All right, good morning. Thanks so much for joining us at TD Cowen's Healthcare Conference. My name is Stacy Ku, one of the biotech analysts, and I'm here with my colleague Vish Shah. I'd love to welcome Jon Stonehouse, CEO of BioCryst, and Helen Thackray, Chief of R&D, to a fireside chat, and of course we have Nick Wilder in the audience. Thanks so much, all of you, for joining today.
Thanks for having us.
Ahead of our Q&A discussion, Jon, do you want to just very briefly share any color on the announcement that we saw yesterday morning for Anthony?
Yeah, before I do that, Helen and I are going to be making some forward-looking statements. They have risks, so you can find our risk factors on our website. Yeah, you know, it's sad to see Anthony go, but we're super grateful that he gave us a transition to April 9th. He's built a fantastic team. He added a ton of value to the company through a lot of the debt and royalty financings. As a result, the company's in the strongest financial position we've ever been in. I think the profile of our company now to attract a really good CFO is fantastic. The search has started. We're looking externally, and I'm really confident we'll find somebody great.
Okay, wonderful. Obviously, the fundamentals have been incredibly solid. Jon, Orladeyo is obviously now entering the fifth year of launch. What struck us when we were kind of preparing for this chat is the company is now guiding 2025 revenues that are above the original peak sales estimate that you all initially issued. So clearly, well on your way to a billion in overall global peak sales. To be backwards looking for just a moment, do you want to walk through the different drivers of growth as we look at Orladeyo's performance in 2024, which actually grew on a year-over-year basis?
Of course, as we look to 2025, what gives you conviction in your guidance of global Orladeyo sales, which you recently increased to $535 to 550 million, up from $515 to 535 million just a few months, kind of a month and a half, after giving initial guidance for the year?
All right, if I forget some of these questions, you got to just remind me of them.
Absolutely, promise you.
All right, so let's start with your statement. It is pretty wild to think that the original guidance was $500 million and then $500 million plus, and then the emphasis on the plus. Yeah, I mean, we're extremely confident in the billion-dollar peak sales. And so let's explain what we're seeing in 2024. I think the first piece is the underlying growth. New patient starts was the same as it was in the very first year of launch that never happens in a rare disease launch four years out. Why is that? I think one of the things, the strategy that we had, is to put out data to show that when Orladeyo works, it really works like injectable therapies, right?
98 High 80s, 90% reduction in attacks, a lot of attack-free months. So people are controlled t his myth of people will sacrifice efficacy for convenience is just not true.
It's a myth. So we put out conference after conference after conference, gone through this last weekend in Quad AI, and Helen can talk about it. More and more really large real-world studies, 450 patients in type 1, type 2, 350 patients in C1 inhibitor. And so what docs are seeing from that data is it works. It really works. And so that's caused them to try it. And they have their own experience in their practice, and they see it work in their practice. All of that has led to an increased confidence in the drug.
One of the things we were talking about in one of the investor meetings earlier this morning is this: there's two things that cause HA attack, low C1 inhibitor, and trigger. And stress is a trigger. When you're controlled on an oral once a day, you forget you're sick.
And so everything just gets better. People have this ease of life that is less worrisome about their disease or their therapy. That is what has caused it. The other piece that we made progress on the commercial side was improving the free drug to paid drug. Were now in a couple of years ago, we were in the low 70s-high 60s . It is 60% of our business. Now we have moved to 80% by the end of last year. That was a big improvement. To answer your question about 2025, we put out guidance at the beginning of the year. We said what was not in that guidance was what would happen with the IRA and the paid rate on Medicare.
What we have seen now, and that is why we increased it last week, is that it is snapping back a lot faster. We believe that we could be at 80% paid by the end of the year with Medicare, which makes up about 20%. We were at 55% at the end of last year.
Okay, wonderful progress. Kind of a quick comment on something that you brought up. The cable feedback is, I think it's begrudgingly become more and more positive. And a lot of it is coming from the patient demand and the patient satisfaction. If patients are coming back and saying, "I'm feeling better; this is the drug I want," then clinicians are actually more willing to prescribe it to others because they are hearing that real-world evidence of those that respond very well to Orladeyo. Let's drill down a little bit into kind of your other comment for 2025 for the IRA Medicare redesign.
So are you seeing, kind of in Q1, a lot of HAE patients that are Medicare successfully signing up and converting over to paid drug? Are we kind of still in the knife fight of Q1 right now? How are you thinking about charity support, the transition? And I know you've talked about a lot of different factors, but.
Yeah, I mean, honestly, the piece that we see that gives us the confidence is that the paid rate goes up. And it's gone up in, you know, what, the first two months of the year. And it's gone up a lot. We thought this was going to be a gradual kind of three-year process. What happened is it snapped back. I think we can speculate of why, but the two main charities that provide copay assistance for HAE patients are open for business. They weren't the last two years. They had waiting lists. That has changed. We feel that IRA had contributed to that because it's a lower total amount. Money can go further.
Okay, understood, understood. Then kind of last near-term discussion on '25, maybe talk about the ex-US contribution really briefly. Again, another really short-term question. You all talked about Q1 being kind of flat or maybe a touch below or, you know, somewhat in line with what we saw in Q4. Last year, you all gave very detailed quarter-over-quarter commentary. Is that going to be a similar pattern this year?
Yeah, I think we did. I'll do it again here. Let me go to that. Because of all the effects of copay assistance on the commercial side, right, and deductibles having to pay that off upfront. And so that hits the gross to net. You know, 60% of our business is commercial. And a lot of those plans have reauthorization at the beginning of the year. So there is some period where patients are on free drug. You know, we'd like it to be as short a period as possible to get them on to paid. But, the offices have to go through the reauthorization. So it could be one month, two months, three months, four months. We try to push it as short as we can with the offices. And so It' s inevitable.
When you have more patients on therapy, you're going to have more of a hit on copay assistance. You're going to have more patients that have to go from prior auth back to paid. To be really clear, our guidance in the Q1 is flat to down. You know, overall, we're going to have a very strong year, but our guidance is flat to down. On the ex-US, your first question, you know, it's just steady, nice steady growth. The Q4 is always a little bit larger in terms of percentage because of some distribution arrangements that we have. But, and I think it was around 13-14%. If you look at the full year of what contribution ex-US had, it's about 12%. It will grow a percent or two each year, roughly.
Understood. So you all were just at Quad AI. Just maybe talk about the patient demand. Is it you all going after new clinicians? Are you all trying to kind of have clinicians write more? What is the dynamic now as we're kind of thinking about a more mature launch?
Yeah, I'll let Helen, because she was there, talk about Quad AI because it sounded like it was a lot of excitement. Later will come back to what are we seen in terms of prescribing.
Yeah, so Quad AI, we had some great data come out. That drove some of the conversation. So we had these two large data sets on real-world evidence looking at types 1 and 2 HAE and then C1 normal HAE. That drives a lot of the discussions around how well patients are doing. It's over 800 patients' worth of data. So it really drives the discussion with physicians around, this is a drug that's working. For patients who are taking it, doing well, they're doing really well. We get to the physician conversation.
We also have the interest of patients. I think to your question, I think it's both. I think there's new patients and there's the increasing prescribing by physicians. And we're seeing and hearing things that are very consistent with that as we talk with physicians about their excitement at Quad AI.
Okay.
Source of business, 52% coming from switches. This has been pretty consistent. It probably will change because on-demand will change over time. You know, we believe that on-demand, our profit will go to 85%. It's probably more in the 75% to 80% . 32% switches from on-demand and then 17% treatment naive patients. On the doc side, there's 500 of the top prescribers that make up 50% of the prescribing for HAE. We're at about 80%, but we're continuing to chip away at that 20 and then get them to go broader because they have larger practices.
And then on the other 1200, you know, we're continuing steady growth. We're adding 60 new prescribers every quarter. So that tells you something.
Okay, that's, I mean, that's incredible. If the 60 prescribers each write one prescription, that is very meaningful ads. Okay, wonderful. Helen, you kind of alluded to this a little bit, but the size of the HAE market is actually rapidly evolving, rapid at least in the last few years. You last spoke about the number of HAE patients that are diagnosed and treated is actually closer to 8500 with around 7200 prophylaxis patients. Correct me if I have the math wrong, which should grow to over 9000.
So as we think about your opportunity and maybe even the growth of prophylaxis treatment, how are you thinking about within your estimates and expectations, the growth of the market and put that in context of your billion-dollar peak sales?
Yeah, let me start with just correcting you slightly. So the market we believe now is around 11000. And we see profit around 7300, I think it's 7500 last year. It'll grow to about 9300 and so in 2033. So you know, steady, steady growth. and y ou know, that's not surprising. It's about 5% growth per year. That's not surprising in a rare disease, even one that's established and has so many therapies because C1 and normal C1 inhibitor is another really interesting population that we've produced, as Helen said, a really robust data set that shows market decreases in attack rates from baseline.
And that's a population, I think in general that, physicians had trouble with and therapies weren't as effective. And It's a third of our business. So that's lumped into that number now. And that is contributing to some of the growth.
Okay, wonderful. Helen, can we talk a little bit more about the pediatric study results, APeX-P ? Clearly, believe you all said submitting the pediatric NDA this year.
Yes, yes. At Quad AI, we had our pediatric data set presented in a late-breaking abstract last Sunday. And it's that data set that is the basis of the sort of the information that we will be putting into for the NDA, which will be this year. We learned a couple of things in that data set. First, we were assessing the safety, tolerability, exposure levels of oral granules of Orladeyo in the pediatric population. We gathered the data that we need to be able to submit and talk about dosing with the agency.
Secondly, we saw a clear impact on that population, patients who are doing very well, the pediatric patients. This is a large data set. It is 29 patients, of whom 25 are continuing therapy at the end of the time frame. Great continuation rates and very good improvement in attack rate.
Thirdly, we learned with that that the pediatric population, in fact, has very severe disease starting at very young ages. That seems to be a surprise in the field. The conventional wisdom is that this is a disease that really is seen more starting in adolescence. What we saw was a median age of onset of swelling at two. There is a very high need in the youngest patients. There is also very severe disease with hospitalizations in the youngest patients. We are very pleased to have an oral granule formulation that may be coming for those patients to be using as prophylaxis.
In this halo effect, I think, is going to be really interesting to see because we see it with adolescents. You know, a 14, 15-year-old kid in a family of HAE patients does really well on Orladeyo. The parent starts to think, "Hey, maybe I should try it." We think we're going to get that with the pediatric population as well. None of the pediatric numbers are in any of our guidance or in our billion dollars. That's a plus.
That's going to be one of my questions. It's interesting you talk about the 25 patients that stayed in the study. It could be interpreted two different ways. Either the tolerability is incredibly kind of better than expected, I would say, or these clinicians are getting a lot of experience with Orladeyo and being able to guide kind of patients through that initial few months of trial and error and then realizing how to recognize the.
The rate of AEs was different, though, was it, Helen? Yeah. It's not just the dropouts, it's the rate of GI AEs.
It's the actual GI AEs. It's the experience and the tolerability. The tolerability is significantly improved. We think tolerability is very good with the oral granules. Yeah.
Okay, wonderful.
Just one last point. I did have a conversation at Quad AI with Raffi Tachdjian, who's an expert and a pediatrician expert in HAE. He's at UCLA. He was able to give some color to how physicians in the field look at the pediatric population, how they look at the overall population, and the changes that are seen with oral prophylaxis. That was a really interesting conversation. I point you to that's available on our website as well.
Yeah, that's a great transition to kind of the overall KOL perspectives on the need for oral agents in HAE, especially for prophylaxis, just given kind of the chronicity of treatment. What are your overall views in terms of the injectable market, the oral market, those that kind of transition and are well controlled on orals? How should we think about maybe the moat that you all have when it comes to Orladeyo? I know last fireside chat, we spoke at ad nauseam about the compliance rate and retention rate of patients on Orladeyo, but it's something that continues to come up. We do think it's very underappreciated.
Yeah, you know, the retention rate now is, you know, we got four years of it. And it's solid, right? It's 60% stay on therapy at a year. And we lose very little after that. The number one reason for somebody going off is, you know, unfortunately, with some, the drug doesn't work, right? When it works, it works as well as injectable therapy. You know, in terms of the evolution of the marketplace, there's always going to be a need for rescue therapy because not a single one of these drugs, even the ones under investigation, are perfect.
Everybody has breakthrough attacks. Remember, what causes an HAE attack is low C1 inhibitor and a trigger, and stress is a trigger. Sometimes life gets in the way and you have an attack, even when you're on a really good therapy.
Clearly, things are moving to prophylaxis. I mean, we're hearing that around the world now. It was less so in Europe and in Asia and in Latin America. The exciting thing is that the worldwide guidelines now are very clear. There are contributions from physicians all around the world. The recommendation is you should be offered prophylactic therapy because that just makes complete sense because why would you suffer from an attack and treat it versus prevent it? I see that continuing to move more and more towards prophylaxis.
You know, there'll be competitive injectables coming out this year that will create more noise around that. We think, you know, if you're ready to switch, of course, you would try Orladeyo first to see if it works for your patient.
Our KOLs do tell us that additional injectable entrants are very unlikely to impact the oral prophylaxis options in HAE. Maybe as we think about that switch market, you kind of alluded to the injectable entrants, maybe agitating some more of these patients that have been on twice weekly injections or even every two or every month injections. Just maybe talk about your views on what the other entrants are going to do in more detail.
Yeah, you know, we put out some pretty extensive market research that we've talked to you about. And it's in our slide deck. You know, it's the most robust market research that I've seen in this space in terms of numbers and then methodology, you know, doing both conjoint preference share and then putting it in a market simulation and doing Monte Carlo analysis on 6,000 simulations. I think it might be worth a little bit of time to just talk about the dynamic we see in the market. You know, in general, the number one obstacle that we get when somebody's on prophylactic therapy is if they're controlled, why would I change? Like, you know, if it isn't broke, don't fix it.
Getting a physician to understand that there's very little downside to trying Orladeyo and they could get that same control on a once daily capsule is our job. Because patients do not see doctors more than once or twice a year, your opportunity to influence that is very infrequent. That is why you see this kind of steady trajectory versus a hockey stick. It is only going to get harder for the next people that come into the market, right? It was easier for Takhzyro. It was harder for us. It is going to be harder for the next one and even harder for each one after that.
When you look at the output of our market research, you see that slow chipping away of the new entrants. It is not a hockey stick for any one of them. It is taking largely away from Takhzyro.
Not so surprisingly, at the end of 2023, you look at the market leaders in terms of patient share and it's Takhzyro and Orladeyo. And why is it? Because it works. You have to have something really disruptive to get people to say, "Yeah, I'm ready to switch." Oral therapy is disruptive. You know, we'll have years of opportunity to keep chipping away at that.
Yep. Of course, you have durability to 2039. Again, to your point, you are doing a lot of different work to make sure Orladeyo remains relevant. Switch studies, I think it's all within the competitive landscape, really, really compelling. Kind of hit on the peak sales opportunity for Orladeyo. We do want to make sure we leave enough time for pipeline. As we are heading into kind of the second half of this year, we've been getting a lot more high-level questions on BCX17725. Helen, if you could talk a little bit more about this asset and what are you looking for specifically to move forward? We'll obviously then move into kind of the market opportunity.
Yeah, so this is our next drug in the clinic. Our goal is to have a drug that comes to market as a success behind Orladeyo. We have several opportunities to do that. BCX17725 is a fusion protein and a KLK5 inhibitor. Our goal with that is to deliver a functional cure for Netherton syndrome, which is a genetically driven disease. It has a missing protein function. That missing protein function is the regulator of KLK5. Our product is intended to deliver replacement of that missing regulation of KLK5.
Netherton syndrome is a severe disease. It is an ultra-rare disease. It is genetic. It is a skin condition in which the pathology is disruptive peeling of the skin, disruptive separation of the skin. The skin is not normal. It is thin, it scales and peels, and it is highly inflamed.
There is both skin peeling and inflammatory components. Those stem from KLK5 activity being unregulated. What we are going to be doing with our program is moving forward. We are now in Healthy Volunteers, moving to patients to assess 17725's ability to get into the skin and to have activity in suppressing KLK5. Finally this year, to look at the skin healing as a result of suppression of KLK5 and suppression of that, both the cascade of skin separation and then the associated inflammatory cascade.
Our goal is to have data in patients this year showing all those penetrations of the skin, activity on target activity in the skin, and then finally healing of the skin as a result of this functional replacement of the missing protein.
Okay. You all had maybe previously discussed starting to dose patients by Q3. And the Healthy Volunteer and patient study, is that going to happen around the same time as you're getting, collecting information from Healthy Volunteers? Or are you going to finish Healthy Volunteers before then moving on to the study?
This is all one study. One of the things about an ultra-rare disease is you want to get into patients as soon as you can. For us, that means in the same phase one study. We're currently dosing in Healthy Volunteers, dose escalating through a standard approach. Our plan is to open sites to enroll patients in that same study this year and have that first experience in patients. We would then go to a larger study once we have information around the dose. That will be next year, in which we're assessing a larger number of patients with durability of effect to look for long-term healing.
Helen, you might want to just talk about the difference in KLK5 and what you see in healthy's versus what you see in patients. That'll give us information about do we see activity or not.
Yeah, so there is a difference in what we can gain with this in Healthy Volunteers versus patients. KLK5 is our target, of course. It is normally regulated in healthy skin. And so it does not bind to the drug. We would not expect it to bind to the drug. We would not expect to see skin levels or skin activity because there is no abnormal activity of KLK5. However, in patients, abnormal KLK5 activity is the target. And so that is our opportunity to, in the course of the same study, assess the drug's activity as well as the clinical outcomes.
Okay. I know it's still early days, but are these patients, you know, I know you said around 1,600. Are they essentially diagnosed and available to be enrolled in a clinical trial like this? Is it going to take time to kind of go out and find these patients? I know you all are doing a lot of work around kind of trying to understand the true prevalence of the Nethertons as well.
We certainly have patients identified and available for clinical trials at this point. However, this is a disease where there's no targeted therapy available. It's a disease for which the genetic test is necessary to get diagnosis. It's also a disease that's treated with standard of care for a larger sort of category of conditions that are ichthyosis conditions, sort of scaly, very severe skin disease. We think that there are about, we've estimated about 1,600 patients in the US based on looking at a term, which is specific to Netherton syndrome. That's bamboo hair. It's how the hair looks under the microscope. We think that significantly under-recognizes the actual population with Netherton syndrome.
As a targeted therapy comes into trials and then becomes available, we would expect physicians to be doing testing on patients who have ichthyosis to see if they have the subcategory of Netherton syndrome, when we may see enlargement of that patient population identified. This is not uncommon for rare disease. It's certainly what happened with HAE. At the advent of targeted therapies available for HAE, the population started to be understood to be much larger than originally.
I think there were 2,000 patients originally. Now we're at 11,000 patients. I would expect something similar to happen with Netherton syndrome once a targeted therapy is available that makes it important to then diagnose in this patient, why do they have ichthyosis.
Okay. You all are trying to go for every two-week dosing or better?
Yes, or better. Yes. This is a potent therapy. It has very high affinity, which means once it's stuck to the target, it doesn't come off. We expect it to be in the skin for the duration of the KLK5, that level of skin being there. We expect to dose. We're targeting every two weeks. We will have to see in the patient data whether that's actually the range or whether it's something longer as skin turnover takes place. This would be a subcutaneous dose. It would be about every two weeks to start.
Okay. We are also expecting some updates for your additional pipeline program in DME. Very briefly, do you want to just discuss the avoralstat, what you've seen so far that gives you a lot of excitement and maybe the cadence of updates?
Yeah. This is our next program after Netherton syndrome. It will be in the clinic this year. It's a program that will be dosing patients initially rather than needing to go through Healthy Volunteer studies. It's a program with a plasma kallikrein inhibitor that has unique properties that make it appropriate to instill in a depot-like suspension in the suprachoroidal space in the eye. I'm excited about this because we now have some evidence starting to build to show that this could be really, this could be a differentiated mechanism of action.
We have a drug that could be delivering sufficient exposure to the right place in the retina to get activity and enough to have improvement in clinical outcomes with a plasma kallikrein inhibitor where that's been elusive in trials so far.
We think that's probably a result of having inadequate exposure in the right place. We will be in patients this year. Our very first few patients will be looking for the outcomes that will tell us if we in fact have a therapy to take forward. We'll be looking for the edema and changing in the edema this year. Next year, we'll be looking for improvement in vision.
Okay. In the last few moments, obviously, you are advancing the pipeline, but also being conscientious stewards of your capital. Maybe just remind us your guidance on the next few years in terms of growth of OPEX spend versus Orladeyo sales.
Yeah. So the guidance for this year revenue, as I said before, is $535 to 550. OPEX is $425 to 435. And then we also gave the compound annual growth rate 2025 through 2027. So on revenue, it's 20%. On expense it's 5%. And so what that gets you to, if you do the math is $750 in revenue for Orladeyo, $450 in OPEX. And so operating profit of $300. Below the line, it's around $100 is with the interest and royalties. And so that's $200 million in cash flow. So we're really excited about moving towards profitability. And we're going at a really good clip.
Okay. Wonderful. As always, pleasure to have you all.
Yeah. Great to see you. Thank you.