Analyst Conference Summary

biotechnology

conference date: August 9, 2021 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2021 (second quarter, Q2)

Forward-looking statements

Overview: First NDA submission planned for later in 2021.

Basic data (GAAP):

Revenue was $41.3 million, down sequentially from $47.6 million, and up from $40.4 million year-earlier.

Net income was negative $40.8 million, down sequentially from negative $30.0 million, and down from negative $32.8 million year-earlier.

Diluted EPS was negative $0.53, down sequentially from negative $0.39, and down from negative $0.43 year-earlier.

Guidance:

Cash should last to 2025.

Conference Highlights:

Douglas Fambrough, CEO of Dicerna said "As positive as these results are for PH1, the inconsistent data seen specifically in participants with PH2 have led us to make the strategic decision not to move forward with our plan to build Dicerna into a fully integrated commercial enterprise to support nedosiran. Instead, we intend to pursue commercial out-licensing opportunities to help ensure global access to nedosiran, subject to necessary approvals. This approach will allow us to deploy our capital and talent on our discovery and development pipeline efforts with our GalXC and GalXC-Plus RNAi investigational therapeutics for ourselves and our partners. With these strategic adjustments focused on our core strengths, we can extend our cash runway into 2025."

The PHYOX2, a long-term, double blind, study of nedosiran (DCR-PHXC) for the treatment of PH (primary hyperoxaluria) types 1 and 2 completed enrollment in Q1 2021 and reported positive data in August 2021 for type 1, not for type 2. An NDA could be submitted in Q4 2021. Has Breakthrough Therapy Designation for PH1. In October 2020 presented positive interim daa from the open label extension study. In June 2021 completed dosing of PHYOX4 for PH3. Dicerna believes its data will be sufficient for approval and are best-in-class. PHYOX7 for patients with severe renal impairment dosed first patient in May 2021, but will not have data in time for the FDA. Looking for an ex-US partner.

In July 2021 announced DCR-AUD, an investigational GalXC RNAi therapy for the treatment of alcohol use disorder (AUD), had its IND accepted by the FDA. Dicerna believes the properties of its RNAi technology have the potential to transform AUD treatment by developing, for the first time, a potentially long-acting, well-tolerated, conveniently subcutaneously delivered, highly targeted therapeutic candidate to inhibit ALDH2, a key enzyme in alcohol metabolism. The Phase 1 dosing level trial will begin in Q2 2021.

Belceiran, the GalXC RNAi candidate for the treatment of alpha-1 antitrypsin deficiency-associated liver disease (AAT-LD), reported Phase 1 interim data from healthy volunteers in July 2021. Dose-dependent reductions of AAT were shown with a single dose. The final, highest dose cohort is ongoing. In June 2021 initiated a Phase 2 trial in Q3 2021.

In April 2021, Royalty Pharma plc agreed to acquire Dicerna's royalty interest in Oxlumo (lumasiran) for an upfront cash payment of $180 million and up to $60 million in contingent sales-based milestone payments. Oxlumo, which has been approved by the FDA and EMA for the treatment of primary hyperoxaluria (PH) type 1, is marketed by Alnylam.

In March 2021 Dicerna presented data from preclinical studies of GalXC-Plus RNAi technology demonstrating its potential to deliver deep and sustained mRNA knockdown against prespecified gene targets across the CNS and to oligodendrocytes, astrocytes and neurons, at the sixth annual Oligonucleotide and Precision Therapeutics Virtual Congress.

5 developmental candidates are nearing initial clinical trials. Over 5 years expects to have 2 commercial products in the U.S. plus royalties from collaborations. There are also 20 research-stage programs in development. Believes new products will enter the clinic at the rate of about 1 per quarter.

Cash and equivalents balance ended at $710 million, up sequentially from $545 million.

The PHYOX2, a long-term, double blind, study of nedosiran (DCR-PHXC) for the treatment of PH (primary hyperoxaluria) types 1 and 2 completed enrollment in Q1 2021 and should read out data this year. An NDA could be submitted in Q4 2021. Has Breakthrough Therapy Designation for PH1. In October 2020 presented positive interim daa from the open label extension study. In Feb 2021 dosed first patient in PHYOX4 for PH3. Dicerna believes its data will be sufficient for approval and are best-in-class. PHYOX7 for patients with severe renal impairment dosed first patient in May 2021, but will not have data in time for the FDA. Looking for an ex-US partner.

RG6346 for HBV reported positive interim Phase 1 data in Q4 2020. Roche initiated RG6346 in a Phase 2 combination trial in March 2021, earning Dicern a $25 million milestone payment. That is part of a larger trial trying multiple combinations.

In May 2021 Boehringer Ingelheim accepted DCR-LIV2 for the treatment of chronic liver diseases, triggering a single-digit milestone payment.

Lilly filing the IND and having it accepted by the FDA for GalXC RNAi candidate LY3819469 targeting the LPA gene in the second quarter of 2021, resulted in a $10 million milestone payment.

Operating expense of $82 million consisted of $56 million for R&D and $25 million for general and administrative expense. Loss from operations was $40 million. Other expense $0 million.

Q&A summary:

Commercialization partners for PH1? Looking at it an outlicensing opportunity, could be global or regional players.

Hypothesis on PH2 failure? It was a shock to us. Expected activity. No leading hypothesis at present. There had been a signal from the single dose, surprised no signal with monthly dosing.

PH3? Our NDA will be for PH1 only.

Timeline for PH1 partnership? Discussions are ongoing. Rate limiters are the NDA and approval.

Threshold for commercial infrastructure? Next likely is AAT, which if it comes to pass would be worthwhile for us to build out a commercial sales force. The critical factor is confidence in becoming cash flow positive.

Extra-hepatic space? We are pleased with the broadness of delivery to other tissues of our platform. Lilly is working with us on CNS. Other companies are focusing on muscle tissue. We would like to stay in more of an open field, going for other tissue types. The pandemic has disrupted preclinical timelines, so no prediction right now.

Fibrosis levels allowed in AATLD trials? Astrella trial is enrolling a broad population of fibrosis types.

For the initial part of DCR-AUD trial we will not have cohorts consuming alcohol. The endpoint is harm reduction for people who have AUD.

Belcesiran progam? One other company in Phase 2, so not really a crowded field. Since the mechanism of action is the same, the differentiation is mode of administration. AAT liver disease patients also have AAT lung disease, so paring of lung augmentation compound could be a differentiator.

Peak sales $500 million to $1 billion previously, now without PH2? We had PH2 as being a significant minority of total sales. PH3 a small fraction. Clearly prior forecast is no longer applicable.

More collaborations possible? There is a logistical challenge in adding more names to the list. We do have more capability to develop clinical candidates than we can take forward ourselves, though we have more capability than we did a few years ago.

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