We are here with BioCryst, and speaking will be John Bluth, Chief Communications, and Nick will also be here.
Yep, Nick Wilder on the Investor Relations team.
We're right on time. Gonna go ahead and dive in. So ORLADEYO and 2Q sales, you adjted the full year 2024 revenue guidance for the second time this year. Can you talk us through the key drivers you expect to for 2024 revenue, and what has led to that increase in guidance?
Sure, I mean, and first, let me say thank you to H.C. Wainwright for having us here. Nick and I will be making some forward-looking statements, and those statements have risks, so please do look at the risk factors that you can find in our SEC filings. Yeah, the ORLADEYO launch continues to really go well. ORLADEYO is an oral medicine for the prevention of hereditary angioedema attacks, and it's the only oral medicine in an injectable market right now. And so, you know, we've had three really strong quarters in a row of patient growth. They're the strongest three quarters we've had since the first three quarters of the launch, and we're just seeing more and more physician confidence and patient confidence in the way ORLADEYO is working to change patients' lives. So it's got a tremendous efficacy profile.
In the patients that ORLADEYO works in, we see a 90%+ reduction in attack rate that's equivalent to what they get with injectables, and they get the convenience of once-daily oral dosing. And so in our fourth year of the launch now, what we're seeing is that doctors are experiencing that for themselves. Even the physicians who maybe didn't start prescribing right away at the beginning of launch have now gotten around with some encouragement from us also to prescribing ORLADEYO when they're seeing this result in their patients, and that's encouraging them to prescribe more and more. So the underlying patient demand is an important factor in the strength we're seeing in the revenue numbers.
The team's also doing a fantastic job from an efficiency standpoint of converting patients who are on free drug to paid drug, and doing that a little ahead of our expectations. So as a result of that, we're, you know, in 2024, we're seeing revenue ahead of expectations, and that's why we've raised guidance, as you described.
Do you continue to expect ORLADEYO patients to grow by 30% over the next year? Or just based off that 2Q numbers, do you think it could get even larger than a 30% growth?
The patient growth has been very steady. It's ticked up a bit here recently, but we see a lot of additional patient growth in the future. We're getting about half of our patients coming to us from prior prophylaxis, and the other half are coming from acute therapy or de novo starts, and there's a lot of fruit on the tree still for us. So we see this growth continuing. Our goal is to get to $1 billion in peak revenue, which we see is very achievable from where we are right now. And in order to get there, we need $800 million of revenue from the U.S., and that means that we need to add about 200 new net paid patients per year through 2029 on an average basis.
So we're last year, we were 321 new net paid patients. We expect to be well north of 200 net new paid patients this year and next year also. So the trajectory is really good. Another component there is getting that paid percentage to about 85%, and we were at 74.4%, we noted on the last earnings call, and so we're well on our way to that peak sales estimate.
And you mentioned that for the patient population for new patients to ORLADEYO, about 50% are switching from prophylactic. We've got about 20% are naive patients, and then about 30% are switches from-
That's right.
- on demand. Is this kind of the spread that you are gonna continue for, or that you expect to continue for new patients, or are you expecting those numbers to kind of shift?
Yeah. We've been getting about half of our patients from prior prophy since the beginning of launch. The dynamic that could change that source of business is the split between the percentage of HAE patients who are treating prophylactically versus with acute only. When we launched ORLADEYO, that percentage was probably 70/30 in favor of prophylaxis, maybe even 60/40. And with the addition of several new entrants in the prophylactic space, including ORLADEYO, that's shifting more towards prophylaxis. And so we see that going, and physicians, when we talk to them, see that going closer to 80% prophy, 20% acute, or even higher. And as a result, at some point, if that trend continues, the pool of acute-only patients is gonna shrink over time.
I feel like there's a little bit of discourse out there. Do you think that the kind of acute or on-demand market, you kind of foresee that starting to shrink with the increase in, you know, better prophylactic drugs?
Every HAE patient needs a rescue medicine for a breakthrough attack, so there'll always be an acute business. But for patients to manage their disease, they want to prevent attacks, doctors want to prevent attacks, so the trend towards prophylaxis we see continuing, but there'll always be space in the acute market.
So you're kind of expecting more of that growth to be from newly diagnosed patients and increased growth from prophylactic going forward?
Yep.
Okay, and then can you talk about patient retention and patient restarts? Previously, you've said that retention's about 60%.
Mm-hmm.
It doesn't work, the drug doesn't work for everybody.
Right.
And so you said that there's about 10% patient restarts in the past, I believe, as well-
Right
... which would seem to indicate that there may be retention, that number could be higher in the future. What is driving these numbers? And based off the number of restarts, do you expect retention to increase over time?
... Yeah, we've seen retention really steady at about 60% of patients staying on the drug at 12 months. So once you get on ORLADEYO, and you find that it works for you, you stay on the drug. The compliance rate is very high, and the retention rate is pretty steady at 60%. So that's the kind of phenotype the drug has. If it works for you, it works tremendously well, and if it doesn't work for you, you're not going to sacrifice efficacy for convenience. You're going to go look for something else. There are other drugs that could prevent your attacks. So we're always trying to increase the retention rate, but we don't see a ton more room there.
We think 60% is a pretty steady spot for us.
to speak to clients, it's about 90% compliance.
Yeah.
- which is pretty, pretty great for this type of drug and this type of indication. So, and then is there anything... I know you said that 60%, but is there any potential strategy for increasing? I know that sometimes stress can cause discontinuation and also a flare-up of the disease. So is there any kind of strategy for helping navigate-
Yeah.
The patient transition onto the drug?
Yeah. So the two reasons, primarily, that a patient would discontinue ORLADEYO would be perceived lack of efficacy, the drug isn't working as well as they'd like, or GI tolerability. In some patients, they experience some mild GI tolerability issues that tend to be transient and go away early in the launch. So we've spent a lot of time with physicians and offices, educating them on the GI profile of the drug, so they don't give up too soon. We don't want them to have a patient have a little bit of GI effect early that goes away, and they quit before it goes away. Or if they have a breakthrough attack when they get on the medicine, that it goes away.
I think we've had a lot of success helping doctors understand that profile of the drug, and that's helped our retention number get to 60% and kind of stay there.
Thinking about reimbursement and reauthorizations, how is the process going for both commercial coverage and Medicare and Medicaid?
Yeah, it's going great. About 60% of our patients are commercially insured, and we've got excellent coverage across the U.S. for patients with HAE. Our overall paid percentage is 74.4%. Among our commercial patients, that's the percentage of paid patients is 82%. So, I think we've done a good job, and this year, in particular, as we were talking about earlier, the team's done an excellent job getting patients who were on free drug onto paid drug. The Medicare side of the business is more complex because of the IRA.
And so, this year, for patients who are impacted by the IRA, they've got a co-pay of $3,250 that they have to make at the beginning of the year. That's a lot, across all their drugs, and these drugs can be expensive in the HAE space. And so what's happened last year, and it's happened again this year, is that the charities that provide that co-pay assistance to patients have not had the funds to support patients. And so BioCryst, we made a decision that instead of those patients losing access to therapy, we were going to put them on free drug. And when you do that with a Medicare patient, they've got to stay on free drug for the full calendar year.
And so, that was a real revenue headwind for us in 2023. Next year, the IRA, that copay is going to drop to $2,000, and it can be spread over the course of the year for the patient. So it should be more manageable for the patient, and maybe more importantly, allow the charity's funds to go further. So we think a lot of those patients that we have put on free drug could come back to us as paid patients. But that's a space that we'll watch closely as the calendar flips.
Right. So that was going to be my next question. And so the IRA, that should kick in, in January, correct?
That's right.
We should hopefully see the impacts of that.
That, that's right. That's right. Possibly, yeah. We'll, we'll have to watch it and see what happens. We don't know what's going to happen, but we think that that $2,000 spread out co-pay is going to be more manageable. And, and also in the first quarter, our commercial patients, commercially insured patients go through a reauthorization process. So that, that has been, on a seasonal basis, something you see reflected in our, our revenue from Q4 to Q1.
And then what is the strategy right now that you've got for kind of maintaining your market share if any other competitive prophylactic enters the market?
Yeah. There are several competitors coming along. We're watching them all very carefully. For ORLADEYO, with the profile it has as a once-a-day oral with 90%+ efficacy in patients who respond, that's a great profile. There's not much headroom there in terms of efficacy. Nothing can come along that's much better than that kind of profile. So we don't expect any of the coming entrants to have something that's compelling to make a well-controlled ORLADEYO patient want to switch back to an injectable or to another oral with similar efficacy. So what we're doing is really taking advantage of the head start we have in the market. You know, certainly, for the next potential oral competitor, we've got a seven- to eight-year head start. And so you're seeing us now start to publish a lot more real-world evidence.
So physicians and patients can see this is how ORLADEYO is working in the real world. You're seeing a lot of health economics data coming out of BioCryst so that payers can see the value that ORLADEYO is delivering. So we're gonna keep leaning into that and trying to get as many patients as we can onto ORLADEYO so they can benefit from the product.
How about the ex-U.S. opportunity for ORLADEYO?
Yeah. We're bringing ORLADEYO to HAE patients around the world. We're in about 20 countries right now, and the international launches are going great. We've launched the product ourselves in Western Europe and in Canada. Most of those launches are off the ground. We're just getting Spain and Italy going right now. And over the last year or so, international revenue has been about 10%- 11% of our overall ORLADEYO revenue. We think at peak, our ex-U.S. contribution from ORLADEYO will be about 20% of the billion-dollar peak sales number. The growth has been fantastic. It's more about volume there because of the lower prices, but the launches are going very well because the drug has the same profile overseas as it does here, and patients are really responding well to it.
Outside of Western Europe and Canada, we've got distribution partners. We've taken over that lead role in Japan, and we've got partners in Latin America and in the Middle East. Patients around the world are getting ORLADEYO, which is exciting.
Are there other comments you want to make about ORLADEYO before we move on to, would you talk about the rest of the pipeline?
No, I think we've covered it. The launch is going great, and we're gonna keep our foot on the gas.
And then, looking at the rest of your pipeline, last R&D day, you'd outlined goals for advancing your pipeline using your platform technology, to create protein therapeutics. You said there was plans to deliver proof-of-concept data for six different molecules in the next five years. Seems like Netherton syndrome is kind of the next indication that you're looking at targeting-
Yep.
which is expected to enter the clinic by the end of 2024.
Yep.
Is that correct?
That's right.
Can you speak to this indication and kind of what we can expect here?
Yeah. So we've got two programs that are sort of lined up to go into the clinic in the near term. BCX17725 is a fusion protein for Netherton syndrome. We'll bring that into the clinic this year, and then behind it is avoralstat for DME, diabetic macular edema, and that'll go into the clinic first part of next year. So Netherton syndrome's a. It is a kind of a classic ultra-rare disease. It is a horrible condition where skin just keeps sloughing off, so the skin barrier doesn't exist properly, and all of the problems with infection and temperature regulation and discomfort result. And this affects infants. The mortality rate is higher, and there's a protein that is hyperactive there, like KLK5, the SPINK9 protein.
And so, what BCX17725 does is it replaces that, inhibits it, and it's a very potent, tightly binding molecule, so it should modify the disease. It's not just gonna treat the symptoms, but it should really modify the disease for patients. So there's a tremendous unmet need, and we're excited to get that into the clinic this year. And then avoralstat, you may remember, was our first-generation plasma kallikrein program for HAE, and it failed in phase III because it was highly potent but very poorly bioavailable. We'd call it brick dust sometimes. It just sort of sat there, and that's not a great systemic characteristic of a drug that you want for HAE, but it's perfect for the eye.
So we're delivering it with a Clearside injector device into the suprachoroidal space in the back of the eye, where the problems are for DME, and we believe, because of that bioavailability, it'll just sit there and act like a depot, and that could really allow us a favorable dosing profile and real impact in the disease, getting the right drug to the right spot with the right profile. BCX17 725, we're gonna start in healthy volunteers and then progress in part three of the phase I into patients with Netherton. You know, and DME with avoralstat will go directly into patients. So we should have our first data on both those programs towards the end of next year.
And then to finish up, can you speak to your cash position?
Yep.
And your path to profitability ?
Yeah, we're in a very strong position financially. We were profitable on an operating basis in the second quarter. We've got $338 million in cash. We consumed $200,000, I think, in the second quarter, and we're on our way to EPS profitability too. So what we've guided to is that by the second half of next year, on a quarterly basis, we'll begin to see EPS profitability, and then for full year 2026, we'll be EPS profitable. And so we're independent of the capital markets, which is a great spot for us in terms of flexibility and decision making as we get these pipeline programs through to proof of concept.
The earlier stage trials that we described for BCX 17725 and avoralstat are less expensive, and if we have proof of concept and it's time to go into a pivotal program, which are larger and more expensive, then we've got choices to make about whether we want to develop them ourselves further and take that expense on, or whether we want to partner them out. If the data's good, showing proof of concept, we think we'll have some really interesting choices there. In the background, ORLADEYO revenue is gonna keep going towards $1 billion, and it's gonna put us in a really strong position.
And then, if anybody's got any questions for the last couple of minutes.
Yes, sir.
You got the cash, but you've got quite a lot of debt. What are you gonna do with the debt?
Yeah. So if you look on Bloomberg, it looks like we've got a lot of debt, but we don't because a lot of that is really our royalty obligation, is how it's characterized.
Yeah.
Yeah, so we have a royalty obligation with both Royalty Pharma and OMERS, and what's nice about it is it's a tiered royalty. So, for all revenue above $350 million, the royalty rate drops to 7.5%, and we pay no royalty over $550 million. And so the royalty burden on the products declining. At peak sales, the royalty burden will be about 4% or so, rather. And
When do you see that kicking in?
When do we see what kicking in?
Toward the end of the decade.
Yeah. So, that'll decline by then.
They're charging you right now. What's the percentage they're charging you?
The percentage that they're charging us right now-
Online is about high teens.
High teens.
And that's going 20%.
Yeah, and declining. That's right. And then we do have about $300 million in debt from Pharmakon, and we'll either refinance that or pay it down.
The best point to do it.
Yeah, well, we'll have options there, so that's great. Thanks.