Page 5 of 7 – SEC Filing
Explanatory Note
This Amendment No. 2 to
Schedule 13D (this “Amendment No. 2”) amends and supplements the Statement on Schedule 13D filed with the United
States Securities and Exchange Commission on February 5, 2014, as amended to date (the “Statement”) by (i) RA
Capital Management, LLC (the “RA Capital”), (ii) Peter Kolchinsky and (iii) RA Capital Healthcare Fund, L.P.
(“Fund” and together with each of the foregoing, the “Reporting Persons”), relating to the Common
Stock (the “Common Stock”) of Dicerna Pharmaceuticals, Inc. (the “Issuer”). Capitalized terms
used herein without definition shall have the meaning set forth in the Statement.
| Item 4. | Purpose of Transaction |
Item 4 of the Statement is hereby amended
and supplemented by adding the following:
On December 13, 2017,
in connection with a proposed underwritten follow-on public offering, the Issuer entered into a letter agreement (the “Letter
Agreement”) with the Fund, a separately managed account for which RA Capital serves as investment adviser (the “Account”)
and all other holders (together, the “Preferred Holders”) of all of the outstanding shares of the Issuer’s
redeemable convertible preferred stock (the “Preferred Stock”).
Pursuant to the Letter
Agreement, the Preferred Holders agreed, subject to the completion of the offering, to optionally convert all of their shares of
Preferred Stock—to the extent not subject to certain beneficial ownership limitations imposed by the Issuer’s Certificate
of Designation (the “Conversion Blockers”)—into Common Stock and consented, if applicable, to the repurchase
of the residual shares of Common Stock that would be issuable but for the Conversion Blockers (the “Residual Shares”)
for $0.0001 per share. After the conversion and redemption, no shares of Preferred Stock will remain outstanding.
The Letter Agreement also
provides for Preferred Holders to waive and amend certain provisions in an amended and restated registration rights agreement (the
“Registration Rights Agreement”) by and among the Issuer and the Preferred Holders party thereto, including
the Fund and the Account. In consideration for the Preferred Holders agreeing to the optional conversion of the Preferred Stock
and to a waiver under and certain amendments to the Registration Rights Agreement, the Issuer agreed to issue to the Preferred
Holders pre-funded warrants (the “Pre-Funded Warrants”) exercisable in part or in whole at any time upon grant
for shares of the Issuer’s Common Stock at a price per share of $0.0001 per share. Each Preferred Holder may elect to receive
shares of the Issuer’s Common Stock in lieu of the Pre-Funded Warrants that would otherwise be issued to such Preferred Holder
subject to any applicable Conversion Blockers. Under the Letter Agreement, the number of shares allocable to each Preferred Holder
will be calculated based on the sum of (i) the number of shares of Common Stock into which the additional dividend accruals on
the Preferred Stock that such Preferred Holders would have been entitled to receive up to and including March 31, 2018 are convertible,
calculated immediately prior to the effectiveness of the conversion, and (ii) any Residual Shares repurchased, or to be repurchased,
from such Preferred Holder by the Issuer as described above (collectively, the “Additional Investor Shares”).
The formula for the Additional Investor Shares assumes (1) a conversion price of $3.19 per share of Preferred Stock; (2) application
of a dividend rate of 12% per annum from April 11, 2017 to October 27, 2017, and (3) application of a dividend rate of 8% per annum
commencing from October 28, 2017 through March 31, 2018.
The foregoing description
of the Letter Agreement does not purport to be complete and is qualified in its entirety by the full text of the Letter Agreement,
a copy of which is filed as an exhibit to this Statement and is incorporated herein by reference.
