Q2 2024 BioCryst Pharmaceuticals Inc Earnings Call
Operator: Good day, and welcome to the BioCryst second quarter 2024 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. 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 Jon Bluth at BioCryst.
Good day and welcome to the Biocryst second quarter 2024 earnings call all participants will be in listen only mode.
Speaker Change: Need assistance, please signal a conference specialist by pressing the star key followed by zero.
Speaker Change: After todays presentation, there will be an opportunity to ask questions.
Speaker Change: Ask the question you May Press Star then one on your Touchtone phone you withdraw your question. Please press Star then two please note. This event is being recorded.
Speaker Change: I would now like turn the conference over to John Bluth at Biocryst.
Speaker Change: Please go ahead.
Jon Bluth: Thanks, Dave. Good morning and welcome to BioCryst's second quarter 2024 Corporate Trade and Financial Results conference call. Today's press release and accompanying slides, which we'll be referring to, are available on our website. Participating with me today are CEO Jon Stonehouse, CFO Anthony Doyle, Chief Commercial Officer Charlie Gayer, and Chief R&D Officer Dr. Helen Thackray.
John Bluth: Thanks, Dave Good morning, and welcome to Biocryst second quarter 2020 for Corp, paid and financial results Conference call.
Today's press release, and accompanying slides, which we'll be referring to are available on our website.
Speaker Change: Dissipating with me today are CEO, Jon Stonehouse, CFO, Anthony Doyle, Chief Commercial Officer, Charlie Gayer, Chief R&D Officer, Dr. Helen has got great. Following our remarks, we will answer your questions. 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 and are achievement.
Jon Bluth: Following our remarks, we'll answer your questions. Today's conference call will contain forward-looking statements, including those statements regarding future results and unaudited and forward-looking financial information, as well as the company's future performance and or 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.
Speaker Change: 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.
Jon Bluth: 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 refer to the earnings press release posted in the press releases section of our investor relations website at www.biocryst.com. I'd now like to turn the call over to John Stonehouse.
Speaker Change: And be accessed on our website. In addition to 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 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 Stonehouse: Thanks, Jon. Our second quarter performance with Orladeo was nothing short of amazing. Especially when you recall the great start we had in the first quarter. This performance is due to the confidence we have seen from our customers since late last year, and it continues to build. Physicians who treat HAE in many of their patients are experiencing firsthand how well Orladea works and that they can achieve this control with an oral once-daily therapy. Efficacy and convenience.
Jon Stonehouse: Thanks, John our second quarter performance with Orla Dale is nothing short of amazing, especially.
Jon Stonehouse: Especially when you recall great start we had in the first quarter. This performance is due to the confidence we are seeing from our customers since late last year and it continues to build.
Speaker Change: Physicians, who treat H AE and many of their patients are experiencing firsthand, how well Orla day of works and that they can achieve this control with an oral once daily therapy efficacy and convenience.
Jon Stonehouse: Many patients are experiencing efficacy similar to what they had on injectable therapy. As a result, halfway through the fourth year since approval, we are experiencing demand as strong as at the start of the launch. Amazing.
Speaker Change: And many patients are experiencing efficacy similar to what they had an injectable therapy.
Speaker Change: As a result halfway through the fourth year since approval we.
Speaker Change: We are experiencing demand as strong as the start of the launch amazing.
Jon Stonehouse: This confidence has also led us to increase our guidance for the year to between $420 and $435 million. Charlie will provide more details on the quarter and share why the evidence is increasingly clear we are on a path to $1 billion a peak. I'd also like to give you an update on our pipeline. Remember, our goal with this investment is to bring our next meaningful therapy to patients living with rare diseases like we did with Orladeo. We continue to make great progress overall in advancing our programs.
Speaker Change: This confidence has also led us to increase our guidance for the year to between 420 and $435 million.
Speaker Change: Charlie will provide more details on the quarter and share why the evidence is increasingly clear we are on a path to $1 billion at peak.
Charlie: I'd also like to give you an update on our pipeline remember our goal with assessment is to bring to market. Our next meaningful therapy to patients living with rare diseases like we did with all the data.
Speaker Change: We continue to make great progress overall advancing our programs.
Jon Stonehouse: First, we remain on track to file for approval in younger children down to two years of age with the oral granule formulation of Orladeo next year. This is a very important patient population whose parents have been waiting for this therapy. Think about it.
Charlie: First we remain on track to file for approval in younger children down to two years of age with the oral granule formulation of oil a day on next year.
Charlie: This is a very important patient population, whose parents had been waiting for this therapy.
Charlie: Think about it if your child is having each HAE attacks. The only current treatment is injecting them any parent knows how dramatic that is.
Jon Stonehouse: If your child is having HA attacks, the only current treatment is injecting them. Any parent knows how traumatic that is. So to bring a therapy they can sprinkle in a glass of water or on soft food is a game-changer for these families. We are wrapping up the trial, and preparation is in full gear for this filing and launch. Next, I'd like to update you on BCX10013, our oral factor D inhibitor. We have shared data from our P&H dose-ranging clinical trial with potential partners. There were no safety concerns.
So to bring a therapy they can sprinkle in a glass of water on soft food is a game changer for these families.
Speaker Change: We are wrapping up the trial and preparation is in full gear.
Speaker Change: For this filing and launch.
Next I'd like to update you on <unk> 10 zero 13, our oral factor D inhibitor we.
Speaker Change: We have shared data from the teenage dose ranging clinical trial with potential partners.
Speaker Change: There were no see churns, the drug has been safe and well tolerated at all doses studied however, while we are seeing some activity in ph patients the effect seen was less than other therapies on the market.
Jon Stonehouse: The drug has been safe and well tolerated at all doses studied. However, while we are seeing some activity in teenage patients, the effect seen was less than other therapies on the market. As a reminder, early this year, we announced that we had planned to stop spending on the program and reduce staff accordingly while seeking a potential partner. However, potential partners have declined to make the additional investment required to evaluate higher doses.
Speaker Change: As a reminder, early this year, we announced that we had planned to stop spending on the program and reduced staff accordingly, while seeking a potential partner.
Speaker Change: Potential partners have declined to make the additional investment required to evaluate higher doses. Therefore, we will now discontinued development consistent with the plan. We described in January.
Jon Stonehouse: Therefore, we will now discontinue development consistent with the plan we described in January. Regarding the rest of the pipeline, we have two exciting new molecules moving towards the clinic. We remain on track to start dosing healthy volunteers this year with our KLK5 inhibitor B6-17725 for patients living with Netherton syndrome. We are also on track to begin dose-ranging patients in our DME clinical trial next year with Vorostad. This will likely give us data on patients in both programs by the end of next year to inform us on activity and dose. So exciting progress in both programs. Finally, our complement programs with our bifunctional fusion protein and oral C5 inhibitor are also progressing towards selecting lead candidates. Let me wrap up with two more important points.
Speaker Change: Regarding the rest of the pipeline, we have two exciting new molecules moving towards the clinic, we remain on track to start dosing healthy volunteers. This year with our KL K five inhibitor Bcf $70 75 for patients living with Netherton syndrome. We are also on track to begin dose ranging patients in our D me.
Speaker Change: Clinical trial next year with a oral stat.
Speaker Change: This will likely give us data in patients in both programs by next year to inform us on activity and dose.
Speaker Change: So exciting progress in both programs.
Speaker Change: Finally, our complement programs with our bifunctional fusion protein and oral C. Five inhibitor are also progressing towards selecting lead candidates.
Speaker Change: Let me wrap up with two more important points first we are committed to accelerating our path to profitability to become independent of the capital markets for funding.
Jon Stonehouse: First, we are committed to accelerating our path to profitability to become independent of the capital markets for funding. Anthony will share more details, but we are well on our way to delivering on that commitment. And second, our impressive performance this quarter and for the first half of this year is a direct reflection of the commitment our employees have to our patients. This was an amazing quarter of performance on many fronts, and I want to thank every BioCryst employee for getting us here and for the momentum they have created to continue this throughout the remainder of the year. Now I'd like to turn it over to Charlie to review the Orladeo quarterly performance.
Speaker Change: Anthony will share more details, but we are well on our way to delivering on that commitment.
Anthony: And second our impressive performance this quarter and for the first half of this year is a direct reflection of the commitment of our employees have to our patients.
Speaker Change: This was an amazing quarter of performance on many fronts and I want to thank every biocryst employees for getting us here and for the momentum. They have created to continue this throughout the remainder of the year now.
Now I'd like to turn it over to Charlie to review the Orla Dale quarterly performance.
Charlie Gayer: Thanks Jon. It was an absolutely great quarter with over $108 million in global revenue against our expectation of $97 million. Demand remained strong, and it was the key driver of our 34% year-over-year revenue growth. New patient prescriptions for the past three quarters continue to equal the high demand we experienced in the very first three quarters of the launch three years ago. But operational improvements made an immediate difference that drove her performance in the quarter.
Charlie: John It was an absolutely great quarter with over $108 million in global revenue against our expectation of $97 million.
Charlie: Demand remains strong and it was the key driver of our 34% year over year revenue growth new patient prescriptions for the past three quarters continue to equal the high demand we experienced in the very first three quarters of the launch three years ago.
Speaker Change: But operational improvements made the immediate difference that drove her performance in the quarter.
Charlie Gayer: The investments in our team that we have described previously are paying off significantly. The percentage of patients on paid therapy, for example, is up nearly 3% since the end of 2023, from 71.5% to 74.4%. This is ahead of our expectations.
Speaker Change: The investments in our team that we have described previously are paying off significantly.
Speaker Change: The percentage of paid therapy. For example is up nearly 3% since the end of 2023 from 71, 5% to 74, 4%.
Speaker Change: This is ahead of our expectations.
Charlie Gayer: Of note, we are up to a paid patient rate of 82% among commercially insured patients. Recall that about 60% of our patients are commercial, and the paid rate in this segment is up from 79% at the end of 2023 and 72% at the end of 2022. This progress makes our long-term expectation to reach 85% paid even more clear. Other aspects, such as increased patient compliance and retention against our Q2 expectations, added to this great result, and we see these improvements as sustainable. With that base of improving operations, let's move to long-term demand and overall market opportunity.
Speaker Change: Of note, we are up to a paid patient rate of 82% among commercially insured patients recall that about 60% of our patients are commercial and the paid rate. In this segment is up from 79% at the end of 2023 and 72% at the end of 2022. This.
This progress makes our long term expectation to reach 85% paid even more clear.
Speaker Change: Other aspects such as increased patient compliance and retention against our Q2 expectations added to the Great result, and we see these improvements being sustainable.
With that base of improving operations, let's move to the long term demand and overall market opportunity.
Charlie Gayer: Patients have long told us that they want a convenient oral route of administration to prevent attacks. But they won't compromise on efficacy, and nor will their physicians. Our long-term data and real-world evidence are convincing patients and their physicians that both are possible with Orladeo, efficacy and convenience. The cornerstones of this motivating message are the 91% reduction in attacks versus baseline in our pivotal trial and the growing and consistent body of real-world evidence that reflects the favorable experiences of individual patients and physicians, all with one capsule once a day.
Speaker Change: Patients have long told us that they want a convenient oral route of administration to prevent attacks, but they won't compromise on efficacy and nor will their physicians.
Speaker Change: Our long term data and real world evidence are convincing patients and their physicians that both are possible with orla Dale efficacy and convenience.
Speaker Change: The cornerstones to this motivating message, 91% reduction in attacks versus baseline in our pivotal trial and the growing and consistent body of real world evidence that reflects the favorable experiences of individual patients and physicians all with one capsule once a day.
Charlie Gayer: Physicians are increasingly confident that Orladeo will be effective as well as convenient for their patients, and physician confidence translates to patient confidence, particularly for the many patients who would prefer oral prophylaxis therapy, regardless of their treatment history. Slide 8 of today's presentation shows that 52% of all patients starting Orladeo to date switched after having experience with other HA prophylaxis therapies, 32% with a history of on-demand treatment only, and 17% were treatment naive.
Speaker Change: Physicians are increasingly confident that orla Dale will be effective as well as convenient for their patients and physician confidence translates to patient confidence, particularly for the many patients who would prefer oral prophylaxis therapy, regardless of their treatment history.
Speaker Change: Slide eight of today's presentation shows that 52% of all patients starting early day I owe to date switched after having experience with other H a prophylaxis therapies.
Speaker Change: 32% with a history of the on demand treatment only and.
Speaker Change: 17% were treatment naive.
Charlie Gayer: Again, regardless of their prior treatment experience, most patients do well. As you can see on slide 10, 61% of prior prophylactic patients and 67% of prophy-naive patients who start on Orladeo and reach paid status stay on therapy for at least a year. What's notable is that patient retention is similar whether patients are starting Orladeo or injectable prophylaxis, as you can see from a preliminary analysis of claims data on slide 11. This is not surprising, at least to us, based on our internal data and what we hear from patients. But this point is worth repeating.
Speaker Change: Regardless of their prior treatment experience most patients do well as you can see on slide 10, 61% of prior prophage and 67% of Profi naive patients who start on Orla Dale and reach paid status.
Speaker Change: Hey on therapy for at least a year.
Speaker Change: What's notable is that the that patient retention is similar whether patients are starting orla Dale or injectable prophylaxis as you can see from a preliminary analysis of claims data on slide 11.
Speaker Change: This is not surprising at least to us based on our internal data and what we hear from patients but at this point is worth repeating.
Charlie Gayer: There is no statistical difference in one-year retention for patients starting Orlodeo, Lanodelumab, or C1 inhibitor prophylaxis. However, I will point out that the one-year retention on Orladeo of 61% is numerically higher than the other two. So why are patients staying on Orlodeo at such high rates, rates that are comparable to other prophytherapies? Patients have told us, individually and in large market research studies, that they would prefer to control their attacks with a daily pill.
Speaker Change: There is no statistical difference in one year retention for patients starting orla down land at Delhi, a mab or C. One inhibitor prophylaxis.
Speaker Change: I'll point out however that the one year retention on early day or a 61% is numerically higher than the other two.
Speaker Change: So why are patients staying on Orla day out with such high rates rates that are comparable to other profi therapies.
Speaker Change: Patients have told us individually and in large market research studies that they would prefer to control their attacks with a daily pill.
Charlie Gayer: This includes half the patients currently on injectable prophylaxis, as you can see from a recent survey of 120 patients shown on slide 12. They shared their motivators to switch in that same market research study. No needles, no preparation, freedom to travel, feeling normal, and forgetting they have HAE are all part of their dream. Orladeo is delivering on that dream.
Speaker Change: This includes half the patients currently on injectable Prophage as you can see from our recent survey of 120 patients shown on slide 12.
Speaker Change: They shared their leaders to switch in that same market research study no needles, no preparation freedom to travel feeling normal and forgetting they have H E are all part of their dream.
Speaker Change: Orlando is delivering on that dream.
Charlie Gayer: In large, results from large surveys of patients taking Orladeo, you can see, that you can see on slide 14, approximately 80% said they were having fewer attacks than they did before starting on Orladeo, and about 75% told us they were having less severe attacks. Overall, about 9 in 10 patients told us their attack control was at least as good as it was previously. And yes, those patients who switched from injectable prophylaxis told us the same thing. This is what efficacy and convenience look like. So what does this lead to?
Speaker Change: And large in results from large surveys of patients taking oral are down you can see that you can see on slide 14, approximately 80% said they are having fewer attacks than they did before starting or on Orlando and about 75% told us they're having less severe attacks.
Speaker Change: Overall about nine and 10 patients told us their attack control was at least as good as it was previously.
Speaker Change: And yes, those patients who switched from injectable prophylaxis told us the same thing.
Speaker Change: This is what efficacy and convenience looks like.
Speaker Change: So what does this lead to.
Charlie Gayer: Well, recent market research with large samples of allergists and immunologists, shown on slide 15, indicates that over 9 in 10 HAE treaters now consider prescribing Orladeo for their patients. And over 50% of current prescribers are extremely likely to prescribe Orladeo again compared to under 30% a year ago. That is a big shift in just a year. Why have they shifted?
Speaker Change: Recent market research with large samples of allergist immunologist shown on slide 15 indicates that over nine and 10 H HAE treaters now consider prescribing <unk> for their patients.
And over 50% of current prescribers are extremely likely to prescribe again compared to under 30% a year ago.
Speaker Change: That is a big shift over a year.
Speaker Change: Why have they shifted.
Charlie Gayer: because they have seen the evidence. Not only have we shown it to them, but they have also heard the evidence directly from their patients. This increasing enthusiasm for physicians matches well with the considerable opportunity that remains for Orladeo. For example, the market research on slide 12 shows that three out of four patients currently on injectable prophylaxid are willing to switch. We also have updated administrative claims-based studies to size the market, which you can see on slide 9.
Speaker Change: Because they have seen the evidence not only if we've shown it to them, but they are also heard the evidence directly from their patients.
Speaker Change: This increasing enthusiasm from physicians.
Speaker Change: Physicians matches, well with the considerable opportunity that remains for all of them for.
Speaker Change: For example, the market research on slide 12 shows that three out of four patients currently on injectable profi are willing to switch.
Speaker Change: We also have updated administrative claims based studies to size the market that you can see on slide nine.
Charlie Gayer: Since we first did these studies prior to the Orladeo launch, the number of treated HA patients in the U.S. has grown to 8,500, and the total number of HA patients has increased to over 11,000. As I described earlier, patients from all segments are benefiting from Orladeo with comparable success in treatment outcomes, patient retention, and rate of paid therapy. Even with a strong first three years of the launch and 2,500 prescriptions through the end of 2023, fewer than one in four USHA patients have tried Orladea.
Speaker Change: Since we first did these studies prior to the Orla day to launch the number of treated patients in the U S has grown to 8500 and the total number of patient.
Speaker Change: Hey patients has increased to over 11000.
Speaker Change: As I described earlier patients from all segments are benefiting from Orla Dale with comparable success in treatment outcomes patient retention and rate of paid therapy.
Speaker Change: Even with the strong first three years of the launch and the 2500 prescriptions through the end of 2023.
Speaker Change: Fewer than one in four U S. H H patients has tried Orlando.
Charlie Gayer: With a high patient desire for oral therapy and the growing physician intent to prescribe, there is way more opportunity in front of us than behind us. Finally, it is also increasingly clear that our global expansion is working. Ex-U.S. sales in the second quarter were $12.4 million, up 51% year over year.
Speaker Change: With a high patient desire for oral therapy, and the growing physician intent to prescribe there is way more opportunity in front of us than behind us.
Speaker Change: Finally, it is also increasingly clear that our global expansion is working.
Speaker Change: U S sales in the second quarter were $12 $4 million up 51% year over year.
Charlie Gayer: We recently exceeded 500 patients in Europe, and we are already selling Orladeo in over 20 countries globally, with many more actively preparing for market authorization, access, and launch. To summarize, the operational improvements we saw in Q2 on top of what we saw in Q1 mean that the increasing paid rates and high patient compliance are sustainable. And we are on track toward our long-term goal of 85% paid treatment in the U.S. In addition, patient and prescriber confidence is growing stronger because both groups are experiencing not just the convenience but also the efficacy of Orladeo.
Speaker Change: We recently exceeded 500 patients in Europe, and we are already selling Orlando in over 20 countries globally with many more actively preparing for market authorization access and launch.
Speaker Change: To summarize the operational improvements we saw in Q2 on top of what we saw in Q1.
Speaker Change: It means that the increasing pay rates and high patient compliance are sustainable and.
And we are on track toward our long term goal of 85%.
Speaker Change: Paid treatment in the U S.
Speaker Change: In addition, patient and prescriber confidence are growing stronger because both groups are experiencing not just the convenience, but also the efficacy of oil a day.
Charlie Gayer: We've been describing a billion dollars in peak global revenue for Orladeo for a few years now, and the path to that sustainable peak is increasingly clear. Now, I'll hand the call over to Anthony to describe our financial performance.
Speaker Change: We have been describing a $1 billion in peak global revenue for oil a day or for a few years now.
Speaker Change: The path to that sustainable peak is increasingly clear.
Anthony Doyle: And Orladeo revenues in the past 12 months are over $370 million. Of the $108.3 million of global Orladeo revenue, $95.9 million came from U.S. sales, with the remaining $12.4 million, or 11.4%, coming from non-U.S. sales. Operating expenses not including non-cash stock compensation for the quarter were $87.4 million, a decrease of $6.2 million from Q1 of this year and a decrease of $3 million from Q2 of 2023. Full year 2024 guidance for OPEX remains unchanged at between $365 and $375 million.
Speaker Change: Now I will hand, the call over to Anthony to describe our financial performance.
Anthony: Thanks, Charlie.
Anthony: It's very encouraging to see yet another really strong quarter for all of their great work by the whole team.
Anthony: You can find our detailed second 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 $109 3 million and as Charlie said $108 3 million in fact came from Orlando.
Charlie: 34% increase in order of the day, our revenue over the same quarter last year and Orlando our revenues in the past 12 months are over $373 million.
The $108 3 million of global or their revenue $95 $9 million came from U S sales with the remaining $12 4 million or 11, 4% coming from ex U S sales.
Charlie: Operating expenses, not including noncash stock compensation for the quarter were $87 4 million a decrease of $6. Two from Q1 of this year and a decrease of $3 million from Q2 of 2023.
Charlie: Full year 2024 guidance for Opex remains unchanged at between 365 and $375 million.
Anthony Doyle: We achieved an operating profit for the quarter of $21.9 million excluding non-cash.com and an operating profit of $8.8 million even when including non-cash.com, which was $13.2 million for the quarter. Cash at the end of the quarter was at $338.1 million, and net cash utilization for the quarter was just $213,000. We had guided to net cash utilization of between $10 to $12 million per quarter for the remainder of the year. I think the main driver for the improvement in cash flow for Q2 was the increase in revenue versus forecast of over $11 million. For the remaining two quarters of 2024, I expect net cash utilization to average out at single-digit millions of dollars per quarter.
Charlie: We achieved an operating profit for the quarter of $21 $9 million, excluding noncash stock comp and an operating profit of $8 $8 million, even when including noncash stock comp, which was $13 $2 million for the quarter.
Charlie: Cash at the end of the quarter was up $338 $1 million and net cash utilization for the quarter was just $213000.
Charlie: We had guided to net cash utilization of between 10 to 12 million per quarter for the remainder of the year.
Charlie: The main driver for the improvement in cash flow for Q2 was the increase in revenue versus forecast of over $11 million.
Charlie: For the remaining two quarters of 2024, I expect Nash kind of net cash utilization to average out at single digit millions of dollars per quarter.
Anthony Doyle: We're even more confident in our guidance of having quarterly positive cash flow late next year, and more strong quarters like we saw in Q2 may help us to accelerate that. To be clear, from both an operational and a financial perspective, Q2 was a stellar quarter. Let's also be clear that this is not a one-off or an anomaly.
Charlie: We're even more confident in our guidance of having quarterly positive cash flow late next year and more strong quarters like we saw in Q2 may help us to accelerate that.
Charlie: Yeah.
Charlie: To be clear from both an operational and financial perspective, Q2 was a stellar quarter.
Charlie: It's also be clear that this is not a one off or an anomaly. The performance of the commercial team both in the U S and ex U S. Since the launch of Orlando has been nothing short of terrific and yes, Q2 over achieved even our initial expectations.
Anthony Doyle: The performance of the commercial team both in the U.S. and ex-U.S. since the launch of Orladeo has been nothing short of terrific. And yes, Q2 overachieved even our initial expectation. If asked if this was a surprise, I would answer no.
Anthony Doyle: I've stopped being surprised given what this team has achieved since launch and given the immense success that we have seen patients achieve while on Orladeo to achieve both efficacy and convenience with this best-in-class drug. This continued strength is what gives us the confidence to increase our 2024 revenue guidance for Orladeo so significantly to between $420 and $435 million, a $30 to $35 million increase in the range, and an approximate $100 million increase over last year's total.
Charlie: <unk> was this a surprise I would answer no I've stopped being surprised given what this team has achieved since launch and given the immense success that we have seen patients have while on Orlando to achieve both efficacy and convenience with this best in class drug.
Charlie: This continued strength is what gives us the confidence to increase our 2020 for revenue guidance for Orlando, So significantly to between 420 and $435 million of $30 million to $35 million increase in the range and an approximate $100 million increase over last year's total.
Anthony Doyle: As another positive, the entirety of that additional 30 to $35 million is at a lower royalty rate of 7.5%, which would bring the blended royalty rate down by 30 to 50 basis points versus our prior guide, with OPEX guidance unchanged at flat to last year, more confident about our past profitability with an operating profit for the full year this year, EPS and cash flow positivity on a quarterly basis next year, and full year EPS positive and cash flow positive in 20 The operator will now open it up for Q&A. We will now begin the question and answer session.
Charlie: As another positive the entirety of that additional $30 million to $35 million is that the lower royalty rate of seven 5%, which would bring the blended royalty rate down by 30 to 50 basis points versus our prior guidance.
With Opex guidance unchanged at flat to last year, we're even more confident about our path to profitability with an operating profit for full year. This year EPS and cash flow positivity on a quarterly basis next year and full year EPS positive and cash flow positive in 2026.
Speaker Change: Operator, we'll now open it up for Q&A.
Operator: We will now begin the question and answer session. To ask a question, you may press star and then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: We will now begin the question and answer session.
Speaker Change: Any question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.
Speaker Change: At any time. Your question has been addressed and you would like to withdraw your question. Please press Star and then two our first question comes from <unk> Ahmed.
Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Tazeen Ahmad with Bank of America. Please go ahead. Is your line on mute? We're going to transition to Jessica Fye with J.P. Morgan. Please go ahead.
Speaker Change: Please go ahead.
Speaker Change: Yeah.
Speaker Change: I'm Ed with Bank of America. Please go ahead.
Speaker Change: Is your line on mute.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: We're going to transition to Jessica Fye with Jpmorgan. Please go ahead.
Nick Khan: Hey, this is Nick Khan for Jessica. Congratulations on the quarter and thanks for taking our questions. So, based on these results, including the updated guidance for LIDEO and maintained expectations around operating expenses, can you discuss your level of, you know, feeling around if you could reach GAAP operating profits in 2024 and not just full year operating profits, excluding non-cash stock compensation?
Speaker Change: Hey, this is Nick on for Jessica Congrats on the quarter and thanks for taking our questions.
Speaker Change: So based on these results, including the updated guidance for all the detail and maintained expectations around operating expenses.
Speaker Change: Could you discuss your level of you know.
Speaker Change: Feeling around if you could reach GAAP operating profits in 2024, and not just full year operating profit excluding noncash stock compensation.
Anthony Doyle: Yeah, Q2, as it relates to both revenue and our control of operating expenses, like we said, we're terrific. And so what we have guided to previously was getting there, not including non-cash stock compensation. We're still guiding to that. Is there a chance that we could get there, even including the non-cash stock compensation? Absolutely. It just depends on, you know, for the remainder of the year, revenue, and then the offset between that and. But what I would point to is our increased confidence of getting there, excluding non-cash stock.
Speaker Change: Yeah Q2, as it relates to both revenue and our control on operating expenses like we said were terrific and so what we have guided to previously was getting theyre not including noncash stock compensation were still guiding to that is there a chance that we would get there even include.
Speaker Change: Putting the noncash stock compensation, absolutely just depends on you know for the remainder of the year revenue and then the offset but as green dot in Opex, but.
Speaker Change: But what I would guide to is our increased confidence of getting there.
Speaker Change: Excluding noncash stock comp.
Anthony Doyle: Okay, and then within that raised guidance for Orladeo, can you just discuss in a bit more detail your underlying assumptions around new patient starts, percent of patients on paid drugs, and maybe compliance retention for the remainder of the year, and how that could change versus 1Q and 2Q? Sure, yeah.
Speaker Change: Okay, and then within that raised guidance for Orlando are there can you just discuss in a bit more detail your underlying assumptions around new patient starts at the percent of patients on paid drug and maybe compliance retention for the remainder of the year and how that changes could change versus a one team in Tokyo.
Charlie Gayer: Sure. Yeah, Nick, we've, as you know, we've reported very consistent new patient starts. And then the last three quarters have been even stronger, as strong as the first three quarters of the launch. So we would expect consistent demand, based on all the metrics that I've described today. As far as the paid rate, like I said, we're ahead of our expectations. We're not expecting major increases for the rest of the year. The goal is to at least hold that consistent with the 74.4 that we were at the end of Q2.
Sure Yeah Nick.
Speaker Change: As you know we've reported very consistent new patient starts and then the last three quarters had been.
Speaker Change: Even stronger as strong as the first three quarters of the launch so we would expect the the the consistent demand to be.
Speaker Change: Just on all the metrics that I described today as far as paid rate.
Speaker Change: Like I said, where we're ahead of our expectations.
Speaker Change: We are not expecting major increases for the rest of the year. The goal is to at least hold back consistent with with 74 four that we were at the end of Q2.
Charlie Gayer: And compliance is just really strong. So compliance at this point, if you measure it by the number of treatment days available to your overall patient population and then the number of drug days basically delivered, we're in the mid-90s at this point, and we would expect that to continue.
Speaker Change: And compliance is just really strong so compliance at this point if you measure it by the number of treatment days available to your overall patient population and then the number of.
Speaker Change: Drug days basically delivered were in the mid 90% at this point and we would expect that to continue.
Charlie Gayer: Great, thanks so much. And our next question comes from Tazeen Ahmad with Think of America. Please go ahead. Hi guys, can you hear me? Yes, okay.
Speaker Change: Great. Thanks, so much.
Tazeen Ahmad: And our next question comes from Tazeen Ahmad with Think of America. Please go ahead.
Speaker Change: And our next.
Western comes from <unk> Ahmed with Bank of America. Please go ahead.
<unk> Ahmed: Hey, guys can you hear me.
Yep Yep.
Speaker Change: Great. Thank you.
Speaker Change: Can I ask a question about.
Speaker Change: The pipeline.
Speaker Change: Our focus now another 10 disease.
Speaker Change: And then can you talk about the data that you've collected internally that that gives you confidence in pursuing this particular molecule.
Speaker Change: Haitian and maybe the cadence of data can we expect over the next year or so thanks.
Speaker Change: Sure. So let me take that last piece first the cadences that we for 17 75, we are proceeding into first in human this year.
Jon Stonehouse: Sure, so let me take that last piece first. The cadence is that we, for 1775, are proceeding into first in human history this year, and so that's an important milestone to keep in mind for this program. In terms of the data that we have to support that, we have all of the required data to be able to proceed to the first in humans. Generally, that includes safety from a non-clinical toxicology perspective, as well as data to support the importance of the mechanism for treating the disease and the potential to improve clinical symptoms in patients.
Speaker Change: And so that's that's an important milestone to keep in mind for this program.
Speaker Change: Terms of the data that we have to support that we have all of the required data to be able to proceed for Stephen generally that includes.
Speaker Change: Safety from a non clinical toxicology perspective as well as.
Speaker Change: Data to support the importance of the mechanism for treating the disease and the potential to improve clinical symptoms in patients who have non clinical data for both safety and efficacy that supported the preceding to humans. We also have data around.
Jon Stonehouse: So we have non-clinical data for both safety and efficacy that's supportive of proceeding to humans. We also have data around the likely exposure range, and we will be going to first in humans this year. Yeah, and Helen and I were in Birmingham this week, and we got to see the
Speaker Change: The likely exposure range, and we will be going into first in human this year.
Jon Stonehouse: Yeah, and Helen and I were in Birmingham this week, and we got to see the animal model work that the team is working on. It's an inflammation model, and it was really impressive what we saw. The control animals had inflammation, and then the inflammation went down with each higher dose. So the key is that you not only have good drug levels, but the drug levels get to the target, which is the skin, and so far, so good. So we're hoping we'll see that in humans as well.
Helen: Yeah, and Helen and I were in Birmingham. This week and we got to see the animal model work that the team is working on it and inflammation model and it was really impressive what we saw the control animals have in inflammation and then the inflammation going down with each higher dose. So the key is that you not only have good drug levels, but the drug levels get.
Helen: The target, which is the skin and so far so good so we're hoping we'll see that in humans as well.
Helen: Yeah.
Helen: Yes.
Brian Abrahams: The next question comes from Brian Abrahams with RBC Capital Markets. Please go ahead. Hey, good morning.
Helen: The next question comes from Brian Abrams with RBC capital markets. Please go ahead.
Charlie Gayer: Hey, good morning. Thanks for taking my questions and congrats on the quarter. I'm wondering if you could maybe elaborate a little bit more on, you know, why we saw such a big uptick in the paid drug revenue, just on a quarter over quarter basis, and maybe some of the seasonal trends underlying that versus kind of operational trends. And then can you talk a little bit more about the inputs that went into your resizing of the HAE market, and I guess just in terms of the additional thousand patients. And I was just kind of wondering if you could talk about the characteristics or anything you've learned about those additional patients who are out there, how accessible they are, and what you might need to do to engage them. Thanks.
Hey, good morning, Thanks for taking my questions and congrats on the quarter.
Brian Abrams: I'm wondering if you could maybe elaborate a little bit more on why we saw such a big uptick in the in the paid drug just on a quarter over quarter basis, and maybe some of the seasonal trends underlying that versus kind of operational trends.
Speaker Change: And then can you talk a little bit more about the inputs that went into your re sizing of the HLA market.
Brian Abrams: And.
Speaker Change: I guess just in terms with the additional 1000 patients and just kind of wondering if you could talk about the characteristics or anything you've learned about those additional patients who are out there how accessible they are what you might need to do to to engage them. Thanks.
Brian Abrams: Hey, Brian.
Charlie Gayer: Brian, first off on the uptick in the paid, as I mentioned in my comments, and we've talked about this before, we've invested a lot in the team to really make sure that we are helping patients and healthcare providers do everything possible to not only put in kind of a complete application form up front, all the information that payers want, but then to go through the appeals process when that's necessary. And since we made that investment last year, I think the team is really hitting its stride, and that's what's making the difference.
Brian Abrams: First off on the uptick in the paid as I mentioned in my comments and we've talked about this before we've invested a lot in the team to really make sure that we are helping patients and health care providers do everything possible to to not only put in a kind of a complete start form up upfront.
Brian Abrams: All the information that payers want but then to go through the appeals process when that's necessary.
Brian Abrams: And since we made that investment last year I think the team is really hitting stride and that's that's what's making the difference it's not a seasonal factor in Q2, but the Q1 is the really the seasonal time with the reauthorization, but now is just really about every single patient and and the.
Charlie Gayer: It's not a seasonal factor in Q2, Q1 is really the seasonal time with the reauthorizations, but now it's just really about every single patient and the, you know, just the operational improvements that we've made, so I'm really pleased with their progress. As far as the resizing of the market is concerned, we've done this kind of work with claims data regularly, and you'll recall that prior to launch, we talked about 7,500 diagnosed and treated patients.
Brian Abrams: The operational improvements that we've made so I'm really really pleased with their progress as far as the resizing of the market.
Speaker Change: We've done this this kind of work with claims data regularly and Youll recall that prior to launch we talked about 7500 diagnosed and treated patients. We knew that there was a larger population of untreated patients, but we were conservative in those initial numbers that we put out what we're seeing now with.
Charlie Gayer: We knew that there was a larger population of untreated patients, but we were conservative in those initial numbers that we put out. What we're seeing now with Orladeo attracting patients from all segments, from prophy switches, from on-demand only, and then also treatment-naive patients, we're attracting all three, and so we redid the numbers. We've seen that the market has grown. We think a good portion of that growth is due to our promotion with Orladeo, and so we thought it was time to update the overall numbers.
Speaker Change: Orlando attracting patients from all segments from proceeds switches from on demand only and then also treatment naive patients we're attracting all three and so we redid. The numbers we have seen that the market has grown we think a good portion of that growth due to our promotion with orla.
Speaker Change: And so we thought it was time to update the overall.
Charlie Gayer: Got it. Thanks so much for the call, Charlie.
Speaker Change: Got it thanks, so much for the color Charles.
Speaker Change: Yeah.
Chris Raymond: And the next question comes from Chris Raymond with Piper Sandler. Please go ahead.
Speaker Change: And the next question comes from Chris Raymond with Piper Sandler. Please go ahead.
Chris Raymond: Thanks for taking the question and congrats on the progress. Great to see.
Chris Raymond: Hey, thanks for taking.
Chris Raymond: The question and congrats on the progress great to see.
Chris Raymond: Just on maybe one question on Orladeo, one on the pipeline. So I was kind of struck by your patient activation slide with the marker research showing that, you know, you know, essentially three and four patients are willing to switch. Can you maybe give a little bit more color on that?
Chris Raymond: Maybe one more question on or the day on one on the pipeline so.
Speaker Change: It was kind of in.
Speaker Change: Struck by your.
Speaker Change: Your patient activation slide with.
Speaker Change: The market research showing that.
Speaker Change: Essentially three and four patients are willing to switch maybe give a little bit more color on.
Charlie Gayer: You know, as you sort of distill those patients down, how do you activate those patients? That would seem to be a dynamic that would, you know, indicate, you know, certainly understand why your guidance has been raised here, but that there's maybe a little bit more opportunity if you can really convert all those patients. So maybe, you know, how many of those do you think are really, you know, candidates for activation? And then maybe just a pipeline question.
Speaker Change: As you sort of distill those patients down how do you activate those patients that would seem to be.
Speaker Change: The dynamic that would indicate.
Speaker Change: Certainly understand why your guidance has been raised here, but that theres, maybe a little bit more opportunity. If you can really convert all of those patients so maybe how.
Speaker Change: How many of those do you think are really.
Speaker Change: No candidates for activation.
And then maybe just.
Speaker Change: Just a pipeline question.
Charlie Gayer: You know, with respect to the Netherton syndrome program, just maybe talk about why you think a KLK5 inhibitor would be effective in this population and just look at some of the other programs that are in this disease. Talk about maybe how you look at the differentiation.
Speaker Change: With respect to.
Speaker Change: The another syndrome program.
Speaker Change: Maybe talk about why you think okay. Okay five inhibitor would be effective in this population.
Speaker Change: And just looking at some of the other programs that are in this disease talk about maybe how you look at the differentiation.
Speaker Change: <unk>.
Charlie Gayer: I'll start with the question about patient activation. Yeah, we're thrilled to see that so many patients are willing to switch and so many patients who are on injectable prophylaxis, and that that has continued and actually grown throughout the launch.
Speaker Change: I'll start with.
Speaker Change: With the question about the patient activation yeah.
Speaker Change: We're thrilled to see that there's so many patients are willing to switch and so many patients who are on injectable prophylaxis and that that that's continued and actually grown throughout the launch we have a number of ways that we try to activate them. We have extensive digital marketing other kind of direct maher.
Charlie Gayer: We have a number of ways that we try to activate them. We have extensive digital marketing, and other kinds of direct marketing programs to patients. But I'll say the number one way to activate them is to make them aware that Orladeo is out there and then to make sure that their healthcare providers are confident in the product. And what you can see from the data I've shown you today is that physicians are increasingly confident, and I think when physicians have that conversation with their patients about all of their treatment options, you combine that with the strong patient desire for oral therapy and the willingness to switch, that is what is going That's going to be the strongest driver.
Speaker Change: <unk> programs to patients, but I'll say the number one way to to activate them is to make them aware that Orlando is out there and then to make sure that their health care providers are confident in the product and what you can see from the data I've shown you today as <unk>.
Speaker Change: Physicians are increasingly confident and I think when physicians have that conversation with their patient about all of their treatment options you combine that with the patient the strong patient desire for oral therapy and the willingness to switch that is what is going to activate more patients to switch that's going to be the strongest driver.
Jon Stonehouse: Maybe I'll start and then pass it to you, so it's a great question because we're really excited to bring something forward that actually treats the underlying disease rather than the inflammation due to the disease, but I'll let Helen talk a bit more about it.
Speaker Change: Yes, maybe I'll start and then pass it to use so it's a great question, because we're really excited to bring something forward that actually treats the underlying disease rather than the inflammation in the system.
Speaker Change: The inflammation due to the disease, but I'll let.
Speaker Change: Helen talk a bit more about it yeah. Thanks, John so.
Helen Thackray: Yeah, thanks, Jon. KLK-5 is dysregulated in Netherton syndrome. That's the cause of the disease. So a KLK-5 inhibitor is a way to replace the function that's missing and improve the cause of the disease. So we believe we have a differentiated product for this for two different reasons. One, we've achieved very, very high potency with our drug, and that means that we could potentially deliver a subcutaneous dose and also deliver it on a less frequent basis than is typical for this type of therapy. And so two, in terms of the mechanism, as well as preventing the downstream inflammation that causes other effects in the disease.
Okay. Okay. Five is dis regulated another chin syndrome, that's the cause of the disease. So okay. Okay. Five inhibitor is a way to.
Helen: The function, that's missing and improve the cause of the disease.
Speaker Change: So we believe we have a differentiated product for this for two different reasons. One we've achieved very very high potency with our drug and that means that we could potentially deliver a subcutaneous dose and also deliver it on a less frequent basis than is typical for this type of therapy.
Speaker Change: And so too are in terms of the the mechanism important just to go back to that can't pay five.
Speaker Change: Dysregulation is the cause of the disease. This approaching this target means that you don't just affect the cause of the disease and the skin you're also affecting the downstream inflammation, whereas some other programs that are in the pipeline for this disease are affecting just the downstream inflammation. So we expect to see healing at the skin.
Speaker Change: And improvement it did you see it from that perspective as well as preventing.
Speaker Change: Preventing than the downstream inflammation that causes others other facts in this disease and one of the things you see in rare diseases like this where there's nothing to treat it as they are way more patients than you originally estimated and that's really exciting as well.
Jon Stonehouse: And one of the things you see in rare diseases like this, where there's nothing to treat them, is that there are way more patients than you originally estimated, and that's really exciting as well.
Speaker Change: Thank you.
Gina Wang: The next question comes from Gina Wang with Barclays. Please go ahead.
Speaker Change: The next question comes from Gena Wang with Barclays. Please go ahead.
Gina Wang: Thank you for taking my questions. I also want to add my congratulations on the strong quarter. So, you know, with revised guidance, just wondering, where do you see the main increase? Would that be mainly from on-demand patients, untreated patients, or continue to be from the switchover patient? And then for the pipeline assets, just wondering, were you at some point sharing the preclinical data?
Gena Wang: Thank you for taking my questions I also wanted to add my congrats on the strong quarter. So.
Gena Wang: Revised guidance, just wondering where do you see the main increase would that be mainly from on demand patients untreated patients or.
Speaker Change: Continue to be from the switch off their patients and then for the pipeline assets. Just wondering will you at some point sharing please go ahead with data.
Speaker Change: Yeah.
Gina Wang: On which program, Gina?
Gina: On which program Gina.
Gina Wang: The lead asset, the pipeline asset, the 17725.
Gina: The lead assets the type of asset so one 775, okay.
Speaker Change: Okay got it got it.
Charlie Gayer: Gina, I think what I showed today, we're thrilled that we are getting over 50% of patients from prophylaxis switches, and then we're also getting the on-demand patients and even treatment naive. We expect that to continue, and the market research that I showed on slide 12 is specific to patients on injectable prophylaxis, and you can see from that that 50% of the patients of those patients have a preference specifically for oral prophylaxis therapy, and three out of four of those patients are willing to switch, and so what I would expect is the same dynamics to continue, about half the patients coming from prophy, and then the other half coming from on-demand and treatment naive.
Speaker Change: So.
Gene: Gene I think.
Speaker Change: What I showed today, where we're thrilled that we are getting over 50% of patients from prophylaxis switches and then.
Speaker Change: We're also getting the on demand patients and even treatment naive we expect that to continue and the market research that I showed on slide 12 is specific to patients on injectable prophylaxis and you can see from that that 50% of the patients.
Speaker Change: Half of those patients have a preference specifically for oral prophylaxis therapy, and three out of four or three out of four of those patients are willing to switch and so what I would expect as the same dynamics to continue about half the patients coming from protein and then the other half coming from on demand in treatment naive.
Jon Stonehouse: While it's great to see that growth this year and growth next year is going to come from growth in patient demand, the increase in guidance for this year, a lot of that's driven by the operational activity that Charlie explained. So it's great to see both things happening simultaneously.
Speaker Change: While it's great to see.
Speaker Change: Growth this year in growth next year is going to come from that growth in patient demand the increase in the guidance for this year a lot of that's driven by the operational activity that Charlie explained so it's great to see both things happening simultaneously.
Helen Thackray: Helen, you want to take the...
Speaker Change: So when you want to take the pipeline, yes, so in terms of sharing preclinical data.
Helen Thackray: In terms of sharing preclinical data, we would, of course, publish data in the future as we have excellent results for our pipeline programs. In terms of the Nethergen syndrome program, Jon mentioned earlier the data that we have in an animal model showing changes in the skin.
Speaker Change: Yeah, I mean, we would of course publish data in <unk> in the future as we have excellent results for our pipeline programs in terms of the Netherton syndrome.
Speaker Change: Program, John mentioned earlier, the data that we have in hand.
John Bluth: Animals out model showing changes in the skin. We also have.
Helen Thackray: We also have animal model information showing the extreme potency of this molecule. We would expect to share data supporting both potency and effect. But for the purposes of today, I think it's important to know that we have sufficient information to be ready to proceed to the first in humans, and we're very excited about this program's potential. Yeah, and we're going to have human data by the end of next year, so you're going to
John Bluth: <unk> disease animal model.
Speaker Change: Information showing the extreme potency with this molecule.
Speaker Change: We would expect to share data supporting both potency and affect them.
Speaker Change: But for the purposes of today I think it's important to know that we have sufficient information to be ready to proceed to first in human and we're very excited about this program as potential yeah. We're gonna have human data by the end of next year, So you're going to start to get a sense of activity and dose by the end of next year. Both in this program and the <unk> of oral step program, which is super.
Jon Stonehouse: Yeah, and we're going to have human data by the end of next year, so you're going to start to get a sense of activity and dose by the end of next year, both in this program and the DME of OralSTAT program, which is super exciting.
Speaker Change: Exciting.
Speaker Change: Thank you.
Maurice Raycroft: Again, if you have a question, please press star and then one. Our next question comes from Maurice Raycroft with Jeffries. Please go ahead.
Speaker Change: Again, if you have a question. Please press star and then one our next question comes from Maury Raycroft with Jefferies. Please go ahead.
Charlie Gayer: Hi, good morning. I'll add my congratulations on the quarter. And thanks for taking my question. Just to follow up on the paid patient improvement this quarter, you said you could potentially get to 85% paid patients over the next few years. But it sounds like you're doing better than expected on this front. At this point, are you able to provide more clarity into when you could achieve the 85% of patients on paid trial?
Maury Raycroft: Hi, Good morning, I'll add my congrats on the quarter and thanks for taking my question.
Maury Raycroft: Just a follow up on the paid patients.
Maury Raycroft: Improvement this quarter, you said, you could potentially get to 85% paid patients over the next few years, but it sounds like you're doing better than expected on that front. At this point are you able to provide more clarity into when you could achieve that 85%.
Speaker Change: Patients on Patriot.
Charlie Gayer: Hey, Maury. I think the real key with the 85% is that it's part of our growth to $800 million in the U.S. as we achieve a billion dollars in peak sales. We previously mapped out a path to achieve that by 2029. We'll try to get there as quickly as we can, but if we get there by 2029, we will achieve that billion dollars. And based on what we've talked about today, it's increasingly clear that we're going to get there.
Speaker Change: Hey, Marty I think the real key with the 85% as you know that's part of our growth to the AED $800 million in the U S. As we achieve a.
Speaker Change: $1 billion in peaks peak sales, we previously mapped out.
Our path to that by 2029, we'll try to get there as quickly as we can but if we'd get there by 2029, we will we will achieve that that $1 billion and based on what we've talked about today, it's increasingly clear that we're going to get there.
Charlie Gayer: What I'm particularly excited about, and I noted this in my comments, is the fact that we're at 82% paid for the commercial segment, which is our biggest segment. And that just shows that we're going to get there. It's just a matter of time.
Speaker Change: What I'm, particularly excited about it.
Charlie: Noted this in my comments is the fact that we're at 82% paid already for the commercial segment, which is our biggest segment and that just shows that we're going to get there. It's just it's just a matter of time and Charlie is it fair to say that next year. It could be a really interesting year with Medicare patients in particular, and we don't want to <unk>.
Charlie Gayer: And Charlie, is it fair to say that next year could be a really interesting year for Medicare patients, in particular, and we don't want to project what we think will happen, but there's a possibility that we could make real progress there as well.
Charlie: Jack what we think will happen, but there is a possibility that we could make real progress there as well that's right theres some.
Charlie Gayer: That's right; there's an opportunity to hopefully get a lot of Medicare patients who have not been able to afford their co-payments, and that has led them to be on free products with the full introduction of the IRA next year and the max out of pocket for patients going to $2,000. That could be an opportunity that creates more affordability and thus more paid patients.
Speaker Change: There is an opportunity to hopefully get a lot of the Medicare patients have not.
Speaker Change: Ford their copayments, and that's led them to be on on free product with the full introduction of the IRA next year and the the Max out of pocket for patients go into $2000 that could be an opportunity that creates more affordability and thus more paid patients.
Charlie Gayer: Got it. That's helpful. And just to clarify, for the 74.4% for this quarter, do you expect that to be consistent for the rest of this year? Or could that potentially improve some as well?
Speaker Change: Got it that's helpful and just to clarify for the 74, 4% for this quarter you expect that to be consistent for the rest of this year or could that potentially improve some as well.
Charlie Gayer: We will always try to improve it. The time when we can make the biggest progress is during the big reauthorization season in Q1. And we did a great job in Q1, and then some of that great work bled into the early part of Q2. The rest of the year will be driven more by new patient prescriptions coming in. The opportunity to convert long-term free products over to paid will be less than it was in the first part of the year. This is kind of the seasonal cycle that we should expect going forward.
Speaker Change: We'll always try to improve at the time, where we can make the biggest progress is during the big reauthorization season in Q1, and we did a great job in Q1, and then some of that rate job bled into the early part of Q2, the rest of the year will be driven more by new patient prescriptions.
Speaker Change: <unk> coming in the opportunity to convert long term free product over to paid will be less than it was in the first part of the year.
Speaker Change: Kind of the seasonal cycle that we should expect going forward.
Maurice Raycroft: Got it. Okay. Thanks for taking my questions.
Speaker Change: Got it okay. Thanks for taking my question.
Stacy Ku: The next question comes from Stacy Ku with TD Cowen. Please go ahead.
Steve <unk>: The next question comes from Steve <unk> with PD Cowen. Please go ahead.
Stacy Ku: Wonderful. Thanks so much for taking our questions, and congratulations on the progress. So, we have a few follow-ups. First, I appreciate your detailed market research.
Steve <unk>: Wonderful. Thanks, so much for taking our questions and congratulations on the progress that we have a few follow ups.
Speaker Change: First I appreciate your detailed market research, our Kols and survey also tell us that ethanol and basketball entrants are very unlikely to impact oral prophylactic options and a J. So curious if Charlie I E can discuss long term, where they expect the oral start to stabilize.
Charlie Gayer: Our KOLs and survey also tell us that additional injectable entrants are very unlikely to impact oral prophylactic options in HAE. So, curious if Charlie or Jinki can discuss long-term where they expect the oral share to stabilize versus the injectable share. That's the first question. And then the second question is about clinician outreach. So, Charlie, can you talk about the progress this year, how many new prescribers are adopting Orladeo, and what percentage are still in the early days of prescribing?
Speaker Change: Well sure. That's the first question and then the second question is is it.
Charlie: Question on clinician outreach Charlie can you talk about the progress this year, how many new prescribers are adopting right now and what percentage is still in the early days of the prescribing just remind us our goals for this year and what target you might have for next year and then last quick.
Charlie Gayer: Just remind us of our goals for this year and what targets you might have for next year. And then, last, a quick follow-up: just can you elaborate a little bit more on the XUS versus US split in Q2? Thanks so much.
Speaker Change: Ill follow up just can you elaborate a little bit more on the ex U S versus U S. Litton's with you. Thanks, so much.
Speaker Change: Okay.
Charlie Gayer: Sure. So, on the long-term oral share, I mean, Orlodeo obviously is the only oral drug on the market, and once a day, you really can't get better than that. So, and we talked about our path to the billion dollars in 2,000 paid patients in the U.S., and so, you know, 2,000 out of over 11,000 total patients, you can imagine Orlodeo is going to get to at least about 20% share. We'll see what happens with other products in the future, but we're very confident in our overall growth.
Speaker Change: Sure.
Speaker Change: So in the long term oral share of oil a day, obviously is the only oral drug on the market in <unk>.
Speaker Change: Once a day.
Speaker Change: Really you can't get better than that.
Speaker Change: So and we talked about our path to the $1 billion in 2000 paid patients in the U S and so 2000 out of over 11000 total patients you can imagine all of the day it was going to get to at least about 20% share we'll see what happens with other products in the future, but we're very confident.
Speaker Change: And in our overall growth.
Charlie Gayer: As far as prescribers are concerned, we continue to see new prescribers coming on board. And we've talked before about our Tier 1 doctors that cover about 50% of the market, sort of 500 to 600 doctors there, and then the bigger Tier 2 group. In Q2, we got an equal number of prescriptions from both of those groups, so it continues to be very balanced. And we had a very similar number of new prescribers to what we've seen in recent quarters.
Speaker Change: The as far as prescribers, we continue to see new prescribers coming on board and we've talked before about our tier one doctors that cover about 50% of the market sort of 5% to 600 doctors there and then the bigger tier two group.
Speaker Change: In Q2, we got equal number of prescriptions from both of those groups. So very continues to be very balanced and we had.
Speaker Change: A very similar number of new prescribers to what we've seen in recent quarters.
Charlie Gayer: And as far as Adopters in the Tier 1 group, we're now at the point where over 70% of them have prescribed, and we keep chipping away at that number. We may never get to 100% with them, but we're going to get close, and all the metrics we see are doctors across the board intend to do more.
Speaker Change: As far as kind of.
Speaker Change: Adopters in the tier one group, we're now to the point, where over 70% of them have prescribed and we keep chipping away at that number will we may never get to 100% with them, but we're gonna get close and all the metrics, we see as doctors across the board intend to do more.
Charlie Gayer: Hey Charlie, on that 30%, can you talk about how things like more pro-fee medicines coming to the market and the noise of the price of drugs going up can be an opportunity, and the PEDS opportunity as well? It's a great point Jon brings up.
Charlie: Charlie on that 30%.
Charlie: Can you talk about how things like more protein medicines come into the market and and the noise of Profi going up it can be an opportunity in the peds opportunity as well.
Jon Stonehouse: So we have two big opportunities. One, we do expect... other competitive injectable products to launch. One may come as soon as the end of this year.
Charlie: It's a great point John brings up so we have two big opportunities one we do expect.
Speaker Change: But other competitors injectable products to launch one may come as soon as the end of this year.
Charlie Gayer: And with that, there's just going to be more conversation around switching patients, more treatment options, maybe lower-burden treatment injectable products. And so we're going to take advantage of that because we have the products that patients want with an oral once-daily therapy. And then PEDS, which we intend to file next year, that is an opportunity in itself, but also, there's the halo effect from that. They're, you know; it's a genetic disease.
Speaker Change: And with that Theres, just going to be more conversation around switching patients more treatment options, maybe lower burden treatment injectable products and so we're going to take advantage of that because we have the products that patients want with with an oral once daily therapy, and then peds.
Speaker Change: That we intend to file next year that is.
Opportunity in itself, but also there's the halo effect from that there, it's a genetic disease their families.
Charlie Gayer: They're families, and then they're doctors where this may become their first real experience with Orlodeo, starting with the kids, and then maybe they will move on to the rest of the family. So both of these are opportunities over the next couple of years for us. Yeah, for these KOLs that tell us, you know, not broken or don't fix it, if they've got a pediatric patient on an injectable, it's going to be pretty hard for them to not want to switch to an oral.
And then their doctors, where this may become their first real experience with Orlando and starting with the kids and then maybe move on to the rest of the family. So both of these are opportunities over the next couple of years for US Yeah for these kols that tell US you know not broke.
Speaker Change: Don't fix it.
Charlie: If they've got a pediatric patient on injectable, it's going to be pretty hard for them to not want to switch to an oral so we think that's a real opportunity to have that conversation with them and then ex U S. Charlie.
Charlie Gayer: So we think that's a real opportunity to have that conversation with them. And then XUS, Charlie. Yeah, XUS, what we see is the...
Charlie Gayer: Yeah, ex-U.S. What we see is the same consistent pattern of demand. We see many of the ex-U.S. countries moving increasingly towards prophylaxis. For market access reasons, they may never get to quite the same levels of the U.S., but we're seeing PROFI become the standard of care for patients, and Orladeo grow very strongly, and patient retention, too, has been very consistent with what we're seeing in the U.S. So, Europe, Japan, Canada, Eastern Europe; we're starting to launch Orladeo now with our partners in Latin America. There is a lot of opportunity and a lot of excitement about Orladeo coming to the market.
Speaker Change: Yes.
Charlie: What we see is the same consistent pattern of demand.
Speaker Change: We see many of the ex U S countries moving increasingly towards prophylaxis for market access reasons. They may never get to quite the same levels of the U S. But we're seeing profi become the standard of care for patients and Orlando.
Speaker Change: To be to be growing very strongly and patient retention too has been very consistent with what we're seeing in the U S. So Europe, Japan, Canada.
Speaker Change: Eastern Europe.
Speaker Change: We're going to launch now with our partners in Latin America.
Speaker Change: A lot of opportunity and a lot of excitement about <unk> coming to the market.
Speaker Change: Wonderful thank you.
John Wallenbenn: And the next question comes from John Wallenbenn with JMP Securities. Please go ahead.
Speaker Change: And the next question comes from John Walden Button with JMP Securities. Please go ahead.
John Wallenbenn: Hey, good morning, congrats. And thanks for taking the time to answer the question. Just a couple more for me on the, you know, market sizing updates. I'm assuming that 8,500 you guys gave us covers acute and prophylactic patients, but wondering if you had any sense of reasons why that other 2,600 or so are not being treated. And then do you have any sense today of what percentage of treatment IA patients are going to Orladeo first?
Speaker Change: Hey, good morning, Congrats and thanks for taking my question.
Speaker Change: Just a couple more for me on the <unk>.
Speaker Change #100: Market falling updates.
Speaker Change #101: I'm assuming in that 8500, you guys gave us that's including acute and prophylactic patients, but wondering if you had any sense of a reasons why that other twice a comparable so are not being treated and then do you have any sense today of.
Speaker Change #102: What percentage of treat my patients are going to oral if I go first.
Speaker Change #101: Yes.
Charlie Gayer: Sure, Jon. Of the 8,500, that includes patients that are on HAE-specific medicine. So when we do this analysis, we look at all the prophylactic products. We also look at all the acute, the modern prophy products, I should say, so Orlodeo plus the injectables, and then the acute therapies. So that's what's included there.
John Bluth: Sure John.
Speaker Change #103: Of the of the 8500, though that includes patients that are in H a specific medicines. So when we do this analysis, we look at all the protein products. We also look at all the acute.
Speaker Change #103: Modern profi products I should say, so Orlando plus the objectives and then the acute therapies. So that's what's included there you saw the data where we're attracting 17%.
Charlie Gayer: You saw the data where we're attracting 17% of Orlodeo patients launched to date have come from treatment naive groups. And what that tells us is that that treatment naive group is going to increasingly become a treated group. Some of those patients are probably just becoming aware of their disease, or their physicians are starting to become more aware of HAE. And so again, it may never reach 100% of those patients treated, but we expect more and more of them will be treated. And it's a great opportunity to help help more.
Speaker Change #103: Orlando patient launch to date have come from the treatment naive and what that tells us is that.
That treatment naive group is going to increasingly become a treated group.
Speaker Change #103: Some of those patients are probably just becoming aware of their disease or their physicians are starting to become more aware.
Speaker Change #103: About H AE and so again it may never reach 100% of those patients treated but we expect.
Speaker Change #103: More and more of them will be treated and it's it's a great opportunity to help help more patients.
Charlie Gayer: Okay, but you don't have a sense from market research or what you're seeing claims like a new patient coming into the system is preferring Orladeo or Txiro? I knew I was missing one part of your questions. We do. Orladeo gets, we have at least 50% of those patients in our market research get Orladeo first before other prophylaxis products. That's helpful. Thanks, Charlotte.
Speaker Change #104: Okay, but you don't have a sense from market research or what youre seeing in claims like our new builds will come in the system is preferring oil a day or so.
Speaker Change #105: I knew I was missing one part of your question is yes, we do Orla day old gets we have at least 50% of those patients.
Speaker Change #105: In our market research get oral a day Oh first before other other prophylaxis products.
Joe: That's helpful. Thanks, Joe.
Joe: Yeah.
Serge Belanger: The next question comes from Serge Belanger with Needham and Company. Please go ahead.
Speaker Change #107: The next question comes from.
Serge Belanger: Serge Belanger.
Serge Belanger: Bellinger with Needham and company. Please go ahead.
Charlie Gayer: Hi, good morning, and congratulations on another solid Earl of Darrow quarter. First one, given the nice growth we've seen over the first half of 2024, can you tell us a little bit about where you are in terms of market share in the market? And then maybe for Charlie, regarding the prescriber survey, we've seen a pretty drastic increase in the likelihood of prescribing year over year. Just curious, what do you think drove that increase over such a short period of time? You've conducted a survey, I think every year, just curious how it is, how predictive it is for future use and uptake of Verladel. Thanks. Sure, as far as share goes.
Hi, good morning.
Serge Belanger: Congrats on another solid quarter.
Serge Belanger: Quarter.
Speaker Change #109: First one given the nice growth we've seen over the first half of 2024 can you tell us a little bit about where you are in terms of market share in the market.
Charlie: Then maybe for Charlie.
Speaker Change #110: Regarding the prescribers survey.
Charlie: We've seen a pretty drastic increase in the likelihood of prescribing.
Speaker Change #111: Over here.
Charlie: Just curious what do you think drove that increase over such a short period of time, if I'm not mistaken.
Speaker Change #112: You've conducted a survey I think every year.
Speaker Change #113: Just curious how it is how predictive it is for future use in uptake in Fort Lauderdale.
Charlie Gayer: Sure. As far as share goes, Serge, I'll point you back to the 2,500 prescriptions we had at the end of last year. Some of those, of course, are repeat patients who have dropped off and come back, but I think that's a pretty good marker roughly of where we are. So depending on how you want to do the math, either of treated patients or of the total market, we're probably nearing 20% market share roughly, a little bit below that, but growing very strongly.
Speaker Change #113: Sure as far as share goes Serge ill point.
Speaker Change #114: You're back to the.
Speaker Change #115: The 2500 prescriptions, we had at the end of last year. Some of those of course are repeat patients who had dropped off and come back, but I think that's a pretty good mark mark or roughly of of where we are so depend.
Speaker Change #115: Depending on how you want to do the math either treated patients or if the total market, we're probably nearing 20% market share roughly a little bit below that but but growing very strongly.
Charlie Gayer: And then as far as kind of the indicators of increased prescribing and physician confidence, I think it's what I said in my remarks. They're just experiencing, they're learning more about the data, and they're seeing it in their patients. So I think the best way for a physician to learn about this drug is to try it on their patients and see how well the patients respond. And that's why, of current prescribers, 52% of them say they are extremely likely to prescribe more because they are seeing the response in their patients. And you know, we do these surveys every quarter, and we always ask physicians, What are you going to treat your patients with over the next 12 months?
Speaker Change #115:
Speaker Change #115: And then as far as kind of the.
Speaker Change #115: The indicators of increased prescribing and the the physician confidence.
Speaker Change #115: Confidence I think it's what I said in my remarks, they're just they're experiencing they're learning more about the data and they're seeing it and their patients. So I think the best way for a physician to learn about this drug is to try it in their patients.
Speaker Change #115: And see how well the patients respond.
Speaker Change #116: And that's why you know of current prescribers.
Speaker Change #116: Now 52% of them say they are extremely likely to prescribe more because they are seeing the response in there and their patience and.
Speaker Change #117: We do these these surveys every quarter and we always ask physicians.
Speaker Change #117: What are you going to what are you going to treat patients with over the next 12 months and what we've seen over the last year is that the drug they see to grow over the next 12 months is orla Dale.
Charlie Gayer: And what we've seen over the last year is that the drug they see growing over the next 12 months is Orladeo. That is where they see the most growth in the marketplace, and I think it's because of what they're seeing with results in their patients.
Speaker Change #117: That is where they see the most growth in the marketplace that I think it's because of what they're seeing with with the results and their patients.
Speaker Change #117: Okay.
Jon Stonehouse: This concludes our question and answer session. I would like to turn the conference back over to Jim Stonehouse for any closing remarks.
Speaker Change #117: This concludes our question and answer session I would like to turn the conference back over to Jim Stonehouse for any closing remarks.
Jon Stonehouse: Yeah, I'd just like to wrap it up by saying, again, what I said before. It was an absolutely amazing quarter. It's two in a row now. The momentum we have, we see no signs of it slowing down. We're now having revenue over $100 million per quarter. And you should ask yourself, why is this happening? It's because this drug really works, right? When a patient sees control, they have the same kind of control they had with any other prophylactic medicine they were on before, and they get it with a once daily oral medicine.
Jim Stonehouse: Yeah, I'd, just like to wrap it up by saying again, what I said before it is absolutely amazing quarter. It's two in a row now the.
Jim Stonehouse: The momentum we have we see no signs of it slowing down we're now having revenue over $100 million per quarter.
Speaker Change #119: And you should ask yourself why is this happening it's because this drug really works right at when when a patient sees control. They have the same kind of control they had with any other protein medicine. They were on before and they get it with a once daily oral medicine in and that is why we're seeing this great success and then the last thing I'd say.
Jon Stonehouse: And that is why we're seeing this great success. And then the last thing I'd say is thanks to the commercial team for just having an outstanding performance and continuing to build the momentum in this company. Thank you.
Speaker Change #120: Thanks to the commercial team for just have an outstanding performance and continuing to build the momentum in this company. Thank you.
This concludes our question and answer session.
Speaker Change #121: I'd like to.
Operator: This concludes our question and answer session. I would like to... Thank everybody for joining today's presentation. You may now disconnect.
Speaker Change #122: Thank you everybody for joining today's presentation you may now disconnect.