Analyst Conference Summary


Dicerna Pharmaceuticals

conference date: May 7, 2020 @ 1:30 PM Pacific Time
for quarter ending: March 31, 2019 (first quarter, Q1)

Forward-looking statements

Overview: Clinical stage biotechnology company continues to develop its RNA based therapies. In January 2020 received $375 million in upfront payments from Roche and Novo Nordisk collaborations.

Basic data (GAAP):

Revenue was $34 million, up sequentially from $7.1 million, and up from $3 million year-earlier.

Net income was negative $25 million, up sequentially from negative $40 million, and up from negative $28 million year-earlier.

Diluted EPS was negative $0.31, up sequentially from negative $0.58, and up from negative $0.38 year-earlier.

Guidance: Cash on hand sufficient fot fund into 2023. Expenses will increase significantly.

Believes cash should suffice until 2023. Believe expenses will increase significantly for the foreseeable future.

Conference Highlights:

Douglas Fambrough, CEO of Dicerna said "While COVID-19 has resulted in slower enrollment in our clinical trials, we have nonetheless been able to execute on every front within our immediate control and have been putting in place measures that we believe should help to mitigate the potential for any protracted effects from trial adjustments to allow us to rapidly move forward on a clinical level as restrictions are lifted and it is safe to do so. Among our recent achievements, we met our objective to deliver an overview of the positive early observations from our PHYOX3 long-term, multidose trial of nedosiran, our lead product candidate in development for treatment of primary hyperoxaluria, or PH, types 1, 2 and 3. We also entered into two agreements with Alnylam in early April, the first of which enhances our confidence to bring nedosiran to market upon approval and will enable us to earn meaningful royalties on product sales of Alnylam's PH type 1 product candidate post-approval, and the second of which provides us with another treatment candidate to evaluate for alpha-1 antitrypsin deficiency-associated liver disease, enhancing our opportunity to advance a new therapy that we believe has the greatest potential to benefit patients." Cannot give guidance on timing of trial completions at this time.

Cash and equivalents balance ended at $707 million, up sequentially from $349 million. Received $375 milion in January from Novo Nordisk and Roche.

In Q4 2019 Dicerna made a collaboration and licensing agreement with Roche to develop therapies for chronic hepatitis B virus (HBV) infection using GalXC RNAi platform technology, including RG6346 (was DCR-HBVS), which is in Phase 1 clinical development. The agreement also includes the discovery and development of therapies targeting human genes associated with HBV infection, or additional targets within the HBV genome, using the technology platforms of both companies. Dicerna received $200 million up front in January 2020, and could receive up to $1.47 billion in potential milestone payments.

On May 10, 2020 Dicerna announced Roche has formally nominated the first selected target and thus has initiated the research and development portion of its agreement with the Company.

In April 2020, Dicerna and Alnylam completed a cross-license agreement for Alnylam's lumasiran and Dicerna's nedosiran for the treatment of PH (type 1 or 2). This provides for Alnylam to pay mid- to high-single-digit royalties to Dicerna based on global net sales of lumasiran and for Dicerna to pay low-single-digit royalties to Alnylam on global net sales of nedosiran. The two companies will also cooperate in developing the A1AT program, with Dicerna able to choose between its own product and ALN-AAT02. Alynlam will have the right to opt-in to overseas rights. Royalties would depend on the candidate chosen and geography.

The Anylam agreement eliminates the portential for costly IP litigation.

In early Q4 Dicerna initiated dosing in PHYOX2, a long-term, double blind, study of Nedosiran (DCR-PHXC) for the treatment of PH (primary hyperoxaluria) types 1 and 2. Should complete enrollment in 2020. Has Breakthrough Therapy Designation for DCR-PHXC for the treatment of primary hyperoxaluria type 1. First multi-dose preliminary data from PHYOX3 was presented in March 2020, with all four patients who received at least three monthly doses of nedosiran achieving normalization or near-normalization of urinary oxalate levels on at least two visits. Considering partnering outside the US for commercialization.

The multi-center Phase 1/2 trial of DCR-A1AT began Q3 2019, with first dosing expected in Q4 2019. The study will evaluate DCR-A1AT in adult healthy volunteers and patients with A1AT deficiency-associated liver disease. Dicerna in Q2 2019 submitted a clinical trial application to the Swedish Medical Products Agency for DCR-A1AT for the treatment of patients with alpha-1 antitrypsin deficiency-associated (A1AT) liver disease. In December 2019 receiped oprhan drug designation in the EU. In Q1 2020 received orphan drug designation from the FDA.

During the first quarter of 2020, Eli Lilly selected LY3819469, a GalXC molecule for the second collaboration target in cardiometabolic disease, for advancement into preclinical development.

Dicerna expects its overall R&D expense to continue to increase for the foreseeable future.

Most of the recent cash is being treated as defered revenue.

Expects to expand its internal pipeline in the coming quarters. Believe GalXC platform can be extended beyond the liver. First target will be CNS. Will have more information at August investor day.

Operating expense of $59 million consisted of $43 million for R&D and $16 million for general and administrative expense. Loss from operations was $25 million. Interest income $3 million.

Q&A summary:

A1AT candidates decision? We are early in the process. We could not share data until the anti-trust analysis was completed. Will take a number of months to make a decision. If we choose our own candidate we should be able to stick to our prior timeline.

Roche Galxc target selection? They can select up to five, and move three forward.

The actual R&D day has not been set, but will be in August.

PHYOX3 patient numbers for research day readout, etc.? 17 patients enrolled. In August would expect majority to have more than 3 doses. We expect a good amount of patients to reach the 6 month endpoint that we will use.

Long undisclosed liver program in pipeline? Will not have more until next year. It is not a rare disease program. It is a signal we are going after non-rare indications.

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Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2020 William P. Meyers