BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) Q1 2024 Earnings Call Transcript

BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) Q1 2024 Earnings Call Transcript May 6, 2024

BioCryst Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $-0.31 EPS, expectations were $-0.23. BCRX isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, and welcome to the BioCryst First Quarter 2024 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to John Bluth at BioCryst. Please go ahead.

John Bluth: Thanks, Drew. Good morning, and welcome to BioCryst’s first quarter 2024 corporate update and financial results conference call. Today’s press release and accompanying slides are available on our website. Participating with me today are CEO, Jon Stonehouse; CFO, Anthony Doyle; Chief Commercial Officer, Charlie Gayer; and Chief R&D Officer, Dr. Helen Thackray. Following our remarks, we will answer your questions. Before we begin, please note that today’s conference call will contain forward-looking statements, including those statements regarding future results, unaudited and forward-looking financial information as well as the 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. 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 Release section of our Investor Relations website at www.biocryst.com. I’d now like to turn the call over to Jon Stonehouse.

Jon Stonehouse: Thanks, John. We are off to a fantastic start to the year with growing ORLADEYO revenue and our pipeline advancing on schedule. ORLADEYO revenue in Q1 exceeded our expectations as the commercial team in the US did a great job successfully navigating the reauthorization process faster than previous years. Charlie will share more detail, but now in the fourth year since approval, the steady and consistent growth of new patients shows no signs of letting up and we are even more confident we are on track to reach our goal of $1 billion in global revenue at peak. We continue to make great progress with our prioritized pipeline, too. Our ORLADEYO pediatric program is on schedule to file for approval next year. We continue to make progress with BCX10013 and expect we will be able to decide on whether to partner or discontinue the program later this year.

In addition, our other pipeline programs, including BCX17725 for Nethertons and avoralstat for DME are advancing toward the clinic with first or best-in-class profiles. Over the next 12 months, ORLADEYO will be approaching the midway point of our global peak revenue goal. We’ll be preparing to file for approval for ORLADEYO use in pediatric patients and we’ll be starting to move multiple pipeline programs into patient studies. And last but not least, we will be approaching profitability. The year is off to a strong start with exceptional progress in all of these areas, and we are focused on continuing this momentum throughout the year. With that, I’ll turn it over to Charlie to share the outstanding performance of ORLADEYO for the quarter.

Charlie Gayer: Thanks, Jon. During the quarter, we continued to execute our [global] (ph) plan for ORLADEYO very effectively. Revenue of $88.9 million exceeded our expectations because of the efficient handling of prescription reauthorizations in the United States, combined with the continued strong demand as healthcare providers gain confidence in ORLADEYO. Based on these improvements and trends, we are raising our 2024 ORLADEYO revenue guidance to the top half of our prior range and now forecast $390 million to $400 million for the year. I’ll describe these improvements and trends more specifically. Last year, we invested in our patient services and market access teams with the goal of improving efficiency and effectiveness of patients to paid therapy.

The first quarter shows that these investments are working. Two facts stand out in this improvement. First, our patient services team completed more benefits investigations in January than we did in the entire first quarter of 2023, resulting in patients getting back to paid therapy quicker than in previous years. Completing these investigations early in the first quarter gives our better understanding of the ease or difficulty of the reauthorization process. If it’s easy, we get to paid shipments quickly. If it’s going to be difficult, the team can act faster with better information to solve any issues. And second, even though we still provided temporary free product for many patients during the first quarter reauthorizations, the faster actions in the quarter meant that paid shipments were within 1% of fourth quarter 2023 paid shipments.

This was above our expectations. As for customer demand, we had another very strong quarter for new patient prescriptions. In fact, the last two quarters have been the best consecutive quarters for demand since the six months of the launch in 2021. Patients and healthcare providers continue to understand and gain confidence that they can get great efficacy and [Technical Difficulty] with ORLADEYO, all with just one capsule once a day to prevent HAE attacks. We also continued to strengthen the brand by presenting new evidence showing the real-world impact of ORLADEYO. At AAAAI in February, we showed how well ORLADEYO is controlling HAE attacks, regardless of prior therapies or baseline attack rates. Patients switching to ORLADEYO from other HAE prophylaxis therapies, for example, maintain and even improve long-term attack control, reaching a median rate of half an attack per month.

Patients attack-free at baseline remained attack-free on ORLADEYO. Later this week, we will present new data at the ISPOR conference in Atlanta, demonstrating that patients initiating ORLADEYO experienced significant reductions in overall healthcare resource utilization, a finding that will be very meaningful to payers. We are well positioned to provide frequent health economics — health outcomes and economics updates with large and growing cohorts that already include hundreds of patients. These new data will further support the growth in customer demand for ORLADEYO for many years to come. The increasing customer confidence that we’re seeing in the US is also happening in the rest of the world. Patient growth in Europe was strong and consistent in the first quarter and recent launches in Spain and Italy are already adding to this trend.

Finally, our BioCryst Japan team is now fully in place from the start of 2024, and we are encouraged by the early signs of their impact. The overall trends in real-world evidence, customer confidence and patient growth continue to point to $800 million in peak U.S. revenue with sustained peak global revenue of $1 billion. I’ll now hand over to Helen to provide an update on our pipeline.

Helen Thackray: Thanks, Charlie. Our research and development teams are busier than ever as we are rapidly approaching our next major pipeline milestones, which include advancing multiple programs into the clinic starting later this year and filing for pediatric approval with ORLADEYO. Let’s start there. I’m pleased to share that we’ve completed enrollment in the pediatric trial with ORLADEYO, which includes extending dosing in children down to two years of age. This means we are on track to submit for pediatric registration as planned in 2025. It also means we are even closer to providing the first oral prophylactic therapy to children with HAE. It’s been remarkable how quickly our pediatric has enrolled. We believe this reflects the demand for an oral therapy as prophylaxis of HAE attacks in children.

It has the potential for this to be a transformative option for both children and their parents, a pediatric formulation made of granules that can be sprinkled on soft foods or taken with a glass of water. We are excited to be so close to achieving this goal of bringing ORLADEYO to children under 12, and we look forward to submitting for registration next year. Turning to our next clinical program, our Factor D inhibitor, BCX10013, we continue to progress the ongoing proof-of-concept trial, and we expect to either partner or discontinue the program later this year as planned. Up next, we have two pipeline programs that will enter the clinic within 18 months. These are BCX17725 for Netherton syndrome and avoralstat for diabetic macular edema or DME.

We are on track to begin a clinical trial with BCX17725 by the end of this year. This is a fusion protein with very high potency inhibition for KLK5 and has the potential to be a best-in-class product, providing disease-altering treatment for people with Netherton syndrome. Netherton syndrome is a rare, lifelong genetic disorder that often presents an infancy with red, scaly and inflamed skin. Patients require chronic care to protect the skin and monitor for lifelong susceptibility to inflammatory and atopic conditions. Netherton syndrome can be life-threatening, especially during infancy when neonates are vulnerable to dehydration and recurrent infections. Currently, there is no approved treatment for Netherton syndrome, and it’s our goal to deliver a targeted therapy for these patients.

Next into the clinic will be avoralstat, our plasma kallikrein inhibitor in development for the treatment of diabetic macular edema or DME, which is on track to initiate a trial in patients next year. Our goal here is to improve vision in patients with persistent DME despite the use of VEGF inhibitors. At least a third of patients with DME have continuing symptoms and even worsening vision loss when treated with VEGF inhibitors, which may be because plasma kallikrein is a contributing cause of disease. The need for additional therapeutic options is real. We’re working with Clearside to deliver avoralstat to the suprachoroidal space in the eye in order to achieve sufficient exposure in the right location to interrupt the pathophysiology of DME in the retina and stop swelling in the back of the eye.

Based on the preclinical and safety data we accumulated with avoralstat when we studied it in the HAE program, we are in a position to move quickly into patients with DME with our first clinical trial next year, so we can evaluate for proof of concept directly in patients. Right behind these two programs, our discovery programs for targets across the complement system are also advancing. The three programs underway include our protein therapeutic complement inhibitor targeting all three pathways, the classical, lectin and alternative pathways complement and our oral C5 and oral C2 inhibitor small molecules. We are on track to have both the oral C5 inhibitor and the protein therapeutic multifunctional complement inhibitor advance into IND-enabling studies later this year.

So in summary, we continue to progress well towards our goal of delivering inhibitors for every pathway in the complement system. Overall, the depth and breadth of our pipeline provides balance and great potential with a diversified set of molecules moving forward. This allows us to increase the likelihood that our pipeline today will produce our next drug in the market tomorrow. We are excited the pipeline is now advancing into the clinic with multiple programs. Next, I’ll turn it to Anthony for a financial update.

Anthony Doyle: Thanks, Helen. You can find our detailed first quarter financials in today’s earnings press release, and I’d like to call your attention to a few items. Total revenue for the quarter was $92.8 million, $88.9 million of which came from ORLADEYO with the remaining $3.9 million coming from RAPIVAB sales. That puts ORLADEYO trailing 12-month revenues at $346.4 million with Q1 revenue increasing 30% over Q1 of 2023. Of the $88.9 million of global ORLADEYO revenue sales, $80 million came from US sales, with the remaining $8.9 million or 10% coming from ex-US sales. The 30% year-over-year increase in sales was primarily driven by the strong underlying patient growth that we have continued to see quarter-over-quarter.

The $4 million improvement in Q1 performance versus our previous guidance of $85 million was primarily driven by the efforts of the commercial team to improve and accelerate the reauthorization process. That’s $4 million that last year we would not have been able to capture until Q2, but this year, the team managed to accelerate the timing and achieve it from quarter one. For Q2, we expect to achieve revenues of approximately $97 million. And as Charlie said, we’ve revised our full year revenue guidance to the higher end of the range between $390 million and $400 million. Operating expenses, not including non-cash stock compensation for the quarter were $93.6 million, an increase of $10.4 million over Q1 of 2023. Included in this are $1.3 million of one-time expenses related to the R&D structuring at the beginning of the year.

Full year 2024 guidance for OpEx is unchanged between $365 million and $375 million. With revenue up $24 million year-over-year at $92.8 million and OpEx up $10.4 million year-over-year at $93.6 million, we continue to see improved margin accretion and our operating loss for the quarter, not including noncash stock comp, was less than $1 million. Cash at the end of the quarter was up $338.4 million, and net cash utilization for the quarter was $52.4 million. Q1 is historically our largest quarter of the year for cash utilization. For context, last year’s Q1 was responsible for over 50% of total cash utilization for the entire year. Included in Q1 this year, we had $3.2 million related to the R&D restructuring and $6.9 million related to royalty payments to OMERS.

This is our first quarter of making such cash payments to OMERS. And as a reminder, while the royalties are considered a debt instrument for GAAP purposes, that cannot be called and ultimately should be considered more the long-time liability than true debt. Additionally, with the revised guidance for full year ORLADEYO revenue, this will result in an improved blended royalty rate as more revenue will fall into the above $350 million tier where royalties are at a reduced rate of 7.5%. Cash utilization will decline in the remaining quarters of the year as it did last year, closer to an average of $10 million to $12 million per quarter, and we expect to end the year with above $300 million in cash. It’s great to see the continuing strong performance of ORLADEYO.

The commercial team did an outstanding job to improve our performance during the reauthorization process, an improvement that we’d hope to continue and build upon in next year’s quarter one. This strength in revenue performance, supported by continued strong underlying patient demand, is what drives the revised full year revenue guide between $390 million and $400 million. And with full year OpEx remaining consistent with our prior guidance, we are in an even stronger position to deliver an operating profit this year when excluding non-cash stock comp. We will continue on our planned path to near-term profitability that we shared earlier in the year, approaching quarterly cash flow and EPS positivity late next year with full year cash flow and EPS positivity in 2026, all while continuing to advance our pipeline at full pace without the need to raise additional capital to get there.

Operator, we’ll now open it up for questions.

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Q&A Session

Operator: [Operator Instructions] The first question comes from Jessica Fye with JPMorgan. Please go ahead.

Unidentified Analyst: Hey, this is Nick on for Jess. Congrats on the quarter and thanks for taking our questions. Two from us. You mentioned that the past two quarters are the most new prescription in the US since the first two quarters of the launch. Can you maybe provide some additional details on how that trend is looking so far in 2Q? And then maybe one on ex-US revenues. I know they came in at 10% this Q. You’ve talked about them being lumpier than the US. How should we expect that growth in the — how should we expect that growth ex US business this year? And at what point could that become less lumpy?

Jon Stonehouse: Charlie, why don’t you take the first 1 and Anthony take the second one?

Charlie Gayer: Sure. I’m not going to comment yet on Q2, but other than two consecutive quarters of really great prescriptions, we’ve talked more — we’ve talked before about all the market research that we do with physicians. They continue to expect to grow ORLADEYO prescriptions by about 30% over the next year. So we would expect this kind of demand to continue.

Jon Stonehouse: Hey, Charlie, is it worth spending a little bit of time talking about the confidence that you’re seeing in physicians and patients at this stage since the approval?

Charlie Gayer: Sure. Yeah. Like I said in my prepared remarks, as physicians have gained more and more experience in patients as well, they see that this drug is much more than just a convenient oral therapy. They see that ORLADEYO is a really effective therapy. And once they know that they can expect the high efficacy and the convenience together, it just gives them more confidence in prescribing. Physicians know that the majority of patients would prefer an oral therapy. And if they can get a really effective oral therapy, that just — that makes want to prescribe more. And I think that’s what we’re seeing now three-plus years into this launch.

Jon Stonehouse: So, Nick, with that confidence, we just don’t see it letting up.. Anthony?

Anthony Doyle: Yeah. So for ex-US, yeah. By the nature of how we sell into the ex-US markets, there’s always going to be some lumpiness. Last year, we had about 11.5% of our total revenue coming from ex-US. I would expect something similar this year. I mean, if it’s not there, it will be due to US overperformance as opposed to ex-US not being where we expect it to be. Ultimately, we would expect ex-US sales to continue to increase year-over-year until we get peak.

Charlie Gayer: Just to add to on the lumpiness. That really is — it’s just based on how we distribute it. It has nothing to do with customer demand. What we’re seeing is physicians are gaining the same kind of confidence that I described in the US, and we expect that to continue.

Unidentified Analyst: Great. Thank you.

Operator: The next question comes from Maury Raycroft with Jefferies. Please go ahead.

Maury Raycroft: Hi, congrats on the quarter, and thanks for taking my question. In your prepared remarks, you talked about your patient services team and investigations early in the first quarter that led to categorizing reauthorizations that’s easy versus difficult. Can you talk more about what makes the reauthorizations easy versus difficult? And how you plan on building upon your learnings for the rest of the year with that?

Charlie Gayer: Sure, Maury. With this kind of rare disease therapy, payors are always trying to make things a little bit difficult, but it’s the kind of thing that I’ve described before, which is, they want a full patient history. They want lab tests. They want all the information they can get. And sometimes when the payors already have this information, they can make it pretty quick to get to the reauthorization, but it’s kind of in the payor’s interest to throw as many speed bumps as possible. And so even if we’ve provided it before, sometimes they’ll ask for it to be provided again. And then there are some patients who just have more complicated histories, and those are the bigger challenges, but our teams had great success in getting all types of patients approved.

So sometimes it’s quick and sometimes it just takes a little bit of time. Everything that I see, though, gives me confidence about the 85% paid rate at peak, it’s just going to take us a few years to get there.

Jon Stonehouse: I think the other piece is Charlie made a decision a little over a year ago to change the model and improve this reimbursement and the support services around it. Starting to see the fruit of that. And I think we’ll continue to see that as this year progresses and future years. So it’s a great, great signal. Great signal.

Maury Raycroft: Got it. And maybe just a quick question. If you can comment on the way to say you’re seeing with gross to net. And with the price increase that you took in January, is that something that we should expect going forward for the next couple of years?

Jon Stonehouse: [Technical Difficulty] first one, you take the second.

Anthony Doyle: Yeah. On the GTN side, so for reimbursed product, we’ve historically had 15% to 20%. And much like last year, Q1 is at the higher end of that range, closer to 20%. For the remainder of the year, based on the speed at which Charlie’s team got through the [real] (ph) process, we’d expect it to come down and be at the lower end.

Charlie Gayer: And, Maury, this year we did — at the beginning of the year, we had a 5% price increase, and we expect to net about 3.5% of that. And as far as growth to the $800 million at peak in the US, all we would expect is very modest price increases as part of that build towards the $800 million.

Maury Raycroft: Got it. Thanks for taking my questions.

Operator: The next question comes from Tazeen Ahmad with Bank of America. Please go ahead.

Tazeen Ahmad: Hi, guys. Good morning and thanks for taking my questions. Can I ask about 1013? Any more color on when you expect to make a final decision on that asset? And are you going to be presenting any more data if you do intend to move forward with that? And then I just wanted to ask a question about guidance. And based on where you are still early in the year, is it possible that you could revise the upper end of guidance higher as the year progresses, just based on trends that you’re seeing so far? Thanks.

Jon Stonehouse: Yeah. On 10013, as we said at the beginning of the year, the goal is either to partner it or if we can’t, then we’ll stop the program. And so the next thing that you’ll likely hear is whether or not we’ve decided to partner the drug. And then on guidance, we’ve adjusted the bottom up in the range. And when we’re confident to adjust it further, we’ll let you know. But for right now, it’s moving the bottom up.

Operator: Okay. Was there a follow-up to your question?

Tazeen Ahmad: I think both were answered. Thanks.

Operator: Thank you. The next question comes from Serge Belanger with Needham & Company. Please go ahead.

Serge Belanger: Good morning. Thanks for taking my questions. Nice ORLADEYO quarter. I guess for Charlie, you mentioned two strong quarters of patient growth, exceeding the first two quarters of the launch. Can you give us just a little more color on that and maybe how it compares on a year-over-year basis? And then with the success of the reauthorization process, it sounds like we’re not going to see the usual seasonality trends, but curious how you think about your long-term target of 85% paid scripts? Is that still the target? And does that move up the timeline to hit that target? Thanks.

Charlie Gayer: Thanks, Serge. So just to clarify one thing. The last two quarters were the best two quarters since the first two quarters of launch. So the first two quarters were just slightly better. But I think what it shows is that there was no just — there’s no bolus of patients early that we got and then demand falls. Demand is actually building over time as customers gain more confidence, like I was saying in one of my previous responses. And then the 30% growth in revenue year-over-year, I think, kind of speaks for itself at this point in launch, to be growing that strongly is impressive. As far as the Q2 seasonality, as Anthony was saying, we would not expect as big a jump this year. We’re guiding to $97 million in Q2.

And we would expect that kind of, that same trend, I think, in the future, where we’re going to get more revenue in the first quarter just through more effective reauthorization processes. And then as far as the growth to 85%, that underlying improvement in the rate of paid. As I commented before, it’s going to take us some years to get there. All of these improvements that we’re making with adding to the team, getting better and better each year going through this process tells me we’re going to get there. And the bigger jump, the bigger opportunity would be next year with the IRA rolling in and hopefully, that helps us get more Medicare patients to paid therapy as the maximum out-of-pocket goes to $2,000. But the overall growth to 85% is going to be a multiyear process.

Serge Belanger: Thank you.

Operator: The next question comes from Brian Abrahams with RBC Capital Markets. Please go ahead.

Unidentified Analyst: Hi everyone. This is Nevin on for Brian. Congrats on a good quarter. I just had a couple of questions on SG&A and some of your strategic initiatives to maybe accelerate some of that. Can you speak to some of those, whether you have any sales acceleration initiatives planned to drive any increased uptake either in the US or ex-US as well with some of the expansions in some of the geographies ex-US? And then are you — in fourth quarter, you had guided towards increase in SG&A of about $20 million. Is that still the case for 2024? And could we expect the patient services team to be in place throughout the year? Or would this be something that you would add to the team seasonally as well near the end of the year, maybe add to the team to help with the [real] (ph) at the beginning?

Jon Stonehouse: Charlie, maybe just talk just talk in general about where you’re at with the build of your team and then Anthony can talk directly on some of these things.

Charlie Gayer: Sure. And I’ll also talk about some of those — the specific initiatives that Nevin asked about. So the investments we made last year were to, like I said, just to improve the efficiency and effectiveness. We would — we’re always looking to make improvements at the margin. If we see an opportunity, we’ll add a little bit. We don’t expect any major adds to our team at this point. It will just be kind of marginal additions, particularly as our patient base grows. Our patient services team will grow slightly as the patient base grows. But that’s not a seasonal growth. That’s kind of long-term investment in the team. And then we’re always looking to strengthen the brand with additional data and additional initiatives. So we’ll continue to look for those opportunities, like the real-world evidence that I described in my prepared remarks.

Anthony Doyle: In terms of where we are versus what we had talked about previously, I’d expect about a 20% increase in SG&A year-over-year. But again, most of that is broken down into kind of the full year impact for the increases that Charlie’s team did where you had partial impact last year. And then for the ex-US side, yeah, there’ll be [smaller] (ph) increases. But I would think about it far more in terms of how the team is focusing on the idea of margin accretion. So the investments that we are making, the investments that we continue to make, are going to be significantly less than the revenues that are generated as we get towards peak. And so I’m really excited to start to see that margin accretion and its role in getting us to and through profitability.

Unidentified Analyst: Got it. Thank you. Just wanted to clarify, you mentioned 20% increase year-over-year in SG&A?

Anthony Doyle: Sorry. Sorry, $20 million.

Unidentified Analyst: Okay. Thank you.

Operator: The next question comes from Liisa Bayko with Evercore ISI. Please go ahead.

Liisa Bayko: Hi, congrats on a good quarter. Just a couple of points of clarification. For your outside like OUS revenue, and you said it was about 10%, does that include the Japanese royalty or no?

Anthony Doyle: Yeah, it does include the Japanese royalty.

Liisa Bayko: Okay. And then what were gross to net in the quarter? And maybe you can comment on how they’ll evolve over the course of this year?

Anthony Doyle: Yeah. So gross to net on the reimbursed side here in the US closer to 20%. So again, historically guiding to 15% to 20%. That includes the reauthorization impact, the co-pay assistance impacts, the reset of that and then moving towards the latter part of the year, it will normalize closer into that 15% range, but it will average us out for the year in the 15% to 20%.

Liisa Bayko: Okay. And then Other revenue, does that — how much of that is Japanese revenue and how much of that is c or other stuff? Could you clarify?

Jon Stonehouse: Yeah, revenue is all RAPIVAB.

Anthony Doyle: Yeah. So $88.9 million of it is ORLADEYO and then $3.9 million is RAPIVAB. If you’re asking for a specific split of product versus other revenue, we don’t generally give that. But listen, RAPIVAB revenue for the most part is inconsequential, especially as ORLADEYO revenue’s getting to the point where it’s almost $100 million a quarter.

Liisa Bayko: Okay. But that doesn’t include Japanese revenue in that line, yes.

Charlie Gayer: The $88.9 million does include Japanese.

Anthony Doyle: The $88.9 million does include ORLADEYO or sorry, Japanese ORLADEYO revenue.

Liisa Bayko: Okay. Got it. And then any inventory changes in the quarter?

Anthony Doyle: No. We continue to be laser focused on ensuring that we have significant quantities. The cost of sales is really, really low. And so our team does a great job of making sure that we have enough for all of our territories.

Liisa Bayko: Okay. Great. And then just finally, can you maybe just talk about the pediatric expansion opportunity and just kind of qualify that in terms of potential upside? Thanks.

Charlie Gayer: Sure. I think the first point is, as Helen pointed out, there’s just a huge need amongst kids to have an oral therapy. It’s not just the kids, it’s the parents. So I think that this is a very highly anticipated product launch when it comes from the market. We think there are about — in the US, about 500 kids who may be in the consideration for prophylactic therapy. It’s an evolving space because there haven’t been prophy therapies available for kids before and then to have the first oral, it will change. So it’s up to 500 patients for prophylaxis. And then the other piece is just the halo effect, which is another way to introduce ORLADEYO to physicians and the families to patients. And so we expect it to be an important for us.

Jon Stonehouse: And as Helen said in her remarks, when you enroll faster than you thought, that’s usually a really good sign that you’ve got something that people want, and that’s exactly what happened.

Liisa Bayko: Great. Thanks.

Operator: The next question comes from Stacy Ku with TD Cowen. Please go ahead.

Stacy Ku: Hey, thanks so much for taking our questions and congratulations on the progress. So we have a few follow-ups. So first, regarding your Q1 outperformance, what do you think is contributing to this new prescription growth, just characterize these patients a bit more? Is it coming from new prescribers versus current prescribers, just from kind of your patient activation and activities? That’s the first question. And then the second is around your long-term expectations for the Japanese launch of ORLADEYO. Can you just speak a little bit more about what you’re seeing so far in early days and how you feel comfortable kind of long term for that opportunity? And then last, just on 10013. For the partnership, is the team waiting for the full 24-week results before engaging in discussions, and just to confirm, you all would still be getting those results in the middle of 2024 but you do not anticipate disclosing data to The Street? Thanks so much.

Charlie Gayer: Hi, Stacy, so the first question, just in terms of the color on the new growth, it’s very similar to what we’ve seen before. So we’re getting prescriptions from existing prescribers. We’re always adding new prescribers, as more become aware of ORLADEYO and gain confidence. The mix of patients is also very similar. The roughly 50% switching from other prophy and the other 50% best we can tell being naive to prophylactic therapy. So, very consistent and, as I mentioned earlier, consistent to what physicians expect to do in the future. They see a lot more growth coming over the next year. As far as Japan, we think still that there are fewer than 1,000 patients who have been identified in a market that could be 2,500 to even 3,000 HAE patients.

So what the team is focused on right now is driving use of prophylaxis and oral prophylaxis within the diagnosed patient community and just building awareness about ORLADEYO. Longer term, we think that as we’re there with ORLADEYO, other manufacturers are there with other prophylaxis products, there will be more patient diagnosis. And so we expect this to be a growing market for the next five or 10 years. We’re very, very enthusiastic about the opportunity in Japan.

Jon Stonehouse: And then, Stacy, on 10013, yes, we expect the data in the middle of this year. But what matters since we’re not advancing it, we’re seeking a partner to advance, it’s what do they think about the data at the end of the day. And so that’s where we’ll focus our attention.

Stacy Ku: Wonderful. Thank you so much.

Operator: [Operator Instructions] The next question comes from Gena Wang with Barclays. Please go ahead.

Gena Wang: Thank you. Maybe just one regarding the Japan since we have quite a few questions on Japan market. What is the price there? Is that also a 30% to 50% discount of the US price relative — like similar to Europe price? And the second question is regarding the pediatric trial. I noticed it is a single-arm study. What data could be approvable based on FDA feedback?

Jon Stonehouse: Charlie, you take Japan price and Helen take the…

Charlie Gayer: Gena, the Japanese price is actually the second highest price — ORLADEYO price in the world. So at the moment — and then, of course, it’s subject to exchange rate variation. But at the moment, it’s close to $200,000 per year. So it’s higher than our European prices.

Jon Stonehouse: And then Helen.

Helen Thackray: Question on the pediatric trial. It is a single arm, and that’s fairly standard now for what’s called extrapolation of the data. The point is to match exposures in the pediatric population with the exposures that are known to be effective in the adult population. So it’s safety and PK, and that’s what we’ll really be submitted to the agency.

Gena Wang: I noticed you do have also attack rate collection. Will FDA also consider that data point, any like, say, threshold that you have to achieve?

Helen Thackray: So attack rate’s always collected when you’re following patients, and we know the patient is doing well. That will be submitted as part of the data set, but the decision will be based on safety and the exposure.

Gena Wang: Okay. Thank you.

Operator: The next question comes from Francois Brisebois with Oppenheimer. Please go ahead.

Francois Brisebois: Hey, thanks. In terms of the pediatric importance here, you talked about up to 500 patients, but is there a scenario where you’d ever expect the patient to a pediatric to be on this and then turn into an adult and maybe change treatment option? Just wondering too if you can remind us all of the competition on the pediatric front.

Charlie Gayer: I think we — what we would see is that patients who — kids that need to start on prophylaxis and oral is going to be the best option for them just for obvious reasons. And this is a lifelong disease. So we think there’s an opportunity for these kids to be on ORLADEYO for a very long period of time. And then as I mentioned earlier, just the family aspect of it too as a genetic disease. Usually, there is a parent or often a sibling, other family members in the household. And so it’s an opportunity for whole families to become more aware of the benefits of ORLADEYO. So we would expect them to stay on for the long term.

Francois Brisebois: Understood. Thank you.

Operator: The next question comes from Jon Wolleben with JMP Securities. Please go ahead.

Jon Wolleben: Hey, thanks for taking the question. One on your market research, which has been seemingly accurate in the past. When you ask about prescribing in the next 12 months, wondering if you actually ask longer term as well about ultimate usage, how that factors into your growth projection? Then also, it seems to be reflective of the uptake we’re seeing. Do you ever have to expand who you’re asking and what you’re asking about to get more insight into what the trajectory looks like three, four years down the line?

Charlie Gayer: Yeah. Thanks for the question, Jon. We absolutely do look at that longer term and ask them about the longer term. The growth in the next 12 months, that’s the quarterly survey that we do with 60 to 100 physicians every quarter. Then we use that information plus other studies once a year to build a much longer-term model where we also incorporate everything that might come in the future, and we ask physicians, their opinions of those products, what they think they will use. And then that all goes into a much larger market forecasting model to predict the future. It was very accurate in our first year of launch. And every year, our team updates this model. And so we have a lot of confidence in our future predictions. And it is — that is where our $1 billion peak revenue comes from. It comes from that model that incorporates all of the forward-looking market research.

Jon Wolleben: And then when this year, do you guys do that annual revamp? And do you — will you guys let us know the results?

Charlie Gayer: We will let you know if anything changes. We do it once a year around the middle of the year. And yeah, we — our goal is to be accurate in all of our forecasting. So if we see anything different, we’ll definitely let you know.

Jon Wolleben: Got it. Thanks, Charlie.

Operator: Your last question comes from Chris Raymond with Piper Sandler. Please go ahead.

Chris Raymond: Thanks for squeezing me in. Jon, you’ve been pretty open in the past when folks have asked you guys about strategic interest and sort of inbound interest. And I think it’s pretty clear now — by now that there’s a lot of buoyancy here, if you will, for maybe lack of a better word to ORLADEYO’s uptake. I guess any discernible change in terms of frequency or maybe tenor of the inbound calls that you guys have had from strategics? Thanks.

Jon Stonehouse: Yeah, Chris, I mean, you know I can’t talk about specifics and volume or changes. But the answer about our willingness to entertain those remains unchanged. We’re a public company, and we have shareholder interest in our minds. And if someone is interested, we’ll take the call. So no change there.

Chris Raymond: Thank you.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Jon Stonehouse for any closing remarks.

Jon Stonehouse: Yeah. Thanks again for your interest in our company. We are off to a really, really good start to this year, and we’re super excited about where this will lead us to in terms of ORLADEYO trajectory and advancing the pipeline. So we’re focused on continuing this momentum throughout the year and look forward to updating you as we have new information. Have a great day.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.