BioCryst Pharmaceuticals Inc (BCRX) 2016 Q2 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the BioCryst second-quarter 2016 conference call. (Operator Instructions) As a reminder, today's conference is being recorded.

I would now like to turn the conference over to Rob Bennett, Vice President, Investor Relations. Sir, you may begin.

Thank you, Shannon. Good morning and welcome to everyone for our second-quarter 2016 corporate update and financial results conference call. Today's press release and accompanying slides for this call are available on our website, 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; Tom Staab, Chief Financial Officer; Dr. Bill Sheridan, Chief Medical Officer.

Before we 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 can be found on our Company website.

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

Thanks, Rob. Good morning and thanks for joining us today.

Our focus over the last few months has been to continue advancement of our HAE programs with a goal of bringing forward a conveniently dosed, highly effective oral drug to prevent HAE attacks.

Our next clinical trial in HAE patients, APeX-1, is gearing up, and we expect to dose the first patients soon. We've received regulatory approval to proceed with the trial in Canada and several European countries. We are now screening patients, and Bill will provide details on the trial design in a moment.

This is an exciting step forward in our program, as we are expecting that the high plasma concentrations we see with BCX7353 after daily administration will translate into meaningful reductions in attack frequency in HAE patients. Our goal remains to report initial data from this study by year end.

We also have nearly completed the PK study of the solid dosage form of avoralstat. While we see drug levels that are multiples higher than the liquid-gel capsules, we were unable to maintain drug levels at or above the target range during the twice-daily dosing interval. For that reason, we have decided to stop further development of avoralstat. Bill will provide more details on this as well.

Lastly, we continue to advance our broad-spectrum antiviral program with funding from the federal government. We completed the Phase I i.m. formulation of BCX4430 and are moving into exploratory animal studies to better understand the dosing and effect of delayed treatment, and hope to have results from these studies next year.

That's it for my introduction. I will now pass it over to Bill, who will discuss the design of APeX-1 and results from both the i.m. formulation of 4430 and the solid dosage form of avoralstat. Bill?

Thanks, Jon. As already mentioned, we are pleased to report that the APeX-1 trial is now open for enrollment. I'd like to spend the next few minutes providing some details about this trial.

Our main goals in this trial are to measure the efficacy and safety of the drug in eliminating or reducing the frequency of angioedema attacks in patients with hereditary angioedema and to inform dose selection for the pivotal-trial program.

We decided to build in flexibility in this trial by including an interim analysis and to focus that on the top-dose study, 350 milligrams once daily. That's why the trial is divided into two parts and why most of the enrollment focuses on that dose. We also need to understand efficacy for lower doses, so we are doing that with 250 milligrams and 125 milligrams once a day in part two of the trial.

Now I'd like to get into some of the details of the trial. This is a randomized, controlled trial, four weeks' duration, that tests our drug against placebo. Patients can continue to use their standard treatments to manage acute attacks during the trial.

You can think of part one as proof-of-concept, and we'll run an interim analysis once we have 24 subjects through trial day 28. If we have what we need with robust effects of 350 milligrams once daily at that point, we'll move on to part two, which looks at dose-ranging.

If the interim analysis indicates it would be good to have more data on 350 milligrams once a day, then we will keep part one open for up to an additional 12 subjects for a total of 36. The sample size was kept flexible in part one to cover a range of response options that would achieve 90% power with an alpha of 0.05, based on detecting a treatment effect of the drug of at least 70%, and placebo response rate of about 30%, with a standard deviation of about 0.45 attacks per week.

Of course, we've done some in silico clinical trial simulations to support the design of the study, including dose selection, sample size, powering, but also to inform the key eligibility criterion for the trial -- that is the baseline attack rate. Qualifying attack rate for APeX-1 is two per month documented through at least three consecutive months within the six months prior to the screening visit.

Part two of the trial will test the two lower doses, with six subjects at each dose and two more placebos. The final analysis naturally will include all patients entered into the study and pool the placebo subjects from both parts of the trial.

The primary efficacy endpoint of APeX-1 is the number of angioedema attacks, and that will be described in a number of different ways, including attack rate per week, a variety of ways of counting the attacks, proportion of subjects with no attacks, the number of attack-free days. We will also evaluate efficacy over the entire dosing interval, as well as through days 8 to 28. The reason for that is that it takes a few days for the drug to get to a steady state, so the days 8 to 28 analysis gives us the best information as to how the drug is likely to perform in the long term.

We've included a range of secondary efficacy endpoints to better inform us about the benefits of once-a-day BCX7353, just as we've done in our previous studies with avoralstat. Safety will be monitored with the usual tools and will measure drug levels and the degree of kallikrein inhibition in PK and PDS that we've discussed previously.

I'd now like to switch gears and provide some detail on the avoralstat formulation study. Our goal here was to see if we could achieve a PK profile that would support twice-daily dosing for prophylactic treatment of hereditary angioedema. What we were aiming for was consistent exposure at or above 4 to 8 times the EC-50 of avoralstat for kallikrein inhibition, maintained for at least 12 hours.

So we tested several different formulations in healthy volunteers, with avoralstat doses ranging from 200 milligrams to 2,000 milligrams. And you'll recall from our previous discussion that we were unable to increase exposure moving from 400 milligrams to 800 milligrams in the Phase I study with the liquid formulation. The 500 milligram dose of avoralstat as softgel capsules is included for comparison, and this is the same formulation that was used in OpUS-2, and it's indicated in the red symbols on slides 4 and 5.

What we saw was that both the tablets and suspension formulations, some of these new formulations have certainly improved overall drug exposure. As Jon said, we had multiple of drug levels compared to the softgel capsule formulation. And in addition, we were able to dose to higher levels, which we were unable to do, as I mentioned earlier, with the liquid formulation.

So the exposure measured by the area under the curve was up to about five-fold higher in some of these cohorts compared to 500 milligrams of softgel caps. Tolerability was very good. We had no significant adverse events in 53 healthy volunteers who participated.

However, although we did achieve significantly higher drug levels, these were not maintained or else not consistently maintained, depending on the cohort, in the target range through 12 hours after dosing. So this formulation work was not able to achieve what we were looking for, and we don't have an acceptable twice-daily prophylactic avoralstat formulation. So we are discontinuing this initiative. Instead, we are focusing our efforts in hereditary angioedema on BCX7353. As indicated on the slide, its PK profile easily meets all of our goals to the coverage of the target enzymes.

My final update is on the antiviral program, BCX4430. I'd like to go over the Phase I clinical trial and provide a brief update on nonclinical studies with Zika virus infection.

We've now completed all of the planned cohorts in the Phase I clinical pharmacology trial of 4430, administered by intramuscular injection. Now, the trial design is very standard, typical single- and multiple-ascending dose, on slide 7. We had 73 subjects receiving active drug and 18 receiving placebo.

The summary safety results are shown on slide 8. I'm pleased to say there's really not a lot to talk about here. The injections were generally safe and well tolerated. As you would expect when you get an intramuscular injection, there's some pain, and we were able to reduce that by coadministration of a local anesthetic lidocaine. Laboratory safety profile was clean.

Plasma drug levels through the time course on the first dose and on day 7 of daily dosing is shown on slide 9. Drug exposure was dose-proportional and very predictable, which are very good features to have in a nucleoside-class antiviral drug.

It's important to note the accumulation you can see that comparing, for example, the 24-hour post-dosing levels on day 1 with the 24-hour post-dosing levels on day 7. And clearly, we could get to higher trough levels quicker if we gave a loading dose. This could be quite important in treatment of infections, so that's what we're now studying in our nonclinical study program.

The long terminal half-life is not a good feature to have for an acute treatment of viral infection. That could lead to a short course of treatment, and we look forward to testing the loading dose regimens of this drug in Ebola virus disease models, based on the results of the Phase I clinical trial.

This trial met all of its objectives. All of these results strongly support further development of this drug for acute treatment of emerging viral infections. All you need to do is reflect on the last few years. Every year or two, there seems to be a new and important viral threat. So having a broad-spectrum agent like BCX4430 successfully developed could be actually quite important to public health preparedness.

In our previous calls, we shared encouraging evidence of in vivo antiviral activity of 4430 in a Zika infection model, in mice that lacked interferon-response genes and were therefore immunodeficient. Since then, we've had the opportunity of collaborating with Dr. James Whitney at Ragon Institute of Massachusetts General Hospital, MIT and Harvard Center for Virology and Vaccine Research at Beth Israel Deaconess Medical Center.

Dr. Whitney tested 4430 in a Zika infection model in healthy nonhuman primates. Obviously, healthy nonhuman primates are far more similar to people than are immune-deficient mice, so these experiments are very important.

We've tested a loading dose/maintenance dose schedule, and also a single-dose schedule, with drug dosing starting the same day as the virus challenge in the first experiment. Preliminary results that 4430 treatment can eliminate viremia with no detectable virus in the blood compared to controls, who all had detectable virus in the blood, and reduced the amount of virus shed in different bodily fluids. This is quite encouraging, and we're planning to pursue additional experiments in nonhuman primates and look forward to sharing more detailed results in a scientific publication or presentation.

So, that's it for the program update. Tom will now address the financials.

Thank you, Bill, and good morning, everyone.

I'm pleased to report the details of our second-quarter 2016 results. We closed the second quarter with approximately $64 million in cash and investments and have diligently focused our resources on our HAE program. As we have mentioned previously, we expect our existing cash to fund our operations through mid-2017.

On slide 11, you see revenue for the second quarter of 2016 decreased to $4.8 million compared to $25.8 million recorded in the second quarter of 2015. This decrease was primarily due to the one-time partial recognition of a large upfront payment from Seqirus associated with the June 2015 outlicensing of Rapivab. Furthermore, we also had lower development activity and thus lower collaborative revenue associated with BCX4430 in the second quarter of 2016 as compared to 2015.

Research and development expenses for the second quarter of 2016 decreased to $14.2 million from $16.5 million in the second quarter of 2015, primarily due to lower development costs associated with BCX4430. The progression and pace of the 4430 program is largely dependent on BARDA and NAIAD's authorization and development process, as this program continues to be funded by the US government and other external sources.

General and administrative expenses for the second quarter of 2016 decreased to $2.7 million as compared to $3.5 million for the second quarter of 2015. The decrease was the result of a general reduction of administrative expenses throughout the Company during the second quarter of 2016 as compared to the second quarter of 2015.

Moving below the operating line, we incurred $1.4 million of interest expense in the second quarter of 2016 and $1.3 million in the second quarter of 2015. We also recorded a mark-to-market hedge loss of $3.7 million in the second quarter of 2016 as compared to a mark-to-market loss of $796,000 in 2015.

During the second quarters of 2016 and 2015, we also realized currency gains of $811,000 and $1.5 million, respectively, associated with the exercise of a US dollar/Japanese yen currency option within our foreign currency hedge. These gains reflect the exercise of in-the-money options within our currency hedge, as contrasted to mark-to-market adjustments at the end of each quarter, which reflect quarterly changes in the yen/dollar exchange rate.

The net loss for the second quarter of 2016 was $16.3 million, or a $0.22 loss per share, compared to net income of $4.9 million, or $0.06 of income per diluted share for the second quarter of 2015.

Slide 12 summarizes our six-month financial results. For the six months ended June 30, 2016, total revenues decreased to $9.6 million from $32.7 million in the first half of 2015. The decrease in revenue resulted from the recognition of approximately $21.7 million of collaborative revenue associated with the Rapivab outlicensing transaction in June 2015.

First-half 2016 R&D expense increased slightly to $34.7 million from $33.6 million in the first half of 2015, primarily due to increased spending associated with our Rapivab program related to postapproval commitments with the FDA, and our ongoing regulatory filing responsibilities associated with the Seqirus outlicensing transaction, offset somewhat by reduced BCX4430 clinical development expenses.

General and administrative expenses for the first half of 2016 decreased to $5.9 million compared to $7.6 million in 2015. This decrease was primarily due to lower unrestricted grants awarded to HAE patient advocacy groups and a general reduction of administrative expenses in the first half of 2016.

Moving below the operating line again, in the first half of 2016, we incurred $2.9 million of interest expense compared to $2.6 million in the first half of 2015. We also recorded a mark-to-market hedge loss of $6.4 million in the first half of 2016 as compared to a loss of $332,000 in 2015. In addition, we also realized currency gains of $811,000 and $1.5 million in the first half of 2016 and 2015, respectively, associated with hedge option exercises in those periods.

Moving on to slide 13, I'd like to discuss our cash balance and cash usage. We ended the second quarter of 2016 with cash and investments of $64.3 million, a decrease from the $101 million at the end of 2015. Based upon our current plans and expectations, we expect our existing cash to provide us liquidity through the first half of 2017.

Our operating cash usage for the second quarter of 2016 was $15.4 million as compared to $12 million in the second quarter of 2015 and a total of $37.9 million for the first half of 2016. As a reminder, our operating cash usage totals do not take into account any cash flows associated with the hedge or our Rapiacta royalty monetization.

In regards to our 2016 forecasted results, and consistent with our cash runway guidance, we continue to expect to be within our previous guidance expectations, with our 2016 cash utilization in the range of $55 million to $75 million, and our 2016 operating expense guidance in the range of $78 million to $98 million. As a reminder, equity-based compensation expense is excluded from our operating expense guidance.

That completes my review of the second quarter, and we would now like to open the call up for your questions. Shannon?

Thank you. (Operator Instructions) Jessica Fye, JPMorgan.

Thanks for taking my questions. I wanted to start out just clarifying what amount of data from the APeX study you'll disclose before year end. Is it the interim, that first batch of patients on 350? Will you have time to run the next 28 days at the lower dosage should you want to do more dose-finding? And I just wanted to make sure I heard correctly; did you say you expect the baseline attack rate to be 0.45 per week, or was that a standard deviation comment? Thank you.

So, taking -- this is Bill -- taking the last question first, that was a standard deviation, that number. So what we intend to do is complete part one. That'll be what's disclosed. So how many people are in that depends on what we see at the interim analysis.

Okay, got it. And what's the baseline attack rate that you're expecting?

Well, if you look at what we saw in our two previous studies in hereditary angioedema, you always get an average attack rate on study -- or baseline attack rate of the people coming on to the study -- that's higher than the minimum that you set, for obvious reasons. So in OPuS-1, we set a minimum of one attack per week, patient-reported attacks, and the actual number was 1.5.

In OPuS-2, we said essentially the same as what were planning for APeX-1, two per month, and what we got was 0.93 per week, pretty close to one a week. And as you'll recall, there was a placebo effect, and on study it was around about 0.6 per week.

So you can expect on that basis that the attack rate, the baseline attack rate obviously will be higher than the minimum, because people will have a range of different attack rates. And our simulations that I mentioned on the call were pretty extensive. We are quite comfortable with the eligibility criterion we've set and that we will have enough attacks on study to see a treatment effect.

I'd also like to add that obviously we have built in flexibility, because until you actually have people on study, you don't know what the average attack rate is going to be. And once we see what that is, that will play into the decision about whether to add additional subjects to part one.

Okay, and so your minimum criteria for this one is two per month; is that --?

That's right.

Okay. And so we could look at something between, say, a half and one attack per week as a potential baseline?

That's probably a reasonable thing to think about, yes.

Okay, thank you.

Brian Abrahams, Jeffries.

Thanks very much for taking my questions. I guess first question, on the APeX-1 study, is there a set criteria for moving this part two versus expanding out part one, or is it really based on a look at the totality of the data and the baseline characteristics as well?

Yes, we'll look at everything. So the goal, the two goals of the study, to characterize a treatment effect well enough and to do dose-ranging well enough to help us pick doses for pivotal studies. So we'll look at the baseline characteristics, we'll look at what's happening on study, we'll look at the size of the treatment effect, standard deviation, everything.

Got it. And then just from a disclosure standpoint, I guess just to follow up on the last question, so if I understand it correctly, if the interim suggests that you would expand part one, you won't make any disclosures until you get the data from those additional 12 patients. But if the interim suggests you should move to part two and dose down, then at that point you will disclose the attack rate and the quantitative data from the first 24 patients -- the 24 patients within part one?

That's right. And both of those we expect to complete by the end of the year.

Got it. And then, it doesn't look like there's any parameters in this study that increase the dose to 500 milligrams. Is that just related to the fact that in the Phase I portion you didn't really see any difference in kallikrein inhibition, or is there other rationale for not incorporating a flex dose-up portion?

So, Brian, that's absolutely the reason. So there's no point in giving additional drug if you don't have any additional effect on the enzyme. So, it plateaus out, like it always does. So the nature of enzyme inhibition is that with higher and higher and higher concentrations you get diminishing returns once you're at the plateau of the curve.

And I think when you look at the Phase I drug exposure graph that we have in the slide deck that Bill talked about, if you look at the target range, you can see that all the doses could potentially have a benefit to HAE patients, even the low dose. So it will be interesting to see what these lower doses do as well.

And then one last question, if I may; then I'll hop back in the queue. Any monitoring, or specific monitoring or interim safety analyses related to potential hypersensitivity? And I'm curious also what you sense was from regulators and KOLs as to what would be an acceptable rate, if this drug is ultimately the first efficacious oral drug in the prophylactic indication. Thanks.

The regulators had no comments on our safety monitoring; they approved the protocol. I think that the monitoring that we worked out in collaboration and consultation with external experts on drug-induced rashes was completely supported by our investigators. And we've described that before, obviously. What to look for is described in the protocol, and we educate the sites about that.

As I've mentioned previously, the advice we've had is that the cases we've seen fall into the category of simple red rashes, essentially -- erythema. And in the fullness of time, what we will probably see is that they are self-limited and go away within a few days. And a later date in the development program, after we've got evidence of efficacy and perhaps long-term safety study or something like that, we might be able to test dosing through the rash, because in essence, immune tolerance develops, and then you can keep taking the drug. So that's something we'll need to test later on.

Yes, in terms of what's an acceptable rate, I actually think it's higher than the rate we currently see. I've mentioned before that I've talked to patients and to physicians, that when you ask if you had a nine-in-10 chance that you weren't going to get the rash and that you could take an oral drug once a day and really have an impact on your attack frequency, would you take it? And there's a lot of enthusiasm for that. So, right now, we are between 4% and 5% rate, and we'll see if that stays that way after APeX-1. And we think as long as the efficacy is what we expect it to be, that this is very manageable.

Thanks very much for the color, and congrats on getting the study up and running.

Charles Duncan, Piper Jaffray.

Thanks for taking my questions. I just had a couple of questions on APeX-1 trial design. In terms of the patient that you expect to enroll, are you tracking other patient characteristics or targeting other patient characteristics such as attack severity and/or duration, in addition to frequency? Also, what about time since diagnosis?

Charles, we're not including those variables as eligibility criteria. We do, on the study, measure attack duration and attack severity as a standard part of understanding the patients that we have on the study and potentially the effect of the drug. But they are not included as attack criteria.

The experience in individual patient can be quite variable. So an individual patient with this illness who's getting frequent attacks might have a mix of abdominal attacks, peripheral attacks. So I think trying to pick and choose which types of attack or attack patent to put in the study is probably not feasible. And what we're trying to show here is that there is the treatment effect with a drug that has very strong inhibition of plasma kallikreins sustained throughout the dosing interval. And the simple notion is that if we restore the normal phenotype of kallikrein inhibition, that should prevent the triggers of these attacks from having an effect regardless of the type of attack.

Yes, with regard to your question about newly diagnosed patients, I mean, these patients have to -- like other studies, these patients have to have a documented history of attack frequency to enter the study. So as long as they have that in the patient record -- that's why we're going to European sites primarily -- that will cover that.

Okay, so the frequency will be through patient-reported or clinician-reported attack frequency; there's not a run-in period or anything in the study?

Right.

My anticipation is the vast majority of patients who enter the study will have medical records that support the documentation of the eligibility requirements.

Okay, that's helpful. And then just checking on a couple of other previous questions, I'm just wondering, do you anticipate being able to press-release, if not data, some progress in APeX-1 yet this year?

We will press-release when we dose the first patient, which I said is soon. But between then and the results, you probably won't get any updates.

And so you don't anticipate an update yet this year, in terms of progress?

But we will have the results of part one by the end of the year.

Okay, that's what I thought you said, Jon, but I was not sure.

Yes. So the next two press releases will be first patient dose and then the results of part one.

Okay. And then just one quick thing. If you fast-forward, call it a year from now, I know the development and regulatory strategy obviously depends on the outcome of APeX-1, but what are your thoughts and next steps? Where could you be in a year in terms of this program?

The logical next step after a successful APeX-1 study would be to design the pivotal program and negotiate that with regulators. Obviously, that would need an end-of-Phase-II meeting with the FDA. And the year from now, you would hope that we would be in the starting-up phase of pivotal program.

Yes, remember that we've invested in this program with the idea that tox, making drug, all of that is being run in parallel, so that there are no major delays in starting up the next trial. So as Bill says, there'd be an end-of-Phase-II meeting with the regulators and then going into a pivotal program.

Sounds like by the end of 2017 you could be pivotal.

Yes.

Next question is, could you remind us of the IP on 7353?

Yes, so the IP takes us out to approximately 2035, so plenty of runway.

Okay, cool. Good. Thanks for taking the questions.

Tazeen Ahmad, Bank of America.

Thanks for taking my questions. Just one about frequency of dosing. Since you guys are no longer developing an oral stat, does it make sense to potentially think of 7353 as BID, maybe? Do you think that makes a meaningful difference? I know that originally the plan was to be one pill once per day, but if you do have an oral option, does it make that much of a difference if you're doing one pill in the morning and one pill in the evening or something along those lines?

There really isn't a need, Tazeen. If you look at the PK chart, if you look at the target range, remember we're trying to restore the normal phenotype. So you can have all the triggers in the world, and if you've got high enough kallikrein inhibition, you shouldn't have attacks. So if you look at the steady state in the single dose, and the coverage over a 24-hour period, there's no need.

Yes, just to add a couple of comments, the half-life of 7353 is in the range of 50 to 60 hours. That certainly support once-a-day dosing. Theoretically, you could decide to give it three times a week. But that's harder to remember to take a drug on Monday, Wednesday and Friday than it is to take a drug every day. So it's better to have once-a-day dosing even though the half-life is 50 to 60 hours.

The second pharmacology comment is about a PK parameter called the fluctuation ratio, which is to what -- how high is C-max compared to C-min? In other words, at the peak of drug concentration, what is that compared to the trough before the next dose? If you space doses out through a very long time you get a higher fluctuation ratio. And the fluctuation ratio that we saw is around about twofold, which is quite small, or less, in the healthy subjects dosed once a day. So on that basis, there's no reason to give the drug more frequently.

Okay. And then as far as the number of sites, I'm sorry if I missed it; how many sites are you using for APeX?

I didn't say, so we're going to enough sites to get the study done in the time frame that we need, and it will be in several European countries plus Canada. So it will be in quite a few more sites than we had in our OPuS-1 study, which was very restrictive. That was only, like, three or four sites in Germany and one in the UK. This is quite a bit bigger than that.

When you run studies in larger numbers of sites, then you can expect for whatever reason, one or two sites might be unproductive. But on the other hand, one or two sites might be very productive. And I'm very confident we will be able to recruit the study, and we're giving it our best shot by having enough sites.

And then are any of these sites here now also involved in a Phase III study that Shire is doing?

I wouldn't know, and it would be hard to conceive that our sites are (multiple speakers) We don't own the site, right? So I would expect active investigators in the field of hereditary angioedema to study all of the new drugs that get investigated.

Yes.

And then lastly, can you remind me, if you have something like half an attack a week or so, on a spectrum of severity, where would you define that? Would that be moderate or would that be moving into severe?

It's moderately frequent. So I think that the language here is quite important. This is not asthma, where you can have a mild attack of that. People get [touched] by just having mild asthma or moderate asthma or severe asthma based on the pattern of their illness. Any single attack in hereditary angioedema can be very severe and it can be life-threatening. So you might only have one this year and still have a life-threatening attack. So it doesn't really give you a picture of the threat to your life or the disruption to your life.

I think it's reasonable to say people have less frequent attacks or more frequent attacks. The average in a number of publications is about one a month, so two a month is moderately frequent. That's worse than one a month, obviously.

Yes, I asked the question because as you already know, there's a significant number of HAE patients who choose not to take any prophylaxis currently. So I wanted to get a sense of where that would land in terms of people who are currently getting treatment with something like [Synrise], if you have that data.

Yes, and I think a lot of that has to do with what's the current therapy available. I think when you get an oral, I mean, the enthusiasm -- I can't stress this enough -- the enthusiasm for us by patients and physicians has been fantastic. And I think that's the other thing that differentiates us, that sites that may be participating in more than one trial, at least currently this is the only oral trial that's going on with HAE patients. So there's a lot of patients waiting for it.

All right, thank you.

Serge Belanger, Needham and Company.

Just a couple questions also on APeX-1. It sounds like the patients you'll be recruiting are expected to have a documented attack rate. Just wanted to know how long the screening process is prior to the randomization in four-week treatments, and whether it will be a case-by-case patient basis or all patients will go through this screening process?

Well, to be clear, the screen consists of making sure that the patient is eligible; that's what screen means. So there are blood tests and so on, history and physical examination. And part of the history is review of the documentation of attacks. And as I mentioned before, the way you should think about it is most of the subjects in this study are going to have solid medical records at the site that already documented their illness. And many of these patients in the European sites and the Canadian sites that we're going to have been attending those physicians at that site for a very long time, have extensive medical records.

We'll be focused on their current status, and in the last six months, what's the pattern of their illness, and in that period, is there a three-month period where they have at least two attacks a month documented in the medical record. That's the essential feature.

So, how long the screening takes depends on people's schedules. People take vacations, they work, they've got other things going on. They sign a new form consent form and start the screening, there might have to be a follow-up appointment next week or the week after, or the week after that, so it varies.

Okay, thanks for the clarification. You talked a little bit about the powering assumptions for APeX-1. Are those based on just historical HAE studies? And then, I guess what dropout rates are you assuming for part one of the study?

So, I didn't catch the first part; you said something exceptions in APeX? I didn't get the first part of your question.

Oh, I was talking about the powering assumptions for APeX for --

Oh, powering.

Yes, powering, sorry -- what they were based on. Was it historical HAE trials? And what dropout rate were you assuming for part one?

So probably the simplest way to think about the powering assumptions is to look at our experience in OPus-2. So we're building in a placebo response rate of 30%, which is what we saw in OPuS-2. Maybe it will be less than that, maybe it will be more than that. So that's why we've got some flexibility in interim analysis; that's one of the reasons.

So with regard to attack rate, again, in OPuS-2 we had on study an attack rate of about 0.63. Maybe it will be higher than that, maybe it will be lower than that when we actually get to see the data in APeX-1. That's another reason to have some flexibility.

Okay. And then just one last question for Tom. The OpEx guidance has not changed since I guess the start of the year. Just wanted to know how we can think about this $20 million delta that is still there.

When you say the $20 million delta, just make sure that I understand that.

In the operating guidance that you've given, I think you've said $78 million to $98 million for 2016?

Right. And so, when we gave that guidance, we obviously had clarity on our 8-K program in regards to OPuS-2. And so at the beginning of the year I give larger ranges, and I choose not to adjust my ranges as we go throughout the year, other than to say that the range is either appropriate or, if I have to revise it, then I revise it accordingly.

But I think that as you look at our results, we've anticipated pretty well what's going on and continue to believe that those ranges are pretty accurate. Is that sufficient answer to your question?

Yes, thank you.

Liisa Bayko, JMP.

Thanks for taking the question. I just wanted to better understand the kind of decision point around expanding the first part of the APeX-1 study. What criteria will you be looking for to increase that end?

So the key for us is to get enough information to design a pivotal study. So we'll look at the treatment effect size and the standard deviations, and is what we're seeing enough information to help design a pivotal study? So I don't have specific numerical criteria written down right now. We're going to have to look at the data and evaluate it. So --

But an example could be, let's say that placebo attack rate was, you know, much less than what we expected, right? Then we can make adjustments based on that. We don't want to be caught by surprise on some things like that that would cause us to not be able to have the flexibility to add more patients.

So, it's a planned interim -- administered interim analysis in a Phase II study. These things are commonly done, and the reason is to build in flexibility so you can come out of the end of the study with the information you need to go to the next step.

And what European countries are you going to be enrolling in?

Quite a few. For example, Germany, UK.

Italy.

Italy, several others. I think the major European countries.

Are these all kind of Western European countries, or --?

Yes.

Yes, yes.

Okay, great. Thank you very much.

(Operator Instructions) Kumar Raja, Lenovo Financial.

Thanks for taking my question. So, in Dyax's 2930 trial, they targeted a greater than 90% reduction in the HAE attack. They also enrolled patients who had greater than two attacks in three months prior. So, how does your patient population compare, and what are your thoughts on the 70% reduction in the attack rate you are targeting?

And for the pivotal trial, do you guys think that there will be a need for a 12-week study before doing that, or can you move directly to a pivotal trial?

So, it was a little hard to hear all of your questions, but I think I've got most of it. So, with regard to the powering assumption and taking at least a 70% reduction in attack rate for powering assumption, that helps you plan the study. That's not necessarily the metric by which you judge the outcome. That's a different story. So, we are studying an oral drug, administered once a day.

I don't know what the outcome of the study is going to be; we have to run the study and find out. It could be that we completely restore the normal phenotype in everybody, and nobody gets an attack. Well, that would be fantastic. It could be, taking the other end of the bookend, it could be, let's say that 40% or 50% of the subjects have no attacks. For an oral drug taken once a day, that's pretty interesting. And it would set up -- try this oral drug first before you go on to parenterally administered therapy that you have to interject.

So, the 70% is simply a powering assumption. You have to start somewhere; that sounds like a reasonable thing to shoot for in terms of powering a study.

With regards to the Dyax Phase Ib and the attack rates, I'm very comfortable with the attack rates we've chosen to study. And one of the reasons for building in an interim analysis and some flexibility is to add more patients if we need to. I haven't mentioned it in the call, but obviously if you're running a Phase II experiment, if at some point you need to amend the study because you want to add more patients than planned, you can do that. So Phase II is designed to give you the information you need to run a pivotal trial. That's what it's about.

The key in the attack frequency is to make sure that people on placebo have attacks. Otherwise you can't show a difference.

And then your last question was around the pivotal program; will it be 12 weeks? And the answer is yes. It's likely to be 12 weeks, and then a long-term safety rollover.

Okay, great. And in terms of enrolling patients in the US, what are the plans for that?

That's likely to come in the pivotal program. Obviously the US is a really important market. We've just had really good success with these Phase II studies in running them and getting them enrolled quickly because of the concentration of patients in these European sites is much more diffuse in the US. So the US will be for sure included in the pivotal program.

Absolutely. And we look forward to bringing the program to the United States.

Okay, great. Thanks for taking my questions.

Thank you. There are no further questions at this time. Ladies and gentlemen, this concludes today's conference. Thanks for your participation, and have a wonderful day.