BioCryst Pharmaceuticals Inc (BCRX) 2011 Q2 法說會逐字稿

Good day, and welcome to today's BioCryst's Second Quarter 2011 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, Executive Director of Investor Relations and Communication. Please go ahead, sir.

Great. Thank you. Good morning and welcome to BioCryst's second quarter 2011 corporate update and financial results conference call. Today's press release and accompanying slides for this call are available on our website at www.biocryst.com. Please note the press release and slides on our website have been updated within the last hour to reflect a favorable correction of $1.1 million to the net operating cash use for both the recent quarter and year-to-date. No other changes were made to the release.

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 are today on the call are Jon Stonehouse, Chief Executive Officer of BioCryst, Bill Sheridan, our Chief Medical Officer, and Tom Staab, Chief Financial Officer.

Before I begin, I will read a formal statement as shown on slide 2 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 you find on our Company website. With that, I will turn the call over to Jon.

Thank you, Rob. Good morning, and thanks to everyone for joining us today. During the past quarter we continued to make meaningful progress in advancing our pipeline while maintaining our financial strength and flexibility to allow us to move closer to important potential value-creating events.

Since our last quarterly call in early May, our team has focused most of its energy on the continued execution of our BCX4208 and PERAMIVIR clinical programs, advancing our clinical studies towards conclusion.

There remains a high unmet medical need in the gout population as over half of the patients taking the most commonly prescribed drug, allopurinol, failed to reach the treatment goal of serum uric acid concentration below 6 milligrams per deciliter. We believe that by adding BCX4208 to other urate-lowering therapies, we can reach this large and more accessible market, helping patients reach their treatment goal.

The detailed BCX4208 Phase II results presented in May at ULAR indicate that BCX4208 has a safe and effective profile following short-term dosing as add-on therapy in gout patients who have failed allopurinol. The enhanced Phase II gout clinical program we announced in May is designed to give us a better long-term view of the safety and efficacy of BCX4208 in a larger patient population and to identify the potential differentiating factors that could make it an attractive treatment option.

We have achieved full enrollment for the Phase IIb add-on study evaluating 4 doses of BCX4208 in over 250 gout patients who did not adequately respond to allopurinol alone, and we look forward to sharing top line 12-week results early in the fourth quarter.

Bill will discuss the extension phase of this study and the overall BCX4208 clinical program shortly, including two recently initiated studies. The results from these ongoing studies will be used to get input from regulators during the end of Phase II discussions that will lead to the design of our Phase III program and to advance discussions with potential partners.

During the first half of the year we have taken several steps to maintain our financial strength and flexibility. Our $72 million cash position exceeds our year-end 2010 balance and represents a two-year runway. We will continue to carefully make investments in the programs of highest priority and those that have the greatest potential to create value.

Recently we added two distinguished individuals who have extensive experience in biotechnology and finance. Ken Lee was appointed to our board of directors in June. Ken has over 35 years of experience advising many pharmaceutical and biotech companies, as managing director of the Health Science Group for a leading accounting and consulting firm. He has served on numerous biotech boards over the years and currently serves on the boards of Maxygen and Pozen, and he is a general partner with Hatteras Venture Partners.

Tom Staab joined BioCryst as CFO on July 1. He possesses over a decade of CFO experience in the biotech industry. Most recently as CFO and treasurer of Inspire Pharmaceuticals until Inspire's acquisition by Merck & Company in May of this year. Tom brings strong skills and experience in financial stewardship of publicly-traded companies, development and commercialization of pharmaceutical products, and in raising funds through strategic partnerships, equity and debt financing. With that introduction, I'll turn the call over to Tom for review of our financial results.

Thank you, Jon, and good morning, everyone. I am pleased to be participating in my first quarterly call here at BioCryst, and I look forward to interacting with BioCryst investors and analysts, many of whom our paths have crossed before.

I also want to thank Stuart Grant for leaving the organization in a solid financial condition. As a guiding principle, we will continue to invest our cash wisely by minimizing nonessential spending and focusing our financial resources on advancing the most promising development programs in our portfolio.

Onto our results, starting off with R&D expenses, as shown on slide 5. Second quarter 2011 R&D expenses were $14 million, down from last year's level of $14.7 million. The mix of 2011 R&D expenses has changed significantly as compared to 2010.

Due to the completion of various trials during 2010, second quarter 2011 PERAMIVIR and FORODESINE development program costs decreased by approximately half and totaled $3 million. The completed trials include the PERAMIVIR Phase III safety study 303, as well as the FORODESINE pivotal CTCL and exploratory CLL Phase II studies. Meanwhile, BCX4208, R&D expenses doubled to $4.9 million.

R&D expenses for the first half of 2011 decreased to $26.9 million from $39.7 million in 2010. Last year's six-month results included expenses for the three completed trials I just mentioned, as well as a $6.3 million of PERAMIVIR API manufacturing costs for partners Shionogi and Green Cross incurred during the first quarter of 2010. Both of these items explain the relatively large decrease in R&D expense in the first half of 2011 as compared to 2010.

Moving on to revenue, which is largely a function of our PERAMIVIR development initiatives, second quarter 2011 revenues decreased to $3.7 million compared to $7.6 million for the second quarter of 2010, due to the lower PERAMIVIR collaboration revenue from HHS following the completion of the PERAMIVIR Phase III safety study.

In regards to the first half of 2011, total revenues were $9.2 million as collaborative revenue associated with PERAMIVIR decreased by approximately $10 million during the first half of 2011, compared to the same period last year. First half 2010 revenue of $33.7 million also included a $7 million milestone payment from the Company's partner, Shionogi, and the sale of $6.4 million of PERAMIVIR API to both Shionogi and Green Cross.

In addition, during the second quarter 2011, we received a royalty payment of approximately $800,000 from Shionogi related to Rapiacta sales in the first quarter of 2011. We have not, however, recognized this payment into revenue and do not intend to do so until after we and Shionogi have sufficient information to judge potential product return volume, which will allow us to adjust quarterly revenue appropriately.

One light flu season of experience is not sufficient to determine future uptake and the return flow, so we have decided to defer revenue recognition on these sales. We believe this methodology to be both a conservative and prudent approach.

Accordingly, this cash receipt has been recorded into restricted cash as it will ultimately be used to pay off our interest and principal obligations associated with our royalty monetization.

As we move to G&A costs, you will note the second quarter G&A costs increased to $4 million from $3.2 million last year, primarily due to costs associated with the relocation of BioCryst's corporate headquarters and higher third-party professional expenses. These same drivers explain the first half 2011 G&A cost increase to $8 million from $7 million last year.

As we have now completed our relocation, we do not expect to incur future expenses for this initiative, and we would expect G&A expenses to revert back to a more typical level in the future.

The royalty monetization transaction added nondilutive cash to our balance sheet that we are investing in programs with the goal of accelerating value creation. During the second quarter of 2011, as a result of this transaction, we have recognized interest expense of $1.2 million and mark-to-market losses of $1 million associated with our currency hedge derivative.

For the first half of 2011, interest expense totaled $1.5 million, and payment thereof in 2011 will be funded through the established $3 million interest reserve established at that transaction. The mark-to-market losses for the first half of 2011 totaled $2.3 million due to the strengthening of the Japanese yen against the dollar, requiring the Company to post collateral against this potential obligation. Given the nature of the arrangement, the collateral obligation could reverse in future periods if the dollar strengthens as compared to the yen.

Moving on to slide 6, you will notice at June 30, 2011, we had $72 million of cash and investments, an increase of $5.6 million from December 31, 2010. This increase is associated with our royalty monetization transaction completed in the first quarter of this year, offset by our six-month operating cash utilization and by cash posted as collateral associated with our hedge obligation to this transaction.

As expected, operating cash utilization was lower at $3.7 million for the second quarter compared to the first quarter of 2011, largely due to the expected second quarter receipt of $4.8 million for indirect cost rate adjustments from HHS for the years 2007 through 2009. Operating cash for the first half 2011 of $14.9 million excludes approximately $2.5 million of cash used as collateral for our potential hedge obligations related to the royalty transaction as described in more detail in our Form 10-K filing. We have excluded this collateral from our operating cash utilization as it does not relate to normal operations.

In regards to the remainder of the year, we foresee somewhat higher spending on clinical programs during the second half of 2011 as compared to the first half, reflecting the impact of the incremental R&D investment primarily in our BCX4208 gout program, and BCX5191 hepatitis C development program announced in May of this year. However, we are keeping our outlook for operating cash usage for 2011 unchanged at approximately $35 million.

Now, I'd like to turn the call over to our Chief Medical Officer, Bill Sheridan, who will provide an update on our development programs. Bill?

Thanks, Tom. I will now provide updates regarding PERAMIVIR and BCX4208 gout programs, including a brief recap of the data and conclusions reported at EULAR.

There remains a high unmet medical need for an intravenous antiviral for seriously ill patients hospitalized with influenza as evident by HHS/BARDA's commitment of up to $234.8 million to fund the PERAMIVIR clinical program. The Phase III study of IV PERAMIVIR in patients hospitalized with influenza continues to enroll.

As noted in our press release, we have initiated a concentrated effort in India to assist in completing the recruitment of at least 160 non-neuraminidase inhibitor-exposed patients as needed for the study's primary efficacy analysis.

We are pleased with the progress thus far. Early enrollment indicates that we are seeing a high proportion of non-neuraminidase inhibitor-exposed patients in this treatment population compared to previous seasons. After the upcoming northern hemisphere flu season, we will be able to give updated projections on the timing at study completion.

At EULAR, two BCX4208 posters were presented, one detailed the results from the Phase II study of BCX4208 in combination with allopurinol in patients off urate-lowering therapy whose serum uric acid was above 8 milligrams per deciliter. The other reported results from a pooled safety analysis of our two Phase IIa studies, both of which had similar patient populations included.

Both of these completed Phase IIa studies enrolled patients and administered drug for three weeks, and EULAR posters and a replay of the call that we hosted at the meeting are available on our corporate website, and you may refer to those for more details.

The key conclusions from the posters were as follows. First, synergistic mean reductions in serum uric acid were observed with BCX4208 plus allopurinol versus either drug alone, and up to 100% of patients reached serum uric acid goal of less than 6 milligrams per deciliter with a combination treatment.

Second, in an analysis of peripheral blood lymphocyte counts based on grade change from baseline, very few patients experienced grade 2 or 3 changes. No clinical impact in the reduction of lymphocytes was observed, and the rate of infections was similar between BCX4208 and placebo, with no opportunistic infections reported.

Third, there were pharmacokinetic interactions between BCX4208 and either allopurinol or its active metabolite, oxypurinol.

The efficacy, safety and PK analyses helped inform the dose selection for the fully enrolled ongoing add-on Phase IIb study. As Jon mentioned earlier, we anticipate sharing top line 12-week results from the primary efficacy analysis for this study early in the fourth quarter.

The Phase IIb Study 203 has been amended to extend treatment duration, and patients are currently enrolling into a six-month extension. We are planning another extension to 12 months of treatment to be implemented soon. We anticipate reporting six-month data in early 2012.

Patients who have been in the study for at least four months are also eligible to participate in an ongoing vaccine challenge substudy which has been implemented to understanding immunomodulatory effects of BCX4208. And as part of the study, two vaccines, Pneumovax and a tetanus toxoid booster are administered, and we measure antibody responses to evaluate immune function.

Because a significant portion of patients with gout suffer from reduced kidney function, we are also undertaking a Phase II study in approximately 40 gout patients with moderate renal impairment to understand the proper dosing and safety of BCX4208 in a subset of patients.

Furthermore, many gout patients take other medications for comorbid illnesses, so it is desirable to have a new treatment option that does not interfere with these other drugs. We are completing a formal study of the absorption, distribution, metabolism and excretion of BCX4208 in normal subjects to confirm our preclinical findings that BCX4208 is not metabolized and is excreted unchanged.

And lastly, we are continuing to make progress in advancing both our late stage preclinical projects. We believe that BCX4161, a potent inhibitor of kallikrein could potentially revolutionize current treatment by offering a daily oral administration of a safe and efficacious prophylactic drug for hereditary angioedema.

In addition, BCX5191, a nucleoside analogue RNA polymerase inhibitor offers the potential for once-daily treatment option for patients with hepatitis C. There is a clear need for polymerase inhibitors in this illness, and we believe 5191 is a high quality candidate. For both of these projects, our goal is to submit R&D filings through the second half of 2012.

With that, we will take your questions.

Thank you. (Operator Instructions) And our first question comes from Charles Duncan with JMP Securities.

Hi, guys. Thanks for taking my question and congratulations on a good quarter of progress. I had a couple of questions on 4208. I'm wondering if perhaps you could lay out a little bit more the logic in some of the data flow that you anticipate in the next, call it 12 weeks in 12 months in 4208, and if you think that will inform well a Phase III strategy.

Hi, Charles, it's Bill. Thanks for the question. So, the dataflow will begin with the 12-week primary analysis for the study, according to the original protocol of the statistical analysis plan. We anticipate that in early fourth quarter this year. And in the fourth quarter we also will have the results of the PK ADME study that I mentioned.

The next piece of data will be a combination of the six-month follow-up for those patients who rolled over, and also the vaccine responses, and we anticipate that in early 2012, along with the results of our moderate renal impairment study. So, the major study here is 203. It has over 250 patients enrolled. It is now fully enrolled and we were quite pleased with the pace of enrollment there, so that's what really driving most of this dataflow.

Another thing I'd add Charles, is that we said back at the last call that we were adding an additional $5 million to our spend, or burn, and a big chunk of that is to enhance this program. And so the collective data we think will be a very solid package to take to our end of Phase II meetings with regulators and then ultimately to enhance and continue discussions with potential partners.

Yes. It would seem to me that the renal impairment study, as well as the drug-drug interaction study could be a key differentiator in the market.

Yes. So, one of the things that we made a conscious decision to invest in is not only just kind of basic safety and efficacy data, but also data that would differentiate BCX4208 from either drugs that are on the market or molecules that are currently under development. And we think that drug-drug interactions is a potential problem in this space, especially given that a lot of these gout patients are on statins and blood pressure medications. The last thing a doc wants to do is change that medication or dose because they're putting them on a urate-lowering drug. And then the renal function, it's a big chunk of the gout population, and so understanding the dosing, understanding safety and efficacy is critically important as well.

And then with regard to the commercial strategy, Jon, you mentioned that data will be of interest to strategic partners. Have you had any interaction with potential collaborators and would you see collaboration occurring before Phase III?

So, we have had discussions, but I would call them very preliminary. You could imagine that both we at BioCryst and potential partners are really eager to see this data package that is coming out starting early fourth quarter and leading into the early part of 2012. And certainly assuming positive data would have an impact on value. And so our view and our intentions are to find a partner. I would say it would be easier to find a global partner, but we are also equally interested in regional partnerships as well, and getting the best value for the molecule.

So, the plan is to have everything ready to go, right, the input from regulators, the design of the Phase III program, clear understanding of the markets in each of the major territories, and then depending on how the partnership settles out, we are ready to go into Phase III.

Okay, that makes sense. And can I ask one quick question on PERAMIVIR? Sorry for taking so much time. But with regard to enrollment, it sounds like things are going well. I'm wondering if you believe that it's a result of anything you folks have done with regard to adding sites or is it that natural flu situation?

And then secondarily I believe you mentioned a higher proportion of non-neuraminidase patients. Can you give us a sense of what that proportion is?

It's the majority, to answer the last question. I think you can't have patients on study unless you have sites open, so -- number one; and, number two, the disease has to be prevalent. So, no, we can control the former, we can't control the latter. So, it's an average, I guess, looking season so far. And in India there is a monsoonal period of the year for the southwest and center of the country, and a more northern hemisphere winter season in the northern part of the country, so that is another reason to go to that subcontinent.

So, I think at the moment we remain pleased. We can't really predict an end to the study with any more confidence right now. And, as Tom said before, we'll have a better idea about that after the northern hemisphere season coming up.

Thanks for the added color, Bill and Jon.

Thank you. Our next question comes from Yigal Nochomovitz with Rodman & Renshaw.

Good morning, gentlemen, and thank you for taking the question. If I could start with the gout program. Could you give us a sense regarding the 12-month study, the Phase IIb, how many of those patients have now rolled over into the six-month extension? And, additionally, have you observed any kind of correlation between the interest in rolling over and the dose of BCX4208 that was administered in the three-month study?

Hi, Yigal, thanks for the question. So, to answer the last part first, we're blinded. We will remain blinded until the primary analysis gives us that sort of information. So, we don't have any insight into that part of the question. The majority of patients we were able to capture in the rollover into the currently implemented extension, and we will know more about the full extension to 12 months as we implement that in the next few months.

So, we've been quite pleased with the -- obviously, you have to have another informed consent form and go through that process again for this type of an amendment, and we have been pleased with that.

Okay, got it. Now, on the vaccine challenge study, when are these patients receiving this vaccine challenge? Is it during the three-month treatment period or only once they roll over to the extension?

No, it's only in the extension, because we wanted to have a good few months of exposure to our study drug before administering the vaccine, so the plan there is to administer -- is to take a blood sample, administer the vaccines in about month 4, and measure subsequent antibody titer in about month 5, so you have a before and after antibody titer.

And, again, as you say, since it's blinded we won't be able to know which cohorts received the vaccine until the unblinding.

No, but the patients -- neither the patients nor the investigators nor BioCryst know the treatment assignment, and the study is going ahead as planned and we expect that we will have a distribution of patients across all of the cohorts.

Okay, thanks. Now, on the renal study, if you could maybe go into a little bit more detail. Are these patients that are unable to control their serum uric acid at the 300 milligram allopurinol, and what doses of BCX4208 are being evaluated in this renal study?

So, we will try to answer the first question. This is a broad patient population similar to the Phase IIa studies, and it is really focused on figuring out the dosing of BCX4208. And I forget what the second part of your question was now.

Just are these patients able to control their uric acid at 300 milligrams of allopurinol?

No, we're not using the allopurinol failure population here.

I see. Okay, understood. Now, turning to PERAMIVIR briefly, you mentioned India has two flu seasons, so to speak. Are there any other reasons that you have specifically chosen to focus on India?

The most important one was that the usual medical practice there for hospitalized influenza does not include administration of neuraminidase inhibitors, and you recall that this is a randomized controlled study where patients are randomized to whatever the standard of care is plus placebo versus the standard of care plus PERAMIVIR. And the primary analysis population for efficacy is the subset of patients in the study who do not have neuraminidase inhibitors as a standard of care. So, that was an important reason to go to India.

I got it. Now, just on the pipeline for the HAE asset, could you provide any updates regarding the progress of developing an oral formulation for that molecule? I understand you had a lead candidate but there may be some optimization required to improve the oral bioavailability.

We are still in that process and we're -- in terms of focus and prioritization, we have the resources to work in a priority way on both of their preclinical projects, and we --clearly, we won't be filing INDs on two things the same day, but we do have a goal of filing INDs the latter half of next year. So, we haven't finished our experiment (inaudible), but we're making good progress.

Okay, thanks. And, Tom, you mentioned some rate adjustments from HHS of $4.8 million in the second quarter. Is that the entirety of the rate adjustments, or could there be additional ones in the upcoming quarters?

Yes. That's exactly right. There was a rate adjustment receipt for 2007 through 2009 in the second quarter, and there is some outstanding rate adjustments that may come in the latter part of this year.

Yigal, remember that when we announced the amendment, I guess it was in February of this year, one of the things that we did in the negotiations with HHS/BARDA was agree on the rate going forward and also on being paid for the rate adjustments from previous periods.

Okay, got it. And, Jon, could you -- I think Tom mentioned briefly, but could you just provide some overall guidance for R&D going forward? I assume it's going to be increasing throughout the second half of the year and then into 2012?

Yes. So, clearly our programs are progressing, right, so R&D expenses are going to continue to be meaningful. With PERAMIVIR, the R&D expenses are covered by the HHS contract, so hopefully revenue -- if expense goes up, revenue will increase as well.

And then beyond that, I said in my prepared remarks that the cash that we have now will support us for another two years. So, that's assuming roughly that the burn -- and, again, we're not giving any guidance for 2012 -- but the burn stays roughly constant going forward.

And generally as you're guiding to R&D expense, remember that in May we announced we were going to spend an additional $5 million, and as Jon and Bill have mentioned in comments, that is primarily associated with the gout program. So, given the fact that we approved that $5 million spend in May, you would think that would occur in the second half of the year. And so I'm not expecting huge impact excluding the PERAMIVIR, but that is sort of the tone of the comment.

Okay. And then just one final question on the PERAMIVIR enrollment. Should we be expecting some sort of update as far as a more concrete sense of when that study could end sometime in the first half of 2012, once the northern hemisphere study is finished?

Yes, I think that's a reasonable expectation.

Okay, very good. Thank you very much and good luck with the continued progress.

Thank you, Yigal.

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

Thanks. Most questions have been answered, but I was wondering if you could give us a sense of what baseline serum uric acid you would expect in the Phase IIb patients that didn't respond to allopurinol alone?

That's a very interesting question. So, I think the baseline serum uric acid, when subjects are off allopurinol and we have an entry criterion of having uric acid of more than 8, was pretty close to 10 milligrams per deciliter. And with 300 milligrams of allopurinol alone, in research that we've done in sort of chart reviews and the like, we have seen that people who fail end up being mostly within 1 to 2 milligrams of target.

So, I think on the basis of that type of information, you could expect that the baseline serum uric acid on allopurinol alone and allopurinol failure patients would be somewhere in that range. The target is 6, so add 1 to 2 to that and that's probably the range we're going to see in terms of a (inaudible).

Okay. And then what sort of a decrease do you expect from the drug, then, in your powering assumptions?

So, we powered the study to show us an increase of at least 30% in a proportion of subjects achieving goal, and we've got the appropriate number of patients at 80% power, typical for a Phase II study. We haven't -- this is the first time we've treated patients who failed allopurinol, so I don't want to guess at what we are going to see with that different dose of BCX4208. That is the objective of the research.

And we're testing two new doses, too. We haven't looked at 10 or 5 before.

Right, okay. And I know you're studying moderate renal impairment patients now with gout. What's the definition that you're using for moderate renal impairment, and would you then take it any further and go into more severe renal impairment since -- I guess, actually, I'd be interested in what your impression is of how many gout patient that would cover?

So, that's a -- I think that question is not fully defined in terms of the exact distribution of renal function in patients with gout in the community. Estimates vary from low percentages up to about 25% or 35%, which seems high to me, for people with gout to have that much moderate renal impairment. And there is an organization called the US Renal Data Systems, which collects a lot of information on renal impairment and failure in this country, and they don't even talk about gout in their publications. So, I think that it's not triangulating on a single number. We'll have a much better sense of moderate renal impairment after we have recruited the study.

In terms of severe renal impairment, we do not plan to do a study there. It's a very -- it appears to be a very, very small proportion of gout patients.

Okay. Thanks very much.

Thank you. Our next question comes from Steve Burn of Bank of America.

Hi. Just continuing on the renal impairment study, is this a combo study or monotherapy, 4208?

It's designed similarly to the current study.

With the 4 doses of 4208?

So, the difference is that in people with moderate renal impairment, you need to cut the dose of allopurinol down according to the label. So, we're doing that and we're studying 5 milligrams and 10 milligrams of BCX4208 on top of that.

Okay. At a lower dose of allopurinol.

Yes.

Okay. And then is the ADME study using a radiolabeled 4208 or how are you doing that?

That's the way they're done. You are correct.

Okay. And can you comment on the design of the drug-drug interaction analysis?

That study is not a drug-drug interaction study, so it's designed to establish whether or not in humans there is any evidence of metabolism of the drug and the handling pathways in terms of urine rate and fecal excretion and so on.

Right. I'm sorry, Bill, I didn't mean to imply they were the same. I mean, as a separate analysis, how are you assessing them?

Oh, okay. Okay, thanks for the clarification. So, we already have a good body of preclinical data that we intend to round out and conform with the international consortium on drug transporters' recommendations for evaluation of potential for drug-drug interactions. And this is regulators and experts in the field collaborated to put out essentially guidance for industry around how to approach this issue. And when you step through studying all the drug transporters that they recommend in laboratory studies, if all of that is negative, then really there is no indication to do clinical drug-drug interaction studies for regulatory purposes.

So, we're tidying up that information in the next few months. We've done a lot of it already and have had negative findings on, for instance, hepatic CYP 450 enzymes and OAT1 and OAT2 transporters.

Okay. And then on the PERAMIVIR study, can you comment specifically on how many of the targeted additional sites, this 45 additional sites you're targeting, do you now have online? And how many of those have standard of care that does not include a neuraminidase inhibitor?

So, the vast majority of them are up and running. The survey, the preliminary surveys that we did indicated that the standard of care did not include neuraminidase inhibitors.

Okay. So, say, greater than 25 are currently enrolling, that if you picked up -- what would that be, half a dozen or so patients in each one, you could hit your target.

That would be an unrealistic expectation, I'm afraid, because hospitalized influenza just isn't that common compared to community influenza. And you have to have a large number of sites, which is what we have, in order to get a relatively slow number of patients accrued.

So, a key learning that we had, because we've studied around the globe for many, many seasons now, and flu shows up in pockets in a country, right? So, just because you have, let's say 40, 45 sites up doesn't mean that all 40, 45 are enrolling when flu hits. It might be that 6 to 10 of them are enrolling. But we cast a broad net because we can't predict where flu is going to be. And we have the support of HHS in that strategy and, of course, their financial backing as well. So, we feel real confident.

I guess the message I'm trying to get across to you is the guidance we've given on completion of the study is at the end of the northern hemisphere flu season in 2013, nothing -- it's way too early for us to change that guidance based on what we see, and so people should stick to that as the timing of the completion of the study right now. And it was built on, I would say, a realistic expectation that there would be some mild flu seasons in the course of those years.

Okay. Understood. Thank you.

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

Yes, thanks for taking the question. I'm wondering about the 12-month data for 4208. Is that going to be a gating factor potentially for the start of Phase III? How should we think about that?

Sorry, certainly not would be our point of view. It's actually quite unusual to have 12-month safety data in a Phase IIb program, and so it would not be a regulatory expectation to have such data.

Okay. And then I guess -- I mean, I guess then for -- I guess I'm struggling with the reason, then, to actually do that. I mean, obviously it is informative data, very informative data. Is it more than for a partner, then, or how should I think about that?

I think it has a couple of different benefits from the development perspective, and I'll hand it over to Jon to deal with your partnership question. It's helpful when you have the opportunity to roll patients over, if you can do it, because it sets up the opportunity to then have an open label extension ultimately, and continue patients on drug through filing the NDA. And so if that comes about, then you've got people on drug for several years at the time you're answering questions about safety and negotiating a label. So, it sets up an opportunity, is the way I would characterize it from the benefit from the development perspective. And I'll let Jon deal with the other part.

Yes. And if you recall from the last earnings call, when we talked about the additional investment that we were making in the program, we said a lot of it came from key opinion leaders, immunologists, other thought leaders, and input from potential partners. And so having been a person in a big pharmaceutical company that was doing in-licensing, one of the key elements in in-licensing is how much risk is associated with this program. The more risk you remove, the more interest you get in the molecule and the better value you ultimately get. So, I think the 6-month and 12-month data plays that purpose.

I think the other piece that is really important that a lot of companies don't do is to start to thin, you know, how is this thing going to get reimbursed in the marketplace, right, compared to existing molecules that are -- existing drugs that are approved and others that are under-developed. And so we have spent a good bit of time thinking through, okay, what's going to cause a payer to reimburse 4208 over other things that are available? And so things like the drug-drug interaction or the ADME study, renal impairment, those kinds of things are also very important, we think, in making this an attractive (inaudible).

Well, it's good that you think about reimbursement today for sure. Thanks for answering the questions.

Thank you, ladies and gentlemen. (Operator Instructions) At this time I am showing no further questions. I would like to turn the call back over to Mr. Jon Stonehouse for closing remarks.

Thanks. So, I just want to wrap up the call by reminding you of the milestones that we are certainly looking forward to. So, again, in early fourth quarter we will report out the 12-week results from the BCX4208 Phase IIb add-on study in patients who have not reached goal on allopurinol alone. Then completion of the administrative study in late 2011; six-month safety data for BCX4208, as well as the vaccine challenge outcome in early 2012, and complete the moderate renal impairment study in early 2012. So, it's going to be a busy remainder of this year and the beginning of next year, and we look forward to sharing information as it becomes available to us.

So, with that, I'll thank you and, as always, thanks for your interest in BioCryst. Have a good day.

Ladies and gentlemen, thank you for our participation in today's conference. This concludes the program. You may now disconnect. Have a great day.