BioCryst Pharmaceuticals Inc (BCRX) 2010 Q2 法說會逐字稿

Good day, and welcome to today's BioCryst Second Quarter 2010 Conference Call.

Today's call is being recorded.

At this time for opening remarks and introductions, I'll turn the call over to Mr.

Robert Bennett.

Please go ahead, sir.

Yes, good morning, and welcome to BioCryst's Second Quarter 2010 financial results conference call and corporate update.

Today's press release and accompanying slides for today's call are available on our website at www.biocryst.com.

At this time, all participants are in a listen-only mode.

Later, we'll open up the call for your questions and instructions for queuing up will be provided at that time.

Joining me on the call today are Jon Stonehouse, Chief Executive Officer; Dr.

William Sheridan, our Chief Medical Officer; and Stuart Grant, our Chief Financial Officer.

Before we begin, I'll read a formal statement regarding risk factors associated with today's call.

Today's conference call will contain forward-looking statements, including statements regarding future results, unaudited and forward-looking financial information, and Company performance 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 the forward-looking statements.

For additional information, including important risk factors, please refer to BioCryst's documents filed with the SEC, which can be found on our Company website.

Following a brief overview of Q2 developments and financial results by Jon and Stuart, Dr.

Sheridan will present the top line results of our BCX4208 Phase 2a study in patients with gout, and provide an update on our other clinical programs.

Then we will open up the call for the Q&A.

With that, I will turn the call over to Jon.

Thanks, Rob.

Good morning, and thanks to everyone for joining us today.

BioCryst's primary focus remains on transforming our pipeline by advancing our late-stage development programs and by initiating new clinical programs over the next two years.

Getting our new products toward the market is an essential element of our strategy to establish BioCryst as an enduring successful biopharmaceutical company.

BioCryst has made significant strides towards this goal as evident, in part, by the clinical and regulatory progress we and our partners have made this year.

We are delighted to report to you today positive final top line results from our Phase 2a BCX4208 gout study.

The treatment of gout today is characterized by under-treatment as well as significant unmet medical needs that result in poor compliance and patient outcomes.

This lack of treatment optimization for a significant portion of the population suffering from this painful disease makes gout an attractive market for potential treatments such as BCX4208.

Bill will share the details on the study results in a minute.

Today's results support the continued evaluation of BCX4208 for this disease.

Our primary objective for Peramivir is approvals in the US and other countries.

Our partner, Green Cross, is awaiting a reply on its Peramivir approval filing in South Korea while Shionogi is waiting to hear on its application to broaden the current pediatric labeling for Rapiacta to include younger pediatric patients.

Shionogi is well prepared to supply Rapiacta during the upcoming flu season in Japan.

Our two IV Peramivir Phase 3 studies in hospitalized patients intended to support US filings are continuing to enroll.

We continue to be in discussions with FDA and HHS regarding other studies or data analyses that could provide additional evidence of efficacy for the Peramivir development program.

Beyond today's clinical readout, we are on track to report top line data from other clinical studies later in 2010.

These include the Phase 2 study of BCX4208 in combination with allopurinol, as well as the pivotal forodesine CTCL study, and the exploratory Phase 2 study of forodesine in CLL patients.

We look forward to sharing our results with you throughout the year.

Now, I will turn it over to Stuart to cover our financials.

Thanks, Jon, and good morning.

Revenues for the second quarter of $7.6 million and for the first half of $33.7 million are both ahead of the same periods last year.

This is due to additional HHS development funding for Peramivir, as well as the $7 million milestone payment from Shionogi, and $6.4 million in collaboration revenue from the sale of Peramivir EPI to Shionogi and Green Cross that were both reported in the first quarter of 2010.

R&D expenses for the second quarter increased by $3.5 million to $14.7 million, compared to last year due to spending on the 42-week gout trials and higher spending on Peramivir development.

These increases were partially offset by lower costs for forodesine development and the ongoing CTCL and CLL studies near completion.

G&A expenses were higher mainly due to consulting fees and process optimization projects.

Our net loss was $10.2 million compared to $8.7 million in the same quarter last year.

Our use of cash during the second quarter was $8.2 million and $13.1 million for the first half of 2010.

We ended the quarter with $81.2 million of cash and cash equivalents on the balance sheet.

We do still expect the 2010 burn to be within the previous guidance range of between $25 million and $30 million, but we now anticipate that it will be at the higher end of this range.

Peramivir royalty income has been less than anticipated as a result of the mild flu activity following approval in Japan.

We have been able to offset much of the shortfall with selective cost reductions while sustaining the momentum on our clinical programs.

Our outlook may change depending on the timing of payments from HHS related to the Peramivir program.

I'll now turn the call over to Bill, who is going to talk about today's clinical news and provide a development program update.

Thanks, Stuart.

We are pleased to share with you today positive top line results from our now completed Phase 2a gout study of BCX4208, including new positive data from the second part of the study, which demonstrates an efficacy dose response for this PNP inhibitor.

As a reminder, in late April we announced positive results from part one of this study.

For those following along with the slides, slides 4 through 7 provide summary of the study design and top line results.

This trial is a randomized, double-blind, placebo-controlled study to evaluate the efficacy and safety of BCX4208 monotherapy.

As part of the screening process, all study subjects completed a 30-day washout period during which they did not receive urate-lowering therapy.

Additionally, all subjects received gout flare prophylaxis prior to and during the entire period of blinded study drug administration.

The primary endpoint in this study is the change in serum uric acid concentration from baseline assessed at the day 22 visit.

Data were evaluated using the least square means an analysis of covariance, or ANCOVA model, with factors for treatment and baseline serum uric acid.

In the first part of the study we randomized gout patients with serum uric acid greater than or equal to 8 mg/dL to either placebo or to one of three doses of BCX4208, and this orally once for 21 days.

The doses studied in part one were 40 mg, 80 mg, and 120 mg, and the least square mean reduction in uric acid concentration range from 3.0 mg/dL to 3.6 mg/dL for these three doses.

Part two was designed to sequentially evaluate the safety and efficacy of up to three higher doses of BCX4208, including 160 mg, 240 mg and 320 mg once daily versus placebo.

BCX4208 doses of 160 mg and 240 mg per day showed least square mean reductions in serum uric acid levels of 3.6 mg/dL and 4.5 mg/dL at day 22 compared to baseline.

As shown on slide 6, all five doses of BCX4208 demonstrated a statistically significant reduction in serum uric acid levels compared to the 0.2 mg/dL reduction for placebo with p values less than 0.001.

The proportion of subjects achieving uric acid levels of less than 6 mg/dL was 47% for the 160 mg dose, and 77% for the 240 mg dose, compared to 31% to 36% for the lower BCX4208 doses studied in part one of the study, and 0% in the placebo group.

The study included a number of efficacy and safety stopping criteria.

Enrollment in the study was closed after the 240 mg treatment group achieved two efficacy stopping criteria.

These were achieving a more than 4 mg/dL reduction in serum uric acid from baseline, and achieving more than a 60% rate of patients achieving uric acid concentration below 6 mg/dL.

BCX4208 was generally safe and well tolerated at all doses evaluated in this study.

We evaluated safety with regular clinical and laboratory examinations including blood chemistry and hematology, as well as lymphocyte counts.

Reductions in peripheral blood lymphocytes were observed in patients treated with BCX4208.

The protocol included individual subjects stopping criteria for CD4 positive cell counts below certain thresholds, and no subjects were discontinued for this reason.

Overall, the frequency of adverse events in each of the BCX4208 treatment groups was comparable to that observed in the placebo group.

The incidents of gout flares observed was low.

We plan to submit the complete study results for presentation at an upcoming medical conference.

In June, we announced the initiation of another Phase 2 study of BCX4208 and allopurinol as monotherapy and in combination to determine if inhibition of both xanthine oxidase and purine nucleoside phosphorylase resulted in additive or synergistic effects in reducing uric acid in gout patients.

The study utilizes the classical Latin square factorial design evaluating BCX4208 at doses of 20 mg, 40 mg and 80 mg administered once daily for 21 days as monotherapy, or in combination with doses of allopurinol of 100 mg, 200 mg and 300 mg.

We are making good progress towards our enrollment target of approximately 80 patients, and we are on track to report top line data for this study before the end of 2010.

We continue to make progress towards completion of our two forodesine cancer studies.

You will recall that earlier this year we reported full enrollment of both pivotal study of once-daily forodesine in patients with cutaneous C-cell lymphoma, and the exploratory study of twice-daily forodesine in patients with refractory chronic lymphocytic leukemia.

In each study we continued to follow patients as required in the study protocols.

In addition, we are continuing enrollment in our two Phase 3 studies of Peramivir in hospitalized flu patients in the Southern Hemisphere, where we are now seeing some regional increases in flu activity, notably, in New Zealand.

Assuming flu infection rates return to average levels during the upcoming Southern and Northern hemisphere seasons, these two studies should reach their enrollment targets during the first half of 2011.

That concludes the update on our clinical programs.

Thanks, Bill.

If you will move to slide 9, you will see that the execution of our 2010 clinical plan is on track.

In addition to delivering promising results today, we expect to announce top line data from our pivotal forodesine CTCL study and exploratory Phase 2 CLL study later this year.

In addition, we are on schedule to report top line data from the combination study of BCX4208 and allopurinol in the fourth quarter.

Earlier this year we had told you that we were working on prioritizing a number of preclinical molecules with the goal of backfilling our pipeline.

I am pleased to tell you that this September we will host and webcast an investor day event where we plan to provide more details regarding both our clinical programs and our early drug discovery efforts directed towards bringing new BioCryst discovered molecules into the clinic.

With that, we will take your questions.

(Operator Instructions) And our first call comes from Charles Duncan of JMP Securities.

Hi, guys.

Thanks for taking my question and congratulations on a nice quarter of progress.

Thanks, Charles.

My first question is regarding 4208, this is probably for Bill.

Bill, I'm kind of wondering, first of all, what you think is the most important parameter with regard to taking a look at the dose response.

Is it the absolute change in uric acid levels or a portion of patients achieving less than 6?

Hi, Charles.

Yes, thanks for the question.

The regulatory endpoint for approval of medicines that lower uric acid to treat gout is the proportion of subjects who reach the treatment goal.

So, from that perspective, really, the most important metric here is the proportion of subjects with less than 6 mg/dL.

And so the next step, as we mentioned on the call, is to get data in combination with allopurinol, and with that data, together with the data we now have for monotherapy, we will be in a position to finalize the design of longer term administration experiments and complete the Phase 2 program.

Yes, that makes sense to me.

That's what I thought.

So, what is your perspective on this dose response?

Is it flat, relatively flat?

Is there a good tradeoff between an impact on white blood cells and efficacy?

Do you think that you may be able to not have to push the dose and therefore get into a safety issue and yet still get good efficacy?

So, in looking at the data here, we don't have doses of 1 mg or 5 mg or 10 mg, so in terms of a full dose response curve, we didn't go very low.

So, even at the lowest dose we are seeing 33% of the patients reach target.

At the highest dose we're seeing 77, and we decided not to do the 320 mg cohort, because that was enough from our perspective for a monotherapy Phase 2 study.

There is a very good fundamental basis for believing that if we inhibit both xanthine oxidase and purine nucleoside phosphorylase, we might get additional activity, and that would allow us to use a lower dose of BCX4208 for longer-term therapy.

So, we will know that fairly soon.

So, there is plenty of room here to have a therapy progress to the next stage with longer term studies.

And what matters in the end is not the lymphocyte count, it's whether there are any clinical consequences to having an effect on the lymphocyte count, and so far the answer to that has been no.

Sure, I appreciate that.

But you did say that none of the patients were taken out or came off the study due to meeting certain preset thresholds.

Have you ever said what those criteria were?

Yes.

For the CD4 positive cell count, it is having a concerned count less than 350 per microliter.

So, to set that in context, we know that these inhibitors of PNP do affect lymphocytes, and we know that if we give enough for long enough we are bound to see people reach those sorts of thresholds.

In this study for three weeks' administration, nobody was removed.

With the three-month study, we anticipate we will see the plateau effect on lymphocytes and there will be a number of doses studied in that type of a design and we will come out of that with a very good sense for what needs to be studied in Phase 3.

Charles, this is Jon.

I think one other piece, this market is really large and there is still a lot of patients that aren't successfully treated.

And so we don't want to close off any options right now, and we are trying through our trials to determine where we fit.

That may be low doses in combination or add-on with allopurinol, it may be refractory monotherapy for people that are tougher to treat.

But we need to study this drug more before we can really fine-tune where we are going to fit in the very, very large marketplace.

Do you think by year-end you are going to have a pretty good sense of that, or what is the specific data you are looking at?

So, remember the context of the plan.

So, the first step is understanding this dose response, so we've got that piece completed.

The second step is to understand the relationship with allopurinol.

We'll have that by the end of the year.

The third step is to understand that in the context of longer term treatment, up to three months.

And so I think once we have those three pieces, we will have a better idea of the efficacy/safety balance and a better idea of where we fit.

Yes, just one comment to add.

This is not the first PNP inhibitor we have studied here at BioCryst.

We have a lot of experience with forodesine, and that is in cancer patients who are very ill and have underlying poor bone marrow function and poor immune function.

So, we are not seeing worrisome signals of opportunistic infections coming out of those studies.

So, that gives us the confidence that we are doing the right thing here in developing BCX4208 in a less ill patient population with a normal immune system.

Okay.

And then in the combination study with allopurinol, are they the same types of patients in terms of uric acid levels, or is there a difference?

The eligibility criteria for the combination study are essentially the same as for the study, the results for which we haven't [had] yet.

Okay, thanks.

I'll hop back in the queue.

Thank you.

Our next question comes from the line of Steve Byrne from Merrill Lynch.

Hey, Bill, what were the CD4 concentration averages for each of the treatment arms?

Hi, Steve.

We haven't reported them out yet, and we intend to go into detail about all of the lymphocyte subsets including CD4, CD8, CD56, etc., in total lymphocyte count, so, when we have an opportunity to present at a medical meeting.

And would you say that there was a dose response?

Is there a relationship there that you could see, or can you comment on how close were you to reaching the safety criteria on the 240 mg dose?

I think with high doses with this type of a drug, if given for months, I'm sure there would be people who meet that threshold, so that is not in doubt.

And at low doses I think what we're seeing is -- in fact, we are quite encouraged that none of the doses, at least for three weeks, we are seeing people fall out.

So, there is adequate room from the data we have right now, if you like to thread the needle, and have one or more doses be satisfactory in long-term administration.

But would you say in general the 40 mg and 80 mg doses were meaningfully safer in terms of the lymphocyte impact?

We didn't actually see that, and so I think that the range of doses you are seeing that we are reporting today, I think that many of them would be suitable to study in longer term studies, and we haven't finalized the result, the design of that three-month study yet, because we need to see the allopurinol add-on data.

That study goes up to 80 mg.

Once we have seen that data, if necessary, we will consider studying higher doses.

But this data, together with that, should give us a pretty good sense of where to go for a longer term study in combination with allopurinol.

And then lastly, how did you arrive at the efficacy criteria of a 60% achieving less than 6 mg/dL.

It doesn't seem very aggressive.

So, a sense from reading the literature and talking to gout experts is that only about a quarter of patients on allopurinol stay on the drug long term, and up to half maybe under the best of circumstances get to goal.

So, we wanted to do a little bit better than that.

We didn't want to push the dose unnecessarily with respect to the lymphocyte effect.

So, we thought internally that 60% was a good number and that getting more than 4 mg/dL drop from baseline is a good number given where most people start.

Okay, thank you.

Thank you.

Our next question comes from the line of Bret Holley from Oppenheimer.

Hi.

It's actually Matt [Lowe] in for Bret today.

Just wondering how is the weak flu season in Japan resulted in significant inventory remaining, and I guess will this affect sales of API to Shionogi for the next flu season?

So, this is Jon, Matt.

So, remember that the timing of the approval was the end of January, and that came after the peak of the flu season.

Because similar to the US, the peak of the flu season in Japan started in October-November time frame, which is unusual for most flu seasons.

So, as a result, with no flu, there were no sales of -- or very little sales of Rapiacta by Shionogi after they got approval.

Since then, Shionogi has been working very hard in terms of their market prep and building up inventory for the upcoming flu season.

So, we have been in constant dialogue with them and are very confident that they are poised to take full advantage of the first full flu season post approval.

The sale to Shionogi, which is the revenue line in Q1, is completely offset by the cost, so it's really a neutral impact for us.

Anything that we supply at the API level to them, we have to pay for all this with the manufacturer, so it's a neutral impact on P&L as we move forward.

Okay, that's great.

Thank you.

Thank you.

Our next question comes from the line of Yigal Nochomovitz from Rodman & Renshaw.

Hi.

Good morning, gentlemen, and congratulations on the progress in the quarter.

I just wanted to dig in a little more detail on the combination study with allopurinol and gout.

So, my understanding that this is a factorial design with a number of doses both for allopurinol and for the drug BCX4208.

Could you just describe how that works in terms of the matrix of doses and how you plan to assess the statistical significance given that you have 80 patients and it seems that maybe about five per grouping?

Sure.

Thanks for the question.

So, there are 4 rows, 4 columns, 16 cells, 5 subjects per cell, with a total of 80.

And, actually, the power calculations for this type of design indicate that we only need two patients per cell, believe it or not, to detect an interaction between BCX4208 and allopurinol.

But we decided to add more than that to give us some more robustness to tease our individual drug effects as well as the interaction effect.

So, we have had this question a number of times, but actually the study is very robustly designed and classical design for an experiment of this sort.

Got it.

So, we should be expecting, then, a range of p values, or is everything going to be compared to the cell with placebo/placebo?

Is that --

The first -- it's an overall assessment of all 16 cells, is what you do first, and you're right, it's compared to placebo.

The first question to answer is, is there an interaction effect?

In other words, is there attitude effect or synergistic effect?

And if there is, you can still make statements about the dose response for the drugs.

Not in the same way that you can for the monotherapy therapy that we just talked about, but you can gain valuable information about the dose response effect for each of the two drugs even in the context of interaction.

So, the main point here is, is there an interaction?

Okay.

And then turning to the cancer program in forodesine.

Since we are approaching some key data events in the latter part of the year with CTCL and CLL, I thought it would be valuable to just ask you if you could review the overall scientific hypothesis surrounding the PNP inhibition and how this could impact better outcomes in the hematologic malignancies.

Sure.

So, the effect that we are relying on of PNP inhibition in the cancer setting is to do with what happens in lymphocytes specifically when we inhibit that enzyme.

This enzyme is in every cell in the body, but it has a particular effect on lymphocytes because they accumulate the precursors, which get phosphorylated, technically, and that triggers apoptosis eventually.

So, it's a targeted anti-cancer agent when you are thinking about malignant lymphocytes.

So, that is a separate pharmacodynamic effect of the drug compared to the lowering of uric acid.

So, that is the hypothesis.

The mechanism of action hypothesis we are testing for the cancer indication is that we can induce apoptosis in malignant lymphocytes and that will have clinical benefit as measured by inducing remissions in the disease, which basically means less disease.

And the business strategy is that with CTCL in the pivotal study, that's the PAT, our first registration in a hematologic malignancy, and so that pivotal data obviously is very important.

But it's a small market, right?

Most of the players in that market make around $20 million a year in annual sales.

We don't expect to be any less or any better than that.

But what is more important is to show monotherapy activity in CLL, because based on some of the in vitro data that we have in combination with other drugs to treat CLL, the fact that different mechanism of action and thus far has shown to be a well tolerated drug for cancer.

It makes for a very nice combination therapy for patients with CLL.

So, if we can demonstrate monotherapy activity, we can then start to do combination studies to determine if we've got the drug that could fit nicely with the other drugs.

And that's a big market.

Got it.

And in terms of the CTCL program, assuming you have positive results towards the end of the year, what would be the plan as far as filing that with the regulatory agencies?

Well, the key is to get the data first, of course, and see what kind of results we get, and if positive results we move towards registration.

Right.

Thanks very much and good luck.

Thank you.

Our next question comes from the line of Katherine Xu of Wedbush Securities.

Thank you very much for taking my question.

I'm just wondering about the combination rationale between the PNP inhibitor and allopurinol?

I mean, they kind of work in the same pathway.

Just curious about other thoughts on combination with other sort of mechanisms?

Thanks for the question.

That is a very good one.

I think that the other mechanisms out there for urate-lowering agents are to increase the excretion rate of uric acid in the kidneys by inhibiting reabsorption of uric acid.

Most uric acid normally gets reabsorbed in the nephrons in the kidney.

And, finally, there are mechanisms around metabolizing uric acid, and examples of the former are drugs like Probenecid or the RDEA compound, and of the latter, drugs like the [Crustixa] compound.

So, I think that there are valid and attractive reasons to want to study PNP inhibitors in combination with those types of agents as well, provided that there is a clinical space that needs it and a commercial point of view that supports that market segment.

But we would have every expectation that we would be able to get synergistic or additive effects using other mechanisms of action in combination with our drug.

And then do you think in combination with allopurinol would be any evidence or thought it would be worse or better than combination with other mechanisms?

So, I don't think -- maybe that question has a couple of elements.

One is how predictive are the results of the allopurinol combination study extrapolated to other mechanisms of action in combination with PNP?

I think you can't rely on it at all for those other mechanisms.

Is it going to be -- is the magnitude of the interaction, should it be more or less?

I think that is hard to know in advance.

I think that that's why we've got a range of doses of allopurinol in there, as well as a range of doses of BCX4208, because it could be that there is a sweet spot with low doses of both agents, which would be beneficial for patients.

So, if you think about combination therapy in general, what are the drugs that are the most used, and allopurinol is by far the most commonly used of this class of drugs right now.

So, that is where we are starting.

If the other agents make it to market and they are widely used, then that is certainly a reason to consider combination studies.

But I don't think you can take the results of the allopurinol study and extrapolate them.

Thank you.

Thank you.

Our next question comes from the line of Joseph Schwartz from Leerink Swann.

Hi.

Thanks for taking my question.

I'm sorry if this was already asked.

I had to jump on late.

But I was wondering if you could review for us the stopping rule for the T-cell drop, and how close did you get to that and was there a dose or time-dependent decrease in T cells that you could review for us?

So, thanks for the question.

So, the stopping rule is CD4 positive.

So, less than 350 per microliter, and that has to be concerned.

And just a point here is that these types of assays are done by flow cytometry, and there is quite a bit of variation.

So, one single reading of a low count, that's not the end of the story.

You have to confirm it.

So, that was the rule.

With regard to the kinetics of lymphocyte 4, we saw in (inaudible) study we had a couple of years ago that things are still falling at about three weeks for most of the lymphocyte subsets, and they may plateau by six weeks.

We are anticipating that the three-month study that we are planning, there will be ample time to see a plateau in the lymphocyte effects based on just our general understanding from all the work we have done with PNP inhibitors, including forodesine.

So, it is premature to conclude that these are the doses that are going to make it into Phase 3.

Right.

That's helpful.

What about the different -- what were the CD4-positive changes for the different doses?

Was it dose-dependent and what were the magnitudes?

Yes, so the question has come up several times.

I think that we are analyzing that data in detail and we intend to present it at an upcoming medical meeting, along with all of the efficacy data.

Just in general there is nothing here that would cause us concern in moving to the next steps.

And how would you describe the PK upon repeat administration?

Is there any saturating kinetics or anything you can help to characterize that?

Oh, sure.

We have a very detailed understanding of the PK in BCX4208 including in subjects with mild and moderate, severe renal impairment, but not dialysis subjects.

We haven't done that phase yet.

So, we have very detailed understanding and PK supports once daily dosing and there is only minimal accumulation after repeated dosing.

Is it different in renal impaired patients since a lot of gout patients have that issue?

We anticipate that the dosing in mild to moderate renal impairment will not need to be changed.

It may need to be changed in severe renal impairment, and I think that there are big differences between the different mechanism of action.

So, drugs that inhibit renal transporters that depend on having the target in the kidneys, right.

So, if you have shriveled up kidneys that haven't got any nephrons left, then you don't have the target to inhibit.

So, I think that in our case the PNP enzyme is not subject to that limitation.

Great.

Thanks.

Thank you.

Our next question is a follow-up from Charles Duncan of [JMP] Securities.

Hi, guys.

Thanks for taking the follow-up.

I hate to bring this back to the flu, because clearly this is becoming a gout story.

But with regard to Peramivir Phase 3 enrollment completion, I think, Bill, you mentioned that you only require a regular flu season, or is it that you like to see high flu season to hit that first half of the year completion?

Right.

That's right.

So, it's right at the start of the Southern Hemisphere flu season right now.

It's just starting.

We need to see an average flu season there and an average flu season in the upcoming fall and winter in the Northern Hemisphere in order to finish as we have predicted.

And how do you define average?

Add them up and divide.

Sorry.

No special definition.

It's just if you have a look back at the CDC website for the last five or 10 years, just the average.

Okay.

Okay.

So, you are defining it as one would define it.

Yes, yes.

Any chance that there is going to be a lower flu season perhaps because of better surveillance and, if so, would you be willing to push this another year?

It is very difficult t predict flu seasons, and I am not going to stake my reputation on doing that.

But there is a lot of interest in figuring out or trying to predict how much H1N1 there will be.

It still is circulating.

There is also influenza B and H3N2 circulating.

There are reports coming out now including a recent one from an analysis of people in Pittsburgh looking at the level of herd immunity after the pandemic.

Much higher in children than it is in adults, and overall, in that particular survey, it was 20%.

So, in that survey, at least, it was a lot lower than people were thinking it might be.

But we know these things vary regionally a lot, and we have incomplete knowledge.

So, flu is a capricious illness and there could be another really big flu season.

It is just not possible to predict.

Charles, one of the things we have learned, though, I mean, having done at least three years of flu trials, is cast a very broad net.

And so make sure that you've got a lot of sites, and we are fortunate to have the funding from HHS BARDA, and we've got a number of sites and locations all around the world, Northern and Southern hemisphere.

So, we've cast a very broad net.

Okay, good.

And then what are the implications if you don't complete enrollment to your criteria, to just carry it down to the next season and do you continue to get full financial support for that?

So, Charles, one of the things we could do as an alternative in the event there is a mild flu season in one of these two upcoming seasons is go south again.

And that really wouldn't affect our timeline, because we would still be able to file and get approval in a time frame that would allow us to catch the next Northern Hemisphere flu season in terms of launch.

Okay, perfect.

That's helpful.

Thanks.

Thank you.

Our next question comes from the line of Steven [Brozac] of WBB Securities.

Hey, good morning, gentlemen.

Actually, in following up on this question, the CDC and the global folks have basically made a decision on the multi-strains that they are going to put into the vaccine.

I just wanted to clarify, and I'm pretty sure I know the answer, but I wanted to make sure I ask it of you.

The strains that they have identified, basically you have shown that you have efficacy towards those strains.

Is that an accurate statement, and you are comfortable in terms of if it should be a situation where see under-vaccination take place, you are pretty comfortable with the results you have seen so far in dealing with the strains that they have put together for the current vaccine season; is that correct?

That is correct.

And the way you do these sorts of things, lab tests of sensitivity and end up with IC50 values, and there is ongoing World Health Organization and CDC testing of clinical isolates all the time.

And that accumulating data indicates we have very broad applicability of Peramivir across all sorts of different flu strains, including H5N1 bird flu, influenza A strains, influenza B strains.

You will recall that there are certain mutations that confer change in sensitivity, and at the moment that seems to be not prevalent.

So, the influenza strains that are going into the vaccine we have no problem with.

With regard to vaccine public health, the public health authorities have been sort of frustrated year-over-year-over-year by the low vaccine uptake rates, and I think there was a report the other day that they are now moving to recommendations for universal vaccination in the United States.

But the likelihood that there will be universal vaccination is very, very low, because historically people just haven't done it.

I'll follow up on that, because it's -- vaccination policies are different in different countries, and the acceptance is different.

Yes.

So, in theory, I mean, this is one of those situations where we could see a low vaccination rate, and we could see a spread where even though it's not a very, very serious as the viruses go, it's not a very serious flu season, you could still wind up with a situation where even if it isn't serious, you could have sufficient numbers just given the fact that there might be low vaccination rates that are out there.

And that you would be called into test your product based on the fact that fewer people would have responded just by the fact that there isn't that kind of visibility.

That would also be an accurate statement, wouldn't it?

I think that there is, by and large, vaccination rates in the areas where we do our studies have been hard to get -- public authorities struggle to get them high, and we are not viewing the vaccination campaigns as a barrier to completing our studies.

Okay, great.

Let me hop back in the queue.

Good luck with this flu season, gentlemen.

Thanks.

Thank you.

Our next question is a follow-up from Yigal Nochomovitz from Rodman & Renshaw.

I did have one additional question on Peramivir.

I have in my notes here that there are plans to initiate a study in pediatric patients with the Division of Microbiology and Infectious Disease and NIAID.

Is that still accurate, and if so, what would be the timing of starting that study?

That is still accurate, and the study did not get up in time for the pandemic, so that -- the NIAID are the sponsors of that study, not BioCryst, and we are collaborating with them on that study.

So, it essentially hasn't happened yet.

Okay, thank you.

Thank you.

Our next question comes from the line of Michael Murphy from New World Investor.

Hi.

You mentioned again additional studies to provide further evidence of the efficacy of Peramivir, and I wonder, does that mean minding the EUA data or submitting Shionogi data, or something else?

So, thanks for the question.

So, with regard to EUA data, there are two impediments to using that as proof of efficacy.

The first impediment is that it is uncontrolled and the people that are getting Peramivir under emergency use authorization conditions are people who have failed everything else and are critically ill and in intensive care.

So, there is technically what is called a treatment by indication bias already built in.

So, these people are destined to do poorly even if the drug is working well.

So, it is hard to interpret the data, in other words, because it is uncontrolled.

That is the first thing.

The second thing is, the government wanted to make Peramivir easily available, not more difficult, and so the reporting requirements for the EUA to the government were minimal, and we have no access to that information.

But in any case, it's not a clinical trial situation.

With regard to Shionogi, that is very important data and with all drug applications we submit all of the data from around the world that addresses the safety and efficacy of the drug.

And the completed placebo-controlled trial that was positive in uncomplicated influenza is a very important study.

And so your question around the discussions we are having are really what additional work could we do in discussions with FDA and HHS around getting this thing across the finish line?

Okay.

And with HHS, say, Peramivir was very successful and you got some doctors now calling to report to be first line therapy in the ICU.

Do you have any insight as to why the EUA was cancelled?

So, I don't have any special insight except to say that the declaration of emergency is viewed as a temporary event, and it has an expiration date.

The flu came and went and the government allowed the expiration date to move forward without renewing the emergency.

Yes, but I think where you are going, Michael, is that each flu season there are a lot of people that end up in the hospital even without an emergency, and that is just why it is so important that we get these studies done as quickly as we can get the drug filed and get it approved.

So, that is our laser focus.

Yes.

Well, do you have some insight into what the process would be to get the EUA reinstated, if it turns out that there is a lot of H1N1 around during the coming up season?

Would it be a simple regulatory announcement, or does it require going through a whole process again, or a data review of the use in the last flu season?

Since it has never happened before, I want to be careful not to describe it.

But I would hope that it would be a lot simpler this go-around given that FDA and CDC and BARDA are much more knowledgeable about all the information we have.

They have used it, they have been through the process, so I would hope it would be much more around the fact that if an emergency was declared and the need was defined, that it would be a much faster process.

But, again, I can't -- we have never been there before, so I can't predict that.

Gotcha.

Thank you very much.

You're welcome.

Thank you.

I show no further questions in the queue, and I would like to turn the conference back to the speakers for closing remarks.

Yes.

So, again, thank you for the number of questions and the great participation today.

As we said earlier, there are a number of important data events that will be coming this year, so we look forward as the remainder of the year unfolds to sharing that information as we get it.

And, as always, thanks for your interest in BioCryst.

Have a good day.

Ladies and gentlemen, thank you for your participation in today's conference.

This does conclude the program and you may all disconnect at this time.