It's live? Okay. Good afternoon, everyone. Welcome to Barclays Global Healthcare Conference. My name is Gena Wang. I'm a Senior Biotech analyst. It's my great pleasure to introduce our next presenting company, BioCryst Pharmaceuticals. With us today, we have Jon Stonehouse, President and Chief Executive Officer; Charlie Gayer, Chief Commercial Officer; and then John Bluth, Chief Communication Officer. John, maybe before we dive into the specific questions, do you want to give a high-level overview of the company?
Yeah, I'd be happy to. First, let me say thank you for inviting us to this conference. It's wonderful to see people in person instead of doing this through Zoom. It's great to be here in Miami with you and really enjoyed the day so far. I'll be making some forward-looking statements. These guys will be too, and those will have associated risks, and the risk factors can be found on our website. We're building a great company, and I say that because we have a drug on the market, our first oral drug for a rare disease, ORLADEYO, that's off to a fantastic start and a great launch. We're really excited about the progress we've made with this, but the future potential is amazing.
We believe that it has the potential to be a billion-dollar product for us and the market leader in the prophylactic space for HAE. With that as the first drug to market behind it, we have continued to invest in our pipeline, and we have an oral factor D inhibitor that we might even be more excited about. I don't even know if you can say that, but the potential is, you know, multiples of what we have with ORLADEYO. We're in a pivotal study in PNH and a proof of concept study in three renal indications, and there's many more indications that we can pursue with this molecule. It's truly a pipeline in a molecule. We have a discovery engine that produced all of this stuff. Why is that important?
1, it allows us to come up with unique offerings to patients. This idea of an oral drug for patients suffering from rare disease is something way more than a small incremental convenience improvement. It's life-changing for these people, and it differentiates us in the marketplace. We can repeat it over and over and over again with this fantastic team. We have a balance sheet now with a couple of financings we've done in the tail end of the last two years with Athyrium, Royalty Pharma and OMERS. We're in a very probably the best financial position we've ever been in the history of the company. You know, and when you couple that with the revenue we're generating from ORLADEYO, we're in a very solid spot.
Lastly, we have great people, and we continue to attract great people into the company and people that are really motivated by bringing new therapies to patients with rare disease, and the execution by our employees is amazing. Things are really good right now at BioCryst.
Thank you. Maybe I would just start with, you know, a little bit uncomfortable questions because I got quite some investors asking why you provide peak guidance now since you just saw launch. Any thoughts there?
Yeah, well.
How did you know, arrive at those numbers?
Sure. I'll let Charlie do the math for you in a minute, but I will remind you that we gave peak guidance in the summer of 2019. I think is when we started, where we said it was a $500 million-plus global product. Back then, we put an emphasis on the 500. In the last six months, we put an emphasis on the plus because, you know, we're now in the marketplace, and we're seeing how the product is being received by healthcare providers and by patients. It was an old number, honestly, and that's why we changed it now, but I'll let you do the simple math of how you get there.
Sure. The simple math, Gena, is that in the U.S., we know there to be about 7,500 diagnosed and treated patients. It's a pretty mature marketplace. If we just get 25%-30% market share, so about 2,000 patients, based on our pricing and an assumed gross-to-net of 15%-20%, that gets us to $750 million-$800 million, and up to the peak of $1 billion. Then the other $200 million or so is gonna come from the rest of the world. This doesn't have to be a winner take all. We see this as a market-leading product, but that's a realistic market share as well. That's, you know, that plus all the trends is what's giving us confidence.
You know, when we look at the Royalty Pharma and the OMERS deal and then given how they, you know, decide at what point the royalty rate, you know, would change and they all like after $500 there's, you know, no, they would not pay. Like does that indicating their view on the market opportunity is a $500 and that's different from your view?
Yeah. I think the operative word is they. I think we came to that agreement together because we basically said the more we generate, the less they get. It's three tiers and $350, I believe is the first one. You know, $350-$550 and above $550 nothing. That was driven because we felt for the amount of capital that was brought into the company that there was a limit to what we'd be willing to give. That was our initiative, not theirs. I think from what they've seen so far, I don't wanna speak for them, but from what they've seen so far, clearly they came back and invested more capital into us a year later.
I think, you know, we've done a great job of executing thus far and plan to continue.
Great. You know, the other question also regarding the guidance to over $250 million this year when we look at using full Q number, quarter-over-quarter is only 15% growth. Do you think that that's a little bit conservative or you think, you know, where do you see that could change, will be, you know, up or down?
Yeah. 15% quarter-over-quarter leads to a doubling in sales year-over-year.
Mm-hmm.
I think that's pretty good for a second year of launch. It won't go that way. It won't go 15% each quarter. We've already said that the first quarter compared to the fourth will be little to no growth because of the dynamics in reimbursement that occur with specialty products at the beginning of the year. A doubling of sales is a fantastic $250 million, no less than $250 million in revenue our second year on a way to, you know, ultimately heading to a billion, we think is a really attractive product.
Do you think you could have the potential even, you know, beating this number?
You know, we've said no less than $250 million deliberately. I think what we did last year is we said no less than $100 million when we first gave guidance, and then we said $115 million-$120 million, and then we hit $122.6 million. Our goal has always been to be the accurate guider, 'cause we're the ones with all the data, right? We have one specialty pharmacy. We get the data. You can't get the prescription data in any other source. We wanna be the ones that give you the best accurate guidance, and that it requires us to not, you know, be too aggressive or to be too conservative. Right now, we think no less than $250 million. We may adjust as the year goes on to give you more fidelity.
Mm-hmm. When you say, you know, first quarter will be maybe a little bit flat, for the remaining three quarters, should we think about the linear growth or there will be any also seasonality there?
I think, you know, I would say that the growth from first quarter to second quarter will probably be, you know, meaningful because of the flatness in the fourth to first. Will it be linear? Probably not at the end of the day. I think another piece that drives it is a bunch of the programs that Charlie and the commercial team have planned and when they actually kick in to driving more stock for them. How quickly the reimbursement takes place. You know, Charlie's done a great job of getting the last big PBM. His team has gotten the last big PBM on board, and so that doesn't happen overnight. The more that we get those patients converted from free drug to paid drug will affect the growth from quarter to quarter.
Okay. Very helpful. Maybe a little bit more color on, say, the launch metrics so far. I think at the full-year earnings call, you said 70% retention rate, right? Wanted to know, are these only, you know, applied to the patient that you follow long time, or does that also apply to more recent patients?
That was of patients who started ORLADEYO for the first time last year.
Mm-hmm.
70% of them remained on therapy for the year. What you see as we dig in, we've presented some of these data, you look at the retention based on where the patients are coming from, injectable prophylaxis, switching from acute only. The retention is similar regardless of where the patients are coming from. What it says is most patients do really well on ORLADEYO, so we're really pleased with retention so far.
Do you see the trend consistent? I'm pretty sure all those like, you know, with one year follow-up, you also saw them say, you know, after 1 quarter, 2 quarter, 3 quarter, now 4 quarters follow-up. Do you see when that, you know, discontinuation starts, like the 30% drop, at what point they drop?
Yeah. Most of the discontinuation when it happens happens within the first 1-2 months. A big focus for us is setting expectations for patients and really helping them through those first 3 months. If we can get them to 3 months, the retention is much better. You know, they get the efficacy, they just get the experience with the product. We're really particularly focused on those first 3 months.
Okay. Which means like first quarter, right?
Yeah.
Now you have additional, say, three quarters patients. What is the retention rate for those patients, like the newer patients that are taking the drug? I don't know if I delivered clearly. Like, the 70% retention is the first, say, one year ago that you have a one-year follow-up, that retention is 70%. What about the patients on drug maybe for one to three quarters so far? What is the retention rate so far for these patients?
What I'm saying is, when patients drop off, most of that happens in the first three months.
Mm-hmm.
1-3 months. After that, the retention is much higher. What we saw, some of the data that we presented is that once patients get through that first period of time, the retention rate is much, you know, closer to 80% long term.
Okay.
I think what Charlie is saying is.
Yeah.
of all the patients that went on therapy in 2021, some of them starting in January.
Yeah.
some of them starting in December.
I see.
that we retained 70% of those patients.
Okay.
Yeah.
that 70% apply to all the patients.
Sure, all patients in 2021.
in 2021.
Exactly. Yep.
Okay. That's the question I have. Okay. So that's very helpful. Also, you know, for the discontinuation, what was the main reason for those patients to discontinue?
Yeah. The reasons are what we expected from our clinical trial. The two main reasons are perceived lack of efficacy and side effects, usually gastrointestinals. What we know about the gastrointestinal effects is that when those happen, it's not with everyone. But those tend to go away early in therapy. That's why it's really critical to keep them on for that first three months or so.
Mm-hmm.
There's some, you know, other life events, reasons people may drop off, but those are the main two.
Okay. Out of 30%, what percentage of these were lack of efficacy?
I don't have the exact percentages, but what I'll say is the great majority of them, and it's an even split between lack of efficacy and-
Okay.
GI effects.
Okay. Like roughly like 15%.
It's probably about three-quarters of them were split between those two, and then about a quarter of them with everything else.
I see. Like roughly 10%. 10%-15%.
No, more like, 35%.
More like 30, 35.
Yes. If we think about the total.
Oh, yeah, yeah.
Right. Okay, good. That's very helpful. You know, out of the patient that now you did see the switchover from subQ and also on-demand. Maybe if you can give a little bit more color, the breakdown, you know, the truly naive patient, and then also the patients switch over from subQ drugs, and also patients switching from on-demand since you start to see patients that way.
Sure.
If you can, give the breakdown of the patient-
Sure.
Now on, ORLADEYO.
This is something we're really pleased with what we're seeing. Of all the market research we did before launch, what we expected is at least half of our business would be switches from other prophylaxis therapies, and that's exactly what we've seen. It's really consistent in every quarter since the start of the launch. About 50%-60% of the patients are switching from other prophylaxis therapies, most of that from injectable or infused prophy therapies. Then of the other 40%-50%, most of that is coming from patients switching from acute-only. The U.S. market is pretty mature, so we don't have a lot of brand-new diagnosis-naive patients. That's not our expected growth driver.
We get some of those, it comes in naturally, but that's a small portion of the patients coming to ORLADEYO.
Yeah, if I can, I'd add one more point. I think what's really important in what Charlie just said is that we're seeing people that are controlled on prophylactic therapy. It's not like they're having breakthrough attacks and the doc doesn't have another option for them. These are people that are controlled, and they're switching from that therapy to ORLADEYO and having success on ORLADEYO, and that's the most encouraging part of what we believe will be the future for this product.
Mm-hmm. Okay. I think I forgot to ask one more question early on for the compliance rate.
Mm-hmm.
Did you see any variability, say, you know, the 2021 patient, like patients enrolling in 2021, patients starting the beginning of the year versus the end of the year, any differences in terms of the compliance rate?
No. I think if you're defining compliance as when they're on the-
Taking the drug.
Are they taking the drug?
Yeah, yeah.
It's been really high.
Mm-hmm.
It was high in our clinical trials in the 90th percentile.
Mm-hmm.
Since launch, it's been consistently above 90%.
Mm-hmm.
I think that's because patients know why they're taking the drug. It's to prevent attacks.
Mm-hmm.
The patient services program that we put in place is really high touch, white glove service. Every month patients are getting a contact, and they're taking their medicine, and I think that's part of the reason that they're doing well on therapy.
For the, you know, 2022, 2023, do you see any of those, say, retention rate and the compliance rate, anything could affect those rates, what you've seen so far?
I think the, you know, compliance we would expect to stay high.
Mm-hmm.
The retention rate, you know, it'll never be 100%, but we're always looking for how we can improve it even incrementally. We want to make sure the patients, if they drop off, that they're not giving up too early. If they give up too early, they've missed a chance to treat their disease with one pill once a day. For patients who get to that point, it can be transformative because they almost forget that they have HAE. You know, it's just so easy to take, and the drug works well for these patients, so they can kinda not worry about their disease at all. We want to make sure no one who could have that experience misses it by giving up too early.
Mm-hmm. Okay. Another question regarding the free drug program. Maybe can you give a little bit more color? When did you start it?
Mm-hmm.
For each patient, how long usually last and then before they convert it to the commercial product?
You might wanna talk about why we did it.
Yeah, absolutely. The free drug, what we heard so much as we prepared for the launch is that, you know, there have been multiple products that have come on the market in the last several years, and the whole starting process, the insurance process was burdensome, and it's something that for both the doctors and the patients, they worried a lot about. We wanted to take that off the table as much as possible. Once the clinical decision was made, get started right away on our Quick Start program. That's free. Pretty much everyone starts with free drug right from the beginning. Then in 2021, with as we were getting better and better with the insurance process, there were some patients we needed to keep on drug longer till we had their insurers covering.
By the end of the year, we're now at a point where about 80% of the ORLADEYO patients should have access to coverage through their plans. Right now, the average patient starting is gonna get onto paid product very quickly within a month, and the great majority of patients are gonna move to paid product within that first month.
Mm-hmm.
We'll still do the Quick Start because we still want to have, you know, that first experience to be very rapid and focused on the drug rather than the insurance.
Yes. The number of patients on free drug will also be affected by how many new patients we're putting into the funnel, right?
On average, you see basically one month. That 20%, which means in one month we should expect those 20% patients to convert into revenue-generating patients.
On average, yeah.
The new patient comes in.
There are always gonna be some patients, you know, that we won't ever get 100% of insurance to cover anything else. The portions that are reimbursed continues to increase and it's going a lot faster.
What percentage of patients you think will not be able to get insurance coverage?
The one thing we've said is that, Q3 and Q4 of last year, about a third of patients were on free drug. We expect over the course of this year that that's gonna move to closer to 20% and maybe even over time, get a little bit better than that.
Okay. Do you think, you know, if we move forward, like say 1 year from here, where do you think that percentage stabilize?
It's hard to say. You know.
Mm-hmm.
I think that's the kind of update, you know, later this year we may be able to give a little bit more color. I'd say that there's always going to be the new patients coming in on free drug, and there are always gonna be some patients, employer sponsored plans and others that may just not cover drugs like HAE therapies.
Mm-hmm.
That's why it's never gonna go to 100%.
Mm-hmm.
We want that not to be a worry for the doctors and the patients. You know, the important thing is getting the patients on drug first.
Okay. Also maybe another, you know, the perspective is also your long-term projection, $1 billion. Can you know, elaborate a little bit regarding what your expectation for the on-demand patient converted to prophy and that will be essential for the peak revenue, right? If you can tell us what makes you feel comfortable that in certain years those prophy percentage will increase to certain level.
The particularly in the U.S. market, and I think we're gonna start to see this more and more globally, the movement has been towards prophylaxis. In the U.S., at the time of our launch, about 60% of the patients were on prophylaxis. Today, we believe that to be more like 70%. We see that going to 80%, maybe even more. The acute only portion of the market is shrinking, and we're moving into a situation where acute therapies will always be there for when patients have breakthrough attacks, but the primary treatment is gonna be prophylaxis. In Europe, prophy is probably 20%-30% today. But that, we see that definitely growing above 50% in the coming years.
Okay. Very helpful. We have a few more minutes. I wanted to touch on your factor D program, which is also very important as well. I think in the past, like maybe the main pushback from the investors is LDH level, that when we look at the other candidates, they were able to bring down to 1.5 upper limit norm, and yours was a little bit higher. I think the last time where we discussed it was that one possibility could be the measurement variability. Maybe like, can you elaborate a little bit? You know, now you started with a pivotal study. Any way to address that measurement error issue and then also any concern that we should have for the LDH level?
Yeah. It's anemia. What do you measure when you have anemia? You measure hemoglobin.
Mm-hmm.
We're fortunate to have a drug that has an effect on both intravascular and extravascular hemolysis. You don't need a surrogate endpoint like LDH. You just measure hemoglobin. We see spectacular increases in hemoglobin with people that are anemic, whether they've been on C5 and not responding or they're naive to any treatment. I think the field has moved. You know, when you couldn't control all of hemolysis, absolutely it had to get to surrogate markers. Now you measure what's important, which is hemoglobin. That's the best, you know, marker for the hemolysis and the anemia. Then in addition to that, the other really important endpoint is transfusions and rate of transfusions and the ability to decrease transfusions. You affect those two things, you've covered anemia.
We'll measure LDH as a secondary endpoint. We've seen, you know, dramatic drops in LDH, but it's all about what really drives the disease and the markers that directly affect it, not surrogate.
Wouldn't that be like if you already addressed direct hit, you know, then wouldn't the surrogate endpoint should actually be reflective of those, you know, underlying issue was resolved?
I
Which means like the LDH should be lower.
Yeah. I mean, we do see a reduction in LDH.
Yes.
I think the bigger point is what's magical about 1.5 or 2?
Yeah. Maybe I rephrase this. Like, why we see pretty impressive hemoglobin level, but we cannot see the LDH level bring down the similar level as others?
I-
Mm-hmm.
Because I don't think the target of 1.5 is any magical place to be.
Mm-hmm.
Right?
Like, maybe just say like, not as low as the others.
Yes.
Mm-hmm.
What matters more though, do you get a 4 milligram per deciliter increase in hemoglobin, or do you try to target for 1.5 or 2? If you talk to the people that treat this disease, they'll say, "I want more, you know, I want a bigger increase in hemoglobin." LDH is, I think, a marker of the past, and I just don't think it's as important. Again, I'm not saying that we don't decrease it, we do in a meaningful way. Hemoglobin is what matters to doctors, regulators, and patients at the end of the day.
Okay. Good. You know, we're running out of time, maybe, Jon, if you wanted to, you know, you also have other pipeline assets, you know, anything you want to highlight?
Yeah. You know, it's too early. Other than our ALK-2 inhibitor for FOP, which, you know, we're moving it through toxicology and drug supply work, and we hope to get into patients sometime next year. There's a bunch of other things that we haven't even told you about yet that are really exciting, but too early to talk about. You know, that's the beauty of having this great science and great discovery engine, is we can go after really hard targets like serine proteases and validated targets and bring oral drugs to patients with rare disease. Stay tuned because there's a lot more coming from our discovery group.
Okay, great.
Yeah.
Maybe going back to FOP, when should we? You know, I know you said you do not want to guide a specific timeline, but any, you know, big picture, at what point we will start to see that you are willing to share the data?
Yeah. We put a backstop for all the clinical data. By the end of next year, we expect that we'll have the data from both pivotal studies in PNH, and that will be in the process of pulling the file together to submit for registration in multiple countries. By the end of next year, we expect that we'll have all the data from the proof of concept, the three renal indications, and we'll be moving into pivotal studies. We'll be doing the work to move into pivotal studies. By the end of next year, we will also be moving into other proof of concept studies in other indications. Will they all come in December of 2023? No. That's the backstop that we have.
You know, over the course of time between now and the end of next year, there's a lot coming from BioCryst on the Factor D program.
Okay, that's great.
Yeah.
Well, thank you very much. Thank you. I think we're running out of time.
Yeah. Great.
Looking forward to the update later this year.
Yeah. Thanks, Gena.
Thank you. Thank you, everyone.