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Biocryst Pharmaceuticals Inc (BCRX) Q1 2019 Earnings Call Transcript

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Biocryst Pharmaceuticals Inc (NASDAQ: BCRX)
Q1 2019 Earnings Call
May. 8, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen and welcome to the BioCryst First Quarter 2019 Earnings Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder this conference call is being recorded.

I would now like to introduce your host for today's conference Mr. John Bluth, Senior Vice President of Investor Relations and Corporate Communications. Sir, you may begin.

John Bluth -- Senior Vice President of Investor Relations and Corporate Communications

Thank you, Ashley. Good morning and welcome to BioCryst first quarter 2019 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; Chief Medical Officer, Dr. Bill Sheridan; CFO, Tom Staab; and Chief Commercial Officer, Lynne Powell. Following our remarks, we'll answer your questions.

Before we begin, I want to direct your attention to slide 2 which discusses our use of forward-looking statements and potential risk factors regarding an investment in BioCryst. As detailed on the slide, 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.

I'd now like to turn the call over to Jon Stonehouse.

Jon P. Stonehouse -- President and Chief Executive Officer

Thank you, John and thanks to all of you for joining us this morning. 2019 continues to be an exciting year of progress for BioCryst and we know you're looking forward to seeing the 24-week safety and efficacy results from the APeX-2 study of oral BCX7353 for the prevention of hereditary angioedema attacks. We are too, and we remain very confident that we will report these results this quarter.

We're also on track to file our new drug application for the United States by the end of the year and our marketing authorization application for Europe in the first quarter of 2020. We meet regularly with HAE patients as we did a couple of weeks ago and that anticipation and demand we hear from them for an oral therapy is consistent and resounding.

Many of these patients want the opportunity to live a normal life without the burden and discomfort of injections and infusions. As a Company we're working every day to deliver this important new treatment option to them, because we know they're waiting. This focus on driving our programs forward also extends to our other oral treatment programs, for acute HAE, complement mediated diseases and FOP. Following the successful completion of our ZENITH-1 trial of 7353 for the acute treatment of HAE attacks in the first quarter, we are in the process of preparing for and conducting our discussions on the Phase 3 study with regulators and expect to commence the Phase 3 ZENITH-2 trial this summer.

On our earnings call last quarter we announced that we were moving BCX9930, an oral Factor D inhibitor for complement mediated diseases into a Phase 1 trial. That trial is on track to begin this quarter and we expect to have the results at the end of the year. We hope to get important PK and PD data from healthy subjects that will be very informative in guiding us through the remainder of the program. Our oral L2 inhibitor for FOP is also on schedule to move into Phase 1 clinical trials in the second half of this year.

When you add it all up, we see an attractive pipeline with a number of important milestones that we believe have potential to create significant value for patients and shareholders. Later on top of that, our first launch of a highly differentiated product in 7353 into the marketplace and we see a very different and exciting BioCryst.

Even though, we believe the oral profile of 7353 will lead to a high number of HAE patients wanting to try it, we are taking nothing for granted as we prepared to commercialize 7353. As we build out our team in key areas, our company profiles attracting exceptional candidates with proven rare disease experience and we have added some extraordinary talent to the Company across medical affairs, market access, marketing, clinical and regulatory. Positive data from APeX-2 will only strengthen this and will be a catalyst for us to continue building out the team in anticipation of a US product launch next year.

Now I'd like to turn the call over to Bill who will walk us through our plan for analyzing and reporting APeX-2 results.

William P. Sheridan -- Senior Vice President and Chief Medical Officer

Thank you, Jon. As we await the data readout from APeX-2 this quarter, we thought it would be helpful to review with you how we will approach the data analysis around the primary endpoint and the secondary endpoints in this trial. APeX-2 is a randomized double-blind placebo-controlled three arm trial testing two dose levels of orally administered once-daily BCX7353. 110 milligrams and 150 milligrams for prevention of angioedema attacks.

121 patients with type 1 and type 2 HAE were randomized from centers in the United States, Canada and Europe. As a reminder, the trial enrolled very quickly. In fact it over-enrolled and with 121 subjects is powered at 99% to detect a 50% reduction in attack rate versus placebo.

To qualify for the trial, patients were required to have two investigator-confirmed HAE attacks during the running period of between 14 and 56 days from the screening visit by a minimum rate of 1 per 28 days. In previous trials, the main baseline attack rate was always much higher than the minimum requirement. We expect this will also be the case in APeX-2 and that the main baseline attack rate should be in the range of 2 to 4 per 28 days. The primary efficacy endpoint of APeX-2 is the rate of investigator-confirmed angioedema attacks over 24 weeks of study drug administration.

So the analysis will compare the on-study attack rates of patients receiving 7353 at each dose level, the on-study attack rate for patients receiving placebo. As specified in the protocol and agreed with the regulators, analysis will use a well-established statistical approach called the (inaudible) step up procedure. This controls familywise type 1 error associated with multiplicity of study arms and does not require a specification of order of testing of the doses. In this procedure each of the two dose levels of 7353 is tested against placebo for the primary endpoint.

Statistical significance is met to both arms if both p-values are less than 0.05. If the largest p-value is more than 0.05, then in the other arm statistical significance is declared if its p-value is less than 0.025. In addition, hierarchical testing is used to control the type 1 error rate for multiple endpoints. Testing may only proceed to the secondary endpoints if statistical significance is met for at least one dose for the primary endpoint. The secondary endpoints for the 24-week analysis for APeX-2 are in hierarchical order of testing, change from baseline in the angioedema quality of life score at week 24 proportion of days at angioedema symptom through 24 weeks rate of investigator-confirmed HAE attacks during dosing of the effective treatment period beginning on day eight through 24 weeks.

The secondary endpoints reach those level that meet the primary endpoint are tested in the order I just mentioned. Statistical significance at each step allows testing of the next secondary endpoint. If a single dose proceed to the next level in the hierarchy, statistical significance at the next level in the hierarchy is declared if p is less than 0.025. In the absence of statistical significance subsequent endpoints for that dose level are not tested. Following completion of the 24-week blinded placebo-controlled study period in APeX-2, subjects continuing an ongoing extension phase through 48 weeks. Patients initially randomized a placebo or rerandomized to receive one of the two 7353 doses in the extension phase. And patients initially randomized 7353 continue on the same dose. Subjects in APeX-2 to complete 48 weeks of 7353 will contribute to the NDA long-term safety database of 100 patients. Our APeX-S long-term safety study also contributes to this total. Both of these studies continued to progress well. We are -- and we are on target for an NDA filing by the end of the year and an MAA filing in the first quarter of 2020.

As Jon mentioned we are also on schedule to begin a Phase 3 study with our acute program this summer. And I would note that data from our Phase 2 ZENITH-1 trial will be presented at the upcoming C1 inhibitor workshop in Budapest in May and also at the EAACI Congress in Lisbon in June.

Now I'd like to turn the call over to Tom.

Thomas R. Staab -- Senior Vice President and Chief Financial Officer

Thank you, Bill. Our detailed first quarter 2019 financial results can be found in the press release we issued this morning and are summarized on slide 8. However I'd like to highlight some information to help you assess and understand our future operations and financial statements for the remainder of 2019. From a financial perspective, the first quarter was relatively quiet and uneventful. With the notable exception of extending our cash runway and enhancing our financial flexibility by closing a $100 million secured credit facility in February.

This closing represented an enhancement of an existing credit facility and thereby provided us $20 million of immediate additional non-dilutive capital and the ability to draw another $50 million of milestone based non-dilutive capital at our option. As a reminder $30 million of this additional $50 million is available following positive APeX-2 data which we consider sufficient to file a new drug application. This modified credit facility provides us optionality and flexibility from a liquidity standpoint.

In regards to cash investments, we ended the first quarter of 2019 with $121.6 million. We have a strong cash position that provides the resources to fund our development programs and continue our commercial preparation into 2020. Importantly, our cash runway extends beyond our APeX-2 readout later this quarter. As well as our NDA filing and Phase 1 readout for BCX9930 which are both expected to occur in the fourth quarter.

As you can see on slide 8, revenue for the first quarter of 2019 increased $1.9 million to $5.9 million. This increase was largely due to the recognition of $1.7 million of peramivir product sales to one of our collaborative partners. These transactions are based on inventory management by our partners and each partner's overall forecasted demand for the underlying peramivir product. Importantly these transactions do not recur routinely and are difficult to predict in regard to timing and magnitude. Accordingly, you should not assume these product sales will recur in future 2019 quarters.

Regarding operating guidance as noted on slide 9, we continue to expect net operating cash used to be in the range of $105 million to $130 million and 2019 operating expenses to be in the range of $120 million to $145 million. As mentioned in our fourth quarter 2018 results conference call in March of this year, we continue to expect our R&D and G&A expenses to increase from 2018 levels due to the continued progression of all of our programs.

Consistent with prior quarters, the Company's operating expense range excludes equity-based compensation expense due to the difficulty in reliably projecting this expense as it is impacted by the volatility and price of the Company's stock as well as by the vesting of the Company's outstanding performance based stock options. Lastly with the modification of our secured credit facility you should expect higher interest expense for 2019 because of higher debt balances than those in 2018. We have had an excellent start to 2019 and look forward to sharing the 24-week safety and efficacy results from APeX-2 with you later this quarter.

That concludes our prepared remarks and we'll now take your questions. Ashley?

Questions and Answers:

Operator

Thank you. (Operator Instructions) And our first question comes from the line of Brian Abrahams with RBC Capital Markets. Your line is now open.

Bert -- RBC Capital Markets -- Analyst

Hi, this is Bert (ph) on for Brian. Thanks for taking our question. Can you give us any further clarity on when we might see the APeX-2 data in second quarter? And then also you've previously cited 50% as the bar for tax reduction. How does your market research prior data, PKPD mapping and early observations all shaped your expectations for the readout and or the threshold to try and meet. Thank you.

Jon P. Stonehouse -- President and Chief Executive Officer

Sure, Bert. I'll take that. So no we're not given any further granularity on timing other than to say it's coming this quarter, so soon. And then with regard to your question around 50%, I mean the market research is really interesting. The preference for an oral drug is so strong, that you can vary the efficacy up to 85% all the way down to 55% and see small changes in preference share. So, the point we're trying to make is -- there's a just a really really strong demand for an oral drug.

Bert -- RBC Capital Markets -- Analyst

Great. Thank you.

Jon P. Stonehouse -- President and Chief Executive Officer

Welcome.

Operator

Thank you. And our next question comes from the line of Jessica Fye with J.P. Morgan. Your line is now open.

Danielle -- J.P. Morgan -- Analyst

Hi. This is Danielle (ph) for Jessica. Thanks for taking our question. You mentioned in the prepared remarks mean baseline of attacks rates of 24 per 28 days in APeX-2. Is that lower than what was observed in APeX-1? And given what sounds like less sick patients in Phase 3 versus Phase 2. How should we think about the on-treatment placebo response. Thanks.

William P. Sheridan -- Senior Vice President and Chief Medical Officer

Hi. This is Bill. Thanks for the question. This study is 24 weeks long, APeX-1 was four weeks long and the way the statistics work in studies where you're counting events is you have to have a certain number of events to count in order to show a different placebo. So we have six times longer opportunity, even if the attack rate was much lower than the baseline attack rate that I mentioned, there's a very high probability that we'll see more than four events in 24 weeks. So I'm not worried about that at all. It's impossible to handicap the likelihood of placebo response in these studies. It seems to vary a lot depending on the conditions of the type of run in and where the patients came from, what treatment they were on previously and so on. The analysis that matters of course is the on-study attack rate in placebo compared to the on-study attack rate in active. So that's -- that's the way we've structured the study and empowering.

Danielle -- J.P. Morgan -- Analyst

All right. Thanks. And what are some of the end point you're considering for ZENITH-2 that could highlight differentiation of the product in contrast to currently available therapies in the acute setting.

William P. Sheridan -- Senior Vice President and Chief Medical Officer

So, as Jon mentioned we're in the process of meeting with regulators on the design of Phase 3 for the acute program. It's competitive. So there's no advantage for us to advertise what we might or might not be selecting for the primary endpoint of our Phase 3 at the moment. But we're very very pleased with the results of ZENITH-1. We're very happy that it's been accepted for presentation at the biennial C1 inhibitor workshop in Budapest and also at the huge European Allergy meeting, EAACI that's coming up. So there's tons of interest in it. If this is a groundbreaking study in the context of acute treatment at home as early as possible after the onset of symptoms. So we're thrilled with the results.

Jon P. Stonehouse -- President and Chief Executive Officer

Yeah. And I would add, so without going into the detail of what the end points are as we have an great (ph) item with the regulators yet. What matters is, does it go to work quickly and I think that table stakes for any acute treatment, and then how long does it last. And the problem with the short half life drug is that there's data that's come out recently that says that you've got to redose. And so with a really long half life like we have with 7353, we have a high degree of confidence that a single dose will manage an attack. So we think that's a fantastic profile and very competitive.

Danielle -- J.P. Morgan -- Analyst

All right. Thank you very much.

Operator

Thank you. And our next question comes from the line of Liisa Bayko with JMP Securities. Your line is now open.

Liisa Bayko -- JMP Securities -- Analyst

Hi. Thanks for the review of the statistical plan and all that. Can you maybe also just further comment on the adjudication of the attack? How will they be adjudicated to ensure that they are truly attacks versus (inaudible)?

Jon P. Stonehouse -- President and Chief Executive Officer

Sure. Hi, Liisa. So in the Phase 3 trial, APeX-2, the procedure is that the patients everyday records in the electronic diary whether or not they've had an angioedema attack within the last 24 hours. If the answer is yes, then that information is notified automatically to the relevant site that is looking after that patient and the investigator is charged with contacting the patient by telephone within approximately two business days to have a dialogue and make an assessment and record the investigator assessed -- assessment in the case record. That is what gets analyzed as the primary endpoint.

So because of that process, the investigator has the ability to understand the symptoms, the onset, the treatment, whether or not that if it was given, whether or not the treatment had any effect, whether the symptoms were similar or not to the past experiences of the subject and make an assessment that is taking into account the conversation and all of that information.

In our Phase 2 study, we had a panel of experts who were reviewing paper information in batches after the (inaudible) often months after the event, obviously there's no possibility of interacting with the subject at all under those circumstances. So it's more difficult to make nuance judgements when you can't do that.

Liisa Bayko -- JMP Securities -- Analyst

Okay. That's great. That's helpful. Thank you. For the -- can you comment at all on kind of proportion of roll over on to the open label?

Jon P. Stonehouse -- President and Chief Executive Officer

So, you will know that's coming up soon, obviously this quarter when we have the analysis and then we'll be happy to comment on that. I think that what I've previously guided in terms of persistence on study through 24 weeks, these are demanding studies for patients. There are clinic visits, blood samples, ECGs, what have you. So, that's not normal life. And you know an expectation of a 10% to 15% drop out rate under those circumstances is reasonable.

Liisa Bayko -- JMP Securities -- Analyst

Okay. And then, but you're not -- count how many people, despite that rolled over onto the open label?

Jon P. Stonehouse -- President and Chief Executive Officer

Yeah. Because, this study is still ongoing. Until we have the final results, that's a really good time to tell you that information.

William P. Sheridan -- Senior Vice President and Chief Medical Officer

And it will be an interesting statistic.

Jon P. Stonehouse -- President and Chief Executive Officer

Sure.

William P. Sheridan -- Senior Vice President and Chief Medical Officer

Yeah.

Liisa Bayko -- JMP Securities -- Analyst

How important do you secondary endpoint?

Jon P. Stonehouse -- President and Chief Executive Officer

And again...

William P. Sheridan -- Senior Vice President and Chief Medical Officer

How important are the secondary endpoints?

Jon P. Stonehouse -- President and Chief Executive Officer

Well, I think that, we carefully select secondary endpoints in pivotal studies, because you know the objective here is to get information that helps physicians and other healthcare providers assess the drug into the label and help -- help in selection of therapies. So for example we had a very strong signal for improved quality of life in our Phase 2 study, if that could get into the label, because we're successful in a secondary endpoint analysis that would be very important.

Lynne Powell -- Senior Vice President and Chief Commercial Officer

This is Lynne here. Commercially we'd be very excited if the quality of life data could get in the label. What we saw in Phase 2 was incredibly impressive and we're looking that would be replicated in this next study.

Liisa Bayko -- JMP Securities -- Analyst

Okay. Great. Thanks a lot, guys.

Jon P. Stonehouse -- President and Chief Executive Officer

You're welcome.

Operator

And our next question comes from the line of Gena Wang with Barclays. Your line is now open.

Gena Wang -- Barclays -- Analyst

Thank you for taking my questions. I also have one question regarding APeX-2 trial and your data will be more patients at a prior androgen use. Just wondering do you stratify patient based on the androgen used. Any restriction in terms of the duration of usage and a workshop survey.

Jon P. Stonehouse -- President and Chief Executive Officer

Thanks, Gena for the question. So, it will be an interesting analysis as to whether or not the prior experience sanctions is different for subjects entering this study in North America versus Europe. Quite a lot of people in the United States are actually still on androgens (ph).

So, obviously it doesn't appear in the market, because it's a generic drug. But our estimates are that probably between 10% and 20% of patients with HAE in the US are currently on androgens and many, many, many patients have had prior experiences, and because that was all that was available some years ago. So you know, it will be exciting to see whether there's a difference. I think that the other main part of your question was, what are our entry criteria? There are no restrictions on prior therapies. There is a restriction on wash-out period for prior therapies and for androgen it's 28 days, prior to screening.

William P. Sheridan -- Senior Vice President and Chief Medical Officer

And she asked that (ph) around stratification, do we do any?

Jon P. Stonehouse -- President and Chief Executive Officer

No there's no stratification on that basis. The -- our practice consistently in our prophylactic HAE studies has been to stratify on the basis of baseline attack rate. And that's the case here.

Gena Wang -- Barclays -- Analyst

Okay. I see. That's very helpful. Just want to confirm, so the wash out period will be 28 days, right?

Jon P. Stonehouse -- President and Chief Executive Officer

Prior to screening. So as I mentioned in my remarks.

Gena Wang -- Barclays -- Analyst

Prior to screening.

Jon P. Stonehouse -- President and Chief Executive Officer

Yes. Prior to screening. In my remarks, then there's a prospective running that's compulsory every single patient has to go through that and that can vary from two weeks to two months. Then I have to make an appointment to come for randomization. So the actual duration if somebody stopped androgens a month before screening, the actual duration prior to getting our drug could be up to three months, four months, five months, maybe.

Gena Wang -- Barclays -- Analyst

I see. I see. So what's the purpose for running phase at a 40 to 50 -- 56 days, such wide range.

Jon P. Stonehouse -- President and Chief Executive Officer

We chose the minimum period, because we wanted to see some sort of consistency and you had to put some maximum period on it, otherwise you're waiting forever to see what the attack rate is. You need to finish the study. So having, giving people the opportunity to have two attacks within 56 days establishes a minimum of one per 28 days as a rate.

Gena Wang -- Barclays -- Analyst

Okay. Very helpful. Thank you.

Jon P. Stonehouse -- President and Chief Executive Officer

You're welcome.

Operator

Thank you. (Operator Instructions) And our next question comes from the line of Maury Raycroft with Jefferies. Your line is now open.

Maury Raycroft -- Jefferies -- Analyst

Hi. Good morning, everyone and thanks for taking my questions. First question is just on 7353. And as patients continue on drug and crossover the open label extension, what's the longest duration patient have been on the drug.

Jon P. Stonehouse -- President and Chief Executive Officer

Across both studies we have people now at past a year.

Maury Raycroft -- Jefferies -- Analyst

Got it. Okay. And then as far as -- as far as your statistical plan in the powering assumptions for the base or primary endpoint though, can you say what lowest, the attack rate reduction could be. And I guess what your decision tree would be based on something dropping lower than 50%.

Jon P. Stonehouse -- President and Chief Executive Officer

So, turning to your question, we haven't done any formal explorations, obviously it depends on the actual observed standard deviation and the data that we get. Certainly it may well be possible to show a statistical significance for a lower percent reduction target (ph).

William P. Sheridan -- Senior Vice President and Chief Medical Officer

Yeah. And the second half of your question around how low would you go. I mean, I think you know, we're kind of setting ourselves around a 50%, if it was 48%, you know, would we say no. Probably not. But I think that 50%, that's a meaningful reduction in a tax for people. So somewhere in that area.

Maury Raycroft -- Jefferies -- Analyst

Got it. So, it would still be, so even if it's at around 50%, I probably or if it goes below 50%, then you may not move forward at that point or come up with a different...

Jon P. Stonehouse -- President and Chief Executive Officer

Yeah. I reserve the right to see the data and make that decision, because again, we'd like to get the input of KOLs and the patient association and things like that. But I mean, the conversations we've had thus far have been incredibly encouraging. You know, down below 50%, so, from those groups, so that's not our expectation. But your question, you know, I think because it's oral, the efficacy doesn't have to be as high.

Maury Raycroft -- Jefferies -- Analyst

Got it. Okay. And then last question is just based on APeX-J starting and I was wondering if any data from that study would be included in the US filing. I know you've guided to having about 100 patients on each dose for 7353 included in your -- in your NDA filing. So should we assume that you're going to have about 200 patients total? Or do you anticipate more patients than that?

Jon P. Stonehouse -- President and Chief Executive Officer

Well, so just to be clear all of the data from on safety that we currently have at the time we cut the data, later this year will be included in the NDA. So there'll be a minimum of 100 patients worth of data through 48 weeks. APeX-J will be still blinded. So that one contribute to any efficacy analysis of the NDA. That study was negotiated with Japan's PMDA to have to complete the Japan development program and support JNDA.

William P. Sheridan -- Senior Vice President and Chief Medical Officer

Yeah. And I think with regard to your question of how many patients worth of data will we submit, what we need is 100 patients at 48 weeks, if it's a -- high dose looks clean and we believe we're going to file both doses, that's enough for the filing or we'll just file the high dose. So we have lots of options.

Maury Raycroft -- Jefferies -- Analyst

Got it. Okay. Thank you very much.

Jon P. Stonehouse -- President and Chief Executive Officer

You're welcome.

Operator

Thank you. And our next question comes from the line of Serge Belanger with Needham. Your line is now open.

Tan -- Needham & Company -- Analyst

Hey, thanks, guys. This is Tan (ph) on for Serge. I just have a question about APeX-2? Is the safety extension portion of that trial -- is that also to be read out in 2Q '19 and also the APeX-S trial, is that also part of the NDA submission for the 4Q '19?

Jon P. Stonehouse -- President and Chief Executive Officer

Yeah. You want to take it.

William P. Sheridan -- Senior Vice President and Chief Medical Officer

Yeah. I will take it. So the analysis in the second quarter is the 24 week analysis of APeX-2. So the answer to your first question is no. That's the pivotal placebo-controlled efficacy and safety that is going to support the submission. The long-term safety follow up will be ready later this year from both studies from APeX-S and APeX-2 and that will be compiled to submit in the NDA.

Tan -- Needham & Company -- Analyst

Okay, great. Thanks.

Operator

Thank you. And our last question comes from the line of Tyler Van Buren with Piper Jaffray. Your line is now open.

Tyler Van Buren -- Piper Jaffray -- Analyst

Hey, good morning, guys. Thanks for the additional detail and the statistical analysis. I guess I just had a point of clarification. Is the (inaudible) step up procedure analysis that was used in the (inaudible) pivotal trials.

Jon P. Stonehouse -- President and Chief Executive Officer

I'd have to look at up. It's a -- so there's a the (inaudible) is simply a way of controlling for multiplicity, of having two arms instead of one versus placebo. And you know -- we've utilized it, in that way. You know the type of analysis of the data is and you can read this in the publication from the (inaudible) study. It'll be very similar to that in terms of how you do the analysis, few counting events and statistical approaches to how to analyze and compare accounts of events that turn into rates. It -- in Phase 3 trials, it depends on whether or not it's maybe a bit too technical but it depends on whether or not the distribution is over dispersed or not, if it's over disperses binomial and if it's -- not then it's priced on. So I hope that helps you and all of that of course is great with regulators and totally standard.

Tyler Van Buren -- Piper Jaffray -- Analyst

That does. It's great. And your updated thoughts on acceptable discontinuation rates for a trial of this sort and this design.

Jon P. Stonehouse -- President and Chief Executive Officer

So the fact that we over-enrolled gives us quite a bit of flexibility here 10% to 15% dropout rate during the placebo-controlled period is quite acceptable.

Tyler Van Buren -- Piper Jaffray -- Analyst

Okay. That's helpful. And a final question is you guys have spoken about commercial preparations. So, assuming the trials positive, clearly coming in with an oral, you have a chance to disrupt the space that's really been dominated by a couple players at a very high price and I think there is a level of physician, frustration because of those market dynamics. So can you again assuming that are successful, can you speak toward the commercial preparations and how you guys plan to approach the market with a product of this profile?

Lynne Powell -- Senior Vice President and Chief Commercial Officer

Yeah. It's Lynne here. So we have -- as Jon said earlier been actively recruiting a marketing market access, medical. We have been doing multiple pieces of market research to understand the market and what we're really practising for is to really give patients and physicians what they want in terms of service and have the opportunity to try an oral therapy which is what they tell us they want. So, in terms of pricing, what's really important, pricing is to understand what our profile of drug is. But we are certainly entering into a situation with very high priced competitors. So, we will be looking at all options in terms of what we do with pricing.

Jon P. Stonehouse -- President and Chief Executive Officer

And Lynne is being modest, she's put a lot of energy and resource toward gathering data to be smarter than anybody in this space. And there's a lot of switching going on right now with the other therapies that are being introduced. And so her team is analyzing the behaviors, and what drives people to switch successfully and unsuccessfully. And then we'll apply that learning to our launch plans. But what's great about this drug is that we are hearing from patients and physicians that the trial usage of this drug is going to be really high. So the other thing Lynne's team is doing is how do we keep them on the drug. And so we're getting really smart about that and putting them plans in place to be successful with that.

Maury Raycroft -- Jefferies -- Analyst

Great. Thanks for taking the questions.

Jon P. Stonehouse -- President and Chief Executive Officer

You're welcome.

Operator

Thank you. Ladies and gentlemen, this concludes today's Q&A session. I would now like to turn the call back over to management for any closing remarks.

Jon P. Stonehouse -- President and Chief Executive Officer

Yeah. So as I said at the beginning, this is a really exciting time for BioCryst. We're preparing for a very important filing of 7353 for prophylaxis. We're preparing for the launch in the US, in Europe, as well and we'll have the data soon and we look forward to reporting it out to you. Have a great day.

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you may all disconnect. Everyone, have a wonderful day.

Duration: 35 minutes

Call participants:

John Bluth -- Senior Vice President of Investor Relations and Corporate Communications

Jon P. Stonehouse -- President and Chief Executive Officer

William P. Sheridan -- Senior Vice President and Chief Medical Officer

Thomas R. Staab -- Senior Vice President and Chief Financial Officer

Lynne Powell -- Senior Vice President and Chief Commercial Officer

Bert -- RBC Capital Markets -- Analyst

Danielle -- J.P. Morgan -- Analyst

Liisa Bayko -- JMP Securities -- Analyst

Gena Wang -- Barclays -- Analyst

Maury Raycroft -- Jefferies -- Analyst

Tan -- Needham & Company -- Analyst

Tyler Van Buren -- Piper Jaffray -- Analyst

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