Good day, ladies and gentlemen, and welcome to the BioCryst First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr.
John Booth, Senior Vice President of Investor Relations And Corporate Communications. Sir, you may begin.
Thank you, Ashley. Good morning, and welcome to BioCryst first quarter 2019 corporate update and financial results conference call. Today's press release and accompanying slides are available on our website Participating with me today are CEO, John Stonehouse Chief Medical Officer, Doctor. Bill Sheridan CFO Tom Stob and Chief Commercial Officer, Lynn Powell Following our remarks, we'll answer your questions. Before we begin, I want to direct your attention to slide 2, which discusses our use of forward looking statements.
And potential risk factors regarding an investment in BioCryst. As detailed on the slide, today's conference call will contain forward looking statements, including those statements regarding future results on audited and forward looking financial information as well as the company's future performance and or achievements. These statements are subject to known and unknown risks and uncertainties, which may cause our actual results, performance or achievements, to be materially different from any future results or performance expressed or implied in this presentation. You should not place undue reliance on these forward looking statements. For additional information, including a detailed discussion of our risk factors, please refer to the company's documents filed with the Securities And Exchange Commission, which can be accessed on our website.
I'd now like to turn the call over to John Stonehouse.
Thank you, John, and thanks to all of you for joining us this morning. 2019 continues to be an exciting year of progress for BioCryst. And we know you're looking forward to seeing the 24 week safety and efficacy results from the APeX-two study of oral BCX-seven thousand three hundred and fifty three for the prevention of hereditary angioedema attacks. We are too and we remain very confident that we will report these results this quarter. We're also on track to file in the first quarter of 2020.
We meet regularly with HAE patients as we did a couple of weeks ago. And the anticipation and demand we hear from them for an oral therapy is consistent and resounding. Many of these patients want the opportunity to live a normal life without the burden and discomfort of injections and infusions. As a company, we're working every day to deliver this important new treatment option to them because we know they're waiting. This focus on driving our programs forward also extends to our other oral treatment programs.
For acute HAE complement mediated diseases, and FOP. Following the successful completion of our ZENITH-one trial of 7353, for the acute treatment of HAE attacks in the first quarter, we are in the process of preparing for and conducting Our discussions on the Phase III study with regulators and expect to commence the Phase III ZENITH-two trial this summer. On our earnings call last quarter, we announced that we were moving BCX9930, an oral Factor D inhibitor for complement mediated diseases, into a phase 1 trial. That trial is on track to begin this quarter and we expect to have the results at the end of the year. We hope to get important PK and PD data from healthy subjects that will be very informative in guiding us through the remainder of the program.
Our oral ALT2 inhibitor for FOP is also on schedule to move into phase 1 clinical trials in the second half of this year. When you add it all up, we see an attractive pipeline with a number of important milestones that we believe have potential to create significant value for patients, and shareholders. Later on top of that, our first launch of a highly differentiated product in 7353 into the marketplace and we see a very different and exciting BioCryst. Even though we believe the oral profile of 7353 will lead to a high number of HAE patients wanting to try it, we are taking nothing for granted as we prepare to commercialize 7353. As we build out our team in key areas, our company profiles attracting exceptional candidates with proven rare disease experience.
And we have added some extraordinary talent to the company across medical affairs, market access, marketing, clinical and regulatory. Positive data from APeX-two will only strengthen this and will be a catalyst for us to continue building out the team in anticipation of a U. S product launch next year. Now I'd like to turn the call over to Bill, who will walk us through our plan for analyzing and reporting APeX-two results.
Thank you, John. As we await the data readout from Apex 2 this quarter, we thought it would be helpful to review with you how we will approach the data analysis around the primary endpoint and the secondary endpoints in this trial. APeX-two is a randomized double blind placebo controlled 3 arm trial testing 2 dose levels of orally administered once daily VCS7353, 110 milligrams and 150 milligrams prevention of angioedema attacks 121 patients with type 1 and type 2 HAE were randomized from centers in the United States, Canada and Europe. As a reminder, the trial enrolled very quickly In fact, it over enrolled and with 121 subjects is powered at 99% to detect a 50% reduction in attack rate versus Placebo. To qualify for the trial, patients were required to have 2 investigator confirmed HAE attacks during the running period of between 14 56 days from the screening visit, IEA minimum rate of 1 per 28 days.
In previous trials, the mean baseline attack rate was always much higher than the minimum requirement. We expect this will also be the case in APeX-two that the mean baseline attack rate should be in the range of 2 to 4 per 28 days. The primary efficacy endpoint of APeX-two is the rate of investigator confirmed angioedema attacks over 24 weeks of study drug administration. So the analysis will compare the on study attack rates patients receiving 7353 at each dose level to the on study attack rates of patients receiving placebo. As specified in the protocol and agreed with the regulators, the analysis will use well established statistical approach called the Hockberg step up procedure.
This controls family wide type 1 error associated with multiplicity of study arms and does not require specification of order of testing of the doses. In this procedure, each of the 2 dose levels of 7353 is tested against Placebo for the primary endpoint. Statistical significance is met for both arms if both P values are less than 0.05. If the largest P value is more than 0.05, then in the other arm, statistical significance is declared if its P value is less than 0.025. In addition, hierarchical testing is used to control the Type 1 error rate for multiple endpoints.
Testing may only proceed to the secondary endpoints statistical significance is met for at least one dose for the primary endpoint. The secondary endpoints for the 24 week analysis of APEC 2 are in hierarchical order of testing Change from baseline in the angioedema quality of life score at week 24, a portion of days with angioedema symptoms through 24 weeks Raative investigator confirmed HAE attacks during dosing in the effective treatment period beginning on day 8 through 24 weeks. The secondary endpoints reach those levels that meet the primary endpoint are tested in the order I just mentioned. Statistical significance at each step allows testing of the next secondary endpoint. If a single dose proceeds to the next level in the hierarchy, Statistical significance at the next level in the hierarchy declared is P is less than 0.025.
In the absence of statistical significant subsequent endpoints to that dose level are not tested, Following completion of the 24 week Blinded Placebo controlled study period in APeX-two subjects continuing an ongoing extension phase through 48 weeks. Patients initially randomized to placebo are re randomized to receive 1 of the 27353 doses in the extension phase and patients initially randomized to 7353 continue on the same dose. Subjects in APeX-two who complete 48 weeks of 7353 will contribute to the NDA long term safety database of 100 patients. Our APXS long term safety study also contributes to this total. Both of these studies continued to progress well.
We are and we are on target for an NDA filing by the end of the year and an MAA filing in the first quarter of 2020. As John mentioned, we are also on schedule to begin a Phase III study with our acute program this summer, and I would note that data from our Phase II ZENITH-one trial will be presented at the upcoming C1 inhibitor workshop in Budapest in May and also at the EAACI Congress in Lisbon in June. Now, I'd like to turn the call over to Tom.
Thank you, Bill. Our detailed first quarter 2019 financial results can be found in the press release we issued this morning and are summarized on slide 8. However, I'd like to highlight some information to help you assess and understand our future operations and financial statements for the first quarter was relatively quiet and uneventful. With the notable exception of extending our cash runway and enhancing our financial flexibility, by closing $100,000,000 secured credit facility in February. This closing represented an enhancement of an existing credit facility and thereby provided us $20,000,000 of immediate additional non dilutive capital and the ability to draw another $50,000,000 of milestone based non dilutive capital at our option.
As a reminder, $30,000,000 of this additional 50 is available following positive APeX-two data which we consider sufficient to file a new drug application. This modified credit facility provides us optionality and flexibility from a liquidity standpoint. In regards to We have a strong cash position that provides Importantly, our cash runway extends beyond our APeX II readout later this quarter as well as our NDA filing and phase 1 readout or BCX9930, which are both expected to occur in the fourth quarter. As you can see on slide 8, Revenue for the first quarter of 2019 This increase was largely due to the recognition of $1,700,000 of Peramivir product sales to one of our collaborative partners. These transactions are based on inventory management by our partners and each partner's overall forecasted demand for the underlying parameter product.
Importantly, these transactions do not recur routinely and are difficult to predict Accordingly, you should not assume these product sales will recur in future 2019 quarters. Regarding operating guidance, as noted on slide 9, we continue to expect net operating cash used to be in the range of 105 $30,000,000 and 2019 operating expenses to be in the range of $120,000,000 to $145,000,000. As mentioned in our fourth quarter 2018 results conference call in March of this year, we continue to 2018 levels due to the continued progression of all of our programs. Consistent with prior quarters, the company's operating expense range excludes equity based compensation expense company's stock as well as by the vesting of the company's outstanding performance based stock options. Lastly, with the modification of our secured credit facility, you should expect We have had an excellent start to 2019 and look forward to sharing the 24 week safety and efficacy results from APeX-two with you later this quarter.
Thank And our first question comes from the line of Brian Abrahams with RBC Capital Markets. Your line is now open.
Hi, this is Bert on for Brian. Thanks for taking our question. Can you give us any further clarity on when we might see the APeX-two data in second quarter? And then also, you've previously cited 50% as the BAR for attack reduction, how does your market research prior data PKPD mapping and OLE observations all shape your expectations for the readout and or the threshold to try and meet? Thank you.
Sure. Bert, I'll take that. So, no, we're not giving any further granularity on timing other than to say it's coming this quarter so soon. And then with regard to your question around 50%, I mean, the market research is really interesting. The preference for an oral drug is so strong that you can vary the efficacy up to 85% all the way down to 55% and see small changes in preferred share.
So The point we're trying to make is there's a just a really, really strong demand for an oral drug.
Great. Thank you.
Welcome.
Thank you. And our next question line of Jessica Fye with JP Morgan. Your line is now open.
Hi, this is Danielle for Jessica. Thanks for taking our questions. You mentioned in the prepared remarks, mean baseline attacks rates of 2 to 4 per 28 days in epics too. Is that lower than what was observed in Epix 1? And given what sounds like less specific patients in phase 3 versus phase 2.
How should we think about the on treatment placebo response? Thanks.
Yes. Hi. This is Bill. Thanks for the question. This study is 24 weeks long.
APeX-one was 4 weeks long. And the way the statistics work in studies where you're counting events is you have to have a certain number of events to count in order to show a difference in Placebo. So we have 6 times longer opportunity. Even if the attack rate was much lower than the baseline attack rate that I mentioned, very high probability that we'll see more than 4 events in 24 weeks. So I'm not worried about that at all.
It's impossible to handicap likelihood of placebo response in these studies. It seems to vary a lot depending on the conditions of the type of run-in and where patients came from what treatment they were on previously and so on. The analysis that matters of course is the on study attack rate in placebo compared to the on study attack rate inactive. So, that's the way we've structured the study and the powering.
All right. Thanks. And what are some of the endpoints are you considering for Zenith to, that could highlight differentiation of the product in contrast to currently available therapies in the acute setting?
So as John mentioned, we're in the process of meeting with regulators on the design of the Phase III for the acute program. It's competitive. So there's no advantage for us to advertise what we might or might not be selecting for the primary endpoint Phase III at the moment. But we're very, very pleased with the results of Zenith 1. We're very happy that it's been accepted for presentation at the biennial C1 inhibitor workshop in Budapest, Budapest and also at the huge European allergy meeting in Yaki that's coming up.
So there's tons of interest in it. This is a groundbreaking study in the context of acute treatment at home as early as possible after the onset of symptoms. So that we're thrilled with the results.
Yes. And I would add. So without going into the detail of what the endpoints are, since we haven't agreed on them with the regulators yet. What matters is does it go to work quickly? And I think that's table stakes for any acute treatment.
And then how long does it last? And the problem with the short half life drug is that there's a data that's come out recently that says that you've got to redose And so with a really long half life like we have with 7353, we have a high degree of confidence that a single dose will manage and attack. So, we think that's a fantastic profile and very competitive.
All right. Thank you very much.
Thank you. And our next question comes from the line of Liisa Bayko with JMP Securities. Your line is now open.
Hi. Thanks for the review of the statistical plan and all that. Can you maybe also just further comment on the adjudication of the attack how will they be adjudicated to ensure that they are truly attacks versus, sort of other, by the fact or what have you?
Sure. Hi, Lisa. So in the Phase III trial APeX-two, the procedure is that the patient every day records in their electronic diary whether or not they've had angioedema attack within the last 24 hours. If the answer is yes, then that information is notified automatically to the relevant site that is looking after that patient and the investigator is charged with contacting the patient by telephone within approximately 2 business days to have a dialogue and make assessment and record the investigator assessed assessment the case record. That is what gets analyzed as the primary endpoint.
So because of that process, the investigator has the ability to stand the symptoms, the onset, the treatment, whether or not the if it was given, whether or not the treatment had any effect, whether the symptoms were similar or not to the past experiences of the subject and make an assessment that is taking into account a conversation and all of that formation. In our phase 2 study, we had a panel of experts who were reviewing paper in information in batches after the often months after the event, obviously there's no possibility of interacting with the subject at all under those circumstances. So it's more difficult to make nuance judgment when you can't do that.
Okay. That's great. And that's helpful. Thank you. Can you comment at all on kind of proportion of rollover onto the open label?
So it will know that coming up soon obviously this quarter when we have the analysis, then we'll be happy to comment on that. I think that what I previously guided in terms of persistence on study through 24 weeks. These are demanding studies for patients. They're a clinic business blood samples, ECGs, what have you. So that's not normal life.
And an expectation of a 10% to 15% dropout rate under those circumstances is reasonable.
Okay. And then, but you're not commenting on how many people, despite that rolled over on to the open label?
Yes, because this study is still ongoing. So we have the final results. That's a really good time to tell you that information.
It will be an interesting statistic for sure.
How important do you see the secondary endpoint?
And then how important are the secondary endpoints? Well, I think we carefully select secondary endpoints in pivotal studies because the objective here is to get information that helps physicians and other health care providers assess the drug into the label. And help in selection of therapy. So for example, we had a very strong signal for improved quality of life. Phase 2 study, if that could get into the label because it was successful in a secondary endpoint analysis, that would be very important.
This is Lynn here. Commercially, we'd be very excited at the quality of live day could get in the label. What we saw in phase 2 was incredibly impressive and we're looking that that would be replicated
in this next study.
You're welcome.
And our next question comes from the line of Gina Wang with Barclays. Your line is now open.
Thank you for taking my questions. I also have one question regarding APeX-two trial. In Europe, there will be more patient had a prior MG2 use. Just wondering, do you stratification based on the androgen use and any restriction in terms of the duration of usage and the workshop theory.
Thanks, Junen, for the question. So, it will be an interesting analysis as to whether or not the prior experience of antigens is different for subject entering this study in North America versus Europe. Quite a lot of people in the United States are actually still on androgen. So obviously it doesn't appear in the market because it's a generic drug, but our estimates are that probably between 10% 20% of patients with HAE in the U. S.
Are currently on antigens and many, many, many patients that had prior experiences and because that was all that was available some years ago. It'll be interesting to see whether there's a difference. I think that the other main part of your question was what are our entry criteria There are no restrictions on prior therapies. There is a restriction on washout period for prior therapies and for agents, it's 28 days. Private screening.
And she also had a question around stratification. Do we do any?
No, there's no stratification on that basis. The, our practice consistently in our prophylactic OHE studies has been to stratify on the basis of baseline attack rate. That's the case.
Yes. Okay. I see. That's very helpful. Just want to confirm.
So the washout period will be 28 days.
Prices screening. So as I mentioned in my remarks, yes, the product screening. In my remarks, then there's a prospect of running that's compulsory. Every single patient has to go through that. And that can vary from 2 weeks to 2 months then they have to make an appointment to come for randomization.
So the actual duration if somebody stopped androgens a month before screening the actual duration prior to getting our drug could be up to 3 months, 4 months.
I see. I see. So what's the purpose for running phase? Had a 14 to 15, 56 days, such wide range?
We chose a minimum period because, we wanted to see some sort of consistency And you have to put some maximum period on it. Otherwise, you're waiting forever to see what the attack rate is and you need to finish the study. So having giving people the opportunity to have 2 attacks within 56 days establishes a minimum of 1 per 28 days at the rate.
Okay. Very helpful. Thank
And our next question comes from the line of Maury Raycroft with Jefferies. Your line is now open.
Hi, good morning, everyone, and thanks for taking my questions. First question is just on 7353. And as patients continue on drug and crossover development label extension, What's the longest duration patients have been on the drug?
Across both studies, we have people now out past a year.
Got it. Okay. And then, as far as your statistical plan in the powering assumptions, the Phase 3 primary ampline dose. Can you say what the lowest the attack rate reduction could be? And I guess what your decision tree would be based on something dropping lower than 50%.
To answer your first question, we haven't done any formal explorations. Obviously, it depends on the actual observed standard deviation in the data that we get, certainly it may well be possible to show statistical significance for a lower percent etcetera.
Yes. And on the second half of your question around how low could you go? I mean, we're I think we're kind of setting ourselves around the 50%. If it was 48%, would we say no, probably not, but I think that 50% that's a meaningful reduction in attacks for people, so somewhere in that area.
Got it. So It would still be so even if it's at around 50%, you probably or if it goes below 50%, then you may not move forward at that point or come up with a different
case? Yes, I reserve the right to see the data and make that decision, because again, we'd like to get the input of KOLs and the patient association and things like that. But I mean, the conversations we've had thus far have been incredibly encouraging down below 50% from those groups. So that's not our expectation. But your question, I think because it's oral, the efficacy doesn't have to be as high.
Got it. Okay. And then, last question is just based on, Apex J starting. And I was wondering if, if any data from that study would be included in the U. S.
Filing. And I know you've guided to having about 100 patients on each dose for 7353. Included in your NDA filing. So should we assume that you're going to have about 200 patients total or do you anticipate more patients than that?
Well, so just to be clear, all of the data from on safety that we currently have at the time cut the data later this year will be included in the NDA. So there'll be a minimum of 100 patients worth of data through 48 weeks. ATXJ will be still blinded So that won't contribute to any efficacy analyses for the NDA. That study was negotiated with Japan's PMDA to have to complete the Japan development program as support change.
Yes. And I think with regard to your question of how many patients worth the data will we submit, what we need is 100 patients at 48 weeks. If the high dose looks clean and we believe we're going to file both doses, that's enough. For the filing. Or we'll just file the high dose.
So we have lots of options.
Got it. Okay. Thank you very much. You're welcome.
Thank you. And our next question comes from the line of Serge Ballanger with Needham. Your line is now open.
Hey, thanks guys. This is Tian on for Serge. I just have a question about APeX-two. Is the safety extension portion of that trial? Is that also be read out in 2Q 2019?
And also the Apex S trial, is that also part of the NDA submission for the 4Q 2019?
Yes. You want to take it? Yes.
So, the analysis in the second quarter is the 24 week analysis of APeX-two. So the answer to your first question is no. That's the pivotal placebo control efficacy and safety that is going to support the submission. The long term safety follow-up will be ready later this year and from both studies from APeXS and APeX-two and that'll be compiled to submit in
the NDA. Okay, great. Thanks.
Thank you. And our last question comes from the line of Tyler Van Buren with Piper Jaffray. Your line is now open.
Hey, good morning guys. Thanks for the additional detail on the statistical analysis. I guess I just had a point of clarification. Was the Hochberg step up procedure, the analysis that was used in the TAKHZYRO and HAGARDA pivotal trials?
I'd have to look it up. It's a so there's the Hockberg is simply a way of controlling the multiplicity of having 2 arms instead of one versus placebo and it's we've utilized it in that way. The type of analysis of of the data is and you can read this in the publication from the TAKS virus study it'll be very similar to that in terms of how you do the analysis. You're counting events and statistical approaches to how to analyze and compare accounts of events that turn into rates. It typically in Phase III trials, depends on whether or not this may be a bit too technical, but it depends on whether or not the distribution is over dispersed or or not.
If it's over dispersive binomial and if it's not, then it's passed on. So I hope that helps you and all of that, of course, is agreed with regulators and totally standard.
Yes, that does. That's great. And, your updated thoughts on acceptable discontinuation rates for trial of this sort and this design?
So the fact that we over enrolled gives us quite a bit of flexibility here. 10% to 15% dropout rate during the placebo controlled period is quite acceptable.
Okay. That's helpful. And final question is, you guys have spoken about commercial preparations. So assuming the trial is positive, clearly coming in with an oral, you have a chance to disrupt the space that's really been dominated by a couple of players at a very high price. And I think there's a level of physician frustration, because of those market dynamics.
So, can you, again, assuming the trial is successful, can you speak towards the commercial preparations and how you guys plan to approach the market with the product of this profile.
Yeah, it's Lynn here. So, we have, as John said earlier, been actively in recruiting in marketing, market access, medical affairs, we have been doing multiple pieces of market research to understand the market and what we're really prepping for is to really give patients and physicians what they want in terms of service and have the opportunity to which is what they tell us they want. So in terms of pricing, what's really important in pricing is to understand what our profile of drug is, but we are certainly entering into a situation with very high priced competitors. So we will be looking at all options in terms of what we do with pricing.
Yes. And Lynn's being modest. She's put a lot of energy and resource towards gathering data to be smarter than anybody in this space and there's a lot of switching going on right now. With the other therapies that are being introduced. And so her team is analyzing the behaviors and what drives people to switch successfully and unsuccessfully and then we'll apply that learning to our launch plans.
But what's great about this drug is that we are hearing from patients and physicians that the trial usage of this drug is going to be really high. So The other thing Lynn's team is doing is how do we keep them on the drug? And so we're getting really smart about that and putting in plans in place to be successful with that.
Great. Thanks for taking the questions.
Welcome.
Thank you. And ladies and gentlemen, this concludes today's Q and A session. I would now like to turn the call back over to management for any closing remarks.
Yes. So, as I said at the beginning, this is a really exciting time for BioCryst. We're preparing for a very important filing of 7353 for prophylaxis. We're preparing for the launch in the U. S.
In Europe as well. And we'll have the data soon and we look forward to reporting it out to you. Have a great day.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Everyone, have a wonderful