BioCryst Pharmaceuticals Inc (BCRX) 2018 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the BioCryst Pharmaceuticals Second quarter 2018 Earnings Conference Call.

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

I would now like to introduce your host for today's conference, Mr. Tom Staab, Chief Financial Officer.

Please go ahead.

Thank you, Christie.

Good morning, and welcome to BioCryst Second Quarter 2018 Corporate Update and Financial Results Conference Call.

Today's press release and accompanying slides are available on our website.

Participating on the call with me today are Jon Stonehouse, Chief Executive Officer; Dr. Bill Sheridan, Chief Medical Officer; and Lynne Powell, Chief Commercial Officer.

Following our formal remarks, we will answer your questions.

Before we begin, I'd like to direct your attention to Slide 2, which discusses our use of forward-looking statements and potential risk factors regarding an investment in BioCryst.

As detailed on the slide, today's conference call will contain forward-looking statements, including those statements regarding future results, unaudited and forward-looking financial information as well as the company's future performance and/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 expressly -- performance expressed or implied in this presentation.

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

For additional information, including a detailed discussion of our risk factors, please refer to the company's documents filed with the Securities and Exchange Commission, which can be accessed on our website.

I would now like to turn the call over to Jon.

Thank you, Tom.

Good morning, and thanks for joining us today.

We have clear direction from our shareholders and a strong conviction in the medical community that BCX7353, our once-daily oral kallikrein inhibitor for the prevention and treatment of HAE, is a highly differentiated asset with a high probability of success, which can be an incredible advancement to currently available and approved therapies for patients.

We believe 7353 can deliver enormous value to patients and shareholders.

We have the programs, the focused commitment of an experienced team and the financial resources to deliver this value.

And our goal remains to build a company that is a leader in the treatment of hereditary angioedema, or HAE, by developing and commercializing revolutionary oral treatments to prevent and treat HAE attacks and help patients live a normal life.

We intend to drive further sustained value by developing other novel oral drugs for rare diseases, starting with our ALK2 inhibitors and BCX9930, which are on track to begin Phase I trials in the first half of next year.

With the assets, opportunities and resources we have in hand, we have our heads down, focusing on driving our clinical trials forward and preparing for regulatory submissions and commercialization.

As you were able to see for yourself in the forecast models we published over the summer in our SEC filings, we believe our programs will deliver substantial value, as we address significant market opportunities.

And with the restructuring of our debt facility and the financing we completed last week, the company now has the financial resources it needs to progress 7353 and our other programs well past the data readout for APeX-2.

Bill will provide you with an update on our ongoing clinical trials with 7353 for oral acute and prophylactic therapy.

Both studies are progressing very well, and we are currently on track to hit all of our timelines.

Lynne will also share some of our commercial perspectives with you.

Our marketing and launch-readiness activities are already underway, as we follow the market closely and develop our plans with input from physicians and patients, desperate for new therapies.

We have all the ingredients to be successful and with the clarity from our shareholders and several near-term clinical milestones, the team is committed, energized and focused on delivering success and value, because we know patients are waiting.

Now I'd like to hand the call over to Bill for an update on our ongoing trials.

Thanks, Jon.

I'm going to focus today on our lead program, BCX7353, a plasma kallikrein inhibitor that would be the first oral-targeted therapy available for both prevention of HAE attacks and treatment of acute HAE attacks.

We're making excellent progress across all aspects of our program.

Our timelines remain on track for the APeX-2 Phase III prophylaxis trial, the APeX-S open-label safety study and the ZENITH-1 exploratory Phase II trial for acute treatment.

We have completed patient enrollment in ZENITH-1 and expect to report data for Part 1 of this trial later this quarter.

As we approach the data readout, we wanted to review for you today how we selected the dose levels to test, some relevant context from the licensing trials of currently marketed injectables, what success looks like and some unique features of ZENITH-1.

The 2 principle goals of this exploratory trial: one, to identify activity against clinically meaningful endpoints that we could use to construct a Phase III registration trial; and two, to identify the doses we want to advance.

The notion of using 7353 as an acute treatment was first suggested by the PK profiles of single doses in the range of 250 milligrams to 1,000 milligrams in healthy volunteers in our Phase I trial.

These profiles are shown in the left panel on Slide 6. With this information, we simulated the PK profiles of additional dose levels, including 750 milligrams shown in the middle panel, and then tested that dose in HAE subjects.

The results are in line with the simulations and are depicted in the right-hand panel.

Over this dose range, drug levels that exceeded the target therapeutic range for prophylaxis of angioedema attacks in HAE are achieved with a single dose for durations of more than 24 hours of 750 milligrams and about 6 hours of 250 milligrams.

Clinical trials of the injectable targeted treatments in the acute treatment setting, shown on Slide 7, all required that treatment was to be given at the clinic.

These trials were done in the period when at-home, self-administered, on-demand treatment early in an attack, had not yet been established as the standard of care.

Other features of these trials that are worth noting, include the long duration of symptoms prior to intervention, the diversity of outcome measures and variation in both the type of rescue therapy available and when rescue treatment was used according to each protocol.

The takeaway here is that because of the different endpoints and approach to rescue treatment in the prior acute treatment trials, it really is not possible to make valid comparisons between them.

However, for planning our trial, it was important to look at the scientifically correct comparison of treatment effect of active drug compared to placebo in each of these trials individually, shown on Slide 8. Taking each trial separately, the difference between active drug and placebo in a proportion of subjects meeting the different primary endpoints at 4 hours post dose, varied from 16% to 43%.

Similarly, the difference between active drug and placebo in the proportion of subjects who received rescue treatment varied from 19% to 38%.

It's important to note that between 31% and 58% of placebo subjects met the primary endpoint at 4 hours, and between 15% and 64% of the time, placebo subjects received no targeted treatment for their attack.

Obviously, medical care for HAE has changed dramatically over the past decade.

So we needed to craft a protocol that fitted in with modern practice.

Instead of having treatment injected subcutaneously or infused intravenously at a clinic, subjects in ZENITH-1 self-administer oral BCX7353 at home.

Instead of 4 hours to 12 hours of symptoms before study drug treatment, the goal in ZENITH-1 is for subject to treat within 1 hour of onset of symptoms.

These features of ZENITH-1 are consistent with current treatment guidelines.

As you can see on Slide 10, once a patient in ZENITH-1 begins to have an attack, they are asked to call the physician within 1 hour to confirm if it's appropriate for them to take their investigational therapy, which would be 7353 or placebo, and of course, the study is blinded so neither the patient nor the investigator knows which they are receiving.

Importantly, we ask patients to wait at least 4 hours before reaching for any rescue medication.

This provides an opportunity to see a treatment effect.

Of course, patients do have the option to reach for rescue medication at any time they feel it is needed.

We have been monitoring conduct of this study throughout on a blinded basis and these operational aspects have proceeded very smoothly.

The efficacy endpoints of ZENITH-1 have been selected to maximize their ability to identify one or more clinically meaningful endpoints for a subsequent registration trial.

There are multiple ways to win here.

What matters to patients and physicians as clinically meaningful when we share the data, will play a big role in interpreting the results.

Which of these endpoints will translate well and which won't, cannot be determined until then.

But the opportunity to assess multiple endpoints is the beauty of an exploratory study.

We can run the experiment against these endpoints and then take the most meaningful one forward to the regulators as we design the registration trial.

We look forward to unblinding Part 1 of the trial and reporting the results later this quarter, and subsequently, the full study results in the first half of 2019.

In a moment, Lynne will discuss some of the commercial aspects of the acute market.

But I do also want to update you on our APeX program for prevention of HAE attacks.

As many of you know, we completed a successful Phase II trial for prophylaxis of HAE attacks, called APeX-1, and we were honored that just 2 weeks ago, our peer-reviewed paper was published in the New England Journal of Medicine.

In addition, regulatory authorities have recognized the potential advance in medical care that 7353 could represent, with fast-track designation by the U.S. FDA and promising innovative medicine designation by the U.K. MHRA.

We believe that APeX-1 provides a strong foundation for APeX-2 and highlights the value of an oral once-daily therapy for prophylaxis.

APeX-2 enrollment continues to proceed very well, and we remain on track to report 24-week data in the second quarter of 2019.

We are also pleased with the progress of the APeX-S long-term, open-label safety study.

From a clinical standpoint, we believe that 7353 represents a highly differentiated therapy that both patients and physicians have an urgent need for.

I'd now like to turn the call over to Lynne, who will share some of our commercial perspective around the acute and prophylactic markets.

Thank you, Bill.

From a commercial perspective, we are looking forward to the results of the ZENITH-1 and APeX-2, and we're thrilled to see the New England Journal publish our Phase II data.

We've conducted market research with HAE patients, physicians in pairs, and this research consistently reinforces that there is a strong desire for oral therapies in a landscape of injectables.

Based on current trends and our forward view, we believe that the HAE market, particularly in the U.S., will grow disproportionately in the prophylaxis segment.

However, there will remain a smaller but important opportunity for acute therapy in patients who have less frequent attacks or [at the] rescue therapy for prophylactic [treaters] and particularly in Europe, where acute therapy is the standard of care.

Bill reviewed the clinical rationale for ZENITH with you, and there is also strong commercial potential for convenient acute therapies.

This was demonstrated recently by the significant growth in first half of 2018 year-on-year sales of Firazyr despite the launch of HAEGARDA in the second half of 2017.

There is no doubt that the HAE marketplace is competitive.

What is required for success is a highly differentiated product, assembling an experienced and talented commercial team with trench warfare experience and investing the time and resources to develop a great plan with flawless execution.

As we move forward towards important, upcoming data milestones and closer to potential approval and launch, we are advancing our commercial planning and moving to expand our commercial team.

We are getting closer to a new era of HAE therapy, our goal to transform the $2 billion HAE marketplace and to provide patients and healthcare providers with both the first HAE oral prophylactic therapy and also the first oral acute therapy.

Now I'd like to turn the call over to Tom.

Thank you, Lynne.

Before I talk about the second quarter, I'd like to discuss 2 recent transactions that significantly strengthened our balance sheet and extended our cash run rate.

Those events were the July refinancing of our mid-cap debt, resulting in a $30 million term loan with a 12-month interest-only payment period and the completion of a $57.5 million public offering that closed yesterday, both resulting in aggregate net proceeds to us of approximately $64 million.

Both events were initiated shortly after merger termination, were the result of a focused pursuit of our standalone strategy and have been closed efficiently and early in the third quarter.

These events increase our June 30 cash and investment balances of $122 million to a pro forma amount of $186 million.

These transactions are important, as they extend our cash runway into 2020 and past our APeX-2 data and provide us the financial resources to prepare for 7353's filing and launch as well as to advance multiple compounds into the clinic.

Turning to our second quarter results on Slide 16.

Our revenue for the second quarter of 2018 increased to $12.5 million as compared to $3.1 million recorded in the second quarter of 2017.

The increase was due to $12 million of revenue, recognized upon the EMAs approval of peramivir, comprising $7 million of deferred revenue, a component of the $34 million upfront payment at Seqirus deal signing in 2015 and a $5 million milestone payment.

This $12 million was partially offset by lower collaboration revenue under U.S. government development contracts.

For future quarters, you should expect revenue to be lower as compared to this quarter and the prior year's quarters, especially in those quarters outside of the normal flu season, as our government development contracts have had very little activity in 2018 -- which we expect to continue -- and there are no remaining milestones under the Seqirus agreement.

As a guide, we recommend -- we recorded approximately $350,000 of revenue in the second quarter and approximately $650,000 for the 6 months of 2018 under our government development contracts.

Second quarter 2018 R&D expenses increased to $21 million from $15.8 million incurred in the second quarter of 2017.

This increase was primarily due to increased spending on our HAE and preclinical programs as well as additions in R&D personnel to support the evaluation -- the evolution of our programs.

Much of the increase, as in the first quarter, is the result of expenses from the ongoing APeX-2, APeX-S and ZENITH-1 clinical trials.

These increases were partially offset by a decrease in galidesivir expenses due to lower activity in 2018 as compared to 2017 under the U.S. government development contracts, as mentioned in my revenue commentary.

General and administrative expenses of $9.5 million increased significantly in the second quarter of 2018 as compared to $2.8 million for the second quarter of 2017.

The increase was largely the result of a $4.9 million reserve recorded for the EMA milestone payment mentioned earlier, as well as merger-related costs that we incurred in association with our terminated merger.

As previously discussed and disclosed, we are engaged in a formal dispute resolution process with Seqirus that involves many items under our agreement, including the payment of the EMA milestone.

Furthermore, we incurred a $6 million merger expense reimbursement to Idera in the third quarter, so we expect our G&A expenses to continue to be considerably higher for at least another quarter, as we record final merger and merger termination costs.

Moving below the operating line.

We incurred $2.2 million of interest expense in the second quarter of 2018, which is in line with the $2.1 million incurred in the second quarter of 2017.

Our net loss in the second quarter of 2018 was $18.5 million or $0.19 per share as compared to $16.9 million or $0.21 per share in the second quarter of 2017.

Moving on to Slide 17.

Our cash balance was approximately $122 million at June 30, 2018, and our cash utilization for the second quarter of 2018 was $18.4 million.

As you can see on the slide, we have adjusted our financial information to reflect the third quarter transactions, yielding us a pro forma cash balance of $186 million and a debt balance of $30 million.

As mentioned earlier, these transactions enhance our cash runway and extend our liquidity into 2020 as well as beyond the expected announcement of our APeX-2 efficacy results.

In regard to 2018 guidance, which we updated on July 11 after merger termination, we expect our cash utilization to be in the range of $85 million to $105 million, and our operating expenses to be in the range of $90 million to $110 million.

Consistent with previous quarters, our operating expense guidance excludes equity-based compensation, due to the difficulty in reliably projecting this expense, as it is impacted by the volatility and price of our stock as well as by the vesting of the company's outstanding performance-based stock options.

In summary, we are very pleased that we have completed 2 very focused and efficient financial transactions to strengthen our balance sheet and provide operating runway well past APeX-2 results.

We are now focused on trial completion, NDA filing and a successful commercial launch.

Christie, we have concluded our formal remarks, and would -- we would like to open the call up to questions, please.

(Operator Instructions) Our first question is from Jessica Fye with JPMorgan.

I have a couple here.

First, curious if you can comment on where you stand with enrollment and APeX-2, a little more specifically than just going extremely well.

Second, curious what your views are on partnering 7353 prior to data versus -- whether this is something you would only do after data.

Maybe I'll stop with those 2. And then I have a follow-up.

Sure.

Thanks, Jess.

So with regard to enrollment, we did narrow it down a little bit.

We had said first half of next year, we've now said second quarter.

And we're real confident that we can hit that.

But until we get last patient first visit, there's really not a greater detail of information that we can give.

With regard to partnering of 7353, other than, perhaps, a selected territory like we've talked about Japan in the past, just because it's more difficult for smaller biotech companies to put up a commercial organization in Japan.

We're -- we have no intentions of out-licensing and giving away the value of what we think is an incredible asset to somebody for upfront payments, royalties and milestones.

So no intention whatsoever.

Lynne was brought on board with her experience in rare diseases at -- from CSL, and she's already started to build a small team that will be growing over time.

And she's really, as she said, to be good at this competitive marketplace, where you have to get people to switch therapies, you had to have battled in the trenches in other competitive markets, and Lynne has the scar tissue and the success on her track record and that's why brought her on board, so we're really excited about moving into that evolving part of our history and have every intention of launching this on our own.

Okay.

Got it.

And maybe just one more on ZENITH-1 with a number of things you're kind of measuring in that trial.

Do you expect the magnitude of benefit to be sort of consistent across these metrics?

Should it be just generally tracking together directionally?

Or are there areas where you think the product could have more differentiation or greater magnitude of benefit on some of these metrics relative to others?

Jess, thanks for the question.

So this exploratory study, I think, we'll learn a ton from.

I don't know what the magnitude of benefit might be that we might see and -- or we'll know soon enough from Part 1. I think the history of all of the other studies in this space is fascinating and each study had a different endpoint when they got to Phase III, one compared to the other, there's a big placebo effect in this -- in that particular setting.

So it's very hard to predict that.

What's clear is that a treatment affecting the range of about 20% to 40% compared to placebo, was plenty enough to get drugs approved for treatment of acute attacks.

Our next question is from Liisa Bayko from JMP Securities.

This is Jon on for Liisa.

Well, I guess just a follow-up on that last question.

That range you gave us for benchmarks, is -- are any of those that visual analog scale improved or stable after 4 hours similar to what your primary is?

Or what should you -- what should we look for as far a range on your primary outcome?

So just to clarify, the protocol doesn't actually specify a primary endpoint, that's deliberate.

Simply lists all of the things we're measuring.

We looked at all of the endpoints that others had studied.

In some of the programs, the endpoint flipped in Phase III and one Phase III study was done with one endpoint and then it flipped to a different one in the next study that was required for licensure.

None of the endpoints are the same from one study to the next to the next.

This is an area where you really need to explore proportion of subjects benefiting and do that in different ways.

You need to explore the time to mean -- clinically meaningfully events that happen in the treatment of the attack and do that in different ways and then figure out what you want to take forward to Phase III.

So there's no regulatory requirement to specify a primary endpoint for a Phase II trial.

We didn't do that.

We had to type something in the field on clinicaltrials.gov; that's a quirk of the way that system is set up.

But this particular trial doesn't have a specified primary endpoint, and that -- given its exploratory nature, what we really want to try to do here is evaluate the results and figure out with patient advocates and experts, does it matter?

And if the results are good, and it matters, then we've got a program.

And Jon, I think your point about the visual analog scale after 4 hours is important.

After 4 hours in our study is very different from after 4 hours in other studies, because remember, as Bill said, a lot of times people didn't get treatment until 4 hours to 12 hours in these other studies, where we're asking to start treatment after 1 hour.

So that's a great example of why you don't want to make cross-study comparisons.

Yes.

The only valid thing to do here is look at placebo versus active in each individual study by itself.

Got it.

And then just one bookkeeping question.

With operating expenses $57 million in the first half and you're guiding to $90 million to $110 million.

Can you just walk us through kind of your relative SG&A and R&D expectations for the second half to get within that guidance?

Yes, I mean, I think that from an R&D perspective, the first half is a pretty good guide of what we expect for the rest of the year.

And we just reiterated our guidance for operating expenses.

So that is a contemporary, and we feel very strongly that we will be in that range.

Our next question is from Brian Abrahams with RBC Capital Markets.

First off on the ZENITH study.

Appreciate the context, and it sounds like there's many ways to potentially show activity.

I'm sort of wondering, are there elements that we should be thinking about, things like the self-administration, self-assessment and ability to use rescue therapy, that could make it more challenging to show the same magnitude of benefit as prior acute on-demand treatment studies or -- drugs have shown.

I think your comments are right on the mark, Brian.

This is a completely different era of treatment, now that people have access to at-home medicines.

It's fascinating to look at even in the old studies, how many of the subjects who got placebo wound up not getting their attacks treated.

It's really, really different from the experience that we have in -- and everybody else has had in prophylactic trials where 80% of the attacks get treated with targeted therapies now.

So the -- we really had no choice here, right?

I mean, we have to fit in with current guidelines, and you want to have peoples' attacks treated early if they need it, but it could limit it.

I think we'll see soon enough what the results are and whether we have a technically successful study and whether any of those endpoints are meaningful.

But it wouldn't surprise anybody if, in the current era, those aspects limit the ability to detect activity.

I think on top of that, Brian, that's why there are so many of these endpoints in this basket in this study is to make sure that we look for something that shows the difference between placebo that's meaningful to patients and clinicians, and we're pretty confident that within that study, we have that.

That's really helpful.

Can you speak about -- it sounds like the timelines are primarily on track across the board, but just wondering if you could speak about the impact that the merger process may have had on your operation's trial conduct and personnel, if any?

And then I have one more follow-up.

Yes.

In terms of the impact on the trial, I mean, one of the things, I've said this repeatedly, one of the things that I'm really proud of the team, Bill's team in particular, is that they really stayed focused on driving the trial.

And so -- these trials are not easy to conduct.

We've got sites, basically, around the globe, and there is lag times outside of the U.S., in the U.S. they come up faster and then there's quality issues and the like.

And one of the things I'm really pleased by is that we really didn't skip a beat.

We're on track to hit all of our timelines on all of the programs, and I think that's a real testament to the commitment of our employees and their understanding that there's a real need out there by patients.

So we had very little turnover, as a result of this.

And yes, we're -- I would say, minimal disruption.

That's great.

Last question for me.

On the APeX-2 study, are you through yet the interim analysis where you'd be potentially recalculating the sample size based on the variability, standard deviation in that study?

No.

So...

You might want to explain what it is.

All right.

That plan was to have 50% of the subjects through 24 weeks.

So we only ever did that in February.

(Operator Instructions) Our next question is from Maury Raycroft with Jefferies.

So first for the New England Journal Medicine publication, congrats on that.

There's some additional supporting data in supplemental figures that highlight the benefits of the 125 or the 110-mg dose.

Now I'm wondering, if you could talk about some of the additional analysis, including benefit on Angioedema Activity Score and also duration of attacks.

And could the benefit on duration of attacks have any readout through to the acute setting?

Maury, thanks for the questions.

We are super pleased by having that come out in New England, of course.

And kudos to our investigators and collaborators for doing a great study.

So with regards to the AAS core, it's an interesting metric.

It's -- I think, not as validated, for example, as the AeQoL, the Angioedema Quality of Life score, but it did track with benefit on both the reduction in attack rate and also the improvement in quality of life measured by the AeQol.

And overall, what it tells you is that the overall burden of severity of illness went down with treatment, which is what you'd expect.

With regard to duration of attacks, that's quite hard to interpret and craft a story around.

There's quite a lot of variation, if you look at that particular table, there is very wide variation in the duration of attack.

Some of that, no doubt, at the higher dose levels is misattribution of abdominal adverse events as we've discussed on previous occasions.

So I'm not putting too much emphasis on the duration of attack.

So in the Phase III program, it's just like other Phase III programs for prophylaxis.

This is a totally different situation compared to acute.

The endpoints are very well worked out, and it's all about the rate of attacks.

So that's the primary endpoint in the Phase III.

And the Angioedema Quality of Life index is a very important secondary efficacy endpoint in the Phase III.

Got it.

And that's helpful.

And then based on some of the additional details on patient baseline characteristics, are you seeing any additional trends in APeX-1 that may inform future analyses, particularly around the APeX-2 data?

And I guess can you discuss if there are populations more likely to respond or patients who may even be better responders than others?

That's a fascinating question or a set of questions.

I think, in APeX-1, what we saw in a covariant analysis is that despite the imbalances in sex and prior antigen use across the different cohorts, the outcome was the same.

If you ran that covariant and looked at the effect, so the effect did not disappear when we adjusted for that.

So we're not expecting that type of thing to have a significant influence.

APeX-2 is a very different design, because it's a traditional, randomized cohort design where the allocation of subjects to the different dose levels on placebo is done at the same time.

So it's not a huge study, but it's a pretty big study by HAE standards, and I would expect that the randomization process will work just fine and that those factors will be well balanced across the different groups.

As part of the analysis for the NDA filing, you are always required to look at subgroups of sex and age and race and so on, and we'll do all of those analyses at that point, but it's -- our expectation is that we'll be fine.

There is evidence from the literature that the severity of illness and the frequency of attacks is worst in woman with HAE than it is with men, and that's driven by estrogens.

Now our expectation is based on APeX-1 that we'll be able to show the effects are similar in the different subgroups that I described.

And Bill, is it fair to say that the biggest difference between APeX-1 and APeX-2 in terms of entry criteria is the frequency of attacks?

Because you've got 24 weeks instead of 4 weeks, we can allow people with less frequent attacks into this study.

Yes, that's true.

At the end of the day, we'll end up getting what we get.

And so we won't know what the placebo attack rate is on study, of course, until we unblind it, and that will be very interesting to see -- it's -- how to make a prediction that -- I think, we've got good experience with high-attack frequency average subjects and we'll see what we get in APeX-2.

Our next question is from Gena Wang with Barclays.

Most of my questions have already been answered.

Just one simple question regarding ZENITH-1.

Just wondering, you did have a comprehensive list of endpoints you wanted to test.

Just wondering from the doctors' feedback or physicians or doctors, I don't know if you have any feedback from FDA, what kind of endpoint to them would be most clinically meaningful, in terms of clinical benefit?

That's a fascinating question.

The reason we've got all of those endpoints is because of the advice of the experts who we consulted, who treat these subjects.

And so we're measuring the things that matter to them.

I think that my comments around what's clinically meaningful are around which of those work out and what's the magnitude of the benefit and how does that impact, how do patients see it and how do physicians see that as a potential for a primary endpoint in Phase III.

I think they're all very interesting endpoints.

They fall into the buckets of what proportion of subjects benefit and how quickly do they benefit.

That's the way to think about it.

So both of those types of endpoints are meaningful.

And I have to say when -- as practicing as a physician, I could never explain what a visual analog score point difference meant to anybody.

It's still hard to explain.

It's much easier to explain, look, you're going to get better faster and this is by how much or your chance of getting better is so many times better.

That type of explanation resonates with patients.

So I think the actual numerical stuff around the visual analog scale is important for statisticians, not so important for the patients.

Okay.

Maybe just follow-up.

Any feedback from FDA that which endpoint that more likely will -- or like what kind of endpoint more likely will be approvable endpoint?

That's an end of Phase II question, and we'll make a proposal based on robust analyses.

Assuming success in ZENITH-1.

We'll do a great job, put together our briefing document and ask that question at the end of Phase II.

And we will also go through the EMA scientific advice process and ask the same question.

So I think that just like we did for the pivotal program for prophylaxis, we'll get the best advice and make sure we come up with a trial that satisfies regulatory requirements.

Yes.

But when Bill and the team conduct their advisory meetings, they have not only people -- experts in the field that treat HAE patients but also regulatory experts as well that weigh in on could these be meaningful to the agency.

So that advice goes into construction of a Phase II exploratory trial protocol.

I see.

Any differences regarding doctor feedback between Europe and the U.S.?

Everybody is on the same page with regard to what they want for their patients.

They want more convenient, safe and effective therapies.

The interesting oral treatment for both prophylaxis and acute is very high, both in Europe and the U.S. and around the world.

The practice of medicine is different, because of a whole bunch of factors, including the failed launch of Cinryze for prophylaxis in Europe at that time.

So I think that on-demand acute therapy and on-demand therapy as a management strategy has been quite popular, especially in the Northern European countries.

I think it would be very, very interesting to see what happens when it comes to the time when Lynne's team is launching 7353 for prophylaxis because that, obviously, that NDA timeline is pretty set, and we're looking forward to filing that and filing the MAA soon after.

And so we -- it will be just wonderful if we could convert a lot of those patients onto prophylaxis.

There will always be a need for acute therapy, I think we get that message very consistently.

And there are always going to be breakthrough attacks, so there will always be a need for acute treatment and having an oral option.

I think we were encouraged by physicians and by patient advocates to pursue that because they thought it was a good option.

Yes.

I mean, the bottom line is if patients and their -- the doctors who treat them see some benefit in being able to take an oral to have a benefit on the progression of their attack, this thing's going to get used.

Versus injecting yourself, I mean, it -- this is absolutely going to get used, if we can show that in this trial.

And we have another question from the line of Serge Belanger with Needham & Company.

Just had a follow-up question, again, on the opportunity for acute treatment.

I think in the past you said that the BCX7353 would not be the ideal treatment for a laryngeal attack or whenever there's nausea and vomiting.

Just wanted to get an idea what that means for the market opportunity?

In our internal database, which is growing and pretty large on all of the prophylaxis studies we've done, we collected lots of information about how subjects treated their acute attacks that happened while they were on the trial and the anatomical location of those attacks.

Laryngeal attacks are the least common, maybe 1% or 2%, and that fits in with what the literature says about the relative infrequency of laryngeal attacks.

Your introductory comment applies to every oral therapy.

So all oral therapies are useless if you can't absorb the drug.

So if somebody is vomiting, they should have an injectable.

Vomiting as the first symptom is relatively uncommon.

If the guidelines -- by the way, people still die of laryngeal attacks with this disease.

They're still happening in the U.S. in 2018.

So there are -- the medical need here for better prophylaxis is quite strong and the guidelines strongly encourage patients to seek medical care when they have any laryngeal symptoms, in addition to self-administering their injectable treatment as soon as possible.

And when we've talked to physicians and patients about what do those instructions sound like, it's like, give yourself the medicine, get driven to the emergency room.

And because you don't know what's going to happen in the next little while, and that's because the airway is so narrow, obviously.

So you really have to take that seriously.

In all of the studies of acute medicines, laryngeal attacks have been handled differently than the other anatomical locations and that's just as true for ZENITH.

So laryngeal attacks are not suitable to study with acute oral medicine for that reason.

I mean, it'll shrink the market a little bit, but I don't think it's going to make a dramatic difference in what kind of revenue we see for acute therapy.

I mean, remember what's driving this is to be able to take an oral drug for treating your attack versus injecting yourself with a needle.

I mean, that's just -- that's a big difference.

And so our sense is that from patients we've talked to and physicians that, that's a real differentiator and preferred route.

And I think as part of the ZENITH-1 trial right now, patients contact their healthcare professional before taking the oral drug.

Is that correct?

Yes, because it's an experimental medicine, and we want to make sure that they're not vomiting and they don't have airway symptoms.

So that's the key reason [for the] call.

And I'm showing no further questions at this time.

I'd like to turn the call back over to Mr. Jon Stonehouse for any further remarks.

So again, I want to thank everyone for joining our call today.

We're entering a really exciting period.

With the financing behind us, we're now focused on getting to some very important milestones, starting with the readout of ZENITH, the Part 1, part of that study.

This quarter, APeX-2 results of the final analysis of the 24 weeks.

In quarter 2 of next year, don't forget, we're moving preclinical assets that we find very interesting, and we hope to move those into the clinic in the first half of next year.

And then of course, a really exciting place to be of filing a new drug application for 7353 for prophylaxis in HAE in the second half of next year.

So a lot of exciting things to come, and we will look forward to updating you along the way.

Thanks, and have a great day.

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

This does conclude today's program, and you may all disconnect.

Everyone, have a great day.