BioCryst Pharmaceuticals Inc (BCRX) 2022 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the BioCryst Pharmaceuticals First Quarter 2022 Earnings Conference 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, John Bluth, Head of Investor Relations at BioCryst.

Thanks, Daniel. Good morning, and welcome to BioCryst's First Quarter 2022 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 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, expressed or implied in this presentation. Do 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. With nearly $50 million in net revenue in the first quarter of this year, ORLADEYO quarterly sales continue to provide us with real-world evidence and confidence quarter after quarter that we remain on track for no less than $250 million in net revenue this year, $1 billion in global peak sales.

What's particularly important this quarter as we faced the expected headwinds from some payers requiring reauthorization, higher co-pay deductibles and the impact of the Medicare donut hole, is that our team still tapped into strong patient and physician demand for ORLADEYO and produced quarter-over-quarter revenue growth.

ORLADEYO plays a critical role to our strategy. And the growing revenue stream is creating value by providing evidence our company can discover -- develop and commercialize successful products and by strengthening our financial position.

There's plenty of opportunity to capture too. Charlie will go into more detail on this and talk about the things we are doing to get this important medicine to every HAE patient, who wants to try it around the world. And why wouldn't they, if they had a chance to be controlled on 1 capsule, once a day.

So for the remainder of the year, each quarter, we expect that there will be steady revenue growth over the previous quarter, culminating with an annual revenue of no less than $250 million. That's more than a doubling of the first year sales and 1/4 of the way to our $1 billion peak sales expectation in just the first 2 years of launch.

Based on what we see so far this year and the trajectory we're on, we remain very confident we can achieve these targets. Our pipeline is another important part to our strategy. Our team has made significant progress in the investigation of the serum creatinine increases in patients in our BCX9930 clinical trials since we first identified this a month ago.

While the investigation is not complete, we believe dose is the most likely cause of these elevations, and we'll work with regulators to see if there's a path forward to restarting clinical trials. Bill will share more details on this topic.

Regardless of the outcome, patient safety is paramount to us and finding a safe and effective Factor D inhibitor remains something we are very committed to because we know many patients suffering from complement-mediated rare diseases are waiting.

Whether it's 9930 or one of our backups or both, our goal remains to bring a highly competitive oral Factor D inhibitor to patients. We will follow the data and make thoughtful decisions on what to invest in and what not to invest, in based on how it helps us reach this goal.

Time to market, how the competitive landscape changes and our product profile will also be important factors in our capital allocation decisions.

So when you step back and you look at our company in its entirety, you'll see it's a company with a growing revenue stream coming from a product and a team that's showing they can execute and successfully launch a drug that we believe will grow to $1 billion at peak.

We have a pipeline to create even greater value, with the goal of bringing more and more products to the market, to patients suffering from rare diseases. And we have a discovery platform that has and will continue to discover innovative molecules to fill our pipeline even further.

And finally, we have a solid balance sheet to allocate capital to those things we believe create even greater value. When you see all of that, you see meaningful value creation today and even greater value creation for the future. I'll now turn the call over to Charlie to talk about ORLADEYO.

Thanks, John. The first quarter was another strong one for ORLADEYO. The patient base continued to grow steadily. And even with the headwinds of payer reauthorizations, we finished with $49.7 million in ORLADEYO sales and are on track for no less than $250 million in sales for the year.

We are confident about the growth trajectory because it is becoming increasingly clear how well patients are doing on ORLADEYO. We are seeing 3 cohorts of patients emerge. Those who are doing great and stay on therapy, those who are still deciding if this is the best treatment for them, and those who decide it isn't.

The size of each of these groups is fluid, but the group doing well and staying on therapy is by far the largest and is driving our sales growth. What we are seeing is that the patients most likely to do well and stay on ORLADEYO, are those who were well controlled on an injectable prophylaxis before switching.

We are getting real-world evidence from our specialty pharmacy, showing that patients who were well controlled on Takhzyro at baseline, for example, are staying equally well controlled on ORLADEYO.

These patients switching from Takhzyro, represent a sizable and growing cohort because 50% of all patients on ORLADEYO in Q1 originally switched from another prophy, and half of those came from Takhzyro.

That switching trend continued for patients starting ORLADEYO in Q1 and shows no sign of changing. The real-world evidence is consistent with the 96-week data from our pivotal study, showing that the median attack rate was 0 in 16 out of the last 17 months of the trial.

It is also consistent with data from our long-term safety study, showing that patients switching from injectable prophy were attack-free in over 80% of months on ORLADEYO.

Further evidence of how well patients are doing is that after switching to ORLADEYO and the prior authorization process is complete, 78% of Takhzyro patients and 73% of Haegarda patients continue on ORLADEYO for at least 6 months.

Patients switching from acute-only therapy have similar retention. We're also seeing that access and reimbursement correlates with long-term patient retention. Overall, reimbursement access improved in Q1 and now nearly 80% of patients on ORLADEYO are on [paged] drug, up from about 2/3 in the second half of last year.

This improved access is important, not only because more patients are receiving paid therapy but also because we are seeing that 70% of patients who reach paid therapy, continue on ORLADEYO for at least 12 months, compared to 60% retention for patients who remain on long-term free product.

We believe the size of the patient cohorts that I described are fluid because some patients are making their decision about ORLADEYO too quickly. 1/3 of all discontinuations to date have occurred after just 1 shipment, and 50% overall within the first 2 shipments.

Education and expectation setting are critical in the early phase of treatment, and we have added new members to the team to support patients in this process.

If a patient has a high probability of doing well, those well-controlled prophy switchers, for example, we want to make sure they don't give up too quickly after an early breakthrough attack or side effect because they might miss out on the long-term benefits of ORLADEYO.

The clinical trial in real-world evidence that I described is convincing physicians, leading to greater breadth and depth of the ORLADEYO . In the first quarter, new patient prescriptions were evenly split between new prescribers and repeat prescribers.

We also saw an even split in new prescriptions coming from our Tier 1 top 500 HAE treaters and the broader base of treaters. Our latest quarterly survey with allergists again, matches the prescribers -- prescribing trends and tells us how much more opportunity remains.

We surveyed another 60 allergists, who treat an average of 8 HAE [units]. They were already prescribing ORLADEYO to 13% of their patients and predicted growth to 23% over the next 12 months, neck and neck with Takhzyro for future market leadership.

We expect the favorable patient outcomes, new prescription trends and improved reimbursement to drive steady quarterly growth on our way to no less than $250 million this year.

The patient growth trends we see give us confidence that at peak, we will reach a stable base of at least 2,000 patients in the U.S., who have great outcomes on ORLADEYO. That's just 25% to 30% share out of the 7,500 diagnosed and treated patients and would generate up to $800 million in annual sales from the U.S. alone.

As we've noted before, the U.S. will account for the great majority of sales in 2022, but international launches are gaining momentum. We have launched with our own team, Germany, France, the U.K., Norway, Sweden and Denmark and with partners in Japan and UAE. We anticipate several more launches and reimbursement approvals this year.

And we are busy preparing multiple regulatory and reimbursement submissions. The favorable reception that ORLADEYO is getting from regulators, payers, physicians and patients across countries and regions bodes [well with the] strategy to bring ORLADEYO to patients around the world on our way to $1 billion in peak global sales. I'll turn the call over to Bill for an update on our clinical program.

Thanks, Charlie. While we have not completed our investigation into the serum creatinine elevations we observed in our BCX9930 clinical program, we have made significant progress. And I want to provide an update for you today on what we have learned thus far and what the next steps are.

As you may recall, at the time we announced that we were halting patient [enrollment] in April, we had 4 active clinical trials with BCX9930. These are summarized on Slide 4. Patients in REDEEM-1 and REDEEM-2 randomized to 9930, and patients enrolled in RENEW began the trials by starting immediately at 500 milligrams twice daily.

Patients in the long-term extension for our proof-of-concept study had started at lower doses, and all patients were ultimately moved up to the 500-milligram dose. We currently have 3 patients from our REDEEM trials, who had severe or moderate elevations in their serum creatinine, beginning several weeks after starting BCX9930 at the 500-milligram dose level.

These lab findings indicated renal injury, which is why we proactively paused enrollment to investigate further. Two of the patients were hospitalized for observation and evaluation, and both were discharged after their initial evaluation. These 3 cases involved a rise in serum creatinine of about 2 to 4x the [upper limit] of normal.

We are pleased to see that kidney function has improved in all 3 patients with a fall in their serum creatinine levels during the short period of observation thus far. 2 of these patients have been discontinued from therapy.

The patients who had the smallest rise in serum creatinine, continues on BCX9930 at this time. 3 patients we noted with early onset increases in serum creatinine, represent approximately 1/3 of the patients randomized to 9930 in the REDEEM studies. In other patients in the REDEEM trial for serum creatinine, has remained similar to baseline.

Additionally, during the investigation, we learned that about 40% of the patients in the long-term extension study has had slowly evolving, late onset, mild to moderate increases in serum creatinine, which started about 3 to 12 months after they switched to the 500-milligram dose.

This is not observed during treatment with doses lower than 500 milligrams, and none of these patients have experienced early-onset severe serum creatinine elevations.

So here is the summary of what we know so far. We are observing an emerging signal of increasing serum creatinine early during treatment and also after chronic treatment. Although there may be other factors contributing to these events, it is prudent to assess this signal as probably related to BCX9930.

It is noteworthy that we have not seen elevations of serum creatinine at doses lower than 500 milligrams, and we have not seen early-onset increases in serum creatinine when we start with a lower dose.

And in the proof-of-concept study, we have also seen that BCX9930 has encouraging efficacy in PNH patients with increases in hemoglobin and reduced transfusions at both the 400-milligram BID and 500-milligram BID doses.

Of course, we are very disappointed by these safety observations, especially considering the strong efficacy we have seen with BCX9930 and the unmet need for better treatments for patients.

No one wants patients to experience these types of events in clinical trials. And the key question for us now is to explore with regulators whether or not there is a path forward for the program from a benefit-risk perspective.

Throughout our investigation, we have been and continue to be in active dialogue with the study sites and investigators, our independent Data Monitoring Committee and the FDA and other regulators.

The FDA has placed the BCX9930 program on a partial clinical hold. Under this partial clinical hold, BioCryst may not enroll new patients in its BCX9930 clinical trials. However, patients already enrolled, who are receiving clinical benefit from BCX9930 treatment and have no other available treatment options, can continue to be dosed and remain in the trials.

BioCryst had already taken the same action voluntarily, prior to the partial clinical hold. And we have, of course, provided study sites with updated inform consent language for patients and guidance to investigators to reflect the new safety risk.

So what comes next? We know BCX9930 shows strong clinical efficacy. This clinical efficacy is seen at both 400 milligram and 500 milligram as illustrated on Slide 6. These efficacy observations are supported by the PD data from BCX9930, showing complete inhibition of Factor D at both the 400-milligram and 500-milligram dose levels.

Based on what we are learning in the investigation, the preliminary evidence points to both 500 milligrams twice-daily dosing and the immediate start of that 500-milligram dose level without a period at a lower-dose first as plausible contributory factors for the serum creatinine increases we have observed to date.

Since we have also seen similar efficacy with BCX9930 at 400 milligrams and have not seen serum creatinine elevations at this dose, we plan to complete the investigation and then consult with regulators regarding a possible path forward with amended protocols, using stepped dosing to 400 milligrams.

If they agree with an approach like this, we could restart the clinical program. But if they do not, unless we identify another path to pursue, we would likely terminate the program.

We expect to have clarity from regulators on whether or not there is a path forward for BCX9930 by the end of the third quarter. We do not plan on providing interim updates as we progress through these interactions.

However, we look forward to completing our investigation and regulatory discussions. We plan to update you once we have clarity on our next steps for the BCX9930 program. Now, I'd like to hand the call over to Anthony.

Thanks, Bill. Given the early stage of our discussions with regulators, it's premature to provide revised guidance for OpEx. In the scenario where we recommence enrollment, then spend would likely be at the low end of the $440 to $480 million range that we guided to previously. If we discontinue the 9930 program, then spend in 2022 would be lower than that.

What I can be more certain of is the strong performance of ORLADEYO and our confidence in our revenue guidance of no less than $250 million for this year and peak global sales of $1 billion. This, as well as our other pipeline assets, give us a tremendous base to build on.

You can find our detailed first 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 $49.9 million, of which $49.7 million came from the net sales of ORLADEYO. Having finished 2021 with revenues of $122 million, this puts trailing 12-month revenue for ORLADEYO at over $161 million as we progress towards our 2022 guidance of no less than $250 million for the year.

Operating expenses, not including noncash stock compensation for the quarter, were $90.3 million. Quarter 2 of 2022 will likely be higher, given the annual guidance that we gave on OpEx previously, with 9930 investment in CMC and trial expansion being the main drivers.

Cash at the end of the quarter was about $447 million. With the [$75 million] from Ethereum that we've agreed to draw in mid-2022, our balance sheet is very strong. We are deploying this capital towards programs that can create value for the company and for shareholders.

Investment in ORLADEYO continues. We are investing to strengthen our launch here in the U.S. while we also expand our reach in bringing ORLADEYO to patients around the world. We will also continue to invest in our pipeline. The targets that we go after are hard targets, and there are always challenges.

The challenges that we had with avoralstat in HAE, paved the way for the success that we are now having with [ORLADEYO]. We are hopeful that we can continue to move forward with BCX9930. And with the strong efficacy data that we have shown thus far, we think that we can help patients in PNH and beyond.

But we will be smart about it. If we can move forward, we will move forward with speed and focus. If we cannot, then we will reallocate capital to programs that can add value in complement and in other rare diseases.

With the strength of the ORLADEYO launch, the Discovery team and our development pipeline and our strong balance sheet, we are well positioned for future growth. Operator, we'd now like to open it up for Q&A.

(Operator Instructions) Our first question comes from Ken Cacciatore with Cowen.

Thanks for the for the update. Just wondering if we could get a little bit deeper into some of the analysis on the 400 milligram. Just can you talk about duration on treatment or anything that you've learned from that patient group?

I know you talked about efficacy, but just wondering, as you look into the safety, it seems as if the duration on that, when they were kind of moving through, was a little bit shorter. So I just want to know any more analysis you could provide on that.

And then also, just wondering, if we talk about the R&D, understanding the commentary on reallocating, can you just give us some perspective, however, on the percent that's being allocated right now to 9930? Maybe a little bit more color on would it be completely allocated. Unfortunately, if we have to stop it, to what degree do you think, going forward, there would be adjustments lower?

Bill, do you want to take the first one? Anthony, second.

I can. Thanks for the question. The way that the proof-of-concept study was done because this is such a rare disease and to be efficient in that trial, we had a combination of intrapatient dose escalation as well as starting at higher doses in sequential cohorts of small numbers of people.

So the result of that certainly is that as the trial matured, the duration on 400 milligrams was substantial, but the duration on 500 milligrams was quite a bit longer. So as I mentioned in my remarks, the observations are confined to the 500-milligram period.

It's a plausible hypothesis that, that's what's driving this. But we can't rule out other factors, obviously, but that's where we stand on the data.

Yes. And then in terms of capital allocation, so what we've said is that last year, for example, the Factor D program was around 62%, 63% of our total R&D spend and that this year was going to be even higher. Now hopefully, we can move forward, albeit with a delay.

If we can, we'll make sure that in the areas that we reallocated to have those potentials to create additional value. And I think we've been clear, it will be potentially in both the complement space and in other rare diseases, where we think we have a strong pipeline and a really good Discovery team.

Our next question comes from Jon Wolleben with JMP Securities.

Along the same lines on 9930, I just want to make sure I heard this right, were there 9 patients enrolled so far across the REDEEM trials? And then, where the 3 patients with elevations, were they all treatment-naive or C5-inadequate responders? And any other common characteristics between the patients with the elevations?

Thanks, John, for the question. As I mentioned in the remarks, the -- we only unblinded the patients who had the elevations. So it's an estimate that approximately 30% of the enrolled patients have had those elevations in the REDEEM studies. And those 3 patients do come from both REDEEM-1 and REDEEM-2.

And maybe one for Charlie, if I may. You mentioned the number of patients switching from Takhzyro. Do you have any data on how long those patients were on Takhzyro before switching?

Jon. No, we don't have that. But what we do have is data showing they were stable on Takhzyro. Most of these patients, when they switch to ORLADEYO, kind of maintain that same level of control, once they switch over to ORLADEYO. So that's what's really important.

Our next question comes from Chris Raymond with Piper Sandler.

Also a question on 9930 and a couple of them, if you may -- if I may ask. So I guess, I just want to understand, the patients that were treated at the 400-milligram BID dose, can you just clarify and specify, have you not seen any creatinine level elevation at that dose level.

I guess, what I'm trying to understand is -- and I guess this is probably something for your discussions with FDA, but how -- what's the level of evidence again [you] have that you're not going to see that, the same issue, after longer-term treatment at that dose level?

And then -- I'm sorry, also in the extension patients, you mentioned 40% had -- that level increases. When did that start to show up? What was the trigger, I guess, for actually seeing that effect?

So Bill, it might be helpful to describe the proof-of-concept study, how we escalated, got to 400, then went to 500. I think that might be helpful for the first part of this question.

Sure. So the study was designed so that patients started at a lower dose. And right at the beginning, that was 50 milligrams. And then those few patients stepped through increased doses at 100, 200 and 400 milligrams.

At that period, we did the PK/PD modeling, and we had experience at 500 milligrams and higher doses in our healthy subjects. And we put a lot together and decided to move forward with the 500-milligram dose level in the pivotal. And so all of those patients will then move to 500 milligrams.

So the period of time that people were on 400 milligrams series, in some people, it was quite substantial. And all of the observations have increased serum creatinine, as I mentioned earlier, were only seen in the 500-milligram dose period. So does that clarify the question for you?

And then the second question was around the extension and the 40% and the slower rise.

Yes. So the -- it's after many months of 500 milligrams on average. So I think that another part of your question was what level are we talking about. We're talking about any level above [optimal level].

And when did you start -- when did you first see that affecting the extension patients?

So for quite a long period on drug, but within several months, on average, at 500 milligrams. So there are two [patterns] here, as I mentioned in my remarks. There's this early-onset [pattern] that we saw in the REDEEM studies in those 3 subjects. And there's this later, more mild-to-moderate pattern that we saw in the long-term extension. Both of those observations are confined to the 500-milligram dose level.

And our next question comes from Jessica Fye with JPMorgan.

This is Daniel for Jessica. First, was the duration of dosing similar between the 2 patients who discontinued treatment and the 1 patient who still continues on BCX9930 and REDEEM? That is, did that patient get any worse with continued dosing? And the second question is, can you maybe give us more -- sorry, I'll follow up after the first question.

Okay. Daniel. No, all 3 subjects, who had the early-onset rises in creatinine, are doing better, and creatinine is falling now. And the 1 patient who had continued dosing with 9930, it's come way back down. So the duration of treatment in all is similar prior to the onset of these events. This is early in treatment.

Okay. Got it. And then I guess, one more question on ORLADEYO. Can you give us maybe more color on the persistency difference in between those who are reimbursed versus free -- those on free drug? What could be driving that difference?

It's a good question. It's something we're digging into. I think one of the things is that the reimbursed patients are most likely to be good HAE patients, who meet clinical criteria for reimbursement. And so that's analogous to the stable Takhzyro and Haegarda patients that I was describing.

The other thing is that reimbursement is always -- it's a stressor. It's a worry that patients and physicians have. And as much as we try to help them and make them comfortable through that process, if the payer is not paying, it is something that can lead to stress. Stress can cause attacks, stress can cause people to seek other options.

So what we're really pleased about is how well we're getting patients on to reimbursement. And what that's leading to is, launch to date, about 2/3 of the patients who started on ORLADEYO, are still on ORLADEYO. And we're building this really stable base of patients, who are doing great. That's what's going to drive us to 2,000 patients.

I think the other piece, Daniel, is, this is patients early in the process. And that's where we're seeing the bulk of the discontinuation, like Charlie described. If you stay on longer, the chances are you're going to stay on the drug. And so that's another factor that plays into this.

So does that mean the patients on free drug don't stay that long -- I think I got it. If I could have one more question on 9930. If FDA doesn't allow for resumption of the trials with amended protocol, what are the potential paths forward for the program? Is there a backup molecule that you can possibly develop? And if so, what stage is it currently at?

Yes. We're still in the investigation stage, and so I can't comment on any other paths at this point in time. But you can imagine that we're continuing to look and see if there are other paths to pursue.

And we're always working on backups. You saw that with avoralstat and ORLADEYO, with HAE and Factor D in the complement area, we're doing the same thing. So they're earlier. And when we're ready to talk about them, we will. But we're always working on backups.

And our next question comes from Tazeen Ahmad with Bank of America.

This is Avi for Tazeen. Just one quick question on 9930. So if you move to 400 mg dose, what do you think are the implications for the efficacy profile?

And then, if you have not observed any increase in serum creatinine below 500 mg, why not just move to 400 mg versus taking the stepped approach? And then on the stepped approach, like -- or what time do you plan to like move up to 400 mg dose?

So I think its first question, Bill, is, why did we move beyond 400 milligrams in the proof-of-concept? And then why did we choose that as the dose for the pivotals?

On the first point, at the time we designed the pivotal studies, we wanted to try to give patients an opportunity to avoid breakthrough hemolysis in the event of sequential missed doses.

So that was a theoretical concern. And at that time, we couldn't distinguish the safety profile of 400 and 500 milligrams or the efficacy profile. So we thought that, that was a reasonable choice.

With regard to the other aspect of this, on efficacy, we're very -- I have no qualms about stepping back to 400 milligrams, in terms of efficacy. There's very good evidence that -- from the proof-of-concept study that that's a fine dose from the perspective of increasing the hemoglobin and the clone size and controlling hemolysis and so on. So that was the decision at that point.

Now we have new information, and it makes sense to propose an alternative dosing strategy, consisting of step-up dosing and limiting the dose. The reason for the step-up dosing is because none of the patients in the proof-of-concept study had early-onset rises in creatinine. And all of the patients in the proof-of-concept study started at a lower dose and then had a step up in dose.

There are other drugs out there on the market, we're starting at a lower dose [avoids] early side effects. So that's a reasonable, plausible hypothesis as a way to move forward. And we'll discuss that with regulators after we complete our investigation and see whether there's a path forward or not.

Our next question comes from Serge Belanger with Needham.

First one on 9930. Can you just describe your FDA interaction since the study was paused and I guess when the FDA issued their partial clinical hold?

And I believe you mentioned you're going to -- you're planning to have discussions at the end of the third quarter. It seems like a long time to wait. So is that an FDA scheduling limitation or additional work needs to be done before this meeting?

No. We were informed a few weeks ago, and we had already communicated that we put a pause on enrollment and that we continued dosing in patients that were receiving a benefit from the drug, and there was no alternative, which is consistent with the partial hold that the FDA had placed.

And we knew that we had an upcoming earnings call, and we were in the thick [of the investigation]. And we thought it was better to have all the information shared at once, so that you could have the context. So that was the decision.

John, I think, he asked a question, too, about like the timing between now and when we go back to the FDA.

Yes, that's a hard one to predict. And so we said by the end of the third quarter, we'd be able to get there. But obviously, you can imagine we want to work as quickly as we can to get a proposal in front of them. And then there's a clock that goes, and so we'll go through that process.

If we get on the first time, there may be a second go that -- and maybe a meeting, all that stuff. So we'll see how that unfolds. But we think that it could happen by the end of the third quarter.

Okay. And then just one for Charlie on ORLADEYO. I think you mentioned there were some challenges with [prior ops] in the first quarter. Just curious if those were the results of the usual reset of deductibles or there was something else impacting those prior ops and if they've been resolved?

No. It was the expected stuff, Serge. So it's there's always a bolus that happens in that -- in the first quarter as payers kind of do the annual reset.

So it was what we expected. And I think John mentioned in his comments, it was patients stepping back to free products during the PA process, it's Medicare donut hole. And then commercial deductibles are always higher until those are exhausted early in the first quarter.

Our next question comes from Gena Wang with Barclays.

I also have two questions. One is regarding HAE 9930. Just wondering if -- I will say the other side, if FDA allow you to resume and -- under the lower dose or stepping up dose titration protocol, so do you need to revisit your clinical trial design and expand the number of patients, in order to reach the assumption of the clinical benefit to reach statistical significance?

And my second question is regarding ORLADEYO. For the patient naive or switch from on-demand, could you give a breakdown of patients that prescribed by community doctors versus academic doctors? And what is the attack rate when they switch to ORLADEYO?

Yes. So the first question about what do you do to the protocol. If you're changing the dose, that's definitely a major amendment. And so we'd make that. But I can't tell you exactly the other things that will change because we haven't had those conversations. But I think it would be largely the same study.

We think that the efficacy of 400 is similar to 500 and so powering and things like that, at least at this point. We don't think we need to change, but we'll have more information once we talk to the regulators.

And Gena, on your question on acute-only patients who are switching to ORLADEYO, and that's consistently since launch, has been a little less than half the patients coming to ORLADEYO. From an overall attack rate perspective, those patients are doing well also, when they switched to ORLADEYO, and are staying on therapy similarly to what I described with the patients switching from prophylaxis.

And as far as where, who's prescribing, to those of you, the acute-only portion of the market has been shrinking. And that's pretty consistent across the board. There'll be some doctors here and there that might prescribe more. But I wouldn't describe it as an academic versus community.

I would say, overall, most patients these days are on prophylaxis. And that prophylaxis market continues to shrink as patients switch to ORLADEYO and other prophylaxis products. Market shrinks. The market is shrinking.

Sorry, just wondering, the acute be [attacking] when they switch? What is your annual -- if you're giving a rough estimate regarding annualized attack rate, usually, what is the range of those patients?

So I don't want to refer to the 96-week data, where they had an average of 3 attacks or so per month and they got down to 0.5 attack per month. I mean, that's probably the best information we can give you.

That's right. And these patients, what we're seeing is there -- most of these patients are gaining very good control on ORLADEYO, which is the key point.

Yes. And I think the other point that Charlie made, the median attack rate in what, 16 out of the last 17 months was 0. And so a lot of people are really controlled.

Our next question comes from Brian Abrahams with RBC.

I appreciate all the detail, both on ORLADEYO and 9930. So on 9930, if the FDA greenlights titration -- the titration design to 400 mg, would you still be fully investing in this drug in the same way as you did before, including incorporating patients with renal diseases in that study?

Or would there be some sort of more gated investment or perhaps a focus on certain disease areas or subpopulations or more refractory patients?

And then for Charlie, I'm just curious, if during the first quarter, there was any impact of the Omicron wave on either switching or new patient starts or discontinuation dynamics and anything we might expect to see with respect to that evolving over the course of the rest of the year?

Yes. So I'll take the first one, Brian. We're not intending to just invest in PNH, and that's the only population we go after. If the drug proves to be safe and effective at a 400-milligram dose twice a day, we'll be going into every indication that we can get into.

And I can't give you the timing on that at this point in time because there's discussions with regulators and all the other things that we need to do. But it would be go broad if we can determine that it's a safe and effective dose.

And then Brian, your question on Q1 with Omicron. Honestly, hard to say. What I can say is, our new patient starts were good for the quarter. They were slightly slower earlier in the quarter, but we ended the quarter, obviously, at the same rate that we saw in the second half of last year. So really good momentum.

Was Omicron a part of that? As we've said before, it's something that we've been operating with COVID all the way through. So I'm not going to pin anything specifically on Omicron. We're happy with our pace right now.

Our next question comes from Liisa Bayko with Evercore.

And also thanks for all the color. Just to start with 9930, just a follow-up on what Brian was saying, do you have any particular concerns about the idea of moving into renal diseases, just given the serum creatinine? And would we expect some sort of different outcome in that group, maybe lower dosing, perhaps?

Liisa, it's Bill. Thanks for the question. I think PNH is a complicated disease. So every patient with PNH has subclinical kidney effects from their PNH because of hemoglobinuria when they're not treated, getting -- and hemosiderin effects on the renal tubules, whether or not you can see that in any of your clinical chemistry or urinalysis tests.

So it's not like they have pristine kidneys to begin with. They don't. I think that -- I don't know the answer to your question. That's going to be an outcome of discussions with regulators and experts and ultimately, patients and [immunities] and all the rest of it.

What I can tell you is that in the interactions we've had with our nephrology expert advisers through the investigation, when I've asked exactly the same question with them, the response is, we need complement inhibitors to treat people with no treatments, who have -- with these diseases, complement-mediated diseases, who currently have no treatments. And you need to complete your investigation and let's see if we can move forward.

So -- but that's not the end of the story, but it gives you an idea of what's in the mind of the experts, who treat these diseases.

I think, that theme of the feedback that we got to is really important for everyone to understand. There is a real support in the community to continue moving 9930 forward. And so obviously, we're going to do it safely and thoughtfully. But I'm pleased to see the enthusiasm that investigators, key opinion leaders and others have shown around this molecule.

Okay. That's helpful feedback. And then, can you just describe the step-up to 400 protocol that you're considering? What doses would you start at? How long would it take to get to 400?

In the proof-of-concept study, it took a very [long] time. I think that we need to step through the regulatory discussions first before we can be certain about exactly how that goes. I think there's -- on the basis of the data we currently have, there's flexibility in what might be the approach there. So let's see how that goes.

Okay. And then just -- finally for ORLADEYO. Your guidance of $1 billion, do you factor in any potential competition from other oral kallikrein inhibitors that are in various stages of development? And do you have an ongoing effort there?

It just seems like you've created a really nice market here and wondering if you have some life cycle management plans?

Yes. No, we definitely consider future competition, and the timing of which you know is some years out from now. But here's how we get there mathematically, right? It's 2,000 patients out of the 7,500. Charlie told you that, that's between 25% and 30% market share. So there's still a lot of market [which we] had by others.

And I think the other piece is, if you're controlled on 1 capsule once a day, why would you switch? What incremental benefit would you see that would cause you to switch.

And I mean we've gotten really smart about what goes on in the minds of patients and doctors. We've done a ton of market research, and we can't find a reason. It's not efficacy because they're controlled, and it can't be convenience because you can't get better than 1 capsule once a day.

And so we just find it really difficult for people to take share away from us. Now, they may get share from other injectables that people that weren't controlled on ORLADEYO, that could be a spot. And there's room for that. So we think it's a very realistic number.

And then what about your life cycle management plans?

Yes. I mean we're always looking at things to -- obviously, we've invested in a meaningful way in HAE. But we also are building a pipeline beyond HAE with complement and the like.

And so -- and then we've got a really long patent life with ORLADEYO as well. So our focus right now is to get to peak as fast as we can and lock in those patients that are well controlled and tolerate the drug and then continue to advance our pipeline.

Okay. So -- and it seems like is there -- is it really difficult to develop oral kallikrein inhibitors. Is that what I'm hearing? Because it seems like without 100% relief of attacks in a clinical trial, not -- no one realized the patients who stay on. But in the clinical trial, there's still room to have an even better molecule.

I'm just wondering, if that's something that you're working on? Or just -- is it just so difficult? I mean, we haven't seen a lot of progress on that front.

Yes. Just one thing I want to correct you on. And I agree that the pivotal study results are the pivotal study results. But what we're seeing in the real world is, people are really well controlled, right? It doesn't work for everybody, but the ones that it works for, they're really, really well controlled.

This is not, I'm sacrificing efficacy for convenience, no way. And so I think that's incredibly important to remember. I forgot the other part of your question.

I guess, the difficulty in...

I won't use an expletive. But yes, it's hard, really hard. And as evidenced by the fact that we're the only one who's come up with it once a day, and others try, right?

And as we know in this industry, it's tough to come up with drugs, period. And it's tough to come up with drugs for hard targets. And so nobody has come up with a once-a-day oral kallikrein inhibitor to this point. And yes, it's extremely hard, and the attrition rate is high.

So then just a last question for me. I noticed you got the designation for your FOP program. Are you making any investments there? How would you think about next steps?

Yes, we are. And we're really excited to get that designation. And our goal is to get in patients next year. And so we're continuing to move that program with -- it's a horrible disease without really any real treatments right now.

And so we're starting to get to know the community, the patient community, the doctors who treat. And yes, we're going full speed on that and hope to be in patients next year.

And your final question comes from Justin Kim with Oppenheimer.

So just maybe a quick one from me. I didn't really see much, sort of, mentioned around experience in the renewed population? And just curious, is there a substantial enrollment there that there will be a crude clinical experience? Or -- just kind of curious, how you will get the evidence to gain confidence in [treating] this population?

Yes. We just got started in enrollment in that trial, so it wasn't a substantial number of patients. It was very few. And I think Bill talked about the process that we use in evaluating nephritis diseases, complement-mediated diseases.

We've got some more work to do. But again, if you have a safe and effective drug and you find the dose, then you can go into many different indications. And that's the goal.

Thank you. And this concludes today's Q&A session. I would now like to turn the call back over to Jon Stonehouse for closing remarks.

Yes. Thank you. So I'm just going to restate something I said earlier, which is, if you take a step back and you look at our company, you see a company with a highly innovative once-a-day oral kallikrein inhibitor called ORLADEYO that's on its way to $250 million -- no less than $250 million this year and $1 billion at peak. What's the value of that?

The second is, we've got a pipeline. And yes, we faced some challenges. What biotech companies have you seen that don't face challenges along the way? But we're still really excited about being able to bring more and more products to the market for patients suffering from rare diseases. What's the value of that?

And then we have a platform where all this came from, right? Discovery engine that can repeat it over and over and over again. What's the value of that?

And then lastly, we have a strong balance sheet, really strong balance sheet, and we're bringing in revenue at the same time. What's the value of that?

So when you step back, my answer to that is, there's a lot of value here today, and there's even the potential for even greater value in the future.

And so we're going to keep plowing ahead, tackling these challenges as we face them, driving ORLADEYO sales towards $1 billion. And we remain very confident that we have what it will take to build one of the next great biotech companies. So thanks for your interest, and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.