BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) Q3 2024 Earnings Call Transcript

BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) Q3 2024 Earnings Call Transcript November 4, 2024

Operator: Good day and Welcome to the BioCryst Third Quarter 2024 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to John Bluth, Chief Communications Officer. Please go ahead.

John Bluth: Thanks, Dave. Good morning and welcome to BioCryst Third 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; and Chief Data and Insights Officer, Jinky Rosselli. Following our remarks, we’ll 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 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 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. Our third quarter performance is remarkable on multiple fronts. First, growing ORLADEYO quarterly revenue year-over-year by nearly 36% now four years in from approval is amazing. This is a result of growing confidence in our therapy where physicians are seeing that ORLADEYO offers many of their patients both outstanding efficacy and convenience. Next, advancing BCX17725 for Netherton syndrome into the clinic is exciting, especially considering there is nothing to treat the underlying cause of this disease. And Finally, being able to do all of this and move closer to sustainable profitability supports that we are building a company with the potential for durable growth. That’s been our goal, and it’s great to see it coming together quarter after quarter after quarter.

So, today Charlie will share more about our performance with ORLADEYO and how it continues to reinforce and grow our confidence in the path to $1 billion at peak, even in an increasingly crowded market. Helen will share how there is more potential with ORLADEYO by expanding the label to younger children and starting a Phase 4 study to help physicians and patients learn more about the best ways to switch therapies. She will also share the importance of moving into the clinic with BCX17725 for patients living with Netherton syndrome. And Anthony will wrap up by sharing how our financial position gets stronger and stronger and we are well on our way to our commitment of achieving sustained profitability. With that, I’ll turn it over to Charlie.

Charlie Gayer : Thanks John. We had another great quarter for ORLADEYO with $116.3 million in global revenue and nearly 36% year-over-year growth in year four. Prescribers and patients are increasingly convinced that ORLADEYO delivers outstanding efficacy, as well as convenience. We added 67 new US Prescribers in the quarter, one of our best quarters in the last two years. And new prescriptions came in at the same elevated rate we have now seen for 12 months straight. In fact, US start forms over the past 12 months are up almost 15% compared to the prior 12 months. As far as improving paid therapy, we are ahead of plan. I’ve described before that our goal is to hold the paid rate steady in the second half of the year while advancing in the first half.

So it’s great news that we improved the paid rate by almost 0.5% to 74.8% compared to a drop of 2% in the third quarter last year. The commercial paid rate held steady at 82% and the Medicare rate ticked up 3% to 55%. This progress increases our confidence that we will reach our goal of 85% paid overall, and we expect to take another big step in that direction in the first half of 2025. With a strong demand and improved paid rate, we are tightening our revenue guidance for 2024 to $430 million to $435 million, the upper end of our prior range. ORLADEYO has been on the market for almost four years, and we have accumulated a large and growing body of real-world evidence that is reinforcing prescribers’ views about the product while driving growth.

Last week at the ACAAI conference, we presented two posters showing significant and sustained real-world attack reductions in over 450 patients with Type 1 or Type 2 HAE and over 350 patients with HAE with C1 normal inhibitor. These are unprecedented patient numbers for evidence reported on any HAE prophy therapy. The Type 1 and 2 patients reported experiencing a median rate of just one-third of an attack per month. That’s only four attacks per year. For patients, this is what great attack control looks like. And as we described last quarter, three out of four patients in our market research studies report their attacks are less severe on ORLADEYO. The C1 normal inhibitor patients reported median rates of less than an attack per month, down from over three per month before starting ORLADEYO.

C1 normal patients typically have struggled for years to find an effective therapy, and we’re glad that so many are benefiting from ORLADEYO. We also presented a poster last week confirming high patient retention on ORLADEYO. The analysis of payer claims showed that patients starting ORLADEYO, Takhzyro, or Haegarda have similar one-year adherence around 60%. The analysis also showed that for patients with at least two fills of their prescription, one-year adherence was 71% for ORLADEYO and 63% for the other two products. No HAE therapy is perfect for every patient, but these data make sense. If patients are experiencing just a few attacks per year on an oral once-daily therapy. Why wouldn’t they remain on ORLADEYO long-term? That long-term stickiness is what our market research and predictive modeling show, even when accounting for the launch of several new HAE therapies in the coming years.

As described on Slide 9, we conduct a comprehensive annual exercise, including a conjoint preference study of 175 HAE treaters, 100 HAE patients, and over 50 payers, followed by running a Monte Carlo model with 6,000 simulated interactions between patients, physicians, and payers. That’s a really big number for a market that had about 8,500 diagnosed and treated patients in 2023. Those 6,000 simulations account for the many dynamics that affect treatment choice, such as product preference, frequency of visits to physicians, and future product launch dates. To assess treatment preference, we show respondents the best-case product profiles for potential new competitors, but are conservative about the profile we show for ORLADEYO, despite the real-world attack control that we are seeing.

The results of this exercise have been consistent over the past three years, even as we add information about potential competitors and include new cohorts of physicians and patients in the market research every year. Our most recent run, showed on Slide 10, reinforced what we have seen before. This comprehensive research and modeling predicts that ORLADEYO will reach and maintain a steady state of over 2,000 patients after 2028, even as [newly-laudux] (ph) are predicted to gain share in the overall market. We are very confident in what we see now and for the future of ORLADEYO. That confidence comes from the huge volume of evidence that we’ve collected and will continue to collect. What we see is compound annual global revenue growth of nearly 20% through 2029, when we expect to reach $1 billion in annual revenue, followed by up to a decade of stable and significant cash flow that will help fund our innovative pipeline.

I’ll turn it over to Helen to describe the recent and upcoming advances in that pipeline.

Helen Thackray : Thanks, Charlie. As both a pediatrician and a parent, I’m incredibly proud that we’re on track for regulatory submissions for the first oral prophylactic therapy for children with HAE in 2025. This is an incredibly important therapy that will change the lives of these children. We know that this disease manifests in childhood and can be seen beginning at very young ages. In toddlers and school-age children, recurrent swelling and unexplained pain not only need urgent medical attention, such as an emergency room visit or hospitalization, but also interrupt a child’s ability to learn, play, make friends, and experience a normal childhood. Frequent, unpredictable interruptions in family life and school are unfortunately, what’s normal for these children, making the burden of disease a real problem for them and their caregivers.

Treatment availability for children with HAE has lagged behind that of adults. The only prophylaxis is by injection, and parents have to inject their child at home multiple times a month, every month, just to prevent acute attacks. Imagine the burden this puts on the whole family. Parents face the dilemma of giving their child injections or exposing them to HAE attacks. We plan to change this completely with the new ORLADEYO granules. They’re about the size of sprinkles, so they provide lots of options. For younger children, these can be mixed in soft foods such as chocolate pudding for easy dosing. Older kids can put the granules into a glass of water or even directly in their mouth and wash it down with a drink. That ease-of-use alone will be transformative for many families.

So what comes next with the ORLADEYO pediatric program? We reported earlier this year that enrollment in the APeX-P study completed, and now we’ve also completed the observations for the primary outcome, which is evaluation of exposure to the drug in these young patients. They’ll continue on drug as the analysis and upcoming regulatory submissions are underway. Now I’ll turn to the transition study to build more post-market evidence for ORLADEYO. As Charlie described, 52% of patients initiating ORLADEYO have switched from another prophylactic therapy and the evidence shows they do very well. Physicians often ask us about the best strategy for making the transition. And to answer this, we’ve opened the Phase 4 APeX-P study — APeX-T study, to collect data on the transition, enrolling patients who’ve decided to switch.

The physician will determine how to manage the transition over a defined time period, and this could involve switching immediately or having some overlap between the injectable prophylaxis and ORLADEYO. The goal is to understand how physicians are approaching the transition and to describe the post-transition experience for patients. We’re confident this Phase 4 study will provide more knowledge and experience supporting the decision for future patients to switch as well. We are excited to get this started. Now let’s turn to the pipeline. I recently met a patient who described what it was like living with Netherton syndrome with skin that shed and peeled-off in big pieces from fingers, arms and legs every day at school, work and social events.

This patient described the shame of being a young child on the first day at school, when no one else in the class, not even the teacher, felt comfortable holding hands. Today, there is no disease-altering therapy available for Netherton syndrome. Treatment is limited to supportive care involving topical treatment of the skin with cumbersome and messy ointments and creams to suit the skin and decrease the scaling. The patient I met has learned to build this into a lifelong daily routine and even so continue to have such profound peeling and shedding of skin that it was hard to face new social interactions. I realized how much of a burden this disease is every day, starting with early childhood and continuing through life. As reported in October, we recently initiated dosing in a Phase I healthy volunteer study for BCX17725, our potent KLK5 inhibitor for the treatment of Netherton syndrome.

I’m proud to say that this is a huge milestone for patients and for BioCryst. This marks the successful rapid delivery of our first protein therapeutic into the clinic using our new protein platform technology to diversify and expand our pipeline capabilities. And we are evaluating BCX17725 as a functional replacement to correct for the missing protein right at the source for Netherton syndrome. We are looking for a dramatic reduction in the symptoms of itchiness, flaking and peeling skin. We plan to move quickly next year to patients to evaluate for exposure in the skin and ultimately to assess improvement and healing of the skin. Finally, I’ll turn to our next drug coming to the clinic avoralstat being evaluated for treatment of diabetic macular edema.

What is the effect of this disease? Patients with diabetic macular edema progressively lose their vision, as a result of the effect of diabetes, which causes leakiness in the blood vessels of the retina, resulting in accumulation of fluid known as edema, in the microscopic layers of the retina. A patient might not recognize it as anything more than fuzziness in the vision at first, with difficulty reading or focusing on small things. Over time, however visual acuity is impaired and patients lose the ability to read, drive and do routine tasks. Current treatment includes VEGF inhibitors that slow the leakiness of the retinal blood vessels and slow or decrease accumulating edema. At some point, this therapy stops working, patients lose their vision.

Recently, plasma kallikrein has been shown to contribute to the leaking of the retinal blood vessels in DME and we also know that getting adequate durable exposure to a drug at the retina is a critical step for efficacy. We believe avoralstat and plasma kallikrein inhibitor is the right drug to achieve this. Our goal is to deliver avoralstat continuously by placing it adjacent to the retina, where it will slowly diffuse providing steady exposure lasting months. We’ll know we’ve been successful if we see the macular edema decrease in the near-term and ultimately, visual acuity improves. We look forward to initiating our first study of avoralstat in patients with DME in 2025. So in summary, in 2025, we’ll have two new programs dosing in patients in Netherton syndrome and DME with initial data by the end of the year.

And now I’ll turn the call to Anthony.

Anthony Doyle: Thanks, Helen. It’s great to see that in addition to ORLADEYO having another really impressive quarter, we are also making significant progress on the development side, all while continuing along our path to profitability. You can find our detailed third quarter financials in today’s earnings press release, and I’d like to call your attention to a few items for the quarter before reviewing year-end guidance. Total revenue for the quarter was $117.1 million with $116.3 million of that coming from ORLADEYO. That’s an almost 36% growth in ORLADEYO quarterly revenue over the same quarter last year, a 33% increase in ORLADEYO revenue on a year-to-date basis over last year, and ORLADEYO revenues in the past 12 months are now over $404 million.

Of the $116.3 million of global ORLADEYO revenue — sorry, $103.1 million came from US sales with the remaining $13.2 million or 11.3% coming from ex-US sales. Operating expenses, not including non-cash stock compensation for the quarter were $92.2 million. Stock compensation for the quarter was $17.2 million and so GAAP operating expenses came in at $109.4 million. We achieved an operating profit for the quarter of $24.9 million, excluding non-cash stock comp and even when including non-cash stock comp, we made an operating profit of $7.7 million. Cash at the end of the quarter was up $351.7 million and we had positive net cash flow for the quarter of over $13 million. Continuing strong revenue growth combined with disciplined capital allocation were the main drivers.

Also worthy of note, is that we chose not to elect to pick the 50% interest option in Q3, meaning that we paid out an extra $5 million of cash versus prior periods. So being able to achieve that level of cash positivity is a great achievement. Not electing to exercise the pick option in Q3, and also not electing to draw the additional $150 million in debt tranches, both of which have now expired, is due to the strong cash position and outlook for the company and our independence from capital markets. While Q4 and Q1 will likely be cash flow negative, we expect that later next year, we will see sustainably positive quarterly cash flow. Charlie gave updated 2024 revenue guidance for ORLADEYO earlier, and we are now planning to achieve between $430 million and $435 million.

Given that year-to-date ORLADEYO revenues are at $313.5 million, this means that even more of the revenue that we generate in Q4, will fall into the lower royalty tier as we move above $350 million in annual sales during Q4 and could therefore result in an almost $8 million reduction in royalties for Q3 versus — Q4 versus Q3. In addition to that, we expect significant near-term revenues for RAPIVAB. First, we have API orders for our Southeast Asia partners for Q4 totaling almost $7 million. Additionally, with the announcement of the new five-year $69 million US government stockpile contract for RAPIVAB so around $14 million per option. We now expect to be able to ship a significant portion of the first option for this order in either late Q4 or in the first half of 2025.

And the revenue associated with that shipment should be $10 million with the remaining $4 million shipment likely later in the first half of 2025. Conservatively, for RAPIVAB for full year, we expect to have revenue of around $13 million and therefore total company revenue should be in the range of $443 million to $448 million. If we deliver the first part of the stockpile order in Q4 that would result in an upside to this guidance. For OpEx, we are now guiding at between $380 million and $390 million. The main drivers for the increase are increased cost of goods sold related to the RAPIVAB sales, especially the API sales which are at lower margins. Increased variable costs like incentive compensation and distribution costs related to the continued strong revenue performance for ORLADEYO, and increased expenses that are seasonally booked in Q4 related to our support for the HAE community, including charitable donations.

I know we said this before, but the company really is in the best financial position that we’ve ever been in. Advancing past this milepost of achieving a quarter with such significant cash positivity is a great step on our path to profitability, the path that we feel more confident than ever of achieving, while maintaining financial independence from the capital markets. Having generated a significant operating profit in each of the past two quarters now, we will generate an operating profit for full year 2024, not including non-cash stock comp and be close to an operating profit even when incorporating non-cash stock comp. Next year, we remain confident that we can achieve quarterly cash flow positivity and be approaching quarterly EPS positivity in the second half of the year and in 2026, we can achieve positivity in both of these metrics on a full year basis.

With growing ORLADEYO revenues, plans to submit an NDA for ORLADEYO in children aged 2 to 12 and also generating clinical data in both Netherton syndrome and DME patients during that time frame. I’m very excited for the future of the company in the coming months and years. Operator, we can now open for Q&A.

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

Q&A Session

Nick Lenard: Hi, this is Nick on for Jeff. Thanks for taking our questions. The first, on patient growth for ORLADEYO, out of the [prophy] (ph) experience switch patient population, patients moving to prophy from on-demand and those naive to treatment. Can you talk a little bit more about which you think will drive more growth in the near-term and maybe which population represents a long-term opportunity? And then also thinking about your guidance of approaching quarterly positive EPS and positive cash flows in the second half of ’25. Can you just help provide a little bit more framework on how you’re thinking about capital allocation and spend management, especially as your pipeline begins to enter the clinic?

Jon Stonehouse: Charlie, you want to take that?

Charlie Gayer: Sure. So Nick, on your first question about whether prophy switches or patients moving from acute-only to ORLADEYO drives a bigger portion. What we’ve seen since the start of the launch and this continues is a really even split between the two. Over the longer-term, as we kind of get out to that peak of $1 billion, we would expect that prophy switch will drive a larger portion of it. But in the next year or so, we expect that kind of even split between the two. And then Anthony, do you want to?

Anthony Doyle: In terms of capital allocation, not just for next year, but kind of near-term years through 2026 that we provided guidance for revenues will outpace the OpEx growth that we have we feel very comfortable with that. So in terms of capital allocation, our focus will remain on kind of two, three things. One, continuing to secure additional growth for ORLADEYO both here and internationally, continuing to fund the advancement of both Netherton syndrome and DME trials into the clinic into patients and then continuing to advance the early phase pipeline that we have high hopes for. During that period, we will expect to see margin accretion. And again we feel very comfortable that we’ll get to EPS and cash flow positivity or approaching at tail-end of next year but 2026, we expect to — we fully expect to hit both of them for a full year.

Nick Lenard: Great. Thank you.

Jon Stonehouse: You’re welcome.

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

Tazeen Ahmad: Hi guys good morning. Thanks for taking my questions. The first is on Netherton. You’ve now guided to presenting some initial data next year. What exactly should we be expecting to see? And what kind of data are you looking for? Is it biomarker data? Is it signs of efficacy? Are you just looking for any kind of signal of activity, as well as safety. It would be helpful to kind of frame that expectation — and then just to clarify, as far as OpEx goes, how should we be thinking about that heading into next year? You are investing into moving other programs into clinic and so relative to where you end this year, just directionally, how should we be thinking about OpEx? Thanks.

Jon Stonehouse: So Helen, why don’t you take the Netherton question and Anthony, you can take the OpEx?

Helen Thackray: Yes. So on the Netherton syndrome program, we’ll be moving into patients next year. We’ll be looking for data that will be a progression of finding. So first, we are looking for penetration of skin exposure at the site of the target. Second, we’ll be looking for markers of activity in the skin. And third, then we’ll be looking for recovery in the skin. That will be longer-term. And so that will be, I think, later.

Jon Stonehouse: And Helen, maybe just talk about what we are trying to do with this drug. It’s not just the creams and addressing the symptoms, it’s changing the disease. Can you talk about that?

Helen Thackray: Yes. So what’s great about this approach is that it’s a disease — it’s a targeted therapy for the disease. So where the standard-of-care is topical and supportive treatment at the moment. This would affect the target at the site of disease action in the skin and correct for that missing activity of the protein.

Jon Stonehouse: Like a functional cure.

Helen Thackray: It’s a functional cure. And what we’re looking for then is the evidence first of all, that the drug is getting to the point in the skin where it needs to act and then second, that it is having the effect it needs to have, and we’ll be looking at the healing of the skin and prevention of itching and scaling.

Anthony Doyle: Yes. In terms of OpEx, so quarters one, two and three relatively consistent, give or take a few million dollars in terms of our numbers. Q4 seasonally, we usually see increased OpEx for that period. But going into next year, we’ll probably give guidance at the start of the year on a much more specific basis. But what I would say is for next year, in terms of — looking at revenue versus OpEx, revenue growth on an absolute basis will significantly outpace the OpEx growth. So while I’d expect there to be OpEx growth, especially as we move to — of our assets into the clinic, significantly outpaced by revenue and therefore, continuing to see margin accretion during that period.

Jon Stonehouse: Yes. So even when we get to pivotal studies, the revenue will be so high with ORLADEYO that it will outpace the spend.

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

Brian Abrahams: Hi guys good morning. Thanks for taking my questions and congrats on the quarter and the continued progress. Two for me. First off, your 2024 ORLADEYO revenue guidance suggests a slight slowdown in quarter-over-quarter sales growth for fourth quarter. I’m just wondering if that just reflects less expected benefit from the paid drug uptick that you saw in third quarter or anything else embedded in there? And then secondarily, just looking at 2025 consensus numbers, those do suggest a slight slowdown in the quarterly ORLADEYO sales growth rate as well. And I realize it is too early for specific guidance for next year, but just wondering if there’s anything we should be thinking about that you may be observing or respecting with respect to demand or gross to net trends that might support this expectation, as we get into next year. Thanks.

Jon Stonehouse: Charlie, you got both of those.

Charlie Gayer: Yes, I got it. So yes, Brian, for Q4 a couple of things. One, we do typically see the paid rate slowing down in the latter part of the year. And that’s really because as new patients come on to therapy, it’s harder to get them approved for paid therapy at the end of the year. And so that’s a contributor to why we have the bump up in the first half of next year as we’re able to convert those patients to paid. The other piece is just around the holidays and the holidays don’t set up particularly well this year, the way Christmas falls, but what we’ve reported, the $430 million to $435 million, that’s what we see in our models right now. As far as the growth rate slowing next year, we are certainly not seeing any slowing in demand as I noted.

So clearly, the percentage growth over time will go down as the revenue keeps going up, but we’re really confident in what we see for next year, continued demand, continued patient switching. So next year should be a very good year for us.

Jon Stonehouse: Yes. Brian, I’d just restate what Charlie said earlier, which is 20% compound annual growth rate through 2029. That’s a nice clip, but nice growth.

Brian Abrahams: Thanks Jon, thanks Charlie really helpful.

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

Maury Raycroft: Hi, good morning. Congrats on the quarter and thanks for taking my questions. I was wondering for the 67 new US prescribers added this quarter, was that better than expected or as expected? And can you say how many of them are from Tier 1 versus Tier 2 and how this could contribute fourth quarter and going forward?

Charlie Gayer: Sure, Maury. The 67 was, as I noted it was one of our better quarters in the last two years. But all that said, the last eight quarters have been really strong. We’ve averaged about 62 new prescribers per quarter. So this was very much in-line with that consistent growth we’ve seen. We — in the quarter, we had another very even split between Tier 1 and Tier 2 physicians, as we have in recent quarters and we expect that to continue. So I think it is just a sign of how much demand there is for this drug and also how much opportunity we still have in front of us.

Maury Raycroft: Got it. And maybe a follow-up, just for the Phase IV study. What are some of your expectations for what the results could show in respect to switching dynamics? And what are some of the strategies for how you will leverage those data?

Jon Stonehouse: Helen?

Helen Thackray: So in terms of the results, and this is an observational study, it’s a Phase 4. So we are looking at how physicians are actually managing that transition. As I said in the remarks, they have a choice how they manage it, whether they transition the patient immediately. ORLADEYO whether they do it over time, and we’ll be looking for how that experience goes and then how patients are doing after the switch to ORLADEYO.

Maury Raycroft: Got it. Okay, thanks for taking my questions.

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

Stacy Ku: Hi, thanks for taking my questions. First for Charlie, a quick follow-up. As we think about these clinician additions for 2025, can you talk about your goals and potential additions for next year, just specific numbers around how many clinicians you aim to kind of add on. And then the next question is also for next year, what are your expectations in terms of the transition to paid just because we’ve seen such nice progress this year? And then last for Helen, can you speak further to this transition study. With these results, who you trying to target? Is it more for community clinicians? Or is it just to give more feedback for patients that are thinking about switching? Thank so much.

Charlie Gayer: Hi, Stacy. So goals for adding new physicians, I think generally, our goal is to continue the same progress that we’ve been making. So continue to reach both Tier 1s and Tier 2 physicians. At this point, a little over 70% of Tier 1 physicians have prescribed ORLADEYO. So we have more room to grow there in that group. And also that in Tier 1, there is a lot more opportunity within current prescribers to do more. So we’ll keep the focus there. But as I always say, if there is an HAE patient out there, if there is a physician treating an HAE patient, we will find that position, and we will talk to them about ORLADEYO and the team has done a great job with that. As far as the paid rate, we expect to make continued progress towards 85%.

And one thing that we’ve talked a lot about is how the Medicare paid rate has stepped back we’ll look to see in the first part of that next year, whether that corrects itself, whether patients are able to afford their copayments as the IRA rolls in. But we’ll have more to report on that in the first quarter.

Helen Thackray: And then with regard to the transition study. So first, we know that patients are doing well transitioning in the real world. We’ve seen that in the real-world evidence. We are getting questions as more and more physicians are prescribing ORLADEYO and those questions are how do I manage this? How does the patient transition do you start immediately? Or do you overlap therapies. So this study is to capture that experience in the real world and then use that information to describe it for physicians who are less experienced with managing patients with HAE through that transition.

Stacy Ku: Okay. Really helpful. Thank you.

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

Liisa Bayko: Hi, there. Can you talk a little bit more about your transition away from free drug on to commercial sort of the shape of that when we should get to that 85%. And then also how to think about the first quarter, I know that’s been a little lumpy, especially with the unknowns around the Medicare portion of that? Have you sorted through that, if you could give us any color, that would be great. Thank you.

Charlie Gayer: Sure. Again, the 85% is a long-term goal. We are making really good progress. As I noted, we’re already at 82% for the commercial segment. And commercial is about 60% of our patients overall. So it just — it shows where we are headed. We would expect it to get to the 85% over the next three years or so. But the big wild card is, as I was just saying, is what happens with the Medicare patients, as we go to the transition to the IRA and the MAX $2,000 out of pocket.

Liisa Bayko : Thank you.

Jon Stonehouse: Yes. And I’d just add Liisa, in the first quarter, we’ll have a better sense of that. That’s where that — you get a really good idea of who’s covered who’s not with Medicare in the first quarter. So we should have a better idea in.

Liisa Bayko: What factors there are under your control, if any?

Charlie Gayer: What’s under our control is the relationships that we have with patients and all the investments that I’ve described before to build up our team so that we have really the best-in-class patient services organization. And so we get ready for that Q1 reauthorization season. We learned a lot in the last couple of years. We’re going to put all those learnings into practice at the beginning of 2025. Our goal is to get better and better every year.

Jon Stonehouse: Yes. And I would say, while we can’t control this, the burden on the patient in Medicare is going down dramatically from last year to this year and from this year to next year. And then what we can’t control is timing, right? And how — when that effect? So could it come all in the first quarter? Possibly. Could it be spread out over a couple of years, possibly. We don’t know the answer to that.

Liisa Bayko: Great. Okay, thanks.

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

Gena Wang: Thank you. I have two questions. Maybe just follow up Liisa question. First question, also noncommercial setting. So I know there’s not too much you can do, but if there is unfavorable to you, what could be actual steps you can do regarding try to get additional improvement regarding the revenue and maybe also from the commercial side to reach the total $800 million revenue guidance in the US? And the second question is regarding your new assets. So the question for the 7725 Phase I data in 2025. How would you — do you need to do a biopsy the skin biopsy and to measure the protein expression. And I think that the heating part seems pretty straightforward. And then regarding the biomarker, could you give a little more color regarding what kind of protein expression you are looking for? And how do you measure that?

Jon Stonehouse: Okay. So Charlie, do you want to take question one and Helen, number two?

Charlie Gayer: Hi, Gena, as far as what we can do, I think going to say something pretty similar to the last couple of answers that we gave. We do what we can to help patients get ready, but there’s a lot that’s outside of our control. One thing also patients do is themselves is work closely with the HAEA, the Patient Association who also gives them a lot of education and information about getting to paid therapy. And that’s true for patients who have Medicare and patients who have other insurance. And so what we do is whatever we can do compliantly to help them educate them and put them in best position to get to paid. As Jon was just noting.

Jon Stonehouse: Sorry, Charlie. Just one other thing you said what could negatively go wrong. It’s actually trending in the positive we saw it go from under 50% now up to 55% this year. I’m certain that part of that is the changes in the cost of the patients, and we expect that to continue to improve. So I don’t think we see it negative, we see it moving in the positive direction. What we can’t predict is what I said before, the speed at which that changes.

Charlie Gayer: That’s right.

Helen Thackray: Yes. And then on [17725] (ph), so we’ll be enrolling in patients in 2025 with initial data coming in. It is common to do skin biopsy or to test the skin in this disease, and that’s a very good way of understanding if you’re getting penetration of the drug at the skin. So that’s a critical first step is to demonstrate that the drug is getting to the skin, binding to the target in the skin — and this drug is also — has very high affinity, so we’ll be looking for binding to the target and then maintenance of that binding. So once it’s on the target, it doesn’t come off. So in terms of biomarkers then in the skin, we’ll be looking, number one, as I said, for drug present in the skin, but number two, activity at target.

So this is activity of the drug in binding and preventing KLK5 activity. It’s possible downstream that we could also be looking at cytokine and cytokine release, that’s a downstream cascade reaction to KLK5 activity. That’s the kind of thing that we’ll define further as we move towards the clinical patients.

Jon Stonehouse: And Helen, is it safe to say with a potent drug like this, what dose we ultimately need and the frequency will be another important piece to learning.

Helen Thackray: It will be. Yes. So we’re expecting to see that activity binding affinity sticking and activity. But that means that we’ll be looking at how long is it before you need another dose. This could be a very potent — we expect to be delivering it potentially and subcutaneously, and it could be an extended interval time before a second dose is needed.

Gena Wang: Thank you.

Operator: And the final question comes from Serge Belanger with Needham & Company. Please go ahead.

Serge Belanger: Good morning and thanks for squeezing me in. I guess two for Charlie. The first one on patient adds. I think on Slide 8 where you lay out the path to get to $800 million in sales you assume an annual rate of 200 new patients. Just curious where you are tracking relative to that target given that you said that the rate is currently 14% or 15% above where you were 12 months ago? And then secondly, on the competition front, I know one of the prophylactics was delayed a little bit recently, but I think we should assume one or two new approvals on the prophy front in 2025. How do you think about the — that could impact the switch opportunity for ORLADEYO once they’re approved? Thanks.

Charlie Gayer: Thanks, Serge. Yes, on patient adds, we are very much on track. As you can imagine, we’re having a great year with ORLADEYO. And so as I said in my prepared remarks, we are as confident as ever. As far as the potential new competition yes, we expect two new injectable pro fees to launch sometime in the middle of next year. And what our — all of our modeling and market research shows is that new injectables will really compete with existing injectables, not with us as an oral but it’s an opportunity in that there will be more discussion about switching. And we have, we think — the most differentiated product with once-daily oral, and so it creates an opportunity for us. And — we were ready for anything that might have come this quarter now that it’s a little bit delayed, we will be ready at the middle of next year.

Jon Stonehouse: And Serge, I think about it this way, if a doc in a patient or at a point where they are open to switching from their current therapy. Why on earth wouldn’t they try the oil first, right? And so we think that’s a real opportunity.

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

Jon Stonehouse: Yes. So it’s great to see another outstanding quarter on multiple fronts. And these quarters are the building blocks of building a growing company and a sustainable company. And that doesn’t happen by accident. That happens by dedicated employees that are working their butts-off to deliver on our goals and continue to help us execute quarter after quarter after quarter. So I want to say thank you to all the BioCryst employees for another great quarter and what’s shaping up to be a fantastic year. You guys have a great day.

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