Good morning, everybody. Welcome to day two of the Citizens Life Science Conference. My name is Jon Wolleben. I'm a Senior Analyst here, and we're pleased to have BioCryst Pharmaceuticals joining us and Jon Bluth and Nick Wilder to tell us a little bit about the BioCryst story. It's a name we've been covering for quite some time, but for those who aren't as familiar with BioCryst, John, maybe you give us a rundown of what you guys are working on.
Sure. Thanks, Jon. Thanks very much for having us here. We'll be making some forward-looking statements, so please review the risk factors in our SEC documents for a description of those. BioCryst is a commercial stage and, as we reported Monday, profitable biotech company. We are focused on developing medicines for patients with rare diseases, and we're trying to develop molecules that are best in class and first in class. Our commercial product is ORLADEYO, which is a once-daily oral pill for patients with hereditary angioedema. It's been on the market for about five years now, and it's doing really well commercially. We're on track to generate $1 billion in peak sales. We elevated our guidance when we reported our Q1 results on Monday that we expect to sell $580 million-$600 million of ORLADEYO this year.
It's a really transformative medicine for patients because the current therapies for prophylaxis are injectable, and this is a once-daily pill. We have two programs in the clinic behind ORLADEYO. We have a medicine for a rare disease called Netherton syndrome that is in phase I clinical trial in healthy volunteers, and it'll be moving into patients later this year. We have a medicine for patients with DME called Avoralstat, and that program will also be moving into patients this year. We'll have data from both those programs by the end of the year. We announced on Monday that we filed our NDA for a pediatric formulation of ORLADEYO. That's what the pipeline behind the adult formulation of ORLADEYO looks like.
We're a company in a great cash position, just became profitable, expect to be profitable on a full-year basis in generating cash going forward. It's a real unique combination in biotech to have the strong commercial product, the strong pipeline generating data events on top of profitability and the cash position that we have.
Yeah, it's one of the better profiles in SMid-Cap biotech, I think, that's out there to all the points you just mentioned. I want to save some time to talk about Netherton and DME, but I think most everyone's focused on ORLADEYO and how things are going and so well. We've been covering hereditary angioedema for as long as you guys have been working on it, I guess. It's a competitive space, and it seems like you guys have wrapped your arms around it better than anybody. Can you talk about what's driven the success of ORLADEYO?
Sure. Yeah, it's been a very successful launch, and it is a competitive space. It's great for HAE patients. They keep getting more and more convenient and effective medicines. The driver for our success is the efficacy and convenience of ORLADEYO. Patient demand has been very strong right from the outset because patients really want an oral medicine to manage their disease, and they have that with ORLADEYO. In about 60% of patients, they get spectacular efficacy with ORLADEYO. They're getting outstanding control of their attacks, no attacks or very infrequent attacks, and they're getting it with one pill once a day. We've seen demand just continue on a very consistent, steady basis to be very strong, and there's still a lot of fruit on the tree. We see more and more patients coming to ORLADEYO.
A lot of them are switching from the injectable therapies. About half our business comes from patients who are switching from injectable prophylaxis to ORLADEYO, and then the other 50% or so come from patients who are either new to therapy or have been managing their therapy with acute on-demand.
I think what's interesting is the bear argument when you guys came to market was your data wasn't as good in the injectables.
Yeah.
What you're seeing, the real world, is efficacy actually looks very good. Can you talk about kind of that disconnect between what we see when we look at clinical trial data? We're in a spreadsheet versus what happens in the real world.
Yeah. What matters for patients and physicians is what happens in the real world, but sometimes they do not—if there is a difference between the clinical trial data and what the real-world evidence is going to show, it has to prove itself out. We have really seen that over the last couple of years in particular, as we have accumulated many years and hundreds of patients on data, we have started to publish that data. We have a sole-source specialty pharmacy, so we get all the data from our patients sort of running through that channel and have very good visibility to it. We are able to really put out some interesting science with 300, 400, 500 patient sample sizes that show how is ORLADEYO working in the real world.
What it's showing is the kind of efficacy I described a moment ago where you're getting 80%-90% reduction in attack rate in patients for whom it's working. In our clinical trial, that was a comparison against placebo. Because of the responding dynamics of ORLADEYO patients, where you get about 60% of patients having this spectacular result, you have 40% of patients who the drug doesn't work as well for one reason or another. You saw a lower point estimate number in our phase III trial. You're right. I think Wall Street had lower expectations than we did for the product at launch. What we've been able to show over five years is that patients really want this product, and it works really well for them.
I think the other fascinating thing for your story is you guys pretty much nail your guidance every quarter and usually raise. Can you talk about the market research you guys do and how you're able to kind of hone in on nailing this guidance, then also doing better consistently?
Yeah. Yeah, I think there are a couple of dynamics there. One's our philosophy, which is with our guidance, we're trying to be accurate. And how do we do that? We do that by understanding the market with pretty comprehensive market research. And what we've done, we did late last year as we published this so that investors could see it also. And what you see when you take a look at that is that we look at every year, we do a multifaceted Monte Carlo analysis of hundreds of patients, hundreds of payers, or hundreds of physicians and 50-75 payers. And we run simulations with other market entrants' expectations. This is a crowded space, as you mentioned. It's getting more crowded.
What we're looking at is what's the current landscape of therapies that are on the market and what would patient preference be, what would physician preference be, payer preference be for usage. As we look forward, we look at the timing that's expected for new entrants. We look at the profile that's expected for new entrants, and we give them the benefit of the doubt, best possible timing, best possible clinical profile in their label. We run those simulations, and we get an output of what the market will look like as these new entrants enter. If you look at that slide in our deck, you can see that today the current market leaders are ORLADEYO in the oral prophylactic space and Takhzyro in the injectable space.
Even with all the new entrants that are coming by 2030, those are still the market leaders in 2030. The new entrants will get some share, but the incumbents are going to hold on to that share. We get a lot of great information from our market research, and it's been very accurate from the outset for us.
What's interesting, though, about the space, it's a relatively small but, I guess, large rare disease opportunity. What we've seen is patients' willingness to switch and try new therapies. When you talk about new therapies coming to market, we could have two other prophylactic drugs approved this year. Why won't patients switch from what they're on today to one of the newer therapies? Like, what does your market research tell you?
Yeah, what our market research tells us is that there has to be a really compelling reason for a patient to want to switch. HAE is really, you're right, a unique rare disease because there are so many therapies. One of the reasons for that is how organized the patient association is in advocating for new therapeutic approaches and options for their patients. As we've come to market, what we've seen, and if you look at our launch trajectory, you see this, this is a very sticky patient population. It's hard to get a patient to switch because in the prophylaxis space, even with the injectables that are out there today, Haegarda, CINRYZE, Takhzyro , those are excellent drugs from an efficacy perspective. They work really well at controlling disease. They're just injectable. They're not convenient for patients.
There is a lot of burden associated with the administration of therapy. What we have been able to offer is a really compelling reason to switch. You can get similar efficacy if the drug works for you with one pill once a day. That is why patients are switching to ORLADEYO. If you fast forward to the new entrants that are coming in the prophylactic space, the next couple are injectable. What would be the reason for a patient who is well controlled on a current injectable or on ORLADEYO to switch to one of those new, less frequently administered injectables? Is that decrease in frequency of administration enough for someone who is on a current injectable to switch? Our research says probably not a lot. Is there a motivation for them to switch off ORLADEYO if they are well controlled? Our research says absolutely not.
It really comes down to what's the value proposition for a patient. If you're well controlled on the product that you're on, what would make you want to switch? With ORLADEYO, if you've got an injectable patient, the oral option we're finding, and that's why you're seeing so much commercial success for us, is that yes, patients do want to switch, but it's hard. We've got to, you know, we're five years into the launch and we're chipping away at it. You see our launch as sort of a steady climb, steady climb, not this big hockey stick right out of the gate because patients who are well controlled, they don't see their doctor very often anymore. They may only see their physician once a year. The only opportunity for them to have a conversation about switching is once every 12 months.
If it doesn't come up or they don't make the decision at that visit to switch, it's another year. The cycle is a slow one. We're five years in now, so you're starting to see us really gain traction.
Yeah. And you guys, Monday, I guess it was, hard to keep track, raised guidance to $580 million-$600 million this year.
That's right. Yep.
In year five of the launch, I think historically, if you look at drug launches, they start kind of plateauing around year six or year seven. You want to hit a billion in sales. Walk us through how we get from $600 million, you know, on a good year, 2025, to a billion in sales.
Yeah. So there are a few components that get us to a billion in peak sales. The first is $800 million in sales from the U.S. That'd be $200 million then from the rest of the world. To get to $800 million in the U.S., we need a few things to happen. One, we need to be adding new patients, and we need to be adding on a net basis about 200 new patients each year between now and 2029 or so. We're absolutely on that trajectory right now. We're north of 300 patients net add we reported over the last couple of years, so well north of the 200 average that we need. As we get closer to 2029, we might dip below 200, but on a net basis, we need to add 200 patients a year.
The demand is getting us right where we need to be on that component. We also need to get patients paid, reimbursed for ORLADEYO. We need to get about 85% of U.S. patients paid on ORLADEYO. We exited last year at about a 75% paid rate, and we reported on Monday that we've now bumped that up to 84%. We are almost there at that 85% reimbursement level that we need. Price increases are another component there. Historically, we've taken a gross 5% or so price increase per year. On all the metrics that we need to hit to get to a billion dollars, we are really moving in the right direction there. They all look good.
Just simplistically, can you talk about you need to have 200 patients a year. How many patients have tried ORLADEYO or are on ORLADEYO now, and how many patients are there?
Yeah. The market's growing. When we launched, there were about 7,500 or so diagnosed and treated patients on ORLADEYO, not on ORLADEYO, in the market. Now, with the market continuing to grow and new entrants coming, we think that's about 11,000 patients overall. We've said about 3,000 patients have tried ORLADEYO, have had experience with ORLADEYO. You can see with 11,000, 3,000 have tried. We've got a lot of opportunity still to add patients.
Just been on the market for about five years, 3,000 have tried, about 600 try a year. You need to keep about 1/3 of those on therapy to keep that trajectory going.
Math seems to be working.
It's not a yeoman effort to get there.
It's not easy.
Yeah.
For the reason that I described earlier, that patients just don't cycle through their physicians as frequently. It is hard work, but the track record that we have suggests that we're going to get there.
You mentioned the pediatric opportunity earlier. Can you talk a little bit about that? Because that's something that we haven't really thought about in HAE, I think maybe because of just the therapies we've had have been approved for adults. What is, do kids get affected? How many are there?
Yeah.
How does ORLADEYO look in that population? What could the commercial opportunity be?
Yeah. This formulation for kids will be a game changer for parents and kids. They're oral granules that you can sprinkle in liquid or soft food. If you're a parent, you know how hard it is to give your kid an injection, especially for a disease that's so serious and can be fatal. There are about 500 kids we estimate in the U.S. We think that once the pediatric formulation of ORLADEYO is approved, the lion's share of those patients will want to try ORLADEYO.
How's the data looked in pediatrics?
It looks excellent. We did a study called APeX-P, and we announced on Monday that we have submitted our NDA. That study was a safety and PK study primarily, and the safety data looked great. We did look at effectiveness also, and the effectiveness data looks excellent, also very good attack control. We think that this is going to be a really important advance for kids and families with HAE. HAE is a hereditary disease, so there's a family component to it as well. We do think there could be a halo effect into the adult population.
If you're a parent with HAE and maybe you're not on ORLADEYO, you're taking one of the other prophylaxis products, and this is the best option for your child as an oral medicine, and you put them on ORLADEYO and they have a good experience, it might open you up to being more open to trying ORLADEYO as well.
That's interesting. And Takhzyro is approved in two years and older, I believe, right?
Yes, it is.
How has that uptake been? Is there any kind of learnings from what they've done in pediatrics and what that could mean for you guys?
Yeah, it's a little bit of apples to oranges because it's an injectable product and we're an oral product. It's the only option that families have right now. We think at least half of patients are going to be coming to ORLADEYO to try it.
Can we talk just for a minute about kind of [XUS] and how hard is that blocking and tackling? If it's that hard in the U.S., how does that dynamic change outside of our system?
Yeah, our launches outside the U.S. have gone very well as well. We sell the product in Western Europe. We sell the product in Canada. We sell the product in Japan. We have partnerships. We have a partnership in Japan, though we do most of the selling with Torii, and we have some distributor partnerships in the Middle East, in Eastern Europe, and in Latin America. The launches have been great. We have launched across all the major markets now. We have gotten reimbursement in all but one of the markets in Europe. We should have the final one this year. Every market's a little bit different, but uptake has been fantastic. Strong patient growth, strong demand. The dynamics between prophylaxis and acute therapy are a little different in Europe than they are in the U.S. There's more use of on-demand medicine, mostly for pricing reasons.
Now with ORLADEYO coming to the market, we're starting to see that balance shift a little more to prophylaxis because there's now an oral opportunity.
Interesting. Like I said, I want to talk a little bit about the pipeline because we've been banging the drum on ORLADEYO for years with you. The nice thing is that our checks usually coincide with your checks, so that makes me feel better about everything. You guys hit guidance and you keep raising guidance. Everything's moving well there. You mentioned profitability. Now we have kind of the next leg to the story, which is the pipeline that's coming through.
Yeah.
Netherton syndrome, I think, is the one that people are more excited about. We like DME personally because it kind of saddles another area. We like it in ophthalmology, but Netherton syndrome, can you talk a little bit about that opportunity?
Yeah, no, it's an exciting time because we're going to have our first patient data, as I mentioned earlier, in both programs by the end of the year. Netherton syndrome is just a horrible, horrible rare disease. It's a problem with skin turnover. Essentially, patients who have Netherton syndrome, their skin sort of sheds uncontrollably. The biological mechanism that regulates skin turnover is broken with a genetic defect. The protein that regulates that skin turnover doesn't work. It's sort of like a runaway train with the skin just turning over, turning over. Your skin keeps infection out. It keeps moisture in. When kids are born with this, babies are born with this condition, there's an incredible infection risk. There's a mortality associated with it. If the child does survive into adulthood, it's a very, very challenging disease to live with, ointments and creams.
There is no treatment, no therapy, disease-modifying therapy for the disease. We have a product in BCX17725 that replaces that missing protein and puts the brakes back on that runaway train of skin turnover. If you see, you can see photos of people living with Netherton syndrome in some of our slide decks, red, scaly, itchy skin. There are some related downstream consequences, food allergies, asthma. It is a really tough disease, and there is nothing available for it. We are really excited to see the data we get from patients later this year. We are in healthy volunteers right now gathering safety and PK data. The real kind of informative data that we are going to get is in patients, and that will be by the end of the year.
What do we know about the prevalence? It's a rare disease, nothing approved, one of these conditions where probably we don't know exactly, but what's the best estimate you guys have for how many patients there are?
Yeah, so there's no ICD-10 code for Netherton syndrome, but there is for a condition called bamboo hair, really brittle hair, which is a result of Netherton syndrome. So when we do a claims analysis, we see about 1,600 patients with bamboo hair. So we estimate the population's at least 1,600 people. But what we've learned from HAE, we're talking about the growing market in HAE with a lot of rare diseases. Once there is a therapy and there's nothing right now, you start to see more diagnosis and more patients. So we estimate that there are about 3,000-5,000 patients with Netherton syndrome in the U.S.
Pretty good size. You guys have been pretty prudent with your pipeline decisions. You guys have canceled, well, discontinued a factor D inhibitor. You discontinued an ALK inhibitor. Competitive reasons, not really a commercially good decision. What do you want to see in Netherton syndrome to say, like, this is a green light for us internally?
Yeah. This ought to be very clear, it should be very clear to us that BCX17725 is modifying the disease. We should see the skin starting to normalize. That should be very obvious and visible. There are a lot of ichthyosis scores and validated physician instruments that we'll use to do that. It is sort of a two-step process with the data. We want to see first that the drug is getting to the epidermis, getting to where it needs to get. It is a very potent, high affinity drug. It should be binding to where that protein is deficient and missing. It should be replacing that. We can see that in assays. We see it in animal models. In patients, we want to see the drug getting to the skin, to the outer layers of the skin.
If we do, that's going to be very encouraging to us that we should start to see these very clear clinical benefits.
What do next steps look like?
We need to see what the data looks like first. The next step's a pivotal program. We think if the data's really, really strong, we'll talk to the FDA about moving right into a pivotal program. We need to find the right dose. We need to move it as fast as we can for patients.
Can we talk in the last few minutes about diabetic macular edema and Avoralstat? This is a drug we were talking about in 2016.
Yes.
It hasn't found a home for it.
Yeah.
How did this come about?
Yeah. So Avoralstat is a kallikrein inhibitor. It was the first generation HAE program that we had. It was extremely potent, but poorly bioavailable, which caused it to fail in a phase three trial of HAE. It just wasn't bioavailable enough to prevent attacks and have a commercially viable dosing profile. Those same characteristics make it really interesting to use in the eye. We have a partnership with Clearside. We have a suprachoroidal delivery of the drug, which is the space in the back of the eye by the retina. Because it is so potent and poorly bioavailable, it sort of acts like a depot formulation, sort of slowly dissolving in the back of the eye. For diabetic macular edema, that's where the leakage is happening in the retina. We're going to deliver Avoralstat to the suprachoroidal space.
We're going to see if it can reduce the swelling in the retina, which would, we think, lead to improvements in vision. Because we have so much safety data that we accumulated in the HAE program, we can move directly into patients. We don't need to start in healthy volunteers. We've got authorization to proceed with the trial in Australia. We'll be enrolling patients shortly. By the end of the year, we'll have our first information from patients on, first, what is it doing to the swelling in the retina? If we can start to see the impact there, that's going to be very encouraging to us to move forward.
How do you juggle Avoralstat commercial, Netherton rare disease, and diabetic macular edema when we're talking about millions of patients internally? Like, how do you guys think about those priorities? And then do you need different skill sets, teams to kind of manage both?
Yeah. Right now, we've got the ORLADEYO team sort of up to scale, up to speed, and running really hard. That team is focused commercially on continuing to grow ORLADEYO . On the R&D side, we're in small studies right now. We've got phase I programs in both the DME and Netherton syndrome program. We're able to focus, just like other big pharma companies are able to focus on multiple programs, driving the pipeline with focus and purpose and driving the commercial business as well. I think as we get further along and we get to the spot where we've got, hopefully, we've got good decisions and good problems to have in terms of success with multiple programs, we can sort of say, all right, where do we want to lean in the hardest?
Do we want to look for a partner in the DME program, for example? Do we want to do it ourselves? I think from a commercial perspective, both programs are small from a commercial footprint perspective. DME is a lot less rare than Netherton syndrome, but the number of retinal specialists who treat DME is similar to the number of docs who treat HAE. There is the opportunity, if we wanted to, to lean into that program commercially also.
We kind of touched on these, but maybe in the last minute or so, can you just put a button on catalyst between now and maybe the next 18 months, just so everyone is on track about what to expect this calendar year? Obviously, I think the quarterly updates from you guys with your financial results is what people pay most attention to. We have some data readouts coming, so I just want to make sure it's on everyone's radar.
Yeah. Of course, continued success with ORLADEYO . Data from the Netherton program, data from the DME program in patients by the end of the year. We filed the NDA in pediatrics, so advancing that program through the regulatory process and onto the market. You will continue to see cash balance build as well. We paid off $75 million of our debt early this quarter, and we're now generating cash. As we go forward into next year and the year after, we're going to start to see hundreds of millions of dollars of cash accumulate on the balance sheet.
Like I mentioned, it's one of the better profiles in SMid-cap biotech in an environment like this. I think this is one that people are finally starting to take notice of how well you guys have been doing. Congrats on all the success, and we're looking forward to seeing the updates later this year.
Thanks very much, Jon. Appreciate it.
Thank you.
Thanks, John. Thanks, Nick.