BioCryst Pharmaceuticals Inc (BCRX) 2021 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the BioCryst Third Quarter 2021 Earnings Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

I would now like to hand the conference over to your speaker today, Mr. John Bluth at BioCryst. Sir, please go ahead.

Thanks, laurence. Good morning, and welcome to BioCryst's Third Quarter 2021 Corporate Update and Financial Results Conference Call. Today's press release and accompanying slides are available on our website.

Participating with me today are CEO, Jon Stonehouse; CFO, Anthony Doyle; Chief Commercial Officer, Charlie Gayer; Chief Medical Officer, Dr. Bill Sheridan; and Chief R&D Officer, Dr. Helen Thackray. Following our remarks, we will answer your questions.

Before we begin, please note that today's conference call will contain certain forward-looking statements, including those 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 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'd now like to turn the call over to Jon Stonehouse.

Thanks, John. Three quarters of the way into 2021, and this has been an amazing year of execution for our company. The successful launch of ORLADEYO and the rapid advancement of our pipeline are the evidence.

ORLADEYO is our first oral drug to get to the market, and by all measures, including that we did it in a pandemic, we significantly exceeded everyone's expectations prior to launch. We now have a good line of sight to the trajectory of sales and have guided that for the full year we will achieve between $115 million and $120 million in net revenue.

What's even more exciting is we're just getting started. Charlie will share more color on the launch and what opportunities for continued growth lie ahead. The bottom line is patients with HAE want a once-daily oral medicine to prevent their attacks. The strongest evidence of that is they are switching from injectable therapy even when they're controlled and satisfied with these treatment options. Why? Because they want more. They now see an option to control their disease and the ability to reduce the burden of therapy. Our market research told us this 2.5 years ago, we're seeing it play out exactly the same way in the marketplace and Charlie will share recent surveys that show those attitudes will increase in the future.

As we continue the consistent, steady growth of the launch in the U.S. and continue to gain approvals and launch in other countries around the world, our confidence that we will substantially exceed our global peak sales target of $500 million grows stronger every quarter.

ORLADEYO is showing that oral drugs can have a huge impact on the lives of patients with rare disease. But what if we could repeat this over and over, again in many different rare disease settings? That's our strategy, and we have a world-class discovery platform that differentiates us through its unique capability to develop potent, specific and orally bioavailable compounds against very difficult biologic targets. ORLADEYO is the first to make it to market from our discovery engine and our oral Factor D inhibitor BCX9930 is next.

Going after Factor D as a target allows us not only to bring another oral drug to patients suffering from a rare disease, but there are multiple diseases to treat with an oral Factor D inhibitor as the alternative pathway plays a key role in many complement-mediated diseases. After demonstrating proof of concept in PNH patients late last year with 9930, we are now in pivotal studies in PNH and a proof-of-concept study in 3 nephritis indications.

Our pipeline is full and following quickly behind ORLADEYO. There are many more rare diseases to pursue and many patients waiting for any drug, let alone an oral drug, to treat their disease. 2021 continues to be an extraordinary year for BioCryst, and the good news is we're just getting started.

Now I'll turn the call over to Charlie for more details on the ORLADEYO launch.

Thanks, Jon. This launch got off to a great start 11 months ago, even better than our own high expectations. We knew going in that HAE patients really wanted an oral drug to prevent attacks, and that is exactly what we are seeing as the number of patients taking ORLADEYO grows steadily months after months.

For the third straight quarter, we saw the same strong volume of new patients starting on ORLADEYO. More than half continue to switch from other prophy treatments, and patients are staying on therapy in line with our expectations because they're doing really well.

We also continue to see more physicians embracing ORLADEYO. The prescriber base grew by another 25% in Q3 and now includes nearly half the top 500 HAE treaters.

Access also continues to improve. Nearly all new patients benefit from our Quick Start program, but the average new patient now receives paid product within 30 days.

As strong as this launch has been, we see a trajectory ahead that will make ORLADEYO the market leader in HAE prophylaxis. Comprehensive market research with large samples of HAE patients and physicians has long shaped our expectations and guided our strategy and has proven to be very accurate in predicting what we are seeing in the launch.

In August, we surveyed another 60 U.S. physicians who treat an average of 7 HAE patients each. They reported favorably on their clinical experience and see use of ORLADEYO doubling to become their most prescribed prophy treatment over the next 12 months. Our internal prescription data back this up. The number of repeat prescribers among the top 500 HA physicians is substantial and has doubled since the first quarter.

There are also multiple catalysts that will continue to fuel this launch. For example, the new 96-week data from APeX-2 showing sustained 80% reduction in attacks is persuasive to physicians. That level of long-term attack control is what they expect from a prophy therapy and the data gives them even more confidence to prescribe ORLADEYO.

We also recently began in-person patient education programs, which will be critical to activating patients and spreading word-of-mouth experience. And we are very excited to attend our first in-person major medical conference this weekend with a college meeting in New Orleans. We will present data on how well HAE patients do when they switch to ORLADEYO from other prophy products. So stay tuned.

U.S. sales will account for nearly all of what we report in 2021, but global launches will add future inflection points to ORLADEYO growth. A key example is the favorable NICE recommendation for ORLADEYO received in Q3 for patients in the U.K. By the end of this month, ORLADEYO will be covered for HAE patients having a history of 2 attacks or more per month. In contrast, Takhzyro and Cinryze are covered for a much more limited group of patients experiencing 2 or more attacks per week. This coverage will allow patients in our EAMS-expanded access program to convert to reimburse product and will make ORLADEYO the first-line prophy treatment for the great majority of the U.K. market.

We also recently secured reimbursement approval in Norway, a market where only androgens and Cinryze are currently available. Launches are underway in Germany, France, Japan and the UAE, with more to come. We intend to bring ORLADEYO to HAE patients all over the world. And with composition of matter patent protection through October 2039, we have many years of global growth ahead.

It boils down to this. ORLADEYO is a drug that can change the lives of HAE patients by controlling attacks with a minimal burden of treatment.

I'll turn it over to Helen to expand on how our clinical data aligned with the real-world experience we're seeing.

Thanks, Charlie. The ability of ORLADEYO to prevent HAE attacks has been truly impressive, and this is something we're hearing consistently from physicians based on their own experience prescribing ORLADEYO. The pivotal trial experience in the first 24 weeks of the APeX-2 trial was just the beginning of our understanding of the potential for ORLADEYO's impact on HAE attack rate.

Now, in the long-term follow-up of clinical trial patients, we've seen an average 80% reduction in attacks from baseline. This is in the 96-week data, which shows that patients have durable, substantial reductions in attacks. The original demonstration of a 44% reduction in attack rate was in comparison to the placebo group, and it was at the early time point for the pivotal trial registration endpoint. Even then, at 24 weeks, we saw that there was a substantially greater drop in attacks when compared to an individual's own baseline attack rate. We observed then that 50% of patients were having 70% or greater reduction from their baseline attack rate.

Now that there is real-world evidence from the launch in the U.S., that high rate, a 70% reduction or more, that we observed is consistent with what we're hearing from providers. They tell us patients are doing well, and continue to do so.

Now in our long-term follow-up from the trial, we can see why. With this understanding, we are excited about the future opportunity here. We know that patients do well and have large, sustained reductions in attack rates as they continue ORLADEYO.

To go into a little more detail on the newer information that we find so compelling, what we presented at the EAACI conference in July, is that with long-term treatment, attack rates are generally reduced to a greater extent, and this outcome is durable.

Specifically, on Slide 5, you can see that in the patients who completed 96 weeks of treatment with ORLADEYO, almost 2 years of treatment and an 80% average reduction from the mean baseline attack rate per month was observed during Parts 2 and 3. And median attack rates decreased over time from 2.7 attacks per month at baseline to 0 attacks per month in 16 of 17 months during Parts 2 and 3. What's notable here is that the response, the reduction in attack rate is durable. Patients are staying on treatment and experiencing an enduring result. Not only that, we see large reductions in attack rate regardless of prior prophylactic treatment experience. And patients on ORLADEYO have decreased needs for on-demand treatment.

Finally, ORLADEYO continued to be generally well tolerated through the long-term follow-up treatment, which is also consistent with our real-world experience observed through 11 months of launch. We are seeing most patients staying on therapy and having an excellent experience on ORLADEYO. More and more physicians are seeing for themselves the strength and durability of efficacy with ORLADEYO, the excellent tolerability profile and just how happy their patients are when they switch to ORLADEYO.

As Charlie mentioned, we are excited to be heading to New Orleans this weekend for the American College of Allergy, Asthma & Immunology meeting, which will be our first live meeting since we launched. It will be an opportunity for doctors to come together and share their experiences with each other. We'll also be presenting our new data on outcomes for patients who switched from injectable prophylaxis to ORLADEYO.

Of course, right behind ORLADEYO, also coming from our Discovery Center of Excellence in Birmingham, we have our next oral medication for rare diseases, BCX9930, rapidly advancing in development across multiple indications. Bill reported in our last earnings call that we have proceeded to pivotal trials in PNH and the momentum continues to build. Today, Bill will give an update from that study, including the clinical changes we've seen in patients.

In total, the observations in this study provide robust evidence of clinical effect and the impact on how patients feel when treated with BCX9930. Based on these data, we conclude there is exciting potential for 9930 to be an effective therapy for the treatment of PNH, and we have turned our full focus towards the pivotal program in PNH and expanding into subsequent indications. We are confident that this drug has the potential to deliver improvements in both the burden of disease and the burden of treatment and to do so with durable benefit for patients. Bill?

Thanks, Helen. As Helen noted, the PNH program for BCX9930 has moved directly from a proof-of-concept dose-ranging trial to pivotal trial, with dose selection, endpoints and trial designs agreed with the regulators. A reminder of the primary and key secondary endpoints in our 2 pivotal trials is shown on Slide 8. In both trials, change from baseline in hemoglobin is the primary endpoint measure. Both pivotal trials include measures of red blood cell transfusions and also an important quality of life metric, the FACIT-Fatigue score as key secondary endpoints.

Importantly, these endpoints reflect the goals of treatment of PNH patients with complementary inhibitors to correct anemia, reduce or eliminate transfusion burden and relieve symptoms.

In the REDEEM-2 placebo-controlled trial in patients with PNH not treated with C5 inhibitors, percent change from baseline in LDH is also a key secondary endpoint.

As shown on Slide 9, the efficacy evaluation in REDEEM-2 is at week 12. In our long-term rollover safety trial the patients who continued from the proof-of-concept trial, we have 9 patients naive to C5 inhibitors who have received BCX9930 monotherapy for up to 19 months as of the end of September. Hemoglobin over time in each patient is displayed in the panels in the figure on Slide 10. We analyzed the proof-of-concept data with doses of 400 or 500 milligrams BID according to the measures of benefits relevant to REDEEM-2, -- with the outcomes shown in the table on the same slide. As you can see, hemoglobin rose from a baseline by a mean of 3.7 grams per deciliter, all 9 patients were transfusion-free, LDH dropped by 65% and FACIT-Fatigue scale total score rose by 7.1 points.

For those not familiar with this score, the minimum clinically important difference is 3, so that's very impressive.

These proof-of-concept results give us confidence that oral dosing with BCX9930 will perform well against placebo in patients not taking C5 inhibitors in REDEEM-2.

The patients who had inadequate response to C5 inhibitors also into the long-term rollover trial from the proof-of-concept trial, with BCX9930 initially added to continued C5 inhibitor treatment. The [displays] of the data are set up on Slide 12 in the same way as the C5 inhibitor naive cohort.

In REDEEM-1, the efficacy outcomes will be measured from week 12 through week 24. We have presented the results both overall and excluding data from 1 patient who would be ineligible for a day 1. In that analysis, the mean change from baseline in hemoglobin from weeks 12 through 24 was 2.7 grams per deciliter, 80% of patients were transfusion-free and the FACIT-Fatigue scale score rose by 3.4 points.

One patient who developed anemia after COVID-19 vaccination was recently discovered to have a warm antibody analytic anemia disease. This immune reaction to vaccination was unrelated to PNH or to BCX9930. The patient was transitioned to BCX9930 monotherapy but withdrawn from long-term follow-up due to this diagnosis and development of other unrelated illnesses.

In 3 other patients transitioned to BCX9930 monotherapy, benefits were maintained.

These results give us confidence that all dosing of BCX9930 will perform well in the REDEEM-1 against continued C5 inhibitors in patients with inadequate response to those medications. No safety signals were being seen in long-term dosing with BCX9930. The accumulating favorable long-term safety profile, together with the evidence of benefit that I've described, make us very excited to complete the pivotal trials as quickly as we can and file our regulatory applications for approval in the U.S. and around the world.

I'd now like to hand the call over to Anthony for an update.

Thanks, Bill. Having both significant revenue from ORLADEYO and an even bigger fast-follower across multiple indications with 9930 presents a fantastic opportunity to deliver for patients and drive value for shareholders. You can find our detailed third quarter financials in today's earnings press release, and I'd like to call your attention to a few items.

Revenue for the quarter was $41 million, of which $37 million came from net sales of ORLADEYO.

Operating expenses, not including noncash stock compensation, for the quarter were $72.5 million.

Our gross to net adjustment, including access to free drug, continues to improve and is on track towards our target of 15% to 20% of peak sales.

As John said, with our expectation that ORLADEYO will generate net revenue for full year 2021 of $115 million to $120 million and revenue from international regions set to become more meaningful, we are very well positioned for a strong 2022 and beyond.

We ended Q3 with $204 million in cash, cash on hand, continued revenue growth from ORLADEYO and access to the additional $75 million available from Athyrium, gives us cash runway into 2023. This cash position and continued access to multiple different sources of capital, enhanced by our strong results and execution, puts us in an outstanding financial position to fully invest in launching ORLADEYO globally and to advance our Factor D program.

Based on the trends that we see, we are very confident that the strong launch of ORLADEYO in the U.S. will continue and be enhanced as international markets come online. With 9930 as a fast-follower and with more to come from our R&D engine, few biotechs are as well positioned for significant and sustained growth and value creation as we are here at BioCryst. It is a very exciting time to be a BioCryst shareholder.

Operator, we'd now like to open it up for Q&A.(Operator Instructions) Your first question comes from the line of Tazeen Ahmad from Bank of America.

A couple. Maybe one on ORLADEYO. So Jon, can you give us a sense of where in Europe right now, you're starting to get sales? Presumably Germany would be one of those countries? And can you give us a sense about how the dynamics in Europe might in any way be different than the dynamics that you've seen here in the U.S.? Meaning you've seen a fast uptake here. Would there be any reason to think that you wouldn't see a fast uptake in Europe?

And then secondly, for PNH, maybe a question for Bill. Based on your inclusion criteria, how is enrollment in your mind likely to proceed? And when do you think you would be in a position to have top line data?

Sure. Thanks for the question, Tazeen. Charlie, just make sure I get this right. So in Europe, the contributors where we're launching and selling drug are in Germany. We actually have a cohort ATU in France. So we're selling in France. And as Charlie mentioned, in the U.K. by the end of the month, patients will have access and we'll be selling drug in the U.K.

The difference, I can tell you that COVID has had a bigger impact. There's less telemedicine going on in Europe than there had been in the U.S. And so patient-doctor interaction has been less. So I think the ramp is a little bit slower. But we expect a pretty good contribution for 2022. And the team has really been working hard at getting set up.

And Charlie, you might just want to talk a little bit more about NICE and the EAMS and why you're so excited about the U.K.

Yes. I mean -- thanks, Jon. The U.K. is very exciting, and it's 2 things. One, any time you get a positive recommendation from NICE for any rare disease, that's a big deal. And the fact that modern prophy has been very limited to that niche of patients with 2 attacks per week or more, but with ORLADEYO, it's going to open up much wider with 2 attacks per month or more. So there are a lot -- majority of the market, frankly, that ORLADEYO will be eligible for. And then we have those EAMS patients that we can convert, and we expect to do that over the next few months. And so the U.K. is probably the one place like the U.S. where we can get out of the gates a little faster, Tazeen.

Yes. And then, Tazeen, the last point that I'll make before I hand it over to Bill is, as we add a country, it's an opportunity to get more patients and generate more revenue. And Norway is an example. And we'll continue to do that over the course of 2022 and beyond.

So Bill, do you want to take Tazeen's question around entry criteria and impact on enrollment?

Sure. Yes, Tazeen, thanks for the questions. I think the eligibility and the other characteristics of these studies and the opportunity to investigate a proximal complement inhibitor with the characteristics of 9930 make both studies very attractive actually. And there's plenty of excitement from the hematology community in participating in these studies around the world. So I don't see particular barriers with regards to the eligibility criteria.

Both studies are on track to start off. We're very busy doing that right now. It's really hard to predict when we'll finish enrollment because the field is so competitive. So until we have the first few months under our belt and see what the trajectory is like, I think it would be hard to predict exactly when we'll finish.

Okay. And do you think that there would still be any kind of COVID impact, at least in the developed world?

So I think people have started to figure out how to continue clinical trials during COVID. I mean, we did that in the proof-of-concept trial, you have to make adjustments, of course. But medical practice had to go on, telemedicine as an example in the U.S. I think that there have been supply chain disruptions, as we all know, there are all sorts of impacts. But I think the community, in general, is figuring out how to continue and go to clinical trials.

One other point that I'd like to make that Bill probably won't brag on, but I'll brag on for him, is the quality of execution that he and his team have demonstrated with the HAE program. Large numbers of sites around many different countries and that can add risk, but Bill's team has done a great job of ensuring absolute quality and then really high-touch connection with every single site, medical monitors talking to investigators about the patients they're planning to enroll. And so that oversight and high quality, high touch makes a big difference, not only in speed, but in the quality outcome of the trial. So that's an important piece to success in a pivotal study.

Your next question comes from the line of Brian Cheng from Cantor Fitzgerald.

Team, so maybe for Charlie, I wonder If you can provide a bit more color on the growth of the prescriber base. It seems that the growth rate has fluctuated a bit this quarter compared to the last. How much of the fluctuation do you think is due to the summer holiday and the Delta variant headwinds that you mentioned previously on the second quarter call? And do you have any color on the pace of adoption in your Tier 1 versus Tier 2 prescriber base? Have you seen any significant difference between the 2? And then I have 1 more follow-up.

Great. Thanks, Brian. So on the overall prescriber base, it's growing really strongly. And so I think you're referring back to in Q2, we said that the base grew by 50%. This quarter, it grew by 25%, but on a much larger base. And I think that's the key thing to pay attention to.

And as far as Tier 1 versus Tier 2, as I said in some of my comments, what we're particularly excited about is the penetration and growth in the Tier 1 top 500 physicians. So we're up to about almost 50% of them have prescribed. We're seeing a doubling of repeat prescribing amongst those docs. And then our forward-looking market research tells us, with docs just like that they expect to double again over the next 12 months. So it's going really well. We still get business from the next year, and we're still going to explore every corner of this market because there are patients everywhere, but Tier 1 is going fantastically well.

Great. And then 1 more on access. Can you remind us how payer access looking now on commercial insured patients? And then how should we think about access for ORLADEYO in the new year?

Yes. Payer access continues to go well. So first off, patients are getting -- the average patient gets the paid product really quickly, so within 30 days, that's what we expect, and we expect it to continue to improve.

We've had great progress throughout the year in terms of coverage policies. We had a couple more wins in Q3. But we still have some payers to go, and we expect continued progress through the rest of this year and into early next year.

As we turn into the second full year, that will be a key time for us, too, as patients switch around plans and we're ready for that. So we feel really good about where we are with access.

Your next question comes from the line of Liisa Bayko from Evercore.

Just can you clarify what you include in net revenue guidance for ORLADEYO?

Yes. So included in the net revenue is, like we said, it's -- the vast majority of it is going to come from the U.S. And so included in it is the, I think, 74.5 year-to-date. And then in Q4, it will be the U.S. plus the European countries that we have added.

And just again, to bear in mind, from a revenue perspective here in the U.S., it's based on shipments, no stocking, no stockpile orders. Just when it gets direct to patients, that's when we'll recognize the revenue.

Okay. And that's not net of your royalty to RFP, and it's not -- it doesn't include the Japanese royalty?

Yes. So it does include the Japanese. It doesn't include the full amount of the Japanese revenue because that's owned by Torii. What you'll see is it will hit our royalty line, the portion that we take from Torii. It does not include the royalty, that's below the line.

Yes. Okay. And can you give us a sense of what gross to nets were for the quarter?

Yes. What we've said is that gross net continue to get better. So Charlie talked about access and how the access has continued to improve. The vast majority of the adjustment for the gross to net continues to be free products. We are seeing adjustments as when we get payors added. It will continue to get better quarter-over-quarter, and at least we're still on track to get to that 15% to 20% that we've talked about when we hit our peak sales.

Okay. Great. And then what kind of compliance persistence are you seeing thus far?

Charles?

Compliance, if you're talking about compliance or people taking their medicine 1 pill a day has been really high. So it's been north of 90%, just like we saw in clinical trials. And then persistent patient retention has been very strong as well, in line with our expectations.

What does that mean? What are your expectations?

So right now, (inaudible) through Q3, 80% of patients who've started on ORLADEYO are still on ORLADEYO. And over a 1-year period, we see that settling period, we see that settling out at around 70%. So about 70% of patients staying on ORLADEYO across the year.

Great. Okay. And then so for the third quarter, can you just describe -- I mean you talked about net revenue, does that include -- there's some Ex-U.S. revenue in there, I assume. Could you maybe just talk about it.

Yes, Liisa, it is nearly all U.S. revenue.

Okay. Okay.

The contribution outside the U.S. will -- you'll see more in 2022.

Okay. And then just another question for me. You kind of talked about looking forward to more developments from your research engine. So can you talk a little bit about that? And then along those lines, any update on the FOP program.

Sure. The beauty of the strategy is we have this discovery platform where we can build, as I said in the prepared remarks; potent, specific and orally bioavailable molecules on really hard biologic targets like serine proteases and kinases. And so -- and we've seen that others have tried it and have been unsuccessful, right, and stumbled. And so you got to be able to do all 3 to bring an oral medicine to these patients.

And so we're working with our oral Factor D inhibitor, as you know. And Helen and others are working hard at what indications do we go beyond the 4 we've already chosen and are starting to study. And so that's really exciting.

But then as you said, the L2 inhibitor for FOP, we're playing a bit of catch-up on that front with getting drug supply and tox work, but nobody is going fast. In this space, it's a hard disease to tackle, and we still believe there's a lot of unmet need. And the data we see thus far in our Phase I trial gives us a lot of confidence that 9250 as a shot at being a real therapy for these patients that have nothing.

And then there'll be more to come. Babu and team are working in Birmingham on other rare disease targets. And when they're ready for prime time, we will be sharing what else we're going after and what we're investing in for more drugs for patients with rare disease.

So when will we hear more about FOP, like what's precluding you from moving it forward now? Or what are the next steps in the timing?

Yes. The bulk of this year has all been about the drug supply and tox. So there was really no opportunity to get into any kind of clinical development.

Then another important step is talking to the regulators about what the path is. And so making -- this is a disease that the earlier you treat, the more impact you have. And so what's required, to get to those aged children to have that kind of impact. So we've got to work through that. And then also continue to figure out the design of the trials moving forward.

So right now, I can't give you a time frame on when we plan to start clinical trials, but we're trying to go -- we're trying to speed that up a lot, and you'll hear more about it next year.

Okay. Great. And then sorry, just to clarify, I didn't catch everything Charlie said about, he kind of gave some color on something doubling over the next 6 to 12 months. I didn't catch everything. I was wondering if you could just repeat as you were talking about kind of like patient adds.

The market research.

Yes. Sure, Liisa. We do large surveys with doctors. We did another 60-physician survey, average of 7 HAE patients for each of those docs. And what they said is they're really happy with what they've seen so far, and they see their prescribing doubling over the next 12 months to become their most prescribed HAE prophy therapy.

Your next question comes from the line of Stacy Ku from Cowen and Company.

Congratulations on the progress. I have a few. First, given your commentary about the Q3 tailwinds in the last few months, very encouraging to see continued solid growth. So can you provide any early thoughts on your current expectations for next year? And then can you also comment on the percent of sales calls that have been face-to-face at this point? How much growth would you expect without this impact on COVID? Could you provide some level of magnitude? And I have a follow-up.

So Charlie, why don't you talk about the things that you think are going to kick in to adding value in 2022, and I'll handle the question about what we expect.

Yes. Absolutely. So Stacy, some of the things I mentioned on the call, first off, the 96-week data that both -- that I talked about, Helen talked about, showing sustained 80% reduction. That's been really persuasive to physicians, and we're just starting to roll that out. So that's a big one.

We are starting to do live patient meetings, which is another big thing, because patients don't like to do things on Zoom. And that face-to-face contact and word of mouth is really important.

And then just live meetings with doctors. This weekend, the college meeting in New Orleans, a lot of the key prescribers in the HAE space are going to be there. We're going to be meeting with them. We have new data. And we expect to have many more of those kind of live meetings in the coming year.

All of this is going to contribute to the strong and steady growth in patients that we're already seeing.

And then Stacy, with regard to what we expect next year, we're not in a position to guide you. We've just guided for this year today. So -- but we will. We have -- Charlie has a very good line of sight now on the trajectory of this launch. I don't know if you caught, but he said that from what we see and what we hear from physicians, we expect that this will be the market leader in the prophylactic treatment of HAE patients.

And so as you said, there's a really solid base that we're working on. And Charlie's team is adding a steady and consistent amount of new patients into the funnel every single month.

And as he told you, when Liisa asked the question about discontinuation, and the rate of discontinuation is in line with our expectations, which is much slower than the rate that we're filling the funnel, right? So that just shows you a curve. Hopefully, I'm painting a picture of a curve that's very steady growth. So I would expect that some time in the new year, we'll give guidance for 2022. And at some point, we'll also give an update on our adjusted global peak sales, because the 500 number is no longer accurate and it's definitely on the plus side.

And Stacy, I don't think I answered your question about sales calls, but we have reached 100% of our top prescribers, the top, the Tier 1 physicians. In Q2, we got into a lot more in-person calls. In Q3, I think that dropped just a little bit. But in general, we're making more in-person calls than virtual calls, and we expect that to really continue going forward.

That's really helpful. And one last question on pipeline for 9930. For the renal basket study, when could we start seeing initial or interim data?

Bill, do you want to tackle that one?

Sure. The renal basket study is set up as a real learning experiment in 3 specific nephritis conditions that are driven by the alternative pathway of complement; C3 glomerulopathy, primary membranous nephropathy and IgA nephropathy. So what we want to do here is to learn as much as possible. We also want to make sure that patients have active illness at the time that they enter. And to do that, we require a recent biopsy.

The screening period is up to 66 days to allow for all of that to happen in the central pathology review. And the sites are getting set up right now, moving forward with getting this study started. And we look forward to seeing results evolve over the course of the next months.

I think because these diseases are really rare, it's hard to predict when we're going to have enough data to take a look at and see what the results look like.

As a reminder, the design, it's 14 patients to cohort. So this is going to be an exciting experiment. Field of complement research and nephrology has exploded, as you know. And there is a lot of anticipation and expectation and benefit for these patients who have nothing approved.

Your next question comes from the line of Chris Raymond from Piper Sandler.

Just a couple of questions on the commercial side. So I think you guys -- so you noted today, I think, that more than half of patients new to the drug -- new to ORLADEYO are switching from injectables. And I think I read that your commentary last year -- for the last quarter, sorry, it was about 60%. I know you're not guiding to 2022, but just kind of can you give us a sense, of those 2 patient pools, the switchers versus new to therapy, can you give us a sense of how you expect that to evolve, thinking out maybe a year from now, 2 years from now?

And then maybe the second question. I think I heard you say to a previous question around discontinuations at 1 year, your sort of steady state is around 70%. Do you have a sense now of those patients that discontinue, what's the most common driver? Is it the drug or efficacy/tolerability? Or is it more access-related?

Chris, thanks for the questions. First of all, the evolution of the switching, yes, in Q3, we saw, it was greater than 50%. It was actually a little closer to 60% than 50%, but we see that trend continuing. And back to the market research that I referenced, doctors see that continuing over the next 12 months. They see patients coming from all the different prophy products and acute only.

So eventually, we see the trend has been towards prophylaxis in general, more and more of the patients being treated with prophy, it's the best for patients. And we see that number growing to 80% plus, maybe over 90% over the long term.

So the longer-term growth will probably come from growing the prophy market, but over the next year, we see the same trends of switches from prophy and then the rest being acute only. And some, usually less than 10%, are from newly diagnosed patients or newly treated patients that start their therapy on ORLADEYO.

As far as the 70% retention and the drivers for that. As we said before, the biggest drivers are going to be some patients do have adverse events and we -- GI adverse events, in particular. We set expectations, so patients know that those are likely to go away relatively early in the therapy that helps.

And then the other is just going to be perceived efficacy. No drug is perfect and no drug is for every patient. So that will be the other big thing.

It really has not been access. And that's because we've done a really good job of helping patients access ORLADEYO. And if the payer doesn't cover it, we give them access anyway if they're doing well on therapy. And so patients and doctors are responding really well to that.

And Chris, I'd add to what Charlie said at the beginning. There is still a huge opportunity for patients that are well controlled on their prophy therapy that haven't made the decision to switch yet that we believe will get over time. And when patients talk to patients, when doctors talk to each other, when we get more access to them, we think that's going to be a continuous, steady flow of new patients on to our drug.

Your next question comes from the line of Jon Wolleben from JMP Securities.

Congrats on all the progress. A couple for ORLADEYO for me. You mentioned a couple of times you expect ORLADEYO now to be the market leader for HAE prophylaxis. I'm wondering if that's primarily supported from the survey you discussed? Or is it also trends you're seeing with demand out in the real world?

And then, Jon, you mentioned this also, you're looking to change your peak sales assumptions. I'm wondering where that could land. I think Takhzyro is still expected to be about a $1 billion product. So if you could discuss kind of how you think that dynamic plays out over time, that would be helpful.

Yes, Charlie.

So thanks, Jon. On the market leader perspective, what we're seeing is, as I described, really strong and steady growth month-over-month in patients. And so that's the primary sign what we see in our own internal data, that steady growth. And then the market research just supports that, the fact that physicians see it as well. And we know the market opportunity in these physician groups. We see the repeat prescribing happening among the physicians. You put that all together with the patient's desire for a once-daily oral to prevent attacks, and that's what drives our outlook on that.

Yes. And then on the market leader and where we think the peak will net out. The market leader Charlie is referring to is the most prescribed prophylactic drug, and that's what docs are telling him and we're seeing the switching in the marketplace and have a high degree of confidence now to say that aloud. And we really believe we have the evidence to back it up.

In terms of what that number is, it's significantly north of $500 million, but we're not at a point yet to tell you. So -- but we will be soon telling you. I think the biggest part is how does Ex-U.S. evolve? And how does it contribute to that number?

That's helpful. And just one last one for me. I don't think you've given this out before, but can you tell us what percentage of patients are on free drug? You mentioned the consistent patient adds per month, and it's about 30 days on. So are we expecting a steady flow that just kind of nets out quarter-over-quarter? But today, can you tell us, is it 10%? 25%? 40%? Just in terms so we have a sense of when those patients roll over to paid drug.

Yes, Jon. So as of Q3, it's about 1/3 of the patients who are on free drug. And they -- over time, we expect more than half of those patients on free drug to move over to paid product. It's not going to happen all at once. It's going to happen as we get additional payer wins. It's going to happen as a new year starts with government payers. So it won't be -- it's not something that's going to happen in Q4. But over time, we expect to get more than half of those patients over to -- and we're excited about that, it's another opportunity for growth.

Yes. And a big chunk of the source of those free drug patients are the new patients that his team adds every month.

Your next question comes from the line of Jessica Fye from JPMorgan.

This is Daniel for Jessica Fye. With the average new patient receiving paid drug within about 30 days now, should we think of the conversion of patients from unpaid to paid representing less of a tailwind for sales going forward?

So I think, Daniel, look, so 2 parts there. One is the fact that patients are getting to paid so quickly gives patients and doctors a lot of confidence. That's something that they worried about, and we're really pleased with the progress there.

And then the -- what I just mentioned about patients converting from free product to paid product, that's going to happen over time. And it is a tailwind. It's not an instant tailwind, but it's something that we expect to make progress over the coming months, contributing to that steady growth in patients and revenue going forward.

Yes. And again, I don't want to sound like a broken record, Daniel, but it's also a function of how many new patients do we add every month, and Charlie's team has done a phenomenal job of that.

Okay. Great. And then in terms of cash, following the attempt at equity offering earlier in 3Q that didn't go through and given you have cash runway into 2023, can you talk about how do you think about funding for the company going forward?

Yes. Yes, I can take it. So I think we're in a really strong cash position, right? And I think it's primarily driven by 2 parts. So the cash on hand that we have, the access to capital through the Athyrium deal, the revenue that we have coming in from ORLADEYO, calculate how we get to that kind of net cash burn.

And then in terms of a future perspective, it's the access to numerous sources of capital. So I think gone are the days when we'd be solely reliant on equity, and we proved at last December with the debt and the royalty deals that we have multiple other avenues that are available for us to raise. So I feel like we're in a really strong cash position. If and when we do make raise, we'll make sure it's strong cost of capital.

You referenced the equity raise that we withdrew in Q3. I mean that honestly, unsurprisingly, probably the least attractive at this point in time for us to use from a source of capital perspective.

Great. And then one last question on 9930, maybe for Bill. With this new update for those patients, for the 6 patients who are C5-inadequate responders, we see change in hemoglobin of plus 2.3 grams per deciliter. Maybe can you elaborate that and frame it in comparison to the R&D update where we saw a change of 3.2 grams per deciliter.

Sure. Thanks for the question. So the way we approached today's update is to think about the endpoints in the pivotal trials and how they're going to be calculated. So specifically for the inadequate responder study, where we'll be randomizing patients who are still anemic despite a C5 inhibitor with a stable dose, to either continue the C5 inhibitor or to take BCX9930, the primary endpoint and the FACIT-Fatigue both measured has changed from baseline upon looking at week 12 -- the visits from week 12 through 24. So that's 12, 16, 20, 24. So the average of that. So that's a difference to the way we've talked about the data before, which was just whatever the last treatment visit was compared to baseline. That's the primary difference.

The second difference here is that we had a couple of -- we've had some events like the one I described with the development of an unrelated illness, which happened to be autoimmune hemolytic anemia in one of the subjects, and that obviously affected the hemoglobin, you could see that in the middle panel in the figures on the bottom row.

So they are the key differences. I think what's important here is that this is what we see in the context of cohort around the world right now. There are literature reports of those type of complications. Obviously, there -- just is likely to happen on the control arm as they are on the active arm. So nothing has changed in terms of our enthusiasm and positivity around the ability to show clear and clinically meaningful difference compared to continuing to C5 inhibitors in that study.

Yes. One thing I'd add, Daniel, is that the whole intent behind Bill showing you the data the way he did is to tell you that if we measured -- if this was our pivotal study, we would succeed, right? And so that's why we did the calculations based on how the endpoints are calculated in the pivotal study. So with 6 and 9 patients, it's incredibly encouraging to see this data and that probability of success in the pivotals is very high.

Your next question comes from the line of Brian Abrahams from RBC Capital Markets.

This is Steve on for Brian. Congrats on the progress. You spoke a bit about the pipeline earlier in the FOP program in particular, but I'm curious if you can share a bit more about your plans for galidesivir moving forward.

Yes. We continue to work with the government. You know that antivirals are an important part of dealing with COVID. COVID doesn't look like it's going to be going away anytime soon. And so treatment and an antiviral is still important. These programs go at the speed that the government moves them, and so that's where we're at right now. But we're continuing to get funding and continuing to do work to advance that program.

Your final question comes from the line of Gena Wang from Barclays.

I have a few regarding ORLADEYO launch. The first one is you mentioned that it will be less than 10% patients are newly diagnosed patients in your patient pools. Wondering what that number will be, the percentage, in the context of overall newly diagnosed patients.

And then my next question is regarding your guidance. When we look at the guidance, the 4Q seems largely flat. Is that due to the conservatism?

And then lastly, how is the pricing Ex-U.S. versus U.S.?

Charlie, why don't you take the first and the third, I'll take the second. But you can take them both and then I'll go to that.

Got you. That's Okay. Gena, so as far as the less than 10% newly diagnosed, I should be specific about that, we don't know if they're all newly diagnosed. We just know that they're newly -- to us, they appear to be newly treated with HAE therapy. So it's some patients -- we actually expect most of those are patients who are sitting on the sidelines but with an oral or coming forward and now treating their therapy.

In the U.S., at least, we think that the newly diagnosed, every year, there are patients who come out, but it's a relative -- it's a mature market, and that's a relatively small percentage.

As far as the price Ex-U.S. versus U.S., it's going to be lower, clearly. But our launch price in -- just to give you a sense, our launch price in Germany is EUR 200,000. That's the price that we get to set at launch, not the final price, per year compared to USD 485,000 WACC.

And then our price -- our list price in the U.K. is GBP 133,000. And so that will give you a sense.

In general, the European price is going to be 50% or less of the U.S. price, but we see the volume opportunity makes it really attractive to us.

Yes. And with regard to guidance, we feel we're at a point where -- and we told you we wouldn't give you guidance until we could accurately guide you, we feel we can now. There is growth in that number. And it's steady growth off of a really nice base. And this is our first fourth quarter, by the way. It's the holidays. We don't know exactly how the holidays affect shipments and prescribing and patient visits and the like, and so we're factoring that into this as well.

Okay. Just wondering, does that mean like, in 2022, do you anticipate the main growth driver will be Ex- U.S.? And how do you see the contribution Ex- U.S. versus U.S. in terms of the growth?

Yes. No, the growth is going to come largely from the U.S. and there will be additional inflection points coming from the sales that will start to heat up Ex-U.S.

And let me just remind you of what Charlie is doing that will help that. It's the patient-patient direct interactions, those meetings, face-to-face meetings that Charlie said we've started to implement, those are going to make a big difference. Face-to-face doctor meetings like the conference we're about to go to, doctors talking to each other, they're not even aware because they're not talking to each other about how the launch is going other than what they're hearing from us.

The 96-week data that Helen talked about, we're really just getting going on getting docs to understand that.

And then there's switch data that we're going to be sharing at the college meeting that we'll be able to use as well.

So all of that is going to have an impact on the trajectory of the U.S. sales going forward.

And then the last piece, Charlie's market research has been pretty accurate thus far. And he just did another big study, and it says that the physicians that are prescribing are going to double their prescribing in the future. So we expect that, that will contribute as well. So there's definitely continued growth in the U.S., no doubt about that.

There are no more phone questions. Mr. Stonehouse, any concluding remarks?

Yes. Thank you. So as Charlie and Helen said, the 3 of us and the commercial team are heading to New Orleans tomorrow. This is incredibly exciting for us because it's nearly 12 months since our approval and our PDUFA date, and this is our first true face-to-face medical meeting. And we're just so excited. Our schedules are packed. We're really looking forward to -- we've got posters, we've got an oral session, we've got sessions with physicians and other meetings.

And so we couldn't be more excited to be heading down to New Orleans to our first face-to-face major medical conference. And it's the first time we will actually have a real [booth] in the exhibit hall. So if you're at the meeting, I would encourage you to stop by and say hello.

So as always, thank you for your interest in our company, and have a great day.

This concludes today's conference call. You may now disconnect.