Alnylam Pharmaceuticals Inc (ALNY) 2011 Q3 法說會逐字稿

Ladies and Gentlemen, thank you for standing by. Welcome to the Alnylam Pharmaceuticals, Inc. conference call to discuss the third quarter 2011 activities and financial results. There will be a question and answer session to follow. Please be advised that this call is being taped at the Company's request.

I would now like to turn the call over to the Company.

Good afternoon, I'm Cynthia Clayton, Senior Director of Investor Relations and Corporate Communications at Alnylam. With me are today are John Maraganore, our Chief Executive Officer, Akshay Vaishnaw, our Chief Medical Officer, and Mike Mason, Vice President of Finance and Treasurer. Barry Greene, our President and Chief Operating Officer, and Laurence Reid, our Chief Business Officer, are currently traveling on business and are not able to be on the call today. For those of you participating via conference call, the slides we have made available via webcast can also be accessed by going to the News and Investors page of our website at www.Alnylam.com.

During today's call, as outlined on slide 2, John will provide some introductory remarks and general context. Akshay will summarize our clinical and pre-clinical R&D activities. Mike will review financials and guidance. And John will provide a brief summary of our business highlights and goals before opening the call up to your questions.

Before we begin and as you can see on slide 3, I would like to remind you this call will contain remarks concerning Alnylam expectations, plans and prospects, which constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors including those discussed in our most recent quarterly report on file with the SEC. In addition, any forward-looking statements represent our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements.

I will now turn the call over to John.

Welcome everyone and thank you for joining us this afternoon. I will be referring to slide 4 during my brief introductory comments.

This past year has been a very important year for Alnylam as continue to make meaningful progress in our transformation from a platform company into a product company focused on advancing RNAi therapeutics to patients. In fact, the progress we have made with our clinical pipeline has been quite significant, where we now have 4 RNAi therapeutic programs in clinical development. This includes ALN-TTR01 for the treatment of transthyretin-mediated amyloidosis where we expect to present data from the Phase I trial later this month.

In addition, we were pleased to initiate a Phase I trial with a ALN-PCS for the treatment of severe hypercholesterolemia. The start of this trial marks an important milestone in our Alnylam 5x15 product efforts as it is the first clinical program using our second generation lipid nanoparticle or LNP technology where we aim to have important safety tolerability and clinical activity data at or around year's end.

Without a doubt the next couple of months promise to be a very exciting and important time for the Company. Particularly from the standpoint of clinical activity data from our ALN-TTR01 and ALN-PCS programs. And this is the case for several key reasons.

First, these results if successful, could provide needed proof-points for RNAi therapeutics as a novel class of innovative medicines and are exactly the type of data needed in the RNAi field overall to re-earn investor and pharma confidence. Further, these data will provide key incites on our first generation and second generation LNP delivery technologies, specifically ALN-TTR01, with first our generation LNPs, and ALN-PCS, with our second generation LNPs. Specifically, we would hope to see the progress that we had made with second generation LNPs translate in humans.

Finally, if we achieve successful results from these studies, we will garner substantially increased confidence for execution on our entire Alnylam 5x15 product strategy. We believe it will mean that Alnylam has a very clear opportunity to build a great company, delivering innovative medicines to patients, and rewarding our shareholders for their commitment.

Alnylam remains focused on and passionate about RNAi therapeutics as breakthrough medicines for patients. In this period currently of clinical translation, we are learning a new language, it's called RNAi in Man, and as we learn this language well, we believe we will deliver clear value creation for Alnylam in the future.

I will now turn the call over to Akshay to review our clinical activities, our pipeline, and our scientific progress. Akshay?

Hello everybody.

As John mentioned, we continued to make significant progress in the advancement of our clinical pipeline which includes both our Alnylam 5x15 programs and our partner based programs. ALN-TTR01, our lead Alnylam 5x15 program, targeting transthyretin or TTR, for the treatment of TTR-mediated amyloidosis, continued enrollment in a blinded, randomized, placebo-controlled, single-dose escalation, Phase I study. We will send data from this study later this month at the International Symposium on Familial Amyloidotic Polyneuropathy in Kumamoto, Japan.

We also remain on track to file regulated documents with ALN-TTR02, which uses our proprietary second generation LNP delivery technology around year's end. Importantly, this program utilizes the same LNP formulation currently in Phase I clinical testing in our PCSK9 program.

We are also making very strong progress with our GalNAc conjugate delivery technology. We look forward to providing you specific guidance on this effort at the beginning of next year.

Moving on to our PCSK9 program, we initiated dosing in a Phase I trial with ALN-PCS, targeting PCSK9 for the treatment of severe hypercholesterolemia. The trial is being conducted in the UK as a randomized, placebo-controlled, single-ascending-dose study, enrolling approximately 32 healthy volunteer subjects with elevated baseline LDL cholesterol. Subjects are being enrolled into 5 sequential cohorts of increasing doses ranging from 0.015 to 0.25 mg/kg.

The primary objective of this Phase I study is to demonstrate safety and tolerability of ALN-PCS in subjects with elevated baseline LDL cholesterol. In addition, we have an opportunity to assess preliminary human proof concept based on blood measurements of PCSK9 protein and LDL cholesterol levels. If successful, these results will provide important human POC for ALN-PCS and will also validate the safety and potency of our proprietary second generation LNP platform which is being applied to ALN-TTR02 and other Alnylam 5x15 programs.

We believe ALN-PCS has the potential to make a significant impact in the treatment of severe hypercholesterolemia as this RNAi therapeutic targets both intracellular and extracellular PCSK9, a target validated by human genetics, that is known to play a central role in LDL cholesterol metabolism. We look forward to presenting data from this study at or around year's end.

During the quarter, we also selected our fourth program in our Alnylam 5x15 product strategy, namely ALN-APC, an RNAi therapeutic targeting protein C for the treatment of hemophilia. By reducing levels of protein C, a naturally occurring anticoagulant protein, ALN-APC is designed to act by increasing thrombin generation, and reducing the frequency of bleeding in hemophilia patients, including the more severe patients with inhibitors against their replacement factors. Targeting protein C in hemophilia is validated by human genetics since hemophilia patients who have co-inherited the factor V Leiden mutation, which results in protein C resistance, have a reduced incidence of bleeding.

We are encouraged by the pre-clinical data we've seen to date. In fact, this past September, we presented new data from this program at the annual meeting of the Oligonucleotides Therapeutics Society, which included robust dose-dependant and durable silencing of protein C,. Specifically when administered as a single intravenous dose of 0.3 mg/kg, the LNP-formulated siRNA achieved 90% silencing of protein C messenger RNA within 24 hours of dosing and with the effects lasting for over 2 weeks. Furthermore, the ED50 for protein C silencing was determined to be 0.02 mg/kg.

We've also made progress on our ALN-HPN program where we are targeting the hepcidin pathway for the treatment of refractory anemia. We expect that you will hear more about this program, and also other programs being advanced as candidate programs, for our fifth Alnylam 5x15 program, at the upcoming American Society of Hematology meeting in early December, where we have a good number of abstracts accepted for presentation. We remain on track to announce the fifth program in the 5x15 initiative around year's end.

We also continue to advance our partner based programs during the quarter as noted on slide 7. Beginning with ALN-VSP, in August we reported that we have completed treatment of patients in the Phase I study protocol with some patients continuing treatment in the extension study. As of today, 3 patients with disease control continued to receive ALN-VSP under the extension protocol including 1 endometrial cancer patient with an ongoing partial response, who has now received drug for more than 17 months.

Importantly, this study adds to our growing database of patients who received systematically delivered RNAi therapeutics, expanding our understanding of the human pharmacology of these drugs, providing further confidence that siRNAs can be administered in a safe and well tolerated manner over a long duration of patient exposure. And also demonstrating that we can achieve RNAi in mass, a major accomplishment to say the least.

We also continued to enroll patients in our Phase IIb study of ALN-RSV01 for the treatment of RSV-infected lung transplant patients, and are on track to complete the interim analysis, which is blinded to Alnylam and investigators, by the end of 2011, and present data in 2012.

In summary, we are very pleased with the progress we are making as we advance our pipeline of RNAi therapeutics in the clinic. We've generated significant human clinical experience with RNAi therapeutics now. We've enrolled over 500 subjects and patients across our clinical trials.

In our systematically delivered programs specifically, we have dosed over 70 patient who have received over 225 doses, including 1 patient now out more than 17 months. A very good sign for chronic dosing systematically delivered siRNA. I'm very encouraged with these data emerging from the clinical experience, and we look forward to reporting our key data points in the weeks to come. As John said, our clinical translational efforts are guiding our learnings of a new language, RNAi in Man, and our proficiency in this will drive future execution on our Alnylam 5x15 strategy.

And with that, I would like to now turn the call over to Mike for a review of the financials. Mike?

Good afternoon everyone. Please refer to slide 10 in our presentation.

We continue to maintain a strong financial profile, ending the third quarter with approximately $286 million in cash. Our GAAP revenues for the third quarter of 2011 were $20.8 million, consistent with prior quarter, we continue to recognize revenue from the amortization of up front payments from the strategic alliances we have formed which accounts for a significant and re-occurring portion of our quarterly GAAP revenues.

Moving to expenses, R&D expenses were $24.3 million in the third quarter of 2011, as compared to $27.5 million, in the prior year period. The decrease in R&D expenses during the quarter was due primarily to lower external service expenses, including pre-clinical costs associated with our ALN-PCS program. We expect that R&D expenses will remain consistent for the remainder of 2011.

G&A expenses remained consistent during the third quarter of 2011, as compared to the prior year period, with $9 million and $8.9 million respectively. We expect that G&A expenses will also remain consistent for the remainder of 2011. With respect to guidance for 2011, we continue to expect that we will finish the year with greater than $250 million in cash.

This concludes the financial highlights and I will now turn the call back over to John. John?

As you've just heard, we've made a lot of progress here, very important progress over the past few months, positioning us to continue executing on our mission of building a top tier bio-pharmaceutical company focused on RNAi therapeutics. We were also very pleased to announce this morning our continued success in advancing new applications of RNAi technologies and in forming innovative alliances. In particular, we announce the advancement of a new RNAi technology called VaxiRNA, that applies RNAi technology for the enhanced production of vaccines, such as flu, in manufacturing systems such as cell culture and even chicken eggs.

We've purposely kept this effort stealth over the last couple of years to advance our data and our IP estate. But it stems from the work that we've been doing on Alnylam bio-therapeutics, which continues to be a exciting application of RNAi technology.

Our goal in this effort is to increase the production of virus particles that are used in the manufacture of vaccine products. As you know, there is significant unmet need for new technologies that expand the scale and accelerate the speed of vaccine production for optimized global immunization for a number of vaccine pathogens. It's exiting to now apply RNAi technology for this major application.

Of course a compelling aspect of the VaxiRNA technology for Alnylam is the typical development cycle time for vaccines, which can be significantly more rapid than the development cycle time for therapeutic products. This means that if this application of RNAi is successful, we could see a more rapid path to commercialization.

We were also pleased today to announce our fist VaxiRNA partnership with GSK, a global leader and innovator for vaccine development and manufacturing for influenza and 2 additional pathogens. In this new collaboration, Alnylam is eligible to receive significant economics including research funding, milestone payments, and importantly, payments on unit sales of commercialized vaccine product.

Turning to our remaining 2011 goals, which you can see on slide 13. By -- between now and at or around the end of the year, we expect to report human proof of concept data from the Phase I study of ALN-TTR01, which will occur later this month, report human proof of concept data from the Phase I study of ALN-PCS at or around year's end, advance our second generation ALN-TTR02 program toward the clinic with the goal of filing regulatory documents at or around the end of this year, continue advancing ALN-HPN for refractory anemia, and ALN-APC for hemophilia, toward the clinic and also name our fifth Alnylam 5x15 program at or around year's end.

We have also expected to continue to advance our partner-based programs, ALN-VSP, ALN-RSV01, and ALN-HTT, including a potential partnership for VSP before starting Phase II, data for RSV01 in 2012, and an IND or IND equivalent for our Huntington's program in 2012.

Turning to the business front, we continue to advance a broad range of on-going partnership discussions, such as our new deal with GSK, and this also includes partnership discussions on certain key pipeline programs. We also continue to explore new alliances related to RNAi technology, such as our micro-RNAi therapeutics programs with Regulus, and biologics manufacturing with Alnylam bio-therapeutics, and also our VaxiRNA efforts with GSK. And lastly, as Mike commented on earlier, we expect to maintain a strong financial performance and finish 2011 with greater than $250 million in cash.

With that I will now turn the call over to the operator for your questions. Pamela?

(Operator Instructions)

Josh Schimmer, Leerink.

First question, what are the doses of the a ALN-PCS program that you are exploring and which of those will you be reporting by year end?

Sure. Akshay, do you want to handle that?

Yes. The goal, Josh, is to get the study done, which executes from 0.015 mg/kg up to 0.25 mg/kg, complete those cohorts by year's end and report at or around that time.

On the VSP program? With the dose limiting talks that you've seen there, how quickly did those side effects resolve, like the chills and the thrombocytopenia?

They are all very short lived, Josh, and there are also mild to moderate severity, generally within 24 to 48 hours they result.

Those were observed at doses that exceeded the 1 mg per kg dose which we've selected as the Phase II dose for that program. And in general, I think it's fair to say the safety profile that emerged from that experience, especially in the setting of advanced malignancies, was very clean in general compared to other chemo therapeutics.

Back to the PCS program, what are you expecting to see at those dose levels both on efficacy and safety? Are you looking to eliminate some of those safety concerns and achieve equally potent or maximally potent reduction in protein expression or what? Is this more kind of an early safety look where ultimately you will eventually go higher on the dose?

I mean, from a safety perspective, Josh, recalling this is our second generation proprietary LNP that supports PCS and of course TTR02 as well, the dose range we are exploring here is significantly lower than in the first generation and through pre-clinical grounds and other understanding, we anticipate that this would be at least as good as the first generation, if not better, from a safety perspective because of the lowered exposures. And the dose range we are targeting, while we a eagerly await the data, we anticipate seeing some knockdown in that dose range. We are excited to get these cohorts finished up and get the data out around the year's end.

Certainly just to add to that Josh, one of the big advances with the second generation LNP platform which obviously is being used in the PCSK9 program and will be use used in the TTR02 program, is the broad and therapeutic index that materialized in pre-clinical studies. The expectation in this human Phase I study is obviously that we confirm safety and tolerability which is the most important objective but that we also generate significant silencing and knockdown of PCSK9 protein and as well as significant decreases in LDL cholesterol and we would expect to present those data at or around year's end.

So you are saying that the 0.25 should be delivering enough RNAi to see a meaningful reduction.

We would fully expect that based on the pre-clinical studies that have been done with that proprietary second generation LNPs. Absolutely.

And if I could just ask one more quick question. What is the MC3 lipid? What is it that makes it so much more potent than the first generation? How is it working that it is accomplishing what it accomplishes?

That's an outstanding question. It comes out of a lot of work that we have been doing at Alnylam together with our collaborators at the University of British Columbia, AlCana, and also at MIT. These lipids are novel lipid compositions that have specific chemical attributes that are optimized for, not only distribution of siRNAs to the liver, and we've proven in past studies that it's delivered to the liver and the [anpathize] specifically in an [ApoE] dependant fashion. But also because of the PKA of the head group of the MC3 lipid, it is more active in terms of releasing the siRNA from the endosome, where these lipid nanoparticles are taken up. The science here is really quite elegant and this is all work that we've published and we would be happy to share with you. But it shows the ability of developing some very innovative bio materials for delivery of siRNAs that we are very proud of.

Thanks for answering the questions and look forward to seeing pretty important data points this year.

You bet. We are too.

Ted Tenthoff of Piper Jaffray.

Great to see the momentum you guys are gaining here and again very excited with the data coming out. If I can ask a little bit about the new GSK collaboration. Very cool deal. I think it shows the breadth of the whole RNAi platform. I know Laurence and Barry are on the road, can you give us little bit more of an understanding of how that program works or how that partnership works and how the technology will be applied in this vaccine manufacturing process?

Sure. Absolutely, Ted. Happy to do so. I will have to keep my comments in somewhat general terms. What we are doing is using the same approach that we developed for Alnylam bio-therapeutics where we've developed --we've used our delivery approaches for humans and applied it to cell culture in the case of CHO cells with bio-therapeutics. In the case of vaccine production, we are targeting genes in either cell culture systems or even in the egg, which is another manufacturing vessel used for manufacture of certain vaccines that basically silence key inhibitory pathways involved in controlling virus replication in those cells or systems. And by targeting those types of genes, we have a proprietary set that we've identified in our work, we are able to augment virus production in, for example, cell culture.

That is a very significant objective in vaccine manufacturing, namely the ability, especially in cell culture systems, to have a significant increase in the productivity of cells such that the viral titer that's generated and then ultimately used to purify the vaccine components, is as robust as possible. Often times all of us experience -- know of years in which the flu vaccine is hard to get, for example, for whatever reason the viral titers that are provided to the manufacturers may not grow that well in the cell culture systems. This approach obviously could significantly change that whole landscape of growing viruses. We think it's a very exciting potentially very high impact application of RNAi technology. And as I said in my opening comments, one of the attractive aspects of this application is the relatively short development cycle time for vaccines. For the annual flu vaccine, for example, that lends itself very nicely to potential opportunities with this technology for more rapid path to commercialization.

That's very interesting. So it's really more of an efficacy enhancement even more so than the yield enhancement?

Well, I would say it's a little of both. It's ultimately driven by enhancing the yield of virus that's produced in the cells.

Okay. Great, that's very interesting. Look forward to the data coming up and thanks for the update.

Marko Kozul, ThinkEquity.

Wanted to echo my congrats on your progress as well. Maybe follow up on Ted's question, are there any timelines you can help us with in terms of understanding the vaccine RNAi opportunity and what it means to the company?

It would be premature to do that right now. We will provide more guidance next year, at the beginning of next year, at different meetings that occur around that time to where we usually talk about our goals. For right now I think we've had this technology in play for a while. We kept it very quiet to develop the technology further. We are very pleased to partner with GSK, they are really one of top vaccine manufacturers in the world and we are excited to work with them on this and we'll provide guidance as soon as we can.

Perfect. What about bio therapeutics? Anything coming potentially near term or 2012?

No, there is a lot of work going on there and we continue to have discussions in terms of future partnerships and think about different business opportunities with that approach, including even spinning it out. There are discussions on-going that we are looking at the best value creation approach for that technology for the future.

Just a quick question on LNPs. You mentioned earlier in the call that you will be looking and comparing the ALN-TTR and PCS data in terms of delivery. Can you help us understand what you will be looking for? These are obviously different compounds for different indications. What will you be looking for in terms of safety to help you understand the performance of the two?

I think, as you appreciate Marko, this is actually a remarkably exciting time for us at Alnylam, because not only are we getting hopefully important and critical data with TTR01, which is first generation lipid nanoparticle using our TTR program, but almost within weeks of each other we're generating key data on PCSK9, a different target but importantly, a program that's using our second generation lipid nanoparticle formulation. We are getting, within rapid fire succession, very key data as it relates to both first generation LNPs and second generation LNPs as well as our TTR target and also our PCSK9 target. We are going to end this year with a remarkable level of human translational data that really, I think to use a word you've used before, spring-load the company for the future. We are excited about what that means. From a safety stand point, the goal is to demonstrate safety and tolerability with both approaches. Really around efficacy and the doses that are required for each of those approaches to achieve knocked-out-of-target change in humans. That's what we are going to be looking at very eagerly as these data unfold in the weeks to month to come.

John, thanks. One housekeeping question. In the press release, it mentions enrollment is ongoing for ALN-TTR. Can you clarify that and what will be presented in Kumamoto? Will it be the entire study or the just first portion before it was expanded?

It will be all the data that we have available at that time. The data still isn't rolling. There are a total of 36 patients that are eligible to be enrolled. You will hear the vast majority of the experience at that meeting. There may still be some additional groups that are enrolling at the time of the meeting and might continue to enroll thereafter.

Thanks again. Look forward to your progress.

Christopher James of MLV & Company.

Just a couple of quick ones. On the TTR, what is your strategy on the Phase II, what should we expect in terms of design and timing should it look like the Phase I study?

Great question Chris. Akshay, do you want to handle that?

Sure. Especially the goal in the Phase II study, and remember one of the things that's possible in the disease like TTR-mediated amyloidosis is to go rapidly from the first in human Phase I study to the Phase II/III study. What we want to do once we file the TTR02, which we think will be superior than TTR01 in terms of knockdown and safely, is to progress as rapidly as possible to Phase II/III study, which would be the definitive study demonstrating safety and efficacy in that disease. The goal is to do that in 2013, so you can fully anticipate that in that study, the primary end point would be a clinically relevant endpoint to a disease like TTR-mediated amyloidosis where we could use something like a neuropathy endpoint such as Nissl.

The details around that type of obviously study are in the future. We will give more guidance closer to the time. It's key to understand we still on track to file TTR02, which I reiterate looks superior to TTR01, at least based on all the pre-clinical data and we're getting increasing confidence in the delivery of TTR02 as ALN-PCS02 reports data with that second generation LNP, and then to get that in to the clinic around the year's end.

Thanks. Onto the PCSK9 program, obviously it's difficult to comment on competitors, but going through the AHA abstracts, there are 2 Phase I's that stick out, the Amgen program and the Regeneron program. Where do you see the Alnylam program fitting in, how do you expect to differentiate on safety and efficacy?

That's a great question, Chris. We believe strongly that the approach we are taking with siRNA provides a true phenocopy of the human genetics. Specifically, we are targeting both intracellular PCSK9 and extracellular PCSK9 and that's important because PCSK9 regulates LDL receptor levels at the level of the hepatocyte surface, but also regulates the transport of LDL receptor from the [goal G] to the cell surface, antibodies don't touch that store of PCSK9. We feel -- very important that we feel that our approach is the only one that really has the full genetic support of what has been seen in humans.

We think that's going to translate in to a cleaner therapeutic profile overall, and specifically, we can comment based on published materials in the Amgen antibody program, for example, that they see regulation and specifically decreases in HDL levels with PCS antibodies, which of course, is not seen in genetics and not a desired outcome of targeting anything for treating severe hypercholesterolemia. And that's not seen with siRNA targeted PCSK9. There are already differences that have emerged between siRNA and antibodies and we will see how that plays out over time. But for right now, we are the only approach in the clinic that phenocopies the human genetics and we like where we are sitting.

One final question. Particularly at this level, have you and your cash position, have you considered or is the Board considered, I know you've been asked in the past, a share buyback?

So Chris, we think that we, as a Board, think about every way to build value for shareholders and that's our commitment and obligation. As we think about ways to build value from our resources at the Company, we believe that applying them to the advancement of our business plan, and specifically the advancement of our clinical programs, is the right way to proceed. We assess that from time to time as a Board and consider other ways of thinking about building value for shareholders, and we will update people in the future if and when we think about a share buyback but at this time, don't believe that's the right path in terms of building value.

Thanks for taking my question and look forward to the data.

Mike King of Rodman.

Most of my questions are concerning follow ups to those that have gone before. Maybe get a little more detail on PCS. I don't know if you care to comment on sort of -- in some of Akshay's comments you've mentioned your, was it an ED50 or an IC50? I forget exactly what metric but can you relate to that kind of metric to how you are thinking about PCS in humans so where should those doses distribute out to?

Akshay, you want to comment?

In general, for a given siRNA, in the first generation LNP, if 50% knock down was seen at one milligram per kilogram, then for that same siRNA in the second generation LNP, which is what supports, of course, ALN-PCS, ALN-TTR02, we would see the same or better degree of knockdown at around 0.1 milligram per kilogram or lower. We are seeing 10 plus fold improvements in terms of potency between the first generation and second generation and without going to specifics of every siRNA we've studied, I think it's a very useful yardstick and that helps everyone hopefully understand why the dose range we've selected from 0.015 to 0.25 is in the range where we should see significant knockdown. The study is ongoing. It's in healthy volunteers and it's proceeding well, and we anticipate wrapping up towards the end of the year. We will know the data very soon.

Okay. So you should be in that kind of sweet spot is what I hear you saying?

We feel the range of doses that we are in, in the study, is absolutely the right range.

Great. Not to get too cute on the GSK agreement, but maybe Mike can answer the question about whether if we sort of look back, if we take a look at when you guys report the fourth quarter and we look at your revenue over the course of the year, should we be able to detect a little bump based on what you are accounting for the GSK payments?

Mike you want to handle that?

We actually haven't quite figured out the accounting on the Glaxo alliance, we are working internally now. Our GAAP revenue should be relatively consistent from Q3 to Q4 this quarter.

Then, just with regard to second generation, if I recall correctly, it's only RSV that's got another, has been formulated with second generation lipid nanoparticle? Or am I mistaken?

Both PCSK9 and TTR02 use second generation lipid nanoparticle. Remember RSV is an inhaled drug that doesn't use any lipid formulation.

Would you consider going back through VSP and put in a second generation version just to make it more amenable to partnering?

We have a drug in the case of VSP that's shown some interesting single agency anti-tumor activity and so I think the partner is going to be interested in taking that drug forward on a stand-alone basis. Wouldn't want to have to go backwards at that point in time. That would certainly be consistent with the nature of discussions we are having right now with potential partners.

Okay. Then one more real quick one. There was an announcement this morning by Dicerna. They received -- they had IP that allowed on there, dicer specific technology.

Good for them. I didn't see that.

Okay. I didn't know if you felt that any of their IP -- on yours or --.

No. We continue to believe that the dicer substrate approach is an interesting approach in the field. It's one that we don't see any advantages to and it's one we think is encompassed within the broader IP that we have at Alnylam. If there are patents at issue in that space, we would think they are little circles in our bigger circle at the end of the day.

Appreciate it.

Alan Carr of Needham & Company.

Thanks for taking my question. In terms of the TTR01 trial, the data we're going to see, were you able to dose all the way up to the highest dose which is 1 mg per kg, will we see that in Japan?

Yes. You will see doses up to 1 mg per kg, absolutely.

It sounds like -- I just want to know if you could characterize this a little bit more, sounds like you're planning for a relatively short Phase I trial with this TTR02 and then moving quickly into some sort of Phase II trial here with most likely TTR02? And then the following year, a Phase II/III? Is that the plan?

Akshay, you want to comment? And I want to start by saying we haven't formally given guidance yet for much beyond the plans with starting Phase II in 2012 with TTR but as Akshay said, obviously we are very eager and of the eye to advance that to a pivotal trial as rapidly as possible.

Not much to add to that, Alan. We will follow TTR02 soon, enough in around the year's end and after that the Phase I POC will follow, and we are pretty excited that we can go rapidly through Phase II into the pivotal in 2013. That's the design really that is going to be key ultimately to demonstrate the safety and efficacy of the drug.

Stephen Willey of Stifel Nicolaus.

Just a quick one. Just curious as to what kind of role, if any, you guys played during the Roche sale of its R&A assets to Arrowhead and whether or not you guys were kind of actively involved in that process or just a bystander?

So we actually, as you can imagine, we are pretty actively aware of everything going on, on that. And very much in touch with Roche. We made it very clear to Roche at the beginning that we viewed their assets, many of their asset components to be very exciting and important. We obviously made it clear to them that we want only the best for our Kulmbach colleagues who used to be part of Alnylam and but at the same time, we also made it clear it wouldn't make sense for Alnylam to own a site in Germany again, that obviously after they acquired Kulmbach back in 2007, we built up infrastructure in Cambridge at our single site here to do what used to be done at Kulmbach. We told Roche we would do everything to help them in that transition of those employees, again who used to be Alnylam employees. As it relates to the Mirus site and the group in Madison, we certainly made it clear to Roche we viewed that technology to be promising and that we were hopeful that they would find a home for that technology and that we would be supportive of the partner they would find that ultimately took that on. We are delighted that Arrowhead was selected as a partner to work with Roche on the Mirus DPC technology, and we, of course, have had a previous partnership and still do with Arrowhead through their Calando subsidiary, they are a licensee of Alnylam IP for their cancer program. And we look forward to future interactions with the team at Arrowhead who we know very well.

I appreciate the color and congrats.

Our final question is a follow-up question from Mike King.

Thanks, don't mean to be so full of questions today but it's been a long time. I just wanted -- Akshay mentioned GalNAc during his formal comments. I was wondering what form that disclose is? Is that going to be in the form of a potential clinical candidate? Is it going to be a topline? Will it be a press release? Do you expect to show it at a conference? Maybe give us a little hint of how you may roll that out to the investor audience.

We are really excited about the GalNAc conjugate program, and as I said in a recent investor meeting, it is absolutely ready for clinical primetime. So starting the beginning of next year, you will hear a lot more about where that is going. It is exciting as a technology. It is enabled with subcutaneous dosing. We've got very nice data behind it and you will hear a lot more about it in-- as time comes on here. It represents an exciting step forward on delivery for us and one that we will realize in clinical progress.

Do you want to say at this point at how it melds with the second gen LNPs or to be determined?

Let me hold off on that, Mike. It certainly another delivery approach we think is important and promising. We certainly love them as an approach.

I share your enthusiasm.

With no further questions in queue, I would like to turn the call back over to John Maraganore for closing remarks.

Thanks Pamela, thanks everyone. We look forward to our continued progress. This is going to be a exciting period for Alnylam in terms of clinical data and it's going to be --obviously we are quite excited to share this information and data with you in the weeks to month to come or so. Let's stay tuned. Bye-bye now.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the presentation. You may now disconnect.