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Dicerna Pharmaceuticals Inc (NASDAQ:DRNA)
Q1 2020 Earnings Call
May 9, 2020, 8:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and welcome to the Dicerna Pharmaceuticals First Quarter 2020 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded at the company's request. I will now turn the call over to your host, Lauren Stival representing Dicerna Pharmaceuticals. Please go ahead.

Lauren Stival, -- Managing Director

Thank you, operator. Good afternoon, everyone, and thank you for joining us to review Dicerna's first quarter 2020 financial results and operational highlights. Anyone who hasn't yet had a chance to review our results, we issued a press release after the close of trading today, which is available under the Investors & Media tab on our website at dicerna.com. You may also listen to this conference call via webcast on our website, which will be archived for 30 days, beginning approximately two hours after this call is completed. Speaking on today's call will be Dicerna's President and Chief Executive Officer, Doug Fambrough, who will discuss our corporate progress and key milestones and provide an update on clinical development and collaboration activities. Our Chief Financial Officer, Jack Green, will then review our first quarter financial results. We also have Jim Weissman, our Chief Operating Officer; and Ralf Rosskamp, our Chief Medical Officer, available today to answer questions during Q&A. Following our remarks, we will open the line up for your questions. I'd like to remind listeners that, as noted in today's press release, management will be making forward-looking statements on today's call, including, for example, the clinical development, therapeutic and commercial potential of Nedosiran and other development programs; research and development plans and time lines; the potential for Dicerna to continue to add programs and extend the reach of our technology to additional tissues in our internal discovery research and in our collaborative programs; expectations related to our collaborations with Novo Nordisk, Roche, Lilly, Alexion, Boehringer Ingelheim and Alnylam and the potential for future collaborations; and Dicerna's financial position, expectations about current or future clinical data and time lines, collaboration funding, expenses and cash usage. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of Dicerna's latest Forms 10-Q and 10-K 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 the call over to Doug Fambrough, Dicerna's President and CEO. Doug?

Douglas M. Fambrough -- President and Chief Executive Officer

T candidates to our partners, underscoring the speed and efficiency with which we can turn out new GalXC drug candidates. To sum up, although we have experienced some slowing in our A1AT and Nedosiran development programs, we are cautiously optimistic that the impacts from COVID-19 will begin to lift in the coming weeks and allow us to pick up the pace on our clinical programs. While the COVID-19 situation and its future impacts globally have yet to play out, we are very fortunate to have in place a business model and balance sheet that can enable us to weather for some time some of the direct impacts and financial headwinds that many others in our industry are now or may soon be facing. By and large, we are continuing to operate and execute as before, appropriately resourcing each of the key functions and programs necessary to execute on our goals, positioning us well in our evolution toward becoming a fully integrated commercial-stage biopharmaceutical company. Before I turn the call over to Jack Green for a discussion of our financials, I want to note our other announcement today regarding the hiring of our new Chief Financial Officer, Doug Pagan, who will be succeeding Jack as he retires from Dicerna. Doug brings more than 20 years of financial management experience at publicly traded biopharmaceutical and biotechnology companies, including five years as CFO of Paratek, where he was part of its transition from development to commercial stage and led the company's finance, IT and facilities organizations and was responsible for capital formation and allocation, investor relations, strategic planning, SEC reporting, tax and treasury, strategic direction and overall financial management. I'm very pleased that Doug will be joining us at the end of the month and believe that his background and skill sets are a strong fit for us at this stage in our evolution.

As we had previously communicated, Jack will remain in the CFO position until Doug joins, and he will remain engaged in an advisory capacity for a period of time thereafter to ensure a smooth transition. This will, therefore, be Jack's last quarterly call with Dicerna, and I want to once again thank Jack for his dedication and steady leadership over the past few years. Jack, it's been a privilege to work shoulder to shoulder with you. You've been an excellent colleague and CFO and a critical part of the team that's driven us to the successes we've had the last few years. I can speak for all my other colleagues here at Dicerna in giving you our heartfelt thanks, congratulations and best wishes on your retirement. Jack? ose cohort and four out of six participants in the 3.0 milligram per kilogram dose cohort have entered this conditional follow-up period. It is too early to say for the 6.0 milligram per kilogram cohort. The longest follow-up at this point is seven months after the last dose of RG6346. And obviously, that individual is in the 1.5 milligram per kilogram cohort. All of this said, the trial remains blinded, and we do not know what treatment regimen patients are receiving, but we are nonetheless encouraged by these observations.

The study continues to progress toward completion, though at a slightly slower pace due to COVID-19 impacts. This may mean that we could end up with two or three patients out of the 26 patients planned for groups B and C that will not have completed the formal study period prior to the interim read for our August R&D Day data presentation. However, these patients are not gating to Roche's planned initiation of combination studies and will not impact overall program time lines. Rounding out our planned presentation at our August R&D Day will be new data showing the application of our GalXC platform to other tissues, first and foremost, the CNS. It will be our first presentation of data in tissues outside the liver and we are looking forward to it. From a collaboration standpoint, the first part of the year has been quite productive. Our lab activities have proceeded under an essential worker exemption during this mandatory remote work period, and we have continued to make good progress in support of our collaborative arrangements. First, Lilly. Our collaboration with Lilly has been moving along well, with their acceptance during the quarter of their second GalXC candidate, now named LY3819469, which advanced to preclinical development at Lilly for a cardiometabolic indication. Lilly also remains on track to submit a CTA or IND by the end of the year for their first GalXC candidate, LY3561774. Second, Alexion. Alexion's acceptance of our clinical candidate nominations for DCR-COMP1 and DCR-COMP2 earlier this year triggered their progression to the manufacturing and preclinical development phase. Third, while it has literally been just a few months since our agreement with Novo closed, the collaboration is making good progress, and the initial targets have been selected. Fourth, our discovery research project with Boehringer Ingelheim remains on track. And finally, I'm pleased to also note today that Roche has formally nominated the first selected target under the discovery research portion of our agreement, deepening our collaboration in HBV.

As a reminder, Roche had until receipt of the Phase I data from the RG6346 study to initiate a research and development collaboration program to select additional targets related to HBV. We are pleased to now take this next step with Roche and include them among our portfolio of collaborative partners engaged with us in the identification and development of new GalXC molecules. At this point, we have now delivered five GalXC development candidates to our partners, underscoring the speed and efficiency with which we can turn out new GalXC drug candidates. To sum up, although we have experienced some slowing in our A1AT and Nedosiran development programs, we are cautiously optimistic that the impacts from COVID-19 will begin to lift in the coming weeks and allow us to pick up the pace on our clinical programs. While the COVID-19 situation and its future impacts globally have yet to play out, we are very fortunate to have in place a business model and balance sheet that can enable us to weather for some time some of the direct impacts and financial headwinds that many others in our industry are now or may soon be facing. By and large, we are continuing to operate and execute as before, appropriately resourcing each of the key functions and programs necessary to execute on our goals, positioning us well in our evolution toward becoming a fully integrated commercial-stage biopharmaceutical company. Before I turn the call over to Jack Green for a discussion of our financials, I want to note our other announcement today regarding the hiring of our new Chief Financial Officer, Doug Pagan, who will be succeeding Jack as he retires from Dicerna. Doug brings more than 20 years of financial management experience at publicly traded biopharmaceutical and biotechnology companies, including five years as CFO of Paratek, where he was part of its transition from development to commercial stage and led the company's finance, IT and facilities organizations and was responsible for capital formation and allocation, investor relations, strategic planning, SEC reporting, tax and treasury, strategic direction and overall financial management. I'm very pleased that Doug will be joining us at the end of the month and believe that his background and skill sets are a strong fit for us at this stage in our evolution.

As we had previously communicated, Jack will remain in the CFO position until Doug joins, and he will remain engaged in an advisory capacity for a period of time thereafter to ensure a smooth transition. This will, therefore, be Jack's last quarterly call with Dicerna, and I want to once again thank Jack for his dedication and steady leadership over the past few years. Jack, it's been a privilege to work shoulder to shoulder with you. You've been an excellent colleague and CFO and a critical part of the team that's driven us to the successes we've had the last few years. I can speak for all my other colleagues here at Dicerna in giving you our heartfelt thanks, congratulations and best wishes on your retirement. Jack? ose cohort and four out of six participants in the 3.0 milligram per kilogram dose cohort have entered this conditional follow-up period. It is too early to say for the 6.0 milligram per kilogram cohort. The longest follow-up at this point is seven months after the last dose of RG6346. And obviously, that individual is in the 1.5 milligram per kilogram cohort. All of this said, the trial remains blinded, and we do not know what treatment regimen patients are receiving, but we are nonetheless encouraged by these observations.

The study continues to progress toward completion, though at a slightly slower pace due to COVID-19 impacts. This may mean that we could end up with two or three patients out of the 26 patients planned for groups B and C that will not have completed the formal study period prior to the interim read for our August R&D Day data presentation. However, these patients are not gating to Roche's planned initiation of combination studies and will not impact overall program time lines. Rounding out our planned presentation at our August R&D Day will be new data showing the application of our GalXC platform to other tissues, first and foremost, the CNS. It will be our first presentation of data in tissues outside the liver and we are looking forward to it. From a collaboration standpoint, the first part of the year has been quite productive. Our lab activities have proceeded under an essential worker exemption during this mandatory remote work period, and we have continued to make good progress in support of our collaborative arrangements. First, Lilly. Our collaboration with Lilly has been moving along well, with their acceptance during the quarter of their second GalXC candidate, now named LY3819469, which advanced to preclinical development at Lilly for a cardiometabolic indication. Lilly also remains on track to submit a CTA or IND by the end of the year for their first GalXC candidate, LY3561774. Second, Alexion. Alexion's acceptance of our clinical candidate nominations for DCR-COMP1 and DCR-COMP2 earlier this year triggered their progression to the manufacturing and preclinical development phase. Third, while it has literally been just a few months since our agreement with Novo closed, the collaboration is making good progress, and the initial targets have been selected. Fourth, our discovery research project with Boehringer Ingelheim remains on track. And finally, I'm pleased to also note today that Roche has formally nominated the first selected target under the discovery research portion of our agreement, deepening our collaboration in HBV.

As a reminder, Roche had until receipt of the Phase I data from the RG6346 study to initiate a research and development collaboration program to select additional targets related to HBV. We are pleased to now take this next step with Roche and include them among our portfolio of collaborative partners engaged with us in the identification and development of new GalXC molecules. At this point, we have now delivered five GalXC development candidates to our partners, underscoring the speed and efficiency with which we can turn out new GalXC drug candidates. To sum up, although we have experienced some slowing in our A1AT and Nedosiran development programs, we are cautiously optimistic that the impacts from COVID-19 will begin to lift in the coming weeks and allow us to pick up the pace on our clinical programs. While the COVID-19 situation and its future impacts globally have yet to play out, we are very fortunate to have in place a business model and balance sheet that can enable us to weather for some time some of the direct impacts and financial headwinds that many others in our industry are now or may soon be facing. By and large, we are continuing to operate and execute as before, appropriately resourcing each of the key functions and programs necessary to execute on our goals, positioning us well in our evolution toward becoming a fully integrated commercial-stage biopharmaceutical company. Before I turn the call over to Jack Green for a discussion of our financials, I want to note our other announcement today regarding the hiring of our new Chief Financial Officer, Doug Pagan, who will be succeeding Jack as he retires from Dicerna. Doug brings more than 20 years of financial management experience at publicly traded biopharmaceutical and biotechnology companies, including five years as CFO of Paratek, where he was part of its transition from development to commercial stage and led the company's finance, IT and facilities organizations and was responsible for capital formation and allocation, investor relations, strategic planning, SEC reporting, tax and treasury, strategic direction and overall financial management. I'm very pleased that Doug will be joining us at the end of the month and believe that his background and skill sets are a strong fit for us at this stage in our evolution.

As we had previously communicated, Jack will remain in the CFO position until Doug joins, and he will remain engaged in an advisory capacity for a period of time thereafter to ensure a smooth transition. This will, therefore, be Jack's last quarterly call with Dicerna, and I want to once again thank Jack for his dedication and steady leadership over the past few years. Jack, it's been a privilege to work shoulder to shoulder with you. You've been an excellent colleague and CFO and a critical part of the team that's driven us to the successes we've had the last few years. I can speak for all my other colleagues here at Dicerna in giving you our heartfelt thanks, congratulations and best wishes on your retirement. Jack? imate for completion of PHYOX2 enrollment or to ascertain the impact to our NDA submission timing. So we will continue to closely monitor the situation and provide an update when we have greater clarity. Also impacted by COVID-19 is initiation of our planned supplemental PHYOX trials, namely PHYOX4 and PHYOX7, which were expected to begin in the first half; and PHYOX8, which we had planned to initiate in the second half of this year, each subject to regulatory approvals. At this time, we do not expect PHYOX4 and PHYOX7 will be able to initiate as originally planned, and we are gauging our options for PHYOX8 initiation. At the current time, we believe that data from these studies will be available for inclusion in the NDA. However, none of these studies are required for NDA submission, but they are nonetheless studies helpful to characterizing Nedosiran and are of continued interest to us as they may bear on the potential drug label. For all, it is too early to give reliable expectation for study starts. So as with PHYOX2, we'll continue to monitor the situation, do what we can to prepare to initiate when feasible, and provide an update when we have a clearer line of sight on timing. Our PHYOX3 multi-dose, long-term safety trial continues to progress with nearly all patients who required an alternate dosing arrangement due to site restrictions now having transitioned to home-based dose administration and telehealth follow-up by investigators for most future visits.

As of May 4, we had 17 patients enrolled in PHYOX3, up from 14 patients that were included in our March interim results analysis. As a rollover, open-label, multi-dose study, greater visibility into Nedosiran safety and efficacy with long-term, once-monthly administration will only expand as more time elapses in the PHYOX3 trial, but we are nonetheless very encouraged by the results we saw from the first interim analysis in March. Of the four patients who had been dosed for at least three months, three of which are type one patients and one a type two patient, all four had normal or near-normal urinary oxalate levels on at least two visits and Nedosiran appear generally well tolerated with no injection site reactions and no drug-related severe adverse events. At that time, total patient exposure had reached nearly two years in the PHYOX3 trial. The medical conference, OxalEurope, originally planned for the first half this year, will now be taking place in December. So instead of that venue, we plan to move forward and present data from PHYOX3 on our own as part of our R&D Day planned for August, the timing of which should provide us with a much more mature and robust data set to present relative to our preliminary interim results in March. From a commercial preparation standpoint, we continue to put in place and roll out key infrastructure that we will need for the planned launch of Nedosiran and are continuing to selectively hire for key roles. Clearly, visibility on timing around the PHYOX2 trial and to what extent the slower pace of enrollment will have an impact on timing of our NDA submission are in mind as we move forward with hiring plans, but we are continuing to add people to the team at appropriate times so that we will be ready to move ahead once we have greater clarity on key milestones.

Turning now to alpha-1 antitrypsin or A1AT deficiency-associated liver disease program. With the antitrust analysis completed as of mid-April and the agreement with Alnylam now effective, we have already begun a deeper dive on the data and profile of ALN-AAT02, which will help inform our next steps in evaluating both ALN-AAT02 and our own A1AT Phase I/II candidate, DCR-A1AT, which received orphan drug designation from the FDA in March. We plan to conduct certain nonclinical studies of ALN-AAT02 in the near term to better inform our selection between ALN-AAT02 and DCR-A1AT for further clinical development. We expect to make a selection prior to the initiation of the patient cohorts of the Phase I/II clinical trial program and to advance only one candidate into patient testing. As we have previously stated, we believe our Phase I/II trial will be sufficient for subsequent advancement to pivotal clinical development. There are currently no approved therapies specifically designed to treat the liver manifestations of this condition, and we strongly believe that with this collaboration for A1AT, we are better positioned to advance the candidate best suited to treat patients with this disease. Following our business update in March, enrollment in the healthy volunteers portion of our ongoing Phase I/II study of DCR-A1AT was functionally paused as a result of site restrictions arising from COVID-19 with follow-up continuing for the current dosing cohort. About a week ago, we received very encouraging news that certain sites will be in a position to begin enrolling healthy volunteers in the next dosing cohort in the next few weeks. The net effect for us is that, assuming there are no new developments with COVID to change the plan, dosing in the next cohort should be gated only by the pace of participant screening and enrollment. While pleased that we are gaining some clarity on trial continuation for DCR-A1AT, safety for those participating in our trial remains paramount, and we are taking additional precautions in an effort to safeguard their health.

As the trial moves forward, any participants presenting with COVID-like symptoms will be tested. And in the event a participant is diagnosed with COVID-19 post dosing, they can receive augmentation therapy if their A1AT levels are low. Despite this positive news, for now, we are unable to give guidance on completion of the healthy volunteers portion of the DCR-A1AT trial or the initiation of patient dosing with either ALN-AAT02 or DCR-A1AT, but we'll continue to monitor the situation, gauge our progress and plan to provide updated program time lines at a later date. Now turning to RG6346, our third core development program that we are developing in collaboration with Roche. RG6346 is a GalXC-based investigational treatment for chronic hepatitis B virus infection, a serious liver infection that can result in advanced liver disease or liver cancer if not treated effectively, and which claims more than 887,000 lives annually. We are currently conducting a Phase I proof-of-concept study in patients with HBV. As I summarized on our last call, this trial comprises three groups: group A, composed of healthy volunteers, which was completed last year; group B, in patients newly diagnosed with chronic HBV, who are naive to standard of care with NUCs and who agreed to forgo initiation of new therapy for 12 weeks, these patients received a single dose of RG6346; and group C, in patients previously treated with NUCs and who received four doses of RG6346. Group C has three cohorts at ascending dose levels. Patients in group B and C are eligible to 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 for group B and 16 weeks for group C. As noted on our last quarterly call, multiple patients have entered the extended follow-up observation period, including representation from both groups B and C. Note, each of the three group C cohorts consists of four patients treated with RG6346 and two placebo patients. Now specifically, three out of six participants in the 1.5 milligram per kilogram dose cohort and four out of six participants in the 3.0 milligram per kilogram dose cohort have entered this conditional follow-up period. It is too early to say for the 6.0 milligram per kilogram cohort. The longest follow-up at this point is seven months after the last dose of RG6346. And obviously, that individual is in the 1.5 milligram per kilogram cohort. All of this said, the trial remains blinded, and we do not know what treatment regimen patients are receiving, but we are nonetheless encouraged by these observations.

The study continues to progress toward completion, though at a slightly slower pace due to COVID-19 impacts. This may mean that we could end up with two or three patients out of the 26 patients planned for groups B and C that will not have completed the formal study period prior to the interim read for our August R&D Day data presentation. However, these patients are not gating to Roche's planned initiation of combination studies and will not impact overall program time lines. Rounding out our planned presentation at our August R&D Day will be new data showing the application of our GalXC platform to other tissues, first and foremost, the CNS. It will be our first presentation of data in tissues outside the liver and we are looking forward to it. From a collaboration standpoint, the first part of the year has been quite productive. Our lab activities have proceeded under an essential worker exemption during this mandatory remote work period, and we have continued to make good progress in support of our collaborative arrangements. First, Lilly. Our collaboration with Lilly has been moving along well, with their acceptance during the quarter of their second GalXC candidate, now named LY3819469, which advanced to preclinical development at Lilly for a cardiometabolic indication. Lilly also remains on track to submit a CTA or IND by the end of the year for their first GalXC candidate, LY3561774. Second, Alexion. Alexion's acceptance of our clinical candidate nominations for DCR-COMP1 and DCR-COMP2 earlier this year triggered their progression to the manufacturing and preclinical development phase. Third, while it has literally been just a few months since our agreement with Novo closed, the collaboration is making good progress, and the initial targets have been selected. Fourth, our discovery research project with Boehringer Ingelheim remains on track. And finally, I'm pleased to also note today that Roche has formally nominated the first selected target under the discovery research portion of our agreement, deepening our collaboration in HBV.

As a reminder, Roche had until receipt of the Phase I data from the RG6346 study to initiate a research and development collaboration program to select additional targets related to HBV. We are pleased to now take this next step with Roche and include them among our portfolio of collaborative partners engaged with us in the identification and development of new GalXC molecules. At this point, we have now delivered five GalXC development candidates to our partners, underscoring the speed and efficiency with which we can turn out new GalXC drug candidates. To sum up, although we have experienced some slowing in our A1AT and Nedosiran development programs, we are cautiously optimistic that the impacts from COVID-19 will begin to lift in the coming weeks and allow us to pick up the pace on our clinical programs. While the COVID-19 situation and its future impacts globally have yet to play out, we are very fortunate to have in place a business model and balance sheet that can enable us to weather for some time some of the direct impacts and financial headwinds that many others in our industry are now or may soon be facing. By and large, we are continuing to operate and execute as before, appropriately resourcing each of the key functions and programs necessary to execute on our goals, positioning us well in our evolution toward becoming a fully integrated commercial-stage biopharmaceutical company. Before I turn the call over to Jack Green for a discussion of our financials, I want to note our other announcement today regarding the hiring of our new Chief Financial Officer, Doug Pagan, who will be succeeding Jack as he retires from Dicerna. Doug brings more than 20 years of financial management experience at publicly traded biopharmaceutical and biotechnology companies, including five years as CFO of Paratek, where he was part of its transition from development to commercial stage and led the company's finance, IT and facilities organizations and was responsible for capital formation and allocation, investor relations, strategic planning, SEC reporting, tax and treasury, strategic direction and overall financial management. I'm very pleased that Doug will be joining us at the end of the month and believe that his background and skill sets are a strong fit for us at this stage in our evolution.

As we had previously communicated, Jack will remain in the CFO position until Doug joins, and he will remain engaged in an advisory capacity for a period of time thereafter to ensure a smooth transition. This will, therefore, be Jack's last quarterly call with Dicerna, and I want to once again thank Jack for his dedication and steady leadership over the past few years. Jack, it's been a privilege to work shoulder to shoulder with you. You've been an excellent colleague and CFO and a critical part of the team that's driven us to the successes we've had the last few years. I can speak for all my other colleagues here at Dicerna in giving you our heartfelt thanks, congratulations and best wishes on your retirement. Jack? headwinds that many others in our industry are now or may soon be facing. By and large, we are continuing to operate and execute as before, appropriately resourcing each of the key functions and programs necessary to execute on our goals, positioning us well in our evolution toward becoming a fully integrated commercial-stage biopharmaceutical company. Before I turn the call over to Jack Green for a discussion of our financials, I want to note our other announcement today regarding the hiring of our new Chief Financial Officer, Doug Pagan, who will be succeeding Jack as he retires from Dicerna. Doug brings more than 20 years of financial management experience at publicly traded biopharmaceutical and biotechnology companies, including five years as CFO of Paratek, where he was part of its transition from development to commercial stage and led the company's finance, IT and facilities organizations and was responsible for capital formation and allocation, investor relations, strategic planning, SEC reporting, tax and treasury, strategic direction and overall financial management. I'm very pleased that Doug will be joining us at the end of the month and believe that his background and skill sets are a strong fit for us at this stage in our evolution.

As we had previously communicated, Jack will remain in the CFO position until Doug joins, and he will remain engaged in an advisory capacity for a period of time thereafter to ensure a smooth transition. This will, therefore, be Jack's last quarterly call with Dicerna, and I want to once again thank Jack for his dedication and steady leadership over the past few years. Jack, it's been a privilege to work shoulder to shoulder with you. You've been an excellent colleague and CFO and a critical part of the team that's driven us to the successes we've had the last few years. I can speak for all my other colleagues here at Dicerna in giving you our heartfelt thanks, congratulations and best wishes on your retirement. Jack?

Jack Green -- Chief Financial Officer

Thank you, Doug. It's also been a pleasure to work with you, and I wish you and all of our colleagues here at Dicerna the best all the best in the future. I'd like to briefly walk through the key financial results and direct you to our financial results press release and quarterly report on Form 10-Q issued earlier today for additional details. Net loss for the first quarter ended March 31, 2020, was $22.5 million or $0.31 per share compared to $26.2 million or $0.38 per share for the same period in 2019. The decrease in net loss was primarily driven by an increase of approximately $30.9 million in revenue related to our collaboration programs period over period, which was partially offset by increases in R&D and G&A expense during the quarter, tied to increased spending across our clinical programs, increased spending related to commercialization preparation activities and headcount increases in R&D and G&A. R&D expenses were $43.2 million for the first quarter compared to $21.6 million for the same period in 2019. The $21.6 million increase year-over-year was primarily due to increased manufacturing costs, clinical study costs and employee-related expenses due to an increase in headcount to support our growth. We expect overall research and development expenses to increase in 2020 and for the foreseeable future as we ramp our clinical manufacturing activities, continue clinical activities associated with our core product candidates, continue activities under the Novo, Roche, Lilly, Alexion and BI agreements and undertake additional nonclinical work to evaluate ALN-AAT02 under our agreement with Alnylam. As it relates to the balance of 2020, we expect to see an increase from Q1 to Q2 of at least the same magnitude as was seen between Q4 and Q1 2020, with a continued but smaller increase in subsequent quarters. General and administrative expenses were $16 million for the first quarter 2020 compared to $9.7 million for the first quarter 2019.

The increase was primarily due to employee-related expenses related to the increased headcount to support our growth. We expect G&A expenses to gradually increase in 2020 as compared to 2019, largely due to investments in staffing and market-readiness activities. During the first quarter 2020, we recognized $34 million in revenue from our collaborative agreements with Novo, Roche, Lilly, Alexion and BI, compared to $3.1 million from our Lilly, Alexion and BI collaborations in the first quarter of 2019. As of March 31, 2020, we had approximately $551.1 million of deferred revenue on our balance sheet, representing the aggregate transaction price allocable to future performance under our company's collaborations. Of that amount, approximately $223.6 million was current deferred revenue expected to be recognized as revenue over the next four quarters; and approximately $327.5 million was noncurrent deferred revenue expected to be recognized as revenue in future periods. As a note regarding the $223.6 million that we expect to recognize over the next four quarters, this is not to be this is not a straight-line recognition but ramps substantially next quarter and more or less levels off over the next three quarters. Let me take a minute to walk through the components of deferred revenue by collaboration. With the Alexion collaboration, deferred revenue totaled approximately $65.2 million with $36.8 million classified as current and the remaining $28.4 million classified as long term. We expect the majority of the deferred revenue to be recognized through the second quarter of 2022. Deferred revenue at March 31, 2020, includes $15 million in research milestones achieved or likely to be achieved. For the Lilly collaboration, deferred revenue totaled approximately $126 million with $45.5 million classified as current and the remaining $80.5 million classified as long term. We expect the majority of the deferred revenue to be recognized through the fourth quarter of 2022. For the Roche collaboration, $180.7 million was recorded as deferred revenue as of March 31, 2020. Of that amount, $106.6 million is classified as current and expected to be recognized as revenue within the next 12 months, primarily associated with the completion of our Phase I study of RG6346. We expect the balance to be recognized as revenue during the remainder of the three year research term, which is extendable by an additional two years up to two years. For the Novo collaboration, $177.6 million was referred was recorded as deferred revenue at March 31, 2020. Of that amount, $33.1 million is classified as current and expected to be recognized as revenue within the next 12 months, with $144.5 million expected to be recognized over the remaining portion of the five year research term which is extendable by up to two years.

And finally, for the BI collaboration, deferred revenue totaled $1.6 million, all classified as current. As of March 31, 2020, we had $706.9 million in cash, cash equivalents and held-to-maturity investments, compared to $348.9 million as of December 31, 2019. We believe that our cash, cash equivalents and held-to-maturity investments and expected revenue from our existing collaborative agreements will be sufficient to fund our operating plan into 2023. This plan includes our expectations to advance Nedosiran through pivotal development, regulatory filing and potential commercial launch, completing the proof-of-concept study of RG6346 in participants with HBV infection, conducting nonclinical studies of ALN-AAT02 and advancing either ALN-AAT02 or DCI-A1AT through Phase I/II trial and initiating and conducting research and development programs with our collaborative partners. Finally, as we noted in our press release this afternoon, we believe our supply of investigational medicines is sufficient to support ongoing clinical trials and that our supply chain to date is fulfilling our requirements across all programs. We have also taken steps to mitigate potential future impacts to the supply chain by purchasing critical materials and drug substance ahead of near-term requirements and by engaging alternative suppliers. As a result, we have been able to increase our stock of key materials required to meet the needs of the company and our collaborative partners through mid-2021. With that, I would like to turn the call back over to Doug.

Douglas M. Fambrough -- President and Chief Executive Officer

Thank you, Jack. While we and the world continue to face uncertainties brought about by the COVID-19 pandemic, there are steps that we have and will continue to take as a society and here at Dicerna to prepare for the future. We have grown substantially over the past year, yet we remain a nimble company with an entrepreneurial mindset and the flexibility to adapt quickly to changing circumstances. This, coupled with our business model that marries together risk mitigation, diversification and significant growth potential, as well as our strong cash position, all provide Dicerna with a solid foundation to not only face what lies ahead, but to enable us to thrive and succeed. With multiple data presentations at our upcoming R&D Day in August, and, hopefully, more clarity on timing for important milestones from our ongoing clinical trials, the next half of 2020 looks like it will be eventful, and I look forward to updating you on our progress. Before I open the call to questions, I want to take a moment to thank all of the first responders and those on the front lines of this pandemic, from healthcare workers, to cleaning crews, to staff at our local stores. Whether your background is in medicine or something altogether different, you have become a de facto part of the healthcare community, making it possible for scientists and others within our industry to continue the work necessary to create and provide new medicines here in Massachusetts and beyond. We applaud you, and thank you for your sacrifices and selflessness. I would like to now open the call to questions.

Questions and Answers:

Operator

[Operator Instructions] And you have a question from Ed Arce of H.C. Wainwright.

Antonio Eduardo Arce -- H.C. Wainwright & Co -- Analyst

Hi, good afternoon, everyone. Thanks for taking my questions and congrats on a long series of continued progress through your pipeline. So first of all, I know you went into some length in your prepared remarks, Doug, around the data readouts and the R&D path in general, now that you have both candidates for A1AT. But I was hoping you could just further clarify how you see that rolling out to the point where you have a decision node to make to go with one or the other.

Douglas M. Fambrough -- President and Chief Executive Officer

So Ed, I'm not sure I can give a lot more insight into our selection process at this point because we're very early in the process. As you could appreciate, until we completed the antitrust analysis, there had been limited data sharing, reflecting the potential for us to remain competitors in that space. And so we are only now doing a deep dive on ALN-AAT02. But I expect that it is going to be some number of months, so not weeks and not years, during which we'll make the decision. And with one's thinking about critical path time line, we are hoping that in the event we choose DCR-A1AT, there is no divergence from our critical minimal time path. So I think that sets us up for a decision later this year. As I mentioned in the prepared remarks, based on the safety, the potency and the time lines associated with the respective development paths for both compounds.

Antonio Eduardo Arce -- H.C. Wainwright & Co -- Analyst

Okay, great. A couple more for me, if I could. The number of patients that you mentioned out of groups B and C with the Roche HBV program that went into the extended follow-up, I think I missed those numbers. Could you repeat those again?

Douglas M. Fambrough -- President and Chief Executive Officer

Sure. We gave numbers for the first two of three cohorts in group C, 1.5 milligrams per kilogram, where three of six participants went into extended observation and the 3.0 milligrams per kilogram cohort, where four of 6, went into extended follow-up and noting that only four of six patients in any given cohort received active drug and there are two on placebo.

Antonio Eduardo Arce -- H.C. Wainwright & Co -- Analyst

Excellent. And then the announcement today that Roche has decided to select their first GalXC target. I just wanted to make sure, I believe from the terms of their agreement, there were up to two candidates that could be selected. Is that right?

Douglas M. Fambrough -- President and Chief Executive Officer

Well, we've got the architect of the deal here. So Jim?

James B. Weissman -- Chief Operating Officer and Executive Vice President

Ed, good to talk to you. It's Jim Weissman. Actually, they can select up to five and move three forward. That's the general structure. It's pretty simple.

Antonio Eduardo Arce -- H.C. Wainwright & Co -- Analyst

Okay. And then lastly, just a quick question. On your R&D Day in August, I know that you're still waiting to figure out whether that will ultimately be in person in New York or virtually. Can you say that, that would be sometime in sort of second half of the month?

Douglas M. Fambrough -- President and Chief Executive Officer

No. I think it will probably be toward the beginning. I mean we have I think it's sort of fair to say. I mean we're tentatively targeting the 6th, but that could change. However, it's very concrete that we will be doing an R&D Day. But yes, it's targeted for the earlier part of August.

Antonio Eduardo Arce -- H.C. Wainwright & Co -- Analyst

Great, thanks so much.

Operator

The next question is from Umer Raffat of Evercore.

Umer Raffat -- Evercore. -- Analyst

Hi, thanks so much for taking our questions. Doug, I know there's so much debate on what part of the gene is targeted for the HBV program and even various companies fall out very differently on this debate, and that's fine. I guess from our perspective, it will be very helpful to hear you set the expectations appropriately heading into the R&D Day. And I had a three part question, if I may. It's all about the same thing. So you gave very helpful numbers, obviously, on the each of the cohorts. And one thing I am wondering is if you do have data on some patients up to seven months out, can you speak to whether the surface antigen log curve rebounds? Or it's more or less durable of at least two log reduction after you take the last dose, first? Second, your expectations for the depth of reduction. Do you think you can hit three log reduction plus consistently in multiple patients? Because you probably have that on a blinded basis. And finally, just very quickly, if you could remind us if you have both e-antigen-positive as well as e-antigen-negative patients?

Douglas M. Fambrough -- President and Chief Executive Officer

Sure, and thanks for being on the call, Umer. I can't answer all of your questions, but...

Umer Raffat -- Evercore. -- Analyst

Just answer the first two.

Douglas M. Fambrough -- President and Chief Executive Officer

So in three out of 4. So as you are aware, we chose to target the virus in a different place that leaves the X gene unsilenced, and we did that based on what we believe is the highest fidelity mouse model. Now bear in mind, it's a mouse model. Whether it's going to translate into humans is, of course, an experimental question in the clinic, right? And we're going to find that out. But we are targeting every transcript that makes S, and so I've always had a lot of confidence that it was very unlikely that we would do more poorly than another program that targeted, in addition, an additional transcript targeting a different protein. So I think that the first expectation I'd set is, which do no worse than anybody else, even though we are doing one less gene. Now when you look at the behavior in that model, we see a marginally higher suppression of S, and we see extended duration before there is a rebound. Of the 2, particularly when looking at a small N, I would say it's going to be easier to observe if translation of duration of effect comes through than a marginal difference in increased S reduction, particularly given the variability of the disease and the small N. So personally, that's what I'm sort of looking for the most. What we've seen with other programs is a knockdown with a nadir of 1.5 to two logs, and so I think it would be optimistic, overly optimistic for us to set an expectation of knockdown that's in addition to that. But it would be very nice if that was to be seen; three logs would be extraordinary. We can always keep our fingers crossed, but I think that is particularly aggressively optimistic. And on the final question, e-positive and e-negative, we do have both in the trial, but we don't have a fixed ratio between them. It's just noted when patients enroll.

Operator

The next question is from Yaron Werber.

Brendan Smith -- Cowen and Company -- Analyst

This is Brendan on for Yaron. And congrats. I actually just wanted to ask two really quick ones. First, just about the R&D Day later in the year and the look at the PHYOX3 data. Can you just kind of give us a quick sense of what kind of data we might expect and how many patient numbers and kind of like the readout you're thinking we might have by then? And then my other question is, actually, I think you mentioned how you've been able to kind of keep all your currently enrolled patients maintaining their treatment ongoing PHYOX trial, and that seems pretty exciting. Is this something you guys are kind of considering exploring a little bit more moving forward, that you would maybe consider taking into a package at some point? So I'm just hoping to get your thoughts on that.

Douglas M. Fambrough -- President and Chief Executive Officer

Sure thing, and thanks for dialing in, Brendan. Let me pass to my colleague, Ralf Rosskamp, to address PHYOX3 data at R&D Day and maintaining patients on treatment.

Ralf Rosskamp -- Chief Medical Officer

Yes. Thank you for the question. As you heard, we currently have 17 patients enrolled into the PHYOX3 study. And we just look at the data, what we expect in August, I would expect the majority of patients, of course, to have more than three dosages received for Nedosiran. And we had our first dosing in October of last year, so we expect also a good amount of those patients to have reached the six at least six month endpoint, which will give us a good read how that would look like in the 201 study. So I think it will be much substantial than what we said end of March, where we only reported from four patients who had at least three month data. So we will have a more substantial patient and data at this time. The second part of the question, why we haven't lost any patients. We were kind of in a lucky situation that we had already a home nurse assigned to each of our patients, because we have those home nurses coming to the patient's home at the day when they collect their 24-hour urine. So they went through with them through the training, how what to do, what not to do. And they came back next day to actually collect the 24-hour urine and ship the urine. So we're in a very fortunate situation that we had already this home nurse element in our trial. So what we needed to do is with home nurses after we made these protocol amendments allowing dosing by home nurses and taking blood samples by home nurses, to adequately train the nurses. But since they were already assigned, they some of them, they knew the patients already, it made it much easier for us than other companies who didn't have that element in their trial. Does that answer your question?

Brendan Smith -- Cowen and Company -- Analyst

Yes. I guess I was just kind of curious if this is this idea of at-home administration, maybe on a more commercial basis, is something you're looking to explore moving forward or if that's not really a priority right now?

Ralf Rosskamp -- Chief Medical Officer

Well, we always have the plan after the initial six month treatment in our double-blind, placebo-controlled trial, when patients were rolled over in our long-term trial, let patients administer at home, because we have this right now, this easy fixed-dose regimen and it makes it easy for patients. So the plan always was to have home administration in the rollover 301 study.

Brendan Smith -- Cowen and Company -- Analyst

Okay, great, thanks so much.

Operator

Your next question is from Stephen Willey of Stifel.

Stephen Douglas Willey -- Stifel -- Analyst

Yeah, thanks for taking the questions. Just a couple of quick ones for me. So with respect to the additional targets that Roche can select and move forward, have you indicated as to whether or not those are all viral targets per se? Or is Roche also potentially interested in some host targets as well?

Douglas M. Fambrough -- President and Chief Executive Officer

The discovery collaboration is primarily focused on host targets.

Stephen Douglas Willey -- Stifel -- Analyst

Okay. And just with respect to the I guess the one undisclosed liver program that you guys still have earmarked in the pipeline, when might we hear a little bit more about what that program is and what the plans are?

Douglas M. Fambrough -- President and Chief Executive Officer

I think it's going to be next year, and I realize it may be a little bit frustrating, it's one thing about that program that I think is important strategically for people to understand is that it's not a rare-disease program. And by putting it on the pipeline, even though undisclosed, we are signaling that Dicerna is going to be going after both rare and non-rare indications that meet our criteria, which include what we believe is an unusually high probability of success in the clinic and an innovative approach to a high unmet medical need. So it's going to stick there as undisclosed for a few more quarters, and it will be 2021 before we disclose it.

Stephen Douglas Willey -- Stifel -- Analyst

Got it. Thanks.

Operator

And your next question is from Mani Foroohar of SVB Leerink.

Aravinda Kuntimaddi -- SVB Leerink -- Analyst

Good afternoon, everyone. This is Aravinda on for Mani. Just two quick ones on our end. We were wondering if we can get further details on the Lilly collaboration target. Broadly, how should we think about the timing of trial initiation, the scale of potential economic milestones? And second question is for the A1AT program. Since you guys will be carrying the expense side of the collaboration, how should we think about the scale of the expense moving forward?

James B. Weissman -- Chief Operating Officer and Executive Vice President

All right. This is Jim. I'll answer the first question. We're going to leave the target unveiling to our partner as would be customary. The milestones are pretty well-known. For each of the milestones under the Lilly agreement, the total milestones are $350 million. With some targets, there's a little bit of a kicker. But generally, it's about $350 million or a little bit above. Doug, would you answer the second question?

Douglas M. Fambrough -- President and Chief Executive Officer

Sure. On A1AT, of course, we have been budgeting for development program in A1AT, including through pivotal development. And with the assumption of responsibility for ALN-AAT02, there is some increase in expense. But because we are only planning to advance one of the candidates to patient testing, that incremental spend is relatively modest. We are initiating some nonclinical studies of ALN-AAT02, and that's in the single-digit millions expense. And that will be on top of our development program. Otherwise, I don't have handy what we would project the cost through approval, and I don't think that we have certainty on that total cost, but it's going to be of a similar order to the PH program expenses that we have faced in that development program.

Aravinda Kuntimaddi -- SVB Leerink -- Analyst

Great, thanks a lot guys.

Operator

There are no other questions in queue.

Douglas M. Fambrough -- President and Chief Executive Officer

All right. Thank you. Thank you all for joining us today on our first quarter 2020 financial results and business update. I look forward to our next quarterly update and invite you to join us for our August R&D Day, for which we will provide more details, firm details, as we get closer to the date, including the exact date, time and format. Thank you for joining today's call.

Operator

[Operator Closing Remarks]

Duration: 56 minutes

Call participants:

Lauren Stival, -- Managing Director

Douglas M. Fambrough -- President and Chief Executive Officer

Jack Green -- Chief Financial Officer

James B. Weissman -- Chief Operating Officer and Executive Vice President

Ralf Rosskamp -- Chief Medical Officer

Antonio Eduardo Arce -- H.C. Wainwright & Co -- Analyst

Umer Raffat -- Evercore. -- Analyst

Brendan Smith -- Cowen and Company -- Analyst

Stephen Douglas Willey -- Stifel -- Analyst

Aravinda Kuntimaddi -- SVB Leerink -- Analyst

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