Dicerna Pharmaceuticals, Inc (DRNA) Q3 2021 Earnings Call Transcript

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Dicerna Pharmaceuticals, Inc (DRNA)
Q3 2021 Earnings Call
Nov 9, 2021, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen, and welcome to the Dicerna Pharmaceuticals' Third Quarter 2021 Financial Results Conference Call. As a reminder, this conference call is being recorded at the company's request.

I will now turn the call over to your host, Kristen Sheppard, Senior Vice President of Investor Relations at Dicerna. Please go ahead.

Kristen Sheppard -- Senior Vice President of Investor Relations

Thank you, and welcome to Dicerna's third quarter 2021 financial results and business highlights conference call. Please note that the press release detailing our results for the third quarter was issued earlier this morning and is available under the Investors and Media section of our website. For your convenience, a replay of today's call will also be available on our website shortly after we conclude. Joining me for today's call is Doug Fambrough, our President and Chief Executive Officer; Doug Pagan, our Chief Financial Officer; and Dr. Shreeram Aradhye, our Chief Medical Officer.

Before we begin, I'd like to remind everyone that management will be making 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 platform and the therapeutic potential thereof and our collaborations and any 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. Applicable risks and uncertainties include those relating to our preclinical research and clinical development and other risks identified in the Risk Factors included in our most recent annual and quarterly reports filed with the SEC.

The forward-looking statements on this call speak only as of the original date of this call and while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so.

I'd now like to turn the call over to our CEO, Doug Fambrough. Doug?

Douglas M. Fambrough -- President and Chief Executive Officer

Thank you, Kristen. Good morning, everyone, and thank you for joining us. In the third quarter, Dicerna achieved a key milestone in the maturation of our company, one that few biotechs ever attained. We generated strong lease statistically significant efficacy data with a clean safety profile and a pivotal clinical trial with our wholly owned nedosiran compound discovered at Dicerna from proprietary technology developed by Dicerna. I am incredibly proud of this and we believe this success will be the first of many as there are 15 additional Dicerna molecules at various stages of development being developed by ourselves or by our five global pharmaceutical partners that have chosen to collaborate with us in RNAi.

Most of these potential therapeutics utilize our liver targeted GalXC technology, but some of the most recent molecules to enter development utilize our GalXC-Plus technology to target various other tissues. I'm also very excited to begin to share details about our first wholly owned strategic initiative outside the liver in early Q1 2022 when we're planning a full rollout of that effort. As a reminder Dicerna has six clinical stage Dicerna GalXC molecules. Nedosiran for primary hyperoxaluria or PH, belcesiran for alpha-1 antitrypsin deficiency associated liver disease or AATLD. DCR-AUD for the treatment of alcohol use disorder, RG6346 for chronic HBV with Roche and ANGPTL3 and LPA targeted programs under our Lilly collaboration.

Beyond these clinical programs we have, as I just mentioned, 10 active core and collaborative preclinical development programs as well as over 20 discovery research stage programs in multiple tissues or cell types and looking across this entire pipeline of activity, we expect new programs to be entering the clinic on average one per quarter over the next two years and potentially beyond that at a similar rate. Although I want to note that our partners have full discretion over submissions and timelines, over the near-term, we expect to deliver packages to support an IND or CTA filing in Q4 potentially followed by two additional filings later in the first half of next year.

Among all these programs, we believe several large billion dollar market opportunities exist with significant potential to fulfill unmet medical need. We believe this creates the opportunity for Dicerna to dramatically expand in the future into a vast number of indications and meaningfully advance our mission to improve the lives of patients. This is an exciting time for Dicerna and we believe we are well positioned with the cash runway that extends into 2025.

Turning now to our recent business highlights. I'll start with nedosiran. Of course, the highlight for the quarter was the positive data from our pivotal PHYOX2 study of nedosiran for the treatment of PH type one or PH1 that we reported in August. Nedosiran achieved its primary endpoint in the study demonstrating a highly statistically significant reduction from baseline in urinary oxalate excretion compared to placebo. Nedosiran also met the key secondary endpoint with a significantly higher proportion of patients achieving and sustaining normal or near normal Uox at two or more consecutive visits after day 90 compared to placebo.

Additional analysis showed that the Uox reductions were significant in patients with PH1. While there was no consistent pattern of Uox reduction observed in patients with PH type two or PH2, suggesting additional complexity in PH2 disease biology. We believe these data underscore nedosiran's potential for treating patients with PH1, marking a significant milestone for Dicerna.

More recently in October, we reported top line results from our PHYOX4 study in which patients with PH type three or PH3 were given a single subcutaneous dose of nedosiran or placebo. PHYOX4 met the primary safety endpoint showing nedosiran was generally safe and well tolerated in patients with PH3. While nedosiran did not meet the pre-specified secondary efficacy endpoint criteria in this trial, PH3 patients who were given nedosiran in the study also showed an encouraging trend in urinary oxalate excretion reduction.

Our recent stream of PH data announcements culminated in the selection of PHYOX2 data for a late-breaker poster presentation at last week's ASN's Kidney Week, a designation that we believe reflects the importance of the data we have generated for the medical community caring for patients with PH, which is a great segue for me to highlight Dicerna's continuing commitment to PH patients. While we have refined our near-term nedosiran strategy to focus on seeking approval of nedosiran in PH1, there is a significant unmet medical need in both PH2 and PH3 and we plan to continue analyzing both of these datasets further as part of our discussions to outlicense the commercialization of nedosiran.

In terms of our next steps, we remain focused on submitting an NDA for nedosiran in PH1. Subject to our ongoing pre-NDA interactions with the FDA, we are adjusting our planned submission content and currently expect the timing to move from December of this year into the first quarter of 2022.

Turning to belcesiran. Our second most advanced wholly owned clinical stage GalXC RNAi therapeutic candidate that is in development for the treatment of AATLD. AAT deficiency is a rare genetic condition caused by mutations in the SERPINA1 gene that encodes AAT that results in disease of the liver and lungs. Due to the severe and progressive nature of AATLD, there is a significant unmet need for a therapy that can directly impact the aggregation of AAT protein in the liver. We're particularly excited about this program as we believe belcesiran has the potential to change the treatment paradigm and prevent the need for liver transplantation which is currently the only option available to address AATLD.

In July, we announced interim results from our Phase 1 study of belcesiran, which met our objective demonstrating strong dose-dependent reductions in Serum AAT and healthy volunteers with administration of a single dose of belcesiran. In this analysis of the four completed active treatment dose cohorts of 0.1, 1.0, 3.0 and 6.0 milligrams per kilogram, belcesiran was found to have an acceptable safety profile and was generally well tolerated. The final 12 milligram per kilogram dose cohort in this trial has now been completed. We will be presenting these results at the upcoming American Association for the Study of Liver Diseases Liver meeting later this week. The key takeaway is that the data were consistent with the previously reported interim results including a favorable safety profile as has been reported to date and further support -- these further support our decision to move forward with the belcesiran clinical program.

In June, we initiated the next phase of development for belcesiran advancing to patient dosing in our Phase 2 ESTRELLA trial. This is an important milestone in our efforts to bring belcesiran to patients with AATLD. ESTRELLA is a randomized multi-dose double blind placebo controlled study evaluating belcesiran safety, tolerability, pharmacokinetics and pharmacodynamics for the treatment of AATLD. The ESTRELLA Phase 2 study includes a 24 week cohort and a 48 week cohort to be conducted in parallel, each with up to 27 participants who have a diagnosis of PiZZ type AAT deficiency and AATLD.

Turning to our newest candidate in clinical development, DCR-AUD, it is an investigational GalXC RNAi therapeutic for the treatment of alcohol use disorder or AUD. AUD is characterized by the inability to stop or control alcohol use despite social, occupational or health consequences. Many individuals with AUD do not receive treatment and currently available pharmacotherapies are not widely prescribed. There are an estimated 14 million individuals in the US with AUD. Out of which fewer than 1.4 million received treatment of any kind. To address this unmet need we recently initiated a randomized double blind Phase 1 study of DCR-AUD to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of single-ascending doses of DCR-AUD and up to 36 healthy volunteers over a 24-week observation period.

The trial is also assessing the interaction between DCR-AUD administration and alcohol consumption using standardized ethanol interaction assessments performed serially over the trial's duration. We remain steadfast in our belief that this program has the potential to generate a novel treatment option for individuals with AUD and we look forward to sharing interim results from the trial later in 2022.

Now turning to clinical stage programs being developed by partners. Our RG6346 program in collaboration with Roche continues in multiple cohorts within their Phase II adaptive trial in chronic HBV with different cohorts exploring different multi-drug combinations. Based on the nature of that trial, we expect data in 2023. As a reminder, Dicerna retains a right to opt into this program for Phase 3 development. The two Lilly partnered GalXC programs targeting ANGPTL3 and LPA continue in Phase 1 development at Lilly.

With so much to look forward to in terms of clinical and corporate milestones, we're still only getting started here at Dicerna. We are committed to building on our progress by advancing our existing portfolio candidates and unveiling our next wave of innovations to deliver strategic value for all our stakeholders, most importantly, the patients who motivate our mission. To that end, we are proud to sponsor alpha-1 Awareness Month this month and Hyperoxaluria week which officially began on Monday.

With that I'll now turn the call over to Doug Pagan to review our financial results for this quarter. Doug?

Douglas W. Pagan -- Chief Financial Officer

Thanks, Doug. As mentioned, we are very excited to be advancing our clinical development programs to deliver potential new treatment options for patients and maximize long-term value for our shareholders.

Turning to our financials, I'll begin with our balance sheet. We continue to be in a strong cash position having ended the third quarter with $646.6 million in cash, cash equivalents and held to maturity investments. We continue to believe these amounts together with projected proceeds from existing collaborations will provide us cash runway into 2025 while we continue to invest in advancing our clinical pipeline, supporting our collaboration partners and expanding our platform technologies. As previously noted, economics from any potential out licensing arrangements for nedosiran are not factored into our cash runway projection.

Moving to the P&L. Revenue for the third quarter totaled $63.0 million compared to $48.9 million in the same period last year. The change primarily reflecting an increase in revenue associated with our collaboration with Novo Nordisk. On to operating expenses, research and development expense for the third quarter totaled $61.2 million compared to $54.8 million in the same period last year. The change was primarily due to higher facility related expenses as well as increased depreciation and other expenses.

General and administrative expense for the third quarter totaled $22 million compared to $17 million in the same period last year. The change was primarily due to increased rent expense associated with the company's new headquarters in Massachusetts and an increase in software costs. For our bottom line, net loss was $17.1 million for the third quarter of 2021 compared to $21.8 million for the same period last year. Year-to-date we have received $76.5 million in milestone, fee, and reimbursement payments from our collaboration partners primarily Roche and Novo and continue to guide to receiving $83 million for the full year 2021. These payments represent an important source of proceeds and demonstrate the value we expect these collaboration programs to continue to generate as they mature.

With that I would now like to open the call for questions. Operator?

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from Jonathan Miller with Evercore. You may proceed with your question.

Jonathan Miller -- Evercore -- Analyst

Thanks so much for taking my question, guys, and congrats on the progress. Should we expect continued dose response at 12 NPK for the AAT program at ASLB later this week? And I guess on ESTRELLA would you PR the six-month data on its own or are you planning on waiting for the full 48-week data to give us insights into the patient response there?

Douglas M. Fambrough -- President and Chief Executive Officer

Hey, Jonathan. This is Doug. We'll talk about the belcesiran data when it comes out on Friday. Could you repeat the second question? I didn't quite catch it.

Jonathan Miller -- Evercore -- Analyst

So just on ESTRELLA, would you PR the shorter cohort, the six-month cohort on its own or would you wait for the longer the 44-week cohort?

Douglas M. Fambrough -- President and Chief Executive Officer

I don't think we've really planned out how we're going to disclose the data at this point in time.

Jonathan Miller -- Evercore -- Analyst

Okay, fair enough. Maybe then on extra hepatic, you mentioned the full rollout of your extra hepatic program in early Q1. I think we've all been waiting for this a lot, you've previously said you'd wait, you're almost clinic ready before you announce anything. So as we look forward to what's coming, beginning of next year from those programs, what should we be expecting. Is this going to be a whole R&D Day or PR, how much of the data you are going to present is going to be specific to a particular target versus more broadly on extra hepatic programs and technology. Could you just maybe give us a little color about what we should be looking forward to you there?

Douglas M. Fambrough -- President and Chief Executive Officer

Sure I'll give you a little bit. I mean I hate to build it up so much. We are, we will wait until the New Year. I think what we'll do is we'll probably do a rollout as part of a kind of year opening corporate presentation that will go into the therapeutic area that we're going into our delivery data across cell types in that therapeutic area, multiple targets of interest and multiple programs that we're pursuing, the preclinical data that supports a strong belief that these can provide exceptional efficacy in series of unmet medical need and then we will present our timeline to the clinic.

Jonathan Miller -- Evercore -- Analyst

All right. Sure. Thanks. I'll hop back in the queue. Thank you very much.

Operator

Your next question comes from Mani Foroohar with SVB Leerink. You may proceed with your question.

Mani Foroohar -- SVB Leerink -- Analyst

Hi guys, thanks for taking the question. I just have two quick ones. There has been a lot of debate among investors around interest in RNAi platforms broadly in business development. Can you give us a sense of how to think about that strategy. Obviously biz development was the dominant part of the story in 2019. And in the last couple of years become more focused on your own internally wholly owned assets. How should we think about that balance out licensing and partnering assets. That's just a smaller part of the story now, you don't need to support the balance sheet that way?

Douglas M. Fambrough -- President and Chief Executive Officer

Yeah, this is, this is a really interesting question, and thinking about how the mix of partnering and proprietary programs drives our strategy is something we think a lot about and there has been a real change from the 2018-2019 timeframe, where we used a collaboration strategy to build our capabilities and our balance sheet and we believe we were very successful in doing so. Having been so successful doing so it wasn't so important to continue partnering and rather we have turned to focusing primarily on our own programs and at the same time managing a shift from the primarily GalXC liver targeted technology that serve for the basis of almost all of that partnering to the GalXC-Plus which we are going to be populating our own pipeline with going forward.

Now the interest in RNAi partnering is, it remains very high. We are not being really responsive to the kinds of requests that we're getting, but I think RNAi has established itself as a modality now with multiple approved products and pivotal datasets that show uniformly a clean safety profile and strong target specific reductions in protein levels just really what you asked the technology to do and that's been widely noted. So we have a lot of inbound interest, but I don't think that we really need to do the kinds of collaborations we've done before, they do take brain space, they take lab space right now, we're very comfortable with our balance sheet. And so we're not engaging in discussions around the types of large discovery collaborations and characterized our, particularly our Novo and our Lilly relationships.

So we're going to stay focused on our own pipeline and probably think about selective out licensing of programs that we are choose not to invest our own resources in going forward, and probably stay away from the large discovery collaborations that we did in the past, that's not a comment on the demand. I can tell you pharma is very eager on this technology, but it doesn't fit our strategy going forward.

Mani Foroohar -- SVB Leerink -- Analyst

Great. That's helpful. Thanks.

Operator

Thank you. Our next question comes from Luca Issi with RBC Capital. You may proceed with your question.

Luca Issi -- RBC Capital -- Analyst

Oh, great, thanks so much for taking my question and congrats on the progress. I have two, one on A1AT, A1 and hepatitis B. So on A1AT, I think you're obviously dosing up to 12 milligram per kilogram or roughly 900 milligram assuming the average weight in North America for adult. This appears higher than the 200 milligram that Arrowhead is using in their program. So wondering if you can comment on what's driving that difference. And then maybe for hepatitis B, if I capture it correctly, you mentioned that you're anticipating data in 2023 and not 2022. So wondering if you could expand a little bit more on that? Thanks so much.

Douglas M. Fambrough -- President and Chief Executive Officer

So for belcesiran I think we have used pretty much the same dose escalation across all our programs from 0.1 to 12 NPK and the 12 NPK cohort is really about showing a safety margin in healthy volunteers. It's not something we would consider as a clinical dose going forward. As we discussed, we've already selected a Phase 2 dose for belcesiran and we're very pleased with the profile that it should generate based on modeling and simulation out of the Phase 1 data. I think it's important to note that chronic dosing is not a single dose, right. So you do get dose additivity of a long duration of effect and that something that you can model out.

As for differences, there may be differences in molecule potency up or down, but it may be due to the fact we do use different assays, different assay than Arrowhead does in their trial and it's not quite an apples to apples comparison. We are achieving the level of knockdown that we target and we believe we've got a convenient simple Phase 2 regimen in our ongoing Phase 2 that we're dosing and expect that to be a very successful trial. Can you repeat the second question? I didn't retain it.

Luca Issi -- RBC Capital -- Analyst

Yeah, sure. So hepatitis B if I capture it correctly, you're mentioning that the next data update will be in 2023 and apologies if I didn't capture it correctly. So wondering why we're not getting any data in 2022?

Douglas M. Fambrough -- President and Chief Executive Officer

So the trials began enrolling last year and there is a 48 week dosing period and a 24 week. So that basically a year and half. We expect that the given some guidance from Roche that at least some of the cohorts will complete enrollment before the end of this year, but then you've got that 72 week period before data. We haven't been given any guidance from Roche about an interim update. If they provide one obviously we'll pass that on. But otherwise it's just the timeframe of this trial to try to achieve functional cures, 48-week dosing period and then a 24-week period off drug during which you need to maintain no viral markers in order to qualify for functional cure.

Luca Issi -- RBC Capital -- Analyst

Super helpful. Thanks so much, Doug.

Operator

Thank you. Our next question comes from Stephen Willey with Stifel. You may proceed with your question.

Stephen Willey -- Stifel -- Analyst

Hi, good morning, thanks for taking the questions. Well maybe just wondering staying on HBV if Doug you could maybe comment a little bit on I guess some of the updated data that we'll be seeing at AASLD and I know that they've presented their 48 week stopping rule data, I think the combo of an siRNA and nucleoside analog looks to be pretty interesting and just wondering what that provides in terms of read through to your asset in the Roche development program?

Douglas M. Fambrough -- President and Chief Executive Officer

Yeah. Hi, Steve. Thanks for asking that question. I thought that was super cool. That was exceeded my expectations for 48 week of siRNA and nucleoside to have 20% of the patients achieved the stopping rule. I think that bodes very well for the possibility of a substantial rate of functional cures particularly in a triple combination context particularly when an immune activator is inclusive, and there are two cohorts like that in our study with Roche, one with Interferon and the other with TLR7, a liver specific TLR7 agonist, remains to be seen what sort of rebound you'll have coming off drug.

I'm a little skeptical that just suppression with siRNA and nuke is going to provide a functional cure by itself, but to see it be so powerful and that high percentage of patients over 48 weeks suggests to me that within the triple combination you could have really impressive levels of functional cure. So I was really excited to see that data. I think there is a pretty direct read through to what other siRNAs against HBV could do. So I really saw that as a harbinger I think of some really exciting data in the future from us and our colleagues in the industry.

Stephen Willey -- Stifel -- Analyst

That's helpful. Thank you. And then just with respect to ESTRELLA, can you remind me patients are not allowed to receive augmentation therapy in the study, Correct?

Douglas M. Fambrough -- President and Chief Executive Officer

I'm going pass to Shree to talk about how that's going to work in our trial.

Shreeram Aradhye -- Executive Vice President and Chief Medical Officer

In fact, we are just about to start allowing the inclusion of patients on augmentation therapy in ESTRELLA. That will be part of the modification to the current protocol, but we fully expect to enroll people on augmentation.

Stephen Willey -- Stifel -- Analyst

Okay. And can you say whether or not that was a regulatory directed protocol change or was that something that you guys just work through internally?

Shreeram Aradhye -- Executive Vice President and Chief Medical Officer

No it was something that we decided because we know that will be a population of clear interest for the product in the future.

Douglas M. Fambrough -- President and Chief Executive Officer

We recently did the validation of the assay that allows us to separate the augmented protein from the endogenously produced protein you need to distinguish those, so you need a validated assay for that. So with that coming online we can now adjust our enrollment.

Stephen Willey -- Stifel -- Analyst

All right. Very helpful. Thanks for taking the questions.

Operator

Thank you. Our next question comes from Yigal Nochomovitz with Citigroup. You may proceed with your question.

Yigal Nochomovitz -- Citigroup -- Analyst

Hi, Doug and team. Thanks for taking the questions. Doug, can you help us understand a little bit better the path forward in PH2 and PH3. I'm just wondering if you were able to ascertain why the PH2 results were inconsistent and as well why the PH3 patients didn't meet statistical significance. And more generally how do you plan to proceed with further development in PH2 and PH3? Will that become the responsibility of a future out licensing partner? Thanks.

Douglas M. Fambrough -- President and Chief Executive Officer

Sure. This is something we have thought a lot about. It was quite a surprise that the drug was not effective in PH2 and PH3 the way it was in PH1. We did assemble a group of KOLs and did really deep dive into the biology, and as part of that generated a series of hypotheses about what might be going on. Now I call these hypotheses. This is an ultra-orphan disease, there has been a limited amount of research on the disease. So there's a speculative nature to some of these hypotheses.

Now for some of them they are hard test and/or imply no role for nedosiran. For others, they are testable within the context of our PHYOX3 open label study and potentially suggest a role for nedosiran and treatment and we do intend to pursue those hypotheses to see if we can develop a role for nedosiran by certain adjustments. I'm not going to go into the specifics of the hypotheses, but suffice it to say we can explore them in the context of the current open label study, which we have patients with PH2 and PH3 rollover on to.

So as to the responsibility for us or the partner that will be as part of the discussion with our commercialization partner, but we have a commitment to these patients and it's really been one of the really exciting parts of the program for us that we could address all patients with PH2 and PH3. So to the extent we can explore it in PHYOX3 with credible hypotheses that suggest for nedosiran. We want to make sure that happens and we're moving to pursue them.

Yigal Nochomovitz -- Citigroup -- Analyst

Can I just clarify for PH1 the intention is to retain the rights for that population. Is that correct?

Douglas M. Fambrough -- President and Chief Executive Officer

We are in the process of out licensing commercialization rights to nedosiran globally.

Yigal Nochomovitz -- Citigroup -- Analyst

Okay.

Douglas M. Fambrough -- President and Chief Executive Officer

So we cover all indications. So really it's the same call point, it's patients presenting with very similar symptom profiles. So there wouldn't be any distinction between out licensing PH1, PH2 or PH3. But we are seeking a global commercialization partner. We're well in discussions, we look forward to making an announcement when that is concluded. But the interest has been quite strong with multiple parties.

Yigal Nochomovitz -- Citigroup -- Analyst

Okay, thanks. And can I just ask a different question. You've got an impressive number of discovery programs. I think you said 20 or more, is there any theme there in terms of therapeutic area or are you looking broadly across the therapeutic math, if you could just give us any sense as to what you're working on there?

Douglas M. Fambrough -- President and Chief Executive Officer

So it is quite broad. The discovery programs under the -- both the Lilly and Novo Nordisk and Roche collaborations are dominated by liver targeted. So Roche is focused on things primarily for the treatment of HBV. I've characterized our Lilly collaboration programs and the liver as tend to be focusing on cardiovascular, but also sort of cardiometabolic and the NASH, the Novo collaboration is sort of NASH and cardiometabolic oriented, and so there is a broad number of programs using the GalXC technology that are like that.

The neurodegeneration and pain part of our Lilly collaboration also have several programs associated with it and they target various areas within the CNS from spinal cord up to the various regions of the brain. And then we have our own programs that are -- there is GalXC preclinical program, but most of those are GalXC-Plus and our initial focus will be rolling out, there is a therapeutic area theme large market, we think we've got a really exciting angle that RNAi is particularly well suited to that we'll rollout as discussed at the beginning of Q1. So there is a fair amount of breadth there, it's majority GalXC, minority GalXC-Plus at this point in time, but as the Novo and Lilly collaborations in particular as those programs move to the clinic, it will shift to more GalXC-Plus than GalXC.

And some of them will face attrition at the discovery level. Our Novo collaboration for example is designed to be exploratory about targets. So have a discovery, more discovery programs than Novo intends to take into the clinic. But RNAi actually, it's very easy and literally in about a month, we can generate a tool to do therapeutic activity work in animal models and so out of Novo's sort of genetic biological discovery work they identify targets, we generate the tools, there is a joint look at therapeutic activity and then programs on the floor. So there is going to be attrition in these discovery stage programs.

Having said that I don't expect much attrition in the preclinical development pipeline once molecules have been nominated and as I've noted there are 10 of those in the pipeline. And that's what supports the sort of one a quarter over the next couple of years and probably similar rate going beyond that, it's just that we need more programs to enter development, if they're going to be INDs two years out right there, those haven't entered development, yet, so we don't expect very much attrition among that group of 10, it's among the 20 of those that will be attrition.

Yigal Nochomovitz -- Citigroup -- Analyst

Thank you very much for the comprehensive answer.

Operator

Thank you. Our next question comes from Yaron Werber with Cowen. You may proceed with your question.

Brendan Smith -- Cowen -- Analyst

Hi, thanks very much for taking the questions. This is Brendan on for Yaron. Just a quick one for us on the Lilly collaboration actually. So I mean given that there are a couple of different compounds that they're targeting ANGPTL3 and LPA. I was just wondering, first, what you're able to tell us about I guess mechanism of action or even the target sequence for your compounds that looked at some part and then understanding that a lot of it is at the discretion of Lilly, but when we might start seeing some data from either of those started? Thanks very much.

Douglas M. Fambrough -- President and Chief Executive Officer

So I don't think I can comment on particular as some folks may recognize -- RNAi is very robust. There are a lot of sequences in the gene that are responsive, some are better than others. We do go through a process of trying to identify the best ones and there is a bit of an IP. I don't know, scuffle that sort of goes on around sequences and we certainly believe we've identified things that are very active and have FTO. People may recall that it was sequence IP against the Haa1 gene that led to our owning a royalty on the OXLUMO product. We believe we are avoiding that situation with the sequences we're using in LPA and ancillary and frankly all of the other programs that we're working on. I really can't comment on the data or the timelines that is the purview of Lilly. I'm led to believe that things they take into Phase 2, they just tend to present the Phase 1 data of and I look forward to that coming to pass.

Brendan Smith -- Cowen -- Analyst

Okay, thanks very much.

Operator

Thank you. Our next question comes from Ed Arce with HC Wainwright. You may proceed with your question.

Thomas Yip -- HC Wainwright -- Analyst

Hi, good morning, everyone. This is Thomas Yip asking couple of questions. First, perhaps can you share the thoughts on the competitive dynamics of being the second entry in RNAi for PH1 and then also can you go over some details of interaction with the FDA ahead of the NDA filing?

Douglas M. Fambrough -- President and Chief Executive Officer

Sure, I'll take the first part of that and then with respect to interaction I'll pass over to Shree to answer that question. So there is a lot of unmet medical need in PH1 and there are many patients both in the US and ex-US that are yet to be diagnosed. So we expect the patient universe to be growing as doses increases. We believe our monthly self-administered prefilled syringe dosing regimen provides a particularly convenient and empowering dosing regimen for patients that are sort of customer research so to speak as we believe shows to be something that's highly desired.

So we think combined with the data that we have in PH1, there is a pretty compelling rationale for people to choose nedosiran who are freshly diagnosed. When it comes to patients that are currently diagnosed of course many of those are in the process or have already gone on OXLUMO. The data for OXLUMO suggest about 50% of patients do not achieve their oxalate reduction goal of normalization and we think that those patients are likely going to be open to trying an alternative product to see if they can achieve their goal. For patients who are well controlled and achieving normalized oxalate on OXLUMO, I think it's fairly unlikely you'll see the switch in that case based our convenience alone.

So I think that's really how the landscape sort of plays out and to the extent we really are having a lot of interest in that program for a commercial out licensing. I think that story is resonating with the commercialization -- potential commercialization partners. Shree, do you want to talk about our interactions with the FDA?

Shreeram Aradhye -- Executive Vice President and Chief Medical Officer

Yeah, thanks, Doug. So, as you know, in August, we revised our strategy to focus on seeking approval for nedosiran for the treatment of PH1. We believe that the potential approval is supported by a clinical data package that consists primarily of the data from PHYOX2 in which as you know nedosiran achieved strong statistical significance for efficacy in PH1. Subject to our ongoing discussions with the FDA, we intend to submit additional efficacy data from our open-label extension study PHYOX3. We are currently processing the data and believe that we have collected all the data we need to file. So given this and subject to our ongoing discussions with the FDA, we expect to submit our NDA in Q1 of 2022 versus the original plans for December this year.

Thomas Yip -- HC Wainwright -- Analyst

Okay, got it. Thanks Doug, and thank you both for additional details. Perhaps another question from us for DCR-AUD Phase 1 is ongoing. Can you share some initial thoughts on possible efficacy endpoints for Phase 2 and beyond?

Douglas M. Fambrough -- President and Chief Executive Officer

So the nature of the way DCR-AUD works is it provides physiological feedback to patients who are -- consume alcohol, when they're in the process of treatment to help themselves limit their alcohol consumption. And so the really relevant endpoint is what we would call a harm reduction endpoint where it reflects that people have fewer days where they drink heavily. This is as opposed to abstinence, not starting to take a drink. Abstinence would be appropriate for something that works at the level of trying to reduce cravings whereas DCR-AUD working at the level of providing feedback for those who get into their cravings is one where you would expect to see fewer days of heavy drinking. And so the reduction in heavy drinking days also sort of as I said is a harm reduction endpoint is what we will be tracking in Phase 2 and what we expect will likely be the regulatory endpoint for approval in the US and Europe.

Thomas Yip -- HC Wainwright -- Analyst

Got it. Perhaps one quick one. Does the cash runway included spending for new extra hepatic program?

Douglas W. Pagan -- Chief Financial Officer

Yes, it does include the preclinical programs that will announce as well as all of everything is in the pipeline today.

Douglas M. Fambrough -- President and Chief Executive Officer

We have planned a fairly aggressive introduction of new programs and our spending over the next several years and that is fully included in our runway calculations.

Thomas Yip -- HC Wainwright -- Analyst

Got it. Understood. Thank you again for taking our questions and we look forward to the viewing of the new extra hepatic program.

Operator

Thank you. Our next question comes from Madhu Kumar with Goldman Sachs. You may proceed with your question.

Madhu Kumar -- Goldman Sachs -- Analyst

Good morning, everyone. So thinking about alpha-1 antitrypsin PiZZ liver disease kind of in a big picture level, what do you guys consider clinical proof-of-concept for kind of clinical benefit in the setting of that disease?

Shreeram Aradhye -- Executive Vice President and Chief Medical Officer

Hi, Madhu, it's Shree. I mean you know that this is a rare disease. So I think that the evidence of efficacy is going to come from looking at improvements in liver histology soluble biomarkers and imaging. Given that the actual clinical endpoints of progression of SIPs hepatic encephalopathy need for liver transplantation are going to be hard to track in a clinical trial. Those are eventually the outcomes that matter, but in this program I think establishing that our therapeutic hypothesis that reducing the mutant protein and deliver results in restoration of hepatic homeostasis and the return -- the reduction in progression or reversal of some of the injury will be predictive of the clinical outcomes. But the primary basis is going to be on the basis of improvements in liver function histology and other markers.

Madhu Kumar -- Goldman Sachs -- Analyst

Yeah, Shree, so on that point, how do you think about the variability in liver fibrosis in ZAAT patients and how much like the kind of more biochemical type parameters things like the Z-polymer formation, Z-globulin deposition are going to be kind of more useful surrogates compared to fibrosis histology has been per se?

Shreeram Aradhye -- Executive Vice President and Chief Medical Officer

Yeah, I mean, I know you follow the NASH literature. So we know that the hard endpoint of F-scores and changes in those with high placebo responses are a challenge. So I actually fully expect and that's how ESTRELLA has been designed that it will be the concordant movement in a beneficial direction for a variety of biomarkers that include both the soluble ones they describe, histological ones like reductions in glob yield, reduction in inflammation, reductions in liver enzymes and a imaging biomarker like we are using MRE as an option as well as fibrous scan to look at sort of overarching what's happening in the liver as a whole in terms of reductions in fibrosis or tissue resistance, if you will, to ultrasound. It will be a collection of those parameters and I think that's part of the core discussions that we expect to have with regulators. We also expect to learn from what our competitors plan to do.

Madhu Kumar -- Goldman Sachs -- Analyst

Okay. And then one last one on the nedosiran NDA submission so you mentioned kind of pending ongoing pre-NDA interaction with the FDA. Is there any specific issue that's been raised as part of the kind of pre-NDA discussions or is it just kind of like standard processes of NDA filing?

Shreeram Aradhye -- Executive Vice President and Chief Medical Officer

Well, I mean, look, you know the process right. We got our PH1 data, they were very strong as part of our normal routine we engage with the division for the discussions on, now the NDA is getting ready. It's an ongoing discussion. We got feedback, no concerns on safety, and we are evaluating additional information that we believe we have already collected and that's the sort of active process that's ongoing right now.

Madhu Kumar -- Goldman Sachs -- Analyst

Okay, thank you so much, everyone.

Operator

Thank you. Our next question comes from Mayank Mamtani with B. Riley Securities. You may proceed with your question.

Yuan Zhi -- B. Riley Securities -- Analyst

Hi. This is Yuan Zhi on for Mayank. Congratulations on the progress in the last quarter. Thank you for taking our questions. I guess a follow-up on the HBV questions, understand the exact targeting positioning in the HPV genome is different. Can you remind us your target and any potential different impact you would expect versus Janssen's program? Thank you.

Douglas M. Fambrough -- President and Chief Executive Officer

Sure. Thanks for bringing this difference up. There is some molecular differentiation between our approach and the approach of the program that Janssen is developing. So as I think many people who are deep in HBV recognize there are four genes in the HBV genome. Three of which are structural and one of which is regulatory and the way the genes overlap and the transcripts for the genes map out, one has the option of trying to hit all four at the same time or hitting three out of the four and of course we evaluated that during our development. The Janssen program, it's three out of the four, as I understand it using two siRNAs and a ratio that hasn't been disclosed to my knowledge, whereas we use a single one that targets three out of the four.

We did a pretty deep analysis in what we believe is the highest fidelity mouse model of HBV, recognizing this is not a mouse fires, but there are techniques that you can do to generate viral replication in mice. It's not an active ongoing infection, but viral replication intracellularly and saw a distinct difference between three versus four gene suppression based on the status of this one that supports regulatory only protein and when you don't silence it and you have an overabundance of that regulatory protein in the mouse model that led to a longer duration suppression of that and a deeper suppression of S-antigen and this is due to sort of toggling between producing S-antigen decoy particles are producing actively infected virus of course which nuke takes care very, very effectively.

I'd say we didn't see as dramatic of difference in our Phase 1 human study, single dose, well four dose is actually in patients, but it was a limited duration study, but we are still evaluating the duration there to the extent that that mouse model shows an actual regulatory difference between three and four. The implication is that we should get better sustained as suppression and potentially a better human immune response due to that S-suppression from the three versus four. There may be a subtle difference at the margins or it may be an important difference, we will see when it comes down to functional cure rates in the Phase 2, but we're pretty confident at least at the animal model level that we've tapped into some real viral biology around the regulation of S by targeting three versus four and having a relative overabundance of that regulatory protein in order to maximize the chance of the patient's immune system mounting a successful response against the virus, which we think is critical for the ultimate functional cure and truly eliminating virus from the body.

Yuan Zhi -- B. Riley Securities -- Analyst

Yeah, thanks for the helpful color. Understand nuke is very important as the part of the combination. Just want to hear your comments on that. If you could add another part, another arm of therapy to the combo therapy you have, what would be ideal one to generate more synergies? Thank you.

Douglas M. Fambrough -- President and Chief Executive Officer

The ideal third combination partner alongside siRNA and nuke is in the immune system activator to help refresh the exhausted immune response and drive T-cell mediated elimination of infected cells that carry CCC DNA. That is the -- to the extent we have proof of how to generate functional cure, the proven way nuke and interferon being that proof, a small number of patients, but we believe that with an siRNA particularly given its suppression of S you can really drive that number up. So I think that's the way to go, there are two triple combination cohorts like that in the clinical program that Roche is pursuing with RG6346 one with peginterferon Pegasus of course their long time interferon product and the second with there in development liver activated TLR7 agonist.

Yuan Zhi -- B. Riley Securities -- Analyst

Yeah. Thanks for the color. Thank you.

Operator

Thank you. And I'm not showing any further questions at this time. I would now like to turn the call back over to Doug Fambrough for any further remarks.

Douglas M. Fambrough -- President and Chief Executive Officer

Thanks everyone for paying attention today and all your questions. We're in a really strong position. Financially, we are in a strong position with our technology and our pipeline, there is some really exciting stuff coming. So I feel really good about our prospects here. Thanks a lot. Bye, bye.

Operator

[Operator Closing Remarks]

Duration: 52 minutes

Call participants:

Kristen Sheppard -- Senior Vice President of Investor Relations

Douglas M. Fambrough -- President and Chief Executive Officer

Douglas W. Pagan -- Chief Financial Officer

Shreeram Aradhye -- Executive Vice President and Chief Medical Officer

Jonathan Miller -- Evercore -- Analyst

Mani Foroohar -- SVB Leerink -- Analyst

Luca Issi -- RBC Capital -- Analyst

Stephen Willey -- Stifel -- Analyst

Yigal Nochomovitz -- Citigroup -- Analyst

Brendan Smith -- Cowen -- Analyst

Thomas Yip -- HC Wainwright -- Analyst

Madhu Kumar -- Goldman Sachs -- Analyst

Yuan Zhi -- B. Riley Securities -- Analyst

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