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spk11: Good afternoon, ladies and gentlemen, and welcome to the Dicerna Pharmaceuticals First Quarter 2021 Earnings Conference Call. As a reminder, this conference call is being recorded at the company's request. I will now turn the call over to your host, Will Gramick of Stern IR. Please go ahead.
spk10: Thank you, Operator. Good afternoon, everyone, and thank you for joining us to review Dicerna's First Quarter 2021 financial results and operational highlights. For 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 and 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 beginning approximately two hours after this call is completed. Speaking on today's call will be Dicerna's President and Chief Executive Officer, Doug Fambro, who will review our program portfolio and strategy our Chief Medical Officer, Sri Ramaradhe, who will discuss progress in our key programs, and Chief Financial Officer, Doug Pagan, who will review our first quarter financials. We also have Jim Weissman, our Chief Operating Officer, Rob Ciapponelli, our Chief Commercial Officer, and Bob Brown, our Chief Scientific Officer, available today to address your questions during the Q&A session. During our remarks, we will open the line for your questions. I'd like to remind listeners that management may make forward-looking statements on today's call pertaining to the company's finances, business, and operations, including the discovery, development, and commercialization of our product candidates and technology platform and the therapeutic potential thereof and the success of our collaborations and any potential future collaborations. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Applicable risks and uncertainties include those relating to our preclinical research and clinical progress and other risks identified under the heading risk factors included in our most recent Form 10Q and Form 10K. 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 Schambro, DICERN's President and CEO. Doug?
spk06: Thank you. Good afternoon, everyone, and thank you for joining us. Dicerna entered 2021 with momentum and the financial strength to continue to build on that momentum. There are currently four Dicerna galaxy molecules in clinical development. Nidozerin for all known types of primary hyperoxaluria, or pH. Balsesarin for alpha-1 antitrypsin deficiency-associated liver disease. RG6346 for chronic HPV with Roche, and an ANG-PTL3 targeted program under our Lilly collaboration. The clinical programs will grow to six in the coming months with our DCR-AUD alcohol use disorder program and another Lilly cardiometabolic program targeting LPA that we anticipate to enter the clinic shortly. Beyond those six, there are currently five more Galaxy molecules with declared clinical candidates in preclinical development, which includes a new development program in 2021 under our NOVO collaboration. And behind this 11 strong development portfolio are more than 20 research stage programs, many utilizing our Galaxy Plus technology that extends delivery to tissues beyond the liver. Some of these discovery programs will advance to formal development later this year. including Dicerna proprietary programs utilizing Galaxy+. We have the resources to drive this pipeline forward. We started the year with approximately $570 million in cash, cash equivalents, and marketable securities, and since then, we've received more than $230 million in collaboration milestones and payments, including the milestone payment from Roche for the Phase II start of RG6346 and Chronic HPV, as well as from the sale of our royalty interest in a peer company marketed program. We anticipate receiving additional cash this year and are hoping to achieve net zero cash burn in 2021 while fully funding our development programs and preparing for a potential commercial launch in 2022 of our Nidozarin program to treat all known types of primary hyperoxaluria, a candidate that is currently in pivotal clinical development. Regarding the dozerin, we are on track to read out top-line results of the PHYOX2 pivotal trial mid-year. As a reminder, PHYOX2 is enrolling subjects with pH Type 1 and pH Type 2, and the data, if positive as expected, should support full approval for both of those pH types. We are also currently enrolling a trial for subjects with pH Type 3, called PHYOX4. COVID-19 spikes impacted the enrollment timeline, but we believe it will be fully enrolled in the very near future. As we intend to include pH Type 3 data in our planned NDA, that will push that NDA submission into the fourth quarter. In any event, we fully expect Nidozarin to be our first marketed product and thus mark our transition to a fully integrated biopharmaceutical company as we intend to market Nidozarin in the United States. pH is an ultra-orphan indication, so it's ideally suited for the initial build-out of our U.S. commercial organization, which is already well underway, including with the recent hire of our Vice President of Sales. We expect to build further from there, next for the orphan AAT liver disease market, and with larger specialty call points in non-orphan indications beyond that. Thus, this development portfolio supports a logical, stepwise increase in U.S. commercial capabilities with Nidozerin at the point of the sphere. Our maturing and growing development portfolio is, we believe, more likely to enjoy clinical success than the average success rates for our industry. Some of that comes from the unique constellation of properties shared by our Galaxy molecules and, we also think, likely shared by our Galaxy Plus molecules. These include high tolerability, lack of off-target effects, long duration of effects, simple administration regimens, and relevant for some programs, tissue specificity. For our own portfolio, we focused on diseases with clear disease mechanisms that we can directly impact with RNAi, such as with the primary hyperoxyurea, alpha-1 antitrypsin, and chronic HPV programs. In other cases, we follow genetic associations that imply likely success for our treatment mechanism, such as with the Alcohol Use Disorder Program and several of the collaboration programs. In certain cases where development risk is higher, such as in achieving functional cure in chronic HPV and with more novel cardiometabolic targets, we've entered into collaboration structures where the cost and clinical proof of concept risk is taken by our collaborator with Dicerna having the right to opt back in to co-fund development and co-commercialize after a clinical proof of concept has been achieved. I'm referring there to our Roche and Novo collaborations. The well from which we can draw new programs is deep. As we presented during the first quarter and last year, our Galaxy Plus technology is achieving strong and specific gene knockdown in multiple non-liver tissues, including various CNS cell types muscle, adipose tissue, and tumor-associated immune cells, and as yet undisclosed work from our research labs extends further than that. We may become a little more adventurous in our target selection going forward, pursuing intriguing mechanisms and major opportunities enabled by Galaxy Plus and particularly suited to RNAi in contrast to traditional modalities and to other genetically-based mechanisms such as gene therapy or gene and base editing. I look forward to talking about those programs in future updates as building our proprietary pipeline is a high priority. In addition, we anticipate additional discovery collaborations, although that is not a focus for 2021. So, as you should see from our portfolio of current programs, our deep opportunity set for new programs, our risk-reducing and revenue-generating collaborations, concurrent financial resources, and our plans move to commercialization of Nidozarin next year, we're confident that we have paved the way for strong value growth that can continue for many years at an attractive risk profile. With that general overview of our strategy and the means to execute it, I'm now going to turn the call over to our EVP and Chief Medical Officer, Sriram Aradiag, who will give an update on our core development programs. Sri?
spk02: Thank you very much, Doug, and good afternoon, everyone. As Doug mentioned, we continue to make great progress across our clinical development programs, and as of now, we have 10 clinical trials underway or expected to begin in the near term, evaluating our four pipeline candidates. Midocerin for primary hyperoxaluria, Belsesarin for alpha-1 antitrypsin-associated liver disease, RG6346 for chronic hepatitis B viral infection with Roche, and DCR-AUD for alcohol use disorder. Let me begin with an update on the Doceran, our most advanced program, which is in development for the treatment of primary hyperoxaluria. Primary hyperoxaluria, or PH, is a family of ultra-rare genetic disorders causing hepatic oxalate overproduction that can result in life-threatening kidney damage as well as damage to other organs. The burden and impact of disease continue to become clearer in PH2 and PH3 as newer data emerged, demonstrating the need for a treatment that can address all known PH subtypes. We are developing our Galaxy RNAi product candidate, Nidoseram, for the treatment of all of the known subtypes, PH1, PH2, and PH3. There are currently no therapeutic options available that treat all three known forms of PH. Having completed enrollment despite the ongoing pandemic surge late last year, I am pleased to say that PHYOX2, our six-month double-blind randomized placebo-controlled pivotal trial in patients with PH1 or PH2 who are older than six years of age, is nearing completion, with the last patient last visit expected to take place this quarter. As a reminder, the primary endpoint of this six-month study is the percent change from baseline in urinary oxalate based on the area under the curve of 24-hour urinary oxalate excretion between days 90 and 180. We anticipate announcing top-line data mid-year as we also prepare for an NDA submission based on this study. In addition to PHIOX2, we continue to enroll our PHIOX4 single-dose trial of Nidoseran in patients with PH3, although enrollment has been slower than expected due to the current COVID environment. This study is designed to evaluate safety, tolerability, and PKPD of Nidoseran in patients with PH3 with the additional objective to evaluate reduction in urinary oxalate as a secondary endpoint for efficacy. Our plan is to include data from this trial in our NDA submission to support a potential approval in PH3. Our expectation is to have top-line data from BIOX4 in the third quarter, setting us up for a submission of the Nidoceran NDA in the fourth quarter of this year. Moving on to additional Nidoceran trials, early in the second quarter, we initiated patient dosing In PHYOX-7, our open-label study of midoceram in patients with PH1 or PH2 who have severe renal impairment, including those on dialysis. Our PHYOX-8 open-label trial in patients from infancy up to six years of age with PH1 or PH2 is also expected to initiate this quarter. Both of these studies are expected to complete after we have submitted the first NDA, and we therefore plan to submit these data as supplemental filings subject to the doctor's approval to support label expansion for treatment of these patient populations. Next is our investigational galaxy candidate, RG6346, for the treatment of chronic hepatitis B virus infection, which is in development in collaboration with Roche. The disease affecting an estimated 300 million people worldwide and contributing to the death of more than 880,000 people each year there is a tremendous need for a treatment that could result in a functional cure for this disease. During the first quarter, we were very pleased to announce that Roche had initiated RG6346 in a Phase II platform trial that will evaluate the efficacy and safety of RG6346 in combination with multiple additional agents with different mechanisms of action. This platform trial design allows comparison of multiple NME combination therapies against a common control arm, as well as the introduction of additional treatment arms at later time points. Roche added RG6346 to the trial in March as part of new treatment arms in combination with standard-of-care nucleotide therapy and in triple combinations with pegylated interferon alpha-2A, Roche's core protein allosteric modulator C-PAM inhibitor, or Roche's novel investigational TLR7 agonist. This trial is being conducted entirely by Roche and will evaluate the percentage of participants with hepatitis B surfactant loss at 24 weeks after the end of the 48-week treatment period as the primary endpoint. The phase one trial of RG6346 that we initiated and for which we are responsible continues in parallel with dosing cohorts that include follow-up durations of up to 48 and 72 weeks. The positive interim phase one results that we presented last year showing that four monthly doses of RG6346 treatment resulted in substantial and durable reductions in hepatitis B surface antigen levels lasting up to one year following the last dose were indeed very encouraging, and we are optimistic about RG6346's potential as part of a functional cure combination treatment regimen for chronic HPV. Turning to Bilteseran, we continue to advance our clinical development program for the treatment of alpha-1 antidepressant deficiency associated liver disease, or AATLD. Other than liver transplantation, no treatment exists for AATLD, a disease caused by the production of abnormal A1AT protein by the Z allele of the serpent A1 gene that can result in chronic liver disease leading to fibrosis, cirrhosis, liver failure, or cancer. Individuals with two copies of the Z allele are believed to be at increased risk of developing AATLD. A rare disease, recent epidemiology research indicates that approximately 120,000 individuals in Europe and 63,000 individuals in the US carry this ZZ genotype. It is estimated that 10% or more of these individuals may have AATLD, and recent research suggests that AATLD is both under-recognized and under-diagnosed. Our Phase I multi-cohort single ascending dose trial to evaluate the safety, tolerability, and PKPD of Belsasaran in healthy volunteers continues. We recently completed dosing in our fourth dose cohort, and a fifth dose cohort is now underway. We anticipate reporting top-line interim data from the first four dosing cohorts at mid-year and are targeting presentation of more complete data from the Phase I trial at a scientific conference later this year. I'm also pleased to report that we have initiated patient screening for our multiple-dose randomized placebo-controlled double-blind phase two trial named Estrella, which will evaluate the safety, tolerability, and PKPD of Belsiceram in adult patients with AATLD who have the PIVZ genotype. Our teams continue to work hard to track the impact of the COVID-19 pandemic on our trial rollout, and based on present projections, we anticipate dosing the first eligible patient in the coming months when the majority of worldwide sites are expected to be active. Turning to the latest addition to our core pipeline on our last quarterly call, we revealed our next Galaxy clinical development candidate, DCR-AUD, for the treatment of alcohol use disorder. Alcohol use disorder, or AUD, is a chronic disorder that is associated with a range of medical, psychological, personal, social, and economic problems resulting in approximately $250 billion in annual medical, economic, and social costs and representing an area of substantial unmet need. About 14 million adults in the U.S. experience AUD and fewer than 10% seek treatment. Fewer still, roughly 140,000 people in the United States actually receive pharmacotherapy for this disorder. While there are a variety of factors contributing to the low adoption of pharmacological therapies for AUD, we think there is significant opportunity for a safe, targeted, easy-to-use therapy that can be combined with behavioral interventions to help individuals with AUD meet their treatment goals. DCR-AUD is our investigational RNAi therapeutic designed to deliver a liver-specific knockdown of aldehyde dehydrogenase 2, or ALDH2. ALDH2 is a key liver enzyme involved in the metabolic breakdown pathway of alcohol. In March, we provided an in-depth discussion of our DCR AUD program that included a deep dive into the ALDH2 target rationale and detail on the limitations within the existing treatment landscape shared by a therapeutic expert, Dr. Henry Kranzler from the University of Pennsylvania's Hurlman School of Medicine. A replay of the webinar remains available on our website for anyone who missed it so I won't delve into great detail today, but stated briefly, DCR-AUD's mechanism is designed to result in intolerance of alcohol in moderate amounts, providing real-time physiological feedback that can assist individuals to avoid harmful levels of alcohol intake. We believe that DCR-AUD's expected long duration of action with easy subcutaneous dosing and high target specificity with minimal to no side effects similar to what we have observed with our other galaxy molecules, together present a compelling potential profile. We are very enthusiastic about DCR-AUD's prospects as a potentially game-changing therapy for people with AUD and are looking forward to taking it into the clinic. We are on track to file our IND for DCR-AUD mid-year and plan to initiate the phase one trial in Healthy Volunteers soon after in the third quarter. The phase one trial will include an assessment of low-dose alcohol interactions to confirm the pharmacodynamics, safety, and the target profile consistent with preclinical models of liver-specific ALDH2 knockdown. As we approach mid-year, I'm pleased to say that from a clinical development standpoint, we are making steady progress towards multiple study starts and data readout milestones over the remainder of 2021, in addition to the significant deliverable of preparing to submit our first NDA, an important and exciting milestone for the company. We look forward to an event-filled balance of the year. I'd now like to turn the call to Doug Madan to review our financial results.
spk05: Doug? Thank you, Sri. I'd like to briefly walk through the key financial results for the first quarter of 2021 and direct you to our press release outlining these results and our Form 10-Q, both issued after close today. Net loss for the first quarter of 2021 was $30 million, or 39 cents per share, compared to $22.5 million, or 31 cents per share, for the same period last year. Revenue for the first quarter of 2021 totaled $47.6 million, compared to $34 million in the same period last year. The year-over-year increase in revenue was primarily attributable to an increase in services performed under the Roche Alexion, and Novo collaboration agreements. As of March 31st, 2021, we had approximately $138 million of current deferred revenue, which we expect to be recognized over the next 12 months, and approximately $318.3 million of non-current deferred revenue expected to be recognized over the following several years. R&D expense for the first quarter totaled $56 million compared to $43.2 million in the same period last year. The year-over-year increase was primarily driven by an increase in employee-related expenses as a result of higher R&D headcount necessary to support our expanding pipeline and collaboration agreements, as well as development costs associated with the nedosterone clinical development program. G&A expense for the first quarter of 2021 totaled $20.7 million compared to $16 million in the same period last year. The year-over-year increase was primarily driven by employee-related expense as we increased headcount to support our growing operations as well as increased professional services. We expect our operating expenses to increase in the coming quarters as we continue to grow headcount to accommodate additional R&D activities and launch readiness, as well as from higher external spend associated with increased activities in our pipeline. During the first quarter of 2021, we received $32.9 million in milestone and reimbursement payments from our collaboration partners and continue to guide to receiving over $83 million for the full year 2021. These payments represent an important source of proceeds and demonstrate the value these collaboration programs should continue to generate as they mature. As of March 31, 2021, we had $544.9 million in cash equivalents and health and maturity investments compared to $568.8 million as of December 31, 2020. In early April, we announced the sale of our Lumicera and Royalty interest to Royalty Pharma for an upfront amount of $180 million with the potential to receive up to an additional $60 million contingent on sales-based milestones. This non-dilutive transaction extends our cash runway into 2024. This transaction will begin to be recognized in our financial statements during Q2. We also anticipate signing an OUS commercialization partnership for Nidoseran this year. Our goal has been to maintain a strong balance sheet through the planned NDA submission for Nidosurin in the fourth quarter and potential 2022 commercial launch. That concludes my review of the financials. I would now like to open the call for questions. Operator?
spk11: All right, so as a reminder, to ask a question, you will need to press star 1 on your telephone. To resolve your question, press the pound key. Again, that is star 1 on your telephone. First question comes from the line of Jonathan Miller from Evercore.
spk03: You are now live. Hey, guys. Thanks so much for taking my questions, and congrats on all the progress. It seems like you've done a lot of work this year, and there's a lot of stuff coming to the clinic. I'd like to start on pH since that's the most near-term stuff, I guess. Can you talk a little bit more about your choice to delay filing to wait for the pH type 3 data? versus going forward with the Ph-Type 1 and 2 and then moving on with an S and D-A when Ph-Type 3 is ready. And secondly, now that you've had some time enrolling Ph-3 patients, can you give any more color on that market, how readily identifiable those patients are, how many are seeking treatment as we start to think about Ph-Type 3 becoming a commercial opportunity? What can we expect from the initial data from A1AT releases? I know it's healthy volunteers, and I assume we'll see silencing data, but is there any other meaningful information we can get from safety or details of lung surveillance that is going to be important in evaluating those initial releases?
spk06: Hi, John. Put a lot on the plate there, but we'll bang through it. Sri, we'll talk about our filing strategy, and then Raj Chappanelli will chime in on the PH3 market, then we'll turn to A1AT. Sri?
spk02: So, John, as you know, I mean, the primary value proposition for the Dosseran that we see is the fact that we have the potential to treat all three types of PH. That's been our incoming strategy. We've had agreement on PH1 and 2 with the FDA, with PH3 There's still some conversations going on, but we believe that the delay that we are seeing in enrollment is not of a degree that warrants our wanting to split the file. We think that we expect the enrollment to complete imminently, and with that, we are able to stay on track for our plan, which is an integrated file that includes data on all three types of patients with the goal to get approval for PH1 and 2 and pending the data for PH3. So at this point, we're staying on track with our original plan.
spk17: Rob? Thanks, Trey. And John, appreciate the question. In terms of the PH3 market, I want to start with we're starting to see some additional data being published throughout Europe around the burden of disease in PH3. So this is where we're starting to get into what could be the market here, and we're seeing that. PH3 patients are suffering from recurrent kidney stones and impaired renal function. We're starting to quantify that. And what we've heard from our scientific advisors is that there are a group of these patients that are demonstrating symptoms. How many? I think we're still being very conservative in our estimates. And in terms of what we're looking at right now, we're thinking that based on what we know today, but frankly, even over the last two quarters, it keeps changing. About 20% of those patients may be demonstrating symptoms. We certainly will need to have them diagnosed. They will need to have a genetic test to confirm they have PH3. And we're continuing to size up the market that way.
spk06: All right, Cherie, do you want to talk about the A183 data? Yeah, John went so fast I missed the question. He was asking about what to expect in the initial release. Obviously, we'll talk top line on the suppression of the protein in this healthy volunteer trial. Do you think we'll learn anything from safety?
spk02: We will provide information, John, on the overall safety profile. We have been monitoring safety and we will report the safety and tolerability of the data up to that point. And I think what you'll see is the data we have that gave us the confidence to proceed with our plans for Phase 2, having selected a dose and a dosing regimen to move forward. And at top-line data, you'll see some parts of it, and then later in the year, the more complete information. Does that answer your question?
spk06: Yeah. Certainly, we would not expect to see declines in lung function in the healthy volunteer population. Thanks, John. Great. Thanks very much.
spk11: Next one on the queue is Manny Furuhar from SVB Lyric. You are now live.
spk07: Hey, good afternoon. This is Rick on the call from Manny. Congrats on all the progress and just two questions from us. So first, looking at the upcoming initiation to the FYOX 7 and FYOX 8 trials, I was just hoping to get a sense of how large of a proportion of the total pH market opportunity is made up by patients with end-stage renal disease and also children younger than six years old based on any market research that the company may have performed. And second, I was just hoping to get a little bit more color on when we may expect to see some of the initial clinical data from the leading partner programs and in what sort of a timeframe we could expect to see the first data from the AngPTO3 or LPA programs.
spk06: Hi, Rick. I'm not sure we've got a lot for you on these questions. I mean, with respect to the patients under six and patients in ESRD, most pH patients do live quite long lives, if not a full healthy human lifespan. And we do see a lot of patients expected across the age spectrum, so this is not a young pediatric-dominated indication. And once on ESRD, you obviously have some patients who are closer to the end of their lives and some patients who then proceed to liver transplant, at which point they would no longer, frankly, no longer have meaningful pH because it's the liver that's the source of the oxalate. I'm not sure we have any specific numbers to quantify those,
spk17: John, let me make a little bit of a crack at it. And Rick, what we're trying to do is segment out the market. I think we've talked on previous calls about how thin the data is across the registries for PH1, 2, and 3. And Doug's spot on. We're seeing PH patients demonstrate and demonstrate their disease and be symptomatic across all the age ranges. Frankly, the easiest ones to find are the infants. But what we frankly have seen in the FIOC studies and in interviewing patients, we have, as you would expect in any ultra-rare disease, a number of silent sufferers out there. And we're still really trying to pinpoint down the different segmentations of each of the three known subtypes at this time.
spk06: Now, with respect to your second question on timing of clinical trial data from partners, and specifically the Lilly Ang3 and LTA, we currently don't know the timing or the data release plans of Lilly. We will share that when we do understand it. Thanks, Rick.
spk07: Thanks for taking the questions.
spk11: Next question comes from the line of Madhu Kumar from Goldman Sachs. You are now live.
spk08: Hey, guys. Rob on here from Madhu. Congrats on all the progress. I just have two quick questions. First, what do you think are the key metrics by which nidozorin can differentiate from approved RNAi drugs and PH1? And then additionally, what have you learned from peer alpha-1 antitrypsin RNAi drugs about clinical endpoints to examine for balsesorin in the now-initiated phase two trial?
spk06: Well, I'll take a crack at your first one, and then Sri can address the balsesorin endpoints question. Clearly, key differentiation for nidozorin from the lumiserin molecule is our ability to dose, we hope, all the PH types, PH type 1, type 2, and type 3. As you're well aware, PH type 2 and type 3 are not addressed by Lumiserin. Within PH1, where there is patient overlap, we are optimistic based on the study, Phiox3 open label study, which has the same dosing regimen as the Phiox2 pivotal trial. Based on that Phiox3 data, we're optimistic that we may report a higher level of normalization of oxalate levels, which we view as the most important metric in looking at the disease. It is important to note that if oxalate is in the normal zone, then you have effectively normalized the disease state for the patient. even disease management activities, you have the potential to stop doing those. With elevated levels of oxalate, we don't think that's something that's going to occur. So the larger the fraction of patients who achieve a stable normalization level, I think is going to be viewed as a differentiating factor, and we're optimistic that we may achieve that. We'll have to see what the FLAX2 data is. Related to that is the average oxalate level achieved by patients. Similarly, more reduction, the better. So the absolute level achieved and the percent normalization we think is very important. Beyond that, we have received a lot of positive feedback about the regimen of our product and its presentation as a pre-filled syringe for self-administration. This is a lifetime chronic disorder. And that sets up an extremely convenient, no healthcare practitioner required, easy-to-remember dosing regimen with a small volume, small needle self-administration subcutaneous injection. That, we believe, may emerge as a preferred format in this disease for dosing and RNAi therapy. So there are a number of differentiation channels that are possible. And in the case of the dosing format, that is, we're confident we're on track to launch with those pre-filterages.
spk02: Balthasaran? So the therapeutic hypothesis for Balthasaran, as you know, is that by reducing, by knocking down the expression of the gene in the liver, you reduce the abnormal protein in the liver that allows the liver to regenerate. So our phase two study is designed, one, to confirm that we are able to knock down the liver protein, which we fully expect to do based on the mechanism of action. We then expect to see that that has resulted in a decrease in the abnormal, in the levels of abnormal AAD in the liver. We have histological endpoints based on biopsies, so serial biopsies done with a cohort, both a six-month and a 12-month duration in our Phase II study that will evaluate improvements in histology, where we will be looking for reductions in globules, as well as disease activity, as well as looking at fibrosis. We have complemented that with the use of imaging studies that will allow us to assess whole liver, if you will, behavior, for the lack of a better word, in terms of stiffness using FibroScan or MRI elastography, and combine that with soluble biomarkers. To that end, the recent press release from Arrowhead based on five patients' worth of data demonstrating some improvements in fibrosis and consistent changes in many of these markers is actually a very encouraging sign. You know, yes, it's small numbers of patients, it's early data, but at 12 months, seeing some changes, although in the absence of a placebo control, gives us encouragement that our plans are well thought through and we are planning on collecting all of that information in the Phase II study to then inform us for our regulatory interactions to decide what will be the basis of approval in a Phase III study in an indication where the disease is rare enough where traditional liver outcomes in the long term are going to be difficult to follow. So I think I'm very encouraged by the recent data. They're quite compatible with the plans we have made. We are excited that we have designed a study that has two cohorts looking at six and 12 months of treatment. We've included a population that covers F2 through F4. So now the focus is on getting it going.
spk06: All right, thanks, Rob.
spk11: Next question comes from the line of Stephen Woolley from Stifo. You are now live.
spk12: Hi, this is Bonnie Quach on for Steve. Thanks for taking my questions. For a PH3, is there any color that you can provide on how you plan to find these PH3 patients, especially since they're, as you described them, as silent sufferers? And also, is there any overlap between the PH3 diagnosing physicians and the ones that also diagnose or and treat PH1 and 2 patients.
spk17: Yeah, Bonnie. Hi, it's Rob. Thanks for the question. And related to the PH3 marking, where are these patients? So one of the key aspects, both from a healthcare professional side and from a patient standpoint side, would be education. And you can start to see some of that already on our website and in working with the patient advocacy groups like OHS. Awareness of the disease and the symptomatology, key aspects that we have to get out into the marketplace around, if you have frequent stones, you really need to talk to your doctor about what may be going here. Those types of concepts need to really continue to... get embedded into the marketplace in terms of education. Also, in terms of appropriate and differential diagnosis, the typical pH patient, you know, three- to five-year patient journey of seeking a differential diagnosis, we've got two really good tools right at our fingertips, urinary oxalate testing and genetic testing. Vexterna will have a program to help healthcare professionals, differentially diagnosed patients, and I think having access to a company-sponsored genetic test is yet another way to take a barrier off the table so that physician can be informed. And the panel that we're designing will be a panel that not just looks at pH but gives the physician information that goes beyond pH because, frankly, every patient that these physicians are saying isn't necessarily a pH patient. And part of what we're trying to do is help these patients get to a differential diagnosis.
spk02: And the physician population, the physician group is the same one. So the same groups of urologists and nephrologists who would diagnose.
spk12: Thank you. And my last question is, I was wondering what are your thoughts regarding all nylon's recent Illuminate A data and what do you believe this means for Lumacerin? Thank you.
spk02: I think you're referring to the nephrocalcinosis data, Bonnie. And so we were encouraged to see the data. Another example of what the potential impact of durable reductions in urinary oxalate over time can achieve. Now, nephrocalcinosis is measured on ultrasound. We are looking at it, too. Our program is initially focused on demonstrating the durable and meaningful normalization of urinary oxalate in a large proportion of subjects. But we see the nephrocalcinosis information as, again, emerging evidence. In our case, we are measuring it in our Pyrox2 program as well as our Pyrox3 studies. It will take time to have that data. But for me, it's, again, further validation that in hyperoxalurias, lowering oxalate loads and reducing urinary oxalate is a good start.
spk12: Great. Thank you so much.
spk11: Next question comes from the line of Yaron Werber from Cohen. You are now live.
spk14: Hi, everyone. Congrats to the team. Thanks very much for taking the questions. This is Brendan on for your own. First, I know you touched on milestone payments, but can you just confirm one more time what you expect maybe in terms of cadence, which milestones you're thinking to hit maybe the rest of this year and even next year if you can? And then just really quickly, you know, as you're looking ahead to new programs, especially in the CNS, maybe kind of give us a sense how you're prioritizing different targets that you think are especially amenable to RNAi versus maybe other modalities, and if you think you'd look to partner that program for development.
spk05: Thanks. Doug Pagan is going to take the milestone question. Thanks for the question, Brendan. Yeah, so the milestones, what we've laid out is starting last year at the end of the quarter, we laid out a $5.4 million pay We recognized 17 in Q4 and now, not recognized but received, and now 32.9 this quarter. So the remaining amount, the remaining 50 or so, will come in unevenly. Milestone payments range from small reimbursements to large milestones in 10 million, but they'll come in over the next two quarters relatively evenly. We haven't forecast or given guidance on next year because some of these milestones are dependent on the ones preceding them. So we'll look to give more guidance as we get toward the end of this year.
spk06: Thanks, Doug. With respect to the target prioritization question, it's such an interesting area. I mean, specifically for the CNS, as you know, we have a collaboration with Lilly, and it has been a close collaboration in the neurodegeneration and pain space. There is potential, which I think you alluded to, for us to do certain orphan indications on our own. There is a dialogue with Lilly with respect to some orphan indications. I would note that CNS is a pretty crowded space where there's been a number of companies focusing with a number of different modalities. And as we evaluate more broadly indications to go after with the Galaxy Plus technology, we're not just thinking about CNS. I think amongst the set we're... pretty deep in. CNS is a minority. We expect to be advancing multiple programs, proprietary programs, not necessarily orphaned out of GalaxyPlus internally, and there may be a neuro program amongst them, but there will be non-neuro as well. Each indication is its own little universe of detail and fact, so it's hard to make general statements about what makes an RNAi indication, what makes RNAi preferable in general relative to others. other modalities, but in some cases it has to do with the fact that the target's not very druggable. In other cases it has to do with the long duration of effect and the area under the curve or difficulty of multiple administration, which we avoid with the long effect with RNAi. So there are a series of reasons why RNAi would be preferable. you know, that are different if you're thinking about, gee, would you use CRISPR against this target compared to would you use a small molecule against the target? So I'm not sure there's a general answer there. However, we do think about that set of potential competitors for different technologies as part of our review of an indication. And there are a bunch of other things that go in there, the strength of the therapeutic hypothesis, the predictability of the animal models, the difficulty and length of the clinical trial program, the including endpoint selection and things like that. So it's really a three-dimensional chess game, choosing these indications, and we're trying to be very careful about it, but it's hard to describe general rules.
spk11: All right, great. Thanks very much. Next question comes from the line of Luca Issi from RBC Capital. You are now live.
spk09: Oh, fantastic. Thanks so much for taking my questions. Congrats on all the progress. Maybe the first one on PH. I think we've seen Lumasi run. Actually, it's off a pretty good commercial start here, particularly XUS. So wondering if that impacts in any sort of form or shape your ongoing dialogue with your potential partner here. And maybe a bigger picture, how should we think about timelines for potential partnerships, XUS for Nidosi rents? And then on PH3, if I recall it correctly, PHYOX4 is enrolled in just six patients, I think, total, including placebo. So can you just remind us what gives you confidence that such a small data set would be sufficient to get a label that actually includes PH3 as well? Thanks so much.
spk06: Rob, do you want to address LeMessurier and Lodge?
spk17: Sure. Thanks, Doug, and thanks, Luca, for the question. In terms of... and any inquiries from our partners. I mean, the bottom line has been our OUS conversations have proceeded quite nicely with our expectations. And there are, from our discussions with partners, it's been really interesting. They're looking at the whole market, not just the PH1 market. And what they see is, you know, high unmet need, some promising results, as we saw from the Oxumo data, But back to where I was talking earlier, you've got a high burden of disease in PH2 patients and an emerging burden of disease in PH3 patients. And the potential partners that we're talking about understand that. And they see the potential with the Nadoser and Vioxx package and being able to bring that package forward, not only in the EU, Asia, and other markets. And they just see a lot of potential outside here for the program, and we're really optimistic in wrapping up those conversations and getting a deal done.
spk02: Luca, this is Sri. As far as the use of the FIOX4 data towards a potential PH3 submission and approval, I think behind your question is the indication, of course, we are more confident. We have agreement on PH1 and PH2. The way we think about PH3 is as follows. PH3 is a disease that is also characterized by excess oxalate production. It is a disease for which increasing implications of that disease state are becoming apparent. It's the most recently described form of PH, so that information was a little bit less than what was available for PH1 and 2. So we now are going to have that information available to us. PHYOX4 is going to be a single-dose study that is double-blind placebo-controlled. and in which we're going to assess safety tolerability PKPD, but also a responder analysis where a 30% reduction in urinary oxalate on two consecutive visits, which is known to be a threshold that is clinically meaningful. It's used by nephrologists in clinical practice. And if we convincingly show that, then we expect to make the argument that we are lowering urinary oxalate in this disease. We know what the importance of urinary oxalate is. And given the disease burden, do we have an opportunity in the context of the overall PH1, PH2 data set and the PH3 findings to seek an approval for all types of PH? I should say that, of course, the PH3 part of this is less agreed to with the FDA than our PH3 plans, but our confidence is all going to be primarily dependent on the data as it comes in. But that's going to be our strategy.
spk09: Got it. Incredibly helpful. Thanks so much, guys.
spk11: Next one on the queue is Yigal Nokomovitz from Citigroup. You are now live.
spk04: Hi, Doug and Tim. Thank you very much for taking the questions. I had three. First, on the FIOX7, am I correct that you're going to be measuring EGFR, and would you expect the doserine to have an impact on EGFR slope in these patients, given the reduction in oxalate and perhaps even the potential to delay dialysis? And then the second question that fell up on a previous one, Just wondering, what are you hoping to see in the Phase 2 data for Alpha-1 antitrypsin deficiency that will meet your objectives for the target product profile for Belcisiran? And then finally, Doug, I think you mentioned at one point in your prepared remarks that you'd be becoming a bit more adventurous with respect to future indications for the Galaxy program platform. So just wondering if you could provide any preview of where you may go beyond the latest new programming. alcohol use disorder.
spk06: Thank you. Sure. So Sri will start off on the FIAC-7.
spk02: Yeah. So FIAC-7 is actually the study in which we will evaluate the ability of midosterone to reduce hepatic oxalate production in people who have a degree of insufficiency, including being on dialysis, that prevents urinary oxalate from being the right marker. So we will use plasma oxalate reduction as evidence of efficacy. So, part seven is about demonstrating the efficacy of Nidoceram in a population that we have not yet studied. So, it's not a population in which we will then be evaluating whether progression of GFR reductions and the onset of new dialysis or things like that. It's actually evaluating effects on oxalate.
spk04: Okay, got it.
spk02: So, that was one. Your second question was about AONAT and what we expect to see in phase two. And I will repeat my prior answer, which is that The goals of the Phase II study are to demonstrate the ability of the selected dosing regimen to reduce abnormal A1AT levels in the liver. The primary endpoint is actually around the serum because that's an assay that's available. We want to measure A1AT in the liver and show that we can reduce it. We're going to do the serial biopsies that will evaluate histology to see what we're doing to the abnormal globules that accumulate in the liver and other markers of injury. We will be evaluating fibrosis. We will combine that with imaging measures of liver stiffness, which are an indicator of fibrosis, i.e., fibroscan and MR elastography. And we will add soluble biomarkers that are also indicative of progressive liver injury in addition. But it's a combination of a number of those things all moving in the right direction. That will be the basis of the data. That will be the data that we'll collect in Phase II and then convert that into a proposal for a meaningful endpoint in our Phase III study as the basis of approval in discussions with the regulators.
spk06: Yeah, we have the expectation of observing improvement across all of these parameters, but we're not going to get quantitative about what we're looking for. And can you repeat the third question?
spk04: Sure, Doug. I think you'd mentioned at one point that you were going to be becoming a bit more adventurous.
spk06: Oh, yeah, a bit more adventurous, of course. There are, you know, Galaxy Plus goes a lot of places, and that raises a lot of possibilities for what we could do. RNAi is not inherently an orphan disease or metabolic disease, you know, technology. It ultimately perhaps will impact every therapeutic area with the possible exception of antibacterials because RNAi doesn't work in bacteria. And there are, you know, certain cases where there's famous undruggable targets that are really intriguing that wouldn't meet the criteria of, you know, strong genetic association in the traditional association study sense. And obviously, you have, you know, not to talk about genetic diseases in that case. I didn't really mean something that I could go into a lot more detail on. There's going to be diversity in our indications. We're not going for commercial synergy. We're going for products that, in each case, would support doing a commercial launch, even if you didn't have a commercial operation in that area. And I really, I think, was just trying to express that sense of diversity that's likely to come out.
spk04: Understood. Thanks. Thank you very much, Doug.
spk11: Next question comes from the line of Mayank Mumtani from B Riley Securities. You are now live.
spk13: Good afternoon. Thanks for taking our question and congrats on so much going on. I'm still having zero burn, Doug. So maybe just three for me just quickly on, on FIOX 8, um, the open label pediatric, any color on the timing there? Uh, I know it's starting next quarter, but, um, I, are you thinking of this could also sneak into the NDA initial submission?
spk02: No. So I don't expect the website data to sneak into the NDA. That'll have to be a supplemental.
spk13: Okay. Got it. Uh, and then, uh, yeah, most of my questions are just follow up clarification. And then on the, um, AAT side, again, appreciate the extensive color you've already provided, but I was just curious that on the dose levels, if you could comment that you've tested and you've obviously looked at it against the aniline molecule, just trying to understand, you know, how much knockdown and how much headroom to that knockdown you need to have now that you know, at least from the Idaho head data that, you know, the liver healing process is happening pretty quickly. So just curious, do you feel comfortable with the doses that you've looked at in your phase one and sort of have a good answer there?
spk06: We've done doses in our phase one healthy volunteer study. They're very similar to doses that we explored on identical, right, in HPV and then on the dozer and before that. You know, we're talking about another indication here where you're going to have long-term chronic dosing, and you have dose additivity in RNAi. So, you know, I know that the buy side tends to focus a lot on, well, okay, well, this group got 85%, this group got 90%. Maybe that one's better. You know, inside the company, it doesn't matter. You're going to be doing multiple doses. It's going to go down to its max rapidly. after, you know, two doses. So, I think it's, there's maybe a little too much focus on that. When we were evaluating the dicernal molecule versus the amylo molecule, we were also considering the ease of manufacture of the molecules. We were considering the type of preclinical toxicology studies that were done and its implication for sequencing of later studies. And, of course, the outcome, the detailed outcome of those studies. So there were a number of things that played into it. The ability to generate sufficient knockdown, frankly, is sort of easy in a multi-dose context, and so that wasn't even the primary. As I've said in the past, both companies are very good at making these molecules, and I think either one could have been selected and successfully developed. It only makes sense to do one based on the totality of the data we chose our own.
spk13: Got it. And Doug, on the extra hepatic programs, you said, you know, majority are non-CNS. You know, I guess my question on this, to be more specific on this chess board, like when you look at indication, do you think of who might be ahead, you know, from an antisense, you know, less inferior, kind of more inferior platform standpoint, or are you looking to sort of you know, treadmill waters like you did with AUD? Is that, like, how are you determining, you know, what cell types and what indications you're going to go for?
spk06: I would like to have, you know, some things that are first in class in what we're doing. There are contexts where an antisense ahead may be really problematic, and there are contexts where we think it may not be problematic. But the competitive environment around an indication is an important element, and it matters a lot if you're competitive in a large market versus competitive in an ultra-orphan market. Would you want to be straight up head-to-head in an ultra-orphan that's already being addressed fairly well with a similar modality? That's probably not a good place to be.
spk13: Got it. Thanks for the call, little bud. Appreciate you taking our questions.
spk11: Next question comes from the line of Ed Arce from H.E. Wainwright. You are now live.
spk15: Hi, Galantin and everyone. This is Thomas Yip asking a couple of questions for Ed. Congratulations on a lot of progress with multiple programs, both partner and non-partner. Perhaps first question for the Phase II Roche collaboration with 6346 and HPV. As we understand, the primary endpoint of service engine reduction what would be a threshold that we can look at to be considered as a success for 6346?
spk06: Well, in the Phase II study, the question being asked is really, does it look like you can achieve a functional cure with these combinations? And that means that the S antigen would go to undetectable and remain so. until 24 weeks, which would be the final assessment point. So you're really looking for zero.
spk15: Okay. And then perhaps back to Nudestrin and as you outlined, we're approaching closer to end-day filing and perhaps approval within the next 12 months. And you specifically mentioned targeting urologists and nephrologists. Any thoughts on what U.S. market launch will look like?
spk17: Yeah, it's Rob. Appreciate the question. In terms of our commercial activities, you're spot on. We're pacing them to the NDA filing and targeting, you know, and the FDA approval. A couple of key components. The launch planning is clearly underway at this point. I'm really pleased, and Doug mentioned it, we've hired the Vice President of Sales, which is the last member of my leadership team. So we have the full complement of functions represented across commercial at this point in time. And as you can imagine, all the key areas that you'd be expecting at this point in time are under development, such as branding, message testing, pricing and contracting, establishing patient services, acumen, and skills, and last but not least, now starting to design and size the sales force. Our expectation is we'll go to market with a full and comprehensive promotional plan and package, and we'll have all the functions in place to do that in the United States.
spk15: Okay, got it. Thanks for the insight. Perhaps one final short one for Lilly's anticipated IMD for 469 in the second quarter. Are there any milestones associated with that filing?
spk06: Yes.
spk15: Okay, got it. Thank you so much. Okay. Okay. Gotcha. Yeah, yeah. Looking forward to a very eventful second half this year.
spk06: Thanks, Thomas.
spk11: Next question comes from the line of Robin Kronoskas from Truist. You are now live.
spk01: Hi, guys. So one quick one. When you thought about designing your Phase 2 trial for A1AT, just a couple questions I had for you. I know there's some questions around biopsies having different levels of fibrosis improvement depending on where you biopsy in the liver. So how, you know, what kind of things did you take away from the ARHA data as far as, like, any potential modulation to how you're going to be running the Phase II trial? And what other additional parameters? What do you think are the most important parameters or additional parameters that maybe you haven't spoken about yet that will be important to determining how doctors view the A1AT data? from the clinician side. I was just worried about the biopsies having variable results. Thanks.
spk02: I think my... Well, we designed the study keeping, firstly, a placebo-controlled Phase II study. So that's the first thing. So we have included a control that allows us to make meaningful interpretations of the information that we will find. That's number one. Number two, knowing that the duration of effect in which you may see improvements in fibrosis until the arrowhead data became available and knowing that that's early small numbers, but still at 12 months, we have designed a cohort that's six months and 12 months, right? So we are getting a good sense for when are we seeing, what is the trajectory of the histological improvements that we expect to see? Traditionally, biopsies do carry the risk that you described, which is given that you biopsy a very small portion of the liver, 170,000 of the entire liver volume, things do get difficult to interpret. But I think that the goal was to make sure that we have had a control arm. We are making sure that we are thinking carefully about standardizing the way we're going to look at the biopsy, so a central pathologist having predefined criteria for how the tissue will be evaluated. So there's a series of steps that are taken in this context that there are a lot of learnings from the mass literature on how you need to do this to get it right. And we'll certainly be thinking about it. But in order to overall interpret the information, we are complementing it with the imaging approaches of FibroScan and MR-elastography to create a holistic picture, for lack of a better word, of how we are impacting the disease. And the foundation of it all is essentially silencing the gene to reduce the abnormal protein and allowing the liver to start healing. And we're encouraged to see from the early arrowhead data that like was previously described in viral hepatitis, there seems to be a possibility that this happens in AAD liver disease.
spk01: Got it. Okay, great. Thanks.
spk02: Thanks, Rylan.
spk11: Next one on the line is Kay Nakay from Chardon. You are now live.
spk16: Thanks. Just a couple of quick accounting questions, Doug. upfront 180 million for the royalty. How will you be recognizing that?
spk05: So we'll put that on the balance sheet. It'll be a deferred item in the liability section. And then we will recognize it proportionate for the current period royalties earned over the proportion, over the denominator of the lifetime royalties. So it'll be sort of a pro rata recognition over time for the life of the patent.
spk16: And the sales milestones, will you recognize those in whole once reached?
spk05: The contingent sales milestones for the royalty? They would be treated similarly to our others in that they would be added into the total transaction price and there would be sort of a catch-up for the proportion recognized over time. So there wouldn't be a single one-time recognition.
spk16: Okay, thanks.
spk11: Next one on the line is Jonathan Miller from Evercore. You are now live.
spk03: Oh, hey, guys. Thanks for letting me go twice. I appreciate it. One more thing that I wanted to follow up on from another analyst's question. When you think about XUS-PH partners, what are you looking for in the ideal partner there, and is there anything in particular on a deal structure that you're most attracted to? What sort of a partnership would you like to form XUS?
spk06: Yeah, I can speak generally about this. We're very deep in the process at this point in time. You know, we are looking for a partner that we think brings excellent rare disease capabilities and a strong history with the call point as a desirable point as well. In terms of structure, this is not a transaction where we're trying to optimize an upfront payment. This is more something where we're looking for a risk-sharing partner where we're also going to share the upside of successful commercialization in Europe. We're fortunate to be reasonably well-funded from a balance sheet perspective and have a pretty good visibility on continued cash inflows through collaboration. And so it was not a case where we were... It's not a case where we're trying to optimize what is the biggest number that we can get up front here, but rather what we think is a strong risk share in the collaboration. I think that's probably all I can say on structure at this point.
spk03: Great. Thanks. That's very helpful.
spk06: All right. Well, thanks for coming back for a second bite. And I think that's our last question. So I want to thank everybody and thank the operator. Hey, as we head into the summer months, we're really excited to have a lot of potential announcements, including FIACS 2 readouts, FIACS 4 readouts for Dozeran, Phase 1 data in A1AT, patient dosing in the Phase 2 initiation of that in A1AT, NDA filing or IND filing for DCR AUD, initiating that phase one study. And, of course, we are expecting a Lilly IND this year and maybe some more things that we end up announcing over the coming months as well. So we'll be participating in a number of investor conferences in the coming months, so we can keep you updated there and also, of course, on our next call. Thanks for joining us. Have a great evening.
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