BioCryst Pharmaceuticals, Inc. (BCRX) Earnings Call Transcript & Summary

Good morning, everyone. My name is Gena Wang. I'm SMID Cap Biotech Analyst at Barclays. Welcome to our Second Virtual Global Healthcare Conference. First, I wish everyone to stay healthy. And I would like to thank all the participants, investors, companies and especially our event team and the corporate access team who made this virtual health care conference possible. With that, I would like to introduce our first presenter for the day, Jon Stonehouse, Chief Executive Officer from BioCryst. Jon, I hand over for the opening remarks.

Thank you, Gena. Let me share my screen, get it in the presentation mode. Good morning, everyone. Gena, thank you for the introduction and the invitation to your health care conference. It's great to be with you. I'd rather be with you in Miami, but virtual will do for now. So I'm going to go over a few slides in introduction, and then the rest of my team will join Gena for a fireside chat. I'll be making some forward-looking statements. Those statements have risks. The risk factors can be found on our website. So our goal or our aim is to deliver extraordinary and empower ordinary. And that's based on a strategy that we have at BioCryst of bringing novel oral medicines to patients suffering from rare diseases. The delivering extraordinary is that to be able to bring oral medicines to diseases like HAE, and PNH and C3G, you've got to be able to not only have a potent enzyme blocker, but it has to be specific to that enzyme. And these enzymes are part of much larger families, in some cases, 300, 400 other similar enzymes in the family in the human genome. So that's the real challenge, and that's extraordinary feat that our discovery team does through our structure-based drug design capability. And then we believe that by bringing forward oral medicines to patients with rare diseases, that we are able to give these patients something much more than just an incremental improvement in convenience in their therapy, but a shot at a normal life, an ordinary life, something the rest of us take for granted. Because there's a significant burden with injectable therapy, and we've seen this in HAE and we're also starting to hear from patients suffering from complement-mediated diseases as well. So the result of that strategy is an extremely full pipeline. And very exciting time here at BioCryst, with a number of filings and now approvals and launches with our lead program, ORLADEYO, a once-a-day capsule for HAE. And then behind that, a really exciting program, our oral Factor D inhibitor, BCX9930, for complement-mediated diseases. And the first indication that we're pursuing is PNH, but there -- it's a pipeline in a molecule. So it's almost like having several molecules that we can pursue in parallel, but yet with efficiencies because you only have to do one tox program, one CMC program and the like. So it's a really unique opportunity, and we think could create incredible value for the company. And then behind that, an earlier-stage program with an oral ALK-2 inhibitor, BCX9254 are really difficult disease called FOP that affects children. And then our discovery team continues to work on other exciting targets to bring more oral drugs forward for patients suffering from rare disease. So as I said, ORLADEYO is being launched in the U.S., starting on the fourth of December. We got the PDUFA -- or got our approval on our PDUFA date on December 3, and we were out calling on customers on December 4. And so far, we're really pleased with how the launch is going. The -- Charlie, I'm sure we'll answer more questions in detail from Gena on that topic in the fireside chat. But we're off to a good start. There appears to be a decent amount of pent-up demand. And we believe that we've got a drug that works and that patients want, and that's always a good situation to be in when you're going through a launch. And our company is changing and transforming, and you're going to see a steady drumbeat of news flow coming out of our company. That started in the fourth quarter of last year and will continue through the entire year 2021 with our R&D Day on March 22, where we'll be sharing additional data on 9930. But then approval decisions in Europe, reporting out our first full quarter of revenue in the U.S. in our Q1 earnings; launches in Japan with ORLADEYO, Germany and other parts of Europe; and then continuing to advance our pipeline. So really exciting time and a huge transformation for the company. The other thing that's really changed in our company is our cash position. The deal that we did at the end of last year where we brought in access to $325 million in capital from a royalty deal with Royalty Pharma and a debt deal with Athyrium puts us in a position where we can now execute our plan rather than worrying about the next major milestone and how we're going to raise money off of that. So -- and then when you combine that with the ability to generate revenue with ORLADEYO, we're in as good a financial position as we have ever been in the company's history. So before I open it up to the fireside chat with Gena and the rest of the team, I just wanted to highlight a lot of attention is going towards ORLADEYO with the launch in the U.S., but I want to highlight BCX9930. As I've mentioned before, we're really excited about this program because of the broad application across multiple indications for complement-mediated diseases. And we have an upcoming data readout that I want to remind investors about, and that's the readout of our PNH Phase I dose-ranging study, where we'll now have a total of 16 patients' worth of data. To date, we've only showed new 4 patients' worth of data. Some of these patients will have been treated up to nearly a year. And we're going to have both treatment-naive patients and patients that have been poor responders to C5 inhibitors. And we're going to look at data at the higher doses of 400 and 500 milligrams BID, upwards of 8 weeks or greater. And so strongly encourage you to participate in our R&D Day on March 22 because we're really excited about sharing the data and also spending time talking to physicians and patients about the challenges of dealing with PNH and nephrology diseases related to complement. So that's my remarks. And now I'd ask the team to come back, and Gena, and we can get into the Q&A session. Let me just introduce who from the team is joining me. So we've got John Bluth, our Chief Communications Officer; Charlie Gayer, our Chief Commercial Officer; Bill Sheridan, our Chief Medical Officer; and Megan Sniecinski, our Chief Business Officer. So Gena, I'll turn it back to you.

Thank you, Jon Thank you for a great introduction, overview of the company. So maybe I will start with ORLADEYO's launch and starting with U.S. So wondering if you can give a little bit more color regarding the initial patient like what is the breakdown between naive patient versus switcher from the subcu population?

Charlie, do you want to take that?

Sure. Yes. Thanks, Gena. So as Jon said, we're experiencing a lot of pent-up demand, so we're -- the launch is going well. And thus far, this is what we expected and we're really pleased to see it, but about 50% of the patients are coming from switches from injectable prophy. And then the other 50% are patients who were previously on acute only and are now stepping up to prophy. So we're really pleased to see that. And -- because that's what we saw in our market research.

And then what is the patient characteristics for these switches?

So the characteristics, I think the fact that a lot of the patients are switching from prophy means that there -- we're seeing patients from all different types. And that's one of the things that we saw in our clinical trials. There's no phenotype for patients that respond to ORLADEYO. All patients and all different types do well on this product.

Gena, I'd that -- I'd just add one other thing, which is these are patients that are largely pretty well controlled on their prophy therapy, right? So it's not because of lack of efficacy that they're coming to our drug, they want more. And this burden of therapy is a really big deal. And so we're seeing that with the patients that are going on our therapy in the early days.

Yes. So I think that's what I'm asking, like in terms of -- is there any particular population like older or certainly -- it's not related to the disease more like the age or other characteristics that you can identify?

No, no. It's patients with HAE. It looks like all of them.

Yes. And I believe everyone has -- like maybe that's irrelevant to the age or whatever, it's -- yes, it's about what you consider as a burden.

That's right.

Yes. Okay. And then the other part is the compliance. I know it's very short. And then you may not have enough data. But so far, how is the patient compliance look like? I'm not sure how much data you can collect, usually it's what we've seen. And here, I don't know if you have a real word experience, like how is the compliance ongoing there?

Yes. Well, like you said, it is early. We're just a few months in here. But we're not seeing anything unexpected. We saw great compliance in our clinical trials. And the early read is where patients have great compliance. So...

Okay. And then the other part is regarding the safety, and I recall, we have some safety that could confuse the symptom from the actual toxicity. And then how does that look like in the real world now?

So far looking good, nothing unexpected. We're really pleased with our product label. And anything we see is kind of consistent with the product label. There's nothing major there. So patients are generally having a really good experience early on.

Bill, anything you want to add to that?

No, we're really happy with the label, and with the safety profile and the efficacy profile that drove the label. So this is everything we learned in the clinical program is that this is an important drug for patients with HAE, and that's what's going to happen in the market place.

Okay. And then last component for the U.S. part is the payer part. Any feedback or pushback from the payers? Any additional color? And then if you can give a little bit more color with how many payers or life insured that you already signed agreement.

Sure. What I'll say is the early payer feedback has been good. The whole payer -- getting access is a process. But ORLADEYO is the lowest priced prophy on the market. So the feedback from that with payers has been very positive. We've had success thus far getting ORLADEYO on policy in quite a number of plans. But like I said, it's a process that will continue. We expect acceleration with major plans in the next quarter. And then year-long as new patients come on, we'll continue to work on it, but it's going well.

Will you be able to share some additional color on in terms of [ start form or those ] in the coming quarters?

I'll take that one, Charlie. So the guidance we've given Gena is we're not giving guidance, number one. And what we'll report out in the first quarter is if our sales are at or above expectations, you'll get revenue. If they aren't, we'll give more to explain what's going on so people have a better idea of how things are going.

Okay. Okay. And then where do you see the major driver, say, for the next quarters? Is from the acute converted to prophy? Or is it e switcher? Or the [indiscernible]?

So our sales efforts and our marketing efforts are just really filling the funnel now. As Jon mentioned, we've got that pent-up demand. So what I'd expect is we'll continue to see the same thing. We're going to have patients coming from prophy switches and patients coming from acute, particularly as more patients are able to get in and see their positions. And that's what we're really trying to drive, that physician-patient conversation.

And I'm really impressed with the sales and marketing team that Charlie has brought into the company. I mean they're off to a great start. They're really focusing on the top prescribing clinics and physicians at this point in time. There's a whole plan over the course of the year to expand out more broadly, but really, really impressed with this team and the start that they've gotten off to.

Okay. And then switching gear to Europe, how is the launch there?

Charlie, do you want to take that?

Yes. Certainly. So the team is ready. We got our CHMP positive opinion at the end of February. And so our first launch will be in Germany in Q2. And just like the U.S., we hired a really experienced rare disease team. The difference in Europe is that the centers are really concentrated. You can have literally hundreds of patients under treatment at a given center. So it's a very efficient team, and they're ready to go. And then in some of the other major markets, we have early access programs underway that will help drive the launch as well.

Okay. And then Europe market is predominantly acute. So what efforts are being taken -- undertaken there potentially transform the market to prophy treatment? And I understand Takhzyro just launched, maybe they will also help. If the way -- but what additional effort you will do?

Yes. I think you're right. I think the availability of new targeted prophy therapies really makes a difference. And so what we see is in all the work we're doing with physicians and with patients that there's pent-up demand there as well. And there's a readiness to switch to prophy now that new options are coming. And particularly an oral once daily is very attractive to the market. And so we expect, in the future, use of prophy will start to look more and more like it does in the U.S. 60% of the patients in the U.S. are on prophy today and that's still growing, and we expect the same trends to happen in the coming years in Europe.

Okay. And the one question -- so like with all the sales, of course build-out, how is the burn will look like? What will be the expectation? How much the burn for the for the sales force, just launched in Feb, how much there will be?

Yes. We have -- we've said that the sales force started around the middle of the year, so in the summer. So in terms of its impact on the last year's burn, it's probably more like 50% of the normal run rate. And then Europe was building up around the same time and will build up even more over the course of this year. So what we've said publicly is that kind of the normal run rate going forward for both U.S. and Europe is between $50 million and $70 million.

Okay. Okay. Very helpful. So that's very good. And in Europe regarding the pricing compared to the U.S., how that will look like.

Well, so European prices are always a little bit lower than the U.S., but I think some of that's starting to change. So if you look at the Takhzyro price, in Europe, now in dollars it's about $350,000, $360,000 compared to $590,000 -- about $590,000 in the U.S. So it's lower, but it's still very favorable pricing and a great opportunity for ORLADEYO. We've got all of our market access processes underway. All the different dossiers have been submitted, and that's going well.

So will you also be doing similar proportion like Takhzyro in Europe? If we think about the discount that you quoted, like would that be similar applied to...

I think it's a reasonable guide. You can never say for sure because each market is a different process. And it's a very different pricing dynamic than the U.S., but I think that's a reasonable guide to start.

Okay. Okay. Good. Okay now switch gear to Factor D.

Gena, can we just touch on Japan really quickly because it's also a really important market?

Yes, sure. Of course. Yes, of course.

Megan, would you just give a quick update?

Sure. So with Japan, we're eager to be launching we said in the second quarter. So with our January approval, we just need to complete pricing negotiations. But our partner, Torii, there is extremely excited to be bringing the first prophy treatment to the patients in Japan. So similar to Europe, we're ready to go and just waiting for the second quarter.

Okay. That's good. So when do you think there will be like a meaningful revenue contribution from Japan?

Well, certainly, Torii will be ready to launch after the pricing is completed. And for the first year, there's sort of a different pattern of prescribing where the patients have to go in and visit every few weeks. But for us, with a market that has a prevalence of about 2,500 patients and 500 patients identified now in the first treatment, we see a real opportunity for Torii to build this market over the coming years. So for us, it's just an amazing opportunity. And with our deal that we entered into, we get to share in their success with royalties from up -- 20%, upwards of 40% based on a cured net revenues. So for us, it represents a real opportunity for the business.

Yes. So like -- well, later this year, let's say, 3Q, 4Q, should we expect some revenue -- some meaningful revenue start to contribute?

Yes. My guidance there would be -- I wouldn't put a whole lot in until we see how things progress. It's such a different market, Gena, where it's a find the patient market. That I think we've got to get a couple of quarters under our belt first before we can really tell you what to expect.

Okay. That's fair. And actually, Charlie, I wanted to ask the Europe market, what is the -- when should we expect meaningful revenue contribution?

I think the beauty in Europe is with Germany launching, we can get out of the gates right away. So we'll see some revenue this year, but I think it's the same thing as we look at -- we've got to get a few quarters in each until we get any kind of a perspective on what to expect going forward. But we're positive about the opportunity in Europe.

Okay. Great. Now switching gear to Factor D. So Jon, you said March 22 R&D Day, you will share some data. Maybe just high level, what would you be consider as a win for both treatment-naive PNH population and inadequate population -- responders?

Yes. Let me start, Bill, and then I'll pass it to you with what to look for in the data. I mean our goal is really simple. We want to have monotherapy for PNH patients, in all of them, right? So it doesn't matter if you've never been on a C5 inhibitor. If you've been on a C5 inhibitor and you're not getting the response you want; or your controlled, but you have a burden of therapy with your injections or infusions and you want to switch to an oral, we want all of them. And so what -- so really, the way investors and how we look at it is what's the control that's necessary to be able to get people to switch and go on to our drug and achieve that goal. And I'll turn it over to Bill on what data we'll look at.

So Gena, I think the first thing I would say is we're really excited about the data we showed already last year. And in general, with more patients, longer follow-up and the addition of C5 inhibitor inadequate responder patients. If we see similar data, that's a win, right? So that's the simplest way to think about it. When we talk to the hematologists and also the patient advocates with PNH, they tell us that the goals here are reduce the transfusions, if possible avoid transfusions altogether of red cells, because that's a big burden and nobody wants to have a red cell transfusion. In order to achieve that, relieve the anemia so that [ hemo level ] coming up compared to what it was before. And there are a whole bunch of biomarkers. You can also measure that indicate that your drug is working as advertised in controlling hemolysis, things like improving the reticulocyte count, getting it back to the normal range and so on. But at the end of the day, improving the transfusion burden and relieving the anemia leads to relief of symptoms in the disease. And longer term, maintaining that control. So that's on the efficacy front. On the safety front, of course, we now have a lot more experience with the drug. Patients are coming up to almost a year from when we started the study. And the most important safety parameters has anybody discontinued the drug because of an adverse event and had there been any significant safety signals. So that's the sort of way I think about it for evaluation of this as a win. Importantly, this is a Phase I dose-ranging study, and a big goal here for us is pick a dose to move straight into pivotal trials. So that we're very confident of that. And later this year, we look forward to starting those pivotal studies.

Okay. So regarding the dose, is it possible to move to QD or it will be -- likely be IV?

The PK profile of this drug supports twice daily dosing. PNH is almost a unique disease and it's very important to maintain high drug levels to try to prevent breakthrough hemolysis because -- and then people aren't perfect, occasionally they'll forget to take a dose. So if we spread the dosing out to once a day, that missing a dose becomes more problematic. So it might be possible to dose the drug once-a-day. In other indications, we don't know that yet. But in PNH, we're very, very happy with the twice a day dosing schedule.

Okay. And then regarding safety, I think are we running out of time, but I do want to ask a safety question. I think although -- can you give a little bit more color on the rash? It seems like investors very focusing on that safety event. So I wanted you to give a little bit more color, any additional -- yes.

So I think that I'm not quite sure why investors are so focused on the rash. It's a tolerability issue that goes away and it's very short term. So what we talked about last year was that in the PNH subjects, those individuals where we saw the rash, there were no dosing interruptions. In fact, according to the protocol, people have the dose increased on day 15, doubled on day 15, and the rash goes away. So this is a short-term tolerability phenomenon, not a safety issue.

Did you continue to see rash across all different doses? And then...

So Gena, we'll give a full report on the March 22. And I think that we're very, very comfortable with the safety profile of the drug.

Okay. Well, thank you very much, the whole team. We are looking forward to the R&D Day a lot more. And I wish you a great launch for the drug and looking forward to our continued discussion. Thank you.

Thanks for having us.

Okay. Bye-bye. Thank you.

Bye.