Dicerna Pharmaceuticals, Inc.
Q1 2019 Earnings Call Transcript

Published: 10 May 2019

[Operator:]

Good afternoon, ladies and gentlemen, and welcome to the Dicerna Pharmaceuticals First Quarter 2019 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded at the company's request. I will now turn the call over to our host, Kendra Packard, representing Dicerna Pharmaceuticals. Please go ahead.

[Kendra Packard:]

Thank you, Operator. Good afternoon, everyone, and thank you for joining us for Dicerna's First Quarter 2019 Financial Results and Operational Highlights Conference Call. For anyone who has not 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 www.dicerna.com. You may also listen to this conference call via webcast on our website, which will be archived for 30 days, beginning approximately 2 hours after the call is completed. Speaking on today's call will be our President and CEO, Doug Fambrough, who will discuss our pipeline progress and key milestones for 2019 and provide an update on clinical and preclinical development activities. Then our CFO, Jack Green, will review our first quarter financial results. Following our remarks, we will open the call for your questions. I'd like to remind the listeners that management will be making forward-looking statements on today's call, including, for example, expected timeline and plans for development of DCR-PHXC, DCR-HBVS, Dicerna's undisclosed rare disease program and other pipeline programs, expectations related to our preparations with Lilly, Alexion, Boehringer Ingelheim, expectations for discussions and possible opportunities with potential partners and collaborators and guidance regarding 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.

[Douglas Fambrough:]

Thank you, Kendra. Good afternoon, and thanks to all of you joining us on this call. With me today are Jack Green, our Chief Financial Officer; and Ralf Rosskamp, our Chief Medical Officer. Dicerna has been hard at work utilizing our proprietary GalXC RNAi technology platform to build a broad pipeline for diseases involving the liver. We currently have three novel programs in development for rare and chronic liver diseases, DCR-PHXC, DCR-HBVS and an undisclosed rare disease program. This is on top of our internal exploratory research and a broad array of discovery programs initiated in conjunction with our corporate collaborators. We are also working to extend our GalXC platform beyond the liver. I'd like to start by highlighting progress with our most advance program, our DCR-PHXC molecule we are developing as a potential treatment for all forms of primary hyperoxaluria, or PH for short. DCR-PHXC is the only RNAi drug candidate in development for the treatment of all forms of PH. Of note, in the first quarter, we announced updated data from our PHYOX1 Phase I clinical trial showing the potential utility of our lead compound DCR-PHXC to treat patients with PH1 and PH type 2. The results, as of March 14, 2019, show that a single dose of 3.0 milligrams per kilogram of DCR-PHXC brought urinary oxalate levels into the normal range, defined as 24-hour excretion of less than 0.46 millimole at 1 or more post-dose time points in 4 of 5 participants with PH1, including a mean maximal reduction of 24-hour urinary oxalate of 71% for the cohort. A single 1.5 milligram per kilogram dose led to near normalization, defined as 24-hour excretion less than 0.6 and greater than or equal to 0.46 millimole in 3 of five participants with PH1 dosed at this level, including a mean maximal reduction in urinary oxalate of 51% for the cohort. Among the three participants with PH1 dosed at 6 milligrams per kilogram and who have reached day 57 of the protocol, the mean maximal reduction in urinary oxalate was 76%. One participant in this cohort reached normalization and a second reached near normalization at, at least 1 post-dose time. One participant is -- in this cohort is still in follow up, and as I mentioned, 1 participant had not reached day 57. Based on these PHYOX1 data, we believe we have achieved clear proof of concept for the treatment of PH, justifying advancement of the program into a pivotal clinical trial. That pivotal trial, which we call PHYOX2 is a double-blind randomized placebo-controlled trial in approximately 36 patients with PH type 1 and PH type 2. Adult and adolescent subjects will receive a convenient monthly fixed dose regimen, enabling prefilled syringes at or shortly after product launch. We are currently screening patients at our activated sites and expect to initiate dosing of patients this quarter. Importantly, at a Type A meeting later in Q1 2019, we achieved agreement with the FDA on the primary endpoint for the PHYOX2 pivotal trial and alignment with the FDA regarding the path to full approval for the treatment of patients with PH type 1. We are continuing discussions on the path to approval for PH type 2 and PH type 3. Pursuant to the broader clinical development program for DCR-PHXC, we plan to initiate dosing of our PHYOX3 trial later this quarter. PHYOX3 is an open-label extension study enrolling patients that participated in our PHYOX1 Phase I study. And later, we'll enroll patients coming off other studies. PHYOX3 also utilizes the convenient fixed dose monthly dosing regimen employed in the PHYOX2 pivotal trial. Based on this schedule, we expect to have a multi-dose data in the fourth quarter from the first group of patients enrolling in PHYOX3. Later in 2019, we plan to initiate additional clinical trials for DCR-PHXC, including trials in patients with PH type 3, pediatric patients and PH patients with end-stage renal disease. I will now turn to our DCR-HBVS program for the treatment of chronic hepatitis B virus infection. In the first quarter, we initiated dosing of the healthy volunteer portion of our Phase I clinical trial program of DCR-HBVS. The healthy volunteer portion of the trial, which is the group A portion, is a placebo-controlled single-ascending dose trial to assess safety, tolerability and pharmacokinetics of DCR-HBVS. We have not observed any serious adverse events so far and only one mild injection site reaction, which resolved within 24 hours. Based on the dose escalation so far, we had been cleared to initiate dosing in patients with chronic HBV infection. Consequently, in the near term this quarter, we expect to initiate dosing of the group C patient portion of the trial. Group C is a placebo-controlled multiple-ascending dose trial testing 4 monthly doses of DCR-HBVS at dose levels of 1.5, 3.0 and 6.0 milligrams per kilogram. These patients will continue on their background nuke therapy. The trial includes a 3 months dosing period and at least 2 months of follow ups, which should allow us to see data from the first 1.5 milligram per kilogram cohort in the fourth quarter of this year with the higher dose cohorts available in the first half of 2020. Later this year, we expect to initiate dosing in the group B portion of the trial, which is a single-dose monotherapy trial of DCR-HBVS dosed at 3.0 milligrams per kilogram in patients who have been newly diagnosed with chronic HBV infection. This will allow us to explore the pharmacodynamic effect and duration of DCR-HBVS in the absence of other lines of therapy. Taken together, we believe this Phase I clinical trial program has the potential to generate proof of concept for DCR-HBVS in suppressing hepatitis B viral antigens, notably the hepatitis S antigen, and will pave the way for later combination trials with other mechanisms of action and development for the treatment of chronic HBV. With proof-of-concept data, we intend to seek a collaboration partner for the further development of this program beyond Phase I. Moving to our third declared program, our undisclosed rare disease program targeting a serious genetic liver disease. We are on schedule to file a Clinical Trial Application, or CTA, this quarter and will reveal more details about that program at that time. These 3 programs, along with early-stage development and exploratory programs, form a strong pipeline of proprietary GalXC-based programs around which we are building and forward reintegrating the company. For the rare disease programs, such as DCR-PHXC and our undisclosed program, we intend to develop these programs on our own through commercialization or opportunistically pursue collaborations in which we maintain a substantial commercial role. For the larger population programs, such as DCR-HBVS, we intend to seek a development and commercialization partner after proof of concept. Our program selection to date has been driven by several criteria, including unmet medical need and what we believe is a high probability of clinical success of these programs relative to industry averages. For program opportunities that do not meet our internal criteria, we seek development partners at the discovery stage. We plan to continue executing on this pipeline development strategy as our programs and pipeline mature and move beyond liver-targeted therapies and into other tissues. In executing on the strategy to date, we have entered 3 active corporate collaborations based on the GalXC technology. I'd like to now recap the progress with these strategic relationships. First, our collaboration with Boehringer Ingelheim, or BI for short, for the treatment of chronic liver disease starting with NASH. This collaboration was initiated in the fourth quarter of 2017 with work on a single liver target gene. Late in the fourth quarter of 2018, BI exercised its option to add a second liver target to the collaboration, triggering a $5 million payment to us. BI is responsible for future clinical development and commercialization of these programs, while we are eligible to receive development and commercialization milestone payments and sales royalties. I look forward to providing additional updates on this collaboration in the future. More recently, in the fourth quarter of 2018, we entered into a collaboration with Alexion and a major alliance with Eli Lilly. With Alexion, we are exploring the use of our GalXC technology with targets in the complement pathway, starting with 2 initial targets. As with BI, Alexion is responsible for future clinical development and commercialization of these programs, while we are eligible to receive development and commercial milestone payments and sales royalties. Our alliance with Lilly encompasses multiple efforts, including using our liver-targeted GalXC technology with cardiometabolic targets as well as collaborative development of technology to apply GalXC beyond the liver, specifically applying GalXC to additional cardiometabolic tissues and to neurological tissues. Under this collaboration, we will be working on the therapeutic areas of cardiometabolic disease, neurodegeneration and pain. The early months of these 2 collaborations have been very active. To date, we have initiated 9 discovery programs under these collaborations, involving both liver-targeted GalXC technology and our newer CNS delivered versions of GalXC. Our ability to simultaneously drive discovery in these collaborative programs illustrates the efficiency, robustness and reproducibility of our GalXC discovery and optimization methods. With the combined development capabilities of Dicerna as well as our partners BI, Alexion and Lilly and potentially additional partners in the future, we look forward to the advancement of a broad pipeline of GalXC molecules across diverse therapeutic areas. Finally, in terms of building our organization, I am pleased to welcome some key people to our team. First, we strengthened our Board of Directors with the addition of Marc Kozin, formally Vice Chair and Head of Healthcare at L.E.K. Consulting; and Anna Protopapas, President and Chief Executive Officer of Mersana Therapeutics; J. Kevin Buchi, former Chief Executive Officer of Cephalon and TetraLogic Pharmaceuticals, was appointed as Board chair. All 3, as you know, are well-known industry figures and will provide an important strategic direction as we move the company forward. Internally, we have also welcomed Hardean Achneck as our Head of Medical Development. Mr. Achneck has more than a decade of clinical development experience focusing extensively on designing and executing global clinical trials and will be instrumental in our operations as we advance clinical studies for our internal proprietary pipeline. Lastly, Regina DeTore Paglia has joined our team as Senior Vice President of Human Resources. Looking ahead to the remainder of 2019, we're very much looking forward to several important inflection points on the horizon. In the near term, we are on track as we advance DCR-PHXC for the treatment of primary hyperoxaluria. We expect to dose the first patient in the PHYOX2 pivotal trial in the second quarter of this year, and we also expect to begin PHYOX3, the long-term multi-dose open-label rollover extension initially for our Phase I study in the second quarter of this year. Participants in PHYOX3 will be dosed at the same frequency and dose level as those in the pivotal trial. As such, we expect that PHYOX3 multi-dose data should serve as a proxy for what the PHYOX2 trial data will look like. Later this year, we plan to initiate additional clinical trials for DCR-PHXC aimed at supporting an expanded product label, including a study in patients with PH type 3, a study in pediatric patients and the study in end-stage renal disease patients. Regarding DCR-HBVS for the treatment of patients with chronic HBV infection, we continue to dose healthy volunteers and expect to dose the first patient of this Phase I clinical trial in the second quarter of 2019. As already noted, we anticipate human proof-of-concept data to be available during the fourth quarter of 2019. We will also submit a CTA for our undisclosed rare disease program this quarter and will provide details on the program at that time. Finally, in April, we were notified that Dicerna was awarded $1.1 million in tax incentives through the Massachusetts Life Sciences Center's 2018 Tax Incentive Program. This incentive amount is based on our hiring commitment of new employees for the 2019 calendar year. And with that, move to the financial front, I want to pass the call over to Jack.

[John Green:]

Thank you, Doug. I'd like to briefly summarize the key financial results and direct you to our 10-Q filing for additional details. Net loss for the quarter ended March 31, 2019 was $26.2 million or $0.38 per share compared with $15.6 million or $0.30 per share in the first quarter of 2018. The increase in net loss was driven by the increase in operating expenses. R&D expenses were $21.6 million for the first quarter 2019 as compared to $9.9 million for the same period in 2018. The $11.7 million increase year-to-year was primarily due to a $4.6 million increase in manufacturing costs to support our clinical studies, a $2.7 million increase in clinical study costs due to increased activities associated with the DCR-PHXC and DCR-HBVS programs, a $1.6 million increase in platform-related expenses as well as a $3.4 million increase in employee-related expenses associated with increased headcount to support our growth. This was partially offset by a $1.3 million decrease in nonclinical study costs. We expect overall research and development expenses to continue to increase in 2019 and for the foreseeable future, primarily as the company completes clinical manufacturing activities, advances preclinical toxicology studies, continues clinical activities associated with its lead product candidates and increases activities under the Lilly and Alexion agreements. General and administrative expenses were $9.7 million for the first quarter 2019 compared with $4.3 million for the first quarter 2018. The increase is primarily due to a $3.1 million increase in employee-related expenses due to increases in stock-based compensation expense and to increased headcount and to an $800,000 increase in general and business development consulting expense. Consulting expense increased largely due to support for new product and business development initiatives as well as accounting support for implementation of new accounting standards in preparation for the planned compliance with Sarbanes-Oxley 404(b) in 2019. We expect G&A expenses to increase in 2019 as compared to 2018, largely due to investing and staffing and market-readiness activities. There were no litigation expenses in the first quarter 2019 compared with $3.2 million in the first quarter 2018. The 2018 expenses related solely to the trade secret litigation, which was settled in the second quarter of 2018. The final payment under the settlement was made in January 2019. During the first quarter 2019, we recognized $3.1 million in revenue from our collaboration agreements with Lilly, Alexion and BI as compared to $1.5 million from the BI collaboration in the first quarter of 2018. For the Alexion collaboration, we recognized $400,000 of revenue in the first quarter of 2019. As of March 31, 2019, we had $33.9 million of deferred revenue on the balance sheet, of which $8.9 million was classified as current. The deferred revenue resulted from the $22 million upfront payment, the $5.9 million premium on Alexion's equity investment as well as milestones received less revenue recognized since of the initiation of the collaboration in October 2018. Most of this deferred revenue will be recognized over the next 3 years. For the Lilly collaboration, we recognized $500,000 of revenue in the first quarter 2019. The aggregate amount of the transaction price consisting of the $100 million upfront payment along with the $48.7 million premium on Lilly's equity investment was recorded as deferred revenue to be recognized over the term of the initial research programs. As of March 31, 2019, the deferred revenue balance was $148.1 million, of which $46.1 million was classified as current. Like the Alexion collaboration, most of this deferred revenue will be recognized over the next 3 years. For the BI collaboration, we recognized $2.2 million of revenue in the first quarter of 2019 on the 2 BI targets. As of March 31, 2019, the deferred revenue balance on the BI program was $6 million, of which $4.8 million was classified as current. As of March 31, 2019, we had $371.2 million in cash, cash equivalents and held-to-maturity investments, which enables us to advance clinical trials for PH and HBV infection along with additional pipeline assets. By comparison, we had $302.6 million in cash and investments as of December 31, 2018. For the first quarter 2019, we had positive cash from operations of $72.3 million, which included $94.5 million of net proceeds from upfront payments and option fees received in Q1 2019 from our collaborations. We believe that our cash, cash equivalents and held-to-maturity investments will be sufficient to fund the execution of our current clinical and operating plan beyond 2020, which includes advancing DCR-PHXC through late-stage clinical development and regulatory filings, completing proof-of-concept studies for DCR-HBVS and participants with HBV and advancing our undisclosed rare disease program through initial clinical studies. These estimates assume no new funding from additional collaboration agreements or from external financing events and no significant unanticipated changes in costs and expenses. Excluding the $94.5 million of net proceeds received from our collaborations in Q1 2019 and any proceeds from any new collaborations, we expect that our operating cash use for 2019 will be in the range of $120 million to $135 million and will continue to increase as we advance our clinical studies and prepare for regulatory filings and commercialization of DCR-PHXC. Before we move on to Q&A, I'll turn the call over to Doug for some closing remarks. Doug?

[Douglas Fambrough:]

Thank you, Jack. I am very pleased with the strength of our financial position as we execute on our programs and collaborations. To reiterate our milestones, in the second quarter, we eagerly anticipate initiating dosing in our PHYOX2 and PHYOX3 trials for the treatment of PH, initiating dosing the first patients with HBV in our DCR-HBVS Phase I clinical program, and filing a CTA for our undisclosed rare disease program. Later in year, the fourth quarter, we anticipate reporting proof-of-concept data for DCR-HBVS in patients with chronic hepatitis B virus infection and providing a first look at multi-dose results of patients with PH and our PHYOX3 open-label extension study. It should be a noteworthy quarter and year. There's a lot to be excited about at Dicerna, and we remain focused on execution and advancement for the continued growth of our pipeline. Thank you, again, for joining us. And operator, please open the line for Q&A.

[Operator:]

[Operator Instructions]. Your first question is from Umer Raffat from Evercore.

[Jonathan Miller:]

This is Jon Miller. I'd like to ask a few questions on PHYOX2, if that's all right. Starting with the PH2 patients, we haven't seen many -- much data from PH2 patients that you dosed so far. Can you talk a little bit how many patients there you expect to have in the trial? And how many you think you need in order to get the indication for those patients as well?

[Ralf Rosskamp:]

Yes, we have not -- the protocol doesn't have a specific number how many patients will be PH1 and how many PH2. From the PHYOX1 study, so our ongoing study, out of 18 patients, we have 3 PH2 patients. So something like 10%, 20% that reflects the prevalence of the disease, and I would expect to see a similar number in the PHYOX2 trial.

[Jonathan Miller:]

I'd also like to ask a little bit about the transition to flat dosing. So what was driving your decision to move to flat dosing, A? And did -- you mentioned potential for prefilled syringes shortly after launch. What's the likelihood that you'll be able to launch with the convenient prefilled syringe versus not? And what are the gating factors there?

[Douglas Fambrough:]

So there are several reasons which led us to focus on monthly fixed dose as opposed to weight-based dosing as was done in the Phase I trial. And some of that had to do with patient convenience and some had to do with maximizing the efficacy of the product. With PH, as I think you know, oxalate is a metabolite that -- where you're not aware of your own levels. And we felt it was important with a drug that reduced levels into a safe zone and could potentially allow patients to come off of a disease-management regimen, hyper hydration, citrate, sometimes other treatments as well. A very onerous disease-management regimen. There was potential if one pushed the dosing interval for patients to rebound, and for example, if a dose was missed. And with a long dosing interval there was a concern in a lifetime chronic therapy situation that there would be instances of missed dose, and you really wanted to avoid rebound of oxalate, which would be unmanaged and unnoted by the patient and potentially causing kidney damage. So by going monthly, we built a robustness into the dosing protocol, such that it is -- seems safe to say based on the modeling that missing a dose in our monthly regimen would not result in substantial rebound going in two month period, in fact, you could probably miss two, but -- because the duration of effect of the drug seems more like a quarter. It also allowed us to go with a relatively small dose, 170 mg. Yet given the additivity of multiple doses contributing at any given time since the duration of effect is quite a bit longer than a month, to provide what corresponds to a high dose at any given moment. So for a 70-kilogram adult, if you could -- if you look at our duration of effect, for example, from the poster of updated data that we presented recently, it appears that any one dose is lasting at or near full effect for about 3 months. So if you've got about 3 months, 3 doses contributing for a 70-kilogram adult, that's more like equivalent dose of 7.2 milligrams given at one time. So it allowed us to provide a high dose level for maximum effect with a robustness. In addition, a fixed dose is something that provides convenience because there isn't any customization per patient. With respect to prefilled syringes, it is certainly a goal to have that at launch, but just the CMC process to make our way through that in a rapid period of time, maybe that we don't quite hit the goal. I'm not ready to promise that at this time. It's nothing special beyond the long list of regulatory requirements required in a CMC package that is required for this. So if not at launch then we do expect it to be shortly thereafter.

[Jonathan Miller:]

Great. Makes sense. Then one more, I guess. You mentioned in your press release last week, I think, that you have a planned interim in the PHYOX2 study of 24 patients. And you mentioned that was for a sample size of reestimation at that point. And I wonder with the potential is there for a reduction in the number of patients you need. And is there any potential for an acceleration in the expected trial readout?

[Ralf Rosskamp:]

This is Ralf, the CMO. The sample size is only reestimation and not for early stopping. So the result will be that the 36 patients are enough or we need more patients. But the result will not be that we stop early at 24 patients.

[Operator:]

Your next question is from Mani Foroohar from SVB Leerink.

[Mani Foroohar:]

A lot the focus is on PH, but I want to take a step back for one second. When you think about what a proof of concept readout would look like in HBV at this point, just give us a sense of what your -- in your mind, what are the goalposts that you're trying to land inside? Is it -- is the right answer log reduction? Just help us to understand what success or victory looks like in your mind.

[Douglas Fambrough:]

Sure, Mani. We believe the role of RNA interference in a multi-mechanism combination approach to HBV is a reduction in the S antigen. That is an activity that other mechanisms have had a lot of challenge achieving and is likely critical in allowing the patient's immune system to form a productive response. So we have been focused on S antigen reduction as the primary metric that we're trying to impact. That's driven our site selection within the virus. And it is our key focus in achieving proof of concept. So really, it is the amount of reduction of S antigen in patients that we observe in the trial. There is data from other -- prior RNAi trials that sets a baseline that certainly will be judged relative to. But I don't think at this point in the field there is a known threshold of what is significant. In any event, we're trying to do as best we can. And certainly, if we don't exceed a log, it'll be a big disappointment, but I would hope that we could go well beyond a single log.

[Operator:]

Your next question is from Stephen Willey from Stifel.

[Stephen Willey:]

Can you just remind us within group B and group C patient eligibility criteria with respect to e antigen status, are you agnostic to this or is there some kind of predefined cap on whether or not patients are positive or negative?

[Ralf Rosskamp:]

Yes. There is no allocation whether a patient is e positive or negative. And this is coming from our mechanism of action where we don't think there will be a difference between e positive or e negative patient, so we are agnostic to it.

[Stephen Willey:]

Okay. And then maybe just a follow-up on the prior question. I know that there is a lot of interest around cccDNA, and I think there has been some increasing thought exiting easel that maybe S antigen is not a great surrogate for what's happening with cccDNA. So are there any other biomarkers that you're going to be looking at in this trial, I guess, beyond S antigen? And do the strategic partners that could be interested in this product over the longer term, are -- do you get the sense that they're interested in more than just S antigen reduction?

[Douglas Fambrough:]

So Steve, we'll look at the standard array of viral markers, so DNA levels and e antigen as well. And of course, we look at a number of patient markers, and we'll look at 0 conversion in the patients. So as I mentioned in the answer to Mani's question, we are focused on S antigen reduction as the role that is primarily what siRNA or RNA interference could do in a combination. But I do believe that it is going to take a combination of mechanisms. I think we tend to view -- and I think strategic partners by and large are on the same page with us that an important part of the goal here is to end up with a productive immune response in the patients. And with S acting as a tolerizing agent, you probably need to -- a substantial reduction in S if you're going to be able to stimulate a host immune response perhaps with an agonist to a toll-like receptor or another immunomodulatory mechanism. So we don't see the S antigen reduction as, in and of itself, the answer to HBV. But we think it's a very important part of a multipronged approach to the virus, and we think it's what RNAi is uniquely good at. So we're playing a role as opposed to RNAi is going to be the sole agent. I don't think the data to date supports that RNAi can do it alone, but I also think the data to date supports the notion that you probably need a strong S antigen reducing agent in order to have a positive effect. And I believe that the majority of people in the field including the strategics think that's likely to be true. Obviously, no one knows for certain, but I think it's viewed as more likely than not amongst the strategics.

[Operator:]

Your next question is from Irina Margine from Cowen.

[Irina Margine:]

Congrats on the progress. Have you guys already said how many patients have committed to the rollover into PHYOX3?

[Ralf Rosskamp:]

No. We have not. As we have said in our press release. This quarter -- later this quarter, we anticipate the first dosing of those patients who are in our ongoing study going into the long-term extension study. So we don't know exactly how many patients will go into the long-term extension study, but I would be disappointed if not the majority of all patients go into the long-term extension because they have, after the single-dose administration, already shown very substantial reductions of urinary oxalate and an excellent safety profile. So therefore, my assumption would be that the majority of those patients will be going into the long-term extension study. But I don't have any data at this point.

[Irina Margine:]

All right. And will everyone continue dosing with their respective dose that they had received before? Or everyone switches to the fixed dose since...

[Ralf Rosskamp:]

Everyone will switch to the fixed dose. So this trial will be a proxy of what will be going on in the double-blind randomized trial.

[Irina Margine:]

Right. Okay. And then for the PH2 patients, could you remind us again the type of data or additional information that the FDA is still looking for in order to agree to a full approval pathway for these patients. Is it more a function of just the limited number of treated patients they've seen so far? Or there's a natural history, data sets or a combination of the 2?

[Douglas Fambrough:]

Knowing that there is more natural history data that's been submitted for publication, they asked us to submit that data that's coming and have another meeting to discuss it. Some of the data that is part of the submitted publication is a -- has already been publicly presented in various forums, including our R&D Day in November, and it relates to the outcomes in PH1 patients. So we remain optimistic that the outcome on this discussion with the FDA will be similar to the outcome with PH1 after we submit that data that's in the pipeline. With respect to PH3, we are in the process of collecting natural history data from registries, from patient narratives and that will also be part of future conversations with the FDA.

[Operator:]

Your next question is from Edward Nash from SunTrust Robinson Humphrey.

[Fang-Ke Huang:]

This is Fang-Ke Huang on for Edward. Just a quick one on safety. So you mentioned there is four serious adverse events in the PHYOX1 trial and they are not related to the study drug. But can you just give us more details on what are these adverse events?

[Ralf Rosskamp:]

Yes. I can do this. There's four serious adverse events in three patients. One patient had 2 hospitalization due to recurrent fever. One had a kidney stone, and the third one had hospitalization due to appendicitis.

[Fang-Ke Huang:]

Okay. Great. And do you have the timing regarding -- like how long focal treatment they have to put it as to adverse events?

[Ralf Rosskamp:]

I don't know exactly the exact timing. They were late in the follow up or late a couple of weeks after the single-dose injection. So none of them, as far as I recall, were in a temporal relationship to the single-dose administration.

[Operator:]

And your next question is from Ed Arce from H.C. Wainwright & Company.

[Antonio Arce:]

Congrats on getting the path to full approval for PH1 patients in your study. So first for me, I just wanted to go over, and remind us if you could, on the timing for both PHYOX2 and PHYOX3. I know you have the interim look, which we just discussed. But also as you complete the cohorts and you had mentioned that the proxy -- that the PHYOX3, in essence, acts as a proxy for PHYOX2 given the switching to the fixed dose. So if you could just walk through the time line for those two?

[Douglas Fambrough:]

So for both trials, we'll be initiating them this quarter, so very shortly. At this point, as we begin enrollment of PHYOX2, we're not able to guide to when we might have last patient in, which, of course, would determine when top line data is available. We hope to enroll this study efficiently. We have identified sites that report to us that they have more than enough patients. And we have another set of sites beyond those that we're working with as well to ensure that, in fact, we will be able to efficiently enroll the trial. As we get further into that trial, we may give some update on how that's tracking. But it's too early to say how long the enrollment period might last. With PHYOX3, that is going to be an ongoing study that patients -- including patients from PHYOX2 rollover into once they've completed on-trial phase, which is 6 months in PHYOX2. So that will continue, I guess, up until approval.

[Antonio Arce:]

Okay. And second question was just around some of these other patient groups that you are considering and looking at perhaps later in the year, PH3, pediatric and ESRD. What's the thinking around adding those sort of as the overall package? Are they going to be -- one or more of them part of the initial submittal to the agency? And how do those fit with the main group of patients?

[Ralf Rosskamp:]

Now we don't know in the end what the regulatory decisions will be. But our plan is, our initial Phase II registration study will include patients from 6 year and onwards. And once we have dosed the -- especially, the group 6 to 12 years old, we can then model and simulate what a younger patient group will need in terms of dosing. So I am pretty sure that we initiate this trial later this year or beginning of next year so that this will find its way into the label. The same is with the -- once we have agreement with the FDA on the appropriate patient population, inclusion and exclusion criteria and end point for the PH3 patients, we'll initiate this study so that at the time of filing, we have at least safety and some efficacy data for the PH3 patients. The end-stage renal disease, we are initiating first a single-dose study, more -- a clinical pharmacology study, where we look at the PK of the drug in patients with severe renal impairment and how much of the drug gets cleared by dialysis. And after we have initiated this trial -- after we have results from this trial, we will initiate a multi-dose study in patients with severe renal impairment and patients who are on dialysis. To what extent the timing and the amount of data will be sufficient that this gets into the label, I don't know at this time.

[Antonio Arce:]

Okay. That's helpful, Ralf. And last question for me, turning to HBV. Notwithstanding the consternation in the field among some anyway around the appropriate target and whether one is -- S antigen is the right way to look at the overall target population. What level do you think you need to reach in the S antigen reduction to be competitive as you look towards discussions with potential partners after the data?

[Douglas Fambrough:]

Yes. Thanks for the question, Ed. I think it's not possible to point to a specific number and say, that's the bogey that you have to hit. There is obviously a similar approach with one of our peer companies then -- and it's sort of natural to benchmark to that. But it's different trials and then different patients, and analyzed in a different lab, and of course, it's a different molecule that's approaching it. So I think that it would be wrong to finger one specific number. And I think what certainly we want to see and what I believe potential partners, collaborators would want to see is a substantial reduction, which is going to be something greater than one log and the more the better. But also understand that there really isn't an effective way to reduce S rapidly that's -- and it's out there. So if one comes in a little below or a little above, what an already partnered molecule with another strategic, I don't think that changes the decision tree inside a potential collaborator as to whether they want to include a RNAi molecule or not. And so I think the target is soft and not rigorously quantitative. Ultimately, it's not S antigen reduction that's going to make a therapy valuable and commercially successful, right? It's functional cures. And the functional cures are going to come in combination, and we're just not looking at that parameter. So the question is, are we going to do our role in the combination effectively, which is S antigen reduction. And we will be disappointed if it's not substantially greater than one log. And that sort of loose goal is the goal we're comfortable articulating.

[Antonio Arce:]

So really, there is the variable on the S antigen but there's also the unknown around the immunological component of this as the ultimate component or combination for a functional cure is that kind of makes, as you point out, the bogey a little hard to identify?

[Douglas Fambrough:]

Yes. And I think it's worth noting, we have of course spent substantial time with our clinical advisors talking about our program and our strategy. And we have gotten the very clear message from them that they're really focused on S antigen for what our drug can do, and are much less interested in the sort of target site and other antigens to date that's gone on in the field and more focused on let's see S go down.

[Operator:]

Your next question is from Keay Nakae from Chardan.

[Keay Nakae:]

Doug, just a quick question on the hepatitis B study. Do you -- does the company have any plans to present any of the safety data from the similar ascending dose in the normal healthy volunteers prior to the presentation of the data for the first cohort of HBV patients?

[Douglas Fambrough:]

We don't have any particular plans we've made to do that. If something very bad happened, we'd probably have to do that. Because there are no biomarkers to track and our sort of ideal result is we don't see anything. And because pharmacokinetics is lunky, although important to us, it may well be the case that we don't present anything until Q4.

[Operator:]

Your next question is from Mayank Mamtani from B.Riley FBR.

[Mayank Mamtani:]

Congrats on the progress. Mainly two follow-ups on PH. Could you talk to what disease-state activities you have ongoing? And which really -- coming to the point, how you've been able to, obviously, shift the regulatory landscape to get to full approval? And is that sort of something that you see now being the path for even peers? And then a follow-up on just along the same line is like, are you also thinking about other ways to measure as you think about real-world adoption like plasma, oxalate levels or maybe new modalities? Just how you think about the market adoption? Because with a rare disease -- and obviously, your enrollment will tell us what that rate looks like. Could you just talk to how the interactions with the community has been?

[Douglas Fambrough:]

There was a lot packed into that question. Thanks for sort of opening these issues. I wanted to refer to Ralf on other things we're looking at in the trials. And of course, in the case of one of the trials, end-stage renal disease, there is no urine to look at oxalate. And so Ralf, you want to address some of the other ways we're looking at PH disease parameters?

[Ralf Rosskamp:]

Yes. The secondary endpoints are, of course, stone events, stone burden. So we are looking at the buildup of calcifications in the renal system, which, hopefully, with a therapy like ours will be stalled. We are looking at the renal function in terms of estimated glomerular filtration rates. And we're looking, of course, at quality of life because as we had said previously, once patients in the open-label part will have reached normalization of their urinary oxalate while during consultation with their physician, we plan to eliminate the hyper hydration therapy and the citrate therapy, which I'm sure will have an impact on their quality of life. So there is -- in addition, we are measuring calcifications in the hearts, we are measuring calcifications in the -- in BI. And of course, in those patients who are -- it will be plasma oxalate as the appropriate marker, which should decrease. And on those who are on dialysis, it will be a reduction in the frequency of the dialysis, which these patients sometimes undergo 5 to 6 times a week. And hopefully with suppression of the oxalate production of the liver, this can be further reduced and would then also have an impact on the quality of life of these patients. So there's a full array of other measures in addition to urinary oxalate.

[Douglas Fambrough:]

To add a little to Ralf's comments. The discussion with the FDA on full approval was in fact motivated by the FDA. We had originally proposed the use of oxalate as a biomarker for accelerated approval. And I believe the FDA considering both the high unmet medical need and the strong effect observed in Phase I perks the issue of discussing what a full approval end point should be, and as I mentioned, we've reached agreement on PH1. I think that the FDA would have a similar posture with other parties with a comparable effect size. And then finally, if I understood your question correctly, you were asking a bit about our community engagement efforts. I think I'll -- suffice it to say, they're quite vigorous. There is a PH workshop in Boston in next month. We're very active in that and hosting events around that, and I would characterize our community outreach to the PH community as very substantial and broad because this is a critical program for us and is the single largest corporate effort we have right now.

[Mayank Mamtani:]

That's great. Appreciate the comprehensive color there. Just one follow-up I had. What about -- I mean are these patients like carefully not consuming oxalate in their food? Like what about the oxalate that is not generated from liver? Is that -- any -- a big consideration in the PH population?

[Ralf Rosskamp:]

Not really because the dietary component of building up of oxalate is only around 10%. It's less than in a normal person. There are studies who look at this very carefully. Despite this, patients are careful about not avoiding oxalate rich food, at least at some centers. We know some centers because we say it just accounts to 10%, it really doesn't matter what -- overall, the contribution of diet is very minimal towards the overall oxalate burden.

[Mayank Mamtani:]

And so is -- in any of those subsets you wouldn't necessarily need an adjunctive agent which reduces that oxalate from the food -- within the PH the different subsets that they -- that you have?

[Ralf Rosskamp:]

Not in patients with relatively intact renal function.

[Mayank Mamtani:]

Great. And then on hap B very quickly. I'm assuming these are going to be non-Western patients? Any consideration on the genotype status that you think is important?

[Ralf Rosskamp:]

Well, we have shown that we cover 97% of all genotypes and that goes across all genotypes. And the -- we have a predominant that's true Asian population, but we also have a site in Australia and we have a site in New Zealand. So I would also expect, even if it's a small group, to see patients outside of Asian background.

[Mayank Mamtani:]

Great. And then last question on just NASH. Moving on to a second target, does that just mean that again between you and the partner, you just want to -- given the heterogeneity of the disease you would probably want to explore multiple targets before going with any particular one forward? Or just how do you think about like as a collaborator on that disease, would be helpful?

[Douglas Fambrough:]

So in our collaboration with Boehringer, Bohringer has nominated the targets in both cases, the original target, which is one we had done some work on. And the second target, which is one that we had not done work on, and that Boehringer brought and proposed as a second target for their option. I -- we don't actually know the details of how Bohringer is seeing the potential for stratification of the clinical population and the roles that the different targets would play. So I can't comment on that. The way the collaboration is structured, Dicerna generates the clinical candidate and there is some collaborative work on preclinical disease models. But development responsibilities are at Boehringer.

[Operator:]

[Operator Instructions]. I am showing no further question at this time. I would like to turn the call over to -- oh, this concludes today's conference call, any closing remarks, sir?

[Douglas Fambrough:]

I want to thank everyone for their attention today. It's a very exciting time for Dicerna, and I'm -- it's really great to see you all following the story and paying attention as we travel this journey.

[Operator:]

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.