All right. Hey, this is Jim. I'll answer the first question. We're going to leave the target unveiling to our partner as would be customary. The milestones are pretty well-known. For each of the milestones under the Lilly agreement, the total milestones are $350 million. With some targets, there's a little bit of a kicker. But, generally, it's about $350 million or a little bit above. Doug, would you answer the second question?

[Douglas Fambrough:]

Sure. On A1AT, of course, we have been budgeting for development program in A1AT, including through pivotal development. And with the assumption of responsibility for ALN-AAT02, there is some increase in expense. But because we are only planning to advance one of the candidates to patient testing, that incremental spend is relatively modest. We are initiating some non-clinical studies of ALN-AAT02, and that's in the single-digit millions expense. And that will be on top of our development program. Otherwise, I don't have handy what we would project the cost through approval, and I don't think that we have certainty on that total cost. But it's going to be of a similar order to the PH program expenses that we have faced in that development program.

[Aravinda Kuntimaddi:]

Great. Thanks a lot, guys.

[Operator:]

There are no other questions in queue.

[Douglas Fambrough:]

All right. Thank all for joining us today on our first quarter 2020 financial results and business update. I look forward to our next quarterly update and invite you to join us for our August R&D Day, for which we will provide more details – firm details – as we get closer to the date, including the exact date, time and format. Thank you for joining today's call.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. And you may now disconnect.