Q3 2022 BioCryst Pharmaceuticals Inc Earnings Call

At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and during the question and answer session. If you have a question. Please press zero one on your Touchtone phone.

As a reminder, the conference is being recorded I would now turn the call over to Mr. John Lu with Biocryst, Sir you may begin.

Thanks Michelle.

Morning, and welcome to Biocryst third quarter, 2022, corporate update and financial results Conference call. Today's press release and accompanying slides are available on our website participating with me today are CEO , Jon Stonehouse, CFO , Anthony Doyle, Chief Commercial Officer, Charlie Gayer, Chief R&D Officer, Dr. Helen <unk>.

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 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 material.

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 we continue to see steady progress with the Orla Dale launch and underlying growth trends remained strong.

Patient starts are consistent with previous quarters discontinuation appear to have stabilized and we are investing more to keep this momentum going.

Based on our expectations for continued growth in Q4, we plan to exit 2020 to having more than doubled sales from the great start we had last year and will be a quarter of the way to our expected peak of $1 billion globally and just the second year of launch.

We've shown you long term data from our trials and we will continue to show you real world data that our drug works very well in many patients.

The competitive landscape has changed too and as a reminder of how challenging it is to pursue a strategy of oral drugs in H E.

Right now and perhaps for some time to come Orlando is the only direct acting world with once daily dosing to prevent future attacks.

With this unique offering and product profile. We believe this is a therapy every patient should have the opportunity to try to see if it works for them.

We will share more specifics on the or the data quarter performance in a minute.

Our strategy of going after challenging targets, specifically serine proteases for patients suffering from rare diseases is rooted in our ability to discover potent specific and bio available molecules.

In the case of <unk>, we were able to do that do what others haven't.

Develop an oral once daily <unk> inhibitor.

We believe this allows us to offer something unique to these patients and we believe <unk> is just the start.

In addition, because these are difficult targets, we don't stop at the first molecule. We discovered we work on improved next generation compounds. We saw that was a oral stat northern Dale.

We believe we've done it again with factor D. We.

We are fortunate to have two molecules again and that puts us in a position to potentially have the first oral factor D monotherapy molecule to market.

And the next generation that perhaps will be the best.

While the future of $99 30 is still to be determined our expectation is we will get an answer to our hypothesis on data from the first 15 or so patients treated for two to three months by the middle of next year.

We have also been working on additional next generation complement inhibitors, including VCX tens or <unk>.

A potential once daily oral factor D inhibitor that we have advanced into the clinic.

In Q1 of next year, we plan to show you data in humans that supports the potential of once daily dosing.

Our plan is to go into rare disease patients in dose ranging proof of concept studies with tens of years 13 next year as well.

But we won't stop there the complement system is complex and blocking more than one pathway allows us to go after more rare diseases and may be necessary to successfully treat some patients.

So we also have a discovery effort and we're making great progress on other targets in the complement system.

If successful we'll be able to go after other rare diseases, and possibly combine molecules to make the best therapy in one capsule or tablets.

We plan to show you more in an R&D day next year.

So.

The goal simply stated is to be the global leader in complement.

Simple to state, but very challenging to do we.

We believe this strategy in our discovery platform allows us to do things others may not be able to do and we look forward to showcasing the two you next year.

So what does this mean for you as a shareholder it starts with the evidence that we can successfully discovered develop and launch an oral drug directed at a challenging target.

That offer something you need to patients.

The result, we expect as or the deal will fill an unmet need for thousands of patients and will reach $1 billion in global peak sales.

That is a major accomplishment that sets us apart to create meaningful value for patients and shareholders.

And we plan to do it again and compliment, but not with one molecule or one pathway.

<unk> many molecules for multiple pathways, making the best and unique therapies others may not.

That value is many many more patients and potentially multiples of oil a day of peak sales.

Now I'll turn the call over to Charlie to go over the Orla Deyoe performance.

Thanks, John .

The core metrics with early data were strong once again in the third quarter, New patient starts were right in line with our six quarter running average the absolute number of discontinuation was flat to slightly improved for the second quarter in a row and.

And we saw 9% growth in patients on paid therapy.

All of these metrics point to what we have described previously.

Pattern of consistent linear growth for <unk>.

I'll share more detail on what we saw in the quarter and later Anthony will provide context for how patient growth translated to revenue.

We continue to add breadth and depth to the Orlando prescriber base and several sac facts point to our ability to expand <unk> use.

The overall prescriber base grew by another 11% in Q3, and we had the largest number of repeat prescribers in the quarter as more physicians offer <unk> to additional patients in their practices.

508, HAE treaters accounted for 54% of new early day of prescriptions and about 25% of top 500 prescribers in Q3 were newly activated.

We also had the largest number of tier two prescribers in any quarter to date.

These trends are consistent with another survey that we conducted with 60 allergists in September .

As we have seen in prior surveys physicians anticipated the percentage of their patients treated with oral and Dow would grow more than any other <unk> therapy over the next 12 months.

They anticipate expanding use because they have seen our long term clinical data.

Many also have firsthand experience with our Orla DAU.

And our physician survey shows that <unk> is the most requested HAE prophylaxis medications amongst patients.

Next week at the American College of asthma, allergy and Immunology Congress, we will have an oral presentation and a poster from large cohorts of patients who started on <unk> after the launch.

This real world evidence confirms what physicians are seeing.

Regardless of baseline attack rate or prior therapy patients experienced excellent long term control.

Even with the success, we've seen since launch we constantly evaluate opportunities to invest to do more in.

In Q3, we identified two such opportunities.

First is to add incrementally to our sales team to further accelerate impact in top 500 physicians.

The second is to add to our field market access team so that as we broaden our prescriber base. We can help practices that have less experience seeking payer authorization for HIV therapies.

As we round out the second year on the market for early days, we are excited about the future potential.

One month into this quarter, our underlying metrics remained strong.

We expect to see a double digit revenue growth percentage in the fourth quarter with total <unk> sales for the year ending at $255 million more than doubling 2021 sales.

Alan I'll turn the call over to you.

Thanks, Charlie.

Today, I will discuss a few significant updates on our pipeline programs, including progress with our current molecules and our future goals for advancing multiple new drug candidates to treat complement mediated diseases.

As we continue to advance our pipeline and important goal, which we believe is achievable.

To bring novel orally delivered products forward to treat many complement mediated diseases or.

Our vision is to be the global leader in delivering medications targeting dysfunction across the complement system.

What's new at Biocryst today, some important progress we've made towards that vision.

We have expanded our factor D inhibitor program towards targeting the alternative pathway.

With a second potentially best in class molecule in the clinic.

And we have identified several additional targets, where there is potential for oral drugs to address the other major pathways in the complement system.

Our discovery team has already made progress towards generating molecules for each of these targets, giving us confidence that our unique discovery platform has the capability to produce oral drugs for these challenging targets.

If successful this would multiply our opportunities to treat diseases mediated by dysregulation of the complement cascade.

So in total we're not only adding second oral factor D inhibitor.

Two our portfolio for the alternative pathway.

But also building the potential for multiple additional oral drugs to address diseases across the complement system, including those of the classical pathway lectin pathway and terminal pathway.

We intend to invest in the development of a number of oral medicines for these targets.

If we are successful in delivering oral treatment for more than one pathway and complement system imagine also the possibility of dressing several pathways at once with combined oral drugs.

This could expand treatment opportunities, even further with monotherapy single pathway approaches and with combination multiple pathway approaches for treatment of the most complex or serious diseases.

Okay.

Now I'll go into some of the specifics illustrating why we believe we can deliver both the first and then a best in class oral monotherapy factor D inhibitor for a program targeting the alternative pathway.

Yes.

Overall the goals of this program are twofold.

One to quickly bring our first molecule to market, putting Bryan Chris in a position to deliver the first safe and effective oral monotherapy factor D inhibitor to patients across multiple complement mediated diseases.

<unk> 90, 930 has the potential to achieve this and our near term focus is on assessing swiftly and efficiently whether we have successfully identified as safe and effective dose regimen that will keep our R&D in pivotal trials <unk> on a path to registration.

And to chips continues to produce an advanced unique new molecules to achieve best in class outcomes for patients.

By this we mean molecules that bring some combination of improved potency improved safety or with longer exposure at therapeutic levels with oral delivery.

And even more specifically, we mean a therapy that is differentiated in the field by delivering a safe and effective therapy in a once daily dose.

We did this with Orla do and we believe we can do it again.

With VCX 90, 930, we've made steady progress towards re initiating enrollment with the pivotal program. We've begun screening patients for enrollment in the REIT redeemed trials and our gaming some initial experience at the lower dose in patients already on our studies.

You will remember that we amended the redeem in her new protocols with the new dosing regimen of 400 milligrams twice daily with a brief step up at the start of dosing in our effort to confirm a safe and effective dose or VCX 90 930.

Our hypothesis is that this new dosing regimen together with attention to simple hydration.

Prevent the rise in serum creatinine observed in some patients previously at 500 milligrams twice daily.

All patients who continue on VCX 90, 930 have been switched from 500 milligrams to a lower dose.

At this point and with initial unlimited experience. It is too early to draw any conclusions about the success of these steps of.

Of course, if we observe something that warrants holding we're just continuing the program. We will update you earlier as that occurs otherwise our plan is to bring an update mid 2023 with more robust data from approximately 15 newly enrolled patients.

If the new dosing regimen resolves the observations renal injury, our plan would be to invest fully in the pivotal program and bring VCX 9900, each market as quickly as possible.

And if this is not demonstrated we will discontinue the program.

In addition, as I mentioned earlier, we are also advancing VCX 10 zero 13, as the second unique molecule with the potential to be a differentiated product for the proximal alternative pathway of complement with once daily dosing.

VCX tens and <unk> has been moving at full speed for some time and as a result as already in the clinic.

We are reporting today that <unk> is being assessed in healthy volunteers at multiple dose levels, including at potentially therapeutic dose levels with single ascending doses and multiple ascending doses.

Approximately 90 healthy volunteers have been dosed with <unk> at this point and so far we haven't served and initial safety Tolerability and PK profile that is not only supportive advancing into evaluation in patients, but also looks promising for once daily dosing.

Our plan is to initiate patient studies to confirm the best dose level for advancement into a registration program.

We will have more to share with you about the data and the plan for this program in first quarter 2023.

Finally in other pipeline updates I will turn to <unk> 90, 250 and F O P.

Here the competitive landscape for the ultra rare disease. This ultra rare diseases increasingly crowded, including with several late stage programs assessing the same mechanism of action for the treatment of this disease SBC X 90 to 50.

<unk> inhibition we.

We have concluded that it is increasingly likely the needs of patients here may be served by other products before VCX $92 50 can achieve registration.

We are therefore discontinuing development of <unk> 90 to 50 and redirecting the investment of this program towards there are many opportunities in complement.

To conclude today's update on our pipeline I'll repeat a theme you've heard from US before we have succeeded with delivering orally administrated.

Early administered small molecules for challenging targets.

This capability gives us very high confidence that we can achieve our goal discussed today to deliver oral drugs across multiple very different difficult targets in the complement system.

Now I'll pass it to Anthony.

Thanks Alan.

With early day on net revenue for the quarter coming in at $66 million that.

That puts trailing 12 month revenue at around $227 million, that's already over $100 million more than our 2021 full year revenue.

When comparing Q2 early data revenue, which came in at $65 2 million to Q3 revenue at $66 million. There are a couple of things that we need to review to align to our comments on steady growth for.

For Q2, we had a $2 $2 million positive out of period reimbursement adjustment.

We also had over $1 million of what would ordinarily have been July shipments of patients requested the ship in June due to the fourth of July holiday.

For Q3, we also had a 500 K negative out of period reimbursement adjustment Dr.

Factoring in these elements Q2 revenue would have come in at closer to $62 million. While Q3 revenue would have come in at $67 5 million, that's around 9% growth quarter over quarter.

Even without taking into consideration these adjustments the compounded quarterly growth rate from the end of last year, where Q4 came in at around $46 million to Q3 of 2022 is over 9% growth quarter over quarter.

Our steady growth driven by the consistency of new starts and stabilizing DC rates, coupled with continued global expansion gives us confidence that Q4 will deliver double digit percentage growth over Q3, and as Charlie said, we're forecasting revenue for full year 2022 or $255 million.

That's more than double our net revenue from last year and positions us well on our path to $1 billion of global peak sales.

You can find our detailed third quarter financials in today's earnings press release, and I'd like to call your attention to a few items.

Total revenue for the quarter was $75 8 million outside of the $66 million for more than a day of the remaining revenue came from a $6 9 million dollar rapid stockpile order too.

$2 9 million from rapid <unk> API sales to our partners.

Operating expenses, not including non stock cash compensation for the quarter was $83 3 million in.

Cash at the end of the quarter was up $463 million that includes the $75 million that we drew from the <unk> facility in July .

Capital allocation is critical to growing biotech like ours and with 90 930, you enrollment was paused our team did a great job of controlling both internal and external spend at the same time as identifying our processes to potentially remediate the issue.

Getting agreement from the FDA to lift the partial clinical hold and ultimately getting the trials back up and running as quickly as they did when.

When we started the year, we guided to early day on net revenue of no less than $250 million and opex of between 440 and $480 million.

Before the enrollment home for 90 930, we were definitely looking at being on the higher end of that Opex guidance.

We're now guiding to $255 million in revenue and between 365 and $370 million of Opex for full year, 2022, which is more than $100 million less in opex on the higher end of that initial guidance.

Net cash utilization is therefore significantly lower than we had anticipated coming into the year, which in the current macro economic environment is tremendously valuable.

As Helen mentioned, we're also discontinuing VCX $92, 50, which would have required more than $100 million of investments over the coming years.

This disciplined approach to capital allocation and our healthy balance sheet puts us in a strong position to invest in our future growth opportunities now operator, we'll be happy to open up to Q&A.

Thank you Sir we will begin the question and answer session. If you have a question. Please press zero one on your Touchtone phone if you wish to be removed from the queue you May press zero.

If youre using your speaker phone you may need to pick up on your handset first before pressing the numbers.

We also respectfully ask that you limit the questions to one question and one follow up.

Once again to enter into the Q press zero one at this time.

And.

The first question in the queue comes from Ken Cacciatore with Cowen and company. Sir Your line is open.

Thanks, So much great explanation on Q3 appreciate that on or the day I was just wondering with the investments that youre, making to continue to press. The advantage you have with the commercial spend do you want to give us a little bit of thoughts as we look into 2023. It seems like Q4 is on a nice trend already maybe any context you can.

Abide for Orlando, and maybe discuss when we should start seeing a little bit more ex U S contribution Tonight I wanted to give a follow up now.

Because I know you want to limit to one question John just in general as you think about the company wonderful success commercially with all the data with on the pathway to $1 billion, but at an earlier stage pipeline we saw.

<unk> and take the opportunity to really maximize the value of their lead commercial asset with a pipeline that was was trailing as you kind of look at the company and how the value you've created nor the data plus the kind of the little bit of an earlier stage pipeline, although albeit we hope 930 continues to progress can you just talk.

About how the company is looking at maybe maximizing the value of these two would something like <unk> bio havens approach makes sense the organization. Thanks, so much.

Yes, Charlie.

I'll take the first one.

I actually want to start with the last one and then I'll come back to yes. So.

So Ken.

The strategy I guess I look at it slightly differently, we have a pivotal program going on with 90 930.

Our expectation is if we find a safe and effective dose we're off to the races with that molecule and competing.

With an oral drug in our injectable space. So so I don't I don't see a big gap there.

And at the end of the day, it's steady revenue growth so.

If we're not burning a lot of capital on the R&D side, the revenue catches up and you saw that this year.

Anthonys guidance I mean, we are a little more than $100 million apart for the year in terms of revenue and an expense. So if.

If you look at how the other biotech companies around our size that is.

<unk> position to be and we'll always be open to other options.

Other creative solutions.

Like <unk> has done but for right now we are building a pipeline and we're launching a drug that we believe is going to be $1 billion Charlie.

Kevin So on your other questions around the commercial investments I think the first thing to say as John mentioned this upfront we still have.

All confidence in the World that this is a $1 billion peak sales drug and so as we look to make other investments, it's really about being as efficient an accelerated in that process as possible you were asking around 2023, I think we'll give guidance for 2023.

Early next year.

But we feel good very good about our trajectory based on the underlying trends and then as far as ex U S.

Eventually at some point, we will probably start to break that out it's still for 2022, a small percentage of sales, but everything that we see in the underlying trends in Europe and beyond gives us confidence that that will contribute 200 million plus at peak sales. So we're feeling really good about where we are.

Great. Thanks, so much.

Thank you. The next question in queue comes from Chris Raymond with Piper Sandler.

Hey, guys. Thanks.

So a question and also a follow up.

Just on the Orla Dale quarterly quarter to quarter dynamics I appreciate the color on the puts and takes from Q2 and also Q3, but can you maybe provide some color on the timing for understanding this dynamic in recognizing that pull forward.

I'm just curious because it wasn't mentioned in the last quarter.

Just getting hit by some investors wondering why.

And then maybe as a follow up.

On the next generation molecule <unk> 013.

Can you walk us through what you know pre clinically that gives you confidence that you won't run into the same sort of renal signal.

As 90 930.

Yeah, So maybe I'll take the first one Anthony.

As I go wrong director, you can correct me, but.

We did point out that there was $2 $2 million of.

Non period.

Cruel adjustment.

In the second quarter that made that higher than normal and then you don't know the differences between the two until you finish a quarter right and so we had some finish a month like July and what happened in retrospect is.

July 4th landed on a Monday I believe this year in a bunch of shipments came in prior to that because I'm sure people weren't home and as a result.

Got shifted in June instead of July so.

Will things like this happen they will.

Right I think.

What we're not.

Trying to do is solely focused on that quarter to quarter, but that's why we leaned into the idea of the underlying strength REIT, we feel really good around where we are where we're going from a growth perspective and that we're on a path to $1 billion. So in the future will there be some kind of quarter over quarter as it relates to holidays or seasonality maybe.

But I think hitting on that underlying growth factors.

And how confident it makes us in terms of getting to the $2 55 for this year and $1 billion thereafter.

As our focus yes last thing I'd say on that front is we are the only ones with the data at the end of the day no offense to those of you trying to guess and so we think we're the most accurate guide or and we believe we are telling you right now that we believe will finish the year at $2 55, and Thats a spectacular outcome given that we blew away the first year with $1 22.

So more than doubling Helen do you want to take the second part of Chris's question, Yes.

So with <unk>, we don't know yet that we will not.

See what we're seeing with 90 930, however, we do know a number of things that give us confidence.

One is it's so unique molecule, which means it has its own any characteristics and so we expect it to behave differently in the clinic and we're seeing that.

Two is we know what we saw with 99 <unk> with BCS 90, 930, we've learned from that with applied that in our process with their preclinical and clinical data.

And again, what we're seeing in the clinic with BCS turns here with <unk> 13 as.

<unk>.

Supportive of proceeding into patient trials and supportive is the potential for once daily dosing.

Some of it.

We gather data that gives us confidence that it could be different and then theres. Some thats just not mature enough that we can declare that it's that different we won't see it but but we wouldnt be moving it forward. If we thought there was a high risk here so.

Excellent. Thank you guys.

And the next question in the queue comes from Jessica Fye with J P. Morgan.

Good morning, guys. Thanks for taking our questions. This is Daniel for Jess a couple of questions first I guess, you've elaborated a little bit on this but what were the inputs you considered when narrowing down the wholesale guidance to the lower end of the prior numbers.

And two understanding that we will see detailed data in early 2020.

4013, but maybe can you elaborate on some of the early clinical details that have generated what that product plays out in terms of AP.

<unk>.

No doubt that would suggest that it's a one state oral therapy, if I can sneak one more is.

I mean.

Maybe.

I assume you are still in a position.

Assuming you'll still positioned 10 zero 130, Similarly to you have been developing a 490 930 before by targeting multiple oral indications how are you thinking about the potential impact of an IRI.

And how that might not encourage drug developers to develop more than one orphan indication for the asset.

You are referring to the inflation reduction act and multiple indications on one molecule, yes, yeah I'll come back to that.

Helen you can take the <unk> 13, I'll take the lower end and Anthony again help me here. So I mean, it's real simple Daniel we have another quarter's worth of data.

And we're into November now and so we said we would be the accurate guy here and we believe we're going to be at $2 $55. So and this is I think one big difference in rare diseases versus mass markets is it doesn't take a lot of patients to have a movement one direction or another so we're real confident in the $2 55.

Five and.

That's a doubling or more than a doubling of the first year great start how long you want to take 10 or 13, yes sure.

So in terms of the early clinical data with <unk> <unk> and <unk>.

Just to be clear. This is in healthy volunteers. So we have 90 about 90 healthy volunteers, who have been dosed with the drug and so we have safety data and pharmacokinetics data for.

For those individuals we have that including.

Dose levels that may be therapeutic in range and we do not have data on patients at this point. So our plan is to move into patients next to assess the potential complement activity.

And then on the inflation reduction Act I think Theres a lot of implementation a lot of unknowns, yet that have to that have to occur before we can draw any conclusions in.

Maybe we are different than others, but we're not going to say, we're not going to bring a molecule forward in there.

A bunch of other indications when patients are in need and we think that we can create real value value for shareholders. So.

It's certainly on our radar but.

One of the beauties I think in the complement system is single molecules can go after multiple diseases and so that's our plan.

Thank you. The next question comes from Brian Abrahams with RBC capital.

Hi, This is Joe on for Brian . Thanks for taking my question I just wanted to ask one question on Orla data once again.

If you can tell us anything about like any improvement you're seeing in patient retention rate and.

If there were any specific types of patients.

Stay on longer.

How is your education awareness initiative.

Impacting this retention rates as great as of late thank.

Thank you.

Charley sure.

Yes so.

As I mentioned on the call first of all we've seen two quarters in a row now of flat.

Patient retention.

Patient discontinuation, even as our overall patient base has grown so I think we're making a difference what we see as the patient types that do absolutely. The best are patients who switch who are controlled on other prophylactic therapies, and then switch over and in particular patients who had been on paid therapy, whereas I've said.

Previously about 70% of those patients.

Stay on Orlando for at least 12 months and so that's what we're really focused on is getting the right patient type to switch to oral at al and then as any patient starts off we really focus on.

Setting expectations for both efficacy and any side effects that some patients may experience and we see that that makes a difference.

So we're pleased with where we are with with patient retention and.

We think that this is going to be pretty stable going forward.

Surely mentioned.

At this point around the college meeting and I would just.

<unk> people to watch the presentation and look.

Look at the poster because theres some real world data in there thats incredibly encouraging around Charlie described the best switches are the ones that are on controlled on Profi injectable proceeds. So our view remains that if you could be controlled on our drug on a once daily capsule why on Earth would you not try it and see.

If it works for you right and so that's our goal.

Continuing to chip away at this and we believe we're making really good progress on our way to many thousands of patients.

Peak sales of a $1 billion.

Hey, Thank you for the insight.

And the next question in the queue comes from John Watson with JMP Securities.

Hey, good morning, Thanks for taking the questions. Two for me I was hoping you could comment a bit on what youre seeing on gross to net adjustments.

As we're moving forward and you gave some comments on.

Okay.

<unk> growth, which was helpful. And then also when you talk about the 15 patients.

130 from what you want to see data that makes US go no go decision.

Wanted to check is this strictly on ice cream sensors at the rate of patients as well as some combination how are you thinking about what makes up that that's going to go population. Thanks.

Yes, I would say Christina.

There has been no major movements in gross to net.

We talked about in Q1, the impact that we had there but for Q2, three and four our expectation has been that it would be stable on reimbursed patients again, we sat around 15% to 20% Charlie talked previously around what we did from a <unk> coverage in insurance or a payer coverage perspective.

North of 80% So John I don't think there is any kind of big drivers, we will continue to see from.

Percentage numerator versus denominator perspective, including free products that get towards that 15% to 20%, we still feel good about that but no major movements from Q2.

And then the 15 patients Helen.

Yes, so the 15 patients. So we're looking for first of all approximately 15 patients.

That's the right number for us to be able to have confidence in the data to continue to advance the program.

Secondly, it's likely to be patients, mostly from the redeemed studies with Pn H.

That's a program, where we have more sites two global pivotal trials.

Likely to see enrollments faster there in their new program. We will continue to enroll in that program. There's also a run in period built in and so it may take longer for patients to be dosed and proceed to an outcome. So we assume it's going to be mostly pan H remember Jon that they've got to have a biopsy to make sure that they truly have disease in the leg so that just <unk>.

So long.

That's helpful. Thank you.

Sure.

The next question in the queue comes from Gena Wang with Barclays. Your line is open ma'am.

Thank you for taking my questions I have questions regarding all of that you launch.

So given your prior comments just wondering is retention rate now maintained at 60.

And then my next question is regarding 2020.

2022 any guidance 255.

Just did a quick math that would translate to $74 5 million for Q.

We use like 67 5 million for Q that we have a 7 million growth and we are only one month into Q and also we have holidays.

Wondering what makes you confidence.

Yes.

Bob.

<unk> numbers.

Charlie you want to take the retention sure yes, so gena.

The one the one year retention overall, yes, and then in the mid 60 percentage and then what we're really seeing is that and we've talked about this before is where we lose the majority of patients is in the first few months and up to six months once patients get out to a year, they're doing well on or they are only going to stay honest theyre doing well.

And so those patients are much more likely to stay on for the for the long term.

Do you want to make sure the fourth quarter.

Got it.

I think for Q4, Charlie talked about steady growth.

That is gena from an underlying perspective.

What we're seeing and so I think getting to those numbers that youre talking about right to get to the $2 55.

Given where we are coming in to November out of October I think we feel really good if we feel really confident about hitting that $2 55, yes.

We don't guide quarterly, but by the fact that we say $2 55, given you three quarters worth of revenue. We are basically guiding you in the fourth quarter, yes, yes.

Thank you and the next question comes from Justin Kim with Oppenheimer <unk> Company.

Hi, good morning, Thanks for taking the questions.

As you think about sort of full speed ahead for the redeemed studies later next year could you just kind of how much separation you see between 90 930, and the <unk> program just from a timing perspective, and any sort of progress with <unk> III that might just incentivize privatization of next generation inhibitor.

Yeah sure I can take that.

So the redeemed studies just to be clear we are.

Going quickly with redeem studies and the question is whether we continue that.

So they are advancing this is a pivotal program we expect it to be its first program should read out we expect it to be the first program to market should we have successfully addressed.

The dose for safe and effective drug so that it is the in position to be the first to market.

And we haven't felt a second.

Second generation molecule that is also in a position to get to market.

It's early.

It's in phase one we have healthy volunteer data, but we think it has the potential to be best in class and say, we're bringing it through behind.

It's about two years at the end of the day between the two one of them is in a pivotal study in a phase one and so if we find the safe and effective dose we've got something that creates real value for patients in this market and so.

Of course, we would invest in it if we have a safe and effective dose I think the more important question is how do we allocate what we go after with each molecule in our view is probably a skinnier set of indications for $99 30, that's how we see it today and then because we believe <unk> has the potential to be best maybe a broader set of indications.

For that one but that we will see how the programs unfold over time and give you more clarity on that later.

Thank you.

Okay.

The next question in the queue comes from <unk> Ahmad from Bank of America. Your line is open.

Hi, good morning. Thanks.

Thanks for taking my questions I think most of them been answered.

Thank you.

I have some experience.

Calendar wise with the launch do you expect in general any kind of seasonality.

And then secondly on the subject of pricing.

Historically, where drugs have been able to take at least annual pricing and as you talk to insurers payers.

Has there been any change in tone on that obviously not asking you to guide, but just in terms of any kind of sentiment that you may or may not be seeing from Payors and then lastly, as you think about 2023 sales for early say al.

Where do you think your biggest area of untapped demand slides going forward. Thanks.

So who wants to take the seasonality piece I can so so.

I think looking forward into the new year I think we'll see the same kind of seasonality that we saw last year kind of going into Q1 as we've talked about that is always a time when the.

The majority or a good portion of the patients have to go through prior authorization. So I think we'll we'll comment more on that next quarter, but you can anticipate that.

As far as pricing, we don't obviously, we don't comment on general pricing, but payer sensitivity.

Payers are always sensitive to high priced therapies for rare diseases like HIV, but we're not we're not seeing anything.

Notable about that.

There was one of 2023 untapped potential.

Yes.

You can add.

I think this further investment that Charlie talked about we will see the bulk of the value of that coming in 2023 for sure.

But.

The message has been consistent quarter after quarter after quarter. The best patients that we get are ones that are controlled on injectable profi that switch over to Orlando and again I'd encourage you to pay attention to what we're presenting at the college meeting so continuing to pick away and chip away at that I think is.

Is the key and Z and you heard me comment today, and many times over over the quarters around our top 500 versus tier two and recall for every one of the top 500 is about half the HLA market and then there is tier two and we had 54% of our new prescriptions come from the top five.

So really great balance and we see opportunities in both ends kind of at the top of the market and then expanding the market and so as we've expanded our team a little bit it's to take advantage of.

Both of those segments.

Yeah.

Thank you.

And the next question comes from Ross <unk> with Needham <unk> Company.

Hi, this is broken awkward Serge thanks for taking our questions can you just talk about how the recent setbacks with other oral <unk>.

Prophylactic products and development changes to your long term outlook for all of the deal and how do you see the competitive landscape playing out thanks.

Yes.

I think I said it in my comments.

Just a reminder of how challenging it is to make a potent specific orally bio available drug I think there are now five companies.

Including us with a oral stat that had programs that had to be stopped so.

These are really hard with the flip side of that is it means we may be the only one at the end of the day and so that puts us in a spectacular position because we know that patients really want an oral they want a decreased burden of disease and a decrease burden of therapy.

And you can offer that with one capsule once a day with oil a day. So I don't think it dramatically changes the other piece I would say.

Question, two is where.

We are absolutely in our competitors that are in the market that are have profit drugs are seeing this as well as the market is definitely moving more and more and more to.

Profi and away from on demand and I think on demand is going to be a tiny tiny piece of the market ultimately and then we'll be battling out.

With Injectables for the Prophage.

Okay. Thanks.

Yes.

Thank you and our last question comes from Maury Raycroft with Jefferies.

Hi, good morning, and thanks for taking my question I'm. Just wondering if you can elaborate more on the comment about investing more to keep the Orlando momentum going you mentioned the increase in sales team. In addition to field market teams is that the further investment you are referring to and will you continue to add to these teams or are you at a status quo at this point heading into 2023.

Hi.

Charlie it might be good to just talk about one of the keys to the success of the launch so far has been your agility right looking at data understanding what the data is telling you and then making adjustments.

Yes, so to John's point, we have always looked where we can do more and we when we do.

Built the launch when we built the team we felt and we did have a <unk>.

Team that was ready to compete in this space.

We've seen that then we're always doing is looking where we can do just a little bit more at the margins and so previously ive talked about how we added some additional field based patient facing members of the team.

Because that's a need that we saw now we saw an opportunity just to add a little more to our sales team better market access team. So we'll continue to look for these opportunities.

We feel good about where we're at right now but.

Some point in the future I may come back and say, we've invested a little bit more because we've had other opportunities. So that's the approach we take.

Got it makes sense. Thank you.

Sure.

Yes.

We have no further questions at the queue at this time, so I will now turn the call over to Mr. Stonehouse for Clos.

Zing remarks.

Thank you and thanks for your interest in Biocryst.

It was recently shown.

Some data from one of the banks around the number of publicly traded biotech companies, it's a really really crowded space in <unk>.

And what was eye-popping was the number of companies that are trading below cash. It's a really tough time and you guys know that better than anybody.

Well I think what's interesting is how do you differentiate yourself when there are so many companies with gene editing and gene therapy.

Name it and.

And I think at Biocryst the way, we see it as we've shown you that we have a discovery engine that can do things, perhaps that others can write in and making an oral potent specific once a day <unk> inhibitor. We've shown you that we can file in the U S Europe , and Japan and get approvals all within four months.

Of each other that's even hard for a big company to do.

And we've shown you that we can successfully launch a drug right I think the initial consensus was $30 million. This year I think it was 218 and we've consistently beat that REIT and why because we look at the data objectively we develop a plan and then we figure out how.

How to get the business and so that puts us in a different category I think than a lot of other companies and then the last point is we have access to capital whether it's revenue or.

Other sources of capital, we're not solely dependent on our shares to bring in additional capital into the market. So you add all those things together and then you have a team that.

I think your job is really hard and do you believe what you hear and I hope we are.

Convincing you that we're trying to be objective and what we see and what we do that we're disciplined around how we allocate capital and what decisions we make.

Hard to make decisions to stop programs it is hard to make decisions.

In this business in general, but we're not afraid of that and hopefully we're showing you that where trust trustworthy and that we're disciplined in how we do it. So we think we stand out.

And we look forward to talking to you more and sharing more with you about how that is and hopefully get you more interested in their company. So have a great day and thanks for your interest in Biocryst.

Thank you ladies and gentlemen. This concludes today's teleconference. Thank you for participating you may now disconnect.