Okay, let's go ahead and get started. Thanks, everybody, for being here at Day 3 of the Piper Sandler Healthcare Conference. My name is Chris Raymond. I am a senior biotech analyst here at Piper Sandler. It's my pleasure to introduce our next presenting company, which is BioCryst. Today, we have with us the President and CEO, Jon Stonehouse, the Head of R&D, Helen Thackray, so let's maybe just go over the format, and also John Bluth, who's the IR guy. Sorry about that, and let's go over the format. This is a fireside chat format, and so this is meant to be informal, participatory. So if you guys have any questions in the audience, just raise your hand. I'll make sure that it gets asked and answered. And for anybody on the webcast, I'm also monitoring my email, which is quite a feed, actually, while I'm doing this.
But email me if you have any questions. So tons of questions, lots to get into. But maybe, Jon, just for folks who might not know the story, maybe just to level set the conversation, give us a sense of the setup and the premise around BioCryst and going forward, and then we'll jump in.
Sure. And first off, thanks, Chris, for having us at your conference. We're going to be making some forward-looking statements today of risk. The risk factors can be found on our website. Really interesting story with BioCryst. We've been a company that's been around for a while, but we're in a position now where we have a lead product in ORLADEYO for hereditary angioedema, a really differentiated product, the only oral prophylactic. And we're on a trajectory of over $400 million in revenue, growing at over 30% over the previous year. And we're on a path to $1 billion. So that is our anchor, our flagship of the company. But it was a homegrown, discovered product. And there are more in the pipeline. And Helen will have an opportunity, I'm sure, to talk more about our program in Netherton syndrome and DME.
And they're moving into the clinic, which is really exciting. And then third, we have a discovery platform. As I said, they're homegrown. So as we move things through the clinic, we're going to be able to move more products. So the idea is we'll have ORLADEYO, and then we'll have a second ORLADEYO and a third ORLADEYO. And then lastly, we're on a path to profitability. This year, at the beginning of the year, we said that we wanted to achieve operating profit. We're going to definitely achieve that. It exceeded our expectations, given the revenue that we've generated this year. Next year's second half, we'll be approaching or at EPS positive cash flow in the second half of the year, and full year 2026 cash flow positive. So financially, really, really strong and capital markets independent.
Excellent. Okay. So tons of questions here. Maybe just, again, for the uninitiated, maybe folks who don't know the story well, just a quick background, or maybe, Jon, on HAE and the unmet need that really was filled by ORLADEYO, and how patients and sort of you've seen the market sort of respond and maybe change a bit on the availability of ORLADEYO over the last few years.
Yeah. This is a really interesting market. I think sometimes people look at rare disease markets, and they kind of lump it in with other rare diseases they've seen before. This is very different, very different. So when we got onto the market, there were seven products on the market before us, which is highly unusual. And there's five or so behind us. And so it's a crowded market. But we're the first, as I said, oral prophylactic. And really, what the unmet need was is the burden of treatment. So there's some drugs that have really managed the disease effectively, subcutaneous injections every two weeks. But people wanted an oral for obvious reasons. And that's what we've been able to offer them.
And what we've seen is, and I think this is another really important difference, is because people are controlled on these other therapies, they don't see their doctor very frequently anymore. The days of running to the emergency room, calling their doctor two times, three times a week is gone. They see their doctor once a year. And so our ability to chip away at getting them to consider switching takes time. And that's why you see the trajectory that you see. But we're making great progress. And there's still plenty more patients to get on our therapy.
So maybe let's just jump into some of the recent data you guys had. I think recently you had some posters at the ACAAI conference covering adherence, persistence of HAE patients. I think also real-world attacks and the reductions of those, and also maybe treatment preferences. And I think you also had some claims data that you presented. Maybe just you touched on some of these during your earnings call. But for those, again, who aren't familiar with the story, just highlight and frame some of the takeaways from these presentations.
Yeah. I think the big note here is we have tons of data, and more than I think anybody's generated in the space. But I'll let Helen talk about these specific studies.
Yeah. So what we've put out is more numbers for some of the same story, which has been really great to see. At ACAAI, we had two big publications on 450 patients with type 1 and 2 HAE and 350 patients with C1 normal HAE. Those are enormous numbers for this very rare disease. And what we saw in those studies that was claimed, sorry, that was Sole Source Pharmacy data, was that patients did really well on ORLADEYO. They came into the study, and then we observed them over the course of their treatment with ORLADEYO. We saw the patients with HAE go down to a third of an attack a month, which is four attacks a year, which is very low for a disease where the norm without treatment is multiple attacks a month and sometimes multiple attacks a week.
So we saw consistent, very substantial reduction in attacks in ORLADEYO. We saw that in the real-world setting in very large numbers. We also, you mentioned the other papers as well, we looked at patient preference for oral versus injectable treatments and saw that the majority of patients prefer oral treatments, not a surprise, but now documented in large numbers. We also looked at the staying on therapy, so adherence and persistence on therapy. And a really interesting point there was that we saw consistent adherence and persistence on therapy for ORLADEYO when you compare that to injectables. You compare that to Takhzyro, to Haegarda, ORLADEYO had very consistent adherence to therapy to those as well.
Maybe sort of a commercial question, I guess. Can you talk a little bit about how this sort of is playing into treatment decisions versus the data you have in your label and the approval data?
Yeah. It's busting the misconception that the drug doesn't work, to be really blunt. The data that we have now is so large. And we're seeing consistently, whether it was APeX-2 and the two-year reduction in attacks of 90-some %, and then this study that Helen referred to, again, 90%. You can't get better control than that, Chris. And so every drug has some breakthrough attacks. As Helen mentioned, it's like four breakthrough attacks a year for these patients. That's what control looks like in this space. So what it's done with physicians and with patients is that ORLADEYO really works. And so they're interested in trying it.
I think you guys have noted 60% or so of scripts come from the top 500 or 600 prescribers. Then obviously, the rest of the 40 comes from the larger group. I think you guys have said you have a consistently growing number of new prescribers that are being added. Just how do you continue to sort of engage from a marketing go-to-market standpoint those 40% or so that are not the high prescribers?
Yeah. Actually, at the end of the third quarter, it's about 50/50 in that split of the top prescribers and the rest. And I think it's just, it's like I talked about before, this is a chip and away at the market. So in that top tier of docs, we've got about 70% of them that have tried ORLADEYO. So that means 30% haven't. And so getting these 30% to try it, and the feedback that we get from these docs or the resistance is, hey, if it ain't broke, don't fix it. And so what we want to get them to understand is the benefit of going on to a once-daily oral and the risk if it doesn't work for them, the benefit far outweighs the risk. And so we're chipping away at that. And I think we're making great progress.
With all the success we've had, there's still plenty of room for additional patients. We think we added 67 new prescribers in the third quarter. We'll continue to be doing that for quarters to come.
So you guys, this is one of the things that's been a little frustrating to me covering the stock, is how folks have been somewhat dismissive of your long-range, intermediate-range guidance, despite the fact that ORLADEYO, it's not every quarter, but it's almost every quarter since launch. The drug has objectively beat expectations. But there's a lot of metrics involved there. You're increasing your paid rate of prescriptions, obviously increasing prescriptions. All these things tend to be going in the right direction. And there are waypoints, right? You've got $800 million of U.S. revenue by 2029 that you've guided to. Maybe just touch on some of the other assumptions to sort of inform your path to that billion-dollar number that you guys have been talking about.
Yeah. I think the big point or the big takeaway people should take from this is they're not unrealistic expectations or assumptions to get to that. So first off is the base. The base is the exit rate that we had at the end of 2023, and that was $310 million. The next piece is an average of 200 patients net each year. We were at 320-something last year, so well above the 200. As we get closer to 2029, it may be below 200, but on average, 200 between 2024 and 2029. And we think that's very doable given the path that we're on. Then the next piece is what you talked about before, getting the paid rate up to 85%. We've made great progress on the commercial front this year. And that's 60% of our business. We're up to 82%.
So we made some changes over the last two years that have made great progress there. The big swing in the future will be Medicare. And we can talk about that later. But that's another $300 million if we can move it from the current rate to 85% by 2029. And then, or I'm sorry, $100 million. And then the last one is a modest price increase. And so we did a 5% price increase net three. The modest is less than that, and that's another $100 million. So that's how you get to $800 million.
Maybe let's chat a little bit about that Medicare tailwind or opportunity, I guess, arguably. What are the sort of pinch points, I guess, to making that happen?
Yeah. It's all about affordability for the patient at the end of the day. These are seniors on a fixed income. And what happened a couple of years ago, we had an 80% paid rate. And the charities ran out of money, and it swung to 48%. And so we have a lot of people on free drug because the charities ran out of money. Because of the Inflation Reduction Act and the cap on the out-of-pocket for seniors going to $2,000 spread over 12 months next year, we think the charities should have enough money, we hope, that they're able to cover patients so that that could swing back. Will it completely swing back to 80%? That would be a $40 million tailwind, which would be fantastic. We don't expect it all to happen in one year.
But somewhere between the $0 and $40 million, we think is possible next year.
Okay. Maybe let's turn to XUS and the opportunity. I think over the last year or so, you've launched ORLADEYO in a number of territories. I think Ireland was the most recent one. And you were guiding at 20% or so of that revenue, being XUS, that billion-dollar number that you guys have given. Is this still sort of your thinking? Is this 20%, sort of 80% XUS U.S.? And I got a follow-up for that.
Yeah, so the answer is yes. We're at about 11% right now in terms of the sales outside the U.S. And the key there is that it takes about four or five patients to get the value of one patient in the U.S. because of the pricing difference. So it is a volume strategy versus a pricing strategy. So it takes a little bit longer. And then pricing negotiations country by country take some time. But we're making great progress in Europe. We're in Canada. In Japan, we made some changes where we put our own team in place. In other parts of the world, I'm really excited about Latin America with our partner Pint, Eastern Europe with our partner Swixx. So yes, we expect that it'll be about 20%.
I think the other piece that's really important, and we saw this with Takhzyro, is when you start to peak out on the U.S., you're still adding countries in Europe and around the world. And so what happens is the international sales keep the growth, the overall growth. And that's what we expect here.
So maybe let's talk a little bit about potential competition. This has been sort of the bugaboo, if you will, right, that has been maybe vexing the story as folks are worried about the next thing and the next thing, right? So right now, you're the only oral therapy prophylactic that's available. But you've got new entrants that are oral, some injectables, some gene therapy approaches. So you've done some interesting work, I guess, to get a better idea of the U.S. prophy market. But can you maybe talk about the long term? I think generally investors understand that HAE is a sticky market, maybe more than others. But just sort of talk about how you see things play out in general with new entrants.
Yeah. I think the first piece is we got a really big head start. I mean, at the end of the day, it'll probably be close to seven years with the next oral prophylactic. And so that's a lot of time to get people on drug. And if it's working for them, like I said, 90% reduction in attacks and occasional breakthrough attack, what's going to drive them to switch? So that's the most important piece. But we do a really comprehensive market research effort once a year to look at the market and try to predict the future. And what goes into that is a conjoint analysis where we give the profiles, the best profiles of our competitors, the best timing of our competitors, sooner maybe than others might think. And then we talk to 100 patients, 175 docs, and over 50 payers.
And we get preference share that comes out of that. Preference share has some bias. A lot of times, companies just will cut it in half. And that's not a very elegant or sophisticated way of taking out the bias. And so what we do is we put it into a simulator, a Monte Carlo simulation, to show the interactions between those three groups, to add in timing where a patient doesn't see their doctor for a year to try to predict when somebody would go to another therapy that's being introduced. And we run 6,000 simulations. And what it did is it pumped out something that we put in our most recent earnings deck, which is our projections about the market, the prophy market from 2024- 2033. And it concludes the exact thing you said, which is it's a sticky market.
The share that new entrants get is coming from Takhzyro, which is exactly where we're getting our share currently. But believe it or not, at the end of 2033, the two largest market share leaders are Takhzyro and ORLADEYO. So what does that tell you? It's a really sticky market. And you've got to have something very different to get people to switch.
Another sort of aspect I think that I get questions on is you've got other oral options in development, both as an on-demand and prophylactic treatment. Maybe just touch on this critical distinction, I guess, between on-demand and prophylactic therapies and then maybe how that sort of plays into your projections.
Yeah. I think the simple answer is that the on-demand market is shrinking. It'll never go away because of the point I made earlier about everybody has some occasional breakthrough attacks. So there'll always be a place for it. But right now, I think prophy is around 70%-75%. On-demand is 25%-30%, and we expect that it'll go 85%-15% before the end of the decade, and so it's a shrinking market. If there's an oral available, we love that. Because having an oral option, if you have a breakthrough attack on ORLADEYO, we think is a great opportunity for patients to not have to inject themselves anymore. So.
The overall HAE market continues to grow.
Yeah. Yeah. I think that's.
That's dynamic.
Yeah. I think that's an important point that Jon's making is we've talked about the 7,500 number for a long time. And we're continuing to do our triangulation of trying to figure out how the market's changing. And it's growing. And we're identifying more naive patients too that haven't been treated with anything. And that's a real opportunity for us.
Okay. So, maybe last question on ORLADEYO, and then we'll jump into the pipeline. But you guys have a pediatric HAE trial, APeX-P, I think is the name of it. And you're expecting to file an sBLA in the upcoming year. Maybe just talk a little bit about the study and the current treatment sort of paradigm for patients.
Yeah. I'll let Helen do that, given she's the pediatrician.
So this is actually going to be really important for pediatric patients with HAE. So yes, we have completed the study. We're in the analysis. We expect to file the NDA next year. It's a new formulation, so it is actually a separate NDA. And it's pediatric granules, which we think will be great in this market. This is for patients under 12. So currently, there's no oral therapy for patients under 12, and this would be the option. It's granules so that it could be used for all of those ages, two through 12. It's very simple, little things that could be sprinkled in food or taken with a glass of water. And what it will do is it'll change the life at home for parents and for patients.
For pediatric patients, the option for prophylaxis for HAE is injectable, which means that a parent has to inject their child every two weeks at home just to prevent them from having attacks. And what will change is they no longer have to do those injections to prevent attacks. They'll have a daily oral medication that's easy to take no matter what the age of the child. So we think it's going to be really transformative for pediatric patients with HAE and for families with HAE. And we expect to see that parents will be very, very happy with this as well.
We should own this market. I mean, if you've ever injected a child, you know how traumatic it is, and what's really interesting is we think there's a halo effect potential here because this is a hereditary disease, and there are families, and it could be that the toddler is doing really well and the dad has HAE and he's on Takhzyro and he sees how well his child's doing and then goes to his doctor and says, "Hey, I'd like to consider trying ORLADEYO." So we think there's, and for the doctors who haven't tried it yet, that 30% in that top tier, we're going to go to them and say, "Come on, you've got patients that are pediatric patients. And why aren't you using ORLADEYO for them?
Excellent. Okay. Let's maybe jump to the Netherton syndrome effort. 17725 is a KLK5 inhibitor. Helen, so I think you guys are in the clinic now. You started your Phase I study. Maybe just talk a little bit about Netherton syndrome, the unmet need maybe for folks who might not understand this opportunity.
Yeah. This is a serious disorder. It's a genetic mutation and so it's one that is present throughout life from infancy to adulthood and it means it's a disorder of protein KLK5 in the skin that controls the sloughing or the sort of the coming off of the skin and what happens is that with this disorder, their skin is coming off in an uncontrollable manner so what that looks like, they have red, scaly skin. It's peeling all the time. In infancy, there's a mortality rate associated from loss of hydration through the skin and from risk for infection and then throughout life, these patients have a visible change in their skin. They are peeling. Their hair is brittle.
They live with not only the need to care for their skin on a regular basis, daily basis, but also the shame of having a different appearance to their skin, just walking around, social settings, school, work. It really has a profound impact on how they live their daily life. Current treatment is supportive. There's no targeted therapy to change how the disease behaves. It's also mostly topical treatments, which means creams and ointments. Because it's a disease of a mutation in the skin, it means that you have to treat the entire skin head to toe. The patients are left with the reality of having to put on creams and ointments, messy things from head to toe several times a day, every day of their life. That's a very high burden, not only of disease, but a burden of therapy.
So I think as you guys have outlined things, 2025 is going to be a year of data for that. You have a healthy volunteer program. I think you've got a SAD and MAD portion to that. And then I think maybe later on we'll get actual patient data. But maybe just give us the setup and timing and what we should expect in terms of the data next year.
Yeah. So let me start with this is a targeted therapy that should be disease modifying. We think it could be a functional cure for the disease. We've started with healthy volunteer treatment this year, which means that we'll have data from healthy volunteers, but we're also going into patients next year. So when you think about 2025 and the data that we'll be looking for, it'll be not only the basic safety and pharmacokinetic data to give us a sense of what dosing could be. It will also be activity at the target in patients. So we'll have activity in the skin in patients next year. We'll have patients getting treatment and having treatment lasting for multiple weeks. So we may be beginning to see changes in the skin, some of the clinical outcomes we're looking for towards the end of next year and into 2026.
Excellent. Okay. And then in the minute we have left, Avoralstat for DME. Maybe let's just touch on that. So you're in the clinic next year with this. And I think you have indicated maybe initial patient data coming by the end of the year. This is a market that has some options now. Maybe just talk about the rationale for this and the setup and the unmet need in DME specifically.
So this is a disease that has VEGF inhibitors as a standard treatment. What we know is that VEGF inhibitors don't work for all patients. And in fact, for patients who they do work for, they often cease working over time. So there's a need for better treatment for DME. Plasma kallikrein has been implicated. It's active in the eye. It's active in patients with DME. And it's active in patients who don't have VEGF activation in their disease. So we think there's an important role for plasma kallikrein inhibition as an alternative mechanism of action to treat DME. And it could be useful both for patients who are not well served by VEGF inhibitors, but as an alternative mechanism, it might be also appropriate for patients who haven't been on VEGF inhibitors yet.
Okay. Excellent. Well, lots to look forward to next year. We're out of time. But thank you.
Yeah. Thank you.