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

Good day, and welcome to the BioCryst conference call. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to John Bluth at BioCryst. Please go ahead.

Thank you. Good morning, and thanks for joining our call this morning. A press release issued earlier today is available on our website and participating with me today on the conference call are CEO, Jon Stonehouse; CFO, Anthony Doyle; Chief Commercial Officer, Charlie Gayer; Chief R&D Officer, Dr. Helen Thackary; Chief Medical Officer, Dr. Ryan Arnold; and Chief Development Officer, Dr. Bill Sheridan. Following our remarks, we'll answer your questions. Before we begin, please note that today's conference call will contain forward-looking statements, including those statements regarding future results, unaudited and forward-looking financial information as well as the company's future performance and/or achievements. These statements are subject to unknown risks and uncertainties, which may cause our actual results, performance or achievements to be materially different from any future results or performance expressed or implied in this presentation. You should not place undue reliance on these forward-looking statements. For additional information, including a detailed discussion of our risk factors, please refer to the company's documents filed with the Securities and Exchange Commission, which can be accessed on our website. I'd now like to turn the call over to Jon Stonehouse.

Thanks, John. As you saw in our press release this morning, we've made the decision to discontinue development of BCX9930 and focus on our oral potentially once-daily Factor D inhibitor BCX10013. This decision was based on the new competitive data presented at ASH, which we believe sets a new bar for efficacy. While we made tremendous progress to understand the serum creatinine issue, get of partial clinical hold and resume our trials, we made this decision now because we are unable to increase dosing of 9930 due to the serum creatinine elevations we observed at the 500-milligram dose. As a result, we do not believe we could achieve drug levels to compete commercially. Our team, including Ryan and Helen, is back from ASH after reviewing competitive presentations and data and many, many conversations with investigators and key opinion leaders. And these 2 clearly confirmed our decision. We believe this is also the right decision for patients as we focus on bringing a safe and effective once-daily oral therapy for them. For all patients currently benefiting from 9930, we plan to continue them on therapy until we're able to transition them to 10013. With this decision, we will focus our capital and people on programs that we believe can be competitive and possibly best-in-class. This includes 10013 and additional oral compounds for other targets in the complement system and additional work to expand or the day like the pediatric program and regulatory filings around the world. As we shared on our earnings call last month, we have dosed approximately 90 healthy volunteers with 10013. And so far, we've observed an initial safety, tolerability and PK/PD profile that looks promising for once-daily dosing. Our plan is to initiate patient studies next year to confirm the best dose level that we can then take into a registration program. We will have more to share with you about the data and the plan for this program in the first quarter. We realized this is a competitive space, too, and we will continue to advance 10013 as fast as we can. Lastly, this decision continues to improve our financial situation. Because of the enrollment pause with 9930 earlier in the year, we spent approximately $100 million less than expected and slowed down our pace of hiring in R&D. We now expect that 2023 R&D expenses will be similar to this year as we focus our investment on 10013 and our other complement programs. We'll give you specific 2023 operating expense guidance in the first quarter, but clearly, the improvement in net cash burn due also to our growing ORLADEYO revenues, strengthens our cash position. That concludes our remarks. We'll now open it up for your questions.

Thank you. We will now begin the question-and-answer session.[Operator Instructions] Today's first question comes from Ken Cacciatore with Cowen and Company.

Team, you're in a really interesting position having such great near-term commercial success, obviously, with ORLADEYO and real rapid growth. But we're not going to have leverage, unfortunately, even in success in the pipeline for a little while. So just wondering how you think strategically now about these 2 different kind of interesting points in time where you have maybe the ability to monetize ORLADEYO much like [ Biohaven ] while still maybe retaining the R&D engine. I would think a strategic would maybe want both of these capabilities, but wondering how you're thinking about this really good near-term commercial success with a bit more now extended kind of timing to the pipeline? How do you balance this? And maybe how do you think about creating maximum value?

You're consistent, Ken. So I don't think our view has changed from when you asked the same question last time. We're always open to creative ideas and maximizing value for shareholders. So -- but in the meantime, we're building the company, and we're trying to create more value. And the way we do that is driving revenue, as you said, to get to the $1 billion that we believe we can hit a peak with ORLADEYO and then repeating it with what we think is 10013 and possibly more success with that.

Our next question today comes from Jessica Fye at JPMorgan.

Can you just give us a little more of a sense of development time lines for 10013? I know we're going to see an update in the first quarter with some of the healthy volunteer data. But thinking ahead from there, and I don't know if the 9930 development time lines would represent a proxy, but when could we think about seeing, for example, proof-of-concept data in PNH?

Yes. I actually think -- and Helen, I'll take this to start and then maybe you can jump in as well. But I actually think the experience with 9930 puts us ahead because we have relationships aside. We know where to go, we could possibly transfer patients that were on 9930 over to 10013. So I actually think there could be an acceleration to it or a faster start-up maybe is the better way to look at it. We're going to move as fast as we can. We're going to invest in this program with the idea that it has the potential to be in a bunch of different disease indications in many, many patients. Helen, I don't know if there's anything you want to add, you're on mute.

I'd just add, we are going to move very fast with 10013, we have been anyway, as you heard with our update recently with healthy volunteer data. And the time lines will be determined as we gain more information with this and that we're able to set a dose to take into pivotal studies.

Yes. And I think the last thing I'd say, Jess, is we said we want to go into patient studies next year. Right now, we're thinking PNH and C3G to get the dose to figure out the dose level. And then we've said previously that we'd like to go into big indications for the pivotal after that. So we're moving as fast as we can go.

And our next question today comes from Brian Abrahams with RBC Capital Markets.

This is Joe on for Brian. I just quickly wanted to ask if there's anything you could tell us about 10013s property. Anything favorable you could highlight for us over 9930 in terms of -- anything in terms of molecular structure or any signals you saw in the preclinical studies you've been doing?

Yes, it's a different structure. And so -- and it definitely has different properties. The first one is that it looks like a once-a-day drug where 9930 look like a twice-a-day drug. Bill, do you want to just talk about the differences, one of the questions people have is around what we know about this molecule as it relates to the crystallopathy and things like that. We don't have all the answers, but we have some.

So far in our Phase I, very happy with the profile We haven't seen any drug-related safety issues. Obviously, it's certainly in development. We look forward to completing the Phase I and talking more about this in the first quarter next year. But so far, so good.

Yes. And I think the last piece is we did work in the same animal species where we saw Crystals, and we didn't see it with 10013, and we did the same experiments on the bench to see the super saturation and we didn't see it with 10013. So I can't -- we don't have clinical data in patient yet, so we can't declare that we don't have a problem there yet, but so far so good.

And our next question today comes from Liisa Bayko at Evercore ISI.

Could you walk through some of the -- like the target profile that you want to see to commit to 10013? In other words, I know you wanted to have something better than and maybe tackle pan the competitive landscape. So it's once a day, -- are there other features that you think would be enhanced in the target profile besides the more convenient dosing?

So we're shooting for best-in-class, right? And I'll turn it over to Ryan in a minute to get some feedback around what he heard at ASH around a once-a-day drug. But we believe a once-a-day profile in this space very competitive. And I think the other piece is we want to get to a dose where we have similar efficacy. And so I think on the hemoglobin front and on the transfusion front, we're doing very well with 9930, but we had breakthrough hemolysis due to lack of control of IVH. And so we'll look to get to a dose where we control that, and that will be part of the profile. But Ryan, do you want to talk about what you heard at ASH?

Yes. Thanks, John. Thanks for your question, Liisa. We met with a lot of thought leaders, investigators, advocate. We took advantage of that meeting, which is obviously a very large meeting to learn more about their reactions to the data. And I think what we clearly heard, we heard a couple of things. I think, first, that they believe the proximal complement inhibitors are now going to be the new standard of care moving forward. So I think that was very reassuring to us. When they learn more about BCX10013, they also agreed that a once-daily oral option for this would really be the best option to further advance the standard of care and be the best option for us in terms of an option for best in class. So I think based upon those conversations, we feel very good about what we see with 10013 thus far.

What kind of dose range are you thinking?

Yes. We haven't disclosed -- so we said you'll see some data in the first quarter and... But these are studies that aren't large. And Bill, you might want to talk about that, these proof of concept to get the dose range. They're not large. You don't -- and you dose up as you get data. And that's why we go into PNH because you get data so quickly. I don't know if you want to describe anything else.

Yes. I think that the principle here is to investigate how well you can get complement inhibitor, patient population that has nice biomarkers that can react pretty quickly and PNH certainly fits those criteria. I think it's too early to predict when we're going to get to a dose. But the objective here is to get to an optimized dose that controls the alternative pathway of complement as soon as we can and then move that into attractive indications like John was mentioning before.

And you can get there in a couple of handfuls of patients. So these aren't huge studies.

In these rare disease, dose range finding studies, it's not like common disease, drug development. The biomarkers are hugely helpful. And so just a small number of patients is enough.

Yes. Okay. And so once a day with a similar [indiscernible] can you kind of maybe talk through the efficacy parameters that you'd like to see at least in PNH or some initial indications but feel like you're on par?

Yes. I think it's what I just said a minute ago, which is you raise hemoglobin competitively. You stop the need for transfusions. And you -- in PNH, you control intravascular hemolysis. So you don't have breakthrough hemolysis. And we had a bit of that. And it looked like in the study at ASH, they had very little, and so that's the new bar.

And what about this compound leads you to believe that you can check the box on those the distributed?

We believe we can get -- we're not limited by dose from what we see today.

And our next question today comes from Jon Wolleben with JMP Securities.

John, just a follow-up on a comment you made earlier. You mentioned you're going into PNH and C3G to get the dose level, but then moving into bigger pivotal indications. I was wondering if PNH and C3G fall into that big indication classification? And if not, what kind of other indications are you thinking about ultimately for 10013?

Yes. No, great question, John. No, they don't. And IgAN is one that's really attractive to us. So that's at the top of the list.

[Operator Instructions] Our next question comes from Justin Kim at Oppenheimer & Company.

So I think I had a couple of questions on sort of the pipeline and how you think about indications, but it seems like you've addressed that. But maybe just to talk a little bit about the data that we might expect at the beginning of next year. Do you have a reasonable sense of sort of the levels of factor the inhibition that you think will translate to that superior IVH control? And additionally, do you think that the ability to switch patients between an alternative pathway inhibitor to another alternative pathway inhibitor might be important as you think about sort of late-stage studies and the timing of the availability of 10013?

So Bill, on the first one, what are we looking for in healthy volunteers that gives us a sense that we have an effect on the alternative pathway?

Yes. So in the healthy volunteers, the alternative part in everybody, the alternative pathway is always ticking over. It's always on. So you can measure inhibition of that part of the complement system in bench assays, including commercially available assays like the AP Wieslab assay assays . And there are other assays to that measure different parts of the alternative pathway. So we're doing that in the healthy subjects. And that gives you a guide to where to start in patients living with PNH or other complement-mediated diseases, and then we take it from there. So the healthy subjects aren't to be all and end all, they never are, but this is one area where assays in healthy subjects can really help.

So Justin, getting a 24-hour seen suppression of the complement system is really an important indicator for us that we have a once-a-day drug. So that's what we're shooting for. And I forgot your second question.

Just on sort of conversion from, let's say, [indiscernible] potentially.

It's an interesting question. I think that the profile that emerges as we develop 10013, will dictate what we can do with it. And we'll see down the track, whether the profile is attractive enough to have patients consider switching from one drug to another drug.

Yes. I think you guys heard at ASH to because you repeated it back to me that this idea that there's escape mechanisms in the complement system. It's really complicated and having other targets and maybe combination therapy down the road could be interesting. I don't know, Ryan, if you want to -- or Helen, if you want to talk about that, but that's the whole reason, Justin, we're looking at other targets in the complement system as well is it's complicated.

And I think we clearly heard, ASH to that these are chronic diseases, and the data we're seeing is still 24-week data. So while there's a lot of confidence and approximate complement inhibition with what we saw at ASH, I think there's still questions. And I think as we see what evolves there, it gives us a better opportunity to understand what may be available to us in terms of switching. But there was a clear endorsement for a once-daily option for a proximal complement inhibitor moving forward.

And our next question today comes from Gena Wang with Barclays.

So maybe I would just ask regarding the healthy volunteer data expectation. Could you give a little bit more quantitative benchmark, for example, the AP hemolysis -- like what level will you be looking for like for how long and then you'll be looking for, that would be viable. That shows you like what kind of actual data will share -- will give you confidence that you identify the right of going forward.

Yes. We haven't said that we've identified the right dose yet, but what we are seeing is that we believe we have a profile of a once-a-day inhibitor. And so what you'll see is some preliminary data in the first quarter that is supported by PD primarily that supports that view. And we're completing the rest of the SAD/MAD and we're doing the dose ranging in patients as well next year. And when we have that data, we'll share that as well. Bill, anything else?

Sure. The objective is to get a strong suppression as you can measure in these assets. So as you -- what you want to see is, as you increase the dose, the degree of inhibition gets stronger and stronger.

I think what I wanted to say is like if just once the day goes, it seems that may not be sufficient. You wanted to show at least comparable or better clinical profile versus Novartis data. So just wondering what exactly data point you are looking for that will give you confidence this warrant further development?

So the dose response and safety in Phase I gives you confidence to keep going, then you have to test it in actual patients with the disease in order to get more information. So you get good information from healthy subject Phase I studies, but that's not sufficient. You have to take it into patients to confirm that the doses that you're looking at do the job well enough. So the healthy subject studies are really important, but they don't get you all the way.

And you're also looking for the effects that Bill is talking about and how far -- how long they last. So the exposure level is to drive and the ability to get to suppression complement for a longer period of time is what would get you to once-daily dosing rather than the more frequent interval. So we'll be looking for that suppression for the period of time that will allow us to have solid coverage, complete complement inhibition to the levels necessary over the 24-hour period.

And then the last thing I'd say is we're moving into patient studies to figure out dose where we'll actually see what effect it has in patients. And as Bill just said, those are small studies, you can get the answer relatively quickly, and we're starting those next year.

Our next question today comes from Chris Raymond with Piper Sandler.

Just want to dig a little bit further into the -- what you -- your comment on switching these 9930 patients to 10013. What I know it's early, you just made the decision here, but what is the contemplated protocol -- and what's your current thinking on how many of those patients you could actually switch.

Helen, do you want to take that?

Yes. So we have -- what we know is that there are patients who have been benefiting from 9930. We know, as we've talked about earlier, that they are seeing an improvement in hemoglobin and the freedom from transfusions. Patients will have the choice. And in the investigators, physicians working with the patients who have the choice. What we don't know at this point is which ones will choose to proceed to continue with 9930 and which ones won't. That's an individual decision between the physician and the patient. And we also need to discuss with regulators to make sure that there is an appropriate protocol in place. So we have some work to do. But we've already heard that there will be patients who are interested in continuing on 9930 as medicine is providing a benefit for them in the near term. Our goal is to offer our best Factor D inhibitor to those patients. And so we anticipate in the future, we give access to 10013 to them as well.

Ladies and gentlemen, this concludes today's western answer session and today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.