Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals 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.
Thanks, Brigitte. Good afternoon, everyone. Thank you for joining us today to discuss Arrowhead's results for its fiscal 2018 second quarter ended March 31st, 2018. With us today for management, our President and CEO, Dr. Christopher Anzalone, who will provide an overview of the quarter, Dr. Bruce Given, our Chief Operating Officer and Head of R&D, who will discuss our clinical programs, Ken Myszkowski, our Chief Financial Officer, who will give a review of the financials. We will open up the call to your questions. Before we begin, I would like to remind you that comments made during today's call 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 statements regarding our expectations around the development, safety, and efficacy of our drug candidates, projected cash runway, and expected future development activities. These statements represent management's current expectations and are inherently uncertain, thus actual results may differ materially. Arrowhead disclaims any intent and 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 subsequent quarterly reports on Form 10-Q for additional matters to be considered in this regard, including risks and other considerations that could cause actual results to vary from the presently expected results expressed in today's call.
With that said, I'd like to turn the call over to Christopher Anzalone, President and CEO of the company. Chris?
Thanks, Vincent. Good afternoon, everyone, and thank you for joining us today. We see drug development as an innovation and application interplay. It requires raw scientific innovation first, both at the level of understanding disease biology and potential interventional strategies, then application of that innovation in humans. This is not necessarily a simple one-two process whereby further innovation is made unnecessary after successful application in humans. Rather, human application often drives further innovation. We stand today on the shoulders of the innovation and application work we have done to date. This represents a huge amount of important science, spanning multiple classes of technologies, countless preclinical studies, and three prior clinical programs. This has all led to the TRiM platform and our approach to and understanding of several disease indications. I lay this out because we view 2018 as a pivotal year in the application of Arrowhead innovation.
We are operating at a very high level, have already brought two candidates, ARO-AAT and ARO-HBV, into the clinic, and we are on pace to advance three additional candidates to CTA filings by the end of calendar 2018. We expect to generate data throughout the year that could provide clinical validation and decrease the risk profile of the platform, drug candidates, ultimately, our company. Think of these in four general categories. 1, safety of the platform and candidates. 2, scalability of the platform. 3, partnerability of the platform. 4, clinical relevance of the candidates. Chipping away at these unknowns drives value for us, and we made clear progress in all of them last quarter, and the period since our last conference call. Let's look at each of these and begin with the most important, safety of the platform and candidates.
ARO-AAT and ARO-HBV both started dosing in March. ARO-AAT, which was recently granted orphan drug designation by the FDA, is our second-generation subcutaneously administered candidate for the treatment of alpha-1 antitrypsin deficiency liver disease. ARO-HBV is our third-generation subcutaneously administered clinical candidate for the treatment of chronic hepatitis B infection. Both first-in-human studies are designed to include a single ascending dose phase and a multiple ascending dose phase that are essentially run in parallel. Bruce will talk more about the studies in a moment, but the phase I/II design is intended to rapidly get to meaningful readouts on safety and tolerability, as well as single and multiple dose activity. We have now treated 38 subjects, 24 on active drug and 14 with placebo between the two programs, and both candidates have been well tolerated thus far.
Of course, the studies are still young, several additional dose levels remain to be tested, but it is encouraging to see a favorable safety profile to date. Let's now turn to scalability of the platform. We made substantial progress since our last conference call, demonstrating that there is much we can do with the TRiM platform. Just last week, we announced two upcoming presentations that will cover TRiM-enabled liver-targeted candidates and our extrahepatic capabilities. ARO-APOC3 and ARO-ANG3 are our most advanced wholly owned preclinical candidates. They are targeting apolipoprotein C3, or APOC-3, and angiopoietin-like protein 3, or ANGPTL3, respectively. They are designed to address multiple cardiometabolic diseases and may offer various development paths targeting both mass market and/or orphan indications. We haven't disclosed much about those programs other than some early rodent data that we discussed at our Analyst Day last year.
Bruce Given, our COO, will present additional preclinical data for both programs at the Vascular Discovery: From Genes to Medicine Symposium at an American Heart Association-organized conference later this week. These candidates are moving ahead according to plan, and we continue to be excited about the opportunities they represent. We are on schedule to file CTAs for both candidates before the end of the year. The second presentation that we announced is for ARO-ENaC, formerly referred to as ARO-Lung1, which is the first candidate to leverage the TRiM platform to address diseases of the lung. We will present data on this at the American Thoracic Society 2018 International Conference on May 21st. ARO-ENaC is an inhaled RNAi therapeutic targeting the epithelial sodium channel alpha subunits, or alpha ENaC, for the treatment of cystic fibrosis or CF.
CF is a rare disease caused by a genetic mutation that leads to mucus buildup in the lungs and pancreas. In CF lung disease, patients can have difficulty breathing and experience frequent and persistent lung infections. Increased ENaC activity contributes to drying mucus in the airway and a reduced ability of the lung to clear toxins and infectious agents. Interestingly, inheritance of poorly functioning ENaC genes by CF patients leads to a milder lung disease. Therefore, researchers have been interested in decreasing ENaC activity in CF patients if possible. However, the development of inhaled small molecule inhibitors have been limited by their short duration of action and worrisome side effects resulting from ENaC inhibition in the kidney. We think ENaC has good validation as a target, and our goal is to selectively reduce it in the lung while sparing the kidney.
RNAi broadly, and the TRiM platform specifically, seem tailor-made for this function when the aim is targeted activity against a single gene, long duration of effect, and high tissue specificity. We believe we can do all of those. The presentation later this month will be our first on the TRiM pulmonary platform and the ENaC program. We have submitted and plan to submit ARO-ENaC abstracts to additional medical and scientific meetings later this year. In addition, our plan is to hold an analyst day this summer to discuss the lung program and ARO-ENaC in more detail. We have not yet scheduled that event, but we will announce it when we have set the date.
Our expanding capabilities also present the good problem that we, or any other company for that matter, will not have the resources to pursue every opportunity to extract all the value from the TRiM platform by ourselves. It clearly makes sense to enter into a limited number of strategic partnerships, so the partner ability of the platform is a value driver for us. Our collaboration with Amgen continues to progress well. That deal covers two cardiovascular targets, one against lipoprotein A, which is now referred to as AMG 890. The second, which we call ARO-AMG1, is against an undisclosed target. Both are wholly licensed to Amgen. We feel confident that we will do additional partnerships with other companies in the future. Let's now turn to the most important value-driving category, clinical relevance of the candidates. During the quarter, we presented clinical data at EASL from ARC-520, a prior-generation compound for HBV.
I want to highlight some of those data because they represent what we see as a very encouraging proof of concept for the use of RNAi compound in HBV, and therefore are relevant to our ARO-HBV program. The poster presentation included follow-up data for patients enrolled in a Heparc-2001 multi-dose expansion study. In the study, eight chronic hepatitis B patients, five e antigen negative and three e antigen positive, received up to nine doses of four mgs per kg ARC-520 once every four weeks with daily entecavir. Viral DNA, RNA, and antigen knockdown were measured at regular intervals. Patients were monitored for an additional 12 months following the last ARC-520 dose. Key results include the following. Multiple doses of ARC-520 resulted in S antigen reductions in all patients by as much as 5.3 logs. Where measurable, multi-log reductions were also seen in e antigen, core-related antigen, DNA, and HBV RNA.
We are pleased to announce that one e antigen negative patient, while remaining on entecavir, sero-cleared for all measurable viral markers, including S antigen, core-related antigen, HBV RNA, and HBV DNA. We believe this will represent a functional cure. Two out of three e antigen positive and two out of five e antigen negative patients, or half of the patients in the study, achieved productive and sustained host responses. These were characterized by mild ALT elevations coinciding with continued reductions in various biomarkers which persisted after ARC-520 therapy was removed. Two patients that experienced sustained host responses but have not yet sero-cleared appear poised to potentially sero-clear if the trends in the decrease of viral markers continues. These are important data that are getting a lot of attention from key opinion leaders in HBV.
We think they suggest that an RNAi compound like ARO-HBV has the potential to be a backbone therapy in combinations aimed at achieving a functional cure of HBV. To us and many KOLs that we interact with, these data look as though ARC-520 treatment may have led to an awakening of the immune system, which is the key requirement for functional cures to occur and be sustained. Keep in mind that ARC-520 was designed to be active against all cccDNA-derived mRNA transcripts, but missed transcripts from integrated DNA. ARO-HBV specifically addresses this deficiency. We are more confident than ever about ARO-HBV, and we are eager to see if this translates into improved patient outcomes. Lastly, during the quarter, we closed an equity financing with gross proceeds of $60.4 million.
This strengthened our balance sheet so that we can continue to be focused on speed and move our development programs toward key milestones that could represent significant value catalysts. With that overview, I'd now like to turn the call over to Bruce Given, our COO and Head of R&D. Bruce?
Thank you, Chris. Good afternoon, everyone. Our two clinical programs, ARO-AAT and ARO-HBV, are moving forward on the planned schedule without any encountered delays so far. Our experience from prior clinical programs and relationships with investigators have made it possible to move these programs rapidly. We are always looking for innovative new ways to do things, and this is certainly true for our clinical trial designs. As Chris mentioned, our first-in-human study designs for ARO-AAT and ARO-HBV are intended to get to data readouts on safety and activity rapidly, and include both single-dose and multiple-dose cohorts. The single and multiple-dose phases are designed to run almost in parallel as opposed to sequentially, which could potentially shave months from more traditional development timelines for each product. We view these designs as essentially phase I/II studies. Let me illustrate how this is designed to work.
For ARO-HBV, the site will bring in a cohort of healthy volunteers, and each subject will receive a single subcutaneous dose of either ARO-HBV or placebo. Safety labs through eight days are collected and reviewed by a data safety committee or DSC. If these results are determined to be acceptable by the DSC, they will authorize two things. First, the initiation of a multiple-dose cohort of HBV patients at the same dose level, and secondly, escalation and enrollment of another single-dose cohort of healthy volunteers at the next higher dose level. This same cycle will continue for each additional cohort until we dose escalate to the predefined top dose level of 400 milligrams. ARO-AAT is a similar design but will enroll healthy volunteers for both the SAD and MAD portions of the study. There are a few other minor differences, but the essential design is the same for both candidates.
This means that both programs will potentially have data readouts around the same time if healthy volunteer and patient accrual proceeds at approximately the same pace. For both candidates, protocols call for studying doses of 35, 100, 200, 300, and 400 milligrams. Using fixed doses instead of scaling on a milligram per kilogram basis will simplify the process for the pharmacists at the sites and reduce the risk of dosage error. It ultimately may give opportunities for simplified commercial dosage forms, such as prefilled syringes, that make it easier for patients and/or physicians to administer the product. For both candidates, the primary outcome measures are safety and tolerability. For ARO-AAT, secondary outcome measures include pharmacokinetics, % change in serum alpha-1 antitrypsin levels, and duration of response.
For ARO-HBV, secondary outcome measures include pharmacokinetics and an assessment of the change in all measurable viral markers, including S antigen, DNA, RNA, E antigen, and core-related antigen. Both studies began dosing in March, and as I mentioned, they are progressing according to schedule at this point. For ARO-HBV, we have enrolled and dosed the first three cohorts of 18 subjects in the single-dose portion of the study at doses of 35, 100, and 200 milligrams. We have also received clearance from the DSC to begin the multiple-dose portion of the study in HBV patients at the 100-milligram dose. Patients are being screened and scheduled, and we anticipate that the first patient will be dosed later this week, followed shortly by the rest of the patients in the cohort. For ARO-AAT, we have enrolled and dosed the first three cohorts totaling 20 subjects at doses of 35 and 100 milligrams.
We have received DSC clearance to escalate to 200 mg, and we anticipate that cohort will be dosed next week. We are extremely pleased with the pace of enrollment for both studies and want to thank our clinical operations, manufacturing, and program management teams, as well as our CRO and clinical sites for all the hard work required to maintain our aggressive schedule. We are also gratified that the DSCs in both programs have found the accumulated safety information to be acceptable to allow dosage escalation without exception or delay. It's still very early in both of these studies, but all the results to date build confidence around the candidates and about the potential for the TRiM platform more broadly. With that brief review of our clinical programs, I'd like to turn the call over to Ken Myszkowski, Arrowhead's Chief Financial Officer. Ken?
Thank you, Bruce, and good afternoon, everyone. As we reported today, our net loss for the quarter ended March 31st, 2018, was $14.9 million, or $0.18 per share, based on 84.1 million weighted average shares outstanding. This compares with a net loss of $6 million or $0.08 per share based on 74.6 million weighted average shares outstanding for the quarter ended March 31st, 2017. Revenue for the quarter ended March 31st, 2018, was $700,000, compared to $9 million for the quarter ended March 31st, 2017. Revenue was lower because revenue from the $30 million upfront payment received from Amgen for the ARO-LPA, called AMG 890 agreement, was fully recognized in October 2017. Revenue in the current period primarily relates to the recognition of a portion of the $5 million upfront payment received from Amgen for the ARO-AMG1 agreement.
Of the total upfront payments of $35 million, all but $1.3 million has been recognized as revenue to date, and the remainder is anticipated to be recognized over the next six months. Total operating expenses for the quarter ended March 31st, 2018, were $15.7 million, compared to $15.1 million for the quarter ended March 31st, 2017. This slight increase is primarily due to drug manufacturing and toxicity study costs for our ARO-AAT and ARO-HBV candidates, partially offset by reduced clinical costs as we were closing down our discontinued candidates in the prior period. Net cash used in operating activities during the quarter ended March 31st, 2018, was $15.4 million, compared with net cash used by operating activities of $14.3 million during the quarter ended March 31st, 2017. This slight increase was also driven by increased drug manufacturing and toxicity study costs for ARO-AAT and ARO-HBV candidates.
Turning to our balance sheet, our cash and short-term investments totaled $91.5 million at March 31st, 2018, compared to $65.6 million at September 30th, 2017. In January 2018, we completed an equity financing issuing 11.5 million shares, which resulted in $56.6 million in net cash proceeds to the company. Our common shares outstanding at March 31st, 2018, were 87.6 million. With that brief overview, I will now turn the call back to Chris.
Thanks, Ken. As you've heard, we've accomplished a lot in the first four months of the year and have already begun answering key questions. We expect the remainder of 2018 to be even more productive. Here are a few key goals we have for the rest of the year. One, we anticipate that we will complete dosing in both ARO-HBV and ARO-AAT first in human studies. As Bruce mentioned, the studies are progressing well. What does that mean for timing of data readouts? We hope that we will have a meaningful amount of data for both programs to submit late-breaking abstracts for AASLD. If accepted, that would mean presentations on one or both programs at the liver meeting in November. The timing for that is tight, so we cannot guarantee that we will make the deadline, but that is our goal.
Two, we are on schedule to file CTAs by the end of the year for ARO-APOC3, ARO-ANG3, and ARO-ENaC. Three, we intend to provide more data on ARO-ENaC and the expansion of our TRiM platform into diseases of the lung. This includes presentations at multiple medical and scientific meetings throughout the year and an Arrowhead-hosted Analyst Day in the summer to discuss the pulmonary platform in detail. Four, exploit opportunities to maximize the value of our technology through partnering and collaborations. This will potentially allow us to focus our internal development on a select number of our lead candidates and also give us exposure to additional high-value opportunities that may be beyond the reach of our current resources. Five, present data on our various pipeline products and our TRiM platform through medical and scientific meetings and through publications in peer-reviewed journals. This is indeed a big year for us.
Thanks again for joining us today. I would now like to open the call to your questions. Operator?
Ladies and gentlemen, if you have a question at this time, please press star and then the number one on your touch-tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. To prevent any background noise, we ask that you please place your line on mute once your question has been stated. Our first question comes from the line of Maury Raycroft with Jefferies. Your line is open.
Hi, everyone. This is Vesna on for Maury today. I have a couple of questions for Chris and Bruce, if possible. First one would be on your ongoing HBV program. Thank you so much for the details on the doses and the cohorts. That is very helpful. If I heard correctly, you're about to dose the first patients later this week. Are you going to open additional sites or only the sites that are currently listed on ClinicalTrials.gov? Will you be planning on opening any U.S. sites for the HBV program?
Bruce, you want to take that?
Sure. I have to admit, I haven't looked at the ClinicalTrials.gov site lately to see if all of our sites are listed there. The sites for this particular trial are in New Zealand, Australia, and Hong Kong. Most, if not all of those sites are active at this point. We have screening going on right now at several of the sites for HBV. All of the normal volunteers are done at a single site in New Zealand, but the HBV screening is quite active at this point. That's the plan. We're not planning on bringing this particular study into the U.S. I'm sure that we would hope that enrollment would be completed probably before we could actually get up and running in the U.S. in any case.
Got it. That makes sense. I would have a question about the other program, the AAT program. You gave a lot of clarity on the first trial on the healthy volunteers. Can you provide any guidance at this point? When will you start treating patients, and what results of the initial trial would lead to that decision? Thanks.
You want me to go again? As we said here in describing the current trial, this trial is just normal volunteers. The reason for that is because we learned in the ARC
ARC-AAT program with our prior technology that normal volunteers predicted patient responses for both depth and duration of knockdown very well. Of course, normal volunteers are much handier to recruit. We felt very comfortable that that was a good surrogate. We would expect that our next trial, certainly our next broad-based trial, will be in patients. It would likely follow the current trial. I don't think we're likely to be in patients. Certainly our current plan would not have us in patients before 2019. Thank you. Thank you so much for taking my questions. Sure.
Our next question comes from the line of Katherine Zhu with William Blair. Your line is open.
Hi, all. This is Roland on for Katherine. Can you talk a little bit about your plans after the data for ARO-HBV and ARO-AAT at near end? Secondly, about the progress of toxicology for each. Thank you.
Want to take that? Okay. Our chronic toxicology studies are underway for both programs. The plan would be that around the time these two studies both end, we would be unrestrained with respect to the duration of trials we could use going forward. Assuming that both of the programs, that we don't have surprises and that the results are positive, and that's always a big assumption in clinical development, but assuming everything is go, we would expect that future trials would all be in patients and that they would be, in the case of HBV, we would be doing trials presumably in combination with other agents, trying to find the recipe that would result in functional cure. We would be looking for functional cure, I think, going forward in future trials in HBV.
In AAT, we would be in patients, and we would be looking for the ability to bring appropriate changes on biopsy, I think, in patients treated with ARO-AAT for longer-term trials. For AAT, I think what we're going to find out this year is what our dose level is. Also, I think we'll have a good idea about dosing frequency. We are expecting that HBV will be dosed monthly because we think that probably deeper knockdown is better. The deepest knockdown we can get is probably best for HBV. For AAT, we'll see if that's monthly dosing or less frequently. Yeah. It could well be quarterly or possibly even less frequent than that. We'll just have to wait and see.
Okay. Thank you.
Our next question comes from Keay Nakae with Chardan. Your line is open.
Yes. Thanks. For the two current programs, if you are not able to make the deadline for AASLD, what's the plan for releasing that data? Could you just simply do it as a press release?
That's hard to say because, I don't know. It's hard to address that kind of hypothetical because I don't know how much data we'll have should we miss that deadline. Our hope, and frankly, our plan at this point, is to have sufficient data to give us a shot at a late breaker for AASLD. Given how we are enrolling these two studies so far, we feel good, we've got a good shot at that. That's our plan. Should that not work out, we'll make it audible at that point. Right now, it's our plan to not have those studies finished, but have enough data generated that we will have an interesting enough late breaker abstract that could be accepted.
Going back to the recent EASL data for 520, what is the plan or protocol for any further or continued follow-up of those patients, especially the two who appear to be trending towards perhaps seroconversion?
They continue to be followed by the principal investigator. They're not technically on study at this point. The principal investigator is continuing to follow them and has consent to continue to give us their results. They're in routine care in many ways at this point, so I think we'll continue to be able to follow them over time, as long as they stay under the care of the PI.
How far out were those two patients who were trending positively?
Well, they all stopped treatment around the same time, which is around November of 2016 or so. At this point, they're almost at a year and a half.
Okay, great. Thanks.
You're welcome.
Our next question is from Patrick Dolezal with LifeSci Capital. Your line is open.
Hi, thanks for taking my questions. Just on the ARC-520 data presented at EASL, can you just provide us with a little more context on the importance of observing the first patient experience seroclearance many weeks after the cessation of treatment?
I think the thing that was interesting in the data, Patrick, is that what we saw in looking at these patients who were followed so closely is we picked up signs of the host immune system responding as early as after a single dose. Then we saw episodes of the host responding to treatment on therapy and then once the therapy was discontinued. Sometimes people lose track of what the goal is in HBV. The goal of treatment in HBV with all of these drugs that are being developed is not to do what you do with HCV, where you take the virus literally down to zero in the body. That's not the goal here. The goal here instead is to suppress the virus enough that the host immune system comes back and takes over to produce seroclearance and then to provide a durable response.
For instance, it's easy for people to forget, interferon, most of the functional cures that occurred in interferon tend to occur in year two or year three. Our hope is with more effective drugs and, for instance, with RNAi that not only targets cccDNA but also targets integrated, our hope is that these drugs will be effective enough that we'll see the host come back even faster and produce seroclearance events with shorter durations, finite therapy, even while therapy is ongoing. At this point, just showing that it was possible with these new therapies and these new approaches to create an environment where the host could actually seroclear a patient was a big deal to the HBV investigators and is considered to be an important milestone with these new agents that are coming along.
That integrated DNA story is an important one. All of those patients that we were following, all eight of those patients will have had integrated DNA that it was capable of transcribing for S antigens . There was going to be a floor below which we could not go with ARC-520 because it was not going to knock down any of that H antigen coming off of integrated DNA. Even with that, we saw evidence of a sustained host response in half of those patients, we're really excited to see what happens when you just crush the virus and you turn off all sources of S antigen.
I guess that's right. I guess the thing that was really also very important here is that half of these patients showed that the host immune system was there to wake up. That's not been clear with interferon therapy and especially with nuke therapy. It's not been clear how many patients we could actually get to a point that their immune systems would wake up. That's a big topic in the field is immune exhaustion and what's it going to take for these immune systems to show life. To see signs of life in half of the patients was, I think, a surprise. A seroclearance is a very important event. Chris, that's right. The fact that half of these patients showed immune reawakening, I think was a big surprise and again, very important in the field.
Great. Thanks a lot. That actually dovetailed right through my second question, appreciate the detailed response.
You're welcome.
Once again, ladies and gentlemen, if you have a question at this time, please press star and 1. Our next question is from the line of Madhu Kumar with B. Riley FBR. Your line is open.
Hi, this is Jennifer on for Madhu. Thank you for taking our questions. First, when thinking about the recently presented ARC-520 data with multi-log reduction in viral biomarkers off RNAi therapy versus competitors that saw viral marker biomarkers rebound off RNAi therapy, what do you think the key difference is that explain the diversions in off RNAi response? Namely, to what extent do you think degree of HBV knockdown contributes versus the need for steroid with certain delivery methods? The second question is what types of treatment protocols have you considered for later stage studies, assuming some degree of antiviral biomarker activity in the phase I/II? Namely, would you be more likely to pursue chronic treatments over a 6 to 12-month dosing period, a more acute stop-and-shock type approach, or both?
Well, I guess it's always hard to comment on other people's work, but I do think that what stands out about ARC-520 to this day in these naive patients that we treated in the extension is nobody has come close to the level of sort of viral perturbation that we were able to cause. I do believe that it is important to hit the virus very hard. I do think that that's going to be important as we move into this phase now where we start doing combination therapy to try to get functional cure I think it's important to hit the virus everywhere, and that's part of why we think RNAi is going to be a cornerstone therapy.
We don't think it's enough just to hit the virus hard, for instance, with core or just hit it hard with DNA or even just hit it hard with S antigen. We think you have to really take on the virus everywhere it lives. Every protein it makes has important impact in its viral life cycle. Everything the virus tries to do, and now we know even integration is probably a very important evolutionary part of the viral game plan. We think it's important to hit the virus very hard, and we think that's a key differentiator across products.
Before you go ahead, let me just add one finer point on that. I view this in three ways. One, as Bruce says, I think that with the extension for ARC-520, we saw a deeper knockdown of these biomarkers than has been shown by a competitive mRNA therapeutic. Second, we expect to see even better knockdown with ARO-HBV because we are knocking down both S antigen coming from integrated DNA as well as cccDNA. I think we're going to have a bigger club than competitors. Second, you brought up this issue of steroid pretreatment. As you know, it sounds like we don't require steroid pretreatment given the TRiM platform.
We think that is enormously important because it doesn't make much sense to us that you are attempting to wake up the immune system at the same time that you are giving steroids to dull the immune system. We just don't think that's going to work. We don't have that problem, we don't need to pre-treat with steroids, we don't believe. Finally, just to put a slightly finer point on what Bruce said about knocking down every aspect of the virus, ARO-HBV is designed to silence everything that virus makes. We think all those are important. Let me just call out X antigen. I think that there is increasingly interesting information coming out about the importance of X antigen, and we're quite careful to make sure that we knock that down, at least in animal models.
We feel confident that we do, and we expect to knock that down in humans as well. I think as you look at competitors, I think that's a key differentiator. I think you got to look to X antigen, and I think that it's potentially quite important that you knock that down, and we believe that we're going to. Anyway.
Yeah, I think to get to your second question, which I think was a very insightful question by the way, is the neat thing about HBV is that because the baseline rate of functional cure in any sort of reasonable duration of time, let's say six to 12 months or whatever, is essentially zero. We can do small cohorts of patients, eight to 10 patients, and look for recipes that work. You also raised the point of will there be some interesting looking regimens where you pretreat with one drug and then you do combination, and then you maybe have an off period and hit them again.
It's possible that we will see some exotic approaches in the coming couple years as people really try to digest what we saw with ARC-520, for instance, and what we start to see in other programs. What we're even seeing in the discontinuation work that people are doing after chronic nucs, for instance. That was a prescient question, I think, and I believe that we may wind up doing some exotic things as well as we try to find that right recipe to really drive the functional cures that the field is going to be looking for over the next few years.
Also keep in mind that the current study that we think we'll complete enrolling this year is a 3-dose study, and so it is possible that some of those patients could enroll in an extension sometime in 2019, should we have that, to allow them to continue dosing. There will almost certainly for probably all those patients, but certainly most of them, there'll almost certainly be a holiday before we have PrimeTox coverage to initiate any kind of extension study. We'll have some data around that, I think, towards the end of this year and early in 2019. What happens when you hit the virus hard and then you go off therapy. I think we may see some interesting data coming out of that.
Great. Thank you so much, guys.
Sure.
Yeah. Terrific.
I'm not showing any further questions. I'll now turn the call back over to Chris Anzalone for closing remarks.
All right. Thanks everyone for joining the call today. We will talk to you soon.
Ladies and gentlemen, this does conclude the programming. You may now disconnect. Everyone have a great day.