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Dicerna Pharmaceuticals Inc (NASDAQ:DRNA)
Q4 2020 Earnings Call
Feb 25, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Dicerna Pharmaceuticals Full year 2020 Earnings Conference Call. As a reminder, this conference is being recorded at the company's request. I will now turn the call over to your host, Ms. Lauren Stival, Senior Director of Investor Relations at Dicerna. Please go ahead.

Lauren Stival -- Senior Director of Investor Relations

Thank you, operator. Good afternoon, everyone, and thank you for joining us to review Dicerna's full year 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 the call is completed. Speaking on today's call will be Dicerna's President and CEO, Doug Fambrough, who will review our 2020 progress, provide updates on our collaboration agreements and introduce our newest internal development program. Our Chief Medical Officer, Shreeram Aradhye, will discuss upcoming clinical regulatory milestones; and our Chief Financial Officer, Doug Pagan, will review our full year 2020 financials. We also have Jim Weissman, our Chief Operating Officer; Rob Ciappenelli, our Chief Commercial Officer; and Bob Brown, our Chief Scientific Officer available today to address questions during the Q&A session. Following our remarks, we'll open the line up for your questions. I'd like to remind listeners that management may make forward-looking statements on today's call pertaining to the company's finances business and operations, including the discovery, development and commercialization of our product candidates and technology platforms. And the therapeutic potential thereof, the success of our collaboration and any potential future collaborations. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. risks and uncertainties include those relating to our preclinical research and clinical programs and other risks identified under the heading Risk Factors, including our most recent Form 10-Q and Form 10-K, which will be filed with the SEC following this call. 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, III, Ph.D. -- President and Chief Executive Officer

Thank you, Lauren. Good afternoon, everyone, and thank you for joining us. 2020 was a year of success and maturation for Dicerna, a year of multiple critical and collaborative successes capped by completion of enrollment in the company's first pivotal trial, a trial that will set the stage for our first NDA submission as a company later this year. These successes were matched by strong momentum behind our pipeline building and discovery research efforts for which we presented for the first time, data supporting expansion into multiple new tissues beyond the liver, which unlock multiple potential new disease areas for future pipeline growth. Looking forward, we see 2021 as a year of accelerated pipeline growth as well as corporate maturation toward our goal to emerge as a fully integrated commercial entity in 2022. As a part of our internal pipeline growth efforts, which will be a key area of focus for us in the coming years, we announced today our fourth internal development program for alcohol use disorder, which is expected the clinic in the third quarter of this year. With $568 million in cash and marketable securities as of December 31, 2020, and a strong payment stream from our existing collaborations and the potential to access other nondilutive sources of capital, including monetization of a royalty stream we own on a non Dicerna product and our planned ex U.S. commercial partnership for nedosiran, we have the resources to fund our steady growth trajectory, including the planned launch of nedosiran next year. And so it is that our successes in 2020 has set us up for exciting new developments in the coming years. Some of the most notable of these successes were the positive interim clinical data readouts. First, from our open-label PHYOX3 extension trial of nedosiran, which carries essentially the same enrollment criteria and monthly treatment regimen as our pivotal PHYOX2 clinical trial. As a reminder, we saw 100% of PH1 patients reach normal urinary oxalate measures at one or more time points in the interim analysis of PHYOX3, 70% of them had at least three consecutive normal measurements.

With an overall mean urinary oxalate across all PH1 and PH2 patients at day 180 of 0.44 millimole per body surface area per day which is in the normal range as defined by the study protocol. We are pleased with nedosiran's overall profile to date in PHYOX3, particularly within the PH type one population. We also observed in study strong activity PH type two patients, with two of three patients reaching normalization at one or more time points and wherenever has the potential to be the only RNAi based therapeutic option. Indeed, we believe these data exceed the bar we need in order to have a highly competitive product. Of course, as well, we believe we have the potential for a best-in-class profile for treating all three types of PH. We look forward to top line data from the pivotal PHYOX2 trial about midyear. As it relates to PH3, we have initiated our PHYOX4 single-dose study and anticipate data around mid year. Our plan still remains to include PHYOX4 data and early data from our natural history study in our NDA submission in pursuit of an accelerated approval. Both PH2 and PH3 remain unaddressed with current therapies, and we plan to see priority review pending data as the first to address the needs of these patients. In addition to our positive dose or from the PHYOX3 study. We presented exciting new Phase Ib preliminary efficacy data for RG6346 in a study of patients with chronic hepatitis B infection. RG6346 is our proprietary GalXC molecule that knocks down specific genes expressed by the hepatitis B virus, most notably hepatitis B surface antigen. These data were first presented at our R&D Day in August, and additional follow-up data were presented at the 2020 AASLD Scientific Conference in November, showing that treatment with multiple doses of RG6346 induced a deep and sustained mean reduction of hepatitis B surface antigen for up to one year after last dose. The main treatment period for our first three cohorts of the study concluded some time ago.

But the study continues in its extended follow-up period for patients with at least one log or greater reduction of HBS antigen from baseline levels. We are excited by the long duration of HBS suppression induced by RG6346 in nucleoside suppressed HBV patients observed in the Phase I study and RG6346's potential to be complementary with other existing and emerging HBV treatments. Our collaboration partner, Roche, will be including RG6346 in their Phase II adaptive design trial expected to initiate this quarter to assess multiple therapeutic combinations, including different mechanisms, with the goal to identify treatment regimens with the potential to deliver a functional cure. We are optimistic about RG6346's potential as a backbone component of future functional pure combination treatment regimen. As a reminder, Dicerna has the right to opt-in to Co-fund development at the initiation of Phase III that highly enhanced economics in the United States and the potential to co-promote in the U.S. as well. Also in 2020, we presented what we're calling our GalXC-Plus technology which extend our RNAi capabilities to tissues beyond the liver, including the central nervous system, muscle tissue and adipose tissue. And although we haven't presented data publicly, we're having success in other tissues beyond that, including tumor-associated immune cells. We look forward to rolling out new proprietary pipeline programs utilize GalXC-Plus focused on targets that we believe have a high probability of achieving clinical success and for which we believe RNAi will be the preferred treatment modality. Now before I turn the call over to Shree to discuss our upcoming clinical and regulatory milestones, I would like to take a few minutes to introduce our next wholly owned clinical candidate and development program, DCR-AUD for the treatment of alcohol use disorder, or AUD. This program targets a broad and diverse addressable population that has been highly underserved by current pharmaceutical interventions.

We believe RNAi and the unique constellation of features RNAi potentially brings, including long duration, simple administration, high target specificity and an excellent safety profile. Has the potential to be a game changer for the treatment of alcohol use disorder. DCR-AUD is also a departure from our orphan focus to date. Consistent with our belief that RNAi can be a large market technology, especially when rooted in the science of validated human genetic targets. Our AUD program is a perfect reflection this where the target is aldehyde dehydrogenase two or ALDH2. ALDH2 is a key liver enzyme involved in the metabolic breakdown pathway of alcohol. Millions of people live perfectly healthy lives worldwide and carry naturally occurring ALDH2 mutation. These mutations cause alcohol intolerance as unsurprisingly, rates of alcohol use order among this population are incredibly low. When used as an adjunct to behavioral therapy, we believe that our liver-specific DCR-AUD could result in substantial improvement in treatment outcomes for AUD with the profile that may be attractive to both healthcare providers and people with AUD and which could be highly differentiated from any current treatment option. Historically, this has been a challenging market, and we're well aware of that. But historically, there has never been a treatment option for AUD that delivers good efficacy with no side effects and with a long duration of action simple administration, which we believe we will achieve with DCR-AUD. Like multiple other markets, it takes the right product, and we believe DCR-AUD is the right product for AUD. We are excited by the prospect of DCR-AUD first-line pharmacotherapy that is complementary to and to be used in conjunction with behavioral and other approaches to help people with AUD reach their treatment goals. I'll now let Shree touch on the program in more detail. And then he'll also outline our upcoming clinical and regulatory milestones for 2021. We provide an even deeper look at our DCR-AUD program, we'll be hosting a live webinar next month. So look out for that announcement. Shree?

Shreeram Aradhye M.D -- Executive Vice President and Chief Medical Officer

Thank you, Doug, and thank you all for joining us. Alcohol use disorder is a complex behavioral disorder with huge unmet need. It is a chronic disorder that is associated with a range of medical, psychological, social, economic and personal problems, and it is one of the leading causes of preventable death in the United States. It is estimated that 14 million adults in the U.S. experienced AUD. Unfortunately, AUD often goes undiagnosed and untreated, in part due to limited treatment options and willingness to engage in treatment. In fact, it is estimated that fewer than 10% of adults in the U.S. with AUD seek held for treatment and that a similarly low percentage of those treated actually received pharmacotherapy. Available treatments have generally shown only a modest treatment benefit in the reduction of drinking levels or maintenance with abstinence with poor patient compliance being a contributing factor. The pathway to AUD recovery is a highly individual experience and each person's journey is unique. We see a critical need and opportunity for a safe, targeted easy to use pharmaceutical therapy and can be combined with behavioral interventions to help individuals to meet their treatment goals, including reduction in levels of drinking and our absence. Empirically, ALDH2 heterozygote experience alcohol intolerance at moderate levels of alcohol intake and overall have a lower prevalence of alcohol misuse compared with unaffected individuals. Using GalXC technology, DCR-AUD is designed to deliver liver-specific knockdown of ALDH2, resulting in intolerance of alcohol in moderate amounts. This approach differs from older small molecule therapies that result in nonspecific inhibition of hydrogenous enzyme activity and other biological processes in the body. In preclinical mouse models, liver-specific lockdown of the ALDH2 gene and used an intermediate alcohol in followed in phenotype that appears to correlate with reduction in heavy alcohol intake. In general, we envisioned that DCR-AUD to provide a functional guardrail of real-time physiological feedback that may help dose with AUD, avoid ample levels of alcohol intake and give them the time and space they need to pursue their recovery.

With the safety profile of our GalXC platform shown in our other development programs to date, including monthly or even less frequent dosing and never specific target knockdown, we believe DCR-AUD could be a novel, convenient and safe approach to treating AUD that may expand the reach of pharmacological therapy to many more people who could benefit from it. We plan to file an IND for DCR-AUD midyear and enter the clinic shortly thereafter. Our Phase I study plans to enroll healthy volunteers and will include an assessment of low dose alcohol interactions to confirm pharmacodynamics, safety and the target profile that is consistent with preclinical bonds of liver-specific ALDH2 knockdown, and we observe alcohol interactions in humans with naturally occurring ALDH2 deficiency. We are confident that our approach will generate important go no hope information from our Phase I program that will be directly translated to AUD. We are very enthusiastic about this new program and plan to close an additional call with a guest therapeutic expert Dr. Henry later in March to discuss DCR-AUD in more detail, including our initial study plans, the challenges of treating AUD and its human and societal costs, and importantly, the opportunities for improvement in what is a complex treatment landscape for AUD. Dr. Kranzler is a Professor of Psychiatry and Director of the Seneca Studies with Addiction at the University of Pennsylvania's Perelman School of Medicine. His research focuses on the genetics and pharmacological treatment of subsequent dependence with a particular emphasis on precision addiction medicine, and we are very excited that he has agreed to join us to discuss our efforts in developing DCR-AUD for alcohol use disorder. Now I'll take a moment to update you on our alpha-1 antitrypsin deficiency associated liver disease program. As many of you know, I survived and turned into an agreement last April to collaborate on our Phase I clinical candidates in development. At the outset of 2021, following careful evaluation of all to date, for both programs, we announced that we have selected the BI serval molecule for further development in Phase II.

Both molecules were well-designed and demonstrated competitive target knockdown of A1AT protein but ultimately, we chose to We plan to release initial interim Phase I data sometime midyear and additional results at an appropriate medical meeting later in 2021. A1AT deficiency associated liver disease, or AATLD is caused by the production of abnormal A1AT protein by the of the gene and may lead to chronic liver disease, culminating in cirrhosis liver failure or cancer. No treatments exist for AATLD other than liver transplantation. It has estimated that 120,000 individuals in Europe and 63,000 individuals in the U.S. carry the Zz genotype, but that about 10% are diagnosed with a AATLD, representing a significant opportunity for increased identification, diagnosis and treatment of individuals with this disease. We are on track to initiate our Phase II study in patients in the first half of this year. This is a multiple dose randomized placebo-controlled double-blind study of to evaluate the safety, tolerability, PK and PD in adult patients with AATLD. The study will compare to placebo and cohorts of six and 12 months in duration. As part of this trial, we will evaluate liver histology and a variety of exploratory biomarkers to assess the effects of on AAT liver disease activity. We will be discussing with regulators the optimal endpoint for a pivotal trial based on the data collected from our Phase II study. Finally, for the nedosiran, as Ted mentioned, we are on track to receive top line data midyear or our nedosiran digital trial, for which we will be looking to achieve our primary endpoint, demonstrating a greater percentage reduction in urinary oxalate from baseline with nedosiran versus placebo based on the reduction in 24-hour EWOKS from baseline using an area under the curve between day 90 and day 180. Our ongoing open-label extension study has shown promising liver to date in both PH1 and PH2 patients, where we saw a 70% mean maximum reduction in urinary oxalate at day 180 for all patients in the study. As part of our overall PHYOX development program, we have also begun dosing in our PHYOX4 single dose trial of nedosiran to evaluate safety, tolerability and PK/PD in patients with PH3. Our goal is to demonstrate substantial reduction of urinary oxalate in these participants and improve these data along with early data from our natural industry study in PH3 in our NDA submission planned for the third quarter in support of a potential accelerated approval in PH3. As the most recently diagnosed form of PH, less is known to date about disease progression and longer impacts of the disease, should we expect additional work will be needed for full approval. We also plan to initiate the PHYOX7 trial in patients with PH1 or PH2 and disease and the PHYOX8 trial of nedosiran in in the first half of this year. While these data may not be available for inclusion in our initial NDA submission this year, we plan to submit supplemental filings expeditiously following the conclusion of these studies. I'd now like to turn the call back over to Doug Fambrough to touch on progress across our various pharma collaborations. Doug?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Thanks, Shree. We continue to make excellent headway across our collaborative programs. This is another means by which we are expanding our pipeline and expanding the reach of RNAi across therapeutic areas. Our collaboration with Lilly continues to progress. In the fourth quarter of last year and they kicked off their first Phase I study using Dicerna's GalXC technology, targeting ANGPTL3 for the treatment of dyslipidemia. This year, we anticipate an additional IND filing in the second quarter, targeting lipoprotein A or LPA for the treatment of cardiovascular diseases. In addition, we have received formal notification from Lilly that they plan to extend the initial research collaboration term, which is excellent news and speaks to the promise of our RNAi technology. A third clinical candidate has been declared in the collaboration and is in preclinical development, and we're optimistic for the potential of multiple additional development programs beyond these first three, including both liver-targeted and neurodegenerative disease and pain targeted programs. Our development work for Alexion is continuing as planned. And we are pleased to disclose that the first two GalXC candidates are targeting C3 and complement Factor B as we disclosed at the outset of the year. We anticipate delivering IND supporting packages to Alexion in the fourth quarter of 2021 and in the fourth -- first quarter of 2022, respectively, after which Alexion will be responsible for any IND or CTA filings in accordance with our agreement. We have also made rapid progress with our partner, Novo Nordisk, although we don't anticipate initiation of a clinical trial this year for a candidate under the Novo collaboration. A tremendous amount of work has already been done in what is a highly collaborative partnership, and we look forward to additional target selections and clinical candidate selections beyond the first clinical candidate we announced at the beginning of the year. Like the Roche agreement, this is a collaboration in which we maintain opt-in rights to coke on development after Novo has derisked a candidate in Phase I or Phase II development. This represents substantial economic upside potential for Dicerna. And with that, I'd like to turn the call over to our CFO, Doug Pagan, to cover financials. Doug?

Douglas Pagan -- Chief Financial Officer

Thanks, Doug. I'd like to briefly walk through the key financial results for the full year 2020 and direct you to our press release outlining these financial results, which was issued today and to our annual report on Form 10-K, which will be issued following this call. Net loss for the full year 2020 was $112.7 million or $1.52 per share compared to $120.5 million or $1.76 per share for full year 2019. Revenues for the full year 2020 totaled $164.3 million compared to $23.9 million in 2019. The year-over-year increase in revenue recognized is primarily attributable to increased activities and associated costs under the various collaboration agreements. As of December 31, 2020, we had approximately $138.5 million of current deferred revenue which we expect to be recognized over the next 12 months and approximately $336.2 million of noncurrent deferred revenue expected to be recognized over the following several years. Full year R&D expense totaled $205.4 million in 2020 compared to $109.3 million in 2019. The year-over-year increase was primarily driven by a $54.8 million increase in direct external research and development expenses and a $32.9 million increase in employee-related expenses which includes salaries, benefits and stock-based compensation as we increased headcount to support our expanding pipeline. Full year G&A expense totaled $72.1 million in 2020 compared to $42.8 million in 2019. The increase was primarily due to a $20.6 million increase in employee-related expense as we increased headcount to support our growing operations as well as a $6 million increase in professional consulting services. We expect operating expense to increase in the coming quarters as we continue to grow headcount to accommodate additional R&D activities and loss readiness as well as from higher external spend associated with increased activity using the pipeline. During Q4 2020, we received $17.5 million in milestone and reimbursement payments from our collaboration partners.

We continue to project receiving over $100 million in collaborative payments received for the fifth-quarter period from Q4 2020 through Q4 2021 and therefore, anticipate achieving over $83 million from our existing collaboration for the full year 2021. These payments represent an important source of proceeds and demonstrate the value of these collaboration programs to continue to generate as they mature. As of December 31, 2020, we had $568.8 million in cash, cash equivalents and held-to-maturity investments compared to $348.9 million as of December 31, 2019. Maintaining a strong balance sheet will be of paramount importance as we plan to submit our NDA from nedosiran in the third quarter and prepare for a potential 2022 commercial launch. During 2021, we anticipate cash received from existing collaborations will be supplemented by other potential sources of funding, including, for example, proceeds from a planned XCF commercial partnership for nedosiran and possibly possible for LT monetization. With the objective of maintaining the balance sheet strength with which we started the current year. That concludes my review of the financials. I would now like to open the call up for questions. Operator?

Questions and Answers:

Operator

Our first question comes from the line of Jonathan Miller from Evercore ISI.

Jonathan Miller -- Evercore -- Analyst

And congrats on all the progress in 2020. When you listed all out like that, it really does look very impressive. I'll start with alcohol use disorder. Obviously, a huge indication. But as you mentioned, Doug, pretty challenging to penetrate in the past, are you thinking of subpopulations that are more amenable to treatment here? Do you have any view so far on the sorts of endpoints that are most relevant. How well-established is the regulatory path moving forward there. If you could just give us a little more color about how development and AUD is going to look? And then secondly, given that PH2 and PH3 are sort of less well understood and no one else is developing that market. How are you thinking of commercialization in those indications as opposed to PH1 just in terms of what the ramp and amount of effort is going to take to get there is going to be.

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Thanks, Jonathan. You put a lot on the table there. We'll answer some of the questions now, and I think we'll go into more detail in March at the event with Dr. But to start with, you asked about subpopulations in AUD, and this is a very diverse indication with millions of people who have alcohol use disorder. So indeed, we are thinking about particular populations that are most applicable. But we do think that all levels of severity of AUD are potentially addressable with DCR-AUD. But there will be focus. I'm not going to give much detail beyond that. You asked about endpoints. Harm reduction is really critical as there has been some evolution in endpoints in AUD, particularly starting in Europe and certainly something that we're seeing in the FDA as well. And a move to thinking about harm reduction, which we think is the right metric and one that is particularly applicable to our mechanism of action. Is there another element there? There's another element on AUD? Go ahead?

Shreeram Aradhye M.D -- Executive Vice President and Chief Medical Officer

So with respect to commercializing in PH2 and PH three, we really view this as a singular commercialization effort. The PH patient community has historically not been differentiated into mix types. It's really only the advent of PH1-specific therapy that causes there to be any cleaning of the population. So we do see it as the same effort. My colleague, Rob Ciappenelli, our Chief Commercial Officer, is on the line. Rob, is there anything you'd like to add on that?

Rob Ciappenelli M.B.A -- Chief Commercial Officer

Yes. Thanks, Doug. Appreciate the question, Jonathan. And Doug said it spot on. It is the overall PH market. And when you think of it, think about how nascent the overall market is the state of the science. There's tremendous amount of education that needs to be done here regardless of subtype, and appropriate diagnosis and support through genetic testing are also key factors that's going to help physicians not only become aware of this disease, but also make that differential diagnosis because these patients have a relatively long patient journey before they're even finally diagnosed with PH. And soon, hopefully, we'll have an option for all PH patients through nedosiran, but we still have to finish the PHYOX program and see how that goes.

Operator

Our next question comes from the line of from Cowen.

Unidentified Participant

Congrats to on all the progress. This is Brendan on for Just a couple of quick ones from us on HPV here. What can you tell us, I guess, about the potential combo treatments for this Phase II that you were discussing from Roche? And maybe how it's kind of reflected in the current treatment option for patients. Is the thinking really to target a specific line of therapy for commercial uptake? Or more to kind of provide optionality in like a pivotal trial and a potential label?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Brendan, I think the combination trials that Roche will be kicking off are really designed to identify the combination that yields the highest functional cure rate. And so I would call it exploratory as what the ideal combination is. We have some expectations, but of course, the data will have to rule as it always does in clinical development. So Roche has identified that they will be initiating in near term, combinations of our RG6346 alongside their new therapy. In combination with TLR7 agonist, also in combination with their core inhibitor, CPAM, and also in combination with a interferon product. So three different triple combinations. They will also be looking at extended dosing at two different dose levels of the our RNAi plus the So that's five treatment cohorts that they've identified so far that we'll be initiating in the near tearm. And I think it's really a worse rise to see which gives the highest rate of functional cure.

Operator

Our next question comes from the line of Mani Foroohar from SVB Leerink.

Unidentified Participant

This is Rick Online for Mani. So the first one is on AUD. Given the preclinical data that have been generated to date for the asset, I was hoping you could provide some details regarding the level of ALDH2 knockdown, you will be looking at REITs to produce a therapeutic effect. The duration of knockdown that you're looking for in the clinic? And potentially the dosing schedule for the target product profile?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Sure. So of course, this is a GalNAc directed liver-specific RNAi molecule. And the class of GalNAc delivered RNAi molecules has a very consistent potency and pharmacodynamics. We are seeking maximum suppression of the ALDH2 gene in the liver. And we have seen reproducibly with different molecules targeted at at different genes that we can achieve well over 90%, 95-plus percent production, essentially silencing completely the target gene in the liver. So we will be seeking to do that. Similarly, you see an extended duration of effect for RNAi with the pharmacodynamic effects lasting multiple months. It's usually peaking on the order of four weeks or so after the initial administration and then maintaining a very high level of knockdown for several months and then slowly becoming over several months beyond that. We are not, at this point, targeting particular dosing regimen, but that's something we'll be exploring more deeply, both with respect to what is most appropriate in the market as well as what we think -- how we see the molecule performing. It may be quarterly, it may make more sense to go with a monthly administration because of the intuitive nature and small doses associated with that. That will have to emerge during the program. In any event, we do anticipate very high levels of knockdown and the extended duration of effect when it's come to associated with RNA line.

Unidentified Participant

Got it. That's helpful. And I did have an additional question about the alpha-1 antitrypsin study. So I think that maybe you could elaborate on some of the endpoints that you're planning to present to the interim readout. Could we expect to see the degree of the reduction of polymer total a burden or any other potential metrics for overall liver health?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Sree. Would I like to talk about 1AT endpoints?

Shreeram Aradhye M.D -- Executive Vice President and Chief Medical Officer

Yes, sure, Doug. So as you can imagine, our goal is to look at first, beginning with reductions in serum A1AT. But the focus, of course, is on understanding the effects of nedosiran on what's happening in the liver. So we will be looking at planning to look at measuring protein in liver. We will be looking at histology using traditional spans and ways of looking at in distribution, any evidence of information on what's happening with fibrosis. And in addition, we will include a series of serum biomarkers to put them all together and to identify an opportunity for coming up with potentially a score that could be used to assess the impact of nedosiran on liver disease. In addition, we will include imaging biomarkers using measures of liver stiffness, if you will, like and astrography as well as fibroscans. So the typical combinations of both histology and noninvasive imaging and serum biomarkers to assess liver disease activity at both six months and 12 months.

Operator

Our next question comes from the line of Luca Issi from RBC Capital.

Luca Issi -- RBC Capital -- Analyst

Terrific. Congrats on the progress is great. Maybe first on PH3. I think you mentioned that you're planning to include PH3 as part of nedosiran NDA package. My understanding is that the end for PHYOX4 is actually fairly small. I think it's only six patients there. Wondering what gives you confidence that such data can be sufficient for approval? And then maybe for the cardiometabolic, you mentioned as well as ) obviously, multiple companies in the space here, Arrowhead, therapeutics had a bunch of others. So I think you did a great job in differentiating for primer hyperoxaluria. How are you thinking about differentiation for H3 in LPLA?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

So just start, Sree.

Shreeram Aradhye M.D -- Executive Vice President and Chief Medical Officer

I take the OR. So indeed, PHYOX4 is a single-dose study in six subjects up to nine that has -- that will have a placebo control. So our goal there is to convincingly demonstrate that we are able to lower urinary oxalate the endpoint, as you recall, is a 30% reduction on two consecutive visits a month apart. And that will be the first evidence that nedosiran can lower urinary oxalate in PH3 as a disease. If we show meaningful reductions in urinary oxalate, knowing that mechanistically, the importance of lowering oxalate as the primary source of injury our arguments for an accelerated approval will be based on combining the results of reduction with data that is available from the that is now emerging, showing that PH3 carries risks of stone rates as well as real insufficiency that was previously unrecognized. But these are things that we still need to discuss and will really depend upon the magnitude of effect we demonstrate in PHYOX4, and it will then need to serve as the basis of a potential accelerated approval with the recognition that additional work will be necessary both from our ongoing natural history study as well as any additional commitments to follow our subjects longer-term to see impact on clinical outcomes. But I think the key message is that we expect this to be discussion with the FDA around a potential

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

So Luca, with respect to the cardiovascular targets, we obviously made the decision several years ago to seek the development partners pursue those. And there were a number of issues on our mind when we decided not to pursue them on our own. They include the fact that there are other modalities that are more advanced development targeting these types of targets that there are current drugs on the market. The patients are often on polytherapy and being managed. These are large population, it's very large sales forces differentiation, I think, is challenging and probably at the margins of the clinical data and to generate that requires large, long and expensive trials and rare populations may have special needs, but there has been a history of those markets not enjoying through rare disease economics because they've been undercut by the larger population products. So that may -- it may be that one can successfully navigate that complex environment, but we made the choice several years ago that a really established strong player like Lilly, would be far more capable of navigating those waters. So we've really left it to Lilly. I mean with respect to the mechanism, RNAi turns off a transcript in the liver. So if you're using GalNAc targeted RNAi, there's sort of a -- it is what it is, right? You're going to be achieving a very strong level of silencing with the pharmacodynamics we described. In the absence of using a different target, for example, there are -- there really aren't good avenues for mechanistic differentiation and it's really going to be execution different. And as I mentioned, that's something where I think scale is a huge benefit, and that's not -- scale is not what we bring to the table as our core confidence. So our friends at Lilly, I think, are going to do a good job.

Operator

Our next question comes from the line of Stephen Wiley from Stifel.

Stephen Douglas Willey -- Stifel -- Analyst

Just a quick question on the AUD program is -- so I know we talked a little bit about the development plan, and we're going to get some more color, presumably at webinar next month. But is this a program that you feel you can independently take across the finish line from a regulatory perspective. And then I know it's a little bit of kind of a specialty niche market. Is this something for which you have commercial aspirations?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Yes. That's a good question, Steve. And it does -- what feels saying about the future, predictions are difficult, particularly about the future. I certainly think that we are growing to a scale where we could push this across the regulatory finish line whether we choose to or not in a position that we'll have to face. But I think it's certainly within our capability. I think the most effective marketing of the product probably will be beyond something that we can do 100% on our own. And there are different call points that one can think about here, including call points and then very importantly, for growth of the market, a broader call point than that with the GP community. And I'd not see us to the GP community. So I think it is right for commercial collaboration for us. But I don't think we'll require a development partner in the indication. So it's something that we intend to maintain a very strong economic state and not something that we're seeking to just generate POC and out license. This is a core program that we're going to invest in we intend and hope to reap the economic rewards from it.

Stephen Douglas Willey -- Stifel -- Analyst

Got it. That's helpful. And maybe just one collaborative question. I guess is there any kind of change of control provision that impacts the Alexion collaboration and I guess, is there a scenario by which the C3 and the CFB drug come back to you? And I guess, if so, are those targets you'd be interested in?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

So there is not a change of control trigger. That means they would definitely come back to us. With respect to what might happen, I think there are a lot of possibilities for what might happen. But I'm confident that these programs are going to move forward because we do see C3 and CFB as very interesting targets to move forward. So it is conceivable that there won't be any change in the relationship. It's also conceivable that there will be some sort of rejiggering, and we'll just have to work with our friends at Alexion, and I expect after Q3, it will be friends as well to figure out what the path forward is. And there may be a change. But I think both programs are very likely to proceed along their time lines and enter the

Stephen Douglas Willey -- Stifel -- Analyst

Okay. And then maybe just one last quick potentially stupid financial question. So the $100 million in recognized revenue that you're talking about here over this fifth-quarter period. Is that a combination of both incremental milestones and the recognition of deferred revenue? Or is that just some incremental milestone payments on top of the deferred that we should expect any more?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

I'll kick that off. I'd Doug to step in too. But the $100 million that we quoted over that fifth-quarter period is just cash in the door. It's the revenue recognition associated with the collaboration so I would say, for Roche. And so that number is -- that's just the cash going into the bank account number and it's independent of accounting for it as revenue. And so when Doug is quoting the deferred revenue, that's really cash that's already in the bank and about when it shows up as revenue on the line. Does that clarify for you?

Stephen Douglas Willey -- Stifel -- Analyst

Yes. No, I just wanted to make sure that it was indeed incremental cash coming in the door.

Douglas Pagan -- Chief Financial Officer

Okay. Yes, Steve, it's very helpful. I just add to further the point, there will be tables in the MD&A. Actually, that make it very clear specific cash in by partner and it's in order to help understand how the deferred revenue unfolds, but it's pure cash.

Operator

Our next question comes from the line of from H.C. Wainwright & Co.

Unidentified Participant

Great. And congrats on all the progress. Continuing to expand both internal and collaborative programs. Just one question for me. A lot of them have already been answered, but on your A1AT program for just thinking longer term, as you move toward potential approval and collaboration in a few years, obviously, this asset is targeted toward the liver effects, independent of the lung effects for these patients. I'm just curious, how do you think about the benefits to patients in the liver and how that could benefit as a complement or even synergistic clinical benefit to these patients and how that could impact your overall marketing strategy and positioning.

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Thanks. Yes. Let me try and get into that. Sree step in, there's things you want to add. There are really two different diseases here. They have the same cause but there are different diseases. There's a lung manifestation that's treated by pulmonologists, and it has a standard of care. And if a new treatment is going to come along. It needs to compete with that standard of care. We have a liver disease that's treated by a different physician group. It's a different target organ. And currently, there is no standard of care for it, but there will become one. Patients with liver disease are going to want the best care for their liver patients with longer than I want the best care for the lung. Obviously, there's an overlap in the patient population. But there are patients that are lung only, and there are patients that are liver only. And so I think the synergy between them is -- there's a marketing synergy for sure because the lung patients are more apparent given that people don't feel their liver decline in the same way they feel their lung decline. And so there is an enrichment for lung patients among the current liver patients that are there. So to the extent they are already in system of augmentation through the three existing augmentation providers, there is potential marketing synergies there. For the liver from a medical perspective, though, I really think you got to ask, what is the best treatment option from the liver? And what is the best treatment option for the lung? And I don't think it matters so much with their same dart or not. It really is what's going to do the best. And we think RNAi because of its ability to give a constant and very high suppression of the misfolded protein really has the potential to be the best liver treatment and be the standard of care in the liver.

Operator

Our next question comes from the line of Mayank Mamtani from B. Riley Securities.

Mayank Mamtani -- B. Riley Securities -- Analyst

Thanks for the comprehensive pipeline update and I appreciate you taking our questions. I'm going to see so much visibility into your partnered programs. So maybe Doug, starting there on the Roche HPV program, obviously encouraging for them to include your program in an ongoing study with a number of different alternative combinations there. I just wanted to kind of ask you between the different options, is there any one or do you think you have more confidence in, given, obviously, it's a busy kind of landscape, it's still challenging to have that off-treatment functional cure data. Any comments you could provide a big great, Doug, on that?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Yes. I'm often happy to speculate. Of course, my feeling doesn't matter, right? It will be the data. But I know -- of course, we all recognize that. We look at the history of treating HPV and it doesn't marry a bit by genotype, but where there's been success, albeit at a low rate and achieving functional cure, that's been in News+ interferon. It hasn't been new to And I view that as the crack in the door, so to speak. And there's a real question there, can you widen it? And I think it stands to reason that if you suppress that antigen, which is the tolerizing agent, the immunosuppressive activity of HPV, then you're likely to increase the activity of the NUC interferon And so I think the most straightforward way to think about it is Duke, RNAi and interferon or some other immuno active agents. So that would say that among Roche's three triple combos. I think it's more likely that the interferon or the TLR seven arm are -- would perform. Now obviously, interferon has well-known downsides. And it would be great to replace it with something better. And maybe Atlr seven agonist is something better, maybe there's something else earlier in the pipeline. I think the optimism around core inhibitors has waned a bit as the core inhibitors in combination with haven't really shown a differentiated activity. So harder to see why adding RNAi to that combination or CPAM is going to, all of a sudden become a whole lot better. So we have a preelection to thinking that we're likely to succeed in immunoactive combinations, but it's a clinical experiment, and we'll see what happens.

Mayank Mamtani -- B. Riley Securities -- Analyst

Yes. No, that is very helpful. And Shree, just to clarify, the initial label for nedosiran are you targeting having all PH1, PH2, PH3, just that PH3 is going to be more accelerated approval and the other two are going to be full approvals? Is that kind of the goal for 2022?

Shreeram Aradhye M.D -- Executive Vice President and Chief Medical Officer

Yes. I think we have agreement on what the basis of approval for PH1 and PH2 is. So that is in a different place than our thinking of PH3, where for the reasons I described, we recognize that it will be an accelerated type of approval with the commitment to do additional work is what our expectation is spending data.

Mayank Mamtani -- B. Riley Securities -- Analyst

Okay. And last question, just a step back question. Maybe for you, Doug. And also, as you think about the spend trajectory going from last year to this year, are you kind of talking about a little bit of a strategy shift here that you are thinking about larger presence diseases in a different way, and we should kind of expect to hear from you more programs like AUD, some others that might be sitting in your pipeline? Maybe you've not invested in it yet?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Well, I think the for us, the most important message I was fairly explicit about, which is that we're not just looking at orphan disease. We have -- the fintech industry as has been flowering and ways to approach diseases. But there are, in our analysis of diseases where the qualities of RNAi, that constellation of features, looks like it's the most appropriate. And when you combine that with targets and opportunities enabled by RNAi, that looks like there are pretty likely to work that you have some confidence that you have a higher than industry average probability of success. That's where we're trying to look. There's some orphan things in there, but there's some large market indications in there. And that is -- we have a formalized internal process led by Bob Brown, our Chief Scientific Officer. To evaluate various opportunities, draws on the internal resources. And for reason from large, given our growth of our company as well as external resources. And it is it's a somewhat diverse set of indications, but they're united by this confidence that, hey, this is probably really going to work. This is a great target. And the RNAi really looks like the best way to go at it. As I said, there's some work it in there, but there are also some non orphan. So that's how we're thinking about building the portfolio. We will roll out more indications beyond AUD in the coming quarters. And I think you'll see those threads that go through the future programs. In addition, you can see how they thread through the historical program.

Operator

Our next question comes from the line of from Chardan.

Unidentified Participant

Doug, for AUD in terms of measuring knockdown of ALDH2 is something like acetal hide a good proxy? Or is there something more specific that you'd be looking to measure?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Well, I'll start, and I think Shree can supplement answer here. And one I'm not going to be doing is spoken people and deliver. So we're not going to get an ALDH knockdown. But as I alluded to in another context before, RNAi has been very reproducible. So I think we can have a big level of confidence that we're going to achieve pretty good knockdown of ALDH2. ALDH is the transient biomark and that makes it somewhat challenging to use as a very firm basis for analysis. So we won't be hanging our hats solely on that. And ultimately, the most important thing here is response to alcohol challenge. I think that is really going to be the most important asset. Sree, do you want to...

Shreeram Aradhye M.D -- Executive Vice President and Chief Medical Officer

Yes. Yes, the PD marker will be a low interaction, and we'll be looking at we'll open the poles that whether it's facial plate, whether it's country, how we can feel. So we'll do a formal interaction study as the primary marker of RPD. We do have net but I think our primary goal is to evaluate the onset and offset of the effect in response to a small challenge.

Unidentified Participant

Okay. And then in talking about perhaps a prevalence of $14 million, but with a goal to initially target some subgroups, can you give us a sense of what the low-hanging fruit subgroup is as we're trying to model what this opportunity is worth?

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Yes. So we'll flesh this out, but at some of the But obviously, the key group is the group that's currently receiving pharmaceutical coal intervention. That's step that's about 1% of the population, it's about 140,000 individuals. There is a much larger or 10 times that size on the order of 1.5 million people who are seeking some kind of treatment, 90% of them are given pharmaceutical treatment. However, we believe that DCR-AUD has the potential to commonly used option among that group in conjunction with the decadal therapies that they're currently getting. So that low-hanging fruit there is 1.3 million, 1.5 million people that are already being recommended for treatment. They just don't have a great pharmaceutical option. So I think that's where we start in thinking about the value I think we can see how even a partial stress there leads to a very valuable product.

Operator

That concludes our question-and-answer session. I would now like to return the call over to Doug Fambrough for closing remarks. Sir, please go ahead.

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

With two Phase II studies of RG6346 expect start this year and at least two INDs potentially to be filed on our highly productive collaboration activities. We're going to continue to turn out candidates and importantly, in our NDA submission on the horizon, we've got a lot of this year. It's going to be a very exciting year of execution and growth. I think it's transformative actively as we go through the NDA filing process. So in addition to some conferences in March, we hope you all will join us for our webinar on March 18 on DCR-AUD, we is that program in tail with Dr. Henry We've got a lot going on here at Dicerna. We look forward to keeping you all updated as we continue to build toward the fully integrated commercial stage biopharmaceutical company. Thank you again for joining us tonight, and have a wonderful evening.

Operator

[Operator Closing Remarks]

Duration: 53 minutes

Call participants:

Lauren Stival -- Senior Director of Investor Relations

Douglas M. Fambrough, III, Ph.D. -- President and Chief Executive Officer

Shreeram Aradhye M.D -- Executive Vice President and Chief Medical Officer

Douglas Pagan -- Chief Financial Officer

Rob Ciappenelli M.B.A -- Chief Commercial Officer

Jonathan Miller -- Evercore -- Analyst

Unidentified Participant

Luca Issi -- RBC Capital -- Analyst

Stephen Douglas Willey -- Stifel -- Analyst

Mayank Mamtani -- B. Riley Securities -- Analyst

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