U.S. Markets open in 6 hrs

Dicerna Pharmaceuticals Inc (DRNA) Q4 2018 Earnings Conference Call Transcript

Motley Fool Transcribers, The Motley Fool
Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Dicerna Pharmaceuticals Inc  (NASDAQ: DRNA)
Q4 2018 Earnings Conference Call
March 11, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Dicerna Pharmaceuticals Fourth Quarter and Year Ended 2018 Conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to Rebecca Peterson, Head of Corporate Communications. Ma'am, you may begin.

Rebecca Peterson -- Head Of Corporate Communications

Thank you. Good afternoon and welcome to Dicerna's conference call to discuss the Company's fourth quarter and year ended December 31, 2018 financial and operating results. 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 www.dicerna.com. You may also listen to this conference call via webcast on our website which will be archived for 30 days beginning approximately two hours after the call has completed. I'd like to remind the listeners today that management undertakes no obligation to revise forward-looking statements on today's call, including for example expected timelines and plans for the development of DCR-PHXC, DCR-HBVS, Dicerna's undisclosed rare disease program and other pipeline programs. Expectations contemplated today related to collaborations with Lilly, Alexion and Boehringer Ingelheim, expectations for discussions and possible opportunities with potential partners and collaborators and guidance regarding cash usage.

Actual results may differ materially from those contemplated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of Dicerna's most current forms filed with the SEC. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so if our views change.

Now, I'd like to turn over the call to Doug Fambrough, Dicerna's President and Chief Executive Officer.

Douglas M. Fambrough -- President and Chief Executive Officer

Thank you, Rebecca. Good afternoon and thanks to all of you joining us on this call. With me today are Jack Green, our Chief Financial Officer and Ralf Rosskamp, our Chief Medical Officer.

2018 was truly a milestone year for Dicerna, during which time I'm pleased to say we met each of our key strategic objectives and demonstrated our ability to continue to move our pipeline forward on plan, including promising Phase 1 data and our primary hyperoxaluria program that enables our plan to move directly to a pivotal trial.

From an operational perspective, as most of you know, we raised $115 million and a successful follow-on offering in September and solidified two new substantial collaborations based on our GalXC platform with Eli Lilly and Alexion Pharmaceuticals that yielded Dicerna $237 million in upfront cash payments and equity investments, excluding future milestones and royalties.

In addition, Boehringer Ingelheim exercised its option for a second hepatic target under our existing collaboration, triggering a $5 million payment during the current quarter. We began 2019 with a cash balance of nearly $400 million. The strength in our balance sheet provides sufficient capital to support our clinical goals for our PH hepatitis B virus an additional pipeline assets beyond 2020. As we continue to build a fully integrated company with both proprietary and partnered programs. I'd now like to take a few minutes to provide a recap of key 2018 events and recent notable achievements. Our progress and strong cash balance position us well to achieve our goals for 2018. Starting with DCR-HBVS. We are pleased to have begun dosing in January of 2019 the first participants in our multi-dose double-blind, randomized, placebo-controlled Phase 1 clinical trials of DCR HBVS for the treatment of non-cirrhotic chronic HBV infection.

As a reminder, this is a three-part study, enrolling up to 30 healthy volunteers and 26 people with chronic HBV infection. The first participants are healthy volunteers, receiving a single dose of DCR-HBVS with dose level cohorts of 0.1 milligrams per kilogram, 1.5 milligrams per kilogram, 3.0 milligrams per kilogram, 6.0 milligrams per kilogram and 12.0 milligrams per kilogram with a four-week follow-up period. We expect to dose the first chronic HBV patients during the second quarter of 2019. The study is designed to evaluate patients in two different groups. First, a group of NUC-experienced patients who received four doses of DCR-HBVS over three months with dose level cohorts of 1.5 milligrams per kilogram, 3.0 milligrams per kilogram and 6.0 milligrams per kilogram.

Second, a group of NUC-naive patients who receive a single dose at 3.0 milligrams per kilogram. The primary objective is to evaluate safety and tolerability of DCR-HBVS in healthy volunteers and people with chronic HBV infection. Secondary objectives are to characterize the pharmacokinetic profile and to evaluate preliminary pharmacodynamics and antiviral efficacy of the compound on serum levels of hepatitis B surface antigen and HBV DNA.

With this program, we believe there is an opportunity to rapidly demonstrate proof of concept, as the viral biomarkers of HBV are easy to assess in the Phase 1 study. Given the strong proof of concept data already reported for the GalXC Platform during 2018, coupled with the fact that HBV is a viral infection of the liver, we have high confidence in the potential of DCR-HBVS to work effectively to reduce circulating viral S antigen and HBV DNA levels in chronic HBV patients.

You may recall that our GalXC-based approach for HBV is differentiated, following our hypothesis that RNAi potency and duration of action may be dependent on the target site. We've designed DCR-HBVS to target three of the four HBV open reading frames, excluding the X gene. This approach is borne out in preclinical models and results in deeper and longer durations silencing of HBV S antigen, then the simultaneous silencing of all four open reading frames. Specifically, our preclinical studies show that DCR-HBVS led to a greater than 99.9% reduction in circulating viral S antigen in mouse models of HBV infection, with 99% reduction persisting for more than three months after a single 3 milligram per kilogram injection.

We expect that DCR-HBVS will be used as part of a combination therapy. Given that as well as the sheer size of the market, our plan is to partner this asset following proof-of-concept data from the Phase 1 trial, which we expect to report from the 1.5 milligram per kilogram multiple-dose patient cohort during the fourth quarter of this year. Moving onto PH and our lead program DCR-PHXC. In mid Q4 of 2018, we presented clinical proof-of-concept data for DCR-PHXC from the ongoing PHYOX Phase 1 single-dose clinical trial for PH at the ASN annual meeting. We have completed dosing for both healthy volunteers and patients with PH type 1 and PH type 2. Based on a data cut from October 1, 2018, the initial findings showed a clinically significant and meaningful reduction in 24-hour urinary oxalate levels in all patients. The majority of patients achieved normalization or near-normalization of urinary oxalate levels. Specifically, investigators reported that a single 3.0 milligram per kilogram dose of DCR-PHXC brought urinary oxalate levels into the normal range, defined as 24-hour excretion less than 0.46 mmol at one or more post-dose time points, in three out of four participants, including a mean maximum reduction in 24-hour urinary oxalate of 65%. Furthermore, investigators reported that a single 1.5 milligram per kilogram dose led to near-normalization defined as 24-hour urinary oxalate excretion less than 0.6 mmol and greater or equal than 0.46 mmol in three out of four PH1 participants and led to a mean maximum reduction in urinary oxalate of 50% in the five patients dosed at that level including one PH2 patient.

The data in this study also showed that DCR-PHXC was well tolerated in healthy volunteers and participants with PH. These findings indicate that our groundbreaking approach using the GalXC RNAi therapy has the potential to treat all genetic variants of this debilitating and potentially fatal disease. All that said, we are on track to initiate PHYOX2, a pivotal multi-dose, double-blind, placebo-controlled trial of DCR-PHXC in the first quarter of 2019. Our next meeting with the FDA is expected to take place this month. The agency has already reviewed the study design and encouraged us to proceed with a pivotal trial on which to base our application for approval.

Moving onto our third program, our wholly owned undisclosed rare disease program. We still anticipate submitting regulatory filings in the second quarter of 2019, at which point we will be able to fully discuss the program and strategy. What I can tell you at this point is that similar to our strategy around PH, the target gene was chosen based on a strong therapeutic hypothesis, a readily identifiable patient population, the availability of a potentially predictive biomarker, high unmet medical need and what we believe is a rapid projected path to approval.

The disease is a genetic disorder, where mutations in the disease gene lead to the production of an abnormal protein, which leads to progressive liver damage and fibrosis, in some cases, leading to cirrhosis and liver failure. We believe that silencing of the disease gene will prevent production of the abnormal protein and thereby slow or stop progression of the liver fibrosis. At present, this program is completing IND-enabling studies.

Turning to our partnerships, in the fourth quarter, Boehringer Ingelheim exercised its option for a second hepatic disease target under our existing collaboration to discover and develop novel, subcutaneously delivered GalXC RNAi therapeutics for the treatment of chronic liver diseases with an initial focus on NASH. Their decision to expand the relationship with the second target, which triggered a $5 million payment to Dicerna in early 2019 is a testament to their belief in the value of our GalXC RNAi technology platform and the positive relationship we continue to enjoy in our work together.

Our newest collaborations with Eli Lilly & Alexion Pharmaceuticals closed in December and October of 2018, respectively, and unlock additional potential opportunities for the GalXC platform technology in the liver. In addition, our agreement with Lilly leverages the GalXC Platform to key tissues beyond the liver, including both neurological and non-liver cardiometabolic tissues. The collaboration, which contemplates more than 10 targets, is a highly significant transaction for Dicerna. It yielded $100 million in upfront cash in January 2019 and a related $100 million equity investment at a premium in 2018.

Under the terms of the collaboration, we have the potential to receive up to approximately $350 million per target in development and commercialization milestones, as well as mid-single to low double-digit royalties on product sales. Likewise, our collaboration with Alexion for which we received $37 million upfront and a combination of cash and an equity investment at a premium is also a significant transaction for Dicerna. Under the agreement, we are working with Alexion's team on the joint discovery and development of GalXC RNAi molecules directed to two complement pathway targets for the treatment of complement-mediated diseases.

In addition, Alexion has the right to exercise options for additional payments for two additional GalXC RNAi molecules directed to complement pathway targets. Dicerna is leading the joint discovery and research efforts through preclinical work and Alexion will lead development efforts beginning with Phase 1 studies. This collaboration provides the potential to receive additional payments of greater than $600 million, including development and commercialization milestones, as well as mid-single to low double-digit royalties on future product sales.

Looking ahead, there are a number of important inflection points on the horizon. As mentioned previously, we expect to initiate the PHYOX2 pivotal trial in the first quarter of 2019. In parallel, we are on track to begin PHYOX3, the long-term multi-dose, open-label rollover extension initially for our Phase 1 study in the second quarter of 2019. Participants in PHYOX3 will be dosed at the same frequency and dose level, as those in the pivotal trial. As such, we expect that PHYOX3 multi-dose data should serve as the proxy for what the PHYOX2 trial data will look like. Other supplemental trials aimed at supporting an expanded product label, include an open label study in 10 patients with PH type 3, a single-dose trial in adults with end-stage renal disease and determining pharmacokinetics, and an open label pediatric study in children aged two to five years. Regarding DCR-HBVS, we continue to dose healthy volunteers and expect to dose the first patient of this Phase 1 clinical trial in the second quarter of 2019.

As in the -- already noted, we anticipate human proof-of-concept data to be available during the fourth quarter of 2019. Finally, as I mentioned earlier, we will submit a clinical trial application for our undisclosed rare disease program in the second quarter of 2019. Dicerna is an important player in the field of RNAi therapeutics. As we have grown our pipeline and staff to meet our internal needs and work with our collaborative partners, we have also made some key additions to our Board and leadership team. In late January, the Board named Kevin Buchi, Former Chief Executive Officer of Cephalon and TetraLogic Pharmaceuticals to Chairman. Industry expert, Anna Protopapas, President and Chief Executive Officer of Mersana Therapeutics; and Marc Kozin, formerly Vice-Chair and Head of Healthcare at L.E.K. Consulting have joined as new directors. Our deepest thanks and appreciation to former Chairman, David Madden and Former Director Brian Halak for their commitment and efforts on Dicerna's behalf.

Finally, we are pleased to have added several key positions on the management team with the recent additions of Regina DeTore Paglia as Senior Vice President of Human Resources; Rebecca Peterson, who opened today's call as Head of Corporate Communications; and Hardean Achneck as Vice President, Head of Medical development.

And with that, let me turn the call over to Jack.

Jack Green -- Chief Financial Officer

Thank you, Doug. I'd like to briefly summarize key 2018 financial results and provide guidance for 2019. During the year ended December 31, 2018, revenue from collaborative arrangements increased by $5.1 million as compared to 2017, primarily due to recognition of a full year of revenue under the Boehringer Ingelheim agreement. In 2018, we received $40.5 million from our collaborative agreement with Alexion, which represented a $22 million upfront payment, a $15 million equity investment at a premium and the first milestone payment of $3.5 million. Of the $40.5 million, we received $31.4 was allocated to the revenue portion of the agreement and was recorded as deferred revenue, while $9.1 million was recorded in equity. The majority of the balance of deferred revenue associated with the Alexion collaboration will be recognized over the anticipated three-year term of the initial research programs. With respect to our collaboration with Lilly, in 2018, we received $100 million equity investment at a premium. The $48.7 million premium on equity was recorded as deferred revenue to be recognized over the term of the initial research programs.

As with the Alexion collaboration, most of this will be recognized as revenue over the next three years. R&D expenses were $45.7 million for the year ended December 31, 2018, as compared to $35.9 million for the same period in 2017. The $9.8 million increase in expense in 2018 was primarily due to a $6.3 million increase in clinical study costs due to increased activities associated with the DCR-PHXC and DCR-HBVS programs, as well as an increase of $3 million in employee-related expenses associated with increased headcount necessary to support our growth.

We expect overall research and development expenses to increase in 2019 as compared to 2018 and for the foreseeable future as we complete clinical manufacturing activities necessary for supply and commercialization, advance preclinical toxicology studies, continue clinical activities associated with our lead product candidates and increase development efforts under the Lilly and Alexion agreements.

General and administrative expenses were $21.7 million and $16.8 million for the years ended December 31, 2018 and 2017 respectively. The increase is primarily due to increases in consulting costs of $1.9 million, Board of Directors compensation of $1 million and an $800,000 increase in salary and benefits expense. We expect G&A expenses to increase in 2019 as compared to 2018, largely due to our planned investment in staffing, preparation of our new company headquarters and market readiness activities. Litigation expenses consists solely of expenses associated with the Alnylam litigation. Litigation expenses increased primarily due to the $24.7 million of settlement expenses recorded in 2018. Our final payment under the settlement with Alnylam was made in January 2019. As a result of the transactions and activities I mentioned, net loss attributable to common stockholders for 2018 was $88.9 million or $1.60 per share compared with $80.3 million or $3.66 per share for 2017.

It's important to note that the net loss attributable to common stockholders in 2017 included approximately $20.1 million in dividends and deemed dividends on the redeemed -- redeemable convertible preferred stock that was converted to common stock in December 2017. As of December 31, 2018, we had $302.6 million in cash, cash equivalents and held-to-maturity investments. And additionally, we received $94.5 million of net proceeds in early 2019 from our collaboration partners. This compares to $113.7 million in cash, cash equivalents and held-to-maturity investments as of December 31, 2017. This increase in financial resources enables us to advance clinical trials in PH HBV infection and other therapeutic categories.

We ended 2018 with positive cash from operations of $18.3 million (ph), which included $80 million of cash received in 2018 from the upfront payments and premiums on equity from the Lilly and Alexion collaborations. Excluding the $94.5 million of net proceeds received in early Q1 2019 from these collaborations and proceeds from new potential collaborations, we expect that our annual operating cash use will be between $120 million and $135 million for 2019 and will continue to increase, as we advance our clinical studies and prepare for commercialization of DCR-PHXC . Before we move onto Q&A, I'll turn the call back to Doug for some closing remarks.

Douglas M. Fambrough -- President and Chief Executive Officer

Thank you, Jack. It's -- I think it's fair to say that 2018 was a true breakout year for Dicerna. And I would like to thank our entire team, our partners and our shareholders for contributing to the success we've achieved thus far. We remain, as always, focused on delivering transformative RNAi-based therapies to keep patient populations by leveraging our proprietary GalXC RNAi platform technology. We look forward to keeping you up-to-date on the execution of our strategic plan.

Operator, we can now open the call to Q&A.

Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from Robyn Karnauskas of Citi. Your line is now open.

Robyn Karnauskas -- Citi -- Analyst

Hi guys, thanks for taking my question and congrats on the progress. Just a couple ones. So, first I am thinking about the HBV trial design and you talk about how gene X maybe makes the drug differentiated. Do you think there's any way we could see that though in the initial Phase 1, 2 trial? Is there any way to actually tell whether or not either by viral load or durability that this would be differentiated? And then my second question was as you're going after a single 3.0 mg/kg dose for the normal patients, what do you know about PK/PD that gives you comfortable that that's the right dose pick (ph) versus the 1.5 milligrams per kilogram in the six? And I have a follow-up.

Douglas M. Fambrough -- President and Chief Executive Officer

Hi, Robin. So, I don't think that we can get any direct read of how not targeting the X gene effects with the data would have been like. The real evidence that the preclinical models are correctly predicting the human data would require a biopsy and looking at core protein localization. So, I think you -- we're just going to be looking at potency in terms of S antigen reduction and duration of action and the only comparator out there is going to be a different molecule done at a different study from a different company and so comparisons can be done at one's own risk there.

With regards to the choosing a 3 milligram per kilogram dose for the NUC-naive chronic HBV patients, that is really a best guess and it's based on what we've observed and I think other companies have observed as well, as being a very reproducible robust translation from animal efficacy levels to human efficacy levels. You'll notice that the dosing levels we are proposing in the DCR-HBVS program are at the same levels that we have used in the DCR-PHXC program, and given the similarities in the preclinical performance of the molecules, we saw no reason to depart from our established dosing paradigm. So, that's really a best guess based on preclinical activity, and I suppose we'll see how it goes in the clinic.

Robyn Karnauskas -- Citi -- Analyst

That's very helpful.

Rebecca Peterson -- Head Of Corporate Communications

And then you had a follow-up?

Robyn Karnauskas -- Citi -- Analyst

Yeah, the follow-up -- then, the follow-up is pre-registration data disclosure and then the first data readout that we'll have from proof of concept for the drug. And as you said, we'll get the first cohort of 1.5 milligrams per kilogram in the patients that are -- that have been treated. So, help me understand the 1.5 milligrams per kilogram dose in that patient population and potentially will we definitely have the data in fourth quarter 2019 or could the data come in-house and then we could see the data the following year? Help me just understand data disclosure around that first proof of concept, the dose?

Douglas M. Fambrough -- President and Chief Executive Officer

We are expecting to be making a public disclosure in the fourth quarter. Note this is a multi dose and it's a blinded trial. We will be giving four doses over a 90-day period, which is a start dosing in Q2. And if you just run the clock and allow us to see some of the follow-up from -- after the last dose, we're into Q4 before we're in a position to say anything meaningful.

Robyn Karnauskas -- Citi -- Analyst

Okay. Got one last question, I was curious about the PHYOX3 trial -- PHYOX4 trial that you want to begin enrolling. Is there anything you're doing to help -- I know that it's not diagnosed a lot, because it's stage 3. Do you think that the trial would enroll very easily or is anything you're doing to help enrollment of the PH3 trial? Thanks. Last question, I'm sorry.

Rebecca Peterson -- Head Of Corporate Communications

Actually we will direct that to Ralph who will take it.

Ralf Rosskamp -- M.D. Chief Medical Officer

Yeah, the PHYOX -- when you said PHYOX3, this is what we call the long-term extension study.

Robyn Karnauskas -- Citi -- Analyst

I mean PHYOX4 for PH3, it's the--

Ralf Rosskamp -- M.D. Chief Medical Officer

PH3?

Robyn Karnauskas -- Citi -- Analyst

Yes.

Ralf Rosskamp -- M.D. Chief Medical Officer

This will most likely we have not -- we have our age range is 6 upwards and most likely the patients recruited in the study will be children, because they are the most manifesting at early age range.

Rebecca Peterson -- Head Of Corporate Communications

Okay. Operator, we'll take the next question. Thanks, Robinson.

Operator

Thank you. Our next question comes from Mani Foroohar of SVB Leerink. Your lines now open.

Mani Foroohar -- SVB Leerink -- Analyst

Hi, guys, congrats on all the progress this past year. I do not have a 37 (ph) per question. So, I guess more broadly, when you think about the recent collaborations that you've signed, they've been pretty attractive in terms of building out the balance sheet. It's got a pretty long cash runway at this point. Strategically looking at potential additional collaborations exclusive or not. How do you think about the balance in terms of focus on continuing to bring upfront cash and add to the runway as opposed to shifting economics more toward the tail of attractive royalty streams?

Jack Green -- Chief Financial Officer

Thanks for asking the question, Mani. Our organization is maturing and evolving rapidly and really nicely, and when we were first exploring the Alexion and Lilly collaborations and early talks with those companies, we had a very modest clinical capability and a pretty small organization. We are in a rapid growth phase. At that time, our balance sheet was not as strong. So we didn't have the -- we still wanted to do all three clinical programs, we've been talking about undisclosed rare disease HBV and PH and work on other things. And there was a real concern that collaborations might impinge our ability to execute on our own programs. And so we sought to try to have our efforts really focused on the discovery phase and have our partners do development.

Entering in the conversations with the company now and I'm speaking in a hypothetical way, we bring to the table a much more mature organization with a much stronger balance sheet and a much larger team for execution. And so some of the strategic rationale for avoiding downstream commitment is no longer applicable. It's no longer present in the Company. So, it makes sense for us to more aggressively seek downstream participation and our future collaborations.

Mani Foroohar -- SVB Leerink -- Analyst

Great. And I guess I was a ton of -- actually I do have a follow-up question. The Robyn having good laugh on my expense now. So looking at the PH foregone in particular, when you think about normalization as the potential endpoint, you've had approval, does the commercial opportunity and how you think about the market shaping up, does that vary, if you can show normalization in the majority of patients, or do you think clinically significant knockdown whether you reached normalization or not kind of commercially equivalent.

Rebecca Peterson -- Head Of Corporate Communications

So, I'm going to pass that to Ralf, our Chief Medical Officer.

Ralf Rosskamp -- M.D. Chief Medical Officer

Well, I can speak from a medical point of view, the ultimate goal is to have patients reaching normalization or near-normalization, so that the concomitant medication, which they're taking right now and the super-hydration regimen, which is really bothersome to patients can be stopped. You can only do that. We had discussion with the physician panels and asked them the question. So what is if you see a 50% reduction or 60% reduction, would you stop the super-hydration therapy or the potassium citrate and they all said no. We would wait until the patient has near-normal or normal oxalate, because they are still at risk. And we would not stop, and the ultimate goal is for patients living normal life. And this means bringing them to normal or near-normal urinary oxalate levels.

Douglas M. Fambrough -- President and Chief Executive Officer

So, Mani, I think we don't have anything quantitative, but there is an intuitive sense that if we allow patients by -- via normalizing or near-normalizing the oxalate. We allow them to cease doing the disease management. It will have stronger commercial uptake. Patients are more likely to stay on drug chronically really first -- for rest of their lives ideally to control the oxalate levels. Then, if they have to continue with their disease management regimen that -- but that's a non-quantifiable intuitive sense right now. In any event, more is better and that did influence how we chose the dosing regimen for DCR-PHXC in order to hit our target gene LDHA extremely hard and regularly, so that we robustly can achieve the highest level of knock-down that the GalXC system is capable of and then certainly in the animal model. So, it's capable of essentially complete silencing. So, very helpful to have a very strong response here.

Mani Foroohar -- SVB Leerink -- Analyst

Great. And just one final tidbit, have you ever -- (inaudible), I know it's tolerable, have you ever seen a cardiac toxicity signal in any human being born out human primate that have gotten DCR-PHXC?

Rebecca Peterson -- Head Of Corporate Communications

So, I'm going to pass that to Ralf.

Ralf Rosskamp -- M.D. Chief Medical Officer

No, we have not seen any cardiac toxicity neither in the animal nor in our human data.

Mani Foroohar -- SVB Leerink -- Analyst

Great. That's helpful. I'm going to pass on the queue.

Rebecca Peterson -- Head Of Corporate Communications

Thank you. All right. Who is next?

Operator

Thank you. And our next question comes from Umer Raffat of Evercore ISI. Your line is now open.

Jonathan Miller -- Evercore ISI -- Analyst

Hi, guys, this is actually Jon Miller. So, congrats. I'll echo everybody else's and congrats on all the news and all the progress over the past few months. I wanted to start with the collaborations. What are the next steps there and when we hear more about the new drugs from those partnerships? And especially for the Alexion partnership, are all the targets there liver focused?

Douglas M. Fambrough -- President and Chief Executive Officer

Hey, John. Thanks for the kind words. I'll start with the Alexion question, yes, all of the Alexion targets are liver focused. The Alexion collaboration is designed to use our current GalXC Platform and apply it to liver targets in the complement pathway that are of interest to Alexion. Both the, well, really all three of the collaborations, including the Boehringer collaboration, our discovery stage. And so they set out to begin researching into clearing clinical candidates, which subsequently need to go through formal preclinical development before clinical entry. So there is a substantial period of time, let's say, minimum six quarters, but likely more before any clinical entries would occur following work getting started, which sadly doesn't occur the day after you signed. But it takes a little while to get going, not long, but a little while. So, there isn't going to be strong news flow that emerge from the Lilly and Alexion collaborations in the 2019 or early 2020 time frame. Beringer having started in 2017 as the potential for some earlier action.

Jonathan Miller -- Evercore ISI -- Analyst

Great. Thanks. Understood on that. On the HBV trials, could you give us some more color on the differences between the NUC-naive and NUC-experienced arms? And why are you limiting one arm to single dose and the other arm to multi-dose there?

Rebecca Peterson -- Head Of Corporate Communications

I'll pass that to Ralf.

Ralf Rosskamp -- M.D. Chief Medical Officer

Correct. The NUC experience, say, as the name says, our patients who are currently on NUC therapy and NUC-naive patients are not all NUCs. And we try to keep them without NUCs fall 87 days. So after -- that's the reason also why the single dose is in the NUC-naive, because the guidance usually will say that that patients with chronic hepatitis and certain criteria need to be treated with NUCs. So, if we would -- therefore we thought really keeping them off standard of therapy is very -- is difficult in the multiple-dose setting. So you can do it in the single-dose setting with the limited follow-up and you couldn't do it in the multi-dose setting. That's why we have decided to have the NUV-naive patients only single dose administration and again modeling and simulation will help us, because we can directly compare the first 28 days. So, after the first dose in the multi-dose part with the first 28 days of the NUC-naive, single-dose part and this will help us from a modeling and simulation perspective to actually then predict what would have happened if multiple dose NUC-naive patients would have received. Does that answer your question?

Jonathan Miller -- Evercore ISI -- Analyst

Yeah, absolutely, that makes perfect sense. I guess my final question there then is, I noticed that the PHYOX2 study is already listed on clinical trials and listed on recruited. So with the potentially registrational trial already ongoing or at least imminently starting, what thoughts have you given to commercial prep for PH and when can we expect more news about your strategy there and buildout there?

Douglas M. Fambrough -- President and Chief Executive Officer

Jon, we thought a lot about the commercialization path. There is a lot of analysis going on both using outside consulting firms and internal resources. We're not prepared to talk about what the commercialization organization is going to look like in the timing of the build, but we do feel that we've started this process with an adequate runway, such that when we hope we achieve approval, we will be up -- ready to hit the ground running.

Jonathan Miller -- Evercore ISI -- Analyst

Thank you so much.

Rebecca Peterson -- Head Of Corporate Communications

Thank you so much. Operator, we have time for two more questions.

Operator

Thank you. And the next question comes from Steven Willey of Stifel. Your line is now open.

Steven Willey -- Stifel -- Analyst

Yeah, good afternoon. Thanks for taking my questions, and congratulations on the progress. With respect to PHYOX3, the open label extension. Just curious as to the timing of this and I guess why the lag in terms of getting patients into the open enrollment portion of this trial. And is that lag due to the completion of any preclinical toxicology work that needs to be done to support long-term dosing?

Rebecca Peterson -- Head Of Corporate Communications

So, Ralf, I'll direct that to you.

Ralf Rosskamp -- M.D. Chief Medical Officer

Yes, no, it's not, and when we gave guidance, say in the starts in the second quarter versus the first quarter, there isn't much time lag, we don't expect there is much time lag between the trial. We have given priority in terms of filing and contracting to the PHYOX2 trial. And the reason is that many of those patients in the original PHYOX study are still in follow-up. So, they haven't reached 80% of their baseline. So, we have a big -- a great portion of patients actually even if they -- if the trial would be able to recruit -- could not be recruited right now, because they are -- still haven't gone back to their baseline. But in reality, it will not be a big time difference between the initiation of those trials.

Steven Willey -- Stifel -- Analyst

Got it. And in the optimism around retention rate for the open-label extension portion?

Ralf Rosskamp -- M.D. Chief Medical Officer

I believe that as most stations will, that's what we have from conversations with our investigators, will opt to go into the long-term expansion. And this was actually part already of the informed consent and part of the protocol that these patients can go into a multi-dose study. The PHYOX study is a clinical pharmacology study and they did not have direct benefit. So, I think most patients will be looking forward to go into this open-label study.

Steven Willey -- Stifel -- Analyst

Got it. And then just one last quick question, I guess just a follow-up -- just so I guess dosing into PHYOX to the registrational program is pretty imminent here, it's posted on clinical trials.

Rebecca Peterson -- Head Of Corporate Communications

Yes.

Steven Willey -- Stifel -- Analyst

What do you expect to gain from the FDA meeting later this month?

Ralf Rosskamp -- M.D. Chief Medical Officer

We want to get the last clarity around the final endpoints. You heard us talking about normalization -- near-normalization about full approval or the accelerated approval. And there are some slide details, where we need an agreement with the agency. Operationally, if that's not hold us back, because this is a double-blind study and if it would have to change some of our analysis, it will be part of the statistical plan. So operationally, it doesn't hold us back to start as we planned to do in countries outside of the U.S.

Douglas M. Fambrough -- President and Chief Executive Officer

But, I want to add a little color to this, Steve. The original idea in this program was that this PH drug would be eligible for accelerated approval based on oxalate reduction as a biomarker. The very powerful levels of oxalate reduction that we're observing with some patients going below normal and the majority of patients near normal or normal, has led to a change in perspective, I think both at Dicerna and among the regulators, where if you are achieving normalization or you don't have hyperoxaluria anymore. So you don't really need to assess whether you've had enough reduction to mitigate the disease, you don't have the disease anymore. So, they have suggested that they may be open to a full approval instead of an accelerated approval, a full approval being obviously a better outcome than accelerated approval and asked us to have a subsequent discussion after our first meeting around what a full approval endpoint would look like. So I don't know what the outcome of the discussion is going to be, but as Ralf said, it's about data analysis from the trial, not the conduct of the trial and it's about how the final endpoint will be configured. So, we look forward to updating everybody on the outcome of this discussion with the FDA when we're able to.

Steven Willey -- Stifel -- Analyst

Very, very helpful. Thanks for taking the questions.

Rebecca Peterson -- Head Of Corporate Communications

Operator, we have time for one more question.

Operator

Thank you. And our last question comes from Edward Nash of SunTrust Robinson Humphrey. Your line is now open.

Edward Nash -- SunTrust Robinson Humphrey -- Analyst

Hey, thank you so much for taking our question. This is (inaudible) on for Edward Nash. Congratulations on the progress. I think the first question we have is for the PH and pivotal trial of PHYOX2, have you mentioned -- maybe I have missed it, have you mentioned the dose -- what the dose is going to be tested in that pivotal trial?

Douglas M. Fambrough -- President and Chief Executive Officer

Yes, we have. I believe we disclosed the dose in our R&D Day in November. It will be a monthly fixed dose of 170 milligrams in a 1 mL volume for adult patients. There is a lower fixed dose for younger, lower-weight patients.

Edward Nash -- SunTrust Robinson Humphrey -- Analyst

Okat. Got it. Thank you so much for that. And the second question is on the HBV. So you mentioned that eventually you are looking to combine your DCR-HBVS, is another drug for the treatment. And just can you help us think and what are the other mix of action makes sense for the combination?

Douglas M. Fambrough -- President and Chief Executive Officer

Sure. So, the goal of our RNAi-based program is to achieve maximum antigen reduction. But it seems clear the HBV community wants to achieve is a combination of S antigen reduction to below detectable levels or zero clearance and the -- and a productive immune response against the virus by the patient or seroconversion, and the combination of those two is generally agreed to be a functional cure and is really where people see the goal line for new therapies in HBV. RNAi addresses the move toward zero clearance, but you need the productive immune response, which the viruses seem to adapt to blocking. So it least makes intuitive sense that you would try to do something to stimulate that immune response whether that's some innate immune activator or even a therapeutic vaccine. Those types of host immune system stimulators intuitively seem like a good pair. Having said that, we intend to work that out with our potential partner for further development. And I don't know for certain things will go in that direction. But I do think I've captured sort of consensus view of the HBV community and talking about the pairing of RNAi with some sort of aminoactive (ph) host-acting agent.

Edward Nash -- SunTrust Robinson Humphrey -- Analyst

Got it. It's very helpful. Thank you so much.

Rebecca Peterson -- Head Of Corporate Communications

I thank you all so much. And operator, we will now conclude today's call. Doug, do you have any closing remarks?

Douglas M. Fambrough -- President and Chief Executive Officer

No, I want to thank everybody for their attention. And I appreciate the kind words from the analysts. So look forward to keeping you all updated.

Rebecca Peterson -- Head Of Corporate Communications

Yeah, we're going to keep pushing. And we are certainly available at the Company should you have any additional questions following the earnings call.

Operator

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

Duration: 51 minutes

Call participants:

Rebecca Peterson -- Head Of Corporate Communications

Douglas M. Fambrough -- President and Chief Executive Officer

Jack Green -- Chief Financial Officer

Robyn Karnauskas -- Citi -- Analyst

Ralf Rosskamp -- M.D. Chief Medical Officer

Mani Foroohar -- SVB Leerink -- Analyst

Jonathan Miller -- Evercore ISI -- Analyst

Steven Willey -- Stifel -- Analyst

Edward Nash -- SunTrust Robinson Humphrey -- Analyst

More DRNA analysis

Transcript powered by AlphaStreet

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

More From The Motley Fool

Motley Fool Transcribers has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.