BioCryst Pharmaceuticals Inc (BCRX) 2010 Q3 法說會逐字稿

Good day, and welcome to today's BioCryst Third Quarter 2010 Conference Call. Today's call is being recorded.

At this time for opening remarks and introduction, I'll turn the call over to Mr. Robert Bennett. Please go ahead, sir.

Thank you. Good morning, and welcome to BioCryst third 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 will 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 of BioCryst; Dr. William Sheridan, our Chief Medical Officer; and Stuart Grant, Chief Financial Officer.

Before we begin, I'll read a formal statement, as shown on slide two, 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 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.

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

Thanks, Rob. Good morning, and thanks to everyone for joining us today. Since our last quarterly update, peramivir has received two regulatory approvals and we continue to advance our pipeline by successfully executing our clinical programs, culminating in important results from three of our clinical trials. We reported on these results at our Investor Day on September 16. Of course, product approvals are an important measure of our progress.

In August, peramivir was approved in a second country, Korea, under the trade name PeramiFlu through the diligent effort of our partner, Green Cross. And just yesterday, Shionogi announced expansion of its current label for RAPIACTA to include pediatric patients. This is important because, as Shionogi has indicated to us, pediatric treatment represents 70% of courses of antiviral flu treatment administered in Japan, that's 70%. Both Shionogi and Green Cross are prepared to meet demand in their respective markets during this flu season.

In the U.S., discussions with FDA and HHS have led to agreement on the Phase 3 development program that includes an additional efficacy study. This is a positive outcome because the new study improves the chances of regulatory success. We have submitted a contract modification to HHS/BARDA to cover the costs of the additional study.

Our current planning assumption is to launch i.v. peramivir in the U.S. for the 2012-2013 flu season. Of course, the actual timing of filing and any approval could be affected by the severity and prevalence of influenza and its impact on the enrollment and the results of the Phase 3 study.

Switching now to BCX4208, as we moved quickly in the 12 months since we initiated our gout development program, completing two Phase 2 studies demonstrating the dose dependent efficacy of BCX4208 in gout patients, when used as a single agent or in combination with allopurinol.

We are pleased that the lowest BCX4208 dose of 20 milligrams combined with the standard 300-milligram dose of allopurinol doubled the response rate compared to 300-milligram allopurinol alone. We plan to report results from the first study at ACR on November 8. In early 2011, we expect to initiate a 12-week add-on study in patients who are not adequately responding to allopurinol alone.

A month ago, BioCryst hosted its first ever Investor Day providing a deeper strategic review of the Company, the development pipeline and discovery engine, as well as our business and financial strategies to achieve sustainability. We also shared our selection of BCX4161 for preclinical development as a potential novel treatment for hereditary angioedema.

BioCryst is well positioned to create additional shareholder value in the short and long term. I encourage anyone who is interested in learning more about the Company to visit the slides and webcast archive available in the IR section of our website under Events & Presentations.

Now, I'd like to turn it over to Stuart to cover our financials.

Thanks, Jon. Good morning. Revenues for the third quarter of $12 million and $45.7 million year-to-date are both ahead of the same period last year. This year-to-date increase is due to additional HHS development funding for peramivir, as well as a $7 million milestone payment from Shionogi and $6.4 million in collaboration revenues from the sale of peramivir API to Shionogi and Green Cross both reported in Q1 of this year.

R&D expenses for the third quarter increased by $1 million to $19.2 million compared to last year. This was driven by spending on the 4208 gout trials. This increase was partially offset by lower costs for forodesine development, as the CTCL and CLL studies wrap up, as well as lower peramivir development expenses. Last year's quarter did include some non-HHS reimbursed expenses related to the EUA preparedness.

G&A expenses were higher, mainly due to consulting fees and process optimization projects. And our net loss of $10.9 million was modestly higher than the same quarter last year.

Our use of cash during the third quarter was $9.1 million and $22.2 million for the first nine months of 2010. We ended the quarter with $72 million of cash and cash equivalents on the balance sheet.

During the August 2010 quarterly update, we projected 2010 cash use to be within, but at the high end of its previous guidance range of $25 million to $30 million. Initiation of the modified Phase 3 program for peramivir will lead to a ramp up in development expenses during Q4 of this year. This creates a timing effect on our 2010 cash use, as these expenses will be reimbursed by the government during the first quarter of 2011. As a result, we now expect our cash use for 2010 to be approximately $33 million. Again, I stress that's a timing impact on 2010.

To maximize the efficiency and flexibility of our organization for the future, we are moving a number of positions from Birmingham to consolidate certain functions in North Carolina. Birmingham will remain our discovery center of excellence and RTP is now the corporate headquarters and location of functions critical to clinical development and business execution. These changes will provide cost avoidance and improved efficiency in the longer term.

Now, our Chief Medical Officer, Bill Sheridan, will provide a development program update.

Thanks, Stuart. As Jon mentioned, BioCryst reported clinical results from three different studies during September. Since we undertook a very thorough review of these study results at our Investor Day, I will summarize the key takeaways today and refer you to the slides and webcast archive on our website for the details.

Let's start with the positive results of the BCX4208 gout combination study, the second study in our 4208 Phase 2 program, which is summarized on slide five. The 202 study utilized a factorial design, 16 different treatment groups evaluating three different doses of BCX4208 or BCX4208 placebo administered once daily for 21 days of monotherapy or in combination with three different doses of allopurinol or allopurinol placebo. This study clearly demonstrated that in addition of both PNP with both 4208 and xanthine oxidase with allopurinol provides additive or synergistic effects in reducing uric acid in gout patients.

As slide seven shows, in five of the non-combination studied, 80% or more of the subjects reached the serum uric acid goal of less than 6 milligrams per deciliter at day 22. 40% of patients treated with 300 milligrams of allopurinol alone achieved goal, which is consistent with results seen in actual treatment practice.

Treatment with the lowest BCX4208 dose alone, 20 milligrams, resulted in no patients achieving goal. But the combination of this low dose of BCX4208 with the most commonly prescribed allopurinol dose of 300 milligrams resulted in 80% of patients achieving goal. It's encouraging to see the smallest dose of BCX4208 has the potential to double the response rate.

BCX4208, in combination with allopurinol, was generally safe and well tolerated. Based on these study results, the principal focus of that BCX4208 program will be adding a low dose to BCX4208 to allopurinol for patients who are not reaching target with allopurinol alone.

We are currently finalizing plans for our add-on Phase 2b gout study 203. This study will evaluate the effect of adding various doses of BCX4208 for placebo to current allopurinol treatment in gout patients who are not adequately responding to allopurinol alone.

Patients will receive allopurinol plus BCX4208 or allopurinol plus placebo for 12 weeks and the primary endpoint will be the percent of patients reaching 6 milligrams -- less than 6 milligrams per deciliter serum urate after 12 weeks. Our goal is to start this study in early 2011 and to complete it later in the year. As shown on slide 12, we also plan to initiate a long-term safety study in 2011, once the required animal safety studies are completed.

We also reported results from two forodesine studies. In the pivotal CTCL study, 11% of the 111 late-stage patients achieved a positive response. The response rate observed in the study population most likely reflects the impact of heavy pre-treatment with multiple prior lines of therapy in this study compared to prior studies.

In the exploratory Phase 2 study in 25 patients with refractory or relapsing CLL, an interim analysis has confirmed three positive responses with several patients still on treatment. This is an encouraging outcome in this patient population and we look forward to concluding the CLL study later this year and reporting final results.

Our peramivir development program remains on track and is moving forward. We have recently presented new clinical data for peramivir at the ICAAC and IDSA meetings, including drug-drug interaction studies, a thorough QTc study needed for NDA filing, and an integrated safety analysis focused on lymphopenia and neutropenia.

These analyses showed no effect of peramivir on these blood cell subsets. A subgroup analysis from our Phase 2 hospitalized influenza study, which included 32 influenza B infected patients, showed that treatment with peramivir resulted in significantly faster reduction of viral replication and showed a trend to more rapid normalization of time to resumption of usual activities compared to oral oseltamivir treatment.

As Jon mentioned, based on consultation with HHS and FDA, a third Phase 3 study of influenza has been added to the program for licensure of peramivir i.v.

The original plan undertaken last September consisted of the efficacy study 301 and safety study 303 in hospitalized influenza patients. We are now concluding the 303 study and increasing the number of investigator sites for the efficacy study 301 in order to accelerate enrollment. We are currently activating sites for study 304, which will be a placebo-controlled trial evaluating a single dose of 600 milligrams peramivir i.v. versus placebo in patients with uncomplicated influenza in the outpatient setting.

This addition now gives us two different studies with a potential to demonstrate peramivir's efficacy to add to the existing successful placebo-controlled trial completed by our partner Shionogi. i.v. peramivir is the most studied drug in hospitalized setting for influenza.

That concludes my update on our clinical programs.

Thanks, Bill. In closing, we remain focused on clinical execution and delivering against our milestones and commitments. To date, we've met all of our clinical and business milestones and have a clear set of goals for the remainder of 2010 and 2011. Results from our first BCX4208 Phase 2 gout study will be presented at ACR in early November. We will also report final results from the forodesine CLL study before year-end. In 2011, our focus will be on completion of the peramivir Phase 3 studies and the BCX4208 allopurinol add-on Phase 2b study.

With that, we will take your questions.

Thank you. (Operator Instructions) Our first question comes from Charles Duncan of JMP Securities.

Hey guys. Thanks for taking my question, and congratulations on the recent data. I had a couple of questions. I'm going to start with what I see as the primary value driver, 4208 right now. I'm wondering if you could give us some additional insight on the next study, in terms of timelines to data I think you said in 2011 and also what types of patients will you have in that study?

Hi, Charles, it's Bill. I'll take the question. The type of patients in the study will be gout patients who are on allopurinol at 300 milligrams and have a serum urate that has not achieved goal of less than 6 milligrams per deciliter. So that's a bit of a different patient population compared to the first two Phase 2 studies, which had patients off therapy with serum urate of greater than or equal to 8 milligrams per deciliter.

With regard to the timeline, the patient enrollment will begin in early 2011. There is a 12-week exposure and then some follow-up in this study. The sample size will be between 200 and 300 subjects. So it's a substantially bigger study than the first two were individually. And we expect to complete that study and be able to report out the results in 2011.

And, Charles, I would just add to those comments that this next study is really the patient population in the setting that we believe the drug will be used. There are I think what 40% of the patients, Bill, that are successfully treated at 300 milligrams of allopurinol. So we think that's a large patient population and given the results of our combination study, we're encouraged that a low dose added to that will get patients to goal.

And the low dose, I mean give me your perspective on the low dose versus the other, the doses with the other activity. Does that afford you perhaps a broader therapeutic window view or how do you feel about the primary activity that was seen originally with the drug and its impact on the lymphocytes?

So, yes, we do believe that using lower doses gives us more of an opportunity to thread the needle if you like, and have appropriate safety of this drug. So far we have not seen any clinical consequences of the lymphocyte effects of BCX4208. The clinical safety of the drug has been fine.

Obviously, with PNP inhibitors, as you increase the doses, you will see more of an effect on lymphocytes. So we want to be able to have a chronic oral daily dose and that's for chronic therapy that has only a mild effect on lymphocytes and an adequate efficacy. And so, we believe that the results from study 202 point the way to how to use the drug.

Charles, our sense from talking to the key opinion leaders is that these people that are on 300 milligrams that haven't gotten the goal need a nudge to get them to goal. And so, we believe that the low dose could be that nudge to get them there.

And that nudge is going to result in chronic dosing or a dosing that's measured in months, what's your sense for that?

So I think the -- the current landscape for gout treatment is unfortunately not really the standard of care that patients need, so many gout patients are off therapy and they only had serum urate-lowering therapies for a short time. And what these people need is very, very long-term lifelong. Once they have been identified as a candidate who needs a urate-lowering therapy, they need long-term chronic treatment and that's what we're shooting for.

And that brings me to the long-term safety study. Can you give us some sense as to what you're planning on doing on this?

Yes. I think that'll be also an exciting study. Once our animal safety program matures early next year, we'll be able to start enrollment in our long-term exposure study. The details of the design we're currently working on. But the notion here is to recruit patients with gout and have them take BCX4208 most likely in combination with allopurinol daily and stay on study for as long as possible. And as the months and the years go by, we'll accumulate very important safety information.

And I think that's an important study, Charles, from the standpoint of we'll be able to get longer-term readouts beyond three months, maybe as early as the end of next year.

Okay. That'll be good to see. I think that'll address a key point of debate. Two other housekeeping items with regard to the other programs. With regard to peramivir, do you have any sense on the timing of being able to complete the discussions with HHS? And is there any, I'll call it point of leverage or a thing that could drive resolution to that in the near term?

We're encouraged by the discussions, Charles. The current contract, as you know, is for $180 million. If you look at the Q filings from Q2 and extrapolate that towards Q3, we're probably about 140-ish into that. The government have re-programmed some of the money that's in the 178 will allow us to start work on the two Phase 3 programs.

So we are encouraged by the fact that they've funded the startup of that activity. They know that we are running towards the end of the current contracts and we'll be there relatively soon. So I think the leverage is that they want us to start the Phase 3 work, they know that we're running out of money on the existing contract, and our expectation is that they will act sooner rather than later to extend that contract. So I think we characterize those discussions as positive at this stage.

And then with regard to the government's interest in this program, do you believe that was really driven by the pandemic flu or is there a belief and appreciation of the unmet medical needs for flu generally?

Yes. So I think the primary driver is for stockpiling by the government, but I would say that the unique aspects of this drug in particular and then i.v. antiviral is that they get a 2-for-1, because as we know there is a decent number of people that end up in the hospital each year, each flu season. And so, the ability to treat those patients, as well as be prepared for a pandemic is, I think, a good option for the government.

Final question is on forodesine, I'm glad that I saw some stuff in the press release with regard to that, its legacy program if you need to see you outlicense that or something. Just to clarify, though, do you plan to spend any more money on that program or is that one that you think will be done on someone else's nickel?

So, Charles, as you noted in the press release we said that to move forodesine and the backup PNP program board in cancer, we are exploring the interest of a partner. At this point in time, we've got a wrap-up on the CLL study because we still have patients and we'll report out the final result, as we said, later this year. But that's about it in terms of our investment in the program and we're looking for an interested party to move the program forward beyond that.

For the added color and taking that question.

Thanks, Charles.

Thank you. Our next question comes from -- excuse if I pronounce this wrong -- Yigal Nochomovitz of Rodman & Renshaw.

Good morning, gentlemen. Yes, that was a good pronunciation. So, Jon, you mentioned that the monotherapy data will be at ACR. Could you just give us a sense beyond the topline data, which we've already seen in terms of the solid dose response in serum uric acids and baseline, as well as the portion of subjects achieving goal, what additional data will we be looking forward to in this ACR presentation?

Yes, hi Yigal, it's Bill. So the protocol had several other secondary endpoints such as proportion of less than five and less than four, and we had a fairly detailed characterization of the various flow cytometric lymphocyte subsets that we'll be showing on the poster.

Okay, very good. And in terms of the longer-term animal talks that you mentioned, what exactly is the status there and is everything going according to plan in terms of what you're expecting with that study?

Yes, we don't anticipate any problems whatsoever; it's just a matter of finishing it and getting the reports and having that data, so that we can have longer than three months administration in humans.

Okay. And I know the focus clearly is on combination with allopurinol, but I was wondering and I imagine you've given some thought to this. In terms of other future combination studies, for example, within another xanthine oxidase inhibitors such as febuxostat, additionally, a potential combination study with the uricosuric. What are your thoughts there as far as how that may happen in the future?

I think that they're very good studies to do and they could be part of the NDA package depending on the needs of the partners that we attract to the program. We can anticipate because of the mechanism of action being unique with PNP in addition and that is a data that we already have with one xanthine oxidase inhibitor in combination.

It's a pretty solid prediction that we'll be able to show similar effects with febuxostat, for example. And one could anticipate that with probenecid or other uricosuric agents that there would also be antiviral synergistic activity. So I think that they would be quite useful in the NDA and you could imagine them being done as drug-drug interaction studies, in fact.

Very good. Thanks. And then turning to peramivir, Jon, you mentioned at the beginning of the call that there's approximately 70% of antiviral usage in the pediatric setting in Japan. Could you just give us a sense as to how that breaks down in terms of hospitalized versus non-hospitalized, as well as i.v. versus oral in Japan?

Yes. Up until peramivir was available, there wasn't any i.v. available.

Okay.

So it's difficult because the way they treat in Japan is very different than the way they treat in the U.S. They try to keep people out of the hospital. So if you recall back the tougher patients that they studied, there was a small number when they finished their Phase 3. They talked about more than one day of dosing rather than a hospital study that had five days of dosing. So it's likely to be added days. I can't tell you off the top of my head how many of those patients versus ones that would get a single dose.

Okay, got it. And then in terms of the royalties from Shionogi, I'm imagining that the flu season hasn't really picked up yet in Japan and therefore we haven't seen any for the last reporting period, is that fair?

That's correct. Our expectation is that the bulk of that's going to come in Q1 of our calendar year, maybe a little bit in Q4, but there was nothing in the period we just reported.

Yes, I think what's important to take away with Shionogi is they finished their Phase 3. They quickly got approval, almost in record time in Japan. And had the drug, some drug ready to go, but since then they've been able to get a very large drug supply in place. They've got their marketing activities all ready to go and now they have the label that they need to adequately promote. So all we need now is flu.

Got it. And then just quickly on the forodesine, maybe I missed this, but for the CTCL study, are we going to see the final data by the end of the year or is that not on the cards?

The topline data does represent the final analysis of the study.

Oh, okay. So that's the last we'll see from that?

So I think that we'll work with our investigators to determine a publication plan for this study.

Okay. And then briefly under the new program in hereditary angioedema, I know it's very new and you just looking at lead molecules identified one already. Could you give us a sense as to when we may see some initial oral bioavailability from that new program?

As you say, it's early days and for a drug like that there are a number of different approaches that you have to complete and research before to starting what to take into IND, so that parent compound is obviously identified. And the usual pharmaceutical things have to be done. We haven't made a decision yet as to the next step in terms of public disclosure, but at the right time we will write the appropriate research paper and get it published.

Yes, I think there is the main point to take away from that as well, it's preclinical molecule. One of the reasons we selected it is, it's in a -- could fit a very high unmet medical need with a unique approach and secondly could be a mid-term driver for us and most of these preclinical things are very, very long term, but this one could go a bit faster.

So, to be a bit more specific to answer your question, I would hope that we'll be able to have a publication next year with a detailed description of this program and its scientific bases.

Great. Thank you very much, and good luck with the coming quarter.

Thank you.

Thank you. Our next question comes from Bret Holley of Oppenheimer.

Yes. Hi, thanks. Got a couple of questions. I'm curious about the response, I guess the comment you made earlier about a number of gout patients or some healthy majority of gout patients having intermittent dosing. And I'm wondering what is your view on why that is, is it primarily because of lack of tolerance or lack of efficacy and how might 4208 change that?

Yes, I think my comment was that a lot of patients go on and then they stop, perhaps I was as specific enough in my comment. But a large number of gout patients will get put on a urate-lowering therapy. Many of them won't get prophylaxis with naproxen or colchicines, which they need when starting a urate-lowering therapy, a gout attack will happen.

They'll wonder why am I taking this pill, I'm getting gout and then they'll stop taking the pill. So, compliance with urate-lowering therapies and prescription of urate-lowering therapies is not very good in this country at least. So, there's a big need for education, so -- the field has been asleep for 40 years from the pharma perspective, it's now waking up and it's a great opportunity with marketing of new drugs in gout to improve the general knowledge in the community about how to appropriately manage urate-lowering therapy.

Okay. So it sounds like with approval of new agents, you think it's just awareness of the proper treatment paradigm will evolve rather than 4208 will, some kind of a step change in (inaudible)?

I think there are several steps. And number one is, as you say, awareness of the appropriate treatment paradigm, number two is the value of measuring serum urate in people with gout. At one point that was in the chemistry panel and it no longer is in routine screening, but in patients with gout for sure, there's value in measuring the serum urate in order to determine whether patients are achieving their target over time. And number three is education around the need for add-on therapy in patients who are not achieving their target. So you can imagine those three steps being quite important to the appropriate use of add-on therapies.

And the last point is important because with lower doses you see less side effects, which is also a cause of people going off drugs.

Okay. And then a question on peramivir, on your launch timeline of 2012-2013 for the flu season in that in 2012, what does that assume of the intervening severity of the flu seasons and relative to your enrollment?

We take a number of sites and patients per site statistics that we're hoping to achieve on an average of historical experience of flu seasons over the last few years. So it's not based solely on the pandemic obviously, that would be too optimistic. So, well, the things that are in our control are study startup and site activation activities and they're going quite well. And so we anticipate being fully ready for the flu season. The thing that's not under our control is the incidence and geographical spread and nature of the flu. So we'll have to see what that does.

Okay.

So based on our experience from previous studies and the number of sites that we have, we believe that we can finish this in the timeframe that we've stated.

Okay. Thanks a lot.

Thank you. Our next question comes from Joseph Schwartz of Leerink Swann.

Thank you. I was wondering, first of all, if you could give us some insight into the number of sites that you're hoping to have in the next peramivir outpatient study, as well as what design considerations you've included to help the odds there?

Without being exact, it's approximately 300 sites in the outpatient uncomplicated study and approximately a grand total of 380 sites combined between the efficacy study and the study we are wrapping up into the hospitals.

Okay. Great. And what makes you more confident in this trial's design. What have you learned from --?

Okay. Thanks for the question. The settings for influenza are very different and their regulatory history and success rate in studying uncomplicated influenza is there. So the endpoints are being well developed, placebo-controlled trials are perfectly ethical in uncomplicated influenza and we already have one placebo-controlled trial that's completed that had strongly positive results in the primary endpoint and all the secondary endpoints for the study. So, that's the -- that type of design in that type of patient population is showing positive efficacy results.

Which endpoint is it in particular that's easier for this setting, or is it just what the patients are easier to impact?

I wouldn't describe any endpoint in influenza as being easy. But the endpoint is time to alleviation of symptoms, if the patient reported outcome based on the resolution of all of the -- all of the symptoms of influenza to mild or absent compared to when the patient entered the study.

It means they're one aspect of that endpoint that's less difficult to impact or --?

Well, I think it's better understood because it's been studied a lot.

All right.

It's not that there is one element that's better or otherwise, it's just that it's a well-understood phenomenon and it's been successful, as I've indicated.

Yes, okay. Good. And one more question then on peramivir before I move to the gout program. What do you think explains the minimal level of Japanese revenue? Did they -- is it attributable primarily to the lack of a pediatric indication or is it flu season timing or both issues, what should we expect there going forward?

So remember they got approved at the end of January and if you look at the surveillance data of flu in Japan that corresponded with the ending of the flu season, so they really didn't have a shot at any kind of a flu season and the flu has not come back yet. So -- we're approaching the winter in Japan and we expect that it will come back as it normally does.

Okay. And for 4208, could you tell us what the average baseline level of urate was in the study since that would seem to influence the ability to get below 6 milligrams per deciliter where you start?

In published analyses, you're correct, the baseline serum uric acid is an important baseline variable affecting response. And the average in the studies was around about 9.6 to 10 range.

Okay. And what is your sense of the general level of interest in the gout space from potential partners these days? Given I'm asking just because of recent developments or a lack of developments with avian?

Yes, I think that's a very different setting than what we're looking at. That is treatment of people with severe gout and tophi and it's a biologic that sounds like requires a pretty hefty price. And so I think you got to separate that very differently from the other drugs that you're looking at for chronic treatment.

Our sense is that there's a decent interest rate now in the space because, as Bill says, there hasn't been a new drug in a long time. The population is growing at a rapid rate and a lot of people aren't controlled and the combination of all of that makes for an interesting market.

Maybe one more question on your program then is, how low did patients get or what was the average reduction in urate levels in the combination study that you're reporting today?

If you refer to slide eight in the deck from the webcast today, you can see the main reductions from baseline on day 22. So with placebo that's almost nothing at 0.3. And then at the -- if we take the 20 milligram BCX4208, dose ranges from minus 0.7 to minus 4.3 when it's combined with 300 milligrams of allopurinol.

So do you know at what level it might be necessary to get to in order to see tophi reduction? How far are you from that level, I know it's not how you're positioning the drug obviously?

That is not -- you're correct. That's not how we're positioning the drug. I think that just in general, all reductions in serum urate below the solubility limits will help to dissolve tophis instantly because of the mass effect and simple chemistry. And the lower you go then the greater the rate of dissolution goes the notion, which is borne out from some of the data published in clinical trials, but that's not where we're positioning the drug.

Okay, great. Thanks for the added information.

Thanks you.

Thank you. (Operator Instructions) Our next question comes from Steve Brozak of WBB Securities.

Hi. Thanks, gents, for taking the question. I just want to differentiate one thing because a lot of people seem to be having a problem understanding flu and how it work. Obviously, with oseltamivir and everything else that was going on prior to PanFlu coming up, there was a situation where it was pretty much a famine and then all of a sudden it became a situation where there wasn't enough drug, you couldn't get enough drug, you couldn't basically meet the demand, and there were problems.

You basically are prepared so that if and unfortunately when something should happen. And after you start to see the positive therapeutic results that you're expecting, you would be able to meet that kind of a demand at an appropriate interval. Is that a correct assessment, and after that I've got one follow-up question.

Steve, it all depends on what that demand is. So I think unlike most companies at this stage in their development, we went through an emergency use authorization and we have 130,000 courses, I'd believe still remaining that we manufactured some time last year with decent stability. Is that the right number?

Yes, I mean we've got courses on the shelf. It's probably close to 120,000 given we supplied some to the government. But we have finished product on the shelf with good stability that has a lot of product. We also have a manufacturing capacity available to us. We have active principal available to us that we can come out and fill it quickly. So I think you're characterizing our availability to supply the market appropriately.

And you're also talking about the situation where versus people just taking a pill, this is a product that right now is designed for a more clinical setting. So it'd be a more controlled setting right now. So that would also enable you to have greater control of what you're doing and also greater coordination with the government. Is that also an appropriate and a fair statement?

But I think one of the key advantages of having an i.v. is that it's administered by the healthcare professional and they know that the dose is getting in. So, with anything that's taken orally, compliance is a real problem, especially when it's given twice a day over multiple days. So I think you're correct in stating that the control over delivery of the drug is much greater with an i.v. and that's an advantage with peramivir.

And lastly, in terms of this -- in the beautiful part of -- or unfortunately in the beautiful part about PanFlu or flu is that it doesn't really respect any border, so you'd be dealing with a lot of different government agencies across the world. But those are all things that you basically have in the preparation and the infrastructure to start to deal with. Is that correct, also?

Yes. We've got partners that we've communicated about with regard to stockpiling. And if for some reason, the emergency came back, we would be in a position to reach out to various governments and address their needs.

Great. I wish you luck unfortunately in this environment that we live in. And I look forward to hearing good news next quarter. Thank you.

Thank you, Steve.

Thank you. We have a follow up question from the Mr. Nochomovitz's line.

Yes, hi. Just real quickly, there was one other study that I have on my list here, wondering there was a pediatric study being run by the NIAID. Has that study commenced for peramivir?

No, it has not.

Okay. So is that planned for commencement in the near future?

That's really up to the NIAID and their collaborators.

Okay.

But there's two ways that we can enroll pediatric patients. One is, through our Phase 3 program and the other is through this trial.

Got it. And just to confirm on the baseline serum uric acid of 9.6 to 10, that was asked by a previous caller, that was for the combination study, is that correct?

I think across both studies, that's approximately the baseline.

Across both monotherapy and combination?

And combination, yes.

Okay, thank you.

Thank you. I'm showing no further questions at this time. I'd like to turn the conference back to the speakers for closing remarks.

Yes. Just want to thank everybody again for their interest in BioCryst and we look forward to continuing to update you with our progress. Thank you. Have a good day.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may all now disconnect. Thank you, and have a nice day.