BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) Q4 2024 Earnings Call Transcript

BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) Q4 2024 Earnings Call Transcript February 24, 2025

BioCryst Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $-0.13 EPS, expectations were $-0.07.

Operator: Good morning, and welcome to the BioCryst Fourth Quarter 2024 Earnings Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to John Bluth at BioCryst. Please go ahead.

John Bluth: Thanks, Drew. Good morning, and welcome to BioCryst Fourth Quarter 2024 Corporate Update and Financial Results Conference Call. Press release and accompanying slides are available on our website. Participating with me today are CEO, John Stonehouse, CFO, Anthony Doyle, Chief Commercial Officer, Charlie Gayer, Chief R&D Officer, Dr. Helen Thackray. 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. Statements are subject to known and unknown risks and uncertainties, from any future results or performance which may cause our actual results, performance, or achievements to be materially different 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 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, refer to the earnings release posted in the press releases section of our Investor Relations website at www.biocryst.com. I’d like to turn the call over to John Stonehouse.

John Stonehouse: Thank you, John. We ended 2024 with the strongest execution and performance in the company’s history. What’s even more exciting is it happened across the company. For the full year 2024, Orladeo revenue year-over-year grew by 34%, and we added as many patients as we did in the first year of launch. This is an amazing result for a rare disease medicine, especially considering it came in the fourth year on the market and reflects excellent execution by the commercial team. Next, on the clinical front, we now have the data from our pediatric clinical trial with Orladeo to put us in a position to file the NDA this year. We also advanced BCX1775 for Netherton syndrome in the clinic and made progress with Avoralstat for DME that will enable us to put that program into the clinic this year.

All of these advancing programs represent an opportunity to serve patients and provide them something meaningfully better than is currently available to them. A chance to really change their life. Whether it’s no longer having to inject your toddler with their medicine for HAE, finally having a treatment to change the underlying cause of Netherton syndrome, or giving DME patients hope of a new therapy that may work for more patients and be given with fewer injections. The execution of our teams last year has put us in a great position to get data and answers on these programs later this year. And finally, we executed so well last year that we not only generated a non-GAAP operating profit, but this profit was over $60 million, which is three times larger than what we had planned.

The magnitude of the free cash flow we now expect over the next three years will likely further transform our company. The place we find ourselves in today was intentional. As the execution by the employees at BioCryst has never been better and the momentum we have is carrying over to this year and likely many years to come. I’ll now turn it over to Charlie.

Charlie Gayer: Thanks, John. Orladeo gained momentum in 2024 with over 34% growth in the fourth year on the market, and that increasing momentum is carrying into 2025. Demand in early 2025 has continued at the same strong pace we saw in 2024, but an even bigger source of early strength has been the impact of the Inflation Reduction Act for Medicare patients. We are seeing that a much higher percentage of Medicare patients on Orladeo can afford their co-payments, and this is happening at a rate ahead of our prior expectations. As a result, we are raising our Orladeo revenue guidance for the year to $535 million to $550 million. The full reauthorization season will run for at least two more months, and most reauthorizations within our large commercially insured patient base are still in process.

The outcome of those cases will dictate where the revenue ends up relative to the increased guidance range. We’ve described previously how HAE treaters are gaining enthusiasm for Orladeo, and we have four new posters of real-world evidence being presented this coming weekend at the Quad AI Conference in San Diego that help explain why. Two of the posters stratify patient-reported outcomes by baseline attack rate in type one and two patients as well as HAE patients with normal one inhibitor, and then examine long-term outcomes at twelve and eighteen months. These analyses include hundreds of patients each, which we believe are much larger volumes of evidence than have been reported for any other HAE prophylactic medication. The posters show that Orladeo dramatically reduces attack rates for patients with very high baseline rates and helps patients who are attack-free maintain zero attacks while benefiting from oral administration.

In other words, this is a treatment that works well for all types of HAE patients, not just patients with so-called mild disease. Our latest market tracking study completed in December underscored the momentum building among prescribers. Slide eight shows that 97% of the 60 US HAE treaters surveyed are considering prescribing Orladeo. Among those who have prescribed, 59% say they are extremely likely to prescribe Orladeo to more patients, a metric that is up from just 26% just eighteen months prior. So that prescribing momentum showed up in 2024 as the number of new prescriptions was exactly the same as in 2021, the first year of the launch. Slide nine shows that HAE treaters expect to continue the momentum by prescribing Orladeo to 17% more of their current patients in 2025 with an emphasis on prescribing to current injectable prophylaxis patients.

Over the first four years of the launch, this forward view of the coming year from physicians has been very predictive of the Orladeo growth trajectory. And physician intent is aligning with patient preference. Slide ten shows that over half of injectable prophylaxis patients would prefer an oral route of administration, while only one in five preferred an injectable. Over 1,200 US HAE treaters have prescribed Orladeo to over 3,000 patients through the end of 2024, and both patients and physicians are telling us to expect a lot more growth ahead. I’ll turn it over to Helen to describe other exciting sources of future growth.

Helen Thackray: Thanks, Charlie. In our pipeline, we’re making great progress already this year advancing both BCX1775 in Netherton syndrome and Avoralstat in diabetic macular edema towards meaningful clinical data readouts and submitting our NDA this year to expand the range for Orladeo to kids ages two to eleven. I’ll start with Netherton syndrome, a severe disease that has no approved treatments and for which we will have initial clinical data later this year as we evaluate BCX1775 for the potential to deliver a functional cure. Patients with Netherton syndrome have a genetic mutation causing abnormal skin turnover and inflammation with premature separation and peeling of the outer layers of skin. They experience intense chronic itching and redness, along with severe atopic symptoms like asthma and food allergies, which means the patients live with a disease that involves much more than red peeling skin.

The effect on their health and well-being is profound. One patient I spoke with described the constant battle she faces to keep her skin in good condition, spending hours a day applying ointments and lotions all over her body. Everyday life for her means having itchy, fragile skin, and being unable to prevent it from peeling off in big pieces. Even with her best efforts, she’s still been in the hospital multiple times for infections as a child and also as an adult. There are no disease-modifying options for patients like her even though she has a confirmed diagnosis and sees specialists for her care. Our goal is to change this. We’ve engineered BCX1775 to replace the missing protein function and to deliver this with very high potency. For subcutaneous delivery potential and high affinity, the ability to stick to the target for a long time and have a lasting effect.

We are aiming for a long dosing interval, every two weeks or longer, which we believe could deliver a differentiated therapy for Netherton syndrome. Today, BCX1775 is in a phase one trial with dose escalation underway in healthy volunteers. Next, we will start dosing patients, and we plan to have data this year to confirm that the drug gets to the skin in patients and that the drug has the intended biomarker activity on the target KLK5 in the skin. These patients will receive multiple doses of the drug so we can assess for healing of the skin using known endpoints for chronic skin disease. Because there is no cure for physicians to offer patients, we believe Netherton syndrome is underdiagnosed. What we know today is that Netherton syndrome is an ultra-rare disease and our studies estimate about 1,600 patients in the US, based on the reporting of a known feature called bamboo hair.

We also know that patients with a diagnosis of severe ichthyosis inflamed scaly skin may not be tested for the genetic mutation and yet many may in fact have it. We’ve seen how diagnosis rates change once a disease-targeting treatment becomes available for a rare disease. Not too long ago, HAE was thought to affect only about 2,000 patients in the US, but today, changes in therapy led to a known market more than five times the initial estimate, about 11,000 patients in the US. It is possible Netherton syndrome will follow this pattern, making it an even more attractive opportunity for a drug like BCX1775. Next in the pipeline, Avoralstat will be moving into the clinic in patients with diabetic macular edema this year. We’ve had a lot of interest from physicians in pursuing an alternative mechanism to treat DME because VEGF inhibitors are effective only for a little over half of all patients.

This gap in treatment leaves many with continuing loss of visual acuity, making independent living more and more difficult. Earlier this year, we presented images from a preclinical model that showed the cessation of vascular leakage after a suprachoroidal injection of Avoralstat, a plasma kallikrein inhibitor. The images, which you can see on slide nineteen, are from an animal model of retinal vascular leakage and show the change in that vascular treatment with Avoralstat. This effect lasted through twenty-one days before leaking started to return by the next time point of day thirty-six. This is a clear effect, and we believe it demonstrates the involvement of the plasma kallikrein-bradykinin pathway in retinal leakage. And importantly, provides strong evidence that plasma kallikrein inhibition may be an alternative pathway for reducing retinal vascular leakage.

Of course, the real assessment of potential for both efficacy and durability in treating DME can only be made in patients. We look forward to moving the program to the clinic later this year. We plan to enroll patients with newly diagnosed DME and including patients who received a few injections of anti-VEGF therapy. Our goal is that by the end of the year, we may be evaluating for activity such as measurable changes in edema in the first few patients on the trial. And last, following Charlie’s description of the robust real-world evidence we’re presenting this coming weekend at Quad AI, I’m really excited to report that the first data from our APEX-P trial with the pediatric oral granule formulation of Orladeo in children under twelve with HAE will be highlighted in a late-breaking abstract on Sunday.

This is the largest trial to date evaluating prophylactic therapy for HAE in this age group, and we are thrilled with the results. I want to thank all the children and their families and our investigators who made this trial possible. There is an urgent medical need for an oral therapy to prevent HAE attacks in children. Both a pediatrician and a mom, I am truly excited that we are getting closer to making Orladeo available for children with HAE. In the APEX-P trial, we saw that the granules were safe and well-tolerated in this pediatric population, and children achieved early and sustained reduction in monthly HAE attack rates. In fact, twenty-five out of twenty-nine children remain on the study. These results for safety and efficacy are consistent with the adolescent and adult experience, and we are on track to file our NDA this year.

We also learned that children with HAE are experiencing severe swelling attacks at a very young age, with a median age of onset at two years. These findings support an earlier age of symptom onset and need for HAE prophylaxis than has generally been understood. And we’ve learned that the oral granule formulation for Orladeo also allows simple prophylaxis with great attack control to be provided for the youngest children. These outstanding data will be included in our NDA submission, which is on track for later this year. So we have a very exciting 2025 ahead, with the pediatric NDA for Orladeo and our initial clinical data coming from both our Netherton syndrome and DME programs.

Anthony Doyle: Thanks, Helen. At the beginning of last year, we laid out our goals for strong commercial growth for Orladeo, advancing our early pipeline into the clinic, and moving towards sustainable and meaningful profitability in the short term. As we shared earlier, it’s great to see that we’ve exceeded even our own expectations in achieving these goals. You can find our detailed fourth 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 came in at $131.5 million, $124.2 million of which came from Orladeo. For the full year 2024, total revenue was $450.7 million, with Orladeo contributing $437.7 million of that. For quarter four, $17.2 million or 13.9% of the $124.2 million total for Orladeo came from ex-US, while for the full year, it was $51.7 million or 11.8% of the $437.7 million total.

Operating expenses, not including non-cash stock compensation for the quarter, were approximately $115 million. Operating expenses, not including non-cash stock-based compensation for the full year 2024, came in at $388 million, an increase of just $8 million versus 2023. With revenue increasing $119 million year-over-year, and this small increase in OpEx, this resulted in an operating profit not including stock-based compensation of $62.9 million. That’s an increase of $111 million versus the non-GAAP operating loss of $48.1 million from 2023. A remarkable achievement that sets us up for 2025 and beyond. Cash at the end of the year was approximately $343 million, and net cash utilization for the quarter was $8.4 million. As Charlie shared, the increasing guidance for Orladeo revenue for this year is between $535 million and $550 million based on the progress that we’ve seen thus far in Q1 around reauthorization and Medicare reimbursement.

For total revenue, we’re adjusting guidance upwards in line with the Orladeo increase to between $560 million and $575 million. While there’s some increased uncertainty around future government funding for RAPIVAB, we’re also seeing strong commercial demand for the product given the prevalence of flu at the moment. For OpEx, the improved Orladeo commercial performance will result in increased expenses around COGS, distribution fees, and incentive compensation. We should remain bound by the upper end of the $425-$435 million guidance that we provided previously. This puts us in a great position to achieve our 2025 goals of positive and sustainable quarterly cash flow and EPS in the second half of the year. Longer term, earlier in the year, we provided guidance for revenue with a three-year CAGR of 20%, so north of $750 million by 2027.

And also reiterated our belief of getting to $1 billion in global revenue by 2029. We also provided a CAGR for OpEx, not including stock-based compensation, of 5%, closer to $450 million by 2027. So with positive quarterly cash flow this year, annual positive cash flow generation next year, and the cash flow that we will generate in 2027 when revenue is greater than the OpEx by more than $300 million, we expect to have more than $600 million of cash on hand at that time.

John Stonehouse: Allowing us to reduce our debt and our cost of capital and reinforcing our position that we are capital markets independent. Operator, we can open it up for Q&A.

Q&A Session

Operator: We will now begin the question and answer session. If you’re using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Tazeen Ahmad with Bank of America. Please go ahead.

Tazeen Ahmad: Thanks, guys. Good morning. Thanks for all of the color. I wanted to start maybe with a question on Netherton. You’re expecting data from patients later this year. Can you potentially narrow it down when this year those patients are expected to come in? And then secondly, can you talk about what would be positive data in your view? Do you think the amount of patients that you’ve enrolled would allow for a sense of efficacy in a clinical setting beyond the biomarker data that you talked about releasing? And if that data is encouraging, what do you think the path forward could be for Netherton just given that there’s nothing approved in patients right now? And it is an area of unmet need. Thanks.

John Stonehouse: Helen, you wanna take this?

Helen Thackray: Yeah. Thanks, Tazeen. So first of all, we will have data this year, and that’s the guidance we’re giving at the moment. In terms of what we expect to see, so how many patients? This one thing about this disease as a genetically driven disease is that we really only need to see data in a very small number of patients to have confidence that we’re hitting the mechanism. We’re looking to make a functional replacement of the missing protein, and we may see that with single-digit patients. In terms of what we’re looking for then, we’re looking at the first of all, as I said, the activity in the skin. But with that specifically, we’re looking for the drug’s effect on KLK5 activity in the skin, the suppression of KLK5 activity.

What that will lead to then is healing in the skin, and so we’re looking for a graded observation of the skin, and is it actually demonstrating signs of healing? So that way, we would be able to see later this year possibly and early next year as well for healing of the skin. In terms of the development path forward, the data we’ll get this year is very important to us because that few patients’ worth of data showing activity in the skin that the drug is getting to the skin and having its activity we would then expect to see some degree of healing following from there, and we would move pretty quickly into assessing that in the next study. This is an ultra-rare population with a serious outcome and a pretty clear response that we’re looking for.

So it could be a very short path to pivotal studies. As soon as we have a dose, which I’d expect to have at some point next year, then we’ll move into a pivotal program that would be the registration program. And it probably is a single pivotal trial program supported by the data that we collect this year and next.

John Stonehouse: And, Helen, the profile we’re shooting for is a functional cure. So the magnitude of effect will drive what the pivotal program looks like and the number of patients necessary. So the bigger the effect, the faster we probably can go and the fewer patients we need. Is that a fair assessment?

Helen Thackray: Yes. Great.

Tazeen Ahmad: Okay. Thank you.

Operator: The next question comes from Jessica Fye with JPMorgan. Please go ahead.

Jessica Fye: Hey, guys. Good morning. Thanks for taking my questions. One on Orladeo and one just following up on the prior question for Netherton. First on Orladeo, where are you tracking towards for the proportion of paid patients overall and within Medicare specifically? And what is the current Orladeo guidance embed there? And then second, how quickly could we expect to see this mechanism result in skin healing in Netherton, just thinking about the mechanism and the underlying disease pathology.

John Stonehouse: Charlie?

Charlie Gayer: I’ll take the Orladeo question. Thanks, Jess. As far as the proportion of paid patients, we ended last year at 73.5% paid across our whole patient base. I can’t give you an exact number yet because we’re literally right in the middle of the reauthorization season. So what that means is a lot of our patients who were previously on long-term free products or even paid products have moved temporarily into quick start products. So any number that I would give you now would not be accurate. I have said though before that with a swing back in Medicare paid patients, that could push us toward 80%. And so by the end of the quarter, we’ll be able to see where we are. So I would expect to report that in the next earnings.

We do think because of all of the reauthorization season, revenue for the first quarter is still gonna be flat to slightly down versus Q4 just because of all the free product that we have to give away as well as the impact to gross to net from the co-payment assistance that we provide to commercial patients.

Anthony Doyle: There is also a little bit of a headwind as it relates to foreign exchange. So included in Charlie’s increased guidance, there is a headwind of probably around $5 million give or take in the EU. So it makes the number that we’re achieving in terms of the increased guidance for here in the US all the more impressive.

John Stonehouse: Hey, Charlie. Our assumption prior to getting into the year was that it would that Medicare thing would happen over a couple of years, two, three-year period. That’s not what you’re seeing. The pace of it is significantly faster, and that’s the reason for the guidance.

Charlie Gayer: That’s correct. We assumed that we would get back to a high paid rate in Medicare by 2027. It’s looking like we’ll get much more of that back this year, but we won’t know the final results until after the quarter. Helen, you wanna take the Netherton?

Helen Thackray: Yep. So, Jess, on your question about Netherton syndrome and how quickly we’d expect to see healing in the skin, the short answer is we don’t know. But what we do know is that we’ll see the activity on target activity first, and it could be just a very few months after that that we’re seeing healing of the skin. We’ll be looking at four weeks, eight weeks, twelve weeks, etcetera. And once we see that on-target activity, the biomarker, we’ll know that we’re at the dose, and then we’ll just continue treating longer term and following for that those first few months to assess for healing of the skin.

John Stonehouse: And, Helen, can you talk about skin turnover? And it’s not like it’s years to see the effect that the…

Helen Thackray: Yeah. So talk a little bit about that. Yeah. So skin turnover is actually pretty fast. In normal skin, you expect the skin layers to turn over about every two weeks or so. And so with this drug, when I talk about seeing activity on target, that KLK5 activity, then we would expect that activity to be there for the duration of that skin layer being present. So it’s gonna be two weeks and longer that we’d expect to see the effect of the drug for each dose, and then we’re looking to see what happens with that skin time. So that’s why I look back to it could be very few months, four weeks, eight weeks, twelve weeks follow-up.

John Stonehouse: And given what we see in terms of potency and affinity of this molecule, the treatment effect that we’re expecting is pretty significant, and it should come pretty quickly. In general, in terms of the results that we see from this early study.

Helen Thackray: Yes. We’re looking for a pretty big effect here. And this is a very potent drug. It is very sticky. That’s a high affinity. And we’re looking for a really obvious effect. So that’s why we think it’s something that we might see pretty quickly.

John Stonehouse: And is it safe to say that that derisking event is drug getting to the skin in patients?

Helen Thackray: Yes.

John Stonehouse: Okay. Thanks. And was there a follow-up, Miss Fye?

Jessica Fye: That’s it. Thank you.

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

Stacy Ku: Okay. Well, thanks so much for taking our questions, and congratulations on the results. So first, quick follow-up on Netherton’s. We might have missed this. Have you talked about specifically when you plan on kind of dosing other patients? So just some specific timing on that. And then again, on the Orladeo, on the survey results, are you kind of finding that the attack-free rates are similar to other prophylaxis therapies? Kind of curious your takeaway as it relates to kind of the patients that are well-controlled on oral versus patients that are well-controlled on injectable therapies. And then the last question is kind of another follow-up on the guidance. What exactly are you seeing kind of in the last month and a half that kind of gives you conviction in a new updated guidance?

Is it kind of the charities? Is it really just that Medicare kind of update and remind us kind of every one percent that you’re converting, is that five million in sales? Thank you so much.

Helen Thackray: So Netherton syndrome, in terms of when we’d be dosing. So we haven’t said exact timing. However, what I can say is we are dosing in healthy volunteers now. And we’re moving towards dosing patients from Netherton syndrome soon. So it will be sometime around the middle of the year, third quarter. That’s what would give us then the opportunity to assess the activity of the skin and be looking at healing by the end of the year.

Charlie Gayer: And then Stacy, as far as the attack-free or sorry, the attack rate reduction that we’re seeing in the real world, yeah, I think we see the patients on Orladeo are getting to really low rates of attacks. If they don’t, they move on. And so, you know, what we’ve said before is no drug is perfect for every patient. But this is related to our really strong retention rate for Orladeo patients of 60% in a year. Patients are staying on because they’re doing really well. That’s what you’ll see in the posters that we present at Quad AI this coming weekend that patients, whether they started at a baseline attack rate that was really high over five attacks a month or whether they started at zero attacks at baseline, they’re doing really well over time.

So we think they’re getting a very competitive efficacy rate. And the things that give us confidence so far in the year, the number one thing is the Medicare patients moving to paid therapy. We think that this is really because the IRA is making it more affordable, probably makes it more affordable for the charities, but what we’re just seeing is patients are getting approved by their plans. They’re able to afford their co-payments, and so they’re staying on paid therapy. So that gives us confidence. And then the continued demand that we’re seeing in the first half of the first quarter is very consistent to what we saw last year. And so those two things together give us confidence to raise guidance at this point.

John Stonehouse: Hey, Charlie. Just one more piece on the control. With the real-world data that we see, do you really see it when you’re controlled on Orladeo, is there a difference in the control versus the therapies on the market or the ones that are coming in the data that we see in the future?

Charlie Gayer: Not based on what we’ve seen in our market research. So the patients, very few patients across the board regardless of what product you’re on, are truly attack-free. The goal for patients is to have very infrequent attacks, have those attacks be very manageable, so they tend to be more mild on prophylaxis. That’s what we’re seeing on Orladeo. That’s what we’re seeing on injectable products. And we think it’s consistent to what we’ll see with future products that reach the market as well.

John Stonehouse: And does physicians see that data or they have that experience with their own patients? That’s what’s driving that excitement about prescribing more of it in the future.

Charlie Gayer: Yeah. That’s what’s exactly. So not only are they saying physicians telling us as of December, that they will prescribe to 17% more of their patients, they expect over 60% of those prescriptions to come from injectable prophylaxis switches. It’s because they have confidence in what they’re seeing with Orladeo. So, Stacy, I think the bottom line is there’s control with Orladeo, and any incremental anybody that’s saying that there’s incremental control with a future product or current product really isn’t true. It either works or it doesn’t work.

Stacy Ku: Okay. Understood. Thank you so much.

Anthony Doyle: You’re welcome.

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

Brian Abrahams: Hey. Good morning. Thanks for taking my questions, and congrats on all the progress. Two from me. I guess first on the pediatric study, can you talk about how tolerability compared to the adult experience? And maybe just remind us expectations for the regulatory bar in the US as you prepare the NDA filing there, and then of what you’re planning for for international approvals and filings. And then secondly, I guess, speaking of international, for Orladeo commercially in fourth quarter, it looks like you saw an uptick in the contribution from Europe. I know that can be variable and sometimes higher in fourth quarter. And of course, we’ll need to think about the FX headwind for next year. But where do you see that demand outside the US tracking in 2025? Thanks.

Helen Thackray: So on pediatrics, this is the new formulation for pediatrics. It’s oral granules. They are what we know from the study is that those are delivering well. Patients are able to use them easily. We’re seeing good exposure levels, which means that they’re compliant with receiving them, and we’re seeing very good tolerability with the oral granules as well. It’s very similar to what we’d expect in terms of efficacy and safety for the adults and for the adolescents. And so this is a formulation that we’re very pleased with how it’s doing in pediatric patients. In terms of the regulatory bar for approval, this is actually a pediatric extrapolation is what it’s called. It means we’re matching safety and exposure for pediatric population to extend labeling from adults and adolescents down to the younger children.

That means the primary outcomes are safety and pharmacokinetics. We have that data, and we’ve already discussed that with regulators. In the US, this is a fairly straightforward approach with something called a written request with FDA. In Europe, it’s under a pediatric investigative plan with EMA. Both of those are predefined the path to approval in the US and Europe, and we’re on track to submit the data that meets those requirements. So we think we’re in a really great place with this dataset and looking forward to bringing this to children.

John Stonehouse: And we’ve had…

Anthony Doyle: We’ve had conversations with the Japanese authorities as well.

John Stonehouse: And so we have agreement on what the path forward for that is as well. So we expect that filings will occur in multiple countries, either all this year or into the early part of next year. And then maybe as far as ex-US demand, I’ll cover the demand, then Anthony can talk about kind of the cadence of the revenue. What we’re seeing in Europe, in Canada, and Japan is the same type of growing confidence in Orladeo that we’re seeing in the US. Different markets are at a different place depending on where the launch was. So, for example, we’re seeing really transformative confidence with Orladeo in the United Kingdom, which has been on the market for several years now. We’re seeing great early confidence in Italy that just launched last year as examples.

But what they’re seeing is Orladeo is a really effective drug, and we’re also very excited in Europe that countries that historically have used more androgen steroids are going away from that. And, you know, patients are being switched over. New patients are not being prescribed androgens anymore. And so I think we’re still seeing a transformation of how prophylaxis is understood around the world and Orladeo is playing a big part of that.

Anthony Doyle: Specifically, as it relates to Q4, yeah. So the percentage for Q4 ex-US was higher than the total for the year. So 13.9% versus, what, 11% ish for full year. Some of the drivers are, yeah, Europe. It helps in that regard. But also some of the Q4 dynamics distributors that we have, whether it’s, you know, in Latin America, whether it’s in Eastern Europe, whether it’s in the Middle East, some of their annual distribution shipments go out in, like, Q4 time period, so that can be a small driver. The other one is we renegotiated and kind of refocused on the Japan side of the house in the year, and we were able to renegotiate a revised term around flipping the economics for performance over a certain number. We achieved that number in Q4 and were able to get a higher share, therefore, the licensing revenue for that territory.

In terms of how that plays out into 2025, listen, for Q1, we’ll probably get to the point where, you know, flat to lower on the total revenue for the rest of the year, the same dynamic would play out, including this Q4 dynamic that I just described. In terms of the percentage ex-US compared to the total for Orladeo. This year might be a little bit different. We’d normally say that you’d got about a percentage increase or uptick on your way to that 20%, with the significant increase that we’re seeing here in the US. That might be slightly deflated, but that has nothing to do with the continued growth that we would expect to see ex-US. It’s just the counterpoint of the significant strength that we’ll see on the US side.

Brian Abrahams: That’s super helpful. Thanks so much.

John Stonehouse: Hey, Brian. Just one more. At best of the tolerability, the retention rate in the pediatric study, I can’t remember the exact numbers, but it was pretty high.

Helen Thackray: So it was twenty-five patients out of twenty-nine who stayed on drug.

John Stonehouse: Okay. As the most are also using that formulation and having the effect that they… A lot of times that can reflect some of the tolerability, Brian.

Brian Abrahams: Got it. That’s really helpful. Thank you.

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

Gena Wang: Thank you for taking my questions. I have one also regarding Orladeo. So maybe, like, you did mention the Medicare patient the benefit from the low co-pay. Can you share with us what percentage of patient or Medicare patients? And I assume those Medicare patients in 2024 or Q4 2024 paid percentage is 73.5%, and you are expecting this will go up, right? And the second question regarding the Netherton syndrome, and you did mention that it will start with healthy volunteer and then switch to patient. So maybe can you give us a little bit more color regarding what kind of how many dose escalation you would test in a healthy volunteer and what KLK5 activity you’ll be looking for to switch to patient? And then can you give us the benchmark and what are you looking for regarding the KLK5 activity?

Charlie Gayer: Hey, Gena. I’ll take the question about Medicare. Medicare is about 20% of the patients on Orladeo. Are covered by Medicare. The 73.5% paid rate was across our entire book of business. In Medicare, it was actually lower. So we finished last year at about a 55, 56% paid rate. Historically, the Medicare plans tend to say yes, that they will cover Orladeo at 80% or more. The problem has just been the affordability. And so what we’re seeing in Q1 is the plans are still saying yes. The affordability seems to be there for the patients, and so they’re able to move to paid therapy. And this is a big part getting that proportion of our Medicare patients over to paid therapy. Is a big part of our path to 85% paid over the long term.

Which is represents by 2029, that that will represent about $100 million in increased revenue towards our $800 million future view of revenue in the US. So what we’re seeing is this year, that may be accelerating a bit, and we’ll know the final answer after the reauthorization season is complete. And, Helen, maybe just describe the design of going from SAD to MAD to then patients and the differences between what you can see in healthies versus what you can see in patients.

Helen Thackray: Yeah. So Netherton syndrome, Gena, that we are in a phase one study. That phase one is in healthy volunteers and will include patients. In healthy volunteers, we’re doing single ascending dose. We will proceed also with multiple ascending dose. And what we’re looking for there is simple safety and pharmacokinetics exposure levels so that we can identify a dose that is likely to have and goes to patients from there. We would expect to include patients in the study while continuing with the dose escalation and healthy volunteers serious and dependent on that. And there’s an interesting aspect of this disease, which is that KLK5 activity is normal and healthy volunteer which means we can’t really look for activity there, and we want to get to patients as quickly as possible.

That’s why we built the patient portion straight into the phase one study. That’s why we’re dose escalating quickly and help the volunteers to get to the likely effective dose range, and then we’re moving to patients within that study so that we can look at the activity of the drug in the skin where KLK5 activity is abnormal and look at whether the drug is inhibiting KLK5 and activity at the dose levels there. And so we’ll be looking at a range of doses that we’re expecting to be in an effective range in patients, and we’ll be looking for that suppression of KLK5 activity to give us confidence that the drug’s having the effect and to extend dose then in those patients just asked for the healing we were talking about earlier in the call.

Gena Wang: What percentage of the suppression you were thinking KLK5 suppression that will lead to the clinical benefit?

Helen Thackray: Yeah. So short answer, that’s not known. But what we’re looking for is this drug is very potent. And as we’re talking about, it has this stickiness, it’s high affinity. What we’re looking for is suppression. So that’s nearly complete suppression of KLK5. And as we learn more about what’s, you know, whether that’s actually required for healing activity, we’ll learn more later on the program. But in the near term, we’re looking for complete suppression of KLK5.

Gena Wang: Okay. Thank you.

Operator: The next question comes from John Walden with Citizens JMP. Please go ahead.

John Walden: Hey, good morning. Thanks for taking the questions. Just a couple for me. Charlie, wondering if you could talk a little bit about the historical reauthorization rates and what you guys have seen prior first quarters and how it’s tracking so far this year. And then for the pediatric opportunity, wondering if you guys have thrown that in your market model. What we should think about that opportunity if that’s included in kind of your projections that you have on slide twelve in your deck.

Charlie Gayer: Sure. Thanks, John. As far as the reauthorization, what we see is roughly half of our patients across all payers go through reauthorization in the first quarter. And it’s really more than just the first quarter. It tends to drift into the early part of the second quarter. That’s what we saw last year. And so when I said earlier, we’re right in the middle of it. It’s because we are we’re right in the middle of it now. The last is a talked about previously, the last few years, our team has done a tremendous amount of work to be ready for this reauthorization every year. We think we get better at it based on what we learned from the previous year. And so I’m, you know, I’m pleased with what we see so far, but we won’t know the final result until we get through everything.

As far as the PEASE opportunity, it is not baked into our billion-dollar peak global revenue forecast. At some point or particularly, obviously, when we get the approval, we’ll both probably build that in. But what we have said is in the United States, there are about 500 patients that we believe are under age twelve and diagnosed with HAE. Historically, we’ve thought maybe 40% of them, 200 or so, were appropriate for prophylaxis therapy. Based on what Helen was describing earlier, and the young age that we saw the patients in our trial, the young age when they first had their attacks, we’re rethinking this. We think that there may be more of an opportunity within that under age twelve population. And, you know, again, we think Orladeo as an oral drug is gonna be transformative for these kids.

So we expect a lot of changes in how kids with HAE are treated in the future.

John Stonehouse: And Charlie, is it safe to say that even with the increase in guidance and the tailwind that we’re getting with free drug to pay drug that the first quarter dynamics still exist and, you know, there’s still free drug that we’re giving to people going through reauthorization, and there’s still, as you said before, gross to net issue. So flat to slightly down.

Charlie Gayer: Flat to slightly down for Q1 just because of all of that. Regardless of how well we do, that is a dynamic that we cannot defeat.

John Walden: And, Charlie, maybe just one quick follow-up. How do you categorize pediatric patients as appropriate for prophylactic therapy?

Charlie Gayer: Well, that’s John, I think that it’s a great question, and I think that’s what we’re gonna see changing over time. I think historically, HAE treaters have not seen as many kids with attacks because they really didn’t have options for treating them. Now they have some injectable options, which is great. But what it led to is families just coping. You know, physicians coping with this and treating kids acutely, but that puts a huge burden on the kids and the families. And so with an available oral therapy, we think it’s gonna have physicians, parents, obviously, the kids rethink how to treat HAE. And it could create an opportunity where kids grow up rarely having attacks. Which could really change the trajectory of their whole childhood, their whole life, their whole relationship with HAE. So we’re really excited about working with the community to make that happen for kids.

John Stonehouse: Is it think too when we saw this data, I think many of us were surprised at how sick and how early kids got sick with this disease. That changes our view of the market a bit. That there are younger kids that really need this drug, and so that could increase the…

John Walden: Thanks for the color, guys.

Operator: Again, if you have a question, please press star then one. The next question comes from Lisa Bayko with Evercore ISI. Please go ahead.

Sima: Hi. This is Sima on for Lisa. I have a question on Avoralstat in DME. What’s the target product profile for this drug, and what should we be looking for in patient data to start to validate this target product profile? Thank you.

Charlie Gayer: Charlie, you wanna take that?

Charlie Gayer: Oh, sure. And maybe, you know, Helen can comment on some of this too. The TPP we’re looking at for Avoralstat for patients with DME, physicians are looking for other options. They’re looking for other therapies because over 50% or close to 50% of patients don’t respond fully to VEGF inhibitors. So what we’re looking for is an infrequent injection that helps prevent leakage. So this could be every three months. It could be every six months. Which could greatly reduce the burden of injections and improve efficacy for many patients. Was there a follow-up?

Sima: Just wanted to can you speak about the phase one what’s the design, what should we look for? And then moving into patients.

John Stonehouse: We’re going directly into patients. Is that how you enter it?

Helen Thackray: Described that? Yeah. So this is a program that will actually go straight to patients first. So phase one will be in patients, and it’ll be using the injection, suprachoroidal injection and Avoralstat in the suspension in order to observe safety in patients, tolerability locally in the eye, but also with that injection to observe in individual patients. Right from the first patient we dosed to see if there is a change in the edema, in the eye, and then longer term, a change in visual acuity. So the first study will be exploratory looking at using that injection and then assessing just one injection assessing over time. Again, sort of over four weeks, eight weeks, twelve weeks, sixteen weeks with this to observe for the edema in the eye and observe for any changes in the edema.

Once we have confidence that we’ve got a dose, we’re seeing the changes that we want to see, then we would move to a randomized program, probably randomized phase two to assess this in a controlled manner for the pivotal program. Planning.

John Stonehouse: Helen, is it fair to say that this is an unusual setting where a SAD and MAD study could tell you a lot? Because you’re in patients?

Helen Thackray: Yes. Right. So with Avoralstat, we know we already know a lot about the systemic safety of the drug because we tested it in a phase three with our oral program some time ago. Now we’re at a point where we’re just looking at the from a safety perspective, the local tolerability. And because this drug is potent and the suspension has a depot-like effect. We think one dose could be sufficient to see that effect in each patient. That puts us in a position to have, you know, first, second, third patients, and the very first patients we put on trials, the ones who we observe with that one dose, observe over a number of months to see they do.

Sima: That’s very helpful. Thank you.

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

Serge Belanger: Hi. Good morning. A couple of questions for Charlie on Orladeo. First one, can you tell us how many patients were on drugs at year-end and how that number compares to year-end 2023? And then secondly, regarding the positive impacts you’ve seen from the IRA so far, you’ve highlighted the expected improvements in paid rates, but do you also expect it could help improve volumes in the form of new patient ads? Thanks.

Charlie Gayer: Thanks, Serge. I haven’t commented specifically on the number of patients. What we have said, as you know, before is that in that path to a billion dollars, the path to $800 million in the US, we need to average 200 patients through 2029. We were well above that in 2023. We said in the early years, we would expect to be above that. We were well above that number again in 2024. So we are well on our path to what we laid out in that $800 million to the US. And then the demand that I just described today, there’s no sign that the opportunity is slowing down or running out in any way. As far as I think your the other part of your question was on the Medicare paid rate and whether that could have a positive impact in prescribing.

I think it’s a possibility. It’s a good question. Don’t think we’ve seen that yet, but for patients and for physicians, getting to paid therapy gives them confidence. Knowing that their payer will pay for this drug gives them more confidence about prescribing. And we’ve known that since before the launch. We’ve always done everything that we can to remove that paid rate paid therapy insurance approval, remove that as a fear for patients and doctors, but it’s always and so seeing more patients get to paid therapy, I think, generally gives confidence and can’t help but have a positive impact over time.

John Stonehouse: And I think something that’s really important that maybe isn’t obvious is the machinery that Charlie has built and the team that Charlie has built to make that go smoothly. Is a real competitive advantage, I think, and in terms of just it’s taken stress away from doctor I mean, Charlie and I heard from a doctor recently about how our Empower patient services is like a model for other, you know, drugs even outside of HAE and that took time to build. That took investment, and you know, I think his team is really good at it.

Charlie Gayer: Yeah. No. I agree. And a shout out to the team because, again, they are right in the middle of what we call the blizzard season. A, because it’s cold and, b, because there’s a lot of work to do. So they’re working super hard to help as many patients as possible.

Serge Belanger: Okay. Was there a follow-up?

Serge Belanger: Nope. All set. Thanks.

Operator: Your final question comes from Maury Raycroft with Jefferies. Please go ahead.

Maury Raycroft: Hi. Good morning. Congrats on the progress and thanks for taking my questions. Talked about Netherton being underdiagnosed. What is BioCryst doing or planning to do to help find these patients and get them on the radar for your clinical study program and to help set up commercial opportunity?

Charlie Gayer: Shirley, you wanna start how we’re thinking about how we identify patients what we plan to put in place.

Charlie Gayer: Yeah. And, Maury, Helen alluded some of this in her comments, is bamboo hair is a distinctive feature of that that patients with Netherton have. There is no diagnosis code for but most of these patients do have this bamboo hair. We did a claim study that helped us identify about 1,600 patients with this bamboo hair feature. And so part of our plan is to expand on that. And as we’re getting into the clinical trials here, make sure we’re working to find more sites where these patients are treated. There’s some a small handful of real expert centers at this point. But most of these patients, as Helen was saying, are probably lost a little bit in the broader dermatology practice potentially misdiagnosed with general ichthyosis. And so as we move into this next phase of trials, we expect to start doing more to educate the market about the need for this and the differential diagnosis for these patients.

John Stonehouse: And there’s some great playbooks on rare diseases where there was no drug and no diagnostic code. And how did you find the patients. And I think one of the beauties here is the genetic test. And what we do with that genetic test and how do we implement that playbook to start. And when you have a therapy that has you know, we’re hoping for a real significant treatment effect. Those two things in combination, you start to really be able to find patients. So we’ll I don’t think we have to recreate anything here. There are playbooks for this stuff that we can follow that will help us build that over time.

Helen Thackray: And I’ll add let’s just one piece. One part of that playbook is to engage very closely with the patient community, and we’ve started doing that with the Netherton community. And the patient voice in all of this is in rare diseases becomes really important. And so we’ll do what we can to work with them and our early interactions with them have been very positive.

Maury Raycroft: Got it. That’s helpful. And maybe one quick second question. Just for the Orladeo pediatric formulation, do you plan to price that differently than the adult version?

Charlie Gayer: We haven’t made any final decisions on that, but in most markets, probably not. It would probably be comparable, but that’ll be a decision that we make as we get closer to launch.

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

John Stonehouse: Thanks, Maury.

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

John Stonehouse: Thank you. So as I said at the beginning, 2024 was one of the best years in the company’s history in terms of performance and execution. And the evidence for that is strong continued growth in Orladeo on its path to a billion dollars. Programs now advancing and getting to the point where they’re going into the clinic. And then our path to profitability. So there’s no letting up going into this year. We’ve got a lot of momentum, we’re off to a strong start as you can see by the raising of our guidance, and we’re really excited to continue to update you over the course of this year.

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