Q2 2025 BioCryst Pharmaceuticals Inc Earnings Call & Business Update
Good day and welcome to the bio Crist. Second quarter 2025 earnings conference call.
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I would now like to turn the conference over to Jon Bluth. Please go ahead.
Thank you very much. Good morning and welcome to BioCryst's second quarter 2025 corporate update and financial results conference call. Today's press release and accompanying slides are available on our website.
With me today is our CEO, Jon Stonehouse.
President and chief commercial officer. Charlie Guyer Chief R&D officer, Dr. Helen. Thackrah chief medical officer. Dr. Donald Fong. And our new Chief Financial Officer bobber gas.
Following our remarks, we will answer your questions.
Today's conference call will contain forward-looking statements including those statements regarding future results on audited and forward-looking financial information as well as the company's future performance Andor 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 4 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 to today's conference, call includes non-gaap 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 release section of our investor relations website at
Thanks John Q2 was another outstanding quarter of performance for biochar.
For Leo, it was the best quarter since approval, both from a revenue and underlying new patient demand perspective.
To be in the fifth year of the launch and growing. So sub sustainably quarter after quarter is a result of great execution, by the team,
And continued growing confidence in the product.
The commercial team at beor has learned so much in the marketplace and made adjustments along the way that has kept this growth sustainable.
Our recipe for success has been combining talented, motivated people, data, and insights to very acutely understand the market and our customers, and focused execution.
We show up differently than our competition. I know this as I saw it recently at the US HAE patients’ event with over a thousand patients, their families, and many leading KOLs.
they shared with me and other members of our team, the growing confidence they have in our product
Many made the effort to seek us out and describe how Oro has changed their lives.
This underscores when the product works for a patient, it works very well. And the number of patients experiencing both efficacy and convenience continues to grow steadily.
There is little doubt that we are on a path to $1 billion at peak and market leadership with, or Leo.
But to create even greater value, we need to do it again with another product.
It's clear that we must source our pipeline through both internal research and Biddy.
Some data by the end of the year.
We also signed a definitive agreement to sell our European business to neoarchean.
This deal puts us in such a strong financial position enabling us to pay off our term debt while generating and increasing operating profit margin.
We believe it puts us on a path to generate more and more cash flow and that we will remain on this path through the rest of the decade and Beyond
Pipeline progress and financial flexibility, enable us to continue to advance our pipeline while looking for assets from other rare disease companies.
We have built an outstanding commercial capability at biochar and we plan to leverage it over time, by bringing multiple products to the market to create greater and greater value.
Before I turn the call over to Charlie, I want to say how excited I am to see the company move to the next stage of growth. Call it biochar 2.0.
Charlie has built one of the most successful rare disease commercial engines ever. And now we are able to leverage this engine to become the consolidator of rare disease assets.
We have built a great reputation through a track record of success, and now we have the financial strength to execute this strategy.
So it's time to change the leadership to execute the strategy and take the company to the next phase.
After an extensive succession planning process. Assessing both internal and external candidates. It's great to have our board unanimously choose Charlie, as our next CEO.
I've seen Charlie grow as a leader for almost a decade now and he is earned the job as the next CEO. And he is ready to leave. Lead the company.
I look forward to working with Charlie and the team in these remaining months to make this a smooth transition into the new year with that, I will turn it over to Charlie.
Thank you John. It's an incredible honor to be chosen to lead this company and it is not lost on me that I would not be in this. This position nor would buy a Christ, have reached this exciting Point without your leadership.
And thanks to all.
Our colleagues who work so hard every day to bring transformative therapies, like, Oreo to patients.
You are making a big difference, and we are just getting started.
And what a start it has been for oil AO. We are halfway through year 5 since launch and oilo continues to build momentum. That is reaching a new level.
The second quarter was the best ever for the US with new patient, prescriptions up over 10% above, the first quarter of the launch in 2021, and over 15% above, q1 this year.
Borlado Revenue greatly exceeded, our expectations over 22 million dollars above q1 and 45% growth year-over-year.
And it did. So for several reasons,
The spike in new patient demands.
Further efficiency in getting paid shipments.
Lower discontinuation during the first half of 2025 compared to last year.
Gross to net, improvements, and strong international results all contributed in roughly equal parts to generate the overperformance.
Each of these factors was a direct result of our team's continued focus on execution.
With this strong second quarter, we are confident that we will reach the upper half of our Revenue, guidance of 580 to 600 million for the full year. Even after removing fourth quarter, European Revenue after closing the sale of our European business, which we anticipate in early October,
we expect to provide more detailed guidance on a the go forward by Chris business, at our third quarter earnings, call in November,
Bike. And demand was only 1 component of the surge in Revenue in Q2.
But the prescription Trend bod's, particularly well for long-term growth?
We saw an uptick in new U.S. prescribers, with 69 compared to 59 in Q1. Existing prescribers continue to prescribe oral AO to more of their patients.
A big factor in the jump is the confidence Physicians. Gain when they see our large volume of real world evidence,
for example, we recently released data
Showing that a large cohort of had patients with normal C1 inhibitor experienced substantial reduction, in attack, attack rates, after starting or Leo.
This analysis of over 350 patients tracked for up to 18 months is helping Physicians. Offer New Hope for a segment of the ha community that has struggled to get effective care for years.
Diagnosis and treatment of HAE with normal C1 inhibitor was a major part of the agenda, as presenters described new consensus guidelines that were created in partnership with the patient community.
Us payers reimburse or Leo for nor 1 Normal C1 at a rate about 10% less than for type 1 and 2 patients, but our evidence generation and the expert consensus statements are helping to close that Gap.
Strong and consistent demand from Type 1 and 2 patients. The increasing demand from patients with normal C1 inhibitor.
And the future pediatric demand from the anticipated FDA approval of orao granules in December. Set us up to continue re Revenue growth momentum into 2026 and Beyond.
I'll turn it back to John and his role as Acting CFO for the second quarter to review the financials.
Thank you, Charlie.
To make such positive and significant strides commercially while advancing our pipeline during the quarter is great to see.
To be able to achieve all of that while continuing to improve our already strong financial position. Makes it even better. So let me walk you through the financials.
Well, you can find the detailed second quarter financials in today's press release, I'd like to draw your attention to a few items.
Total revenue for the quarter came in at 1 6 3. 4 5 6
Of that, or Leo Revenue, 140.3 million, or almost 90% was generated in the US.
For all the Deo Revenue that represents 45% growth in quarterly Revenue over the same quarter last year.
Non-GAAP operating expenses, excluding stock-based compensation and deal-related costs, were $106.4 million for the second quarter of 2025, up from $87.4 million in Q2 of 2024.
Investments we've made in the past have started to show strong operating leverage in our business.
As you would expect, some of this increase was driven by continued investment in our R&D programs.
And details on expense drivers. Can be found in our press release.
Non-GAAP operating profit for the quarter, excluding stock compensation.
And deal related costs was 57 million and our non-gaap net income. For the quarter was 32.3 Million resulting in a non-gaap EPS of 15 cents.
We generated 45 million of cash in the second quarter before any debt prepayment.
Based on the continued strength in our cash position, we paid down $75 million in principal from our Term Loan in April and an additional $50 million in July.
This reduces the balance of our term debt to 199 million and our intent is to pay it off in full upon closing the sale of the European business in early October.
The cumulative effect of these prepayments enables approximately 90 million dollars of net interest savings over the life of the loan.
Our accelerating cash flow generation enables us to reach an expected $700 million in cash by 2027.
However, we don't plan to sit on the cash but to actively deploy it into value creating opportunities.
This strong financial performance alone represents great progress for the company.
To pair it with a commercial team firing on all cylinders, and the great progress that we have made advancing our pipeline, it's even more remarkable.
This was a great quarter to conclude my brief stint as acting CFO, and I'm delighted to welcome Robert Gas to the team as our new CFO.
Bobber's extensive deal-making and operational experience, in addition to his previous roles as CFO at rare disease companies, are exactly what we need at this time as we look to deploy capital and accelerate our path to sustainable growth and increasing value.
I've been impressed with how quickly he's gotten up to speed and integrated with the team.
The growing financial strength of the business and the inorganic opportunities available present exciting prospects for BioCryst 2.0. With that, I will turn it over to Bob.
Thank you, John.
Do you have a chief such a strong quarter and great progress in the last few months during your tenure as interim? CFO is a testament to the amazing Finance team that we have here at biograss?
Their positive attitude and desire to make this company better have been evident to me, and I'm excited to work with them. I am honored to be joining the biochar team at such a pivotal point for the company.
Ing options for Bio Crist.
It enables us to streamline. Our operating structure upon completion, improving our overall profit margins.
Our plan to pay down, our outstanding debt will further, boost earnings from future interest expense savings. And most importantly, our strong cash flow profile combined with an unlevered balance sheet going forward. Provides us the ability to deploy capital in building. Sustainable shareholder value whether it's in licensing pipeline programs product, or company Acquisitions or even return of capital to shareholders in the future.
This next journey of biochar is going to be a very exciting 1. It's great to be here.
Operator will now open the call for Q&A.
Certainly.
We will now begin the question-and-answer session.
To ask a question, you may press star, then 1 on your telephone keypad.
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At this time, we will pause momentarily to assemble our roster.
Our first question comes from Jessica fee with JP Morgan. Please go ahead.
Hi, this is Abdul on for Jess. Um, congrats on your upcoming retirement and Charlie and Barber on the new roles. I just have two quick questions. So, first, of the 45-year-over-year net revenue growth, how much of that was volume and how much was better paid rate or net price?
And then you mentioned an improved discontinuation rate for the first half of 2025 and the first half of 2024. What are the numbers you're seeing there? And what do you think is driving that? Should we expect the trend to continue, and why? Thanks.
Yeah, so the um, for the, the growth in Q2, as I said in my my my my prepared comments, it was a mix of everything from volume. There was some growth to net Improvement. We were also just more efficient in squeezing, out more paid shipments during the quarter. So it was, it was a big, big mix of of everything. Um, but what I'm really excited about is the fact that the demand was so high because that's what's going to drive the, the long-term growth and it's um, it was better than better than ever and sorry, the SEC. The second part of the question.
Can you repeat that part? Yeah. Um,
The second question, or the second part of the first question that... Sorry. The second, the second question. Yeah. Um, so you mentioned an improved discontinuation rate for the first half of 2025.
Um, yeah, what numbers are driving that there? And do we expect to continue that?
Over the last several years and it's true in the first half of this year as well. Is that the the 1 year discontinuation rate has been Rock Solid. So 60% of patients who start make it to a year that really hasn't shifted, where I think we've seen a, a little bit of an improvement as our patient base grows. The the overall discontinuation rate is, is trending slightly down because patients, who make it to a year, they're doing really well, they stay on therapy and so, it's exactly what you want to see. And, and I would expect to to see this this kind of same solid discontinuation or retention rate going forward.
Thank you.
Thank you.
Our next question comes from Laura, Chico. With redbush Securities, please go ahead.
Uh good morning. Thank you very much for taking the question. My congrats to John Charlie Bob our thank you. Um, so I guess I had just 1 your comments on discontinuation rates made us a little curious here. Could you speak a little bit to persistency rates in relationship to, um, other injectable prophylactic regimens? I I, and I realized there's probably no direct head-to-head studies. But wondering, if you can comment here on any real world data, just that puts into context, the the persistency you're now seeing with, or Leo versus the injectable products. Thank you.
Yes, thanks, Laura. We, we actually put out some data at a, at a recent conference. I think it was, um, last fall at the the college meeting. We looked at, uh, Healthcare claims data for both Ayo for tax, syro and haegarda and looked at Patients starting any of those 3 products and looked at the 1 year, persistence rate and the 1 year rate is statistically identical for all of them around 60%. Um, numerically actually orlea was a little bit better than the other 2. Um and so I think what that shows to us is no single ha therapy is perfect for every patient. And we know that about 70% of patients would prefer to treat with an oral proy product. So it it, it shows that Oro has got a the profile that patients want and performs really well in the real world.
Our next question comes from Steve Seedhouse with Canaccord. Please go ahead.
Good morning, thank you. Uh congratulations. John Charlie Bob. Our really everyone on the quarter as well uh 2 questions first? Any early indications of how the the June and July approvals in Hae so, GERD asab and Eerie. Um, are affecting or Leo demand over the past month.
And also any additional color. You can provide on the Pediatric, Padua delay just to give us Comfort there. Thank you.
Sure, I'm not on the new, um, the new approvals we just had by a substantial margin, the most, uh, new patient prescriptions ever. So what it shows is Physicians, aren't waiting for any of these new products, which is
Exactly what our Mark, our long-term market research is has shown or a day is the most differentiated proy in the market, and, and I expect our demand to continue.
Yeah, I I I think it's important too. To remember that we've told you patients, don't see their doctor much more than once or twice a year. So if they were going to have that conversation you know they they would have it set up and we're not seeing that. So I think that's a at least an early good sign for us. You want to take the Pediatric? Yeah. And I so the question on the Pediatric uh uh and the Padua date. Um so so the uh the FDA uh, upon receiving, some final reports.
And some, uh, responses that we gave them decided that they needed a little more time to review. So that's a major amendment to the NDA, and that leads us to the Paducah date of December 12th. So we're, uh,
On track for that. Yeah. And we knew when we submitted the original filing that we had these reports that we had to get in. If we had waited for those, we would have virtually the same PDUFA date. So, you know, we thought we would take a shot at that, and you know, we're excited to... the key is we're going to get approval this year, and we're excited about that. So,
Yeah, thanks so much.
Yep.
Our next question is from tazeen Ahmed with Bank of America, please go ahead.
Hi, good morning. Um, congrats on a great quarter.
When, once again, I just wanted to maybe get a little bit of color on what you think your penetration rate is into the addressable market today. And where are you seeing most of your growth? Is it more from doctors who have tried early DEO, liked the results, and keep prescribing it, or are you seeing an acceleration of new doctors coming on board to write scripts for the first time? Thanks.
Hey, Charlie. You might want to talk to about Pace because I think that's an important piece that people might not understand.
Um,
Suzanne's from a, from a penetration rate perspective, we've we've noted before, at the end of 2024 uh about 3,000 patients had already tried. Um, oral a day, roughly half of those are are still on therapy and recall that, um, we've also put out data that they're about 11,000 diagnosed patients in the market. So we still have a lot of of upside growth, uh, remaining. Um, as far as health care providers, I was really thrilled that we had 69 new new prescribers in, in Q2 this late in the launch, it shows that we keep finding and convincing more doctors. Um, and the the overall uh split of prescriptions tends to still be about 50/50 with about half of them being from Tier 1. Physicians the top, 600 roughly that that treat half the patients in the market and then the other half comes from the, the The Wider base of, of other Physicians who have just a few
Um, a few patients. And what we're seeing overall—and John mentioned this in his comments.
I alluded to this as well is there's just more confidence amongst physicians in the long term data that they're seeing that data that we present to them. And then also what they they experienced themselves. And so they're really thinking about oral AO very differently than they were a few years ago and they have confidence in in putting
either diagnosing or treating and you know, we've generated data meaningful data, you know, 350 patients worth of real world evidence
Showing you know pretty amazing reductions in Baseline attack rates on orlea with these patients. So those are examples of areas that the team just keeps scouring and finding and uh you know that's why you keep seeing this sustainable growth.
Color guys and then just maybe to follow up. Um, are you expecting that stickiness topic that has come up on on several calls to continue as you add new patients? How, how reliable do you think they'll be to stay on therapy if new um, potential new oral competitors? Come online. Thanks,
Sure. No, I think extremely sticky. You either do great on or Leo and you stay on, or you don't, you move off. So I don't think patients are not waiting for some hypothetical future or oral product, they they'll switch to today. They've got a lot of good injectable options if they don't get what they need from oral a day or they'll they'll switch. And and so, I think the patients that stay are, are very sticky. Yeah. And the last thing I'd say is what would be better than a once a day, highly effective drug right? Like what behind us is coming, that that is better, that there really isn't a profile that's better. So we expect it to be very sticky as Charlie said.
Thank you.
Our next question is from Jina Hwang with Barclays. Please go ahead.
I'm taking my questions also.
So, uh, maybe, um, Charlie and the team, if you can give a little bit more color regarding, uh, the uh, uh,
Metrics, uh, and uh, to cue, you know, regarding the reimbursement, uh, product rate, I think the last quarter was a 84% and retention rate, just wanted to confirm is that consistent, uh, stay at the 60% and if you can provide any other metrics uh regarding the patient's segment. Um and then second question is uh, regarding the timing for the 2, pip assets, I know.
By the end of the, uh, by year and 25 for 2, pip assets, maybe any additional color, you can share, uh, regarding the patient, enrollment and expectation for the data, uh, lastly very quickly just wanted to ask, um, John, I know. Um,
ugly working with you and
I'm just wondering.
You know, what's the reason uh regarding the timing for uh transition to the next uh journey of your life?
Great Charlie. You want to take the first 1? Sure. Gina as far as the the launch metrics, um I mentioned in the my prepared remarks that we were able to part of the over performance in the quarter. Is we got more paid shipments out of our patient population than than we have historically on a trend rate. So, that was part of the over performance, the actual paid rate is doing exactly what, what I predicted last quarter, which is, we reached a high water mark around the April May time frame, when we come off of the reimbursement, uh, the sorry, the reauthorization season. And then, for the rest of the year, the the paid rate tends to be dominated by new patients coming in. What that means, is it it drifts down slightly over the course of the year. Um, by a person, we would expect it to go a percentage or 2 down by the end of the year and we're on that Trend. So we feel really good about where we are. Then next year, we'll recover that and probably take the the reimbursement rate to a to a new high.
um,
As far as retention, as I mentioned, in the, in the last question, it's been really solid. So that 1 year, 60% retention rate. Uh, has been consistent for the last roughly 3 years and and it's because patients. They, as I said, they either do really well. Um, and they stay on, or they move on to a different different product.
and then uh, with regard to the pipeline question, uh, so we have we have 2 programs in the pipeline both in the clinic that were progressing with data anticipated by the end of the year,
For uh, effect on the retina and the potential for reducing the swelling and the retina. And uh as I said it's exposure over months. We'll be looking at 4 weeks, 8 weeks, 12 weeks in so that initial data will be coming this year too.
Great. And then in terms of timing for me Gina, uh, thank you, by the way, it's been great working with you as well.
Um it it's time, you know? I don't know how else to say it. I turned 65 this year. I've been in the company it'll be nearly 19 years when I leave. Um the company is in great shape. The board and I have been working on this succession for over you know a couple years and Charlie's a great choice.
So it all just kind of lined up and it's just perfect timing. So,
That's my answer.
Thank you.
Our next question is from the line of Stacy. Cool. With TD cabin. Please go ahead.
Hey, good morning. Um
A quick, congratulations to both John and Charlie on the announcements. You both have done amazing things together with the bioch Christ Team. Um, so if you a few questions 1 quick, follow-up, just longer term, maybe remind us how you're thinking about the on-demand launch of oral actorly. Um as we think about as as as we always have thought that would be a benefit for you all. So just help us understand is the Salesforce able to maybe re-grade share with patients that had to go back on injectable
With orao. Is that long low hanging fruit?
And then from a pair perspective, how are they going to handle all the? So just maybe some more details there, as we've been getting some investor questions. Um, and then second, um, a little bit of a, just a double-checking here. Uh, as we think about the page shipments in Q2, just want to understand is, is there any implications on a quarterly basis? Something that has come up with other companies. So just want to make sure there's no changes to the normal quarterly Cadence. Um, and then last, we see the um uh IND approval by the FDA for netherton. So congratulations there as we were await data just remind us the current competitive landscape there and and what kind of learnings you all are taking. Thanks so much.
Sure. Um, thanks Stacy. Um, as far as the, the role of eerie, yeah, we think patients are really excited. The the ability to ultimately have an all oral combination where you take a an oral proy and then when you have an occasional breakthrough attack to be able to treat it with an oral as well. Um, just adds to the the convenience and for patients just being able to worry less and kind of forget that they have Hae. We saw that excitement at the Hae Summit uh last last month. And so we do think it has, you know, there's a potential positive upside both in terms of attracting patients to Orla Deo and for patient retention if they're also taking a or using an oral on demand.
What we what we definitely know from speaking to patients and physicians in large. Numbers is proy is still the backbone of therapy that they're looking for and in particular or oral proy. Um, as far as paid ships in Q2, no, nothing, nothing that we're seeing out of out of the ordinary. The, the improvements that we're seeing is is just about our team's execution.
Um, and then I would expect for the rest of the year, a similar quarterly, Cadence to what we saw last year, um, where the, the revenue growth slows down a bit relative to Q2, because we're out of the, re the reauthorization season. And so, I would expect it to look look quite similar to with, with Q3 and Q4 growing. Uh, according to our, our new patient demand.
And then with regard to the competitive landscape. I mean, it's always hard to say stuff with any certainty but daichi we haven't heard Buu from their program and almost 2 years and and so that's probably not a good sign. Um, and and we've heard that uh, for business reasons that, you know, they've terminated we don't know if that's true or not. We've heard that
Um and then bi had a program that I think they out-licensed or sold to a company and usually, you don't sell an asset. If you have a lot of
Value and confidence in an asset so that probably doesn't bode well. So we, I mean, we could be the first therapy, um, which would be amazing because we, you know, we I think we were third, uh, or fourth even when we were first looking at this. But, uh, and you know, this is a place where young men need is huge, right? So, um, we're really excited about it and, you know, eager to get this, the data to have a sense of dose, and, and is it get to the skin and is it having an effect? So stay tuned.
Thank you so much.
You're welcome.
Comes from Brian Abrams. With RBC Capital markets, please go ahead.
Hey guys, thanks for taking my questions. Uh, John congrats on, uh, all your career achievements and congratulations as well to Charlie and babur, uh, on your new and upcoming roles. Um, 2 big sister questions, uh, for for me, I guess. First, um,
For most favorite Nation. Uh, policy. Um, how do you guys model that playing out? And potentially affecting you guys if at all, particularly with European pricing, that's no longer going to be, uh, under your control. Maybe remind us of your overall Medicaid exposure. Uh, and then secondly, you talk a lot in the earlier in the call uh on deployment of capital. Um, and I'm just, I'm curious.
How you're viewing the market for for buyers here, the how competitive it is the types of opportunities that you might be interested in, in terms of stage, and, and segments, and your optimal timelines for for executing on that. Thanks.
Sure. So Charlie you want to take the first 1, Bob take the second.
Brian. As far as mfn, um, obviously, like others, we're watching this but I don't, I don't think we've seen anything specific that would apply to us. Um, and so we'll just keep executing and and watching that space. Um, Medicaid for us is, is a relatively small segment. It actually is, is sort of between 10 and 15% of our patients. Um, so we'll, we'll, we'll just we'll just watch but right right now, we, we don't see an immediate impact.
And Brian your next question. Um, the market couldn't be better for if you're a buyer at the moment and you don't need, uh, to tap raise more capital. And I think that's what we heard from the remarks that we are in an enviable position of having sustainable cash flow. But let me give you a little bit more color. Um, we will be broadly, looking at the rare disease space. We want to be a Consolidated or rare disease assets. So assets, where we can where there's High unmet needs, and we can leverage our operational infrastructure, we have a very promising early pipeline, so we will look to balance our portfolio with more later stage assets. Post proof of concept, uh, soon to be, uh, commercial and or even even commercial assets. So, I think, uh, the next couple of months will be very interesting from that vantage point. And, uh, we'll have some more developments over the next coming months. Yeah. And Brian, you know, firsthand that companies are really struggling to find Capital to fund their operations, whether its clinical development or launching a product. So it's just a tough spot for people to be in and an opportunity for
us.
Congrats on the, uh, strong quarter that puts you in that position, and thanks again for taking your questions.
Thanks Brian.
Our next question comes from John Waban with citizens. Please go ahead.
Hey, thanks for taking the question, and please share our congrats to, uh, John Charlie as well. I was hoping you guys could talk a little bit about the typical second half push and polls with, um, about $290 million in first half revenue. Not much has to go right for you guys to hit the lower end of your guidance. So, I’m wondering if you think kind of all the positive dynamics here in Q2 are going to continue or, you know, just a little bit about what you see typically in the second half and what you're seeing so far this year. Thanks.
Sure, John, you know, second half, as I've said, tends to be, it's driven by new patients coming in and it takes a little bit longer to get a new patient or the the new patient population to the same paid rate.
Um, and as as our overall population and so therefore number 1, the the the overall paid rate tends to go down, it'll probably go down a percentage point or 2 in the second half. Um, we don't have the opportunity to bring a big bolus of patients from, uh, new prescriptions or, or from um, from long-term free product over to paid the way that we do in the first quarter into early the second quarter. Um, and so we expect those same Dynamics for the, for the second part of, of this year and all signs show that our our demand is going to continue to be really strong.
And the last thing that I'd say, in terms of the dynamics, is remember that in the fourth quarter, we will not have European revenue. And, you know, we've guided you to what the trailing 12 months was in terms of the revenue that was being generated when we announced the deal. So, you can add a little bit of extra for the fourth quarter because it's usually a little bit higher, but that'll give you some sense of what to do.
Out of the fourth quarter revenue, yeah. And John, you may have heard me say, but I did say in my comments, I expect us to be in the upper half of our $580 to $600 million, but after subtracting European revenues in Q4.
Got it. Okay. Thanks, guys. That's helpful.
You're welcome.
Good morning, and congrats on another strong quarter.
Charlie, you mentioned a couple of factors behind the strength of Orlando this quarter. Um, you did mention an improvement in growth to net, so just curious if it's still within that prior 15 to 20% range.
And you also mentioned you hit a new high water mark in new patient ads. Um,
How does that compare to uh, 2024 levels, when I believe, uh, you added about 300 patients for the year.
And then lastly, just given the overall expansion and the prescriber base and, uh, the strong patient demand, is there a case here to add on to the current sales force?
Of this this strength, thanks.
Sure. Thanks search um as far as growth to net. Um yeah we've we've been really efficient this year and some of that is just the mix with Medicare patients getting um up to a higher paid rate as we talked about last quarter and there's a bunch of other factors as as the team manages it. So I think we're we're in the lower portion, we're still in the 15% but closer to 15%.
Um, uh, of off of of.
Uh, net price and then as far as new patient ads compared to 2024 at the end of Q1. I did mention Q1 was a really good quarter this year, and it was.
Last year was the best year we had. Since the first year of launch q1 was just a little bit better than the best quarter of last year. And then Q2 this year, blew away, q1. So we're, we're doing really well on the new patient ads. Um, and then as far as the the prescriber base and do we need more reps? No, we don't, uh, we have a fantastic team out there. They are able to cover the
The population. They're able to expand the number of prescribers quarter after quarter and actually if we added more people, it would decrease our efficiency and probably just tick off our customers. So we're not going to do that. And 1, 1 thing that's been great is we've been growing our Revenue, but our actual Direct commercial spends are hardly going up at all. And and that's because we've, we've got the right data at the right message, the right team and and they're, they're executing in a phenomenal way.
And, and kind of back to what babur was saying about leveraging. The existing infrastructure that we have, you know, we have made investments in patient services and more data to be smarter about where we might find more Physicians but that we can use for any product in the future and uh, and and it's not, you know, direct sales people that you have to add. So that that's that's why we we're so convinced that putting more products into this, you know, well-oiled commercial machine is going to create greater and greater value.
Thank you.
Our next question comes from Mario Raycraft with Jefferies. Please go ahead.
Hi. Um, this is Amy on, for my uh, thank you for taking our questions and congrats on the quarter. We have 2 questions on the pep line. Programs near the 10 and DME, uh, for the netherton. What is your latest thought on the pivotal trial design or and the regulatory timeline for this indication? Um, is there a defined pathway for Accelerated approval? Either from presidents or clear kol, or FDA feedback?
Um, and for the DME program, like what would the outcomes from the Phase 3 study contribute to the design of Phase 2 or even the pivotal?
And for the retinol swelling reduction results that we are expecting to see at the end of this year, what is the bar that we need to be here? Thank you.
Want to take the first one, don’t take the second one.
Um, we'll be looking at what is, what is the effect that matters to patients? What is the effect on an approvable endpoint? And we think that is changes in the skin, both, uh, how it's healing. So, assessment of the skin and uh, the patients experience, the itching. Those are relatively simple to measure. We'll be looking at those in our current trial. We'll be looking at those and then a pivotal trial and it's possible. This could be a very short path to pivotal.
If possible also it could be then a a short path uh to an a registration endpoint and submission to the FDA what that looks like. And when it is we can't say at this point we need to talk with FDA and get their input. We need to understand if they agree with us on the endpoints in the past, um, but we do think that this is a program that could warrant a a smaller data set and a a relatively simpler path to registration.
fact, that
That competition question that came up earlier. If we're first, we may be able to go really fast depending on what kind of treatment effect we have. So we'll see. Um and then Don let me set up the DME and then you can hit the specifics. So just to remind you
What we're trying to do is get a sense of do we have activity? And do we have some sense of dose and does kalikratia? Yeah, thank you, John. I think that is correct. The cow crime pathway is an independent pathway of the, uh, vegf pathway. We just presented some preclinical evidence at the American Society of retina surgeons, this last weekend and the, um, there was a lot of excitement about a new pathway for our product. Um,
In, uh, answer to your specific question of what the pivotal study would look like, the path for approval of, uh, uh, drugs for DME is best corrected visual acuity. So, we will be looking for a, um, uh, a similarity or not to your already existing, um, anti-VEGF products. Um, in our Phase 2 design, uh, we will be looking specifically at change in central subfield thickness, um, that will give.
Give us an indication that the, uh, a product is effective at reducing, uh, central subfield thickness and macular edema.
Thank you. That's very helpful.
You're welcome.
Thank you.
Again, if you have a question, you may press star, then 1.
We have no further questions at this time. I would now like to turn the conference back over to John Stonehouse for any closing remarks.
Yeah, I don't think there's a whole lot more to say when you have a quarter like we did, you know, where you have growing revenue.
Profit.
Great cash flow. The start of great cash flow and strong, underlying demand, uh, continuing to increase. It doesn't get any better than that and we're going to continue to execute and, you know, looking forward to how the rest of the year unfolds so thank thank you for your interest. Have a great day.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.