Q4 2019 Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the dice hernia Pharmaceuticals fourth quarter and full year 2019 earnings conference call.
This time all participants are in listen only mode. Later, we'll conduct a question and answer session and instructions will follow with a tight as a reminder, this conference is being recorded at the company's request.
I'll now turn the call over to your host largest about besides representing Dicer Pharmaceuticals. Please go ahead.
Thank you operator, good afternoon, everyone and thank you for joining us to review Dicernas fourth quarter and full year 2018 financial results an operating highlights.
Anyone who has not had a chance to review our results we issued a press release after the close of trading today, which is available under the investors immediate tab on our website at <unk> Dot com.
They also listening to this conference call via webcast on our website, which will be archived for three days beginning approximately two hours. After this call is completed.
Speaking on today's call will be just turn as president and Chief Executive Officer sounds Pembro will discuss our corporate progress and key milestones and provide an update on clinical development and collaborative activities.
Our Chief Financial Officer, Jack Green will then review our fourth quarter financial results.
We also have Jim Weisman, our Chief operating officer, and Ralf Rosskamp, our Chief Medical officer available to answer questions during <unk> session.
Following our remarks, we'll open the line for your questions.
I'd like to remind listeners that management will be making forward looking statements on today's call, including for example, the therapeutic and commercial potential and a dose Ren.
Our G 6346, DCR, a 180 and the galaxy not form research and development plans and timelines the potential for discern a tick continued to add programs extend the reach of our technology to additional tissues and our internal discovery research and in our collaborative programs.
Expectations related to our collaborations with noble Nordic.
Roche Lilly's oleksiak and be I, and the potential for future collaborations and they started his financial condition expectations about current or future clinical data collaboration funding expenses in cash usage actual results may differ materially from those indicated these forward looking statements as a result.
The various important factors, including those discussed in the risk factor section of the started this latest forms 10-Q, and 10-K filed with the FCC.
We may elect 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 Pembroke I served as president and CEO Doug.
Thank you Lauren good afternoon, everyone and thank you for joining us.
As I reflect on 2019 I believe it was our most successful year, yet we began 2019 primes with a great deal of momentum accelerated over the course of the year with significant progress or cross our clinical development programs in our organizational growth and maturation and clearly on the corporate collaborate.
Ration front as well, both with executing on existing collaborations and striking new ones.
Among our treatments last year, we moved our lead program the dose around for the treatment of primary Hyperoxaluria type one two and three into pivotal development, we completed and presented data on the Fioptics. One phase one study last year and began dosing patients in the pivotal fives to try.
Now, which is enrolling patients with P. H, one N P H too.
Importantly, we also aligned with the FDA on a registration path to full approval of note those around for treatment of both P. H one N P H too and received breakthrough designation for P. H one.
As many of you know primary hyperoxaluria as a family of ultra rare life threatening genetic disorders that cause complications in the kidneys, including recurrent kidney stones and chronic kidney disease and can lead to end stage renal disease.
In our HBV program, we completed the healthy volunteers portion of the phase one trial and began dosing patients.
And in 2019, we also initiated our clinical program, which we called the Shine program for another core development program D C or a 180 for the treatment of Alpha one antitrypsin deficiency associated liver disease, we began dosing in healthy volunteers last fall and received orphan.
Designation for DCR, a when 80 in the EU.
On the corporate front, we expanded our leadership team with several key new hires including bringing on our chief commercial officer, Rob job Anneli and recruiting one of the world's leading experts in primary Hyperoxaluria Dr. banner and <unk> as our global head Medical Affairs.
In addition to recruiting heads of HR. In addition, we recruited heads of HR regulatory and patient advocacy amongst other key positions.
Our overall employee base expanded significantly in the past year as we put in place the key functions to enable successful execution across our core and collaborative programs and begin transitioning towards becoming a commercial stage biopharmaceutical company.
And on the collaborations front, we executed high value agreements with Novo Nordisk and Roche in the fourth quarter, providing 375 million in non equity upfront payments that have significantly augmented our cash position.
Well it depends more on these in a moment.
Equal importance, we successfully executed on our existing collaborations with Lilly and Aleksey on in the case of Lily. We expect the first I N D or C.T. a filing later this year.
The first discovery program launched under that collaboration.
And alexey on exercise their options to add two additional complement gene target programs to the collaboration for which we received $20 million an option exercise payments added to the initial too there are now a total of four target genes under our collaboration with Alexia.
Coming back to our new Roche and Novo collaborations each of these agreements provide us with opportunities not only for future revenue from milestones and royalties, but also the ability to opt in and share in development and commercialization of select programs with these opt in features we can.
To retain a strong economic stake and operational involvement in key programs, giving us the opportunity to make them part of our core pipeline.
With these opt ins the Roche and noble collaborations set a new standard for us and assessing potential future collaborations.
These achievements over the past year have solidified our base business and represent the building blocks to our creation of a sustainable fully integrated biopharmaceutical company with a capacity to identify develop and commercialize new Arnie I based therapies for ourselves and our collaborative partners.
Our 2019 collaboration significantly strengthen our balance sheet funding us into 2023.
With our table nicely said 2020 is about execution and preparing for commercial success.
Starting with the dose around.
The dose around is the only arnie I candidates in development for ph types, one two and three.
Using our proprietary Galaxy Arnie I platform technology, we rationally designed to dose, Iran to target the L. B H, a gene, which catalyzes the final comments step of oxalate production the bad actor in ph and not just P. H, one, but also ph to engage three.
Targeting LDH a news around can interfere with production of the LDH enzyme preventing oxalate formation for any of the known forms of ph.
Data from our first clinical trial of net those around Fioptics, Oh flags one phase one trial showed that seven of eight patients with P.H., one or ph to who were treated in the study with her three milligram per kilogram target dose achieved normal or near normal urinary oxalate levels. After just one dose of the Doe.
Ceramic.
At the highest dose level of six milligrams per kilogram, all four patients all P. H, one achieved normal or near normal urinary oxalate levels a levels together at the two highest doses 11 of 12 patients or 92% achieved normal or near normal urinary oxalate levels.
We expect to present additional data on that those are friends effect urinary oxalate reduction over time with the initial into those are in multi dose data emerging from our Fiat three trial at the Auxel Europe International Congress on March 30, Onest 2020.
For those new today Sirna Fioptics three trial is our open label rollover study open to any participant in our Fioptics clinical development program.
The dosing regimen for Fiat three is identical to that of our Fioptics two pivotal trial, which should provide some read through for what fivex to data may look like.
The next three will give us the first glimpses of knows Iran's ability to provide long term reduction in urinary oxalate levels to the normal or near normal range with the potential to reduce or eliminate the need for patients to hyper hydrate.
Because the availability of data is dependent on when patients began dosing we expect to have more data available as the year progresses and will provide a more fulsome picture of what those rents profile as the data mature.
Expect to present, the additional data at our planned R&D day in August.
Hi, Thanks to our double blind placebo controlled pivotal study of note those Iran began last year is a critical study in our Fioptics clinical program.
Hi acts to will include 36 patients with P.H., one and gauge to in patients in this trial will remain on therapy for six months. The primary endpoint will compare the reduction in urinary oxalate levels from baseline to measurements taken from the end of months three through six.
We continue to expect enrollment in fivex to to complete in the first half of this year, putting us in position for last patient out.
End of the year.
The data from Fioptics to together with the data across the finance program are expected to support an end da package for full approval to treat P. H one N P. H to the submission of which we are targeting for the first half of 2021, and we continue to discuss with FDA regulatory path forward for.
Ph three our objective subject Fts agreement would be to provide data on the does friends effect NPH, three and seeking approval for patients with ph three.
With the key clinical components of our end da falling into place in a matter of months preparations for commercialization or a high priority. This year during 2019 and continuing to the present, we have made key hires at medical affairs marketing manufacturing and other critical areas of our business to support our.
Evolution to a fully integrated biopharmaceutical company with the resources to hit the ground running commercially.
We will have more to say about our commercial planning later this year, but at a high level, we expect to making the does that those are in available on a global basis to that end. We have made the strategic decision to focus our commercial enterprise on the U.S. market and seek a collaboration partner for commercialization ex us.
I will not go into detail on potential partnering discussions nor will I provide any expectations around timing or scope.
But assuming regulatory approvals, putting the right resources behind those around to ensure that it is available to the most patients worldwide fits our overarching mission to broadly enable our arnie I technology the benefit as many patients as possible as such securing the right arrangement for the dose around outside the U.S. as a high priority.
For us.
Moving onto the hepatitis B virus or HBV program RG 6346, formerly referred to as DCR HPV, yes.
RG Sixthree for six is the galaxy based therapy for the treatment of chronic HBV infection chronic HBV is a serious liver and section that can result in advanced liver disease or liver cancer, if not treated effectively chronic HBV infection claims more than 887000 lives annually with an estimated 290.
2 million people infected worldwide.
We're currently studying RG 6346 in an ongoing placebo controlled phase one trial evaluating healthy volunteers as well as patients with chronic HBV infection.
Now license to Roche under the collaboration agreement, we struck with them last year I Sirna is responsible for completion of phase One development Africa, which Roche will assume it's further development.
We completed dosing in healthy volunteers referred to as group a last year, but showed good safety and Tolerability of RG 6346 in May we began dosing patients.
Looking at two patient types.
Those who are newly diagnosed chronic HBV patients naive to standard of care with news and who agreed to forego initiation of new therapy for 12 weeks. These are referred to as group B patients.
And those who have previously received treatment with news and are part of a multiple ascending dose groups see cohort with continued new treatment.
Patient in patients in groups B and C enter into an extended follow up observation period, if they achieve reduction of hepatitis b surface antigen greater than or equal to one log from baseline and have reached the end of the formal study period, which is 12 weeks recruit be and.
16 weeks for group C.
As a reminder, this trial remains blinded and we do not know what treatment regimen patients are receiving.
That said multiple patients have entered into the extended follow up observation period, and we're very encouraged to now have representation from both groups B and C and follow up.
We are looking forward to results from this study in the coming months and are working with Roche to make the data available at our Investor R&D day planned for August.
Our agreement with Roche encompasses Archie Sixthree for six as well as additional therapies targeting human and viral genes associated with HPV infection.
Before I suraj that means that we will be focusing not only on completing the ongoing phase one study, but also anticipate generating new leads out of our R&D I discovery engine for HPV.
We received at the 200 million dollar upfront payment in early January and for RG Sixthree for six specifically could receive up to an additional $1.47 billion overtime for the achievement of specified development regulatory and commercial milestones as well as royalties.
Product sales of RG 6346.
One of the key features of this agreement is our ability to remain involved with RG 6346 over the long haul with the opportunity to at our option co funded pivotal development of RG 6346 worldwide in exchange for enhanced royalties and co promote in the U.S.
Products that include RG 6346.
We also have the opportunity to receive additional milestones and royalties on any potential therapies that emanate from our R&D efforts targeting multiple human and viral jeans implicated in chronic HBV infection using technology from either a company.
And now moving to DCR, a 180, our second rare disease clinical candidate.
DCR a 180 as its name it implies is being evaluated for use in patients with a 180 or alpha one antitrypsin deficiency and specifically for eight when 80 deficiency associated liver disease.
When 80 deficiency is a genetic disorder that frequently causes accumulation of misfolded eight when 80 protein in the liver, which can cause liver damage and dysfunction.
Considered a rare disease. There currently no approved therapy, specifically designed to treat the liver manifestations of this condition.
We began the first portion of our phase one slashed to study of DCR, a when 80 last fall and are currently dosing healthy volunteers.
This is a single ascending dose phase and will enroll up to 36 participants in as many as six cohorts second part is a multiple ascending dose phase in patients with confirmed a when 80 deficiency associated liver disease, consisting of up to 24 participants in three or fewer cohorts, we expect to begin dosing patients with a one.
He and the second half of this year.
Moving now to discuss our corporate discovery collaborations I'll begin with our new collaboration with Novo Nordisk.
Novo agreement, we entered into last November surpassed each of our previous agreements in terms of overall scope, providing novo with rights to potentially any liver targets not subject to a current collaboration or held aside as I sort of proprietary program structured in this way nice ARNA and novo expect to jointly evaluate.
Use of our Galaxy technology for approximately 30 liver targets in multiple disease areas over the course of the discovery collaboration.
With galaxies capability to inhibit Panasonic targets. This collaboration has the potential to deliver multiple clinical candidates for disorders, including chronic liver disease, nonalcoholic, steatohepatitis or Nash type two diabetes obesity and rare diseases.
We are obligated to conduct and fun discovery and preclinical development the clinical candidate selection for each liver sell target and Novo Nordisk will be responsible for all further development other than the first program for which we conduct dined enabling studies.
In similar to the Roche agreement, we have the opportunity to play the long game, maintaining the option to co develop and co commercialize two clinical stage product candidates discovered under the collaboration with the reciprocal option available to Novo for two new dicer liver rare disease programs.
Our to opt in rights can be exercised up through the availability of data from the first phase one study and the first phase two study respectively. In other words, we can choose to opt in after observing successful clinical proof of concept data substantially de risking these programs.
We received the $175 million upfront payment in January and Novo completed their 50 million dollar equity investment and I sirna at a premium in December following HSR clearance as with our other collaborations we got straight to work and Novo has already selected the initial targets.
We are eligible for another $25 million this year and in each of the coming two years or fulfilling our discovery obligations longer term, we could earn up to 357.5 million per target in development regulatory and commercialization milestone payments plus tier.
Realty's on product sales ranging from the mid single digits to mid teens for programs, where we do not often.
Regarding our other collaborations as I mentioned earlier Alexia on recently expanded to a total of four complement mediated targets with their election to exercise their options for two additional targets in September.
We're very pleased by the progress we have made with the initial two targets advancing to the preclinical development stage I believe this progress demonstrates the power of our galaxy platform to rapidly create effective molecules for development against liver targets.
Finally, our collaboration with Eli Lilly, which we initiated in late 2018 is also progressing well. This agreement is our broadest in terms of types of therapeutic areas targeted and dovetails with areas of innovation at Lilly is known for and which are our strategic importance to Lily.
The furthest advanced of any of our collaborative programs is known as al why 356177 for a candidate in preclinical studies that we are developing with Lilly for cardio metabolic indication.
Assuming all continues to progress well, we expect an investigational new drug application or clinical trial application that is an eye into your SCPA for al Why 356 774 late this year.
RCM to the second programming that collaboration is also now in the preclinical phase or cardio metabolic indication.
Al Why 356, 17, 74 represents the leading edge of a wave of candidates that we expect to advance to the clinic over the next two years.
Non liver candidates represent the next frontier and Arnie I and isn't important area of significant interest to us.
Nervous system diseases, and disorders are notoriously difficult to treat with traditional medications.
We believe that the precision precision presented by our nine and the ability to target the disease, causing proteins of selective jeans holds tremendous promise for nervous system diseases and this successful could become one of the most significant areas of advancement in the field.
As a reminder, our collaboration with Lilly includes an exclusive collaboration in neuro degeneration and pain, well by Cerner retains the right to develop certain neurological rare disease programs.
In addition to applications in the nervous system, we are exploring other disease areas that lend themselves to R&D and I targeting we have a long way to go to prove the south and I'm very optimistic about our chances we expect to present, our first data supporting extension of our Arnie I technology to additional tissues in August at our planned R&D day.
It's an incredibly exciting time to be at dice, ARNA and I'm very happy with the progress we're making across the organization.
There's a lot going on and we have high ambitions all of which are enabled by our ability to work off a solid financial base.
For a discussion of the financials I would now like to turn the call over to Jack Green, our CFO deck.
Thank you Doug.
I'd like to briefly walk through the key financial results and directed direct you to our financial results Press release annual report on form 10-K issue today for additional details.
Net loss for the fourth quarter ended December 31st 2019 was $39.7 billion.58 per share.
Good to 18.6 million or 29 cents per share the same period in 2018.
The increase in net loss was primarily driven by the increase in R&D expense period over period.
To increase spending across clinical programs and an increase in January due to increased spending related to commercialization preparation activities and related headcount.
R&D expenses were 34.8 million for the fourth quarter of 29 chain compared to 13.8 million for the same period in 2018.
The $21 million increase year over year was primarily due to increased manufacturing cost clinical study costs and employee related expenses due to an increase in head count necessary to support growth.
We expect overall research and development expenses to increase throughout 2020 and for the foreseeable future as we ramp our clinical manufacturing activities continue clinical activities associated with three of our core product candidates initiate activities under the novo and roshe agreements and contain.
New activities under the Lilly election.
Grants.
DNA expenses were 13.6 million for the fourth quarter 2019, compared to $7.2 million for the fourth quarter 2018.
The increase was primarily due to employee related expenses as a result of increased headcount required to support growth.
As well as an increase of professional fees and consulting expenses.
We expect DNA expenses to continue to increase in 2020 as compared to 2019, largely due to investments and staffing and market readiness activities.
During the fourth quarter 2019, we recognize 7.1 million in revenue from our collaborative arrangements with Lilly Aleksey on and VI.
Did the 1.5 million from the VI collaboration in the fourth quarter of 2018.
As of December 31st 2019, we had approximately $395 million of deferred revenue on our balance sheet.
Representing the aggregate transaction price applicable to future performance under the company's collaborations, which will which will be recognized as revenue in future periods.
Of that amount approximately 212 million was current deferred revenue expected to be recognized as revenue in 2020.
In approximately 183 million was non current deferred revenue expected to be recognized as revenue beyond twentytwenty.
Let me take a minute to walk through the components of deferred revenue by collaboration.
But the Aleksey on collaboration deferred revenue totaled approximately approximately $53 million with 27.8 million classified as current.
And the remaining 25.2 main classified as long term.
We expect the majority of the deferred revenue to be recognized through the fourth quarter of 2021.
The $20 million upfront fee paid by election on for its third and fourth targets is included in the deferred revenue number at December 31st 2019.
But the Lilly collaboration deferred revenue totaled approximately 135.5 million.
With 63.2 million classified as current.
And the remaining 72.3 million million classified as long term.
We expect the majority of the deferred revenue to be recognized through the second quarter of 2022.
The Roche collaboration.
200 million dollar upfront payment, which was received under the contract terms in January.
I was recorded as deferred revenue as of December 31st 49 team.
That amount 118 million is classified as current and expected to be recognized as revenue in 2020.
Primarily associated with the completion of phase one study of RG six three for sex.
We would expect the balance to be recognized as revenue during the remaining remainder of the three year research term, which is expandable by an addition by up to two years.
For the Novo collaboration 4.2 million to 4.2 million dollar premium on Novo is 50 million dollar equity investment was included in deferred revenue at December 31st 29 team.
However, the $175 million upfront payment from Novo was contingent on research deliverables achieved in January 2020, and so is not included in the deferred revenue number at December 31st 29 team.
The $175 million upfront payment will be recorded in deferred revenue in Q1 Twentytwenty.
We expect that the deferred revenue will be recognized over the five year research term, which is extendable for up to by up to two years.
Finally for the VI collaboration deferred revenue totaled 2.2 million all classified as current.
As of December 31st 29 team, we had 348.9 million in cash cash equivalents and held to maturity investments compared to 302.6 million as of December 31st 2018.
As mentioned in addition to that we receive 200 million and 175 million in upfront payments from the ROE should novo agreements respectively. In January 2020.
Received approximately 39 million in net proceeds from the sale of common stock to a single institutional and under our ATM program in February 2020.
We believe that our cash cash equivalents and held to maturity investments along with the upfront payments received from noble and Roche.
And the proceeds from the ATM stock sale, which together totaled more than $750 million will be sufficient to fund our operating plan into 2023.
This plan include our expectations to advance the dose, Iran through pivotal development regulatory filing.
Income and potential commercial launch.
Completing proof of concept studies about 6346 in participants with HBV infection.
Matching the company's DC 880 program through initial phase one two clinical study and initiating and conducting research and development programs without collaborative partners.
I also want to briefly discuss the Corona virus.
Like other biotechnology and our an AI companies our supply chain realize in part on manufacturing capacity in China.
In light of the impact of covert 19 on China's workforce.
We've been closely monitoring production schedules in China.
Based on our discussions with our suppliers scheduled runs have remained on track so far.
We we are also monitoring the potential for an impact outside of China, and considering appropriate actions to mitigate risk.
We're not anticipating a supply disruption or impact on our development timelines at this point.
If circumstances change and the workforce at our suppliers is impacted by the virus as significant effects outside of China in the future.
We could see supply delays and interruptions for some programs.
Mitigate supply chain risk, we are seeking to build additional safety stock in our supply chain when feasible to do so.
Monitoring recommendations from the CDC.
In addition, prior to the prior to the Corona virus situation, we had already begun developing alternative suppliers outside of China and key proprietary reagents and we expect to begin supplying.
Expect these to begin supplying us this calendar year.
And finally on a personal note today, we announced that I will be retiring as CFO Dyson in the near term.
After a 45 year finance career I feel it's time to move on to the next chapter.
I agree with Doug to remain as CFO.
Fill a successor as recruited and on board and for it.
Transition period, thereafter, and I will stand a consulting role to assist the company beyond that transition.
I have to say that im very excited about the tremendous progress dissect. It is made and I'm honored to have played a role than the company's growth.
I have a great deal of confidence in the company's prospects.
Fall into watching its future success from the sidelines as I complete my transition.
I will turn call over the Doug.
Thank you Jack I speak on behalf of all of US. It I certainly when I say that has been a pleasure working with you Jack has been a trusted colleague indicting handsets I set out for the past four years and he will be greatly missed.
Jack noted he will be staying on as CFO until we have a successor on board and will remain and advisory capacity for a period of time thereafter, we have engaged an executive recruiter and that search is now underway.
We will be business as usual until we have someone in place with DAC continuing to perform his customary duties as CFO.
And while this isn't like the by today, we nonetheless take this time to with Jack well in his transition towards retirement.
This will be an important near for dice Arnaud with multiple planned milestones and the cash resources to achieve our strategic goals 2020 will be defined by clinical execution across our core portfolio, establishing the foundation for anticipated commercialization of those Iran.
And expanding and advancing our early stage Arnie I type line before ourselves and our collaborative partners.
Look forward to an event filled here and providing updates on our progress.
And with that out I would now like to open the call for questions.
Ladies and gentlemen, if you have a question at this time. Please press star and then there are number one key touchtone telephone.
Your question has been answered or you wish to remove yourself from the Q you May press the pound.
Your first question comes from San Wiley of Stifel. Your line is open.
Yeah. Good afternoon, thanks for taking my questions. Congratulations on good 2019 and.
Good luck on the on the transition Jack.
Quick question, just regarding the ph three dialogue, you're having with the FDA can you maybe just kind of provide a little bit of context around what some of the levers are involving that discussion I know this is a fairly.
Heterogeneous patient population with respect to disease severity.
There are some kind of threshold here that needs to be established with respect to baseline urinary oxalate levels in order to.
Identify the most appropriate patient population for clinical trial in maybe just talk a little bit about when you think you might have some of the regulatory clarity and.
Yeah, we're happy to address the ph three situation that I'm going to pass the Ralph Ross Camp our CMO.
Yes.
Thank you very much.
I think.
The beauty of breakthrough designation, which we have a page won it allows us also to have continuous discussion with the FDA on ph too and as you know.
At one point, we only had the approval off the FDA full approval for ph won and then laid out we came back well the dialogue with the act.
Also having achieved full approval for ph true.
That is this an ultra rare disease and the ph three has only been genetically confirmed 10 years. So.
The issue, we are facing as well with the FDIC that there.
Is not the same amount of natural history data.
Towards.
The progression of disease towards the relationship between jury Mary oxalate and outcome.
And we are working and continue to work closely with the FDA.
To find a regulatory path forward is extremely helpful. They acknowledge that this is.
Some patients I really severe.
Disease patients having continues stone.
Formation, and we haven't yet too.
To a conclusion, but I'm I'm pretty hopeful that.
Through our continuous discussion or when I mean continuous discussion means.
Since we're having breakthrough designation we had already.
A couple of telephone conference with it.
Able.
To to come to an agreement to yes.
Okay. That's that's that's helpful and then.
Doug I don't want to I guess.
Front run any.
Potential R&D day surprises here, but can.
Can you speak to the extra hepatic tissues that we might be seeing.
Data in.
When you guys kind of provide us.
This update I'm presuming that CNS is probably extra hepatic tissue of interest but are there any other.
Tissues here that we that we.
I want to keep brown.
Yes. Thanks, Steve you are correct to think that CNS is going to be front and center of that effort and we'll be talking.
About that pretty extensively at the R&D day, but for now and a decline to indicate any of the other future directions.
Okay, and then maybe just lastly for you Doug I guess is probably not a question I typically ask but.
Yes, I think we've we've been getting a lot of questions around I think some of the stock sales that happened in the latter part of 19 in.
I think maybe based on the way that they were.
Mr tumor crossing of the wires, there was a little bit of.
Fusion around those can you, maybe just kind of provide a little bit of more clarity around.
We are those where they stand right now and I guess your.
Your continued leverage buffer thanks.
Yes, thanks for bringing this up Steve because I did see in the press there was a fair amount of Misreporting about this.
I'll, just say as as a percentage of my own options vested of Unvested. The sales were about 5% and given where we are you know as I've talked today. This is the I'm more bullish on the company now that and as prospects than I've ever been.
Okay I appreciate the color and congrats again.
Thank you. Your next question comes from trying to Tim Miller of Evercore. Your line is open.
Hi, guys, yes, thanks for taking the question and again.
Congratulations to everybody in the progress last year into your Jack.
For making the transition.
I'd like to start.
By asking a little bit more about the ramp of your commercial build out this year I know you've already made some key hires but how much more ramp should we be expecting and how will that develop over the course of this year.
Yes, I'm not going to speak in.
A lot of quantitative detailed answer this question, but.
I think you can think about three phases. The first phase is bringing in a leadership tier that establishes the strategy and the scope of effort that of the buildout and that pays I'd say at this point is complete.
The second phase has to do with beginning in an appropriate way.
To really be communicating with physicians and to a lesser degree, but but significantly communicating with payers as well to set the groundwork for the actual payer discussions and the marketing of the product later so.
This involves bringing in a tier professionals, who can communicate at this point in an appropriate fashion things like the medical science liaison crew that phase is starting now and will continue through the year and through the.
Early parts of next year and then the third phase is to really put the on the ground Salesforce on place ready to go as soon as you know we hope.
We get approval from the FDA to market so.
We are very much hoping that with an anda filing in the first half 2021 for breakthrough designation orphan disease product that we would be launching in the second half of 2021, So 2021, we'd be putting that in place and getting training done and all the materials put together and ready to go in terms of the scope of effort, it's an ultra orphan.
The rare disease with concentrated treatment treating physician group.
And so the scope of our effort, which has us focus for us as we discussed is going to be size to that sort of market. I mean, we're fortunate to have all the resources, we need to put in place. The program. We think is the ideal program to do this and.
Yes, roughly speaking.
Perhaps it doesn't Emma cells, and 20 or a couple dozen salesforce, it's around that scale of effort. So hope that gives you the sense of where we are and how we're thinking about it.
Absolutely. Thanks, that's that's great color I guess, the other thing I'd like to ask about is.
On a T program, which I know you've already got in healthy volunteers and going to patients this year.
Is there any likely what do we could see preclinical translational data more this year, maybe the R&D day and what are your expectations for top wining that initial patient data.
Well. This is a program that I think will significantly expand our communications on later this year.
At the R&D day, we'll certainly give more information about the program and I'm anticipating that we'll be presenting healthy volunteers data at that program as we move towards.
The patient phase beyond that I think we'll give more timing guidance later, but.
Right now we're looking at.
Starting to those patients in the second half, but so I'd say, mostly stay tuned for more and will be more forthcoming about that program in coming quarters.
Sure and then just last.
The one collaboration you Didnt mention much at all with the BDI collaboration, which I know I moved onto a another potential target last year.
Is there any news expected there and how should we be thinking about.
Your first and oldest.
Yes.
My script goes on long enough so no to belabor it too much with every detail.
Collaboration is going to sign as as you said they shifted to a second target had nothing to do with the molecule that we presented it had to do with their confidence in achieving the clinical end points. They want to achieve that mechanism of action I'm very pleased with the molecule and that's reflected in there.
Moving to ask us to do a second molecule.
For which the Peyton an option payment to have that second molecules not a replacement.
We are on track for the timelines and it is a liver target for Nash.
And.
You know the technology is very reproducible enters reproducing and producing an excellent molecule against that target as well.
It is not going to be the first thing that goes into the clinic from the collaborative partners and.
If it's going to go in and 2021 I don't know if thats going to you. The case, then I'll, let you know.
Right now and how many further timing on it.
Okay that makes sense, thanks very much.
Thank you. Your next question comes from many for higher of SVB Mary You line is open.
Hey, Thanks, taking my question.
First congratulations Jack.
Got you look I haven't seen in a long time, it's been so long.
I have a couple of questions about combination use of your partnered assets one about HBV.
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How does how are the economic structured should Roche move forward with a tripling it.
Approach dominant approach some assets be some elements of the combo being generics as the new can from being non generic denardi I have yarn I approach.
Central or potential in corn inhibitor.
And then elsewhere I know you guys still haven't Pcsknine asset that live outside of your published I Love Your announced partnerships.
How do you think about that either as a standalone asset to be partnered off for your own development or something for a potential combination use with our current or future partner.
Yes, we can address these issues as you can imagine that.
The combo expected combo nature of HPV therapy introduce some complexity into the contracting of our collaboration with Roche I'm going to my colleague, Jim Weisman, our COO and the architect of our deal strategy and execution. He is going to take those questions.
Thanks for the question. This is Jim and you know first of all we were really pleased that we're in a competitive process and.
When we think about.
What we formerly called DCR HBV us, we really wanted to partner that.
With a company, we thought had the bandwidth capability and the pipeline to look at a host accommodations.
We have done a lot of homework in terms of understanding depth epidemiology and ideology of the disease in the various major markets around the World. For example, China. We're really pleased that we had what we can think of.
Really.
Good level of interest from a number of players and we were very impressed with the pipeline that Roche has.
We were also very aware of the multiple combination therapies that could be used I think we've done a really good job I can't speak to the particulars of the deal as you can imagine but in looking through what the various combinations could be how many agents there might be the types of agents weather.
Multiple galxc molecules or galaxy molecule with other modalities, we thought it through and I'm very pleased with where we ended up I know that's only.
Partial answered your question you like those details yes, I think you just have to rest assured we're very aware of it and I think we did a good job on that.
Yes, yes little bit more specific alright the.
Royalty does reflect the percentage of value that the Arnie I component brings to the combo.
But we have guardrails in the contract that ensure that the value attributed to the are in a proportion.
Represents a very substantial fraction of the value of the combination and widely available inexpensive generic cannot be considered to be bringing a lot of the value to a combination. So I think we protect.
Appropriately protected our economic interests in that complex calculation of how to attribute value on a combo.
Thank you Doug.
And then you see us canine of course, the transaction caught everybody's attention between the medicines company and Novartis is important weve long had a strategy around pcls canine and were wearing our options at this time, we've got incoming interest and we are thinking what would be the most appropriate way.
Forward with our yes canine.
Leads.
Great. Thanks, guys on one quick follow up regarding the Fioptics program have you got those.
Dose any Japanese patients.
We required for Epicentral, Jay India, AMR, that's something you'd expect the happened in the hands pure future geographic partner.
We have not to date dose to any patients in Japan, having said that is our expectation that amongst the 36 patients will be patients from Japan and it is our hope that we can support filing in market entry in Japan.
As expeditiously as possible just as we're seeking it in the United States and and so it.
If we put more generally Japan is part of the current playoffs two pivotal program.
Great. Thanks, I'll hop back in to Q.
Your next question comes from Yaron Werber of Cowen Your line is to open.
Great. Thanks for taking my questions. Doug I was just going to ask about a couple of things relating to fly out three the open label. You mentioned that this is going to be the first long term data that we're now looking at reduction in urinary oxalate levels and sort of an understanding as to how low one can go.
And whether one can go lower than the sort of the lower end of our normal info maybe thought on that and then what would you expect to see in terms of the need to reduce level to eliminate the need to high for hydration.
Is there any historical data that you can pointing to come to give us a guide as to what to expect vecchio.
Ralph New address those things, yes, thank you very much.
As of all fireworks three the primary endpoint is.
And you will decline in renal function because the ultimate goal of course in those patients is by reducing.
The calcium oxalate.
Excretion from from the liver and by reducing the amount of calcification that you at least stabilized.
Renal function because those patients as you know.
Ending up in end stage renal disease and the re no.
Transplantation and therefore this is.
A long term three years, the with the endpoint reduction, but the endpoint.
Being.
Estimated GSR.
Having said that of course.
We are continued to measure.
Oxalate in your end because it gives us good read out.
What the amount of.
Suppression of oxalate production in the Liberty will be and when it comes to a hyper hydration.
I think and the protocol states.
At the time when patients on on two consecutive visits region near normal normal concentrations that they get weaned off of their hydration therapy. That's the ultimate goal. That's your ultimate goal, which you want to achieve at those patients can lead to normalize.
Matt.
They don't have to bring this huge amount of warrant.
Potassium citrate.
So what we then believe we'll have also an outcome on the quality of life measures in in this as well so yes, we plan to reduce.
Hi, hydration off those patients when they reach normal near Momo concentration concentrations of less than 30 or 50%.
Would not be enough to get patients to that point that you can bring them off their hyper hydration therapy that address your question.
No if that so thank you.
The second question has to do with maybe Doug Doug It's the understanding of.
The one a program the timing has slipped a little bit the second half and just some understanding is it relating to what was it trial design them in the initial phases in healthy volunteers throughput relating to the subsequent.
Part of the study was it related to manufacturing or just give us of over those kind of where you are.
In the program in terms of timing to for growth progressing at onwards.
You know there was a little bit of healthy volunteer slippage associated with holidays.
And.
Other than that I mean, the program is largely on track.
Okay great.
Please.
Go ahead.
Yes, it's.
It hasn't really from from our perspective really pick the lock.
Yeah.
There are some.
So we started last year of with the.
Coming December and vacation periods.
And yes. This is a healthy volunteer apart.
Yes, it takes longer than for instance, in our new goes the Ram.
Well, we could impero low.
Treats patients and healthy volunteers and go in patients.
Because of the concern of regulatory agencies around.
It's a bull.
Lung injuries.
Therefore, this program in itself goes a little slower than the.
No dollars around program and therefore, the timelines are more extend that than.
Our other program, but nothing nothing.
Really unusual here.
Well, thanks for the clarification and maybe just a final question. So as you think ahead in terms of how to differentiate this program can you give us an inkling, maybe clinically how would you go about the.
I think about all I can say.
On that is that we do tend to focus on the most severe patients that's the highest unmet medical need in the most I believe.
Likely to actually get treated.
When when identified and there's a product available.
Other than that we do expect to say more about this program later this year.
Thank you.
Your next question comes from Ed Arce sales HC Wainwright your line is that Wilson.
Hi, everyone. Thanks for taking my questions.
My congrats on a.
A very.
Filled 2019 with.
Lots of progress.
So couple of questions for me first on no disruption.
Regarding your buyouts three open label.
Trial.
Given the identical design and potential for read through.
On your pivotal.
Im just wondering if.
You could perhaps.
I realize this was partly answered previously, but if you could.
Perhaps give us any more detail around what kinds of.
[noise] aspects are going to be.
What.
We can expect from the read out perhaps in terms of not just potency but.
Sustained.
See overtime, and any sort of steady state or anything along those lines.
Yes.
Thanks, Ed.
Ralph.
The the only data we have made available so far a single dose data.
So this will be the first time as an docs that in in one month from all at the Oxford Europe data well, we will get limit that.
First lines.
The multi dose they look like.
In in patients and with our monthly Rachaman, our fixed dose regimen off on that 70 are off 136 milligrams. So what you can expect is really.
To see.
The amount of urinary oxalate and of course.
Since we're expecting to have maximum effect around three months. That's was we learn from all of our phase one study.
We would expect to see a sustained reduction in your in Mary oxalate.
Over time, which then would lead to if this as discussed on previous question.
Two neo normal fallen some transition would lead to a leading off off the hydration therapy.
As I have to address your question.
Yes that does thanks, Ralph I appreciate that.
Good.
And then.
Switching gears to your HBV program.
You know obviously as you mentioned you've got both.
Patients that had entered the study.
Nuke experienced as well as naive patients.
All of whom have now continued on the rollover after having achieved one lager production.
Or more.
Just wondering about.
How.
How you see the differences in those patient groups and how.
You might think about reporting that ultimately later this year at R&D day in terms of stratification of patients.
Thanks.
Well as you know, we'll we'll talk about group B and group see is distinct groups at R&D day.
The group see is very comparable to what other companies have conducted in their phase one and for those inclined to.
Parse the comparisons that provides.
Reasonably similar fruit in order to be comparing with others. A group is a little bit different than we're not aware of a similar study from.
One of our peer companies, but it has a couple of things that we think make it very relevant to us one as a single dose with no other pharmaceutical intervention.
We get a good pharmacodynamic curve for the effect of our drug and.
That enables modeling and simulation and a more straightforward fashion and trying to do that with multi dose data and that will help us inform how to do dose regiments going forward and second.
Perhaps a little bit more of a subtle point or forward thinking point.
The vast majority of chronic HBV patients are not diagnosed not currently being treated and there will need to be a treatment decision made.
When they are freshly diagnosed and so that patient group actually represents.
Group be patient group actually represents a large majority of the addressable population and so we wanted to get an initial look at what happens when you'd start dosing those patients with within our NII therapy without the complication of what other therapies.
You know can potentially impact the virus. So there are multiple goals that we were trying to address with group B and we look forward to.
You know separately talking about the data from those two groups and drying whatever conclusions that data support.
Great.
That's very helpful. Doug Thank you for that and then.
I'll just.
Jack Congratulations on a long finance career and I wish you all the best in your retirement.
Thank you Ed I appreciate it.
Yes.
Your next question comes from Robyn Karnauskas of Suntrust. Your line is that one thing.
Hi, This is no call on for Robin.
Just a few question here so.
I think you're hearing more about the exit headache targets later in the year.
Help us understand the hurdles are delivering or any other tissues and with going after for example, other targets in CNS or muscle on immune cells.
What are the nuances in the biology that people aren't fully appreciating that the galnac platform that you guys have.
Yes, Hi, Nicole I'm happy to address that unfortunate my colleague Bob is not here because he could certainly do brown rcs so it too.
More justice to this then then I believe I cant, but I can give some insight in the first thing I would say is you need to recognize that a pad sites represent a special and I believe best case for R&D I delivery.
For two reasons. The first reason is the abundance of the ASV GPR receptor that galnac binds to on the surface of that pad sites in the frequency with which it internalize. It provides a conveyor belt into the cell.
That is.
There's no other system that has that level of flux.
But we're aware of in the body anywhere else and the second thing is there does appear to be a unique biology of the pad aside the phased in serum and it's part of their role in physiology to take stuff up and deal with it and I think that in in a by a mechanism that I can articulate and I don't think is fully understood does make them more.
Amenable to the uptake of I think great many things and nucleic acids amongst them.
And so.
I think with that.
Biology, you had zee.
It stands to reason that powder sites will be the first thing that was effectively.
Hunkered, if you will buy.
Technology for R&D I.
In optimizing for kind of sites.
Where the real gains came from wasn't stabilizing the molecule so that once they were internalize they survive.
What is enzymatically and chemically harsh internalization environment and actually make it to the silencing complex in the cytoplasm.
And we have I think than a very good job protecting our molecules from destruction along that path.
Now that protection should pay the same benefits and all of their cell types that it pays and the pad sites and I think generally gets us closer to a workable solution and all other Celtics.
Going forward.
We will be doing two types of things to the molecules to enable delivery to other tissues. One is.
Identifying and utilizing other receptors.
In the same way, we utilize the as GPR for Galnac mediated delivery and the second is using.
Particularly the extended region of our molecule that's unique to the dice earn a platform using that as a platform for modifying the overall chemistry of the molecule things such as the slip a felicity so overall charged to mass balance.
In order to make it easier chemical task to cross into cells.
In the nervous system.
Specifically, where a lot of our extra hepatic work is and will talk a lot about at R&D day. It is particularly that second element that is driving our success in nervous system delivery to date.
But another tissues, you're facing a situation. We don't have the same flux of receptor mediated internalization and you don't have the phase directly in serum and as I said this general proclivity to take stuff up past sites have I think it's likely have panasonics will represent the peak the performance.
For our now and it's likely that higher doses will need to be used another tissues to achieve comparable results, having said that I think it's quite remarkable that a one ml dose enables monthly administration and that's heavy dosing.
For our net those are in program and certainly could have opted for a quarterly administration with subcutaneous that's remarkable from a pharmaceutical properties perspective far far.
In excess of your average antibody. So I think there's a lot of room to those higher up and effectively achieved delivery to other issues.
I hope that more or less addresses the question Oh.
Yes, definitely thank you so much and thanks for taking my question.
Your next question comes from Matt Kumar from your line is open.
Hey, guys. Thanks for taking my questions and I'd also say congratulations Jack as he moves on our first question relates to buyouts that to the pivotal trial, so thinking about each one versus ph too is there look like we said that the trial huguley comparing across both types of yields were drug has to be placebo.
Overall or is there a notion that you have to win both in each one and kitchens.
Yes. Thank you for the question to scrap again.
It's the and that is this will be ph wrong and ph true against placebo. So there is nothing to assume that.
And we have shown this in the single dose study that as a difference in the response.
Two ph won all ph to remember.
And Bose, even in ph three the old limits that.
Of the production of oxalate in the liver goes through the Algoma Ajay enzyme and we are blocking the so.
No reason to believe that areas of difference and therefore.
Our primary analysis will be.
The combination of drawn mph, two patients against placebo.
Okay. Then next question is leading the commercial landscape the competitive landscape in ph type one specifically so kind of looking at what's out there it's reasonable to expect there will be another competitor out on the market ahead of you guys. So how do you think about differentiation in particularly because of the broader utility that goes.
Do you imagine that price into potential lever for you as the second engine, specifically ph ones.
Yes. Thanks, a question my do.
I would say, we think that differentiation is based on the broader applicability of the molecule.
Broad amount of safety data associated with LDH, Jay from the human genetic experience and importantly, our dosing regimen, which we think maximizes convenience, while providing a safety and redundancy for a self administer chronic indication.
We also have incorporate our protocol the ability to wean off of.
The manic disease management, hyper hydration and other aspects of disease management and actually have that's part of the protocol. So.
Those are the levers that we look to for differentiation, we don't consider.
Pricing at this point.
Productive way to drive differentiation.
Okay, Great one last one about the alpha one Antitrypsin program. So considering a competitor program is going to have some early data in a 180 liver disease patients later this year.
What would you envision you can learn from that trial that you could incorporate into your own.
Studies and they want to 80 patients.
Well, we look forward to seeing data emerge in the field and.
I think the data you're referring to.
On the most interesting element will be paired biopsies of a relatively short period of time, which may.
Give some indication of slope of change associated with histology.
And that could impact thinking.
Although I think our thinking is fairly advanced on.
What our pivotal trial would look like on our front.
And finally to that end do you think that changes and a 180 ZZ globule formation are more largely a function of.
Equilibrium from circulating eight 180 or is it a function of how to site turnover or a mix of us.
Well I think it's a little bit of a stretch.
To say.
Out of sight makes a whole bunch of misfolded protein that thing gets accreted.
And then taken back up by the same cells to pharma globule.
I would tend to thank you would cut out the middle man there.
So I find it.
Little bit implausible that the driver of Globule formation has re uptake by out of sites of of circulating a when a fee.
Having said that I understand there's evidence for exchange and there may be a contribution to club deals but.
You know where in the absence of very specific molecular data, which be extremely hard to collect but intuitively.
I think you would expect the globule study based on Misfolded protein that aggregates after synthesis before secretion.
Well I guess, we're thinking more along the lines up to the blockade of synthesis lead to a shift in equilibrium ouch not as much eight ships and from the outside but if you blockade said that this will that caused a reduction kind of threw at equilibrium ship into circulation, but whatever I guess, we'll find out so thanks, so much no questions.
Okay.
Thank you. Your next question, it's come from last month.
Right.
Okay.
Thanks for taking my question, then congrats and have a successful 2019 and wishing to best to Jack for its next chapter.
Two questions most people out of things would be CRM pitch PV can you talk to how many patients out in the different cohorts. It seems like 56 patients across 18 cohorts, if I'm not mistaken and maybe clarify have you gone up to the two I'll make booking those.
And I mean that the R&D update of would you have the multiple dose data.
The second but was.
The crew know why this exposure could you maybe dr. with their sites in Asia.
And if you're talking beyond just the supply chain issue.
Yes, so for the first part of question HPV, we have fully completed group a healthy volunteers that includes all dose levels, including the 12 M. PK and.
Drug was.
Well tolerated at all those levels for HPV group B is eight patients and that breaks down to three eight placebo patients since I've drug patients group C is 18 patients.
Six each in three cohorts and within each cohort there are four patients they get treated with active compound and two patients on placebo. So there the.
Does that cover the relevant numbers.
Looking for.
Yes, Andy.
India update would have all the data the multiple those that included.
Thats correct for the what we anticipate will be in August R&D day that will allow us to have the full planned studied a valuation for every patient and all the groups.
Might still be follow up so as you know they go into this condition of follow up.
On.
At months.
Fall yes.
Let me.
More than one block reduction well that might still be ongoing, but we'll show all the data up two months fall off at the body.
And of course will show the the follow up period in some off of patients, where we act or whatever we have ample yet.
Relative to current of Iressa, Yes, we do have sites in Asia, and the HBV program Hong Kong for example is.
Major contributor.
We completed dosing yet Ralph in group see no we haven't completed.
We have not seen an impact.
So as I see.
Closely monitoring those patients continues to be go into screening.
Those and those who are those.
And.
Amongst the visit or that follow up with it that come to those visits so we haven't seen any impact so far.
On patients not enrolled into the study or not coming to their schedule with results we are.
Right at the tail end of enrolling this where in the main phase of enrollment of the.
The highest dose cohort.
It is conceivable in scenarios that maybe difficult again follow up visits but right now.
We don't have an impact and the.
You know until.
Already sell people they can't go back to the.
Hospitals and for a follow up and we anticipate.
Follow up visits will occur.
That would create do and hopefully that last thing is not the scenario.
And then a follow up on the Cardiometabolic disease collaboration that you have Lilly and Novo specifically is alcoholic liver disease part of any of those and then more.
Thirdly.
Can you look then getting deals done anything specific about these dogs and could you confirm if like the most advanced ones.
Quote unquote first in class.
Well really a limited as to what we can share about our partners.
Targets and indications and need to take our lead from them on what they want to disclose so beyond general.
That.
You know there cardio metabolic targets in there and they're stage of development I really I really can't share beyond that Unfortunately, I would say that alcoholic liver diseases within the scope of both the Lilly collaboration and the.
And the Novo collaboration.
Great. Thanks for taking my question.
Thank you. Your last question comes from key Nicky of Charter your line is open.
Yes. Thank you all can you just just a point of clarification on.
The extension cord extended follow up for HPV, how far out.
These and sees go to if they have the one log reduction in Kuala pro for that.
Well currently the protocol says six months.
We have filed so on the process of highlighting.
A protocol amendment, because we have patients reaching this coins.
And we want to continue to follow them up so we have a protocol amendment with regulatory agency, which.
Extends the six months conditional follow up through another year.
In case for instance, somebody would.
See Roe.
Clearance and we want to follow up.
How long the lock reduction goes because.
We only know its mall that unlocked reduction and we don't even know whether it continues to be a through like reduction all point.
1.1 block reduction all even.
A clearance we don't know because we are lined up and therefore, we want to continue.
A follow up until we do this planned interim analysis for the R&D day.
Where we then and actually CV actual buck reductions.
Okay. Okay. That's all I had thanks.
There are currently no more questions I will now turn the call back to that for closing remarks.
Well, thank everyone for joining us today in reviewing our fourth quarter financial results in our milestones for 2020, it's going to be an exciting year.
And we'll keep you all updated and our future calls thank you very much.
Ladies and gentlemen, this concludes today's conference call disconnect.
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