Q1 2024 BioCryst Pharmaceuticals Inc Earnings Call & Business Update
Good morning, and welcome to the Biocryst first quarter 'twenty 'twenty four earnings call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero.
On your telephone keypad.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to John Bluth at Biocryst.
John D. Bluth: Please go ahead.
John D. Bluth: Thanks drew good morning, and welcome to Biocryst first quarter 2020 for 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> correct.
John D. Bluth: 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.
John D. Bluth: To be materially different from any future results or performance expressed or implied in this presentation.
John D. Bluth: 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. In addition, today's conference call includes non-GAAP pro forma financial measures for a reconciliation of these non-GAAP measures against the most directly comparable GAAP financial measure please.
John D. Bluth: Refer to the earnings press release posted in the press releases section of our Investor Relations website at Www Dot Biocryst Dot Com I would now like to turn the call over to Jon Stonehouse.
Jon P. Stonehouse: John we are off to a fantastic start to the year with growing Orla Dale revenue in our pipeline advancing on schedule.
Jon P. Stonehouse: Or the day of revenue in Q1 exceeded our expectations as the commercial team in the U S did a great job successfully navigating the reauthorization process faster than previous years.
Jon P. Stonehouse: Charlie will share more detailed but now in the fourth year since approval.
Jon P. Stonehouse: Steady and consistent growth of new patients shows no signs of letting up and.
Jon P. Stonehouse: And we are even more confident we are on track to reach our goal of $1 billion in global revenue at peak.
Jon P. Stonehouse: We continue to make great progress with our prioritized pipeline too.
Jon P. Stonehouse: Our Orla Dale pediatric program is on schedule to file for approval next year, we continue to make progress with BC X 10, Seer 13, and expect we will be able to decide on whether to partner or discontinue the program later this year.
Jon P. Stonehouse: In addition, our other pipeline programs, including <unk> 17, 725 for another tens and of oral stat for D. And me are advancing toward the clinic with first or best in class profiles.
Jon P. Stonehouse: Over the next 12 months Orla Dale will be approaching the midway point of our global peak revenue goals.
We'll be preparing to file for approval for or the Dale use in pediatric patients and we'll be starting to move multiple pipeline programs into patient studies.
Jon P. Stonehouse: And last but not least we will be approaching profitability.
Jon P. Stonehouse: The year is off to a strong start with exceptional progress in all these areas and we are focused on continuing this momentum throughout the year.
Jon P. Stonehouse: With that I'll turn it over to Charlie to share the outstanding performance of all of the data for the quarter.
Charles K. Gayer: John during the quarter, we continued to execute our global shall planned for early day, I'm very effectively revenue of $88 $9 million exceeded our expectations because of the efficient handling of prescription reauthorization in the United States combined with the continued strong demand as health care providers gain confidence in.
Charlie Gayer: In Orlando.
Charlie Gayer: Based on these improvements and trends we are raising our 2020 for Orlando revenue guidance to the top half of our prior range and now forecast $390 million to $400 million for the year.
Charlie Gayer: I'll describe these improvements in trends more specifically.
Charlie Gayer: Last year, we invested in our patient services and market access teams with the goal of improving efficiency and effectiveness of patients to paid therapy.
Charlie Gayer: The first quarter shows that these investments are working.
Charlie Gayer: Two facts stand out in this improvement first our patient services team completed more benefits investigations in January than we did in the entire first quarter of 2023, resulting in patients getting back to paid therapy quicker than in previous years.
Charlie Gayer: Completing these investigations early in the first quarter. It gives us a better understanding of the ease or difficulty of the reauthorization process. If it's easy we get to page shipments quickly if it's going to be difficult. The team can act faster with better information to solve any issues.
Charlie Gayer: And second even though we still provided temporary free product for many patients during the first quarter reauthorization the faster actions in the quarter meant that paid shipments were within 1% of fourth quarter 2023 page shipments.
Charlie Gayer: This was above our expectations.
Charlie Gayer: As for our customer customer demand, we had another very strong quarter for new patient prescriptions. In fact, the last two quarters have been the best consecutive quarters for demand since the six months of the launch in 2021.
Charlie Gayer: Patients and health care providers continue to understand and gain confidence that they can get great efficacy and unions with oil down all with just one capsule once a day to prevent HAE attacks.
Charlie Gayer: We also continued to strengthen the brand by presenting new evidence showing the real world impact of Orla down at.
Charlie Gayer: At Quad AI in February we showed how well Orlando is controlling H a attacks regardless of prior therapies or baseline attack rates.
Charlie Gayer: Patients switching to Orla deyoe from other H, a prophylaxis therapies for example.
Charlie Gayer: Maintain and even improve long term attack control, reaching a median rate of half an attack per month.
Patients are attack free at baseline remained attack free on Orlando.
Later this week, we will present, new data at the <unk> conference in Atlanta, demonstrating that patients initiating Orlando experienced significant reductions in overall health care resource utilization.
Charlie Gayer: Finding that will be very meaningful to payers.
Charlie Gayer: We are well positioned to provide frequent health economics health outcomes and economics updates with large and growing cohorts that already include hundreds of patients.
Charlie Gayer: These new data will further support the growth in customer demand for oil are down for many years to come.
Charlie Gayer: The increase in customer confidence that we're seeing in the U S is also happening in the rest of the world patient growth in Europe was strong and consistent in the first quarter.
Charlie Gayer: And recent launches in Spain, and Italy are already adding to this trend.
Charlie Gayer: Finally, our Biocryst, Japan team is now fully in place from the start of 2024, and we are encouraged by the early signs of their impact.
Charlie Gayer: The overall trends in real world evidence customer confidence in patient growth continue to point to $800 million in peak U S revenue with sustained peak global revenue of $1 billion.
Charlie Gayer: I'll now hand over to Helen to provide an update on our pipeline.
Charlie Gayer: Okay.
Helen: [noise] and teams are busier than ever as they are rapidly approaching our next major pipeline milestones, which include advancing multiple programs into the clinic. Starting later this year and filing for pediatric approval, we can run the dam.
Helen: Let's start there.
Helen: I'm pleased to share that we've completed enrollment in the pediatric trial in Orlando, which includes extending dosing in children down to two years of age.
Helen: This means we are on track to submit for pediatric registration as planned in 2025.
Helen: It also means we are even closer to providing the first oral prophylaxis therapy to children with Chi.
Helen: It's been remarkable how quickly our pediatrics enrolled we believe this reflects the demand for an oral therapy as prophylaxis for HAE attacks in children.
Helen: It has the potential for this to be a transformative option for their children and their parents a pediatric formulation of granules that can be sprinkled on soft foods are taken with a glass of water.
We're excited to be so close to achieving this goal with bringing orla down to children under 12, and we look forward to submitting for registration next year.
Helen: Turning to our next clinical program or factor D inhibitor P. C X 10, Seer 13, we continue to progress the ongoing proof of concept trial, and we expect to either partner or discontinue the program later this year as planned.
Helen: Up next we have two pipeline programs that will enter the clinic within 18 months.
Helen: These RBC X 17, 75 for Netherton syndrome, and have oral stat for diabetic macular edema or DNA.
Helen: We are on track to begin a clinical trial with <unk> 17, 75 by the end of this year.
Helen: This is a fusion protein with very high potency inhibition for K L. K five and it has the potential to be a best in class product, providing disease altering treatment for people like that there's netherton syndrome.
Helen: Now there's an syndrome is a rare lifelong genetic disorder that often presents an emphasis with red scaly and inflamed skin pay.
Helen: Patients require chronic care to protect the skin and monitor for lifelong susceptibility to inflammatory in atopic conditions.
Helen: No there shouldn't syndrome can be life, threatening, especially during infancy, when neonatal vulnerable to dehydration and recurrent infections.
Helen: Currently there is no approved treatment for Netherton syndrome, and it's our goal to deliver a targeted therapy for these patients.
Helen: Next into the clinic will be if oral stat, our plasma, California inhibitor in development for the treatment of diabetic macular edema, or <unk>, which is on track to initiate a trial in patients next year.
Our goal here is to improve vision in patients with persistent DNA. Despite the use of VEGF inhibitors.
Helen: At least a third of patients with DMD have continuing symptoms and even worsening vision loss when treated with that JAK inhibitors, which may be because plasma, California is a contributing cause of disease.
Helen: The need for additional therapeutic options is real.
We're working with clear side to deliver of oral stat to the supercritical space in the eye in order to achieve sufficient exposure in the right location to interrupt the pathophysiology of <unk> in the retina and stopped swelling in the back of the eye.
Helen: Based on the preclinical and safety data, we accumulated with oral stat. When we studied it in the <unk> program. We are in a position to move quickly into patients with journey with our first clinical trial next year. So we can evaluate for proof of concept directly in patients.
Helen: Right behind these two programs or discovery programs for targets across the complement system are also advancing.
The three programs underway, including a protein therapeutic complement inhibitor targeting all three pathways, the classical lectern and alternative pathways complement.
Helen: And our oral C five and oral <unk> inhibitor, a small molecule.
Helen: Are on track to have both the oral C. Five inhibitor and the protein therapeutic multifunctional complement inhibitor advance into IND, enabling studies later this year.
Helen: So in summary, we continue to progress well towards our goal of delivering inhibitors for every pathway and the complement system.
Helen: Overall, the depth and breadth of our pipeline provides balance and great potential with a diversified set of molecules moving forward.
Helen: This allows us to increase the likelihood that our pipeline today will produce our next drag from the market Tomorrow.
Helen: We're excited that the pipeline is now advancing into the clinic with multiple programs.
Helen: Next I will turn it to Anthony for a financial update thanks.
Anthony J. Doyle: Thanks Alan.
Anthony J. Doyle: Can find our detailed first 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 $92 8 million $88 9 million of which came from all the data with the remaining $3 9 million coming from ramp up sales.
Anthony J. Doyle: That puts Orlando trailing 12 month revenues of $346 4 million with Q1 revenue increasing 30% over Q1 of 2023.
Anthony J. Doyle: Of the $88 9 million of global Orla dire revenue sales.
Anthony J. Doyle: 80 million came from U S sales with the remaining $8 9 million or 10% coming from ex U S sales.
Anthony J. Doyle: The 30% year over year increase in sales was primarily driven by the strong underlying patient growth, but we've continued to see quarter over quarter.
Anthony J. Doyle: The 4 million improvement in Q1 performance versus our previous guidance of $85 million was primarily driven by the efforts of the commercial team to improve and accelerate the reauthorization process, that's $4 million that last year, we would not have been able to capture until Q2, but this year the team managed to accelerate the timing and achieve it from quarter one.
Anthony J. Doyle: For Q2, we expect to achieve revenues of approximately $97 million and as Charlie said, we've revised our full year revenue guidance to the higher end of the range between 390 and $400 million.
Anthony J. Doyle: Operating expenses, not including noncash stock compensation for the quarter were $93 6 million an increase of $10 4 million over Q1 of 2023 included in this are $1 3 million of one time expenses related to the R&D structuring at the beginning of the year.
Anthony J. Doyle: Full year 2024 guidance for Opex is unchanged at between 365 and $375 million.
Anthony J. Doyle: With revenue up 24 million year over year at $92 $8 million and Opex up $10 4 million year over year at $93 6 million. We continue to see improved margin accretion in our operating loss for the quarter, not including noncash stock comp was less than $1 million.
Anthony J. Doyle: Cash at the end of the quarter was up $338 $4 million and net cash utilization for the quarter was $52 4 million.
Anthony J. Doyle: Q1 is historically, our largest quarter of the year for cash utilization for context last year's Q1 was responsible for over 50% of total cash utilization for the entire year.
Anthony J. Doyle: Included in Q1. This year, we had $3 2 million related to the R&D restructuring and $6 9 million related to royalty payments to owners.
Anthony J. Doyle: This is our first quarter of making such cash payments to owners and as a reminder, while the royalties are considered a debt instrument for GAAP purposes, they cannot be cold and ultimately should be considered more of a longtime liability even true that <unk>.
Additionally, with our revised guidance for full year on a data revenue. This will result in an improved blended royalty rates as more revenue will fall into the above $350 million tier four royalties or at a reduced rate of seven 5%.
Anthony J. Doyle: Cash utilization will decline in the remaining quarters of the year as it did last year closer to an average of $10 million to $12 million per quarter, and we expect to end the year with above $300 million in cash.
Speaker Change: It's great to see the continuing strong performance of our commercial team did an outstanding job to improve our performance during the reauthorization process and improvement that we'd hope to continue and build upon our next year's quarter one.
Speaker Change: This strengthened revenue performance supported by continued strong underlying patient demand is what drives the revised full year revenue guidance between 390 and 400 milligram.
Speaker Change: Full year Opex remaining consistent prior guidance, where we are in an even stronger position to deliver an operating profit this year when excluding noncash stock comp.
Speaker Change: We will continue on our planned path to near term profitability that we shared earlier in the year approaching quarterly cash flow and EPS positivity late next well with full year cash flow and EPS positivity in 2026, all while continuing to advance our pipeline and at full pace without the need to.
Speaker Change: Raise additional capital to get there operator, we'll now open it up for questions.
Speaker Change: We'll now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw your question. Please press star.
Speaker Change: <unk> and two at this time, we will pause momentarily to assemble our roster.
Speaker Change: First question comes from Jessica Fye with J P. Morgan. Please go ahead.
Speaker Change: Hey, this is Nick on for Jess Congrats on the quarter and thanks for taking our questions. Two from US you mentioned the past two quarters are the most new prescription in the U S. Since the first two quarters of the launch can you maybe provide some additional details on how that trend is looking so far into Q and then maybe you want on ex U S revenues came in at 10% with Q.
Speaker Change: You've talked about them being lumpier than bumpier than the U S. How should we expect that growth in the.
Speaker Change: How should we expect that growth ex U S business this year and at what point could that become less lumpy.
Speaker Change: Charlie why don't you take the first one and Anthony to take the second one sure.
Speaker Change: I'm not going to comment yet on Q2, but other than.
Speaker Change: Two two consecutive quarters of really great prescriptions, we've talked more.
Speaker Change: <unk> talked before about all the market research that we do with physicians they continue to expect to grow our orla.
Speaker Change: <unk> prescriptions by about 30% over the next year. So we would expect this kind of demand to continue Hey, Charlie is it worth spending a little bit of time talking about the confidence that you are seeing in physicians and patients at this stage since the approval.
Charles K. Gayer: Sure, Yes, like I said in my in my prepared remarks.
Charles K. Gayer: As physicians have gained more and more experience in patients as well they see that this drug is much more than just a convenient oral therapy. They they see that Orlando is a really effective therapy and once they they know that they can expect the high efficacy and the convenience together it just gives them more confidence in prescribing.
Charles K. Gayer: Physicians know that the majority of patients would prefer an oral therapy and if they can get a really effective oral therapy that just that makes them want a prescribed more and I think that's what we're seeing now are three plus years into this launch so Nick with that confidence, we just don't see it letting up.
Charles K. Gayer: Anthony Yes, so for ex U S.
By the nature of how we sell into the ex U S markets Theres always going to be some lumpiness last year, we had about 11, 5% of our total revenue come in from ex U S. I would expect something similar this year I mean, if it's if it's not there it'll be due to the U S over performance as opposed to ex U S. Napa.
Charles K. Gayer: Where we expect it to be ultimately we would expect ex U S sales to continue to increase or over a year until we hit peak and just to add to the lumpiness that really is it's just based on how we distribute it has nothing to do with customer customer demand what we're seeing is.
Charles K. Gayer: Physicians are gaining the same kind of confidence that I described in the U S. S and we expect that to continue.
Speaker Change: Great. Thank you.
Speaker Change: The next question comes from Maury Raycroft with Jefferies. Please go ahead.
Maurice Thomas Raycroft: Hi, congrats on the quarter and thanks for taking my question.
Maurice Thomas Raycroft: In your prepared remarks, you talked about your patient services team and investigations early in the first quarter that led to categorizing reauthorization that easy versus difficult can you talk more about what makes their reauthorization is easy versus difficult and how you plan on and building upon your learnings for the rest of the year with that.
Speaker Change: Sure Mark.
Speaker Change: <unk>.
Speaker Change: With this kind of rare disease therapies.
Payers are always trying to make things a little bit difficult, but it's the kind of thing that I've described before which is they want a full patient history. They want lab tests.
Speaker Change: They want all the information they can get and sometimes when when the payers already have this information.
Speaker Change: It can make it pretty quick to get to the reauthorization, but it's kind of in the payers interest to throw as many speed bumps as possible and so even if we've provided it before sometimes they'll ask for it to be provided again and then there are some patients who just have more complicated histories and those those are the bigger challenges that our teams had great success in getting all.
Speaker Change: Types of patients approved.
Speaker Change: So sometimes it's quick and sometimes it just takes a little bit of time everything that I see though gives me confidence about the 85% paid right at peak, it's just going to take US a few years to get there.
Speaker Change: I think the other piece is Charlie made a decision a little over a year ago to change the model and improve this reimbursement and the support services around it.
Speaker Change: See the fruit of that and I think we'll continue to see that.
As this year progresses and in future years, So it's great great signal great sick.
Speaker Change: Got it.
Speaker Change: Just a quick question if you can comment on the.
Speaker Change: The way to say youre, staying with gross to net and with the price.
Speaker Change: <unk> that you took in January is that something that we should expect going forward for the next couple of years.
Speaker Change: The first one you take the second.
Speaker Change: <unk> side, so for reimbursed product you know, we've historically at 15% to 20% and much like last year Q1 is at the higher end of that range closer to 20 for the remainder of the year based on the speed at which Charlie's team got through the <unk> process, we would expect it to come down and be at the lower end.
Speaker Change: And more of that this year, we did at the beginning of the year, we had a 5% price increase and we expect to net about three 5% of that.
Speaker Change: And as far as growth to the 800 million at peak in the U S. All we would expect is very modest price increases as part of that build towards the 800 billion.
Got it thanks for taking my questions.
Speaker Change: The next question comes from <unk> <unk> with Bank of America. Please go ahead.
Speaker Change: Hi, guys. Good morning, and thanks for taking my question.
Speaker Change: 2013.
Speaker Change: Any more Colorado when do you expect to make a final decision on that at that and are you going to be presenting any more data if you do it.
Speaker Change: As you move forward with that.
Speaker Change: And then.
Speaker Change: Question about guidance and based on where you are it's still early in the year is it possible that you could revise the upper end of guidance higher as the year progresses, just based on trends that you're seeing so far.
Speaker Change: Yeah, and tens or 13, as we said at the beginning of the year. The goal is either to partner it or if we can't then we'll stop the program and so the next thing that you'll likely hear is whether or not we decided to partner the drug.
Speaker Change: And then on guidance, we've adjusted the bottom up in the range and when we're confident to adjusted further we'll let you know but for right now it's moving the bottom up.
Speaker Change: Yeah.
Okay.
Speaker Change: Okay was there a follow up to your question.
Speaker Change: I think both Ram Sir Thanks. Thank you. The next question comes from Serge Belanger with Needham and company. Please go ahead.
Serge D. Belanger: Good morning, Thanks for taking my questions.
Nice quarter I guess.
For Charlie you mentioned.
Serge D. Belanger: Two strong quarters of patient growth.
Serge D. Belanger: Seating.
Charles K. Gayer: The first two quarters of the launch can you give us just a little more color on that and maybe how it compares on a year over year basis.
Charles K. Gayer: And then with the success of the reauthorization process.
Charles K. Gayer: Sounds like we're not going to see the usual seasonality trends, but curious how you think about your long term target of 85% paid scripts.
Charles K. Gayer: Is that still the target and does that move up the timeline to hit that target.
Speaker Change: Thanks, Serge so.
Serge D. Belanger: Just to clarify one thing the last two quarters, where the best two quarters since the first two quarters of launch. So the first two quarters were just slightly better but I think what it shows is that there was no just.
Serge D. Belanger: Yeah.
Serge D. Belanger: It's there's no bolus of patients early that we got and then demand falls.
Serge D. Belanger: <unk> is actually building over time is as customers gain more confidence like I was saying in one of my previous responses.
Serge D. Belanger: And then the 30% growth in revenue year over year, I think kind of speaks for itself that at this point and launch to be growing that strongly is is impressive.
Serge D. Belanger: As far as the Q2 seasonality as Anthony was saying, we would not expect as big a jump this year.
Serge D. Belanger: We're guiding to 97 million in Q2, and we would expect that kind of that.
Serge D. Belanger: That same trend I think in the future, where we're going to get more revenue in the first quarter just through more effective reauthorization processes.
Serge D. Belanger: And then as far as the growth to 85% that underlying improvement in the rate of paid.
Serge D. Belanger: As I commented before it's going to take us some years to get there all of these improvements that we're making it with adding to the team getting better and better each year going through this process tells me, we're going to get there and the bigger jumped the bigger opportunity would be next year with the.
Serge D. Belanger: The IRA rolling in and hopefully that helps us get more Medicare patients to paid therapy as the maximum out of pocket goes to $2000.
Serge D. Belanger: The overall growth to 85% is going to be a multiyear process.
Serge D. Belanger: Yeah.
Speaker Change: Thank you.
Speaker Change: The next question comes from Brian Abrams Abrahams excuse me with RBC capital markets. Please go ahead.
Speaker Change: Hi, everyone. This is <unk> on for Brian Congrats on a good quarter.
Brian Corey Abrahams: I have a couple of questions on SG&A and some of your strategic initiatives.
Speaker Change: Initiatives to maybe accelerate some of that.
Speaker Change: Can you speak to some of those.
Speaker Change: Whether you have any sales acceleration initiatives planned.
Speaker Change: To drive any increased uptake either in the U S or ex U S as well with some of the expansions and some of the geographies ex U.
Speaker Change: Yes.
Speaker Change: And then are you in.
Speaker Change: Fourth quarter, you had you had guided towards a increase in SG&A of about $20 million is that is that still the case for 2024.
Speaker Change: And could we expect a the.
Speaker Change: Patient services team to be in.
Speaker Change: Our in place throughout the year or would this be something that you.
Speaker Change: You bet.
To the team seasonally as well near the end of the year maybe.
Speaker Change: Add to the team to help with the area.
Speaker Change: At the beginning of Charlie maybe just talk.
Speaker Change: Just talk in general about where you're at with the build of your team and then Anthony can talk directly and some of this is Sharon and I'll also talk about some of those the specific initiatives that I'd asked about so.
Speaker Change: The investments we made last year were to like like I've said too just to improve the efficiency and effectiveness. We would we're always looking to make.
Speaker Change: Improvements at the margin if we see an opportunity we'll add a little bit we don't expect any major adds to our team at this point it'll just be kind of marginal.
Speaker Change: Additions, particularly as our patient base grows our patient services team will will grow slightly as the patient base grows.
Speaker Change: But that's not a seasonal growth that's kind of long term investment in the team and then we're always looking two to strengthen the brand with additional data.
Speaker Change: And additional initiatives. So we will continue to look for those opportunities like the real world evidence that I described in my prepared remarks.
In terms of where we are versus what we had talked about previously I would expect about a 20% increase in SG&A year over year, but again most of that is broken down into kind of the full year impact for.
Speaker Change: For the increases about Charlie's team did where you had a partial impact last year.
And then for the ex U S side, yeah, there'll be smaller increases, but I would think about it far more in terms of how the team is focusing on the idea of margin accretion. So the investments that we're making the investments that we continue to make.
Speaker Change: Are going to be significantly less than the revenues that are generated.
Speaker Change: As we get towards peak and so I'm really excited to start to see.
Speaker Change: That margin accretion and its role in getting us to and through profitability.
Speaker Change: Got it. Thank you just wanted to clarify you mentioned, 20% increase year over year in SG&A, sorry, sorry, $20 $20 million, Okay got it. Thank you.
Speaker Change: The next question comes from Lisa <unk> with Evercore ISI. Please go ahead.
Lisa: Hi, Congrats on a good quarter I just had a couple of points of clarification.
Lisa: For.
Lisa: For your outside.
O U S revenue and you said it was about 10% does that include the Japanese royalty or no.
Speaker Change: Yes. It does include the Japanese royalty.
Okay and then.
Speaker Change: Well, Bob our gross to net like water and maybe you can comment on how they how it all evolves over the course of this year.
Bob: Yeah, so gross to nets on the reimbursed side here in the U S closer to 20%, so again, historically guiding to 15% to 20%.
That includes the reauthorization impact the copay assistance impacts are there.
Bob: The reset of that and then moving towards the latter part of the year it'll normalize.
Bob: Those are into that 15% range, but it will average for the year in the 15% to 20%.
Bob: Okay.
Bob: And then.
Speaker Change: Other revenue does that is that how much of that is Japanese revenue and how much that is rapidly or other stuff.
Bob: Clarify.
Speaker Change: Yes revenues I'll wrap about yes, so $88 nine of it is <unk> and then three nine as wrap up if you're asking for a specific split of product versus other revenue, we don't generally give that but less than <unk> <unk>.
Speaker Change: Revenue for the most part is inconsequential, especially as all of the day, our revenue is getting to the point, where it's almost $100 million a quarter.
Speaker Change: Okay, but that doesn't include Japanese up along that line.
Speaker Change: The $88.
Speaker Change: Japanese the $88 nine does include the Orlando or sorry, Japanese Orla dire revenue Yep.
Speaker Change: Okay got it.
Speaker Change: And then any inventory changes in the quarter.
Speaker Change: No we continue to be laser focused on ensuring that we have a significant quantities are the cost of sales is really really low and so our team does a great job of making sure that we have enough for all of our territories.
Speaker Change: Okay, Great and then just finally can you maybe just talk about that.
Speaker Change: The pediatric expansion opportunity and just kind of qualify that with that potential.
Potential upside.
Speaker Change: Sure I think the first point is as Helen pointed out there's just a huge need amongst kids to have an oral therapy. It's not just the kids. It's the parents.
Speaker Change: So I think that this is this is a very highly anticipated.
Speaker Change: <unk>.
Speaker Change: M product launch when it comes from the from the market. We think there are about in the U S. About 500 kids, who may be in the consideration for prophylactic therapy, it's an evolving space because there haven't been profi therapies available for kids before then to have the first oral <unk>.
Speaker Change: I'll change.
Speaker Change: So it's up to 500 patients for prophylaxis and then.
Speaker Change: The other piece is just the halo effect, which is.
Speaker Change: Another way to introduce Orla day out to physicians and their families to patients and so we expect it to be.
Speaker Change: And important for us and.
Speaker Change: And as Helen said in her remarks, when you enroll faster than you thought that's usually a really good sign that you've got something that people want and that's exactly what happened.
Speaker Change: Okay great.
Speaker Change: The next question comes from Stacy <unk> with TD Cowen. Please go ahead.
Stacy: Hey, thanks, so much for taking our questions and congratulations on the progress. So we have a few follow ups. So first regarding your Q1 outperformance. What do you think is contributing to this new participant growth just characterize these patients a bit more of that coming from new prescribers for <unk> versus concurrent prescribers just from kind of your patient activation.
Stacy: If activity is just the first question and then the second is around your long term expectations for the Japanese launch for holiday.
Stacy: Take a little bit more about what youre seeing so far in our days and how you feel comfortable kind of long time.
Stacy: For that for that opportunity and then last just on Panther team for the partnership as the team waiting for the full 24 week results before engaging in discussions and just to confirm you all would still be getting those results in the middle of 2024, but you did not anticipate disclosing it to the street. Thanks, so much.
Stacy: Hi, Stacy so the first question just in terms of the color on the new new growth.
Stacy: It's very similar to what we've seen before so we were getting prescriptions from existing prescribers were always adding new prescribers.
Speaker Change: As as more become aware of oil a day one gain confidence.
Speaker Change: The mix of patients is also very similar to the roughly 50% switching from other prophage and the other 50% best we can tell being naive to prophylactic therapy, so very consistent and as I mentioned earlier consistent to what physicians expect to do in the future. They see a lot more growth.
Speaker Change: <unk> over the next year.
Speaker Change: As far as Japan, we think still that there are fewer than 1000 patients who've been identified in a market that could be 20, 502, even 3000 HAE patients. So.
Speaker Change: So what the team is focused on right now.
Speaker Change: Is is driving use of prophylaxis in oral prophylaxis within the within the.
The diagnosed patient.
Speaker Change: Community and just building awareness about orla down longer term, we think that as we are there with oil a day all other manufacturers are there with other prophylaxis products, there will be more patient diagnosis and so we expect this to be a growing market for the next five or 10 years.
Speaker Change: We're very very.
Speaker Change: Very enthusiastic about the opportunity in Japan.
Speaker Change: And then Stacy in 10 years 13, yes, we expect the data the middle of this year, but what matters since were not advancing it we're seeking a partner to advance its what do they think about the data at the end of the day and so that's where we'll focus our attention.
Speaker Change: Okay understood. Thank you so much.
Speaker Change: Again, if you have a question. Please press Star then one the next question comes from Gena Wang with Barclays. Please go ahead.
Huidong Wang: Thank you maybe just one regarding the Japan assets.
Huidong Wang: We have a quite a few questions on Japan market what is the price.
Is that also a 30% to 50% discount for U S price.
Huidong Wang: Relative similar to Europe price and the second question is regarding the pediatric trial.
Speaker Change: Notice it is <unk>.
Speaker Change: <unk> study.
Speaker Change: What data could be approvable based on FDA feedback.
So Charlie you take Japan price and Helen take the.
Speaker Change: Gina.
Helen: Japanese price is is actually.
Helen: The second highest price.
Oral at oil prices in the world.
So at the moment and then of course, it's subject to exchange rate variation, but at the moment, it's close to $200000 per year.
Helen: So it's higher than our European prices.
Helen: And then Helen.
Helen: Question on the pediatric trial.
Helen: It is single arm and that's fairly standard now for what's called extrapolation of the data. The point is to match expenditures in the pediatric population with the expenditures that are known to be effective in the adult population since safety in PK and that's what we're going to be submitted to the agency.
Helen: I noticed you do have also attack rate collection.
Helen: We also consider that data point at any like C threshold and you have to achieve.
Helen: So attack rates always collected when you're following patients and we know the patients doing well that'll be submitted as part of the dataset, but the decision was based on safety and the exposure.
Speaker Change: Okay. Thank you.
Speaker Change: Yeah.
Speaker Change: The next question comes from Francois <unk> with Oppenheimer. Please go ahead.
Francois: Alright, Thanks, just in terms of the pediatric endpoints here you talked about up to 500 patients, but is there a scenario where you would ever expect that patient.
Francois: A pediatric to be honest, then turn into an adult and maybe change treatment option.
Francois: Wondering if you can remind us all of the competition on pediatric front.
Francois: I think what we would see is that the patients who.
Francois: Kids that that need to start on prophylaxis and oral is going to be the best option for them just for a for obvious reasons and this is a this is a lifelong disease. So we think there's an opportunity for these these kids to be on.
Francois: Orlando for a very long period of time, and then as I mentioned earlier, just the the family aspect of it too is a genetic disease, usually there is a parent or often a sibling other family members in the household.
Francois: And so it's an opportunity for whole families to become more aware of the benefits of oil a day out. So we would expect them to stay on for the long term.
Speaker Change: Okay understood. Thank you.
Speaker Change: The next question comes from John <unk>.
John D. Bluth: <unk> with JMP Securities. Please go ahead.
John D. Bluth: Hey, Thanks for taking the question one on your market research, which is.
John D. Bluth: And seemingly accurate in the past when you ask about prescribing in the next 12 months wondering if you actually ask a longer term as well about ultimate usage, how that factors into your growth projection that also.
John D. Bluth: To be reflective of the uptick we're seeing.
John D. Bluth: Perhaps to expand who you're asking and what you are asking about to get more insight into what what the trajectory looks like three or four years down the line.
John D. Bluth: Yes.
Speaker Change: Thanks for the question John we absolutely do look at that longer term and ask them about the longer term.
Speaker Change: The growth in the next 12 months, that's the quarterly survey that we do with 60 to 100 physicians every every quarter.
Speaker Change: Then we use that information plus other studies once a year to build a much longer term model, where we are we also incorporate everything that might come in the future and we ask for.
Speaker Change: Physicians their opinions of those products, what they think they will use and then that all goes into a much larger market forecasting model to predict the future. It was very accurate and put in our first year of launch in every year. Our team updates this model and so we have a lot of confidence in in our future predictions.
Speaker Change: And it is that that is where our $1 billion peak revenue comes from it comes from that model that incorporates all of the forward looking market research.
Speaker Change: And then when this year do you guys do that annual reverb.
Speaker Change: Hey, guys, let us know.
Speaker Change: Our results.
Speaker Change: We will let you know if anything changes.
Speaker Change: We do it once a year around the middle of the year and yes, we our goal is to be accurate in all all of our forecasting so if we see anything different.
Speaker Change: We will definitely let you know.
Speaker Change: Got it thanks Charlie.
Speaker Change: Your last question comes from Chris Raymond with Piper Sandler. Please go ahead.
Speaker Change: Yes.
Chris Raymond: Thanks for squeezing me in.
Chris Raymond: John.
Chris Raymond: <unk> been pretty open in the past when <unk>.
Folks have asked you guys about strategic interest in sort of inbound interest.
Chris Raymond: And I think it's pretty clear now by now that Theres a lot of buoyancy here. If you will for maybe lack of a better word to orlando's uptake I guess any discernible change.
Chris Raymond: In terms of frequency or maybe tenor of the inbound calls that you guys have had from.
Chris Raymond: From strategics.
Speaker Change: Yeah, Chris I mean, you know I can't talk about specifics and and volume or changes, but the answer about our willingness to entertain those remains unchanged. We're a public company and we have shareholder interest.
Speaker Change: In our minds and if someone.
Speaker Change: As interested will take the call so no change there.
Speaker Change: Thank you.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Jon Stonehouse for any closing remarks.
Yes, Thanks again for your interest in our company.
Jon P. Stonehouse: We are off to a really really good start to this year and we're super excited about where this will lead us to in terms of oil a day O trajectory and advancing the pipeline. So we're focused on continuing this momentum throughout the year and look forward to updating you as we have new information have great day.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [music].