Good morning. Welcome to Needham's 23rd annual healthcare conference. I'm Serge Belanger, one of the healthcare analysts at Needham. For our next session, we're happy to have the BioCryst Pharmaceuticals team with us. We have John Bluth, the Chief Communications Officer, as well as Anthony Doyle, the company's CFO. I'll hand it over to Anthony to provide a brief overview of the company. Before I do that, I just want to remind those listening to the presentation, you do have the option to submit questions in the portal that you are watching the presentation in. Anthony, I'll hand it over to you if you want to give us a kind of a quick overview of BioCryst.
Sure. Thanks, Serge. So just as a reminder, we'll be making forward-looking statements. Those statements contain risks, and you can find our risk factors on our website. So thanks for having us, inviting us, Serge. So we are commercial biotech, which has been great to say for a little while now. We did about $320 million, $326 million in net revenue last year, with our rare disease product in HAE. The launch has been going great thus far. Continue to see a great trajectory on our path to $1 billion in that product. We have a robust and diverse pipeline behind it that we're excited to take forward. And we are on our way to profitability, so operating income this year, quarterly profitability next year, on a path to full-year profitability in 2026. So company in a great position moving forward.
Great. Maybe if we can just review how 2023 went in terms of ORLADEYO growth.
Sure.
How that sets up your guidance for 2024 and what are the key growth drivers for this year?
Yeah. So last year we did about $326 million in revenue, the vast majority of which came from the US, but a kind of ever-increasing portion coming from strong performance in ROW. Last year it was around 11.5%. The biggest driver continues to be net new patient adds. So last year we had more than 320 net new patient adds, coming from both first-time users or new users to prophylactic treatment, and also really strong performance, when we're looking at prophylactic switches. So when we look at 2024, the majority of that growth will continue to come from those key areas. And then this year, mostly next year and beyond, expect to see some strong dynamics around conversion of patients from free drug to paid drug. And all of that kind of gets us to where we are guiding to peak revenue at $1 billion.
Okay. And I think in the last couple of years there's been a distinct seasonality in sales, a slow one-quarter, which is not atypical in the biopharma world. But maybe you can just highlight what's driving the seasonality here and how we should think about it.
Yeah. So the seasonality is predominantly on the revenue side, right, on the underlying growth as it relates, again, to net new patients and getting patients on ORLADEYO. Quarter-over-quarter we've seen continued strong performance. We expect to see that in Q1 and beyond. But on the revenue side, yeah, the reauthorization process, copay resets, are key drivers specifically here in the U.S., which would lead us to believe that Q1 is going to be down from Q4. But then we would continue to see that normalized trending of a pop in Q2, as those patients get back on to reimburse product and then growth in Q3 and Q4 to finish out with our guidance of between $380 million and $400 million for the year.
Okay. Is there anything specific to 1Q 2024 that is different than other ones in terms of the reauthorization or the IRA coming online and things like that?
No, the reauthorization process continues to go well. We continue to learn, continue to improve. The Inflation Reduction Act, yeah, what we would hope to see is continued improvement with, you know, out-of-pocket maximums going this year to $3,250. Patients are still in a place where they have to pay that off in one fell swoop. And so there's still some pressure on, the foundations to fund that. When we get into next year with the out-of-pocket maximum going down to $2,000 and then the ability to spread that over 12 months, that's where we'd expect to see significant movement in moving our, reimbursed rate back up to where we see the commercial reimbursed rate, which is, 80% or higher at the moment.
Okay. And just thinking about new patient ads, and you can correct me if I'm wrong, but is ORLADEYO now kind of the de facto, prophylactic treatment for newly diagnosed patients? Is that kind of the first options that they are offered and then they evaluate from there?
Yeah, I think it's a great first option for those patients based on the combination of efficacy and convenience. And we've seen really strong performance in that area. You know, it's been around about 70% of patients are on prophylactic treatment, and that continues to be the standard of care for patients with HAE. It'll move. We're looking at market research where we think it'll go to 80/20, maybe as high as 90/10, as doctors continue to adopt that as the first-line treatment for patients with HAE. So yeah, we continue to see strong growth there, but also in that prophylactic switch market.
Okay. So is it still kind of average 50/50 between those two segments?
Yeah, at the moment, around 50/50. And when we do market research, we see it shifting probably more onus on the prophylactic switch on a go-forward basis. But to your point, still a great frontline option for those patients who are still considering moving off of acute treatment to prophylactic treatment.
Okay. And I guess at some I mean, how much of a new patient segment is there really at this point? I mean, there's I think there's 7,000-8,000 patients. I imagine in the U.S., most of them are diagnosed, if not treated.
Yeah. Yeah. About 7,500 patients. If you're talking about moving from 70/30 to 80/20/90/10, you're talking about maybe 1,000 to 1,500 patients who over the course of time might move from acute-only treatment to prophylactic treatment. To put that in context, at peak, we're talking about a market share that would have us at around 2,000 paid patients. You know, given that there's potentially 1,000 or 1,500 patients that might move from acute treatment to prophy treatment, a lot of room that we can make in that area.
Yeah. And in terms of the switch opportunity, I imagine most of the switches are from the main, the market leader, Takhzyro. I guess how do physicians kind of, you know, proceed with a switch? How often do they see their patients to enact such a switch?
Yeah. So the switches are for the most part in line with market share. So to your point, most of those that come from Takhzyro and then Haegarda and Cinryze, patients are seeing their doctors maybe once or twice a year. And, you know, we've talked on a very frequent basis around the stickiness that exists within the market. So as much as patients might see a benefit in moving to our drug from a convenience factor, you know, continuing to see the same efficacy for those patients who it works, it works really, really well. So there's fewer opportunities for patients and doctors to have those discussions around switching.
But we've continued to see, you know, Charlie's given numbers previously, that in order to get to the $800 million, that's part of the $1 billion peak here in the, $800 million here in the U.S., we need to see an average of 200 patients, you know, through probably the rest of the decade. And that won't be a straight line, right? We saw north of 320 this year. I'd expect north of 200 this year. And as we get towards peak, it'll go kind of dip under that 200. So there's still significant demand in patients making those decisions to look for, a better product to treat their HAE and kind of feel like they have more of a normal life. We continue to see in both real-world evidence and in our market research a continuing trend for that kind of demand in the market.
When we look, Serge, at the market opportunity, we've shared previously that there have been about 2,000 prescriptions written for ORLADEYO in the U.S. since launch. The total patient population in the U.S. of diagnosed and treated patients is 7,500. So there's still a lot of patient opportunity for us going forward that's going to fuel the continued growth. Yeah. I think you've all talked about the patient funnel and how that really drives the growth. Maybe just talk about how, so you mentioned 2,500 patients. So there's still a significant number of patients, but retention rates have improved a little bit over the last few quarters. If you can just talk about how you've been able to improve those metrics over time.
Yeah, we're seeing retention rates very consistently around 60% after a year. And so some of the work that we've done in patient-doctor KOL education has really started to play off. At the start, we saw patients who were discontinuing very early. And some of it, there was a mix of perceived lack of efficacy and GI effect. And so just educating patients and doctors as to what to expect, we've seen kind of a very robust response. If, you know, if you're going to have GI effect and it wasn't something that you were, you knew was going to or you thought might happen coming into it, you know, patients didn't know if they were having an attack. They didn't know to expect it. So just that education and making sure patients are prepared that it may occur.
And if it does occur, usually mild, and then treated through in a fairly short period of time. So yeah, we've seen really strong both patient and doctor response to the education sessions that we've had.
I think in last quarterly update, Charlie talked about you're even seeing patient restarts. I thought that was pretty impressive. Is that a function of physician education or just increased awareness of how efficacious the product is?
I think it's a factor of, yeah, a multitude of things. Patients want more, right? Patients want this drug to work for them. And so the more patients have experienced, the more doctors have experienced, the more they can interact with patients who maybe had some of those GI impact at the start and were able to treat through and come out better on the other end, the more they can share those stories and that experience. We've seen a lot of patients come back and say, "Maybe I did, try it for too little time. Maybe I gave up too early, and come back for a second shot." And so the number Charlie gave was around 10%, of the prescriptions that we saw last year were from patient restarts, which is great to see.
Yeah. And in the past, I think you've talked about once patients get to 12 months, they tend to be very sticky. Yeah, I think that's been kind of highlighted with some of the data you've reported at recent medical meetings in terms of the long-term efficacy of the product.
Yeah. Yeah. The real-world evidence has been, you know, great to see and consistent with what we are seeing from patient input. So again, retention rate of around 60%. So there are patients for whom the drug doesn't work. But for patients who it does work, it works really, really well. So you're looking at efficacy that can be as good as or better when compared to the injectables, you know, seeing, you know, really low attack frequency or the potential for no attacks, attack-free for patients. So that's been great to see. And again, consistent and something that we've worked with doctors and patients to hit home. You know, when we got the top-line efficacy data at 44%, you know, I think that stuck in a lot of people's mind.
But when you're talking about efficacy rates of kind of 90%, so again, in line or better than what you're seeing for injectables for those patients for whom it works, really well controlled, really well treated, and those patients are really happy and seeing a significant improvement both in terms of that efficacy and then in the convenience that a once-a-day oral brings.
Yeah. Let's talk a bit more about the level of access and reimbursement and I guess some of the reauthorization that tends to impact the first quarter. So the product has now been on the market for, say, almost four years, right? It was approved in 2020. So I would imagine the process for to get patients on ORLADEYO is very well established now. Is it still onerous on the physicians?
Yeah, it's, we've done our best to make it as easy as it is, whether that includes our quick start program to get patients as quickly as we can on and then work through the reimbursement process or helping doctors with the reauthorization process, which, listen, can still be onerous. Both, you know, doctors know for the most part what it's going to take at this point. It all comes down to how many patients do they have, what other patients are they treating and other indications, and how easy are the insurers, PBMs, making it. It's still not an easy process. It's time-consuming, especially in that Q1 period. I wish it were easier, but we are working on making sure that, you know, we can make both first-time approval and reauthorization as easy for doctors and patients and as least impactful.
Hence, our commitment to making sure that during that period, if we need to switch patients onto free drug, we absolutely will. We don't want it to impact their treatment in any way, shape, or form.
Yeah. And are the hurdles the same whether they're on commercial coverage or Medicare coverage, Medicaid? Is it varied?
Yeah. For the most part, there's probably some additional hoops to jump through on the commercial side. It just depends on specifically which program, which insurer, which PBM. And then for the Medicare side, yeah, it's again, it's not automatic. But what I will say is some of the improvement that we expect to see is specifically in the reimbursement process. The approval rate that we have on the Medicare side continues to be really high. It's the affordability and the reimbursement struggle that these patients, a lot of whom are on, you know, fixed income. So $32.50 in a January, February period, still too much for these people. And so with the improvements in the Inflation Reduction Act and the copay max out-of-pocket that they'll have next year, hoping that that'll make a real difference.
Okay. So what would you estimate is the current level of paid subscriptions now and where it could be by the end of the year? And I guess with the improvement in 2025, where could it go?
Yeah. So if I break it down into commercial and government, commercial kind of north of 80% at the moment, we will continue to try to make improvements in that to get closer to around 85%. It'll never be fully reimbursed, but there's still learning, still improvements that the team can make. On the Medicare side, closer to 50%. So we talked about some of the challenges we had last year and some of the challenges that the foundations had last year. So in Q1 this year, you know, probably no better, no worse, consistent with what we saw last year. We'll continue to try to make some improvements, but in 2025 and beyond is when we would expect to see some real headway in that area. And we would target to get closer to the commercial range at about 80 or 85%.
Okay. In terms of the marketing efforts, like I said previously, you've been out in the market for now four years. Has there been any recent changes regarding the targeting or messaging to physicians or even the tiers of physicians you're now targeting relative to, you know, previously earlier in the launch?
Yeah, Charlie's team made some improvements and expansions last year in terms of the number of territories, the size of the regions, and the focus that we could give, and then additional support around patient access, medical science liaisons, etc. So started to see some real improvements there. I think that combined with the focus that we've had on generating real-world evidence and the strength of that real-world evidence and how doctors and patients are kind of consuming it and seeing it on a peer-to-peer basis and that it is truly real. Again, ORLADEYO doesn't work for everybody, but for those who it works, it works really, really well. That is the real world. That's indicative of what we're seeing in real-world evidence. That's what patients are seeing in their lives. And so the perceived notion that patients are sacrificing efficacy for convenience is just not true.
For those patients who it works, they're seeing both. And so a lot of the focus that we have is educating both patients and doctors to try and encourage them to move patients on as many patients as they can that will see real benefit in that regard.
Yeah. In terms of competition, I think we've seen a lot of focus on injectables previously. I think people are now focused on a little more on orals. So I think we could see an oral acute product enter the market potentially next year. Additional oral prophylactics are also in development. So how do you view ORLADEYO's place in the market given that oral competition is most likely to increase in the next few years?
Yeah. You know, not to be in any way facetious, but we are the market leader in oral. We are the only currently approved drug oral treatment for the treatment of HAE. So there's nobody who's in a better or stronger position than we are. In terms of looking at prophy versus acute, we continue to hear from doctors, patients, that they're looking for predominantly prophylactic treatment in terms of first-line treatment for HAE. We continue to expect to see that grow on a go-forward basis. There's obviously a place for acute. And, you know, we're excited for the opportunity for patients to have access to an all-oral solution based on the demand that we've seen in the prophylactic market for oral. I would assume that there's a strong demand for acute treatment. But I think in conjunction with prophylactic treatment, not instead of prophylactic treatment.
We'd welcome KalVista's drug to the market with open arms. In terms of future entrance to the market, what we have seen is with a strong 60% retention rate, there's 40% of the patients for whom it didn't work for one reason or another. So another oral drug would have a good opportunity to take that slice of the market. But again, for the 60% of patients, both now and on a continued basis as we move toward $1 billion, you know, by the time another oral is in market, we'll be even stronger, even more solidified as the oral market leader. You know, I just don't based on what we see, based on the market research that we've done, what is the driver that would move a patient who is very well treated, very well tolerated, seeing both efficacy and convenience?
What does another oral bring to the market that would sway them over? You know, if I'm a company like Pharvaris going after those 40% for whom it didn't work, great, but the 60% for whom it does work and will continue to grow that base, we feel really well positioned to maintain that strong market share in that sector.
Okay. What about the novel treatment modalities, kind of promising one-and-done solutions? Do you feel those are potential competitors to orals, or are they more likely to dislodge some of the injectable products?
I think it's for the longer-acting injectables, you know, what is their pitch, right? It's predominantly going to be convenience because I don't know that it's efficacy versus what's already in the market. So we'd welcome them and the opportunity to talk about overall the burden of treatment and the improvement of convenience because I feel like we're very well placed to be in the mix in that discussion. As it relates to gene therapy, I mean, it's a harder one. For patients who none of these current or kind of longer-acting treatments might work, that might be a great option. But given that what we hear from doctors and patients is that they effectively have a therapeutic cure, it's a harder sell given the newness, the novelty of those drugs. And, you know, it's more of a risk, let's say, than what's currently in the market.
Yeah. The company has given peak sales guidance about $1 billion for ORLADEYO. I think you've been very consistent in mapping out how you get there, patient adds, improvement in paid prescriptions, and price increases. Do you feel there's any facets of those assumptions that are still underappreciated or misunderstood by investors?
Yeah. On the competition front, when we do market research and when we're looking to $1 billion, we've baked in some of the more aggressive both timelines and profiles for some of our competitors. So, you know, it's not like we don't think we're going to be surprised based on what comes out. And even with those robust and quick timelines that we're modeling that they may or may not be able to achieve, I think we're very well placed to get to that $1 billion. In terms of what can be underappreciated, again, it comes down to what patients are seeing in the real world. There's still, you know, I think a misnomer that patients will sacrifice or will have to sacrifice efficacy for convenience. And that's just not the case, right? Patients will not. Hence, you know, 40% discontinuing.
Those 60% who continue on the drug are seeing as good efficacy, as good convenience as there is available in the market.
Yeah. Maybe just give us an overview of ORLADEYO's IP. I think it could be extended. You're running a pediatric trial. Obviously, it could incrementally add to that IP runway.
Yeah. So really strong IP out till 2039. So, you know, based on where we are now and based on where we see a peak, we feel like a really long runway of that strong sales trajectory. For the pediatric side, you know, we'd expect and we're looking for submission of an NDA next year. And so the formulation is improved. It's oral, but it's improved for treatment for children under 12. And from a market positioning, you know, I have young kids, and so trying to get them to do any kind of injection is really hard. So the opportunity to bring an oral treatment to that age range, I think we will be even better placed within that age range than we are in other markets.
We're very hopeful that while not a huge population, we think that we can get a really strong market share within that area. Then the familial impact of, you know, having, you know, whether it's a patient for life or having kind of multi-generational, given the hereditary nature of the disease, having more and more people get experience on the drug is a great opportunity to continue to switch patients within families.
Okay. Before we move to the pipeline, if we can just talk about the ex-U.S. commercial launch, where you're currently at and where you think it's going to go.
Yeah. So like I said at the start, around 11.5% of our revenues last year came from ex-U.S . That's predominantly in Europe. So launched early, you're talking about getting approval and then getting market access in these individual countries. So places like Germany, France, U.K., the Nordics, already well-established, Spain, Italy, Benelux, for example, coming online this year. And then having launched in Japan, Canada, and then partnering in South America, Eastern Europe, the Middle East, continue to expect to see a steady drumbeat of both approvals and then access to or market access for reimbursement in some of those countries. So that 11.5% that we saw last year, by the time we hit peak, we expect that to be closer to 20%. But again, most of that will be driven or a significant amount of that will be driven by Western Europe.
Okay. Then in terms of the pipeline, I think it was in early January, kind of announced a slight change in strategy, especially as it pertains to the oral factor D inhibitor. So maybe just give us an overview of what drove that change and when we could see data on this asset?
Yeah. For BCX10013, again, what we would strive for is a best-in-class profile. And so it's currently being studied as a once-a-day oral drug in PNH. We expect to have data by mid-year, and we'd be looking for improvement in hemoglobin, improvement in LDH. We'd be looking at transfusion rates, etc. And we have been working, obviously, with partners since we made that announcement to determine where we might be able to partner. While we're testing in PNH, there's significant applicability in lupus nephritis indications. And so it's all going to come down to data, right? Once we have data in those patients, a partner will determine how to move that forward if it looks like it has a best-in-class profile. And if it doesn't, then the program doesn't move forward. You know, fairly binary event, as we've explained.
Okay. So the data we're going to see is proof of concept in PNH?
Yeah. So we'd look for data in mid-year in a small number of PNH patients, mostly focusing on those biomarkers that we talked about.
Got it. Okay. So really, it was just the change in R&D strategy was really around BCX10013. Does it impact any of the other pipeline assets?
Correct. It was around 10/013. And given where the competition was, especially the Novartis drug, the need to go as fast and as broad in order to make it competitive, we felt like it was going to be better in somebody else's hands. And then off the back of that gave us the opportunity to focus on the rest of the pipeline and the path to profitability.
Yeah. Okay. Maybe I just want to highlight a couple of the pipeline assets, maybe the ones that are closest to entering the clinic.
Sure. Yeah. So the next program into the clinic is BCX17725. That is a fusion protein, a KLK5 inhibitor for Netherton syndrome, which is a rare disease, affects about 5,000 people, we believe. And it relates to a defect in the skin that kids are born with. So they don't have a proper skin barrier. It's a horrible disease, infections, and sort of lifelong difficulty, horrible quality of life. And there's nothing available for these patients. And so we're going to bring that program into the clinic later this year. And then we'll have our first data next year from that program. So that's next. And then right behind it is avoralstat for patients with DME. And avoralstat, you may remember, we studied in HAE. And it didn't work in HAE because it was not very soluble. And that created dosing difficulties for us and inefficacy problems.
But in the eye with DME, where plasma kallikrein is indicated as one of the causes, alongside VEGF, we're going to be looking at delivering avoralstat directly into the superchoroidal space in the eye, which will put it right into the area of the retina where the disease is occurring. And that hasn't been done with prior plasma kallikrein inhibitors that have been studied in DME. They haven't been delivered to that location. So we think by putting the drug, which is not very soluble, in that space, it'll sort of create a depot that'll allow a slow release of the drug and have a real impact in the disease. So we'll be studying that in patients who have failed VEGF initially. And that'll go into the clinic shortly after the Netherton's program does. And then it will produce data fairly quickly.
You know, between the pediatric program in HAE that Anthony was discussing, the Netherton's program, and the avoralstat program, you're going to start to see data emerging on all these programs going forward.
Great. So I think we only have a few minutes left. I'll ask Anthony to provide kind of an overview of the financials. And I think, as you mentioned earlier, the change in strategy around 10013 kind of moved up your profitability timeline. So if you can touch on that, that'd be great.
Yeah. So what we'd look for this year, based on the guidance that we've already provided, revenue north of OpEx, so an operating profit, not including the non-cash stock comp this year. Building onto next year, we're on track, you know, towards the tail end of the year on a quarterly basis, we'd be approaching both cash flow positivity and EPS positivity, and then culminating in full-year EPS positive and cash flow positive for full year 2026. And so we are at a point now where we are capital markets independent. We are not looking to raise additional funds. We are not intending at the moment to draw down the additional funds that would be available to us through Pharmakon. So just a really strong position to be able to continue to move ORLADEYO forward towards that peak while also pushing forward with the pipeline that John mentioned.
One of the questions, you know, we've gotten is, given the push to profitability, does that delay or hamper some of that pipeline? The answer is absolutely not. Given the early stage, there's not a huge amount of investment required to move it forward. And so we are moving forward with those programs as quickly as we can with the intent of, you know, having one or more of them hit the market and be, you know, the next ORLADEYO.
Yeah. So the decisions on more costly investments for these pipeline programs would most likely not occur until second half 2025 at the earliest?
Yeah. Yeah. Even into 2026, right? The focus on the pipeline assets is getting them into the clinic and then through proof of concept. Not until we kind of hit phase 3 are we talking about very large patient populations compared to the earlier phase programs. At which point in time, again, ORLADEYO will be closer to that $1 billion. And so we feel like we're very well positioned to get to and through those events.
Got it. Okay. All right. Well, I think we're almost up on time. Maybe we'll end it here. I want to thank you both for spending time with us this morning. We got a great overview of BioCryst, and we're getting closer to profitability, which I think is an exciting goal for every company, right?
Yep. Yep. Thank you for the time. Thanks for the questions, Serge.
Thank you.