Hi everyone. My name is Maury Raycroft, and I'm one of the biotech analysts at Jefferies. It's a great pleasure to, like, welcome the BioCryst team. We've got Jon Stonehouse, the CEO, Charlie Gayer, the Chief Commercial Officer, and Helen Thackray, Chief R&D Officer at BioCryst. Thanks so much for joining us today, Emmanuel.
Thank you for having us.
It's going to be fireside chat format, so maybe for those who may be new to this story, if you can give a one-minute intro to BioCryst.
Sure. So first off, thanks, Maury, for having us here. It's great to be here in London with you. We're going to all be making some forward-looking statements, so statements have risks. Risk factors can be found on our website and our filings. So if you're not familiar with our company, you should be, and here's why. First off, we have a really innovative product on the market, an oral drug for preventing HAE attacks, a rare disease, hereditary angioedema. We're going to sell somewhere between $430-$435 million in net revenue this year globally, and we're on a path to $1 billion in peak global revenue. So really steady growth. Compound annual growth rate over between now and the end of the decade is around 20%. So this is a growth story, number one.
Number two, we discovered Orladeyo, the HAE once-a-day preventive medicine at BioCryst, and we have a platform at BioCryst with structure-based drug design, and we believe that it has the capability to produce more than Orladeyo. We have two products that, one in the clinic and one approaching the clinic, that Helen can talk more about, but we believe we can do this again with our discovery capability and then the ability to get one of these drugs to the market. That's sustainable growth. The third piece is we are heading to profitability, and it's very exciting after so many years of being in existence at BioCryst and being CEO at BioCryst to get to that point. We'll be operating profitable this year.
We think that we'll be at or near EPS positive in the second half of next year, and then full year 2026, we expect to be cash flow positive, EPS positive. So, you know, we're capital markets independent, yet we can continue to invest in our pipeline and grow profitability. So it's a growth and sustainable growth story.
Got it. Yeah, that's a great intro, and yeah, third quarter Orladeyo sales beat expectations again, and so you beat in first quarter, second quarter, and then you increase guidance for the year to $430 million-$435 million, which is up from $380 million-$400 million in the beginning of the year, and so with that in mind, what are your assumptions going into fourth quarter at this point, and what is the likelihood we could see a surprise in fourth quarter?
I'll take the last part first, which is we're pretty close to the end of the year. So when we said $430-$435, we think we'll be in that range. So that's a good guidance for the year. But we raised guidance for the year just because of the really strong demand. We've had very consistent demand since the beginning of the launch, but over the last four quarters, that has raised up to a new level as doctors gain more and more confidence with Orladeyo. So we expect that to continue. And then the other thing we did this year is made great progress in getting more patients in the U.S. to paid therapy. And so we expect in the fourth quarter for the paid rate to remain steady, preparing us to make more jumps forward in the first part of next year.
If we're actually able to outperform that, that's something that could push us to the upper side of our guidance for the fourth quarter.
Got it. Okay. Anything more you're saying about the number we should be thinking about for fourth quarter, or?
I would put right in the middle of $430-$435 in your model.
Okay. And you've invested in patient services and market access teams since last year with the goal of improving patients to paid therapy. We see that these investments are working where the paid rate was 74.8% in third quarter versus 71.5% at the end of last year. And the paid rate was 82% among commercially insured patients, which is 60% of your total patient population versus 79% at the end of last year. And so for paid rate, can you provide more specifics on how and when you'll achieve that goal of 85% versus the current 74%-75%?
Sure, and thanks, Maury. You recited all the progress that we've made. We expect to get to that 85%. Our goal is to get there over the next three years, but to get to the $1 billion in peak sales, we just need to get there by 2029. The big potential tailwind for next year is if we can really make an advance in the Medicare population, which is about 20% of the market, and we can talk more about that, but if we can make a jump in that paid rate, given the full implementation of the Inflation Reduction Act next year, that's something that could be a tailwind towards that progress in 2025.
Got it. And what are some of the ways you can do that for the Medicare patients, and what could headwinds or tailwinds look like for that in 2025 and onward?
The big opportunity in Medicare, and folks may know this, but the maximum out-of-pocket copayment for Medicare patients under Part D goes to $2,000 next year, and what that may do is make it more affordable for patients and also more affordable for the charities that help Medicare patients afford their copayments, and so if that affordability is broader, Medicare plans tend to say yes to coverage of Orladeyo at about an 85% rate. The real key for patients has been who's going to pay their copay because most of them can't afford to do it themselves. So if they have more access to that charity assistance, that's what could be a tailwind for next year.
Got it. And could there be headwinds too? Any?
There could be. You know, there always can be headwinds, but what we see right now is just great progress on the payer front and, like I said, the continued demand. We have no evidence to say any of that's going to change.
Got it. Okay. And for patient retention, Orladeyo has shown 60%-70% retention at 12 months. What are the latest insights you have on the similarities of patients that discontinue Orladeyo? Is there anything you can do to optimize and improve patient retention, potentially by improving tolerability or different breakthrough management?
We're really pleased with the steady retention rate that we've seen over the last couple of years. As you mentioned, 60% of patients who start Orladeyo make it to a year because they're doing really well. We actually, a few weeks ago at the American College of Allergy meeting, put out a poster showing that Orladeyo retention is equal to Takhzyro and Haegarda. And actually, if you look at patients who filled two or more prescriptions, Orladeyo is actually numerically superior to those. And I think it's just a reflection of how well this drug works for patients. No drug works for every patient, but if one pill once a day, they're getting the efficacy that they need and the tolerability, they tend to stay on.
The thing we do to improve that over time is what we've been doing for the last few years, is to set expectations with patients, make sure their healthcare providers set expectations. So if you have a breakthrough attack or if you experience a side effect, those side effects tend to go away fairly quickly with time. And breakthrough attacks are common on any therapy. So one breakthrough attack should not scare anybody. What we've seen is that education is out there now, patients are getting it, and that's led to that great retention rate.
Yeah. And we're continuing to invest in this. So we announced in the earnings call a study we refer to as APEX-T, as in transition. This is a study that is an observational study, phase 4 study that looks at switching and helps those physicians who haven't had the opportunity to try Orladeyo to learn from others when we publish the data from this study. We're continuing to invest to hopefully continue to improve the retention rate.
Got it. Yeah, and for that study, for the APEX-T study, what kind of information can you get from that and maybe give some examples on how these data could help physicians with the transition?
That study is looking at the transition, which can be done in many different ways. So we've seen physicians who are very comfortable with HAE look at transition from other prophylactics to Orladeyo to do it with several weeks, several months overlap. It really depends. What we're seeing is questions from the generalists about how to do this. And so we'll be looking at how are they doing it. Are we seeing transition immediately? Are we seeing transition in a couple of weeks? Are we seeing transition a couple of months? And we're giving them up to 12 weeks to show that. And we'll be capturing that and sharing that for the generalists to know how to proceed with transition. Then we're also looking at how patients are doing, quality of life, how's their experience with the transition period, so we can report on that as well.
A really important piece to patients transitioning and an effect of causing an attack in HAE patients is triggers. And anxiety and stress is one of the number one causes of triggers. And so helping patients navigate, you know, whenever there's change, people get anxious, right? And so helping people navigate that is important.
Got it. Okay. All interesting. And in your market research from second quarter, you've shown that over 50% of patients on Orladeyo switch from other prophy treatments. How do you expect this proportion could change over time? And which segments do you expect to see the biggest uptake in new patients moving forward?
We've been really pleased that since launch, as you mentioned, over 50% have switched from other prophy, but about a third have switched from acute-only therapy, and the rest, almost 20%, have been patients who are previously naive to therapy. So we've seen those segments being really consistent to launch, and we see the potential for essentially that pattern to stay the same for the next several years based on the opportunity. The market continues to move towards prophylaxis in the U.S., so about 75% of patients overall are on prophy. We see that growing to 85%. There's still the acute switch opportunity. There are almost 3,000 patients, we believe, who are not treated with HAE therapies at this point. That opportunity is there. We have the most differentiated prophylaxis product with a really effective once-a-day oral.
And so we see all three of those segments persisting.
Got it. Okay. And for long-term growth, you've guided to adding approximately 200 new patients each year with the goal of approximately 2,000 paid patients, which would be 20% of the market share and $800 million U.S. sales in 2029, with potential for $1 billion in peak sales from global sales. What are your latest observations and assumptions that support your confidence that this momentum can keep up in the long term and lead to that $1 billion by 2029?
I think it's some of what we've talked about here, which is there's been the continued really strong demand. The last four quarters, just a step up in demand as healthcare providers have become more experienced with Orladeyo and they know what to expect from an efficacy perspective. So that's number one. And then the paid rate that we talked about earlier, the progress we've made there, I think the fact that we're already at 82% paid in the commercial segment really speaks to we're making progress and we can get to that 85% number. And then finally, just the patient retention that we described. The patients are staying on. And what we're seeing is that after they get to a year of therapy, very few of them are leaving Orladeyo at that point because they're getting effective control with an incredibly low burden of therapy.
We talked about this confidence that is building in the marketplace. So I think something that's really important to remember is there are seven products in a rare disease market in advance of us launching when we got approval four years ago. What we're finding now is that for those physicians who either tried it early and maybe they didn't have success with the first patient or two, are coming back to trying it again and are having success, and now they want to try it with more patients. That's what's causing this increased confidence.
Got it. Okay. Interesting. And just for Takhzyro, when we track the scripts there, we generally see the trend going up over time. BioCryst doesn't share the scripts data, but are you seeing similar trends or what do the dynamics look like there that you can comment on?
We may not share the exact number, but I've given you some pretty good guidance on the types of scripts we're seeing. I think it depends, Maury, on what source you're looking at. We also look at all the sources you can purchase out there, Symphony, Optum. What we see in those sources is Takhzyro is actually fairly flat at this point. What we see in the data you can see publicly from Orladeyo is the same trend upwards that we see with our internal data, which is, of course, 100% capture, and so we're confident that what you see in the external data is reflective of what we're describing.
Okay. Fair enough. And Orladeyo is the only oral prophy treatment out there for HAE patients today. So you're in a good position commercially, great head start. What are your latest thoughts on the potential impact from less frequent injectable prophy options, potentially a once-and-done gene editing approach, as well as a new oral entrant from Pharvaris and KalVista as well? I guess, how does this factor into your longer-term guidance?
Yeah, maybe I'll start and then you can jump in. So I think you said something very important, head start. We have a big head start. And our ability to get patients to try Orladeyo and see if they can get controlled on a once-daily oral pill is a huge part of our ability to get market share and hold market share. In our last earnings call, we did something you probably don't normally see from a company, which is we shared how we do a once-annually conjoint analysis with both a huge number of physicians, patients, and payers in terms of surveying them. We give the best possible profile to the competitors at the fastest time to market. And then we don't stop there. We don't stop with preference. We then put it into a simulator with a third party that does Monte Carlo simulation 6,000 times.
And so why do we do all that and why do we spend that money? Because it gives us the most unbiased answer that we can get to predict the future. And so far, it's been highly predictable. And what you see on a macro level, which is what we showed you at the earnings call, is over time, the market remains very sticky. And guess who the market leaders are in 2033 based on the market research that we've done? Takhzyro and Orladeyo, right? And that's because any of the other entrants that come in aren't going to work any better. And so if they're going to switch, they're going to switch for convenience. Well, you don't get any more convenient than a once-daily oral capsule.
So we're happy to spend time with investors going through that in more detail, but we had all these theoretical conversations and we decided to just show you the data.
Got it. All makes sense. And let's see. Starting, I wanted to dig into your pipeline as well, where you've got a few new assets that you introduced last year. And we could see clinical data from two of these programs next year. So maybe starting with 17725 for Netherton. Can you remind us of what the target is, where it sits in the disease pathway? And you mentioned that approximately 1,600 patients in the U.S. could be out there based on claims data. But based on the disease phenotype, why isn't that number higher, closer to your 5,000 estimate? Is the disease misdiagnosed or potentially is there a spectrum of severity?
Maybe Helen start with describing the disease and then Charlie could talk about the market.
Yeah. So, KLK5 is a validated target for Netherton syndrome first. That's an important thing to know. It's at the top of the kallikrein pathway and cytokine pathway that's involved in skin regulation. KLK5 is dysregulated in Netherton syndrome and it's the cause of skin turnover. In Netherton syndrome, it is actually causing that skin to slough off early. It's the beginning of the cascade, as I said. So, the other KLKs are downstream from KLK5. We're targeting KLK5 because it's at the top of that stream. Cytokines are also part of the disease pathophysiology and cause inflammation and irritation in the disease, but there's also downstream. KLK5 is the first place to go.
Got it. Yeah.
As far as you mentioned, Maury, we've done claims research. There's no ICD-10 code for Netherton syndrome. So we looked deeper into claims for other mentions of characteristics specific to Netherton syndrome. We identified 1,600 patients in the U.S. We think this is going to be a classic ultra-rare disease. There's no targeted therapy on the market today. Huge patient need. We have folks on our team who launched Cinryze in the HAE space back 15 years ago. And they always thought that the size of the U.S. population for HAE was maybe 2,000 or 3,000. It's turned out to be more like 10,000 and still growing. And so we think there is an opportunity. 1,600 definitively, but with targeted therapy with promotion out there, it could double, it could triple, maybe beyond, but huge need for patients.
Helen, it might be worth talking about the patient and how they cope with their disease today and what disease modifier could do for them.
Yeah, and I'll touch on the size of the population as well, so patients with Netherton syndrome have such severe effect on their skin that they're seeing peeling of the skin and redness and itching. They're ashamed of their skin, so going through regular daily activities is. It really is terrible for them. The current therapy is supportive, symptomatic. It's topical treatments and ointments. There is no disease-targeting therapy that's proved, and that's the change that we think we can bring. We also know that this is a disease that manifests as ichthyosis, which is itchy, red, scaly skin, but ichthyosis has many different causes. Netherton is one, which means that the larger ichthyosis population probably contains a number of patients with Netherton syndrome who just have not been diagnosed yet.
Got it. Interesting. Any plan to potentially get more information on that from that population of patients?
So I think what we'll see is similar to what Charlie was describing. What we'll see is as there's a targeted therapy that's available, physicians will be doing the test. Patients will be seeking information and diagnosis, and physicians will be doing the test.
Makes sense, and what data have you seen that supports your confidence in pursuing this indication, and we know there are a few competitors out there, including Daiichi, who had a healthy volunteer update earlier this year. What's the latest that you've heard on the competitors, and could there be a de-risking competitor catalyst ahead of your data?
So I'm going to come back to the point that this is a validated target, which means we know that this is the cause of the disease. We know that targeting the dysregulated protein and inhibiting that dysregulation or controlling, providing a functional control for what's missing, that is the way to treat the disease. So there's confidence in treatment of Netherton syndrome with KLK5.
Got it. And there are a couple of other companies that are pursuing KLK7 too, or a dual inhibitor for 5 and 7. Is that a relevant target in this space too, or how do you think about that?
So it's part of the downstream cascade. So KLK7 is active in the disease, but it's triggered by KLK5. So targeting KLK7, you'll get part of the downstream activity. Targeting further upstream, KLK5, you'll get all the downstream activity, all the KLKs, and then the cytokines that follow from that. So we really think it's a better target.
Yeah. And remember that the KLK5 that we have, 17725, is a million times more potent than the natural ligand and 10 times more potent than the Daiichi compound. So we think there are definitely some competitive advantages in terms of potentially efficacy and dosing.
Got it. Okay, and in October, you started enrolling the first healthy participants in your phase one. Can you give us an update on that?
That is underway. That phase one is a healthy volunteer study. It's single ascending dose and then multiple ascending dose. It is proceeding according to plan. In 2025, we anticipate having outcomes from that study to report. In addition, that study will be enrolling patients. First, we're starting with healthy volunteers, but we do intend to extend to patients and have patient data also in 2025.
Got it. And can you talk more about the data we could see in 2025?
Yeah. Oh, yeah. So healthy volunteer data will be standard. It'll be safety information, PK exposure. We'll be looking for exposure in the skin. That is more important in patients. And so in 2025, you'll see the safety profile, but also then the extent and dose range in which we're seeing penetration to the skin. Once we see penetration in the skin, we can also look at activity. So you have a biomarker for pharmacodynamic activities to show that the drug is having the intended effect on KLK5 activity in the skin. That's the precursor for what will come next, which is dosing patients, multiple doses, and then looking for outcomes, clinical outcomes.
And Maury, I'd say one more thing about risk of the program. So we've traditionally been a small molecule company, and with small molecules comes off-target toxicity. This is our first protein project. And as you know, with proteins, the off-target toxicity is much, much lower. You're only worried about anti-antibodies and the like, and those things you can screen for in advance. So from a risk profile perspective, we're pretty excited about this program.
Got it. Okay. And can you say more about the dose ranges and how you're thinking about that? And also when you could include patients next year, when that could start?
Yeah. So dose ranging is relatively standard. We'll be dosing until we see exposure in the skin and until we see activity that is showing control of KLK5 activity. So it's going to be up to efficacy, up to the point of having control of the target. Patients will be in that first study, but we're going to be including patients both for the PK/PD data in that first study, but then also in 2025, dosing in patients to look at the full spectrum. So look at the activity, but repeat dosing, duration of dosing, and to start to get at the clinical outcomes, meaning improvement in skin, how the patient's feeling. Is their skin more comfortable? And are they seeing improvement in symptoms?
Got it. Okay. Well, I see we're already out of time. Maybe to close out, if you want to talk about DME and avoralstat briefly, and then just remind us the cash position and key events ahead that investors should be focused on.
So avoralstat quickly. Avoralstat is a plasma kallikrein inhibitor that we are delivering specifically using suprachoroidal injection to the eye. We intend to start human trials with that in patients next year. That's for targeting diabetic macular edema where we know that plasma kallikrein is implicated in the disease. And we think it's important to deliver a potent drug directly to the retina and to the vasculature in the retina in order to have the best effect of the drug. So this will be instilled as an injection that has exposure over time. We're looking for improvement in the edema, improvement in visual acuity, and a long duration of dosing, so perhaps multiple months between doses.
Yeah. And in terms of milestones, this one's pretty exciting with DME because we're going directly into patients because you're doing an injection in the eye. And so by the end of the year, we can start to see activity where in the CT scans in the back of the eye, you don't see swelling or you don't see leakage. We got a drug. And that'll be really exciting. In addition to that, the data coming from 17725 late next year. And then, of course, each quarter with Orladeyo and continuing the march towards $1 billion. And John, we ended cash at what, $353 million? So, and again, we're moving towards profitability. So that cash lasts forever.
Got it. Thanks so much for joining us today. Great to be here with you.
Thank you. Thanks, Maury.