Welcome back to the Bank of America Healthcare Conference. I'm Tazeen Ahmad, I'm one of the senior SMID biotech analysts at the firm. It's my pleasure to have our next presenting company with us, BioCryst. Sitting up on stage with me is Jon Stonehouse, who is, of course, CEO of the company. Next to him is Charlie Gayer, who is Chief Commercial Officer. Gentlemen, good morning still, and welcome to the conference. Yeah, thanks for having us. I've been starting off these conversations with macro questions, which, again, is quite unusual in my space, but the time's called for it. I'll probably just ask you from the most recent updates, and we can go from there. On Monday, the president made an executive order focusing on most favored nation status. Details are still coming in. It might be hard to give a concrete answer, but can you, to the best of your ability, talk about what the impact of this could mean to BioCryst in particular? Yeah, and Charlie and I are going to make some forward-looking statements, and they have risks, and you can find our risk factors in our filings on our website. Yeah, it's a hard one, Tiziana, because it's short on detail, and I think people are still trying to figure out exactly what does it mean. Looks like it could be more part B in Medicare than D, and we're in D, so that could be a difference. We're going to continue to execute our plan, and we got our ear to the ground on this, and we'll see how things unfold. For right now, I can't really make a whole lot of forward-looking statements on that. Sure. A similar question on tariffs. I'll let Charlie answer that. Tariffs, we feel like we're in a good position. First of all, the cost of goods for ORLADEYO is low. Second, we have redundant supply chains, so we make API in Europe as well as in the U.S. We also have finished goods made in the U.S., and we have the ability to serve different markets. Importantly, all of our IP is in the U.S. as well. In terms of interactions with FDA, let's say over the last eight weeks, if you've had any, have they been any different from what they've been in the past in terms of type of interaction, people that you're interacting with, types of questions being asked, et cetera? Yeah, I don't know if you saw, but we got our PDUFA day this morning, so our file was accepted for the pediatric granules, which is really exciting. That was on time, so that's a good sign. We have an open IND for BCX17725 that kind of went on the normal timeline that you would expect. So far, so good. I can't predict the future, but so far, so good. Okay. Let's move on to specific questions to BioCryst. This ORLADEYO launch keeps getting better, and I think probably some people have been surprised by that. We've always viewed this as a pretty steady eddy ramp. You've talked about your confidence in this market, in your product. Can you talk to us about some of the more meaningful dynamics that have been contributing to the results most recently, your Q1 key results, which allowed you to increase your sales guide? Yeah, I think before Charlie will answer that, I think one thing that's really important is when you go into a rare disease with seven other drugs ahead of you, it's a market that you've probably never seen before. One of the things that I'll give Charlie and his team, I mean, a ton of credit for in the execution, is just really understanding the data, making big moves early on that helped us gather data that was incredibly helpful, and then making these tweaks and adjustments along the way to adjust to what we see. That has led to this beautiful, steady growth of the product. As you know, Tazeen, we had a great first quarter. It was 51% year-over-year growth. What I would say the most important baseline of that is really strong demand. Last year, we had as many new patient starts in the U.S. as we did back in 2021, the first year of the launch. Q1 of this year was actually just a little bit better than the best quarter of last year. That is really important. If we did not have the demand, the next part would not matter as much, but the demand is really solid. The other big thing that happened in Q1 is we made a big jump forward in our paid rate. Something that we thought we would not get to until the end of 2027, we jumped 10 percentage points all the way up to 84% of our patients being paid all through in the first four months of this year. That was two big components. One was the IRA is helping make ORLADEYO and other drugs more affordable for patients. Patients who previously could not afford their copays and were on free product now can afford it. In our Medicare segment, the paid rate is up to 89%. The other thing is with commercial payers, we keep making progress. Jon mentioned the evidence. We have developed a lot of real-world evidence that is convincing payers that this drug is not just a pill; it is a very effective preventative therapy. All of that combined to make just a really great Q1 and sets us up on a strong path for this year and the next several years. Yeah, so we've always talked about stickiness of the market. Jon, you talked about entering a sticky market, but now you're part of the sticky market. What do you think is particularly about ORLADEYO that you think will help you keep the patients that you have now as well as continue to add on even potential new competition coming? I think, Tazeen, the key is, of course, patients love the idea of an oral therapy, but in HAE, they will not accept a drug that does not work as well. Getting efficacy is primary. What patients have discovered is they can do really well and do do really well on ORLADEYO. If they do not, that is fine. What we have learned is no drug works perfectly for every patient. They try it and they move on. The patients who stay on, they stay on because it is convenient, but also because they have a very low rate of attacks relative to what they might have experienced at some point in their past. That makes it sticky. That is what they are looking for, is just to take a pill and almost forget that I have HAE. That is why we think those patients will be so sticky, because what could any new therapy offer them that is better than that? They have already found what they are looking for. Yeah, and I think one other thing in the marketplace, and we saw this from the start and we still hear it today, the number one objection from a doctor about switching to ORLADEYO is if it ain't broke, don't fix it. If you're on ORLADEYO and you're controlled, as Charlie said, there is nothing more that you can do for that patient, right? That is where the stickiness comes from. What is the definition of controlled? Because sometimes different people, different doctors actually have different ways of looking at it. What is the most standard way of thinking about controlled? Does that mean you do not have occasional breakthrough attacks? What everyone would love to be is completely attack-free. That's an admirable goal. What I think physicians really know and patients very much understand is that is almost unrealistic for most patients. Control means rare breakthrough attacks, and when you have an attack, that you're able to deal with it more easily with a rescue medicine. What our long-term and our real-world evidence is showing is the median attack rate for patients on ORLADEYO is getting down to about four attacks per year on a rate. That is great control. We have a decent percentage who are effectively attack-free. Some have a little bit more. It's all relative to what the patient expects based on their past history. We've looked at other therapies and what they've reported on drugs, really good drugs like TAKHZYRO or HAEGARDA. The same types of patterns are seen where some people are attack-free, but most people do have an occasional breakthrough attack. That is expected. As long as they can deal with it quickly with a rescue medication, they are comfortable with that. Charlie, you might want to talk about the data that we gathered through claims where the persistence of other trophy therapies bears that out. Yeah, I think this kind of shows, and also what I said earlier, that no drug is perfect for absolutely everybody. We did work identifying patients starting ORLADEYO, starting TAKHZYRO, and starting HAEGARDA, and followed them through their first year of therapy. What it showed is there is no difference between those three products. They all end up with about a 60% retention rate at one year. I think that just shows patients need to find what works for them. We, at the moment, have the most differentiated product in the market. Jon, you've talked about being able to achieve at least $800 million in sales, but at the trend that you're at now, it seems like it's not that far away. How are you thinking about it now in terms of where this could peak? Yeah, I mean, our confidence in the U.S. in hitting that 800 number is really high. It is because when we first put it out, we gave you the steps of things that we needed to hit, and we're ahead of plan on all of them. I'll let Charlie describe them. Yeah, there are three big components. What I said in the first answer is really key. The number one is the demand. As long as we average, and this was from 2024 through 2028, average a net of 200 patient additions per year, that's the biggest piece to getting to $800 million. We were well ahead of that in 2024. The first quarter shows we're on that same strong pace. The next piece was getting to an 85% paid rate. We expected that would take three years. We're basically there at the end of April with 84%. The final piece is modest price increases. We've been able to increase price by 5% each of the last couple of years. We met about three and a half. We're ahead of that pace as well. We feel really good about peak of at least $800 million in the U.S. and then global sales of $1 billion in 2029. Okay. Can I just ask you how you expect to be impacted from launches of new on-demand therapies in the nearer term? What% of your patients do you think would opt for something that's fast-acting if they need it rather than be on a prophylactic, if at all? Yeah, I think there's maybe a couple of parts to your question, which is what we expect to launch very soon is an oral on-demand therapy. We know that that's something that patients would really like. We're paranoid about this, so we've done a lot of market research to figure out what will they actually do, what will physicians do. We see very little idea that the patients would go backwards and say, "I'm just going to treat my therapy as attacks come," because that puts a lot of burden on them to be ready. As easy as it is to take a pill, you have to constantly be ready. They'd rather prevent and then have a pill for the occasional breakthrough. To be able to do that with a fully oral regimen of oral every day to prevent attacks and then occasionally oral for breakthrough attacks is something that we think will be very attractive. I think there's another piece too, which is what is the characteristic of an attack if you're treating it on demand without prophylactic therapy versus a breakthrough attack if you're on prophylactic therapy. What we've seen and what other companies that have prophylactic medicine have seen is that the attack is shorter in duration, less likely to grab for rescue medicine, fewer body parts. Who wants to go through that, right? The other piece is that you need two things to have an attack: low C1 and a trigger. Stress is the number one trigger. Who wants to have a patient that's worrying about, "Oh my God, if I have an attack today?" A lot of times that will trigger an attack. It is just way better to prevent. The guidelines suggest that everybody should have the opportunity to have prophylactic therapy. This idea that we're going to go backwards and treat more on demand, I think, like Charlie said, no drug is perfect. There are breakthrough attacks. There will always be some people that are on demand only. There is a place for these medicines, but prophylactic is here to stay. To Jon's point, we've put a big study that we did with ORLADEYO patients. We put this data out publicly. 80% of them report less severe attacks on ORLADEYO, and only 5% say their attacks are the other way or worse. People really do do better when they're controlled with ORLADEYO. I think this would be true controlled on any prophylactic therapy. Okay. I did want to have a good amount of time to talk about your pipeline because there's a couple of exciting things upcoming later this year. Maybe, Jon, can you give us an overview of those? Yeah, so we're back in the clinic, which is great, with two programs, BCX17725, which is a fusion protein, our first biologic that we're moving into the clinic for Netherton syndrome patients. This is a horrible disease where you have uncontrollable KLK activity that causes uncontrollable skin shedding. The more we learn about it, the sadder we get about having patients not having anything to really treat the underlying cause of their disease. We're really excited to be in the clinic and moving that forward. The second one is of avoralstat, which you remember from back in the day. It was our first-generation kallikrein inhibitor, poorly soluble, poorly permeable. It wasn't a great oral drug. In DME, we believe that given with a suprachoroidal injection could be really interesting for patients that have DME and are continuing to progress even when they're on VEGF therapy. Okay. Let's go into a little bit more detail about Netherton. Can you talk about mechanistically why you're excited about this particular approach? Yeah, so the disease, in a simple layman's explanation, is faulty gene, missing protein, overactive enzyme, KLK5. What it does is it starts to gobble up skin cells and you shed uncontrollably. Like I said, it's a horrible disease. What we're able to do is replace the protein and control the KLK5. What we're shooting for is restoring normal turnover of skin, which would be just unbelievable for these patients. In this first stop that you're looking at, just tell us how we should be thinking about what the data could show us. Yeah, and I'm going to get to a slide, I believe. Yeah, here we go. This is a slide. 13. Yeah, I don't know if it's 13 in the deck, but it was recently presented in our earnings deck, and it's the phase one healthy volunteer and patient study in Netherton. We are in parts one and two right now, which is your standard healthy volunteer SAD/MAD study. What we're looking for in that portion of the study is PK and getting a sense of dose and also safety and tolerability. Because of normal skin turnover and having the protein, not missing the protein, you can't get great measurements in skin. We are doing biopsies, but it's going to be harder to get a sense of is your drug getting there or not. What we're really excited about, and this is where the IND in the U.S. opened up to treat patients in part three, is really exciting. This is four weeks of treatment, so three doses. Weeks one are starting day two weeks and then four weeks. Then we follow them for another four weeks. We're probably going to get a handful of patient data out of this study because it's an ultra-rare disease. What we're looking for, we're starting at 6 mg dose, is to see what 6 mg of dose does in these patients. If we have to go up, we will go up in that study. Really what we're looking for is do we see the drug getting to the skin? We'll do biopsies there. It will tell us what effect is it having on KLK5. Are there any clinical symptoms? We don't know if in a four-week treatment study if we'll see that or not. We don't know if 6 mg is the right dose. We think we'll start to get a sense of dose and activity in that study. The next part, which we also expect to start this year, we do not know how much data we'll have, is part four where we have 12 weeks of treatment, a longer duration where we expect that we should start to see some real clinical benefit. The combination of all of this, if it does what we think it will do, will give us something, I think, really exciting to take to the regulators in a disease where there is nothing to treat these patients. Yeah. Let's do a deeper dive into a couple of things that you just mentioned. Is there a minimal threshold of impact on KLK5 that you need to see? Yeah. Without going into too much, we want to restore normal skin turnover. It has to be inhibition that is similar to what you and I have. That means you are not going to be flaking. You are not going to have the redness. You are not going to have the itching. That is what we are shooting for. This is not some little incremental patient-reported, physician-reported. We are looking for restoration of normal skin turnover. Tazeen, I think part of the answer too is we don't know if there's a minimal threshold, but we'll find out with the dosing schedule. The fact that for these patients, their skin turns over on about every two weeks, that's why these short studies with essentially replacing the missing controlling protein or controlling enzyme, it's plausible that we could actually discover what that minimum dose is in these short studies. Even when you get to the 12 weeks, that would be, you think, sufficient to get answers? I could find it out in the four-week study, right? Yeah, you've listed some other markers there outside of KLK5, which I'm not familiar with, but can you talk us through the importance of those? Yeah, I mean, just in general, there are patient-reported outcomes and physician-reported outcomes of how much of the body do you see an improvement, how much of the area do you see an improvement. Those kinds of standard ichthyosis, atopic dermatitis type measurements we'll be using. Those probably will be the endpoints that will be used in a pivotal study. If we achieve the restoration of normal skin turnover, they should be dramatic differences from what patients are experiencing. Right. It seems to me like you'll be able to, and again, we don't know how many doses are going to be in part four, but you'd be able to know pretty early when we're, is this going to work or is this not going to work, right? I would say the investment that you're making in this is not something that's multi-year and super expensive. Yes. It's probably one handful of patients in part three and maybe two in part four. It's an investment that either the drug gets to the skin or it doesn't. It's having the intended effect. Because remember, BCX17725 is a million times more potent than the natural ligand. It has a high affinity for the site. We think that that tends well to or gives us the confidence that we're going to have a drug. How many patients are there again for Netherton? There is no ICD-10 code. This is a critical thing to figure out. We've gotten a good start on it because there's a unique feature that many patients have called bamboo hair, where their hair literally looks like bamboo under a microscope. We've done US claims data analysis and found about 1,600 patients that have a mention of bamboo hair. What we know from talking to patients is many of them, because there's no therapy out there, kind of retreat from care. They're not asking their doctors anymore. Our belief is, if there's a targeted therapy out there on the market, like we've seen in other rare diseases like HAE, the market could grow. We have people who launched Synrise on our team back in the day, back in 2009. They used to think there were 2,000-3,000 HAE patients in the U.S. Now we know that there's over 10,000. A similar kind of growth could happen in Netherton's. We're doing more work to gain more confidence around that kind of hidden, undiagnosed population size. We got a really good question today from an investor about what role does this drug play for BioCryst for an investor? The answer is sustainable growth, both in revenue and profit. About the time this comes to market, and we will be, we think, a pretty good trajectory. ORLADEYO will be starting to hit its peak and flattening out. Profitability, spreading another product across the infrastructure and investment that we have made improves profitability. Validation of our discovery engine. How many companies do you know that actually do this twice, right? We have a high degree of confidence for that. That is the role it plays. Sure. If everything that you're looking for in this study goes in the direction that you would hope, I guess, first of all, are we going to see the 12-week results this calendar year, or would that flow into next year? Yeah, I think that's going to flow into next year. We may start enrolling part four this year. We may have some early data out of part four, but I think part three is where, like I said, a handful of patients treated for four weeks. That part three is when again? We're going to start it towards the end of the summer and have data by the end of the year. By the end of the year for that. Yeah. Okay. What would be the next steps if this turns out to be what you wanted? Yeah, it all depends on what we see. Let's assume that part four gives us a real indication of clinical improvement that we're talking about, and we have a dose. We're going to go to the regulators. There's nothing to treat these patients. I can't predict with certainty that we'll be able to go right into a pivotal study, but we're going to make an argument for that and see what happens. I think the other piece that we'll turn on at that part is what Charlie was talking about. How big is this market? Can we start to get a program where we're getting more dermatologists that have big ichthyosis patient populations to start doing the genetic testing and to start helping with advocacy for patients and the like and really start to find the patient? That would be very exciting. We think that could happen as early as sometime next year. For something like this, do you think that it's worth trying to pursue an accelerated path? Or just based on what you said, you'll be able to know in a short amount of time and even in a bigger study if it's going to work or if it's not going to work. Does it make sense to even think about, and I'm jumping way ahead, of whether or not it makes sense to try to pursue an accelerated? Yeah, I think everything's on the table, again, just based on what we see in terms of the results of these early studies. I think the agency in general is pretty amenable to accelerated pathways if there's nothing. You have a big treatment effect. I don't think that's off the table. Okay, great. We'll look forward to that. I did also want to talk about DME. Sure. I think some people are intrigued by it because the DME market is seemingly pretty saturated with the big players, the VEGFs. Can you just talk to us in particular why DME might be more amenable relative to some of the, I guess, let's say, what AMD to an alternative treatment form? Yeah, I think part of it is, while VEGF inhibitors are really good therapies, in some patients, they're not good enough is number one. Number two, the biology of the disease is such that plasma kallikrein likely plays a role in patients. There's a slide, it's number 15 in this deck, but it's addressing unmet need in diabetic macular edema. It's pulling data that, one, shows that upwards of 40% of patients on VEGF inhibitors continue to have a decrease in their visual acuity. It's just not working. The other part of the slide is a graph that shows from a study that was run in the vitreous, do you see VEGF or plasma kallikrein in the vitreous of DME patients? You see it in almost every patient that they took samples of with plasma kallikrein and in some no VEGF. This makes sense, right? While it's diabetic-driven, it's contact activation just like we see in HAE, where plasma kallikrein plays a role in leaky vessels that causes swelling that causes enlargement of the retina and ultimately decrease in visual acuity and blindness in patients. What type of data would you think is encouraging and worthy of moving forward? Yeah. Let me say first that we're not the first to try this. There have been failures with plasma kallikrein inhibitors in the past. What we're trying to do is do a study where we get a sense of, is our drug getting to the right spot, staying there long enough, and having an effect on the disease? Really, the thickness of the retina will be the first. We're going to look at visual acuity and some of these other things. What I love about this study is in a simple, sad study where we're not looking at healthy volunteers. We're actually looking at patients with DME. We can give a single injection and see what happens to the thickness of the retina over time and what is the durability of that single injection. We're starting, again, we're going to start that study sometime towards the tail end of this summer in the third quarter. I believe we're going to get some data. How many patients are going to? Yeah. The design was in our recent deck as well. I believe we've got it here, of ORLADEYO phase I patients with DME. There will be a low dose, mid dose, and high dose, three patients per cohort. Again, it's a small number of patients, but we're going to get some sense of what's happening in these patients in terms of the thickness of their retina. We should have some data by the end of this year. Back to your point about a reasonable investment to get an answer. If we start to show some sort of activity, let's say we don't find the dose yet. We have to go higher. We don't have the duration that we want. We'll keep going and pushing the dose until we find the dose that we feel is right to control over a long period of time. Mechanistically, would you expect to see a different result in newly diagnosed patients versus those that have already been using VEGFs? I think that is a question. It's going to be, it depends. In this study, we're going to be studying both newly diagnosed patients as well as some who have tried VEGF. As Don Fong, our Chief Medical Officer, will always say, patients can fail on a drug for a number of different reasons. That is the it depends part of it. If it works in newly treated patients as well as some who have experience with VEGF, we're looking for that range of experience. Yeah. I think back to that slide I talked about of looking at the vitreous and plasma kallikrein versus VEGF, that you can see in these samples that some patients have a pretty large VEGF component and some have a smaller kallikrein component. We may enroll some of those. We do not know what the effect is going to be in those patients. In a small study, what we are looking for is, are there signs of activity of shrinking the swelling of the retina? What is the durability of a single injection? I mean, this is all potentially really exciting and could be transformative for BioCryst. Would the size of this opportunity be something that BioCryst would feel comfortable taking on on its own? Or do you think that this would benefit from large companies that have done big ophthalmology launches before? Yeah, I'll say yes and yes. Right now, we feel in one of the things that made it attractive, it's not rare, right? These trials are big. We can talk about the investment in these trials, but we can afford it based on the compound annual growth rate that we've shown in the past and our path to profitability. The commercial footprint is very similar to HAE treaters. Because there are these retinal centers that are about the size of the population of treaters of HAE, we have a 40-ish person salesforce in the U.S. We could do that. I could also, and I say yes and yes, I could also see companies being very interested in this program. I've always said, if somebody can do it bigger, faster, better than us, we're open to that, so. Yeah. I mean, just given the dynamics of certain drugs coming off of protection and all of that, I was curious as to how you're, I mean, are you getting inbound interest from people wanting to learn more? I think there's a bit of cynicism about kallikrein inhibitors, just to be honest, with the failures that we've seen in the clinic before. And so people want to see, is this approach going to be different? Yeah. I think if we show that, there could be real interest. Okay, cool. With that, we're out of time. Thanks so much for joining us on stage for the last 30 minutes. Thanks, everybody, for listening. We'll stay in touch, Jon, and we'll talk soon. Yeah, great. Thanks, Tazeen. Thanks, Tazeen.