BioCryst Pharmaceuticals Inc (BCRX) 2014 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the BioCryst fourth-quarter 2014 conference call.

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

Later, we will have a question-and-answer session, and instructions will follow at that time.

(Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to turn the call over to Mr. Robert Bennett, Vice President of Investor Relations and Operations.

Please go ahead.

Good morning, and welcome to BioCryst's fourth-quarter and full-year 2014 corporate update and financial results conference call.

Today's press release and accompanying slides for this call are available on our website at 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; Tom Staab, Chief Financial Officer; Bill Sheridan, Chief Medical Officer; and Lynne Powell, our Chief Commercial 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; audited, unaudited and forward-looking financial information of Company performance or achievements.

These statements are subject to known and unknown results and uncertainties, which may cause our actual results, performance or achievements to be materially different from any future results, performance expressed or implied in this presentation.

You should not place undue reliance on the forward-looking statements.

For additional information or the important risk factors, please refer to the BioCryst documents with the SEC, which can be found 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.

Over the last couple of years, our strategy has been to build BioCryst into the rare disease oral drug company using our structure-based drug design platform.

We are making progress with this strategy.

First, we have advanced the development of potent and selective oral kallikrein inhibitors for the treatment of hereditary angioedema attacks.

These have the potential to bring normalcy to the lives of HAE patients and transform the treatment of HAE.

In addition, our research team in Birmingham, Alabama is working on two other interesting rare disease discovery programs that are intended to refill our pipeline, as our oral kallikrein inhibitors progress toward the market.

BioCryst is a rare disease company that also has antiviral assets that uniquely add value to our company.

Rapivab for influenza and BCX4430, our broad spectrum antivirals being developed for Ebola virus, have been developed utilizing US government funding.

In both cases, our business goal is to use cash from future stock government stockpiling to reduce our cost of capital and fund the advancement of our HAE and other rare disease programs.

As I mentioned, our strategy is to transform the treatment of HAE.

We plan to do that in two steps.

The first step is bringing BCX4161 to market as the first oral kallikrein inhibitor for the prophylactic treatment of HAE attacks.

We are currently enrolling patients in the 12-week OPuS-2 clinical trial, and we plan to report results from OPuS-2 by year-end.

In parallel, we are making formulation improvements to reduce the daily capsule count, and working to complete development and file an NDA for 4161 in 2017.

The second step is to develop a second-generation oral kallikrein inhibitor with a profile that could wipe out HAE attacks with one pill once a day.

This would be a game-changer.

While this program is at an earlier stage, our most advanced molecule, BCX7353, has an encouraging nonclinical profile that Bill will explain in more detail.

Our goal this year is to start a Phase I trial with 7353 in the second quarter, and report out the results in the third quarter.

In order to retain maximum value, we plan to commercialize our oral kallikrein inhibitors ourselves, so we recently hired an experienced rare disease commercial leader in Lynne Powell from CSL Behring.

Lynne will craft our worldwide commercial plan and build out a world-class commercial team to launch our oral HAE drugs.

On December 19, BioCryst received FDA approval of Rapivab, a first US approval of a BioCryst-discovered molecule.

We also achieved our goal of making Rapivab available during the 2014/2015 flu season by moving product into the supply chain within days.

With the flu season winding down, our next priority with Rapivab is to secure a procurement contract with the government by year-end.

If we are successful, this contract would provide non-dilutive capital to extend our cash runway to get to additional value-creating events.

Before the end of 2014, we also reported the completion of a BCX4430 proof of concept study in nonhuman primates infected with Ebola virus, as well as the initiation of Phase I testing of 4430 in healthy volunteers.

The US government continues to support this program.

Most recently, our partner NIAID exercised another option of $2.7 million under the developed development contract that currently funds this program through completion of Phase I.

I'll now turn the call over to Bill, who will discuss our development programs in more detail.

Thanks, Jon.

Good morning.

I'm pleased to report that OPuS-2 site activations, subject screening, and enrollment are proceeding as planned in the United States, as are Regulatory and Ethics Committee approvals in several European countries.

The majority of planned sites are now open in the US.

Although clinical studies in orphan disease indications are always challenging, enrollment pattern is meeting our expectation and we are on track to report results by the end of the year.

As a reminder, OPuS-2 is a randomized placebo-controlled trial of 12 weeks' duration.

Three dose levels of 4161 are being tested against placebo in OPuS-2; 300 milligrams three times a day, and 500 milligrams three times a day.

The 4161 dosage form in this study is a liquid formulation in softgel capsules.

On the basis of a relative bioavailability study that we conducted, we expect drug exposure levels for 500 milligrams three times a day to be similar to those previously seen at 400 milligrams three times a day, with the earlier liquid formulation of this drug in hard gel capsules.

We've seen very good results from the ongoing formulation and drug product development program for 4161.

And near-term goal in formulation development is to increase the drug content per capsule from 100 milligrams to at least 167 milligrams.

We also are pleased that additional analyses of the results of our proof of concept study of OPuS-1 have been selected for presentation at the upcoming QUAD AI Conference in Houston, Texas.

Dr. [Emil Agrienpursuant] from University Hospital Frankfurt will present a poster on February 23 that further explores the relationship between 4161 drug levels, pharmacodynamic effects and clinical benefit.

Despite a small sample size of 24 subjects, these analyses support associations between drug levels and both degree of enzyme inhibition and clinical benefit.

Dr. Marcus Magill from Charite University Hospital Berlin will deliver an oral presentation on February 24 that details the improvement in quality of life and reduction in disease burden during 4161 treatment, and explores the benefits of this drug in different anatomical sites of attacks.

Although there was only four weeks of 4161 treatment in OPuS-1, disease burden was reduced, and patient quality of life improved.

We've had several questions about what to expect with regard to the outcomes of OPuS-2.

The study has been designed conservatively, and is powered at 90% to show a treatment effect similar in magnitude to that observed in OPuS-1, where the baseline attack rate was about 1.3 per week.

However, there is a good biological rationale to anticipate the results could, in fact, be better than those seen in OPuS-1, as studies moved to patient populations with a lower baseline attack rate.

The goal of therapy in this disease is to restore normal plasma levels of kallikrein inhibitory activity.

There are many examples of treating to target in medicine.

For instance, treatment of hypertension, where physicians seek to achieve a target level of systolic and diastolic blood pressure.

In that disease, it is much easier to treat someone with mildly elevated blood pressure than it is to treat someone with very high blood pressure, and benefit from a single antihypertensive drug is proportionally more in patients starting closer to goal.

A similar relationship can be hypothesized for hereditary angioedema patients with regard to the benefit of administration of a fixed dose of a kallikrein inhibitor.

For example, expert HA physicians have noted that 1,000 international units of C1 inhibitor twice-weekly has provided proportionally better results in patients whose baseline attack rate is low, compared to those enrolled in a pivotal study for that drug, who had baseline attack rates of one per week.

The explanation offered for these granted unproportional benefit in patients with low versus high attack rates is that the natural endogenous C1 inhibitor level is higher in patients with less frequent attacks.

They have more gas in the tank, and a standard dose will boost a higher proportion of those patients into the effective therapeutic range.

It is easier to fill the tank when it is half-full compared to when it is empty.

These concepts are illustrated on slide 7. The take-home point is that the same absolute increase in total kallikrein inhibitory activity would give proportionally better efficacy in subjects who, on average, have lower compared to higher baseline attack rates.

Turning to the second-generation kallikrein inhibitor program, as Jon noted, we are preparing to advance our lead of second-generation candidate, BCX7353, into clinical studies.

Of the two compounds that were advanced through nonclinical development, 7353 showed a clearly superior PK profile.

In other respects, these two compounds showed generally similar characteristics, so we have decided to advance only 7353 at this time.

Slide 8 summarizes the nonclinical PK and PK/PD profile of 7353.

The results are presented as posed in a drug concentration divided by the amount needed of 50% inhibition of kallikrein enzyme activity in a contact activation assay in normal human plasma.

This allows us to also make comparisons to similar data for 4161.

The panel on the left shows results in rats on day 28 of the early dosing at various dosing levels measured through 96 hours after administration.

The panel on the right shows results in nonhuman primates, and comparative results of 4161 in a similar study in NHP and in the Phase I clinical study.

Profile for 7353 indicates that it has substantially longer half-life compared to 4161.

Its maintenance drug level is likely sufficient for efficacy in HAE patients -- the entire 24-hour dosing interval.

It is evident that 7353 has superior nonclinical PK profile compared to 4161 and has the potential for effective once-daily dosing in the clinic.

We expect to start the Phase I study of 7353 in the second quarter and report results in the third quarter.

Finally, a brief update on 4430.

As you may recall, this nucleoside analog is the only small molecule drug that has shown efficacy in nonhuman primate model for either Ebola virus disease or Marburg virus disease, and the only drug of any type to have shown efficacy in both filovirus disease models in NHP.

The Phase I safety study in healthy subjects is progressing through the planned dose cohorts.

And at this stage, we anticipate completion in the third quarter.

We look forward to further discussions with our US government agency partners on how best to make progress in the development of 4430, and hope to secure funding this year for advanced development activity.

Tom will now review the financial results.

Thank you, Bill, and good morning.

Today I will summarize our fourth-quarter and full-year 2014 financial results, as well as share our 2015 guidance.

At the end of 2012, we established a guiding principle for our operations that we continue to follow today.

This principle was to focus our cash resources on the advancement of our core development programs through value-creating milestones, and to prudently manage expense.

Following our successful $107 million capital raise, I am pleased to report our balance sheet is in a strong position and that we remain disciplined in deploying our cash.

We closed 2014 with an extremely strong fourth quarter, hitting a number of value-creating milestones in our HAE portfolio, and achieving a significant corporate milestone with the FDA's approval of Rapivab.

We achieved all of these milestones while finishing at the lower end of our operating expense range, and below our forecasted cash utilization range.

We are very pleased to have hit some important value-creating milestones, as Jon described, yet do so with strong financial discipline.

On slide 10, you will notice that revenue for the fourth quarter of 2014 decreased to $5.4 million as compared to $10.6 million in 2013.

This decrease was solely related to a reduction in collaborative revenue from our BARDA HHS peramivir development contract, which expired in June 2014.

A loss of HHS BARDA collaborative revenue was partially offset by a significant increase in 2014 NIAID collaborative revenue associated with a BCX4430 contract awarded in September 2013.

Our fourth-quarter 2014 revenue also included Rapivab commercial sales of $33,000, representing the first US revenue from a BioCryst-developed product.

After receiving approval of Rapivab on December 19, we were very pleased to have the product stocked at special distributors, with the ability to deliver Rapivab to patients beginning on December 26, 2014.

From an accounting perspective, we have elected to record Rapivab revenue under a sellthrough revenue recognition method, which means we record revenue when our specialty distributors ship product out to hospitals and physician offices, rather than earlier in the revenue cycle when we sell Rapivab to our specialty distributors.

Thus, the $33,000 of product sales represents shipments of Rapivab to hospitals in the last four business days of December.

The more conservative sellthrough methodology creates a $5.6 million deferred revenue amount, which approximates our product sales receivable as represented in our press release.

The deferred revenue amount is the difference in Rapivab sales to specialty distributors by the Company, and sales from our distributors to hospitals and physician offices.

With the approval and availability of Rapivab, we will now move our focus to obtaining a stockpiling procurement contract with the US government to realize the strategic value of this program.

Fourth-quarter 2014 R&D expenses were $18.5 million, up 20% from $15.5 million in the fourth quarter of 2013.

This increase was primarily associated with higher development costs associated with our HAE and BCX4430 programs, and to a more limited extent, non-cash equity compensation associated with vesting of performance-based stock options allocated to development.

This increase was partially offset by a large decrease in 2014 parameter development expenses.

In the fourth quarter of 2013, there was a significant amount of peramivir activity and development expense leading up to, and associated with, the filing of the peramivir NDA.

Fourth-quarter 2014 G&A expenses were $2 million, an increase of 44% from the $1.4 million incurred in the fourth quarter of 2013.

This increase was primarily due to the vesting of performance-based stock-option expenses allocated to G&A, as well as Rapivab distribution expenses incurred in advance of its approval.

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Moving below the operating line, we incurred $1.3 million of interest expense in the fourth quarter of 2014 and $1.2 million of interest expense in the fourth quarter of 2013.

In addition, we recorded a mark-to-market hedge gain of approximately $4.8 million in the fourth quarter of 2014 and a $2.1 million gain in the fourth quarter of 2013.

These gains related to the fluctuation in the Japanese yen, US dollar exchange rate.

Both interest expense and the hedge mark-to-market gains relate to our nonrecourse notes and hedge arrangement, and acted in conjunction with our Rapivab royalty monetization.

Turning now to the bottom line, we incurred a net loss of $11.7 million or $0.16 per share in the fourth quarter of 2014, as compared to a $5.4 million loss or $0.09 per share incurred in the fourth quarter of 2013.

The increase in our net loss results primarily from a decrease in total revenues and an increase in total operating expenses in the fourth quarter of 2014 as compared to 2013.

Our full-year financial results are summarized on slide 11.

Revenue for the 12 months ended December 31, 2014 decreased to $13.6 million as compared to $17.3 million in 2013.

This decrease was solely related to a reduction in collaborative revenue from our BARDA HHS peramivir development contract, which expired in June 2014, and was offset somewhat by an increase in reimbursed 4430 activity under our NIAID contract.

2014 R&D expenses were $51.8 million, up 23% from $41.9 million in 2013.

This increase resulted from much higher levels of development costs in our HAE and BCX4430 programs, as well as an increase in 2014 equity-based compensation allocated to R&D associated with the vesting and related achievement of two milestones under performance-based stock options.

These increases were partially offset by much lower peramivir development costs associated with the expiration of BARDA HHS peramivir development contract, as well as a one-time $5 million non-cash write-off of a deferred collaboration cost asset in 2013 associated with our PNP licensing agreement.

2014 G&A cost increased 24% to $7.5 million from $6 million in 2013.

This increase resulted from Rapivab distribution expenses and unrestricted grants awarded to the US and international HAE patient advocacy groups, as well as increased equity compensation expenses allocated to G&A associated with performance-based stock-option milestone vesting, as mentioned previously.

Dropping below the operating line, we incurred $5 million of interest expense in 2014 and $4.8 million in 2013, and recorded a mark-to-market hedge gain of $5.5 million in 2014 as compared to a gain of $5.3 million in 2013.

In regards to the bottom line for the year, our 2014 net loss was $45.2 million or $0.68 per share as compared to a $30.1 million or $0.55 per share incurred in 2013.

On slide 12, we have summarized our actual performance against our 2014 financial guidance, and have also provided our 2015 outlook.

As discussed in my introductory remarks, we are very pleased with our 2014 financial discipline and performance.

We came in at the low end of our operating expense range with $49.2 million of operating expenses after deducting $10.2 million of equity-based compensation expense, as compared to our range of $48 million to $59 million, and operating cash use of $33.3 million, which was below the low-end of our guided range of $35 million to $43 million.

At December 31, 2014, we had cash and investments of $114 million, which reflects proceeds from our successful public equity offering as compared to $40.8 million of cash and investments at December 31, 2013.

Looking ahead to fiscal 2015, we anticipate operating cash utilization to be in the range of $65 million to $80 million, and operating expenses to be in the range of $75 million to $95 million.

Drilling down into some detail, the projected increase in operating expense is largely attributable to a significant increase in direct program expenses, and to a more limited extent, an increase in G&A expenses.

We expect to see a significant increase in R&D expenses, largely due to the advancement of our HAE programs related to BCX4161, BCX7353, as well as the continued progression of other second-generation compounds in earlier development.

We expect approximately 75% of our total R&D expenses to be dedicated to our HAE program.

In addition, we expect 4430 to be at a slightly increased level from 2014 actual activity as that compound progresses through Phase I and completes all available options under the $29.1 million NIAID contract.

Predominantly all of our 2015 4430 expenses are expected to be reimbursed under the existing NIAID contract.

However, our guidance does not take into account any award of any advanced development contract in 2015 to continue 4430 development beyond Phase I.

Finally, we will also be funding a pediatric program for peramivir, for which expenses will begin in 2015.

In regards to 2015 G&A expenses, we expect the annual 2015 run rate to increase slightly over the fourth-quarter 2014 annualized rate.

Lastly, and consistent with our 2014 guidance and actual amounts, we continue to specifically exclude equity-based compensation expense from our operating expense guidance, due to the difficulty in accurately projecting this expense.

Equity-based compensation is excluded from our range, as it is a non-cash charge, and because stock price volatility and the potential vesting of performance-based stock options, make this expense difficult to predict.

Now I'd like to turn the presentation back over to Jon for his closing remarks.

Thank you, Tom.

In closing, we're making good progress in building our oral drug rare disease company.

Looking ahead from here, the most important events are completion of the preclinical work on 7353 and initiation of the Phase I study in the second quarter; reporting out the results of 7353 Phase I in the third-quarter; completion and reporting out the results of OPuS-2 by year-end; secure advanced development funding for 4430 in the second half of this year; initiation of the second-gen HAE Phase II proof of concept study before year-end; and last, but not least, obtain US government procurement contract for Rapivab before year-end.

We look forward to providing you with further updates as we reach these important milestones.

And that concludes our prepared remarks.

We'll now open up the call to your questions.

Thanks.

(Operator Instructions) Jessica Fye, JPMorgan.

Two quick questions.

First, for 7353, can you talk in a little more detail about where we are in preclinical development, and what you're seeing from a safety standpoint thus far?

Basically, is there much preclinical work you have left to do at this point?

Or should we feel pretty confident you'll be advancing into Phase I?

And then, second, you've talked about how enrolling patients with potentially less frequent attacks could be a benefit in OPuS-2 relative to OPuS-1.

Is there any color you can provide on your expectation for the average attack rate for patients in OPuS-2?

Thanks.

Jessica, it's Bill.

Thanks for your question.

So on the -- with regard to the status of 7353, the in vivo and in vitro pharmacology and toxicology, safety pharmacology, CMC activities, the work is essentially done.

Typically, stability on drug product is the rate-limiting event at the end of this process, and that's about where we are.

So we are in the process of getting all the documentation together and we'll -- as I indicated in the call, we'll be ready to initiate a study in the second quarter.

So we're not quite there yet, but we're getting there.

I would characterize the data as indicating that the safety margins are adequate to proceed into human testing.

We're yet to have that conversation with regulators, so that's the next step.

And if they agree, then we'll be in clinical study.

With regard to --?

What our expectation is on the attack frequency of --

The question you're asking is -- I don't want to be too specific here with regard to the attack frequency in OPuS-2, but we can frame it up in this way.

In OPuS-1, the attack frequency turned out to be about 1.3 per week on the study.

So that's about five in a four-week interval.

Now, that's a very frequent attack rate population; it's 30% worse than the attack rate in the placebo arm of the Cinryze pivotal study, for example.

We are now doing a 12-week study.

I think it would be very unlikely if the average attack rate in that study was less than one a month.

And it would also be very unlikely if the average attack rate matched OPuS-1.

But that might help to frame it up a little bit.

But it won't be -- I think it still won't be at the -- similar to the average attack rate in the community of HAE patients.

That's a number that's relatively hard to nail down precisely, but some of the publications on patient surveys, for example, one recent one indicated that the average attack rate in the respondents was about one per month.

And Bill, what we are looking for is roughly the same number of attacks in the study period, right?

Roughly.

You know what, it's -- right.

So I think if the study is highly likely to succeed from a statistical perspective if we wind up getting five or so attacks in a 12-week period in a placebo arm and a similar treatment effect size.

Thanks.

Brian Abrahams, Wells Fargo Securities.

Thanks very much for taking my questions and congrats on all the progress.

A couple more questions on 7353.

Can you talk about what the key things we should be looking for in the Phase I PK/PD results that read out this summer?

How would these assessments that you're going to be performing -- how are they different or perhaps similar from what you had done with 4161?

And I guess in case there's a hiccough with 7353, how far behind is the next second-generation drug?

And it sounds like the PK properties may not be quite as optimal, but how quickly could that potentially move into the clinic?

And could it be either once a day or possibly twice a day?

Okay, so I think what you can expect from the Phase I study with 7353 is a very similar set of data that we provided on 4161 in its Phase I study.

So these studies are typically done with single doses first and then multiple doses.

We'll make a decision about many multiple doses to give; in other words, how many days of treatment to give or administer -- or exposure to give in that phase of the study, once we see the early PK coming from the single doses.

But there would be a minimum of seven days.

We might -- may choose to give 10 days or 14 days.

We haven't made that decision yet, obviously.

So, the key information in this study is safety for a first-in-human experiment.

And we'd collect adverse events, of course; do a thorough job of laboratory evaluation for cardiovascular safety, ECGs, and all the standard things that you would do -- monitor the urine, all of those types of things.

So we'll do the safety assessment and report the salient findings there.

And secondly, we'll measure the drug levels in the blood.

And what we want to see there is that with increasing doses, we get higher exposure and then we can measure those levels, calculate the CK parameters, half-life, and see what happens at steady-state dosing with daily dosing.

I think at this stage come our assumption is that in the multi-day segment of the study, we'll be dosing once a day.

But we may or may not choose to do once a day or twice a day.

We just have to wait and see what the PK parameters look like.

And finally, we'll be measuring kallikrein inhibitory activity in the blood in the same way that we did in matched PK samples in the 4161 study, and be able to relate the achieved exposure to the degree of kallikrein inhibition in a contact activation-based assay.

The details of that assay are included in a couple of posters that we have available on our website that we have presented in public.

I won't go into them right now, but it's a contact activation assay.

So that's the extent of the data.

Obviously, normal healthy volunteers don't get HAE attacks, so we can't measure that in a Phase I. And that will be the topic, I hope, of a Phase II study to follow the Phase I.

I'll take a shot at your second question, Brian.

So, how far behind is the second-gen?

And let me tell you that we also are -- and I think we've talked about this before -- working on backups beyond that.

So, the second second-gen is about a month behind, roughly.

But we made a decision based on the PK profile of the two that 7353 is far superior, so we're basically putting that one on the shelf for now.

You know, could it be a once a day or twice a day?

It all depends on how the PK in the monkey translates to humans.

But in parallel, we are also moving backups that we believe have very different structures that we think would be good backups to 7353.

So, the further we get with 7353, the more attractive the backups look, because they are further along and getting closer to preclinical development.

Great.

And then just one more quick question, a follow-up to Jessica's prior question.

So, would you say that you are seeing perhaps a better therapeutic window with 7353 pre-clinically versus 4161, just given I think the greater selectivity profile that you've talked about in the past?

No.

I think that would be going too far.

I think that we are pleased with the tolerability and safety profile of 4161 in the clinic.

I think that the safety margins for 7353 is adequate to proceed to man.

And we need to see whether it's safe, tolerable, and what sort of exposures are safe and tolerable in people.

And then we'll be able to answer your question.

Thanks again.

Liisa Bayko, JMP Securities.

Thanks for taking the question.

A little -- if you could give us a little more color on what you are targeting -- I know you said you had a couple of early-stage kind of programs focused on other rare diseases.

Are these kind of related in terms of the pathways for C5?

Or how should we think about those?

So I think that the analysis we did when we were thinking about the strategy of the small molecule enzyme inhibitors for rare diseases, was to look at the universe of orphan diseases, and look at the quality and depth of the scientific evidence that the genetic abnormality was the cause that it was identified, the pathway was worked out.

It was -- you could imagine, typical criteria that would improve your chances of success, like having non-redundancy and non-branching, and those types of technical characteristics.

HA is a great example.

So it's a situation where there is a protein deficiency that releases a break on an enzyme.

The enzyme itself, which is the target, has nothing to do with genetic abnormality.

Right?

So pre-kallikrein gene is not affected in HAE.

But we are looking for that type of situation where we can find an enzyme and a pathway that has been released from control, if you like, by a genetic abnormality, and that it's very, very clear that that pathway is the basis for the disease.

So, we looked at lots of things and we decided to pick a couple that we haven't disclosed, but Jon has described them previously as -- I'll have a crack at doing this on this call.

One of them is like HAE, where it fits into that model, and that we can replace a protein therapeutic-given IV with a small molecule enzyme inhibitor.

And the pathway for development is pretty clear.

In another example, the other type of example -- and this fits the other one we picked -- is there are no therapies.

It's a horrible disease, and bringing forward a therapy would be great.

So, no, there is no existing therapy for that one.

Yes.

And I know that people are really interested in understanding what these targets are, but our view is they are early.

We certainly don't want to tip our hand to the competition.

And likely we're not going to get a whole lot of credit at this point for discovery projects.

So, just ask for your patience and we are excited about these but we've got a ways to go yet.

Okay, fair enough.

And then in terms of Rapivab, can you maybe give us some color on where you are in terms of obtaining contracts and the likelihood of getting them, let's say, in 2015?

Thanks.

Sure.

So in terms of a government stockpiling contract, I would characterize it as the very, very, very early stage of those discussions.

We've been really focused on making the drug available for the flu season.

And now that that's winding down, we are turning our attention more to the government and what's the process go through?

The big question will be, is there money in the budget for this and in which budget?

And so, our goal is to get a contract signed.

And then typically how these work is you don't get paid until you deliver.

And that -- depending on how much they want and what configuration they want, that could take as much is 9 to 12 months from the day we sign the contract to its delivery.

So, right -- our goal is to get that contract signed before the end of the year.

Thank you.

Sure.

Charles Duncan, Piper Jaffray.

It's Roy in for Charles.

Thanks for taking the question.

A quick one.

Given the fast track for 4161, when do you think we could have greater visibility on a rolling NDA filing?

And might that advance your timelines for the completion of the filings?

Thanks.

Yes to both -- fast-track and rolling NDA for 4161.

Right.

So, the question was a bit hard to hear, but it boils down to will the fast-track designation accelerate the filing timeline?

The likely answer to that is no.

Because the rate-limiting step is getting chronic safety -- evidence of chronic safety in patients with hereditary angioedema.

And we'll need at least some patients probably through 12 months of therapy.

And we really can't start that study until early next year, once we've got the relevant product toxicology study reports all completed.

Okay, so a rolling NDA filing doesn't advance those timelines at all?

So that's -- it may or may not.

I think you shouldn't assume that a rolling NDA will advance the approval.

Okay.

Thank you.

You're welcome.

Serge Belanger, Needham & Company.

A couple of questions on 5161, to start off.

First, on the study design.

There is a screening period.

Can you tell us how long the screening period is?

And are all subjects -- enrolled subjects go through the screening period?

Or just patients who have -- who don't have a well-documented HAE attack rate?

Hey, thanks for the question.

It's the latter not the former.

So we learned in OPuS-1 the value of having great medical records that are auditable, and where you can go back and qualify a patient based on attack rate.

And that was an interesting experience.

So, we anticipate that now we are in more countries in OPuS-2, some centers will have fantastic records like that and other centers won't.

And in the event that a patient, an individual patient, does not have the documentation of an attack rate, then that's when they go into a screening period.

Now, the screening period is long enough so that we can observe enough attacks to qualify them for the study.

And it's not so long that we won't be able to complete the study in the timeframe we indicated

And it can vary from patient to patient, depending on how frequent their attacks.

Right.

So, there is a minimum requirement that, one way or another, patients have to qualify with a certain attack rate to enter the study.

For obvious reasons, we have to have something to measure in terms of documenting the benefit from the drug.

Okay.

And I guess kind of a bit of a follow-up to that.

There is at least two additional competitors currently enrolling studies for HAE prophylaxis.

Do you foresee any impact on enrollment going forward, or even on the nature of patients you will be enrolling, will they -- do you think you'll see more patients without any documented HAE attack rate?

I don't know what the impact of other studies will be other than -- I think you just have to anticipate and always plan that there's going to be competition.

And we believe that we have a very attractive study for patients because we have an oral drug.

And it's the only oral drug enrolling in any study for hereditary angioedema.

So that's attractive.

You don't have to have subcutaneous shots or IV shots or any type of needlestick in order to get the therapy.

You can take the therapy home with you.

We've made it easy for patients to complete the study documentation.

We are implementing an eDiary system in this study, which is well-validated.

And we will be able to really put our best foot forward in attracting patients to the study.

So I think that we just expect competition and plan for it, is the short answer to your question.

Yes.

And I think the other piece is that we are planning for a lot of sites for a study of 100 patients.

And so -- and we recognize that there will be some sites that will be participating in multiple studies and some sites that don't want to participate, because they are in another study.

But with our -- the interest level in our program has been very high.

Okay.

And then just one on 4430.

The current funding allocation funds development through Phase -- is it through Phase I of intramuscular and IV formulations?

That's correct.

So are there any more animal studies planned or next development steps will require additional funding from what you currently have?

Sure.

So, I think that these are difficult diseases to study in clinical trials for obvious reasons.

That situation might change slightly for the better with the investment that the United States government has made in establishing treatment centers in various African countries.

But you also need an outbreak.

It's also difficult to conceive of placebo-controlled trials; that's never going to happen.

As we've indicated in previous communications, I think that if the opportunity arises, then it may be possible to study the drug at the right point in this development in an appropriate clinical study in patients with either Ebola virus disease or Marburg virus disease.

Can't predict what the next outbreak is going to be.

All you can say is there will be another one for sure, because the viruses live in the wild population and spill over into humans from time to time.

I think, given the difficulties of the clinical trials, animal studies are very, very, very important in establishing efficacy.

And we are still assuming that we will need to fulfill the animal rule requirements in order to achieve licensure with 4430.

So we've got great proof of concept.

That's certainly not enough, and we'll need to do more animal studies.

And as the program matures through the year, we'll be in discussion with our NIH colleagues, US EMIRATE colleagues, and Division of Antiviral Products at the FDA, to make sure we design and execute the right animal studies for that program.

But you are right, the key to this continuing beyond the Phase I is the additional funding.

And so that's -- I think for investors, that's the thing to watch for, is do we get the additional funding from the government?

Because at the end of the day, they are the only customer.

So if they are interested enough to keep it going, that's a pretty good sign that they are interested in stockpiling the drug.

Okay.

And that process starts once you have Phase I results -- given in Phase I?

We prefer to have some continuity of funding and not have to wait, but it's the federal government.

We'll see.

So, I really won't predict that I think what we have in our milestones is that we secure advanced development funding in the second half.

And we expect that the Phase I of 4430 will be done in the third quarter.

So, hopefully, we have some continuity of funding to keep the program going.

All right, great.

Thank you.

You're welcome.

Steve Byrne, Bank of America.

Hey, Bill, I was wondering if the time to Cmax in 4161 is sufficiently quick that it could have efficacy as a rescue therapy?

Yes, it's an interesting question, and we thought about that before we launched the development program for the drug.

We sort of rejected it because a lot of attacks are abdominal, and it's hard to see how the drug will get absorbed if there is edema of the small valve, mucosa and submucosa.

So you get this massive swelling of the small bowel, then it doesn't work and you get a bowel obstruction.

And that's painful.

And it's -- then the fluid leaks out and causes acidity.

So -- but those small bowel attacks are really difficult for patients to deal with.

And I -- we haven't run the experiment that, just on the basis of first principles, we think it would be difficult for an oral drug to be useful in that circumstance.

Similarly, if you have an upper arrow digestive tract attack with edema and it's difficult to swallow, that again sort of argues against using an oral drug to treat an acute attack.

So, the recommended -- there are expert bodies that have come out with recommendations on how to manage this disease, and they uniformly advise physicians to create management plans that include rescue therapy that's immediately available for the patient.

So, therapies are on the market now, obviously, and that will persist into the future.

And I think as companies get better at coming up with drugs that have the potential to wipe out attacks, the acute market is going to be more limited as time goes on.

Okay.

Well, that leads me into my next question, which is for Lynne.

And that is -- based on your experience in market research, do you share the view of prior estimates that there is roughly 6,000 HAE patients in the US and Europe in each region?

And do you have any idea or an estimate of what fraction of those would you say have one or more attacks a month?

So, yes, I would agree with that estimate.

And in terms of the frequency of attack, that data that we are currently looking into as we put our commercial plan together.

Okay.

And just with respect to Berinert's dominance in Europe, do you think that an oral product could penetrate that market?

And what would be the primary hurdle?

Would it be being priced competitively with Berinert?

So clearly, Berinert has been on the market in Europe for a long time, but there is definitely opportunity for an oral therapy.

Reimbursement is challenging in Europe, and that is something that we are actively looking into and planning for right now.

Thank you.

(Operator Instructions) Rahul Jasuja, Noble Life Science Partners.

Thanks for taking my question.

So, a couple of questions related to some of the questions that have been asked before.

On slide 7, you've broken out the infrequent, frequent and very frequent attacks based on kallikrein inhibition activity.

I was just wondering if we could get a sense of what proportion of patients fall into each category?

I mean that's kind of related to a previous question, but do you have a sense of how many -- what percentage are in each category?

So, Rahul, I'm not sure it's in this presentation, but it's been in previous presentations that we've made, we cite a survey in Europe that was published last year of, I think, it's like 190 patients in Europe with HAE.

And if my memory serves me right, it's like 60% of patients report that they have at least one attack per month.

And so you should think about two-thirds of the folks have 12 attacks per year.

Okay.

Okay, that makes sense.

Good.

My next question sort of pertains to something that we may have discussed before, but I just want to confirm this.

So regarding the chemical structure of the follow-ons, it's different from BCX4161, the chemical class, and you are not divulging it now.

But the question really is, are the second -- are the next-generation compounds similar in chemical class to each other?

For the first two that we put into advanced nonclinical development are closely related.

They're like chemical cousins.

They have nothing to do with the structure of 4161.

And none of the second-generation compounds are similar really to 4161.

We did that deliberately, because we wanted to both create new IP, but also improve on the characteristics that we felt were challenges with 4161, especially bioavailability.

So our expert structure-based drug design scientists and medicinal chemists made the decision which is appropriate, that you don't want to tinker with a low bioavailability drug to fix its bioavailability.

You should start from scratch, and by the way, also invent new IP with your new drugs.

So that's what's happened.

The portfolio of second-generation compounds include several different types of scaffolds and very diverse chemical structures.

So, to reiterate, the first two are relatively closely related.

They are chemical cousins.

You could think about the remaining parts of the portfolio of compounds as distantly related, if you like, so that there are several different types of chemical structure in there.

The strategy is to have as much diversity as possible, so that, as Bill says, one, we can have a very good thicket -- broad thicket of IP protection; and two, if something goes wrong with one, there's enough difference that there's a chance that you won't see that with a backup.

Okay, great.

And then, maybe my last question falls in the category of being a devil's advocate question.

So, in looking at the PK, especially in slide 8 and other previous examples, it's really impressive what second-generation compounds show in contrast to 4161.

But then, what about selectivity?

I mean is there a chance that some of these compounds may not -- the right word is not a pan-inhibition but maybe inhibiting other related C-1 esterases or proteases -- C proteases.

Any comments on that?

Sure.

And I think that the situation is a little different in the field of curing protease inhibitors compared to, for example, the kinase inhibitors.

I'm sorry -- if we were developing a kinase inhibitor, we could find a contract research lab that would do a screen against hundreds of different human kinases, and be able to report whether we had any hits and whether there was any significance in any of those hits.

That facility doesn't exist for serine proteases.

So as far as we could within reason -- our scientists established a panel of serine proteases like trypsin, for example, is a -- tissue kallikrein is another example.

And if you look at our posters available on our website, you'll see one that lists the sort of laundry list of serine proteases that we've tested in the lab.

So you can only take that so far.

Because you could spend the rest of your life developing serine protease assays to do screening.

It's probably more relevant to establish that you've got, relative to your first compound, good or as good as or better specificity on the things that you can measure.

So that's what we've done.

And we do have better specificity in, for example, the prothrombin time assay, so there's no anticoagulant effect that we can identify at all in the second generation compounds.

And similarly, for some of the other serine proteases, the full difference in inhibition is better, looking at the second-gen compounds compared to the first.

So that's a limited number of experiments.

So I think that the more fundamental question that you're asking is, can you predict in any way what the tolerability profile of the second-gen compounds are going to be.

Short answer is no.

And you just have to do the experiments.

So, we are at the stage of next step in our actions with regulators.

The step after that, Phase I testing, and then we'll see where we are.

But with each one, some risk gets removed.

Right.

No, that was very helpful.

That explanation was helpful.

And of course, it was a devil's advocate question.

Thank you.

You're welcome.

Ed Arce, ROTH Capital Partners.

Thanks for taking my questions, and congrats on a lot of the progress over the last few months.

So, given that you've just recently identified 2017 as your target date for an NDA filing publicly, I was just wondering if you could outline for us the details for the likely path between here and there?

Sure.

So it's really great to have a drug at this stage of development.

I mean, we've got very satisfactory Phase I and Phase II evidence of safety, tolerability, exposure, efficacy.

And we're now in a 12-week placebo controlled experiment that we are running at the quality of an adequate, well-controlled study.

And I think at this stage, we should assume conservatively that we'll need to do another study of similar design to make two adequate and well-controlled studies.

That's not really the rate-limiting step for filing a file.

As I indicated earlier, it's collecting chronic safety in humans with HAE.

We need to complete the formulation development program on the commercial dosage form.

As we chatted earlier, it would be a good thing if we could increase the quantity of drug per capsule.

And so we're hopeful we'll be able to achieve that.

And these studies have launched the drug more concentrated dosage form, so that the number of capsules is lower per dose.

So, they are basically the main task to complete prior to having a data set and a file that you can make.

So that's really the basis -- all of those things are the basis of the timing that you indicated.

Okay.

And on Rapivab, I just wanted to be clear.

I think, Jon, you had said that it was likely that the way these contracts would be set up is that payment would be upon delivery, which could be anywhere from 9 to 12 months after signing.

So does this necessarily mean it's unlikely that we'll see any revenues until perhaps late 2016 from the government?

Yes.

I think that's a pretty good assumption, from a stockpiling perspective, yes.

And then just one last question -- this is for Lynne.

Given your long career at Behring, I was just wondering if you could tell us what really attracted you to BioCryst?

And any specifics on the opportunities or challenges that you see with this HAE program?

Thank you.

Yes.

It's been a great pleasure to join Jon and the BioCryst team, and my first three weeks have been great.

I'd actually been watching BioCryst's evolution for a while.

And I was impressed with their HAE programs and also their early-stage pipeline.

And they've really got a genuine commitment to the patient communities that they serve.

I'm personally very excited about the opportunity to build a premier oral orphan drug business.

And as to the challenges, well, clearly, it's a very competitive marketplace that we are starting our commercial planning early.

We are looking globally, and I'm very excited by the challenge.

Great.

Thank you so much.

Thanks, Ed.

Thank you.

And with no further questions in the queue, I would like to turn the call back over to the speakers for closing remarks.

So, 2014 was a very interesting year for us.

We are really proud of what we accomplished.

I think there was a rapid succession of activity at the tail end that has set up 2015.

And I think this is a year where you can expect to see some very important events and corresponding value-creation.

So we look forward to keeping you updated over the course of the year.

Thanks for your interest in the Company.

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

This does conclude the program and you may all disconnect.

Have a good day, everyone.