Q3 2019 Earnings Call

Thank you for standing by and welcome to the quarter of 2019 earnings Conference call.

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<unk> any father assistance. Please press star there. Thank you know like to have the conference over to your first speaker today.

Lauren Stival Osbourne Investor Relations Maam, you may begin.

Thank you good afternoon, everyone and thank you for joining us to review Dicernas third quarter 2019 financial results and operational highlights.

For anyone who has not had a chance to review our results we issued a press release after the close of trading today, which is available under the Investor and media tab on our website at <unk> Dot Com you May also listen to this conference call via webcast on our website, which will be archived for 30 days beginning approximately two hours.

After this call it's been completed.

Speaking on today's call will be our president and CEO , Doug Fambro, who will discuss our corporate progress and key milestones and provide an update on clinical development and collaboration activities.

Our CFO Jack Green will then review our third quarter financial results.

We also have Jim why Smith, our Chief operating officer, and Ralf Rosskamp, our Chief Medical officer will be available to answer questions during Q1 I.

Following our remarks, we will open the line for question I.

I'd like to remind listeners that management will be making forward looking statements on today's call, including for example, plans and expected timeline for closing of the New Roche collaboration agreement development DCR PHXC DCR H.B. via DCR, a 118 and other pipeline programs.

The timing of release of clinical data alignment with F.D.A. on regulatory approval requirements. The expansion of our programs into additional tissue tight expectations related to our collaborations with Roche Lilly Alexey on and Boehringer ingelheim, especially expectations.

For discussions and possible opportunities with potential collaborators and guidance regarding future collaboration revenue operating expenses and cash usage.

Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those disclosed in the risk factor section of Dicernas latest forms 10-Q, and 10-K filed with the FCC.

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 I started as president and CEO Doug.

Thank you Laura good afternoon, everyone and thank you for joining us.

What an exciting time it is for US here at I. Sirna. We are proud of the work we have accomplished over the years and particularly over the last five quarters as we deliver on the strategic goals. We have set for ourselves we have progressed from revealing initial proof of concept data in our DCR PHXC.

Program, just starting dosing of our pivotal trial for that program. We have progressed to additional programs through clinical trial applications to initiate clinical development.

We signed three major licensing deals with Roche Lilly and Alexey on these collaborations have or will generate on closing in excess of 300 million in upfront payments to enable us to advance our wholly owned lead rare disease programs.

Which are DCR PHXC for the treatment of all forms of primary Hyperoxaluria and DCR, a one a ti for the treatment of Alpha one antitrypsin deficiency associated liver disease. We also retain an opt in for our DCR each Bbs program for the treatment of patients with crop.

On a couple Titus be virus infection, and often asked or proof of concept combination studies to co fund pivotal development in exchange for the right to co promote the product in the U.S. and obtain significant additional economic rights in the U.S.

We believe our clinical data and corporate collaborations validate our galaxy platform technology.

And we have only begun to scratch the surface of galaxy potential to successfully deliver arnie I therapies to both hepatic targets as well as to new tissues and therapeutic targets outside the liver.

Our corporate collaborate collaborations make us a stronger company.

They are not opportunistic rather they represent deliberate execution of our strategy for building a fully integrated biopharmaceutical company to generate exceptional value both for patients and shareholders key elements of our strategy include first retained.

In commercial rights to our lead rare disease programs, where we believe the probability clinical success is high second monetizing the extensive array of opportunities that we would not to pursue on our own through collaborations that help us to fund development and commercialization of our.

Rare disease programs and third advancing select low risk opportunities in highly prevalent diseases, then seeking development partners to reduce and share risk, while still retaining substantial economic rights in the U.S. such as co commercialization.

Ultimately, we believe this strategy will enable us to develop commercial capabilities first in rare diseases, which will provide a strong foundation for us to potentially move into a commercial roll for more prevalent diseases.

Hi, this strategy, we seek to retain Max more value for our shareholders, while seeking to ensure the maximum number of galaxy based programs and development across a wide array of therapeutic areas to extract the maximum therapeutic value from the galaxy platform for patients in need around the globe.

This we believe is the best strategy for all our stakeholders fulfilling our economic and social function.

As we rapidly progress the strategy, we continue to higher top talent and have outgrown our current laboratory and office space. We are looking forward to relocating next week to a new larger headquarters in Lexington, Massachusetts, which along with new dedicated space for our manufacturing team in Boulder.

Colorado, we'll continue to support execution of our strategy.

Without introduction I'd like to now highlight the company's key advances and achievements since our last corporate update.

For our DCR PHXC program for the treatment of all types of primary hyperoxaluria or P.H.. We have recently initiated dosing of patients in our Firefox two pivotal trial. We believe we will complete enrollment of the Fioptics two trial by the end of the first half.

2020 .

As a reminder, fivex to is a double blind placebo controlled trial with plans enrollment of 36 patients with P.H. type one and ph type two.

Patients are to remain on therapy for six months. The primary endpoint of the trial compares reduction in urinary oxalate levels from baseline to measurements taken from the ends of months three through six.

Per protocol DCR PHXC is administered as a monthly fixed dose subcutaneous injection of one milliliter volume for adult patient.

Based on our interactions with the P.H. community, we believe a monthly fixed dose regimen, maybe preferred from a compliance and convenient standpoint, and maybe preferable to both prescribers and patients compared to using weight based administration.

We are on track to have Prefilled syringes at the projected time of product launch.

We are also currently dosing Fiat three and open label rollover extension study for patients coming off various Fiat studies with the first patients having come off Fioptics one.

Phase one clinical study.

The dosing regimen is identical to that of Fioptics too.

Therefore, fioptics three data will likely have some read through for what Fioptics. Two data may look like we anticipate sharing fioptics three in the first half of 2020 as data from that trial mature.

On the regulatory front, we believe we have reached alignment with the FDA on a path to full approval for P.H. type II. In addition to ph type one based on successfully showing substantial reduction in high baseline urea urinary oxalate for the Fioptics too in the phase two trial in each.

Patient type.

This alignment with the FDA underscores the seriousness of ph type two as a disease and the urgency recognized by the F.D.A. to provide an effective therapy for this high unmet medical need.

As we've discussed outside of this call the emerging natural history data for ph type two shows that the lifetime risk of end stage renal disease is comparable to the lifetime risk in P.H. type one.

Moving onto our HBV program, we are particularly excited by our recent collaboration with Roche.

Unlike our discovery stage collaborations are HPV collaboration with Roche includes an option for us to co fund pivotal development of DCR H. PBS in exchange for enhanced U.S. royalties and the right to co promote the product in the U.S.

Importantly, we can exercise the option at the initiation of pivotal development.

Meaning that we do not their development costs until the phase two proof of concept combination studies conducted by Roche have generated data that support moving forward with pivotal trials. We believe this substantially de risks any future investment we may make in the treatment of HBV infection.

And just a distinguishing feature of our collaboration relative to comparable collaborations by others.

The Roche collaboration includes discovery stage work for additional HPV gene targets and human liver gene targets relevant to the treatment of HBV.

Under this discovery aspect of the collaboration both companies will seek to discover potential products and the best candidates will be moved forward for development with dice ARNA participating regardless of which company generates the candidate that is advanced.

Upon closing, we will receive a 200 million dollar upfront payment and up to $1.47 billion in potential milestone payments based on development approval and commercial sales of DCR HPV S plus royalties up to the mid teens globally.

If we exercised the co fund the option we are eligible for increased royalties in the U.S. from the high Twentys to mid Thirtys percentages.

Hi, Cerner, we'll complete the ongoing phase one trial after which Roche is responsible for future development of DCR HBV us.

We are confident in our approach and that DCR H.B.B.S. may be competitive with current candidates in development in its ability to show strong reduction and levels of circulating HBV S antigen.

With our collaboration signed we are shifting our R&D day timing to roughly mid year 2020, when phase one data from all planned cohorts will be available.

However, we already have some information that is perhaps indicative of the activity of TCR HBV S. Inpatient multiple patients from groups see the first cohort of HBV patients in our phase one trial have entered the extension phase of the study, which only occurs if.

Patient has achieved a one log or greater reduction in circulating S antigen at the end of month for.

Not all patients from the first cohort have reached this point in the study.

And not all patients who have reached month for have been eligible for the extension.

As a reminder, there are six patients in each cohort only four of whom receive drug and the other two received placebo.

Thus the information we have so far is consistent with the greater than one log reduction in circulating S antigen in at least some treated patients, but let me stress that at this point, we do not know which patients are receiving drug and which are receiving placebo and neither ourselves nor rose.

I have seen any quantitative data from this trial.

As a reminder, the group see portion of our phase one trial has three dose level cohorts at 1.53, 0.0, and 6.0 milligrams per kilogram and age cohort will enroll six patients two of whom will receive placebo.

We are currently enrolling cohort two of that trial, which is the 3.0 milligram per kilogram dose level.

We are also enrolling group b of the trial in which nuke naive patients receive a single 3.0 milligram per kilogram dose of HPV S.

The group a portion of the study which enrolled healthy volunteers is complete.

Moving to our third Galaxy clinical stage program, which targets Alpha one antitrypsin deficiency associated liver disease.

180, liver disease isn't inherited disorder that results from two copies of the mutated Z form of the a 180 gene, causing accumulation of Misfolded, a when 80 protein in the liver, which can cause liver damage and dysfunction, we filed our clinical trial application for a phase.

One slash two trial with the Swedish medical products agency or M.P.A. in July and are tracking nicely with our previous guidance of beginning the study this quarter with a plan to begin dosing healthy volunteers imminently.

As a reminder, the first phase is a single ascending dose phase in healthy volunteers enrolling up to 36 participants in as many as six cohorts.

The second phase is a multiple ascending dose phase in patients with confirmed a 180 deficiency associated liver disease, 'cause consisting of up to 24 participants in three or fewer cohorts.

We select our wholly owned candidates like DCR, Hey, 180, and DCR PHXC based on unmet medical need and what we believe as a high probability of clinical success relative to industry averages.

We have committed to a fourth internal program, beating our criteria, which appears on our pipeline, but we are unlikely to disclose the target of that program prior to reaching the clinical phase.

We continue to evaluate additional targets both in and outside the liver for internal program nomination.

Briefly touching on our collaborations we're pleased with the progress were making notably Lilly has accepted the first clinical candidate under that collaboration and we are targeting clinical entry for the program by the end of 2020. In addition, Lilly has nominated a forced target for the.

Cardio metabolic aspect of that collaboration they have to Cardiometabolic nominations remaining.

We have made good progress in our Aleksey on and Beringer ingelheim collaborations as well and I look forward to providing news as we hit milestones and those collaborations. However, beringer has informed us that they will not be advancing the first clinical candidate in that collaboration which has been to noted as DC.

Our allies, the one on our pipeline.

This is not due to performance of the candidate, but rather based on the biology of inhibiting that target for the treatment of Nash.

As I mentioned in the beginning of the call. These collaborations make us a stronger company.

We see strong potential for additional collaborative activity.

The liver is deeply in meshed in a wide variety of biological processes and consequently, our liver targeted galaxy technology is broadly applicable in multiple therapeutic areas, which is not exhausted by our current programs and collaborations in future collaborations we are seeking to replicate.

The opt in feature that is present in the Roche collaboration specifically the ability for dice ARNA to opt in after a clinical proof of concept for co commercialization rights in the U.S.

Finally, I'd like to mention our efforts and expanding galaxy to other tissues. We're very pleased with results to date in the nervous system as well as other tissues, we expect to present data on our delivery outside the liver during 2020.

On that note I will turn the call over to Jack to discuss our financials before we open the lineup for Q and a.

Thank you Doug.

I'd like to briefly walk through the key financial results and direct direct you to 10-Q filing for additional details.

Net loss for the third quarter ended September Thirtyth, 2019 was $30.8 million or 45 cents per share compared to 19 million or 35 cents per share for the same period in 2018.

The increase in net loss was primarily driven by the Incretion R&D expense period over period.

Tied to increase spending across our clinical programs.

R&D expenses were 30.1 million for the third quarter of 2019 compared to 11.7 million for the same period in 2018.

The 18.4 million.

The increase year over year was primarily due to increased manufacturing costs.

Clinical study costs and employee related expenses due to an increase in our headcount necessary to support our growth.

We expect overall research and development expenses to increase throughout 2019 and into 2020 and for the foreseeable future.

As we ramp our clinical manufacturing activities continue other activities associated with three proprietary product candidates.

An increase activities under the Lily Alexia on and VI agreements and potentially under the Roche agreement if they choose to select additional targets.

DNA expenses were 10.6 million from third quarter 2019, compared to 5.4 million for the third quarter 28.

The increase is primarily predominantly due to employee related expenses as a result of increased stock based compensation expense and headcount necessary to support our growth as well as an increase in general and business development consulting expenses.

We expect DNA expenses to increase in 2019 as compared to 2018, largely due to investments and staffing and market readiness activities.

During the third quarter 2019, we recognized $8 million and revenue from my collaborative agreements with slowly election on N.B. I compared to 1.5 million from the B. I collaboration in the third quarter of 28.

As of September Thirtyth, 2019, we had $312.7 million and cash cash equivalents and held to maturity investments compared to 302.6 million at December 31 2018.

In addition to that we will receive $200 million from the upfront payment upon closing of the grocery agreement.

We believe that I cash cash equivalents and held to maturity investments along with the upfront payment from Roche, which together totaled approximately half a billion dollars will be sufficient to fund our operating plan beyond 2021.

Which includes advancing DCR PHXC through a preferred pivotal development.

Regulatory filing and potential commercial launch.

Completing proof of concept studies for DC HPV Jaeson participants with HBV.

And advancing our DC I want a T program through the initial phase one two clinical study.

With that I will turn the call back over to Doug.

Thanks Jack.

We're fortunate in the strength of our balance sheet with these resources, we will continue to drive our rare disease programs work with our collaborators and advance our early stage opportunities.

As we also prepare to commercial to commercialize DCR PHXC. It has been an eventful year to date for dice or not and we look forward to hitting some substantial milestones in coming quarters. These milestones include.

Enrollment of the first healthy volunteers in the phase one slash two trial of DCR, a when 80 for the treatment of patients with Alpha one antitrypsin deficiency associated liver disease expected in the fourth quarter 2018.

Multi dose data from Fioptics three our long long term Multidose open label rollover extension study for the treatment of P.H. expected in the first half of 2020 completion of enrollment of our Fioptics two pivotal clinical trial by the end of the first half of 2020.

Proof of concept data from all plans cohorts of our DCR Hps phase one clinical trial in mid 2020.

I'd like to thank you all for listening today, and now I'll turn the call over to the operator to take your questions.

As a reminder to ask a question you will need to press star one on your telephone. If your question has been answered or you wish to remove yourself from the Q.

Please standby for we compile the Cana erosnow.

Your first question will come from many for heart.

<unk>.

Please proceed sir.

Hey, Thanks for taking my call congratulations on the progress over the last quarter.

Couple of quick one first sort of a relatively sort of boring modeling question when we think about.

So announcement of first targets.

Nobody et cetera.

But definitely next year, you're after about what.

Sure.

Those milestones to be.

Yes.

Just directionally.

More of a development question, when we think about art.

Around mid next year.

Is that about the same time that we should expect all the data from DCR PHXC three or should we expect that all the data.

For the before the.

Yes.

Okay.

So on the milestone question in general the first milestone is an ideal.

I'd filing or first patient dosed milestone.

And I think low double digit millions and is the right descriptor.

Those payments of.

As milestones disclose quantitatively I don't believe.

For the R&D day.

Certainly a fair question when we're going to talk about open label data to be perfectly honest, we have not fully planned our first half calendar.

It is as an open label trial, we could take a data cut at any time, but we are interested in sharing data when we think it's meaningful which means getting a substantial number of patients through.

At least a good handful of doses. So we have a fair read on the Multidose effect.

So that's not the that's before mid year and then the question is is there a forum and.

Thank you we just haven't looked at that closely enough to know if there was particular conference. So we'll try and provide better guidance by JP Morgan.

And work that out.

But it's certainly be no later than the R&D.

We had originally talked about an R&D day for December with the primary purpose of which was to share an interim read from the phase one trial in HBV.

With this collaboration in consultation with Roche, we thought it was.

With that collaboration now signed better to wait until data from all the cohorts is available and so we reset the timing of the R&D day based on that.

Alright. Thanks, that's very helpful. I know, we've got a lot of good while the Q.

Your next question will come from Jonathan Mueller.

Evercore.

Line is open.

Hi, guys. Thanks, so much for taking the question and class Congratulations again on all the progress during the quarter.

I guess, one thing I'm very curious about with the Roche HBV collaboration is that they've got several mechanisms in development, but they don't seem to have versions of some common approaches most notably a new but also capsid inhibitor, which of their combination agents are most promising to you and do you think that nuke is not necessary element to potential combo.

Phoebe.

And then secondly, just a clarification on the ph to endpoint to limit that you got with the FDA.

I am I right in assuming that that endpoint will be parallel to the P. H, one endpoint, where urinary oxalate production will be an average of several months worth of 24 hour measurement.

Yes, So let me handle those questions first with respect to roche's portfolio of combination elements I'm going to respectfully decline.

To pick favorites from the Roche portfolio and I know that there are elements in that portfolio that have not been publicly disclose so apologies for not being forthcoming there with respect to a new get a certainly our expectations that all combinations will include a new cars.

A foundation nukes are our effective in reducing viral agents and I I don't see in the near term efforts to build combinations that lack nukes.

That said I am not fully Privy to roche's long term thinking on the what will be in combos.

And the next what was the next question.

On the ph to endpoint or are you taking an average is it parallels with DHL yeah, it's exactly parallel to the P. H one and it involves an area under the curve measurement for.

Uh huh.

For the month, three four and five and six and comparing that to baseline oxides formula associated with that.

And as the exact same.

Now lets us applied to ph, one NPH too for judging whether a full approval will be granted.

Great. Thank you very much so it's not going to give myself as well.

[noise].

The next question is from Yaron Werber of Cowen Your line is open.

Hi, everyone.

Brendan on for your own thanks, very much for taking my question Congrats on a great quarter.

My question actually just in reference to the HBV program I'm wondering if you could give us just a little bit of color on what you're expecting in terms of.

That's antigen reduction in the single dose versus the multiple dose cohorts and.

Conversely also would you.

What levels of reduction would you expect to correlate with antigen.

Clearance NCR conversion.

Thanks.

Yes so.

I'll say, a few comments and then perhaps Ralph.

You want to add something to it.

That's a function of the group B, which is the single dose study a new naive patients a part of the motivation. There is just to get the pharmacodynamic curve associated with a single dose that will facilitate our modeling and simulation efforts and.

Setting dose regimens later.

Most of our studies in animal models are done with multiple dose most of the comparative human clinical data from other approaches is multiple dose and that means that we have less.

The base.

Speculation about what we see in a single dose in terms of S antigen reduction.

But I would note that three milligrams per kilogram.

In the ph trial appears to be near saturating dose for response and so.

We would expect.

To be fairly high up the dose response curve, even with a single dose.

As for expectations from the multiple dose study.

Based on our preclinical work, we think we would be at least as good as comparable R&D I approaches from others with the potential.

Based on our three gene hypothesis to perhaps be a little better and have a longer duration, but of course remains to be seen.

From the data Ralph do you want to add anything.

Thank you talk I think you're catching it very well, maybe I want to point out the newcomer E.

My mom is that's the first time that an R&D I blogs.

Is going into a new CNET E group and actually keep them off nukes, So I'll protocols stipulates that new.

Only.

Given to those patients after we bombs observation period.

Another trial.

Twoq nukes naive patients, but combined with the first dozing off the hour and they are I think that's really a difference. This woke up is really an inside.

How the arm they are therapy.

Works in patients who at least fourth week.

Not all mean sand and this goes back to the question.

And now is it always in combination with no. So we're able to compare here.

The group B nukes naive.

Patients with those.

On the books and.

I think it's an interesting scientific conclusions can be drawn from from.

These data.

Okay, great. Thanks.

Your next question will come from Stephen Willey of Stifel. Your line is open.

Yeah. Thanks for taking my questions and congratulations on the from the Roche collaboration.

Just I guess a quick question of clarification regarding the feedback to receive from if the regarding endpoint alignment with ph too.

So.

Did.

Did the data that the agency Steven was.

Was that data from the Fioptics two pivotal trial.

No.

They have seen data from Fioptics one.

Of course, including the ph two patients in the enrolled and Fioptics one.

They also reviewed the latest natural history data I believe there is a publication with that data in press and.

Some of that data was presented that the Hyperoxaluria workshop in Boston back in June and some was presented by Sally Hilton at our 2018 R&D day.

Okay I just.

I think the press releases maybe.

Ordered a little bit tricky there.

With respect to that yes, no worries.

My reading skills are also.

Elementary with respect to non hepatic delivery I know that this is something that you're working through with Lilly right now, but I guess.

What extend would dice or no.

Independently pursue programs that involve targeting and are now appeal to a non about a tissue.

Steve I, absolutely expect that we are gonna have non hepatic programs.

We are not at a point today, where we feel that we have maximize are fully optimized any of the extra hepatic tissues.

And we continue to develop the platform, having said that in certain tissue types weve achieved the level of knocked down where if that's as good as we can get.

We would declare clinical candidates at that level of activity I'm very pleased with the level of knocked down we're getting.

Both in the Ronald tissue types as well as some non neuronal tissue types. It is.

There are a lot of tissue types. There are a lot of ways. We can play with the galaxy molecules, particularly given the freedom to practice medicinal chemistry in that extended handle region of the molecule. So it is a very large space to explore if you will but it's been.

Quite productive you pointed out our collaborative work with Lilly, which.

His involves the nervous system. It also involve some cardio metabolic tissues that is only a subset of our work on extra hepatic delivery and there are purely dice aren't efforts proceeding in parallel.

It's been a pretty active year I know, we didn't get out and presented that this day that any of the technical conferences, but I'm quite certain that in 2020 will show some of that day that technical conferences. Nonetheless, you can probably picked up my tone about extra hepatic delivery has become quite.

Positive and that is based on results that we've been achieving in the labs.

Okay.

Okay. That's quite helpful. And then maybe just lastly, I guess with.

Completion of enrollment in Fioptics too.

I guess seemingly insight.

How would you guys thinking about commercialization I.

I guess both both.

In the U.S. and maybe.

The questions a bit more directed towards.

Actually Robert Thanks.

We are deep in an analysis of how we're going to deal with ex us.

As for U.S.

We're only contemplating that we would do it ourselves.

Okay.

It's taking my question.

The next question will come from Ed Arce A.C.H.C. Wainwright Your line is open.

Hello, everyone is actually the Thomas Yip scaring or a couple of questions on behalf of his tied up.

So first just wondering about the baby gear with Roche.

Specifically the timing off the upfront payment just want to make sure that.

Contingent on the when Roche.

Formally started agreement after initiating a phase one data and wondering if that amount co relate to the number of targets that are chosen by Roche.

Hi, This is Jim Thanks for your question.

Of course, given the deal.

Size and scope it has to go through HSR clearance as you can imagine.

And the payment would be expected soon after HSR is clear.

Regarding the number of targets.

Is that.

Has been explained to be up to five additional targets. Those are all research collaboration targets work on those targets has not begun may begin in the future.

Yes, just so there so.

Confusion, the 200 million is committed and assuming that deal clears HSR then it's a that's a contractually committed payment not contingent upon data or target selection or any other.

Addition.

Okay.

Burger specifically regarding the timing.

I suppose that work are.

Be available after the freight from data as report.

Well at this point where are not planning on.

Reporting data publicly.

In that timeframe.

It really will depend on when the when we get clearance from HSR and I'm not I'm, not certain which will be available first it's not relevant to the 200 million being owed to us.

And.

You know generally HSR is going to be at a minimum several weeks I think we're all aware of.

Another situation, where it's going a lot longer than that but we don't expect that this particular transaction will receive special scrutiny.

Okay.

Thats done nothing better from a clarification.

Perhaps.

I'm going to switch gears and after about a wondering if you program.

Carry remind us how does your volunteer phase work and when should we expect arbitrage if you remove Q patient dosing.

They're happy frontiers.

Ralph would you like to address that.

Yes, Thank you Kimberly.

A healthy volunteer part was we did about what the check see program.

So it's a dose escalation.

So you stopped all were very low dose. So we're just getting that can you not.

Pharmacology not active.

You stop us.

Well pair after two weeks there is a safety review.

Comedy deciding whether the rest of the cohorts can be dosed and ban.

Well, all patients up and dosed and and as a weak due to see whether we can go into the next.

Cohorts and.

As Doug said.

Up to six cohorts with Atos Salt 12 milligram per kilogram.

So we haven't guided especially when we start the.

Healthy when be stopped the patient parts, but.

I think we will look at.

Yep.

At the amount of knocked down.

Able to achieve.

Single dose in healthy volunteers.

And the first dose cohort that patient part.

I will be added those which will achieve 50% knockdown all they want to 18 in the healthy volunteers and then.

You can assume that say.

Level of knocked down will be seen in patients and I'm sure that.

We will not have weights to the highest dose of 12 milligram per kilogram.

So we see a 50% bulk down of the.

From a key.

Enzyme and plasma so it really depends.

How.

What time, we see.

50% reduction and Alpha one antitrypsin deficiency, and then we'd do a modeling and simulation to confirm that receive results throughout a multi dose.

Regimen and once we have this those back those.

We will then start the patient parts. So it's a little unknown to us when this will be the case.

Therefore at this time, we haven't given.

Guidance when the patient part will start.

Okay and understood.

Thank you finger very much for the additional information.

I can look a couple questions and congratulations again on your latest partnership and a great quarter.

Thanks Thomas.

The next question will come from a nod to Kumar of R.W. Baird. Your line is open.

Hey, guys. Thanks for taking your questions. So I guess on a macro basis My first question.

It is kind of torrid pace dealmaking over the last 24 months deal came over now do you kind of view.

Notion that what's your current balance sheet, you're going to push more things forward internally, both on a rare disease and not a rare disease basis.

Well, let me first start by.

Responding to what I think was a implicit aspect of the question, which is that we're either doing one or the other and we are trying I believe succeeding and organizing our work such that theres the dice earn apart and thus the collaborative part.

And so our pace of putting programs in the clinic reflects.

A very careful analysis that we do about the targets that we choose to.

Commit to some multi year high opportunity cost high dollar cost commitment.

And we tend to be very thoughtful about that that has led to us to make choices that are different than others. The analysis of were targeting in HBV that the gene used to target.

The reduction in oxalate and ph to expand additional pavements patients reflects the depth of that analysis.

So I don't see any.

Trade off or timing impact on our choices for our internal pipeline.

Relative to whether we partner more or not in the liver now having said having addressed that I would say that.

Repeat what I said on the.

In the script, which is that we see strong potential for additional collaborative activity.

And while I'm not going to provide any guidance beyond that.

It wouldn't be saying that if it if I thought we were going to enter a long period without collapse new collaborative activity.

Okay, and then thinking about.

I don't think Steve it seems.

Absolutely.

But is there a sense of how many teach two patients in ph in fioptics to would be necessary for this kind of recently announced regulatory alignment.

Ralph would you please address that.

Our protocol.

We have discussed split the FDA and also with the very best specify a minimum bumbles, it's too and actually the primary analysis will be.

All patients in this study so we'll be a combination of ph wall and ph two patients. So of course, you pulled back and do a sensitivity analysis and you will have to demonstrate that.

These results are not driven by the P. H one patients at that no. It's two patients for instance hasn't responded so for sure the FDA yeah.

We'll see spot.

We don't specify a minimum number so our our experience is in fire trucks that we had around 20% off patients with ph true as you know.

But prevalence and.

Ph population of ph too is around 10% to 15% so I would assume.

But out of 36 patients, which we're going to close.

We will have something like fall to SAP ph patients which reflects.

The prevalence off the disease, which will enable us to separately show that the.

The positive result in reduction it's not only is driven by the ph warm bodies old so.

Seem the same way the pitch to patients.

Okay and then.

Last question.

So how do you think about.

The R&D approach versus the kind of small molecule protein folding approaches that among others vertex is kind of rolling out there into the clinic to go out in their aimed to go after both long live or manifestations of P. eyes easy off one of the chips.

I certainly have some some thoughts on that Ralph do you want to start or would you like me to to go but I can.

Yes, I think cure for Ray.

I think to the works approach.

We know.

Got it.

From a natural history that.

Oh Gee note side, so the total knock out of Alpha one antitrypsin deficiency that those patients.

It's Pat all in the normal Z population start to show long infestations in their early Twentys and not buy it is the case in the ZZ population in the 14th and 15th.

So clearly.

If you maintain some level of alpha one antitrypsin.

In the circulation and this is a benefit too.

Protect the long that's the reason why all first cohort only we'll have time.

To have a 50% reduction on alpha one antitrypsin.

And the second cohort will be the maximal amount, which will be around 94, 95% to production. However, you want to see well.

Preserving some of the outside warm in the circulation, whether the fact in the liver.

Different.

And.

As you see that result, so augmentation therapy.

So.

Which has been show to also.

Right the alpha one antitrypsin levels and to protect.

Long.

And.

Therefore, I think that the theoretical approach.

Which we are changing it's maybe to explore all whether you really need full knock down off the alpha one antitrypsin therapy.

This liver disease.

A question can be stop Wes.

Well not fall.

All Alpha one antitrypsin.

But.

Yeah, what I would add to that is that the lung disease and the liver disease are separate and independent manifestations that are each both partially prevalent there.

They are treated by different positions.

With the different set of.

[noise] standard of care associated with each and we believe that whatever therapeutic approach is most effective in addressing the liver manifestation is going to be the therapy approved that is preferred.

Hepatologists and patience for treatment of the liver disease, and similarly choice will be made on the on the lung front.

Versus standard of care, there, which is augmentation.

So where we don't really see synergy and applying.

Potential treatment for both aspects.

As the disease and its two modification met a manifestation is actually treated.

And so we're very comfortable with power of our NIE to address.

Liver disease and believe that it is going to be highly competitive as modality for the liver aspect of the liver manifestation.

Alright, thanks, very much guys.

Your next question will come from my Yacktman tongue.

Yes.

Okay.

Hi, guys. This is a way for Mayank and thank you for taking the questions. So my first question is if you could perhaps come down the assumption you may have on the placebo response been type one and type two patients for the phase two trial.

So I would note that.

Patients do not perceive there oxalate levels.

And.

We don't anticipate there to be any response in placebo patients other than the standard variation observed when multiple measurements are taken from individual patient. We did an observational study sometime ago and we have some quantify.

Station of that that variation, but.

We don't see this as.

The type of disorder, where knowledge that someone is on treatment leads to.

A change in the primary endpoint, that's being assessed Ralph do you want to add anything.

Yes, I fully agree so as the primary endpoint is urinary oxalate, which will be magic in a central lab.

So neither we nor the investigator we'll see.

This urinary oxalate well you so.

We all the patients so we all remain unblinded and.

Page and my most likely over a period of six mums will.

Be able to know where there on placebo or not.

Of course in their fault longer terms thought is is open label.

Because yes.

I would assume that Rob.

Patients, having less stolen formation less still in the U. Penn.

Step because they should offer renal function bought in the six months trial.

I don't think that.

That that will be.

A really difference therefore, the FDA has agreed for both ph wants and ph true to use urinary oxalate as there's a really good endpoint.

Okay. Thanks, and then what you were able to serve the kidney stone outcomes data as part of the multi dose vial three study readout in the first quarter first half book Tony Tony.

Yes, we will report.

Any at worst event that this will be captured as adverse event or serious adverse events.

And importantly fish.

Rob.

Fewer in their oxalate low writing again these patients.

Existing stones already so it might well be that over.

For the first couple of months ear.

They have told me ones because they have pre existing stones.

Therefore in addition.

Bruce Tony and by ultrasound all in adult spy computed tomography, we measure rating, whether they form you stones and here you would most likely see a difference existing stones, Bayer and they've got the the surgically removed.

Oh the spontaneously.

Go away, but I think a mass or better measure is really the new stone formation right.

Again.

This will not be something would you be able to see over three to six months is something.

Where it will take a longer period and therefore our.

Long term extension study will go.

For three years.

Okay and my last question says if you could clarify if Russia look at any of the clinical patient level data from the ongoing phase one study and are you able to come to know how many bio pharma companies, where part of the process. Thanks.

So roasted not look at any data from the trial and we have not looked at any data from the trials. We havent reached the planned interim Reid.

I think.

I think the all I can say is that it was a competitive process involving more companies than Roche and I should should leave it there.

Okay, Great made on baby right I, maybe I thought I want to add Roche has seen.

Clinical data for us from the healthy volunteers. So they have seen our healthy volunteer safety data because there is no reduction of course.

In addition of S antigen and they have also seen the clinical safety data.

I'll be ongoing HBP study there have not seen any uptick as we have not seen any efficacy data in terms of and get your and all on Weibo pilot media as Bob They have looked at clinical data in terms of safety.

Okay. Okay. Thank you so much and congrats on the progress.

Thanks.

The next question is from Kay Mackay shorten your line is open.

Hi, Thank you.

Two questions so I'm HPV one.

With respect to your recognized at 200 million as such we have Sue just straight line recognition of deferred over.

Say three years.

Yeah. We got this is Jack we Havent, specifically worked out the timing of the revenue recognition that's in process and we certainly will be more.

More.

Clear on the next call. However, if you look at the way.

Our current collaborations have been recognized.

You can you tell that on the balance sheet.

Looking at the amount Thats current and the amount that's long term in a deferred revenue, it's likely going to be very similar to two those contracts.

And it will be recognized over the term of the over the term of the.

Research collaboration so that I I think as a as a.

As a place holder as a as a model something along those lines and will be will clarify that as we go.

As we complete our analysis.

Okay.

Point of the Optune after see.

Yes.

Study is there some define level of efficacy in terms of being able to offset some sort of some degree of a functional cure that's in place or how do you or how would you know what parameters cause cause you to go forward with your often.

Ordered them to go forward with program itself.

So there are no.

Criteria in the contract.

That constrains, our ability to exercise the opt in.

When Roche and if Roche advances the program into pivotal development, we have the right to exercise the often.

At this point I think it's impossible to say what level of activity on what parameters we would require.

In part because it's comparative to what's going on from others in the field and how competitive we think.

Product will be obviously, we're optimistic about our own program.

And I think it's likely it will be highly competitive, but we'd see the data.

And similarly.

I'm sure there's a similar calculus within Roche.

They'll make about what though what they need to see to take it forward, but I I cannot say what that might be.

Okay. Thank you.

Well I want to thank you all for joining the call today as we reviewed our third quarter 2018, earning results. We look forward to a successful fourth quarter and providing additional updates as they are appropriate.

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