Q4 2021 BioCryst Pharmaceuticals Inc Earnings Call
Good day, everyone and thank you for standing by welcome to the Biocryst fourth quarter 2021 earnings call. At this time all participants are in a listen only mode. Following management's prepared remarks, we will host a question and answer session and our instructions will be given at that time. After in your conference today you'd you require operator assistance. Please press Star then zero and an opera I'll be happy to assist you.
As a reminder, this conference call is being recorded it is now my pleasure to hand, the conference over to Mr. John Bluth with Biocryst. Please proceed.
Thanks, Brian Good morning, and welcome to Biocryst fourth quarter 2021, corporate update and financial results Conference call. Today's press release and accompanying slides are available on our website.
Sitting with me today are CEO , Jon Stonehouse, CFO , Anthony Doyle, Chief Commercial Officer, Charlie Gayer, Chief R&D Officer, Dr. Helen tax rate following our remarks, we will 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 <unk>.
Companys future performance <unk> achievements. These statements are subject to known and 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 2021 was a great success for Biocryst as we took a big step forward toward our goal of building. The next great biotech company.
The launch of our first oral drug for rare disease patients suffering from each AE or the Dale got off to a tremendous start with $122 $6 million of net revenue in the first year, we have a solid base to build off that let us to confidently guide you to no less than $250 million this year and $1 billion and glue.
<unk> peak sales.
Patients want an oral therapy, and we are on our way to becoming the market leader in the prophylactic treatment of H E.
But early data is just the beginning in 2020 . One we also advanced our pipeline that will lead to significant additional value creation.
Our oral factor D inhibitor be 690, 930 moved from a phase one in one indication to pivotal studies in <unk> and a proof of concept study in three renal indications whats important to note here is not only do we have a late stage program on the heels of the approval and launch of boiler Dale.
But this molecule has the potential to be an entire pipeline.
And having filings for major approvals addition, additional pivotal programs and many proof of concept studies in many different rare diseases.
That's what we have with 90 930 and were allocating our capital into this program to compound value for years to come.
And finally late last year, we brought in significant additional capital that gives us the ability to retain the rights to these programs and create greater value for our shareholders.
So 2022 is another year focused on executing our plan continuing to grow or the day when the U S and around the world and advancing our pipeline enrolling pivotal and proof of concept studies, all to increase and compound value.
It is an exciting time at Biocryst.
Now I'll turn the call over to Charlie for more details on the early data launch.
Thanks, John .
Great results from 2021 gives us confidence in our guidance of more than doubling sales in 2022.
We already have a sizable base of patients entering the year and recent market research shows that physicians expect to double Orlando use among their current HD patients over the next 12 months.
The 60 physicians in this survey are representative of the market treating about seven patients each and they expect orla Dale to become the market leader.
This survey is different from the type of research we presented before launch because physicians are now reflecting on real world clinical experience, rather rather than reacting to a written product profile.
Real World experience means their current expectations are likely to be more accurate in predicting future market share.
This recent research also matches the trends we are seeing in the detailed data on prescriptions patient demographics and retention that we get from our specialty pharmacy partner.
We saw strong and consistent new patient starts in each quarter of 2021 matched by a consistently expanding and deepening prescriber base.
The source of patients was also consistent in each quarter last of last year with more than half switching from other proceeds therapies, mostly injectable therapies like <unk> and Haegarda.
And for staying on Orlando at high rates, regardless of their prior therapy.
We ended 2021 with an overall patient retention rate of 70%.
With patients switching from injectable profi, having particularly strong retention for.
For example of the patients where we have enough history to track nearly 80% of tax iroh patients remained on therapy for at least six months.
This level of retention shows Orlando is.
Well for most patients, which is consistent with switching data from our apex S study that we presented in November at the College meeting.
We also entered 2022 with broad coverage for <unk>.
All major payers and Pbms now have policies, which means that at least 80% of the HD population in the U S has access to Orla deyoe coverage.
The strong underlying fundamentals give us confidence that sales will be no $250 million for the year with Q1 being the outlier at quarter to quarter growth.
We expect little to no Q1 revenue growth over Q4, there are three reasons for this all of which you would expect with a specialty drug and were built into our 2022 guidance first many plans require a reauthorization at the start of the year for specialty products like Orla down meaning.
Meaning some patients will temporarily shift to free product.
The impact of commercial co pay assistance in Medicare part D cost sharing will reduce average selling price in the quarter.
And finally, our last major Pbms contract went into effect in January but most of the revenue benefits will be realized in future quarters as participating plans implement the policy and existing patients shift from free product to paid product.
Based on the strong 2021 results the favorable patient trends.
At Hai Treater reactions, we expect <unk> to reach $1 billion in peak global sales.
The math to get there is both simple and achievable.
25% and 30% market share among diagnosed and treated HAE patients in the U S gets us to 2000 patients and up to $800 million in sales, assuming a 15% to 20% gross to net adjustment.
The U S will again account for the great majority of sales this year, but Orlando is already launched in seven other countries and we expect several more regulatory approvals and launches this year.
By the time, we reach peak annual sales, we expect the rest of the world.
At least $200 million annually.
As we see more and more clinical trial in real world evidence of how well or they are works for most patients as we see where we are helping patients get access to treatment as we see how much need there is for an oral once daily therapy around the world.
Our goal is to get all <unk> patients and their doctors asking why wouldn't you try orla Dale Helen I will pass it over to you.
That's absolutely right Charlie.
We've got more abstract quite AI. This weekend sharing the continuing evidence kind of warm for how <unk> helps patients that effect is durable.
Patients staying on all the data respond really well to have fewer attacks, they feel better and their quality of life improvement.
We see this in the real world evidence to the 96 week data from both.
Apex, two the pivotal study and apex the long term study.
86% reduction in attack rate baseline observed in the long term treatment group as an example is significant and durable effect with a once daily oral medicine.
Exciting to see the difference.
Making in the lives of 18 patients.
Now I would like to turn to what's next for us.
Our pipeline is advancing rapidly and we're preparing for the steps to come.
That's an exciting and busy time for us.
<unk> molecule and our pipeline is of course Bcf 90 930.
Oral twice daily factor D inhibitor, which is being evaluated for the treatment of PMA and two global pivotal trials.
These trials are enrolling even as we are expanding to more countries and sites to reach full swing.
Pivotal program is proceeding very well.
What comes next and we are starting to prepare for this filing for registration with the pivotal dataset.
We expect to be pursuing registration in multiple countries.
One strength of our program has been robust controlled data set the trial design.
Designed to provide them better.
Prior therapy.
It is with an inadequate response to <unk> inhibitors.
Broad controlled dataset is designed to give us information on not only the key outcomes such as our primary endpoint of change from baseline hemoglobin and our secondary endpoints of transfusion rate.
Also the patient reported outcomes such as the <unk> score.
This information may be highly supportive of moving to registration in the U S Europe and other regions.
Remember that was the case with along with that we went through the registration process in three regions simultaneously with a single pivotal data sets.
With VCX 90, 930, we expect to be in a position to move broadly in this program as well to register in the U S and beyond with this technical data.
So when we talk about our goals for the factor D inhibitor in Pn H.
Talking about enrolling these pivotal trials.
Even the top line readout in both <unk> and <unk>.
And work towards submitting for global registration and Thats, where we plan to be by the end of 2023.
In parallel.
<unk> nephritis indications is also open and screening patients from multiple countries.
We remain the clear need for better therapy to improve outcomes in these two indications.
The primary Lopseed, Iga nephropathy, and primarily primary membranous nephropathy.
Also clear the complex alternative pathway Dysregulation has a crucial role in these diseases, making them logical indications Christy next in our factor D inhibitor program and yesterday, we announced the enrollment of the first patient in that study, which is a big step forward as well.
As a reminder, this study will enroll up to 14 individuals in each of these diseases to confirm proof of concepts.
On the size of these vaccine we may not need that many patients to have confidence in proceeding into a pivotal trial.
So what we are preparing for is that we enroll these patients and at some point.
With fewer than 14 patients in the cohort.
Cheap that confidence and move forward to pivotal trials for each disease, one at that time.
Anticipate we will be rolling out three pivotal trials in these three diseases by the end of 2023 as well.
These mainly to dance at a different pace and because they are not dependent on each other to congrats to pivotal stage.
It does it'll trials can proceed as each one get to proof of concept and this is Jeff to start.
There are multiple other diseases, where the alternative pathway of complement is crucial to the pathophysiology of the disease and where proximal inhibition of the alternative pathway with a potent and specific to factor D inhibitor could be expected to improve clinical outcomes for patients.
We are preparing to add indications in the clinic to the ones, we're evaluating and trials so far.
So you can expect there will be other studies in preparation building on what we already know to assess our oral factor D inhibitor for treatment of a number of these other diseases.
As a second wave of studies coming behind what you see now.
Another way to think about it is like this we completed the pivotal trial the global registration and then the launch and global expansion for <unk>.
Now you have two pivotal studies in <unk> with our next pipeline molecule.
And proof of concept trial in three more random indication by.
By the end of 2023, we plan to be moving towards submitting for registration for P. N. H, we anticipate having additional pivotal trials getting underway in the three renal indications and we expect to have proof of concept trials advancing in a whole new steps and indications.
This is the pipeline in a molecule that has a factor D inhibitor program with the CX nine 930.
We are investing in the trials and the planning for this factor D inhibitor program as I've mentioned here and we're also investing in the rest of our pipeline, including our <unk> program with the <unk> two inhibitor VCX 90, 215, our third molecule program currently in the clinic and moving along and our pipeline is really strong.
There's more weighting to the Npls from our discovery Center in Birmingham.
Beyond the progress, we're making in the clinic with the molecules I discussed today and in the meantime, our discovery team is continuing to identify and develop new molecules for additional targets. There is so much more to come.
With the revenue for the day.
Jill.
Capital.
We are investing building, our programs and expanding our pipeline to bring multiple medications to patients and an increasing set of diseases.
This is expansion.
This is bringing our ability to develop and deliver drugs to patients to a whole new level.
I Hope you can hear in my voice I'm excited with what we're doing now and with what's ahead of us.
We're very focused on advancing new ways of reducing the burden of disease for patients.
And I'm proud of the work our teams are doing to drive our pipeline forward with both the programs in the clinic and the program is still to come.
I'll now turn the call to Anthony.
Thanks Alan.
Our capital allocation strategy has always been to invest in those areas that can provide significant long term value. We did it with Orlando testing early off the back of a very robust market research.
We firmly believe that this early investment has been a key factor in our early success with the factor D program, given what you just heard from Helen there's even greater potential given the multiple indications that.
That we could go into with this pipeline in a molecule.
You can find our detailed fourth quarter financials in today's earnings press release, and I'd like to call. Your attention to a few items revenue for the quarter was $47 2 million of which $42 2 million came from net sales of Orlando.
Operating expenses, not including noncash stock compensation for the quarter was $98 million.
And earnings per share for the quarter was negative 10 cents for Q4.
This was impacted by a positive onetime noncash adjustment of $56 million related to the extinguishment of the nonrecourse pharma notes. Excluding this adjustment on a non <unk> on a non-GAAP basis, our operational EPS was negative <unk> 40 for the quarter.
Following the royalty and equity deals that we secured with our P&L in Q4, we ended the year with about $519 million in cash on hand.
And as we previously described we have also agreed with the theory them to draw down the additional $75 million debt tranche midyear this year.
Additionally, we have early data revenue growing from $122 6 million last year to no less than 250 million this year and onward to a peak of $1 billion.
For operating expenses, we are providing a range of $440 to $480 million for full year 2022, having.
Having exited Q4 of 'twenty, one with a quarterly opex run rate of around $91 million.
The great majority of the additional investment is allocated to the progression of our factor D program, Helen clearly articulated what this investment will get us between now and the end of 2023 and why we are so excited and investing in developing this program.
We're often asked about the path to profitability.
With our belief in Orlando being $1 billion drug I feel very confident that we'll get there in fact, given 2021 revenues Orla day. It was already profitable on a direct contribution basis, which is a great achievement by the team.
Right now, though our strategy is investing in maximizing value creation allocating capital to continue to enhance and expand the order of the day of launch to advance our factor D pipeline across multiple indications all while continuing to discover new drugs to ensure that we have a robust pipeline to repeat to repeat.
The process over and over again.
This is the strategy that gives us the belief that we will be the next great biotech and will result in compounding value for the company and for shareholders in the coming years with that we'll open it up for questions.
Thank you at this time, if you would like to ask the question over the phone. Please press star and then one on your telephone keypad again at this time, if you'd like to ask a question over the phone. Please press Star then one on your telephone keypad.
First question will come from the line of Ken Cacciatore with Cowen <unk> Company. Your line is now open.
Good morning team congratulations on all the progress on the retention rates, it's really been a nice positives.
And as you described.
Probably better than we originally anticipated, but wondering as we go through.
Having more experience is there a best practices that could even further improve the retention rate. So learnings from the clinicians and kind of passing along to salesforce and sharing with other clinicians would like to hear about that on the renal basket study.
Obviously, given the timing of enrollment.
Hate to push you on this but it does look like it's possible you could have data by the end of this year just wanted to talk about maybe timing of when we might be able.
To see something from those studies and then just.
Lastly, any kind of qualitative discussion you can give on the enrollment of <unk> kind of what are you seeing and how is it going thanks so much.
Charlie you want to take the first one on retention what we're working on and then Helen can take the other two.
Sure Hi, Ken Thanks for the question, Yes retention really the best practice that we're seeing is that and this is true for any HLA profi therapy is that patients really need to be prepared to give give a drug a chance in the first few months.
You need to set the expectations. So that number one for patients who do have Gi effects that they anticipate that know that those gi effects tend to go away within the first month or so.
If you have a breakthrough attack breakthrough attacks or comment on all therapies. So just to work work through that and what we see what we hear from the expert Treaters is every new drug needs to be given about a three months plus.
Chance to see how it is doing for you. So we're really focused on setting those expectations, making sure that we do everything we can to hold patients hands through that process and that the hcp's doctors and their staff really set the patients up for success and prepare them for anything that might happen.
And we will keep focusing on that throughout this year to keep up that high retention rate and hopefully even improve it.
Yes, one thing before Helen answers to the other part of your question is one thing that Charlie and team are doing a really good job is gathering more data and more information about good switches and challenging switches and alike, whether it's our product or other products and so we're getting smarter Ken with each month that goes by.
And we're applying what we're learning from that too.
To improve those numbers, if we are able.
Helen.
Yeah.
Thanks, Ken for the question.
On the renal study in terms of timing. So yes. This is a study that is I've had has three different cohorts. They are each independent and they will therefore involve independently.
We are.
Pursuing this based on the science, we expect.
Good to see.
Outcomes.
Anticipate will lead us to proof of concept in two pivotal trial programs.
They will as I said, though they will eat scale independently and we are also making sure that we get the right patients. So that we can.
First for efficacy for that proof of concept in this study.
When I say that I mean that we are doing kidney biopsies at the beginning for entry in order to confirm that.
<unk> disease is that the right.
Stage not to advance to be able to assess.
And we expect this to take some time, so we have not we've not said.
Which of these we expect to go faster or slower but over time, we think we will students.
Arms enroll separately and we're looking for that target of achieving proof of concepts to advance two pivotal programs for all three with AMOLED timeframe by the end of 2023.
And the second question, which was what we're seeing in enrollments for Pn H, where we are.
Very pleased with what we're seeing we're seeing activation of sites across the globe.
Enrollment in both studies as you've heard so we're right where we want to be with this program and ramping up to add more centers empty.
And of course.
So I don't have more color to give on that except that you can't really very happy with the progress and the excitement that we're seeing from investigators in centers around the globe.
Yes.
Yes.
Great. Thank you.
Thank you. Our next question will come from <unk> Ahmad with Bank of America. Your line is now open.
Hi, good morning, Thanks for taking my questions.
For early day out for your comments about Q1 sales I just wanted to clarify beyond your statement in your press release, where you said that you expect.
And no growth in revenues this quarter due to these formulary reset sales will be lower sequentially from fourth Q. This is a common phenomenon than a number of our commercial stage companies experience and I'm just asking.
Extra color to help with modeling purposes and related to that what should we expect gross to net.
To be in this quarter and then I have a follow up on <unk>. Thanks.
Sure I hate to say, yes.
You've got it this is a common phenomenon, it's really just a reimbursement dynamic in Q1. So we expect the quarter from Q4 to Q1. This will be the lowest growth, but then we're very confident.
We're excited about the $250 million plus for the year, so higher growth in future quarters. So it's really just a Q1 expected reimbursement headwinds.
That frankly will turn into more of a tailwind in Q2 as that new new contract that I described really really takes effect and then the big driver. This year will just be the continued patient.
Filling the funnel with new patients coming in and what we see in all of our research and all of the feedback from the field is we've got a lot of opportunity in front of us there.
Okay. So just to clarify youre expecting at worst flat flat sales is that right.
Yes, so little to no growth, so where at worst as no growth, but it will be the lowest we expect it to be the lowest growing shorter to quarter for the year.
Okay.
On your question about the gross to net I mean, there'll be a spike right Charlie's talked about the reauthorization and so the free product that we gave to make sure that patients have no break in treatment combined with the effects that will have from things like co pay assistance.
Will cause a spike and really that's what's going to drive.
The fact that we have we will have.
Strong fundamentals that there'll be kind of a temporary adjustment to revenue in Q1.
Yes, so you've always talked about that 15% to 20% range for gross to net would it be slightly higher than that this quarter or still within that range.
Yes, I think the 15% to 20% that we've talked about it is on those reimbursed. So when you factor in the free product, yes, we will absolutely be higher than that and then when you look at only the reimbursed it may well be a small blip, but again it would be driven predominantly them by co pay assistance and again. This is very typical of specialty products, yes, sorry first quarter.
Sure.
And then on the P&L.
You've said that you'll finish enrolling 90 930 have a data readout in prep for approval with all within two years.
When do you think youll be able to provide additional nuance as to when each of those events could occur.
And then on the competitive landscape I believe this year Novartis will read out one of its phase III studies for <unk> failures has had versus <unk> and then also Astra will have combo data for their candidate and refractory patients also at year end and I'm. Just wondering would you see any read through from these studies to the 90 930 pro.
Graham.
And if you weren't first to market with an oral pan H.
<unk> do you think that there will need to be meaningful differentiation.
Among the different products.
So Helen maybe uptake.
First question and if you could take that.
Middle one and then Charlie maybe the last one in terms of.
Of market. So it's really hard to give you blow by blow on the enrollment because it changes every week right and so I think our goal is to tell you. When we'll give you a backstop of what Youll see at the end of next year and then as we learn more over the course of the year, we'll make a decision on.
Do we update you or not but I think we want to focus you on the end of next year and where we'll be.
As a priority and then Helen you want to take the middle one.
Yeah sure so.
In terms of read through from their programs I think what we're seeing is very interesting complement mediated disease.
Field is rapidly advancing we're recognizing that complement is implicated in diseases at an increasing pace.
And so we're certainly seeing that in the field in terms of other trials and everything that we need.
Only for the programs advancing in consolidation of the concept that the alternative pathway is implicated and Mr. Vikas and can contribute to clinical outcome.
The west for us will be watching.
Closely to see what we can learn as Vince programs generate data and actually see how the regulators respond to that so we always do that and we will always be incorporating that into our plans.
So I think we're happy to be soaking up as much information as we can and confidence in our own program as it moves forward.
The only other thing I'd add to that is the.
The read through on our combo study isn't super helpful to us because we don't believe that combo therapy as a viable marketing approach.
In mono therapy is the key and we believe we've got a drug that that takes care of that both extra vascular intramuscular hemolysis. So so we really don't think that combo is a winning strategy, but I'll, let Charlie talk about how to compete in different ways.
And as far as far as competing first of all <unk> is just <unk>.
<unk> heard it's just the first of many indications so there's massive opportunity for this for this drug.
And we are getting really good at switching patients from Injectables to oral so we think even if we come in second.
In the oral factor factor D factor B space that we can really compete based on being the smartest out there in terms of how to get patients to switch and PNA. So there'll be plenty of opportunity in <unk>, and then there'll be plenty of opportunity in each subsequent indication.
And then even just in Pn H.
There are areas, where we can be differentiated so we have the only program with two controlled clinical trials and that may give us the ability to have more readable information on patient reported outcomes. For example that will be important in many markets, particularly outside of the U S. So a lot of places.
We can compete we've got a great team and I'm excited about it.
One last thing I would add dizziness.
Bigger is not better here, we are showing that in the HSA space, where we're competing against Takeda and CSL and one of the things that we take tremendous pride in really trying to understand is the behavior that affects decision, making both in the patient and the doctor on switching we're starting to see that already we're gathering data.
In the PNA space with new drugs that are entering the market and if somebody else gets ahead of us within the world and gets into the market, we're going to learn about what works and what doesn't work there as well and we're going to apply that so.
My bet is on Charlie's team, because I've seen what they've done in the <unk> space and I am confident that they can compete against anybody.
<unk>.
Thank you. Our next question will come from the line of Jessica Fye with J P. Morgan. Your line is now open.
Hey, guys. Good morning, Thanks for taking my question.
But opex it looks like the Opex guidance is pointing to roughly 50% growth year over year at the midpoint. If we exclude stock based comp can you talk about the growth you expect to see in SG&A versus R&D and within each line, maybe elaborate a little bit more on what's driving that growth relative to 2021.
And then second you talked about the growth in the Orlando Prescriber base, continuing significantly can you put some numbers around that.
Yeah. Thanks, Thanks, Jeff.
First on <unk>.
On the Opex.
Yes.
If we look at it it's the investment has grown but it's predominantly based on R&D right. The biggest growth for Q3 to Q4 and for 2021 to 2022 is going to be to support the factor D program.
And so when I think about the magnitude of the growth.
Think about what Charlie was saying earlier in terms of the market opportunity right. We're talking about a multibillion dollar opportunity in this pipeline in a molecule. So I think the investments that we're making is perfectly in line with the strategy that we have.
The factor D. Like I said theres going to be the predominance of the growth that you're talking about there will be <unk>.
G&A growth mainly to support our rolling at Orla down on a global basis, and then there'll be some structural support to make sure from a G&A perspective that we can support this growth.
But I think with growing revenue that we have in Orlando, if I think about the net cash utilization as opposed to the opex on a standalone number.
Cash on hand that we have and the potential opportunity that this investment gives us I think it's I think it's a great way to be allocating the company's capital and specifically year over year, I mean think about it you've got two pivotal studies going on.
Many many many sites around around the world you've got a proof of concept study in three additional indications and Alan just told you that we're working on getting up other studies in other indications and Theres prep work Theres supply. There's toxicology pharmacology. There is just a bunch of stuff when you've got pivotal and proof of.
<unk> programs and the number of those programs increases over time, so that's the big difference and the specifics around driving R&D costs year over year, and then with regard to the numbers on growth, we're not going to give specifics on the numbers for orla deyoe on patient starts and things like that but Charlie you can give.
Some color.
Around what we're seeing.
Yes.
So in Q4, and just like we saw for all.
All throughout all of 2021 as we keep seeing this prescriber base getting broader and we've talked a lot about our our our targeting so we've got the tier $1 500, doctors and a big tier two.
Roughly twice, maybe a little bit larger than that where we're really focused we saw growth in both of those segments. In Q4, just as we had in Q3 and then the other key thing is are we going deeper within those prescribers. So are they are particularly that tier one dr.
Doctor that is very much like the market research I talked about.
Are they prescribing more the answer is yes. They are they are prescribing more so that's our focus to continue to go broad.
And go deeper than what we saw on our market research that I described is that both current prescribers and current non prescribers and that research both they all indicated that they intend to prescribe oral Dale.
Over the next 12 months and so the indicators are there and that's the team focus and I think another thing Thats got us really excited as with with the pandemic looking like it's easing up we're seeing more face to face interaction So Charlie and I last week were at the very first regional gatherings of our sales team.
Theres a lot more opportunities.
In terms of.
Not only does the top prescribers in getting more of them to prescribe, but also looking at going deeper in the prescribing and so we're also looking at go into Quad AI. This weekend and face to face interaction. We hear there are more docs come in that were at the college meeting in November Charlie in Iowa, and Helen will be there.
And we're really excited about.
Interacting with physicians in.
And that's that.
Talking to each other has a real impact on the <unk>.
Susie Adam for prescribing. So so we think that's going to get better over time, and it's a real opportunity.
Great. Thank you.
You're welcome.
Thank you. Our next question will come from line of Chris Raymond with Piper Sandler. Your line is now open.
Good morning, and thanks for taking the question. This is Nicole <unk> breast cancer correct.
One around peak sales guidance I know you guys have said that.
<unk> opportunity will make up the majority of the new 1 billion peak sales estimate.
<unk>.
Indicated previously that one of the biggest swing factors on the ultimate peak revenue potential would be ex U S. Uptake. So I guess just given the what gives you confidence in updating global peak revenue guidance at this point I guess can you just help us frame your thinking here.
Yeah, Let me start and then I'll pass it to Charlie.
But let me be really clear the vast majority of the global peak sales, 80% roughly will come from the U S and the math I'll, let Charlie go through it again, but the math to get there you don't have to have 50%, 60% market share to get there, it's very reasonable and very achievable, but Charlie you can explain more yes, I mean again.
Math is 2000 patients in the U S and thinking about our pricing and.
Gross to net that Anthony to subscribe, a 15% to 20% that gets you to the $800 million.
We've said previously that ex U S. It's going to be more of a volume the pricing will be lower so it's volume and we will need two to three patients ex U S to kind of equal one patient in the U S.
But as we as we start to go to global markets. There is a real demand for an oral prophylaxis therapy and.
The markets are transforming more towards prophylaxis as has already happened in the U S. So I think it's it's the indicators from that we have the strong indicators from the U S are strong year, one what we hear from future customers ex U S. All adds up to that confidence of $1 billion.
Peak levels, just one quick add to what Charlie said that 2000 patients is off a base of 7500 diagnosed and treated so thats, where you get somewhere between 25% to 30% market share which is really important.
Yeah.
Okay. That's very helpful. And then maybe sorry, just a follow up around.
Competition. Obviously this is a ways off but we've gotten some questions more recently around potential competition for Orlando from gene therapy, and gene editing approaches. So just I guess thinking about your peak sales guidance. How do you guys think about these other treatment modality potentially competing with Warner Rodeo I guess for example, do you see.
As being I guess, maybe more restricted certain patients.
Something like that.
The first thing I'd say is that all the competition is pretty far away. So that gives charlie years literally years to be able to capture market share and get those patients that will be controlled on orla deyoe on a once daily oral capsule and our belief is if youre a controlled on a once daily oral capsule.
<unk>.
What is the incremental benefit that youre getting from other therapy that would cause you to switch right and so efficacy is not going to be if youre controls on our drug.
You don't need any more efficacy right and so so it's got to be something else and so I think where gene therapy and gene editing could play a really important role is in the patients that are really hard to treat right. There with all drugs. None of these drugs are perfect and there are patients that are still struggling and.
So I think thats, a great spot, but there is with any new therapy. There is a risk benefit balance that you've got a crossover and thats. What we learned when we continue to study this and the switching so what's the incremental benefit and it's hard for us to see if you are controlled on our drug that youre going to switch to something else.
Perfect. Thank you.
Welcome.
Thank you and our next question will come from the Elisa Baker with Evercore ISI. Your line is now open.
Hi, Thanks for taking my question most of my have been answered, but maybe you can just elaborate a little bit more on the opportunity in <unk> and renal diseases for 99 three O.
Iga nephropathy, we've been hearing a lot about theirs.
It's pretty competitive area. There are a lot of compounds in development, where do you see complement.
But.
Inhibitor of the complement pathway, specifically factor deanery faculty and sending them to the treatment future treatment paradigm, there with lots of treatment options and then maybe you can go through.
Some of the.
The opportunity in <unk> and <unk>.
And the rest of the indications there thanks.
So Helen maybe start with why factor D inhibitor proximal inhibition in the alternative pathway makes sense for the renal indications.
Right. There are other products, but they are not working on kind of the root cause of the disease and then Charlie you might want to just talk about how we look at one of these markets in terms of opportunity.
Yeah. So.
And then do you guys have nephritis indications Nigel properties one of these.
Apologies driven by complement deposition.
<unk> in the kidney.
Kevin what that complement deposition.
Addressing the dysregulation of the complement pathway, preventing that deposition in preventing or improving the damage.
Kidney.
Getting it from at the root of the base.
And so that that seems to be a natural.
Complement role is understood and now that there are.
Multiple ways, possibly getting at there.
You can see a reasonable way to address that what we're seeing in the field is that there is benefit them through.
<unk> gotten some of the early programs.
Scenes for proof of concept for that.
Movement of proteinuria in these diseases and set that is.
Indication of the potential to improve GFR.
And so so targeting complement.
Sharon.
Has been shown to be a reasonable way to go.
For treatment for improving maryann recruitment outcomes.
Help you know the goal of treatment long term is to improve the longer term outcomes, including.
Reducing the progression to kidney failure, and reducing the need for transplant and patients across each of these.
<unk> you mentioned.
So we are.
We believe that alternative pathway inhibition with approximately inhibitor it could be two.
Two ways getting at that currently in development.
Approach is one of them.
I think each of those.
Could be reasonably expected to have similar clinical outcomes we've.
We've chosen factor D. Because we think it's a better target our structural advantages to that.
We're looking for a clinical outcome will be.
Similar for each of those two groups and it'll come down too.
What we want to see with the particular characteristics of the molecule in trials.
Yes.
I think if you hit it at the heart of the biology that causes the disease. Our hope is that you'll see a better outcome at the end of the day, we don't know that'll be the case and why we're doing the research and the clinical trials, but.
We're going after this target specifically to hit it at the heart.
The pathway so Charlie you want to talk about.
The markets.
So at least in the three indications there.
There are some differences so <unk> is much more in line with ultra orphan like H E. R. Like <unk>. This is there are no current treatments. This is.
For many patients there is a high risk of mortality. So we're looking at that entire market.
For IGN and PMN as Helen was describing there are patients who are at higher risk.
There are segments of that market at higher risk for advancing to end stage kidney disease and so those will be the initial segments that we compete in all within the orphan space all within our skill set where we can compete.
With small teams and Ed.
A differentiated product.
As Approximal inhibitor.
Yes, I mean, the way the best way to think about all these things we're going after is it's like another orla deyoe market.
With each disease or bigger in some cases right. So so just add up that math and you get to real huge value.
Yeah.
Okay.
Thank you and our next question will come from the line of Brian Abrahams with RBC capital markets. Your line is now open.
Hey, good morning, guys. Thanks for taking my questions and congrats on all the progress with the launch and on the pipeline.
You gave a lot of clarity on the.
Seasonal reimbursement dynamics, we should expect at the start of the year I am curious if we should expect any.
Transient omicron wave effect on early first quarter demand trends as well and then secondarily can you give us a sense of.
How the impact on some of the recent whack changes.
How some of those changes would impact overall gross to net for the reimbursed patients over the course of 2022 I'm just wondering how much pull through when we might expect from those pricing changes to revenues per patient.
Charlie you got that one.
So.
Yeah.
As far as the.
The seasonal reimbursed well I think you were asking about omicron and whether we would have any impact of that it's not going to comment on the full quarter until we see the end of it we're glad that <unk> seems to be on the.
The way out here as John was saying earlier go into Quad AI, So theres going to be a lot more in person visits with doctors.
We'll see if it has any impact but we've been working in Covid. This entire time and the team has done really well.
So now that we're able to do more in person meetings internally as well as externally.
It all just becomes a tailwind at an opportunity going forward.
As far as the whack changes I think you're referring to the 3% price increase we took last week.
And this was all part of our guidance for the year end.
Alright.
Most to net changes no I don't think this will have any impact on gross to net the same <unk>.
10% to 20% that we've talked about.
3% higher and it doesn't affect the contracts, we have with payers on stuff like that so I mean this is very common.
That's really helpful. Thanks.
Thank you and our next question will come from the line of John <unk> with JMP Securities. Your line is now open.
Hey, Thanks for taking the questions just a couple from me on the pipeline.
And there were new study I'm wondering how frequently are patients coming in the measure there. Your PCR, we know enrollment maybe differ between the indications, but just wondering if your heart and SaaS I wanted to see about six months of <unk>, we could see.
<unk> very early on that May trigger you guys don't want to go to a pivotal study earlier and then you mentioned on.
On the call we haven't heard much about that in a while can you just give us a status update on what to look forward to it.
22 for <unk>.
So Phil you want to take the first one I'll take the second.
Yeah.
So with your history.
Yes.
Endpoint that we're looking for there is 24 weeks in terms of the ETR will be assessing it Brexit rally over the course of the trial ends also said earlier, we will have 14 patients up to 14 patients in the cohort. So we'll be looking at that and if we.
I think possible that we may see additional information clear considerate proof of concept to them.
With patients, possibly for you right in 2014 and at that time point, possibly earlier than the 24 weeks, we'll just have to see in the data.
We're what we're observing and we will make a decision now to achieve our point.
And then on Sop John This program.
Back when we first launched it was invested in differently than 9900 in complement program because.
Because we had less capital honestly and so we had to be.
Im cautious about how we invested so we did it serially rather than in parallel and I'll give you. An example, while we're running a phase one we werent building up the drug supply aren't doing the additional tox work in parallel which we do in other programs that we're investing for speed and so we're in a bit of a catch up mode.
This year, so drug supply and toxicology and planning for patient studies is the bulk of what's going to happen this year, but.
The key in this space.
Huge unmet medical need.
It's a really difficult disease, and we've seen a lot of failure in this space, it's not easy to get to.
A situation, where you feel like you've got a product that you can get across the finish line, we've seen a lot of companies.
Tumble and it's not because they arent jobs because its hard so we're really excited about the data that we've seen in the phase one study so far both from a safety tolerability and drug level perspective, and have a lot of confidence and $92 $50 Fob. So now we are investing.
And you'll hear more about this towards the end of this year beginning of next.
Got it thanks again for taking the questions.
Youre welcome.
Thank you and our next question will come from Gena Wang with Barclays. Your line is now open.
Gino Your line is now open please make sure that you are not on mute. Your line is now open for questions.
Our next question will come from Justin Kim with Oppenheimer. Your line is now open.
Hi, good morning, Thanks for taking the question.
Just a few from me.
Was interested to see the stronger attention among less convenient modalities like cinryze.
The type of <unk> patient group to though are there any insights on the dosing regimen at these patients and whether retention differs between those two groups and then I have a follow up on the <unk> 90 930.
Hey, Justin.
What we see in the U S. As most patients are taking the every two week dose of tax sorrow.
But I don't think its even just about the dosing it's really about the overall.
Burden that injectables place on patients' lives in refrigeration as required.
It's harder to travel with these drugs. So an oral is something that is truly transformative and I think that's why we see patients switching it.
Its been <unk> been consistently the number one protein product switching to too early to al.
Okay great.
And then on 90 930 a M.
Number of peers targeting the alternative pathway have become to set their sights on dry AMD and ta with typically any commentary on how suitable that indication teed up for the company looking beyond renal disease.
Just on the <unk> side of things can you discuss the protocol for transfusion hemoglobin at that point for monotherapy study.
Yes, so Helen you can take the second one I'll take the first one.
We're a rare disease company and so we're really focused on.
The diseases and complement that affect patients suffering from rare disease I won't exclude that someday we may explore.
I and indications but.
The challenges with those diseases as we've seen historically is getting the drug to get to the spot in the eye and oral delivery has been a real challenge for companies, thus far and then keeping it there.
And so.
Not opposed to exploring it at some point, but not the priority right now.
Hello.
Yeah, and if I could just clarify the question on <unk>.
Okay any study naive patients was around transfusions and.
What about transfusion.
So what the criteria for transfusions and sort of the hemoglobin <unk> points for that so.
So maybe Helen it's around.
Variation of who gives transfusions and what qualifies as a transfusion even if they don't get one if their hemoglobin flow.
Yes.
Yeah.
And then just one point on Delek Giovanni a protocol, where you have chins transition rate of one point.
Both guidelines in the protocol for wind transfusion.
The position sufficient online strength. So when you look at how are you going to assess that in the data. We then set in the analysis.
Planning what will be the point at which we consider a patient transfused and theres a hemoglobin level at which you can stroke patients to be transfused, whether or not the physician actually gave it to patients so that standardizes.
So said another way.
We standardized format.
Data.
And the analysis and.
Which patients were considered to have been transfused.
If it reaches a certain level. We then also collect the data on whether I think receipt to transition or not.
For specific guidance.
And Helen the regulators understand the differences from different parts of different physicians and different parts of the world and so they are very supportive of this approach is that correct. Absolutely. Yes. This is this is a this is a.
So fairly typical way to get to data that has been.
Analyze it all in the same manner across difference.
Treatment.
Ways that individuals may treat their patients across the world.
Yes.
And recognize some acres.
Thank you.
Great. Thanks, so much.
Thank you and our final question will come from the line of Gena Wang with Barclays. Your line is now open.
Hi, Good morning. This is Hershey Dawn for Gino can you hear me now.
Yes.
Thank you okay, great. Thank you for taking our questions. Most of my questions have been answered, but two quick ones from us.
Our early growth you've given enough color on the first quarter, but how should we think about the quarter over quarter growth.
Assumptions for 2022 is it more of a linear growth. If you could provide any color there that would be helpful and the second question and.
In the longer term how are you thinking.
For Biocryst do you plan to be a standalone company or is the thinking here.
More of like under a big umbrella.
<unk>.
Guidance, there or any color there would be helpful. Thank you so much.
Ill attempt to answer both Anthony it surely help me on the first one if I'm getting down the wrong path, but if you've got an unusual situation in the first quarter you.
You Shouldnt expect that it's going to be linear from that point forward. The second quarter first and second quarter could be higher and then there could be some variability in the third and fourth so we will continue to guide you along the way and what we're trying to do here is to be very clear on what we think we will see in the first quarter and then what we will see for the year.
And we're confident in both that we are very very confident that no less than $250 million for the year and that the first year for all the reasons Charlie listed is lit.
Little to no growth in the quarter to quarter for my question I think it's important to highlight that thats revenue focus right. The fundamentals in terms of getting more patients on drug will continue to grow.
Events.
Q1 will be centered around revenue and like John said from Q2 onwards.
I think we'll start to see it normalize in Qs two three and four.
Yeah, and then on your second question I mean.
Building the next great biotech companies.
So I'm hard, but thats pretty simply stated and the reason that we do have a lot of confidence in that and we say it out loud is because we've got a drug that is going to approach or will it get to $1 billion in peak revenue and we've got a really full pipeline right behind it and all of this stuff came from our discovery engine and our platform and if you.
Look at the great biotech companies you pick your favorite one that's exactly how they got to tremendous value is.
Is by investing in their pipeline, while they are bringing a new valuable product to the market.
<unk> 90, 930 could be significantly bigger.
And oil a day and that we think is very exciting and allows us to.
Build the next great company.
Great. Thank you so much for the color.
Youre welcome.
Thank you that is all the time, we have for questions for today. So now I'd like to hand, the conference back over to Mr. Stonehouse for any closing comments or remarks.
Thank you so.
B 21, I have been in the company 15 years it might be the best year, we've ever had but guess what it is in the rearview mirror, we are focused intently on driving orla deyoe getting it approved in other countries continuing to build out the great growth in the U S and advancing our pipeline and we will remain laser focused on that so that.
At the end of 'twenty, two we have another year of great performance to share with you. So thanks for your interest and have a great day.
Thank you everyone. This concludes our conference call for today you may now disconnect everybody have a wonderful day.
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