Good day, everyone, and thank you for standing by. Welcome to the BioCryst Fourth Quarter 2021 Earnings Call. As a reminder, this conference call is being recorded. It is now my pleasure to hand the conference over to Mr. John Bluth with BioCryst. Please proceed.

Thanks, Brian. Good morning, and welcome to BioCryst's Fourth 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; 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. 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. 2021 was a great success for BioCryst as we took a big step forward toward our goal of building the next great biotech company. The launch of our first oral drug for rare disease patients suffering from HAE, ORLADEYO, got off to a tremendous start. With $122.6 million of net revenue in the first year, we have a solid base to build off. That led us to confidently guide you to no less than $250 million this year and $1 billion in global peak sales. Patients want an oral therapy, and we are on our way to becoming the market leader in the prophylactic treatment of HAE. But ORLADEYO is just the beginning. In 2021, we also advanced our pipeline that will lead to significant additional value creation. Our oral Factor D inhibitor, BCX9930, moved from a Phase I in one indication to pivotal studies in PNH and a proof-of-concept study in three renal indications. What's important to note here is not only do we have a late-stage program on the heels of the approval and launch of ORLADEYO, but this molecule has the potential to be an entire pipeline. Imagine having filings for major approvals, additional pivotal programs and many proof-of-concept studies in many different rare diseases. That's what we have with 9930, and we're allocating our capital into this program to compound value for years to come. And finally, late last year, we brought in significant additional capital that gives us the ability to retain the rights of these programs and create greater value for our shareholders. So 2022 is another year focused on executing our plan, continuing to grow ORLADEYO in the U.S. and around the world and advancing our pipeline, enrolling pivotal and proof-of-concept studies, all to increase in compound value. It is an exciting time at BioCryst. Now I'll turn the call over to Charlie for more details on the ORLADEYO launch.

Thanks, Jon. The great results from 2021 give us confidence in our guidance of more than doubling sales in 2022. We already have a sizable base of patients entering the year, and recent market research shows that physicians expect to double ORLADEYO use among their current HAE patients over the next 12 months. The 60 physicians in this survey are representative of the market, treating about seven patients each, and they expect ORLADEYO to become the market leader. This survey is different from the type of research we presented before launch because physicians are now reflecting on real-world clinical experience rather than reacting to a written product profile. That real-world experience means their current expectations are likely to be more accurate in predicting future market share. This recent research also matches the trends we are seeing in the detailed data on prescriptions, patient demographics and retention that we get from our specialty pharmacy partner. We saw strong and consistent new patient starts in each quarter of 2021, matched by a consistently expanding and deepening prescriber base. The source of patients was also consistent in each quarter of last year, with more than half switching from other prophy therapies, mostly injectable therapies like Takhzyro and Haegarda, and patients are staying on ORLADEYO at high rates, regardless of their prior therapy. We ended 2021 with an overall patient retention rate of 70%, with patients switching from injectable prophy having particularly strong retention. For example, of the patients where we have enough history to track, nearly 80% of Takhzyro patients remained on therapy for at least six months. This level of retention shows ORLADEYO is working well for most patients, which is consistent with switching data from our APeX-S study that we presented in November at the college meeting. We also entered 2022 with broad coverage for ORLADEYO. All major payers and PBMs now have policies, which means that at least 80% of the HAE population in the U.S. has access to ORLADEYO coverage. The strong underlying fundamentals give us confidence that sales will be no less than $250 million for the year, with Q1 being the outlier in quarter-to-quarter growth. We expect little to no Q1 revenue growth over Q4. There are three reasons for this, all of which you would expect with a specialty drug and were built into our 2022 guidance. First, many plans require reauthorization at the start of the year for specialty products like ORLADEYO, meaning some patients will temporarily shift to free product. Second, the impact of commercial co-pay assistance and Medicare Part D cost sharing will reduce the average selling price in the quarter. And finally, our last major PBM contract went into effect in January, but most of the revenue benefits will be realized in future quarters as participating plans implement the policy and existing patients shift from free product to paid product. Based on the strong 2021 results, the favorable patient trends, positive HAE treater reactions, we expect ORLADEYO to reach $1 billion in peak global sales. The math to get there is both simple and achievable. Between 25% and 30% market share among diagnosed and treated HAE patients in the U.S. gets us to 2,000 patients and up to $800 million in sales, assuming a 15% to 20% gross to net adjustment. The U.S. will again account for the great majority of sales this year, but ORLADEYO has already launched in seven other countries, and we expect several more regulatory approvals and launches this year. By the time we reach peak annual sales, we expect the rest of the world for at least $200 million annually. As we see more and more clinical trial and real-world evidence of how well ORLADEYO works for most patients, as we see, we are helping patients get access to treatment. As we see how much need there is for an oral once-daily therapy around the world, our goal is to get all HAE patients and their doctors asking, why wouldn't you try ORLADEYO? Helen, I'll pass it over to you.

That's absolutely right, Charlie. We've got more abstracts at Quad AI this weekend, sharing the continuing evidence coming in for how ORLADEYO helps patients. That effect is durable. What we're seeing is that patients staying on ORLADEYO respond really well. They have fewer attacks, they feel better and their quality of life improves. We see this in the real-world evidence of the 96-week data set from both APeX-2, the pivotal study, and APeX-S, the long-term study. That 86% reduction in attack rate from baseline observed in the long-term treatment group is an example of this significant and durable effect with a once-daily oral medicine. It's exciting to see the difference ORLADEYO is making in the lives of HAE patients. Now I'd like to turn to what's next for us. Our pipeline is advancing rapidly, and we're preparing for the steps to come. This is such an exciting and busy time for us. The lead molecule in our pipeline is, of course, BCX9930, our oral twice-daily Factor D inhibitor, which is being evaluated for the treatment of PNH in two global pivotal trials. These trials are enrolling even as we are expanding to more countries and sites to reach full swing. The pivotal program is proceeding very well. What comes next, and we're starting to prepare for this, is filing for registration with the pivotal data set. We expect to be pursuing registration in multiple countries. One strength of our program is the robust controlled data that the trial reads are designed to provide in both patients naive to prior therapy and those with an inadequate response to C5 inhibitors. This broad controlled data set is designed to give us information on not only the key outcomes, such as our primary endpoint of change from baseline in hemoglobin and our secondary endpoint of transfusion rate, but also the patient-reported outcomes, such as the FACIT-Fatigue score. We anticipate this information may be highly supportive of moving to registration in the U.S., Europe, and other regions. Remember, that was the case with ORLADEYO. We went through the registration process in three regions simultaneously with a single pivotal data set. With BCX9930, we expect to be in a position to move broadly in this program as well to register in the U.S. and beyond with this pivotal data. So when we talk about our goals, for the Factor D inhibitor in PNH, we are talking about enrolling these pivotal trials, achieving the top line readout in both and initiating work towards submitting for global registration. And that's where we plan to be by the end of 2023. In parallel, our basket study of nephritis indications is also open and screening patients in multiple countries. There remains a clear need for better therapies to improve outcomes in these three indications: C3 glomerulopathy, IgA nephropathy, and primary membrane nephropathy. It's also clear the complement alternative pathway dysregulation has a crucial role in these diseases, making them logical indications to pursue next in our Factor D inhibitor program. And yesterday, we announced the enrollment of the first patient in that study, which is a big step forward as well. As a reminder, this study will enroll up to 14 individuals in each of these diseases to confirm proof-of-concept. Depending on the size of the vaccine, we may not need that many patients to have confidence in proceeding into a pivotal trial. So what we are preparing for is that we enroll these patients and at some point, perhaps with fewer than 14 patients in the cohort, we achieve that confidence and move forward to pivotal trials for each disease one at a time. We anticipate we'll be rolling out three pivotal trials in these three diseases by the end of 2023 as well. These may each advance at a different pace. Because they are not dependent on each other to progress to pivotal stage, the pivotal trials can proceed as each one gets to proof-of-concept. This is just the start. There are multiple other diseases where the alternative pathway of complement is crucial to the pathophysiology of the disease and where proximal inhibition of the alternative pathway with a potent and specific Factor D inhibitor could be expected to improve clinical outcomes for patients. We are preparing to add indications in the clinic to the ones we're evaluating in trial so far. You can expect there will be other studies in preparation, building on what we already know to assess our oral Factor D inhibitor for treatment of these other diseases. Think of it as a second wave of studies coming behind what you see now. Another way to think about it is like this: We completed the pivotal trial, the global registration, and then the launch and global expansion for ORLADEYO. Now we have two pivotal studies in PNH with our next pipeline molecule and proof-of-concept trial in three more renal indications. By the end of 2023, we plan to be moving towards submitting for registration for PNH. We anticipate having additional pivotal trials getting underway in the three renal indications. We expect to have proof-of-concept trials advancing in a whole new set of indications. This is the pipeline in a molecule that is our Factor D inhibitor program with BCX9930. We are investing in the trials and the planning for this Factor D inhibitor program, as I've mentioned here. We're also investing in the rest of our pipeline, including our FOP program with the ALK2 inhibitor, BCX9250, our third molecule and program currently in the clinic and moving along, and our pipeline is really strong. There is more waiting to be unveiled from our discovery center in Birmingham. Beyond the progress we're making in the clinic with the molecules I discussed today, our discovery team is continuing to identify and develop new molecules for additional targets. There is so much more to come. With the revenue from ORLADEYO and with capital, we are investing, building our programs, and expanding our pipeline to bring multiple medications to patients and an increasing set of diseases. This is expansion. This is bringing our ability to develop and deliver drugs to patients to a whole new level. I hope you can hear in my voice, I'm excited with what we're doing now and what's ahead of us. We are very focused on advancing new ways of reducing the burden of disease for patients. I'm proud of the work our teams are doing to drive our pipeline forward with both the programs in the clinic and the programs still to come. I'll now turn the call to Anthony.

Thanks, Helen. Our capital allocation strategy has always been to invest in those areas that can provide significant long-term value. We did it with ORLADEYO, investing early off the back of very robust market research. We firmly believe that this early investment has been a key factor in our early success. With the Factor D program, given what you just heard from Helen, there's even greater potential given the multiple indications that we could go into with this pipeline in a molecule. You can find our detailed fourth 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 $47.2 million, of which $46.2 million came from net sales of ORLADEYO. Operating expenses, not including non-cash stock compensation for the quarter, was $90.8 million. Earnings per share for the quarter was negative $0.10 for Q4. This was impacted by a positive one-time non-cash adjustment of $56 million related to the extinguishment of the non-recourse pharma notes. Excluding this adjustment, on a non-GAAP basis, our operational EPS was negative $0.40 for the quarter. Following the royalty and equity deals that we secured with our move in Q4, we ended the year with about $518 million in cash on hand. As we previously described, we have also agreed with Athyrium to draw down the additional $75 million debt tranche mid-year this year. Additionally, we have ORLADEYO revenue growing from $122.6 million last year to no less than $250 million this year and onward to a peak of $1 billion. For operating expenses, we're providing a range of $440 million to $480 million for full year 2022. Having ended Q4 of '21 with a quarterly OpEx run rate of around $91 million, the great majority of the additional investment is allocated to the progression of our Factor D program. Helen clearly articulated what this investment will get us between now and the end of 2023, and why we are so excited in investing and developing this program. We're often asked about the path to profitability. With our belief in ORLADEYO being a $1 billion drug, I feel very confident that we'll get there. In fact, given 2021 revenues, ORLADEYO was already profitable on a direct contribution basis, which is a great achievement by the team. Right now, though, our strategy is investing in maximizing value creation, allocating capital to continue to enhance and expand the ORLADEYO launch, to advance our Factor D pipeline across multiple indications, all while continuing to discover new drugs to ensure that we have a robust pipeline to repeat the process over and over again. This is the strategy that gives us the belief that we will be the next great biotech and will result in compounding value for the company and for shareholders in the coming years. With that, we'll open it up for questions.

Our first question will come from the line of Ken Cacciatore with Cowen and Company.

Congratulations on all the progress. On the retention rates, it's really been a nice positive. And as you've described, probably better than we originally anticipated. But wondering as we go through having more experience, are there best practices that could even further improve the retention rates? So learnings from the clinicians and kind of passing along to sales force and sharing with other clinicians, would like to hear about that. On the renal basket study, obviously, given the timing of enrollment, I hate to push you on this, but it does look like it's possible you could have data by the end of this year. I just want to talk about maybe timing of when we might be able to see something from those studies? And then, just lastly, any kind of qualitative discussion you can give on the enrollment in PNH kind of what you're seeing and how is it going?

Charlie, do you want to take the first one on retention, what we're working on? And then Helen can take the other two.

Sure, Ken, thanks for the question. Yes, regarding retention, the best practice we observe is that patients need to be prepared to give a drug a chance during the first few months. We need to set expectations, particularly for patients who experience gastrointestinal effects, so they can anticipate and understand that these effects usually diminish within the first month. Breakthrough attacks can occur with all therapies, so it’s important to work through that. Expert treaters indicate that any new drug requires at least a three-month period to assess its effectiveness. We are focused on managing these expectations and ensuring that we support patients throughout this process. Healthcare providers and their teams play a crucial role in preparing patients for potential challenges. We will continue to emphasize this throughout the year to maintain and hopefully enhance our retention rate.

Yes. One thing before Helen answers the other part of your question. One thing that Charlie and his team are doing a really good job is gathering more data and more information about good switches and challenging switches and the like, whether it's our product or other products. We're getting smarter, Ken, with each month that goes by. We're applying what we're learning from that to improve those numbers if we're able. Helen?

Thank you, Ken, for your questions. Regarding the renal study, this study consists of three independent cohorts, each of which will enroll separately. We are conducting this study based on scientific rationale and anticipate that the outcomes will lead us to proof of concept for pivotal trial programs. Each cohort will progress on its own, and we are ensuring that we select the appropriate patients to evaluate efficacy for proof of concept in this study. This involves performing kidney biopsies at the start to confirm we have patients with active disease at the right stage, ensuring they are not too advanced for assessment. We expect this process will take some time, and while we have not specified which cohort may progress faster or slower, we believe we will see separate enrollment across these arms over time. Our goal is to achieve proof of concept for all three cohorts, aiming to advance to pivotal programs by the end of 2023. As for your second question about PNH enrollment, we are very pleased with the current progress. We are observing activation of sites globally and increasing enrollment in both studies. We are on track with this program and are looking to expand by adding more centers. While I don't have additional details to share, we are very happy with the progress and enthusiasm from investigators and centers worldwide for both trials.

Our next question will come from the line of Tazeen Ahmad with Bank of America.

For ORLADEYO, for your comments about Q1 sales, I just wanted to clarify, beyond your statement in your press release where you said that you expect little to no growth in revenues this quarter due to these formulary resets, could sales be lower sequentially from Q4? This is a common phenomenon that a number of our commercial stage companies experience, and I'm just asking for the extra color to help with modeling purposes. Related to that, what should we expect gross to net to be in this quarter? And then I have a follow-up on PNH.

Sure, Tazeen. Yes, this is a common phenomenon. It's essentially a reimbursement dynamic in the first quarter. We expect that the quarter will show the lowest growth compared to the fourth quarter. However, we are very confident and excited about achieving over $250 million for the year, with higher growth anticipated in future quarters. This is primarily an expected reimbursement headwind for the first quarter, but it will likely turn into a tailwind in the second quarter as the new contract I mentioned takes effect. The main factor driving growth this year will be the ongoing patient influx, as new patients continue to enter the system. Our research and feedback from the field indicate that we have significant opportunities ahead.

Okay. So just to clarify, you're expecting at worst flat sales, is that right, for the quarter?

Yes, we anticipate minimal to no growth. At worst, we expect flat sales, and this quarter is projected to have the lowest growth compared to others for the year.

On your question about the gross to net, yes, there will be a spike. Charlie has discussed the reauthorization. The free product we provide to ensure that patients have no break in treatment, along with the impacts from co-pay assistance, will contribute to this spike. This will influence revenue, leading to a temporary adjustment in Q1, even though we expect strong fundamentals.

Yes. So you've always talked about that 15% to 20% range for gross to net. Would it be slightly higher than that this quarter or still within that range?

Yes. I think the 15% to 20% that we talked about is on those reimbursed. So when you factor in the free product, yes, it will absolutely be higher than that.

Again, this is very typical of specialty products during the first quarter.

Sure. And then on PNH, you've said that you'll finish enrolling 9930, have a data readout and prep for approval all within two years. When do you think you'll be able to provide additional nuance as to when each of those events could occur? And then on the competitive landscape, I believe this year Novartis will read out one of its Phase III studies for C5 failures head-to-head versus SOLIRIS. Astra will have combo data for their candidate in refractory patients also at year-end. I'm just wondering, would you see any read-through from these studies to the 9930 program? If you weren't first to market with an oral PNH drug, do you think that there will need to be meaningful differentiation among the different products?

Helen, maybe I'll take the first question. If you could take the middle one, and then Charlie, maybe the last one in terms of market. It's really hard to give you blow-by-blow on the enrollment because it changes every week, right? Our goal is to tell you when we'll give you a backstop of what you'll see at the end of next year. As we learn more over the course of the year, we'll make a decision on whether we update you or not. We want to focus you on the end of next year and where we'll be as a priority. And then, Helen, do you want to take the middle one?

Yes, sure. In terms of read-through from other programs, I think what we're seeing is very interesting; the complement-mediated disease field is rapidly advancing. We're recognizing that complement is implicated in diseases at an increasing pace. We're certainly seeing this in the field in terms of other trials, and everything that we see other programs advancing. I think that's validation of the concept that the alternative pathway is implicated in these diseases and can contribute to clinical outcomes. For us, we'll be watching closely to see what we can learn as those programs generate data and as we see how the regulators respond to that. We'll always do that, and we will always be incorporating that into our plans. We're happy to be soaking up as much information as we can and confident in our own program as it moves forward.

Yes. The only other thing I'd add to that is the read-through on a combo study isn't super helpful to us because we don't believe that combo therapy is a viable marketed approach. Having monotherapy is the key. We believe we've got a drug that takes care of that, both extravascular and intravascular hemolysis. So we really don't think that combo is a winning strategy, but I'll let Charlie talk about how to compete and differentiate.

As far as competition is concerned, PNH is just the beginning of many indications we have. There is a significant opportunity for this drug. We are becoming proficient at transitioning patients from injectables to oral formulations. Even if we don’t lead in the oral Factor D or Factor B market, we can still compete by being the most knowledgeable about encouraging patient switches in PNH. There are numerous opportunities in PNH and in future indications. Even within PNH, we have unique advantages. We are the only program with two controlled clinical trials, which could allow us to gather more insightful data on patient-reported outcomes that will be crucial in various markets, especially outside the U.S. There are many avenues for us to compete, and I’m excited about the capabilities of our excellent team.

Yes. One last thing I'd add, Tazeen, is bigger is not better here. We're showing that in the HAE space, where we're competing against Takeda and CSL. One of the things that we take tremendous pride in is really trying to understand the behavior that affects decision-making, both in the patient and the doctor on switching. We're starting to see that already. We're gathering data in the PNH space with new drugs that are entering the market. If somebody else gets ahead of us in the world and gets into the market, we're going to learn about what works and what doesn't work there as well, and we're going to apply that. My bet is on Charlie's team because I've seen what they've done in the HAE space, and I'm confident they can compete against anybody in PNH.

Our next question will come from the line of Jessica Fye with JPMorgan.

First-up on OpEx. It looks like the OpEx guidance is pointing to roughly 50% growth year-over-year at the midpoint, if we exclude stock-based comp. Can you talk about the growth you expect to see in SG&A versus R&D? Within each line, maybe elaborate a little bit more on what's driving that growth relative to 2021? And then second, you talked about the growth in the ORLADEYO prescriber base continuing significantly; can you put some numbers around that?

Yes. Thanks, Jess. So first, on the OpEx. Yes, if we look at it, the investment has grown, but it's predominantly based on R&D. The biggest growth for Q3 to Q4 and for 2021 to 2022 is going to be to support the Factor D program. When I think about the magnitude of the growth, I think about what Charlie was saying earlier in terms of the market opportunity. We're talking about a multibillion-dollar opportunity in this pipeline in a molecule. The Factor D, like I said, is going to be the predominance of the growth. There will be G&A growth mainly to support rolling out ORLADEYO on a global basis, and some structural support will ensure from a G&A perspective that we can support this growth. I think with growing revenue that we have in ORLADEYO, if I think about the net cash utilization as opposed to the OpEx on a stand-alone number, the cash on hand that we have and the potential opportunity that this investment gives us, I think it's a great way to be allocating the company's capital.

Yes. Specifically year-over-year, think about it; you've got two pivotal studies going on in many sites around the world. You've got a proof-of-concept study in three additional indications. Helen just told you that we're working on other studies and indications, and there's a bunch of stuff when you've got pivotal and proof-of-concept programs. So that's the big difference in the specifics around driving R&D costs year-over-year.

Yes.

In Q4, we continued to see a broader prescriber base, consistent with the trends from 2021. Our targeting remains focused on the Tier 1 group of 500 doctors, along with a larger Tier 2 group. We experienced growth in both segments during Q4, similar to what we observed in Q3. A key factor is whether we're getting deeper engagement with these prescribers, particularly in Tier 1, which closely aligns with our market research findings. The answer is affirmative; they are prescribing more. Our strategy is to expand our reach while also enhancing depth. Our market research indicates that both current prescribers and those not yet prescribing have expressed an intention to prescribe ORLADEYO within the next year. The signs are encouraging, and that remains our team's focus.

Another thing that's got us really excited is with the pandemic looking like it's easing up, we're seeing more face-to-face interaction. Charlie and I, last week, were at the very first regional gatherings of our sales team. There's a lot more opportunity, not only with the top prescribers and getting more of them to prescribe but also looking at going deeper in the prescribing. We're also looking at going to Quad AI this weekend. Face-to-face interaction; we hear there are more doctors coming that were at the college meeting in November. Charlie and I and Helen will be there, and we're really excited about interacting with physicians. We think that talking to each other has a real impact on the enthusiasm for prescribing. So we think that's going to get better over time, and it's a real opportunity.

Our next question will come from the line of Chris Raymond with Piper Sandler.

This is Nicole Gabreski on for Chris. Maybe one around just peak sales guidance. I know you guys have said that the U.S. opportunity will make up the majority of the new $1 billion peak sales estimate. You had indicated previously that one of the biggest benefactors on the ultimate peak revenue potential would be ex-U.S. uptake. Given this, what gives you confidence in updating global peak revenue guidance at this point? Can you just help us frame your thinking here?

Yes. Let me start, and then I'll pass it to Charlie. It is important to be clear that about 80% of the global peak sales will come from the U.S. Charlie can elaborate on the details, but it's not necessary to achieve a 50% or 60% market share to reach this goal. It is quite reasonable and achievable, and Charlie can provide further explanation.

Yes. The math is 2,000 patients in the U.S., thinking about our pricing and gross to net that Anthony described as 15% to 20% that gets you to the $800 million. Ex-U.S., it's going to be more of a volume play. The pricing will be lower, so it's volume. We'll need two to three patients ex-U.S. to kind of equal one patient in the U.S. We're starting to go to global markets; there's a real demand for an oral prophylaxis therapy. The markets are transforming more towards prophylaxis, as has already happened in the U.S. The strong indicators from the U.S. are strong year one. What we hear from future customers ex-U.S. all adds up to that confidence of $1 billion in peak global sales.

Just one quick add to what Charlie said. That 2,000 patients is off a base of 7,500 diagnosed and treated. That's where you get somewhere between 25% and 30% market share, which is really important.

That's very helpful. I have a follow-up regarding competition. We have received recent inquiries about the potential competition for ORLADEYO from gene therapy and gene editing approaches. Considering your peak sales guidance, how do you view these other treatment methods as potential competitors to ORLADEYO? For instance, do you think they will be limited to specific patient groups or something similar?

Yes. The first thing I'd say is that all the competition is pretty far away. So that gives Charlie years, literally years, to be able to capture market share and get those patients that will be controlled on ORLADEYO on a once-daily oral capsule. Our belief is if you're controlled on a once-daily oral capsule, then what is the incremental benefit that you're getting from other therapy that would cause you to switch? So it's going to be something else. Gene therapy and gene editing could play a really important role in the patients that are really hard to treat. None of these drugs are perfect, and there are patients that are still struggling. That's a great spot. With any new therapy, there is a risk-benefit balance that you've got to cross over. That's what we learned when we continued to study this in the switching. What's the incremental benefit? It's hard to see if you're controlled on our drug that you're going to switch to someone else.

And our next question will come from the line of Liisa Bayko with Evercore ISI.

Most of have been answered, but maybe you can just elaborate a little bit more on the opportunity in renal diseases for 9930. IgA nephropathy, we've been hearing a lot about; it’s just a pretty competitive area. There are a lot of compounds in development. Where do you see complement inhibitors of the complement pathway, specifically Factor D or Factor B fitting into the future treatment paradigm there with lots of treatment options? Maybe you can go through some of the opportunities in C3G and the rest of the indications there?

So Helen, maybe start with why a Factor D inhibitor, proximal inhibition, and alternative pathway makes sense for the renal indications. Liisa is right; there are other products, but they're not working on kind of the root cause of the disease. Charlie, you might want to talk about how we look at one of these markets in terms of opportunity.

Yes. The previous insights regarding IgA nephropathy highlight a condition driven by complement deposition in the kidney's glomeruli. Addressing this complement deposition and the dysregulation of the complement pathway, while also preventing or mitigating kidney damage, targets the underlying cause of the disease. With a clearer understanding of the role of complement and multiple potential treatment approaches, this target appears to be a logical focus. Observations in the field indicate that there are benefits; some early programs have provided proof-of-concept for the improvement of proteinuria in these conditions, suggesting the potential for increased GFR. Targeting complement has proven to be a viable option for treating and reducing proteinuria, which enhances patient outcomes. The long-term goal is to improve outcomes overall, including slowing the progression to kidney failure and decreasing the need for transplants for patients with IgAN and C3G, as mentioned. We believe that inhibiting the alternative pathway with a proximal inhibitor could yield positive results; currently, there are two approaches in development, one being the Factor D approach. Both methods are expected to produce similar clinical outcomes, but we have selected Factor D due to its favorable targeting and structural benefits. We anticipate comparable clinical results for both approaches, depending on the specific characteristics of the molecules and the trials conducted.

Yes. If you hit it at the heart of the biology that causes the disease, our hope is that you see a better outcome at the end of the day. We don't know if that will be the case; that's why we're doing the research in the clinical trials. We're going after this target specifically to hit it at the heart of the pathway. Charlie, you want to talk about the market?

Yes, there are some differences among the three indications. C3G is more akin to ultra-orphan conditions like HAE or PNH, where many patients face a high mortality risk. We are exploring that entire market. In the case of IgAN and PMN, as Helen mentioned, there are patients at elevated risk, particularly segments of that market vulnerable to progressing to end-stage kidney disease. These will be the initial segments we target, all within the orphan space, leveraging our expertise where we can effectively compete with small teams and a distinctive product as a proximal inhibitor.

The best way to think about all these things we're going after is it's like another ORLADEYO market, with each disease or bigger in some cases. Just add up that math, and you get to real huge value.

And our next question will come from the line of Brian Abrahams with RBC Capital Markets.

Congratulations on the successful launch and the progress of the pipeline. You provided great insight into the seasonal reimbursement patterns we can anticipate at the start of the year. I'm wondering if we should be prepared for any temporary effects from the Omicron wave on early first quarter demand trends. Additionally, could you share how the recent changes in WACC might influence the overall gross to net for reimbursed patients throughout 2022? I'm interested in understanding how much revenue per patient we might expect to be affected by those pricing changes.

Charlie, you got that one?

Yes. Regarding the seasonal reimbursement and the impact of Omicron, I can't comment on the full quarter until we see its conclusion. We're relieved that Omicron appears to be diminishing. As Jon mentioned earlier, we are moving towards Quad AI, which means there will be more in-person visits with doctors. We will observe if this has any effect, but our team has continuously worked through COVID and has performed exceptionally well. We can now hold more in-person meetings, which should serve as a tailwind and present opportunities moving forward. Concerning the WACC changes, I believe you are referring to the 3% price increase we implemented last week. This aligns with our guidance for the year. As for gross to net changes, I don't anticipate any impact; it remains in the range of 15% to 20% we've previously discussed, just adjusted to be 3% higher.

Yes. It doesn't affect the contracts we have with payers and stuff like that. This is very common.

And our next question will come from the line of Jon Wolleben with JMP Securities.

Just a couple for me on the pipeline. In the RENEW study, I'm wondering how frequently are patients coming in to measure their uPCR? We know enrollment may be different between the indications. Just wondering if you have hard and fast want to see that 6-month uPCR? Or could we see improvements very early on that may trigger you guys to want to go to a pivotal study earlier? You mentioned FOP on the call. We haven't heard much about that in a while, but can you just give us a status update on what to look forward to in 2022 for FOP?

So Helen, do you want to take the first one? I'll take the second.

Yes. In the RENEW study, we are focusing on a 24-week endpoint for the uPCR. We will conduct regular assessments throughout the trial. As mentioned earlier, we plan to include up to 14 patients in the cohort. It is possible that we may gather enough information to consider a proof-of-concept earlier than the 24-week mark and potentially with fewer than 14 patients. We will need to analyze the data to determine our next steps based on what we observe.

And then on FOP, Jon, this program, back when we first launched it, was invested differently than the 9930 complement program because we had less capital, honestly. We had to be cautious about how we invest it. We did it serially rather than in parallel. For example, while we're running a Phase I, we weren't building up the drug supply or doing the additional toxicology work in parallel, which we do in other programs that we're investing for speed. We're in a bit of a catch-up mode this year. Drug supply, toxicology, and planning for patient studies is the bulk of what's going to happen this year. The key in this space is there's a huge unmet medical need. This is a really difficult disease, and we've seen a lot of failures in this space. It's not easy to get to a situation where you feel like you've got a product that you can get across the finish line. We've seen a lot of companies stumble. It's not because they aren't doing their jobs; it’s because it's hard. We’re really excited about the data we've seen in the Phase I study so far, both from a safety, tolerability, and drug level perspective, and have a lot of confidence in 9250 and FOP. We're investing and you'll hear more about this towards the end of this year and beginning of next.

And our next question will come from the line of Gena Wang with Barclays.

This is on for Gena. Can you hear me now?

Yes.

Okay, great. Most of our questions have been answered, but two quick ones from us. For ORLADEYO growth, you've given enough color on the first quarter. How should we think about the quarter-over-quarter growth assumption for 2022? Is it more of a linear growth? If you could provide any color there, that would be helpful. And the second question is, in the longer term, how are you thinking for BioCryst? Do you plan to be a stand-alone company? Or is the thinking there to be more of like under a big umbrella? Any guidance there or any color there would be helpful.

Yes, I'll address both questions. If I stray off course, please let me know. If there's an unusual situation in the first quarter, it shouldn't be expected to continue in a straight line afterward. The second quarter could be stronger than the first, and we might see fluctuations in the third and fourth quarters. We will keep you informed along the way. Our aim is to clearly communicate our expectations for the first quarter and for the year overall. We have strong confidence in achieving at least $250 million for the year, and we anticipate that there will be little to no growth in ORLADEYO from quarter to quarter for the first year, due to the reasons Charlie mentioned.

It's important to highlight that that's revenue focus. The fundamentals in terms of getting more patients on the drug will continue to grow. The events in Q1 will be centered around revenue.

On your second question, we're building the next great biotech company. Sounds hard, but it's pretty simply stated. The reason that we have a lot of confidence in that and we say it aloud is that we've got a drug that approaches or will get to $1 billion in peak revenue. We have a really full pipeline right behind it. All of this stuff came from our discovery engine and our platform. If you look at the great biotech companies, you pick your favorite one, that's exactly how they got to tremendous value, is by investing in their pipeline while they're bringing a new, valuable product to the market. We think 9930 could be significantly bigger than ORLADEYO. That is very exciting and allows us to build the next great company.

That is all the time we have for questions for today. Now I would like to hand the conference back over to Mr. Stonehouse for any closing comments and remarks.

Thank you. So 2021, I've been in the company 15 years; it might be the best year we've ever had. But guess what, it's in the rearview mirror. We are focused intently on driving ORLADEYO, getting it approved in other countries, continuing to build off great growth in the U.S. and advancing our pipeline. We will remain laser-focused on that, so that at the end of '22, we have another year of great performance to share with you. Thanks for your interest, and have a great day.

Thank you. Everyone, this concludes our conference call for today. You may now disconnect. Everybody, have a wonderful day.