Ladies and gentlemen, welcome to the Arrowhead Research Fiscal 2014 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'll now hand the conference call over to Vincent Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.
Thank you. Good afternoon, everyone, and thank you for joining us today to discuss Arrowhead's results for its fiscal 2014 fourth quarter and year ended September 30th, 2014. With us today for management, our President and CEO, Dr. Christopher Anzalone, Chief Operating Officer and Head of R&D, Dr. 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 ARC-520 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-K and the 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 Dr. Christopher Anzalone, President and CEO of the company. Chris?
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, ARC-520, into the clinic. We began a rapid pipeline expansion with the introduction of our next candidate, ARC-AAT, and we made important corporate progress on multiple fronts, such as strengthening our balance sheet. Let us begin with ARC-520. We completed a first-in-man phase I study in nine cohorts that assessed safety and tolerability of doses ranging from 0.01 to four mg per kg 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.
ARC-520 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 de-risking event for ARC-520 and the broader DPC platform. With confidence in the safety and tolerability of ARC-520, 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 ARC-520 in HBV patients and how deeply various doses of ARC-520 will suppress a specific viral protein, the surface antigen, or S-antigen.
This study is ongoing, we have completed dosing 24 patients in three initial cohorts, one, two, and three mg/kg. We have presented data from the one and two mg/kg, and we are still following patients from the three mg/kg cohort, which is still blinded. We have begun screening patients for enrollment in an additional cohort of eight patients at four mg/kg. Several important findings are emerging. First, the safety profile of ARC-520 appears to be similar in patients as in healthy volunteers. Second, ARC-520 is clearly active in decreasing production of S-antigen. Third, the duration of effect is longer than we expected, which has very positive implications for upcoming multi-dose phase IIb 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, 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 39% with one mg/kg of ARC-520 and 51% with two mg/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 ARC-520, 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, this 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 phase IIa 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 knockdown curve characterized by rapid reduction followed by equally rapid release such that 30 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 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 2 mgs per kg did not even occur until after 30 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, 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 1 and 2 mgs per kg are just the first two doses of an ongoing dose escalation study. We have already completed dosing the 3 mgs per kg cohort and are screening for the 4 mgs per kg cohort. Therefore, we have two 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 IIa, which we now expect to include 3 and 4 mgs 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 2015, but that will depend on enrollment speed, which we do not control. There's much we do not know about ARC-520 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 U.S., Western Europe, and Asia in order to gain access to a large number of patients and a variety of HBV genotypes. Multiple parallel studies are currently contemplated, including ARC-520 in combination with entecavir or tenofovir, as well as combination studies with different immunostimulatory agents and 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 IIb studies will be 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 IIb studies. The way to unlock as much value as possible from ARC-520 is to follow the data and build as large and diverse a data set as possible. Let's now move to ARC-AAT. During the year, we expanded our pipeline and nominated ARC-AAT as our next clinical candidate for the treatment of liver disease associated with a genetic mutation that causes alpha-1 antitrypsin deficiency. According to the patient advocacy group, the Alpha-1 Foundation, there may be as many as 100,000 potential patients in the U.S. This could represent a relatively large orphan drug population. Further, there is no current treatment for liver disease associated with alpha-1 antitrypsin deficiency. At AASLD, we presented pre-clinical 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%-90% knockdown in non-human primates when dosed every six weeks. We recently filed in Australia for approval to begin a phase I study of ARC-AAT. Moving from our pipeline progress to corporate progress. During fiscal 2014, we strengthened our balance sheet with equity financings totaling approximately $172.6 million in net proceeds. This allows us to expand the scope of ARC-520 phase IIb 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, and clinical operations to support rapid development of ARC-520, ARC-AAT, and additional clinical candidates. We took steps to improve our exposure to institutions by upgrading our NASDAQ listing to the NASDAQ Global Select Market. During the year, we were also added to the broad market Russell 3000 Index and the small cap Russell 2000 Index. We are very pleased with the progress and results from the ARC-520 clinical studies and the ARC-AAT pre-clinical studies. As a product and a platform company, lessons learned from one drug candidate help to inform development and de-risk 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 ARC-520 and as we embark on a period of pipeline expansion that starts with ARC-AAT. With that overview, I would now like to turn the call over to our COO and Head of Development, Dr. Bruce Given. Bruce?
Thanks, Chris, and good afternoon, everyone. We made a lot of progress in 2014 on our lead candidate, ARC-520, in addition to expanding our pipeline to include ARC-AAT. It's a testament to the potential of both product candidates that we were selected to present data on ARC-520 in a late-breaker poster session and on ARC-AAT in a plenary session at AASLD earlier this month. The following is a review of these data. We completed nine dose cohorts in our phase I trial of ARC-520. The study was designed to characterize the safety profile of ARC-520 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 ARC-520 administered intravenously to healthy adult volunteers. All subjects received either placebo or ARC-520 in doses ranging from 0.01 to four mg per kg.
The study successfully enrolled 54 subjects at a single center, with 36 receiving ARC-520 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 was a modest occurrence rate of non-clinically significant abnormal laboratory tests in placebo and ARC-520-treated subjects. There were no reported drug-related or clinically significant differences for vital signs or ECGs between subjects receiving drug versus placebo. One occurrence each of moderate flushing and urticarial rash, seen at dose levels of 0.3 mg per kg and two mg per kg respectively, led to the subsequent reduction in infusion rate of ARC-520, 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. In conclusion, ARC-520, when administered as a single dose up to four mg per kg to healthy volunteers, appears to be well-tolerated. In March 2014, we began a phase IIa 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 ARC-520 in combination with entecavir in patients with chronic HBV infection. We are also assessing safety and tolerability in 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 ARC-520 and two being dosed with placebo.
Single doses of ARC-520 are being evaluated, to date, three ascending doses, one, two, and three mg per kg, have been completed, and screening for dose escalation to four mg per kg is actively underway. In the first three dose cohorts, 24 patients were successfully dosed, 18 of which received drug and six received placebo, and unblinded data is available for the first two cohorts. Interim results for one and two mg per kg and partial, still blinded, safety results from the three mg per kg 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 ARC-520 and placebo-treated patients and no observed relationship to timing or dose. ARC-520 activity is assessed by measuring % 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 ARC-520 resulted in significant reduction in S-antigen for up to 43 days. In cohort 1, the mean nadir of S-antigen was -39% with a range of -22% to -57%. In cohort 2, the mean nadir of S-antigen was -51%, with a range of -46% to -59%. For cohort 2, the % reduction in S-antigen was statistically significant versus placebo for days three through 43 post-dose.
For cohort 2, the mean day of S-antigen nadir was day 33. Turning to ARC-AAT, 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-1 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 preexisting liver disease and fibrosis.
In preclinical studies with PiZ 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 15 post-dose and at day 29 post-dose, the two time points measured. Multi-dose studies in PiZ mice showed that at week 13 of the study, after four biweekly doses, the ARC-AAT-treated group showed 99% less soluble Z-AAT, which is the monomer form of the protein synthesized by the liver, and 79% less insoluble Z-AAT, 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 ARC-AAT in transgenic mice expressing human Z-AAT 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 in serum was observed after a single injection, which persisted for over 10 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 80%-90% knockdown in humans. The treated animals showed no changes in clinical chemistry, including ALT, AST, BUN, and creatinine, indicating that ARC-AAT appeared to be well-tolerated at these optimal therapeutic dose levels. As Chris mentioned, we recently filed for permission to begin a phase I study of ARC-AAT.
Pending approval, we intend to proceed with a double-blind, placebo-controlled dose escalation phase I study to determine the safety, tolerability, pharmacokinetics, and effect on circulating alpha-1 antitrypsin levels following a single dose of ARC-AAT. The study is planned to start in Australia in healthy volunteers and will dose escalate until predetermined levels of alpha-1 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-1 antitrypsin deficiency to further evaluate escalating doses of ARC-AAT. The study is designed to enroll up to 48 subjects, including healthy volunteers and patients. With that update, I would now like to turn the call over to our CFO, Ken Myszkowski, to review our financials for the period. Ken? Ken, are you there?
As year ended September 30, 2014, was $58.6 million or $1.25 per share, based on 47 million weighted average shares outstanding. This compares with the net loss attributable to Arrowhead of $31.1 million or $1.30 per share based on 24 million weighted average shares outstanding for the year ended September 30, 2013. Total operating expenses for the year ended September 30, 2014, were $53.5 million, compared to $24.9 million for the year ended September 30, 2013. Net cash used in operating activities in fiscal 2014 were $35.4 million, compared with $19 million 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, ARC-520, as well as our recently announced second candidate, ARC-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 $177.3 million at September 30, 2014, compared to $29.8 million at September 30, 2013. The increase in our cash balance reflects $172.6 million in cash from financing during fiscal 2014. 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 30, 2014, were $54.7 million and would be $58.6 million assuming conversion of the preferred shares outstanding at September 30, 2014. With that brief overview, I will now turn the call back to Chris.
Thanks, Ken. We have 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 that should have a progressively lower risk profile. We believe emerging ARC-520 phase IIa data as well as upcoming phase IIb data and ARC-AAT phase I data can give us that proof of concept and technology validation. We are seeing scientifically important and potentially meaningful results. We hope to provide additional data throughout 2015 that support this position.
What are some of the key events that you should expect? As mentioned, we have filed to begin a phase I study of ARC-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 IIb studies of ARC-520. Our goal is to develop a comprehensive data set on ARC-520'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 will continue the dose-finding phase IIa study of ARC-520 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 2015. We hope to provide updates about progress on DPCs that can be administered subcutaneously and DPCs targeting extrahepatic tissues in calendar 2015. We feel confident about where we are with ARC-520. 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 ARC-520 can lead to a clinical benefit in patients and enable functional cures. We also hope to demonstrate clinical activity with ARC-AAT as we enter clinical trial shortly. We expect 2015 to be an exciting year indeed. Thanks for joining us on our call today, and we look forward to continued progress in fiscal 2015.
I would now like to open the call up to your questions. Operator?
Thank you, sir. Ladies and gentlemen on the phone line, if you have a question, please press star then one on your touch-tone telephone. If your questions have been answered and you wish to remove yourself from the queue, please press the pound key. Once again, if you have a question, please press star then one. Our first question comes from Thomas Wei from Jefferies. Your line is open. Please go ahead.
Thanks. Just a couple of questions. The 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 the 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.
Bruce, you want to take that?
Sure. I mean, we haven't spoken much about it before, Chris. I mean, how much would you like me to cover here?
Well, you 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-
Okay
about what we see in acute tox.
Okay. Thomas, what we see once you get to doses that produce toxicity is the first sign is just transaminase increases in the liver, and for the kidney, it would be BUN and creatinine. Yet, 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. In fact, when you see that toxicity, you see it early. You see it in the first 24 or 48 hours, and if you don't see any toxicity then, you won't see it later. Of course, we're talking about dosing monthly or maybe even less frequently. 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, the organs recover in the interval between dosing. Hopefully that answers your question.
That's helpful. 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 33 in the 2 mg/kg cohort. It's not the median, but presumably, that means that around half of patients have their surface antigen start rebounding before day 30 and the other half are after day 30. 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 30 days?
Do you want me to handle that, Christopher?
Sure, go ahead.
Thomas, it's really a pretty flat dose response curve. It's kind of what Christopher 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. The nadir, by definition, is the lowest value. Overall, it was not a sharp loss of activity. We were still statistically significant at day 43, and frankly, probably would've 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 57. It's really not a situation where any of those patients with the two mg/kg dose Were flying back up after day 30, for instance. They're all, I would say, suppressed about the same.
The notion of if we dose it at day 30, for instance, are we really dosing at a point of still very significant knockdown? I think the answer's going to be yes. I don't think there's going to be a lot of individual variability affecting that.
Let me just add two things on both those questions. First, regarding tox. 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. I think we have a good idea what that looks like across multiple species. 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. It does not feel like we're terribly close to where things might start to become a bit toxic. Second, let me just add on dosing on top of prior doses.
Keep in mind also, as you know, Thomas, that as we increase dosing, we expect to see 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. As we get deeper knockdown with 3 mgs per kg and 4 mgs 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, if we're dosing every 30 days. 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.
Great. Thanks for taking my questions.
Sure. Thank you, Thomas.
Thank you. Our next question comes from Michael Yee from RBC Capital Markets. Your line's open. Please go ahead.
Hey, thanks. A couple questions. First, on the HBsAg program, do you have the medians for cohort 1 and cohort 2? 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 IIs that are starting up in 2015, do you legitimately think we'll get data on these? Do you think we need to sort of wait for the phase IIB program to get a better read on whether greater knockdown actually leads to seroconversion? I have one AAT question.
All right. Bruce, you want to take the first question? I can speak to the second one?
Yeah. Michael, I don't have the median data in front of me. It's a fairly small group. It's six subjects. I'm not sure that the median would help us a lot. I don't think that the data was generally driven by outliers. I don't think the median data would be very much different than the mean data. That said, I don't have it in front of me to look at it. It's not the way we've been reporting the data or graphing it for that matter. I can't give you an answer for that.
Baseline, do we know anything with regards to baseline S-antigen levels?
Yeah. The baseline varied in these patients from a low that was fairly close to 1,000 international units. The high, if I remember right, was up around 15,000 or so. Again, it's a fairly low number of patients between the one and two mgs per kg. You have 12 patients total. There was a pretty good spread. It was not obvious that response varied by baseline, but again, it's a very small data set to try to draw any inferences. Keep in mind that cutoff level of 1,000. That's still a decent amount of S-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.
These all have pretty healthy amounts of S-antigen, and frankly, we haven't noticed a difference at this point, but I think that'll be easier for us to look at at the end of phase IIb when we have a lot more data points to look at.
Well, of course, the reason I ask is I would think that a lower baseline, you might get a greater effect if you're obviously testing the same dose. One would think that.
Yeah.
Which-
We haven't. 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.
Okay. Data readouts for 2015 or any data that would give the street or you the answer that knockdown is leading to seroconversion.
Yeah. Of course, we wouldn't expect that with a single dose, and so we really have to see that in the multiple dose studies.
Sure.
We'll have two anchor studies, as you know. One in E-negative patients and one in E-antigen positive patients, and those are placebo controlled. I expect that we'll have several additional phase IIb studies that are open label, and so it'll be easier to talk about those data throughout 2015. 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.
Okay. I'll wait for that. 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 to take a long time to get liver benefit, data on liver efficacy. That's going to be a long time. What type of knockdown should we be thinking about that would lead to clinically meaningful liver changes?
Bruce, do you want to speak to that?
Sure. Well, it's a really 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 PiZ mice, and obviously so were the abstract reviewers at AASLD. That's, I think, what caught their eye, that even with a single dose with what is a 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 the body's main detoxifying organ. It handles all the toxins in the body, and it gets injured quite a bit in the process. It is very much designed to deal with its own injury and to heal itself. The kidney's kind of that way, too.
The kidney's pretty good at healing itself from acute sort of insults as well. 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. The disease happens because it just overwhelms the liver's ability to heal. 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.
Mice are not humans, of course, 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 turn out to be six weeks or even longer in humans once we get in there and see the data. Of course, the knockdown in HBV has been longer than we expected in humans versus animals, we don't know what we're going to see with AAT. We generally think somewhere around 90-plus %. Keep in mind, we're talking about what we're measuring in the plasma and somewhere around 93%-95% or so of circulating AAT comes from the liver. The rest is coming from outside the liver.
If you're seeing a big reduction, the liver production may be down even more. You'll see 90% reduction from the plasma may really be 95%, 98% or 99% in the liver.
Got it. Okay. Got it. Very helpful. Thanks, guys.
Thank you.
Thank you. Our next question comes from Ted Tenthoff from Piper Jaffray. Your line is open. Please go ahead.
Great, thanks. Can you hear me okay?
Yes.
Yeah.
Excellent. Appreciate the update. Quick question just with respect to what you have seen, not in non-human 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 is the one that is the standard, but what kind of dosing curves have you seen at higher ARC-520 doses and repeat dosing? 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?
Yeah. Ted, thanks for that question. We don't have data in the woodchuck 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 would be. We didn't look at that. Generally, we see this additive effect in multiple animal models, really cross-target. We take a lot of solace in that in believing that we'll see this additive or step-down approach on multiple dosing. 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. We expect that. 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 IIb studies.
Even while we are working on the 4 mgs per kg single dose study, we are moving into the phase IIb multiple dose studies because that's where we start to learn a lot.
Yeah
The therapy.
Fair enough. Okay, good. 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?
Some of that, as I mentioned, is really an iterative process, so while we have ideas for several of them, I think that as data come 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's never been able to do before, so new ideas will come. I think that we'll start to give some guidance in early 2015 as we start to submit filings for some of those parallel studies. Then we'll keep you up to date in as real-time a basis as we can. Again, I suspect that in the first half of 2015, we will start to add additional parallel studies. 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 ARC-520 every two weeks in addition to every month. Now, given the duration of knockdown, I think that we may try longer dosing intervals. Then of course, we'll be interested in looking at combination with interferon as well as other immune stimulatory agents. 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.
All right. Okay, good. That's helpful. Thanks.
Yep, you're welcome. Thank you, Dan.
Thank you. Our next question comes from Alethia Young from Deutsche Bank. Your line's open. Please go ahead.
Great. Thanks for taking my question. A couple ones. One, are you leaving the protocol open in phase I-B?
Bruce, do you want to talk to that?
You mean the phase II, the II-A study? Is that what you mean?
Yeah, sorry. II-A.
We can talk about that. So far, our plan is to stop at 4 mg per kg. Of course, we'll have 85 days, I guess there's always the possibility we could go higher, it's not our plan at this point, if that's really your question.
I guess, what would be the factors that would make you go up and leave it open? Are there any at this point?
It's always hard to speculate. I suppose if we saw something in the knockdown that made us think we wanted to try a higher dose, our investigators were game for it, I suppose we might, it's purely speculative. It's not our expectation that we'll need to go higher or want to go higher, I suppose we could.
Importantly, there's been no data to limit our ability to do that. The safety profile has been so good that if we wanted to go higher, we haven't seen anything that would keep us from doing that. At this point, we're not planning on that.
Just thinking a little bit about kind of flipping these studies, getting the go ahead to do the U.S. and Europe and different areas. How do you think about the risk of that, as far as what the FDA needs is different than anything else we've seen in RNA? Just if you can help characterize that timeline risk and just risk in general of submitting that package.
Sure. Bruce, would you like to speak with that?
Yeah. Alethia, as you know, it's always an unknown. We like the data package. We think it's very solid and very complete. 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, ultimately, as we always say, we submit, they review, they decide, and that's always the case.
What are the timelines for submitting again? Have you kind of characterized it more specifically that?
Before the end of the year.
Okay. You guys don't have any sort of fast track or anything?
Not at this point. No. We haven't asked for it either, haven't asked and haven't received.
That's a really good question, Alethia. We've thought about that, 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. I think that if we were to see that, I think regulatory agencies would get excited quickly, we could move, I think, fairly quickly into a phase III. We want to make sure that our manufacturing is not going to slow us down for that. Hopefully we can explore that possibility in the future.
Okay, great. Thanks, guys. Happy Thanksgiving.
Yeah, you too. Thank you.
Thank you. Showing no one else in queue at this time. I turn the conference back over to Mr. Chris Anzalone for closing remarks.
Thank you everyone, I wish you all a happy Thanksgiving and a happy holiday season.
Ladies and gentlemen, thank you for participating in today's conference. This concludes our program. You may all disconnect and have a wonderful day.