Regulus Therapeutics Inc.
Q3 2013 Earnings Call Transcript

Published: 14 Nov 2013

[Operator:]

Good afternoon, ladies and gentlemen, and welcome to the Regulus Therapeutics third quarter 2013 conference call. My name is Saeed, and I will be your coordinator for today. I would now like to turn the call over to Amy Conrad, Director, Investor Relations and Corporate Communications. Please proceed.

[Amy Conrad:]

Good afternoon, and thank you for joining us. On behalf of Regulus Therapeutics, I would like to welcome everyone to our conference call for the quarter ended September 30, 2013. I hope you've all had a chance to review today's press release. If you have not and you need a copy, you can visit our website at www.regulusrx.com. Joining me on today's call are Kleanthis Xanthopoulos, Ph.D., President and Chief Executive Officer; Neil Gibson, Ph.D., Chief Scientific Officer; and Dan Chevallard, Vice President, Finance and Accounting. During today's call, Kleanthis will provide introductory remarks and some general context. Dan will summarize our third quarter 2013 financial results, and Neil will provide an update on our microRNA therapeutic programs. Following your questions, Kleanthis will wrap up the call. Before we begin, I would like to remind you that this call will contain statements concerning Regulus' future expectations, plans and prospects, which constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our quarterly report on file with the SEC. In addition, any forward-looking statements represent our views only as of the date of this webcast, and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. At this time, I would like to turn the call over to Kleanthis.

[Kleanthis Xanthopoulos:]

Welcome, everyone, and thank you for joining us this afternoon. 2013 continues to be a year of significant growth and progress for Regulus. During the third quarter and recent period we focused our efforts on scientific execution. We reported positive preclinical results in multiple programs and established advanced progress of our strategic alliances in meaningful ways. Specifically, we presented positive preclinical data on RG-101, a GalNAc-conjugated anti-miR, utilizing the latest generation chemistry of targets microRNA-122 in the Late-Breaking Poster at the American Association for the Study of Liver Diseases. We presented positive new preclinical data from the miR-21 program for renal fibrosis and specifically for Alport syndrome at Kidney Week. We also demonstrated significant progress in our strategic alliance with AstraZeneca with their selection of a non-disclosed mircoRNA oncology target. In addition to this recent set of events and stream of positive news, we expect to end the year in a very strong financial position, and we hope to accomplish all of our goals under our Road to the Clinic Strategy. As a reminder, we launched our Road to the Clinic Strategy in February, which is focused on clinical candidates and the overall advancement of our microRNA pipeline in 2013. Specifically, we expect to nominate two microRNA candidates for clinical development by the end of 2013. We position to file our first application with regulatory authorities by the first half of 2014, and maintain a strong year cash position to support these goals. So far this year we've made good progress and have achieved a majority of these goals. RG-101 was the first microRNA candidate nominated for clinical development under this strategy. We expect to file a regulatory application for this program in the near-term and expect to potentially commence clinical studies in man beginning in early 2014. Our cash position remain strong and we are on track to end 2013 with approximately $110 million in cash, cash equivalents and short-term investments, potentially allowing us for several years of runway. Additionally, we believe our strong cash position will support our goals and objectives. We are making good progress on the nomination of our second microRNA candidate for clinical development. Currently, we anticipate our second microRNA candidate to be nominated for clinical development by the end of the year, may come from our Sanofi partner microRNA-21 program. This program is subject to the terms of the option agreement that we executed with Sanofi in June. Last week we presented positive new preclinical data from this program at the American Society of Nephrology Kidney Week Meeting, which Neil would describe in more detail later on the call. We're excited about the therapeutic opportunity that target microRNA-21 may have and we expect to provide you with an update on this program in the coming months. Our Road to the Clinic Strategy for 2013 has been an effective roadmap, as we transition to a clinical stage company. We have conditioned the company for clinical developments starting with RG-101, while advancing several other future clinical programs, which we believe will build significant long-term value for Regulus and our shareholders. Accomplishing all the goals on the Road to the Clinic will allow us to provide more detail in our strategy to focus our proprietary efforts in oncology and orphan diseases. We look forward to reporting progress to you on this front in the coming months. In addition to the significant progress made in our therapeutic pipeline, we've also made great advantage in our emerging biomarkers platform, which is designed to support our therapeutic programs. We have developed a highly reproducible proprietary platform for extracting, profiling and analyzing microRNAs from small volumes of serum. We successfully apply this platform to identify microRNA that are dysregulated compared to healthy in human samples. We plan to demonstrate the value of our emerging biomarkers technology by identifying microRNA biomarkers in certain patients' population of specific indication. An example of this effort is the relationship with Biogen Idec that aims to identify a microRNA signature for multiple sclerosis. Identification of such biomarker signatures will allow us to focus our clinical development to the patient who over express into microRNAs. We remain excited about this piece of our business and look forward to its utility as we enter into clinical development. To summarize, we had another productive quarter in recent period and hope to carry this positive momentum to the end of the year and into 2014. With that, I'd like to turn the call over to Dan Chevallard, our Vice President, Finance and Accounting for review our third quarter 2013 financial result and highlights. Dan?

[Dan Chevallard:]

Thank you, Kleanthis, and good afternoon. As Kleanthis outlined, we have continued to execute on our Road to the Clinic Strategy through the third quarter and recent period and are pleased with our steady progress. On the financial front, the third quarter was highlighted by our public offering completed in July, through which we raised $45.8 million on a net basis. As we reported on our last call, this financing helps to further strengthen our balance sheet, as we move into the clinic. Additionally, we continue to manage our operating costs and cash flow in the third quarter in line with our operating plan and ended the third quarter with $123.9 million in cash, cash equivalents and short-term investments. Turing now to our financial results. We recognized revenue of $6.1 million for third quarter 2013 compared to $2.8 million for the same period in 2012. Revenue during these periods consisted primarily of amortization of upfront payments received from our strategic alliances and collaborations, which we recognized over our estimated period of performance. Revenue in the third quarter 2013 included $5.4 million and $0.5 million from the Sanofi and AstraZeneca collaboration and license agreements, respectively. Our research and development expenses were $7.1 million for the third quarter of 2013 compared to $5.2 million for the same period in 2012. This $1.9 million increase was substantially due to costs associated with an expansion of our research and development personnel and increase in IND enabling activities for RG-101. We expect our research and development expenses to continue to increase over the coming quarters to the extent we commence clinical studies and initiate additional IND enabling activities. Our general and administrative expenses were $1.9 million for the third quarter of 2013 compared to $1.1 million for the same period in 2012. This increase was primarily attributable to additional headcount and incremental costs associated with being a public company. Our net loss for the third quarter of 2013 was $2.2 million compared to a net loss of $5.7 million in the same period in 2012. Net loss in the third quarter of 2013 included a non-cash gain of $0.7 million from the change in value of our convertible promissory note with GSK. Conversely, net loss in the third quarter of 2012 included a non-cash accounting charge of $1.7 million, resulting from a loss on extinguishment of debt, associated with the modification of the convertible promissory note and a $0.3 million non-cash charge from the subsequent change in value of the note during the quarter. Periodic change in the value of the convertible promissory note with GSK have been and continue to be primarily driven by changes in our stock price. Last quarter, we updated our cash projection to any year with at least $110 million in cash, cash equivalent and short-term investments, and we are on track to achieve that projection. We believe this strong cash position together with interest and potential milestone payments should enable us to operate into 2017 and support the achievement of our goals under our Road to the Clinic Strategy. Let me now turn the call over to Neil, to provide an update on our recent scientific progress.

[Neil Gibson:]

Thank you, Dan. As Kleanthis mentioned, we've had an exciting third quarter focused on scientific execution. Today I will describe the preclinical data recently reported in both the RG-101 and miR-21 fibrosis programs, and will provide you with a brief update on several other programs in our proprietary pipeline. Few weeks ago, we presented a Late-Breaking Poster on RG-101 at the AASLD Meeting in Washington DC. As a reminder, miR-122 is the most abundant microRNA in hepatocytes and this is a critical host factor for stability, replication and translation of all know HCV genotypes. RG-101 is a novel anti-miR-122 oligonucleotide therapeutic that is effectively targeting hepatocytes for the treatment of HCV through conjugation to GalNAc, a carbohydrate-based chemistry approach for asialoglycoprotein receptor-mediated delivery of the oligonucleotide. Utilizing the GalNAc conjugate and the latest oligonucleotide modification chemistry has significantly improved the potency of the active oligonucleotide of RG-101, by achieving targeted delivery of that oligonucleotide to the infected hepatocytes. We presented data from preclinical studies evaluating RG-101 for in vitro and in vivo potency, pharmacokinetic and pharmacodynamics, toxicology and safety pharmacology and inhibition of HCV replication. These positive data solidify the favorable properties of RG-101. It is potent, well tolerated and the mechanism is pan-genotypic with no resistance being observed to date. Specifically we have shown a single dose of RG-101, reduces HCV viral load up to 2-log reduction in the human chimeric mouse model, which can be infected with HCV. This reduction in viral load is similar to the potency achieved with the oral direct-acting antivirals in this model. Additionally the duration of action observed for RG-101 supports the potential for once-a-month dosing regimen, which we believe maybe commercially attractive. RG-101 is safe and well-tolerated and we are currently conducting additional preclinical toxicology and safety pharmacology studies in which multiple doses of RG-101 are being evaluated in two different species. We continue to be encouraged by the data we've seen to data and believe that RG-101 has the potential to be a best-in-class host factor agent for the treatment of HCV. In the near-term, we expect to file our first application with the appropriate regulatory authorities and expect to commence clinical trials in man early in 2014. In addition to the progress we have made with RG-101, we're also very excited about our program targeting miR-21 for the treatment of renal fibrosis, particularly the positive preclinical data that we presented last week at the American Society of Nephrology's Kidney Week Meeting. Within renal fibrosis, we have identified an orphan disease opportunity that fits within our previously outlined strategy, Alport syndrome, which is a genetic disorder characterized by end-stage renal disease and hearing loss. According to the Alport Syndrome Foundation, the prevalence has been estimated at 1 in 50,000 live births and is caused by genetic mutations that affect the type IV collagen family of proteins. The impact of the mutation in the collagen gene results in disruption to the structure of the glomerular basement membrane, increase expression of miR-21, increase in fiborsis and loses of renal function, which ultimately leads to end-stage renal disease and subsequent death. This is a devastating disease and there is currently no approved therapy on the market. At Kidney Week, we presented new preclinical data demonstrating the miR-21 plays an important role in the disease progression of Alport syndrome in a collagen 4A3 deficient mouse model. That data presented with our strategic alliance partner under our collaborator, Jeremy Duffield at the University of Washington demonstrated the treatment with miR-21 anti-miR candidate significantly decreased the rate of decline of renal fibrosis, restored the expression of key microRNAs involved in maintaining renal function and increased the lifespan of the mice by 20% to 50% depending upon the genetic background of the collagen 4A3 mutation. We anticipate that the second microRNA candidate to be nominated for clinical development by the end of the year under our Road to the Clinic Strategy may come from the miR-21 fibrosis program, pending the completion of ongoing toxicology studies. As a reminder this program is currently partnered with Sanofi and is subject to the option agreement that Kleans has highlighted earlier on in the call. We hope to report more in this program in the coming months. Also, in the recent period we communicated significant progress in our strategic alliance with AstraZeneca to discover, develop and commercialize microRNA therapeutics with AstraZeneca with selection of an undisclosed microRNA oncology target. Since we entered into the strategic alliance in August 2012, we have made significant progress in advancing our drug discovery efforts against the portfolio of AstraZeneca targets. We continue to collaborate on three exclusive microRNA targets in cardiovascular and metabolic disease and oncology, in which one of the programs that the alliance was formed around was miR-33 for atherosclerosis. We are pleased with the successful relationships we have built for AstraZeneca. Their development, support and commitment to RNA therapeutics will allow us to continue to innovate and we look forward to reporting additional progress on this alive. Turning to our proprietary portfolio, I'd like to provide you with a brief update on the programs that fit within our focus on oncology and orphan disease. In our miR-10b program for the treatment of glioblastoma or GBM, critical experiments are still ongoing and we find to asses our lead micro-RNA candidates in this program by the end of the year In our miR-221 program for the treatment of hepatocellular carcinoma, we have identified lead candidates that are active in vivo and are working to optimize our ability to deliver those lead molecules. We're using lipid formulation and also GalNAc conjugation technology that has worked efficiently for us within the RG-101 program. Additionally, we're utilizing our biomarker technology to support this program and we are seeking to identify microRNA signatures in the serum of HCC patients that would allow us to focus our clinical development and the patients who over expressed miR-221. In addition to our named programs, we continue to make progress on our exploratory efforts to identify attractive new microRNA targets that fit within our internal expertise and align with our focus on oncology and orphan disease. Innovation remains the foundation of our therapeutic pipeline and we look forward to expanding our exploratory efforts to build value for Regulus. To summarize, the third quarter was focused on scientific execution and we are pleased to have delivered great progress of several fronts. We have reported positive data for multiple programs and are excited to advance into clinical development with RG-101. If we execute on our timelines, we may be able to demonstrate human proof of concept with RG-101 by the end of 2014. Additionally, we expect that our second candidate to be nominated for clinical development under our Road to the Clinic Strategy, may come from our miR-21 program, pending the completion of the ongoing toxicology studies. With that, I'll turn the call over to Kleanthis, for his closing remarks.

[Kleanthis Xanthopoulos:]

Thank you, Neil. 2013, continues to be a year of significant growth and progress for Regulus. As you have heard today, it has been a very productive quarter in recent period and we hope to carry this positive momentum into the end of the year and into 2014. Our microRNA therapeutic programs, both partner and proprietary, continue to advance and mature. We have achieved a majority of our Road to the Clinic goals, which has served us as an effective roadmap, as we transition to a clinical stage company. In the near-term, we expect to file our first regulatory filing for RG-101 in HCV and expect to potentially commence our first clinical studies in early 2014. Additionally, we anticipate that the second microRNA candidate to be nominated for clinical development by the end of the year may come from the microRNA-21 fibrosis program. This upcoming period is exciting for Regulus, as we advance from the Road to the Clinic to achieving our clinical objectives in several programs. We look forward to reporting our programs. And with that, we're ready to take your questions. Operator?

[Operator:]

(Operator Instructions) Our first question comes from Simos Simeonidis from Cowen and Company.

[Simos Simeonidis:]

I was wondering if you can talk a little bit about the Alport syndrome opportunity commercially, maybe the number of patients in the U.S. and how are they treated right now? I know some of them or I think the majority go through dialysis in their 30s and 40s. How would this treatment fit into treatment paradigm?

[Neil Gibson:]

The numbers that we see for Alport patients can vary, depending upon the source. But if you look at the Alport foundation or look at the Center for Disease Control, the numbers you'll see are around 20,000 to 30,000 patients in the U.S. Currently, there is no approved therapy for Alport patients as we discussed. However, there are some clinical trials ongoing with ACE inhibitors to evaluate the potential of ACE inhibitors to lay the loss of renal function. And based upon the input we have from our key opinion leaders, most of the Alport patients will see an ACE inhibitor.

[Kleanthis Xanthopoulos:]

Simos, the market opportunity the way we look at is between 20,000 and 30,000 patients in the U.S. and equal number in Europe, very well recorded patients' databases. There is Alport Syndrome Foundation that is keenly interested in our program, which will accelerate the potential recruitment and execution of clinical trials. And given that there is nothing out there than an ACE inhibitor, we think the possibility of our commercial success is high. We will know a lot more about the clinical development path, once we have the candidate and have initiated discussions with the FDA.

[Simos Simeonidis:]

And if there a sort of a gradient to this severity of the different phenotypes of this syndrome, there are some patients that are symptomatic, but not very sick, all the way up to them being extremely sick. And is there any correlation within a potential gradient with the expression of miR-21?

[Neil Gibson:]

There is a number of different mutations or different types of mutations within the collegian genes that will lead to Alport syndrome. And depending upon that genetic lesion, will depend upon whether you have a very rapid progression of disease or a less rapid progression of disease. So the challenge is that there is so few databases available, Simos, to help us understand. The rate of decline of renal function, as patients progress towards transplantation or death. But clearly, in the animal models, miR21 is increased under the expression as the disease progresses.

[Simos Simeonidis:]

And second one is also on miR-21. You guys have being increasingly, I think bullish on these program, I guess the more data you see the more you like it. And you're saying that the second program might come from, the second IND might come from this candidate. And we know that at the end of the year, Sanofi has an option to do another deal with you. What I'm trying to get at is, if Regulus wanted to keep this in-house, or if Sanofi wants to take this into their partnership, you'll have to give them then. Can you walk us through the mechanics or what had it at the end of the year?

[Kleanthis Xanthopoulos:]

First of all, we are increasingly very bullish about this program, because the more data we accumulate the more excited we get. We presented last week data that showed increase in survival between 20% and 50%, depending on the different genetic background of the mouse model, which represents the difference in severity we see in human population, but universally all these patients unfortunately are going to die, all these patients are going to ultimately get on dialysis. So it's a devastating disease and we've seen a beautiful increase in survival that is dose dependent. That data really excited a lot of key opinion leaders when we presented them a week ago. So yes, we are very bullish about the program. The mechanics of the collaborations with the Sanofi are as follows, microRNA-21 was the on core program for the alliance we initiated in 2010. Part of the option agreement that we exercised in July of this year with Sanofi is that we are restructuring and reworking the alliance into a new strategic platform, where Regulus will have a much more participation in the development of the program as well on the upside of the program. Sanofi is positively inclined to these discussions, but we're in the middle of the negotiations, which we hope to conclude by the end of the year. If we do not agree contractually that our program belongs to Sanofi, I want to make that very clear, but we enjoy a terrifically good relationship with Sanofi. So I don't think operationally that that will be ultimately the case, but it is a possibility obviously, until we have negotiated clear on the new strategic relationship around 21 and potentially other programs.

[Simos Simeonidis:]

So you have the option if you want to under this, I guess I don't want to speculate, but theoretically you could have more of a stake in miR-21 in orphan disease if this negotiation goes the way potentially you want to?

[Kleanthis Xanthopoulos:]

Yes, absolutely. And we will know in the next couple of months.

[Operator:]

And our next question comes from Jim Birchenough from BMO Capital Market.

[Unidentified Analyst:]

It's Nick in for Jim. He is traveling in Europe this week unfortunately. I would also like to ask question on the Alport syndrome and understanding from the presentation last week is that the new model provides a larger window to interrogate, perhaps a little more timing of miR-21 inhibition. And I'm just wondering what you're learning about that? Most clinical trial you pick are pretty end-stage patient population to test, but perhaps the disease has too far gone, then when you would need to go into an earlier population and to go into an earlier population, what kind of clinical endpoint might be appropriate to show that you are impacting the disease?

[Neil Gibson:]

So Nick, we've had discussions with our key opinion leaders where they've been able to help us understand the progression of the severity of the fibrosis and there is a Type III level of fibrosis where you're getting reasonably reduction in GFR for instance, in glomerular filtration rate that is a precursor to end-stage renal disease. So basically these patients are maybe loosing about 8 ml per minute in function as they progress and those are the opportunity to be able to identify those patients and focus in on those patients as we ultimately look at the therapeutic effectiveness of our compounds in the clinic.

[Kleanthis Xanthopoulos:]

So Nick, another point that we hope that will significantly help our clinical development strategies are following; the patient population is extremely well-defined. There is a genetic mutation in three different 4A genes, collagen genes. The disease is otherwise known as x-linked nephritis. These kids typically in the teen years begin to manifest symptoms of Alport syndrome initially through hearing impairment and soon thereafter in kidney function. A percent of them, typically around 20% to 30% by the early 20 already in dialysis, so we already know the kind of entry point if you like, because the population is well-defined. The key opinion leaders are telling us the GFAR could be a good endpoint. We clearly will take an approach that will have some suggestions when we start the dialogue with FDA. But we don't have clarity yet because we haven't initiated these discussions.

[Unidentified Analyst:]

But you feel fairly comfortable that you can identify a group of patients where you can have a good chance of altering the course of the disease by intervening with the edema?

[Kleanthis Xanthopoulos:]

Absolutely, that's the beauty we think of that indication that such a well-defined population in different levels of severity, and then the biomarker platform that we have will allow us to very quickly relate expression levels of 21 to the disease, and stratify the patients better for potentially maximize the outcome of the trial.

[Operator:]

And our next question comes from Alan Carr from Needham.

[Mark Vignola:]

Hi guys, it's actually Mark on for Alan. I had two quick housekeeping questions, and forgive me, if this is basic, but it's been a long week for us here with earnings I mean too close. I was wondering if you could just talk me through what sort of adjustments you had to the net loss for the diluted EPS? Having a little somewhat backing out, well, can you just tell me what adjustments you did apply to that 21, 64?

[Dan Chevallard:]

For third quarter of 2013, it is a bit of a unique difference in the basic and diluted calculation. Fundamentally, the answer, it points to the income treatment that we have. We actually reported a gain from the change in value of GSK note. And under the EPS accounting guidance, you have to address it, and what they call, and if converted method, but fundamentally you need to I guess remove the income from the mark-to-market on the GSK notes. So that's the change in the numerator. So take our GAAP net loss and increase it by the amount of the gain that we recorded. And because the effect of that income is actually diluted, when you also include the converted shares, you need to increase the number of shares outstanding that you see it in a basic calculation by the shares of the GSK note is convertible into. So I would point to the footnote to the 10-Q, which we'll file this afternoon.

[Mark Vignola:]

That's not out. We haven't seen that yet, right?

[Dan Chevallard:]

That's right. So we'll file it this afternoon. That will give you a reconciliation of the income.

[Mark Vignola:]

And then, I was wondering if you could just help me remember what steps would be to move from where miR-21 is the program is right now, to where the RG-101 program is? Like how would you guys view the steps agreement, the catching up of 21? What needs to happen for 21 to be in the same spot that RG-101 is now?

[Neil Gibson:]

We have, what we'll call, as I mentioned the non-GLP toxicology experiments ongoing at the moment. Once those are complete, we'll be in a position, where the data is appropriate we'd be able to select the clinical candidate. Once you've selected the clinical candidate then you can plan for two things; one, the performance of the GLP toxicology studies to support the clinical development, and at the same time in parallel you would be doing the manufacture, if you will, of the drug substance and the drug product. So both the GLP tox and the manufacture of drug substance and products will normally take you nine months to a year. So that's the steps that we need to complete that would then get us to this equivalent position of where the RG-101 is.

[Kleanthis Xanthopoulos:]

Another way to state that is, assuming we negotiate successfully with Sanofi, we are about three to four quarters between the program. So the microRNA-21 fibrosis program is three to four quarters behind RG-101.

[Operator:]

And our next question comes from Bill Tanner from FBR Capital Markets.

[Bill Tanner:]

I had one for you, Neil. Just how should we think about the framework by which the company is going to move some of the compounds forward? Obviously, you guys are very good at coming up with selective and specific compounds that aren't toxic. But if I just think about HCV and if I think about Alport, probably two fairly different diseases in terms of what might be an obvious biomarker. With HCV, obviously measuring viral load, with Alport, I guess its a little bit still TBD. So as you think about advancing those two compounds, but other ones for which the mechanism or the role that the [ph] Amira plays in the disease pathology may not be that well-known. How do you sort of think about that? And the commitment to either measuring something that's pretty straightforward like viral load or really trying to roll up the sleeves and identify what is a good surrogate in an early clinical trial to convince you that you want to move forward?

[Neil Gibson:]

So we actually are relying and having some extensive discussion with our key opinion leaders to help us talk through exactly this question. So as you mentioned, Bill, the HCV viral load reduction is a no-brainer. That the renal fibrosis effort, and clearly they are talking to us about what they consider as well documented endpoints that you could measure like the estimated glomerular filtration rate and our exploratory biomarkers, which can include for instance urinary microRNAs, which is something that we know how to do. So part of the discussion with the key opinion leaders and that setting is actually even looking at some of the samples that are already been collected from Alport syndrome patients and looking at the rate of decline in some of those markers that represent rate decline of function overtime, so that we can have an effect of understanding of the duration of treatment and our future clinical trials. And we would take that as a model for how we would approach any therapeutic area, where we've clearly wanting to identify specific patient populations, integrate our biomarker approaches, so in oncology setting for instances, which were very well experienced in, that you can identify those segments of disease that are driven by the specific mutation or microRNA expression pattern and we can identify those and enter them in the trial and enrich the opportunity for seeing positive clinical data.

[Bill Tanner:]

So just to understand better, I mean it seems like the world's your oyster in terms of the microRNAs that could be out there, the ones obviously that are already identified, now there is two, be identified. So perhaps just an overabundance of potential targets or ultimately there could be things that could be interesting maybe from an orphan perspective at least commercial, that the committee could address, but if you look at say, this is just somewhat intractable right now, knowing what we know about the natural history of the disease, and it's going to be either spending a lot of money, maybe to go down the dead end or just trying to get lucky?

[Neil Gibson:]

No. I think we've got a very defined approach for this and that is in essence driven by the discussions with the key opinion leaders. So in the case of Alport, our data base is available where patients have participated in studies, allow samples to be collected and measurements to be made. This giving us a baseline if you will of knowledge of what the disease looks like overtime and using that data to help frame the endpoints that we want to measure in our clinical programs, it is helping us finalize how we think about, the sort of types of proof-of-concept studies that we could do.

[Bill Tanner:]

And then I guess last question, just as you think about 2014 and medical conferences. I mean, not asking to front-run anything that where you next going to be presenting, but what do you think, ones would be where microRNA interference in general could be something where they could get some notoriety or some enhance?

[Neil Gibson:]

So there will be a number of different conferences. Obviously, there will be the standard dialogue, when you go to meetings that we attend and present at, like there is one in San Diego actually next week. We'll have the oncology meetings that will be, may having more of attendants in and then as we've done this year we'll be attending the lever meeting and kidney meetings to continue to work with key opinion leaders and other interested parties on the advancement of the RG-101 and miR-21 programs.

[Unidentified Analyst:]

And our next question comes from Christopher James from Brinson Patrick.

[Christopher James:]

I just have a quick follow-up to the anti-miR-21 program. I know it's very early, but when do you think those discussions with the FDA, could begin regarding a pathway forward. It seems like you have a number of different options and a number of different biomarkers you can measure, whether its [indiscernible] to GFR or obviously the more stringent doubling of serum creatinine. Do you think you can get a faster pathway forward, just given the seriousness of Alport syndrome?

[Neil Gibson:]

I think that discussions with FDA would happen very soon after we have selected the clinical candidate and we would obviously take advantage of those discussions to help us get to an appropriate endpoint that the FDA and/or any regulatory agency would find acceptable for assessing efficacy in those Alport syndrome patients.

[Operator:]

We have a follow-up question from Jim Birchenough from BMO Capital Markets.

[Unidentified Analyst:]

Just about the HCV program, obviously we just comeback from AASLD and other oral DAAs look fantastic. Can you describe what you think a viable opportunity looks like in HCV for RG-101?

[Neil Gibson:]

So there is a couple of different levels and I'll give you the perspective that we had with discussions with key opinion leaders in Washington. Genotype 3s is still an area where there is an opportunity and even with the well controlled clinical data appealing with sofosbuvir and other of the oral-DAAs, the key opinion leaders we met with are all talking a continued medical need and the range was anywhere between 5% to 20% of patients, who are likely to fail the current oral DAAs by whatever mechanism, whether that's a compliance issue or a resistance issue or some other reason for insensitivity, that there is a clear need for a different mechanism of action that could be a benefit to those patients who ultimately will fail some of the oral DAAs currently in development, even though that the clinical data to date has been very impressive.

[Kleanthis Xanthopoulos:]

Nick, I'd like to add a few things here. First of all, the way we think about strategically for RG-101 is clearly demonstrating the validity of our approach in the clinic. So within the next nine to 12 months not only we're going to be able to have clinical data, but also demonstrate viral load reductions in patients with HCV, which we think it's going to be incredibly powerful and helpful to the rest of our programs. Now specifically for the potential, commercial opportunity for RG-101, I want to remind you that, a, it is a pan-genotypic agent and an agent that we think we can dose once a month. As you know, the doctor who administers the therapy for the HIV infected patients, will see the patient on a monthly basis to monitor viral load reduction. So the doctors incentivize because they will have to administrate the injection and it also incentivize, because we're going to be increasing compliance. So we essentially see some logistically some very important benefits for RG-101. Having said that, it's clearly going to be a second line drug whether we are addressing it for difficult to treat genotypes, where there is still a gap. Neil, mentioned GT3 and GT4, so co-infected patients were combination of a lot of different oral agents is problematic for [ph] steroidics or pre-transplant patients. Collectively that's a pretty big pool and anyway you analyze that the NPV for a product with this characteristic is still extremely high. So we think there is a commercial opportunity. We think it's a compound that one of the big players will be interested in and our goal would be to ultimately identify the appropriate partner to commercialize the product.

[Unidentified Analyst:]

And just a follow-up. I guess one fact that that escape me before is that in transplant patients for the curative HCV still have a higher risk of a hepatocellular carcinoma over non-transplant patients or non-HCV patients suggesting that there is sort of this ongoing risk for HCC that's linked to pre-existing cirrhosis or fibrosis. Given the importance of 122 in liver biology, is there any data suggesting that that might be an opportunity for a patient that has a lot of cirrhosis or fibrosis, that is at higher risk for HCC, would you be able to help reduce that fibrotic burden and therefore reduce HCC risk?

[Kleanthis Xanthopoulos:]

Nick, it is a possibility. It is a hard development path. We haven't thought about that aspect yet, but I think that there is a lot of opportunities that we'll focus on before we get to get there.

[Neil Gibson:]

There is some published work in the literature, Nick, around long-term innovation of 122 helping result some of the steatosis that would exists in animals, et cetera. So we could share that information with you, if you'd like to take a look at that.

[Operator:]

Thank you. I'm showing no further questions at this time. I would like to hand the conference back over to Mr. Kleanthis Xanthopoulos for closing remarks.

[Kleanthis Xanthopoulos:]

Thank you, again, for joining us on the call this afternoon. As I hope, we communicated to you we are very pleased with our recent accomplishments and look forward to communicating our future progress. Thank you all.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. This concludes our program. You may all disconnect and have a wonderful day.

[Kleanthis Xanthopoulos:]

Thank you.