In this CEO Money interview, Zacks analyst John Vander Vossen talks with Dr. Douglas Fambrough, founder and CEO of Dicerna Pharmaceuticals, about the company’s RNA interference (RNAi) platform and its clinical pipeline. Dr. Fambrough recounts his background as a geneticist on the Human Genome Project and a venture‑capitalist who invested early in RNAi, leading to the formation of Dicerna. He explains RNAi as a natural gene‑silencing mechanism, contrasts it with gene‑editing approaches like CRISPR, and highlights Dicerna’s proprietary delivery system—sub‑cutaneous injections given only a few times per year, avoiding the lipid‑based IV infusions used by competitors such as Alnylam. The conversation then moves to Dicerna’s lead program for primary hyperoxaluria, a rare metabolic liver disease, describing its pathophysiology, the therapeutic goal of turning off oxalate production, and the anticipated Phase 1 read‑out in the second half of the year followed by a combined Phase 2/3 registration trial. A second major indication, hepatitis B, is discussed, with the aim of using RNAi to silence viral genes and achieve an immunologic cure, with early patient dosing expected by year‑end and efficacy data in 2019. Safety considerations are addressed, emphasizing the natural, reversible nature of RNAi and the favorable safety signals seen in early trials and in competitor data. Finally, Dr. Fambrough notes Dicerna’s $700 M market cap, sufficient cash runway for the upcoming readouts, and an upcoming earnings call to update investors on collaborations and progress.
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Now joining us is our buddy, Von Van Rosen, CFA.
Hey Ed, how you doing?
Well, I know I'm doing good, but let me, let me kind of finish that because you, you're, you have so many different credentials. I don't know if I got enough space on my page to read them all out here. So, uh, John is our resident biotech analyst and also works for Zacks too, but we lend him out to them from time to time. But John, again, thank you for the show. And you have a guest for us today.
Certainly. Yes, I do. Um, today we're going to speak with Doug Fambrough and he is the CEO of Dyserna Pharmaceuticals. And for all you looking at your computer screens right now, ticker symbol DRNA. And it's a $700 million market cap RNA interference company, and they're developing a portfolio of products that address liver diseases. And Doug, are you there?
Here, John. Thanks for having me today.
Certainly. Well, we're great. We're glad to have you on CEO Money. And can you just share with us some of your background?
Sure. I founded Dyserna Pharmaceuticals about 10 years ago. I came at this from the science side. I'm a I'm a geneticist by training. I worked on the Human Genome Project back in the late '90s when we were sequencing the first human genome, and then I spent 10 years as a venture capitalist trying to find the technologies that we could apply to what we learned in the Human Genome Project and turn that into pharmaceuticals. I got very excited about the technology of RNA interference and invested in one of the first RNA interference companies that was subsequently bought by Merck for about $1 billion. $1.2 billion in 2006. And with the further advances that have been made in the field, I formed Dicerna Pharmaceuticals the following year, and here we are today taking a more advanced form of the RNA interference technology into the clinic.
Well, thank you, thank you for sharing that. And it looks like the stock over the last several months has done very, very well. You know, also we've seen a lot of new technologies get approved by the FDA. Some of these would be checkpoint inhibitors. We've seen CAR-T therapy last year.. And now we have interference RNA in front of the FDA and EMA from Alnylam.
Now, what— John, hold on a second. Let me jump in for a second. For those of us who are not quite as brilliant as you are, what is RNA interference?
Sure. Well, I can give a short primer, and we have talked about this before, but RNA interference is a way that— it's a natural mechanism where the body can actually block proteins that are being made. It can silence proteins. So if there's a bad protein in the cell, you can— the RNAi mechanism can go in and silence it. So it sounds simple, but it's actually quite complicated. But Doug was going to share some other things with us about how Alnylam's drug, patisiran, going in front of the FDA and EMA might impact or bring RNAi to the masses and let us see a little bit more information about it. Doug, what do you think this could do?
Well, as you're mentioning, John, we are on the likely verge of approval of the first RNA interference-based pharmaceutical. It's an earlier generation of technology of what we're doing, but what it shows is that you can use this mechanism to silence genes, proteins that are inappropriately active in disease, and you can do so effectively and safely in patients in a clinical setting. That's something that I think the real PhD wonks like myself have appreciated for a while, but this is a signal to the broader market that I think everyone can understand that this technology has arrived, that is working now to effectively treat patients. And this is going to be an important new pharmaceutical class.
We think so too at Zacks, because we've done a little work on that as well with some other companies. So can you help us also understand how RNAi is different from some of the other genetic technologies out there? And, you know, I'm thinking gene therapy or gene editing. You know, we've all heard of CRISPR. That's been in the news a lot recently. How is RNAi different?
There are some really important differences between what we do with RNA interference and technologies such as gene editing with CRISPR or gene therapy. Gene editing, gene therapy, those affect the heritable material, the DNA inside the nucleus of the cell. Once you make a change there, there's no going back. And there's a lot of risk and difficulty in making those sorts of changes. We do something that's much more similar to the way pharmaceuticals have always worked. While the drug is present, we turn off the inappropriately active gene. But as the drug fades away, and that does take weeks or a few months in the case of RNAi, then things go back to the way they were. So if you've made a mistake or you no longer need to treat, With RNAi, it's like a normal drug. You withdraw treatment and you go back to where you started. That means it is much more conventional from a regulatory and from a— importantly, from a risk perspective.
Okay, well, that's helpful. And you just mentioned earlier that, you know, Alnylam was using an earlier generation of RNAi. How is your process or your technology different from theirs and some of the other players in the interference RNAi space?
Well, the drug that's going to get approved is one that's delivered with a long intravenous infusion, and it uses something called lipids to get the drug into the body. And we're not all that able to tolerate lipids in our body, so you need to give some drugs along with that to suppress your own negative reaction to the lipids. And also, if you give too much, you might potentially be at risk. The way we have perfected the technology, and there's some others working on this as well, is to be able to deliver it with a simple injection, like an insulin shot, and do so very infrequently, maybe 4 or 6 times a year. And in working with this technology, we found that it's very well tolerated by the body, that we can give in test animals up to 100 times what we would expect to give a patient and not have any adverse reactions. We're dealing with, as you noted in your introduction, a natural system within the body, and we have found a way to deliver a trigger to this natural system that your body really recognizes as self and doesn't have any negative reaction to. So we have a very convenient way to administer it, like an insulin shot, very infrequently, and it's extremely safe to administer it, only having the effect that we're trying to have.
It's interesting when you mention this particular type of drug. We've had discussion after discussion— this is Ed Baxter again, by the way, I'm sorry. And we talk about these different drugs. One thing you mentioned before, you mentioned the fact that it's more of a natural procedure versus a procedure where you're introducing something to the body that may potentially reject. How important is that? And we'll have about a minute or so to answer that. How important is that when you look at the potential approval of the drug versus other drugs that don't have those same types of efficacy?
You know, we're always looking at the ratio between the risk that giving a drug to a patient causes versus the benefit. And so the safer, the fewer negative side effects that you have, the better that benefit-to-risk ratio is in your favor. The better it is for patients, the better it is at treating the disease, and the fewer people that are going to suffer the negative side effects. So I think it's really important, and the industry strives to have pharmaceuticals that are as targeted and safe as possible. And with the current generation of RNA interference, such as what we're doing, I think we're doing a great job of only providing the benefit with the minimal risk. Perfect.
Doug will be back on the other side. Well, after this break, we'll talk to you a little bit more with Doug— excuse me— Doug Fambrough and John Vander Vosgen of Zacks Small Cap Research. Thank you. We'll be right back. Welcome back to CEO Money. It's Ed Baxter sitting in for Michael Yorba with John Vander Vosgen and Doug Fambrough. We're talking about Dicerna Pharmaceuticals. Take it away, John.
All right. Thank you, Ed. Well, I guess this is the part of the show where we can talk a little bit about some of the indications that you're pursuing. And I think, Doug, you and Dyserna are looking for a cure for primary hyperoxaluria, and that's also your lead indication. What can you tell us about that disease? How big is it?
And what else should we know? Sure. I suspect most people aren't familiar with this disease, but what that name means is too much oxalate in the urine. That's a description of a metabolic disorder that these patients have. It's very rare. We're really probably talking about several thousand people in the United States, but it's a very serious disease. It's an inborn error of metabolism, so you get a bad copy of a gene from mom and from dad, and as a result, your liver makes this chemical oxalate, and the oxalate destroys your kidneys and puts you on dialysis and subsequently destroys other tissues in the body. So it's a very serious disease that is very hard on the families and of course the patients themselves and extremely expensive to treat. What we do is we use the RNA interference pathway and we turn off the gene responsible for making the oxalate. And that is likely to be what we would call a functional cure for the disease. In the absence of the oxalate, you're not going to get the kidney damage, you're not going to get the damage to the other tissues in the body. So we're very optimistic that we're going to take what is currently an untreatable, really serious genetic disease and give these patients their lives back.
And how far along are we in terms of development of this?
Well, we know it works very well in animal models, and we've started testing this in humans. And really, by probably the middle of the second half of this year, we'll know if we can effectively turn off the oxalate production in patients. We know we can do that in human cells in a tissue culture dish. We know we can do that in animals that have the same disease. So I think it's very likely that we're going to find that we can do this in, in humans as well. And it's a very exciting milestone for our company in the second half of this year.
So we should expect a Phase 1 trial in second half '18?
Is that right? Well, we're going to— the results from the Phase 1 trial that we're doing now, and since we're doing this trial in patients who have primary hyperoxaluria and we're looking at the oxalate levels, we should really know from this clinical trial whether the drug works well or not.
Okay, and then the next step after that, I— you and I had talked earlier and I think you said you might be able to combine a phase 2 and a phase 3 trial together.
That's correct. In a disease of this severity and with this size of patient population, we'll go right into the kind of clinical trial that the FDA requires to get the drug approved and on the market. So that's what we call a registration trial, and assuming our drug works, we'll move right into that phase of clinical testing.
All right. Well, that sounds exciting. And you also have a number of other indications. I think probably the second one that is of a lot of interest would be what you're working on in hepatitis B, and that's an immense market. You know, we've done work at Zacks on that. Millions of people worldwide have it. I think about 14 million people in the US. Multiple of that outside the U.S. What, what does the future look like here?
Yeah, this is the other end of the spectrum. There are about a quarter of a billion people worldwide who have hepatitis B virus. It's one of the top 10 causes of death globally, and a large majority of liver cancer cases are due to people who have the underlying hepatitis B virus infection. Well, we can take this RNA interference mechanism and we can turn it onto the virus, that we can actually turn off the viral genes, and that should set— create a situation where the patient's own immune system can come in and clear the virus, where normally the virus blocks that. We're very optimistic about this indication. We should start treating people in around the end of the year for this program, and in 2019 we'll be able to start seeing how many of those people can effectively clear the virus and in essence have what we would call an immunologic cure of hepatitis B.
That sounds like a great, great pursuit. Safety is another issue that's always a big deal with the FDA and, you know, sometimes can take one drug and knock it out of the running if it's not in the right place. So maybe you could tell us a little bit about the safety of RNAi.
Well, because it's a natural mechanism, it has the potential to be very safe and not have any side effects. That are unrelated to the way you're treating the disease. Certainly that is what we see with the current generation of RNA interference when we do the safety testing that's required of pharmaceuticals. And so far in our Phase 1 trial, we haven't seen anything that suggests that RNA interference itself creates a safety issue. We were talking in the first part of the show about another company, Alnylam, that has an earlier generation of RNA interference under review by the FDA now, and that drug has been shown to be quite, quite safe. So I think as a class, this is going to be a very effective way to just induce the disease treatment that you want to induce without causing unrelated side effects.
Okay, great. And I think you're reporting a little bit later this week, aren't you?
We are. We have our earnings call. For little biotechs like us, that's often not such a big deal, but it will allow us to review the corporate collaborations we've done, the progress in these programs, and and talk about our current resources. We have enough cash to take us through all of the clinical readouts associated with hyperoxaluria rare disease program as well as the hepatitis B virus clinical work for that first proof-of-concept phase.
Well, Dr. Farnborough, it's Ed Baxter again. First, I want to thank you for joining us and telling us about Dysirma and also RNI. I think that going forward, I'm looking at the fact that you can actually put this stuff into people before it's actually approved. That in itself is amazing to me. One, I, I wanna thank you for joining us today.
