BIOCRYST PHARMACEUTICALS INC Q3 FY2024 earnings call

ORLADEYO Performance - ORLADEYO had $116.3 million in global revenue with nearly 36% year-over-year growth in year four. Added 67 new US prescribers in the quarter. Improved paid rate to 74.8% compared to a 2% drop in the third quarter last year. Commercial paid rate held steady at 82% and Medicare rate ticked up 3% to 55%. Presented real-world evidence at ACAAI conference showing significant attack reductions and high patient retention. ### Pediatric Program - Enrollment in the APeX-P study completed, and observations for the primary outcome (evaluation of drug exposure in young patients) are done. The Phase 4 APeX-T study on transition is opened to collect data on switching. ### Pipeline Advances - BCX17725 for Netherton syndrome advanced into the clinic. APhase I healthy volunteer study for BCX17725 was initiated. Avoralstat for diabetic macular edema (DME) plans to initiate first study in patients with DME in 2025, aiming for steady exposure to the retina to reduce macular edema and improve visual acuity.

ORLADEYO generated global revenue of $116.3 million in the third quarter, with nearly 36% year-over-year growth. Of this, $103.1 million came from US sales and $13.2 million (11.3%) from ex-US sales. Year-to-date ORLADEYO revenue is $313.5 million, and past 12 months' ORLADEYO revenues exceed $404 million.

Revenue Guidance - 2024 ORLADEYO revenue guidance adjusted to $430 million to $435 million. ### Cash Flow and EPS - Expect later next year to see sustainably positive quarterly cash flow. Approaching quarterly EPS positivity in the second half of 2025 and full-year positivity in 2026. ### RAPIVAB Revenue - Expect significant near-term revenues for RAPIVAB. API orders for Southeast Asia partners in Q4 total almost $7 million. New five-year $69 million US government stockpile contract for RAPIVAB, with shipment of significant portion of first option likely in late Q4 or first half of 2025, revenue associated with that shipment at $10 million and remaining $4 million likely later in first half of 2025. Conservatively, RAPIVAB full-year revenue expected at around $13 million, total company revenue in range of $443 million to $448 million. ### OpEx Guidance - OpEx guided at between $380 million and $390 million, driven by increased cost of goods sold related to RAPIVAB sales, increased variable costs related to ORLADEYO's strong revenue performance, and seasonally booked expenses in Q4.

Medicare Impact - Uncertainty around Medicare patients' paid status and the effect of the IRA and MAX $2,000 out-of-pocket on revenue. ### Competition - Potential impact of new injectable prophy therapies launching in 2025 on the switch opportunity for ORLADEYO.

Q: On patient growth for ORLADEYO, out of the prophy experience switch patient population, patients moving to prophy from on-demand and those naive to treatment. Can you talk a little bit more about which you think will drive more growth in the near-term and maybe which population represents a long-term opportunity? And then also thinking about your guidance of approaching quarterly positive EPS and positive cash flows in the second half of '25. Can you just help provide a little bit more framework on how you're thinking about capital allocation and spend management, especially as your pipeline begins to enter the clinic?

A: Charlie Gayer said there's a really even split between prophy switches and patients moving from acute-only to ORLADEYO currently, and over the longer-term, prophy switch will drive a larger portion. Anthony Doyle said focus will remain on continuing to secure additional growth for ORLADEYO, funding advancement of Netherton syndrome and DME trials, and advancing early phase pipeline, with expectation of margin accretion and reaching EPS and cash flow positivity.

Q: On Netherton. You've now guided to presenting some initial data next year. What exactly should we be expecting to see? And what kind of data are you looking for? Is it biomarker data? Is it signs of efficacy? Are you just looking for any kind of signal of activity, as well as safety. It would be helpful to kind of frame that expectation -- and then just to clarify, as far as OpEx goes, how should we be thinking about that heading into next year? You are investing into moving other programs into clinic and so relative to where you end this year, just directionally, how should we be thinking about OpEx?

A: Helen Thackray said on Netherton syndrome program, they'll be looking for penetration of skin exposure at the site of the target, markers of activity in the skin, and recovery in the skin. Anthony Doyle said quarters one, two and three relatively consistent in OpEx, Q4 seasonally increased, and going into next year, revenue growth will significantly outpace OpEx growth.

Q: Your 2024 ORLADEYO revenue guidance suggests a slight slowdown in quarter-over-quarter sales growth for fourth quarter. I'm just wondering if that just reflects less expected benefit from the paid drug uptick that you saw in third quarter or anything else embedded in there? And then secondarily, just looking at 2025 consensus numbers, those do suggest a slight slowdown in the quarterly ORLADEYO sales growth rate as well. And I realize it is too early for specific guidance for next year, but just wondering if there's anything we should be thinking about that you may be observing or respecting with respect to demand or gross to net trends that might support this expectation, as we get into next year?

A: Charlie Gayer said Q4 paid rate slows down as new patients are harder to get approved for paid therapy at year-end and holidays affect, but next year should be a very good year with continued demand and patient switching. Jon Stonehouse restated 20% compound annual growth rate through 2029.

Q: For the 67 new US prescribers added this quarter, was that better than expected or as expected? And can you say how many of them are from Tier 1 versus Tier 2 and how this could contribute fourth quarter and going forward?

A: Charlie Gayer said 67 new prescribers was in-line with the average of about 62 new prescribers per quarter in the last eight quarters, with an even split between Tier 1 and Tier 2 physicians and expected to continue.

Q: What are some of your expectations for what the results could show in respect to switching dynamics in the Phase IV study? And what are some of the strategies for how you will leverage those data?

A: Helen Thackray said the Phase 4 study is an observational study looking at how physicians manage the transition, including how they transition the patient and how patients do after switching to ORLADEYO, and will use the data to describe the experience for physicians less experienced with managing such transitions.

Q: First for Charlie, a quick follow-up. As we think about these clinician additions for 2025, can you talk about your goals and potential additions for next year, just specific numbers around how many clinicians you aim to kind of add on. And then the next question is also for next year, what are your expectations in terms of the transition to paid just because we've seen such nice progress this year? And then last for Helen, can you speak further to this transition study. With these results, who you trying to target? Is it more for community clinicians? Or is it just to give more feedback for patients that are thinking about switching?

A: Charlie Gayer said goal is to continue the same progress in adding new physicians, with focus on Tier 1 and Tier 2 physicians. Expect continued progress towards 85% paid rate with Medicare being a wild card. Helen Thackray said the transition study is to capture the real-world experience of physician management of transition and use it to inform physicians less experienced with such transitions.

Q: Can you talk a little bit more about your transition away from free drug on to commercial sort of the shape of that when we should get to that 85%. And then also how to think about the first quarter, I know that's been a little lumpy, especially with the unknowns around the Medicare portion of that? Have you sorted through that, if you could give us any color, that would be great?

A: Charlie Gayer said 85% is a long-term goal with good progress, but Medicare patients' paid status is a wild card. Jon Stonehouse said in the first quarter, they'll have a better sense of Medicare coverage.

Q: I have two questions. Maybe just follow up Liisa question. First question, also noncommercial setting. So I know there's not too much you can do, but if there is unfavorable to you, what could be actual steps you can do regarding try to get additional improvement regarding the revenue and maybe also from the commercial side to reach the total $800 million revenue guidance in the US? And the second question is regarding your new assets. So the question for the 7725 Phase I data in 2025. How would you -- do you need to do a biopsy the skin biopsy and to measure the protein expression. And I think that the heating part seems pretty straightforward. And then regarding the biomarker, could you give a little more color regarding what kind of protein expression you are looking for? And how do you measure that?

A: Charlie Gayer said they do what they can to help patients get ready for paid therapy but much is outside of control, working with patient associations. Helen Thackray said for BCX17725 Phase I data in 2025, they'll look for skin biopsy to demonstrate drug penetration and binding to target, and downstream cytokine release as biomarkers.

Q: Good morning and thanks for squeezing me in. I guess two for Charlie. The first one on patient adds. I think on Slide 8 where you lay out the path to get to $800 million in sales you assume an annual rate of 200 new patients. Just curious where you are tracking relative to that target given that you said that the rate is currently 14% or 15% above where you were 12 months ago? And then secondly, on the competition front, I know one of the prophylactics was delayed a little bit recently, but I think we should assume one or two new approvals on the prophy front in 2025. How do you think about the -- that could impact the switch opportunity for ORLADEYO once they're approved?

A: Charlie Gayer said they are on track with patient adds. Regarding competition, new injectable pro fees will compete with existing injectables, but ORLADEYO's once-daily oral form creates an opportunity as it's more differentiated, and they are ready for new competition in 2025