Hi, everyone. My name is Maury Raycroft . I'm one of the biotech analysts at Jefferies. With great pleasure, I'd like to welcome Helen Thackray, the Chief R&D Officer from BioCryst. Thanks so much for joining us today, Helen.
Thanks very much, Maury.
We're going to do a fireside chat discussion. Maybe to start off, for those who are unfamiliar with BioCryst, if you can set the stage and talk about ORLADEYO and your pipeline.
Yeah, sure. BioCryst is focused on rare disease, and ORLADEYO is in its fifth year of launch for treatment of HAE, prophylaxis of HAE, and growing really well. We are very, very pleased with performance and what it is doing for patients. We have a pipeline as well with two programs in the clinic with milestones, regulatory milestones and trial milestones already this year, and data for both before the end of the year. We are a company with financial strength. We expect to be profitable this year. We have paid down debt already this year, and we are capital markets independent.
Got it. With your lead drug, ORLADEYO, it's been commercial. It's doing really well commercially. First quarter, you guys beat expectations again, and you raised the guidance for the year to $580 million-$600 million versus the prior $535 million-$550 million. Can you talk about the drivers that led to the increased guidance, and what are some of the key variables that investors should consider when determining whether you're going to hit the upper or lower end of guidance this year?
Yeah, so drivers demand. There is strong demand for ORLADEYO amongst patients and with physicians wanting to give it to their patients. For first quarter, also getting patients to paid therapy. In particular, the Medicare population, but also commercial population, getting to paid therapy was a big driver. In terms of variables going forward for the rest of the year, if we have continued strong growth and keep maintaining that paid rate, then we are going to see similar performance this year.
Got it. OK, makes sense. I also wanted to ask just about thinking about the expansion of the opportunity. You guys have talked about the pediatric opportunity, and FDA has accepted the supplemental NDA with priority review. You've got a PDUFA scheduled for September 12 of this year. Wondering what data you included in the data package, and do you expect FDA to ask for longer-term data. Have you gotten any feedback from FDA and also payers as well?
We have had the NDA accepted, as you said. We have a PDUFA date mid-September and priority review. The data package is the data that's needed to extend what we know for adolescents and adults into the pediatric population. Safety and PK, as well as we have data on attack rate that's submitted. This is to meet the pediatric requirements. It is fairly straightforward to submit a data set like that and have it reviewed by the regulators.
Got it. OK, so wouldn't expect any surprises as it stands there based on some of the conversations. Same thing with payers as well. They'll be on board with this population of patients with pediatric.
We certainly hope so.
Yeah. OK. Wanted to dive into the pipeline where you do have two data updates later this year where there's a lot of interest. You've got Netherton syndrome and DME. Maybe starting with Netherton syndrome, just remind us what the mechanism of action is for 17725 and what data that you've seen so far that supports your confidence in pursuing this indication.
17725 is a KLK5 inhibitor. We're pursuing this for treatment of Netherton syndrome, as you said. In terms of the mechanism, the data is this is a genetic disorder, and it is actually pretty clear. A faulty gene leads to faulty protein function, which leads to no control of KLK5. The missing piece is a KLK5 inhibition. That is now in the clinic. It's in the clinic for evaluation. We've had healthy volunteer evaluation so far and expecting to go into patients.
Got it. We have seen a few prior attempts for targeting KLK5 for Netherton. Maybe talk about those approaches where we have not seen a lot of success. How does your drug differentiate versus these prior attempts, as well as the current competitors as well?
This is an opportunity to inhibit at the top of the cascade. It's talking about KLK5 as the target for this drug. There have been other programs that have looked at KLKs, KLK5 and others. There are also other programs that have looked at some of the inflammatory cytokines and the programs that look at topical therapy. For this disease, we believe that systemic therapy is appropriate in order to be able to get exposure throughout the body. It's a disease of, it's a severe skin disease, and it affects the skin body-wide. You really need to be able to get something that is going to treat the whole person. It also is a disease where KLK5 is the driver, as I've said, but it activates subsequent kallikreins, and it also activates other inflammatory molecules.
If you stop that cascade at KLK5 with inhibition there, you would see then this is what we expect. You do not need to stop anything further down the cascade because it will have been stopped at that top of the cascade. It is really KLK5 inhibition. One more piece I will add, and that is for our program, this is a very potent drug. It also has very high affinity, which means that it sticks to target and it sticks for the life of the target being in the skin. That means we can give a dose, we think, every two weeks in order to give that effect of KLK5 inhibition throughout the turnover of the skin. This would be a subcutaneous dose of a potent medicine about every two weeks.
Have you disclosed the half-life for what it is yet?
I don't believe we have. Here, what may be more relevant is the skin turnover. With the high affinity and the drug sticks to that KLK5 target, the skin is going to turn over about every two weeks. That means you shed, and you would want to dose again about every two weeks.
Got it. OK, makes sense. In the initial clinical experience, wondering if there's anything you can comment on and what you're seeing there. I think in the past, we've talked about whether you're seeing ADAs or any GI or respiratory tox. Is there anything else you're focused on as it relates to safety?
We have not seen anything that we have specifically disclosed, but what we have seen so far in the healthy volunteers is sufficient information, supportive data to allow us to move forward into patients. You could expect that we have been looking at PK. We have been looking at safety. I do not have any data today on ADA, but we have what we need in order to be able to dose patients more than once.
Got it. What can you say about the PK? Is it tracking so far with your expectations? You disclosed you're going to start dosing at six mg sub-Q. How many more dose levels do you expect to explore in Netherton patients?
What we have is PK in healthy volunteers looking at plasma exposure. It's in line with what we expected it to be, which allows us to move forward into patients, as I said. We're dosing in patients at six mg per kg as the preliminary dose, and we'll have three doses over four weeks for those first patients. The difference in healthy volunteers and patients is that what matters is going to be exposure in the skin, which is where the target KLK5 is. We can't measure that in healthy volunteers because KLK5 is not active. The drug won't bind to it. In patients, we'll be able to measure that. We'll be looking for PK as measured by the presence of the drug in the skin in patients.
Got it. OK, makes sense. How often are you measuring drug activity with KLK5 suppression, and how long do you need to follow the patients to understand the healing effect with biomarker IgA or IASA measures?
In order to measure the drug in the skin, we have to have samples of the skin. We are doing a skin biopsy, and we are also doing an assessment of skin as it sort of sheds. There is something called skin taping. That will be done at baseline, and then we will do a skin biopsy at least once, and then the skin taping multiple times after. We will have several different time points to look at drug in the skin. In terms of what else we will see this year, we are looking at the outcomes in the clinical sense, meaning we are looking for how the skin improves. We are looking at scaling, and is it decreasing? We are looking at redness. Is that improving? We are looking at itching. Is that improving? It will be a physician score measuring the quality of the skin, the scaling, and itching.
It'll be a patient score also on how much does it itch.
Got it. For the skin biopsies, in your initial data update, is there more you can say on just how frequently you're getting those biopsies? I'm guessing at baseline, and then how many times?
One additional skin biopsy. We'll be following patients for a number of weeks. We'll be following in the part three part of our study. We'll be dosing for four weeks and then following for about another two months after that. We'll have periodic looks at the skin through the skin taping. It's like putting a piece of tape on the skin and taking off a few cells. The skin biopsy is more invasive, so we'll just do that once after dosing.
Got it. Makes sense. Anything else you're looking for just based on blood biomarkers that are downstream from the KLK5 pathway?
We will look at in the skin, we'll look at PD markers, and that would be downstream activity from the enzyme activity from KLK5. What I'm most interested in here is looking at the skin outcomes, what you can actually see in the skin, and then matching it back to what we see on PK exposure in the skin and on that PD activity in the skin. Because it's going to be what do we see visually on our observation of the skin that really matters and tells us if we're at a dose that is having the effect we want to see.
Got it. These patients, maybe talk about just the amount of surface area that's affected by the disease.
This is a disease that affects head to toe. One of the diagnostic findings of the disease is something called bamboo hair. It affects the head as well. The bamboo hair, just, it's the term describing how it looks under the microscope, is sort of broken in pieces. It's head to toe. It's the entire surface area. There can be some patches of skin that are worse than others, but patients generally exhibit this body-wide, unlike some of the other skin diseases.
Got it. Just based on how quickly you think you'd be able to detect some improvement in skin based on some of the accepted measures, I guess, how do you think about just the rate of improvement and benefit for patients?
Number one, I don't know. Number two, with the rapid turnover in skin in patients with this disease, about every two weeks, it may be fairly quickly that we see a response. We'll be looking at four weeks, eight weeks, 12 weeks. What we know in the field is that there's been recent testing of a topical serum protease inhibitor in patients with Netherton syndrome and a response seen relatively quickly, I think, in under six weeks. We may see it that fast as well.
Got it. Maybe talk more about the study design and just the rationale behind the phase one design. Why did you pick the four-week treatment in part three and 12-week treatment in part four? Do you expect to roll over part three patients into part four?
The study is designed so that we can get an incremental look first in a few patients. Our target with the patients is to understand, one, is the drug getting to the skin in the quantity that we want it to do? Two, are we seeing healing in the skin as a result? Four weeks of treatment will give us an opportunity to look at both of those and a glimpse. We'll get, is this drug getting to the skin? Is it starting to heal? What we need to know is, are we at the right dose? If we see skin healing with four weeks, then we know we're at the right dose or close to it.
If we don't, then we'll go up in dose to take the data that we have from skin penetration, but also dose up to be able to get to effect what we see in the skin. We may need to dose up before we get to the 12-week portion in part four of the study. If we do, then we'll dose up. Part four, our goal is to confirm that we're seeing the findings in the skin, how long they last, and confirm the dose. What would happen next is that we may then move to a pivotal program or confirmatory trial.
Got it. For patients that roll over, I guess, would patients roll over from part three to part four?
Yeah. Patients can complete part three and then be eligible for part four. It's not quite a roll over, but they could still participate in part four, yes. This is an ultra-rare disease, so every patient matters in your clinical trial program. It's relatively short-term to see something in the skin. We would have patients available to go into the next study.
Got it. For an approvable endpoint for how long you think you would need to treat patients and see improvement, what are your thoughts on that and what do you see that duration would have to be?
Yeah. We'll have to have that conversation with the FDA and regulatory agencies, of course. I expect that we'll be seeing it within a month or two. It may improve over time as well. As we treat and inhibit KLK5 at the top of that cascade I was describing, we would expect to see the inflammatory markers further down the cascade start to respond. That may take a little more time. We may see some skin change and less scaling of the skin, but the deeper inflammation could take longer. For how long you need to study for a pivotal program, I don't know, but I would imagine it's at least a few months. Typically, the agency wants to see six or 12 months data, so it'd be somewhere in that time frame.
Got it. For the phase one, just in deciding whether to move forward to a pivotal, what do you want to see for biomarker and clinical healing data by the end of this year? I guess, what's your expectation, and is there a good benchmark out there for reference?
Yeah. We are looking for a really big change. This is a targeted treatment, potent drug, a disease with no targeted therapies available and a very severe disease. We are looking for a dramatic difference. What I would want to see is improvement in the skin and match it with what we are seeing in the PK/PD in the skin in order to then inform moving to a pivotal program. If we do not see that this year, we will dose up, as I said, until we do. The information that we are looking for then is, are we at a dose? With that dose, are we seeing that dramatic change in the skin with healing?
Got it. A lot of Netherton syndrome patients are infants and young children. What safety and efficacy data must be seen in this population to de-risk the program?
This gives us an opportunity to include pediatric patients earlier in the program. We don't have to wait until registration. With a biologic therapy, where the class is generally safer, it means that we may have an opportunity to dose down in age as part of our development program and to include in our registration data set. We'll need to have PK data so we can judge the exposure that we need. If the dose has to decrease, we'll also need to have some exposure and safety in adolescents and adults before we go lower in age. We may be able to dose down to age 6 or so in this program, in part of the development program, before we eventually go for registration.
Got it. You have the data at the end of this year. Would you meet with FDA after that then to decide on what a pivotal would look like and then potentially start that pivotal study next year?
Yeah. I would expect a next step with FDA would be to bring the data that we obtain in this study and then have a conversation about the path to registration.
Got it. OK. Have you guys said if you're going to start the study next year? I don't think you've disclosed.
A pivotal study?
Yeah, a pivotal study.
We have not. No. It will depend on the data. If we need to dose up and dose range a bit, it will take a little bit longer. If we have hit the dose, which is not usually the case, then we could go sooner.
Got it. OK. For an accelerated approval path here, there's not clear precedent out there from our understanding. What do KOLs want you to do for this type of study?
Yeah. There is no regulatory precedent. There are no targeted drugs, nothing approved yet for Netherton syndrome. That means we have some negotiating to do around the endpoints. It is clear when we talk to physicians that they want to see skin healing. That is what matters to them. In their discussions with patients, what matters to patients. When we have spoken with patients and when I have had that conversation with a patient, they are most concerned about the skin scaling and the itching. I would expect those to be part of our pivotal endpoint. Those are the kinds of scores that we are building in early. We will need to understand with the agency if they agree with that. In terms of accelerated program, this is a severe disease, ultra-rare. We expect a big difference. That is what we will be looking for.
That means it could be a relatively efficient streamlined program. Whether it's accelerated or full approval, that will depend on discussions with the agency.
Are you bookending the number of patients that you could need for a pivotal study at this point, or is it too early?
It's too early. I think we can safely say that it would be relatively fewer than you'd see in other diseases. This is targeted therapy, big difference that I'm looking for, as I said. I would expect it's going to be smaller numbers.
Got it. For enrolling a pivotal study, maybe just talk about some of the challenges there and how that could work within because it's a smaller patient population. What are you doing to plan for enrolling a pivotal study?
Yeah. Ultra-rare populations are always something you have to think about carefully as you want to enroll in a clinical trial. Patients are few and far between. We've been working with a number of sites and experts, and the experts who treat patients and have more than one, several patients. The sites that we're opening are those that have patients already in their patient base and may be relatively straightforward to find those who participate in the trial. It is absolutely necessary to be talking to the investigators, the KOLs, early and be working with the ones who know the disease best. They'll also have the biggest patient base.
Makes sense. Is there a good reference study out there for investors to get a sense of what enrollment timelines could look like?
They're always going to be different. I don't think I can point to a reference study for this.
No.
It is just one more point on that, Maury. This is what we do. We work in rare disease and have for years. We are very familiar with what you need to do to be able to understand with investigators how best to enroll patients in the trial.
Got it. Makes sense. For the market opportunity, you've estimated about 1,600 Netherton patients in the United States based on the bamboo hair phenotype. There may be up to 5,000 patients if we consider a subset with the ichthyosis patients. Based on your research, how big is the Netherton syndrome market in the United States? What percent can 1775 address?
With a targeted therapy, we would expect it to be something that maybe many patients would be interested in. I can't give you a percent, but this would be the opportunity for them to have something that actually treats the source of the disease. In terms of the market size, I mean, it's hard to say. That 1,600 that you mentioned, that's taken from claims data looking at a clinical symptom. It's hard to know how many patients didn't present with that complaint, didn't get tested by their physician, and yet still have the disease. We do expect that the recognized patient population may grow as a targeted therapy becomes available. Physicians do the genetic test and identify that a patient who's perhaps known as having ichthyosis, in fact, has Netherton syndrome as a cause of the ichthyosis.
Got it. Can you talk just a little bit about the spectrum of severity for the disease and what the drivers are there?
Yeah. There is a range of severity. We understand that the most likely patients to be diagnosed are those who are most severe and may spend time in subspecialist office. The reason behind it is the genetic variability. There's a mutation that can be in different places in two genes or a pair of genes that any patient has, and something called a compound heterozygote, which means mutations in different places. You may get different expression of the SPINK5 protein. That translates into patients who may have quite severe disease and patients who may have less severe disease but still look like they have bad eczema. They are seeing a dermatologist but not necessarily tested and identified as having Netherton syndrome.
Are the initial patients that you're going to enroll, are they the compound heterozygotes?
We're looking maybe, and I'm sure it will include some who are. We're not enrolling based on their genetics. We're enrolling based on their skin disease and having had severe and recognizable skin disease.
Got it. OK. That's helpful. For patients that have this, especially kids, they'd likely be on the therapy for their whole life, right? It's a genetic-based disease.
Yes. It would be continuous treatment.
Right. Makes sense. I want to shift gears and talk about, well, actually, one other question too. For 1775, are there other indications you could pursue with the drug?
That's an interesting question that I'm not prepared to answer at this point. KLK5 is expressed in other tissues. The reason we chose Netherton syndrome is because it is solely KLK5 that is the source of the disease. If we are able to demonstrate that this drug is safe, we identify a dose that's effective in Netherton syndrome, then we may move to other diseases as well.
Got it. OK. And for DME with Avoralstat, you've got a lot of experience with Avoralstat, which this drug has lower solubility than ORLADEYO and could be ideal for the supracoroidal approach that you're pursuing in DME. What evidence, either from literature or ideally from clinical kallikrein inhibition experience, gives you confidence in the mechanism of DME?
There is actually a fair amount of evidence. We're looking for the clinical evidence with this program. There is literature that supports that plasma kallikrein is expressed in the fluid inside the eye in a number of patients with DME, in fact, a wide range of patients who are DME. VEGF is also expressed, but not in all of those. There is some overlap between the two, but then also patients who have one or the other. That suggests that VEGF, it actually supports why VEGF inhibitors do not work for all patients and suggests that plasma kallikrein may be an alternative mechanism. There have been some programs that have assessed plasma kallikrein inhibition in the clinic, and they have had some initial results that are really interesting. They are just not sustained. It is more durable exposure at the site of the retina that is probably what is needed.
We think we can bring that with Avoralstat.
That's what you're doing with your approach. You're getting that durable exposure at the retina versus the other approaches, which could have been systemic or.
Yeah. I think there's been oral delivery, and there's been intravitreal delivery. The supracoroidal space is right around the back of the retina. Putting Avoralstat, which is poorly soluble, as you said, in a suspension into the supracoroidal space and allowing it to slowly solubilize over time, that would give, we think, a sustained slow release of the drug, almost like a depot, and deliver exposure right to the retina so that you have sufficient exposure in the right place for the right amount of time for a long duration so that one injection could get to the level of improvement that we want to see in the edema.
Got it. Talk about the preclinical data you have so far, and how does that de-risk translatability to humans in terms of dose, efficacy, and then safety and durability?
We're really excited about the preclinical data because it is so very clear. We have data that's been in some of our presentations on our website showing that supracoroidal dosing with Avoralstat in an animal model and a VEGF-dependent animal model has a fairly rapid and significant decrease in leakage in the retinal vasculature. What that means is in a VEGF model, plasma kallikrein inhibition alone with Avoralstat delivered to the supracoroidal space, the same route that we're talking about in humans, has a clear, definitive reduction in retinal vascular leakage. That is the source of diabetic macular edema, is that leakage in the vasculature. That gives us confidence going forward. We also have data that shows exposure can last past six months with one injection in a similar model.
That puts in a position to go into the clinic then and assess for the same thing. If we give Avoralstat with an injection in the eye in the supracoroidal space, does that one injection have exposure and durability of exposure out to maybe six months? Does it also have that effect that we want to see in retinal thickness, retinal edema, which is easy to measure in the clinic?
Got it. All makes sense. That's a good segue to the clinical study that you're running. Maybe talk a little bit more about the phase one study design. What do you want to see in this study in the first few patients that you show at the end of the year? What's the bar for success, or what do you want to beat there?
We have, and this will be a relatively small study. It's a first look, and it's a small investment. It is looking at nine patients at three different dose levels, so dose escalation, dose ranging. We are looking for safety and tolerability first, but we are also within 4, 8, 12 weeks looking for changes in retinal thickness. That's easy to measure. It's noninvasive. It's just an assessment of the thickness on scan. That thickness, if it starts to change in that 4, 8, 12-week time frame, that tells us we have a drug. It becomes a drug then that we'll want to think about investing more to do further evaluation. This is a first look, a small look, but it'll give us an idea of are we seeing a difference in the retinal thickness.
Got it. How many time points will you be assessing that then?
Pretty regularly, about once a month. Actually, we have the opportunity to assess for a number of different months. If we start to see something, we'll continue watching and then think about our next trial.
Got it. Maybe just going back to kind of the financials and operations, you guys paid down $75 million in Pharmakon debt this year, and you expect to be EPS positive this year. Can you remind just on what the cash position is and talk about what else you guys could do, having a strong balance sheet potentially on the BD front?
Yeah. We expect to be net income and cash flow positive this year. Cash at the end of Q1 was $317 million. Now it's about $240 million. Debt remaining, since we've had the ability to pay some down, is $249 million. Our plan would be to continue to pay down debt, clean up the balance sheet, get us into a sound financial position, and then continue to invest in our pipeline, both internal and perhaps through BD external.
Got it. For the two pipeline data updates later this year, are they going to happen at different times, at the same time? Any more clarity or granularity on the timing for these events?
I can't say that. I think by the end of the year, we'll have both.
Got it. OK. Helen, thanks so much for joining us today.
Thank you, Maury.