Arrowhead Pharmaceuticals - Earnings Call - Q4 2014

Transcript

Speaker 0

Ladies and gentlemen, welcome to the Arrowhead Research Fiscal twenty fourteen Fourth Quarter Year End Financial Results Conference Call. Throughout today's recorded presentation, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask questions. I will now hand the conference call over to Vincent Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Speaker 1

Thank you. Good afternoon, everyone, and thank you for joining us today to discuss Arrowhead's results for its fiscal twenty fourteen fourth quarter and year ended September 3034. With us today from management are President and CEO, Doctor. Christopher Anzalone Chief Operating Officer and Head of R and D, Doctor. Bruce Given Chief Financial Officer, Ken Myszkowski.

Management will provide a brief overview of the quarter and will then open up the call to your questions. Before we begin, I would like to remind you that comments made during today's call may contain certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact, including without limitation those with respect to Arrowhead's goals, plans and strategies are forward looking statements. These include, but are not limited to, statements regarding the anticipated safety and or efficacy of ARK-five twenty and our other clinical programs as well as anticipated timing for study enrollment and completion. They represent management's current expectations and are inherently uncertain.

Thus, actual results may differ materially. Arrowhead undertakes no duty to update any of the forward looking statements discussed on today's call. You should refer to the discussions under Risk Factors in Arrowhead's annual report on Form 10 ks and company's quarterly reports on Form 10 Q for additional matters to be considered in this regard. That said, I'd like to turn the call over to Doctor. Christopher Anzalone, President and CEO of the company.

Chris?

Speaker 2

Thanks, Vince. Good afternoon, everyone, thank you for joining us today. The 2014 fiscal year was one of progress and expansion for Arrowhead. We pushed our first candidate ARK520 into the clinic. We began a rapid pipeline expansion with the introduction of our next candidate ARK AAT and we made important corporate progress on multiple fronts such as strengthening our balance sheet.

Let's begin with ARK-five twenty. We completed a first in man Phase one study in nine cohorts that assessed safety and tolerability of doses ranging from zero point zero one to four mgkg in a total of 54 subjects. There were no dropouts for adverse events, no serious adverse events or adverse events rated as severe. Neither the incidence nor severity of AEs was different between the treatment groups and placebo and we did not see any dose limiting toxicities. ARK-five twenty and the underlying DPC delivery system appears to be well tolerated at all dose levels studied.

This is a strong and important statement. A substantial unknown for any new candidate and platform entering clinical studies is whether a safety signal will emerge that was not predicted in animal models. The positive safety profile we have seen represents a significant derisking event for ARK-five twenty and a broader DPC platform. With confidence in the safety and tolerability of ARK-five twenty, we moved into a Phase IIa dose finding study in order to characterize single dose activity in chronic HBV patients. Specifically, we are learning the safety profile of ARK-five twenty in HBV patients and how deeply various doses of ARK-five twenty will suppress a specific viral protein to surface antigen or S antigen.

This study is ongoing, but we have completed dosing twenty four patients in three initial cohorts one, two and three mgs per kg. We have have presented data from one and two mgs per kg and we are still following patients from the three mgs per kg cohort, which is still blinded. We have begun screening patients for enrollment in an additional cohort of eight patients at four mgs per kg. Several important findings are emerging. First, the safety profile of ARK-five twenty appears to be similar in patients as in healthy volunteers.

Second, ARK-five twenty is clearly active and decreasing production antigen. And third, the duration of effect is longer than we expected, which has very positive implications for upcoming multi dose Phase 2b studies. These are good data. As far as we know, this is the first reliable report demonstrating clear reduction of S antigen in humans after a single dose. As such and because many believe that decrease in S antigen could lead to a functional cure of chronic HBV, physicians and HBV experts we spoke with at the recent AASLD Liver Meeting shared our excitement.

We reported mean peak knockdown of thirty nine percent with one mg per kg of ARK520 and fifty one percent with two mg per kg. Simply put, this has been a lofty and unmet goal in the HBV field for years and we just accomplished it. With these preliminary data, let me tell you why we are so confident about the program. Our goal is not to clear S antigen directly with ARK-five twenty, but rather to decrease it to a level that de represses the immune system such that it may take over and control the virus. If successful, is potentially a route to functional cure.

Because no drug has been able to do this consistently, the precise level of reduction required to enable this process is unknown. Before we started the single dose 2a study in patients, our goal was to find a dose in humans that peaks at 90% reduction. This somewhat arbitrary goal was set because we expected a U shaped knock knockdown curve characterized by rapid reduction followed by equally rapid release such that thirty days after dosing S antigen levels would be approaching baseline. We reasoned that as long as S antigen levels had not returned to baseline by the time of the next dose, we might achieve an additive dynamic over time that over time would give us a sustained reduction profile. What we are seeing however is a more drawn out L shaped knockdown curve where reduction in S antigen is sustained over a relatively long period of time.

In fact, mean peak knockdown at two mgs per kg did not even occur until after thirty days post dosing. Therefore, we expect monthly dosing to produce a step down or additive effect because subsequent dosing will be acting on top of sustained activity from prior doses. We have seen this additive dynamic in animal models and expect to see it with repeat dosing in humans. In fact, other RNAi companies have used daily so called loading doses in humans to create an additive step down effect on gene knockdown. Our monthly dosing could give us a similar effect, effect, but with far less frequent dosing given our long duration of action.

This provides us with the potential ability to achieve exactly what our experts believe is important that is sustained and deep reduction of S antigen over time. In addition, remember that one and two mg per kg are just the first two doses of an ongoing dose escalation study. We have already completed dosing the three mg per kg cohort and are screening for the four mg per kg cohort. Therefore, we have powerful tools to achieve sustained and deep knockdown. The additive effect we expect to see upon multi dosing and deeper knockdown we expect to see as we increase dose.

This may be viewed in the context of a favorable safety profile that has not produced dose limiting toxicities in any dose studied. We believe this is a good position to be in. We plan to complete the Phase 2a, which we now expect to include three and four mg per kg dose cohorts and present a full picture of the study results when they are available. Depending upon the pace of enrollment, this may be available around the time of EASL conference in April of twenty fifteen, but that will depend on enrollment speed, which we do not control. There's much we do not know about ARK-five twenty and how to optimize its effectiveness as a therapy.

We are just now starting to scratch the surface. The best way to begin chipping away at how to address chronic HBV is to move into multi dose studies as soon as we can. We plan to begin regulatory submissions before the end of this year in support of these studies. We will have clinical sites in the Western Europe and Asia in order to gain access to a large number of patients in a variety of HBV genotypes. Multiple parallel studies are currently contemplated including ARK-five twenty in combination with entecavir or tenofovir as well as combination studies with different immunostimulatory agents in various dosing regimens.

We are pioneers in this field, so I expect that each study will open new questions and present new possible strategies to attack the virus. As such, the multiple Phase 2b studies will necessarily iterative. Consider our addition of new studies that today we may not even imagine as indicative of strength not of weakness. We are looking for functional cures during the Phase 2b studies and the way to unlock as much value as possible from ARK-five 20 is to follow the data and build as large and diverse a data set as possible. Let's now move to ARK-five to ARK AAT.

During the year, we expanded our pipeline and nominated ARK AAT as our next clinical candidate for the treatment of liver disease associated with a genetic mutation that causes alpha-one antitrypsin deficiency. According to the patient advocacy group, the Alpha-one Foundation, there may be as many as 100,000 S. So this could represent a relatively large orphan drug population. Further, there is no current treatment for liver disease associated with Alpha-one antitrypsin deficiency.

At AASLD, we presented preclinical data showing that Arc AAT can induce deep levels of target knockdown in established animal models. The interest in this approach was such that we were assigned a plenary session spot and highlighted as one of only 11 most important abstracts at the meeting by the Association President. We also demonstrated that Arc AAT could maintain 80% to 90% knockdown in nonhuman primates when dosed every six weeks. We recently filed in Australia for approval to begin a Phase one study of ARK AAT. Moving from our pipeline progress to corporate progress.

During fiscal twenty fourteen, we strengthened our balance sheet with equity financings totaling approximately $172,600,000 in net proceeds. This allows us to expand the scope of ARK-five twenty Phase 2b and conduct several studies in parallel that answer key questions about the drug. More broadly, a strong balance sheet allows us to move our candidates forward independently and retain more of the economics for our shareholders than if we were forced to seek a partner at an early stage. We also hired additional staff in key areas including manufacturing, toxicology, chemistry, biology, quality assurance, regulatory clinical operations to support rapid development of ARK-five twenty, ARK AAT and additional clinical candidates. We took steps to improve our exposure to institutions by upgrading our NASDAQ listing, the NASDAQ Global Select Market.

And during the year, we were also added to the broad market Russell three thousand Index and the small cap Russell two thousand Index. We are very pleased with the progress and results from the ARK-five twenty clinical studies and the ARK AAT preclinical studies. As a product and a platform company, lessons learned from one drug candidate help to inform development and derisk additional candidates. We believe we are moving past some of the key early risks of drug development, which bodes well for us and for our shareholders as we enter mid stage studies of ARK-five twenty and as we embark on a period of pipeline expansion that starts with ARK AAT. With that overview, I would now like to turn the call over to our COO and Head of Development, Doctor.

Bruce Given. Bruce?

Speaker 3

Thanks, Chris, and good afternoon, everyone. We made a lot of progress in 2014 in our lead candidate ARK-five twenty in addition to expanding our pipeline to include ARK AAT. It's a testament to the potential of both product candidates that we were selected to present data on ARK-five twenty in a late breaker or poster session and on ARK AAT in a plenary session at AASLD earlier this month. The following is review of these data. We completed nine dose cohorts in our Phase one trial of ARK-five twenty.

The study was designed to characterize the safety profile of ARK-five twenty across a range of doses and to evaluate pharmacokinetics. It was a randomized double blind placebo controlled single dose escalation first in human study of ARK-five twenty administered intravenously to healthy adult volunteers. All subjects received either placebo or ARK520 in doses ranging from zero point zero one to four mgs per kg. The study successfully enrolled 54 subjects at a single center with 36 receiving ARK520 and 18 receiving placebo. There were no reports of serious AEs, no dose limiting toxicities, no discontinuations due to AEs and a modest overall rate of AEs without a clear dose related increase in frequency or severity.

There is a modest occurrence rate of non clinically significant abnormal laboratory tests in placebo and ARK-five 20 treated subjects. There were no reported drug related or clinically significant differences for vital signs or between subjects receiving drug versus placebo. One occurrence each of moderate flushing and urticarial rash seen at dose levels of zero point three mg per kg and two mg per kg respectively led to the subsequent reduction in infusion rate of ARK520 as well as the introduction of pretreatment with an oral over the counter antihistamine. Since the introduction of these mitigations, no signs of hypersensitivity or infusion reactions have been seen. There were no changes in ALT, AST or CK considered to be clinically significant by the study investigator.

So in conclusion, ARK-five twenty when administered as a single dose up to four mgs per kg to healthy volunteers appears to be well tolerated. In March 2014, we began a Phase 2a multi center randomized double blind placebo controlled dose escalation study to determine the depth and duration of hepatitis B surface antigen reduction after a single intravenous dose of ARK-five twenty in combination with entecavir in patients with chronic HBV infection. We are also assessing safety and tolerability and multiple additional secondary and exploratory endpoints. At each dose level to be evaluated, a cohort of eight patients are enrolled with six being dosed with ARK-five twenty and two being dosed with placebo. Single doses of ARK-five twenty are being evaluated and to date three ascending doses one, two and three mgs per kg have been completed and screening for dose escalation of four mgs per kg is actively underway.

In the first three dose cohorts, twenty four patients were successfully dosed, eighteen of which received drug and six received placebo and unblinded data is available for the first two cohorts. So interim results for one and two mgkg and partial still blinded safety results from the three mgkg cohort were reported at the AASLD Liver Meeting earlier this month. To date, there have been no serious AEs, no dose limiting toxicities, no discontinuation and a modest overall occurrence rate of AEs. All reported AEs were either deemed unrelated to study drug or unlikely related by the principal investigator. Safety labs continue to lack indication of end organ toxicity with the lowest occurrence rate of abnormal laboratory tests in ARK-five twenty in placebo treated patients and no observed relationship to timing or dose.

ARK-five twenty activity is assessed by measuring percent change of S antigen from baseline. We believe this is the first time that a reduction in S antigen mediated through RNA interference has been reported in chronic HBV patients. Initial results indicate that a single injection of ARK-five twenty resulted in significant reduction in S antigen for up to forty three days. In Cohort one, the mean nadir of S antigen was minus 39% with a range of minus 22% to minus 57%. In Cohort two, the mean nadir of S antigen was minus 51% with a range of minus 46% to minus 59%.

For Cohort two, the percent reduction in S antigen was statistically significant versus placebo for days three through 40 three post dose. For cohort two, the mean day of S antigen nadir was day thirty three. Turning to RKAT, we also presented data from this product at AASLD this month. Arc AAT is our clinical candidate for the treatment of liver disease associated with alpha-one antitrypsin deficiency, a rare genetic disease that severely damages the liver and lungs of affected individuals. These patients synthesize a mutant form of AAT called Z AAT, greater than 90% of which is produced in the liver, which is poorly secreted and accumulates in the liver resulting in injury.

The goal of treatment with Arc AAT is to silence production of Z AAT production in the liver, thereby preventing further accumulation of Z AAT and potentially reversing pre existing liver disease and fibrosis. In preclinical studies with PIs mice, which are genetically modified to produce the mutant human Z AAT, Arc AAT induced a greater than 95% reduction in circulating AAT after a single dose with a long duration of effect. The area covered by Z AAT globules and globule size within the liver were significantly reduced after a single dose of Arc AAT at day fifteen post dose and at day twenty nine post dose, the two time points measured. Multi dose studies in PIS mice showed that at week thirteen of the study, after four biweekly doses, the Arc AAT treated group showed 99% less soluble ZAAT, which is the monomer form of the protein synthesized by the liver and 79% less insoluble ZAAT, which is the polymer that forms when the monomers cannot be normally secreted. It is this polymeric form that is contained in the globules.

Thus injection of RKAT in transgenic mice expressing human ZAAT resulted in prevention of formulation of new globules and then reduction in size and number of preexisting Z AAT globules and importantly associated liver inflammation. In primate studies, a greater than 90% reduction of AAT and serum was observed after a single injection, which persisted for over ten weeks with greater than 80% knockdown observed at the six week time point. Multi dose studies in primates showed a sustained reduction of AAT with once every six week dosing, suggesting that once monthly or even less frequent dosing may be sufficient to maintain approximately eighty percent to ninety percent knockdown in humans. The treated animals showed no changes in clinical chemistry, including ALT, AST, BUN and creatinine indicating that RKAT appeared to be well tolerated at these optimal therapeutic dose levels. As Chris mentioned, we recently filed for permission to begin a Phase one study of RKAT.

Pending approval, we intend to proceed with a double blind placebo controlled dose escalation Phase one study to determine the safety, tolerability, pharmacokinetics and effect on circulating alpha-one antitrypsin levels following a single dose of ARC AAT. The study is planned to start in Australia in healthy volunteers and with dose escalate until predetermined levels of alpha-one antitrypsin reduction are reached. Once these levels of protein knockdown are achieved, the study will transition into a population of patients with ZZ genotype alpha-one antitrypsin deficiency to further evaluate escalating doses of ARK AT. The study is designed to enroll up to 48 subjects including healthy volunteers and patients. So with that update, I would now like to turn the call over to our CFO, Ken Biszkowski to review our financials for the period.

Ken? Ken, you there?

Speaker 4

Year ended September 3034 was $58,600,000 or $1.25 per share based on 47,000,000 weighted average shares outstanding. This compares with a net loss attributable to Arrowhead of $31,100,000 or $1.3 per share based on 24,000,000 weighted average shares outstanding for the year ended September 3033. Total operating expenses for the year ended September 3014 were $53,500,000 compared to $24,900,000 for the year ended September 3033. Net cash used in operating activities in fiscal twenty fourteen were $35,400,000 compared with $19,000,000 in the prior year period. The increase in operating expenses and cash used in operating activities as compared to the prior fiscal year reflects costs associated with the progress achieved on our lead candidate ARK-five twenty as well as our recently announced second candidate ARK AAT.

These costs include manufacturing of clinical supplies for clinical trials, toxicology studies and the costs associated with administration of clinical trials as well as increased headcount as compared to last year. Turning to our balance sheet. Our cash and investments of cash were $177,300,000 at September 3034 compared to $29,800,000 at September 3033. The increase in our cash balance reflects $172,600,000,000 in cash from financing during fiscal twenty fourteen. Our cash resources keep us on solid financial footing and provide ample runway to support the needs of our operations.

Our common shares outstanding at September 3034 were 54,700,000.0 and would be 58,600,000.0 assuming conversion of the preferred shares outstanding at September 3034. With that brief overview, I will now turn the call back to Chris.

Speaker 2

Thanks, Ken. We've always believed that the DPC delivery platform and RNAi in general have some very attractive features that will allow us to rapidly expand our pipeline once we have proof of concept for the underlying technologies. In its most basic form, a technology platform enables a company to build multiple products in a cost effective way and should have a progressively lower risk profile. We believe emerging ARK-five 20 Phase IIa data as well as upcoming Phase IIb data and ARK AAT Phase I data can give us that proof of concept validation. We are seeing scientifically important and potentially meaningful results.

We hope to provide additional data throughout 2015 that support this position. So what are some of the key events As mentioned, we have filed to begin a Phase one study of AARC AAT in up to 48 subjects including healthy volunteers and AATD patients. We plan to initiate this study shortly after receiving regulatory approval and believe we can achieve clinical proof of concept in 2015. We plan to file with regulatory authorities this quarter to begin a series of Phase 2b studies of ARK-five twenty.

Our goal is to develop a comprehensive data set on ARK-five twenty's activity in various patient populations using various combinations and different dosing regimens. Expect to see additional details as we initiate these studies throughout 2015. We'll continue the dose finding Phase 2a study of ARK-five twenty and present a full data set once it is complete. We are also working on additional drug candidates based on various formulations of the DPC delivery system. We expect filings for our next clinical candidate in calendar twenty fifteen and we hope to provide updates about progress on DPC that can be administered subcutaneously and DPC targeting extrahepatic tissues in calendar twenty fifteen.

We feel confident about where we are with ARK-five twenty. We believe that it carries substantially lower risk now that we have established a base safety profile and have demonstrated that it is effectively hitting its target with a long duration of effect. The next step is to establish that ARK-five twenty can lead to a clinical benefit in patients and enable functional cures. We also hope to demonstrate clinical activity with ARK-eighty as we enter clinical trials shortly. We expect 2015 to be exciting to be an exciting year indeed.

So thanks for joining us on our call today and we look forward to continued progress in fiscal twenty fifteen. I would now like to open the call up to your questions. Operator?

Speaker 3

Thank you,

Speaker 0

The first question comes from Thomas Wei from Jefferies. Your line is open. Please go ahead.

Speaker 5

Thanks. Just a couple of questions. First on the renal and the liver toxicity that was seen in the animal studies. Could you just help us understand was that something that was associated with dose level given or the number of doses? And how quickly was that seen in animals?

Just wanted to get a sense of how much we should interpret from this early human data?

Speaker 2

Bruce, do want to take that?

Speaker 3

Sure. I mean, we haven't spoken much about it before Chris. I mean, much would you like me to cover here?

Speaker 2

Well, can talk about generally what we have seen in GLP tox studies and non GLP studies not necessarily doses, but you can give an idea about what we see in acute tox.

Speaker 3

So Thomas, what we see once you get to doses that reduced toxicity is the first sign is just transaminase increases in the liver. And for the kidney, it would be BUN and creatinine. And the corresponding toxicity related to that is in the liver hepatocyte damage. And in the kidney, it's proximal tubular damage that we see that corresponds to those chemistries. One encouraging thing about our product is that it's cleared from the circulation quite quickly.

So in fact when you see that toxicity you see it early. You see it in the first twenty four or forty eight hours. And if you don't see any toxicity then you won't see it later. And of course, we're talking about dosing monthly or maybe even less frequently. So the what's good about that is that with chronic dosing, we don't see an increase in toxicity.

When you're at the dose level that you get findings, they tend to be the same after the first dose, if you will, as after multiple months of dosing. They don't increase and basically they the organs recover in the interval between dosing. So hopefully that answers your question.

Speaker 5

That's helpful. And then my second question was just on the duration of effect here. You had shown in the poster that the mean nadir was achieved at day thirty three in the two mg per kg cohort. It's not the median, but presumably that means that around half of patients have their surface antigen start rebounding before day thirty and the other half are after day thirty. When we think about your multi dose study, are there any dosing or efficacy or safety implications around that the fact that half of patients might have a duration of effect that's less than thirty days?

Speaker 3

Do want me to handle that Chris? Sure. Go ahead. Yes. Thomas, it's really a pretty flat post response curve.

It's kind of what Chris said, it's not a U shape or V shape sort of curve where you go to your nadir and you come right back up. It really was much more of a flat sort of curve. And the nadir by definition is the lowest value. But overall, it was not a sharp loss of activity. So we were still statistically significant at day 43 and frankly probably would have been at day 57 except that we had an odd individual in the placebo group that caused a sort of strange data point at day fifty seven.

So it's really not a situation where any of those patients the two mg per kg dose were flying back up after day thirty for instance. They're all, I would say suppressed about the same. And it's so the notion of if we dose it at day thirty for instance, are we really dosing at a point of still very significant knockdown, I think the answer is going to be yes. And I don't think there's going to be a lot of individual variability affecting that.

Speaker 2

And let me just add two things on both those questions. First, regarding tox. So as Bruce mentioned, we've done an awful lot of work on deriving tox with high doses in animal models, because we want to understand what that looks like when you start to approach a toxic dose. And so I think we

Speaker 3

have a good idea of

Speaker 2

what that looks like across multiple species. And importantly, we're just not seeing any signs of that at the doses we're studying right now in humans. As we talked about, we've seen no DLTs. We've seen a very well tolerated drug so far. So I don't it does not feel like we're terribly close to where things might start to become a bit toxic.

And second, let me just add on the on dosing on top of prior doses. So keep in mind also as you know Thomas that as you increase dose as we increase dose, we expect to see a deeper knockdown. And there's generally at least in animal models and in humans with other companies, there's generally a correlation between depth and duration of knockdown. And so as we get deeper knockdown with three mg per kg and four mg per kg, I expect that we'll get a longer duration of knockdown as well. And that should give us plenty of room to be dosing right on top of the prior dose and maybe even on top of the dose prior to that as well for dosing every thirty days.

And so we think we should get a really strong additive effect with multiple doses not just the second dose, but maybe the third dose and beyond.

Speaker 5

Great. Thanks for taking my questions.

Speaker 2

Sure. Thank you, Thomas.

Speaker 0

Thank you. Our next question comes from Michael Yu from RBC Capital Markets. Your line is open. Please go ahead.

Speaker 6

Hey, thanks. A couple of questions. First on the hepatitis B program. Do you have the medians for Cohort one and Cohort two? And do you know if there was any relationship to amount of knockdown in baseline S antigen?

That's the first question. Second one is on thinking about all these Phase 2s that are starting up in 2015, do you legitimately think we'll get data on these? And or do you think we need to sort of wait for the Phase 2b program to get a better read on whether greater knockdown actually leads to seroconversion? And then I have one AAT question.

Speaker 2

All right. Bruce, you want to take the first question and I can speak to the second one?

Speaker 3

Yes. Michael, I'm not I don't have the median data in front of It's fairly small group. It's six subjects. So I'm not sure that the median would help us a lot. I don't think the data was generally driven by outliers.

So I don't think the median data would be very much different than the mean data. But that said, I don't have it in front of me to look at. It's not the way we've been reporting the data or graphing it for that matter. So I don't have a good I can't give you an answer for that. And then baseline, do

Speaker 6

we know anything originally just the baseline assumption levels?

Speaker 3

Yes. So the baseline varied varied in these patients from a low that was fairly close to 1,000 international units and the high, if I remember right, was up around 15,000 or so. And again, it's a fairly low number of patients between the one and two mgs per kg. You have 12 patients total. So it was a pretty good spread.

It was not obvious that response varied by baseline. But again, it's very a small data set to try to draw any inferences. But and keep in mind that cutoff level of 1,000, that's still a decent amount of SA antigen. So these are not patients that were low, because we wanted to have enough dynamic range to be sure that we could really see things. And so these all have pretty healthy amounts of S antigen.

And frankly, haven't noticed the difference at this point, but I think that will be easier for us to look at the end of Phase 2b when we have a more data points to look at. Well, of course,

Speaker 6

the reason I ask is I would think that a lower baseline you might get a greater effect for obviously testing the same dose. So one would think Yes.

Speaker 3

We have it. These are all fairly high baselines in a way. You might be right, but we haven't had the ability to test that yet in the program.

Speaker 6

Okay. And then data readouts for 15 or any data that would give Street or you the answer that knockdown is leading to seroconversion?

Speaker 2

Yes. So, course, we wouldn't expect that with a single dose. And so we really have to see that in the multiple dose studies. We'll have two ANCHOR studies as you know one in E negative patients and one in E positive patients. And those are placebo controlled.

I expect that we'll have several additional Phase 2b studies that are open label. And so it will be easier to talk about those data throughout 2015. So I feel like we should have some updates on those and then we'll see what kind of updates we can give on the larger anchor studies.

Speaker 6

Okay. Okay. I'll wait for that. And then my last question is on AAT. Remind me do we know here similarly when you start to test in these patients what amount of knockdown should lead to clinical meaningful liver outcome changes?

Obviously, there's a long term question I think we've all been asking which is it's going take a long time to get liver benefit data on liver efficacy. That's going to be a long time. So what type of knockdown should we be thinking about that would lead to clinically meaningful changes?

Speaker 2

Bruce, do want to speak to that?

Speaker 3

Sure. Well, important question and one of course that we don't know with certainty. We were I think really very pleasantly surprised by what we saw in the PIV mice and obviously so were the abstract reviewers at AASLD, because that's I think what caught their eye that even with a single dose with what is very complete knockdown, we saw morphological changes in that model. And with multiple doses, we really saw a lot of clearance. The thing about it is that the liver is very the liver is the body's main detoxifying organ.

So it handles all the toxins in the body and it gets injured quite a bit in the process. So it is very much designed to deal with its own injury and to heal itself. The kidney is kind of that way too. The kidney is pretty good at healing itself from acute sort of insults as well. So what I think what's really happening here is that the liver normally is doing a reasonably good job of trying to handle this excess production of this mutant protein that it can't get rid of.

And because it just overwhelms the liver's ability to heal. So when you knock down the AAT, you take away that production of new monomer, the liver actually surprised us with how quickly it started to heal itself in these mice. Now mice are not humans of course, but we're kind of thinking that with knockdown of 90% or more that the liver could well do a lot of self healing and which is part of why we're thinking that the dosing interval in AAT might be might turn out to be six weeks or even longer in humans once we get in there and see the data. Because of course the knockdown in HPV has been longer than we expected in humans versus animals. So we don't know what we're going to see with AAT.

But I think we generally think somewhere around And keep in mind, we're talking about what we're measuring in the plasma and somewhere around ninety three to ninety five percent or so of circulating AAT comes from the liver. The rest is coming from outside the liver. So if you're seeing a big reduction, the liver production may be down even more. So you'll see 90% reduction from the plasma maybe really be 95% or 98% or 99% in the liver.

Got it.

Speaker 6

Okay. Okay. Got it. Very helpful. Thanks guys.

Speaker 0

Thank you. Thank you. Our next question comes from Ted Tenthal from Piper Jaffray. Your line is open. Please go ahead.

Speaker 7

Great. Thanks. Can you hear me okay? Yes. Excellent.

So appreciate the update. Quick question just with respect to what you have seen not in nonhuman primates, but more other animal models with respect to higher doses and multiple doses. Is there any way those models correlate to human exposure with respect to S antigen or HBV models? I forget if it's the Woodchuck or which which is the one that is the standard. But what kind of dosing curves have you seen at higher ARK520 doses and repeat dosing?

And is there any way to model that or extrapolate how far you think you might actually be able to go with three mg per kg, four mg per kg and or multiple doses in man?

Speaker 2

Yes. So Ted thanks for that question. We don't have data in the Wichuck model. That's a different virus. It's similar, but it's different.

And so that would require different sequences and it's not clear how illuminating that model will be. So we didn't look at that. Generally, see this additive effect in multiple animal models really cross target. And so we take a lot of solace in that in believing that we'll see this additive or step down approach on multiple dosing. And of course, we look to what other companies have done in RNAi and you've seen the similar thing where you get an additive or a step down approach.

And so we expect that. But at the end of the day, we need to see that in humans. And that's why we are moving as quickly as we can into the Phase 2b studies even while we are working on the four mg per kg single dose study, we are moving into the Phase 2b multiple dose studies because that's where we start to learn a lot about our drug. That's where we start to learn a lot about how we might optimize the

Speaker 6

therapy.

Speaker 7

Fair enough. Okay, good. And when will you be able to articulate in more detail, more clarity what some of those studies are going to look like and when they'll be starting?

Speaker 2

Some of that, as I mentioned, is really an iterative process. And so while we have ideas for several of them, I think that as data come in, in the multiple dose studies, we will see things that will surprise us and will frankly surprise the whole field, because we'll be doing something that the field never been able to do before and so new ideas will come. I think that we'll start to give some guidance in early twenty fifteen as we start to submit filings for some of those parallel studies. And then we'll keep you up to date in as real time a basis as we can. Again, suspect that in the first half of twenty fifteen, we will start to add additional parallel studies.

And as we talked about, they're ones that you can imagine of different dosing schedules. We always thought that we wanted to look at dosing ARK-five twenty every two weeks in addition to every month. But now given the duration of knockdown, I think that we may try longer dosing intervals. And then of course, we'll be interested in looking at combination with interferon as well as other immunostimulatory agents. And so once we get our two big anchor studies underway, we can focus on some of those smaller studies.

And we'll let you know the specific design of those as we apply for them.

Speaker 7

Okay. That's helpful. Thanks.

Speaker 2

You're welcome. Thank you, Ted.

Speaker 0

Thank you. Our next question comes from Alethia Young from Deutsche Bank. Your line is open. Please go ahead.

Speaker 8

Great. Thanks for taking my question. A couple of ones. One, are you leaving the protocol open in Phase 1b?

Speaker 2

Bruce, do want talk to that?

Speaker 3

You mean the Phase two, the 2a study? Yes, that what you Phase

Speaker 8

2a, yes.

Speaker 3

Well, we can talk about that. I mean, far our plan is to stop at four mgs per kg. And of course, we will have eighty five days. So I guess there's always the possibility we could go higher, but it's not our plan at this point, if that's really your question.

Speaker 8

Yes. And then I guess what would influence your what would be the factors that would make you go up and leave it open? Are there any at this point?

Speaker 3

It's always hard to speculate. I mean, I suppose if we saw something in the knockdown that made us, I think we wanted to try a higher dose and our investigators would aim for it. I suppose we might, but it's purely speculative. I mean, it's not our expectation that we'll need to go higher or want to go higher, but I suppose we could.

Speaker 2

And importantly, there has been no data to limit our ability to do that. The safety profile has been so good that if we wanted to go higher there is we haven't seen anything that would keep us from doing that. We just at this point we don't we're not planning on that.

Speaker 8

Okay. And then just thinking a little bit about like kind of flipping the study getting the go ahead to do like The United States and Europe in different areas. I mean, how do you think about the risk of that like as far as what you'll need what the FDA needs different than anything else we've seen in RNA or kind of if you can help characterize that timeline risk and just risk in general of submitting that package?

Speaker 2

Sure. Bruce, do you like to speak with that?

Speaker 3

Yes. Alethia, as you know, it's always an unknown. I mean, we like the data package. We think it's very solid and very complete. But one very close until the first time you submit to the FDA is the first time you submit.

And it's hard really for me to gauge that risk. We feel like the clinical data is very strong. We feel like the tox data is good and everything else. But ultimately, they as we always say, we submit, they review, they decide and that's always the case.

Speaker 8

And what are the time like timelines for submitting again? Or have you kind of characterized it more specifically that?

Speaker 3

Before the end of the year.

Speaker 8

Okay. And you guys don't have any sort of fast track or anything?

Speaker 3

Not at this point. No, haven't asked for it either. Haven't asked and haven't received.

Speaker 2

And that's a really good question, Alethia. We've thought about that. And we have spent an awful lot of time working on our manufacturing and making sure that we're able to scale this up quickly should we get lucky and see functional cures early. Because I think that if we were to see that, I think regulatory agencies would get excited quickly and we can move I think fairly quickly towards into a Phase three and we want to make sure that our manufacturing is not going to slow us down for that. So hopefully we'll we can explore that possibility in the future.

Speaker 8

Okay. Great. Thanks guys. Happy Thanksgiving.

Speaker 2

Yeah. You too. Thank you.

Speaker 0

Thank you. I'm showing no one else in queue at this time. I'd to hand the conference back over to Mr. Chris Anzalone for closing remarks.

Speaker 2

Thank you everyone and I wish you all a Happy Thanksgiving and a Happy Holiday season.

Speaker 0

Ladies and gentlemen, thank you for participating in today's conference. This concludes our program. You may all disconnect

Speaker 2

and

Speaker 8

have

Speaker 2

a

Speaker 0

wonderful