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Dicerna Pharmaceuticals Inc (DRNA)
Q3Â 2020 Earnings Call
Nov 5, 2020, 4:30 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 Third Quarter 2020 Earnings Conference Call. A reminder, this conference is being recorded at the company's request. I will now turn the call over to Lauren Stival, Dicerna's Head of Investor Relations. Please go ahead.
Lauren Stival -- Head of Investor Relations
Thank you, operator. Good afternoon, everyone, and thank you for joining us to review Dicerna's third quarter 2020 financial results and operational highlights. For anyone who hasn't yet had a chance to review our results, we issued a press release after the close of trading today, which is available under the Investors and Media tab on our website at dicerna.com. You may also listen to this conference call via webcast on our website, which will be archived beginning approximately two hours after this call has been 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; our Chief Medical Officer, Shreeram Aradhye, who will provide an update on clinical development and collaboration activities; and our Chief Financial Officer, Doug Pagan, who will then review our third quarter financial results. Following our remarks, we will open up the lines for your questions.
I'd like to remind listeners, as noted in today's press release, that management may be making forward-looking statements on today's call, including, for example, the clinical development, therapeutic and commercial potential of our product candidates, including nedosiran and RG6346 and our 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 or collaborative programs, expectations related to our current collaboration and the potential for future collaboration. We may also make forward-looking statements regarding Dicerna's financial position, expectations about current or future clinical data and time lines for collaboration, funding, expenses or 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 Form 10-K and 10-Q filed with the SEC. 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. And 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
Thank you, Lauren, and thank you, everyone, for joining us. It has been an incredible quarter here at Dicerna where our thoughtful scientific and clinical approaches to drug development have resulted in multiple positive data readouts for our primary hyperoxaluria or PH and hepatitis B virus programs as well as early success in nonclinical models in delivering our RNAi candidate therapeutics to multiple tissues beyond the liver. These clinical and research data provide us confidence in our potential to be a best-in-class company in the RNAi space with a strategy that allows us to selectively pursue high-value opportunities for the company with strong genetic validation and to partner other disease targets, particularly those in higher-risk categories with world-class pharma partners.
In a number of instances, such as with Novo Nordisk and Roche, we have even structured these partnerships in a way that allows Dicerna to opt in to select development programs once proof-of-concept has been achieved, thereby maintaining the potential for additional economic upside. This is a strategy that has built value, and we expect we'll continue to build value for Dicerna and our stakeholders. During the quarter, we continued to scale our organization in a fit-to-purpose manner preparing us for our next phase of growth as a commercial company. We made key hires to our executive leadership team in the quarter with the appointments of Ling Zeng as Chief Legal Officer and Secretary, who joins us from Novartis, where she served as Deputy Head of Legal M&A Group; and Shreeram Aradhye as our Chief -- Executive Vice President and Chief Medical Officer.
Shree is also a recent Novartis alum, having served most recently as Novartis' Global Head of Medical Affairs and Chief Medical Officer for Pharmaceuticals. They bring extensive experience from major commercial organizations that will be invaluable as we move forward, and we're thrilled to have both of them on board. Over just the last four quarters, our company has been undergoing major transformation, aided by adding $375 million to the balance sheet through upfront payments from new collaborations. We've been advancing three programs in clinical development and have five internal collaboration development candidates that are now driving toward the clinic, the first of which is expected to enter clinical development in the fourth quarter of this year.
We are also approaching the conclusion of enrollment in our pivotal trial for nedosiran, expected by year-end, which has the potential to have a best-in-class profile as the first treatment for all three known subtypes of primary hyperoxaluria. And we are well down the path in building our medical and commercial organization to market nedosiran in the U.S. However, our vision for Dicerna over the next five years goes well beyond these accomplishments. Over these five years, we expect to emerge as a growing fully integrated biopharmaceutical company with two commercial products that we market in the United States in PH and alpha-one antitrypsin liver disease, creating a revenue stream that is supplemented by income generated from our collaborations with top-tier biopharma players.
In addition to these commercial programs, within five years, we expect at least five late-stage clinical programs across our core internal and collaborative pipelines, further supported by numerous early stage clinical programs drawn from both our liver-directed lXC technology and RNAi technology delivering to the nervous system and to fat tissue, muscle and liver simultaneously as well as an array of other tissues we are working on that haven't yet been disclosed. With over $600 million on the balance sheet at the end of the third quarter, I'm confident in our ability to fund and execute on these aspirations. Indeed, we expect our existing collaborations to provide cash proceeds between now and the end of 2021 of over $100 million and continued strong financial support to our operations in years to come. I'm truly excited for what lies ahead for Dicerna.
And with that, I am happy to turn the call over to our new Chief Medical Officer, Shreeram Aradhye, to discuss our recent clinical progress in more detail. Shree?
Shreeram Aradhye -- Executive Vice President and Chief Medical Officer
Thank you, Doug, and thank you all for joining us. At this point in my career, I am excited to join Dicerna and work with my colleagues to help Dicerna progress its clinical portfolio and become a fully integrated commercial stage biopharmaceutical company. As a nephrologist, I'm looking forward to the completion of the first pivotal trial for nedosiran and the potential NDA submission in the third quarter next year. While this itself is exciting, the broad potential of Dicerna's best-in-class RNAi technology is even more so to me. As I made my choice to join Dicerna, the validation of our RNAi technology by multiple major partners across diverse therapeutic areas was of special interest to me.
I joined the company in September, soon after our R&D Day in August when two major data sets were presented for PH and hepatitis B virus. More recently, we presented an updated interim data cut from our PHYOX3 open-label extension trial for nedosiran at ASM in October, noting continued improvement in these participants with PH. As a reminder, primary hyperoxaluria is a family of rare genetic disorders causing hepatic oxalate overproduction that can result in life-threatening kidney damage. Across the three known subtypes, PH1, PH2 and PH3, excess oxalate excretion can lead to chronic kidney stones and progressive kidney damage. In more advanced cases, patients may progress to end-stage renal disease, requiring regular dialysis and the need for dual liver-kidney transplantation. PH patients with decreased renal function may also experience systemic oxalosis which involves the buildup and deposition of oxalate in the blood, bones, skin, heart and retina.
All 13 participants included in the interim efficacy analysis of PHYOX3 and with PH1 and three with PH2 who had reached the day 180 time point, receiving monthly nedosiran, achieved the desired outcome of urinary oxalate excretion normalization or near normalization at one or more time points. This is a key measure for PH. Normal Uox was defined in the study protocol as less than 0.46 millimoles or 1.73 meter squares per 24 hours, while near normal was defined as more than or equal to 0.46 to less than 0.6 millimoles per 1.73 meter squares for 24 hours. We were pleased to see that 12 of 13 participants achieved normal Uox excretions at one or more visits through day 180 while the one PH2 participant that did not reach normal Uox did achieve a near-normal level. For people with PH, durable reduction in urinary oxalate excretion to a normal or near-normal range is critical to potentially change disease course and improve quality of life. These people are required to hyper hydrate in order to manage their oxalate load.
Notably, seven PH1 and one PH2 participant had normalized Uox secretion on at least three consecutive visits to day 180, meeting protocol-defined eligibility criteria for reducing their daily fluid intake. Nedosiran was generally well tolerated and no serious safety concerns were identified in this ongoing study. We are encouraged by these results in PH1 and PH2 participants and look forward to completing our double-blind, placebo-controlled pivotal trial sometime in the first half of next year and having top line data sometime midyear. We currently have alignment with the FDA on a path to full approval for PH1 and PH2, for which we plan to submit an NDA in Q3 of next year.
We are in dialogue around the path to approval for PH3, which is the most recently identified, the least understood and perhaps the most underdiagnosed of the PH subtypes. As such, we're conducting our PHYOX OBX natural history study to establish disease progression and outcomes for people with PH3 such as stone formation rate. We also plan to begin dosing PH3 patients in our PHYOX4 study this quarter. As such, we initially plan to seek accelerated approval for PH3 when we file our NDA next year. In parallel, we have started or will initiate in the near term additional supportive studies of nedosiran in our PHYOX programs, including the renal study that we anticipate starting in quarter one of next year.
Turning to our hepatitis B virus program, which is partnered with Roche. We announced positive interim results from our Phase I trial of RG6346 in participants with chronic hepatitis B in August. The ongoing study in adults is comprised of three groups: Group A, our healthy volunteers; Group B, participants with newly diagnosed and naive to NUC antiviral therapy, received a single three milligram per kilo dose of RG6346; and Group C participants concurrently receiving NUC antiviral therapy who are randomized to receive four monthly injections of one of three doses of RG6346 at 1.3, 3.0 or 6.0 milligrams per kilogram. Group C participants that completed the day 112 treatment period and achieved a greater than one log reduction in hepatitis B surface antigen were eligible to continue into an extended follow-up observation period.
As of the data cutoff of June 25, nine of N Group C participants who completed Day 112 and achieved a greater than equal to one log reduction in hepatitis B surface antigen and entered the extended follow-up period. This included two of four participants in the group C six milligrams per kilo cohort as two had not yet reached day 112. We're pleased to see deep and sustained reductions in hepatitis B surface antigen across the 1.5, 3.0 and the available participant data in six milligrams per kilogram group C cohorts. Among Group C participants who completed the day 112 treatment period, the maximum hepatitis B surface antigen reduction from baseline was 2.7 logs in the participant in the three milligram per kilo cohort.
A robust mean maximal S antigen reduction of 1.88 logs was measured in the three milligram per kilogram cohort. Notably, the longest treated participated study at the time of analysis have reached day 392 with 2.21 log hepatitis B surface antigen reduction. I'd like to emphasize the durable response seen from this interim data because we believe achieving functional cures will required development of a finite duration therapeutic regimen that leads to a sustained loss of circulating hepatitis B surface antigen and viral DNA levels in HBV patients. Our preclinical models predicted that we could produce a siRNA therapy with a strong reduction in hepatitis B surface antigen and a long and stable duration of activity by sparing the hepatitis B virus' X gene.
In Group B, after receiving one three-milligram per kilogram dose of RG6346, three of six NUC naive participants experienced transient ALT elevations or flares concomitant with viral marker reductions and preserved liver function during the treatment period. These are suggestive of beneficial treatment-induced immune-mediated responses to HBV as prespecified in our clinical trial protocol. These early interim data from the Phase I study confirm our predictions for RG6346's potential to deliver dual benefits of robust and sustained hepatitis B surface antigen knockdown in patients with chronic HBV. We will present additional follow-up data at the upcoming AASLD meeting, and we look forward to Roche initiating Phase II combination trials with RG6346 with the goal to achieve a functional cure in chronic hepatitis B patients.
As Doug mentioned at the outset of our call, the next 12 months will be marked by progress for Dicerna through advancement of our own internal pipeline as well as through our partnerships. Our work in A1AT continues to progress as expected, but in the first quarter, we plan to select one of our two programs for A1AT liver disease to advance to Phase II. We also plan to announce our next wholly owned program in liver target for a large market indication, which we plan to enter clinical development sometime midyear next year. We anticipate the last patient out in our PHYOX2 pivotal trial of nedosiran in the first half of 2021, with data to follow sometime midyear, and culminating in the planned NDA submission during the third quarter. We are looking forward to these important milestones in the year ahead.
With that, I'd like to turn the call over to our CFO, Doug Pagan, to cover the financials. Doug?
Douglas W. Pagan -- Chief Financial Officer
Thank you, Shree. Now I'd like to walk through the key financial results for the third quarter. For additional details, please refer to our press release outlining financial results and our quarterly report on the Form 10-Q, both issued earlier today. Net loss for the quarter ended September 30, 2020, was $21.8 million or $0.29 per share compared to $30.8 million or $0.45 per share for the same period in 2019. The period-over-period decrease in net loss was driven primarily by higher revenue related to our collaboration programs, which was partially offset by increases in research and development and general and administrative expenses during the quarter. R&D expenses were $54.8 million for the third quarter of 2020 compared to $30.1 million for the same period in 2019.
The change was attributable to a $12.5 million increase in contract research and manufacturing expense, associated with core and collaboration programs and clinical study costs associated with our nedosiran and A1AT trials as well as a $10.7 million increase in employee-related expenses, related to headcount increases throughout the R&D organization to support these programs. G&A expenses were $17 million for the third quarter 2020 compared to $10.6 million for the third quarter of 2019. The change was driven primarily by a $4.6 million increase in employee-related costs including salaries, benefits and stock-based compensation due to increases in headcount necessary to support our growing operations.
We expect overall operating expenses to increase in the coming quarters as we continue to grow headcount to accommodate additional R&D efforts and launch readiness as well as from higher external spend associated with increased activities in our pipeline. During the third quarter of 2020, we recognized $48.9 million in revenue compared to $8 million in the prior year period. The change was primarily attributable to the additions of the Roche and Novo collaboration agreements as well as increased activities for the Alexion and Lilly collaborations. Most of the collaboration revenue will be recognized as services are provided using a cost-to-cost measure of progress method.
In other words, the transaction price, which includes upfront payments, and in some cases, equity premia and certain contingent milestone payments is recognized for each individual partnership based on the percentage complete of ongoing work rather than on a straight-line basis. As of September 30, 2020, we had approximately $200 million of current deferred revenue that we expect to recognize over the next four quarters and approximately $269 million expected to be recognized over the following several years. As of September 30, 2020, we had $609.9 million in cash, cash equivalents and also maturity investments compared to $348.9 million as of December 31, 2019.
We continue to believe that our current cash, cash equivalents and held-to-maturity investments and expected receipts for milestones achieved and other payments from our existing collaboration arrangements will be sufficient to execute our current operating plan into 2023, which includes our expectations to advance nedosiran through pivotal development, regulatory filing and commercial launch and to support all R&D activities for the current pipeline programs, both collaboration and internal.
This estimate assumes no funding from new collaboration arrangements or from external financing events and no significant unanticipated changes in costs or expenses. Included in our current cash runway are more than $100 million in milestone and other payments from existing collaborations anticipated through the end of 2021. These payments represent an important source of proceeds and demonstrate the value these collaboration programs should continue to generate as they mature.
With that, I'd like to open the call for questions.
Questions and Answers:
Operator
[Operator Instructions] We have our first question from the line of Umer Raffat from Evercore. Next in line is Jonathan Miller from Evercore ISI. Your line is now open.
Jonathan Miller -- Evercore ISI -- Analyst
Hey guys, Sorry for the confusion there. I think we must have be on on the other line. I'd like to start with the HBV data. It looks like the AASLD abstract is the same as the R&D day, but you implied that you're going to have updated data from the R&D day in your prepared remarks. Have the final two patients in that six mg per kg cohort finished dosing regimen and they -- will they be in the AASLD final data? And has -- as you implied at the R&D day, have they continued to track a higher level of HBS antigen reduction, lowering the overall average there? The other interesting observation I thought in the R&D day was the long duration of effect that you get on HBS antigen even after dosing cessation, something that you guys mentioned in the prepared remarks as well.
Given the expectation for a limited -- time-limited dosing regimen in eventual practice, how relevant is that long tail of duration when the length of dosing isn't clear? I guess what I mean is insofar as frequency of dosing in a chronic setting isn't likely to be a drag with commercial uptake, how relevant is that long tail?
Douglas M. Fambrough -- President and Chief Executive Officer
Thank you, John. So at this point, we do anticipate that we will have data through day 112 for all the participants in Group C, including the two additional six milligram per kilogram patients for presentation at our oral late-breaker presentation at AASLD. You're going to have to wait for that presentation before we talk about the data. But with respect to the long duration, I think this is a really important point because the longer the treatment period, I think that's likely to correlate with percentage achievement of functional cure and an effective regimen.
And so anything that can be done to extend that period is likely to have correlative beneficial effect on the percentage of patients who achieve functional cure when we identify an effective combo regimen with our collaborators at Roche. So that was something that we sought to maximize and our expiring approach certainly achieves the maximization of that duration in the animal models. And at least these first indications suggest there's translation of that activity over in the patients. We'll have to see over time.
Jonathan Miller -- Evercore ISI -- Analyst
Great. And then on the A1AT program, which you say you'll choose your molecule first quarter next year. What's the bar for taking one program forward versus the other? And what are your expectations for likely sources of differentiation between the two candidates?
Douglas M. Fambrough -- President and Chief Executive Officer
Sure. I mean we know how to make a very good clinical candidate, and so do our colleagues at Alnylam. And so I believe that there's no bad choice here between the two molecules, but it only makes sense to take one forward. So we will be comparing both the human healthy volunteer data collected from the Alnylam molecule and that we're collecting from our molecule as well as details from the nonclinical programs in rodents and nonhuman primates.
I think that you're looking at a differentiation that's in the details and not at a macro level of a, particularly large magnitude. But it is -- for efficiency, part of the collaboration is to combine the programs and take one forward. We need to choose one, but it is from two very good options. Thanks, John.
Jonathan Miller -- Evercore ISI -- Analyst
Thank you.
Operator
Next is Mani Foroohar from SVB Leerink. Your line is now open.
Mani Foroohar -- SVB Leerink -- Analyst
Hi guys, thanks for taking the question. One quick follow up on the earlier question about A1AT. When you presumably pick one of the two assets to move forward, what metrics and data could we potentially expect? Would it be just limit? Would it be knockdown, depth of lockdown, depth of follow up, just give us a little bit of a sense of exactly what information we get from that NHP and health volunteers from the asset you chose. And then I guess on a more of a financial question, I think I may have misheard you.
You mentioned that you anticipate about $100 million of incremental cash in the door. I thought it was during between now and the end of 2021 from our existing collaborations, confirming that's accurate and that, that number is based on assets entering the clinic, etc. hitting early milestones or is that something that still has a little bit of clinical risk, you need to see some clinical data to trigger some of that $100 million? Just trying to get error bars around that number.
Douglas M. Fambrough -- President and Chief Executive Officer
Okay, Mani. On A1AT, I think after we make the choice, we'll be sharing the human healthy volunteer data from the molecule we choose, and that will have the depth of duration, depth and duration associated with that. I doubt we'll go deeply into the preclinical data at that point. It's a clinical molecule. And I don't think we'll be breaking out how we made the choice. With respect to the $100 million, Doug, would you like to take that?
Douglas W. Pagan -- Chief Financial Officer
Sure. Thanks. So the $100 million is a combination of different payments, milestones that are -- who are contingent from the upfront milestones that are for proceeding through research and into early clinical starts as well as reimbursements. So the $100 million, we feel confident about putting that number out. And of course, we'll update as we proceed through the quarters.
Douglas M. Fambrough -- President and Chief Executive Officer
Great. That's what we help I have a lot of our analysts on the call. So I'll hop back in the queue.
Mani Foroohar -- SVB Leerink -- Analyst
Thanks.
Operator
Next is Yigal Nochomovitz from Citigroup. Your line is now open.
Yigal Nochomovitz -- Citigroup -- Analyst
Great, thank you very much. Thanks for taking the questions. Doug, you made several rather interesting comments with respect to the opportunity for PH3 that it's an underdiagnosed population and also that you plan to seek accelerated approval. Could you just clarify, therefore, when you file the NDA for PH1 and PH2, is PH3 going to be part of that? Or is it going to be its own filing? And then also, what has the FDA communicated to you with respect to how many PH3 patients you need in order to satisfy the agency for getting an accelerated approval for PH3?
Shreeram Aradhye -- Executive Vice President and Chief Medical Officer
Yes. Yaron (sic) Yigal, this is Shree. I think that we have complete clarity on PH1 and PH2, where we know that we have agreement that reductions in urinary oxalate will serve as the marker on the basis of which we will get approval for PH1 and PH2. Because PH3 has been only recently described about a decade ago, and because the natural history of PH3 is perhaps less well understood at this point, we have had to make the effort to launch our natural history study to demonstrate that these patients experience the same burden that people with other types of PH2. In fact, if you happen to have called into the OHF meeting where a PH3 patient was describing their significant experience with recurrent kidney stones and wondering how they could get access to treatments.
So for us, it's a combination of demonstrating the burden of the disease combined with our ability to demonstrate that nedosiran lowers urinary oxalate levels in PH3, which based on our mechanism of action, we're confident that we can show. We are launching a study PHYOX4 dedicated to demonstrating that. And it's the combination of that information will -- that will be the basis of our submissions. I think the details of it are still under discussion. But suffice it to say that what we're guiding is that we expect that to be of the form of an accelerated approval because we expect that additional information beyond what's in the core file will be required to be determined.
Yigal Nochomovitz -- Citigroup -- Analyst
Okay. Got it. And with respect to your -- some of the other earlier-stage programs that you've outlined in CNS, skeletal muscle and adipose, at this point, can you provide any more details as far as what diseases or disorders that you might be pursuing for those three tissue types?
Douglas M. Fambrough -- President and Chief Executive Officer
Yigal, we are going to play our cards pretty close to our chests, given the competitive nature of the field. But I would note that in our collaboration with Lilly, where we are collaborating on neurodegeneration and pain and thus CNS delivery, that deal provides us to independently advance certain orphan disease indications. And so for our, I'd say our first neuro wholly owned program, I would expect that to be in the orphan disease space.
Yigal Nochomovitz -- Citigroup -- Analyst
Okay. And then just one final question, just on that $100 million again from the existing collaborations between now and the end of 2021. Can you provide any color as far as how that's going to be distributed over the next four or five quarters?
Douglas M. Fambrough -- President and Chief Executive Officer
So we really haven't been planning to give guidance about the quarterly distribution at this point. I'd say this, though, it is made up of a bunch of smaller numbers. So it's not as if it's one payment.
Yigal Nochomovitz -- Citigroup -- Analyst
Okay, that's helpful. Thank you.
Operator
Next is Yaron Werber from Cowen. Your line is now open.
Brendan -- Cowen -- Analyst
Hi guys, This is Brendan on for Yaron. Congrats on the update. Just a couple of quick ones from us. There's been some talk and questions about it already. I just kind of wanted to get your direct perspective here. Looking how you're kind of thinking about your drug positions in -- the HBV drugs I'm talking about, kind of, say, versus the J&J drug from an efficacy or maybe administration perspective.
Do you think in this duration, our dosing is really what sets it apart here and that's kind of key for us to drill into? And kind of how you're thinking about use and uptake shaking out among infected patients based on what we have so far data-wise? And then I just wanted to check in about the Lilly partner drug. What you can tell us about that program for next year as that kind of moves into the clinic over the next couple of months?
Douglas M. Fambrough -- President and Chief Executive Officer
Brendan, so with respect to HBV and our program, we do think that, ultimately, the potential for increased duration of action in humans is an important differentiating factor. However, we, and I think, pretty much everyone else in the field anticipates a combination therapy of 3, maybe even four agents, and different combinations of different agents with different mechanisms of action are likely to provide a lot of differentiation with respect to activity, perhaps even determining the winners and losers in the space.
So I wouldn't put too much emphasis on the duration of effect. It's a marginal positive, but I don't think it by itself is going to allow one to call what would be most successful or not. If it was RNAi alone, I think, in that case, I'd say this is really powerful. But we'll have to see how the combination partners interact with the RNAi and the NUCs and the rates at which functional cures are generated. And I've forgotten your second question, Brendan.
Brendan -- Cowen -- Analyst
It was just about the Lilly program, the IND later this year.
Douglas M. Fambrough -- President and Chief Executive Officer
Not a lot I can say other than it is a GalXC liver-targeted molecule. And with those GalXC molecules, we're collaborating in the cardiometabolic space. So it is a molecule from that, the targets to gene in that therapeutic area.
Brendan -- Cowen -- Analyst
Okay, thanks very much guys.
Operator
Next is Stephen Willey from Stifel. Your line is now open.
Stephen Willey -- Stifel -- Analyst
Yeah, good afternoon and thanks for taking the questions. So, maybe just kind of, I guess, a bigger picture question on A1AT. I know you've had some regulatory interactions with FDA and just kind of curious as to their perspective on the potential for silencers, of RNA silencers, to potentially exacerbate the lung condition of these patients?
And I guess, to what extent, if any, the agency believes that there might be some markers that kind of that -- that can be evaluated during, I guess, later-stage clinical trials to kind of rule this out, right? Because it seems like within the A1AT space, there's not great markers of lung function to support improvement of pulmonary disease. So I'm just kind of wondering if the agency believes that there's any markers to show that there's no exacerbation of pulmonary disease as well.
Douglas M. Fambrough -- President and Chief Executive Officer
Let me start and see if Shree has something to add there. I mean A1AT is a little unusual in that we know the target we're silencing when not present over the course of a lifetime, causes a lung problem, at least in a fraction of the patients, particularly those exposed to chronic lung irritation, such as by smoking. And so it is certainly a salient issue for the FDA to get comfort on. Having said that, there is a pretty general view in the KOL field, and the FDA respects it that a late in life treatment for liver disease is likely to have a positive cost benefit ratio and is unlikely to cause by itself at that point already have a lung problem, probably unlikely to cause one.
And so of course, we are proceeding and they've let other programs proceed in this space. We have needed to be evaluating some of the standard markers you would think of, FEV, DLCO, and we are not yet finalized on a late-stage protocol. Anything more to add on that, Shree?
Shreeram Aradhye -- Executive Vice President and Chief Medical Officer
No, I think it's the balance of making sure that we design the protocol in a manner that picks the right population. It is clear that targeting people who have liver disease of a certain severity will be important and then the duration of therapy and monitoring using available tools will likely inform us as to what an answer to the question you ask might be, but it'll certainly have to be a focus of the development program. And for me, that's what makes this exciting.
Stephen Willey -- Stifel -- Analyst
I guess is it safe to assume then that the agency believes that in -- at some given level of disease severity of the liver then the risk-reward benefit is applicable to all patients and perhaps maybe at a lower severity of disease, it's maybe only applicable to an older patient demographic. Is that a fair way to think about it?
Shreeram Aradhye -- Executive Vice President and Chief Medical Officer
I think that would be making the feedback too precise. I would say to you that the fact that this is a clear area of discussion, the conversations about precisely what that balance looks like will only get finalized in the context of the actual Phase II protocol, at least for us. So I would pause it saying that you've identified an important area, but I won't be able to give you guidance on a precise commitment or specific agreement with the FDA on it yet.
Stephen Willey -- Stifel -- Analyst
Understood. I appreciate the color. Thank you.
Shreeram Aradhye -- Executive Vice President and Chief Medical Officer
Thanks, Steve
Operator
Next question is from the line of Luca Issi from RBC Capital Royal Bank. Your line is now open.
Luca Issi -- RBC Capital Royal Bank -- Analyst
Well if there I think. Thank you for taking my question and Congrats on the progress. Two quick ones for me. One on A1AT, can you maybe comment on how the recent success of Arrowhead and almost concurrent setback for Vertex changes your strategy for your own program, if it does? And then two, maybe if you can give us any update on the potential partnership for PH ex U.S.?
Douglas M. Fambrough -- President and Chief Executive Officer
Luca, so let me start with Arrowhead's data in A1AT and say that we think it is excellent data. It's a small data set, what we know so far. It looks very encouraging, and I look forward to their additional data presented at AASLD. I'll also say is entirely along the lines of what we expect. We expect this to be an effective mechanism for treatment of the liver. So it's not surprising to us that so many positive marker movements we're seeing in that small Phase II population. The issues associated with Vertex are obviously concerning. Certainly, the 814 programs, it's not going to move forward.
And I don't believe much is known about the source of the liver tox signal that was seen in that program, which means that it cannot be ruled out, that it's somehow due to the mechanism of action of a corrector acting on the globules of a misfolded protein, which, of course, would speak to a risk profile across that whole class. So I think there's a -- it has certainly changed the outlook or risk profile associated with correctors. We'll just have to see how the subsequent data pans out. I don't think either one really changes our strategy, which is to focus on providing a very effective and what we believe will be a quite safe way to address the accumulation of misfolded protein and thereby address the liver disease associated with A1AT.
Luca Issi -- RBC Capital Royal Bank -- Analyst
Terrific. And maybe do you have any update on the potential partnership for PH, maybe ex U.S. or?
Douglas M. Fambrough -- President and Chief Executive Officer
Yes. Luca, I wish I could give you an update there. We are in active discussions, and I think our update is going to be announcing that we've signed something. And when that happens, we'll make that announcement.
Luca Issi -- RBC Capital Royal Bank -- Analyst
Thank you so much.
Operator
Next is from the line of Ed Arce from H.C. Wainwright & Co. Your line is now open.
Ed Arce -- H.C. Wainwright & Co -- Analyst
Great, thanks for taking my questions. So first one on your PH program. As you noted in the interim data from last month, 12 out of the 13 achieved normal in your PHYOX3 trial and the other one near-normal. And that was noted on one or more visits. So I'm wondering if you can speak to -- and this might be either for Doug or Shreeram, what proportion of those patients achieved those levels at more than one visit? And then I guess the other related question is how relevant is that to have multiple points relative to, say, at the end or the conclusion of the study?
Shreeram Aradhye -- Executive Vice President and Chief Medical Officer
So let me start with the end first, which is that I think the primary hyperoxaluria is the kind of disease where focusing on a single time point at the end of a treatment period, while relevant is not necessarily the way we should look at it, which is how our pivotal analysis plans are designed, which is to look at multiple time points. And in this data set that we presented at the ASN, we were excited to note that eight out of the 13 subjects had actually achieved normal or near-normal levels at three consecutive time points indicating that you have achieved a durable reduction at a sustained.
And then if you think about sort of an integrated exposure to oxalate at the kidney, brought it into the normal range in a manner that the protocol specified made patients eligible for being considered to change the hyperhydration that they normally have to be on as a means of reducing their risk of stone formation and supporting their oxalate excretion. So we were very encouraged to see those results in this long term -- in this open-label follow-up from PHYOX3, and we look forward to looking at the data from the pivotal trial in a way that looks at information data beyond day 90 to 180. So that's an important observation, Ed.
Douglas M. Fambrough -- President and Chief Executive Officer
Yes. Ed, I want to stress the importance of that. The oxalate level is a continuous variable, but there's a black and white line you cross from either you have to continue disease management and have the great disruption to your life associated with it or you get to wean off disease management. And it's only by achieving sustained normalization that you get to do that. We have achieved in this open-label trial to date an average oxalate level of all our PH1 patients taken together in the normal range. And as Shree was just indicating seven of 10 of the PH1s with three consecutive measurements that in a protocol-defined fashion allow initiation of a step-down in hyperhydration.
So I think at that level, whether you're normal or near-normal and whether it's sustained and whether you see it at each measurement, that matters a lot in this space. And that marginal knockdown at the bottom to get you to normal is a really big deal in this field. And I am very encouraged by our data and what it says is likely what our pivotal data is, since it's the same patient population, same enrollment criteria and it's the same dosing regimen. So it's -- thanks for bringing that out, because it is a really key point in thinking about what the dynamics of this treatment of this patient population is going to be.
Ed Arce -- H.C. Wainwright & Co -- Analyst
Right. Okay. Great. Then one question just to get your thoughts. And again, this is open to both. Noticed today another player in the space for hep B announced a study where patients have their therapy discontinued for a certain time and then announced today that there were -- that they did not achieve meaningful SBR in that. I'm wondering, given -- and I don't know, I guess if you had the time to see that, it just came out. But wondering your thoughts on how that impacts sort of finite treatment and sort of the paradigm of that in HBV, if it does, in any way? Or if you view that more particular to core inhibitors? Or just your general thoughts on that.
Douglas M. Fambrough -- President and Chief Executive Officer
So Ed, I'm sorry, I probably watch an election results instead of looking at the HPV trial results. So I'm not familiar with the specific study that you're talking about. We think it's likely that a combination approach is going to be required and have a pretty high degree of confidence that you're going to need an agent in that combination that specifically addresses the S antigen in a dramatic way. And right now, RNAi is, I believe, the only mechanism of action that brings that into a combination.
So I'm really particularly optimistic about combinations with an RNAi involved, I think different mechanisms should be explored, particularly those involving immunoactive elements. And I'm not very sanguine about the combinations that don't have that element in it. So to the extent this may have been a trial without that element, I think that it's a probability of success may have been fairly low at the outset.
Ed Arce -- H.C. Wainwright & Co -- Analyst
Okay. That's helpful. Then just one last question, if I may. You had mentioned in your prepared remarks, I think this was Shree, who said mid-2021, the announcement in a large indication, some new program. I'm not sure if I got all the details there if you could just remind us of that.
Douglas M. Fambrough -- President and Chief Executive Officer
We will be bringing a Dicerna wholly owned molecule into the clinic approximately midyear. That is GalXY liver-directed molecule. It is a genetically validated target against a large population, very prevalent indication. And sometime before it goes into the clinic, we'll announce what it is.
Ed Arce -- H.C. Wainwright & Co -- Analyst
Thank you.
Operator
Next question is from the line of Madhu Kumar from Baird. Your line is now open.
Rob -- Baird -- Analyst
This is Rob on for me do. Thanks for taking my question. Congrats on the progress. First off, beyond urinary oxalate levels, do you plan to assess impacts on kidney stone formation over time in PHYOX2 and PHYOX3? And also for the A1AT programs, what have you learned from the initial competitor data for RNAi against A1AT liver disease? And how does that influence your thoughts on trial in specifically of duration of treatment and potential clinical end points?
Shreeram Aradhye -- Executive Vice President and Chief Medical Officer
I think the -- indeed, the trials that we are doing will evaluate stone event rates, including in the longer-term follow-up that we will continue in PHYOX3. So that's clearly an important element to follow as will we follow estimated GFR changes over time. So that's clearly something that we will do. I think as far as the A1AT programs data are concerned, as Doug said, for us, it's not surprising but very encouraging to see that this mechanism of action, what was expected, which is a meaningful reduction in the four subjects that were reported in their A1AT levels in the serum in the liver with concordant changes in some markers related to liver function as well as biomarkers related to fibrosis like on FibroScan or Pro-C3, we look forward to seeing additional data.
But at this point in time, in terms of the impact on how that will inform our Phase II designs, I think I'll simply say that these are all the elements that will need to be covered in any meaningful Phase II in a controlled setting. It was encouraging to see that at least directional changes seen relatively early at about -- I think it was 24 weeks was an encouraging thing to see. But the design of our Phase II studies is still under evolution.
Rob -- Baird -- Analyst
All right, thank you.
Operator
Next is from the line of Mayank Mamtani from B. Riley Financial. Your line is now open.
Wayne -- B. Riley Financial -- Analyst
Hi, This is Wayne for Mayank. Congrats on the progress. And thanks for taking our question. So we just have a quick one on the filed studies. Given the positive open-label multi-dose data you guys provided on the ASN, we just want to see if you guys can provide any more additional colors on how this can derisking the PHYOX2 study? And how do you see new dose in terms of a competitive landscape, given there will be a competitor entering the PH1 market 12 to 18 months ahead of you?
Shreeram Aradhye -- Executive Vice President and Chief Medical Officer
Yes. I mean I think for us, the data we presented are a very important harbinger of what we can expect to see in our pivotal study, which is why we talked about looking at data beyond day 60 and then all the way through 180. And the fact that essentially, 12 subjects achieved normal levels and one subject near-normal levels out of the 13 that we reported is very encouraging to indicate what we might expect in our pivotal study. We see this as very robust effects, not undurable and are quite aligned with the analysis plan that we have for our pivotal study. So I'm very excited to see those data and what they mean to our pivotal Phase II study. I think from the perspective of competition that you have...
Douglas M. Fambrough -- President and Chief Executive Officer
Sure. We saw in our PH1 patients that across the set, the average oxalate level was in the normal zone. And that, I believe, should it be a similar result in PHYOX2 and that would be the expectation, would give us a very competitive profile on the most important parameter, oxalate reduction and more to the point oxalate reduction into the normal range for patients. So we're very optimistic that our nedosiran will be a very competitive product in PH1.
We have decided to dose the drug differently. We haven't discussed this today, and it hasn't come up in a question, but we have formulated the product as -- to launch with the prefilled syringe for self-administration on a monthly basis. This is a very robust dosing schedule that gives the most effective knockdown. It also was robust in the sense that if there was a problem or missed dose or something like that, that it would not have any rebound, which is not true.
If you miss a quarterly dose, you should expect to see some rebound over a six-month period. And also in the context of normalizing the life experience of a PH patient and allows them once a month, small subcutaneous injection, they don't have to go to the physician. They have to interact with the healthcare provider, fully autonomous, and we think the maximum normalization on a very intuitive, easy-to-remember monthly schedule. So I think all in all, that describes a profile that we believe will be very compelling in a market that will continue to grow with increased diagnosis over many years. And of course, there is the PH2 market and the PH3 market for which we are not aware of a competitive product that has anything like this kind of activity. So I think with those elements altogether, this is a very compelling commercial opportunity for us.
Wayne -- B. Riley Financial -- Analyst
Great, thank you so much.
Operator
[Operator Instructions] No further questions, please continue.
Douglas M. Fambrough -- President and Chief Executive Officer
Well, thank you, operator. We are really excited about what is in store at Dicerna over the next 12 months and beyond. By this time next year, we expect to have an NDA submitted for nedosiran. We also expect to have an ongoing Phase II trial in A1AT liver disease and a new internal GalXC candidate in Phase I development for a large market indication.
Over a five-year horizon, we have an active plan to expand our core pipeline across multiple tissue types and anticipate a myriad of GalXY partnered programs to move into clinical development. With a strong balance sheet in place, we move forward with confidence. Thank you all for joining us, and have a good evening.
Operator
[Operator Closing Remarks].
Duration: 56 minutes
Call participants:
Lauren Stival -- Head of Investor Relations
Douglas M. Fambrough -- President and Chief Executive Officer
Shreeram Aradhye -- Executive Vice President and Chief Medical Officer
Douglas W. Pagan -- Chief Financial Officer
Jonathan Miller -- Evercore ISI -- Analyst
Mani Foroohar -- SVB Leerink -- Analyst
Yigal Nochomovitz -- Citigroup -- Analyst
Brendan -- Cowen -- Analyst
Stephen Willey -- Stifel -- Analyst
Luca Issi -- RBC Capital Royal Bank -- Analyst
Ed Arce -- H.C. Wainwright & Co -- Analyst
Rob -- Baird -- Analyst
Wayne -- B. Riley Financial -- Analyst
