Biocryst Pharmaceuticals Inc (BCRX) September 2026 Conference Transcript

Okay. Good morning, everyone. I'm Jason Russell from the Morgan Stanley Banking Team. It's a pleasure to welcome Charlie Gehr here from Biocrist, the, quote, newly appointed CEO of Biocrist. I think he took the job on January 1st of this year. We're excited to have Biocrist here. It's obviously very topical given some of the recent news, and I think we'll get into that. So, Charlie, thanks for being here.

Thanks, Jason.

Maybe just to set the stage for a minute, so as I mentioned, you started as the CEO a long time with BioCris, you started as CEO at the beginning of this year. It kind of feels like BioCris is entering a new chapter. Obviously, Orladeo, which is the underpinning of the business, is a scaled commercial franchise generating operating profit. You took the step to bring in another asset with Nivenabart just a bit ago. which adds a second modality in HAE. We'll get to, you know, you have another data point coming towards the end of this year with BCX 17725, and you also just took moves on your own perspective on how you're going to, you know, drive the pipeline forward from here. So maybe with all of that, set the stage. Let's think about, you know, your vision. How is the vision for BioCris potentially evolved? And is that the result of kind of the maturity of the business or other things on your mind? Maybe just set the stage for where you can start.

Sure.

Absolutely.

And before I start, I'll be making, obviously, some forward-looking statements. And those statements have risks, which you can learn about at our website. For those of you who are not as familiar with Biocrist or who maybe were at some point in the past, Biocrist has been around for 40 years, but we're at a very different stage right now, so it's a different company. For most of that time, we did everything internally, in-house discovery, and we always had some good science, and that got us our drug, Orlodeo. But this year, we made a decision to pivot away from internal discovery because we've become a profitable company, and we think the best way to go forward is through external innovation to build on the success that we have with Orlodeo, which we'll talk about more, and to build a broader rare disease company. So as we look forward a few years, say to the end of 2030, four years from now, we see us with not just Orlodeo and Nevenobart on the market, but probably a third product, well over a billion dollars in revenue, on a very stable cost basis, growing profitability significantly, which we can then plow back into building a broader pipeline through external innovation. So we're really excited about where we're at, the strength of our business, and what we've got going in front of us.

Great. There's so much to unpack here. So maybe just to hit the evolution on the planned pipeline point first, First, you made a decision to shut down some longstanding capabilities around internal discovery. You just mentioned it sounds like you're not retreating from building the pipeline. What changed in your thinking to make that decision? You mentioned the profitability aspect. and which capabilities do you think are core to keeping at BioCris that do make you differentiate?

The big reason we made that shift is despite our past success, we realized we can just do more by looking at the broader opportunities out there in rare disease. We just weren't big enough to do enough internal programs, and so balancing the cost, balancing the probability of success, we can do more externally. And so this year I've been able to build a really strong team. Dr. Sandeep Menon, who's here in the audience, joined as chief R&D officer earlier this year with this shared vision of building a pipeline through external innovation. We added David Jenkins as our chief scientific officer, came over from Ipsen over the summer. And we're building other scientific leaders. So we are not pivoting away from science at all. The science we want now is to help us look at this broad set of opportunities out there and find things that we really believe in, limit our risk in what we acquire, and build a pipeline that way on our growing cash flow.

Right, so pull the thread. You've already taken a step. You acquired Astria, which brought in-house the Venobar. I assume you would agree that that's a case study for how you want to think about building out the franchise going forward.

I mean, Astra was, I would say, a perfect example, not necessarily the example of what we'll do every time. I mean, to find something in a space where we know so well in HAE, we probably never will find something exactly like that again. But the benefit of Astra and Nevenovar, we've got a late-stage asset there. So we're well set on the late-stage side. and the next things that we want to do are balancing our pipeline going earlier. So kind of phase one, phase two assets to complement what we already have. And in the near term, I think that's going to be much more affordable for us as well.

Great. So let's get into Orladeo. It's a franchise that launched over five years ago. I believe 2025 was your strongest year. as far as new patient ads, and so far this year you've seen similar trends. It's kind of an unusual trajectory in some sense, and for rare disease you often see these more hockey stick kind of launches. HAE is obviously a very unique market, a competitive market as well. And so I guess, you know, what are the factors at a high level? and we'll pull the onion back here a bit, but what are the factors that have continued to drive demand and allowed you to grow the franchise sitting here almost six years post-launch?

And HAE is kind of a unique space. I think it's an incredible rare disease success story, the fact that you've got, for a patient population of roughly 10,000 patients in the U.S., there have already been 11 branded products approved and I think another five or six in late-stage development, which is amazing, it comes down first to the product, so to have a differentiated product. Oral-A-Day was the only oral prophylactic product in the market and has been for the last six years, and so started there, but then it really comes down to the evidence around the product. And with all the options that patients and physicians have, the number one thing that they want is to control HAE attacks, as you can imagine. And so efficacy is super important. And what we've been able to show over time is how well Orlodeo works for most patients. And so when patients start on Orlodeo, 60% of them make it to a year, and that's because they're getting really good efficacy. So it's not a drug for everybody, but it's one that works really well for the majority of patients. And then the last piece is just how our team operates. From the very beginning prior to launch, we knew we were the small guys coming up against some really big competitors. And so we put a lot of emphasis on the skill sets of the team, the data that we collect, and the need to generate long-term real-world evidence, which is what's shown to the market, shown to physicians, to patients, very importantly to payers, how well Orlodeo has behaved in the real world. And that's been a big part of our continued growth and success.

So let's pull on that further. So what is it that the physician, you know, what are the specifics of the physician observations, behaviors? They've gotten more experience prescribing Orlodeo to their patients. You know, what are those tangible things that they see that perhaps, you know, are different than what we knew six years ago?

I mean, physicians start with, you know, it's nice to have data, but what's really important to them is their personal experience. And what I always say about HAE treaters is the great majority of HAE treaters in the U.S. are allergist immunologists, but the majority of allergist immunologists don't treat HAE. It's a special group who've decided to do this. And so you end up with physicians who are expert in their area. They may have five HAE patients. They may have 20 HAE patients. A few of them have even more than that. But they develop experience within their patient population. And as they've gotten used to prescribing Orlodeo, they've seen what I described. They see that it works really well for most of their patients, not every one of their patients. And then we've been able to feed back the real-world evidence on hundreds and now thousands of other patients to them that confirms their experience. And then they also see how we as a company work with their patients to make sure they have access, to make sure that that is never a problem for patients. And all of that leads to confidence in the drug and the company, and I think that's why we're still having our best demand ever this late post-launch.

So that's helpful, Culler. I mean, back to the demand side. I mean, HAE, I assume you would agree with the statement that if you have HAE, you know it. Is that a fair, I mean, do you have to go find these patients?

HAE is a pretty mature market. It's still growing, though, and you would think that the first HAE product launched at the U.S. back in, I think, late 2008, it's changed a lot since then. A lot of patients have come out of the woodwork because of the availability of therapy. and you're still hearing stories about even classic type 1 and 2 patients being diagnosed even as adults. Another big area, two big areas of growth in the market. One is patients with normal C1 inhibitor, which in the United States was a large population searching for answers and they didn't really have the evidence. A lot of doctors didn't believe in it. We've been able to provide the evidence in the real world again how well these patients are doing and that's been a big part of growth. It's over a third of patients on oral and AO at this point. And then I think the next frontier of growth is talking about kids with HAE. So we recently got the indication for HAE for patients 2 up to 12 years old with a different formulation, a pellets formulation versus the capsule. And having an oral for these kids, you can imagine, is huge because injections and kids don't mix well. and what we believe is it may lead to a transformation of how kids are treated. Classically, it was thought that maybe kids with HAE didn't become symptomatic until puberty. I think what the experts are learning is more of these kids were symptomatic than they realized, and an oral therapy may help unlock that. It's early days. We just launched with product at the beginning of August, but we're seeing demand that's ahead of our expectations, And we're excited about how that's going to help kids grow up differently and also the halo effect beyond that because, of course, it's a genetic disease.

And maybe just to frame it a little bit more, so you effectively have prophy versus on-demand, you have oral versus injectable. You've obviously pushed the market a lot to a significant share to the oral market. What are the dynamics on acute versus prophylactic today, and how are those evolving?

Over the last, so I've been in the HAE space for over a decade now, and in that time, I've seen the use of prophylaxis more than double in the patient population. So at this point, it's about 80% of diagnosed and treated patients are being treated with prophylaxis, and despite some advances in acute therapy, what we hear from doctors and patients is the goal, and it makes sense, the goal is to prevent attacks, and then most patients have occasional breakthrough attacks, and so you always need a rescue medicine, but patients, despite recent introduction of an oral acute therapy, patients aren't moving backwards. They're welcoming that, but they really want to prevent attacks, and I think that that's going to continue in the future.

Okay, so just to round this out on the patient experience, we talked about kind of the real world evidence. I appreciate all this is tied together. We talked about it from the physician perspective. You know, if you, I know you, you gather a ton of evidence from patients directly and surveys. I think there's an annual survey that you do with the patients. You know, what is the kind of rank order number one, two, three, you would say of like preference from a patient of what they're most focused on?

I mean, at this point it does come down to efficacy for patients at this point. I think if the market had evolved differently, if an oral drug were the first thing on the market, then maybe the vast majority would be on an oral. But already the majority of patients on prophy are on an injectable therapy, and they're doing well. And so what they always worry about is, as much as I might like an oral, I don't want to sacrifice anything. You've got to have efficacy. Number two is safety is always in there too particularly at this point where patients have options and experience. Nobody's going to make a trade off where they're worried about safety. And then modality becomes important after that. So independently I think the majority of patients would prefer an oral but not at the expense of other things. And then another piece is market access. Patients have experienced challenges with market access over time, and so having their product paid for is something that they worry about and it's something that they think about before they entertain the idea of switching therapies.

Okay, so maybe as a transition, some really good remarks just at the table. There was a big event last week, Chapter 3, data from a competitor I think you've been very clear and transparent on your perspective that you expected this data set to be effectively good and demonstrate that they have a real drug so rather than debate the nuances of if it will get approved and how that's going to play out what changes for you I mean, what were you assuming? What were you modeling? Was this a bare case, base case? Like, how do you frame that?

Yeah, so first of all, congratulations to Farveris. I think they did a really nice job with that study. And it was our base case. So, Jason, you mentioned, you alluded to the fact we do a big annual survey. So every year, and this goes back to before launch, we do a study, a big conjoint analysis, followed by a market simulation model that involves 100 patients, 175 HE treaters all in the U.S. and over 50 payers. And we give them the profiles of everything that's on the market today plus what's coming. And so when we did this most recently over the summer, we've been giving Decryctiband the profile basically that they delivered in Chapter 3. Actually, we gave them a little bit better efficacy in that. And what the simulation always shows is that, yes, once that drug launches, we expect that drug to start taking some of the new patient starts away from Orlodeo. Not all of them because of the familiarity with Orlodeo, so maybe it blunts our growth. But patients who are doing well on Orlodeo are unlikely to switch. And then we back this up with qualitative research, too, with the patients who are on Orlodeo today, and we show them the profile of everything to come, including this other one pill once a day with great efficacy, no side effects. And the answer we get back from patients on Orlodeo is, well, but that just looks like what I'm already on. Because for them, that's what they're on. They're on one pill once a day, great efficacy, and no side effects. The ones who didn't get that have already moved on. And so that's what gives us really good confidence about the future is that, you know, a new oral therapy could slow our growth, but it's not likely to take away the base that we've built. And then we'll continue growing, particularly in the pediatric indication beyond that.

So would it be fair to say that, you know, okay, I'm a patient, I have a preference for an oral, I tried Orlodeo. It worked. I'm more likely to stay with that regimen because I'm comfortable with it. Similarly, I tried Orlodeo. It didn't work. I went to a Profi injectable. That's a segment of patients that are likely to come back to try a new oral if they still have that preference. And then to your point, the incident market of new patients, you'll be both competing for. Is that a reasonable way to put it?

From the oral perspective, yes. And then this is where we're excited to have Nevenobar for the other part of the market.

Yeah, yeah. No, I think that's a great transition. So let's talk about Nevenobar. So why is Nevenobar strategically important? Is the central insight that both in oral, that there's very much different preferences for an oral and injectable, and I guess maybe as part of your answer, talk about, like, do these two things, will these two things cannibalize each other, or do you view them as complementary?

We really view it as fundamentally complementary, and that's why we were interested in acquiring Astrea. So there are about 5,000 patients in the U.S. market, and this is growing steadily, that are on injectable prophetherapies. As I mentioned, the market could have been different if an oral started, but patients were already on injectables. And what's really important beyond what I mentioned earlier about, you know, efficacy is number one, always will be number one, if a patient is thinking about switching, they have to have a reason to do that. So I mentioned, you know, when we show a profile of one pill once a day to patients in Orlodeo, they say, that's what I'm already on. When you show the profile of Nevenobar, which is every three or every six months, califrine inhibitor, really great efficacy in our phase two study. Patients are getting down to a mean attack rate of less than two per year. And by the way, the injections don't hurt because of the formulation. And so patients look at that, and the majority of patients on injectable therapy are on TaxIro, the longtime market leader. And patients say, oh, that looks like what I'm on, TaxIro, but better because of the dosing, because of the administration. And so for them, there's actually an impetus to switch. And doctors say the same thing. So that idea of having two or four injection days per year and really great efficacy in a modality, in an MOA that they know so well in calocrine inhibition, that's what really attracted us to Nevenobart, and we're thrilled how the program is rolling out at this point.

So I want to come back to the Q3 versus Q6 in a second, but maybe just we'll get there with the trial. So you're running a pivotal trial now. I think it's called Alpha Orbit. Over-enrolled, you're looking at the two doses. So is that a one-to-one-to-one? How is that, you know, powered? And I guess what makes the decision for you out of those data on will it be one? Will it be both? You know, what can we expect out of the trial?

So we fully expect, yes, that the balance between the doses is identical, you know, within the limits of randomization in the trial. But the goal is to have both doses in the label. And I talked about the phase two data. What we're seeing in the alpha solar phase two data is equal experience in every three months and every six months. And mind you, the every six months is two injections. The every three months is one. So you're getting the same amount of drug in a year. And what it's showing is the same reduction in attacks versus baseline, the same mean monthly. So we have high confidence that we're going to be able to get both of those doses into the label. And that's really significant because to have that option for patients, that becomes something that's really attractive to them. The study fully enrolled in June, and so what it means is a year from June, the last patient will reach 12 months, and we'll have a data readout in Q3 of next year on both the 6- and the 12-month endpoints in the study.

What about the physician angle? Does an allergist, you know, are they going to, you know, in some therapeutic areas that the physician might not want to not see their patient every six months for other reasons? So, you know, can you comment on that?

It's actually kind of neat with the way the dosing works. Physicians have long told us that because of the advances in prophetherapies and HAE, they'll say, you know, I used to see my patient four or six times a year because they were having attacks. Now I have to drag them in once a year to do the annual reauthorization. So it's become more of a challenge to get patients to come in because they're doing well. So they actually like this idea of I've had physicians, some of whom are investigators of the trial, say, yeah, I'm going to try to bring my patient in like every six months, not that they need help in dosing, but to kind of make it more of like go see your dentist every six months, You know, go see your doctor every six months, even though you're doing well. And so their physicians are very excited about this. And I think the fact that the study, as you said, over-enrolled and enrolled really quickly, it's the largest phase three pivotal study ever done in the space, and it enrolled as fast as any has ever done, it's because of the product profile.

Okay. Let's wrap up on HAE. One more question here. you build a great commercial infrastructure around Orladeo. Is that 100% portable over to Nevenobar? The operating leverage coming out of these two programs, I assume there's not a lot of additional spend and investment that you're going to have to make. That's exactly right.

Our team is super excited about having both. So we have 40 reps out there. We'll have 40 reps to launch Nevenobar, same team. And because of that complementary aspect that we talked about earlier, and because of the skills of the team, we just have two great options for the market. And so to put it in perspective, we're spending a little bit less than $150 million on sales and marketing at this point. So that's going to grow basically at cost of living increases. And so as the portfolio by the turn of the decade is a billion dollars plus and growing, that's incredible leverage. As I said earlier, we can plow back into continuing to build a rare disease portfolio.

Switching gears to the pipeline, this program did come out of your, from in-house, I believe, so BCX17725. It's actually the next data card that you'll have. for netherton syndrome. Talk to us about that data set that's coming, I believe, before you're in, what we're going to get, what we should expect, and what does it mean, depending on how it breaks as far as moving to the next stage.

Yeah, and just for those not familiar with netherton syndrome, it is a rare, predominantly skin condition, but not exclusively, but basically the uncontrolled tissue calocrine, KLK5, because of a genetic defect, causes skin to turn over much more quickly. And so patients from a phenotype perspective can look anything like really bad atomic dermatitis to something much worse. No therapies on the market, so it's tremendously underdiagnosed. There's some analogies to HAE before there were therapies. We think there's 3,000-plus patients in the U.S. market based on claims data that we've done. At the end of this year, so we have a KLK5 inhibitor, dosed sub-Q every two weeks, and we are doing a three-month study, sub-Q after an IV loading dose, three-month study in 12 patients, and we'll have that data at the end of this year, and that will inform what's next for this high-need condition.

Are you willing to set a bar or, you know, what are we looking for?

What are the implements? What we're looking for, we're not looking for perfection in this because, again, there's nothing for these patients. Physicians have, you know, only kind of over-the-counter topicals just to try to do some palliative care. What we're looking for is consistency of effect. So of the 12 patients, what proportion of them show response that is clinically meaningful, so 30% to 50% response based on scales of physician and patient measurement of effect. We're also looking, we're doing some dose ranging in the study, so we're looking for some evidence of dose response that can inform what's next. Is the next step going to pivotal? Is it going to more confirmatory studies? That's what we have to see. But we're excited about the program, and we're excited about the long-term market opportunity.

Great. We've got a couple minutes left. I want to turn back to where we started, which is more big-picture BD strategy. We talked about profitable company now. Balance sheet is getting stronger by the day. you've made some changes on the way you're going to approach innovation going forward so you're clearly going to be thinking about a meaningful BDE effort, adding additional programs here and there so without asking you to give us a particular disease or therapeutic area, walk us through the criteria so rare disease, is that number one?

Number one is rare disease. It's got to be a rare disease where we think there's, you know, we see the opportunity for a meaningful improvement for patients. That could be better efficacy. It could be better dosing, like in the case of Novenobart, different dosing, different MOA, but it's got to have a differentiating benefit that we see. We're going to be looking at the science to see if we believe in it. You know, nothing's going to be speculative, and so it's, you know, whether that is clinical evidence, whether it's really good preclinical data that gives us confidence in a target, biomarker data. So that's what Sandeep and his team will be looking for because we don't want to take flyers on things where there's not a reason to believe in the therapy. And then it's rare disease with chronic therapy similar to, like, what we see in HAE. So self-administered or home-administered therapy. We're not going to get into oncology. We're not going to get into hospital-delivered stuff. There's a huge need there in rare disease, but that's not our sweet spot.

So no AAP gene therapy or cell therapy?

Not going to do gene therapy, cell therapy. We can expand beyond orals and monoclonals, but we're not going to go too far afield. We'll stick to what we know.

And Eventibar wasn't a small transaction for you at the time. I mean, it was a meaningful step. So, I mean, any guidance around, you know, criteria around structure, creativity about what you're willing to do there, size, any frameworks there?

Yeah, so just for context, when we bought Astria, that was $700 million enterprise value earlier this year. And we did that because we could, but also because it was very strategic for us in the HAE space. The next things that we do are not likely to be that big. It's not going to be the same thing. It's more likely to be licensing-type deals, earlier stage, phase one, two. It could be in the range of $100 million, $200 million. We can afford that, but less likely to be full company acquisitions where basically we're not going to strain our balance sheet at this point. That's number one. And number two, now that we're profitable, this is a red line for us. We will never become unprofitable. But over the years, as we keep doing this, our operating leverage just keeps growing. And so deals could grow over time. But the next few that we do are more likely to be in the low hundreds up front and then structure on the back.

Never profitable. Never not profitable. You heard it here. Rare for a biotech company, but we're going to do it. That's a good place to end. Thank you. Thanks, Jason. Appreciate the time.