BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) Q4 2023 Earnings Call Transcript
BioCryst Pharmaceuticals, Inc. (NASDAQ:BCRX) Q4 2023 Earnings Call Transcript February 26, 2024
BioCryst Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $-0.28 EPS, expectations were $-0.24. BioCryst Pharmaceuticals, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, and welcome to the BioCryst Fourth Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to John Bluth at BioCryst. Please go ahead.
John Bluth: Thank you very much. Good morning and welcome to BioCryst fourth quarter and year-end, 2023 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 Medical Officer Dr. Ryan Arnold. Following our remarks, we'll answer your questions. Before we begin, please note that today's conference call will contain forward-looking statements, including those statements regarding future results unaudited and forward-looking financial information, as well as the company's future performance and/or achievements. These statements are subject to known and unknown risks and uncertainties which may cause our actual results, performance or achievements to be materially different from any future results or performance expressed or implied in this presentation.
You should not place undue reliance on these forward-looking statements. For additional information, including a detailed discussion of our risk factors, please refer to the company's documents filed with the Securities and Exchange Commission, which can be accessed on our website. In addition, today's conference call includes non-GAAP pro forma financial measures. For a reconciliation of these non-GAAP measures against the most directly comparable GAAP financial measure, please refer to the earnings press release posted in the press releases section of our Investor Relations website at biochrist.com. Now, I'd like to turn the call over to Jon Stonehouse.
Jon Stonehouse: Thanks, John. 2023 was another impressive year for ORLADEYO starting with generating $326 million in revenue in just the third year of launch. We continue to make great progress toward our goal of a global peak revenue of $1 billion. Let me explain why. Late last year, we laid out a set of assumptions that would lead us to $800 million in peak sales in the U.S. The first assumption was to exit last year with a base of approximately 1,050 patients on therapy. We actually exited the year with a base of over 1,100 patients on therapy. Second, we added over 300 net new patients well above the average of 200 per year we need. Third, we improved the percentage of paid therapy in the commercially insured part of the business from [7%] (ph) to 79%.
And fourth, we made a modest net annual price increase in the U.S. In all four of these assumptions, Charlie's [Technical Difficulty] executed such that we met or exceeded each of these goals. That's great execution and real progress towards our goal. Today, we'll focus our prepared remarks on ORLADEYO and the financials. We'll start with Ryan, who will cover the data presented at Quad AI this past weekend, and how many patients on ORLADEYO are seeing excellent control of their HAE, along with the convenience of one's daily dosing. With that, I'll pass it over to Ryan.
Ryan Arnold: Thanks, Jon. I've had the privilege during my career to work on several therapies that helped change the lives of patients who live with chronic, life-altering diseases. An important lesson I've learned is that long-term data and particularly, evidence from real world experience, especially in rare disease are critical to understanding how a treatment can address unmet needs and change the lives of differing patient populations. This is an exciting time for ORLADEYO, because after three full-years on the market, we are seeing a very consistent picture emerge from the building evidence. Real-world experience and the long-term clinical data are telling a very consistent story and how ORLADEYO can provide meaningful benefits to a variety of HAE patients.
We recently published the final analysis of data from the open label long-term extension portion of the APeX-2 study of berotralstat. The patients who started on blinded berotralstat 150 milligrams and completed the full two years of the study had an average reduction of 90.8% in HAE attacks, compared to their baseline rates. But most don't measure their attacks and percentages. What's most meaningful to people living with HAE is that they get the chance to live a normal life by minimizing their attack burden and experience meaningful improvements in their everyday quality of life, all while avoiding the unnecessary potential burdens of treatment. ORLADEYO treated patients in this long-term study reported rapid and sustained improvements from a baseline of 3.3 attacks per month to 0.3 attacks per month after two years, with a median attack rate of zero at month 24.
These patients also reported meaningful long-term improvements in quality of life, treatment satisfaction, and an overall safety profile that is very reassuring for people living with this lifelong disease. That kind of change and the sustained low rate of attacks with just one pill once a day is transformative for many patients. These long-term data from our clinical program tell an important part of the story, which is being consistently reinforced by our expanding base of real-world evidence. This past weekend at the Quad AI meeting in Washington DC, we presented five posters showing strong real world evidence with ORLADEYO in a variety of patients with HAE. What patients are experiencing in the real world is consistent with the two year clinical data.
Patients with Type I or II HAE are reporting long-term median attack rates of around half an attack per month after switching from other prophylactic therapies. By their own account, these patients are having fewer attacks on ORLADEYO than on their prior therapies. Patients report rapid and sustained reduction in attacks or maintaining attack-free status regardless of whether their baseline monthly attack rate was very high or very low prior to starting on ORLADEYO. These data on effect, regardless of baseline attack rate, are consistent with the evidence we have presented from our clinical trials. Patients diagnosed by their physicians as having HAE with normal C1-inhibitor levels also are reporting rapid and sustained reductions in attacks on ORLADEYO.
And we are seeing similar outside of the United States, particularly in countries like France, where patients can be followed in comprehensive programs with the active involvement of healthcare providers. This real world evidence demonstrating the long term safety and effectiveness of ORLADEYO is exciting. Our team has been hearing the stories of ORLADEYO over the past three years, and these data further illustrate why it is such a favorable treatment option for people living with HAE. What is even more exciting is that the data we presented at Quad AI are just the start. We will continue to generate more real world evidence with ORLADEYO over the coming years, and we look forward to showing again and again how this treatment can help change the lives of patients and families impacted by HAE.
I'll now turn it over to Charlie to describe how this emerging evidence is translating to our commercial efforts.
Charlie Gayer: Thanks, Ryan. As Jon noted earlier, we recently described how consistent net patient growth of 200 per year for the next several years puts us on track for $800 million in sales in the United States. Entering our fourth year on the market, we are very much on track, because we added 321 ORLADEYO patients in the U.S. in 2023. The real world evidence that Ryan described helps explain this growth. Patients would like convenience, there's no doubt about that. But what they demand is efficacy, control of their attacks. The real world data with ORLADEYO clearly demonstrates that patients can have both efficacy and convenience. No trade-offs. Our teams have done a very good job of launching ORLADEYO, but in the end patient experience will dictate how far we go.
Ryan shared that after switching to ORLADEYO from other prophylaxis therapies, patients experienced a median rate of about half an attack per month. What that means for patients is that many or most months are attack-free, and attacks that need to be treated are often less severe. Half an attack per month is also an important benchmark. We do market research with large samples of HAE patients, and we've reported previously at a medical congress that half an attack per month matches the level of attack control reported by patients taking injectable prophylaxis therapies in the real world. This low and consistent rate of attacks on ORLADEYO meets patients' expectations, because they know from experience that perfect control is unlikely with any product.
For many patients to be able to get that level of control with an oral once-daily therapy is transforming how they live with HAE. We recently conducted an anonymous market research project with a sizable cohort of patients, who have experience with ORLADEYO and asked them, as part of an exercise to write a letter to ORLADEYO describing that experience. Themes such as, you gave me confidence; you changed my life; and I feel like a normal person again, we're common. The strong evidence from patients also continues to shape prescriber expectations and give them confidence. Our large quarterly surveys of allergists in 2023 showed they consistently expected to grow the proportion of their HAE patients treated with ORLADEYO by about 30% over the next 12 months.
As we noted in our press release today, the number of patients on paid therapy or our long-term free product program also grew by 30% in 2023 tracking with physician predictions. Currently, about 50% of patients on ORLADEYO have switched from other prophylaxes, but the allergists in our 2023 surveys expect about two-thirds of ORLADEYO growth over the next year to come from switches from injectable prophylaxis. By the end of 2023, ORLADEYO had been prescribed over 2,500 times in the United States. That means that at least 5,000 diagnosed and treated patients have not yet tried ORLADEYO. Over 1,000 US healthcare providers have now prescribed ORLADEYO, including over 200 new prescribers in 2023. But clearly, there is an opportunity for HAE treaters to -- for many more of their patients just as our market research predicts.
We have way more opportunity in front of us than behind us and the growing body of evidence about how ORLADEYO is changing patients’ lives is going to help us get there. I'll pass it to Anthony to describe our financial performance.
Anthony Doyle: Thanks, Charlie. It was great to see such a strong Q4 and full-year 2023 for ORLADEYO. Not just the revenue performance, but the continued underlying strength in net new patient adds, giving us confidence of achieving between $380 million and [$400 million] (ph) in global ORLADEYO revenue this year on our path to peak sales of $1 billion. You can find our detailed fourth quarter financials in today's earnings press release and I call your attention to a few items. Total revenue for the quarter came in at $93.4 million, $90.9 million of which came from ORLADEYO. And ORLADEYO's net sales for full-year 2023 at $326 million, an increase of $74 million or 30% year-over-year. Of the $90.9 million of global ORLADEYO revenue, $79.4 million came from U.S. sales with the remaining $11.5 million or 12.7% coming from ex-U.S. On a full-year basis, U.S. ORLADEYO sales contributed $288.4 million of the $326 million global total, with the remaining $37.6 million or 11.5% coming from ex-U.S. Operating expenses, not including non-cash stock comp for the quarter were approximately $119.6 million.
Included in this are some significant one-time expenses. These include about $5.4 million attributable to the R&D reorganization, including costs related to the reduction in force and the postponement of the expansion of the Discovery Center in Birmingham, Alabama. The $5 million upfront payment we made to Clearside related to our partnership, as well as around $7 million in CMC and other trial costs related to our partnership decision for BCX10013. All of which explain the increase in OpEx from Q3 of 2023. Operating expenses not including non-cash stock comp for the full-year came in at $379.5 million, which when excluding the $5.4 million of restructuring one-time adjustments I mentioned landed it within our guidance range. We expect that quarterly expenses in 2024 will normalize in the low to mid-$90 million range taking us in line with our full-year 2024 guidance of between $365 million and $375 million and essentially flat to 2023.
Cash at the end of the year was at $390.8 million and net cash utilization for the quarter was $8.4 million. In January, we provided guidance on our near-term timeline to achieve profitability. For 2024, we expect that revenue will exceed OpEx, not including non-cash stock comp and this will result in us generating an operating profit this year. Additionally, with revenue exceeding $350 million, it puts us into a tier whereby the incremental revenue will be more profitable as the blended royalty rate is reduced. In the second-half of 2025, we expect to be approaching net income and cash flow positivity on a quarterly basis and then in 2026 we expect to achieve net income and cash flow positivity on a full-year basis. Achieving independence from the capital markets, while we also continue to invest in further expanding our global reach for ORLADEYO and expanding our label with the pediatric indication, while also further advancing our exciting early stage pipeline puts the company in a very strong position moving forward.
Operator, we'll now open it up for Q&A.
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