Good morning and welcome to the BioCryst Fourth Quarter 2022 Earnings Conference Call. Please note this event is being recorded. I would now like to turn the conference over to John Bluth at BioCryst. Please go ahead.

Thanks, Andrea. Good morning and welcome to BioCryst’s fourth quarter and year end 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; 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 and 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. 2022 was another outstanding year for ORLADEYO as we doubled sales in our second full year of launch on top of the fantastic start we had in the first year. This shouldn’t be surprising given the excellent safety, efficacy and once-daily oral profile. We are consistently hearing from patients that ORLADEYO is changing their lives. As you will hear from Charlie, in the U.S., our prescriber base continues to grow both in breadth and depth. In addition, ORLADEYO is already commercially available to HAE patients in 15 countries around the world. The ability of ORLADEYO to deliver meaningful results for patients is driving the steady patient growth we are seeing quarter after quarter. And in 2023, we expect this strong steady demand to continue, leading to global sales of no less than $320 million. Our goal with this guidance is very simple to be accurate. Accurate guidance has been our track record since launch because we are the only ones with access to the prescription data through our sole-source specialty pharmacy. With our sales performance in 2021 and 2022 and our guidance in 2023, you now have three data points to get a sense of the slope of the ORLADEYO launch. We are on a trajectory to achieve peak global sales of $1 billion and our IP for ORLADEYO extends out to 2039. So we expect to be at peak sales for many years. While our revenues continue to grow, we expect our operating expenses to be flat year-over-year as we have made and will continue to make thoughtful capital allocation decisions on our pipeline investment. This reduction in net cash use has strengthened our financial position and moved us closer to profitability. You will hear more detail on this from Anthony shortly. Now I will turn the call over to Charlie to review ORLADEYO performance in more detail.

Thanks, Jon. The base of patients treated with ORLADEYO in the United States continued to grow as expected in the fourth quarter as new patient starts and patient retention remain consistent with the trends we have seen over the last two years. The prescriber base expanded strongly again and existing prescribers continue to add new prescriptions. New starts on ORLADEYO were also distributed evenly, with just over 50% coming from the top tier of healthcare providers who treat half of all HAE patients. As we begin 2023, we have confidence that we will achieve no less than $320 million in global revenue this year. Our U.S. field team expansion is in place and patient growth trends are on track. Our European growth is also gaining momentum and we continue to lay the foundation for ORLADEYO expansion globally. This weekend, we will present more long-term clinical and real-world evidence at the Quad AI meeting, adding to the growing body of evidence showing how ORLADEYO can improve the lives of patients living with HAE. We have noted before that typical U.S. payer reauthorization dynamics for rare disease products like ORLADEYO will soften Q1 revenue growth as many patients shift temporarily to free product. What we are seeing so far this year tells us that ORLADEYO revenue is likely to be flat to slightly down compared to Q4, even as our patient base continues to grow. We ended 2022 with a total number of patients on ORLADEYO that we expected and the patient growth trends we see in the U.S. and around the world give us confidence not only in our 2023 trajectory but also that ORLADEYO peak revenue will reach $1 billion. Helen, I will turn the call over to you.

Thanks, Charlie. Today, I’d like to provide some additional updates on the next step for BCX10013, our potential once-daily Factor D inhibitor. Initial data from our Phase 1 single ascending dose and multiple ascending dose trials in healthy volunteers showed rapid, sustained and greater than life suppression of the alternative pathway of the complement system, 24 hours following a single 110 milligram dose. BCX10013 has generally been well tolerated at all dose study stages in the clinic. These data provide early support for development of BCX10013 and believe this product has the potential to differentiate itself as a once-daily oral vaccine inhibitor for multiple conditions. The next key step in clinical development is working in patients with the goal of confirming optimal dosing pivotal set. Non-clinical programs help us assess the safe dosing range we can evaluate in humans. Recently, we observed emerging dose-related observations in an ongoing chronic non-clinical study that were not seen at the same time period in a separate completed study. We need to understand the full picture of these differences as we complete the current ongoing study. At the same time, as a result of these observations, the pace at which we can evaluate higher doses in humans to assess efficacy will be slower, and we expect a related delay in the timeline. In order to grasp towards clinical dose selection, we will continue working to understand what we are seeing in the ongoing non-clinical program and we will keep you posted on our progress. In addition to 10013, we are making progress with our research program to identify oral medicines directed at other targets across the classical selection of terminal pathways of the complement system, including C2, which is a critical upstream serine protease enzyme for activation of the classical pathway. We have developed potent-selective molecules targeting C2 and these are currently in the exploratory stage. Our long-term goal is to bring multiple novel orally delivered products forward to treat various conditions. Now I’ll pass it to Anthony.

Thanks, Helen. You can find our detailed fourth quarter and year-end financials in today’s earnings press release, and I’d like to call your attention to a few items. Total revenue for the year came in at $271 million, over $250 million of which came from ORLADEYO in just its second year since launch, more than doubling net revenue from the prior year. Revenue for the fourth quarter was $79.5 million, of which $70.7 million came from net sales of ORLADEYO, with the remainder coming from sales of RAPIVAB, including the fulfillment of the last of our contract equipment stockpile. Operating expenses, not including non-cash stock compensation for the quarter, were $110.6 million. This puts full-year OpEx at $374.6 million. The increase compared to prior guidance was driven by almost $10 million of accelerated costs related to closeout activities for the termination of the 9930 and 9250 programs. Cash at the end of the year was at $444 million. Earlier in the year, we provided guidance for 2023 ORLADEYO revenue of no less than $320 million. For OpEx, we expect 2023 to be flat to the prior year at around $375 million. We previously stated that 2023 R&D investment would be in line with prior year. We are now forecasting that R&D expenses will decrease year-over-year following the discontinuation of the 9930 and 9250 programs and the delay in the 10013 clinical program that Helen described. This will be offset by additional commercial investments that we are making both here in the U.S. and as we continue our international expansion. As our revenue and OpEx curves continue to converge, we expect net cash utilization in 2023 to decrease compared to 2022, even when factoring in the royalty curve. The combination of our strong balance sheet, increasing revenue and our disciplined approach to capital allocation puts us in an outstanding financial position with an ever-decreasing reliance on the capital markets. Now, operator, we will be happy to open up to Q&A.

And our first question comes from Jessica Fye of JPMorgan. Please go ahead.

Great. Good morning guys. Thanks for taking my questions. Two for me. I guess first, what else can you share with us about the dose-dependent finding with 10013? And second, maybe a nuance here, but if I recall at the healthcare conference, you indicated that Q1 revenue would be roughly flat with Q4. I think now you are saying flat to slightly down. Does that just mean we should think of Q4 revenue as being even higher than it would have been otherwise or does that take a little bit of the buffer out of whatever might have been in your full-year guidance? Thank you.

Helen, take the first one.

Yes. Sure. Good morning. So we – in the non-clinical findings, what we are saying is that we are seeing something at a time point that is not consistent with a time point in our other studies. And the impact then is that we want to learn more about the safe exposure and understand the difference.

And Jess, as far as the Q4 and Q1 revenue, this is not a Q4 being bigger than it should be; it’s really based on what we’re seeing out there with Q1 reauthorization. It’s always a challenge every year. What we are seeing is that this year, it’s just – this isn’t an ORLADEYO specific thing; just broadly, the reauthorization process is just more work than ever. And so that’s why we think it could be a little bit down or flat to Q4, but patient growth trends are on track and no less than $320 million is very much on track.

Yes. And that part is really important to remember: patient numbers are going up each quarter, but the reason revenue was flat to slightly down is because we have more patients on free drug going to the reauthorization.

Great. Thank you.

Welcome.

The next question comes from Tazeen Ahmad of Bank of America. Please go ahead.

Hi, guys. Good morning and thank you for taking my question. On ORLADEYO, Jon, I am just wondering what do you think could change in order for sales to be above the minimum that you have just guided to for this year? So outside of negotiating with payers, where else would you see a potential for upside relative to how you are looking at the market right now?

Yes. I think for right now, we believe $320 million is the number, and that’s the number people should put in their model. But in terms of what could be a tailwind, I think Charlie’s team is more successful than we had planned around getting patients from free drug to pay drug. You’ve got this team expansion that they went through late last year. Maybe that has more of an uptick on revenue as well. Those could be things that could be a lift.

Okay. Great. And then maybe one question on your 10013, I think you have previously highlighted that there was no facilitation talk seen before in your frequent models. Is that still the case?

Yes, this is very different than the 9930. Your question is around 9930, comparison to 10013 of that, yes, this is very different from that.

Okay, thank you.

Welcome.

The next question comes from Chris Raymond of Piper Sandler. Please go ahead.

Thanks. And if you don’t mind me beating the dead horse here, it sounds like you guys are – I don’t want to answer a ton of questions on exactly what you saw, but I guess I’ll just ask on 10013, when would you be in a position to tell us exactly what you found? And what’s the path forward and the next steps for when the issues will be resolved? And then on the C2 program, I know you described this as a program that is in development, but can you maybe give a little bit more color maybe on the timeline pathway to be in the clinic on that program?

Yes, I’ll take those. The second one, you can take, Helen. You can take the first one. So what we said in January is the C2 programs in lead optimization. It’s hard to predict when it will get into toxicology Phase 1 studies, but it’s just lead optimization now. Once we pick a lead, we will go into toxicology and move forward from there, but we can’t give timing on that right now.

Yes. So on 10013, what we’re seeing is that we’re seeing something that is different. We’re seeing it at the same time point where we did see it before. What that means is that we need to learn more, we need to learn more about that difference and more about the nature of what we’re seeing. The goal here is to understand the safe range of exposures, and that’s the point of the non-clinical work at this point. Our next steps are to sweep the non-clinical side and a stance there also to go into the study patients that we’ve been planning and assess the patients to get to an understanding of both what is the safe range and what’s the effective range.

Yes, Chris, it’s an ongoing chronic toxicology study right now. And so until we’ve completed that, it’s hard to give you some sense of when we will have a better picture.

Great. Thank you.

The next question comes from Liisa Bayko of Evercore ISI. Please go ahead.

Hi, there. Thanks for taking my question. Can you give us a sense of the degree of free drug and sort of gross to net and where you’re at for the beginning of 2023?

Sure. Liisa, overall, what we’ve said is that based on our contract status, we expected at least 80% of patients to be on paid drug and 20% on free. In recent quarters, we’ve seen that pick up above 20%. And then it’s just a larger portion that will temporarily – pretty much all the patients are going through the authorization in Q1. And so a lot of them step back temporarily to free product. So overall, that plus the fact that we also have the impact of commercial co-pay assistance means you’re going to see the lowest gross to net in the first quarter.

Yes, and then it will normalize back up once we get into Q2, 3, and 4. When we were in Q4, Liisa, we saw gross net reimbursement products at around the expected rates.

Okay. Thanks. And can you tell us a little bit more – give us a little more color on the mini expansion that you described, what you want this business.

Yes. The essence of that was we expanded the number of sales regions. It was not a major sales force expansion, but we made our regions smaller, so we added more regional managers so that they can work closely with their teams as well as some of the top key opinion leaders. Simultaneously, we also added more to our market access team and our patient access specialist team so that we can do more to work with customers, particularly patients who help to get paid therapy.

Okay, thanks. And then just a follow-up to Chris’ question, are you – when will you get – when are you going to complete this preclinical toxicology study?

It will be sometime this year.

Okay. And any sense, do you think this might be something specific to the species and like what species have you been looking at?

That’s a really good question that we don’t have an answer to.

Okay. Can you mention the species just for…

Yes. Not at this time, no.

Okay. And then just final question for me, are you able to get clinically into what you think is an efficacious dose range or as you described going more slowly now in kind of your dose escalation, are you going to be kind of capped below what you think is the target efficacious dose?

Our hope is that we get to an effective dose in the safe range. I don’t think we can answer that question today, given what we’re seeing, but that’s the whole aim.

And I would add, we already know from the data that we presented in January excellent pressure on the alternative pathway complement of 24 hours already with the dose we have been evaluating in volunteers. So we have more to learn about the range and that information.

Okay, thank you.

Welcome.

The next question comes from Jon Wolleben of JMP Securities. Please go ahead.

Hey, thanks for taking the question. Just a couple on ORLADEYO, I wonder if you could tell us what the quarter-over-quarter patient growth was in the fourth quarter. And then, with regards to the $320 million guidance, what’s the breakdown between U.S. and ex-U.S. contribution there?

Sure, Jon. We haven’t specified the growth. What I can say is we are on the same trends, both in terms of new patient acquisition that we’ve seen over the last many quarters. And also our discontinuation rate has been very stable. So what that means is that every quarter, we’re growing nicely, and that gives us so much confidence in the $320 million this year and the long-term projection to $1 billion.

Yes. I think in terms of contribution from – the way I think about it, John, is the U.S. continues to be the majority of revenue. When we get to a point, and we will get to a point, hopefully, where we will split out the U.S. and ex-U.S., that will be when ex-U.S. accounts for around 10% of total revenue. When that will be, we will see. But at the moment, I think we’re doing really well in both the U.S. and from a global expansion.

Very helpful. Thank you.

The next question comes from Ken Cacciatore of Cowen & Company. Please go ahead.

Hey, team. Good morning. Obviously, it’s been a fantastic launch of ORLADEYO. You set up a great U.S. commercial infrastructure that would seemingly be attractive to many companies that either don’t have a U.S. infrastructure or would want some further leverage. Just looking at the P&L, the product is now profitable, which is a credit to the organization, excluding R&D, and you did it fast. So, we rarely see such a gap between a profitable product and kind of pipeline replenishment. Just wondering how you all think about maximizing the value of this period, which is growing a little bit now, and how you think about strategically maximizing that value.

Yes. Thanks, Ken. We agree with you that it’s off to a fantastic launch and have a real high degree of confidence that we’re getting to the $1 billion in peak sales and we’re on that trajectory. So on a stand-alone basis, it’s profitable today. I even said in my prepared remarks that with the investments that we’re making, we’re getting closer to profitability because revenue is growing faster than expense basically. The goal here is to have a second product that’s as big or bigger than ORLADEYO. That may take us longer with our pipeline. We’re also evaluating business development activities. We brought Clayton Fletcher on board recently, who’s a very experienced biotech business development person. We’re probably getting more inbound inquiries than we ever have in the history of BioCryst. So we will continue to evaluate those opportunities, making sure that if you’re bringing something in, it’s something that can create real value. We’re constantly looking at that as well.

Thank you.

Welcome.

The next question comes from Justin Kim of Oppenheimer. Please go ahead.

Hi, good morning. Thanks for taking the question. Just with the upcoming Quad AI meeting and based on the recent commercial progress, is there anything that needs to be better clarified with the prescriber base in attendance? Just wondering sort of what your goals are? And any changes in the dynamic of where new scripts are coming from, either from a patient perspective or a clinician?

Hi, Justin. So I think as far as clarify, we’re just continuing the messages that we’ve been delivering about how well ORLADEYO is working in patients, particularly over the long-term. You look at our long-term data or 96-week data where patients were getting down to 16 out of 17 months attack-free. What we will see at Quad AI is more data of the same coming out from our clinical trials that confirm that. It’s really just about getting to all these physicians and showing them how well ORLADEYO is working in clinical trials and in the real world. Additionally, the patients who do absolutely the best on ORLADEYO are those who switch from other prophylaxis products. Our goal long term is to give every patient who needs to be on prophylaxis, a chance to try ORLADEYO because most of them are going to do really well.

Yes. I think the other thing, Justin, is that there are doctors out there that believe their patients are controlled, and that’s good enough for them. What we’ve got to be able to do is say, no, a patient could do a whole lot better in terms of burden of therapy if they moved to a once-daily oral treatment. Part of Charlie’s expansion, where we’re having the regional business directors focus on key opinion leaders, is to break through even further and get the ones that haven’t prescribed more to start prescribing.

I guess I am just curious in terms of your views on the long-term growth trajectory. Is that mix of where the scripts are coming from expected to change, whether between the 500 and non-500 base? I mean, just trying to understand if that split of 50-50 is expected to continue and then for how long?

I think it’s a good question. I am really happy with that balance because what it shows is that we are reaching all parts of the market and we are growing in both segments. We’re constantly expanding the number of top 500 doctors who are new ORLADEYO prescribers, and we are seeing them go deeper into their lists achieving growth. So, there is - what it tells me is there is a lot of opportunity left in front of us, both amongst what healthcare providers can do and the number of patients that still haven’t experienced the benefit of ORLADEYO.

Yes. I think there are two really interesting pieces of evidence indicating we are going in that direction. One is quarter-over-quarter, we are expanding the prescriber base, and the second is ongoing market research shows that doctors are likely to prescribe more in 12 months than they currently prescribe. This includes both those who have not yet prescribed, and those who are currently prescribing more. These are encouraging signs that give us confidence in continued growth.

Great. Thanks so much.

You’re welcome.

The next question comes from Brian Abrahams of RBC Capital Markets. Please go ahead.

Hi. Good morning. Thanks for taking my questions. You guys have talked about a recent slower conversion from free drug to paid commercial drug in the fourth quarter. I just want to better understand this trend. Do you think this is reflecting just expanding to new physicians who may be less used to prescribing ORLADEYO? Are there ways to help educate those physicians about how to process the necessary paperwork, or is there anything different about these patients, either they have milder disease, or are more on prior prophylaxis or have different types of insurance plans that may be contributing to this greater lag time?

I will take the first question, Brian. Yes. It’s really much more of the first thing you said. As we expand to less experienced prescribers within the HAE space, it’s about providing all the necessary clinical history, lab tests, and complete information that payers want to see before approving the treatment for HAE. The team expansion we've described is aimed at helping with this process to get patients to paid therapy. I’m actually confident that we are going to make great improvements in this ratio of paid to free product, but it’s going to be a gradual process over the year.

Helen, do you want to take the 10013.

Yes. So on your question on 10013, this is non-clinical information we are reporting today. This ongoing study gives us more to learn. We are always in close touch with regulators over what's going on and what data comes in programs that are non-clinical and clinical. We have deferred the higher dose levels in our healthy volunteer study, so we're learning more about this information. We do plan to go forward with patients at therapeutic ranges. The non-clinical data will inform our understanding of the range of exposures, and we expect some delays in how quickly we can escalate doses in patients.

And Brian, if I could just come back, I realize that probably didn’t answer part of your question about patient mix. This issue does not relate to the patient mix. It’s all about the others that I described, helping doctors provide the necessary information to payers.

It's really helpful. Thanks, Charlie. Thanks, Helen. Appreciate it.

The next question comes from Maury Raycroft of Jefferies. Please go ahead.

Hi. Good morning and thanks for taking my questions. I was wondering for Quad AI later this week if you can provide some preview around observed similarities or differences in treating pediatric HAE patients. Additionally, can you remind me what the sNDA timeline could look like? How does the pediatric opportunity fit into your $1 billion peak sales estimate?

Sure. Regarding our pediatric clinical trial, it’s open and rolling. It will take some time to fully enroll until we get to the endpoint. What we are hearing is that there is a significant burden of treatment identified by both caregivers, parents, and patients. When a child experiences symptoms, the injectable treatment can be nearly worse than the attack itself. Therefore, there is a real demand for an oral therapy to improve quality of life. Long-term, we think this opportunity will be less about numbers and more about making life better for these kids. Moreover, being a genetic disease allows us the opportunity to tell the ORLADEYO story to entire families.

I think the other thing, Maury, is the formulation that we have, which we call granules. It’s similar to sprinkles; a size that could be sprinkled onto applesauce or yogurt, making it easier for children compared to a capsule. This approach is expected to improve experiences for pediatric patients. This is a customer for life and while it's not a huge market, it’s significant. We believe we can cultivate long-term relationships with these patients.

Got it. That’s helpful. It makes sense. And maybe one other quick question. Just for the 10013 delays, is that factored into the $375 million OpEx assumptions for next year? Can you talk more about OpEx assumptions in general for this year?

Yes. It’s factored in. The way to think about OpEx for the year is flat year-over-year. We’ve stated that commercial expenditures will increase based on the additions that Charlie has talked about predominantly here in the U.S. as well as expansion from a global perspective. For R&D, the delay is factored in. Depending on what we see on an ongoing basis, this may change when we get more information. But yes, it is currently factored in. Most importantly, with revenues increasing and with flattening OpEx, the convergence of those brings us closer to profitability, which adds much value for the company.

Got it. Thanks for taking my question.

The next question comes from Gena Wang of Barclays. Please go ahead.

Thank you for taking my questions. The first one is regarding 10013. So, just want to confirm, is it fair to say that we should not expect the FDA clinical hold regarding this program? And then my second question is regarding ORLADEYO. In early January, you mentioned that the retention rate is about 60%. Can you clarify if that is a one-year or three-month retention rate? And also, do you expect a similar retention rate to maintain in 2023?

So, the first question on 10013: we are not on clinical hold with this program. It’s a little difficult to say what will happen in the future, so that’s where we are today.

As far as the patient retention, Gena, yes, it is 60% for one year. We expect – what we are seeing in overall retention rates is stabilizing. This gives us part of our confidence for no less than $320 million this year. Therefore, we would expect a similar retention trend overall in 2023.

Thank you.

Our last question comes from Rohit Bhasin of Needham & Co. Please go ahead.

This is Rohit on for Serge. Thanks for taking our questions. Just in terms of peak sale estimates, do you still expect about 20% to 25% to come from ex-U.S. territories? And can you talk about your expectations for the long-term competitive landscape for ORLADEYO?

Sure. Hey Rohit. Absolutely, when we talk about the $1 billion, we still see about 20% coming from international sales. The trends in the 15 countries where we have launched so far give us confidence that we will achieve that 20%.

With regard to the competitors, it’s a crowded space, but specifically regarding oral treatments, it has been challenging for some to advance their programs. What this means for us is we have more time to get patients to try our drug and see if it works for them. We’ve learned that to switch, patients need a significant benefit they aren’t receiving from their current treatment. This remains consistent for injectables as well. I think a tailwind that we are curious about is if physicians, seeing new products come to market, might first consider trying an oral option before switching back to injectables.

Thank you.

You’re welcome.

This concludes the question-and-answer session. The conference has now also concluded. Thank you for attending today’s presentation, and you may now disconnect.